A MESSAGE TO PRINCIPAL VARIABLE LIFE AND VARIABLE ANNUITY CONTRACT OWNERS
Dear Contract Owner:
During the first half of 1998, continued low inflation, low interest rates,
modest economic growth and good corporate earnings created strong U.S. stock
prices and stable bond returns. Through June 30, 1998, the Dow Jones Industrial
Average returned 14.1%, while the Standard & Poor's 500 Composite Index
increased 17.7%. International markets did experience some difficulties, but as
fears of financial collapse in Asia subsided many rebounded nicely. As always,
we remind investors that past performance does not guarantee future results.
We maintain our practice of bringing new products and services to the public on
a regular basis. Earlier this year, several new accounts (investment options)
were added to the Principal Variable Contracts Fund. However, not all accounts
are available in every contract or every state. Please check your prospectus for
more complete information on the investment options available to you.
Principal Life Insurance Company has more exciting projects in the works. We
thank you for helping us enjoy another good year and look forward to serving all
your future investment needs.
CONTENTS
Page
Financial Statements and Highlights
Statements of Assets and Liabilities........................ 2
Statements of Operations ................................... 6
Statements of Changes in Net Assets......................... 10
Notes to Financial Statements............................... 18
Schedules of Investments
Aggressive Growth Account.............................. 28
Asset Allocation Account............................... 29
Balanced Account....................................... 34
Bond Account........................................... 38
Capital Value Account.................................. 40
Government Securities Account.......................... 42
Growth Account......................................... 43
High Yield Account..................................... 45
International Account.................................. 47
International SmallCap Account......................... 50
MicroCap Account....................................... 52
MidCap Account......................................... 53
MidCap Growth Account.................................. 55
Money Market Account................................... 58
Real Estate Account.................................... 60
SmallCap Account....................................... 60
SmallCap Growth Account................................ 62
SmallCap Value Account................................. 64
Utilities Account...................................... 67
Financial Highlights........................................ 70
June 30, 1998
STATEMENTS OF ASSETS AND LIABILITIES
(unaudited)
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
<TABLE>
<CAPTION>
Aggressive Asset
Growth Allocation Balanced Bond
Account Account Account Account
<S> <C> <C> <C> <C>
Investment in securities -- at cost................... $167,143,733 $71,070,074 $153,710,287 $88,444,252
Assets
Investment in securities -- at value (Note 4)......... $195,927,502 $77,369,186 $172,687,803 $92,714,185
Cash ................................................. 13,967,338 7,634,870 2,002 2,000
Receivables:
Dividends and interest........................... 190,825 602,345 1,265,582 1,806,642
Investment securities sold....................... 1,076,570 218,343 -- --
Capital Stock sold............................... 271,568 1,953 113,102 401,431
Total Assets 211,433,803 85,826,697 174,068,489 94,924,258
Liabilities
Accrued expenses...................................... 128,074 61,154 81,347 38,657
Payables:
Investment securities purchased.................. 8,015,104 472,379 3,199,969 542,770
Capital Stock reacquired......................... -- 15,263 2,709 194
Total Liabilities 8,143,178 548,796 3,284,025 581,621
Net Assets Applicable to Outstanding Shares ....... $203,290,625 $85,277,901 $170,784,464 $94,342,637
Net Assets Consist of:
Capital Stock......................................... $ 109,841 $ 67,508 $ 103,378 $ 76,713
Additional paid-in capital............................ 160,084,667 73,723,584 145,610,793 86,950,029
Accumulated undistributed net investment income....... 237,910 1,056,208 2,543,762 2,851,030
Accumulated undistributed net realized
gain (loss) from:
Investment transactions ......................... 14,074,438 4,131,489 3,549,015 194,932
Foreign currency transactions.................... -- -- -- --
Net unrealized appreciation (depreciation)
of investments................................... 28,783,769 6,299,112 18,977,516 4,269,933
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies............................... -- -- -- --
Total Net Assets $203,290,625 $85,277,901 $170,784,464 $94,342,637
Capital Stock (par value: $.01 a share)
Shares authorized..................................... 100,000,000 100,000,000 100,000,000 100,000,000
Shares issued and outstanding......................... 10,984,096 6,750,844 10,337,762 7,671,317
Net Asset Value Per Share .......................... $18.51 $12.63 $16.52 $12.30
</TABLE>
<TABLE>
<CAPTION>
Capital Government
Value Securities Growth
Account Account Account
<S> <C> <C> <C>
Investment in securities -- at cost................... $254,906,818 $110,896,268 $178,106,708
Assets
Investment in securities -- at value (Note 4)......... $353,745,094 $115,408,423 $246,308,805
Cash ................................................. 2,001 2,387 2,001
Receivables:
Dividends and interest........................... 364,050 948,621 137,132
Investment securities sold....................... -- -- --
Capital Stock sold............................... 147,141 165,594 232,896
Total Assets 354,258,286 116,525,025 246,680,834
Liabilities
Accrued expenses...................................... 127,430 47,858 87,201
Payables:
Investment securities purchased.................. -- 1,941,406 23,206,880
Capital Stock reacquired......................... 15,054 916 --
Total Liabilities 142,484 1,990,180 23,294,081
Net Assets Applicable to Outstanding Shares ....... $354,115,802 $114,534,845 $223,386,753
Net Assets Consist of:
Capital Stock......................................... $ 91,926 $ 102,879 $ 110,804
Additional paid-in capital............................ 244,534,680 107,062,275 152,214,431
Accumulated undistributed net investment income....... 3,251,018 3,229,176 1,353,905
Accumulated undistributed net realized
gain (loss) from:
Investment transactions ......................... 7,399,902 (371,640) 1,505,516
Foreign currency transactions.................... -- -- --
Net unrealized appreciation (depreciation)
of investments................................... 98,838,276 4,512,155 68,202,097
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies............................... -- -- --
Total Net Assets $354,115,802 $114,534,845 $223,386,753
Capital Stock (par value: $.01 a share)
Shares authorized..................................... 100,000,000 100,000,000 100,000,000
Shares issued and outstanding......................... 9,192,627 10,287,870 11,080,400
Net Asset Value Per Share .......................... $38.52 $11.13 $20.16
</TABLE>
<TABLE>
<CAPTION>
High International
Yield International SmallCap MicroCap
Account Account Account Account
<S> <C> <C> <C> <C>
Investment in securities -- at cost................... $15,130,838 $122,686,531 $11,130,025 $3,427,159
Assets
Investment in securities -- at value (Note 4)......... $15,145,825 $151,407,758 $11,105,654 $3,203,894
Cash ................................................. 153,221 19,352 10,791 2,185,210
Receivables:
Dividends and interest........................... 360,037 373,629 16,070 9,035
Investment securities sold....................... -- -- 372,195 1,795
Capital Stock sold............................... 120 144,870 23,396 10,418
Total Assets 15,659,203 151,945,609 11,528,106 5,410,352
Liabilities
Accrued expenses...................................... 6,796 130,727 20,089 2,897
Payables:
Investment securities purchased.................. 506,250 -- 517,239 9,584
Capital Stock reacquired......................... -- -- -- --
Total Liabilities 513,046 130,727 537,328 12,481
Net Assets Applicable to Outstanding Shares ....... $15,146,157 $151,814,882 $10,990,778 $5,397,871
Net Assets Consist of:
Capital Stock......................................... $ 16,483 $ 96,206 $ 11,167 $ 5,591
Additional paid-in capital............................ 14,923,463 119,760,783 11,130,511 5,573,410
Accumulated undistributed net investment income....... 630,254 1,786,178 33,226 21,664
Accumulated undistributed net realized
gain (loss) from:
Investment transactions ......................... (439,030) 1,492,482 (158,686) 20,471
Foreign currency transactions.................... -- (47,627) (940) --
Net unrealized appreciation (depreciation)
of investments................................... 14,987 28,721,226 (24,371) (223,265)
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in
foreign currencies............................... -- 5,634 (129) --
Total Net Assets $15,146,157 $151,814,882 $10,990,778 $5,397,871
Capital Stock (par value: $.01 a share)
Shares authorized..................................... 100,000,000 100,000,000 100,000,000 100,000,000
Shares issued and outstanding......................... 1,648,274 9,620,612 1,116,660 559,095
Net Asset Value Per Share .......................... $9.19 $15.78 $9.84 $9.65
</TABLE>
See accompanying notes.
June 30, 1998
STATEMENTS OF ASSETS AND LIABILITIES (Continued)
(unaudited)
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
<TABLE>
<CAPTION>
MidCap Money Real
MidCap Growth Market Estate
Account Account Account Account
<S> <C> <C> <C> <C>
Investment in securities -- at cost................... $196,325,579 $5,264,730 $57,332,464 $12,620,712
Assets
Investment in securities -- at value (Note 4)......... 268,538,417 5,038,064 57,332,464 12,635,936
Cash .......................................... 141,625 259,072 3,645 3,321
Receivables:
Dividends and interest........................... 104,182 3,058 171,473 18,785
Investment securities sold....................... -- 384,826 -- --
Capital Stock sold............................... 229,554 32,874 56,779 9,592
Total Assets 269,013,778 5,717,894 57,564,361 12,667,634
Liabilities
Accrued expenses...................................... 134,939 6,659 29,624 11,707
Payables:
Investment securities purchased.................. -- 399,968 103,037 1,955,620
Capital Stock reacquired......................... 11,913 -- 352,709 --
Indebtedness (Note 6)................................. -- -- -- --
Total Liabilities 146,852 406,627 485,370 1,967,327
Net Assets Applicable to Outstanding Shares ....... $268,866,926 $5,311,267 $57,078,991 $10,700,307
Net Assets Consist of:
Capital Stock......................................... $ 69,067 $ 5,591 $ 570,790 $ 10,589
Additional paid-in capital............................ 188,649,179 5,559,145 56,508,201 10,579,306
Accumulated undistributed net investment income
(operating loss)................................. 744,933 1,282 -- 95,188
Accumulated undistributed net realized
gain (loss) on investment transactions........... 7,190,909 (28,085) -- --
Net unrealized appreciation (depreciation)
of investments................................... 72,212,838 (226,666) -- 15,224
Total Net Assets $268,866,926 $5,311,267 $57,078,991 $10,700,307
Capital Stock (par value: $.01 a share)
Shares authorized..................................... 100,000,000 100,000,000 500,000,000 100,000,000
Shares issued and outstanding......................... 6,906,694 559,117 57,078,991 1,058,908
Net Asset Value Per Share .......................... $38.93 $9.50 $1.000 $10.11
</TABLE>
<TABLE>
<CAPTION>
SmallCap SmallCap
SmallCap Growth Value Utilities
Account Account Account Account
<S> <C> <C> <C> <C>
Investment in securities -- at cost................... $10,874,978 $5,547,720 $5,082,647 $11,186,578
Assets
Investment in securities -- at value (Note 4)......... 9,705,878 5,655,847 4,776,985 10,779,660
Cash .......................................... 2,152 1,851 309,940 40,318
Receivables:
Dividends and interest........................... 2,746 1,255 9,219 26,293
Investment securities sold....................... -- 51,984 13,700 --
Capital Stock sold............................... 39,871 26,042 7,600 13,361
Total Assets 9,750,647 5,736,979 5,117,444 10,859,632
Liabilities
Accrued expenses...................................... 7,302 2,749 8,991 3,637
Payables:
Investment securities purchased.................. -- 128,136 16,562 --
Capital Stock reacquired......................... -- -- -- --
Indebtedness (Note 6)................................. -- 80,000 -- --
Total Liabilities 7,302 210,885 25,553 3,637
Net Assets Applicable to Outstanding Shares ....... $ 9,743,345 $5,526,094 $5,091,891 $10,855,995
Net Assets Consist of:
Capital Stock......................................... $ 10,879 $ 5,656 $ 5,477 $ 11,226
Additional paid-in capital............................ 10,818,650 5,591,742 5,434,267 11,166,409
Accumulated undistributed net investment income
(operating loss)................................. 3,780 (6,339) 6,625 83,913
Accumulated undistributed net realized
gain (loss) on investment transactions........... 79,136 (173,092) (48,816) 1,365
Net unrealized appreciation (depreciation)
of investments................................... (1,169,100) 108,127 (305,662) (406,918)
Total Net Assets $ 9,743,345 $5,526,094 $5,091,891 $10,855,995
Capital Stock (par value: $.01 a share)
Shares authorized..................................... 100,000,000 100,000,000 100,000,000 100,000,000
Shares issued and outstanding......................... 1,087,931 565,594 547,684 1,122,614
Net Asset Value Per Share .......................... $8.96 $9.77 $9.30 $9.67
</TABLE>
<PAGE>
Six Months Ended June 30, 1998, Except as Noted
STATEMENTS OF OPERATIONS
(unaudited)
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
<TABLE>
<CAPTION>
Aggressive Asset
Growth Allocation Balanced Bond
Account Account Account Account
<S> <C> <C> <C> <C>
Net Investment Income
Income
Dividends.......................................... $ 796,598 $ 602,041 $ 814,916 $ --
Withholding tax on foreign dividends............... -- -- -- --
Interest........................................... 130,380 810,906 2,153,819 3,073,019
Total Income 926,978 1,412,947 2,968,735 3,073,019
Expenses:
Management and investment advisory fees (Note 3)... 678,889 323,556 440,196 216,528
Custodian fees..................................... 6,917 27,737 2,686 1,165
Directors' fees.................................... 3,830 3,894 3,880 3,942
Other.............................................. -- 1,693 773 545
Total Expenses 689,636 356,880 447,535 222,180
Net Investment Income 237,342 1,056,067 2,521,200 2,850,839
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currencies
Net realized gain (loss) from:
Investment transactions............................ 14,073,864 4,131,131 3,548,573 402,588
Foreign currency transactions...................... -- -- -- --
Change in unrealized appreciation/depreciation of:
Investments ....................................... 9,651,760 246,691 5,352,795 591,554
Translation of assets and liabilities in
foreign currencies............................... -- -- -- --
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies 23,725,624 4,377,822 8,901,368 994,142
Net Increase (Decrease) in Net Assets
Resulting from Operations $23,962,966 $5,433,889 $11,422,568 $ 3,844,981
<FN>
(a)Period from April 16, 1998 (date operations commenced) through June 30,1998.
(b)Period from April 9, 1998 (date operations commenced) through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Capital Government High
Value Securities Growth Yield
Account Account Account Account
<S> <C> <C> <C> <C>
Net Investment Income
Income
Dividends.......................................... $ 3,664,351 $ -- $ 898,098 $ --
Withholding tax on foreign dividends............... -- -- -- --
Interest........................................... 302,410 3,493,282 924,825 680,236
Total Income 3,966,761 3,493,282 1,822,923 680,236
Expenses:
Management and investment advisory fees (Note 3)... 707,856 257,726 463,470 44,631
Custodian fees..................................... 1,796 2,441 2,559 1,150
Directors' fees.................................... 3,905 3,960 3,886 3,905
Other.............................................. 1,894 307 2,267 329
Total Expenses 715,451 264,434 472,182 50,015
Net Investment Income 3,251,310 3,228,848 1,350,741 630,221
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currencies
Net realized gain (loss) from:
Investment transactions............................ 7,399,643 -- 1,568,676 290,868
Foreign currency transactions...................... -- -- -- --
Change in unrealized appreciation/depreciation of:
Investments ....................................... 23,905,690 793,877 27,366,395 (419,427)
Translation of assets and liabilities in
foreign currencies............................... -- -- -- --
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies 31,305,333 793,877 28,935,071 (128,559)
Net Increase (Decrease) in Net Assets
Resulting from Operations $34,556,643 $4,022,725 $30,285,812 $ 501,662
<FN>
(a)Period from April 16, 1998 (date operations commenced) through June 30,1998.
(b)Period from April 9, 1998 (date operations commenced) through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
International
International SmallCap MicroCap
Account Account(a) Account(b)
<S> <C> <C> <C>
Net Investment Income
Income
Dividends.......................................... $ 2,245,668 $ 48,194 $ 2,833
Withholding tax on foreign dividends............... (277,283) (3,221) --
Interest........................................... 305,893 20,521 31,941
Total Income 2,274,278 65,494 34,774
Expenses:
Management and investment advisory fees (Note 3)... 517,429 25,363 11,496
Custodian fees..................................... 27,875 6,080 728
Directors' fees.................................... 3,902 812 878
Other.............................................. 861 13 8
Total Expenses 550,067 32,268 13,110
Net Investment Income 1,724,211 33,226 21,664
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currencies
Net realized gain (loss) from:
Investment transactions............................ 1,700,951 (158,686) 20,471
Foreign currency transactions...................... (47,627) (940) --
Change in unrealized appreciation/depreciation of:
Investments ....................................... 13,918,650 (24,371) (223,265)
Translation of assets and liabilities in
foreign currencies............................... 6,387 (129) --
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies 15,578,361 (184,126) (202,794)
Net Increase (Decrease) in Net Assets
Resulting from Operations $17,302,572 $(150,900) $ (181,130)
<FN>
(a)Period from April 16, 1998 (date operations commenced) through June 30,1998.
(b)Period from April 9, 1998 (date operations commenced) through June 30, 1998.
</FN>
</TABLE>
Six Months Ended June 30, 1998, Except as Noted
<TABLE>
<CAPTION>
MidCap Money Real
MidCap Growth Market Estate
Account Account(a) Account Account(a)
<S> <C> <C> <C> <C>
Net Investment Income
Income:
Dividends.......................................... $ 745,034 $ 6,572 $ -- $ 21,685
Interest........................................... 773,167 6,064 1,543,461 91,662
Total Income 1,518,201 12,636 1,543,461 113,347
Expenses:
Management and investment advisory fees (Note 3)... 766,728 8,418 136,237 17,121
Custodian fees..................................... 2,022 2,159 4,774 270
Directors' fees.................................... 3,906 769 3,789 761
Other.............................................. 1,043 8 841 7
Total Expenses 773,699 11,354 145,641 18,159
Net Investment Income (operating loss) 744,502 1,282 1,397,820 95,188
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain (loss) from investment transactions... 7,191,700 (28,085) -- --
Change in unrealized appreciation/depreciation
of investments .................................... 14,354,699 (226,666) -- 15,224
Net Realized and Unrealized
Gain (Loss) on Investments 21,546,399 (254,751) -- 15,224
Net Increase (Decrease) in Net Assets
Resulting from Operations $22,290,901 $(253,469) $1,397,820 $110,412
<FN>
(a) Period from April 23, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(c) Period from April 2, 1998 (date operations commenced)
through June 30, 1998.
(d) Period from April 16, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
SmallCap SmallCap
SmallCap Growth Value Utilities
Account(b) Account(c) Account(d) Account(c)
<S> <C> <C> <C> <C>
Net Investment Income
Income:
Dividends.......................................... $ 10,026 $ 242 $ 17,576 $ 88,800
Interest........................................... 13,996 7,039 5,218 11,134
Total Income 24,022 7,281 22,794 99,934
Expenses:
Management and investment advisory fees (Note 3)... 18,988 11,888 11,003 14,508
Custodian fees..................................... 368 792 4,343 572
Directors' fees.................................... 875 919 816 928
Other.............................................. 11 21 7 13
Total Expenses 20,242 13,620 16,169 16,021
Net Investment Income (operating loss) 3,780 (6,339) 6,625 83,913
Net Realized and Unrealized Gain (Loss) on
Investments
Net realized gain (loss) from investment transactions... 79,136 (173,092) (48,816) 1,365
Change in unrealized appreciation/depreciation
of investments .................................... (1,169,100) 108,127 (305,662) (406,918)
Net Realized and Unrealized
Gain (Loss) on Investments (1,089,964) (64,965) (354,478) (405,553)
Net Increase (Decrease) in Net Assets
Resulting from Operations $(1,086,184) $(71,304) $(347,853) $(321,640)
<FN>
(a) Period from April 23, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(c) Period from April 2, 1998 (date operations commenced)
through June 30, 1998.
(d) Period from April 16, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
<TABLE>
<CAPTION>
Aggressive Growth Asset Allocation
Account Account
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30, December 31, June 30, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operations
Net investment income.................................. $ 237,342 $ 334,315 $ 1,056,067 $ 1,806,929
Net realized gain (loss) from investment transactions.. 14,073,864 18,939,200 4,131,131 7,276,506
Change in unrealized appreciation/depreciation
of investments.................................... 9,651,760 11,334,210 246,691 2,460,767
Net Increase (Decrease) in Net Assets
Resulting from Operations 23,962,966 30,607,725 5,433,889 11,544,202
Dividends and Distributions to Shareholders
From net investment income............................. (10,291) (323,456) (26,309) (1,780,479)
From net realized gain on investments.................. (2,705,769) (19,132,644) (945,178) (7,456,569)
Total Dividends and Distributions (2,716,060) (19,456,100) (971,487) (9,237,048)
Capital Share Transactions (Note 5)
Shares sold............................................ 38,075,777 52,190,051 8,939,905 13,556,305
Shares issued in reinvestment of dividends
and distributions................................. 2,694,091 18,759,779 627,185 5,515,569
Shares redeemed........................................ (7,908,152) (23,025,001) (5,556,035) (6,205,722)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 32,861,716 47,924,829 4,011,055 12,866,152
Total Increase (Decrease) 54,108,622 59,076,454 8,473,457 15,173,306
Net Assets
Beginning of period.................................... 149,182,003 90,105,549 76,804,444 61,631,138
End of period (including undistributed net
investment income as set forth below)............. $203,290,625 $149,182,003 $85,277,901 $76,804,444
Undistributed Net Investment Income ............... $ 237,910 $ 10,859 $ 1,056,208 $ 26,450
</TABLE>
<TABLE>
<CAPTION>
Balanced Bond
Account Account
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30, December 31, June 30, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Operations
Net investment income.................................. $ 2,521,200 $ 3,652,948 $ 2,850,839 $ 4,921,450
Net realized gain (loss) from investment transactions.. 3,548,573 9,950,708 402,588 63,897
Change in unrealized appreciation/depreciation
of investments.................................... 5,352,795 4,838,411 591,554 2,497,226
Net Increase (Decrease) in Net Assets
Resulting from Operations 11,422,568 18,442,067 3,844,981 7,482,573
Dividends and Distributions to Shareholders
From net investment income............................. (73,381) (3,557,005) (52,032) (4,869,227)
From net realized gain on investments.................. (1,797,839) (8,195,329) -- --
Total Dividends and Distributions (1,871,220) (11,752,334) (52,032) (4,869,227)
Capital Share Transactions (Note 5)
Shares sold............................................ 33,500,650 43,172,395 16,608,489 21,482,406
Shares issued in reinvestment of dividends
and distributions................................. 1,857,113 11,645,810 48,505 4,476,033
Shares redeemed........................................ (7,951,754) (20,838,500) (8,027,974) (10,037,678)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 27,406,009 33,979,705 8,629,020 15,920,761
Total Increase (Decrease) 36,957,357 40,669,438 12,421,969 18,534,107
Net Assets
Beginning of period.................................... 133,827,107 93,157,669 81,920,668 63,386,561
End of period (including undistributed net
investment income as set forth below)............. $170,784,464 $133,827,107 $94,342,637 $81,920,668
Undistributed Net Investment Income ............... $ 2,543,762 $ 95,943 $ 2,851,030 $ 52,223
</TABLE>
<TABLE>
<CAPTION>
Capital Value
Account
Six Months Year
Ended Ended
June 30, December 31,
1998 1997
<S> <C> <C>
Operations
Net investment income.................................. $ 3,251,310 $ 5,195,057
Net realized gain (loss) from investment transactions.. 7,399,643 13,829,214
Change in unrealized appreciation/depreciation
of investments.................................... 23,905,690 42,661,757
Net Increase (Decrease) in Net Assets
Resulting from Operations 34,556,643 61,686,028
Dividends and Distributions to Shareholders
From net investment income............................. (76,950) (5,118,399)
From net realized gain on investments.................. (910,354) (20,307,620)
Total Dividends and Distributions (987,304) (25,426,019)
Capital Share Transactions (Note 5)
Shares sold............................................ 41,586,432 72,054,366
Shares issued in reinvestment of dividends
and distributions................................. 982,387 25,282,153
Shares redeemed........................................ (7,253,565) (53,383,847)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 35,315,254 43,952,672
Total Increase (Decrease) 68,884,593 80,212,681
Net Assets
Beginning of period.................................... 285,231,209 205,018,528
End of period (including undistributed net
investment income as set forth below)............. $354,115,802 $285,231,209
Undistributed Net Investment Income ............... $ 3,251,018 $ 76,658
</TABLE>
<TABLE>
<CAPTION>
Government Securities Growth
Account Account
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30, December 31, June 30, December 31,
1998 1997 1998 1997
Operations
<S> <C> <C> <C> <C>
Net investment income.................................. $ 3,228,848 $ 5,437,912 $ 1,350,741 $ 1,787,589
Net realized gain (loss) from:
Investment transactions........................... -- 245,732 1,568,676 952,935
Foreign currency transactions..................... -- -- -- --
Change in unrealized appreciation/depreciation of
investments and translation of assets and
liabilities in foreign currencies................. 793,877 2,856,039 27,366,395 28,003,238
Net Increase (Decrease) in Net Assets
Resulting from Operations 4,022,725 8,539,683 30,285,812 30,743,762
Dividends and Distributions to Shareholders
From net investment income............................. (53,607) (5,429,722) -- (1,784,426)
From net realized gain on investments and foreign
currency transactions............................. -- -- (10,033) (955,318)
Excess distribution of net realized gain on
investments...................................... -- -- -- (50,744)
Total Dividends and Distributions (53,607) (5,429,722) (10,033) (2,790,488)
Capital Share Transactions (Note 5)
Shares sold............................................ 21,073,039 14,071,280 31,369,513 40,230,411
Shares issued in reinvestment of dividends
and distributions................................. 53,059 5,369,352 9,953 2,766,751
Shares redeemed........................................ (4,882,831) (13,327,991) (6,428,885) (2,401,953)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 16,243,267 6,112,641 24,950,581 40,595,209
Total Increase (Decrease) 20,212,385 9,222,602 55,226,360 68,548,483
Net Assets Beginning of period......................... 94,322,460 85,099,858 168,160,393 99,611,910
End of period (including undistributed net
investment income as set forth below)............. $114,534,845 $94,322,460 $223,386,753 $168,160,393
Undistributed Net Investment Income ............... $ 3,229,176 $ 53,935 $ 1,353,905 $ 3,164
</TABLE>
<TABLE>
<CAPTION>
High Yield International
Account Account
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30, December 31, June 30, December 31,
1998 1997 1998 1997
Operations
<S> <C> <C> <C> <C>
Net investment income.................................. $ 630,221 $ 1,244,723 $ 1,724,211 $ 1,990,607
Net realized gain (loss) from:
Investment transactions........................... 290,868 265,486 1,653,324 3,794,896
Foreign currency transactions..................... -- -- -- (46,872)
Change in unrealized appreciation/depreciation of
investments and translation of assets and
liabilities in foreign currencies................. (419,427) (25,873) 13,925,037 3,039,056
Net Increase (Decrease) in Net Assets
Resulting from Operations 501,662 1,484,336 17,302,572 8,777,687
Dividends and Distributions to Shareholders
From net investment income............................. (13,293) (1,242,776) -- (1,943,735)
From net realized gain on investments and foreign
currency transactions............................. -- -- (304,850) (3,888,380)
Excess distribution of net realized gain on
investments...................................... -- -- -- --
Total Dividends and Distributions (13,293) (1,242,776) (304,850) (5,832,115)
Capital Share Transactions (Note 5)
Shares sold............................................ 431,653 986,023 14,523,227 47,871,924
Shares issued in reinvestment of dividends
and distributions................................. 13,293 1,242,776 302,009 5,772,912
Shares redeemed........................................ (1,623,941) (373,919) (5,296,850) (2,983,649)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions (1,178,995) 1,854,880 9,528,386 50,661,187
Total Increase (Decrease) (690,626) 2,096,440 26,526,108 53,606,759
Net Assets Beginning of period......................... 15,836,783 13,740,343 125,288,774 71,682,015
End of period (including undistributed net
investment income as set forth below)............. $15,146,157 $15,836,783 $151,814,882 $125,288,774
Undistributed Net Investment Income ............... $ 630,254 $ 13,326 $ 1,786,178 $ 61,967
</TABLE>
<TABLE>
<CAPTION>
International SmallCap
Account
Period
Ended
June 30,
1998(a)
<S> <C>
Operations
Net investment income.................................. $ 33,226
Net realized gain (loss) from:
Investment transactions........................... (158,686)
Foreign currency transactions..................... (940)
Change in unrealized appreciation/depreciation of
investments and translation of assets and
liabilities in foreign currencies................. (24,500)
Net Increase (Decrease) in Net Assets
Resulting from Operations (150,900)
Dividends and Distributions to Shareholders
From net investment income............................. --
From net realized gain on investments and foreign
currency transactions............................. --
Excess distribution of net realized gain on
investments...................................... --
Total Dividends and Distributions --
Capital Share Transactions (Note 5)
Shares sold............................................ 11,146,617
Shares issued in reinvestment of dividends
and distributions................................. --
Shares redeemed........................................ (4,939)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 11,141,678
Total Increase (Decrease) $10,990,778
Net Assets Beginning of period......................... --
End of period (including undistributed net
investment income as set forth below)............. $10,990,778
Undistributed Net Investment Income ............... $ 33,226
(a) Period from April 16, 1998 (date operations commenced)
through June 30, 1998.
</TABLE>
<TABLE>
<CAPTION>
MicroCap MidCap
Account Account
Period Six Months Year
Ended Ended Ended
June 30, June 30, December 31,
1998(a) 1998 1997
<S> <C> <C> <C>
Operations
Net investment income.................................. $ 21,664 $ 744,502 $ 1,451,019
Net realized gain (loss) from investment transactions.. 20,471 7,191,700 4,081,051
Change in unrealized appreciation/depreciation
of investments................................... (223,265) 14,354,699 30,028,222
Net Increase (Decrease) in Net Assets
Resulting from Operations (181,130) 22,290,901 35,560,292
Dividends and Distributions to Shareholders
From net investment income............................. -- (26,453) (1,424,135)
From net realized gain on investments.................. -- (37,421) (4,499,721)
Total Dividends and Distributions -- (63,874) (5,923,856)
Capital Share Transactions (Note 5)
Shares sold............................................ 5,588,200 26,365,153 59,474,006
Shares issued in reinvestment of dividends
and distributions................................. -- 63,502 5,886,597
Shares redeemed........................................ (9,199) (4,418,395) (7,528,281)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 5,579,001 22,010,260 57,832,322
Total Increase (Decrease) 5,397,871 44,237,287 87,468,758
Net Assets
Beginning of period.................................... -- 224,629,639 137,160,881
End of period (including undistributed net
investment income as set forth below)............. $5,397,871 $268,866,926 $224,629,639
Undistributed Net Investment Income ............... $ 21,664 $ 744,933 $ 26,884
<FN>
(a) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 23, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
MidCap Growth Money Market
Account Account
Period Six Months Year
Ended Ended Ended
June 30, June 30, December 31,
1998(b) 1998 1997
<S> <C> <C> <C>
Operations
Net investment income.................................. $ 1,282 $1,397,820 $2 ,299,105
Net realized gain (loss) from investment transactions.. (28,085) -- --
Change in unrealized appreciation/depreciation
of investments................................... (226,666) -- --
Net Increase (Decrease) in Net Assets
Resulting from Operations (253,469) 1,397,820 2,299,105
Dividends and Distributions to Shareholders
From net investment income............................. -- (1,397,820) (2,299,105)
From net realized gain on investments.................. -- -- --
Total Dividends and Distributions -- (1,397,820) (2,299,105)
Capital Share Transactions (Note 5)
Shares sold............................................ 5,581,094 59,244,325 70,744,074
Shares issued in reinvestment of dividends
and distributions................................. -- 1,373,330 2,250,232
Shares redeemed........................................ (16,358) (50,853,582) (71,923,637)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 5,564,736 9,764,073 1,070,669
Total Increase (Decrease) 5,311,267 9,764,073 1,070,669
Net Assets
Beginning of period.................................... -- 47,314,918 46,244,249
End of period (including undistributed net
investment income as set forth below)............. $5,311,267 $57,078,991 $47,314,918
Undistributed Net Investment Income ............... $ 1,282 $ -- $ --
<FN>
(a) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 23, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Real Estate
Account
Period
Ended
June 30,
1998(b)
<S> <C>
Operations
Net investment income.................................. $ 95,188
Net realized gain (loss) from investment transactions.. --
Change in unrealized appreciation/depreciation
of investments................................... 15,224
Net Increase (Decrease) in Net Assets
Resulting from Operations 110,412
Dividends and Distributions to Shareholders
From net investment income............................. --
From net realized gain on investments.................. --
Total Dividends and Distributions --
Capital Share Transactions (Note 5)
Shares sold............................................ 10,600,482
Shares issued in reinvestment of dividends
and distributions................................. --
Shares redeemed........................................ (10,587)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 10,589,895
Total Increase (Decrease) 10,700,307
Net Assets
Beginning of period.................................... --
End of period (including undistributed net
investment income as set forth below)............. $10,700,307
Undistributed Net Investment Income ............... $ 95,188
<FN>
(a) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 23, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
SmallCap SmallCap Growth
Account Account
Period Period
Ended Ended
June 30, June 30,
1998(a) 1998(b)
<S> <C> <C>
Operations
Net investment income (operating loss)................. $ 3,780 $ (6,339)
Net realized gain (loss) from investment transactions.. 79,136 (173,092)
Change in unrealized appreciation/depreciation
of investments................................... (1,169,100) 108,127
Net Increase (Decrease) in Net Assets
Resulting from Operations (1,086,184) (71,304)
Capital Share Transactions (Note 5)
Shares sold............................................ 10,838,073 5,597,413
Shares issued in reinvestment of dividends
and distributions................................. -- --
Shares redeemed........................................ (8,544) (15)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 10,829,529 5,597,398
Total Increase (Decrease) 9,743,345 5,526,094
Net Assets
Beginning of period.................................... -- --
End of period [including undistributed net investment
income (operating loss) as set forth below]....... $ 9,743,345 $5,526,094
Undistributed Net Investment Income
(Operating Loss) ................................ $ 3,780 $ (6,339)
<FN>
(a) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 2, 1998 (date operations commenced)
through June 30, 1998.
(c) Period from April 16, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<TABLE>
<CAPTION>
SmallCap Value Utilities
Account Account
Period Period
Ended Ended
June 30, June 30,
1998(c) 1998(b)
<S> <C> <C>
Operations
Net investment income (operating loss)................. $ 6,625 $ 83,913
Net realized gain (loss) from investment transactions.. (48,816) 1,365
Change in unrealized appreciation/depreciation
of investments................................... (305,662) (406,918)
Net Increase (Decrease) in Net Assets
Resulting from Operations (347,853) (321,640)
Capital Share Transactions (Note 5)
Shares sold............................................ 5,454,877 11,187,280
Shares issued in reinvestment of dividends
and distributions................................. -- --
Shares redeemed........................................ (15,133) (9,645)
Net Increase (Decrease) in Net Assets
from Capital Share Transactions 5,439,744 11,177,635
Total Increase (Decrease) 5,091,891 10,855,995
Net Assets
Beginning of period.................................... -- --
End of period [including undistributed net investment
income (operating loss) as set forth below]....... $5,091,891 $10,855,995
Undistributed Net Investment Income
(Operating Loss) ................................ $ 6,625 $ 83,913
<FN>
(a) Period from April 9, 1998 (date operations commenced)
through June 30, 1998.
(b) Period from April 2, 1998 (date operations commenced)
through June 30, 1998.
(c) Period from April 16, 1998 (date operations commenced)
through June 30, 1998.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(unaudited)
<TABLE>
<S> <C> <C>
Aggressive Growth Account High Yield Account Money Market Account
Asset Allocation Account International Account Real Estate Account
Balanced Account International SmallCap Account SmallCap Account
Bond Account MicroCap Account SmallCap Growth Account
Capital Value Account MidCap Account SmallCap Value Account
Government Securities Account MidCap Growth Account Utilities Account
Growth Account
</TABLE>
Note 1 -- Significant Accounting Policies
Principal Variable Contracts Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end diversified
management investment company and operates in the mutual fund industry. The Fund
currently consists of 19 accounts (Aggressive Growth Account, Asset Allocation
Account, Balanced Account, Bond Account, Capital Value Account, Government
Securities Account, Growth Account, High Yield Account, International Account,
International SmallCap Account, MicroCap Account, MidCap Account, MidCap Growth
Account, Money Market Account, Real Estate Account, SmallCap Account, SmallCap
Growth Account, SmallCap Value Account and Utilities Account) (known as the
"Accounts").
Effective January 1, 1998 the following mutual funds were reorganized into the
Principal Variable Contracts Fund, Inc. as follows:
Former Fund Name Current Account Name
Principal Aggressive Growth Fund, Inc. Aggressive Growth Account
Principal Asset Allocation Fund, Inc. Asset Allocation Account
Principal Balanced Fund, Inc. Balanced Account
Principal Bond Fund, Inc. Bond Account
Principal Capital Accumulation Fund, Inc. Capital Value Account
Principal Government Securities Fund, Inc. Government Securities Account
Principal Growth Fund, Inc. Growth Account
Principal High Yield Fund, Inc. High Yield Account
Principal World Fund, Inc. International Account
Principal Emerging Growth Fund, Inc. MidCap Account
Principal Money Market Fund, Inc. Money Market Account
During April, 1998, Principal Mutual Life Insurance Company made initial
purchases of Capital Shares of eight new accounts as follows:
Date Capital
Operations Shares
Commenced Account Name Purchased
April 2, 1998 SmallCap Growth Account 500,000
April 2, 1998 Utilities Account 1,000,000
April 9, 1998 MicroCap Account 500,000
April 9, 1998 SmallCap Account 1,000,000
April 16, 1998 International SmallCap Account 1,000,000
April 16, 1998 SmallCap Value Account 500,000
April 23, 1998 MidCap Growth Account 500,000
April 23, 1998 Real Estate Account 1,000,000
The Accounts (with the exception of the Money Market Account) value securities
for which market quotations are readily available at market value, which is
determined using the last reported sale price or, if no sales are reported, as
is regularly the case for some securities traded over-the-counter, the last
reported bid price. When reliable market quotations are not considered to be
readily available, which may be the case, for example, with respect to certain
debt securities, preferred stocks and foreign securities, the investments are
valued by using market quotations, prices provided by market makers or estimates
of market values obtained from yield data and other factors relating to
instruments or securities with similar characteristics in accordance with
procedures established in good faith by the Fund's Board of Directors.
Securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange. The values of
such securities used in computing net asset value per share are usually
determined as of such times. Occasionally, events which affect the values of
such securities and foreign currency exchange rates may occur between the times
at which they are generally determined and the close of the New York Stock
Exchange and would therefore not be reflected in the computation of each
account's net asset value. If events materially affecting the value of such
securities occur during such period, then these securities are valued at their
fair value as determined in good faith by Principal Management Corporation
(formerly known as Princor Management Corporation) (the "Manager") under
procedures established and regularly reviewed by the Fund's Board of Directors.
To the extent each account invests in foreign securities listed on foreign
exchanges which trade on days on which an account does not determine its net
asset value, for example Saturdays and other customary national U.S. holidays,
each account's net asset value could be significantly affected on days when
shareholders have no access to the account.
Certain securities issued by companies in emerging market countries may have
more than one quoted valuation at any given point in time, sometimes referred to
as a "local" price and a "premium" price. The premium price is often a
negotiated price which may not consistently represent a price at which a
specific transaction can be effected. It is the policy of the International and
International SmallCap Accounts to value such securities at prices at which it
is expected those shares may be sold, and the Manager or any sub-adviser is
authorized to make such determinations subject to such oversight by the Fund's
Board of Directors as may from time to time be necessary.
The Money Market Account values its securities at amortized cost, which
approximates market. Under the amortized cost method, a security is valued by
applying a constant amortization to maturity of the difference between the
principal amount due at maturity and the cost of the security to the account.
With respect to the International and International SmallCap Accounts, the value
of foreign securities in foreign currency amounts is expressed in U.S. dollars
at the closing daily rate of exchange. The identified cost of the portfolio
holdings is translated at approximate rates prevailing when acquired. Income and
expense amounts are translated at approximate rates prevailing when received or
paid, with daily accruals of such amounts reported at approximate rates
prevailing at the date of valuation. Since the carrying amount of the foreign
securities is determined based on the exchange rate and market values at the
close of the period, it is not practicable to isolate that portion of the
results of operations arising as a result of changes in the foreign exchange
rates from the fluctuations arising from changes in the market prices of
securities during the period.
The Accounts record investment transactions generally one day after the trade
date, except for short-term investment transactions which are recorded generally
on the trade date. The identified cost basis has been used in determining the
net realized gain or loss from investment transactions and unrealized
appreciation or depreciation of investments. The Accounts record dividend income
on the ex-dividend date, except dividend income from foreign securities whereby
the ex-dividend date has passed; such dividends are recorded as soon as the
Accounts are informed of the ex-dividend date. Interest income is recognized on
an accrual basis.
With respect to the International and International SmallCap Accounts, reported
net realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between trade and settlement dates
on security transactions, and the difference between the amount of dividends and
foreign withholding taxes recorded on the books and the U.S. dollar equivalent
of the amounts actually received or paid. Net unrealized appreciation on
translation of assets and liabilities in foreign currencies arise from changes
in the exchange rate relating to assets and liabilities, other than investments
in securities, purchased and held in non-U.S. denominated currencies.
Note 1 -- Significant Accounting Policies (Continued)
The Accounts may, pursuant to an exemptive order issued by the Securities and
Exchange Commission, transfer uninvested funds into a joint trading account. The
order permits the Accounts' cash balances to be deposited into a single joint
account along with the cash of other registered investment companies managed by
Principal Management Corporation. These balances may be invested in one or more
short-term instruments.
With respect to the Money Market Account, all net investment income and any
realized gains and losses from investment transactions are declared as dividends
daily to shareholders of record as of that day. Dividends and distributions to
shareholders of the other accounts are recorded on the ex-dividend date.
Dividends and distributions to shareholders from net investment income and net
realized gain from investments and foreign currency transactions are determined
in accordance with federal income tax regulations, which may differ from
generally accepted accounting principles. Permanent book and tax basis
differences are reclassified within the stock based on their federal tax-basis
treatment; temporary differences do not require reclassification.
Reclassifications made for the International Account for the year ended December
31, 1997 aggregated $146,989. Other reclassifications made for the year ended
December 31, 1997 were not material. Dividends and distributions which exceed
net investment income and net realized capital gains for financial reporting
purposes, but not for tax purposes, are reported as dividends in excess of net
investment income or distributions in excess of net realized capital gains. To
the extent distributions exceed current and accumulated earnings and profits for
federal income tax purposes, they are reported as distributions of
paid-in-capital.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and 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.
Note 2 -- Federal Income Taxes
No provision for federal income taxes is considered necessary because each
account is qualified as a "regulated investment company" under the Internal
Revenue Code and intends to distribute each year substantially all of its net
investment income and realized capital gains to shareholders. The cost of
investments for federal income tax reporting purposes is approximately the same
as that for financial reporting purposes.
Note 3 -- Management Agreement and Transactions With Affiliates
The Fund has agreed to pay investment advisory and management fees, computed at
an annual percentage rate of each account's average daily net assets, to
Principal Management Corporation. Principal Management Corporation is wholly
owned by Princor Financial Services Corporation, a subsidiary of Principal
Mutual Life Insurance Company. Effective July 1, 1998, as approved by
policyowners, Principal Mutual Life Insurance Company became a stock life
insurance company renamed Principal Life Insurance Company. Principal Life
Insurance Company became a subsidiary of a new corporation, Principal Mutual
Holding Company. The annual rate used in this calculation for the Accounts is as
follows:
Net Assets Value of Accounts
(in millions)
First Next Next Next Over
$100 $100 $100 $100 $400
Aggressive Growth Account .80% .75% .70% .65% .60%
Asset Allocation Account .80 .75 .70 .65 .60
Balanced Account .60 .55 .50 .45 .40
Bond Account .50 .45 .40 .35 .30
Capital Value Account .50 .45 .40 .35 .30
Government Securities Account .50 .45 .40 .35 .30
Growth Account .50 .45 .40 .35 .30
High Yield Account .60 .55 .50 .45 .40
Net Assets Value of Accounts
(in millions)
First Next Next Next Over
$100 $100 $100 $100 $400
International Account .75% .70% .65% .60% .55%
International SmallCap Account 1.20 1.15 1.10 1.05 1.00
MicroCap Account 1.00 .95 .90 .85 .80
MidCap Account .65 .60 .55 .50 .45
MidCap Growth Account .90 .85 .80 .75 .70
Money Market Account .50 .45 .40 .35 .30
Real Estate Account .90 .85 .80 .75 .70
SmallCap Account .85 .80 .75 .70 .65
SmallCap Growth Account 1.00 .95 .90 .85 .80
SmallCap Value Account 1.10 1.05 1.00 .95 .90
Utilities Account .60 .55 .50 .45 .40
Brokerage commissions were paid to affiliates by certain of the Accounts, as
follows:
Period Ended Year Ended
June 30, December 31,
1998 1997
Aggressive Growth Account $ 15,839 $ --
Asset Allocation Account 9,485 2,974
Balanced Account 6,070 18,197
Capital Value Account -- 9,465
Growth Account 433 5,997
International Account 11,853 10,411
International SmallCap Account 4,557 N/A
MicroCap Account 992 N/A
MidCap Account 398 2,250
MidCap Growth Account 2,766 N/A
Real Estate Account 300 N/A
SmallCap Account 520 N/A
SmallCap Growth Account 180 N/A
All of the shares of the Fund are owned by Principal Mutual Life Insurance
Company and/or one or more Separate Accounts sponsored by Principal Mutual Life
Insurance Company.
Note 4 -- Investment Transactions
For the period ended June 30, 1998, the cost of investment securities purchased
and proceeds from investment securities sold (not including short-term
investments and U.S. government securities) by the Accounts were as follows:
<TABLE>
<CAPTION>
Purchases Sales Purchases Sales
<S> <C> <C> <C> <C>
Aggressive Growth Account 165,663,454 136,766,137 International SmallCap Account 11,444,305 865,594
Asset Allocation Account 55,184,259 55,166,464 MicroCap Account 3,534,308 127,620
Balanced Account 37,518,414 12,192,835 MidCap Account 47,485,160 19,899,506
Bond Account 17,636,685 5,798,601 MidCap Growth Account 5,895,058 602,243
Capital Value Account 59,931,628 27,177,182 Real Estate Account 4,055,026 --
Government Securities Account 16,022,609 2,682,573 SmallCap Account 10,834,661 676,744
Growth Account 34,549,478 5,720,633 SmallCap Growth Account 7,607,774 1,886,963
High Yield Account 6,439,867 6,754,340 SmallCap Value Account 5,583,706 452,243
International Account 34,874,956 19,582,907 Utilities Account 10,671,520 299,115
</TABLE>
At June 30, 1998, net unrealized appreciation (depreciation) of investments held
by the Accounts was composed of the following:
Net Unrealized
Appreciation
Gross Unrealized (Depreciation)
Appreciation (Depreciation) of Investments
Aggressive Growth Account $ 34,472,361 $ (5,688,592) $ 28,783,769
Asset Allocation Account 9,417,092 (3,117,980) 6,299,112
Balanced Account 22,641,487 (3,663,971) 18,977,516
Bond Account 4,809,726 (539,793) 4,269,933
Capital Value Account 103,084,525 (4,246,249) 98,838,276
Government Securities Account 4,539,414 (27,259) 4,512,155
Growth Account 69,922,991 (1,720,894) 68,202,097
High Yield Account 384,898 (369,911) 14,987
International Account 36,216,793 (7,495,566) 28,721,227
International SmallCap Account 807,724 (832,095) (24,371)
MicroCap Account 147,049 (370,314) (223,265)
MidCap Account 87,745,789 (15,532,951) 72,212,838
MidCap Growth Account 150,346 (377,012) (226,666)
Real Estate Account 74,299 (59,075) 15,224
SmallCap Account 334,399 (1,503,499) (1,169,100)
SmallCap Growth Account 539,119 (430,992) 108,127
SmallCap Value Account 138,320 (443,982) (305,662)
Utilities Account 146,472 (553,390) (406,918)
The Accounts may trade portfolio securities on a "to-be-announced" (TBA) basis.
In a TBA transaction, the account commits to purchase or sell securities for
which all specific information is not known at the time of the trade. Securities
purchased on a TBA basis are not settled until they are delivered to the
account, normally 15 to 30 days later. These transactions are subject to market
fluctuations and their current value is determined in the same manner as for
other portfolio securities. As of June 30, 1998, the Government Securities
Account and Balanced Account had TBA commitments involving securities with a
face amount of $2,000,000 and $3,300,000, cost of $1,941,406 and $3,199,969 and
market value of $1,938,900 and $3,199,185 respectively. These accounts have set
aside investment securities and other assets in excess of the commitments to
serve as collateral.
At June 30, 1998, the Accounts held the following securities which were
purchased in private placement transactions and may require registration in
order to effect a sale in the ordinary course of business.
<TABLE>
<CAPTION>
Value at Value as a
Date of June 30, Percentage of
Security Description Acquisition Cost 1998 Net Assets
<S> <C> <C> <C> <C> <C>
Asset Allocation AESOP Funding II LLC 5/5/98 $503,008 $ 504,400 0.59%
Account Israel Electric Corp. 12/11/96 249,525 257,768 0.30
Liberty Mutual 4/29/98 275,913 278,885 0.33
Wellsford Real Properties, Inc. 6/2/97 161,471 221,438 0.26
6/18/97 1,115 1,412 0.00
1,263,903 1.48
Bond Account John Hancock Mutual Life Insurance Co.
Surplus Notes 1/8/97 958,440 1,079,428 1.14
R&B Falcon Senior Notes 4/8/98 496,980 502,952 0.54
1,582,380 1.68
High Yield Account Chesapeake Energy Corp. Senior Notes,
Series A 4/17/98 $150,000 $ 150,375 1.00%
4/20/98 355,688 350,875 2.32
Foodmaker, Inc. Senior Subordinated Notes 4/08/98 99,832 100,125 0.66
Level 3 Communications, Inc. Senior Notes 4/23/98 99,579 97,375 0.64
4/23/98 100,375 97,375 0.64
Mastec, Inc. Senior Subordinated Notes 1/30/98 199,724 191,000 1.26
5/29/98 285,375 286,500 1.89
Rental Service Corp. Senior Subordinated
Notes 5/8/98 150,000 150,000 0.99
5/11/98 300,375 300,000 1.98
6/10/98 50,188 50,000 0.33
1,773,625 11.71
International Account Fokus Bank 6/25/96 347,410 496,251 0.33
Fokus Bank Rights 6/29/98 0 918 0.00
Kemira OY 12/9/96 314,077 268,697 0.18
12/10/96 131,955 109,546 0.07
12/11/96 241,385 200,489 0.13
2/26/97 322,301 289,366 0.19
4/10/97 294,742 289,365 0.19
Voest-Alpine Stahl 10/30/95 280,007 368,753 0.24
3/27/96 146,558 180,368 0.12
6/25/96 256,094 308,630 0.20
6/27/96 145,930 172,353 0.12
2,684,736 1.77
International
SmallCap Account Bure Investment Aktiebolaget AB 6/25/98 104,616 101,919 0.93
Computacenter PLC 5/21/98 153,082 174,959 1.59
Industrial & Financial Systems 4/17/98 182,628 250,265 2.28
5/6/98 16,602 20,972 0.19
5/6/98 22,081 29,361 0.27
Newsquest PLC 4/17/98 153,266 162,178 1.48
739,654 6.74
</TABLE>
The Accounts' investments are with various issuers in various industries. The
Schedules of Investments contained herein summarize concentrations of credit
risk by issuer and industry.
Note 5 -- Capital Share Transactions
Transactions in Capital Stock by account were as follows:
<TABLE>
<CAPTION>
Aggressive Asset Allocation Balanced Bond
Growth Account Account Account Account
Six Months Ended June 30, 1998:
<S> <C> <C> <C> <C>
Shares sold................................... 2,108,956 712,957 2,085,011 1,378,464
Shares issued in reinvestment of
dividends and distributions.................. 158,476 51,451 119,814 4,059
Shares redeemed............................... (436,565) (447,966) (495,722) (667,184)
Net Increase (Decrease) 1,830,867 316,442 1,710,103 715,339
Year Ended December 31, 1997:
Shares sold................................... 3,229,319 1,086,950 2,742,809 1,818,413
Shares issued in reinvestment of
dividends and distributions.................. 1,197,848 473,612 758,805 380,615
Shares redeemed............................... (1,478,619) (495,530) (1,325,111) (839,651)
Net Increase (Decrease) 2,948,548 1,065,032 2,176,503 1,359,377
</TABLE>
<TABLE>
<CAPTION>
Capital Government Growth High Yield
Value Account Securities Account Account Account
Six Months Ended June 30, 1998:
<S> <C> <C> <C> <C>
Shares sold................................... 1,117,793 1,928,644 1,640,002 47,460
Shares issued in reinvestment of
dividends and distributions.................. 27,807 4,881 553 1,475
Shares redeemed............................... (195,168) (446,131) (329,486) (180,264)
Net Increase (Decrease) 950,432 1,487,394 1,311,069 (131,329)
Year Ended December 31, 1997:
Shares sold................................... 2,210,809 1,306,805 2,535,060 105,429
Shares issued in reinvestment of
dividends and distributions.................. 777,056 501,475 163,713 139,336
Shares redeemed............................... (1,615,306) (1,263,266) (151,784) (40,585)
Net Increase (Decrease) 1,372,559 545,014 2,546,989 204,180
</TABLE>
<TABLE>
<CAPTION>
International International MicroCap MidCap
Account SmallCap Account(a) Account(b) Account
Six Months Ended June 30, 1998,
Except as Noted:
<S> <C> <C> <C> <C>
Shares sold................................... 935,043 1,117,156 560,039 687,018
Shares issued in reinvestment of
dividends and distributions.................. 21,223 -- -- 1,724
Shares redeemed............................... (352,290) (496) (944) (115,272)
Net Increase (Decrease) 603,976 1,116,660 559,095 573,470
Year Ended December 31, 1997:
Shares sold................................... 3,295,232 N/A N/A 1,770,659
Shares issued in reinvestment of
dividends and distributions.................. 422,856 N/A N/A 172,918
Shares redeemed............................... (205,446) N/A N/A (222,142)
Net Increase (Decrease) 3,512,642 1,721,435
</TABLE>
<TABLE>
<CAPTION>
MidCap Money Real Estate SmallCap
Growth Account(c) Market Account Account(c) Account(b)
Six Months Ended June 30, 1998,
Except as Noted:
<S> <C> <C> <C> <C>
Shares sold................................... 560,852 59,244,325 1,059,963 1,088,851
Shares issued in reinvestment of
dividends and distributions.................. -- 1,373,330 -- --
Shares redeemed............................... (1,735) (50,853,582) (1,055) (920)
Net Increase (Decrease) 559,117 9,764,073 1,058,908 1,087,931
Year Ended December 31, 1997:
Shares sold................................... N/A 70,744,074 N/A N/A
Shares issued in reinvestment of
dividends and distributions.................. N/A 2,250,232 N/A N/A
Shares redeemed............................... N/A (71,923,637) N/A N/A
Net Increase (Decrease) 1,070,669
</TABLE>
<TABLE>
<CAPTION>
SmallCap SmallCap Utilities
Growth Account(d) Value Account(a) Account(d)
Six Months Ended June 30, 1998,
Except as Noted:
<S> <C> <C> <C>
Shares sold................................... 565,596 549,329 1,123,632
Shares issued in reinvestment of
dividends and distributions.................. -- -- --
Shares redeemed............................... (2) (1,645) (1,018)
Net Increase (Decrease) 565,594 547,684 1,122,614
</TABLE>
(a) Period from April 16, 1998 (date operations commenced) through June 30,
1998.
(b) Period from April 9, 1998 (date operations commenced) through June
30, 1998.
(c) Period from April 23, 1998 (date operations commenced) through
June 30, 1998.
(d) Period from April 2, 1998 (date operations commenced)
through June 30, 1998.
Note 6 -- Line of Credit
The Accounts participate with other funds and portfolios managed by Principal
Management Corporation in an unsecured joint line of credit with a bank, which
allows them to borrow up to $60,000,000, collectively. Borrowings are made
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each participant, based on its
borrowings, at a rate equal to the Fed Funds Rate plus .50%. Additionally, a
commitment fee is charged at the annual rate of .08% on the average unused
portion of the line of credit. The commitment fee is allocated among the
participating funds, accounts and portfolios in proportion to their average net
assets during each quarter. At June 30, 1998, SmallCap Growth Account had an
outstanding borrowing of $80,000 at an annual rate of 6.06%. No other Accounts
had outstanding borrowings at June 30, 1998, under the line of credit.
Note 7 -- Year 2000 Problem (unaudited)
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Manager and other service providers do not properly process and
calculate date-related information and data from and after January 1, 2000. This
is commonly known as the "Year 2000 Problem." The Manager is taking steps it
believes are reasonably designed to address the Year 2000 Problem with respect
to computer systems it uses and to obtain reasonable assurances that comparable
steps are being taken by the Fund's other major service providers. At this time,
however, there can be no assurance that these steps will be sufficient to avoid
any adverse impact to the Fund.
<PAGE>
SCHEDULES OF INVESTMENTS
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
AGGRESSIVE GROWTH ACCOUNT
Shares
Held Value
Common Stocks (96.38%)
Advertising (0.45%)
Young & Rubicam, Inc. 28,400(a) $ 908,800
Air Transportation, Scheduled (8.70%)
Continental Airlines, Inc. 291,000 17,714,625
Aircraft & Parts (9.96%)
Gulfstream Aerospace Corp. 79,300(a) 3,687,450
Northrop Grumman Corp. 43,600 4,496,250
Textron, Inc. 24,200 1,734,838
United Technologies Corp. 111,900 10,350,750
20,269,288
Beverages (2.46%)
Coca-Cola Co. 22,200 1,898,100
Coca-Cola Enterprises 78,900 3,096,825
4,994,925
Cable & Other Pay TV Services (0.37%)
Comcast Corp., Class A 18,900 751,275
Commercial Banks (5.04%)
BankAmerica Corp. 26,800 2,316,525
Chase Manhattan 30,024 2,266,812
Citicorp 16,500 2,462,625
J.P. Morgan & Co., Inc. 11,500 1,346,937
MBNA Corp. 10,900 359,700
Wells Fargo & Co. 4,033 1,488,177
10,240,776
Communications Equipment (0.91%)
ADC Telecommunications, Inc. 6,400(a) 233,800
Associated Group, Inc., Class B 12,200(a) 484,950
Ciena Corp. 8,300(a) 577,888
Tellabs, Inc. 7,600(a) 544,350
1,840,988
Computer & Data Processing
Services (4.09%)
America Online, Inc. 18,000 1,908,000
Computer Associates International, Inc.18,800 1,044,575
Microsoft Corp. 49,400(a) 5,353,725
8,306,300
Computer & Office Equipment (3.22%)
Cisco Systems 18,150(a) 1,670,934
Dell Computer Corp. 13,700(a) 1,271,531
International Business Machines Corp. 8,400 964,425
International Game Technology 40,700 986,975
Pitney Bowes, Inc. 34,200 1,645,875
6,539,740
Consumer Products (2.19%)
Philip Morris Cos., Inc. 113,000 4,449,375
Drugs (1.83%)
Lilly (Eli) & Co. 12,500 825,781
Merck & Co., Inc. 13,500 1,805,625
Pfizer, Inc. 10,100 1,097,744
3,729,150
Eating & Drinking Places (0.78%)
Brinker International, Inc. 47,000 $ 904,750
Cracker Barrel Old Country Store, Inc.21,200 673,100
1,577,850
Electronic Components &
Accessories (1.28%)
Intel Corp. 20,600 1,526,975
Linear Technology Corp. 17,700 1,067,531
2,594,506
Farm & Garden Machinery (1.76%)
Case Corp. 74,100 3,575,325
Fire, Marine & Casualty
Insurance (12.38%)
Allstate Corp. 39,100 3,580,093
Berkshire Hathaway, Inc. 64(a) 5,011,520
General Re Corp. 7,700 1,951,950
Loews Corp. 105,900 9,226,538
Progressive Corp. 5,400 761,400
St. Paul Cos., Inc. 46,490 1,955,489
Travelers, Inc. 44,600 2,703,875
25,190,865
General Industrial Machinery (1.18%)
Tyco International Ltd. 38,200 2,406,600
Grain Mill Products (1.35%)
Quaker Oats 18,400 1,010,850
Ralston-Purina Group 14,800 1,728,825
2,739,675
Guided Missiles, Space Vehicles &
Parts (1.23%)
Cordant Technologies, Inc. 54,200 2,499,975
Hotels & Motels (0.53%)
Hilton Hotels Corp. 37,500 1,068,750
Household Audio &
Video Equipment (0.76%)
Time Warner, Inc. 18,100 1,546,419
Industrial Inorganic Chemicals (0.92%)
Monsanto Co. 33,400 1,866,225
Life Insurance (1.31%)
Nationwide Financial Services 21,900 1,116,900
Reinsurance Group of America, Inc. 30,300(a) 1,554,769
2,671,669
Lumber & Other Building
Materials (1.35%)
Home Depot, Inc. 32,950 2,736,909
Medical Services & Health
Insurance (0.38%)
Provident Companies, Inc. 22,300 769,350
Miscellaneous Amusement,
Recreation Service (1.18%)
Harrahs Entertainment, Inc. 12,800(a) 297,600
SFX Entertainment, Inc. 45,800(a) 2,101,075
2,398,675
Miscellaneous Investing (2.42%)
Cendant Corp. 235,605(a) 4,918,245
Miscellaneous Shopping Goods
Stores (0.43%)
Staples, Inc. 30,400(a) $ 879,700
Motor Vehicles & Equipment (2.86%)
General Motors Corp. 71,100 4,750,369
ITT Industries, Inc. 28,200 1,053,975
5,804,344
Newspapers (1.46%)
Gannett Co. 13,400 952,238
Pulitzer Publishing Co. 22,500 2,008,125
2,960,363
Office Furniture (1.47%)
Knoll, Inc. 101,500(a) 2,994,250
Oil & Gas Field Services (0.85%)
Diamond Offshore Drilling 26,200 1,048,000
Schlumberger Ltd. 10,000 683,125
1,731,125
Periodicals (0.85%)
Primedia, Inc. 127,700(a) 1,731,931
Personal Credit Institutions (3.56%)
American Express Co. 63,500 7,239,000
Photographic Equipment &
Supplies (1.39%)
Xerox Corp. 27,900 2,835,338
Plastic Materials & Synthetics (1.09%)
Du Pont (E.I.) De Nemour 29,600 2,208,900
Professional & Commercial
Equipment (0.71%)
Ingram Micro, Inc. 32,400(a) 1,433,700
Radio & Television Broadcasting (5.62%)
Clear Channel Communications 104,700(a) 11,425,387
Savings Institutions (0.32%)
Washington Mutual, Inc. 15,150 658,078
Search & Navigation Equipment (2.07%)
Litton Industries, Inc. 71,200(a) 4,200,800
Security Brokers & Dealers (0.97%)
Merrill Lynch & Co., Inc. 21,300 1,964,925
Sugar & Confectionery Products (0.79%)
Wrigley (Wm.) Jr. Co. 16,300 1,597,400
Surety Insurance (1.40%)
Ace Ltd. 43,600 1,700,400
CMAC Investment Corp. 18,600 1,143,900
2,844,300
Telephone Communications (2.51%)
Associated Group, Inc., Class A 14,200(a) 582,200
AT&T Corp. 30,300 1,730,888
Motorola, Inc. 15,000 788,437
Worldcom, Inc. 41,500(a) 2,010,156
5,111,681
Total Portfolio Investments (96.38%) 195,927,502
Cash and receivables, net of liabilities (3.62%) $ 7,363,123
Total Net Assets (100.00%) $203,290,625
(a) Non-income producing security - No dividend paid during the past twelve
months.
ASSET ALLOCATION ACCOUNT
Shares
Held Value
Common Stocks (58.80%)
Advertising (0.02%)
R.H. Donnelley Corp. 5,600 $ 17,150
Aerospace Industries (0.77%)
Cordant Technologies, Inc. 14,300 659,588
Air Transportation, Scheduled (5.10%)
America West Holdings Corp., Class B 900(a) 25,706
British Airways PLC ADR 1,400 150,588
Cathay Pacific Airways ADR 8,500 29,892
Continental Airlines, Inc. 63,100(a) 3,841,212
KLM Royal Dutch Airlines 7,471 305,844
4,353,242
Aircraft & Parts (2.89%)
Gulfstream Aerospace Corp. 8,100(a) 376,650
Indigo Aviation AB Sponsored ADR 7,900(a) 85,912
Northrop Grumman Corp. 5,900 608,438
Tristar Aerospace Co. 1,400(a) 21,700
United Technologies Corp. 14,800 1,369,000
2,461,700
Beverages (0.76%)
Bass PLC ADR 8,928 165,726
Coca-Cola Enterprises 6,700 262,975
Kirin Brewery Co. Ltd. ADR 2,300 219,650
648,351
Blast Furnace & Basic Steel
Products (0.12%)
Australian National Industries 8,960 20,640
British Steel PLC ADR 3,500 79,625
100,265
Cement, Hydraulic (0.03%)
Southdown, Inc. 300 21,413
Chemicals & Allied Products (0.96%)
Asahi Chemical Industry Co. ADR 4,100 147,710
Bayer AG Sponsored ADR 10,735 555,473
Mitsubishi Chemical Corp. ADR 6,100 110,322
813,505
Combination Utility Services (0.46%)
CIA Energetica de Minas Cemig ADR 5,286 163,615
Montana Power Co. 1,600 55,600
NIPSCO Industries, Inc. 6,100 170,800
390,015
Commercial Banks (5.84%)
ABN-AMRO Holdings NV ADR 30,429 $ 713,180
Allied Irish Banks ADR 2,900 248,856
Banc One Corp. 1,560 87,067
Banco Central ADR 6,500 203,125
BankAmerica Corp. 4,600 397,612
BankBoston Corp. 2,600 144,625
Bankers Trust Corp. 1,650 191,503
Barclays PLC ADR 5,571 640,665
Brierly Investments Ltd. ADR 5,550 55,314
Chase Manhattan Corp. 2,480 187,240
Citicorp 5,500 820,875
Commerzbank AG ADR 3,600 137,017
Fleet Financial Group, Inc. 1,900 158,650
HSBC Holdings ADR 600 146,737
J.P. Morgan & Co., Inc. 1,100 128,838
Mellon Bank Corp. 1,200 83,550
National Westminster ADR 1,900 204,250
PNC Financial Corp. 2,500 134,531
Wells Fargo & Co. 400 147,600
Westpac Banking ADR 4,900 147,306
4,978,541
Commercial Printing (0.21%)
DAI Nippon Printing Co. 1,100 175,559
Communications Equipment (0.85%)
Alcatel Alsthom ADR 4,700 191,231
Associated Group, Inc., Class B 3,000(a) 119,250
Harris Corp. 5,500 245,781
Matsushita Electrical ADR 800 128,600
Tellabs, Inc. 500(a) 35,813
720,675
Communications Services, NEC (0.05%)
Comsat Corp. 1,400 39,638
Computer & Data Processing
Services (0.81%)
Compuware Corp. 500(a) 25,562
Microsoft Corp. 5,000(a) 541,875
Peoplesoft, Inc. 800(a) 37,600
Primark Corp. 1,800(a) 56,363
Sungard Data Systems, Inc. 800(a) 30,700
692,100
Computer & Office Equipment (0.51%)
Hitachi Ltd. ADR 2,900 187,050
International Game Technology 3,000 72,750
Pitney Bowes, Inc. 3,000 144,375
Seagate Technology, Inc. 1,300(a) 30,956
435,131
Concrete, Gypsum, & Plaster
Products (0.14%)
Italcementi Fabriche SPA ADR 13,000 116,869
Concrete Work (0.07%)
Pioneer International Ltd. ADR 25,000 59,603
Construction & Related
Machinery (0.22%)
Kajima Corp. ADR 2,900 $ 79,403
Komatsu Ltd. ADR 5,500 106,842
186,245
Consumer Products (0.19%)
Philip Morris Cos., Inc. 4,150 163,406
Crude Petroleum & Natural Gas (0.61%)
Broken Hill Proprietary Ltd. ADR 2,200 37,262
Petrofina SA ADR 2,900 118,900
Societe Generale ADR 3,600 149,692
USX-Marathon Group, Inc. 6,100 209,306
515,160
Dance Studios, Schools & Halls (0.01%)
Marquee Group, Inc. 2,100(a) 12,469
Department Stores (0.29%)
Ames Department Stores, Inc. 1,500(a) 39,469
Marui Corp. ADR 2,800 83,525
Penney (J.C.) Co. 1,700 122,931
245,925
Drugs (1.10%)
Medicis Pharmaceutical Corp. 1,000(a) 36,500
Novartis AG Sponsored ADR 2,879 239,535
Novo Nordisk ADR 3,200 220,200
Nycomed Amersham PLC ADR 8,569 309,555
Smithkline Beecham PLC ADR 2,200 133,100
938,890
Drugs, Proprietaries & Sundries (0.05%)
Amway Japan Ltd. ADR 6,833 37,154
Eating & Drinking Places (0.18%)
Brinker International, Inc. 1,700(a) 32,725
Host Marriott Corp. 3,900(a) 69,469
Sonic Corp. 2,400(a) 53,700
155,894
Electric Services (0.77%)
Endesa SA ADR 5,600 121,100
EVN Energie-Vansorgung Nied ADR 3,600 107,745
National Power ADR 3,300 121,687
Pinnacle West Capital Corp. 3,200 144,000
Shandong Huaneng Power 8,000 43,000
Texas Utilities Holdings 2,900 120,712
658,244
Electronic Components &
Accessories (0.61%)
Kyocera Corp. ADR 1,500 145,781
Linear Technology Corp. 1,100 66,344
Mercury Computer Systems, Inc. 100(a) 1,450
Sanmina Corp. 1,200(a) 52,050
Texas Instruments 3,748 218,555
Xilinx, Inc. 900(a) 30,600
514,780
Electronic Distribution
Equipment (0.78%)
Phillips NV ADR 7,769 660,365
Environmental Quality (0.02%)
MPW Industrial Services Group, Inc. 900(a) 12,150
Farm & Garden Machinery (0.76%)
Case Corp. 13,400 $ 646,550
Finance Services (0.29%)
Conning Corp. 700 13,650
Nomura Securities Co. Ltd. ADR 2,000 232,734
246,384
Fire, Marine, & Casualty
Insurance (4.34%)
Allstate Corp. 6,800 622,625
General Re Corp. 2,800 709,800
Loews Corp. 20,000 1,742,500
Mercury General Corp. 800 51,550
Mutual Risk Management Ltd. 1,200 43,725
Orion Capital Corp. 2,400 134,100
St. Paul Cos., Inc. 3,800 159,838
Tokio Marine & Fire Insurance ADR 4,600 234,025
3,698,163
Footwear, Except Rubber (0.44%)
Olivetti & Co. SPA ADR 253,968 377,904
Furniture & Home Furnishings
Stores (0.01%)
Guitar Center, Inc. 400(a) 12,050
General Industrial Machinery (0.67%)
Amergroup Ltd. ADR 5,500(a) 53,130
SKF AB ADR 15,370 279,542
Tyco International Ltd. 3,800 239,400
572,072
Grain Mill Products (0.37%)
Quaker Oats Co. 1,700 93,394
Ralston-Ralston Purina Group 1,900 221,944
315,338
Groceries & Related Products (0.13%)
U.S. Foodservice, Inc. 3,100(a) 108,694
Grocery Stores (0.10%)
Koninklijke Bijenkorf Beheer NV ADR 2,400 84,061
Holding Offices (0.22%)
Jardine Strategic Holdings Ltd. ADR 10,000 38,000
Trizec Hahn Corp. 6,934 148,648
186,648
Hotels & Motels (0.43%)
Four Seasons Hotel, Inc. 1,200 42,300
Hilton Hotels Corp. 3,400 96,900
John Q. Hammons Hotels, Inc. 3,300 23,306
Ladbroke Group ADR 18500 204,187
366,693
Household Audio & Video
Equipment (0.25%)
Sony Corp. ADR 2,500 215,156
Household Furniture (0.06%)
Furniture Brands International, Inc. 1,700(a) 47,706
Industrial Inorganic Chemicals (0.85%)
Akzo ADR 4,283 474,878
Monsanto Co. 3,200 178,800
Olin Corp. 1,800 75,037
728,715
Industrial Organic Chemicals (0.09%)
Nova Corp. ADR 6,700 $ 77,469
Iron & Steel Foundries (0.24%)
Howmet International, Inc. 1,400(a) 21,000
Kawasaki Steel Corp. ADR 7,900 142,306
Kubota Corp. ADR 850 39,100
202,406
Life Insurance (0.95%)
American General Corp. 2,700 192,206
Lincoln National Corp. 2,800 255,850
Reinsurance Group of America, Inc. 1,300(a) 76,863
Reinsurance Group of America, Inc.,
Non-Voting 5,600(a) 287,350
812,269
Lumber & Construction Materials (0.04%)
Martin Marietta Materials, Inc. 800 36,000
Mailing, Reproduction,
Stenographic (0.06%)
Advo, Inc. 1,900(a) 53,556
Management & Public Relations (0.63%)
Nielsen Media Research 77,800 340,375
Ogden Corp. 5,400 149,513
Steven Myers & Associates, Inc. 2,300(a) 44,275
534,163
Meat Products (0.69%)
Groupe Danone 10,764 592,020
Men's & Boys' Clothing Stores (0.02%)
Dave & Busters, Inc. 800(a) 19,900
Metalworking Machinery (0.17%)
Makita Corp. ADR 13,000 148,688
Miscellaneous Amusement,
Recreation Service (0.47%)
SFX Entertainment, Inc. 7,900(a) 362,412
Station Casinos, Inc. 2,900(a) 42,594
405,006
Miscellaneous Chemical
Products (0.19%)
Millenium Chemicals, Inc. 4,800 162,600
Miscellaneous Converted Paper
Products (0.00%)
P.T. Inti Indorayon Utama ADR 10,000(a) 1,114
Miscellaneous Electrical Equipment &
Supplies (0.24%)
TDK Corp. ADR 2,800 208,600
Miscellaneous Food & Kindred
Products (0.25%)
Nestle Reg. ADR 2,000 214,001
Miscellaneous Investing (5.91%)
Avalon Bay Communities, Inc. 4,400 167,200
Bedford Property Investors 4,000 73,000
Brandywine Realty Trust 9,400 210,325
Burnham Pacific Properties, Inc. 17,300 245,444
Miscellaneous Investing (Continued)
Carramerica Realty Corp. 13,200 $ 374,550
CBL & Associates Properties, Inc. 1,800 43,650
Cendant Corp. 20,997(a) 438,312
Chateau Properties 11,353 326,399
Crescent Real Estate Equities Co. 200 6,725
Equity Office Properties Trust 5,719 162,277
Equity Residential Properties Trust 1,400 66,412
Essex Property Trust, Inc. 8,700 269,700
Federal Realty Investment Trust 12,100 291,156
Great Lakes Reit, Inc. 8,800 153,450
Irvine Apartment Communities, Inc. 4,100 118,644
Kilroy Realty Corp. 2,400 60,000
Mack-Cali Realty Corp. 2,900 99,687
Manufactured Home Communities, Inc. 700 16,887
Pan Pacific Retail Properties, Inc. 3,000 79,462
Pennsylvania Real Estate 3,500 77,656
Prime Group Realty Trust, Inc. 9,200 157,550
Public Storage, Inc. 2,300 64,400
Ramco-Gershenson Properties 100 1,900
Reckson Associates Realty Corp. 3,900 92,138
Reckson Service Industries, Inc. 624 2,067
Regency Realty Corp. 5,000 125,625
Security Capital Atlantic, Inc. 10,052 224,285
Shurgard Storage Center 1,800 49,950
Spieker Properties, Inc. 1,300 50,375
Starwood Hotels & Resorts 5,690 274,898
Sun Communities, Inc. 2,400 79,500
Taubman Centers, Inc. 18,500 263,625
Urban Shopping Centers, Inc. 3,000 94,500
Vornado Realty Trust 1,400 55,563
Wellsford Real Properties, Inc. 15,777(a)(b) 222,850
5,040,162
Miscellaneous Non-Durable
Goods (0.16%)
Mitsubishi Corp. ADR 11,000 136,325
Miscellaneous Shopping Goods
Stores (0.12%)
Dollar Tree Stores, Inc. 450(a) 18,281
Staples, Inc. 2,800(a) 81,025
99,306
Miscellaneous Special Trade
Contractors (0.05%)
Hang Lung Development Co. ADR 9,400 46,705
Motor Vehicles & Equipment (2.01%)
Fiat Spa ADR 5,170 113,740
General Motors Corp. 8,900 594,631
Meritor Automotive, Inc. 7,666 183,984
Navistar Intl. Corp. 3,500(a) 101,063
Toyota Motor Corp. ADR 8,600 446,125
Volkswagen AG ADR 1,400 270,377
1,709,920
Motor Vehicles, Parts & Supplies (0.02%)
Keystone Automotive Industries, Inc. 700(a) 16,188
Newspapers (0.50%)
Harte-Hanks, Inc. 2,500 $ 64,531
Pulitzer Publishing Co. 4,100 365,925
430,456
Non-classifiable Establishments (0.02%)
Keppel Corp. Ltd. ADR 5,375 16,162
Nursing & Personal Care
Facilities (0.02%)
Paragon Health Network, Inc. 900(a) 14,513
Office Furniture (0.91%)
Knoll, Inc. 20,200(a) 595,900
Steelcase, Inc. 7,000 182,000
777,900
Ophthalmic Goods (0.10%)
Bausch & Lomb 1,650 82,706
Passenger Transportation
Arrangement (0.16%)
Sabre Group Holdings, Inc. 3,700(a) 140,600
Periodicals (0.19%)
Primedia, Inc. 11,760(a) 159,495
Personal Credit Institutions (0.71%)
American Express Co. 5,300 604,200
Petroleum Refining (0.70%)
Ashland, Inc. 3,900 201,338
Atlantic Richfield Co. 1,400 109,375
Mobil Corp. 1,400 107,275
Total SA IE Francaise ADR 2,800 183,050
601,038
Photographic Equipment &
Supplies (0.91%)
Fuji Photo Film 8,800 304,150
OCE NV 5,600 237,300
Xerox Corp. 2,300 233,738
775,188
Plastic Materials & Synthetics (0.43%)
Du Pont (E.I.) De Nemour 4,500 335,812
Shanghai Petrochemical Co. Ltd. ADR 2,600 29,088
364,900
Professional & Commercial
Equipment (0.10%)
Ingram Micro, Inc. 2,000(a) 88,500
Radio & Television Broadcasting (2.28%)
American Tower Corp., Class A 2,400(a) 59,850
Clear Channel Communications 17,000(a) 1,855,125
Metro Networks, Inc. 6,008(a) 25,875
1,940,850
Railroads (0.10%)
Nagoya Railroad Co. Ltd. 2,900 87,762
Real Estate Agents & Managers (0.04%)
Atlantic Gulf Communities Co. 15,700(a) 32,381
Real Estate Operators & Lessors (1.09%)
Arden Realty Group, Inc. 12,000 310,500
Brookfield Properties Corp. 16,800 231,343
Pacific Gulf Properties 10,000 213,125
Sekisui House Ltd. ADR 2,300 178,153
933,121
Search & Navigation Equipment (0.85%)
Litton Industries, Inc. 12,300(a) 725,700
Security Brokers & Dealers (0.19%)
Merrill Lynch & Co., Inc. 1,800 166,050
Security & Commodity Services (0.18%)
Pimco Advisors Holdings LP 3,400 116,025
Waddell & Reed Financial, Inc. 1,500 35,906
151,931
Soap, Cleaners & Toilet Goods (0.54%)
KAO Corp. ADR 2,200 339,229
Shiseido Co. Ltd. ADR 11,000 124,912
464,141
Subdividers & Developers (0.03%)
Singapore Land ADR 11,600 24,305
Sugar & Confectionery Products (0.23%)
Perlis Plantations ADR 25,000 21,697
Tootsie Roll Industries, Inc. 406 31,161
Wrigley (Wm.) Jr. Co. 1,500 147,000
199,858
Surety Insurance (0.15%)
CMAC Investment Corp. 2,100 129,150
Telephone Communications (2.23%)
AT&T Corp. 3,200 182,800
BCE, Inc. 17,180 733,371
Bell Atlantic Corp. 4,400 200,750
Cellular Communications
International, Inc. 1,150(a) 57,356
Sprint Corp. 2,600 183,300
Telecommunicacoes Brasileiras SA ADR 18 1,966
Telefonica SA Sponsored ADR 2,500 347,656
U.S. West, Inc. 4,200 197,400
1,904,599
Tires & Inner Tubes (0.30%)
Bridgestone ADR 1,100 259,970
Water Transportation of
Freight, NEC (0.19%)
Penninsular & Oriental Steamships ADR 5,722 165,070
Total Common Stock 50,147,105
Preferred Stocks (0.06%)
Periodicals (0.00%)
Time Warner 3 333
Real Estate Agents & Managers (0.06%)
Atlantic Gulf Communities 4,809(a) 48,099
Total Preferred Stocks 48,432
Bonds (7.93%)
Business Credit Institutions (1.27%)
AT&T Capital Corp. Medium-Term
Notes; 5.85%; 1/5/99 $ 330,000 $ 329,745
Ford Credit Auto Owner Trust
Asset Backed Series 1998-B,
Class A3; 5.85%; 10/15/01 500,000 500,670
Ford Motor Credit Notes;
6.13%; 4/28/03 250,000 250,438
1,080,853
Collateralized Mortgage
Obligations (0.59%)
AESOP Funding II LLC Series 1997-1,
Class A1; 6.22%; 10/20/01 500,000(b) 504,400
Commercial Banks (2.16%)
Asian Development Bank Global Bonds
5.75%; 5/19/03 500,000 500,590
First Plus Home Loan Trust Asset
Backed Series 1997-4, Class A4;
6.57%; 4/10/13 150,000 151,529
First Union - Lehman Brothers
Commercial, Class 2 A1;
6.48%; 3/18/04 329,769 333,031
Lehman Large Loan Series 1997-LLI,
Class A1; 6.79%; 6/12/04 492,634 507,536
Merrill Lynch & Co. Notes;
6.00%; 2/12/03 350,000 349,785
1,842,471
Electrical Goods (0.41%)
Empresa Nacional Electric Yankee
Notes; 7.75%; 7/15/08 350,000 349,747
Electronic Distribution
Equipment (0.30%)
Israel Electric Corp. Senior Notes;
7.25%; 12/15/06 250,000(b) 257,768
Finance Services (0.30%)
Team Fleet Finance Corp. Notes;
7.35%; 5/15/03 250,000 259,023
Household Audio & Video
Equipment (0.30%)
Sony Corp. Notes;
6.13%; 3/4/03 250,000 250,529
Life Insurance (0.33%)
Liberty Mutual Surplus Notes;
8.20%; 5/4/07 250,000(b) 278,885
Miscellaneous Equipment Rental
& Leasing (0.29%)
Oil Enterprises Ltd. Global
Bonds; 6.24%; 6/30/08 250,000 249,975
Miscellaneous Investing (0.30%)
Simon Debartolo Medium-Term
Notes; 7.13%; 9/20/07 250,000 252,409
Motor Vehicles, Parts & Supplies (0.42%)
Mid-State Trust Pass-Through
Series 4, Class A;
8.33%; 4/1/30 330,762 359,444
Personal Credit Institutions (0.29%)
GMAC Medium-Term Notes;
6.10%; 12/6/00 250,000 250,349
Security Brokers & Dealers (0.97%)
CNA Financial Notes; 6.50%; 4/15/05 250,000 251,718
Donaldson Lufkin & Jenrette
Medium-Term Notes;
6.90%; 10/1/07 250,000 260,150
Salomon, Inc. Senior Notes;
7.30%; 5/15/02 300,000 312,007
823,875
Total Bonds 6,759,728
U.S. Government Treasury Notes & Bonds (22.30%)
5.75%; 10/31/00 3,000,000 3,015,000
6.38%; 3/31/01 2,500,000 2,552,345
6.25%; 2/28/02 2,500,000 2,557,032
5.75%; 8/15/03 3,000,000 3,031,875
7.25%; 8/15/04 3,000,000 3,265,314
6.50%; 8/15/05 1,750,000 1,847,344
6.25%; 2/15/07 1,600,000 1,676,000
6.25%; 8/15/23 1,000,000 1,070,313
Total U.S. Government Treasury Notes & Bonds 19,015,223
Principal
Type Rate Maturity Amount Value
Federal National Mortgage Association (FNMA)
Certificate (1.64%)
FNMA 8.00% 2/1/12 $ 399,047 $ 411,820
FNMA 6.00% 4/1/13 997,905 986,878
Total FNMA 1,398,698
Total Portfolio Investments (90.73%) 77,369,186
Cash and receivables, net of liabilities (9.27%) 7,908,715
Total Net Assets (100.00%) $85,277,901
(a) Non-income producing security - No dividend paid during the past twelve
months. (b) Restricted security - See Note 4 to the financial statements.
BALANCED ACCOUNT
Shares
Held Value
Common Stocks (56.28%)
Auto & Home Supply Stores (0.86%)
Autozone, Inc. 46,200(a) $ 1,475,512
Bakery Products (0.45%)
Sara Lee Corp. 13,800 771,938
Beverages (1.31%)
Pepsico, Inc. 35,900 1,478,631
Universal Foods Corp. 34,400 763,250
2,241,881
Commercial Banks (4.28%)
BankBoston Corp. 23,000 1,279,375
First Union Corp. 24,708 1,439,241
Fleet Financial Group, Inc. 19,700 1,644,950
National City Corp. 7,080 502,680
NationsBank Corp. 19,200 1,468,800
PNC Financial Corp. 18,500 995,531
7,330,577
Commercial Printing (0.55%)
R. R. Donnelley & Sons Co. 20,700 947,025
Communications Equipment (0.78%)
Allen Telecom, Inc. 13,000(a) 151,125
General Instrument Corp. 43,200(a) 1,174,500
1,325,625
Computer & Data Processing
Services (2.47%)
Adobe Systems, Inc. 27,900 1,184,006
Electronic Data Systems Corp. 39,600 1,584,000
First Data Corp. 43,600 1,452,425
4,220,431
Computer & Office Equipment (2.10%)
3COM Corp. 17,500(a) 537,031
Cabletron Systems, Inc. 55,000(a) 739,063
Hewlett-Packard Co. 12,400 742,450
International Business Machines Corp. 13,700 1,572,931
3,591,475
Consumer Products (2.38%)
Fortune Brands, Inc. 36,600 1,406,812
Philip Morris Cos., Inc. 36,000 1,417,500
RJR Nabisco Holdings Corp. 12,800 304,000
UST, Inc. 35,300 953,100
4,081,412
Crude Petroleum & Natural Gas (1.34%)
Texaco, Inc. 38,300 2,286,031
Department Stores (0.86%)
Dillard's, Inc., Class A 35,400 1,466,888
Drugs (4.23%)
Abbott Labs 16,600 678,525
American Home Products Corp. 24,200 1,252,350
Johnson & Johnson 23,300 1,718,375
Merck & Co., Inc. 15,600 2,086,500
Pharmacia & Upjohn, Inc. 32,200 1,485,225
7,220,975
Electric Services (2.35%)
Central & Southwest Corp. 61,400 $ 1,650,125
Dominion Resources, Inc. 23,700 965,775
Houston Industries, Inc. 32,200 994,175
Potomac Electric Power Co. 16,400 411,025
4,021,100
Electrical Industrial Apparatus (0.74%)
Emerson Electric Co. 20,900 1,261,837
Electronic Components &
Accessories (0.87%)
Amp, Inc. 26,200 900,625
National Semiconductor Corp. 43,900(a) 578,931
1,479,556
Electronic Distribution
Equipment (0.58%)
General Electric Co. 10,800 982,800
Fats & Oils (0.67%)
Archer Daniels Midland Co. 58,824 1,139,715
Federal & Federally-Sponsored
Credit (0.51%)
Federal National Mortgage Association 14,400 874,800
Fire, Marine, & Casualty
Insurance (2.49%)
General Re Corp. 6,100 1,546,350
Loews Corp. 15,600 1,359,150
Safeco Corp. 29,500 1,340,406
4,245,906
General Industrial Machinery (0.65%)
Pall Corp. 54,300 1,113,150
Grain Mill Products (0.95%)
Ralston-Ralston Purina Group 13,900 1,623,694
Greeting Cards (0.25%)
American Greetings Corp. 8,500 432,969
Grocery Stores (2.98%)
Albertson's, Inc. 32,000 1,658,000
American Stores Co. 66,900 1,618,144
Sysco Corp. 71,600 1,834,750
5,110,894
Household Appliances (0.29%)
Sunbeam Corp. 47,300 490,738
Household Furniture (0.25%)
Masco Corp. 7,000 423,500
Industrial Inorganic Chemicals (0.73%)
Dow Chemical Co. 9,300 899,194
Eastman Chemical Co. 5,450 339,262
1,238,456
Jewelry, Silverware, & Plated
Ware (0.14%)
Jostens, Inc. 9,700 234,013
Life Insurance (0.83%)
Lincoln National Corp. 15,600 1,425,450
Management & Public Relations (1.19%)
Cognizant Corp. 16,900 $ 1,064,700
Dun & Bradstreet Corp. 26,600 960,925
2,025,625
Meat Products (0.92%)
Tyson Foods, Inc. 72,600 1,574,512
Medical Instruments & Supplies (0.85%)
St. Jude Medical, Inc. 39,550(a) 1,455,934
Medical Services & Health
Insurance (2.36%)
AON Corp. 13,125 922,031
Conseco, Inc. 7,000 327,250
Foundation Health Systems, Inc.,
Class A 51,440(a) 1,356,730
Pacificare Health Systems, Inc.,
Class B 16,200(a) 1,431,675
4,037,686
Metal Forgings & Stampings (0.51%)
Newell Co. 17,600 876,700
Miscellaneous Shopping
Goods Stores (0.90%)
Toys `R' Us, Inc. 65,500(a) 1,543,344
Motor Vehicles & Equipment (0.58%)
Ford Motor Co. 16,654 982,586
Motor Vehicles, Parts & Supplies (0.89%)
Grainger (W. W.), Inc. 30,400 1,514,300
Oil & Gas Field Service (0.50%)
Diamond Offshore Drilling 21,200 848,000
Paper Mills (1.57%)
Fort James Corp. 20,800 925,600
Kimberly Clark Corp. 38,400 1,761,600
2,687,200
Personal Credit Institutions (0.20%)
Associates First Capital `A' 4,364 335,483
Petroleum Refining (3.54%)
Amerada Hess Corp. 17,800 966,763
Amoco Corp. 38,600 1,606,725
Atlantic Richfield Co. 23,600 1,843,750
Exxon Corp. 22,800 1,625,925
6,043,163
Plastic Materials & Synthetics (0.10%)
Wellman, Inc. 7,400 167,888
Pulp Mills (0.31%)
Boise Cascade Corp. 16,000 524,000
Rubber & Plastics Footwear (0.66%)
Nike, Inc. 23,000 1,119,813
Sanitary Services (1.98%)
Browning-Ferris Industries, Inc. 30,800 1,070,300
Waste Management, Inc. 65,800 2,303,000
3,373,300
Security Brokers & Dealers (0.30%)
Bear Stearns Cos., Inc. 8,900 $ 506,187
Telephone Communication (1.57%)
AT&T Corp. 16,100 919,712
GTE Corp. 21,800 1,212,625
Motorola, Inc. 10,300 541,394
2,673,731
Variety Stores (0.46%)
Wal-Mart Stores, Inc. 12,800 777,600
Total Common Stocks 96,125,400
Principal
Amount Value
Bonds (32.82%)
Beverages (0.59%)
Seagram Co., Ltd. Notes;
6.50%; 4/1/03 $1,000,000 $ 1,009,684
Blast Furnace & Basic Steel
Products (1.14%)
Carpenter Technology Corp.
Medium-Term Notes;
6.99%; 4/20/18 1,700,000 1,733,221
Quanex Corp. Convertible
Subordinated Debentures;
6.88%; 6/30/07 200,000 212,750
1,945,971
Business Credit Institutions (2.67%)
CIT Group Holdings Senior
Medium-Term Notes;
6.38%; 10/1/02 1,500,000 1,519,251
Ford Motor Credit Co. Notes;
7.75%; 3/15/05 1,400,000 1,517,135
Heller Financial, Inc. Notes;
6.44%; 10/6/02 1,500,000 1,510,694
4,547,080
Commercial Banks (1.60%)
J.P. Morgan & Co., Inc. Subordinated
Notes; 6.70%; 11/1/07 1,000,000 1,029,900
NationsBank Corp. Subordinated
Notes; 7.80%; 9/15/16 1,500,000 1,698,382
2,728,282
Communications Equipment (0.67%)
Motorola, Inc. Debentures Note;
7.50%; 5/15/25 1,000,000 1,139,716
Computer & Office Equipment (1.36%)
IBM Corp. Debentures;
7.00%; 10/30/25 1,500,000 1,600,869
Seagate Technology, Inc.
Senior Notes;
7.37%; 3/1/07 750,000 729,310
2,330,179
Consumer Products (1.19%)
Philip Morris Cos., Inc. Notes;
7.25%; 9/15/01 $1,000,000 $ 1,029,296
Philip Morris Cos., Inc. Notes;
6.15%; 3/15/00 1,000,000 999,490
2,028,786
Department Stores (1.31%)
Dillards Department Stores, Inc.
Notes; 7.38%; 6/1/06 670,000 721,828
Fred Meyer, Inc. Senior Notes;
7.38%; 3/1/05 500,000 503,893
Sears Roebuck & Co. Medium-Term
Notes; 8.00%; 2/15/99 1,000,000 1,012,235
2,237,956
Electric Services (1.50%)
Louisiana Power & Light 1st
Mortgage Bonds;
6.00%; 3/1/00 500,000 499,011
Texas Utilities Electric Co.
Medium-Term Notes,
Series D, 1st Mortgage Bond;
6.25%; 1/31/00 1,000,000 1,003,179
Virginia Electric & Power Co.
1st Mortgage Bond;
7.38%; 7/1/02 1,000,000 1,048,291
2,550,481
Farm & Garden Machinery (1.06%)
Deere & Co. Senior Debentures;
8.50%; 1/9/22 1,500,000 1,813,700
Forest Products (0.90%)
Weyerhaeuser Co. Debentures Notes;
6.95%; 10/1/27 1,500,000 1,541,418
General Government, NEC (0.92%)
Province of Quebec, Canada
Debentures; 7.00%; 1/30/07 1,500,000 1,574,175
Miscellaneous Investing (1.51%)
Federal Realty Investment Trust
Notes; 8.88%; 1/15/00 1,000,000 1,038,034
Kimco Realty Corp. Senior Notes;
6.50%; 10/1/03 1,525,000 1,532,486
2,570,520
Mortgage Bankers & Brokers (1.00%)
Countrywide Funding Corp.
Medium-Term Notes;
6.54%; 4/14/00 1,700,000 1,714,374
Motion Picture Production &
Services (0.31%)
Viacom, Inc. Guaranteed Senior Notes;
7.75%; 6/1/05 500,000 534,902
Motor Vehicles & Equipment (1.80%)
Chrysler Corp. Debentures;
7.45%; 3/1/27 1,500,000 1,661,412
General Motors Corp. Debentures;
7.70%; 4/15/16 1,250,000 1,410,984
3,072,396
Paper & Paper Products (0.47%)
Boise Cascade Office Products
Corp. Notes; 7.05%; 5/15/05 800,000 806,522
Paper Mills (0.59%)
International Paper Co. Notes;
6.88%; 7/10/00 $1,000,000 $ 1,014,905
Personal Credit Institutions (2.67%)
American General Finance Corp.
Notes; 5.88%; 7/1/00 1,000,000 998,136
Associates Corp. of North America
Senior Notes; 6.45%; 10/15/01 1,500,000 1,519,953
General Electric Capital Corp. Notes;
6.50%; 11/1/26 1,000,000 1,034,395
General Motors Acceptance Corp.
Notes; 7.00%; 3/1/00 1,000,000 1,014,911
4,567,395
Petroleum & Petroleum
Products (0.90%)
Enron Corp. Notes;
6.75%; 9/1/04 1,500,000 1,539,705
Petroleum Refining (0.24%)
Pennzoil Co. Senior Exchangeable
Debentures; 6.50%; 1/15/03 200,000 407,000
Plumbing & Heating, Except
Electricity (0.59%)
Masco Corp. Notes; 6.13%; 9/15/03 1,000,000 1,002,089
Primary Nonferrous Metals (0.64%)
Reynolds Metals Co. Medium-Term
Notes; 9.31%; 1/3/02 1,000,000 1,089,698
Railroads (1.73%)
Norfolk Southern Debentures;
9.00%; 3/1/21 1,500,000 1,939,364
Union Pacific Corp. Notes;
7.00%; 6/15/00 1,000,000 1,015,497
2,954,861
Security Brokers & Dealers (2.93%)
Bear Stearns Cos., Inc. Senior Notes;
6.13%; 2/1/03 1,600,000 1,598,794
Lehman Brothers, Inc. Senior
Subordinated Notes;
6.13%; 2/1/01 1,000,000 1,000,517
Merrill Lynch & Co. Notes;
7.00%; 1/15/07 1,250,000 1,315,418
Morgan Stanley Group, Inc.
Debentures; 8.88%; 10/15/01 1,000,000 1,082,620
4,997,349
Surety Insurance (0.62%)
MBIA, Inc. Debentures;
7.00%; 12/15/25 1,000,000 1,062,954
Telephone Communication (0.97%)
AT&T Corp. Senior Notes;
7.75%; 3/1/07 1,500,000 1,659,160
Trucking & Courier Services,
Except Air (0.03%)
Builders Transport, Inc. Convertible
Subordinated Debentures;
6.50%; 5/1/11 306,000(b) 59,670
Trusts (0.91%)
Salomon Smith Barney Holdings, Inc.
Notes; 7.98%; 3/1/00 $1,500,000 $ 1,546,094
Total Bonds 56,047,022
Principal
Type Rate Maturity Amount Value
Federal Home Loan Mortgage Corporation (FHLMC)
Certificates (4.02%)
FHLMC 6.50% 9/1/27-2/1/28 $4,938,605 $ 4,923,470
FHLMC 7.00 12/1/27 1,905,512 1,934,533
Total FHLMC Certificates 6,858,003
Government National Mortgage Association (GNMA)
Certificates (3.08%)
GNMA II 6.00 6/20/98-9/20/26 5,423,703 5,259,446
Principal
Amount Value
Asset-Backed Securities (1.18%)
Personal Credit Institutions (1.18%)
Chase Manhattan Credit Card Master
Trust Asset-Backed Certificates
Series 97-2, Class A; 6.30%; 4/15/03
2,000,000 2,022,600
Commercial Paper (3.73%)
Personal Credit Institutions (3.73%)
Investment in Joint Trade Account;
Associates Corp.;
6.25%; 7/1/98 6,375,332 6,375,332
Total Portfolio Investments (101.11%) 172,687,803
Liabilities, net of cash and receivables (-1.11%) (1,903,339)
Total Net Assets (100.00%) $170,784,464
(a) Non-income producing security - No dividend paid during the past twelve
months.
(b) Non-income producing security - Security in default.
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
BOND ACCOUNT
Principal
Amount Value
Bonds (94.65%)
Air Transportation, Scheduled (0.92%)
Federal Express Corp.,
Pass-Through Cert.;
7.96%; 3/28/17 $ 282,311 $ 321,470
7.58%; 7/2/19 500,000 547,880
869,350
Aircraft & Parts (0.35%)
Textron, Inc. Medium-Term Notes,
Series C; 9.55%; 3/19/01 300,000 326,398
Bakery Products (1.04%)
Nabisco, Inc. Notes;
7.05%; 7/15/07 950,000 982,453
Beverages (1.93%)
Joseph E. Seagram & Sons
Guaranteed Debentures;
8.88%; 9/15/11 1,500,000 1,822,756
Broadwoven Fabric Mills,
Cotton (1.65%)
Burlington Industries, Inc. Notes;
7.25%; 9/15/05 1,500,000 1,553,731
Cable & Other Pay TV
Services (1.16%)
TCI Communications, Inc. Senior
Notes; 8.00%; 8/1/05 1,000,000 1,096,589
Combination Utility Services (2.41%)
MidAmerican Energy Co.
Medium-Term Notes;
6/38%; 6/15/06 2,000,000 1,990,900
Public Service Electric & Gas
Medium-Term Notes;
8.16%; 5/26/09 250,000 287,116
2,278,016
Commercial Banks (1.07%)
NationsBank Corp. Subordinated
Notes; 6.38%; 2/15/08 1,000,000 1,007,582
Computer & Office Equipment (2.06%)
Seagate Technology, Inc.
Senior Notes;
7.37%; 3/1/07 2,000,000 1,944,826
Consumer Products (0.87%)
Philip Morris Cos. Notes;
6.80%; 12/1/03 500,000 510,325
RJR Nabisco Capital Corp. Senior
Notes; 8.75%; 4/15/04 300,000 312,000
822,325
Copper Ores (0.32%)
Asarco, Inc. Notes; 7.38%; 2/1/03 300,000 306,000
Crude Petroleum & Natural Gas (0.87%)
Occidental Petroleum Corp.
Medium-Term Notes;
9.73%; 6/15/01 $ 250,000 $ 274,129
Union Oil of California
Medium-Term Notes;
7.77%; 4/19/05 500,000 546,080
820,209
Department Stores (3.76%)
Fred Meyer, Inc. Senior Notes;
7.38%; 3/1/05 1,000,000 1,007,786
Harcourt General, Inc. Subordinated
Notes; 9.50%; 3/15/00 350,000 367,085
J. C. Penney Co., Inc. Medium-
Term Notes, Series A;
6.88%; 10/15/15 1,500,000 1,545,311
Sears Roebuck Co. Medium-Term
Notes; 9.05%; 2/6/12 500,000 627,602
3,547,784
Drug Stores & Proprietary
Stores (1.66%)
Rite Aid Corp. Senior Debentures;
6.88%; 8/15/13 1,500,000 1,570,619
Electric Services (1.49%)
Cleveland Electric Illuminating Co.
First Mortgage Bonds;
8.75%; 11/15/05 400,000 402,720
Southern California Edison Co.
Notes; 6.38%; 1/15/06 1,000,000 1,006,081
1,408,801
Engines & Turbines (1.15%)
Brunswick Corp. Debentures;
7.38%; 9/1/23 1,000,000 1,084,151
Fabricated Rubber Products,
NEC (0.30%)
M. A. Hanna Co. Senior Notes;
9.38%; 9/15/03 250,000 284,995
Farm & Garden Machinery (1.72%)
Case Corp. Notes; 7.25%; 1/15/16 1,500,000 1,619,226
Gas Production & Distribution (0.83%)
Enron Corp. Notes;
7.13%; 5/15/07 750,000 784,425
General Government, NEC (1.21%)
Ontario Hydro Debentures;
7.45%; 3/31/13 500,000 558,960
Province of Saskatchewan, Canada
Global Notes; 8.00%; 2/1/13 500,000 583,115
1,142,075
General Industrial Machinery (1.07%)
Timken Co. Medium-Term Notes;
6.20%; 1/15/08 1,000,000 1,009,216
Gold & Silver Ores (0.80%)
Placer Dome, Inc. Notes;
7.13%; 6/15/07 750,000 759,083
Grain Mill Products (1.19%)
Ralston Purina Co. Debentures;
7.75%; 10/1/15 $1,000,000 $1,119,875
Groceries & Related Products (1.60%)
Supervalu, Inc. Medium-Term Notes,
Series B; 6.49%; 12/12/05 1,500,000 1,508,464
Grocery Stores (2.38%)
American Stores Co. Bonds;
8.00%; 6/1/26 1,000,000 1,164,464
Food Lion, Inc. Notes;
7.55%; 4/15/07 1,000,000 1,083,366
2,247,830
Highway & Street Construction (2.03%)
Foster Wheeler Corp. Notes;
6.75%; 11/15/05 1,900,000 1,917,803
Hospitals (0.57%)
Columbia/HCA Healthcare Corp.
Medium-Term Notes;
8.70%; 2/10/10 500,000 534,448
Hotels & Motels (1.63%)
Hilton Hotels Corp. Notes;
7.70%; 7/15/02 1,500,000 1,539,669
Household Appliances (0.62%)
Maytag Corp. Medium-Term Notes;
8.62%; 11/15/07 500,000 584,613
Household Furniture (0.59%)
Masco Corp. Debentures;
7.13%; 8/15/13 500,000 554,178
Industrial Inorganic Chemicals (1.96%)
FMC Corp.
Senior Notes; 6.38%; 9/1/03 200,000 200,803
Debentures; 7.75%; 7/1/11 1,500,000 1,644,437
1,845,240
Life Insurance (1.14%)
John Hancock Mutual Life Insurance
Co. Surplus Notes;
7.38%; 2/15/24 1,000,000(a) 1,079,428
Lumber & Construction
Materials (1.80%)
Crane Co. Notes; 8.50%; 3/15/04 1,524,000 1,697,119
Machinery, Equipment &
Supplies (0.81%)
AAR Corp. Notes; 7.25%; 10/15/03 750,000 763,885
Management & Public Relations (1.09%)
ServiceMaster Co. Ltd. Notes;
6.95%; 8/15/07 1,000,000 1,031,331
Millwork, Plywood & Structural
Members (1.28%)
Georgia-Pacific Corp.
Debentures; 9.50%; 12/1/11 100,000 124,416
Senior Debentures; 7.70%; 6/15/151,000,000 1,081,866
1,206,282
Miscellaneous Amusement, Recreation
Service (1.48%)
Circus Circus Enterprises Senior
Notes; 6.45%; 2/1/06 $1,500,000 $1,395,079
Miscellaneous Chemical
Products (2.44%)
Ferro Corp. Senior Debentures;
7.63%; 5/1/13 400,000 447,744
Smith International, Inc. Senior
Notes; 7.00%; 9/15/07 1,775,000 1,851,557
2,299,301
Miscellaneous Investing (4.09%)
First Industrial LP Medium-Term
Notes; 7.00%; 12/1/06 2,000,000 2,020,164
Washington REIT Senior Notes;
7.25%; 8/13/06 1,000,000 1,044,818
Weingarten Realty Investors
Medium-Term Notes;
7.29%; 5/23/05 750,000 791,206
3,856,188
Miscellaneous Metal Ores (1.14%)
Cyprus Amax Minerals Notes;
7.38%; 5/15/07 650,000 687,676
Cyprus Minerals Co. Notes;
10.13%; 4/1/02 350,000 390,292
1,077,968
Motor Vehicles & Equipment (0.94%)
TRW, Inc. Medium-Term Notes;
9.25%; 12/30/11 700,000 885,508
Newpapers (1.76%)
News America Holdings, Inc.
Guaranteed Senior Notes;
8.50%; 2/15/05 1,500,000 1,661,259
Oil & Gas Field Services (2.84%)
Petroleum Geo-Services ASA
Notes; 7.50%; 3/31/07 2,000,000 2,171,630
R&B Falcon Senior Notes;
6.75%; 4/15/05 500,000(a) 502,952
2,674,582
Operative Builders (2.30%)
Pulte Corp.
Senior Notes; 8.38%; 8/15/04 1,000,000 1,094,849
Notes; 7.63%; 10/15/17 1,000,000 1,077,169
2,172,018
Paper & Paper Products (1.60%)
Boise Cascade Office Products Corp.
Notes; 7.05%; 5/15/05 1,500,000 1,512,229
Paper Mills (2.20%)
Bowater, Inc. Debentures;
9.38%; 12/15/21 200,000 262,145
Champion International Corp. Notes;
9.88%; 6/1/00 250,000 266,812
7.10%; 9/1/05 875,000 916,377
Potlatch Corp. Medium-Term
Notes; 8.75%; 1/14/22 500,000 632,898
2,078,232
Personal Credit Institutions (3.32%)
Commercial Credit Co. Notes;
6.75%; 7/1/07 $2,000,000 $2,064,744
General Motors Acceptance Corp.
Medium-Term Notes;
8.25%; 2/24/04 500,000 548,922
Notes; 6.63%; 10/15/05 500,000 514,538
3,128,204
Petroleum & Petroleum
Products (0.59%)
Enron Corp. Notes;
9.13%; 4/1/03 500,000 558,324
Petroleum Refining (4.44%)
Ashland, Inc. Medium-Term Notes
Series F; 8.54%; 1/13/05 250,000 282,416
7.71%; 5/11/07 500,000 552,028
7.73%; 7/15/13 250,000 284,921
Phillips Petroleum Co. Notes;
9.38%; 2/15/11 500,000 638,048
Sun Co., Inc.
Notes; 7.13%; 3/15/04 200,000 209,141
Debentures; 9.00%; 11/1/24 500,000 637,433
Tosco Corp. Notes; 7.25%; 1/1/07 1,500,000 1,580,722
4,184,709
Plastic Materials & Synthetics (2.17%)
Geon Co. Notes;
6.88%; 12/15/05 2,000,000 2,042,758
Primary Nonferrous Metals (0.73%)
Reynolds Metals Co.
Medium-Term Notes;
8.34%; 5/22/07 500,000 557,139
7.65%; 2/4/08 125,000 133,713
690,852
Pulp Mills (0.23%)
International Paper Co. Medium-Term
Notes; 9.70%; 8/15/00 200,000 214,932
Railroads (2.14%)
Union Pacific Corp.
Notes; 6.40%; 2/1/06 1,000,000 998,591
Debentures; 7.00%; 2/1/16 1,000,000 1,022,163
2,020,754
Rental of Railroad Cars (1.10%)
Gatx Capital Corp. Medium-Term
Notes, Series C; 6.86%; 10/13/05 1,000,000 1,039,044
Sanitary Services (1.76%)
Laidlaw, Inc. Senior Notes;
7.88%; 4/15/05 1,045,000 1,139,886
WMX Technologies, Inc. Notes;
7.00%; 10/15/06 500,000 516,917
1,656,803
Sawmills & Planning Mills (0.84%)
MacMillan Bloedel Delaware
Guaranteed Notes; 8.50%; 1/15/04 750,000 796,860
Security Brokers & Dealers (3.36%)
Bear Stearns Co., Inc. Senior Notes;
7.00%; 3/1/07 $1,000,000 $1,046,344
Lehman Brothers, Inc.
Senior Subordinated Notes;
7.38%; 1/15/07 2,000,000 2,122,012
3,168,356
Telephone Communication (5.65%)
GTE Corp. Notes; 6.36%; 4/15/06 2,000,000 2,009,034
Korea Telecom Notes;
7.63%; 4/15/07 1,500,000 1,162,256
Sprint Corp. Notes; 8.13%; 7/15/02 500,000 536,470
WorldCom, Inc. Notes;
7.75%; 4/1/07 1,500,000 1,620,384
5,328,144
Variety Stores (0.20%)
Dayton-Hudson Corp. Debentures;
9.63%; 2/1/08 150,000 185,439
Total Bonds 89,298,318
Asset-Backed Securities (2.23%)
Security Brokers & Dealers (2.23%)
Merrill Lynch Mortgage Investors, Inc.
Collateralized Mortgage-Backed
Security, Series 95-C3, Class C;
7.34%*; 12/26/25 2,000,000 2,102,580
Commercial Paper (1.39%)
Personal Credit Institutions (1.39%)
Investment in Joint Trade Account;
Associates Corp.; 6.25%; 7/1/98 1,313,287 1,313,287
Total Portfolio Investments (98.27%) 92,714,185
Cash and receivables, net of liabilities (1.73%) 1,628,452
Total Net Assets (100.00%) $94,342,637
* Variable rate (monthly).
(a) Restricted security - See Note 4 to the financial statements.
CAPITAL VALUE ACCOUNT
Shares
Held Value
Common Stocks (96.93%)
Beverages (2.37%)
Anheuser-Busch Cos., Inc. 135,000 $ 6,370,312
Pepsico, Inc. 49,000 2,018,187
8,388,499
Combination Utility Services (0.74%)
Montana Power Co. 75,000 2,606,250
Commercial Banks (20.67%)
Banc One Corp. 136,334 7,609,141
BankBoston Corp. 76,600 4,260,875
Chase Manhattan 110,000 8,305,000
Comerica, Inc. 142,500 9,440,625
First Union Corp. 166,420 $ 9,693,965
KeyCorp 206,000 7,338,750
National City Corp. 51,660 3,667,860
NationsBank Corp. 101,800 7,787,700
Summit Bancorp 150,000 7,125,000
Union Planters Corp. 135,000 7,939,688
73,168,604
Commercial Printing (0.99%)
R. R. Donnelley & Sons Co. 77,000 3,522,750
Communications Equipment (2.55%)
Harris Corp. 202,000 9,026,875
Computer & Office Equipment (1.61%)
Hewlett-Packard Co. 33,400 1,999,825
International Business Machines Corp. 32,200 3,696,962
5,696,787
Crude Petroleum & Natural Gas (1.33%)
Texaco, Inc. 78,800 4,703,375
Drugs (7.25%)
Abbott Labs 64,000 2,616,000
American Home Products Corp. 190,000 9,832,500
Merck & Co., Inc. 37,000 4,948,750
Pharmacia & Upjohn, Inc. 179000 8,256,375
25,653,625
Electric Light & Wiring
Equipment (1.40%)
Cooper Industries 90,000 4,944,375
Electric Services (3.53%)
Dominion Resources, Inc. 44,400 1,809,300
FPL Group, Inc. 38,500 2,425,500
Houston Industries, Inc. 231,000 7,132,125
Potomac Electric Power Co. 45,000 1,127,812
12,494,737
Electrical Industrial Apparatus (0.92%)
Emerson Electric Co. 54,180 3,271,117
Electronic Distribution
Equipment (0.64%)
General Electric Co. 25,000 2,275,000
Farm & Garden Machinery (1.52%)
Tenneco, Inc. 141,600 5,389,650
Fats & Oils (1.06%)
Archer Daniels Midland Co. 194,260 3,763,787
General Industrial Machinery (1.33%)
Pall Corp. 230,100 4,717,050
Grain Mill Products (0.94%)
Ralston-Ralston Purina Group 28,600 3,340,837
Greeting Cards (2.58%)
American Greetings Corp. 179,000 9,117,813
Grocery & Related Products (1.21%)
Sysco Corp. 166,800 4,274,250
Grocery Stores (1.41%)
Albertson's, Inc. 40,600 2,103,588
American Stores Co. 120,000 2,902,500
5,006,088
Household Furniture (2.53%)
Masco Corp. 148,200 $ 8,966,100
Industrial Inorganic Chemicals (0.26%)
Eastman Chemical Co. 14,900 927,525
Jewelry, Silverware &
Plated Ware (0.22%)
Jostens, Inc. 31,700 764,763
Life Insurance (2.57%)
American General Corp. 128,000 9,112,000
Management & Public Relations (2.14%)
Dun & Bradstreet Corp. 209,900 7,582,638
Meat Products (0.81%)
Tyson Foods, Inc. 132,000 2,862,750
Medical Instruments & Supplies (0.55%)
St. Jude Medical, Inc. 53,100(a) 1,954,744
Medical Services & Health
Insurance (1.29%)
AON Corp. 46,575 3,271,894
Foundation Health Systems, Inc., Class A
48,620(a) 1,282,352
4,554,246
Metal Cans & Shipping
Containers (2.88%)
Crown Cork & Seal Co., Inc. 215,000 10,212,500
Metal Forgings & Stampings (0.90%)
Newell Co. 64,000 3,188,000
Miscellaneous Converted Paper
Products (3.95%)
Avery Dennison Corp. 130,000 6,987,500
Minnesota Mining & Mfg. Co. 85,000 6,985,938
13,973,438
Miscellaneous Food &
Kindred Products (0.22%)
Universal Foods Corp. 34,400 763,250
Miscellaneous Shopping Goods
Stores (0.72%)
Toys 'R' Us, Inc. 108,700(a) 2,561,244
Motor Vehicles, Parts & Supplies (1.02%)
Grainger (W. W.), Inc. 72,800 3,626,350
Paper Mills (2.34%)
Kimberly Clark Corp. 180,800 8,294,200
Petroleum Refining (7.46%)
Amoco Corp. 116,000 4,828,500
Atlantic Richfield Co. 102,400 8,000,000
Chevron Corp. 100,000 8,306,250
Exxon Corp. 74,000 5,277,125
26,411,875
Rental of Railroad Cars (2.73%)
Gatx Corp. 220,000 9,652,500
Sanitary Services (2.39%)
Browning-Ferris Industries, Inc. 243,900 8,475,525
Soap, Cleaners & Toilet Goods (0.80%)
Avon Products 36,600 $ 2,836,500
Telephone Communications (6.36%)
AT&T Corp. 92,000 5,255,500
Motorola, Inc. 31,400 1,650,463
Southern New England Telecom 130,000 8,515,000
U.S. West, Inc. 151,000 7,097,000
22,517,963
Variety Stores (0.74%)
Wal-Mart Stores, Inc. 4,3000 2,612,250
Total Common Stocks 343,211,830
Principal
Amount Value
Commercial Paper (2.97%)
Business Credit Institutions (0.59%)
General Electric Capital Corp.;
5.55%; 7/6/98 $ 255,000 $ 254,804
5.56%; 7/6/98 1,845,000 1,843,575
2,098,379
Personal Credit Institutions (2.38%)
Investment in Joint Trade Account,
Associate Corp.; 6.25%; 7/1/98 5,660,000 5,660,000
Ford Motor Credit Co.;
5.52%; 7/13/98 2,780,000 2,774,885
8,434,885
Total Commercial Paper 10,533,264
Total Portfolio Investments (99.90%) 353,745,094
Cash and receivables, net of liabilities (0.10%) 370,708
Total Net Assets (100.00%) $354,115,802
(a) Non-income producing security - No dividend paid during the past twelve
months.
GOVERNMENT SECURITIES ACCOUNT
Principal
Type Rate Maturity Amount Value
Government National Mortgage Association (GNMA)
Certificates (30.90%)
GNMA I 6.00% 1/20/28 $ 985,047 $ 954,954
GNMA I 6.50 5/15/26 949,035 947,478
GNMA I 7.00 1/15/24-5/15/28 5,743,153 5,837,529
GNMA I 7.50 1/15/27-2/15/27 1,721,732 1,770,681
GNMA I 8.00% 10/15/16-6/15/17 1,070,676 1,126,040
GNMA II 6.00 5/20/24-7/20/28 21,837,325 21,199,859
GNMA II 6.50 12/15/25-2/20/26 3,571,370 3,552,335
Total GNMA Certificates 35,388,876
Federal National Mortgage Association (FNMA)
Certificates (15.05%)
FNMA 5.50 5/1/24 1,144,810 1,090,546
FNMA 6.00 11/1/23-3/1/26 3,673,713 3,593,630
FNMA 6.50 11/1/23-6/1/26 5,661,840 5,654,754
FNMA 7.00 8/1/23-11/1/27 4,357,787 4,421,823
FNMA 7.50 4/1/22-7/1/27 1,575,794 1,618,434
FNMAGold 6.50 8/1/25 859,601 855,174
Total FNMA Certificates 17,234,361
Federal Home Loan Mortgage Corporation (FHLMC)
Certificates (25.75%)
FHLMC 5.50% 3/1/24 324,412 310,449
FHLMC 6.00% 12/1/23-1/1/26 2,611,589 2,554,207
FHLMC 6.50% 6/1/18-3/1/28 6,974,534 6,968,052
FHLMC 7.00% 1/1/24-4/1/28 11,510,181 11,685,778
FHLMC 7.50% 12/1/27 797,848 817,650
FHLMC Gold 5.50% 2/1/24 942,353 901,059
FHLMC Gold 6.50% 10/1/25-5/1/26 1,698,547 1,696,921
FHLMC Gold 7.00% 8/1/23-11/1/27 2,472,600 2,514,009
FHLMC Gold 7.50% 2/1/22-8/1/27 1,997,666 2,047,708
Total FHLMC Certificates 29,495,833
Principal
Amount Value
Student Loan Marketing Association (SLMA)
Certificates (13.95%)
Student Loan Marketing Association
Debentures;
7.30%; 8/1/12 $10,000,000 $11,368,200
8.47%; 12/1/08 1,000,000 1,208,347
9.15%; 12/1/04 1,200,000 1,417,480
Notes;
5.57%; 3/17/00 1,000,000 998,578
6.13%; 12/1/05 560,000 573,762
9.25%; 6/1/04 350,000 410,665
Total SLMA Certificates 15,977,032
Private Export Funding Corporation (PEFCO)
Certificates (12.91%)
Private Export Funding Corp.
Secured Notes;
6.62%; 10/1/05 $2,000,000 $ 2,109,310
9.45%; 12/31/99 4,500,000 4,738,932
Series SS, Senior Secured Notes;
5.50%; 3/15/01 3,325,000 3,311,584
5.80%; 2/1/04 2,200,000 2,214,399
7.03%; 10/31/03 2,275,000 2,413,759
Total PEFCO Certificates 14,787,984
Other Federal Agencies (0.79%)
Agency-Backed Bonds (0.79%)
Tennessee Valley Authority
Global Notes; 0.00%; 5/1/00 1,000,000(a) 903,500
Federal Agency Short-Term Obligations (1.41%)
Federal & Federally Sponsored
Credit (1.41%)
Investment in Joint Trading Account,
Federal Home Loan Mortgage Corp.;
5.58%; 7/1/98 1,620,837 1,620,837
Total Portfolio Investments (100.76%) 115,408,423
Liabilities, net of cash and receivables (-0.76%) (873,578)
Total Net Assets (100.00%) $114,534,845
(a) Non-income producing security - zero-coupon bond.
GROWTH ACCOUNT
Shares
Held Value
Common Stocks (89.59%)
Advertising (1.36%)
Interpublic Group of Cos., Inc. 50,000 $ 3,034,375
Beverages (1.47%)
Coca-Cola Co. 9,600 820,800
Pepsico, Inc. 59,900 2,467,131
3,287,931
Carpets & Rugs (0.43%)
Shaw Industries, Inc. 54,800 965,850
Cash Grains (1.66%)
Pioneer Hi-Bred International, Inc. 89,700 3,711,337
Commercial Banks (9.39%)
Banc One Corp. 34,100 1,903,206
BankAmerica Corp. 35,000 3,025,312
BankBoston Corp. 44,000 2,447,500
Chase Manhattan 61,000 $ 4,605,500
Firstar Corp. 32,700 1,242,600
FirstMerit Corp. 43,800 1,275,675
National City Corp. 22,980 1,631,580
NationsBank Corp. 39,545 3,025,192
Norwest Corp. 50,000 1,868,750
21,025,315
Communications Equipment (3.73%)
Commscope, Inc. 27,566(a) 446,225
General Instrument Corp. 82,700(a) 2,248,406
Lucent Technologies 40,000 3,327,500
Northern Telecom Ltd. 40,800 2,315,400
8,337,531
Computer & Data Processing (2.51%)
GTECH Holdings Corp. 52,100(a) 1,755,119
Microsoft Corp. 35,600(a) 3,858,150
5,613,269
Computer & Office Equipment (3.67%)
Automatic Data Processing, Inc. 21,800 1,588,675
Ceridian Corp. 51,000(a) 2,996,250
Compaq Computer Corp. 31,752 900,963
Hewlett-Packard Co. 30,000 1,796,250
Pitney Bowes, Inc. 19,200 924,000
8,206,138
Department Stores (1.84%)
Federated Department Stores 40,000(a) 2,152,500
May Department Stores 30,000 1,965,000
4,117,500
Drugs (10.15%)
American Home Products Corp. 20,000 1,035,000
Bristol-Myers Squibb Co. 21,800 2,505,638
Forest Laboratories, Inc. 71,200(a) 2,545,400
Genzyme Corp. - General Division 43,300(a) 1,106,856
Genzyme Corp.- Tissue Repair 285(a) 1,870
Johnson & Johnson 48,800 3,599,000
Lilly (Eli) & Co. 43,600 2,880,325
Merck & Co., Inc.15,900 2,126,625
Pharmacia & Upjohn, Inc. 80,000 3,690,000
Smithkline Beecham PLC ADR 52,600 3,182,300
22,673,014
Eating & Drinking Places (1.14%)
Marriot International, Inc. 58,000 1,877,750
McDonald's Corp. 7,600 524,400
Tricon Global Restaurants, Inc. 4,590(a) 145,446
2,547,596
Electrical Goods (0.37%)
Avnet, Inc. 15,000 820,312
Electronic Components &
Accessories (3.12%)
General Semiconductors 20,675(a) 204,166
Intel Corp. 57,800 4,284,425
Linear Technology Corp. 41,200 2,484,875
6,973,466
Electronic Distribution
Equipment (0.44%)
General Electric Co. 10,900 991,900
Federal & Federally Sponsored
Credit (0.97%)
Federal National Mortgage Association 35,500 2,156,625
Fire, Marine, & Casualty
Insurance (1.92%)
Travelers, Inc. 70,798 $ 4,292,129
Footwar, Except Rubber (1.25%)
Stride Rite Corp. 184,700 2,782,044
Forest Products (0.16%)
Georgia Timber Group 15,300 352,856
General Industrial Machinery (3.58%)
Ingersoll-Rand Co. 45,450 2,002,641
Tyco International Ltd. 95,200 5,997,600
8,000,241
Grain Mill Products (1.78%)
Agribrands International, Inc. 1,590(a) 48,097
General Mills, Inc. 20,000 1,367,500
Ralston-Ralston Purina Group 21,900 2,558,194
3,973,791
Grocery Stores (1.30%)
Casey's General Stores, Inc. 42,400 702,250
Sysco Corp. 86,000 2,203,750
2,906,000
Hose, Belting, Gaskets &
Packing (0.65%)
Mark IV Industries 67,025 1,449,416
Hospitals (1.86%)
Humana, Inc. 49,600(a) 1,546,900
Universal Health Services, Inc., Class B
44,500(a) 2,597,687
4,144,587
Hotels & Motels (1.34%)
Marriott International, Inc., Class A 83,400 2,700,075
Sodexho Marriott Services 10,425(a) 302,325
3,002,400
Household Furniture (1.03%)
Masco Corp. 38,100 2,305,050
Investment Offices (1.21%)
AMVESCAP PLC Sponsored ADR 55,000 2,701,875
Lumber & Other Building
Materials (1.67%)
Home Depot, Inc. 44,800 3,721,200
Medical Instruments & Supplies (3.08%)
Becton, Dickinson & Co. 30,500 2,367,562
Boston Scientific Corp. 63,100(a) 4,519,538
6,887,100
Medical Services & Health
Insurance (3.17%)
AON Corp. 25,950 1,822,988
Foundation Health Systems, Inc., Class A
90,000(a) 2,373,750
Pacificare Health Systems, Inc., Class B
11,011(a) 973,097
United Healthcare Corp. 30,000 1,905,000
7,074,835
Millwork, Plywood & Structural
Members (0.40%)
Georgia-Pacific Corp. 15,300 $ 901,744
Miscellaneous Converted Paper
Products (0.26%)
Minnesota Mining & Mfg. Co. 7,100 583,531
Miscellaneous Fabricated Metal
Products (0.68%)
Parker-Hannifin Corp. 39,750 1,515,469
Miscellaneous Food & Kindred
Products (0.63%)
Bestfoods 24,200 1,405,112
Miscellaneous Investing (2.21%)
Cendant Corp. 236,108(a) 4,928,754
Miscellaneous Plastics
Products, NEC (0.16%)
Rubbermaid, Inc. 10,900 361,744
Miscellaneous Shopping Goods
Stores (0.27%)
Toys `R' Us, Inc. 26,000(a) 612,625
Motor Vehicles & Equipment (2.74%)
Chrysler Corp. 65,700 3,703,838
Dana Corp. 45,100 2,412,850
6,116,688
Oil & Gas Field Service (1.53%)
Schlumberger Ltd. 50,000 3,415,625
Paints & Allied Products (0.26%)
RPM, Inc. 34,125 580,125
Petroleum Refining (1.67%)
Atlantic Richfield Co. 18,200 1,421,875
Exxon Corp. 32,300 2,303,394
3,725,269
Plastic Materials & Synthetics (0.29%)
A. Schulman, Inc. 33,600 657,300
Preserved Fruits & Vegetables (0.05%)
Corn Products International, Inc. 3,025(a) 102,472
Radio, Television, & Computer
Stores (0.24%)
Tandy Corp. 10,000 530,625
Refrigeration & Service
Machinery (0.40%)
Tecumseh Products Co. 16,800 887,250
Sanitary Services (0.83%)
Browning-Ferris Industries, Inc. 32,000 1,112,000
Waste Management, Inc. 21,000 735,000
1,847,000
Soap, Cleaners, & Toilet Goods (2.41%)
Colgate-Palmolive Co. 25,500 2,244,000
Ecolab, Inc. 101,200 3,137,200
5,381,200
Sugar & Confectionery
Products (1.10%)
Wrigley (Wm.) Jr. Co. 25,000 $ 2,450,000
Telephone Communications (4.16%)
MCI Communications Corp. 50,000 2,906,250
Motorola, Inc. 29,800 1,566,363
Teleport Communication 45,000(a) 2,441,250
Worldcom, Inc. 49,100(a) 2,378,281
9,292,144
Toys & Sporting Goods (1.03%)
Mattel, Inc. 54,250 2,295,453
Variety Stores (0.57%)
Wal-Mart Stores, Inc. 20,800 1,263,600
Women's & Children's
Undergarments (1.45%)
Warnaco Group, Class A 76,100 3,229,494
Total Common Stocks 200,138,907
Principal
Amount Value
Commercial Paper (20.67%)
Business Credit Institutions (1.90%)
American Express Credit Corp.;
5.50%; 7/13/98 $ 815,000 $ 813,506
General Electric Capital Corp.;
5.53%; 7/13/98 3,125,000 3,119,240
5.56%; 7/6/98 310,000 309,760
4,242,506
Miscellaneous Electrical Equipment
& Supplies (4.27%)
General Electric Co.;
5.57%; 7/27/98 9,575,000 9,536,482
Personal Credit Institutions (14.50%)
American General Finance Corp.;
5.51%; 7/6/98 9,500,000 9,542,692
Investment in Joint Trade Account,
Associates Corp.; 6.25%; 7/1/98 10,026,650 10,026,650
Beneficial Corp.; 5.55%; 7/13/98 3,780,000 3,773,007
Ford Motor Credit Co.;
5.52%; 7/20/98 9,075,000 9,048,561
32,390,910
Total Commercial Paper 46,169,898
Total Portfolio Investments (110.26%) 246,308,805
Liabilities, net of cash and receivables (-10.26%) (22,922,052)
Total Net Assets (100.00%) $223,386,753
(a) Non-income producing security - No dividend paid during the past twelve
months.
HIGH YIELD ACCOUNT
Principal
Amount Value
Bonds (95.27%)
Advertising (3.53%)
Lamar Advertising Co.
Senior Subordinated Notes;
9.63%; 12/1/06 $500,000 $ 535,000
Blast Furnace & Basic Steel
Products (2.04%)
Titan Wheel International Senior
Subordinated Notes; 8.75%; 4/1/07 300,000 309,000
Broadwoven Fabric Mills,
Cotton (1.94%)
J.P. Stevens & Co., Inc. Sinking Fund
Debentures; 9.00%; 3/1/17 280,000 293,300
Cable & Other Pay TV
Services (6.17%)
Century Communications Senior
Notes; 8.75%; 10/1/07 100,000 105,500
Fox/Liberty Networks, Inc. Senior
Notes; 8.88%; 8/15/07 500,000 507,500
Jones Intercable, Inc. Senior Notes;
9.63%; 3/15/02 300,000 323,250
936,250
Cogeneration - Small Power
Producer (2.69%)
AES Corp. Senior Subordinated
Notes; 8.38%; 8/15/07 200,000 202,000
Calpine Corp. Senior Notes;
8.75%; 7/15/07 200,000 205,500
407,500
Communications Equipment (1.21%)
FWT, Inc. Senior Subordinated Notes;
9.88%; 11/15/07 200,000 184,000
Communications Services, NEC (1.29%)
Level 3 Communications, Inc.
Senior Notes; 9.13%; 5/1/08 200,000(a) 194,750
Computer & Data Processing
Services (0.64%)
Decisionone Corp. Senior
Subordinated Notes;
9.75%; 8/1/07 100,000 96,500
Crude Petroleum & Natural Gas (7.45%)
Chesapeake Energy Corp. Senior
Notes, Series A;
9.63%; 5/1/05 500,000(a) 501,250
Nuevo Energy Co. Senior
Subordinated Notes;
9.50%; 4/15/06 400,000 419,000
Ocean Energy, Inc. Senior
Subordinated Notes;
8.88%; 7/15/07 200,000 207,500
1,127,750
Deep Sea Foreign Transportation
of Freight (1.28%)
Trico Marine Services
Senior Notes, Series E;
8.50%; 8/1/05 $200,000 $ 194,500
Eating & Drinking Places (1.32%)
Cafeteria Operators L.P. Senior
Secured Notes; 12.00%; 12/31/01 100,000 100,000
Foodmaker, Inc. Senior
Subordinated Notes;
8.38%; 4/15/08 100,000(a) 100,125
200,125
Electronic Components &
Accessories (4.17%)
Fairchild Semiconductor Corp.
Senior Subordinated Notes;
10.13%; 3/15/07 125,000 127,500
Flextronics International Ltd.
Senior Subordinated Notes;
8.75%; 10/15/07 500,000 503,750
631,250
Family Clothing Stores (0.68%)
Specialty Retailers, Inc.
Senior Notes;
8.50%; 7/15/05 100,000 102,750
Finance Services (1.37%)
DVI, Inc. Senior Notes;
9.88%; 2/1/04 200,000 208,000
Forest Products (1.94%)
Doman Industries, Ltd. Senior Notes;
8.75%; 3/15/04 300,000 293,250
Fuel Dealers (1.97%)
Petroleum Heat & Power Co., Inc.
Senior Subordinated Debentures;
12.25%; 2/1/05 300,000 298,500
Grocery Stores (1.35%)
Marsh Supermarkets Senior
Subordinated Notes;
8.88%; 8/1/07 200,000 204,500
Heavy Construction, Except
Highway (3.15%)
Mastec, Inc. Senior Subordinated
Notes; 7.75%; 2/1/08 500,000(a) 477,500
Hotels & Motels (3.47%)
HMH Properties, Inc. Senior Notes;
8.88%; 7/15/07 200,000 223,000
John Q. Hammons Hotels, L.P. &
Finance Corp. First Mortgage
Notes; 8.88%; 2/15/04 300,000 302,250
525,250
Industrial Inorganic Chemicals (0.66%)
PT Tri Polyta Indonesia TBK
Guaranteed Secured Notes;
11.38%; 12/1/03 $200,000 $ 100,000
Knitting Mills (2.01%)
Tultex Corp. Senior Notes;
10.63%; 3/15/05 300,000 303,750
Men's & Boys' Clothing Stores (1.84%)
Edison Brothers Stores, Inc. Senior
Notes; 11.00%; 9/26/07 300,000 279,000
Miscellaneous Amusement,
Recreation Service (3.44%)
Rio Hotel & Casino, Inc. Senior
Subordinated Notes;
9.50%; 4/15/07 300,000 314,250
Station Casinos, Inc. Senior
Subordinated Notes, Series B
9.63%; 6/1/03 200,000 207,000
521,250
Miscellaneous Equipment Rental &
Leasing (3.30%)
Rental Service Corp. Senior
Subordinated Notes; 9.00%; 5/15/08
500,000(a) 500,000
Miscellaneous Metal Ores (3.19%)
Glencore Nickel Pty. Ltd. Senior
Secured Notes; 9.00%; 12/1/14 500,000 482,500
Miscellaneous Shopping Goods
Stores (0.68%)
Zale Corp. Senior Notes;
8.50%; 10/1/07 100,000 102,750
Newspapers (1.39%)
Hollinger International Publishing, Inc.
Senior Subordinated Notes;
9.25%; 3/15/07 200,000 210,500
Nursing & Personal Care
Facilities (3.47%)
Integrated Health Services, Inc.
Senior Subordinated Notes;
9.25%; 1/15/08 200,000 207,000
Mariner Health Group, Inc. Senior
Subordinated Notes; 9.50%; 4/1/06 300,000 318,000
525,000
Oil & Gas Field Services (2.48%)
Dawson Production Services Senior
Notes; 9.38%; 2/1/07 300,000 301,500
Polysindo International Finance Co.
B.V. Guaranteed Secured Notes;
9.38%; 7/30/07 200,000 74,000
375,500
Paper Mills (0.93%)
Indah Kiat Finance Mauritius Ltd.
Guaranteed Senior Notes;
10.00%; 7/1/07 200,000 141,500
Personal Credit Institutions (1.24%)
Macsaver Financial Services, Inc. Notes;
7.60%; 8/1/07 $200,000 $ 187,516
Petroleum Refining (2.10%)
Crown Central Petroleum Corp.
Senior Notes; 10.88%; 2/1/05 300,000 318,000
Pulp Mills (1.31%)
Pen-Tab Industries, Inc. Senior
Subordinated Notes;
10.88%; 2/1/07 200,000 198,000
Radio & Television Broadcasting (0.66%)
Antenna TV S.A. Senior Notes;
9.00%; 8/1/07 100,000 100,500
Retail Stores, NEC (1.43%)
Cole National Group, Inc. Senior
Subordinated Notes; 9.88%; 12/31/06
200,000 216,000
Search & Navigation Equipment (3.47%)
AMRESCO, Inc. Senior Subordinated
Notes; 10.00%; 3/15/04 300,000 308,250
Tracor, Inc. Senior Subordinated Notes;
8.50%; 3/1/07 200,000 217,000
525,250
Telephone Communication (14.01%)
Comcast Cellular Holdings Senior
Notes; 9.50%; 5/1/07 500,000 521,250
Lenfest Communications Senior
Notes; 8.38%; 11/1/05 200,000 212,500
Nextlink Communications, Inc.
Senior Notes; 9.00%; 3/15/08 200,000 200,000
Paging Network, Inc. Senior
Debentures; 8.88%; 2/1/06 300,000 295,500
Rogers Cablesystems, Ltd. Senior
Secured Second Priority Notes;
9.63%; 8/1/02 250,000 266,875
Rogers Cantel, Inc. Senior Secured
Debentures; 9.75%; 6/1/16 300,000 313,500
Vanguard Cellular Systems, Inc.
Senior Debentures; 9.38%; 4/15/06 300,000 313,500
2,123,125
Total Bonds 14,429,816
Commercial Paper (4.73%)
Personal Credit Institutions (4.73%)
Investment in Joint Trade Account,
Associates Corp.; 6.25%; 7/1/98 716,009 716,009
Total Portfolio Investments (100.00%) 15,145,825
Cash and receivables, net of liabilities (0.00%) 332
Total Net Assets (100.00%) $15,146,157
(a) Restricted security - See Note 4 to the financial statements.
INTERNATIONAL ACCOUNT
Shares
Held Value
Common Stocks (94.33%)
Advertising (1.44%)
WPP Group PLC 331,100 $ 2,179,380
Beverages (1.31%)
PanAmerican Beverages ADR 63,100 1,983,706
Blast Furnace & Basic Steel
Products (1.10%)
Tubos De Acero De Mexico ADR 50,000 640,625
Voest-Alpine Stahl 25,700(b) 1,030,104
1,670,729
Central Reserve Depositories (1.70%)
National Westminster Bank 123,421 2,209,610
Union Bank of Norway 12,800 366,975
2,576,585
Commercial Banks (12.73%)
ABN-AMRO Holdings NV 65,522 1,533,189
Australia & New Zealand Banking Group 331,000 2,283,376
Bank of Ireland 81,833 1,683,522
Barclays PLC 54,748 1,581,219
BG Bank 40,000 2,477,412
Fokus Bank 64,000(b) 496,251
Fokus Bank Rights 64,000(a) 918
Istituto Mobiliare Italiano 141,000 2,221,035
National Australia Bank Ltd. 110,986 1,463,901
Nordbanken Holding 127,000 931,605
Royal Bank of Canada Montreal, Quebec 36,000 2,166,548
Svenska Handelsbanken AB Free 56,500 2,479,640
19,318,616
Communications Equipment (1.82%)
ECI Telecommunications Ltd. ADR 73,000 2,764,875
Communications Services, NEC (1.56%)
KPN Royal PTT Nederland 61,450 2,365,295
Computer & Office Equipment (1.21%)
Canon, Inc. 4,000 90,788
Orbotech Ltd. ADR 48,000(a) 1,746,000
1,836,788
Concrete, Gypsum & Plaster
Products (0.56%)
Lafarge SA 8,200 847,664
Consumer Products (4.85%)
Imasco Ltd. 112,202 2,071,538
Imperial Tobacco Group PLC 439,500 3,230,216
Swedish Match Co. 623,000 2,070,171
7,371,925
Copper Ores (0.98%)
Trelleborg AB Series 'B' 113,000 1,487,784
Crude Petroleum & Natural Gas (0.20%)
Hardy Oil & Gas 86,200 301,313
Deep Sea Foreign Transportation
of Freight (0.62%)
Van Ommeren NV 22,288 935,687
Department Stores (0.32%)
Vendex NV 12,658 $ 486,601
Drugs (4.71%)
Elan Corp. PLC ADR 27,900(a) 1,794,319
Novartis AG 1,668 2,775,581
Pharmacia & Upjohn, Inc. 46,500 2,144,812
Rhodia, Inc. SA 15,800(a) 440,600
7,155,312
Electric Services (0.89%)
Enersis SA ADR 55,000 1,344,063
Electronic Components &
Accessories (0.77%)
Amtek Engineering 221,250 52,383
Elec & Eltek International ADR 294,800 996,424
Varitronix 63,000 126,023
1,174,830
Electronic Distribution
Equipment (2.25%)
Phillips Electronics 34,200 2,874,907
Techtronic Industries Co. 2,630,000 543,068
3,417,975
Engines & Turbines (1.58%)
RHI AG 31,000 1,501,298
Scapa Group PLC 281,000 897,846
2,399,144
Farm & Garden Machinery (1.11%)
New Holland NV 86,000 1,687,750
Finance Services (0.40%)
Takefuji Corp. 13,000 599,488
Gas Production & Distribution (1.25%)
OMV AG 14,150 1,895,356
General Industrial Machinery (0.82%)
SKF AB 'B' Free 68,300 1,241,826
Hose, Belting, Gaskets & Packing (0.52%)
Phoenix AG 34,500 792,243
Industrial Inorganic Chemicals (0.76%)
Kemira OY 112,000(b) 1,157,463
Investment Offices (1.49%)
AMVESCAP PLC 226,800 2,257,253
Life Insurance (0.77%)
QBE Insurance Group Ltd. 332,685 1,174,282
Meat Products (4.48%)
Danisco AS 44,700 3,002,960
Orkla B 122,000 2,567,655
Unilever NV 15,520 1,231,393
6,802,008
Miscellaneous Chemical Products (1.37%)
Hoechst AG 41,800 $ 2,086,487
Miscellaneous Converted Paper
Products (1.46%)
Bunzl PLC 472,000 2,220,843
Miscellaneous Food &
Kindred Products (2.50%)
Bols Wessanen (KON) CVA 142,000 2,045,303
Greencore Group PLC 328,000 1,751,260
3,796,563
Miscellaneous Non-Durable
Goods (2.64%)
Desc S.A., Series B 232,000 1,188,912
Diageo PLC 237,205 2,823,869
4,012,781
Miscellaneous Primary
Metal Products (0.44%)
Charter PLC 64,000 670,070
Miscellaneous Textile Goods (0.71%)
Esprit Holdings Ltd. 3,552,000 1,077,256
Miscellaneous Transportation
Equipment (1.63%)
Autoliv, Inc. 28,700 907,638
TNT Post Group NV 61,450(a) 1,570,822
2,478,460
Motor Vehicles & Equipment (2.88%)
E.C.I.A. Equipment & Composants 8,300 2,306,307
Mayflower Corp. PLC 617,000 2,058,931
4,365,238
Newspapers (0.68%)
Publishing & Broadcasting Ltd. 240,000 1,032,905
Oil & Gas Field Services (1.44%)
ENI SPA 334,000 2,189,024
Paperboard Containers & Boxes (0.88%)
Koninklijke KNP BT NV 52,000 1,342,036
Personnel Supply Services (0.23%)
Vedior NV 12,491 353,072
Petroleum Refining (4.41%)
Repsol Petroleo SA 54,860 3,028,068
Sasol Ltd. 135,000 787,306
YPF Sociedad Anonima ADR 96,000 2,886,000
6,701,374
Plastic Materials & Synthetics (1.10%)
Astra AB 84,000 1,674,745
Pulp Mills (2.50%)
Lassila & Tikanoja Ltd. OY 73,200 2,027,965
UPM-Kymmene OY 64,140 1,765,273
3,793,238
Radio & Television Broadcasting (2.89%)
Carlton Communications PLC 220,000 $ 1,961,992
Mirror Group PLC 430,000 1,621,450
Television Broadcasts Ltd. 301,000 796,340
4,379,782
Security Brokers & Dealers (0.00%)
Peregrine Investment Holdings 685,000(c) 0
Soap, Cleaners & Toilet Goods (2.90%)
Benckiser NV B Shares 36,150(a) 2,223,142
Reckitt & Colman PLC 113,945 2,174,944
4,398,086
Special Industry Machinery (1.95%)
Cookson Group 863,000 2,966,229
Sugar & Confectionery Products (2.18%)
Nestle 1,545 3,306,325
Telephone Communications (6.87%)
Nokia Corp., Class A ADR 47,600 3,453,975
Telecom Corp. of New Zealand Ltd. 491,000 2,023,681
Telecom Italia-Di 260,575 1,261,426
Telefonica de Espana SA 79,700 3,691,116
10,430,198
Watches, Clocks, Watchcases &
Parts (0.47%)
Tag Heuer International SA 7,600 720,261
Total Common Stock 143,220,914
Preferred Stock (0.77%)
Commercial Banks (0.77%)
National Australia Bank ECU 40,500 1,161,844
Principal
Amount Value
Commercial Paper (4.63%)
Crude Petroleum & Natural Gas (1.60%)
Chevron Oil Finance Co.;
5.52%; 7/1/98 $2,425,000 $ 2,425,000
Personal Credit Institutions (3.03%)
Associates Corp. of North America;
6.15%; 7/1/98 4,600,000 4,600,000
Total Commercial Paper 7,025,000
Total Portfolio Investments (99.73%) 151,407,758
Cash and receivables, net of liabilities (0.27%) $ 407,124
Total Net Assets (100.00%) $151,814,882
(a) Non-income producing security - No dividend paid during the period.
(b) Restricted security - See Note 4 to the financial statements.
(c) On January 12, 1998 Peregrine Investment Holdings filed a plan
of liquidation.
International Account Investments by Country
Total Percentage of Total
Country Value Value
Argentina $ 2,886,000 1.91%
Austria 4,426,758 2.92
Australia 7,116,308 4.70
Canada 4,238,087 2.80
Chile 1,344,063 0.89
Denmark 5,480,372 3.62
Finland 8,404,676 5.55
France 3,594,571 2.37
Germany, Federal Republic 2,878,730 1.90
Hong Kong 2,542,686 1.68
Israel 4,510,875 2.98
Italy 5,671,484 3.74
Japan 690,276 0.45
Mexico 3,813,243 2.52
Netherlands 18,649,199 12.32
Norway 3,431,799 2.27
New Zealand 2,023,681 1.34
Singapore 1,048,807 0.69
South Africa 787,306 0.52
Spain 6,719,184 4.44
Sweden 10,793,408 7.13
Switzerland 6,802,167 4.49
United Kingdom 34,384,266 22.71
United States 9,169,812 6.06
Total $151,407,758 100.00%
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
INTERNATIONAL SMALLCAP ACCOUNT
Shares
Held Value
Common Stocks (94.58%)
Advertising (4.06%)
Industrial & Financial Systems 21,500(a)(b) $ 300,598
United Group Ltd. 75,000 145,368
445,966
Air Transportation, Scheduled (1.49%)
Ryanair PLC ADR 4,600(a) 163,875
Airports, Flying Fields &
Services (1.11%)
Aeroporti Di Roma 11,600 73,024
Virgin Express Holdings ADR 3,800(a) 49,163
122,187
Automotive Rentals, No Drivers (0.87%)
Avis Europe PLC 21,000 95,071
Cable & Other Pay TV Services (0.41%)
Tri-Vision International Ltd. 57,000(a) 44,575
Central Reserve Depositories (0.83%)
Union Bank of Norway 3,200 91,744
Commercial Banks (1.24%)
Banco Pastor SA 2,400 135,606
Communications Equipment (0.52%)
Research in Motion Ltd. 14,000(a) 57,122
Computer & Data Processing
Services (6.73%)
Agresso Group ASA 9,700(a) 42,979
Computacenter PLC 14,000(a)(b) 174,959
Computershare Ltd. 27,000 93,630
Intentia International AB 4,100(a) 148,578
Itnet PLC 19,700(a) 143,311
Merkantildata ASA 8,400 106,183
The Descartes Systems Group, Inc. 5,000(a) 29,921
739,561
Computer & Office Equipment (1.65%)
Orbotech Ltd. ADR 5,000(a) 181,875
Crude Petroleum & Natural Gas (1.07%)
Hardy Oil & Gas 2,400 8,389
Vermilion Resources 24,000(a) 109,348
117,737
Drugs (1.50%)
Fabrica Espanola De Productos 2,400 164,609
Electric Services (1.08%)
Vestas Wind Systems 3,000(a) 118,438
Electrical Industrial Apparatus (1.24%)
Doncasters PLC ADR 4,900(a) 136,281
Electrical Work (1.93%)
Internatio-Muller NV 2,800 93,736
Telesystem International Wireless, Inc.6,100(a) 118,222
211,958
Electrical Components &
Accessories (0.52%)
Elec & Eltek International ADR 17,000 57,460
Electronic Distribution
Equipment (3.44%)
C/TAC NV 6,300(a) 162,903
Techtronic Industries Co. 534,000 110,265
Vtech Holdings Ltd. 28,000 104,251
377,419
Engines & Turbines (1.59%)
RHI AG 3,600 174,344
Fabricated Rubber
Products, NEC (0.65%)
Semperit AG Holding 500 70,753
Hose, Belting, Gaskets & Packing (1.74%)
Phoenix AG 8,300 190,598
Hotels & Motels (1.28%)
Choice Hotels Scandinavia 47,000(a) 140,874
Household Furniture (0.80%)
Ekornes ASA 7,200 88,199
Investment Offices (0.56%)
Tyndall Australia Ltd. 47,300 61,510
Life Insurance (1.39%)
Scor SA 2,400 152,232
Measuring & Controlling
Devices (1.10%)
Sensonor ASA 26,600(a) 121,326
Meat Products (0.78%)
Perkins Foods PLC 36,000 86,195
Medical Instruments & Supplies (0.81%)
Cochlear Ltd. 23,000 89,302
Medical & Dental Laboratories (0.68%)
Transgene SA Sponsored ADR 4,300(a) 74,713
Metalworking Machinery (1.80%)
Mikron Holding AG 780(a) 197,981
Miscellaneous Amusement, Recreation
Service (1.86%)
Tab Ltd. 138,700(a) 204,417
Miscellaneous Business Services (1.70%)
Enator AB 6,300 187,224
Miscellaneous Electrical Equipment &
Supplies (1.39%)
Kaba Holding AG 300 153,282
Miscellaneous Food & Kindred
Products (1.55%)
Greencore Group PLC 32,000 170,855
Miscellaneous Manufacturers (1.43%)
Docdata NV 5,500(a) 157,628
Miscellaneous Non-Durable
Goods (1.01%)
Austria Tabakwerke AG 2,000 111,347
Miscellaneous Primary Metal
Products (0.56%)
YBM Magnex International, Inc. 13,300(a) 61,953
Miscellaneous Transportation
Services (1.03%)
ASG AB, Class B 3,700 113,668
Motor Vehicles & Equipment (2.91%)
E.C.I.A. Equipment & Composants 500 138,934
Mayflower Corp. PLC 54,300 181,199
320,133
Newspapers (1.48%)
Newsquest PLC 30,000(a)(b) 162,178
Non-Classifiable Establishments (0.93%)
Bure Investment Aktiebolaget AB 6,400(b) 101,919
Non-Residential Building
Construction (1.72%)
Algeco 1,900 188,554
Oil & Gas Field Services (4.58%)
Cie Generale De Geophysique 1,400(a) 205,391
Det Sondenfjelds-Norske
Dampskibsselskab 4,500(a) 79,168
Hydralift ASA, A Shares 8,400(a) 83,195
Hydralift ASA, B Shares 1,680(a) 17,077
Petrolia Drilling ASA 30,400(a) 118,850
503,681
Passenger Transportation
Arrangement (1.04%)
Thomson Travel Group PLC 37,000(a) 114,209
Personnel Supply Services (2.71%)
Dis Deutshcer Industries Service AG 1,100 91,411
Unique International NV 6,100 206,910
298,321
Pulp Mills (2.99%)
Lassila & Tikanoja Ltd. OY 6,500 180,079
Miquel Y Costas 3,200 148,409
328,488
Real Estate Agents & Managers (1.46%)
Tornet Fastighet 10,000 160,503
Sanitary Services (1.93%)
De Sammensluttede Vognmand AS 2,000 212,301
Security Brokers & Dealers (7.59%)
Aot NV 2,400 244,103
Kempen & Co. NV 2,950 228,404
Van Der Moolen Holdings 3,200 361,652
834,159
Security & Commodity Services (0.20%)
Dundee Bancorp, Inc., Class A 1,400(a) 22,135
Services to Buildings (0.78%)
Spotless Group Ltd. 42,000 85,828
Special Industry Machinery (0.58%)
Aixtron 380 63,578
Telephone Communications (9.32%)
Aapt Ltd. 48,000(a) 92,144
Colt Telecom Group PLC 4,500(a) 180,386
Energis PLC 9,000(a) 137,026
Esprit Telecom Group PLC ADR 8,600(a) 158,025
Global Telesystems Group, Inc. ADR 3,000(a) 146,250
Metronet Communications ADR, Class B 11,000(a) 310,750
1,024,581
Women's & Children's
Undergarments (0.96%)
CSP International SPA 11,000 105,201
Total Common Stocks 10,395,654
Commercial Paper (6.46%)
Federal & Federally Sponsored
Credit (6.46%)
FHLMC; 5.85%; 7/1/98 710,000 710,000
Total Portfolio Investments (101.04%) 11,105,654
Liabilities, net of cash and receivables (-1.04%) (114,876)
Total Net Assets (100.00%) $10,990,778
(a) Non-income producing security - No dividend paid during the period.
(b) Restricted security - See Note 4 to the financial statements.
International SmallCap Account Investments by Country
Total Percentage of Total
Country Value Value
Australia $ 772,199 6.95%
Austria 356,445 3.21
Belgium 49,163 0.44
Canada 754,025 6.79
Czech Republic 146,250 1.32
Denmark 330,739 2.98
Finland 180,079 1.62
France 685,111 6.17
Germany 345,586 3.11
Hong Kong 214,517 1.93
Ireland 163,875 1.48
Israel 181,875 1.64
Italy 178,225 1.60
Netherlands 1,455,335 13.10
Norway 889,595 8.01
Singapore 57,460 0.52
Spain 448,625 4.04
Sweden 1,012,490 9.12
Switzerland 351,263 3.16
United Kingdom 1,748,084 15.74
United States 784,713 7.07
Total $11,105,654 100.00%
PRINCIPAL VARIABLE CONTRACTS FUND, INC.
MICROCAP ACCOUNT
Shares
Held Value
Common Stocks (59.35%)
Aircraft & Parts (1.64%)
Avteam, Inc. 4,800(a) $ 51,600
Tristar Aerospace Co. 2,400(a) 37,200
88,800
Blast Furnace & Basic Steel
Products (1.73%)
Titan International, Inc. 5,500 93,500
Colleges & Universities (0.59%)
Career Education Corp. 1,300(a) 31,850
Commercial Banks (1.16%)
Pacific Century Financial Corp. 2,600 62,400
Communications Equipment (1.20%)
Commscope, Inc. 4,000(a) 64,750
Computer & Data Processing
Services (1.09%)
Hypercom Corp. 5,900(a) 59,000
Computer & Office Equipment (2.27%)
Advanced Digital Information Corp. 3,100(a) 44,175
ATL Products, Inc. 1,100(a) 28,669
Black Box Corp. 1,500(a) 49,781
122,625
Cutlery, Handtools & Hardware (1.57%)
American Safety Razor Co. 5,800(a) 84,825
Drugs (0.95%)
Perrigo Co. 5,100(a) 51,319
Eating & Drinking Places (0.73%)
Friendly Ice Cream Corp. 400(a) 6,750
Ryan's Family Steak Houses, Inc. 3,200(a) 32,800
39,550
Electrical Industrial Apparatus (2.46%)
Carbide Graphite Group, Inc. 3,100(a) 86,219
Ucar International, Inc. 1,600(a) 46,700
132,919
Electronic Components &
Accessories (4.12%)
General Semiconductors 4,500(a) 44,438
Hadco Corp. 1,700(a) 39,631
Kemet Corp. 5,800(a) 76,306
Memc Electronic Materials, Inc. 6,000(a) 62,250
222,625
Family Clothing Stores (0.95%)
Syms Corp. 3,600(a) 51,300
Fire, Marine & Casualty Insurance (2.19%)
Hub Group, Inc., Class A 200(a) $ 4,225
American Safety Insurance Group 2,900(a) 34,075
Symons International Group, Inc. 4,500(a) 84,375
118,450
Freight Transportation
Arrangement (0.08%)
Hub Group, Inc., Class A 200(a) 4,225
Health & Allied Services, NEC (0.66%)
American Physician Partners, Inc. 5,100(a) 35,700
Home Health Care Services (0.99%)
Matria Healthcare, Inc. 15,200(a) 53,200
Hotels & Motels (1.65%)
Prime Hospitality 5,100(a) 88,931
Industrial Machinery, NEC (1.61%)
Denison International PLC 4,400(a) 86,900
Insurance Agents, Brokers &
Services (3.76%)
Healthplan Services Corp. 10,800 189,000
The Seibels Bruce Group 1,900(a) 14,012
203,012
Life Insurance (1.89%)
Arm Financial Corp. 4,600 101,775
Medical Services & Health
Insurance (0.31%)
Penn Treaty American Corp. 300(a) 9,450
Trigon Healthcare, Inc. 200(a) 7,237
16,687
Medical & Dental Laboratories (3.12%)
Quest Diagnostics, Inc. 7,700(a) 168,437
Metal Services, NEC (1.57%)
Philip Services Corp. ADR 20,600(a) 84,975
Miscellaneous Converted Paper
Products (0.56%)
Shorewood Packaging Corp. 1,900(a) 30,162
Miscellaneous Investing (0.91%)
Prime Retail, Inc. 4,100 48,944
Miscellaneous Shopping Goods
Stores (3.22%)
Friedmans, Inc., Class A 10,500(a) 173,906
Motion Picture Production &
Services (0.90%)
Group Ad SA - ADR 8,600(a) 48,375
Non-Store Retailers (0.85%)
MDC Communications Corp., Class A 4,800(a) 45,900
Nursing & Personal Care
Facilities (3.27%)
Integrated Health Services, Inc. 1,200(a) 45,000
Mariner Health Group, Inc. 5,000(a) 83,125
Sun Healthcare Group 3,300(a) 48,263
176,388
Periodicals (0.36%)
Playboy Enterprises, Inc. 1,100(a) 19,525
Professional & Commercial
Equipment (1.38%)
CHS Electronics, Inc. 1,900 33,963
Vanstar Corp. 2,800(a) 40,775
74,738
Real Estate Operators & Lessors (1.48%)
Insignia Financial Group 2,800(a) 68,600
Resortquest International, Inc. 700(a) 11,419
80,019
Refrigeration & Service
Machinery (1.30%)
Fedders Corp. 11,000 70,125
Rooming & Boarding Houses (0.27%)
Bridgestreet Accomodations, Inc. 3,100(a) 14,337
Shoe Stores (0.99%)
J. Baker, Inc. 4,600 53,188
Surety Insurance (3.23%)
Amerin Corp. 800(a) 23,350
Esg Re Ltd. 6,200 134,075
Scpie Holdings, Inc. 500 16,938
174,363
Telephone Communications (0.35%)
Rogers Cantel Mobile 1,500(a) 18,750
Trucking & Courier Services,
Except Air (1.99%)
Allied Holdings, Inc. 5,100(a) 107,419
Total Portfolio Investments (59.35%) 3,203,894
Cash and receivables, net of liabilities (40.65%) 2,193,977
Total Net Assets (100.00%) $5,397,871
(a) Non-income producing security - No dividend paid during the period.
MIDCAP ACCOUNT
Shares
Held Value
Common Stocks (93.13%)
Blast Furnace & Basic Steel
Products (0.93%)
Carpenter Technology 50,000 $ 2,512,500
Carpets & Rugs (0.85%)
Shaw Industries, Inc. 130,000 2,291,250
Chemicals & Allied Products (0.28%)
Sigma-Aldrich Corp. 21,300 748,162
Commercial Banks (9.70%)
Associated Banc Corp. 86,683 3,261,448
Banc One Corp. 26,330 1,469,521
First Federal Capital Corp. 129,594 2,324,592
First Union Corp. 46,625 2,715,877
Independent Bank Corp. Michigan 44,299 1,949,156
Mercantile Bancorp., Inc. 33,390 1,682,021
Merchants Bancorp., Inc. 45,800 1,448,425
National City Corp. 21,400 1,519,400
North Fork Bancorp., Inc. 188,220 4,599,626
Peoples Heritage Financial Group, Inc.
102,000 2,409,750
Princeton National Bancorp., Inc. 54,000 958,500
Summit Bancorp. 36,450 1,731,375
26,069,691
Commercial Printing (0.42%)
Merrill Corp. 47,400 1,045,763
Workflow Management, Inc. 11,422(a) 92,094
1,137,857
Computer & Data Processing
Services (9.65%)
American Management Systems, Inc. 53,100(a) 1,589,681
Aztec Technology 17,134(a) 130,643
Cerner Corp. 123,500(a) 3,496,594
Choicepoint, Inc. 6,310(a) 319,444
HBO & Co. 142,000 5,005,500
ICG Communications, Inc. 69,000(a) 2,522,812
Microsoft Corp. 63,000(a) 6,827,625
Sunquest Information Systems, Inc. 103,400(a) 943,525
Synopsys, Inc. 111,600(a) 5,105,700
25,941,524
Computer & Office Equipment (5.95%)
3COM Corp. 80,000(a) 2,455,000
Ascend Communications 100,000(a) 4,956,250
Cabletron Systems, Inc. 125,000(a) 1,679,688
EMC Corp. 150,000(a) 6,721,875
SystemSoft Corp. 116,900(a) 175,350
15,988,163
Construction & Related
Machinery (2.35%)
Cooper Cameron Corp. 35,000(a) 1,785,000
EVI Weatherford, Inc. 122,000(a) 4,529,250
6,314,250
Crude Petroleum & Natural Gas (2.03%)
Devon Energy Corp. 85,000 2,969,688
Newfield Exploration Co. 100,000(a) 2,487,500
5,457,188
Dairy Products (0.29%)
Dreyer's Grand Ice Cream, Inc. 38,600 776,825
Department Stores (1.46%)
Saks Holding 142,000(a) 3,922,750
Drugs (4.63%)
Alliance Pharmaceutical Corp. 30,000(a) 125,625
Centocor, Inc. 65,000(a) 2,356,250
Dura Pharmaceuticals, Inc. 107,500(a) 2,405,312
Forest Laboratories, Inc. 37,000(a) 1,322,750
Genzyme Corp. - General Division 15,060(a) 384,971
Merck & Co., Inc. 10,000 1,337,500
Pharmacia & Upjohn, Inc. 34,400 1,586,700
Watson Pharmaceuticals 63,000(a) 2,941,313
12,460,421
Electronic Components &
Accessories (4.95%)
Altera Corp. 75,000(a) 2,217,188
Intel Corp. 45,300 3,357,862
Electronic Components &
Accessories (4.95%) (Continued)
Linear Technology Corp. 49,700 $ 2,997,531
Solectron Corp. 112,800(a) 4,744,650
13,317,231
Engineering & Architectural
Services (0.79%)
Paychex, Inc. 51,900 2,111,681
Fire, Marine, & Casualty
Insurance (1.15%)
Berkley (W.R.) Corp. 77,400 3,100,838
Footwear, Except Rubber (1.01%)
Nine West Group, Inc. 101,700(a) 2,726,831
General Industrial Machinery (3.75%)
Flow International Corp. 101,500(a) 1,179,938
Kaydon Corp. 97,000 3,425,312
Pentair, Inc. 58,000 2,465,000
Roper Industries, Inc. 115,800 3,025,275
10,095,525
Grocery Stores (0.79%)
Casey's General Stores, Inc. 129,000 2,136,563
Holding Offices (0.55%)
ISB Financial Corp. 55,700 1,476,050
Hose, Belting, Gaskets &
Packing (0.71%)
Mark IV Industries 88,218 1,907,714
Hospitals (2.58%)
Humana, Inc. 110,000(a) 3,430,625
Universal Health Services, Inc.,
Class B 60,100(a) 3,508,338
6,938,963
Hotels & Motels (1.13%)
Four Seasons Hotel, Inc. 86,300 3,042,075
Household Appliances (1.37%)
Maytag Corp. 74,400 3,673,500
Industrial Inorganic Chemicals (0.35%)
ICN Pharmaceuticals, Inc. 20,346 929,558
Industrial Machinery, NEC (1.59%)
Coltec Industries 215,000(a) 4,273,125
Insurance Agents, Brokers &
Services (1.39%)
Equifax, Inc. 103,000 3,740,187
Investment Offices (1.46%)
AMVESCAP PLC Sponsored ADR 79,920 3,926,070
Iron & Steel Foundries (1.11%)
Atchison Casting Corp. 31,900(a) $ 570,213
Precision Castparts Corp. 45,000 2,401,875
2,972,088
Knitting Mills (1.12%)
Russell Corp. 100,000 3,018,750
Laundry, Cleaning & Garment
Services (0.64%)
G & K Services, Inc. 39,525 1,724,278
Measuring & Controlling
Devices (0.86%)
ISCO, Inc. 1 4
Millipore Corp. 85,000 2,316,250
2,316,254
Meat Products (1.11%)
Michael Foods, Inc. 101,200 2,972,750
Medical Instruments & Supplies (2.01%)
Boston Scientific Corp. 35,200(a) 2,521,200
Steris Corp. 45,400(a) 2,887,156
5,408,356
Medical Service & Health
Insurance (4.91%)
Alternative Living Services 99,600(a) 2,689,200
Foundation Health Systems, Inc.,
Class A 176,450(a) 4,653,869
Orthofix International NV 77,600(a) 1,008,800
Pacificare Health Systems, Inc., Class B
20,598(a) 1,820,348
Patient InfoSystems, Inc. 59,000(a) 154,875
United Healthcare Corp. 45,000 2,857,500
13,184,592
Metal Services, NEC (0.28%)
BMC Industries, Inc. 87,100 762,125
Miscellaneous Business Services (0.11%)
Cendant Corp. 14,437(a) 301,372
Miscellaneous Chemical
Products (1.35%)
Cytec Industries 51,200(a) 2,265,600
H. B. Fuller Co. 24,400 1,352,675
3,618,275
Non-Store Retailers (0.16%)
U.S. Office Products Co. 21,417(a) 417,632
Office Furniture (0.78%)
Chromcraft Revington, Inc. 77,000(a) 1,395,625
Kimball International, Inc., Class B 38,600 699,625
2,095,250
Office & Clinics of Medical
Doctors (0.92%)
Phycor, Inc. 149,700(a) 2,479,406
Oil & Gas Field Services (1.49%)
Diamond Offshore Drilling 100,000 4,000,000
Operative Builders (1.54%)
D. R. Horton, Inc. 159,500 3,329,563
Pulte Corp. 26,842 801,905
4,131,468
Paints & Allied Products (0.60%)
RPM, Inc. 95,250 $ 1,619,250
Passenger Transportaion
Arrangement (0.03%)
Navigant International 8,567(a) 72,818
Personal Credit Institutitions (0.80%)
Firstplus Financial Group 60,000(a) 2,160,000
Plastic Materials & Synthetics (0.39%)
A. Schulman, Inc. 54,200 1,060,288
Plumbing, Heating &
Air-Conditioning (0.70%)
Apogee Enterprises, Inc. 121,200 1,855,874
Metalclad Corp. 24,700(a) 25,472
1,881,346
Public Building & Related
Furniture (0.81%)
BE Aerospace, Inc. 75,000(a) 2,184,375
Refrigeration & Service
Machinery (0.30%)
Tecumseh Products Co., Class A 15,300 808,031
Sanitary Services (0.64%)
Browning-Ferris Industries, Inc. 49,500 1,720,125
Savings Institutions (2.53%)
Greenpoint Financial Corp. 70,000 2,633,750
Sterling Financial Corp. 62,000 1,410,500
WSFS Financial Corp. 135,000 2,767,500
6,811,750
Schools & Educational Services (0.06%)
School Specialty, Inc. 9,519(a) 155,868
Security Brokers & Dealers (0.81%)
Jefferies Group, Inc. 52,800 2,164,800
Telephone Communications (2.73%)
Hyperion Telecommunications, Inc.,
Class A 100,000(a) 1,568,750
McLeod USA, Inc. 86,600(a) 3,366,575
WinStar Communications, Inc. 56,000(a) 2,404,500
7,339,825
Toys & Sporting Goods (0.87%)
Mattel, Inc. 55,000 2,327,187
Trucking & Courier Services,
Except Air (0.75%)
J. B. Hunt Transport Services, Inc. 56,900 2,027,063
Women's & Children's
Undergarments (0.61%)
Warnaco Group, Class A 38,556 1,636,220
Total Common Stocks 250,388,034
Bonds (0.18%)
Management & Public Relations (0.18%)
Complete Management, Inc. Convertible
Debentures; 8.00%; 12/15/03 $1,000,000 $ 495,000
Commercial Paper (6.57%)
Miscellaneous Electrical Equipment &
Supplies (1.82%)
General Electric Co.; 5.80%; 7/06/98 4,900,000 4,896,053
Personal Credit Institutions (4.75%)
Investment in Joint Trade Account,
Associates Corp.; 6.25%; 7/1/98 12,759,330 12,759,330
Total Commercial Paper 17,655,383
Total Portfolio Investments (99.88%) 268,538,417
Cash and receivables, net of liabilities (0.12%) 328,509
Total Net Assets (100.00%) $268,866,926
(a) Non-income producing security - No dividend paid during the past twelve
months.
MIDCAP GROWTH ACCOUNT
Shares
Held Value
Common Stocks (94.86%)
Accounting, Auditing &
Bookkeeping (0.23%)
Billing Concepts Corp. 800(a) $ 12,400
Advertising (1.08%)
Snyder Communications, Inc. 1,300(a) 57,200
Air Transportation, Scheduled (0.73%)
UAL Corp. 500(a) 39,000
Aircraft & Parts (0.79%)
Gulfstream Aerospace Corp. 900(a) 41,850
Automotive Rentals, No Drivers (1.08%)
Hertz Corp., Inc. 1,300 57,606
Bakery Products (0.94%)
Interstate Bakeries 1,500 49,781
Blast Furnace & Basic Steel
Products (0.37%)
Bethlehem Steel Corp. 1,600(a) 19,900
Cement, Hydraulic (0.51%)
Centex Construction Products 700 26,950
Combination Utility Services (3.17%)
Commonwealth Energy Systems 2,200 83,050
Montana Power Co. 1,200 41,700
Sierra Pacific Resources 1,200 43,575
168,325
Commercial Banks (6.84%)
City National Corp. 1,400 51,712
Cullen Frost Bankers 600 32,550
First Security Corp. 1,100 23,547
Imperial Bancorp. 1,100(a) 33,000
Mercantile Bankshares Corp. 1,200 41,775
North Fork Bancorp., Inc. 700 17,106
Provident Financial Group 1,100 50,188
Southtrust Corp. 1,500 65,250
Zions Bancorp. 900 47,812
362,940
Commercial Printing (1.10%)
Bowne & Co., Inc. 1,300 58,500
Communications Equipment (1.62%)
Tellabs, Inc. 1,200(a) 85,950
Computer & Data Processing
Services (7.63%)
America Online, Inc. 500 53,000
BMC Software, Inc. 1,900(a) 98,680
Cadence Design Systems, Inc. 1,500(a) 46,875
Computer Task Group 700 23,450
Compuware Corp. 1,400(a) 71,575
Keane, Inc. 600(a) 33,600
Network Associates 750(a) 35,906
Sterling Software 1,400(a) 41,387
404,473
Computer & Office Equipment (1.58%)
Apple Computer, Inc. 600(a) 17,212
Storage Technology 900(a) 39,038
Stratus Computer 1,100(a) 27,844
84,094
Construction & Related
Machinery (0.48%)
Cooper Cameron Corp. 500(a) 25,500
Cutlery, Handtools & Hardware (0.69%)
Danaher Corp. 1,000 36,688
Deep Sea Foreign Transportation
of Freight (0.31%)
Trico Marine Services, Inc. 1,200(a) 16,425
Department Stores (1.22%)
Proffitts, Inc. 1,600 64,600
Drugs (4.03%)
Biogen, Inc. 1,200(a) 58,800
Elan Corp. PLC ADR 1,000(a) 64,313
Rexall Sundown, Inc. 600(a) $ 21,150
Watson Pharmaceuticals 1,500(a) 70,031
214,294
Eating & Drinking Places (0.42%)
Cracker Barrel Old Country Store, Inc. 700 22,225
Electric Services (5.25%)
AES Corp. 700(a) 36,793
BEC Energy Com 1,700 70,550
DQE, Inc. 1,200 43,200
GPU, Inc. 1,600 60,500
Pinnacle West Capital Corp. 1,500 67,500
278,543
Electrical Goods (0.29%)
Cellstar Corp. 1,200(a) 15,525
Electrical Industrial Apparatus (0.62%)
American Power Conversion 1,100(a) 33,000
Electronic Components &
Accessories (2.21%)
Linear Technology Corp. 700 42,219
Maxim Integrated Products, Inc. 1,700(a) 53,869
Solectron Corp. 500(a) 21,031
117,119
Engines & Turbines (0.39%)
Cummins Engine Co., Inc. 400 20,500
Family Clothing Stores (2.60%)
Ross Stores, Inc. 1,300 55,900
TJX Cos., Inc. 3,400 82,025
137,925
Farm & Garden Machinery (0.68%)
Case Corp. 500 24,125
New Holland NV 600 11,775
35,900
Fire, Marine, & Casualty Insurance (0.52%)
Renaissance Holdings Ltd. 600 27,788
Gas Production & Distribution (1.97%)
El Paso Natural Gas 1,100 42,075
National Fuel Gas Co. 900 39,206
Questar Corp. 1,200 23,550
104,831
General Industrial Machinery (0.75%)
Timken Co. 1,300 40,056
Grocery Stores (0.57%)
Whole Foods Market, Inc. 500(a) 30,250
Health & Allied Services, NEC (0.48%)
Lincare Holdings, Inc. 600(a) 25,238
Household Furniture (1.98%)
Furniture Brands International, Inc. 1,600(a) 44,900
Leggett & Platt, Inc. 2,400 60,000
104,900
Industrial Organic Chemicals (0.84%)
International Specialty Products 2,400(a) 44,700
Iron Ores (0.20%)
Cleveland-Cliffs, Inc. 200 10,725
Measuring & Controlling Devices (1.44%)
Waters Corp. 1,300(a) $ 76,619
Meat Products (1.04%)
Hormel Foods Corp. 1,600 55,300
Medical Instruments & Supplies (3.82%)
Arterial Vascular Engineering 900(a) 32,175
Ballard Medical Products 1,500 27,000
Biomet, Inc. 1,700 56,206
Dentsply International, Inc. 200 5,000
Steris Corp. 1,300(a) 82,672
203,053
Medical Service & Health
Insurance (0.51%)
Aflac, Inc. 900 27,281
Men's & Boys' Furnishings (1.62%)
Nautica Enterprises, Inc. 900(a) 24,131
V.F. Corp. 1,200 61,800
85,931
Metal Cans & Shipping
Containers (0.83%)
Ball Corp. 1,100 44,206
Miscellaneous Chemical
Products (1.08%)
Cytec Industries 1,300(a) 57,525
Miscellaneous Equipment Rental &
Leasing (0.71%)
Cort Business Services 1,200 37,800
Miscellaneous Food & Kindred
Products (1.00%)
Universal Foods Corp. 2,400 53,250
Miscellaneous Food Stores (0.70%)
General Nutrition Cos. 1,200(a) 37,350
Miscellaneous Investing (0.47%)
Ihop Corp. 600(a) 24,825
Miscellaneous Plastics
Products, NEC (0.47%)
Aptargroup, Inc. 400 24,875
Miscellaneous Shopping Goods
Stores (1.36%)
Dollar Tree Stores, Inc. 600(a) 24,375
Zale Corp. 1,500(a) 47,719
72,094
Motion Picture Distribution &
Services (0.24%)
King World Productions 500(a) 12,750
Motor Vehicles & Equipment (0.38%)
Federal Mogul Corp. 300 20,250
Motorcycles, Bicycles & Parts (0.66%)
Harley Davidson, Inc. 900 34,875
Newspapers (1.13%)
Pulitzer Publishing Co. 400 35,700
The McClatchy Co., Class A 200 6,925
Washington Post Co., Class B 30 17,280
59,905
Non-Ferrous Rolling & Drawing (0.41%)
General Cable Corp. 750 21,656
Oil & Gas Field Services (2.15%)
Cliffs Drilling Co. 600(a) 19,688
Helmerich & Payne 1,300 28,925
Noble Drilling Corp. 1,600(a) 38,500
Rowan Cos., Inc. 1,400(a) 27,213
114,326
Paperboard Mills (0.87%)
Caraustar Industries, Inc. 1,600 46,200
Passenger Transportation
Arrangement (1.00%)
Sabre Group Holdings, Inc. 1,400(a) 53,200
Personal Credit Institutions (0.81%)
Firstplus Financial Group 1,200(a) 43,200
Personnel Supply Services (0.88%)
Accustaff, Inc. 1,500(a) 46,875
Petroleum Refining (1.68%)
Sun Company, Inc. 1,700 65,981
Valero Energy Corp. 700 23,275
89,256
Plastic Materials & Synthetics (1.68%)
Crompton & Knowles 1,900 47,856
Rohm & Haas Co. 400 41,575
89,431
Preserved Fruits & Vegetables (0.36%)
Lancaster Colony 500 18,938
Professional & Commercial
Equipment (0.71%)
CHS Electronics, Inc. 2,100(a) 37,538
Rental of Railroad Cars (0.41%)
Gatx Corp. 500 21,938
Sanitary Services (1.24%)
Allied Waste Industries, Inc. 1,300(a) 31,200
USA Waste Services, Inc. 700(a) 34,563
65,763
Savings Institutions (1.16%)
Charter One Financial, Inc. 1,200 40,425
Downey Financial 650 21,247
61,672
Security & Commodity Services (0.99%)
Price (T. Rowe) Associates 1,400 52,588
Security Brokers & Dealers (1.58%)
Bear Stearns Cos., Inc. 1,100 62,562
Edwards (A.G.), Inc. 500 21,344
83,906
Shoe Stores (0.69%)
Payless Shoesource, Inc. 500(a) 36,844
Soap, Cleaners & Toilet Goods (0.97%)
Alberto-Culver Co., Class B 700 20,300
Estee Lauder Co., Class A 450 31,359
51,659
Surety Insurance (2.26%)
CMAC Investment Corp. 500 30,750
Old Republic International Corp. 1,550 45,434
The PMI Group, Inc. 600 44,025
120,209
Telephone Communications (2.35%)
Century Telephone Enterprises 1,600 73,400
Star Telecommunications 1,100(a) 24,612
Tel-Save Holdings, Inc. 1,800(a) 26,550
124,562
Variety Stores (0.84%)
Family Dollar Stores 2,400 44,400
Wood Buildings & Mobile
Homes (0.19%)
ABT Building Products Corp. 600(a) 10,313
Total Portfolio Investments (94.86%) 5,038,064
Cash and receivables, net of liabilities (5.14%) 273,203
Total Net Assets (100.00%) $5,311,267
(a) Non-income producing security - No dividend paid during the past twelve
months.
MONEY MARKET ACCOUNT
Principal
Amount Value
Commercial Paper (87.27%)
Asset Backed Securities (17.73%)
CXC Inc.;
5.54%; 7/6/98 $ 700,000 $ 699,461
5.53%; 7/16/98 325,000 324,251
5.54%; 7/16/98 500,000 498,846
5.53%; 8/19/98 300,000 297,742
Corporate Asset Funding Co.;
5.52%; 7/7/98 1,240,000 1,238,859
5.52%; 7/14/98 675,000 673,655
5.53%; 9/2/98 1,225,000 1,213,145
Corporate Receivables Corp.;
5.53%; 7/21/98 1,000,000 996,928
5.52%; 7/30/98 575,000 572,443
5.54%; 8/5/98 400,000 397,846
5.55%; 8/13/98 1,150,000 1,142,376
Sheffield Receivables Corp.;
5.51%; 7/7/98 725,000 724,334
5.50%; 7/10/98 375,000 374,484
5.54%; 7/10/98 675,000 674,065
5.60%; 7/21/98 300,000 299,067
10,127,502
Business Credit Institutions (6.26%)
AON Corp.;
5.54%; 8/6/98 850,000 845,291
General Electric Capital Corp.;
5.45%; 7/24/98 375,000 373,694
5.44%; 9/18/98 350,000 345,822
5.41%; 10/23/98 450,000 442,291
5.43%; 11/20/98 125,000 122,323
5.42%; 12/22/98 250,000 243,451
5.44%; 1/15/99 500,000 485,040
5.50%; 1/22/99 250,000 242,170
5.45%; 3/8/99 190,000 182,809
5.42%; 3/12/99 300,000 288,528
3,571,419
Commercial Banks (4.15%)
Norwest Corp.;
6.03%; 7/1/98 1,000,000 1,000,000
5.53%; 8/12/98 1,375,000 1,366,129
2,366,129
Cutlery, Handtools & Hardware (2.60%)
Stanley Works.;
5.50%; 9/10/98 475,000 469,848
5.50%; 9/17/98 1,025,000 1,012,785
1,482,633
Department Stores (3.35%)
J.C. Penney Funding Corp.;
5.52%; 7/17/98 1,000,000 997,547
Sears Roebuck Acceptance Corp.;
5.52%; 7/22/98 915,000 912,053
1,909,600
Electric Services (1.96%)
Commed Fuel Co., Inc.;
LOC First National Bank of Chicago;
5.51%; 8/5/98 800,000 795,714
5.50%; 8/7/98 325,000 323,163
1,118,877
Finance Services (5.45%)
Mitsubishi International Corp.;
5.52%; 7/8/98 300,000 299,678
5.56%; 7/21/98 250,000 249,227
5.55%; 7/29/98 1,175,000 1,169,928
5.53%; 8/3/98 725,000 721,325
5.55%; 8/4/98 675,000 671,462
3,111,620
Insurance Agents, Brokers &
Services (1.32%)
Marsh & Mclennan Cos.;
5.53%; 9/25/98 765,000 754,894
Investment Offices (5.50%)
Morgan Stanley Group, Inc.;
5.51%; 7/13/98 450,000 449,173
5.49%; 7/22/98 500,000 498,400
5.49%; 7/23/98 1,100,000 1,096,309
5.53%; 8/7/98 1,100,000 1,093,748
3,137,630
Life Insurance (1.66%)
American General Corp.;
5.50%; 7/6/98 350,000 349,733
5.51%; 7/27/98 600,000 597,612
947,345
Miscellaneous Electrical Equipment &
Supplies (1.60%)
General Electric Co.;
5.55%; 8/19/98 175,000 173,678
5.45%; 10/2/98 750,000 739,441
913,119
Miscellaneous Investing (1.23%)
Delaware Funding Corp.;
5.53%; 7/8/98 700,000 699,248
Miscellaneous Manufacturers (0.70%)
Dover Corp.;
5.55%; 7/16/98 400,000 399,075
Mortgage Bankers & Brokers (4.90%)
Countrywide Home Loan, Inc.;
5.58%; 8/26/98 625,000 619,575
5.55%; 8/27/98 500,000 495,606
5.53%; 9/3/98 750,000 742,627
5.53%; 9/4/98 950,000 940,514
2,798,322
Paint, Glass & Wallpaper Stores (3.50%)
Sherwin-Williams Co.;
5.52%; 7/2/98 500,000 499,923
5.51%; 7/13/98 1,000,000 998,163
5.53%; 7/14/98 500,000 499,002
1,997,088
Personal Credit Institutions (13.16%)
Associates First Capital Corp.;
5.52%; 7/27/98 400,000 398,405
5.52%; 7/31/98 1,325,000 1,318,905
5.52%; 8/14/98 1,150,000 1,142,241
5.52%; 9/11/98 325,000 321,413
Beneficial Corp.;
5.55%; 7/15/98 400,000 399,137
5.54%; 7/30/98 245,000 243,907
Comoloco, Inc.;
5.37%; 8/18/98 250,000 248,210
5.42%; 9/3/98 400,000 396,146
5.62%; 9/8/98 375,000 370,960
5.62%; 9/15/98 350,000 345,847
5.34%; 11/13/98 300,000 293,993
5.34%; 11/20/98 225,000 220,261
5.40%; 11/24/98 250,000 244,525
5.50%; 2/23/99 500,000 481,692
5.48%; 3/5/99 100,000 96,240
General Motors Acceptance Corp.;
5.52%; 7/15/98 1,000,000 997,853
7,519,735
Security Brokers & Dealers (12.20%)
Bear Stearns Cos., Inc.;
5.52%; 7/20/98 1,100,000 1,096,795
5.53%; 7/24/98 1,000,000 996,467
5.53%; 8/4/98 1,000,000 994,777
Goldman Sachs Group, L.P.;
5.52%; 8/28/98 1,000,000 991,107
Merrill Lynch & Co., Inc.;
5.53%; 7/9/98 775,000 774,048
5.35%; 7/17/98 300,000 299,287
5.63%; 9/1/98 375,000 371,364
5.32%; 10/30/98 250,000 245,530
5.32%; 11/6/98 225,000 220,744
5.38%; 11/20/98 225,000 220,225
5.39%; 12/11/98 325,000 317,068
5.51%; 2/8/99 250,000 241,505
5.48%; 3/8/99 200,000 192,389
6,961,306
Total Commercial Paper 49,815,542
Bank Notes (2.72%)
Commercial Banks (2.72%)
BankBoston, N.A.;
5.97%; 10/23/98 250,000 250,000
Morgan Guaranty Trust Co.;
5.93%; 8/31/98 300,000 299,997
Morgan Guaranty Trust Co.
Certificate of Deposit;
5.84%; 7/28/98 1,000,000 999,972
Total Bank Notes 1,549,969
Bonds (10.45%)
Beverages (0.60%)
Coca-Cola Co. Notes;
7.88%; 9/15/98 340,000 341,346
Business Credit Institutions (4.78%)
Associates Corp., N.A. Senior Notes;
8.80%; 8/1/98 125,000 125,277
CIT Group Holdings, Inc.
Medium-Term Notes;
5.88%; 11/9/98 250,000 250,075
Senior Notes; 6.38%; 5/21/99 800,000 803,994
Ford Motor Credit Co. Notes;
5.63%; 12/15/98 712,000 711,543
5.63%; 1/15/99 121,000 120,812
8.00%; 1/15/99 101,000 102,108
7.25%; 5/15/99 605,000 612,135
2,725,944
Department Stores (0.18%)
J.C. Penney Co. Notes;
6.88%; 6/15/99 101,000 101,981
Fire, Marine & Casualty Insurance (0.18%)
Commercial Credit Co. Debentures;
9.60%; 5/15/99 100,000 103,037
Life Insurance (0.26%)
Transamerica Financial Corp. Senior
Notes; 6.80%; 3/15/99 150,000 150,970
Personal Credit Institutions (4.45%)
American General Finance Corp.
Senior Notes; 6.88%; 7/1/99 155,000 156,567
Associates Corp. of North America
Senior Notes;
6.38%; 8/15/98 $ 300,000 $ 300,146
5.25%; 9/1/98 350,000 349,578
6.50%; 9/9/98 200,000 200,223
6.25%; 3/15/99 750,000 752,449
General Motors Acceptance Corp. Notes;
7.13%; 6/1/99 142,000 143,579
Household Finance Co. Notes;
7.63%; 6/15/99 100,000 101,537
Norwest Financial, Inc. Senior Notes;
8.50%; 8/15/98 433,000 434,288
6.25%; 3/15/99 105,000 105,309
2,543,675
Total Bonds 5,966,953
Total Portfolio Investments (100.44%) 57,332,464
Liabilities, net of cash and receivables (-0.44%) (253,473)
Total Net Assets (100.00%) $57,078,991
REAL ESTATE ACCOUNT
Shares
Held Value
Common Stocks (38.04%)
Apartment REITS (13.73%)
Avalon Bay Communities, Inc. 10,000 $ 380,000
Equity Residential Properties Trust 8,000 379,500
Gables Residential Trust 13,000 352,625
Security Capital Atlantic, Inc. 16,000 357,000
1,469,125
Factory Outlet REITS (2.24%)
Chelsea GCA Realty 6,000 240,000
Mall REITS (2.10%)
General Growth Properties 6,000 224,250
Manufactured Homes REITS (3.21%)
Manufactured Home Communities, Inc. 6,000 144,750
Sun Communities, Inc. 6,000 198,750
343,500
Net Lease REITS (3.18%)
Trinet Corporate Realty Trust, Inc. 10,000 340,000
Office & Industrial REITS (10.31%)
Cornerstone Properties 12,000 211,500
Duke Realty Investments, Inc. 10,000 236,875
Kilroy Realty Corp. 10,000 250,000
Security Capital Industrial Trust 10,000 250,000
Spieker Properties, Inc. 4,000 155,000
1,103,375
Self Storage REITS (3.27%)
Storage USA 10,000 350,000
Total Common Stocks 4,070,250
Principal
Amount Value
Commercial Paper (80.05%)
Business Credit Institutions (3.73%)
American Express Credit Corp.;
5.55%; 7/16/98 $ 400,000 $ 399,075
Federal & Federally Sponsored
Credit (65.74%)
Federal National Mortgage Association;
5.44%; 7/2/98 1,500,000 1,499,773
Investment in Joint Trade Account;
FHLMC; 5.85%; 7/1/98 5,535,010 5,535,010
7,034,783
Personal Credit Institutions (10.58%)
Ford Motor Credit Co.;
5.54%; 7/14/98 400,000 399,200
Household Finance Corp.;
5.55%; 7/23/98 335,000 333,864
Norwest Financial, Inc.;
5.56%; 7/21/98 400,000 398,764
1,131,828
Total Commercial Paper 8,565,686
Total Portfolio Investments (118.09%) 12,635,936
Liabilities, net of cash and receivables (-18.09%) (1,935,629)
Total Net Assets (100.00%) $10,700,307
SMALLCAP ACCOUNT
Shares
Held Value
Common Stocks (93.07%)
Blast Furnace & Basic Steel
Products (2.23%)
Carpenter Technology 2,900 $ 145,725
NS Group, Inc. 7,100(a) 71,887
217,612
Commercial Banks (3.22%)
Associated Banc Corp. 4,150 156,144
First Federal Capital Corp. 8,800 157,850
313,994
Commercial Printing (1.37%)
World Color Press, Inc. 3,800(a) $ 133,000
Communications Equipment (5.41%)
Allen Telecom, Inc. 9,200(a) 106,950
DSP Communications, Inc. 10,900(a) 149,875
Larscom, Inc. 15,600(a) 110,175
Sawtek, Inc. 3,800(a) 56,050
Spectrian Corp. 6,400(a) 103,600
526,650
Computer & Data Processing
Services (6.08%)
GTECH Holdings Corp. 3,100(a) 104,431
Hypercom Corp. 8,400(a) 84,000
ICG Communications, Inc. 4,000(a) 146,250
SPSS, Inc. 4,000(a) 93,000
Synopsys, Inc. 3,600(a) 164,700
592,381
Computer & Office Equipment (0.57%)
Smart Modular Technologies , Inc. 3,800(a) 55,575
Construction & Related
Machinery (1.50%)
JLG Industries, Inc. 7,200 145,800
Crude Petroleum & Natural Gas (2.93%)
Forcenergy, Inc. 7,200(a) 128,250
Nuevo Energy Co. 4,900(a) 157,412
285,662
Deep Sea Foreign Transportation
of Freight (0.72%)
Trico Marine Services, Inc. 5,100(a) 69,806
Drugs (3.06%)
Chirex, Inc. 6,700(a) 117,669
Inhale Therapeutic Systems 5,300(a) 131,175
Matritech, Inc. 24,000(a) 49,500
298,344
Eating & Drinking Places (1.34%)
Ruby Tuesday, Inc. 8,400 130,200
Electric Services (1.43%)
TNP Enterprises, Inc. 4,500 138,937
Electronic Components &
Accessories (7.76%)
DII Group, Inc. 12,100(a) 206,456
Flextronics International 2,300(a) 100,050
Hadco Corp. 2,600(a) 60,613
Jabil Circuit, Inc. 5,300(a) 138,462
Microchip Technology, Inc. 3,100(a) 102,494
Sanmina Corp. 3,400(a) 147,475
755,550
Family Clothing Stores (1.16%)
Gadzooks, Inc. 4,100(a) 113,006
Fire, Marine, & Casualty Insurance (3.28%)
HCC Insurance Holdings, Inc. 8,700 191,400
Berkley (W.R.) Corp. 3,200 128,200
319,600
Furniture & Home Furnishings (1.10%)
Cost Plus, Inc. 3,600(a) 107,100
General Industrial Machinery (2.27%)
General Scanning, Inc. 8,500(a) 75,969
Regal Beloit 5,100 145,350
221,319
Grain Mill Products (1.41%)
Ralcorp Holdings, Inc. 7,300(a) 137,787
Hotels & Motels (0.95%)
Servico, Inc. 6,200(a) 93,000
Industrial Machinery, NEC (1.00%)
Industrial Distribution Group 6,300(a) 97,650
Industrial Organic Chemicals (1.06%)
CFC International 9,600(a) 103,200
Lumber & Other Building
Materials (1.26%)
Eagle Hardware 5,300(a) 122,562
Measuring & Controlling
Devices (2.87%)
Cytyc Corp. 7,900(a) 128,869
Integrated Measurement Systems 9,300(a) 72,075
Quickturn Design Systems, Inc. 10,750(a) 78,609
279,553
Medical & Dental Laboratories (1.16%)
Urocor, Inc. 15,900(a) 113,287
Medical Instruments & Supplies (3.64%)
Adac Laboratories 6,800 153,000
Focal, Inc. 4,900(a) 49,000
Hologic, Inc. 8,400(a) 152,775
354,775
Medical Service & Health
Insurance (0.10%)
FPA Medical Management 8,800(a) 10,175
Men's & Boys' Clothing Stores (0.93%)
Hot Topic, Inc. 3,800(a) 90,250
Men's & Boys' Furnishings (1.29%)
Nautica Enterprises, Inc. 4,700(a) 126,019
Metal Services, NEC (0.75%)
BMC Industries, Inc. 8,400 73,500
Miscellaneous Chemical
Products (1.65%)
Fuller (H.B.) Co. 2,900 160,769
Miscellaneous Converted Paper
Products (1.17%)
Shorewood Packaging Corp. 7,200(a) 114,300
Miscellaneous Electrical Equipment &
Supplies (0.76%)
Motorcar Parts & Accessories 5,000(a) 73,750
Miscellaneous Fabricated Metal
Products (1.44%)
Watts Industries, Inc. 6,700 139,863
Miscellaneous Manufacturers (1.54%)
Russ Berrie & Co. 6,000 150,000
Miscellaneous Non-Metallic
Mineral Products (0.74%)
Hexcel Corp. 3,200(a) $ 72,400
Miscellaneous Shopping Goods
Stores (1.01%)
Zale Corp. 3,100(a) 98,619
Motor Vehicles & Equipment (1.84%)
United Auto Group 8,200(a) 179,375
Non-Ferrous Rolling & Drawing (0.86%)
Titanium Metals Corp. 3,800 83,838
Non-Store Retailers (0.76%)
USA Floral Products, Inc. 4,700(a) 74,025
Office Furniture (3.07%)
Chromcraft Revington, Inc. 8,600(a) 155,875
Kimball International, Inc., Class B 7,900 143,188
299,063
Oil & Gas Field Service (0.77%)
Marine Drilling Co., Inc. 4,700(a) 75,200
Personal Credit Institutions (1.11%)
Firstplus Financial Group 3,000(a) 108,000
Photographic Equipment &
Supplies (0.91%)
Imax Corp. 3,900(a) 88,969
Plumbing, Heating,
Air-Conditioning (1.79%)
Apogee Enterprises, Inc. 11,400 174,563
Public Building & Related
Furniture (0.81%)
BE Aerospace, Inc. 2,700(a) 78,638
Rubber & Plastics Footwear (1.26%)
Vans, Inc. 12,700(a) 123,031
Savings Institutions (1.83%)
Community First Bankshare 6,800 178,075
Security Brokers & Dealers (1.73%)
Jefferies Group, Inc. 4,100 168,100
Soap, Cleaners, & Toilet Goods (2.70%)
Carter-Wallace, Inc. 8,500 153,531
Digene Corp. 11,200(a) 109,200
262,731
Surety Insurance (1.73%)
Enhance Financial Services Group 5,000 168,750
Women's Clothing Stores (1.74%)
Wet Seal, Inc., CLA 5,300(a) $ 169,600
Total Common Stocks 9,067,953
Principal
Amount Value
Commercial Paper (6.55%)
Federal & Federally Sponsored
Credit (6.55%)
Investment in Joint Trade Account;
FHLMC; 5.85%; 7/1/98 $ 637,925 $ 637,925
Total Portfolio Investments (99.62%) 9,705,878
Cash, receivables and other assets,
net of liabilities (0.38%) 37,467
Total Net Assets (100.00%) $9,743,345
(a) Non-income producing security - No dividend paid during the past twelve
months.
SMALLCAP GROWTH ACCOUNT
Shares
Held Value
Common Stocks (102.35%)
Accounting, Auditing &
Bookkeeping (1.01%)
Profit Recovery Group
International, Inc. 2,000(a) $ 55,875
Advertising (3.21%)
Lycos 1,200(a) 90,450
TMP Worldwide, Inc. 2,500(a) 87,188
177,638
Airports, Flying Fields &
Services (2.14%)
AHL Services, Inc. 3,000(a) 118,125
Apparel & Accessory Stores (1.79%)
Men's Wearhouse, Inc. 3,000(a) 99,000
Business Credit Institutions (1.66%)
Resource America, Inc. 3,100 91,838
Communications Equipment (1.68%)
Antec Corp. 4,000(a) 92,750
Computer & Data Processing
Services (21.35%)
Aspen Technology, Inc. 2,000(a) 101,000
Axent Technologies 3,000(a) 91,875
CMG Information Services, Inc. 1,400(a) 99,050
Daou Systems, Inc. 5,000(a) 114,375
Docucorp International 6,000(a) 39,375
Documentum, Inc. 1,000(a) 48,000
Icon CMT Corp. 3,600(a) 66,600
Inspire Insurance Solutions, Inc. 2,500(a) 83,125
Macromedia, Inc. 3,000(a) $ 56,063
Basin Exploration, Inc. 5,000(a) 88,125
Mercury Ineractive Corp. 600(a) 26,775
Paradigm Geophysical Ltd. 3,500(a) 24,609
Quadramed Corp. 3,000(a) 81,937
Sapient Corp. 1,000(a) 52,750
Tier Technologies, Class B 6,000(a) 106,875
TSI International Software Ltd. 3,500(a) 80,062
USWeb Corp. 2,100(a) 49,743
Verio, Inc. 2,300(a) 57,212
1,179,426
Crude Petroleum & Natural Gas (2.63%)
Basin Exploration, Inc. 5,000(a) 88,125
Swift Energy Co. 3,600 57,375
145,500
Drugs (2.47%)
Pharmacylics, Inc. 3,000(a) 71,250
Theragenics Corp. 2,500(a) 65,156
136,406
Electrical Goods (1.91%)
Dunn Computer Corp. 5,000(a) 41,250
Kent Electonics Corp. 3,500(a) 64,094
105,344
Elementary & Secondary Schools (1.80%)
Computer Learning Centers, Inc. 4,000(a) 99,500
Engineering & Architectural
Services (1.97%)
Tetra Tech, Inc. 4,500(a) 109,125
Environmental Quality (1.18%)
US Liquids, Inc. 3,000(a) 65,250
Fire, Marine, & Casualty Insurance (1.28%)
American Safety Insurance Group 6,000(a) 70,500
Fuel Dealers (1.58%)
Blue Rhino Corp. 5,000(a) 87,500
Furniture & Home Furnishings (2.44%)
Cost Plus, Inc. 1,500(a) 44,625
Guitar Center, Inc. 3,000(a) 90,375
135,000
Grocery Stores (1.37%)
Wild Oats Markets, Inc. 2,500(a) 75,938
Hardware, Plumbing & Heating
Equipment (0.81%)
World Access, Inc. 1,500(a) 45,000
Health & Allied Services, NEC (3.64%)
Renal Care Group, Inc. 2,500(a) 110,156
Sterigenics International, Inc. 3,500(a) 91,000
201,156
Insurance Agents, Brokers & Service (0.61%)
Healthcare Recoveries, Inc. 1,700(a) 33,575
Management & Public Relations (1.64%)
Diamond Technology Partners, Inc. 3,000(a) 90,750
Measuring & Controlling Devices (1.12%)
North American Scientific 3,000(a) $ 61,875
Medical & Dental Laboratories (0.54%)
Idexx Lab, Inc. 1,200(a) 29,850
Men's & Boys' Clothing Stores (1.43%)
K & G Men's Center, Inc. 3,500(a) 79,188
Miscellaneous Apparel & Accessories (1.41%)
Novel Denim Holdings Ltd. 3,000(a) 78,000
Miscellaneous Business Services (8.72%)
Boron Lepore & Associates 3,000(a) 114,000
First Consulting Group, Inc. 3,500(a) 91,875
Forester Research 2,000(a) 79,500
Mindspring Enterprises, Inc. 1,000(a) 102,875
Nova Corp. 2,600(a) 92,950
481,200
Miscellaneous Durable Goods (1.41%)
Ha-Lo Industries, Inc. 2,500(a) 77,813
Miscellaneous Food & Kindred
Products (0.63%)
Celestial Seasonings, Inc. 700(a) 34,650
Miscellaneous Investing (1.34%)
Affiliated Managers Group 2,000(a) 74,250
Non-Ferrous Foundries
(Castings) (1.28%)
AFC Cable 2,000 71,000
Non-Store Retailers (1.34%)
Onsale, Inc. 3,000(a) 74,250
Oil & Gas Field Services (1.44%)
Atwood Oceanics 2,000(a) 79,625
Personnel Supply Services (6.32%)
Labor Ready, Inc. 3,500(a) 105,656
On Assignment, Inc. 3,000(a) 104,812
Personnel Group of America, Inc. 1,600(a) 32,000
Romac International, Inc. 3,500(a) 106,312
348,780
Radio & Television Broadcasting (2.48%)
Emmis Broadcasting Corp. 1,600(a) 76,500
Scandinavian Broadcasting Systems 2,000(a) 60,375
136,875
Refrigeration & Service Machinery (1.80%)
Micros Systems, Inc. 3,000(a) 99,281
Sanitary Services (5.21%)
American Disposal Services 2,000(a) 93,750
Eastern Environmental Services 3,500(a) 119,000
Superior Services, Inc. 2,500(a) 75,156
287,906
Savings Institutions (0.64%)
Net.B@nk, Inc. 1,200(a) 35,400
Special Industry Machinery (1.74%)
Integrated Process Equipment 4,000(a) 45,000
PRI Automation, Inc. 3,000(a) 51,188
96,188
Telephone Communications (3.95%)
Adtran, Inc. 900(a) $ 23,513
Metromedia Fiber Networks, Inc. 2,500(a) 116,563
Primus Telecommunications Group, Inc. 1,700(a) 32,194
Startec Global Communications 4,000(a) 46,000
218,270
Used Merchandise Stores (1.38%)
Cash America International, Inc. 5,000 76,250
Total Portfolio Investments (102.35%) 5,655,847
Liabilities, net of cash and receivables (-2.35%) (129,753)
Total Net Assets (100.00%) $5,526,094
(a) Non-income producing security - No dividend paid during the past twelve
months.
SMALLCAP VALUE ACCOUNT
Shares
Held Value
Common Stocks (93.82%)
Air Transportation, Scheduled (0.68%)
ASA Holdings, Inc. 700 $ 34,738
Beverages (0.26%)
Beringer Wine Estates 300(a) 13,219
Broadwoven Fabric Mills,
Cotton (0.19%)
Collins & Aikman Corp. 1,300(a) 9,669
Combination Utility Services (2.43%)
Central Hudson Gas & Electric Corp. 2,700 123,863
Commercial Banks (8.69%)
Bank of Commerce 1,500 28,125
Colonial Bank Group, Inc. 3,100 99,975
First International Bancorp., Inc. 900 12,937
Hamilton Bancorp., Inc. 900(a) 32,428
Imperial Bancorp. 1,000(a) 30,000
National Commerce Bancorp. 2,600 108,875
Prime Bancshares, Inc. 700 17,762
Republic Banking Corp. of Florida 1,600 25,600
Summit Bancshares, Inc. 1,100 23,375
Sun Bancorp., Inc. 210(a) 5,565
TrustCo Bank Corp. 2,200 57,750
442,392
Commercial Printing (1.09%)
Banta Corp. 1,800 55,575
Communications Equipment (0.84%)
ANTEC Corp. 400(a) $ 9,275
Davox Corp. 200(a) 4,375
Excel Switching Corp. 200(a) 4,975
Glenayre Technologies, Inc. 800(a) 8,600
Lifeline Systems, Inc. 500(a) 9,250
Natural Microsystems Corp. 400(a) 6,400
42,875
Communications Services, NEC (0.15%)
ITC DeltaCom, Inc. 100(a) 4,273
L-3 Communications Holdings, Inc. 100(a) 3,269
7,542
Computer & Data Processing
Services (1.81%)
CNET, Inc. 100(a) 6,825
Condor Technology Solutions, Inc. 400(a) 5,900
Edify Corp. 300(a) 3,037
ICG Communications, Inc. 200(a) 7,312
Incyte Pharmaceuticals, Inc. 200(a) 6,825
Informix Corp. 100(a) 791
Integrated Systems, Inc. 100(a) 1,537
International Network Services 300(a) 12,300
Macromedia, Inc. 200(a) 3,737
MAPICS, Inc. 200(a) 3,938
Metro Information Services, Inc. 100(a) 3,913
Omtool Ltd. 100(a) 763
Pegasus Systems, Inc. 600(a) 15,375
Radiant Systems, Inc. 200(a) 2,900
Remedy Corp. 100(a) 1,700
Sapient Corp. 100(a) 5,275
Transaction Systems Architects, Inc. 200(a) 7,700
Verio, Inc. 100(a) 2,487
92,315
Computer & Office Equipment (0.26%)
HMT Technology Corp. 800(a) 6,700
Proxim, Inc. 400(a) 6,650
13,350
Crude Petroleum & Natural Gas (0.70%)
Devon Energy Corp. 500 17,469
St. Mary Land & Exploration 200 4,825
Vintage Petroleum, Inc. 700 13,212
35,506
Cut Stone & Stone Products (0.06%)
Rock of Ages Corp. 200(a) 3,100
Drugs (0.52%)
ArQule, Inc. 100(a) 1,294
Genome Therapeutics Corp. 200(a) 900
Human Genome Sciences, Inc. 200(a) 7,138
IDEC Pharmaceuticals 100(a) 2,356
Kos Pharmaceuticals, Inc. 200(a) 2,025
Ligand Pharmaceuticals 400(a) 5,150
Millenium Pharmaceuticals 100(a) 1,412
SangStat Medical Corp. 200(a) 6,275
26,550
Eating & Drinking Places (0.78%)
Applebee's International, Inc. 200 4,475
Friendly Ice Cream Corp. 200(a) 3,375
Papa John's International, Inc. 400(a) 15,775
Showbiz Pizza Time, Inc. 400(a) 16,125
39,750
Electric Lighting & Wiring
Equipment (0.09%)
Advanced Lighting Technologies, Inc. 200(a) 4,650
Electric Services (1.75%)
Central Louisiana Electric 3,000 89,250
Electrical Goods (1.35%)
8x8, Inc. 800(a) 3,900
Alliance Semiconductor Corp. 600(a) 2,119
Anixter International, Inc. 900(a) 17,156
ARM Holdings PLC ADR 100(a) 6,125
ATMI, Inc. 400(a) 6,000
Exar Corp. 100(a) 2,100
Genesis Microchip, Inc. 100(a) 794
Integrated Device Technology, Inc. 1,200(a) 8,587
Integrated Silicon Solution 500(a) 3,500
SDL, Inc. 600(a) 14,325
SIPEX Corp. 200(a) 4,300
68,906
Electronic Distribution
Equipment (0.90%)
Magnatek, Inc. 2,900(a) 45,675
Elementary & Secondary
Schools (0.32%)
Education Management Corp. 300(a) 9,863
ITT Educational Services 200(a) 6,450
16,313
Family Clothing Stores (1.08%)
Urban Outfitters, Inc. 3,000(a) 54,750
Fire, Marine & Casualty Insurance (2.73%)
Renaissance Holdings Ltd. 3,000 138,938
Funeral Services & Crematories (0.14%)
Equity Corp. International 300(a) 7,200
Furniture & Home Furnishings (0.30%)
Guitar Center, Inc. 500(a) 15,063
Gas Production & Distribution (3.00%)
Atmos Energy Corp. 1,900 57,950
Indiana Energy, Inc. 100 2,987
Public Service Co. of North Carolina 400 8,700
Wicor, Inc. 3,600 83,250
152,887
General Industrial Machinery (0.68%)
IDEX Corp. 1,000 34,500
Health & Allied Services, NEC (0.35%)
Monarch Dental Corp. 300(a) 4,687
Renal Care Group, Inc. 300(a) 13,219
17,906
Home Health Care Services (0.22%)
Pediatrix Medical Group, Inc. 300(a) 11,156
Hotels & Motels (1.08%)
Extended Stay of America 4,300(a) 48,375
LaSalle Hotel Properties 400(a) 6,775
55,150
Household Furniture (1.17%)
Bush Industries 1,800 $ 39,150
Stanley Furniture Co., Inc. 800(a) 20,300
59,450
Individual & Family Services (0.14%)
Sunrise Assisted Living, Inc. 200(a) 6,875
Industrial Inorganic Chemicals (3.99%)
Albemarle Corp. 3,100 68,394
Bush Boake Allen, Inc. 2,000(a) 58,625
General Chemical Group, Inc. 700 19,425
Mineral Technologies, Inc. 500 25,437
TETRA Technologies, Inc. 1,900(a) 31,350
203,231
Industrial Machinery, NEC (0.68%)
Applied Power, Inc. 1,000 34,375
Life Insurance (0.74%)
Annuity & Life Re (Holdings) Ltd. 1,700(a) 37,613
Machinery, Equipment &
Supplies (1.12%)
National Oilwell, Inc. 600(a) 16,088
Willis Lease Financial Corp. 1,800(a) 41,175
57,263
Management & Public Relations (0.09%)
Wackenhut Corrections Corp. 200(a) 4,675
Measuring & Controlling
Devices (0.51%)
Input/Output, Inc. 1,200(a) 21,375
Quickturn Design Systems, Inc. 600(a) 4,388
25,763
Medical Instruments & Supplies (1.39%)
CONMED Corp. 300(a) 6,900
Endocardial Solutions, Inc. 200(a) 2,100
Focal, Inc. 300(a) 3,000
Kensey Nash Corp. 900(a) 8,550
Novoste Corp. 200(a) 4,413
Physio-Control International Corp. 200(a) 5,262
ResMed, Inc. 100(a) 4,556
Symphonix Devices, Inc. 300(a) 3,450
Ventana Medical Systems 1,100(a) 30,800
Vital Signs, Inc. 100 1,825
70,856
Medical Services & Health
Insurance (0.95%)
Alternative Living Services 400(a) 10,800
Sierra Health Services 1,500(a) 37,781
48,581
Men's & Boys' Furnishings (0.54%)
Ashworth, Inc. 2,000(a) 27,750
Metal Forgings & Stampings (0.17%)
ABC Rail Products Corp. 500(a) 8,625
Metals & Minerals, Except
Petroleum (1.75%)
Commercial Metals Co. 2,900 89,175
Miscellaneous Business Services (0.32%)
Boron LePore & Associates 100(a) 3,800
Pinkertons, Inc. 600(a) 12,450
16,250
Miscellaneous Converted Paper
Products (0.22%)
American Pad & Paper 2,500(a) 11,250
Miscellaneous Durable Goods (0.12%)
HA-LO Industries, Inc. 200(a) 6,225
Miscellaneous Equipment Rental &
Leasing (0.67%)
Aaron Rents, Inc. 1,700 34,000
Miscellaneous Fabricated Metal
Products (0.83%)
Amcast Industrial Corp. 1,000 18,625
Shaw Group, Inc. 900(a) 23,400
42,025
Miscellaneous Food & Kindred
Products (0.29%)
American Italian Pasta 400(a) 14,900
Miscellaneous Investing (9.55%)
American General Hospitality Corp. 1,900 40,375
Brandywine Realty Trust 500 11,187
Burnham Pacific Properties, Inc. 2,100 29,794
Camden Property Trust 1,400 41,650
Correctional Properties Trust 100(a) 2,025
Cousins Properties, Inc. 1,200 35,850
ElderTrust 400 6,875
Entertainment Properties Trust 1,200 21,900
Hanover Capital Mortgage 500 5,312
Impac Commercial Holdings 500 7,187
Manufactured Home Communities, Inc. 1,200 28,950
Merry Land & Investment Co., Inc. 1,100 23,169
National Golf Properties, Inc. 900 27,056
Post Properties, Inc. 2,400 92,400
Sunstone Hotel Investors, Inc. 1,000 13,313
Tower Realty Trust, Inc. 900 20,137
Urban Shopping Centers, Inc. 700 22,050
Weeks Corp. 1,800 56,925
486,155
Miscellaneous Non-Durable
Goods (0.43%)
Central Garden & Pet Co. 700(a) 21,787
Miscellaneous Shopping Goods
Stores (0.69%)
Parity City Corp. 1,200(a) 35,250
Mortgage Bankers & Brokers (1.44%)
AMRESCO, Inc. 1,000(a) $ 29,125
First Alliance Corp. 600 4,200
Litchfield Financial Corp. 1,900 39,900
73,225
Motion Picture Production &
Services (0.08%)
Cinar Films, Inc. 200(a) 3,900
Motor Vehicles & Equipment (1.40%)
Modine Manufacturing Co. 800 27,700
Wabash National Corp. 1,700 43,775
71,475
Motor Vehicles, Parts & Supplies (0.17%)
Sauer, Inc. 600 8,438
New & Used Car Dealers (0.52%)
Lithia Motors, Inc. 1,000(a) 14,750
Sonic Automotive, Inc. 700(a) 11,506
26,256
Newspapers (0.07%)
Journal Register Co. 200(a) 3,350
Non-Ferrous Rolling & Drawing (2.33%)
Mueller Industries, Inc. 3,200(a) 118,800
Non-Residential Building
Construction (0.02%)
Hospitality Worldwide Services 100(a) 900
Non-Store Retailers (0.26%)
Delias, Inc. 700(a) 10,938
ONSALE, Inc. 100(a) 2,475
13,413
Nursing & Personal Care
Facilities (0.82%)
Mariner Health Group, Inc. 2,500(a) 41,563
Offices & Clinics of Medical
Doctors (0.14%)
Promedco Management Co. 700(a) 7,175
Oil & Gas Field Services (0.35%)
Patterson Energy, Inc. 1,800(a) 17,606
Operative Builders (2.38%)
D.R. Horton, Inc. 5,800 121,075
Ophthalmic Goods (0.39%)
Sola International, Inc. 600(a) 19,613
Paperboard Containers & Boxes (0.27%)
Ivex Packaging Corp. 600(a) 13,950
Paperboard Mills (2.34%)
Caraustar Industries, Inc. 3,700 106,837
Gaylord Container Corp., Inc. 1,600(a) 12,300
119,137
Periodicals (0.33%)
Ziff-Davis, Inc. 1,200(a) 16,650
Petroleum Refining (0.19%)
Tesoro Petroleum Corp. 600(a) 9,525
Photographic Equipment &
Supplies (0.92%)
Avid Technology 400(a) 13,400
Imax Corp. 900(a) 20,531
Pinnacle Systems, Inc. 400(a) 12,950
46,881
Plastic Materials & Synthetics (0.67%)
Geon Co. 1,300 29,819
Wellman, Inc. 200 4,537
34,356
Plumbing, Heating,
Air-Conditioning (0.14%)
Comfort Systems USA, Inc. 300(a) 7,013
Radio & Television Broadcasting (0.09%)
Emmis Broadcasting Corp. 100(a) 4,781
Real Estate Operators & Lessors (1.37%)
Arden Realty Group, Inc. 2,700 69,863
Research & Testing Services (0.16%)
Applied Analytical Industry 400(a) 5,750
Aurora Biosciences Corp. 100(a) 588
U.S. Bioscience, Inc. 200(a) 1,637
7,975
Retail Stores, NEC (0.23%)
Let's Talk Cellular & Wire 400(a) 5,150
Sunglass Hut International, Inc. 600(a) 6,638
11,788
Sanitary Services (0.74%)
American Disposal Services 800(a) 37,500
Savings Institutions (8.92%)
Bank United Corp. 3,100 148,413
Commercial Federal Corp. 1,300 41,112
Community First Bankshare 2,100 54,994
Firstfed Financial Corp. 1,800(a) 93,600
Flagstar Bancorp., Inc. 2,000 48,750
Interwest Bancorp. 700 30,362
Ocwen Financial Corp. 1,400(a) 37,625
454,856
Sawmills & Planning Mills (1.09%)
Universal Forest Products 3,400 55,675
Search & Navigation Equipment (0.59%)
Orbital Sciences Corp. 800(a) 29,900
Ship & Boat Building &
Repairing (0.10%)
Dril-Quip, Inc. 200(a) 5,250
Shoe Stores (0.38%)
Genesco, Inc. 1,200(a) 19,575
Special Trade Contractors (0.34%)
Service Experts, Inc. 500(a) 17,250
Telephone Communications (1.78%)
Concentric Network Corp. 800(a) 24,250
Exodus Communications, Inc. 100(a) 4,475
Intermedia Communications, Inc. 600(a) 25,163
MetroNet Communications ADR, Class B 500(a) 14,125
NEXTLINK Communications 100(a) 3,787
SkyTel Communications, Inc. 800(a) 18,725
90,525
Trucking & Courier Services,
Except Air (1.99%)
Allied Holdings, Inc. 1,400(a) 29,487
American Freightways Corp. 1,700(a) 17,000
Jevic Transportation, Inc. 200(a) 2,275
Werner Enterprises, Inc. 2,750 52,422
101,184
Variety Stores (0.40%)
ShopKo Stores, Inc. 600(a) 20,400
Water Supply (1.60%)
E'Town Corp. 1,300 48,750
Southern California Water Co. 1,200 32,550
81,300
Total Portfolio Investments (93.82%) 4,776,985
Cash and receivables, net of liabilities (6.18%) 314,906
Total Net Assets (100.00%) $5,091,891
(a) Non-income producing security - No dividend paid during the past twelve
months.
UTILITIES ACCOUNT
Shares
Held Value
Common Stocks (91.81%)
Combination Utility Services (23.57%)
Baltimore Gas & Electric Co. 9,000 $ 279,563
Cinergy Corp. 8,000 280,000
Citizens Utilities 32,210(a) 310,021
L G & E Energy Corp. 5,000 135,312
Montana Power Co. 6,100 211,975
Nipsco Industries, Inc. 9,500 266,000
Pacificorp 12,000 271,500
Scana Corp. 9,000 268,313
Utilicorp United, Inc. 7,000 263,812
Washington Water Power Co. 4,000 89,750
Wisconsin Energy Corp. 6,000 182,250
2,558,496
Electric Services (36.74%)
Allegheny Energy 9,000 271,125
Carolina Power & Light Co. 6,000 260,250
Dominion Resources, Inc. 7,000 285,250
Duke Energy Corp. 1,800 106,650
Edison International 10,000 295,625
Enron Corp. 5,000 270,312
FPL Group, Inc. 4,800 302,400
Electric Services (36.74%) (Continued)
GPU, Inc. 7,000 264,688
Houston Industries, Inc. 10,000 308,750
Ipalco Enterprises, Inc. 4,900 217,744
Mid American Energy Holdings Co. 13,000 281,125
Pinnacle West Capital Corp. 7,000 315,000
Southern Co. 10,000 276,875
Teco Energy, Inc. 9,000 241,312
Texas Utilities Holdings 7,000 291,375
3,988,481
Gas Production & Distribution (2.79%)
AGL Resources, Inc. 5,000 99,375
New Jersey Resources Corp. 3,000 107,063
Peoples Energy Corp. 2,500 96,562
303,000
Telephone Communications (28.71%)
Ameritech Corp. 8,000 359,000
AT&T Corp. 5,900 337,038
Bell Atlantic Corp. 8,000 365,000
BellSouth Corp. 6,000 402,750
GTE Corp. 6,700 372,688
MCI Communications Corp. 6,000 348,750
RCN Corp. 10,000(a) 193,750
Sprint Corp. 5,800 408,900
U.S. West, Inc. 7,000 329,000
3,116,876
Total Common Stocks 9,966,853
Principal
Amount Value
Commercial Paper (7.49%)
Business Credit Institutions (2.99%)
General Electric Co.;
5.8%; 7/6/98 $ 324,633 $ 324,738
Personal Credit Institutions (4.50%)
Investment in Joint Trade Account;
Associates Corp.; 6.25%; 7/1/98 488,069 488,069
Total Commercial Paper 812,807
Total Portfolio Investments (99.30%) 10,779,660
Cash and receivables, net of liabilities (0.70%) 76,335
Total Net Assets (100.00%) $10,855,995
(a) Non-income producing security - No dividend paid during the past twelve
months.
FINANCIAL HIGHLIGHTS
(unaudited)
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH ACCOUNT(a) 1998* 1997 1996 1995 1994(b)
- ------------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $16.30 $14.52 $12.94 $10.11 $9.92
Income from Investment Operations:
Net Investment Income............................... .02 .04 .11 .13 .05
Net Realized and Unrealized Gain (Loss) on Investments 2.48 4.26 3.38 4.31 .24
Total from Investment Operations 2.50 4.30 3.49 4.44 .29
Less Dividends and Distributions:
Dividends from Net Investment Income................ - (.04) (.11) (.13) (.05)
Distributions from Capital Gains.................... (.29) (2.48) (1.80) (1.48) (.05)
Total Dividends and Distributions (.29) (2.52) (1.91) (1.61) (.10)
Net Asset Value, End of Period......................... $18.51 $16.30 $14.52 $12.94 $10.11
Total Return........................................... 15.50%(c) 30.86% 28.05% 44.19% 2.59%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $203,291 $149,182 $90,106 $33,643 $13,770
Ratio of Expenses to Average Net Assets............. .79%(d) .82% .85% .90% 1.03%(d)
Ratio of Net Investment Income to Average Net Assets .27%(d) .29% 1.05% 1.34% 1.06%(d)
Portfolio Turnover Rate............................. 159.7%(d) 172.6% 166.9% 172.9% 105.6%(d)
ASSET ALLOCATION ACCOUNT(a) 1998* 1997 1996 1995 1994(b)
Net Asset Value, Beginning of Period................... $11.94 $11.48 $11.11 $9.79 $9.98
Income from Investment Operations:
Net Investment Income............................... .16 .30 .36 .40 .23
Net Realized and Unrealized Gain (Loss) on Investments .68 1.72 1.06 1.62 (.18)
Total from Investment Operations .84 2.02 1.42 2.02 .05
Less Dividends and Distributions:
Dividends from Net Investment Income................ (.01) (.30) (.36) (.40) (.23)
Distributions from Capital Gains.................... (.14) (1.26) (.69) (.30) -
Excess Distributions from Capital Gains(e).......... - - - - (.01)
Total Dividends and Distributions (.15) (1.56) (1.05) (.70) (.24)
Net Asset Value, End of Period......................... $12.63 $11.94 $11.48 $11.11 $9.79
Total Return........................................... 7.09%(c) 18.19% 12.92% 20.66% .52%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $85,278 $76,804 $61,631 $41,074 $28,041
Ratio of Expenses to Average Net Assets............. .88%(d) .89% .87% .89% .95%(d)
Ratio of Net Investment Income to Average Net Assets 2.61%(d) 2.55% 3.45% 4.07% 4.27%(d)
Portfolio Turnover Rate............................. 190.8%(d) 131.6% 108.2% 47.1% 60.7%(d)
* Six Months Ended June 30, 1998.
See accompanying notes.
</TABLE>
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
<TABLE>
<CAPTION>
BALANCED ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- ---------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $15.51 $14.44 $13.97 $11.95 $12.77 $12.58
Income from Investment Operations:
Net Investment Income............................... .24 .46 .40 .45 .37 .42
Net Realized and Unrealized Gain (Loss) on Investments .98 2.11 1.41 2.44 (.64) .95
Total from Investment Operations 1.22 2.57 1.81 2.89 (.27) 1.37
Less Dividends and Distributions:
Dividends from Net Investment Income................ (.01) (.45) (.40) (.45) (.37) (.42)
Distributions from Capital Gains.................... (.20) (1.05) (.94) (.42) (.18) (.76)
Total Dividends and Distributions (.21) (1.50) (1.34) (.87) (.55) (1.18)
Net Asset Value, End of Period......................... $16.52 $15.51 $14.44 $13.97 $11.95 $12.77
Total Return........................................... 7.95%(c) 17.93% 13.13% 24.58% (2.09)% 11.06%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $170,784 $133,827 $93,158 $45,403 $25,043 $21,399
Ratio of Expenses to Average Net Assets............. .59%(d) .61% .63% .66% .69% .69%
Ratio of Net Investment Income to Average Net Assets 3.33%(d) 3.26% 3.45% 4.12% 3.42% 3.30%
Portfolio Turnover Rate............................. 16.5%(d) 69.7% 22.6% 25.7% 31.5% 15.8%
</TABLE>
<TABLE>
BOND ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- ------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $11.78 $11.33 $11.73 $10.12 $11.16 $10.77
Income from Investment Operations:
Net Investment Income............................... .37 .76 .68 .62 .72 .88
Net Realized and Unrealized Gain (Loss)on Investments .16 .44 (.40) 1.62
(1.04).38
Total from Investment Operations .53 1.20 .28 2.24 (.32) 1.26
Less Dividends from Net Investment Income.............. (.01) (.75) (.68) (.63) (.72) (.87)
Net Asset Value, End of Period......................... $12.30 $11.78 $11.33 $11.73 $10.12 $11.16
Total Return........................................... 4.48%(c) 10.60% 2.36% 22.17% (2.90)% 11.67%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $94,343 $81,921 $63,387 $35,878 $17,108 $14,387
Ratio of Expenses to Average Net Assets............. .51%(d) .52% .53% .56% .58% .59%
Ratio of Net Investment Income to Average Net Assets 6.58%(d) 6.85% 7.00% 7.28% 7.86% 7.57%
Portfolio Turnover Rate............................. 14.5%(d) 7.3% 1.7% 5.9% 18.2% 14.0%
</TABLE>
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
<TABLE>
<CAPTION>
CAPITAL VALUE ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- --------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $34.61 $29.84 $27.80 $23.44 $24.61 $25.19
Income from Investment Operations:
Net Investment Income............................... .35 .68 .57 .60 .62 .61
Net Realized and Unrealized Gain (Loss)on Investments 3.68 7.52 5.82 6.69 (.49) 1.32
Total from Investment Operations 4.03 8.20 6.39 7.29 .13 1.93
Less Dividends and Distributions:
Dividends from Net Investment Income................ (.01) (.67) (.58) (.60) (.61) (.60)
Distributions from Capital Gains.................... (.11) (2.76) (3.77) (2.33) (.69) (1.91)
Total Dividends and Distributions (.12) (3.43) (4.35) (2.93) (1.30) (2.51)
Net Asset Value, End of Period......................... $38.52 $34.61 $29.84 $27.80 $23.44 $24.61
Total Return........................................... 11.67%(c) 28.53% 23.50% 31.91% .49% 7.79%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $354,116 $285,231 $205,019 $135,640 $120,572 $128,515
Ratio of Expenses to Average Net Assets............. .45%(d) .47% .49% .51% .51% .51%
Ratio of Net Investment Income to Average Net Assets 2.03%(d) 2.13% 2.06% 2.25% 2.36% 2.49%
Portfolio Turnover Rate............................. 17.3%(d) 23.4% 48.5% 49.2% 44.5% 25.8%
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- ----------------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $10.72 $10.31 $10.55 $9.38 $10.61 $10.28
Income from Investment Operations:
Net Investment Income............................... .32 .66 .59 .60 .76 .71
Net Realized and Unrealized Gain (Loss)on Investments .10 .41 (.24) 1.18 (1.24) .33
Total from Investment Operations .42 1.07 .35 1.78 (.48) 1.04
Less Dividends from Net Investment Income.............. (.01) (.66) (.59) (.61) (.75) (.71)
Net Asset Value, End of Period......................... $11.13 $10.72 $10.31 $10.55 $9.38 $10.61
Total Return........................................... 3.88%(c) 10.39% 3.35% 19.07% (4.53)% 10.07%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $114,535 $94,322 $85,100 $50,079 $36,121 $36,659
Ratio of Expenses to Average Net Assets............. .51%(d) .52% .52% .55% .56% .55%
Ratio of Net Investment Income to Average Net Assets 6.22%(d) 6.37% 6.46% 6.73% 7.05% 7.07%
Portfolio Turnover Rate............................. 5.1%(d) 9.0% 8.4% 9.8% 23.2% 20.4%
* Six Months Ended June 30, 1998.
See accompanying notes.
</TABLE>
<TABLE>
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
GROWTH ACCOUNT(a) 1998* 1997 1996 1995 1994(f)
- -------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $17.21 $13.79 $12.43 $10.10 $9.60
Income from Investment Operations:
Net Investment Income............................... .12 .18 .16 .17 .07
Net Realized and Unrealized Gain (Loss) on Investments 2.83 3.53 1.39 2.42 .51
Total from Investment Operations 2.95 3.71 1.55 2.59 .58
Less Dividends and Distributions:
Dividends from Net Investment Income................ - (.18) (.16) (.17) (.08)
Distributions from Capital Gains.................... - (.10) (.03) (.09) -
Excess Distributions from Capital Gains(e).......... - (.01) - - -
Total Dividends and Distributions - (.29) (.19) (.26) (.08)
Net Asset Value, End of Period......................... $20.16 $17.21 $13.79 $12.43 $10.10
Total Return........................................... 17.15%(c) 26.96% 12.51% 25.62% 5.42%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $223.387 $168,160 $99,612 $42,708 $13,086
Ratio of Expenses to Average Net Assets............. .48%(d) .50% .52% .58% .75%(d)
Ratio of Net Investment Income to Average Net Assets 1.38%(d) 1.34% 1.61% 2.08% 2.39%(d)
Portfolio Turnover Rate............................. 6.8%(d) 15.4% 2.0% 6.9% 0.9%(d)
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- ------------------ ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $8.90 $8.72 $8.39 $7.91 $8.62 $8.38
Income from Investment Operations:
Net Investment Income............................... .38 .76 .80 .76 .77 .80
Net Realized and Unrealized Gain (Loss) on Investments (.08) .18 .30 .51 (.72) .23
Total from Investment Operations .30 .94 1.10 1.27 .05 1.03
Less Dividends and Distributions:
Dividends from Net Investment Income................ (.01) (.76) (.77) (.77) (.76) (.79)
Excess Distributions from Net Investment Income(e).. - - - (.02) - -
Total Dividends and Distributions (.01) (.76) (.77) (.79) (.76) (.79)
Net Asset Value, End of Period......................... $9.19 $8.90 $8.72 $8.39 $7.91 $8.62
Total Return........................................... 3.35%(c) 10.75% 13.13% 16.08% .62% 12.31%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $15,146 $15,837 $13,740 $11,830 $9,697 $9,576
Ratio of Expenses to Average Net Assets............. .67%(d) .68% .70% .73% .73% .74%
Ratio of Net Investment Income to Average Net Assets 8.47%(d) 8.50% 9.21% 9.09% 9.02% 8.80%
Portfolio Turnover Rate............................. 90.5%(d) 32.0% 32.0% 35.1% 30.6% 28.7%
</TABLE>
<TABLE>
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
INTERNATIONAL ACCOUNT(a) 1998* 1997 1996 1995 1994(f)
- --------------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $13.90 $13.02 $10.72 $9.56 $9.94
Income from Investment Operations:
Net Investment Income............................... .19 .23 .22 .19 .03
Net Realized and Unrealized Gain (Loss) on Investments 1.72 1.35 2.46 1.16 (.33)
Total from Investment Operations 1.91 1.58 2.68 1.35 (.30)
Less Dividends and Distributions:
Dividends from Net Investment Income................ - (.23) (.22) (.18) (.05)
Excess Distributions from Net Investment Income(e).. - - - - (.02)
Distributions from Capital Gains.................... (.03) (.47) (.16) (.01) (.01)
Total Dividends and Distributions (.03) (.70) (.38) (.19) (.08)
Net Asset Value, End of Period......................... $15.78 $13.90 $13.02 $10.72 $9.56
Total Return........................................... 13.79%(c) 12.24% 25.09% 14.17% (3.37)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $151,815 $125,289 $71,682 $30,566 $13,746
Ratio of Expenses to Average Net Assets............. .78%(d) .87% .90% .95% 1.24%(d)
Ratio of Net Investment Income to Average Net Assets 2.45%(d) 1.92% 2.28% 2.26% 1.31%(d)
Portfolio Turnover Rate............................. 29.8%(d) 22.7% 12.5% 15.6% 14.4%(d)
</TABLE>
INTERNATIONAL SMALLCAP ACCOUNT 1998(g)
- ------------------------------ ----
Net Asset Value, Beginning of Period................... $9.97
Income from Investment Operations:
Net Investment Income............................... .01
Net Realized and Unrealized Gain (Loss)on Investments (.14)
Total from Investment Operations (.13)
Net Asset Value, End of Period......................... $9.84
Total Return........................................... (2.28)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $10,991
Ratio of Expenses to Average Net Assets............. 1.52%(d)
Ratio of Net Investment Income to Average Net Assets .81%(d)
Portfolio Turnover Rate............................. 36.0%(d)
* Six Months Ended June 30, 1998.
See accompanying notes.
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
MICROCAP ACCOUNT 1998(g)
- ---------------- ----
Net Asset Value, Beginning of Period................... $10.04
Income from Investment Operations:
Net Investment Income............................... .03
Net Realized and Unrealized Gain (Loss) on Investments (.42)
Total from Investment Operations (.39)
Net Asset Value, End of Period......................... $9.65
Total Return........................................... (4.08)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $5,398
Ratio of Expenses to Average Net Assets............. 1.14%(d)
Ratio of Net Investment Income to Average Net Assets 1.98%(d)
Portfolio Turnover Rate............................. 20.1%(d)
<TABLE>
<CAPTION>
MIDCAP ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- -------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $35.47 $29.74 $25.33 $19.97 $20.79 $18.91
Income from Investment Operations:
Net Investment Income............................... .11 .24 .22 .22 .14 .17
Net Realized and Unrealized Gain (Loss)on Investments 3.36 6.48 5.07 5.57 .033 .47
Total from Investment Operations 3.47 6.72 5.29 5.79 .17 3.64
Less Dividends and Distributions:
Dividends from Net Investment Income................ - (.23) (.22) (.22) (.14) (.17)
Distributions from Capital Gains.................... (.01) (.76) (.66) (.21) (.85) (1.59)
Total Dividends and Distributions (.01) (.99) (.88) (.43) (.99) (1.76)
Net Asset Value, End of Period......................... $38.93 $35.47 $29.74 $25.33 $19.97 $20.79
Total Return........................................... 9.78%(c) 22.75% 21.11% 29.01% .78% 19.28%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $268,867 $224,630 $137,161 $58,520 $23,912 $12,188
Ratio of Expenses to Average Net Assets............. .61%(d) .64% .66% .70% .74% .78%
Ratio of Net Investment Income to Average Net Assets .59%(d) .79% 1.07% 1.23% 1.15% .89%
Portfolio Turnover Rate............................. 17.4%(d) 7.8% 8.8% 13.1% 12.0% 22.4%
</TABLE>
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
MIDCAP GROWTH ACCOUNT 1998(g)
- --------------------- ----
Net Asset Value, Beginning of Period................... $9.94
Income from Investment Operations:
Net Investment Income............................... -
Net Realized and Unrealized Gain (Loss) on Investments (.44)
Total from Investment Operations (.44)
Net Asset Value, End of Period......................... $9.50
Total Return........................................... (4.91)(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $5,311
Ratio of Expenses to Average Net Assets............. 1.21%(d)
Ratio of Net Investment Income to Average Net Assets (.19)%(d)
Portfolio Turnover Rate............................. 50.8%(d)
<TABLE>
<CAPTION>
MONEY MARKET ACCOUNT(a) 1998* 1997 1996 1995 1994 1993
- -------------------- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Income from Investment Operations:
Net Investment Income............................... .051 .051 .049 .054 .037 .027
Net Realized and Unrealized Gain (Loss)on Investments - - - - - -
Total from Investment Operations .051 .051 .049 .054 .037 .027
Less Dividends from Net Investment Income.............. (.051) (.051) (.049) (.054) (.037) (.027)
Net Asset Value, End of Period......................... $1.000 $1.000 $1.000 $1.000 $1.000 $1.000
Total Return........................................... 2.53%(c) 5.04% 5.07% 5.59% 3.76% 2.69%
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $57,079 $47,315 $46,244 $32,670 $29,372 $22,753
Ratio of Expenses to Average Net Assets............. .53%(d) .55% .56% .58% .60% .60%
Ratio of Net Investment Income to Average Net Assets 5.13%(d) 5.12% 5.00% 5.32% 3.81% 2.64%
</TABLE>
REAL ESTATE ACCOUNT 1998(g)
- ------------------- ----
Net Asset Value, Beginning of Period................... $10.01
Income from Investment Operations:
Net Investment Income............................... .08
Net Realized and Unrealized Gain (Loss)on Investments .02
Total from Investment Operations .10
Net Asset Value, End of Period......................... $10.11
Total Return........................................... (.90)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $10,700
Ratio of Expenses to Average Net Assets............. .95%(d)
Ratio of Net Investment Income to Average Net Assets 4.99%(d)
Portfolio Turnover Rate............................. 0.0%(d)
* Six Months Ended June 30, 1998.
See accompanying notes.
Selected data for a share of Capital Stock outstanding throughout
each year ended December 31, (except as noted):
SMALLCAP ACCOUNT 1998(g)
- ---------------- ----
Net Asset Value, Beginning of Period................... $10.27
Income from Investment Operations:
Net Investment Income............................... -
Net Realized and Unrealized Gain (Loss) on Investments (1.31)
Total from Investment Operations (1.31)
Net Asset Value, End of Period......................... $8.96
Total Return........................................... (13.26)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $9,743
Ratio of Expenses to Average Net Assets............. .91%(d)
Ratio of Net Investment Income to Average Net Assets (.06)%(d)
Portfolio Turnover Rate............................. 28.3%(d)
SMALLCAP GROWTH ACCOUNT 1998(g)
- ----------------------- ----
Net Asset Value, Beginning of Period................... $9.84
Income from Investment Operations:
Net Investment Income (Operating Loss).............. (.01)
Net Realized and Unrealized Gain (Loss) on Investments (.06)
Total from Investment Operations (.07)
Net Asset Value, End of Period......................... $9.77
Total Return........................................... (.41)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $5,526
Ratio of Expenses to Average Net Assets............. 1.14%(d)
Ratio of Net Investment Income to Average Net Assets (.81)%(d)
Portfolio Turnover Rate............................. 155.3%(d)
SMALLCAP VALUE ACCOUNT 1998(g)
- ---------------------- ----
Net Asset Value, Beginning of Period................... $9.84
Income from Investment Operations:
Net Investment Income............................... .01
Net Realized and Unrealized Gain (Loss) on Investments (.55)
Total from Investment Operations (.54)
Net Asset Value, End of Period......................... $9.30
Total Return........................................... (5.68)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $5,092
Ratio of Expenses to Average Net Assets............. 1.61%(d)
Ratio of Net Investment Income to Average Net Assets .48%(d)
Portfolio Turnover Rate............................. 38.3%(d)
UTILITIES ACCOUNT 1998(g)
- ----------------- ----
Net Asset Value, Beginning of Period................... $9.61
Income from Investment Operations:
Net Investment Income............................... .04
Net Realized and Unrealized Gain (Loss) on Investments .02
Total from Investment Operations .06
Net Asset Value, End of Period......................... $9.67
Total Return........................................... (.42)%(c)
Ratio/Supplemental Data:
Net Assets, End of Period (in thousands)............ $10,856
Ratio of Expenses to Average Net Assets............. .67%(d)
Ratio of Net Investment Income to Average Net Assets 2.89%(d)
Portfolio Turnover Rate............................. 12.4%(d)
Notes to Financial Highlights
(a) Effective January 1, 1998 the following mutual funds were reorganized into
the Principal Variable Contracts Fund, Inc. as follows:
Former Fund Name Current Fund Name
Principal Aggressive Growth Fund, Inc. Aggressive Growth Account
Principal Asset Allocation Fund, Inc. Asset Allocation Account
Principal Balanced Fund, Inc. Balanced Account
Principal Bond Fund, Inc. Bond Account
Principal Capital Accumulation Fund, Inc. Capital Value Account
Principal Government Securities Fund, Inc. Government Securities Account
Principal Growth Fund, Inc. Growth Account
Principal High Yield Fund, Inc. High Yield Account
Principal World Fund, Inc. International Account
Principal Emerging Growth Fund, Inc. MidCap Account
Principal Money Market Fund, Inc. Money Market Account
(b) Period from June 1, 1994, date shares first offered to public, through
December 31, 1994. Net investment income, aggregating $.01 per share for
the Aggressive Growth Account and $.01 per share for the Asset Allocation
Account for the period from the initial purchase of shares on May 23, 1994
through May 31, 1994, was recognized, none of which was distributed to the
sole stockholder, Principal Mutual Life Insurance Company, during the
period. Additionally, the Aggressive Growth Account and the Asset
Allocation Account incurred unrealized losses on investments of $.09 and
$.03 per share, respectively, during the initial interim period. This
represented activities of each account prior to the initial public offering
of account shares.
(c) Total return amounts have not been annualized.
(d) Computed on an annualized basis.
(e) Dividends and distributions which exceed net investment income and net
realized gains for financial reporting purposes but not for tax purposes
are reported as dividends in excess of net investment income or
distributions in excess of net realized gains on investments. To the extent
distributions exceed current and accumulated earnings and profits for
federal income tax purposes, they are reported as distributions of
paid-in-capital.
(f) Period from May 1, 1994, date shares first offered to the public, through
December 31, 1994. Net investment income, aggregating $.01 per share for
the Growth Account and $.04 per share for the International Account for the
period from the initial purchase of shares on March 23, 1994 through April
30, 1994, was recognized, none of which was distributed to the sole
stockholder, Principal Mutual Life Insurance Company, during the period.
Additionally, the Growth Account and the International Account incurred
unrealized losses on investments of $.41 and $.10 per share, respectively,
during the initial interim period. This represented activities of each
account prior to the initial public offering of account shares.
(g) Period from May 1, 1998, date shares first offered to the public, through
June 30, 1998. Per share net investment income and realized and unrealized
gains (losses) for the period from the initial purchase of shares through
April 30, 1998, were recognized as follows, none of which was distributed
to the sole shareholder Principal Mutual Life Insurance Company, during the
period. This represents activities of each account prior to the initial
public offering.
<TABLE>
<CAPTION>
Date Net Per Share Realized
Operations Investment and Unrealized
Account Commenced Income Gains (Losses)
<S> <C> <C> <C>
International SmallCap Account April 16, 1998 $.02 $(.05)
MidCap Growth Account April 23, 1998 .01 (.07)
MicroCap Account April 9, 1998 .01 .03
SmallCap Account April 9, 1998 -- .27
SmallCap Growth Account April 2, 1998 -- (.16)
SmallCap Value Account April 16, 1998 .01 (.17)
Real Estate Account April 23, 1998 .01 --
Utilities Account April 2, 1998 .04 (.43)
</TABLE>
