As filed with the Securities and Exchange File No. 2-51739
Commission on April 27, 1999 File No. 811-2514
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
- --------------------------------------------------------------------------------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 54
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 39
AETNA VARIABLE FUND
-------------------
(d/b/a Aetna Growth and Income VP)
----------------------------------
151 Farmington Avenue, Hartford, Connecticut 06156
--------------------------------------------------------
(860) 275-2032
Amy R. Doberman, Counsel
10 State House Square SH11, Hartford, Connecticut 06103-3602
(Name and Address of Agent for Service)
- --------------------------------------------------------------------------------
It is proposed that this filing will become effective:
X on May 3, 1999 pursuant to paragraph (b) of Rule 485
---
<PAGE>
Aetna Variable Fund d/b/a
AETNA GROWTH AND INCOME VP
Prospectus
May 3, 1999
The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is truthful or complete.
Anyone who represents to the contrary has committed a criminal offense.
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
THE FUND'S INVESTMENTS ..................................................... 3
Investment Objective, Principal Investment Strategies and Risks,
Investment Performance .................................................... 3
FUND EXPENSES .............................................................. 5
OTHER CONSIDERATIONS ....................................................... 6
MANAGEMENT OF THE FUND ..................................................... 7
INVESTMENTS IN AND REDEMPTIONS FROM THE FUND ............................... 7
TAX INFORMATION ............................................................ 8
FINANCIAL HIGHLIGHTS ....................................................... 9
ADDITIONAL INFORMATION ..................................................... 10
</TABLE>
2 Aetna Growth and Income VP
<PAGE>
THE FUND'S INVESTMENTS
Investment Objective, Principal Investment Strategies and Risks, Investment
Performance
Investment Objective. Aetna Growth and Income VP (Fund) seeks to maximize total
return through investments in a diversified portfolio of common stocks and
securities convertible into common stock. It is anticipated that capital
appreciation and investment income will both be major factors in achieving
total return.
Principal Investment Strategies. Under normal market conditions, the Fund
invests at least 65% of its total assets in common stocks that the Fund's
investment adviser, Aeltus Investment Management, Inc. (Aeltus), believes have
significant potential for capital or income growth.
In managing the Fund, Aeltus:
o Emphasizes stocks of larger companies.
o Also invests the Fund's assets across other asset classes (including
stocks of small and medium-sized companies, international stocks, real
estate securities and fixed income securities).
o Uses internally developed quantitative computer models to determine the
relative attractiveness of each asset class and to evaluate company
financial characteristics (for example, price-to-earnings ratios,
growth rates and earnings estimates) to select securities within each
class. In analyzing these characteristics, Aeltus attempts to identify
positive earnings momentum and positive valuation characteristics in
selecting securities whose full value is not reflected in their price.
Principal Risks. The principal risks of investing in the Fund are those
generally attributable to stock investing. These risks include sudden and
unpredictable drops in the value of the market as a whole and periods of
lackluster or negative performance. The success of the Fund's strategy depends
significantly on Aeltus' skill in allocating assets and in choosing investments
within each asset class.
Growth-oriented stocks typically sell at relatively high valuations as compared
to other types of stocks. If a growth stock does not exhibit the level of
growth expected, its price may drop sharply. Historically, growth-oriented
stocks have been more volatile than value-oriented stocks.
Although Aeltus emphasizes large cap stocks, the Fund is more diversified
across asset classes than most other funds with a similar investment objective.
Therefore, it may not perform as well as those funds when large cap stocks are
in favor.
Fund shares will rise and fall in value and you could lose money by investing
in the Fund. There is no guaranty the Fund will achieve its investment
objective. Shares of the Fund are not bank deposits and are not guaranteed,
endorsed or insured by any financial institution, the FDIC or any other
government agency.
Shares of the Fund are offered to insurance company separate accounts that fund
both annuity and life insurance contracts and to certain tax-qualified
retirement plans. Due to differences in tax treatment or other considerations,
the interests of various contract owners participating in the Fund and the
interests of qualified plans investing in the Fund might at some time be in
conflict. The Fund's Board of Trustees (Board) will monitor the Fund for any
material conflicts and determine what action, if any, should be taken to
resolve these conflicts.
Aetna Growth and Income VP 3
<PAGE>
Investment Performance
Year-by-Year Total Return
Years Ended December 31,
[bar chart]
<TABLE>
<S> <C>
1989 29.06%
1990 3.31%
1991 26.40%
1992 6.70%
1993 6.74%
1994 -0.96%
1995 32.25%
1996 24.45%
1997 29.89%
1998 14.49%
</TABLE>
[end bar chart]
[arrow up] Best Quarter:
fourth quarter 1998, up 20.08%
[arrow down] Worst Quarter:
third quarter 1998, down 15.43%
This performance bar chart shows changes in the Fund's performance from year to
year. The fluctuation in returns illustrates the Fund's performance volatility.
The chart is accompanied by the Fund's best and worst quarterly returns
throughout the years noted in the bar chart.
<TABLE>
<CAPTION>
As of December 31, 1998
Average Annual Total Return 1 Year 5 Years 10 Years
<S> <C> <C> <C>
Aetna Growth & Income VP 14.49% 19.37% 16.62%
S&P 500* 28.57% 24.06% 19.21%
</TABLE>
This table shows the Fund's average annual total return. The table also
compares the Fund's performance to the performance of a broad-based securities
market index. The Fund's past performance is not necessarily an indication of
how it will perform in the future.
The performance table and bar chart provide an indication of the historical
risk of an investment in the Fund. The performance numbers do not reflect the
deduction of any insurance fees or charges. If such charges were deducted,
performance would be lower.
* The Standard and Poor's 500 Index is a value-weighted, unmanaged index of
500 widely held stocks that assumes reinvestment of all dividends, and is
considered to be representative of the stock market in general.
4 Aetna Growth and Income VP
<PAGE>
FUND EXPENSES
The following table describes Fund expenses. Shareholder Fees are paid directly
by shareholders. Annual Fund Operating Expenses are deducted from Fund assets
every year, and are thus paid indirectly by all Fund shareholders. Shareholders
who acquire Fund shares through an insurance company separate account should
refer to the applicable contract prospectus, prospectus summary or disclosure
statement for a description of insurance charges that may apply.
<TABLE>
<CAPTION>
Shareholder Fees
(fees paid directly from your investment)
<S> <C>
Maximum Sales Charge (Load) on Purchases None
Maximum Deferred Sales Charge (Load) None
</TABLE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses(1)
(expenses that are deducted from Fund assets)
<S> <C>
Management Fee 0.50%
Other Expenses 0.08%
Total Operating Expenses 0.58%
</TABLE>
(1) Prior to May 1, 1998, the investment adviser provided administrative
services to the Fund and assumed the Fund's ordinary recurring direct
expenses under an administrative services agreement. Effective May 1, 1998,
under the current Administrative Services Agreement, Aeltus provides
administrative services to the Fund but will not assume the Fund's
ordinary recurring direct costs. The "Other Expenses" shown are not based
on actual figures for the year ended December 31, 1998, but reflect the fee
payable under the current Administrative Services Agreement and estimate
the Fund's ordinary recurring direct costs.
Example
The following example is designed to help you compare the costs of investing in
the Fund with the costs of investing in other mutual funds. Using the annual
fund operating expenses percentages above, you would pay the following expenses
on a $10,000 investment, assuming a 5% annual return and redemption at the end
of each of the periods shown:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C>
$59 $186 $324 $726
</TABLE>
This example should not be considered an indication of prior or future
expenses. Actual expenses for the current year may be greater or less than
those shown.
Aetna Growth and Income VP 5
<PAGE>
OTHER CONSIDERATIONS
In addition to the principal investments and strategies described above, the
Fund may also invest in other securities, engage in other practices, and be
subject to additional risks, as discussed below and in the Statement of
Additional Information (SAI).
Futures Contracts and Options. The Fund may enter into futures contracts and
use options. The Fund primarily uses futures contracts and options to hedge
against price fluctuations or increase exposure to a particular asset class.
o Futures contracts are agreements that obligate the buyer to buy and the
seller to sell a specific quantity of securities at a specific price on
a specific date.
o Options are agreements that give the holder the right, but not the
obligation, to purchase or sell a certain amount of securities or
futures contracts during a specified period or on a specified date.
The main risk with futures contracts and options is that they can amplify a
gain or loss, potentially earning or losing substantially more money than the
actual cost of the instrument. In addition, while a hedging strategy can guard
against potential risks for the Fund as a whole, it adds to the Fund's expenses
and may reduce or eliminate potential gains. There is also a risk that a
futures contract or option intended as a hedge may not perform as expected.
Defensive Investing. In response to unfavorable market conditions, the Fund may
make temporary investments that are not consistent with its principal
investment objective and policies. In that event, the Fund may not achieve its
investment objective.
Year 2000. The date-related computer issue known as the "Year 2000 problem"
could have an adverse impact on the quality of services provided to the Fund
and its shareholders. However, the Fund understands that its key service
providers, including but not limited to Aeltus and its affiliates, the transfer
agent, the custodian, and the broker-dealers through which its trades are
executed, are taking steps to address the issue. The costs of these efforts
will not affect the Fund. The Year 2000 problem also may adversely affect the
issuers in which the Fund invests. For example, issuers may incur substantial
costs to address the problem. They may also suffer losses caused by corporate
and governmental data processing errors. The Fund and Aeltus will continue to
monitor developments relating to this issue.
Portfolio Turnover. Portfolio turnover refers to the frequency of portfolio
transactions and the percentage of portfolio assets being bought and sold
during the year. For the fiscal year ended December 31, 1998, the Fund had a
portfolio turnover rate in excess of 145%. A high portfolio turnover rate
increases the Fund's transaction costs.
6 Aetna Growth and Income VP
<PAGE>
MANAGEMENT OF THE FUND
Aeltus Investment Management, Inc., 10 State House Square, Hartford,
Connecticut 06103-3602, serves as investment adviser to the Fund. Aeltus is
responsible for managing the assets of the Fund in accordance with the Fund's
investment objective and policies, subject to oversight by the Board. Aeltus
has acted as adviser or subadviser to mutual funds since 1994 and has managed
institutional accounts since 1972.
Advisory Fees
For its most recent fiscal year, the Fund paid Aeltus aggregate advisory fees
equal to an annual rate of 0.50% of the average daily net assets of the Fund.
Portfolio Management
Kevin M. Means, Managing Director, Aeltus, has been managing the Fund since
July 1994. Mr. Means joined Aetna in July 1994 after serving as Chief
Investment Officer at Invesco Management and Research since 1993. He also
served from 1987 to 1993 as the Director of Quantitative Research and as an
Equity Portfolio Manager at Invesco Capital Management. Mr. Means heads a team
of portfolio managers each of whom specializes in a particular asset class used
in the management of the Fund.
INVESTMENTS IN AND REDEMPTIONS FROM THE FUND
Investors purchasing shares in connection with an insurance company contract or
policy should refer to the documents pertaining to the contract or policy for
information on how to direct investments in or redemptions from (including
making exchanges into or out of) the Fund, and any fees that may apply.
Orders for the purchase or redemption of Fund shares that are received before
the close of regular trading on the New York Stock Exchange (normally 4:00 p.m.
eastern time) are effected at the net asset value (NAV) per share determined
that day, as described below. The insurance company has been designated an
agent of the Fund for receipt of purchase and redemption orders. Therefore,
receipt of an order by the insurance company constitutes receipt by the Fund,
provided that the Fund receives notice of the order by 9:30 a.m. eastern time
the next day on which the New York Stock Exchange is open for trading.
Net Asset Value. The NAV of the Fund is determined as of the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. eastern time).
In calculating the NAV, securities are valued primarily by independent pricing
services using market quotations. Short-term debt securities maturing in less
than 60 days are valued using amortized cost. Securities for which market
quotations are not readily available are valued at their fair value, subject to
procedures adopted by the Board.
Business Hours. The Fund is open on the same days as the New York Stock
Exchange (generally, Monday through Friday). Representatives are available from
8:00 a.m. to 8:00 p.m. eastern time on those days.
The Fund may refuse to accept any purchase order, especially if as a result of
such order, in Aeltus' judgment, it would be too difficult to invest
effectively in accordance with the Fund's investment objective.
The Fund reserves the right to suspend the offering of shares, or to reject any
specific purchase order. The Fund may suspend redemptions or postpone payments
when the New York Stock Exchange is closed or when trading is restricted for
any reason or under emergency circumstances as determined by the Securities and
Exchange Commission.
Aetna Growth and Income VP 7
<PAGE>
The Fund is not designed for professional market timing organizations or other
entities using programmed or frequent exchanges. The Fund reserves the right to
reject any specific purchase or exchange request, including a request made by a
market timer.
TAX INFORMATION
The Fund intends to qualify as a regulated investment company by satisfying the
requirements under Subchapter M of the Internal Revenue Code of 1986, as
amended (Code), including requirements with respect to diversification of
assets, distribution of income and sources of income. As a regulated investment
company, the Fund generally will not be subject to tax on its ordinary income
and net realized capital gains.
The Fund also intends to comply with the diversification requirements of Section
817(h) of the Code for those investors who acquire shares through variable
annuity contracts and variable life insurance policies so that those contract
owners and policy owners should not be subject to federal tax on distributions
from the Fund to the insurance company separate accounts. Contract owners and
policy owners should review the applicable contract prospectus, prospectus
summary or disclosure statement for information regarding the personal tax
consequences of purchasing a contract or policy.
Dividends and Distributions. Dividends and capital gains distributions, if any,
are paid on a semi-annual basis.
Both income dividends and capital gains distributions are paid by each Fund on
a per share basis. As a result, at the time of payment, the share price of the
Fund will be reduced by the amount of the payment.
8 Aetna Growth and Income VP
<PAGE>
FINANCIAL HIGHLIGHTS
These highlights are intended to help you understand the Fund's performance for
the past 5 years. Certain information reflects financial results for a single
Fund share. The total returns in the table represent the rate an investor would
have earned (or lost) on an investment in the Fund (assuming reinvestment of
all dividends and distributions). The information in this table has been
audited by KPMG LLP, independent auditors, whose report, along with the Fund's
Financial Statements, is included in the Fund's current Annual Report, which is
available upon request.
(for one outstanding share throughout each period)
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------------------------------
1998 1997 1996 1995+ 1994+
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period $ 33.63 $ 32.39 $ 29.05 $ 26.23 $ 31.25
------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.38 0.54+ 0.65+ 0.72 0.76
Net realized and change in
unrealized gain or loss on
investments 4.47 8.94 6.45 7.62 (1.07)
------- ------- ------- ------- -------
Total from investment
operations 4.85 9.48 7.10 8.34 (0.31)
------- ------- ------- ------- -------
Less distributions:
From net investment income (0.40) (0.58) (0.73) (0.72) (0.81)
From net realized gains on
investments (6.21) (7.66) (3.03) (4.80) (3.90)
-------- -------- -------- -------- -------
Total distributions (6.61) (8.24) (3.76) (5.52) (4.71)
-------- -------- -------- -------- -------
Net asset value, end of period $ 31.87 $ 33.63 $ 32.39 $ 29.05 $ 26.23
======== ======== ======== ======== =======
Total return* 14.49% 29.89% 24.45% 32.25% (0.96)%
Net assets, end of period (millions) $ 9,801 $ 9,188 $ 6,954 $ 5,662 $ 4,424
Ratio of net expenses to average
net assets 0.57% 0.56% 0.43% 0.29% 0.30%
Ratio of net investment income to
average net assets 1.03% 1.46% 2.02% 2.42% 2.52%
Portfolio turnover rate 145.64% 107.01% 85.03% 96.63% 84.27%
</TABLE>
* The total return percentage does not reflect any separate account charges
under variable annuity contracts and life policies.
+ Per share data calculated using weighted average number of shares
outstanding throughout the period.
Aetna Growth and Income VP 9
<PAGE>
ADDITIONAL INFORMATION
The SAI, which is incorporated by reference into this Prospectus, contains
additional information about the Fund. The most recent annual and semi-annual
reports also contain information about the Fund's investments, as well as a
discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during the past fiscal year.
You may request free of charge the current SAI or the most recent annual and
semi-annual reports, or other information about the Fund, by calling
1-800-525-4225 or writing to:
Aetna Growth and Income VP
151 Farmington Avenue
Hartford, Connecticut 06156-8962
The SEC also makes available to the public reports and information about the
Fund. Certain reports and information, including the SAI, are available on the
SEC's website (http://www.sec.gov) or at the SEC's Public Reference Room in
Washington, D.C. You may call 1-800-SEC-0330 to get information about the
operations of the public reference room or you may write to Public Reference
Section, Washington, D.C. 20549-6009 to get information from the Public
Reference Section. The Public Reference Section will charge a duplicating fee
for copying and sending any information you request.
Investment Company Act File No. 811-2514.
10 Aetna Growth and Income VP
<PAGE>
Part B
The Statement of Additional Information is incorporated into Part B of this
Post-Effective Amendment No. 54 by reference to Post-Effective Amendment No. 8
to the Registration Statement on Form N-1A (File No. 333-05173), as filed
electronically on April 27, 1999.
<PAGE>
- --------------------------------------------------------------------------------
PART C
OTHER INFORMATION
-----------------
Item 23. Exhibits:
- ------------------
(a.1) Charter (Declaration of Trust)(1)
(a.2) Amendment to Declaration of Trust of Aetna
Variable Fund(2)
(b) Amended and Restated Bylaws (adopted by Board of
Trustees September 13, 1994)(1)
(c) Instruments Defining Rights of Holders(3)
(d) Investment Advisory Agreement between Aeltus
Investment Management, Inc. ("Aeltus") and Aetna
Variable Fund(2)
(e) Underwriting Agreement between Aetna Life
Insurance and Annuity Company and Aetna Variable
Fund(4)
(f) Directors' Deferred Compensation Plan(2)
(g) Custodian Agreement between Aetna Variable Fund
and Mellon Bank, N. A.(1)
(h.1) Administrative Services Agreement between Aeltus
and Aetna Variable Fund(2)
(h.2) License Agreement(5)
(i) Opinion and Consent of Counsel
(j) Consent of Independent Auditors
(k) Not applicable
(l) Not applicable
(m) Not applicable
(n) See exhibit 27 below
(o) Not applicable
(p.1) Power of Attorney (December 10, 1997)(6)
(p.2) Authorization for Signatures(7)
(27) Financial Data Schedule
1. Incorporated by reference to Post-Effective Amendment No. 48 to Registration
Statement on Form N-1A (File No. 2-51739), as filed electronically on
April 25, 1996.
2. Incorporated by reference to Post-Effective Amendment No. 53 to Registration
Statement on Form N-1A (File No. 2-51739), as filed electronically on
April 27, 1998.
3. Incorporated by reference to Post-Effective Amendment No. 50 to Registration
Statement on Form N-1A (File No. 2-51739), as filed electronically on
June 7, 1996.
4. Incorporated by reference to Post-Effective Amendment No. 51 to Registration
Statement on Form N-1A (File No. 2-51739), as filed electronically on
February 18, 1997.
<PAGE>
5. Incorporated by reference to Post-Effective Amendment No. 52 to Registration
Statement on Form N-1A (File No. 2-51739), as filed electronically on April
11, 1997.
6. Incorporated by reference to Post-Effective Amendment No. 14 to Registration
Statement on Form N-1A (File No. 33-12723), as filed electronically on
March 10, 1999.
7. Incorporated by reference to Post-Effective Amendment No. 2 to Registration
Statement on Form N-1A (File No. 333-05173), as filed electronically on
September 26, 1997.
<PAGE>
Item 24. Persons Controlled by or Under Common Control
- --------------------------------------------------------
Registrant is a Massachusetts business trust for which separate
financial statements are filed. As of March 31, 1999, Aetna Life
Insurance and Annuity Company (Aetna), and its affiliates, owned
99.61% of Registrant's outstanding voting securities, through
direct ownership or through one of Aetna's separate accounts.
Aetna is an indirect wholly-owned subsidiary of Aetna Inc.
A list of all persons directly or indirectly under common control
with the Registrant and a list which indicates the principal business
of each such company referenced in the diagram are incorporated
herein by reference to Item 24 of Post-Effective Amendment No. 14 to
the Registration Statement on Form N-1A (File No. 33-12723), as filed
electronically with the Securities and Exchange Commission on
March 10, 1999.
Item 25. Indemnification
- --------------------------
Article 5.3 of the Registrant's Amendment to Declaration of Trust,
incorporated herein by reference to Exhibit (a.1) of this
Post-Effective Amendment, provides indemnification for the
Registrant's trustees and officers. In addition, the Registrant's
trustees and officers are covered under a directors and officers
errors and omissions liability insurance policy issued by Gulf
Insurance Company which expires on October 1, 1999.
Section XI.B of the Administrative Services Agreement, incorporated
herein by reference to Exhibit (h.1) of this Post-Effective
Amendment, provides for indemnification of the Administrator.
Item 26. Business and Other Connections of Investment Adviser
- ---------------------------------------------------------------
The investment adviser, Aeltus Investment Management, Inc.
(Aeltus), is registered as an investment adviser with the
Securities and Exchange Commission. In addition to serving as the
investment adviser and administrator for the Registrant, Aeltus acts
as investment adviser and administrator for Aetna Income Shares,
Aetna Variable Encore Fund, Aetna Balanced VP, Inc., Aetna Generation
Portfolios, Inc., Aetna GET Fund, Aetna Variable Portfolios, Inc.,
and Aetna Series Fund, Inc. (all management investment companies
registered under the Investment Company Act of 1940 (1940 Act)).
It also acts as investment adviser to certain private accounts.
The following table summarizes the business connections of the
directors and principal officers of the investment adviser.
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Positions and Offices Other Principal Position(s) Held
Name with Investment Adviser Since Oct. 31, 1996/Addresses*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
John Y. Kim Director, President, Chief Director (February 1995 - March 1998) --
Executive Officer, Chief Aetna Life Insurance and Annuity
Investment Officer Company; Senior Vice President (since
September 1994) -- Aetna Life Insurance
and Annuity Company.
J. Scott Fox Director, Managing Vice President (since April 1997) --
Director, Chief Operating Aetna Retirement Services, Inc.;
Officer, Chief Financial Director and Senior Vice President
Officer (March 1997 - February 1998) -- Aetna
Life Insurance and Annuity Company;
Managing Director, Chief Operating
Officer, Chief Financial Officer,
Treasurer (April 1994 - March 1997) --
Aeltus Investment Management, Inc.
Thomas J. McInerney Director President (since August 1997) -- Aetna
Retirement Services, Inc.; Director and
President (since September 1997) --
Aetna Life Insurance and Annuity
Company; Executive Vice President (since
August 1997) -- Aetna Inc.; Vice
President, Strategy (March 1997 - August
1997) -- Aetna Inc.; Vice President,
Marketing and Sales (December 1996 -
March 1997) -- Aetna U.S. Healthcare;
Vice President, National Accounts (April
1996 - December 1996) -- Aetna U.S.
Healthcare.
Catherine H. Smith Director Chief Financial Officer (since February
1998) -- Aetna Retirement Services,
Inc.; Director, Senior Vice President
and Chief Financial Officer (since
February 1998) - Aetna Life Insurance
and Annuity Company; Vice President,
Strategy, Finance and Administration,
Financial Relations (September 1996 -
February 1998) -- Aetna Inc.
Lennart A. Carlson Vice President, Managing Director (since January 1996) --
Fixed Income Investments Aeltus Trust Company.
Stephanie A. DeSisto Vice President
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Positions and Offices Other Principal Position(s) Held
Name with Investment Adviser Since Oct. 31, 1996/Addresses*
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Amy R. Doberman Vice President, General Counsel (since December 1996) -- Aetna
Counsel and Secretary Life Insurance and Annuity Company;
Attorney (March 1990 - November 1996) --
Securities and Exchange Commission.
Steven C. Huber Vice President, Fixed Managing Director (since August 1996) --
Income Investments Aeltus Trust Company.
Brian K. Kawakami Vice President, Chief Chief Compliance Officer & Director
Compliance Officer (since January 1996) -- Aeltus Trust
Company; Chief Compliance Officer (since
August 1993) -- Aeltus Capital, Inc.
Neil Kochen Managing Director, Managing Director (since April 1996) --
Product Development Aeltus Trust Company; Managing Director
(since August 1996) -- Aeltus Capital, Inc.
Frank Litwin Managing Director, Vice President, Strategic Marketing
Retail Marketing and (April, 1992 - August, 1997) -- Fidelity
Sales Investments Institutional Services
Company.
Kevin M. Means Managing Director, Managing Director (since August 1996) --
Equity Investments Aeltus Trust Company.
L. Charles Meythaler Managing Director, Director (since July 1997) -- Aeltus
Institutional Marketing Trust Company; Managing Director (since
and Sales June 1997) -- Aeltus Trust Company;
President (June 1993 - April 1997) - New
England Investment Association.
</TABLE>
* Except with respect to Mr. McInerney and Ms. Smith, the principal business
address of each person named is 10 State House Square, Hartford, Connecticut
06103-3602. The address of Mr. McInerney and Ms. Smith is 151 Farmington
Avenue, Hartford, Connecticut 06156.
<PAGE>
Item 27. Principal Underwriters
(a) In addition to serving as the principal underwriter for the
Registrant, Aetna also acts as the principal underwriter for Aetna
Income Shares, Aetna Variable Encore Fund, Aetna Balanced VP, Inc.,
Aetna GET Fund, Aetna Variable Portfolios, Inc. and Aetna
Generation Portfolios, Inc. and as investment adviser, principal
underwriter and administrator for Portfolio Partners, Inc. (all
management investment companies registered under the 1940 Act).
Additionally, Aetna acts as the principal underwriter and depositor
for Variable Annuity Account B of Aetna, Variable Annuity Account C
of Aetna, Variable Annuity Account G of Aetna, and Variable Life
Account B of Aetna (separate accounts of Aetna registered as unit
investment trusts under the 1940 Act). Aetna is also the principal
underwriter for Variable Annuity Account I of Aetna Insurance
Company of America (AICA) (a separate account of AICA registered
as a unit investment trust under the 1940 Act).
(b) The following are the directors and principal officers of the
Underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Principal Positions and Offices
Business Address* Underwriter with Registrant
- ------------------ ------------------------------------ ---------------------
<S> <C> <C>
Thomas J. McInerney Director and President None
Shaun P. Mathews Director and Senior Vice President Trustee
Catherine H. Smith Director, Senior Vice President and None
Chief Financial Officer
Allan Baker Senior Vice President None
David E. Bushong Senior Vice President None
Robert D. Friedhoff Senior Vice President None
Steven A. Haxton Senior Vice President None
John Y. Kim Senior Vice President Trustee
Deborah Koltenuk Vice President, Treasurer and None
Corporate Controller
Therese Squillacote Vice President and Chief Compliance None
Officer
Thomas P. Waldron Senior Vice President None
Kirk P. Wickman Senior Vice President, General Counsel None
and Corporate Secretary
</TABLE>
* Except with respect to Mr. Kim, the principal business address of all
directors and officers listed is 151 Farmington Avenue, Hartford, Connecticut
06156. Mr. Kim's address is 10 State House Square, Hartford, Connecticut
06103-3602.
(c) Not applicable.
<PAGE>
Item 28. Location of Accounts and Records
- --------------------------------------------
As required by Section 31(a) of the 1940 Act and the rules
thereunder, the Registrant and its investment adviser, Aeltus,
maintain physical possession of each account, book or other
document, at 151 Farmington Avenue, Hartford, Connecticut 06156
and 10 State House Square, Hartford, Connecticut 06103-3602,
respectively.
Shareholder records of direct shareholders are maintained by the
transfer agent, First Data Investor Services Group, Inc., 4400
Computer Drive, Westborough, Massachusetts 01581.
Item 29. Management Services
- -------------------------------
Not applicable.
Item 30. Undertakings
- ------------------------
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act and the Investment Company
Act, Aetna Variable Fund certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment to the Registration Statement
under Rule 485(b) under the Securities Act and has duly caused this
Post-Effective Amendment to be signed on its behalf by the undersigned, duly
authorized, in the City of Hartford, and State of Connecticut, on the 27th day
of April, 1999.
AETNA VARIABLE FUND
-------------------
Registrant
By /s/ J. Scott Fox*
-------------------------
J. Scott Fox
President
Pursuant to the requirements of the Securities Act, this Post-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the date(s) indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
J. Scott Fox* President and Trustee )
------------------------- (Principal Executive Officer) )
J. Scott Fox )
)
Albert E. DePrince, Jr.* Trustee )
------------------------- )
Albert E. DePrince, Jr. )
)
Maria T. Fighetti* Trustee )
------------------------- )
Maria T. Fighetti ) April
) 27, 1999
)
David L. Grove* Trustee )
------------------------- )
David L. Grove )
)
)
John Y. Kim* Trustee )
------------------------- )
John Y. Kim )
)
Sidney Koch* Trustee )
------------------------- )
Sidney Koch )
)
Shaun P. Mathews* Trustee )
------------------------- )
Shaun P. Mathews )
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Corine T. Norgaard* Trustee )
------------------------- )
Corine T. Norgaard )
)
Richard G. Scheide* Trustee )
------------------------- )
Richard G. Scheide )
)
Stephanie A. DeSisto* Treasurer and Chief Financial Officer )
------------------------- (Principal Financial and Accounting Officer) )
Stephanie A. DeSisto )
</TABLE>
/s/ Amy R. Doberman
By: -------------------------
*Amy R. Doberman
Attorney-in-Fact
* Executed pursuant to Power of Attorney dated November 6, 1998 and
filed with the Securities and Exchange Commission on March 10, 1999.
<PAGE>
Aetna Variable Fund
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page
- ----------- ------- ----
<S> <C> <C>
99-(i) Opinion and Consent of Counsel ________________________
99-(j) Consent of Independent Auditors ________________________
(27) Financial Data Schedule ________________________
</TABLE>
10 State House Square, SH11
Hartford, CT 06103-3602
Amy R. Doberman
Counsel
Aetna Variable Fund
April 27, 1999 (860) 275-2032
Fax: (860) 275-2158
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Attn: Filing Desk
Re: Aetna Variable Fund
Post-Effective Amendment No. 54 to
Registration Statement on Form N-1A
(File No. 2-51739 and 811-2514)
Dear Sir or Madam:
The undersigned serves as counsel to Aetna Variable Fund, a Massachusetts
business trust (the "Fund"). It is my understanding that the Fund has registered
an indefinite number of shares of beneficial interest under the Securities Act
of 1933 (the "1933 Act") pursuant to Rule 24f-2 under the Investment Company Act
of 1940 (the "1940 Act").
Insofar as it relates or pertains to the Fund, I have reviewed the prospectus
and the Fund's Registration Statement on Form N-1A, as amended to the date
hereof, filed with the Securities and Exchange Commission under the 1933 Act and
the 1940 Act, pursuant to which the Shares will be sold (the "Registration
Statement"). I have also examined originals or copies, certified or otherwise
identified to my satisfaction, of such documents and other instruments I have
deemed necessary or appropriate for the purpose of this opinion. For purposes of
such examination, I have assumed the genuineness of all signatures on original
documents and the conformity to the original of all copies.
I am admitted to practice law in Connecticut, Maryland and the District of
Columbia. My opinion herein as to Maryland law is based upon a limited inquiry
thereof that I have deemed appropriate under the circumstances.
Based upon the foregoing, and assuming the securities are issued and sold in
accordance with the provisions of the Fund's Declaration of Trust and the
Registration Statement, I am of the opinion that the securities will when sold
be legally issued, fully paid and nonassessable.
<PAGE>
Page 2
April 27, 1999
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
/s/ Amy R. Doberman
Amy R. Doberman
Counsel
Consent of Independent Auditors
The Board of Trustees and Shareholders
Aetna Growth and Income VP:
We consent to the use of our report dated January 29, 1999 incorporated by
reference herein on Form N-1A relating to Aetna Growth and Income VP and to the
references to our firm under the headings "Financial Highlights" in the
prospectus and "Independent Auditors" in the statement of additional
information.
/s/ KPMG LLP
KPMG LLP
Hartford, Connecticut
April 27, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000002664
<NAME> Aetna Variable Fund
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 8,342,074,379
<INVESTMENTS-AT-VALUE> 9,789,351,877
<RECEIVABLES> 141,605,657
<ASSETS-OTHER> 22,022,242
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9,952,979,776
<PAYABLE-FOR-SECURITIES> 66,543,549
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 85,383,857
<TOTAL-LIABILITIES> 151,927,406
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8,123,117,539
<SHARES-COMMON-STOCK> 307,531,473
<SHARES-COMMON-PRIOR> 273,174,905
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> (942,800)
<ACCUMULATED-NET-GAINS> 230,584,111
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,448,293,520
<NET-ASSETS> 9,801,052,370
<DIVIDEND-INCOME> 124,877,554
<INTEREST-INCOME> 28,578,746
<OTHER-INCOME> 0
<EXPENSES-NET> (54,879,707)
<NET-INVESTMENT-INCOME> 98,576,593
<REALIZED-GAINS-CURRENT> 1,720,373,368
<APPREC-INCREASE-CURRENT> (546,496,697)
<NET-CHANGE-FROM-OPS> 1,272,453,264
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (106,400,592)
<DISTRIBUTIONS-OF-GAINS> (1,621,614,754)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,918,286
<NUMBER-OF-SHARES-REDEEMED> (24,104,473)
<SHARES-REINVESTED> 53,542,755
<NET-CHANGE-IN-ASSETS> 612,792,876
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 142,754,401
<OVERDISTRIB-NII-PRIOR> (4,047,705)
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 47,851,987
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 54,879,707
<AVERAGE-NET-ASSETS> 9,531,472,325
<PER-SHARE-NAV-BEGIN> 33.63
<PER-SHARE-NII> 0.42
<PER-SHARE-GAIN-APPREC> 4.43
<PER-SHARE-DIVIDEND> (0.40)
<PER-SHARE-DISTRIBUTIONS> (6.21)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 31.87
<EXPENSE-RATIO> 0.57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
