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ALLIANCE CAPITAL
THE HUDSON RIVER TRUST
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Annual Report
December 31, 1997
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ALLIANCE CAPITAL/HUDSON RIVER TRUST
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NOTES ON PERFORMANCE
Performance for each Alliance Portfolio is shown together with comparative
benchmarks, including both unmanaged market indices and universes of managed
portfolios. The Portfolios' annualized net rates of return are based on the
percentage change in the net asset value of Class 1A shares with dividends and
capital gains reinvested. Returns are net of investment management fees and
expenses of the Trust. Total returns for Class 1B shares will differ due to
different expenses. These rates are not representative of the actual return you
would receive under a policy. No policyowner can invest directly in the Trust.
Changes in policy values depend not only on the investment performance of the
Trust, but also on the insurance and administrative charges, applicable sales
charges and the mortality and expense risk charge applicable under a policy.
These policy charges effectively reduce the dollar amount of any net gains and
increase the dollar amount of any net losses. All performance shown is
annualized, unless otherwise noted.
THE BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio is likely to select its holdings.
Portfolio Inception Dates and Comparative Benchmarks:
Alliance Money Market: July 13, 1981; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
Alliance Intermediate Government Securities: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Gov't).
Alliance Quality Bond: October 1, 1993; Lehman Aggregate Bond Index (Lehman
Aggregate).
Alliance High Yield: January 2, 1987; Merrill Lynch High Yield Master Index
(Merrill Lynch High Yield).
Alliance Growth & Income: October 1, 1993; 25% Value Line Convertibles Index and
75% Standard & Poor's 500 Index (25% Value Line Conv./75% S&P 500).
Alliance Equity Index: March 1, 1994; S&P 500.
Alliance Common Stock: January 13, 1976; S&P 500.
Alliance Global: August 27, 1987; Morgan Stanley Capital International World
Index (MSCI World).
Alliance International: April 3, 1995; Morgan Stanley International Europe,
Australia, Far East Index (MSCI EAFE).
Alliance Aggressive Stock: January 27, 1986; 50% Russell 2000/50% S&P Mid Cap.
Alliance Small Cap Growth: May 1, 1997; Russell 2000 Growth.
Alliance Conservative Investors: October 2, 1989; 70% Lehman Treasury Bond
Composite Index and 30% S&P 500 (70% Lehman Treas./30% S&P 500).
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ALLIANCE CAPITAL/HUDSON RIVER TRUST
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BENCHMARKS, CONTINUED
Alliance Balanced: January 27, 1986; 50% Lehman Government/Corporate Bond Index
and 50% S&P 500 (50% Lehman Corp./50% S&P 500).
Alliance Growth Investors: October 2, 1989; 30% Lehman Government/Corporate Bond
Index and 70% S&P 500 (30% Lehman Corp./70% S&P 500).
The S&P 500 benchmark includes reinvested dividends. The Lipper Mutual Funds
Survey (Lipper) records the performance of over 7000 mutual funds. According to
Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating expenses, and, for funds with Rule 12b-1
plans, asset-based sales charges. Lipper data provides a more accurate picture
of Trust performance relative to other funds than the market indices.
GROWTH OF A $10,000 INVESTMENT
The charts shown on each portfolio page illustrates the total value of an
assumed investment Class 1A shares of each portfolio of the Hudson River Trust.
The periods illustrated are from the inception dates shown for each Portfolio
through December 31, 1997 unless noted otherwise. The results assume the
reinvestment of dividends and capital gains. Results should not be considered
representative of future gains or losses.
The total value shown reflects management fees and operating expenses of the
Portfolio only. They have not been adjusted for charges and expenses associated
with life insurance policies or annuity contracts. Rates of return on insurance
policies and annuity contracts will be lower because of the deduction of
contract-related charges.
Information on these pages constitutes part of the annual report of The Hudson
River Trust and is not intended for separate use.
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ALLIANCE MONEY MARKET PORTFOLIO
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As a result of technical factors in the fourth quarter of 1997, we laid out a
very distinct strategy in timing yield curve movements. Early in the fourth
quarter, while the yield curve was only modestly steep, we geared investments
toward late November and mid-December maturity placements. This plan enabled us
to take advantage of a steepening yield curve later in the quarter. As funds
matured in November and December, we capitalized on the general need of the
issuer's year-end financing requirements by extending our maturities while
leaving enough cash in the account for year-end liquidity purposes.
As we enter the first quarter of a new year, the yield curve has flattened out,
yet the Portfolio is in position to enjoy higher yields without a tremendous
need for investing until later on in the quarter.
The Fed's monetary policy will likely remain neutral through the first half of
1998. Circumstances such as our continued tight labor market indicate that our
economy is still in a strong enough position to absorb any damage that will be
done by the Asian crisis. The Fed should not have any reason to seriously
consider interest rate hikes or cuts.
In the meantime, with the Portfolio not having any major maturities for the next
several weeks, we are in a position to patiently look for any developments which
could influence the short-term markets.
Raymond Papera, Portfolio Manager
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INVESTMENT OBJECTIVE
High level of current income, while preserving its assets and maintaining
liquidity.
INVESTMENT POLICY
Primarily high-quality U.S. dollar denominated money market
instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $573.6 million
Number of Issues ................................. 36
Average Maturity ............................ 39 days
ASSET MIX DISTRIBUTION (BY MATURITY)
1-30 days ...................................... 47.1%
31-60 days ..................................... 25.9%
61-90 days ..................................... 20.7%
91+ days ........................................ 6.3%
ASSET MIX DISTRIBUTION (BY ISSUER)
Banker's Acceptance ............................. 1.6%
Time Deposits ................................... 2.8%
U.S. Government Agency .......................... 1.0%
Corporate Notes ................................. 2.8%
Variable Rate Securities ....................... 14.5%
Certificates of Deposit ......................... 7.4%
Commercial Paper ............................... 69.9%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
MONEY MARKET 5.42% 5.50% 4.69% 5.78% 7.17%
Lipper Money Market 4.90 5.05 4.31 5.40 6.89
3-Month T-Bill 5.23 5.41 4.71 5.61 6.87
The Alliance Money Market Portfolio started operations on July 13, 1981.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
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12/31/87 10,000
12/31/88 10,732
12/31/89 11,717
12/31/90 12,682
12/31/91 13,466
12/31/92 13,942
12/31/93 14,357
12/31/94 14,932
12/31/95 15,790
12/31/96 16,632
12/31/97 17,534
17,534
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ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
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1997 was a year of strong growth for the U.S. economy. Fueled by a tight labor
market, which saw unemployment figures hover around 20-year lows for most of the
year, and record level consumer confidence, U.S. GDP grew at an estimated 3.8%
rate in 1997. In spite of this strong growth, inflation remained remarkably
absent for this late in an expansion. Through December, producer prices were
down 1.2% from year earlier levels while consumer prices posted a modest 1.7%
gain for the same period. In light of the positive inflation environment, the
Federal Reserve remained on the sidelines for most of the year after moving once
in March to increase rates 0.25%.
The U.S. bond market posted solid returns for the year. The relatively stable
interest rate environment throughout most of the year pushed investors to seek
higher yields, driving up returns in the yield oriented sectors, corporates and
mortgage backed securities (MBS). Late in the year, the effects of the financial
turmoil in Southeast Asia spilled over into the U.S. bond market. As the
financial crisis in that region of the world grew, investors in search of a safe
haven spurred a rally in U.S. government bonds as they rushed to buy U.S.
Treasury securities.
As of December 31, 1997, the Portfolio posted returns in-line with its
benchmark, the Lehman Intermediate Government Bond Index. While interest rates
were range-bound throughout most of the year, we increased the Portfolio's
allocation to the MBS sector to increase Portfolio yield. When interest rates
pushed decisively lower during the third quarter, we trimmed MBS exposure and
exchanged holdings for lower coupon pass-throughs to limit exposure to
prepayment risk.
Our outlook for the U.S. remains optimistic. We expect domestic growth to slow
from its 1997 pace to a more sustainable 2.5% rate in 1998. The economic slowing
in Southeast Asia will further temper U.S. growth in the upcoming year as
exports to that region curtail. The Federal Reserve is unlikely to raise
interest rates in the short term in light of the likelihood of slowing growth
and the desire to keep global liquidity at high levels. Until the repercussions
of events in Southeast Asia are fully understood, we expect interest rate
volatility to remain elevated. In this environment, the government sector should
continue to outperform mortgage pass-throughs.
Patricia J. Young and Jeffrey S. Phlegar, Portfolio Managers
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INVESTMENT OBJECTIVE
High current income consistent with relative stability of principal
INVESTMENT POLICY
Primarily debt securities issued or guaranteed by the U.S. Government, its
agencies and instrumentalities. Each investment will have a final maturity of
not more than 10 years or a duration not exceeding that of a 10-year Treasury
note.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $120.2 million
Number of Issues ................................... 20
Average Quality (excluding net cash) ............ Govt.
Average Duration (including net cash) ...... 2.92 years
ASSET MIX DISTRIBUTION (BY DURATION)
0-1 year ........................................ 20.0%
1-3 years ....................................... 33.0%
3-5 years ....................................... 29.9%
5-7 years ....................................... 17.1%
ASSET MIX DISTRIBUTION (BY ISSUER)
Treasury ........................................ 53.0%
Agencies ........................................ 21.7%
Mortgage-Backed Securities ...................... 7.8%
CMOs ............................................ 6.7%
Short-Term & Cash ............................... 10.8%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS INCEPT.
ALLIANCE
INTERMEDIATE GOV'T. SEC. 7.29% 8.06% 5.94% 7.00%
Lipper Int. Gov't. Funds Average 8.08 8.68 6.00 7.19
Lehman Intermediate Government 7.72 8.65 6.39 7.47
The Alliance Intermediate Government Securities Portfolio started operations on
April 1, 1991.
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GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
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12/31/91 11,207
12/31/92 11,835
12/31/93 13,087
12/31/94 12,514
12/31/95 14,182
12/31/96 14,718
12/31/97 15,791
15,791
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ALLIANCE QUALITY BOND PORTFOLIO
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The U.S. bond market posted solid returns in 1997. Throughout most of the year,
interest rates remained relatively stable and investor demand for yield-oriented
securities, corporate bonds as well as mortgage-backed securities, was high. In
spite of strong U.S. economic growth, inflation remained almost non-existent,
further increasing demand in the bond market. Toward year-end, financial turmoil
which began in Southeast Asia, spilled over into other global bond markets,
including the U.S. The resulting "flight to quality" spurred a year-end rally in
U.S. Treasury securities while negatively impacting returns in the corporate,
mortgage and non-U.S. bond sectors.
The Quality Bond Portfolio posted strong positive returns for the year ended
December 31, 1997, largely in-line with those of its unmanaged benchmark, the
Lehman Brothers Aggregate Bond Index. Throughout most of the year, the
Portfolio's holdings were focused on the non-government sectors. The strong U.S.
economy provided solid support for the corporate sector and drove returns for
this sector up. Within the corporate sector, an increase in new issuance by
Yankee issuers (foreign companies which issue bonds denominated in U.S. dollars)
provided significant opportunities. Non-U.S. bonds also posted solid returns
during the year. Economic convergence in Europe, as that continent prepares for
the launch of the Euro, created opportunities, particularly in the non-core
countries (those outside of Germany, France and Italy).
Late in the year, as the effects of the Southeast Asian financial crisis began
to be felt in the U.S. markets, we increased the Portfolio's allocation to U.S.
Treasury and Agency securities and trimmed exposure to the corporate and
mortgage-backed sectors.
Looking forward into 1998, we expect global growth to be slower and inflation
pressures to be reduced, as Asia exports cheaper goods to the world and imports
less from abroad. In the U.S., economic growth will be tempered by increased
global manufacturing capacity and reduced exports. Recent declines in interest
rates, lower commodity prices and lower import prices will restrain inflationary
pressures. Overall, we expect economic growth to slow to a more moderate pace of
2% - 2.5% during the upcoming year. In the near-term, we expect market
volatility to remain high and will maintain the Portfolio's focus on U.S.
Government and Agency securities.
Matthew Bloom, Portfolio Manager
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INVESTMENT OBJECTIVE
High current income consistent with preservation of capital.
INVESTMENT POLICY
Primarily investment grade fixed income securities.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $203.2 million
Number of Issues ................................... 17
Average Quality (excluding net cash) .............. AA+
Average Duration (including net cash) ....... 5.2 years
ASSET MIX DISTRIBUTION (BY DURATION)
0-1 year ........................................ 3.5%
1-2 years ....................................... 14.7%
2-4 years ....................................... 42.9%
4-7 years ....................................... 19.6%
7-10 years ...................................... 7.9%
Over 10 years ................................... 11.4%
ASSET MIX DISTRIBUTION (BY ISSUER)
Government Bonds ................................ 64.8%
Domestic Corporates ............................. 8.5%
Yankee .......................................... 5.4%
Mortgage-Backed Securities ...................... 14.0%
Non-Dollar Dominated ............................ 3.8%
Short-Term & Cash ............................... 3.5%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE QUALITY BOND 9.14% 10.40% 5.80%
Lipper Corporate Debt A-Rated 9.17 10.01 5.82
Lehman Aggregate 9.65 10.42 6.51
The Alliance Quality Bond Portfolio started operations on October 1, 1993.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
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12/31/93 9,949
12/31/94 9,442
12/31/95 11,050
12/31/96 11,642
12/31/97 12,706
12,706
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ALLIANCE HIGH YIELD PORTFOLIO
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The high yield market experienced its third consecutive banner year. Most high
yield indices outperformed other fixed income markets by 2 to 3%. Record levels
of new issuance and robust mutual fund inflows dominated the market in 1997 for
the second year in a row.
The Alliance High Yield Portfolio had an outstanding year, outperforming its
Lipper peer group by about 5%. This outperformance was primarily due to: an
overweighting in media and telecommunications stocks and a greater emphasis on
single B credits offering more relative value and yield potential.
We feel quite positive about the outlook for the overall economy as well as the
high yield market. Even with slightly lower growth levels in the U.S., inflation
remains low and interest rates remain relatively stable. In the high yield
market, we believe that credit selection will play a major role in high yield
investing going forward. In addition, steering clear of those credits that will
be most affected by the Asian crisis will also be an important tactic.
Wayne Tappe, Portfolio Manager
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INVESTMENT OBJECTIVE
High return by maximizing current income and, to the extent consistent with that
objective, capital appreciation.
INVESTMENT POLICY
Primarily a diversified mix of high yield, fixed income securities involving
greater volatility of price and risk of principal and income than high-quality
fixed income securities.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $421.8 million
Number of Issues ................................... 81
Average Quality (excluding net cash) ................ B
Average Duration (including net cash) ....... 4.8 years
ASSET MIX DISTRIBUTION (BY QUALITY)
AAA-BBB ......................................... 10.0%
BB-B ............................................ 85.7%
CCC and below ................................... 4.3%
ASSET MIX DISTRIBUTION (BY ISSUER)
Corporate Bonds ................................. 80.0%
Foreign Bonds ................................... 10.0%
Short-Term & Cash ............................... 10.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
HIGH YIELD 18.48% 20.42% 15.89% 12.80% 12.04%
Lipper High Yield 12.96 14.17 11.36 10.66 9.78
ML Master High Yield 12.83 14.54 11.72 12.09 11.39
The Alliance High Yield Portfolio started operations on January 2, 1987.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 10,975
12/31/89 11,538
12/31/90 11,410
12/31/91 14,203
12/31/92 15,952
12/31/93 19,645
12/31/94 19,100
12/31/95 22,904
12/31/96 28,145
12/31/97 33,348
33,348
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ALLIANCE GROWTH & INCOME PORTFOLIO
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The U.S. equity markets grew strongly in 1997 as the S&P 500 rose 33.4%. The S&P
500 has risen 125% in the past three years. Indices comprised of smaller stocks
than the S&P 500 exhibited less robust results, with the S&P 400 mid-cap index
up 32.3%, the S&P 600 small-cap index up 25.6% and the Russell 2000 Index up
22.4%. Growth stocks, driven by investor cash flow and earnings momentum,
significantly outperformed value stocks whose performance is based more on low
valuations to earnings.
The Portfolio's conservative focus on low valuation, high-dividend paying
companies prevented it from fully participating in the market rally. The
portfolio underperformed compared to its unmanaged benchmark, 75% S&P 500 and
25% Value Line Convertibles. The results of the Portfolio were essentially
identical to those of its peer group, the Lipper Growth and Income Funds
universe, however.
Looking forward, the S&P 500 Index is trading at a P/E multiple of 19-20x
reasonable 1998 operating earnings. During historical periods with analogous
inflation and interest rate dynamics, fiscal and monetary discipline, and
competitive position of domestic corporations, the market multiple has typically
ranged from 18-22x forward earnings. The market is therefore probably fairly
valued. The economy is growing above trend, and since the beginning of 1996, the
labor markets and goods markets have tightened more or less continuously. This
situation will probably not last much longer. The economy may slow without
intervention as Far Eastern economies drag down global growth. This scenario may
benefit bonds more than stocks. Alternatively, the Fed will be forced to tighten
if the economy remains strong. Such an action would affect both bonds and
stocks. In any event, we continue to target investments in undervalued, quality
companies with reasonable growth profiles.
W. Theodore Kuck and Paul Rissman, Portfolio Managers
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INVESTMENT OBJECTIVE
High return through a combination of current income and capital appreciation.
INVESTMENT POLICY
Primarily income-producing common stocks and securities convertible into common
stocks.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $587.8 million
Number of Issues .................................. 125
LARGEST EQUITY HOLDINGS
Chase Manhattan Corp. ........................... Banks
RJR Nabisco Holdings Corp. .................... Tobacco
Texaco, Inc. ...................... Oil - International
MCI Communications Corp............. Telecommunications
First Data Corp. ............ Office Equipment Services
Campbell Soup Company ........................... Foods
Citicorp ........................................ Banks
Schering Plough Corp................... Pharmaceuticals
USX-Marathon Group, Inc. .......... Oil - International
Morgan Stanley, Dean Witter, Discover.. Financial Svcs.
ASSET MIX DISTRIBUTION
Common Stock .................................... 84.2%
Preferred Stock ................................. 3.4%
Bonds (Convertible) ............................. 8.8%
Short-Term & Cash ............................... 3.6%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE GROWTH & INCOME 26.90% 23.65% 15.94%
Lipper Growth & Income. 27.14 26.49 18.48
25% Value Line Conv./75% S&P 500 29.54 28.62 20.14
The Alliance Growth & Income Portfolio started operations on October 1, 1993.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/93 9,975
12/31/94 9,917
12/31/95 12,305
12/31/96 14,777
12/31/97 18,751
18,751
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ALLIANCE EQUITY INDEX PORTFOLIO
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Despite market volatility toward the end of 1997, the Equity Index Portfolio
enjoyed another outstanding year, returning 32.58%. The Alliance Equity Index
Portfolio is the only passively managed portfolio within The Hudson River Trust.
Using a stratified sampling technique, the Portfolio is constructed to track the
investment results of the S&P 500. It remains fully invested in stocks.
Judith Maglio, Portfolio Manager
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INVESTMENT OBJECTIVE
Total return before expenses that approximates the total return performance of
the Standard & Poor's 500 Index ("the Index"), including reinvestment of
dividends, at a risk level consistent with that of the Index.
INVESTMENT POLICY
Selected securities in the Index which the adviser believes will, in the
aggregate, approximate the performance results of the Index.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $943.7 million
Number of Issues ................................ 444
LARGEST EQUITY HOLDINGS
General Electric Co............. Electrical Equipment
Coca-Cola Co. ............................. Beverages
Microsoft Corp. ........... Office Equipment Services
Exxon Corp. ..................... Oil - International
Merck & Co., Inc..................... Pharmaceuticals
Royal Dutch Petroleum Co. (ADR) . Oil - International
Intel Corp. ............................. Electronics
Philip Morris Cos., Inc. .................... Tobacco
Procter & Gamble Corp. ............. Soaps/Toiletries
IBM Corp............................ Office Equipment
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS INCEPT.
ALLIANCE EQUITY INDEX 32.58% 30.35% 23.35%
Lipper S&P 500 Index Avg. 32.60 30.49 23.31
S&P 500 33.36 31.15 23.84
The Alliance Equity Index Portfolio started operations on March 1, 1994.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/94 10,108
12/31/95 13,796
12/31/96 16,884
12/31/97 22,385
22,385
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ALLIANCE COMMON STOCK PORTFOLIO
The first half of 1997 was marked by continued leadership by very large
capitalization growth stocks and, in March and April, a sharp correction which
was particularly severe in the technology sector and in the over-the-counter
market.
The Portfolio has always emphasized stocks of companies that are somewhat
smaller than those that dominate the S&P 500. This, coupled with our strong
emphasis on the technology sector, made for relative underperformance in the
first few months of 1997. In the last half of the year, these same sectors came
back strongly and the market rally broadened out, affording a better environment
for stocks below the top tier in size and quality.
Technology and financial services have been the major areas of emphasis in the
Portfolio for the last several years. Specifically, within the technology
sector, we have stressed networking and communications. We continue to see above
average potential in both the technology and financial services sectors.
The very favorable combination of solid growth and low inflation has led to
another year of strong equity returns. The recent collapse of both stock markets
and currencies in several Asian countries delivered a brief shock to the U.S.
market. However, the U.S. market has quickly regained its footing and rebounded
strongly. Current conditions appear favorable for continued stock market gains
in the U.S.
Nevertheless, we could caution that we have now experienced several years of
strong results and that common sense and experience suggest that future gains
will be more moderate. While there is no immediate evidence to suggest a
reversal of fortune, we note that the bull market has benefited greatly from a
secular decline in interest rates which is now 15 years old. That said, the
immediate outlook for both the U.S. economy and the stock market appears
favorable.
Tyler Smith, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stock and other equity-type instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $9.6 billion
Number of Issues ................................ 110
LARGEST EQUITY HOLDINGS
Cendant Corp................................. Leisure
Cisco Systems, Inc....................... Electronics
WorldCom, Inc.+ .................. Telecommunications
Travelers Group, Inc....................... Insurance
American International Group, Inc.......... Insurance
MBNA Corp. ....................... Financial Services
Philip Morris Cos., Inc...................... Tobacco
American Express Co. ............. Financial Services
Merck & Co., Inc..................... Pharmaceuticals
Loews Corp................................... Tobacco
+Includes convertibles
ASSET MIX DISTRIBUTION
Common Stock ................................... 92.3%
Preferred Stock ................................ 0.6%
Short-Term & Cash .............................. 7.1%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
ALLIANCE 1 YEAR 3 YRS 5 YRS 10 YRS 20 YRS INCEPT.
COMMON
STOCK 29.40% 28.66% 21.08% 18.00% 17.56% 15.83%
Lipper Growth 25.30 25.11 16.47 15.93 15.73 15.50
S&P 500 33.36 31.15 20.27 18.05 16.66 15.44
The Alliance Common Stock Portfolio started operations on January 13, 1976.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 12,244
12/31/89 15,378
12/31/90 14,130
12/31/91 19,484
12/31/92 20,110
12/31/93 25,105
12/31/94 24,567
12/31/95 32,539
12/31/96 40,439
12/31/97 52,328
52,328
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ALLIANCE GLOBAL PORTFOLIO
- --------------------------------------------------------------------------------
European markets rose approximately 38%, modestly outpacing the S&P 500, but
dollar-based performance was reduced to 24% by currency weakness. Japan's market
fell approximately 24%, including 11% in currency losses, versus the dollar. The
emerging markets of Southeast Asia lost approximately 48%. Large capitalization
shares significantly outperformed smaller issues.
In the global environment of low inflation, stable prices, and low interest
rates, growth stocks again performed strongly. The Portfolio maintained its
heavy concentration in growth stocks in 1997. Additionally, we added
significantly to our holdings in European restructuring candidates during the
year.
European and U.S. shares provided most of the Portfolio's gains, while our
Asia/Pacific exposure pulled down overall performance. However, our Japanese
emphasis on exporters and growth issues produced good relative returns.
At year end, European markets remain attractively valued relative to the U.S.
European companies with serious commitment to restructuring will be further
added to the core growth Portfolio. Japanese holdings will remain heavily
concentrated on exporters and growth shares. Our U.S. Portfolio continues to
emphasize technology and financial issues. Technology investments are
concentrated in networking, communication and software. In developing markets,
we are selectively buying companies which we believe can produce significant
positive earnings surprises for the foreseeable future.
Ronald Simcoe, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities of non-United States companies as well as United
States issuers.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $1.2 billion
Number of Issues ................................ 491
Number of Countries Represented ................. 38
LARGEST EQUITY HOLDINGS
Cendant Corp. ............................... Leisure
Cisco Systems, Inc. ..................... Electronics
WorldCom, Inc.+ .................. Telecommunications
Travelers Group, Inc. ..................... Insurance
Philip Morris Cos., Inc. .................... Tobacco
+ includes convertible securities
DISTRIBUTION OF INVESTMENTS BY COUNTRY
Canada ........................................ 1.2%
Japan ......................................... 9.9%
Southeast Asia ................................ 1.7%
Latin America ................................. 1.5%
United Kingdom ................................ 11.4%
Scandinavia ................................... 4.0%
New Zealand & Australia ....................... 1.7%
United States ................................. 45.5%
Other European Countries ...................... 15.1%
Short-Term & Cash ............................. 8.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
GLOBAL 11.66% 14.99% 16.15% 13.74% 11.70%
Lipper Global 13.04 15.20 13.76 11.50 9.10
MSCI World 15.76 16.62 15.34 10.57 8.22
The Alliance Global Portfolio started operations on August 27, 1987.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 11,088
12/31/89 14,054
12/31/90 13,200
12/31/91 17,225
12/31/92 17,142
12/31/93 22,644
12/31/94 23,828
12/31/95 28,311
12/31/96 32,450
12/31/97 36,234
36,234
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE INTERNATIONAL PORTFOLIO
- --------------------------------------------------------------------------------
The Alliance International Portfolio trailed its unmanaged benchmark, the MSCI
EAFE Index, for the year ended December 31, 1997 due to over exposure to smaller
capitalization issues which dramatically underperformed larger capitalization
stocks for the year. EAFE rose 1.8% as strong European markets were able to
overcome poor returns in the Asia/Pacific region. The MSCI Europe Index advanced
38% for the year, but dollar based performance was reduced to 24% by currency
weaknesses. Japan fell 24%, including an 11% yen depreciation versus the dollar.
Southeast Asian markets lost 48%, more than half of which was currency related.
Large capitalization shares significantly outperformed smaller issues. European
restructuring stocks overtook growth shares to become the year's star
performers. With the exception of energy related issues, most cyclicals
performed poorly.
Our European holdings remain concentrated in growth stocks. We made significant
additions to financials and globally competitive exporters during the year and
expect to continue buying restructuring candidates during 1998. Our Japanese
positions in exporters and domestic growth shares produced good relative
returns. However, we sold domestic cyclical issues throughout the year as the
Japanese government failed to respond to consumer concerns about the economy.
The small developing markets of Southeast Asia have been forced to pay the price
for aggressive corporate borrowing in dollars. Therefore, we reduced holdings in
the region during the second half of 1997 and increased holdings in Mexico and
Eastern Europe.
The weakness in Asian economies should produce a year of modest international
growth in 1998. Several Asian countries, including Korea, may experience
negative growth rates. As a result, the policy response of the American and
Japanese central banks bears watching. Continued reductions in global inflation
expectations are likely, and this should boost global bond markets. In this
environment, companies which can project visible earnings growth are likely to
perform well. While we are concerned by the historically high valuations being
accorded equity markets, we continue to believe we can identify attractive
international investment ideas.
Ronald Simcoe, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities selected principally to permit participation in
non-United States companies with prospects for growth.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $193.9 million
Number of Issues ................................ 500
Number of Countries Represented .................. 37
LARGEST EQUITY HOLDINGS
Compass Group PLC.................. Contract Catering
Cie Generale des Geophysique (ADR)....... Oil Service
Magyar Tavkoslesi (ADR).......... Utility - Telephone
Scandic Hotels AB ........................... Lodging
Canadian Fracmaster Ltd. ................ Oil Service
DISTRIBUTION OF INVESTMENTS BY COUNTRY
Canada ........................................ 2.0%
Japan ......................................... 20.6%
Southeast Asia ................................ 3.9%
Latin America ................................. 4.5%
United Kingdom ................................ 18.7%
Scandinavia ................................... 9.9%
New Zealand & Australia ....................... 4.3%
Other European Countries ...................... 29.3%
Short-Term & Cash ............................. 6.8%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR INCEPT.
ALLIANCE INTERNATIONAL (2.98)% 6.39%
Lipper International 5.44 9.87
MSCI EAFE 1.78 6.15
The Alliance International Portfolio started operations on April 3, 1995.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/95 11,129
12/31/96 12,221
12/31/97 11,857
11,857
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
- --------------------------------------------------------------------------------
During recent months, we have made some changes in the Portfolio's investment
strategies that were implemented back in 1994 and 1995. First, within the energy
sector, we have eliminated our holdings in offshore drillers. However, we are
still bullish about onshore drillers. We continue to see a tightening in the
demand/supply for oil tankers similar to the demand crunch faced by drilling rig
operators over the last two years. As a result, we have purchased several
holdings which we believe will benefit from this trend.
On the cyclical side, we continue to look for industries where demand is growing
much greater than supply and capacity to meet demand is insufficient. As a
result, companies can raise prices to meet this greater demand and most of this
falls right to the bottom line as incremental profitability. We maintain our
overweight positions in the airline industry, hotel industry, and rental car
industry, believing that they exhibit superior pricing power.
We have added to the Portfolio's health care holdings, focusing specifically on
biotechnology companies with products either approved by the FDA or nearing the
end of the approval process. Therefore, many of the risk hurdles that these
companies typically face are already behind them.
Alden Stewart and Randall Haase, Portfolio Managers
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stocks and other equity-type securities issued by medium- and
other smaller-sized companies with strong growth potential.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................. $4.7 billion
Number of Issues ................................. 70
LARGEST EQUITY HOLDINGS
Republic Industries, Inc. ...... Automotive Retailing
Continental Airlines, Inc. (Class B)........ Airlines
Diamond Offshore Drilling, Inc. ... Offshore Drilling
CNAFinancial Corp. ........................ Insurance
ITT Corp. .................................. Leisure
Delta Airlines, Inc. ....................... Airlines
Comcast Corp. (Class A) .......... Cable Broadcasting
Centocor, Inc. ........................ Biotechnology
Crompton & Knowles Corp. ........ Chemicals Specialty
Telephone & Data Systems, Inc. .. Utility - Telephone
ASSET MIX DISTRIBUTION
Common Stock ................................... 95.4%
Short-Term & Cash .............................. 4.6%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE
AGGRESSIVE STOCK 10.94 21.29 14.92 19.00 19.41
Lipper Sm. Co. Growth 19.63 22.51 15.24 16.50 14.06
50% Russell 2000/ 27.31 24.88 17.11 17.74 15.12
50% S&P 400 Mid-Cap
The Alliance Aggressive Stock Portfolio started operations on January 27, 1986.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 10,114
12/31/89 14,512
12/31/90 15,697
12/31/91 29,333
12/31/92 28,403
12/31/93 33,165
12/31/94 31,899
12/31/95 41,991
12/31/96 51,314
12/31/97 56,927
56,927
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
1997 showed continued strength in the equity markets, although the gains were
not evenly distributed among various capitalization ranges or styles. Small cap
issues underperformed large cap issues for the fourth consecutive year with the
S&P 500 rising 33.4% versus 22.4% for the Russell 2000. Even more striking and
relevant for investors in this Portfolio was the performance differential in
small cap growth stocks and value stocks. The Russell 2000 Value Index gained
31.8% versus 12.9% for the Growth Index, marking the most significant divergence
between growth and value strategies in quite some time. This created a more
difficult environment for small cap growth investors to prosper in.
Early investors in this Portfolio, however, benefited from a fortuitous launch
date as the small cap growth market bottomed a few weeks before the May 1 start
date. The Alliance Small Cap Growth Portfolio returned 26.7% versus 27.7% for
the Russell 2000 Growth Index. The slight underperformance was driven largely by
the negative impact of investing significant cash inflows in a rising equity
market.
The Portfolio ended the year with sector overweights in business services and
consumer cyclicals, and an underweighted position in financial
services.
Going forward, the Portfolio will continue to focus on companies with
accelerating operating fundamentals, reasonable valuations and strong management
teams. Small cap growth stock investing should remain a powerful option for long
term-oriented investors.
Michael Gaffney, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily U.S. common stocks and other equity-type securities of smaller
companies with favorable growth prospects.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ........................... $141.0 million
Number of Issues ................................ 103
LARGEST EQUITY HOLDINGS
Crompton & Knowles Corp. ...... Chemicals - Specialty
Budget Group, Inc. ..................... Auto Related
Ha-Lo Industries, Inc. ........ Professional Services
Comverse Technology, Inc. Telecom Equipment Services
Mohawk Industries, Inc. ............ Apparel, Textile
Sinclair Broadcast Group ..... TV, Radio Broadcasting
ACC Corp. ........................ Telecommunications
Atlantic Coast Airlines, Inc. .............. Airlines
Jones Medical Industries, Inc. ...... Pharmaceuticals
Carematrix Corp. .............. Professional Services
ASSET MIX DISTRIBUTION
Common Stock ...................................97.5%
Short-Term & Cash .............................. 2.5%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE INCEPTION
(Unannualized)
ALLIANCE SMALL CAP GROWTH 26.74%
Lipper Small Company Growth Funds Avg 29.36
Russell 2000 27.66
The Alliance Small Cap Growth Portfolio started operations on May 1, 1997.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/97 12,674
12,674
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
- --------------------------------------------------------------------------------
During 1997, the U.S. capital markets bested their longer term, average rates
of return. The bond market, as measured by the Lehman Brothers
Government/Corporate Bond Index, produced a 9.8% rate of return. Equity markets
generated returns in excess of 20% for the third year in a row, with the S&P 500
Stock Index producing a 33.4% return.
Investment returns for the year should be viewed in three phases -- the first
quarter, the second quarter and early into the fourth quarter. During the first
quarter, returns were adversely affected by the upward ratchet in the Fed funds
rate as the Federal Reserve reacted to a strong performance by the economy in
its sixth year of recovery. Investors, fearful of additional rate hikes, put
selling pressure on bond prices.
As the second quarter unfolded, economic growth continued at a strong pace, but
was also characterized by surprisingly strong advances in productivity, profits
and lower rates of inflation. This was celebrated with both rising bond and
stock prices.
Early in the fourth quarter, the growing turmoil in the Asian financial markets
began to affect the capital markets in the industrialized nations. Economists
started to lower their expectations for world growth and investors became
increasingly worried about overseas growth prospects for U.S. companies. The
upheaval in the Asian financial markets continued to ricochet around the region,
eventually threatening the stability of the Hong Kong dollar - a currency long
viewed by investors as a bedrock currency. World governments and multi-lateral
institutions such as the International Monetary Fund (IMF) and the World Bank
responded to the region's liquidity and asset crises. These efforts to stabilize
the regional markets should be successful given enough time. However, the
ongoing uncertainty and changing perceptions about growth prospects will
introduce more volatility into global capital markets. Indeed we are maintaining
a modest cash position of some 10% to take advantage of any price opportunities
as they develop.
For the year, fixed income securities - the dominant asset class of the
portfolio - returned 9.64%. The equity portion of the portfolio was negatively
affected by exposure to foreign stocks and the concentration of money flows into
a limited number of U.S. equities. For example, the 25 largest stocks in the S&P
500 rose 34%, while the remaining 475 companies underperformed the index.
Our portfolio selection continues to focus on company fundamentals, earnings
growth and relative valuation levels. Although we expect the rate of growth in
profits will moderate as economic growth slows, stock prices should be supported
by the continued low levels of inflation and interest rates that will accompany
that slower growth.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High total return without, in the adviser's opinion, undue risk to principal.
INVESTMENT POLICY
A diversified mix of publicly traded fixed-income and equity securities; asset
mix and security selection are primarily based upon factors expected to reduce
risk.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ................................ $313.5 million
Number of U.S. Equity Issues .......................... 124
Average Quality (excluding net cash) .................. AA+
Average Duration (including net cash) .......... 9.2 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ......................... Tobacco
Cisco Systems, Inc. .......................... Electronics
Morgan Stanley, Dean Witter, Discover .... Financial Svcs.
Travelers Group, Inc. .......................... Insurance
General Electric Co. ................ Electrical Equipment
Tyco International Ltd. .. Diversified Manufacturing Oper.
Pfizer, Inc. ............................. Pharmaceuticals
Gillete Corp. .......................... Soaps &Toiletries
Worldcom, Inc. ........................ Telecommunications
Sunbeam Corp. ....................... Household Appliances
ASSET MIX DISTRIBUTION
Domestic Stock ..................................... 24.9%
Foreign Stock ...................................... 5.8%
Bonds .............................................. 54.0%
Short-Term & Cash .................................. 15.3%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS INCEPT.
ALLIANCE
CONSERVATIVE INVESTORS 13.25% 12.79% 8.79% 9.53%
Lipper Flexible Portfolio 18.69 19.44 13.14 12.15
70% Lehman Treas./30% S&P 500 16.71 17.18 11.87 11.39
The Alliance Conservative Investors Portfolio started operations on October 2,
1989.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/89 10,309
12/31/90 10,969
12/31/91 13,144
12/31/92 13,905
12/31/93 15,402
12/31/94 14,771
12/31/95 17,785
12/31/96 18,712
12/31/97 21,192
21,192
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
U.S. capital markets turned in another set of extraordinary returns in 1997.
More significant, 1997 was the third year in a row of returns well above the
long-term averages. The S&P 500 Index's 33.4% return for the year far outpaced
the broader stock indices that still delivered respectable double-digit returns.
In contrast to 1996, fixed income markets yielded returns well above the
historical average; the Lehman Brothers Government/Corporate Bond Index tacked
on 10%. International equities severely underperformed both U.S. stocks and
fixed income securities largely because of continuing problems in Japan and the
Asian region.
The volatility in capital markets increased as the year progressed, mirroring
more pronounced swings in investor sentiment. As the year began, investors'
concerns about strong economic growth and prospects for more monetary restraint
weighed upon the capital markets. The 25 basis point hike in the Federal funds
rate in the first quarter only produced fears of further rate increases. When
strong economic growth continued in the second quarter, accompanied by
unexpected advances in productivity, profits, low rates of inflation, and low
unemployment rates not experienced in 25 years, bond and stock prices moved
sharply higher.
Just as investors were becoming increasingly comfortable with the notion of a
higher, non-inflationary growth path for the economy and superior rates of
profitability, turmoil in the emerging Asian capital and currency markets began
to affect the capital markets in the developed world. Investors began to revise
downward their forecasts for global economic growth and profitability as
conditions in Asia deteriorated. Official multi-lateral institutions like the
International Monetary Fund (IMF) and world governments responded to the
region's liquidity and currency crises. We believe these efforts will be
successful in stabilizing conditions in the region. However, it will take time
and investor perceptions will remain volatile as these countries strive to
recover above-average economic growth.
The fixed income portion of the portfolio produced satisfactory returns. The
equity portion, however, was adversely affected by exposure to international
equities and the concentrated nature of money flows into a narrow spectrum of
U.S. stocks. For example, 475 companies in the S&P 500 stocks underperformed the
index with only 25 companies gaining 34% and beating the 33.4% return posted by
the index.
The phenomenon of highly concentrated performance did reverse itself during the
July - October period, only to return once again as investors responded to the
turmoil in Asia. Our investment selection process continues to focus on strong
growth fundamentals that are reasonably priced. We believe higher stock prices
will be supported by benign inflation and low interest rates even though we
expect a slowing in the rate of economic growth and profits.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High return through a combination of current income and capital appreciation.
INVESTMENT POLICY
Primarily common stocks, publicly traded debt securities and high-quality money
market instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ................................. $1.7 billion
Number of U.S. Equity Issues ........................ 169
Average Quality (excluding net cash) ................ AA+
Average Duration (including net cash) ......... 8.3 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ........................ Tobacco
Cisco Systems, Inc. ......................... Electronics
Morgan Stanley, Dean Witter, Discover ... Financial Svcs.
Travelers Group, Inc. ......................... Insurance
General Electric Co. ............... Electrical Equipment
Tyco International Ltd. .. Diversified Manufacturing Oper.
WorldCom, Inc.+....................... Telecommunications
Pfizer, Inc. ............................ Pharmaceuticals
Nabors Industries, Inc.+.............. Oil & Gas Drilling
MBNA Corporation...................... Financial Services
+Includes convertibles
ASSET MIX DISTRIBUTION
Domestic Stocks ................................... 39.9%
Foreign Stocks .................................... 9.1%
Convertibles ...................................... 2.9%
Bonds ............................................. 42.0%
Short-Term & Cash ................................. 6.1%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
1 YEAR 3 YRS 5 YRS 10 YRS INCEPT.
ALLIANCE BALANCED 15.06% 15.45% 9.71% 12.04% 12.30%
Lipper Balanced 19.00 19.44 13.20 12.92 12.33
50% Lehman Corp./ 21.56 21.68 14.63 21.19 13.97
50% S&P 500
The Alliance Balanced Portfolio started operations on January 27, 1986.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested Ten Years Ago on December 31, 1987)
Total
Date Value
---- -----
12/31/87 10,000
12/31/88 11,327
12/31/89 14,253
12/31/90 14,288
12/31/91 20,183
12/31/92 19,615
12/31/93 22,025
12/31/94 20,257
12/31/95 24,258
12/31/96 27,091
12/31/97 31,171
31,171
<PAGE>
- --------------------------------------------------------------------------------
ALLIANCE GROWTH INVESTORS PORTFOLIO
- --------------------------------------------------------------------------------
For the third year in a row, U.S. equities produced returns well above their
longer term average. The S&P 500 Index gained 33.4% while the Russell 2000 Index
generated a 22% return. Once again the large capitalization issues dominated the
performance of the averages. The 25 largest stocks in the S&P 500 rose 34%, with
the remaining 475 equities underperforming the index. Portfolio diversification
in the U.S. equity market meant performance suffered. There was an even larger
gap in performance when international equities were compared with U.S. stocks.
The EAFE Index -- a broad composite of international stocks -- produced only a
1.8% gain for the year.
Commentary on the performance of the U.S. capital markets in 1997 should be
divided into three segments. During the first quarter, returns were adversely
affected by an uptick in the Federal funds rate. Fearful of further rate hikes,
investors drove bond prices lower. In the early spring, investors began to
reassess their outlook with a continued flow of good news about productivity
gains, profits and surprisingly benign inflation. Investors became encouraged by
unemployment rates not seen in decades. Stock prices rose to new highs and bonds
began to generate positive returns.
By early fall, the U.S. markets became unnerved by the collapse in the currency
and capital markets in Asia. Investors lowered their expectations for global
growth and reassessed the prospects for an economic recovery in Japan given the
importance of the Asian region to Japan's export growth and banking system.
World governments and multi-lateral institutions like the IMF and the World Bank
moved to stabilize conditions in the region. While we expect those efforts will
be successful given enough time and that growth will resume, the ongoing
uncertainty and changing perceptions about growth prospects will introduce more
volatility into global capital markets.
The Portfolio's performance was negatively affected by two principal factors:
the concentration of returns in the U.S. market in a few, large capitalization
stocks and the exposure of about 17% of the portfolio to international equities.
At year end, we had a modest cash position of some 0.5% and plan to take
advantage of any price opportunities that might develop in an environment of
increased volatility.
Looking forward, we expect a slowing in the rate of economic growth. That
slowdown reflects the combination of shrinking export markets, a surge in
imports and a strong dollar. Nonetheless, inflation and interest rates should
remain benign and provide support for equity valuations.
Robert G. Heisterberg, Portfolio Manager
================================================================================
INVESTMENT OBJECTIVE
High total return consistent with the adviser's determination of reasonable
risk.
INVESTMENT POLICY
A diversified mix of publicly traded fixed-income and equity securities; asset
mix and security selection based upon factors expected to increase possibility
of high long-term return.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1997
Net Assets ............................... $1.7 billion
Number of U.S. Equity Issues ...................... 177
Average Quality (excluding net cash) .............. AA+
Average Duration (including net cash) ....... 8.4 years
LARGEST EQUITY HOLDINGS
Philip Morris Cos., Inc. ...................... Tobacco
Morgan Stanley, Dean Witter, Discover .. Financial Svcs.
Cisco Systems, Inc. ....................... Electronics
WorldCom, Inc.+..................... Telecommunications
General Electric Co. ............. Electrical Equipment
Travelers Group, Inc. ....................... Insurance
Nabors Industries, Inc.+............ Oil & Gas Drilling
Life Re Corp. ............................... Insurance
ITT Corp. ..................................... Leisure
Noble Drilling Corp. ...... Oil Supplies & Construction
+Includes convertibles
ASSET MIX DISTRIBUTION
Domestic Stock ................................... 53.5%
Foreign Stock .................................... 13.9%
Convertibles ..................................... 2.3%
Bonds ............................................ 19.3%
Short-Term & Cash ................................ 11.0%
ANNUALIZED TOTAL RETURN, AS OF DECEMBER 31, 1997
SINCE
ALLIANCE 1 YEAR 3 YRS 5 YRS INCEPT.
GROWTH INVESTORS 16.87% 18.48% 13.17% 15.73%
Lipper Flexible Portfolio 18.69 19.44 13.14 12.15
30% Lehman Corp./70% S&P 500 26.28 25.64 17.02 14.48
The Alliance Growth Investors Portfolio started operations on October 2, 1989.
GROWTH OF $10,000 INVESTMENT AS OF DECEMBER 31, 1997
(Invested at Inception)
Total
Date Value
---- -----
12/31/89 10,399
12/31/90 11,503
12/31/91 17,129
12/31/92 17,974
12/31/93 20,717
12/31/94 20,066
12/31/95 25,357
12/31/96 28,555
12/31/97 33,371
33,371
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE ALLIANCE GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at value (Notes 1 and 4).............. $ 551,218,667 $114,937,264 $199,082,370 $409,444,270 $584,091,770
Cash ............................................. 250,597 150,271 1,850,749 3,867,754 136,662
Receivable for securities sold.................... -- 8,514,530 -- -- --
Collateral held for securities loaned
(Note 1) ........................................ -- 14,877,570 20,317,896 -- 83,697,400
Receivable from Separate Accounts for Trust
shares sold...................................... 20,699,118 216,925 202,284 3,871,282 4,484,564
Unrealized appreciation of forward currency
contracts (Notes 1 and 4)........................ -- -- 230,830 -- --
Dividends, interest and other receivables......... 2,952,078 1,470,759 2,012,816 9,027,978 1,310,011
------------- ------------ ------------ ------------ ------------
Total assets.................................... 575,120,460 140,167,319 223,696,945 426,211,284 673,720,407
------------- ------------ ------------ ------------ ------------
LIABILITIES:
Options written at value (Premiums received:
Alliance Common Stock Portfolio--$103,560,700)
(Notes 1 and 4) .................................. -- -- -- -- --
Payable to custodian.............................. -- -- -- -- --
Payable for securities purchased.................. -- 5,013,423 -- 4,100,000 1,517,259
Payable for collateral received on securities
loaned .......................................... -- 14,877,570 20,317,896 -- 83,697,400
Payable to Separate Accounts for Trust shares
redeemed ........................................ 1,207,497 27,928 17,806 16,591 397,040
Variation margin payable on futures contracts .... -- -- -- -- --
Distribution fees payable......................... 24,848 988 -- 12,299 6,670
Investment advisory fees payable.................. 175,017 52,732 95,141 220,448 280,754
Trustees' fees payable............................ 29,067 6,308 6,466 8,897 7,871
Accrued expenses.................................. 48,581 22,474 26,158 42,171 57,520
------------- ------------ ------------ ------------ ------------
Total liabilities............................... 1,485,010 20,001,423 20,463,467 4,400,406 85,964,514
------------- ------------ ------------ ------------ ------------
NET ASSETS........................................ $ 573,635,450 $120,165,896 $203,233,478 $421,810,878 $587,755,893
============= ============ ============ ============ ============
Investments at cost............................... $ 551,106,796 $113,600,359 $197,176,185 $401,820,273 $511,226,533
============= ============ ============ ============ ============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital.................................. $ 573,354,238 $127,643,383 $201,320,004 $412,006,119 $507,451,775
Accumulated undistributed (overdistributed)
net investment income........................... 149,936 17,556 321,561 29,459 (7,871)
Accumulated undistributed net realized
gain (loss) .................................... 19,405 (8,831,948) (541,234) 2,151,303 7,446,752
Unrealized appreciation/depreciation on
investments and foreign currency denominated
assets and liabilities.......................... 111,871 1,336,905 2,133,147 7,623,997 72,865,237
------------- ------------ ------------ ------------ ------------
NET ASSETS........................................ $ 573,635,450 $120,165,896 $203,233,478 $421,810,878 $587,755,893
============= ============ ============ ============ ============
CLASS IA SHARES:
Net Assets........................................ $ 449,959,833 $115,114,412 $203,233,478 $355,473,286 $555,058,953
============= ============ ============ ============ ============
Shares outstanding (Note 5)....................... 44,192,317 12,190,330 20,863,418 34,161,761 36,099,131
============= ============ ============ ============ ============
Net asset value, offering and redemption
price per share (Note 1)......................... $10.18 $9.44 $9.74 $10.41 $15.38
============= ============ ============ ============ ============
CLASS IB SHARES:
Net Assets........................................ $123,675,617 $5,051,484 $66,337,592 $32,696,940
============= ============ ============ ============
Shares outstanding (Note 5)....................... 12,163,496 535,399 6,386,424 2,128,126
============= ============ ============ ============
Net asset value, offering and redemption
price per share (Note 1)......................... $10.17 $9.43 $10.39 $15.36
============= ============ ============ ============
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE COMMON ALLIANCE ALLIANCE AGGRESSIVE
EQUITY INDEX STOCK GLOBAL INTERNATIONAL STOCK
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 938,556,102 $ 9,725,410,132 $1,221,659,645 $182,951,529 $4,484,945,342
99,549 -- 16,893,430 8,347,523 181,729
-- 60,067,219 8,205,868 2,023,708 211,128,536
109,536,553 662,838,280 113,847,792 15,052,581 612,639,016
4,552,195 29,633,785 1,766,152 223,944 6,208,417
-- -- 6,004,608 2,059,365 --
1,147,581 14,458,000 1,735,003 355,921 595,158
-------------- --------------- -------------- ------------ --------------
1,053,891,980 10,492,407,416 1,370,112,498 211,014,571 5,315,698,198
-------------- --------------- -------------- ------------ --------------
-- 118,604,155 -- -- --
-- 580,406 -- -- --
-- 142,569,172 28,420,108 1,563,213 26,255,439
109,536,553 662,838,280 113,847,792 15,052,581 612,639,016
231,453 3,076,771 1,327,331 176,950 10,893,069
2,300 -- -- -- --
24 47,055 8,949 704 15,377
264,547 3,091,113 709,265 158,485 2,231,578
13,621 306,186 29,678 3,984 148,899
102,458 520,545 382,380 161,478 257,517
-------------- --------------- -------------- ------------ --------------
110,150,956 931,633,683 144,725,503 17,117,395 652,440,895
-------------- --------------- -------------- ------------ --------------
$ 943,741,024 $ 9,560,773,733 $1,225,386,995 $193,897,176 $4,663,257,303
============== =============== ============== ============ ==============
$ 717,317,746 $ 7,039,048,426 $1,077,021,016 $195,035,943 $4,067,187,001
============== =============== ============== ============ ==============
$ 722,427,560 $ 6,704,717,648 $1,067,798,356 $210,004,133 $4,116,687,538
(17,221) 8,941,474 451,087 (1,256,432) (113,631)
(46,439) 175,796,508 7,714,386 (4,700,245) 128,925,055
221,377,124 2,671,318,103 149,423,166 (10,150,280) 417,758,341
-------------- --------------- -------------- ------------ --------------
$ 943,741,024 $ 9,560,773,733 $1,225,386,995 $193,897,176 $4,663,257,303
============== =============== ============== ============ ==============
$ 943,630,904 $ 9,331,993,502 $1,203,866,924 $190,610,696 $4,589,771,586
============== =============== ============== ============ ==============
47,791,119 431,744,475 69,624,563 18,568,973 126,731,100
============== =============== ============== ============ ==============
$19.74 $21.61 $17.29 $10.27 $36.22
============== =============== ============== ============ ==============
$110,120 $228,780,231 $21,520,071 $3,286,480 $73,485,717
============== =============== ============== ============ ==============
5,580 10,601,628 1,246,147 320,403 2,034,175
============== =============== ============== ============ ==============
$19.73 $21.58 $17.27 $10.26 $36.13
============== =============== ============== ============ ==============
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE
SMALL CAP CONSERVATIVE ALLIANCE GROWTH
GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C>
$153,853,714 $311,255,843 $1,711,741,713 $1,657,357,208
380,306 39,071 1,336,861 2,638,254
1,370,099 105,731 1,446,489 1,856,156
-- 29,663,095 239,139,139 159,509,187
403,968 325,132 529,990 2,830,011
-- 139,774 1,492,018 2,702,688
23,205 2,089,310 10,724,098 5,770,157
- ------------ ------------ -------------- --------------
156,031,292 343,617,956 1,966,410,308 1,832,663,661
- ------------ ------------ -------------- --------------
-- -- -- --
-- -- -- --
7,702,919 113,315 2,125,059 5,464,664
-- 29,663,095 239,139,139 159,509,187
7,192,631 73,102 94,151 461,205
-- -- -- --
8,682 1,107 -- 7,599
105,191 133,055 641,386 768,784
461 12,365 82,699 44,658
21,956 81,003 239,345 288,849
- ------------ ------------ -------------- --------------
15,031,840 30,077,042 242,321,779 166,544,946
- ------------ ------------ -------------- --------------
$140,999,452 $313,540,914 $1,724,088,529 $1,666,118,715
============ ============ ============== ==============
$153,110,020 $291,515,613 $1,529,925,684 $1,482,735,753
============ ============ ============== ==============
$141,856,917 $289,318,998 $1,515,099,274 $1,462,182,116
(461) 35,314 84,008 (1,463,848)
(1,600,698) 4,312,256 25,622,052 28,847,706
743,694 19,874,346 183,283,195 176,552,741
- ------------ ------------ -------------- --------------
$140,999,452 $313,540,914 $1,724,088,529 $1,666,118,715
============ ============ ============== ==============
$ 94,675,696 $307,846,822 $1,724,088,529 $1,630,388,457
============ ============ ============== ==============
7,666,635 25,886,381 98,055,256 87,899,970
============ ============ ============== ==============
$12.35 $11.89 $17.58 $18.55
============ ============ ============== ==============
$46,323,756 $5,694,092 $35,730,258
============ ============ ==============
3,752,576 479,176 1,928,937
============ ============ ==============
$12.34 $11.88 $18.52
============ ============ ==============
</TABLE>
2
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF OPERATIONS
Year Ended December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE ALLIANCE GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income** (Note 1):
Dividends (including $2,161,224 and
$7,600,919 from affiliated companies for
the Alliance Common Stock and Alliance
Aggressive Stock Portfolios,
respectively)............................. $ -- $ -- $ -- $ -- $ 5,855,617
Interest................................... 26,575,962 6,319,864 12,027,150 31,369,008 528,528
----------- ---------- ----------- ----------- -----------
Total income.............................. 26,575,962 6,319,864 12,027,150 31,369,008 6,384,145
----------- ---------- ----------- ----------- -----------
Expenses (Notes 1, 2 and 3):
Investment advisory fee.................... 1,701,504 512,659 946,523 1,759,520 2,241,190
Custodian fees............................. 34,909 27,311 29,438 37,074 50,640
Distribution fees--Class IB................ 99,712 2,784 -- 50,330 21,822
Printing and mailing expenses.............. 53,828 10,017 20,484 30,911 40,407
Professional fees.......................... 13,247 2,878 4,137 6,541 8,851
Proxy...................................... 18,723 4,003 7,831 8,578 9,482
SEC registration fees...................... 2,598 472 472 945 2,126
Trustees' fees............................. 12,946 2,812 4,882 7,918 10,507
Miscellaneous.............................. 7,936 2,178 3,718 4,003 4,378
----------- ---------- ----------- ----------- -----------
Total expenses............................ 1,945,403 565,114 1,017,485 1,905,820 2,389,403
----------- ---------- ----------- ----------- -----------
NET INVESTMENT INCOME........................ 24,630,559 5,754,750 11,009,665 29,463,188 3,994,742
----------- ---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
(NOTES 1 AND 4):
Realized Gain (Loss):
On securities (including $60,278,736 and
$73,433,264 from affiliated companies for
the Alliance Common Stock and Alliance
Aggressive Stock Portfolios,
respectively)............................. 57,662 1,026,388 4,637,643 19,038,590 40,626,845
On options written......................... -- -- -- -- --
On foreign currency transactions........... -- -- 479,412 -- --
On futures contracts....................... -- (31,130) -- -- --
----------- ---------- ----------- ----------- -----------
Realized gain (loss)--net................... 57,662 995,258 5,117,055 19,038,590 40,626,845
----------- ---------- ----------- ----------- -----------
Change in Unrealized
Appreciation/Depreciation:
On securities.............................. (45,650) 715,736 (370,670) 2,081,485 45,313,202
On options written......................... -- -- -- -- --
On foreign currency transactions........... -- -- 79,202 -- --
On futures contracts....................... -- -- -- -- --
----------- ---------- ----------- ----------- -----------
Unrealized appreciation/depreciation--net .. (45,650) 715,736 (291,468) 2,081,485 45,313,202
----------- ---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)--NET .... 12,012 1,710,994 4,825,587 21,120,075 85,940,047
----------- ---------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM OPERATIONS .. $24,642,571 $7,465,744 $15,835,252 $50,583,263 $89,934,789
=========== ========== =========== =========== ===========
</TABLE>
- ------------
* For the period from May 1, 1997 (commencement of operations) to December
31, 1997.
** Net of foreign taxes withheld on dividends of $10,061, $28,990,
$241,270, $1,461,466, $402,959, $60,774, $545,351 and $589,252 for the
Alliance Growth and Income, Alliance Equity Index, Alliance Common
Stock, Alliance Global, Alliance International, Alliance Conservative
Investors, Alliance Balanced and Alliance Growth Investors Portfolios,
respectively, and on interest of $2,017, $398, $337 and $352 for the
Alliance Global, Alliance International, Alliance Balanced and Alliance
Growth Investors Portfolios, respectively.
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- ---------
<S> <C> <C> <C>
$ 11,411,812 $ 68,591,236 $ 12,928,478 $ 2,632,662
789,772 18,865,438 6,100,385 1,090,065
------------ -------------- ------------ ------------
12,201,584 87,456,674 19,028,863 3,722,727
------------ -------------- ------------ ------------
2,197,395 29,420,651 7,017,899 1,762,245
122,477 252,696 669,018 309,149
107 196,198 30,918 2,877
66,090 886,522 127,631 19,754
15,908 245,582 33,973 3,642
16,561 297,204 43,819 5,710
3,779 -- 5,432 1,181
17,440 218,844 31,329 5,409
6,832 123,238 18,082 2,796
------------ -------------- ------------ ------------
2,446,589 31,640,935 7,978,101 2,112,763
------------ -------------- ------------ ------------
9,754,995 55,815,739 11,050,762 1,609,964
------------ -------------- ------------ ------------
2,229,446 948,337,540 89,619,727 6,320,591
-- 35,412,804 -- --
(3,600) (35,211) 12,151,769 2,073,635
1,334,820 -- -- --
------------ -------------- ------------ ------------
3,560,666 983,715,133 101,771,496 8,394,226
------------ -------------- ------------ ------------
158,811,684 1,059,002,503 11,374,979 (17,028,354)
-- (12,783,605) -- --
10,468 (108) 2,687,736 1,688,166
297,300 -- -- --
------------ -------------- ------------ ------------
159,119,452 1,046,218,790 14,062,715 (15,340,188)
------------ -------------- ------------ ------------
162,680,118 2,029,933,923 115,834,211 (6,945,962)
------------ -------------- ------------ ------------
$172,435,113 $2,085,749,662 $126,884,973 $ (5,335,998)
============ ============== ============ ============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
STOCK GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO* PORTFOLIO PORTFOLIO PORTFOLIO
--------- ---------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 17,775,006 $ 138,366 $ 1,057,328 $ 9,530,794 $ 10,909,405
10,411,701 273,322 12,801,311 52,969,301 30,543,074
- ------------ ---------- ----------- ------------ ------------
28,186,707 411,688 13,858,639 62,500,095 41,452,479
- ------------ ---------- ----------- ------------ ------------
22,471,593 349,889 1,458,313 6,677,983 7,843,703
156,983 18,251 125,580 354,061 433,193
75,004 22,465 3,118 -- 43,043
488,080 2,554 34,433 199,288 165,800
136,125 615 8,111 54,912 44,950
174,004 -- 13,373 77,187 57,542
-- -- 472 -- 6,141
121,089 696 8,523 46,548 41,008
64,056 860 5,612 30,053 22,804
- ------------ ---------- ----------- ------------ ------------
23,686,934 395,330 1,657,535 7,440,032 8,658,184
- ------------ ---------- ----------- ------------ ------------
4,499,773 16,358 12,201,104 55,060,063 32,794,295
- ------------ ---------- ----------- ------------ ------------
523,431,192 1,627,719 14,280,979 113,673,484 118,407,140
-- -- -- -- --
-- -- (294,655) (652,446) 3,578,951
-- -- -- -- --
- ------------ ---------- ----------- ------------ ------------
523,431,192 1,627,719 13,986,324 113,021,038 121,986,091
- ------------ ---------- ----------- ------------ ------------
(75,825,667) 743,694 10,033,377 64,409,755 77,338,868
-- -- -- -- --
-- -- 133,673 1,464,013 1,411,017
-- -- -- -- --
- ------------ ---------- ----------- ------------ ------------
(75,825,667) 743,694 10,167,050 65,873,768 78,749,885
- ------------ ---------- ----------- ------------ ------------
447,605,525 2,371,413 24,153,374 178,894,806 200,735,976
- ------------ ---------- ----------- ------------ ------------
$452,105,298 $2,387,771 $36,354,478 $233,954,869 $233,530,271
============ ========== =========== ============ ============
</TABLE>
4
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE INTERMEDIATE GOVERNMENT
MONEY MARKET PORTFOLIO SECURITIES PORTFOLIO
-------------------------------- ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 24,630,559 $ 19,055,993 $ 5,754,750 $ 4,575,583
Realized gain (loss)--net........................... 57,662 -- 995,258 (453,637)
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net........................ (45,650) (7,886) 715,736 (1,025,808)
------------- ------------- ------------ ------------
Net increase in net assets from operations ......... 24,642,571 19,048,107 7,465,744 3,096,138
------------- ------------- ------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1):
Class IA:
Dividends from net investment income............... (21,721,933) (19,050,946) (5,646,086) (4,575,583)
Dividends in excess of net investment income ...... -- (25,232) -- (19,617)
Distributions from realized gains.................. (30,365) -- -- --
Tax return of capital distributions................ -- -- -- --
------------- ------------- ------------ ------------
Total Class IA dividends and distributions ......... (21,752,298) (19,076,178) (5,646,086) (4,595,200)
------------- ------------- ------------ ------------
Class IB:
Dividends from net investment income............... (2,801,881) (5,047) (90,108) --
Dividends in excess of net investment income ...... -- (29,384) -- --
Distributions from realized gains.................. (7,892) -- -- --
Distributions in excess of realized gains ......... -- -- -- --
------------- ------------- ------------ ------------
Total Class IB dividends and distributions ......... (2,809,773) (34,431) (90,108) --
------------- ------------- ------------ ------------
Decrease in net assets from dividends and
distributions...................................... (24,562,071) (19,110,609) (5,736,194) (4,595,200)
------------- ------------- ------------ ------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold........................................ 902,735,892 508,537,942 40,498,885 36,879,548
Shares issued in reinvestment of dividends and
distributions..................................... 21,752,298 19,076,178 5,646,086 4,595,200
Shares redeemed.................................... (938,706,582) (450,848,823) (21,146,992) (23,371,086)
------------- ------------- ------------ ------------
Total Class IA transactions......................... (14,218,392) 76,765,297 24,997,979 18,103,662
------------- ------------- ------------ ------------
Class IB:
Shares sold........................................ 158,089,618 3,624,653 5,061,316 --
Shares issued in reinvestment of dividends and
distributions..................................... 2,809,773 34,431 90,108 --
Shares redeemed.................................... (39,732,243) (446,631) (97,482) --
------------- ------------- ------------ ------------
Total Class IB transactions......................... 121,167,148 3,212,453 5,053,942 --
------------- ------------- ------------ ------------
Net increase (decrease) in net assets derived from
share transactions................................. 106,948,756 79,977,750 30,051,921 18,103,662
------------- ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS ................... 107,029,256 79,915,248 31,781,471 16,604,600
NET ASSETS, BEGINNING OF PERIOD ..................... 466,606,194 386,690,946 88,384,425 71,779,825
------------- ------------- ------------ ------------
NET ASSETS, END OF PERIOD* .......................... $ 573,635,450 $ 466,606,194 $120,165,896 $ 88,384,425
============= ============= ============ ============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $149,936 and $43,191 for the Alliance Money Market Portfolio;
$17,556 and $3,160 for the Alliance Intermediate Government Securities
Portfolio; $321,561 and $(220,079) for the Alliance Quality Bond
Portfolio; $29,459 and $23,927 for the Alliance High Yield Portfolio;
$(7,871) and $11,797 for the Alliance Growth and Income Portfolio;
$(17,221) and $(5,276) for the Alliance Equity Index Portfolio, as of
December 31, 1997 and December 31, 1996, respectively.
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE GROWTH AND INCOME ALLIANCE
QUALITY BOND PORTFOLIO HIGH YIELD PORTFOLIO PORTFOLIO EQUITY INDEX PORTFOLIO
---------------------------- --------------------------- --------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 11,009,665 $ 10,285,868 $ 29,463,188 $ 15,471,581 $ 3,994,742 $ 3,051,998 $ 9,754,995 $ 5,656,346
5,117,055 871,659 19,038,590 12,420,138 40,626,845 12,181,263 3,560,666 15,194,950
(291,468) (1,749,535) 2,081,485 3,447,403 45,313,202 16,443,384 159,119,452 41,228,418
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
15,835,252 9,407,992 50,583,263 31,339,122 89,934,789 31,676,645 172,435,113 62,079,714
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,285,868) (26,828,709) (15,469,541) (3,997,147) (3,050,479) (10,027,043) (5,656,346)
-- (326,079) -- (432,568) -- -- -- (4,427)
-- -- (13,814,454) (11,348,200) (31,316,552) (11,682,352) (3,323,415) (15,093,505)
-- -- -- -- -- -- -- (7,525)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,611,947) (40,643,163) (27,250,309) (35,313,699) (14,732,831) (13,350,458) (20,761,803)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- (2,657,724) (2,040) (65,287) -- (648) --
-- -- -- (15,935) -- -- -- --
-- -- (2,518,666) (908) (1,815,517) -- (392) --
-- -- -- (18,516) -- -- -- --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- (5,176,390) (37,399) (1,880,804) -- (1,040) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(11,132,504) (10,611,947) (45,819,553) (27,287,708) (37,194,503) (14,732,831) (13,351,498) (20,761,803)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
49,175,799 27,205,153 161,350,185 71,897,677 251,418,234 111,512,120 450,997,869 230,679,439
11,132,504 10,611,947 40,643,163 27,250,309 35,313,699 14,732,831 13,350,458 20,761,803
(16,801,045) (39,032,520) (52,652,236) (21,997,075) (17,464,089) (9,161,198) (66,043,438) (72,295,253)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
43,507,258 (1,215,420) 149,341,112 77,150,911 269,267,844 117,083,753 398,304,889 179,145,989
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- 63,018,257 677,158 31,791,055 -- 137,857 --
-- -- 5,176,390 37,399 1,880,804 -- 1,040 --
-- -- (534,056) -- (4,484) -- (35,558) --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
-- -- 67,660,591 714,557 33,667,375 -- 103,339 --
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
43,507,258 (1,215,420) 217,001,703 77,865,468 302,935,219 117,083,753 398,408,228 179,145,989
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
48,210,006 (2,419,375) 221,765,413 81,916,882 355,675,505 134,027,567 557,491,843 220,463,900
155,023,472 157,442,847 200,045,465 118,128,583 232,080,388 98,052,821 386,249,181 165,785,281
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$203,233,478 $155,023,472 $421,810,878 $200,045,465 $587,755,893 $232,080,388 $943,741,024 $386,249,181
============ ============ ============ ============ ============ ============ ============ ============
</TABLE>
6
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
COMMON STOCK PORTFOLIO GLOBAL PORTFOLIO
------------------------------ -----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income............................... $ 55,815,739 $ 48,811,771 $ 11,050,762 $ 10,849,353
Realized gain--net.................................. 983,715,133 587,208,099 101,771,496 44,997,037
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net........................ 1,046,218,790 636,307,007 14,062,715 60,383,165
-------------- -------------- -------------- ------------
Net increase (decrease) in net assets from
operations......................................... 2,085,749,662 1,272,326,877 126,884,973 116,229,555
-------------- -------------- -------------- ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE
1):
Class IA:
Dividends from net investment income............... (43,806,963) (44,580,327) (23,003,562) (10,849,259)
Dividends in excess of net investment income ...... -- -- -- (4,499,020)
Distributions from realized gains.................. (700,688,717) (587,198,121) (76,503,591) (42,474,239)
Distributions in excess of realized gains ......... -- (71,434,343) -- --
Tax return of capital distributions................ -- (988,016) -- (220,411)
-------------- -------------- -------------- ------------
Total Class IA dividends and distributions ......... (744,495,680) (704,200,807) (99,507,153) (58,042,929)
-------------- -------------- -------------- ------------
Class IB:
Dividends from net investment income............... (241,911) (326) (319,694) (94)
Dividends in excess of net investment income ...... -- (4,564) -- (2,076)
Distributions from realized gains.................. (16,923,582) (9,978) (1,359,092) (1,502)
Distributions in excess of realized gains ......... -- (62,273) -- (4,502)
Tax return of capital distributions................ -- (108) -- (31)
-------------- -------------- -------------- ------------
Total Class IB dividends and distributions ......... (17,165,493) (77,249) (1,678,786) (8,205)
-------------- -------------- -------------- ------------
Decrease in net assets from dividends and
distributions...................................... (761,661,173) (704,278,056) (101,185,939) (58,051,134)
-------------- -------------- -------------- ------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold........................................ 1,034,152,489 756,034,799 241,147,160 255,537,439
Shares issued in reinvestment of dividends and
distributions..................................... 744,495,680 704,200,807 99,507,153 58,042,929
Shares redeemed.................................... (394,260,503) (282,642,349) (159,826,842) (60,861,388)
-------------- -------------- -------------- ------------
Total Class IA transactions......................... 1,384,387,666 1,177,593,257 180,827,471 252,718,980
-------------- -------------- -------------- ------------
Class IB:
Shares sold........................................ 209,141,659 1,237,252 21,767,932 285,485
Shares issued in reinvestment of dividends and
distributions..................................... 17,165,493 77,249 1,678,786 8,205
Shares redeemed.................................... (643,153) -- (1,917,712) --
-------------- -------------- -------------- ------------
Total Class IB transactions......................... 225,663,999 1,314,501 21,529,006 293,690
-------------- -------------- -------------- ------------
Net increase in net assets derived from share
transactions....................................... 1,610,051,665 1,178,907,758 202,356,477 253,012,670
-------------- -------------- -------------- ------------
INCREASE IN NET ASSETS............................... 2,934,140,154 1,746,956,579 228,055,511 311,191,091
NET ASSETS, BEGINNING OF PERIOD...................... 6,626,633,579 4,879,677,000 997,331,484 686,140,393
-------------- -------------- -------------- ------------
NET ASSETS, END OF PERIOD*........................... $9,560,773,733 $6,626,633,579 $1,225,386,995 $997,331,484
============== ============== ============== ============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $8,941,474 and $(194,316) for the Alliance Common Stock
Portfolio; $451,087 and $(3,212,284) for the Alliance Global Portfolio;
$(1,256,432) and $(614,431) for the Alliance International Portfolio;
$(113,631) and $(58,479) for the Alliance Aggressive Stock Portfolio;
$35,314 and $9,815 for the Alliance Conservative Investors Portfolio,
as of December 31, 1997 and December 31, 1996, respectively, and $(461)
for the Alliance Small Cap Growth Portfolio as of December 31, 1997.
** Commencement of Operations.
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
ALLIANCE ALLIANCE SMALL CAP GROWTH CONSERVATIVE INVESTORS
INTERNATIONAL PORTFOLIO AGGRESSIVE STOCK PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------- ------------------------------- ---------------- ----------------------------
YEAR ENDED YEAR ENDED MAY 1, 1997** TO YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1997 1996
------------- ------------ --------------- -------------- ---------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,609,964 $ 1,072,074 $ 4,499,773 $ 8,075,002 $ 16,358 $ 12,201,104 $ 12,360,795
8,394,226 3,051,749 523,431,192 651,846,275 1,627,719 13,986,324 6,689,821
(15,340,188) 4,245,403 (75,825,667) (19,577,800) 743,694 10,167,050 (4,721,182)
------------- ------------ --------------- -------------- ------------ ------------ ------------
(5,335,998) 8,369,226 452,105,298 640,343,477 2,387,771 36,354,478 14,329,434
------------- ------------ --------------- -------------- ------------ ------------ ------------
(5,505,067) (1,072,074) (6,323,032) (8,075,028) (16,325) (11,954,796) (12,360,795)
-- (972,982) -- (50,994) -- -- (44,557)
(9,560,102) (2,651,391) (381,316,889) (651,842,635) (2,163,100) (9,269,071) (6,689,821)
-- -- -- (1,362,771) -- -- (396,608)
-- -- -- -- -- -- --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(15,065,169) (4,696,447) (387,639,921) (661,331,428) (2,179,425) (21,223,867) (19,491,781)
------------- ------------ --------------- -------------- ------------ ------------ ------------
(69,625) -- (8,975) -- (904) (74,433) --
-- -- -- (452) -- -- --
(161,535) -- (6,038,166) (3,630) (1,071,973) (163,419) --
-- -- -- (32,780) -- -- --
-- -- -- -- -- -- --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(231,160) -- (6,047,141) (36,862) (1,072,877) (237,852) --
------------- ------------ --------------- -------------- ------------ ------------ ------------
(15,296,329) (4,696,447) (393,687,062) (661,368,290) (3,252,302) (21,461,719) (19,491,781)
------------- ------------ --------------- -------------- ------------ ------------ ------------
204,985,168 141,011,557 1,331,662,733 1,093,061,087 154,901,196 34,060,741 50,046,532
15,065,169 4,696,447 387,639,921 661,331,428 2,179,425 21,223,868 19,491,781
(161,266,462) (26,157,811) (1,058,223,800) (568,654,477) (62,293,798) (44,876,250) (34,074,560)
------------- ------------ --------------- -------------- ------------ ------------ ------------
58,783,875 119,550,193 661,078,854 1,185,738,038 94,786,823 10,408,359 35,463,753
------------- ------------ --------------- -------------- ------------ ------------ ------------
3,841,704 -- 72,451,903 604,481 46,064,536 5,707,042 --
231,160 -- 6,047,141 36,862 1,072,877 237,851 --
(234,071) -- (608,248) -- (60,253) (107,498) --
------------- ------------ --------------- -------------- ------------ ------------ ------------
3,838,793 -- 77,890,796 641,343 47,077,160 5,837,395 --
------------- ------------ --------------- -------------- ------------ ------------ ------------
62,622,668 119,550,193 738,969,650 1,186,379,381 141,863,983 16,245,754 35,463,753
------------- ------------ --------------- -------------- ------------ ------------ ------------
41,990,341 123,222,972 797,387,886 1,165,354,568 140,999,452 31,138,513 30,301,406
151,906,835 28,683,863 3,865,869,417 2,700,514,849 -- 282,402,401 252,100,995
------------- ------------ --------------- -------------- ------------ ------------ ------------
$ 193,897,176 $151,906,835 $ 4,663,257,303 $3,865,869,417 $140,999,452 $313,540,914 $282,402,401
============= ============ =============== ============== ============ ============ ============
</TABLE>
8
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
BALANCED PORTFOLIO GROWTH INVESTORS PORTFOLIO
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 55,060,063 $ 49,871,322 $ 32,794,295 $ 25,706,114
Realized gain--net ................................. 113,021,038 128,392,470 121,986,091 131,200,343
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net ....................... 65,873,768 (3,420,061) 78,749,885 (20,549,143)
-------------- -------------- -------------- --------------
Net increase in net assets from operations ......... 233,954,869 174,843,731 233,530,271 136,357,314
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE
1):
Class IA:
Dividends from net investment income .............. (54,844,131) (49,871,322) (37,426,355) (25,705,569)
Dividends in excess of net investment income ..... -- (241,952) -- (2,082,361)
Distributions from realized gains ................. (84,244,038) (128,392,470) (84,649,354) (131,199,726)
Distributions in excess of realized gains ........ -- (2,491,886) -- (570,518)
-------------- -------------- -------------- --------------
Total Class IA dividends and distributions ........ (139,088,169) (180,997,630) (122,075,709) (159,558,174)
-------------- -------------- -------------- --------------
Class IB:
Dividends from net investment income .............. -- -- (527,651) (545)
Dividends in excess of net investment income ..... -- -- -- (2,449)
Distributions from realized gains ................. -- -- (1,840,006) (617)
Distributions in excess of realized gains ........ -- -- -- (6,239)
-------------- -------------- -------------- --------------
Total Class IB dividends and distributions ........ -- -- (2,367,657) (9,850)
-------------- -------------- -------------- --------------
Decrease in net assets from dividends and
distributions ..................................... (139,088,169) (180,997,630) (124,443,366) (159,568,024)
-------------- -------------- -------------- --------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold ....................................... 64,626,322 64,030,181 177,931,189 297,495,728
Shares issued in reinvestment of dividends and
distributions .................................... 139,088,169 180,997,630 122,075,709 159,558,174
Shares redeemed ................................... (212,348,166) (124,160,136) (80,173,883) (28,339,916)
-------------- -------------- -------------- --------------
Total Class IA transactions ........................ (8,633,675) 120,867,675 219,833,015 428,713,986
-------------- -------------- -------------- --------------
Class IB:
Shares sold ....................................... -- -- 34,376,432 468,087
Shares issued in reinvestment of dividends and
distributions .................................... -- -- 2,367,657 9,850
Shares redeemed ................................... -- -- (1,660,277) (90)
-------------- -------------- -------------- --------------
Total Class IB transactions ........................ -- -- 35,083,812 477,847
-------------- -------------- -------------- --------------
Net increase (decrease) in net assets derived from
share transactions ................................ (8,633,675) 120,867,675 254,916,827 429,191,833
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS .............................. 86,233,025 114,713,776 364,003,732 405,981,123
NET ASSETS, BEGINNING OF PERIOD ..................... 1,637,855,504 1,523,141,728 1,302,114,983 896,133,860
-------------- -------------- -------------- --------------
NET ASSETS, END OF PERIOD* .......................... $1,724,088,529 $1,637,855,504 $1,666,118,715 $1,302,114,983
============== ============== ============== ==============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment
income of $84,008 and $(190,700) for the Alliance Balanced Portfolio;
$(1,463,848) and $(1,135,946) for the Alliance Growth Investors
Portfolio, as of December 31, 1997 and December 31, 1996, respectively.
See Notes to Financial Statements.
9
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
================================================================================================
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES
Bank of California:
Due 01/21/98.......................................... $ 1,000,000 $ 996,905 5.67%
Due 01/26/98 ......................................... 8,000,000 7,969,055 5.67
-----------
TOTAL BANKERS' ACCEPTANCES (1.6%) ................... 8,965,960
-----------
CERTIFICATES OF DEPOSIT
Barclays Bank
Due 08/25/98.......................................... 10,000,000 10,002,625 5.83
Credit Suisse First Boston
Due 03/16/98 ......................................... 6,000,000 5,999,519 6.08
Morgan Guaranty Trust Co.
Due 03/19/98 ......................................... 10,000,000 10,000,695 5.95
Swiss Bank Corp.
Due 01/30/98.......................................... 10,000,000 9,998,945 6.14
Westdeutsche Landesbank
Due 07/31/98 ......................................... 5,000,000 4,999,725 5.78
-----------
TOTAL CERTIFICATES OF DEPOSIT (7.1%) ................ 41,001,509
-----------
COMMERCIAL PAPER
Abbey National North America Corp.
Due 03/02/98.......................................... 25,000,000 24,767,500 5.77
ASCC
Due 01/15/98.......................................... 11,000,000 10,975,831 5.90
Asset Backed Capital
Due 02/09/98.......................................... 12,500,000 12,424,709 5.57
Associates Corp. of North America
Due 01/02/98.......................................... 25,000,000 24,996,077 6.75
Clipper Receivables Corp.
Due 01/02/98.......................................... 25,000,000 24,996,043 6.85
CXC, Inc.
Due 02/09/98.......................................... 24,400,000 24,252,502 5.67
Dakota Funding, Inc.
Due 01/13/98.......................................... 2,000,000 1,996,233 6.06
Dresdner U.S. Finance, Inc.
Due 02/25/98.......................................... 20,000,000 19,829,500 5.79
Edison Asset Securitization
Due 02/11/98.......................................... 20,200,000 20,072,090 5.88
Falcon Asset Securitization
Due 02/25/98.......................................... 6,220,000 6,167,165 5.90
International Lease Finance Corp.
Due 01/02/98.......................................... 25,000,000 24,996,043 6.68
International Securitization
Due 03/05/98.......................................... 5,030,000 4,981,058 5.86
Koch Industries
Due 01/02/98.......................................... 25,000,000 24,996,078 6.75
Morgan Stanley Group, Inc.
Due 03/23/98.......................................... 24,200,000 23,896,169 5.82
National Citibank of Cleveland
Due 02/16/98.......................................... 25,000,000 24,833,375 5.29
National Rural Utilities Finance Corp.
Due 04/15/98.......................................... 20,000,000 19,676,834 5.83
Paccar Financial Corp.
Due 01/02/98.......................................... 12,000,000 11,998,117 6.75
Preferred Receivables Funding
Due 02/17/98.......................................... 5,050,000 5,013,211 5.89
SPARC EM Ltd.
Due 02/04/98.......................................... 25,000,000 24,868,723 5.78
10
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
================================================================================================
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ------------------------------------------------------------------------------------------------
Suntrust Bank
Due 03/09/98.......................................... $20,000,000 $ 19,793,044 5.79%
Texaco, Inc.
Due 03/12/98.......................................... 25,000,000 24,728,750 5.81
Three River Funding
Due 01/20/98.......................................... 5,313,000 5,297,410 6.17
------------
TOTAL COMMERCIAL PAPER (67.2%) ...................... 385,556,462
------------
CORPORATE NOTE (2.6%)
Beta Finance, Inc.
Due 01/30/98.......................................... 15,000,000 15,012,369 4.60
------------
TIME DEPOSIT (2.7%)
Harris Trust & Savings Bank
Due 01/02/98.......................................... 15,300,000 15,300,425 6.50
------------
U.S. GOVERNMENT AGENCIES (0.9%)
Federal Home Loan Mortgage Corp.
Due 02/12/98.......................................... 5,400,000 5,367,492 5.64
------------
VARIABLE RATE SECURITIES
Bankers Trust
Due 02/17/98(a) ...................................... 20,000,000 20,002,558 5.94
CC (USA), Inc.
Due 10/27/98(a) ...................................... 20,000,000 20,002,392 6.04
Federal Farm Credit Bank
Due 10/01/98(a) ...................................... 20,000,000 20,000,252 5.63
Federal National Mortgage Association
Due 06/18/98(a) ...................................... 20,000,000 20,009,248 5.72
------------
TOTAL VARIABLE RATE SECURITIES (14.0%) .............. 80,014,450
------------
TOTAL INVESTMENTS IN SHORT-TERM DEBT SECURITIES
(96.1%)
(Amortized Cost $551,106,796) ........................ 551,218,667
OTHER ASSETS LESS LIABILITIES (3.9%) .................. 22,416,783
------------
NET ASSETS (100.0%) ................................... $573,635,450
============
</TABLE>
- ------------
* Based on market values at the close of business on December 31, 1997.
(a) Coupon will fluctuate based upon an interest rate index. Stated due
date reflects final maturity of security.
See Notes to Financial Statements.
11
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
ASSET BACKED (4.6%)
The Money Store Home Equity
Trust:
Series 1997-C 6.355%, 10/15/03 . $ 3,506,503 $ 3,502,681
Series 1997-I 6.42%, 04/15/06 . 1,997,075 1,997,695
------------
5,500,376
------------
COLLATERALIZED MORTGAGE
OBLIGATIONS (6.7%)
Federal Home Loan Mortgage Corp.
Multi-Class Series 1434
7.0%, 08/15/21 ................. 3,150,000 3,203,140
Federal National Mortgage
Association Series 1997-M8
6.94%, 01/25/22 ................ 1,987,921 2,045,690
Residential Funding Mortgage
Securities, Inc. Series
1993-S11
7.25%, 03/25/23 ................ 2,780,248 2,787,198
------------
8,036,028
------------
MORTGAGE RELATED (3.2%)
Federal Home Loan Mortgage Corp.
GOLD
9.5%, 01/01/20 ................. 4,879 5,285
Federal National Mortgage
Association Series 1997-20
6.1485%, 03/25/27(a) ........... 3,815,421 3,802,296
------------
3,807,581
------------
U.S. GOVERNMENT & AGENCIES (74.7%)
Federal Farm Credit Corp.
6.29%, 08/24/04 ................ 4,700,000 4,764,089
Federal Home Loan Bank:
5.5%, 01/10/01 ................. 4,500,000 4,453,045
5.77%, 02/03/04 ................ 6,430,000 6,352,551
Federal Home Loan Mortgage Corp.
6.24%, 10/06/04 ................ $ 4,965,000 $ 5,027,936
Tennessee Valley Authority
6.5%, 08/20/01 ................. 5,400,000 5,511,348
U.S Treasury:
6.0% Note, 08/15/99 ............ 12,000,000 12,060,000
5.625% Note, 11/30/99 .......... 3,650,000 3,646,580
6.0% Note, 08/15/00 ............ 13,200,000 13,294,882
5.75% Note, 11/15/00 ........... 2,500,000 2,504,687
6.125% Note, 12/31/01 .......... 5,750,000 5,827,269
6.25% Note, 06/30/02 ........... 11,000,000 11,223,443
11.875% Bond, 11/15/03 ......... 6,300,000 8,193,937
6.625% Note, 05/15/07 .......... 6,550,000 6,934,812
------------
89,794,579
------------
TOTAL LONG-TERM DEBT SECURITIES (89.2%)
(Amortized Cost $105,801,659) .. 107,138,564
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (6.5%)
Federal Home Loan Mortgage Corp.
6.0%, 01/02/98 ................. 7,800,000 7,798,700
------------
TOTAL SHORT-TERM DEBT SECURITIES (6.5%)
(Amortized Cost $7,798,700) ... 7,798,700
------------
TOTAL INVESTMENTS (95.7%)
(Amortized Cost $113,600,359) .. 114,937,264
OTHER ASSETS LESS LIABILITIES (4.3%) 5,228,632
------------
NET ASSETS (100.0%) ............. $120,165,896
============
</TABLE>
- ------------
(a) Adjustable rate mortgage; stated interest rate in effect at
December 31, 1997.
See Notes to Financial Statements.
12
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS (2.8%)
CHEMICALS
Reliance Industries Ltd.
10.375%, 06/24/16+ ............. $ 5,500,000 $ 5,611,100
------------
CONSUMER NONCYCLICALS
MEDIA & CABLE
Tele-Communication, Inc.
9.80%, 02/01/12 ................ 6,530,000 8,118,161
Time Warner Entertainment Co.
8.375%, 03/15/23 ............... 5,700,000 6,504,726
Turner Broadcasting System, Inc.
8.375%, 07/01/13 ............... 2,000,000 2,244,040
------------
TOTAL CONSUMER NONCYCLICALS (8.3%) 16,866,927
------------
CREDIT SENSITIVE
BANKS (2.6%)
St. George Funding Co.
8.485%, 12/31/49+ (a) .......... 5,000,000 5,309,700
------------
FINANCIAL SERVICES (0.2%)
Goldman Sachs Group
7.2%, 11/01/06+ ................ 300,000 317,121
------------
FOREIGN GOVERNMENT (3.8%)
Government of Australia
10.0%, 10/15/07 ................ AU$ 9,250,000 7,756,812
------------
MORTGAGE RELATED (14.0%)
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 ................. $ 6,917,372 7,023,298
Federal National Mortgage
Association:
6.5%, 05/01/11 ................. 11,686,519 11,693,823
6.5%, 08/01/11 ................. 1,921,889 1,923,090
7.0%, 05/01/26 ................. 7,722,172 7,775,262
------------
28,415,473
------------
U.S. GOVERNMENT AGENCIES (14.7%)
Federal Home Loan Bank
5.77%, 12/22/99 ................ $30,000,000 $ 29,970,960
------------
U.S. GOVERNMENT (50.1%)
U.S. Treasury:
6.0% Note, 08/15/00 ............ 10,400,000 10,474,755
6.5% Note, 05/31/02 ............ 46,825,000 48,200,485
6.5% Note, 08/15/05 ............ 20,000,000 20,868,760
6.875% Note, 05/15/06 .......... 10,125,000 10,836,919
6.125% Bond, 11/15/27 .......... 11,050,000 11,353,875
------------
101,734,794
------------
TOTAL CREDIT SENSITIVE (85.4%) . 173,504,860
------------
TOTAL LONG-TERM DEBT SECURITIES (96.5%)
(Amortized Cost $194,076,702).. 195,982,887
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (1.5%)
Federal Home Loan
Mortgage Corp.
6.0%, 01/02/98 ................. 3,100,000 3,099,483
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.5%)
(Amortized Cost $3,099,483) ... 3,099,483
------------
TOTAL INVESTMENTS (98.0%)
(Amortized Cost $197,176,185) .. 199,082,370
OTHER ASSETS
LESS LIABILITIES (2.0%)......... 4,151,108
------------
NET ASSETS (100.0%) ............. $203,233,478
============
</TABLE>
<PAGE>
- ------------
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $11,237,921
or 5.5% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
See Notes to Financial Statements.
13
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
=========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER INVESTMENTS:
BUSINESS SERVICES (0.0%)
PRINTING, PUBLISHING & BROADCASTING
Pegasus Communications Corp.
(Class A) * ................... 3,384 $ 68,949
----------
CAPITAL GOODS (0.0%)
BUILDING & CONSTRUCTION
Capital Pacific Holdings,
Inc.--Warrants* ............... 11,850 17,775
----------
CONSUMER CYCLICALS
RETAIL--GENERAL (0.0%)
Eye Care Centers of America--
Warrants*+ .................... 5,000 20,000
Florists Transworld Corp.
(Class B)*+ ................... 18,750 18,750
----------
TOTAL CONSUMER CYCLICALS (0.0%) 38,750
----------
CONSUMER NONCYCLICALS
HOSPITAL SUPPLIES & SERVICES (0.0%)
Wright Medical
Technology, Inc.--Warrants* .. 618 61,645
----------
SOAPS & TOILETRIES (0.0%)
Renaissance Cosmetics--
Warrants* ..................... 2,000 19,500
----------
TOTAL CONSUMER NONCYCLICALS (0.0%) 81,145
----------
TECHNOLOGY
ELECTRONICS (0.0%)
Interactive Systems Corp.--
Warrants* ..................... 1,500 3,750
----------
TELECOMMUNICATIONS (0.1%)
Nextel Communications, Inc.
(Class A) * ................... 10,845 281,970
Optel, Inc. * .................. 10,000 0
Primus Telecommunications--
Warrants* ..................... 6,500,000 0
----------
281,970
----------
TOTAL TECHNOLOGY (0.1%) ...... 285,720
----------
TOTAL COMMON STOCKS AND
OTHER INVESTMENTS (0.1%)
(Cost $336,685) ............... 492,339
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS
CHEMICALS (1.4%)
Trans Resources, Inc.
11.875% Sr. Sub. Note
Series B, 07/01/02 ............ $5,500,000 5,775,000
---------
CHEMICALS--SPECIALTY (0.5%)
Koppers Industries, Inc.
9.875%, 12/01/07+.............. 2,000,000 2,060,000
---------
METALS & MINING (9.8%)
AE1 Holding Co.
10.0%, 11/15/07+ .............. 8,500,000 8,755,000
Acme Metals, Inc.
10.875%, 12/15/07+ ............ 5,000,000 4,900,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
Centaur Mining &
Exploration Ltd.
11.0%, 12/01/07+ ............... $4,000,000 $ 4,020,000
Glencore Nickel Proprietary Ltd.
9.0%, 12/01/14 + ............... 7,000,000 6,930,000
Great Lakes Carbon Corp.
10.0%, 01/01/06 ................ 2,500,000 2,675,000
Maxxam Group Holdings, Inc.
12.0%, 08/01/03 ................ 3,395,000 3,666,600
Park-Ohio Industries
9.25%, 12/01/07+................ 5,000,000 5,075,000
Westmin Resources Ltd.
11.0%, 03/15/07 ................ 5,000,000 5,475,000
-----------
41,496,600
-----------
PAPER (0.7%)
Bear Island Paper Co. LLC
10.0%, 12/01/07+ ............... 3,000,000 3,037,500
-----------
TOTAL BASIC MATERIALS (12.4%) . 52,369,100
-----------
BUSINESS SERVICES
PRINTING, PUBLISHING & BROADCASTING (10.0%)
American Banknote Corp.
11.25%, 12/01/07 ............... 3,000,000 3,007,500
American Lawyer Media
9.75%, 12/15/07+ ............... 2,000,000 2,030,000
Central European Media
Enterprises Ltd.
9.375%, 08/15/04 ............... 6,000,000 5,880,000
Dialog Corp. PLC
11.0%, 11/15/07+ ............... 5,000,000 5,212,500
Fox Kids Worldwide, Inc.
9.25%, 11/01/07+ ............... 7,000,000 6,790,000
Pen Tab Industries, Inc.
10.875%, 02/01/07 .............. 3,500,000 3,368,750
Radio One, Inc.
7.0%, 05/15/04(a) .............. 5,000,000 4,950,000
Supercanal Holdings SA
14.5%, 12/15/07 ................ 2,162,923 2,125,423
Telemundo Group, Inc.
7.0%, 02/15/06(a) .............. 8,235,000 8,646,750
-----------
42,010,923
-----------
PROFESSIONAL SERVICES (1.6%)
Scotsman Group, Inc.
8.625%, 12/15/07 ............... 4,000,000 4,000,000
T/SF Communications Corp.
10.375%, 11/01/07 .............. 3,000,000 2,985,000
-----------
6,985,000
-----------
TRUCKING, SHIPPING (1.2%)
Navigator Gas Transport
10.5%, 06/30/07+ ............... 4,850,000 5,116,750
-----------
TOTAL BUSINESS SERVICES (12.8%) 54,112,673
-----------
CAPITAL GOODS
AEROSPACE (1.0%)
Stellex Industries, Inc.
9.5%, 11/01/07+ ................ 4,000,000 4,040,000
-----------
BUILDING & CONSTRUCTION (5.3%)
Airxcel, Inc.
11.0%, 11/15/07+ ............... 4,000,000 4,090,000
GS Superhighway Holdings
10.25%, 08/15/07+............... 10,000,000 8,750,000
14
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
MMI Products, Inc.
11.25%, 04/15/07 ............... $ 4,000,000 $ 4,360,000
Werner Holdings Co., Inc.
10.0%, 11/15/07+................ 5,000,000 5,137,500
-----------
22,337,500
-----------
MACHINERY (1.6%)
High Voltage Engineering
10.5%, 08/15/04+................ 6,500,000 6,776,250
-----------
TOTAL CAPITAL GOODS (7.9%) .... 33,153,750
-----------
CONSUMER CYCLICALS
AUTO RELATED (3.1%)
Advanced Accessory Systems
9.75%, 10/01/07+................ 2,700,000 2,662,875
Safety Components
International, Inc.
10.125%, 07/15/07 .............. 3,500,000 3,605,000
United Auto Group, Inc.
11.0%, 07/15/07+ ............... 7,000,000 6,895,000
-----------
13,162,875
-----------
HOUSEHOLD FURNITURE, APPLIANCES (1.0%)
Sealy Mattress Co.
9.875%, 12/15/07+ .............. 4,100,000 4,197,375
-----------
LEISURE RELATED (5.8%)
Discovery Zone--Units
13.5%, 08/01/02 (b)+ ........... 3,500,000 3,648,750
Hedstrom Corp.
10.0%, 06/01/07+ ............... 6,000,000 6,052,500
Penn National Gaming, Inc.
10.625%, 12/15/04+ ............. 3,000,000 3,105,000
Riviera Holdings Corp.
10.0%, 08/15/04+ ............... 3,000,000 2,977,500
Trump Atlantic City Associates
11.25%, 05/01/06 ............... 4,500,000 4,443,750
Waterford Gaming LLC
12.75%, 11/15/03................ 4,000,000 4,400,000
-----------
24,627,500
-----------
RETAIL--GENERAL (0.6%)
Pantry, Inc.
12.0%, 11/15/00 ................ 2,150,000 2,316,625
-----------
TOTAL CONSUMER CYCLICALS (10.5%) 44,304,375
-----------
CONSUMER NONCYCLICALS
CONTAINERS (2.7%)
Anchor Glass
11.25%, 04/01/05+ .............. 4,000,000 4,300,000
MVE, Inc.
12.5%, 02/15/02 ................ 2,000,000 1,970,000
Riverwood International Corp.
10.625%, 08/01/07+ ............. 5,000,000 5,062,500
-----------
11,332,500
-----------
DRUGS (1.1%)
Schein Pharmaceutical
8.906%, 12/15/04+(c) ........... 5,000,000 4,887,500
-----------
FOODS (4.8%)
Cuddy International Corp.
10.75%, 12/01/07+ .............. 4,000,000 4,025,000
Imperial Holly Corp.
9.75%, 12/15/07+................ 5,000,000 5,040,625
Richmont Marketing Special
10.125%, 12/15/07+ ............. $ 3,000,000 $ 3,045,000
Specialty Foods Corp.
11.125%, 10/01/02 .............. 8,000,000 8,080,000
-----------
20,190,625
-----------
RETAIL--FOODS (0.5%)
Digiorgio Corp.
10.0%, 06/15/07 ................ 2,000,000 1,970,000
-----------
TOTAL CONSUMER NONCYCLICALS (9.1%) 38,380,625
-----------
CREDIT SENSITIVE
FINANCIAL SERVICES (2.9%)
Metris Companies, Inc.
10.0%, 11/01/04+ ............... 10,000,000 10,225,000
Wilshire Financial
Services Group
13.0%, 08/15/04................. 2,000,000 2,035,000
-----------
TOTAL CREDIT SENSITIVE (2.9%) 12,260,000
-----------
ENERGY
OIL--DOMESTIC (4.7%)
Transamerican Energy
11.5%, 06/15/02+ ............... 13,000,000 13,065,000
TransTexas Gas Corp.
13.75%, 12/31/01 ............... 5,829,000 6,513,908
-----------
19,578,908
-----------
OIL--INTERNATIONAL (1.9%)
Hurricane Hydrocarbons
11.75%, 11/01/04+ .............. 8,000,000 8,040,000
-----------
OIL--SUPPLIES & CONSTRUCTION (1.5%)
Celestica International, Inc.
10.5%, 12/31/06 ................ 2,500,000 2,646,875
Deeptech International, Inc.
12.0%, 12/15/00 ................ 3,500,000 3,696,875
-----------
6,343,750
-----------
TOTAL ENERGY (8.1%) ............ 33,962,658
-----------
TECHNOLOGY
ELECTRONICS (4.8%)
Details, Inc.
10.0%, 11/15/05+................ 4,000,000 4,110,000
Interactive Systems, Inc.
Zero Coupon, 08/01/03(d) ....... 1,500,000 525,000
International Logistics Ltd.
9.75%, 10/15/07+ ............... 6,000,000 5,940,000
Sullivan Graphics, Inc.
12.75%, 08/01/05 ............... 5,000,000 5,050,000
Unisys Corp.
11.75%, 10/15/04 ............... 4,000,000 4,580,000
-----------
20,205,000
-----------
TELECOMMUNICATIONS (20.7%)
American Telecasting, Inc.
Zero Coupon, 08/15/05(d) ....... 5,000,000 1,500,000
EchoStar Communications Corp.
12.5%, 07/01/02+ ............... 7,000,000 7,577,500
GST Telecommunications, Inc.
12.75%, 11/15/07 ............... 5,000,000 5,225,000
Ionica Group PLC
Zero Coupon, 05/01/07(d) ....... 13,000,000 5,200,000
15
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
Iridium LLC/Capital Corp.
14.0%, 07/15/05 ................ $12,000,000 $ 13,110,000
Knology Holdings, Inc.
Zero Coupon, 10/15/07(d) ....... 15,000,000 8,062,500
Microcell
Telecommunications, Inc.
Zero Coupon, 06/01/06(d) ....... 10,000,000 6,750,000
Netia Holdings B.V.:
Zero Coupon, 11/01/07+(d) ..... 3,000,000 1,710,000
10.25%, 11/01/07+ .............. 5,000,000 4,800,000
Optel, Inc.
13.0%, 02/15/05 ................ 10,000,000 10,600,000
Orion Network Systems, Inc.
11.25%, 01/15/07 ............... 4,000,000 4,500,000
Primus Telecommunications
11.75%, 08/01/04 ............... 6,500,000 6,922,500
Winstar Equipment Corp.
12.5%, 03/15/04 ................ 10,000,000 11,150,000
------------
87,107,500
------------
TOTAL TECHNOLOGY (25.5%) ...... 107,312,500
------------
DIVERSIFIED
MISCELLANEOUS (0.7%)
Elgin National Industries
11.0%, 11/01/07+ ............... $ 3,000,000 $ 3,101,250
------------
TOTAL LONG-TERM DEBT SECURITIES (89.9%)
(Amortized Cost $371,488,588) 378,956,931
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan
Mortgage Corp.
6.0%, 01/02/98 ................ 30,000,000 29,995,000
------------
TOTAL SHORT-TERM DEBT SECURITIES (7.1%)
(Amortized Cost $29,995,000) ... 29,995,000
------------
TOTAL INVESTMENTS (97.1%)
(Cost/Amortized Cost
$401,820,273)................... 409,444,270
OTHER ASSETS
LESS LIABILITIES (2.9%)......... 12,366,608
------------
NET ASSETS (100.0%) ............. $421,810,878
============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $197,227,625
or 46.8% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
(b) Consists of more than one class of securities traded together as a
unit; generally bonds with attached stocks or warrants.
(c) Coupon will fluctuate based upon an interest rate index. Stated
interest rate in effect at December 31, 1997.
(d) Debt security initially issued in zero coupon form which converts to
coupon form at a specific rate and date.
See Notes to Financial Statements.
16
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (1.6%)
Dupont (E.I.) de Nemours & Co. .. 158,000 $ 9,489,875
-----------
CHEMICALS--SPECIALTY (0.6%)
Praxair, Inc. ................... 77,000 3,465,000
-----------
TOTAL BASIC MATERIALS (2.2%) .. 12,954,875
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (2.6%)
USA Waste Services, Inc.* ...... 113,295 4,446,829
Waste Management, Inc. .......... 390,000 10,725,000
-----------
15,171,829
-----------
PRINTING, PUBLISHING &
BROADCASTING (3.3%)
Belo (A.H.) Corp. (Series A) ... 96,000 5,388,000
Gannett Co. ..................... 82,000 5,068,625
New York Times Co. (Class A) ... 41,000 2,711,125
Reuters Holdings PLC (ADR) ..... 93,000 6,161,250
-----------
19,329,000
-----------
TOTAL BUSINESS SERVICES (5.9%) 34,500,829
-----------
CAPITAL GOODS
AEROSPACE (0.6%)
General Dynamics Corp. .......... 42,000 3,630,375
-----------
ELECTRICAL EQUIPMENT (1.5%)
General Electric Co. ............ 121,000 8,878,375
-----------
MACHINERY (2.7%)
Allied Signal, Inc. ............. 72,000 2,803,500
Cooper Industries, Inc. ......... 85,000 4,165,000
Fluor Corp. ..................... 87,000 3,251,625
United Technologies Corp. ...... 77,100 5,613,844
-----------
15,833,969
-----------
TOTAL CAPITAL GOODS (4.8%) .... 28,342,719
-----------
CONSUMER CYCLICALS
AIRLINES (1.7%)
Delta Air Lines, Inc. ........... 39,200 4,664,800
Northwest Airlines Corp.
(Class A)* ..................... 111,000 5,314,125
-----------
9,978,925
-----------
APPAREL, TEXTILE (0.5%)
Reebok International, Inc.* .... 100,400 2,892,775
-----------
AUTOS & TRUCKS (1.3%)
Harley-Davidson, Inc. ........... 285,000 7,801,875
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.7%)
Sunbeam Corp. ................... 91,500 3,854,438
-----------
RETAIL--GENERAL (3.8%)
Dayton Hudson Corp. ............. 92,000 6,210,000
Federated Department Stores,
Inc. * ......................... 94,600 4,073,712
Home Depot, Inc. ................ 124,800 7,347,600
Sears, Roebuck & Co. ............ 103,800 4,696,950
-----------
22,328,262
-----------
TOTAL CONSUMER CYCLICALS (8.0%) 46,856,275
-----------
CONSUMER NONCYCLICALS
CONTAINERS (0.5%)
Sealed Air Corp.* ............... 44,000 $ 2,717,000
-----------
DRUGS (6.3%)
American Home Products Corp. ... 67,000 5,125,507
Centocor, Inc.* ................. 253,900 8,442,175
Genzyme Corp. (General
Division)* ..................... 70,000 1,942,500
Merck & Co., Inc. ............... 92,000 9,775,000
Schering Plough Corp. ........... 189,000 11,741,625
-----------
37,026,807
-----------
FOODS (3.4%)
Campbell Soup Co. ............... 215,000 12,496,875
Heinz (H.J.) Co. ................ 93,000 4,725,562
Tyson Foods, Inc. ............... 135,200 2,771,600
-----------
19,994,037
-----------
HOSPITAL SUPPLIES & SERVICES (1.9%)
Baxter International, Inc. ..... 61,900 3,122,081
Becton, Dickinson & Co. ......... 46,000 2,300,000
PacifiCare Health Systems, Inc.
(Class B) * .................... 115,000 6,023,125
-----------
11,445,206
-----------
SOAPS & TOILETRIES (1.7%)
Gillette Co. .................... 100,000 10,043,750
-----------
TOBACCO (4.5%)
Philip Morris Cos., Inc. ........ 238,500 10,807,031
RJR Nabisco Holdings Corp. ..... 410,000 15,375,000
-----------
26,182,031
-----------
TOTAL CONSUMER NONCYCLICALS (18.3%) 107,408,831
-----------
CREDIT SENSITIVE
BANKS (6.8%)
Chase Manhattan Corp. ........... 151,000 16,534,500
Citicorp ........................ 97,800 12,365,587
First Chicago NBD Corp. ......... 12,825 1,070,887
First Union Corp. ............... 197,000 10,096,250
-----------
40,067,224
-----------
FINANCIAL SERVICES (4.5%)
Household International, Inc. .. 57,000 7,271,062
MBNA Corp. ...................... 124,500 3,400,406
Morgan Stanley, Dean Witter,
Discover & Co. ................. 185,000 10,938,125
PMI Group, Inc. ................. 66,600 4,816,013
-----------
26,425,606
-----------
INSURANCE (5.4%)
American International Group,
Inc. ........................... 85,000 9,243,750
General Re Corp. ................ 26,400 5,596,800
Hartford Financial Services
Group, Inc. .................... 56,500 5,286,281
Hartford Life, Inc. (Class A) .. 60,000 2,718,750
PennCorp Financial Group, Inc. . 93,000 3,318,938
Travelers Group, Inc. ........... 46,500 2,505,188
Travelers Property Casualty
Corp. (Class A)................. 63,000 2,772,000
-----------
31,441,707
-----------
17
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
REAL ESTATE (0.0%)
Security Capital Group--
Warrants* ...................... 2,513 $ 13,193
------------
UTILITY--ELECTRIC (2.1%)
AES Corp.* ...................... 18,200 848,575
CMS Energy Corp. ................ 53,000 2,335,312
FPL Group, Inc. ................. 86,000 5,090,125
NIPSCO Industries, Inc. ......... 56,000 2,768,500
Pinnacle West Capital Corp. .... 36,000 1,525,500
------------
12,568,012
------------
UTILITY--TELEPHONE (1.8%)
AT&T Corp. ...................... 85,300 5,224,625
Teleport Communications Group,
Inc. (Class A)* ................ 99,700 5,471,038
------------
10,695,663
------------
TOTAL CREDIT SENSITIVE (20.6%) 121,211,405
------------
ENERGY
OIL--DOMESTIC (4.7%)
Apache Corp. .................... 210,000 7,363,125
Enron Oil & Gas Co. ............. 130,000 2,754,375
Murphy Oil Corp. ................ 91,000 4,931,063
USX-Marathon Group .............. 325,000 10,968,750
Union Pacific Resources Group,
Inc. ........................... 68,800 1,668,400
------------
27,685,713
------------
OIL--INTERNATIONAL (4.0%)
Gulf Canada Resources Ltd.* .... 345,000 2,415,000
Mobil Corp. ..................... 88,600 6,395,813
Texaco, Inc. .................... 270,400 14,703,000
------------
23,513,813
------------
OIL--SUPPLIES & CONSTRUCTION (1.2%)
Dresser Industries, Inc. ........ 125,000 5,242,187
Transocean Offshore, Inc. ...... 41,800 2,014,238
------------
7,256,425
------------
RAILROADS (0.2%)
Canadian Pacific Ltd. ........... 39,000 1,062,750
------------
TOTAL ENERGY (10.1%) ........... 59,518,701
------------
TECHNOLOGY
ELECTRONICS (3.8%)
Altera Corp.* ................... 34,800 1,152,750
Atmel Corp.* .................... 319,000 5,921,437
Cisco Systems, Inc.* ............ 144,750 8,069,812
Solectron Corp.* ................ 49,200 2,044,875
Xilinx, Inc.* ................... 145,000 5,084,063
------------
22,272,937
------------
OFFICE EQUIPMENT (1.1%)
Compaq Computer Corp. ........... 42,250 2,384,484
Hewlett-Packard Co. ............. 71,000 4,437,500
------------
6,821,984
------------
OFFICE EQUIPMENT SERVICES (3.4%)
Electronic Data Systems Corp. .. 139,200 6,116,100
First Data Corp. ................ 467,000 13,659,750
------------
19,775,850
------------
TELECOMMUNICATIONS (3.1%)
Intermedia Communications,
Inc.* .......................... 370 22,478
MCI Communications Corp. ........ 330,000 14,128,125
Scientific Atlanta, Inc. ........ 80,000 $ 1,340,000
WorldCom, Inc.* ................. 89,900 2,719,475
------------
18,210,078
------------
TOTAL TECHNOLOGY (11.4%)........ 67,080,849
------------
DIVERSIFIED
MISCELLANEOUS (2.9%)
Tyco International Ltd. ......... 195,200 8,796,200
U.S. Industries, Inc. ........... 87,000 2,620,875
Viad Corp. ...................... 130,000 2,510,625
Whitman Corp. ................... 109,000 2,840,813
------------
TOTAL DIVERSIFIED (2.9%)........ 16,768,513
------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (84.2%)
(Cost $428,916,307) ............ 494,642,997
------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.2%)
Republic Industries, Inc.
6.5% Exch. Conv. ............... 51,500 1,210,250
------------
TRUCKING, SHIPPING (0.2%)
CNF Trust I
5.0% Conv. Series A ............ 20,500 1,168,500
------------
TOTAL BUSINESS SERVICES (0.4%) 2,378,750
------------
CAPITAL GOODS (0.4%)
AEROSPACE
Loral Space & Communications
6.0% Conv. ..................... 39,200 2,410,800
------------
CONSUMER CYCLICALS (0.3%)
AIRLINES
Continental Airlines Finance
Trust 8.5% Conv. ............... 19,600 2,016,350
------------
CREDIT SENSITIVE (0.3%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A .......... 25,200 1,808,100
------------
ENERGY (0.2%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. .................... 12,500 915,625
------------
TECHNOLOGY
TELECOMMUNICATIONS (1.8%)
Intermedia Communications, Inc.:
7.0% Conv.+..................... 29,400 1,205,400
7.0% Conv. Series D ............ 26,400 1,082,400
Mobile Telecommunications
$2.25 Conv. .................... 30,850 1,033,475
Nextel Strypes Trust
7.25% Conv. .................... 55,700 1,322,875
QualComm Financial Trust:
5.75% Conv. .................... 18,300 856,669
5.75% Conv.+ ................... 28,800 1,348,200
WorldCom, Inc.
8.0% Conv. ..................... 33,200 3,481,850
-------------
TOTAL TECHNOLOGY (1.8%) ........ 10,330,869
-------------
TOTAL PREFERRED STOCKS (3.4%)
(Cost $18,227,795) ............. 19,860,494
-------------
</TABLE>
18
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.4%)
Career Horizons, Inc.
7.0% Conv., 11/01/02........... $ 835,000 $1,736,800
Personnel Group of America:
5.75% Conv., 07/01/04 ......... 120,000 136,200
5.75% Conv., 07/01/04+ ........ 375,000 425,625
----------
TOTAL BUSINESS SERVICES (0.4%) 2,298,625
----------
CAPITAL GOODS
AEROSPACE (0.2%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+.......... 660,000 843,150
----------
BUILDING & CONSTRUCTION (0.1%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+.......... 710,000 797,862
----------
MACHINERY (0.3%)
DII Group, Inc.
6.0% Conv., 10/15/02+.......... 1,100,000 1,681,625
----------
TOTAL CAPITAL GOODS (0.6%) ... 3,322,637
----------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.5%)
Cendant Corp.
4.75% Conv., 03/01/03.......... 2,265,000 3,046,425
----------
RETAIL--GENERAL (0.3%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 .......... 1,530,000 1,818,787
----------
TOTAL CONSUMER CYCLICALS (0.8%) 4,865,212
----------
CONSUMER NONCYCLICALS
DRUGS (0.7%)
MedImmune, Inc.:
7.0% Conv. Sub. Note,
07/01/03+...................... 380,000 864,025
7.0% Conv., 07/01/03........... 920,000 2,091,850
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00+ ........ 580,000 651,775
4.25% Conv., 05/31/00 ......... 475,000 533,781
----------
4,141,431
----------
HOSPITAL SUPPLIES & SERVICES (0.5%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01 .......... 1,060,000 1,081,200
6.5% Conv., 12/15/01+ ......... 465,000 474,300
RES-Care, Inc.
6.0% Conv., 12/01/04+ ......... 1,150,000 1,311,000
----------
2,866,500
----------
TOTAL CONSUMER NONCYCLICALS (1.2%) 7,007,931
----------
CREDIT SENSITIVE
FINANCIAL SERVICES (0.3%)
RAC Financial Group, Inc.:
7.25% Conv. Sub. Note,
08/15/03+ ..................... 365,000 879,650
7.25% Conv., 08/15/03 ......... 480,000 1,156,800
----------
2,036,450
----------
INSURANCE (0.3%)
Penn Treaty American Corp.:
6.25% Conv., 12/01/03 ......... $ 535,000 $ 689,481
6.25% Conv., 12/01/03+ ........ 660,000 850,575
----------
1,540,056
----------
TOTAL CREDIT SENSITIVE (0.6%) 3,576,506
----------
ENERGY
COAL & GAS PIPELINES (0.3%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 .......... 1,110,000 2,009,100
----------
OIL--SUPPLIES & CONSTRUCTION (0.6%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note,
02/15/07....................... 1,120,000 1,482,600
Parker Drilling Co.
5.5% Conv. Sub. Note,
08/01/04 ...................... 1,035,000 1,076,400
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06+ ....... 485,000 549,263
5.375% Conv., 11/15/06 ........ 345,000 390,713
----------
3,498,976
----------
TOTAL ENERGY (0.9%) ........... 5,508,076
----------
TECHNOLOGY
ELECTRONICS (4.0%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+...................... 1,680,000 2,305,800
Baan Co.:
4.5% Conv. Sub. Note,
12/15/01+...................... 845,000 1,294,962
4.5% Conv. Sub. Note,
12/15/01 ...................... 335,000 513,387
Cymer, Inc.
3.5% Conv., 08/06/04+(a) ..... 1,475,000 1,115,469
Integrated Process Equipment
6.25% Conv., 09/15/04+ ........ 2,195,000 1,819,106
Level One Communications
4.0% Conv., 09/01/04+ ......... 1,630,000 1,532,200
Photronics, Inc.
6.0% Conv., 06/01/04 .......... 2,055,000 2,355,544
Quantum Corp.
5.0% Conv., 03/01/03+ ......... 385,000 698,775
Sanmina Corp.
5.5% Conv., 08/15/02+ ......... 1,410,000 3,417,488
SCI Systems, Inc.
5.0% Conv., 05/01/06 .......... 1,795,000 3,343,188
Solectron Corp.
6.0% Conv., 03/01/06+ ......... 1,185,000 1,624,931
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ ......... 1,420,000 1,519,400
Xilinx, Inc.
5.25% Conv., 11/01/02+ ........ 1,925,000 1,862,438
----------
23,402,688
----------
19
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
TELECOMMUNICATIONS (0.3%)
Comverse Technology, Inc.:
5.75% Conv., 10/01/06 ......... $ 665,000 $ 716,537
5.75% Conv. Sub. Note,
10/01/06+...................... 1,200,000 1,293,000
------------
2,009,537
------------
TOTAL TECHNOLOGY (4.3%) ...... 25,412,225
------------
TOTAL LONG-TERM DEBT SECURITIES (8.8%)
(Amortized Cost $46,485,364) .. 51,991,212
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (3.0%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98............. 17,600,000 17,597,067
------------
TOTAL SHORT-TERM DEBT SECURITIES (3.0%)
(Amortized Cost $17,597,067) 17,597,067
------------
TOTAL INVESTMENTS (99.4%)
(Cost/Amortized Cost
$511,226,533) ................. 584,091,770
OTHER ASSETS
LESS LIABILITIES (0.6%) ...... 3,664,123
------------
NET ASSETS (100.0%) ............ $587,755,893
============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $30,366,019
or 5.2% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
20
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (2.2%)
Air Products & Chemicals, Inc. ... 13,300 $ 1,093,925
Avery Dennison Corp. .............. 12,200 545,950
Dow Chemical Co. .................. 28,300 2,872,450
Dupont (E.I.) de Nemours & Co. .... 140,600 8,444,787
Eastman Chemical Co. .............. 8,800 524,150
Ecolab, Inc. ...................... 8,900 493,394
FMC Corp.* ........................ 7,100 477,919
Goodrich (B.F.) Co. ............... 10,500 435,094
Grace (W.R.) & Co. ................ 8,800 707,850
Hercules, Inc. .................... 12,000 600,750
Millipore Corp. ................... 11,900 403,856
Monsanto Co. ...................... 73,300 3,078,600
Rohm & Haas Co. ................... 7,700 737,275
Union Carbide Corp. ............... 15,000 644,063
-----------
21,060,063
-----------
CHEMICALS--SPECIALTY (0.5%)
Great Lakes Chemical Corp. ........ 10,100 453,237
Morton International, Inc. ........ 15,700 539,688
Praxair, Inc. ..................... 19,600 882,000
Raychem Corp. ..................... 10,200 439,238
Sigma-Aldrich Corp. ............... 11,900 473,025
Southern Co. ...................... 85,000 2,199,375
-----------
4,986,563
-----------
METALS & MINING (0.7%)
Alcan Aluminium Ltd. .............. 13,400 370,175
Alcan Aluminium Ltd. (Canada) ..... 14,800 407,933
Aluminum Co. of America ........... 21,600 1,520,100
Barrick Gold Corp. ................ 52,900 985,263
Engelhard Corp. ................... 25,650 445,669
Freeport-McMoRan Copper & Gold,
Inc. (Class B) ................... 30,000 472,500
Inco Ltd. ......................... 26,000 442,000
Newmont Mining Corp. .............. 19,407 570,081
Phelps Dodge Corp. ................ 7,500 466,875
Placer Dome, Inc. ................. 47,800 606,463
Reynolds Metals Co. ............... 8,500 510,000
-----------
6,797,059
-----------
PAPER (1.0%)
Champion International Corp. ..... 11,400 516,562
Fort James Corp. .................. 22,500 860,625
Georgia Pacific Group ............. 11,100 674,325
International Paper Co. ........... 36,025 1,553,578
Kimberly Clark Corp. .............. 67,244 3,315,970
Mead Corp. ........................ 16,200 453,600
Stone Container Corp.* ............ 30,200 315,213
Temple Inland, Inc. ............... 7,700 402,806
Union Camp Corp. .................. 8,400 450,975
Westvaco Corp. .................... 14,800 465,275
Willamette Industries, Inc. ...... 13,400 431,313
-----------
9,440,242
-----------
STEEL (0.2%)
Allegheny Teledyne, Inc. .......... 20,200 522,675
Nucor Corp. ....................... 9,800 473,463
Worthington Industries, Inc. ..... 21,500 354,750
-----------
1,350,888
-----------
TOTAL BASIC MATERIALS (4.6%) .... 43,634,815
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.4%)
Browning-Ferris Industries, Inc. . 24,300 $ 899,100
Johnson Controls, Inc. ............ 9,600 458,400
Thermo Electron Corp.* ............ 17,600 783,200
Waste Management, Inc. ............ 55,600 1,529,000
-----------
3,669,700
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.2%)
CBS Corp. ......................... 2,100 61,819
Clear Channel Communications,
Inc.* ............................ 12,000 953,250
Comcast Corp. (Class A) SPL ...... 41,800 1,319,313
Deluxe Corp. ...................... 13,200 455,400
Donnelley (R.R.) & Sons Co. ...... 18,000 670,500
Dow Jones & Co., Inc. ............. 11,800 633,512
Dun & Bradstreet Corp. ............ 20,200 624,937
Gannett Co. ....................... 34,800 2,151,075
King World Productions, Inc. ..... 7,900 456,225
Knight-Ridder, Inc. ............... 10,700 556,400
McGraw-Hill Companies, Inc. ...... 12,100 895,400
New York Times Co. (Class A) ..... 11,300 747,213
Tele-Communications, Inc. (Series
A)* .............................. 62,128 1,735,701
Time Warner, Inc. ................. 68,700 4,259,400
Times Mirror Co. (Class A) ........ 11,300 694,950
Tribune Co. ....................... 14,700 915,075
U.S. West Media Group* ............ 74,500 2,151,188
Viacom, Inc. (Class A)* ........... 1,000 40,875
Viacom, Inc. (Class B)* ........... 42,300 1,752,806
-----------
21,075,039
-----------
PROFESSIONAL SERVICES (0.5%)
Block (H&R), Inc. ................. 12,800 573,600
Cognizant Corp. ................... 19,500 868,969
Interpublic Group Cos., Inc. ..... 14,800 737,225
Omnicom Group ..................... 19,600 830,550
Safety-Kleen Corp. ................ 15,600 428,025
Service Corp. International ...... 29,600 1,093,374
-----------
4,531,743
-----------
TRUCKING, SHIPPING (0.2%)
Federal Express Corp.* ............ 13,500 824,344
Laidlaw, Inc. ..................... 35,200 479,600
Ryder System, Inc. ................ 12,900 422,475
-----------
1,726,419
-----------
TOTAL BUSINESS SERVICES (3.3%) ... 31,002,901
-----------
CAPITAL GOODS
AEROSPACE (1.5%)
Boeing Co. ........................ 122,274 5,983,784
General Dynamics Corp. ............ 7,400 639,637
Lockheed Martin Corp. ............. 23,704 2,334,844
Northrop Grumman Corp. ............ 7,800 897,000
Raytheon Co. (Class A) ............ 32 1,578
Raytheon Co. (Class B) ............ 41,700 2,105,850
Rockwell International Corp. ..... 24,800 1,295,800
TRW, Inc. ......................... 14,400 768,600
-----------
14,027,093
-----------
21
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.6%)
Armstrong World Industries, Inc. .. 6,100 $ 455,975
Crane Co. ......................... 10,600 459,775
Louisiana Pacific Corp. ........... 22,800 433,200
Masco Corp. ....................... 19,400 986,975
Owens Corning ..................... 11,300 385,613
PPG Industries, Inc. .............. 21,700 1,239,613
Sherwin Williams Co. .............. 18,600 516,150
Weyerhaeuser Co. .................. 23,700 1,162,781
-----------
5,640,082
-----------
ELECTRICAL EQUIPMENT (3.8%)
Emerson Electric Co. .............. 54,700 3,087,131
General Electric Co. .............. 401,200 29,438,050
Grainger (W.W.), Inc. ............. 6,100 592,844
Thomas & Betts Corp. .............. 9,600 453,600
Westinghouse Electric Corp. ...... 84,900 2,499,244
-----------
36,070,869
-----------
MACHINERY (1.7%)
Allied Signal, Inc. ............... 69,800 2,717,837
Case Corp. ........................ 9,200 556,025
Caterpillar, Inc. ................. 46,400 2,253,300
Cooper Industries, Inc. ........... 14,700 720,300
Cummins Engine Company, Inc. ..... 7,000 413,438
Deere & Co. ....................... 31,100 1,813,519
Dover Corp. ....................... 26,800 968,150
Fluor Corp. ....................... 10,900 407,387
Harnischfeger Industries, Inc. ... 13,000 459,062
Illinois Tool Works, Inc. ......... 30,700 1,845,837
Ingersoll Rand Co. ................ 19,950 807,975
Pall Corp. ........................ 20,500 424,094
Parker-Hannifin Corp. ............. 13,150 603,256
United Technologies Corp. ......... 28,700 2,089,719
-----------
16,079,899
-----------
TOTAL CAPITAL GOODS (7.6%) ...... 71,817,943
-----------
CONSUMER CYCLICALS
AIRLINES (0.4%)
AMR Corp.* ........................ 11,300 1,452,050
Delta Air Lines, Inc. ............. 8,600 1,023,400
Southwest Airlines Co. ............ 25,050 616,856
US Airways Group, Inc.* ........... 11,000 687,500
-----------
3,779,806
-----------
APPAREL, TEXTILE (0.4%)
Fruit of the Loom, Inc. (Class A)* 18,900 484,312
Liz Claiborne, Inc. ............... 10,000 418,125
National Service Industries, Inc. 9,000 446,063
Nike, Inc. (Class B) .............. 37,800 1,483,650
VF Corp. .......................... 16,500 757,969
-----------
3,590,119
-----------
AUTO RELATED (0.5%)
Cooper Tire & Rubber Co. .......... 16,600 404,625
Dana Corp. ........................ 12,400 589,000
Eaton Corp. ....................... 8,600 767,550
Echlin, Inc. ...................... 14,100 510,244
Genuine Parts Co. ................. 19,700 668,569
Goodyear Tire & Rubber Co. ........ 16,700 1,062,537
Snap-On, Inc. ..................... 10,150 442,794
-----------
4,445,319
-----------
AUTOS & TRUCKS (1.7%)
AutoZone, Inc.* ................... 17,800 $ 516,200
Chrysler Corp. .................... 82,500 2,902,969
Ford Motor Co. .................... 146,100 7,113,244
General Motors Corp. .............. 89,200 5,407,750
Paccar, Inc. ...................... 10,400 546,000
-----------
16,486,163
-----------
<PAGE>
FOOD SERVICES, LODGING (0.8%)
Harrah's Entertainment, Inc.* .... 25,200 475,650
ITT Corp.* ........................ 13,300 1,102,237
Marriott International, Inc. ..... 14,900 1,031,825
McDonald's Corp. .................. 85,100 4,063,525
Tricon Global Restaurants, Inc.* .. 17,020 494,644
Wendy's International, Inc. ...... 21,500 517,344
-----------
7,685,225
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.3%)
Black & Decker Corp. .............. 12,400 484,375
Maytag Corp. ...................... 13,400 499,987
Newell Company .................... 20,500 871,250
Rubbermaid, Inc. .................. 16,600 415,000
Stanley Works ..................... 9,200 434,125
Whirlpool Corp. ................... 8,500 467,500
-----------
3,172,237
-----------
LEISURE RELATED (1.7%)
American Greetings Corp.
(Class A) ........................ 12,300 481,237
Brunswick Corp. ................... 17,100 518,344
Cendant Corp.* .................... 97,551 3,353,307
Disney (Walt) Co. ................. 82,400 8,162,750
Hasbro, Inc. ...................... 15,200 478,800
Hilton Hotels Corp. ............... 30,000 892,500
Mattel, Inc. ...................... 34,843 1,297,902
Mirage Resorts, Inc.* ............. 21,200 482,300
-----------
15,667,140
-----------
PHOTO & OPTICAL (0.3%)
Allergan, Inc. .................... 13,900 466,519
Eastman Kodak Company ............. 35,800 2,177,087
Polaroid Corp. .................... 9,900 482,006
-----------
3,125,612
-----------
RETAIL--GENERAL (4.1%)
Circuit City Stores-Circuit City
Group ............................ 14,000 497,875
Costco Cos., Inc.* ................ 26,300 1,173,637
CVS Corp. ......................... 21,300 1,364,531
Dayton Hudson Corp. ............... 27,000 1,822,500
Dillard's, Inc. (Class A) ......... 13,500 475,875
Federated Department Stores, Inc.* 25,900 1,115,319
Gap, Inc. ......................... 49,800 1,764,787
Harcourt General, Inc. ............ 7,800 427,050
Home Depot, Inc. .................. 90,400 5,322,300
K-Mart Corp.* ..................... 60,300 697,219
Limited, Inc. ..................... 32,800 836,400
Lowe's Cos., Inc. ................. 21,500 1,025,281
May Department Stores Co. ......... 28,800 1,517,400
Nordstrom, Inc. ................... 9,300 561,488
Penney (J.C.), Inc. ............... 30,800 1,857,625
Sears, Roebuck & Co. .............. 48,500 2,194,625
22
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Tandy Corp. ....................... 13,000 $ 501,313
TJX Cos., Inc. .................... 19,700 677,188
Toys R Us, Inc.* .................. 35,300 1,109,744
Walgreen Co. ...................... 61,000 1,913,875
Wal-Mart Stores, Inc. ............. 280,500 11,062,219
Woolworth Corp.* .................. 22,100 450,288
-----------
38,368,539
-----------
TOTAL CONSUMER CYCLICALS (10.2%) 96,320,160
-----------
CONSUMER NONCYCLICALS
BEVERAGES (3.4%)
Anheuser Busch Companies, Inc. .... 61,100 2,688,400
Brown Forman Corp. (Class B) ..... 7,600 419,900
Coca-Cola Co. ..................... 303,900 20,247,337
Pepsico, Inc. ..................... 188,700 6,875,756
Seagram Ltd. ...................... 47,300 1,528,381
-----------
31,759,774
-----------
CONTAINERS (0.2%)
Bemis, Inc. ....................... 11,100 489,094
Crown Cork & Seal Co., Inc. ...... 12,900 646,612
Owens-Illinois, Inc.* ............. 14,600 553,888
-----------
1,689,594
-----------
DRUGS (7.3%)
ALZA Corp.* ....................... 16,900 537,631
American Home Products Corp. ..... 80,100 6,127,650
Amgen, Inc.* ...................... 32,800 1,775,300
Bristol-Meyers Squibb Co. ......... 123,200 11,657,800
Lilly (Eli) & Co. ................. 137,500 9,573,437
Merck & Co., Inc. ................. 148,500 15,778,125
Pfizer, Inc. ...................... 158,900 11,847,981
Pharmacia & Upjohn, Inc. .......... 62,690 2,296,021
Schering Plough Corp. ............. 90,100 5,597,463
Warner-Lambert Co. ................ 33,400 4,141,600
-----------
69,333,008
-----------
FOODS (2.6%)
Archer Daniels Midland Co. ........ 67,262 1,458,745
Campbell Soup Co. ................. 56,700 3,295,687
ConAgra, Inc. ..................... 58,300 1,912,969
CPC International, Inc. ........... 17,700 1,911,600
General Mills, Inc. ............... 19,700 1,411,012
Heinz (H.J.) Co. .................. 45,550 2,314,509
Hershey Foods Corp. ............... 17,200 1,065,325
Kellogg Co. ....................... 50,900 2,525,912
Pioneer Hi Bred International,
Inc. ............................. 8,100 868,725
Quaker Oats Co. ................... 16,900 891,475
Ralston-Ralston Purina Group ..... 12,800 1,189,600
Rite Aid Corp. .................... 15,200 892,050
Sara Lee Corp. .................... 59,200 3,333,700
Wrigley (Wm.), Jr. Co. ............ 14,300 1,137,744
-----------
24,209,053
-----------
HOSPITAL SUPPLIES & SERVICES (3.6%)
Abbott Laboratories ............... 95,100 6,234,994
Baxter International, Inc. ........ 34,500 1,740,094
Becton, Dickinson & Co. ........... 14,400 720,000
Biomet, Inc. ...................... 19,100 489,437
Boston Scientific Corp.* .......... 23,300 1,068,887
Cardinal Health, Inc. ............. 13,400 1,006,675
Columbia/HCA Healthcare Corp. ..... 80,800 2,393,700
Guidant Corp. ..................... 17,800 1,108,050
Healthsouth Corp.* ................ 47,900 $ 1,329,225
Humana, Inc.* ..................... 20,200 419,150
Johnson and Johnson ............... 164,400 10,829,850
Mallinckrodt, Inc. ................ 11,900 452,200
Medtronic, Inc. ................... 57,800 3,023,663
Saint Jude Medical, Inc.* ......... 17,150 523,075
Tenet Healthcare Corp.* ........... 36,400 1,205,750
United Healthcare Corp. ........... 23,200 1,152,750
-----------
33,697,500
-----------
RETAIL--FOOD (0.6%)
Albertsons, Inc. .................. 30,400 1,440,200
American Stores Co. ............... 33,700 692,956
Giant Food, Inc. (Class A) ........ 13,900 468,256
Kroger Co.* ....................... 31,500 1,163,531
Supervalu, Inc. ................... 11,000 460,625
Sysco Corp. ....................... 21,500 979,594
Winn Dixie Stores, Inc. ........... 18,400 803,850
-----------
6,009,012
-----------
SOAPS & TOILETRIES (3.2%)
Avon Products, Inc. ............... 15,700 963,587
Clorox Co. ........................ 12,500 988,281
Colgate Palmolive Co. ............. 36,800 2,704,800
Gillette Co. ...................... 69,600 6,990,450
International Flavors &
Fragrances, Inc. ................. 13,000 669,500
Procter & Gamble Co. .............. 167,900 13,400,519
Unilever N.V. ..................... 79,600 4,970,025
-----------
30,687,162
-----------
TOBACCO (1.8%)
Fortune Brands, Inc. .............. 19,600 726,425
Loews Corp. ....................... 13,500 1,432,687
Philip Morris Cos., Inc. .......... 299,100 13,552,969
UST, Inc. ......................... 22,700 838,481
-----------
16,550,562
-----------
TOTAL CONSUMER NONCYCLICALS (22.7%) 213,935,665
-----------
CREDIT SENSITIVE
BANKS (8.3%)
Ahmanson (H.F.) & Co. ............. 12,000 803,250
Banc One Corp. .................... 71,900 3,905,069
Bank of New York Co., Inc. ........ 46,800 2,705,625
BankAmerica Corp. ................. 86,100 6,285,300
BankBoston Corp. .................. 18,000 1,690,875
Bankers Trust New York Corp. ..... 12,300 1,382,981
Barnett Banks, Inc. ............... 24,500 1,760,937
Chase Manhattan Corp. ............. 52,240 5,720,280
Citicorp .......................... 56,500 7,143,719
Comerica, Inc. .................... 13,000 1,173,250
CoreStates Financial Corp. ........ 25,000 2,001,562
Fifth Third Bancorp ............... 19,000 1,553,250
First Chicago NBD Corp. ........... 36,449 3,043,491
First Union Corp. ................. 77,000 3,946,250
Golden West Financial Corp. ...... 6,800 665,125
Huntington Bancshares, Inc. ...... 22,900 824,400
KeyCorp. .......................... 26,800 1,897,775
Mellon Bank Corp. ................. 31,000 1,879,375
Morgan (J.P.) & Co., Inc. ......... 22,100 2,494,538
National City Corp. ............... 26,400 1,735,800
NationsBank Corp. ................. 87,399 5,314,952
Norwest Corp. ..................... 92,000 3,553,500
23
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
PNC Bank Corp. .................... 37,700 $ 2,151,256
Republic New York Corp. ........... 6,400 730,800
State Street Corp. ................ 19,200 1,117,200
Suntrust Banks, Inc. .............. 26,200 1,870,025
U.S. Bancorp. ..................... 30,026 3,361,035
Wachovia Corp. .................... 25,000 2,028,125
Washington Mutual, Inc. ........... 30,800 1,965,425
Wells Fargo & Co. ................. 10,800 3,665,925
-----------
78,371,095
-----------
FINANCIAL SERVICES (2.5%)
American Express Co. .............. 57,700 5,149,725
Beneficial Corp. .................. 6,300 523,687
Country Wide Credit Industries,
Inc. ............................. 12,200 523,075
Equifax, Inc. ..................... 17,900 634,331
Fleet Financial Group, Inc. ...... 30,879 2,313,995
Green Tree Financial Corp. ........ 22,500 589,219
Household International, Inc. .... 13,100 1,671,069
MBIA, Inc. ........................ 11,000 734,937
MBNA Corp. ........................ 61,687 1,684,826
Merrill Lynch & Co., Inc. ......... 40,800 2,975,850
Morgan Stanley, Dean Witter,
Discover & Co. ................... 72,205 4,269,121
Schwab (Charles) Corp. ............ 31,850 1,335,709
Synovus Financial Corp. ........... 21,000 687,750
Transamerica Corp. ................ 7,600 809,400
-----------
23,902,694
-----------
INSURANCE (4.8%)
Aetna, Inc. ....................... 18,443 1,301,384
Allstate Corp. .................... 53,438 4,856,178
American General Corp. ............ 30,500 1,648,906
American International Group, Inc. 86,225 9,376,969
Aon Corp. ......................... 20,550 1,204,744
Chubb Corp. ....................... 21,200 1,603,250
CIGNA Corp. ....................... 9,100 1,574,869
Cincinnati Financial Corp. ........ 6,800 957,100
Conseco, Inc. ..................... 22,500 1,022,344
General Re Corp. .................. 9,800 2,077,600
Hartford Financial Services Group,
Inc. ............................. 14,500 1,356,656
Jefferson-Pilot Corp. ............. 8,700 677,512
Lincoln National Corp. Industries . 12,200 953,125
Marsh & McLennan Cos., Inc. ...... 20,700 1,543,444
MGIC Investment Corp. ............. 14,000 931,000
Progressive Corp. ................. 8,900 1,066,888
Providian Financial Corp. ......... 11,200 506,100
Safeco Corp. ...................... 17,100 833,625
Saint Paul Cos., Inc. ............. 10,300 845,244
SunAmerica, Inc. .................. 24,000 1,026,000
Torchmark Corp. ................... 17,000 715,063
Travelers Group, Inc. ............. 140,857 7,588,671
UNUM Corp. ........................ 16,700 908,063
USF&G Corp. ....................... 21,800 480,963
-----------
45,055,698
-----------
MORTGAGE RELATED (1.2%)
Federal National Mortgage
Association ...................... 130,600 7,452,362
Federal Home Loan Mortgage Corp. . 85,500 3,585,656
-----------
11,038,018
-----------
UTILITY--ELECTRIC (2.4%)
American Electric Power, Inc. .... 23,500 $ 1,213,187
Baltimore Gas & Electric Co. ..... 18,300 623,344
Carolina Power & Light Co. ........ 18,300 776,606
Central & South West Corp. ........ 25,600 692,800
CINergy Corp. ..................... 19,613 751,423
Consolidated Edison, Inc. ......... 29,200 1,197,200
Dominion Resources, Inc. .......... 23,100 983,194
DTE Energy Co. .................... 17,500 607,031
Duke Energy Co. ................... 44,630 2,471,386
Edison International .............. 49,300 1,340,344
Entergy Corp. ..................... 30,000 898,125
FirstEnergy Corp.* ................ 28,600 829,400
FPL Group, Inc. ................... 22,600 1,337,637
GPU, Inc. ......................... 15,000 631,875
Houston Industries, Inc. .......... 35,400 944,737
Northern States Power Co. ......... 8,300 483,475
Pacificorp. ....................... 36,800 1,005,100
Peco Energy Co. ................... 26,900 652,325
PG&E Corp. ........................ 54,400 1,655,800
PP&L Resources, Inc. .............. 20,000 478,750
Public Service Enterprise Group .. 28,800 912,600
Texas Utilities Co. ............... 29,900 1,242,719
Unicom Corporation ................ 26,900 827,175
Union Electric Co. ................ 12,700 549,275
-----------
23,105,508
-----------
UTILITY--GAS (0.4%)
Columbia Gas System, Inc. ......... 6,900 542,081
Consolidated Natural Gas Co. ..... 11,500 695,750
ENRON Corp. ....................... 38,000 1,579,375
Nicor, Inc. ....................... 11,800 497,813
-----------
3,315,019
-----------
UTILITY--TELEPHONE (5.8%)
Alltel Corp. ...................... 22,500 923,906
Ameritech Corp. ................... 67,900 5,465,950
AT&T Corp. ........................ 200,500 12,280,625
Bell Atlantic Corp. ............... 95,696 8,708,336
BellSouth Corp. ................... 122,300 6,887,019
Frontier Corp. .................... 18,500 445,156
GTE Corp. ......................... 117,900 6,160,275
SBC Communications, Inc. .......... 112,773 8,260,622
Sprint Corp. ...................... 53,100 3,112,988
U.S. West Communications Group* .. 57,500 2,594,688
-----------
54,839,565
-----------
TOTAL CREDIT SENSITIVE (25.4%) 239,627,597
-----------
ENERGY
COAL & GAS PIPELINES (0.5%)
Burlington Resources, Inc. ........ 21,830 978,257
Coastal Corp. ..................... 12,800 792,800
Pacific Enterprises ............... 13,000 489,125
Sonat, Inc. ....................... 10,600 484,950
Tenneco, Inc. ..................... 20,300 801,850
Williams Cos., Inc. ............... 39,500 1,120,813
-----------
4,667,795
-----------
OIL--DOMESTIC (1.9%)
Amerada Hess Corp. ................ 10,900 598,137
Amoco Corp. ....................... 60,400 5,141,550
24
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Anadarko Petroleum Corp. .......... 7,600 $ 461,225
Apache Corp. ...................... 12,200 427,762
Ashland, Inc. ..................... 8,300 445,606
Atlantic Richfield Co. ............ 39,400 3,156,925
Kerr McGee Corp. .................. 7,200 455,850
Occidental Petroleum Corp. ........ 39,000 1,143,188
Oryx Energy Co.* .................. 16,900 430,950
Pennzoil Co. ...................... 6,500 434,281
Phillips Petroleum Co. ............ 31,800 1,546,275
Sun Co., Inc. ..................... 11,500 483,719
Union Pacific Resources Group,
Inc. ............................. 30,608 742,244
Unocal Corp. ...................... 29,800 1,156,613
USX-Marathon Group ................ 34,700 1,171,125
USX-U.S. Steel Group .............. 13,500 421,875
-----------
18,217,325
-----------
OIL--INTERNATIONAL (5.3%)
Chevron Corp. ..................... 81,100 6,244,700
Exxon Corp. ....................... 304,700 18,643,831
Mobil Corp. ....................... 97,400 7,031,063
Royal Dutch Petroleum Co. (ADR) .. 265,600 14,392,200
Texaco, Inc. ...................... 63,700 3,463,688
-----------
49,775,482
-----------
OIL--SUPPLIES & CONSTRUCTION (1.0%)
Baker Hughes, Inc. ................ 20,500 894,312
Dresser Industries, Inc. .......... 20,900 876,494
Halliburton Co. ................... 29,800 1,547,737
Helmerich & Payne, Inc. ........... 7,000 475,125
Schlumberger Ltd. ................. 61,300 4,934,650
Western Atlas, Inc.* .............. 6,400 473,600
-----------
9,201,918
-----------
RAILROADS (0.7%)
Burlington Northern Santa Fe ..... 18,651 1,733,377
CSX Corp. ......................... 26,900 1,452,600
Norfolk Southern Corp. ............ 46,500 1,432,781
Union Pacific Corp. ............... 29,700 1,854,394
-----------
6,473,152
-----------
TOTAL ENERGY (9.4%)............... 88,335,672
-----------
TECHNOLOGY
ELECTRONICS (4.2%)
Advanced Micro Devices, Inc.* .... 25,100 450,231
AMP, Inc. ......................... 27,100 1,138,200
Applied Materials, Inc.* .......... 44,900 1,352,613
BB&T Corp. ........................ 17,100 1,095,469
Cisco Systems, Inc.* .............. 123,150 6,865,612
EMC Corp.* ........................ 60,800 1,668,200
Harris Corp. ...................... 10,300 472,512
Intel Corp. ....................... 201,300 14,141,325
ITT Industries, Inc. .............. 14,500 454,938
KLA-Tencor Corp.* ................. 13,400 517,575
LSI Logic Corp.* .................. 23,500 464,125
Micron Technology, Inc.* .......... 24,700 642,200
Motorola, Inc. .................... 73,400 4,188,388
National Semiconductor Corp.* .... 19,300 500,594
Parametric Technology Corp.* ..... 15,000 710,625
Perkin-Elmer Corp. ................ 7,200 511,650
Seagate Technology, Inc.* ......... 28,700 552,475
Siebel Systems, Inc.* ............. 27 1,129
Texas Instruments, Inc. ........... 47,300 $ 2,128,500
3Com Corp.* ....................... 42,500 1,484,844
-----------
39,341,205
-----------
OFFICE EQUIPMENT (4.1%)
Bay Networks, Inc.* ............... 24,700 631,394
Ceridian Corp.* ................... 10,800 494,775
Compaq Computer Corp. ............. 93,235 5,261,950
Dell Computer Corp.* .............. 40,800 3,427,200
Digital Equipment Corp.* .......... 18,300 677,100
Hewlett-Packard Co. ............... 128,200 8,012,500
Honeywell, Inc. ................... 15,000 1,027,500
International Business Machines
Corp. ............................ 121,100 12,662,519
Pitney Bowes, Inc. ................ 17,800 1,600,888
Sun Microsystems, Inc.* ........... 45,500 1,814,313
Unisys Corp.* ..................... 36,100 500,888
Xerox Corp. ....................... 40,100 2,959,881
-----------
39,070,908
-----------
OFFICE EQUIPMENT SERVICES (3.4%)
Adobe Systems, Inc. ............... 12,700 523,875
Automatic Data Processing, Inc. .. 35,900 2,203,362
Computer Associates International,
Inc. ............................. 66,925 3,538,659
Computer Sciences Corp.* .......... 9,200 768,200
First Data Corp. .................. 54,400 1,591,200
HBO & Co. ......................... 23,500 1,128,000
Microsoft Corp.* .................. 146,800 18,973,900
Novell, Inc.* ..................... 59,600 447,000
Oracle Corp.* ..................... 120,787 2,695,060
Silicon Graphics, Inc.* ........... 34,500 429,094
-----------
32,298,350
-----------
TELECOMMUNICATIONS (2.3%)
AirTouch Communications, Inc.* .... 61,800 2,568,562
Andrew Corp.* ..................... 19,212 461,088
Cabletron Systems, Inc.* .......... 33,000 495,000
DSC Communications Corp.* ......... 19,800 475,200
Lucent Technologies, Inc. ......... 79,094 6,317,633
MCI Communications Corp. .......... 85,300 3,651,906
Northern Telecommunications Ltd. . 32,300 2,874,700
Tellabs, Inc.* .................... 22,300 1,179,113
WorldCom, Inc.* ................... 110,700 3,348,675
-----------
21,371,877
-----------
TOTAL TECHNOLOGY (14.0%).......... 132,082,340
-----------
DIVERSIFIED
MISCELLANEOUS (1.1%)
Corning, Inc. ..................... 29,800 1,106,325
Ikon Office Solutions, Inc. ...... 16,500 464,062
Minnesota Mining & Manufacturing
Co. .............................. 51,600 4,234,425
Textron, Inc. ..................... 19,600 1,225,000
Tyco International Ltd. ........... 65,686 2,959,975
Whitman Corp. ..................... 16,300 424,819
-----------
TOTAL DIVERSIFIED (1.1%) ......... 10,414,606
-----------
TOTAL COMMON STOCKS (98.3%)
(Cost $705,933,343) .............. 927,171,699
-----------
</TABLE>
25
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
=========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT & AGENCIES
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ......... $10,500,000 $ 10,498,250
U.S. Treasury
6.0%, due 01/08/98** ....... 900,000 886,153
------------
TOTAL U.S. GOVERNMENT & AGENCIES (1.2%) 11,384,403
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.2%)
(Amortized Cost
$11,384,403)............... 11,384,403
------------
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost
$717,317,746) .............. 938,556,102
OTHER ASSETS
LESS LIABILITIES (0.5%) ... 5,184,922
------------
NET ASSETS (100.0%) ......... $943,741,024
============
</TABLE>
Financial Futures Contracts outstanding at December 31, 1997:
<TABLE>
<CAPTION>
EXPIRATION NUMBER ORIGINAL VALUE AT UNREALIZED
DESCRIPTION DATE OF CONTRACTS VALUE 12/31/97 APPRECIATION
- -------------------- ------------ -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
LONG S&P 500 INDEX* 3/98 46 $11,131,350 $11,259,650 $128,300
</TABLE>
- ------------
* Non-income producing.
** Security segregated as collateral on financial futures contracts.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
26
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (0.3%)
CHEMICALS
Monsanto Co. ..................... 725,000 $ 30,450,000
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.3%)
Waste Management, Inc. ........... 900,000 24,750,000
--------------
PRINTING, PUBLISHING &
BROADCASTING (5.1%)
CBS Corp. ........................ 595,000 17,515,313
Chris Craft Industries, Inc.
(Class B)*++ .................... 1,226,156 64,143,286
Comcast Corp. (Class A) SPL ..... 1,011,800 31,934,937
Liberty Media Group (Class A)* ... 2,600,963 94,284,909
TCI Group (Class A)* (a) ......... 5,309,026 150,311,799
Time Warner, Inc. ................ 178,900 11,091,800
U.S. West Media Group* ........... 265,000 7,651,875
Viacom, Inc. (Class B)* .......... 2,801,300 116,078,869
--------------
493,012,788
--------------
TOTAL BUSINESS SERVICES (5.4%) .. 517,762,788
--------------
CAPITAL GOODS
AEROSPACE (0.3%)
Loral Space &
Communications* (a) ............. 1,440,000 30,870,000
--------------
MACHINERY (0.1%)
UNOVA, Inc.* ..................... 288,800 4,747,150
--------------
TOTAL CAPITAL GOODS (0.4%) ...... 35,617,150
--------------
CONSUMER CYCLICALS
AIRLINES (1.9%)
AMR Corp.* ....................... 185,000 23,772,500
Delta Air Lines, Inc. ............ 769,300 91,546,700
Northwest Airlines Corp.
(Class A)* ...................... 498,300 23,856,112
UAL Corp.* ....................... 328,500 30,386,250
US Airways Group, Inc.* .......... 200,000 12,500,000
--------------
182,061,562
--------------
AUTO RELATED (1.5%)
Republic Industries, Inc.* (a) .. 5,949,500 138,697,719
--------------
AUTOS & TRUCKS (1.2%)
AutoZone, Inc.* .................. 2,590,300 75,118,700
Chrysler Corp. ................... 1,223,800 43,062,462
--------------
118,181,162
--------------
FOOD SERVICES, LODGING (1.1%)
ITT Corp.* ....................... 1,294,500 107,281,688
--------------
LEISURE RELATED (6.2%)
Carnival Corp. (Class A) ......... 37,600 2,082,100
Cendant Corp.* (a) ............... 17,123,600 588,623,750
--------------
590,705,850
--------------
RETAIL--GENERAL (3.0%)
Home Depot, Inc. ................. 2,222,000 130,820,250
Limited, Inc. .................... 2,100,500 53,562,750
Lowe's Cos., Inc. ................ 511,400 24,387,387
Sears, Roebuck & Co. ............. 600,500 27,172,625
Wal-Mart Stores, Inc. ............ 1,278,000 50,401,125
--------------
286,344,137
--------------
TOTAL CONSUMER CYCLICALS (14.9%) 1,423,272,118
--------------
CONSUMER NONCYCLICALS
DRUGS (3.6%)
Astra AB (A Shares) .............. 3,206,664 $ 55,531,720
Centocor, Inc.* .................. 44,700 1,486,275
Merck & Co., Inc. ................ 2,163,200 229,840,000
Schering Plough Corp. ............ 862,000 53,551,750
--------------
340,409,745
--------------
HOSPITAL SUPPLIES & SERVICES (2.9%)
Abbott Laboratories .............. 926,800 60,763,325
Boston Scientific Corp.* ......... 1,547,200 70,977,800
Medtronic, Inc. (a) .............. 2,425,300 126,873,506
United Healthcare Corp. (a) ..... 448,500 22,284,844
--------------
280,899,475
--------------
TOBACCO (5.1%)
Loews Corp. ...................... 2,068,500 219,519,562
Philip Morris Cos., Inc. (a) .... 5,967,100 270,384,219
--------------
489,903,781
--------------
TOTAL CONSUMER NONCYCLICALS (11.6%) 1,111,213,001
--------------
CREDIT SENSITIVE
BANKS (3.7%)
Chase Manhattan Corp. ............ 1,762,868 193,034,046
First Union Corp. ................ 2,010,000 103,012,500
NationsBank Corp. ................ 965,000 58,684,062
--------------
354,730,608
--------------
FINANCIAL SERVICES (7.2%)
American Express Co. (a) ......... 2,850,400 254,398,200
Fleet Financial Group, Inc. ..... 192,100 14,395,494
Household International, Inc. ... 180,800 23,063,300
MBNA Corp. (a) ................... 9,762,525 266,638,964
Morgan Stanley, Dean Witter,
Discover & Co. .................. 1,113,166 65,815,940
PMI Group, Inc. .................. 823,700 59,563,806
--------------
683,875,704
--------------
INSURANCE (11.2%)
Allstate Corp. ................... 1,346,647 122,376,546
American International Group,
Inc. ............................ 3,510,075 381,720,656
Hartford Financial Services
Group, Inc. ..................... 808,600 75,654,638
Progressive Corp. ................ 599,900 71,913,012
Travelers Group, Inc. (a) ........ 7,853,498 423,107,178
---------------
1,074,772,030
---------------
MORTGAGE RELATED (0.3%)
Federal National Mortgage
Association ..................... 543,000 30,984,938
---------------
REAL ESTATE (1.7%)
CBL & Associates
Properties, Inc. ................ 1,007,200 24,865,250
Macerich Co. ..................... 717,500 20,448,750
Manufactured Home Communities,
Inc. ............................ 33,000 891,000
Regency Realty Corp. ............. 128,700 3,563,381
Simon Debartolo Group, Inc. ..... 1,443,000 47,168,063
Spieker Properties, Inc. ......... 1,373,400 58,884,525
Summit Properties, Inc. .......... 464,100 9,804,112
---------------
165,625,081
---------------
UTILITY--TELEPHONE (3.2%)
AT&T Corp. ....................... 500,000 30,625,000
BellSouth Corp. .................. 10,824 609,527
27
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
Telecomunicacoes Brasileiras
S.A.--Telebras (ADR) ............ 422,300 $ 49,171,556
Teleport Communications Group,
Inc. (Class A)*++ (a) ........... 4,011,000 220,103,625
--------------
300,509,708
--------------
TOTAL CREDIT SENSITIVE (27.3%) 2,610,498,069
--------------
ENERGY
OIL--DOMESTIC (0.3%)
Union Pacific Resources
Group, Inc. ..................... 1,211,677 29,383,167
--------------
OIL--SUPPLIES & CONSTRUCTION (4.7%)
BJ Services Co.* (a) ............. 1,171,800 84,296,363
Baker Hughes, Inc. ............... 830,000 36,208,750
Dresser Industries, Inc. ......... 1,507,300 63,212,394
Halliburton Co. .................. 2,428,700 126,140,606
Nabors Industries, Inc.* ......... 729,500 22,933,656
Rowan Cos., Inc.* ................ 200,000 6,100,000
Santa Fe International Corp. (a) 286,900 11,673,244
Schlumberger Ltd. ................ 109,100 8,782,550
Transocean Offshore, Inc. ........ 1,400,000 67,462,500
Western Atlas, Inc.* ............. 338,800 25,071,200
--------------
451,881,263
--------------
RAILROADS (1.3%)
Canadian Pacific Ltd. ............ 2,673,300 72,847,425
Union Pacific Corp. .............. 728,371 45,477,664
--------------
118,325,089
--------------
TOTAL ENERGY (6.3%) ............. 599,589,519
--------------
TECHNOLOGY
ELECTRONICS (12.8%)
Altera Corp.* (a) ................ 300,000 9,937,500
Applied Magnetics Corp.* ......... 225,000 2,503,125
Cisco Systems, Inc.* (a) ......... 8,986,500 500,997,375
EMC Corp.* (a) ................... 1,300,000 35,668,750
Intel Corp. (a) .................. 1,750,000 122,937,500
National Semiconductor Corp.* ... 1,450,000 37,609,375
Network Associates, Inc.* (a) ... 1,550,000 81,956,250
Solectron Corp.* (a) ............. 600,000 24,937,500
Sterling Commerce, Inc.* (a) .... 2,033,582 78,165,808
Teradyne, Inc.* (a) .............. 450,000 14,400,000
Texas Instruments, Inc. (a) ..... 2,640,000 118,800,000
3Com Corp.* (a) .................. 5,610,900 196,030,819
--------------
1,223,944,002
--------------
OFFICE EQUIPMENT (2.6%)
Ceridian Corp.*++ ................ 3,815,000 174,774,688
Sterling Software, Inc.* ......... 586,200 24,034,200
Xerox Corp. (a) .................. 659,500 48,679,344
--------------
247,488,232
--------------
OFFICE EQUIPMENT SERVICES (0.6%)
First Data Corp. (a) ............. 1,400,000 40,950,000
Fore Systems, Inc.* .............. 101,400 1,546,350
Oracle Corp.* (a) ................ 650,150 14,506,472
--------------
57,002,822
--------------
TELECOMMUNICATIONS (10.3%)
ADC Telecommunications,
Inc.* (a) ....................... 750,000 31,312,500
AirTouch Communications, Inc.* ... 894,600 37,181,812
Ascend Communications,
Inc.* (a) ....................... 250,000 6,125,000
Cabletron Systems, Inc.* ......... 550,000 $ 8,250,000
DSC Communications Corp.* (a) .... 5,866,100 140,786,400
Lucent Technologies, Inc. (a) ... 300,000 23,962,500
MCI Communications Corp. (a) .... 3,567,300 152,725,031
Mannesmann AG (ADR) .............. 143,700 72,505,272
Nokia Corp. (ADR) ................ 200,000 14,000,000
TCI Ventures Group* (a) .......... 2,998,710 83,776,461
Tellabs, Inc.* ................... 585,000 30,931,875
WorldCom, Inc.* (a) .............. 12,706,004 384,356,621
--------------
985,913,472
--------------
TOTAL TECHNOLOGY (26.3%) ........ 2,514,348,528
--------------
DIVERSIFIED
MISCELLANEOUS (1.0%)
Anixter International, Inc.* .... 633,734 10,456,611
Tyco International Ltd. .......... 1,873,336 84,417,203
--------------
TOTAL DIVERSIFIED (1.0%) ........ 94,873,814
--------------
TOTAL COMMON STOCKS (93.5%)
(Cost $6,267,252,116)............ 8,937,624,987
--------------
PREFERRED STOCKS:
BUSINESS SERVICES (0.1%)
ENVIRONMENTAL CONTROL
Republic Industries, Inc.
6.5% Exch. Conv. ................ 470,400 11,054,400
--------------
TECHNOLOGY (0.5%)
TELECOMMUNICATIONS
WorldCom, Inc.
8.0% Conv. ...................... 487,000 51,074,125
--------------
TOTAL PREFERRED STOCKS (0.6%)
(Cost $46,139,690) .............. 62,128,525
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
CERTIFICATES OF DEPOSIT (0.3%)
Deutsche Bank
5.75%, due 01/20/98 ............. $25,000,000 24,997,471
-------------
COMMERCIAL PAPER
Associates Corp. of
North America
6.75%, due 01/02/98 ............. 40,000,000 39,992,500
Bank One Columbus
6.5%, due 01/02/98 .............. 12,000,000 11,997,833
Bank of New York
5.8%, due 01/30/98 .............. 25,000,000 24,883,195
Coca Cola Co.
6.5%, due 01/02/98 .............. 20,000,000 19,996,388
CXC, Inc.
6.75%, due 01/02/98 ............. 50,000,000 49,990,625
Edison Asset Securitization
5.84%, due 02/12/98 ............. 4,000,000 3,972,929
Florida Power Corp.
6.4%, due 01/02/98 .............. 20,000,000 19,996,444
International Lease
Finance Corp.
6.68%, due 01/02/98 ............. 700,000 699,870
Koch Industries
6.75%, due 01/02/98 ............. 70,000,000 69,986,908
Province of Quebec
5.68%, due 01/12/98 ............. 20,000,000 19,965,290
-------------
TOTAL COMMERCIAL PAPER (2.7%) 261,481,982
-------------
</TABLE>
28
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
TIME DEPOSITS
Bank of Montreal
4.875%, due 01/02/98.......... $287,200,000 $ 287,200,000
Harris Trust & Savings Bank
6.5%, due 01/02/98............ 15,000,000 15,000,000
--------------
TOTAL TIME DEPOSITS (3.2%) .. 302,200,000
--------------
U.S. GOVERNMENT AGENCIES (1.4%)
Federal Home Loan
Mortgage Corp.
6.0%, due 01/02/98............ 137,000,000 136,977,167
--------------
TOTAL SHORT-TERM DEBT SECURITIES (7.6%)
(Amortized Cost
$725,656,620)................. 725,656,620
--------------
TOTAL INVESTMENTS (101.7%)
(Cost/Amortized Cost $7,039,048,426) 9,725,410,132
--------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS(b)
------------
<S> <C> <C>
CALL OPTIONS WRITTEN*(c):
ADC Telecommunications, Inc.
January @ $37.0625 ......... 2,500 (1,295,000)
Altera Corp.
February @ $34.00........... 3,000 (681,000)
American Express Co.:
January @ $78.25 ........... 3,000 (3,426,000)
January @ $78.375 .......... 2,000 (2,272,000)
January @ $79.00 ........... 2,500 (2,600,000)
January @ $80.25 ........... 2,000 (1,956,000)
February @ $85.875 ......... 2,000 (1,084,000)
February @ $86.75 .......... 3,000 (1,668,000)
February @ $87.00 .......... 1,500 (810,000)
February @ $88.50 .......... 2,000 (780,000)
February @ $88.875 ......... 2,500 (880,000)
February @ $90.50 .......... 2,500 (830,000)
February @ $90.75 .......... 2,000 (606,000)
Ascend Communications, Inc.
January @ $33.75............ 2,500 (15,000)
BJ Services Co.:
January @ $73.50 ........... 2,000 (466,000)
February @ $69.00 .......... 2,000 (1,444,000)
March @ $66.22 ............. 500 (451,500)
March @ $67.61 ............. 1,100 (517,000)
Cendant Corp.:
January @ $30.50 ........... 1,500 (611,085)
January @ $31.50 ........... 5,000 (1,625,000)
February @ $32.375 ......... 5,000 (1,515,000)
February @ $32.42 .......... 3,000 (931,800)
February @ $33.125 ......... 3,000 (763,320)
March @ $32.625 ............ 7,500 (2,348,000)
Cisco Systems, Inc.:
February @ $53.125 ......... 3,000 (1,617,000)
February @ $53.75 .......... 7,500 (4,072,500)
February @ $89.25........... 4,500 (765,000)
DSC Communications Corp.:
January @ $20.00 ........... 3,000 (1,212,000)
January @ $24.00 ........... 2,500 (37,500)
January @ $26.625........... 2,500 (15,000)
EMC Corp.
January @ $29.125........... 2,000 (174,000)
</TABLE>
<TABLE>
<CAPTION>
==============================================================
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
First Data Corp.:
January @ $29.375 .......... 3,000 $ (327,000)
January @ $29.5625 ......... 2,500 (300,000)
February @ $25.50 .......... 3,000 (1,329,000)
February @ $28.5625 ........ 3,000 (510,000)
March @ $26.75 ............. 2,500 (935,000)
Intel Corp.:
January @ $70.25 ........... 3,000 (1,008,000)
January @ $74.375 .......... 1,500 (156,000)
January @ $76.625 .......... 3,000 (135,000)
January @ $77.00............ 2,000 (62,000)
January @ $78.00 ........... 2,000 (76,000)
March @ $70.50 ............. 1,000 (477,000)
Loral Space & Communications:
January @ $20.625 .......... 2,000 (268,000)
January @ $20.75 ........... 3,500 (406,000)
January @ $21.50 ........... 1,900 (112,100)
January @ $22.125 .......... 3,000 (30,000)
March @ $20.875 ............ 2,000 (322,000)
Lucent Technologies, Inc.
February @ $77.25 .......... 3,000 (2,028,300)
MBNA Corp.:
January @ $26.75 ........... 3,000 (324,000)
January @ $26.875 .......... 4,500 (495,000)
January @ $27.125 .......... 3,750 (210,000)
January @ $29.25 ........... 4,500 (189,000)
February @ $28.6875 ........ 2,500 (170,000)
February @ $29.00........... 3,000 (321,000)
MCI Communications Corp.:
January @ $36.4375 ......... 2,500 (1,670,000)
January @ $40.75 ........... 2,500 (642,500)
January @ $41.50............ 2,500 (577,500)
Medtronic, Inc.:
January @ $46.50 ........... 4,000 (2,376,000)
February @ $49.00 .......... 4,000 (1,936,000)
February @ $49.25 .......... 5,000 (2,377,200)
February @ $51.125 ......... 3,000 (910,230)
March @ $50.375 ............ 2,500 (1,037,500)
Network Associates, Inc.:
January @ $49.875 .......... 2,500 (1,287,500)
February @ $46.00 .......... 2,500 (2,042,500)
February @ $49.625 ......... 2,000 (1,162,000)
February @ $50.250 ......... 3,500 (2,194,500)
March @ $50.375 ............ 3,000 (1,911,000)
March @ $51.375 ............ 2,000 (1,174,000)
Oracle Corp.:
January @ $35.75 ........... 2,000 (30,000)
February @ $23.125 ......... 4,500 (624,000)
Philip Morris Cos., Inc.:
January @ $40.9375 ......... 2,500 (1,207,500)
January @ $41.125 .......... 2,000 (843,980)
January @ $41.25 ........... 2,000 (862,000)
January @ $41.50 ........... 3,000 (1,371,000)
January @ $41.625 .......... 2,500 (970,000)
January @ $41.78 ........... 2,000 (926,000)
February @ $43.875 ......... 3,500 (945,000)
February @ $44.50 .......... 2,500 (615,000)
February @ $45.00 .......... 3,000 (603,000)
February @ $45.25 .......... 3,500 (771,500)
February @ $45.4275 ........ 2,000 (528,000)
February @ $45.6875......... 2,500 (352,500)
29
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
===========================================================
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- -----------------------------------------------------------
Republic Industries, Inc.:
January @ $26.9375 ........... 3,000 $ (6,660)
January @ $27.50 ............. 2,500 (137,500)
January @ $27.5625 ........... 3,000 (159,000)
January @ $30.875 ............ 2,500 (37,500)
February @ $24.875 ........... 1,500 (186,000)
February @ $25.00 ............ 2,000 (239,940)
February @ $25.125 ........... 2,000 (249,960)
February @ $26.5625 .......... 3,500 (273,805)
Santa Fe International Corp.
February @ $38.00 ............ 2,000 (910,000)
Solectron Corp.:
January @ $33.875 ............ 2,500 (1,950,000)
February @ $29.875 ........... 1,000 (1,201,000)
February @ $38.00 ............ 2,500 (1,347,500)
Sterling Commerce, Inc.:
January @ $37.375 ............ 2,000 (310,000)
March @ $37.125 .............. 1,300 (436,800)
March @ $37.875 .............. 700 (206,500)
March @ $38.1875 ............. 3,000 (822,000)
TCI Group (Class A):
January @ $23.75 ............. 2,500 (1,102,500)
February @ $26.375 ........... 2,000 (424,000)
February @ $28.625............ 2,500 (297,500)
TCI Ventures Group:
February @ $27.375 ........... 4,500 (1,125,000)
March @ $28.875 .............. 2,625 (417,375)
March @ $29.375 .............. 875 (120,750)
Teradyne, Inc.
February @ $32.875 ........... 2,500 (702,500)
Teleport Communications Group,
Inc.:
January @ $46.625 ............ 2,000 (1,764,000)
January @ $48.75 ............. 900 (649,800)
January @ $48.875 ............ 2,000 (1,366,000)
January @ $49.00 ............. 2,500 (1,562,500)
January @ $49.50 ............. 2,500 (1,375,000)
January @ $49.625 ............ 1,100 (719,400)
January @ $49.905 ............ 1,300 (731,900)
January @ $50.3125 ........... 2,500 $ (1,230,000)
January @ $50.6875 ........... 700 (434,000)
February @ $48.875 ........... 1,500 (1,072,500)
February @ $53.00 ............ 2,000 (952,000)
February @ $55.00 ............ 6,000 (2,052,000)
February @ $57.75 ............ 1,500 (214,500)
March @ $55.75 ............... 2,000 (630,000)
Texas Instruments, Inc.:
January @ $45.50 ............. 3,000 (708,000)
January @ $49.375 ............ 2,000 (94,000)
January @ $100.50 ............ 5,000 (65,000)
January @ $103.25 ............ 3,000 (39,000)
February @ $45.50............. 3,000 (987,000)
Travelers Group, Inc.:
January @ $53.50 ............. 2,500 (760,000)
January @ $74.25 ............. 3,000 (1,416,000)
February @ $56.50 ............ 2,500 (395,000)
February @ $57.00 ............ 2,500 (305,000)
United Healthcare Corp.:
January @ $52.9375 ........... 1,500 (57,000)
February @ $46.50 ............ 1,500 (799,500)
WorldCom, Inc.:
January @ $32.875 ............ 2,500 (37,500)
January @ $34.00 ............. 4,000 (144,000)
January @ $34.4375 ........... 3,000 (56,250)
January @ $36.75.............. 2,500 (30,000)
Xerox Corp.:
February @ $69.625 ........... 3,500 (2,310,000)
February @ $69.875 ........... 3,000 (1,644,000)
3Com Corp.:
January @ $32.0625 ........... 2,500 (982,500)
January @ $34.00 ............. 3,000 (750,000)
--------------
TOTAL CALL OPTIONS WRITTEN (-1.2%)
(Premiums Received $103,560,700) (118,604,155)
--------------
OTHER ASSETS
LESS LIABILITIES (-0.5%) .... (46,032,244)
--------------
NET ASSETS (100.0%) ........... $9,560,773,733
==============
</TABLE>
<PAGE>
- ------------
* Non-income producing.
++ Affiliated company as defined under the Investment Company Act of 1940
(See Note 6).
(a) Partially pledged as collateral on outstanding written call options.
(b) One contract relates to 100 shares.
(c) Covered call option contracts written in connection with securities held.
Glossary:
ADR -- American Depository Receipt
See Notes to Financial Statements.
30
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCK AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.9%)
Akzo Nobel N.V. .................. 10,000 $ 1,724,163
Bayer AG ......................... 40,000 1,484,199
GP Batteries International Ltd. . 820,000 2,135,950
GP Batteries International
Ltd.--Warrants* ................. 12,500 17,250
Holliday Chemical Holdings PLC ... 30,000 113,388
Indo Gulf Fertilisers & Chemicals
Corp. Ltd. (GDR)+................ 150,000 140,580
Ishihara Sangyo Kaisha Ltd.* .... 326,000 362,292
Johnson Matthey PLC .............. 225,000 2,015,102
Royal Group Technologies Ltd.* ... 50,000 1,159,375
Sanyo Chemicals Industries Ltd. . 18,000 104,848
SKW Trostberg AG ................. 37,000 1,174,407
-----------
10,431,554
-----------
CHEMICALS--SPECIALTY (0.9%)
SGL Carbon AG+ ................... 78,560 10,044,081
UCAR International, Inc.* ........ 40,000 1,597,500
-----------
11,641,581
-----------
METALS & MINING (0.3%)
Great Central Mines Ltd. ......... 391,580 420,906
Randgold Resources Ltd. (GDR)*+ . 181,800 954,450
Toho Titanium* ................... 129,000 1,087,565
Westralian Sands Ltd. ............ 280,000 656,660
WMC Ltd. ......................... 200,000 697,050
-----------
3,816,631
-----------
PAPER (0.4%)
Asia Pacific Resources
International Ltd. (Class A)* .. 70,000 131,250
Enso Oy (Series R) ............... 124,000 959,979
Fletcher Challenge Forest ........ 17,026 14,137
Grupo Industrial Durango (ADR)* . 66,000 940,500
Jefferson Smurfit Corp.* ......... 300,000 833,155
Mayr-Melnhof Karton AG+ .......... 20,000 1,076,832
Nippon Paper Industries Co. ..... 77,000 302,157
Oji Paper Co. Ltd. ............... 83,000 330,155
-----------
4,588,165
-----------
STEEL (0.2%)
Acerinox SA ...................... 2,002 296,588
Broken Hill Proprietary Co. Ltd. . 150,000 1,392,472
Sumitomo Metal Industries ........ 730,000 934,355
-----------
2,623,415
-----------
TOTAL BASIC MATERIALS (2.7%) ... 33,101,346
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.4%)
B.U.S. Berzelius Umwelt-
Service AG ...................... 87,700 1,170,016
Daiseki Co. Ltd. ................. 19,300 199,693
Matsuda Sangyo Co. Ltd. .......... 23,000 138,908
Powerscreen International PLC ... 640,000 6,425,494
Rentokil Initial PLC ............. 542,991 2,364,594
Tomra Systems ASA ................ 310,000 6,925,452
-----------
17,224,157
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.5%)
Carlton Communications PLC ...... 536,300 $ 4,142,129
De La Rue PLC .................... 180,000 1,171,347
Elsevier N.V. .................... 174,000 2,814,687
Flextech PLC* .................... 69,000 597,555
Liberty Media Group (Class A)* ... 154,875 5,614,219
Mirror Group PLC ................. 200,000 640,889
Nippon Television Network Corp. . 5,790 1,699,613
Reader's Digest Association, Inc.
(Class A) ....................... 45,000 1,063,125
Reed International PLC ........... 200,000 2,004,831
Takara Printing Co. .............. 4,000 11,956
Tele-Communications, Inc.
(Class A)* ...................... 116,425 3,252,623
Television Broadcasts Ltd. ...... 265,000 755,775
Tokyo Broadcasting System, Inc. .. 121,000 1,530,178
TVI Televisao Independente* ..... 1,175 11,747
Ver Ned Uitgeversbedr Ver
Bezit N.V. ...................... 20,000 564,200
Viacom, Inc. (Class B)* .......... 109,300 4,529,119
-----------
30,403,993
PROFESSIONAL SERVICES (1.3%)
Alvern Norway ASA* ............... 258,529 612,562
Apcoa Parking AG+ ................ 19,580 1,436,705
Asatsu, Inc. ..................... 56,500 814,102
Brisa-Auto Estradas de
Portugal SA* .................... 19,500 698,525
Content Beheer N.V.+ ............. 150,000 3,698,863
Meitec ........................... 163,000 4,584,863
Shandwick International PLC ..... 30,000 20,336
Unique International NV* ......... 82,500 1,757,700
WPP Group PLC .................... 600,000 2,672,013
-----------
16,295,669
-----------
TRUCKING, SHIPPING (0.9%)
Brambles Industries Ltd. ......... 250,000 4,959,154
Cosco Pacific Ltd. ............... 300,000 243,902
Frontline Ltd.* .................. 950,000 3,833,031
Irish Continental Group Ltd. .... 140,000 1,713,050
Koninklijke Nedlloyd Groep N.V. .. 11,250 255,222
Yamato Transport Co. Ltd. ........ 8,000 107,300
-----------
11,111,659
-----------
TOTAL BUSINESS SERVICES (6.1%) .. 75,035,478
-----------
CAPITAL GOODS
AEROSPACE (0.1%)
Loral Space & Communications* .... 62,000 1,329,125
-----------
BUILDING & CONSTRUCTION (0.7%)
ABB AG ........................... 800 1,005,135
Bufete Industrial S.A. (ADR)* ... 19,000 185,250
Daito Trust Construction Co. Ltd. 49,900 304,812
Hitachi Plant Engineering &
Construction Co. ................ 83,000 185,116
Japan Industrial Land Development 50,000 120,713
Kaneshita Construction ........... 120,000 542,633
MacMahon Holdings Ltd. ........... 1,895,200 592,620
Metacorp BHD ..................... 335,000 142,113
31
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Mitsui Home Co. Ltd. ............. 92,000 $ 500,632
Nanno Construction Co. Ltd. ..... 53,000 42,652
Nippon Denwa Shisetsu ............ 58,000 222,265
Ohmoto Gumi Co. Ltd. ............. 61,000 261,813
Oriental Construction Co. ........ 41,500 181,299
Pacific Rim Infra Management
Enterprises Ltd.* ............... 716,500 23,578
Penta-Ocean Construction ......... 20,000 28,051
PS Corp. ......................... 109,700 416,183
Raito Kogyo Co. Ltd. ............. 90,800 393,194
Sacos Corp. ...................... 8,600 39,548
Sanyo Engineering & Construction
Co. ............................. 21,000 75,647
Sho Bond Corp. ................... 140,500 2,541,330
Suido Kiko Kaisha ................ 38,000 76,306
Toda Corp. ....................... 89,000 242,154
Wesco, Inc. ...................... 28,720 70,438
-----------
8,193,482
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.8%)
BPB PLC .......................... 540,000 3,017,107
Fujikura Ltd. .................... 335,000 2,218,356
Lafarge SA ....................... 25,750 1,689,570
Nichiha Corp. .................... 186,700 1,141,879
Portland Valderrivas SA .......... 11,400 1,025,139
Sumitomo Forestry Co. ............ 24,000 116,804
-----------
9,208,855
-----------
ELECTRICAL EQUIPMENT (0.3%)
Alcatel Alsthom .................. 16,000 2,033,729
Mabuchi Motor Co. ................ 25,800 1,311,010
Vae Eisenbahnsysteme AG .......... 3,000 263,627
Yaskawa Electric Corp. ........... 27,000 67,254
Zucchini Spa ..................... 30,400 218,248
-----------
3,893,868
-----------
MACHINERY (1.8%)
Asahi Diamond Industry
Co. Ltd. ........................ 91,000 396,850
Cie Generale de Geophysique SA
(ADR)* .......................... 260,000 6,662,500
Construcciones y Auxiliar de
Ferrocarrites SA ................ 9,425 347,676
Danieli & Co. .................... 32,200 221,159
Enshu* ........................... 74,000 92,447
Gildemeister Italiana Spa* ...... 45,725 155,346
IHC Caland N.V. .................. 52,000 2,697,902
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 239,000 357,195
Kalmar Industries AB+ ............ 60,000 967,267
Kawasaki Heavy Industries Ltd. .. 277,000 428,848
Keyence Corp. .................... 800 118,337
Mitsubishi Heavy Industries Ltd. . 450,000 1,876,221
Namura Shipbuilding .............. 56,000 126,614
Nireco ........................... 24,000 88,293
Nitta Corp. ...................... 100,700 1,018,770
Nitto Kohki Co. Ltd. ............. 83,500 908,756
Rauma Oy ......................... 41,600 648,694
Siebe PLC ........................ 80,000 1,570,999
SMC Corp. ........................ 29,500 2,600,115
Sodick Co.* ...................... 369,000 1,057,720
Thai Engine Manufacturing Public
Co. Ltd. ........................ 87,000 $ 144,548
-----------
22,486,257
-----------
TOTAL CAPITAL GOODS (3.7%) ..... 45,111,587
-----------
CONSUMER CYCLICALS
AIRLINES (2.7%)
Air Canada* ...................... 90,000 928,679
British Airways PLC .............. 150,000 1,380,376
Continental Airlines, Inc.
(Class B)* ...................... 169,000 8,133,125
Delta Air Lines, Inc. ............ 46,500 5,533,500
KLM .............................. 80,000 2,959,091
Lufthansa AG ..................... 207,500 3,898,663
Northwest Airlines Corp.
(Class A)* ...................... 42,300 2,025,112
Singapore Airlines Ltd. .......... 206,000 1,347,606
UAL Corp.* ....................... 28,200 2,608,500
US Airways Group, Inc.* .......... 28,000 1,750,000
Virgin Express Holdings PLC
(ADR)* .......................... 110,000 2,282,500
-----------
32,847,152
-----------
APPAREL, TEXTILE (0.2%)
Carli Gry International A/S ..... 30,000 1,685,664
Giordano International Ltd.* .... 36,000 12,427
King Co. ......................... 55,000 52,692
Morishita Co. Ltd. ............... 5,000 13,413
PT Great River International .... 3,150,000 257,727
-----------
2,021,923
-----------
AUTO RELATED (1.5%)
Asahi Glass Co. Ltd. ............. 48,000 228,090
Autoliv, Inc. .................... 35,000 1,146,250
Bridgestone Metalpha Corp. ...... 6,000 22,303
FCC Co. Ltd. ..................... 13,000 137,498
Gerresheimer Glas AG ............. 12,000 168,098
LucasVarity PLC .................. 700,000 2,473,173
Michelin (CGDE), (Class B) ...... 45,000 2,265,515
Minebea Co. Ltd. ................. 214,000 2,296,225
NGK Spark Plug Co. ............... 132,000 748,649
Republic Industries, Inc.* ...... 367,000 8,555,687
Toyoda Gosei ..................... 11,000 39,793
-----------
18,081,281
-----------
AUTOS & TRUCKS (0.4%)
AutoZone, Inc.* .................. 161,700 4,689,300
Honda Motor Co. Ltd. ............. 6,000 220,272
Isuzu Motors Ltd. ................ 74,000 115,133
Seat Spa* ........................ 40,000 15,602
-----------
5,040,307
-----------
FOOD SERVICES, LODGING (1.9%)
AAPC Ltd. ........................ 1,500,000 615,619
Accor SA ......................... 25,000 4,648,168
Compass Group PLC ................ 540,000 6,646,509
International Fast Food Corp.* .. 8,000 3,360
ITT Corp.* ....................... 80,400 6,663,150
Jurys Hotel Group PLC ............ 300,000 1,557,965
QPQ Corp.--Warrants* ............. 32,700 128
32
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Restaurant Brands NZ Ltd.*+ ..... 220,100 $ 217,262
Sanyo Pax Co. Ltd. ............... 50,000 433,033
Scandic Hotels AB*+ .............. 1,100 26,877
Selecta Group* ................... 11,200 1,503,047
Thistle Hotels PLC ............... 249,200 649,403
------------
22,964,521
------------
HOUSEHOLD FURNITURE, APPLIANCES (0.4%)
Hunter Douglas N.V. .............. 60,000 2,100,954
Industrie Natuzzi Spa (ADR) ..... 120,000 2,475,000
Moulinex* ........................ 20,527 507,164
Sanyo Electric Co. Ltd. .......... 162,000 422,150
------------
5,505,268
------------
LEISURE RELATED (5.1%)
Canal Plus ....................... 15,000 2,788,901
Capcom Co. Ltd. .................. 9,200 94,486
Carnival Corp. (Class A) ......... 5,500 304,562
Cendant Corp.* ................... 1,058,100 36,372,187
Cinar Films, Inc. (Class B)* .... 45,000 1,749,375
EMI Group PLC .................... 200,000 1,669,597
H.I.S. Company Ltd. .............. 7,700 133,964
Hoyts Cinemas Group+ ............. 1,370,000 2,409,709
Imagineer Co. Ltd. ............... 40,400 315,831
KTM Motorradholding AG* .......... 17,780 898,044
Ladbroke Group PLC ............... 550,000 2,386,078
Mars Engineering Corp. ........... 30,600 168,860
NAMCO Ltd. ....................... 19,200 557,716
Nelvana Limited*+ ................ 130,000 2,500,962
Nintendo Co. Ltd. ................ 13,800 1,353,823
Nippon Broadcasting System ...... 60,000 2,372,868
Rank Group PLC ................... 100,000 557,080
Tag Heuer International SA (ADR)* 143,200 1,181,400
Toei Co. Ltd. .................... 80,000 291,244
Tourism Holdings Ltd. ............ 600,000 411,100
@Entertainment, Inc.* ............ 404,700 4,502,287
------------
63,020,074
------------
PHOTO & OPTICAL (0.3%)
Luxottica Group (ADR) ............ 20,000 1,250,000
Noritsu Koki Co. Ltd. ............ 114,600 2,828,220
------------
4,078,220
------------
RETAIL--GENERAL (3.4%)
Aldeasa, SA* ..................... 76,568 1,623,332
BAA PLC .......................... 100,000 818,366
Carpetright PLC .................. 20,000 151,184
Centros Comerciales Pryca SA .... 30,000 446,997
Dixons Group PLC ................. 450,000 4,518,265
Doshisha Co. ..................... 37,000 181,491
Eiden Sakakiya Co. Ltd. .......... 75,000 278,789
Gucci Group N.V. ................. 5,000 209,375
Homac Corp. ...................... 33,300 168,191
Home Centers Ltd.* ............... 142,800 1,570,800
Home Depot, Inc. ................. 155,600 9,160,950
Home Wide Corp. .................. 18,000 60,011
House of Fraser PLC .............. 550,000 1,816,673
Isetan Co. ....................... 214,000 893,888
Japan Airport Terminal Co. Ltd. .. 183,800 1,155,133
Kokuyo Co. Ltd. .................. 29,000 500,096
Limited, Inc. .................... 321,300 8,193,150
MFI Furniture Group PLC .......... 100,000 198,018
Paris Miki, Inc. ................. 101,900 $ 1,093,390
Sato Corp. ....................... 120,200 2,045,173
Smith (W.H.) Group PLC ........... 300,000 1,917,736
Sriwani Holdings BHD ............. 680,000 180,075
S.T. Dupont* ..................... 70,614 924,547
Swank International Manufacturing
Co.* ............................ 1,000,000 108,401
Thorn PLC ........................ 428,570 1,112,748
Vendex International N.V. ........ 14,400 794,693
Warehouse Group Ltd. ............. 390,000 1,041,685
Xebio Co. ........................ 15,200 121,157
------------
41,284,314
------------
TOTAL CONSUMER CYCLICALS (15.9%) 194,843,060
------------
CONSUMER NONCYCLICALS
BEVERAGES (1.1%)
Bass PLC ......................... 72,800 1,129,929
Diageo PLC ....................... 700,000 6,436,002
Hartwall Oy AB ................... 9,000 742,990
Lion Nathan Ltd. ................. 31,500 70,601
Louis Dreyfus Citrus ............. 71,500 2,185,927
Panamerican Beverages, Inc. ..... 60,000 1,957,500
Quilmes Industrial Quins (ADR) ... 80,000 1,095,000
------------
13,617,949
------------
DRUGS (5.3%)
Astra AB (A Shares) .............. 90,000 1,558,584
Hafslund ASA (B Shares) .......... 80,000 381,272
Merck & Co., Inc. ................ 122,100 12,973,125
Novartis AG ...................... 1,358 2,203,670
Novartis AG (ADR) ................ 20,000 1,624,900
Novo-Nordisk A/S (B Shares) ..... 35,000 5,005,911
Orion-Yhtymae Oy (B Shares) ..... 182,000 4,807,969
Pfizer, Inc. ..................... 75,000 5,592,187
Roche Holdings AG Genusscheine .. 450 4,469,189
Rohto Pharmaceutical Co. Ltd. ... 4,000 25,752
Sankyo Co. Ltd. .................. 123,000 2,780,993
Santen Pharmaceutical Co. Ltd. .. 312,000 3,586,894
Schering Plough Corp. ............ 51,000 3,168,375
Smith & Nephew PLC ............... 275,000 813,436
Smithkline Beecham PLC ........... 400,000 4,095,114
Taisho Pharmaceutical Co. ........ 44,000 1,122,974
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 215,000 4,613,911
Zeneca Group PLC ................. 180,000 6,321,135
------------
65,145,391
------------
FOODS (0.8%)
Avonmore Waterford Group PLC .... 130,500 479,042
Fyffes PLC ....................... 3,400,000 5,079,392
Karlshamns AB*+ .................. 20,000 312,346
Nestle SA ........................ 1,000 1,498,802
Nutricia Verenigde Bedrijven
N.V.+ ........................... 25,000 758,267
Oie Sangyo Co. Ltd. .............. 4,000 16,555
Shriram Industrial Enterprises
Ltd. (GDR)*+ .................... 165,000 330,000
Viscofan Envoltura ............... 60,000 1,506,400
------------
9,980,804
------------
33
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
HOSPITAL SUPPLIES & SERVICES (1.5%)
Australian Hospital Care Ltd. ... 636,000 $ 849,359
Boston Scientific Corp.* ......... 92,300 4,234,262
Cochlear Ltd. .................... 20,000 65,145
Coloplast A/S B .................. 1,200 92,821
EDAP TMS SA (ADR)* ............... 365,000 2,555,000
Medtronic, Inc. .................. 176,500 9,233,156
NIC Corp. ........................ 9,000 48,975
Nichii Gakkan Co.* ............... 15,000 517,340
Quest Medical, Inc.* ............. 164,543 1,146,659
Scandinavian Mobility
International A/S ............... 10,000 91,945
------------
18,834,662
------------
RETAIL--FOOD (0.8%)
Daimon Co. Ltd. .................. 27,800 55,398
Etablissements Economiques du
Casino Guichard-Perrachon SA .... 13,590 756,443
Familymart Co. ................... 62,100 2,227,461
Kesko ............................ 60,000 948,825
Loblaw Companies Ltd. ............ 40,000 724,754
McBride PLC ...................... 350,000 1,018,027
Santa Isabel S.A. (ADR) .......... 32,000 560,000
Seven-Eleven Japan Co. Ltd. ..... 49,000 3,470,090
------------
9,760,998
------------
TOBACCO (3.7%)
Imperial Tobacco Group PLC ...... 341,000 2,146,205
Japan Tobacco, Inc. .............. 150 1,064,572
Loews Corp. ...................... 120,800 12,819,900
Philip Morris Cos., Inc. ......... 429,200 19,448,125
RJ Reynolds BHD .................. 210,000 342,846
Seita ............................ 66,000 2,368,697
Swedish Match AB ................. 1,100,000 3,671,331
Tabacalera SA--A ................. 40,000 3,242,534
------------
45,104,210
------------
TOTAL CONSUMER NONCYCLICALS (13.2%) 162,444,014
------------
CREDIT SENSITIVE
BANKS (4.2%)
Akita Bank ....................... 82,000 320,521
AMMB Holdings BHD ................ 30,000 19,668
Asahi Bank Ltd. .................. 140,000 568,691
Banco Latinoamericano de
Exportaciones S.A. (E Shares) ... 60,000 2,482,500
Bank of Tokyo-Mitsubishi Ltd. ... 250,000 3,448,937
Barclays Bank .................... 80,000 2,127,093
BHW Holding AG* .................. 25,000 409,961
BPI-SGPS SA* ..................... 24,000 583,537
Chase Manhattan Corp. ............ 126,488 13,850,436
Dai-Ichi Kangyo Bank ............. 326,000 1,923,893
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 37,400 1,863,856
First Union Corp. ................ 116,000 5,945,000
Forenings Sparbanken AB
(A Shares) ...................... 32,000 727,465
Grupo Financiero Banamex Accival
(B Shares)* ..................... 150,000 448,511
Grupo Financiero Banorte (Class
B)* ............................. 178,750 311,815
Grupo Financiero Banorte--Rights
(Class B)* ...................... 178,750 $ 0
HSBC Holdings PLC (H.K.$) ........ 60,000 1,478,900
Mitsubishi Trust & Banking Corp. 100,000 1,004,024
NationsBank Corp. ................ 57,000 3,466,312
Nordbanken Holding AB*+ .......... 309,000 1,747,390
Overseas-Chinese Bank ............ 44,000 256,438
Shizuoka Bank Ltd. ............... 70,000 751,102
Skandinaviska Enskilda Banken
(Series A) ...................... 126,830 1,605,362
Standard Chartered PLC ........... 150,000 1,602,222
Sumitomo Bank Ltd. ............... 291,000 3,323,165
Suncorp-Metway Ltd.* ............. 30,444 76,356
Toho Bank ........................ 119,000 474,267
Union Bank of Norway ............. 8,600 306,236
United Overseas Bank Ltd. ........ 160,000 889,682
------------
52,013,340
------------
<PAGE>
FINANCIAL SERVICES (4.9%)
American Express Co. ............. 103,600 9,246,300
Americredit Corp.* ............... 206,700 5,723,006
Amvescap PLC ..................... 270,000 2,320,510
CIT Group, Inc.* ................. 110,700 3,570,075
CMIC Finance & Securities Public
Co. Ltd. ........................ 724,700 0
Credit Saison Co. ................ 215,550 5,319,571
Dexia France ..................... 10,000 1,158,096
Fleet Financial Group, Inc. ..... 53,700 4,024,144
Hong Leong Finance Ltd. .......... 160,000 172,227
JCG Holdings ..................... 142,000 60,930
MBNA Corp. ....................... 578,100 15,789,356
Morgan Stanley, Dean Witter,
Discover & Co. .................. 71,800 4,245,175
Newcourt Credit Group, Inc.* .... 84,000 2,803,500
Nichiei Co. Ltd. ................. 9,700 1,033,378
Promise Co. Ltd. ................. 10 555
PT Bunas Finance Indonesia ...... 800,000 47,273
Sanyo Shinpan Finance Co. Ltd. .. 21,700 959,640
Takefuji Corp. ................... 81,800 3,755,371
------------
60,229,107
------------
INSURANCE (6.0%)
Acceptance Insurance Cos., Inc.* . 80,100 1,937,419
Aegon N.V. ....................... 40,000 3,560,772
American International
Group, Inc. ..................... 144,375 15,700,781
ASR Verzekeringsgroep N.V. ...... 90,000 4,895,815
Corporacion Mapfre Cia Inter SA . 140,000 3,712,504
Fairfax Financial Holdings Ltd.* 4,000 895,449
Fortis Amev N.V. ................. 82,381 3,591,587
ING Groep N.V. ................... 90,000 3,790,595
Irish Life PLC ................... 175,000 999,406
Koa Fire & Marine ................ 37,000 138,954
Mediolanum Spa+ .................. 15,000 282,363
Norwich Union PLC* ............... 250,000 1,602,222
Pacific & Orient BHD ............. 220,000 100,681
Progressive Corp. ................ 19,500 2,337,562
QBE Insurance Group Ltd. ......... 15,651 70,424
Skandia Forsakrings AB ........... 30,000 1,415,005
34
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Sumitomo Marine & Fire Insurance
Co. ............................. 25,000 $ 132,209
Travelers Group, Inc. ............ 424,699 22,880,659
20th Century Industries .......... 211,000 5,486,000
------------
73,530,407
------------
REAL ESTATE (2.8%)
Arden Realty, Inc. ............... 193,100 5,937,825
Castellum AB* .................... 340,000 3,382,914
Cheung Kong Holdings ............. 126,000 825,203
Chubu Sekiwa Real Estate Ltd. ... 16,000 83,878
City Developments Ltd. ........... 115,000 533,452
Daibiru Corp. .................... 46,000 336,693
Entertainment Properties Trust .. 136,000 2,635,000
JP Realty, Inc. .................. 87,300 2,264,344
Macerich Co. ..................... 151,700 4,323,450
MEPC PLC ......................... 210,000 1,753,077
Mitsubishi Estate Co. ............ 61,000 663,882
Pernas International Hotels
Holdings BHD .................... 640,000 177,709
Prentiss Properties Trust ........ 85,000 2,374,687
Sap Holdings BHD ................. 66,000 24,605
Singapore Land Ltd. .............. 300,000 660,125
Sino Land Co. .................... 1,850,000 1,116,112
Spieker Properties, Inc. ......... 82,700 3,545,762
Sumitomo Realty & Development Co.
Ltd. ............................ 364,000 2,092,355
Sun Communities, Inc. ............ 41,000 1,473,437
------------
34,204,510
------------
UTILITY--ELECTRIC (3.2%)
British Energy PLC ............... 1,350,000 9,384,090
Cia Paranaense de Energia-Copel
(ADR) ........................... 356,000 4,872,750
Electricidade de Portugal SA* ... 127,005 2,404,849
Energy Group PLC ................. 50,000 552,150
Enersis S.A. (ADR) ............... 45,000 1,305,000
EVN AG ........................... 8,394 1,103,118
Gas Y Electridad SA (Series 2) .. 5,000 361,011
Hidroelectrica del Cantabrico ... 45,000 1,973,088
Iberdrola SA ..................... 270,000 3,553,331
Korea Electric Power (ADR) ...... 90,000 905,625
National Grid Group PLC .......... 1,000,000 4,749,150
National Power PLC ............... 420,000 4,141,127
Veba AG .......................... 50,000 3,404,764
------------
38,710,053
------------
UTILITY--GAS (0.3%)
General de Aguas d'Barcelona .... 89,900 3,705,756
------------
UTILITY--TELEPHONE (2.5%)
AT&T Corp. ....................... 32,000 1,960,000
Electric Lightwave, Inc.* ........ 205,000 3,049,375
Empresas Telex-Chile S.A. (ADR) . 70,000 275,625
Hellenic Telecommunication
Organization SA ................. 52,546 1,076,596
Koninklijke PTT Nederland NV+ .... 30,000 1,251,695
Magyar Tavkozlesi Rt (ADR)* ..... 218,000 5,668,000
Portugal Telecom SA .............. 31,680 1,469,966
PT Indonesian Satellite (ADR) ... 40,000 772,500
Telecom Italia Spa ............... 40,000 255,512
Telefonica de Espana ............. 100,000 2,855,267
Telephone & Data Systems, Inc. .. 56,700 $ 2,640,094
Teleport Communications Group,
Inc. (Class A)* ................. 126,000 6,914,250
Videsh Sanchar Nigam Ltd. (GDR)* 148,000 1,912,900
------------
30,101,780
------------
TOTAL CREDIT SENSITIVE (23.9%) 292,494,953
------------
ENERGY
COAL & GAS PIPELINES (0.4%)
OMV AG ........................... 37,200 5,153,782
------------
OIL--DOMESTIC (0.3%)
Union Pacific Resources Group,
Inc. ............................ 149,300 3,620,525
------------
<PAGE>
OIL--INTERNATIONAL (0.8%)
Canadian Occidental .............. 8,000 181,000
Elf Aquitaine .................... 25,000 2,907,701
Orogen Minerals Ltd. ............. 310,000 605,847
Renaissance Energy Ltd.* ......... 80,000 1,650,985
Repsol SA ........................ 65,000 2,773,220
Southern Pacific Petroleum* ..... 850,000 1,522,762
------------
9,641,515
------------
OIL--SUPPLIES & CONSTRUCTION (5.6%)
Baker Hughes, Inc. ............... 50,000 2,181,250
BJ Services Co.* ................. 64,000 4,604,000
Bouygues Offshore SA (ADR) ...... 117,000 2,544,750
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 571,500 4,797,649
Coflexip (ADR) ................... 65,000 3,607,500
Dresser Industries, Inc. ......... 220,100 9,230,444
Fugro N.V.* ...................... 80,000 2,438,291
Halliburton Co. .................. 167,400 8,694,337
Nabors Industries, Inc.* ......... 320,600 10,078,862
Noble Drilling Corp.* ............ 179,000 5,481,875
Rowan Cos., Inc.* ................ 94,000 2,867,000
Santa Fe International Corp. .... 84,500 3,438,094
Schlumberger Ltd. ................ 36,400 2,930,200
Transocean Offshore, Inc. ........ 112,000 5,397,000
Tubos de Acero de Mexico SA
(ADR)* .......................... 10,000 216,250
------------
68,507,502
------------
TOTAL ENERGY (7.1%) ............. 86,923,324
------------
TECHNOLOGY
ELECTRONICS (6.4%)
Austria Mikro System
International ................... 4,000 202,668
Cisco Systems, Inc.* ............. 559,950 31,217,213
EMC Corp.* ....................... 60,000 1,646,250
Enplas Corp. ..................... 56,000 755,394
Fujimi, Inc. ..................... 26,300 1,118,720
Hoya Corp. ....................... 76,000 2,388,197
Micronics Japan Co. Ltd. ......... 68,000 1,172,638
Navia ASA* ....................... 80,000 281,621
Network Associates, Inc.* ........ 116,000 6,133,500
Nikon Corp. ...................... 138,000 1,364,399
Rohm Co. Ltd. .................... 25,000 2,548,381
Sankyo Engineering Co. ........... 1,000 3,066
Sanmina Corp.* ................... 44,000 2,981,000
SCI Systems, Inc.* ............... 3,400 148,113
35
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Solectron Corp.* ................. 57,200 $ 2,377,375
Sterling Commerce, Inc.* ......... 252,660 9,711,619
TDK Corp. ........................ 59,000 4,449,588
Teradyne, Inc.* .................. 44,000 1,408,000
Tokyo Cathode Laboratory Co.* .... 28,600 282,767
Tokyo Electron ................... 10,000 320,368
TOWA Corp. ....................... 18,600 386,327
Yamaichi Electronics Co. Ltd. ... 27,000 434,566
Yokogawa Electric Corp. .......... 353,000 2,180,632
3Com Corp.* ...................... 127,700 4,461,519
--------------
77,973,921
--------------
OFFICE EQUIPMENT (2.7%)
Canon, Inc. ...................... 38,000 885,380
Ceridian Corp.* .................. 342,700 15,699,944
Ricoh Elemex Corp. ............... 30,000 218,433
Sterling Software, Inc.* ......... 383,600 15,727,600
--------------
32,531,357
--------------
OFFICE EQUIPMENT SERVICES (0.7%)
Data Communication System Co. .... 63,000 830,504
Fuji Soft ABC, Inc. .............. 50,910 1,744,148
INES Corp. ....................... 59,000 456,716
Misys (Jersey) Ltd.* ............. 34,285 1,036,669
Misys PLC ........................ 120,000 3,628,416
Nippon System Development ........ 44,000 903,775
Turbon International AG .......... 27,500 594,652
--------------
9,194,880
--------------
TELECOMMUNICATIONS (7.2%)
Brooks Fiber Properties, Inc.* .. 139,500 7,672,500
Corecomm, Inc.* .................. 7,600 76,950
DDI Corp. ........................ 384 1,015,367
DSC Communications Corp.* ........ 64,000 1,528,000
Energis PLC* ..................... 964,000 4,039,571
E.R.G. Limited ................... 2,167,360 1,821,382
Filtronic Comtek PLC ............. 1,199,000 8,718,675
MCI Communications Corp. ......... 366,000 15,669,375
NetCom Systems AB
(B Shares)*+ .................... 85,000 1,825,275
Nextel Communications, Inc.
(Class A)* ...................... 207,700 5,400,200
SK Telecom Co. Ltd. (ADR)* ...... 373,437 2,427,339
Tadiran Telecommunications Ltd. .. 130,000 1,803,750
Tele-Communications TCI Ventures
Group (Class A)* ................ 345,175 9,772,767
United States Cellular Corp.* ... 38,600 1,196,600
Videsh Sanchar Nigam Ltd. (GDR)*+ 12,000 167,160
Vodafone Group PLC ............... 700,000 5,049,874
WorldCom, Inc.* .................. 681,404 20,612,471
--------------
88,797,256
--------------
TOTAL TECHNOLOGY (17.0%) ........ 208,497,414
--------------
DIVERSIFIED
MISCELLANEOUS (1.4%)
BTR PLC .......................... 170,000 514,026
Cie Generale de Eaux ............. 30,000 4,187,090
Corp Financiera Reunida SA* ..... 60,000 320,971
Crean (James) PLC--Units ......... 495,000 1,007,128
Hanson PLC ....................... 62,500 278,977
Indonesia Fund, Inc.* ............ 20,000 92,500
International UNP Holdings* ..... 450,000 $ 37,777
International UNP
Holdings--Warrants* ............. 225,000 0
Lippo China Resources Ltd. ...... 2,000,000 294,232
Mitsubishi Corp. ................. 42,000 331,558
Sime Darby BHD ................... 800,000 769,251
Swire Pacific Ltd. (Class A) .... 140,000 767,841
Taiwan Fund, Inc. ................ 15,000 247,500
Tomkins PLC ...................... 300,000 1,434,605
Tyco International Ltd. .......... 154,984 6,983,966
--------------
TOTAL DIVERSIFIED (1.4%) ........ 17,267,422
--------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (91.0%)
(Cost $973,440,400) ............. 1,115,718,598
--------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv. ................ 50,000 1,175,000
--------------
PRINTING, PUBLISHING &
BROADCASTING (0.1%)
ProSieben Media AG* .............. 25,000 1,146,502
--------------
TOTAL BUSINESS SERVICES (0.2%) .. 2,321,502
--------------
CONSUMER CYCLICALS
LEISURE RELATED (0.1%)
Village Roadshow Ltd. ............ 440,000 904,628
--------------
RETAIL--GENERAL (0.0%)
Fielmann AG ...................... 6,000 130,076
--------------
TOTAL CONSUMER CYCLICALS (0.1%) 1,034,704
--------------
CONSUMER NONCYCLICALS
CONTAINERS (0.0%)
Dixie Toga SA* ................... 228,000 116,447
--------------
HOSPITAL SUPPLIES & SERVICES (0.1%)
Fresenius AG ..................... 3,100 563,495
--------------
TOTAL CONSUMER NONCYCLICALS (0.1%) 679,942
--------------
TECHNOLOGY
TELECOMMUNICATIONS (0.4%)
Nokia Oyj (A Shares) ............. 44,000 3,123,859
WorldCom, Inc.
8.0% Conv. ...................... 22,000 2,310,000
--------------
TOTAL TECHNOLOGY (0.4%) ......... 5,433,859
--------------
TOTAL PREFERRED STOCKS (0.8%)
(Cost $6,622,322) .............. 9,470,007
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
CONSUMER NONCYCLICALS (0.1%)
FOODS
Burns, Philp & Co. Ltd.
5.5% Conv., 04/30/04 ............ $2,000,000 1,100,000
--------------
CREDIT SENSITIVE (0.0%)
BANKS
Grupo Financiero Banorte
Zero Coupon, 12/05/02 ........... 1,657 20,558
--------------
</TABLE>
36
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (0.1%)
ELECTRONICS
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ .................... $ 1,055,000 $ 1,447,988
--------------
DIVERSIFIED (0.0%)
MISCELLANEOUS
Brierley Investments Ltd.
9.0% Conv. Sub. Note,
06/30/98...................... 27,900 18,144
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.2%)
(Amortized Cost $3,073,944) . 2,586,690
--------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (7.7%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ........... 93,900,000 93,884,350
--------------
TOTAL SHORT-TERM DEBT SECURITIES (7.7%)
(Amortized Cost $93,884,350) 93,884,350
--------------
TOTAL INVESTMENTS (99.7%)
(Cost/Amortized Cost $1,077,021,016) 1,221,659,645
OTHER ASSETS
LESS LIABILITIES (0.3%) ..... 3,727,350
--------------
NET ASSETS (100.0%) ........... $1,225,386,995
==============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $36,393,721
or 3.0% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
37
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
ARGENTINA (0.1%)
Quilmes Industrial Quins (ADR) ... 15,000 $ 205,314
----------
AUSTRALIA
AAPC Ltd. ........................ 180,000 73,874
Aristocrat Leisure Ltd. .......... 10,000 19,870
Brambles Industries Ltd. ......... 60,000 1,190,197
Broken Hill Proprietary Co. Ltd. . 30,000 278,494
Cochlear Ltd. .................... 8,000 26,058
E.R.G. Limited ................... 825,000 693,304
GIO Australia Holdings Ltd. ..... 200,000 511,127
Great Central Mines Ltd. ......... 60,000 64,493
Hoyts Cinemas Group + ............ 450,000 791,510
National Australia Bank Ltd. .... 4,900 68,407
News Corp. Ltd. .................. 5,900 32,555
Oil Search Ltd. .................. 360,000 650,563
Orogen Minerals Ltd. (GDR) + .... 50,000 977,600
QBE Insurance Group Ltd. ......... 82,064 369,251
QCT Resources Ltd. ............... 200,000 161,559
Southern Pacific Petroleum* ..... 250,000 447,871
Spectrum Network Systems Ltd.*+ .. 595,338 127,985
Suncorp-Metway Ltd.* ............. 297,321 745,704
Westralian Sands Ltd. ............ 11,472 26,904
WMC Ltd. ......................... 22,000 76,676
----------
TOTAL AUSTRALIA (3.8%) .......... 7,334,002
----------
AUSTRIA
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 5,610 279,579
EVN AG............................ 800 105,134
KTM Motorradholding AG* .......... 10,000 505,086
OMV AG ........................... 3,000 415,628
VA Technologie AG ................ 1,000 151,843
----------
TOTAL AUSTRIA (0.8%) ............ 1,457,270
----------
BELGIUM
Electrabel SA..................... 250 57,826
Petrofina SA ..................... 110 40,600
Tractebel Investment
International Capital ........... 350 30,513
Tractebel Investment
International Capital-Warrants* . 70 0
Virgin Express Holdings PLC
(ADR)* .......................... 50,000 1,037,500
----------
TOTAL BELGIUM (0.6%) ............ 1,166,439
----------
BRAZIL (0.8%)
Cia Paranaense de Energia-Copel
(ADR) ........................... 115,000 1,574,064
----------
CANADA
Canadian Fracmaster Ltd.*+ ...... 214,300 1,799,014
Cinar Films, Inc. (Class B)* .... 8,000 307,000
Fairfax Financial Holdings Ltd.* 1,000 223,862
Leitch Technology Corp.* ......... 20,000 601,630
Renaissance Energy Ltd.* ......... 25,000 515,933
Rofin-Sinar Technologies, Inc.* . 40,000 485,000
----------
TOTAL CANADA (2.0%) ............. 3,932,439
----------
CHILE
Enersis S.A. (ADR) ............... 1,000 $ 29,000
Santa Isabel S.A. (ADR) .......... 8,000 140,000
----------
TOTAL CHILE (0.1%) .............. 169,000
----------
DENMARK
Carli Gry International A/S ..... 15,600 876,545
Coloplast A/S B .................. 6,000 464,105
Novo-Nordisk A/S (B Shares) ..... 5,000 715,130
Scandinavian Mobility
International A/S ............... 5,000 45,973
----------
TOTAL DENMARK (1.1%) ............ 2,101,753
----------
FINLAND
Hartwall Oy AB ................... 12,200 1,007,164
KCI Konecranes International .... 18,000 594,392
Kesko ............................ 20,000 316,275
Nokia Oyj (A Shares) ............. 3,000 210,000
Orion-Yhtyma Oy (B Shares) ...... 56,000 1,479,375
Rauma Oy ......................... 13,900 216,751
----------
TOTAL FINLAND (2.0%) ............ 3,823,957
----------
FRANCE
Accor SA ......................... 8,000 1,487,414
Alcatel Alsthom .................. 3,500 444,878
Banque Nationale de Paris ........ 700 37,207
Bouygues Offshore SA (ADR) ...... 36,000 783,000
Canal Plus ....................... 3,000 557,780
Carrefour ........................ 225 117,388
Cie Financiere de Paribas A ..... 750 65,174
Cie Generale de Eaux ............. 7,000 976,988
Cie Generale de Geophysique SA
(ADR)* .......................... 80,000 2,050,000
Cie de St. Gobain ................ 250 35,515
Coflexip (ADR) ................... 3,000 166,500
EDAP TMS SA (ADR)* ............... 123,000 861,000
Elf Aquitaine .................... 7,000 814,156
Groupe Danone .................... 500 89,308
Havas ............................ 350 25,181
Lafarge SA ....................... 6,130 402,216
L'Air Liquide .................... 550 86,085
L'Oreal .......................... 495 193,690
Louis Dreyfus Citrus ............. 20,300 620,620
Michelin (CGDE), (Class B) ...... 7,000 352,413
Moulinex* ........................ 38,000 938,872
Peugeot SA ....................... 250 31,528
Pinault Printemps ................ 150 80,028
Schneider SA ..................... 800 43,439
Seita ............................ 18,000 646,008
Societe Generale ................. 550 74,936
S.T. Dupont*+ .................... 34,900 456,944
Suez Lyonnaise des Eaux .......... 400 44,264
----------
TOTAL FRANCE (6.4%) ............. 12,482,532
----------
GERMANY
Allianz AG ....................... 1,500 386,892
Apcoa Parking AG+ ................ 800 58,701
Bayer AG ......................... 4,500 166,972
B.U.S. Berzelius Umwelt-Service
AG .............................. 28,000 373,551
Daimler-Benz AG .................. 2,000 141,193
38
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Deutsche Bank AG ................. 3,250 $ 227,271
Dresdner Bank AG ................. 2,850 129,592
Gerresheimer Glas AG ............. 30,000 420,245
Linde AG ......................... 50 30,323
Lufthansa AG ..................... 54,500 1,023,986
Pfeiffer Vacuum Technology (ADR)* 10,000 280,000
RWE AG ........................... 1,850 99,238
SAP AG ........................... 500 151,616
Schering AG ...................... 400 38,578
SGL Carbon AG+ ................... 8,000 1,022,819
Siemens AG ....................... 2,500 150,782
SKW Trostberg AG ................. 3,000 95,222
Thyssen AG ....................... 150 32,019
Turbon International AG .......... 3,000 64,871
Veba AG .......................... 5,150 350,691
Viag AG .......................... 150 82,131
----------
TOTAL GERMANY (2.8%) ............ 5,326,693
----------
GREECE
A.G. Petzetakis SA* .............. 200,000 1,077,237
Hellenic Telecommunication
Organization SA ................. 15,120 309,788
----------
TOTAL GREECE (0.7%) ............. 1,387,025
----------
HONG KONG
Aeon Credit Service (Asia) Co.
Ltd. ............................ 924,000 202,710
Cheung Kong Holdings ............. 50,000 327,462
Cosco Pacific Ltd. ............... 80,000 65,041
Giordano International Ltd.* .... 200,000 69,041
Hang Seng Bank ................... 5,000 48,232
HSBC Holdings PLC (H.K. $) ...... 14,000 345,077
Hutchison Whampoa ................ 12,000 75,261
JCG Holdings ..................... 250,000 107,272
Swire Pacific Ltd. (Class A) ..... 40,000 219,383
Television Broadcasts Ltd. ...... 86,000 245,270
----------
TOTAL HONG KONG (0.9%) .......... 1,704,749
----------
HUNGARY (0.9%)
Magyar Tavkozlesi Rt (ADR)* ..... 70,000 1,820,000
----------
INDIA
Videsh Sanchar Nigam Ltd. (GDR)* 45,000 581,625
Videsh Sanchar Nigam Ltd. (GDR)*+ 2,000 27,860
----------
TOTAL INDIA (0.3%) .............. 609,485
----------
INDONESIA
Gulf Indonesia Resources Ltd.* .. 51,200 1,126,400
PT Bunas Finance Indonesia ...... 200,000 11,818
PT Citatah ....................... 377,500 49,761
PT Great River International .... 1,367,000 111,845
PT Indosat (ADR) ................. 12,000 231,750
----------
TOTAL INDONESIA (0.8%) .......... 1,531,574
----------
IRELAND
Avonmore Waterford Group PLC .... 464,000 1,703,261
Crean (James) PLC--Units ......... 60,000 122,076
Fyffes PLC ....................... 900,000 1,344,545
Irish Life PLC ................... 200,000 1,136,049
Irish Continental Group PLC ...... 20,000 244,721
----------
TOTAL IRELAND (2.3%) ............ 4,550,652
----------
ISRAEL (0.1%)
Home Centers Ltd.* ............... 15,400 $ 169,400
----------
ITALY
Assicurazioni Generali ........... 5,500 135,090
Banca Commerciale Italiana ...... 10,000 34,765
Danieli & Co. .................... 24,800 170,334
Esaote Biomedica Spa ............. 64,000 169,497
Fiat Spa ......................... 22,000 63,985
Gildemeister Italiana Spa* ...... 42,875 145,664
Industrie Natuzzi Spa (ADR) ..... 20,000 412,500
Istituto Mobiliare Italiano ..... 2,500 29,678
Istituto Naz Delle Assicurazioni 22,500 45,598
Mediaset Spa ..................... 140,000 687,733
Mediolanum Spa + ................. 4,000 75,297
Parmalat Finanziaria Spa ......... 300,000 429,056
Telecom Italia Spa ............... 2,775 17,726
Zucchini Spa ..................... 70,000 502,544
----------
TOTAL ITALY (1.5%) .............. 2,919,467
----------
JAPAN
Aiful Corp.* ..................... 13,800 936,041
Akita Bank ....................... 23,000 89,902
Asahi Bank Ltd. .................. 32,000 129,987
Asahi Diamond Industry Co. Ltd. . 24,000 104,664
Asahi Glass Co. Ltd. ............. 10,000 47,519
Asatsu, Inc. ..................... 17,200 247,833
Bank of Tokyo-Mitsubishi Ltd. ... 70,000 965,702
Bridgestone Corp. ................ 4,000 86,760
Bridgestone Metalpha Corp. ...... 9,000 33,455
Canon, Inc. ...................... 13,000 302,893
Capcom Co. Ltd. .................. 2,600 26,702
Credit Saison Co. ................ 63,000 1,554,781
Daibiru Corp. .................... 14,000 102,472
Dai-Ichi Kangyo Bank ............. 86,000 507,530
Dai Nippon Printing Co. Ltd. .... 3,000 56,333
Daiseki Co. Ltd. ................. 6,400 66,220
Daito Trust Construction Co.
Ltd.............................. 22,000 134,386
Daiwa House Industry Co. Ltd. .... 2,000 10,577
Data Communication System Co. .... 21,000 276,835
DDI Corp. ........................ 115 304,081
Denso Corp. ...................... 4,000 72,044
Doshisha Co. ..................... 1,000 4,905
Eiden Sakakiya Co. Ltd. .......... 18,000 66,909
Enplas Corp. ..................... 19,000 256,294
Enshu* ........................... 34,000 42,476
Familymart Co. ................... 19,000 681,510
Fanuc Ltd......................... 900 34,075
Fuji Bank Ltd. ................... 11,000 44,514
Fuji Soft ABC, Inc. .............. 16,400 561,855
Fujikura Ltd. .................... 104,000 688,684
Fujimi, Inc. ..................... 8,600 365,817
H.I.S. Company Ltd. .............. 1,100 19,138
Hitachi Ltd. ..................... 16,000 114,045
Hitachi Plant Engineering &
Construction Co. ................ 18,000 40,146
Homac Corp. ...................... 7,000 35,355
Home Wide Corp. .................. 15,000 50,010
Honda Motor Co. Ltd............... 5,000 183,560
Hoya Corp. ....................... 24,000 754,167
Imagineer Co. Ltd. ............... 13,000 101,629
39
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Industrial Bank of Japan ......... 9,000 $ 64,150
INES Corp. ....................... 20,000 154,819
Isetan Co. ....................... 63,000 263,154
Ishihara Sangyo Kaisha Ltd.* .... 62,000 68,902
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 62,000 92,661
Ito Yokado Co. Ltd. .............. 2,000 101,935
Japan Airport Terminal Co. Ltd. .. 53,000 333,091
Japan Industrial Land Development 13,000 31,385
Japan Tobacco, Inc. .............. 45 319,372
Kaneshita Construction ........... 12,000 54,263
Kawasaki Heavy Industries Ltd. .. 96,000 148,626
Kawasaki Steel Corp............... 10,000 13,642
Keyence Corp. .................... 200 29,584
Kikuchi Co. Ltd.* ................ 10,000 30,274
King Co. ......................... 38,000 36,405
Kirin Brewery Co. ................ 4,000 29,124
Koa Fire & Marine ................ 10,000 37,555
Kokuyo Co. Ltd. .................. 13,000 224,181
Komatsu Ltd. ..................... 4,000 20,080
Kubota Corp. ..................... 6,000 15,819
Mabuchi Motor Co. ................ 8,600 437,003
Matsuda Sangyo Co. Ltd. .......... 8,000 48,316
Meitec ........................... 51,000 1,434,528
Micronics Japan Co. Ltd. ......... 18,000 310,404
Minebea Co. ...................... 70,000 751,102
Misawa Ceramic Corp. ............. 16,000 39,241
Mitsubishi Corp. ................. 14,000 110,519
Mitsubishi Estate Co. ............ 10,000 108,833
Mitsubishi Heavy Industries Ltd. . 110,000 458,632
Mitsubishi Materials Corp. ...... 6,000 9,657
Mitsubishi Trust & Banking Corp. 31,000 311,247
Mitsui & Co. ..................... 6,000 35,501
Mitsui Home Co. Ltd. ............. 24,000 130,600
NAMCO Ltd. ....................... 5,200 151,048
Namura Shipbuilding .............. 14,000 31,654
Nanno Construction Co. Ltd. ..... 15,000 12,071
NGK Spark Plug Co. ............... 40,000 226,863
NIC Corp. ........................ 42,000 228,550
Nichiei Co. Ltd. ................. 3,900 415,482
Nichiha Corp. .................... 54,400 332,717
Nichii Gakkan Co.* ............... 14,000 482,851
Nikon Corp. ...................... 45,000 444,913
Nintendo Co. Ltd.................. 4,000 392,412
Nippon Broadcasting System ...... 18,000 711,861
Nippon Denwa Shisetsu ............ 22,000 84,307
Nippon Paper Industries Co. ..... 20,000 78,482
Nippon Steel Corp. ............... 27,000 39,939
Nippon System Development ........ 12,000 246,484
Nippon Television Network Corp. . 1,800 528,377
Nireco ........................... 13,000 47,825
Nitta Corp. ...................... 31,000 313,623
Nitto Kohki Co. Ltd. ............. 25,200 274,259
Nomura Securities Co. ............ 8,000 106,687
Noritsu Koki Co. Ltd. ............ 34,600 853,895
Ohmoto Gumi Co. Ltd. ............. 10,000 42,920
Oie Sangyo Co. Ltd. .............. 13,000 53,803
Oji Paper Co. Ltd. ............... 14,000 55,689
Oriental Construction Co. ........ 9,000 39,318
Paris Miki, Inc. ................. 31,000 $ 332,631
PS Corp. ......................... 18,900 71,703
Raito Kogyo Co. Ltd. ............. 40,000 173,213
Ricoh Elemex Corp. ............... 9,000 65,530
Rohm Co. Ltd. .................... 8,000 815,482
Sankyo Co. Ltd. .................. 38,000 859,168
Santen Pharmaceutical Co. Ltd. .. 88,000 1,011,688
Sanyo Chemicals Industries Ltd. .. 9,000 52,424
Sanyo Electric Co. Ltd. .......... 44,000 114,658
Sanyo Engineering & Construction
Co. ............................. 22,000 79,249
Sanyo Pax Co. Ltd. ............... 24,000 207,856
Sanyo Shinpan Finance Co. Ltd. .. 6,200 274,183
Sato Corp. ....................... 38,500 655,068
Sekisui House Ltd. ............... 3,000 19,291
Seven-Eleven Japan Co. Ltd. ..... 14,200 1,005,618
Shimizu Corp. .................... 3,000 6,944
Shizuoka Bank Ltd. ............... 23,000 246,791
Sho Bond Corp. ................... 42,500 768,730
Sodick Co.* ...................... 100,000 286,645
Sony Corp. ....................... 1,000 88,906
SMC Corp. ........................ 9,100 802,069
Suido Kiko Kaisha ................ 8,000 16,064
Sumitomo Bank Ltd. ............... 90,000 1,027,783
Sumitomo Forestry Co. ............ 10,000 48,668
Sumitomo Metal Industries ........ 212,000 271,347
Sumitomo Realty & Development Co.
Ltd. ............................ 109,000 626,557
Taisei Corp. ..................... 4,000 6,561
Taisho Pharmaceutical Co. ........ 20,000 510,443
Takara Printing Co. .............. 12,000 35,869
Takefuji Corp. ................... 26,060 1,196,393
Takihyo Co. Ltd. ................. 14,000 61,161
TDK Corp. ........................ 18,000 1,357,501
Toda Corp. ....................... 14,000 38,092
Toei Co. Ltd. .................... 26,000 94,654
Toho Bank ........................ 40,000 159,418
Toho Titanium* ................... 38,000 320,368
Tokio Marine & Fire Insurance Co. 6,000 68,059
Tokyo Broadcasting System, Inc. .. 35,000 442,614
Tokyo Cathode Laboratory Co.* .... 19,700 194,773
Tokyo Electric Power Co. ......... 7,000 127,687
Tokyo Electron ................... 1,000 32,037
Toso Co. Ltd. .................... 18,000 82,085
TOWA Corp. ....................... 5,300 110,082
Toyoda Gosei ..................... 20,000 72,351
Wesco, Inc. ...................... 6,200 15,206
Xebio Co. Ltd. ................... 3,200 25,507
Yamaichi Electronics Co. Ltd. .... 22,000 354,091
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 68,000 1,459,283
Yamato Transport Co. Ltd.......... 6,000 80,475
Yaskawa Electric Corp. ........... 10,000 24,909
Yokogawa Electric Corp. .......... 96,000 593,033
-----------
TOTAL JAPAN (20.6%) ............. 39,943,359
-----------
MALAYSIA
AMMB Holdings BHD ................ 50,000 32,781
Arab Malaysian Finance BHD ...... 140,000 28,076
Guinness Anchor BHD .............. 30,000 37,023
Hong Leong Bank BHD .............. 140,000 92,146
40
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
IOI Corp. BHD .................... 100,000 $ 32,395
Kim Hin Industry BHD ............. 12,000 2,113
Kumpulan Guthrie BHD ............. 33,000 21,211
Lingkaran Trans Kota Holdings
BHD* ............................ 130,000 82,890
Magnum Corp. BHD ................. 74,000 44,520
Malayan Banking BHD .............. 24,000 69,726
Mancon BHD ....................... 76,666 27,793
Metacorp BHD ..................... 120,000 50,906
Pacific & Orient BHD ............. 80,000 36,611
Pernas International Hotels
Holdings BHD .................... 462,000 128,284
Resorts World BHD ................ 20,000 33,680
RJ Reynolds BHD .................. 70,000 114,282
Sap Holdings BHD.................. 36,000 13,421
Sime Darby BHD ................... 150,000 144,234
Sriwani Holdings BHD ............. 180,000 47,667
Star Publications BHD ............ 25,000 28,538
Talam Corp. BHD .................. 315,000 74,508
Tanjong PLC ...................... 100,000 165,831
UMW Holdings BHD ................. 150,000 113,768
-----------
TOTAL MALAYSIA (0.7%) ........... 1,422,404
-----------
MEXICO
Bufete Industrial S.A.* .......... 10,000 97,500
Elamex S.A. de C.V.* ............. 32,600 244,500
Grupo Electra S.A. de C.V. ...... 500,000 882,134
Grupo Financiero Banamex Accival
(B Shares)* ..................... 50,000 149,504
Grupo Industrial Saltillo SA
(B Shares)....................... 236,000 898,908
Industrias CH S.A. (B Shares)* .. 120,000 714,640
Kimberly-Clark de Mexico S.A. de
C.V. ............................ 30,000 710,757
Panamerican Beverages, Inc. ..... 10,000 326,250
Sanluis Corporacion S.A. de
C.V.*............................ 28,000 227,543
-----------
TOTAL MEXICO (2.2%) ............. 4,251,736
-----------
NETHERLANDS
ABN Amro Holding N.V. ............ 5,824 113,455
Aegon N.V. ....................... 8,000 712,154
Akzo Nobel N.V. .................. 3,000 517,249
ASR Verzekeringsgroep N.V. ...... 21,400 1,164,116
Content Beheer N.V. + ............ 30,000 739,773
Elsevier N.V. .................... 16,955 274,270
Fortis Amev N.V. ................. 10,000 435,973
Fugro N.V.* ...................... 30,000 914,359
Gucci Group N.V. ................. 2,000 83,750
Heineken N.V. .................... 233 40,564
Hunter Douglas N.V. .............. 6,000 210,095
IHC Caland N.V. .................. 4,000 207,531
ING Groep N.V. ................... 28,000 1,179,296
KLM .............................. 1,700 62,881
Koninklijke Nedlloyd Groep N.V.+ . 2,250 51,044
Kon. PTT Nederland + ............. 8,000 333,785
Nutricia Verenigde Bedrijven
N.V.+ ........................... 19,000 576,283
Royal Dutch Petroleum ............ 9,948 546,057
Unilever N.V. CVA ................ 2,968 182,970
Unique International N.V. ........ 30,000 639,164
Vedior N.V. CVA................... 70,000 1,260,079
Vendex International N.V. ........ 3,600 198,673
-----------
TOTAL NETHERLANDS (5.4%) ........ 10,443,521
-----------
NEW ZEALAND
Air New Zealand Ltd. (B Shares) .. 109,000 $ 218,353
Restaurant Brands NZ Ltd.*+ ..... 312,500 308,470
Sky City Ltd. .................... 35,300 119,907
Tourism Holdings Ltd. ............ 15,000 10,277
Warehouse Group Ltd. ............. 110,000 293,809
-----------
TOTAL NEW ZEALAND (0.5%) ........ 950,816
-----------
NORWAY
Alvern Norway ASA* ............... 120,000 284,329
Choice Hotels Scandinavia ASA*+ . 472,500 1,599,353
Frontline Ltd.* .................. 300,000 1,210,431
Hafslund ASA ..................... 5,000 23,830
Navia ASA* ....................... 94,000 330,905
Norsk Hydro ASA .................. 1,100 53,542
Tomra Systems ASA ................ 58,000 1,295,730
Union Bank of Norway ............. 12,000 427,306
-----------
TOTAL NORWAY (2.7%) ............. 5,225,426
-----------
PANAMA (0.4%)
Banco Latinoamericano de
Exportaciones S.A.
(E Shares) ...................... 20,000 827,500
-----------
PERU (0.7%)
Telefonica del Peru S.A. (ADR) .. 54,000 1,258,875
-----------
POLAND (0.7%)
@Entertainment, Inc.* ............ 117,000 1,301,625
-----------
PORTUGAL
BPI-SGPS SA* ..................... 20,000 486,281
Brisa-Auto Estradas de Portugal
SA* ............................. 5,600 200,602
Electricidade de Portugal SA* .... 38,105 721,521
Portugal Telecom SA .............. 8,710 404,148
Telecel Comunicacoes Pessoais SA* 13,290 1,416,011
-----------
TOTAL PORTUGAL (1.7%) ........... 3,228,563
-----------
SINGAPORE
City Developments Ltd. ........... 50,000 231,936
GP Batteries International Ltd. . 140,000 364,674
Great Eastern Life Assurance Co. . 7,000 42,046
Keppel Fels Ltd. ................. 88,000 245,971
Singapore Airlines Ltd. .......... 50,000 327,089
Singapore Land Ltd. .............. 93,000 204,639
United Overseas Bank Ltd. ........ 40,000 222,420
-----------
TOTAL SINGAPORE (0.8%) .......... 1,638,775
-----------
SOUTH KOREA (0.2%)
SK Telecom Co. Ltd. (ADR)*........ 65,776 427,544
-----------
SPAIN
Aldeasa SA* ...................... 24,745 524,623
Aguas de Barcelona ............... 6,060 249,798
Banco Bilbao Vizcaya SA .......... 4,881 157,948
Banco de Valencia ................ 30,000 648,835
Banco Santander SA ............... 3,468 115,867
Catalana Occidente SA + .......... 15,600 794,591
Catalana Occidente SA ............ 5,400 275,051
Construcciones y Auxiliar de
Ferrocarriles SA ................ 500 18,444
Corp Financiera Reunida SA* ..... 100,000 534,952
Corporacion Mapfre Cia Inter SA .. 36,000 954,644
41
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Endesa SA......................... 4,488 $ 79,685
Gas Y Electridad SA (Series 2) .. 14,000 1,010,830
Hidroelectrica del Cantabrico ... 10,000 438,464
Iberdrola SA ..................... 35,668 469,408
Portland Valderrivas SA .......... 3,800 341,713
Repsol SA ........................ 4,392 187,384
Tabacalera SA-A .................. 12,200 988,973
Telefonica de Espana ............. 26,528 757,445
----------
TOTAL SPAIN (4.4%) .............. 8,548,655
----------
SWEDEN
Astra AB (A Shares) .............. 20,000 346,352
Castellum AB* .................... 79,000 786,030
Dahl International AB + .......... 32,000 471,542
Ericsson LM (B Shares) ........... 6,400 240,608
Forenings Sparbanken AB
(A Shares) ...................... 10,000 227,333
Kalmar Industries AB + ........... 10,000 161,211
Karlshamns AB*+ .................. 38,000 593,458
NetCom Systems AB (B Shares)* ... 25,650 550,804
Scandic Hotels AB*+ .............. 73,600 1,798,310
Skandia Forsakrings AB ........... 11,000 518,835
Skandinaviska Enskilda Banken
(Series A) ...................... 95,120 1,203,990
Swedish Match AB ................. 254,700 850,080
----------
TOTAL SWEDEN (4.0%) ............. 7,748,553
----------
SWITZERLAND
ABB AG ........................... 200 251,284
Ciba Specialty Chemicals AG* .... 8,600 1,024,581
Credit Suisse Group .............. 1,250 193,427
Nestle SA ........................ 300 449,641
Novartis AG ...................... 542 879,521
Roche Holding AG Genusscheine .... 80 794,522
Schweizerische
Rueckversicherungs-Gesellschaft . 120 224,471
Selecta Group* ................... 10,400 1,395,687
Tag Heuer International SA (ADR)* 35,000 288,750
Union Bank of Switzerland ........ 120 173,530
----------
TOTAL SWITZERLAND (2.9%) ........ 5,675,414
----------
THAILAND
CMIC Finance & Securities Public
Co. Ltd. ........................ 51,000 0
Nation Multimedia Group
Public Co. Ltd................... 130,000 34,424
Thai Engine Manufacturing
Public Co. Ltd. ................. 70,000 117,757
----------
TOTAL THAILAND (0.1%) ........... 152,181
----------
UNITED KINGDOM
Amvescap PLC ..................... 80,000 687,559
Barclays PLC ..................... 24,000 638,128
Bass PLC ......................... 14,200 220,398
BG PLC ........................... 22,077 99,406
BG PLC 'B'* ...................... 25,021 11,924
BOC Group PLC .................... 2,591 42,621
Boots Co. PLC .................... 5,806 83,627
BPB PLC .......................... 70,000 391,106
British Aerospace ................ 2,120 60,444
British Airport Authority PLC ... 30,000 245,510
British Airways PLC............... 38,000 349,695
British Energy PLC ............... 240,000 $1,668,283
British Petroleum Co. PLC ........ 29,367 386,071
British Sky Broadcasting Group
PLC ............................. 8,097 60,675
British Telecommunications PLC ... 35,150 276,392
BTR PLC .......................... 21,470 64,918
Cable & Wireless PLC.............. 12,409 109,096
Cadbury Schweppes PLC ............ 5,961 60,097
Carlton Communications PLC ...... 167,300 1,292,147
Carpetright PLC .................. 50,000 377,960
Commercial Union PLC ............. 2,801 39,079
Compass Group PLC ................ 170,000 2,092,419
De La Rue PLC .................... 10,000 65,075
Diageo PLC ....................... 105,307 968,223
Dixons Group PLC ................. 120,000 1,204,871
EMI Group PLC .................... 50,000 417,399
Energis PLC* ..................... 275,000 1,152,367
Energy Group PLC ................. 4,456 49,208
Filtronic Comtek PLC ............. 180,000 1,308,892
Flextech PLC* .................... 46,000 398,370
General Accident PLC.............. 2,904 50,346
General Electric Co. PLC ......... 13,890 90,047
GKN PLC .......................... 2,089 42,808
Glaxo Wellcome PLC ............... 23,220 549,468
Granada Group PLC ................ 3,225 49,287
Great Universal Stores PLC ...... 3,970 50,038
HSBC Holdings PLC ................ 10,000 246,824
Hanson PLC ....................... 5,571 24,867
Harvey Nichols PLC ............... 70,000 218,559
Holliday Chemical Holdings PLC ... 400,000 1,511,840
House of Fraser PLC .............. 140,000 462,426
Imperial Chemical Industries PLC . 3,109 48,587
Imperial Tobacco Group PLC ...... 125,000 786,732
Jefferson Smurfit Group PLC ..... 200,000 555,437
Johnson Matthey PLC .............. 55,000 492,580
Kingfisher PLC ................... 4,084 56,911
Ladbroke Group PLC ............... 150,000 650,749
Land Securities PLC .............. 3,207 51,120
Legal & General Group PLC......... 7,475 65,349
Lloyds TSB Group PLC ............. 34,379 444,617
LucasVarity PLC .................. 160,000 565,297
Marks & Spencer PLC............... 17,109 168,411
McBride PLC ...................... 20,000 58,173
MEPC PLC ......................... 70,000 584,359
Mirror Group PLC ................. 40,000 128,178
Misys (Jersey) Ltd.*.............. 3,428 103,652
Misys PLC ........................ 12,000 362,842
National Grid Group PLC .......... 260,000 1,234,779
National Power PLC ............... 100,000 985,983
Norwich Union PLC* ............... 80,000 512,711
Peninsular & Oriental Steam
Navigation Co. .................. 3,314 37,713
Powerscreen International PLC .... 40,000 401,593
Prudential Corp. PLC.............. 8,019 96,724
Randgold Resources Ltd. (GDR)*+ . 30,300 159,075
Rank Group PLC ................... 12,574 70,047
Reed International PLC............ 60,000 601,449
Rentokil Initial PLC ............. 162,900 709,390
Rio Tinto PLC .................... 5,510 67,819
Shandwick International PLC ..... 80,000 54,229
42
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Smith & Nephew PLC ............... 55,000 $ 162,687
Smith (W.H.) Group PLC ........... 60,000 383,547
Smithkline Beecham PLC ........... 90,000 921,401
Tesco PLC ........................ 12,625 102,696
Thistle Hotels PLC ............... 94,000 244,959
Thorn PLC ........................ 102,857 267,060
Tomkins PLC ...................... 25,000 119,550
Unilever PLC...................... 19,628 168,047
Vodafone Group PLC................ 100,000 721,411
WPP Group PLC .................... 55,000 244,935
Zeneca Group PLC ................. 10,336 362,974
------------
TOTAL UNITED KINGDOM (16.4%) .... 31,872,243
------------
TOTAL COMMON STOCKS
AND OTHER INVESTMENTS (92.4%)
(Cost $191,125,818).............. 179,183,005
------------
PREFERRED STOCKS:
AUSTRALIA (0.2%)
Village Roadshow Ltd. ............ 160,000 328,956
------------
BRAZIL (0.0%)
Dixie Toga SA .................... 59,000 30,133
------------
FINLAND (0.2%)
Nokia Oyj (A Shares).............. 4,000 283,987
------------
GERMANY
Fielmann AG ...................... 4,000 86,717
Fresenius AG ..................... 1,200 218,127
ProSieben Media AG* .............. 7,000 321,021
------------
TOTAL GERMANY (0.3%) ............ 625,865
------------
TOTAL PREFERRED STOCKS (0.7%)
(Cost $1,410,542) ............... 1,268,941
------------
</TABLE>
<TABLE>
<CAPTION>
========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (1.3%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ......... $2,500,000 $ 2,499,583
------------
TOTAL SHORT-TERM DEBT SECURITIES (1.3%)
(Amortized Cost
$2,499,583)................. 2,499,583
------------
TOTAL INVESTMENTS (94.4%)
(Cost/Amortized Cost $195,035,943) 182,951,529
OTHER ASSETS
LESS LIABILITIES (5.6%) ... 10,945,647
------------
NET ASSETS (100.0%) ......... $193,897,176
============
</TABLE>
- -----------------------------------------------------------------------------
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Equity Investments
<TABLE>
<CAPTION>
<S> <C>
Basic Materials ....... 5.1%
Business Services .... 8.9
Capital Goods ......... 8.1
Consumer Cyclicals .... 19.3
Consumer
Non-Cyclicals.......... 15.3
Credit Sensitive ...... 26.8
Diversified ........... 1.8
Energy ................ 5.6
Technology ............ 9.1
-----
100.0%
=====
</TABLE>
<PAGE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $12,924,625
or 6.7% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
43
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
====================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS--SPECIALTY (4.2%)
Crompton & Knowles Corp.+ ............ 5,200,000 $ 137,800,000
Cytec Industries, Inc.* .............. 1,275,000 59,845,312
--------------
197,645,312
--------------
METALS & MINING (1.5%)
Newmont Mining Corp. ................. 2,300,000 67,562,500
--------------
STEEL (0.9%)
AK Steel Holding Corp. ............... 419,600 7,421,675
Ispat International NV
(New York Registered Shares)* ...... 1,500,000 32,437,500
--------------
39,859,175
--------------
TOTAL BASIC MATERIALS (6.6%) ....... 305,066,987
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (2.4%)
USA Waste Services, Inc.* ............ 223,800 8,784,150
U.S. Filter Corp.* ................... 3,491,900 104,538,756
--------------
113,322,906
--------------
PRINTING, PUBLISHING &
BROADCASTING (3.7%)
Comcast Corp. (Class A) SPL .......... 5,500,000 173,593,750
--------------
PROFESSIONAL SERVICES (1.6%)
Cambridge Technology Partners, Inc.* 428,900 17,852,962
Corrections Corp. of America* ....... 1,100,000 40,768,750
TeleTech Holdings, Inc.* ............. 1,197,600 13,622,721
--------------
72,244,433
--------------
TOTAL BUSINESS SERVICES (7.7%) ..... 359,161,089
--------------
CONSUMER CYCLICALS
AIRLINES (10.1%)
Continental Airlines, Inc.
(Class B)*+ ......................... 4,438,200 213,588,375
Delta Air Lines, Inc. ................ 1,500,000 178,500,000
Northwest Airlines Corp.
(Class A)* .......................... 1,634,500 78,251,687
--------------
470,340,062
--------------
APPAREL, TEXTILE (6.1%)
Jones Apparel Group, Inc.* ........... 2,339,200 100,585,600
Mohawk Industries, Inc.* ............. 3,150,000 69,103,125
Tommy Hilfiger Corp.*+ ............... 1,939,500 68,124,937
UNIFI, Inc. .......................... 1,200,000 48,825,000
--------------
286,638,662
--------------
AUTO RELATED (7.6%)
Circuit City Stores, Inc.-CarMax
Group*+ ............................. 6,260,700 56,346,300
Republic Industries, Inc.* ........... 12,700,000 296,068,750
--------------
352,415,050
--------------
AUTOS & TRUCKS (0.7%)
Harley-Davidson, Inc. ................ 1,200,000 32,850,000
--------------
FOOD SERVICES, LODGING (6.4%)
Extended Stay America, Inc.* ......... 1,886,100 23,458,369
Florida Panthers Holdings, Inc.* .... 1,685,300 $ 29,071,425
Host Marriott Corp.* ................. 2,053,600 40,301,900
ITT Corp.* ........................... 2,300,000 190,612,500
Starbucks Corp.* ..................... 95,000 3,645,625
Suburban Lodges of America, Inc.*+ ... 904,000 12,034,500
--------------
299,124,319
--------------
<PAGE>
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Industrie Natuzzi Spa (ADR) .......... 2,240,700 46,214,438
--------------
LEISURE RELATED (1.8%)
Callaway Golf Company ................ 1,254,800 35,840,225
Promus Hotel Corp.* .................. 1,120,000 47,040,000
--------------
82,880,225
--------------
RETAIL--GENERAL (2.9%)
Pep Boys-Manny, Moe & Jack ........... 1,096,600 26,181,325
PETsMART, Inc.* ...................... 1,435,200 10,405,200
Proffitt's, Inc.* .................... 400,000 11,375,000
Tiffany & Co. ........................ 1,563,300 56,376,506
U.S. Office Products Co.* ............ 1,507,000 29,574,875
--------------
133,912,906
--------------
TOTAL CONSUMER CYCLICALS (36.6%) 1,704,375,662
--------------
CONSUMER NONCYCLICALS
DRUGS (6.2%)
Centocor, Inc.*+ ..................... 5,036,500 167,463,625
Genzyme Corp. (General Division)* .... 2,375,000 65,906,250
MedImmune, Inc.*+ .................... 1,339,800 57,443,925
--------------
290,813,800
--------------
HOSPITAL SUPPLIES &
SERVICES (0.7%)
Sun Healthcare Group, Inc.* .......... 1,649,900 31,966,813
--------------
SOAPS & TOILETRIES (0.9%)
Estee Lauder Companies
(Class A) ........................... 828,900 42,636,544
--------------
TOTAL CONSUMER NONCYCLICALS (7.8%) 365,417,157
--------------
CREDIT SENSITIVE
BANKS (0.8%)
GreenPoint Financial Corp. ........... 527,100 38,247,694
--------------
FINANCIAL SERVICES (4.0%)
Edwards (A.G.), Inc. ................. 1,050,000 41,737,500
Green Tree Financial Corp. ........... 1,822,400 47,724,100
Newcourt Credit Group, Inc. .......... 1,000,000 33,375,000
Paine Webber Group, Inc. ............. 1,200,000 41,475,000
PMI Group, Inc. ...................... 290,000 20,970,625
--------------
185,282,225
--------------
INSURANCE (4.6%)
AFLAC, Inc. .......................... 500,000 25,562,500
CNA Financial Corp.* ................. 1,493,700 190,820,175
--------------
216,382,675
--------------
REAL ESTATE (2.1%)
Security Capital Group, Inc.
(Class B)*+ ......................... 1,184,900 38,509,250
Vornado Realty Trust ................. 1,310,346 61,504,383
--------------
100,013,633
--------------
44
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
====================================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------------
UTILITY--TELEPHONE (2.9%)
Telephone & Data Systems, Inc.+ ..... 2,863,300 $ 133,322,406
--------------
TOTAL CREDIT SENSITIVE (14.4%) . .. 673,248,633
--------------
ENERGY
OIL--DOMESTIC (1.7%)
Ultramar Diamond Shamrock Corp. ...... 1,090,200 34,750,125
Valero Energy Corp. .................. 1,450,000 45,584,375
--------------
80,334,500
--------------
OIL--SUPPLIES &
CONSTRUCTION (6.6%)
Diamond Offshore Drilling, Inc. ..... 4,000,000 192,500,000
Rowan Cos., Inc.* .................... 3,700,000 112,850,000
--------------
305,350,000
--------------
RAILROADS (1.7%)
Kansas City Southern Industries,
Inc.................................. 1,600,000 50,800,000
Wisconsin Central Transport Corp.* .. 1,300,000 30,387,500
--------------
81,187,500
--------------
TOTAL ENERGY (10.0%) ................ 466,872,000
--------------
TECHNOLOGY
ELECTRONICS (7.7%)
Altera Corp.* ........................ 1,197,500 39,667,188
Atmel Corp.* ......................... 1,347,000 25,003,688
KLA-Tencor Corp.* .................... 660,900 25,527,263
Network Associates, Inc.* ............ 1,548,100 81,855,787
Parametric Technology Corp.* ......... 785,100 37,194,113
Sterling Commerce, Inc.* ............. 1,674,800 64,375,125
Teradyne, Inc.* ...................... 1,016,100 32,515,200
Xilinx, Inc.* ........................ 1,477,200 51,794,325
--------------
357,932,689
--------------
OFFICE EQUIPMENT SERVICES (1.5%)
Comverse Technology, Inc.*+ .......... 1,859,500 $ 72,520,500
--------------
TELECOMMUNICATIONS (3.1%)
ADC Telecommunications, Inc.* ....... 796,700 33,262,225
American Satellite Network--Warrants* 49,450 0
Millicom International Cellular SA* .. 2,378,400 89,487,300
U.S. Cellular Corp.* ................. 658,300 20,407,300
--------------
143,156,825
--------------
TOTAL TECHNOLOGY (12.3%) ............ 573,610,014
--------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (95.4%)
(Cost $4,029,993,201) ............... 4,447,751,542
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (0.8%)
Federal Home Loan Mortgage Corp.
6.0%, due 01/02/98 .................. $37,200,000 37,193,800
--------------
TOTAL SHORT-TERM DEBT SECURITIES (0.8%)
(Amortized Cost $37,193,800)......... 37,193,800
--------------
TOTAL INVESTMENTS (96.2%)
(Cost/Amortized Cost $4,067,187,001) 4,484,945,342
OTHER ASSETS
LESS LIABILITIES (3.8%).............. 178,311,961
--------------
NET ASSETS (100.0%) .................. $4,663,257,303
==============
</TABLE>
<PAGE>
- ------------
* Non-income producing.
+ Affiliated company as defined under the Investment Company Act of 1940
(See Note 6).
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
45
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS--SPECIALTY (3.7%)
Crompton & Knowles Corp. ......... 140,200 $ 3,715,300
Cytec Industries, Inc.* .......... 32,000 1,502,000
-----------
5,217,300
-----------
METALS & MINING (1.6%)
Century Aluminum Co. ............. 18,500 249,750
Gibraltar Steel Corp.* ........... 45,600 900,600
Kaiser Aluminum Corp.* ........... 119,700 1,054,856
-----------
2,205,206
-----------
STEEL (0.7%)
WHX Corp.* ....................... 87,300 1,036,687
-----------
TOTAL BASIC MATERIALS (6.0%) ... 8,459,193
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (3.5%)
American Disposal Services,
Inc.*............................ 35,400 1,292,100
Philip Services Corp.* ........... 70,200 1,009,125
Superior Services, Inc.* ......... 52,900 1,527,487
U.S. Filter Corp.* ............... 34,800 1,041,825
-----------
4,870,537
-----------
PRINTING, PUBLISHING &
BROADCASTING (5.7%)
Applied Graphics Technologies,
Inc.* ........................... 24,800 1,320,600
Mail-Well, Inc.* ................. 19,600 793,800
Sinclair Broadcast Group, Inc.* . 66,600 3,105,225
Westwood One, Inc.* .............. 17,900 664,537
Young Broadcasting Corp.
(Class A)* ...................... 56,600 2,193,250
-----------
8,077,412
-----------
PROFESSIONAL SERVICES (11.0%)
Carematrix Corp.* ................ 77,700 2,233,875
Consolidation Capital Corp.* .... 52,800 1,072,500
CORESTAFF, Inc.* ................. 72,500 1,921,250
Cornell Corrections, Inc.* ...... 56,000 1,162,000
Data Processing Resources Corp.* 73,600 1,876,800
Equity Corp. International* ..... 56,400 1,304,250
Ha-Lo Industries, Inc.* .......... 138,800 3,608,800
Snyder Communications, Inc.* .... 43,700 1,595,050
TeleTech Holdings, Inc.* ......... 61,100 695,013
-----------
15,469,538
-----------
TRUCKING, SHIPPING (3.0%)
C.H. Robinson Worldwide, Inc. ... 61,700 1,380,537
Knightsbridge Tankers Ltd. ...... 53,400 1,511,887
OMI Corp.* ....................... 150,000 1,378,125
-----------
4,270,549
-----------
TOTAL BUSINESS SERVICES (23.2%) 32,688,036
-----------
CAPITAL GOODS
AEROSPACE (0.9%)
DONCASTERS PLC (ADR)* ............ 56,300 1,189,337
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (2.0%)
Buckeye Technologies, Inc.* ..... 31,500 $ 1,456,875
Hughes Supply, Inc. .............. 40,750 1,423,703
-----------
2,880,578
-----------
TOTAL CAPITAL GOODS (2.9%) ..... 4,069,915
-----------
CONSUMER CYCLICALS
AIRLINES (2.9%)
Alaska Air Group, Inc.* .......... 45,200 1,751,500
Atlantic Coast Airlines, Inc.* .. 75,500 2,397,125
-----------
4,148,625
-----------
APPAREL, TEXTILE (5.1%)
Mohawk Industries, Inc.* ......... 143,300 3,143,644
Nautica Enterprises, Inc.* ...... 80,700 1,876,275
Tommy Hilfiger Corp.* ............ 21,200 744,650
Wolverine World Wide, Inc. ...... 61,000 1,380,125
-----------
7,144,694
-----------
AUTO RELATED (5.8%)
Avis Rent A Car, Inc.* ........... 47,300 1,510,644
Budget Group, Inc. (Class A)* ... 106,300 3,673,994
Dollar Thrifty Automotive Group,
Inc.* ........................... 67,500 1,383,750
Federal-Mogul Corp. .............. 38,800 1,571,400
-----------
8,139,788
-----------
AUTOS & TRUCKS (1.4%)
Cross-Continent Auto Retailers,
Inc.* ........................... 107,700 901,987
Miller Industries, Inc.* ......... 105,700 1,136,275
-----------
2,038,262
-----------
FOOD SERVICES, LODGING (4.3%)
American General Hospitality
Corp. ........................... 51,000 1,364,250
Innkeepers USA Trust ............. 89,700 1,390,350
Interstate Hotels Co.* ........... 31,500 1,104,469
Prime Hospitality Corp.* ......... 62,000 1,263,250
The Cheesecake Factory* .......... 30,100 918,050
-----------
6,040,369
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (1.9%)
Furniture Brands
International, Inc.* ............ 82,200 1,685,100
Industrie Natuzzi Spa (ADR) ..... 49,700 1,025,063
-----------
2,710,163
-----------
LEISURE RELATED (0.4%)
Bally Total Fitness Holding
Corp.* .......................... 22,500 492,187
-----------
RETAIL--GENERAL (4.0%)
Abercrombie & Fitch Co.
(Class A)* ...................... 44,800 1,400,000
Brylane, Inc.* ................... 29,300 1,443,025
Central Garden & Pet Co.* ........ 45,200 1,186,500
Pacific Sunwear of California* .. 56,350 1,665,847
-----------
5,695,372
-----------
TOTAL CONSUMER CYCLICALS (25.8%) 36,409,460
-----------
46
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
===========================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
CONSUMER NONCYCLICALS
CONTAINERS (1.8%)
Ivex Packaging Corp.* ............ 66,500 $ 1,596,000
Silgan Holdings, Inc.* ........... 29,500 958,750
-----------
2,554,750
-----------
DRUGS (4.9%)
Creative BioMolecules, Inc.* .... 124,800 920,400
Geltex Pharmaceuticals, Inc.* ... 58,200 1,542,300
Inhale Therapeutic Systems* ..... 2,200 57,200
Jones Medical Industries, Inc. .. 61,000 2,333,250
Medicis Pharmaceutical Corp.
(Class A)* ...................... 19,800 1,012,275
MedImmune, Inc.* ................. 24,400 1,046,150
-----------
6,911,575
-----------
HOSPITAL SUPPLIES & SERVICES (3.1%)
Mid Atlantic Medical Services,
Inc.* ........................... 74,100 944,775
National Surgery Centers, Inc.* . 71,850 1,886,063
NovaCare, Inc.* .................. 102,600 1,340,213
Novoste Corp.* ................... 9,500 213,750
-----------
4,384,801
-----------
RETAIL--FOOD (1.0%)
United Natural Foods, Inc.* ..... 55,500 1,443,000
-----------
TOTAL CONSUMER NONCYCLICALS (10.8%) 15,294,126
-----------
CREDIT SENSITIVE
BANKS (0.7%)
Friedman, Billings, Ramsey Group,
Inc.* ........................... 54,400 975,800
-----------
FINANCIAL SERVICES (2.8%)
Affiliated Managers Group, Inc.* . 46,300 1,342,700
FIRSTPLUS Financial Group, Inc.* 41,900 1,607,913
Healthcare Financial Partners,
Inc.* ........................... 29,200 1,036,600
-----------
3,987,213
-----------
REAL ESTATE (2.2%)
Glenborough Realty Trust, Inc. .. 64,400 1,907,850
Macerich Co. ..................... 38,900 1,108,650
-----------
3,016,500
-----------
UTILITY--ELECTRIC (0.2%)
Calpine Corp.* ................... 22,300 331,712
-----------
TOTAL CREDIT SENSITIVE (5.9%) .. 8,311,225
-----------
ENERGY
OIL--DOMESTIC (1.2%)
Basin Exploration, Inc.* ......... 61,000 1,082,750
Costilla Energy, Inc.* ........... 62,400 678,600
-----------
1,761,350
-----------
OIL--SUPPLIES & CONSTRUCTION (2.0%)
Oceaneering International, Inc.* 46,900 $ 926,275
Parker Drilling Co.* ............. 150,800 1,837,875
-----------
2,764,150
-----------
RAILROADS (0.7%)
Genesee & Wyoming, Inc.
(Class A)* ...................... 45,300 1,058,888
-----------
TOTAL ENERGY (3.9%) ............. 5,584,388
-----------
<PAGE>
TECHNOLOGY
ELECTRONICS (5.6%)
Check Point Software Technologies
Ltd.* ........................... 8,700 354,525
Excite, Inc.* .................... 12,000 360,000
Hadco Corp.* ..................... 27,500 1,244,375
Harbinger Corp.* ................. 16,600 466,875
Information Management Resources,
Inc.* ........................... 21,000 787,500
Insight Enterprises, Inc.* ...... 7,200 264,600
Lycos, Inc.* ..................... 30,800 1,274,350
MetaCreations Corp.* ............. 64,700 719,788
PMC-Sierra, Inc.* ................ 47,600 1,475,600
3D Labs, Inc. Ltd.* .............. 38,900 904,425
-----------
7,852,038
-----------
OFFICE EQUIPMENT (2.7%)
Discreet Logic, Inc.* ............ 70,400 1,544,400
Platinum Technology, Inc.* ...... 38,400 1,084,800
Sterling Software, Inc.* ......... 29,800 1,221,800
-----------
3,851,000
-----------
OFFICE EQUIPMENT SERVICES (3.8%)
Comverse Technology, Inc.* ...... 88,600 3,455,400
ENCAD, Inc.* ..................... 25,300 695,750
Oak Technology, Inc.* ............ 125,800 817,700
Saville Systems Ireland PLC
(ADR)* .......................... 8,200 340,300
-----------
5,309,150
-----------
TELECOMMUNICATIONS (6.9%)
ACC Corp.* ....................... 59,300 2,994,650
Comnet Cellular, Inc.* ........... 3,200 113,800
ICG Communications, Inc.* ........ 81,200 2,212,700
Level One Communications, Inc.* . 32,700 923,775
MetroNet Communications Corp.
(Class B)* ...................... 51,500 894,812
Millicom International Cellular
SA* ............................. 38,500 1,448,563
Mobile Telecommunication
Technologies Corp.* ............. 51,800 1,139,600
-----------
9,727,900
-----------
TOTAL TECHNOLOGY (19.0%) ........ 26,740,088
-----------
TOTAL COMMON STOCKS (97.5%)
(Cost $136,812,737).............. 137,556,431
-----------
</TABLE>
47
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (11.6%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 .......... $16,300,000 $ 16,297,283
------------
TOTAL SHORT-TERM DEBT SECURITIES (11.6%)
(Amortized Cost
$16,297,283)................. 16,297,283
------------
TOTAL INVESTMENTS (109.1%)
(Cost/Amortized Cost $153,110,020) 153,853,714
OTHER ASSETS
LESS LIABILITIES (-9.1%) ... (12,854,262)
------------
NET ASSETS (100.0%) .......... $140,999,452
============
</TABLE>
- ------------
* Non-income producing.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
48
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.2%)
Akzo Nobel N.V. .................. 600 $ 103,450
Bayer AG ......................... 4,535 168,271
Ciba Specialty Chemicals AG* .... 900 107,224
Hitachi Chemical Co. Ltd. ........ 15,000 89,097
Holliday Chemical Holdings PLC ... 23,700 89,577
Kuraray Co. Ltd. ................. 10,000 82,774
Nippon Chemi-Con Corp. ........... 6,000 13,934
Toagosei Co. Ltd. ................ 15,000 21,153
----------
675,480
----------
CHEMICALS--SPECIALTY (0.1%)
Cytec Industries, Inc.* .......... 4,800 225,300
NGK Insulators ................... 10,000 88,905
----------
314,205
----------
METALS & MINING (0.0%)
Bethlehem Steel Corp.* ........... 15,000 129,375
Toho Titanium* ................... 1,000 8,431
----------
137,806
----------
PAPER (0.1%)
Jefferson Smurfit Corp.* ......... 8,000 113,000
KNP BT (Kon) N.V. ................ 6,000 138,190
Nippon Paper Industries Co. ..... 2,000 7,847
Stone Container Corp.* ........... 5,800 60,538
UMP-Kymmene Oy ................... 2,810 56,190
----------
375,765
----------
STEEL (0.1%)
Koninklijke Hoogovens N.V. ...... 2,000 81,967
NatSteel Ltd. .................... 25,000 33,898
Pohang Iron & Steel Co. Ltd.
(ADR) ........................... 2,000 34,875
Rautaruukki Oy ................... 8,095 65,343
Usinor Sacilor ................... 5,280 76,237
----------
292,320
----------
TOTAL BASIC MATERIALS (0.5%) ... 1,795,576
----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.5%)
USA Waste Services, Inc.* ........ 21,500 843,875
Waste Management, Inc. ........... 23,400 643,500
----------
1,487,375
----------
PRINTING, PUBLISHING &
BROADCASTING (1.0%)
Carlton Communications PLC ...... 15,500 119,715
CBS Corp. ........................ 17,000 500,438
Liberty Media Group (Class A)* ... 29,020 1,051,975
New Straits Times Press BHD ..... 8,000 9,914
New York Times Co. (Class A) .... 12,160 804,080
Nippon Television Network Corp.
100 29,354
Reader's Digest Association, Inc.
(Class A) ....................... 5,000 118,125
Television Broadcasts Ltd. ...... 1,000 2,852
Time Warner, Inc. ................ 6,200 384,400
Tokyo Broadcasting System, Inc. .. 1,000 12,645
United News & Media PLC .......... 10,812 123,128
----------
3,156,626
----------
PROFESSIONAL SERVICES (0.0%)
Asatsu, Inc. ..................... 600 $ 8,645
Brisa-Auto Estradas de Portugal
SA* ............................. 300 10,747
Meitec............................ 1,800 50,630
----------
70,022
----------
<PAGE>
TRUCKING, SHIPPING (0.3%)
Bergesen Dy AS (A Shares) ........ 5,380 126,745
Frontline Ltd.* .................. 20,000 80,695
Knightsbridge Tankers Ltd. ...... 6,800 192,525
OMI Corp.* ....................... 49,500 454,780
----------
854,745
----------
TOTAL BUSINESS SERVICES (1.8%) . 5,568,768
----------
CAPITAL GOODS
AEROSPACE (0.1%)
British Aerospace ................ 5,357 152,735
----------
BUILDING & CONSTRUCTION (0.2%)
Beazer Group PLC ................. 21,000 55,560
Bouygues ......................... 1,203 136,321
Daito Trust Construction Co. Ltd. 6,000 36,651
GTM Entrepose .................... 1,116 75,098
Makita Corp. ..................... 8,000 76,643
National House Industrial Co. ... 7,000 48,017
Sho Bond Corp. ................... 1,200 21,705
Societe Technip .................. 1,075 113,421
Toda Corp. ....................... 15,000 40,812
----------
604,228
----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.3%)
BPB PLC .......................... 11,300 63,135
Fujikura Ltd. .................... 3,000 19,865
Holderbank Financiere Glaris AG . 155 126,505
Martin Marietta Materials, Inc. . 10,200 372,937
Matsushita Electric Works Ltd. .. 11,000 95,267
Nichiha Corp. .................... 1,600 9,785
Rugby Group PLC .................. 58,160 129,981
----------
817,475
----------
ELECTRICAL EQUIPMENT (0.8%)
Daikin Industries Ltd. ........... 14,000 52,792
General Electric Co. ............. 28,400 2,083,850
Johnson Electric Holdings Ltd. .. 28,800 82,880
Legrand SA ....................... 425 84,667
Mabuchi Motor Co. ................ 200 10,163
Sumitomo Electric Industries .... 7,000 95,497
----------
2,409,849
----------
MACHINERY (1.0%)
Allied Signal, Inc. .............. 18,800 732,025
Coltec Industries, Inc.* ......... 11,000 255,063
Cie Generale de Geophysique SA
(ADR)* .......................... 6,565 168,228
Fujitec Co. Ltd. ................. 9,000 49,665
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 10,000 14,945
KSB AG ........................... 300 65,872
Legris Industries SA.............. 1,990 69,105
49
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Mitsubishi Heavy Industries Ltd. . 8,000 $ 33,355
Nitta Corp. ...................... 1,000 10,117
Nitto Kohki Co. Ltd. ............. 1,000 10,883
Rauma Oy ......................... 139 2,167
Schindler Holding AG
Participating Certificate ....... 102 106,295
Schindler Holding AG Registered .. 50 53,714
Siebe PLC ........................ 6,000 117,825
SMC Corp. ........................ 300 26,442
Stork N.V. ....................... 2,000 69,045
TI Group PLC ..................... 14,014 106,856
United Technologies Corp. ........ 17,200 1,252,375
Valmet Oy* ....................... 3,600 49,665
----------
3,193,642
----------
TOTAL CAPITAL GOODS (2.4%) ..... 7,177,929
----------
CONSUMER CYCLICALS
AIRLINES (0.1%)
Lufthansa AG ..................... 2,000 37,577
Singapore Airlines Ltd. .......... 1,000 6,542
Virgin Express Holdings PLC
(ADR)* .......................... 11,500 238,625
----------
282,744
----------
APPAREL, TEXTILES (0.1%)
Cone Mills Corp.* ................ 12,000 93,000
Onward Kashiyama Co. Ltd. ........ 8,000 92,585
----------
185,585
----------
AUTO RELATED (0.3%)
Continential AG .................. 5,500 123,822
Minebea Co. Ltd. ................. 2,000 21,460
NGK Spark Plug Co. ............... 6,000 34,030
Republic Industries, Inc.* ...... 25,600 596,800
Sumitomo Rubber Industries, Inc. 13,000 54,899
Toyoda Automatic Loom Works Ltd. 7,000 128,760
----------
959,771
----------
AUTOS & TRUCKS (0.3%)
Bajaj Auto Ltd. (GDR) ............ 750 14,813
Harley-Davidson, Inc. ............ 28,200 771,975
UMW Holdings BHD ................. 5,000 3,792
Volkswagen AG .................... 100 55,866
----------
846,446
----------
FOOD SERVICES, LODGING (0.4%)
Accor SA ......................... 200 37,185
Choice Hotels Scandinavia ASA*+ .. 13,500 45,696
Compass Group PLC ................ 16,100 198,164
Host Marriott Corp.* ............. 16,200 317,925
ITT Corp.* ....................... 6,500 538,688
John Q Hammons Hotels, Inc.
(Class A)* ...................... 14,800 133,200
----------
1,270,858
----------
HOUSEHOLD FURNITURE, APPLIANCES (0.6%)
Hunter Douglas N.V. .............. 2,500 87,540
Industrie Natuzzi Spa (ADR) ..... 500 10,313
Moulinex* ........................ 2,000 49,414
Pioneer Electric Corp. ........... 6,000 92,432
Sony Corp. ....................... 1,500 133,359
Sunbeam Corp. .................... 38,200 1,609,175
----------
1,982,233
----------
LEISURE RELATED (0.8%)
Berjaya Sports Toto BHD .......... 16,000 $ 40,931
Carnival Corp. (Class A) ......... 13,900 769,713
Cendant Corp.* ................... 12,100 415,938
Cyrk, Inc.* ...................... 6,000 58,125
Disney (Walt) Co. ................ 7,646 757,432
EMI Group PLC .................... 1,000 8,348
Granada Group PLC ................ 9,900 151,299
Ladbroke Group PLC ............... 31,084 134,852
NAMCO Ltd. ....................... 200 5,810
Nintendo Co. Ltd. ................ 400 39,241
Nippon Broadcasting System ...... 1,000 39,548
Toei Co. Ltd. .................... 1,000 3,641
----------
2,424,878
----------
<PAGE>
PHOTO & OPTICAL (0.0%)
Fuji Photo Film Co. .............. 3,000 114,965
Noritsu Koki Co. Ltd. ............ 1,200 29,615
----------
144,580
----------
RETAIL--GENERAL (1.4%)
Aldeasa SA* ...................... 2,000 42,402
Boots Co. PLC .................... 8,400 120,990
British Airport Authority PLC ... 17,300 141,577
Dayton Hudson Corp. .............. 19,500 1,316,250
Dickson Concepts International
Ltd. ............................ 18,000 26,249
Fingerhut Companies, Inc. ........ 8,000 171,000
Home Depot, Inc. ................. 20,800 1,224,600
Kingfisher PLC ................... 8,641 120,414
Kohls Corp.* ..................... 13,000 885,625
Kokuyo Co. Ltd. .................. 2,000 34,489
Limited, Inc. .................... 7,000 178,500
Paris Miki, Inc. ................. 1,000 10,730
Sato Corp. ....................... 1,200 20,418
Smith (W.H.) Group PLC ........... 2,000 12,785
Vendex International N.V. ........ 1,200 66,224
----------
4,372,253
----------
TOTAL CONSUMER CYCLICALS (4.0%) 12,469,348
----------
CONSUMER NONCYCLICALS
BEVERAGES (0.6%)
Bass PLC ......................... 2,600 40,355
Coca-Cola Co. .................... 22,580 1,504,393
Diageo PLC ....................... 6,000 55,166
Scottish & Newcastle PLC ......... 11,000 134,759
Whitbread PLC .................... 11,000 161,060
----------
1,895,733
----------
CONTAINERS (0.5%)
Owens-Illinois, Inc.* ............ 5,000 189,688
Schmalbach Lubeca AG ............. 880 146,752
Sealed Air Corp.* ................ 20,600 1,272,050
----------
1,608,490
----------
DRUGS (1.7%)
Astra AB (A Shares) .............. 3,500 60,612
Centocor, Inc.* .................. 28,795 957,434
Daiichi Pharmaceutical Co. ...... 8,000 90,132
Geltex Pharmaceuticals, Inc.* ... 3,072 81,408
Merck KGAA ....................... 2,100 70,625
Merck & Co., Inc. ................ 11,434 1,214,863
50
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Novartis AG ...................... 180 $ 292,092
Orion-Yhtyma Oy (B Shares) ...... 4,500 118,878
Pfizer, Inc. ..................... 22,291 1,662,073
Rohto Pharmaceutical Co. Ltd. ... 2,000 12,876
Sankyo Co. Ltd. .................. 1,000 22,610
Santen Pharmaceutical Co. Ltd. .. 3,000 34,489
Schering Plough Corp. ............ 9,700 602,613
Taisho Pharmaceutical Co. ........ 1,000 25,522
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 2,000 42,920
-----------
5,289,147
-----------
FOODS (0.7%)
Campbell Soup Co. ................ 17,700 1,028,813
Huhtamaki Oy Series I ............ 1,300 53,660
Nestle SA ........................ 131 196,343
Orkla ASA ........................ 930 79,957
Parmalat Finanziaria Spa ......... 59,650 85,311
Rite Aid Corp. ................... 6,000 352,125
Tyson Foods, Inc. ................ 27,000 553,500
-----------
2,349,709
-----------
HOSPITAL SUPPLIES & SERVICES (0.7%)
Columbia/HCA Healthcare Corp. .... 7,500 222,188
Medtronic, Inc. .................. 24,812 1,297,978
PT Tempo Scan Pacific ............ 23,000 1,777
United Healthcare Corp. .......... 11,000 546,563
-----------
2,068,506
-----------
RETAIL--FOOD (0.2%)
Delhaize-Le Lion SA............... 980 49,726
Familymart Co. ................... 4,100 147,063
Promodes ......................... 250 103,722
Santa Isabel S.A. (ADR) .......... 1,000 17,500
Seven-Eleven Japan Co. Ltd. ..... 1,000 70,818
Woolworths Ltd. .................. 61,026 203,945
-----------
592,774
-----------
SOAPS & TOILETRIES (0.8%)
Avon Products, Inc. .............. 15,880 974,635
Gillette Co. ..................... 16,305 1,637,633
-----------
2,612,268
-----------
TOBACCO (1.0%)
Imperial Tobacco Group PLC ...... 1,700 10,700
Japan Tobacco, Inc. .............. 21 149,040
Philip Morris Cos., Inc. ......... 58,000 2,628,125
Seita ............................ 2,600 93,312
Swedish Match AB ................. 4,500 15,019
Tabacalera SA--A ................. 1,400 113,489
-----------
3,009,685
-----------
TOTAL CONSUMER NONCYCLICALS (6.2%) 19,426,312
-----------
CREDIT SENSITIVE
BANKS (1.4%)
Allied Irish Bank ................ 26,000 248,113
AMMB Holdings BHD ................ 9,000 5,901
BPI-SGPS SA* ..................... 1,000 24,314
Banco Bilbao Vizcaya SA .......... 6,000 194,158
Banco Santander SA ............... 2,970 99,227
Bangkok Bank Public Co. Ltd. .... 2,000 4,984
Bank of Tokyo-Mitsubishi Ltd. ... 2,000 27,591
Banque Nationale de Paris ........ 1,500 79,729
Chase Manhattan Corp. ............ 12,800 $ 1,401,600
Cie Bancaire SA .................. 7 1,134
Citicorp ......................... 9,200 1,163,225
Credito Italiano Spa ............. 48,000 148,016
Dao Heng Bank Group Ltd. ......... 3,000 7,491
Den Norske Bank ASA .............. 24,000 113,082
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 750 37,377
Forenings Sparbanken AB
(A Shares) ...................... 4,000 90,933
Istituto Mobiliare Italiano ..... 9,400 111,588
Long-Term Credit Bank of Japan ... 22,000 35,240
Philippine Commercial
International Bank .............. 1,000 2,840
PT Bank Dagang Nasional Indonesia
Tbk ............................. 136,000 8,655
Seventy-Seven Bank Co. Ltd. ..... 11,000 78,406
Shizuoka Bank Ltd. ............... 1,000 10,730
<PAGE>
Skandinaviska Enskilda Banken
(Series A) ...................... 4,440 56,200
Societe Generale ................. 1,058 144,149
State Bank of India (GDR)+ ...... 2,700 49,140
Suncorp-Metway Ltd.* ............. 11,149 27,963
Thai Farmers Bank Public
Co.--Warrants* .................. 375 40
Toho Bank ........................ 1,000 3,985
Wing Hang Bank Ltd. .............. 18,000 50,871
Yamaguchi Bank ................... 7,000 85,840
-----------
4,312,522
-----------
FINANCIAL SERVICES (2.2%)
Aiful Corp.* ..................... 400 27,132
Associates First Capital Corp. .. 5,000 355,625
Beneficial Corp. ................. 6,250 519,531
Credit Saison Co. ................ 2,000 49,358
Fleet Financial Group, Inc. ..... 4,700 352,206
Green Tree Financial Corp. ...... 23,800 623,263
MBNA Corp. ....................... 57,825 1,579,345
Merrill Lynch & Co., Inc. ........ 8,900 649,144
Morgan Stanley, Dean Witter,
Discover & Co. .................. 38,100 2,252,663
Newcourt Credit Group, Inc.* .... 2,500 83,438
Nichiei Co. Ltd. ................. 100 10,653
Peregrine Investment Holdings
Ltd. ............................ 52,000 36,908
PMI Group, Inc. .................. 1,700 122,931
Sanyo Shinpan Finance Co. Ltd. .. 200 8,845
Takefuji Corp. ................... 600 27,546
Worms Et Compagnie ............... 200 14,788
-----------
6,713,376
-----------
INSURANCE (1.6%)
ASR Verzekeringsgroep N.V. ...... 1,100 59,838
Assurances Generale de France ... 4,618 244,692
Catalana Occidente SA ............ 1,000 50,935
Corpacion Mapfre Cia Inter SA ... 1,200 31,821
Fortis Amev N.V. ................. 4,438 193,485
General Accident PLC.............. 4,700 81,483
ING Groep N.V. ................... 5,500 231,647
Irish Life PLC ................... 20,000 113,605
MGIC Investment Corp. ............ 6,000 399,000
51
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
PennCorp Financial Group, Inc. .. 16,700 $ 595,981
Providian Financial Corp. ........ 8,000 361,500
QBE Insurance Group Ltd. ......... 21,500 96,740
Royal & Sun Alliance Insurance
Group PLC ....................... 9,651 97,219
Travelers Group, Inc. ............ 39,249 2,114,540
Trygg-Hansa AB (B Shares) ........ 3,800 116,777
United Assurance Group PLC ...... 8,100 69,882
Willis Corroon Group PLC (ADR) .. 6,000 73,875
Zurich Versicherungs ............. 246 117,231
-----------
5,050,251
-----------
REAL ESTATE (0.4%)
Boston Properties, Inc. .......... 9,000 297,563
City Developments Ltd. ........... 1,000 4,639
Daibiru Corp. .................... 1,000 7,319
Glenborough Realty Trust, Inc. .. 10,000 296,250
Spieker Properties, Inc. ......... 10,000 428,750
Sumitomo Realty & Development Co.
Ltd. ............................ 1,000 5,748
Unibail SA ....................... 950 94,866
Vornado Realty Trust ............. 2,500 117,344
-----------
1,252,479
-----------
UTILITY--ELECTRIC (0.4%)
AES Corp.* ....................... 13,700 638,763
Cia Paranaense de Energia-Copel
(ADR) ........................... 7,000 95,813
Energy Group PLC ................. 6,550 72,332
Hong Kong Electric Holdings Ltd. 20,000 76,010
Malakoff BHD ..................... 10,000 20,825
Manila Electric Co. .............. 1,860 6,154
National Grid Group PLC .......... 1,000 4,749
Powergen PLC ..................... 11,400 148,371
Veba AG .......................... 3,500 238,333
-----------
1,301,350
-----------
UTILITY--GAS (0.1%)
Anglian Water PLC ................ 14,080 192,043
Scottish Power PLC ............... 25,500 225,445
-----------
417,488
-----------
UTILITY--TELEPHONE (0.8%)
British Telecommunications PLC ... 20,100 158,051
Cable & Wireless PLC.............. 12,300 108,138
Philippine Long Distance
Telephone Co. ................... 1,000 21,728
Telecom Italia Spa ............... 35,500 226,767
Telefonica de Espana ............. 6,600 188,448
Telekom Malaysia BHD ............. 16,500 48,785
Telephone & Data Systems, Inc. .. 7,500 349,219
Teleport Communications Group,
Inc. (Class A)* ................. 23,700 1,300,538
-----------
2,401,674
-----------
TOTAL CREDIT SENSITIVE (6.9%) .. 21,449,140
-----------
ENERGY
COAL & GAS PIPELINES (0.0%)
BG PLC ........................... 18,529 83,431
BG PLC 'B'* ...................... 21,000 10,008
OMV AG ........................... 300 41,563
-----------
135,002
-----------
OIL--DOMESTIC (0.8%)
Apache Corp. ..................... 15,100 $ 529,444
Murphy Oil Corp. ................. 5,000 270,938
Tom Brown, Inc.* ................. 7,500 144,375
Union Pacific Resources Group,
Inc. ............................ 20,100 487,425
USX-Marathon Group ............... 33,800 1,140,750
-----------
2,572,932
-----------
OIL--INTERNATIONAL (0.6%)
British Petroleum Co. PLC ........ 11,100 145,925
Elf Aquitaine .................... 2,110 245,410
Gulf Canada Resources Ltd.* ..... 112,700 788,900
Gulf Indonesia Resources Ltd.* .. 3,500 77,000
Orogen Minerals Ltd. ............. 5,160 10,084
Repsol SA ........................ 1,410 60,158
Shell Transport & Trading Co. PLC 20,100 145,334
Total SA--B....................... 2,881 313,542
-----------
1,786,353
-----------
OIL--SUPPLIES & CONSTRUCTION (1.9%)
Baker Hughes, Inc. ............... 10,250 447,156
BJ Services Co.* ................. 9,000 647,438
Canadian Fracmaster Ltd. ......... 5,900 86,677
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 13,500 113,330
Dresser Industries, Inc. ......... 12,000 503,250
Fugro N.V.*....................... 2,000 60,957
Halliburton Co. .................. 24,900 1,293,244
Nabors Industries, Inc.* ......... 43,000 1,351,813
Noble Drilling Corp.* ............ 43,400 1,329,125
Parker Drilling Co.* ............. 9,000 109,688
-----------
5,942,678
-----------
TOTAL ENERGY (3.3%) ............. 10,436,965
-----------
TECHNOLOGY
ELECTRONICS (1.4%)
Altera Corp.* .................... 11,100 367,688
Applied Materials, Inc.* ......... 17,600 530,200
Cisco Systems, Inc.* ............. 42,600 2,374,950
Fujimi, Inc. ..................... 300 12,761
Hoya Corp. ....................... 1,000 31,424
Leitch Technology Corp.* ......... 1,000 30,081
Micronics Japan Co. Ltd. ......... 1,000 17,245
National Semiconductor Corp.* ... 20,900 542,094
Nikon Corp. ...................... 1,000 9,887
Rohm Co. Ltd. .................... 1,000 101,935
Sankyo Engineering Co. ........... 1,000 3,066
SMH AG ........................... 540 72,838
Sterling Commerce, Inc.* ......... 5,000 192,188
TDK Corp. ........................ 1,000 75,417
Tokyo Cathode Laboratory Co.* .... 1,000 9,887
TOWA Corp. ....................... 100 2,077
Varitronix International Ltd. ... 55,000 94,399
Yamaichi Electronics Co. Ltd. .... 1,000 16,095
Yokogawa Electric Corp. .......... 2,000 12,355
-----------
4,496,587
-----------
OFFICE EQUIPMENT (1.1%)
Barco N.V. ....................... 469 86,076
Ceridian Corp.* .................. 11,000 503,938
Compaq Computer Corp. ............ 22,300 1,258,556
52
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Dell Computer Corp.* ............. 14,100 $ 1,184,400
Policy Management Systems Corp.* 6,300 438,244
-----------
3,471,214
-----------
OFFICE EQUIPMENT SERVICES (0.2%)
Data Communication System Co. .... 1,000 13,183
First Data Corp. ................. 14,600 427,050
Fuji Soft ABC, Inc. .............. 600 20,556
INES Corp. ....................... 1,000 7,741
Nippon System Development ........ 600 12,324
Oracle Corp.* .................... 13,450 300,103
-----------
780,957
-----------
TELECOMMUNICATIONS (1.8%)
ADC Telecommunications, Inc.* .... 25,000 1,043,750
Asia Satellite Telecommunications
Holdings Ltd. ................... 18,000 30,778
DDI Corp. ........................ 25 66,105
DSC Communications Corp.* ........ 4,000 96,000
Energis PLC* ..................... 22,000 92,189
Lucent Technologies, Inc. ........ 9,500 758,813
MCI Communications Corp. ......... 8,500 363,906
Nextel Communications, Inc.
(Class A)* ...................... 10,900 283,400
PT Indosat ....................... 45,000 83,455
PT Telekomunikasi Indonesia ..... 33,000 17,550
SK Telecom Co. Ltd. (ADR)* ...... 9,754 63,402
Tele-Communications TCI Ventures
Group (Class A)* ................ 12,000 339,750
Tellabs, Inc.* ................... 9,100 481,163
Videsh Sanchar Nigam Ltd. (GDR) . 1,700 21,973
Videsh Sanchar Nigam Ltd. (GDR)+* 2,000 27,860
Vodafone Group PLC................ 15,000 108,212
WorldCom, Inc.* .................. 53,525 1,619,131
-----------
5,497,437
-----------
TOTAL TECHNOLOGY (4.5%) ......... 14,246,195
-----------
DIVERSIFIED
MISCELLANEOUS (1.0%)
BTR PLC .......................... 20,000 60,474
Cie Generale de Eaux ............. 943 131,614
Citic Pacific Ltd. ............... 7,000 27,823
First Pacific Co. ................ 42,734 20,680
Montedison Spa ................... 126,000 113,179
Smith (Howard) Ltd. .............. 4,000 33,198
Swire Pacific Ltd. (Class A) .... 7,000 38,392
Tomkins PLC ...................... 9,000 43,038
Tyco International Ltd. .......... 41,222 1,857,566
U.S. Industries, Inc. ............ 30,750 926,344
-----------
TOTAL DIVERSIFIED (1.0%) ........ 3,252,308
-----------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (30.6%)
(Cost $78,384,870)............... 95,822,541
-----------
PREFERRED STOCKS:
BASIC MATERIALS (0.0%)
CHEMICALS
Henkel KGAA ...................... 1,694 $ 105,937
-----------
BUSINESS SERVICES (0.0%)
PRINTING, PUBLISHING &
BROADCASTING
ProSieben Media AG* .............. 500 22,930
-----------
CONSUMER CYCLICALS (0.0%)
RETAIL--GENERAL
Hornbach Holding AG .............. 920 63,415
-----------
TECHNOLOGY (0.1%)
TELECOMMUNICATIONS
Nokia Oyj (A Shares) ............. 1,500 106,495
-----------
TOTAL PREFERRED STOCKS (0.1%)
(Cost $217,889).................. 298,777
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
CONSUMER NONCYCLICALS (2.0%)
MEDIA & CABLE
Time Warner Entertainment Co.
8.375%, 03/15/23................. $5,625,000 6,419,137
-----------
CREDIT SENSITIVE
BANKS (2.6%)
Chase Manhattan Corp.
8.625%, 05/01/02 ................ 5,500,000 5,979,160
St. George Bank Ltd.
7.15%, 10/15/05+ ................ 2,000,000 2,060,440
Sumitomo Bank International
0.75% Conv., 05/31/01 ......... Yen 11,000,000 88,312
-----------
8,127,912
-----------
FINANCIAL SERVICES (1.9%)
Ford Motor Credit Co.
6.125%, 01/09/06 ................ $6,000,000 5,859,180
-----------
FOREIGN GOVERNMENT (0.8%)
Province of Quebec
7.5%, 07/15/23 .................. 2,500,000 2,686,375
-----------
MORTGAGE RELATED (11.4%)
Federal National Mortgage
Association:
6.0%, 11/01/10 .................. 14,295,932 14,063,622
6.5%, 01/01/11 .................. 3,346,139 3,348,230
7.0%, 05/01/26 .................. 8,403,540 8,461,315
7.0%, 09/01/27 .................. 8,995,060 9,056,901
Premier Auto Trust
7.15%, 02/04/99 ................. 875,160 875,974
-----------
35,806,042
-----------
U.S. GOVERNMENT (33.1%)
U.S. Treasury:
6.125% Note, 08/31/98 ........... 2,400,000 2,408,250
6.375% Note, 05/15/99 ........... 19,100,000 19,273,103
6.0% Note, 08/15/00 ............. 17,000,000 17,122,195
</TABLE>
53
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
===========================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
6.25% Note, 04/30/01 ........ $15,600,000 $ 15,843,750
6.5% Note, 08/31/01 ......... 7,100,000 7,275,285
6.5% Note, 05/31/02 ......... 14,560,000 14,987,700
6.875% Note, 05/15/06 ....... 7,430,000 7,952,425
6.125% Bond, 11/15/27 ....... 18,310,000 18,813,525
------------
103,676,233
------------
UTILITY--ELECTRIC (2.2%)
Consolidated Edison
6.45%, 12/01/07 ............. 6,750,000 6,767,280
------------
TOTAL CREDIT SENSITIVE (52.0%) 162,923,022
------------
TOTAL LONG-TERM DEBT SECURITIES (54.0%)
(Amortized Cost $167,120,488) 169,342,159
------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (14.6%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 .......... 45,800,000 45,792,366
------------
TOTAL SHORT-TERM DEBT SECURITIES (14.6%)
(Amortized Cost $45,792,366) 45,792,366
------------
TOTAL INVESTMENTS (99.3%)
(Cost/Amortized Cost $291,515,613) 311,255,843
OTHER ASSETS
LESS LIABILITIES (0.7%) .... 2,285,071
------------
NET ASSETS (100.0%) .......... $313,540,914
============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY GLOBAL
REGION
As a Percentage of Total Investments
Australia .................................. 0.1%
Canada ..................................... 0.1
France ..................................... 0.6
Germany .................................... 0.3
Japan ...................................... 1.1
Netherlands ................................ 0.4
Scandinavia ................................ 0.7
Southeast Asia ............................. 0.2
Switzerland ................................ 0.3
United Kingdom ............................. 1.4
United States** ............................ 94.3
Other European Countries ................... 0.5
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 14.7%.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $2,296,466
or 0.7% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
54
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.4%)
Akzo Nobel N.V. .................. 5,000 $ 862,082
Bayer AG ......................... 40,500 1,502,752
Ciba Specialty Chemicals AG* .... 9,100 1,084,149
Hitachi Chemical Co. Ltd. ........ 159,000 944,434
Holliday Chemical Holdings PLC ... 214,000 808,834
Kuraray Co. Ltd. ................. 96,000 794,635
Nippon Chemi-Con Corp. ........... 62,000 143,982
Toagosei Co. Ltd. ................ 158,000 222,817
-----------
6,363,685
-----------
CHEMICALS--SPECIALTY (0.0%)
NGK Insulators ................... 92,000 817,934
-----------
METALS & MINING (0.1%)
Bethlehem Steel Corp.* ........... 135,000 1,164,375
Nord Resources Corp.* ............ 27,939 50,639
Randgold Resources Ltd. (GDR)+* . 30,300 159,075
Toho Titanium* ................... 11,000 92,738
-----------
1,466,827
-----------
PAPER (0.2%)
Jefferson Smurfit Corp.* ......... 39,600 559,350
KNP BT (Kon) N.V. ................ 53,000 1,220,674
Nippon Paper Industries Co. ..... 10,000 39,241
Stone Container Corp.* ........... 57,900 604,331
UPM-Kymmene Oy ................... 25,320 506,312
-----------
2,929,908
-----------
STEEL (0.1%)
Koninklijke Hoogovens N.V. ...... 20,000 819,668
NatSteel Ltd. .................... 220,000 298,305
Pohang Iron & Steel Co. Ltd.
(ADR) ........................... 15,000 261,562
Rautaruukki Oy ................... 72,872 588,222
Usinor Sacilor ................... 47,000 678,624
-----------
2,646,381
-----------
TOTAL BASIC MATERIALS (0.8%) ... 14,224,735
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.8%)
USA Waste Services, Inc.* ........ 162,900 6,393,825
U.S. Filter Corp.* ............... 45,000 1,347,187
Waste Management, Inc. ........... 217,200 5,973,000
-----------
13,714,012
-----------
PRINTING, PUBLISHING &
BROADCASTING (1.7%)
Cablevision Systems Corp.
(Class A)* ...................... 43,500 4,165,125
Carlton Communications PLC ...... 134,500 1,038,815
CBS Corp. ........................ 167,500 4,930,781
Liberty Media Group (Class A)* ... 218,700 7,927,875
New Straits Times Press BHD ..... 65,000 80,550
New York Times Co. (Class A) ..... 87,840 5,808,420
Nippon Television Network Corp. . 600 176,126
Reader's Digest Association, Inc.
(Class A) ....................... 40,000 945,000
Reed International PLC ........... 5,000 $ 50,121
Television Broadcasts Ltd. ...... 10,000 28,520
Time Warner, Inc. ................ 58,100 3,602,200
Tokyo Broadcasting System, Inc. .. 7,000 88,523
United News & Media PLC .......... 95,571 1,088,372
-----------
29,930,428
-----------
PROFESSIONAL SERVICES (0.0%)
Asatsu, Inc. ..................... 3,000 43,227
Brisa-Auto Estradas de Portugal
SA* ............................. 2,800 100,301
Meitec ........................... 11,000 309,408
-----------
452,936
-----------
TRUCKING, SHIPPING (0.4%)
Bergesen Dy AS (A Shares) ........ 47,300 1,114,327
Frontline Ltd.* .................. 140,000 564,868
Knightsbridge Tankers Ltd. ...... 64,500 1,826,156
OMI Corp.* ....................... 313,200 2,877,525
-----------
6,382,876
-----------
TOTAL BUSINESS SERVICES (2.9%) .. 50,480,252
-----------
CAPITAL GOODS
AEROSPACE (0.1%)
British Aerospace ................ 50,710 1,445,810
-----------
BUILDING & CONSTRUCTION (0.3%)
Beazer Group PLC ................. 187,000 494,750
Bouygues ......................... 10,708 1,213,401
Daito Trust Construction Co. Ltd. 65,000 397,049
GTM Entrepose .................... 9,953 669,762
Makita Corp. ..................... 89,000 852,654
National House Industrial Co. ... 53,000 363,556
Sho Bond Corp. ................... 10,000 180,878
Suido Kiko Kaisha................. 1,000 2,008
Societe Technip .................. 10,350 1,092,008
Toda Corp. ....................... 143,000 389,078
-----------
5,655,144
-----------
BUILDING MATERIALS &
FOREST PRODUCTS (0.5%)
BPB PLC .......................... 103,100 576,044
Fujikura Ltd. .................... 34,000 225,147
Holderbank Financiere Glaris AG . 1,385 1,130,380
Martin Marietta Materials, Inc. . 110,000 4,021,875
Matsushita Electric Works Ltd. .. 104,000 900,709
Nichiha Corp. .................... 14,600 89,295
Rugby Group PLC .................. 447,460 1,000,026
-----------
7,943,476
-----------
ELECTRICAL EQUIPMENT (1.3%)
Daikin Industries Ltd. ........... 140,000 527,917
General Electric Co. ............. 231,000 16,949,625
Johnson Electric Holdings Ltd. .. 258,000 742,470
Legrand SA ....................... 3,800 757,032
Mabuchi Motor Co. ................ 1,700 86,384
Pioneer Electric Corp. ........... 66,000 1,016,746
Sony Corp. ....................... 16,500 1,466,948
Sumitomo Electric Industries .... 56,000 763,978
-----------
22,311,100
-----------
55
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
MACHINERY (1.6%)
Allied Signal, Inc. .............. 152,400 $ 5,934,075
Cie Generale de Geophysique SA
(ADR)* .......................... 56,108 1,437,768
Coltec Industries, Inc.* ......... 115,000 2,666,562
Fujitec Co. Ltd. ................. 96,000 529,757
Ishikawajima Harima Heavy
Industries Co. Ltd............... 130,000 194,290
KSB AG ........................... 2,600 570,889
Legris Industries SA ............. 17,300 600,764
Mitsubishi Heavy Industries Ltd. . 80,000 333,550
Nitta Corp. ...................... 8,000 80,935
Nitto Kohki Co. Ltd. ............. 4,000 43,533
Rauma Oy ......................... 1,234 19,243
Schindler Holding AG
Participating Certificate ....... 915 953,530
Schindler Holding AG Registered . 450 483,430
Siebe PLC ........................ 50,000 981,874
SMC Corp. ........................ 2,000 176,279
Stork N.V. ....................... 18,000 621,409
TI Group PLC ..................... 123,795 943,928
United Technologies Corp. ........ 158,100 11,511,656
Valmet Oy* ....................... 31,000 427,669
-----------
28,511,141
-----------
TOTAL CAPITAL GOODS (3.8%) ..... 65,866,671
-----------
CONSUMER CYCLICALS
AIRLINES (0.0%)
Lufthansa AG ..................... 21,000 394,563
Singapore Airlines Ltd. .......... 12,000 78,501
Virgin Express Holdings PLC
(ADR)* .......................... 10,400 215,800
-----------
688,864
-----------
APPAREL, TEXTILE (0.1%)
Liz Claiborne, Inc. .............. 30,000 1,254,375
Onward Kashiyama Co. Ltd. ........ 79,000 914,275
-----------
2,168,650
-----------
AUTO RELATED (0.5%)
Continental AG ................... 55,000 1,238,222
Minebea Co. Ltd. ................. 14,000 150,220
NGK Spark Plug Co. ............... 69,000 391,339
Republic Industries, Inc.* ...... 219,700 5,121,756
Sumitomo Rubber Industries, Inc. 129,000 544,771
Toyoda Automatic Loom Works Ltd. 70,000 1,287,603
-----------
8,733,911
-----------
AUTOS & TRUCKS (0.4%)
Bajaj Auto Ltd. (GDR) ............ 7,500 148,125
Harley-Davidson, Inc. ............ 234,000 6,405,750
Honda Motor Co. Ltd. ............. 1,000 36,712
UMW Holdings BHD ................. 188,000 142,589
Volkswagen AG .................... 1,000 558,659
-----------
7,291,835
-----------
FOOD SERVICES, LODGING (0.9%)
Accor SA ......................... 1,400 260,297
Choice Hotels Scandinavia ASA*+ .. 108,000 365,566
Compass Group PLC ................ 144,200 1,774,864
Host Marriott Corp.* ............. 138,200 $ 2,712,175
ITT Corp.* ....................... 101,000 8,370,375
John Q Hammons Hotels, Inc.
(Class A)* ...................... 191,800 1,726,200
-----------
15,209,477
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (0.8%)
Hunter Douglas N.V. .............. 22,000 770,350
Moulinex* ........................ 17,000 420,022
Sunbeam Corp. .................... 295,500 12,447,937
-----------
13,638,309
-----------
LEISURE RELATED (1.4%)
Berjaya Sports Toto BHD .......... 140,000 358,144
Carnival Corp. (Class A) ......... 116,500 6,451,187
Cendant Corp.* ................... 125,300 4,307,187
Cyrk, Inc.* ...................... 220,600 2,137,063
Disney (Walt) Co. ................ 63,100 6,250,844
EMI Group PLC .................... 12,000 100,176
Granada Group PLC ................ 88,900 1,358,635
Hoyts Cinemas Group+ ............. 45,000 79,151
Ladbroke Group PLC ............... 279,118 1,210,904
NAMCO Ltd. ....................... 1,000 29,048
Nintendo Co. Ltd. ................ 1,000 98,103
Nippon Broadcasting System ...... 5,000 197,739
Toei Co. Ltd. .................... 8,000 29,124
@Entertainment, Inc.* ............ 57,500 639,687
-----------
23,246,992
-----------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. .............. 26,000 996,359
Noritsu Koki Co. Ltd. ............ 11,200 276,405
-----------
1,272,764
-----------
RETAIL--GENERAL (2.1%)
Aldeasa SA* ...................... 16,494 349,692
Boots Co. PLC .................... 74,700 1,075,946
BAA PLC .......................... 154,200 1,261,920
Dayton Hudson Corp. .............. 157,000 10,597,500
Dickson Concepts International
Ltd. ............................ 161,000 234,779
Fingerhut Companies, Inc. ........ 105,500 2,255,062
Home Depot, Inc. ................. 163,300 9,614,287
Kingfisher PLC ................... 76,163 1,061,348
Kohl's Corp.* .................... 93,000 6,335,625
Kokuyo Co. Ltd. .................. 25,000 431,117
Limited, Inc. .................... 100,000 2,550,000
Paris Miki, Inc. ................. 3,800 40,774
Sato Corp. ....................... 8,800 149,730
Smith (W.H.) Group PLC ........... 25,000 159,811
Vendex International N.V. ........ 11,000 607,057
-----------
36,724,648
-----------
TOTAL CONSUMER CYCLICALS (6.3%) 108,975,450
-----------
CONSUMER NONCYCLICALS
BEVERAGES (0.9%)
Bass PLC ......................... 26,400 409,755
Coca-Cola Co. .................... 183,120 12,200,370
Diageo PLC ....................... 58,000 533,269
Scottish & Newcastle PLC ......... 100,000 1,225,083
Whitbread PLC .................... 92,500 1,354,370
-----------
15,722,847
-----------
56
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
CONTAINERS (0.8%)
Owens-Illinois, Inc.* ............ 50,000 $ 1,896,875
Schmalbach Lubeca AG ............. 8,300 1,384,141
Sealed Air Corp.* ................ 164,500 10,157,875
------------
13,438,891
------------
DRUGS (2.5%)
Astra AB (A Shares) .............. 30,000 519,528
Centocor, Inc.* .................. 237,503 7,896,975
Daiichi Pharmaceutical Co. ...... 79,000 890,056
Merck KGAA ....................... 18,700 628,895
Merck & Co., Inc. ................ 92,160 9,792,000
Novartis AG ...................... 1,800 2,920,917
Orion-Yhtyma Oy (B Shares) ...... 37,800 998,578
Pfizer, Inc. ..................... 182,112 13,578,726
Rohto Pharmaceutical Co. Ltd. ... 9,000 57,942
Sankyo Co. Ltd. .................. 6,000 135,658
Santen Pharmaceutical Co. Ltd. .. 22,000 252,922
Schering Plough Corp. ............ 80,000 4,970,000
SmithKline Beecham PLC ........... 10,000 102,378
Taisho Pharmaceutical Co. ........ 4,000 102,089
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 21,000 450,661
------------
43,297,325
------------
FOODS (1.1%)
Campbell Soup Co. ................ 136,335 7,924,472
Huhtamaki Oy Series I ............ 11,550 476,752
Nestle SA ........................ 1,150 1,723,622
Orkla ASA 'A'..................... 8,300 713,599
Parmalat Finanziaria Spa ......... 503,700 720,385
Rite Aid Corp. ................... 40,000 2,347,500
Tyson Foods, Inc. ................ 225,000 4,612,500
------------
18,518,830
------------
HOSPITAL SUPPLIES & SERVICES (1.0%)
Columbia/HCA Healthcare Corp. .... 90,000 2,666,250
Medtronic, Inc. .................. 202,906 10,614,520
PT Tempo Scan Pacific ............ 206,000 15,918
United Healthcare Corp. .......... 90,000 4,471,875
------------
17,768,563
------------
RETAIL--FOOD (0.4%)
Delhaize-Le Lion SA .............. 8,800 446,520
Familymart Co. ................... 88,500 3,174,401
Promodes ......................... 2,200 912,752
Santa Isabel S.A. (ADR) .......... 3,000 52,500
Seven-Eleven Japan Co. Ltd. ..... 4,000 283,273
Woolworths Ltd. .................. 569,991 1,904,871
------------
6,774,317
------------
SOAPS & TOILETRIES (1.2%)
Avon Products, Inc. .............. 125,720 7,716,065
Gillette Corp. ................... 130,310 13,088,011
------------
20,804,076
------------
TOBACCO (1.5%)
Imperial Tobacco Group PLC ...... 11,600 73,009
Japan Tobacco, Inc. .............. 197 1,398,138
Philip Morris Cos., Inc. ......... 467,900 21,201,719
Seita ............................ 29,200 1,047,969
Swedish Match AB ................. 54,700 182,565
Tabacalera SA--A ................. 11,000 $ 891,697
------------
24,795,097
------------
TOTAL CONSUMER NONCYCLICALS (9.4%) 161,119,946
------------
CREDIT SENSITIVE
BANKS (2.1%)
Allied Irish Bank ................ 225,000 2,147,134
AMMB Holdings BHD ................ 78,000 51,138
Banco Bilbao Vizcaya SA .......... 54,900 1,776,547
BPI-SGPS SA* ..................... 12,000 291,769
Banco Santander SA ............... 29,100 972,228
Bangkok Bank Public Ltd. ......... 20,000 49,844
Bank of Tokyo-Mitsubishi Ltd. ... 15,000 206,936
Banque Nationale de Paris ........ 13,700 728,193
Chase Manhattan Corp. ............ 101,300 11,092,350
Citicorp ......................... 75,700 9,571,319
Credito Italiano Spa ............. 500,000 1,541,832
Dao Heng Bank Group Ltd........... 30,000 74,913
Den Norske Bank ASA .............. 201,000 947,061
Erste Bank Der Oesterreichischen
Sparkassen AG* .................. 3,740 186,386
Forenings Sparbanken AB
(A Shares) ...................... 40,000 909,331
Istituto Mobiliare Italiano ..... 84,700 1,005,483
Long-Term Credit Bank of Japan ... 230,000 368,423
Philippine Commercial
International Bank .............. 5,000 14,198
PT Bank Dagang Nasional Indonesia
Tbk ............................. 1,230,000 78,273
Seventy-Seven Bank Ltd. .......... 123,000 876,720
Shizuoka Bank Ltd. ............... 4,000 42,920
Skandinaviska Enskilda Banken
(Series A) ...................... 25,370 321,123
Societe Generale ................. 9,028 1,230,034
State Bank of India (GDR)+ ...... 27,000 491,400
Sumitomo Bank Ltd. ............... 8,000 91,358
Suncorp-Metway Ltd.* ............. 74,330 186,425
Thai Farmers Bank Public
Co.--Warrants* .................. 2,875 173
Toho Bank ........................ 10,000 39,854
United Overseas Bank Ltd. ........ 4,000 22,242
Wing Hang Bank Ltd. .............. 161,000 455,014
Yamaguchi Bank ................... 70,000 858,402
------------
36,629,023
------------
FINANCIAL SERVICES (3.2%)
Aiful Corp.* ..................... 2,400 162,790
Associates First Capital Corp. .. 43,000 3,058,375
Beneficial Corp. ................. 50,800 4,222,750
Credit Saison Co. ................ 14,400 355,378
Fleet Financial Group, Inc. ..... 46,300 3,469,606
Green Tree Financial Corp. ...... 153,400 4,017,162
MBNA Corp. ....................... 481,125 13,140,727
Merrill Lynch & Co., Inc. ........ 72,400 5,280,675
Morgan Stanley, Dean Witter,
Discover & Co. .................. 305,700 18,074,513
Newcourt Credit Group Inc.* ..... 25,000 834,375
Nichiei Co. Ltd. ................. 500 53,267
Peregrine Investment Holdings
Ltd. ............................ 472,000 335,011
PMI Group, Inc. .................. 14,600 1,055,763
57
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Sanyo Shinpan Finance Co. Ltd. .. 1,200 $ 53,068
Takefuji Corp. ................... 5,000 229,546
Worms Et Compagnie ............... 2,500 184,847
------------
54,527,853
------------
INSURANCE (3.0%)
ASR Verzekeringsgroep N.V. ...... 10,000 543,979
Assurances Generales de France ... 37,995 2,013,227
Catalana Occidente SA ............ 1,030 52,463
Corporacion Mapfre Cia Inter SA .. 14,000 371,250
Fortis Amev N.V. ................. 37,281 1,625,350
General Accident PLC.............. 42,200 731,616
ING Groep N.V. ................... 50,000 2,105,886
Irish Life PLC ................... 100,000 568,025
Life Re Corp. .................... 140,500 9,158,844
MGIC Investment Corp. ............ 67,000 4,455,500
PennCorp Financial Group, Inc. .. 135,700 4,842,794
Providian Financial Corp. ........ 65,000 2,937,188
QBE Insurance Group Ltd. ......... 201,250 905,536
Royal & Sun Alliance Insurance
Group PLC ....................... 100,936 1,016,774
Travelers Group, Inc. ............ 320,199 17,250,721
Trygg-Hansa AB (B Shares) ........ 3,600 110,631
United Assurance Group PLC ...... 71,600 617,718
Willis Corroon Group PLC (ADR) .. 87,800 1,081,037
Zurich Versicherungs ............. 2,130 1,015,050
------------
51,403,589
------------
REAL ESTATE (0.5%)
Boston Properties, Inc. .......... 84,200 2,783,863
City Developments Ltd. ........... 8,000 37,110
Daibiru Corp. .................... 4,000 29,278
Glenborough Realty Trust, Inc. .. 70,000 2,073,750
Spieker Properties, Inc. ......... 40,000 1,715,000
Sumitomo Realty & Development Co.
Ltd. ............................ 16,000 91,972
Unibail SA ....................... 7,880 786,887
Vornado Realty Trust ............. 20,000 938,750
------------
8,456,610
------------
UTILITY--ELECTRIC (0.7%)
AES Corp.* ....................... 113,800 5,305,925
Cia Paranaense de Energia-Copel
(ADR) ........................... 54,000 739,125
Energy Group PLC ................. 58,840 649,770
Hong Kong Electric Holdings Ltd. 179,000 680,288
Malakoff BHD ..................... 90,000 187,428
Manila Electric Co. .............. 16,620 54,990
National Grid Group PLC .......... 20,000 94,983
Powergen PLC ..................... 108,000 1,405,617
Veba AG .......................... 35,000 2,383,335
------------
11,501,461
------------
UTILITY--GAS (0.2%)
Anglian Water PLC ................ 128,600 1,754,030
Scottish Power PLC ............... 220,000 1,945,015
------------
3,699,045
------------
UTILITY--TELEPHONE (1.1%)
British Telecommunications PLC ... 186,600 $ 1,467,275
Cable & Wireless PLC ............. 109,200 960,051
Philippine Long Distance
Telephone Co. ................... 10,000 217,284
Telecom Italia Spa ............... 311,550 1,990,116
Telefonica de Espana ............. 57,000 1,627,502
Telekom Malaysia BHD ............. 150,000 443,502
Telephone & Data Systems, Inc. .. 39,700 1,848,531
Teleport Communications Group,
Inc. (Class A)* ................. 193,400 10,612,825
------------
19,167,086
------------
TOTAL CREDIT SENSITIVE (10.8%) 185,384,667
------------
ENERGY
COAL & GAS PIPELINES (0.1%)
BG PLC ........................... 164,117 738,963
BG PLC-'B'* ...................... 186,000 88,640
OMV AG ........................... 1,400 193,960
------------
1,021,563
------------
OIL--DOMESTIC (1.5%)
Apache Corp. ..................... 130,400 4,572,150
Louis Dreyfus Natural Gas Corp.* 245,400 4,585,913
Murphy Oil Corp. ................. 40,000 2,167,500
Tom Brown, Inc.* ................. 121,000 2,329,250
Union Pacific Resources Group,
Inc. ............................ 176,800 4,287,400
USX-Marathon Group ............... 259,700 8,764,875
------------
26,707,088
------------
OIL--INTERNATIONAL (1.1%)
AO Tatneft (ADR) ................. 29,000 4,132,500
British Petroleum Co. PLC ........ 98,700 1,297,553
Elf Aquitaine .................... 18,800 2,186,591
Gulf Canada Resources Ltd.* ..... 916,000 6,412,000
Gulf Indonesia Resources Ltd.* .. 30,700 675,400
Petroleo Brasileiro S.A. (ADR) .. 15,000 350,799
Repsol SA ........................ 13,950 595,176
Shell Transport & Trading Co. PLC 178,950 1,293,905
Total SA--B ...................... 26,234 2,855,075
------------
19,798,999
------------
OIL--SUPPLIES & CONSTRUCTION (2.8%)
Baker Hughes, Inc. ............... 90,000 3,926,250
BJ Services Co.* ................. 30,000 2,158,125
Canadian Fracmaster Ltd. ......... 47,100 691,944
Canadian Fracmaster Ltd.
Installment Receipt*+ ........... 133,800 1,123,229
Dresser Industries, Inc. ......... 133,900 5,615,431
Fugro N.V.* ...................... 10,000 304,786
Halliburton Co. .................. 186,400 9,681,150
Nabors Industries, Inc.* ......... 362,900 11,408,669
Noble Drilling Corp.* ............ 383,700 11,750,813
Parker Drilling Co.* ............. 92,300 1,124,906
------------
47,785,303
------------
TOTAL ENERGY (5.5%) ............. 95,312,953
------------
58
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
TECHNOLOGY
ELECTRONICS (2.1%)
Altera Corp.* .................... 91,000 $ 3,014,375
Applied Materials, Inc.* ......... 153,600 4,627,200
Cisco Systems, Inc.* ............. 339,000 18,899,250
Fujimi, Inc. ..................... 2,000 85,074
Hoya Corp. ....................... 8,000 251,389
Leitch Technology Corp.* ......... 10,000 300,815
Micronics Japan Co. Ltd. ......... 7,000 120,713
National Semiconductor Corp.* ... 182,000 4,720,625
Nikon Corp. ...................... 10,000 98,870
Rohm Co. Ltd. .................... 2,000 203,870
Sankyo Engineering Co. ........... 6,000 18,394
SMH AG ........................... 4,850 654,194
Sterling Commerce, Inc.* ......... 40,000 1,537,500
TDK Corp. ........................ 5,000 377,084
Tokyo Cathode Laboratory Co.* .... 5,400 53,390
TOWA Corp. ....................... 800 16,616
Varitronix International Ltd. ... 469,000 804,968
Yokogawa Electric Corp. .......... 12,000 74,129
------------
35,858,456
------------
OFFICE EQUIPMENT (1.6%)
Barco N.V. ....................... 4,314 791,752
Canon, Inc. ...................... 2,000 46,599
Ceridian Corp.* .................. 101,300 4,640,806
Compaq Computer Corp. ............ 180,125 10,165,805
Dell Computer Corp.* ............. 105,800 8,887,200
Policy Management Systems Corp.* 44,900 3,123,356
------------
27,655,518
------------
OFFICE EQUIPMENT SERVICES (0.4%)
Data Communication System Co. .... 6,000 79,096
First Data Corp. ................. 127,600 3,732,300
Fuji Soft ABC, Inc. .............. 4,200 143,890
INES Corp. ....................... 6,000 46,446
Nippon System Development ........ 3,200 65,729
Oracle Corp.* .................... 105,500 2,353,969
------------
6,421,430
------------
TELECOMMUNICATIONS (2.8%)
ADC Telecommunications, Inc.* .... 205,700 8,587,975
Asia Satellite Telecommunications
Holdings Ltd. ................... 120,000 205,188
DDI Corp. ........................ 240 634,604
DSC Communications Corp.* ........ 40,000 960,000
Energis PLC* ..................... 165,000 691,420
Intermedia Communications, Inc.* 363 22,052
Lucent Technologies, Inc. ........ 107,000 8,546,625
MCI Communications Corp. ......... 80,000 3,425,000
Nextel Communications, Inc.
(Class A)* ...................... 69,500 1,807,000
PT Indosat ....................... 419,000 777,055
PT Telekomunikasi Indonesia ..... 309,000 164,332
SK Telecom Co. Ltd. (ADR)* ...... 85,655 556,756
Tele-Communications TCI Ventures
Group (Class A)* ................ 100,000 2,831,250
Tellabs, Inc.* ................... 113,500 6,001,313
Videsh Sanchar Nigam Ltd. (GDR)+* 28,400 395,612
Vodafone Group PLC ............... 160,000 $ 1,154,257
WorldCom, Inc.* .................. 383,850 11,611,463
------------
48,371,902
------------
TOTAL TECHNOLOGY (6.9%) ......... 118,307,306
------------
DIVERSIFIED
MISCELLANEOUS (1.4%)
BTR PLC .......................... 180,000 544,262
Cie Generale des Eaux ............ 8,259 1,152,706
Citic Pacific Ltd. ............... 60,000 238,482
First Pacific Co. ................ 397,685 192,453
Montedison Spa ................... 1,113,000 999,750
Smith (Howard) Ltd. .............. 35,000 290,481
Swire Pacific Ltd. (Class A) .... 57,000 312,621
Tomkins PLC ...................... 160,000 765,123
Tyco International Ltd. .......... 343,518 15,479,780
U.S. Industries, Inc. ............ 161,400 4,862,175
------------
TOTAL DIVERSIFIED (1.4%) ........ 24,837,833
------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (47.8%)
(Cost $666,960,804) ............. 824,509,813
------------
<PAGE>
PREFERRED STOCKS:
BASIC MATERIALS (0.1%)
CHEMICALS
Henkel KGAA ...................... 15,180 949,304
------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv. ................ 46,100 1,083,350
------------
PRINTING, PUBLISHING &
BROADCASTING (0.0%)
ProSieben Media AG* .............. 5,000 229,300
------------
TRUCKING, SHIPPING (0.0%)
CNF Trust I
5.0% Conv. Series A ............. 19,000 1,083,000
------------
TOTAL BUSINESS SERVICES (0.1%) 2,395,650
------------
CAPITAL GOODS (0.1%)
AEROSPACE
Loral Space & Communications
6.0% Conv. ...................... 37,700 2,318,550
------------
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Finance
Trust
8.5% Conv. ...................... 18,100 1,862,037
------------
RETAIL--GENERAL (0.0%)
Hornbach Holding AG .............. 8,010 552,122
------------
TOTAL CONSUMER CYCLICALS (0.1%) 2,414,159
------------
CREDIT SENSITIVE (0.1%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A ........... 23,000 1,650,250
------------
ENERGY (0.1%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. ..................... 11,600 849,700
------------
59
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
TECHNOLOGY
TELECOMMUNICATIONS (0.6%)
Intermedia Communications, Inc.:
7.0% Conv. Series D ............. 20,500 $ 840,500
7.0% Conv.+ ..................... 28,900 1,184,900
Mobile Telecommunications
$2.25 Conv. ..................... 28,000 938,000
Nextel Strypes Trust
7.25% Conv. ..................... 54,400 1,292,000
Nokia Oyj (A Shares) ............. 14,100 1,001,055
QualComm Financial Trust:
5.75% Conv. ..................... 6,400 299,600
5.75% Conv.+ .................... 36,800 1,722,700
WorldCom, Inc.
8.0% Conv. ...................... 30,700 3,219,663
-------------
TOTAL TECHNOLOGY (0.6%) ......... 10,498,418
-------------
TOTAL PREFERRED STOCKS (1.2%)
(Cost $17,920,454)............... 21,076,031
-------------
PRINCIPAL
AMOUNT
-----------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.1%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ............ $ 710,000 1,476,800
Personnel Group of America:
5.75% Conv., 07/01/04 ........... 110,000 124,850
5.75% Conv., 07/01/04+ .......... 370,000 419,950
-------------
TOTAL BUSINESS SERVICES (0.1%) 2,021,600
-------------
CAPITAL GOODS
AEROSPACE (0.1%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+ ........... 590,000 753,725
-------------
BUILDING & CONSTRUCTION (0.0%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+ ........... 670,000 752,912
-------------
MACHINERY (0.1%)
DII Group, Inc.
6.0% Conv., 10/15/02+ ........... 1,005,000 1,536,444
-------------
TOTAL CAPITAL GOODS (0.2%) ..... 3,043,081
-------------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.2%)
Cendant Corp.
4.75% Conv., 03/01/03 ........... 2,050,000 2,757,250
-------------
RETAIL--GENERAL (0.1%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 ............ 1,455,000 1,729,631
-------------
TOTAL CONSUMER CYCLICALS (0.3%) 4,486,881
-------------
CONSUMER NONCYCLICALS
DRUGS (0.2%)
MedImmune, Inc.:
7.0% Conv., 07/01/03 ............ 615,000 1,398,356
7.0% Conv. Sub., 07/01/03+ ...... 500,000 1,136,875
</TABLE>
<TABLE>
<CAPTION>
=================================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------------
<S> <C> <C>
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00 ..........$ 370,000 $ 415,787
4.25% Conv., 05/31/00+ ......... 580,000 651,775
-----------
3,602,793
-----------
HOSPITAL SUPPLIES &
SERVICES (0.2%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01 ........... 810,000 826,200
6.5% Conv., 12/15/01+ .......... 540,000 550,800
RES-Care, Inc.
6.0% Conv., 12/01/04+ .......... 1,095,000 1,248,300
-----------
2,625,300
-----------
MEDIA & CABLE (1.9%)
Time Warner Entertainment Co.
8.375%, 03/15/23 ............... 23,580,000 26,909,024
Turner Broadcasting System, Inc.
8.375%, 07/01/13 ............... 5,530,000 6,204,771
-----------
33,113,795
-----------
TOTAL CONSUMER NONCYCLICALS (2.3%) 39,341,888
-----------
CREDIT SENSITIVE
BANKS (1.6%)
ABN Amro Bank NV
7.125%, 06/18/07 ............... 25,375,000 26,528,801
Sumitomo Bank International
0.75% Conv., 05/31/01 .......... Yen
101,000,000 810,864
-----------
27,339,665
-----------
FINANCIAL SERVICES (0.7%)
Commercial Credit Co.
6.125%, 12/01/05 ...............$10,000,000 9,810,400
RAC Financial Group, Inc.:
7.25% Conv., 08/15/03 .......... 195,000 469,950
7.25% Conv. Sub., 08/15/03+ ... 625,000 1,506,250
-----------
11,786,600
-----------
INSURANCE (1.5%)
John Hancock Mutual Life
Insurance Co.
7.375%, 02/15/24+ .............. 23,750,000 24,918,262
Penn Treaty American Corp.:
6.25% Conv., 12/01/03 .......... 330,000 425,287
6.25% Conv., 12/01/03+ ......... 905,000 1,166,319
-----------
26,509,868
-----------
MORTGAGE RELATED (7.2%)
Federal Home Loan Mortgage
Corp.:
7.0%, 09/01/11 ................. 25,507,811 25,898,412
7.0%, 01/01/12.................. 5,527,207 5,611,845
Federal National Mortgage
Association:
6.5%, 09/01/11 ................. 16,671,267 16,718,113
6.5%, 06/01/11 ................. 40,495,952 40,749,052
7.0%, 05/01/26 ................. 26,800,480 27,051,601
7.0%, 09/01/27 ................. 8,695,225 8,757,657
-----------
124,786,680
-----------
60
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
=================================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------------
U.S. GOVERNMENT (28.9%)
U.S. Treasury:
6.125% Note, 08/31/98 .......... $15,000,000 $ 15,051,570
6.375% Note, 05/15/99 .......... 52,000,000 52,471,276
6.75% Note, 04/30/00 ........... 21,600,000 22,092,761
6.0% Note, 08/15/00 ............ 68,850,000 69,344,894
6.25% Note, 04/30/01 ........... 43,000,000 43,671,875
6.5% Note, 08/31/01 ............ 81,600,000 83,614,541
6.5% Note, 05/31/02 ............ 86,335,000 88,871,091
5.75% Note, 08/15/03 ........... 21,700,000 21,720,355
6.875% Note, 05/15/06 .......... 41,085,000 43,973,810
6.125% Bond, 11/15/27 .......... 55,405,000 56,928,637
--------------
497,740,810
--------------
TOTAL CREDIT SENSITIVE (39.9%) 688,163,623
--------------
ENERGY
COAL & GAS PIPELINES (0.1%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 ........... 1,125,000 2,036,250
--------------
GAS (0.4%)
RAS Laffan Liquid Natural Gas
8.294%, 03/15/14+ .............. 7,730,000 7,273,976
--------------
OIL--SUPPLIES &
CONSTRUCTION (0.2%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note, 02/15/07 1,090,000 1,442,887
Parker Drilling Corp.
5.5% Conv. Sub., 08/01/04 ..... 960,000 1,029,000
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06 ......... 90,000 101,925
5.375% Conv., 11/15/06+ ........ 755,000 855,037
--------------
3,428,849
--------------
TOTAL ENERGY (0.7%) ............ 12,739,075
--------------
TECHNOLOGY
ELECTRONICS (1.3%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ...................... 1,465,000 2,010,712
Baan Co.:
4.5% Conv. Sub. Note, 12/15/01+ 805,000 1,233,662
4.5% Conv. Sub. Note,
12/15/01 ....................... 230,000 352,475
Cymer, Inc.
3.5% Conv., 08/06/04+(a) ....... 1,420,000 1,073,875
Integrated Process Equipment
6.25% Conv., 09/15/04+ ......... 2,110,000 1,748,663
Level One Communications:
4.0% Conv., 09/01/04 ........... 360,000 338,400
4.0% Conv., 09/01/04+ .......... 1,140,000 1,071,600
Photronics, Inc.
6.0% Conv., 06/01/04 ........... 1,870,000 2,143,488
Quantum Corp.
5.0% Conv., 03/01/03+ .......... 355,000 644,325
Sanmina Corp.
5.5% Conv., 08/15/02+ .......... 1,345,000 3,259,944
SCI Systems, Inc.
5.0% Conv., 05/01/06+ .......... 1,670,000 3,110,375
Solectron Corp.
6.0% Conv., 03/01/06+ .......... $ 1,070,000 $ 1,467,238
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ .......... 1,390,000 1,487,300
Xilinx, Inc.
5.25% Conv., 11/01/02+ ......... 1,865,000 1,804,388
--------------
21,746,445
--------------
TELECOMMUNICATIONS (0.1%)
Comverse Technology, Inc.:
5.75% Conv., 10/01/06 .......... 185,000 199,338
5.75% Conv. Sub., 10/01/06+ ... 1,605,000 1,729,388
--------------
1,928,726
--------------
TOTAL TECHNOLOGY (1.4%) ........ 23,675,171
--------------
TOTAL LONG-TERM DEBT SECURITIES (44.9%)
(Cost $752,359,876)............. 773,471,319
--------------
<PAGE>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (5.4%)
Federal Home Loan Mortgage Corp.
6.0%, due 01/02/98 ............. 92,700,000 92,684,550
--------------
TOTAL SHORT-TERM DEBT SECURITIES (5.4%)
(Cost $92,684,550).............. 92,684,550
--------------
TOTAL INVESTMENTS (99.3%)
(Cost/Amortized Cost $1,529,925,684) 1,711,741,713
OTHER ASSETS
LESS LIABILITIES (0.7%)......... 12,346,816
--------------
NET ASSETS (100.0%) ............. $1,724,088,529
==============
</TABLE>
61
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY
GLOBAL REGION
As a Percentage of Total
Investments
Australia ................ 0.2%
Canada ................... 0.1
France ................... 1.1
Germany .................. 0.6
Japan .................... 1.8
Netherlands .............. 0.6
Scandinavia .............. 0.6
Southeast Asia ........... 0.4
Spain .................... 0.4
Switzerland .............. 0.6
United Kingdom ........... 2.3
United States** .......... 90.8
Other European Countries 0.5
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 5.4%.
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $68,953,728
or 4.0% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
62
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1997
<TABLE>
<CAPTION>
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (0.2%)
AGA AB (A Shares) ................ 3,400 $ 46,890
Akzo Nobel N.V. .................. 4,000 689,665
Asahi Chemical Industry Co. ..... 27,000 91,466
Bayer AG ......................... 25,400 942,466
BOC Group PLC .................... 6,825 112,268
GP Batteries International Ltd. . 180,000 468,867
GP Batteries International
Ltd.--Warrants*.................. 5,750 4,719
Imperial Chemical Industries PLC 18,212 284,614
Indo Gulf Fertilisers & Chemicals
Corp. Ltd. (GDR)+................ 50,000 40,000
Ishihara Sangyo Kaisha Ltd.* .... 90,000 100,019
Johnson Matthey PLC .............. 25,000 223,900
Kuraray Co. Ltd. ................. 6,000 49,665
L'Air Liquide .................... 2,035 318,513
Linde AG ......................... 150 90,970
Mitsui Chemicals, Inc.* .......... 9,000 17,521
Royal Group Technologies Ltd.* ... 10,000 231,875
Sanyo Chemicals Industries Ltd. . 9,000 52,424
Solvay Et Cie Societe Anonyme ... 1,200 75,463
Sumitomo Chemical Co. Ltd. ...... 28,000 64,380
Toray Industries, Inc. ........... 29,000 130,025
UBE Industries Ltd. .............. 14,000 17,812
-----------
4,053,522
-----------
CHEMICALS--SPECIALTY (0.5%)
Cytec Industries, Inc.* .......... 57,900 2,717,681
Kyowa Hakko Kogyo Co. ............ 8,000 34,643
NGK Insulators ................... 6,000 53,344
SGL Carbon AG+ ................... 15,000 1,917,785
Solutia, Inc. .................... 113,000 3,015,687
UCAR International, Inc.* ........ 5,000 199,688
-----------
7,938,828
-----------
METALS & MINING (0.2%)
Alusuisse Lonza Holding AG ...... 90 86,457
Bethlehem Steel Corp.* ........... 330,000 2,846,250
Degussa AG ....................... 2,500 123,683
Granges AB* ...................... 550 8,624
Great Central Mines Ltd. ......... 75,000 80,617
Gwalia Consolidated Ltd.* ........ 88,300 46,594
Japan Energy Corp. ............... 19,000 17,911
Mitsubishi Materials Corp. ...... 24,000 38,628
Randgold Resources Ltd. (GDR)*+ . 7,600 39,900
Rio Tinto Ltd. ................... 5,800 67,645
Rio Tinto PLC .................... 27,615 339,895
Sumitomo Metal Mining Co. ........ 10,000 32,956
Toho Titanium* ................... 48,000 404,675
WMC Ltd. ......................... 40,700 141,850
-----------
4,275,685
-----------
PAPER (0.2%)
Amcor Ltd. ....................... 8,900 39,136
Asia Pacific Resources
International Ltd. (Class A)* .. 5,000 9,375
Asia Pacific Resources
International Ltd.
(Class A)--Warrants* ............ 5,000 $ 625
Enso Oy (Series R) ............... 30,000 232,253
Fletcher Challenge Forest ........ 4,256 3,534
Grupo Industrial Durango (ADR)* . 12,000 171,000
Jefferson Smurfit Corp.* ......... 79,300 1,120,113
Nippon Paper Industries Co. ..... 2,000 7,848
Oji Paper Co. Ltd. ............... 22,000 87,511
Stone Container Corp.* ........... 123,000 1,283,812
Svenska Cellulosa (Series B) .... 3,200 71,940
UPM-Kymmene Oy ................... 3,292 65,829
-----------
3,092,976
-----------
STEEL (0.1%)
Broken Hill Proprietary Co. Ltd. . 50,000 464,157
Kawasaki Steel Corp. ............. 54,000 73,669
Nippon Steel Corp. ............... 217,000 320,989
NKK Corp. ........................ 85,000 67,752
Sumitomo Metal Industries ........ 268,000 343,024
Thyssen AG ....................... 450 96,056
Usinor Sacilor ................... 3,500 50,536
-----------
1,416,183
-----------
TOTAL BASIC MATERIALS (1.2%) ... 20,777,194
-----------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.4%)
B.U.S. Berzelius Umwelt-Service
AG .............................. 22,000 293,505
Daiseki Co. Ltd. ................. 7,600 78,636
Matsuda Sangyo Co. Ltd. .......... 12,000 72,474
Powerscreen International PLC ... 75,000 752,988
Rentokil Initial PLC ............. 177,200 771,663
Tomra Systems ASA ................ 102,660 2,293,441
United States Filter Corp.* ..... 75,000 2,245,312
USA Waste Services, Inc.* ........ 177,000 6,947,250
Waste Management, Inc. ........... 390,500 10,738,750
-----------
24,194,019
-----------
PRINTING, PUBLISHING &
BROADCASTING (2.8%)
British Sky Broadcasting Group
PLC ............................. 50,476 378,240
Cablevision Systems Corp.
(Class A)* ...................... 53,500 5,122,625
Carlton Communications PLC ...... 200,900 1,551,657
CBS Corp. ........................ 291,250 8,573,672
Dai Nippon Printing Co. Ltd. .... 19,000 356,773
Elsevier N.V. .................... 66,445 1,074,838
Havas ............................ 200 14,389
Liberty Media Group (Class A)* ... 301,150 10,916,688
Mediaset Spa ..................... 140,000 687,733
Mirror Group PLC ................. 70,000 224,311
New York Times Co. (Class A) .... 100,300 6,632,337
News Corp. Ltd. .................. 59,900 330,515
Nippon Television Network Corp. . 2,000 587,086
Pegasus Communications Corp.
(Class A)* ...................... 1,128 22,983
Reader's Digest Association, Inc.
(Class A) ....................... 100,000 2,362,500
63
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Reed International PLC ........... 80,000 $ 801,932
Star Publications BHD ............ 20,000 22,831
Takara Printing Co. .............. 11,000 32,880
Time Warner, Inc. ................ 103,000 6,386,000
Tokyo Broadcasting System, Inc. .. 45,000 569,075
Toppan Printing Co. .............. 7,000 91,205
Ver Ned Uitgeversbedr Ver Bezit
N.V. ............................ 6,000 169,260
-----------
46,909,530
-----------
PROFESSIONAL SERVICES (0.3%)
Adecco SA ........................ 275 79,742
Alvern Norway ASA* ............... 76,550 181,378
Apcoa Parking AG+ ................ 3,000 220,128
Asatsu, Inc. ..................... 22,400 322,759
Brisa-Auto Estradas de Portugal
SA* ............................. 7,000 250,753
Content Beheer N.V.+ ............. 53,000 1,306,932
Meitec ........................... 61,800 1,738,310
Secom Co. ........................ 2,000 127,841
WPP Group PLC .................... 100,000 445,335
-----------
4,673,178
-----------
TRUCKING, SHIPPING (0.8%)
Brambles Industries Ltd. ......... 90,000 1,785,295
Frontline Ltd.* .................. 400,000 1,613,908
Irish Continental Group PLC ..... 30,000 367,082
Knightsbridge Tankers Ltd. ...... 110,700 3,134,194
Mitsui O.S.K. Lines Ltd.* ........ 19,000 26,357
Nippon Express Co. Ltd. .......... 20,000 99,636
Nippon Yusen K.K. ................ 13,000 35,670
OMI Corp.* ....................... 652,900 5,998,519
Penninsular & Oriental Steam
Navigation Co. .................. 10,466 119,102
Yamato Transport Co. Ltd. ........ 8,000 107,300
-----------
13,287,063
-----------
TOTAL BUSINESS SERVICES (5.3%) .. 89,063,790
-----------
CAPITAL GOODS
AEROSPACE (0.0%)
British Aerospace ................ 11,284 321,722
Rolls-Royce PLC .................. 22,528 86,998
-----------
408,720
-----------
BUILDING & CONSTRUCTION (0.2%)
ABB AG ........................... 300 376,926
CSR Ltd. ......................... 16,900 57,249
Daito Trust Construction Co. .... 17,200 105,065
Daiwa House Industry Co. Ltd. ... 9,000 47,595
Hitachi Plant Engineering &
Construction Co. ................ 25,000 55,758
Hochtief AG ...................... 1,500 61,703
Japan Industrial Land Development 19,000 45,871
Kaneshita Construction ........... 26,000 117,570
Kumagai Gumi Co. ................. 6,000 3,265
MacMahon Holdings Ltd. ........... 600,000 187,617
Mancon BHD ....................... 47,999 17,400
Metacorp BHD ..................... 10,000 4,242
Mitsui Home Co. Ltd. ............. 32,000 174,133
Nanno Construction Co. Ltd. ..... 26,000 20,924
Nawarat Patanakarn Public Co. ... 80,000 3,323
Nippon Denwa Shisetsu ............ 30,000 114,965
Nishimatsu Construction Co. ..... 4,000 $ 12,569
Obayashi Corp. ................... 12,000 40,835
Ohmoto Gumi Co. Ltd. ............. 15,000 64,380
Oriental Construction Co. ........ 12,800 55,919
Pacific Rim Infra Management
Enterprises Ltd.* ............... 493,200 16,230
Penta-Ocean Construction ......... 5,000 7,013
PS Corp. ......................... 31,200 118,368
Sanyo Engineering & Construction
Co. ............................. 18,000 64,840
Sekisui House Ltd. ............... 13,000 83,595
Shimizu Corp. .................... 15,000 34,719
Sho Bond Corp. ................... 54,000 976,739
Skanska AB (Series B) ............ 1,620 66,413
Suido Kiko Kaisha ................ 9,000 18,072
Taisei Corp. ..................... 20,000 32,803
Toda Corp. ....................... 30,000 81,625
United Engineers Malaysia BHD .... 11,000 9,163
Wesco, Inc. ...................... 10,800 26,488
YTL Corp. BHD .................... 16,500 22,272
YTL Corp. BHD--Rights* ........... 1,650 0
-----------
3,125,649
-----------
BUILDING MATERIALS & FOREST
PRODUCTS (0.5%)
BPB PLC .......................... 90,000 502,851
Blue Circle Industries PLC ...... 13,338 74,851
Chichibu Onoda Cement Co. ........ 11,000 20,234
Cie de St. Gobain ................ 3,150 447,495
Dahl International AB+ ........... 45,000 663,107
Fujikura Ltd. .................... 132,000 874,098
Furukawa Electric Co. ............ 13,000 55,696
Heidelberg Zement AG ............. 1,100 77,106
Holderbank Financiere Glaris AG . 80 65,293
Lafarge SA ....................... 6,850 449,458
Martin Marietta Materials, Inc. . 124,200 4,541,063
Nichiha Corp. .................... 70,700 432,409
Portland Valderrivas SA .......... 4,900 440,630
Rexam PLC ........................ 13,121 64,470
RMC Group PLC .................... 4,518 63,108
Sumitomo Forestry Co. ............ 7,000 34,068
Wolseley PLC ..................... 10,088 80,070
-----------
8,886,007
-----------
ELECTRICAL EQUIPMENT (1.3%)
Alcatel Alsthom .................. 6,000 762,649
Daikin Industries Ltd. ........... 5,000 18,854
General Electric Co. ............. 255,000 18,710,625
General Electric Co. PLC ......... 61,328 397,579
Kinden Corp. ..................... 5,000 53,267
Mabuchi Motor Co. ................ 10,000 508,143
Schneider SA ..................... 2,250 122,173
Siemens AG ....................... 14,750 889,616
Sumitomo Electric Industries .... 31,000 422,916
Yaskawa Electric Corp. ........... 14,000 34,873
-----------
21,920,695
-----------
MACHINERY (1.9%)
Allied Signal, Inc. .............. 163,200 6,354,600
Amada Co. Ltd. ................... 5,000 18,586
Asahi Diamond Industry Co. Ltd. . 33,000 143,913
64
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Cie Generale de Geophysique SA
(ADR)* .......................... 169,223 $ 4,336,339
Coltec Industries, Inc.* ......... 128,000 2,968,000
Construcciones y Auxiliar de
Ferrecarriles SA ................ 3,000 110,666
Ebara Corp. ...................... 5,000 52,884
Enshu* ........................... 51,000 63,713
Fanuc Co. ........................ 5,900 223,384
IHC Caland N.V. .................. 10,000 518,827
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 82,000 122,552
Kalmar Industries AB+ ............ 16,050 258,744
Kawasaki Heavy Industries Ltd. .. 112,000 173,397
Keyence Corp. .................... 400 59,168
Komatsu Ltd. ..................... 29,000 145,583
Kubota Corp. ..................... 33,000 87,005
Mitsubishi Heavy Industries Ltd. . 170,000 708,795
Namura Shipbuilding .............. 20,000 45,219
Nireco ........................... 11,000 40,468
Nitta Corp. ...................... 38,600 390,512
Nitto Kohki Co. Ltd. ............. 32,000 348,266
Rauma Oy ......................... 92 1,435
Rofin-Sinar Technologies, Inc.* . 20,000 242,500
SMC Corp. ........................ 11,200 987,162
Sodick Co.* ...................... 126,000 361,173
Thai Engine Manufacturing Public
Co. Ltd. ........................ 100,000 166,148
United Technologies Corp. ........ 166,000 12,086,875
-----------
31,015,914
-----------
TOTAL CAPITAL GOODS (3.9%) ..... 65,356,985
-----------
CONSUMER CYCLICALS
AIRLINES (0.2%)
British Airways PLC .............. 45,000 414,113
Cathay Pacific Airways ........... 41,000 33,333
Japan Air Lines Co.* ............. 24,000 65,300
KLM .............................. 13,700 506,744
Lufthansa AG ..................... 58,000 1,089,747
Quantas Airways Ltd. ............. 40,000 70,773
Singapore Airlines Ltd. .......... 70,000 457,925
Virgin Express Holdings PLC
(ADR)* .......................... 24,000 498,000
-----------
3,135,935
-----------
APPAREL, TEXTILES (0.3%)
Carli Gry International A/S ..... 20,000 1,123,776
King Co. ......................... 62,000 59,398
Liz Claiborne, Inc. .............. 70,000 2,926,875
PT Great River International .... 1,709,000 139,827
Teijin Ltd. ...................... 18,000 37,663
-----------
4,287,539
-----------
AUTO RELATED (0.6%)
Asahi Glass Co. Ltd. ............. 29,000 137,804
Bridgestone Corp. ................ 22,000 477,179
Bridgestone Metalpha Corp. ...... 11,000 40,889
Denso Corp. ...................... 30,000 540,333
LucasVarity PLC .................. 15,000 52,997
Michelin (CGDE), (Class B) ...... 8,000 402,758
Minebea Co. Ltd. ................. 78,000 836,942
NGK Spark Plug Co. ............... 48,000 272,236
Republic Industries, Inc.* ...... 261,900 6,105,544
Toyoda Gosei ..................... 32,000 $ 115,762
-----------
8,982,444
-----------
AUTOS & TRUCKS (0.5%)
Daimler-Benz AG .................. 23,950 1,690,792
Fiat Spa ......................... 74,250 215,950
Harley-Davidson, Inc. ............ 249,000 6,816,375
Honda Motor Co. Ltd. ............. 3,000 110,136
Isuzu Motors Ltd. ................ 15,000 23,338
Perusahaan Otomobil Nasional .... 9,000 8,793
Peugeot SA ....................... 700 88,278
-----------
8,953,662
-----------
FOOD SERVICES, LODGING (1.5%)
AAPC Ltd. ........................ 400,000 164,165
Accor SA ......................... 9,000 1,673,341
Compass Group PLC ................ 220,000 2,707,837
Fujita Kanko, Inc. ............... 3,000 32,190
Host Marriott Corp.* ............. 250,300 4,912,137
ITT Corp.* ....................... 185,100 15,340,162
QPQ Corp.--Warrants* ............. 16,400 64
Restaurant Brands NZ Ltd.*+ ..... 300,000 296,131
Sanyo Pax Co. Ltd. ............... 33,000 285,802
Takihyo Co. Ltd. ................. 24,000 104,848
-----------
25,516,677
-----------
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Elamex S.A. de C.V.* ............. 73,400 550,500
Electrolux B ..................... 1,100 76,336
Industrie Natuzzi Spa (ADR) ..... 30,000 618,750
Philips Electronics .............. 2,680 160,722
Sanyo Electric Co. Ltd. .......... 56,000 145,928
Sony Corp. ....................... 12,000 1,066,871
Sunbeam Corp. .................... 320,600 13,505,275
Tostem Corp. ..................... 2,000 21,460
Toto Ltd. ........................ 5,000 31,960
-----------
16,177,802
-----------
LEISURE RELATED (1.9%)
Aristocrat Leisure Ltd. .......... 37,500 74,509
Capcom Co. Ltd. .................. 3,900 40,054
Carnival Corp. (Class A) ......... 122,200 6,766,825
Cendant Corp.* ................... 251,000 8,628,125
Cinar Films, Inc. (Class B)* .... 14,000 544,250
Cyrk, Inc.* ...................... 296,100 2,868,469
Disney (Walt) Co. ................ 66,507 6,588,350
EMI Group PLC .................... 30,001 250,445
Granada Group PLC ................ 25,587 391,039
Hoyts Cinemas Group+ ............. 500,000 879,456
Imagineer Co. Ltd. ............... 14,000 109,446
KTM Motorradholding AG* .......... 10,000 505,086
Mars Engineering Corp. ........... 4,100 22,625
NAMCO Ltd. ....................... 6,400 185,905
Nelvana Limited*+ ................ 18,000 346,287
Nintendo Co. Ltd. ................ 5,000 490,515
Nippon Broadcasting System ...... 24,000 949,147
Rank Group PLC ................... 32,498 181,040
Resorts World BHD ................ 24,000 40,417
S.M.H. Porteur AG ................ 100 55,187
Sega Enterprises Ltd. ............ 2,000 36,176
65
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Tag Heuer International SA (ADR)* 50,200 $ 414,150
Toei Co. Ltd. .................... 32,000 116,497
Toho Co. ......................... 400 42,614
Tokyo Dome Corp. ................. 3,000 19,958
Tourism Holdings Ltd. ............ 70,000 47,962
@Entertainment, Inc.* ............ 138,300 1,538,587
------------
32,133,121
------------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. .............. 16,000 613,144
Noritsu Koki Co. Ltd. ............ 43,400 1,071,071
------------
1,684,215
------------
RETAIL--GENERAL (2.9%)
Aldeasa SA* ...................... 30,823 653,484
Boots Co. PLC .................... 35,540 511,903
British Airport Authority PLC ... 40,000 327,346
Carrefour ........................ 1,225 639,113
Centros Comerciales Pryca SA .... 4,000 59,600
Daiei, Inc. ...................... 14,000 57,942
Dayton Hudson Corp. .............. 169,700 11,454,750
Dixons Group PLC ................. 160,000 1,606,494
Doshisha Co. ..................... 7,000 34,336
Eiden Sakakiya Co. Ltd. .......... 25,000 92,930
Fingerhut Companies, Inc. ........ 145,000 3,099,375
Great Universal Stores PLC........ 39,213 494,246
Harvey Nicholos PLC .............. 30,600 95,542
Hennes & Mauritz AB
(B Shares) ...................... 2,500 110,203
Homac Corp. ...................... 11,000 55,559
Home Depot, Inc. ................. 185,900 10,944,862
Home Wide Corp.................... 16,000 53,344
Isetan Co. ....................... 79,000 329,987
Japan Airport Terminal Co. Ltd. . 67,000 421,077
Karstadt AG ...................... 150 51,864
Kohls Corp.* ..................... 102,700 6,996,437
Kokuyo Co. Ltd. .................. 12,000 206,936
Koninklijke Ahold N.V. ........... 5,367 140,021
Limited, Inc. .................... 212,500 5,418,750
Marks & Spencer PLC............... 90,055 886,447
Marui Co. Ltd. ................... 7,000 108,910
Metro AG ......................... 2,280 80,860
Paris Miki, Inc. ................. 37,200 399,157
Pinault Printemps ................ 600 320,113
S.T. Dupont*+ .................... 29,100 381,005
Sainsbury (J) PLC ................ 26,514 221,774
Sato Corp. ....................... 47,440 807,180
Smith (W.H.) Group PLC ........... 70,000 447,472
Sriwani Holdings BHD ............. 278,000 73,619
Swank International Manufacturing
Co.* ............................ 300,000 32,520
Thistle Hotels PLC+ .............. 131,600 342,943
Warehouse Group Ltd. ............. 140,000 373,938
Xebio Co. Ltd. ................... 5,800 46,231
------------
48,378,270
------------
TOTAL CONSUMER CYCLICALS (9.0%) 149,249,665
------------
CONSUMER NONCYCLICALS
BEVERAGES (1.1%)
Asahi Breweries Ltd. ............. 8,000 116,497
Bass PLC ......................... 22,100 343,014
Cadbury Schweppes PLC ............ 18,792 $ 189,455
Carlsberg 'A' .................... 900 48,648
Coca-Cola Co. .................... 189,500 12,625,438
Coca-Cola Amatil Ltd. ............ 2,000 14,939
Diageo PLC ....................... 190,000 1,746,915
Heineken N.V. .................... 801 139,449
Kirin Brewery Co. ................ 16,000 116,497
Louis Dreyfus Citrus ............. 42,440 1,297,493
Panamerican Beverages, Inc. ..... 18,000 587,250
Quilmes Industrial Quins (ADR) ... 22,000 301,125
------------
17,526,720
------------
CONTAINERS (0.9%)
Owens-Illinois, Inc.* ............ 70,000 2,655,625
Sealed Air Corp.* ................ 206,300 12,739,025
Toyo Seikan Kaisha ............... 3,000 42,767
------------
15,437,417
------------
DRUGS (3.5%)
Astra AB (A Shares) .............. 25,000 432,940
Centocor, Inc.* .................. 260,602 8,665,017
Daiichi Pharmaceutical Co. ...... 5,000 56,333
Eisai Co. Ltd. ................... 5,000 76,260
Geltex Pharmaceuticals, Inc.* ... 22,700 601,550
Glaxo Wellcome PLC ............... 66,706 1,578,503
Hafslund ASA (B Shares) .......... 11,700 55,761
Merck & Co., Inc. ................ 94,700 10,061,875
Novartis AG ...................... 2,151 3,490,496
Novo-Nordisk A/S (B Shares) ..... 6,000 858,156
Orion-Yhtyma Oy (B Shares) ...... 71,000 1,875,636
Pfizer, Inc. ..................... 175,100 13,055,894
Roche Holding AG Genusscheine ... 150 1,489,730
Rohto Pharmaceutical Co. Ltd. ... 2,000 12,876
Sankyo Co. Ltd. .................. 48,000 1,085,265
Santen Pharmaceutical Co. Ltd. .. 110,000 1,264,610
Schering AG ...................... 1,250 120,556
Schering Plough Corp. ............ 110,000 6,833,750
Smithkline Beecham PLC ........... 317,338 3,248,839
Taisho Pharmaceutical Co. ........ 22,000 561,487
Yamanouchi Pharmaceutical Co.
Ltd. ............................ 86,000 1,845,564
Zeneca Group PLC ................. 30,000 1,053,522
------------
58,324,620
------------
FOODS (1.4%)
Ajinomoto Co., Inc. .............. 9,000 87,603
Campbell Soup Co. ................ 154,755 8,995,134
Fyffes PLC ....................... 1,100,000 1,643,333
Groupe Danone .................... 2,100 375,093
Karlshamns AB*+ .................. 66,000 1,030,743
Nestle SA ........................ 930 1,393,886
Nippon Meat Packers, Inc. ........ 4,000 54,570
Nissin Food Products Co. ......... 3,000 54,493
Nutricia Verenigde Bedrijven
N.V.+ ........................... 19,000 576,283
Oie Sangyo Co. Ltd. .............. 6,000 24,832
PT Sekar Bumi .................... 238,000 7,573
Rite Aid Corp. ................... 72,500 4,254,844
Shiram Industrial Enterprises
Ltd. (ADR)*+ .................... 24,000 48,000
Tingyi Holdings Corp. ............ 480,000 62,563
Tyson Foods, Inc. ................ 237,000 4,858,500
66
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Yamakazi Baking Co. .............. 4,000 $ 38,935
------------
23,506,385
------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
Cochlear Ltd. .................... 8,000 26,058
Columbia/HCA Healthcare Corp. .... 160,000 4,740,000
Medtronic, Inc. .................. 214,068 11,198,432
NIC Corp. ........................ 4,000 21,767
Scandinavian Mobility
International A/S ............... 8,000 73,556
United Healthcare Corp. .......... 100,000 4,968,750
------------
21,028,563
------------
RETAIL--FOOD (0.2%)
Daimon Co. Ltd. .................. 10,000 19,927
Familymart Co. ................... 23,200 832,159
Ito Yokado Co. Ltd. .............. 14,000 713,547
Jusco Co. ........................ 9,000 126,921
McBride PLC ...................... 60,000 174,519
Santa Isabel S.A. (ADR) .......... 12,000 210,000
Seven-Eleven Japan Co. Ltd. ..... 18,600 1,317,218
Tesco PLC ........................ 71,199 579,158
------------
3,973,449
------------
SOAPS & TOILETRIES (1.6%)
Avon Products, Inc. .............. 141,600 8,690,700
BIC .............................. 1,200 87,590
Gillette Corp. ................... 151,970 15,263,487
L'Oreal .......................... 2,455 960,625
Unilever PLC...................... 102,420 876,881
Unilever N.V. CVA ................ 15,160 934,579
------------
26,813,862
------------
TOBACCO (1.5%)
Imperial Tobacco Group PLC ...... 127,000 799,320
Japan Tobacco, Inc. .............. 46 326,469
Philip Morris Cos., Inc. ......... 509,200 23,073,125
RJ Reynolds BHD .................. 80,000 130,608
Rothmans of Pall Mall BHD ........ 6,000 46,664
Swedish Match AB ................. 360,000 1,201,526
------------
25,577,712
------------
TOTAL CONSUMER NONCYCLICALS (11.5%) 192,188,728
------------
CREDIT SENSITIVE
BANKS (2.6%)
ABN Amro Holding N.V. ............ 26,124 508,913
Akita Bank ....................... 29,000 113,355
Asahi Bank Ltd. .................. 49,000 199,042
Banca Commerciale Italiana ...... 35,000 121,679
Banco Bilbao Vizcaya SA .......... 19,392 627,519
Banco Latinoamericano de
Exportaciones S.A. (E Shares) ... 15,000 620,625
Banco Santander SA ............... 13,221 441,712
Bank Austria AG .................. 920 46,614
Bank of Tokyo-Mitsubishi Bank
Ltd. ............................ 88,000 1,214,026
Banque Nationale de Paris ........ 4,450 236,530
Barclays PLC ..................... 30,000 797,660
Chase Manhattan Corp. ............ 109,600 12,001,200
Cie Financiere de Paribas A ..... 2,750 238,972
Citicorp ......................... 82,700 10,456,381
Credit Suisse Group .............. 6,700 1,036,768
Dai-Ichi Kangyo Bank ............. 110,000 $ 649,167
Deutsche Bank AG ................. 13,300 930,065
Dresdner Bank AG ................. 2,900 131,866
Forenings Sparbanken AB
(A Shares) ...................... 12,000 272,799
Fuji Bank Ltd. ................... 63,000 254,945
Grupo Financiero Banorte
(Class B)* ...................... 22,500 39,082
Hang Seng Bank ................... 58,000 559,492
HSBC Holdings PLC ................ 20,000 492,967
HSBC Holdings PLC (H.K.$) ........ 37,374 922,481
Instituto Mobiliare Italiano .... 10,000 118,711
Lloyds TSB Group PLC ............. 167,866 2,170,978
Malayan Banking BHD .............. 29,000 84,252
Mediobanca Spa ................... 10,000 78,519
Mitsubishi Trust & Banking Corp. 42,000 421,690
National Australia Bank Ltd. .... 55,400 773,414
Sakura Bank Ltd. ................. 82,000 234,420
Shizuoka Bank Ltd. ............... 31,000 332,631
Skandinaviska Enskilda Banken
(Series A) ...................... 103,120 1,305,251
Societe Generale ................. 2,400 326,992
Sumitomo Bank Ltd. ............... 114,000 1,301,859
Suncorp-Metway Ltd.* ............. 371,652 932,132
Svenska Handelbanken
(Series A) ...................... 3,100 107,174
Toho Bank ........................ 50,000 199,272
Union Bank of Switzerland ........ 850 1,229,168
United Overseas Bank Ltd. ........ 10,000 55,605
------------
42,585,928
------------
FINANCIAL SERVICES (5.1%)
Abbey National PLC ............... 14,314 256,628
Aiful Corp.* ..................... 8,900 603,679
Amvescap PLC ..................... 90,000 773,503
Associates First Capital Corp. .. 61,600 4,381,300
Beneficial Corp. ................. 90,200 7,497,875
CMAC Investment Corp. ............ 100,000 6,037,500
CMIC Finance & Securities Public
Co. Ltd. ........................ 200,000 0
Credit Saison Co. ................ 81,700 2,016,279
Daiwa Securities Co. Ltd. ........ 19,000 65,530
Fleet Financial Group, Inc. ..... 87,500 6,557,031
Green Tree Financial Corp. ...... 191,800 5,022,762
Groupe Bruxelles Lambert SA ..... 450 65,099
Hong Leong Finance Ltd. .......... 40,000 43,057
JCG Holdings Ltd. ................ 60,000 25,745
MBNA Corp. ....................... 524,175 14,316,530
Merrill Lynch & Co., Inc. ........ 108,900 7,942,894
Morgan Stanley, Dean Witter,
Discover & Co. .................. 389,100 23,005,538
Newcourt Credit Group, Inc.* .... 57,200 1,909,050
Nichiei Co. Ltd. ................. 4,600 490,056
Nomura Securities Co. ............ 61,000 813,489
PMI Group, Inc. .................. 15,900 1,149,769
Sanyo Shinpan Finance Co. Ltd. .. 8,000 353,784
Schroders PLC .................... 3,875 121,816
Takefuji Corp. ................... 32,160 1,476,439
------------
84,925,353
------------
67
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
INSURANCE (4.0%)
Aegon N.V. ....................... 12,000 $ 1,068,232
Allianz AG ....................... 9,000 2,321,354
Assicurazioni Generali ........... 21,800 535,449
ASR Verzekeringsgroep N.V. ...... 22,900 1,245,713
Commercial Union PLC ............. 10,726 149,645
Corporacion Mapfre Cia Inter SA .. 44,000 1,166,787
Fortis AG ........................ 740 154,387
Fortis Amev N.V. ................. 17,000 741,154
General Accident PLC ............. 8,971 155,529
GIO Australia Holdings Ltd. ..... 200,000 511,127
ING Groep N.V. ................... 30,000 1,263,532
Istituto Naz Delle Assicurazioni 60,000 121,594
Koa Fire & Marine ................ 12,000 45,066
Legal & General Group PLC ........ 23,090 201,862
Life Re Corp. .................... 240,000 15,645,000
MGIC Investment Corp. ............ 97,300 6,470,450
Mitsui Marine & Fire Insurance
Co. ............................. 13,000 66,358
Norwich Union PLC* ............... 90,000 576,800
Pacific & Orient BHD ............. 150,000 68,646
PennCorp Financial Group, Inc. .. 144,600 5,160,412
Providian Financial Corp. ........ 128,500 5,806,594
Prudential Corp. PLC.............. 62,486 753,697
Royal & Sun Alliance Insurance
Group PLC ....................... 49,613 499,774
Schweizerische
Ruckversicherungs-Gesellschaft .. 640 1,197,179
Skandia Forsakrings AB ........... 2,500 117,917
Tokio Marine & Fire Insurance Co. 34,000 385,668
Travelers Group, Inc. ............ 346,401 18,662,354
Willis Corroon Group PLC (ADR) .. 131,800 1,622,787
-----------
66,715,067
-----------
REAL ESTATE (1.3%)
Boston Properties, Inc. .......... 171,200 5,660,300
British Land Co. PLC.............. 8,416 94,183
Castellum AB* .................... 119,000 1,184,020
Cheung Kong Holdings ............. 59,000 386,405
City Developments Ltd. ........... 50,000 231,936
Daibiru Corp. .................... 17,000 124,430
DBS Land ......................... 17,000 26,084
Diligentia AB* ................... 800 10,680
Glenborough Realty Trust, Inc. .. 165,000 4,888,125
Land Securities PLC .............. 9,978 159,050
Lend Lease Corp. Ltd. ............ 4,100 80,128
MEPC PLC ......................... 8,200 68,453
Mitsubishi Estate Co. ............ 14,000 152,366
Mitsui Fudosan ................... 20,000 193,140
Nackebro Fastighets AB ........... 310 4,509
New World Development Co. ........ 48,000 166,009
Sap Holdings BHD ................. 40,000 14,912
Singapore Land Ltd. .............. 80,000 176,033
Sino Land Co. .................... 740,000 446,445
Spieker Properties, Inc. ......... 81,800 3,507,175
Sumitomo Realty & Development Co.
Ltd. ............................ 137,000 787,507
Sun Hung Kai Properties .......... 48,000 334,495
Vornado Realty Trust ............. 54,900 2,576,869
Wharf Holdings ................... 17,000 $ 37,295
-----------
21,310,549
-----------
UTILITY--ELECTRIC (1.3%)
AES Corp.* ....................... 123,200 5,744,200
British Energy PLC ............... 400,000 2,780,471
China Light & Power Co. Ltd. .... 36,000 199,768
Cia Paranaense de Energia-Copel
(ADR) ........................... 124,000 1,697,250
Edison Spa ....................... 15,000 90,729
Electrabel SA..................... 1,290 298,380
Electricidade de Portugal SA* ... 50,800 961,902
Endesa SA ........................ 34,256 608,221
Energis PLC* ..................... 415,000 1,739,027
Energy Group PLC ................. 13,333 147,236
Enersis S.A. (ADR) ............... 6,000 174,000
Gas Y Electridad SA (Series 2) .. 5,000 361,011
Hibroelectrica del Cantabrico ... 12,000 526,157
Iberdrola SA ..................... 90,000 1,184,444
Kansai Electric Power Co., Inc. . 22,400 379,414
National Grid Group PLC .......... 180,000 854,846
National Power PLC ............... 120,560 1,188,701
Powergen PLC (ADR) ............... 1,250 66,406
RWE AG ........................... 8,600 461,325
Tenaga Nasional BHD .............. 85,000 181,386
Tohoku Electric Power Co., Inc. . 11,500 174,516
Tokyo Electric Power Co. ......... 28,000 510,749
<PAGE>
Tractebel Investment
International Capital ........... 1,100 95,895
Tractebel Investment
International Capital--Warrants* 220 0
Veba AG .......................... 15,000 1,021,429
Viag AG .......................... 500 273,771
-----------
21,721,234
-----------
UTILITY--GAS (0.0%)
Centrica PLC* .................... 100,557 147,895
Thames Water ..................... 7,439 110,816
-----------
258,711
-----------
UTILITY--TELEPHONE (1.2%)
British Telecommunications PLC ... 181,984 1,430,979
Cable & Wireless PLC ............. 53,873 473,634
Empresas Telex-Chile S.A. (ADR) . 14,100 55,519
Hellenic Telecommunication
Organization SA ................. 18,272 374,368
Hellenic Telecommunication
Organization SA--Rights* ........ 17,000 0
Koninklijke Nedlloyd Groep N.V.+ 10,000 417,232
Portugal Telecom SA .............. 5,670 263,090
Pt Indosat (ADR) ................. 9,100 175,744
Singapore Telecommunications Ltd. 66,000 123,247
Telecom Italia Spa ............... 54,165 345,994
Telefonica de Espana ............. 32,829 937,356
Telefonica del Peru S.A. (ADR) .. 32,000 746,000
Telekom Malaysia BHD ............. 67,500 199,576
Telephone & Data Systems, Inc. .. 62,100 2,891,531
Teleport Communications Group,
Inc. (Class A)* ................. 202,400 11,106,700
68
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Videsh Sanchar Nigam Ltd. (GDR)* 50,000 $ 646,250
------------
20,187,220
------------
TOTAL CREDIT SENSITIVE (15.5%) .. 257,704,062
------------
ENERGY
COAL & GAS PIPELINES (0.1%)
BG PLC ........................... 125,808 566,471
BG PLC 'B'* ...................... 142,583 67,949
OMV AG ........................... 6,000 831,255
------------
1,465,675
------------
OIL--DOMESTIC (2.3%)
Apache Corp. ..................... 199,100 6,980,944
Louis Dreyfus Natural Gas Corp.* 164,700 3,077,831
Murphy Oil Corp. ................. 90,000 4,876,875
Tom Brown, Inc.* ................. 50,000 962,500
Union Pacific Resources Group,
Inc. ............................ 346,700 8,407,475
USX-Marathon Group ............... 391,200 13,203,000
------------
37,508,625
------------
OIL--INTERNATIONAL (1.5%)
AO Tatneft (ADR) ................. 37,000 5,272,500
British Petroleum Co. PLC ........ 149,481 1,965,142
Cosmo Oil Co. Ltd. ............... 11,000 16,693
Elf Aquitaine .................... 15,200 1,767,882
Gulf Canada Resources Ltd.* ..... 1,352,400 9,466,800
Gulf Indonesia Resources Ltd.* .. 52,500 1,155,000
Mitsubishi Oil Co. ............... 8,000 11,834
Nippon Oil Co. Ltd. .............. 22,000 56,823
Norsk Hydro ASA .................. 2,100 102,216
Oil Search Ltd. .................. 300,000 542,136
Petrofina SA ..................... 290 107,035
Petroleo Brasileiro S.A. (ADR) .. 45,000 1,052,397
Repsol SA ........................ 12,748 543,892
Royal Dutch Petroleum Co. ........ 50,788 2,787,811
Total SA-B ....................... 900 97,948
------------
24,946,109
------------
OIL--SUPPLIES & CONSTRUCTION (4.8%)
Baker Hughes, Inc. ............... 204,250 8,910,406
BJ Services Co.* ................. 59,000 4,244,312
Bouygues Offshore SA (ADR) ...... 45,900 998,325
Canadian Fracmaster Ltd. ......... 117,800 1,730,596
Canadian Fracmaster Ltd.
Installment Receipts*+ .......... 347,500 2,917,206
Coflexip (ADR) ................... 11,000 610,500
Diamond Offshore Drilling, Inc. . 60,000 2,887,500
Dresser Industries, Inc. ......... 294,000 12,329,625
Halliburton Co. .................. 250,800 13,025,925
Nabors Industries, Inc.* ......... 475,000 14,932,813
Noble Drilling Corp.* ............ 499,200 15,288,000
Parker Drilling Corp.* ........... 185,500 2,260,781
------------
80,135,989
------------
RAILROADS (0.0%)
East Japan Railway Co. ........... 55 248,285
Odakyu Electric Railway Co. ..... 4,000 17,291
Tobu Railway Co. Ltd. ............ 14,000 $ 43,778
Tokyu Corp. ...................... 17,000 65,668
------------
375,022
------------
TOTAL ENERGY (8.7%) ............. 144,431,420
------------
TECHNOLOGY
ELECTRONICS (2.7%)
Altera Corp.* .................... 108,100 3,580,812
Applied Materials, Inc.*+ ........ 164,800 4,964,600
Austria Mikro Systeme
International+ .................. 1,430 72,454
Cisco Systems, Inc.* ............. 362,550 20,212,163
Electrocomponents PLC ............ 8,375 62,345
Enplas Corp. ..................... 21,000 283,273
Fujimi, Inc. ..................... 10,200 433,876
Hitachi Ltd. ..................... 94,000 670,013
Hoya Corp. ....................... 30,000 942,709
Kyocera Corp. .................... 1,000 45,373
Micronics Japan Co. Ltd. ......... 10,000 172,447
National Semiconductor Corp.* ... 195,300 5,065,594
Nikon Corp. ...................... 52,000 514,121
Rohm Co. Ltd. .................... 10,000 1,019,352
Sankyo Engineering Co. ........... 4,000 12,263
Sterling Commerce, Inc.* ......... 75,000 2,882,812
TDK Corp. ........................ 22,000 1,659,168
Teradyne, Inc.* .................. 55,000 1,760,000
Tokyo Electron ................... 2,300 73,685
TOWA Corp. ....................... 5,700 118,391
Yokogawa Electric Corp. .......... 121,000 747,469
------------
45,292,920
------------
OFFICE EQUIPMENT (2.3%)
Canon, Inc. ...................... 16,000 372,792
Ceridian Corp.* .................. 250,400 11,471,450
Compaq Computer Corp. ............ 189,475 10,693,495
Dell Computer Corp.* ............. 116,000 9,744,000
Fujitsu General Co. .............. 28,000 300,440
Oce-Van De Grinten N.V. .......... 460 50,137
Policy Management Systems Corp.* 86,300 6,003,244
Ricoh Elemex Corp. ............... 11,000 80,092
------------
38,715,650
------------
OFFICE EQUIPMENT SERVICES (0.6%)
Accugraph Corp. (Class A)* ...... 15,000 8,920
Data Communication System Co. .... 25,000 329,565
First Data Corp. ................. 136,030 3,978,877
Fuji Soft ABC, Inc. .............. 21,400 733,152
INES Corp. ....................... 22,000 170,301
Misys (Jersey) Ltd.*.............. 7,142 215,951
Misys PLC ........................ 25,000 755,920
Nippon System Development ........ 14,000 287,565
Oracle Corp.* .................... 113,562 2,533,863
SAP AG ........................... 2,000 606,465
------------
9,620,579
------------
TELECOMMUNICATIONS (4.3%)
ADC Telecommunications, Inc.* .... 210,200 8,775,850
Corecomm, Inc.* .................. 3,600 36,450
DDI Corp. ........................ 145 383,407
DSC Communications Corp.* ........ 127,500 3,060,000
E.R.G. Limited ................... 792,578 666,058
69
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Ericsson LM (B Shares) ........... 24,700 $ 928,595
Filtronic Comtek PLC ............. 300,000 2,181,487
Hong Kong Telecommunications ..... 88,800 182,780
ICG Communications, Inc.* ........ 1,691 46,080
Intermedia Communications, Inc.* 289 17,587
Lucent Technologies, Inc. ........ 116,000 9,265,500
Mannesmann AG .................... 350 175,686
MCI Communications Corp. ......... 182,500 7,813,281
NetCom Systems AB (B Shares)*+ .. 31,650 679,646
Nextel Communications, Inc.
(Class A)* ...................... 148,600 3,863,600
SK Telecom Co. Ltd. (ADR)* ...... 131,552 855,085
Spectrum Network Systems Ltd.*+ . 440,000 94,590
Tadiran Telecommunications Ltd. .. 30,000 416,250
Tellabs, Inc.* ................... 127,000 6,715,125
Tele-Communications TCI Ventures
Group (Class A)*................. 210,000 5,945,625
Videsh Sanchar Nigam Ltd. (GDR)*+ 1,000 13,930
Vodafone Group PLC ............... 200,000 1,442,821
WorldCom, Inc.* .................. 564,430 17,074,008
---------------
70,633,441
---------------
TOTAL TECHNOLOGY (9.9%) ......... 164,262,590
---------------
DIVERSIFIED
MISCELLANEOUS (1.5%)
BTR PLC .......................... 90,000 272,131
Cie Generale de Eaux ............. 10,850 1,514,331
Crean (James) PLC--Units ......... 40,000 81,384
Damskibs AS (Class B) ............ 5 230,593
GKN PLC .......................... 5,325 109,120
Hanson PLC ....................... 16,666 74,391
Hutchison Whampoa ................ 123,000 771,428
Indonesia Fund, Inc.* ............ 2,200 10,175
Industrias CH S.A.
(B Shares)* ..................... 80,000 476,427
International UNP Holdings* ..... 143,000 12,005
International UNP
Holdings--Warrants* ............. 125,000 0
Lagardere S.C.A. ................. 2,100 69,436
Mitsubishi Corp. ................. 16,000 126,308
Mitsui & Co. ..................... 39,000 230,757
Montedison Spa ................... 74,000 66,470
Pilkington PLC ................... 17,397 36,450
Sime Darby BHD ................... 180,000 173,081
Smiths Industries ................ 5,559 77,466
Sophus Berendsen A/S 'B' ......... 385 63,493
Suez Lyonnaise des Eaux .......... 1,000 110,659
Sumitomo Corp. ................... 22,000 123,089
Swire Pacific Ltd. (Class A) .... 50,000 274,229
Tomkins PLC ...................... 70,000 334,741
Tyco International Ltd. .......... 337,962 15,229,413
Williams Holdings PLC ............ 10,569 58,705
U.S. Industries, Inc. ............ 134,550 $ 4,053,319
---------------
TOTAL DIVERSIFIED (1.5%) ........ 24,579,601
---------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (66.5%)
(Cost $947,340,600) ............. 1,107,614,035
---------------
PREFERRED STOCKS:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
Republic Industries, Inc.
6.5% Exch. Conv.................. 36,700 862,450
---------------
PRINTING, PUBLISHING &
BROADCASTING (0.0%)
ProSieben Media AG* .............. 9,000 412,741
---------------
TRUCKING, SHIPPING (0.0%)
CNF Trust I
5.0% Conv. Series A ............. 15,000 855,000
---------------
TOTAL BUSINESS SERVICES (0.1%) .. 2,130,191
---------------
CAPITAL GOODS (0.1%)
AEROSPACE
Loral Space & Communications:
6.0% Conv. ...................... 15,700 959,663
6.0% Conv. ...................... 12,600 774,900
---------------
1,734,563
---------------
<PAGE>
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Finance
Trust 8.5% Conv. ................ 14,300 1,471,112
---------------
LEISURE RELATED (0.0%)
Village Roadshow Ltd. ............ 10,000 20,560
---------------
RETAIL--GENERAL (0.0%)
Fielmann AG ...................... 3,000 65,038
---------------
TOTAL CONSUMER CYCLICALS (0.1%) 1,556,710
---------------
CREDIT SENSITIVE (0.1%)
UTILITY--ELECTRIC
AES Trust I
5.375% Conv. Series A ........... 18,100 1,298,675
---------------
ENERGY (0.1%)
OIL--DOMESTIC
Devon Financing Trust
$3.25 Conv. ..................... 9,200 673,900
---------------
TECHNOLOGY
TELECOMMUNICATIONS (0.5%)
Intermedia Communications, Inc.:
7.0% Conv. Series D ............. 17,700 725,700
7.0% Conv.+ ..................... 23,000 943,000
Mobile Telecommunications
$2.25 Conv. ..................... 22,100 740,350
Nextel Strypes Trust
7.25% Conv. ..................... 40,700 966,625
Nokia Oyj (A Shares) ............. 19,092 1,355,471
QualComm Financial Trust:
5.75% Conv.+ .................... 29,400 1,376,288
5.75% Conv. ..................... 4,900 229,381
70
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1997
==============================================================
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
WorldCom, Inc.
8.0% Conv. ...................... 23,000 $ 2,415,000
-----------
TOTAL TECHNOLOGY (0.5%) ......... 8,751,815
-----------
TOTAL PREFERRED STOCKS (1.0%)
(Cost $13,527,581) .............. 16,145,854
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
PROFESSIONAL SERVICES (0.1%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ............ $ 605,000 1,258,400
Personnel Group of America:
5.75% Conv., 07/01/04 ........... 65,000 73,775
5.75% Conv., 07/01/04+ .......... 295,000 334,825
-----------
TOTAL BUSINESS SERVICES (0.1%) .. 1,667,000
-----------
CAPITAL GOODS
AEROSPACE (0.0%)
Orbital Sciences Corp.
5.0% Conv., 10/01/02+ ........... 470,000 600,425
-----------
BUILDING & CONSTRUCTION (0.0%)
Halter Marine Group, Inc.
4.5% Conv., 09/15/04+ ........... 540,000 606,825
-----------
MACHINERY (0.1%)
DII Group, Inc.
6.0% Conv., 10/15/02+ ........... 800,000 1,223,000
-----------
TOTAL CAPITAL GOODS (0.1%) ..... 2,430,250
-----------
CONSUMER CYCLICALS
FOOD SERVICES, LODGING (0.1%)
Cendant Corp.
4.75% Conv., 03/01/03 ........... 1,620,000 2,178,900
-----------
RETAIL--GENERAL (0.1%)
U.S. Office Products Co.
5.5% Conv., 02/01/01 ............ 1,160,000 1,378,950
-----------
TOTAL CONSUMER CYCLICALS (0.2%) 3,557,850
-----------
CONSUMER NONCYCLICALS
DRUGS (0.2%)
MedImmune, Inc.:
7.0% Conv. Sub., 07/01/03+ ..... 400,000 909,500
7.0% Conv., 07/01/03 ............ 535,000 1,216,456
Quintiles Transnational Corp.:
4.25% Conv., 05/31/00+ .......... 460,000 516,925
4.25% Conv., 05/31/00 ........... 300,000 337,125
-----------
2,980,006
-----------
HOSPITAL SUPPLIES & SERVICES (0.1%)
FPA Medical Management, Inc.:
6.5% Conv., 12/15/01+............ 630,000 642,600
6.5% Conv., 12/15/01 ............ 435,000 443,700
RES-Care, Inc.
6.0% Conv., 12/01/04 ............ 820,000 934,800
-----------
2,021,100
-----------
MEDIA & CABLE (0.6%)
Time Warner, Inc.
9.125%, 01/15/13 ................ 9,100,000 10,836,007
-----------
TOTAL CONSUMER NONCYCLICALS (0.9%) 15,837,113
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
=============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
CREDIT SENSITIVE
BANKS (1.6%)
Deutsche Bank
6.7%, 12/13/06 ................ $ 8,000,000 $ 8,110,160
Dime Capital Trust I
9.33%, 05/06/27 ............... 7,600,000 8,596,816
Grupo Financiero Banorte
Zero Coupon, 12/05/02.......... 208 2,581
St. George Bank Ltd.
7.15%, 10/15/05+ .............. 9,525,000 9,812,845
-----------
26,522,402
-----------
FINANCIAL SERVICES (1.1%)
Corp Andina de Fomento
7.25%, 03/01/07 ............... 10,700,000 10,845,734
RAC Financial Group, Inc.:
7.25% Conv. Sub., 08/15/03+ .. 505,000 1,217,050
7.25% Conv., 08/15/03 ......... 110,000 265,100
World Financial Property
6.95%, 09/01/13+ .............. 5,250,000 5,386,028
-----------
17,713,912
-----------
INSURANCE (0.1%)
Penn Treaty American Corp.:
6.25% Conv., 12/01/03+ ........ 735,000 947,231
6.25% Conv., 12/01/03 ......... 170,000 219,088
-----------
1,166,319
-----------
MORTGAGE RELATED (2.9%)
Federal Home Loan Mortgage
Corp.:
7.0%, 09/01/11 ................ 9,079,051 9,218,079
7.0%, 01/01/12 ................ 4,375,706 4,442,711
Federal National Mortgage
Association:
6.5%, 01/01/11 ................ 833,640 834,161
6.0%, 04/01/11 ................ 11,048,388 10,868,852
6.5%, 08/01/11 ................ 8,045,115 8,050,143
7.0%, 05/01/26 ................ 9,539,154 9,604,736
7.0%, 09/01/27 ................ 3,498,078 3,522,127
7.0%, 08/01/26 ................ 2,369,822 2,386,114
-----------
48,926,923
-----------
U.S. GOVERNMENT (12.9%)
U.S. Treasury:
6.125% Note, 08/31/98 ......... 4,375,000 4,390,041
6.375% Note, 05/15/99 ......... 25,925,000 26,159,958
6.0% Note, 08/15/00 ........... 31,150,000 31,373,906
6.25% Note, 04/30/01 .......... 26,500,000 26,914,063
6.5% Note, 08/31/01 ........... 37,400,000 38,323,331
6.5% Note, 05/31/02 ........... 37,600,000 38,704,500
6.875% Note, 05/15/06 ......... 13,605,000 14,561,608
6.125% Bond, 11/15/27 ......... 33,855,000 34,786,013
-----------
215,213,420
-----------
TOTAL CREDIT SENSITIVE (18.6%) 309,542,976
-----------
ENERGY
COAL & GAS PIPELINES (0.1%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 .......... 845,000 1,529,450
-----------
GAS (0.2%)
Ras Laffan Liquid Natural Gas
8.294%, 03/15/14+ ............. 3,500,000 3,293,521
-----------
71
<PAGE>
THE HUDSON RIVER TRUST
ALLIANCE GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1997
==============================================================
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- --------------------------------------------------------------
OIL--SUPPLIES & CONSTRUCTION (0.2%)
Diamond Offshore Drilling, Inc.
3.75% Conv. Sub. Note,
02/15/07 ...................... $ 860,000 $ 1,138,425
Parker Drilling Corp.
5.5% Conv. Sub. Note,
08/01/04....................... 760,000 814,625
Seacor Holdings, Inc.:
5.375% Conv., 11/15/06 ........ 605,000 685,162
5.375% Conv., 11/15/06+ ...... 70,000 79,275
--------------
2,717,487
--------------
TOTAL ENERGY (0.5%) ........... 7,540,458
--------------
TECHNOLOGY
ELECTRONICS (1.0%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ..................... 1,165,000 1,598,962
Baan Co.:
4.5% Conv. Sub. Note,
12/15/01+ ..................... 645,000 988,463
4.5% Conv. Sub. Note,
12/15/01...................... 180,000 275,850
Cymer, Inc.
3.5%, 08/06/04+ (a) ........... 1,065,000 805,406
Integrated Process Equipment
6.25% Conv., 09/15/04+ ........ 1,585,000 1,313,569
Level One Communications:
4.0% Conv., 09/01/04+ ......... 910,000 855,400
4.0% Conv., 09/01/04 .......... 280,000 263,200
Photronics, Inc.
6.0% Conv., 06/01/04 .......... 1,485,000 1,702,181
Quantum Corp.
5.0% Conv., 03/01/03+ ......... 280,000 508,200
Sanmina Corp.
5.5% Conv., 08/15/02+ ......... 1,010,000 2,447,988
SCI Systems, Inc.
5.0% Conv., 05/01/06+.......... 1,310,000 2,439,875
Solectron Corp.
6.0% Conv., 03/01/06+ ......... 855,000 1,172,419
Wind River Systems, Inc.
5.0% Conv., 08/01/02+ ......... 1,000,000 1,070,000
Xilinx, Inc.
5.25% Conv., 11/01/02+ ........ 1,400,000 1,354,500
--------------
16,796,013
--------------
TELECOMMUNICATIONS (0.1%)
Comverse Technology, Inc.:
5.75% Conv. Sub., 10/01/06+ .. 1,295,000 1,395,362
5.75% Conv., 10/01/06 ......... 45,000 48,488
--------------
1,443,850
--------------
TOTAL TECHNOLOGY (1.1%) ...... 18,239,863
--------------
DIVERSIFIED (0.0%)
MISCELLANEOUS
Brierley Investment Ltd.
9.0% Conv. Sub. Note,
06/30/98 ...................... $ 14,000 $ 9,105
--------------
TOTAL LONG-TERM DEBT SECURITIES (21.5%)
(Amortized Cost $347,094,868) . 358,824,615
--------------
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCE (1.2%)
Suntrust Bank
5.73%, due 01/26/98 ........... 20,000,000 19,920,416
--------------
CERTIFICATES OF DEPOSIT (1.5%)
Deutsche Bank
5.75%, due 01/20/98 ........... 25,000,000 24,997,471
--------------
COMMERCIAL PAPER (0.9%)
Province of Quebec
5.68%, due 01/12/98 ........... 15,000,000 14,973,967
--------------
U.S. GOVERNMENT AGENCIES (6.9%)
Federal Home Loan Mortgage
Corp.
6.0%, due 01/02/98 ............ 114,900,000 114,880,850
--------------
TOTAL SHORT-TERM DEBT SECURITIES (10.5%)
(Amortized Cost $174,772,704) 174,772,704
--------------
<PAGE>
TOTAL INVESTMENTS (99.5%)
(Cost/Amortized Cost $1,482,735,753) 1,657,357,208
OTHER ASSETS
LESS LIABILITIES (0.5%) ...... 8,761,507
--------------
NET ASSETS (100.0%) ............ $1,666,118,715
==============
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DISTRIBUTION OF INVESTMENTS BY
GLOBAL REGION
As a Percentage of Total
Investments
Canada ................... 0.3%
France ................... 0.8
Germany .................. 0.9
Japan .................... 3.5
Netherlands .............. 0.9
New Zealand & Australia . 0.5
Scandinavia .............. 1.0
Southeast Asia............ 0.4
Spain .................... 0.5
Switzerland .............. 0.6
United Kingdom............ 3.1
United States ** ......... 86.8
Other European Countries 0.7
-----
100.0%
=====
</TABLE>
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 10.5%.
+ Security exempt from registration under 144A of the securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1997, these securities amounted to $61,346,584
or 3.7% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1997.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
72
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
1. Organization and Significant Accounting Policies
The Hudson River Trust (the "Trust") (successor to The Hudson River Fund,
Inc., a Maryland corporation organized in 1984) was formed as a Massachusetts
business trust on July 10, 1987 and is registered under the Investment
Company Act of 1940 (the "1940 Act"), as amended, as an open-end management
investment company. The Trust issues shares of beneficial interest currently
divided among fourteen Portfolios (the "Portfolios"): Alliance Money Market,
Alliance Intermediate Government Securities, Alliance Quality Bond, Alliance
High Yield, Alliance Growth and Income, Alliance Equity Index, Alliance
Common Stock, Alliance Global, Alliance International, Alliance Aggressive
Stock, Alliance Small Cap Growth, Alliance Conservative Investors, Alliance
Balanced and Alliance Growth Investors. Effective October 2, 1996, the Trust
made available a second class of shares, Class IB, for each of the Trust's
Portfolios. In connection with the Class IB shares offering, the existing
class of shares was redesignated Class IA. The Class IB shares are subject to
distribution fees imposed under a distribution plan (the "Distribution Plan")
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Trust's multiple
class distribution system, both classes of shares have identical voting,
dividend, liquidation, and other rights, other than the payment of
distribution fees under the Distribution Plan.
Class IA shares are offered to separate accounts of The Equitable Life
Assurance Society of the United States ("Equitable"), a wholly-owned
subsidiary of The Equitable Companies Incorporated, Equitable Variable Life
Insurance Company ("Equitable Variable"), a wholly-owned subsidiary of the
Equitable, and to separate accounts of other insurance companies unaffiliated
with Equitable and Equitable Variable. Effective January 1, 1997, Equitable
Variable was merged into Equitable. Class IB shares are offered to an
insurance company separate account of Equitable. Effective March 12, 1997,
the Trust's Board of Trustees approved the establishment of the Alliance
Small Cap Growth Portfolio at an initial share value of $10. The Portfolio
commenced operations on May 1, 1997.
The investment objectives of each Portfolio are as follows:
Alliance Money Market Portfolio -- High level of current income, preserve
its assets and maintain liquidity. The Portfolio pursues this objective by
investing in primarily high quality U.S. dollar denominated money market
instruments.
Alliance Intermediate Government Securities Portfolio -- High current
income consistent with relative stability of principal through investment
primarily in debt securities issued or guaranteed as to principal and
interest by the U.S. Government or any of its agencies or instrumentalities.
Alliance Quality Bond Portfolio -- High current income consistent with
preservation of capital by investing primarily in investment grade fixed
income securities. The Portfolio reserves the right to invest in convertible
debt securities, preferred stocks and dividend-paying common stocks.
Alliance High Yield Portfolio -- High return by maximizing current income
and, to the extent consistent with that objective, capital appreciation. The
Portfolio pursues this objective by investing primarily in a diversified mix
of high yield, fixed income securities involving greater volatility of price
and risk of principal and income than high quality fixed income securities.
The medium and lower quality debt securities in which the Portfolio may
invest are known as "junk bonds."
Alliance Growth and Income Portfolio -- High total return through a
combination of current income and capital appreciation by investing primarily
in income-producing common stocks and securities convertible into common
stocks.
Alliance Equity Index Portfolio -- Total return before expenses that
approximates the total return performance of the Standard & Poor's
Corporation 500 Index, including reinvestment of dividends, at a risk level
consistent with that of the Index.
Alliance Common Stock Portfolio -- Long-term growth of its capital and
increase income. The Portfolio pursues this objective by investing primarily
in common stock and other equity-type instruments.
73
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Alliance Global Portfolio -- Long-term growth of capital. The Portfolio
pursues this objective by investing primarily in equity securities of
non-United States companies as well as United States issuers.
Alliance International Portfolio -- Long-term growth of capital by
investing primarily in a diversified portfolio of equity securities selected
principally to permit participation in non-United States companies with
prospects for growth.
Alliance Aggressive Stock Portfolio -- Long-term growth of capital. The
Portfolio pursues this objective by investing primarily in common stocks and
other equity-type securities issued by quality small and intermediate sized
companies with strong growth prospects.
Alliance Small Cap Growth Portfolio -- Long-term growth of capital. The
Portfolio pursues this objective by investing primarily in common stocks and
other equity-type securities issued by smaller-sized companies with strong
growth potential.
Alliance Conservative Investors Portfolio -- High total return without, in
the investment adviser's opinion, undue risk to principal. The Portfolio
pursues this objective by investing in a diversified mix of publicly traded
equity and debt securities.
Alliance Balanced Portfolio -- High return through both appreciation of
capital and current income. The Portfolio pursues this objective by investing
in a diversified portfolio of publicly traded equity and debt securities and
short-term money market instruments.
Alliance Growth Investors Portfolio -- Highest total return consistent
with the investment adviser's determination of reasonable risk. The Portfolio
pursues this objective by investing in a diversified mix of publicly traded
equity and fixed income securities, including at times common stocks issued
by intermediate and small-sized companies and at times fixed income
securities that are medium and lower quality debt securities known as "junk
bonds."
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
The following is a summary of the significant accounting policies of the
Trust:
Stocks listed on national securities exchanges and certain
over-the-counter issues traded on the NASDAQ national market system are
valued at the last sale price or, if there is no sale, at the latest
available bid price. Other unlisted stocks are valued at their last sale
price or, if no reported sale during the day, at a bid price estimated by a
broker.
Convertible preferred stocks listed on national securities exchanges are
valued as of their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more of the major dealers in such securities.
Where there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stocks.
Mortgage backed and asset backed securities are valued at prices obtained
from a bond pricing service where available, or at a bid price obtained from
one or more of the major dealers in such securities. If a quoted price is
unavailable, an equivalent yield or yield spread quotes will be obtained from
a broker and converted to a price.
Purchased options, including options on futures, are valued at their last
bid price. Written options are valued at their last asked price.
Long-term corporate bonds are valued at prices obtained from a bond
pricing service of a major dealer in bonds when such prices are available;
however, when such prices are not available, such bonds are valued at a bid
price estimated by a broker.
74
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
U.S. Treasury securities and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities are valued at
representative quoted prices.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) or similar form in the United States, are valued at representative
quoted prices in the currency of the country of origin.
Except for the Alliance Money Market Portfolio, short-term debt securities
which mature in 60 days or less are valued at amortized cost, which
approximates market value. Short-term debt securities which mature in more
than 60 days are valued at representative quoted prices. Short-term debt
securities held in the Alliance Money Market Portfolio are valued at
representative quoted prices regardless of the length of maturity.
Futures and forward contracts are valued at their last sale price or, if
there is no sale, at the latest available bid price.
Other securities, including restricted securities, and assets for which
market quotations are not readily available or for which valuation cannot be
provided, are valued at "fair value" as determined in good faith by the
Valuation Committee of the Board of Trustees.
Securities transactions are recorded on the trade date net of brokerage
fees, commissions, and transfer fees.
Interest income (including amortization of premium and discount on
securities using the effective yield method) is accrued daily. Dividend
income is recorded on the ex-dividend date.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Expenses attributable to a single Portfolio are charged to that Portfolio.
Expenses of the Trust are charged to each Portfolio in proportion to net
assets.
The Board of Trustees has approved the lending of portfolio securities,
through its custodian bank, Chase Manhattan Bank, N.A. ("Chase"), acting as
lending agent, to certain broker-dealers in exchange for negotiated lenders'
fees. Any such loan of portfolio securities will be continuously secured by
collateral at least equal to the value of the securities loaned. All loans
will be collateralized in the form of cash or U.S. Government securities.
Chase invests the cash collateral in short-term investments and retains a
portion of the interest earned. Chase will indemnify the Portfolios for any
loss resulting from a borrower's failure to return a loaned security when
due. The following table shows the value of securities loaned and collateral
received at December 31, 1997, and the security loan fees received, net of
rebates paid, for the year ended December 31, 1997. Such net fees are
included in interest income in the accompanying Statements of Operations.
<TABLE>
<CAPTION>
VALUE OF VALUE OF SECURITY LOAN
PORTFOLIO SECURITIES LOANED COLLATERAL RECEIVED* FEES RECEIVED
- --------- ----------------- -------------------- -------------
<S> <C> <C> <C>
Alliance Intermediate Government Securities $ 32,201,367 $ 33,220,564 $ 39,876
Alliance Quality Bond ....................... 50,573,670 51,975,110 48,428
Alliance Growth and Income .................. 82,082,344 83,758,200 44,878
Alliance Equity Index ....................... 111,251,919 113,256,053 53,477
Alliance Common Stock ....................... 662,769,145 672,888,280 585,669
Alliance Global ............................. 112,593,733 116,411,892 396,835
Alliance International ...................... 14,904,809 15,770,821 90,583
Alliance Aggressive Stock ................... 630,594,623 636,513,616 1,807,252
Alliance Conservative Investors ............. 65,514,619 67,529,380 68,901
Alliance Balanced ........................... 292,916,191 301,012,558 437,345
Alliance Growth Investors ................... 185,900,995 191,232,973 398,085
</TABLE>
- ------------
* Including U.S. Government securities valued at $18,342,994, $31,657,214,
$60,800, $3,719,500, $10,050,000, $2,564,100, $718,240, $23,874,600,
$37,866,285, $61,873,419 and $31,723,786 for the Alliance Intermediate
Government Securities, Alliance Quality Bond, Alliance Growth and Income,
Alliance Equity Index, Alliance Common Stock, Alliance Global, Alliance
International, Alliance Aggressive Stock, Alliance Conservative Investors,
Alliance Balanced and Alliance Growth Investors Portfolios, respectively.
75
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
The books and records of the Trust are kept in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the bid price last
quoted by a composite list of major U.S. banks at the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date.
(ii) purchase and sales of investment securities, income and expenses--at
the date of such transactions.
The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Net currency gains or losses realized and unrealized as a result of
differences between interest or dividends and withholding taxes recorded on
the Portfolio's books and the U.S. dollar equivalent amount actually received
or paid are presented under foreign currency transactions in the realized and
unrealized gains and losses section of the Statements of Operations.
The Trust intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its net investment income and net realized capital gains
to shareholders of each Portfolio. Therefore, no federal income tax provision
is required. Dividends from net investment income are declared and
distributed quarterly; dividends from net realized short-term and long-term
capital gains are declared and distributed at least annually to the
shareholders of the Portfolios to which such gains are attributable. All
dividends are reinvested in additional full and fractional shares of the
related Portfolios. All dividends are distributed on a tax basis and as such,
the amounts may differ from financial statement investment income and
realized capital gains.
Options Written:
All Portfolios (except for the Alliance Money Market and Alliance Equity
Index Portfolios) may write (sell) covered options as a hedge to provide
protection against adverse movements in the price of securities in the
portfolio or to enhance investment performance. When a Portfolio writes an
option, an amount equal to the premium received by the Portfolio is recorded
as a liability and is subsequently adjusted on a daily basis to the current
market price of the option written. Premiums received from writing options
which expire unexercised are realized as gains on the expiration date. In
writing options, a Portfolio must assume that the option may be exercised at
any time prior to the expiration of its obligation as a writer, and that in
such circumstances the net proceeds of the sale or cost of purchase of the
underlying securities pursuant to the call or put option may be substantially
below or above the prevailing market price. A Portfolio also has the
additional risk of not being able to enter into a closing purchase
transaction if a liquid secondary market does not exist and bears the risk of
unfavorable changes in the price of the financial instruments underlying the
options.
Futures and Forward Contracts:
Futures and forward contracts are agreements to buy or sell a security for
a set price in the future. A Portfolio may buy or sell futures and forward
contracts for the purpose of protecting its portfolio securities against
future changes in interest rates which might adversely affect the value of
the Portfolio's securities or the price of securities that it intends to
purchase at a later date. Initial margin deposits are made upon entering into
futures contracts and can be either in cash or U.S. Treasury securities.
During the period the futures and forward contracts are open, changes in the
market price of the contract are recognized as unrealized gains or losses by
"marking-to-market" at the end of each trading day. Variation margin payments
on futures contracts are received or made, depending upon whether unrealized
gains or losses are incurred. When the contract is closed, the Portfolio
records a realized gain or loss equal to the difference between the proceeds
from (or cost of) the closing transactions and the Portfolio's basis in the
contract. Should interest rates move unexpectedly, the Portfolio may not
achieve the anticipated benefits of the futures and forward contracts and may
incur a loss. The use of futures and forward contracts transactions involves
the risk of imperfect correlation in movements in the price of futures and
forward contracts, interest rates and the underlying hedged assets.
76
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Limitations on Market and Credit Risk:
Written options, futures and forward contracts involve elements of both
market and credit risk in excess of the amounts reflected in the Statements
of Assets and Liabilities. The risk involved in writing an option on a
security is that, if the option is exercised, the underlying security is then
purchased or sold by the Portfolio at the contract price, which could be
disadvantageous related to the market price. The contract amounts of these
futures and forward contracts reflect the extent of the Portfolio's exposure
to off-balance sheet risk. The Portfolio bears the market risk which arises
from any changes in security values. The credit risk for futures contracts is
limited to failure of the exchange or board of trade which acts as the
counterparty to the Portfolio's futures transactions. Forward contracts are
done directly with the counterparty and not through an exchange and can be
terminated only by agreement of both parties to the contract. There is no
daily margin settlement and the Portfolio is exposed to the risk of default
by the counterparty.
Statement of Position 93-2:
For the year ended December 31, 1997, in conformity with Statement of
Position 93-2 Determination, Disclosure and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies, the reclassification arising from current book/tax differences
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
INTERMEDIATE ALLIANCE GROWTH ALLIANCE
GOVERNMENT QUALITY ALLIANCE AND EQUITY ALLIANCE ALLIANCE
SECURITIES BOND HIGH YIELD INCOME INDEX COMMON STOCK GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Undistributed (overdistributed) net
investment income ................... $(4,160) $ 664,479 $ 28,777 $ 48,024 $ 260,751 $(2,631,075) $ 15,935,865
Accumulated net realized gain (loss) 4,160 (664,479) (28,777) (48,024) (260,751) 2,631,075 (15,935,865)
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
ALLIANCE AGGRESSIVE SMALL CAP CONSERVATIVE ALLIANCE GROWTH
INTERNATIONAL STOCK GROWTH INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Paid-in capital ...................... $ -- $ -- $(7,066) $ -- $ -- $ --
Undistributed (overdistributed) net
investment income ................... 3,322,727 1,777,082 410 (146,376) 58,776 4,831,809
Accumulated net realized gain (loss) (3,322,727) (1,777,082) 6,656 146,376 (58,776) (4,831,809)
</TABLE>
Net capital and net currency losses incurred after October 31 and within
the taxable year are deemed to arise on the first day of the Portfolio's next
taxable year. For the period from November 1, 1997 to December 31, 1997
certain Portfolios incurred and elected to defer until January 1, 1998 for
U.S. Federal income tax purposes net capital and net currency losses of
approximately:
<TABLE>
<CAPTION>
CAPITAL CURRENCY
PORTFOLIO LOSSES LOSSES
- --------- ------ ------
<S> <C> <C>
Alliance Equity Index........... $ -- $ 3,600
Alliance Common Stock........... -- 33,030
Alliance Global................. -- 433,526
Alliance International.......... 4,160,819 670,264
Alliance Small Cap Growth ...... 1,448,447 --
Alliance Conservative
Investors...................... -- 37,085
Alliance Balanced............... -- 61,818
Alliance Growth Investors ...... -- 81,786
</TABLE>
77
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
2. Management of the Trust
Alliance Capital Management L.P. (Alliance), a publicly traded limited
partnership, indirectly majority-owned by Equitable, is the investment
adviser. Prior to May 1, 1997, the investment advisory fees were as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
----------------------------------------------
FIRST NEXT OVER
$350 MILLION $400 MILLION $750 MILLION
------------ ------------ ------------
<S> <C> <C> <C>
Alliance Common Stock, Alliance Money Market and Alliance Balanced
Portfolios ............................................................. .40% .375% .35%
Alliance Aggressive Stock and Alliance Intermediate Government
Securities Portfolios .................................................. .50% .475% .45%
Alliance High Yield, Alliance Global, Alliance Conservative Investors
and Alliance Growth Investors Portfolios ............................... .55% .525% .50%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
------------ ------------ ----------
<S> <C> <C> <C>
Alliance Quality Bond and Alliance Growth and Income Portfolios .55% .525% .50%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$750 MILLION $750 MILLION $1.5 BILLION
------------ ------------ ------------
<S> <C> <C> <C>
Alliance Equity Index Portfolio .35% .30% .25%
</TABLE>
<TABLE>
<CAPTION>
FIRST NEXT OVER
$500 MILLION $1 BILLION $1.5 BILLION
------------ ---------- ------------
<S> <C> <C> <C>
Alliance International Portfolio .90% .85% .80%
</TABLE>
On December 13, 1996, the Trust's Board of Trustees approved a new
Investment Advisory Agreement with Alliance and subsequently extended the
agreement to the Alliance Small Cap Growth Portfolio on March 12, 1997. On
April 9, 1997, shareholders of each respective Portfolio, except for the
Alliance Small Cap Growth Portfolio which commenced operations on May 1,
1997, approved a new Investment Advisory Agreement. Effective May 1, 1997,
the advisory fees payable under this agreement are as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
----------------------------------------------------------------------
FIRST NEXT NEXT NEXT
PORTFOLIO $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- --------- ------------ ------------ ---------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Alliance Money Market ....................... .350% .325% .300% .280% .270%
Alliance Intermediate Government Securities .500% .475% .450% .430% .420%
Alliance Quality Bond ....................... .525% .500% .475% .455% .445%
Alliance High Yield ......................... .600% .575% .550% .530% .520%
Alliance Growth and Income .................. .550% .525% .500% .480% .470%
Alliance Equity Index ....................... .325% .300% .275% .255% .245%
Alliance Common Stock ....................... .475% .425% .375% .355% .345%*
Alliance Global ............................. .675% .600% .550% .530% .520%
Alliance International ...................... .900% .825% .800% .780% .770%
Alliance Aggressive Stock ................... .625% .575% .525% .500% .475%
Alliance Small Cap Growth ................... .900% .850% .825% .800% .775%
Alliance Conservative Investors ............. .475% .425% .375% .350% .325%
Alliance Balanced ........................... .450% .400% .350% .325% .300%
Alliance Growth Investors ................... .550% .500% .450% .425% .400%
</TABLE>
- ------------
* On assets in excess of $10 billion, the management fee for the Alliance
Common Stock Portfolio is reduced to 0.335% of average daily net assets.
78
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
3. Distribution Plan
Each Portfolio's Distribution Plan permits the Portfolio to pay a
distribution fee of up to 0.50% of the average daily net assets attributable
to its Class IB shares. The Trust, on behalf of each Portfolio, has entered
into a Distribution Agreement (the "Agreements") pursuant to the Distribution
Plans with Equitable Distributors, Inc. ("EDI"), an indirect, wholly-owned
subsidiary of the Equitable, under which EDI receives payments at a rate
equal to 0.25% of the average daily net assets attributable to the Class IB
shares of each Portfolio except the Small Cap Growth Portfolio. The Small Cap
Growth Portfolio Agreement provides that EDI will receive an annual fee not
to exceed the lesser of (a) 0.25% of the average daily net assets of the
Portfolio attributable to Class IB shares and (b) an amount that, when added
to certain other expenses of the Class IB shares, would result in the ratio
of expenses to average daily net assets attributable to Class IB shares
equaling 1.20%.
The Distribution Plans provide that EDI will use the payments received
under the Agreements for services rendered (and expenses borne) in connection
with activities primarily intended to result in the sale of the Trust's Class
IB shares. Since EDI's compensation is not directly tied to its expenses, the
amount of compensation received by it under the Agreements during any year
may be more or less than its actual expenses. For this reason, the
Distribution Plans are characterized by the staff of the Securities and
Exchange Commission as being of the "compensation" variety.
4. Investment Transactions
Investment security transactions, excluding short-term debt securities,
for the year ended December 31, 1997 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-------------------------------- --------------------------------
STOCKS AND U.S. GOVERNMENT STOCKS AND U.S. GOVERNMENT
PORTFOLIO DEBT SECURITIES AND AGENCIES DEBT SECURITIES AND AGENCIES
- --------- --------------- ------------ --------------- ------------
<S> <C> <C> <C> <C>
Alliance Intermediate Government Securities $ -- $ 289,263,347 $ -- $ 268,248,135
Alliance Quality Bond ....................... 163,237,234 495,861,466 171,665,271 442,101,550
Alliance High Yield ......................... 1,235,945,918 -- 1,073,614,879 --
Alliance Growth and Income .................. 568,400,225 -- 306,859,124 --
Alliance Equity Index ....................... 414,309,473 -- 22,554,753 --
Alliance Common Stock ....................... 4,620,850,933 -- 4,082,534,069 --
Alliance Global ............................. 706,451,901 -- 588,394,296 --
Alliance International ...................... 160,707,760 -- 101,610,156 --
Alliance Aggressive Stock ................... 5,505,273,307 -- 5,142,936,366 --
Alliance Small Cap Growth * ................. 192,773,234 -- 57,648,193 --
Alliance Conservative Investors ............. 149,330,575 334,113,271 176,462,757 312,290,578
Alliance Balanced ........................... 1,025,160,528 1,195,953,420 1,208,802,299 1,029,716,011
Alliance Growth Investors ................... 1,135,831,343 607,149,017 1,206,132,190 378,552,050
</TABLE>
- ------------
* For the period from May 1, 1997 (commencement of operations) to
December 31, 1997.
No activity is shown for the Alliance Money Market Portfolio since it
trades exclusively in short-term debt securities.
79
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
Transactions in options written for the year ended December 31, 1997 are
summarized as follows:
<TABLE>
<CAPTION>
ALLIANCE
COMMON STOCK
PORTFOLIO
---------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------- ---------------
<S> <C> <C>
Options outstanding--January 1, 1997 ................ 161,200 $ 68,607,800
Options written ..................................... 1,794,950 623,448,846
Options terminated in closing purchase transactions (910,000) (344,806,113)
Options expired ..................................... (306,750) (103,999,855)
Options exercised ................................... (374,150) (139,689,978)
--------- -------------
Options outstanding--December 31, 1997 .............. 365,250 $ 103,560,700
========= =============
</TABLE>
The Portfolios (except for the Alliance Money Market, Alliance
Intermediate Government Securities and Alliance Equity Index Portfolios) may
enter into forward currency contracts in order to hedge their exposure to
changes in foreign currency exchange rates on their foreign securities
holdings. A forward contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss
arising from the difference between the original contracts and the closing of
such contracts is included in realized gains or losses from foreign currency
transactions. At December 31, 1997, the Alliance Quality Bond, Alliance
Global, Alliance International, Alliance Conservative Investors, Alliance
Balanced and Alliance Growth Investors Portfolios had outstanding forward
currency contracts to buy/sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE QUALITY BOND PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- -------------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Canadian Dollars, settling 02/17/98 . 661 $ 467,219 $ 463,327 $ (3,892)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollar, settling 01/12/98 11,949 8,017,325 7,785,968 231,357
Canadian Dollar, settling 02/17/98 .. 661 466,691 463,326 3,365
--------
$230,830
========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE GLOBAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- -------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, settling 01/23/98 ................ 44,000 $ 25,292,444 $ 24,492,886 $ (799,558)
Irish Punts, settling 01/05/98 ................... 147 210,357 209,151 (1,206)
Japanese Yen, settling 02/27/98-04/14/98 ........ 2,170,000 16,783,366 16,778,541 (4,825)
Netherlands Guilders, settling 01/23/98 ......... 58,900 30,079,412 29,091,879 (987,533)
Swedish Krona, settling 01/02/98 ................. 7,950 1,025,125 1,001,272 (23,853)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/02/98 ................ 700 1,167,348 1,150,313 17,035
Deutsche Marks, settling 01/02/98-01/23/98 ...... 44,160 25,102,287 24,581,827 520,460
Finnish Markka, settling 01/02/98 ................ 2,200 409,112 403,599 5,513
French Franc, settling 01/02/98 .................. 7,000 1,178,928 1,163,081 15,847
Japanese Yen, settling 02/27/98-04/14/98 ........ 13,270,000 109,655,596 103,021,611 6,633,985
Netherlands Guilders, settling 01/02/98-01/23/98 60,300 30,410,102 29,782,333 627,769
Norwegian Krone, settling 01/02/98 ............... 480 65,964 64,990 974
----------
$6,004,608
==========
</TABLE>
80
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE INTERNATIONAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- --------------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, settling 01/02/98-01/23/98 ...... 10,240 $ 5,885,470 $ 5,699,277 $ (186,193)
Japanese Yen, settling 02/27/98-04/14/98 ........ 872,000 6,789,467 6,751,775 (37,692)
Netherlands Guilders, settling 01/23/98 ......... 8,100 4,136,558 4,000,751 (135,807)
FOREIGN CURRENCY SALE CONTRACTS
Belgian Franc, settling 01/02/98 ................. 1,600 43,688 43,184 504
Deutsche Marks, settling 01/02/98-01/23/98 ...... 10,410 5,907,722 5,793,777 113,945
Finnish Markka, settling 01/02/98 ................ 1,300 241,748 238,490 3,258
Japanese Yen, settling 01/05/98-04/14/98 ........ 4,652,000 38,312,357 36,098,497 2,213,860
Netherlands Guilders, settling 01/02/98-01/23/98 8,460 4,265,786 4,178,296 87,490
----------
$2,059,365
==========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------------------------------ ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
French Franc, settling 01/23/98-01/30/98 . 11,106 $1,870,275 $1,847,854 $(22,421)
Deutsche Marks, settling 01/02/98 ........ 1,870 1,073,663 1,039,495 (34,168)
Japanese Yen, settling 02/27/98 ........... 56,000 432,305 432,825 520
Netherlands Guilders, settling 01/02/98 .. 1,940 989,579 956,773 (32,806)
Norwegian Krone, settling 01/23/98 ....... 2,500 347,301 338,969 (8,332)
Spanish Peseta, settling 01/23/98 ........ 90,000 600,200 591,072 (9,128)
Swedish Krona, settling 01/02/98-01/23/98 2,756 359,907 347,254 (12,653)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/07/98 ........ 28 45,244 45,461 (217)
Deutsche Marks, settling 01/02/98 ........ 1,870 1,048,059 1,039,495 8,564
French Franc, settling 01/23/98 ........... 11,000 1,859,663 1,830,216 29,447
Japanese Yen, settling 01/06/98-04/14/98 . 358,673 2,962,975 2,784,133 178,842
Netherlands Guilders, settling 01/02/98 .. 1,940 964,910 956,772 8,138
Norwegian Krone, settling 01/23/98 ....... 2,500 348,058 338,969 9,089
Spanish Peseta, settling 01/23/98 ........ 90,000 602,208 591,072 11,136
Swedish Krona, settling 01/02/98-01/23/98 2,328 307,119 293,356 13,763
--------
$139,774
========
</TABLE>
81
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE BALANCED PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ---------------------------- ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
French Franc, settling 01/23/98 ........... 99,000 $16,671,017 $16,471,943 $ (199,074)
Deutsche Marks, settling 01/02/98 ........ 17,300 9,932,824 9,616,721 (316,103)
Japanese Yen, settling 02/27/98-04/14/98 . 1,000,000 7,838,089 7,753,716 (84,373)
Netherlands Guilders, settling 01/02/98 .. 17,600 8,977,622 8,679,999 (297,623)
Norwegian Krone, settling 01/23/98 ....... 22,000 3,056,252 2,982,930 (73,322)
Spanish Peseta, settling 01/23/98 ........ 800,000 5,335,112 5,253,975 (81,137)
Swedish Krona, settling 01/23/98 .......... 13,000 1,700,062 1,638,400 (61,662)
FOREIGN CURRENCY SALE CONTRACTS
British Pounds, settling 01/07/98 ........ 229 375,646 375,403 243
Deutsche Marks, settling 01/02/98 ........ 17,300 9,695,951 9,616,721 79,230
French Franc, settling 01/23/98-01/30/98 . 99,457 16,812,017 16,547,968 264,049
Japanese Yen, settling 01/05/98-04/14/98 . 3,988,798 32,900,946 30,969,984 1,930,962
Netherlands Guilders, settling 01/02/98 .. 17,600 8,753,823 8,679,999 73,824
Norwegian Krone, settling 01/23/98 ....... 22,000 3,062,915 2,982,930 79,985
Spanish Peseta, settling 01/23/98 ........ 800,000 5,352,961 5,253,975 98,986
Swedish Krona, settling 01/05/98-01/23/98 13,795 1,816,583 1,738,550 78,033
----------
$1,492,018
==========
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S. $ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION
ALLIANCE GROWTH INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------------------------ ------- ---- ----- --------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pounds, settling 01/08/98 ................ 65 $ 108,622 $ 107,420 $ (1,202)
French Franc, settling 01/30/98 .................. 3,653 608,562 608,068 (494)
Deutsche Marks, settling 01/02/98-01/23/98 ...... 22,980 13,206,726 12,788,720 (418,006)
Japanese Yen, settling 01/05/98-04/14/98 ........ 1,168,671 9,067,606 9,040,016 (27,590)
Netherlands Guilders, settling 01/23/98 ......... 18,900 9,651,967 9,335,085 (316,882)
Swedish Krona, settling 01/02/98 ................. 9,168 1,182,065 1,154,672 (27,393)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollars, settling 01/02/98 ............ 132 85,276 86,274 (998)
British Pounds, settling 01/06/98 ................ 137 227,385 225,848 1,537
Canadian Dollars, settling 01/02/98 .............. 54 36,927 37,579 (652)
Deutsche Marks, settling 01/02/98-01/23/98 ...... 22,980 13,029,701 12,788,720 240,981
French Franc, settling 01/30/98 .................. 1,135 189,471 188,841 630
Indonesian Rupiah, settling 01/02/98-01/07/98 ... 9,315 1,595 1,693 (98)
Japanese Yen, settling 01/05/98-04/14/98 ........ 6,217,997 51,324,595 48,270,138 3,054,457
Netherlands Guilders, settling 01/05/98-01/23/98 19,317 9,738,946 9,540,548 198,398
----------
$2,702,688
==========
</TABLE>
82
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
As of December 31, 1997, the gross unrealized appreciation (depreciation)
of investments based on the aggregate cost of investments for federal income
tax purposes was as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
-------------------------------- NET UNREALIZED
COST OF APPRECIATION
PORTFOLIO INVESTMENTS APPRECIATION DEPRECIATION (DEPRECIATION)
- --------- ----------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Alliance Money Market ....................... $ 551,106,796 $ 113,321 $ (1,450) $ 111,871
Alliance Intermediate Government Securities 113,600,359 1,418,742 (81,837) 1,336,905
Alliance Quality Bond ....................... 198,044,047 1,526,456 (488,133) 1,038,323
Alliance High Yield ......................... 402,787,235 10,488,392 (3,831,357) 6,657,035
Alliance Growth and Income .................. 511,230,453 85,982,551 (13,121,234) 72,861,317
Alliance Equity Index ....................... 717,468,668 230,719,482 (9,632,048) 221,087,434
Alliance Common Stock ....................... 7,105,768,791 2,818,811,560 (199,170,219) 2,619,641,341
Alliance Global ............................. 1,080,321,370 279,910,104 (138,571,829) 141,338,275
Alliance International ...................... 196,445,985 26,360,668 (39,855,124) (13,494,456)
Alliance Aggressive Stock ................... 4,074,878,825 759,226,094 (349,159,577) 410,066,517
Alliance Small Cap Growth ................... 153,262,271 8,273,490 (7,682,047) 591,443
Alliance Conservative Investors ............. 291,571,008 22,817,939 (3,133,104) 19,684,835
Alliance Balanced ........................... 1,533,148,635 209,288,194 (30,695,116) 178,593,078
Alliance Growth Investors ................... 1,486,000,218 234,997,062 (63,640,072) 171,356,990
</TABLE>
During the year ended December 31, 1997, the Alliance Intermediate
Government Securities and Alliance Quality Bond Portfolios utilized available
capital loss carryforwards of $999,418 and $4,993,810, respectively.
The Alliance Intermediate Government Securities Portfolio had net capital
loss carryforwards of $8,831,948 (of which $8,349,809 expires in the year
2002 and $482,139 expires in the year 2004). To the extent the above losses
are used to offset future capital gains, it is probable that the gains so
offset will not be distributed to shareholders.
5. Capital Share Transactions
At December 31, 1997, there was an unlimited number of shares of
beneficial interest (Shares), without par value, available for issuance by
the Board of Trustees. Shares are divided into two classes, designated Class
IA and Class IB for each Portfolio.
Transactions in Shares were as follows:
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE INTERMEDIATE ALLIANCE ALLIANCE
MONEY MARKET GOVERNMENT SECURITIES QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ---------------------- ---------------------- ----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------
Shares sold ......... 88,164,162 49,765,857 4,317,481 3,938,806 5,108,456 2,872,392 15,273,062 7,067,122
Shares issued in
reinvestment of
dividends and
distributions ...... 2,138,588 1,878,824 605,567 496,768 1,161,537 1,135,383 3,903,981 2,737,878
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Total shares issued 90,302,750 51,644,681 4,923,048 4,435,574 6,269,993 4,007,775 19,177,043 9,805,000
Shares redeemed .... (91,686,416) (44,125,860) (2,249,794) (2,495,957) (1,749,691) (4,048,559) (4,915,625) (2,158,843)
----------- ----------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase
(decrease) ......... (1,383,666) 7,518,821 2,673,254 1,939,617 4,520,302 (40,784) 14,261,418 7,646,157
=========== =========== ========== ========== ========== ========== ========== ==========
</TABLE>
83
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
GROWTH AND INCOME EQUITY INDEX COMMON STOCK GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------- ----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------
Shares sold .......... 17,042,406 9,026,248 25,418,356 16,152,780 50,744,225 43,446,898 13,465,598 15,536,853
Shares issued in
reinvestment of
dividends and
distributions ....... 2,393,845 1,157,520 723,055 1,372,168 35,866,900 39,581,929 5,883,409 3,493,773
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Total shares issued... 19,436,251 10,183,768 26,141,411 17,524,948 86,611,125 83,028,827 19,349,007 19,030,626
Shares redeemed ...... (1,171,007) (730,115) (3,834,705) (4,670,841) (18,396,632) (15,634,826) (8,663,149) (3,682,913)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Net increase ......... 18,265,244 9,453,653 22,306,706 12,854,107 68,214,493 67,394,001 10,685,858 15,347,713
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
INTERNATIONAL AGGRESSIVE STOCK SMALL CAP GROWTH CONSERVATIVE INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------------------ ------------------------- ----------------- -----------------------
YEAR ENDED YEAR ENDED MAY 1, 1997* YEAR ENDED
DECEMBER 31, DECEMBER 31, TO DECEMBER 31,
1997 1996 1997 1996 DECEMBER 31, 1997 1997 1996
---------- ---------- ---------- ---------- ----------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Class IA
- --------------------
Shares sold ......... 17,702,398 12,450,977 34,847,127 28,813,436 12,473,113 2,875,061 4,420,391
Shares issued in
reinvestment of
dividends and
distributions ...... 1,469,420 409,789 11,233,155 18,391,950 185,690 1,809,193 1,758,154
---------- ---------- ---------- ---------- ---------- --------- ---------
Total shares issued 19,171,818 12,860,766 46,080,282 47,205,386 12,658,803 4,684,254 6,178,545
Shares redeemed .... (13,816,916) (2,284,561) (27,155,091) (15,090,379) (4,992,168) (3,816,982) (3,042,720)
---------- ---------- ---------- ---------- ---------- --------- ---------
Net increase ........ 5,354,902 10,576,205 18,925,191 32,115,007 7,666,635 867,272 3,135,825
========== ========== ========== ========== ========== ========= =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE
BALANCED GROWTH INVESTORS
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
CLASS IA 1997 1996 1997 1996
- ------------------------ -------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Shares sold ............. 3,662,533 3,826,284 9,706,135 17,024,570
Shares issued in
reinvestment of
dividends and
distributions .......... 8,034,691 11,161,085 6,731,864 9,635,249
---------- ---------- ---------- ----------
Total shares issued .... 11,697,224 14,987,369 16,437,999 26,659,819
Shares redeemed ......... (12,097,554) (7,431,615) (4,231,449) (1,643,924)
---------- ---------- ---------- ----------
Net increase (decrease) (400,330) 7,555,754 12,206,550 25,015,895
========== ========== ========== ==========
</TABLE>
- ------------
* Commencement of operations.
84
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
<TABLE>
<CAPTION>
ALLIANCE
INTERMEDIATE ALLIANCE
ALLIANCE GOVERNMENT ALLIANCE GROWTH AND
MONEY MARKET SECURITIES HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------- ----------------- --------------------------------- -----------------
YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997*
DECEMBER 31, TO TO DECEMBER 31, TO TO
CLASS IB 1997 DECEMBER 31, 1996 DECEMBER 31, 1997 1997 DECEMBER 31, 1996 DECEMBER 31, 1997
- -------- -------------- ----------------- ----------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 15,458,380 353,450 536,124 5,872,392 64,659 2,001,059
Shares issued in
reinvestment of
dividends and
distributions ...... 276,519 3,389 9,576 496,765 3,757 127,333
---------- ------- ------- --------- ------ ---------
Total shares issued 15,734,899 356,839 545,700 6,369,157 68,416 2,128,392
Shares redeemed .... (3,884,676) (43,566) (10,301) (51,149) -- (266)
---------- ------- ------- --------- ------ ---------
Net increase ........ 11,850,223 313,273 535,399 6,318,008 68,416 2,128,126
========== ======= ======= ========= ====== =========
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE ALLIANCE ALLIANCE ALLIANCE
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- --------------------------------- --------------------------------- -----------------
MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996* YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997*
TO DECEMBER 31, TO DECEMBER 31, TO TO
CLASS IB DECEMBER 31, 1997 1997 DECEMBER 31, 1996 1997 DECEMBER 31, 1996 DECEMBER 31, 1997
- -------- ----------------- -------------- ----------------- -------------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 7,451 9,736,070 64,063 1,232,644 16,657 317,031
Shares issued in
reinvestment of
dividends and
distributions ...... 55 826,867 4,203 99,584 486 22,868
----- ---------- ------ --------- ------ -------
Total shares issued 7,506 10,562,937 68,266 1,332,228 17,143 339,899
Shares redeemed .... (1,926) (29,575) -- (103,224) --- (19,496)
----- ---------- ------ --------- ------ -------
Net increase ........ 5,580 10,533,362 68,266 1,229,004 17,143 320,403
===== ========== ====== ========= ====== =======
</TABLE>
<TABLE>
<CAPTION>
ALLIANCE
ALLIANCE ALLIANCE CONSERVATIVE ALLIANCE
AGGRESSIVE STOCK SMALL CAP GROWTH INVESTORS GROWTH INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------------------------- ----------------- ----------------- ---------------------------------
YEAR ENDED OCTOBER 2, 1996* MAY 1, 1997* MAY 1, 1997* YEAR ENDED OCTOBER 2, 1996*
DECEMBER 31, TO TO TO DECEMBER 31, TO
CLASS IB 1997 DECEMBER 31, 1996 DECEMBER 31, 1997 DECEMBER 31, 1997 1997 DECEMBER 31, 1996
- -------- -------------- ----------------- ----------------- ----------------- -------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ......... 1,856,882 16,059 3,666,066 467,751 1,855,983 26,902
Shares issued in
reinvestment of
dividends and
distributions ...... 175,796 1,035 91,565 20,199 130,747 571
--------- ------ --------- ------- --------- ------
Total shares issued 2,032,678 17,094 3,757,631 487,950 1,986,730 27,473
Shares redeemed .... (15,597) --- (5,055) (8,774) (85,261) (5)
--------- ------ --------- ------- --------- ------
Net increase ........ 2,017,081 17,094 3,752,576 479,176 1,901,469 27,468
========= ====== ========= ======= ========= ======
</TABLE>
- ------------
* Commencement of operations.
85
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1997
6. Transactions with Affiliated Companies
An affiliated company is a company in which a Portfolio has ownership of
at least 5% of the voting securities. Investments in companies which were
affiliates during the year ended December 31, 1997 are summarized as follows:
<TABLE>
<CAPTION>
MARKET VALUE MARKET VALUE REALIZED
DECEMBER 31, PURCHASES SALES DECEMBER 31, DIVIDEND GAIN
1996 AT COST AT COST 1997 INCOME (LOSS)
-------------- ------------- ------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ALLIANCE COMMON STOCK PORTFOLIO:
- --------------------------------
CBL & Associates Properties, Inc. (a) ... $ 27,872,550 $ -- $ 1,365,000 $ 24,865,250 $1,399,008 $ 345,043
Ceridian Corp ............................ 148,432,500 5,701,500 -- 174,774,688 -- --
Chris Craft Industries, Inc. (Class B) .. 49,849,843 -- -- 64,143,286 -- --
CompUSA, Inc. (a)......................... 65,331,750 60,013,001 131,193,635 -- -- 25,854,610
Regency Realty Corp. (a).................. 16,372,125 -- 9,420,426 3,563,381 762,216 3,605,448
Teleport Communications Group, Inc.
(Class A) ............................... 610,000 216,341,430 50,817,405 220,103,625 -- 30,473,635
-------------- -------------- ------------ ------------
$ 308,468,768 $ 487,450,230 $2,161,224 $ 60,278,736
============== ============== ============ ============
ALLIANCE AGGRESSIVE STOCK PORTFOLIO:
- ------------------------------------
Aames Financial Corp. (a) ................ $ 39,907,350 $ -- $ 42,877,524 $ -- $ 48,335 $ (9,329,592)
AK Steel Holding Corp. (a) ............... 52,554,637 73,027,066 115,247,008 7,421,675 1,719,840 1,150,485
Centocor, Inc. ........................... 66,044,550 153,361,306 1,564,875 167,463,625 -- 538,805
Circuit City Stores, Inc.-Carmax Group ... -- 114,969,960 6,657,086 56,346,300 -- (1,898,235)
Comverse Technology, Inc. ................ -- 82,646,377 -- 72,520,500 -- 431,918
Continental Airlines, Inc. (Class B) .... 47,587,125 95,672,700 -- 213,588,375 -- --
Crompton & Knowles Corp. ................. 65,534,700 34,325,930 614,460 137,800,000 261,900 292,418
DT Industries, Inc. (a)................... 20,366,500 22,230,101 42,269,251 -- 29,924 (3,199,546)
Chancellor Media Corp. (Class A)(a) ...... 62,782,500 26,261,011 97,120,056 -- -- 108,624,669
Harman International Industries, Inc. (a). 83,281,750 19,373,632 76,334,998 -- 220,450 (15,768,300)
Medimmune, Inc. .......................... 17,205,700 389,200 84,900 57,443,925 -- 818,670
Mohawk Industries, Inc. (a) .............. 27,068,800 19,900,747 -- 69,103,125 -- --
National Steel Corp. (a).................. -- 28,264,493 28,264,495 -- -- 3,035,056
Nine West Group, Inc. (a)................. 144,356,100 17,605,733 133,671,638 -- -- 12,984,585
Polymer Group, Inc. (a)................... 36,167,575 -- 46,201,328 -- -- (22,064,281)
Security Capital Group, Inc. (Class B) .. -- 40,510,428 -- 38,509,250 -- --
Suburban Lodges of America ............... 15,078,400 6,099,725 6,680,579 12,034,500 -- 2,551,018
Telephone & Data Systems, Inc. ........... 104,508,750 56,919,636 70,807,836 133,322,406 629,885 (3,646,115)
Tommy Hilfiger Corp....................... 54,110,400 38,382,299 7,604,889 68,124,937 -- (1,608,315)
Ultramar Diamond Shamrock Corp. (a) ...... 132,338,671 12,303,736 104,934,966 34,750,125 4,075,705 6,800,077
Xtra Corp. (a) ........................... 59,701,350 13,514,957 78,406,603 -- 614,880 (6,280,053)
-------------- -------------- ------------ ------------
$1,028,594,858 $1,068,428,743 $7,600,919 $ 73,433,264
============== ============== ============ ============
</TABLE>
- ------------
(a) Holdings represented less than 5% of outstanding shares at December 31,
1997, although ownership was above 5% for a period of time during the
year.
86
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS
December 31, 1997
SELECTED DATA FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD(c)
ALLIANCE MONEY MARKET PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------- -----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
-------------------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
---------- ---------- ---------- ---------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $10.17 $10.16 $10.14 $10.12 $10.11 $10.16 $10.16
---------- ---------- ---------- ---------- ---------- -------------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 0.54 0.54 0.57 0.41 0.30 0.52 0.11
Net realized and unrealized gain (loss)
on investments........................... -- (0.01) -- -- -- -- 0.01
---------- ---------- ---------- ---------- ---------- -------------- ------------
Total from investment operations.......... 0.54 0.53 0.57 0.41 0.30 0.52 0.12
---------- ---------- ---------- ---------- ---------- -------------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.53) (0.52) (0.55) (0.39) (0.29) (0.51) (0.02)
Dividends in excess of net investment
income................................... -- -- -- -- -- -- (0.10)
Distributions from realized gains ....... (0.00) -- -- -- -- (0.00) --
---------- ---------- ---------- ---------- ---------- -------------- ------------
Total dividends and distributions ....... (0.53) (0.52) (0.55) (0.39) (0.29) (0.51) (0.12)
---------- ---------- ---------- ---------- ---------- -------------- ------------
Net asset value, end of period............. $10.18 $10.17 $10.16 $10.14 $10.12 $10.17 $10.16
========== ========== ========== ========== ========== ============== ============
Total return (d)........................... 5.42% 5.33% 5.74% 4.02% 3.00% 5.16% 1.29%
========== ========== ========== ========== ========== ============== ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $449,960 $463,422 $386,691 $325,391 $248,460 $123,675 $3,184
Ratio of expenses to average net assets ... 0.39% 0.43% 0.44% 0.42% 0.42% 0.63% 0.67% (b)
Ratio of net investment income to average
net assets................................ 5.28% 5.17% 5.53% 4.01% 2.91% 5.02% 4.94% (b)
</TABLE>
ALLIANCE INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO(e):
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------------------------------------------- --------------
MAY 1, 1997
YEAR ENDED DECEMBER 31, TO
----------------------------------------------------- DECEMBER 31,
1997 1996 1995 1994 1993* 1997
---------- --------- --------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $ 9.29 $ 9.47 $ 8.87 $10.08 $10.53 $ 9.27
---------- --------- --------- --------- ---------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 0.53 0.54 0.58 0.65 0.59 0.32
Net realized and unrealized gain (loss)
on investments........................... 0.13 (0.19) 0.57 (1.08) 0.51 0.22
---------- --------- --------- --------- ---------- --------------
Total from investment operations.......... 0.66 0.35 1.15 (0.43) 1.10 0.54
---------- --------- --------- --------- ---------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.51) (0.53) (0.55) (0.78) (0.68) (0.38)
Distributions from realized gains ........ -- -- -- -- (0.87) --
---------- --------- --------- --------- ---------- --------------
Total dividends and distributions ........ (0.51) (0.53) (0.55) (0.78) (1.55) (0.38)
---------- --------- --------- --------- ---------- --------------
Net asset value, end of period............. $ 9.44 $ 9.29 $ 9.47 $ 8.87 $10.08 $ 9.43
========== ========= ========= ========= ========== ==============
Total return (d)........................... 7.29% 3.78% 13.33% (4.37)% 10.58% 5.83%
========== ========= ========= ========= ========== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $115,114 $88,384 $71,780 $48,518 $158,511 $5,052
Ratio of expenses to average net assets ... 0.55% 0.56% 0.57% 0.56% 0.53% 0.81%(b)
Ratio of net investment income to average
net assets................................ 5.61% 5.73% 6.15% 6.75% 5.43% 5.15%(b)
Portfolio turnover rate.................... 285% 318% 255% 133% 254% 285%
</TABLE>
87
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE QUALITY BOND PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
---------------------------------------------
YEAR ENDED DECEMBER 31, OCTOBER 1, 1993
--------------------------------------------- TO
1997 1996 1995 1994 DECEMBER 31, 1993
---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a).......................... $ 9.49 $ 9.61 $ 8.72 $ 9.82 $ 10.00
---------- ---------- ---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................ 0.60 0.57 0.57 0.66 0.11
Net realized and unrealized gain (loss) on investments and
foreign currency transactions................................... 0.24 (0.07) 0.88 (1.16) (0.16)
---------- ---------- ---------- ---------- -----------------
Total from investment operations................................. 0.84 0.50 1.45 (0.50) (0.05)
---------- ---------- ---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income............................. (0.59) (0.60) (0.56) (0.55) (0.12)
Dividends in excess of net investment income..................... -- (0.02) -- -- --
Distributions in excess of realized gains........................ -- -- -- -- (0.01)
Tax return of capital distributions.............................. -- -- -- (0.05) --
---------- ---------- ---------- ---------- -----------------
Total dividends and distributions................................ (0.59) (0.62) (0.56) (0.60) (0.13)
---------- ---------- ---------- ---------- -----------------
Net asset value, end of period.................................... $ 9.74 $ 9.49 $ 9.61 $ 8.72 $ 9.82
========== ========== ========== ========== =================
Total return (d).................................................. 9.14% 5.36% 17.02% (5.10)% (0.51)%
========== ========== ========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................................. $203,233 $155,023 $157,443 $127,575 $104,832
Ratio of expenses to average net assets........................... 0.57% 0.59% 0.59% 0.59% 0.69%(b)
Ratio of net investment income to average net assets ............. 6.19% 6.06% 6.13% 7.17% 4.62%(b)
Portfolio turnover rate........................................... 374% 431% 411% 222% 77%
</TABLE>
ALLIANCE HIGH YIELD PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------ -----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
------------------------------------------------------ DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
---------- ---------- ---------- --------- --------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $10.02 $ 9.64 $ 8.91 $10.08 $ 9.15 $10.01 $10.25
---------- ---------- ---------- --------- --------- -------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................... 1.04 1.02 0.98 0.89 0.94 1.05 0.19
Net realized and unrealized gain (loss)
on investments .......................... 0.75 1.07 0.73 (1.17) 1.10 0.71 0.15
---------- ---------- ---------- --------- --------- -------------- --------------
Total from investment operations.......... 1.79 2.09 1.71 (0.28) 2.04 1.76 0.34
---------- ---------- ---------- --------- --------- -------------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.97) (0.98) (0.94) (0.88) (0.92) (0.95) (0.03)
Dividends in excess of net investment
income................................... -- (0.03) (0.04) (0.01) -- -- (0.25)
Distributions from realized gains ........ (0.43) (0.70) -- -- (0.19) (0.43) (0.01)
Distributions in excess of realized
gains.................................... -- -- -- -- -- -- (0.29)
---------- ---------- ---------- --------- --------- -------------- --------------
Total dividends and distributions ........ (1.40) (1.71) (0.98) (0.89) (1.11) (1.38) (0.58)
---------- ---------- ---------- --------- --------- -------------- --------------
Net asset value, end of period............. $10.41 $10.02 $ 9.64 $ 8.91 $10.08 $10.39 $10.01
========== ========== ========== ========= ========= ============== ==============
Total return (d)........................... 18.48% 22.89% 19.92% (2.79)% 23.15% 18.19% 3.32%
========== ========== ========== ========= ========= ============== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......... $355,473 $199,360 $118,129 $73,895 $67,169 $66,338 $ 685
Ratio of expenses to average net assets .. 0.62% 0.59% 0.60% 0.61% 0.63% 0.88% 0.82%(b)
Ratio of net investment income to average
net assets................................ 9.82% 9.93% 10.34% 9.23% 9.52% 9.76% 8.71%(b)
Portfolio turnover rate ...................[PAGE 88] 390% 485% 350% 248% 280% 390% 485%
</TABLE>
88
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE GROWTH AND INCOME PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, OCTOBER 1, 1993 MAY 1, 1997
------------------------------------------ TO TO
1997 1996 1995 1994 DECEMBER 31, 1993 DECEMBER 31, 1997
---------- ---------- --------- --------- ----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a)....... $ 13.01 $ 11.70 $ 9.70 $ 9.95 $10.00 $ 13.42
---------- ---------- --------- --------- ----------------- ---------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income......................... 0.15 0.24 0.33 0.31 0.03 0.05
Net realized and unrealized gain (loss) on
investments.................................. 3.30 2.05 1.97 (0.36) (0.06) 2.91
---------- ---------- --------- --------- ----------------- ---------------
Total from investment operations.............. 3.45 2.29 2.30 (0.05) (0.03) 2.96
---------- ---------- --------- --------- ----------------- ---------------
LESS DISTRIBUTIONS:
Dividends from net investment income.......... (0.15) (0.23) (0.30) (0.20) (0.02) (0.09)
Dividends in excess of net investment income . -- -- -- -- (0.00) --
Distributions from realized gains............. (0.93) (0.75) -- -- -- (0.93)
Tax return of capital distributions........... -- -- -- -- (0.00) --
---------- ---------- --------- --------- ----------------- ---------------
Total dividends and distributions............. (1.08) (0.98) (0.30) (0.20) (0.02) (1.02)
---------- ---------- --------- --------- ----------------- ---------------
Net asset value, end of period................. $ 15.38 $ 13.01 $ 11.70 $ 9.70 $ 9.95 $ 15.36
========== ========== ========= ========= ================= ===============
Total return (d)............................... 26.90% 20.09% 24.07% (0.58)% (0.25)% 22.41%
========== ========== ========= ========= ================= ===============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).............. $555,059 $232,080 $98,053 $31,522 $1,456 $32,697
Ratio of expenses to average net assets ....... 0.58% 0.58% 0.60% 0.78% 2.70%(b) 0.83%(b)
Ratio of net investment income to average
net assets ................................... 0.99% 1.94% 3.11% 3.13% 1.12%(b) 0.43%(b)
Portfolio turnover rate ....................... 79% 88% 65% 52% 48% 79%
Average commission rate paid (f)............... $ 0.0586 $ 0.0604 -- -- -- $0.0586
</TABLE>
ALLIANCE EQUITY INDEX PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, MARCH 1, 1994 MAY 1, 1997
---------------------------------- TO TO
1997 1996 1995 DECEMBER 31, 1994 DECEMBER 31, 1997
---------- ---------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) ................. $ 15.16 $ 13.13 $ 9.87 $ 10.00 $ 16.35
---------- ---------- ---------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................................... 0.26 0.27 0.26 0.20 0.14
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ...................... 4.64 2.65 3.32 (0.09) 3.48
---------- ---------- ---------- ----------------- -----------------
Total from investment operations......................... 4.90 2.92 3.58 0.11 3.62
---------- ---------- ---------- ----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income..................... (0.25) (0.25) (0.22) (0.20) (0.17)
Distributions from realized gains........................ (0.07) (0.64) (0.09) (0.03) (0.07)
Distributions in excess of realized gains................ -- -- (0.01) (0.01) --
---------- ---------- ---------- ----------------- -----------------
Total dividends and distributions........................ (0.32) (0.89) (0.32) (0.24) (0.24)
---------- ---------- ---------- ----------------- -----------------
Net asset value, end of period............................ $ 19.74 $ 15.16 $ 13.13 $ 9.87 $ 19.73
========== ========== ========== ================= =================
Total return (d).......................................... 32.58% 22.39% 36.48% 1.08% 22.28%
========== ========== ========== ================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)......................... $943,631 $386,249 $165,785 $36,748 $ 110
Ratio of expenses to average net assets................... 0.37% 0.39% 0.48% 0.49%(b) 0.62%(b)
Ratio of net investment income to average net assets ..... 1.46% 1.91% 2.16% 2.42%(b) 1.10%(b)
Portfolio turnover rate................................... 3% 15% 9% 7% 3%
Average commission rate paid (f).......................... $ 0.0309 $ 0.0306 -- -- $0.0309
</TABLE>
89
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE COMMON STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $ 18.23 $ 16.48 $ 13.36 $ 14.65 $ 13.49
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.14 0.15 0.20 0.20 0.23
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 5.12 3.73 4.12 (0.51) 3.10
------------ ------------ ------------ ------------ ------------
Total from investment operations ........ 5.26 3.88 4.32 (0.31) 3.33
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.11) (0.15) (0.20) (0.19) (0.23)
Dividends in excess of net investment
income.................................. -- -- (0.02) (0.01) (0.00)
Distributions from realized gains ....... (1.77) (1.76) (0.95) (0.77) (1.94)
Distributions in excess of realized
gains................................... -- (0.22) (0.03) -- --
Tax return of capital distributions ..... -- -- -- (0.01) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ....... (1.88) (2.13) (1.20) (0.98) (2.17)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period............ $ 21.61 $ 18.23 $ 16.48 $ 13.36 $ 14.65
============ ============ ============ ============ ============
Total return (d).......................... 29.40% 24.28% 32.45% (2.14)% 24.84%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $9,331,994 $6,625,390 $4,879,677 $3,466,245 $3,125,128
Ratio of expenses to average net assets .. 0.39% 0.38% 0.38% 0.38% 0.38%
Ratio of net investment income to average
net assets............................... 0.69% 0.85% 1.27% 1.40 % 1.55%
Portfolio turnover rate................... 52% 55% 61% 52% 82%
Average commission rate paid (f).......... $ 0.0579 $ 0.0565 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CLASS IB
----------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- ------------
<S> <C> <C>
Net asset value, beginning of period (a) . $ 18.22 $ 17.90
-------------- ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.10 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 5.11 1.52
-------------- ------------
Total from investment operations ........ 5.21 1.54
-------------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.08) (0.00)
Dividends in excess of net investment
income.................................. -- (0.03)
Distributions from realized gains ....... (1.77) (0.16)
Distributions in excess of realized
gains................................... -- (1.03)
Tax return of capital distributions ..... -- --
-------------- ------------
Total dividends and distributions ....... (1.85) (1.22)
-------------- ------------
Net asset value, end of period............ $ 21.58 $ 18.22
============== ============
Total return (d).......................... 29.07% 8.49%
============== ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $228,780 $ 1,244
Ratio of expenses to average net assets .. 0.64% 0.63%(b)
Ratio of net investment income to average
net assets............................... 0.46% 0.61%(b)
Portfolio turnover rate................... 52% 55%
Average commission rate paid (f).......... $ 0.0579 $0.0565
</TABLE>
ALLIANCE GLOBAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------------------------------------------- ----------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, YEAR ENDED 1996 TO
---------------------------------------------------------- DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993* 1997 1996
------------ ---------- ---------- ---------- ---------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . 16.92 $15.74 $13.87 $13.62 $11.41 $16.91 $ 16.57
------------ ---------- ---------- ---------- ---------- -------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.17 0.21 0.26 0.20 0.08 0.12 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.75 2.05 2.32 0.52 3.58 1.76 0.81
------------ ---------- ---------- ---------- ---------- -------------- -------------
Total from investment operations ........ 1.92 2.26 2.58 0.72 3.66 1.88 0.83
------------ ---------- ---------- ---------- ---------- -------------- -------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.36) (0.21) (0.25) (0.17) (0.15) (0.33) --
Dividends in excess of net investment
income.................................. -- (0.08) -- -- -- -- (0.11)
Distributions from realized gains ....... (1.19) (0.79) (0.42) (0.28) (1.30) (1.19) (0.10)
Distributions in excess of realized
gains................................... -- -- (0.03) (0.00) (0.00) -- (0.28)
Tax return of capital distributions ..... -- (0.00) (0.01) (0.02) -- -- (0.00)
------------ ---------- ---------- ---------- ---------- -------------- -------------
Total dividends and distributions ....... (1.55) (1.08) (0.71) (0.47) (1.45) (1.52) (0.49)
------------ ---------- ---------- ---------- ---------- -------------- -------------
Net asset value, end of period............ $ 17.29 $ 16.92 $ 15.74 $ 13.87 $ 13.62 $ 17.27 $ 16.91
============ ========== ========== ========== ========== ============== =============
Total return (d).......................... 11.66% 14.60% 18.81% 5.23 % 32.09% 11.38% 4.98%
============ ========== ========== ========== ========== ============== =============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,203,867 $997,041 $686,140 $421,698 $141,257 $21,520 $ 290
Ratio of expenses to average net assets .. 0.69% 0.60% 0.61% 0.69% 0.84% 0.97% 0.86%(b)
Ratio of net investment income to average
net assets............................... 0.97% 1.28% 1.76% 1.41 % 0.62% 0.67% 0.48%(b)
Portfolio turnover rate................... 57% 59% 67% 71% 150% 57% 59%
Average commission rate paid (f).......... $ 0.0412 $ 0.0418 -- -- -- $0.0412 $0.0418
</TABLE>
90
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE INTERNATIONAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------------------------------- -----------------
YEAR ENDED DECEMBER 31, APRIL 3, 1995 MAY 1, 1997
----------------------- TO TO
1997 1996 DECEMBER 31, 1995 DECEMBER 31, 1997
---------- ---------- ----------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) ......................... $11.50 $10.87 $10.00 $11.39
---------- ---------- ----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................................ 0.10 0.13 0.14 0.02
Net realized and unrealized gain (loss) on investments and
foreign currency transactions .................................. (0.45) 0.94 0.98 (0.31)
---------- ---------- ----------------- -----------------
Total from investment operations................................. (0.35) 1.07 1.12 (0.29)
---------- ---------- ----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income............................. (0.32) (0.10) (0.07) (0.28)
Dividends in excess of net investment income..................... -- (0.09) (0.13) --
Distributions from realized gains................................ (0.56) (0.25) (0.05) (0.56)
---------- ---------- ----------------- -----------------
Total dividends and distributions................................ (0.88) (0.44) (0.25) (0.84)
---------- ---------- ----------------- -----------------
Net asset value, end of period.................................... $10.27 $11.50 $10.87 $10.26
========== ========== ================= =================
Total return (d).................................................. (2.98)% 9.82% 11.29% (2.54)%
========== ========== ================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)................................. $190,611 $151,907 $28,684 $3,286
Ratio of expenses to average net assets........................... 1.08% 1.06% 1.03%(b) 1.38%(b)
Ratio of net investment income to average net assets ............. 0.83% 1.10% 1.71%(b) 0.20%(b)
Portfolio turnover rate........................................... 59% 48% 56% 59%
Average commission rate paid (f).................................. $0.0294 $0.0251 -- $0.0294
</TABLE>
ALLIANCE AGGRESSIVE STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period
(a)..................................... $35.85 $35.68 $30.63 $31.89 $29.81
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... 0.04 0.09 0.10 0.04 0.09
Net realized and unrealized gain (loss)
on investments......................... 3.71 7.52 9.54 (1.26) 4.91
------------ ------------ ------------ ------------ ------------
Total from investment operations ....... 3.75 7.61 9.64 (1.22) 5.00
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.05) (0.09) (0.10) (0.04) (0.09)
Dividends in excess of net investment
income................................. -- (0.00) -- -- --
Distributions from realized gains ...... (3.33) (7.33) (4.49) -- (2.75)
Distributions in excess of realized
gains.................................. -- (0.02) -- -- (0.07)
Tax return of capital distributions .... -- -- -- (0.00) (0.01)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ...... (3.38) (7.44) (4.59) (0.04) (2.92)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period........... $36.22 $35.85 $35.68 $30.63 $31.89
============ ============ ============ ============ ============
Total return (d)......................... 10.94% 22.20% 31.63% (3.81)% 16.77%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....... $4,589,771 $3,865,256 $2,700,515 $1,832,164 $1,557,332
Ratio of expenses to average net assets . 0.54% 0.48% 0.49% 0.49% 0.49%
Ratio of net investment income (loss) to
average net assets...................... 0.11% 0.24% 0.28% 0.12 % 0.28%
Portfolio turnover rate.................. 123% 108% 127% 92% 89%
Average commission rate paid (f) ........ $0.0571 $0.0263 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<PAGE>
<TABLE>
<CAPTION>
CLASS IB
----------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- -------------
<S> <C> <C>
Net asset value, beginning of period
(a)..................................... $35.83 $37.28
-------------- -------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income................... (0.11) (0.01)
Net realized and unrealized gain (loss)
on investments......................... 3.77 0.85
-------------- -------------
Total from investment operations ....... 3.66 0.84
-------------- -------------
LESS DISTRIBUTIONS:
Dividends from net investment income ... (0.03) --
Dividends in excess of net investment
income................................. -- (0.02)
Distributions from realized gains ...... (3.33) (0.23)
Distributions in excess of realized
gains.................................. -- (2.04)
Tax return of capital distributions .... -- --
-------------- -------------
Total dividends and distributions ...... (3.36) (2.29)
-------------- -------------
Net asset value, end of period........... $36.13 $35.83
============== =============
Total return (d)......................... 10.66% 2.32%
============== =============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....... $73,486 $ 613
Ratio of expenses to average net assets . 0.81% 0.73% (b)
Ratio of net investment income (loss) to
average net assets...................... (0.28)% (0.10)%(b)
Portfolio turnover rate.................. 123% 108%
Average commission rate paid (f) ........ $0.0571 $0.0263
</TABLE>
91
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE SMALL CAP GROWTH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------- -----------------
MAY 1, 1997 MAY 1, 1997
TO TO
DECEMBER 31, 1997 DECEMBER 31, 1997
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period (a) .................. $10.00 $10.00
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income..................................... 0.01 (0.01)
Net realized and unrealized gain on investments ......... 2.65 2.65
----------------- -----------------
Total from investment operations.......................... 2.66 2.64
----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income...................... (0.01) (0.00)
Distributions from realized gains......................... (0.30) (0.30)
----------------- -----------------
Total dividends and distributions......................... (0.31) (0.30)
----------------- -----------------
Net asset value, end of period............................. $12.35 $12.34
================= =================
Total return (d)........................................... 26.74% 26.57%
================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).......................... $94,676 $46,324
Ratio of expenses to average net assets.................... 0.95%(b) 1.15% (b)
Ratio of net investment income (loss) to average net
assets.................................................... 0.10%(b) (0.12)%(b)
Portfolio turnover rate.................................... 96% 96%
Average commission rate paid............................... $0.0488 $0.0488
</TABLE>
ALLIANCE CONSERVATIVE INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------- -----------------
YEAR ENDED DECEMBER 31, MAY 1, 1997
-------------------------------------------------------- TO
1997 1996 1995 1994 1993* DECEMBER 31, 1997
---------- ---------- ---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a)............. $11.29 $11.52 $10.15 $11.12 $10.94 $11.29
---------- ---------- ---------- ---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income............................... 0.49 0.50 0.60 0.55 0.52 0.31
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .... 0.97 0.07 1.43 (1.00) 0.65 1.01
---------- ---------- ---------- ---------- ---------- -----------------
Total from investment operations.................... 1.46 0.57 2.03 (0.45) 1.17 1.32
---------- ---------- ---------- ---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income................ (0.49) (0.51) (0.59) (0.52) (0.50) (0.36)
Dividends in excess of net investment income ....... -- -- -- -- (0.00) --
Distributions from realized gains................... (0.37) (0.27) (0.07) -- (0.49) (0.37)
Distributions in excess of realized gains .......... -- (0.02) -- -- -- --
---------- ---------- ---------- ---------- ---------- -----------------
Total dividends and distributions................... (0.86) (0.80) (0.66) (0.52) (0.99) (0.73)
---------- ---------- ---------- ---------- ---------- -----------------
Net asset value, end of period....................... $11.89 $11.29 $11.52 $10.15 $11.12 $11.88
========== ========== ========== ========== ========== =================
Total return (d)..................................... 13.25% 5.21% 20.40% (4.10)% 10.76% 11.84%
========== ========== ========== ========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's).................... $307,847 $282,402 $252,101 $173,691 $114,418 $5,694
Ratio of expenses to average net assets.............. 0.57% 0.61% 0.59% 0.59% 0.60% 0.80%(b)
Ratio of net investment income to average net
assets.............................................. 4.17% 4.48% 5.48% 5.22% 4.49% 3.82%(b)
Portfolio turnover rate.............................. 206% 181% 287% 228% 178% 206%
Average commission rate paid (f)..................... $0.0413 $0.0488 -- -- -- $0.0413
</TABLE>
92
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1997
ALLIANCE BALANCED PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $16.64 $16.76 $14.87 $16.67 $ 16.19
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.58 0.53 0.54 0.45 0.50
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 1.86 1.31 2.36 (1.78) 1.46
------------ ------------ ------------ ------------ ------------
Total from investment operations ........ 2.44 1.84 2.90 (1.33) 1.96
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.59) (0.53) (0.54) (0.44) (0.50)
Dividends in excess of net investment
income.................................. -- -- -- (0.03) --
Distributions from realized gains ....... (0.91) (1.40) (0.47) -- (0.95)
Distributions in excess of realized
gains................................... -- (0.03) -- -- (0.03)
Tax return of capital distributions ..... -- -- -- (0.00) --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ....... (1.50) (1.96) (1.01) (0.47) (1.48)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period............ $17.58 $16.64 $16.76 $14.87 $ 16.67
============ ============ ============ ============ ============
Total return (d).......................... 15.06% 11.68% 19.75% (8.02)% 12.28%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,724,089 $1,637,856 $1,523,142 $1,329,820 $1,364,640
Ratio of expenses to average net assets .. 0.45% 0.41% 0.40% 0.39% 0.39%
Ratio of net investment income to average
net assets............................... 3.30% 3.15% 3.33% 2.87% 2.99%
Portfolio turnover rate................... 146% 177% 186% 115% 99%
Average commission rate paid (f).......... $0.0409 $0.0516 -- -- --
</TABLE>
ALLIANCE GROWTH INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993*
------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $17.20 $17.68 $14.66 $15.61 $ 14.69
------------ ------------ ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.41 0.40 0.57 0.50 0.43
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 2.43 1.66 3.24 (0.98) 1.79
------------ ------------ ---------- ---------- ----------
Total from investment operations ........ 2.84 2.06 3.81 (0.48) 2.22
------------ ------------ ---------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.46) (0.40) (0.54) (0.46) (0.42)
Dividends in excess of net investment
income.................................. -- (0.03) (0.01) (0.01) --
Distributions from realized gains ....... (1.03) (2.10) (0.24) -- (0.88)
Distributions in excess of realized
gains................................... -- (0.01) -- -- --
------------ ------------ ---------- ---------- ----------
Total dividends and distributions ....... (1.49) (2.54) (0.79) (0.47) (1.30)
------------ ------------ ---------- ---------- ----------
Net asset value, end of period............ $18.55 $17.20 $17.68 $14.66 $ 15.61
============ ============ ========== ========== ==========
Total return (d).......................... 16.87% 12.61% 26.37% (3.15)% 15.26%
============ ============ ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,630,389 $1,301,643 $896,134 $492,478 $278,467
Ratio of expenses to average net assets .. 0.57% 0.57% 0.56% 0.59% 0.62%
Ratio of net investment income to average
net assets............................... 2.18% 2.31% 3.43% 3.32% 2.71%
Portfolio turnover rate................... 121% 190% 107% 131% 118%
Average commission rate paid (f).......... $0.0460 $0.0495 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<PAGE>
<TABLE>
<CAPTION>
CLASS IB
------------------------------
OCTOBER 2,
YEAR ENDED 1996 TO
DECEMBER 31, DECEMBER 31,
1997 1996
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period (a) . $ 17.19 $ 16.78
-------------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................... 0.36 0.07
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions............................ 2.43 0.71
-------------- --------------
Total from investment operations ........ 2.79 0.78
-------------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.43) (0.02)
Dividends in excess of net investment
income.................................. -- (0.09)
Distributions from realized gains ....... (1.03) (0.02)
Distributions in excess of realized
gains................................... -- (0.24)
-------------- --------------
Total dividends and distributions ....... (1.46) (0.37)
-------------- --------------
Net asset value, end of period............ $ 18.52 $ 17.19
============== ==============
Total return (d).......................... 16.58% 4.64%
============== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $35,730 $ 472
Ratio of expenses to average net assets .. 0.82% 0.84%(b)
Ratio of net investment income to average
net assets............................... 1.88% 1.69%(b)
Portfolio turnover rate................... 121% 190%
Average commission rate paid (f).......... $0.0460 $0.0495
</TABLE>
93
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Concluded)
December 31, 1997
* Prior to July 22, 1993, Equitable Capital Management Corporation
("Equitable Capital") served as the investment adviser to the Trust. On
July 22, 1993, Alliance Capital Management L.P. acquired the business
and substantially all of the assets of Equitable Capital and became the
investment adviser to the Trust.
(a) Date as of which funds were first allocated to the Portfolios are as
follows:
Class IA:
Alliance Common Stock Portfolio--June 16, 1975
Alliance Money Market Portfolio--July 13, 1981
Alliance Balanced Portfolio--January 27, 1986
Alliance Aggressive Stock Portfolio--January 27, 1986
Alliance High Yield Portfolio--January 2, 1987
Alliance Global Portfolio--August 27, 1987
Alliance Conservative Investors Portfolio--October 2, 1989
Alliance Growth Investors Portfolio--October 2, 1989
Alliance Intermediate Government Securities Portfolio--April 1, 1991
Alliance Quality Bond Portfolio--October 1, 1993
Alliance Growth and Income Portfolio--October 1, 1993
Alliance Equity Index Portfolio--March 1, 1994
Alliance International Portfolio--April 3, 1995
Alliance Small Cap Growth--May 1, 1997
Class IB:
Alliance Money Market, Alliance High Yield, Alliance Common Stock,
Alliance Global, Alliance Aggressive Stock and Alliance Growth
Investors Portfolios--October 2, 1996.
Alliance Intermediate Government Securities, Alliance Growth and
Income, Alliance Equity Index, Alliance International, Alliance Small
Cap Growth and Alliance Conservative Investors Portfolios--May 1, 1997.
(b) Annualized.
(c) Net investment income and capital changes per share are based upon
monthly average shares outstanding.
(d) Total return is calculated assuming an initial investment made at the
net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total return calculated for a
period of less than one year is not annualized.
(e) On February 22, 1994, shares of the Alliance Intermediate Government
Securities Portfolio of the Trust were substituted for shares of the
Trust's Alliance Short-Term World Income Portfolio.
(f) For fiscal years beginning on or after September 1, 1995, a portfolio
is required to disclose its average commission rate paid per share for
equity security trades on which commissions are charged.
94
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of
The Hudson River Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Alliance
Money Market Portfolio, Alliance Intermediate Government Securities
Portfolio, Alliance Quality Bond Portfolio, Alliance High Yield Portfolio,
Alliance Growth and Income Portfolio, Alliance Equity Index Portfolio,
Alliance Common Stock Portfolio, Alliance Global Portfolio, Alliance
International Portfolio, Alliance Aggressive Stock Portfolio, Alliance Small
Cap Growth Portfolio, Alliance Conservative Investors Portfolio, Alliance
Balanced Portfolio and Alliance Growth Investors Portfolio (constituting the
fourteen portfolios of The Hudson River Trust, hereafter referred to as the
"Trust") at December 31, 1997, the results of each of their operations for
the year then ended, and the changes in each of their net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Trust's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 1997 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 9, 1998
95
