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<PAGE> 1
PRESIDENT'S
MESSAGE
[PHOTO]
DEAR CONTRACTOWNERS:
We are pleased to provide you with an update of Ohio National Fund's performance
and investment activity for the semi-annual period ended June 30, 1997. Despite
some short-term volatility in the early months of 1997, stocks in general
registered strong gains and bond performance overall was solid. Large-cap stocks
in particular continued to drive the vigorous bull market to new records, just
as they have for the past several years.
At present, corporate earnings, both in terms of their growth and their
reliability, continue to be quite good. Inflation remains benign, at its lowest
levels in some three decades. Credit growth has been slow and stable. Economic
growth appears to be continuing at a moderate, sustainable pace. As we seek to
capitalize on this favorable environment we remain mindful that the future
course of the markets is, as always, uncertain. Therefore, we shall continue to
adhere to our fundamental investment principles of careful selection and
constant management in pursuit of long-term objectives.
OUR NEW LOOK
We believe it is important to clearly and efficiently communicate investment
information to you. To that end, we are pleased to introduce several
enhancements to our Ohio National Fund Semi-Annual Report. Foremost is the
addition of a summary page for each portfolio (excepting the Money Market).
There you'll find information on the portfolio's allocations and top holdings,
data on its total returns, a graph showing the performance of a hypothetical
investment in it and comments from the portfolio's manager. You'll notice
several other changes throughout, all designed to help you better understand
your investments. As always, we welcome your comments.
LOOKING AHEAD
1997 marks the 27th anniversary of Ohio National Fund's first portfolio, the
Equity Portfolio. Over the 27 years Ohio National Fund has grown to 16
portfolios and more than $800 million in net assets. We value the confidence you
have demonstrated in us as we have attained this milestone. Our highest priority
as we go forward remains earning your continued confidence with strong long-term
performance.
Information on your investments is contained in the following pages. We are
proud that Ohio National Fund is able to provide its investors with the sound
results documented herein. Please note in reviewing performance results that
rates of return under variable contracts differ depending on the applicable
charges for mortality and expenses. Please contact your registered
representative for additional information on the tax-favored financial
protection and accumulation options afforded by your variable annuity or
variable universal life contract. As your needs change over time, he or she
stands ready to serve you.
Continued
<PAGE> 2
In Closing
Finally, I wish to thank Ohio National Fund's recently retired president, Don
Zimmerman, for his leadership in advancing the best interests of our investors.
It is now my privilege to serve as your president and my responsibility to
continue the Fund's progress. Thank you again for the confidence you have placed
in Ohio National Fund as you pursue your wealth-building endeavors.
Best regards,
/s/John J. Palmer
John J. Palmer
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS OF OHIO NATIONAL FUND, INC.
John J. Palmer, President and Director
Ronald L. Benedict, Secretary and Director
George E. Castrucci, Director
Ross Love, Director
George M. Vredeveld, Director
Joseph P. Brom, Vice President
Michael A. Boedeker, Vice President
Stephen T. Williams, Vice President
Dennis R. Taney, Treasurer
Amy D. Starkey, Assistant Secretary
This report may be used as sales literature only when accompanied or preceded by
an effective prospectus of Ohio National Fund, Inc. which contains related sales
expense and other pertinent information.
<PAGE> 3
EQUITY PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE:
The principal investment objective of the Equity Portfolio is long-term capital
growth. Current income is a secondary objective.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 21.12%
Three-year 20.49%
Five-year 16.07%
Since inception (1/14/71) 11.18%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS:
The financial markets, primarily the equity markets, have experienced tremendous
growth over the past 12 months. This surge is the result of strong corporate
profits, low inflation, moderate interest rates and tremendous cash flow into
the markets. The leaders in this upward move have been large capitalization
stocks. Most funds that invest in the small, medium, or a blend of market
capitalization size issues have not kept pace with the Dow or the S&P 500 Index
or related funds. They have, for the most part, provided respectable returns.
Going forward, it looks as though the economy could strengthen somewhat into the
second half of this year. Interest rates could move up some, but probably not
much unless inflation concerns surface. With stock valuations at high levels,
continued positive corporate earnings growth will be necessary for the market to
maintain its current levels or to move up.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Equity Portfolio
(Commenced operations January 14, 1971) S&P 500 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
06/30/86 $10,000.00 06/30/86 $10,000.00
12/31/86 -2.99% $9,701.00 12/31/86 -1.94% $9,806.00
06/30/87 28.08% $12,425.04 06/30/87 27.56% $12,508.53
12/31/87 -13.47% $10,751.39 12/31/87 -17.51% $10,318.29
06/30/88 13.81% $12,236.15 06/30/88 12.86% $11,645.22
12/31/88 1.07% $12,367.08 12/31/88 3.50% $12,052.80
06/30/89 14.21% $14,124.44 06/30/89 16.44% $14,034.29
12/31/89 7.88% $15,237.45 12/31/89 12.92% $15,847.51
06/30/90 3.68% $15,798.19 06/30/90 3.08% $16,335.62
12/31/90 -7.27% $14,649.66 12/31/90 -6.06% $15,345.68
06/30/91 7.95% $15,814.31 06/30/91 14.32% $17,543.18
12/31/91 11.33% $17,606.07 12/31/91 14.19% $20,032.56
06/30/92 -1.34% $17,370.15 06/30/92 -0.64% $19,904.35
12/31/92 9.01% $18,935.20 12/31/92 8.36% $21,568.35
06/30/93 5.71% $20,016.40 06/30/93 4.82% $22,607.95
12/31/93 7.94% $21,605.70 12/31/93 4.93% $23,722.52
06/30/94 -3.19% $20,916.48 06/30/94 -3.42% $22,911.21
12/31/94 3.55% $21,659.01 12/31/94 4.90% $24,033.86
06/30/95 16.57% $25,247.91 06/30/95 20.15% $28,876.68
12/31/95 9.12% $27,550.52 12/31/95 14.38% $33,029.15
06/30/96 9.66% $30,211.90 06/30/96 10.20% $36,398.12
12/31/96 7.93% $32,607.70 12/31/96 11.69% $40,653.06
06/30/97 12.22% $36,592.37 06/30/97 20.50% $48,986.94
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<C> <C>
1. General Electric Co. 2.0
2. Hewlett-Packard 1.7
3. Intel 1.7
4. American International GP 1.6
5. Cisco Systems, Inc. 1.5
6. First Data Corp. 1.5
7. AlliedSignal, Inc. 1.4
8. Burlington Northern Santa Fe 1.4
9. Monsanto 1.4
10. Camco International Inc. 1.3
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
Computer and Related 14.4
Oil, Energy & Natural Gas 9.9
Electrical Equipment 6.5
Insurance Services 5.6
Chemicals 4.8
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
- --------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (3.4%)
44,500 Allied Signal, Inc. $3,738,000
2,632 Boeing Co. 139,661
64,000 Raytheon Co. 3,264,000
31,350 Rockwell International Corp. 1,849,650
-------------
8,991,311
-------------
AUTOMOTIVE AND RELATED (3.3%)
22,500 Arvin Industries, Inc. 613,125
31,000 Chrysler Corp. 1,017,188
35,400 Cooper Tire & Rubber 778,800
29,400 Eaton Corp. 2,566,987
39,184 Ford Motor Co. 1,479,196
8,000 * Lear Corporation 355,000
20,000 Magna International, Inc. 1,203,750
47,000 Walbro Corp. 951,750
-------------
8,965,796
-------------
BANKING (4.0%)
25,200 Charter One Financial Inc. 1,357,650
21,000 First Union Corp. 1,942,500
40,000 * Flagstar Bancorp 650,000
35,000 Long Island Bancorp, Inc. 1,270,938
45,000 Mellon Bank Corp. 2,030,625
30,000 * National Australia Bank Limited 838,125
19,574 Nationsbank Corp. 1,262,523
11,000 Star Banc Corp. 464,750
20,500 Susquehanna Bancshares Inc. 804,625
-------------
10,621,736
-------------
BUSINESS SERVICES (3.9%)
64,000 * Alternative Resources Inc. 1,304,000
89,000 First Data Corp. 3,910,438
50,000 * Globe Business Resources 587,500
45,000 Manpower Inc. 2,002,500
76,000 Reynolds & Reynolds CL A 1,197,000
35,000 Standard Register Co. 1,071,875
23,000 Wackenhut Corp. Class B 458,562
-------------
10,531,875
-------------
CHEMICALS (4.8%)
35,000 E I DuPont De Nemours & Co. 2,200,625
96,000 Engelhard Corp. 2,010,000
8,750 Hanson Trust PLC 218,750
28,000 Lubrizol Corp. 1,174,250
35,300 Mineral Technologies Inc. 1,323,750
85,000 Monsanto Co. 3,660,313
66,000 OM Group, Inc. 2,186,250
-------------
12,773,938
-------------
COMMUNICATIONS (2.8%)
123,750 * Andrew Corp. 3,480,469
20,625 * Mastec Inc. 975,820
40,000 Motorola Inc. 3,040,000
-------------
7,496,289
-------------
CONSUMER PRODUCTS (0.9%)
40,000 * Acorn Products 560,000
36,000 * Sola Industries 1,206,000
23,000 Stanhome Inc. 756,125
-------------
2,522,125
-------------
COMPUTER AND RELATED (14.2%)
39,375 * 3Comm Corp. $1,771,875
34,500 * Banctec Inc. 894,844
60,000 * Cisco Systems, Inc. 4,027,500
42,000 Computer Associates 2,338,875
30,000 * Computer Sciences Corp. 2,163,750
65,000 * Continental Circuits Corp. 901,875
83,000 Hewlett-Packard Co. 4,648,000
32,000 Intel Corp. 4,538,000
90,000 MacNeal-Schwendler Corp. 978,750
20,000 * Microsoft Corp. 2,527,500
47,058 * Seagate Technology 1,655,853
22,871 * Solectron Corp. 1,602,399
80,000 * Sun Microsystems, Inc. 2,977,504
45,000 Symbol Technologies 1,513,125
40,000 Texas Instruments, Inc. 3,362,500
73,000 * Zebra Tech Corp., Cl. A 2,034,875
-------------
37,937,225
-------------
CONTAINERS (1.0%)
90,000 * Owens-Illinois, Inc. 2,790,000
-------------
DRUGS (0.8%)
32,000 Abbott Laboratories 2,136,000
-------------
DURABLE GOODS (0.2%)
12,500 Fisher Scientific Int'l. 593,750
-------------
ELECTRICAL EQUIPMENT (6.2%)
60,000 * Analog Devices, Inc. 1,593,750
60,000 * Anixter Intl. Inc. 1,031,250
73,500 BMC Industries, Inc. 2,517,375
31,500 Federal Signal Corp. 791,438
80,000 General Electric Co. 5,230,000
40,000 Varian Associates, Inc. 2,170,000
55,000 Westinghouse Electric 1,271,875
25,000 Xerox Corp. 1,971,875
-------------
16,577,563
-------------
ENTERTAINMENT AND LEISURE (0.6%)
37,500 Cedar Fair 1,640,625
-------------
FINANCIAL SERVICES (0.4%)
40,000 SEI Corp. 965,000
-------------
FOOD AND RELATED (1.5%)
80,000 Food Lion Inc. 572,504
25,500 H.J. Heinz Co. 1,176,188
45,000 Panamerican Beverages, Inc. 1,479,375
33,000 Smart & Final, Inc. 808,500
-------------
4,036,567
-------------
FORESTRY AND PAPER PRODUCTS (0.8%)
68,000 Sonoco Products 2,069,750
-------------
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
-------------------------------------------------------------------------
<S> <C> <C>
HOTEL/LODGING (1.5%)
50,000 * Guest Supply Inc. $475,000
33,000 * ITT Corp. 2,015,063
60,000 * Mirage Resorts Inc. 1,515,000
-------------
4,005,063
-------------
HOUSING, FURNITURE & RELATED (2.3%)
150,000 Clayton Homes, Inc. 2,137,500
64,000 Newell Co. 2,536,000
100,000 Shelby Williams 1,362,500
-------------
6,036,000
-------------
INDUSTRIAL SERVICES (2.0%)
35,300 * Canisco Resources Inc. 61,775
22,500 Fluor Corp. 1,241,719
20,500 * Medar Inc. 105,062
50,000 Regal Beloit 1,309,375
50,000 Waste Management Inc. 1,606,250
20,000 York International, Corp. 920,000
-------------
5,244,181
-------------
INSURANCE SERVICES (5.6%)
14,987 Aegon NV 1,050,027
28,125 American International Group 4,201,172
36,000 Chubb Corp. 2,407,500
35,831 Cincinnati Financial Corp. 2,830,649
40,000 Equitable Cos., Inc. 1,330,000
34,500 * Providian Corp. 1,108,312
26,500 St. Paul Cos. 2,020,625
-------------
14,948,285
-------------
MACHINERY (2.9%)
24,000 Caterpillar, Inc. 2,577,000
30,000 Deere & Company 1,646,250
53,500 Hardinge Inc. 1,564,875
43,000 Modine Manufacturing Inc. 1,279,250
32,000 Stewart & Stevenson 832,000
-------------
7,899,375
-------------
MEDIA AND PUBLISHING (0.0%)
12,500 * Granite Broadcasting Corp. 128,125
-------------
MEDICAL AND RELATED (4.4%)
35,000 Allegiance Corp. 953,750
37,500 Baxter International 1,959,375
41,500 * Cephalon Inc. 477,250
66,000 Columbia HCA Healthcare Corp. 2,594,625
50,700 * Foundation Health Corp. 1,536,844
30,000 * Humana Inc. 693,750
15,200 National Healthcare-LP 678,300
40,875 * Quorum Health Group Inc. 1,461,280
28,000 United Healthcare Corp. 1,456,000
-------------
11,811,174
-------------
METALS AND MINING (1.0%)
7,000 Amcast Industrial Corp. 175,000
16,000 Phelps Dodge Corp. 1,363,000
43,800 * Wolverine Tube, Inc. 1,220,925
-------------
2,758,925
-------------
OIL, ENERGY AND NATURAL GAS (9.3%)
65,000 * Belco Oil & Gas $1,393,438
65,500 Camco International, Inc. 3,586,125
27,000 Chevron Corp. 1,996,312
13,000 Coastal Corp. 691,438
89,000 * Louis Dreyfus Natural Gas 1,446,250
38,000 National Propane Partners 774,250
38,000 * Offshore Logistics Inc. 717,250
85,000 * Santa Fe Energy Resources 1,248,437
20,000 Schlumberger, Ltd. 2,500,000
42,750 The Energy Group 1,811,531
110,000 * Tesoro Petroleum 1,629,375
47,850 Ultramar Diamond Shamrock 1,561,106
90,000 Westcoast Energy, Inc. 1,636,875
51,000 Williams Cos. Inc. 2,231,250
92,500 Wiser Oil 1,705,469
-------------
24,929,106
-------------
RETAIL (0.1%)
35,000 * Ridgeview Inc. 266,875
-------------
RESTAURANTS (0.3%)
84,000 * Buffets, Inc. 708,750
-------------
REAL ESTATE AND LEASING (2.8%)
76,000 Commercial Net Lease Realty 1,163,750
37,500 First Industrial Realty Trust 1,096,875
16,400 Great Lakes REIT 269,575
55,000 Healthcare Realty Trust 1,533,125
56,250 Liberty Property Trust 1,399,219
29,500 National Health Investors, Inc. 1,157,875
35,000 Pacific Gulf Properties 770,000
-------------
7,390,419
-------------
TEXTILES AND RELATED (0.5%)
25,000 Oxford Industries, Inc. 709,375
25,000 Warnaco Group, Cl. A 796,875
-------------
1,506,250
-------------
TRANSPORTATION AND EQUIPMENT (4.2%)
41,382 Burlington Northern, Inc. 3,719,207
15,000 * Consolidated Freightways Corp 245,625
30,000 CNF Transportation Inc. 967,500
40,000 Greenbrier Companies, Inc. 452,500
19,766 * Halter Marine Group Inc. 474,384
33,750 Illinois Central Corp. 1,179,141
25,000 Norfolk Southern Corp. 2,518,750
56,800 Trinity Industries 1,803,400
-------------
11,360,507
-------------
UTILITIES (0.8%)
21,500 Entergy Corp. 588,562
27,500 FPL Group, Inc. 1,266,719
20,500 Montana Power Co. 475,343
-------------
2,330,624
-------------
TOTAL COMMON STOCKS
(86.5%) (COST $127,523,868) $231,973,209
-------------
</TABLE>
<PAGE> 6
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Preferred Stock Value
- -----------------------------------------------------------------------------
<S> <C> <C>
BANKING (0.1%)
11,000 Money Store 6.5% $ 299,750
------------
COMPUTER & RELATED (0.2%)
24,000 General Datacommunications 495,000
------------
METALS AND MINING (0.6%)
50,000 Freeport McMoRan Copper & Gold,
Series B 1,543,750
------------
OIL AND GAS (0.3%)
15,000 Howell Corp., $3.50 Series A 900,000
------------
REAL ESTATE (0.2%)
20,000 Oasis Residential Inc. Series A
cum., conv. 517,500
------------
TOTAL PREFERRED STOCK
(1.4%) (COST $3,925,738) $ 3,756,000
------------
<CAPTION>
Face Market
Amount Convertible Debentures Value
- -----------------------------------------------------------------------------
<S> <C> <C>
BANKING (0.2%)
$400,000 First State Bancorp, 7.500%
conv. debentures, due 04-30-17 $ 433,500
------------
ELECTRICAL EQUIPMENT (0.3%)
850,000 Richey Electric, 7.000%
conv. debentures, due 03-01-06 761,813
------------
METAL FABRICATING (0.3%)
900,000 INCO, Ltd., 7.750% conv.
subordinated debentures,
due 03-15-16 919,125
------------
OIL, ENERGY AND NATURAL GAS (0.3%)
800,000 Offshore Log, 6.000%
debentures due 12-15-06 860,000
------------
TOTAL CONVERTIBLE $ 2,974,438
(1.1%) (COST $2,955,000) ------------
<CAPTION>
Face Market
Amount Short-Term Notes Value
- -----------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (1.2%)
$3,135,000 General Motors
5.580% 07-08-97 $ 3,131,599
------------
ELECTRICAL EQUIPMENT (1.1%)
2,874,000 G.E. Capital
5.560% 07-11-97 2,869,561
FINANCIAL SERVICES (4.7%)
3,815,000 American Express
5.540% 07-09-97 3,810,303
3,325,000 Associates Corp.
5.380% 07-03-97 3,324,006
200,000 Heller Financial
5.670% 07-14-97 199,591
5,400,000 Household Finance
5.470% 07-02-97 5,399,180
------------
12,733,080
------------
INSURANCE SERVICES (3.3%)
4,000,000 American General
5.450% 07-01-97 4,000,000
4,825,000 Prudential Funding
5.530% 07-07-97 4,820,553
------------
8,820,553
------------
RETAIL (0.9%)
2,460,000 Sears Roebuck
5.570% 07-10-97 2,456,573
------------
TOTAL SHORT-TERM NOTES
(11.2%) (COST $30,011,367) $ 30,011,366
------------
TOTAL HOLDINGS
(COST $164,415,973)(A) $268,715,013
============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
OHIO NATIONAL FUND, INC.
EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $164,415,973) ..................$268,715,013
Cash in bank ......................................... 1,489
Receivable for fund shares sold....................... 1,323,916
Dividends and accrued interest receivable ............ 362,962
Other ................................................ 18,112
------------
Total assets ........................................ 270,421,492
------------
Liabilities:
Payable for investment management
services (note 3) ................................... 116,697
Other accrued expenses ............................... 4,349
Dividends payable .................................... 913,527
------------
Total liabilities ................................... 1,034,573
------------
Net assets at market value $269,386,919
============
Net assets consist of:
Par value, $1 per share .............................. $7,587,100
Paid-in capital in excess of par value ............... 155,146,501
Accumulated undistributed net realized
gain on investments ................................ 2,350,003
Net unrealized appreciation on investments (note 1)... 104,299,040
Undistributed net
investment income ................................... 4,275
------------
Net assets at market value $269,386,919
============
Shares outstanding (note 4)............................ 7,587,100
Net asset value per share.............................. $35.51
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (Unaudited)
<S> <C>
Investment income:
Interest..................................... $886,249
Dividends.................................... 1,708,744
----------
Total investment income..................... 2,594,993
----------
Expenses:
Management fees (note 3)..................... 660,878
Custodian fees (note 3)...................... 23,293
Directors' fees (note 3) .................... 5,555
Professional fees............................ 18,173
Fund accounting fees ........................ 75,994
Other........................................ 28,063
----------
Total expenses.............................. 811,956
----------
Net investment income....................... $1,783,037
==========
Realized and unrealized gain on investments:
Net realized gain from investments .......... $2,350,003
Net increase in unrealized
appreciation on investments ................ 24,805,183
----------
Net gain on investments.................... 27,155,186
----------
Net increase in net
assets from operations..................... $28,938,223
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 8
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
6 Months Ended Year Ended
6-30-97 12-31-96
------------ ------------
<S> <C> <C>
From operations:
Net investment income ............................................ $1,783,037 $3,269,213
Realized gain on investments ..................................... 2,350,003 2,116,393
Unrealized gain on investments ................................... 24,805,183 29,110,600
------------ ------------
Net increase in assets from operations.......................... 28,938,223 34,496,206
------------ ------------
Dividends and distributions to shareholders:
Dividends declared ............................................... (2,770,012) (3,065,136)
Capital gains distributions ...................................... (2,116,393) (5,341,756)
------------ ------------
Total dividends and distributions .............................. (4,886,405) (8,406,892)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ........................................ 23,203,438 37,139,279
Received from dividends reinvested ............................... 4,886,405 8,406,892
Paid for shares redeemed ......................................... (15,531,096) (14,554,329)
------------ ------------
Increase in net assets derived from capital share transactions... 12,558,747 30,991,842
Increase in net assets ........................................ 36,610,565 57,081,156
Net Assets:
Beginning of period .............................................. 232,776,354 175,695,198
------------ ------------
End of period (a) ................................................$269,386,919 $232,776,354
============ ============
(a) Includes undistributed net investment income of................ $4,275 $991,250
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months
Ended Years Ended December 31,
June 30, 1997 1996 1995 1994 1993
------------- ------ ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period......................... $32.30 $28.58 $23.20 $23.90 $21.63
Income from investment operations:
Net investment income...................................... 0.24 0.47 0.50 0.45 0.41
Net realized and unrealized gain (loss) on investments .... 3.64 4.58 5.65 (0.39) 2.57
------ ------ ------ ------ ------
Total income from investment operations.................. 3.88 5.05 6.15 0.06 2.98
------ ------ ------ ------ ------
Less distributions:
Dividends declared ........................................ (0.38) (0.46) (0.39) (0.44) (0.42)
Distributions from net realized capital gains.............. (0.29) (0.87) (0.38) (0.32) (0.29)
------ ------ ------ ------ ------
Total distributions...................................... (0.67) (1.33) (0.77) (0.76) (0.71)
------ ------ ------ ------ ------
Net asset value, end of period............................... $35.51 $32.30 $28.58 $23.20 $23.90
====== ====== ====== ====== ======
Total return................................................. 12.22%(b) 18.35% 27.20% 0.25% 14.09%
Ratios and supplemental data:
Ratio of expenses to average net assets ................... 0.66%(a) 0.73% 0.73% 0.62% 0.63%
Ratio of net investment income to average net assets ...... 1.45%(a) 1.60% 1.90% 1.90% 1.91%
Portfolio turnover rate...................................... 7%(b) 11% 14% 8% 18%
Average commission rate (c) ................................. $0.07 $0.07 N/A N/A N/A
Net assets at end of period (millions)....................... $269.4 $232.8 $175.7 $123.3 $109.9
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security transactions divided by the total number of shares
purchased and sold for which commissions were charged.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
OHIO NATIONAL FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Short-Term Notes Value
- ----------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (15.8%)
$1,100,000 Ford Motor Acceptance Corp.
5.620% 09-11-97 $1,087,636
1,235,000 General Motors Acceptance Corp.
5.400% 07-30-97 1,229,628
1,206,000 Hertz Corporation
5.570% 08-28-97 1,195,177
----------
3,512,441
----------
COMMUNICATIONS (4.9%)
1,100,000 AT&T Corp.
5.500% 07-16-97 1,097,479
----------
COMPUTER AND RELATED (2.8%)
633,000 International Business Machines
5.540% 07-08-97 632,318
----------
CONSUMER PRODUCTS (3.5%)
126,000 BAT Capital Corp.
5.600% 07-23-97 125,569
368,000 BAT Capital Corp.
5.580% 08-01-97 366,232
283,000 BAT Capital Corp.
5.570% 08-01-97 281,643
----------
773,444
----------
ELECTRICAL EQUIPMENT (15.3%)
1,000,000 Avnet, Inc.
5.640% 07-11-97 998,433
100,000 Avnet Inc.
5.640% 07-11-97 99,843
747,000 GE Capital
5.670% 07-08-97 746,176
300,000 Hughes Electric
5.820% 07-25-97 298,836
1,250,000 Sharp Electronics
5.550% 07-03-97 1,249,615
----------
3,392,903
----------
FINANCIAL SERVICES (20.1%)
423,000 American Express Credit
5.540% 08-18-97 419,875
625,000 American Express Credit
5.550% 08-15-97 620,664
1,100,000 Associates Corp.
5.620% 08-26-97 1,090,383
1,240,000 Beneficial Corp.
5.390% 07-18-97 1,236,844
1,100,000 Heller Financial Services
5.650% 07-14-97 1,097,756
----------
4,465,522
----------
HOTEL/LODGING (4.5%)
1,000,000 Hilton Hotels
5.820% 08-20-97 991,917
----------
<CAPTION>
Face Market
Amount Short-Term Notes Value
- ----------------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL SERVICES (4.9%)
$1,100,000 WMX Technologies
5.640% 07-22-97 $ 1,096,381
-----------
INSURANCE SERVICES (14.3%)
262,000 American General Finance
5.530% 07-28-97 260,913
368,000 American General Finance
5.530% 07-29-97 366,417
356,000 Commoloco Inc.
5.610% 10-27-97 349,454
658,000 MetLife Funding
5.550% 07-07-97 657,391
454,000 MetLife Funding
5.570% 07-10-97 453,368
1,100,000 Reliastar Mortgage Corp.
5.570% 08-05-97 1,094,043
-----------
3,181,586
-----------
RETAIL (9.4%)
1,111,000 Sears Roebuck Acceptance Corp.
5.640% 09-02-97 1,100,035
987,000 Southland
5.560% 07-09-97 985,781
-----------
2,085,816
-----------
UTILITIES (4.4%)
981,000 PG&E Corp.
5.550% 07-21-97 977,976
-----------
TOTAL HOLDINGS $22,207,783
(COST $22,207,783) (a) ===========
</TABLE>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
OHIO NATIONAL FUND, INC.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
June 30, 1997 (Unaudited)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $22,207,783).........$22,207,783
Cash in bank .............................. 923
Receivable for fund shares sold............ 267,369
Other ..................................... 1,867
-----------
Total assets ............................. 22,477,942
-----------
Liabilities:
Payable for investment management
services (note 3) ........................ 9,863
Dividends payable ......................... 9,135
Payable for shares redeemed ............... 36,191
Other accrued expenses .................... 1,312
-----------
Total liabilities ........................ 56,501
-----------
Net assets at market value $22,421,441
===========
Net assets consist of:
Par value, $1 per share ................... $2,242,144
Paid-in capital in excess of par value .... 20,179,297
-----------
Net assets at market value .................$22,421,441
===========
Shares outstanding (note 4)................. 2,242,144
Net asset value per share................... $10.00
===========
Statement of Operations
For the six months ended June 30, 1997 (Unaudited)
Investment income:
Interest................................ $655,604
--------
Expenses:
Management fees (note 3)................ 35,520
Custodian fees (note 3)................. 2,409
Directors' fees (note 3)................ 615
Professional fees....................... 2,021
Fund accounting fees ................... 7,671
Other................................... 2,990
--------
Total expenses......................... 51,226
Less fees waived ...................... (5,924)
--------
Net expenses ......................... 45,302
--------
Net investment income ................. $610,302
========
Net increase in net
assets from operations................ $610,302
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 11
<TABLE>
OHIO NATIONAL FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<CAPTION>
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- -----------
<S> <C> <C>
From operations:
Net investment income ........................................................ $610,302 $979,842
-------------- -----------
Dividends and distributions to shareholders:
Dividends declared ........................................................... (610,302) (979,842)
-------------- -----------
From capital share transactions (note 4):
Received from shares sold .................................................... 17,754,512 28,544,523
Received from dividends reinvested ........................................... 610,302 979,842
Paid for shares redeemed ..................................................... (21,454,703) (19,728,821)
-------------- -----------
Increase (decrease) in net assets derived from capital share transactions.... (3,089,889) 9,795,544
Increase (decrease) in net assets ......................................... (3,089,889) 9,795,544
Net Assets:
Beginning of period .......................................................... 25,511,330 15,715,786
-------------- -----------
End of period................................................................. $22,421,441 $25,511,330
============== ===========
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<CAPTION>
Six Months
Ended Years Ended December 31,
June 30, 1997 1996 1995 1994 1993
------------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period....................... $10.00 $10.00 $10.00 $10.00 $10.00
Income from investment operations:
Net investment income.................................... 0.25 0.50 0.54 0.39 0.27
------ ------ ------ ------ ------
Less distributions:
Dividends declared ...................................... (0.25) (0.50) (0.54) (0.39) (0.27)
------ ------ ------ ------ ------
Net asset value, end of period............................. $10.00 $10.00 $10.00 $10.00 $10.00
====== ====== ====== ====== ======
Total return............................................... 2.59%(b) 5.17% 5.62% 4.00% 2.71%
Ratios net of fees waived by advisor (c):
Ratio of expenses to average net assets ................. 0.37%(a) 0.44% 0.44% 0.39% 0.53%
Ratio of net investment income to average net assets .... 5.03%(a) 4.98% 5.39% 3.69% 2.71%
Ratios assuming no fees waived by advisor:
Ratio of expenses to average net assets ................. 0.42%(a) 0.49% 0.55% 0.59% 0.63%
Ratio of net investment income to average net assets .... 4.98%(a) 4.93% 5.27% 3.51% 2.60%
Net assets at end of period (millions)..................... $22.4 $25.5 $15.7 $13.1 $19.1
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) On and after June 17, 1993, the advisor has waived part of the management fee to the extent such fee exceeds an
annual rate of 0.25% of the Money Market Portfolio's daily net asset value.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 12
BOND PORTFOLIO
OHIO NATIONAL FUND,INC.
OBJECTIVE:
The Bond Portfolio seeks to obtain a high level of income and opportunity for
capital appreciation consistent with preservation of capital.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 8.81%
Three-year 8.68%
Five-year 7.13%
Since inception (11/2/82) 8.60%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS:
This portfolio competes in Lipper's Variable Insurance Products BBB-rated bond
category and is running in the top third for the first half of the year. We have
not made any significant adjustments to the portfolio even though the bond
market has had a strong rally since April. We are concerned that present
momentum in the economy may begin to push interest rates higher and are
therefore keeping our portfolio mix the same -- presently concentrating on
corporate bonds with 5-10 year maturities.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
Bond Portfolio Lehman Bros. Government/
(Commenced operations November 2, 1982) Corp. Index-Intermediate
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
06/30/86 $10,000.00 06/30/86 $10,000.00
12/31/86 5.14% $10,514.00 12/31/86 5.11% $10,511.00
06/30/87 -0.15% $10,498.23 06/30/87 0.44% $10,557.25
12/31/87 0.96% $10,599.01 12/31/87 3.21% $10,896.14
06/30/88 3.35% $10,954.08 06/30/88 4.41% $11,376.66
12/31/88 3.28% $11,313.37 12/31/88 2.27% $11,634.91
06/30/89 5.74% $11,962.76 06/30/89 7.78% $12,540.10
12/31/89 4.70% $12,525.01 12/31/89 4.62% $13,199.45
06/30/90 3.11% $12,914.54 06/30/90 3.06% $13,520.91
12/31/90 4.56% $13,503.44 12/31/90 5.93% $14,322.70
06/30/91 4.45% $14,104.34 06/30/91 4.34% $14,944.30
12/31/91 8.15% $15,253.85 12/31/91 9.85% $16,416.32
06/30/92 3.43% $15,777.05 06/30/92 3.01% $16,910.45
12/31/92 3.97% $16,403.40 12/31/92 4.04% $17,593.63
06/30/93 7.74% $17,673.03 06/30/93 6.15% $18,675.64
12/31/93 2.74% $18,157.27 12/31/93 2.42% $19,127.59
06/30/94 -4.48% $17,343.82 06/30/94 -2.64% $18,622.62
12/31/94 0.67% $17,460.03 12/31/94 0.71% $18,754.84
06/30/95 11.92% $19,541.26 06/30/95 9.59% $20,553.43
12/31/95 6.24% $20,760.64 12/31/95 5.21% $21,624.27
06/30/96 -1.43% $20,463.76 06/30/96 -0.21% $21,578.86
12/31/96 5.21% $21,529.92 12/31/96 4.27% $22,500.27
06/30/97 3.42% $22,266.24 06/30/97 2.83% $23,137.03
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<S> <C> <C> <C>
1. Anixter 8.00% 9/15/03 5.1
2. Colonial 8.05% 7/15/06 4.8
3. Texas Utilities 7.48% 1/1/17 3.4
4. ITT Destinations 6.75% 11/15/05 3.4
5. Miss. Power & Light 8.80% 4/1/05 2.8
6. Great Lakes 8.90% 12/1/99 2.7
7. Pioneer 8.50% 8/1/06 2.7
8. GMAC 8.40% 10/15/99 2.6
9. U.S. Treasury Note 7.88% 11/15/99 2.6
10. Northwest Air 8.07% 1/2/15 2.6
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
Utilities 18.8
Oil, Energy & Natural Gas 12.2
Electrical Equipment 9.9
Real Estate 7.5
Transportation 5.5
</TABLE>
<PAGE> 13
OHIO NATIONAL FUND, INC.
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Long-Term Bonds & Notes Value
- ----------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (5.2%)
$500,000 U.S. Treasury Note
7.375% 11-15-97 $503,282
500,000 U.S. Treasury Note
7.875% 11-15-99 518,594
---------
1,021,876
---------
AUTOMOTIVE AND RELATED (3.2%)
100,000 Arvin Industries
10.000% 08-01-00 107,491
500,000 GMAC
8.400% 10-15-99 520,376
---------
627,867
---------
COMMUNICATIONS (2.4%)
200,000 Comcast Cable Communications
8.750% 05-01-07 213,104
250,000 Tele-Communications, Inc.
8.250% 01-15-03 257,473
---------
470,577
---------
COMPUTER AND RELATED (2.3%)
300,000 Apple Computer Inc.
6.500% 02-15-04 253,500
200,000 Comdisco, Inc.
7.750% 09-01-99 205,193
---------
458,693
---------
CONSUMER GOODS (2.6%)
200,000 RJR Nabisco Inc.
8.750% 04-15-04 203,890
300,000 RJR Nabisco Inc.
8.625% 12-01-02 307,336
---------
511,226
---------
ELECTRICAL EQUIPMENT (9.9%)
1,000,000 Anixter Intl
8.000% 09-15-03 1,017,331
500,000 Pioneer
8.500% 08-01-06 531,373
400,000 Tektronix Inc.
7.500% 08-01-03 406,213
---------
1,954,917
---------
FINANCIAL SERVICES (3.8%)
250,000 Aristar Inc.
5.750% 07-15-98 249,147
500,000 St. Paul Bancorp Inc.
7.125% 02-15-04 493,545
---------
742,692
---------
FORESTRY AND PAPER PRODUCTS (4.3%)
300,000 Boise Cascade Co.
9.850% 06-15-02 336,659
250,000 Champion International
7.700% 12-15-99 256,420
250,000 ITT Rayonier Inc.
7.500% 10-15-02 256,048
---------
849,127
---------
HOTEL/LODGING (4.9%)
$700,000 ITT Destinations
6.750% 11-15-05 $666,075
300,000 Marriott International
7.875% 04-15-05 311,429
--------
977,504
--------
GOVERNMENT (FOREIGN) (2.4%)
200,000 British Columbia
7.000% 01-15-03 203,320
250,000 Province of Quebec
8.625% 01-19-05 273,158
--------
476,478
--------
HOUSING, FURNITURE AND RELATED (0.9%)
140,000 Armstrong World
9.750% 04-15-08 168,118
--------
INSURANCE (3.3%)
250,000 Continental Corp.
7.250% 03-01-03 251,419
400,000 Transamerica Finance Corp.
7.500% 03-15-04 410,109
---------
661,528
---------
MEDICAL AND RELATED (2.8%)
250,000 Bergen Brunswig
7.375% 01-15-03 254,847
300,000 Cardinal Health Inc.
6.500% 02-15-04 293,083
---------
547,930
---------
METALS AND MINING (2.4%)
500,000 Cyprus Minerals
6.625% 10-15-05 479,438
---------
OIL, ENERGY AND NATURAL GAS (12.2%)
200,000 Atlantic Richfield
8.550% 03-01-12 224,808
100,000 DeKalb Energy
9.875% 07-15-00 107,056
400,000 Dresser Industries, Inc.
6.250% 06-01-00 397,914
125,000 Marathon Oil
7.000% 06-01-02 124,730
488,451 Mobile Energy Services Co.
8.665% 01-01-17 503,210
400,000 PDV America, Inc.
7.875% 08-01-03 406,400
140,000 Shell Oil Co.
6.950% 12-15-98 141,703
500,000 System Energy
7.800% 08-01-00 501,762
---------
2,407,583
---------
REAL ESTATE (7.5%)
300,000 Avalon Properties Inc.
7.375% 09-15-02 300,393
900,000 Colonial Realty
8.050% 07-15-06 939,047
250,000 Sun Communities
7.625% 05-01-03 249,463
---------
1,488,903
---------
</TABLE>
<PAGE> 14
OHIO NATIONAL FUND, INC.
BOND PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Long-Term Bonds & Notes Value
- ----------------------------------------------------------------
<S> <C> <C>
RESTAURANTS (2.4%)
$500,000 Wendy's Inc.
6.350% 12-15-05 $ 475,713
-----------
TRANSPORTATION (5.5%)
250,000 American President Cos., Ltd.
7.125% 11-15-03 244,365
350,000 Illinois Central Gulf Railroad
6.750% 05-15-03 347,139
496,025 Northwest Airlines
8.070% 01-02-15 509,214
-----------
1,100,718
-----------
UTILITIES (16.3%)
200,000 Cleveland Electric Illum.
7.625% 08-01-02 202,142
500,000 Great Lakes Power Inc.
8.900% 12-01-99 523,615
250,000 Kansas Gas & Electric
8.290% 03-29-16 252,083
550,000 Mississippi Power & Light
8.800% 04-01-05 558,354
375,000 New Orleans Public Service Co.
8.670% 04-01-05 383,159
200,000 Old Dominion Electric Co-op
8.760% 12-01-22 217,579
200,000 Sprint Corp.
8.125% 07-15-02 210,899
700,000 Texas Utilities Electric Co.
7.480% 01-01-17 677,262
200,000 Toledo Edison Co.
7.875% 08-01-04 202,823
-----------
3,227,916
-----------
TOTAL LONG-TERM BONDS & NOTES
(94.3%) (COST $18,380,251) $18,648,804
-----------
<CAPTION>
Market
Shares Preferred Stock Value
- ---------------------------------------------------------------
<S> <C> <C>
UTILITIES (2.5%)
12,000 GTE Delaware, 8.750%, Series B $ 318,000
6,500 Phillips Gas Co., 9.320% Series A 169,000
-----------
487,000
-----------
TOTAL PREFERRED STOCKS
(2.5%) (COST $462,500) $487,000
-----------
<CAPTION>
Face Market
Amount Short-Term Notes Value
- ---------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (0.6%)
$110,000 Ford Motor Credit Co.
5.520% 07-02-97 $ 109,983
-----------
FINANCE (0.6%)
120,000 Heller Financial
5.670% 07-07-97 119,887
-----------
RETAIL (1.7%)
335,000 Sears Roebuck Acceptance
5.480% 07-01-97 335,000
-----------
TOTAL SHORT-TERM NOTES
(2.9%) (COST $564,870) $564,870
-----------
TOTAL HOLDINGS
(COST $19,407,621)(A) $19,700,674
===========
</TABLE>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $19,407,621)...................$19,700,674
Cash in bank ........................................ 3,499
Receivable for fund shares sold...................... 427,920
Dividends and accrued interest receivable ........... 407,140
Other ............................................... 1,587
-----------
Total assets ....................................... 20,540,820
-----------
Liabilities:
Payable for investment management
services (note 3) .................................. 9,745
Dividends payable ................................... 321,924
Payable for shares redeemed ......................... 887
Other accrued expenses .............................. 1,887
-----------
Total liabilities .................................. 334,443
-----------
Net assets at market value $20,206,377
===========
Net assets consist of:
Par value, $1 per share ............................. $1,934,550
Paid-in capital in excess of par value .............. 18,016,704
Accumulated undistributed net realized
loss on investments (note 1) ....................... (48,736)
Net unrealized appreciation on investments (note 1).. 293,053
Undistributed net investment income ................. 10,806
-----------
Net assets at market value $20,206,377
===========
Shares outstanding (note 4)........................... 1,934,550
Net asset value per share............................. $10.45
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (Unaudited)
Investment income:
Interest............................................. $729,294
Dividends............................................ 20,697
-----------
Total investment income............................. 749,991
-----------
Expenses:
Management fees (note 3)............................. 59,023
Custodian fees (note 3).............................. 2,319
Directors' fees (note 3)............................. 516
Professional fees.................................... 1,686
Fund accounting fees ................................ 6,932
Other................................................ 4,508
-----------
Total expenses...................................... 74,984
-----------
Net investment income .............................. $675,007
===========
Realized and unrealized gain (loss) on investments:
Net realized gain from investments ........ ......... $33,965
Net decrease in unrealized
appreciation on investments ........................ (45,656)
-----------
Net loss on investments............................ (11,691)
-----------
Net increase in net
assets from operations............................. $663,316
============
</TABLE>
The accompanying Notes are an integral part of these financial statements.
<PAGE> 16
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- -----------
<S> <C> <C>
From operations:
Net investment income ....................................................... $675,007 $1,278,401
Realized gain on investments ................................................ 33,965 2,392
Unrealized loss on investments .............................................. (45,656) (518,569)
-------------- -----------
Net increase in assets from operations..................................... 663,316 762,224
-------------- -----------
Dividends and distributions to shareholders:
Dividends declared .......................................................... (1,002,573) (1,230,887)
-------------- -----------
From capital share transactions (note 4):
Received from shares sold ................................................... 4,543,690 6,923,633
Received from dividends reinvested .......................................... 1,002,573 1,230,887
Paid for shares redeemed .................................................... (5,779,516) (4,971,363)
-------------- -----------
Increase (decrease) in net assets derived from capital share transactions... (233,253) 3,183,157
Increase (decrease) in net assets ........................................ (572,510) 2,714,494
Net Assets:
Beginning of period ......................................................... 20,778,887 18,064,393
-------------- -----------
End of period (a) ........................................................... $20,206,377 $20,778,887
============= ============
(a) Includes undistributed net investment income of.......................... $10,806 $338,373
============= ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months
Ended Years Ended December 31,
June 30, 1997 1996 1995 1994 1993
------------- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period...................... $10.62 $10.93 $9.70 $10.87 $10.45
Income (loss) from investment operations:
Net investment income................................... 0.36 0.69 0.70 0.67 0.69
Net realized and unrealized gain (loss) on investments . 0.00 (0.32) 1.08 (1.07) 0.41
------------- ------ ------ ------ -------
Total income (loss) from investment operations........ 0.36 0.37 1.78 (0.40) 1.10
------------- ------ ------ ------ -------
Less distributions:
Dividends declared ..................................... (0.53) (0.68) (0.55) (0.69) (0.68)
Distributions from net realized capital gains........... 0.00 0.00 0.00 (0.08) 0.00
------------- ------ ------ ------ -------
Total distributions................................... (0.53) (0.68) (0.55) (0.77) (0.68)
------------- ------ ------ ------ -------
Net asset value, end of period............................ $10.45 $10.62 $10.93 $9.70 $10.87
============= ====== ====== ====== =======
Total return.............................................. 3.42%(b) 3.71% 18.90% (3.84%) (10.69%)
Ratios and supplemental data:
Ratio of expenses to average net assets ................ 0.75%(a) 0.79% 0.75% 0.63% 0.62%
Ratio of net investment income to average net assets ... 6.78%(a) 6.54% 6.76% 6.71% 6.33%
Portfolio turnover rate................................... 0% 3% 4% 5% 13%
Net assets at end of period (millions).................... $20.2 $20.8 $18.1 $13.1 $12.0
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 17
OMNI PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE:
The Omni Portfolio seeks a high level of long-term total rate of return
consistent with prudent investment risks. Total return consists of current
income and capital appreciation.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 19.51%
Three-year 17.31%
Five-year 13.57%
Since inception (9/10/84) 11.99%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS:
The financial markets, primarily the equity markets, have experienced tremendous
growth over the past 12 months. This surge is the result of strong corporate
profits, low inflation, moderate interest rates and tremendous cash flows into
the markets. The leaders in this upward move have been large capitalization
stocks. Most funds that invest in the small, medium, or a blend of market
capitalization size issues have not kept pace with the Dow or the S&P 500 Index
or related funds. The have, for the most part, provided respectable returns.
Going forward, it looks as though the economy could strengthen somewhat into the
second half of this year. Interest rates could move up some, but probably not
much unless inflation concerns surface. With stock valuations at high levels,
continued positive cooperate earnings growth will be necessary for the market to
maintain its current levels or to move up.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
Omni Portfolio
(Commenced operations September 10, 1984) S&P 500 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
06/30/86 $10,000.00 06/30/86 $10,000.00
12/31/86 -1.35% $9,865.00 12/31/86 -1.94% $9,806.00
06/30/87 9.46% $10,798.23 06/30/87 27.56% $12,508.53
12/31/87 -10.18% $9,698.97 12/31/87 -17.51% $10,318.29
06/30/88 11.32% $10,796.89 06/30/88 12.86% $11,645.22
12/31/88 3.34% $11,157.51 12/31/88 3.50% $12,052.80
06/30/89 9.89% $12,260.99 06/30/89 16.44% $14,034.29
12/31/89 5.07% $12,882.62 12/31/89 12.92% $15,847.51
06/30/90 3.30% $13,307.74 06/30/90 3.08% $16,335.62
12/31/90 -1.35% $13,128.09 12/31/90 -6.06% $15,345.68
06/30/91 6.73% $14,011.61 06/30/91 14.32% $17,543.18
12/31/91 10.70% $15,510.85 12/31/91 14.19% $20,032.56
06/30/92 1.45% $15,735.76 06/30/92 -0.64% $19,904.35
12/31/92 7.05% $16,845.13 12/31/92 8.36% $21,568.35
06/30/93 6.80% $17,990.60 06/30/93 4.82% $22,607.95
12/31/93 5.67% $19,010.67 12/31/93 4.93% $23,722.52
06/30/94 -3.14% $18,413.73 06/30/94 -3.42% $22,911.21
12/31/94 2.69% $18,909.06 12/31/94 4.90% $24,033.86
06/30/95 13.47% $21,456.11 06/30/95 20.15% $28,876.68
12/31/95 8.19% $23,213.37 12/31/95 14.38% $33,029,15
06/30/96 7.16% $24,875.45 06/30/96 10.20% $36,398.12
12/31/96 7.82% $26,820.71 12/31/96 11.69% $40,653.06
06/30/97 10.84% $29,728.07 06/30/97 20.50% $48,986.94
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
1. Camco International Inc. 1.5
2. American International GP 1.4
3. Hewlett-Packard 1.3
4. Ford Motor Co. 1.3
5. Burlington Northern Santa Fe 1.3
6. Owens-Illinois Inc. 1.3
7. Cisco Systems 1.2
8. Chubb Corp. 1.2
9. Intel Corp. 1.2
10. Cincinnati Financial Corp. 1.2
<CAPTION>
% of Portfolio
<S> <C>
Oil, Energy & Natural Gas 11.5
Computer and Related 8.9
Insurance Services 6.0
Electrical Equipment 5.1
Banking 5.0
</TABLE>
<PAGE> 18
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Long-Term Bonds & Notes Value
- -------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (2.0%)
$775,000 U.S. Treasury Note
6.375% 07-15-99 $779,602
500,000 U.S. Treasury Note
7.875% 11-15-99 518,594
2,005,000 U.S. Treasury Note
7.750% 02-15-01 2,098,359
------------
3,396,555
------------
AEROSPACE (0.3%)
500,000 AAR Corp.
7.250% 10-15-03 489,260
------------
BANKING (0.9%)
400,000 Citfed Bancorp Inc.
8.250% 03-01-03 399,737
1,000,000 Green Tree Financial Cl. A6
8.700% 06-15-25 1,075,650
------------
1,475,387
------------
COMMUNICATIONS (1.2%)
1,600,000 Comcast Cable Communications
8.375% 05-01-07 1,704,835
300,000 Sprint
8.125% 07-15-02 316,349
------------
2,021,184
------------
COMPUTERS AND RELATED (0.3%)
700,000 Apple Computer, Inc.
6.500% 02-15-04 591,500
------------
CONSUMER GOODS (0.2%)
400,000 RJR Nabisco, Inc.
8.750% 04-15-04 407,781
------------
FORESTRY AND PAPER PRODUCTS (0.9%)
700,000 Boise Cascade Co.
9.850% 06-15-02 785,537
500,000 Champion International
9.875% 06-01-00 542,556
250,000 ITT Rayonier, Inc.
7.500% 10-15-02 256,048
------------
1,584,141
------------
HOUSING, FURNITURE AND RELATED (0.2%)
250,000 Armstrong World
9.750% 04-15-08 300,211
------------
INSURANCE (0.6%)
500,000 Continental Corp.
7.250% 03-01-03 502,839
600,000 Transamerica Finance Corp.
7.500% 03-15-04 615,164
------------
1,118,003
------------
MACHINERY (0.3%)
500,000 ABC Rail Products Corp.
9.125% 01-15-04 485,000
------------
MEDICAL AND RELATED (0.9%)
$500,000 Bergen Brunswig
7.375% 01-15-03 $509,695
1,000,000 Tenet Healthcare Corp.
8.625% 01-15-07 963,750
----------
1,473,445
----------
METALS AND MINING (0.3%)
500,000 Cyprus Minerals
6.625% 10-15-05 479,438
----------
OIL, ENERGY AND NATURAL GAS (1.6%)
400,000 Dekalb Energy
9.875% 07-15-00 428,224
350,000 Dresser Industries, Inc.
6.250% 06-01-00 348,174
375,000 Marathon Oil
7.00% 06-01-02 374,190
600,000 PDV America, Inc.
7.875% 08-01-03 609,599
500,000 United Refining Company
10.750% 06-15-07 495,000
500,000 Union Texas Petroleum
8.250% 11-15-99 518,421
----------
2,773,608
----------
TRANSPORTATION (0.5%)
500,000 American President Cos., Ltd.
7.125% 11-15-03 488,730
400,000 Illinois Central Gulf Railroad
6.750% 05-15-03 396,730
----------
885,460
----------
UTILITIES (1.7%)
400,000 Cleveland Electric Illum.
7.625% 08-01-02 404,283
1,000,000 Great Lakes Power
9.000% 08-01-04 1,069,779
500,000 Mississippi Power & Light
8.800% 04-01-05 507,595
400,000 Old Dominion Elec. Co.
8.760% 12-01-22 435,157
500,000 Texas New Mexico Power Co.
9.250% 09-15-00 518,940
----------
2,935,754
----------
TOTAL LONG-TERM BONDS & NOTES
(11.9%) (COST $19,972,976) $20,416,727
-----------
<CAPTION>
Face Market
Amount Short-Term Notes Value
- ---------------------------------------------------------------------
Automotive and Related (3.7%)
$3,420,000 General Motors Acceptance Corp.
5.580% 07-08-97 $ 3,416,289
2,945,000 Ford Motor
5.540% 07-14-97 2,939,109
-----------
6,355,398
Electrical Equipment (1.7%) -----------
2,945,000 General Electric Capital
5.560% 07-11-97 2,940,452
</TABLE> -----------
<PAGE> 19
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Short-Term Notes Value
- --------------------------------------------------------------------------
<S> <C> <C>
FINANCE (9.5%)
$4,000,000 American Express Credit Corp.
5.540% 07-09-97 $3,995,076
3,938,000 Associates Corp.
5.540% 07-10-97 3,932,546
4,295,000 Heller Financial
5.370% 07-01-97 4,295,000
1,425,000 Household Finance
5.460% 07-02-97 1,424,784
2,630,000 Household Finance
5.500% 07-02-97 2,629,598
-----------
16,277,004
-----------
RETAIL (2.3%)
3,900,000 Sears Roebuck Acceptance Corp.
5.620% 07-07-97 3,896,346
-----------
TOTAL SHORT-TERM NOTES
(17.2%) (COST $29,469,200) $29,469,200
-----------
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (2.4%)
22,000 Allied Signal, Inc. $1,848,000
1,456 Boeing Co. 77,259
21,600 Raytheon Co. 1,101,600
17,350 Rockwell International Corp. 1,023,650
-----------
4,050,509
-----------
AUTOMOTIVE AND RELATED (3.0%)
7,500 Arvin Industries, Inc. 204,375
11,700 Chrysler Corp. 383,906
17,000 Cooper Tire & Rubber 374,000
8,000 Eaton Corp. 698,500
58,777 Ford Motor Co. 2,218,832
10,000 Magna International, Inc. 601,875
34,000 Walbro Corp. 688,500
-----------
5,169,988
-----------
BANKING (3.1%)
13,650 Charter One Financial, Inc. 735,394
25,000 * Flagstar Bancorp 406,250
10,000 First Union Corp. 925,000
17,500 Long Island Bancorp, Inc. 635,469
22,500 Mellon Bank Corp. 1,015,312
13,050 * NationsBank Corporation 841,725
7,000 Star Banc 295,750
12,500 Susquehanna Bancshares, Inc. 490,625
-----------
5,345,525
-----------
BUSINESS SERVICES (3.6%)
37,000 * Alternative Resources Co. 753,875
40,000 First Data Corp. 1,757,500
41,000 Hewlett-Packard Co. 2,296,000
27,000 Manpower, Inc. 1,201,500
5,000 Standard Register Co. 153,125
-----------
6,162,000
-----------
<CAPTION>
Market
Shares Common Stock Value
- ----------------------------------------------------------------------------
<S> <C> <C>
CHEMICALS (2.9%)
5,000 E I DuPont DeNemours & Co. $314,375
18,000 Engelhard Corp. 376,875
5,625 Hanson Trust PLC 140,625
30,000 Learonal Inc. 855,000
12,000 Lubrizol Corp. 503,250
20,000 Minerals Technologies Inc. 750,000
15,000 Monsanto Co. 645,938
39,000 OM Group, Inc. 1,291,875
-----------
4,877,938
-----------
COMMUNICATIONS (1.2%)
54,000 * Andrew Corp. 1,518,750
11,250 * Mastec, Inc. 532,266
-----------
2,051,016
-----------
COMPUTER AND RELATED (8.4%)
21,525 * 3Comm Corp. 968,625
30,000 * Cisco Systems, Inc. 2,013,750
23,000 Computer Associates 1,280,813
6,600 * Computer Sciences Corp. 476,025
14,000 Intel Corp. 1,985,375
55,000 MacNeal-Schwendler Corp. 598,125
10,000 * Microsoft Corp. 1,263,750
47,058 * Seagate Technology, Inc. 1,655,853
40,000 * Sun Microsystems, Inc. 1,488,752
18,000 Texas Instruments, Inc. 1,513,125
42,000 * Zebra Tech Corp. Cl. A 1,170,750
-----------
14,414,943
-----------
CONSUMER PRODUCTS (0.9%)
30,000 * Acorn Products 420,000
20,000 * Sola International 670,000
12,000 Stanhome Inc. 394,500
-----------
1,484,500
-----------
CONTAINERS (1.3%)
70,000 * Owens-Illinois, Inc. 2,170,000
-----------
DRUGS (1.1%)
28,000 Abbott Laboratories 1,869,000
-----------
DURABLE GOODS (0.4%)
45,000 Versa Technologies 708,750
-----------
ELECTRICAL EQUIPMENT (4.8%)
33,333 * Analog Devices, Inc. 885,408
30,000 * Anixter International, Inc. 515,625
37,000 BMC Industries Inc. 1,267,250
26,116 Federal Signal Corp. 656,165
28,000 General Electric Co. 1,830,500
18,000 Varian Associates, Inc. 976,500
40,000 Westinghouse Electric 925,000
15,000 Xerox Corp. 1,183,124
-----------
8,239,572
-----------
ENTERTAINMENT AND LEISURE (1.4%)
33,000 Cedar Fair 1,443,750
36,000 * Mirage Resorts Inc. 909,000
-----------
2,352,750
-----------
</TABLE>
<PAGE> 20
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------------------
<S> <C> <C>
FOOD AND RELATED (1.3%)
50,000 Food Lion Inc. Cl. A $357,815
16,500 H.J. Heinz Co. 761,063
23,000 PanAmerican Beverages, Inc. 756,125
15,000 Smart & Final, Inc. 367,500
----------
2,242,503
----------
FORESTRY AND PAPER PRODUCTS (0.7%)
38,000 Sonoco Products Inc. 1,156,625
----------
HOTEL/LODGING (0.7%)
25,000 * Guest Supply 237,500
16,000 * ITT Corp. 977,000
----------
1,214,500
----------
HOUSING, FURNITURE & RELATED (1.8%)
71,025 Clayton Homes 1,012,106
55,000 Haverty Furniture Co. 687,500
24,000 Newell Co. 951,000
35,000 Shelby Williams 476,875
----------
3,127,481
----------
INDUSTRIAL SERVICES (0.5)
18,500 * Canisco Resources Inc. 32,375
30,000 Clarcor 742,500
1,600 Regal Beloit 41,900
----------
816,775
----------
INSURANCE (5.4%)
5,905 Aegon NV 623,907
16,125 American International Group 2,408,672
30,000 Chubb Corp. 2,006,250
24,806 Cincinnati Financial Corp. 1,959,674
20,000 Equitable Cos., Inc. 665,000
20,500 * Providian Corporation 658,563
12,500 St. Paul Cos. 953,125
----------
9,275,191
----------
MACHINERY (1.4%)
6,000 Caterpillar, Inc. 644,250
33,000 Hardinge Inc. 965,250
28,000 Stewart & Stevenson 728,000
----------
2,337,500
----------
MEDIA AND PUBLISING (0.0%)
7,500 * Granite Broadcasting Corp. 76,875
----------
METALS AND MINING (0.7%)
27,000 Amcast Industrial Corp. 675,000
4,000 Phelps Dodge Corp. 340,750
6,200 * Wolverine Tube Inc. 172,825
----------
1,188,575
----------
MEDICAL AND RELATED (3.0%)
20,300 Allegiance Corp. 553,175
26,500 Baxter International 1,384,625
20,000 * Cephalon 230,000
32,500 * Foundation Health Corp. 985,156
18,000 * Humana, Inc. 416,250
16,000 * Quorum Health Group Inc. 572,000
19,000 United Healthcare Corp. 988,000
----------
5,129,206
----------
OIL, ENERGY AND NATURAL GAS (9.2%)
32,500 * Belco Oil & Gas $696,719
45,500 Camco International, Inc. 2,491,125
23,000 Chevron Corp. 1,700,563
7,000 Coastal Corp. 372,312
46,000 * Louis Dreyfus Natural Gas 747,500
50,000 Monterey Resources 743,750
32,200 National Propane Partners 656,075
17,500 * Offshore Logistics Inc. 330,313
30,000 Pacific Gulf Properties 660,000
10,000 Schlumberger, Ltd. 1,250,000
60,300 * Tesoro Petroleum 893,194
20,625 The Energy Group 873,984
24,150 Ultramar Diamond Shamrock, Inc. 787,894
11,600 WD-40 Co. 696,000
45,000 Westcoast Energy, Inc. 818,436
28,500 Williams Cos. Inc. 1,246,875
46,000 Wiser Oil 848,125
------------
15,812,865
------------
REAL ESTATE (3.3%)
76,300 Commercial Net Lease Realty 1,168,344
30,500 First Industrial Realty Trust 892,125
15,000 Great Lakes REIT 246,563
50,000 Healthcare Realty Trust 1,393,750
43,250 Liberty Property Trust 1,075,843
24,000 National Health Investors, Inc. 942,000
------------
5,718,625
------------
RESTAURANTS (0.2%)
50,000 * Buffets, Inc. 421,875
------------
TEXTILES (0.2%)
13,000 Warnaco Group Class A 414,375
------------
TRANSPORTATION AND EQUIPMENT (3.1%)
24,255 Burlington Northern Santa Fe 2,179,918
15,000 CNF Transportation 483,750
7,500 * Consolidated Freightways Corp. 122,812
24,000 Greenbrier Companies, Inc. 271,500
7,308 * Halter Marine Group 175,392
11,250 Illinois Central Corp. 393,047
10,000 Norfolk Southern Corp. 1,007,500
21,000 Trinity Industries 666,750
------------
5,300,669
------------
UTILITIES (0.6%)
6,000 Entergy Corp. 164,250
15,000 FPL Group, Inc. 690,938
7,000 Montana Power Co. 162,311
------------
1,017,499
------------
TOTAL COMMON STOCKS
(66.8%) (COST $67,420,092) $114,147,630
------------
<CAPTION>
Market
Shares Warrants Value
- --------------------------------------------------------------------------
<S> <C> <C>
2,000 * Plastic Speciatites and Tech. $2,000
TOTAL WARRANTS (0.0%)
(COST $0) $2,000
------------
</TABLE>
<PAGE> 21
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Preferred Stock Value
- --------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (0.1%)
8,000 Walbro Cap Trust $229,000
------------
BANKING (0.7%)
30,000 National Australia Bank 838,125
11,000 Money Store Pfd. 6.500% 299,750
------------
1,137,875
------------
COMPUTERS AND RELATED (0.2%)
16,000 General Datacommunications,
9.000% Pfd. 346,000
------------
FOOD & RELATED (0.3%)
20,000 Conagra Capital LC, 9.350% cum.,
conv. Series C 527,500
------------
METALS AND MINING (0.6%)
30,000 Freeport McMoRan Copper & Gold
cum., conv. 926,250
------------
OIL, ENERGY AND NATURAL GAS (0.4%)
10,000 Howell Corp., $3.50 Series A 600,000
------------
REAL ESTATE (0.2%)
15,000 Oasis Residential , Inc., 9.000%
cum., conv. Series A 388,125
------------
UTILITIES (0.6%)
20,000 GTE Delaware 8.750%, Series B 530,000
22,000 Phillips Gas Co. 9.320% Series A 572,000
------------
1,102,000
------------
TOTAL PREFERRED STOCKS
(3.1%) (COST $5,159,538) $5,256,750
------------
<CAPTION>
Face Market
Amount Convertible Debentures Value
- ---------------------------------------------------------------------------
<S> <C> <C>
BANKING (0.3%)
$400,000 First State Bancorp, 7.500% conv.
debentures due 04-30-17 $433,500
------------
ELECTRICAL EQUIPMENT (0.3%)
500,000 Richey Electric, 7.000% conv.
debentures, due 03-01-06 448,125
------------
METALS AND MINING (0.4%)
600,000 INCO, Ltd., 7.750% conv. subordinated
debentures, due 03-15-16 612,750
------------
OIL, ENERGY AND NATURAL GAS (0.3%)
600,000 Offshore Logistics, Inc., 6.000%
conv. debentures, due 12-15-06 643,500
------------
TOTAL CONVERTIBLE DEBENTURES
(1.3%) (COST $2,100,624) $2,137,875
------------
TOTAL HOLDINGS
(COST $124,122,430)(a) $171,430,182
============
</TABLE>
* Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 22
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $124,122,430)..................$171,430,182
Cash in bank ........................................ 6,383
Receivable for fund shares sold...................... 1,469,844
Dividends and accrued interest receivable ........... 623,338
Other ............................................... 20,749
------------
Total assets ....................................... 173,550,496
------------
Liabilities:
Payable for investment management
services (note 3) .................................. 77,183
Other accrued expenses .............................. 14,877
Dividends payable ................................... 1,097,917
------------
Total liabilities .................................. 1,189,977
------------
Net assets at market value $172,360,519
============
Net assets consist of:
Par value, $1 per share .............................$ 8,263,884
Paid-in capital in excess of par value .............. 115,798,816
Accumulated undistributed net realized
gain on investments ................................ 964,712
Net unrealized appreciation on investments (note 1).. 47,307,752
Undistributed net
investment income .................................. 25,355
------------
Net assets at market value $172,360,519
============
Shares outstanding (note 4)........................... 8,263,884
Net asset value per share............................. $20.86
============
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (Unaudited)
Investment income:
Interest.............................................$ 1,575,706
Dividends............................................ 1,101,480
------------
Total investment income............................. 2,677,186
------------
Expenses:
Management fees (note 3)............................. 436,655
Custodian fees (note 3).............................. 17,339
Directors' fees (note 3)............................. 3,711
Professional fees.................................... 12,167
Fund accounting fees ................................ 48,013
Other................................................ 20,217
------------
Total expenses...................................... 538,102
------------
Net investment income...............................$ 2,139,084
============
Realized and unrealized gain on investments:
Net realized gain from investments ..................$ 964,712
Net increase in unrealized
appreciation on investments ........................ 13,328,149
------------
Net gain on investments............................ 14,292,861
------------
Net increase in net
assets from operations............................. $16,431,945
============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 23
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
OMNI PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- ------------
<S> <C> <C>
From operations:
Net investment income ................................................$ 2,139,084 $ 3,688,175
Realized gain on investments ......................................... 964,712 1,460,737
Unrealized gain on investments ....................................... 13,328,149 13,387,967
------------ ------------
Net increase in assets from operations.............................. 16,431,945 18,536,879
------------ ------------
Dividends and distributions to shareholders:
Dividends declared ................................................... (3,128,153) (3,564,088)
Capital gains distributions .......................................... (1,460,737) (1,956,755)
------------ ------------
Total dividends and distributions .................................. (4,588,890) (5,520,843)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ............................................ 19,152,523 25,730,422
Received from dividends reinvested ................................... 4,588,890 5,520,843
Paid for shares redeemed ............................................. (8,691,639) (8,376,827)
------------ ------------
Increase in net assets derived from capital share transactions....... 15,049,774 22,874,438
Increase in net assets ............................................ 26,892,829 35,890,474
Net Assets:
Beginning of period .................................................. 145,467,690 109,577,216
------------ ------------
End of period (a) ....................................................$172,360,519 $145,467,690
============ ============
(a) Includes undistributed net investment income of..................$ 25,355 $ 1,014,424
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months
Ended Years Ended December 31,
June 30, 1997 1996 1995 1994 1993
------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................... $ 19.40 $ 17.60 $ 14.76 $15.38 $14.14
Income (loss) from investment operations:
Net investment income........................................ 0.27 0.53 0.58 0.55 0.58
Net realized and unrealized gain (loss) on investments ...... 1.78 2.10 2.72 (0.63) 1.21
------- ------- ------- ------ ------
Total income (loss) from investment operations............. 2.05 2.63 3.30 (0.08) 1.79
------- ------- ------- ------ ------
Less distributions:
Dividends declared .......................................... (0.40) (0.52) (0.46) (0.54) (0.55)
Distributions from net realized capital gains ............... (0.19) (0.31) 0.00 0.00 0.00
------- ------- ------- ------ ------
Total distributions........................................ (0.59) (0.83) (0.46) (0.54) (0.55)
------- ------- ------- ------ ------
Net asset value, end of period................................. $ 20.86 $ 19.40 $17.60 $14.76 $15.38
======= ======= ======= ====== ======
Total return................................................... 10.84%(b) 15.54% 22.75% 0.53% 12.85%
Ratios and supplemental data:
Ratio of expenses to average net assets ..................... 0.69%(a) 0.76% 0.75% 0.62% 0.62%
Ratio of net investment income to average net assets ........ 2.74%(a) 2.89% 3.56% 3.67% 3.74%
Portfolio turnover rate........................................ 7%(b) 12% 10% 7% 17%
Average commission rate (c) ................................... $ 0.07 $ 0.07 N/A N/A N/A
Net assets at end of period (millions)......................... $ 172.4 $ 145.5 $ 109.6 $ 85.0 $ 74.2
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security transactions divided by the total number
of shares purchased and sold for which commissions were charged.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 24
INTERNATIONAL PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE:
The International Portfolio seeks long-term capital growth by investing
primarily in securities of foreign companies.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 15.19%
Three-year 13.48%
Five-year N/A
Since inception (5/3/93) 17.22%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS:
Most European markets were strong performers, ending the quarter at all-time
highs. In April, stocks were affected by U.S. market volatility and a lower U.S.
dollar. Reemerging EMU uncertainties with respect to Germany's and France's
ability to meet Maastricht criteria by 1999, volatile foreign exchange and bond
markets caused equities to decline. In May, markets recovered, supported by a
firmer U.S. dollar, higher bond prices, and the release of positive economic
data. Political issues impacted certain local markets. In June, the endorsement
of a stability pact on budgetary discipline at the Amsterdam Meeting of EU
leaders and the conclusion of the Denver G-8 summit without major surprises
provided additional support for European markets.
The Japanese market weakened at the beginning of the period reflecting concerns
over further asset write-downs in the property and banking sectors and sluggish
consumer demand. By the end of April, equities recovered due to growing optimism
for structural reforms and expectations that interest rates would remain low. In
May, a stronger Yen and a scandal in the securities industry caused market
volatility. However, as the Yen stabilized and encouraging economic news emerged
in June, that market strengthened. Equities in Hong Kong rose sharply and South
Korean shares recovered to finish the quarter up. Singapore issues were
negatively impacted by turmoil in other Southeast Asian economies. The release
of positive economic data and higher bond prices buoyed the New Zealand and
Australian markets.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
International Portfolio
(Commenced operations May 3, 1993) Morgan Stanley Captl. Intl. EAFE Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
05/01/93 $10,000.00 05/01/93 $10,000.00
06/30/93 -0.64% $9,936.00 06/30/93 0.52% $10,052.00
12/31/93 25.77% $12,496.51 12/31/93 7.70% $10,826.00
06/30/94 6.06% $13,253.80 06/30/94 8.82% $11,791.68
12/31/94 1.89% $13,504.29 12/31/94 -0.79% $11,698.53
06/30/95 5.80% $14,287.54 06/30/95 2.76% $12,021.41
12/31/95 5.96% $15,139.08 12/31/95 8.55% $13,049.24
06/30/96 11.05% $16,811.95 06/30/96 4.67% $13,658.64
12/31/96 3.09% $17,331.44 12/31/96 1.62% $13,879.91
06/30/97 11.74% $19,366.15 06/30/97 11.36% $15,456.67
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Porffolio
<S> <C>
1. Secom Co., Ltd. 2.0
2. Tokyo Marine & Fire Ins. Co. 2.0
3. Buderus AG 2.0
4. Fuji Photo Film Co., Ltd. 1.9
5. Bank for International Settlements 1.6
6. Carter Holt Harvey 1.4
7. Legrand ADP 1.4
8. Noranda Inc. 1.3
9. Antofagasta Holdings 1.3
10. ITO-Yokado 1.3
<CAPTION>
% of Portfolio
<S> <C>
Japan 20.4
France 10.2
Germany 6.9
Switzerland 6.9
New Zealand 4.1
</TABLE>
The risk associated with investing on a worldwide basis includes differences in
regulation of financial data and reporting and currency exchanges as well as
economic and political systems which may be different from those in the United
States. The prices of small company stocks are generally more volatile than
the prices of large company stocks.
<PAGE> 25
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
International Portfolio
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
JAPAN (20.4%)
165,000 Aida Engineering Limited (19) $1,083,668
38,230 Chofu Seisakusho (9) 1,044,358
300,000 Dai-Tokyo Fire Marine Ins. Co. Ltd. (18) 1,739,738
250,000 Dowa Fire & Marine Ins. Co. Ltd. (18) 1,242,358
75,000 Fuji Photo Film Co., Ltd. (9) 3,019,651
13,500 Hitachi Ltd. ADR (11) 1,525,500
325,000 * Iino Kaiun Kaisha (5) 996,288
35,000 Ito-Yokado Co. Ltd. (28) 2,032,751
175,000 Koa Fire & Marine Ins. Co., Ltd. (18) 1,059,170
275,000 Nichido Fire & Marine Ins. Co., Ltd. (18) 2,007,860
165,000 Nisshinbo Industries Inc. (8) 1,498,690
125,000 Nittetsu Mining Co., Ltd. (22) 977,074
45,000 Secom Co., Ltd. (29) 3,305,240
85,000 Shimano Inc. (9) 1,781,659
105,000 Shiseido Company (9) 1,733,188
100,000 Sotoh Co. (31) 986,900
155,000 Shoei Co. (27) 1,841,048
10,000 Toho Co. (20) 1,650,655
250,000 Tokyo Marine & Fire Ins. Co. Ltd. (18) 3,275,109
15,000 Tsutsumi Jewelry Co. (9) 379,913
------------
33,180,818
------------
FRANCE (10.2%)
2,500 C.E.E. (Continentale d'Equipments
Electriques) (10) 72,332
5,500 Compagnie Generale des Eaux (33) 704,852
1,887 Compagnie Generale des Eaux
Nouvelle (33) 238,296
7,800 Crometal (5) 438,075
12,000 Elf Aquitaine (12) 1,294,824
16,500 Emin Leydier (24) 1,159,496
25,000 Eramet (22) 1,153,054
3,500 Eurafrance (34) 1,435,574
10,000 Gaumont SA (20) 730,126
6,396 Groupe NSC (19) 827,299
3,500 La Brosse et DuPont (9) 244,226
18,500 Legrand ADP (10) 2,320,489
15,000 Marine Wendel (34) 1,531,732
12,000 CGDE Michelin 'B' (34) 720,731
2,500 Promodes C.I. (28) 803,734
1,000 Promodes (28) 389,571
2,500 SAGA (Societe Anontme de Gerance et
d'Armement) (32) 956,652
1,000 Sucriere de Pithiviers-le-Vieil (1) 602,481
3,500 Taittinger (13) 968,565
------------
16,592,109
------------
GERMANY (5.8%)
40,000 Bayer AG (7) 1,542,036
10,000 Bertelsmann AG D.R.C. (25) 1,181,769
5,750 Buderus AG (5) 3,193,070
7,000 Degussa AG (28) 370,249
50,000 Gerresheimer Glas AG (4) 838,998
30,000 IVG Holding AG (27) 1,032,613
1,500 Axel Springer Verlag AG (20) 1,333,792
------------
9,492,527
------------
SWITZERLAND (6.9%)
365 Bank of Intl. Settlements (3) $2,563,378
5,500 Edipresse SA Bearer (20) 1,300,103
2,650 Kuehne & Nagel Intl. AG (32) 1,634,121
400 Lindt & Sprungli AG PC (9) 739,979
1,000 Nestle SA (9) 1,319,630
6,500 Sika Finanz AG Bearer (7) 2,039,740
4,250 Societe Generale d'Affichage (20) 1,543,337
735 Vetropack Holding AG PC (23) 128,921
------------
11,269,209
------------
NEW ZEALAND (4.1%)
900,549 Carter Holt Harvey Limited (14) 2,335,029
1,000,000 * Evergreen Forests Ltd. (14) 394,719
278,500 Independent Press Comm. (20) 1,582,602
1,601,500 Shortland Properties, Ltd. (27) 1,089,901
1,820,310 Tasman Agriculture Limited (1) 1,090,155
450,000 Wrightson Ltd. (1) 287,873
------------
6,780,279
------------
LATIN AMERICA (3.6%)
275,000 Antofagasta Holdings plc (21) 2,097,466
35,000 Banco Latinoamericano 'Bladex' (3) 1,509,375
681,944 Ledesma SA (1) 818,451
550,000 Siderca S.A.I.C. (12) 1,416,455
------------
5,841,747
------------
CANADA (3.5%)
65,000 Canadian Pacific Ltd. (34) 1,848,438
35,000 Dofasco, Inc. (30) 662,768
20,000 Franco-Nevada Mining Corp. (21) 1,002,933
100,000 Noranda, Inc. (21) 2,154,314
------------
5,668,453
------------
SWEDEN (2.8%)
65,000 AssiDoman AB (14) 1,853,292
45,000 Bylock & Nordsjofrakt AB 'B' (32) 207,037
45,000 Gorthon Lines 'B' (32) 263,025
25,000 Investor AB Class B (34) 1,320,308
75,000 IRO AB (31) 918,546
------------
4,562,208
------------
HONG KONG (2.8%)
4,362,194 CDL Hotels Intl. Ltd. (16) 1,773,707
1,650,000 Shaw Brothers (Hong Kong) Ltd.(20) 1,852,975
1,000,000 South China Morning Post Holdings
Corp. (25) 981,025
------------
4,607,707
------------
NETHERLANDS (2.3%)
30,000 Apothekers Cooperatie OPG (17) 1,032,163
52,000 German City Estates NV (27) 712,982
15,000 Philips Electronics NV ADR (11) 1,078,125
8,500 Randstad Holdings NV (29) 896,835
------------
3,720,105
------------
SINGAPORE (2.2%)
250,000 Clipsal Industries Ltd. (10) 885,000
700,000 Intraco Ltd. (34) 930,265
175,000 Singapore Bus Service Ltd. (32) 838,463
450,000 Times Publishing Ltd. (25) 1,007,204
------------
3,660,932
------------
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
- -----------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (1.9%)
300,000 Berisford plc (34) $708,651
75,000 ED & F Man Group plc (34) 247,030
450,000 * McBride plc (10) 1,014,319
285,000 Royal Doulton plc (9) 1,111,759
------------
3,081,759
------------
ITALY (1.5%)
200,000 Arnoldo Mondadori Editore SpA (25) 1,157,336
2,000,000 * Montedison non-conv. Savings SpA(34) 1,296,406
------------
2,453,742
------------
SPAIN (1.5%)
225,000 Energia e Ind. Aragonesas SA (33) 1,619,255
6,500 Corporation Financiera Alba SA (34) 824,801
------------
2,444,056
------------
MEXICO (1.2%)
1,000,000 * Grupo Fernandez Editores SA de CV(25) 211,934
350,000 Industrias Penoles SA de CV (21) 1,673,395
------------
1,885,329
------------
BELGIUM (1.1%)
7,500 Deceuninck Plastics Ind. SA (4) 1,643,310
200 Societe Belge de Betons, SA (34) 97,320
------------
1,740,630
------------
AUSTRIA (1.0%)
16,500 VAE AG (26) 1,632,038
------------
NORWAY (0.9%)
75,000 Schibsted AS (25) 1,486,082
------------
DENMARK (0.7%)
16,000 Carlsberg International A/S Class'B'(9) 827,243
3,500 Kobenhavns Lufthavne (32) 371,491
------------
1,198,734
------------
FINLAND (0.5%)
10,000 Vaisala Oy A (5) 761,196
------------
SOUTH AFRICA (0.5%)
10,977 Anglo American Platinum Corp.ADR(22) 90,779
50,000 Anglo American Platinum Corp.(22) 413,497
10,258 JCI Ltd. ADR (22) 78,951
25,000 JCI Ltd. (22) 192,414
------------
775,641
------------
ISRAEL (0.4%)
150,000 Israel Land Development Co. Ltd. (34) 670,209
------------
AUSTRALIA (0.3%)
185,000 Eltin Ltd. (22) 349,072
100,000 Motors Holdings Ltd. (2) 64,154
------------
413,226
------------
GREECE (0.1%)
48,200 H. Benrubi & Fils SA (9) 133,256
------------
PORTUGAL (0.1%)
10,000 Companhia de Celulose do Cairna (1) 184,091
------------
SOUTH KOREA (0.1%)
35,000 L.G. Electronics GDR (11) 203,000
------------
MISCELLANEOUS (2.2%)
65,000 North European Oil Royalty Tr. (12) $901,875
50,000 Minorco ADR (34) 1,153,125
700,000 Lonrho plc (34) 1,484,674
------------
3,539,674
------------
TOTAL COMMON STOCK
(78.6%) (COST $112,408,289) $127,978,757
------------
<CAPTION>
Market
Shares Preferred Stock Value
- -----------------------------------------------------------------------------------
<C> <C> <C>
GERMANY (1.1%)
20,000 Hornbach Holdings AG Pfd. (28) $ 1,669,392
1,000 SAP AG Pfd. (8) 206,236
------------
1,875,628
------------
INDONESIA (1.0%)
11,500 Freeport McMoRan Pfd. 'B' (22) 355,063
22,500 Freeport McMoRan Pfd. 'C' (22) 663,750
30,000 Freeport McMoRan Pfd. 'D' (22) 547,500
------------
1,566,313
------------
TOTAL PREFERRED STOCK
(2.1%) (COST $3,488,543) $3,441,941
------------
<CAPTION>
Market
Amount Convertible Debentures Value
- -----------------------------------------------------------------------------------
<S> <C>
U.S. DOLLAR (2.0%)
$750,000 PT Inti Indorayon Utama 7.000%
due 05-02-06 (24) $594,375
950,000 Cheil Foods & Chemicals Co 3.000%
due 12-31-06 (9) 1,144,750
250,000 Sincere Navigation 3.750%
due 05-26-03 (32) 285,000
250,000 Medya International Ltd. 10.000%
due 06-28-01 (20) 195,000
1,000,000 Scandinavian Broadcasting
7.250% due 08-01-05 (20) 998,750
------------
TOTAL U.S. DOLLAR (2.0%) $3,217,875
------------
NON U.S. DOLLAR (2.4%)
3,600,000 FF Alcatel Alstholm 2.500%
due 01-01-04 (11) $816,839
687,150 FF Gaumont SA 3.750%
due 01-01-03 (20) 152,812
20,000 FF Immobiliere Hoteliere
due 01-01-01 (33) 640,605
500,000 GB Berisford plc 5.000%
due 01-31-15 (9) 596,781
500,000 GB BAA plc 5.750%
due 03-29-06 (32) 929,481
55,000,000 JP Nippon Yusen 2.000%
due 09-29-00 (32) 501,965
320,000 NZ Shortland Properties Inc. 7.500%
due 12-31-98 (27) 215,598
------------
TOTAL NON-U.S. DOLLAR (2.4%) $3,854,081
------------
TOTAL CONVERTIBLE SUBORDINATED
DEBENTURES
(4.4%) (COST $6,600,830) $7,071,956
------------
</TABLE>
<PAGE> 27
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Face Market
Amount Non-Convertible Bonds Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (1.5%)
$1,250,000 Federal Republic Of Brazil 6.500%
due 04-15-24 (15) $1,054,688
218,250 Republic of Argentina 6.625%
due 03-31-05 (15) 205,291
500,000 United Mexican States 'A'
6.453% due 12-31-19 (15) 465,000
500,000 United Mexican States 'B'
6.375% 12-31-19 (15) 465,000
250,000 United Mexican States 'C'
6.375% 12-31-19 (15) 232,500
--------------
2,422,479
--------------
NON-U.S. DOLLAR (0.5%)
1,000,000 NZ Republic of New Zealand 10.000%
due 03-15-02 (15) 766,916
--------------
TOTAL NON-CONVERTIBLE BONDS
(2.0%) (COST $2,721,317) $3,189,395
--------------
<CAPTION>
Face Market
Amount Short-Term Notes Value
- ------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (3.5%)
$2,460,000 Raytheon Co.
5.950% 07-03-97 $2,459,187
1,006,000 Raytheon Co.
5.950% 07-07-97 1,005,002
2,299,000 Raytheon Co.
5.920% 07-09-97 2,295,976
--------------
5,760,165
--------------
Chemicals (3.9%)
2,218,000 Hercules, Inc.
5.700% 07-11-97 2,214,488
3,013,000 Praxair Inc.
5.640% 07-01-97 3,013,000
1,055,000 Praxair Inc.
5.720% 07-07-97 1,053,994
--------------
6,281,482
--------------
Oil, Energy & Natural Gas (3.0%)
2,120,000 Louisiana Land & Exploration
6.000% 07-02-97 2,119,647
615,000 Louisiana Land & Exploration
5.730% 07-03-97 614,803
2,123,000 Louisiana Land & Exploration
5.850% 07-08-97 2,120,585
--------------
4,855,035
--------------
Retail (3.4%)
2,655,000 Dayton Hudson Corp.
5.750% 07-14-97 2,649,487
2,875,000 Dayton Hudson Corp.
5.750% 07-17-97 2,867,653
--------------
5,517,140
--------------
Total Short-Term Notes
(13.8%) (Cost $22,413,822) $22,413,822
--------------
Total Holdings
(Cost $147,632,802) (a) $164,095,871
==============
<FN>
Industry Classifications
(1) Agriculture (18) Insurance
(2) Automotive (19) Machinery
(3) Banking (20) Media
(4) Building Products (21) Metal (non-ferrous)
(5) Capital Goods (22) Mining
(6) Cement (23) Packaging
(7) Chemicals (24) Paper
(8) Computer Products (25) Publishing
(9) Consumer Products (26) Rail Equipment
(10) Electrical Products (27) Real Estate
(11) Electronics (28) Retailing
(12) Energy and Oil (29) Services
(13) Food & Beverage (30) Steel
(14) Forest Products (31) Textile
(15) Governmental (32) Transportation
(16) Hotels (33) Utilities
(17) Health Care (34) Miscellaneous
(a) Also represents cost for Federal
income tax purposes.
* Non-income producing securities.
Foreign Currencies
NZ - New Zealand Dollar
FF - French Franc
GBP - British Pound
JPY - Japanese Yen
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 28
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $147,632,802)..................$164,095,871
Cash in bank ........................................ 39,485
Unrealized gain on forward currency
contracts (note 5) ................................. 1,498,528
Receivable for fund shares sold...................... 4,129,886
Receivable for securities sold ...................... 668,951
Dividends and accrued interest receivable ........... 750,872
Other ............................................... 30,495
------------
Total assets ....................................... 171,214,088
------------
Liabilities:
Unrealized loss on forward currency
contracts (note 5) ................................. 67,975
Payable for securities purchased .................... 382,654
Payable for investment management
services (note 3) .................................. 121,280
Other accrued expenses .............................. 11,115
Dividends payable ................................... 3,595,058
------------
Total liabilities .................................. 4,178,082
------------
Net assets at market value $167,036,006
============
Net assets consist of:
Par value, $1 per share ............................. $10,383,662
Paid-in capital in excess of par value .............. 132,907,887
Accumulated undistributed net realized
gain on investments ................................ 5,864,029
Net unrealized appreciation (depreciation) on:
Investments (note 1) ............................... 16,463,069
Foreign currency related transactions .............. (17,062)
Forward currency contracts (note 5)................. 1,430,554
Undistributed net investment income ................. 3,867
------------
Net assets at market value $167,036,006
============
Shares outstanding (note 4)........................... 10,383,662
Net asset value per share............................. $16.09
============
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 Unaudited)
Investment income:
Interest (net of $446 foreign taxes withheld)........ $658,418
Dividends (net of $188,958 foreign taxes withheld)... 1,810,502
------------
Total investment income............................. 2,468,920
------------
Expenses:
Management fees (note 3)............................. 670,739
Custodian fees (note 3).............................. 175,313
Directors' fees (note 3) ............................ 3,711
Professional fees.................................... 12,167
Other................................................ 17,897
------------
Total expenses...................................... 879,827
------------
Net investment income .............................. $1,589,093
============
Realized and unrealized gain (loss) on
investments and foreign currency:
Net realized gain from:
Investments......................................... $5,864,029
Forward currency related transactions............... 4,118,610
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments........................................ 5,722,766
Foreign currency related transactions.............. (223,622)
------------
Net gain on investments............................ 15,481,783
------------
Net increase in net
assets from operations............................. $17,070,876
============
The accompanying notes aer an integral part of these financial statements.
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- ------------
<S> <C> <C>
From operations:
Net investment income ................................................ $1,589,093 $1,901,178
Realized gain on investments and foreign currency transactions........ 9,982,639 7,010,378
Unrealized gain on investments and foreign currency transactions ..... 5,499,144 5,979,693
-------------- ------------
Net increase in assets from operations.............................. 17,070,876 14,891,249
-------------- ------------
Dividends and distributions to shareholders:
Dividends declared ................................................... (6,586,484) (4,697,527)
Capital gains distributions .......................................... (4,130,538) (1,691,528)
-------------- ------------
Total dividends and distributions .................................. (10,717,022) (6,389,055)
-------------- ------------
From capital share transactions (note 4):
Received from shares sold ............................................ 24,510,918 37,362,568
Received from dividends reinvested ................................... 10,717,022 6,389,055
Paid for shares redeemed ............................................. (11,834,987) (5,558,345)
-------------- ------------
Increase in net assets derived from capital share transactions....... 23,392,953 38,193,278
Increase in net assets ............................................ 29,746,807 46,695,472
Net Assets:
Beginning of period .................................................. 137,289,199 90,593,727
-------------- ------------
End of period (a) .................................................... $167,036,006 $137,289,199
============== ============
(a) Includes undistributed net investment income of................... $3,867 $882,647
============== ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months 4-30-93
Ended Years Ended December 31, to
June 30, 1997 1996 1995 1994 12-31-94
------------- ------ ------ ------- --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period...................... $15.49 $14.38 $13.30 $12.48 $10.00
Income from investment operations:
Net investment income................................... 0.16 0.25 0.31 0.16 0.02
Net realized and unrealized gain on investments
and foreign currency transactions .................... 1.58 1.76 1.28 0.84 2.47
------------- ------ ------ ------- --------
Total income from investment operations.............. 1.74 2.01 1.59 1.00 2.49
------------- ------ ------ ------- --------
Less distributions:
Dividends declared ..................................... (0.67) (0.63) (0.28) (0.12) (0.01)
Distributions from net realized capital gains........... (0.47) (0.27) (0.23) (0.06) 0.00
------------- ------ ------ ------- --------
Total distributions................................... (1.14) (0.90) (0.51) (0.18) (0.01)
------------- ------ ------ ------- --------
Net asset value, end of period............................ $16.09 $15.49 $14.38 $13.30 $12.48
============= ====== ====== ======= ========
Total return.............................................. 11.74%(b) 14.48% 12.10% 8.07% 24.96%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets ................ 1.17%(a) 1.15% 1.12% 1.05% 1.13%(a,d)
Ratio of net investment income to average net assets ... 2.12%(a) 1.64% 2.29% 1.23% 0.41%(a,d)
Portfolio turnover rate................................... 14%(b) 14% 7% 16% 8%
Average commission rate (c) .............................. $0.02 $0.03 N/A N/A N/A
Net assets at end of period (millions).................... $167.0 $137.3 $90.6 $62.9 $17.5
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security transactions divided by the total
number of shares purchased and sold for which commissions were charged.
(d) The advisor has reimbursed certain operating expenses of the International Portfolio for the period ended
December 31, 1993. Had the advisor not reimbursed such expenses,
the annualized ratio of expenses to average net assets would have been 1.39% and the annualized raio of net
investment income to average net assets would have been .15%.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 30
CAPITAL APPRECIATION PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Capital Appreciation Portfolio seeks maximum capital growth by investing
primarily in common stocks.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 17.00%
Three-year 17.10%
Five-year N/A
Since inception (4/30/94) 16.03%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
Financial markets and most subsectors were almost universally strong in the
first half of 1997. Equity markets completed their ninth and 10th consecutive
positive quarters. This hasn't happened in 40 years. Persistently low levels of
inflation and a strong economy were the key positives. The Federal Reserve
modestly raised interest rates, but this only dampened enthusiasm temporarily.
Meanwhile, the potential vertigo inherent in today's historically high equity
valuations remains largely ignored.
We were not well-positioned for the market's broad trends. First of all, by
design, we attempt to hold down our risk and currently are only about half
invested in common stocks. Our other investments provided solid gains, but not
when compared with the equities. Second, we hold only minor positions in the
large growth companies that dominate the S&P 500. The frenzy that has driven up
prices for these securities may or may not be justified, but the resulting high
valuations seem inappropriate for a risk-averse fund. Third, we have large
exposure to electric utility and energy sector companies, groups that
significantly lagged. Fortunately, a series of individual security successes
provided respectable returns.
Stock market cycles, economic cycles, and credit cycles always seem similar, but
only when viewed through the rear window of history. We expect fairly strong
economic growth to continue and with inflation seemingly subdued, it appears
some time will elapse before the next move in Federal Reserve policy.
Nevertheless, when that action does come, we anticipate it will be another
incremental increase in interest rates. As for the stock market, we have not a
shadow of a doubt that it is overvalued and will decline, but we don't know when
or from what level.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
Capital Appreciation Portfolio
(Commenced operations April 30, 1984) S&P 500 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
04/30/94 $10,000.00 04/30/94 $10,000.00
06/30/94 -0.25% $9,975.00 06/30/94 -3.42% $9,658.00
12/31/94 4.79% $10,452.80 12/31/94 4.90% $10,131.24
06/30/95 13.51% $11,864.98 06/30/95 20.15% $12,172.69
12/31/95 8.02% $12,816.55 12/31/95 14.38% $13,923.12
06/30/96 6.80% $13,688.07 06/30/96 10.20% $15,343.28
12/31/96 8.38% $14,835.13 12/31/96 11.69% $17,136.91
06/30/97 7.95% $16,014.53 06/30/97 20.50% $20,649.97
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
<S> <C>
1. Centerior Energy Corp. 3.7
2. Genetech - Special Common 3.0
3. Amerada Hess Corp. 2.8
4. Lowes Corp. 2.7
5. New York Times Class A 2.3
6. Unicom 2.1
7. Washington Post Class B 2.1
8. Newmont Mining 2.0
9. Chris-Craft 1.5
10. Murphy Oil 1.4
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
<S> <C>
Utilities 10.9
Oil, Energy & Natural Gas 10.6
Media and Publishing 10.2
Insurance Services 6.9
Finance 5.8
</TABLE>
<PAGE> 31
OHIO NATIONAL FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITIED)
<TABLE>
<CAPTION>
Face Market
Amount Long-Term Bonds & Notes Value
- --------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (3.9%)
$100,000 U.S. Treasury Note
5.750% 10-31-97 $100,094
200,000 U.S. Treasury Note
6.250% 04-30-01 199,563
100,000 U.S. Treasury Note
7.375% 11-15-97 100,656
250,000 U.S. Treasury Note
6.125% 07-31-00 249,297
1,000,000 U.S. Treasury Note
5.500% 02-28-99 991,876
250,000 U. S. Treasury Note
6.750% 05-31-99 252,969
---------
1,894,455
---------
COMMUNICATIONS (3.0%)
750,000 Comcast Cable
3.375% 09-09-05 551,250
2,400,000 US WEST, ZERO COUPON
contracts due 06-25-11 918,000
---------
1,469,250
---------
COMPUTER (0.4%)
450,000 Silicon Graphics 144A, zero
coupon contracts due 11-02-1 214,875
DRUGS (0.8%)
600,000 Alza Corp., zero coupon
contracts due 07-14-14 262,500
100,000 Merck and Company
5.760% 05-03-37 100,431
---------
362,931
---------
FINANCE (3.0%)
220,000 Deutsche Bank 144A, Zero
coupon contracts due 02-12- 101,246
100,000 Federal National Mtg. Assoc.
5.370% 02-07-01 96,713
1,200,000 Tennessee Valley Authority
5.980% 04-01-36 1,208,729
50,000 UBS Finance
2.000% 12-15-00 48,266
---------
1,454,954
---------
FOREIGN (0.7%)
150,000 Peninsula & Oriental
7.250% 05-19-03 265,800
50,000 Sandoz Cap.
2.000% 10-06-02 76,250
---------
342,050
---------
HOTEL/LODGING (0.9%)
750,000 Marriott International, zero
coupon contracts due 03-25- 450,000
---------
Industrial Services (1.7%)
900,000 WMX Technologies
2.000% 01-24-05 838,125
---------
INSURANCE (1.6%)
$250,000 Grand Metropolitan
6.500% 01-31-00 $351,228
100,000 Grand Metropolitan -144A
6.500% 01-31-00 140,491
300,000 Zurich Insurance Convt.
1.000% 04-15-03 288,750
-----------
780,469
-----------
MEDIA AND PUBLISHING (3.3%)
2,100,000 Time Warner, zero coupon
contracts due 12-17-12 813,750
1,700,000 Time Warner, zero coupon
contracts due 06-22-13 784,125
-----------
1,597,875
-----------
METALS AND MINING (0.9%)
450,000 Homestake Mining
5.500% 06-23-00 437,625
-----------
OIL, ENERGY AND NATURAL GAS (1.2%)
670,000 Enserch Corp.
6.375% 04-01-02 562,875
-----------
UTILITIES (0.9%)
1,250,000 US Cellular Lyons, zero coupon
contracts due 06-15-15 435,937
-----------
TOTAL LONG-TERM BONDS & NOTES
(22.3%)(Cost $10,530,957) $10,841,421
-----------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Short-Term Notes Value
- -------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS (4.3%)
$2,105,000 Motorola Credit Corporation
5.500% 08-05-97 $ 2,093,744
-----------
ELECTRICAL EQUIPMENT (2.0%)
984,000 Siemkens Capital Corp.
5.500% 08-20-97 976,483
-----------
FINANCIAL SERVICES (1.4%)
244,000 Ciesco L.P.
5.550% 07-01-97 244,000
109,000 Preferred Receivables
5.530% 07-08-97 108,883
300,000 Western Australia Treasury
5.550% 07-23-97 298,983
-----------
651,866
-----------
FOOD AND RELATED (2.0%)
960,000 Archer Daniels Midland
5.520% 07-15-97 957,939
-----------
INSURANCE (3.7%)
1,814,000 Metlife Funding Inc.
5.520% 07-07-97 1,812,331
-----------
</TABLE>
<PAGE> 32
OHIO NATIONAL FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Short Term Notes (con't) Value
- --------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (1.5%)
$100,000 Federal Home Loan Mortgage
5.500% 07-18-97 $99,740
90,000 Federal Home Loan Mortgage
5.450% 07-25-97 89,673
63,000 Federal Home Loan Mortgage
5.500% 07-15-97 62,865
493,000 Federal Home Loan Mortgage
5.520% 07-25-97 491,186
----------
743,464
----------
TOTAL SHORT TERM NOTES
(14.9%) (COST $7,235,827) $7,235,827
----------
Face Market
Amount Convertible Debentures Value
- --------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (0.5%)
$402,000 The Pep Boys zero coupon
contracts due 09-20-11 $224,618
----------
COMPUTER AND RELATED (2.9%)
2,300,000 Automatic Data Process, zero
coupon contracts due 02-20 1,385,750
----------
DRUGS (0.3%)
200,000 Mckesson Co., 4.500% conv.
subordinated debentures,
due 03-01-04 174,916
----------
DURABLE GOODS (0.2%)
100,000 Outboard Marine, 7.000% conv.
subordinated debentures,
due 07-01-02 99,750
----------
ENTERTAINMENT AND LEISURE (0.1%)
50,000 Ogden Corp. Convt.
5.750% 10-20-02 46,750
----------
INDUSTRIAL SERVICES (1.6%)
1,800,000 Roche Holdings Covt., zero
coupon contracts due 05-06- 787,500
----------
INSURANCE (0.7%)
500,000 USF&G, zero coupon contracts
due 03-03-09 363,750
----------
REAL ESTATE (1.4%)
650,000 Rouse Co., 5.750% conv. subordinated
debentures, due 07-23-02 674,375
----------
RETAIL (0.8%)
600,000 Office Depot zero coupon
contracts due 11-01-08 368,250
----------
UTILITIES (0.5%)
250,000 Potomac Electricity & Power Co.,
5.000% conv. subordinated
debentures, due 09-01-02 230,625
----------
MISCELLANEOUS (0.6%)
$200,000 Lonrho 6.000% conv. subordinated
debenture, due 02-27-04 $ 311,980
----------
TOTAL CONVERTIBLE DEBENTURES
(9.6%) (COST $4,272,298) $4,668,264
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------
<S> <C> <C>
BANKING (0.1%)
5 Bank for International Settlements $ 35,155
----------
BUSINESS SERVICES (0.5%)
4,100 HFS Inc. 237,800
----------
COMPUTER AND RELATED (0.7%)
3,500 IBM Corp. 315,656
1,500 * Silicon Graphics, Inc. 22,500
----------
338,156
----------
CHEMICALS (1.7%)
12,500 Great Lakes Chemical Corp. 654,688
5,250 Hanson Trust PLC ADR 131,250
3,600 * Millenium Chemicals 81,900
----------
867,838
----------
CONSUMER PRODUCTS (2.0%)
14,800 Phillip Morris Cos., Inc. 656,750
6,000 Polaroid Corp. 333,000
----------
989,750
----------
DRUGS (3.6%)
25,000 * Genetech Special Common 1,473,438
1,300 * Perrigo Company 16,250
2,000 Schering - Plough Corp. 239,374
----------
1,729,062
----------
DURABLE GOODS (0.2%)
3,000 A T Cross Co. 38,250
14,000 * English China Clays 48,115
----------
86,365
----------
ELECTRICAL EQUIPMENT (0.1%)
3,000 Exide Corp. 65,813
----------
FINANCE (2.0%)
5,000 American Express 372,500
3,200 Federal Nat'l Mortgage Assn. 139,600
4,200 Fund American Enterprise 441,000
----------
953,100
----------
FOOD AND RELATED (0.1%)
2,500 McCormick & Company, Inc. 63,125
----------
FORESTRY AND PAPER PRODUCTS (1.9%)
3,000 Deltic Timer Corp. 87,938
2,500 International Paper Co. 121,406
20,000 Johns-Manville Corp. 236,250
9,000 Weyerhaeuser Co. 468,000
----------
913,594
----------
INDUSTRIAL SERVICES (2.1%)
7,000 Corning Inc. 389,374
40,000 Wheelabrator Technologies 632,938
----------
1,022,312
----------
</TABLE>
<PAGE> 33
OHIO NATIONAL FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------
<S> <C> <C>
INSURANCE (4.6%)
4,500 Harleysville Group Inc. $ 170,437
13,000 Loews Corp. 1,301,625
1,600 * Risk Capital Holdings 33,600
5,500 Unitrin, Inc. 335,500
12,000 Willis Corroon Group plc 134,250
6,500 Zurich Reinsurance 256,750
----------
2,232,162
----------
MEDIA AND PUBLISHING (6.9%)
15,000 * Chris-Craft Ind., Inc. 723,750
10,000 Meredith Corp. 290,000
23,000 New York Times Co. Class A 1,138,500
8,000 Readers Digest 221,500
2,500 Washington Post Class B 995,000
----------
3,368,750
----------
MEDICAL AND RELATED (0.0%)
875 * Quest Diagnostics 17,992
----------
METALS AND MINING (2.7%)
3,000 * Helcla Mining Co. 16,125
20,000 Homestake Mining Co. 261,250
24,700 Newmont Mining Corp. 963,300
13,100 * Prime Resources Group 94,958
----------
1,335,633
----------
OIL, ENERGY AND NATURAL GAS (9.4%)
25,900 Amerada Hess Corp. 1,439,069
6,000 Atlantic Richfield Co. 423,000
8,250 The Energy Group Pls ADR 349,594
1,500 Kerr McGee 95,062
17,700 Mitchell Energy & Development 378,338
14,000 Murphy Oil Corp. 682,500
2,000 Sun Company, Inc. 62,000
5,000 Texaco, Inc. 543,750
28,000 Union Texas Petroleum 586,250
----------
4,559,563
----------
RETAIL (1.8%)
9,000 * Hill Stores Co. 30,937
10,500 Limited Inc. 212,625
100,000 * Petrie Stores-Liq. Trust Unit 312,500
3,100 * Toys R' Us 108,500
6,000 Wal-Mart Stores, Inc. 202,875
----------
867,437
----------
TRANSPORTATION (0.9%)
15,000 Overseas Shipholding Inc. 294,375
4,000 Ryder System, Inc. 132,000
----------
426,375
----------
UTILITIES (7.2%)
160,000 Centerior Energy Corp. 1,790,000
30,000 Ohio Edison Co. 654,375
46,600 Unicom Corp. 1,036,850
----------
3,481,225
----------
MISCELLANEOUS (0.6%)
140,874 * Lonrho Plc 298,935
----------
TOTAL COMMON STOCK
(49.1%) (COST $19,652,004) $23,890,142
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Preferred Stock Value
- --------------------------------------------------------------
<S> <C> <C>
FINANCE (0.8%)
7,000 Kemper Co., 5.750% Series E $ 364,000
-----------
FORESTRY AND PAPER PRODUCTS (0.1%)
1,000 International Paper 53,836
-----------
REAL ESTATE (0.7%)
7,000 Rouse Co. Convert. 'B' 337,750
-----------
UTILITIES (2.3%)
265 Cleveland Electric 9.000% 278,581
150 Cleveland Electric 8.800% 156,188
4,940 Cleveland Electric Adj. Rate 438,425
2,894 Entergy Gulf Series B 138,912
1,000 Niagara Mohawk Power Series B 23,500
3,700 Niagara Mohawk Power Series C 82,787
-----------
1,118,393
-----------
TOTAL PREFERRED STOCK
(3.9%) (COST $1,673,693) $ 1,873,979
</TABLE>
<TABLE>
<CAPTION>
Put Option Purchases Market
Shares Stock/Expiration/Exercise Price Value
- --------------------------------------------------------------
<S> <C> <C>
15 Automatic Data/Aug'97'/$50 $ 4,875
20 Automatic Data/Nov'97'/$50 8,750
5 Chubb Capital/Jul'97'/$55 31
40 HFS/July'97'/$60 8,000
15 HFS/Octl'97'/$70 17,250
15 HFS/Octl'97'/$60 7,313
10 IBM/Jan'98'/$95 8,625
10 IBM/Jul'97'/$80 125
10 IBM/Oct'97'/$77.50 1,312
10 IBM/Oct'97'/$87.50 3,750
15 IBM/Jan'98'/$100 17,250
15 Limited Inc/Aug'97'/$20 844
15 Limited Inc/Aug'97'/$22.50 3,375
10 Limited Inc/Nov'97'/$22.50 3,375
10 Microsoft/July'97'/$85 63
10 Schering-Plough/Aug'97'/$42.50 250
15 Schering-Plough/Nov'97'/$45 5,260
10 Schering-Plough/Nov'97'/$50 3,875
15 Silicon Graphics/Aug'97'/$30 22,125
15 Silicon Graphics/Nov'97'/$22.50 11,063
10 Toys R Us/Sept'97'/$30 500
10 Toys R Us/Dec'97'/$35 2,313
20 Walmart/Sept'97'/$25 250
15 Walmart/Dec'97'/$32.50 2,155
10 Walmart/Dec'97'/$35 2,375
----------
TOTAL PUT OPTION PURCHASE
(0.3%) (COST $223,679) $ 135,094
----------
TOTAL HOLDINGS
(COST $43,588,458) (A) $48,644,727
============
</TABLE>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 34
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $43,588,458).................. $48,644,727
Cash in bank ....................................... 3,564
Receivable for fund shares sold..................... 454,647
Receivable for securities sold ..................... 288,273
Dividends and accrued interest receivable .......... 197,637
Other .............................................. 3,389
-----------
Total assets ...................................... 49,592,237
-----------
Liabilities:
Payable for investment management
services (note 3) ................................. 31,457
Payable for securities purchased ................... 159,295
Other accrued expenses ............................. 6,262
Dividends payable .................................. 331,124
-----------
Total liabilities ................................. 528,138
-----------
Net assets at market value $49,064,099
===========
Net assets consist of:
Par value, $1 per share ............................ $ 3,672,759
Paid-in capital in excess of par value ............. 39,078,933
Accumulated undistributed net realized
gain on investments ............................... 1,250,075
Net unrealized appreciation on investments (note 1) 5,056,269
Undistributed net
investment income ................................. 6,063
-----------
Net assets at market value $49,064,099
===========
Shares outstanding (note 4).......................... 3,672,759
Net asset value per share............................ $ 13.36
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1997 (Unaudited)
<S> <C>
Investment income:
Interest............................................ $ 494,672
Dividends........................................... 319,601
-----------
Total investment income............................ 814,273
-----------
Expenses:
Management fees (note 3)............................ 169,814
Custodian fees (note 3)............................. 4,983
Directors' fees (note 3)............................ 1,026
Professional fees................................... 3,367
Fund accounting fees ............................... 12,460
Other............................................... 6,991
-----------
Total expenses..................................... 198,641
-----------
Net investment income.............................. $ 615,632
===========
Realized and unrealized gain on investments:
Net realized gain from investments ................. $ 1,250,075
Net increase in unrealized
appreciation on investments ....................... 1,576,724
-----------
Net gain on investments........................... 2,826,799
Net increase in net
assets from operations............................ $ 3,442,431
===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- -----------
<S> <C> <C>
From operations:
Net investment income ............................................... $ 615,632 $ 1,121,488
Realized gain on investments ........................................ 1,250,075 1,168,575
Unrealized gain on investments ...................................... 1,576,724 2,026,474
-------------- -----------
Net increase in assets from operations............................. 3,442,431 4,316,537
------------- ------------
Dividends and distributions to shareholders:
Dividends declared .................................................. (1,212,549) (969,506)
Capital gains distributions ......................................... (553,830) (655,102)
------------- ------------
Total dividends and distributions ................................. (1,766,379) (1,624,608)
------------- ------------
From capital share transactions (note 4):
Received from shares sold ........................................... 8,827,624 16,614,123
Received from dividends reinvested .................................. 1,766,379 1,624,608
Paid for shares redeemed ............................................ (1,487,199) (1,969,700)
------------- ------------
Increase in net assets derived from capital share transactions...... 9,106,804 16,269,031
Increase in net assets ........................................... 10,782,856 18,960,960
Net Assets:
Beginning of period ................................................. 38,281,243 19,320,283
------------- ------------
End of period (a) ................................................... $49,064,099 $38,281,243
------------- ------------
<FN>
(a) Includes undistributed net investment income of................. $6,063 $ 295,609
============= ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months 5-1-94
Ended Years Ended December to
June 30, 1997 1996 1995 12-31-94
------------- ------- ------ --------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period....................... $12.93 $11.99 $10.25 $10.00
Income from investment operations:
Net investment income.................................... 0.17 0.48 0.39 0.22
Net realized and unrealized gain on investments ......... 0.81 1.31 1.85 0.23
------------- ------- ------ --------
Total income from investment operations................ 0.98 1.79 2.24 0.45
------------- ------- ------ --------
Less distributions:
Dividends declared ...................................... (0.37) (0.44) (0.29) (0.20)
Distributions from net realized capital gains ........... (0.18) (0.41) (0.21) 0.00
------------- ------- ------ --------
Total distributions.................................... (0.55) (0.85) (0.50) (0.20)
------------- ------- ------ --------
Net asset value, end of period............................. $13.36 $12.93 $11.99 $10.25
============= ======= ====== =======
Total return............................................... 7.95%(b) 15.75% 22.62% 4.53%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets ................. 0.93%(a) 0.97% 0.96% 0.98%(a,d)
Ratio of net investment income to average net assets .... 2.88%(a) 3.90% 3.47% 3.24%(a,d)
Portfolio turnover rate.................................... 21%(b) 37% 32% 20%
Average commission rate (c) ............................... $0.04 $0.05 N/A N/A
Net assets at end of period (millions)..................... $49.1 $38.3 $19.3 $6.8
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security transactions divided by the total
number of shares purchased and sold for which commissions were charged.
(d) The advisor has reimbursed certain operating expenses of the Capital Apprciation Portfolio for the period
ending December 31, 1994. Had the advisor not reimbursed such expenses,
the annualized ratio of expenses to average net assets would have been 1.05% and the annualized ratio of net
investment income to average net assets would have been 3.18%.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 36
SMALL CAP PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Small Cap Portfolio seeks maximum capital growth by investing primarily in
common stocks of small- and medium-size companies.
PERFORMANCE AS OF JUNE 30, 1997
Average Annual Total Returns:
One-year 2.84%
Three-year 23.22%
Five-year N/A
Since inception (4/30/94) 22.41%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The second quarter was obviously a big turnaround from
quarter one. From a big picture standpoint, fears of accelerating inflation
dissipated. With inflation continuing to remain at historically low levels, the
market psychology quickly began discounting the chances of any rate increase.
For the quarter, all averages were well into double-digit territory.
While the second quarter rebound was significant for small cap stocks, the
market generally continues to be driven by large cap stocks. For the six months
ended June 30, for instance, the S&P 500 Index was up twice as much as the
Russell 2000 Index. Moreover, the Russell 2000's Growth component still lagged
its Value component. We continue to expect market volatility and will take
advantage of that to scale out of stocks on surges and purchase on declines.
Our long term bullishness continues to be driven by the global competitiveness
that we believe is responsible for continued low inflation, and the global
movement towards capitalism which spawns new corporate opportunities. We are in
the midst of second quarter earnings releases as I write this letter, and so
far, corporate earnings appear to be quite good. The prices of small company
stocks are generally more volatile than the prices of large company stocks.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Small Cap Portfolio
(Commenced operations April 30, 1984) Russell 2000 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
04/30/94 $10,000.00 04/30/94 $10,000.00
06/30/94 1.44% $10,144.00 06/30/94 -4.46% $9,554.00
12/31/94 19.54% $12,126.14 12/31/94 4.94% $10,025.97
06/30/95 17.40% $14,236.09 06/30/95 14.42% $11,471.71
12/31/95 13.30% $16,129.48 12/31/95 12.26% $12,878.14
06/30/96 14.42% $18,455.36 06/30/96 10.36% $14,212.32
12/31/96 2.88% $18,986.87 12/31/96 5.56% $15,002.52
06/30/97 -0.04% $18,979.28 06/30/97 10.20% $16,532.78
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
1. US Office Products 2.3
2. Healthcare Compare 2.1
3. CDW Computer Centers 2.1
4. Wolverine World Wide 2.0
5. Remec 2.0
6. United Waste Systems 1.9
7. Digital Microwave Corp. 1.8
8. La Quinta Inns 1.7
9. Watson Pharmaceutical Inc. 1.7
10. P-Com Inc. 1.4
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
Medical and Related 13.4
Computer and Related 11.1
Business Services 8.7
Retail 7.6
Communications 7.3
</TABLE>
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 37
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Face Market
Amount Repurchase Agreements Value
- ---------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (13.4%)
$6,239,000 Star Bank 5.250% 07-01-97
repurchase price $6,239,910
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $6,220,000) $6,239,000
--------------
TOTAL REPURCHASE AGREEMENTS
(13.4%) (COST $6,239,000) $6,239,000
--------------
<CAPTION>
Market
Shares U.S. Common Stock Value
- ----------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (1.0%)
19,000 * Tracor Inc. $477,375
--------------
BUSINESS SERVICES (8.7%)
21,775 * American Pad and Paper Co. 367,453
7,700 * Caribiner International Inc. 251,213
10,300 * Checkfree 181,538
20,000 * Concord EFS, Inc. 517,500
2,950 * Metzler Group 96,612
18,350 * Protection One Inc. 247,725
8,800 * Rural/Metro Corp. 255,475
7,000 * Sylvan Learning Systems Inc. 238,000
21,025 * Teletech Holdings Inc. 547,964
35,000 * US Office Products 1,069,687
12,225 * World Color Press, Inc. 290,344
--------------
4,063,511
--------------
CHEMICALS (2.1%)
18,400 Crompton & Knowles Corp. 409,400
9,475 OM Group 313,859
5,075 * R.P. Scherer 261,997
--------------
985,256
--------------
COMMUNICATIONS (7.3%)
9,000 * Cellular Communication Intl. 301,500
17,800 * Cellular Technical Services 162,425
28,475 * Digital Microwave Corp. 854,250
20,350 * P-Com Inc. 671,550
9,475 * Pacific Gateway Exchange 267,669
27,450 * Periphonics Corp. 590,175
10,525 * Tel-Save Holdings 160,506
4,200 * Telco Communications 136,500
7,925 * Teledata Communications Ltd. 272,422
--------------
3,416,997
--------------
CONSUMER PRODUCTS (0.3%)
5,875 * JR Cigar 121,906
--------------
DRUGS (3.0%)
19,775 * Parexel International Corp. 627,856
18,250 * Watson Pharmaceuticals Inc. 771,063
--------------
1,398,919
--------------
DURABLE GOODS (1.0%)
11,400 * Radisys Corp. 453,150
--------------
COMPUTER AND RELATED (11.1%)
16,475 * Avant! Corp. $468,531
10,800 * BA Merchant Services, Inc. 205,875
18,175 * CDW Computer Centers Inc. 964,411
5,700 * CSG Systems Intl. Inc. 175,988
15,225 * Documentum 378,722
5,750 * Electronic Arts 193,344
45,300 * Geoworks 263,306
15,450 * HNC Software 589,031
13,325 * Insight Enterprises Inc. 400,583
8,025 * Micro Linear Corp. 84,262
19,350 * Network General Corp. 287,831
11,137 * Scopus Technology Inc. 249,190
12,025 * Sterling Commerce Inc. 395,322
23,500 * Summit Design Inc. 190,938
6,725 * Veritas Software 337,931
--------------
5,185,265
--------------
ELECTRONICS (7.3%)
16,325 * Berg Electronics Corp. 586,680
11,746 * PRI Automation Inc. 445,614
39,113 * Remec Inc. 919,144
7,825 * Sanmina Corp. 496,887
12,400 * Sawtek Inc. 418,500
6,800 * Speedfam International Inc. 243,950
9,075 * Vitesse Semiconductor Corp. 296,639
--------------
3,407,414
--------------
ENTERTAINMENT AND LEISURE (0.6%)
12,425 * Midway Games 265,584
--------------
FINANCE (1.1%)
2,500 Banco Latinoamericano 107,813
14,600 * First USA Paymentech Inc. 422,487
--------------
530,300
--------------
FOOD AND RELATED (1.8%)
22,675 * JP Foodservice Inc. 650,489
13,950 * Peapod Inc. 156,938
--------------
807,427
--------------
HOTEL/LODGING (5.2%)
14,375 * Doubletree Corp. 591,172
35,300 La Quinta Inns 772,187
17,450 * Signature Resorts Inc. 603,116
25,375 * Silverleaf Resorts Inc. 390,141
4,575 * Vistana 70,913
--------------
2,427,529
--------------
INDUSTRIAL SERVICES (4.2%)
12,275 * Brooks Automation 236,294
12,000 Harsco Corp. 486,000
12,250 Memtec Ltd. ADR 330,750
22,000 * United Waste Systems 902,000
--------------
1,955,044
--------------
INSURANCE (1.9%)
7,375 Executive Risk Inc. 383,500
7,100 Reliastar Financial Corp. 519,188
--------------
902,688
--------------
MACHINERY (0.8%)
14,875 * Rental Service Corp. 390,469
--------------
</TABLE>
<PAGE> 38
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares U.S. Common Stock Value
<S> <C> <C>
MEDIA AND PUBLISHING (1.0%)
10,325 * SFX Broadcasting Cl. A $435,586
------------
MEDICAL AND RELATED (13.4%)
9,300 * Advance Paradigm 172,050
15,500 * Covance 299,344
10,750 * FPA Medical Managment 254,641
32,450 * HPR Inc. 600,325
18,950 * Healthcare Compare 992,506
5,100 * Heartport Inc. 89,888
13,375 * Henry Schein Inc. 417,969
34,750 * Medical Manager Corp. 512,563
13,000 * Multicare Companies Inc. 355,875
9,800 * NCS Healthcare Inc. 297,675
16,800 Omnicare Inc. 527,100
24,050 * Orthodontic Centers of America 437,409
7,950 * Pediatrix Medical Group 364,208
12,300 * Rexall Sundown Inc. 479,700
12,175 * Sunrise Assisted Living Inc. 426,125
------------
6,227,378
------------
METALS AND MINING (0.4%)
10,525 IMCO Recycling 198,659
------------
REAL ESTATE (1.3%)
18,000 * Fairfield Communities Inc. 605,250
------------
RETAIL (7.6%)
10,195 * Consolidated Stores Corp. 354,265
10,000 * Fred Meyer 516,875
11,700 * Gymboree Corp. 280,800
4,700 * Linens N' Things 139,238
12,475 * Men's Wearhouse Inc. 392,962
11,350 * Proffitt's Inc. 497,981
23,225 * The Sports Authority Inc. 451,436
30,450 Wolverine World Wide 924,919
------------
3,558,476
------------
TEXTILES (1.9%)
9,325 * Kenneth Cole Products 152,114
12,000 * Nautica Enterprises Inc. 317,250
12,950 Warnaco Group 412,781
------------
882,145
------------
TRANSPORTATION (0.6%)
9,000 * Mark VII Inc. 288,000
------------
TOTAL U.S. COMMON STOCK
(83.6%) (COST $31,735,804) $38,984,328
------------
<CAPTION>
Market
Shares Foreign Common Stock Value
- ----------------------------------------------------------------------
<S> <C> <C>
BRITISH STERLING POUND:
MEDIA
39,600 * Flextech Plc $423,775
RETAIL
36,500 * Next Plc 412,169
MISCELLANEOUS
16,754 Wetherspoon (J.D.) 379,915
------------
TOTAL BRITISH STERLING POUND (2.6% 1,215,859
------------
JAPANESE YEN:
MISCELLANEOUS
8,000 Hoya Corp. 356,550
------------
TOTAL JAPANESE YEN (0.7%) 356,550
------------
NETHERLANDS GUILDER:
MISCELLANEOUS
4,530 * Hunter Douglas NV 386,109
TRANSPORTATION
7,100 * IHC Caland 388,823
------------
TOTAL NETHERLANDS GUILDER (1.7%) 774,932
------------
TOTAL FOREIGN COMMON STOCK
(5.0%) (COST $1,475,934) $2,347,341
------------
TOTAL HOLDINGS
(COST $39,450,738) (a) $47,570,669
============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 39
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $39,450,738).......................$47,570,669
Cash in bank ............................................ 493
Receivable for fund shares sold.......................... 132,113
Receivable for securities sold .......................... 94,526
Dividends and accrued interest receivable ............... 2,875
Other ................................................... 2,676
----------
Total assets ........................................... 47,803,352
----------
Liabilities:
Payable for investment management
services (note 3) ...................................... 29,413
Payable for securities purchased ........................ 998,143
Payable for shares redeemed ............................. 71,270
Other accrued expenses .................................. 4,051
----------
Total liabilities ...................................... 1,102,877
----------
Net assets at market value $46,700,475
==========
Net assets consist of:
Par value, $1 per share ................................. $2,591,541
Paid-in capital in excess of par value .................. 37,290,619
Accumulated undistributed net realized
loss on investments (note 1)............................ (1,114,536)
Net unrealized appreciation on investments (note 1)...... 8,119,931
Undistributed net investment loss ....................... (187,080)
----------
Net assets at market value $46,700,475
==========
Shares outstanding (note 4)............................... 2,591,541
Net asset value per share................................. $18.02
==========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
Investment income:
Interest................................................. $127,322
Dividends................................................ 22,664
----------
Total investment income................................. 149,986
----------
Expenses:
Management fees (note 3)................................. 158,665
Custodian fees (note 3).................................. 4,191
Directors' fees (note 3)................................. 1,026
Professional fees........................................ 3,367
Fund accounting fees .................................... 12,610
Other.................................................... 5,779
----------
Total expenses.......................................... 185,638
----------
Net investment loss .................................... ($35,652)
==========
Realized and unrealized gain (loss) on investments:
Net realized loss from investments ...................... ($881,428)
Net increase in unrealized
appreciation on investments ............................ 1,405,192
----------
Net gain on investments................................ 523,764
----------
Net increase in net
assets from operations................................. $488,112
==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 40
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
-------------- -----------
<S> <C> <C>
From operations:
Net investment loss ...................................................... ($35,652) ($127,376)
Realized loss on investments ............................................. (881,428) (234,049)
Unrealized gain on investments ........................................... 1,405,192 4,808,722
-------------- ------------
Net increase in assets from operations................................. 488,112 4,447,297
-------------- ------------
Dividends and distributions to shareholders:
Capital gains distributions .............................................. 0 (542,566)
-------------- ------------
From capital share transactions (note 4):
Received from shares sold ................................................ 9,412,127 19,468,827
Received from dividends reinvested ....................................... 0 542,566
Paid for shares redeemed ................................................. (1,663,473) (1,490,446)
-------------- ------------
Increase in net assets derived from capital share transactions.......... 7,748,654 18,520,947
Increase in net assets ............................................... 8,236,766 22,425,678
Net Assets:
Beginning of period ...................................................... 38,463,709 16,038,031
-------------- ------------
End of period (a) ........................................................ $46,700,475 $38,463,709
============== ============
(a) Includes undistributed net investment loss of........................... ($187,080) ($151,428)
============== ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months 5-1-94
Ended Years Ended December to
June 30, 1997 1996 1995 12-31-94
------------- ------- ------ --------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period...................... $18.03 $15.85 $11.99 $10.00
Income (loss) from investment operations:
Net investment income (loss) ........................... (0.02) (0.08) (0.02) 0.18
Net realized and unrealized gain on investments ........ 0.01 2.80 3.95 1.94
------------- ------- ------ --------
Total income (loss) from investment operations........ (0.01) 2.72 3.93 2.12
------------- ------- ------ --------
Less distributions:
Dividends declared ..................................... 0.00 0.00 (0.07) (0.13)
Distributions from net realized capital gains .......... 0.00 (0.54) 0.00 0.00
------------- ------- ------ --------
Total distributions................................... 0.00 (0.54) (0.07) (0.13)
------------- ------- ------ --------
Net asset value, end of period............................ $18.02 $18.03 $15.85 $11.99
============= ======= ====== ========
Total return.............................................. (0.04%)(b) 17.71% 33.01% 21.26%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets ................ 1.10%(a) 0.96% 0.96% 0.91%(a,d)
Ratio of net investment income to average net assets ... 0.18%(a) (0.48%) (0.11%) 3.27%(a,d)
Portfolio turnover rate................................... 38%(b) 70% 75% 22%
Average commission rate (c) .............................. $0.05 $0.06 N/A N/A
Net assets at end of period (millions).................... $46.7 $38.5 $16.0 $3.3
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security transactions divided by the total
number of shares purchased and sold for which commissions were charged.
(d) The advisor has reimbursed certain operating expenses of the Small Cap Portfolio for the period ending
December 31, 1994. Had the advisor not reimbursed such expenses,
the annualized ratio of expenses to average net assets would have been .95% and the annualized ratio of net
investment income to average net assets would have been 3.24%.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 41
GLOBAL CONTRARIAN PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Global Contrarian Portfolio seeks to provide long-term growth of capital by
investing in foreign and domestic securities that are undervalued or presently
out of favor with other investors but have positive prospects for eventual
appreciation.
PERFORMANCE AS OF JUNE 30, 1997
AVERAGE ANNUAL TOTAL RETURNS:
One-year 12.24%
Three-year N/A
Five-year N/A
Since inception (3/31/95) 13.93%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The Global Contrarian Portfolio currently has a significant exposure to
commodity and/or "hard asset" related stocks in the U.S. as well as over-seas.
The portfolio also owns some small and obscure stocks worldwide which we believe
are neglected. Finally, we hold some emerging market debt instruments, either
corporate or sovereign. With the exception of gold related stocks, most
commodity and commodity related stocks were up modestly in the second quarter.
Both the U.S. and most foreign markets performed well in the second quarter. The
emerging market debt instruments also performed well.
Unlike financial assets which have done very well over the past 15 years, hard
assets such as natural resources, gold or even real estate have performed
poorly. That situation is, in our view, unlikely to last forever.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Global Contrarian Portfolio
(Commenced operations March 31, 1995) Morgan Stanley Captl, Intl. World Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
03/31/95 $10,000.00 03/31/95 $10,000.00
06/30/95 4.21% $10,421.00 06/30/95 4.27% $10,427.00
12/31/95 4.50% $10,889.95 12/31/95 10.61% $11,533.30
06/30/96 9.69% $11,945.18 06/30/96 7.08% $12,349.86
12/31/96 2.19% $12,206.78 12/31/96 5.97% $13,087.15
06/30/97 9.84% $13,407.93 06/30/97 15.38% $15,099.95
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
1. Secom Co., Ltd. 2.1
2. Bank for International Settlements 2.0
3. San Juan Basin Royalty Trust 1.7
4. Edipresse SA, Bearer 1.7
5. Franklin Electric 1.6
6. ED&F Man Group Plc. 1.6
7. Woodhead Industries Inc. 1.6
8. Teltrend 1.6
9. BEI Electronics 1.5
10. Industrias Penoles 1.4
<CAPTION>
TOP 5 COUNTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
United States 32.3
Switzerland 7.6
Japan 6.4
France 4.7
Latin America 3.8
</TABLE>
The risk associated with investing on a worldwide basis includes differences in
regulation of financial data and reporting and currency exchanges as well as
economic and political systems which may be different from those in the United
States. The prices of small company stocks are generally more volatile than the
prices of large company stocks.
<PAGE> 42
OHIO NATIONAL FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITIED)
<TABLE>
<CAPTION>
Market
Shares U.S. Common Stock Value
---------------------------------------------------------
<S> <C>
CHEMICALS (0.9%)
10,000 Lawter International Inc. $126,250
--------
CAPITAL GOODS (5.4%)
3,000 Bandag Inc. Class 'A' 146,063
4,000 Blount International Inc. Cl 'A' 170,250
4,700 Franklin Electric Co., Inc. 233,825
12,000 Woodhead Industries, Inc. 226,500
--------
776,638
--------
COMPUTER AND RELATED (2.6%)
5,000 NCR Corporation 148,750
15,000 Teltrend, Inc. 219,375
--------
368,125
--------
CONSUMER PRODUCTS (4.1%)
1,000 Allen Organ Co. Class 'B' 39,500
5,000 Black & Decker Corp. 185,938
3,000 Dole Foods Company, Inc. 128,250
5,000 Furniture Brands International In 96,875
10,000 Hancock Fabrics 137,500
--------
588,063
--------
ELECTRICAL EQUIPMENT (2.4%)
20,000 BEI Electronics, Inc. 220,000
10,000 Sterling Electronics 127,500
--------
347,500
--------
ENERGY AND OIL (4.7%)
2,535 * Enterra Corp. 97,598
38,100 Kaneb Services Inc. 140,494
8,000 North European Oil Royalty Trust 111,000
1,700 Rochester & Pittsburgh Coal Co. 73,950
30,000 San Juan Basin Royalty Trust 243,750
--------
666,792
--------
FINANCE (3.4%)
8,000 * Classic Bankshares Inc. 112,000
5,000 * East Texas Financial Services 90,000
8,000 * First Federal Financial Services 108,000
8,500 Redwood Financial Inc. 91,375
5,000 Southern Banc Co., Inc. 76,562
--------
477,937
--------
FORESTRY PRODUCTS (2.0%)
1,000 Georgia Pacific Corp. 85,375
5,000 Greif Brothers Corp. Class 'A' 135,000
1,500 Rayonier Inc. 63,094
--------
283,469
--------
MEDIA (0.1%)
5,000 * Integrity Music, Inc. Class 'A' 9,375
--------
METALS AND MINING (0.9%)
50 Case Pomeroy, Inc. Class A 59,650
1,000 Reynolds Metals Co. 71,250
--------
130,900
--------
REAL ESTATE (0.2%)
2,000 Alico, Inc. 39,250
--------
Services (1.2%)
10,000 Borg-Warner Security Corp. 178,750
--------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares U.S. Common Stock Value
---------------------------------------------------------
<S> <C>
TRANSPORTATION (0.5%)
3,500 Kenan Transport Company $ 69,125
----------
Utilities (0.8%)
2,000 Montana Power Co. 115,938
----------
MISCELLANEOUS (2.7%)
15,000 * Kaiser Ventures Inc. 165,937
4,000 UniFirst Corp. 80,000
5,200 Zero Corporation 136,500
----------
382,437
----------
TOTAL U.S. COMMON STOCK
(31.9%) (COST $3,908,507) $4,560,549
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Foreign Common Stock Value
---------------------------------------------------------
<S> <C>
SWITZERLAND (7.6%)
40 Bank of Intl. Settlements (3) $ 280,918
1,000 Edipresse SA, Bearer (25) 236,382
300 Kuehne & Nagel Intl. AG (32) 184,995
65 Schindler Holding AG PC (5) 81,278
175 Sika Finanz AG Bearer (7) 156,903
400 Societe Generale d'Affichage DRC (20) 145,255
----------
1,085,731
----------
JAPAN (6.4%)
20,000 Dai Tokyo Fire & Marine Ins. Co. (18) 115,983
12,000 Dowa Fire & Marine Ins. Co. (18) 59,633
2,500 Fuji Photo Film Co. Ltd. (9) 100,655
2,500 Fuji Photo Film Co. Ltd. ADR (9) 100,938
2,000 Koekisha Co. Ltd. (29) 55,371
7,000 Nittetsu Mining Co., Ltd. (22) 54,716
4,000 Secom Co., Ltd. (29) 293,799
5,000 Tokio Marine & Fire Ins. Co. Ltd. (18) 65,502
400 Toho Co. (20) 66,026
----------
912,623
----------
FRANCE (4.7%)
2,150 Emin-Leydier (14) 151,086
2,000 Eramet (14) 92,244
200 Eurafrance (34) 82,033
1,000 Legrand ADP (10) 125,432
750 Marine Wendel (34) 76,587
800 Groupe NSC (19) 103,477
900 Rougier SA (14) 47,101
----------
677,960
----------
LATIN AMERICA (3.8%)
10,000 Antofagasta Holdings plc (21) 76,271
50,000 Cresud SA (1) 111,516
42,500 Industrias Penoles, SA de CV (1) 203,198
35,360 Ledesma SA (1) 42,438
515,000 Grupo Fernandez Editors (25) 109,146
----------
542,569
----------
HONG KONG (2.1%)
254,457 CDL Hotels Intl. Ltd. (16) 103,465
300,000 China-Hong Kong Photo Products (9) 87,131
100,000 Shaw Brothers (Hong Kong) Ltd.(20) 112,301
----------
302,897
----------
</TABLE>
<PAGE> 43
OHIO NATIONAL FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 199
<TABLE>
<CAPTION>
Market
Shares Foreign Common Stock Value
- -------------------------------------------------------------
<S> <C>
GERMANY (1.9%)
100 Axel Springer Verlag AG (20) $ 88,919
325 Buderus AG (5) 180,478
----------
269,397
----------
UNITED KINGDOM (1.6%)
70,000 ED & F Man (34) 230,561
----------
NEW ZEALAND (1.2%)
60,000 Carter Holt Harvey Limted (14) 155,574
5,500 Shortland Properties, Ltd. (27) 3,743
30,000 Wrightson Ltd. (1) 19,192
----------
178,509
----------
BELGIUM (1.0%)
700 Engrais Rosier SA (34) 149,872
SINGAPORE (1.0%)
85,000 Intraco Ltd. (34) 112,961
6,500 Singapore Bus Service Ltd. (32) 31,143
----------
144,104
----------
SOUTH AFRICA (1.0%)
50,000 Avgold Ltd. (22) 49,068
15,000 Vaal Reefs Exploration Ltd. (22) 72,188
2,500 Western Areas Gold Mining Ltd. (2) 16,816
----------
138,072
----------
CANADA (0.8%)
5,000 Noranda, Inc. (21) 107,716
----------
THAILAND (0.7%)
20,000 Oriental Hotel (16) 98,592
----------
SPAIN (0.6%)
12,000 Energia e Industrias Aragonesas (7) 86,360
----------
NETHERLANDS (0.5%)
1,300 Bosch & Keuning NV (20) 44,131
2,080 German City Estates NV (27) 28,519
----------
72,650
----------
SWEDEN (0.4%)
5,000 Bylock & Nordsjofrakt AB 'B'(32) 23,004
5,000 Gorthon Lines (32) 29,225
----------
52,229
----------
PHILIPPINES (0.2%)
70,000,000 Manila Mining Corp. 'B' (22) 34,500
MISCELLANEOUS (1.5%)
100,000 Lonrho plc (34) 212,096
----------
TOTAL FOREIGN COMMON STOCK
(37.0%) (COST $5,163,671) $5,296,438
----------
TOTAL COMMON STOCKS
(68.9%) (COST $9,072,178) $9,856,987
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares U.S. Preferred Stock Value
- -------------------------------------------------------------
<S> <C>
MEDIA (0.4%)
2,000 Cowles Media Co., Non voting $ 59,000
----------
Total U.S. Preferred Stock
(0.4%) (Cost $46,250) $ 59,000
----------
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Foreign Preferred Stock Value
- -------------------------------------------------------------
<S> <C>
INDONESIA (1.5%)
4,000 Freeport McMoRan Pfd. 'C' (22) $ 118,000
5,000 Freeport McMoRan Pfd. 'D' (22) 91,250
----------
209,250
----------
NEW ZEALAND (1.4%)
35,000 Independent Press Communications (25) 198,890
----------
TOTAL FOREIGN PREFERRED STOCK
(2.9%) (COST $426,641) $ 408,140
----------
TOTAL PREFERRED STOCK
(3.3%) (COST $472,891) $ 467,140
----------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Convertible Debentures Value
- -------------------------------------------------------------
<S> <C>
U.S. DOLLAR (0.9%)
$50,000 Cheil Jedang 3.000%
due 12-31-06 (9) $ 60,250
55,000 IRSA
due 08-02-03 (4) 62,150
----------
122,400
----------
NON-U.S. DOLLAR (0.5%)
2,000 FF Immobiliere Hoteliere 5.000%
due 01-01-01 (16) 64,060
11,000 NZ Shortland Properties Inc. 7.500%
due 12-31-98 (27) 7,411
----------
71,471
----------
Total Convertible Debentures
(1.4%) (COST $190,145) $ 193,871
----------
</TABLE>
<TABLE>
<CAPTION>
Face Market
Amount Non-Convertible Bonds Value
- -------------------------------------------------------------
<S> <C>
U.S. DOLLAR (6.6%)
$50,000 Cemex SA 9.500%
due 09-20-01 (6) $ 51,733
148,500 Federal Republic Of Brazil 6.500%
due 04-15-06 (15) 137,177
200,000 Grupo Televisa 13.250%
due 05-15-08 (20) 139,750
339,500 Republic of Argentina FRB 6.625%
due 03-31-05 (15) 319,342
250,000 Republic of Venezuela 6.500%
due 12-18-07 (15) 232,031
50,000 PT Pabrik Kertas Tjiwi Kimia
13.250% due 08-01-01 (14) 57,128
----------
937,161
----------
TOTAL NON-CONVERTIBLE BONDS
(6.6%) (COST $770,472) $ 937,161
----------
</TABLE>
<PAGE> 44
OHIO NATIONAL FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ------------------------------------------------------------
<S> <C> <C>
AEROSPACE (3.1%)
$450,000 Raytheon Co.
5.870% 07-14-97 $449,046
---------
Chemicals (9.5%)
700,000 Praxair Inc.
5.640% 07-01-97 700,000
669,000 Praxair Inc.
5.720% 07-07-97 668,362
---------
1,368,362
---------
COMMUNICATIONS (4.9%)
700,000 AT&T Capital Corp.
6.100% 07-03-97 699,763
---------
OIL, ENERGY & NATURAL GAS (3.8%)
537,000 Louisiana Land & Exploration
5.730% 07-03-97 536,829
---------
TOTAL SHORT-TERM NOTES
(21.3%) (COST $3,054,000) $3,054,000
----------
TOTAL HOLDINGS
(COST $13,559,686)(A) $14,509,159
</TABLE> ===========
(a) Also represents cost for Federal Income tax purposes.
* Non-income producing securities.
Foreign Currencies
NZ - New Zealand Dollar
FF - French Franc
<TABLE>
<CAPTION>
Industry Classifications
<S> <C> <C>
(1) Agriculture (12) Energy and Oil (23) Packaging
(2) Automotive (13) Food & Beverage (24) Paper
(3) Banking (14) Forest Products (25) Publishing
(4) Building Products (15) Governmental (26) Rail Equipment
(5) Capital Goods (16) Hotels (27) Real Estate
(6) Cement (17) Health Care (28) Retailing
(7) Chemicals (18) Insurance (29) Services
(8) Computer Products (19) Machinery (30) Steel
(9) Consumer Products (20) Media (31) Textile
(10) Electrical Products (21) Metal (non-ferrous) (32) Transportation
(11) Electronics (22) Mining (33) Utilities
(34) Miscellaneous
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 45
OHIO NATIONAL FUND, INC
GLOBAL CONTRARIAN PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $13,559,686) .................... $14,509,159
Cash in bank ........................................... 197,588
Unrealized gain on forward currency
contracts (note 5) ................................... 43,221
Receivable for fund shares sold ........................ 256,604
Receivable for securities sold ......................... 272,954
Dividends and accrued interest receivable .............. 59,248
Other .................................................. 145
------------
Total assets ......................................... 15,338,919
------------
Liabilities:
Unrealized loss on forward currency
contracts (note 5) ................................... 1,976
Payable for securities purchased ....................... 581,558
Payable for investment management
services (note 3) .................................... 10,574
Other accrued expenses ................................. 6,810
Dividends payable ...................................... 174,761
------------
Total liabilities .................................... 775,879
------------
Net assets at market value ................................ $14,583,240
============
Net assets consist of:
Par value, $1 per share ................................ $ 1,193,931
Paid-in capital in excess of par value ................. 11,941,133
Accumulated undistributed net realized
gain on investments .................................. 437,508
Net unrealized appreciation (depreciation) on:
Investments (note 1) ................................. 949,473
Foreign currency related transactions ................ (1,202)
Forward currency contracts (note 5) .................. 41,245
Undistributed net investment income .................... 1,152
------------
Net assets at market value ................................ $14,583,240
============
Shares outstanding (note 4) ............................... 1,193,931
Net asset value per share ................................. $ 12.20
============
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest ................................................ $ 145,097
Dividends (net of $6,952 foreign taxes withheld) ........ 131,761
------------
Total investment income ............................... 276,858
------------
Expenses:
Management fees (note 3) ................................ 57,768
Custodian fees (note 3) ................................. 20,683
Directors' fees (note 3) ................................ 410
Professional fees ....................................... 1,347
Other ................................................... 1,728
------------
Total expenses ........................................ 81,936
------------
Net investment income ................................. $ 194,922
============
Realized and unrealized gain (loss) on
investments and foreign currency:
Net realized gain from:
Investments ........................................... $ 437,508
Forward currency related transactions ................. 107,352
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments ......................................... 505,371
Foreign currency related transactions ............... (4,926)
------------
Net gain on investments ............................. 1,045,305
------------
Net increase in net
assets from operations .............................. $1,240,227
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 46
OHIO NATIONAL FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
6-30-97 12-31-96
------------ --------------
<S> <C> <C>
From operations:
Net investment income .......................................... $ 194,922 $ 1,901,178
Realized gain on investments and foreign currency transactions . 544,860 7,010,378
Unrealized gain on investments and foreign currency transactions 500,445 5,979,693
------------ -------------
Net increase in assets from operations ..................... 1,240,227 14,891,249
------------ -------------
Dividends and distributions to shareholders:
Dividends declared ............................................. (393,195) (4,697,527)
Capital gains distributions .................................... (203,560) (1,691,528)
------------ -------------
Total dividends and distributions .......................... 698,755 6,389,055
------------ -------------
From capital share transactions (note 4):
Received from shares sold ...................................... 3,223,549 37,362,568
Received from dividends reinvested ............................. 596,755 6,389,055
Paid for shares redeemed ....................................... (1,190,289) (5,558,345)
------------ -------------
Increase in net assets derived from capital share transactions 2,630,015 38,193,278
Increase in net assets ................................... 3,273,487 46,695,472
Net Assets:
Beginning of period ............................................ 11,289,753 90,593,727
------------ -------------
End of period (a) .............................................. $14,563,240 $137,289,199
============ =============
(a) Includes undistributed net investment income of .............. $ 1,152 $ 882,647
============ =============
<CAPTION>
Financial Highlights (Unaudited)
Six Months Year 4-1-95
Ended Ended to
June 30, 1997 12-31-96 12-31-95
------------- -------- --------
<S> <C> <C> <C>
Per share data:
Net asset value, beginning of period .................. $11.66 $10.80 $10.00
Income from investment operations:
Net investment income .............................. 0.18 0.28 0.13
Net realized and unrealized gain on investments
and foreign currency transactions ................ 0.93 1.00 0.75
------ ------ ------
Total income from investment operations ........ 1.11 1.28 0.88
------ ------ ------
Less distributions:
Dividends declared ................................. (0.36) (0.33) (0.08)
Distributions from net realized capital gains ...... (0.21) (0.09) 0.00
------ ------ ------
Total distributions .............................. (0.57) (0.42) (0.08)
------ ------ ------
Net asset value, end of period ........................ $12.20 $11.66 $10.80
====== ====== ======
Total return .......................................... 9.84(b) 12.09% 8.89(b)
Ratios and supplemental data:
Ratio of expenses to average net assets ............ 1.27(a) 1.29% 1.58%(a,d)
Ratio of net investment income to average net assets 3.03(a) 2.44% 1.64%(a,d)
Portfolio turnover rate ............................... 18%(b) 18% 6%(a)
Average commission rate (c) ........................... $0.01 $0.03 N/A
Net assets at end of period (millions) ................ $14.6 $11.3 $ 4.4
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security
transactions divided by the total number of shares purchased and sold for
which commissions were charged.
(d) The advisor has reimbursed certain operating expenses of the Global
Contrarian Portfolio for the period ended December 31, 1995. Had the
advisor not reimbursed such expenses, the annualized ratio of expenses
to average net assets would have been 1.90% and the annualized raio of
net investment income to average net assets would have been 1.32%.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 47
AGGRESSIVE GROWTH PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The principal investment objective of the Aggressive Growth Portfolio is to seek
capital growth. The portfolio invests in a diversified collection of securities
believed to represent attractive growth opportunities.
PERFORMANCE AS OF JUNE 30, 1997
AVERAGE ANNUAL TOTAL RETURNS:
One-year 7.80%
Three-year N/A
Five-year N/A
Since inception (3/31/95) 14.65%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
With few exceptions, we have been very pleased with the quality and performance
of the companies in the portfolio. Only a small portion of our companies have
failed to deliver on their earnings projections. The vast majority have been
meeting or exceeding expectations. This is a strong statement, considering the
high expectations we have for companies in the portfolio. As a result, no
significant changes were made to the portfolio during the quarter.
The U.S. stock market is benefiting from near-perfect conditions. Corporate
earnings have been remarkably strong, so in most cases valuations have not
become excessive even though stock prices have risen substantially. Inflation
and interest rates remain in a secular decline, making fixed-income investments
less attractive compared with stocks. The baby boomers are just beginning to
ratchet up their savings for retirement, creating a huge demand for financial
assets. This surge in demand comes at a time when the supply of stocks has not
been growing as mergers, acquisitions and share repurchases have more than
offset new stock offerings.
Of course, history tells us that these good times will eventually come to an
end. But in the meantime, we plan to participate fully in this unusually good
environment for common stocks. In addition, the valuations afforded most stocks
remain well below those on the few large companies that dominate the major
market indexes. We believe that eventually market interest will rotate to the
sectors offering the best relative value. With our significant exposure to
small- and mid-capitalization stocks, the portfolio is positioned to benefit
from this expected rotation.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Agressive Growth Portfolio
(Commenced Operations March 31, 1995) NASDAQ Composite Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
03/31/95 $10,000.00 03/31/95 $10,000.00
06/30/95 10.27% $11,027.00 06/30/95 14.22% $11,422.00
12/31/95 15.13% $12,695.39 12/31/95 12.71% $12,873.74
06/30/96 -1.74% $12,474.49 06/30/96 12.63% $14,499.69
12/31/96 2.55% $12,792.58 12/31/96 8.95% $15,797.41
06/30/97 5.13% $13,448.84 06/30/97 11.70% $17,645.71
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
1. Ocean Energy 4.5
2. Danka Business Systems ADR 4.5
3. TCF Financial 2.3
4. Rainforest Cafe, Inc. 2.3
5. Central Garden & Pet Co. 2.3
6. McKesson Corp. 1.9
7. IBM 1.8
8. Dentsply 1.8
9. Sybron International 1.8
10. Noble Drilling 1.7
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
Business Services 14.4
Oil, Energy & Natural Gas 12.3
Medical and Related 11.1
Computer and Related 10.3
Retail 10.3
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 48
OHIO NATIONAL FUND, INC.
AGGRESSIVE GROWTH
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (1.3%)
5,800 Greenwich Air Service Cl. B $168,563
1,800 * UNC Inc. 26,325
---------
194,888
---------
AUTOMOTIVE AND RELATED (4.7%)
7,000 * Coach USA Inc. 185,937
4,950 Harley-Davidson, Inc. 237,291
4,700 Hertz Corporation 169,200
8,350 * Miller Industries Inc. 133,600
---------
726,028
---------
BANKING (5.0%)
1,200 BankAmerica Corp. 77,475
1,304 Chase Manhattan Corp. 126,569
1,225 Citicorp 147,689
600 Household International, Inc. 70,463
7,000 TCF Financial Corp. 345,625
---------
767,821
---------
BUSINESS SERVICES (14.4%)
5,323 * Accustaff Inc. 126,089
500 * Action Performance Co. 12,125
1,900 * Budget Group Inc. 65,550
6,200 * CUC International 160,037
450 * Ceridian Corporation 19,013
3,100 * Checkfree Corporation 54,637
4,800 * Consolidated Graphics, Inc. 200,400
16,975 Danka Business Systems ADR 693,853
1,150 * Equity Corporation International 27,816
2,650 * Fiserv Inc. 118,256
3,600 * Hub Group Inc. Cl. A 108,450
1,700 * Lason Inc. 47,812
3,275 * Outdoor Systems Inc. 125,269
5,550 * PMT Services Inc. 84,638
3,050 Pittston Brink's Group 91,500
6,000 * Sitel Corporation 123,750
800 Stewart Enterprises Inc. Cl. A 33,600
3,200 * Universal Outdoor Holdings 111,600
---------
2,204,395
---------
COMPUTER AND RELATED (10.3%)
2,750 * America Online, Inc. 152,969
1,200 * Aware Inc. 17,700
2,200 * Compaq Computer Corp. 218,350
2,150 Computer Associates Intl. Inc. 119,728
700 * Emulex Corporation 10,675
2,850 * Hummingbird Communications Ltd. 73,209
4,850 * Individual Inc. 19,400
525 Intel Corp. 74,452
3,000 International Business Machines 270,562
1,700 * Iona Technologies ADR 33,575
2,210 * McAfee Associates Inc. 139,506
600 * Microsoft Corp. 75,825
2,100 * National Techteam Inc. 44,888
1,000 * Registry Inc. 46,000
400 * Sabre Group Holdings Inc. 10,850
3,250 * Sterling Commerce Inc. 106,844
1,900 * Storage Technology Corp. 84,550
3,380 * Sykes Enterprises Inc. 87,880
---------
1,586,963
COMMUNICATIONS (0.7%)
400 * Ascend Communications Inc. $15,750
2,000 * Communications Central Inc. 22,000
1,500 * Micros Systems Inc. 63,000
---------
100,750
---------
CONSUMER PRODUCTS (2.2%)
3,350 * Bacou USA Inc. 54,438
300 Newell Companies, Inc. 11,887
2,500 Philip Morris Companies, Inc. 110,937
1,600 Regis Corporation 37,800
3,250 Service Corporation International 106,844
400 Sunbeam Corporation Inc. 15,100
---------
337,006
---------
DRUGS (3.1%)
27,300 * Halsey Drug Co. Inc. 126,262
5,700 * Ivax Corp. 63,769
3,825 McKesson Corp. 296,438
---------
486,469
---------
DURABLE GOODS (2.0%)
3,550 Applied Power Inc. Cl. A 183,269
600 * Iron Mountain Inc. 18,000
4,500 Watsco Inc. 112,500
---------
313,769
---------
ELECTRICAL EQUIPMENT (4.4%)
2,700 Belden Inc. 91,969
2,250 * Berg Electronics Corp. 80,859
800 * General Cable Corp. 20,500
1,100 * General Instrument Corp. 27,500
2,075 Harman International Industries Inc. 87,409
5,850 * Kent Electronics Corp. 214,622
600 * Micron Technology 23,963
1,400 Scientific Atlanta Inc. 30,625
300 * Uniphase Corp. 17,475
1,400 Westinghouse Electric Corp. 32,375
550 Xerox Corp. 43,381
---------
670,678
---------
ENTERTAINMENT AND LEISURE (1.7%)
8,200 International Game Technology 145,550
2,200 * Regal Cinemas Inc. 72,600
1,426 * SCP Pool Corp. 41,722
---------
259,872
---------
FINANCE (2.8%)
2,100 American Express Co. 156,450
4,000 * Associates First Capital Corp. 222,000
3,250 Rollins Truck Leasing Corp. 48,344
---------
426,794
---------
FOOD & RELATED (0.1%)
300 Lancaster Colony Corp. 14,512
HOTEL/LODGING (0.9%)
5,600 * Candlewood Hotel Co. Inc. 46,900
1,700 * Host Marriott Corp. 30,281
1,500 * Promos Hotel Corp. 58,125
---------
135,306
---------
</TABLE>
<PAGE> 49
OHIO NATIONAL FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
INDUSTRIAL SERVICES (2.3%)
5,250 * Hexcel Corp. $90,563
1,450 * MSC Industrial Direct Co. Cl. A 58,181
350 National Service Industries 17,041
300 * Waste Industries Inc. 5,288
7,700 * Wilmar Industries Inc. 187,686
---------
358,759
---------
INSURANCE (0.9%)
1,700 Conesco, Inc. 62,900
250 Hartford Financial Services Group 20,688
1,100 MGIC Investment Corp. 52,731
---------
136,319
---------
MEDIA AND PUBLISHING (1.6%)
2,500 * Clear Channel Communications 153,750
5,850 * Getty Communications PLC ADR 86,288
---------
240,038
---------
MEDICAL AND RELATED (11.1%)
1,200 * American Oncology Resources 20,250
600 Baxter International Inc. 31,350
1,100 Becton Dickinson & Company 55,687
1,250 * Boston Scientific Corp. 76,797
8,000 * Cohr Inc. 150,000
2,850 * Covance Inc. 55,041
600 * Cytyc Corporation 16,275
5,525 Dentsply International Inc. 270,725
1,950 * NCS Healthcare Inc. Cl. A 59,231
1,050 Omnicare Inc. 32,944
2,650 * Sabratek Corp. 74,200
5,700 * Steris Corp. 213,038
18,500 * Suburban Ostomy Supply Co. 173,437
6,775 * Sybron International Corp.-Wis. 270,153
13,875 * United Dental Care Inc. 208,125
---------
1,707,253
---------
OIL, ENERGY AND NATURAL GAS (12.3%)
1,500 * Cooper Cameron Corp. 70,125
2,200 * Ensco International Inc. 116,050
2,200 * Global Marine Inc. 51,150
6,700 * Marine Drilling Company Inc. 131,487
4,300 * Nabors Industries Inc. 107,500
11,650 * Noble Drilling Corp. 262,853
15,025 * Ocean Energy Corp 694,906
750 * Rowan Companies, Inc. 21,141
1,400 * Santa Fe Interantional Corp. 47,600
1,100 Schlumberger Ltd. 137,500
8,950 Union Pacific Resources 222,631
550 Wilcor Inc. 21,416
---------
1,884,359
---------
RESTAURANTS (3.1%)
5,050 * Casa Ole' Restaurants Inc. 46,712
18,410 * Quality Dining Inc. 86,297
13,600 * Rainforest Cafe Inc. 345,100
---------
478,109
---------
REAL ESTATE AND LEASING (0.1%)
400 Charles E. Smith Residential Rlty $11,550
-------------
RETAIL (10.3%)
3,250 * Borders Group Inc. 78,406
1,200 Casey's General Store 25,838
13,850 * Central Garden and Pet Co. 346,250
5,085 * Consolidated Stores Corp. 176,704
2,800 * Eagle Hardware & Garden Co. 64,050
1,850 * Goody's Family Clothing Co. 50,644
5,050 * Just For Feet Inc. 88,059
29,150 * Movie Gallery Inc. 185,831
6,500 * Renters Choice Inc. 129,188
1,600 Rite Aid Corp. 79,800
1,900 Shopko Stores Inc. 48,450
4,900 * Staples Inc. 113,925
1,400 * U.S. Office Products 42,787
7,650 * Zale Corp. 151,566
-------------
1,581,498
-------------
TRANSPORTATION & EQUIPMENT (1.1%)
1,900 Burlington Northern Santa Fe 170,762
-------------
TOTAL COMMON STOCK
(96.4%) (Cost $13,693,601) $14,793,898
-------------
<CAPTION>
Face Market
Amount Repurchase Agreements Value
- --------------------------------------------------------------------------------
FINANCIAL (1.7%)
$267,000 Star Bank 5.250% due 07-01-97
repurchase price $267,039
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $270,000) $267,000
-------------
TOTAL REPURCHASE AGREEMENTS
(1.7%) (Cost $267,000) $267,000
-------------
TOTAL HOLDINGS
(Cost $13,960,601) (a) $15,060,898
=============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 50
<TABLE>
OHIO NATIONAL FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $13,960,601) ......................... $15,060,898
Cash in bank ................................................. 935
Receivable for fund shares sold .............................. 91,540
Receivable for securities sold ............................... 401,331
Dividends and accrued interest receivable .................... 6,689
Other ........................................................ 822
------------
Total assets ............................................... 15,562,215
------------
Liabilities:
Payable for investment management
services (note 3) .......................................... 9,802
Payable for securities purchased ............................. 112,986
Payable for shares redeemed .................................. 12,933
Other accrued expenses ....................................... 1,006
------------
Total liabilities .......................................... 136,727
------------
Net assets at market value ...................................... $15,425,488
============
Net assets consist of:
Par value, $1 per share ...................................... $1,484,170
Paid-in capital in excess of par value ....................... 14,002,223
Accumulated undistributed net realized
loss on investments (note 1) ............................... (1,146,080)
Net unrealized appreciation on investments (note 1). 1,100,297
Undistributed net investment loss ............................ (15,122)
------------
Net assets at market value ...................................... $15,425,488
============
Shares outstanding (note 4) .................................... 1,484,170
Net asset value per share ....................................... $10.39
============
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest ...................................................... $18,352
Dividends ..................................................... 28,360
------------
Total investment income ..................................... 46,712
------------
Expenses:
Management fees (note 3) ...................................... 51,438
Custodian fees (note 3) ....................................... 1,956
Directors' fees (note 3) ...................................... 364
Professional fees ............................................. 1,198
Fund accounting fees .......................................... 4,123
Other ......................................................... 2,753
------------
Total expenses .............................................. 61,832
------------
Net investment loss ......................................... ($15,120)
============
Realized and unrealized gain on investments:
Net realized gain from investments ............................ $278,142
Net increase in unrealized
appreciation on investments ................................. 554,278
------------
Net gain on investments ................................... 832,420
------------
Net increase in net
assets from operations .................................... $817,300
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 51
OHIO NATIONAL FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<CAPTION>
6 Months Ended Year Ended
6-30-97 12-31-96
------------ ------------
<S> <C> <C>
From operations:
Net investment income (loss) ................................... ($15,120) $1,259,285
Realized gain (loss) on investments ............................ 278,142 (1,358,319)
Unrealized gain on investments ................................. 554,278 377,912
------------ ------------
Net increase in assets from operations ..................... 817,300 278,878
------------ ------------
Dividends and distributions to shareholders:
Dividends declared ............................................. (172,523) (1,271,325)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ...................................... 3,627,392 8,883,382
Received from dividends reinvested ............................. 172,523 1,271,325
Paid for shares redeemed ....................................... (1,028,783) (1,158,142)
------------ ------------
Increase in net assets derived from capital share transactions 2,771,132 8,996,565
Increase in net assets ................................... 3,415,909 8,004,118
Net Assets:
Beginning of period ............................................ 12,009,579 4,005,461
------------ ------------
End of period (a) .............................................. $15,425,488 $12,009,579
============ ============
(a) Includes undistributed net investment income (loss) of ....... ($15,122) $172,523
============ ============
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months Year 4-1-95
Ended Ended to
June 30, 1997 12-31-96 12-31-95
------------- -------- --------
<S> <C> <C> <C>
Per share data:
Net asset value, beginning of period ...................... $10.03 $11.84 $10.00
Income from investment operations:
Net investment income (loss) ........................... (0.01) 1.64 1.56
Net realized and unrealized gain (loss) on investments . 0.51 (1.59) 1.08
------- -------- --------
Total income from investment operations .............. 0.50 0.05 2.64
------- -------- --------
Less distributions:
Dividends declared ..................................... (0.14) (1.86) (0.80)
------- -------- --------
Net asset value, end of period ............................ $10.39 $10.03 $11.84
======= ======== ========
Total return .............................................. 5.13%(b) 0.76% 26.95%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets ................ 0.95%(a) 1.01% 1.02%(a)
Ratio of net investment income to average net assets ... (0.23%)(a) 15.81% 18.18%(a)
Portfolio turnover rate ................................... 105%(b) 1987% 1488%
Average commission rate (c) ............................... $0.06 $0.03 N/A
Net assets at end of period (millions) .................... $15.4 $12.0 $4.0
</TABLE>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commission paid on equity security
transactions divided by the total number of shares purchased and sold for
which commissions were charged.
The accompanying notes are an integral part of these financial statements.
<PAGE> 52
CORE GROWTH PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The objective of the Core Growth Portfolio is to provide long-term capital
appreciation.
PERFORMANCE AS OF JUNE 30, 1997
TOTAL RETURN:
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 0.80%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
While June's moderate gains don't give us cause for great celebration, the
advance was welcome given that the second quarter began with small cap stock
performance lagging that of the large caps by a magnitude not seen since 1937.
Larger cap stocks and blue-chip type names continued to log solid gains during
June. Despite the fact that large cap equities slightly outperformed the Russell
2000 Index and our relevant growth benchmarks for the month, the strong
performance of the big caps is in many ways a positive sign for the broader
market. It suggests that investors still believe strongly in domestic equities,
and as the economy remains stable it can only be a matter of time before that
support spreads to lift smaller cap stocks as well.
We are just completing the period of earnings pre-releases. Certainly, there
were some negative announcements regarding June numbers, some of which came from
companies we monitor in the Pilgrim Baxter universe. However, investors seemed
more willing to accept this round of earnings shortfalls as isolated,
company-specific events, rather than letting a few announcements infect an
entire sector.
Another sign that the health of smaller cap and growth stocks is returning,
initial public offerings and secondaries have resumed. The deals span more
industries than just technology and they are not being bid up or down as
egregiously as is the case when small cap stocks have peaked or gone too far.
During the next few weeks the market will be digesting and reacting to what we
expect to be some very positive earnings news. If investors are once again
willing to look at smaller companies and reward real growth in earnings, which
hasn't been the case for more than a year, then we believe there will be some
very positive days ahead for the types of companies we focus on.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Core Growth Portfolio
(Commenced Operations January 3, 1997) Russell 2000 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
12/31/96 $10,000.00 12/31/96 $10,000.00
06/30/97 0.80% $10,080.00 06/30/97 17.76% $11,776.00
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
1. Advanced Fibre Communications 1.9
2. Clear Channel Communications 1.8
3. Gartner Group 1.8
4. Cambridge Technology 1.7
5. Parexel 1.7
6. Teletech Holdings 1.7
7. Applied Materials 1.7
8. Sitel 1.6
9. HBO 1.6
10. The Money Store 1.6
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
Computer and Related 22.8
Business Services 15.4
Medical and Related 9.3
Communications 6.8
Electrical Equipment 4.9
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 53
OHIO NATIONAL FUND, INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Repurchase Agreements Value
- --------------------------------------------------------------
<S> <C> <C>
FINANCIAL (14.3%)
$978,000 Star Bank 5.250% due 07-01-97
repurchase price $978,143
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $978,000) $978,000
------------
TOTAL REPURCHASE AGREEMENTS
(14.3%) (COST $978,000) $978,000
------------
Market
Shares Common Stock Value
- --------------------------------------------------------------
AUTOMOTIVE AND RELATED (2.5%)
1,600 Harley Davidson $76,700
6,100 * Miller Industries Inc. 97,600
------------
174,300
------------
BUSINESS SERVICES (15.4%)
2,500 * Accustaff Inc. 59,219
2,800 * Apollo Group 98,700
2,600 * Corrections Corp. 103,350
3,000 * CUC International Inc. 77,438
3,700 * Cambridge Technology Partners 118,400
3,400 * Gartner Group 122,187
1,200 * HFS Inc. 69,600
2,200 * Romac International Inc. 72,050
1,100 * RWD Technologies 18,975
5,400 * Sitel Corp. 111,375
4,500 * Teletech Holdings 117,281
2,900 * US Office Products Corp. 88,631
------------
1,057,206
------------
COMMUNICATIONS (6.8%)
3,000 * ADC Telecommunications 100,125
2,100 * Advanced Fibre Communications 126,788
2,900 * LCI International 63,437
3,700 * Pairgain 57,350
1,900 * Tellabs Inc. 106,163
900 * Videoserver Inc. 11,925
------------
465,788
------------
COMPUTER AND RELATED (22.8%)
2,800 * Aspen Technology 105,350
1,900 * CDW Computer Centers Inc. 100,819
900 * Cognex Corp. 23,850
1,100 * Computer Sciences Corp. 79,338
300 * Dell Computers 35,231
2,300 * Electronics for Imaging 108,675
1,600 HBO & Co. 110,200
2,700 * HNC Software 102,937
400 Intel Inc. 56,725
500 * International Network Services 13,000
2,200 * Manugistics Inc. 97,900
1,700 * McAffe Associates 107,312
400 * MicroTouch Inc. 9,200
2,000 * Parametric Technology Corp. 85,125
2,400 * Remedy Corp. 96,000
2,000 * Rational Software Corp. 33,625
2,200 * Security Dynamics 81,125
2,300 * Sterling Commercial 75,612
3,250 * Scopus Technology 72,719
2,300 * Synopsys Inc. 84,525
1,200 * Visio Software 84,600
------------
1,563,868
------------
Market
Shares Common Stock Value
- --------------------------------------------------------------
CONSUMER PRODUCTS (1.6%)
3,150 * Blyth Industries Inc. $106,313
------------
DRUGS (5.2%)
2,500 * Dura Pharmacy 99,688
700 Eli Lilly 76,519
3,700 * PAREXEL INTERNATIONAL 117,475
900 * Quintiles Transnational Corp. 62,662
------------
356,344
------------
DURABLE GOODS (0.3%)
1,100 * Comfort Systems 17,188
------------
ELECTRICAL EQUIPMENT (4.9%)
1,900 * Altera Corp. 95,950
1,700 Linear Tech 87,975
3,200 * Microchip Technology 95,200
1,700 * Thermo Electronics 58,438
------------
337,563
------------
ENTERTAINMENT AND LEISURE (1.0%)
2,100 * Regal Cinemas 69,300
------------
FINANCIAL SERVICES (4.0%)
1,800 Associates First Capital Co. 99,900
1,200 * Seacor Smit Inc. 62,775
3,800 The Money Store 109,013
------------
271,688
------------
HOTEL/LODGING (1.1%)
1,100 * Capstar Hotel Co. 35,200
1,100 * Signature Resorts 38,019
------------
73,219
------------
INDUSTRIAL SERVICES (2.9%)
2,200 * United States Filter Corp. 59,950
2,100 * USA Waste Services Inc. 81,113
1,400 * UTD Waste 57,400
------------
198,463
------------
MACHINERY (1.7%)
1,600 * Applied Material 113,300
------------
MEDIA AND PUBLISHING (1.8%)
2,000 * Clear Channel Communications 123,000
------------
MEDICAL AND RELATED (9.3%)
300 * Gulf Southern Medical 5,850
3,600 * Health Management Associates 102,600
4,200 * Healthsouth Corp. 104,737
2,300 * NCS Healthcare 69,862
3,000 Omnicare Inc. 94,125
1,400 * Oxford Health 100,450
3,100 * Phycor Inc. 106,756
2,600 * Physician Sales 49,400
------------
633,780
------------
OIL, ENERGY AND NATURAL GAS (0.8%)
1,800 * Varco International 58,050
------------
</TABLE>
<PAGE> 54
OHIO NATIONAL FUND, INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Shares Common Stock Value
-------------------------------------------------------------------
<S> <C> <C>
RETAIL (0.6%)
1,700 * West Marine $43,775
------------
TEXTILES AND RELATED (2.7%)
1,300 * Jones Apparel 62,075
600 * Ralph Lauren 16,425
400 St. John Knits 21,600
2,100 * Tommy Hilfiger 84,393
------------
184,493
------------
TRANSPORTATION (0.5%)
1,400 * Eagle USA Air Freight 37,975
------------
TOTAL COMMON STOCK
(85.9%) (COST $5,316,211) $5,885,613
------------
TOTAL HOLDINGS
(COST $6,294,211) $6,863,613
============
<FN>
(a) Also represents cost for Federal income tax purposes.
* Non-income producing security.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 55
OHIO NATIONAL FUND, INC.
CORE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $6,294,211) ....................$6,863,613
Cash in bank ......................................... 418
Receivable for fund shares sold....................... 146,081
Receivable for securities sold ....................... 7,725
Dividends and accrued interest receivable ............ 184
----------
Total assets ........................................ 7,018,021
----------
Liabilities:
Payable for securities purchased ..................... 14,300
Payable for investment management
services (note 3) ................................... 5,069
Other accrued expenses ............................... 1,810
----------
Total liabilities ................................... 21,179
----------
Net assets at market value $6,996,842
==========
Net assets consist of:
Par value, $1 per share .............................. $694,687
Paid-in capital in excess of par value ............... 5,934,244
Accumulated undistributed net realized
loss on investments ................................. (198,620)
Net unrealized appreciation on investments (note 1)... 569,401
Undistributed net investment loss .................... (2,870)
----------
Net assets at market value $6,996,842
==========
Shares outstanding (note 4)............................ 694,687
Net asset value per share.............................. $10.07
==========
<CAPTION>
STATEMENT OF OPERATIONS
JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest............................................ $ 26,264
Dividends........................................... 999
----------
Total investment income............................ 27,263
----------
Expenses:
Management fees (note 3)............................ 21,079
Custodian fees (note 3)............................. 1,677
Directors' fees (note 3) ........................... 181
Professional fees................................... 594
Fund accounting fees ............................... 1,789
Other............................................... 1,273
----------
Total expenses..................................... 26,593
----------
Net investment income.............................. $ 670
==========
Realized and unrealized gain (loss) on investments:
Net realized loss from investments ................. $ (198,620)
Net increase in unrealized
appreciation on investments ....................... 569,401
----------
Net gain on investments........................... 370,781
----------
Net increase in net assets
from operations................................... $ 371,451
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 56
OHIO NATIONAL FUND, INC.
CORE GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
From operations:
Net investment income .............................................. $670
Realized loss on investments ....................................... (198,620)
Unrealized gain on investments ..................................... 569,401
----------
Net increase in assets from operations............................ 371,451
----------
Dividends and distributions to shareholders:
Dividends declared ................................................. (3,539)
----------
From capital share transactions (note 4):
Received from shares sold .......................................... 7,401,466
Received from dividends reinvested ................................. 3,539
Paid for shares redeemed ........................................... (776,075)
----------
Increase in net assets derived from capital share transactions..... 6,628,930
----------
Increase in net assets .......................................... 6,996,842
----------
Net Assets:
Beginning of period ................................................ 0
----------
End of period (a) .................................................. $6,996,842
==========
(a) Includes undistributed net investment loss of.................... ($2,870)
==========
<CAPTION>
FINANCIAL HIGHLIGHTS
FOR THE PERIOD FROM JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
Per share data:
Net asset value, beginning of period................................. $10.00
Income from investment operations:
Net realized and unrealized gain on investments .................... 0.08
----------
Less distributions:
Dividends declared ................................................. (0.01)
----------
Net asset value, end of period....................................... $10.07
==========
Total return......................................................... 0.80%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets............................. 1.08%(a)
Ratio of net investment income to average net assets................ 0.27%(a)
Portfolio turnover rate.............................................. 22%(b)
Average commission rate ............................................. $0.02 (c)
Net assets at end of period (millions)............................... $7.0
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security
transactions divided by the total number of shares purchased and sold by
the portfolio.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 57
GROWTH & INCOME PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Growth & Income Portfolio's investment objective is long-term total return.
PERFORMANCE AS OF JUNE 30, 1997
TOTAL RETURN:
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 13.34%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The first half of this year brought a range of market performance as the
small-cap sector underperformed for most of early 1997 before rallying sharply
in May. The historic advance of the overall market has been led by a very narrow
band of large-cap stocks.
Our investment philosophy remains the same -- to produce above average total
return over a range of market environments. We do that with a barbell strategy
in which we allocate 70%-85% of the portfolio to small and mid-cap common
stocks, and the remainder to income producing securities, typically preferred
stocks, convertibles and REITS.
Consistent with our philosophy, our sector allocation is well-diversified.
Energy is our single largest sector at over 17.2%. This is a significant
overweighting to the indices. We have been committed to the Energy sector since
we launched the portfolio and this commitment has resulted in positive
performance. The sector had been out of favor for most of the 1980's and early
1990's, creating attractive valuations compared to many other market sectors.
Additionally, the large integrated oil companies continue to increase their
capital spending and exploration programs. Advancements in drilling and
exploration technology have helped to expand profit margins for exploration
companies.
Many of these stocks significantly underperformed in March. We used weakness at
this time as a buying opportunity and expanded our position to several stocks in
the portfolio. This strategy proved successful as the entire sector has moved up
in the last quarter.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
1/97 6/97
<S> <C> <C>
Growth & income Portfolio
(Commenced operations January 3, 1997) $10,000 $11,334
Russell 2000 Index $10,000 $11,020
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
1. Vans Inc. 2.6
2. Camco International Inc. 1.8
3. Fisher Scientific 1.6
4. Carpenter Technology 1.5
5. Patterson Energy 1.5
6. Nabors Industries 1.5
7. Sunbeam 1.3
8. TCF Financial 1.3
9. CRIIMI Mae Inc. 1.2
10. Santa Fe Int'l. 1.2
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
Oil, Energy & Natural Gas 17.2
Medical and Related 9.5
Computer and Related 7.4
Communications 6.1
Real Estate 5.8
<PAGE> 58
OHIO NATIONAL FUND, INC.
GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
Face Market
Amount Repurchase Agreements Value
---------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (5.1%)
$304,000 Star Bank 5.250%, Due 07-01-97
repurchase price $304,044
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $305,000) $304,000
--------------
TOTAL REPURCHASE AGREEMENTS
(5.1%) (COST $304,000) $304,000
--------------
Face Market
Amount Long-Term Bonds & Notes Value
---------------------------------------------------------------------------
GOVERNMENT (0.3%)
$75,000 US Treasury Strips
Zero coupon, 11-15-17 $18,391
--------------
COMPUTER AND RELATED (0.9%)
50,000 EMC Co.
3.250% 03-15-02 54,625
--------------
DURABLE GOODS (0.5%)
25,000 Itron
6.750% 03-31-04 31,875
--------------
ELECTRICAL EQUIPMENT (0.9%)
75,000 CRUS
6.000% 12-15-03 54,656
--------------
MEDICAL AND RELATED (1.5%)
50,000 Renal Treatment
5.625% 07-15-06 49,500
--------------
35,000 Sunrise Assisted Living
5.500% 06-15-02 40,075
--------------
89,575
--------------
RETAIL (0.4%)
25,000 The Sports Authority
5.250% 09-15-01 23,375
--------------
TOTAL LONG-TERM BONDS & NOTES
(4.5%) (COST$247,073) $272,497
--------------
Market
Shares Common Stock Value
---------------------------------------------------------------------------
AUTOMOTIVE AND RELATED (2.7%)
2,000 Cooper Tire & Rubber $44,000
1,500 Ford Motor Company 56,625
1,250 Harley Davidson 59,922
--------------
160,547
--------------
BANKING (3.1%)
1,250 Great West Financial 67,188
1,000 Southern National Co. 45,000
1,500 TCF Financial Corp. 74,062
--------------
186,250
--------------
BUSINESS SERVICES (0.8%)
2,000 * FYI Inc. 48,000
--------------
Market
Shares Common Stock Value
---------------------------------------------------------------------------
CHEMICALS (2.4%)
2,000 Crompton & Knowles $44,500
1,000 EI Dupont 62,875
600 Imperial Chemicals 34,125
--------------
141,500
--------------
COMMUNICATIONS (4.2%)
2,000 Comsat Corp. 47,625
1,000 Ericsson LM Telephone 39,375
1,000 GTE Corp. 43,875
1,500 * PairGain Technology 23,250
2,650 * TeleCommunications TCI Group 39,419
1,750 * World Communications 56,000
--------------
249,544
--------------
COMPUTER & RELATED (6.5%)
1,250 Adobe Systems 43,828
1,750 * Data Dimensions 38,500
1,750 * Data General Corp. 45,500
4,000 * Discreet Logic 66,000
2,500 * Iomega 49,687
3,000 * Network Computer 34,875
2,500 * Pure Atria Corp. 35,313
3,500 * Tandem 70,875
--------------
384,578
--------------
CONSUMER PRODUCTS (4.0%)
3,400 * Furniture Brands International 65,875
1,250 Phillip Morris Cos. Inc. 55,469
1,250 RJR Nabisco Holdings Corp. 41,250
2,000 Sunbeam 75,500
--------------
238,094
--------------
DRUGS (0.7%)
500 McKesson Corp. 38,750
--------------
DURABLE GOODS (2.7%)
1,250 Applied Power Inc. 64,531
2,000 Fisher Scientific 95,000
--------------
159,531
--------------
Electrical Equipment (3.1%)
2,000 * Cypress Semiconductor 29,000
1,750 * Littlefuse Inc. 49,438
2,500 Scientific Atlanta 54,688
2,250 Westinghouse Electric 52,031
--------------
185,157
--------------
Entertainment & Leisure (0.2%)
978 * Ascent Entertainment Group 8,921
--------------
Financial Services (0.8%)
2,000 Merrill Lynch & Co. STRYPES 47,750
--------------
Food & Related (1.0%)
2,500 International Multi-Foods Corp. 62,813
--------------
Forestry & Paper Products (0.8%)
1,000 International Paper 48,563
--------------
</TABLE>
<PAGE> 59
OHIO NATIONAL FUND, INC.
GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
---------------------------------------------------------------------------
<S> <C> <C>
HOUSING, FURNITURE & RELATED (0.9%)
1,500 Herman Miller $54,000
--------------
INDUSTRIAL SERVICES (2.6%)
3,000 * Giant Cement Holding 56,250
1,000 SPX Corp. 64,812
1,500 * Superior Services 35,625
--------------
156,687
--------------
INSURANCE SERVICES (2.0%)
1,800 * Hartford Life 67,500
1,000 Provident 53,500
--------------
121,000
--------------
MEDIA & PUBLISHING (2.5%)
4,000 * Antec Corporation 47,000
1,500 * General Instruments Corp. 37,500
5,000 * Metromedia International Group 63,125
--------------
147,625
--------------
MACHINERY (2.2%)
1,500 McDermott International 43,781
3,000 * Motive Power Ind. 48,000
1,500 Stewart & Stevenson 39,000
--------------
130,781
--------------
MEDICAL & RELATED (8.0%)
2,000 Adac Labs 47,250
4,000 * Cardio Thorasic Systems 56,000
1,000 * Genentech Inc. 58,938
1,000 * Healthcare Compare 52,375
1,000 * Living Centers of America 39,500
3,000 Morrison Health 47,812
2,500 * Novoste 40,938
3,000 * Sun Healthcare Group Inc. 62,437
2,300 * Tenet Healthcare 67,994
--------------
473,244
--------------
METALS & MINING (3.0%)
2,000 Carpenter Tech 91,500
3,000 * Kaiser Aluminum 36,750
3,000 * Walter Industry Inc. 50,250
--------------
178,500
--------------
OIL, ENERGY & NATURAL GAS (15.8%)
1,900 Camco International 104,025
2,500 * Edge Petroleum 36,875
1,500 * Energy Ventures 63,000
2,750 * Input Output 49,844
4,000 * Key Energy 71,250
900 Louisiana Land & Exploration Co. 51,411
1,250 Mid Ocean Limited 65,547
3,500 * Nabors Industries 87,500
2,750 * Noble Drilling 62,047
1,500 * Oryx Energy Co. 31,688
2,000 * Patterson Energy 90,750
2,000 * Reading & Bates 53,500
1,000 * Rowan Companies Inc. 28,188
2,100 * Santa Fe International Corp. 71,400
750 Sonat 38,437
1,500 Transcanada Pipeline 30,187
--------------
935,649
--------------
RETAIL (0.9%)
2,000 Pier One 53,000
--------------
Market
Shares Common Stock Value
---------------------------------------------------------------------------
TEXTILES & RELATED (3.6%)
2,250 * Nautica Enterprises $59,484
10,000 * Vans Inc. 151,250
--------------
210,734
--------------
TRANSPORTATION (1.8%)
3,000 * Consolidated Freightways Corp. 49,125
1,500 * Hvide Marine Corp. 33,187
1,500 Transrail Holdings A 25,312
--------------
107,624
--------------
TOTAL COMMON STOCK (76.3%)
(COST $3,910,660) $4,528,842
--------------
Real Estate Market
Shares Investment Trusts Value
---------------------------------------------------------------------------
4,500 CRIIMI Mae Inc. $72,000
2,000 Health & Retirement 37,625
1,500 JP Realty 40,688
2,000 LTC Properties 36,250
1,500 Prentiss Property Trust 38,437
3,000 Prime Retail 40,313
2,000 Walden Residential 51,250
--------------
316,563
--------------
TOTAL REAL ESTATE INV. TRUSTS
(5.3%) (COST $309,704) $316,563
--------------
Market
Shares Preferred Stock Value
---------------------------------------------------------------------------
COMMUNICATIONS (1.9%)
2,500 Cablevision Systems Pfd. 8.5% $67,813
400 IXC Communications Pfd. 47,200
--------------
115,013
--------------
INDUSTRIAL SERVICES (0.9%)
1,000 Timt Conv. Pfd. 52,500
--------------
METALS & MINING (0.9%)
1,500 WHX Corp. Holding Pfd. Cl. A 56,344
--------------
OIL, ENERGY & NATURAL GAS (0.6%)
5,100 Mesa Pfd. A 34,105
--------------
REAL ESTATE & LEASING (0.5%)
1,000 Excel Realty Pfd. A 27,250
--------------
TRANSPORTATION & EQUIPMENT (0.9%)
2,100 TWA 8.000% Pfd. 53,025
--------------
TOTAL PREFERRED STOCK $338,237
--------------
(5.7%) (COST $316,305)
</TABLE>
<PAGE> 60
OHIO NATIONAL FUND, INC.
GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997
<TABLE>
<CAPTION>
Face Market
Amount Convertible Debentures Value
---------------------------------------------------------------------------
<S> <C> <C>
HOUSING, FURNITURE & RELATED (0.7%)
$50,000 Empress ICA Sociedad, 5.000%
conv. debentures due 03-15-04 $40,500
--------------
OIL, ENERGY & NATURAL GAS (0.8%)
50,000 Masotech Inc. 4.500% conv.
debentures due 12-15-03 45,688
--------------
RETAIL (0.7%)
25,000 Charming Shoppes 7.500% conv.
debentures due 07-15-06 24,500
25,000 Sunglass Hut Intl. 5.250% conv.
debentures due 06-15-03 17,656
--------------
42,156
--------------
TOTAL CONVERTIBLE DEBENTURES
(2.2%) (COST $120,750) $128,344
--------------
TOTAL HOLDINGS
(COST $5,208,492)(a) $5,888,483
==============
<FN>
* Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 61
OHIO NATIONAL FUND, INC.
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $5,208,492) ..................$5,888,483
Cash in bank ....................................... 694
Receivable for fund shares sold..................... 111,957
Receivable for securities sold ..................... 81,707
Dividends and accrued interest receivable .......... 10,068
----------
Total assets ...................................... 6,092,909
----------
Liabilities:
Payable for securities purchased ................... 23,078
Payable for investment management
services (note 3) ................................. 3,840
Other accrued expenses ............................. 2,758
----------
Total liabilities ................................. 29,676
----------
Net assets at market value $6,063,233
==========
Net assets consist of:
Par value, $1 per share ............................ $538,167
Paid-in capital in excess of par value ............. 4,939,713
Accumulated undistributed net realized
loss on investments ............................... (94,673)
Net unrealized appreciation on investments (note 1) 679,992
Undistributed net
investment income ................................. 34
----------
Net assets at market value $6,063,233
==========
Shares outstanding (note 4).......................... 538,167
Net asset value per share............................ $11.27
==========
<CAPTION>
STATEMENT OF OPERATIONS
JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest........................................... $17,716
Dividends.......................................... 31,902
---------
Total investment income........................... 49,618
---------
Expenses:
Management fees (note 3)........................... 15,014
Custodian fees (note 3)............................ 1,766
Directors' fees (note 3) .......................... 227
Professional fees.................................. 753
Fund accounting fees .............................. 2,071
Other.............................................. 1,692
---------
Total expenses.................................... 21,523
---------
Net investment income............................. $28,095
==========
Realized and unrealized gain (loss) on investments:
Net realized loss from investments ................ ($94,673)
Net increase in unrealized
appreciation on investments ...................... 679,992
---------
Net gain on investments.......................... 585,319
---------
Net increase in net
assets from operations........................... $613,414
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 62
OHIO NATIONAL FUND, INC.
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
From operations:
Net investment income ............................................... $28,095
Realized loss on investments......................................... (94,673)
Unrealized gain on investments....................................... 679,992
----------
Net increase in assets from operations............................ 613,414
----------
Dividends and distributions to shareholders:
Dividends declared .................................................. (28,061)
----------
From capital share transactions (note 4):
Received from shares sold ........................................... 5,813,588
Received from dividends reinvested .................................. 28,061
Paid for shares redeemed ............................................ (363,769)
----------
Increase in net assets derived from capital share transactions..... 5,477,880
----------
Increase in net assets .......................................... 6,063,233
----------
Net Assets:
Beginning of period ................................................. 0
----------
End of period (a) ................................................... $6,063,233
==========
(a) Includes undistributed net investment income of.................... $34
==========
<CAPTION>
FINANCIAL HIGHLIGHTS
FOR THE PERIOD FROM JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
Per share data:
Net asset value, beginning of period................................... $10.00
Income from investment operations:
Net investment income................................................ 0.14
Net realized and unrealized gain on investments ..................... 1.19
----------
Total income from investment operations............................ 1.33
----------
Less distributions:
Dividends declared .................................................. (0.06)
----------
Net asset value, end of period......................................... $11.27
==========
Total return........................................................... 13.34%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets.............................. 1.10%(a)
Ratio of net investment income to average net assets................. 2.54%(a)
Portfolio turnover rate................................................ 15%(b)
Average commission rate ............................................... $0.03 (c)
Net assets at end of period (millions)................................. $6.1
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security
transactions divided by the total number of shares purchased and sold by
the portfolio.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 63
S&P 500 INDEX PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The S&P 500 Index Portfolio seeks total return approximating that of the S&P 500
Index, including reinvestment of dividends, at a risk level consistent with that
of the S&P 500 Index.
PERFORMANCE AS OF JUNE 30, 1997
TOTAL RETURN:
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 20.58%
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The financial markets, primarily the equity markets, have experienced tremendous
growth over the past 12 months. This surge is the result of strong corporate
profits, low inflation, moderate interest rates and tremendous cash flow into
the markets. The leaders in this upward move have been large capitalization
stocks. Most funds that invest in the small, medium, or a blend of market
capitalization size issues have not kept pace with the Dow or the S&P 500 Index
or related funds. They have, for the most part, provided respectable returns.
Going forward, it looks as though the economy could strengthen somewhat into the
second half of this year. Interest rates could move up some, but probably not
much unless inflation concerns surface. With stock valuations at high levels,
continued positive corporate earnings growth will be necessary for the market to
maintain its current levels or to move up.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
1/97 6/97
<S> <C> <C>
S&P 500 Index Portfolio
(Commenced operations January 3, 1997) $10,000 $12,060
S&P 500 Index $10,000 $12,058
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
Top 10 Stocks as of June 30, 1997
% of Portfolio
1. Merck & Co. 3.4
2. Johnson & Johnson 3.2
3. General Electric Co. 3.0
4. Ameritech Corp. 2.7
5. Microsoft Inc. 2.7
6. Royal Dutch Petroleum 2.4
7. Exxon Corp. 2.3
8. Coca-Cola Co. 2.3
9. Campbell Soup Co. 2.1
10. Chase Manhattan 2.0
Top 5 Industries as of June 30, 1997
% of Portfolio
Computer and Related 8.1
Communications 6.4
Consumer Products 6.0
Banking 5.3
Food and Related 5.2
<PAGE> 64
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
S&P 500 INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Face Market
Amount Repurchase Agreements Value
- ----------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (0.5%)
$49,000 Star Bank 5.250% 07-01-97
repurchase price $49,007
collateralized by GNMA certificates
pool #8359
due 01-20-24 (Cost $50,000) $49,000
---------------
TOTAL REPURCHASE AGREEMENTS
(0.5%) (COST $49,000) $49,000
---------------
Face Market
Amount Short-Term Notes Value
- ----------------------------------------------------------------------------
GOVERNMENT (15.3%)
$700,000 U.S. Treasury Bills
5.070% 07-03-97 $699,803
800,000 U.S. Treasury Notes
5.260% 10-02-97 789,481
---------------
1,489,284
---------------
AUTOMOTIVE & RELATED (5.3%)
330,000 Ford Motor Credit Corp.
5.530% 07-09-97 329,594
190,000 General Motors Acceptance Corp.
5.600% 07-02-97 189,971
---------------
519,565
---------------
FINANCIAL (11.9%)
287,000 American Express Credit
5.550% 07-08-97 286,693
325,000 Beneficial Corp.
5.530% 07-01-97 325,000
230,000 Heller Financial
5.560% 07-14-97 229,535
320,000 Household Finance
5.500% 07-01-97 320,000
---------------
1,161,228
---------------
MACHINERY (2.6%)
250,000 John Deere Capital Corp.
5.500% 07-07-97 249,771
---------------
RETAIL (3.9%)
379,000 Sears Roebuck Acceptance Corp.
5.570% 07-11-97 378,413
---------------
TOTAL SHORT-TERM NOTES
(39.0%) (COST $3,797,910) $3,798,261
---------------
<CAPTION>
Market
Shares Common Stock Value
AEROSPACE (2.1%)
900 Allied Signal $75,600
2,500 Boeing Co. 132,655
---------------
208,255
---------------
AUTOMOTIVE & RELATED (1.2%)
3,000 Ford Motor 113,250
---------------
BANKING (5.3%)
2,300 BankBoston Corp. 165,744
2,000 Chase Manhattan 194,125
1,900 Fifth Third Bancorp 155,859
---------------
515,728
---------------
CHEMICALS (1.7%)
3,800 Monsanto Corp. 163,638
---------------
COMMUNICATIONS (6.4%)
3,600 AT&T Corp. 126,225
3,500 * Airtouch Communications 95,813
3,900 Ameritech Corp. 264,956
1,800 Motorola Corp. 136,800
---------------
623,794
---------------
COMPUTER & RELATED (8.1%)
2,400 * Cisco Systems 161,100
1,200 * Compaq Computer 119,100
800 Intel Corp. 113,450
1,400 International Business Machines 126,263
2,100 * Microsoft Inc. 265,387
---------------
785,300
---------------
CONSUMER PRODUCTS (6.0%)
4,900 Johnson & Johnson 315,438
2,600 Phillip Morris Co. 115,375
1,100 Procter & Gamble 155,375
---------------
586,188
---------------
DRUGS (3.9%)
900 * Amgen Corp. 52,313
3,200 Merck & Co. 331,200
---------------
383,513
---------------
ELECTRICAL EQUIPMENT (3.0%)
4,500 General Electric 294,188
---------------
ENTERTAINMENT & LEISURE (1.0%)
1,200 Walt Disney 96,300
---------------
FINANCIAL SERVICES (1.8%)
2,400 American Express 178,800
---------------
FOOD & RELATED (5.2%)
4,100 Campbell Soup 205,000
3,400 Coca-Cola 229,500
1,400 Int'l. Flavors & Fragrance 70,700
---------------
505,200
---------------
FORESTRY & PAPER PRODUCTS (0.6%)
1,200 Weyerhaeuser 62,400
---------------
INSURANCE SERVICES (1.4%)
900 American Int's Group 134,437
---------------
MACHINERY (0.7%)
600 Caterpillar 64,425
---------------
</TABLE>
<PAGE> 65
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
S&P 500 INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Market
Shares Common Stock Value
- ----------------------------------------------------------------------------
<S> <C> <C>
MEDICAL & RELATED (1.0%)
1,200 * Boston Scientific $ 73,725
400 United Healthcare 20,800
---------------
94,525
---------------
OIL, ENERGY & NATURAL GAS (4.8%)
3,700 Exxon 227,550
4,400 Royal Dutch Petroleum 239,250
---------------
466,800
---------------
RESTAURANTS (0.5%)
1,000 McDonald's Corp. 48,313
---------------
RETAIL (2.1%)
1,300 Home Depot 89,618
3,500 Wal-Mart Stores 118,344
---------------
207,962
---------------
TRANSPORTATION & EQUIPMENT (0.6%)
600 Norfolk Southern 60,450
---------------
UTILITIES (1.8%)
3,600 Duke Power 172,575
---------------
TOTAL COMMON STOCKS
(59.2%) (COST $5,036,867) $5,766,041
---------------
<CAPTION>
Market
Shares Futures Contracts Value
- -----------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (1.8%)
2,055 S&P 500 Depository Shares $ 181,482
---------------
TOTAL FUTURES CONTRACTS
(1.8%) (COST $171,893) $ 181,482
---------------
TOTAL HOLDINGS
(COST $9,055,669) (a) $9,794,784
---------------
</TABLE>
<PAGE> 66
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
S&P 500 PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $9,055,669) ................... $9,794,784
Cash in bank ........................................ 869
Receivable for fund shares sold...................... 155,034
Receivable for securities sold ...................... 23,244
Dividends and accrued interest receivable ........... 7,385
Other ............................................... 241,187
----------
Total assets ....................................... 10,222,503
----------
Liabilities:
Payable for securities purchased .................... 270,052
Payable for investment management
services (note 3) .................................. 3,022
Other accrued expenses .............................. 3,693
----------
Total liabilities .................................. 276,767
----------
Net assets at market value $9,945,736
==========
Net assets consist of:
Par value, $1 per share ............................. $832,740
Paid-in capital in excess of par value .............. 7,933,922
Accumulated undistributed net realized
gain on investments ................................ 436,803
Net unrealized appreciation on investments (note 1).. 739,115
Undistributed net
investment income .................................. 3,156
----------
Net assets at market value $9,945,736
==========
Shares outstanding (note 4)........................... 832,740
Net asset value per share............................. $11.94
==========
<CAPTION>
STATEMENT OF OPERATIONS
JANUARY 2, 1997 TO JUNE 30, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest............................................. $69,641
Dividends............................................ 28,766
----------
Total investment income............................. 98,407
----------
Expenses:
Management fees (note 3)............................. 12,101
Custodian fees (note 3).............................. 1,974
Directors' fees (note 3) ............................ 341
Professional fees.................................... 1,115
Fund accounting fees ................................ 2,909
Other................................................ 1,694
----------
Total expenses...................................... 20,134
----------
Net investment income............................... $78,273
==========
Realized and unrealized gain on investments:
Net realized gain from investments .................. $436,803
Net increase in unrealized
appreciation on investments ........................ 739,115
----------
Net gain on investments............................ 1,175,918
----------
Net increase in net
assets from operations............................. $1,254,191
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 67
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
S&P 500 PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
From operations:
Net investment income ............................................... $78,273
Realized gain on investments......................................... 436,803
Unrealized gain on investments....................................... 739,115
----------------
Net increase in assets from operations............................ 1,254,191
----------------
Dividends and distributions to shareholders:
Dividends declared .................................................. (75,118)
----------------
From capital share transactions (note 4):
Received from shares sold ........................................... 9,276,743
Received from dividends reinvested .................................. 75,118
Paid for shares redeemed ............................................ (585,198)
----------------
Increase in net assets derived from capital share transactions .... 8,766,663
----------------
Increase in net assets .......................................... 9,945,736
----------------
Net Assets:
Beginning of period ................................................. 0
----------------
End of period (a) ................................................... $9,945,736
================
(a) Includes undistributed net investment income of.................... $3,156
================
FINANCIAL HIGHLIGHTS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
Per share data:
Net asset value, beginning of period................................... $10.00
Income from investment operations:
Net investment income................................................ 0.14
Net realized and unrealized gain on investments ..................... 1.91
----------------
Total income from investment operations............................ 2.05
----------------
Less distributions:
Dividends declared .................................................. (0.11)
----------------
Net asset value, end of period......................................... $11.94
===============
Total return........................................................... 20.58%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets.............................. 0.61%(a)
Ratio of net investment income to average net assets................. 2.37%(a)
Portfolio turnover rate................................................ 22%(b)
Average commission rate ............................................... $0.03 (c)
Net assets at end of period (millions)................................. $9.9
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security transactions divided by
the total number of shares purchased and sold by the portfolio.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 68
SOCIAL AWARENESS PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The objective of the Social Awareness Portfolio is to provide long-term growth
of capital by investing primarily in the common stocks and other equity
securities of companies that, in the Adviser's opinion, conduct their business
in a way that enhances society's quality of life. The portfolio's social concern
criteria will necessarily limit the universe of securities that may be selected
for this portfolio. However, the Adviser believes the portfolio's objective of
long-term capital growth can be achieved despite this limitation.
<TABLE>
<CAPTION>
PERFORMANCE AS OF JUNE 30, 1997
Top 10 Stocks as of June 30, 1997
<S> <C>
Total Return:
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 13.21%
</TABLE>
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The second quarter was great! Our discipline of sticking with companies with
strong prospects and attractive risk-reward characteristics paid off as market
sentiment shifted dramatically during the quarter.
One group where we have increased exposure during the quarter is energy stocks.
We are presently overweighted in this sector. Energy stocks have been relative
laggards, due to fear of collapsing prices. We feel the fundamental outlook
remains strong. Worldwide oil demand continues to be driven by emerging
economies. Prospects for natural gas have improved as the winter heating season
in the U.S. ended with a cold snap and spring injections into storage began
later than normal. Finally, consolidation of the refining segment is leading to
improved efficiencies. Demand is also rising. We are focusing on companies with
strong production profiles which allow us to benefit from any commodity strength
while protecting us in the event of a price decline.
We expect volatility in the overall market to continue, and have taken profits
as prices have neared our target valuations. The portfolio is presently selling
in line with its estimated future growth rate, based on 1997 estimates. Compared
to the S&P 500 Index, the portfolio sells at a lower price-earnings ratio and
has better long-term growth prospects.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Social Awareness Portfolio
(Commenced Operations January 3, 1997) Russell 2000 Index
Date ROR Value Date ROR Value
---- --- ----- ---- --- -----
<S> <C> <C> <C> <C> <C>
12/31/96 $10,000.00 12/31/96 $10,000.00
06/30/97 13.21% $11,321.00 06/30/97 10.20% $11,020.00
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
1. Sola 3.0
2. Allstate Pref. 2.7
3. Lo-jack 2.7
4. SEI Corp. 2.7
5. Anixter Int'l 2.7
6. Ultramar 2.6
7. Zebra Technologies 2.6
8. Foundation Health 2.6
9. Buffets Inc. 2.5
10. Santa Fe Energy 2.5
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
Oil, Energy & Natural Gas 14.9
Business Services 11.6
Computer and Related 7.8
Electrical Equipment 6.7
Industrial Services 6.5
</TABLE>
<PAGE> 69
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SOCIAL AWARENESS PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Face Market
Amount Repurchase Agreements Value
- -----------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (2.7%)
$68,000 Star Bank 5.250% due 07-01-97
repurchase price $68,010
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $70,000) $68,000
------------
TOTAL REPURCHASE AGREEMENTS
(2.7%) (COST $68,000) $68,000
------------
Face Market
Amount Short-Term Notes Value
- ----------------------------------------------------------------------
AUTOMOTIVE & RELATED (5.0%)
$125,000 General Motors Acceptance Corp.
5.530% 07-01-97 $125,000
------------
TOTAL SHORT-TERM NOTES
(5.0%) (COST $125,000) $125,000
------------
<CAPTION>
Market
Shares Common Stock Value
- ----------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES (11.6%)
2,900 * Alternative Resources $59,088
4,000 * Children's Discovery Centers 27,000
1,800 Deluxe Corp. 61,425
4,700 * LoJack Corp. 67,562
24,000 * Recycling Industries Inc. 46,500
1,700 * Xpedite Systems Inc. 29,325
----------
290,900
----------
CHEMICALS (3.7%)
1,200 Hercules Inc. 57,450
1,200 Learonal 34,200
----------
91,650
----------
COMPUTER & RELATED (7.8%)
700 * 3Comm 31,500
2,400 * Continental Circuits Corp. 33,300
3,100 * Mapinfo 30,225
500 * Solectron 35,031
2,300 * Zebra Technologies 64,112
----------
194,168
----------
CONSUMER PRODUCTS (3.0%)
2,200 * Sola International 73,700
----------
DRUGS (2.5%)
4,200 Mylan Laboratories 61,950
----------
DURABLE GOODS (2.0%)
1,500 Polaris Industries 48,844
----------
ELECTRICAL EQUIPMENT (6.7%)
3,900 * Anixter International 67,031
1,800 BMC Industries 61,650
500 Xerox Corp. 39,438
----------
168,119
----------
FINANCIAL SERVICES (3.9%)
2,300 Bando McGlocklin Capital Corp. $30,475
2,800 SEI Corp. 67,550
------------
98,025
------------
FORESTRY & PAPER PRODUCTS (2.3%)
1,900 Sonoco Products 57,831
------------
HOTEL/LODGING (1.3%)
3,500 * Guest Supply 33,250
------------
HOUSING, FURNITURE & RELATED (2.6%)
2,800 Clayton Homes Inc. 39,900
2,000 Haverty Furniture Cos. Inc. 25,000
------------
64,900
------------
INDUSTRIAL SERVICES (6.5%)
2,500 * Computational Systems 34,688
2,000 Imco Recycling 37,750
1,300 Millipore Corp. 57,200
2,100 Versa Technologies, Inc. 33,075
------------
162,713
------------
INSURANCE SERVICES (1.4%)
1,300 Blanch EW 34,693
------------
MACHINERY (3.1%)
600 Deere & Co. 32,925
1,500 Modine Mfg. 44,625
------------
77,550
------------
MEDICAL & RELATED (5.2%)
2,110 * Foundation Health 63,959
700 National Healthcare 31,238
1,000 * Quorum Health 35,750
------------
130,947
------------
METALS & MINING (3.9%)
1,350 Reliance Steel & Aluminum 35,100
2,200 * Wolverine Tube Inc. 61,325
------------
96,425
------------
OIL, ENERGY & NATURAL GAS (14.9%)
2,800 * Belco Oil & Gas Corp. 60,025
1,900 * Louis Dreyfus Natural Gas 30,875
3,300 * Offshore Logistics 62,288
4,300 * Santa Fe Energy Resources 63,156
2,000 Ultramar Diamond Shamrock 65,250
3,100 West Coast Energy 56,381
1,800 Wizer Oil Co. 33,188
------------
371,163
------------
RESTAURANTS (4.6%)
7,500 * Buffets 63,281
6,200 * Ryan's Family Steak House 53,088
------------
116,369
------------
RETAIL (1.2%)
3,900 * Ridgeview Inc. 29,737
------------
TRANSPORTATION & EQUIPMENT (1.4%)
3,000 Greenbrier Cos. Inc. 33,938
------------
TOTAL COMMON STOCK
(89.6%) (COST $2,039,137) $2,236,872
------------
</TABLE>
<PAGE> 70
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SOCIAL AWARENESS PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997
Market
Shares Preferred Stock Value
- -----------------------------------------------------------------------
<S> <C> <C>
INSURANCE SERVICES (2.7%)
1,300 Allstate Exchangeable Notes $67,600
------------
TOTAL PREFERRED STOCK
(2.7%) (COST $58,097) $67,600
------------
TOTAL HOLDINGS
(COST $2,290,234) (a) $2,497,472
============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 71
OHIO NATIONAL FUND, INC.
Social Awareness Portfolio
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<S> <C>
ASSETS:
Investments in securities at market
value (note 1) (cost $2,290,234) ...................$2,497,472
Cash in bank ........................................ 23
Receivable for fund shares sold...................... 370
Dividends and accrued interest receivable ........... 2,394
----------
Total assets ....................................... 2,500,259
----------
LIABILITIES:
Payable for shares redeemed ......................... 4
Payable for investment management
services (note 3) .................................. 1,207
Other accrued expenses .............................. 1,186
----------
Total liabilities .................................. 2,397
----------
Net assets at market value $2,497,862
==========
NET ASSETS CONSIST OF:
Par value, $1 per share ............................. $221,041
Paid-in capital in excess of par value .............. 1,995,133
Accumulated undistributed net realized
gain on investments ............................... 72,786
Net unrealized appreciation on investments (note 1).. 207,238
Undistributed net
investment income .................................. 1,664
----------
Net assets at market value $2,497,862
==========
Shares outstanding (note 4)........................... 221,041
Net asset value per share............................. $11.30
==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Interest...................................... $3,586
Dividends..................................... 12,269
--------
Total investment income...................... 15,855
--------
EXPENSES:
Management fees (note 3)...................... 6,240
Custodian fees (note 3)....................... 1,347
Directors' fees (note 3) ..................... 137
Professional fees............................. 445
Fund accounting fees ......................... 1,375
Other......................................... 919
--------
Total expenses............................... 10,463
--------
Net investment income........................ $5,392
========
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investments ........... $72,786
Net increase in unrealized
appreciation on investments ................. 207,238
--------
Net gain on investments..................... 280,024
--------
Net increase in net
assets from operations...................... $285,416
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 72
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
SOCIAL AWARENESS PORTFOLIO
Statement of Changes in Net Assets
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
From operations:
Net investment income .............................................. $5,392
Realized gain on investments........................................ 72,786
Unrealized gain on investments...................................... 207,238
----------
Net increase in assets from operations........................... 285,416
----------
Dividends and distributions to shareholders:
Dividends declared ................................................. (3,730)
----------
From capital share transactions (note 4):
Received from shares sold .......................................... 2,235,386
Received from dividends reinvested ................................. 3,730
Paid for shares redeemed ........................................... (22,940)
----------
Increase in net assets derived from capital share transactions ... 2,216,176
----------
Increase in net assets ......................................... 2,497,862
----------
Net Assets:
Beginning of period ................................................ 0
----------
End of period (a) .................................................. $2,497,862
----------
(a) Includes undistributed net investment income of................... $1,664
==========
<CAPTION>
Financial Highlights
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
Per share data:
Net asset value, beginning of period.................................. $10.00
Income from investment operations:
Net investment income............................................... 0.03
Net realized and unrealized gain on
investments and foreign currency transactions..................... 1.29
----------
Total income from investment operations........................... 1.32
----------
Less distributions:
Dividends declared ................................................. (0.02)
----------
Net asset value, end of period........................................ $11.30
==========
Total return.......................................................... 13.21%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets............................. 0.97%(a)
Ratio of net investment income to average net assets................ 0.50%(a)
Portfolio turnover rate............................................... 30%(b)
Average commission rate .............................................. $0.04 (c)
Net assets at end of period (millions)................................ $2.5
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security transactions divided by the
total number of shares purchased and sold by the portfolio.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 73
STRATEGIC INCOME PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Strategic Income Portfolio seeks to generate high current income by
investing at least 80 percent of its assets in income-producing securities,
including at least 40 percent of assets in a core group of U.S. government and
corporate fixed-income securities, and the remainder in other income-producing
securities.
<TABLE>
<CAPTION>
PERFORMANCE AS OF JUNE 30, 1997
<S> <C>
TOTAL RETURN:
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 2.96%
</TABLE>
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The second quarter certainly turned out better than the first. The rise in the
stock market finally caught hold of small caps and that helped the fund. The
bond market also rallied in the second quarter and this boosted performance
across all bond sectors.
Looking forward, the biggest concern has to do with interest rates. If the Fed
raises short-term rates, long-term rates are sure to follow. This will create a
decline in bond prices. Higher long-term rates might also signal an end to the
market rally as money could stop flowing into the market due to the increased
attractiveness of fixed-income investments.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
1/97 6/97
<S> <C> <C>
Strategic Income Portfolio 10,000 10,296
(Commenced operations
January 3, 1997)
Lehman Bros. Government/Corp. 10,000 10,274
Bond Index-Intermediate
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
</TABLE>
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF JUNE 30, 1997
% of Portfolio
<S> <C> <C> <C>
1. FNMA 9.00% 4/1/16 13.1
2. Noble Affiliates 8.00% 4/1/27 4.8
3. Duke Power 7.875% 5/1/24 4.7
4. Philip Morris 7.125% 8/15/02 4.7
5. Lehman Bros. 7.125% 9/15/03 4.6
6. Meditrust NT 7.60% 7/15/01 4.4
7. Transcanada Pipeline 9.875% 1/1/21 4.3
8. FNMA 7.25% 2/25/17 4.3
9. First Commonwealth Fund 3.9
10. J.C. Penney 9.45% 7/15/02 3.7
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
% of Portfolio
<S> <C>
Government 17.4
Real Estate 16.1
Oil, Energy & Natural Gas 13.6
Financial Services 12.3
Investment Companies 7.4
</TABLE>
<PAGE> 74
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
STRATEGIC INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
Face Market
Amount Repurchase Agreements Value
- -------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (4.2%)
$91,000 Star Bank 5.250% due 07-01-97
repurchase price $91,013
collateralized by GNMA certificates
pool #8359
due 01-20-24 (Cost $95,000) $ 91,000
----------
TOTAL REPURCHASE AGREEMENTS
(4.2%) (COST $91,000) $ 91,000
----------
<CAPTION>
Face Market
Amount Long-Term Bonds & Notes Value
- -------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (17.4%)
$269,815 FNMA 9.000% 04-01-16 $284,487
91,773 FNMA 7.250% 02-25-17 92,202
----------
376,689
----------
BANKING (2.0%)
45,000 Nationsbank Corp.
6.375% 02-21-06 42,697
----------
CONSUMER PRODUCTS (4.7%)
100,000 Phillip Morris Co.
7.125% 08-15-02 100,880
----------
FINANCIAL SERVICES (4.6%)
100,000 Lehman Brothers Holdings
7.125% 09-15-03 100,005
----------
FORESTRY & PAPER PRODUCTS (1.4%)
30,000 International Paper Co.
7.625% 01-15-07 31,219
----------
MEDICAL & RELATED (2.5%)
50,000 Columbia/HCA Healthcare
8.700% 02-10-10 55,129
----------
OIL, ENERGY & NATURAL GAS (10.6%)
100,000 Noble Affiliates, Inc.
8.000% 04-01-27 103,108
27,000 Occidental Petroleum
10.125% 09-15-09 33,217
75,000 Transcanada Pipeline
9.875% 01-01-21 92,447
----------
228,772
----------
REAL ESTATE & LEASING (4.4%)
95,000 Meditrust NT
7.600% 07-15-01 96,028
----------
RETAIL (3.7%)
75,000 JC Penney Inc.
9.450% 07-15-02 80,870
----------
UTILITIES (7.0%)
100,000 Duke Power Co.
7.875% 05-01-24 101,507
50,000 GTE Corp.
7.830% 05-01-23 49,973
----------
151,480
----------
TOTAL LONG-TERM BONDS & NOTES
(58.3%) (COST $1,265,079) $1,263,769
----------
<CAPTION>
Market
Shares Common Stock Value
- ----------------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE & RELATED (0.6%)
250 General Motors Corp. $13,922
--------
FINANCIAL (1.3%)
2,000 Dynex Capital Inc. 27,875
HOTEL/LODGING (3.2%)
4,600 Winston Hotels Inc. 69,288
--------
TOTAL COMMON STOCK
(5.1%) (COST $106,266) $111,085
--------
<CAPTION>
Closed-End Market
Shares Investment Companies Value
- --------------------------------------------------------------------------
6,900 First Commonwealth Fund $84,525
8,500 Kleinwort Benson Australian Fund 76,500
--------
161,025
--------
TOTAL INVESTMENT COMPANIES
(7.4%) (COST $162,217) $161,025
--------
<CAPTION>
Real Estate Market
Shares Investment Trusts Value
---------------------------------------------------------------------
<S> <C> <C>
1,000 Federal Realty Investment $27,000
3,300 LTC Properties Inc. 59,813
2,300 Omega Healthcare Investments 75,181
3,400 Summit Properties Inc. 70,125
2,500 Thornburg Mtg. Asset Corp. 53,750
--------
285,869
--------
TOTAL REAL ESTATE INVEST. TRUSTS
(13.2%) (COST $293,757) $285,869
--------
<CAPTION>
Market
Shares Preferred Stock Value
---------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES (6.4%)
3,000 Enron Capital Trust Pfd. $ 76,312
2,500 Travelers Cap Pfd. 63,125
---------
139,437
---------
OIL, ENERGY & NATURAL GAS (3.0%)
3,000 Atlantic Richfield Co. Pfd. 64,500
---------
REAL ESTATE & LEASING (2.9%)
2,500 Kimco Realty Corp. Pfd. 8.500% 62,968
---------
TOTAL PREFERRED STOCK $ 266,905
(12.3%) (COST $267,020)
---------
TOTAL HOLDINGS
(COST $2,185,339) (a) $2,179,653
==========
<FN>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 75
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
Strategic Income Portfolio
Statement of Assets and Liabilities
June 30, 1997 (Unaudited)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $2,185,339) .................... $2,179,653
Cash in bank ......................................... 525
Receivable for fund shares sold....................... 24,483
Dividends and accrued interest receivable ............ 30,598
--------------
Total assets ........................................ 2,235,259
--------------
Liabilities:
Payable for investment management
services (note 3) ................................... 1,439
Other accrued expenses ............................... 2,833
--------------
Total liabilities ................................... 4,272
--------------
Net assets at market value $2,230,987
==============
Net assets consist of:
Par value, $1 per share .............................. $224,140
Paid-in capital in excess of par value ............... 2,013,969
Accumulated undistributed net realized
loss on investments ................................. (2,075)
Net unrealized depreciation on investments (note 1)... (5,686)
Undistributed net
investment income ................................... 639
--------------
Net assets at market value $2,230,987
==============
Shares outstanding (note 4)............................ 224,140
Net asset value per share.............................. $9.95
==============
<CAPTION>
Statement of Operations
January 2, 1997 to June 30, 1997 (Unaudited)
Investment income:
Interest.............................................. $46,851
Dividends............................................. 39,333
--------------
Total investment income.............................. 86,184
--------------
Expenses:
Management fees (note 3).............................. 8,045
Custodian fees (note 3)............................... 1,766
Directors' fees (note 3) ............................. 227
Professional fees..................................... 743
Fund accounting fees ................................. 1,939
Other................................................. 1,517
--------------
Total expenses....................................... 14,237
--------------
Net investment income................................ $71,947
==============
Realized and unrealized loss on investments:
Net realized loss from investments ................... ($2,075)
Net increase in unrealized
depreciation on investments ......................... (5,686)
--------------
Net loss on investments............................. (7,761)
--------------
Net increase in net
assets from operations.............................. $64,186
==============
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 76
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
STRATEGIC INCOME PORTFOLIO
Statement of Changes in Net Assets
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
From operations:
Net investment income ................................................ $71,947
Realized loss on investments.......................................... (2,075)
Unrealized loss on investments........................................ (5,686)
----------------
Net increase in assets from operations.............................. 64,186
----------------
Dividends and distributions to shareholders:
Dividends declared ................................................... (71,308)
----------------
From capital share transactions (note 4):
Received from shares sold ............................................ 2,185,006
Received from dividends reinvested ................................... 71,308
Paid for shares redeemed ............................................. (18,205)
----------------
Increase in net assets derived from capital share transactions ...... 2,238,109
----------------
Increase in net assets ............................................ 2,230,987
----------------
Net Assets:
Beginning of period .................................................. 0
----------------
End of period (a) .................................................... $2,230,987
================
(a) Includes undistributed net investment income of.................. $639
================
Financial Highlights
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
Per share data:
Net asset value, beginning of period................................... $10.00
Income from investment operations:
Net investment income................................................. 0.34
Net realized and unrealized loss on investments....................... (0.05)
----------------
Total income from investment operations.............................. 0.29
----------------
Less distributions:
Dividends declared ................................................... (0.34)
----------------
Net asset value, end of period......................................... $9.95
================
Total return........................................................... 2.96%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets............................... 1.37%(a)
Ratio of net investment income to average net assets.................. 6.94%(a)
Portfolio turnover rate................................................ 69%(b)
Average commission rate ............................................... $0.03 (c)
Net assets at end of period (millions)................................. $2.2
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security transactions
divided by the total number of shares purchased and sold by the portfolio.
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE> 77
STELLAR PORTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Stellar Portfolio seeks to maximize total return by investing approximately
15 percent to 25 percent of its assets in each of the following categories:
domestic equities, domestic bonds, foreign securities, real estate securities,
and precious metal and/or money market securities.
PERFORMANCE AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
TOTAL RETURN:
<S> <C>
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 5.31%
</TABLE>
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The second quarter has made up for the first quarter. The fund was down slightly
at the end of March but the surge in small-cap stocks has helped performance in
the second quarter giving us a nice positive return year-to-date.
The potential for rising interest rates poses a concern in regards to the
exposure the fund has in the financial sector (roughly 1/3 of stock holdings).
Valuation levels on these stocks will be the key to whether a reduction of
holdings in this sector is needed. The short-term money market holdings drag the
performance of the funds in a strong market, but should create a nice buffer
when stocks and bonds are down.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
1/97 6/97
<S> <C> <C>
Stellar Portfolio $10,000 $11,167
(Commenced operations January 3, 1997)
Lehman Bros. Government/Corp. Index-Intermediate $10,000 $10,531
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C> <C>
1. Hancock Patriot Premium Dividend 2.3
2. U.S. Treasury 7.50% 11/15/16 2.3
3. U.S. Treasury 7.25% 5/15/04 2.2
4. U.S. Treasury 6.75% 5/31/99 2.1
5. U.S. Treasury 6.25% 7/31/98 2.1
6. Kleinwort Benson Australian 1.9
7. Royal Dutch Petroleum 1.6
8. Merrill Lynch Pfd. 8% 1.6
9. Templeton Global Govts. 1.6
10. New Jersey Econ. Devel. Auth. Pfd. 1.6
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Real Estate 19.9
Government 10.3
Investment Companies 10.0
Banking 4.0
Utilities 2.7
</TABLE>
<PAGE> 78
OHIO NATIONAL FUND, INC.
STELLAR PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (20.2%)
$481,000 Star Bank 5.250% 07-01-97
repurchase price $481,070
collateralized by GNMA certificates
pool #8359
due 01-20-24 (Cost $480,000) $481,000
------------
TOTAL REPURCHASE AGREEMENTS
(20.2%) (COST $481,000) $481,000
------------
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- --------------------------------------------------------------------------------
GOVERNMENT (8.7%)
$50,000 US Treasury Bond
7.500% 11-15-16 $53,453
50,000 US Treasury Note
6.250% 07-31-98 50,234
50,000 US Treasury Note
6.750% 05-31-99 50,594
50,000 US Treasury Note
7.250% 05-15-04 52,125
------------
206,406
------------
TOTAL LONG-TERM BONDS & NOTES
(8.7%) (COST $206,945) $206,406
------------
MARKET
SHARES U.S. COMMON STOCK VALUE
- --------------------------------------------------------------------------------
BANKING (1.9%)
100 Bankamerica Corp. $6,456
100 Charter One Financial Inc. 5,387
150 First Financial Bancorp 6,038
100 First USA Inc. 5,647
130 Fleet Financial 8,223
50 Household Financial 5,872
100 US Bancorp 6,413
------------
44,036
------------
BUSINESS SERVICES (0.2%)
150 Deluxe Corp. 5,119
------------
CHEMICALS (0.4%)
100 Dow Chemical Co. 8,713
------------
COMMUNICATIONS (0.2%)
150 MCI Communications Corp. 5,742
------------
COMPUTER & RELATED (2.0%)
300 * Cisco Systems Inc. 20,137
175 Intel Corp. 24,817
100 * Seagate Technology 3,519
------------
48,473
------------
CONSUMER PRODUCTS (0.2%)
200 Alberto Culver Co. Cl. B 5,600
------------
DRUGS (0.4%)
75 Warner Lambert Co. 9,319
------------
MARKET
SHARES U.S. COMMON STOCK VALUE
- --------------------------------------------------------------------------------
DURABLE GOODS (0.2%) $5,119
130 Snap On Inc. ------------
ELECTRICAL EQUIPMENT (1.0%) 8,213
200 Johnson Controls Inc. 11,000
125 Sony Corp. 5,256
100 Thomas & Betts Corp. ------------
24,469
------------
FINANCIAL SERVICES (1.7%) 33,525
450 American Express Co. 6,459
150 Dean Whitter Discover ------------
39,984
------------
FOOD AND RELATED (0.8%) 5,400
300 Flemming Cos. 4,884
75 General Mills Inc. 5,634
150 Pepsico Inc. 4,163
100 Sara Lee Corp. ------------
20,081
------------
HOTELS/LODGING (0.2%) 5,313
200 Hilton Hotels Corp. ------------
HOUSING, FURNITURE & RELATED (0.3%) 6,175
200 Sherwin Williams Co. ------------
INDUSTRIAL SERVICES (0.8%) 6,207
130 Ecolab Inc. 12,138
200 Parker Hannifin Corp. ------------
18,345
------------
INSURANCE SERVICES (0.7%) 5,796
112 AON Corp. 6,206
75 ITT Hartford 4,400
100 Ohio Casualty Corp. ------------
16,402
------------
MACHINERY (0.4%) 9,288
200 Paccar Inc. ------------
MEDIA & PUBLISHING (0.2%) 5,525
100 Times Mirror Co. ------------
MEDICAL & RELATED (0.9%) 7,150
200 * Quorum Health Group 6,862
150 * Sofamore/Danek Group Inc. 6,652
225 * Tenet Healthcare Corp. ------------
20,664
------------
METALS AND MINING (0.6%) 7,722
175 AK Steel Holding Corp. 7,538
100 Aluminum Company of America ------------
15,260
------------
OIL, ENERGY & NATURAL GAS (2.6%) 25,472
475 * BJ Services Co. 5,275
100 * Ensco International Inc. 6,975
300 * Global Marine Inc. 2,727
125 Lyondell Petrochemical Co. 5,637
200 * Rowan Cos. Inc. 10,875
100 Texaco Inc. 4,852
125 Unocal Corp. ------------
61,813
------------
</TABLE>
<PAGE> 79
OHIO NATIONAL FUND, INC.
STELLAR PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES U.S. COMMON STOCK VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
RETAIL (2.1%)
100 American Stores Co. $4,938
125 Dayton Hudson Corp. 6,648
125 Gap Inc. 4,859
6,500 * Roberds Inc. 34,125
------------
50,570
------------
TRANSPORTATION (1.6%)
325 * America West Holding Corp. 4,713
1,000 * Genesee & Wyoming Inc. 26,250
100 * UAL Corp. 7,156
------------
38,119
------------
UTILITIES (0.2%)
100 GPU Inc. 3,588
------------
TOTAL COMMON STOCK
(19.6%) (COST $436,304) $467,717
------------
REAL ESTATE MARKET
SHARES INVESTMENT TRUSTS VALUE
- --------------------------------------------------------------------------------
650 Avalon Properties Inc. $18,606
450 Bay Apartment Communities 16,650
525 Cali Realty Corp. 17,850
500 Camden Property 15,813
700 Centerpoint Properties Corp. 22,225
600 Federal Realty Investments 16,200
1,000 Glimcher Realty 20,625
900 Highwoods Property 28,800
700 Kimco Realty Corp. 22,225
675 Liberty Property 16,791
900 LTC Properties Inc. 16,312
850 Manufactured Home Communities 19,602
375 Meditrust 14,953
800 New Plan Realty 17,650
550 Omega Healthcare Investments 17,978
400 Post Properties 16,225
650 RFS Hotel Investments 11,700
775 Security Capital Pacific Trust 17,728
700 Simon DeBartolo Group Inc. 22,400
1,200 Sizeler Property Investments 12,375
600 Starwood Lodging 25,613
650 Storage Trust Realty 17,225
350 Storage USA Inc. 13,387
800 Summit Property Inc. 16,500
600 Sun Communities 20,138
400 Weingarten Realty Investments 16,900
------------
472,471
------------
TOTAL REAL ESTATE INV. TRUSTS
(19.9%) (COST $463,682) $472,471
------------
CLOSED-END MARKET
SHARES INVESTMENT COMPANIES VALUE
- --------------------------------------------------------------------------------
500 Argentina Fund Inc. $7,375
300 Brazil Fund Inc. 9,225
800 Chile Fund Inc. 20,900
875 First Commonwealth Fund Inc. 10,719
5,000 Hancock Patriot Prem. Div. Fd. II 55,312
2,200 * Japan Webs Index Series 31,075
5,000 Kleinworth Benson Austral. Inc. Fd. 45,000
650 Mexico Fund Inc. 12,594
300 Templeton Emerging Mkts. Fd. 7,125
5,000 Templeton Global Govts. Fund 37,813
------------
237,138
------------
TOTAL CLOSED END INVESTMENT CO.
(10.0%) (COST $226,200) $237,138
------------
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- --------------------------------------------------------------------------------
ARGENTINA (0.3%)
200 YPF Sociedad Anonima Spon ADR $6,150
------------
AUSTRALIA (1.1%)
350 Nat'l. Australia Bank LTD ADR 24,959
------------
CANADA (2.6%)
500 Alcan Aluminum Ltd. 17,344
775 Canadian Pac Ltd. 22,039
550 Seagram Co. Ltd. 22,138
------------
61,521
------------
DENMARK (1.2%)
500 Novo-Nordisk AS ADR 27,436
------------
GERMANY (0.9%)
250 Daimler Benz AG Spon ADR 20,375
------------
GREAT BRITAIN (1.4%)
850 Cable & Wireless Pub. Ltd. 23,747
175 Vodafone Group Spon. ADR 8,477
------------
32,224
------------
HOLLAND (2.7%)
350 Phillips NV 25,156
700 Royal Dutch Petroleum Co. 38,063
------------
63,219
------------
ITALY (0.5%)
175 Luxottica Group ADR 11,867
------------
JAPAN (0.4%)
100 Hitachi Ltd. ADR 11,300
------------
</TABLE>
<PAGE> 80
<TABLE>
<CAPTION>
OHIO NATIONAL FUND, INC.
STELLAR PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
NORWAY (0.8%)
350 Norsk Hydro AS Spon ADR $18,966
------------
SPAIN (1.5%)
850 Respol SA Spon. ADR 36,071
------------
SWEDEN (1.0%)
100 Swedish Match Co. Spon. ADR 3,400
775 Volvo Aktiebolaget Ser B ADR 20,731
760 Volvo Aktiebolaget Rights 0
------------
24,131
------------
TOTAL FOREIGN COMMON STOCK
(14.2%) (COST $290,751) $338,219
------------
MARKET
SHARES PREFERRED STOCK VALUE
- --------------------------------------------------------------------------------
BANKING (2.1%)
1,000 Banco Bilbao Vizcaya Pfd. 8% $25,125
1,000 BankUnited Cap II Pfd. 9.6% 25,125
------------
50,250
------------
FINANCIAL SERVICES (1.6%)
1,500 Merrill Lynch Cap Trust II 8% 38,062
------------
GOVERNMENT (1.6%)
1,500 New Jersey Economic Dev. 7.6% 37,500
------------
UTILITIES (2.5%)
1,200 HL&P Cap Trust I 8.125% 29,775
1,200 Northern States Power 7.875% 29,700
------------
59,475
------------
TOTAL PREFERRED STOCK
(7.8%) (COST $185,000) $185,287
------------
TOTAL HOLDINGS
(COST $2,289,882) $2,388,238
============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 81
OHIO NATIONAL FUND, INC.
STELLAR PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<S> <C>
ASSETS:
Investments in securities at market
value (note 1) (cost $2,289,882) .................. $2,388,238
Cash in bank ....................................... 941
Dividends and accrued interest receivable .......... 8,445
----------
Total assets ...................................... 2,397,624
----------
LIABILITIES:
Payable for shares redeemed ........................ 195
Payable for investment management
services (note 3) ................................. 1,941
Other accrued expenses ............................. 2,919
----------
Total liabilities ................................. 5,055
----------
Net assets at market value $2,392,569
==========
NET ASSETS CONSIST OF:
Par value, $1 per share ............................ $230,419
Paid-in capital in excess of par value ............. 2,075,816
Accumulated undistributed net realized
loss on investments ............................... (12,147)
Net unrealized appreciation on investments (note 1). 98,355
Undistributed net investment income ................ 126
----------
Net assets at market value $2,392,569
==========
Shares outstanding (note 4).......................... 230,419
Net asset value per share............................ $10.38
==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
INVESTMENT INCOME:
Interest........................................ $20,939
Dividends....................................... 27,096
--------
Total investment income........................ 48,035
--------
EXPENSES:
Management fees (note 3)........................ 10,381
Custodian fees (note 3)......................... 1,766
Directors' fees (note 3) ....................... 227
Professional fees............................... 743
Fund accounting fees ........................... 1,939
Other........................................... 1,780
--------
Total expenses................................. 16,836
--------
Net investment income ......................... $31,199
========
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investments ............. ($12,147)
Net increase in unrealized
appreciation on investments ................... 98,355
--------
Net gain on investments....................... 86,208
--------
Net increase in net
assets from operations........................ $117,407
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 82
OHIO NATIONAL FUND, INC.
STELLAR PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
FROM OPERATIONS:
Net investment income ................................................. $31,199
Realized loss on investments........................................... (12,147)
Unrealized gain on investments......................................... 98,355
----------
Net increase in assets from operations............................... 117,407
----------
Dividends and distributions to shareholders:
Dividends declared .................................................... (31,073)
----------
From capital share transactions (note 4):
Received from shares sold ............................................. 2,319,162
Received from dividends reinvested .................................... 31,073
Paid for shares redeemed .............................................. (44,000)
----------
Increase in net assets derived from capital share transactions ....... 2,306,235
----------
Increase in net assets ............................................. 2,392,569
----------
Net Assets:
Beginning of period ................................................... 0
----------
End of period (a) ..................................................... $2,392,569
==========
(a) Includes undistributed net investment gain of....................... $126
==========
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................................... $10.00
Income from investment operations:
Net investment income.................................................. 0.15
Net realized and unrealized gain on investments ....................... 0.37
----------
Total income from investment operations............................... 0.52
----------
Less distributions:
Dividends declared .................................................... (0.14)
----------
Net asset value, end of period.......................................... $10.38
==========
Total return............................................................ 5.31%(b)
RATIOS AND SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................ 1.57%(a)
Ratio of net investment income to average net assets................... 2.91%(a)
Portfolio turnover rate................................................. 8%(b)
Average commission rate ................................................ $0.13 (c)
Net assets at end of period (millions).................................. $2.4
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security
transactions divided by the total number of shares purchased and sold by the
portfolio.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 83
RELATIVE VALUE PROTFOLIO
OHIO NATIONAL FUND, INC.
OBJECTIVE
The Relative Value Portfolio seeks the highest total return as is consistent
with reasonable risk by investing in stocks which Star deems to represent
characteristics with low volatility, above-average yields and are undervalued
relative to the stocks comprising the S&P Composite Stock Index.
PERFORMANCE AS OF JUNE 30, 1997
TOTAL RETURN:
<TABLE>
<CAPTION>
<S> <C>
One-year N/A
Three-year N/A
Five-year N/A
Since inception (1/3/97) 16.28%
</TABLE>
Returns represent past performance, which is no guarantee of future results.
Investment return and principal value will vary so that shares, when redeemed,
may be worth more or less than their original cost. Actual results for variable
annuity and variable universal life contracts will be lower due to contract
charges. Consult your contract for applicable charges for mortality and
expenses.
COMMENTS
The Relative Value Funds is performing very well relative to the S&P Index and
or other Growth funds. Last quarter the fund was up 17.18%, just off the S&P and
in the top 7% of the Morningstar Large-Cap Blend funds. The continuing focus of
the fund on large-cap stocks has been the key to performance as most of the
money flowing into the market is heading into the large-cap sector. If interest
rates remain low and and the economy continues to grow, the stock market should
do well. If inflation fears rise due to a high-growth economy and interest
rates also rise, money might flow from the stock market to fixed-income
investments. This will could trigger a downturn in the market. But for now we'll
enjoy the tremendous growth in the market and hopefully see it continue into
the second half of the year.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
<S> <C> <C>
1/97 8/97
Relative Value Portfolio $10,000 $12,060
(Commenced operations January 3, 1997)
S&P 500 Index $10,000 $11,628
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Smithkline Beecham 3.9
2. Intel 3.9
3. Procter & Gamble 3.9
4. IBM 3.8
5. Lockheed Martin 2.8
6. Bristol Myers Squibb 2.7
7. Dow Chemical 2.6
8. Gillette 2.6
9. Philip Morris 2.6
10. AlliedSignal, Inc. 2.6
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Drugs 11.3
Consumer Products 10.7
Computer and Related 7.7
Oil, Energy & Natural Gas 7.2
Aerospace 6.6
</TABLE>
<PAGE> 84
OHIO NATIONAL FUND, INC.
RELATIVE VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (23.0%)
$757,000 Star Bank 5.250% due 07-01-97
repurchase price $757,110
collateralized by GNMA certificates
pool #8359
due 01-20-24 (cost $755,000) $757,000
------------
TOTAL REPURCHASE AGREEMENTS
(23.0%) (COST $757,000) $757,000
------------
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------------------------
AEROSPACE (6.6%)
1,000 Allied Signal Inc. $84,000
900 Lockheed Martin Corp. 93,206
800 Raytheon Co. 40,800
------------
218,006
------------
AUTOMOTIVE & RELATED (3.1%)
700 General Motors Corp. 38,981
1,000 Goodyear Tire & Rubber Co. 63,313
------------
102,294
------------
BANKING (5.6%)
250 Citicorp 30,141
500 Corestates Financial Corp. 26,875
400 First Financial Bancorp 16,100
700 Mellon Bank Corp. 31,587
250 * National Australia Bank Ltd. ADR 17,828
500 Nationsbank Corp. 32,250
800 Signet Banking Corp. 28,800
------------
183,581
------------
CHEMICALS (2.6%)
1,000 Dow Chemical Co. 87,125
------------
COMMUNICATIONS (4.7%)
2,000 AT&T Corp. 70,125
800 Cable & Wireless Co. ADR 22,350
500 Motorola Inc. 38,000
500 Vodafone Group PLC ADR 24,219
------------
154,694
------------
COMPUTER & RELATED (7.7%)
900 Intel Corp. 127,631
1,400 International Business Machines 126,263
------------
253,894
------------
CONSUMER PRODUCTS (10.7%)
1,000 Fortune Brands 37,313
1,000 * Gallaher Group PLC ADR 18,437
900 Gillette Co. 85,275
1,900 Phillip Morris Cos. Inc. 84,313
900 Procter & Gamble Co. 127,125
------------
352,463
------------
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------------------------
DRUGS (11.3%)
1,000 American Home Products Corp. $76,500
1,100 Bristol Myers Squibb Co. 89,100
750 Merck & Co. Inc. 77,625
1,400 Smithkline Beecham PLC ADR 128,275
------------
371,500
------------
ELECTRICAL EQUIPMENT (3.2%)
1,000 General Electric Co. 65,375
1,000 Johnson Controls Inc. 41,063
------------
106,438
------------
FINANCIAL SERVICES (2.5%)
550 American Express Co. 40,975
1,000 Lehman Brothers Holdings Inc. 40,500
------------
81,475
------------
INSURANCE SERVICES (4.7%)
300 American Bankers Ins. Group Inc. 18,975
450 Cincinnati Financial Corp. 35,550
1,000 Ohio Casualty Corp. 44,000
900 Travelers Group Inc. 56,756
------------
155,281
------------
OIL, ENERGY & NATURAL GAS (7.2%)
1,200 Mobil Corp. 83,850
1,400 Royal Dutch Petrolum 76,125
700 Texaco Inc. 76,125
------------
236,100
------------
RETAIL (3.5%)
1,000 JC Penney Inc. 52,188
1,200 Sears Roebuck & Co. 64,500
------------
116,688
------------
TRANSPORTATION & EQUIPMENT (1.2%)
200 Burlington Northern Santa Fe Corp. 17,975
400 Canadian Pac. Ltd. New 11,375
400 Comair Holdings Inc. 11,075
------------
40,425
------------
UTILITIES (2.7%)
900 GPU Inc. 32,287
1,300 GTE Corp. 57,037
------------
89,324
------------
TOTAL COMMON STOCK (77.3%)
(COST $2,173,118) $2,549,288
------------
TOTAL HOLDINGS
(COST $2,930,118) (a) $3,306,288
============
<FN>
*Non-income producing securities.
(a) Also represents cost for Federal income tax purposes.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 85
OHIO NATIONAL FUND, INC.
RELATIVE VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities at market
value (note 1) (cost $2,930,118) .................. $3,306,288
Cash in bank ....................................... 12
Receivable for fund shares sold..................... 54,484
Dividends and accrued interest receivable .......... 5,770
----------
Total assets ...................................... 3,366,554
----------
Liabilities:
Payable for investment management
services (note 3) ................................. 2,299
Other accrued expenses ............................. 2,652
----------
Total liabilities ................................. 4,951
----------
Net assets at market value $3,361,603
==========
Net assets consist of:
Par value, $1 per share ............................ $290,712
Paid-in capital in excess of par value ............. 2,693,191
Accumulated undistributed net realized
gain on investments ............................... 1,483
Net unrealized appreciation on investments (note 1). 376,169
Undistributed net investment income ................ 48
----------
Net assets at market value $3,361,603
==========
Shares outstanding (note 4).......................... 290,712
Net asset value per share............................ $11.56
==========
</TABLE>
STATEMENT OF OPERATIONS
January 2, 1997 to June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
Investment income:
Interest........................................... $7,085
Dividends.......................................... 25,555
-------
Total investment income........................... 32,640
-------
Expenses:
Management fees (note 3)........................... 10,784
Custodian fees (note 3)............................ 1,766
Directors' fees (note 3) .......................... 227
Professional fees.................................. 743
Fund accounting fees .............................. 1,939
Other.............................................. 1,252
Total expenses.................................... 16,711
-------
Net investment income............................. $15,929
=======
Realized and unrealized gain on investments:
Net realized gain from investments ................ $1,483
Net increase in unrealized
appreciation on investments ...................... 376,169
-------
Net gain on investments.......................... 377,652
-------
Net increase in net
assets from operations........................... $393,581
=======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 86
OHIO NATIONAL FUND, INC.
RELATIVE VALUE PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
From operations:
Net investment income ................................................. $15,929
Realized gain on investments........................................... 1,483
Unrealized gain on investments......................................... 376,169
---------
Net increase in assets from operations.............................. 393,581
---------
Dividends and distributions to shareholders:
Dividends declared .................................................... (15,881)
---------
From capital share transactions (note 4):
Received from shares sold ............................................. 3,024,542
Received from dividends reinvested .................................... 15,881
Paid for shares redeemed .............................................. (56,520)
---------
Increase in net assets derived from capital share transactions ...... 2,983,903
---------
Increase in net assets ............................................ 3,361,603
---------
Net Assets:
Beginning of period ................................................... 0
---------
End of period (a) .....................................................$3,361,603
=========
<FN>
(a) Includes undistributed net investment income of...................... $48
=========
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For the period from January 2, 1997 to June 30, 1997 (Unaudited)
<S> <C>
Per share data:
Net asset value, beginning of period..................................... $10.00
Income from investment operations:
Net investment income.................................................. 0.07
Net realized and unrealized gain on investments........................ 1.55
---------
Total income from investment operations.............................. 1.62
---------
Less distributions:
Dividends declared .................................................... (0.06)
---------
Net asset value, end of period........................................... $11.56
=========
Total return............................................................. 16.28%(b)
Ratios and supplemental data:
Ratio of expenses to average net assets................................ 1.31%(a)
Ratio of net investment income to average net assets................... 1.25%(a)
Portfolio turnover rate.................................................. 3%(b)
Average commission rate ................................................. $0.26 (c)
Net assets at end of period (millions)................................... $3.4
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) Represents the total dollar amount of commissions paid on equity security
transactions divided by the total number of shares purchased and sold by the
portfolio.
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 87
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
(1) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Ohio National Fund, Inc. (Fund) is registered under the Investment Company
Act of 1940 as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund is a series investment company
which consists of sixteen separate investment portfolios that seek the
following investment objectives:
EQUITY PORTFOLIO - long-term growth of capital by investing principally in
common stocks or other equity securities. Current income is a secondary
objective.
MONEY MARKET PORTFOLIO - maximum current income consistent with
preservation of capital and liquidity by investing in high quality money
market instruments.
BOND PORTFOLIO - high level of return consistent with preservation of
capital by investing primarily in high quality intermediate and long-term
debt securities.
OMNI PORTFOLIO - high level of long-term total return consistent with
preservation of capital by investing in stocks, bonds, and money market
instruments.
INTERNATIONAL PORTFOLIO - long-term capital growth by investing primarily
in common stocks of foreign companies.
CAPITAL APPRECIATION PORTFOLIO - maximum capital growth by investing
primarily in common stocks that are (1) considered to be undervalued or
temporarily out of favor with investors, or (2) expected to increase in
price over the short term.
SMALL CAP PORTFOLIO - maximum capital growth by investing primarily in
common stocks of small- and medium-sized companies.
GLOBAL CONTRARIAN PORTFOLIO - long-term growth of capital by investing in
foreign and domestic securities believed to be undervalued or presently out
of favor.
AGGRESSIVE GROWTH PORTFOLIO - capital growth.
The following portfolios commenced operations on January 2, 1997:
CORE GROWTH PORTFOLIO - long-term capital appreciation.
GROWTH & INCOME PORTFOLIO - long-term total return by investing in equity
and debt securities focusing on small- and mid-cap companies that offer
potential for capital appreciation, current income, or both.
S&P 500 INDEX PORTFOLIO - total return that approximates that of the
Standard & Poor's 500 Index ("S&P 500") by investing in common stocks and
in stock index futures contracts hedged by U.S. Government obligations,
investment grade corporate bonds and cash equivalents.
SOCIAL AWARENESS PORTFOLIO - long-term capital growth by investing
primarily in common stocks and other equity securities of companies that,
in the Advisor's opinion, conduct their business in a way that enhances
society's quality of life.
STRATEGIC INCOME PORTFOLIO - high current income by investing at least 40%
of its assets in a core group of U.S. government and corporate fixed income
securities and the remainder in other income producing securities.
STELLAR PORTFOLIO - maximum total return by investing in domestic and
foreign securities (equity and fixed income), real estate, precious metal
securities, and money market securities.
RELATIVE VALUE PORTFOLIO - maximum total return consistent with reasonable
risk by investing primarily in equity securities.
The following is a summary of significant accounting policies:
Investments in the Money Market Portfolio are valued at amortized cost in
accordance with Rule 2a-7, which approximates market value. All net
investment income of the Money Market Portfolio is declared and paid daily
as a dividend to shareholders immediately before the computation of the net
asset value of Money Market Portfolio shares. Dividends are automatically
reinvested in additional Money Market Portfolio shares at the net asset
value immediately following such computation. Distributions arising from
net investment income from the remaining portfolios are declared and paid
to shareholders quarterly and are recorded on the ex-dividend date.
Distributions arising from accumulated net realized capital gains are
recorded on the ex-dividend date and are distributed to shareholders at
least once a year.
For all other portfolios, securities which are traded on U.S. and foreign
stock exchanges or in the over-the-counter markets are valued at the last
sale price or, if there has been no sale that day, at the last bid reported
as of 4:00 p.m. Eastern time on each day the New York Stock Exchange is
open for unrestricted trading. Over-the-counter securities are valued at
the last bid price as of the close of trading on the Exchange. Short-term
investments (investments with remaining maturities of 60 days or less) are
valued at amortized cost and fixed income securities are valued by using
market quotations, or independent pricing services which use prices
provided by market makers or estimates of market value obtained
<PAGE> 88
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
from yield data relating to instruments or securities with similar
characteristics. All investments and cash quoted in foreign currencies are
valued daily in U.S. dollars on the basis of the foreign currency exchange
rates prevailing at the time of such valuation.
Foreign currency exchange rates are generally determined prior to 4:00 p.m.
Eastern time. Occasionally, events affecting the value of foreign
investments and such exchange rates occur between the time at which they
are determined and the time of valuation, which in the case of the
International, Small Cap, Global Contrarian, Aggressive Growth, and Stellar
Portfolios, would not be reflected in the computation of the portfolios'
net asset value. If events materially affecting the value of such
securities or currency exchange rates occurred during such time period, the
securities are valued at their fair value as determined in good faith by or
under the direction of the Fund's Board of Directors.
In connection with purchases and sales of securities denominated in foreign
currencies, the Fund may enter into forward foreign currency exchange
contracts (forward contracts). A forward contract is a commitment to
purchase or sell a foreign currency at a future date, at a negotiated rate.
Additionally, the Fund may enter into such contracts to hedge certain other
foreign currency denominated investments. These contracts are recorded at
market value, and the related realized and unrealized foreign exchange
gains and losses are included in the statement of operations. In the event
that counterparties fail to settle these currency contracts or the related
foreign security trades, the Fund could be exposed to foreign currency
fluctuations.
Each portfolio other than the Money Market Portfolio may (a) write call
options traded on a registered national securities exchange if such
portfolio owns the underlying securities subject to such options, and
purchase call options for the purpose of closing out positions it has
written, (b) purchase put options on securities owned, and sell such
options in order to close its positions in put options, (c) purchase and
sell financial futures and options thereon, and (d) purchase and sell
financial index options; provided, however, that no option or futures
contract shall be purchased or sold if, as a result, more than one-third of
the total assets of the portfolio would be hedged by options or futures
contracts, and no more than 5% of any portfolio's total assets, at market
value, may be used for premiums on open options and initial margin deposits
on futures contracts. Options are recorded at market value, and the related
realized and unrealized gains and losses are included in the statement of
operations. The portfolios making use of options bear the market risk of an
unfavorable change in the price of any security underlying the options.
The Fund may invest in two kinds of financial futures contracts: stock
index futures contracts and interest rate futures contracts. Stock index
futures contracts are contracts developed by and traded on national
commodity exchanges whereby the buyer will, on a specified future date, pay
or receive a final cash payment equal to the difference between the actual
value of the stock index on the last day of the contract and the value of
the stock index established by the contract multiplied by the specific
dollar amount set by the exchange. Futures contracts may be based on
broad-based stock indexes such as the Standard & Poor's 500 Index or on
narrow-based stock indexes. A particular index will be selected according
to Ohio National Investments, Inc.'s ("ONI's"), the investment advisor to
the Fund, investment strategy for the particular portfolio. The Fund may
enter into such contracts to reduce the risk of fluctuation of portfolio
securities values or to take advantage of expected market fluctuations.
Securities transactions are recorded on a trade date basis. Dividend income
is recognized on the ex-dividend date (except in the case of foreign
securities in the International, Small Cap, Global Contrarian, Aggressive
Growth, and Stellar Portfolios, in which dividends are recorded as soon
after the ex-dividend date as the fund becomes aware of such dividends),
and interest income is accrued daily as earned. Net realized gain or loss
on investments and foreign exchange transactions are determined using the
first-in, first-out method except in the case of the Aggressive Growth
Portfolio in which the identified cost basis is used.
The books and records of all the portfolios are maintained in U.S. dollars.
Foreign currency amounts in the International, Small Cap, Global
Contrarian, Aggressive Growth and Stellar Portfolios are translated into
U.S. dollars on the following basis:
(1) market value of investments, other assets and liabilities--at exchange
rates prevailing at the end of the period.
(2) purchases and sales of investments, income and expenses--at the rates
of exchange prevailing on the respective dates of such transaction.
Although the net assets and the market value of the portfolios are
presented at the foreign exchange rates at the end of the period, the
portfolios do not generally isolate the effect of fluctuations in foreign
exchange rates from the effect of changes in the market price of the
investments. However, the portfolios do isolate the effect of fluctuations
in foreign exchange rates when determining the gain or loss upon sale or
maturity of foreign-currency denominated debt obligations pursuant to
Federal income tax regulations.
<PAGE> 89
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
Foreign investment and currency transactions may involve certain
considerations and risks not typically associated with investing in U.S.
companies and the U.S. Government. These risks, including re-evaluation of
currency and future adverse political and economic developments, could
cause investments and their markets to be less liquid and prices more
volatile than those of comparable U.S. companies and the U.S. Government.
Each portfolio may acquire repurchase agreements from member banks of the
Federal Reserve System which ONI deems creditworthy under guidelines
approved by the Board of Directors, subject to the seller's agreement to
repurchase such securities at a mutually agreed upon date and price. The
repurchase price generally equals the price paid by the portfolio plus
interest negotiated on the basis of current short-term rates, which may be
more or less than the rate on the underlying portfolio securities. The
seller, under a repurchase agreement, is required to maintain as collateral
for the repurchase transaction securities in which the portfolio has a
perfected security interest with a value not less than 100% of the
repurchase price (including accrued interest). Securities subject to
repurchase agreements are held by the Fund's custodian or another qualified
custodian or in the Federal Reserve/Treasury book-entry system. Repurchase
agreements are considered to be loans by the portfolio under the 1940 Act.
For Federal income tax purposes, the Bond, Small Cap and Aggressive Growth
Portfolios had capital loss carryovers of $82,701, $229,009 and $1,425,782
respectively, at December 31, 1996. If not offset by capital gains, $82,701
and $47,306 will expire in 2003 in the Bond and Aggressive Growth
Portfolios respectively and $229,009 and $1,378,476 will expire in 2004 in
the Small Cap and Aggressive Growth Portfolios respectively. The Board of
Directors does not intend to authorize a distribution of any net realized
gain for a portfolio until the capital loss carryover has been offset or
expires.
It is the policy of the Fund to distribute to its shareholders
substantially all of its taxable income, thus gaining relief from Federal
income taxes under provisions of current tax regulations applicable to
investment companies of this type. Accordingly, no provision for Federal
income taxes has been made.
Most expenses of the Fund can be directly attributed to a portfolio.
Expenses which cannot be directly attributed are allocated between the
portfolios in the Fund based on average net assets.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
The gross unrealized appreciation and depreciation on investments in each
portfolio as of June 30, 1997 were as follows:
<TABLE>
<CAPTION>
CAPITAL
EQUITY BOND OMNI INTERNATIONAL APPRECIATION
------ ---- ---- ------------- ------------
<S> <C> <C> <C> <C> <C>
Gross unrealized:
Appreciation.................... $ 107,584,077 $ 491,051 $ 49,139,397 $ 22,943,831 $ 5,583,332
Depreciation.................... (3,285,037) (197,998) (1,831,645) (6,480,762) (527,063)
Net Unrealized:
Appreciation (Depreciation)..... 104,299,040 293,053 47,307,752 16,463,069 5,056,269
</TABLE>
<PAGE> 90
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SMALL GLOBAL AGGRESSIVE CORE GROWTH &
CAP CONTRARIAN GROWTH GROWTH INCOME
--- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Gross unrealized:
Appreciation..................... $ 9,442,729 $ 1,469,430 $ 1,803,862 $ 759,503 $ 720,608
Depreciation..................... (1,322,798) (519,957) (703,565) (190,102) (40,616)
Net Unrealized:
Appreciation (Depreciation)...... 8,119,931 949,473 1,100,297 569,401 679,992
</TABLE>
<TABLE>
<CAPTION>
SOCIAL STRATEGIC RELATIVE
S&P 500 AWARENESS INCOME STELLAR VALUE
------- --------- ------ ------- -----
<S> <C> <C> <C> <C> <C>
Gross unrealized:
Appreciation..................... $ 753,793 $ 264,446 $ 18,059 $ 120,695 $ 393,998
Depreciation..................... (14,678) (57,208) (23,745) (22,340) (17,829)
Net Unrealized:
Appreciation (Depreciation)...... 739,115 207,238 (5,686) 98,355 376,169
</TABLE>
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term securities)
for the six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
CAPITAL
EQUITY BOND OMNI INTERNATIONAL APPRECIATION
------ ---- ---- ------------- ------------
<S> <C> <C> <C> <C> <C>
Stocks & Bonds:
Purchases............... $ 24,560,090 $ 696,384 $ 19,323,699 $ 19,972,222 $13,676,652
Sales................... 16,197,437 3,975 9,007,812 17,936,186 7,687,398
U.S. Government
Obligations:
Purchases............... -- -- -- -- 199,922
Sales................... -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
SMALL GLOBAL AGGRESSIVE CORE GROWTH &
CAP CONTRARIAN GROWTH GROWTH INCOME
--- ---------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
INCOME
Stocks & Bonds:
Purchases.............. $15,919,033 $4,100,342 $16,038,722 $6,348,461 $7,675,436
Sales.................. 13,365,182 1,719,563 13,194,993 839,254 547,391
U.S. Government
Obligations:
Purchases.............. -- -- -- -- --
Sales.................. -- -- -- -- --
</TABLE>
<PAGE> 91
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SOCIAL STRATEGIC RELATIVE
S&P 500 AWARENESS INCOME STELLAR VALUE
------- --------- ------ ------- -----
<S> <C> <C> <C> <C> <C>
VALUE
Stocks & Bonds:
Purchases............... $6,011,273 $2,645,148 $3,004,749 $1,743,018 $2,243,479
Sales................... 862,438 628,563 1,292,984 132,251 72,525
U.S. Government
Obligations:
Purchases............... -- -- 463,605 206,945 --
Sales................... -- -- 81,402 -- --
</TABLE>
(3) INVESTMENT ADVISORY AGREEMENT, SUB-ADVISORY AGREEMENTS AND TRANSACTIONS
WITH AFFILIATED PERSONS
The Fund has an investment advisory agreement with Ohio National
Investments, Inc. ("ONI") a wholly owned subsidiary of Ohio National Life
Insurance Company (ONLIC), under the terms of which ONI provides portfolio
management and investment advice to the Fund and administers its other
affairs, subject to the supervision of the Fund's Board of Directors. As
compensation for its services, ONI receives from the Fund annual fees on
the basis of each portfolio's average daily net assets based on the
following schedule: (a) for each of the Equity, Bond, Omni and Social
Awareness Portfolios, 0.60% of the first $100 million of each Portfolio's
net assets, 0.50% of the next $150 million of net assets, 0.45% of the next
$250 million of net assets, 0.40% of the next $500 million of net assets,
0.30% of the next $1 billion of net assets, and 0.25% of net assets over $2
billion; (b) for the Money Market Portfolio, 0.30% of the first $100
million of net assets, 0.25% of the next $150 million of net assets, 0.23%
of the net $250 million of net assets, 0.20% of the next $500 million of
net assets, and 0.15% of net assets over $1 billion; (c) for the
International, Global Contrarian, and Relative Value Portfolios, 0.90% of
each Portfolio's net assets; (d) for the Capital Appreciation, Small Cap,
Aggressive Growth and Strategic Income Portfolios, 0.80% of each
Portfolio's net assets, (e) for the Core Growth Portfolio, 0.95% of the
first $150 million of net assets, and 0.80% of net assets over $150
million; (f) for the Growth & Income Portfolio, 0.85% of the first $200
million of net assets and 0.80% of net assets over $200 million, (g) for
the S&P 500 Index Portfolio, 0.40% of the first $100 million of net assets,
0.35% of the next $150 million of net assets, and 0.33% of net assets over
$250 million; and (h) for the Stellar Portfolio, 1.00% of that Portfolio's
net assets. However, as to the Money Market Portfolio, the Advisor is
presently waiving any of its fee in excess of 0.25%.
Under the Investment Advisory Agreement, the Fund authorizes ONI to retain
sub-advisors for the International, Capital Appreciation, Small Cap, Global
Contrarian, Aggressive Growth, Core Growth, Growth & Income, Strategic
Income, Stellar and Relative Value Portfolios, subject to the approval of
the Fund's Board of Directors. ONI has entered into Sub-Advisory Agreements
with Societe Generale Asset Management Corp. ("SGAM"), T. Row Price
Associates, Inc. ("TRPA"), Founders Asset Management, Inc. ("FAM"), Strong
Capital Management, Inc. ("SCM"), Pilgrim Baxter & Associates, Ltd.
("PBA"), Robertson Stephens Investment Management, L.P. ("RSIM"), and Star
Bank, N.A. ("Star"), respectively, to manage the investment and
reinvestment of those Portfolios' assets, subject to the supervision of
ONI. As compensation for their services, (a) SGAM receives from ONI fees at
the annual rate of 0.75% of the International and Global Contrarian
Portfolios' average daily net assets during the quarter for which the fee
is paid, (b) TRPA receives from ONI a fee at an annual rate of 0.70% of the
first $5 million, and 0.50% over average daily net asset value in excess of
$5 million, of the Capital Appreciation Portfolio, (c) FAM receives from
ONI a fee at an annual rate of 0.65% of the first $75 million, 0.60% of the
next $75 million, and 0.55% of the average daily net asset value in excess
of $150 million of the Small Cap Portfolio; (d) SCM receives from ONI a fee
at an annual rate of 0.70% of the first $50 million, and 0.50% of average
daily net asset value in excess of $50 million of the Aggressive Growth
Portfolio; (e) PBA receives from ONI a fee at an annual rate of 0.75% of
the first $50 million, 0.70% of the next $100 million, and 0.50% of average
daily net assets in excess of $150 million of the Core Growth Portfolio:
(f) RSIM receives from ONI a fee at an annual rate of 0.60% of the first
$100 million, 0.55% of the next $100 million, and 0.50% of average daily
net assets in excess of $200 million of the Growth & Income Portfolio; and
(g) Star receives from ONI fees at an annual rate of (i) 0.55% of the first
$50 million and 0.50% of average daily net assets in excess of $50 million
of the Strategic Income Portfolio, (ii) 0.75% of the $50 million and 0.70%
of average daily net assets in excess of $50 million of the Stellar
Portfolio and (iii) 0.65% of the first $50 million and 0.60% of average
daily net assets in excess of $50 million of the Relative Value Portfolio.
Each director who is not an officer of the Fund or an employee of ONI or
its corporate affiliates is paid a quarterly retainer fee of $2,000 plus
$400 for each meeting attended.
<PAGE> 92
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
The Fund's transfer agent and dividend paying agent is American Data
Services, Inc., 24 West Carver Street, Huntington, New York. The Fund's
custodian for those portfolios other than the International and Global
Contrarian Portfolios is Star Bank, N.A., 425 Walnut Street, Cincinnati.
Ohio. The custodian for the International and Global Contrarian Portfolios
is Investors Fiduciary Trust Company, 127 West Tenth Street, Kansas City,
Missouri. For International and Global Contrarian Portfolio assets held
outside the United States, Star Bank and Investors Fiduciary Trust Company
enter into subcustodial agreements, subject to approval by the Board of
Directors.
(4) CAPITAL SHARE TRANSACTIONS
Capital share transactions for the six months ended June 30, 1997 were as
follows:
<TABLE>
<CAPTION>
EQUITY MONEY MARKET BOND
------ ------------ ----
6-30-97 1996 6-30-97 1996 6-30-97 1996
------- ---- ------- ---- ------- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Capital shares
issued on sales ............... 686,451 1,251,722 1,775,453 2,854,453 431,089 654,067
Capital shares issued
on reinvested dividends ....... 151,582 296,586 61,028 97,983 96,678 118,018
Capital shares redeemed.......... 457,775 488,195 2,145,470 1,972,882 549,036 469,144
OMNI INTERNATIONAL CAPITAL APPRECIATION
---- ------------- --------------------
6-30-97 1996 6-30-97 1996 6-30-97 1996
------- ---- ------- ---- ------- ----
Capital shares
issued on sales ............... 959,585 1,421,502 1,564,348 2,498,593 688,990 1,370,341
Capital shares issued
on reinvested dividends ....... 236,924 312,746 700,650 437,139 139,039 137,455
Capital shares redeemed ......... 431,878 461,070 742,926 372,436 116,115 158,593
SMALL CAP GLOBAL CONTRARIAN AGGRESSIVE GROWTH
--------- ----------------- -----------------
6-30-97 1996 6-30-97 1996 6-30-97 1996
------- ---- ------- ---- ------- ----
Capital shares
issued on sales ............... 557,854 1,175,931 273,400 694,759 374,490 849,211
Capital shares issued
on reinvested dividends ....... 0 35,538 51,370 22,442 17,669 124,213
Capital shares redeemed ......... 99,999 89,525 99,172 158,086 105,086 114,532
CORE GROWTH & SOCIAL STRATEG. RELATIVE
GROWTH INCOME S&P 500 AWARE. INCOME STELLAR VALUE
------ ------ ------- ------ ------ ------- -----
Capital shares
issued on sales ............... 776,996 570,565 880,072 222,776 218,734 231,790 294,650
Capital shares issued
on reinvested dividends ....... 419 2,613 6,671 398 7,255 3,064 1,442
Capital shares redeemed ......... 82,728 35,011 54,003 2,133 1,849 4,435 5,380
</TABLE>
The Fund is authorized to issue 250,000,000 of its capital shares.
20,000,000 shares each have been allocated to the Equity and Omni
Portfolios, and 10,000,000 are allocated to each of the other portfolios.
The remaining 70,000,000 are unallocated at this time.
<PAGE> 93
OHIO NATIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1997 (Unaudited)
(5) COMMITMENTS
As of June 30, 1997, the International and Global Contrarian Portfolios had
entered into forward currency contracts, as set forth below, summarized by
currency:
INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
SETTLE CURRENCY TO BE DELIVERED U.S. $ VAL. CURRENCY TO BE RECEIVED U.S. $ VAL. UNREALIZED
DATES AMOUNT TYPE AT 06/30/97 AMOUNT TYPE AT 06/30/97 GAIN LOSS
----- ------ ---- ----------- ------ ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09/10/97 54,000 Swiss Franc 37,303 37,386 U.S. Dollar 37,386 83
01/08/98 7,706,000 Swiss Franc 5,399,762 5,421,479 U.S. Dollar 5,421,479 43,567 (21,850)
09/17/97 1,127,000 Deutsche Mark 650,149 667,767 U.S. Dollar 667,767 17,618
09/17/97 666,133 U.S. Dollar 666,133 1,127,000 Deutsche Mark 650,149 (15,984)
01/15/98 12,089,000 Deutsche Mark 7,036,466 7,230,258 U.S. Dollar 7,230,258 193,792
01/15/98 269,262 U.S. Dollar 269,262 457,000 Deutsche Mark 265,999 (3,263)
08/08/97 61,180,000 French Franc 10,436,533 11,583,644 U.S. Dollar 11,583,644 1,147,111
08/08/97 455,392 U.S. Dollar 455,392 2,655,000 French Franc 452,909 (2,483)
01/22/98 15,027,000 French Franc 2,592,829 2,680,150 U.S. Dollar 2,680,150 87,321
09/24/97 1,094,900,000 Japanese Yen 9,679,102 9,684,024 U.S. Dollar 9,684,024 4,922
01/29/98 246,050,000 Japanese Yen 2,215,669 2,205,787 U.S. Dollar 2,205,787 (9,882)
10/03/97 2,594,000 New Zld Dollar 1,769,757 1,759,358 U.S. Dollar 1,759,358 4,114 (14,513)
-------------- ------------- ------------ ----------
41,208,357 42,638,910 1,498,528 (67,975)
============= ============ ==========
</TABLE>
GLOBAL CONTRARIAN PORTFOLIO
<TABLE>
<CAPTION>
SETTLE CURRENCY TO BE DELIVERED U.S. $ VAL. CURRENCY TO BE RECEIVED U.S. $ VAL. UNREALIZED
DATES AMOUNT TYPE AT 06/30/97 AMOUNT TYPE AT 06/30/97 GAIN LOSS
----- ------ ---- ----------- ------ ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
01/08/98 34,000 Swiss Franc 23,825 23,690 U.S. Dollar 23,690 (135)
01/15/98 220,000 Deutsche Mark 128,052 131,595 U.S. Dollar 131,595 3,543
01/15/98 129,465 U.S. Dollar 129,465 220,000 Deutsche Mark 128,052 (1,413)
08/08/97 1,896,000 French Franc 323,434 361,570 U.S. Dollar 361,570 38,136
08/08/97 24,310 U.S. Dollar 24,310 140,000 French Franc 23,882 (428)
09/24/97 34,400,000 Japanese Yen 304,102 304,257 U.S. Dollar 304,257 155
09/24/97 59,431 U.S. Dollar 59,431 6,795,000 Japanese Yen 60,069 638
01/08/98 125,000 Dutch Guilder 64,579 65,329 U.S. Dollar 65,328 749
---------------- -------------- ------------ ---------
1,057,198 1,098,443 43,221 (1,976)
================ ============== ============ =========
</TABLE>
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