<PAGE>
THE HUDSON RIVER TRUST
......................
ANNUAL REPORT
DECEMBER 31, 1996
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MARKET CONDITIONS
1996 was another successful year for domestic equities. For the second
consecutive year, the Dow Jones Industrial Average, comprised of 30 stocks,
turned in a stellar performance. Coming off of 1995's 33.5% rise, the Dow
posted a decisive 26% gain in 1996. In fact, the Dow ended the best two-year
period of performance in more than 40 years. During those two years, the Dow
set new closing highs 113 times, an average of more than one new high a week,
including 44 times in 1996.
The economy provided an excellent backdrop for the stock market strength as
growth continued, but not at rate sufficient to cause upward pressure on
inflation. The broad based S&P 500 Index generated a total return of 22.96%,
while most other indices managed to produce smaller, but still double-digit,
rates of return. The S&P Mid-Cap Index returned 19.20% and the Russell 2000, an
index of smaller capitalization stocks, rose 16.49%. There was only one
significant dip in the market last year. In July 1996, a series of economic
data signaled stronger-than-expected growth and triggered fears over a
tightening in monetary policy. Subsequent data allayed those concerns and the
market resumed its climb to new highs.
Foreign and U.S. fixed-income securities underperformed in 1996 relative to
equity returns. The Lehman Aggregate Bond Index, an index of broad bond
markets, posted a return of 3.63%. Within the corporate market, lower quality
credits generally outperformed those of higher quality. The best performing
fixed income sectors were high yield and money markets.
On the international front, Morgan Stanley's broad Europe, Australia and Far
East Index (EAFE) returned 6.05%, dragged down primarily by Japan's poor
performance as market investors reacted to a faltering economy. The U.S.
provided the largest share of the 13.5% gain in the MSCI/World Index during
1996.
The U.S. economy finished 1996 on a strong note. The Fed has kept its target
rate for overnight funds steady at 5.25% despite continuing concerns among
policy makers about inflation risks. Following second quarter's robust 4.7% GDP
growth rate, economic growth slowed during the third quarter to 2.1% led by a
slowdown in consumer spending. Recent data indicate that consumer spending
rebounded during the holiday shopping season and helped propel growth higher.
Inflation remained very well-behaved with year-over-year retail and producer
prices up only 2.6% and 0.6% respectively.
The macro-economic outlook suggests an environment of slower economic growth
and low inflation. The profit outlook is positive as continued global
competition and attention to cost control should continue to result in modest
earnings growth. The positive economic backdrop for capital markets, however,
is offset, to some extent, by the high level of investor expectations generated
by this long-running bull market. In light of the market gains over the past
two years, it is not likely that the market will match the high returns of 1995
and 1996. More modest 7-11% equity returns are more realistic for the coming
year with perhaps better relative performance coming from the small- and mid-
cap areas of the market as the bull market cycle advances into its later
stages. So, as the new year begins, we are certainly not bearish. Rather, we
consider ourselves to be cautious bulls. Our hope is for steady market gains,
stretched over time, as the rationale for staying the course.
A1
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THE EQUITY SERIES:
GROWTH & INCOME PORTFOLIO
PAUL RISSMAN
Senior Vice President
Investment experience:
8 years
W. THEODORE KUCK
Senior Vice President
Investment experience:
23 years
The U.S. equity markets continued their heady climb in 1996, with the S&P 500
rising 22.96%. The S&P 500 was up 69% since the beginning of 1995. Growth
stocks, generally driven by investor cash flow and earnings momentum, led the
market. Value stocks, whose performance is based more on low valuations to
earnings, lagged.
The Portfolio's conservative focus on low valuation, high-dividend paying
companies prevented it from fully participating in the market rally. The
Portfolio underperformed compared to its unmanaged benchmark, 75% S&P 500 and
25% Value Line Convertibles.
After the Portfolio changed managers in February 1996, a number of new
strategic actions were implemented. Since, historically, equities tend to
outperform bonds and cash, we decreased the cash exposure and increased the
common stock position. Additionally, we have adjusted the sector and industry
weightings of the Portfolio to more closely resemble their weightings in the
S&P 500, as we seek to add value through stock selection rather than industry
positions.
These actions have had their desired effect on performance. In the first six
months of 1996, the Portfolio lagged its benchmark by 280 basis points.
However, with the Portfolio restructured in the last half of 1996, it
outperformed its benchmark by 180 basis points.
Looking forward, we expect the markets to remain sensitive to the activities of
the Federal Reserve Board. If the threat of inflation prompts the Federal
Reserve to undertake a prolonged period of monetary tightening, we believe that
stocks could react poorly, but we do not expect that the economy will overheat.
A benign inflation environment combined with moderate economic growth could
drive the markets to new highs. Despite continuing economic change, we feel
that our stock selection process will allow us to weather whatever shifts the
market makes.
INVESTMENT OBJECTIVE
High total return through a combination of current income and capital
appreciation.
INVESTMENT POLICY
Primarily income-producing common stocks and securities convertible into common
stocks.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ...........................$232.1 MILLION
Number of Issues.................................120
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Convertibles 11.5%
Short-Term & Cash 4.0%
Common Stock 82.2%
Preferred Stock 2.3%
LARGEST HOLDINGS
AT&T CORP.
The largest U.S. long-distance telephone company. It also provides financial
services.
MERCK & CO., INC.
The largest pharmaceutical company in the U.S. Entered the managed care market
through the acquisition of Medco Containment Systems, the leading mail-order
drug marketer in the U.S.
EXXON CORP.
Exxon is a major world crude oil and natural gas exploration, production,
transportation and marketing company. It also explores for, and mines, coal and
other minerals, and produces and sells petrochemicals.
CAMPBELL SOUP CO.
Largest soup manufacturer in the U.S. Other major food brands include
Pepperidge Farm and Godiva Chocolates.
PHILIP MORRIS COS., INC.
The largest cigarette company in the U.S. (Marlboro), second-largest
brewer (Miller Brewing Co.) and largest U.S. food processor (Kraft
General Foods, Inc.).
MOBIL CORP.
A worldwide integrated petroleum company and leading producer of chemicals with
an aggressive exploration program to develop frontier oil fields.
RJR NABISCO HOLDINGS CORP.
Global cigarette and snacks manufacturer.
A2
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THE EQUITY SERIES:
EQUITY INDEX PORTFOLIO
JUDITH MAGLIO
Vice President
Investment experience:
26 years
The rally of the equity market in 1996 resulted in strong performance for the
S&P 500, and consequently for the Equity Index Portfolio. As of December 31,
1996, the Equity Index Portfolio (after expenses) performed in line with its
market benchmark, the S&P 500.
The Equity Index Portfolio is the only passively managed portfolio within The
Hudson River Trust. Using a stratified sampling technique, the Portfolio is
constructed to track the investment results of the S&P 500 Index before
expenses without holding all 500 issues. Because the objective of the Portfolio
is to track the S&P 500, it will remain fully invested in stocks.
As of December 31, 1996, the Portfolio held 451 of the 500 issues in the S&P
500 Index. Stocks were selected to mirror the market capitalization and
industry weightings of the S&P 500.
INVESTMENT OBJECTIVE
Total return before expenses that approximates the total return performance of
the Standard & Poor's 500 Index ("the Index"), including reinvestment of
dividends, at a risk level consistent with that of the Index.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ......................................$386.2 MILLION
Number of Issues........................................... 451
COMPARING THE EQUITY INDEX MARKET
DISTRIBUTION TO THE S&P 500
EQUITY S&P
MARKET SECTOR INDEX 500
Basic Materials..........5.7%..........5.3%
Business Services........3.1...........2.8
Capital Goods............7.9...........8.2
Consumer Cyclicals......10.7..........10.6
Consumer Noncyclicals ..22.4..........22.4
Credit Sensitive........24.0..........23.1
Energy..................10.9..........10.9
Technology..............13.9..........15.0
Diversified..............1.4...........1.7
LARGEST HOLDINGS
GENERAL ELECTRIC CO.
GE's business products include aircraft engines, appliances, broadcasting,
lighting and financial services.
COCA-COLA CO.
Coca-Cola, the world's largest soft drink company, makes soft drink
concentrates and syrups, and has a sizable fruit juice business - especially
orange juice.
EXXON CORP.
Exxon is a major world crude oil and natural gas exploration, production,
transportation and marketing company. It also explores for, and mines, coal and
other minerals, and produces and sells petrochemicals.
INTEL CORP.
World's leading semi-conductor manufacturer of microcomputer components,
modules and systems, most of which are sold directly to the computer industry.
MICROSOFT CORP.
Develops, markets and supports microcomputer software, including operating
systems, languages and application programs.
MERCK & CO., INC.
The largest pharmaceutical company in the U.S. Entered the managed care market
through the acquisition of Medco Containment Systems, the leading mail-order
drug marketer in the U.S.
A3
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THE EQUITY SERIES:
COMMON STOCK PORTFOLIO
TYLER SMITH
Senior Vice President
Investment experience:
33 years
The bull market continued its drive in 1996. The stock market rose in the first
half of 1996, experienced a sharp decline in July and then moved steadily
higher, finishing the year close to its all time high. The July decline stopped
just short of a 10% correction for the major averages, but was much steeper for
mid-cap and small-cap issues.
1996 was marked by narrowing leadership of large-cap stocks. In an environment
of slow economic growth and ample financial liquidity, investors tended to
emphasize large, high-quality stocks while the broader market lagged behind.
The Common Stock Portfolio has typically been underweighted in the largest blue
chip stocks, seeking better value in slightly smaller-sized companies.
Throughout 1996, this meant strong emphasis, relative to the large indexes, in
technology and financial stocks. Although the technology sector was quite weak
during the July sell-off, these stocks finished the year quite strong. The
financial stocks also did well for the year, enabling the Portfolio to
significantly outperform the S&P 500 for the year.
The market enters 1997 with continued momentum. As long as the status quo
environment of modest growth and stable interest rates continues, stocks should
continue to do well. The major risk is that the economy will accelerate and, as
a consequence, inflation and interest rates will rise. At current valuation
levels, higher interest rates would probably cause the stock market to stall.
We remain optimistic about the longer term potential for common stocks, but
once again would caution that recent returns have been well above the long-term
trend. More modest returns are a likely consequence in 1997.
INVESTMENT OBJECTIVE
Long-term growth of capital and increasing income.
INVESTMENT POLICY
Primarily common stock and other equity-type instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ............................................... $6.6 BILLION
Number of Issues .................................................. 106
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 3.7%
Common Stock 95.6%
Preferred Stock 0.7%
LARGEST HOLDINGS
CISCO SYSTEMS, INC.
Leading provider of equipment and systems used to interconnect and manage
computer networks.
MFS COMMUNICATIONS CO., INC.*
A provider of telecommunications and internet services to business and
government users. (Acquired by WorldCom Inc. on 1/2/97.)
INTEL CORP.
World's leading semi-conductor manufacturer of microcomputer components,
modules and systems, most of which are sold directly to the computer industry.
3COM CORP.*
Produces adapters, hubs and routers for computer networks.
AMERICAN INTERNATIONAL GROUP, INC.
One of the world's leading insurance organizations providing insurance and
other financial services in 130 countries and territories.
<PAGE>
TRAVELERS GROUP, INC.
This company offers diverse financial services, including investment services,
insurance and consumer lending.
LOEWS CORP.
A widely diversified conglomerate deriving most of its revenue from
property-casualty and life insurance, as well as cigarettes, through its
holdings CNA Insurance and Lorillard Tobacco.
*Includes convertibles
A4
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THE EQUITY SERIES:
GLOBAL PORTFOLIO
RONALD SIMCOE
Vice President
Investment experience:
19 years
The Global Portfolio outperformed its unmanaged benchmark, the MSCI World Index
for the year ended December 31, 1996. European markets matched the S&P 500's
nearly 23% gain in 1996, but dollar-based performance was reduced to 21% by
currency weakness. Japan's market fell 15.5%, including 11% in currency losses
versus the dollar. Emerging markets rose 6%, on average, for the year.
In a global environment of low inflation, stable prices, and low interest
rates, growth stocks performed strongly. The Portfolio benefited from its heavy
concentration in growth issues, particularly in Europe. We were slowed by our
broad exposure to medium- and small-capitalization issues, which significantly
underperformed large capitalization stocks.
European and U.S. holdings provided most of the Portfolio's gains, while our
Japanese exposure pulled down overall performance. Our Japanese emphasis on
growth stocks produced good relative returns.
At year end, international markets remain attractively valued relative to the
U.S. European companies with serious commitment to restructuring, and globally
competitive exporters are being added to the core growth portfolio. Japanese
holding are more heavily concentrated on growth stocks. Our U.S. portfolio
continues to emphasize technology and financial issues. Technology investments
are concentrated in networking, communication and software. In developing
markets, we are selectively buying companies which we believe can produce
significant positive earnings surprises for the foreseeable future.
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities of non-United States companies as well as United
States issuers.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ............................................ $997.3 MILLION
Number of Issues ................................................ 456
Number of Countries Represented ................................. 36
DISTRIBUTION OF EQUITY INVESTMENTS BY GLOBAL REGION
[Pie Chart Data Below]
Short-Term & Cash 8.7%
Canada 0.7%
Japan 18.0%
Southeast Asia 3.5%
Latin America 1.2%
United Kingdom 10.3%
Scandinavia 3.2%
New Zealand & Australia 1.8%
United States 36.8%
Other European Countries 15.8%
LARGEST EQUITY HOLDINGS
MFS COMMUNICATIONS CO., INC.*
A provider of telecommunications and internet services to business and
government users. (Acquired by WorldCom Inc. on 1/2/97.)
CISCO SYSTEMS, INC.
Leading provider of equipment and systems used to interconnect and manage
computer networks.
3COM CORP.*
Produces adapters, hubs and routers for computer networks.
INTEL CORP.
World's leading semi-conductor manufacturer of microcomputer components,
modules and systems, most of which are sold directly to the computer industry.
TRAVELERS GROUP, INC.
This company offers diverse financial services, including investment services,
insurance and consumer lending.
SGL CARBON AG
German producer of carbon electrodes for electric steel furnaces.
*Includes convertibles
Please refer to the prospectus for a description of the risks involved in
international investing, including currency, economic and political risks,
as well as differences in accounting.
A5
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THE EQUITY SERIES:
INTERNATIONAL PORTFOLIO
RONALD SIMCOE
Vice President
Investment experience:
19 years
The International Portfolio outperformed its unmanaged benchmark, the MSCI EAFE
Index, for the year ended December 31, 1996. Good European performance
overwhelmed that of the weak Japanese market. The MSCI Europe Index advanced
23% for the year, but dollar-based performance was reduced to 21% by currency
weakness. Japan's market fell 15.5%, including 11% in Yen depreciation versus
the dollar. Emerging markets rose 6%. Large capitalization growth stocks were
star performers internationally. With the exception of energy related issues,
most cyclicals performed poorly.
The historic growth orientation of the Portfolio provided the foundation for
our European results. Heavy weightings in Spain and Scandinavia, the best
individual market performers, more than offset underweighted positions in the
U.K. and other large continental markets. We are adding companies with serious
commitment to restructuring and globally competitive exporters to our core
growth positions.
Our Japanese exposure slowed overall performance. Overweighted positions in
exporters and domestic growth stocks and heavy underweights in financial stocks
produced good relative results. We have begun selling domestic cyclical issues
in favor of growth stocks and globally competitive exporters since October's
new government chose to substantially reduce fiscal stimulus for the economy.
In developing markets, Hong Kong property issues and Mexican consumer shares
were our best performers. We remain overweighted in Latin America because of
expected acceleration in economic growth in Brazil, Argentina, and Mexico. We
are concentrating on southeast Asian shares which we anticipate will benefit
from China's decision to sharply boost its domestic economy.
Steady, moderate economic growth is expected in most developed countries for
1997. Continued evidence of success, in containing inflation in spite of
ongoing economic recovery, could result in further interest rate declines and
resultant gains in global bond and equity markets. Stronger economic growth
appears likely in most developing markets. While we are concerned by the
historically high valuations being accorded growth stocks, we continue to
believe we can identify attractive international investment ideas.
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily equity securities selected principally to permit participation in
non-United States companies with prospects for growth.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ....................................... $151.9 MILLION
Number of Issues ............................................ 506
Number of Countries Represented ............................. 35
DISTRIBUTION OF EQUITY INVESTMENTS BY GLOBAL REGION
[Pie Chart Data Below]
Short-Term & Cash 13.1%
Canada 1.1%
Japan 30.3%
Southeast Asia 8.0%
Latin America 2.3%
United Kingdom 13.2%
Scandinavia 6.5%
New Zealand & Australia 4.5%
Other European Countries 21.0%
LARGEST EQUITY HOLDINGS
OROGEN MINERALS LTD. (GDS)
Australian-registered company holding rights to develop energy and base metal
reserves in Papua, New Guinea.
ALVERN NORWAY ASA
Major developer of gasoline station consumer advertising programs.
MEDIASET SPA
Largest Italian television broadcaster and programmer.
SCANDIC HOTELS AB
Leading Swedish hotel company with operations in other Scandinavian countries
and in Germany.
ST. DUPONT
Leading French producer of luxury goods including leather goods and fountain
pens.
CONTENT BEHEER N.V.
Fifth largest temporary help company in Holland.
FILTRONIC COMTEK PLC
British manufacturer of cellular telephone base station components.
TELEFONICA DEL PERU (ADS) Monopolist Peruvian telephone operator.
FYFFES PLC
Largest British importer and distributor of bananas.
Please refer to the prospectus for a description of the risks involved in
international investing, including currency, economic and political risks, as
well as differences in accounting.
A6
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THE EQUITY SERIES:
AGGRESSIVE STOCK PORTFOLIO
ALDEN STEWART
Executive Vice President
Investment experience:
25 years
RANDALL HAASE
Senior Vice President
Investment experience:
9 years
1996 marks the third consecutive year in which small capitalization stocks, as
measured by the Russell 2000 Index, trailed large capitalization stocks, as
measured by the S&P 500 Index. For 1996, the Russell 2000 returned 16.49% while
the S&P 500 rose 22.96%. The Aggressive Stock Portfolio significantly
outperformed its unmanaged benchmark, 50% S&P 500 Mid-Cap Total Return/50%
Russell 2000 as of December 31, 1996.
The energy sector performed exceptionally well in 1996. This was the second
year in a row in which the offshore drillers outperformed the market
substantially. Diamond Offshore Drilling and Rowan Companies Inc. benefited
from the strong demand to drill for natural gas putting upward pressure on day
rates for the rigs. The airline industry entered its third year of an improving
cycle. As capacity factors reach record levels and the operators continue to
pay down debt and restructure their balance sheets, earnings should continue to
be robust: Northwest Airlines should be a major beneficiary. As of December 31,
1996, we were underweighted in financial stocks.
Key areas of overweight in 1996 were energy, healthcare, retail and airlines.
Among our top 25 holdings, the growth retail performed well. The Nine West
Group and Tommy Hilfiger Corporation are companies with specialty niches which
are anticipated to continue to benefit from the steadily increasing corporate
trend of "dress down Friday." In addition, Republic Industries and Circuit City
Stores (CarMax) are anticipated to benefit from the consolidation of the
automobile retail sector.
Going forward, the Portfolio will remain concentrated in high quality companies
that continue to build their franchises and importantly, have the potential to
expand market share in their respective industries. With a longer-term
perspective, we will look for value in small- and mid-cap stocks and remain
observant of the need for careful attention to investment selections.
INVESTMENT OBJECTIVE
Long-term growth of capital.
INVESTMENT POLICY
Primarily common stocks and other equity-type securities issued by quality
small- and intermediate-sized companies with strong growth prospects.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets .......................................$3.9 BILLION
Number of Issues ...........................................76
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 6.0%
Common Stock 94.0%
LARGEST HOLDINGS
NINE WEST GROUP, INC.
One of the leading manufacturers of women's footwear in the United States. The
company sells their products through department stores as well as their own
retail stores.
ULTRAMAR DIAMOND SHAMROCK CORP.
One of the leading U.S. oil refineries. Recently, Diamond Shamrock was
acquired by Ultramar as the industry continues to consolidate.
HOST MARRIOTT CORP.
One of the largest owners of hotels in the world with over 90 lodging
properties operated under the Marriott brand, primarily in the United States.
CNA FINANCIAL CORP.
One of the largest property-casualty and life insurers in the United States.
HEALTHSOUTH CORP.
The largest provider of inpatient and outpatient rehabilitation services in the
country.
USA WASTE SERVICES, INC.
Integrated non-hazardous, solid waste management company serving municipal,
commercial, industrial and residential customers.
TELEPHONE & DATA SYSTEMS, INC.
Owns and operates local phone companies primarily in rural areas and is a
leading owner and operator of cellular telephone systems through its majority
ownership in U.S. Cellular.
A7
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THE ASSET ALLOCATION SERIES:
CONSERVATIVE INVESTORS PORTFOLIO
ROBERT G. HEISTERBERG
Senior Vice President
Investment experience:
36 years
U.S. fixed-income securities - the dominant asset class in this fund - turned
in a weak performance in 1996. The bond market, as measured by the Lehman
Government/Corporate Bond Index, returned 2.9%. In comparison, the S&P 500
Index generated a total return of nearly 23%.
At the start of 1996, the Portfolio's allocation to equities was a conservative
12%, and the fixed income portion was of a longer duration than the Lehman
Government/Corporate Bond Index benchmark. The Portfolio was designed to
benefit from our forecast for weakening profits and falling interest rates. The
Portfolio's performance suffered in the first quarter as stock prices rose and
bond prices fell. In March and June, equity allocations were raised to 26% and
30% respectively. At the same time, the duration of the fixed-income portfolio
was shortened.
These strategic shifts put more emphasis on sector selection, and overweighting
undervalued sectors and underweighting unattractive sectors. For example, the
Portfolio's position in mortgages was reduced as interest rates began to
decline and mortgage prepayment risk increased. Investments in corporate bonds
were raised during the fourth quarter as spreads relative to governments
widened because of heavy new issue activity. Such changes were beneficial: the
bond portion of the Portfolio outperformed its benchmark during the second half
of 1996.
The Portfolio's second-half total return, which was slightly shy of its
combined benchmark of 30% S&P 500/70% Lehman Government/Corporate Bond Index
was negatively affected by the 7% weighting in international securities and the
increase in cash position from 6.4% to 11% over the last six months of the
year.
We expect economic growth will moderate from its fourth quarter bounce to a 2%
rate during 1997. We are cautiously optimistic about equity prices as well.
Although valuation levels are approaching historically high levels, they are
supportable given our forecasts for benign inflation and moderate growth.
Nonetheless, we anticipate more modest equity returns than enjoyed in recent
years. We also expect a closing in the performance of U.S. stocks over both
fixed-income and international equity securities and we anticipate that a
broader range of stocks will participate in the rising market.
INVESTMENT OBJECTIVE
High total return without, in the investment adviser's opinion, undue risk to
principal.
INVESTMENT POLICY
Diversified mix of publicly traded equity and debt securities.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ............................................$282.4 MILLION
Number of U.S. Equity Issues .................................... 136
Average Quality* ................................................ AA+
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 10.9%
U.S. Common Stock 24.1%
Foreign Common Stock 7.2%
Foreign Preferred Stock 0.1%
Bonds 57.7%
Please refer to the prospectus for a description of the risks involved in
international investing, including currency, economic and political risks,
as well as differences in accounting.
LARGEST EQUITY HOLDINGS
PHILIP MORRIS COS., INC.
The largest cigarette company in the U.S. (Marlboro), second-largest brewer
(Miller Brewing Co.) and the largest U.S. food processor (Kraft General Foods,
Inc.).
CISCO SYSTEMS, INC.
Leading provider of equipment and systems used to interconnect and manage
computer networks.
3COM CORP.
Produces adapters, hubs and routers for computer networks.
TRAVELERS GROUP, INC.
This company offers diverse financial services, including investment services,
insurance and consumer lending.
<PAGE>
PFIZER, INC.
Major multi-national pharmaceutical company. Markets products under the Visine,
Ben-Gay and Procardia brand names.
MERCK & CO., INC.
The largest pharmaceutical company in the U.S. Entered the managed care market
through acquisition of Medco Containment Systems, the leading mail-order drug
marketer in the U.S.
We vary the portion of assets invested in each type of security in accordance
with our evaluation of economic conditions, the general level of common stock
prices, anticipated interest rates and other relevant considerations.
*The Average Quality represents a weighted average of the Portfolio's fixed
income holdings, excluding cash, using the Standard & Poor's rating scale.
A8
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THE ASSET ALLOCATION SERIES:
BALANCED PORTFOLIO
ROBERT G. HEISTERBERG
Senior Vice President
Investment experience:
36 years
The U.S. stock market provided investors with another rewarding year. The S&P
500 generated a total return of nearly 23%, while most other indices managed to
produce smaller but still double-digit rates of return.
Fixed-income markets demonstrated more volatility during 1996, and turned in
extremely disappointing results relative to equities. Fixed-income markets
posted a 3.63% return for the full year. The historic norm for the total return
gap between equities versus bonds is 6% to 8%. In the Portfolio, bonds
constituted 37.9% of assets as of December 31, 1996 and therefore were a factor
in its underperformance.
International equities also posted poor returns, with performance especially
weak in Japan as market investors reacted to a faltering economy. This inferior
performance was the principal factor in the Portfolio's underperformance
relative to its unmanaged benchmark 50% S&P 500/50% Lehman Government/Corporate
Bond Index since international equities represented 11.3% of the Portfolio as
of December 31, 1996.
With the U.S. stock market setting new highs, we believe the trade-off between
reward and risk may be narrowing. Consequently, we raised the Portfolio's cash
position in the closing weeks of the year to 10.6% from 5.0% at mid-year.
Going forward, we remain cautiously optimistic. Although valuation levels are
approaching historically high levels, our forecast for benign inflation and
interest rates, in combination with moderately sustainable economic growth,
should provide important support for valuation levels.
INVESTMENT OBJECTIVE
High return through both appreciation of capital and current income.
INVESTMENT POLICY
Diversified portfolio of publicly traded equity and debt securities and
short-term money market instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ............................................. $1.6 BILLION
Number of U.S. Equity Issues ....................................266
Average Quality* ................................................. AA
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 10.6%
U.S. Common Stock 36.6%
U.S. Preferred Stock 0.6%
Foreign Common Stock 11.3%
Convertibles 3.0%
Bonds 37.9%
Please refer to the prospectus for a description of the risks involed in
international investing, including currency, economic and political risks,
as well as differences in accounting.
LARGEST EQUITY HOLDINGS
3COM CORP.+
Produces adapters, hubs and routers for computer networks.
CISCO SYSTEMS, INC.
Leading provider of equipment and systems used to interconnect and manage
computer networks.
PHILIP MORRIS COS., INC.
The largest cigarette company in the U.S. (Marlboro), second-largest brewer
(Miller Brewing Co.) and the largest U.S. food processor (Kraft General Foods,
Inc.).
TRAVELERS GROUP, INC.
This company offers diverse financial services, including investment services,
insurance and consumer lending.
GENERAL ELECTRIC CO.
GE's business products include aircraft engines, appliances, broadcasting,
lighting and financial services.
<PAGE>
ALTERA CORP.+
This company develops and markets programmable logic integrated circuits and
computer engineering development software and hardware.
ORACLE CORP.
Leading provider of database management systems.
+Includes convertibles
We vary the portion of assets invested in each type of security in accordance
with our evaluation of economic conditions, the general level of common stock
prices, anticipated interest rates and other relevant considerations.
*The Average Quality represents a weighted average of the Portfolio's fixed
income holdings, excluding cash, using the Standard & Poor's rating scale.
A9
<PAGE>
THE ASSET ALLOCATION SERIES:
GROWTH INVESTORS PORTFOLIO
ROBERT G. HEISTERBERG
Senior Vice President
Investment experience:
36 years
1996 was another successful year for domestic equities. The S&P 500 Index
generated a total return of nearly 23%, while most other indices managed to
produce smaller but still double-digit rates of return. Fixed-income markets
demonstrated more volatility during 1996, and turned in extremely disappointing
results relative to equities, posting a 3.63% return for the full year.
There were two areas of underperformance in the Portfolio, namely international
equities and fixed-income securities. Foreign stock markets, as measured by
MSCI EAFE Index (a widely-accepted measure of international performance), fell
short of the S&P 500 Index by some 5.57% in the January-June period. In the
last six months of the year, the underperformance gap widened to 10.22%. In our
opinion, the unusually wide gap in performance reflects the fact that portfolio
managers are increasingly concentrating their investments in a smaller number
of stocks. We believe this trend is not sustainable.
The Growth Investors Portfolio began the second half of the year with equity
exposure of 69.8%, bonds at 20.2% and a cash position of 10%. During the last
three months a modest amount of cash (13%) was raised as the U.S. stock market
hit successive new highs. The source of this cash was a reduction in the larger
capitalization domestic equities segment of the Portfolio; additions were made
to international equities as a part of this realignment. The outperformance of
the large domestic stocks versus international and smaller cap stocks resulted
in the underperformance of the Portfolio versus its unmanaged benchmark, 70%
S&P 500/30% Lehman Government/Corporate Bond Index.
Looking ahead, we remain cautiously optimistic. Although valuation levels are
approaching historically high levels, our forecasts for benign inflation and
interest rates in combination with moderately sustainable economic growth,
should provide important support for valuation levels.
We expect more moderate returns in equities over the next few years. We also
expect the divergence among rates of return between bonds and stocks will be
much smaller than reported in 1996. We also anticipate that a broader range of
stocks will participate in the rising market and that international equities
will outperform U.S. securities.
INVESTMENT OBJECTIVE
Highest total return consistent with the investment adviser's determination of
reasonable risk
INVESTMENT POLICY
Diversified mix of publicly traded equity and fixed income securities,
including at times common stocks appropriate for investment by the Aggressive
Stock Portfolio and at times fixed income securities appropriate for the High
Yield Portfolio.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ...............................................$1.3 BILLION
Number of U.S. Equity Issues ..................................... 280
Average Quality, Investment Grade* ............................... AA
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 13.0%
Bonds 19.4%
U.S. Common Stock 48.7%
U.S. Preferred Stock 0.4%
Foreign Common Stock 15.5%
Convertibles 2.9%
Foreign Preferred Stock 0.1%
Please refer to the prospectus for a description of the risks involved
in international investing, including currency, economics and political
risks, as well as differences in accounting.
LARGEST EQUITY HOLDINGS
CISCO SYSTEMS, INC.
Leading provider of equipment and systems used to interconnect and manage
computer networks.
PHILIP MORRIS COS., INC.
The largest cigarette company in the U.S. (Marlboro), second-largest brewer
(Miller Brewing Co.) and the largest U.S. food processor (Kraft General Foods,
Inc.).
3COM CORP.+
Produces adapters, hubs and routers for computer networks.
PFIZER, INC.
Major multi-national pharmaceutical company. Markets products under the Visine,
Ben-Gay and Procardia brand names.
<PAGE>
TRAVELERS GROUP, INC.
This company offers diverse financial services, including investment services,
insurance and consumer lending.
AMERICAN EXPRESS, INC.
This company provides a variety of diversified travel and financial services.
FIRST UNION CORP.
Major regional bank in the Eastern United States.
+Includes convertibles
We vary the portion of assets invested in each type of security in accordance
with our evaluation of economic conditions, the general level of common stock
prices, anticipated interest rates and other relevant considerations.
*The Average Quality represents a weighted average of the Portfolio's fixed
income holdings, excluding cash, using the Standard & Poor's rating scale.
A10
<PAGE>
THE FIXED INCOME SERIES:
MONEY MARKET PORTFOLIO
RAYMOND PAPERA
Vice President
Investment experience:
15 years
Restraint was the key word for the Federal Reserve Policy in 1996. The Fed
spent most of the year watching the economy without committing to any movement
on interest rates. The last move by the Fed in January was also the only one
for 1996, lowering the target for overnight bank loans to 5 1/4%.
Inklings of potential Fed interest rate hikes throughout the third quarter
created periods of volatility for fixed-income markets. This provided us with a
short-term yield curve that finally steepened and we used this opportunity to
its fullest, extending maturities towards the end of the year as well as into
March 1997 at what became above-market levels. As for our year-end maturities,
it is usually advantageous to have excess cash in November and December to take
advantage of year-end finance pressures. We were able to put money into those
areas and get paid with attractive yields while doing it. During the later
portion of the fourth quarter, as maturities came due, we looked toward late
February, March and April 1997 to place cash. The Portfolio carefully avoids
putting much money into the first 45 days of the new year as we view this as an
area which, due to lack of supply and declining finance needs, generally
offers the least buying power. As of December 31, 1996, the Portfolio was in
line with its unmanaged benchmark, the 3-Month Treasury Bill.
Our approach as we enter 1997 will remain neutral. This stance will allow the
Portfolio to enhance investment opportunity anywhere along the short-term yield
curve as it presents itself. Such flexibility keeps us poised to take
advantage of any potential market volatility.
INVESTMENT OBJECTIVE
High level of current income, preserve its assets and maintain liquidity.
INVESTMENT POLICY
Primarily high-quality U.S. dollar denominated money market instruments.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ......................................... $466.6 MILLION
Number of Issues ............................................... 53
Average Maturity ...........................................67 DAYS
The Money Market Portfolio is neither guaranteed nor insured by the U.S.
Government. There can be no assurance that the Portfolio will be able to
maintain a stable net asset value.
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 3.3%
Bank Notes 3.2%
Variable Rate Securities 8.6%
Certificates of Deposit 19.5%
Commercial Paper 65.4%
DISTRIBUTION OF ASSETS BY MATURITY
[Pie Chart Data Below]
91+ days 24.2%
1-30 days 23.6%
31-60 days 30.0%
61-90 days 22.2%
A11
<PAGE>
THE FIXED INCOME SERIES
INTERMEDIATE GOVERMENT SECURITIES PORTFOLIO
PATRICIA J. YOUNG
Senior Vice President
Investment experience:
15 years
PAUL A. ULLMAN
Vice President
Investment experience:
14 years
The U.S. bond market rallied in the second half of 1996, pushing year-to-date
returns into positive territory for the first time since January. Data released
during the period eased investors concerns about accelerating economic growth
and interest rates on all maturities fell. However, continued concerns about
inflation kept bond market yields trading in a narrow range and held down price
gains. Returns in the Portfolio were positive for the year, helped by the
range-bound trading environment and increased demand for yield-oriented
securities. As of December 31, 1996, the Portfolio outperformed its unmanaged
benchmark, the Lehman Intermediate Government Bond Average.
Throughout most of the year, the mortgage-backed security market (MBS)
outperformed government bonds on both an absolute and duration-adjusted basis.
Since June 30, 1996, Portfolio allocations have remained relatively stable.
Expecting no sustained movement in interest rates, we increased the Portfolio's
yield-oriented position by exchanging lower coupon MBS for premium mortgages.
In response to strong performance during the period, we sold floating-rate
mortgages in favor of Treasury securities and 15 year MBS.
Our outlook for the U.S. economy assumes that, while economic growth
accelerated at the end of 1996, it will moderate again during the first half of
1997. As this occurs, current upward pressures on inflation should dissipate.
Until clear signs of a slowing economy emerge, concerns about inflation will
keep U.S. interest rates within their recent ranges. For the moment, the Fed is
on hold with a slightly restrictive basis. With the bond market trading in a
higher yield range, we expect mortgage pass-throughs to continue to outperform
the Government sector.
INVESTMENT OBJECTIVE
High current income consistent with relative stability of principal.
INVESTMENT POLICY Primarily debt securities issued or guaranteed as to
principal and interest by the U.S. Government or any of its agencies or
instrumentalities.
The Portfolio's investments will each have a final maturity of not more than
ten years or a duration not exceeding that of a ten-year Treasury note.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ..........................................$88.4 MILLION
Number of Issues ...............................................18
Average Quality* ............................................GOV'T
Average Duration** .................................. .. 3.1 YEARS
* Excludes net cash
** Includes net cash
The Intermediate Government Securities Portfolio is neither guaranteed nor
insured by the U.S. Government.
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
CMOs 0.5%
Short-Term & Cash 2.2%
Treasuries 52.5%
Agencies 16.0%
Mortgage-Backed Securities 28.8%
DISTRIBUTION OF ASSETS BY DURATION
[Pie Chart Data Below]
0-1 Year 3.5%
1-3 Years 39.5%
3-5 Years 57.0%
A12
<PAGE>
THE FIXED INCOME SERIES:
QUALITY BOND PORTFOLIO
MATTHEW BLOOM
Vice President
Investment experience:
15 years
1996 saw disappointing returns in the bond market, although returns improved in
the second half of the year. The economy continued to grow at a healthy rate
and inflation remained subdued.
The Quality Bond Portfolio outperformed its unmanaged benchmark, the Lehman
Brothers Aggregate Bond Index as of December 31, 1996. The Portfolio continued
to focus on opportunities available in the corporate bond market and the market
for mortgage pass-throughs. In the corporate bond market, the Yankee sector
(where issuers domiciled outside the United States issue dollar dominated
securities) offered particularly attractive investments.
We reduced the Portfolio's exposure to the mortgage market during the second
half of the year. As interest rates fall, the risk of a mortgage pass-through
being prepaid increases, making it less attractive.
Investments in non-U.S. government bond markets continued to enhance the
Portfolio's returns as many foreign markets outperformed the U.S. The Portfolio
regularly invested in European, and Canadian bonds, as well as Australia and
New Zealand's securities.
Looking forward into 1997, the U.S. bond market should be relatively more
attractive than in 1996. As long as inflation remains relatively subdued, and
growth remains on average near the Federal Reserve Board's perceived 2.5%
target, interest rates should remain broadly stable and bond market returns
should be a little higher in 1997 than in 1996.
INVESTMENT OBJECTIVE
High current income consistent with preservation of capital.
INVESTMENT POLICY
Primarily investment grade fixed income securities.
The portfolio reserves the right to invest in convertible debt securities,
preferred stocks and dividend-paying common stocks.
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets .................................... $155.0 MILLION
Number of Issues ........................................... 16
Average Quality* ........................................... AA
Average Duration** .................................. 4.8 YEARS
* Excluding net cash
**Including net cash
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 4.5%
Goverment Bonds 34.1%
U.S. Corporate Bonds 11.4%
Yankee Corporate Bonds 21.3%
Mortgage-Backed Securities 19.8%
Non-U.S. Gov't bonds 8.9%
DISTRIBUTION OF ASSETS BY DURATION
[Pie Chart Data Below]
0-1 Year 4.5%
2-4 Years 40.0%
4-7 Years 35.3%
7-10 Years 8.0%
Over 10 Years 12.2%
A-13
<PAGE>
THE FIXED INCOME SERIES:
HIGH YIELD PORTFOLIO
WAYNE TAPPE
Vice President
Investment experience
13 years
The high yield market generated stellar returns in 1996. High yield was one of
the best performing fixed-income asset classes. New issuance set new records in
1996. Overall spreads continued to narrow by approximately 125 basis points
fueled by both investors demand and an overall reach for yield.
The Portfolio had a strong 1996, substantially outperforming (by 1,183 basis
points) its unmanaged benchmark, the Merrill Lynch High Yield Index. This
outperformance was due to many factors, of which security selection was the
most important. Industry sector weightings such as energy, manufacturing and
consumer durables outperformed as well.
At mid-year, the Portfolio was repositioned to more of a single B profile
versus BB to capture a higher yield and coupon. With modest growth of 2-3%, low
inflation and relatively stable interest rates, this strategy should continue
to help postion the Portfolio quite well going forward. We will continue to
look for value in the marketplace by utilizing our extensive research group as
well as our market expertise.
INVESTMENT OBJECTIVE
High return by maximizing current income and, to the extent consistent with
that objective, capital appreciation.
INVESTMENT POLICY
Primarily a diversified mix of high yield, fixed income securities involving
greater volatility of price and risk of principal and income than high-quality
fixed income securities.
The medium and lower quality debt securities in which the Portfolio may invest
are known as "junk bonds".
PORTFOLIO SUMMARY, AS OF DECEMBER 31, 1996
Net Assets ....................................$200.0 MILLION
Number of Issues ......................................... 51
Average Quality* ......................................... B
Average Duration** ................................ 5.2 YEARS
* Excluding net cash
** Including net cash
ASSET MIX DISTRIBUTION
[Pie Chart Data Below]
Short-Term & Cash 6.6%
Corporate Bonds 92.2%
Foreign Bonds 1.2%
DISTRIBUTION OF ASSETS BY QUALITY
[Pie Chart Data Below]
CCC and below 6.3%
AAA-BBB 6.6%
BB-B 87.1%
A14
<PAGE>
HUDSON RIVER TRUST
NOTES ON PERFORMANCE
The chart on the next page shows the performance of The Hudson River Trust
Portfolios together with comparative benchmarks, including both unmanaged
market indices and universes of managed portfolios. The Portfolios' annualized
net rates of return are based on the percentage change in the net asset value
of Class IA shares with dividends and capital gains reinvested. Returns are net
of investment management fees and expenses of the Trust. Total returns for
Class IB shares will differ due to different expenses. These rates are not
representative of the actual return you would receive under a policy. No
policyowner can invest directly in the Trust. Changes in policy values depend
not only on the investment performance of the Trust, but also on the insurance
and administrative charges, applicable sales charges and the mortality and
expense risk charge applicable under a policy. These policy charges
effectively reduce the dollar amount of any net gains and increase the dollar
amount of any net losses. All performance shown is annualized, unless otherwise
noted.
THE BENCHMARKS
Market indices are not subject to any charges for investment advisory fees
typically associated with a managed portfolio. Comparisons with these
benchmarks, therefore, are of limited use. We include them because they are
widely known and may help you to understand the universe of securities from
which each Portfolio is likely to select its holdings.
PORTFOLIO INCEPTION DATES AND COMPARATIVE BENCHMARKS:
GROWTH & INCOME: October 1, 1993; 25% Value Line Convertibles Index and 75%
Standard & Poor's 500 Index (25% Value Line Conv./75% S&P 500).
EQUITY INDEX: March 1, 1994; S&P 500.
COMMON STOCK: January 13, 1976; S&P 500.
GLOBAL: August 27, 1987; Morgan Stanley Capital International World Index
(MSCI World).
INTERNATIONAL: April 3, 1995; Morgan Stanley International Europe, Australia,
Far East Index (MSCI EAFE).
AGGRESSIVE STOCK: January 27, 1986; 50% Russell 2000/50% S&P Mid Cap.
CONSERVATIVE INVESTORS: October 2, 1989; 70% Lehman Treasury Bond Composite
Index and 30% S&P 500 (70% Lehman Treas./30% S&P 500).
BALANCED: January 27, 1986; 50% Lehman Government/Corporate Bond Index and 50%
S&P 500 (50% Lehman Corp./50% S&P 500).
GROWTH INVESTORS: October 2, 1989; 30% Lehman Government/Corporate Bond Index
and 70% S&P 500 (30% Lehman Corp./70% S&P 500).
MONEY MARKET: July 13, 1981; Salomon Brothers Three-Month T-Bill Index
(3-Month T-Bill).
INTERMEDIATE GOVERNMENT SECURITIES: April 1, 1991; Lehman Intermediate
Government Bond Index (Lehman Intermediate Gov't).
QUALITY BOND: October 1, 1993; Lehman Aggregate Bond Index (Lehman Aggregate).
HIGH YIELD: January 2, 1987; Merrill Lynch High Yield Master Index (Merrill
Lynch High Yield).
The S&P 500 benchmark includes reinvested dividends. The Lipper Mutual Funds
Survey (LIPPER) records the performance of over 7000 mutual funds. According to
Lipper Analytical Services, Inc., the data are presented net of investment
management fees, direct operating expenses, and, for funds with Rule 12b-1
plans, asset-based sales charges. Lipper data provides a more accurate picture
of Trust performance relative to other funds than the market indices.
A15
<PAGE>
HUDSON RIVER TRUST
ANNUALIZED RATES OF RETURN FOR PERIODS ENDING DECEMBER 31, 1996
<TABLE>
<CAPTION>
ONE THREE FIVE TEN TWENTY SINCE
PORTFOLIO YEAR YEARS YEARS YEARS YEARS INCEPTION
THE EQUITY SERIES:
- ------------------
<S> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME 20.09% 14.00% -- -- -- 12.77%
Lipper Growth & Income 20.78 16.15 -- -- -- 15.71
25% Value Line Conv./75% S&P 500 21.28 17.93 -- -- -- 17.24
EQUITY INDEX 22.39 -- -- -- -- 20.25
Lipper S&P 500 Index Avg 22.30 -- -- -- -- 20.10
S&P 500 22.96 -- -- -- -- 20.90
COMMON STOCK 24.28 17.22 15.72% 15.83% 15.49% 15.22
Lipper Growth Equity 19.24 15.23 13.04 13.47 14.58 15.06
S&P 500 22.96 19.66 15.20 15.28 14.55 14.63
GLOBAL 14.60 12.74 13.50 -- -- 11.70
Lipper Global 16.51 9.61 11.36 -- -- 8.69
MSCI World 13.48 12.91 10.82 -- -- 7.44
INTERNATIONAL 9.82 -- -- -- -- 12.14
Lipper International 11.78 -- -- -- -- 13.12
MSCI EAFE 6.05 -- -- -- -- 8.74
AGGRESSIVE STOCK 22.20 15.66 11.83 18.60 -- 20.22
Lipper Small Company Growth 20.20 15.31 15.10 14.22 -- 13.46
50% Russell 2000/50% S&P Mid-Cap 17.85 14.14 14.80 14.29 -- 13.98
THE ASSET ALLOCATION SERIES:
- ----------------------------
CONSERVATIVE INVESTORS 5.21 6.70 7.32 -- -- 9.03
Lipper Flexible Portfolio 13.59 11.78 10.84 -- -- 10.68
70% Lehman Treas./30% S&P 500 8.78 10.14 9.64 -- -- 10.42
BALANCED 11.68 7.15 6.06 10.38 -- 12.05
Lipper Balanced 13.76 11.67 10.73 11.09 -- 11.65
50% Lehman Corp./50% S&P 500 12.93 13.15 11.47 12.30 -- 12.98
GROWTH INVESTORS 12.61 11.29 10.76 -- -- 15.57
Lipper Flexible Portfolio 13.59 11.78 10.84 -- -- 10.68
30% Lehman Corp./70% S&P 500 16.94 15.84 13.02 -- -- 12.73
THE FIXED INCOME SERIES:
- ------------------------
MONEY MARKET 5.33 5.03 4.31 5.90 -- 7.28
Lipper Money Market 4.80 4.63 3.96 5.52 -- 7.01
3-Month T-bill 5.25 5.07 4.37 5.67 -- 6.97
INTERMEDIATE GOV'T SECURITIES 3.78 3.99 5.60 -- -- 6.95
Lipper Intermediate Government 2.68 4.55 5.66 -- -- 6.96
Lehman Intermediate Government 4.06 5.37 6.23 -- -- 7.43
QUALITY BOND 5.36 5.38 -- -- -- 4.79
Lipper Corporate Debt A-Rated 2.49 5.11 -- -- -- 4.60
Lehman Aggregate 3.63 6.03 -- -- -- 5.57
HIGH YIELD 22.89 12.73 14.66 -- -- 11.41
Lipper High Yield 13.67 8.30 12.10 -- -- 9.38
Master High Yield 11.06 9.59 12.76 -- -- 11.24
</TABLE>
Each of the Trust's Portfolios has a different investment objective it seeks to
achieve by following a separate investment policy*. There is no guarantee that
these objectives will be attained. The objectives and policies of each
Portfolio will affect its return and its risks. Performance figures do not
reflect the cost of insurance and if they did the performance quoted would be
lower. Contract values may increase or decrease with investment experience, and
reflect certain contract charges and deductions. Keep in mind as you review
past performance that it is no estimate or indication of future results.
Neither the Money Market Portfolio nor the Intermediate Government Securities
Portfolio is guaranteed or insured by the U.S. Government.
* Not all Portfolios are available in all separate accounts
A16
<PAGE>
HUDSON RIVER TRUST
GROWTH OF A $10,000 INVESTMENT
The charts shown in these pages illustrate the total value of an assumed
investment in Class IA shares of each portfolio of the Hudson River Trust,
except the Money Market Portfolio. The periods illustrated are from the
inception dates shown for each portfolio through December 31, 1996 (for the
Common Stock, Aggressive Stock and Balanced Portfolios, for the ten years ended
December 31, 1996). The results assume the reinvestment of dividends and
capital gains. Results should not be considered representative of future gains
or losses.
The total value shown for the Hudson River Trust Portfolios reflects management
fees and operating expenses of the portfolio only. They have not been adjusted
for charges and expenses associated with life insurance policies or annuity
contracts. Rates of return on insurance policies and annuity contracts will be
lower because of the deduction of contract-related charges.
Information on these pages constitutes part of the annual report of The Hudson
River Trust and is not intended for separate use.
A table of rates of return for the Hudson River Trust Portfolios and their
comparative benchmarks, as well as additional information regarding the
benchmarks, can be found on the two previous pages of this report.
GROWTH OF A $10,000 INVESTMENT
AS OF DECEMBER 31,1996
GROWTH & INCOME PORTFOLIO
INVESTED ON OCTOBER 1, 1993 (Inception)
75% S&P 500/25% Lipper Growth &
HRT Growth & Income S&P 500 Value Line Conv. Income Average
10/1/93 $10,000 $10,000 $10,000 $10,000
12/31/93 $9,975 $10,231 $10,169 $10,233
12/31/94 $9,917 $10,370 $10,136 $10,167
12/31/95 $12,305 $14,253 $13,584 $13,317
12/31/96 $14,777 $17,517 $16,620 $16,052
EQUITY INDEX PORTFOLIO
INVESTED ON MARCH 1, 1994 (Inception)
Lipper S&P 500
HRT Equity Index S&P 500 Average
3/1/94 $10,000 $10,000 $10,000
12/31/94 $10,108 $10,121 $10,040
12/31/95 $13,796 $13,911 $13,736
12/31/96 $16,884 $17,096 $16,825
A17
<PAGE>
HUDSON RIVER TRUST
GROWTH OF A $10,000 INVESTMENT
AS OF DECEMBER 31, 1996
COMMON STOCK PORTFOLIO
INVESTED ON JANUARY 1, 1987 (Ten Years Ago)
Lipper Growth
HRT Common Stock S&P 500 Average
12/31/86 $10,000 $10,000 $10,000
12/31/87 $10,748 $10,518 $10,276
12/31/88 $13,160 $12,253 $11,758
12/31/89 $16,528 $16,124 $14,970
12/31/90 $15,188 $15,622 $14,260
12/31/91 $20,943 $20,360 $19,684
12/31/92 $21,615 $21,909 $21,286
12/31/93 $26,984 $24,108 $23,792
12/31/94 $26,406 $24,435 $23,255
12/31/95 $34,975 $33,585 $30,728
12/31/96 $43,466 $41,276 $36,683
GLOBAL PORTFOLIO
INVESTED ON AUGUST 27, 1987 (Inception)
Lipper Global
HRT Global MSCI World Mutual Fund Avg
8/27/87 $10,000 $10,000 $10,000
12/31/87 $8,673 $10,248 $10,807
12/31/88 $9,617 $12,420 $11,556
12/31/89 $12,189 $14,251 $12,232
12/31/90 $11,448 $11,593 $13,832
12/31/91 $14,939 $13,448 $15,702
12/31/92 $14,867 $12,487 $15,996
12/31/93 $19,639 $15,034 $18,230
12/31/94 $20,666 $15,538 $17,124
12/31/95 $24,555 $18,444 $19,872
12/31/96 $28,139 $20,607 $21,243
INTERNATIONAL PORTFOLIO
INVESTED ON APRIL 3, 1995 (Inception)
HRT International MSCI EAFE Lipper Intl Average
4/3/95 $10,000 $10,000 $10,000
12/31/95 $11,129 $10,943 $11,122
12/31/96 $12,221 $11,639 $12,430
A18
<PAGE>
HUDSON RIVER TRUST
GROWTH OF A $10,000 INVESTMENT
AS OF DECEMBER 31, 1996
AGGRESSIVE STOCK PORTFOLIO
INVESTED ON JANUARY 1, 1987 (Ten Years Ago)
<TABLE>
<CAPTION>
50% S&P Midcap Lipper Small
HRT Aggressive S&P 400 Midcap Russell 2000 50% Russell 2000 Co Growth Avg
<S> <C> <C> <C> <C> <C>
1/1/87 $10,000 $10,000 $10,000 $10,000 $10,000
12/31/87 $10,730 $9,790 $9,120 $9,465 $9,591
12/31/88 $10,852 $11,822 $11,402 $11,636 $11,493
12/31/89 $15,572 $16,014 $13,256 $14,618 $14,284
12/31/90 $16,844 $15,186 $10,674 $12,793 $12,670
12/31/91 $31,476 $22,776 $15,589 $18,959 $19,320
12/31/92 $30,477 $25,485 $18,458 $21,850 $21,653
12/31/93 $35,588 $29,026 $21,943 $25,436 $25,420
12/31/94 $34,229 $27,994 $21,543 $24,748 $25,350
12/31/95 $45,058 $36,633 $27,672 $32,099 $33,807
12/31/96 $55,062 $43,648 $32,237 $37,831 $38,788
</TABLE>
CONSERVATIVE INVESTORS PORTFOLIO
INVESTED ON OCTOBER 2, 1989 (Inception)
<TABLE>
<CAPTION>
HRT Conservative 70% Lehman Treas./ Lipper Flexible
Investors Lehman Treasury 30% S&P 500 Portfolio Average
<S> <C> <C> <C> <C>
10/2/89 $10,000 $10,000 $10,000 $10,000
12/31/89 $10,309 $10,380 $10,314 $10,059
12/31/90 $10,969 $11,266 $10,815 $9,982
12/31/91 $13,144 $12,989 $12,987 $12,546
12/31/92 $13,905 $13,926 $13,973 $13,542
12/31/93 $15,402 $15,414 $15,474 $15,215
12/31/94 $14,771 $14,892 $15,154 $15,022
12/31/95 $17,785 $17,625 $18,928 $18,689
12/31/96 $18,712 $18,101 $20,771 $21,360
</TABLE>
BALANCED PORTFOLIO
INVESTED ON JANUARY 1, 1987 (Ten Years Ago)
<TABLE>
<CAPTION>
50% Lehman GC Lehman Lipper Balanced
HRT Balanced S&P 500 50% S&P 500 Govt/Corp B Average
<S> <C> <C> <C> <C> <C>
12/31/86 $10,000 $10,000 $10,000 $10,000 $10,000
12/31/87 $9,914 $10,518 $10,377 $10,229 $10,204
12/31/88 $11,230 $12,253 $11,636 $11,004 $11,434
12/31/89 $14,131 $16,124 $14,360 $12,571 $13,627
12/31/90 $14,165 $15,622 $14,629 $13,612 $13,602
12/31/91 $20,009 $20,360 $18,105 $15,807 $16,998
12/31/92 $19,447 $21,909 $19,481 $17,006 $18,344
12/31/93 $21,835 $24,108 $21,523 $18,882 $20,558
12/31/94 $20,083 $24,435 $21,350 $18,219 $20,074
12/31/95 $24,050 $33,585 $27,697 $21,725 $25,333
12/31/96 $26,859 $41,276 $31,875 $22,356 $28,845
</TABLE>
A19
<PAGE>
HUDSON RIVER TRUST
GROWTH OF A $10,000 INVESTMENT
AS OF DECEMBER 31, 1996
GROWTH INVESTORS PORTFOLIO
INVESTED ON OCTOBER 2, 1989 (Inception)
HRT Growth 70% S&P 500/ Lipper Flexible
Investors S&P 500 30% Lehman Trea. Portfolio Average
10/2/89 $10,000 $10,000 $10,000 $10,000
12/31/89 $10,399 $10,204 $10,252 $10,059
12/31/90 $11,503 $9,886 $10,283 $9,982
12/31/91 $17,129 $12,885 $12,934 $12,546
12/31/92 $17,974 $13,865 $13,917 $13,542
12/31/93 $20,717 $15,256 $15,357 $15,215
12/31/94 $20,066 $15,463 $15,336 $15,022
12/31/95 $25,357 $21,254 $20,277 $18,689
12/31/96 $28,555 $26,121 $23,865 $21,360
INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
INVESTED ON APRIL 1, 1991 (Inception)
HRT Intermediate Lehman Intermediate Lipper Intermediate
Govt Securities Govt Bond Govt Funds Average
4/1/91 $10,000 $10,000 $10,000
12/31/91 $11,207 $11,165 $11,193
12/31/92 $11,835 $11,938 $11,871
12/31/93 $13,087 $12,913 $12,834
12/31/94 $12,514 $12,688 $12,365
12/31/95 $14,182 $14,517 $14,326
12/31/96 $14,718 $15,106 $14,755
QUALITY BOND PORTFOLIO
INVESTED ON OCTOBER 1, 1993 (Inception)
Lehman Aggregate Lipper Corporate
HRT Quality Bond Bond Debt A rated
10/1/93 $10,000 $10,000 $10,000
12/31/93 $9,949 $10,005 $9,963
12/31/94 $9,442 $9,714 $9,494
12/31/95 $11,050 $11,508 $11,287
12/31/96 $11,642 $11,926 $11,574
A20
<PAGE>
HUDSON RIVER TRUST
GROWTH OF A $10,000 INVESTMENT
AS OF DECEMBER 31, 1996
HIGH YIELD PORTFOLIO
INVESTED ON JANUARY 2, 1987 (inception)
Merrill Lynch Lipper High Current
HRT High Yield Master High Yield Yield Average
1/2/87 $10,000 $10,000 $10,000
12/31/87 $10,468 $10,466 $10,206
12/31/88 $11,488 $11,876 $11,521
12/31/89 $12,078 $12,379 $11,379
12/31/90 $11,944 $11,841 $10,177
12/31/91 $14,868 $15,935 $13,874
12/31/92 $16,698 $18,829 $16,311
12/31/93 $20,564 $22,064 $19,368
12/31/94 $19,993 $21,807 $18,666
12/31/95 $23,975 $26,150 $21,825
12/31/96 $29,462 $29,043 $24,699
A-21
<PAGE>
THE HUDSON RIVER TRUST
......................
PART B: FINANCIAL STATEMENTS
DECEMBER 31, 1996
<PAGE>
This page intentionally left blank
<PAGE>
SECTION B
THE HUDSON RIVER TRUST
FINANCIAL STATEMENTS
DECEMBER 31, 1996
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments at value (Notes 1 and 4) .................... $450,990,752 $ 92,621,366 $153,282,787 $197,549,284 $ 231,763,058
Cash .................................................... 171,525 124,732 176,934 2,017,705 125,387
Foreign cash ............................................ -- -- -- -- --
Receivable for securities sold .......................... -- -- 5,071,875 -- 461,289
Deposits received for securities lending ................ -- 18,301,550 28,167,188 -- 2,000,000
Receivable from Separate Accounts for Trust shares sold 14,190,878 817,649 64,327 1,043,413 229,252
Unrealized appreciation of forward currency
contracts (Notes 1 and 4) .............................. -- -- 147,593 -- --
Dividends, interest and other receivables ............... 1,458,902 822,759 1,476,344 3,556,124 754,268
-------------- ------------ ------------ ------------ -------------
Total assets .......................................... 466,812,057 112,688,056 188,387,048 204,166,526 235,333,254
-------------- ------------ ------------ ------------ -------------
LIABILITIES:
Options written at value (Premiums received:
Common Stock Portfolio--$68,607,800) (Notes 1 and 4) .. -- -- -- -- --
Payable to custodian .................................... -- -- -- -- --
Payable for securities purchased ........................ -- 5,942,099 5,081,250 3,997,946 1,117,681
Payable for securities loaned ........................... -- 18,301,550 28,167,188 -- 2,000,000
Payable to Separate Accounts for Trust shares redeemed . -- -- -- -- --
Unrealized depreciation of forward currency
contracts (Notes 1 and 4) .............................. -- -- -- -- --
Variation margin payable on futures contracts .......... -- -- -- -- --
Distribution fees payable ............................... 254 -- -- 58 --
Investment advisory fees payable ........................ 144,177 38,264 85,952 94,624 108,563
Trustees' fees payable .................................. 24,024 5,014 4,226 5,132 2,919
Accrued expenses ........................................ 37,408 16,704 24,960 23,301 23,703
-------------- ------------ ------------ ------------ -------------
Total liabilities ..................................... 205,863 24,303,631 33,363,576 4,121,061 3,252,866
-------------- ------------ ------------ ------------ -------------
NET ASSETS .............................................. $466,606,194 $ 88,384,425 $155,023,472 $200,045,465 $ 232,080,388
============== ============ ============ ============ =============
Investments at cost ..................................... $450,833,231 $ 92,000,197 $151,005,932 $192,006,772 $ 204,211,023
============== ============ ============ ============ =============
COMPONENTS OF NET ASSETS (NOTE 1):
Paid in capital ........................................ $466,405,482 $ 97,591,462 $157,812,746 $195,004,416 $ 204,516,556
Accumulated undistributed (overdistributed) net
investment income ..................................... 43,191 3,160 (220,079) 23,927 11,797
Accumulated net realized loss .......................... -- (9,831,366) (4,993,810) (525,390) --
Unrealized appreciation on investments and
foreign currency denominated assets and liabilities .. 157,521 621,169 2,424,615 5,542,512 27,552,035
-------------- ------------ ------------ ------------ -------------
NET ASSETS .............................................. $466,606,194 $ 88,384,425 $155,023,472 $200,045,465 $ 232,080,388
============== ============ ============ ============ =============
CLASS IA SHARES:
Net Assets .............................................. $463,422,535 $ 88,384,425 $155,023,472 $199,360,473 $ 232,080,388
============== ============ ============ ============ =============
Shares outstanding (Note 5) ............................. 45,575,983 9,517,076 16,343,116 19,900,343 17,833,887
============== ============ ============ ============ =============
Net asset value, offering and redemption
price per share (Note 1) ............................... $ 10.17 $ 9.29 $ 9.49 $ 10.02 $ 13.01
============== ============ ============ ============ =============
CLASS IB SHARES:
Net Assets .............................................. $ 3,183,659 $ 684,992
============== ============
Shares outstanding (Note 5) ............................. 313,273 68,416
============== ============
Net asset value, offering and redemption
price per share (Note 1) ............................... $ 10.16 $ 10.01
============== ============
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------------- --------------- ---------------
$ 383,044,256 $ 6,668,952,271 $ 991,831,989 $ 149,318,779
188,834 1,501,081 456,313 --
-- -- 2,258,618 1,672,592
-- 65,341,050 3,867,161 613,862
1,356,953 105,377,860 72,320,750 12,820,136
2,643,610 9,646,997 1,281,713 1,519,154
-- -- 2,063,841 252,876
701,269 8,133,115 1,216,101 205,847
- --------------- --------------- --------------- ---------------
387,934,922 6,858,952,374 1,075,296,486 166,403,246
- --------------- --------------- --------------- ---------------
-- 70,867,650 -- --
-- -- -- 534,429
-- 53,373,896 4,987,613 971,883
1,356,953 105,377,860 72,320,750 12,820,136
-- -- -- --
-- -- -- --
152,250 -- -- --
-- 134 49 --
127,671 2,040,224 452,415 115,412
5,276 205,484 19,851 1,520
43,591 453,547 184,324 53,031
- --------------- --------------- --------------- ---------------
1,685,741 232,318,795 77,965,002 14,496,411
- --------------- --------------- --------------- ---------------
$ 386,249,181 $ 6,626,633,579 $ 997,331,484 $ 151,906,835
=============== =============== =============== ===============
$ 320,617,584 $ 5,041,593,068 $ 858,568,339 $ 144,374,839
=============== =============== =============== ===============
$ 324,019,332 $ 5,094,665,983 $ 865,441,879 $ 147,381,465
(5,276) (194,316) (3,212,284) (614,431)
(22,547) (92,937,401) (258,562) (50,107)
62,257,672 1,625,099,313 135,360,451 5,189,908
- --------------- --------------- --------------- ---------------
$ 386,249,181 $ 6,626,633,579 $ 997,331,484 $ 151,906,835
=============== =============== =============== ===============
$ 386,249,181 $ 6,625,390,070 $ 997,041,626 $ 151,906,835
=============== =============== =============== ===============
25,484,413 363,529,982 58,938,705 13,214,071
=============== =============== =============== ===============
$ 15.16 $ 18.23 $ 16.92 $ 11.50
=============== =============== =============== ===============
$ 1,243,509 $ 289,858
============== ===============
68,266 17,143
============== ===============
$ 18.22 $ 16.91
============== ===============
<PAGE>
[restubbed]
AGGRESSIVE CONSERVATIVE GROWTH
STOCK INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- --------------- --------------- --------------- ---------------
$ 3,890,482,751 $ 275,640,496 $ 1,627,121,599 $ 1,290,840,729
2,364,412 5,139,961 4,172,088 480,215
-- -- 465 1,008,532
2,337,046 156,273 2,937,003 3,246,261
200,344,604 24,170,813 138,838,707 90,833,147
-- -- 768,754 3,693,911
-- 89 -- 511,818
350,639 2,100,127 9,549,968 5,129,713
- --------------- --------------- --------------- ---------------
4,095,879,452 307,207,759 1,783,388,584 1,395,744,326
- --------------- --------------- --------------- ---------------
-- -- -- --
-- 8,074 -- --
21,101,356 182,066 5,921,615 2,011,774
200,344,604 24,170,813 138,838,707 90,833,147
6,662,427 250,025 -- --
-- -- 58 --
-- -- -- --
63 -- -- 78
1,530,928 136,367 525,339 588,404
93,747 7,170 61,689 25,366
276,910 50,843 185,672 170,574
- --------------- --------------- --------------- ---------------
230,010,035 24,805,358 145,533,080 93,629,343
- --------------- --------------- --------------- ---------------
$ 3,865,869,417 $ 282,402,401 $ 1,637,855,504 $ 1,302,114,983
=============== =============== =============== ===============
$ 3,396,898,743 $ 265,933,643 $ 1,509,715,325 $ 1,193,558,142
=============== =============== =============== ===============
$ 3,377,717,888 $ 273,073,244 $ 1,523,732,949 $ 1,207,265,289
(58,479) 9,815 (190,700) (1,135,946)
(5,374,000) (387,954) (3,096,172) (1,817,216)
493,584,008 9,707,296 117,409,427 97,802,856
- --------------- --------------- --------------- ---------------
$ 3,865,869,417 $ 282,402,401 $ 1,637,855,504 $ 1,302,114,983
=============== =============== =============== ===============
$ 3,865,256,884 $ 282,402,401 $ 1,637,855,504 $ 1,301,642,871
=============== =============== =============== ===============
107,805,909 25,019,109 98,455,586 75,693,420
=============== =============== =============== ===============
$ 35.85 $ 11.29 $ 16.64 $ 17.20
=============== =============== =============== ===============
$ 612,533 $ 472,112
=============== ===============
17,094 27,468
=============== ===============
$ 35.83 $ 17.19
=============== ===============
2
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF OPERATIONS
Year Ended December 31, 1996
<TABLE>
<CAPTION>
INTERMEDIATE
GOVERNMENT GROWTH AND
MONEY MARKET SECURITIES QUALITY BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Income*(Note 1):
Dividends (including $3,460,799 and
$3,411,934 from affiliated companies
for the Common Stock and Aggressive
Stock Portfolios, respectively) ....... $ -- $ -- $ -- $ 175,797 $ 3,034,669
Interest ................................ 20,638,163 5,024,881 11,293,429 16,214,440 933,842
-------------- -------------- -------------- ------------- ------------
Total income ........................... 20,638,163 5,024,881 11,293,429 16,390,237 3,968,511
-------------- -------------- -------------- ------------- ------------
Expenses (Notes 1, 2 and 3):
Investment advisory fee ................. 1,472,114 399,460 935,462 856,390 864,549
Custody fees ............................ 13,550 21,460 26,840 23,922 15,532
Distribution fees--Class IB ............. 254 -- -- 58 --
Printing and mailing expenses ........... 57,975 12,134 26,374 21,783 19,986
Professional fees ....................... 14,254 9,190 9,007 8,368 8,214
SEC registration fees ................... 4,987 217 434 217 1,084
Trustees' fees .......................... 12,178 3,159 5,643 4,849 4,554
Miscellaneous ........................... 6,858 3,678 3,801 3,069 2,594
-------------- -------------- -------------- ------------- ------------
Total expenses ......................... 1,582,170 449,298 1,007,561 918,656 916,513
-------------- -------------- -------------- ------------- ------------
NET INVESTMENT INCOME ..................... 19,055,993 4,575,583 10,285,868 15,471,581 3,051,998
-------------- -------------- -------------- ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
(NOTES 1 AND 4):
Realized Gain (Loss):
On securities (including $2,796,965,
$(8,821,017) and $60,876 from
affiliated companies for the Common
Stock, Aggressive Stock and Global
Portfolios, respectively) .............. -- (453,637) 939,845 12,420,138 12,181,263
On options written ...................... -- -- -- -- --
On foreign currency transactions ....... -- -- (68,186) -- --
On futures contracts .................... -- -- -- -- --
-------------- -------------- -------------- ------------- ------------
Realized gain (loss)--net ................ -- (453,637) 871,659 12,420,138 12,181,263
-------------- -------------- -------------- ------------- ------------
Change in Unrealized
Appreciation/Depreciation:
On securities ........................... (7,886) (1,025,808) (1,868,060) 3,447,403 16,443,384
On options written ...................... -- -- -- -- --
On foreign currency transactions ....... -- -- 118,525 -- --
On futures contracts .................... -- -- -- -- --
-------------- -------------- -------------- ------------- ------------
Unrealized appreciation/depreciation--net (7,886) (1,025,808) (1,749,535) 3,447,403 16,443,384
-------------- -------------- -------------- ------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)--NET . (7,886) (1,479,445) (877,876) 15,867,541 28,624,647
-------------- -------------- -------------- ------------- ------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $19,048,107 $ 3,096,138 $ 9,407,992 $31,339,122 $31,676,645
============== ============== ============== ============= ============
</TABLE>
- ------------
* Net of foreign taxes withheld on dividends of $3,042, $32,886, $357,439,
$1,103,645, $180,624, $53,371, $457,582 and $359,641 for the Growth and
Income, Equity Index, Common Stock, Global, International, Conservative
Investors, Balanced and Growth Investors Portfolios, respectively, and on
interest of $103 and $95 for the Global and Growth Investors Portfolios,
respectively.
See Notes to Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
AGGRESSIVE CONSERVATIVE GROWTH
EQUITY INDEX COMMON STOCK GLOBAL INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6,341,057 $ 64,326,955 $ 10,411,663 $1,229,599 $ 7,463,840 $ 1,138,588 $ 10,683,609 $ 9,229,448
462,343 6,192,091 5,565,223 877,635 16,908,426 12,897,917 45,681,532 22,850,498
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
6,803,400 70,519,046 15,976,886 2,107,234 24,372,266 14,036,505 56,365,141 32,079,946
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
1,034,043 20,314,128 4,491,125 875,316 15,504,789 1,517,920 5,820,114 5,816,056
51,343 136,065 447,082 137,463 62,332 90,112 296,359 313,381
-- 134 49 -- 63 -- -- 78
36,406 843,481 122,011 11,232 491,450 41,649 251,544 157,430
11,364 149,352 25,827 6,667 90,030 11,695 46,552 32,235
1,951 -- 5,637 -- -- 434 -- 6,721
8,755 185,691 26,046 2,830 108,798 8,948 54,329 34,735
3,192 78,424 9,756 1,652 39,802 4,952 24,921 13,196
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
1,147,054 21,707,275 5,127,533 1,035,160 16,297,264 1,675,710 6,493,819 6,373,832
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
5,656,346 48,811,771 10,849,353 1,072,074 8,075,002 12,360,795 49,871,322 25,706,114
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
13,813,315 517,703,619 42,673,209 2,763,980 651,849,153 6,717,096 128,577,417 130,296,769
-- 69,528,454 -- -- -- -- -- --
-- (23,974) 2,323,828 287,769 (2,878) (27,275) (184,947) 903,574
1,381,635 -- -- -- -- -- -- --
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
15,194,950 587,208,099 44,997,037 3,051,749 651,846,275 6,689,821 128,392,470 131,200,343
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
41,401,218 651,940,355 57,875,656 4,019,520 (19,577,800) (4,721,625) (3,423,214) (21,124,616)
-- (15,633,132) -- -- -- -- -- --
-- (216) 2,507,509 225,883 -- 443 3,153 575,473
(172,800) -- -- -- -- -- -- --
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
41,228,418 636,307,007 60,383,165 4,245,403 (19,577,800) (4,721,182) (3,420,061) (20,549,143)
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
56,423,368 1,223,515,106 105,380,202 7,297,152 632,268,475 1,968,639 124,972,409 110,651,200
- -------------- -------------- -------------- --------------- -------------- -------------- -------------- --------------
$62,079,714 $1,272,326,877 $116,229,555 $8,369,226 $640,343,477 $14,329,434 $174,843,731 $136,357,314
============== ============== ============== =============== ============== ============== ============== ==============
</TABLE>
4
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INTERMEDIATE GOVERNMENT
MONEY MARKET PORTFOLIO SECURITIES PORTFOLIO
-------------------------------- ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
--------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 19,055,993 $ 18,312,330 $ 4,575,583 $ 3,659,738
Realized gain (loss)--net .......................... -- -- (453,637) 1,061,357
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net ....................... (7,886) 145,252 (1,025,808) 2,579,005
--------------- --------------- -------------- --------------
Net increase in net assets from operations ........ 19,048,107 18,457,582 3,096,138 7,300,100
--------------- --------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
(NOTE 1):
Class IA:
Dividends from net investment income .............. (19,050,946) (18,199,892) (4,575,583) (3,633,574)
Dividends in excess of net investment income ..... (25,232) -- (19,617) --
Distributions from realized gains ................. -- -- -- --
Distributions in excess of realized gains ........ -- -- -- --
Tax return of capital distributions ............... -- -- -- --
--------------- --------------- -------------- --------------
Total Class IA dividends and distributions ........ (19,076,178) (18,199,892) (4,595,200) (3,633,574)
--------------- --------------- -------------- --------------
Class IB:
Dividends from net investment income .............. (5,047) -- -- --
Dividends in excess of net investment income ..... (29,384) -- -- --
Distributions from realized gains ................. -- -- -- --
Distributions in excess of realized gains ........ -- -- -- --
--------------- --------------- -------------- --------------
Total Class IB dividends and distributions ........ (34,431) -- -- --
--------------- --------------- -------------- --------------
Decrease in net assets from dividends and
distributions ..................................... (19,110,609) (18,199,892) (4,595,200) (3,633,574)
--------------- --------------- -------------- --------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold ....................................... 508,537,942 394,575,427 36,879,548 29,533,754
Shares issued in reinvestment of dividends and
distributions .................................... 19,076,178 18,199,892 4,595,200 3,633,574
Shares redeemed ................................... (450,848,823) (351,733,059) (23,371,086) (13,571,893)
--------------- --------------- -------------- --------------
Total Class IA transactions ........................ 76,765,297 61,042,260 18,103,662 19,595,435
--------------- --------------- -------------- --------------
Class IB:
Shares sold ....................................... 3,624,653 -- -- --
Shares issued in reinvestment of dividends and
distributions .................................... 34,431 -- -- --
Shares redeemed ................................... (446,631) -- -- --
--------------- --------------- -------------- --------------
Total Class IB transactions ........................ 3,212,453 -- -- --
--------------- --------------- -------------- --------------
Net increase (decrease) in net assets derived from
share transactions ................................ 79,977,750 61,042,260 18,103,662 19,595,435
--------------- --------------- -------------- --------------
INCREASE (DECREASE) IN NET ASSETS ................... 79,915,248 61,299,950 16,604,600 23,261,961
NET ASSETS, BEGINNING OF PERIOD ..................... 386,690,946 325,390,996 71,779,825 48,517,864
--------------- --------------- -------------- --------------
NET ASSETS, END OF PERIOD* .......................... $ 466,606,194 $ 386,690,946 $ 88,384,425 $ 71,779,825
=============== =============== ============== ==============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment income
of $43,191 and $97,807 for the Money Market Portfolio; $3,160 and $22,777
for the Intermediate Government Securities Portfolio; $(220,079) and
$63,771 for the Quality Bond Portfolio; $23,927 and $22,557 for the High
Yield Portfolio; $11,797 and $10,278 for the Growth and Income Portfolio;
$(5,276) and $(851) for the Equity Index Portfolio, as of December 31, 1996
and December 31, 1995, respectively.
See Notes to Financial Statements.
5
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME
QUALITY BOND PORTFOLIO HIGH YIELD PORTFOLIO PORTFOLIO EQUITY INDEX PORTFOLIO
- ------------------------------ ------------------------------ ----------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995 1996 1995
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 10,285,868 $ 8,846,857 $ 15,471,581 $ 9,874,042 $ 3,051,998 $ 1,929,904 $ 5,656,346 $ 1,847,863
871,659 3,312,031 12,420,138 1,037,899 12,181,263 (78,675) 15,194,950 1,143,375
(1,749,535) 10,351,408 3,447,403 6,108,056 16,443,384 11,348,703 41,228,418 21,464,214
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
9,407,992 22,510,296 31,339,122 17,019,997 31,676,645 13,199,932 62,079,714 24,455,452
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(10,285,868) (8,729,254) (15,469,541) (9,874,042) (3,050,479) (1,919,557) (5,656,346) (1,841,475)
(326,079) -- (432,568) (385,462) -- -- (4,427) --
-- -- (11,348,200) -- (11,682,352) -- (15,093,505) (1,143,375)
-- -- -- -- -- -- -- (84,099)
-- -- -- -- -- -- (7,525) (123)
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(10,611,947) (8,729,254) (27,250,309) (10,259,504) (14,732,831) (1,919,557) (20,761,803) (3,069,072)
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
-- -- (2,040) -- -- -- -- --
-- -- (15,935) -- -- -- -- --
-- -- (908) -- -- -- -- --
-- -- (18,516) -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
-- -- (37,399) -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(10,611,947) (8,729,254) (27,287,708) (10,259,504) (14,732,831) (1,919,557) (20,761,803) (3,069,072)
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
27,205,153 18,946,820 71,897,677 46,607,272 111,512,120 57,426,026 230,679,439 153,767,030
10,611,947 8,729,254 27,250,309 10,259,504 14,732,831 1,919,557 20,761,803 3,069,072
(39,032,520) (11,589,738) (21,997,075) (19,393,315) (9,161,198) (4,095,508) (72,295,253) (49,185,409)
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(1,215,420) 16,086,336 77,150,911 37,473,461 117,083,753 55,250,075 179,145,989 107,650,693
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
-- -- 677,158 -- -- -- -- --
-- -- 37,399 -- -- -- -- --
-- -- -- -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
-- -- 714,557 -- -- -- -- --
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(1,215,420) 16,086,336 77,865,468 37,473,461 117,083,753 55,250,075 179,145,989 107,650,693
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
(2,419,375) 29,867,378 81,916,882 44,233,954 134,027,567 66,530,450 220,463,900 129,037,073
157,442,847 127,575,469 118,128,583 73,894,629 98,052,821 31,522,371 165,785,281 36,748,208
- -------------- -------------- -------------- -------------- -------------- ------------- -------------- --------------
$155,023,472 $157,442,847 $200,045,465 $118,128,583 $232,080,388 $98,052,821 $386,249,181 $165,785,281
============== ============== ============== ============== ============== ============= ============== ==============
</TABLE>
6
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS (Continued)
<TABLE>
<CAPTION>
COMMON STOCK PORTFOLIO GLOBAL PORTFOLIO
------------------------------ ------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 48,811,771 $ 53,432,936 $ 10,849,353 $ 9,803,075
Realized gain--net ................................. 587,208,099 262,461,526 44,997,037 17,804,800
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net ....................... 636,307,007 845,152,888 60,383,165 72,106,049
-------------- -------------- -------------- --------------
Net increase in net assets from operations ........ 1,272,326,877 1,161,047,350 116,229,555 99,713,924
-------------- -------------- -------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
(NOTE 1):
Class IA:
Dividends from net investment income .............. (44,580,327) (53,432,936) (10,849,259) (9,500,310)
Dividends in excess of net investment income ..... -- (6,567,658) (4,499,020) --
Distributions from realized gains ................. (587,198,121) (262,461,526) (42,474,239) (17,804,800)
Distributions in excess of realized gains ........ (71,434,343) (8,497,379) -- (1,081,237)
Tax return of capital distributions ............... (988,016) -- (220,411) (546,316)
-------------- -------------- -------------- --------------
Total Class IA dividends and distributions ........ (704,200,807) (330,959,499) (58,042,929) (28,932,663)
-------------- -------------- -------------- --------------
Class IB:
Dividends from net investment income .............. (326) -- (94) --
Dividends in excess of net investment income ..... (4,564) -- (2,076) --
Distributions from realized gains ................. (9,978) -- (1,502) --
Distributions in excess of realized gains ........ (62,273) -- (4,502) --
Tax return of capital distributions ............... (108) -- (31) --
-------------- -------------- -------------- --------------
Total Class IB dividends and distributions ........ (77,249) -- (8,205) --
-------------- -------------- -------------- --------------
Decrease in net assets from dividends and
distributions ..................................... (704,278,056) (330,959,499) (58,051,134) (28,932,663)
-------------- -------------- -------------- --------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold ....................................... 756,034,799 509,750,491 255,537,439 229,097,991
Shares issued in reinvestment of dividends and
distributions .................................... 704,200,807 330,959,499 58,042,929 28,932,663
Shares redeemed ................................... (282,642,349) (257,365,702) (60,861,388) (64,369,805)
-------------- -------------- -------------- --------------
Total Class IA transactions ........................ 1,177,593,257 583,344,288 252,718,980 193,660,849
-------------- -------------- -------------- --------------
Class IB:
Shares sold ....................................... 1,237,252 -- 285,485 --
Shares issued in reinvestment of dividends and
distributions .................................... 77,249 -- 8,205 --
Shares redeemed ................................... -- -- -- --
-------------- -------------- -------------- --------------
Total Class IB transactions ........................ 1,314,501 -- 293,690 --
-------------- -------------- -------------- --------------
Net increase in net assets derived from share
transactions ...................................... 1,178,907,758 583,344,288 253,012,670 193,660,849
-------------- -------------- -------------- --------------
INCREASE IN NET ASSETS .............................. 1,746,956,579 1,413,432,139 311,191,091 264,442,110
NET ASSETS, BEGINNING OF PERIOD ..................... 4,879,677,000 3,466,244,861 686,140,393 421,698,283
-------------- -------------- -------------- --------------
NET ASSETS, END OF PERIOD* .......................... $6,626,633,579 $4,879,677,000 $997,331,484 $686,140,393
============== ============== ============== ==============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment income
of $(194,316) and $8,246,095 for the Common Stock Portfolio; $(3,212,284)
and $455,586 for the Global Portfolio; $(614,431) and $6,487 for the
International Portfolio; $(58,479) and $(4,129) for the Aggressive Stock
Portfolio; $9,815 and $63,026 for the Conservative Investors Portfolio;
$(190,700) and $86,599 for the Balanced Portfolio, as of December 31, 1996
and December 31, 1995, respectively.
** Commencement of Operations.
See Notes to Financial Statements.
7
<PAGE>
<TABLE>
<CAPTION>
CONSERVATIVE INVESTORS
INTERNATIONAL PORTFOLIO AGGRESSIVE STOCK PORTFOLIO PORTFOLIO BALANCED PORTFOLIO
- ------------------------------- ------------------------------- ----------------------------- -------------------------------
APRIL 3, 1995**
YEAR ENDED TO YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995 1996 1995
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 1,072,074 $ 142,455 $ 8,075,002 $ 6,203,510 $ 12,360,795 $ 11,574,771 $ 49,871,322 $ 47,303,460
3,051,749 266,775 651,846,275 346,368,084 6,689,821 11,270,671 128,392,470 64,616,058
4,245,403 944,505 (19,577,800) 262,696,319 (4,721,182) 16,138,395 (3,420,061) 144,740,180
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
8,369,226 1,353,735 640,343,477 615,267,913 14,329,434 38,983,837 174,843,731 256,659,698
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
(1,072,074) (142,455) (8,075,028) (6,203,510) (12,360,795) (11,510,223) (49,871,322) (47,099,230)
(972,982) (240,038) (50,994) (43,012) (44,557) -- (241,952) --
(2,651,391) (118,651) (651,842,635) (300,293,392) (6,689,821) (1,556,393) (128,392,470) (41,562,533)
-- -- (1,362,771) -- (396,608) -- (2,491,886) --
-- -- -- -- -- -- -- --
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
(4,696,447) (501,144) (661,331,428) (306,539,914) (19,491,781) (13,066,616) (180,997,630) (88,661,763)
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
-- -- -- -- -- -- -- --
-- -- (452) -- -- -- -- --
-- -- (3,630) -- -- -- -- --
-- -- (32,780) -- -- -- -- --
-- -- -- -- -- -- -- --
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
-- -- (36,862) -- -- -- -- --
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
(4,696,447) (501,144) (661,368,290) (306,539,914) (19,491,781) (13,066,616) (180,997,630) (88,661,763)
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
141,011,557 29,365,420 1,093,061,087 843,611,785 50,046,532 50,112,293 64,030,181 55,178,023
4,696,447 501,144 661,331,428 306,539,914 19,491,781 13,066,616 180,997,630 88,661,763
(26,157,811) (2,035,292) (568,654,477) (590,529,129) (34,074,560) (10,686,445) (124,160,136) (118,515,605)
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
119,550,193 27,831,272 1,185,738,038 559,622,570 35,463,753 52,492,464 120,867,675 25,324,181
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
-- -- 604,481 -- -- -- -- --
-- -- 36,862 -- -- -- -- --
-- -- -- -- -- --
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
-- -- 641,343 -- -- -- -- --
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
119,550,193 27,831,272 1,186,379,381 559,622,570 35,463,753 52,492,464 120,867,675 25,324,181
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
123,222,972 28,683,863 1,165,354,568 868,350,569 30,301,406 78,409,685 114,713,776 193,322,116
28,683,863 -- 2,700,514,849 1,832,164,280 252,100,995 173,691,310 1,523,141,728 1,329,819,612
- -------------- --------------- --------------- -------------- -------------- ------------- --------------- --------------
$151,906,835 $28,683,863 $3,865,869,417 $2,700,514,849 $282,402,401 $252,100,995 $1,637,855,504 $1,523,141,728
============== =============== =============== ============== ============== ============= =============== ==============
</TABLE>
8
<PAGE>
THE HUDSON RIVER TRUST
STATEMENTS OF CHANGES IN NET ASSETS (Concluded)
<TABLE>
<CAPTION>
GROWTH INVESTORS
PORTFOLIO
-----------------------------
YEAR ENDED
DECEMBER 31,
1996 1995
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income .............................. $ 25,706,114 $ 23,451,903
Realized gain--net ................................. 131,200,343 20,094,016
Change in unrealized appreciation/depreciation of
investments and foreign currency denominated
assets and liabilities--net ....................... (20,549,143) 114,933,862
-------------- --------------
Net increase in net assets from operations ........ 136,357,314 158,479,781
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1):
Class IA:
Dividends from net investment income .............. (25,705,569) (23,451,903)
Dividends in excess of net investment income ..... (2,082,361) (429,740)
Distributions from realized gains ................. (131,199,726) (11,896,371)
Distributions in excess of realized gains ........ (570,518) --
-------------- --------------
Total Class IA dividends and distributions ........ (159,558,174) (35,778,014)
-------------- --------------
Class IB:
Dividends from net investment income .............. (545) --
Dividends in excess of net investment income ..... (2,449) --
Distributions from realized gains ................. (617) --
Distributions in excess of realized gains ........ (6,239) --
-------------- --------------
Total Class IB dividends and distributions ........ (9,850) --
-------------- --------------
Decrease in net assets from dividends and
distributions ..................................... (159,568,024) (35,778,014)
-------------- --------------
SHARE TRANSACTIONS (NOTES 1 AND 5):
Class IA:
Shares sold ....................................... 297,495,728 264,281,654
Shares issued in reinvestment of dividends and
distributions .................................... 159,558,174 35,778,014
Shares redeemed ................................... (28,339,916) (19,105,124)
-------------- --------------
Total Class IA transactions ........................ 428,713,986 280,954,544
-------------- --------------
Class IB:
Shares sold ....................................... 468,087 --
Shares issued in reinvestment of dividends and
distributions .................................... 9,850 --
Shares redeemed ................................... (90) --
-------------- --------------
Total Class IB transactions ........................ 477,847 --
-------------- --------------
Net increase in net assets derived from
share transactions ................................ 429,191,833 280,954,544
-------------- --------------
INCREASE IN NET ASSETS .............................. 405,981,123 403,656,311
NET ASSETS, BEGINNING OF PERIOD ..................... 896,133,860 492,477,549
-------------- --------------
NET ASSETS, END OF PERIOD* .......................... $1,302,114,983 $896,133,860
============== ==============
</TABLE>
- ------------
* Including accumulated undistributed (overdistributed) net investment income
of $(1,135,946) and $105,968 for the Growth Investors Portfolio, as of
December 31, 1996 and December 31, 1995, respectively.
See Notes to Financial Statements.
9
<PAGE>
THE HUDSON RIVER TRUST
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM DEBT SECURITIES:
BANK NOTES Bank of New York:
Due 03/24/97 ......................................... $10,000,000 $10,001,699 5.48%
Due 04/01/97 ......................................... 5,000,000 5,000,441 5.47
--------------
TOTAL BANK NOTES (3.2%) ............................. 15,002,140
--------------
CERTIFICATES OF DEPOSIT
Bayerische Vereinsbank AG
Due 07/29/97 ......................................... 15,000,000 15,004,438 5.50
Caisse Nationale de Credit Agricole
Due 09/05/97 ......................................... 15,000,000 15,008,047 5.47
First National Bank-Chicago
Due 06/18/97 ......................................... 10,000,000 10,006,299 5.51
Bank of Tokyo-Mitsubishi Bank Ltd., N.Y.
Due 04/30/97 ......................................... 17,000,000 17,006,022 5.72
Norinchukin Bank Ltd.:
Due 04/07/97 ......................................... 8,000,000 8,004,587 5.47
Due 04/23/97 ......................................... 9,000,000 9,009,161 5.46
Sumitomo Bank Ltd.
Due 01/27/97 ......................................... 17,000,000 17,004,514 5.78
--------------
TOTAL CERTIFICATES OF DEPOSIT (19.5%) ............... 91,043,068
--------------
COMMERCIAL PAPER
Alamo Funding
Due 01/30/97 ......................................... 17,500,000 17,425,285 5.53
Allianz of America Financial Corp.
Due 04/24/97 ......................................... 8,000,000 7,867,916 5.53
Atlas Funding Corp.:
Due 01/21/97 ......................................... 16,400,000 16,351,893 5.51
Due 02/04/97 ......................................... 1,253,000 1,246,764 5.50
Barton Capital Corp.:
Due 01/31/97 ......................................... 13,600,000 13,540,273 5.50
Due 06/16/97 ......................................... 3,876,000 3,781,990 5.55
Beta Finance, Inc.:
Due 03/10/97 ......................................... 5,000,000 4,950,228 5.52
Due 03/13/97 ......................................... 5,000,000 4,948,032 5.52
Due 06/02/97 ......................................... 6,000,000 5,866,747 5.54
BHF Delaware, Inc.
Due 03/10/97 ......................................... 5,000,000 4,950,228 5.52
Briarcliff Capital Corp.
Due 01/24/97 ......................................... 1,910,000 1,903,557 5.51
Centauri Corp.:
Due 03/13/97 ......................................... 6,300,000 6,234,272 5.54
Due 04/11/97 ......................................... 11,200,000 11,036,356 5.52
Chase Manhattan Bank
Due 03/14/97 ......................................... 5,000,000 4,947,300 5.52
Enterprise Funding Corp.
Due 03/03/97 ......................................... 1,290,000 1,278,481 5.51
Eureka Corp.
Due 02/03/97 ......................................... 14,000,000 13,932,368 5.50
General Electric Capital Corp.
Due 03/03/97 ......................................... 5,000,000 4,955,182 5.54
Greenwich Asset Funding, Inc.
Due 03/24/97 ......................................... 8,835,000 8,728,945 5.52
International Securitization
Due 02/20/97 ......................................... 7,715,000 7,658,531 5.51
10
<PAGE>
THE HUDSON RIVER TRUST
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ---------------------------------------------------------------------------------------------------
EFFECTIVE
PRINCIPAL VALUE ANNUAL
AMOUNT (NOTE 1) YIELD*
- ---------------------------------------------------------------------------------------------------
Jefferson Smurfit Corp.:
Due 02/19/97 ......................................... $ 5,000,000 $ 4,964,135 5.51%
Due 03/18/97 ......................................... 4,100,000 4,054,385 5.52
Morgan (J.P.) & Co.
Due 03/05/97 ......................................... 5,000,000 4,953,888 5.52
Morgan Stanley Group, Inc.
Due 02/12/97 ......................................... 17,500,000 17,391,588 5.55
Old Line Funding Corp.:
Due 02/24/97 ......................................... 10,000,000 9,920,950 5.51
Due 03/11/97 ......................................... 7,500,000 7,424,244 5.52
Premium Funding-Series B
Due 02/18/97 ......................................... 2,000,000 1,985,947 5.51
Premium Funding-Series A & E:
Due 02/05/97 ......................................... 10,108,000 10,056,211 5.50
Due 02/14/97 ......................................... 5,400,000 5,365,218 5.51
Ranger Funding Corp.:
Due 02/04/97 ......................................... 6,189,000 6,158,196 5.50
Due 02/13/97 ......................................... 5,000,000 4,968,526 5.51
Receivable Capital Corp.
Due 05/01/97 ......................................... 12,100,000 11,887,847 5.53
Riverwood Funding Corp.
Due 02/14/97 ......................................... 17,500,000 17,387,281 5.51
R.O.S.E. Funding Ltd.
Due 03/26/97 ......................................... 17,500,000 17,284,804 5.52
Sigma Finance Corp.:
Due 02/10/97 ......................................... 5,800,000 5,766,038 5.51
Due 04/09/97 ......................................... 4,500,000 4,435,565 5.52
Three Rivers Funding:
Due 01/21/97 ......................................... 3,859,000 3,847,680 5.51
Due 01/27/97 ......................................... 8,046,000 8,015,318 5.51
Working Capital Management, Inc.
Due 01/13/97 ......................................... 17,500,000 17,468,675 5.60
--------------
TOTAL COMMERCIAL PAPER (65.4%) ...................... 304,940,844
--------------
VARIABLE RATE LIBOR
General Electric Capital Corp.
Due 06/27/97 ......................................... 5,000,000 4,997,351 5.72
Goldman Sachs & Co.
Due 01/13/97 ......................................... 15,000,000 15,000,406 5.73
Merrill Lynch & Co., Inc.
Due 03/24/97 ......................................... 15,000,000 14,998,479 5.76
--------------
TOTAL VARIABLE RATE LIBOR (7.5%) .................... 34,996,236
--------------
VARIABLE RATE SECURITIES (1.1%)
General Electric Capital Corp.
Due 05/12/97 ......................................... 5,000,000 5,008,464 5.21
--------------
TOTAL INVESTMENTS IN SHORT-TERM DEBT SECURITIES
(96.7%)
(Amortized Cost $450,833,231) ........................ 450,990,752
OTHER ASSETS LESS LIABILITIES (3.3%) .................. 15,615,442
--------------
NET ASSETS (100.0%) ................................... $466,606,194
==============
</TABLE>
- ------------
* Based on market values at the close of business on December 31, 1996.
See Notes to Financial Statements.
11
<PAGE>
THE HUDSON RIVER TRUST
INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
COLLATERALIZED MORTGAGE
OBLIGATIONS (0.5%)
Federal Home Loan
Mortgage Corp.
5.75% PAC-1(11), 10/15/11 ... $ 454,373 $ 453,379
-------------
MORTGAGE RELATED (28.8%)
Federal Home Loan
Mortgage Corp:
7.0% TBA, 12/10/11 ........... 5,900,000 5,898,159
9.5%, 01/01/20 ............... 4,951 5,329
Federal National Mortgage
Association:
8.031%, 05/01/27 (a) ......... 1,639,402 1,718,307
7.0% 7 Year Balloon, 04/01/03 503,023 504,284
7.0% 7 Year Balloon, 05/01/03 775,588 777,531
7.0% 7 Year Balloon, 06/01/03 4,828,104 4,840,203
7.0% 7 Year Balloon, 07/01/03 1,084,899 1,087,619
7.0% 7 Year Balloon, 08/01/03 2,059,778 2,064,938
Government National Mortgage
Association:
8.0%, 06/15/23 ............... 961,303 980,530
8.0%, 11/15/23 ............... 287,762 293,518
8.0%, 07/15/24 ............... 294,082 299,964
8.0%, 09/15/24 ............... 362,341 369,588
8.0%, 10/15/24 ............... 271,178 276,602
8.0%, 11/15/24 ............... 278,497 284,067
8.0%, 03/15/25 ............... 326,433 332,962
8.0%, 04/15/25 ............... 321,914 328,353
8.0%, 05/15/25 ............... 1,496,347 1,526,276
8.0%, 05/15/26 ............... 714,987 729,289
8.0%, 07/15/26 ............... 3,051,008 3,112,030
-------------
25,429,549
-------------
<PAGE>
- -----------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -----------------------------------------------------------
U.S. GOVERNMENT & AGENCIES (68.5%)
Federal Home Loan Bank
5.5%, 01/10/01 ............... $ 4,500,000 $ 4,373,955
Resolution Funding S.T.R.I.P.S
Zero Coupon Deb., 04/15/99 .. 5,000,000 4,367,750
Tennessee Valley Authority
6.5%, 08/20/01 ............... 5,400,000 5,422,787
U.S. Treasury:
6.125% Note, 08/31/98 ........ 6,800,000 6,819,128
6.0% Note, 08/15/99 .......... 14,000,000 13,995,630
5.5% Note, 12/31/00 .......... 6,600,000 6,447,375
6.625% Note, 06/30/01 ........ 3,200,000 3,251,002
6.25% Note, 10/31/01 ......... 4,000,000 4,002,500
5.875% Note, 11/30/01 ........ 3,700,000 3,645,658
11.875% Bond, 11/15/03 ...... 6,300,000 8,213,625
-------------
60,539,410
-------------
TOTAL LONG-TERM DEBT SECURITIES (97.8%)
(Amortized Cost $85,801,169) 86,422,338
-------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan Bank
5.0%, due 01/02/97 ........... 500,000 499,931
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ........... 5,700,000 5,699,097
-------------
TOTAL U.S. GOVERNMENT
AGENCIES (7.0%) ............. 6,199,028
-------------
TOTAL SHORT-TERM DEBT SECURITIES (7.0%)
(Amortized Cost $6,199,028) . 6,199,028
-------------
TOTAL INVESTMENTS (104.8%)
(Amortized Cost $92,000,197) 92,621,366
OTHER ASSETS LESS LIABILITIES (-4.8%) (4,236,941)
-------------
NET ASSETS (100.0%) ........... $88,384,425
=============
</TABLE>
- ------------
(a) Adjustable rate mortgage; stated interest rate in effect at December 31,
1996.
See Notes to Financial Statements.
12
<PAGE>
THE HUDSON RIVER TRUST
QUALITY BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS
CHEMICALS (8.7%)
Reliance Industries Ltd.
10.375%, 06/24/16+ ............ $ 6,700,000 $ 7,253,554
Soc Quimica Y Minera
7.7%, 09/15/06+ ............... 6,000,000 6,154,620
--------------
TOTAL BASIC MATERIALS (8.7%) . 13,408,174
--------------
CREDIT SENSITIVE
BANKS (4.3%)
Zion's First National Bank
8.536%, 12/15/26+ ............. 6,500,000 6,704,945
--------------
FOREIGN GOVERNMENT (13.5%)
Government of Australia
7.0%, 04/15/00 ................ 17,250,000 13,819,508
Republic of Poland
4.0% PDI, 10/27/14(a) ......... 8,500,000 7,182,500
--------------
21,002,008
--------------
INSURANCE (3.3%)
Conseco Finance Trust II
8.7%, 11/15/26 ................ 5,050,000 5,076,109
--------------
MORTGAGE RELATED (23.6%)
Chase Manhattan Grantor Trust
5.2%, 02/15/02 ................ 5,926,867 5,874,854
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 ................ 7,735,144 7,732,731
Federal National Mortgage
Association:
6.5%, 05/01/11 ................ 13,074,403 12,837,429
6.5%, 08/01/11 ................ 2,124,701 2,086,191
7.0%, 05/01/26 ................ 8,269,379 8,091,075
--------------
36,622,280
--------------
<PAGE>
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
UTILITY--ELECTRIC (4.7%)
Empresa Electrica del Norte
7.75%, 03/15/06+ .............. $ 7,165,000 $ 7,223,538
--------------
UTILITY--GAS (3.3%)
RAS Laffan Liquid Natural Gas
8.294%, 09/15/14+ ............. 5,000,000 5,081,075
--------------
U.S. GOVERNMENT (34.1%)
U.S. Treasury:
6.375% Note, 05/15/99 ......... 25,290,000 25,511,288
6.25% Note, 10/31/01 .......... 14,735,000 14,744,209
5.75% Note, 08/15/03 .......... 13,000,000 12,610,000
--------------
52,865,497
--------------
TOTAL CREDIT SENSITIVE (86.8%) 134,575,452
--------------
TOTAL LONG-TERM DEBT SECURITIES (95.5%)
(Amortized Cost $145,706,771) 147,983,626
--------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES (3.4%)
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ............ 5,300,000 5,299,161
--------------
TOTAL SHORT-TERM DEBT
SECURITIES (3.4%)
(Amortized Cost $5,299,161) .. 5,299,161
--------------
TOTAL INVESTMENTS (98.9%)
(Amortized Cost $151,005,932) 153,282,787
OTHER ASSETS
LESS LIABILITIES (1.1%) ....... 1,740,685
--------------
NET ASSETS (100.0%) ............ $155,023,472
==============
</TABLE>
- ------------
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $32,417,732 or
20.9% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1996.
Glossary: PDI--Past Due Interest Bond
See Notes to Financial Statements.
13
<PAGE>
THE HUDSON RIVER TRUST
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
BUSINESS SERVICES (0.0%)
PRINTING, PUBLISHING &
BROADCASTING
Pegasus Media & Communications
(Class B)* ........................ 150 $ 45,000
-------------
CAPITAL GOODS (0.0%)
BUILDING & CONSTRUCTION
Capital Pacific Holdings,
Inc.--
Warrants* ......................... 11,850 17,775
-------------
CONSUMER CYCLICALS
RETAIL--GENERAL (0.0%)
Eye Care Centers of America--
Warrants* ......................... 5,000 20,000
Florists Transworld Corp.
(Class B)*+ ....................... 18,750 18,750
-------------
TOTAL CONSUMER CYCLICALS (0.0%) ... 38,750
-------------
CONSUMER NONCYCLICALS
HOSPITAL SUPPLIES & SERVICES (0.0%)
Wright Medical Technology,
Inc.--Warrants* ................... 618 80,340
-------------
SOAPS & TOILETRIES (0.1%)
Renaissance Cosmetics--
Warrants*+ ........................ 2,000 100,000
-------------
TOTAL CONSUMER NONCYCLICALS (0.1%) 180,340
-------------
TOTAL COMMON STOCKS
AND WARRANTS (0.1%)
(Cost $157,935) ................... 281,865
-------------
PREFERRED STOCKS:
BUSINESS SERVICES (3.4%)
PRINTING, PUBLISHING &
BROADCASTING
Cablevision Systems Corp.
11.125%, Series M (a) ............. 75,495 6,775,676
-------------
TOTAL PREFERRED STOCKS (3.4%)
(Cost $7,042,039) ................. 6,775,676
-------------
PRINCIPAL
AMOUNT
---------
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS
CHEMICALS (4.9%)
Kaiser Aluminum & Chemical
10.875%, 10/15/06+ ........... $4,000,000 4,240,000
-------------
Trans Resources, Inc.
11.875% Sr. Sub. Note
Series B, 07/01/02 ........... 5,500,000 5,527,500
-------------
9,767,500
-------------
METALS & MINING (1.3%)
Great Lakes Carbon Corp.
10.0%, 01/01/06 .............. 2,500,000 2,650,000
-------------
PAPER (3.4%)
FSW International
12.5%, 11/01/06+ ............. 4,000,000 4,240,000
Maxxam Group Holdings, Inc.
12.0%, 08/01/03+ ............. 2,500,000 2,550,000
-------------
6,790,000
-------------
<PAGE>
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
STEEL (3.3%) AK Steel Corp.
9.125%, 12/15/06+ ............ $4,000,000 $ 4,103,752
Ivaco, Inc.
11.5%, 09/15/05 .............. 2,500,000 2,487,500
--------------
6,591,252
--------------
TOTAL BASIC MATERIALS (12.9%) 25,798,752
--------------
BUSINESS SERVICES
PRINTING, PUBLISHING &
BROADCASTING (16.3%)
All American Communications,
Inc.
10.875%, 10/15/01 ............ 4,000,000 4,060,000
Albritton Communications
9.75%, 11/30/07 .............. 5,000,000 4,850,000
Goss Graphic Systems, Inc.
12.0%, 10/15/06 .............. 5,250,000 5,407,500
Grupo Televisa S.A.
Zero Coupon, 05/15/08 (b) .... 9,000,000 5,940,000
Park Broadcasting, Inc.
11.75%, 05/15/04+ ............ 5,000,000 5,875,000
Telemundo Group, Inc.
7.0%, 02/15/06 (c) ........... 6,735,000 6,499,275
--------------
32,631,775
--------------
TRUCKING, SHIPPING (2.1%)
Ryder Trucks Inc.
10.0%, 12/01/06+ ............. 4,000,000 4,160,000
--------------
TOTAL BUSINESS SERVICES (18.4%) 36,791,775
--------------
CAPITAL GOODS
AEROSPACE (1.8%) Hawk Corp.
10.25%, 12/01/03+ ............ 3,500,000 3,570,000
--------------
MACHINERY (2.1%)
Dictaphone Corp.
11.75%, 08/01/05 ............. 4,500,000 4,140,000
--------------
TOTAL CAPITAL GOODS (3.9%) 7,710,000
--------------
CONSUMER CYCLICALS
AIRLINES (1.0%)
Continental Airlines, Inc.
9.5%, 12/15/01+ .............. 2,000,000 2,030,000
--------------
AUTO RELATED (1.5%)
Harvard Industries, Inc.
12.0%, 07/15/04 .............. 3,500,000 3,027,500
--------------
LEISURE RELATED (4.2%)
American Skiing Corp.
12.0%, 07/15/06+ ............. 4,000,000 4,210,000
Waterford Gaming LLC
12.75%, 11/15/03+ ............ 4,000,000 4,170,000
--------------
8,380,000
--------------
RETAIL--GENERAL (2.1%)
Pantry, Inc.
12.0%, 11/15/00 .............. 4,500,000 4,241,250
--------------
TOTAL CONSUMER CYCLICALS (8.8%) 17,678,750
14
<PAGE>
THE HUDSON RIVER TRUST
HIGH YIELD PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
CONSUMER NONCYCLICALS
CONTAINERS (3.0%)
Gaylord Container Corp.
11.5%, 05/15/01 .............. $3,500,000 $ 3,780,000
MVE, Inc.
12.5%, 02/15/02 .............. 2,000,000 2,160,000
--------------
5,940,000
--------------
HOSPITAL SUPPLIES & SERVICES (3.1%)
Quest Diagnostic, Inc.
10.75%, 12/15/06 ............. 3,452,000 3,624,600
Unison Healthcare Corp.
12.25%, 11/01/06+ ............ 2,500,000 2,562,500
--------------
6,187,100
--------------
TOTAL CONSUMER NONCYCLICALS (6.1%) 12,127,100
--------------
CREDIT SENSITIVE
FOREIGN GOVERNMENT (1.2%)
Republic of Russia
Floater, 12/15/20 (d) ........ 4,000,000 2,335,000
--------------
UTILITY--ELECTRIC (1.5%)
AES China Generating Co.
10.125%, 12/15/06 ............ 3,000,000 3,120,000
--------------
TOTAL CREDIT SENSITIVE (2.7%) 5,455,000
--------------
ENERGY OIL--DOMESTIC (7.9%)
Abraxas Petroleum Corp.
11.5%, 11/01/04+ ............. 3,500,000 3,718,750
National Energy Group
10.75%, 11/01/06+ ............ 6,500,000 6,760,000
TransTexas Gas Corp.
Zero Coupon, 12/31/03 (b) .... 9,512,000 5,231,600
--------------
15,710,350
--------------
OIL--SUPPLIES & CONSTRUCTION (4.6%)
Deeptech International, Inc.
12.0%, 12/15/00 .............. 3,500,000 3,675,000
Transamerican Refining Corp.
Zero Coupon, 02/15/02 (b) .... 6,750,000 5,568,750
--------------
9,243,750
--------------
TOTAL ENERGY (12.5%) ......... 24,954,100
--------------
TECHNOLOGY
ELECTRONICS (11.8%)
Advanced Micro Devices
11.0%, 08/01/03 .............. 6,000,000 6,510,000
- ------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
Anacomp, Inc.
13.0%, 06/04/02 (e) .......... $4,500,000 $ 4,826,250
Sullivan Graphic, Inc.
12.75%, 08/01/05 ............. 5,000,000 4,825,000
Unisys Corp.:
12.0%, 04/15/03 .............. 5,000,000 5,325,000
11.75%, 10/15/04 ............. 2,000,000 2,135,000
--------------
23,621,250
--------------
TELECOMMUNICATIONS (12.8%)
CAI Wireless Systems, Inc.
12.25%, 09/15/02 ............. 4,880,000 2,244,800
Celestica International, Inc.
10.5%, 12/31/06+ ............. 2,500,000 2,625,000
Colt Telecom Group PLC
Zero Coupon, 12/15/06 (b) .... 7,000,000 4,200,000
Ionica Corp. PLC
13.5%, 08/15/06+ (f) ......... 6,000,000 6,720,000
Lodgenet Entertainment
10.25%, 12/15/06+ ............ 2,500,000 2,506,250
Nextel Communications
Zero Coupon, 08/15/04 (b) .... 7,000,000 4,777,500
Phonetel Technologies, Inc.
12.0%, 12/15/06 .............. 2,500,000 2,587,500
--------------
25,661,050
--------------
TOTAL TECHNOLOGY (24.6%) ..... 49,282,300
--------------
TOTAL LONG-TERM DEBT SECURITIES (89.9%)
(Amortized Cost $174,112,832) 179,797,777
--------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan Bank
5.26%, due 01/15/97 .......... 2,300,000 2,295,296
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ........... 8,400,000 8,398,670
--------------
TOTAL U.S. GOVERNMENT
AGENCIES (5.4%) ............. 10,693,966
--------------
TOTAL SHORT-TERM DEBT SECURITIES (5.4%)
(Amortized Cost $10,693,966) . 10,693,966
--------------
TOTAL INVESTMENTS (98.8%)
(Cost/Amortized Cost $192,006,772) 197,549,284
OTHER ASSETS
LESS LIABILITIES (1.2%) ...... 2,496,181
--------------
NET ASSETS (100.0%) ........... $200,045,465
==============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $64,160,002 or
32.1% of net assets.
(a) Dividends may be paid-in-kind or in cash until a specific date; thereafter,
all payments will be in cash.
(b) Debt security initially issued in zero coupon form which converts to coupon
form at a specific rate and date.
(c) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1996.
(d) Security purchased on a when issued basis.
(e) Paid-in-kind.
(f) Consists of more than one class of securities traded together as a unit;
generally bonds with attached stocks or warrants.
See Notes to Financial Statements.
15
<PAGE>
THE HUDSON RIVER TRUST
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS (1.2%)
CHEMICALS
Dow Chemical Co. ............... 35,000 $ 2,743,125
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.6%)
WMX Technologies, Inc. ......... 40,000 1,305,000
--------------
PRINTING, PUBLISHING &
BROADCASTING (3.3%)
Comcast Corp. (Class A) SPL .... 92,000 1,638,750
LibertyMediaGroup(ClassA)* ..... 62,000 1,770,875
Lin Television Corp.* .......... 26,000 1,098,500
New York Times Co. ............. 41,000 1,558,000
Time Warner, Inc. .............. 44,000 1,650,000
--------------
7,716,125
--------------
TRUCKING, SHIPPING (0.5%)
Xtra Corp. ..................... 26,500 1,149,438
--------------
TOTAL BUSINESS SERVICES (4.4%) 10,170,563
--------------
CAPITAL GOODS
BUILDING MATERIALS & FOREST
PRODUCTS (0.7%)
Louisiana Pacific Corp. ........ 75,000 1,584,375
--------------
ELECTRICAL EQUIPMENT (1.3%)
General Electric Co. ........... 30,000 2,966,250
--------------
TOTAL CAPITAL GOODS (2.0%) .... 4,550,625
--------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.8%)
Reebok International Ltd. ...... 45,000 1,890,000
--------------
AUTO RELATED (1.7%)
Goodyear Tire & Rubber Co. ..... 76,500 3,930,188
--------------
FOOD SERVICES, LODGING (0.4%)
Brinker International, Inc.* ... 60,000 960,000
--------------
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Black & Decker Corp. ........... 42,500 1,280,313
Sunbeam Corp. .................. 38,000 978,500
--------------
2,258,813
--------------
RETAIL--GENERAL (3.7%)
AutoZone, Inc.* ................ 51,200 1,408,000
Dayton Hudson Corp. ............ 58,000 2,276,500
Federated Department Stores,
Inc.* ......................... 38,000 1,296,750
Price/Costco, Inc.* ............ 75,000 1,884,374
Sears, Roebuck & Co. ........... 40,000 1,845,000
--------------
8,710,624
--------------
TOTAL CONSUMER CYCLICALS (7.6%) 17,749,625
--------------
CONSUMER NONCYCLICALS
BEVERAGES (2.6%)
Anheuser Busch, Inc. ........... 53,000 2,120,000
Pepsico, Inc. .................. 135,700 3,969,225
--------------
6,089,225
--------------
FOODS (5.7%)
Campbell Soup Co. .............. 90,000 7,222,500
General Mills, Inc. ............ 35,000 2,218,124
<PAGE>
- ------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
Nabisco Holdings Corp.
(Class A) ..................... 54,000 $ 2,099,250
Whitman Corp. .................. 76,000 1,738,500
--------------
13,278,374
--------------
DRUGS (7.0%)
Amgen, Inc.* ................... 12,700 690,570
Bristol-Myers Squibb Co. ....... 25,000 2,718,750
Centocor, Inc.* ................ 101,000 3,610,750
Merck & Co., Inc. .............. 115,200 9,129,600
--------------
16,149,670
--------------
HOSPITAL SUPPLIES & SERVICES (1.3%)
Abbott Laboratories ............ 60,000 3,045,000
--------------
RETAIL--FOOD (0.5%)
Kroger Co.* .................... 23,000 1,069,500
--------------
SOAPS & TOILETRIES (0.5%)
Gillette Corp. ................. 14,000 1,088,500
--------------
TOBACCO (5.6%)
American Brands, Inc. .......... 42,000 2,084,250
Philip Morris Cos., Inc. ....... 56,500 6,363,313
RJR Nabisco Holdings Corp. ..... 135,500 4,607,000
--------------
13,054,563
--------------
TOTAL CONSUMER NONCYCLICALS (23.2%) 53,774,832
--------------
CREDIT SENSITIVE
BANKS (5.7%)
Chase Manhattan Corp. .......... 25,200 2,249,100
First Union Corp. .............. 58,000 4,292,000
Morgan (J.P.) & Co., Inc. ...... 24,000 2,343,000
Wells Fargo & Co. .............. 16,200 4,369,950
--------------
13,254,050
--------------
FINANCIAL SERVICES (2.0%)
Dean Witter Discover & Co. ..... 21,000 1,391,250
Merrill Lynch & Co., Inc. ...... 40,000 3,260,000
--------------
4,651,250
--------------
INSURANCE (5.5%)
General Re Corp. ............... 26,400 4,164,600
ITT Hartford Group, Inc. ....... 56,600 3,820,500
PMI Group, Inc. ................ 48,600 2,691,225
Travelers Group, Inc. .......... 45,333 2,056,985
--------------
12,733,310
--------------
UTILITY--ELECTRIC (4.2%)
Cinergy Corp. .................. 60,000 2,002,500
FPL Group, Inc. ................ 43,000 1,978,000
Houston Industries, Inc. ....... 60,000 1,357,500
NIPSCO Industries, Inc. ........ 28,000 1,109,500
Pinnacle West Capital Corp. .... 36,000 1,143,000
Texas Utilities Co. ............ 55,000 2,241,250
--------------
9,831,750
--------------
UTILITY--GAS (1.2%)
Consolidated Natural Gas Co. ... 50,000 2,762,500
--------------
UTILITY--TELEPHONE (5.2%)
AT&T Corp. ..................... 254,100 11,053,349
LCI International, Inc.* ....... 39,610 851,615
--------------
11,904,964
--------------
TOTAL CREDIT SENSITIVE (23.8%) 55,137,824
--------------
16
<PAGE>
THE HUDSON RIVER TRUST
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ------------------------------------------------------------
ENERGY
COAL & GAS PIPELINES (0.9%)
MCN Corp. ...................... 70,000 $ 2,021,250
--------------
OIL--DOMESTIC (0.3%)
Apache Corp. ................... 22,000 778,250
--------------
OIL--INTERNATIONAL (5.6%)
Exxon Corp. .................... 80,000 7,840,000
Mobil Corp. .................... 42,300 5,171,175
--------------
13,011,175
--------------
OIL--SUPPLIES & CONSTRUCTION (0.3%)
Transocean Offshore, Inc. ...... 9,900 619,988
--------------
RAILROADS (1.4%)
Canadian Pacific Ltd. .......... 39,000 1,033,500
Union Pacific Corp. ............ 39,000 2,344,875
--------------
3,378,375
--------------
TOTAL ENERGY (8.5%) ........... 19,809,038
--------------
TECHNOLOGY
ELECTRONICS (3.9%)
Atmel Corp.* ................... 90,000 2,981,250
National Semiconductor Corp.* .. 153,000 3,729,375
Seagate Technology, Inc.* ...... 12,811 506,035
Tyco International Ltd. ........ 33,900 1,792,463
--------------
9,009,123
--------------
OFFICE EQUIPMENT (2.8%)
Compaq Computer Corp.* ......... 25,000 1,856,250
International Business Machines
Corp. ......................... 20,000 3,020,000
Xerox Corp. .................... 30,000 1,578,750
--------------
6,455,000
--------------
TELECOMMUNICATIONS (4.1%)
ICG Communications, Inc.* ...... 21,552 379,854
MFS Communications Co., Inc.* .. 1,045 56,953
Nokia Corp. (ADR) .............. 62,000 3,572,750
Scientific Atlanta, Inc. ....... 100,000 1,500,000
Teleport Communications Group,
Inc. (Class A)* ............... 79,700 2,430,850
Vodafone Group PLC (ADR) ....... 41,000 1,696,374
--------------
9,636,781
--------------
TOTAL TECHNOLOGY (10.8%) ...... 25,100,904
--------------
DIVERSIFIED (0.7%)
MISCELLANEOUS
Allied Signal, Inc. ............ 27,000 1,809,000
--------------
TOTAL COMMON STOCKS (82.2%)
(Cost $168,673,703) ........... 190,845,536
--------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.2%)
Continental Air Finance Trust
8.5% Conv. .................... 7,500 502,500
--------------
APPAREL, TEXTILE (0.2%)
Designer Finance Trust
6.0% Conv. .................... 6,900 319,125
--------------
TOTAL CONSUMER CYCLICALS (0.4%) 821,625
--------------
<PAGE>
- -----------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -----------------------------------------------------------
CONSUMER NONCYCLICALS (0.5%)
CONTAINERS
Crown Cork & Seal Co., Inc.
4.5% Conv. .................... 23,100 $1,201,200
--------------
CREDIT SENSITIVE
BANKS (0.3%)
First Chicago NBD Corp.
5.75% Conv. Series B .......... 7,600 685,900
--------------
FINANCIAL SERVICES (0.1%)
Money Store
6.5% Conv. .................... 12,000 328,500
--------------
INSURANCE (0.3%)
PennCorp Financial Group, Inc.
7.0% Conv.+ ................... 10,050 597,975
--------------
TOTAL CREDIT SENSITIVE (0.7%) 1,612,375
--------------
TECHNOLOGY (0.7%)
TELECOMMUNICATIONS
MFS Communications Co., Inc.
8.0% Conv. .................... 18,700 1,706,375
--------------
TOTAL PREFERRED STOCKS (2.3%)
(Cost $4,309,492) 5,341,575
--------------
PRINCIPAL
AMOUNT
-----------
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.3%)
United Waste Systems, Inc.
4.5% Conv., 06/01/01+ .......... $490,000 592,900
--------------
PROFESSIONAL SERVICES (0.9%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ........... 220,000 431,475
Danka Business Systems PLC
6.75% Conv., 04/01/02 .......... 470,000 634,500
First Financial Management Corp.
5.0% Conv., 12/15/99 ........... 655,000 1,101,218
--------------
2,167,193
--------------
TOTAL BUSINESS SERVICES (1.2%) 2,760,093
--------------
CAPITAL GOODS (0.2%)
MACHINERY
DII Group, Inc.
6.0% Conv., 10/15/02+ .......... 510,000 484,500
--------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.3%)
Nine West Group, Inc.
5.5% Conv., 07/15/03+ .......... 790,000 786,050
--------------
FOOD SERVICES, LODGING (0.5%)
HFS, Inc.
4.5% Conv., 10/01/99 ........... 320,000 1,059,200
--------------
RETAIL--GENERAL (0.5%)
Saks Holdings, Inc.
5.5% Conv., 09/15/06 ........... 500,000 460,000
U.S. Office Products Co.
5.5% Conv. Sub. Notes, 02/01/01 490,000 637,000
--------------
1,097,000
--------------
TOTAL CONSUMER CYCLICALS (1.3%) 2,942,250
--------------
</TABLE>
17
<PAGE>
THE HUDSON RIVER TRUST
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
CONSUMER NONCYCLICALS
DRUGS (0.5%) MedImmune, Inc.
7.0% Conv. Sub., 07/01/03+ .... $ 500,000 $ 538,750
Quintiles Transnational Corp.
4.25% Conv., 05/31/00+ ........ 505,000 530,250
--------------
1,069,000
--------------
HOSPITAL SUPPLIES & SERVICES (0.9%)
American Medical Response, Inc.
5.25% Conv., 02/01/01+ ........ 545,000 587,237
Healthsouth Corp.
5.0% Conv., 04/01/01 .......... 270,000 558,563
Phycor, Inc.
4.5% Conv., 02/01/03 .......... 540,000 525,825
Tenet Healthcare Corp.
6.0% Conv., 12/01/05 .......... 415,000 435,750
--------------
2,107,375
--------------
TOTAL CONSUMER NONCYCLICALS (1.4%) 3,176,375
--------------
CREDIT SENSITIVE FINANCIAL
SERVICES (0.9%)
Aames Financial Corp.
5.5% Conv., 03/15/06+ ......... 330,000 445,913
Leasing Solutions, Inc.
6.875% Conv., 10/01/03 ........ 760,000 760,000
RAC Financial Group, Inc.
7.25% Conv. Sub., 08/15/03+ ... 365,000 487,731
Safeguard Scientifics
6.0% Conv., 02/01/06+ ......... 345,000 376,050
--------------
2,069,694
--------------
INSURANCE (0.3%)
Penn Treaty American Corp.
6.25% Conv., 12/01/03+ ........ 660,000 716,100
--------------
TOTAL CREDIT SENSITIVE (1.2%) . 2,785,794
--------------
ENERGY
COAL & GAS PIPELINES (0.4%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 .......... 395,000 489,800
Swift Energy Co.
6.25% Conv., 11/15/06 ......... 375,000 411,563
--------------
901,363
--------------
OIL--SUPPLIES & CONSTRUCTION (0.2%)
Seacor Holdings
5.375% Conv. Sub. Notes,
11/15/06+ ..................... 370,000 429,200
--------------
TOTAL ENERGY (0.6%) ........... 1,330,563
--------------
TECHNOLOGY
ELECTRONICS (4.3%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ..................... 905,000 1,400,487
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
Applied Magnetics Corp.:
7.0% Conv. Sub., 03/15/06 ..... $1,135,000 $ 2,008,950
7.0% Conv. Sub. Euro, 03/15/06 100,000 177,000
C-Cube Microsystems, Inc.
5.875% Conv., 11/01/05 ........ 500,000 647,500
Checkpoint Systems, Inc.
5.25% Conv., 11/01/05+ ........ 215,000 314,169
LSI Logic Corp.
5.5% Conv., 03/15/01+ ......... 425,000 932,875
Plasma & Materials
Technologies, Inc.
7.125% Conv., 10/15/01+ ....... 645,000 632,100
Sanmina Corporation
5.5% Conv., 08/15/02+ ......... 750,000 1,568,438
SCI Systems, Inc.
5.0% Conv., 05/01/06 .......... 780,000 891,150
S3 Incorporated
5.75% Conv. Sub. Note,
10/01/03+ ..................... 350,000 383,250
3Com Corp.
10.25% Conv., 11/01/01+ ....... 495,000 1,092,712
--------------
10,048,631
--------------
TELECOMMUNICATIONS (0.9%)
Bay Networks, Inc.
5.25%, 05/15/03+ .............. 270,000 243,675
BBN Corp.
6.0% Conv., 04/01/12 .......... 710,000 688,700
Comverse Technology, Inc.
5.75% Conv. Sub., 10/01/06+ ... 1,020,000 1,056,975
--------------
1,989,350
--------------
TOTAL TECHNOLOGY (5.2%) ....... 12,037,981
--------------
DIVERSIFIED (0.4%)
MISCELLANEOUS
Thermo Electron Corp.
5.0% Conv. Euro, 04/15/01 ..... 585,000 1,159,763
--------------
TOTAL LONG-TERM DEBT
SECURITIES (11.5%)
(Amortized Cost $22,329,200) .. 26,677,319
--------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan Bank
5.25%, due 01/02/97 ........... 3,000,000 2,999,563
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ............ 5,900,000 5,899,065
--------------
TOTAL U.S. GOVERNMENT
AGENCIES (3.9%) .............. 8,898,628
--------------
TOTAL SHORT-TERM DEBT
SECURITIES (3.9%)
(Amortized Cost $8,898,628) ... 8,898,628
--------------
TOTAL INVESTMENTS (99.9%)
(Cost/Amortized Cost $204,211,023) 231,763,058
OTHER ASSETS
LESS LIABILITIES (0.1%) ....... 317,330
--------------
NET ASSETS (100.0%) ............ $232,080,388
==============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $14,197,337 or
6.1% of net assets.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
18
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS:
BASIC MATERIALS
CHEMICALS (2.5%)
Air Products & Chemicals, Inc. . 7,400 $ 511,525
Avery Dennison Corp. ........... 7,200 254,700
Dow Chemical Co. ............... 16,100 1,261,837
Dupont (E.I.) de Nemours & Co. . 37,300 3,520,187
Eastman Chemical Company ....... 5,400 298,350
Ecolab, Inc. ................... 5,000 188,125
FMC Corp.* ..................... 2,600 182,325
Goodrich (B.F.) Co. ............ 4,400 178,200
Grace (W.R.) & Co. ............. 6,400 331,200
Hercules, Inc. ................. 6,800 294,100
Millipore Corp. ................ 5,000 206,875
Monsanto Co. ................... 38,900 1,512,238
Nalco Chemical Co. ............. 5,100 184,238
Rohm & Haas Co. ................ 4,200 342,825
Union Carbide Corp. ............ 8,400 343,350
--------------
9,610,075
--------------
CHEMICALS--SPECIALTY (0.3%)
Great Lakes Chemical Corp. ..... 4,400 205,700
Morton International, Inc. ..... 10,100 411,575
Raychem Corp. .................. 3,000 240,375
Sigma-Aldrich Corp. ............ 3,600 224,775
--------------
1,082,425
--------------
METALS & MINING (1.2%)
Alcan Aluminium Ltd. ........... 900 30,262
Alcan Aluminium Ltd. (Canada) .. 14,800 499,908
Aluminum Co. of America ........ 12,400 790,500
Barrick Gold Corp. ............. 23,500 675,625
Cyprus Amax Minerals Co. ....... 7,900 184,663
Engelhard Corp. ................ 9,450 180,731
Freeport-McMoRan
Copper & Gold, Inc. (Class B) . 13,600 406,300
Homestake Mining Co. ........... 11,700 166,725
Inco Ltd. ...................... 12,000 382,500
Newmont Mining Corp. ........... 6,948 310,923
Phelps Dodge Corp. ............. 4,600 310,500
Placer Dome, Inc. .............. 17,000 369,750
Reynolds Metals Co. ............ 4,300 242,412
Santa Fe Pacific Gold Corp. .... 12,420 190,958
--------------
4,741,757
--------------
PAPER (1.3%)
Champion International Corp. ... 6,400 276,800
Georgia Pacific Corp. .......... 6,100 439,200
International Paper Co. ........ 20,225 816,584
James River Corp. .............. 6,000 198,750
Kimberly Clark Corp. ........... 19,022 1,811,846
Mead Corp. ..................... 3,500 203,438
Moore Corp. Ltd. ............... 9,100 185,412
Stone Container Corp. .......... 12,400 184,450
Temple Inland, Inc. ............ 3,900 211,087
Union Camp Corp. ............... 4,800 229,200
Westvaco Corp. ................. 7,500 215,625
Willamette Industries, Inc. .... 3,900 271,538
--------------
5,043,930
--------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
STEEL (0.3%)
Allegheny Teledyne, Inc. ....... 10,600 $ 243,800
Bethlehem Steel Corp.* ......... 13,600 122,400
Nucor Corp. .................... 6,100 311,100
USX-U.S. Steel Group ........... 6,300 197,663
Worthington Industries, Inc. ... 8,400 152,250
--------------
1,027,213
--------------
TOTAL BASIC MATERIALS (5.6%) .. 21,505,400
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.4%)
Browning-Ferris Industries, Inc. 14,100 370,125
Johnson Controls, Inc. ......... 2,800 232,050
WMX Technologies, Inc. ......... 32,300 1,053,788
--------------
1,655,963
--------------
PRINTING, PUBLISHING &
BROADCASTING (1.9%)
Comcast Corp. (Class A) SPL .... 21,600 384,750
Deluxe Corp. ................... 6,500 212,875
Donnelley (R.R.) & Sons Co. .... 10,000 313,750
Dow Jones & Co., Inc. .......... 6,400 216,800
Dun & Bradstreet Corp. ......... 12,100 287,375
Gannett Co. .................... 9,300 696,338
Jostens, Inc. .................. 8,692 183,619
King World Productions, Inc.* .. 5,200 191,750
Knight-Ridder, Inc. ............ 6,600 252,450
McGraw-Hill Companies, Inc. .... 6,600 304,425
New York Times Co. ............. 6,900 262,200
TCI Group (Class A)* ........... 44,000 574,750
Time Warner, Inc. .............. 37,700 1,413,750
Times Mirror Co. (Class A) ..... 6,600 328,350
Tribune Co. .................... 4,100 323,387
U.S. West Media Group* ......... 41,400 765,900
Viacom, Inc. (Class A)* ........ 1,000 34,500
Viacom, Inc. (Class B)* ........ 22,500 784,687
--------------
7,531,656
--------------
PROFESSIONAL SERVICES (0.4%)
Block (H&R), Inc. .............. 7,200 208,800
Ceridian Corp.* ................ 5,000 202,500
Cognizant Corp. ................ 11,400 376,200
Interpublic Group Cos., Inc. ... 5,400 256,500
Service Corp. International .... 15,400 431,215
--------------
1,475,215
--------------
TRUCKING, SHIPPING (0.3%)
Federal Express Corp.* ......... 7,800 347,100
Laidlaw, Inc. (Class B) ........ 20,800 239,200
Ryder System, Inc. ............. 6,700 188,437
--------------
774,737
--------------
TOTAL BUSINESS SERVICES (3.0%) 11,437,571
--------------
CAPITAL GOODS
AEROSPACE (2.2%)
Boeing Co. ..................... 24,267 2,581,402
General Dynamics Corp. ......... 4,600 324,300
Lockheed Martin Corp. .......... 12,704 1,162,416
McDonnell Douglas Corp. ........ 14,000 896,000
Northrop Grumman Corp. ......... 4,000 331,000
Raytheon Co. ................... 15,600 750,750
19
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Rockwell International Corp. ... 15,900 $ 967,913
TRW, Inc. ...................... 8,400 415,800
United Technologies Corp. ...... 15,900 1,049,400
--------------
8,478,981
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.7%)
Armstrong World Industries, Inc. 2,900 201,550
Crane Co. ...................... 6,600 191,400
Louisiana Pacific Corp. ........ 8,600 181,675
Masco Corp. .................... 11,500 414,000
Owens Corning .................. 4,600 196,075
PPG Industries, Inc. ........... 12,100 679,113
Sherwin Williams Co. ........... 5,800 324,800
Weyerhaeuser Co. ............... 13,300 630,087
--------------
2,818,700
--------------
ELECTRICAL EQUIPMENT (3.5%)
Emerson Electric Co. ........... 14,800 1,431,900
General Electric Co. ........... 110,100 10,886,138
Grainger (W.W.), Inc. .......... 3,700 296,925
Thomas & Betts Corp. ........... 4,200 186,375
Westinghouse Electric Corp. .... 28,100 558,487
--------------
13,359,825
--------------
MACHINERY (1.3%)
Case Corp. ..................... 4,900 267,050
Caterpillar, Inc. .............. 12,700 955,675
Cooper Industries, Inc. ........ 7,200 303,300
Cummins Engine, Inc. ........... 4,400 202,400
Deere & Co. .................... 17,200 698,750
Dover Corp. .................... 7,500 376,875
Fluor Corp. .................... 5,800 363,950
Foster Wheeler Corp. ........... 5,100 189,338
General Signal Corp. ........... 4,500 192,375
Harnischfeger Industries Corp. . 4,100 197,312
Illinois Tool Works, Inc. ...... 8,200 654,975
Ingersoll Rand Co. ............. 7,300 324,850
Pall Corp. ..................... 8,200 209,100
Parker-Hannifin Corp. .......... 5,300 205,375
--------------
5,141,325
--------------
TOTAL CAPITAL GOODS (7.7%) .... 29,798,831
--------------
CONSUMER CYCLICALS
AIRLINES (0.3%)
AMR Corp.* ..................... 5,700 502,313
Delta Air Lines, Inc. .......... 4,700 333,113
Southwest Airlines Co. ......... 9,100 201,337
USAir Group, Inc.* 7,400 172,975
--------------
1,209,738
--------------
APPAREL, TEXTILE (0.6%)
Fruit of the Loom, Inc.* ....... 5,000 189,375
Liz Claiborne, Inc. ............ 4,700 181,537
National Service Industries, Inc. 5,200 194,350
Nike, Inc. (Class B) ........... 18,600 1,111,350
Reebok International Ltd. ...... 5,200 218,400
Russell Corp. .................. 6,500 193,375
VF Corp. ....................... 4,200 283,500
--------------
2,371,887
--------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
AUTO RELATED (0.5%)
Cooper Tire & Rubber Co. ....... 7,400 $ 146,150
Dana Corp. ..................... 6,200 202,275
Eaton Corp. .................... 5,600 390,600
Echlin, Inc. ................... 5,500 173,938
Genuine Parts Co. .............. 8,500 378,250
Goodyear Tire & Rubber Co. ..... 9,100 467,512
Snap-On, Inc. 5,050 179,906
--------------
1,938,631
--------------
AUTOS & TRUCKS (1.8%)
Chrysler Corp. ................. 47,800 1,577,400
Ford Motor Co. ................. 77,800 2,479,875
General Motors Corp. ........... 49,600 2,765,200
Paccar, Inc. ................... 2,800 190,400
--------------
7,012,875
--------------
FOOD SERVICES, LODGING (0.9%)
Harrah's Entertainment, Inc.* .. 10,500 208,688
HFS, Inc.* ..................... 8,700 519,825
Marriott International, Inc. ... 8,500 469,625
McDonald's Corp. ............... 45,500 2,058,875
Wendy's International, Inc. .... 9,000 184,500
--------------
3,441,513
--------------
HOUSEHOLD FURNITURE,
APPLIANCES (0.4%)
Black & Decker Corp. ........... 6,200 186,775
Maytag Corp. ................... 9,100 179,725
Newell Co. ..................... 10,500 330,750
Rubbermaid, Inc. ............... 10,800 245,700
Stanley Works .................. 6,600 178,200
Whirlpool Corp. ................ 5,200 242,450
Zenith Electronics Corp.* ...... 1,205 13,104
--------------
1,376,704
--------------
LEISURE RELATED (1.5%)
American Greetings Corp. ....... 7,100 201,463
Brunswick Corp. ................ 7,700 184,800
CUC International, Inc.* ....... 26,050 618,687
Disney (Walt) Co. .............. 45,100 3,140,087
Hasbro, Inc. ................... 6,400 248,800
Hilton Hotels Corp. ............ 16,400 428,450
ITT Corp.* ..................... 8,100 351,338
Mattel, Inc. ................... 17,743 492,368
--------------
5,665,993
--------------
PHOTO & OPTICAL (0.6%)
Allergan, Inc. ................. 5,400 192,375
Bausch & Lomb, Inc. ............ 5,200 182,000
Eastman Kodak Co. .............. 21,400 1,717,350
Polaroid Corp. ................. 4,100 178,350
--------------
2,270,075
--------------
RETAIL--GENERAL (3.7%)
Circuit City Stores, Inc. ...... 7,100 213,888
CVS Corp. ...................... 7,000 289,625
Dayton Hudson Corp. ............ 14,400 565,200
Dillard Department Stores, Inc.
(Class A) ..................... 7,600 234,650
Federated Department Stores, Inc.* 13,800 470,925
20
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Gap, Inc. ...................... 18,900 $ 569,362
Harcourt General, Inc. ......... 4,600 212,175
Home Depot, Inc. ............... 32,000 1,604,000
K-Mart Corp.* .................. 32,200 334,075
Limited, Inc. .................. 18,000 330,750
Lowe's Cos., Inc. .............. 11,500 408,250
May Department Stores Co. ...... 16,800 785,400
Nordstrom, Inc. ................ 5,400 191,362
Penney (J.C.), Inc. ............ 15,400 750,750
Pep Boys Manny Moe & Jack ...... 5,500 169,125
Price/Costco, Inc.* ............ 13,100 329,138
Rite Aid Corp. ................. 8,200 325,950
Sears, Roebuck & Co. ........... 26,100 1,203,863
Tandy Corp. .................... 4,300 189,200
TJX Cos., Inc. ................. 5,300 251,088
Toys R Us, Inc.* ............... 18,300 549,000
Tupperware Corp. ............... 4,200 225,225
Wal-Mart Stores, Inc. .......... 152,700 3,493,012
Walgreen Co. ................... 16,400 656,000
Woolworth Corp.* ............... 9,400 205,625
--------------
14,557,638
--------------
TOTAL CONSUMER CYCLICALS (10.3%) 39,845,054
--------------
CONSUMER NONCYCLICALS
BEVERAGES (3.7%)
Anheuser Busch, Inc. ........... 33,700 1,348,000
Brown Forman Corp. (Class B) ... 4,700 215,025
Coca-Cola Co. .................. 165,900 8,730,488
Pepsico, Inc. .................. 103,100 3,015,675
Seagram Ltd. ................... 25,200 976,500
--------------
14,285,688
--------------
CONTAINERS (0.2%)
Bemis, Inc. .................... 5,300 195,437
Crown Cork & Seal Co., Inc. .... 8,300 451,313
--------------
646,750
--------------
DRUGS (6.3%)
ALZA Corp. (Class A)* .......... 7,300 188,888
American Home Products Corp. ... 42,400 2,485,700
Amgen, Inc.* ................... 17,600 957,000
Bristol-Myers Squibb Co. ....... 33,300 3,621,375
Lilly (Eli) & Co. .............. 36,700 2,679,100
Merck & Co., Inc. .............. 80,400 6,371,700
Pharmacia & Upjohn, Inc. ....... 33,890 1,342,891
Pfizer, Inc. ................... 42,800 3,547,050
Schering Plough Corp. .......... 24,700 1,599,325
Warner-Lambert Co. ............. 18,100 1,357,500
--------------
24,150,529
--------------
FOODS (2.5%)
Archer Daniels Midland Co. ..... 36,074 793,628
Campbell Soup Co. .............. 15,500 1,243,875
ConAgra, Inc. .................. 16,000 796,000
CPC International, Inc. ........ 9,500 736,250
General Mills, Inc. ............ 10,400 659,100
Heinz (H.J.) Co. ............... 24,350 870,513
Hershey Foods Corp. ............ 10,200 446,250
Kellogg Co. .................... 14,000 918,750
Pioneer Hi Bred International,
Inc. .......................... 5,500 385,000
Quaker Oats Co. ................ 9,000 343,125
Ralston Purina Group ........... 7,000 513,625
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Sara Lee Corp. ................. 32,100 $ 1,195,725
Whitman Corp. .................. 9,000 205,875
Wrigley (Wm.), Jr. Co. ......... 7,700 433,125
--------------
9,540,841
--------------
HOSPITAL SUPPLIES & SERVICES (3.6%)
Abbott Laboratories ............ 51,600 2,618,700
Baxter International, Inc. ..... 18,100 742,100
Becton Dickinson & Co. ......... 8,300 360,012
Biomet, Inc. ................... 12,400 187,550
Boston Scientific Corp.* ....... 11,800 708,000
Columbia/HCA Healthcare Corp. .. 44,600 1,817,450
Guidant Corp. .................. 4,900 279,300
Humana, Inc.* .................. 11,200 214,200
Johnson and Johnson ............ 88,500 4,402,875
Medtronic, Inc. ................ 15,900 1,081,200
Mallinckrodt, Inc. ............. 5,100 225,037
Saint Jude Medical, Inc.* ...... 5,750 245,093
Tenet Healthcare Corp.* ........ 14,400 315,000
United Healthcare Corp. ........ 12,300 553,500
U.S. Surgical Corp. ............ 5,200 204,750
--------------
13,954,767
--------------
RETAIL--FOOD (0.6%)
Albertsons, Inc. ............... 16,800 598,500
American Stores Co. ............ 9,700 396,488
Giant Food, Inc. (Class A) ..... 5,500 189,750
Kroger Co.* .................... 8,400 390,600
Supervalu, Inc. ................ 6,800 192,950
Sysco Corp. .................... 11,900 388,238
Winn Dixie Stores, Inc. ........ 10,100 319,412
--------------
2,475,938
--------------
SOAPS & TOILETRIES (2.9%)
Avon Products, Inc. ............ 9,500 542,688
Clorox Co. ..................... 3,700 371,387
Colgate Palmolive Co. .......... 9,800 904,050
Gillette Corp. ................. 29,800 2,316,950
International Flavors &
Fragrances, Inc. .............. 7,700 346,500
Procter & Gamble Co. ........... 45,600 4,902,000
Unilever N.V. .................. 10,700 1,875,175
--------------
11,258,750
--------------
TOBACCO (2.0%)
American Brands, Inc. .......... 11,300 560,763
Loews Corp. .................... 7,600 716,300
Philip Morris Cos., Inc. ....... 54,000 6,081,750
UST, Inc. ...................... 13,300 430,587
--------------
7,789,400
--------------
TOTAL CONSUMER NONCYCLICALS (21.8%) 84,102,663
--------------
CREDIT SENSITIVE
BANKS (7.5%)
Ahmanson (H.F.) & Co. .......... 7,000 227,500
Banc One Corp. ................. 28,380 1,220,340
Bank of Boston Corp. ........... 10,100 648,925
Bank of New York Co. ........... 26,000 877,500
BankAmerica Corp. .............. 23,800 2,374,050
Bankers Trust New York Corp. ... 5,700 491,625
Barnett Banks, Inc. ............ 12,900 530,513
Boatmen's Bancshares, Inc. ..... 10,300 664,350
Chase Manhattan Corp. .......... 29,140 2,600,745
21
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Citicorp ....................... 31,200 $ 3,213,600
Comerica, Inc. ................. 7,100 371,863
CoreStates Financial Corp. ..... 14,800 767,750
Fifth Third Bancorp ............ 7,000 439,687
First Bank Systems ............. 8,900 607,425
First Chicago NBD Corp. ........ 21,149 1,136,759
First Union Corp. .............. 18,845 1,394,530
Golden West Financial Corp. .... 4,100 258,812
Great Western Financial Corp. .. 9,700 281,300
KeyCorp. ....................... 14,900 752,450
Mellon Bank Corp. .............. 8,600 610,600
Morgan (J.P.) & Co., Inc. ...... 12,400 1,210,550
National City Corp. ............ 14,700 659,663
NationsBank Corp. .............. 19,100 1,867,025
Norwest Corp. .................. 24,600 1,070,100
PNC Bank Corp. ................. 22,600 850,325
Republic New York Corp. ........ 3,900 318,337
Suntrust Banks, Inc. ........... 14,800 728,900
U.S. Bancorp. .................. 10,000 449,375
Wachovia Corp. ................. 11,000 621,500
Wells Fargo & Co. .............. 6,200 1,672,450
--------------
28,918,549
--------------
FINANCIAL SERVICES (2.0%)
American Express Co. ........... 31,400 1,774,100
Beneficial Corp. ............... 3,600 228,150
Dean Witter Discover & Co. ..... 10,700 708,875
Fleet Financial Group, Inc. .... 17,379 866,778
Green Tree Financial Corp. ..... 9,100 351,488
Household International, Inc. .. 6,400 590,400
MBIA, Inc. ..................... 2,900 293,625
MBNA Corp. ..................... 14,750 612,125
Merrill Lynch & Co., Inc. ...... 10,900 888,350
Morgan Stanley Group, Inc. ..... 10,100 576,962
Salomon, Inc. .................. 7,200 339,300
Transamerica Corp. ............. 4,400 347,600
--------------
7,577,753
--------------
INSURANCE (3.8%)
Aetna, Inc. .................... 9,943 795,440
Allstate Corp. ................. 29,238 1,692,149
American General Corp. ......... 13,400 547,725
American International Group, Inc. 30,950 3,350,338
Aon Corp. ...................... 7,100 441,088
Chubb Corp. .................... 11,500 618,125
CIGNA Corp. .................... 5,000 683,125
General Re Corp. ............... 5,400 851,850
ITT Hartford Group, Inc. ....... 7,700 519,750
Jefferson-Pilot Corp. .......... 4,700 266,137
Lincoln National Corp. Industries 6,900 362,250
Marsh & McLennan Cos., Inc. .... 4,700 488,800
MGIC Investment Corp. .......... 4,200 319,200
Providian Corp. ................ 6,200 318,525
Safeco Corp. ................... 8,300 327,331
Saint Paul Cos., Inc. .......... 5,500 322,438
Torchmark Corp. ................ 4,600 232,300
Travelers Group, Inc. .......... 42,500 1,928,438
UNUM Corp. ..................... 4,800 346,800
USF&G Corp. .................... 9,100 189,962
USLIFE Corp. ................... 5,800 192,850
--------------
14,794,621
--------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
MORTGAGE RELATED (1.0%)
Federal Home Loan
Mortgage Corp. ................ 11,900 $ 1,310,488
Federal National Mortgage
Association ................... 72,400 2,696,900
--------------
4,007,388
--------------
UTILITY--ELECTRIC (2.8%)
American Electric Power, Inc. .. 12,400 509,950
Baltimore Gas & Electric Co. ... 9,800 262,150
Carolina Power & Light Co. ..... 10,100 368,650
Central & South West Corp. ..... 14,000 358,750
Cinergy Corp. .................. 10,513 350,871
Consolidated Edison Co. N.Y., Inc. 15,600 456,300
Dominion Resources, Inc. ....... 12,000 462,000
DTE Energy Co. ................. 9,600 310,800
Duke Power Co. ................. 13,400 619,750
Edison International ........... 28,800 572,400
Entergy Corp. .................. 15,300 424,575
FPL Group, Inc. ................ 12,100 556,600
GPU, Inc. ...................... 8,000 269,000
Houston Industries, Inc. ....... 15,600 352,950
Niagara Mohawk Power Co.* ...... 17,900 176,763
Northern States Power Co. ...... 4,900 224,787
Ohio Edison Co. ................ 10,100 229,775
Pacific Gas & Electric Co. ..... 27,400 575,400
Pacificorp ..................... 19,600 401,800
Peco Energy Co. ................ 14,800 373,700
PP&L Resources, Inc. ........... 11,500 264,500
Public Service Enterprise Group 15,800 430,550
Southern Co. ................... 44,700 1,011,337
Texas Utilities Co. ............ 14,900 607,175
Unicom Corporation ............. 14,300 387,887
Union Electric Co. ............. 6,800 261,800
--------------
10,820,220
--------------
UTILITY--GAS (0.4%)
Columbia Gas System, Inc. ...... 3,900 248,137
Consolidated Natural Gas Co. ... 6,300 348,075
ENRON Corp. .................... 16,900 728,813
Nicor, Inc. .................... 5,200 185,900
Peoples Energy Corp. ........... 5,800 196,475
--------------
1,707,400
--------------
UTILITY--TELEPHONE (5.8%)
Alltel Corp. ................... 13,400 420,425
Ameritech Corp. ................ 36,400 2,206,750
AT&T Corp. ..................... 107,400 4,671,900
Bell Atlantic Corp. ............ 29,000 1,877,750
BellSouth Corp. ................ 65,900 2,660,712
GTE Corp. ...................... 63,800 2,902,900
NYNEX Corp. .................... 29,200 1,405,250
Pacific Telesis Group .......... 28,400 1,043,700
SBC Communications, Inc. ....... 40,000 2,070,000
Sprint Corp. ................... 28,500 1,136,437
U.S. West Communications Group . 31,700 1,022,325
WorldCom, Inc.* ................ 28,300 737,569
--------------
22,155,718
--------------
TOTAL CREDIT SENSITIVE (23.3%) 89,981,649
--------------
22
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
ENERGY
COAL & GAS PIPELINES (0.8%)
Burlington Resources, Inc. ..... 8,200 $ 413,075
Coastal Corp. .................. 7,000 342,125
Pacific Enterprises Ltd. ....... 6,400 194,400
Panenergy Corp. ................ 10,000 450,000
Praxair, Inc. .................. 10,400 479,700
Sonat, Inc. .................... 5,700 293,550
Tenneco, Inc. .................. 11,300 509,913
Williams Cos., Inc. ............ 10,350 388,125
--------------
3,070,888
--------------
OIL--DOMESTIC (2.2%)
Amerada Hess Corp. ............. 6,100 353,037
Amoco Corp. .................... 32,600 2,624,300
Ashland, Inc. .................. 4,800 210,600
Atlantic Richfield Co. ......... 10,600 1,404,500
Kerr McGee Corp. ............... 3,300 237,600
Louisiana Land & Exploration Corp. 3,300 176,963
Occidental Petroleum Corp. ..... 22,900 535,288
Oryx Energy Co.* ............... 8,000 198,000
Pennzoil Co. ................... 3,300 186,450
Phillips Petroleum Co. ......... 17,300 765,524
Sun, Inc. ...................... 7,600 185,250
Union Pacific Resources Group,
Inc. .......................... 16,408 479,934
Unocal Corp. ................... 16,400 666,250
USX-Marathon Group ............. 19,800 472,725
--------------
8,496,421
--------------
OIL--INTERNATIONAL (5.7%)
Chevron Corp. .................. 43,300 2,814,500
Exxon Corp. .................... 82,700 8,104,600
Mobil Corp. .................... 26,100 3,190,725
Royal Dutch Petroleum Co. (ADR) 35,500 6,061,625
Texaco, Inc. ................... 17,500 1,717,188
--------------
21,888,638
--------------
OIL--SUPPLIES & CONSTRUCTION (0.9%)
Baker Hughes, Inc. ............. 9,500 327,750
Dresser Industries, Inc. ....... 11,600 359,600
Halliburton Co. ................ 8,300 500,075
McDermott International, Inc. .. 11,900 197,838
Rowan Cos., Inc.* .............. 8,900 201,363
Schlumberger, Ltd. ............. 16,300 1,627,962
Western Atlas, Inc.* ........... 3,900 276,412
--------------
3,491,000
--------------
RAILROADS (0.9%)
Burlington Northern Santa Fe ... 10,151 876,793
Conrail, Inc. .................. 5,647 562,582
CSX Corp. ...................... 14,400 608,400
Norfolk Southern Corp. ......... 8,300 726,250
Union Pacific Corp. ............ 16,200 974,025
--------------
3,748,050
--------------
TOTAL ENERGY (10.5%) .......... 40,694,997
--------------
TECHNOLOGY
ELECTRONICS (5.0%)
Advanced Micro Devices, Inc.* .. 9,900 254,925
AMP, Inc. ...................... 14,500 556,438
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Applied Materials, Inc.* ....... 11,900 $ 427,656
Bay Networks, Inc.* ............ 13,700 285,988
Cabletron Systems, Inc.* ....... 10,300 342,475
Cisco Systems, Inc.* ........... 43,200 2,748,600
EMC Corp.* ..................... 15,400 510,125
General Instrument Corp.* ...... 9,100 196,788
Harris Corp. ................... 3,000 205,875
Intel Corp. .................... 54,300 7,109,906
ITT Industries, Inc. ........... 8,400 205,800
LSI Logic Corp.* ............... 8,900 238,075
Micron Technology, Inc. ........ 13,800 401,925
Motorola, Inc. ................. 39,200 2,405,900
National Semiconductor Corp.* .. 9,200 224,250
Perkin-Elmer Corp. ............. 3,600 211,950
Seagate Technology, Inc.* ...... 14,200 560,900
Tektronix, Inc. ................ 3,700 189,625
Texas Instruments, Inc. ........ 12,600 803,250
Tyco International, Ltd. ....... 10,400 549,900
3Com Corp.* 11,500 843,812
--------------
19,274,163
--------------
OFFICE EQUIPMENT (3.7%)
Amdahl Corp.* .................. 14,400 174,600
Apple Computer, Inc.* .......... 8,600 179,525
Compaq Computer Corp.* ......... 17,900 1,329,075
Dell Computer Corp.* ........... 11,900 632,188
Digital Equipment Corp.* ....... 10,300 374,663
Hewlett-Packard Co. ............ 67,300 3,381,825
Honeywell, Inc. ................ 8,400 552,300
International Business Machines
Corp. 34,300 5,179,300
Pitney Bowes, Inc. ............. 9,800 534,100
Sun Microsystems, Inc.* ........ 24,300 624,206
Unisys Corp.* .................. 3,200 21,600
Xerox Corp. .................... 21,500 1,131,437
--------------
14,114,819
--------------
OFFICE EQUIPMENT SERVICES (3.2%)
Autodesk, Inc. ................. 6,700 187,600
Automatic Data Processing, Inc. 19,300 827,488
Computer Associates International,
Inc. .......................... 24,250 1,206,438
Computer Sciences Corp.* ....... 5,100 418,838
First Data Corp. ............... 29,800 1,087,700
Microsoft Corp.* ............... 79,200 6,543,900
Novell, Inc.* .................. 25,700 243,345
Oracle Corp.* .................. 43,525 1,817,169
Silicon Graphics, Inc.* ........ 12,500 318,750
--------------
12,651,228
--------------
TELECOMMUNICATIONS (1.6%)
AirTouch Communications, Inc.* . 33,300 840,825
Andrew Corp.* .................. 4,175 221,536
Cox Communications Inc.
(Class A)* .................... 95 2,197
DSC Communications Corp.* ...... 10,300 184,113
Lucent Technologies, Inc. ...... 42,094 1,946,848
MCI Communications Corp. ....... 45,400 1,484,012
Northern Telecommunications Ltd. 17,100 1,058,062
Tellabs, Inc.* ................. 12,600 474,075
--------------
6,211,668
--------------
TOTAL TECHNOLOGY (13.5%) ...... 52,251,878
--------------
23
<PAGE>
THE HUDSON RIVER TRUST
EQUITY INDEX PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
DIVERSIFIED
MISCELLANEOUS (1.4%)
Alco Standard Corp. ............ 8,800 $ 454,300
Allied Signal, Inc. ............ 18,800 1,259,600
Corning, Inc. .................. 15,200 703,000
Minnesota Mining & Manufacturing
Co. ........................... 27,700 2,295,637
Textron, Inc. .................. 5,500 518,375
--------------
TOTAL DIVERSIFIED (1.4%) ...... 5,230,912
--------------
TOTAL COMMON STOCKS (97.1%)
(Cost $312,422,283) ........... 374,848,955
--------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT & AGENCIES
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ........ $7,700,000 $ 7,698,780
U.S. Treasury
5.0%, due 02/20/97** ...... 500,000 496,521
-------------
TOTAL U.S. GOVERNMENT &
AGENCIES (2.1%) .......... 8,195,301
-------------
TOTAL SHORT-TERM DEBT SECURITIES (2.1%)
(Amortized Cost $8,195,301) 8,195,301
-------------
TOTAL INVESTMENTS (99.2%)
(Cost/Amortized Cost $320,617,584) 383,044,256
OTHER ASSETS
LESS LIABILITIES (0.8%) ... 3,204,925
-------------
NET ASSETS (100.0%) ........ $386,249,181
=============
</TABLE>
- --------------
Financial Futures Contracts outstanding at December 31, 1996:
<TABLE>
<CAPTION>
EXPIRATION NUMBER ORIGINAL VALUE AT UNREALIZED
DESCRIPTION DATE OF CONTRACTS VALUE 12/31/96 DEPRECIATION
- -------------------- ------------ -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C>
Long S&P 500 Index* 3/97 21 $7,986,250 $7,817,250 $(169,000)
</TABLE>
- ------------
* Non-income producing.
** Security segregated as collateral on financial futures contracts.
See Notes to Financial Statements.
24
<PAGE>
THE HUDSON RIVER TRUST
COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
BASIC MATERIALS
CHEMICALS (1.0%)
Grace (W.R.) & Co. ............... 356,100 $ 18,428,175
Monsanto Co. ..................... 1,245,000 48,399,375
--------------
TOTAL BASIC MATERIALS (1.0%) ... 66,827,550
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.4%)
WMX Technologies, Inc. ........... 900,000 29,362,500
--------------
PRINTING, PUBLISHING &
BROADCASTING (4.0%)
Chris Craft Industries, Inc.
(Class B)*++ .................... 1,190,444 49,849,843
Comcast Corp. (Class A) SPL ..... 1,031,800 18,378,938
Liberty Media Group (Class A)* .. 1,523,309 43,509,513
TCI Group (Class A)* ............. 9,094,236 118,793,458
TCI Satellite Entertainment, Inc.
(Class A)* ...................... 919,423 9,079,302
Time Warner, Inc. ................ 190,000 7,125,000
U.S. West Media Group* ........... 855,000 15,817,500
--------------
262,553,554
--------------
PROFESSIONAL SERVICES (2.4%)
ADT Ltd.* ........................ 446,000 10,202,250
Ceridian Corp.*++ ................ 3,665,000 148,432,500
Cognizant Corp. .................. 130,000 4,290,000
--------------
162,924,750
--------------
TOTAL BUSINESS SERVICES (6.8%) . 454,840,804
--------------
CAPITAL GOODS
AEROSPACE (0.4%)
LoralSpace&Communications*(a) 1,540,000 28,297,500
--------------
ELECTRICAL EQUIPMENT (0.6%)
Westinghouse Electric Corp. ..... 1,785,000 35,476,875
--------------
TOTAL CAPITAL GOODS (1.0%) ..... 63,774,375
--------------
CONSUMER CYCLICALS
AIRLINES (0.5%)
Delta Air Lines, Inc. ............ 200,000 14,175,000
Northwest Airlines Corp.
(Class A)* ...................... 93,300 3,650,363
UAL Corp.* ....................... 291,700 18,231,250
--------------
36,056,613
--------------
LEISURE RELATED (3.6%)
CUC International, Inc.*(a) ..... 6,618,700 157,194,125
Disney (Walt) Co. ................ 153,000 10,652,625
Hasbro, Inc. ..................... 336,100 13,065,888
ITT Corp.* ....................... 1,322,600 57,367,775
--------------
238,280,413
--------------
PHOTO & OPTICAL (1.0%)
Eastman Kodak Co. ................ 837,700 67,225,425
--------------
RETAIL--GENERAL (6.3%)
AutoZone, Inc.* .................. 4,470,100 122,927,750
CompUSA, Inc.*(a) ................ 3,167,600 65,331,750
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Home Depot, Inc. ................. 701,000 $ 35,137,625
Lowe's Cos., Inc. ................ 1,741,400 61,819,700
Sears, Roebuck & Co. ............. 1,950,500 89,966,813
Wal-Mart Stores, Inc. ............ 1,766,000 40,397,250
--------------
415,580,888
--------------
TOTAL CONSUMER CYCLICALS (11.4%) 757,143,339
--------------
CONSUMER NONCYCLICALS
BEVERAGES (0.2%)
Pepsico, Inc. .................... 421,000 12,314,250
--------------
DRUGS (4.6%)
Amgen, Inc.* ..................... 150,000 8,156,250
Astra AB (A Shares) .............. 1,290,000 63,750,955
Merck & Co., Inc. ................ 1,849,200 146,549,100
Pfizer, Inc. ..................... 925,000 76,659,375
Schering Plough Corp. ............ 200,000 12,950,000
--------------
308,065,680
--------------
HOSPITAL SUPPLIES &
SERVICES (2.3%)
Abbott Laboratories .............. 1,150,000 58,362,500
Boston Scientific Corp.* ......... 70,100 4,206,000
Healthsource, Inc.* .............. 83,000 1,089,375
Medtronic, Inc. .................. 992,900 67,517,200
Saint Jude Medical, Inc.* ........ 114,600 4,884,825
United Healthcare Corp. .......... 333,500 15,007,500
--------------
151,067,400
--------------
TOBACCO (5.0%)
Loews Corp. ...................... 2,068,500 194,956,125
Philip Morris Cos., Inc. ......... 1,180,300 132,931,288
--------------
327,887,413
--------------
TOTAL CONSUMER NONCYCLICALS (12.1%) 799,334,743
--------------
CREDIT SENSITIVE
BANKS (5.6%)
Chase Manhattan Corp. ............ 1,183,768 105,651,294
CoreStates Financial Corp. ...... 295,000 15,303,125
First Chicago NBD Corp. .......... 891,700 47,928,875
First Union Corp. ................ 1,055,000 78,070,000
Morgan (J.P.) & Co., Inc. ........ 84,900 8,288,363
NationsBank Corp. ................ 1,178,000 115,149,500
--------------
370,391,157
--------------
FINANCIAL SERVICES (2.3%)
American Express Co. ............. 1,505,000 85,032,500
Dean Witter Discover & Co. ...... 556,583 36,873,624
Household International, Inc. ... 103,000 9,501,750
MBNA Corp. ....................... 527,300 21,882,950
--------------
153,290,824
--------------
INSURANCE (13.2%)
Allstate Corp. ................... 1,851,647 107,164,070
American International Group,
Inc. ............................ 2,540,050 274,960,413
ITT Hartford Group, Inc. ......... 1,128,600 76,180,500
PMI Group, Inc. .................. 808,700 44,781,763
25
<PAGE>
THE HUDSON RIVER TRUST
COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ----------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
Progressive Corp. ................ 1,213,800 $ 81,779,775
TIG Holdings, Inc. ............... 1,159,800 39,288,225
Travelers Group, Inc. ............ 5,535,665 251,180,799
--------------
875,335,545
--------------
MORTGAGE RELATED (0.4%)
Federal National Mortgage
Association ..................... 693,000 25,814,250
--------------
REAL ESTATE (2.9%)
CBL & Associates Properties,
Inc.++ .......................... 1,077,200 27,872,550
Essex Property Trust, Inc. ...... 292,200 8,583,375
First Industrial Realty Trust ... 213,000 6,469,875
Macerich Co. ..................... 717,500 18,744,688
Manufactured Home Communities ... 338,000 7,858,500
Regency Realty Corp.++ ........... 623,700 16,372,125
Simon Debartolo Group, Inc. ..... 1,443,000 44,733,000
Spieker Properties, Inc. ......... 1,307,200 47,059,200
Summit Properties, Inc. .......... 519,100 11,485,088
Sun Communities, Inc. ............ 161,000 5,554,500
--------------
194,732,901
--------------
UTILITY--TELEPHONE (0.2%)
BellSouth Corp. .................. 10,824 437,019
Frontier Corp. ................... 500,000 11,312,500
--------------
11,749,519
--------------
TOTAL CREDIT SENSITIVE (24.6%). 1,631,314,196
--------------
ENERGY
OIL--DOMESTIC (0.5%)
Union Pacific Resources Group,
Inc. ............................ 1,026,477 30,024,452
--------------
OIL--SUPPLIES & CONSTRUCTION (0.5%)
Western Atlas, Inc.* ............. 458,800 32,517,450
--------------
RAILROADS (2.3%)
Canadian Pacific Ltd. ............ 2,833,300 75,082,450
Union Pacific Corp. .............. 1,340,371 80,589,806
--------------
155,672,256
--------------
TOTAL ENERGY (3.3%) ............. 218,214,158
--------------
TECHNOLOGY
ELECTRONICS (22.3%)
Altera Corp.* .................... 50,000 3,634,375
Bay Networks, Inc.*(a) ........... 860,200 17,956,675
Cabletron Systems, Inc.*(a) ..... 1,305,700 43,414,525
Cisco Systems, Inc.*(a) .......... 6,383,000 406,118,375
EMC Corp.*(a) .................... 3,590,900 118,948,563
General Instrument Corp.* ........ 1,782,410 38,544,616
Intel Corp.(a) ................... 2,752,800 360,444,750
Micron Technology, Inc. .......... 100,000 2,912,500
National Semiconductor Corp.*(a) 2,319,400 56,535,375
Seagate Technology, Inc.*(a) .... 1,210,000 47,795,000
Texas Instruments, Inc.(a) ...... 773,800 49,329,750
3Com Corp.*(a) ................... 4,513,900 331,207,413
--------------
1,476,841,917
--------------
<PAGE>
- ----------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ----------------------------------------------------------------
OFFICE EQUIPMENT (1.8%)
Compaq Computer Corp.*(a) ........ 500,000 $ 37,125,000
Sterling Software, Inc.* ......... 586,200 18,538,575
Xerox Corp. ...................... 1,202,500 63,281,563
--------------
118,945,138
--------------
OFFICE EQUIPMENT SERVICES (3.8%)
Electronic Data Systems Corp. ... 2,100,000 90,825,000
Informix Corp.*(a) ............... 1,696,900 34,574,338
Microsoft Corp.* ................. 854,000 70,561,750
Oracle Corp.*(a) ................. 557,200 23,263,100
Sterling Commerce, Inc.* ......... 933,582 32,908,766
--------------
252,132,954
--------------
TELECOMMUNICATIONS (8.4%)
AirTouch Communications, Inc.* .. 2,444,600 61,726,150
Deutsche Telekom AG (ADR)* ...... 1,142,600 23,280,475
DSC Communications Corp.* ........ 2,016,100 36,037,788
Mannesmann AG (ADR) .............. 185,700 80,222,400
MCI Communications Corp. ......... 421,000 13,761,438
MFS Communications Co., Inc.*(a) 6,226,764 339,358,630
Teleport Communications Group,
Inc. (Class A)* ................. 20,000 610,000
--------------
554,996,881
--------------
TOTAL TECHNOLOGY (36.3%) ........ 2,402,916,890
--------------
DIVERSIFIED
MISCELLANEOUS (0.2%)
Anixter International, Inc.* .... 812,434 13,100,498
Hanson (ADR)--Warrants
(Class B)* ...................... 77,475,857 605,319
--------------
TOTAL DIVERSIFIED (0.2%) ........ 13,705,817
--------------
TOTAL COMMON STOCKS AND WARRANTS
(96.7%)
(Cost $4,791,317,138) ........... 6,408,071,872
--------------
PREFERRED STOCKS:
TECHNOLOGY (0.7%)
TELECOMMUNICATIONS
MFS Communications Co., Inc.
8.0% Conv. ...................... 487,000 44,438,750
--------------
TOTAL PREFERRED STOCKS (0.7%)
(Cost $34,577,944) .............. 44,438,750
--------------
PRINCIPAL
AMOUNT
------------
LONG-TERM DEBT SECURITIES:
TECHNOLOGY (0.0%)
ELECTRONICS
3Com Corp.
10.25% Conv., 11/01/01+ ......... $900,000 1,986,750
--------------
TOTAL LONG-TERM DEBT SECURITIES (0.0%)
(Amortized Cost $1,247,499) .... 1,986,750
--------------
</TABLE>
26
<PAGE>
THE HUDSON RIVER TRUST
COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES (0.2%)
Industrial Bank of Japan-L.A.
5.73%, due 01/16/97 .......... $10,000,000 $ 9,976,125
--------------
COMMERCIAL PAPER
Alamo Funding
5.45%, due 02/13/97 .......... 20,000,000 19,869,806
Associates Corp. of North
America
5.75%, due 01/02/97 .......... 25,000,000 24,996,007
Greenwich Asset Funding, Inc.
5.4%, due 04/04/97 ........... 12,200,000 12,034,222
Morgan Stanley Group, Inc.
6.79%, due 01/02/97 .......... 50,000,000 49,990,569
Three Rivers Funding
5.85%, due 01/27/97 .......... 2,800,000 2,788,170
--------------
TOTAL COMMERCIAL PAPER (1.7%) 109,678,774
--------------
TIME DEPOSITS
Sumitomo Bank Ltd.
6.0%, due 01/02/97 ........... 69,800,000 69,800,000
Toronto Dominion Bank
6.25%, due 01/02/97 .......... 25,000,000 25,000,000
--------------
TOTAL TIME DEPOSITS (1.4%) .. 94,800,000
--------------
TOTAL SHORT-TERM DEBT SECURITIES (3.3%)
(Amortized Cost $214,450,487) 214,454,899
--------------
TOTAL INVESTMENTS (100.7%)
(Cost/Amortized Cost $5,041,593,068) 6,668,952,271
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
------------ ----------
<S> <C> <C>
CALL OPTIONS WRITTEN*(c):
Bay Networks, Inc.:
January @ $26.5625 .... 2,000 (12,000)
January @ $26.625 ...... 1,500 (9,000)
Cabletron Systems, Inc.:
March @ $35.50 ......... 2,000 (462,000)
March @ $40.75 ......... 3,000 (129,000)
Cisco Systems, Inc.:
January @ $63.375 ...... 2,500 (680,000)
January @ $65 .......... 1,500 (96,000)
January @ $65 .......... 2,000 (248,000)
February @ $63.375 .... 2,000 (734,000)
February @ $65.375 .... 4,000 (1,140,000)
February @ $67.375 .... 1,500 (386,400)
March @ $63.25 ......... 1,500 (852,000)
March @ $66.25 ......... 3,000 (1,257,000)
Compaq Computer Corp.:
January @ $72.875 ...... 1,000 (359,000)
January @ $73 .......... 1,000 (360,000)
January @ $74 .......... 1,000 (290,000)
February @ $66.375 .... 1,000 (969,500)
February @ $78.94 ...... 1,000 (290,000)
CompUSA, Inc.:
February @ $22.4375 ... 2,000 (270,000)
February @ $22.625 .... 4,000 (248,000)
February @ $22.625 .... 2,000 (262,000)
February @ $23 ......... 4,000 (464,000)
February @ $23.125 .... 6,000 (425,400)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
March @ $21.50 .............. 1,500 $ (291,000)
March @ $22.375 ............. 2,000 (248,000)
March @ $22.6875 ............ 4,000 (536,000)
CUC International, Inc.:
January @ $26.17 ............ 2,250 (20,250)
January @ $27.17 ............ 3,000 (9,000)
February @ $24.875 .......... 1,500 (159,000)
February @ $24.875 .......... 1,000 (99,000)
February @ $25 .............. 1,000 (96,000)
February @ $25.875 .......... 1,500 (76,350)
March @ $22.75 .............. 1,500 (358,500)
March @ $24.75 .............. 3,000 (426,000)
March @ $25.25 .............. 1,000 (96,800)
EMC Corp.
January @ $26.50 ............ 2,000 (1,422,000)
Informix Corp.:
January @ $20.75 ............ 2,450 (306,250)
January @ $27 ............... 2,000 (12,000)
February @ $20.625 .......... 1,000 (160,000)
February @ $20.75 ........... 1,500 (258,000)
February @ $21.375 .......... 2,000 (236,000)
March @ $20.875 ............. 3,000 (713,700)
March @ $21.625 ............. 2,000 (392,000)
Intel Corp.:
January @ $104.75 ........... 1,000 (2,633,000)
January @ $109.75 ........... 2,000 (4,356,000)
February @ $121 ............. 2,000 (2,854,000)
February @ $121.375 ......... 1,000 (1,461,000)
February @ $122.875 ......... 1,000 (1,365,000)
March @ $127.875 ............ 1,000 (1,110,000)
March @ $132.50 ............. 1,000 (889,000)
Loral Space & Communications:
February @ $17.25 ........... 2,000 (336,000)
February @ $18.50 ........... 1,000 (131,000)
February @ $18.75 ........... 1,500 (166,500)
MFS Communications Co., Inc.:
January @ $45.125 ........... 2,000 (1,950,000)
January @ $49.95 ............ 3,500 (2,082,500)
January @ $50.375 ........... 1,500 (849,000)
February @ $48.625 .......... 2,000 (1,594,000)
February @ $48.75 ........... 1,000 (792,000)
February @ $48.875 .......... 2,000 (1,546,000)
February @ $49 .............. 1,500 (1,168,500)
February @ $49.375 .......... 1,500 (1,035,000)
February @ $50.50 ........... 1,500 (870,000)
February @ $50.50 ........... 2,000 (1,294,000)
February @ $51.125 .......... 1,500 (876,000)
March @ $48.125 ............. 1,500 (1,219,500)
National Semiconductor Corp.
January @ $19.375 ........... 2,000 (1,011,400)
Oracle Corp.
March @ $43.50 .............. 2,000 (604,000)
Seagate Technology, Inc.
February @ $37.6875 ......... 2,000 (720,000)
Texas Instruments, Inc.:
January @ $50.50 ............ 2,000 (2,694,000)
February @ $54.50 ........... 1,500 (1,485,000)
3Com Corp.:
January @ $62.50 ............ 2,000 (2,276,600)
January @ $62.75 ............ 2,000 (2,318,200)
January @ $64 ............... 1,500 (1,591,050)
27
<PAGE>
THE HUDSON RIVER TRUST
COMMON STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ------------------------------------------------------------
NUMBER OF VALUE
CONTRACTS(b) (NOTE 1)
- ------------------------------------------------------------
January @ $65.59 ............ 2,000 $ (1,602,000)
January @ $65.875 ........... 1,500 (1,212,300)
February @ $69.75 ........... 1,500 (1,089,150)
February @ $71 .............. 1,500 (912,900)
February @ $72 .............. 1,500 (880,500)
February @ $73.33 ........... 1,500 (906,000)
February @ $75.125 .......... 2,000 (927,800)
February @ $75.50 ........... 1,000 (449,000)
March @ $79.125 ............. 2,000 (798,000)
March @ $79.20 .............. 2,000 (770,000)
March @ $79.25 .............. 2,000 (790,000)
March @ $80 ................. 2,000 (730,000)
March @ $81.125 ............. 2,000 (662,600)
---------------
TOTAL CALL OPTIONS WRITTEN (-1.1%)
(Premiums Received $68,607,800) (70,867,650)
---------------
OTHER ASSETS
LESS LIABILITIES (0.4%) .... 28,548,958
---------------
NET ASSETS (100.0%) .......... $6,626,633,579
===============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $1,986,750 or
0.03% of net assets.
++ Affiliated company as defined under the Investment Company Act of 1940 (see
Note 6).
(a) Partially held as collateral on outstanding written call options.
(b) One contract relates to 100 shares.
(c) Covered call option contracts written in connection with securities held.
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
28
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (1.4%)
Bayer AG ......................... 40,000 $ 1,623,343
Dainippon Ink & Chemical, Inc. ... 160,000 592,695
GP Batteries International Ltd. .. 850,000 2,822,000
GP Batteries International
Ltd.--Rights* ................... 12,500 6,250
Grace (W.R.) & Co. ............... 39,000 2,018,250
Indo Gulf Fertilisers (GDR) ...... 150,000 105,000
Ishihara Sangyo Ltd.* ............ 438,000 1,058,976
Millennium Chemicals, Inc.* ...... 7,142 126,771
Mitsubishi Chemical Corp. ........ 44,000 142,475
Royal Plastics Group Ltd.*+ ...... 50,000 925,689
Sanyo Chemicals .................. 96,000 737,760
Sekisui Chemical Co. Ltd. ........ 144,000 1,454,797
Shin-Etsu Chemical Ltd. .......... 39,000 710,560
SKW Trostberg AG ................. 45,000 1,222,966
Tessenderlo Chemie ............... 1,000 429,789
--------------
13,977,321
--------------
CHEMICALS--SPECIALTY (1.3%)
SGL Carbon AG+ ................... 91,100 11,491,103
UCAR International, Inc.* ........ 40,000 1,505,000
--------------
12,996,103
--------------
METALS & MINING (0.5%)
Broken Hill Proprietary Co. Ltd. . 100,000 1,424,371
Great Central Mines Ltd.* ........ 408,900 1,163,551
Johnson Matthey PLC .............. 40,000 376,882
Plutonic Resources Ltd. .......... 50,000 232,494
Western Mining Corp. Ltd. ........ 200,000 1,260,632
Westralian Sands Ltd. ............ 280,000 890,232
--------------
5,348,162
--------------
PAPER (0.4%)
Asia Pacific Resources
International Holdings Ltd.
(Class A)* ...................... 70,000 393,750
Enso Oy (Series R) ............... 124,000 998,006
Fletcher Forestry Shares ......... 17,026 28,527
Grupo Industrial Durango (ADR)* .. 70,000 743,750
Mayr-Melnhof Karton Aktien
AG*+ ............................ 24,000 1,174,791
Nippon Paper Industries Co. ...... 32,000 149,210
Oji Paper Co. Ltd. ............... 71,000 449,383
--------------
3,937,417
--------------
STEEL (0.6%)
Acerinox S.A. .................... 2,002 289,509
British Steel .................... 400,000 1,099,810
Hitachi Metals Ltd. .............. 158,000 1,256,524
SSAB Svenskt Stal (Class B) ...... 6,000 100,305
Sumitomo Metal Industries ........ 1,196,000 2,943,269
--------------
5,689,417
--------------
TOTAL BASIC MATERIALS (4.2%) .... 41,948,420
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.5%)
B.U.S. Berzelius
Umwelt-Service AG ............... 76,700 947,037
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Daiseki Co. Ltd. ................. 32,000 $ 762,628
Matsuda Sangyo Co. Ltd. .......... 23,000 593,817
Powerscreen International ........ 640,000 6,194,570
Tomra Systems ASA ................ 335,000 5,234,994
WMX Technologies, Inc. ........... 50,000 1,631,250
--------------
15,364,296
--------------
PRINTING, PUBLISHING &
BROADCASTING (2.7%)
Carlton Communications PLC ....... 130,000 1,145,807
Comcast Corp. (Class A) SPL ...... 57,000 1,015,313
Elsevier N.V. .................... 180,000 3,040,525
Liberty Media Group
(Class A)* ...................... 94,050 2,686,303
Mirror Group Newspapers PLC ...... 250,000 922,933
Nippon Television Network Corp. .. 12,300 3,717,296
Reed International ............... 60,000 1,132,188
Takara Printing Co. .............. 4,000 32,467
TCI Group (Class A)* ............. 482,709 6,305,390
TCI Satellite Entertainment, Inc.
(Class A)* ...................... 47,800 472,025
Television Broadcasts ............ 50,000 199,754
Time Warner, Inc. ................ 15,750 590,625
Tokyo Broadcasting System ........ 170,000 2,598,221
TVI Televisao Independente* ...... 4,700 13,948
Ver Ned Uitgeversbedr Ver
Bezit N.V. ...................... 150,000 3,132,504
--------------
27,005,299
--------------
PROFESSIONAL SERVICES (3.2%)
ADT Ltd.* ........................ 140,993 3,225,215
Apcoa Parking AG ................. 20,000 2,144,528
Asatsu, Inc. ..................... 62,500 1,986,012
Ceridian Corp.* .................. 264,700 10,720,350
Content Beheer N.V.*+ ............ 168,000 6,414,258
Dauphin O.T.A.* .................. 150 9,309
Goudsmit (Eduard) N.V.* .......... 17,000 1,514,477
Meitec Corp. ..................... 163,600 3,121,976
Prosegur Compania Seguridad SA ... 4,310 39,868
WPP Group PLC .................... 600,000 2,610,764
--------------
31,786,757
--------------
TRUCKING, SHIPPING (1.1%)
Brambles Industries Ltd. ......... 140,000 2,731,899
Irish Continental Group .......... 153,500 1,079,937
Kawasaki Kisen* .................. 292,000 665,642
Koninklijke Nedlloyd Groep N.V. .. 80,000 2,193,621
Western Bulk Shipping+ ........... 94,500 452,668
Yamato Transport ................. 343,000 3,554,097
--------------
10,677,864
--------------
TOTAL BUSINESS SERVICES (8.5%) .. 84,834,216
--------------
CAPITAL GOODS
AEROSPACE (0.4%)
Loral Space & Communications* .... 163,000 2,995,125
Swire Pacific Ltd. (Class A) ..... 100,000 953,520
--------------
3,948,645
--------------
29
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
BUILDING & CONSTRUCTION (2.2%)
ABB AG ........................... 3,000 $ 3,731,789
Bam Groep Holdings ............... 1,000 56,113
Bufete Industrial S.A. (ADR)* .... 19,000 403,750
Fomento de Construcciones Y
Contratas SA .................... 1,000 93,272
Hitachi Plant Engineering &
Construction Co. ................ 135,000 799,672
Japan Industrial Land Development 50,000 949,832
Kajima Corp. ..................... 121,000 865,107
Kaneshita Construction Co. ....... 127,000 1,206,286
MacMahon Holdings Ltd. ........... 2,000,000 1,780,464
Metacorp Berhard ................. 308,000 786,617
Mitsui Home Co. Ltd. ............. 127,000 1,568,172
Nanno Construction Co. Ltd. ...... 53,000 315,776
National House Industrial Co. .... 22,000 292,548
Ohmoto Gumi Co. Ltd. ............. 61,000 874,363
Oriental Construction Co. ........ 60,300 775,814
Paul Y.-ITC Construction Holdings 500,000 119,594
Paul Y.-ITC Construction
Holdings--Warrants* ............. 100,000 1,791
Penta Ocean Construction ......... 37,000 164,856
PS Corp. ......................... 109,700 1,837,648
Sacos Corp. ...................... 22,900 209,602
Sanyo Engineering & Construction,
Inc. ............................ 25,000 222,347
Sho Bond Construction ............ 119,700 3,224,799
Suido Kiko Kaisha ................ 42,000 297,384
Toda Construction ................ 114,000 866,246
Wesco, Inc. ...................... 46,150 577,821
--------------
22,021,663
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (1.2%)
Boral Ltd. ....................... 180,000 512,201
BPB PLC .......................... 540,000 3,547,659
Fujikura Ltd. .................... 211,000 1,690,769
Lafarge Canada ................... 7,000 122,056
Lafarge Corp. .................... 33,000 1,979,936
Macmillan Bloedel Ltd. ........... 30,000 393,281
Nichiha Corp. .................... 154,500 2,734,867
Portland Valderrivas SA* ......... 12,899 869,024
Sumitomo Forestry Co. ............ 30,000 365,253
--------------
12,215,046
--------------
ELECTRICAL EQUIPMENT (0.7%)
Alcatel Alsthom .................. 20,000 1,606,630
Omron Corp. ...................... 184,000 3,463,604
Vae Eisenbahnsys AG .............. 3,000 340,523
Yaskawa Electric Corp.* .......... 267,000 926,811
--------------
6,337,568
--------------
MACHINERY (3.0%)
Asahi Diamond
Industry Co. Ltd. ............... 108,000 979,190
BT Industries AB+ ................ 70,000 1,303,674
Construcciones Auxiliar Ferro .... 9,425 357,446
Danieli & Co.* ................... 32,200 265,349
Enshu* ........................... 60,000 180,295
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Fag Kugelfischer Georg Schaefer .. 16,200 $ 221,608
IHC Caland N.V. .................. 52,000 2,969,024
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 164,000 729,298
Kalmar Industries AB+ ............ 70,000 1,077,840
Kawasaki Heavy Industries ........ 380,000 1,571,712
Keppel Corp. ..................... 76,000 592,010
Keyence Corp. .................... 14,000 1,728,694
Makino Milling Machine Co. ....... 76,000 484,967
Mitsubishi Heavy Industries Ltd. . 515,000 4,091,184
Namura Shipbuilding Co. .......... 106,000 347,811
Nippon Seiko K.K. ................ 4,000 24,247
Nireco ........................... 24,000 273,552
Nitta Corp. ...................... 122,000 1,527,502
Nitto Kohki Co. Ltd. ............. 62,000 2,221,743
Siebe PLC ........................ 90,000 1,668,217
SMC Corp. ........................ 50,600 3,403,627
Sodick Co.* ...................... 380,000 3,149,987
Thai Engine Manufacturing Public
Co. Ltd.* ....................... 87,000 675,076
--------------
29,844,053
--------------
TOTAL CAPITAL GOODS (7.5%) 74,366,975
--------------
CONSUMER CYCLICALS
AIRLINES (1.1%)
Air Canada* ...................... 100,000 452,803
British Airways .................. 150,000 1,555,923
Continental Airlines, Inc.
(Class B)* ...................... 38,000 1,073,500
Delta Air Lines, Inc. ............ 12,000 850,500
KLM .............................. 100,000 2,811,444
Northwest Airlines Corp.
(Class A)* ...................... 27,100 1,060,288
Qantas Airways Ltd. .............. 15,000 25,038
Singapore Airlines Ltd. .......... 250,000 2,268,992
UAL Corp.* ....................... 16,500 1,031,250
--------------
11,129,738
--------------
APPAREL, TEXTILE (0.4%)
Adidas AG+ ....................... 13,000 1,123,603
Carli Gry International A/S* ..... 30,000 1,437,049
First Sign International
Holdings Ltd. ................... 2,630,000 841,586
King Co.* ........................ 55,000 247,431
Morishita Co. Ltd. ............... 6,000 42,069
Renown, Inc.* .................... 27,000 72,040
--------------
3,763,778
--------------
AUTO RELATED (1.0%)
Asahi Glass Co. Ltd. ............. 73,000 687,074
Autoliv AB ....................... 20,000 876,937
Autoliv AB (ADS)*+ ............... 23,700 1,025,025
Bridgestone Metalpha ............. 7,000 59,839
FCC Co. Ltd. ..................... 18,000 489,595
Mabuchi Motor Co. ................ 44,300 2,230,110
Michelin (CGDE), (Class B) ....... 40,000 2,159,391
Minebea Co. ...................... 230,000 1,922,459
Toyoda Gosei* .................... 5,000 34,669
--------------
9,485,099
--------------
30
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
AUTOS & TRUCKS (0.6%)
Honda Motor Corp. ................ 157,000 $ 4,487,264
Isuzu Motors Ltd. ................ 127,000 564,761
Toyota Motor Corp. ............... 49,000 1,408,946
--------------
6,460,971
--------------
FOOD SERVICES, LODGING (0.6%)
AAPC Limited ..................... 1,500,000 906,129
Accor SA ......................... 12,000 1,519,514
International Fast Food Corp.* ... 8,000 1,040
Jurys Hotel Group PLC ............ 400,000 1,864,810
QPQ Corp.* ....................... 32,700 77,663
QPQ Corp.--Warrants* ............. 32,700 4,088
Sanyo Pax Co. Ltd. ............... 48,000 833,089
Thistle Hotels PLC* .............. 249,200 774,832
--------------
5,981,165
--------------
HOUSEHOLD FURNITURE,
APPLIANCES (0.9%)
Hunter Douglas N.V. .............. 30,000 2,021,810
Industrie Natuzzi (ADR) .......... 114,000 2,622,000
Matsushita Electric Industrial Co. 60,000 979,190
Nippon Electric Glass ............ 79,000 1,214,230
Philips Electronics .............. 10,000 404,941
Sanyo Electric Co. Ltd. .......... 377,000 1,562,559
Sharp Corp. ...................... 37,000 527,157
--------------
9,331,887
--------------
LEISURE RELATED (2.9%)
Cinar Films, Inc. (Class B)* ..... 48,000 1,248,000
CUC International, Inc.* ......... 375,800 8,925,250
Enix Corp.* ...................... 10,200 230,757
Hasbro, Inc. ..................... 13,000 505,375
ITT Corp.* ....................... 67,700 2,936,488
Japan Airport Terminal Co. ....... 130,200 1,596,442
KTM Motorradholding AG* .......... 10,440 583,350
Mars Engineering Corp.* .......... 32,900 838,054
Namco Ltd. ....................... 85,100 2,608,626
Nelvana Limited*+ ................ 130,000 2,159,942
Nintendo Co. ..................... 43,700 3,128,167
Rank Group PLC ................... 100,000 746,055
Tag Heuer International SA (ADR)* 143,200 2,309,100
Tourism Holdings Ltd. ............ 600,000 1,145,259
--------------
28,960,865
--------------
PHOTO & OPTICAL (0.4%)
Luxottica Group (ADR) ............ 20,000 1,040,000
Noritsu Koki Co. Ltd. ............ 63,000 2,964,770
--------------
4,004,770
--------------
RETAIL--GENERAL (5.7%)
Asda Group PLC* .................. 400,000 842,845
AutoZone, Inc.* .................. 253,600 6,974,000
British Airport Author PLC ....... 500,000 4,167,116
Centros Comerciales Pryca SA ..... 75,000 1,589,858
CompUSA, Inc.* ................... 179,700 3,706,313
Dai-Ichi Corp. ................... 35,000 707,193
Dixons Group PLC* ................ 450,000 4,182,105
Doshisha Co. ..................... 47,000 771,091
Eiden Sakakiya Co. Ltd. .......... 84,000 848,631
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Fu Hui Jewellery* ................ 450,000 $ 41,890
Gucci Group N.V. ................. 15,000 958,125
Homac Corp. ...................... 35,700 647,353
Home Centers Ltd.* ............... 142,800 660,450
Home Wide Corp, Inc. ............. 18,000 161,644
House of Fraser PLC .............. 750,000 1,972,206
Isetan Co. ....................... 190,000 2,460,927
Lowe's Cos., Inc. ................ 24,300 862,650
Matsuyadenki Co. Industries ...... 6,000 56,472
MFI Furniture PLC ................ 100,000 319,493
Nissen Corp. Ltd. ................ 40,300 281,867
Paris Miki, Inc. ................. 60,900 2,198,100
Rinascente ....................... 175,000 1,015,247
Rinascente--Warrants* ............ 8,750 3,859
Sato Corp. ....................... 105,700 2,062,706
Sears, Roebuck & Co. ............. 107,300 4,949,213
Siam Makro Public Co. Ltd. ....... 50,000 210,559
Sriwani Holdings BHD ............. 680,000 1,830,925
Swank International Manufacturing 1,000,000 151,270
St. Dupont*+ ..................... 64,400 2,184,523
Thorn PLC* ....................... 500,000 2,154,223
Vendex International N.V. ........ 14,400 615,602
Wal-Mart Stores, Inc. ............ 165,000 3,774,375
Warehouse Group Ltd. ............. 846,250 2,034,072
Xebio Co. ........................ 30,600 911,579
--------------
56,308,482
--------------
TOTAL CONSUMER CYCLICALS (13.6%) 135,426,755
--------------
CONSUMER NONCYCLICALS
BEVERAGES (1.4%)
Grand Metropolitan ............... 300,000 2,358,939
Guinness PLC ..................... 650,000 5,094,331
Lion Nathan Ltd. ................. 592,000 1,418,764
Louis Dreyfus Citrus*+ ........... 71,500 2,342,681
Panamerican Beverages ............ 30,000 1,406,250
Quilmes Industrial Quins (ADR) ... 131,100 1,196,288
--------------
13,817,253
--------------
DRUGS (5.1%)
Astra AB (A Shares) .............. 40,000 1,976,774
Biogen, Inc.* .................... 59,000 2,286,250
Hafslund Nycomed ASA
(B Shares) ...................... 80,000 549,060
Merck & Co., Inc. ................ 107,600 8,527,300
Novartis AG (ADR) ................ 20,000 1,141,710
Novartis AG* ..................... 1,110 1,271,296
Novo-Nordisk AS (ADR)
(B Shares) ...................... 17,500 3,299,607
Nycomed ASA (B Shares)* .......... 90,000 1,385,214
Pfizer, Inc. ..................... 54,000 4,475,250
Roche Holdings AG Genusscheine ... 800 6,224,879
Santen Pharmaceutical Co. ........ 150,000 3,108,540
Schering Plough Corp. ............ 13,000 841,750
Smith & Nephew PLC* .............. 500,000 1,550,356
Smithkline Beecham PLC ........... 200,000 2,773,509
Taisho Pharmaceutical Co. ........ 95,000 2,239,444
Takeda Chemical Industries ....... 30,000 629,479
Yamanouchi Pharmaceutical ........ 198,000 4,069,079
Zeneca Group PLC ................. 180,000 5,080,198
--------------
51,429,695
--------------
31
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
FOODS (0.7%)
Fyffes PLC ....................... 2,700,000 $ 5,034,988
Nestle AG ........................ 500 536,795
Nutrica Verenigde Bedrijven N.V. . 2,900 440,373
Oie Sangyo Co. Ltd. .............. 4,000 51,809
Shriram Industrial Enterprises
Ltd. (GDR)*+ .................... 165,000 24,750
Viscofan Envoltura ............... 60,000 878,758
--------------
6,967,473
--------------
HOSPITAL SUPPLIES & SERVICES (1.1%)
Abbott Laboratories .............. 38,500 1,953,875
Boston Scientific Corp.* ......... 23,000 1,380,000
Cochlear Ltd. .................... 50,000 142,278
Coloplast A/S B .................. 800 91,047
Medtronic, Inc. .................. 56,400 3,835,200
Quest Medical, Inc.* ............. 164,543 1,275,208
Saint Jude Medical, Inc.* ........ 46,600 1,986,325
Scandinavian Mobility
International, Inc.+ ............ 13,700 225,732
Tamro Group ...................... 10,000 66,780
--------------
10,956,445
--------------
RETAIL--FOOD (0.6%)
Casino Guichard-Perrachon ........ 13,590 632,812
Daimon Co. Ltd. .................. 45,400 729,160
Familymart Co. ................... 4,900 195,898
Loblaw Companies Ltd. ............ 90,000 930,071
McBride PLC ...................... 350,000 815,436
Ministop Co. Ltd. ................ 19,800 483,844
Seven-Eleven Japan Ltd. .......... 41,000 2,400,311
--------------
6,187,532
--------------
SOAPS & TOILETRIES (0.2%)
Shiseido Co. ..................... 146,000 1,689,319
--------------
TOBACCO (1.9%)
BAT Industries ................... 300,000 2,489,991
Imperial Tobacco PLC* ............ 200,000 1,291,677
Loews Corp. ...................... 97,800 9,217,650
RJ Reynolds BHD .................. 200,000 542,467
Swedish Match Co. AB* ............ 1,100,000 3,871,426
Tabacalera SA .................... 40,000 1,723,599
--------------
19,136,810
--------------
TOTAL CONSUMER NONCYCLICALS (11.0%) 110,184,527
--------------
CREDIT SENSITIVE
BANKS (5.0%)
Akita Bank ....................... 75,000 466,281
Asahi Bank Ltd. .................. 164,000 1,458,596
Banco Comercial Portuguese SA .... 60,000 791,596
Banco Latinoamericano de
Exportaciones S.A. .............. 60,000 3,045,000
Banco Popular .................... 5,000 982,822
Banco Santander-Chile (ADR) ...... 15,000 225,000
Bancomer B Local* ................ 1,000,000 398,882
Bank of Tokyo-Mitsubishi Bank .... 209,000 3,880,062
Bankinter-Banco Interc Espana .... 1,000 155,170
Barclays Bank .................... 140,000 2,399,539
Chase Manhattan Corp. ............ 68,288 6,094,704
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
First Chicago NBD Corp. .......... 67,000 $ 3,601,250
First Union Corp. ................ 88,000 6,512,000
Fokus Bank ....................... 58,000 399,890
Grupo Financiero Bantorte (Class
B)* ............................. 178,750 179,840
Hachijuni Bank ................... 59,000 560,401
HSBC Holdings PLC (H.K.$) ........ 80,000 1,711,811
Mitsubishi Trust & Banking Corp. . 93,000 1,244,711
Morgan (J.P.) & Co., Inc. ........ 5,200 507,650
NationsBank Corp. ................ 67,000 6,549,250
Overseas Chinese Bank ............ 60,000 746,087
Overseas Union Bank Ltd. ......... 180,000 1,389,266
Shizuoka Bank 149,000 1,582,506
Sparbanken Sverige AB
(A Shares) ...................... 148,000 2,539,304
Standard Chartered PLC ........... 150,000 1,847,578
Toho Bank ........................ 77,000 466,747
Union Bank of Norway ............. 8,600 270,132
--------------
50,006,075
--------------
FINANCIAL SERVICES (4.7%)
American Express Co. ............. 143,000 8,079,500
Americredit Corp.* ............... 296,700 6,082,350
CMIC Finance & Securities Co. Ltd. 724,700 1,045,539
Credit Local de France ........... 25,000 2,177,893
Credit Saison Co. ................ 181,600 4,061,342
Dean Witter Discover & Co. ....... 35,900 2,378,375
Hong Leong Finance Ltd. .......... 160,000 372,758
Household International, Inc. .... 20,700 1,909,575
Invesco .......................... 400,000 1,778,198
JCG Holdings ..................... 142,000 138,613
MBNA Corp. ....................... 48,000 1,992,000
Mercury Finance Co. .............. 472,950 5,793,638
Nichiei Co. Ltd. ................. 57,500 4,225,240
Promise Co. Ltd. ................. 35,800 1,762,024
PT Bunas Finance Indonesia* ...... 377,000 399,026
Sanyo Shinpan Finance Co. Ltd. ... 27,100 1,696,529
Takefuji Corp.* .................. 20,200 1,456,437
Yamaichi Securities .............. 343,000 1,525,300
--------------
46,874,337
--------------
INSURANCE (5.3%)
Acceptance Industries Cos., Inc.* 110,100 2,174,475
Aegon N.V. ....................... 95,000 6,050,679
American International
Group, Inc. ..................... 96,250 10,419,063
AMEV N.V. ........................ 125,000 4,374,804
Corporacion Mapfre
Cia Inter SA .................... 70,853 4,320,154
Irish Life PLC ................... 100,000 459,421
Koa Fire & Marine ................ 109,000 528,953
Pacific & Orient BHD ............. 220,000 531,380
PennCorp Financial Group, Inc. ... 35,700 1,285,200
PMI Group, Inc. .................. 36,500 2,021,188
Progressive Corp. ................ 61,500 4,143,563
Travelers Group, Inc. ............ 293,133 13,300,910
Twentieth Century Industries ..... 211,000 3,560,625
--------------
53,170,415
--------------
32
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
MORTGAGE RELATED (0.1%)
Federal National Mortgage
Association ..................... 15,000 $ 558,750
--------------
REAL ESTATE (2.5%)
Arden Realty Group, Inc. ......... 98,500 2,733,375
Castle & Cooke, Inc.* ............ 85,000 1,349,375
Cheung Kong Holdings ............. 90,000 799,987
Chubu Sekiwa Real Estate ......... 23,000 295,916
City Developments Ltd. ........... 270,000 2,431,216
Daibiru Corp. .................... 90,000 831,534
JP Realty, Inc. .................. 87,300 2,258,888
Macerich Co. ..................... 151,700 3,963,163
Mitsubishi Estate Co. ............ 218,000 2,240,048
Prentiss Properties Trust ........ 85,000 2,125,000
Sap Holdings* .................... 66,000 316,215
Spieker Properties, Inc. ......... 37,700 1,357,200
Storage USA, Inc. ................ 28,000 1,053,500
Summit Properties, Inc. .......... 72,000 1,593,000
Sun Communities, Inc. ............ 41,000 1,414,500
--------------
24,762,917
--------------
UTILITY--ELECTRIC (2.8%)
British Energy PLC* .............. 1,672,000 4,210,526
Enersis S.A. (ADR) ............... 45,000 1,248,750
EVN .............................. 8,394 1,263,659
Gas Y Electridad SA (Series 2) ... 5,000 319,899
Hidroelectrica del Cantabrico .... 56,000 2,138,928
Iberdrola II ..................... 150,000 2,127,520
Iberdrola SA ..................... 250,000 3,545,866
Korea Electric Power (ADR) ....... 100,000 2,050,000
National Grid Group PLC .......... 1,100,000 3,684,022
National Power PLC ............... 450,000 3,769,677
Veba AG .......................... 60,000 3,450,741
--------------
27,809,588
--------------
UTILITY--GAS (0.4%)
General de Aguas d'Barcelona ..... 90,000 3,746,285
--------------
UTILITY--TELEPHONE (1.3%)
Empresas Telex-Chile S.A. (ADR) .. 119,000 550,375
Frontier Corp. ................... 42,000 950,250
Hellenic Telecommunication
Organization SA ................. 48,880 841,808
Kon. PTT Nederland+ .............. 120,000 4,574,671
PT Indonesian Satellite (ADR) .... 40,000 1,095,000
Stet Societa Finanz Telefon ...... 40,000 181,953
Tele Danmark AS (B Shares) ....... 6,000 331,235
Telefonica de Espana SA .......... 100,000 2,324,084
Telephone & Data Systems, Inc. ... 61,700 2,236,625
--------------
13,086,001
--------------
TOTAL CREDIT SENSITIVE (22.1%) .. 220,014,368
--------------
ENERGY
COAL & GAS PIPELINES (0.7%)
Nabors Industries, Inc.* ......... 121,000 2,329,250
OMV AG ........................... 40,000 4,510,754
--------------
6,840,004
--------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
OIL--DOMESTIC (0.1%)
Union Pacific Resources
Group, Inc. ..................... 39,465 $ 1,154,351
XCL Corp.* ....................... 700,000 131,250
--------------
1,285,601
--------------
OIL--INTERNATIONAL (0.6%)
Canadian Occidental .............. 10,000 160,000
ENI Spa .......................... 666,000 3,418,093
Repsol SA ........................ 65,000 2,495,211
Yukong Ltd. (GDR)+ ............... 25,000 156,250
--------------
6,229,554
--------------
OIL--SUPPLIES & CONSTRUCTION (0.6%)
Bouygues Offshore SA (ADR)* ...... 148,000 1,905,500
Coflexip (ADR)* .................. 70,117 1,840,571
Tubos de Acero de Mexico SA (ADR)* 112,400 1,784,350
--------------
5,530,421
--------------
RAILROADS (1.0%)
Canadian Pacific Ltd. ............ 218,400 5,787,600
Union Pacific Corp. .............. 63,633 3,825,934
--------------
9,613,534
--------------
TOTAL ENERGY (3.0%) ............. 29,499,114
--------------
TECHNOLOGY
ELECTRONICS (8.8%)
Austria Mikro Systeme
International ................... 4,000 308,844
Aval Data ........................ 14,000 112,426
Cabletron Systems, Inc.* ......... 54,100 1,798,825
Cisco Systems, Inc.* ............. 338,000 21,505,250
Cypress Semiconductor Corp.* ..... 120,000 1,695,000
EMC Corp.* ....................... 160,000 5,300,000
Fujimi, Inc. ..................... 500 26,941
Hirose Electric Co. Ltd. ......... 45,400 2,630,464
Hoya Corp. ....................... 86,000 3,378,810
Intel Corp. ...................... 144,500 18,920,458
National Semiconductor Corp.* .... 86,000 2,096,250
NEC Corp. ........................ 35,000 423,107
Rohm Co. Ltd. .................... 31,000 2,034,367
Seagate Technology, Inc.* ........ 97,000 3,831,500
Seatex Garex ASA* ................ 81,700 443,963
TDK Corp. ........................ 35,000 2,281,755
Texas Instruments, Inc. .......... 38,100 2,428,875
Tokyo Electron ................... 38,000 1,164,839
Yokogawa Electric Corp. .......... 471,000 4,067,006
3Com Corp.* ...................... 182,500 13,390,938
--------------
87,839,618
--------------
OFFICE EQUIPMENT (1.2%)
Canon, Inc. ...................... 50,000 1,105,259
Compaq Computer Corp.* ........... 45,000 3,341,250
Ricoh Elemex Corp. ............... 21,000 293,757
Sterling Software, Inc.* ......... 169,600 5,363,600
Xerox Corp. ...................... 47,400 2,494,425
--------------
12,598,291
--------------
33
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- --------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
OFFICE EQUIPMENT SERVICES (2.7%)
Accugraph Corp. (Class A)* ....... 6,200 $ 4,936
Electronic Data Systems Corp. .... 119,000 5,146,750
Fuji Soft Corp. .................. 32,500 993,438
Informix Corp.* .................. 67,000 1,365,125
Istar Internet, Inc.*+ ........... 12,500 41,994
Micro Warehouse, Inc.* ........... 60,900 715,575
Microsoft Corp.* ................. 66,000 5,453,250
Misys PLC ........................ 130,000 2,486,479
Oracle Corp.* .................... 44,800 1,870,400
Sterling Commerce, Inc.* ......... 236,660 8,342,265
Turbon International AG .......... 30,000 779,828
--------------
27,200,040
--------------
TELECOMMUNICATIONS (5.4%)
BCE Mobile Communications, Inc.* . 16,000 474,420
Cellular Communications Puerto
Rico, Inc.* ..................... 7,600 150,100
Cox Communications, Inc.
(Class A)* ...................... 17,000 393,125
DDI Corp. ........................ 401 2,652,327
Deutsche Telekom AG (ADR)* ....... 232,000 4,727,000
Filtronic Comtek PLC ............. 1,210,000 7,648,820
Forval Corp. ..................... 8,000 311,545
Korea Mobile Telecommunications
Corp. (ADR) ..................... 362,560 4,667,960
MFS Communications Co., Inc.* .... 361,145 19,682,400
NetCom Systems AB (B Shares)* .... 85,600 1,387,085
Rogers Cantel Mobile
Communications (Class B)* ....... 20,000 396,567
Tadiran Telecommunications Ltd. .. 199,800 4,470,525
Teleport Communications Group,
Inc. (Class A)* ................. 60,500 1,845,250
United States Cellular Corp.* .... 40,600 1,131,725
Vodafone Group ................... 900,000 3,800,512
--------------
53,739,361
--------------
TOTAL TECHNOLOGY (18.1%) 181,377,310
--------------
DIVERSIFIED
MISCELLANEOUS (1.6%)
Alba ............................. 8,000 809,074
BTR PLC .......................... 200,000 973,041
Cie Generale des Eaux ............ 30,000 3,717,838
Crean (James) PLC--Units ......... 385,000 1,207,465
Hanson PLC ....................... 500,000 698,088
Indonesia Fund, Inc.* ............ 20,000 195,000
International UNP Holdings* ...... 450,000 92,021
International UNP
Holdings--Warrants* ............. 225,000 0
Invesco Funding LLC* ............. 80,000 355,640
Mitsubishi Corp. ................. 186,000 1,927,295
Sime Darby BHD ................... 800,000 3,151,851
Taiwan Fund ...................... 40,000 890,000
Tomkins PLC ...................... 500,000 2,299,837
--------------
TOTAL DIVERSIFIED (1.6%) ........ 16,317,150
--------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (89.6%)
(Cost $766,444,974) ............. 893,968,835
--------------
<PAGE>
- --------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
PREFERRED STOCKS:
CONSUMER CYCLICALS (0.0%)
RETAIL--GENERAL
Fielmann AG ...................... 8,000 $ 252,145
--------------
CONSUMER NONCYCLICALS (0.1%)
DRUGS
Fresenius AG* .................... 4,000 830,517
--------------
TECHNOLOGY
TELECOMMUNICATIONS (0.5%)
MFS Communications Co., Inc.
8.0% Conv. ...................... 22,000 2,007,500
Nokia Oy Cum ..................... 44,000 2,553,574
--------------
TOTAL TECHNOLOGY (0.5%) ......... 4,561,074
--------------
TOTAL PREFERRED STOCKS (0.6%)
(Cost $3,075,940) ............... 5,643,736
--------------
PRINCIPAL
AMOUNT
------------
LONG-TERM DEBT SECURITIES:
CONSUMER NONCYCLICALS (0.2%)
FOODS
Burns, Philp & Co., Ltd.
5.5% Conv., 04/30/04 ............ $2,000,000 1,756,250
--------------
CREDIT SENSITIVE (0.0%)
INSURANCE
Corporacion Mapfre
8.5% Conv., 02/27/99 ...... Peseta 29,910,000 230,558
--------------
TECHNOLOGY
ELECTRONICS (0.9%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ....................... $1,305,000 2,019,488
3Com Corp.
10.25% Conv., 11/01/01+ ......... 3,000,000 6,622,500
--------------
TOTAL TECHNOLOGY (0.9%) 8,641,988
--------------
DIVERSIFIED (0.0%)
MISCELLANEOUS
Brierley Investment Ltd.
9.0% Conv. Sub. Note, 06/30/98 .. 27,900 24,063
--------------
TOTAL LONG-TERM DEBT SECURITIES (1.1%)
(Amortized Cost $7,465,869) 10,652,859
--------------
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES (1.0%)
Industrial Bank of Japan-L.A.
5.73%, due 01/16/97 ............. 10,000,000 9,976,125
--------------
COMMERCIAL PAPER
BHF Delaware Inc.
5.64%, due 03/10/97 ............. 5,000,000 4,950,228
Chase Manhattan Bank
5.59%, due 03/14/97 ............. 5,000,000 4,947,300
Dresdner U.S. Finance, Inc.
5.31%, due 04/10/97 ............. 5,000,000 4,927,263
Enterprise Funding Corp.
5.48%, due 03/03/97 ............. 1,300,000 1,288,391
International Securitization
5.45%, due 03/18/97 ............. 7,000,000 6,922,121
Koch Industries
6.9%, due 01/02/97 .............. 1,800,000 1,799,655
</TABLE>
34
<PAGE>
THE HUDSON RIVER TRUST
GLOBAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
Premium Funding--Series B
5.5%, due 02/18/97 $ 8,241,000 $ 8,180,566
--------------
TOTAL COMMERCIAL PAPER (3.3%) 33,015,524
--------------
TIME DEPOSITS
Bank of Tokyo-
Mitsubishi Bank Ltd., N.Y.
5.5%, due 03/04/97 28,000,000 27,974,910
Toronto Dominion Bank
6.25%, due 01/02/97 10,600,000 10,600,000
--------------
TOTAL TIME DEPOSITS (3.8%) 38,574,910
--------------
TOTAL SHORT-TERM DEBT SECURITIES (8.1%)
(Amortized Cost $81,581,556) 81,566,559
--------------
TOTAL INVESTMENTS (99.4%)
(Cost/Amortized Cost $858,568,339) 991,831,989
OTHER ASSETS
LESS LIABILITIES (0.6%) 5,499,495
--------------
NET ASSETS (100.0%) $997,331,484
==============
</TABLE>
- ------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $45,781,555 or
4.6% of net assets.
Glossary:
ADR--Amercian Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
35
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
ARGENTINA
KTM Motorradholding AG* .......... 2,340 $ 130,751
Quilmes Industrial Quins (ADR) .. 19,000 173,375
---------------
TOTAL ARGENTINA (0.2%) .......... 304,126
---------------
AUSTRALIA
AAPC Ltd. ........................ 100,000 60,409
Aristocrat Leisure Ltd. .......... 160,000 415,866
Boral Ltd. ....................... 50,000 142,278
Brambles Industries Ltd. ......... 20,000 390,271
Broken Hill Proprietary Co. Ltd. 21,000 299,118
Cochlear Ltd. .................... 90,000 256,101
Gio Australia Holdings Ltd.* .... 200,000 511,883
Great Central Mines Ltd.* ........ 100,000 284,556
Guinness Peat Group .............. 13,200 7,554
National Australia Bank Ltd. .... 4,900 57,643
News Corp. Ltd. .................. 5,900 31,139
Oil Search Ltd. .................. 500,000 973,691
Orogen Minerals Ltd. (GDS)*+ .... 60,000 1,758,000
Plutonic Resources Ltd. .......... 20,000 92,997
Qantas Airways Ltd. .............. 70,000 116,843
QBE Insurance Group Ltd. ......... 63,998 337,260
QCT Resources, Inc. .............. 200,000 270,249
Reinsurance Australia Corp.* .... 40,000 155,791
Spectrum Network Systems*+ ...... 600,000 209,840
Western Mining Corp. Ltd. ........ 22,000 138,670
Westralian Sands Ltd. ............ 14,000 44,512
---------------
TOTAL AUSTRALIA (4.3%) .......... 6,554,671
---------------
AUSTRIA
EVN-Energie Versorgung Niederland 800 120,435
OMV AG ........................... 600 67,661
VA Technologie AG* ............... 3,000 470,886
---------------
TOTAL AUSTRIA (0.4%) ............ 658,982
---------------
BELGIUM
Electrabel ....................... 250 59,224
Generale de Banque ............... 120 43,058
Petrofina SA ..................... 110 35,046
Tractebel Investment
International Capital ........... 70 32,625
Tractebel Investment
International Capital--
Warrants* ....................... 70 0
---------------
TOTAL BELGIUM (0.1%) ............ 169,953
---------------
CANADA
Accugraph Corp. (Class A)* ...... 5,000 3,980
Architel Systems Corp.* .......... 30,300 186,989
Istar Internet, Inc.*+ ........... 12,000 40,314
Loblaw Companies Ltd. ............ 20,000 206,682
Prime Resource Group, Inc. ...... 20,000 141,683
Renaissance Energy Ltd.* ......... 2,000 68,139
Rofin-Sinar Technologies, Inc.* . 40,000 470,000
Transat A.T., Inc.* .............. 67,500 554,592
---------------
TOTAL CANADA (1.1%) ............. 1,672,379
---------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
CHILE
Empresas Telex-Chile S.A. (ADR) . 20,000 $ 92,500
Enersis S.A. (ADR) ............... 1,000 27,750
Santa Isabel S.A. (ADR) .......... 17,000 384,625
---------------
TOTAL CHILE (0.3%) .............. 504,875
---------------
DENMARK
Carli Gry International A/S* .... 15,600 747,266
Coloplast A/S B .................. 4,000 455,235
Den Danske Bank .................. 400 32,274
Scandinavian Mobility
International, Inc.+ ............ 6,000 98,861
Tele Danmark AS (B Shares) ...... 1,000 55,206
---------------
TOTAL DENMARK (0.9%) ............ 1,388,842
---------------
FINLAND
KCI Konecranes International* ... 20,000 630,824
Nokia Corp. (ADR) ................ 3,000 172,875
---------------
TOTAL FINLAND (0.5%) ............ 803,699
---------------
FRANCE
Accor SA ......................... 8,000 1,013,010
Alcatel Alsthom .................. 3,500 281,160
Banque Nationale de Paris ........ 700 27,091
Bouygues Offshore SA (ADR)* ..... 40,000 515,000
BSN Gervais Danone ............... 500 69,673
Carrefour ........................ 225 146,401
Cie de St. Gobain ................ 250 35,367
Cie Fin Paribas (Series A) ...... 750 50,723
Cie Generale des Eaux ............ 6,000 743,568
Coflexip (ADR)* .................. 3,000 78,750
Credit Local de France ........... 1,000 87,116
Dauphin O.T.A.* .................. 195 12,102
Elf Aquitaine .................... 2,250 204,814
Havas ............................ 350 24,554
Lafarge Corp. .................... 450 26,999
L'Air Liquide SA ................. 550 85,863
L'Oreal .......................... 495 186,418
Louis Dreyfus Citrus*+ ........... 20,300 665,125
Louis Vuitton Moet Hennessy ..... 500 139,636
Lyonnais des Eaux Dumez .......... 400 37,228
Michelin (CGDE), (Class B) ...... 1,800 97,173
Pernod-Ricard .................... 2,000 110,629
Peugeot SA ....................... 250 28,139
Pinault Printemps ................ 150 59,497
Promodes ......................... 100 28,236
Schneider SA ..................... 800 36,990
Societe Generale ................. 550 59,468
St. Dupont*+ ..................... 34,900 1,183,848
---------------
TOTAL FRANCE (4.0%) ............. 6,034,578
---------------
GERMANY
Adidas AG+ ....................... 3,000 259,293
Allianz AG Holding ............... 150 270,016
Apcoa Parking AG ................. 800 85,781
Bayer AG ......................... 4,500 182,626
B.U.S. Berzelius
Umwelt-Service AG ............... 24,850 306,830
Daimler-Benz AG* ................. 2,000 137,120
36
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Deutsche Bank AG ................. 3,250 $ 151,644
Deutsche Telekom AG (ADR)* ...... 50,000 1,018,750
Dresdner Bank AG ................. 2,850 85,196
Kiekert AG ....................... 1,000 28,789
Linde AG ......................... 50 30,381
Lufthansa AG ..................... 2,000 27,008
Pfeiffer Vacuum Technology (ADR)* 10,000 180,000
RWE AG ........................... 1,850 77,424
SAP AG ........................... 500 68,397
Schering AG ...................... 400 33,767
SGL Carbon AG+ ................... 6,900 870,345
Siemens AG ....................... 2,500 116,032
SKW Trostberg AG ................. 5,000 135,885
Thyssen AG ....................... 150 26,602
Turbon International AG .......... 4,500 116,974
Veba AG .......................... 5,150 296,189
Viag AG .......................... 150 58,731
---------------
TOTAL GERMANY (3.0%) ............ 4,563,780
---------------
GREECE (0.2%)
Hellenic Telecommunication
Organization S.A. ............... 14,070 242,313
---------------
HONG KONG
Aeon Credit Service Co. .......... 924,000 295,675
Associated International Hotels . 10,000 7,499
Cheung Kong Holdings ............. 50,000 444,437
China Apollo Holdings Ltd. ...... 700,000 73,308
China Travel International
Investment Hong Kong Ltd.* ..... 700,000 309,975
First Sign International
Holdings Ltd. ................... 600,000 191,997
Hang Seng Bank ................... 5,000 60,767
HSBC Holdings PLC (H.K.$) ........ 14,200 303,846
Hutchison Whampoa ................ 12,000 94,253
Jardine International
Holdings Ltd. ................... 32,000 42,821
JCG Holdings ..................... 250,000 244,036
Television Broadcasts ............ 37,000 147,818
---------------
TOTAL HONG KONG (1.5%) .......... 2,216,432
---------------
INDONESIA
PT Bunas Finance Indonesia* ..... 93,000 98,434
PT Citatah* ...................... 430,000 300,381
PT Indonesian Satellite (ADR) ... 10,000 273,750
PT Kalbe Farma* .................. 350,000 400,085
PT Sekar Bumi .................... 510,000 323,878
---------------
TOTAL INDONESIA (0.9%) .......... 1,396,528
---------------
IRELAND
Crean (James) PLC--Units ......... 5,000 15,681
Fyffes PLC ....................... 600,000 1,118,886
Irish Continental Group .......... 20,000 150,032
Irish Life PLC ................... 50,000 229,711
Jurys Hotel Group PLC ............ 62,000 289,046
---------------
TOTAL IRELAND (1.2%) ............ 1,803,356
---------------
ISRAEL
Home Centers Ltd.* ............... 15,400 71,225
Tadiran Telecommunications Ltd. . 20,000 447,500
---------------
TOTAL ISRAEL (0.3%) ............. 518,725
---------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
ITALY
Assicurazioni Generali Spa ...... 5,500 $ 104,244
Banca Commerciale Italiana Spa .. 10,000 18,195
Danieli & Co.* ................... 24,800 204,368
Editorale La Repubblica Spa* .... 40,000 55,509
ENI Spa .......................... 30,000 153,968
ENI Spa (ADR) .................... 6,000 309,750
Fiat Spa ......................... 20,000 60,519
Istituto Bancario San Paolo di
Torino .......................... 5,000 30,655
Istituto Mobilare Italiano ...... 2,500 21,426
Istituto Naz Delle Assicurazioni 22,500 29,310
Mediaset Spa* .................... 260,000 1,199,836
Mediolanum Spa*+ ................. 36,000 340,807
Rinascente ....................... 10,000 58,014
Rinascente--Warrants* ............ 500 221
Simint Spa* ...................... 100,000 372,477
Telecom Italia Mobile Spa ........ 40,000 101,129
Telecom Italia Spa ............... 5,000 12,987
Unicem Spa* ...................... 16,000 104,425
---------------
TOTAL ITALY (2.1%) .............. 3,177,840
---------------
JAPAN
Ajinomoto Co., Inc. .............. 3,000 30,567
Akita Bank ....................... 20,000 124,342
Asahi Bank Ltd. .................. 40,000 355,755
Asahi Chemical Industry Co. ..... 6,000 33,987
Asahi Diamond Industry Co. Ltd. . 22,000 199,465
Asahi Glass Co. Ltd. ............. 16,000 150,591
Asatsu, Inc. ..................... 14,000 444,867
Bank of Tokyo-Mitsubishi Bank ... 48,000 891,115
Bridgestone Corp. ................ 4,000 75,987
Bridgestone Metalpha Corp. ...... 12,000 102,582
Canon, Inc. ...................... 10,000 221,052
Capcom Co. Ltd. .................. 8,000 163,716
Chubu Sekiwa Real Estate ......... 5,000 64,330
Credit Saison Co. ................ 44,000 984,026
Daibiru Corp. .................... 21,000 194,025
Dai-Ichi Corp. ................... 6,000 121,233
Dai-Ichi Kangyo Bank ............. 12,000 173,042
Daimon Co. Ltd. .................. 9,000 144,547
Dainippon Ink & Chemical, Inc. .. 27,000 100,017
Dainippon Printing Co. Ltd. ..... 3,000 52,586
Daiseki Co. Ltd. ................. 6,000 142,993
Daiwa House Industry Co. ......... 2,000 25,732
DDI Corp. ........................ 80 529,143
Doshisha Co. ..................... 4,000 65,625
Eiden Sakakiya Co. Ltd. .......... 18,000 181,850
Enix Corp.* ...................... 9,400 212,659
Enshu* ........................... 42,000 126,207
Familymart Co. ................... 3,500 139,927
Fanuc Co. ........................ 900 28,832
FCC Co. Ltd. ..................... 10,000 271,997
Fuji Bank Ltd. ................... 11,000 160,522
Fuji Photo Film Co. .............. 1,000 32,985
Fuji Soft Corp. .................. 7,600 232,312
Fujikura Ltd. .................... 48,000 384,630
Fujimi, Inc. ..................... 5,500 296,347
Hachijuni Bank ................... 9,000 85,485
Hankyu Corp. ..................... 25,000 124,126
37
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Hirose Electric Co. Ltd. ......... 11,000 $637,337
Hitachi Ltd. ..................... 16,000 149,210
Hitachi Metals Ltd. .............. 28,000 222,675
Hitachi Plant Engineering &
Construction Co. ................ 24,000 142,164
Hokushin ......................... 600 4,072
Homac Corp. ...................... 7,500 135,999
Home Wide Corp., Inc. ............ 15,000 134,703
Honda Motor Corp. ................ 22,000 628,789
Hoya Corp. ....................... 20,000 785,770
Industrial Bank of Japan ......... 9,720 168,700
Isetan & Co. ..................... 46,000 595,803
Ishihara Sangyo Ltd.* ............ 100,000 241,775
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 60,000 266,816
Isuzu Motors Ltd. ................ 40,000 177,878
Ito Yokado Co. Ltd. .............. 2,000 87,039
Japan Airport Terminal Co. ...... 32,200 394,819
Japan Industrial Land Development 8,000 151,973
Kajima Corp. ..................... 16,000 114,394
Kaneshita Construction Co. ...... 6,000 56,990
KAO Corp. ........................ 3,000 34,971
Kawasaki Heavy Industries ........ 150,000 620,413
Kawasaki Kisen* .................. 20,000 45,592
Kawasaki Steel ................... 13,000 37,380
Keyence Corp. .................... 4,000 493,912
Kikuchi Co. Ltd. ................. 14,000 181,331
King Co.* ........................ 38,000 170,952
Kinki Nippon Railroad Co. ........ 7,000 43,701
Kirin Brewery Co. ................ 4,000 39,375
Koa Fire & Marine ................ 22,000 106,761
Komatsu Ltd. ..................... 4,000 32,812
Kubota Corp. ..................... 6,000 28,961
Mabuchi Motor Co. ................ 10,000 503,411
Makino Milling Machine Co. ...... 30,000 191,434
Mars Engineering Corp.* .......... 6,000 152,837
Matsuda Sangyo Co. Ltd. .......... 8,000 206,545
Matsushita Electric
Industrial Co. .................. 11,000 179,518
Matsuyadenki Co. Industries ..... 6,000 56,472
Meitec Corp. ..................... 39,000 744,236
Minebea Co. ...................... 50,000 417,926
Ministop Co. Ltd. ................ 4,700 114,852
Misawa Ceramic Corp. ............. 34,000 184,958
Mitsubishi Chemical Corp. ........ 50,000 161,903
Mitsubishi Corp. ................. 44,000 455,919
Mitsubishi Estate Co. ............ 46,000 472,671
Mitsubishi Heavy Industries Ltd. 100,000 794,405
Mitsubishi Materials Corp. ...... 6,000 24,247
Mitsubishi Trust & Banking Corp. 20,000 267,680
Mitsui Home Co. Ltd. ............. 28,000 345,739
Mitsui & Co. ..................... 6,000 48,700
Murata Manufacturing Co. Ltd. ... 1,000 33,244
Namco Ltd. ....................... 20,000 613,073
Namura Shipbuilding Co. .......... 26,000 85,312
Nanno Construction Co. Ltd. ..... 15,000 89,371
NEC Corp. ........................ 6,000 72,533
NGK Spark Plug Co. ............... 32,000 350,920
Nichiei Co. Ltd. ................. 12,000 881,789
Nichiha Corp. .................... 38,000 672,653
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Nintendo Co. ..................... 12,000 $858,993
Nippon Denwa Shisetsu* ........... 30,000 277,178
Nippon Electric Glass ............ 20,000 307,400
Nippon Express Co. Ltd. .......... 5,000 34,280
Nippon Kanzai Co. ................ 1,000 25,905
Nippon Paper Industries Co. ..... 18,000 83,931
Nippon Steel Corp. ............... 27,000 79,734
Nippon Television Network Corp. . 2,860 864,347
Nippon Yusen K.K. ................ 4,000 18,099
Nippondenso Co. Ltd. ............. 4,000 96,365
Nireco ........................... 15,000 170,970
Nissen Corp. Ltd. ................ 2,300 16,087
Nitta Corp. ...................... 27,000 338,054
Nitto Kohki Co. Ltd. ............. 15,000 537,518
Nomura Securities Co. ............ 8,000 120,197
Noritsu Koki Co. Ltd. ............ 18,000 847,077
Ohmoto Gumi Co. Ltd. ............. 11,000 157,672
Oie Sangyo Co. Ltd. .............. 12,000 155,427
Oji Paper Co. Ltd. ............... 14,000 88,611
Omron Corp. ...................... 44,000 828,253
Oriental Construction Co. ........ 11,000 141,525
Paris Miki, Inc. ................. 13,500 487,264
Promise Co. Ltd. ................. 9,000 442,967
PS Corp. ......................... 18,900 316,605
Renown, Inc.* .................... 70,000 186,771
Ricoh Elemex Corp. ............... 8,000 111,907
Rohm Co. Ltd. .................... 7,000 459,373
Rohto Pharmaceutical Co. ......... 33,000 319,143
Royal Ltd. ....................... 12,000 274,588
Santen Pharmaceutical Co. ........ 34,000 704,602
Sanyo Chemicals .................. 20,000 153,700
Sanyo Electric Co. Ltd. .......... 60,000 248,683
Sanyo Engineering & Construction,
Inc. ............................ 27,000 240,135
Sanyo Pax Co. Ltd. ............... 23,000 399,188
Sanyo Shinpan Finance Co. Ltd. .. 6,000 375,615
Sato Corp. ....................... 26,000 507,383
Sekisui Chemical Co. Ltd. ........ 22,000 222,261
Sekisui House Ltd. ............... 3,000 30,567
Seven-Eleven Japan Ltd. .......... 7,000 409,809
Shaddy Co. Ltd. .................. 2,000 31,949
Sharp Corp. ...................... 12,000 170,970
Shimizu Corp. .................... 3,000 22,407
Shin-Etsu Chemical Ltd. .......... 5,000 91,097
Shiseido Co. ..................... 32,000 370,262
Shizuoka Bank .................... 30,000 318,625
Sho Bond Construction ............ 28,000 754,339
SMC Corp. ........................ 10,000 672,653
Sodick Co.* ...................... 78,000 646,576
Sony Corp. ....................... 1,000 65,538
Suido Kiko Kaisha ................ 8,000 56,645
Sumitomo Bank Ltd. ............... 12,000 173,042
Sumitomo Chemical Co. Ltd. ...... 7,000 27,744
Sumitomo Forestry Co. ............ 6,000 73,051
Sumitomo Metal Industries ........ 200,000 492,185
Taisei Corp. ..................... 4,000 20,724
Taisho Pharmaceutical Co. ........ 22,000 518,608
Takara Printing Co. .............. 19,000 154,218
Takeda Chemical Industries ...... 8,000 167,861
Takefuji Corp.* .................. 4,000 288,403
Takihyo Co. Ltd. ................. 21,000 253,864
38
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
TDK Corp. ........................ 8,000 $ 521,544
Toda Construction ................ 18,000 136,776
Toei Co. ......................... 50,000 322,079
Toho Bank ........................ 15,000 90,925
Tokio Marine & Fire
Insurance Co. ................... 6,000 56,472
Tokyo Broadcasting System ........ 41,000 626,630
Tokyo Electric Power Co., Inc. .. 7,000 153,527
Tokyo Electron ................... 10,000 306,537
Tokyu Corp. ...................... 5,000 28,409
Toray Industries, Inc. ........... 6,000 37,043
Toso Co. Ltd. .................... 16,000 248,683
Tostem Corp. ..................... 1,000 27,631
Toyoda Gosei* .................... 20,000 138,675
Toyota Motor Corp. ............... 11,000 316,294
Warabeya Nichiyo Co. Ltd.* ...... 12,000 102,582
Wesco, Inc. ...................... 5,200 65,107
Xebio Co. ........................ 6,000 178,741
Yamaichi Securities .............. 40,000 177,878
Yamanouchi Pharmaceutical ........ 32,000 657,629
Yamato Transport ................. 65,000 673,516
Yaskawa Electric Corp.* .......... 48,000 166,618
Yokogawa Electric Corp. .......... 106,000 915,290
---------------
TOTAL JAPAN (30.3%) ............. 45,982,150
---------------
MALAYSIA
Guinness Anchor BHD .............. 30,000 73,649
Hong Leong Bank BHD .............. 50,000 174,223
IOI Corp. BHD .................... 250,000 384,082
Kim Hin Industry BHD ............. 100,000 167,888
Lingkaran Trans Kota Holdings
BHD*+ ........................... 152,000 312,968
Malayan Banking Berhad ........... 24,000 266,086
Mancon BHD* ...................... 76,666 233,747
Metacorp Berhard ................. 120,000 306,474
Pacific & Orient BHD ............. 80,000 193,229
Resorts World BHD ................ 20,000 91,071
RJ Reynolds BHD .................. 200,000 542,467
Sap Holdings* .................... 60,000 287,468
Sime Darby BHD ................... 150,000 590,972
Sriwani Holdings BHD ............. 180,000 484,657
Star Publications BHD ............ 30,000 118,194
---------------
TOTAL MALAYSIA (2.8%) ........... 4,227,175
---------------
MEXICO
Elamex S.A. de C.V.* ............. 33,300 320,513
Grupo Elektra S.A. de C.V.* ..... 60,000 471,799
Panamerican Beverages ............ 5,000 234,375
---------------
TOTAL MEXICO (0.7%) ............. 1,026,687
---------------
NETHERLANDS
ABN Amro Holdings ................ 1,456 94,672
Aegon N.V. ....................... 8,000 509,531
Akzo Nobel N.V. .................. 330 45,053
AMEV N.V. ........................ 10,000 349,984
Content Beheer N.V.*+ ............ 30,000 1,145,403
Elsevier N.V. .................... 17,310 292,397
Goudsmit (Eduard) N.V.* .......... 6,000 534,521
Gucci Group N.V. ................. 5,000 319,375
Heineken N.V. .................... 233 41,218
Hunter Douglas N.V. .............. 3,000 202,181
IHC Caland N.V. .................. 4,000 228,386
ING Groep N.V. ................... 3,392 122,050
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
KLM .............................. 2,000 $ 56,229
Kon. PTT Nederland+ .............. 25,000 953,056
Koninklijke Nedlloyd Groep N.V. . 20,000 548,405
Nutrica Verenigde Bedrijven N.V.+ 1,000 151,853
Royal Dutch Petroleum Co. ........ 2,487 435,781
Toolex Alpha N.V.* ............... 15,000 159,375
Unilever N.V. CVA ................ 742 131,175
Vendex International N.V. ........ 3,600 153,901
Ver Ned Uitgeversbedr
Ver Bezit N.V. .................. 5,000 104,417
---------------
TOTAL NETHERLANDS (4.3%) ........ 6,578,963
---------------
NEW ZEALAND
Lion Nathan Ltd. ................. 15,000 35,948
Tourism Holdings Ltd. ............ 15,000 28,631
Warehouse Group Ltd.* ............ 120,000 288,436
---------------
TOTAL NEW ZEALAND (0.2%) ........ 353,015
---------------
NORWAY
Alvern Norway ASA* ............... 110,000 1,468,453
Hafslund Nycomed ASA
(B Shares) ...................... 5,000 34,316
Merkantildata A/S ................ 1,000 18,375
Norsk Hydro AS ................... 1,100 59,602
Nycomed ASA (B Shares)* .......... 5,000 76,956
Seatex Garex ASA* ................ 100,000 543,406
Tomra Systems .................... 58,000 906,357
Union Bank of Norway ............. 12,000 376,929
---------------
TOTAL NORWAY (2.3%) ............. 3,484,394
---------------
PANAMA (0.3%)
Banco Latinoamericano de
Exportaciones, S.A. (E Shares) . 10,000 507,500
---------------
PERU
Banco Wiese Limitado (ADR) ...... 10,000 58,750
Telefonica del Peru S.A. (ADR) .. 60,000 1,132,500
---------------
TOTAL PERU (0.8%) ............... 1,191,250
---------------
PORTUGAL
Banco Comercial Portugues SA .... 32,700 431,420
Telecel-Comunicacoes
Pessoai SA* ..................... 15,000 958,044
---------------
TOTAL PORTUGAL (0.9%) ........... 1,389,464
---------------
SINGAPORE
City Developments Ltd. ........... 65,000 585,293
Comfort Group Ltd. ............... 18,000 15,951
Fraser & Neave ................... 50,000 514,543
GP Batteries International Ltd. .. 30,000 99,600
GP Batteries International Ltd.+ . 110,000 365,200
Great Eastern Life
Assurance Co.* .................. 7,000 120,560
Overseas Union Bank Ltd. ......... 20,000 154,363
Singapore Airlines Ltd. .......... 20,000 181,519
SM Summit Holdings Ltd.* ......... 30,000 10,076
---------------
TOTAL SINGAPORE (1.4%) .......... 2,047,105
---------------
SOUTH KOREA
Korea Electric Power (ADR) ...... 10,000 205,000
Korea Mobile Telecommunications
Corp. (ADR) ..................... 63,860 822,198
---------------
TOTAL SOUTH KOREA (0.7%) ........ 1,027,198
---------------
39
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
SPAIN
Banco Bilbao Vizcaya SA .......... 1,627 $ 87,916
Banco de Valencia ................ 30,000 586,224
Banco Popular .................... 200 39,313
Banco Santander SA ............... 1,156 74,050
Centros Comerciales Pryca SA .... 3,000 63,594
Construcciones Auxiliar Ferro ... 500 18,963
Corporacion Mapfre Cia
Inter SA ........................ 10,000 609,735
Cubiertas Y Mzov SA .............. 2,000 154,168
El Aguila SA* .................... 19,000 91,244
Empresa Nacional de
Celulosa SA* .................... 5,000 59,933
Endesa ........................... 1,122 79,915
Gas Y Electridad SA (Series 2) .. 16,000 1,023,676
General de Aguas d'Barcelona .... 6,000 249,752
Hidroelectrica del Cantabrico ... 10,000 381,951
Iberdrola II ..................... 10,000 141,835
Iberdrola SA ..................... 25,668 364,061
Portland Valderrivas SA* ......... 5,424 365,423
Prosegur Compania
Seguridad SA .................... 4,315 39,914
Repsol SA ........................ 4,392 168,599
Tabacalera SA .................... 10,000 430,900
Telefonica de Espana SA .......... 12,358 287,210
Viscofan Envoltura ............... 2,500 36,615
---------------
TOTAL SPAIN (3.5%) .............. 5,354,991
---------------
SWEDEN
Astra AB (A Shares) .............. 2,900 143,316
Autoliv AB ....................... 3,000 131,541
BT Industries AB+ ................ 10,000 186,239
Dahl International AB*+ .......... 33,000 694,437
Ericsson (L.M.) Telephone Co.
(Series B) ...................... 6,400 198,029
Kalmar Industries AB+ ............ 4,000 61,591
Meda AB* ......................... 8,100 153,229
NetCom Systems AB
(B Shares)* ..................... 26,400 427,793
Scandic Hotels AB*+ .............. 71,600 1,196,975
Sparbanken Sverige AB
(A Shares) ...................... 16,000 274,519
Swedish Match Co. AB* ............ 200,000 703,896
---------------
TOTAL SWEDEN (2.8%) ............. 4,171,565
---------------
SWITZERLAND
ABB AG ........................... 210 261,225
CS Holdings ...................... 1,250 128,409
Nestle AG ........................ 180 193,246
Novartis AG* ..................... 528 604,725
Roche Holdings AG Genusscheine .. 52 404,617
Schweizerische Bankgesellschaft . 120 105,163
Schweizerische Ruckversicherungs
Gesellschaft .................... 120 128,114
Tag Heuer International SA (ADR)* 30,200 486,975
---------------
TOTAL SWITZERLAND (1.5%) ........ 2,312,474
---------------
THAILAND
CMIC Finance & Securities
Co. Ltd. ........................ 51,000 73,579
Nation Publishing Group
Co. Ltd. ........................ 130,000 380,176
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Nawarat Patanakarn Public Co. ... 30,000 $ 35,093
Siam Makro Public Co. Ltd. ...... 50,000 210,559
Thai Engine Manufacturing Public
Co. Ltd.* ....................... 70,000 543,165
---------------
TOTAL THAILAND (0.8%) ........... 1,242,572
---------------
UNITED KINGDOM
Barclays Bank .................... 20,000 342,791
Bass Breweries ................... 5,132 72,179
BAT Industries ................... 60,000 497,998
BOC Group Co. PLC ................ 2,591 38,772
Boots Co. PLC .................... 5,806 59,926
BPB PLC .......................... 70,000 459,882
British Aerospace ................ 2,120 46,487
British Airport Author PLC ...... 100,000 833,423
British Airways .................. 38,000 394,167
British Energy PLC* .............. 251,400 633,090
British Gas ...................... 25,021 96,229
British Petroleum Co. PLC ........ 29,367 352,412
British Sky Broadcasting
Group PLC ....................... 8,097 72,406
British Steel .................... 20,000 54,991
British Telecommunications ...... 35,150 237,550
BTR PLC .......................... 21,470 104,456
Cable & Wireless ................. 12,409 103,207
Cadbury Schweppes PLC ............ 5,961 50,293
Carlton Communications PLC ...... 20,000 176,278
Commercial Union PLC ............. 2,801 32,797
Cordiant PLC* .................... 170,000 299,964
Dixons Group PLC* ................ 120,000 1,115,228
Filtronic Comtek PLC ............. 180,000 1,137,841
General Accident ................. 2,904 38,132
General Electric Co. PLC ......... 13,890 90,897
GKN PLC .......................... 2,089 35,822
Glaxo Wellcome PLC ............... 23,220 377,097
Granada Group PLC ................ 3,225 47,596
Grand Metropolitan ............... 24,736 194,502
Great Universal Stores ........... 3,970 41,622
Guinness PLC ..................... 80,571 631,470
Hanson PLC ....................... 44,569 62,226
Harvey Nichols Group PLC*+ ...... 70,000 411,315
House of Fraser PLC .............. 150,000 394,441
HSBC Holdings PLC ................ 10,000 217,906
Imperial Chemical Industries .... 3,109 40,931
Imperial Tobacco PLC* ............ 49,999 322,913
Invesco .......................... 100,000 444,549
Invesco Funding LLC* ............. 20,000 88,910
Kingfisher PLC ................... 4,084 44,182
Land Securities PLC .............. 3,207 40,875
Legal & General Group PLC ........ 7,475 47,636
Lloyds TSB Group PLC ............. 34,379 253,542
Marks & Spencer .................. 17,109 143,909
McBride PLC ...................... 20,000 46,596
Millennium Chemicals, Inc.* ..... 636 11,289
Mirror Group Newspapers PLC ..... 40,000 147,669
Misys PLC ........................ 12,000 229,521
National Grid Group PLC .......... 280,754 940,276
National Power PLC ............... 100,000 837,706
Peninsular & Oriental Steam
Navigation Co. .................. 3,314 33,496
Powerscreen International ........ 40,000 387,161
Prudential Corp. ................. 8,019 67,519
40
<PAGE>
THE HUDSON RIVER TRUST
INTERNATIONAL PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Rank Organisation PLC ............ 12,574 $ 93,809
Reed International ............... 13,000 245,307
Rentokil Group PLC ............... 70,000 526,436
Reuters Holdings ................. 7,496 96,503
RTZ Corp. ........................ 5,510 88,398
Safeway PLC ...................... 6,932 47,976
Scottish Power PLC ............... 5,263 31,736
Smith & Nephew PLC* .............. 100,000 310,071
Smithkline Beecham PLC ........... 40,000 554,702
Tate & Lyle PLC .................. 12,000 97,441
Tesco PLC ........................ 12,625 76,671
Thistle Hotels PLC* .............. 94,000 292,272
Thorn PLC* ....................... 120,000 517,014
Tomkins PLC ...................... 25,000 114,992
Unilever ......................... 4,907 119,074
United Utilities PLC ............. 2,901 30,862
Vodafone Group ................... 150,000 633,419
WPP Group PLC .................... 60,000 261,076
Zeneca Group PLC ................. 10,336 291,716
---------------
TOTAL UNITED KINGDOM (12.1%) ... 18,313,548
---------------
TOTAL COMMON STOCKS
AND OTHER INVESTMENTS (86.4%)
(Cost $126,187,152) ............. 131,221,130
---------------
PREFERRED STOCKS:
GERMANY
Fielmann AG ...................... 9,000 283,663
Fresenius AG* .................... 2,000 415,258
---------------
TOTAL GERMANY (0.5%) ............ 698,921
---------------
FINLAND (0.0%)
Nokia Oy Cum ..................... 1,400 81,250
---------------
TOTAL PREFERRED STOCKS (0.5%)
(Cost $868,953) ................. 780,171
---------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
SPAIN (0.0%)
Corporacion Mapfre
8.5% Conv., 02/27/99 .......Peseta 2,520,000 $ 19,425
-------------
TOTAL LONG-TERM DEBT SECURITIES (0.0%)
(Amortized Cost $20,681) .................... 19,425
-------------
SHORT-TERM DEBT SECURITIES:
U.S. GOVERNMENT AGENCIES
Federal Home Loan
Mortgage Corp.
5.7%, due 01/02/97 ........... $12,300,000 12,298,053
Federal National Mortgage
Association
5.45%, due 02/13/97 .......... 5,000,000 5,000,000
-------------
TOTAL U.S. GOVERNMENT
AGENCIES (11.4%) ............ 17,298,053
-------------
TOTAL SHORT-TERM DEBT SECURITIES (11.4%)
(Amortized Cost $17,298,053) ................ 17,298,053
-------------
TOTAL INVESTMENTS (98.3%)
(Cost/Amortized $144,374,839) 149,318,779
OTHER ASSETS
LESS LIABILITIES (1.7%) ..... 2,588,056
-------------
NET ASSETS (100.0%) ........... $151,906,835
=============
</TABLE>
- ------------------------------------------------------------
MARKET SECTOR DIVERSIFICATION
As a Percentage of Total Equity Investments
Basic Materials ................................... 4.2%
Business Services ................................. 10.8
Capital Goods ..................................... 13.2
Consumer Cyclicals ................................ 21.0
Consumer Non-Cyclicals ............................ 13.2
Credit Sensitive .................................. 21.7
Energy ............................................ 4.1
Technology ........................................ 10.0
Diversified ....................................... 1.8
------
100.0%
======
- --------------
* Non-income producing.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $10,905,470 or
7.2% of net assets.
Glossary:
ADR--American Depository Receipt
GDS--Global Depository Share
See Notes to Financial Statements.
41
<PAGE>
THE HUDSON RIVER TRUST
AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
BASIC MATERIALS
METALS & MINING (2.0%)
Cyprus Amax Minerals Co. ........ 907,300 $ 21,208,138
Kaiser Aluminum Corp.* .......... 780,900 9,077,962
Titanium Metals Corp.* .......... 1,392,200 45,768,575
--------------
76,054,675
--------------
CHEMICALS--SPECIALTY (4.4%)
Crompton & Knowles Corp. ........ 3,404,400 65,534,700
Cytec Industries, Inc.* ......... 2,087,500 84,804,688
IDEXX Laboratories, Inc.* ...... 549,700 19,789,200
--------------
170,128,588
--------------
STEEL (2.2%)
AK Steel Holding Corp.++ ........ 1,326,300 52,554,637
Worthington Industries, Inc. ... 1,949,700 35,338,313
--------------
87,892,950
--------------
TOTAL BASIC MATERIALS (8.6%) .. 334,076,213
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (6.7%)
Philip Environmental, Inc.* .... 1,625,000 23,562,500
Republic Industries, Inc.* ..... 2,694,000 84,019,125
USA Waste Services, Inc.* ...... 3,421,900 109,073,062
Wheelabrator Technologies, Inc. 2,597,800 42,214,250
--------------
258,868,937
--------------
PRINTING, PUBLISHING &
BROADCASTING (4.0%)
Comcast Corp. (Class A) SPL .... 5,147,100 91,682,719
Evergreen Media Corp.
(Class A) *++ .................. 2,511,300 62,782,500
--------------
154,465,219
--------------
TRUCKING, SHIPPING (1.5%)
Xtra Corp.++ .................... 1,376,400 59,701,350
--------------
TOTAL BUSINESS SERVICES (12.2%) 473,035,506
--------------
CONSUMER CYCLICALS
AIRLINES (3.9%)
America West Airlines, Inc.
(Class B)* ..................... 2,056,800 32,651,700
Continental Airlines, Inc.
(Class B)* ..................... 1,684,500 47,587,125
Delta Air Lines, Inc. ........... 569,700 40,377,488
Northwest Airlines Corp.
(Class A)* ..................... 788,700 30,857,888
--------------
151,474,201
--------------
APPAREL, TEXTILE (8.5%)
Tommy Hilfiger Corp.* ........... 1,127,300 54,110,400
Mohawk Industries, Inc.* ........ 1,230,400 27,068,800
Nine West Group, Inc.*++ ........ 3,112,800 144,356,100
Polymer Group, Inc.*++ .......... 2,534,600 35,167,575
Shaw Industries, Inc. ........... 2,542,100 29,869,675
UNIFI, Inc. ..................... 1,223,900 39,317,787
--------------
329,890,337
--------------
FOOD SERVICES, LODGING (6.4%)
Choice Hotels International,
Inc.* .......................... 1,742,400 30,709,800
Doubletree Corp.* ............... 590,700 26,581,500
Extended Stay America, Inc.* ... 1,573,600 31,668,700
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Host Marriott Corp.* ............ 7,650,400 $ 122,406,400
La Quinta Motor Inns, Inc. ..... 649,300 12,417,862
Studio Plus Hotels, Inc.* ...... 478,600 7,537,950
Suburban Lodges of America*++ .. 942,400 15,078,400
--------------
246,400,612
--------------
HOUSEHOLD FURNITURE,
APPLIANCES (2.1%)
Industrie Natuzzi (ADR) ......... 2,169,800 49,905,400
Sunbeam Corp. ................... 1,175,800 30,276,850
--------------
80,182,250
--------------
LEISURE RELATED (5.6%)
Electronic Arts* ................ 762,000 22,812,375
Harman International Industries,
Inc. ++ ........................ 1,497,200 83,281,750
Hasbro, Inc. .................... 1,938,600 75,363,075
ITT Corp.* ...................... 814,500 35,328,938
--------------
216,786,138
--------------
RETAIL--GENERAL (3.1%)
AutoZone, Inc.* ................. 1,460,200 40,155,500
Circuit City Stores, Inc. ...... 2,166,900 65,277,862
Pep Boys Manny Moe & Jack ...... 515,800 15,860,850
--------------
121,294,212
--------------
TOTAL CONSUMER CYCLICALS (29.6%) 1,146,027,750
--------------
CONSUMER NONCYCLICALS
DRUGS (3.8%)
Biogen, Inc.* ................... 1,651,000 63,976,250
Centocor, Inc.* ................. 1,847,400 66,044,550
MedImmune, Inc.* ................ 1,012,100 17,205,700
--------------
147,226,500
--------------
HOSPITAL SUPPLIES & SERVICES (7.9%)
Healthsouth Corp.* .............. 3,124,375 120,678,984
Health Management Associates,
Inc. (Class A)* ................ 1,510,900 33,995,250
Manor Care, Inc. ................ 1,742,400 47,044,800
Saint Jude Medical, Inc.* ...... 2,436,350 103,849,419
--------------
305,568,453
--------------
SOAPS & TOILETRIES (1.8%)
Dial Corp. ...................... 2,653,800 39,143,550
Estee Lauder Cos. (Class A) .... 587,000 29,863,625
--------------
69,007,175
--------------
TOTAL CONSUMER NONCYCLICALS (13.5%) 521,802,128
--------------
CREDIT SENSITIVE
FINANCIAL SERVICES (1.0%)
Aames Financial Corp.++ ......... 1,112,400 39,907,350
--------------
INSURANCE (3.1%)
CNA Financial Corp.* ............ 1,133,100 121,241,700
--------------
UTILITY--TELEPHONE (2.8%)
Telephone & Data Systems, Inc.++ 2,883,000 104,508,750
--------------
TOTAL CREDIT SENSITIVE (6.9%) . 265,657,800
--------------
ENERGY
OIL--DOMESTIC (4.8%)
Oryx Energy Co.* ................ 2,098,400 51,935,400
Ultramar Diamond Shamrock Corp.
++ ............................. 4,184,622 132,338,671
--------------
184,274,071
--------------
42
<PAGE>
THE HUDSON RIVER TRUST
AGGRESSIVE STOCK PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
OIL--SUPPLIES & CONSTRUCTION (4.6%)
Diamond Offshore Drilling, Inc.* 1,609,184 $ 91,723,488
Rowan Cos., Inc.* ............... 3,785,500 85,646,937
--------------
177,370,425
--------------
TOTAL ENERGY (9.4%) ............ 361,644,496
--------------
TECHNOLOGY
ELECTRONICS (3.0%)
American Power Conversion Corp.* 178,000 4,850,500
DT Industries, Inc. ++ .......... 581,900 20,366,500
Pairgain Technologies, Inc.* ... 183,400 5,582,238
Parametric Technology Corp.* ... 1,351,600 69,438,450
Xylan Corp.* .................... 534,100 15,088,325
--------------
115,326,013
--------------
OFFICE EQUIPMENT (2.0%)
Read-Rite Corp.* ................ 876,100 22,121,525
Storage Technology Corp.* ...... 739,800 35,232,975
Symantec Corp.* ................. 1,490,600 21,613,700
--------------
78,968,200
--------------
OFFICE EQUIPMENT SERVICES (4.1%)
Baan Co. N.V.* .................. 890,000 30,927,500
Fore Systems, Inc.* ............. 1,112,500 36,573,438
Informix Corp.* ................. 1,411,300 28,755,237
Premisys Communications, Inc.* . 872,500 29,446,875
Sterling Commerce, Inc.* ........ 893,448 31,494,042
--------------
157,197,092
--------------
TELECOMMUNICATIONS (4.7%)
American Satellite
Network--Warrants* ............. 49,450 0
Andrew Corp.* ................... 701,200 37,207,425
Glenayre Technologies, Inc.* ... 1,297,400 27,975,188
Millicom International Cellular
S.A.* .......................... 1,314,415 42,225,582
Tellabs, Inc.* .................. 648,400 24,396,050
United States Cellular Corp.* .. 1,033,100 28,797,662
Vanguard Cellular Systems, Inc.
(Class A)* ..................... 1,132,450 17,836,087
--------------
178,437,994
--------------
TOTAL TECHNOLOGY (13.8%) ...... 529,929,299
--------------
TOTAL COMMON STOCKS
AND WARRANTS (94.0%)
(Cost $3,138,615,856) .......... 3,632,173,192
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ----------------------------------------------------------------
<S> <C> <C>
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES
Bank of Tokyo
5.52%, due 02/10/97 .......... $14,000,000 $ 13,914,133
Canadian Imperial Bank of
Commerce
5.38%, due 03/27/97 .......... 12,000,000 11,850,400
Industrial Bank of Japan-L.A.
5.73%, due 01/16/97 .......... 10,000,000 9,976,125
-----------------
TOTAL BANKERS' ACCEPTANCES (0.9%) 35,740,658
-----------------
CERTIFICATES OF DEPOSIT
Canadian Imperial Bank of
Commerce
5.44%, due 03/31/97 .......... 25,000,000 25,009,103
Sumitomo Bank Ltd.
5.51%, due 01/13/97 .......... 5,000,000 4,999,736
-----------------
TOTAL CERTIFICATES OF DEPOSIT (0.8%) 30,008,839
-----------------
COMMERCIAL PAPER
ASCC Commercial Paper
5.33%, due 03/18/97 .......... 11,300,000 11,174,280
Centauri Corp.
5.4%, due 02/06/97 ........... 9,000,000 8,951,400
Corporate Asset Securitization
Australia
5.55%, due 03/14/97 .......... 9,000,000 8,905,140
Dresdner U.S. Finance, Inc.
5.31%, due 04/10/97 .......... 5,000,000 4,927,263
Eureka Corp.
5.42%, due 02/19/97 .......... 10,000,000 9,926,228
Gotham Funding Corp.
5.45%, due 03/12/97 .......... 10,000,000 9,897,528
Jefferson Smurfit Corp.
5.45%, due 03/04/97 .......... 4,000,000 3,963,696
Morgan Stanley Group, Inc.
6.79%, due 01/02/97 .......... 77,000,000 76,985,477
Sigma Finance Corp.
5.36%, due 04/28/97 .......... 10,000,000 9,829,050
-----------------
TOTAL COMMERCIAL PAPER (3.7%) 144,560,062
-----------------
TIME DEPOSITS
Canadian Imperial Bank of
Commerce
6.0%, due 01/02/97 ........... 14,000,000 14,000,000
Sumitomo Bank Ltd.
6.5%, due 01/02/97 ........... 34,000,000 34,000,000
-----------------
TOTAL TIME DEPOSITS (1.2%) .. 48,000,000
-----------------
TOTAL SHORT-TERM DEBT SECURITIES (6.6%)
(Amortized Cost $258,282,887) 258,309,559
-----------------
TOTAL INVESTMENTS (100.6%)
(Cost/Amortized Cost $3,396,898,743) 3,890,482,751
OTHER ASSETS
LESS LIABILITIES (-0.6%) .... (24,613,334)
-----------------
NET ASSETS (100.0%) ........... $3,865,869,417
=================
</TABLE>
- ------------
* Non-income producing.
++ Affiliated company as defined under the Investment Company Act of 1940 (see
Note 6).
Glossary:
ADR--American Depository Receipt
See Notes to Financial Statements.
43
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
BASIC MATERIALS
CHEMICALS (0.3%)
Akzo Nobel N.V. ................. 1,505 $ 205,467
Bayer AG ........................ 5,735 232,747
Freeport-McMoRan, Inc. .......... 7,500 240,938
Holliday Chemical Holdings PLC . 23,700 49,939
Olin Corp. ...................... 1,700 63,963
Toagosei Co. Ltd. ............... 5,000 17,701
UBE Industries Ltd. ............. 9,000 25,490
--------------
836,245
--------------
CHEMICALS--SPECIALTY (0.1%)
Cytec Industries, Inc.* ......... 4,000 162,500
NGK Insulators .................. 4,000 37,993
--------------
200,493
--------------
METALS & MINING (0.3%)
Mitsubishi Materials Corp. ..... 7,000 28,288
Nippon Light Metal Co. .......... 9,000 36,992
Pechiney SA (A Shares) .......... 1,446 60,588
Reynolds Metals Co. ............. 9,300 524,288
Western Mining Corp. Ltd. ...... 11,494 72,449
--------------
722,605
--------------
PAPER (0.0%)
Fletcher Forestry Shares ........ 14,000 23,457
UPM-Kymmene Oy .................. 3,510 73,679
--------------
97,136
--------------
STEEL (0.1%)
Nippon Steel Corp. .............. 24,000 70,875
Nisshin Steel Co. Ltd. .......... 44,000 118,158
NKK Corp.* ...................... 28,000 63,103
Pohang Iron & Steel Co. Ltd.
(ADR) .......................... 2,000 40,500
Tokyo Steel Manufacturing Co.
Ltd. ........................... 11,000 156,721
Usinor Sacilor .................. 5,280 76,831
--------------
526,188
--------------
TOTAL BASIC MATERIALS (0.8%) .. 2,382,667
--------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.6%)
Republic Industries, Inc.* ..... 5,500 171,531
USA Waste Services, Inc.* ...... 26,000 828,750
WMX Technologies, Inc. .......... 19,500 636,188
--------------
1,636,469
--------------
PRINTING, PUBLISHING &
BROADCASTING (0.9%)
British Sky Broadcasting
Group PLC ...................... 12,200 109,097
Cablevision Systems Corp.
(Class A)* ..................... 6,000 183,750
Dainippon Printing Co. Ltd. .... 6,000 105,172
Liberty Media Group (Class A)* . 2,700 77,119
New York Times Co. .............. 14,500 551,000
Pearson PLC ..................... 7,470 95,912
Reed International .............. 8,830 166,620
Reuters Holdings ................ 14,000 180,235
Schibsted ASA ................... 1,780 32,848
Singapore Press Holdings ........ 5,000 98,621
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
TCI Group (Class A)* ............ 10,000 $ 130,625
Television Broadcasts ........... 16,000 63,921
Time Warner, Inc. ............... 7,200 270,000
Viacom, Inc. (Class B)* ......... 14,560 507,780
--------------
2,572,700
--------------
PROFESSIONAL SERVICES (0.3%)
Adecco SA ....................... 189 47,444
Associated First Capital Corp. . 7,500 330,938
Ceridian Corp.* ................. 10,000 405,000
ISS International Service
System A/S (Class B)* .......... 2,510 66,086
--------------
849,468
--------------
TRUCKING, SHIPPING (0.1%)
Autopistas Concesionaria
Espanola ....................... 4,260 58,780
Bergesen Dy AS (A Shares) ...... 5,380 131,812
Kamigumi Co. Ltd. ............... 6,000 39,375
Mayne Nickless Ltd. ............. 6,000 41,014
Nippon Express Co. Ltd. ......... 10,000 68,561
Toyo Kanetsu .................... 7,000 24,297
Unitor ASA* ..................... 940 12,106
--------------
375,945
--------------
TOTAL BUSINESS SERVICES (1.9%) 5,434,582
--------------
CAPITAL GOODS
AEROSPACE (0.5%)
Boeing Co. ...................... 5,600 595,700
British Aerospace ............... 6,200 135,952
Coltec Industries, Inc.* ........ 11,000 207,625
General Electric Co. PLC ........ 18,400 120,410
Swire Pacific Ltd. (Class A) ... 6,000 57,211
United Technologies Corp. ...... 4,800 316,800
--------------
1,433,698
--------------
BUILDING & CONSTRUCTION (0.3%)
AMERICAN STANDARD
COMPANIES, INC.* 6,700 256,275
BOUYGUES 1,203 124,740
Daito Trust Construction Co. ... 8,112 90,359
GTM Entrepose ................... 1,116 51,622
Maeda Road Construction Co. .... 2,000 23,141
Matsushita Electric Works Ltd. . 7,000 60,263
National House Industrial Co. .. 7,000 93,084
Shimizu Corp. ................... 7,000 52,284
Wimpey (George) PLC ............. 46,100 99,902
--------------
851,670
--------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.2%)
BPB PLC ......................... 8,200 53,872
Hepworth PLC .................... 8,600 37,347
Louisiana Pacific Corp. ......... 5,200 109,850
Martin Marietta Materials, Inc. 4,200 97,650
Rugby Group PLC ................. 38,400 62,494
Stora Kopparbergs (Series B) ... 7,950 108,422
--------------
469,635
--------------
ELECTRICAL EQUIPMENT (0.5%)
Alcatel Alsthom ................. 320 25,706
General Electric Co. ............ 13,700 1,354,588
Sumitomo Electric Industries ... 7,000 97,919
--------------
1,478,213
--------------
44
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
MACHINERY (0.3%)
Amano Corp. ..................... 8,000 $ 85,657
Daifuku Co. ..................... 7,000 88,247
Furukawa Co. Ltd. ............... 11,000 37,042
Ishikawajima Harima Heavy
Industries Co. Ltd. ............ 9,000 40,022
KSB AG .......................... 590 92,020
Legris Industries ............... 1,990 83,804
Mitsubishi Heavy Industries Ltd. 11,000 87,385
Schindler Holding AG* ........... 52 56,526
Siebe PLC ....................... 7,150 132,531
TI Group PLC .................... 15,500 154,539
--------------
857,773
--------------
TOTAL CAPITAL GOODS (1.8%) 5,090,989
--------------
CONSUMER CYCLICALS
AIRLINES (0.3%)
Delta Air Lines, Inc. ........... 1,100 77,963
Lufthansa AG .................... 7,000 94,528
Northwest Airlines Corp.
(Class A)* ..................... 11,800 461,675
Qantas Airways Ltd. ............. 7,000 11,684
Singapore Airlines Ltd. ......... 1,000 9,076
Swissair* ....................... 60 48,547
--------------
703,473
--------------
APPAREL, TEXTILE (0.5%)
Cone Mills Corp.* ............... 12,000 94,500
Kuraray Co. Ltd. ................ 10,000 92,393
Reebok International Ltd. ...... 31,250 1,312,500
--------------
1,499,393
--------------
AUTO RELATED (0.1%)
Asahi Glass Co. Ltd. ............ 17,000 160,003
Magneti Marelli Spa* ............ 26,250 32,621
Sumitomo Rubber
Industries, Inc. ............... 6,000 44,711
--------------
237,335
--------------
AUTOS & TRUCKS (0.2%)
Bajaj Auto Ltd. (GDR) ........... 4,000 105,500
Honda Motor Corp. ............... 3,000 85,744
Toyota Motor Corp. .............. 13,000 373,802
Volkswagen AG* .................. 150 62,143
--------------
627,189
--------------
FOOD SERVICES, LODGING (0.5%)
Brinker International, Inc.* ... 30,500 488,000
Compass Group PLC* .............. 9,500 100,495
Host Marriott Corp.* ............ 16,200 259,200
John Q Hammons Hotels, Inc.
(Class A)* ..................... 15,000 127,500
La Quinta Motor Inns, Inc. ..... 27,900 533,588
--------------
1,508,783
--------------
HOUSEHOLD FURNITURE,
APPLIANCES (0.6%)
Electrolux B .................... 920 53,426
First Brands Corp. .............. 12,500 354,688
Matsushita Electric
Industrial Co. ................. 12,000 195,838
Sunbeam Corp. ................... 46,900 1,207,675
--------------
1,811,627
--------------
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
LEISURE RELATED (0.7%)
Carnival Corp. .................. 1,600 $ 52,800
Disney (Walt) Co. ............... 15,166 1,055,933
ITT Corp.* ...................... 7,300 316,638
Ladbroke Group PLC .............. 33,300 131,777
Learning Company, Inc.* ......... 4,800 69,000
Rank Group PLC .................. 22,300 166,370
Resorts World BHD ............... 20,000 91,071
Salomon SA ...................... 830 71,186
Shimano, Inc. ................... 3,000 51,032
--------------
2,005,807
--------------
PHOTO & OPTICAL (0.0%)
Fuji Photo Film Co. ............. 1,000 32,985
--------------
RETAIL--GENERAL (1.4%)
AutoZone, Inc.* ................. 46,500 1,278,750
British Airport Author PLC ..... 17,700 147,516
CompUSA, Inc.* .................. 42,600 878,625
Dayton Hudson Corp. ............. 17,300 679,025
Fingerhut Companies, Inc. ...... 12,000 147,000
Kingfisher PLC .................. 5,200 56,255
Kokuyo Co. ...................... 3,000 74,087
Sainsbury (J) PLC ............... 22,800 151,547
Sears PLC ....................... 64,700 105,295
Vendex International N.V. ...... 2,850 121,838
Woolworths Ltd. ................. 55,026 132,524
--------------
3,772,462
--------------
TOTAL CONSUMER CYCLICALS (4.3%) 12,199,054
--------------
CONSUMER NONCYCLICALS
BEVERAGES (0.5%)
Bass Breweries .................. 7,980 112,235
Cadbury Schweppes PLC ........... 14,900 125,712
Coca-Cola Amatil Ltd. ........... 7,048 75,348
Coca-Cola Co. ................... 18,000 947,250
Grand Metropolitan .............. 16,900 132,887
Kirin Brewery Co. ............... 11,000 108,281
Lion Nathan Ltd. ................ 17,000 40,742
--------------
1,542,455
--------------
CONTAINERS (0.3%)
Crown Cork & Seal Co., Inc. .... 12,000 652,500
Schmalbach Lubeca AG* ........... 540 132,649
--------------
785,149
--------------
DRUGS (2.5%)
Amgen, Inc.* .................... 9,200 500,250
Apothekers Cooperatie Opg-CV ... 940 27,026
Astra AB (A Shares) ............. 3,040 150,235
Biogen, Inc.* ................... 20,000 775,000
Centocor, Inc.* ................. 23,800 850,850
Eisai Co. Ltd. .................. 4,000 78,750
Geltex Pharmaceuticals, Inc.* .. 3,200 77,600
Glaxo Wellcome PLC .............. 8,940 145,187
Merck & Co., Inc. ............... 17,200 1,363,100
Novartis AG* .................... 330 377,953
Orion-Yhtymae Oy (B Shares) .... 3,030 116,661
Pfizer, Inc. .................... 18,600 1,541,475
Revco D.S., Inc.* ............... 3,000 111,000
Sankyo Co. ...................... 1,000 28,322
Santen Pharmaceutical Co. ...... 2,000 41,447
45
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Smithkline Beecham PLC .......... 8,900 $ 123,421
Taisho Pharmaceutical Co. ...... 4,000 94,292
Takeda Chemical Industries ..... 3,000 62,948
Warner-Lambert Co. .............. 6,500 487,500
Yamanouchi Pharmaceutical ...... 7,000 143,856
--------------
7,096,873
--------------
FOODS (0.7%)
Campbell Soup Co. ............... 9,170 735,893
CSM N.V.* ....................... 450 24,991
House Foods Industry ............ 2,000 32,294
Nabisco Holdings Corp.
(Class A) ...................... 19,770 768,559
Nestle AG ....................... 186 199,688
Orkla A/S 'A' ................... 930 64,997
Suedzucker AG ................... 240 117,130
Viscofan Envoltura .............. 1,950 28,560
Yakult Honsha Co. ............... 6,000 62,171
Yamakazi Baking Co. ............. 3,000 47,923
--------------
2,082,206
--------------
HOSPITAL SUPPLIES & SERVICES (1.1%)
Columbia/HCA Healthcare Corp. .. 27,000 1,100,250
Medtronic, Inc. ................. 9,600 652,800
Oxford Health Plans, Inc* ...... 4,900 286,956
Pacificare Health Systems, Inc.
(Class B)* ..................... 8,700 741,675
Steris Corp.* ................... 6,600 287,100
--------------
3,068,781
--------------
RETAIL--FOOD (0.2%)
Delhaize Freres ................. 930 55,298
Ito Yokado Co. Ltd. ............. 1,000 43,520
Kesko* .......................... 1,750 24,705
Seven-Eleven Japan Ltd. ......... 5,000 292,721
Tesco PLC ....................... 4,300 26,114
--------------
442,358
--------------
SOAPS & TOILETRIES (0.6%)
Colgate Palmolive Co. ........... 8,680 800,730
Gillette Corp. .................. 10,275 798,881
KAO Corp. ....................... 11,000 128,227
Shiseido Co. .................... 7,000 80,995
--------------
1,808,833
--------------
TOBACCO (1.0%)
BAT Industries .................. 10,600 87,980
Hanjaya Mandala Sampoerna ...... 24,000 128,027
Japan Tobacco, Inc. ............. 10 67,782
Loews Corp. ..................... 3,000 282,750
Philip Morris Cos., Inc. ........ 17,400 1,959,675
Tabacalera SA ................... 1,880 81,008
--------------
2,607,222
--------------
TOTAL CONSUMER NONCYCLICALS (6.9%) 19,433,877
--------------
CREDIT SENSITIVE
BANKS (1.1%)
AMMB Holdings BHD ............... 8,000 67,155
Banco Santander SA .............. 990 63,416
Bangkok Bank Public Co. ......... 2,000 19,340
Bank of Tokyo-Mitsubishi Bank .. 8,000 148,519
Barclays Bank ................... 14,050 240,811
Chase Manhattan Corp. ........... 2,500 223,125
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Chiba Bank ...................... 5,000 $ 34,108
Den Danske Bank ................. 2,000 161,371
First Union Corp. ............... 18,000 1,332,000
Kredietbank ..................... 200 65,612
Malayan Banking Berhad .......... 4,000 44,348
Mitsui Trust & Banking Co. ..... 22,000 171,920
National Westminster Bank* ..... 10,050 118,020
Overseas Chinese Bank ........... 7,600 94,504
Overseas Union Bank Ltd. ........ 10,000 77,181
Philippine Commercial
International Bank ............. 1,000 13,118
Sparbanken Sverige AB
(A Shares) ..................... 2,300 39,462
Sparekassen Bikuben A/S* ........ 870 40,788
State Bank of India (GDR)* ..... 4,000 58,000
Thai Farmers Bank Public Co. ... 13,000 81,104
Thai Farmers Bank Public Co.--
Warrants* ...................... 375 102
Tokai Bank ...................... 10,000 104,481
--------------
3,198,485
--------------
FINANCIAL SERVICES (1.9%)
American Express Co. ............ 24,000 1,356,000
Beneficial Corp. ................ 3,500 221,813
Daiwa Securities Co. Ltd. ...... 3,000 26,682
Dean Witter Discover & Co. ..... 18,350 1,215,688
Incentive AB (B Shares)* ........ 450 32,665
Industrial Credit & Investment
Corp. (GDR)* ................... 3,000 29,250
Industrial Credit & Investment
Corp. of India Ltd. (GDR)* .... 1,000 9,500
ING Groep N.V. .................. 6,260 225,246
Japan Securities Finance Co. ... 9,000 104,913
MBNA Corp. ...................... 28,300 1,174,450
Merrill Lynch & Co., Inc. ...... 9,900 806,850
Nikko Securities Co. ............ 8,000 59,684
Nomura Securities Co. ........... 7,000 105,172
--------------
5,367,913
--------------
INSURANCE (1.4%)
AMEV N.V. ....................... 6,310 220,840
Assurances Generales de France . 4,510 145,596
Baloise Holdings ................ 60 120,583
Istituto Naz Delle Assicurazioni 83,800 109,165
ITT Hartford Group, Inc. ........ 500 33,750
MGIC Investment Corp. ........... 4,500 342,000
Mitsui Marine & Fire
Insurance Co. .................. 11,000 59,175
PennCorp Financial Group, Inc. . 16,200 583,200
Sumitomo Marine & Fire Insurance
Co. ............................ 9,000 55,954
TIG Holdings, Inc. .............. 17,500 592,813
Travelers Group, Inc. ........... 35,566 1,613,807
United Assurance Group PLC ..... 10,000 82,314
Zurich Versicherungs Reg ........ 190 52,805
--------------
4,012,002
--------------
REAL ESTATE (0.2%)
Hysan Development Co. Ltd. ..... 7,000 27,875
Hysan Development Co.
Ltd.--Warrants* ................ 300 272
New World Development Co. ...... 5,000 33,777
46
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Sefimeg ......................... 600 $ 43,481
Simco S.A. ...................... 550 48,020
Societe des Immeubles
de France SA ................... 628 37,037
Sumitomo Realty & Development
Co. ............................ 11,000 69,338
Unibail S.A. .................... 950 94,478
Union Immobiliere de France .... 530 43,260
Wharf Holdings .................. 8,000 39,925
--------------
437,463
--------------
UTILITY--ELECTRIC (0.5%)
Cinergy Corp. ................... 6,900 230,288
FPL Group, Inc. ................. 11,600 533,600
Korea Electric Power (ADR) ..... 2,000 41,000
Malakoff BHD* ................... 9,000 44,189
Manila Electric Co. ............. 5,200 42,510
National Grid Group PLC ......... 44,100 147,696
Tokyo Electric Power Co., Inc. . 3,000 65,797
Veba AG ......................... 3,800 218,547
--------------
1,323,627
--------------
UTILITY--GAS (0.1%)
Anglian Water PLC ............... 11,900 120,277
Hong Kong & China Gas Co. ...... 13,200 25,514
Hong Kong & China Gas
Co.--Warrants* ................. 1,100 612
Osaka Gas Co. ................... 21,000 57,482
Tokyo Gas Co. ................... 41,000 111,165
--------------
315,050
--------------
UTILITY--TELEPHONE (0.3%)
British Telecommunications ..... 17,500 118,268
Frontier Corp. .................. 5,500 124,438
Telecom Corp. of New Zealand ... 14,000 71,458
Telecom Italia Spa .............. 55,900 145,196
Telephone & Data Systems, Inc. . 7,500 271,875
WorldCom, Inc.* ................. 4,000 104,250
--------------
835,485
--------------
TOTAL CREDIT SENSITIVE (5.5%) . 15,490,025
--------------
ENERGY
COAL & GAS PIPELINES (0.2%)
Nabors Industries, Inc.* ........ 29,000 558,250
--------------
OIL--DOMESTIC (0.5%)
Apache Corp. .................... 14,100 498,788
Louisiana Land & Exploration
Corp. .......................... 9,800 525,525
Union Pacific Resources
Group, Inc. .................... 9,824 287,352
--------------
1,311,665
--------------
OIL--INTERNATIONAL (0.8%)
British Petroleum Co. PLC ...... 17,700 212,405
Elf Aquitaine ................... 2,110 192,070
ENI Spa ......................... 25,400 130,360
Exxon Corp. ..................... 12,900 1,264,200
Mitsubishi Oil Co. .............. 10,000 59,839
Repsol SA ....................... 2,410 92,515
Shell Transport & Trading Co.* . 5,500 95,304
Tatneft (ADR)* .................. 500 24,000
Total Campagnie Francaise ...... 2,881 234,322
--------------
2,305,015
--------------
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
OIL--SUPPLIES & CONSTRUCTION (1.4%)
Baker Hughes, Inc. .............. 23,850 $ 822,825
BJ Services Co.* ................ 17,200 877,200
Halliburton Co. ................. 3,500 210,875
Noble Drilling Corp.* ........... 12,500 248,438
Saipem Spa* ..................... 11,950 54,989
Schlumberger, Ltd. .............. 8,500 848,938
Transocean Offshore, Inc. ...... 12,400 776,550
--------------
3,839,815
--------------
RAILROADS (0.6%)
Burlington Northern Santa Fe ... 6,600 570,074
Canadian Pacific Ltd. ........... 21,500 569,750
East Japan Railway Co. .......... 19 85,475
Guangshen Railway Co. Ltd.
(ADR)* ......................... 2,000 41,250
Union Pacific Corp. ............. 9,000 541,125
--------------
1,807,674
--------------
TOTAL ENERGY (3.5%) ............ 9,822,419
--------------
TECHNOLOGY
ELECTRONICS (2.7%)
Advanced Semiconductor
Engineering (GDR)* ............. 3,400 32,300
Altera Corp.* ................... 15,000 1,090,313
Cisco Systems, Inc.* ............ 27,700 1,762,413
Hirose Electric Co. Ltd. ........ 2,000 115,879
Hoya Corp. ...................... 5,000 196,442
Intel Corp. ..................... 8,800 1,152,250
Intergraph Corp.* ............... 10,500 107,625
Kandenko Co. Ltd. ............... 6,000 56,990
Kyocera Corp. ................... 1,000 62,343
National Semiconductor Corp.* .. 1,500 36,563
Rohm Co. Ltd. ................... 6,000 393,748
Seagate Technology, Inc.* ...... 6,500 256,750
SGS-Thomson Microelectronics
N.V.* .......................... 760 53,757
TDK Corp. ....................... 4,000 260,772
Teradyne, Inc.* ................. 5,000 121,875
Texas Instruments, Inc. ......... 2,750 175,313
Ushio, Inc.* .................... 7,000 76,159
Yamatake-Honeywell Co. .......... 3,000 48,441
3Com Corp.* ..................... 23,100 1,694,963
--------------
7,694,896
--------------
OFFICE EQUIPMENT (0.4%)
Canon, Inc. ..................... 9,000 198,947
Compaq Computer Corp.* .......... 9,300 690,525
Sterling Software, Inc.* ........ 4,000 126,500
Storage Technology Corp.* ...... 1,500 71,438
--------------
1,087,410
--------------
OFFICE EQUIPMENT SERVICES (1.5%)
Electronic Data Systems Corp. .. 12,400 536,300
First Data Corp. ................ 16,600 605,900
Informix Corp.* ................. 50,000 1,018,750
Microsoft Corp.* ................ 7,800 644,475
Oracle Corp.* ................... 31,600 1,319,300
Sterling Commerce, Inc.* ........ 6,370 224,543
--------------
4,349,268
--------------
TELECOMMUNICATIONS (1.0%)
Asia Satellite Telecommunications
Holdings Ltd.* ................. 2,000 4,642
DDI Corp. ....................... 65 429,928
47
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Deutsche Telekom AG* ............ 2,140 $ 44,641
Deutsche Telekom AG (ADR)* ..... 2,000 40,750
DSC Communications Corp.* ...... 5,100 91,163
Korea Mobile Telecommunications
Corp. (ADR) .................... 9,270 119,351
MFS Communications Co., Inc.* .. 5,250 286,125
Netscape Communications
Corp.* ......................... 9,600 546,000
Nokia Corp. (ADR) ............... 3,000 172,875
PT Indosat ...................... 41,000 121,506
PT Telekomunikasi Indonesia .... 30,000 51,756
Scientific Atlanta, Inc. ........ 19,000 285,000
Telecel Comunicacoes
Pessoai SA* .................... 280 17,883
Vanguard Cellular Systems, Inc.
(Class A)* ..................... 25,000 393,750
Vodafone Group .................. 22,800 96,280
--------------
2,701,650
--------------
TOTAL TECHNOLOGY (5.6%) ........ 15,833,224
--------------
DIVERSIFIED MISCELLANEOUS (1.0%)
Allied Signal, Inc. ............. 18,700 1,252,900
BTR PLC ......................... 37,300 181,472
Cie Generale des Eaux ........... 843 104,471
Citic Pacific Ltd. .............. 12,000 69,662
First Pacific Co. ............... 38,734 50,330
Hanson PLC ...................... 52,000 72,601
Preussag AG ..................... 210 47,492
Tomkins PLC ..................... 23,600 108,552
U.S. Industries, Inc.* .......... 25,500 876,564
--------------
TOTAL DIVERSIFIED (1.0%) ...... 2,764,044
--------------
TOTAL COMMON STOCKS
AND WARRANTS (31.3%)
(Cost $78,614,373) ............. 88,450,881
--------------
PREFERRED STOCKS:
BASIC MATERIALS (0.1%)
CHEMICALS
Henkel KGAA* .................... 3,144 157,117
--------------
CONSUMER CYCLICALS (0.0%)
RETAIL--GENERAL
Hornbach Holding AG ............. 1,490 106,512
--------------
TECHNOLOGY (0.0%)
TELECOMMUNICATIONS
Nokia Oy Cum .................... 1,580 91,697
--------------
TOTAL PREFERRED STOCKS (0.1%)
(Cost $285,154) ................ 355,326
--------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES (2.5%)
PRINTING, PUBLISHING &
BROADCASTING
Time Warner Entertainment Co.
8.375%, 03/15/23 .............. $ 7,000,000 $ 7,097,090
--------------
CREDIT SENSITIVE
BANKS (5.7%)
Chase Manhattan Corp.
8.625% Sub. Deb., 05/01/02 ... 5,500,000 5,961,010
Deutsche Bank
6.7%, 12/13/06 ................ 5,000,000 4,906,800
Sumitomo Bank International
0.75% Conv., 05/31/01 ....... Yen 11,000,000 100,445
Zion's First National Bank
8.536%, 12/15/26+ ............. $ 5,050,000 5,209,227
--------------
16,177,482
--------------
FINANCIAL SERVICES (2.0%)
Ford Motor Credit Co.
6.125%, 01/09/06 .............. 6,000,000 5,633,640
--------------
FOREIGN GOVERNMENT (0.9%)
Province of Quebec
7.5%, 07/15/23 ................ 2,500,000 2,487,625
--------------
INSURANCE (2.5%)
Prudential Insurance Co.
8.1%, 07/15/15+ ............... 6,800,000 6,935,523
--------------
MORTGAGE RELATED (15.2%)
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 ................ 8,943,760 8,940,970
Federal National Mortgage
Association:
6.0%, 11/01/10 ................ 16,453,280 15,820,866
6.5%, 01/01/11 ................ 3,752,490 3,684,476
7.0%, 05/01/26 ................ 8,999,030 8,804,993
Premier Auto Trust
7.15%, 02/04/99 ............... 5,650,000 5,692,375
--------------
42,943,680
--------------
UTILITY--GAS (1.8%)
RAS Laffan Liquid Natural Gas
8.294%, 09/15/14+ ............. 5,000,000 5,081,075
--------------
U.S. GOVERNMENT (27.1%)
U.S. Treasury:
6.375% Note, 05/15/99 ......... 38,450,000 38,786,430
6.125% Note, 09/30/00 ......... 10,385,000 10,378,508
6.25% Note, 10/31/01 .......... 11,590,000 11,597,244
5.75% Note, 08/15/03 .......... 8,850,000 8,584,500
6.5% Note, 08/15/05 ........... 4,250,000 4,279,218
6.5% Bond, 11/15/26 ........... 2,950,000 2,894,688
--------------
76,520,588
--------------
TOTAL CREDIT SENSITIVE (55.2%) 155,779,613
--------------
TOTAL LONG-TERM DEBT SECURITIES (57.7%)
(Amortized Cost $163,076,530) 162,876,703
--------------
48
<PAGE>
THE HUDSON RIVER TRUST
CONSERVATIVE INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- -------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- -------------------------------------------------------------
SHORT-TERM DEBT SECURITIES:
COMMERCIAL PAPER
ASCC Commercial Paper
5.34%, due 02/27/97 ........... $ 5,000,000 $ 4,957,725
Associates Corp. of North
America
5.75%, due 01/02/97 ........... 400,000 399,936
Morgan Stanley Group, Inc.
6.79%, due 01/02/97 ........... 400,000 399,925
--------------
TOTAL COMMERCIAL PAPER (2.0%) 5,757,586
--------------
TIME DEPOSITS
Canadian Imperial Bank of
Commerce
6.0%, due 01/02/97 ............ 4,300,000 4,300,000
Harris Trust & Savings
6.5%, due 01/02/97 ............ 900,000 900,000
Toronto Dominion Bank
6.25%, due 01/02/97 ........... 13,000,000 13,000,000
--------------
TOTAL TIME DEPOSITS (6.5%) ... 18,200,000
--------------
TOTAL SHORT-TERM DEBT SECURITIES (8.5%)
(Amortized Cost $23,957,586) . 23,957,586
--------------
TOTAL INVESTMENTS (97.6%)
(Cost/Amortized Cost $265,933,643) 275,640,496
OTHER ASSETS
LESS LIABILITIES (2.4%) ....... 6,761,905
--------------
NET ASSETS (100.0%) ............ $282,402,401
==============
</TABLE>
- -------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY GLOBAL REGION
As a Percentage of Total Investments
Canada .............................................. 0.2%
Japan ............................................... 2.6
New Zealand & Australia ............................ 0.2
Scandinavia ......................................... 0.5
Southeast Asia ...................................... 0.7
United Kingdom ...................................... 1.7
United States** ..................................... 92.2
Other European Countries ............................ 1.9
-----
100.0%
=====
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 8.7%.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $17,225,825 or
6.1% of net assets.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
See Notes to Financial Statements.
49
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND WARRANTS:
BASIC MATERIALS
CHEMICALS (0.6%)
Akzo Nobel N.V. .................. 13,380 $ 1,826,675
Bayer AG ......................... 51,000 2,069,762
Freeport-McMoRan, Inc. ........... 101,500 3,260,688
Holliday Chemical Holdings PLC ... 214,000 450,922
Monsanto Co. ..................... 55,000 2,138,125
Olin Corp. ....................... 9,900 372,488
Toagosei Co. Ltd. ................ 44,000 155,772
UBE Industries Ltd. .............. 70,000 198,256
-------------
10,472,688
-------------
CHEMICALS--SPECIALTY (0.1%)
Crompton & Knowles Corp. ......... 49,700 956,725
Cytec Industries, Inc.* .......... 16,700 678,438
NGK Insulators ................... 36,000 341,939
-------------
1,977,102
-------------
METALS & MINING (0.6%)
Century Aluminum Co. ............. 40,700 702,075
Gibraltar Steel Corp.* ........... 31,700 832,125
Kaiser Aluminum Corp.* ........... 40,500 470,813
Mitsubishi Materials Corp. ....... 57,000 230,343
Nippon Light Metal Co. ........... 93,000 382,247
Nord Resources Corp.* ............ 27,939 122,233
Pechiney SA (A Shares) ........... 12,472 522,581
Reynolds Metals Co. .............. 81,200 4,577,650
Steel Dynamics, Inc.* ............ 39,200 749,700
Western Mining Corp. Ltd. ........ 107,481 677,470
-------------
9,267,237
-------------
PAPER (0.1%)
Fletcher Forestry Shares ......... 122,000 204,408
UPM-Kymmene Oy ................... 31,120 653,246
-------------
857,654
-------------
STEEL (0.3%)
Nippon Steel Corp. ............... 206,000 608,341
Nisshin Steel Co. Ltd. ........... 410,000 1,101,028
NKK Corp.* ....................... 265,000 597,228
Pohang Iron & Steel Co. Ltd. (ADR) 13,000 263,250
Tokyo Steel Manufacturing Co. Ltd. 99,000 1,410,500
Usinor Sacilor 47,000 683,916
-------------
4,664,263
-------------
TOTAL BASIC MATERIALS (1.7%) .... 27,238,944
-------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.9%)
Culligan Water Technologies,
Inc.* ........................... 17,400 704,700
Philip Environmental, Inc.* ...... 46,300 671,350
Republic Industries, Inc.* ....... 39,100 1,219,431
Superior Services, Inc.* ......... 7,800 158,925
United States Filter Corp.* ...... 23,000 730,250
United Waste Systems, Inc.* ...... 21,600 742,500
USA Waste Services, Inc.* ........ 180,200 5,743,875
WMX Technologies, Inc. ........... 143,000 4,665,375
-------------
14,636,406
-------------
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
PRINTING, PUBLISHING &
BROADCASTING (1.6%)
British Sky Broadcasting Group PLC 108,100 $ 966,671
Cablevision Systems Corp.
(Class A)* ...................... 127,500 3,904,688
Dainippon Printing Co. Ltd. ...... 51,000 893,964
Evergreen Media Corp.
(Class A)* ...................... 46,200 1,155,000
EZ Communications, Inc.* ......... 12,600 461,475
Liberty Media Group
(Class A)* ...................... 20,900 596,956
New York Times Co. ............... 111,300 4,229,400
Pearson PLC ...................... 66,200 849,987
Reed International ............... 78,600 1,483,166
Reuters Holdings ................. 124,400 1,601,519
Schibsted ASA .................... 15,800 291,570
Sinclair Broadcast Group, Inc.* .. 17,200 447,200
Singapore Press Holdings ......... 49,000 966,483
Tele-Communications International,
Inc.* ........................... 110,000 1,457,500
Television Broadcasts ............ 145,000 579,288
Time Warner, Inc. ................ 65,000 2,437,500
Universal Outdoor Holdings,
Inc.* ........................... 15,900 373,650
Viacom, Inc. (Class B)* .......... 110,311 3,847,096
-------------
26,543,113
-------------
PROFESSIONAL SERVICES (0.6%)
Adecco SA ........................ 1,670 419,216
Associated First Capital Corp. ... 39,500 1,742,938
Ceridian Corp.* .................. 73,800 2,988,900
Equity Corporation
International * ................. 18,750 375,000
Ha-Lo Industries, Inc.* .......... 48,062 1,321,705
Interim Services, Inc.* .......... 11,700 415,350
ISS International Service
System A/S (Class B)* ........... 23,850 627,945
Telespectrum Worldwide, Inc.* .... 49,700 788,988
-------------
8,680,042
-------------
TRUCKING, SHIPPING (0.2%)
Autopistas Concesionaria Espanola 37,850 522,256
Bergesen Dy AS (A Shares) ........ 47,300 1,158,868
Kamigumi Co. Ltd. ................ 56,000 367,498
Mayne Nickless Ltd. .............. 55,005 375,998
Nippon Express Co. Ltd. .......... 81,000 555,341
Toyo Kanetsu ..................... 61,000 211,743
Unitor ASA * ..................... 8,560 110,239
-------------
3,301,943
-------------
TOTAL BUSINESS SERVICES (3.3%) 53,161,504
-------------
CAPITAL GOODS
AEROSPACE (0.6%)
Boeing Co. ....................... 27,100 2,882,763
British Aerospace ................ 55,400 1,214,793
Coltec Industries, Inc.* ......... 115,000 2,170,625
General Electric Co. PLC ......... 163,900 1,072,568
Swire Pacific Ltd. (Class A) ..... 51,000 486,295
United Technologies Corp. ........ 39,400 2,600,400
-------------
10,427,444
-------------
50
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
BUILDING & CONSTRUCTION (0.4%)
American Standard Companies, Inc.* 24,700 $ 944,775
Bouygues ......................... 10,708 1,110,322
Daito Trust Construction Co. ..... 70,570 786,075
GTM Entrepose .................... 9,953 460,387
Maeda Road Construction Co. ...... 19,000 219,843
Matsushita Electric Works Ltd. ... 65,000 559,580
National House Industrial Co. .... 53,000 704,775
Shimizu Corp. .................... 64,000 478,024
Wimpey (George) PLC .............. 416,000 901,502
-------------
6,165,283
-------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.4%)
BPB PLC .......................... 72,700 477,620
Buckeye Cellulose Corp.* ......... 15,400 410,025
Hepworth PLC ..................... 76,500 332,217
Hughes Supply, Inc. .............. 16,200 698,625
Louisiana Pacific Corp. .......... 48,200 1,018,225
Martin Marietta Materials, Inc. .. 110,000 2,557,500
Rugby Group PLC .................. 347,000 564,723
Stora Kopparbergs (Series B) ..... 70,600 962,841
-------------
7,021,776
-------------
ELECTRICAL EQUIPMENT (0.7%)
Alcatel Alsthom .................. 2,640 212,075
General Electric Co. ............. 110,100 10,886,138
Sumitomo Electric Industries ..... 56,000 783,352
-------------
11,881,565
-------------
MACHINERY (0.5%)
Amano Corp. ...................... 73,000 781,625
Daifuku Co. ...................... 57,000 718,591
Furukawa Co. Ltd. ................ 105,000 353,596
Ishikawajima Harima Heavy
Industries Co. Ltd. ............. 83,000 369,096
KSB AG-Vorzug .................... 5,600 873,408
Legris Industries ................ 17,300 728,544
Mitsubishi Heavy Industries Ltd. . 100,000 794,405
Schindler Holding AG* ............ 465 505,473
Siebe PLC ........................ 63,500 1,177,020
TI Group PLC ..................... 138,200 1,377,887
-------------
7,679,645
-------------
TOTAL CAPITAL GOODS (2.6%) 43,175,713
-------------
CONSUMER CYCLICALS
AIRLINES (0.3%)
Lufthansa AG ..................... 62,850 848,728
Mesa Airlines, Inc.* ............. 47,200 318,600
Northwest Airlines Corp.
(Class A)* ...................... 94,800 3,709,050
Qantas Airways Ltd. .............. 62,000 103,489
Singapore Airlines Ltd. .......... 11,000 99,836
Swissair * ....................... 560 453,104
-------------
5,532,807
-------------
APPAREL, TEXTILE (1.0%)
Designer Holdings Ltd.* .......... 33,600 541,800
Kuraray Co. Ltd. ................. 96,000 886,970
Mohawk Industries, Inc.* ......... 32,500 715,000
Nine West Group, Inc.* ........... 27,200 1,261,400
Polymer Group, Inc.* ............. 32,100 445,388
Reebok International Ltd. ........ 244,500 10,269,000
Stage Stores, Inc.* .............. 28,300 516,475
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Tommy Hilfiger Corp.* ............ 16,900 $ 811,200
Warnaco Group, Inc. (Class A) .... 22,300 660,638
-------------
16,107,871
-------------
AUTO RELATED (0.2%)
Asahi Glass Co. Ltd. ............. 140,000 1,317,676
Magneti Marelli Spa * ............ 256,100 318,253
Miller Industries, Inc.* ......... 22,950 459,000
Sumitomo Rubber Industries, Inc. . 49,000 365,141
Team Rental Group, Inc.* ......... 50,900 820,763
-------------
3,280,833
-------------
AUTOS & TRUCKS (0.3%)
Bajaj Auto Ltd. (GDR) ............ 30,400 801,800
Honda Motor Corp. ................ 27,000 771,695
Toyota Motor Corp. ............... 112,000 3,220,447
Volkswagen AG* ................... 1,310 542,712
-------------
5,336,654
-------------
FOOD SERVICES, LODGING (1.0%)
Brinker International, Inc.* ..... 234,700 3,755,200
Compass Group PLC* ............... 84,700 895,990
Doubletree Corp.* ................ 25,341 1,140,345
Host Marriott Corp.* ............. 138,200 2,211,200
Innkeepers USA Trust ............. 43,300 600,788
Interstate Hotels Co.* ........... 29,100 822,075
John Q Hammons Hotels, Inc. (Class
A)* ............................. 200,000 1,700,000
La Quinta Motor Inns, Inc. ....... 225,750 4,317,469
Suburban Lodges of America, Inc.* 31,700 507,200
-------------
15,950,267
-------------
HOUSEHOLD FURNITURE,
APPLIANCES (1.0%)
Electrolux B ..................... 8,210 476,766
First Brands Corp. ............... 95,200 2,701,300
Industrie Natuzzi (ADR) .......... 19,000 437,000
Matsushita Electric Industrial Co. 109,000 1,778,862
Sunbeam Corp. .................... 394,500 10,158,375
-------------
15,552,303
-------------
LEISURE RELATED (1.1%)
Carnival Corp. ................... 12,400 409,200
Cyrk, Inc.* ...................... 220,600 2,867,800
Disney (Walt) Co. ................ 118,200 8,229,675
Harman International Industries,
Inc. ............................ 18,100 1,006,813
Ladbroke Group PLC ............... 296,000 1,171,349
Learning Company, Inc.* .......... 62,700 901,313
Rank Group PLC ................... 198,700 1,482,411
Resorts World BHD ................ 187,000 851,515
Salomon SA ....................... 7,450 638,961
Shimano, Inc. .................... 34,000 578,361
-------------
18,137,398
-------------
PHOTO & OPTICAL (0.0%)
Fuji Photo Film Co. .............. 14,000 461,791
-------------
RETAIL--GENERAL (2.1%)
AutoZone, Inc.* .................. 380,000 10,450,000
British Airport Author PLC ....... 157,500 1,312,641
CompUSA, Inc.* ................... 333,600 6,880,500
Consolidated Stores Corp.* ....... 18,750 602,344
Dayton Hudson Corp. .............. 128,500 5,043,625
51
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Fingerhut Companies, Inc. ........ 260,500 $3,191,125
Kingfisher PLC ................... 46,500 503,048
Kokuyo Co. ....................... 29,000 716,173
Petco Animal Supplies, Inc.* ..... 31,400 651,550
Sainsbury (J) PLC ................ 202,600 1,346,647
Sears PLC ........................ 584,900 951,893
Vendex International N.V. ........ 25,300 1,081,579
Woolworths Ltd. .................. 509,991 1,228,260
-------------
33,959,385
-------------
TOTAL CONSUMER CYCLICALS (7.0%) 114,319,309
-------------
CONSUMER NONCYCLICALS
BEVERAGES (0.6%)
Bass Breweries ................... 71,000 998,583
Cadbury Schweppes PLC ............ 132,700 1,119,592
Coca-Cola Amatil Ltd. ............ 64,000 684,207
Coca-Cola Co. .................... 97,000 5,104,625
Grand Metropolitan ............... 150,000 1,179,469
Kirin Brewery Co. ................ 42,000 413,436
Lion Nathan Ltd. ................. 157,000 376,260
-------------
9,876,172
-------------
CONTAINERS (0.5%)
Crown Cork & Seal Co., Inc. ...... 105,000 5,709,375
Hub Group, Inc. (Class A)* ....... 24,400 652,700
Schmalbach Lubeca AG * ........... 4,760 1,169,275
-------------
7,531,350
-------------
DRUGS (3.3%)
Amgen, Inc.* ..................... 90,700 4,931,813
Apothekers Cooperatie Opg-CV ..... 9,445 271,551
Astra AB (A Shares) .............. 27,030 1,335,805
Biogen, Inc.* .................... 161,655 6,264,131
Centocor, Inc.* .................. 198,000 7,078,500
Eisai Co. Ltd. ................... 37,000 728,435
Geltex Pharmaceuticals, Inc.* .... 33,100 802,675
Glaxo Wellcome PLC ............... 79,700 1,294,343
Medicis Pharmaceutical Corp.
(Class A)* ...................... 11,300 497,200
MedImmune, Inc.* ................. 28,500 484,500
Merck & Co., Inc. ................ 116,000 9,193,000
Novartis AG* ..................... 3,105 3,556,194
Orion-Yhtymae Oy (B Shares) ...... 26,700 1,028,003
Pfizer, Inc. ..................... 107,600 8,917,350
Sankyo Co. ....................... 8,000 226,578
Santen Pharmaceutical Co. ........ 11,000 227,960
Smithkline Beecham PLC ........... 80,100 1,110,790
Taisho Pharmaceutical Co. ........ 37,000 872,204
Takeda Chemical Industries ....... 30,000 629,479
United Natural Foods, Inc.* ...... 32,600 554,200
Warner-Lambert Co. ............... 41,200 3,090,000
Yamanouchi Pharmaceutical ........ 58,000 1,191,952
-------------
54,286,663
-------------
FOODS (1.0%)
Campbell Soup Co. ................ 69,500 5,577,375
CSM N.V.* ........................ 4,100 227,692
House Foods Industry ............. 22,000 355,237
Nabisco Holdings Corp.
(Class A) ....................... 141,900 5,516,363
Nestle AG ........................ 1,650 1,771,423
Orkla A/S 'A' .................... 8,300 580,078
Suedzucker AG .................... 2,115 1,032,210
Viscofan Envoltura ............... 16,700 244,588
Yakult Honsha Co. ................ 46,000 476,643
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Yamakazi Baking Co. .............. 32,000 $ 511,182
-------------
16,292,791
-------------
HOSPITAL SUPPLIES & SERVICES (1.5%)
Columbia/HCA Healthcare Corp. .... 225,000 9,168,750
Compdent Corp.* .................. 15,700 553,425
Coventry Corp.* .................. 46,600 431,778
Enterprises Systems, Inc.* ....... 33,000 775,500
Medtronic, Inc. .................. 81,700 5,555,600
National Surgery Centers, Inc.* .. 18,000 684,000
Oxford Health Plans, Inc.* ....... 31,500 1,844,719
Pacificare Health Systems, Inc.
(Class B)* ...................... 24,000 2,046,000
Rotech Medical Corp.* ............ 29,200 613,200
Steris Corp.* .................... 84,762 3,687,147
-------------
25,360,119
-------------
RETAIL--FOOD (0.3%)
Delhaize Freres .................. 8,300 493,524
Ito Yokado Co. Ltd. .............. 13,000 565,754
Kesko* ........................... 14,530 205,126
Seven-Eleven Japan Ltd. .......... 48,000 2,810,120
Tesco PLC ........................ 38,000 230,772
-------------
4,305,296
-------------
SOAPS & TOILETRIES (0.9%)
Colgate Palmolive Co. ............ 71,210 6,569,123
Gillette Corp. ................... 80,810 6,282,978
KAO Corp. ........................ 100,000 1,165,702
Shiseido Co. ..................... 60,000 694,241
-------------
14,712,044
-------------
TOBACCO (1.0%)
BAT Industries ................... 94,300 782,687
Hanjaya Mandala Sampoerna ........ 221,000 1,178,916
Japan Tobacco, Inc. .............. 95 643,943
Philip Morris Cos., Inc. ......... 118,100 13,301,013
Tabacalera SA .................... 16,960 730,806
-------------
16,637,365
-------------
TOTAL CONSUMER NONCYCLICALS (9.1%) 149,001,800
-------------
CREDIT SENSITIVE
BANKS (1.5%)
AMMB Holdings BHD ................ 70,000 587,606
Banco Santander SA ............... 8,800 563,700
Bangkok Bank Public Co. .......... 18,000 174,062
Bank of Tokyo-Mitsubishi Bank .... 72,000 1,336,672
Barclays Bank .................... 125,400 2,149,302
Chase Manhattan Corp. ............ 3,000 267,750
Chiba Bank ....................... 53,000 361,540
Den Danske Bank .................. 17,570 1,417,642
First Union Corp. ................ 140,600 10,404,400
Kredietbank ...................... 1,940 636,435
Long-Term Credit Bank of Japan ... 1,000 5,414
Malayan Banking Berhad ........... 41,000 454,563
Mitsui Trust & Banking Co. ....... 198,000 1,547,276
National Westminster Bank* ....... 89,500 1,051,025
Overseas Chinese Bank ............ 68,100 846,809
Overseas Union Bank Ltd. ......... 91,000 702,351
Philippine Commercial
International Bank .............. 5,000 65,589
Sparbanken Sverige AB
(A Shares) ...................... 19,600 336,286
52
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Sparekassen Bikuben A/S * ........ 7,770 $364,277
State Bank of India (GDR)* ....... 32,000 464,000
Thai Farmers Bank Public Co. ..... 116,000 723,700
Thai Farmers Bank Public
Co.--Warrants* .................. 2,875 785
Tokai Bank ....................... 85,000 888,093
-------------
25,349,277
-------------
FINANCIAL SERVICES (2.7%)
Aames Financial Corp. ............ 16,800 602,700
American Express Co. ............. 152,000 8,588,000
Beneficial Corp. ................. 35,000 2,218,125
Daiwa Securities Co. Ltd. ........ 32,000 284,604
Dean Witter Discover & Co. ....... 142,000 9,407,500
Hambrecht & Quist Group* ......... 28,000 605,500
Incentive AB (B Shares)* ......... 3,820 277,291
Industrial Credit & Investment
Corp.(GDR)* ..................... 32,000 312,000
Industrial Credit & Investment
Corp. of India Ltd.(GDR)* ....... 8,000 76,000
ING Groep N.V. ................... 55,800 2,007,788
Japan Securities Finance Co. ..... 78,000 909,248
MBNA Corp. ....................... 223,700 9,283,550
Merrill Lynch & Co., Inc. ........ 77,200 6,291,800
Nikko Securities Co. ............. 67,000 499,853
Nomura Securities Co. ............ 71,000 1,066,747
Oxford Resources Corp.
(Class A)* ...................... 29,900 923,163
RAC Financial Group, Inc.* ....... 20,900 441,513
Union Acceptance Corp.
(Class A)* ...................... 41,900 743,725
-------------
44,539,107
-------------
INSURANCE (2.6%)
AMEV N.V. ........................ 56,100 1,963,412
Assurances Generales de France ... 40,100 1,294,546
Baloise Holdings ................. 540 1,085,245
Istituto Naz Delle Assicurazioni . 745,000 970,497
ITT Hartford Group, Inc. ......... 3,600 243,000
Life Re Corp. .................... 140,500 5,426,813
MGIC Investment Corp. ............ 51,000 3,876,000
Mitsui Marine & Fire Insurance Co. 105,000 564,848
NAC Re Corp. ..................... 88,800 3,008,100
PennCorp Financial Group, Inc. ... 133,800 4,816,800
PMI Group, Inc. .................. 12,400 686,650
Sumitomo Marine & Fire Insurance
Co. ............................. 82,000 509,801
TIG Holdings, Inc. ............... 120,000 4,065,000
Travelers Group, Inc. ............ 278,166 12,621,782
United Assurance Group PLC ....... 89,200 734,245
Zurich Versicherungs Reg. ........ 1,700 472,469
-------------
42,339,208
-------------
REAL ESTATE (0.3%)
Hysan Development Co. Ltd. ....... 67,000 266,805
Hysan Development Co.
Ltd.--Warrants * ................ 3,350 3,032
JP Realty, Inc. .................. 20,000 517,500
Macerich Co. ..................... 19,600 512,050
New World Development Co. ........ 43,000 290,484
Sefimeg .......................... 5,800 420,314
Simco Ord SA ..................... 5,275 460,552
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Societe des Immeubles
de France SA .................... 6,240 $ 368,014
Sumitomo Realty & Development Co. 103,000 649,253
Unibail SA ....................... 7,880 783,672
Union Immobiliere de France ...... 4,600 375,465
Wharf Holdings ................... 74,000 369,306
-------------
5,016,447
-------------
UTILITY--ELECTRIC (0.6%)
Cinergy Corp. .................... 53,900 1,798,913
FPL Group, Inc. .................. 65,000 2,990,000
Korea Electric Power (ADR) ....... 18,000 369,000
Malakoff BHD * ................... 81,000 397,703
Manila Electric Co. .............. 49,400 403,840
National Grid Group PLC .......... 392,000 1,312,851
Tokyo Electric Power Co., Inc. ... 35,000 767,637
Veba AG .......................... 33,800 1,943,917
-------------
9,983,861
-------------
UTILITY--GAS (0.2%)
Anglian Water PLC ................ 106,100 1,072,383
Hong Kong & China Gas Co. ........ 130,800 252,823
Hong Kong & China Gas
Co.--Warrants * ................. 10,900 6,060
Osaka Gas Co. .................... 178,000 487,229
Tokyo Gas Co. .................... 372,000 1,008,618
-------------
2,827,113
-------------
UTILITY--TELEPHONE (0.5%)
British Telecommunications ....... 155,300 1,049,545
Frontier Corp. ................... 50,000 1,131,250
LCI International, Inc.* ......... 38,000 817,000
Telecom Corp. of New Zealand ..... 128,000 653,335
Telecom Italia Spa ............... 530,800 1,378,727
Telephone & Data Systems, Inc. ... 34,700 1,257,875
WorldCom, Inc.* .................. 43,900 1,144,144
-------------
7,431,876
-------------
TOTAL CREDIT SENSITIVE (8.4%) ... 137,486,889
-------------
ENERGY
COAL & GAS PIPELINES (0.2%)
Nabors Industries, Inc.* ......... 200,000 3,850,000
-------------
OIL--DOMESTIC (1.3%)
APACHE CORP. .................... 131,000 4,634,125
COSTILLA ENERGY, INC.* .......... 63,400 863,825
KCS Energy, Inc. ................. 18,900 675,675
Louis Dreyfus Natural Gas Corp.* . 245,400 4,202,475
Louisiana Land & Exploration Corp. 76,700 4,113,038
Tom Brown, Inc.* ................. 121,000 2,525,875
Ultramar Diamond Shamrock Corp. .. 16,258 514,159
Union Pacific Resources Group,
Inc. ............................ 123,176 3,602,898
-------------
21,132,070
-------------
OIL--INTERNATIONAL (1.2%)
British Petroleum Co. PLC ........ 157,700 1,892,442
Elf Aquitaine .................... 18,800 1,711,331
ENI Spa .......................... 225,800 1,158,867
Exxon Corp. ...................... 98,200 9,623,600
53
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
Mitsubishi Oil Co. ............... 86,000 $514,619
Repsol SA ........................ 20,950 804,226
Shell Transport & Trading Co.* ... 49,000 849,072
Tatneft (ADR)* ................... 4,700 225,600
Total Campagnie Francaise ........ 26,234 2,133,709
-------------
18,913,466
-------------
OIL--SUPPLIES & CONSTRUCTION (2.1%)
Baker Hughes, Inc. ............... 212,000 7,314,000
BJ Services Co.* ................. 152,000 7,752,000
Halliburton Co. .................. 35,000 2,108,750
Noble Drilling Corp.* ............ 133,000 2,643,375
Parker Drilling Co.* ............. 132,100 1,271,463
Rowan Cos., Inc.* ................ 49,700 1,124,463
Saipem Spa* ...................... 106,400 489,608
Schlumberger, Ltd. ............... 46,500 4,644,188
Transocean Offshore, Inc. ........ 110,500 6,920,063
-------------
34,267,910
-------------
RAILROADS (1.0%)
Burlington Northern Santa Fe ..... 56,600 4,888,825
Canadian Pacific Ltd. ............ 182,000 4,823,000
East Japan Railway Co. ........... 185 832,268
Genesee & Wyoming, Inc.
(Class A)* ...................... 24,500 851,375
Guangshen Railway Co. Ltd. (ADR)* 16,000 330,000
Union Pacific Corp. .............. 86,400 5,194,800
-------------
16,920,268
-------------
TOTAL ENERGY (5.8%) 95,083,714
-------------
TECHNOLOGY
ELECTRONICS (4.4%)
Advanced Semiconductor Engineering
(GDR)* .......................... 32,060 304,570
Altera Corp.* .................... 114,600 8,329,988
BMC Industries, Inc. ............. 36,400 1,146,600
Cisco Systems, Inc.* ............. 239,400 15,231,825
Exabyte Corp.* ................... 37,700 504,238
Hirose Electric Co. Ltd. ......... 25,000 1,448,493
HMT Technology Corp.* ............ 28,000 420,438
Hoya Corp. ....................... 45,000 1,767,982
IDT Corp.* ....................... 35,700 392,700
Insight Enterprises, Inc.* ....... 14,900 417,200
Intel Corp. ...................... 73,800 9,663,187
Intergraph Corp.* ................ 90,000 922,500
Kandenko Co. Ltd. ................ 51,000 484,414
Kent Electronics Corp.* .......... 24,700 636,025
Kyocera Corp. .................... 11,000 685,778
National Semiconductor Corp.* .... 30,000 731,250
Network General Corp.* ........... 21,100 638,275
Rohm Co. Ltd. .................... 53,000 3,478,111
Seagate Technology, Inc.* ........ 68,600 2,709,700
SGS-Thomson Microelectronics N.V.* 6,750 477,450
Systemsoft Corp.* ................ 31,800 473,025
TDK Corp. ........................ 38,000 2,477,334
Teradyne, Inc.* .................. 30,000 731,250
Texas Instruments, Inc. .......... 21,000 1,338,750
Uniphase Corp.* .................. 9,900 519,750
Ushio, Inc.* ..................... 64,000 696,313
Westell Technologies, Inc.* ...... 18,800 430,050
Yamatake-Honeywell Co. ........... 37,000 597,444
3Com Corp.* ...................... 181,300 13,302,880
<PAGE>
- ---------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- ---------------------------------------------------------------
3D Labs, Inc. Ltd.* .............. 15,100 $ 347,300
-------------
71,304,820
-------------
OFFICE EQUIPMENT (0.7%)
Applix, Inc.* .................... 24,500 535,938
Canon, Inc. ...................... 75,000 1,657,888
Compaq Computer Corp.* ........... 75,600 5,613,300
Read-Rite Corp.* ................. 33,100 835,775
Sterling Software, Inc.* ......... 47,100 1,489,538
Storage Technology Corp.* ........ 19,100 909,638
-------------
11,042,077
-------------
OFFICE EQUIPMENT SERVICES (2.3%)
Adobe Systems, Inc. .............. 39,300 1,468,838
Comverse Technology, Inc.* ....... 44,900 1,697,781
Electronic Data Systems Corp. .... 79,000 3,416,750
First Data Corp. ................. 125,000 4,562,500
Informix Corp.* .................. 430,000 8,761,250
Microsoft Corp.* ................. 61,600 5,089,700
Oracle Corp.* .................... 259,450 10,832,038
Premisys Communications, Inc.* ... 11,300 381,375
Sterling Commerce, Inc.* ......... 54,685 1,927,646
Structural Dynamics Research Corp.
(Class A)* ...................... 23,100 462,000
-------------
38,599,878
-------------
TELECOMMUNICATIONS (1.5%)
Act Networks, Inc.* .............. 14,800 540,200
Asia Satellite Telecommunications
Holdings Ltd.* .................. 18,000 41,774
Cable Design Technologies * ...... 17,400 541,575
Comnet Cellular, Inc.* ........... 98,800 2,754,050
DDI Corp. ........................ 618 4,087,620
Deutsche Telekom AG* ............. 19,250 401,563
DSC Communications Corp.* ........ 44,000 786,500
ICG Communications, Inc.* ........ 28,800 507,600
Korea Mobile Telecommunications
Corp. (ADR) ..................... 74,160 954,810
MFS Communications Co., Inc.* .... 45,013 2,453,209
Millicom International
Cellular SA * ................... 11,500 369,438
Netscape Communications Corp.* ... 79,200 4,504,500
Nokia Corp. (ADR) ................ 35,000 2,016,875
PT Indosat ....................... 375,000 1,111,346
PT Telekomunikasi Indonesia ...... 277,000 477,890
Scientific Atlanta, Inc. ......... 107,300 1,609,500
Telecel-Comunicacoes
Pessoai SA * .................... 2,490 159,035
Vodafone Group ................... 202,500 855,115
Winstar Communications, Inc.* .... 28,300 594,300
Xircom * ......................... 26,700 580,725
-------------
25,347,625
-------------
TOTAL TECHNOLOGY (8.9%) ......... 146,294,400
-------------
DIVERSIFIED
MISCELLANEOUS (1.1%)
Allied Signal, Inc. .............. 147,900 9,909,300
BTR PLC .......................... 331,800 1,614,275
Cie Generale des Eaux ............ 7,259 899,593
Citic Pacific Ltd. ............... 111,000 644,373
First Pacific Co. ................ 355,685 462,167
Hanson PLC ....................... 463,000 646,430
Preussag AG ...................... 1,860 420,639
54
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- --------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- --------------------------------------------------------------
Tomkins PLC ...................... 210,000 $ 965,931
U.S. Industries, Inc.* ........... 88,000 3,025,000
-------------
TOTAL DIVERSIFIED (1.1%) ........ 18,587,708
-------------
TOTAL COMMON STOCKS AND WARRANTS
(47.9%)
(Cost $682,993,577) ............. 784,349,981
-------------
PREFERRED STOCKS:
BASIC MATERIALS (0.1%)
CHEMICALS
Henkel KGAA* ..................... 27,980 1,398,272
-------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.0%)
Designer Finance Trust
6.0% Conv. ...................... 12,300 568,875
-------------
RETAIL--GENERAL (0.1%)
Hornbach Holding AG .............. 12,420 887,835
-------------
TOTAL CONSUMER CYCLICALS (0.1%) . 1,456,710
-------------
CONSUMER NONCYCLICALS (0.0%)
CONTAINERS
Crown Cork & Seal Co., Inc.
4.5% Conv ....................... 10,500 546,000
-------------
CREDIT SENSITIVE
BANKS (0.1%) First Chicago NBD Corp.
5.75% Conv. Series B ............ 23,000 2,075,750
-------------
FINANCIAL SERVICES (0.0%)
Money Store
6.5% Conv. ...................... 22,500 615,938
-------------
INSURANCE (0.1%)
PennCorp Financial Group, Inc.
7.0% Conv. + .................... 19,950 1,187,025
-------------
TOTAL CREDIT SENSITIVE (0.2%) 3,878,713
-------------
TECHNOLOGY TELECOMMUNICATIONS (0.2%)
MFS Communications Co., Inc.
8.0% Conv. ...................... 34,900 3,184,625
Nokia Oy Cum ..................... 14,100 818,304
-------------
TOTAL TECHNOLOGY (0.2%) ......... 4,002,929
-------------
TOTAL PREFERRED STOCKS (0.6%)
(Cost $8,111,854) ............... 11,282,624
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BUSINESS SERVICES (0.1%)
ENVIRONMENTAL CONTROL
United Waste Systems, Inc.
4.5% Conv., 06/01/01+ ....... $ 1,135,000 1,373,350
-------------
PRINTING, PUBLISHING &
BROADCASTING (1.3%)
Time Warner Entertainment Co.
8.375%, 03/15/23 ............ 20,950,000 21,240,577
-------------
PROFESSIONAL SERVICES (0.2%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ........ 415,000 813,919
Danka Business Systems PLC
6.75% Conv., 04/01/02 ....... 905,000 1,221,750
<PAGE>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
First Financial Management Corp.
5.0% Conv., 12/15/99 ............ $ 1,320,000 $ 2,219,250
--------------
4,254,919
--------------
TOTAL BUSINESS SERVICES (1.6%) .. 26,868,846
--------------
CAPITAL GOODS (0.1%)
MACHINERY
DII Group, Inc.
6.0% Conv., 10/15/02+ ........... 1,100,000 1,045,000
--------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.1%)
Nine West Group, Inc.
5.5% Conv., 07/15/03+ ........... 1,675,000 1,666,625
--------------
FOOD SERVICES, LODGING (0.1%)
HFS, Inc.
4.5% Conv., 10/01/99 ............ 612,000 2,025,720
--------------
RETAIL--GENERAL (0.2%)
Saks Holdings, Inc.
5.5% Conv., 09/15/06 ............ 875,000 805,000
U.S. Office Products Co.
5.5% Conv., 02/01/01 ............ 1,035,000 1,345,500
--------------
2,150,500
--------------
TOTAL CONSUMER CYCLICALS (0.4%) . 5,842,845
--------------
CONSUMER NONCYCLICALS
DRUGS (0.1%)
MedImmune, Inc.
7.0% Conv. Sub., 07/01/03+ ...... 1,025,000 1,104,438
Quintiles Transnational Corp.
4.25% Conv., 05/31/00+ .......... 790,000 829,500
--------------
1,933,938
--------------
HOSPITAL SUPPLIES &
SERVICES (0.3%)
American Medical Response, Inc.
5.25% Conv., 02/01/01+ .......... 940,000 1,012,850
Healthsouth Corp.
5.0% Conv., 04/01/01 ............ 540,000 1,117,125
Phycor, Inc.
4.5% Conv., 02/01/03 ............ 800,000 779,000
Tenet Healthcare Corp.
6.0% Conv., 12/01/05 ............ 980,000 1,029,000
--------------
3,937,975
--------------
TOTAL CONSUMER NONCYCLICALS (0.4%) 5,871,913
--------------
CREDIT SENSITIVE
BANKS (1.3%)
Deutsche Bank
6.7%, 12/14/06 .................. 21,450,000 21,050,172
Sumitomo Bank International
0.75% Conv., 05/31/01 ... Yen 101,000,000 922,265
--------------
21,972,437
--------------
FINANCIAL SERVICES (3.1%)
Aames Financial Corp.
5.5% Conv., 03/15/06+ ........... $ 720,000 972,900
Bankamerica Capital II
8.0%, 12/15/26 .................. 20,000,000 20,381,000
Commercial Credit Co.
6.125%, 12/01/05 ................ 10,000,000 9,412,700
55
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
Leasing Solutions, Inc.
6.875% Conv., 10/01/03 .......... $ 1,430,000 $ 1,430,000
RAC Financial Group, Inc.
7.25% Conv. Sub., 08/15/03+ ..... 625,000 835,156
Santander Financial Issuances
7.0%, 04/01/06 .................. 18,300,000 18,172,266
--------------
51,204,022
--------------
FOREIGN GOVERNMENT (1.3%)
Republic of Poland
4.0% PDI, 10/27/14 (a) .......... 25,000,000 21,125,000
--------------
INSURANCE (2.5%)
John Hancock Mutual Life
Insurance Co.
7.375%, 02/15/24+ ............... 23,750,000 22,891,913
Penn Treaty American Corp.
6.25% Conv., 12/01/03+ .......... 450,000 488,250
Travelers Capital III
7.625%, 12/01/36 ................ 18,000,000 17,515,260
--------------
40,895,423
--------------
MORTGAGE RELATED (9.3%)
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 .................. 28,523,343 28,514,444
Federal National Mortgage
Association:
6.5%, 05/01/11 .................. 45,305,228 44,484,072
6.5%, 08/01/11 .................. 18,430,548 18,096,494
7.0%, 05/01/26 .................. 28,699,610 28,080,790
Government National Mortgage
Association
7.5%, 5/15/26 ................... 33,329,990 33,350,822
--------------
152,526,622
--------------
UTILITY--ELECTRIC (0.6%)
Empresa Electrica del Norte
7.75%, 03/15/06+ ................ 9,400,000 9,476,798
--------------
UTILITY--GAS (1.0%)
RAS Laffan Liquid Natural Gas
8.294%, 09/15/14+ ............... 16,730,000 17,001,277
--------------
U.S. GOVERNMENT (17.7%)
U.S. Treasury:
6.375% Note, 05/15/99 ........... 104,500,000 105,414,371
7.75% Note, 01/31/00 ............ 56,000,000 58,607,528
6.75% Note, 04/30/00 ............ 25,600,000 26,088,013
6.5% Note, 08/31/01 ............. 60,000,000 60,656,280
6.25% Note, 10/31/01 ............ 18,035,000 18,046,272
5.75% Note, 08/15/03 ............ 19,925,000 19,327,250
6.5% Note, 08/15/05 ............. 1,225,000 1,233,422
--------------
289,373,136
--------------
TOTAL CREDIT SENSITIVE (36.8%) .. 603,574,715
--------------
<PAGE>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
ENERGY
COAL & GAS PIPELINES (0.0%)
Swift Energy Co.
6.25% Conv., 11/15/06 ........... $ 710,000 $ 779,225
--------------
OIL--SUPPLIES & CONSTRUCTION (0.1%)
Seacor Holdings
5.375% Conv. Sub. Notes,
11/15/06+ ....................... 675,000 783,000
--------------
TOTAL ENERGY (0.1%) ............. 1,562,225
--------------
TECHNOLOGY
ELECTRONICS (1.1%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ....................... 1,630,000 2,522,425
Applied Magnetics Corp.:
7.0% Conv. Sub., 03/15/06 ....... 2,120,000 3,752,400
7.0% Conv. Sub. Euro, 03/15/06 .. 140,000 247,800
C-Cube Microsystems, Inc.
5.875% Conv., 11/01/05 .......... 930,000 1,204,350
Checkpoint Systems, Inc.
5.25% Conv., 11/01/05+ .......... 455,000 664,869
LSI Logic Corp.
5.5% Conv., 03/15/01+ ........... 780,000 1,712,100
Plasma & Materials Technologies,
Inc.
7.125% Conv., 10/15/01+ ......... 1,100,000 1,078,000
Sanmina Corporation
5.5% Conv., 08/15/02+ ........... 1,410,000 2,948,663
SCI Systems, Inc.
5.0% Conv., 05/01/06 ............ 1,385,000 1,582,363
S3 Incorporated
5.75% Conv. Sub. Note,
10/01/03+ ....................... 605,000 662,475
3Com Corp.
10.25% Conv., 11/01/01+ ......... 1,035,000 2,284,763
--------------
18,660,208
--------------
TELECOMMUNICATIONS (0.3%) BBN Corp.
6.0% Conv., 04/01/12 ............ 1,660,000 1,610,200
Comverse Technology, Inc.
5.75% Conv. Sub., 10/01/06+ ..... 2,185,000 2,264,206
--------------
3,874,406
--------------
TOTAL TECHNOLOGY (1.4%) ......... 22,534,614
--------------
DIVERSIFIED (0.1%)
MISCELLANEOUS
THERMO ELECTRON CORP.
5.0% CONV. EURO., 04/15/01 ..... 1,055,000 2,091,538
--------------
TOTAL LONG-TERM DEBT
SECURITIES (40.9%)
(Amortized Cost $656,543,317) . . 669,391,696
--------------
56
<PAGE>
THE HUDSON RIVER TRUST
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ----------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ----------------------------------------------------------------
SHORT-TERM DEBT SECURITIES:
BANKERS' ACCEPTANCES (0.6%)
Industrial Bank of Japan-L.A.
5.73%, due 01/16/97 ............. $10,000,000 $ 9,976,125
--------------
CERTIFICATES OF DEPOSIT (1.5%)
Canadian Imperial Bank of
Commerce
5.44%, due 03/31/97 ............. 25,000,000 25,009,103
--------------
COMMERCIAL PAPER
ASCC Commercial Paper:
5.34%, due 02/27/97 ............. 10,000,000 9,915,450
5.37%, due 03/27/97 ............. 19,300,000 19,059,849
Associates Corp. of North
America
5.75%, due 01/02/97 ............. 2,400,000 2,399,617
BHF Delaware, Inc.
5.64%, due 03/10/97 ............. 5,000,000 4,950,228
Dresdner U.S. Finance, Inc.
5.31%, due 04/10/97 ............. 5,000,000 4,927,263
International Securitization
5.45%, due 03/18/97 ............. 13,000,000 12,855,367
Koch Industries
6.9%, due 01/02/97 .............. 500,000 499,904
Morgan (J.P.) & Co.
5.62%, due 03/05/97 ............. 5,000,000 4,953,538
Morgan Stanley Group, Inc.
6.79%, due 01/02/97 ............. 19,700,000 19,696,284
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
Sigma Finance Corp.
5.4%, due 03/17/97 .............. $15,000,000 $ 14,835,312
Suntrust Banks, Inc.:
5.3%, due 03/10/97 .............. 5,000,000 4,950,039
5.35%, due 03/31/97 ............. 10,000,000 9,869,219
--------------
TOTAL COMMERCIAL PAPER (6.7%) ... 108,912,070
--------------
TIME DEPOSITS
Canadian Imperial Bank of
Commerce
6.0%, due 01/02/97 .............. 5,300,000 5,300,000
Harris Trust & Savings
6.5%, due 01/02/97 .............. 4,800,000 4,800,000
Toronto Dominion Bank
6.25%, due 01/20/97 ............. 8,100,000 8,100,000
--------------
TOTAL TIME DEPOSITS (1.1%) ...... 18,200,000
--------------
TOTAL SHORT-TERM DEBT SECURITIES (9.9%)
(Amortized Cost $162,066,577) ... 162,097,298
--------------
TOTAL INVESTMENTS (99.3%)
(Cost/Amortized Cost $1,509,715,325) 1,627,121,599
OTHER ASSETS
LESS LIABILITIES (0.7%) ......... 10,733,905
--------------
NET ASSETS (100.0%) .............. $1,637,855,504
==============
</TABLE>
<PAGE>
- ----------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY GLOBAL REGION
As a Percentage of Total Investments
Canada ................................................. 0.3%
Japan .................................................. 4.0
New Zealand & Australia ................................ 0.3
Scandinavia ............................................ 0.7
Southeast Asia ......................................... 1.1
United Kingdom ......................................... 2.5
United States** ........................................ 86.7
Other European Countries ............................... 4.4
------
100.0%
======
- ------------
* Non-income producing.
** Includes Short-Term Debt Securities of 10.0%.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $74,805,583 or
4.6% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1996.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
PDI--Past Due Interest Bond
See Notes to Financial Statements.
57
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS AND OTHER
INVESTMENTS:
BASIC MATERIALS
CHEMICALS (1.1%)
AGA AB (A Shares) ............... 3,400 $ 51,355
Akzo Nobel N.V. ................. 875 119,457
Asahi Chemical Industry Co. ..... 27,000 152,940
Bayer AG ........................ 15,850 643,250
BOC Group Co. PLC ............... 6,825 102,129
Dainippon Ink & Chemical, Inc. .. 51,000 188,922
Freeport-McMoRan, Inc. .......... 103,000 3,308,875
GP Batteries International Ltd. . 143,000 474,760
GP Batteries International Ltd.+ 37,000 122,840
GP Batteries International
Ltd.--Rights* .................. 5,750 2,875
Imperial Chemical Industries .... 18,212 239,764
Indo Gulf Fertilisers (GDR) ..... 50,000 35,000
Ishihara Sangyo Ltd.* ........... 161,000 389,258
L'Air Liquide SA ................ 2,035 317,693
Linde AG ........................ 150 91,142
Millennium Chemicals, Inc.* ..... 1,904 33,796
Mitsubishi Chemical Corp. ....... 52,000 168,379
Mitsui Toatsu Chemicals, Inc. ... 15,000 45,721
Monsanto Co. .................... 125,000 4,859,375
Olin Corp. ...................... 26,000 978,250
Royal Plactics Group Ltd.*+ ..... 10,000 185,138
Sanyo Chemicals ................. 20,000 153,700
Sekisui Chemical Co. Ltd. ....... 41,000 414,213
Shin-Etsu Chemical Ltd. ......... 10,000 182,195
Solvay Et Cie Societe Anonyme ... 120 73,529
Sumitomo Chemical Co. Ltd. ...... 31,000 122,865
Toray Industries, Inc. .......... 33,000 203,739
UBE Industries Ltd. ............. 14,000 39,651
-------------
13,700,811
-------------
CHEMICALS--SPECIALTY (0.5%)
Crompton & Knowles Corp. ........ 59,900 1,153,075
Cytec Industries, Inc.* ......... 65,200 2,648,750
Kyowa Hakko Kogyo Co. ........... 8,000 61,066
NGK Insulators .................. 6,000 56,990
SGL Carbon AG+ .................. 15,000 1,892,059
UCAR International, Inc.* ....... 5,000 188,125
-------------
6,000,065
-------------
METALS & MINING (0.7%)
Alusuisse Lonza Holding AG ...... 90 71,744
Broken Hill Proprietary Co. Ltd. 24,800 353,244
Century Aluminum Co. ............ 48,200 831,450
CRA Ltd. ........................ 5,800 91,050
Degussa AG ...................... 250 113,725
Gibraltar Steel Corp.* .......... 38,300 1,005,375
Great Central Mines Ltd.* ....... 120,000 341,468
Gwalia Consolidated Ltd. ........ 95,800 224,633
Kaiser Aluminum Corp.* .......... 48,800 567,300
Mitsubishi Materials Corp. ...... 24,000 96,986
Plutonic Resources Ltd. ......... 30,000 139,496
Reynolds Metals Co. ............. 67,000 3,777,125
RTZ Corp. ....................... 19,347 310,387
Steel Dynamics, Inc.* ........... 46,700 893,138
Sumitomo Metal Mining Co. ....... 10,000 67,438
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Western Mining Corp. Ltd. ....... 40,700 $ 256,539
-------------
9,141,098
-------------
PAPER (0.1%)
Amcor Ltd. ...................... 8,900 57,230
Asia Pacific Resources
International Holdings Ltd.
(Class A)* ..................... 5,000 28,125
Enso Oy (Series R) .............. 30,000 241,453
Fletcher Forestry Shares ........ 4,256 7,131
Grupo Industrial Durango (ADR)* . 12,000 127,500
Mayr-Melnhof Karton Aktien AG*+ . 1,500 73,424
Nippon Paper Industries Co. ..... 37,000 172,524
Oji Paper Co. Ltd. .............. 27,000 170,892
Svenska Cellulosa (Series B) .... 3,200 64,993
UPM-Kymmene Oy .................. 3,292 69,103
-------------
1,012,375
-------------
STEEL (0.2%)
British Steel ................... 69,074 189,921
Hitachi Metals Ltd. ............. 54,000 429,445
Kawasaki Steel .................. 61,000 175,399
Nippon Steel Corp. .............. 147,000 434,108
NKK Corp.* ...................... 85,000 191,564
Sumitomo Metal Industries ....... 320,000 787,497
Thyssen AG ...................... 450 79,806
Usinor Sacilor .................. 3,500 50,930
-------------
2,338,670
-------------
TOTAL BASIC MATERIALS (2.6%) 32,193,019
-------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (1.7%)
B.U.S. Berzelius Umwelt-Service
AG ............................. 16,550 204,348
Culligan WaterTechnologies,Inc.* 21,000 850,500
Daiseki Co. Ltd. ................ 10,000 238,321
Matsuda Sangyo Co. Ltd. ......... 12,000 309,818
Philip Environmental, Inc.* ..... 50,800 736,600
Powerscreen International ....... 75,000 725,926
Rentokil Group PLC .............. 30,000 225,615
Republic Industries, Inc.* ...... 51,100 1,593,681
Superior Services, Inc.* ........ 9,400 191,525
Tomra Systems ASA ............... 110,000 1,718,953
United States Filter Corp.* ..... 27,800 882,650
United Waste Systems, Inc.* ..... 26,000 893,750
USA Waste Services, Inc.* ....... 174,200 5,552,625
WMX Technologies, Inc. .......... 260,000 8,482,500
-------------
22,606,812
-------------
PRINTING, PUBLISHING &
BROADCASTING (2.0%)
British Sky Broadcasting Group
PLC ............................ 33,749 301,796
Cablevision Systems Corp.
(Class A)* ..................... 98,500 3,016,563
Carlton Communications PLC ...... 25,000 220,347
Dainippon Printing Co. Ltd. ..... 12,000 210,345
58
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Elsevier N.V. ................... 60,000 $ 1,013,508
Evergreen Media Corp.
(Class A)* ..................... 55,800 1,395,000
EZ Communications, Inc.* ........ 15,300 560,363
Havas ........................... 200 14,031
Lagardere S.C.A. ................ 2,100 57,635
Liberty Media Group (Class A)* .. 28,500 814,031
Mediaset Spa* ................... 200,000 922,952
Mirror Group Newspapers PLC ..... 70,000 258,421
New York Times Co. .............. 109,200 4,149,600
News Corp. Ltd. ................. 34,500 182,084
Nippon Television Network Corp. . 3,930 1,187,721
Pegasus Media & Communications
(Class B)* ..................... 50 15,000
Reed International .............. 22,000 415,136
Reuters Holdings ................ 36,570 470,800
Sinclair Broadcast Group, Inc.* . 20,800 540,800
Singapore Press Holdings ........ 3,000 59,172
Star Publications BHD ........... 20,000 78,796
Takara Printing Co. ............. 14,000 113,634
TCI Group (Class A)* ............ 41,500 542,094
Time Warner, Inc. ............... 120,050 4,501,875
Tokyo Broadcasting System ....... 56,000 855,885
Toppan Printing Co. ............. 7,000 87,644
Universal Outdoor
Holdings, Inc.* ................ 19,100 448,850
Ver Ned Uitgeversbedr
Ver Bezit N.V. ................. 25,000 522,084
Viacom, Inc. (Class B)* ......... 97,540 3,401,708
-------------
26,357,875
-------------
PROFESSIONAL SERVICES (1.4%)
Adecco SA ....................... 275 69,033
ADT Ltd.* ....................... 1,664 38,064
Apcoa Parking AG ................ 3,000 321,679
Asatsu, Inc. .................... 21,000 667,300
Associated First Capital Corp. .. 71,600 3,159,350
Ceridian Corp.* ................. 141,400 5,726,700
Content Beheer N.V.*+ ........... 53,000 2,023,546
Cordiant PLC* ................... 200,000 352,899
Equity Corporation International* 22,700 454,000
Ha-Lo Industries, Inc.* ......... 57,937 1,593,268
Interim Services, Inc.* ......... 13,800 489,900
Meitec Corp. .................... 55,800 1,064,830
Nackebro Fastighets AB* ......... 310 5,319
Secom Co. ....................... 2,000 121,060
SGS Holdings .................... 25 61,449
Telespectrum Worldwide, Inc.* ... 60,000 952,500
WPP Group PLC ................... 100,000 435,127
-------------
17,536,024
-------------
TRUCKING, SHIPPING (0.2%)
Brambles Industries Ltd. ........ 30,000 585,407
Comfort Group Ltd. .............. 160,000 141,785
Irish Continental Group ......... 30,000 211,063
Kawasaki Kisen* ................. 55,000 125,378
Mitsui O.S.K. Lines Ltd.* ....... 19,000 45,445
Nippon Express Co. Ltd. ......... 25,000 171,401
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Nippon Yusen K.K. ............... 17,000 $ 76,919
Peninsular & Oriental Steam
Navigation Co. ................. 10,466 105,783
Western Bulk Shipping+ .......... 31,500 150,889
Yamato Transport ................ 110,000 1,139,798
-------------
2,753,868
-------------
TOTAL BUSINESS SERVICES (5.3%) . 69,254,579
-------------
CAPITAL GOODS
AEROSPACE (0.9%)
Boeing Co. ...................... 65,350 6,951,606
British Aerospace ............... 5,576 122,269
Coltec Industries, Inc.* ........ 128,000 2,416,000
General Electric Co. PLC ........ 36,076 236,083
Rolls-Royce ..................... 22,528 99,376
United Technologies Corp. ....... 32,600 2,151,600
-------------
11,976,934
-------------
BUILDING & CONSTRUCTION (0.7%)
ABB AG .......................... 550 684,161
American Standard Companies,
Inc.* .......................... 59,900 2,291,175
CSR Ltd. ........................ 16,900 59,105
Cubiertas Y Mzov SA ............. 3,824 294,769
Daiwa House Industry Co. ........ 9,000 115,793
Hitachi Plant Engineering &
Construction Co. ............... 40,000 236,940
Hochtief AG ..................... 1,500 58,975
Japan Industrial Land Development 15,000 284,949
Kajima Corp. .................... 33,000 235,938
Kaneshita Construction Co. ...... 28,000 265,953
Kumagai Gumi Co. ................ 13,000 32,217
MacMahon Holdings Ltd. .......... 700,000 623,162
Mancon BHD* ..................... 47,999 146,344
Mitsui Home Co. Ltd. ............ 42,000 518,608
Nanno Construction Co. Ltd. ..... 26,000 154,909
Nawarat Patanakarn Public Co. ... 80,000 93,582
Nishimatsu Construction Co. ..... 5,000 43,606
Obayashi Corp. .................. 12,000 81,029
Ohmoto Gumi Co. Ltd. ............ 15,000 215,007
Oriental Construction Co. ....... 17,000 218,720
Paul Y.-ITC Construction Holdings 400,000 95,675
Paul Y.-ITC Construction
Holdings--Warrants* ............ 80,000 1,432
Penta Ocean Construction ........ 10,000 44,556
PS Corp. ........................ 31,200 522,649
Sanyo Engineering & Construction,
Inc. ........................... 23,000 204,559
Sekisui House Ltd. .............. 13,000 132,458
Shimizu Corp. ................... 15,000 112,037
Sho Bond Construction ........... 39,900 1,074,933
Suido Kiko Kaisha ............... 3,000 21,242
Taisei Corp. .................... 20,000 103,618
Toda Construction ............... 32,000 243,157
United Engineers Malaysia BHD ... 11,000 99,307
Wesco, Inc. ..................... 9,050 113,311
YTL Corp. BHD ................... 11,000 59,236
-------------
9,483,112
-------------
59
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
BUILDING MATERIALS & FOREST
PRODUCTS (0.6%)
Blue Circle Industries .......... 13,338 $ 81,115
Boral Ltd. ...................... 40,000 113,823
BPB PLC ......................... 90,000 591,276
Buckeye Cellulose Corp.* ........ 18,600 495,225
Chichibu Onoda Cement Co. ....... 11,000 46,827
Cie de St. Gobain ............... 2,100 297,080
Dahl International AB*+ ......... 50,000 1,052,177
Fujikura Ltd. ................... 68,000 544,893
Furukawa Electric Co. ........... 13,000 61,627
Heidelberg Zement AG ............ 1,000 80,712
Holderbank Financiere Glarus AG . 80 57,139
Hughes Supply, Inc. ............. 19,500 840,938
Lafarge Corp. ................... 4,750 284,991
Martin Marietta Materials, Inc. . 59,200 1,376,400
Nichiha Corp. ................... 52,700 932,864
Portland Valderrivas SA* ........ 5,000 336,857
Redland PLC ..................... 9,480 59,520
Rexan PLC ....................... 13,121 81,032
RMC Group PLC ................... 4,518 77,204
Sumitomo Forestry Co. ........... 8,000 97,401
Wolseley PLC .................... 10,088 79,842
-------------
7,588,943
-------------
ELECTRICAL EQUIPMENT (0.9%)
Alcatel Alsthom ................. 5,000 401,658
Daikin Industries Ltd. .......... 5,000 44,469
General Electric Co. ............ 93,900 9,284,363
Kinden Corp. .................... 5,000 63,466
Omron Corp. ..................... 62,000 1,167,084
Schneider SA .................... 2,250 104,033
Siemens AG ...................... 10,400 482,693
Sumitomo Electric Industries .... 17,000 237,803
Yaskawa Electric Corp.* ......... 72,000 249,927
-------------
12,035,496
-------------
MACHINERY (0.8%)
Amada Co. Ltd. .................. 5,000 38,857
Asahi DiamondIndustryCo.Ltd. .... 35,000 317,330
Construcciones Auxiliar Ferro ... 3,000 113,776
Ebara Corp. ..................... 5,000 65,193
Enshu* .......................... 60,000 180,295
Fag Kugelfischer Georg Schaefer . 3,200 43,774
Fanuc Co. ....................... 5,900 189,008
IHC Caland N.V. ................. 10,000 570,966
Ishikawajima Harima Heavy
Industries ..................... 80,000 355,755
Kalmar Industries AB+ ........... 12,000 184,773
Kawasaki Heavy Industries ....... 126,000 521,147
Keyence Corp. ................... 6,000 740,869
Komatsu Ltd. .................... 29,000 237,890
Kubota Corp. .................... 33,000 159,287
Makino Milling Machine Co. ...... 50,000 319,057
Mitsubishi Heavy Industries Ltd. 180,000 1,429,928
Namura Shipbuilding Co. ......... 39,000 127,968
Nireco .......................... 12,000 136,776
Nitta Corp. ..................... 39,000 488,300
Nitto Kohki Co. Ltd. ............ 20,200 723,858
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Rofin-Sinar Technologies, Inc.* . 20,000 $ 235,000
SMC Corp. ....................... 17,400 1,170,417
Sodick Co.* ..................... 126,000 1,044,469
Thai Engine Manufacturing Public
Co.* ........................... 100,000 775,949
Toyoda Automatic Loom Works ..... 5,000 93,688
-------------
10,264,330
-------------
TOTAL CAPITAL GOODS (3.9%) 51,348,815
-------------
CONSUMER CYCLICALS
AIRLINES (0.4%)
British Airways ................. 45,000 466,777
Cathay Pacific Airways .......... 41,000 64,671
Delta Air Lines, Inc. ........... 1,100 77,963
Japan Air Lines Co.* ............ 24,000 127,450
KLM ............................. 14,000 393,602
Lufthansa AG .................... 5,500 74,272
Mesa Airlines, Inc.* ............ 57,000 384,750
Northwest Airlines Corp.
(Class A)* ..................... 78,300 3,063,488
Qantas Airways Ltd. ............. 100,000 166,919
Singapore Airlines Ltd. ......... 73,000 662,546
-------------
5,482,438
-------------
APPAREL, TEXTILE (1.3%)
Adidas AG+ ...................... 5,500 475,370
Carli Gry International A/S* .... 20,000 958,033
Designer Holdings Ltd.* ......... 40,500 653,063
First Sign International
Holdings Ltd. .................. 1,300,000 415,993
King Co.* ....................... 67,000 301,416
Kuraray Co. Ltd. ................ 6,000 55,436
Mohawk Industries, Inc.* ........ 39,200 862,400
Nine West Group, Inc.* .......... 32,800 1,521,100
Polymer Group, Inc.* ............ 38,600 535,575
Reebok International Ltd. ....... 193,000 8,106,000
Renown, Inc.* ................... 120,000 320,180
Stage Stores, Inc.* ............. 34,100 622,325
Teijin Ltd. ..................... 18,000 78,646
Tommy Hilfiger Corp.* ........... 18,500 888,000
Warnaco Group, Inc. (Class A) ... 26,900 796,913
-------------
16,590,450
-------------
AUTO RELATED (0.4%)
Asahi Glass Co. Ltd. ............ 35,000 329,419
Autoliv AB ...................... 6,000 263,081
Autoliv AB (ADS)*+ .............. 6,000 259,500
Bridgestone Corp. ............... 14,000 265,953
Bridgestone Metalpha ............ 15,000 128,227
FCC Co. Ltd. .................... 10,000 271,997
LucasVarity PLC ................. 17,320 66,018
Mabuchi Motor Co. ............... 14,200 714,843
Michelin (CGDE), (Class B) ...... 2,400 129,563
Miller Industries, Inc.* ........ 27,750 555,000
Minebea Co. ..................... 75,000 626,889
NGK Spark Plug Co. .............. 14,000 153,527
Nippondenso Co. Ltd. ............ 21,000 505,915
Team Rental Group, Inc.* ........ 59,300 956,213
Toyoda Gosei* 30,000 208,013
-------------
5,434,158
-------------
60
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
AUTOS & TRUCKS (0.3%)
Fiat Spa ........................ 67,500 $ 204,253
Daimler-Benz AG* ................ 18,250 1,251,218
Honda Motor Corp. ............... 34,000 971,764
Isuzu Motors Ltd. ............... 30,000 133,408
Perusahaan Otomobl Nasional BHD . 9,000 57,018
Peugeot SA ...................... 700 78,790
Toyota Motor Corp. .............. 15,000 431,310
-------------
3,127,761
-------------
FOOD SERVICES, LODGING (1.2%)
AAPC Limited .................... 400,000 241,634
Accor SA ........................ 550 69,644
Brinker International, Inc.* .... 198,700 3,179,200
Doubletree Corp.* ............... 30,627 1,378,215
Fujita Kanko, Inc. .............. 3,000 55,695
Host Marriott Corp.* ............ 200,300 3,204,800
Innkeepers USA Trust ............ 52,300 725,663
Interstate Hotels Co.* .......... 35,100 991,575
Jurys Hotel Group PLC ........... 100,000 466,203
La Quinta Motor Inns, Inc. ...... 191,600 3,664,350
QPQ Corp.* ...................... 16,400 38,950
QPQ Corp.--Warrants* ............ 16,400 2,050
Sanyo Pax Co. Ltd. .............. 35,000 607,461
Suburban Lodges of America* ..... 38,300 612,800
Thistle Hotels PLC* ............. 131,600 409,181
-------------
15,647,421
-------------
HOUSEHOLD FURNITURE,
APPLIANCES (1.2%)
Elamex S.A. de C.V.* ............ 76,700 738,238
Electrolux B .................... 1,100 63,879
First Brands Corp. .............. 115,000 3,263,125
Industrie Natuzzi (ADR) ......... 36,200 832,600
MatsushitaElectricIndustrialCo. . 20,000 326,397
Nippon Electric Glass ........... 26,000 399,620
Philips Electronics ............. 3,000 121,482
Sanyo Electric Co. Ltd. ......... 108,000 447,630
Sharp Corp. ..................... 17,000 242,207
Sunbeam Corp. ................... 360,500 9,282,875
Tostem Corp. .................... 3,000 82,894
Toto ............................ 5,000 56,990
-------------
15,857,937
-------------
LEISURE RELATED (1.7%)
Aristocrat Leisure Ltd. ......... 60,000 155,950
Canal Plus ...................... 350 77,306
Carnival Corp. .................. 11,300 372,900
Cinar Films, Inc. (Class B)* .... 15,000 390,000
Cyrk, Inc.* ..................... 195,000 2,535,000
Disney (Walt) Co. ............... 95,791 6,669,448
Enix Corp.* ..................... 12,900 291,840
Granada Group PLC ............... 17,347 256,013
Harman International
Industries, Inc. ............... 21,800 1,212,625
ITT Corp.* ...................... 85,600 3,712,900
Japan Airport Terminal Co. ...... 44,000 539,504
KTM Motorradholding AG* ......... 3,420 191,097
Learning Company, Inc.* ......... 101,300 1,456,188
Mars Engineering Corp.* ......... 9,000 229,255
Namco Ltd. ...................... 28,000 858,302
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Nelvana Limited*+ ............... 18,000 $ 299,069
Nintendo Co. .................... 14,000 1,002,159
Rank Group PLC .................. 32,498 242,453
Resorts World BHD ............... 24,000 109,285
Sega Enterprises Ltd. ........... 2,000 67,352
SMH AG .......................... 100 61,636
Tag Heuer International SA (ADR)* 50,200 809,475
Thorn EMI ....................... 4,927 116,478
Toei Co. ........................ 33,000 212,572
Toho Co. ........................ 400 58,026
Tokyo Dome Corp. ................ 3,000 52,327
Tourism Holdings Ltd. ........... 70,000 133,614
-------------
22,112,774
-------------
PHOTO & OPTICAL (0.1%)
Fuji Photo Film Co. ............. 12,000 395,821
Noritsu Koki Co. Ltd. ........... 21,000 988,257
-------------
1,384,078
-------------
RETAIL--GENERAL (2.9%)
Ahold N.V. ...................... 1,789 111,771
AutoZone, Inc.* ................. 317,900 8,742,250
Boots Co. PLC ................... 26,111 269,503
British Airport Author PLC ...... 120,000 1,000,108
Carrefour ....................... 825 536,803
Centros Comerciales Pryca SA .... 7,000 148,387
CompUSA, Inc.* .................. 285,000 5,878,125
Consolidated Stores Corp.* ...... 22,500 722,813
Daiei, Inc. ..................... 14,000 106,986
Dai-Ichi Corp. .................. 9,000 181,850
Dayton Hudson Corp. ............. 102,600 4,027,050
Dixons Group PLC* ............... 160,000 1,486,971
Doshisha Co. .................... 7,000 114,843
Eiden Sakakiya Co. Ltd. ......... 28,000 282,877
Federated Department Stores,
Inc.* .......................... 99,800 3,405,675
Fingerhut Companies, Inc. ....... 160,000 1,960,000
Fu Hui Jewellery* ............... 250,000 23,272
Great Universal Stores .......... 28,714 301,043
Harvey Nichols Group PLC*+ ...... 30,600 179,804
Hennes & Mauritz AB
(B Shares) ..................... 500 69,216
Homac Corp. ..................... 11,400 206,718
Home Wide Corp, Inc. ............ 16,000 143,684
Isetan Co. ...................... 64,000 828,944
Karstadt AG ..................... 150 49,909
Kokuyo Co. ...................... 2,000 49,391
Marks & Spencer ................. 60,611 509,819
Marui Co. Ltd. .................. 7,000 126,328
Metro AG* ....................... 950 74,392
Nissen Corp. Ltd. ............... 5,700 39,867
Paris Miki, Inc. ................ 20,000 721,872
Petco Animal Supplies, Inc.* .... 37,900 786,425
Pinault Printemps ............... 350 138,826
Promodes ........................ 300 84,707
Rinascente ...................... 13,000 75,418
Rinascente--Warrants* ........... 650 287
Sainsbury (J) PLC ............... 7,365 48,954
Sato Corp. ...................... 35,700 696,676
Shaddy Co. Ltd. ................. 3,000 47,923
Sriwani Holdings BHD ............ 400,000 1,077,014
61
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Swank International Manufacturing 300,000 $ 45,381
St. Dupont*+ .................... 29,100 987,106
Takihyo Co. Ltd. ................ 27,000 326,397
Warehouse Group Ltd. ............ 200,900 482,889
Xebio Co. ....................... 9,800 291,944
-------------
37,390,218
-------------
TOTAL CONSUMER CYCLICALS (9.5%) 123,027,235
-------------
CONSUMER NONCYCLICALS
BEVERAGES (0.9%)
Asahi Breweries Ltd. ............ 8,000 82,894
Bass Breweries .................. 13,487 189,689
Cadbury Schweppes PLC ........... 18,792 158,548
Carlsberg 'A' ................... 900 60,845
Coca-Cola Amatil Ltd. ........... 7,600 81,250
Coca-Cola Co. ................... 122,000 6,420,250
Fraser & Neave .................. 30,000 308,726
Grand Metropolitan .............. 85,339 671,032
Guinness PLC .................... 164,568 1,289,791
Heineken N.V. ................... 801 141,698
Kirin Brewery Co. ............... 16,000 157,499
Lion Nathan Ltd. ................ 60,000 143,794
Louis Dreyfus Citrus*+ .......... 43,500 1,425,267
Louis Vuitton Moet Hennessy ..... 1,500 418,907
Panamerican Beverages ........... 9,000 421,875
Quilmes Industrial Quins (ADR) .. 33,300 303,863
-------------
12,275,928
-------------
CONTAINERS (0.4%)
Crown Cork & Seal Co., Inc. ..... 75,000 4,078,125
Hub Group, Inc. (Class A)* ...... 28,900 773,075
Toyo Seikan Kaisha .............. 3,000 72,274
-------------
4,923,474
-------------
DRUGS (4.7%)
Amgen, Inc.* .................... 61,800 3,360,375
Astra AB (A Shares) ............. 13,000 642,451
Biogen, Inc.* ................... 150,000 5,812,500
Centocor, Inc.* ................. 152,200 5,441,150
Daiichi Pharmaceutical Co. ...... 5,000 80,304
Eisai Co. Ltd. .................. 5,000 98,437
Geltex Pharmaceuticals, Inc.* ... 58,200 1,411,350
Glaxo Wellcome PLC .............. 32,082 521,018
Hafslund Nycomed ASA
(B Shares) ..................... 11,700 80,300
Medicis Pharmaceutical Corp.
(Class A)* ..................... 13,500 594,000
MedImmune, Inc.* ................ 32,800 557,600
Merck & Co., Inc. ............... 103,000 8,162,750
Novartis AG* .................... 1,571 1,799,285
Novo-Nordisk AS (ADR)
(B Shares) ..................... 3,000 565,647
Nycomed ASA (B Shares)* ......... 11,700 180,078
Pfizer, Inc. .................... 136,200 11,287,575
Revco D.S., Inc.* ............... 88,000 3,256,000
Roche Holdings AG Genusscheine .. 201 1,564,001
Rohto Pharmaceutical Co. ........ 7,000 67,697
Santen Pharmaceutical Co. ....... 50,000 1,036,180
Schering AG ..................... 1,250 105,521
Smithkline Beecham PLC .......... 130,169 1,805,124
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Smithkline Beecham PLC (ADR) .... 46,000 $ 3,128,000
Taisho Pharmaceutical Co. ....... 31,000 730,766
Takeda Chemical Industries ...... 11,000 230,809
United Natural Foods, Inc.* ..... 39,200 666,400
Warner-Lambert Co. .............. 81,500 6,112,500
Yamanouchi Pharmaceutical ....... 54,000 1,109,749
Zeneca Group PLC ................ 30,000 846,700
-------------
61,254,267
-------------
FOODS (1.1%)
Ajinomoto Co., Inc. ............. 12,000 122,269
BSN Gervais Danone .............. 1,250 174,183
Campbell Soup Co. ............... 62,635 5,026,459
Fyffes PLC ...................... 900,000 1,678,329
Nabisco Holdings Corp.
(Class A) ...................... 125,040 4,860,930
Nestle AG ....................... 630 676,362
Nippon Meat Packers, Inc. ....... 4,000 51,809
Nissin Food Products Co. ........ 3,000 63,984
Nutrica Verenigde Bedrijven N.V.+ 2,600 394,817
Oie Sangyo Co. Ltd. ............. 6,000 77,714
PT Sekar Bumi ................... 182,500 115,898
Shriram Industrial Enterprises
Ltd. (GDR)*+ ................... 24,000 3,600
Tingyi Holdings Corp.* .......... 500,000 130,907
Viscofan Envoltura .............. 9,000 131,814
Warabeya Nichiyo Co. Ltd.* ...... 18,000 153,873
Yamakazi Baking Co. ............. 4,000 63,898
-------------
13,726,846
-------------
HOSPITAL SUPPLIES & SERVICES (2.0%)
Cochlear Ltd. ................... 130,000 369,923
Columbia/HCAHealthcareCorp. ..... 211,500 8,618,625
Compdent Corp.* ................. 18,900 666,225
Coventry Corp.* ................. 56,100 519,802
Enterprises Systems, Inc.* ...... 39,700 932,950
National Surgery Centers, Inc.* . 21,800 828,400
Oxford Health Plans, Inc.* ...... 64,000 3,748,000
Pacificare Health Systems, Inc.
(Class B)* ..................... 50,300 4,288,075
Rotech Medical Corp.* ........... 35,700 749,700
Scandinavian Mobility
International, Inc.+ ........... 27,600 454,760
Steris Corp.* ................... 97,500 4,241,250
Tamro Group ..................... 17,500 116,866
-------------
25,534,576
-------------
RETAIL--FOOD (0.2%)
Daimon Co. Ltd. ................. 14,000 224,851
Ito Yokado Co. Ltd. ............. 10,000 435,196
Jusco Co. ....................... 9,000 305,414
McBride PLC ..................... 60,000 139,789
Ministop Co. Ltd. ............... 5,500 134,401
Santa Isabel S.A. (ADR) ......... 27,400 619,925
Seven-Eleven Japan Ltd. ......... 12,000 702,530
Tesco PLC ....................... 48,646 295,424
-------------
2,857,530
-------------
62
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
SOAPS & TOILETRIES (1.0%)
BIC ............................. 600 $ 89,968
Colgate Palmolive Co. ........... 61,660 5,688,135
Gillette Corp. .................. 74,850 5,819,588
KAO Corp. ....................... 10,000 116,570
L'Oreal ......................... 1,605 604,446
Shiseido Co. .................... 42,000 485,968
Unilever ........................ 16,865 409,247
Unilever N.V. CVA ............... 2,553 451,333
-------------
13,665,255
-------------
TOBACCO (1.6%)
BAT Industries .................. 100,000 829,997
Imperial Tobacco PLC* ........... 39,999 258,329
Loews Corp. ..................... 45,000 4,241,250
Philip Morris Cos., Inc. ........ 120,500 13,571,313
RJ Reynolds BHD ................. 200,000 542,467
Rothmans of Pall Mall BHD ....... 6,000 62,958
Swedish Match Co. AB* ........... 360,000 1,267,012
-------------
20,773,326
-------------
TOTAL CONSUMER NONCYCLICALS (11.9%) 155,011,202
-------------
CREDIT SENSITIVE
BANKS (1.9%)
ABN Amro Holdings ............... 3,879 252,220
Akita Bank ...................... 18,000 111,907
Asahi Bank Ltd. ................. 58,000 515,845
Banca Commerciale Italiana ...... 35,000 63,684
Banco Bilbao Vizcaya SA ......... 4,050 218,845
Banco Latinoamericano de
Exportaciones S.A. (E Shares) .. 9,500 482,125
Banco Popular ................... 1,000 196,564
Banco Santander Chile (ADR) ..... 16,000 240,000
Banco Santander SA .............. 2,691 172,377
Bancomer B Local* ............... 50,000 19,944
Bank Austria AG ................. 920 67,975
Bank of Tokyo-Mitsubishi Bank ... 72,000 1,336,672
Banque Nationale de Paris ....... 2,250 87,077
Barclays Bank ................... 48,309 827,995
Chase Manhattan Corp. ........... 15,000 1,338,750
Cie Fin Paribas Series A ........ 1,400 94,682
CS Holdings ..................... 4,550 467,408
Dai-Ichi Kangyo Bank ............ 10,000 144,202
Den Danske Bank ................. 1,300 104,891
Deutsche Bank AG ................ 13,300 620,574
Dresdner Bank AG ................ 2,900 86,691
First Union Corp. ............... 128,500 9,509,000
Fokus Bank ...................... 8,000 55,157
Fuji Bank Ltd. .................. 63,000 919,351
Generale de Banque .............. 200 71,763
Grupo Financiero Bantorte (Class
B)* ............................ 22,500 22,637
Hang Seng Bank .................. 39,000 473,980
HSBC Holdings PLC (H.K.$) ....... 20,000 427,953
HSBC Holdings PLC ............... 20,000 435,813
International Bank of Asia ...... 270,000 179,779
Istituto Bancario San Paolo di
Torino ......................... 15,000 91,966
Istituto Mobilare Italiano ...... 10,000 85,703
Kredietbank ..................... 170 55,770
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Lloyds TSB Group PLC ............ 115,481 $ 851,660
Malayan Banking Berhad .......... 18,000 199,564
Mediobanca Spa .................. 10,000 53,960
Mitsubishi Trust&BankingCorp. ... 23,000 307,832
National Australia Bank Ltd. .... 37,700 443,495
Overseas Union Bank Ltd. ........ 40,000 308,726
Sakura Bank Ltd. ................ 82,000 586,271
Schweizerische Bankgesellschaft . 610 534,576
Shizuoka Bank ................... 44,000 467,317
Skandinaviska Enskilda Banken
(Series A) ..................... 8,000 82,121
Societe Generale ................ 1,400 151,373
Sparbanken Sverige AB
(A Shares) ..................... 16,000 274,519
Sumitomo Bank Ltd. .............. 68,000 980,572
Svenska Handelsbanken
(Series A) ..................... 3,100 89,101
Toho Bank ....................... 20,000 121,233
Union Bank of Hong Kong* ........ 20,000 25,212
-------------
25,256,832
-------------
FINANCIAL SERVICES (3.6%)
Aames Financial Corp. ........... 20,300 728,263
American Express Co. ............ 177,300 10,017,450
Beneficial Corp. ................ 51,750 3,279,656
CMIC Finance & Securities Co.
Ltd. ........................... 200,000 288,544
Credit Local de France .......... 3,500 304,905
Credit Saison Co. ............... 64,000 1,431,310
Daiwa Securities Co. Ltd. ....... 19,000 168,984
Dean Witter Discover & Co. ...... 119,600 7,923,500
Groupe Bruxelles Lambert SA ..... 450 57,986
Hambrecht & Quist Group* ........ 33,200 717,950
Hong Leong Finance Ltd. ......... 50,000 116,487
ING Groep N.V. .................. 12,194 438,763
Invesco ......................... 60,000 266,730
JCG Holdings .................... 60,000 58,569
MBNA Corp. ...................... 189,500 7,864,250
Merrill Lynch & Co., Inc. ....... 85,000 6,927,500
Nichiei Co. Ltd. ................ 20,000 1,469,649
Nomura Securities Co. ........... 41,000 616,009
Oxford Resources Corp.
(Class A)* ..................... 35,000 1,080,625
Promise Co. Ltd. ................ 12,500 615,232
RAC Financial Group, Inc.* ...... 25,300 534,463
Sanyo Shinpan Finance Co. Ltd. .. 9,000 563,423
Schroders PLC ................... 3,875 100,570
Takefuji Corp.* ................. 6,500 468,656
Union Acceptance Corp.
(Class A)* ..................... 50,600 898,150
Yamaichi Securities ............. 70,000 311,286
-------------
47,248,910
-------------
INSURANCE (3.1%)
Aegon N.V. ...................... 15,000 955,370
Allianz AG Holding .............. 600 1,080,062
AMEV N.V. ....................... 17,000 594,973
Assicurazioni Generali .......... 14,300 271,035
Commercial Union PLC ............ 10,726 125,591
Corporacion Mapfre Cia
Inter SA ....................... 12,000 731,682
63
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Fortis AG ....................... 740 $ 118,814
General Accident ................ 8,971 117,797
Gio Australia Holdings Ltd.* .... 100,000 255,942
Istituto Naz Delle Assicurazioni 60,000 78,161
ITT Hartford Group, Inc. ........ 23,600 1,593,000
Koa Fire & Marine ............... 35,000 169,847
Legal & General Group ........... 23,090 147,146
Life Re Corp. ................... 150,000 5,793,750
MGIC Investment Corp. ........... 66,400 5,046,400
Mitsui Marine &
Fire Insurance Co. ............. 13,000 69,934
Pacific & Orient BHD ............ 150,000 362,304
PennCorp Financial Group, Inc. .. 126,100 4,539,600
PMI Group, Inc. ................. 10,900 603,588
Prudential Corp. ................ 42,249 355,732
Royal & Sun Alliance Insurance
Group PLC ...................... 33,539 255,390
Schweizerische Ruckversicherungs
Gesellschaft ................... 420 448,397
Skanska AB (Series B) ........... 1,800 79,584
Sumitomo Marine & Fire Insurance
Co. ............................ 10,000 62,171
TIG Holdings, Inc. .............. 141,000 4,776,375
Tokio Marine & Fire
Insurance Co. .................. 34,000 320,007
Travelers Group, Inc. ........... 248,534 11,277,230
-------------
40,229,882
-------------
REAL ESTATE (0.4%)
British Land Co. ................ 8,416 74,538
Cheung Kong Holdings ............ 35,000 311,106
City Developments Ltd. .......... 95,000 855,428
Daibiru Corp. ................... 28,000 258,700
DBS Land ........................ 17,000 62,567
Diligentia AB* .................. 800 12,611
IOI Corp. BHD ................... 100,000 153,633
JP Realty, Inc. ................. 22,100 571,838
Land Securities PLC ............. 9,978 127,174
Lend Lease Corp. Ltd. ........... 4,100 79,517
Macerich Co. .................... 20,900 546,013
MEPC PLC ........................ 8,200 60,825
Mitsubishi Estate Co. ........... 71,000 729,557
Mitsui Fudosan .................. 20,000 200,328
New World Development Co. ....... 29,000 195,908
Sap Holdings* ................... 40,000 191,645
Sun Hung Kai Properties ......... 23,000 281,757
Wharf Holdings .................. 17,000 84,841
-------------
4,797,986
-------------
UTILITY--ELECTRIC (1.1%)
British Energy PLC* ............. 418,000 1,052,631
China Light & Power Co. Ltd. .... 11,000 48,924
Cinergy Corp. ................... 46,600 1,555,275
Edison Spa ...................... 15,000 94,932
Electrabel ...................... 870 206,100
Endesa .......................... 5,741 408,906
Enersis S.A. (ADR) .............. 6,000 166,500
FPL Group, Inc. ................. 75,700 3,482,200
Gas Y Electridad SA (Series 2) .. 5,000 319,899
Hidroelectrica del Cantabrico ... 15,000 572,927
Iberdrola II .................... 30,000 425,504
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Iberdrola SA .................... 55,303 $ 784,388
Kansai Electric Power Co., Inc. . 22,400 464,209
National Grid Group PLC ......... 150,027 502,457
National Power PLC .............. 120,560 1,009,938
Powergen PLC (ADR) .............. 1,250 49,375
RWE AG .......................... 4,800 200,884
Tenaga Nasional BHD ............. 49,000 234,765
Tohoku Electric Power Co., Inc. . 11,500 228,391
Tokyo Electric Power Co., Inc. .. 28,000 614,109
Tractebel Investment
International Capital .......... 220 102,534
Tractebel Investment
International Capital--
Warrants* ...................... 220 0
United Utilities PLC ............ 8,965 95,373
Veba AG ......................... 19,550 1,124,366
Viag AG ......................... 500 195,769
-------------
13,940,356
-------------
UTILITY--GAS (0.0%)
Scottish Power PLC .............. 13,327 80,363
Thames Water .................... 7,439 78,055
-------------
158,418
-------------
UTILITY--TELEPHONE (0.9%)
British Telecommunications ...... 121,891 823,761
Empresas Telex-Chile S.A. (ADR) . 40,000 185,000
Frontier Corp. .................. 106,000 2,398,250
Hellenic Telecommunication
Organization SA ................ 17,000 292,773
Kon. PTT Nederland+ ............. 40,000 1,524,890
LCI International, Inc.* ........ 55,594 1,195,271
PT Indonesian Satellite (ADR) ... 6,000 164,250
Singapore Telecommunications Ltd. 20,000 47,166
Tele Danmark AS (B Shares) ...... 2,000 110,412
Telecom Corp. of New Zealand .... 23,300 118,927
Telecom Italia Spa .............. 37,500 97,404
Telefonica de Espana SA ......... 23,566 547,694
Telefonica del Peru S.A. (ADR) .. 32,000 604,000
Telekom Malaysia BHD ............ 28,000 249,456
Telephone & Data Systems, Inc. .. 42,100 1,526,125
WorldCom, Inc.* ................. 80,115 2,087,997
-------------
11,973,376
-------------
TOTAL CREDIT SENSITIVE (11.0%) . 143,605,760
-------------
ENERGY
COAL & GAS PIPELINES (0.3%)
British Gas ..................... 100,557 386,733
Nabors Industries, Inc.* ........ 170,000 3,272,500
OMV AG .......................... 5,000 563,844
-------------
4,223,077
-------------
OIL--DOMESTIC (1.4%)
Apache Corp. .................... 138,100 4,885,288
Costilla Energy, Inc.* .......... 69,500 946,938
KCS Energy, Inc. ................ 22,400 800,800
Louis Dreyfus Natural Gas Corp.* 139,100 2,382,088
Louisiana Land & Exploration
Corp. .......................... 92,200 4,944,225
Ultramar Diamond Shamrock Corp. . 19,482 616,118
64
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Union Pacific Resources Group,
Inc. .......................... 108,439 $ 3,171,841
XCL Corp.* ...................... 200,000 37,500
-------------
17,784,798
-------------
OIL--INTERNATIONAL (1.2%)
British Petroleum Co. PLC ....... 100,804 1,209,675
Canadian Occidental ............. 6,000 96,000
Cosmo Oil Co. Ltd. .............. 11,000 52,906
Elf Aquitaine ................... 8,250 750,983
ENI Spa ......................... 108,500 556,852
ENI Spa (ADR) ................... 5,000 258,125
Exxon Corp. ..................... 92,800 9,094,400
Japan Energy Corp. .............. 19,000 51,679
Mitsubishi Oil Co. .............. 8,000 47,872
Nippon Oil Co. Ltd. ............. 22,000 113,030
Norsk Hydro AS .................. 2,100 113,785
Oil Search Ltd. ................. 340,000 662,110
Petrofina SA .................... 290 92,393
Repsol SA ....................... 12,748 489,368
Royal Dutch Petroleum Co. ....... 8,553 1,498,687
Tatneft (ADR)* .................. 7,000 336,000
Total Campagnie Francaise ....... 900 73,200
-------------
15,497,065
-------------
OIL--SUPPLIES & CONSTRUCTION (3.1%)
Baker Hughes, Inc. .............. 221,250 7,633,125
BJ Services Co.* ................ 148,600 7,578,600
Bouygues Offshore SA (ADR)* ..... 80,000 1,030,000
Coflexip (ADR)* ................. 11,000 288,750
Halliburton Co. ................. 50,000 3,012,500
Noble Drilling Corp.* ........... 180,700 3,591,413
Parker Drilling Co.* ............ 235,100 2,262,838
Rowan Cos., Inc. ................ 59,800 1,352,975
Schlumberger, Ltd. .............. 76,800 7,670,400
Transocean Offshore, Inc. ....... 105,000 6,575,625
-------------
40,996,226
-------------
RAILROADS (1.2%)
Burlington Northern Santa Fe .... 46,900 4,050,988
Canadian Pacific Ltd. ........... 216,000 5,724,000
East Japan Railway Co. .......... 55 247,431
Genesee & Wyoming, Inc.
(Class A)* ..................... 29,600 1,028,600
Hankyu Corp. .................... 40,000 198,601
Kinki Nippon Railroad Co. ....... 28,650 178,862
Odakyu Electric Railway Co. ..... 4,000 24,005
Tobu Railway Co. Ltd. ........... 14,000 68,543
Tokyu Corp. ..................... 20,000 113,634
Union Pacific Corp. ............. 69,000 4,148,625
-------------
15,783,289
-------------
TOTAL ENERGY (7.2%) ............ 94,284,455
-------------
TECHNOLOGY
ELECTRONICS (4.9%)
Altera Corp.* ................... 92,000 6,687,250
Austria Mikro Systeme
International+ ................. 1,430 110,412
BMC Industries, Inc. ............ 43,900 1,382,850
Cable & Wireless ................ 32,650 271,553
Cisco Systems, Inc.* ............ 224,800 14,302,890
Electrocomponents PLC ........... 8,375 66,284
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Exabyte Corp.* .................. 45,400 $ 607,225
Fujimi, Inc. .................... 6,100 328,676
Hirose Electric Co. Ltd. ........ 15,000 869,096
Hitachi Ltd. .................... 58,000 540,886
HMT Technology Corp.* ........... 33,800 507,528
Hoya Corp. ...................... 29,000 1,139,366
IDT Corp.* ...................... 43,000 473,000
Insight Enterprises, Inc.* ...... 18,000 504,000
Intel Corp. ..................... 50,000 6,546,875
Intergraph Corp.* ............... 100,000 1,025,000
Kent Electronics Corp.* ......... 29,500 759,625
Kyocera Corp. ................... 1,000 62,343
Murata Manufacturing Co. Ltd. ... 5,000 166,221
National Semiconductor Corp.* ... 30,000 731,250
NEC Corp. ....................... 11,000 132,976
Network General Corp.* .......... 25,500 771,375
Rohm Co. Ltd. ................... 11,000 721,872
Seagate Technology, Inc.* ....... 132,577 5,236,792
Sony Corp. ...................... 8,000 524,307
Systemsoft Corp.* ............... 38,500 572,688
TDK Corp. ....................... 11,000 717,123
Teradyne, Inc.* ................. 50,000 1,218,750
Texas Instruments, Inc. ......... 28,000 1,785,000
Tokyo Electron .................. 14,000 429,151
Uniphase Corp.* ................. 11,800 619,500
Westell Technologies Inc.* ...... 22,700 519,263
Yokogawa Electric Corp. ......... 160,000 1,381,573
3Com Corp.* ..................... 155,000 11,373,120
3D Labs, Inc. Ltd.* ............. 18,300 420,900
-------------
63,506,720
-------------
OFFICE EQUIPMENT (0.8%)
Applix, Inc.* ................... 29,500 645,313
Canon, Inc. ..................... 14,000 309,472
Compaq Computer Corp.* .......... 62,770 4,660,673
Oce-Van De Grinten N.V. ......... 460 49,921
Read-Rite Corp.* ................ 39,800 1,004,950
Ricoh Elemex Corp. .............. 7,000 97,919
Sterling Software, Inc.* ........ 67,800 2,144,175
Storage Technology Corp.* ....... 30,200 1,438,275
Sun Microsystems, Inc.* ......... 20,000 513,750
-------------
10,864,448
-------------
OFFICE EQUIPMENT SERVICES (2.8%)
Accugraph Corp. (Class A)* ...... 30,000 23,882
Comverse Technology, Inc.* ...... 54,100 2,045,656
Electronic Data Systems Corp. ... 83,700 3,620,025
First Data Corp. ................ 100,600 3,671,900
Fuji Soft Corp. ................. 12,000 366,808
Informix Corp.* ................. 410,000 8,353,750
Istar Internet, Inc.*+ .......... 38,000 127,661
Merkantildata A/S ............... 2,000 36,751
Microsoft Corp.* ................ 50,800 4,197,350
Misys PLC ....................... 25,000 478,169
Oracle Corp.* ................... 214,550 8,957,463
Premisys Communications, Inc.* .. 13,400 452,250
SAP AG .......................... 1,600 218,872
Sterling Commerce, Inc.* ........ 101,448 3,576,042
Structural Dynamics Research
Corp. (Class A)* ............... 27,800 556,000
-------------
36,682,579
-------------
65
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
TELECOMMUNICATIONS (3.1%)
Act Networks, Inc.* ............. 17,800 $ 649,700
Architel Systems Corp.* ......... 30,300 186,989
BCE Mobile Communications, Inc.* 4,000 118,605
Cable Design Technologies* ...... 21,000 653,625
Cellular Communications Puerto
Rico, Inc.* .................... 3,600 71,100
Comnet Cellular, Inc.* .......... 21,600 602,100
DDI Corp. ....................... 129 853,242
Deutsche Telekom AG (ADR)* ...... 272,000 5,542,000
DSC Communications Corp.* ....... 71,650 1,280,744
Ericsson (L.M.) Telephone Co.
(Series B) ..................... 14,700 454,849
Filtronic Comtek PLC ............ 300,000 1,896,402
Forval Corp. .................... 3,000 116,829
ICG Communications, Inc.* ....... 83,686 1,474,966
KoreaMobileTelecommunications
Corp. (ADR) .................... 127,720 1,644,395
MFS Communications Co., Inc.* ... 72,639 3,958,825
Millicom International Cellular
SA* ............................ 13,300 427,263
NetCom Systems AB (B Shares)* ... 44,000 712,988
NetscapeCommunicationsCorp.* .... 63,700 3,622,938
Nokia Corp. (ADR) ............... 95,500 5,503,188
Rogers Cantel Mobile
Communications (Class B)* ...... 6,000 118,970
Scientific Atlanta, Inc. ........ 310,500 4,657,500
Spectrum Network Systems*+ ...... 440,000 153,883
Tadiran Telecommunications Ltd. . 66,600 1,490,175
Telecom Italia Mobile Spa ....... 125,000 316,029
Vanguard Cellular Systems, Inc.
(Class A)* ..................... 100,000 1,575,000
Vodafone Group .................. 215,846 911,473
Winstar Communications, Inc.* ... 33,600 705,600
Xircom* ......................... 32,500 706,875
-------------
40,406,253
-------------
TOTAL TECHNOLOGY (11.6%) 151,460,000
-------------
DIVERSIFIED
MISCELLANEOUS (1.2%)
Allied Signal, Inc. ............. 116,500 7,805,500
Austral Enterprises BHD ......... 23,999 44,853
BTR PLC ......................... 78,068 379,817
Cie Generale des Eaux ........... 9,450 1,171,119
Crean (James) PLC-Units ......... 40,000 125,451
Damskibs AS (Class B) ........... 5 128,672
GKN PLC ......................... 5,325 91,314
Hanson PLC ...................... 133,335 186,159
Hutchison Whampoa ............... 78,000 612,645
Indonesia Fund, Inc.* ........... 4,000 39,000
International UNP Holdings* ..... 143,000 29,242
International UNP
Holdings-Warrants* ............. 125,000 0
Invesco Funding LLC* ............ 12,000 53,346
Lyonnais des Eaux Dumez ......... 1,000 93,071
Mitsubishi Corp. ................ 71,000 735,688
Mitsui & Co. .................... 39,000 316,553
Montedison Spa* ................. 74,000 50,443
Pilkington PLC .................. 17,397 46,641
Sime Darby BHD .................. 180,000 709,167
<PAGE>
- -------------------------------------------------------------
NUMBER VALUE
OF SHARES (NOTE 1)
- -------------------------------------------------------------
Smiths Industries ............... 5,559 $ 76,280
Sophus Berendsen A/S 'B' ........ 385 49,571
Sumitomo Corp. .................. 22,000 173,439
Taiwan Fund ..................... 5,000 111,250
Tomkins PLC ..................... 70,000 321,977
U.S. Industries, Inc.* .......... 76,000 2,612,500
Williams Holdings PLC ........... 10,569 62,193
-------------
TOTAL DIVERSIFIED (1.2%) ....... 16,025,891
-------------
TOTAL COMMON STOCKS AND OTHER
INVESTMENTS (64.2%)
(Cost $748,000,811) ............ 836,210,956
-------------
PREFERRED STOCKS:
CONSUMER CYCLICALS
AIRLINES (0.1%)
Continental Airlines Finance
Trust
8.5% Conv. ..................... 7,500 502,500
-------------
APPAREL, TEXTILE (0.0%)
Designer Finance Trust
6.0% Conv. ..................... 9,600 444,000
-------------
RETAIL--GENERAL (0.0%)
Fielmann AG ..................... 4,200 132,375
-------------
TOTAL CONSUMER CYCLICALS (0.1%) 1,078,875
-------------
CONSUMER NONCYCLICALS (0.0%)
CONTAINERS
Crown Cork & Seal Co., Inc.
4.5% Conv. ..................... 9,500 494,000
-------------
CREDIT SENSITIVE
FINANCIAL SERVICES (0.0%)
Money Store
6.5% Conv. ..................... 16,500 451,688
-------------
INSURANCE (0.1%)
PennCorp Financial Group, Inc.
7.0% Conv.+ .................... 15,500 922,250
-------------
TOTAL CREDIT SENSITIVE (0.1%) .. 1,373,938
-------------
TECHNOLOGY TELECOMMUNICATIONS (0.3%)
MFS Communications Co., Inc.
8.0% Conv. ..................... 25,800 2,354,250
Nokia Oy Cum .................... 16,775 973,550
-------------
TOTAL TECHNOLOGY (0.3%) ........ 3,327,800
-------------
Total Preferred Stocks (0.5%)
(Cost 4,659,785) ............. 6,274,613
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
------------
<S> <C> <C>
LONG-TERM DEBT SECURITIES:
BASIC MATERIALS (0.7%)
CHEMICALS
Reliance Industries Ltd.
10.5%, 08/06/46+ ........... $7,950,000 8,562,548
-------------
BUSINESS SERVICES
ENVIRONMENTAL CONTROL (0.1%)
United Waste Systems, Inc.
4.5% Conv., 06/01/01+ ..... 710,000 859,100
-------------
</TABLE>
66
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
<S> <C> <C>
PRINTING, PUBLISHING &
BROADCASTING (0.7%)
Time WarnerCommunicationsCo. ...
9.15%, 02/01/23 ................ $ 8,035,000 $ 8,707,353
--------------
PROFESSIONAL SERVICES (0.1%)
Career Horizons, Inc.
7.0% Conv., 11/01/02 ........... 305,000 598,181
First Financial Management Corp.
5.0% Conv., 12/15/99 ........... 985,000 1,656,031
--------------
2,254,212
--------------
TOTAL BUSINESS SERVICES (0.9%) 11,820,665
--------------
CAPITAL GOODS (0.1%)
MACHINERY
DII Group, Inc.
6.0% Conv., 10/15/02+ .......... 740,000 703,000
--------------
CONSUMER CYCLICALS
APPAREL, TEXTILE (0.1%)
Nine West Group, Inc.
5.5% Conv., 07/15/03+ .......... 1,165,000 1,159,175
--------------
FOOD SERVICES, LODGING (0.1%)
HFS, Inc.
4.5% Conv., 10/01/99 ........... 450,000 1,489,500
--------------
RETAIL--GENERAL (0.2%)
Saks Holdings, Inc.
5.5% Conv., 09/15/06 ........... 705,000 648,600
U.S. Office Products Co.:
5.5% Conv., 02/01/01 ........... 965,000 1,254,500
5.5% Conv. Sub. Note, 05/15/03+ 35,000 32,550
--------------
1,935,650
--------------
TOTAL CONSUMER CYCLICALS (0.4%) 4,584,325
--------------
CONSUMER NONCYCLICALS
DRUGS (0.1%)
MedImmune, Inc.
7.0% Conv. Sub., 07/01/03+ .... 780,000 840,450
Quintiles Transnational Corp.
4.25% Conv., 05/31/00+ ......... 690,000 724,500
--------------
1,564,950
--------------
HOSPITAL SUPPLIES &
SERVICES (0.3%)
American Medical Response, Inc.
5.25% Conv., 02/01/01+ ......... 755,000 813,513
Healthsouth Corp.
5.0% Conv., 04/01/01 ........... 405,000 837,844
Phycor, Inc.
4.5% Conv., 02/01/03 ........... 695,000 676,756
Tenet Healthcare Corp.
6.0% Conv., 12/01/05 ........... 665,000 698,250
--------------
3,026,363
--------------
TOTAL CONSUMER NONCYCLICALS (0.4%) 4,591,313
--------------
<PAGE>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
CREDIT SENSITIVE
BANKS (1.3%)
Deutsche Bank
6.7%, 12/13/06 ................. $ 8,000,000 $ 7,850,880
St. George Bank Ltd.
7.15%, 10/15/05+ ............... 9,525,000 9,509,951
--------------
17,360,831
--------------
FINANCIAL SERVICES (0.2%)
Aames Financial Corp.
5.5% Conv., 03/15/06+ .......... 530,000 716,163
Leasing Solutions, Inc.
6.875% Conv., 10/01/03 ......... 1,045,000 1,045,000
RAC Financial Group, Inc.
7.25% Conv. Sub., 08/15/03+ ... 505,000 674,806
Safeguard Scientifics
6.0% Conv., 02/01/06+ .......... 475,000 517,750
--------------
2,953,719
--------------
FOREIGN GOVERNMENT (1.1%)
Province of Quebec
7.5%, 07/15/23 ................. 5,500,000 5,472,775
Republic of Poland
4.0% PDI, 10/27/14 (a) ......... 11,000,000 9,295,000
--------------
14,767,775
--------------
INSURANCE (0.8%)
Conseco Finance Trust II
8.7%, 11/15/26 ................. 5,000,000 5,025,850
Corporacion Mapfre
8.5% Conv., 02/27/99 ........ Peseta 4,700,000 36,230
John Hancock Mutual Life
Insurance Co.
7.375%, 02/15/24+ .............. $ 5,000,000 4,819,350
Penn Treaty American Corp.
6.25% Conv., 12/01/03+ ......... 700,000 759,500
--------------
10,640,930
--------------
MORTGAGE RELATED (3.4%)
Federal Home Loan
Mortgage Corp.
7.0%, 09/01/11 ................. 10,152,376 10,149,209
Federal National Mortgage
Association:
6.5%, 01/01/11 ................. 934,876 917,932
6.0%, 04/01/11 12,327,153 11,853,334
6.5%, 08/01/11 8,894,098 8,732,893
7.0%, 05/01/26 ................. 10,215,115 9,994,857
7.0%, 08/01/26 ................. 2,456,571 2,403,603
--------------
44,051,828
--------------
UTILITY--ELECTRIC (0.4%)
California Energy Co., Inc.
9.5%, 09/15/06 ................. 4,760,000 4,926,600
--------------
UTILITY--GAS (0.7%)
RAS Laffan Liquid Natural Gas
8.294%, 09/15/14+ .............. 8,500,000 8,637,828
--------------
67
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Continued)
December 31, 1996
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
U.S. GOVERNMENT (10.4%)
U.S. Treasury:
7.25% Note, 02/15/98 ........... $24,450,000 $ 24,778,556
6.375% Note, 05/15/99 .......... 53,490,000 53,958,035
6.75%, Note 04/30/00 ........... 4,000,000 4,076,252
6.5% Note, 08/31/01 ............ 7,000,000 7,076,566
6.25% Note, 10/31/01 ........... 10,230,000 10,236,394
5.75% Note, 08/15/03 ........... 32,825,000 31,840,250
6.5% Note, 08/15/05 ............ 4,015,000 4,042,603
--------------
136,008,656
--------------
TOTAL CREDIT SENSITIVE (18.3%) 239,348,167
--------------
ENERGY
COAL & GAS PIPELINES (0.1%)
Nabors Industries, Inc.
5.0% Conv., 05/15/06 ........... 545,000 675,800
Swift Energy Co.
6.25% Conv., 11/15/06 .......... 515,000 565,213
--------------
1,241,013
--------------
OIL--SUPPLIES & CONSTRUCTION (0.0%)
Seacor Holdings
5.375% Conv. Sub. Notes,
11/15/06+ ...................... 495,000 574,200
--------------
TOTAL ENERGY (0.1%) ............ 1,815,213
--------------
TECHNOLOGY
ELECTRONICS (1.1%)
Altera Corp.
5.75% Conv. Sub. Note,
06/15/02+ ...................... 1,330,000 2,058,175
Applied Magnetics Corp.:
7.0% Conv. Sub., 03/15/06 ..... 1,530,000 2,708,100
7.0% Conv. Sub. Euro, 03/15/06 100,000 177,000
C-Cube Microsystems, Inc.
5.875% Conv., 11/01/05 ......... 705,000 912,975
Checkpoint Systems, Inc.
5.25% Conv., 11/01/05+ ......... 310,000 452,988
LSI Logic Corp.
5.5% Conv., 03/15/01+ .......... 570,000 1,251,150
Plasma & Materials
Technologies, Inc.
7.125% Conv., 10/15/01+ ........ 920,000 901,600
Sanmina Corporation
5.5% Conv., 08/15/02+ .......... 1,030,000 2,153,988
SCI Systems, Inc.
5.0%, Conv., 05/01/06 .......... 1,085,000 1,239,613
S3 Incorporated
5.75% Conv. Sub. Note,
10/01/03+ ...................... 505,000 552,975
3Com Corp.
10.25% Conv., 11/01/01+ ........ 865,000 1,909,488
--------------
14,318,052
--------------
<PAGE>
- ---------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------------------------------------------------------------
TELECOMMUNICATIONS (0.2%)
Bay Networks, Inc.
5.25%, 05/15/03+ ............... $ 375,000 $ 338,438
BBN Corp.
6.0% Conv., 04/01/12 ........... 1,235,000 1,197,950
Comverse Technology, Inc.
5.75% Conv. Sub., 10/01/06+ ... 1,175,000 1,217,594
--------------
2,753,982
--------------
TOTAL TECHNOLOGY (1.3%) ........ 17,072,034
--------------
DIVERSIFIED MISCELLANEOUS (0.1%)
Brierley Investment Ltd.
9.0% Conv. Sub. Note, 06/30/98 14,000 12,075
Thermo Electron Corp.
5.0% Conv. Euro, 04/15/01 ..... 845,000 1,675,213
--------------
TOTAL DIVERSIFIED (0.1%) ...... 1,687,288
--------------
TOTAL LONG-TERM DEBT SECURITIES (22.3%)
(Amortized Cost $282,739,720) . 290,184,553
--------------
SHORT-TERM DEBT SECURITIES:
CERTIFICATES OF DEPOSIT
Canadian Imperial Bank of
Commerce
5.44%, due 03/31/97 ............ 25,000,000 25,009,103
Sanwa Bank Ltd.
5.495%, due 01/22/97 ........... 2,000,000 1,999,802
--------------
TOTAL CERTIFICATES OF DEPOSIT (2.1%) 27,008,905
--------------
COMMERCIAL PAPER
ASCC Commercial Paper:
5.34%, due 02/27/97 ............ 31,000,000 30,737,895
5.37%, due 03/27/97 ............ 700,000 691,290
Associates Corp. of North
America
5.75%, due 01/02/97 ............ 400,000 399,936
Dresdner U.S. Finance, Inc.
5.31%, due 04/10/97 ............ 5,000,000 4,927,263
Enterprise Funding Corp.
5.45%, due 03/03/97 ............ 5,034,000 4,989,048
Koch Industries
6.9%, due 01/02/97 ............. 18,300,000 18,296,493
Morgan Stanley Group, Inc.
6.79%, due 01/02/97 ............ 2,900,000 2,899,453
Old Line Funding Corp.
5.5%, due 02/27/97 ............. 15,200,000 15,067,632
Suntrust Banks, Inc.:
5.3%, due 03/03/97 ............. 13,000,000 12,883,473
5.35%, due 03/31/97 10,000,000 9,869,219
--------------
TOTAL COMMERCIAL PAPER (7.7%) 100,761,702
--------------
TIME DEPOSITS
Canadian Imperial Bank of
Commerce
6.0%, due 01/02/97 ............. 6,100,000 6,100,000
68
<PAGE>
THE HUDSON RIVER TRUST
GROWTH INVESTORS PORTFOLIO
PORTFOLIO OF INVESTMENTS (Concluded)
December 31, 1996
- ----------------------------------------------------------------
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ----------------------------------------------------------------
Harris Trust & Savings
6.5%, due 01/02/97 ............. $ 4,400,000 $ 4,400,000
Sumitomo Bank Ltd.
6.5%, due 01/02/97 ............. 1,500,000 1,500,000
Toronto Dominion Bank
6.25%, due 01/02/97 ............ 18,400,000 18,400,000
--------------
TOTAL TIME DEPOSITS (2.3%) .... 30,400,000
--------------
TOTAL SHORT-TERM DEBT SECURITIES (12.1%)
(Amortized Cost $158,157,826) . 158,170,607
--------------
TOTAL INVESTMENTS (99.1%)
(Cost/Amortized Cost $1,193,558,142) 1,290,840,729
OTHER ASSETS
LESS LIABILITIES (0.9%) ........ 11,274,254
--------------
NET ASSETS (100.0%) ............. $1,302,114,983
==============
</TABLE>
- ----------------------------------------------------------------
DISTRIBUTION OF INVESTMENTS BY GLOBAL REGION
As a Percentage of Total Investments
Canada ................................................ 0.6%
Japan ................................................. 5.9
Latin America ......................................... 0.3
New Zealand & Australia ............................... 1.3
Scandinavia ........................................... 1.3
Southeast Asia ........................................ 1.0
United Kingdom ........................................ 2.8
United States** ....................................... 81.3
Other European Countries .............................. 5.5
-----
100.0%
=====
- --------------
* Non-income producing.
** Includes Short-Term Debt Securities of 12.3%.
+ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may only be resold to qualified institutional
buyers. At December 31, 1996, these securities amounted to $63,744,015 or
4.9% of net assets.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at December 31, 1996.
Glossary:
ADR--American Depository Receipt
GDR--Global Depository Receipt
PDI--Past Due Interest Bond
See Notes to Financial Statements.
69
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
1. Organization and Significant Accounting Policies
The Hudson River Trust (the "Trust") (successor to The Hudson River Fund,
Inc., a Maryland corporation organized in 1984) was formed as a Massachusetts
business trust on July 10, 1987 and is registered under the Investment Company
Act of 1940 (the "1940 Act"), as amended, as an open-end management investment
company. The Trust issues shares of beneficial interest currently divided among
thirteen Portfolios (the "Portfolios"): Money Market, Intermediate Government
Securities, Quality Bond, High Yield, Growth and Income, Equity Index, Common
Stock, Global, International, Aggressive Stock, Conservative Investors,
Balanced and Growth Investors. Effective October 2, 1996, the Trust made
available a second class of shares, Class IB, for each of the Trust's
Portfolios. In connection with the Class IB shares offering, the existing class
of shares has been redesignated Class IA. The Class IB shares are subject to
distribution fees imposed under a distribution plan (the "Distribution Plan")
adopted pursuant to Rule 12b-1 under the 1940 Act. Under the Trust's multiple
class distribution system, both classes of shares have identical voting,
dividend, liquidation, and other rights, other than the payment of distribution
fees under the Distribution Plan.
Class IA shares are offered to separate accounts of The Equitable Life
Assurance Society of the United States ("Equitable"), a wholly-owned subsidiary
of The Equitable Companies Incorporated, Equitable Variable Life Insurance
Company ("Equitable Variable"), a wholly-owned subsidiary of the Equitable, and
to separate accounts of other insurance companies unaffiliated with Equitable
and Equitable Variable. Effective January 1, 1997, Equitable Variable was
merged into Equitable. Class IB shares are offered to an insurance company
separate account of Equitable.
The investment objectives of each Portfolio are as follows:
Money Market Portfolio -- High level of current income, preserve its assets
and maintain liquidity. The Portfolio pursues this objective by investing in
primarily high quality U.S. dollar denominated money market instruments.
Intermediate Government Securities Portfolio -- High current income
consistent with relative stability of principal through investment primarily in
debt securities issued or guaranteed as to principal and interest by the U.S.
Government or any of its agencies or instrumentalities.
Quality Bond Portfolio -- High current income consistent with preservation
of capital by investing primarily in investment grade fixed income securities.
The Portfolio reserves the right to invest in convertible debt securities,
preferred stocks and dividend-paying common stocks.
High Yield Portfolio -- High return by maximizing current income and, to the
extent consistent with that objective, capital appreciation. The Portfolio
pursues this objective by investing primarily in a diversified mix of high
yield, fixed income securities involving greater volatility of price and risk
of principal and income than high quality fixed income securities. The medium
and lower quality debt securities in which the Portfolio may invest are known
as "junk bonds."
Growth and Income Portfolio -- High total return through a combination of
current income and capital appreciation by investing primarily in
income-producing common stocks and securities convertible into common stocks.
Equity Index Portfolio -- Total return before expenses that approximates the
total return performance of the Standard & Poor's Corporation 500 Index,
including reinvestment of dividends, at a risk level consistent with that of
the Index.
Common Stock Portfolio -- Long-term growth of its capital and increase
income. The Portfolio pursues this objective by investing primarily in common
stock and other equity-type instruments.
Global Portfolio -- Long-term growth of capital. The Portfolio pursues this
objective by investing primarily in equity securities of non-United States
companies as well as United States issuers.
70
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
International Portfolio -- Long-term growth of capital by investing
primarily in a diversified portfolio of equity securities selected principally
to permit participation in non-United States companies with prospects for
growth.
Aggressive Stock Portfolio -- Long-term growth of capital. The Portfolio
pursues this objective by investing primarily in common stocks and other
equity-type securities issued by quality small and intermediate sized companies
with strong growth prospects.
Conservative Investors Portfolio -- High total return without, in the
investment adviser's opinion, undue risk to principal. The Portfolio pursues
this objective by investing in a diversified mix of publicly traded equity and
debt securities.
Balanced Portfolio -- High return through both appreciation of capital and
current income. The Portfolio pursues this objective by investing in a
diversified portfolio of publicly traded equity and debt securities and
short-term money market instruments.
Growth Investors Portfolio -- Highest total return consistent with the
investment adviser's determination of reasonable risk. The Portfolio pursues
this objective by investing in a diversified mix of publicly traded equity and
fixed income securities, including at times common stocks issued by
intermediate and small-sized companies and at times fixed income securities
that are medium and lower quality debt securities known as "junk bonds."
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures. Actual results
could differ from those estimates.
The following is a summary of the significant accounting policies of the
Trust:
Stocks listed on national securities exchanges and certain over-the-counter
issues traded on the NASDAQ national market system are valued at the last sale
price or, if there is no sale, at the latest available bid price. Other
unlisted stocks are valued at their last sale price or, if no reported sale
during the day, at a bid price estimated by a broker.
Convertible preferred stocks listed on national securities exchanges are
valued as of their last sale price or, if there is no sale, at the latest
available bid price.
Convertible bonds and unlisted convertible preferred stocks are valued at
bid prices obtained from one or more of the major dealers in such securities.
Where there is a discrepancy between dealers, values may be adjusted based on
recent premium spreads to the underlying common stocks.
Mortgage backed and asset backed securities are valued at prices obtained
from a bond pricing service where available, or at a bid price obtained from
one or more of the major dealers in such securities. If a quoted price is
unavailable, an equivalent yield or yield spread quotes will be obtained from a
broker and converted to a price.
Purchased options, including options on futures, are valued at their last
bid price. Written options are valued at their last asked price.
Long-term corporate bonds are valued at prices obtained from a bond pricing
service of a major dealer in bonds when such prices are available; however,
when such prices are not available, such bonds are valued at a bid price
estimated by a broker.
U.S. Treasury securities and other obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities are valued at
representative quoted prices.
Foreign securities not traded directly, or in American Depository Receipt
(ADR) or similar form in the United States, are valued at representative quoted
prices in the currency of the country of origin.
71
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
Except for the Money Market Portfolio, short-term debt securities which
mature in 60 days or less are valued at amortized cost, which approximates
market value. Short-term debt securities which mature in more than 60 days are
valued at representative quoted prices. Short-term debt securities held in the
Money Market Portfolio are valued at representative quoted prices regardless of
the length of maturity.
Futures and forward contracts are valued at their last sale price or, if
there is no sale, at the latest available bid price.
Other securities, including restricted securities, and assets for which
market quotations are not readily available or for which valuation cannot be
provided, are valued at "fair value" as determined in good faith by the
Valuation Committee of the Board of Trustees.
Securities transactions are recorded on the trade date net of brokerage
fees, commissions, and transfer fees.
Interest income (including amortization of premium and discount on
securities using the effective yield method) is accrued daily. Dividend
income is recorded on the ex-dividend date.
Realized gains and losses on the sale of investments are computed on the
basis of the identified cost of the related investments sold.
Expenses attributable to a single Portfolio are charged to that Portfolio.
Expenses of the Trust are charged to each Portfolio in proportion to net
assets.
The Board of Trustees has approved the lending of portfolio securities,
through its custodian bank Chase Manhattan Bank, N.A. ("Chase") acting as
lending agent, to certain broker-dealers in exchange for negotiated lenders'
fees. Any such loan of portfolio securities will be continuously secured by
collateral at least equal to the value of the security loaned. All loans will
be collateralized in the form of cash or U.S. Government securities. Chase will
indemnify the Portfolios from any loss resulting from a borrower's failure to
return a loaned security when due. At December 31, 1996, the value of
securities loaned and collateral received were as follows:
<TABLE>
<CAPTION>
VALUE OF VALUE OF
SECURITIES COLLATERAL
PORTFOLIO LOANED RECEIVED*
- --------- ---------- ----------
<S> <C> <C>
Intermediate Government Securities $ 17,601,878 $ 18,301,550
Quality Bond ...................... 27,315,488 28,167,188
Growth and Income ................. 1,943,750 2,000,000
Equity Index ...................... 1,288,680 1,356,953
Common Stock ...................... 102,898,955 105,377,860
Global ............................ 69,205,867 72,320,750
International ..................... 12,267,188 12,820,136
Aggressive Stock .................. 195,608,196 200,344,604
Conservative Investors ............ 23,376,066 24,170,813
Balanced .......................... 133,571,671 138,838,707
Growth Investors .................. 88,709,978 90,833,147
</TABLE>
- ------------
* Including U.S. Government securities valued at $919,250, $743,460 and
$1,827,086 for the Global, International and Growth Investors
Portfolios, respectively.
Chase invests the cash collateral and retains a portion of the interest
earned. During the year ended December 31, 1996, the Intermediate Government
Securities, Quality Bond, High Yield, Growth and Income, Equity Index, Common
Stock, Global, International, Aggressive Stock, Conservative Investors,
Balanced and Growth Investors Portfolios received $37,318, $27,425, $8,919,
$3,183, $1,082, $78,441, $210,691, $33,846, $405,162, $97,871, $306,462 and
$274,815, respectively, of security loan fees, net of rebates paid. Such net
fees are included in interest income in the accompanying Statements of
Operations.
72
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
The books and records of the Trust are kept in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the bid price last
quoted by a composite list of major U.S. banks at the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date.
(ii) purchase and sales of investment securities, income and expenses--at
the date of such transactions.
The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Net currency gains or losses realized and unrealized as a result of
differences between interest or dividends and withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amount actually received or
paid are presented under foreign currency transactions in the realized and
unrealized gains and losses section of the Statements of Operations.
The Trust intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its net investment income and net realized capital gains
to shareholders of each Portfolio. Therefore, no Federal income tax provision
is required. Dividends from net investment income are declared and distributed
quarterly; dividends from net realized short-term and long-term capital gains
are declared and distributed at least annually to the shareholders of the
Portfolios to which such gains are attributable. All dividends are reinvested
in additional full and fractional Shares of the related Portfolios. All
dividends are distributed on a tax basis and as such, the amounts may differ
from financial statement investment income and realized capital gains.
Options Written:
All Portfolios (except for the Money Market and Equity Index Portfolios) may
write (sell) covered options as a hedge to provide protection against adverse
movements in the price of securities in the portfolio or to enhance investment
performance. When a Portfolio writes an option, an amount equal to the premium
received by the Portfolio is recorded as a liability and is subsequently
adjusted on a daily basis to the current market price of the option written.
Premiums received from writing options which expire unexercised are recognized
as gains on the expiration date. In writing options, a Portfolio must assume
that the option may be exercised at any time prior to the expiration of its
obligation as a writer, and that in such circumstances the net proceeds of the
sale or cost of purchase of the underlying securities pursuant to the call or
put option may be substantially below or above the prevailing market price. A
Portfolio also has the additional risk of not being able to enter into a
closing purchase transaction if a liquid secondary market does not exist and
bears the risk of unfavorable changes in the price of the financial instruments
underlying the options.
Futures and Forward Contracts:
Futures and forward contracts are agreements to buy or sell a security for a
set price in the future. A Portfolio may buy or sell futures and forward
contracts for the purpose of protecting its portfolio securities against future
changes in interest rates which might adversely affect the value of the
Portfolio's securities or the price of securities that it intends to purchase
at a later date. Initial margin deposits are made upon entering into futures
contracts and can be either in cash or treasury securities. During the period
the futures and forward contracts are open, changes in the market price of the
contract are recognized as unrealized gains or losses by "marking-to-market" at
the end of each trading day. Variation margin payments on futures contracts are
received or made, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Portfolio records a realized gain or
loss equal to the difference between the proceeds from (or cost of) the closing
transactions and the Portfolio's basis in the contract. Should interest rates
move unexpectedly, the Portfolio may not achieve the anticipated benefits of
the futures and forward contracts and may incur a loss. The use of futures and
forward contracts transactions involves the risk of imperfect correlation in
movements in the price of futures and forward contracts, interest rates and the
underlying hedged assets.
73
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
Limitations on Market and Credit Risk:
Written options, futures and forward contracts involve elements of both
market and credit risk in excess of the amounts reflected in the Statements of
Assets and Liabilities. The contract amounts of these written options, futures
and forward contracts reflect the extent of the Portfolio's exposure to
off-balance sheet risk. The Portfolio bears the market risk which arises from
any changes in security values. The credit risk for futures contracts is
limited to failure of the exchange or board of trade which acts as the
counterparty to the Portfolio's futures transactions. Forward contracts are
done directly with the counterparty and not through an exchange and can be
terminated only by agreement of both parties to the contract. There is no daily
margin settlement and the Portfolio is exposed to the risk of default by the
counterparty.
Statement of Position 93-2:
For the year ended December 31, 1996, in conformity with Statement of
Position 93-2 Determination, Disclosure and Financial Statement Presentation of
Income, Capital Gain, and Return of Capital Distributions by Investment
Companies, the reclassification arising from current book/tax differences
resulted in increases (decreases) to the components of net assets as follows:
<TABLE>
<CAPTION>
QUALITY EQUITY
BOND HIGH YIELD INDEX COMMON STOCK GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ----------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Paid-in capital ..................... $ -- $ -- $ (7,525) $ (988,124) $ (220,445)
Undistributed (overdistributed) net
investment income .................. 42,229 449,873 (284,528) (8,723,430) 1,186,161
Accumulated net realized gain (loss) (42,229) (449,873) 292,053 9,711,554 (965,716)
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE CONSERVATIVE GROWTH
INTERNATIONAL STOCK INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ------------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Paid-in capital ..................... $ -- $ -- $ -- $ -- $ --
Undistributed (overdistributed) net
investment income .................. 352,064 3,794 (8,654) (35,347) 842,896
Accumulated net realized gain (loss) (352,064) (3,794) 8,654 35,347 (842,896)
</TABLE>
2. Management of the Trust
Alliance Capital Management L.P. (Alliance), a publicly traded limited
partnership, indirectly majority-owned by Equitable, is the investment
adviser. The investment advisory fees are as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS
----------------------------------------------------
FIRST NEXT OVER
$350 MILLION $400 MILLION $750 MILLION
---------------- ---------------- ----------------
<S> <C> <C> <C>
Common Stock, Money Market and Balanced Portfolios ....... .40% .375% .35%
Aggressive Stock and Intermediate Government Securities ..
Portfolios ............................................... .50% .475% .45%
High Yield, Global, Conservative Investors and Growth
Investors Portfolios ..................................... .55% .525% .50%
FIRST NEXT OVER
$500 MILLION $500 MILLION $1 BILLION
---------------- ---------------- ----------------
Quality Bond and Growth and Income Portfolios ............. .55% .525% .50%
FIRST NEXT OVER
$750 MILLION $750 MILLION $1.5 BILLION
---------------- ---------------- ----------------
Equity Index Portfolio .................................... .35% .30% .25%
FIRST NEXT OVER
$500 MILLION $1 BILLION $1.5 BILLION
---------------- ---------------- ----------------
International Portfolio ................................... .90% .85% .80%
</TABLE>
74
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
3. Distribution Plan
The Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act for the Class IB shares of the Trust.
Under the Plan, the Trust pays a distribution fee to Equitable Distributors,
Inc. ("Distributor"), an indirect, wholly-owned subsidiary of the Equitable, at
an annual rate of up to 0.50% of each Portfolio's average daily net assets
attributable to Class IB shares. The Trustees currently limit payments at an
annual rate equal to 0.25% of average daily net assets attributable to its
Class IB shares. In accordance with the Plan, payments are made for services
rendered to the Trust with respect to Class IB shares regardless of the level
of expenditures incurred by the Distributor. The Plan provides that the
Distributor will use such payments for services rendered and expenses borne in
connection with activities primarily intended to result in the sale of the
Trust's Class IB shares.
4. Investment Transactions
Investment security transactions, excluding short-term debt securities, for
the Intermediate Government Securities, Quality Bond, High Yield, Growth and
Income, Equity Index, Common Stock, Global, International, Aggressive Stock,
Conservative Investors, Balanced and Growth Investors Portfolios for the year
ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
INTER-
MEDIATE GROWTH
GOVERNMENT QUALITY AND
SECURITIES BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt
securities ........................... $ -- $253,934,635 $781,128,281 $248,681,019
U.S. Government securities ............ 250,043,480 417,690,775 -- --
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt
securities ........................... -- 274,718,651 720,651,732 129,315,154
U.S. Government securities ............ 227,916,328 400,265,960 -- --
</TABLE>
<TABLE>
<CAPTION>
EQUITY COMMON
INDEX STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt
securities ........................... $206,816,773 $3,642,874,019 $657,898,998 $145,560,889
U.S. Government securities ............ -- -- -- --
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt
securities ........................... 43,594,778 3,133,001,586 441,217,164 38,206,577
U.S. Government securities ............ -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
AGGRESSIVE CONSERVATIVE GROWTH
STOCK INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
COST OF PURCHASES:
Stocks and long-term corporate debt
securities ........................... $3,743,831,253 $185,088,283 $1,502,532,357 $1,459,573,841
U.S. Government securities ............ -- 288,281,378 1,071,280,407 608,182,035
NET PROCEEDS OF SALES AND REDEMPTIONS:
Stocks and long-term corporate debt
securities ........................... 3,319,337,126 135,333,021 1,618,684,625 1,138,232,981
U.S. Government securities ............ -- 313,973,715 1,026,954,569 711,943,608
</TABLE>
No activity is shown for the Money Market Portfolio since it trades
exclusively in short-term debt securities.
75
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
Transactions in options written for the year ended December 31, 1996 are
summarized as follows:
<TABLE>
<CAPTION>
COMMON STOCK
PORTFOLIO
----------------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
----------- ---------------
<S> <C> <C>
Options outstanding--January 1, 1996 ............... 72,400 $ 31,689,532
Options written .................................... 745,200 310,976,384
Options terminated in closing purchase transactions (350,625) (151,830,550)
Options expired .................................... (31,650) (12,066,500)
Options exercised .................................. (274,125) (110,161,066)
----------- ---------------
Options outstanding -- December 31, 1996 .......... 161,200 $ 68,607,800
=========== ===============
</TABLE>
The Portfolios (except for the Money Market, Intermediate Government
Securities and Equity Index Portfolios) may enter into forward currency
contracts in order to hedge their exposure to changes in foreign currency
exchange rates on its foreign securities holdings. A forward contract is a
commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contracts and the closing of such contracts is included in
realized gains or losses from foreign currency transactions. At December 31,
1996, the Quality Bond, Global, International, Conservative Investors, Balanced
and Growth Investors Portfolios had outstanding forward currency contracts to
buy/sell foreign currencies as follows:
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
QUALITY BOND PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ----------------------- ---------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Swedish Krona, expiring 01/22/97 .... 59,511 $ 8,802,011 $ 8,764,492 $(37,519)
FOREIGN CURRENCY SALE CONTRACTS
Australian Dollars, expiring 01/28/97 17,266 13,541,486 13,632,563 (91,077)
Swedish Krona, expiring 01/22/97 .... 9,003 9,279,351 9,003,162 276,189
---------------
$147,593
===============
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
GLOBAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ----------------- ----------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Deutsche Marks, expiring 01/02/97-01/03/97 ..... 171 $ 109,716 $ 110,421 $ 705
FOREIGN CURRENCY SALE CONTRACTS
Deutsche Marks, expiring 01/21/97 ............... 20,000 13,740,113 13,368,627 371,486
Japanese Yen, expiring 03/12/97 ................. 2,055,000 19,731,483 18,738,032 993,451
Netherland Guilders, expiring 01/21/97-04/28/97 55,662 33,596,109 32,897,910 698,199
---------------
$2,063,841
===============
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
INTERNATIONAL PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------------ ---------- ------------- ------------ ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY SALE CONTRACTS
Deutsche Marks, expiring 01/21/97-04/30/97 .... 2,600 $1,739,380 $1,714,504 $ 24,876
Japanese Yen, expiring 03/12/97 ................ 404,800 3,886,767 3,691,074 195,693
Netherland Guilders, expiring 01/21/97-04/28/97 7,970 4,675,150 4,642,843 32,307
---------------
$252,876
===============
</TABLE>
76
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
CONSERVATIVE INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- --------------------------------- ---------- ------------- --------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pounds, expiring 01/03/97-01/07/97 36 $35,639 $35,740 $101
FOREIGN CURRENCY SALE CONTRACTS
Hong Kong Dollars, expiring 01/03/97 ..... 174 22,522 22,529 (7)
Malaysian Ringgit, expiring 01/02/97 ..... 13 4,946 4,951 (5)
---------------
$ 89
===============
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
BALANCED PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- ------------------- ---------- ------------- ---------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
British Pounds, expiring 01/07/97 ............ 146 $250,112 $250,127 $ 15
FOREIGN CURRENCY SALE CONTRACTS
Hong Kong Dollars, expiring 01/30/97 ........ 1,420 183,435 183,485 (50)
Malaysian Ringgit, expiring 01/02/97-01/06/97 71 28,001 28,024 (23)
---------------
$(58)
===============
</TABLE>
<TABLE>
<CAPTION>
CONTRACT COST ON U.S.$ UNREALIZED
AMOUNT ORIGINATION CURRENT APPRECIATION/
GROWTH INVESTORS PORTFOLIO: (000'S) DATE VALUE (DEPRECIATION)
- --------------------------- ---------- ------------- ----------- ---------------
<S> <C> <C> <C> <C>
FOREIGN CURRENCY BUY CONTRACTS
Japanese Yen, expiring 01/06/97 ................ 20,600 $ 177,939 $ 177,908 $ (31)
FOREIGN CURRENCY SALE CONTRACTS
Deutsche Marks, expiring 01/21/97-04/30/97 .... 7,600 5,049,513 4,994,213 55,300
French Francs, expiring 01/03/97 ............... 600 115,196 115,418 (222)
Japanese Yen, expiring 03/12/97 ................ 716,700 6,881,535 6,535,060 346,475
Netherland Guilders, expiring 01/21/97-04/28/97 12,488 7,444,730 7,334,434 110,296
---------------
$511,818
===============
</TABLE>
As of December 31, 1996, the gross unrealized appreciation (depreciation) of
investments based on the aggregate cost of investments for Federal income tax
purposes was as follows:
<TABLE>
<CAPTION>
INTER-
MEDIATE GROWTH
MONEY GOVERNMENT QUALITY AND
MARKET SECURITIES BOND HIGH YIELD INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Aggregate gross unrealized appreciation $ 161,362 $ 901,616 $ 2,230,258 $ 8,181,913 $ 29,363,104
Aggregate gross unrealized depreciation (3,841) (280,447) (69,964) (3,017,609) (1,811,069)
-------------- ------------- -------------- -------------- -------------
Net unrealized appreciation ............. $ 157,521 $ 621,169 $ 2,160,294 $ 5,164,304 $ 27,552,035
============== ============= ============== ============== =============
Federal income tax cost of investments . $450,833,231 $92,000,197 $151,122,493 $192,384,980 $204,211,023
============== ============= ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
EQUITY COMMON
INDEX STOCK GLOBAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Aggregate gross unrealized appreciation $ 66,168,971 $1,832,534,355 $187,742,897 $ 13,964,200
Aggregate gross unrealized depreciation (3,933,846) (210,788,064) (56,564,269) (9,944,597)
-------------- -------------- -------------- ---------------
Net unrealized appreciation ............. $ 62,235,125 $1,621,746,291 $131,178,628 $ 4,019,603
============== ============== ============== ===============
Federal income tax cost of investments . $320,809,131 $5,047,205,980 $860,653,361 $145,299,176
============== ============== ============== ===============
</TABLE>
77
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
<TABLE>
<CAPTION>
AGGRESSIVE CONSERVATIVE GROWTH
STOCK INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Aggregate gross unrealized appreciation $ 586,112,647 $ 14,217,803 $ 148,244,711 $ 136,653,070
Aggregate gross unrealized depreciation (97,924,279) (4,914,681) (34,205,650) (42,072,029)
-------------- -------------- -------------- ---------------
Net unrealized appreciation ............. $ 488,188,368 $ 9,303,122 $ 114,039,061 $ 94,581,041
============== ============== ============== ===============
Federal income tax cost of investments . $3,402,294,383 $266,337,374 $1,513,082,539 $1,196,259,689
============== ============== ============== ===============
</TABLE>
During the year ended December 31, 1996, the Quality Bond, High Yield and
Growth and Income Portfolios utilized available capital loss carryforwards of
$395,138, $1,100,531 and $474,588, respectively.
The Intermediate Government Securities Portfolio had net capital loss
carryforwards of $9,831,366 (of which $9,349,227 expires in the year 2002 and
$482,139 expires in the year 2004) and the Quality Bond Portfolio had net
capital loss carryforwards of $4,993,809 which expires in the year 2002. To the
extent the above losses are used to offset future capital gains, it is probable
that the gains so offset will not be distributed to shareholders.
5. Capital Share Transactions
At December 31, 1996, there was an unlimited number of shares of beneficial
interest (Shares), without par value, available for issuance by the Board of
Trustees. Shares are divided into two classes, designated Class IA and Class IB
for each Portfolio.
Transactions in Shares were as follows:
<TABLE>
<CAPTION>
INTERMEDIATE
MONEY MARKET GOVERNMENT SECURITIES
PORTFOLIO PORTFOLIO
------------------------------ ----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
-------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
Class IA
Shares sold ........ 49,765,857 38,608,910 3,938,806 3,178,905
Shares issued in
reinvestment of
dividends and
distributions ..... 1,878,824 1,793,866 496,768 391,277
-------------- -------------- ------------- -------------
Total shares issued 51,644,681 40,402,776 4,435,574 3,570,182
Shares redeemed ... (44,125,860) (34,441,594) (2,495,957) (1,464,671)
-------------- -------------- ------------- -------------
Net increase
(decrease) ........ 7,518,821 5,961,182 1,939,617 2,105,511
============== ============== ============= =============
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
QUALITY BOND HIGH YIELD
PORTFOLIO PORTFOLIO
---------------------------- ----------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Class IA
Shares sold ........ 2,872,392 2,039,780 7,067,122 4,920,577
Shares issued in
reinvestment of
dividends and
distributions ..... 1,135,383 941,017 2,737,878 1,087,864
------------- ------------- ------------- -------------
Total shares issued 4,007,775 2,980,797 9,805,000 6,008,441
Shares redeemed ... (4,048,559) (1,231,693) (2,158,843) (2,047,031)
------------- ------------- ------------- -------------
Net increase
(decrease) ........ (40,784) 1,749,104 7,646,157 3,961,410
============= ============= ============= =============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND
INCOME EQUITY INDEX COMMON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------- ---------------------------- ------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------ ----------- ------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Class IA
Shares sold .................. 9,026,248 5,330,789 16,152,780 12,811,615 43,446,898 32,314,046
Shares issued in reinvestment
of dividends and
distributions ............... 1,157,520 173,344 1,372,168 243,074 39,581,929 20,247,043
------------ ----------- ------------- ------------- -------------- --------------
Total shares issued .......... 10,183,768 5,504,133 17,524,948 13,054,689 83,028,827 52,561,089
Shares redeemed .............. (730,115) (375,025) (4,670,841) (4,148,263) (15,634,826) (15,886,663)
------------ ----------- ------------- ------------- -------------- --------------
Net increase ................. 9,453,653 5,129,108 12,854,107 8,906,426 67,394,001 36,674,426
============ =========== ============= ============= ============== ==============
</TABLE>
78
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Continued)
December 31, 1996
<TABLE>
<CAPTION>
GLOBAL INTERNATIONAL AGGRESSIVE STOCK
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------- --------------------------------- ------------------------------
YEAR ENDED YEAR ENDED APRIL 3, 1995* YEAR ENDED
DECEMBER 31, DECEMBER 31, TO DECEMBER 31,
1996 1995 1996 DECEMBER 31, 1995 1996 1995
------------- ------------- -------------- ----------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Class IA
Shares sold .................. 15,536,853 15,621,046 12,450,977 2,781,575 28,813,436 24,290,758
Shares issued in reinvestment
of dividends and
distributions ............... 3,493,773 1,875,847 409,789 46,457 18,391,950 8,689,767
------------- ------------- -------------- ----------------- -------------- --------------
Total shares issued .......... 19,030,626 17,496,893 12,860,766 2,828,032 47,205,386 32,980,525
Shares redeemed .............. (3,682,913) (4,317,611) (2,284,561) (190,166) (15,090,379) (17,101,621)
------------- ------------- -------------- ----------------- -------------- --------------
Net increase ................. 15,347,713 13,179,282 10,576,205 2,637,866 32,115,007 15,878,904
============= ============= ============== ================= ============== ==============
</TABLE>
<TABLE>
<CAPTION>
CONSERVATIVE GROWTH
INVESTORS BALANCED INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------------- ---------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------- ----------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Class IA
Shares sold .................. 4,420,391 4,574,632 3,826,284 3,451,513 17,024,570 16,117,087
Shares issued in reinvestment
of dividends and
distributions ............... 1,758,154 1,178,017 11,161,085 5,393,327 9,635,249 2,104,190
------------- ----------- ------------- ------------- ------------- -------------
Total shares issued .......... 6,178,545 5,752,649 14,987,369 8,844,840 26,659,819 18,221,277
Shares redeemed .............. (3,042,720) (983,364) (7,431,615) (7,393,399) (1,643,924) (1,144,340)
------------- ----------- ------------- ------------- ------------- -------------
Net increase ................. 3,135,825 4,769,285 7,555,754 1,451,441 25,015,895 17,076,937
============= =========== ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET HIGH YIELD COMMON STOCK
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------------- -----------------
OCTOBER 2, 1996* OCTOBER 2, 1996* OCTOBER 2, 1996*
TO TO TO
DECEMBER 31, 1996 DECEMBER 31, 1996 DECEMBER 31, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
Class IB
Shares sold ................................................. 353,450 64,659 64,063
Shares issued in reinvestment of dividends and distributions 3,389 3,757 4,203
----------------- ----------------- -----------------
Total shares issued ......................................... 356,839 68,416 68,266
Shares redeemed ............................................. (43,566) -- --
----------------- ----------------- -----------------
Net increase ................................................ 313,273 68,416 68,266
================= ================= =================
</TABLE>
<TABLE>
<CAPTION>
GLOBAL AGGRESSIVE STOCK GROWTH INVESTORS
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------------- -----------------
OCTOBER 2, 1996* OCTOBER 2, 1996* OCTOBER 2, 1996*
TO TO TO
DECEMBER 31, 1996 DECEMBER 31, 1996 DECEMBER 31, 1996
----------------- ----------------- -----------------
<S> <C> <C> <C>
Class IB
Shares sold ................................................. 16,657 16,059 26,902
Shares issued in reinvestment of dividends and distributions 486 1,035 571
----------------- ----------------- -----------------
Total shares issued ......................................... 17,143 17,094 27,473
Shares redeemed ............................................. -- -- (5)
----------------- ----------------- -----------------
Net increase ................................................ 17,143 17,094 27,468
================= ================= =================
</TABLE>
- ------------
* Commencement of operations.
79
<PAGE>
THE HUDSON RIVER TRUST
NOTES TO FINANCIAL STATEMENTS--(Concluded)
December 31, 1996
6. Transactions with Affiliated Companies
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Investments in companies which were
affiliates during the year ended December 31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
MARKET VALUE MARKET VALUE REALIZED
DECEMBER 31, PURCHASES SALES AT DECEMBER 31, DIVIDEND GAIN
1995 AT COST COST 1996 INCOME (LOSS)
-------------- ------------- ------------- -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCK PORTFOLIO:
CBL & Associates Properties, Inc. . $ 23,864,100 $ -- $ 389,999 $ 27,872,550 $1,826,496 $ 71,285
Ceridian Corp. ..................... -- 147,330,475 -- 148,432,500 -- --
Chris Craft Industries, Inc.
(Class B) ......................... 52,926,452 -- 699,730 49,849,843 -- 2,150,539
Essex Property Trust, Inc. (a) .... 7,026,250 -- 1,419,599 8,583,375 439,632 230,986
Regency Realty Corp. ............... 13,260,075 -- 2,791,249 16,372,125 1,194,671 344,155
-------------- -------------- ------------ --------------
$ 97,076,877 $251,110,393 $3,460,799 $ 2,796,965
============== ============== ============ ==============
AGGRESSIVE STOCK PORTFOLIO:
Aames Financial Corp. .............. $ -- $ 42,877,524 $ -- $ 39,907,350 $ -- $ --
AK Steel Holding Corp. ............. -- 51,253,111 -- 52,554,637 143,860 --
Diamond Shamrock, Inc. (b) ......... 10,981,350 113,128,651 123,878,953 -- 1,074,864 791,010
DT Industries, Inc. ................ -- 20,039,150 -- 20,366,500 -- --
Evergreen Media Corp. (Class A) ... -- 70,859,044 -- 62,782,500 -- --
Harman International Industries,
Inc. .............................. -- 76,411,622 -- 83,281,750 62,520 --
Healthwise of America, Inc. (c) ... 36,899,265 -- 21,053,272 -- -- --
Nine West Group, Inc. .............. 87,810,000 60,430,963 16,605,324 144,356,100 -- 9,981,987
Office Max, Inc. ................... 62,813,337 33,646,805 99,154,141 -- -- (11,304,560)
Playboy Enterprises, Inc. (Class B) 7,798,800 -- 7,372,638 -- -- 2,788,044
Polymer Group, Inc. ................ -- 46,201,327 -- 35,167,575 -- --
Riscorp, Inc. (Class A) ............ -- 30,178,057 30,178,058 -- -- (20,701,356)
Rowan Cos., Inc. (a) ............... 40,817,325 8,147,199 7,648,972 85,646,937 -- 14,436,064
Suburban Lodges of America ......... -- 17,834,953 -- 15,078,400 -- --
Sun Healthcare Group, Inc. ......... 34,501,950 -- 60,385,693 -- -- (29,805,407)
Telephone & Data Systems, Inc. .... 117,753,450 2,325,847 5,708,538 104,508,750 1,153,200 598,524
Ultramar Diamond Shamrock Corp. (b) -- 126,586,516 -- 132,338,671 -- --
United Healthcare (c) .............. -- 21,053,272 21,053,272 -- -- 13,682,853
USA Waste Services, Inc. (a) ...... 47,349,825 61,436,395 25,853,037 109,073,062 977,490 10,711,824
Xtra Corp. ......................... 50,417,750 8,070,269 -- 59,701,350 -- --
-------------- -------------- ------------ --------------
$497,143,052 $944,763,582 $3,411,934 $ (8,821,017)
============== ============== ============ ==============
GLOBAL PORTFOLIO:
Nelvana Ltd. (a) ................... $ 1,889,495 $ -- $ 59,767 $ 2,159,942 $ -- $ 60,876
============== ============= ============= ============== ============ ==============
</TABLE>
- ------------
(a) Holdings represented less than 5% of outstanding shares at December 31,
1996, although ownership was above 5% for a period of time during the year.
(b) Exchanged for Ultramar Diamond Shamrock Corp.
(c) Exchanged for United Healthcare.
80
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS
December 31, 1996
SELECTED DATA FOR A PORTFOLIO SHARE OUTSTANDING THROUGHOUT EACH PERIOD(c)
MONEY MARKET PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------------------------------------------- --------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
---------------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993* 1992 1996
---------- ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $ 10.16 $ 10.14 $ 10.12 $ 10.11 $ 10.13 $10.16
---------- ---------- ---------- ---------- ---------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.54 0.57 0.41 0.30 0.37 0.11
Net realized and unrealized gain (loss) on
investments .............................. (0.01) -- -- -- (0.01) 0.01
---------- ---------- ---------- ---------- ---------- --------------
Total from investment operations .......... 0.53 0.57 0.41 0.30 0.36 0.12
---------- ---------- ---------- ---------- ---------- --------------
LESS DIVIDENDS:
Dividends from net investment income ..... (0.52) (0.55) (0.39) (0.29) (0.38) (0.02)
Dividends in excess of net investment
income ................................... -- -- -- -- -- (0.10)
---------- ---------- ---------- ---------- ---------- --------------
Total dividends ........................... (0.52) (0.55) (0.39) (0.29) (0.38) (0.12)
---------- ---------- ---------- ---------- ---------- --------------
Net asset value, end of period ............. $ 10.17 $ 10.16 $ 10.14 $ 10.12 $ 10.11 $10.16
========== ========== ========== ========== ========== ==============
Total return (d) ........................... 5.33% 5.74% 4.02% 3.00% 3.57% 1.29%
========== ========== ========== ========== ========== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......... $463,422 $386,691 $325,391 $248,460 $268,584 $3,184
Ratio of expenses to average net assets ... 0.43% 0.44% 0.42% 0.42% 0.43% 0.67%(b)
Ratio of net investment income to average
net assets ................................ 5.17% 5.53% 4.01% 2.91% 3.63% 4.94%(b)
</TABLE>
INTERMEDIATE GOVERNMENT SECURITIES PORTFOLIO(E):
<TABLE>
<CAPTION>
CLASS IA
-------------------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1996 1995 1994 1993* 1992
--------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $ 9.47 $ 8.87 $ 10.08 $ 10.53 $ 10.73
--------- --------- --------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.54 0.58 0.65 0.59 0.60
Net realized and unrealized gain (loss) on
investments .............................. (0.19) 0.57 (1.08) 0.51 (0.02)
--------- --------- --------- ---------- ----------
Total from investment operations .......... 0.35 1.15 (0.43) 1.10 0.58
--------- --------- --------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.53) (0.55) (0.78) (0.68) (0.60)
Distributions from realized gains ........ -- -- -- (0.87) (0.18)
--------- --------- --------- ---------- ----------
Total dividends and distributions ........ (0.53) (0.55) (0.78) (1.55) (0.78)
--------- --------- --------- ---------- ----------
Net asset value, end of period ............. $ 9.29 $ 9.47 $ 8.87 $ 10.08 $ 10.53
========= ========= ========= ========== ==========
Total return (d) ........................... 3.78% 13.33% (4.37)% 10.58% 5.53%
========= ========= ========= ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......... $88,384 $71,780 $48,518 $158,511 $293,587
Ratio of expenses to average net assets ... 0.56% 0.57% 0.56% 0.53% 0.52%
Ratio of net investment income to average
net assets ................................ 5.73% 6.15% 6.75% 5.43% 5.63%
Portfolio turnover rate .................... 318% 255% 133% 254% 316%
</TABLE>
81
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
QUALITY BOND PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------------------
OCTOBER 1, 1993
YEAR ENDED DECEMBER 31, TO
---------------------------------- DECEMBER 31,
1996 1995 1994 1993
---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) .......................... $9.61 $ 8.72 $ 9.82 $ 10.00
---------- ---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................................ 0.57 0.57 0.66 0.11
Net realized and unrealized gain (loss) on investments and
foreign currency transactions ................................... (0.07) 0.88 (1.16) (0.16)
---------- ---------- ---------- -----------------
Total from investment operations ................................. 0.50 1.45 (0.50) (0.05)
---------- ---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................. (0.60) (0.56) (0.55) (0.12)
Dividends in excess of net investment income ..................... (0.02) -- -- --
Distributions in excess of realized gains ........................ -- -- -- (0.01)
Tax return of capital distributions .............................. -- -- (0.05) --
---------- ---------- ---------- -----------------
Total dividends and distributions ................................ (0.62) (0.56) (0.60) (0.13)
---------- ---------- ---------- -----------------
Net asset value, end of period .................................... $9.49 $ 9.61 $ 8.72 $ 9.82
========== ========== ========== =================
Total return (d) .................................................. 5.36% 17.02% (5.10)% (0.51)%
========== ========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ................................. $155,023 $157,443 $127,575 $104,832
Ratio of expenses to average net assets ........................... 0.59% 0.59% 0.59% 0.69%(b)
Ratio of net investment income to average net assets ............. 6.06% 6.13% 7.17% 4.62%(b)
Portfolio turnover rate ........................................... 431% 411% 222% 77%
</TABLE>
HIGH YIELD PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------- -------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
------------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993* 1992 1996
---------- ---------- --------- --------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .. $ 9.64 $ 8.91 $10.08 $ 9.15 $ 8.96 $10.25
---------- ---------- --------- --------- --------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 1.02 0.98 0.89 0.94 0.89 0.19
Net realized and unrealized gain (loss) on
investments .............................. 1.07 0.73 (1.17) 1.10 0.19 0.15
---------- ---------- --------- --------- --------- --------------
Total from investment operations .......... 2.09 1.71 (0.28) 2.04 1.08 0.34
---------- ---------- --------- --------- --------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ..... (0.98) (0.94) (0.88) (0.92) (0.89) (0.03)
Dividends in excess of net investment
income ................................... (0.03) (0.04) (0.01) -- -- (0.25)
Distributions from realized gains ........ (0.70) -- -- (0.19) -- (0.01)
Distributions in excess of realized gains -- -- -- -- -- (0.29)
---------- ---------- --------- --------- --------- --------------
Total dividends and distributions ........ (1.71) (0.98) (0.89) (1.11) (0.89) (0.58)
---------- ---------- --------- --------- --------- --------------
Net asset value, end of period ............. $ 10.02 $ 9.64 $8.91 $ 10.08 $ 9.15 $10.01
========== ========== ========= ========= ========= ==============
Total return (d) ........................... 22.89% 19.92% (2.79)% 23.15% 12.31% 3.32%
========== ========== ========= ========= ========= ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......... $199,360 $118,129 $73,895 $67,169 $47,687 $ 685
Ratio of expenses to average net assets ... 0.59% 0.60% 0.61% 0.63% 0.60% 0.82%(b)
Ratio of net investment income to average
net assets ................................ 9.93% 10.34% 9.23% 9.52% 9.58% 8.71%(b)
Portfolio turnover rate .................... 485% 350% 248% 280% 177% 485%
</TABLE>
82
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
GROWTH AND INCOME PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
---------------------------------------------------
YEAR ENDED DECEMBER 31, OCTOBER 1, 1993
-------------------------------- TO
1996 1995 1994 DECEMBER 31, 1993
---------- --------- --------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period (a) ............... $ 11.70 $ 9.70 $ 9.95 $10.00
---------- --------- --------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................. 0.24 0.33 0.31 0.03
Net realized and unrealized gain (loss) on investments 2.05 1.97 (0.36) (0.06)
---------- --------- --------- -----------------
Total from investment operations ...................... 2.29 2.30 (0.05) (0.03)
---------- --------- --------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income .................. (0.23) (0.30) (0.20) (0.02)
Dividends in excess of net investment income ......... -- -- -- (0.00)
Distributions from realized gains ..................... (0.75) -- -- --
Tax return of capital distributions ................... -- -- -- (0.00)
---------- --------- --------- -----------------
Total dividends and distributions ..................... (0.98) (0.30) (0.20) (0.02)
---------- --------- --------- -----------------
Net asset value, end of period ......................... $ 13.01 $ 11.70 $ 9.70 $ 9.95
========== ========= ========= =================
Total return (d) ....................................... 20.09% 24.07% (0.58)% (0.25)%
========== ========= ========= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................... $232,080 $98,053 $31,522 $1,456
Ratio of expenses to average net assets ................ 0.58% 0.60% 0.78% 2.70%(b)
Ratio of net investment income to average net asset ... 1.94% 3.11% 3.13% 1.12%(b)
Portfolio turnover rate ................................ 88% 65% 52% 48%
Average commission rate paid (f) ....................... $0.0604 -- -- --
</TABLE>
EQUITY INDEX PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------
YEAR ENDED DECEMBER 31, MARCH 1, 1994
---------------------- TO
1996 1995 DECEMBER 31, 1994
---------- ---------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period (a) ............... $13.13 $ 9.87 $10.00
---------- ---------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................ 0.27 0.26 0.20
Net realized and unrealized gain (loss) on investments 2.65 3.32 (0.09)
---------- ---------- -----------------
Total from investment operations ..................... 2.92 3.58 0.11
---------- ---------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income ................. (0.25) (0.22) (0.20)
Distributions from realized gains .................... (0.64) (0.09) (0.03)
Distributions in excess of realized gains ............ -- (0.01) (0.01)
---------- ---------- -----------------
Total dividends and distributions .................... (0.89) (0.32) (0.24)
---------- ---------- -----------------
Net asset value, end of period ......................... $15.16 $13.13 $ 9.87
========== ========== =================
Total return (d) ....................................... 22.39% 36.48% 1.08%
========== ========== =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...................... $386,249 $165,785 $36,748
Ratio of expenses to average net assets ................ 0.39% 0.48% 0.49%(b)
Ratio of net investment income to average net assets .. 1.91% 2.16% 2.42%(b)
Portfolio turnover rate ................................ 15% 9% 7%
Average commission rate paid (f) ....................... $0.0306 -- --
</TABLE>
83
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
COMMON STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------------------- --------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
-------------------------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993* 1992 1996
------------ ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .... $16.48 $ 13.36 $ 14.65 $ 13.49 $ 14.18 $17.90
------------ ------------ ------------ ------------ ------------ --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.15 0.20 0.20 0.23 0.24 0.02
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions ............................. 3.73 4.12 (0.51) 3.10 0.20 1.52
------------ ------------ ------------ ------------ ------------ --------------
Total from investment operations ........... 3.88 4.32 (0.31) 3.33 0.44 1.54
------------ ------------ ------------ ------------ ------------ --------------
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.15) (0.20) (0.19) (0.23) (0.24) (0.00)
Dividends in excess of net investment
income ................................... -- (0.02) (0.01) (0.00) -- (0.03)
Distributions from realized gains .......... (1.76) (0.95) (0.77) (1.94) (0.89) (0.16)
Distributions in excess of realized gains .. (0.22) (0.03) -- -- -- (1.03)
Tax return of capital distributions ........ -- -- (0.01) -- -- --
------------ ------------ ------------ ------------ ------------ --------------
Total dividends and distributions .......... (2.13) (1.20) (0.98) (2.17) (1.13) (1.22)
------------ ------------ ------------ ------------ ------------ --------------
Net asset value, end of period ............... $18.23 $ 16.48 $ 13.36 $ 14.65 $ 13.49 $18.22
============ ============ ============ ============ ============ ==============
Total return (d) ............................. 24.28% 32.45% (2.14)% 24.84% 3.22% 8.49 %
============ ============ ============ ============ ============ ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............ $6,625,390 $4,879,677 $3,466,245 $3,125,128 $2,307,292 $1,244
Ratio of expenses to average net assets ..... 0.38% 0.38% 0.38% 0.38% 0.38% 0.63 %(b)
Ratio of net investment income to average net
assets ..................................... 0.85% 1.27% 1.40% 1.55% 1.73% 0.61 %(b)
Portfolio turnover rate ...................... 55% 61% 52% 82% 71% 55 %
Average commission rate paid (f) ............. $0.0565 -- -- -- -- $0.0565
</TABLE>
84
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
GLOBAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
----------------------------------------------------------- --------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
----------------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993* 1992 1996
------------ ---------- ---------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) . $15.74 $ 13.87 $ 13.62 $ 11.41 $ 11.64 $ 16.57
------------ ---------- ---------- ---------- --------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................... 0.21 0.26 0.20 0.08 0.14 0.02
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions ............................ 2.05 2.32 0.52 3.58 (0.20) 0.81
------------ ---------- ---------- ---------- --------- --------------
Total from investment operations ........ 2.26 2.58 0.72 3.66 (0.06) 0.83
------------ ---------- ---------- ---------- --------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income .... (0.21) (0.25) (0.17) (0.15) (0.11) --
Dividends in excess of net investment
income .................................. (0.08) -- -- -- -- (0.11)
Distributions from realized gains ....... (0.79) (0.42) (0.28) (1.30) (0.06) (0.10)
Distributions in excess of realized gains -- (0.03) (0.00) (0.00) -- (0.28)
Tax return of capital distributions ..... (0.00) (0.01) (0.02) -- -- (0.00)
------------ ---------- ---------- ---------- --------- --------------
Total dividends and distributions ....... (1.08) (0.71) (0.47) (1.45) (0.17) (0.49)
------------ ---------- ---------- ---------- --------- --------------
Net asset value, end of period ............ $16.92 $ 15.74 $ 13.87 $ 13.62 $ 11.41 $ 16.91
============ ========== ========== ========== ========= ==============
Total return (d) .......................... 14.60% 18.81% 5.23% 32.09% (0.50)% 4.98%
============ ========== ========== ========== ========= ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $997,041 $686,140 $421,698 $141,257 $49,171 $ 290
Ratio of expenses to average net assets .. 0.60% 0.61% 0.69% 0.84% 0.70% 0.86%(b)
Ratio of net investment income to average
net assets ............................... 1.28% 1.76% 1.41% 0.62% 1.20% 0.48%(b)
Portfolio turnover rate ................... 59% 67% 71% 150% 216% 59%
Average commission rate paid (f) .......... $0.0418 -- -- -- -- $0.0418
</TABLE>
INTERNATIONAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
------------------------------------
APRIL 3, 1995
YEAR ENDED TO
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
Net asset value, beginning of period (a) ............. $10.87 $10.00
----------------- -----------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .............................. 0.13 0.14
Net realized and unrealized gain on investments .... 0.94 0.98
----------------- -----------------
Total from investment operations ................... 1.07 1.12
----------------- -----------------
LESS DISTRIBUTIONS:
Dividends from net investment income ............... (0.10) (0.07)
Dividends in excess of net investment income ....... (0.09) (0.13)
Distributions from realized gains .................. (0.25) (0.05)
----------------- -----------------
Total dividends and distributions .................. (0.44) (0.25)
----------------- -----------------
Net asset value, end of period ....................... $11.50 $10.87
================= =================
Total return (d) ..................................... 9.82% 11.29%
================= =================
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .................... $151,907 $28,684
Ratio of expenses to average net assets .............. 1.06% 1.03%(b)
Ratio of net investment income to average net assets 1.10% 1.71%(b)
Portfolio turnover rate .............................. 48% 56%
Average commission rate paid (f) ..................... $0.0251 --
</TABLE>
85
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
AGGRESSIVE STOCK PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
-------------------------------------------------------------------- --------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
-------------------------------------------------------------------- DECEMBER 31,
1996 1995 1994 1993* 1992 1996
------------ ------------ ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period
(a) ................................... $35.68 $ 30.63 $31.89 $ 29.81 $ 33.82 $ 37.28
------------ ------------ ------------ ------------ ------------ --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. 0.09 0.10 0.04 0.09 0.17 (0.01)
Net realized and unrealized gain
(loss) on investments ................ 7.52 9.54 (1.26) 4.91 (1.25) 0.85
------------ ------------ ------------ ------------ ------------ --------------
Total from investment operations ..... 7.61 9.64 (1.22) 5.00 (1.08) 0.84
------------ ------------ ------------ ------------ ------------ --------------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.09) (0.10) (0.04) (0.09) (0.18) --
Dividends in excess of net investment
income ................................ (0.00) -- -- -- -- (0.02)
Distributions from realized gains .... (7.33) (4.49) -- (2.75) (2.75) (0.23)
Distributions in excess of realized
gains ................................ (0.02) -- -- (0.07) -- (2.04)
Tax return of capital distributions .. -- -- (0.00) (0.01) -- --
------------ ------------ ------------ ------------ ------------ --------------
Total dividends and distributions. ... (7.44) (4.59) (0.04) (2.92) (2.93) (2.29)
------------ ------------ ------------ ------------ ------------ --------------
Net asset value, end of period ......... $35.85 $ 35.68 $ 30.63 $ 31.89 $ 29.81 $ 35.83
============ ============ ============ ============ ============ ==============
Total return (d) ....................... 22.20% 31.63% (3.81)% 16.77% (3.16)% 2.32%
============ ============ ============ ============ ============ ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ..... $3,865,256 $2,700,515 $1,832,164 $1,557,332 $1,210,576 $ 613
Ratio of expenses to average net assets 0.48% 0.49% 0.49% 0.49% 0.50% 0.73%(b)
Ratio of net investment income (loss)
to average net assets ................. 0.24% 0.28% 0.12% 0.28% 0.57% (0.10)%(b)
Portfolio turnover rate ................ 108% 127% 92% 89% 68% 108%
Average commission rate paid (f) ...... $0.0263 -- -- -- -- $0.0263
</TABLE>
CONSERVATIVE INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
----------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993* 1992
----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .... $11.52 $ 10.15 $ 11.12 $ 10.94 $ 11.29
----------- ---------- ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.50 0.60 0.55 0.52 0.64
Net realized and unrealized gain (loss) on
investments ................................ 0.07 1.43 (1.00) 0.65 (0.01)
----------- ---------- ---------- ---------- ---------
Total from investment operations ............ 0.57 2.03 (0.45) 1.17 0.63
----------- ---------- ---------- ---------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.51) (0.59) (0.52) (0.50) (0.62)
Dividends in excess of net investment
income ..................................... -- -- -- (0.00) --
Distributions from realized gains ........... (0.27) (0.07) -- (0.49) (0.36)
Distributions in excess of realized gains .. (0.02) -- -- -- --
----------- ---------- ---------- ---------- ---------
Total dividends and distributions ........... (0.80) (0.66) (0.52) (0.99) (0.98)
----------- ---------- ---------- ---------- ---------
Net asset value, end of period ............... $11.29 $ 11.52 $ 10.15 $ 11.12 $ 10.94
=========== ========== ========== ========== =========
Total return (d) ............................. 5.21% 20.40% (4.10)% 10.76% 5.64 %
=========== ========== ========== ========== =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............ $282,402 $252,101 $173,691 $114,418 $70,675
Ratio of expenses to average net assets ..... 0.61% 0.59% 0.59% 0.60% 0.61%
Ratio of net investment income to average net
assets ...................................... 4.48% 5.48% 5.22% 4.49% 5.77%
Portfolio turnover rate ...................... 181% 287% 228% 178% 136%
Average commission rate paid (f) ............. $0.0488 -- -- -- --
</TABLE>
86
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Continued)
December 31, 1996
BALANCED PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1996 1995 1994 1993* 1992
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period (a) .... $16.76 $14.87 $16.67 $16.19 $18.48
------------ ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.53 0.54 0.45 0.50 0.56
Net realized and unrealized gain (loss) on
investments ................................ 1.31 2.36 (1.78) 1.46 (1.11)
------------ ------------ ------------ ------------ ------------
Total from investment operations ............ 1.84 2.90 (1.33) 1.96 (0.55)
------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.53) (0.54) (0.44) (0.50) (0.55)
Dividends in excess of net investment
income ..................................... -- -- (0.03) -- --
Distributions from realized gains ........... (1.40) (0.47) -- (0.95) (1.19)
Distributions in excess of realized gains .. (0.03) -- -- (0.03) --
Tax return of capital distributions ........ -- -- (0.00) -- --
------------ ------------ ------------ ------------ ------------
Total dividends and distributions ........... (1.96) (1.01) (0.47) (1.48) (1.74)
------------ ------------ ------------ ------------ ------------
Net asset value, end of period ............... $16.64 $16.76 $14.87 $16.67 $16.19
============ ============ ============ ============ ============
Total return (d) ............................. 11.68% 19.75% (8.02)% 12.28% (2.85)%
============ ============ ============ ============ ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............ $1,637,856 $1,523,142 $1,329,820 $1,364,640 $1,076,670
Ratio of expenses to average net assets ..... 0.41% 0.40% 0.39% 0.39% 0.40%
Ratio of net investment income to average net
assets ...................................... 3.15% 3.33% 2.87% 2.99% 3.30%
Portfolio turnover rate ...................... 177% 186% 115% 99% 91%
Average commission rate paid (f) ............. $0.0516 -- -- -- --
</TABLE>
GROWTH INVESTORS PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
------------------------------------------------------------ --------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996 TO
------------------------------------------------------------ DECEMBER 31,
1996 1995 1994 1993* 1992 1996
------------ ---------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period
(a) ................................... $17.68 $ 14.66 $ 15.61 $ 14.69 $ 15.17 $ 16.78
------------ ---------- ---------- ---------- ---------- --------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................ 0.40 0.57 0.50 0.43 0.44 0.07
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions .............. 1.66 3.24 (0.98) 1.79 0.28 0.71
------------ ---------- ---------- ---------- ---------- --------------
Total from investment operations ..... 2.06 3.81 (0.48) 2.22 0.72 0.78
------------ ---------- ---------- ---------- ---------- --------------
LESS DISTRIBUTIONS:
Dividends from net investment income . (0.40) (0.54) (0.46) (0.42) (0.41) (0.02)
Dividends in excess of net investment
income ............................. (0.03) (0.01) (0.01) -- -- (0.09)
Distributions from realized gains .... (2.10) (0.24) -- (0.88) (0.79) (0.02)
Distributions in excess of realized
gains .............................. (0.01) -- -- -- -- (0.24)
------------ ---------- ---------- ---------- ---------- --------------
Total dividends and distributions .... (2.54) (0.79) (0.47) (1.30) (1.20) (0.37)
------------ ---------- ---------- ---------- ---------- --------------
Net asset value, end of period ......... $17.20 $ 17.68 $ 14.66 $ 15.61 $ 14.69 $ 17.19
============ ========== ========== ========== ========== ==============
Total return (d) ....................... 12.61% 26.37% (3.15)% 15.26% 4.85% 4.64 %
============ ========== ========== ========== ========== ==============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ..... $1,301,643 $896,134 $492,478 $278,467 $148,650 $ 472
Ratio of expenses to average net assets 0.57% 0.56% 0.59% 0.62% 0.60% 0.84 %(b)
Ratio of net investment income to
average net assets ................... 2.31% 3.43% 3.32% 2.71% 3.00% 1.69 %(b)
Portfolio turnover rate ................ 190% 107% 131% 118% 129% 190 %
Average commission rate paid (f) ...... $0.0495 -- -- -- -- $0.0495
</TABLE>
87
<PAGE>
THE HUDSON RIVER TRUST
FINANCIAL HIGHLIGHTS--(Concluded)
December 31, 1996
* Prior to July 22, 1993, Equitable Capital Management Corporation
("Equitable Capital") served as the investment adviser to the Trust. On
July 22, 1993, Alliance Capital Management L.P. acquired the business
and substantially all of the assets of Equitable Capital and became the
investment adviser to the Trust.
(a) Date as of which funds were first allocated to the Portfolios are as
follows:
Class IA:
Common Stock Portfolio--June 16, 1975
Money Market Portfolio--July 13, 1981
Balanced Portfolio--January 27, 1986
Aggressive Stock Portfolio--January 27, 1986
High Yield Portfolio--January 2, 1987
Global Portfolio--August 27, 1987
Conservative Investors Portfolio--October 2,
1989 Growth Investors Portfolio--October 2, 1989
Intermediate Government Securities Portfolio--April 1, 1991
Quality Bond Portfolio--October 1, 1993
Growth and Income Portfolio--October 1, 1993
Equity Index Portfolio--March 1, 1994
International Portfolio--April 3, 1995
Class IB:
Money Market, High Yield, Common Stock, Global, Aggressive Stock and
Growth Investors Portfolios--October 2, 1996.
(b) Annualized.
(c) Net investment income and capital changes per share are based upon
monthly average shares outstanding.
(d) Total return is calculated assuming an initial investment made at the
net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period. Total return calculated for a
period of less than one year is not annualized.
(e) On February 22, 1994, shares of the Intermediate Government Securities
Portfolio of the Trust were substituted for shares of the Trust's
Short-Term World Income Portfolio.
(f) For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose its average commission rate paid per share for
security trades on which commissions are charged.
88
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
The Hudson River Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and financial highlights present
fairly, in all material respects, the financial position of the Money Market
Portfolio, Intermediate Government Securities Portfolio, Quality Bond
Portfolio, High Yield Portfolio, Growth and Income Portfolio, Equity Index
Portfolio, Common Stock Portfolio, Global Portfolio, International Portfolio,
Aggressive Stock Portfolio, Conservative Investors Portfolio, Balanced
Portfolio and Growth Investors Portfolio (constituting The Hudson River Trust,
hereafter referred to as the "Trust") at December 31, 1996, the results of each
of their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above. The
financial highlights for the year ended December 31, 1992 were audited by other
independent accountants whose report dated February 10, 1993 expressed an
unqualified opinion on those financial statements.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
February 10, 1997
89
