To Contract Owners of Great-West Variable Annuity Account A:
We are pleased to provide you with this Semi-Annual Report for the period ending
June 30, 1998.
Following is a brief economic overview for the six-month period ending June 30,
1998:
Low interest rates and subdued inflation provided support for stock and bond
markets in the U.S. during the first six months of 1998; however, concerns about
continuing economic and political difficulties in Asia affected their
performance. The stock market reached record highs due to stronger-than-expected
corporate earnings, but retreated at times when concerns surfaced about how the
Asian market volatility would impact business prospects. However, the stock
market proved resilient and shook off these concerns to end the period on a
positive note.
New reports of benign inflationary pressures recently prompted a strong rally in
the bond market where the yield on the 30-year U.S. Treasury bond fell to 5.6%.
This dramatic decline in long-term rates acted as a strong catalyst to help
stocks move forward.
In the international equity markets, investors' concerns about the Asian
currency crisis contributed to dramatic declines in many equity markets;
however, European markets generally performed well.
While it is impossible to predict the future direction of the markets with any
degree of certainty, there are certain basic principles that can help investors
plan for their future needs.
First, investors are encouraged to take a long-term view of their investment
selections. Those who can afford to leave money invested through the inevitable
up and down cycles of the financial markets, may reduce their vulnerability to
any single decline. For example, historically stock prices have gone up over
longer periods of time and have significantly out-performed other types of
investments and stayed ahead of inflation. Second, you can further manage your
investing risk through diversification.
Finally, no matter what your time horizon or portfolio diversity, it makes good
sense to follow a regular investment plan, investing a certain amount of money
at the same time each month or quarter and periodically reviewing your overall
investment allocations. While this strategy -- known as dollar cost averaging --
will not assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
This material must be preceded or accompanied by a current prospectus for
Variable Annuity Account A.
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
Financial Statements for the Six Months Ended
June 30, 1998 and 1997
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
- ----------------------------------------------------------------------------------------------
(Unaudited)
Assets:
Investments, at value:
<S> <C> <C>
Common stock (cost - $6,904,176) $ 8,540,216
Short-term investment (cost - $358,630) 358,630
Investment income due and accrued 14,809
Cash 117,861
Receivable for securities sold 1,914
----------------
Total Assets 9,033,430
Liabilities:
Due to Great-West Life & Annuity Insurance Company 43,532
Contract benefits payable 32,859
----------------
Total Liabilities 76,391
----------------
Net Assets $ 8,957,039
================
Net Assets Represented By (Units at 11.465)
Accumulation units - 742,982 $ 8,518,438
Reserves for annuities in course of payment - 2,615 units 438,601
----------------
Net Assets $ 8,957,039
================
See notes to financial statements.
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1998
- ----------------------------------------------------------------------------------------------
(Unaudited)
Investment Income:
Dividends $ 79,155
Interest 14,292
---------------
93,447
Expenses:
Administration 12,477
Mortality risks 16,871
Investment management and advisory services 20,335
Expense risks 2,999
---------------
52,682
---------------
Net Investment Income 40,765
---------------
Realized and Unrealized Gain on Investments:
Net realized gain on investments 41,115
Net change in unrealized appreciation on investments 514,581
---------------
Net Realized and Unrealized Gain on Investments 555,696
---------------
Net Increase in Net Assets Resulting from Operations $ 596,461
===============
See notes to financial statements.
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
- ----------------------------------------------------------------------------------------------
(Unaudited)
From Operations: 1998 1997
------------- --------------
Net investment income $ 40,765 $ 69,491
Net realized gains 41,115 1,538,845
Net change in unrealized appreciation 514,581 (749,305)
------------- --------------
Increase in net assets resulting
from operations 596,461 859,031
From Unit Share Transactions:
Surrenders (36,074) (341,739)
Annuity payments (71,573) (61,087)
Death payments (2,283) (165,662)
Transfer in respect of mortality guarantees (2,652) 27,161
------------- --------------
Decrease in net assets derived from unit
share transactions (112,582) (541,327)
------------- --------------
Net increase in net assets 483,879 317,704
Net Assets:
Beginning of period 8,473,159 7,739,861
------------- --------------
=============
End of period $ 8,957,039 $ 8,057,565
============= ==============
See notes to financial statements.
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------
(Unaudited)
Selected data for an accumulation unit for six months ended June 30, 1998 and
years ended December 31, 1997, 1996, 1995 and 1994, were as follows:
Six Months
Ended
June 30, Years Ended December 31,
----------- ---------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ---------
Unit Value, Beginning of Period $ 10.661 $ 8.767 $ 7.501 $ 6.070 $ 6.245
Income From Investment Operations:
Net investment income .055 .167 .053 .089 .073
Net gains (losses) on investments
(realized and unrealized) .749 1.727 1.213 1.342 (.248)
---------- ---------- ---------- ---------- ---------
Total From Investment
Operations (Note A) .804 1.894 1.266 1.431 (.175)
---------- ---------- ---------- ---------- ---------
Unit Value, End of Period $ 11.465 $ 10.661 $ 8.767 $ 7.501 $ 6.070
========== ========== ========== ========== =========
Total Return 16.58% * 20.27% 15.90% 23.56% (2.80)%
Net Assets, End of Period $ 8,957,039 $ 8,473,159 $ 7,739,861 $ 6,990,140 $ 6,076,943
Average broker commission paid
per share bought or sold $ 0.0571 $ 0.0600 $ 0.0692
Ratio of Expenses to Average
Net Assets 1.40% * 1.27% 1.25% 1.18% 1.24%
Ratio of Net Investment Income
to Average Net Assets .98% * 1.74% 1.89% 2.49% 2.42%
Portfolio Turnover Rate 19.3% 151.4% 64.4% 62.2% 30.2%
</TABLE>
Note A - Net investment income and realized and unrealized gains (losses) are
reflected in the value of the accumulation units. Dividends are not declared
from income and capital gains are not distributed.
*Annualized
<PAGE>
GREAT-WEST VARIABLE ANNUITY ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997 AND 1996
- -----------------------------------------------------------------------------
(Unaudited)
NOTE 1 - HISTORY
Great-West Variable Annuity Account A (Variable Annuity Account A) is a separate
and distinct investment fund established by The Great-West Life Assurance
Company (Great-West Life). On December 31, 1991, Variable Annuity Account A was
transferred to and the variable annuity contracts were reinsured by Great-West
Life & Annuity Insurance Company (GWL&A), a wholly-owned subsidiary of
Great-West Life. Variable Annuity Account A is registered as an open-end
diversified management investment company under the Investment Company Act of
1940, and the registration under the Securities Act of 1933 of the group
variable annuity contracts funded by Variable Annuity Account A became effective
on November 27, 1968. Purchase payments were first placed in Variable Annuity
Account A on January 3, 1969.
Effective April 16, 1984, Great-West Life ceased issuing new variable annuity
contracts. Effective May 1, 1987, Great-West Life has not allowed new
participants to be enrolled under existing variable annuity contracts and,
effective May 1, 1989, no additional contributions under existing variable
annuity contracts are being accepted.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
The cost of securities sold is determined on the basis of specific
identification.
Securities traded on national exchanges are valued daily at the closing price of
the securities on these exchanges, and securities traded on over-the-counter
markets are valued daily at the average between bid and asked prices. Short-term
securities are valued at amortized cost which approximates market value.
Security transactions are recorded at the earlier of trade date or the date a
commitment is made to buy or sell the related investment.
Dividend income is accrued as of the ex-dividend date and interest income is
recorded daily.
<PAGE>
NOTE 3 - CHARGES UNDER THE CONTRACTS
GWL&A provides administrative, investment management, and advisory services to
Variable Annuity Account A and has assumed mortality and expense risks of the
contracts. A daily deduction of .003285% (an effective annual rate of 1.2064%)
is made from the gross investment income of Variable Annuity Account A. This
deduction, expressed on an annual basis, is broken down as follows: .2857% for
administrative expenses, .3863% for mortality risks, .0688% for expense risks,
and .4656% for investment management and advisory services. Effective November
1, 1996 a wholly-owned subsidiary of Great-West Life & Annuity Insurance
Company, GW Capital Management, LLC, serves as investment advisor.
NOTE 4 - INVESTMENTS
The aggregate purchases of investments and the aggregate proceeds from sales of
investments were (excluding short-term securities) as follows:
1998 1997
-------------- -------------
Common Stock
Purchases $ 1,617,804 $ 11,046,651
Proceeds from sales 4,123,096 11,673,390
NOTE 5 - FEDERAL INCOME TAXES
The Variable Annuity Account A investment income is applied to increase
accumulation unit values. Under existing federal income tax law, Variable
Annuity Account A investment income is not taxed to the extent that it is
applied to increase accumulation unit values. GWL&A reserves the right to charge
the Variable Annuity Account A if such taxes are imposed in the future.
NOTE 6 - ACCUMULATION UNITS
A summary of the transactions in accumulation units follows:
1998 1997
---------- ----------
Outstanding - January 1 746,562 819,044
Redeemed during the year
Surrender (3,381) (49,689)
Death (199) (22,793)
---------- ----------
---------- ----------
(3,580) (72,482)
---------- ----------
========== ==========
Outstanding - June 30 742,982 746,562
========== ==========
Net investment income and realized and unrealized gains are reflected in the
value of the accumulation units. Dividends are not declared from income and
gains are not distributed.
<PAGE>
<TABLE>
NOTES TO FINANCIAL STATEMENTS - Continued
- ----------------------------------------------------------------------------------------------
NOTE 7 - ACCUMULATION UNIT VALUES - (Unaudited)
ACCUMULATION ACCUMULATION
VALUATION DATE UNIT VALUE VALUATION DATE UNIT VALUE
- ------------------------ ------------------------ ---------------------- --------------------
<S> <C> <C> <C> <C> <C>
January 3, 1969 $ 1.00000000 September 30, 1980 $ 1.24125856
March 28, 1969 $ 1.07468400 December 31, 1980 $ 1.34937658
June 27, 1969 $ 1.07583259 March 31, 1981 $ 1.34420316
September 30, 1969 $ 1.04319336 June 30, 1981 $ 1.31151501
December 31, 1969 $ 1.05956294 September 30, 1981 $ 1.21957549
March 31, 1970 $ 1.05322327 December 31, 1981 $ 1.34034823
June 30, 1970 $ .86337212 March 31, 1982 $ 1.22060069
September 30, 1970 $ .98057690 June 30, 1982 $ 1.21747890
December 31, 1970 $ 1.08416020 September 30, 1982 $ 1.32107048
March 31, 1971 $ 1.28783953 December 31, 1982 $ 1.54829628
June 30, 1971 $ 1.31417688 March 31, 1983 $ 1.72492408
September 30, 1971 $ 1.34600160 June 30, 1983 $ 1.88999803
December 31, 1971 $ 1.40624309 September 30, 1983 $ 1.85391985
March 31, 1972 $ 1.50937876 December 31, 1983 $ 1.86959830
June 30, 1972 $ 1.46441659 March 31, 1984 $ 1.77987261
September 29, 1972 $ 1.41141921 June 30, 1984 $ 1.74123169
December 31, 1972 $ 1.43641768 September 30, 1984 $ 1.89436321
March 30, 1973 $ 1.14518173 December 31, 1984 $ 1.94021457
June 29, 1973 $ .94975920 March 31, 1985 $ 2.11639231
September 28, 1973 $ 1.12752636 June 30, 1985 $ 2.31593116
December 31, 1973 $ .98798465 September 30, 1985 $ 2.17502453
March 29, 1974 $ .92504974 December 31, 1985 $ 2.50415588
June 28, 1974 $ .84636772 March 31, 1986 $ 2.92575544
September 30, 1974 $ .69582357 June 30, 1986 $ 3.12894373
December 31, 1974 $ .76438983 September 30, 1986 $ 2.79849885
March 31, 1975 $ .85484991 December 31, 1986 $ 2.92996949
June 30, 1975 $ .94523691 March 31, 1987 $ 3.45357315
September 30, 1975 $ .86720026 June 30, 1987 $ 3.47692861
December 31, 1975 $ .89703274 September 30, 1987 $ 3.58107036
March 31, 1976 $ 1.02654318 December 31, 1987 $ 2.90927633
June 30, 1976 $ 1.04254066 March 31, 1988 $ 3.03211290
September 30, 1976 $ 1.02175714 June 30, 1988 $ 3.14170371
December 31, 1976 $ 1.06312535 September 30, 1988 $ 3.19555027
March 31, 1977 $ .96668709 December 31, 1988 $ 3.24632490
June 30, 1977 $ .97779837 March 31, 1989 $ 3.40048089
September 30, 1977 $ .91543186 June 30, 1989 $ 3.66057985
December 31, 1977 $ .91330430 September 30, 1989 $ 4.03595925
March 31, 1978 $ .88025820 December 31, 1989 $ 4.16667314
June 30, 1978 $ .94981303 March 31, 1990 $ 4.10420565
September 30, 1978 $ 1.02175412 June 30, 1990 $ 4.40575331
December 31, 1978 $ .94566769 September 30, 1990 $ 3.95067300
March 31, 1979 $ 1.03700469 December 31, 1990 $ 4.09586804
June 30, 1979 $ 1.03384794 March 31, 1991 $ 4.67731834
September 30, 1979 $ 1.07966980 June 30, 1991 $ 4.46997251
December 31, 1979 $ 1.09861144 September 30, 1991 $ 4.70629835
March 31, 1980 $ 1.02778990 December 31, 1991 $ 5.17489662
June 30, 1980 $ 1.15888482
</TABLE>
<PAGE>
ACCUMULATION UNIT VALUES - (Unaudited) - Concluded
ACCUMULATION
VALUATION DATE UNIT VALUE
- ------------------------ ------------------------
March 31, 1992 $ 5.00089395
June 30, 1992 $ 4.90045709
September 30, 1992 $ 4.94334533
December 31, 1992 $ 5.39680799
March 31, 1993 $ 5.70268053
June 30, 1993 $ 5.91443136
September 30, 1993 $ 6.20352631
December 31, 1993 $ 6.24551098
March 31, 1994 $ 6.07099873
June 30, 1994 $ 5.98373289
September 30, 1994 $ 6.21184797
December 31, 1994 $ 6.07070336
March 31, 1995 $ 6.43386353
June 30, 1995 $ 6.93539739
September 30, 1995 $ 7.34349110
December 31, 1995 $ 7.50058268
March 31, 1996 $ 7.97167430
June 30, 1996 $ 8.16277408
September 30, 1996 $ 8.36088935
December 31, 1996 $ 8.76699327
March 31, 1997 $ 9.10319430
June 30, 1997 $ 9.87479147
September 30, 1997 $ 10.11055595
December 31, 1997 $ 10.66148379
March 31, 1998 $ 10.99141808
June 30, 1998 $ 11.46520474
<PAGE>
The Maxim Series Fund
Variable Annuity Account
COMMON STOCK
COMMUNICATIONS --- 1.8%
2,800 AT&T Corp 159,950
$159,950
CONSUMER SERVICES --- 12.6%
2,600 Bausch & Lomb Inc 130,325
2,000 Becton Dickinson & Co 155,250
1,300 Bristol-Myers Squibb Co 149,418
3,500 CR Bard Inc 133,217
2,700 H&R Block Inc 113,737
1,900 Johnson & Johnson 140,125
5,400 King World Productions Inc* 137,700
1,200 Merck & Company Inc 160,500
$1,120,272
CREDIT INSTITUTIONS --- 8.4%
1,500 American Express Co 171,000
2,640 Banc One Corp 147,344
3,100 First Hawaiian Inc 112,762
2,200 Mellon Bank Corp 153,175
2,100 NationsBank Corp 160,650
$744,931
ELECTRIC --- 3.0%
3,800 Baltimore Gas & Electric Co 118,036
3,300 Consolidated Edison Inc 152,005
$270,041
ELECTRONICS - HIGH TECH --- 19.6%
2,900 Adobe Systems Inc 123,067
2,000 Eastman Kodak Co 146,124
3,000 Electronic Data Systems Corp 120,000
1,700 Emerson Electric Co 102,637
2,000 General Electric Co 182,000
2,300 Hewlett-Packard Co 137,712
1,300 Honeywell Inc 108,631
2,700 Johnson Controls Inc 154,405
2,100 Maytag Corp 103,688
1,700 Motorola Inc 89,355
8,000 Scientific-Atlanta Inc 203,000
4,000 Sun Microsystems Inc* 173,748
2,100 Thomas & Betts Corp 103,425
$1,747,792
HIGHWAYS --- 1.1%
3,000 Ryder System Inc 94,686
$94,686
HOLDING & INVEST OFFICES --- 8.1%
2,000 Equity Residential Properties Trust 94,874
2,200 MGIC Investment Corp 125,536
4,400 S & P 500 Depositary Receipt 498,573
$718,983
INDUSTRIAL SERVICES --- 2.4%
4,200 Kelly Services Inc Class A 148,575
3,400 Reynolds & Reynolds Co Class A 61,836
$210,411
INSURANCE --- 5.1%
1,600 Allstate Corp 146,499
1,200 American International Group Inc 175,200
3,000 Arthur J Gallagher & Co 134,250
$455,949
MFTG - CONSUMER PRODS --- 4.1%
2,300 Anheuser-Busch Companies Inc 108,530
2,800 Leggett & Platt Inc 70,000
4,100 Rubbermaid Inc 136,067
1,000 Springs Industries Inc Class A 46,125
$360,722
MFTG - INDUSTRIAL PRODS --- 9.3%
3,100 3Com Corp* 95,130
1,400 Armstrong World Industries Inc 94,325
2,000 Kennametal Inc 83,500
2,000 Kimberly-Clark Corp 91,750
1,700 PPG Industries Inc 118,255
2,900 Pharmacia & Upjohn Inc 133,763
2,000 Rockwell International Corp 96,124
3,400 USX-US Steel Group 112,200
$825,047
MINING --- 0.9%
3,400 Newmont Mining Corp 80,325
$80,325
OIL & GAS --- 7.7%
2,200 Amoco Corp 91,575
1,400 Atlantic Richfield Co 109,375
2,100 Coastal Corp 146,605
2,400 Halliburton Co 106,949
1,600 Mobil Corp 122,600
3,000 UnoCal Corp 107,250
$684,354
RETAIL TRADE --- 4.0%
3,300 Albertson's Inc 170,980
5,000 Brinker International Inc* 96,250
2,700 Limited Inc 89,437
$356,667
TELEPHONE --- 3.3%
3,400 Bell Atlantic Corp 155,125
3,400 SBC Communications Inc 136,000
$291,125
TRANSPORTATION EQUIPMENT --- 3.5%
3,400 Chrysler Corp 191,675
2,200 TRW Inc 120,175
$311,850
WHOLESALE TRADE -CONSUMER --- 1.2%
2,200 Nike Inc Class B 107,111
$107,111
TOTAL COMMON STOCK --- 96.0% $8,540,216
(Cost $6,904,176)
SHORT-TERM INVESTMENTS
INSURANCE --- 2.0%
175,000 Metlife Funding Inc 174,034
$174,034
SECURITIES & COMMODITIES --- 2.1%
185,000 Merrill Lynch & Co Inc 184,596
$184,596
TOTAL SHORT-TERM INVESTMENTS --- 4.0% $358,630
(Cost $358,630)
TOTAL VARIABLE ANNUITY ACCOUNT --- 100.0% $8,898,846
(Cost $7,262,806)
