<PAGE>
- --------------------------------------------------------------------------------
1
DEAR SHAREHOLDER:
We are pleased to provide this report for INA Investment Securities, Inc.
covering the six months ended June 30, 1996.
SECOND QUARTER PERFORMANCE
The second quarter of 1996 was marked by increased interest rate volatility.
The change resulted from growing investor uncertainty as to whether the
economy's momentum would fuel inflation, and ultimately lead the Federal
Reserve (Fed) to tighten monetary conditions.
The 30-year Treasury's yield ranged from 6.60% and 7.20%, rallying to close the
quarter at 6.89%. The bond market, as measured by the Lehman Brothers
Government/Corporate Bond Index, returned 0.47% and -1.87%, respectively, for
the quarter and year to date.
COMPANY PERFORMANCE
After the deduction of expenses and reinvestment of dividends, the Company, on
a net asset value basis, returned 0.22% and -2.05%, respectively, for the
quarter and year to date and -1.01% and -2.72%, respectively, for the quarter
and year to date based on the New York Stock Exchange share prices, adjusted
dividend payments.
PORTFOLIO ACTIVITY
Company assets remain fully invested. On June 30, 1996, corporate and foreign
bonds represented approximately 61.8% of portfolio holdings, U.S.
Government/agency securities 27.6%, and cash equivalents and other net assets
10.6%. Per-share net asset value was $18.44, down from $18.73 on March 31. A
dividend of $.33 was declared during the second quarter.
QUARTERLY DIVIDEND
A quarterly dividend distribution of 32 cents per share was declared Tuesday,
July 30, 1996 by the Directors of INA Investment Securities, Inc., payable
September 10. This represents a reduction from the 33 cent per share quarterly
rate that the Company had paid since the third quarter of 1992. This adjustment
was necessitated by the decline in net investment income in recent years. The
decline in income has resulted from the replacement of higher coupon bonds
purchased for the Company in earlier years by lower coupon issues, reflective
of generally lower interest rate levels, as the original bonds have matured or
have been sold for investment and credit reasons.
OUTLOOK
The market's current rate levels are a reflection of investors' expectations
that the Fed will move to tighten credit further in coming months. Mixed
economic data will likely result in a continued volatile interest rate
environment. Despite this uncertain backdrop, we expect corporate bonds to
provide solid returns to investors. The corporate sector should continue to
perform well, buoyed by broad-based investor demand and a resilient economy.
Sincerely,
/s/ R. Bruce Albro
R. Bruce Albro, Chairman
INA Investment Securities, Inc.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. INVESTMENTS IN SECURITIES June 30, 1996 2
(Unaudited)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
(000) (000)
- ------------------------------------------------------------------------------
<S> <C> <C>
LONG-TERM BONDS - 89.4%
CONSUMER AND RETAIL - 2.7%
Dayton Hudson Corp., 9.75%, 2002 $ 500 $ 561
Federated Dept. Stores, Inc., 8.5%, 2003 1,000 990
Herff Jones, Inc., 11.0%, 2005 (144A security acquired Aug.
1995 for $300,000)* 300 309
Smith's Food and Drug Centers, Inc., 11.25%, 2007 500 504
-------
2,364
-------
CONSUMER NON-CYCLICAL - .6%
Tenet Healthcare Corp., 9.625%, 2002 500 531
-------
ENTERTAINMENT AND COMMUNICATIONS - 9.6%
Century Communications Corp., 9.5%, 2005 500 483
Continental Cablevision, Inc., 8.3%, 2006 500 517
MFS Communications, Inc., Zero Coupon,
8.875%**, 2006 500 303
News America Holdings, Inc., 9.25%, 2013 500 544
ProNet, Inc., 10.875%, 2006 500 490
Rogers Communications, Inc., 10.875%, 2004 500 509
TKR Cable, Inc., 10.5%, 2007 500 548
Tele-Communications, Inc., 9.25%, 2002 1,000 1,063
360 Communications Co., 7.125%, 2003 1,400 1,339
Time Warner Entertainment Co., 7.25%, 2008 1,750 1,643
Vanguard Cellular Systems, Inc., 9.375%, 2006 500 484
Viacom International, Inc., 9.125%, 1999 500 510
-------
8,433
-------
FINANCIAL - 18.0%
Associates Corp. of N.A., 9.7%, 1997 3,000 3,087
Case Equipment Loan Trust 1996-A, 5.5%, 2003 2,500 2,469
Corporacion Andina De Fome, 7.1%, 2003 200 192
First Union Corp., 7.0%, 2006 1,000 972
Fleet Mortgage Group, Inc., 6.5%, 2000 1,000 982
Heller Financial, Inc., 6.56%, 1999 1,000 993
Inter-American Development Bank, 8.875%, 2009 4,000 4,586
Middletown Trust, 10.875%, 1998 390 412
The Money Store Home Loan Trust, 6.65%, 2017 1,044 1,018
</TABLE>
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
(000) (000)
- ------------------------------------------------------------------------
<S> <C> <C>
Structured Coupon Receipts, (Stripped-Interest Only),
10.203%**, 1997 (144A security acquired
June 1993; amortized cost $182,444)* $ 5,314 $ 185
10.207%**, 1997 (144A security acquired
June 1993; amortized cost $70,459)* 2,310 71
Western National Corp., 7.125%, 2004 1,000 975
-------
15,942
-------
FOOD AND BEVERAGE - 3.1%
Bass America, Inc., 8.125%, 2002 1,500 1,580
ConAgra, Inc., 9.75%, 2021 1,000 1,188
-------
2,768
-------
INDUSTRIAL - 8.6%
Air Products & Chemicals, Inc., 8.5%, 2006 2,000 2,131
Colt Industries, Inc., 11.25%, 2015 160 163
Fisher Scientific International, Inc.,
7.125%, 2005 500 476
ICF Kaiser International, Inc., 12.0%, 2003 500 478
LaRoche Inds., Inc., 13.0%, 2004 500 530
Magma Copper Co., 12.0%, 2001 500 540
Riverwood International Corp., 10.25%, 2006 450 447
Smurfit Capital Funding PLC, 6.75%, 2005 1,000 953
Tjiwi Kimia International Finance, 13.25%, 2001 500 560
Waste Management, Inc., Zero Coupon,
6.00%,** (Lyon), 2012 2,250 849
West Point Stevens, Inc., 9.375%, 2005 500 483
-------
7,610
-------
OIL & GAS - 5.4%
Imexsa Export Trust, 10.125%, 2003 750 750
Louis Dreyfus Nat. Gas Corp., 9.25%, 2004 1,000 1,024
Mesa Operating Co., 10.625%, 2006 150 150
Sonat, Inc.,
9.5%, 1999 1,000 1,070
9.0%, 2001 250 267
Transcontinental Gas Pipe Line Corp.,
9.125%, 2017 1,475 1,535
-------
4,796
-------
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. INVESTMENTS IN SECURITIES June 30, 1996 3
(Unaudited) (Continued)
<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
(000) (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION - 5.5%
CSX Corp., 9.0%, 2006 $ 2,300 $ 2,555
Delta Air Lines, Inc., 10.14%, 2012 1,000 1,141
Hertz Corp., 7.0%, 2003 500 493
Japan Air Lines Co. Ltd., 11.0%, 1997 580 626
-------
4,815
-------
UTILITIES - 8.3%
Cajun Electric Power Co-op.,
8.92%, 2019 500 548
9.52%, 2019 1,000 1,088
Commonwealth Edison Co., 8.125%, 2007 2,000 1,997
El Paso Electric Co., 7.25%, 1999 500 492
Endesa Overseas Chile, 7.2%, 2006 1,000 976
L S Power Funding Corp., 7.19%, 2010 (144A security acquired
June 1995 for $1,000,000)* 1,000 939
Public Service Co. Colorado, 8.125%, 2004 290 304
Salton Sea Funding Corp., 7.02%, 2000 (144A security
acquired June 1996 for $1,000,000)* 1,000 1,001
-------
7,345
-------
U.S. GOVERNMENT & AGENCIES - 27.6%
Federal Farm Credit Banks, 6.2%, 2008 350 325
Federal Home Loan Mortgage Corp.,
Series 1496, (PAC, Stripped-Interest Only), 12.194%**, 2019 3,600 500
Federal National Mortgage Assoc.,
6.5%, 2008 1,163 1,133
6.5%, 2009 379 370
United States Treasury Bonds,
10.75%, 2005 1,370 1,736
12.75%, 2010 1,300 1,825
8.5%, 2020 12,270 14,308
United States Treasury Notes,
7.125%, 1999 10 10
6.625%, 2001 2,565 2,582
7.5%, 2001 550 574
7.875%, 2001 450 477
7.25%, 2004 500 518
-------
24,358
-------
TOTAL LONG-TERM BONDS (Cost - $78,536,958) 78,962
-------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF
SHARES OR MARKET
PRINCIPAL VALUE
(000) (000)
- ------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK - .8%
(Cost - $667,500)
Morgan Stanley Group, Inc. 15,000 $ 675
-------
SHORT-TERM OBLIGATIONS - 11.1%
COMMERCIAL PAPER - 11.1%
American Express Credit Corp., 5.40%, 7/8/96 $ 2,838 2,838
Avery-Dennison Corp., 5.57%, 7/1/96 2,000 2,000
Philip Morris Capital Corp., 5.33%, 7/1/96 2,500 2,500
Shell Oil Co., 5.3%, 7/8/96 2,505 2,505
-------
TOTAL SHORT-TERM OBLIGATIONS
(Cost - $9,843,415) 9,843
-------
TOTAL INVESTMENTS IN SECURITIES - 101.3%
(Total Cost - $89,047,873) 89,480
Liabilities, Less Cash and Other Assets - (1.3%) (1,114)
-------
NET ASSETS - 100.0%
(equivalent to $18.44 per share based on 4,792,215 shares
outstanding) $88,366
=======
</TABLE>
* Indicates restricted security; the aggregate value of restricted securities
is $2,506,329 (aggregate cost $2,552,903) which is approximately 2.8% of net
assets. Valuations have been furnished by brokers trading in the securities
or a pricing service for all restricted securities.
** Effective yield as of purchase date.
----------------------------------------------------
PORTFOLIO COMPOSITION (UNAUDITED)
June 30, 1996
<TABLE>
<CAPTION>
QUALITY RATINGS* OF LONG- MARKET % OF
TERM VALUE MARKET
BONDS AND PREFERRED STOCK (000) VALUE
-------------------------------------------
<S> <C> <C>
Aaa/AAA $35,628 44.6%
Aa/AA 1,261 1.6%
A/A 10,656 13.4%
Baa/BBB 20,848 26.2%
Ba/BB 6,027 7.6%
B/B 5,217 6.6%
------- -----
$79,637 100.0%
======= =====
</TABLE>
*The higher of Moody's or Standard & Poor Ratings.
- -----------------------------------------------------
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. 4
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
ASSETS:
Investments at market value
(Cost - $89,047,873) $89,480
Cash 1
Interest receivable 1,802
Investment for deferred compensation plan 73
(Cost - $60,509)
Other 2
-------
TOTAL ASSETS 91,358
-------
LIABILITIES:
Payable for investments purchased 2,714
Deferred directors' fees payable 131
Accrued advisory fees payable 42
Other accrued expenses (including $24,350
due to affiliate) 105
-------
TOTAL LIABILITIES 2,992
-------
NET ASSETS (Equivalent to $18.44 per share based on 4,792,215
shares outstanding; 12,000,000 shares of $.10 par value autho-
rized) $88,366
=======
COMPONENTS OF NET ASSETS:
Paid in capital $89,810
Overdistributed net investment income (88)
Unrealized appreciation of investments 444
Accumulated net realized loss (1,800)
-------
NET ASSETS $88,366
=======
</TABLE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C> <C>
INVESTMENT INCOME
INCOME:
Interest $ 3,516
EXPENSES:
Investment advisory fees $ 236
Custodian fees 38
Transfer agent fees 32
Directors' fees 32
Administrative services 28
Shareholder reports 25
State taxes 14
Auditing and Legal fees 13
Other 7 425
----- --------
NET INVESTMENT INCOME 3,091
--------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS
Net realized loss from investments (1,256)
Unrealized depreciation of investments (3,750)
--------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (5,006)
--------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,915)
========
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. 5
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS FOR THE
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1996 1995
---------- ------------
(IN THOUSANDS)
-----------------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 3,091 $ 6,348
Net realized gain (loss) from investments (1,256) 1,556
Unrealized appreciation (depreciation) on investments (3,750) 7,735
------- -------
Net increase (decrease) in net assets from operations (1,915) 15,639
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ($.66 and $1.32 per share,
respectively) (3,163) (6,326)
------- -------
NET INCREASE (DECREASE) IN NET ASSETS (5,078) 9,313
NET ASSETS:
Beginning of period 93,444 84,131
------- -------
End of period (Including overdistributed net invest-
ment income of $88,494 and $15,270, respectively) $88,366 $93,444
======= =======
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) 6
1. SIGNIFICANT ACCOUNTING POLICIES. INA Investment Securities, Inc. (the
"Company") is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company. The fund's
objective is to generate income and obtain capital appreciation by investing at
least 85% of its total assets in investment grade debt securities and preferred
stocks. 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 in the financial
statements. The following is a summary of significant accounting policies
consistently followed by the Company in the preparation of its financial
statements.
A. SECURITY VALUATION -- Debt securities traded in the over-the-counter market,
including listed securities whose primary markets are believed to be over-the-
counter, are valued on the basis of valuations furnished by brokers trading in
the securities or a pricing service, which determines valuations for normal,
institutional-size trading units of such securities using market information,
transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders. Short-term
investments with remaining maturities of up to and including 60 days are valued
at amortized cost, which approximates market. Short-term investments that
mature in more than 60 days are valued at current market quotations. Other
securities and assets of the Company are appraised at fair value as determined
in good faith by, or under the authority of, the Company's Board of Directors.
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security transactions
are accounted for on the trade date (date the order to buy or sell is
executed). Dividend income is recorded on the ex-dividend date, and interest
income is recorded on the accrual basis. The Company does not amortize premiums
or discounts for book purposes, except for original issue discounts which are
amortized over the life of the respective securities. Securities gains or
losses are determined on the basis of identified cost. The cost for Federal
income tax purposes is substantially the same.
C. FEDERAL TAXES -- It is the Company's policy to continue to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income or capital gains, if any,
to its shareholders. Therefore, no Federal income or excise taxes on realized
income have been accrued.
D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions
are recorded by the Company on the ex-dividend date. Payments in excess of
financial accounting income due to differences between financial and tax
accounting, to meet the distribution requirements for tax basis income, are
deducted from paid in capital when such differences are determined to be
permanent.
2. INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES. Investment
advisory fees were paid or accrued to CIGNA Investments, Inc. (CII), certain
officers and directors of which are affiliated with the Company. Such advisory
fees are based on an annual rate of 0.55% of the first $75 million of average
weekly net asset value and 0.4% thereafter.
The Company reimburses CII for a portion of the compensation and related
expenses of the Company's Treasurer and Secretary and certain persons who
assist in carrying out the responsibilities of those offices. For the six
months ended June 30, 1996, the Company paid or accrued $27,944.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) 7
(Continued)
CII is an indirect, wholly-owned subsidiary of CIGNA Corporation.
3. DIRECTORS' FEES. Directors' fees represent remuneration paid or accrued to
directors who are not employees of CIGNA Corporation or any of its affiliates.
Directors may elect to defer receipt of all or a portion of their fees which
are invested in mutual fund shares in accordance with a deferred compensation
plan.
4. PURCHASES AND SALES OF SECURITIES. Purchases and sales of securities for the
six months ended June 30, 1996 were as follows (excluding short-term
obligations):
<TABLE>
<CAPTION>
PROCEEDS
COST OF FROM
SECURITIES SECURITIES
PURCHASED SOLD
----------- -----------
<S> <C> <C>
Bonds $17,439,505 $21,505,532
U.S. Government Obligations 14,840,855 15,629,329
Preferred Stock 667,500 --
----------- -----------
$32,947,860 $37,134,861
=========== ===========
</TABLE>
As of June 30, 1996, the cost of securities for Federal income tax purposes was
$89,047,873. At June 30, 1996, unrealized appreciation for Federal income tax
purposes aggregated $432,213 of which $2,118,481 related to appreciated
securities and $1,686,268 related to depreciated securities.
5. CAPITAL LOSS CARRYOVER. At December 31, 1995, the Company had a capital loss
carryover for Federal income tax purposes of $306,433 which expires in 2002.
Under current tax law, capital losses realized after October 31 may be deferred
and treated as occurring on the first day of the following year. For the year
ended December 31, 1995, the Company has elected to defer $236,694 of capital
losses occurring between November 1, 1995 and December 31, 1995 under these
rules. Such deferred losses will be treated as arising on the first day of the
year ended December 31, 1996.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) 8
(Continued)
5. FINANCIAL HIGHLIGHTS. The following table includes data, ratios and
supplemental data for a share outstanding throughout each period and other
performance information:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MOS.
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1996 1995 1994 1993 1992 1991
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
NET ASSET VALUE,
BEGINNING OF PERIOD $ 19.50 $17.56 $ 19.72 $ 18.75 $ 18.85 $ 17.25
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(1) 0.64 1.32 1.39 1.39 1.49 1.51
Net realized and
unrealized gain (loss) (1.04) 1.94 (2.00) 1.01 (0.11) 1.61
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS (0.40) 3.26 (0.61) 2.40 1.38 3.12
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment
income (0.66) (1.32) (1.35) (1.43) (1.48) (1.52)
From capital gains -- -- (0.20) -- -- --
------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS (0.66) (1.32) (1.55) (1.43) (1.48) (1.52)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD $ 18.44 $ 19.50 $ 17.56 $ 19.72 $ 18.75 $ 18.85
======= ======= ======= ======= ======= =======
MARKET VALUE, END OF
PERIOD $ 16.25 $ 17.38 $ 15.25 $ 18.25 $ 17.25 $ 17.75
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN:
Per share market value (2.72)% 23.07% (8.34)% 14.21% 5.39% 30.21%
Per share net asset
value (2) (2.05)% 19.17% (3.13)% 13.03% 7.64% 18.99%
RATIOS AND SUPPLEMENTAL
DATA:
Net assets, end of
period (000 omitted) $88,366 $93,444 $84,131 $94,482 $89,839 $90,345
Ratio of operating
expenses to average net
assets 0.47% 1.00% 0.96% 0.96% 0.90% 0.93%
Ratio of net investment
income to average net
assets 3.43% 7.10% 7.42% 7.03% 7.96% 8.49%
Portfolio turnover 38% 158% 86% 159% 41% 72%
</TABLE>
(1) Net investment income per share has been calculated in accordance with SEC
requirements, with the exception that end of year accumulated
undistributed/(overdistributed) net investment income has not been adjusted
to reflect current year permanent differences between financial and tax ac-
counting.
(2) Total investment return based on per share net asset value reflects the ef-
fects of changes in net asset value on the performance of the Company dur-
ing each year, and assumes distributions were reinvested at net asset val-
ue. These percentages do not correspond with the performance of a share-
holder's investment in the Company based on market value since the rela-
tionship between the market price of the stock and net asset value varied
during each period.
<PAGE>
- --------------------------------------------------------------------------------
INA INVESTMENT SECURITIES, INC. NOTES TO FINANCIAL STATEMENTS (Unaudited) 9
(Continued)
6. QUARTERLY RESULTS (UNAUDITED). The following is a summary of quarterly
results of operations (in thousands except for per share amounts):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET REALIZED AND
UNREALIZED GAIN (LOSS)
INVESTMENT INCOME NET INVESTMENT INCOME ON INVESTMENTS NET ASSETS
PERIOD ENDED TOTAL PER SHARE TOTAL PER SHARE TOTAL PER SHARE INCR. (DECR.) PER SHARE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31, 1994 $ 1,796 $ .37 $ 1,577 $ .33 $ (4,590) $ (.96) $(4,594) $(.96)
June 30, 1994 1,983 .41 1,774 .37 (2,251) (.47) (2,059) (.43)
September 30, 1994 1,872 .39 1,659 .34 (1,252) (.26) (2,025) (.43)
December 31, 1994 1,853 .39 1,636 .35 (1,474) (.31) (1,673) (.34)
March 31, 1995 1,782 .37 1,567 .33 2,529 .53 2,515 .52
June 30, 1995 1,821 .38 1,600 .33 3,603 .75 3,622 .76
September 30, 1995 1,820 .38 1,599 .33 709 .15 726 .15
December 31, 1995 1,813 .38 1,582 .33 2,450 .51 2,450 .51
March 31, 1996 1,798 .38 1,581 .33 (3,706) (.77) (3,706) (.77)
June 30, 1996 1,718 .36 1,510 .32 (1,300) (.27) (1,372) (.29)
</TABLE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
- --------------------------------------------------------------------------------
INA Investment Securities, Inc.
Directors
R. Bruce Albro
Senior Managing Director,
CIGNA Investments, Inc.
Hugh R. Beath
Advisory Director,
AdMedia Corporate Advisors, Inc.
Russell H. Jones
Vice President,
Kaman Corporation
Paul J. McDonald
Executive Vice President, Finance
and Chief Financial Officer,
Friendly Ice Cream Corporation
Arthur C. Reeds III
President, CIGNA Investment
Management and CIGNA
Investments, Inc.
Officers
R. Bruce Albro
Chairman of the Board and
President
Alfred A. Bingham III
Vice President and Treasurer
Lawrence S. Harris
Vice President
Jeffrey S. Winer
Vice President and Secretary
- --------------------------------------------------------------------------------
INA Investment Securities, Inc. is a closed-end, diversified management
investment company that invests primarily in debt securities. The investment
adviser is CIGNA Investments, Inc., Hartford, Connecticut 06152.
Shareholders may elect to have dividends automatically reinvested in additional
shares of INA Investment Securities, Inc. by participating in the Automatic
Dividend Investment Plan. For a brochure describing this Plan or general
inquiries about your account, contact State Street Bank and Trust Company, Stock
Transfer Department, P.O. Box 8200, Boston, Massachusetts, 02266-8200, or call
toll-free 1.800.426.5523.
- --------------------------------------------------------------------------------
Matters Submitted to a Vote of Shareholders
An Annual Meeting of the Shareholders of INA Investment Securities, Inc. (the
"Company") was held on Tuesday April 30, 1996 at 2:00 p.m., Eastern Time.
Five Directors were elected by a vote of shareholders to serve as members of the
Board of the Fund until the next Annual Meeting of Shareholders or until the
election and qualification of their successors. Shareholders of the Company
voted to elect the following Directors:
<TABLE>
<CAPTION>
For Vote Withheld
--- -------------
<S> <C> <C>
R. Bruce Albro 3,804,401.546 57,267.327
Hugh R. Beath 3,793,241.270 68,427.603
Russell H. Jones 3,796,238.694 65,430.179
Paul J. McDonald 3,796,255.308 65,413.565
Arthur C. Reeds, III 3,805,503.970 56,164.000
</TABLE>
The appointment of Price Waterhouse LLP to serve as independent accountants for
the fiscal year ending December 31, 1996 was ratified by a vote of shareholders
of the Company as follows:
<TABLE>
<CAPTION>
For Against Abstain
--- ------- -------
<S> <C> <C>
3,788,836.819 33,596.845 39,235.209
</TABLE>
There were no broker non-votes with respect to the matters submitted to a vote
of shareholders of the Company.
No other business was transacted at the meeting.
<PAGE>
- --------------------------------------------------------------------------------
[CIGNA LOGO APPEARS HERE]
- --------------------------------------------------------------------------------
INA Investment Securities, Inc.
Semiannual Report
June 30, 1996
- --------------------------------------------------------------------------------
----------------------
[CIGNA LOGO APPEARS HERE] BULK RATE
U.S. POSTAGE
PAID
INA Investment Securities, Inc. SO. HACKENSACK, NJ
P.O. Box 13856 PERMIT 750
Philadelphia, PA 19101 ----------------------
