AMERICAN FIDELITY
June 30, 1996
Variable
Annuity
FUND A
<PAGE>
Dear Participant:
The stock market continued to rally in the second quarter despite higher
interest rates and concerns over an accelerating economy. Net cash flows
into equity mutual funds and stronger than expected corporate profits
were the primary factors driving the market advance. The Variable
Annuity Fund A also increased with the equity market. The unit value
was $13.73 on June 30, 1996 up 12.5% from $12.20 on December 31, 1995.
Following a stronger than expected first quarter GDP growth rate of 2.2%,
the economy accelerated throughout the second quarter and is likely to post
the strongest results for the year with growth in the 4.0% to 4.5% range
expected. Growth in the second quarter was led by strong consumer
spending, higher retail sales and the rebuilding of inventories. We expect
growth to moderate in the second half of the year.
Long term interest rates rose to a 12 month high of 7.20% in June as investors
became concerned over the stronger than expected economic growth and the
potential for higher inflation rates. In addition, the non-farm employment
report provided evidence that job creation continued to remain robust.
However, the bond market improved slightly toward the end of the second
quarter by a few early signs of moderating growth in retail sales and
increased investor confidence that the Federal Reserve would refrain from
a rate hike.
Despite a stronger economy in the first half of the year, the Federal Reserve
was able to avert increasing interest rates due to a favorable inflation
outlook. The Consumer Price Index increased at an annual rate of approximately
3.5% over the first 6 months of 1996. With over a 100 basis point rise in
long term interest rates since the beginning of the year, it appears that the
bond market has overly discounted only minimal signs of increases in inflation.
We expect the financial markets to remain challenging and it would not surprise
us if the markets correct over the near term. As we enter a potentially
volatile third quarter, the stock market is clearly susceptible to any
disappointments on the economic front. We would view any near term
correction in the stock market as an opportunity to selectively add to stock
positions. Over the intermediate term we expect equities to continue their
advance due to positive market liquidity, a resurgent economy and a moderate
inflation outlook.
We continue to recommend the regular purchase of units of Variable Annuity Fund
A over a number of years in order to benefit from dollar cost averaging.
If you have any questions about your account, please contact us.
Sincerely,
JOHN W. REX
John W. Rex, Chairman
Board of Managers
JWR:jl
<PAGE>
AMERICAN FIDELITY
VARIABLE ANNUITY FUND A
<TABLE>
<CAPTION>
STATEMENT OF ASSETS
AND LIABILITIES
June 30, 1996
<S> <C>
ASSETS:
Cash & investments at
market value $84,009,491
Accrued interest and dividends 136,030
Accounts Receivable for Securities Sold 0
___________
Total Assets 84,145,521
LIABILITIES:
Accounts Payable for Securities
Purchased 0
Other accounts payable 0
Accounts payable-redemptions 0
___________
NET ASSETS $84,145,521
===========
ACCUMULATION UNITS
OUTSTANDING 6,127,658
===========
NET ASSET VALUE PER UNIT 13.7321
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
June 30, 1996
<S> <C>
Net assets, beginning of year $73,152,534
Net investment income 301,382
Realized gain on investments 2,695,274
Increase (decrease) in unrealized
appreciation of investments 6,282,667
Net purchase payments received 6,795,529
Withdrawal of funds (5,081,865)
-----------
Net assets at end of June $84,145,521
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
June 30, 1996
<S> <C> <C>
INVESTMENT INCOME:
Dividends $705,063
Interest 92,507
-----------
797,570
EXPENSES:
Mortality and expense
guaranty fees 370,693
Investment management fee 125,495 496,188
--------- -----------
NET INVESTMENT INCOME $301,382
===========
REALIZED GAIN ON
INVESTMENTS: $ 2,695,274
===========
UNREALIZED APPRECIATION
OF INVESTMENTS: $ 6,282,667
===========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 1996
Shares or Market
Principal Value
Amount Amount
--------- --------
<S> <C> <C>
COMMON STOCKS:
Chemicals & Allied Products
American Home Products Corporation 47,500 2,855,937
Johnson & Johnson 41,200 2,039,400
Avery-Dennison Corporation 36,600 2,008,425
Pfizer, Inc. 18,500 1,320,438
Merck & Company, Inc. 11,700 756,113
Abbott Laboratories 16,800 730,800
Dupont 7,200 569,700
----------
10,280,813
Business Services
Reuters Holdings PLC ADR 31,300 2,269,250
Interpublic Group of Companies 44,300 2,076,563
Cisco Systems, Inc. 33,200 1,879,950
First Data Corporation 14,400 1,146,600
Microsoft Corporation 4,050 486,506
Computer Associates 6,000 427,500
----------
8,286,369
Food & Kindred Products
The Coca-Cola Company 57,600 2,815,200
Pepsico, Inc. 64,600 2,285,225
Philip Morris Company 18,000 1,872,000
----------
6,972,425
Petroleum & Coal Products
Texaco, Inc. 27,600 2,314,950
Exxon Corporation 16,000 1,390,000
Kerr-McGee Corporation 19,800 1,205,325
Repsol S.A. 27,500 955,625
Royal Dutch Petroleum 5,000 768,750
----------
6,634,650
Depository Institutions
Citicorp 16,500 1,363,312
MBNA 30,000 855,000
Bank America Corporation 10,000 757,500
Mellon Bank Corporation 13,050 743,850
J. P. Morgan & Company 8,500 719,313
CoreStates Financial Corporation 18,200 700,700
Regions Financial Corporation 7,800 364,650
Wachovia Corporation 7,500 328,125
----------
5,832,450
Insurance Carriers
American International Group 26,100 2,574,113
AFLAC, Inc. 59,775 1,785,778
United Healthcare Company 16,700 843,350
----------
5,203,241
Electronic & Other Electric Equipment
Intel Corporation 31,900 2,342,640
General Electric Company 15,000 1,297,500
DSC Communications Corporation 41,600 1,253,200
----------
4,893,340
Non-Depository Institutions
Federal National Mortgage Association 72,400 2,425,400
Household International 16,000 1,216,000
----------
3,641,400
Industrial Machinery & Equipment
Hewlett-Packard Company 20,100 2,002,463
International Business Machines Corporation 10,000 990,000
United Technologies 4,000 460,000
----------
3,452,463
Fabricated Metal Products
The Gillette Company 38,900 2,426,387
Food Stores
Safeway, Inc. 68,600 2,263,800
Eating & Drinking Places
McDonald's Corporation 44,200 2,066,350
General Merchandise
Sears Roebuck & Company 40,300 1,959,587
Holding & Other Investment Offices
Wells Fargo & Company 5,000 1,194,375
Meditrust 12,500 417,188
Federal Realty Investment Trust 11,000 247,500
----------
1,859,063
Hotels & Other Lodging Places
Mirage Resorts, Inc. 30,900 1,668,600
Communications
Ameritech 12,700 754,063
Nynex Corporation 14,000 665,000
----------
1,419,063
Personal Services
Loewen Group, Inc. 42,000 1,270,500
Miscellaneous Retail
Price/Costco, Inc. 57,700 1,247,762
Tobacco Products
BAT Industries, PLC 51,000 806,412
UST, Inc. 12,000 411,000
----------
1,217,412
Motion Pictures
Disney (Walt) Company 19,200 1,207,200
Primary Metal Industries
Aluminum Company of America 18,300 1,049,962
Security & Commodity Brokers
Morgan Stanley Group 19,200 943,200
Electric, Gas & Sanitary Services
Texas Utilities 19,500 833,625
Railroad Transportation
Burlington Northern/Santa Fe 10,300 833,012
Transportation Equipment
Chrysler Corporation 12,000 744,000
Building Materials & Gardening Supplies
Home Depot, Inc. 7,000 378,000
----------
Total Common Stocks (Cost $54,842,516): 78,584,674
----------
SHORT-TERM INVESTMENTS:
Associates Corporation of North America
Master Note Fltg (5.36% at June 30, 1996) 3,420,036
Short Term Investment Company
Prime Portfolio Fltg (5.40% at June 30, 1996) 1,560,000
----------
Total Short-Term Investments 4,980,036
----------
Total Investments $ 83,564,710
============
</TABLE>
SAFEKEEPING OF SECURITIES
Boatmen's Trust Company
Oklahoma City, OK
INVESTMENT MANAGER
American Fidelity Assurance Company
Oklahoma City, OK
INVESTMENT SUB ADVISORS
Lawrence Kelly & Associates, Inc. Todd Investment Advisors
Los Angeles, CA Louisville, KY
<PAGE>
PARTICIPANT'S UNIT VALUE
June 1991 7.4987
Dec. 1991 8.8663
June 1992 8.4491
Dec. 1992 9.1083
June 1993 9.0570
Dec. 1993 9.7090
June 1994 8.9789
Dec. 1994 9.0936
June 1995 10.8409
Dec. 1995 12.1986
June 1996 13.7321
SERVICES PROVIDED BY AMERICAN FIDELITY
Services for Educators:
o Disability Income Plans
o Tax-Deferred Annuities
o Variable Annuities
o Fixed Annuities
o Universal Life Insurance
Cancer Protection
HR-10 Retirement Plans for the Self-Employed
Individual Retirement Annuities
Simplified Employee Pension Plans
Group Life and Permanent Group Ordinary
Young Advantage Life
Association and Group Life Plans
Individual Permanent and Term Life Insurance
HOME OFFICE
2000 CLASSEN CENTER
OKLAHOMA CITY, OKLA. 73106
GVA-276(8/96) Telephone: (405) 523-2000
<PAGE>
AMERICAN FIDELITY VARIABLE ANNUITY FUND A
Report of Voting Results
The Fund's Annual Meeting of Contract Owners was held on June 7, 1996.
In addition to electing members of the Board of Managers, contract owners
voted to ratify the selection of KPMG Peat Marwick LLP as the independent
certified public accountants for the Fund for the year ending December 31,
1996 ("Independent Accountants"). Results of the vote taken on members of
the Board of Managers were as follows:
<TABLE>
<CAPTION>
Votes
---------------------------------
<S> <C> <C>
Members of Board Withheld
of Managers For Authority
-------------------- ---------- -----------
John W. Rex 3,731,810 47,813
Daniel D. Adams, Jr. 3,737,702 41,922
Jean G. Gumerson 3,713,343 66,280
Edward C. Joullian, III 3,736,348 43,275
Gregory M. Love 3,737,580 42,043
J. Dean Robertson 3,740,817 38,806
G. Rainey Williams, Jr. 3,739,757 39,866
</TABLE>
Each of the above was elected for a term expiring at the next Annual Meeting
or until a successor has been elected and qualified. The voting results on
the Independent Accountants was as follows:
<TABLE>
<CAPTION>
Votes
------------------------------------
For Against Abstain
--------- ------- -------
<S> <C> <C> <C>
Independent Accountants 3,694,517 22,858 62,248
</TABLE>
The above voting results disregard fractions. There were no broker
nonvotes cast.
