CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL PORTFOLIOS
SEMI-ANNUAL REPORT
JUNE 30, 2000
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CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL MONEY MARKET PORTFOLIO
MANAGED BY CALVERT ASSET MANAGEMENT COMPANY, INC.
DEAR INVESTOR:
THE INVESTMENT CLIMATE
DURING THE PAST 6 MONTHS, THE MAJOR STOCK MARKET INDICES HAVE DECLINED. THE
MAJOR FORCES DRIVING THE BULL MARKET AND ECONOMIC GROWTH HAVE BEGUN TO SHOW
SIGNS OF FALTERING. LOW INFLATION, LOW INTEREST RATES, ROBUST CORPORATE
EARNINGS, AND A SURGE IN Y2K SPENDING HELPED CONTINUE THE CURRENT ECONOMIC
EXPANSION. UNPRECEDENTED STOCK MARKET PERFORMANCE HELPED CONSUMER CONFIDENCE
REACH NEW HIGHS. THIS, COUPLED WITH ACCELERATING CONSUMER SPENDING AND A SMALLER
POOL OF AVAILABLE WORKERS, CAUSED CONCERN THAT THE CURRENT RATE OF EXPANSION WAS
UNSUSTAINABLE AND THAT SIGNS OF INFLATION WOULD SOON APPEAR.
AS A RESULT OF THESE CONCERNS, THE FEDERAL RESERVE OPEN MARKET COMMITTEE (FED OR
FOMC) RAISED THE FEDERAL FUNDS RATE THREE TIMES THIS YEAR. ON FEBRUARY 2, THE
FOMC RAISED RATES 25 BASIS POINTS TO 5.75% IN AN EFFORT TO KEEP THE ECONOMY
GROWING, BUT AT A SLOWER PACE. AS THE ECONOMY ROLLED ON, THE FED MOVED AGAIN ON
MARCH 21 WITH ANOTHER 25 BASIS POINT MOVE TO 6.00%. ONCE AGAIN, ECONOMIC GROWTH
CONTINUED AT A FEVERISH PACE AND SIGNS OF INFLATION STARTED TO CREEP IN,
PROMPTING THE FED TO RAISE RATES 50 BASIS POINTS TO 6.50% ON MAY 16.
AFTER SIX RATE HIKES SINCE JUNE, 1999, - AND WITH THREE OCCURRING DURING THE
PAST SIX MONTHS - THE FED FINALLY KEPT THE FED FUNDS RATE UNCHANGED AT ITS LAST
MEETING SINCE RECENT ECONOMIC DATA HAS SHOWN PRELIMINARY SIGNS OF GROWTH
DECELERATION. HOWEVER, THE FOMC WILL CONTINUE TO MONITOR ECONOMIC RELEASES FOR
ANY SIGNS OF INFLATIONARY PRESSURES.
PERFORMANCE AND STRATEGY
FOR THE SIX MONTHS ENDED JUNE 30, 2000, THE FUND SHARES RETURNED 2.82%, AHEAD OF
THE 2.27% FOR THE LIPPER VARIABLE ANNUITY MONEY MARKET INDEX.
DURING THE FIRST QUARTER OF 2000, SHORT-TERM TAXABLE RATES CONTINUED TO RISE
DRAMATICALLY IN LIGHT OF FED TIGHTENING. TAXABLE MONEY MARKET RATES WERE
PRICING IN MORE FED RATE INCREASES THAN A REASONABLE MARKET OBSERVER MIGHT
EXPECT. THEREFORE, WE BEGAN TO BUY AGGRESSIVELY, EXTENDING THE AVERAGE MATURITY
OF THE PORTFOLIO. AS HINTS OF AN ECONOMIC SLOWDOWN SURFACED IN THE SECOND
QUARTER, RATES QUICKLY REVERSED COURSE AND DROPPED TO LEVELS REFLECTING THE
MARKET'S PERCEPTION OF A FED THAT WAS NEARING THE END OF A TIGHTENING CYCLE.
STILL, WE HAVE MAINTAINED ENOUGH LIQUIDITY IN ORDER TO INVEST IN HIGHER YIELDING
SECURITIES SHOULD RATES RISE AGAIN.
OUTLOOK
THERE ARE MANY UNCERTAINTIES FACING THE ECONOMY. THE COMING MONTHS WILL PROVIDE
SOME CLUES AS TO WHETHER NON-INFLATIONARY ECONOMIC GROWTH CAN BE SUSTAINED.
WHILE THE POTENTIAL FOR FURTHER FED RATE INCREASES EXISTS, WE WILL CONTINUE TO
MONITOR KEY ECONOMIC INDICATORS FOR SIGNS THAT THE RECENT DECELERATION OF
ECONOMIC ACTIVITY WAS NOT AN ABERRATION, BUT A CONFIRMATION OF A MORE REASONABLE
RATE OF GROWTH.
SINCERELY,
THOMAS A. DAILEY
CALVERT ASSET MANAGEMENT COMPANY
JULY 28, 2000
CALVERT SOCIAL MONEY MARKET PORTFOLIO OF CALVERT VARIABLE SERIES, INC., SHOULD
NOT BE CONFUSED WITH THE CALVERT SOCIAL INVESTMENT FUND MONEY MARKET PORTFOLIO.
PERFORMANCE OF THE TWO FUNDS WILL DIFFER.
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MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
PRINCIPAL
TAXABLE VARIABLE RATE DEMAND NOTES - 75.2% AMOUNT VALUE
ALABAMA STATE IDA:
6.75%, 5/1/10, LOC: REGIONS BANK * $185,000 $185,000
6.75%, 12/1/19, LOC: BANK OF AMERICA * 460,000 460,000
ARKANSAS STATE DFA, 6.70%, 8/1/30, LOC: BANK ONE, NA*
400,000 400,000
ASPEN INSTITUTE, INC., 6.1038%, 12/1/04, LOC: FIRST NATIONAL BANK OF MARYLAND *
300,000 300,000
BARTON HEALTHCARE LLC., 6.70%, 2/15/25, LOC: AMERICAN NATIONAL BANK & TRUST *
685,000 685,000
BETTERS GROUP LP., 6.75%, 2/1/12, LOC: CENTURY NATIONAL BANK AND TRUST,
CONFIRMING LOC: MELLON BANK * 410,000 410,000
BEXAR COUNTY, 6.65%, 2/1/22, LOC: KBC BANK * 555,000 555,000
BOONE COUNTY, KENTUCKY INDUSTRIAL REVENUE, 6.93%, 11/1/08, LOC: BANK OF AMERICA*
400,000 400,000
BOTSFORD GENERAL HOSPITAL, 6.70%, 2/15/27, LOC: MICHIGAN NATIONAL*
500,000 500,000
CALIFORNIA HOUSING FINANCE AUTHORITY:
6.80%, 2/1/23, SERIES D, LOC: FSA * 400,000 400,000
6.80%, 8/1/29, LOC: AMBAC * 545,000 545,000
CALIFORNIA SUNRISE OF MORAGA MFH REVENUE, 6.70%, 7/1/27, LOC: HELLER FINANCIAL *
200,000 200,000
CITY OF AUBURN, ALABAMA IDA REVENUE, 6.45%, 5/1/20, LOC: AMSOUTH BANK *
410,000 410,000
CLARK COUNTY, NEVADA IDA REVENUE, 6.80%, 12/1/38, LOC: AMBAC *
590,000 590,000
COLORADO HEALTH FACILITIES AUTHORITY REVENUE, 6.70%, 4/1/20, LOC: KREDIETBANK *
545,000 545,000
FLORIDA HOUSING FINANCIAL AGENCY, 7.00%, 7/1/23, LOC: HELLER FINANCIAL *
750,000 750,000
HEALTHTRACK SPORTS AND WELLNESS, 6.70%, 2/15/27, LOC: AMERICAN NATIONAL BANK &
TRUST * 210,000 210,000
IPC INDUSTRIES, INC., 6.75%, 10/1/11, LOC: NATIONAL BANK OF CANADA *
280,000 280,000
MERITER HOSPITAL REVENUE, 6.70%, 12/1/16, LOC: FIRSTAR BANK *
600,000 600,000
MONTGOMERY COUNTY, KENTUCKY INDUSTRIAL DEVELOPMENT REVENUE, 6.75%, 8/1/06,
LOC: FLEET BANK * 189,000 189,000
NEVADA HOUSING MFH REVENUE, 6.68%, 4/1/31, LOC: EAST-WEST BANK *
585,000 585,000
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY REVENUE, 6.90%, 11/1/06,
LOC: FIRST UNION BANK * 360,000 360,000
PENSACOLA POB INC., 6.65%, 10/1/15, LOC: AMSOUTH * 700,000 700,000
POST APARTMENT HOMES LP MFH REVENUE, 6.68%, 7/15/29, LOC: FNMA *
600,000 600,000
SAN JOSE FINANCING REVENUE, 6.80%, 12/1/25, LOC: AMBAC *
700,000 700,000
SAULT SAINTE MARIE, MICHIGAN, 7.51%, 6/1/03, LOC: FIRST AMERICA BANK, MI *
150,000 150,000
SHAWNEE, KANSAS REVENUE, 6.82%, 12/1/12, LOC: CHASE MANHATTAN *
650,000 650,000
SOUTH CENT COMMUNICATIONS CORP., 6.70%, 6/1/13, LOC: CITIZENS NATIONAL BANK,
CONFIRMING LOC: SUNTRUST BANK * 355,000 355,000
SOUTHEAST ALABAMA GAS DISTRIBUTION REVENUE, 6.65%, 6/1/25, LOC: AMBAC *
250,000 250,000
ST. JOSEPH COUNTY ECONOMIC DEVELOPMENT REVENUE, 6.85%, 6/1/27, LOC: FHLB -
INDIANAPOLIS * 850,000 850,000
ST. PAUL, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY, 6.70%, 6/1/15,
LOC: CREDIT LOCAL DE FRANCE * 670,000 670,000
ST. PAUL, MINNESOTA PORT IDA, 6.75%, 6/1/11, LOC: US BANK - NATIONAL ASSN. *
705,000 705,000
STOW-GLEN PROPERTIES LLC, 6.75%, 11/1/19, LOC: FIRSTAR BANK *
300,000 300,000
SUFFOLK COUNTY, NEW YORK IDA REVENUE, 6.68%, 12/15/07, LOC: CHASE MANHATTAN *
405,000 405,000
W.L. PETREY WHOLESALE, INC., INDUSTRIAL DEVELOPMENT, 6.75%, 3/1/11,
LOC: SOUTHTRUST BANK, AL * 345,000 345,000
WASHINGTON STATE HOUSING FINANCE AUTHORITY, 6.75%, 7/1/29,
LOC: BANK ONE, NA * 580,000 580,000
WENATCHEE VALLEY, WASHINGTON CLINIC, 6.70%, 11/23/24,
LOC: US BANK - NATIONAL ASSN. * 200,000 200,000
TOTAL TAXABLE VARIABLE RATE DEMAND NOTES (COST $17,019,000) 17,019,000
CORPORATE OBLIGATIONS - 4.4%
BANK OF AMERICA, 7.38%, 5/17/01 500,000 500,000
JOHN DEERE CAPITAL CORP., 7.14%, 6/20/01 500,000 500,000
TOTAL CORPORATE OBLIGATIONS (COST $1,000,000) 1,000,000
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PRINCIPAL
U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES - 8.0% AMOUNT VALUE
FEDERAL FARM CREDIT BANK, 5.57%, 3/23/01 $500,000 $496,771
FHLMC, 5.00%, 8/14/00 500,000 499,196
FHLMC, 6.50%, 1/12/01 300,000 300,000
FHLMC, 6.56%, 2/15/01 520,000 519,695
TOTAL U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES (COST $1,815,662)
1,815,662
TAXABLE MUNICIPAL OBLIGATIONS - 11.2%
CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT AUTHORITY MFH REVENUE, 6.95%, 7/1/29,
LOC: SANWA BANK, CONFIRMING LOC: CALIFORNIA STATE TEACHER'S RETIREMENT SYSTEM *
345,000 345,000
CITY OF CHICAGO GO BOND, 6.72%, 1/1/19, LOC: FGIC * 350,000 350,000
HEALTH INSURANCE PLAN GREATER NY REVENUE, 6.80%, 7/1/16, LOC: MORGAN GUARANTY
TRUST * 400,000 400,000
MARICOPA COUNTY, ARIZONA IDA REVENUE, 6.70%, 2/1/29, LOC: BANQUE NATIONAL DE
PARIS * 690,000 690,000
VIRGINIA STATE HOUSING DEVELOPMENT AUTHORITY, 6.80%, 1/1/47,
GA: VIRGINIA HOUSING DEVELOPMENT AUTHORITY * 735,000 735,000
TOTAL MUNICIPAL OBLIGATIONS (COST $2,520,000) 2,520,000
TOTAL INVESTMENTS (COST $22,354,662) - 98.8% 22,354,662
OTHER ASSETS AND LIABILITIES, NET - 1.2% 277,107
NET ASSETS - 100% $22,631,769
* OPTIONAL TENDER FEATURES GIVE THESE SECURITIES A SHORTER EFFECTIVE MATURITY
DATE.
EXPLANATION OF GUARANTEES: ABBREVIATIONS:
BPA: BOND-PURCHASE AGREEMENT COPS: CERTIFICATES OF PARTICIPATION
GA: GUARANTY AGREEMENT DFA: DEVELOPMENT FINANCIAL AUTHORITY
LOC: LETTER OF CREDIT GO: GENERAL OBLIGATION
MFH: MULTI-FAMILY HOUSING IDA: INDUSTRIAL DEVELOPMENT AUTHORITY
SEE NOTES TO FINANCIAL STATEMENTS.
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MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE - SEE ACCOMPANYING PORTFOLIO $22,354,662
CASH 76,441
INTEREST RECEIVABLE 217,861
OTHER ASSETS 152
TOTAL ASSETS 22,649,116
LIABILITIES
PAYABLE TO CALVERT ASSET MANAGEMENT COMPANY, INC. 7,527
PAYABLE TO CALVERT ADMINISTRATIVE SERVICES COMPANY 2,771
PAYABLE TO CALVERT SHAREHOLDER SERVICES, INC. 3,300
ACCRUED EXPENSES AND OTHER LIABILITIES 3,749
TOTAL LIABILITIES 17,347
NET ASSETS $22,631,769
NET ASSETS CONSIST OF:
PAR VALUE AND PAID-IN CAPITAL APPLICABLE TO 22,636,291 SHARES OF COMMON
STOCK OUTSTANDING; $0.01 PAR VALUE, 2,000,000,000 SHARES AUTHORIZED
$22,631,716
UNDISTRIBUTED NET INVESTMENT INCOME 59
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (6)
NET ASSETS $22,631,769
NET ASSET VALUE PER SHARE $1.00
SEE NOTES TO FINANCIAL STATEMENTS.
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MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
INTEREST INCOME $497,626
TOTAL INVESTMENT INCOME 497,626
EXPENSES:
INVESTMENT ADVISORY FEE 24,184
TRANSFER AGENCY FEES AND EXPENSES 2,509
ADMINISTRATIVE FEES 12,779
ACCOUNTING FEES 5,410
DIRECTORS' FEES AND EXPENSES 5,078
CUSTODIAN FEES 533
REPORTS TO SHAREHOLDERS 444
PROFESSIONAL FEES 2,670
MISCELLANEOUS 265
TOTAL EXPENSES 53,872
FEES PAID INDIRECTLY (4,330)
NET EXPENSES 49,542
NET INVESTMENT INCOME 448,084
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $448,084
SEE NOTES TO FINANCIAL STATEMENTS.
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MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME $448,084 $732,727
NET REALIZED GAIN (LOSS) - (6)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 448,084 732,721
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (448,035) (733,026)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 23,810,295 40,553,397
REINVESTMENT OF DISTRIBUTIONS 446,634 731,494
SHARES REDEEMED (18,012,331) (36,102,457)
TOTAL CAPITAL SHARE TRANSACTIONS 6,244,598 5,182,434
TOTAL INCREASE (DECREASE) IN NET ASSETS 6,244,647 5,182,129
NET ASSETS
BEGINNING OF PERIOD 16,387,122 11,204,993
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $59 AND $10, RESPECTIVELY) $22,631,769 $16,387,122
CAPITAL SHARE ACTIVITY
SHARES SOLD 23,810,295 40,553,397
REINVESTMENT OF DISTRIBUTIONS 446,634 731,494
SHARES REDEEMED (18,012,331) (36,102,457)
TOTAL CAPITAL SHARE ACTIVITY 6,244,598 5,182,434
SEE NOTES TO FINANCIAL STATEMENTS.
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NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: CALVERT SOCIAL MONEY MARKET PORTFOLIO (THE "PORTFOLIO"), A SERIES OF
CALVERT VARIABLE SERIES, INC. (THE "FUND"), IS REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940 AS A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT COMPANY.
THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR SEPARATELY. THE
SHARES OF THE PORTFOLIO ARE SOLD TO AFFILIATED AND UNAFFILIATED INSURANCE
COMPANIES FOR ALLOCATION TO CERTAIN OF THEIR VARIABLE SEPARATE ACCOUNTS.
SECURITY VALUATION: ALL SECURITIES ARE VALUED AT AMORTIZED COST, WHICH
APPROXIMATES MARKET.
REPURCHASE AGREEMENTS: THE PORTFOLIO MAY ENTER INTO REPURCHASE AGREEMENTS WITH
RECOGNIZED FINANCIAL INSTITUTIONS OR REGISTERED BROKER/DEALERS AND, IN ALL
INSTANCES, HOLDS UNDERLYING SECURITIES WITH A VALUE EXCEEDING THE TOTAL
REPURCHASE PRICE, INCLUDING ACCRUED INTEREST. ALTHOUGH RISK IS MITIGATED BY THE
COLLATERAL, THE FUND COULD EXPERIENCE A DELAY IN RECOVERING ITS VALUE AND A
POSSIBLE LOSS OF INCOME OR VALUE IF THE COUNTERPARTY FAILS TO PERFORM IN
ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE
ACCOUNTED FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN
IDENTIFIED COST BASIS. INTEREST INCOME, ACCRETION OF DISCOUNT AND AMORTIZATION
OF PREMIUM ARE RECORDED ON AN ACCRUAL BASIS.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY
THE PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME ARE
ACCRUED DAILY AND PAID MONTHLY. DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS,
IF ANY, ARE PAID AT LEAST ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE
WITH INCOME TAX REGULATIONS WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES; ACCORDINGLY, PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE
PORTFOLIO'S CAPITAL ACCOUNTS TO REFLECT INCOME AND GAINS AVAILABLE FOR
DISTRIBUTION UNDER INCOME TAX REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS
CUSTODIAN BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID
INDIRECTLY BY CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK.
SUCH A DEPOSIT ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS OF THE
PORTFOLIO. FOR ITS SERVICES, THE ADVISOR RECEIVES A MONTHLY FEE BASED ON AN
ANNUAL RATE OF .30%, OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT ADMINISTRATIVE SERVICES COMPANY, INC., AN AFFILIATE OF THE ADVISOR,
PROVIDES ADMINISTRATIVE SERVICES TO THE PORTFOLIO FOR AN ANNUAL FEE, PAYABLE
MONTHLY, OF .20% OF THE AVERAGE DAILY NET ASSETS OF THE PORTFOLIO.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN AFFILIATE OF THE ADVISOR, ACTS
AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIO. FOR ITS SERVICES, CSSI
RECEIVED A FEE OF $982 FOR THE PERIOD ENDED JUNE 30, 2000. NATIONAL FINANCIAL
DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVED A FEE OF $1,500
FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR DIRECTORS NOT
SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE ALLOCATED TO EACH OF
THE PORTFOLIOS SERVED.
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NOTE C - INVESTMENT ACTIVITY
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000, WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX AND FINANCIAL REPORTING PURPOSES.
AS A CASH MANAGEMENT PRACTICE, THE PORTFOLIO MAY SELL OR PURCHASE SHORT-TERM
VARIABLE RATE DEMAND NOTES FROM OTHER PORTFOLIOS MANAGED BY THE ADVISOR. ALL
TRANSACTIONS ARE EXECUTED AT INDEPENDENTLY DERIVED PRICES.
NET REALIZED CAPITAL LOSS CARRYFORWARD FOR FEDERAL INCOME TAX PURPOSES, OF $6 AT
DECEMBER 31, 1999 MAY BE UTILIZED TO OFFSET FUTURE CAPITAL GAINS UNTIL
EXPIRATION IN DECEMBER 2007.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIO HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
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MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .028 .047 .050
TOTAL FROM INVESTMENT OPERATIONS .028 .047 .050
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.028) (.047) (.050)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
- - -
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 2.82% 4.82% 5.14%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 5.56% (A) 4.72% 5.01%
TOTAL EXPENSES .67% (A) .67% .66%
EXPENSES BEFORE OFFSETS .67% (A) .67% .66%
NET EXPENSES .61% (A) .64% .63%
NET ASSETS, ENDING (IN THOUSANDS) $22,632 $16,387 $11,205
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .051 .048 .055
TOTAL FROM INVESTMENT OPERATIONS .051 .048 .055
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.051) (.048) (.055)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
- - -
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 5.20% 4.95% 5.37%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 5.10% 4.82% 5.23%
TOTAL EXPENSES .69% .75% .66%
EXPENSES BEFORE OFFSETS .69% .75% .66%
NET EXPENSES .59% .62% .59%
NET ASSETS, ENDING (IN THOUSANDS) $6,242 $4,378 $5,129
(A) ANNUALIZED
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL SMALL CAP GROWTH PORTFOLIO
MANAGED BY AWAD ASSET MANAGEMENT, INC.
DEAR INVESTOR:
AS WE REVIEW THE YEAR 2000 TO DATE, WE SEE A FIRST QUARTER THAT WAS POSITIVE FOR
THE FINANCIAL MARKETS FOLLOWED BY A SECOND QUARTER BUFFETED BY A VARIETY OF
CROSS CURRENTS - WITH A RESULTING MODERATE DOWNWARD BIAS IN EQUITY PRICES.
PERFORMANCE AND STRATEGY
THE FUND RETURNED 8.59% FOR THE SIX-MONTH PERIOD ENDING JUNE 30, 2000,
SIGNIFICANTLY OUTPERFORMING THE RUSSELL 2000 INDEX TR WHICH RETURNED 3.04%.
THE DEFINING MOMENT OF THE YEAR TO DATE WAS THE MID-MARCH BREAK IN MOMENTUM
STOCKS, ENDING AN EXTENDED PHENOMENON POPULATED BY DAY TRADING, MOMENTUM
INVESTING, AND TREND FOLLOWING. THOSE OF US WHO HAVE BEEN IN THE BUSINESS FOR
MANY YEARS HAVE WATCHED IN DISBELIEF, OUR ONLY COMFORT BEING OUR JUDGMENT THAT
THIS SPECULATIVE PERIOD WILL PASS, LEADING TO A RETURN TO A MORE TRADITIONAL,
RATIONAL INVESTMENT ENVIRONMENT.
IN FACT, WE ARE IN THE PROCESS OF MAKING THE TRANSITION FROM A MOMENTUM MARKET
TO A RATIONAL ENVIRONMENT; FROM A BUY HIGH/SELL HIGHER MARKET TO A BUY LOW/SELL
HIGH MARKET; FROM A BUY GROWTH-AT-ANY-PRICE MARKET TO A
BUY-GROWTH-AT-A-REASONABLE-PRICE MARKET.
WE BELIEVE THAT THE MIGRATION TO A THINKING PERSON'S RELATIVE VALUE MARKET
SHOULD WORK TO THE BENEFIT OF OUR INVESTORS. OUR RESEARCH-ORIENTED PHILOSOPHY
LEADS US TO SEEK OUT COMPANIES WITH GROWING EARNINGS, MARKET DOMINANCE, GOOD
BALANCE SHEETS, AND HIGH INSIDER STOCK OWNERSHIP THAT SELL AT ATTRACTIVE
VALUATIONS. WE HAVE RETURNED TO AN ENVIRONMENT WHERE INVESTORS WATCH STOCKS
RISE TO APPROPRIATE VALUE - A WHOLLY DIFFERENT WORLD FROM THE OLD MOMENTUM DAYS
WHERE OUR STOCK SELECTIONS WERE OFTEN IGNORED BY THE MARKET, RESULTING IN CHEAP
STOCKS THAT REMAIN CHEAP.
OUTLOOK
OUR STRATEGY, THEN, REMAINS INTACT. AND WE WILL MAINTAIN OUR POLICY OF SEEKING
OUT GROWING COMPANIES THAT SELL AT VALUE INVESTOR PRICES. SOME WILL BE OLD
ECONOMY COMPANIES THAT HAVE ADJUSTED TO AND TAKEN ADVANTAGE OF THE NEW ECONOMY;
SOME WILL BE NEW ECONOMY STOCKS WITH CONSERVATIVE BUSINESS MODELS AND UNIQUE
VALUATION MATRICES; SOME WILL BE PLAIN OLD GROWTH-AT-A-REASONABLE-PRICE STOCKS.
THE COMBINATION SHOULD LEAVE THE FUND POSITIONED FOR GOOD RISK-ADJUSTED
APPRECIATION OF VALUES.
THE MONTHS AHEAD SHOULD SEE A STABILIZATION OF INTEREST RATES ACCOMPANIED BY
GROWING CORPORATE PROFITS. THIS COMBINATION, ACCOMPANIED BY A SOLID, DOWN TO
EARTH INVESTMENT ENVIRONMENT, SHOULD FAVOR OUR INVESTORS WITH JUST RETURNS.
SINCERELY,
JAMES D. AWAD
AWAD ASSET MANAGEMENT
JULY 28, 2000
CVS CALVERT SOCIAL
SMALL CAP GROWTH PORTFOLIO
[INSERT LINE GRAPH HERE]
AVERAGE ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
ONE YEAR 27.12%
FIVE YEAR 10.07%
SINCE INCEPTION 9.45%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
FOR COMPARISON PURPOSES, PORTFOLIO AND INDEX PERFORMANCE IS SHOWN FROM THE MONTH
END DATE OF 3.31.95.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
NEW SUBADVISOR ASSUMED MANAGEMENT OF THE PORTFOLIO EFFECTIVE OCTOBER 1997.
CALVERT SOCIAL SMALL CAP GROWTH PORTFOLIO OF CALVERT VARIABLE SERIES, INC.,
SHOULD NOT BE CONFUSED WITH THE NEW VISION SMALL CAP FUND. PERFORMANCE OF THE
TWO FUNDS WILL DIFFER.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 93.7% SHARES VALUE
AGRICULTURAL PRODUCTS - 2.4%
CORN PRODUCTS INTERNATIONAL, INC. 5,800 $153,700
AIR FREIGHT - 1.7%
IRON MOUNTAIN, INC.* 3,000 102,000
BANKS - 3.7%
CAPITAL CROSSING BANK * 10,000 102,500
NORTH FORK BANCORPORATION, INC. 8,000 121,000
223,500
COMMUNICATIONS EQUIPMENT - 11.1%
AMERICAN TOWER CORP., CLASS A * 3,500 145,906
C-CUBE MICROSYSTEMS, INC. * 10,000 196,250
COMMSCOPE, INC.* 3,000 123,000
HARMONIC, INC. * 2,814 69,647
RESEARCH IN MOTION LTD. * 3,000 135,750
670,553
COMPUTER HARDWARE - 3.2%
ANCOR COMMUNICATIONS, INC. * 5,500 196,711
COMPUTER PERIPHERALS - 7.2%
MAXTOR CORP. * 15,000 158,437
PRINTRONIX, INC. * 6,000 78,750
QUANTUM CORP. * 18,000 199,125
436,312
COMPUTER SOFTWARE AND SERVICES - 13.3%
AFFILIATED COMPUTER SERVICES, INC. * 6,000 198,375
AUDIBLE, INC. 20,000 83,125
AVID TECHNOLOGY, INC. * 14,500 174,000
DESCARTES SYSTEMS GROUP INC. * 6,500 199,875
BARRA, INC. * 2,000 99,125
KRONOS, INC.* 2,000 52,000
806,500
DISTRIBUTORS - FOOD & HEALTH - 2.2%
VENTIV HEALTH, INC. * 12,000 133,500
FINANCIAL - DIVERSIFIED - 5.3%
DORAL FINANCIAL CORP. 9,800 112,088
INVESTORS FINANCIAL SERVICES CORP. 5,200 206,375
318,463
ELECTRONICS EQUIPMENT - 6.0%
LTX CORP.* 4,000 139,750
S3 INCORPORATED*. 6,000 88,500
SILICON STORAGE TECHNOLOGY* 1,500 132,469
360,719
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
INSURANCE - LIFE/HEALTH - 4.2%
ANNUITY AND LIFE RE HOLDINGS 7,500 $183,750
PRESIDENTIAL LIFE CORP. 5,000 69,375
253,125
MACHINERY - DIVERSIFIED - 2.2%
KAYDON CORP. 6,300 132,300
MANUFACTURING - SPECIALIZED - 1.3%
ASTEC INDUSTRIES, INC. * 3,100 78,662
PHOTOGRAPHY & IMAGING - 1.1%
ZEBRA TECHNOLOGIES CORP., CLASS A * 1,500 66,469
PUBLISHING - 8.6%
HOUGHTON MIFFLIN CO. 3,650 170,409
PENTON MEDIA, INC. 4,800 168,000
WILEY (JOHN) & SONS, INC., CLASS A 8,100 182,250
520,659
RETAIL - DISCOUNTERS - 1.4%
BRADLEES, INC. * 15,000 84,375
SERVICE COMMERCIAL AND CONSUMERS - 6.5%
NEW HORIZONS WORLDWIDE, INC. * 8,250 191,684
STARTEK, INC. * 1,500 75,562
TELETECH HOLDINGS, INC. * 4,000 124,250
391,496
SERVICE COMPUTER SYSTEM - 3.4%
HEALTH MANAGEMENT SYSTEMS, INC. * 11,000 34,375
INVESTMENT TECHNOLOGY GROUP, INC. * 4,000 170,250
204,625
SERVICES - DATA PROCESSING - 3.2%
NOVA CORP.* 7,000 195,562
SERVICES - EMPLOYMENT - 3.6%
KORN / FERRY INTERNATIONAL * 6,900 218,644
TELECOMMUNICATION - LONG DISTANCE - 2.1%
ALASKA COMMUNICATION SYSTEMS HOLDINGS, INC. * 12,500 129,688
TOTAL EQUITY SECURITIES (COST $5,147,706) 5,677,563
TOTAL INVESTMENTS (COST $5,147,706) - 93.7% 5,677,563
OTHER ASSETS AND LIABILITIES, NET - 6.3% 379,758
NET ASSETS - 100% $6,057,321
* NON INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE - SEE ACCOMPANYING PORTFOLIO $5,677,563
CASH 457,257
RECEIVABLE FOR INVESTMENTS SOLD 59,998
DIVIDENDS RECEIVABLE 1,807
OTHER ASSETS 32
TOTAL ASSETS 6,196,657
LIABILITIES
PAYABLE FOR SECURITIES PURCHASED 131,371
PAYABLE TO CALVERT ASSET MANAGEMENT COMPANY, INC. 3,722
PAYABLE TO CALVERT ADMINISTRATIVE SERVICES COMPANY 1,206
ACCRUED EXPENSES AND OTHER LIABILITIES 3,037
TOTAL LIABILITIES 139,336
NET ASSETS $6,057,321
NET ASSETS CONSIST OF:
PAR VALUE AND PAID-IN CAPITAL APPLICABLE TO 420,411 SHARES OF COMMON
STOCK OUTSTANDING; $0.01 PAR VALUE, 1,000,000,000 SHARES AUTHORIZED $5,216,875
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) (21,890)
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS 332,479
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 529,857
NET ASSETS $6,057,321
NET ASSET VALUE PER SHARE $14.41
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
DIVIDEND INCOME (NET OF FOREIGN TAXES WITHHELD OF $172) $9,496
TOTAL INVESTMENT INCOME 9,496
EXPENSES:
INVESTMENT ADVISORY FEE 19,898
TRANSFER AGENT FEES AND EXPENSES 2,140
ACCOUNTING FEES 4,226
DIRECTORS' FEES AND EXPENSES 190
ADMINISTRATIVE FEES 6,632
CUSTODIAN FEES 5,135
REPORTS TO SHAREHOLDERS 1,091
PROFESSIONAL FEES 2,177
MISCELLANEOUS 78
TOTAL EXPENSES 41,567
FEES PAID INDIRECTLY (10,181)
NET EXPENSES 31,386
NET INVESTMENT INCOME (LOSS) (21,890)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) 723,066
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) (291,982)
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 431,084
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $409,194
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($21,890) ($17,702)
NET REALIZED GAIN (LOSS) 723,066 (130,377)
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) (291,982) 881,401
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 409,194 733,322
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (1,634)
NET REALIZED GAIN ON INVESTMENTS - -
TOTAL DISTRIBUTIONS - (1,634)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 1,823,258 1,394,746
REINVESTMENT OF DISTRIBUTIONS - 1,634
SHARES REDEEMED (624,611) (1,304,404)
TOTAL CAPITAL SHARE TRANSACTIONS 1,198,647 91,976
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,607,841 823,664
NET ASSETS
BEGINNING OF PERIOD 4,449,480 3,625,816
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
OF ($21,890) AND $0, RESPECTIVELY) $6,059,321 $4,449,480
CAPITAL SHARE ACTIVITY
SHARES SOLD 128,890 127,963
REINVESTMENT OF DISTRIBUTIONS - 124
SHARES REDEEMED (43,700) (118,808)
TOTAL CAPITAL SHARE ACTIVITY 85,190 9,279
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: CALVERT SOCIAL SMALL CAP GROWTH PORTFOLIO (THE "PORTFOLIO"), A SERIES
OF CALVERT VARIABLE SERIES, INC. (THE "FUND"), IS REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940 AS A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT
COMPANY. THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR SEPARATELY.
THE SHARES OF THE PORTFOLIO ARE SOLD TO AFFILIATED AND UNAFFILIATED INSURANCE
COMPANIES FOR ALLOCATION TO CERTAIN OF THEIR VARIABLE SEPARATE ACCOUNTS.
SECURITY VALUATION: SECURITIES LISTED OR TRADED ON A NATIONAL SECURITIES
EXCHANGE ARE VALUED AT THE LAST REPORTED SALE PRICE. UNLISTED SECURITIES AND
LISTED SECURITIES FOR WHICH THE LAST SALE PRICE IS NOT AVAILABLE ARE VALUED AT
THE MOST RECENT BID PRICE OR BASED ON A YIELD EQUIVALENT OBTAINED FROM THE
SECURITIES' MARKET MAKER. OTHER SECURITIES AND ASSETS FOR WHICH MARKET
QUOTATIONS ARE NOT AVAILABLE OR DEEMED INAPPROPRIATE ARE VALUED IN GOOD FAITH
UNDER THE DIRECTION OF THE BOARD OF DIRECTORS.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE
ACCOUNTED FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN
IDENTIFIED COST BASIS. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE.
INTEREST INCOME, ACCRETION OF DISCOUNT AND AMORTIZATION OF PREMIUM ARE RECORDED
ON AN ACCRUAL BASIS.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY
THE PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME AND
DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS, IF ANY, ARE PAID AT LEAST
ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE WITH INCOME TAX REGULATIONS
WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ACCORDINGLY,
PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE PORTFOLIO'S CAPITAL ACCOUNTS TO
REFLECT INCOME AND GAINS AVAILABLE FOR DISTRIBUTION UNDER INCOME TAX
REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS
CUSTODIAN BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID
INDIRECTLY BY CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK.
SUCH A DEPOSIT ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS OF THE
PORTFOLIO. FOR ITS SERVICES, THE ADVISOR RECEIVES A MONTHLY FEE BASED ON AN
ANNUAL RATE OF .75%, OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, PROVIDES
ADMINISTRATIVE SERVICES TO THE PORTFOLIO FOR AN ANNUAL FEE, PAYABLE MONTHLY OF
.25% BASED ON THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN AFFILIATE OF THE ADVISOR, ACTS
AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIO. NATIONAL FINANCIAL DATA
SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVES A FEE OF $1,500
FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR DIRECTORS NOT
SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE ALLOCATED TO EACH OF
THE PORTFOLIOS SERVED.
<PAGE>
NOTE C - INVESTMENT ACTIVITY
DURING THE PERIOD PURCHASES AND SALES OF INVESTMENTS, OTHER THAN SHORT-TERM
SECURITIES, WERE $3,394,122 AND $2,090,388, RESPECTIVELY.
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000 WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX AND FINANCIAL REPORTING PURPOSES. NET UNREALIZED APPRECIATION
AGGREGATED $529,857, OF WHICH $1,077,258 RELATED TO APPRECIATED SECURITIES AND
$529,857 RELATED TO DEPRECIATED SECURITIES.
NET REALIZED CAPITAL LOSS CARRYFORWARDS FOR FEDERAL INCOME TAX PURPOSES, OF
$263,528 AND $128,940 AT DECEMBER 31, 1999 MAY BE UTILIZED TO OFFSET FUTURE
CAPITAL GAINS UNTIL EXPIRATION IN DECEMBER 2006 AND 2007, RESPECTIVELY.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIO HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
<PAGE>
SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
NET ASSET VALUE, BEGINNING $13.27 $11.12 $12.02
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (.05) (.05) .02
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.19 2.20 (.77)
TOTAL FROM INVESTMENT OPERATIONS 1.14 2.15 (.75)
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - ** (.01)
NET REALIZED GAINS - - (.14)
TOTAL DISTRIBUTIONS - - (.15)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
1.14 2.15 (.90)
NET ASSET VALUE, ENDING $14.41 $13.27 $11.12
TOTAL RETURN 8.59% 19.38% (6.23%)
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.83%) (A) (.51%) .12%
TOTAL EXPENSES 1.57% (A) 1.58% 1.33%
EXPENSES BEFORE OFFSETS 1.57% (A) 1.58% 1.33%
NET EXPENSES 1.18% (A) 1.15% 1.12%
PORTFOLIO TURNOVER 46% 79% 72%
NET ASSETS, ENDING (IN THOUSANDS) $6,057 $4,449 $3,626
PERIODS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995*
NET ASSET VALUE, BEGINNING $14.65 $10.94 $10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (.12) (.15) .25
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.32) 3.90 .93
TOTAL FROM INVESTMENT OPERATIONS (1.44) 3.75 1.18
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - - (.24)
NET REALIZED GAINS (1.19) (.04) -
TOTAL DISTRIBUTIONS (1.19) (.04) (.24)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(2.63) 3.71 .94
NET ASSET VALUE, ENDING $12.02 $14.65 $10.94
TOTAL RETURN (9.86%) 34.33% 9.65%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (1.19%) (1.60%) .43%(A)
TOTAL EXPENSES 2.10% 2.47% 2.37%(A)
EXPENSES BEFORE OFFSETS 1.92% 2.27% 2.17%(A)
NET EXPENSES 1.61% 1.81% 1.64%(A)
PORTFOLIO TURNOVER 292% 120% 223%
NET ASSETS, ENDING (IN THOUSANDS) $4,146 $3,031 $1,209
(A) ANNUALIZED
* FROM MARCH 1, 1995 INCEPTION.
** DISTRIBUTION WAS LESS THAN .01 PER SHARE.
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL MID CAP GROWTH PORTFOLIO
MANAGED BY BROWN CAPITAL MANAGEMENT, INC.
DEAR INVESTOR:
WE HAVE FOR SOME TIME BELIEVED THAT MID CAP STOCK VALUATIONS HAVE BEEN, ON A
RELATIVE BASIS, MORE ATTRACTIVE THAN LARGE CAP STOCK VALUATIONS. SINCE THE START
OF THE YEAR, INVESTORS APPARENTLY AGREE WITH OUR THESIS. WHEREAS LARGE CAP
STOCKS, MEASURED BY THE S&P 500, HAVE PRODUCED A TOTAL RETURN OF -0.42% FOR THE
FIRST SIX MONTHS OF 2000, MID CAP STOCKS HAVE PERFORMED CONSIDERABLY BETTER IN
RELATIVE TERMS.
PERFORMANCE AND STRATEGY
FOR THE SIX-MONTH PERIOD ENDING JUNE 30, 2000, THE PORTFOLIO PRODUCED A TOTAL
RETURN OF 11.49%, OUTPERFORMING THE S&P MIDCAP 400 INDEX RETURN OF 9.06%.
TO WHAT DO WE ATTRIBUTE THE FUND'S PERFORMANCE RELATIVE TO THE S&P MIDCAP INDEX?
IN THE ABSOLUTE SENSE, INVESTORS BROADENED THEIR OPPORTUNITIES TO INCLUDE MID
CAP COMPANIES PLAYING OFF GROWTH IN THE CONSUMER CYCLICAL, CONSUMER STAPLES, AND
FINANCIAL SECTORS.
INVESTMENT CLIMATE
MOST APPARENT DURING THE FIRST SIX MONTHS OF 2000 WAS THE GRADUAL RETURN OF A
MORE RATIONAL INVESTMENT CLIMATE FOR EQUITIES. FOR A SHORT WHILE IT APPEARED AS
THOUGH THE MARKET WOULD FAVOR COMPANIES WITH A LOT OF HOPE (AND LITTLE TO NO
EARNINGS) AS THEIR STOCK PRICES OUTPACED THOSE COMPANIES WITH BRAND, REPUTATION,
EARNINGS STABILITY, AND EXPERIENCED MANAGEMENT. CERTAINLY MANY PROFESSIONAL
INVESTORS WERE LURED INTO THE DOT-COM ABYSS, ATTRACTED BY THE OVERLY SIMPLISTIC
INVESTMENT STRATEGY KNOWN AS "THE GREATER FOOL THEORY." FOR US AT BROWN CAPITAL
MANAGEMENT, DISCIPLINED INVESTING IN COMPANIES WITH SOUND FUNDAMENTALS AT A
REASONABLE PRICE REMAINED PARAMOUNT TO ACHIEVING ABOVE-AVERAGE RETURNS OVER THE
LONG-TERM. AS THE FIRST HALF OF THE YEAR PROGRESSED, A LINGERING FEAR OF
INFLATION, THE PROSPECT OF A SLOWING ECONOMY, AND FED MONETARY POLICY CAUSED
UNREASONABLY HIGH VALUATION LEVELS TO COLLAPSE.
OUTLOOK
OUR OUTLOOK FOR THE SECOND HALF OF 2000 IS ONE OF CAUTIOUS OPTIMISM. WE SEE FEW
SIGNS TO SUGGEST THAT INFLATIONARY PRESSURE WILL INTENSIFY, CAUSING A PRONOUNCED
UPWARD TREND IN INTEREST RATES. CORPORATE PROFIT GROWTH WILL LIKELY SLOW, THOUGH
NOT TO A LEVEL AT WHICH WE WOULD BECOME OVERLY CONCERNED. EQUITY VALUATIONS ARE
RICH, BUT NOT OVERLY SO, ALLOWING FOR GENERALLY HIGHER P/E RATIOS IN PERIODS OF
LOW INTEREST RATES. ASSUMING A STABLE INTEREST RATE ENVIRONMENT IN THE LATTER
HALF OF THE YEAR, WE EXPECT APPRECIATION IN STOCK PRICES TO BE DRIVEN PRIMARILY
BY EARNINGS GROWTH AND SUSTAINED INVESTOR CONFIDENCE.
CVS CALVERT SOCIAL
MID CAP GROWTH PORTFOLIO1
COMPARISON OF CHANGE IN
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT.2
[INSERT LINE GRAPH HERE]
AVERAGE ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
ONE YEAR 10.07%
FIVE YEAR 18.05%
SINCE INCEPTION (7.16.91) 14.61%
1PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
2FOR COMPARISON PURPOSES, PORTFOLIO AND INDEX PERFORMANCE IS SHOWN FROM THE
MONTH END DATE OF 7.31.91, RATHER THAN THE ACTUAL INCEPTION DATE OF 7.16.91.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
NEW SUBADVISORS ASSUMED MANAGEMENT OF THE PORTFOLIO EFFECTIVE DECEMBER 1994.
<PAGE>
STILL, EXTERNAL ECONOMIC OR POLITICAL FACTORS COULD UPSET THE DELICATE
COMBINATION OF LOW INTEREST RATES AND LOW EQUITY RISK PREMIUMS THAT CURRENTLY
BUTTRESS THE MARKET'S PREMIUM VALUATION. WE CONTINUE TO FOCUS OUR EFFORTS ON
BOTTOM-UP FUNDAMENTAL ANALYSIS AND VALUATION CONSCIOUSNESS, THE HALLMARKS OF
BROWN CAPITAL MANAGEMENT'S GROWTH AT A REASONABLE PRICE ("GARP") INVESTMENT
DISCIPLINE.
SINCERELY,
ED BROWN
BROWN CAPITAL MANAGEMENT
JULY 28, 2000
CALVERT SOCIAL MID CAP GROWTH PORTFOLIO OF CALVERT VARIABLE SERIES, INC., SHOULD
NOT BE CONFUSED WITH THE CALVERT CAPITAL ACCUMULATION FUND. PERFORMANCE OF THE
TWO FUNDS WILL DIFFER.
<PAGE>
MID CAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 96.7% SHARES VALUE
AIR FREIGHT - 0.5%
FRITZ CO.'S INC. * 22,900 $236,156
COMMUNICATIONS EQUIPMENT - 3.2%
ADC TELECOMMUNICATIONS, INC. * 19,100 1,602,012
COMPUTER - SOFTWARE & SERVICES - 11.9%
ADVENT SOFTWARE, INC. * 30,300 1,954,350
AMDOCS, LTD. * 13,200 1,013,100
COMPUWARE CORP. * 92,900 963,837
NETWORK ASSOCIATES, INC. * 20,800 423,800
RATIONAL SOFTWARE CORP.* 9,000 836,438
TRANSACTION SYSTEMS ARCHITECTS, INC. * 40,400 691,850
5,883,375
DISTRIBUTORS - FOOD AND HEALTH - 4.6%
CARDINAL HEALTH INC. 30,500 2,257,000
ELECTRICAL EQUIPMENT - 6.5%
FLEXTRONICS INTERNATIONAL LTD. * 10,300 707,481
SANMINA CORP. * 13,100 1,120,050
SOLECTRON CORP. * 33,700 1,411,188
3,238,719
ELECTRONICS - SEMICONDUCTORS - 5.8%
ALTERA CORP. * 10,900 1,111,119
ATMEL CORP.* 11,300 416,687
CONEXANT SYSTEM, INC. * 2,000 97,250
VITESSE SEMICONDUCTOR CORP.* 7,800 573,788
XILINX INC.* 8,000 660,500
2,859,344
FINANCIAL - DIVERSIFIED - 2.2%
SLM HOLDING CORP. 29,800 1,115,638
HEALTHCARE - DRUGS - GENERAL, OTHER - 3.1%
ALZA CORP.* 26,100 1,543,162
HEALTHCARE - HOSPITAL MANAGEMENT - 1.5%
HEALTH MANAGEMENT ASSOCIATES, INC. * 58,700 766,769
HEALTHCARE - MEDICAL PRODUCT AND SUPPLIES - 4.4%
BIOMET, INC. 31,000 1,191,562
GUIDANT CORP. * 20,444 1,011,978
2,203,540
HEALTHCARE - SPECIAL SERVICES - 2.9%
COVANCE, INC. * 61,900 545,494
OMNICARE, INC. 43,800 396,938
QUINTILES TRANSNATIONAL CORP. * 35,400 500,025
1,442,457
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
HOUSEWARES - 2.5%
NEWELL RUBBERMAID, INC. 47,400 $1,220,550
INSURANCE - LIFE AND HEALTH - 1.9%
AFLAC, INC. 20,300 932,531
INVESTMENT BANKING AND BROKERAGE - 1.9%
LEGG MASON, INC. 19,200 960,000
INVESTMENT MANAGEMENT - 3.8%
FRANKLIN RESOURCES, INC. 30,186 916,900
PRICE (T. ROWE) ASSOCIATES 22,900 973,250
1,890,150
LEISURE TIME - PRODUCTS - 1.8%
HARLEY-DAVIDSON, INC. 22,900 881,650
MANUFACTURING - SPECIALIZED - 2.9%
JABIL CIRCUIT, INC. * 29,100 1,444,088
NATURAL GAS - 0.9%
DYNEGY, INC. 6,200 423,537
OIL AND GAS - DRILLING AND EQUIPMENT - 1.6%
SMITH INTERNATIONAL, INC. * 11,200 815,500
POWER PRODUCERS - INDEPENDENT - 2.3%
AES CORP.* 25,400 1,158,875
RETAIL - BUILDING SUPPLIES - 1.9%
FASTENAL CO. 18,400 931,500
RETAIL - DISCOUNTERS - 6.4%
DOLLAR GENERAL CORP. 45,863 894,328
DOLLAR TREE STORES, INC. * 25,950 1,026,647
KOHL'S CORP. * 22,200 1,234,875
3,155,850
RETAIL - SPECIALTY - 1.5%
STAPLES, INC. * 49,400 759,525
SERVICES - ADVERTISING AND MARKETING - 3.9%
ACXIOM CORP. * 29,300 798,425
CATALINA MARKETING CORP. * 11,100 1,132,200
1,930,625
SERVICES - COMMERCIAL AND CONSUMER - 3.7%
CINTAS CORP. 28,450 1,043,759
KEANE, INC. * 35,500 767,688
1,811,447
SERVICES - DATA PROCESSING - 8.9%
BISYS GROUP, INC. * 15,100 928,650
EQUIFAX, INC. 29,400 771,750
FISERV, INC. * 15,750 681,187
PAYCHEX, INC. 48,075 2,019,150
4,400,737
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - EMPLOYMENT - 2.2%
INTERIM SERVICE'S INC. * 32,700 $580,425
ROBERT HALF INTERNATIONAL, INC. * 18,600 530,100
1,110,525
TELEPHONE - 2.0%
CENTURY TEL, INC. 34,600 994,750
TOTAL EQUITY SECURITIES (COST $39,096,168) 47,970,012
PRINCIPAL
REPURCHASE AGREEMENTS - 2.8% AMOUNT VALUE
STATE STREET BANK, 6.35%, DATED 6/30/00, DUE 7/3/00
(COLLATERAL: $1,443,300, FHLB, 7.00%, 8/28/01) $1,400,000 1,400,000
TOTAL REPURCHASE AGREEMENTS ( COST $1,400,000 ) 1,400,000
TOTAL INVESTMENTS (COST $40,496,168) - 99.5% 49,370,012
OTHER ASSETS AND LIABILITIES, NET - 0.5% 232,169
NET ASSETS - 100% $49,602,181
* NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MID CAP GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE - SEE ACCOMPANYING PORTFOLIO $49,370,012
CASH 275,216
INTEREST AND DIVIDENDS RECEIVABLE 8,614
OTHER ASSETS 387
TOTAL ASSETS 49,654,229
LIABILITIES
PAYABLE TO CALVERT ASSET MANAGEMENT COMPANY, INC. 36,832
PAYABLE TO CALVERT ADMINISTRATIVE SERVICES COMPANY 9,936
ACCRUED EXPENSES AND OTHER LIABILITIES 5,280
TOTAL LIABILITIES 52,048
NET ASSETS $49,602,181
NET ASSETS CONSIST OF:
PAR VALUE AND PAID-IN CAPITAL APPLICABLE TO 1,481,610 SHARES OF COMMON
STOCK OUTSTANDING; $0.01 PAR VALUE, 1,000,000,000 SHARES AUTHORIZED
$36,272,764
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) (158,509)
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS 4,614,082
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 8,873,844
NET ASSETS $49,602,181
NET ASSET VALUE PER SHARE $33.48
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MID CAP GROWTH PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
INTEREST INCOME $402
DIVIDEND INCOME 75,542
TOTAL INVESTMENT INCOME 75,944
EXPENSES:
INVESTMENT ADVISORY FEE 144,968
TRANSFER AGENCY FEES AND EXPENSES 18,370
ACCOUNTING FEES 8,180
DIRECTORS' FEES AND EXPENSES 1,519
ADMINISTRATIVE FEES 55,757
CUSTODIAN FEES 10,003
REPORTS TO SHAREHOLDERS 14,105
PROFESSIONAL FEES 3,469
MISCELLANEOUS 293
TOTAL EXPENSES 256,664
FEES PAID INDIRECTLY (22,211)
NET EXPENSES 234,453
NET INVESTMENT INCOME (LOSS) (158,509)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) 4,100,861
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) 1,003,208
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS 5,104,069
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,945,560
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MID CAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($158,509) ($301,086)
NET REALIZED GAIN (LOSS) 4,100,862 3,421,480
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
1,003,208 (234,549)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,945,560 2,885,845
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET REALIZED GAIN ON INVESTMENTS - (3,398,247)
TOTAL DISTRIBUTIONS - (3,398,247)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 6,526,665 15,126,008
REINVESTMENT OF
DISTRIBUTIONS - 3,398,258
SHARES REDEEMED (5,846,111)(13,573,536)
TOTAL CAPITAL SHARE TRANSACTIONS 680,554 4,950,730
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,626,114 4,438,328
NET ASSETS
BEGINNING OF PERIOD 43,976,067 39,537,739
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
(LOSS) OF ($158,509) AND $0 RESPECTIVELY) $49,602,181 $43,976,067
CAPITAL SHARE ACTIVITY
SHARES SOLD 184,422 503,241
REINVESTMENT OF DISTRIBUTIONS - 113,576
SHARES REDEEMED (167,118) (451,747)
TOTAL CAPITAL SHARE ACTIVITY 17,304 165,070
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: CALVERT SOCIAL MID CAP GROWTH PORTFOLIO (THE "PORTFOLIO"), A SERIES OF
CALVERT VARIABLE SERIES, INC. (THE "FUND"), IS REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940 AS A NON-DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT
COMPANY. THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR SEPARATELY.
THE SHARES OF THE PORTFOLIO ARE SOLD TO AFFILIATED AND UNAFFILIATED INSURANCE
COMPANIES FOR ALLOCATION TO CERTAIN OF THEIR VARIABLE SEPARATE ACCOUNTS.
SECURITY VALUATION: SECURITIES LISTED OR TRADED ON A NATIONAL SECURITIES
EXCHANGE ARE VALUED AT THE LAST REPORTED SALE PRICE. UNLISTED SECURITIES AND
LISTED SECURITIES FOR WHICH THE LAST SALE PRICE IS NOT AVAILABLE ARE VALUED AT
THE MOST RECENT BID PRICE. OTHER SECURITIES AND ASSETS FOR WHICH MARKET
QUOTATIONS ARE NOT AVAILABLE OR DEEMED INAPPROPRIATE ARE VALUED IN GOOD FAITH
UNDER THE DIRECTION OF THE BOARD OF DIRECTORS.
REPURCHASE AGREEMENTS: THE PORTFOLIO MAY ENTER INTO REPURCHASE AGREEMENTS WITH
RECOGNIZED FINANCIAL INSTITUTIONS OR REGISTERED BROKER/DEALERS AND, IN ALL
INSTANCES, HOLDS UNDERLYING SECURITIES WITH A VALUE EXCEEDING THE TOTAL
REPURCHASE PRICE, INCLUDING ACCRUED INTEREST. ALTHOUGH RISK IS MITIGATED BY THE
COLLATERAL, THE FUND COULD EXPERIENCE A DELAY IN RECOVERING ITS VALUE AND A
POSSIBLE LOSS OF INCOME OR VALUE IF THE COUNTERPARTY FAILS TO PERFORM IN
ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE
ACCOUNTED FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN
IDENTIFIED COST BASIS. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE.
INTEREST INCOME, ACCRETION OF DISCOUNT AND AMORTIZATION OF PREMIUM ARE RECORDED
ON AN ACCRUAL BASIS.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY
THE PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME AND
DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS, IF ANY, ARE PAID AT LEAST
ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE WITH INCOME TAX REGULATIONS
WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ACCORDINGLY,
PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE PORTFOLIO'S CAPITAL ACCOUNTS TO
REFLECT INCOME AND GAINS AVAILABLE FOR DISTRIBUTION UNDER INCOME TAX
REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS
CUSTODIAN BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID
INDIRECTLY BY CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK.
SUCH A DEPOSIT ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS OF THE
PORTFOLIO. FOR ITS SERVICES, THE ADVISOR RECEIVES A MONTHLY FEE BASED ON AN
ANNUAL RATE OF .65%, OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, PROVIDES
ADMINISTRATIVE SERVICES TO THE PORTFOLIO FOR AN ANNUAL FEE, PAYABLE MONTHLY, OF
.25% BASED ON THE PORTFOLIO'S ANNUAL AVERAGE DAILY NET ASSETS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN AFFILIATE OF THE ADVISOR, ACTS
AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIO. FOR ITS SERVICES, CSSI
RECEIVED A FEE OF $2,700 FOR THE SIX MONTHS ENDED JUNE 30, 2000. NATIONAL
FINANCIAL DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVES A FEE OF $1,500
FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR DIRECTORS NOT
SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE ALLOCATED TO EACH OF
THE PORTFOLIOS SERVED.
<PAGE>
NOTE C - INVESTMENT ACTIVITY
DURING THE PERIOD, PURCHASES AND SALES OF INVESTMENTS, OTHER THAN SHORT-TERM
SECURITIES, WERE $20,070,681 AND $20,131,996, RESPECTIVELY.
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000, WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX AND FINANCIAL REPORTING PURPOSES. NET UNREALIZED APPRECIATION
AGGREGATED $8,873,844, OF WHICH $11,122,999 RELATED TO APPRECIATED SECURITIES
AND $2,249,155 RELATED TO DEPRECIATED SECURITIES.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIO HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
<PAGE>
MID CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
NET ASSET VALUE, BEGINNING $30.03 $30.43 $26.63
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (.11) (.21) (.14)
NET REALIZED AND UNREALIZED GAIN (LOSS) 3.56 2.31 8.00
TOTAL FROM INVESTMENT OPERATIONS 3.45 2.11 7.86
DISTRIBUTIONS FROM
NET REALIZED GAINS - (2.51) (4.06)
TOTAL DISTRIBUTIONS - (2.51) (4.06)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
3.45 (.40) 3.80
NET ASSET VALUE, ENDING $33.48 $30.03 $30.43
TOTAL RETURN 11.49% 6.97% 29.88%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.71%) (A) (.73%) (.60%)
TOTAL EXPENSES 1.15% (A) 1.11% 1.05%
EXPENSES BEFORE OFFSETS 1.15% (A) 1.11% 1.05%
NET EXPENSES 1.05% (A) 1.02% 1.00%
PORTFOLIO TURNOVER 46% 101% 65%
NET ASSETS, ENDING (IN THOUSANDS) $49,602 $43,976 $39,538
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
NET ASSET VALUE, BEGINNING $24.05 $22.42 $16.97
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (.04) (.12) (.15)
NET REALIZED AND UNREALIZED GAIN (LOSS) 5.70 1.79 6.85
TOTAL FROM INVESTMENT OPERATIONS 5.66 1.67 6.70
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - - (.01)
NET REALIZED GAINS (3.08) (.04) (1.24)
TOTAL DISTRIBUTIONS (3.08) (.04) (1.25)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
2.58 1.63 5.45
NET ASSET VALUE, ENDING $26.63 $24.05 $22.42
TOTAL RETURN 23.53% 7.44% 39.46%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.17%) (.60%) (.84%)
TOTAL EXPENSES 1.04% 1.33% 1.66%
EXPENSES BEFORE OFFSETS 1.04% 1.33% 1.56%
NET EXPENSES .96% 1.00% 1.25%
PORTFOLIO TURNOVER 96% 124% 135%
NET ASSETS, ENDING (IN THOUSANDS) $26,117 $19,904 $8,935
(A) ANNUALIZED
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL INTERNATIONAL EQUITY PORTFOLIO
MANAGED BY MURRAY JOHNSTONE INTERNATIONAL, LTD.
DEAR INVESTOR:
MIXED MESSAGES ON GROWTH AND INTEREST RATES IN THE US WERE KEY FEATURES OF THE
FIRST HALF OF THE YEAR. AFTER Y2K, LIQUIDITY WAS TIGHTENED AND INTEREST RATES
WERE RAISED, AND VALUATION PRESSURES BECAME TOO MUCH FOR STOCKS IN THE
TECHNOLOGY, MEDIA AND TELECOMMUNICATIONS (TMT) FIELDS. AFTER A SERIES OF
INCREASES TO THE FED FUNDS RATE, THE NASDAQ BEGAN TO LOSE GROUND. THIS SET THE
TONE FOR THE PERIOD.
RECENTLY, JUNE ECONOMIC DATA INDICATED A MODERATING IN THE PACE OF ECONOMIC
GROWTH, ALLOWING THE FEDERAL RESERVE BOARD (THE FED) TO LEAVE RATES UNCHANGED,
AFTER A SERIES OF INCREASES TO 6.5%. STILL, UNDERLYING GROWTH IN THE US AT 5%
IS RUNNING WELL AHEAD OF THE SO-CALLED LONG-TERM SUSTAINABLE RATE AND, TOGETHER
WITH LOW UNEMPLOYMENT, IS LIKELY TO CAUSE THE FED TO PROCEED CAUTIOUSLY.
ECONOMIC AND MARKET BACKGROUND
TO SOME EXTENT, THIS PERIOD PARALLELS THE SIMILAR PERIOD IN 1999 WHEN GROWTH WAS
TAKING OFF, BUT AT THAT TIME OIL PRICES WERE LOWER AND OTHER INFLATIONARY
PRESSURES WERE VIRTUALLY ABSENT. THE NEED TO SLOW THE ECONOMY THIS YEAR REMAINS
IN EVIDENCE: THE FED WILL NEED TO FOLLOW A CAUTIOUS PATH, MAINTAINING PRESSURE
TO CHECK INFLATION WHILE AVOIDING THE TYPE OF INTEREST RATE SHOCKS THAT COULD
CAUSE A "HARD LANDING" FOR THE ECONOMY. US GROWTH AND INTEREST RATES ARE KEY
FACTORS IN DETERMINING THE COURSE OF INTEREST RATES AND DEMAND IN THE
INTERNATIONAL MARKETS. THE BUOYANT US ECONOMY WAS RESPONSIBLE FOR LIFTING
EUROPE AND THE FAR EAST OUT OF RECESSION DURING 1999. JUST AS LIKELY, A
TURNAROUND IN THE US WILL IMPACT GLOBAL DEMAND.
IN THE UK, THE ECONOMY HAD ALREADY MOVED TOWARDS A SLOWER RATE OF ACTIVITY
THROUGH THE FIRST HALF OF THE YEAR. THIS ALLOWED THE GOVERNMENT TO SHIFT TO AN
EASIER MONETARY STANCE AND LEAVE SHORT-TERM INTEREST RATES UNCHANGED FROM
JANUARY. WITH THE TREND CONFIRMED IN MAY, STERLING FELL BACK VERSUS BOTH THE US
DOLLAR AND THE EURO. THE EURO GAINED FURTHER GROUND WHEN THE EUROPEAN CENTRAL
BANK ANNOUNCED A RISE IN RATES OF 50 BASIS POINTS TO 4.25% ON JUNE 8, ON FEARS
OF INFLATION PRIMARILY DUE TO HIGHER ENERGY PRICES. WITH GROWTH IN EUROPE
PICKING UP, ANALYSTS HAVE INCREASED THEIR FORECASTS FOR GDP FOR 2000 FROM 2.5%
TO APPROXIMATELY 3.5%.
ALTHOUGH THE EXPECTATION OF RECOVERY IN THE JAPANESE ECONOMY WAS THE PRIMARY
DRIVING FORCE IN THE EQUITY MARKET THROUGH 1999, EVIDENCE OF THE FACT HAS BEEN
SLOW TO EMERGE IN 2000. WHILE CORPORATE RESULTS WERE IN LINE WITH EXPECTATIONS,
THE INTERNATIONAL MONETARY FUND URGED THE JAPANESE AUTHORITIES TO CONTINUE THEIR
POLICY OF SUPPLEMENTARY BUDGETS TO STIMULATE GROWTH. IN THE ELECTION IN LATE
JUNE, THE RULING LIBERAL DEMOCRATIC PARTY WAS RETURNED BUT WITH A MINORITY
POSITION IN THE LOWER HOUSE, AND IT NOW LEADS A COALITION GOVERNMENT. THIS
DEVELOPMENT IS EXPECTED TO SLOW THE REFORM PROCESS AND LENGTHEN THE LEAD-TIME TO
BETTER CORPORATE RESULTS. THE RETURN IN THE JAPANESE MARKET WAS -5.3% FOR THE
PERIOD. WITH A MODEST BIAS TOWARDS TELECOMMUNICATIONS AND TECHNOLOGY COMPANIES,
THE PORTFOLIO RETURNED
-9.2% WITHIN THE JAPANESE MARKET.
DURING THE FIRST QUARTER OF THE YEAR, THE EMERGING MARKETS -- BRAZIL AND MEXICO
IN PARTICULAR -- STOOD OUT WITH STRONG RETURNS, BUT OVER THE FOLLOWING THREE
MONTHS THE REGION PROVED TO BE ONE OF THE WEAKEST. ONE FACTOR WAS THE FEAR THAT
THE ELECTION IN MEXICO WOULD USHER IN A POLITICAL CLIMATE OF UNCERTAINTY, AND
THIS TOOK A 10% TOLL ON THE CURRENCY. ANOTHER WAS THAT BRAZIL, CONTINUING ON THE
PATH TO GROWTH AND LOWER INTEREST RATES, WAS SIDELINED DUE TO THE COLLAPSE IN
THE
CVS CALVERT SOCIAL
INTERNATIONAL EQUITY PORTFOLIO
COMPARISON OF CHANGE IN
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT.
[INSERT BAR CHART HERE]
AVERAGE ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
ONE YEAR 16.75%
FIVE YEAR 14.98%
SINCE INCEPTION (6.30.92) 12.62%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
NASDAQ AND NEGATIVE LIQUIDITY FLOWS. FURTHERMORE, THE WEAK RETURNS IN TAIWAN
WERE DIRECTLY ATTRIBUTABLE TO THE COLLAPSE IN TECHNOLOGY STOCK PRICES.
AGAINST THIS BACKGROUND, STOCKMARKETS WERE EXTREMELY VOLATILE. THE MSCI EAFE
INDEX ENDED THE PERIOD DOWN 3.56%. WHILE THERE WAS NO CLEAR PATTERN IN MARKETS
PER SE, SECTORS PLAYED A MORE CENTRAL ROLE IN EVENTS. THE TECHNOLOGY SECTOR
SHOWED WIDE SWINGS IN SENTIMENT. TELECOM GROUPS SUFFERED FOLLOWING THE AUCTION
OF LICENSES FOR THIRD GENERATION NETWORKS IN THE UK (AND THE LICENSES WERE BID
TO PRICES WELL IN EXCESS OF INITIAL ESTIMATES WITH THE HIGHER COSTS EXPECTED TO
UNDERMINE PROFITS OF THE SERVICE PROVIDERS IN THE PERIOD AHEAD). IT WAS FEARED
THAT THE WINDFALL FOR THE UK GOVERNMENT OF OVER 20 BILLION WOULD ENCOURAGE
OTHER GOVERNMENTS TO ENTER THE AUCTION GAME FOR NEW LICENSES, RATCHETING UP
COSTS FOR THE PROVIDERS AT A TIME WHEN COMPETITION WAS ALREADY FORCING DOWN CALL
CHARGES. THIS FEAR WEAKENED TELECOM STOCKS ACROSS THE BOARD. OTHER TECHNOLOGY
COMPANIES THAT HAD TRADED AT SUBSTANTIAL PREMIUMS TO THE MARKET OVER THE LAST 12
MONTHS, ALSO CAME UNDER PRESSURE AS INVESTORS SOUGHT TO BROADEN PORTFOLIO
COVERAGE AND REDUCE THEIR WEIGHTING IN TMT. DEFENSIVE SECTORS SUCH AS
PHARMACEUTICALS WERE FAVORED. AND IN ANTICIPATION OF A PEAK IN INTEREST RATES,
FINANCIAL STOCKS WERE ALSO ONCE MORE IN VOGUE.
PERFORMANCE AND INVESTMENT STRATEGY
DURING THE SIX MONTHS ENDING JUNE 30, THE PORTFOLIO RETURNED -7.68%, TRAILING
ITS BENCHMARK, THE MSCI EAFE INDEX, WHICH RETURNED -3.95%.
AT TIMES OF EXTREME MARKET VOLATILITY IT IS IMPORTANT TO ESTABLISH YOUR
LONG-TERM INVESTMENT POLICY AND REMAIN WITH IT. DURING THE PERIOD, PORTFOLIO
ACTIVITY WAS RELATIVELY LOW. THE MAIN FOCUS WAS TO INCREASE EXPOSURE TO EUROPE,
FOCUSING ON FINLAND, SPAIN AND SWITZERLAND WHERE THE FUNDAMENTALS WERE BEGINNING
TO TURN AROUND. WE WERE CAUTIOUS IN THE UK DUE TO HIGH INTEREST RATES, THE
STRONG POUND, AND THE ADVERSE IMPACT IT WAS EXERTING ON MANUFACTURING AND
EXPORTS. WITH SIGNS THAT INTEREST RATES HAD TURNED WE LOOKED TO INCREASE UK
INVESTMENTS IN THE PORTFOLIO. WE MADE A SMALL REDUCTION IN THE PORTFOLIO'S
EXPOSURE TO JAPAN, A REGION WHERE THE MARKET COULD DRIFT THROUGH THE SUMMER
MONTHS.
THE PORTFOLIO SUFFERED FROM THE SHARP CORRECTION IN THE TECHNOLOGY AND TELECOM
SECTORS, PARTICULARLY IN EUROPE. ON THE OTHER HAND, THE EXPOSURE TO VALUE
STOCKS AND FINANCIALS WAS A PLUS FOR THE PERIOD. SOME ADJUSTMENTS WERE MADE IN
RESPONSE TO DEVELOPMENTS BUT OUR STRATEGY WILL CONTINUE TO SEEK EXPOSURE TO SOME
GROWTH COMPANIES THAT NOW ARE BEGINNING TO OFFER REASONABLE VALUE.
MARKET OUTLOOK
IN THE FIRST HALF OF THE YEAR 2000 THE PRESSURE OF RISING INTEREST RATES CAUSED
STOCKS WITH EXCELLENT PROSPECTS BUT HIGH MULTIPLES TO SEE THEIR SHARE PRICE
TUMBLE. UNDER CONDITIONS OF TIGHTER LIQUIDITY, CLOSER SCRUTINY OF FORECASTS HAS
GIVEN BIRTH TO A FAR MORE CRITICAL APPROACH TO INVESTING. ALTHOUGH ECONOMIC
ACTIVITY CONTINUES TO STRENGTHEN GLOBALLY, WITH SIGNS THAT IT MAY HAVE PEAKED IN
THE UK AND POSSIBLY THE US, SOME PRESSURE MAY BE LIFTED FROM INTEREST RATES IN
THE MONTHS AHEAD. UNDER THIS SCENARIO, MARKETS MAY BE ABLE TO LOOK FORWARD TO A
SOFT LANDING IN THE LATTER HALF OF THE YEAR, WITH EQUITY PRICES BEING DRIVEN BY
EARNINGS RATHER THAN INTEREST RATES. WITH THIS PROSPECT, MARKETS WILL
STABILIZE, MAKING MODEST PROGRESS, AND FAVORING THOSE STOCKS AND SECTORS THAT
HAVE BEEN WEAK OVER THE PAST TWELVE MONTHS.
SINCERELY,
ANDREW PRESTON
MURRAY JOHNSTONE INTERNATIONAL
JULY 28, 2000
CALVERT SOCIAL INTERNATIONAL EQUITY PORTFOLIO OF CALVERT VARIABLE SERIES, INC.,
SHOULD NOT BE CONFUSED WITH THE CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND.
PERFORMANCE OF THE TWO FUNDS WILL DIFFER.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 95.3% SHARES VALUE
ARGENTINA - 1.5%
BANCO FRANCES SA 15,000 $324,375
AUSTRALIA - 1.5%
NATIONAL AUSTRALIA BANK* 11,000 183,528
QANTAS AIRWAYS, LTD. 55,000 111,177
294,705
BRAZIL - 3.2%
TELE NORTE LESTE PARTICIPACOES (ADR) 16,756 395,870
UNIAO DE BANCOS BRASILERIOS (GDR) 10,000 287,500
683,370
DENMARK - 1.6%
NOVO-NORDISK 1,962 333,874
FINLAND - 2.4%
NOKIA OYJ 6,898 351,996
SONERA OYJ 3,514 160,193
512,189
FRANCE - 9.3%
BANQUE NATIONAL DE PARIS 3,151 303,233
CAP GEMINI 2,232 393,149
EQUANT (ADR) 2,532 108,876
FRANCE TELECOM 1,154 161,292
LEGRAND 1,479 331,820
PINAULT PRINTEMPS 1,155 256,593
VIVENDI 4,658 411,125
1,966,088
GERMANY - 6.1%
ALLIANZ 957 343,806
DOUGLAS HOLDINGS 3,590 103,849
DRESDNER BANK 2,339 96,244
EPCOS 1,991 198,615
LINDE 5,850 235,128
MARSCHOLLEK LAUTEN 617 305,187
1,282,829
HONG KONG - 1.2%
HONG KONG LAND HOLDING 55,000 88,000
SWIRE PACIFIC LTD. 30,000 175,871
263,871
IRELAND - 0.7%
ALLIED IRISH BANKS 16,685 149,416
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ITALY - 6.6%
BANCA POPOLARE DI MILANO 27,718 $199,791
RAS 21,711 238,366
TELECOM ITALIA MOBILE 51,707 528,202
TELECOM ITALIA SPA 62,749 416,350
1,382,709
JAPAN - 25.8%
AMADA CO. LTD. 25,000 212,054
FUJI MACHINE MANUFACTURING 5,200 272,975
FUJI PHOTO FILM 9,000 368,126
FUJITSU 12,000 415,061
KYOCERA CORP. 2,300 389,963
MATSUSHITA COMMUNICATIONS 2,000 233,354
NSK LIMITED 27,000 236,652
NTT MOBILE COMMUNICATIONS 10 270,487
OMRON CORP. 12,000 325,715
ORIX CORP. * 2,200 324,490
SECOM CO. 4,000 292,163
SHARP CORP. 17,000 300,410
SONY CORP. 2,600 242,590
SUMITOMO BANK 24,000 294,048
TAKEFUJI CORP. * 2,400 289,751
TDK CORP. 2,000 287,263
WEST JAPAN RAILWAY CO. 82 332,312
YAMANOUCHI PHARMACEUTICAL 6,000 327,412
5,414,826
MEXICO - 2.9%
GRUPO INDUSTRIAL DURANGO (ADR) * 11,000 104,500
TELEFONOS DE MEXICO SA (ADR) 9,000 514,125
618,625
NETHERLANDS - 7.4%
AEGON NV * 2,864 101,906
ELSEVIER 38,995 472,430
FORTIS 8,742 254,386
PHILIPS ELECTRONICS 3,932 185,442
V.N.U 10,550 544,900
1,559,064
NEW ZEALAND - 1.2%
TELECOM CORP. OF NEW ZEALAND 70,000 244,636
NORWAY - 3.0%
TOMRA SYSTEMS ASA 23,526 623,759
SINGAPORE - 0.8%
CITY DEVELOPMENTS 42,000 162,942
SPAIN - 3.6%
BILBAO-VIZCAYA INTERNATIONAL 23,025 344,018
GAS NATURAL SDG * 10,138 181,961
SUPERDIPLO * 2,905 44,790
TELEFONICA 8,807 189,181
759,950
SWEDEN - 2.8%
ERICSSON (LM) SERIES B 12,684 250,948
SKF SERIES B 19,727 329,902
580,850
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SWITZERLAND - 2.4%
ZURICH ALLIED 1,038 $512,860
TAIWAN - 0.9%
TAIWAN SEMICONDUCTOR (ADR) 4,710 182,512
UNITED KINGDOM - 10.4%
ABBEY NATIONAL 7,400 88,456
AUTONOMY CORP. PLC 1,300 157,300
BARCLAYS 12,500 310,753
BEAZER GROUP 8,584 15,911
BELLWAY 3,760 15,930
BRITISH TELECOM 7,700 99,498
CADBURY SCHWEPPES 22,000 144,471
CGNU PLC 12,480 207,718
FIRSTGROUP PLC 6,250 22,318
JOHNSON MATTHEY 12,000 168,862
KINGFISHER 3,335 30,353
MAYFLOWER CORP. 21,600 46,737
PEARSON 10,900 346,348
SMITHKLINE BEECHAM 19,000 248,678
VODAFONE AIRTOUCH 69,600 281,182
2,184,515
TOTAL EQUITY SECURITIES (COST $16,974,234) 20,037,965
TOTAL INVESTMENTS (COST $16,974,234) - 95.3% 20,037,965
OTHER ASSETS AND LIABILITIES, NET - 4.7% 982,496
NET ASSETS - 100% $21,020,461
* NON-INCOME PRODUCING.
ABBREVIATIONS:
ADR: AMERICAN DEPOSITORY RECEIPTS
GDR: GLOBAL DEPOSITORY RECEIPTS
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE - SEE ACCOMPANYING PORTFOLIO $20,037,965
CASH 994,547
INTEREST AND DIVIDENDS RECEIVABLE 15,051
OTHER ASSETS 14,397
TOTAL ASSETS 21,061,960
LIABILITIES
PAYABLE FOR SECURITIES PURCHASED 10,572
PAYABLE TO CALVERT ASSET MANAGEMENT COMPANY, INC. 18,916
PAYABLE TO CALVERT ADMINISTRATIVE SERVICES COMPANY 4,721
ACCRUED EXPENSES AND OTHER LIABILITIES 7,290
TOTAL LIABILITIES 41,499
NET ASSETS $21,020,461
NET ASSETS CONSIST OF:
PAR VALUE AND PAID-IN CAPITAL APPLICABLE TO 887,268 SHARES OF COMMON
STOCK OUTSTANDING; $0.01 PAR VALUE, 1,000,000,000 SHARES AUTHORIZED
$16,088,815
UNDISTRIBUTED NET INVESTMENT INCOME 41,502
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS 1,826,734
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS AND FOREIGN CURRENCIES
AND ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
3,063,410
NET ASSETS $21,020,461
NET ASSET VALUE PER SHARE $23.69
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
INTEREST INCOME $11,244
DIVIDEND INCOME (NET OF FOREIGN TAXES WITHHELD OF $24,545) 172,766
TOTAL INVESTMENT INCOME 184,010
EXPENSES:
INVESTMENT ADVISORY FEE 78,333
TRANSFER AGENCY FEES AND EXPENSES 4,545
DIRECTORS' FEES AND EXPENSES 728
ADMINISTRATIVE FEES 29,011
ACCOUNTING FEES 9,234
CUSTODIAN FEES 32,021
REPORTS TO SHAREHOLDERS 657
PROFESSIONAL FEES 2,701
MISCELLANEOUS 196
TOTAL EXPENSES 157,426
FEES PAID INDIRECTLY (14,918)
NET EXPENSES 142,508
NET INVESTMENT INCOME (LOSS) 41,502
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENTS 1,595,160
FOREIGN CURRENCY TRANSACTIONS (16,686)
1,578,474
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION):
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS (3,329,649)
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES 399
(3,329,250)
NET REALIZED AND UNREALIZED GAIN (LOSS) (1,750,776)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($1,709,274)
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
PERIOD ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME $41,502 $10,684
NET REALIZED GAIN (LOSS) 1,578,474 1,669,932
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) (3,329,250) 3,755,518
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (1,709,274) 5,436,134
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (11,209)
NET REALIZED GAIN ON INVESTMENTS - (1,552,510)
TOTAL DISTRIBUTIONS - (1,563,719)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 3,274,981 2,860,507
REINVESTMENT OF DISTRIBUTIONS - 1,563,721
SHARES REDEEMED (2,558,198) (3,392,566)
TOTAL CAPITAL SHARE TRANSACTIONS 716,783 1,031,662
TOTAL INCREASE (DECREASE) IN NET ASSETS (992,491) 4,904,077
NET ASSETS
BEGINNING OF PERIOD 22,012,952 17,108,875
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $41,502 AND $0, RESPECTIVELY) $21,020,461 $22,012,952
CAPITAL SHARE ACTIVITY
SHARES SOLD 135,180 127,897
REINVESTMENT OF DISTRIBUTIONS - 61,202
SHARES REDEEMED (105,904) (153,114)
TOTAL CAPITAL SHARE ACTIVITY 29,276 35,985
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: CALVERT SOCIAL INTERNATIONAL EQUITY PORTFOLIO (THE "PORTFOLIO"), A
SERIES OF CALVERT VARIABLE SERIES, INC. (THE "FUND"), IS REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940 AS A DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT
COMPANY. THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR SEPARATELY.
THE SHARES OF THE PORTFOLIO ARE SOLD TO AFFILIATED AND UNAFFILIATED INSURANCE
COMPANIES FOR ALLOCATION TO CERTAIN OF THEIR VARIABLE SEPARATE ACCOUNTS.
SECURITY VALUATION: SECURITIES LISTED OR TRADED ON A NATIONAL SECURITIES
EXCHANGE ARE VALUED AT THE LAST REPORTED SALE PRICE. FOREIGN SECURITY PRICES,
FURNISHED BY QUOTATION SERVICES IN THE SECURITY'S LOCAL CURRENCY, ARE TRANSLATED
USING THE CURRENT US DOLLAR EXCHANGE RATE. UNLISTED SECURITIES AND LISTED
SECURITIES FOR WHICH THE LAST SALE PRICE IS NOT AVAILABLE ARE VALUED AT THE MOST
RECENT BID PRICE OR BASED ON A YIELD EQUIVALENT OBTAINED FROM THE SECURITIES'
MARKET MAKER. OTHER SECURITIES AND ASSETS FOR WHICH MARKET QUOTATIONS ARE NOT
AVAILABLE OR DEEMED INAPPROPRIATE ARE VALUED IN GOOD FAITH UNDER THE DIRECTION
OF THE BOARD OF DIRECTORS.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE
ACCOUNTED FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN
IDENTIFIED COST BASIS. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE OR,
IN THE CASE OF DIVIDENDS ON CERTAIN FOREIGN SECURITIES, AS SOON AS THE PORTFOLIO
IS INFORMED OF THE EX-DIVIDEND DATE. INTEREST INCOME, ACCRETION OF DISCOUNT AND
AMORTIZATION OF PREMIUM ARE RECORDED ON AN ACCRUAL BASIS.
FOREIGN CURRENCY TRANSACTIONS: THE PORTFOLIO'S ACCOUNTING RECORDS ARE
MAINTAINED IN US DOLLARS. FOR VALUATION OF ASSETS AND LIABILITIES ON EACH DATE
OF NET ASSET VALUE DETERMINATION, FOREIGN DENOMINATIONS ARE TRANSLATED INTO US
DOLLARS USING THE CURRENT EXCHANGE RATE. SECURITY TRANSACTIONS, INCOME AND
EXPENSES ARE TRANSLATED AT THE PREVAILING RATE OF EXCHANGE ON THE DATE OF THE
EVENT. THE EFFECT OF CHANGES IN FOREIGN EXCHANGE RATES ON SECURITIES AND FOREIGN
CURRENCIES IS INCLUDED WITH THE NET REALIZED AND UNREALIZED GAIN OR LOSS ON
INVESTMENTS AND FOREIGN CURRENCIES.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY
THE PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME AND
DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS, IF ANY, ARE PAID AT LEAST
ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE WITH INCOME TAX REGULATIONS
WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ACCORDINGLY,
PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE PORTFOLIO'S CAPITAL ACCOUNTS TO
REFLECT INCOME AND GAINS AVAILABLE FOR DISTRIBUTION UNDER INCOME TAX
REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS
CUSTODIAN BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID
INDIRECTLY BY CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK.
SUCH A DEPOSIT ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS OF THE
PORTFOLIO. FOR ITS SERVICES, THE ADVISOR RECEIVES A MONTHLY FEE BASED ON AN
ANNUAL RATE OF .75%, OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, PROVIDES
ADMINISTRATIVE SERVICES TO THE PORTFOLIO FOR AN ANNUAL FEE, PAYABLE MONTHLY, OF
.35% BASED ON THE PORTFOLIO'S ANNUAL AVERAGE DAILY NET ASSETS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN AFFILIATE OF THE ADVISOR, ACTS
AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIO. FOR ITS SERVICES, CSSI
RECEIVED A FEE OF $1,297 FOR THE SIX MONTHS ENDED JUNE 30, 2000. NATIONAL
FINANCIAL DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
<PAGE>
EACH DIRECTOR OF THE FUND WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVES A FEE
OF $1,500 FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR
DIRECTORS NOT SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE
ALLOCATED TO EACH OF THE PORTFOLIOS SERVED.
NOTE C - INVESTMENT ACTIVITY
DURING THE PERIOD, PURCHASES AND SALES OF INVESTMENTS, OTHER THAN SHORT-TERM
SECURITIES, WERE $7,289,395 AND $6,915,798, RESPECTIVELY.
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000, WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX AND FINANCIAL REPORTING PURPOSES. NET UNREALIZED APPRECIATION
AGGREGATED $3,063,677, OF WHICH $4,280,424 RELATED TO APPRECIATED INVESTMENTS
AND $1,216,757 RELATED TO DEPRECIATED INVESTMENTS.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIO HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
NET ASSET VALUE, BEGINNING $25.66 $20.81 $19.10
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .05 .01 .10
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.02) 6.80 3.35
TOTAL FROM INVESTMENT OPERATIONS (1.97) 6.81 3.45
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - (.01) (.07)
NET REALIZED GAINS - (1.95) (1.67)
TOTAL DISTRIBUTIONS - (1.96) (1.74)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(1.97) 4.85 1.71
NET ASSET VALUE, ENDING $23.69 $25.66 $20.81
TOTAL RETURN (7.68%) 32.78% 18.09%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME .40% (A) .06% .49%
TOTAL EXPENSES 1.51% (A) 1.62% 1.80%
EXPENSES BEFORE OFFSETS 1.51% (A) 1.60% 1.65%
NET EXPENSES 1.36% (A) 1.50% 1.56%
PORTFOLIO TURNOVER 35% 59% 92%
NET ASSETS, ENDING (IN THOUSANDS) $21,020 $22,013 $17,109
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
NET ASSET VALUE, BEGINNING $18.74 $17.15 $15.89
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .19 .17 .27
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.28 2.40 1.69
TOTAL FROM INVESTMENT OPERATIONS 2.47 2.57 1.96
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.20) (.14) (.25)
NET REALIZED GAINS (1.91) (.84) (.45)
TOTAL DISTRIBUTIONS (2.11) (.98) (.70)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
.36 1.59 1.26
NET ASSET VALUE, ENDING $19.10 $18.74 $17.15
TOTAL RETURN 13.23% 14.99% 12.35%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME .85% 1.02% 1.48%
TOTAL EXPENSES 1.73% 1.82% 1.90%
EXPENSES BEFORE OFFSETS 1.56% 1.59% 1.51%
NET EXPENSES 1.17% 1.18% 1.12%
PORTFOLIO TURNOVER 35% 85% 90%
NET ASSETS, ENDING (IN THOUSANDS) $14,450 $14,027 $9,831
(A) ANNUALIZED
<PAGE>
CALVERT VARIABLE SERIES, INC.
CALVERT SOCIAL BALANCED PORTFOLIO
DEAR INVESTOR:
RISK AND REWARD. INVESTING IS ALL ABOUT BALANCING RISK AND REWARD. THE TWO ARE
NOT ALWAYS SEEN TOGETHER IN PUBLIC, HOWEVER. SOMETIMES YOU GET REWARD WITHOUT
MUCH RISK, AS IN THE LAST MONTHS OF LAST YEAR. OTHER TIMES, YOU GET A LOT OF
RISK AND NOT MUCH REWARD: AND THAT HAS BEEN THE STORY OF THIS YEAR, THUS FAR.
VOLATILITY HAS RETURNED WITH A VENGEANCE IN THIS NEW YEAR. STOCKS GOT MORE
RISKY AS THE STRENGTH OF THE MARKET CONTINUED TO FOCUS ON TECH STOCKS, CREATING
A "TWO-TIERED" MARKET OF PRICEY "NEW ECONOMY" STOCKS AND CHEAP "OLD ECONOMY"
STOCKS. BONDS BECAME RISKIER AS THEY WERE CAUGHT IN CROSSCURRENTS OF MORE FED
RATE HIKES, SLIGHT INCREASES IN THE RATE OF INFLATION, GROWING BUDGET SURPLUSES,
SHRINKING TREASURY BOND AUCTIONS, AND FASTER BUY-BACK PROGRAMS BY THE
GOVERNMENT. CORPORATES LOST GROUND TO TREASURIES AS SPREADS WIDENED AND
LIQUIDITY DROPPED. SO, OVER THE COURSE OF THE FIRST SIX MONTHS, PRICES FOR
SECURITIES JUMPED AROUND A LOT, BUT DIDN'T END UP GOING MUCH OF ANYWHERE.
IN THIS ROLLER COASTER ENVIRONMENT, THE FUND MANAGED TO POST A GOOD RETURN OF
2.77% FOR THE FIRST HALF OF THE YEAR, COMPARING VERY FAVORABLY WITH THE LIPPER
VARIABLE ANNUITY BALANCED INDEX WHICH RETURNED 0.41%.
OVER THE COURSE OF THE LAST SIX MONTHS, WE HAVE STUCK TO OUR ASSET ALLOCATION
GOAL OF 60% STOCKS AND 40% BONDS. WE ARE NOT MARKET-TIMERS NOR TACTICAL
ALLOCATORS. RATHER, WE THINK THAT THIS ALLOCATION PROVIDES OUR INVESTORS WITH A
FAVORABLE BALANCING OF RISK AND REWARD. OUR STOCK PORTFOLIO IS A LARGE CAP,
GROWTH-ORIENTED PORTFOLIO BUILT ON THE IDEA OF INVESTING IN GROWTH STOCKS
SELLING AT REASONABLE VALUATIONS. IN THE FIXED-INCOME PORTION OF THE PORTFOLIO,
WE INVEST PRIMARILY IN CORPORATE BONDS AND TRADE THEM ACTIVELY TO CAPTURE
REWARDS FROM INEFFICIENCIES THAT POP UP IN THE BOND MARKET FAIRLY REGULARLY.
CALVERT ASSET MANAGEMENT'S PERSPECTIVE ON THE BOND MARKET
THERE WERE TWO SIGNIFICANT EVENTS IN THE FIRST HALF OF 2000 AFFECTING THE FIXED
INCOME MARKET. DUE TO AN OVERHEATING ECONOMY WITH THE HIGHEST INFLATION FIGURES
IN 3 YEARS, THE FED RAISED INTEREST RATES 3 TIMES. THESE ACTIONS BY THEMSELVES
TEND TO RAISE YIELDS OF FIXED INCOME PRODUCT AND FLATTEN THE YIELD CURVE. THE
SECOND EVENT WAS THE TREASURY BUY-BACK PROGRAM ANNOUNCED BY THE TREASURY DUE TO
THE CURRENT BUDGET SURPLUS AND PROJECTED SURPLUSES IN THE FUTURE. THIS POLICY
TENDS TO RAISE BOND PRICES AND LOWER YIELDS FOR LONGER DATED BONDS, SINCE THE
BUY-BACK PROGRAM INVOLVES MAINLY LONGER DATED BONDS.
THIS VOLATILE YIELD CURVE HAS LED TO SIGNIFICANT WIDENING OF YIELDS OF
NON-TREASURIES RELATIVE TO TREASURIES. CERTAIN SEGMENTS OF THE BOND MARKET
(CORPORATES, MORTGAGES, ASSET-BACKED, ETC.) TRADED AT THEIR WIDEST RELATIVE
SPREADS IN HISTORY IN AN ECONOMY THAT WAS OTHERWISE DEEMED STRONG, IF NOT
SPECTACULAR.
CVS CALVERT SOCIAL BALANCED PORTFOLIO
COMPARISON OF CHANGE IN
VALUE OF A HYPOTHETICAL $10,000 INVESTMENT.
[INSERT BAR CHART HERE]
AVERAGE ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
ONE YEAR 9.64%
FIVE YEAR 14.92%
TEN YEAR 12.11%
SINCE INCEPTION (9.02.86) 11.42%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT. PAST
PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
NEW SUBADVISORS ASSUMED MANAGEMENT OF THE PORTFOLIO EFFECTIVE FEBRUARY 1995.
<PAGE>
BECAUSE THE FIXED INCOME PORTION OF THE BALANCED PORTFOLIO TENDS TO BE WEIGHTED
IN CORPORATE BONDS AND OTHER SPREAD PAPER, THE DETERIORATION OF SUCH BOND PRICES
RELATIVE TO TREASURY PRICES LED TO RELATIVELY POOR PERFORMANCE IN THE FIXED
INCOME PORTION OF THE FUND.
NCM CAPITAL'S PERSPECTIVE ON THE STOCK MARKET
LOOKING BACK OVER THE PAST SIX MONTHS, THE MAJOR DRIVERS OF PERFORMANCE WERE
TECHNOLOGY AND HEALTHCARE. WHILE THE TECHNOLOGY SECTOR WAS FAR FROM BEING THE
BEST PERFORMING SECTOR, ITS LARGE WEIGHTING IN THE PORTFOLIO COMBINED WITH OUR
STRONG STOCK SELECTION RESULTED IN SOLID PERFORMANCE. THE SECTOR EXPERIENCED A
STRONG RUN-UP IN THE FIRST QUARTER, ONLY TO SELL OFF STEEPLY IN THE EARLY
SPRING. BY THE END OF JUNE, TECH STOCKS HAD STARTED TO RALLY BACK
HEALTHCARE STOCKS WERE THE STAR PERFORMERS. THE SECTOR, WHICH PERFORMED POORLY
LAST YEAR AND IN THE FIRST THREE MONTHS OF THE YEAR, OUT-PERFORMED THE S&P 500
BY OVER 28% IN THE SECOND QUARTER. THIS IS ANOTHER SECTOR IN WHICH WE HOLD MORE
THAN THE INDEX AND WE RECEIVED AMPLE REWARD FOR THAT DECISION.
THE TURN FROM THE FIRST TO THE SECOND QUARTER SAW A CHANGE IN LEADERSHIP IN
STOCKS. TECH STOCKS GAVE WAY TO OTHER GROWTH STOCKS THAT HAD BEEN ALMOST
FORGOTTEN ABOUT OVER THE LAST SEVERAL MONTHS. THE FEDERAL RESERVE'S RESTRICTIVE
MONETARY POLICY, IN OUR OPINION, HAS BEEN THE MAJOR CATALYST BEHIND THE
LEADERSHIP CHANGE. THE FED'S EFFORT TO COOL ECONOMIC GROWTH HAS FINALLY BEGUN
TO SHOW UP IN ECONOMIC STATISTICS. AFTER RAISING THE FEDERAL FUNDS RATE A SIXTH
SUCCESSIVE TIME IN MAY TO 6.5%, THE FED STOOD PAT AT THE JUNE 28TH MEETING.
WHILE ALAN GREENSPAN CONTINUES TO BE CONCERNED ABOUT EXCESSIVE ECONOMIC GROWTH
AND INFLATION, HE ACKNOWLEDGES THAT RECENT ECONOMIC FIGURES SUGGEST THE ECONOMY
IS SLOWING.
A "SOFT LANDING" SEEMS PLAUSIBLE AS SUGGESTED BY THE SLOWING EMPLOYMENT NUMBERS,
A DECELERATION IN MANUFACTURING, AND A SOFTENING IN RETAIL SALES/CONSUMER
SPENDING. GIVEN OUR EARLIER BELIEF THAT THE FED WOULD ACHIEVE ITS OBJECTIVE OF
SLOWER ECONOMIC GROWTH, WE CHOSE NOT TO FIGHT THE FED AND REPOSITIONED THE
PORTFOLIO INTO LESS ECONOMICALLY SENSITIVE INDUSTRIES SUCH AS HEALTHCARE AND
CONSUMER STAPLES. WHILE OUR DECISION TO LIGHTEN OUR EXPOSURE TO THE TECHNOLOGY
SECTOR PROVED PREMATURE, THE DECISION ULTIMATELY PROVED CORRECT GIVEN ITS POOR
SHOWING IN THE SECOND QUARTER.
OUTLOOK
EVEN AFTER THE SPECTACULAR DECLINE IN TECH STOCKS AND THE ASCENSION OF SOME
"FORGOTTEN" GROWTH STOCKS, WE STILL HAVE A TWO-TIERED MARKET IN STOCKS. STOCKS
SEEM TO BE EITHER CHEAP IN A HISTORICAL CONTEXT, OR EXPENSIVE: THERE DOESN'T
SEEM TO BE MUCH OF A MIDDLE GROUNDSTOCKS DON'T HAVE TO ALL CARRY THE SAME
VALUATION RELATIVE TO PROFITS, SALES, OR SOMETHING ELSE, BUT THE MORE EXTREME
THE DIFFERENCES BECOME STOCK-TO-STOCK, THE MORE WE ARE AT RISK FOR BIG SWINGS IN
PRICES. INVESTORS ARE STARTING TO SEE A LESS RESTRICTIVE FED POLICY DEVELOPING.
THAT WOULD BE FAVORABLE FOR ALL TYPES OF FINANCIAL ASSETS, AS LONG AS THE
ECONOMY COOPERATES. THIS ECONOMY'S ABILITY TO GROW, PROVIDE WORK, AND MAINTAIN
MODERATED PRICE PRESSURES, HAS DEFIED THE PERSPECTIVE OF MOST ECONOMISTS AND
INVESTORS. RIGHT NOW, INVESTORS ARE OPTIMISTIC THAT THIS GOOD ECONOMIC
ENVIRONMENT CAN CONTINUE INTO THE FORESEEABLE FUTURE.
SINCERELY,
JOHN NICHOLS
VICE PRESIDENT OF EQUITIES
CALVERT ASSET MANAGEMENT COMPANY
JULY 28, 2000
CALVERT SOCIAL BALANCED PORTFOLIO OF CALVERT VARIABLE SERIES, INC., SHOULD NOT
BE CONFUSED WITH THE CALVERT SOCIAL INVESTMENT FUND BALANCED PORTFOLIO.
PERFORMANCE OF THE TWO FUNDS WILL DIFFER.
<PAGE>
BALANCED PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 60.0% SHARES VALUE
BANKS - 3.2%
CHASE MANHATTAN CORP. 62,850 $2,895,028
FIFTH THIRD BANCORP, INC. 54,200 3,428,150
FIRSTAR CORP. 156,700 3,300,494
STATE STREET CORP. 19,900 2,110,644
11,734,316
BIOTECHNOLOGY - 0.3%
MEDIMMUNE, INC.* 17,400 1,287,600
BROADCASTING - 0.6%
CLEAR CHANNEL COMMUNICATIONS* 30,400 2,280,000
BUSINESS EQUIPMENT & SERVICES - 1.9%
FIRST DATA CORP. 49,800 2,471,325
OMNICOM GROUP, INC. 51,400 4,577,813
7,049,138
CHEMICALS - SPECIALTY - 1.2%
AVERY DENNISON CORP. 39,000 2,617,875
PRAXAIR, INC. 47,300 1,770,794
4,388,669
COMMUNICATIONS EQUIPMENT - 7.2%
ADC TELECOMMUNICATIONS, INC.* 37,900 3,178,863
CISCO SYSTEMS, INC.* 123,200 7,830,900
LUCENT TECHNOLOGIES, INC. 40,400 2,393,700
NOKIA OYJ (ADR)* 88,800 4,434,450
NORTEL NETWORKS CORP. 90,200 6,156,150
TELLABS, INC.* 33,850 2,316,609
26,310,672
COMPUTERS - MANUFACTURING - 1.0%
INTERNATIONAL BUSINESS MACHINES CORP. 34,400 3,768,950
COMPUTERS - MICROCHIP - 1.9%
SUN MICROSYSTEMS, INC.* 76,800 6,984,000
COMPUTERS - PERIPHERALS - 7.6%
AMERICAN POWER CONVERSION CORP.* 65,200 2,660,975
EMC CORP.* 116,800 8,986,300
MICROSOFT CORP.* 108,280 8,662,400
ORACLE CORP.* 90,400 7,599,250
27,908,925
CONSUMER FINANCE - 0.4%
PROVIDIAN FINANCIAL CORP. 14,300 1,287,000
COSMETICS & TOILETRIES - 1.1%
ESTEE LAUDER CO.'S, INC. 82,300 4,068,706
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONIC COMPONENTS - 3.5%
INTEL CORP. 39,100 $5,227,181
LINEAR TECHNOLOGY CORP. 51,300 3,279,994
SOLECTRON CORP.* 97,800 4,095,375
12,602,550
ELECTRONIC INSTRUMENTS - 0.6%
JDS UNIPHASE CORP.* 17,400 2,085,825
EQUIPMENT - SEMICONDUCTORS - 1.1%
APPLIED MATERIALS, INC.* 35,700 3,235,312
CREE, INC.* 6,200 827,700
4,063,012
FINANCE COMPANIES - 0.4%
FUSION CAPITAL ^ 8,069,222 654,101
PE CORP. 10,800 711,450
1,365,551
FOODS - 0.5%
QUAKER OATS CO. 22,800 1,712,850
HEALTH CARE - DRUGS - 6.5%
AMGEN, INC.* 41,700 2,929,425
CARDINAL HEALTH, INC. 60,550 4,480,700
MERCK & CO., INC. 41,700 3,195,263
WATSON PHARMACEUTICAL, INC.* 29,200 1,569,500
PFIZER, INC. 187,300 8,990,400
SCHERING-PLOUGH CORP. 47,228 2,385,014
23,550,302
HEALTH CARE - GENERAL - 1.7%
JOHNSON & JOHNSON 61,500 6,265,313
HOSPITAL SUPPLY & MANAGEMENT - 0.4%
GUIDANT CORP.* 27,700 1,371,150
HOUSEHOLD - GENERAL PRODUCTS - 0.6%
COLGATE-PALMOLIVE CO. 39,000 2,335,125
INSURANCE - LIFE - 0.9%
AFLAC, INC. 29,700 1,364,344
AXA FINANCIAL, INC. 52,200 1,774,800
3,139,144
INSURANCE - PROPERTY & CASUALITY - 1.7%
AMERICAN INTERNATIONAL GROUP, INC. 53,271 6,259,342
MANUFACTURING - DIVERSIFIED - 1.3%
TYCO INTERNATIONAL LTD. 97,300 4,609,587
NATURAL GAS - 1.0%
EL PASO ENERGY CORP. 72,900 3,713,344
PETROLEUM - DOMESTIC - 1.4%
ANADARKO PETROLEUM CORP. 101,800 5,020,012
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
POWER PRODUCERS - INDEPENDENT - 1.1%
AES CORP.* 44,600 $2,034,875
CALPINE CORP.* 32,000 2,104,000
4,138,875
RAILROADS - 0.5%
KANSAS CITY SOUTHERN INDUSTRIES 22,200 1,968,862
RETAIL - FOOD STORES - 1.9%
CVS CORP. 57,400 2,296,000
KROGER CO.* 203,700 4,494,131
6,790,131
RETAIL - GENERAL MERCHANDISE - 0.4%
DOLLAR GENERAL CORP. 72,625 1,416,187
RETAIL-SPECIALTY STORES - 1.0%
HOME DEPOT, INC. 71,010 3,546,062
SECURITY & COMMERCIAL BROKERS - 2.0%
FEDERAL NATIONAL MORTGAGE ASSOCIATION 41,400 2,160,563
MARSH & MCLENNAN CO.'S 19,100 1,994,756
SCHWAB (CHARLES) CORP. 96,000 3,228,000
7,383,319
TELECOMMUNICATION EQUIPMENT - 0.4%
SCIENTIFIC-ATLANTA, INC. 18,200 1,355,900
TELECOMMUNICATIONS - LONG DISTANCE - 0.3%
NEXTLINK COMMUNICATIONS, INC.* 27,800 1,054,663
TIMESHARING & SOFTWARE - 1.1%
AMERICA ONLINE, INC.* 77,300 4,077,575
UTILITIES - TELEPHONE - 3.3%
ALLTEL CORP. 35,400 2,192,588
SBC COMMUNICATIONS, INC. 105,940 4,581,905
VODAFONE AIRTOUCH PLC (ADR) 39,000 1,616,062
WORLDCOM, INC.* 77,757 3,567,102
11,957,657
TOTAL EQUITY SECURITIES (COST $163,646,783) 218,850,314
PREFERRED TRUST HOLDINGS - 0.6%
FIRST REPUBLIC PREFERRED CAPITAL CORP., 10.50%, 6/1/09 1,500 1,387,500
HIGHWOOD PROPERTIES, INC., 8.625%, 2/12/27 1,500 1,009,620
TOTAL PREFERRED TRUST HOLDINGS (COST $3,059,280) 2,397,120
<PAGE>
PRINCIPAL
CORPORATE OBLIGATIONS - 31.8% AMOUNT VALUE
ABBEY NATIONAL CAPITAL TRUST I, 8.963%, 12/29/49 $3,700,000 $3,674,366
AGL CAPITAL TRUST, 8.17%, 6/1/37 1,000,000 848,750
AMR CORP., 9.82%, 3/7/01 25,000 25,235
ATLANTIC MUTUAL INSURANCE CO., 8.15%, 2/15/28 4,000,000 2,882,560
BANK UNITED CORP., 8.00%, 3/15/09 1,795,000 1,567,968
BLYTH INDUSTRIES, INC., 7.90%, 10/1/09 3,500,000 3,305,610
BOMBARDIER CAPITAL MORTGAGE SECURITIES CORP., 8.29%, 6/15/30
4,000,000 3,869,720
CENTRAL LA ELECTRIC CO., 6.52%, 5/15/09 1,500,000 1,323,810
COLUMBIA UNIVERSITY, 6.83%, 12/15/20 3,000,000 2,825,418
COMPUTER ASSOCIATES INTERNATIONAL, INC., 6.375%, 4/15/05 4,750,000 4,416,075
CONSECO, INC.:
6.80%, 10/15/02 500,000 365,000
9.00%, 6/15/05 9,750,000 6,532,500
8.50%, 10/15/06 2,000,000 1,420,000
COVAD COMMERCIAL GROUP, 12.00%, 2/15/10 1,000,000 840,000
COX ENTERPRISES, INC., 8.00%, 2/15/07 4,000,000 3,970,440
CREDIT SUISSE FIRST BOSTON, 7.90%, 5/1/07 1,000,000 926,599
CREDIT-BASED ASSET SERVICING AND SECURITIES, LTD., 8.20%, 9/25/30
500,000 466,685
CRESCENT REAL ESTATE EQUITIES LP, 7.50%, 9/15/07 1,500,000 1,222,305
DIME CAPITAL TRUST I, 9.33%, 5/6/27 2,000,000 1,819,100
DOLLAR GENERAL CORP., 8.625%, 6/15/10 2,000,000 1,988,144
ERAC USA FINANCIAL CO., 8.25%, 5/1/05 6,000,000 6,046,140
FINOVA CAPITAL CORP., 6.375%, 10/15/00 1,000,000 977,500
FIRST DATA CORP.:
6.75%, 7/15/05 1,000,000 967,120
6.375%, 12/15/07 1,000,000 930,900
FUSION CAPITAL, 10.00%, 1/16/02^ 2,068,894 209,634
GOLDEN STATES HOLDINGS ESCROW CORP.:
7.00%, 8/1/03 2,000,000 1,841,220
7.125%, 8/1/05 2,500,000 2,214,950
GREENPOINT MANUFACTURED HOUSING, 7.59%, 11/15/28 2,500,000 2,507,400
HSB CAPITAL I, 7.19125%, 7/15/27 1,000,000 916,350
IMPERIAL BANK, 8.50%, 4/1/09 3,500,000 3,135,741
INTERPOOL CAPITAL TRUST, 9.875%, 2/15/27 3,250,000 2,412,572
LG&G CAPITAL CORP., 5.75%, 11/1/01 2,500,000 2,413,325
LIBERTY MUTUAL INSURANCE CO., 7.697%, 10/15/2097 4,000,000 2,920,560
MCN INVESTMENT CORP., 6.35%, 4/2/12 1,000,000 964,360
NORDBANKEN, 8.95%, 11/29/49 3,750,000 3,743,224
NORTHERN BORDERS PARTNERS, LP, 8.875%, 6/15/10 3,500,000 3,556,298
RENAISSANCE CAPITAL TRUST CO., 8.54%, 3/1/27 2,000,000 1,599,764
RIGGS CAPITAL TRUST, 8.625%, 12/31/26 3,000,000 2,389,770
ROYAL BANK OF SCOTLAND GROUP PLC, 9.118%, 3/31/49 4,500,000 4,597,961
RUSSELL FRANK CO., 5.625%, 1/15/09 1,200,000 1,056,876
SKANDINAVISKA ENSKILDA BANKEN:
7.50%, 3/29/49 2,000,000 1,773,068
8.125%, 9/6/49 2,000,000 1,924,784
SOVEREIGN BANCORP, INC.:
6.75%, 9/1/00 2,750,000 2,736,250
10.20%, 6/30/05 5,000,000 5,040,500
12.18%, 6/30/20 4,000,000 4,000,000
SWEDBANK SPARBANK SVENGE AB, 9.00%, 3/17/10 3,000,000 2,938,470
TYCO INTERNATIONAL GROUP, 6.375%, 6/15/05 2,500,000 2,350,450
UNITED DOMINION REALTY TRUST, 8.50%, 9/15/24 2,000,000 1,986,938
XEROX CORP., 8.00%, 2/1/27 4,150,000 3,431,137
TOTAL CORPORATE OBLIGATIONS (COST $122,927,512) 115,873,547
<PAGE>
PRINCIPAL
TAXABLE VARIABLE RATE DEMAND NOTES - 4.2% AMOUNT VALUE
MISSISSIPPI BUSINESS FINANCIAL CORP. IDA REVENUE, 6.70%, 6/1/20
LOC: BANK OF AMERICA $1,300,000 $1,300,000
OAKLAND-ALAMEDA COUNTY COLISEUM AUTHORITY LEASE REVENUE, 6.67%, 2/1/11
LOC: FIRST UNION BANK 7,000,000 7,000,000
TEXAS STATE, 6.684%, 12/1/27, TOA: CITIBANK 7,000,000 7,000,000
TOTAL VARIABLE RATE DEMAND NOTES (COST $15,300,000) 15,300,000
U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES - 0.3%
FEDERAL HOME LOAN MORTGAGE CORP., 7.12%, 6/25/28 989,298 974,251
TOTAL U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES (COST $1,025,588) 974,251
TAXABLE MUNICIPAL OBLIGATIONS - 1.2%
MARYLAND STATE ECONOMIC DEVELOPMENT CORP.:
8.00%, 10/1/05 805,000 798,713
8.625%, 10/1/19 750,000 815,543
SAN MATEO, CA REDEVELOPMENT AGENCY, 7.125%, 8/1/08 2,785,000 2,714,400
TOTAL MUNICIPAL OBLIGATIONS (COST $4,340,000) 4,328,656
U.S. TREASURY - 2.0%
U.S. TREASURY NOTES, 6.50%, 2/15/10 7,000,000 7,238,420
TOTAL U.S. TREASURY (COST $7,204,904) 7,238,420
TOTAL INVESTMENTS (COST $317,504,067) - 100.1% 364,962,308
OTHER ASSETS AND LIABILITIES, NET - (0.1)% (391,250)
NET ASSETS - 100% $364,571,058
* NON-INCOME PRODUCING.
^ SEE NOTE B.
ABBREVIATIONS:
ADR: AMERICAN DEPOSITORY RECEIPTS
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
ASSETS
INVESTMENTS IN SECURITIES, AT VALUE - SEE ACCOMPANYING PORTFOLIO $364,962,308
CASH 93,101
RECEIVABLE FOR SECURITIES SOLD 35,152,755
INTEREST AND DIVIDENDS RECEIVABLE 2,733,729
OTHER ASSETS 3,047
TOTAL ASSETS 402,944,940
LIABILITIES
PAYABLE TO CALVERT ASSET MANAGEMENT COMPANY, INC. 166,573
PAYABLE TO CALVERT ADMINISTRATIVE SERVICES COMPANY 81,013
PAYABLE FOR SECURITIES PURCHASED 38,063,826
ACCRUED EXPENSES AND OTHER LIABILITIES 62,470
TOTAL LIABILITIES 38,373,882
NET ASSETS $364,571,058
NET ASSETS CONSIST OF:
PAR VALUE AND PAID-IN CAPITAL APPLICABLE TO 163,659,694 SHARES OF COMMON
STOCK OUTSTANDING; $0.01 PAR VALUE 1,000,000,000 SHARES AUTHORIZED
$297,195,208
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS) 5,763,179
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS 14,157,689
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCIES AND ASSETS AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES 47,454,982
NET ASSETS $364,571,058
NET ASSET VALUE PER SHARE $2.228
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
BALANCED PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
INTEREST INCOME $5,616,672
DIVIDEND INCOME (NET OF FOREIGN TAXES WITHHELD OF $3,492) 901,995
TOTAL INVESTMENT INCOME 6,518,667
EXPENSES:
INVESTMENT ADVISORY FEE 732,830
TRANSFER AGENCY FEES AND EXPENSES 171,291
DIRECTORS' FEES AND EXPENSES 11,848
ADMINISTRATIVE FEES 474,184
ACCOUNTING FEES 30,279
CUSTODIAN FEES 79,062
REPORTS TO SHAREHOLDERS 23,905
PROFESSIONAL FEES 13,564
MISCELLANEOUS 5,009
TOTAL EXPENSES 1,541,972
FEES PAID INDIRECTLY (35,203)
NET EXPENSES 1,506,769
NET INVESTMENT INCOME 5,011,898
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENTS 9,978,475
FOREIGN CURRENCY TRANSACTIONS (2,562)
9,975,913
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION):
INVESTMENTS AND FOREIGN CURRENCIES (5,268,782)
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES (1,592)
(5,270,374)
NET REALIZED AND UNREALIZED GAIN (LOSS) 4,705,539
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $9,717,437
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
BALANCED PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME $5,011,898 $7,583,853
NET REALIZED GAIN (LOSS) 9,975,913 28,495,630
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
(5,270,374) 1,189,841
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 9,717,437 37,269,324
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (7,540,884)
NET REALIZED GAIN ON INVESTMENTS - (25,833,343)
TOTAL DISTRIBUTIONS - (33,374,227)
CAPITAL SHARE TRANSACTIONS:
SHARES SOLD 23,287,746 50,859,381
REINVESTMENT OF DISTRIBUTIONS - 33,374,227
SHARES REDEEMED (17,747,567)(42,769,670)
TOTAL CAPITAL SHARE TRANSACTIONS 5,540,179 41,463,938
TOTAL INCREASE (DECREASE) IN NET ASSETS 15,257,616 45,359,035
NET ASSETS
BEGINNING OF PERIOD 349,313,442 303,954,407
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $5,763,179 AND $751,281, RESPECTIVELY) $364,571,058 $349,313,442
CAPITAL SHARE ACTIVITY
SHARES SOLD 10,862,449 22,922,306
REINVESTMENT OF DISTRIBUTIONS - 15,401,120
SHARES REDEEMED (8,288,497)(19,438,553)
TOTAL CAPITAL SHARE ACTIVITY 2,573,952 18,884,873
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A - SIGNIFICANT ACCOUNTING POLICIES
GENERAL: CALVERT SOCIAL BALANCED PORTFOLIO (THE "PORTFOLIO"), A SERIES OF
CALVERT VARIABLE SERIES, INC. (THE "FUND"), IS REGISTERED UNDER THE INVESTMENT
COMPANY ACT OF 1940 AS A NON-DIVERSIFIED, OPEN-END MANAGEMENT INVESTMENT
COMPANY. THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR SEPARATELY.
THE SHARES OF THE PORTFOLIO ARE SOLD TO AFFILIATED AND UNAFFILIATED INSURANCE
COMPANIES FOR ALLOCATION TO CERTAIN OF THEIR VARIABLE SEPARATE ACCOUNTS.
SECURITY VALUATION: SECURITIES LISTED OR TRADED ON A NATIONAL SECURITIES
EXCHANGE ARE VALUED AT THE LAST REPORTED SALE PRICE. FOREIGN SECURITY PRICES,
FURNISHED BY QUOTATION SERVICES IN THE SECURITY'S LOCAL CURRENCY, ARE TRANSLATED
USING THE CURRENT U.S. DOLLAR EXCHANGE RATE. UNLISTED SECURITIES AND LISTED
SECURITIES FOR WHICH THE LAST SALE PRICE IS NOT AVAILABLE ARE VALUED AT THE MOST
RECENT BID PRICE OR BASED ON A YIELD EQUIVALENT OBTAINED FROM THE SECURITIES'
MARKET MAKER. MUNICIPAL SECURITIES ARE VALUED UTILIZING THE AVERAGE OF BID
PRICES OR AT BID PRICES BASED ON A MATRIX SYSTEM (WHICH CONSIDERS SUCH FACTORS
AS SECURITY PRICES, YIELDS, MATURITIES AND RATINGS) FURNISHED BY DEALERS THROUGH
AN INDEPENDENT PRICING SERVICE. OTHER SECURITIES AND ASSETS FOR WHICH MARKET
QUOTATIONS ARE NOT AVAILABLE OR DEEMED INAPPROPRIATE ARE VALUED IN GOOD FAITH
UNDER THE DIRECTION OF THE BOARD OF DIRECTORS.
IN DETERMINING FAIR VALUE, THE BOARD CONSIDERS ALL RELEVANT QUALITATIVE AND
QUANTITATIVE INFORMATION AVAILABLE. THESE FACTORS ARE SUBJECT TO CHANGE OVER
TIME AND ARE REVIEWED PERIODICALLY. THE VALUES ASSIGNED TO FAIR VALUE
INVESTMENTS ARE BASED ON AVAILABLE INFORMATION AND DO NOT NECESSARILY REPRESENT
AMOUNTS THAT MIGHT ULTIMATELY BE REALIZED, SINCE SUCH AMOUNTS DEPEND ON FUTURE
DEVELOPMENTS INHERENT IN LONG-TERM INVESTMENTS. BECAUSE OF THE INHERENT
UNCERTAINTY OF VALUATION, THOSE ESTIMATED VALUES MAY DIFFER SIGNIFICANTLY FROM
THE VALUES THAT WOULD HAVE BEEN USED HAD A READY MARKET OF THE INVESTMENTS
EXISTED, AND THE DIFFERENCES COULD BE MATERIAL.
AT JUNE 30, 2000, $209,634 OR 0.06% OF NET ASSETS WERE VALUED BY THE BOARD OF
DIRECTORS.
REPURCHASE AGREEMENTS: THE PORTFOLIO MAY ENTER INTO REPURCHASE AGREEMENTS WITH
RECOGNIZED FINANCIAL INSTITUTIONS OR REGISTERED BROKER/DEALERS AND, IN ALL
INSTANCES, HOLDS UNDERLYING SECURITIES WITH A VALUE EXCEEDING THE TOTAL
REPURCHASE PRICE, INCLUDING ACCRUED INTEREST. ALTHOUGH RISK IS MITIGATED BY THE
COLLATERAL, THE FUND COULD EXPERIENCE A DELAY IN RECOVERING ITS VALUE AND A
POSSIBLE LOSS OF INCOME OR VALUE IF THE COUNTERPARTY FAILS TO PERFORM IN
ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE
ACCOUNTED FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN
IDENTIFIED COST BASIS. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE OR,
IN THE CASE OF DIVIDENDS ON CERTAIN FOREIGN SECURITIES, AS SOON AS THE PORTFOLIO
IS INFORMED OF THE EX-DIVIDEND DATE. INTEREST INCOME, ACCRETION OF DISCOUNT AND
AMORTIZATION OF PREMIUM ARE RECORDED ON AN ACCRUAL BASIS.
FOREIGN CURRENCY TRANSACTIONS: THE PORTFOLIO'S ACCOUNTING RECORDS ARE
MAINTAINED IN U.S. DOLLARS. FOR VALUATION OF ASSETS AND LIABILITIES ON EACH DATE
OF NET ASSET VALUE DETERMINATION, FOREIGN DENOMINATIONS ARE CONVERTED INTO U. S.
DOLLARS USING THE CURRENT EXCHANGE RATE. SECURITY TRANSACTIONS, INCOME AND
EXPENSES ARE TRANSLATED AT THE PREVAILING RATE OF EXCHANGE ON THE DATE OF THE
EVENT. THE EFFECT OF CHANGES IN FOREIGN EXCHANGE RATES ON SECURITIES IS INCLUDED
WITH THE NET REALIZED AND UNREALIZED GAIN OR LOSS ON INVESTMENTS.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY
THE PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME AND
DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS, IF ANY, ARE PAID AT LEAST
ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE WITH INCOME TAX REGULATIONS
WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ACCORDINGLY,
PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE PORTFOLIO'S CAPITAL ACCOUNTS TO
REFLECT INCOME AND GAINS AVAILABLE FOR DISTRIBUTION UNDER INCOME TAX
REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS
CUSTODIAN BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID
INDIRECTLY BY CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK.
SUCH A DEPOSIT ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
<PAGE>
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS EARNINGS.
NOTE B - RELATED PARTY TRANSACTIONS
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") IS WHOLLY-OWNED BY
CALVERT GROUP, LTD. ("CALVERT"), WHICH IS INDIRECTLY WHOLLY-OWNED BY AMERITAS
ACACIA MUTUAL HOLDING COMPANY. THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES
AND PAYS THE SALARIES AND FEES OF OFFICERS AND AFFILIATED DIRECTORS OF THE
PORTFOLIO. FOR ITS SERVICES, THE ADVISOR RECEIVES A MONTHLY FEE BASED ON AN
ANNUAL RATE OF .425%, OF THE PORTFOLIO'S AVERAGE DAILY NET ASSETS.
CALVERT ADMINISTRATIVE SERVICES COMPANY, INC., AN AFFILIATE OF THE ADVISOR,
PROVIDES ADMINISTRATIVE SERVICES TO THE PORTFOLIO FOR AN ANNUAL FEE, PAYABLE
MONTHLY, OF .275% OF THE AVERAGE DAILY NET ASSETS OF THE PORTFOLIO.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AN AFFILIATE OF THE ADVISOR, ACTS
AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIO. FOR ITS SERVICES, CSSI
RECEIVED A FEE OF $22,141 FOR THE PERIOD ENDED JUNE 30, 2000. NATIONAL FINANCIAL
DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVES A FEE OF $1,500
FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR DIRECTORS NOT
SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE ALLOCATED TO EACH OF
THE PORTFOLIOS SERVED.
FUSION CAPITAL (FORMERLY UMBONO), WHICH IS AN AFFILIATE BECAUSE THE PORTFOLIO
OWNS OVER 13% OF THE VOTING SECURITIES, WAS PURCHASED AT A COST OF $2,622,705
FOR 10,206,500 SHARES.
NOTE C - INVESTMENT ACTIVITY
DURING THE PERIOD, PURCHASES AND SALES OF INVESTMENTS, OTHER THAN SHORT-TERM
SECURITIES, WERE $1,660,375,029 AND $1,657,672,084, RESPECTIVELY. U.S.
GOVERNMENT SECURITY PURCHASES WERE $1,452,502,534 AND SALES WERE $1,450,093,187.
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000 , WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX PURPOSES AND FINANCIAL REPORTING PURPOSES. NET UNREALIZED
APPRECIATION AGGREGATED $47,456,733, OF WHICH $61,941,940 RELATED TO APPRECIATED
SECURITIES AND $14,485,207 RELATED TO DEPRECIATED SECURITIES.
AS A CASH MANAGEMENT PRACTICE PRIMARILY, THE PORTFOLIO MAY SELL OR PURCHASE
SECURITIES FROM OTHER PORTFOLIOS MANAGED BY THE ADVISOR. FOR THE PERIOD ENDED
JUNE 30, 2000, THE PORTFOLIO EFFECTED TRANSACTIONS WITH OTHER CALVERT
PORTFOLIOS, WHICH RESULTED IN NET REALIZED GAINS ON SALES OF SECURITIES OF
$84,299. THESE PURCHASES AND SALES TRANSACTIONS, EXECUTED AT INDEPENDENTLY
DERIVED PRICES PURSUANT TO RULE 17A-7 UNDER THE INVESTMENT COMPANY ACT OF 1940,
WERE $170,998,700 AND $149,451,425, RESPECTIVELY.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR THE
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIO HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
<PAGE>
BALANCED PORTFOLIO
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31, DECEMBER 31,
2000 1999 1998
NET ASSET VALUE, BEGINNING $2.168 $2.138 $1.982
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .030 .051 .052
NET REALIZED AND UNREALIZED GAIN (LOSS) .030 .208 .271
TOTAL FROM INVESTMENT OPERATIONS .060 .259 .323
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - (.052) (0.52)
NET REALIZED GAINS - (.177) (.115)
TOTAL DISTRIBUTIONS - (.229) (.167)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
.060 .030 .156
NET ASSET VALUE, ENDING $2.228 $2.168 $2.138
TOTAL RETURN 2.77% 12.12% 16.33%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.91% (A) 2.35% 2.66%
TOTAL EXPENSES .89% (A) .89% .87%
EXPENSES BEFORE OFFSETS .89% (A) .89% .87%
NET EXPENSES .87% (A) .86% .85%
PORTFOLIO TURNOVER 490% 619% 539%
NET ASSETS, ENDING (IN THOUSANDS) $364,571 $349,313 $303,954
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
NET ASSET VALUE, BEGINNING $1.774 $1.703 $1.440
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .047 .040 .050
NET REALIZED AND UNREALIZED GAIN (LOSS) .309 .175 .380
TOTAL FROM INVESTMENT OPERATIONS .356 .215 .430
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.047) (.042) (.040)
NET REALIZED GAINS (.101) (.102) (.127)
TOTAL DISTRIBUTIONS (.148) (.144) (.167)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
.208 .071 .263
NET ASSET VALUE, ENDING $1.982 $1.774 $1.703
TOTAL RETURN 20.08% 12.62% 29.87%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.66% 2.71% 3.08%
TOTAL EXPENSES .80% .81% .83%
EXPENSES BEFORE OFFSETS .80% .81% .83%
NET EXPENSES .77% .78% .81%
PORTFOLIO TURNOVER 905% 99% 163%
NET ASSETS, ENDING (IN THOUSANDS) $227,834 $161,473 $110,237
(A) ANNUALIZED
<PAGE>
AMERITAS
PORTFOLIOS
FUNDS WITHIN CALVERT VARIABLE SERIES, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2000
<PAGE>
AMERITAS PORTFOLIOS
FUNDS WITHIN CALVERT VARIABLE SERIES, INC.
SEMI-ANNUAL REPORT, JUNE 30, 2000
TABLE OF CONTENTS
1 PORTFOLIO MANAGER REMARKS
15 PORTFOLIOS OF INVESTMENTS
66 NOTES TO PORTFOLIOS OF INVESTMENTS
67 STATEMENTS OF ASSETS AND LIABILITIES
70 STATEMENTS OF OPERATIONS
74 STATEMENTS OF CHANGES IN NET ASSETS
83 NOTES TO FINANCIAL STATEMENTS
88 FINANCIAL HIGHLIGHTS
<PAGE>
AMERITAS GROWTH PORTFOLIO
AMERITAS SMALL CAPITALIZATION PORTFOLIO
AMERITAS MIDCAP GROWTH PORTFOLIO
AMERITAS INCOME & GROWTH PORTFOLIO
MANAGED BY FRED ALGER MANAGEMENT, INC.
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
AMERITAS GROWTH
THE PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY FOCUSING ON COMPANIES THAT
GENERALLY HAVE BROAD PRODUCT LINES, MARKETS, FINANCIAL RESOURCES AND DEPTH OF
MANAGEMENT. UNDER NORMAL CIRCUMSTANCES, THE PORTFOLIO INVESTS PRIMARILY IN THE
EQUITY SECURITIES, SUCH AS COMMON OR PREFERRED STOCKS, OF LARGE COMPANIES LISTED
ON U.S. EXCHANGES OR IN THE U.S. OVER-THE-COUNTER MARKET. THE PORTFOLIO
CONSIDERS A LARGE COMPANY TO HAVE A MARKET CAPITALIZATION OF $1 BILLION OR
GREATER.
AMERITAS SMALL CAPITALIZATION
THE PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION BY FOCUSING ON SMALL,
FAST-GROWING COMPANIES THAT OFFER INNOVATIVE PRODUCTS, SERVICES OR TECHNOLOGIES
TO A RAPIDLY EXPANDING MARKETPLACE. UNDER NORMAL CIRCUMSTANCES, THE PORTFOLIO
INVESTS PRIMARILY IN THE EQUITY SECURITIES, SUCH AS COMMON OR PREFERRED STOCKS,
OF SMALL CAPITALIZATION COMPANIES LISTED ON U.S. EXCHANGES OR IN THE U.S.
OVER-THE-COUNTER MARKET. THE PORTFOLIO CONSIDERS A SMALL CAPITALIZATION COMPANY
TO HAVE A MARKET CAPITALIZATION WITHIN THE RANGE OF COMPANIES IN THE RUSSELL
2000 GROWTH INDEX OR THE S&P SMALLCAP 600 INDEX.
AMERITAS MIDCAP GROWTH
THE PORTFOLIO SEEKS LONG-TERM CAPITAL APPRECIATION INVESTING IN MIDSIZE
COMPANIES WITH PROMISING GROWTH POTENTIAL. UNDER NORMAL CIRCUMSTANCES, THE
PORTFOLIO INVESTS PRIMARILY IN THE EQUITY SECURITIES, SUCH AS COMMON OR
PREFERRED STOCKS, OF COMPANIES LISTED ON U.S. EXCHANGES OR IN THE U.S.
OVER-THE-COUNTER MARKET AND HAVING A MARKET CAPITALIZATION WITHIN THE RANGE OF
COMPANIES IN THE S&P SMALLCAP 400 INDEX.
AMERITAS INCOME & GROWTH
THE PORTFOLIO PRIMARILY SEEKS TO PROVIDE A HIGH LEVEL OF DIVIDEND INCOME. ITS
SECONDARY GOAL IS TO PROVIDE CAPITAL APPRECIATION. UNDER NORMAL CIRCUMSTANCES,
THE PORTFOLIO INVESTS IN DIVIDEND PAYING EQUITY SECURITIES, SUCH AS COMMON OR
PREFERRED STOCKS, PREFERABLY THOSE WHICH THE PORTFOLIO MANAGER BELIEVES ALSO
OFFER OPPORTUNITIES FOR CAPITAL APPRECIATION.
<PAGE>
MARKETS & INVESTMENT CLIMATE
THE STOCK MARKET EXPERIENCED AN EXTREMELY VOLATILE START TO THE NEW MILLENNIUM.
FOLLOWING AN ENORMOUSLY STRONG FOURTH QUARTER OF 1999 AND AN UNEVENTFUL Y2K, THE
MARKET SEEMED POISED TO CONTINUE ITS RALLY DURING THE TRADITIONALLY BULLISH
MONTH OF JANUARY. HOWEVER, STOCKS STRUGGLED DURING JANUARY, AS PROFIT-TAKING
AND INTEREST RATE FEARS WEIGHED ON MOST EQUITY INDICES. SOARING FUEL PRICES
CONTRIBUTED HEAVILY TO INFLATION FEARS AS OIL NEARED $30 PER BARREL. ALSO,
THIRD AND FOURTH QUARTER GDP NUMBERS REPRESENTED THE STRONGEST TWO-QUARTER GDP
GROWTH IN MORE THAN A DECADE. AGAINST THIS BACKGROUND OF HIGHER COMMODITY
PRICES AND UNRELENTING ECONOMIC EXPANSION, THE FEDERAL RESERVE RAISED BOTH THE
FEDERAL FUNDS RATE AND THE DISCOUNT RATE ONE QUARTER OF A PERCENT ON FEBRUARY
2ND. TWO DAYS BEFORE THE FEDERAL RESERVE MEETING, THE S&P 500 INDEX ENDED
JANUARY WITH A -5.0% RETURN.
FEBRUARY WAS A SLIGHTLY BETTER MONTH FOR EQUITY MARKETS. WHILE THE S&P 500 AND
THE DOW JONES INDUSTRIAL AVERAGE CONTINUED TO FLOUNDER, TECHNOLOGY AND GROWTH
STOCKS REGAINED THE MOMENTUM THEY HAD PREVIOUSLY LOST. THE NASDAQ COMPOSITE AND
RUSSELL 2000 PUSHED STRONGLY HIGHER, LED BY MANY OF THE SAME COMPANIES THAT HAD
DRIVEN THE MARKET TOWARDS THE END OF 1999. BIOTECHNOLOGY STOCKS POSTED
ESPECIALLY STRONG GAINS. THE RE-EMERGENCE OF GROWTH STOCKS, COMBINED WITH THE
CONTINUED STRUGGLES OF MOST VALUE STOCKS, BROUGHT INCREASED PUBLIC ATTENTION TO
THE ONGOING BIFURCATED NATURE OF THE MARKET.
WHILE THE MEDIA WAS SHINING A SPOTLIGHT ON "NEW ECONOMY" STOCKS, MARCH ROLLED
AROUND AND THE MARKET QUICKLY CHANGED ITS PACE. MANY TECHNOLOGY-ORIENTED, NEW
ECONOMY GROWTH STOCKS CORRECTED SEVERELY DURING MARCH, DRIVEN DOWN BY VALUATION
CONCERNS AND SECTOR ROTATIONS. MONEY FLOWED OUT OF TECHNOLOGY STOCKS AND INTO
SO-CALLED "OLD ECONOMY STOCKS," INCLUDING FINANCIALS, PHARMACEUTICALS AND
RETAILERS. MANY OF THE TRADING DAYS DURING MARCH SAW THE DOW MOVING STRONGLY IN
ONE DIRECTION AND THE NASDAQ MOVING DECISIVELY IN THE OTHER, WITH EACH INDEX
TAKING TURNS IN THE LEAD. HOWEVER, A REVERSAL OF FORTUNES WAS CLEARLY THE
GENERAL TREND, WITH THE DOW ADVANCING WHILE THE NASDAQ WAS RETREATING. AS MARCH
NEARED ITS CLOSE, THE MARKET CONTINUED TO STRUGGLE WITH THE CONFLICT BETWEEN THE
NEW ECONOMY AND THE OLD ECONOMY. THE FED ALSO BUMPED INTEREST RATES BY ANOTHER
QUARTER POINT ON MARCH 21ST, ADDING TO INTEREST RATE FEARS.
ALARMINGLY, ON TUESDAY, APRIL 4TH, THE NASDAQ FELL IN EXCESS OF 500 POINTS TO AN
INTRA-DAY LOW OF 3,649. DESPITE STAGING A STRONG INTRA-DAY RECOVERY, THE NASDAQ
CONTINUED TO PLUMMET THROUGHOUT THE FIRST PART OF APRIL, BOTTOMING ON APRIL 17TH
TO A LOW OF 3,227. THIS REPRESENTED A DROP OF MORE THAN 37% FROM HIGH TO LOW,
WHICH CERTAINLY QUALIFIES AS A FULL-FLEDGED BEAR MARKET. EQUITY MARKETS
CONTINUED TO BE EXTRAORDINARILY VOLATILE THROUGHOUT THE REMAINDER OF APRIL, WITH
MOST INDICES FLUCTUATING WILDLY AMIDST AN OVERALL MINOR RECOVERY. HOWEVER, THE
MARKET'S RECOVERY WAS EXTREMELY SHORT-LIVED. THE NASDAQ'S PLUMMET BEGAN ANEW
DURING MAY, BEFORE FINALLY BOTTOMING AT 3043 ON MAY 24TH. THIS BROUGHT THE TOTAL
DROP IN THE TECHNOLOGY HEAVY INDEX TO 41%. WHILE THE DOW AND OTHER
VALUE-ORIENTED INDICES DID FARE SOMEWHAT BETTER THAN THE NASDAQ OVER THIS TIME
SPAN, LOSSES WERE WIDESPREAD ACROSS THE BOARD.
MOST EQUITY MARKET INDICES SUCCEEDED IN RALLYING DURING LATE MAY AND JUNE. FROM
ITS MAY 24TH LOW TO ITS JUNE 22ND HIGH, THE NASDAQ RETURNED IN EXCESS OF 33%,
BEFORE RETREATING SOMEWHAT BY QUARTER-END. THIS RECOVERY WAS BROUGHT ON
PRIMARILY BY A SERIES OF ECONOMIC REPORTS THAT INDICATED A SLOWING OF THE
ECONOMY. PERHAPS THE MOST SIGNIFICANT REPORT WAS THE MAY EMPLOYMENT REPORT,
WHICH SHOWED AN INCREASE IN THE UNEMPLOYMENT RATE TO 4.1%.
<PAGE>
AFTER THE FED HAD HIKED INTEREST RATES BY 50 BASIS POINTS DURING THEIR MAY
MEETING, THE EMPLOYMENT REPORT EFFECTIVELY SOOTHED CONCERNS ABOUT POTENTIAL
RAMPANT INTEREST RATE INCREASES. BY THE TIME THE FED MET AGAIN IN LATE JUNE,
WIDESPREAD INTEREST RATE AND INFLATION CONCERNS HAD BEEN GREATLY ALLEVIATED. ON
JUNE 28TH, THE FED ANNOUNCED THAT IT WOULD NOT BE RAISING RATES AT ALL, THEREBY
GIVING FURTHER CREDIBILITY TO THE NOTION THAT THE ECONOMY HAS INDEED BEEN
SLOWING.
INVESTMENT STRATEGY
DURING THE FIRST HALF OF THE YEAR, THE MANAGEMENT OF THE PORTFOLIOS REMAINED
UNCHANGED: A RESEARCH INTENSIVE, BOTTOM-UP APPROACH FOCUSING ON RAPIDLY GROWING
STOCKS. ON THE WHOLE, MANAGEMENT'S GROWTH STOCK PHILOSOPHY WAS OF BENEFIT OVER
A PERIOD OF TIME DURING WHICH VALUE TENDED TO UNDERPERFORM GROWTH.
PERFORMANCE
AMERITAS GROWTH
THE PORTFOLIO RETURNED 3.38% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
2.81% RETURN FOR THE LIPPER GROWTH FUND INDEX AND A -0.43% RETURN FOR THE
S&P 500 INDEX.
AMERITAS SMALL CAPITALIZATION
THE PORTFOLIO RETURNED 0.62% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
4.58% RETURN FOR THE LIPPER SMALL CAP FUND INDEX AND A 1.23% RETURN FOR THE
RUSSELL 2000 GROWTH INDEX.
AMERITAS GROWTH PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 19.61%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
SMALL CAPITALIZATION PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 29.90%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
AMERITAS MIDCAP GROWTH
THE PORTFOLIO RETURNED 18.00% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
8.68% RETURN FOR THE LIPPER MID CAP FUND INDEX AND A 8.97% RETURN FOR THE S&P
MIDCAP 400 INDEX.
AMERITAS INCOME & GROWTH
THE PORTFOLIO RETURNED 7.32% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
-0.87% RETURN FOR THE LIPPER GROWTH & INCOME FUND INDEX AND A -0.43% RETURN FOR
THE S&P 500 INDEX.
OUTLOOK
THE LAST TIME SERIOUS TIGHTENING OCCURRED WAS 1994 WHEN THE FEDERAL RESERVE
DOUBLED THE FEDERAL FUNDS RATE FROM 3% TO 6%, BETWEEN APRIL 1994 AND DECEMBER
1994. A STRONG SELL-OFF ENSUED AND THE HIGHS WERE NOT REVISITED UNTIL EARLY
1995 WHEN THE TIGHTENING ENDED. IT IS OUR SENSE THAT BY THE TIME WE GET TO
AUGUST, THE FED WILL NO LONGER BE INCLINED TO RAISE RATES. OF COURSE, WE WILL
HAVE TO SEE IF THE ECONOMIC NEWS CONTINUES TO SHOW A MODERATING ECONOMY. IF IT
DOES, WE SHOULD HAVE A SHARP RALLY IN BOTH THE BOND AND STOCK MARKETS IN THE
SECOND HALF OF THE YEAR, MUCH AS WE HAD IN EARLY 1995. WE ARE MAINTAINING OUR
EARLIER FORECAST OF 13,000 ON THE DOW BY YEAR-END AND CONTINUE TO BELIEVE THAT
TECHNOLOGY STOCKS AND GROWTH STOCKS WILL HAVE A STRONG SECOND HALF.
REGARDLESS OF MARKET CONDITIONS, WE WILL PERSIST IN EMPHASIZING INDIVIDUAL
SECURITY SELECTION THROUGH THOROUGH, INTERNAL RESEARCH CONDUCTED BY TALENTED
ANALYSTS. LOOKING AHEAD, WE WILL CONTINUE TO SEEK OUT AND INVEST IN COMPANIES
THAT WE BELIEVE WILL GROW THEIR EARNINGS RAPIDLY AND CONSISTENTLY.
MIDCAP GROWTH PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 44.07%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
AMERITAS INCOME & GROWTH PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 38.59%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
AMERITAS EMERGING GROWTH PORTFOLIO
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
THE PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING, UNDER NORMAL
MARKET CONDITIONS, AT LEAST 65% OF ITS TOTAL ASSETS IN COMMON STOCKS AND RELATED
SECURITIES, SUCH AS PREFERRED STOCKS, CONVERTIBLE SECURITIES AND DEPOSITARY
RECEIPTS FOR THOSE SECURITIES, OF EMERGING GROWTH COMPANIES.
EMERGING GROWTH COMPANIES ARE COMPANIES WHICH THE SUBADVISOR BELIEVES ARE EITHER
EARLY IN THEIR LIFE CYCLE BUT WHICH HAVE THE POTENTIAL TO BECOME MAJOR
ENTERPRISES, OR ARE MAJOR ENTERPRISES WHOSE RATES OF EARNINGS GROWTH ARE
EXPECTED TO ACCELERATE BECAUSE OF SPECIAL FACTORS, SUCH AS REJUVENATED
MANAGEMENT, NEW PRODUCTS, CHANGES IN CONSUMER DEMAND, OR BASIC CHANGES IN THE
ECONOMIC ENVIRONMENT. THE PORTFOLIO'S INVESTMENTS MAY INCLUDE SECURITIES TRADED
IN THE OVER-THE-COUNTER MARKETS.
MARKETS & INVESTMENT STRATEGY
DESPITE THE EXTREME MARKET VOLATILITY IN THE FIRST HALF OF 2000, WE VIEWED THIS
AS A PERIOD OF OPPORTUNITY. IN OUR OPINION, THE RECENT CORRECTION WAS GOOD FOR
THE MARKET IN GENERAL BECAUSE IT RETURNED STOCKS TO VALUATIONS THAT MADE SENSE.
BUT IN SOME CASES THE MARKET BROUGHT DOWN WHAT WE BELIEVED WERE BOTH HEALTHY AND
UNHEALTHY COMPANIES SIMULTANEOUSLY, AND THAT OFFERED US THE CHANCE TO BUY STOCK
IN HEALTHY COMPANIES AT WHAT WE FELT WERE MORE REASONABLE PRICES.
WE HAVE ALSO TAKEN MORE POSITIONS IN COMPANIES THAT ARE SOMEWHAT HIGHLY VALUED,
EVEN AFTER THE CORRECTION, BUT WHICH OUR RESEARCH INDICATES HAS STRONG PROSPECTS
FOR HIGH EARNINGS GROWTH. WE BELIEVE THIS INCREASED AGGRESSIVENESS MAY HELP
POSITION US TO OUTPERFORM WHEN THE MARKET BECOMES MORE FAVORABLE.
THIS APPROACH HAS CONSISTENTLY BEEN PART OF OUR STRATEGY FOR MANAGING THE
PORTFOLIO IN PERIODS OF VOLATILITY. IN GENERAL, WHEN WE THINK THE MARKET IS
OVERLY EXUBERANT, WE HAVE TENDED TO DECREASE RISK, AND WHEN WE THINK AGGRESSIVE
GROWTH STOCKS ARE DEPRESSED, WE TEND TO INCREASE THE RELATIVE RISK. OUR
EXPERIENCE HAS BEEN THAT THIS HAS HELPED MODERATE THE DOWNSIDE DURING A DROP IN
THE MARKET AND HAS HELPED INCREASE OUR UPSIDE POTENTIAL COMING OUT OF A DOWN
MARKET.
WE ALSO FEEL THAT OUR OVERALL TENDENCY IS TO OWN THE TYPES OF STOCKS THAT HAVE
HISTORICALLY RIDDEN OUT MARKET VOLATILITY RELATIVELY WELL. OUR STRATEGY IS TO
FOCUS ON COMPANIES WITH STRONG EARNINGS GROWTH, COMPANIES WHOSE STOCKS WE FEEL
WE CAN HOLD FOR FIVE YEARS OR MORE, AND THAT HAVE THE POTENTIAL TO BECOME MAJOR
PLAYERS IN THEIR MARKETS. COMPANIES WITHOUT CURRENT EARNINGS OR CASH FLOWS -
THE TYPES OF FIRMS WHOSE STOCKS WE BELIEVE WERE HARDEST HIT IN THE CORRECTION
LAST MARCH AND APRIL - TEND NOT TO BE A LARGE PART OF OUR PORTFOLIO.
<PAGE>
PERFORMANCE
THE PORTFOLIO RETURNED -2.22% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
-0.43% RETURN FOR THE S&P 500.
OUTLOOK
LOOKING FORWARD FOR THE PORTFOLIO, WE'RE WORKING TO CAPITALIZE ON FOUR MAJOR
IDEAS. FIRST, WE FORESEE THE MARKET BROADENING, BOTH BY INDUSTRY AND BY MARKET
CAPITALIZATION. WHEREAS TECHNOLOGY SEEMED TO BE THE ONLY SECTOR DOING WELL OVER
MUCH OF THE PAST YEAR, WE BELIEVE GOOD PERFORMANCE HAS RECENTLY BROADENED TO
INCLUDE A LARGER NUMBER OF SECTORS. SECOND, WE THINK OUR SOFTWARE HOLDINGS SUCH
AS BMC SOFTWARE AND COMPUWARE COULD POTENTIALLY BE STRONG PERFORMERS LATER THIS
YEAR AS EXPANDING INTERNET INITIATIVES AND OTHER NEW TECHNOLOGIES FORCE
COMPANIES TO UPGRADE THEIR SOFTWARE TO REMAIN COMPETITIVE. THIRD, WE BELIEVE
THAT COMPANIES BUILDING THE INTERNET'S INFRASTRUCTURE, SUCH AS VERISIGN, ORACLE,
AND CISCO, WILL CONTINUE TO PROSPER FROM INTERNET GROWTH. WE EXPECT THAT ONE OF
THE BIGGEST DRIVERS OF THIS GROWTH WILL BE BUSINESSES SEIZING UPON INTERNET
APPLICATIONS TO REDUCE COSTS AND INCREASE PRODUCTIVITY. A FOURTH THEME FOUND IN
THE PORTFOLIO IS BUSINESS SERVICES COMPANIES SUCH AS FIRST DATA. SERVICES
PROVIDED BY THESE COMPANIES MAKE IT POSSIBLE FOR LARGER FIRMS TO OUTSOURCE,
DOWNSIZE, AND RESTRUCTURE IN ORDER TO INCREASE PRODUCTIVITY AND EARNINGS.
WHILE SOME OF OUR HOLDINGS, MOST NOTABLY ORACLE AND CISCO, HAVE GROWN INTO
LARGE, RATHER MATURE COMPANIES, WE STILL CONSIDER OURS TO BE AN EMERGING GROWTH
PORTFOLIO. THAT IS BECAUSE WE FEEL IT'S THE GROWTH RATE OF A COMPANY, RATHER
THAN ITS SIZE, THAT CLASSIFIES IT AS EMERGING GROWTH; OUR DEFINITION OF AN
EMERGING GROWTH COMPANY IS ONE THAT IS GROWING EARNINGS, ON AVERAGE, BY 20% OR
MORE PER YEAR. ACCORDING TO OUR RESEARCH, THIS COMPARES TO A HISTORICAL AVERAGE
EARNINGS GROWTH RATE FOR THE STANDARD & POOR'S 500 STOCK INDEX (THE S&P 500) OF
ABOUT 8% OVER THE PAST 60 YEARS AND A MORE RECENT AVERAGE OF ABOUT 15% OVER THE
PAST FIVE TO SEVEN EXTRAORDINARY YEARS. WE VIEW ORACLE AND CISCO AS THE SOFTWARE
AND COMMUNICATIONS LEADERS OF THE INTERNET, AND THE INTERNET AS THE BIGGEST
EMERGING GROWTH AREA IN THE ECONOMY. SO IN SPITE OF THEIR SIZE AND MATURITY, WE
FEEL THESE ARE STILL VERY MUCH EMERGING GROWTH COMPANIES.
EMERGING GROWTH PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 43.38%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
AMERITAS RESEARCH PORTFOLIO
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
THE PORTFOLIO SEEKS LONG-TERM GROWTH OF CAPITAL AND FUTURE INCOME BY INVESTING,
UNDER NORMAL MARKET CONDITIONS, AT LEAST 80% OF ITS TOTAL ASSETS IN COMMON
STOCKS AND RELATED SECURITIES, SUCH AS PREFERRED STOCKS, CONVERTIBLE SECURITIES
AND DEPOSITARY RECEIPTS. THE PORTFOLIO FOCUSES ON COMPANIES THAT THE PORTFOLIO
MANAGER BELIEVES HAVE FAVORABLE PROSPECTS FOR LONG-TERM GROWTHS, ATTRACTIVE
VALUATIONS BASED ON CURRENT AND EXPECTED EARNINGS OR CASH FLOW, DOMINANT OR
GROWING MARKET SHARE AND SUPERIOR MANAGEMENT. THE PORTFOLIO MAY INVEST IN
COMPANIES OF ANY SIZE. THE PORTFOLIO'S INVESTMENTS MAY INCLUDE SECURITIES
TRADED ON SECURITIES EXCHANGES OR IN THE OVER-THE-COUNTER MARKETS.
A COMMITTEE OF INVESTMENT RESEARCH ANALYSTS SELECTS HOLDINGS FOR THE PORTFOLIO.
THIS COMMITTEE INCLUDES INVESTMENT ANALYSTS EMPLOYED NOT ONLY BY THE
MASSACHUSETTS FINANCIAL SERVICES COMPANY (MFS), BUT ALSO BY MFS INTERNATIONAL
(U.K.) LIMITED, A WHOLLY OWNED SUBSIDIARY OF MFS. THE COMMITTEE ALLOCATES THE
PORTFOLIO'S ASSETS AMONG VARIOUS INDUSTRIES. INDIVIDUAL ANALYSTS THEN SELECT
WHAT THEY VIEW AS SECURITIES BEST SUITED TO ACHIEVE THE PORTFOLIO'S INVESTMENT
OBJECTIVE WITHIN THEIR ASSIGNED INDUSTRY RESPONSIBILITY. THE PORTFOLIO MAY
INVEST IN FOREIGN SECURITIES THROUGH WHICH IT MAY HAVE EXPOSURE TO FOREIGN
CURRENCIES.
MARKETS & INVESTMENT CLIMATE
IN THIS VOLATILE ENVIRONMENT, WE'VE FOUND OPPORTUNITIES IN A WIDE RANGE OF
AREAS, BUT SOME INDUSTRIES THAT HAVE RECENTLY PERFORMED WELL FOR THE PORTFOLIO
ARE ENERGY, INSURANCE, AND PHARMACEUTICALS. IN THE ENERGY SECTOR, EXPLORATION
AND PRODUCTION COMPANIES SUCH AS GLOBAL MARINE AND TRANSOCEAN HAVE RALLIED
SIGNIFICANTLY DUE TO THE REBOUND IN OIL AND NATURAL GAS PRICES. HIGHER PRICES
HAVE SPURRED DEMAND FOR DRILLING SERVICES, RESULTING IN STRONG REVENUE AND
EARNINGS GROWTH FOR MANY ENERGY SERVICES COMPANIES. DESPITE A FAIRLY LONG
STRETCH OF WEAK PERFORMANCE FROM INSURANCE STOCKS SUCH AS HARTFORD FINANCIAL, WE
HELD ON TO THESE COMPANIES BECAUSE WE BELIEVED IN THEIR LONG-TERM PROSPECTS AND
THE POSSIBILITY OF CONSOLIDATION IN THE INDUSTRY. RECENTLY, WE'VE SEEN AN
INCREASE IN MERGER AND ACQUISITION ACTIVITY IN THIS GROUP, WHICH HAS BOOSTED THE
PERFORMANCE OF THESE HOLDINGS. IN THE FIRST QUARTER OF 2000, WE TOOK ADVANTAGE
OF WEAKNESS IN PHARMACEUTICAL STOCKS TO INCREASE OUR HOLDINGS IN WHAT WE BELIEVE
ARE TOP-NOTCH COMPANIES WITH STRONG TRACK RECORDS, SUCH AS PHARMACIA, AMERICAN
HOME PRODUCTS, AND BRISTOL-MYERS. SOME OF THESE STOCKS HAVE COME BACK STRONG IN
THE SECOND QUARTER, AND WE BELIEVE THEY STILL OFFER ATTRACTIVE GROWTH PROSPECTS.
WE ALSO SIGNIFICANTLY INCREASED THE PORTFOLIO'S EXPOSURE TO WIRELESS
COMMUNICATIONS COMPANIES RECENTLY. A FEW YEARS AGO, WE FOUND THAT ROUGHLY 3% OF
WORLDWIDE COMMUNICATIONS WERE HANDLED OVER WIRELESS NETWORKS. BUT OUR RESEARCH
SHOWS THAT NOW THE PERCENTAGE HAS MUSHROOMED TO DOUBLE-DIGITS AND WE BELIEVE
SIMILAR GROWTH LIES AHEAD. WE EXPECT REVENUE GROWTH FOR MANY WIRELESS COMPANIES
TO RISE 25% TO 50% PER YEAR, AND INTERNATIONAL REVENUES COULD BE EVEN HIGHER.
GIVEN OUR OUTLOOK FOR DRAMATIC GROWTH IN THIS INDUSTRY, WE LIKE THE RISK/REWARD
PROFILE OF THESE STOCKS.
<PAGE>
IN OTHER AREAS, DESPITE WHAT WE THINK MAY BE A SOMEWHAT LESS ROBUST ENVIRONMENT
FOR CONSUMER SPENDING, WE LIKE COMPANIES SUCH AS CVS AND SAFEWAY BECAUSE THEY'RE
NONCYCLICAL. PEOPLE ALWAYS HAVE TO BUY PRESCRIPTIONS, HOUSEHOLD PRODUCTS, AND
GROCERIES, EVEN IF THE ECONOMY SLOWS DOWN. WE ALSO HAPPEN TO THINK THESE ARE
TWO OF THE BEST-RUN COMPANIES IN THEIR RESPECTIVE INDUSTRIES. ADDITIONALLY,
WE'VE INCREASED OUR POSITIONS IN INTEL AND EMC CORP. BECAUSE WE SEE DEMAND FOR
THEIR PRODUCTS AND SERVICES ACCELERATING, WE FEEL THEIR FUNDAMENTAL BUSINESS
PROSPECTS HAVE BEEN STRONG, AND WE ULTIMATELY BELIEVE THEY CAN MAINTAIN THEIR
LEADERSHIP POSITIONS IN THEIR MARKETS.
INVESTMENT STRATEGY
HISTORICALLY, INVESTMENT TRENDS AND STYLES HAVE GONE IN AND OUT OF FAVOR WITH
INVESTORS. THIS PARTIALLY EXPLAINS THE RECENT WEAKNESS WE'VE SEEN IN THE
MARKET. AT MFS, WE DON'T SPEND TOO MUCH TIME TRYING TO DETERMINE WHEN VALUE OR
GROWTH, SMALL-CAP OR LARGE-CAP STOCKS WILL MOVE IN AND OUT OF THE SPOTLIGHT.
INSTEAD, WE FOCUS ON TRYING TO FIND DOMINANT BUSINESS FRANCHISES WITH
OUTSTANDING MANAGEMENT DRIVING ACCELERATING EARNINGS GROWTH. IT'S A BOTTOM-UP
APPROACH THAT'S BASED ON INTENSIVE HANDS-ON RESEARCH AND THE BEST IDEAS OF OUR
ANALYSTS. THIS APPROACH HAS LED US TO SOME VERY REWARDING GROWTH OPPORTUNITIES,
AND WE BELIEVE IT COULD CONTINUE TO PROVIDE SUPERIOR LONG-TERM PERFORMANCE
RELATIVE TO OUR COMPETITORS.
THERE ARE A FEW SELECT FACTORS THAT HELP DISTINGUISH THIS PORTFOLIO FROM ITS
COMPETITORS. FIRST AND FOREMOST, WE BELIEVE THE DEPTH AND TALENT OF OUR
COMMITTEE OF ANALYSTS ARE BIG ADVANTAGES. WE HAVE MORE THAN 35 ANALYSTS AT MFS,
ALL CONTRIBUTING THEIR BEST IDEAS TO THE PORTFOLIO. AS A RESULT, THERE IS A
GREAT DEAL OF INFORMATION SHARING, STARTING WITH OUR IN-DEPTH BALANCE SHEET AND
EARNINGS ANALYSIS. AT THE SAME TIME, WE ALL SPEND A GREAT DEAL OF TIME ON THE
ROAD MEETING WITH COMPANY MANAGEMENTS, AS WELL AS WITH EMPLOYEES, COMPETITORS,
AND SUPPLIERS. WE ALSO HAVE A LOT OF FLEXIBILITY WITH THE PORTFOLIO. WE CAN
LOOK AT ANY MARKET CAPITALIZATION AND ANY LOCATION OR ANY INDUSTRY. OVERALL, WE
LEAN TOWARD THE MORE DYNAMIC AREAS OF THE ECONOMY, FOCUSING ON COMPANIES THAT WE
BELIEVE ARE AT THE FOREFRONT OF INNOVATION AND ARE CAPITALIZING ON THEIR
COMPETITIVE ADVANTAGES.
PERFORMANCE
THE PORTFOLIO RETURNED 6.00% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
-0.43% RETURN FOR THE S&P 500, 0.78% RETURN FOR THE RUSSELL 1000
(HIGHEST-RANKING 1000 LARGEST U.S. STOCKS IN TERMS OF MARKET CAPITALIZATION) AND
0.95% RETURN FOR THE RUSSELL 3000 (3,000 LARGEST U.S. STOCKS IN TERMS OF MARKET
CAPITALIZATION)
RESEARCH PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 21.80%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
AMERITAS GROWTH WITH INCOME PORTFOLIO
MANAGED BY MASSACHUSETTS FINANCIAL SERVICES COMPANY
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
THE PORTFOLIO SEEKS TO PROVIDE REASONABLE CURRENT INCOME AND LONG-TERM GROWTH OF
CAPITAL AND INCOME BY INVESTING, UNDER NORMAL MARKET CONDITIONS, AT LEAST 65% OF
ITS TOTAL ASSETS IN COMMON STOCKS AND RELATED SECURITIES, SUCH AS PREFERRED
STOCKS, CONVERTIBLE SECURITIES AND DEPOSITARY RECEIPTS FOR THOSE SECURITIES.
THESE SECURITIES MAY BE LISTED ON A SECURITIES EXCHANGE OR TRADED IN THE
OVER-THE-COUNTER MARKETS. WHILE THE PORTFOLIO MAY INVEST IN COMPANIES OF ANY
SIZE, IT MAY GENERALLY FOCUS ON COMPANIES WITH LARGER MARKET CAPITALIZATIONS
THAT THE PORTFOLIO MANAGER BELIEVES HAVE SUSTAINABLE GROWTH PROSPECTS AND
ATTRACTIVE VALUATIONS BASED ON CURRENT AND EXPECTED EARNINGS OR CASH FLOW. THE
PORTFOLIO MAY INVEST IN FOREIGN SECURITIES AND MAY HAVE EXPOSURE TO FOREIGN
CURRENCIES THROUGH ITS INVESTMENT IN THESE SECURITIES.
MARKETS & INVESTMENT CLIMATE
IN THIS RECENTLY VOLATILE ENVIRONMENT, OUR STANDARD PRACTICE OF KEEPING A CLOSE
EYE ON VALUATIONS IN THIS PORTFOLIO RESULTED IN OUR BEING UNDERWEIGHTED IN
TECHNOLOGY STOCKS RELATIVE TO THE S&P 500. WE BELIEVE THIS HAS BEEN A BIG
ADVANTAGE FOR US. AT THE SAME TIME, WE'RE NOT SIMPLY VALUE INVESTORS; WE ALSO
TRY TO SEEK OUT GROWTH AT THE RIGHT PRICE. OUR BROAD-BASED STOCK SELECTION
EXPRESSES THIS PHILOSOPHY AND PROVED TO BE A SIGNIFICANT CONTRIBUTOR TO
PERFORMANCE. OUR WELL-DIVERSIFIED PORTFOLIO OF HOLDINGS SUCH AS HARTFORD
FINANCIAL SERVICES, STATE STREET BANK, PHARMACIA, PFIZER, SAFEWAY, AND BP AMOCO
ARE ALL GREAT EXAMPLES OF STOCKS THAT WE BELIEVE OFFER FAVORABLE GROWTH
OPPORTUNITIES AT REASONABLE VALUATIONS AND THAT HAVE PROVIDED EXCEPTIONAL
PERFORMANCE.
EARLY IN THE YEAR, WHEN MOST INVESTORS WERE SHUNNING THE SECTOR, WE WERE BUYING
PHARMACEUTICAL STOCKS. MANY OF THESE HOLDINGS HAVE BEEN REWARDED RECENTLY AND
THERE WERE SEVERAL REASONS WHY WE WERE BULLISH ON THESE STOCKS. FIRST, WE
BELIEVE MANY OF THE ISSUES SURROUNDING THE INDUSTRY'S DECLINE IN 1999 HAVE
SUBSIDED, INCLUDING THE THREAT OF ONEROUS GOVERNMENT PRICING REGULATION AND
MEDICARE REFORM. SECOND, MANY DRUG STOCKS MAINTAINED STRONG GROWTH RATES IN
1999 AND 2000 BUT WERE HURT LAST YEAR BY CONCERNS ABOUT FADING PRODUCT
PIPELINES. TODAY, WE SEE PLENTY OF NEW PRODUCTS IN THE PIPELINE, AND WITH
QUICKER FDA APPROVAL RATES, THERE IS ALWAYS THE POSSIBILITY THAT A NEW
BLOCKBUSTER DRUG COULD BE RIGHT AROUND THE CORNER. FINALLY, WE FEEL HEALTH CARE
AND PHARMACEUTICAL STOCKS HISTORICALLY HAVE HELD UP WELL IN A WEAKENING ECONOMY.
IF THE FEDERAL RESERVE BOARD'S RATE HIKES SUCCEED IN SLOWING THE ECONOMY, WE
BELIEVE TRADITIONALLY STABLE AND STEADY GROWERS SUCH AS HEALTH CARE STOCKS
COULD OUTPERFORM THE OVERALL MARKET.
WHILE WE HAVE RECENTLY DECREASED THE PORTFOLIO'S EXPOSURE TO TECHNOLOGY, WE
THINK THERE ARE A LOT OF OPPORTUNITIES AND POTENTIAL FOR LARGE PROFITS IN THE
SECTOR. WE BELIEVE SOME OF THE FASTEST GROWING AND MOST INNOVATIVE COMPANIES IN
THE WORLD ARE THE ONES THAT CREATE NEW TECHNOLOGIES. HOWEVER, WE BELIEVE YOU
CAN'T IGNORE EARNINGS AND VALUATIONS. IF STOCK PRICES GET TOO FAR AHEAD OF
EARNINGS GROWTH, WHICH WE FELT THEY DID IN THE FIRST QUARTER OF 2000, THE
<PAGE>
STOCKS HAVE TO TREAD WATER UNTIL THE COMPANIES' GROWTH CAN CATCH UP. ACCORDING
TO OUR RESEARCH, VERY FEW INDUSTRIES CAN GROW 30% A YEAR OVER THE LONG TERM, BUT
LAST YEAR MANY TECH STOCKS WERE UP WELL OVER 100%, AND WE FELT THAT WAS JUST TOO
FAR TOO FAST. WITH THAT IN MIND, ALTHOUGH THE PORTFOLIO HAS REMAINED
UNDERWEIGHTED IN TECHNOLOGY VERSUS THE S&P 500, IT IS STILL THE LARGEST SECTOR
WEIGHTING IN THE PORTFOLIO BECAUSE WE CONTINUE TO SEE GREAT OPPORTUNITIES FOR
LONG-TERM GROWTH.
INVESTMENT STRATEGY
WHILE THE HOLDINGS AND SECTOR WEIGHTINGS OF THE PORTFOLIO WILL CONSTANTLY SHIFT
DEPENDING ON WHERE WE FIND OPPORTUNITIES, IT'S IMPORTANT TO EMPHASIZE THAT OUR
OVERALL STRATEGY REMAINS THE SAME. WE CONTINUE TO TRY TO BALANCE THE PORTFOLIO
BY TAKING ADVANTAGE OF WHAT WE THINK ARE THE BEST GROWTH AND VALUE STOCKS TO OWN
AT THE RIGHT TIME. WHEN GROWTH STOCKS ARE IN FAVOR, OUR OBJECTIVE IS TO KEEP
PACE WITH THE MARKET; IN A VALUE ENVIRONMENT, OUR GOAL IS TO OUTPERFORM.
PERFORMANCE
THE PORTFOLIO RETURNED 0.71% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
-0.43% RETURN FOR THE S&P 500 AND 0.78% RETURN FOR THE RUSSELL 1000
(HIGHEST-RANKING 1000 LARGEST U.S. STOCKS IN TERMS OF MARKET CAPITALIZATION).
OUTLOOK
FROM OUR STANDPOINT, NO MATTER WHAT DIRECTION THE MARKET IS HEADED, IT USUALLY
PROVIDES OPPORTUNITIES TO INVESTORS WHO DO THEIR HOMEWORK. WHILE THERE ARE
POCKETS OF THE MARKET THAT STILL APPEAR PRICEY, WE SEE STRONG POTENTIAL FOR THE
MARKET TO HEAD HIGHER GIVEN WHAT WE VIEW AS AN ENVIRONMENT OF HEALTHY ECONOMIC
GROWTH, REASONABLE INTEREST RATES, AND A FAVORABLE OUTLOOK FOR CORPORATE
EARNINGS GROWTH. WE ALSO HAVE FOUND THAT IT'S VERY DIFFICULT TO PREDICT WHAT
THE MARKET WILL DO IN THE SHORT TERM. AS A RESULT, WE CONTINUE TO FOCUS ON
FINDING COMPANIES THAT WE BELIEVE OFFER THE BEST FUNDAMENTAL BUSINESS PROSPECTS
AND THE POTENTIAL FOR STRONG LONG-TERM PERFORMANCE.
GROWTH WITH INCOME PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 5.39%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
AMERITAS INDEX 500 PORTFOLIO
MANAGED BY STATE STREET GLOBAL ADVISORS
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
THE PORTFOLIO SEEKS INVESTMENT RESULTS THAT CORRESPOND TO THE TOTAL RETURN OF
COMMON STOCKS PUBLICLY TRADED IN THE U.S., AS REPRESENTED BY THE S&P 500 INDEX.
UNDER NORMAL CONDITIONS, THE PORTFOLIO SEEKS TO TRACK THE S&P 500 INDEX WHICH IS
A WIDELY RECOGNIZED, UNMANAGED INDEX OF COMMON STOCK PRICES. THE PORTFOLIO
INTENDS, UNDER NORMAL CONDITIONS, TO INVEST IN ALL 500 STOCKS IN THE S&P 500
INDEX IN PROPORTION TO THE WEIGHTING IN THE INDEX. IF IT IS NOT ABLE TO
PURCHASE ALL 500 STOCKS, DUE TO MONETARY CONSTRAINTS, IT MAY PURCHASE A
REPRESENTATIVE SAMPLE.
MARKETS & INVESTMENT CLIMATE
THE FEDERAL RESERVE RAISED THE FEDERAL FUNDS RATE THREE TIMES DURING THE FIRST
HALF OF 2000: FIRST ON FEBRUARY 2, THEN ON MARCH 21, AND FINALLY A 50 BASIS
POINT INCREASE ON MAY 16 TO 6.5%. TIGHTER MONETARY POLICY TOOK IT'S TOLL ON THE
EQUITY MARKETS, ERASING MUCH OF THE GAINS REGISTERED IN THE FIRST QUARTER,
LEAVING MANY U.S. EQUITY INDEXES NEAR THE LEVELS WHERE THEY BEGAN THE YEAR. THE
MARKETS DID SEE A BIT OF RELIEF, WHEN, ON JUNE 28, THE FEDERAL OPEN MARKET
COMMITTEE ELECTED TO LEAVE RATES UNCHANGED. IN THEIR PRESS RELEASE, THEY
POINTED TO RECENT DATA INDICATING THAT DEMAND MAY BE MODERATING, BUT STILL
CAUTIONED THAT THE POTENTIAL FOR INFLATIONARY PRESSURES WAS STILL PRESENT.
INDEX & PORTFOLIO PERFORMANCE
THE S&P 500 INDEX RETURNED 2.29% FOR THE FIRST QUARTER OF 2000 (2.15% FOR THE
AMERITAS INDEX 500 PORTFOLIO), ADDING TO ITS IMPRESSIVE 21.04% RETURN IN 1999.
AFTER EXPERIENCING NEGATIVE RETURNS IN JANUARY AND FEBRUARY (-5.02% AND -1.89%
FOR THE INDEX AND -5.07% AND -1.94% FOR THE AMERITAS INDEX 500 PORTFOLIO), THE
INDEX GAINED 9.78% IN MARCH ALONE (9.73% FOR THE AMERITAS INDEX 500 PORTFOLIO) ,
ALLOWING THE INDEX TO POST A POSITIVE RETURN FOR THE QUARTER. HOWEVER, THE S&P
500 INDEX WAS DOWN 2.66% IN THE SECOND QUARTER (-2.83% FOR THE AMERITAS INDEX
500 PORTFOLIO), ERASING THE FIRST QUARTER'S GAINS, AND LEAVING THE INDEX WITH A
YEAR-TO-DATE RETURN OF -0.42% (-0.74% FOR THE AMERITAS INDEX 500 PORTFOLIO).
THIS MARKS THE FIRST TIME THE S&P 500 INDEX HAS POSTED A NEGATIVE SEMI-ANNUAL
RETURN SINCE 1994.
LARGE-CAP GROWTH STOCKS CONTINUED TO OUTPERFORM THE LARGE-CAP VALUE STOCKS, AS
WAS THE CASE IN 1999, WITH THE S&P/BARRA GROWTH INDEX BETTERING THE S&P/BARRA
VALUE INDEX BY 6.65% (2.58% VS. -4.07%).
INDEX 500 PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (11.1.99) 7.29%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
SECTOR PERFORMANCE
THE TECHNOLOGY SECTOR WAS THE BEST PERFORMING SECTOR FOR THE FIRST QUARTER,
RETURNING 12.71%. THE UTILITY SECTOR WAS THE SECOND BEST PERFORMER FOR THE
QUARTER, RETURNING 7.26%, AFTER HAVING BEEN THE WORST PERFORMER IN 1999. THE
SECOND QUARTER WITNESSED A SHIFT IN SECTOR LEADERSHIP FROM TECHNOLOGY TO
HEALTHCARE. THE TECHNOLOGY SECTOR WAS DOWN 9.2% WHILE HEALTHCARE ACHIEVED A
22.7% RETURN FOR THE QUARTER. THE HEALTHCARE SECTOR, WHICH HAS AN 11.5% WEIGHT
IN THE S&P 500, MADE THE GREATEST POSITIVE CONTRIBUTION TO INDEX PERFORMANCE FOR
BOTH THE SECOND QUARTER AND THE FIRST HALF OF THE YEAR.
INDEX CHANGES
THE S&P 500 INDEX EXPERIENCED 8 INDEX CHANGES DURING THE FIRST QUARTER AND 16
DURING THE SECOND QUARTER, BRINGING THE TOTAL NUMBER TO 24 YEAR-TO-DATE. THE
S&P 500 INDEX FINISHED 1999 WITH A TOTAL OF 42 INDEX CHANGES.
<PAGE>
AMERITAS MONEY MARKET PORTFOLIO
MANAGED BY CALVERT ASSET MANAGEMENT COMPANY, INC.
A WORD FROM PORTFOLIO MANAGEMENT:
PORTFOLIO OBJECTIVE AND INVESTMENT STYLE
THE PORTFOLIO SEEKS AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT WITH
PRESERVATION OF CAPITAL AND LIQUIDITY. THE PORTFOLIO SEEKS TO MAINTAIN A
CONSTANT NET ASSET VALUE OF $1.00 PER SHARE FOR THE PORTFOLIO. THE PORTFOLIO
INVESTS IN U.S. DOLLAR-DENOMINATED MONEY MARKET SECURITIES OF DOMESTIC AND
FOREIGN ISSUERS, INCLUDING U.S. GOVERNMENT SECURITIES AND REPURCHASE AGREEMENTS.
ALL INVESTMENTS MUST COMPLY WITH THE SEC MONEY MARKET FUND REQUIREMENTS. THE
PORTFOLIO INVESTS MORE THAN 25% OF TOTAL ASSETS IN THE FINANCIAL SERVICES
INDUSTRY.
MARKETS & INVESTMENT CLIMATE
DURING THE PAST SIX MONTHS, THE MAJOR STOCK MARKET INDICES HAVE DECLINED. THE
MAJOR FORCES DRIVING THE BULL MARKET AND ECONOMIC GROWTH HAVE BEGUN TO SHOW
SIGNS OF FALTERING. LOW INFLATION, LOW INTEREST RATES, ROBUST CORPORATE
EARNINGS, AND A SURGE IN Y2K SPENDING, HELPED FURTHER THE CURRENT ECONOMIC
EXPANSION. UNPRECEDENTED STOCK MARKET PERFORMANCE HELPED CONSUMER CONFIDENCE
REACH NEW HIGHS. THIS, ALONG WITH ACCELERATING CONSUMER SPENDING AND A SMALLER
POOL OF AVAILABLE WORKERS, LED TO CONCERN THAT THE CURRENT RATE OF EXPANSION WAS
UNSUSTAINABLE AND THAT SIGNS OF INFLATION WOULD SOON APPEAR.
AS A RESULT OF THESE CONCERNS, THE FEDERAL RESERVE OPEN MARKET COMMITTEE (FOMC)
RAISED THE FEDERAL FUNDS RATE THREE TIMES THIS YEAR. ON FEBRUARY 2, THE FOMC
RAISED RATES 25 BASIS POINTS TO 5.75% IN AN EFFORT TO KEEP THE ECONOMY GROWING,
BUT AT A SLOWER PACE. AS THE ECONOMY ROLLED ON, THE FEDERAL RESERVE MOVED AGAIN
ON MARCH 21 WITH ANOTHER 25 BASIS POINT MOVE TO 6.00%. ONCE AGAIN, ECONOMIC
GROWTH CONTINUED AT A FEVERISH PACE AND SIGNS OF INFLATION STARTED TO CREEP IN,
PROMPTING THE FEDERAL RESERVE TO RAISE RATES 50 BASIS POINTS TO 6.50% ON MAY 16.
AFTER SIX RATE HIKES SINCE JUNE, 1999, THE FED FINALLY KEPT THE FEDERAL FUNDS
RATE UNCHANGED AT THEIR LAST MEETING, SINCE RECENT ECONOMIC DATA HAS SHOWN
PRELIMINARY SIGNS OF GROWTH DECELERATION. HOWEVER, THE FOMC WILL CONTINUE TO
MONITOR ECONOMIC RELEASES FOR ANY SIGNS OF INFLATIONARY PRESSURES.
INVESTMENT STRATEGY
DURING THE FIRST QUARTER OF 2000, SHORT-TERM TAXABLE RATES CONTINUED TO RISE
DRAMATICALLY IN LIGHT OF FEDERAL RESERVE TIGHTENING. TAXABLE MONEY MARKET RATES
WERE PRICING IN MORE FEDERAL RESERVE RATE INCREASES THAN WHAT A REASONABLE
MARKET OBSERVER WOULD EXPECT. THEREFORE, WE BEGAN TO BUY AGGRESSIVELY,
EXTENDING THE AVERAGE MATURITY OF THE PORTFOLIO. AS HINTS OF AN ECONOMIC
SLOWDOWN SURFACED IN THE SECOND QUARTER, RATES QUICKLY REVERSED COURSE AND
DROPPED TO LEVELS REFLECTING MARKET PERCEPTION OF A FEDERAL RESERVE THAT WAS
NEARING THE END OF THE TIGHTENING CYCLE. AT THE SAME TIME, WE HAVE MAINTAINED
ENOUGH LIQUIDITY IN ORDER TO INVEST IN HIGHER YIELDING SECURITIES SHOULD RATES
RISE AGAIN.
<PAGE>
PERFORMANCE
THE PORTFOLIO RETURNED 3.03% FOR THE SIX MONTHS ENDED JUNE 30, 2000 VERSUS A
2.27% RETURN FOR THE LIPPER VARIABLE ANNUITY MONEY MARKET INDEX.
OUTLOOK
THERE ARE MANY UNCERTAINTIES FACING THE ECONOMY. THE COMING MONTHS WILL PROVIDE
SOME CLUES AS TO WHETHER NON-INFLATIONARY ECONOMIC GROWTH CAN BE SUSTAINED.
WHILE THE POTENTIAL FOR FURTHER FEDERAL RESERVE RATE INCREASES EXISTS, WE WILL
CONTINUE TO MONITOR KEY ECONOMIC INDICATORS FOR SIGNS THAT THE RECENT
DECELERATION OF ECONOMIC ACTIVITY WAS NOT AN ABERRATION, BUT A CONFIRMATION OF A
MORE REASONABLE RATE OF GROWTH.
MONEY MARKET PORTFOLIO
ANNUAL TOTAL RETURN
(PERIOD ENDED 6.30.00)
SINCE INCEPTION (10.29.99) 4.09%
*PERFORMANCE INFORMATION IS FOR THE PORTFOLIO ONLY AND DOES NOT REFLECT CHARGES
AND EXPENSES OF THE VARIABLE ANNUITY OR VARIABLE UNIVERSAL LIFE CONTRACT.
PAST PERFORMANCE DOES NOT INDICATE FUTURE RESULTS.
<PAGE>
INCOME & GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 97.3% SHARES VALUE
BANKS - MAJOR REGIONAL - 1.7%
WELLS FARGO CO. 42,750 $1,656,563
BIOTECHNOLOGY - 2.9%
AMGEN, INC. * 38,700 2,718,675
BROADCAST - TV, RADIO AND CABLE - 2.0%
COMCAST CORP.* 46,600 1,887,300
COMMUNICATIONS EQUIPMENT - 15.2%
CORNING, INC. 13,700 3,697,288
ERICSSON CO. 140,400 2,808,000
MOTOROLA, INC. 56,700 1,647,844
NOKIA CORP. 28,050 1,400,747
NORTEL NETWORKS CORP. 48,800 3,330,600
SCIENTIFIC ATLANTA, INC. 20,000 1,490,000
14,374,479
COMPUTERS - HARDWARE - 3.1%
HEWLETT PACKARD CO. 12,700 1,585,913
SUN MICROSYSTEMS, INC.* 15,000 1,364,063
2,949,976
COMPUTERS - NETWORKING - 3.4%
CISCO SYSTEMS, INC. * 50,000 3,178,125
COMPUTERS - SOFTWARES AND SERVICES - 3.2%
AMDOCS, LTD.* 18,000 1,381,500
EBAY, INC. * 25,800 1,401,262
VIGNETTE CORP.* 5,200 270,481
3,053,243
DISTRIBUTORS - FOOD AND HEALTH - 3.4%
CARDINAL HEALTH, INC. 43,000 3,182,000
ELECTRICAL EQUIPMENT - 4.3%
GENERAL ELECTRIC CO. 58,800 3,116,400
SOLECTRON CORP.* 24,000 1,005,000
4,121,400
ELECTRONICS - SEMICONDUCTORS - 9.4%
JDS UNIPHASE CORP.* 15,900 1,906,012
LINEAR TECHNOLOGY CORP. 43,600 2,787,675
MICRON TECHNOLOGY, INC.* 10,000 880,625
TEXAS INSTRUMENTS, INC. 48,400 3,324,475
8,898,787
ELECTRONICS - INSTRUMENTS - 2.4%
NEWPORT CORP. 21,000 2,254,875
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ENTERTAINMENT - 1.7%
TIME WARNER, INC. 21,800 $1,656,800
EQUIPMENT - SEMICONDUCTORS - 2.8%
APPLIED MATERIALS, INC. * 29,400 2,664,375
FINANCIAL - DIVERSIFIED - 5.8%
AMERICAN EXPRESS CO. 38,700 2,017,237
CITIGROUP, INC. 58,400 3,518,600
5,535,837
HEALTHCARE - DIVERSIFIED - 2.8%
AMERICAN HOME PRODUCTS CORP. 45,500 2,673,125
HEALTHCARE - DRUGS & MAJOR PHARMACEUTICALS - 5.0%
ELI LILLY AND CO. 4,600 459,425
PFIZER, INC. 88,550 4,250,400
4,709,825
HEALTHCARE - MEDICAL PRODUCT & SUPPLIES - 2.0%
MEDTRONIC, INC. 37,400 1,862,988
INSURANCE - MULTI-LINE - 2.0%
AMERICAN INTERNATIONAL GROUP 16,450 1,932,875
MANUFACTURING - DIVERSIFIED - 0.9%
UNITED TECHNOLOGIES CORP. 15,000 883,125
MANUFACTURING - SPECIALIZED - 3.3%
MILLIPORE CORP. 41,700 3,143,137
OIL AND GAS - DRILLING AND EQUIPMENT - 2.0%
HALLIBURTON CO. 40,500 1,911,094
OIL - INTERNATIONAL INTEGRATED - 1.5%
EXXON MOBIL CORP. 17,700 1,389,450
RAILROADS - 1.1%
KANSAS CITY SOUTHERN INDUSTRIALS, INC. 11,950 1,059,816
RETAIL - BUILDING SUPPLIES - 2.9%
HOME DEPOT, INC. 55,850 2,789,009
RETAIL - FOOD CHAINS - 1.1%
SAFEWAY, INC.* 22,100 997,263
RETAIL - GENERAL MERCHANDISE - 3.6%
WAL-MART STORES, INC. 59,100 3,405,637
SERVICES - ADVERTISING AND MARKETING - 3.2%
OMNICOM GROUP 20,400 1,816,875
YOUNG & RUBICAM, INC. 20,600 1,178,062
2,994,937
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - DATA PROCESSING - 3.0%
PAYCHEX, INC. 68,150 $2,862,300
TELECOMMUNICATION - LONG DISTANCE - 1.6%
VERIZON COMMUNICATIONS 30,000 1,524,375
TOTAL EQUITY SECURITIES (COST $79,540,677) 92,271,391
PRINCIPAL
COMMERCIAL PAPER - 2.4% AMOUNT
BAUS FUNDING LLC, 6.71%, 7/14/00 $300,000 299,273
FORD MOTOR CREDIT CO., 6.55%, 7/11/00 400,000 399,272
NEPTUNE FUNDING CORP., 6.80%, 7/24/00 1,600,000 1,593,049
TOTAL COMMERCIAL PAPER (COST $2,291,594) 2,291,594
TOTAL INVESTMENTS (COST $81,832,271) - 99.7% 94,562,985
OTHER ASSETS AND LIABILITIES, NET - 0.3% 240,296
NET ASSETS - 100% $94,803,281
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 92.1% SHARES VALUE
BIOTECHNOLOGY - 3.4%
AMGEN, INC. * 103,100 $7,242,775
BROADCAST-TV, RADIO AND CABLE - 4.6%
AT&T - LIBERTY MEDIA GROUP * 126,000 3,055,500
CLEAR CHANNEL COMMUNICATIONS * 33,400 2,505,000
COMCAST CORP. * 58,500 2,369,250
COX COMMUNICATIONS, INC. * 41,350 1,884,009
9,813,759
COMMUNICATIONS EQUIPMENT - 6.7%
CORNING, INC. 23,700 6,396,038
TELEFONAKTIEBOLAGET LM ERICSSON (ADR) 190,500 3,810,000
MOTOROLA, INC. 137,400 3,993,188
14,199,226
COMPUTERS - HARDWARE - 6.3%
DELL COMPUTER CORP. * 126,700 6,247,894
HEWLETT-PACKARD CO. 39,700 4,957,537
SUN MICROSYSTEMS, INC. * 23,200 2,109,750
13,315,181
COMPUTERS - NETWORKING - 3.5%
CISCO SYSTEMS, INC. * 115,100 7,316,044
COMPUTERS - SOFTWARE & SERVICES - 10.3%
AMERICA ONLINE, INC. * 60,300 3,180,825
CNET NETWORKS, INC. * 17,300 424,931
EBAY, INC. * 96,000 5,214,000
INTUIT, INC. * 29,300 1,212,288
I2 TECHNOLOGIES, INC. * 10,505 1,095,311
MICROSOFT CORP. * 95,500 7,640,000
ORACLE CORP. 14,700 1,235,719
YAHOO, INC. 13,600 1,684,700
21,687,774
DISTRIBUTORS-FOOD & HEALTH - 0.6%
CARDINAL HEALTH, INC. 15,900 1,176,600
ELECTRICAL EQUIPMENT - 1.2%
SOLECTRON CORP. * 61,000 2,554,375
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONICS - SEMICONDUCTORS - 10.5%
ALTERA CORP. * 40,900 $4,169,244
INTEL CORP. 47,800 6,390,262
LINEAR TECHNOLOGY CORP. * 60,600 3,874,613
MAXIM INTEGRATED PRODUCTS * 14,200 964,712
MICRON TECHNOLOGY, INC. * 38,100 3,355,181
TEXAS INSTRUMENTS, INC. 49,700 3,413,768
22,167,780
ENTERTAINMENT - 1.7%
TIME WARNER, INC. * 48,700 3,701,200
EQUIPMENT - SEMICONDUCTORS - 5.2%
APPLIED MATERIALS, INC. * 87,400 7,920,625
TERADYNE, INC. * 41,900 3,079,650
11,000,275
FINANCIAL - DIVERSIFIED - 5.2%
AMERICAN EXPRESS CO. 26,700 1,391,737
CITIGROUP, INC. * 91,600 5,518,900
MORGAN STANLEY DEAN WITTER & CO. * 49,700 4,137,525
11,048,162
HEALTHCARE - DIVERSIFIED - 3.2%
AMERICAN HOME PRODUCTS CORP. 113,750 6,682,813
HEALTHCARE - DRUGS & PHARMACEUTICAL - 5.4%
ELI LILLY & CO. 10,100 1,008,737
PFIZER, INC. 214,500 10,296,000
11,304,737
HEALTHCARE - MEDICAL PRODUCTS & SUPPLIES - 1.0%
MEDTRONIC, INC. * 44,400 2,211,675
INVESTMENT BANKING AND BROKERAGE - 1.8%
MERRILL LYNCH & CO. * 12,100 1,391,500
SCHWAB (CHARLES) CORP. * 69,600 2,340,300
3,731,800
LEISURE TIME - PRODUCTS - 0.8%
HARLEY-DAVIDSON, INC. 46,200 1,778,700
MANUFACTURING - DIVERSIFIED - 2.4%
UNITED TECHNOLOGIES CORP. 86,400 5,086,800
OIL & GAS - DRILL & EQUIPMENT'S - 6.3%
EXXON MOBIL CORP. 78,100 6,130,850
HALLIBURTON CO. 150,750 7,113,516
13,244,366
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
RAILROADS - 1.2%
KANSAS CITY SOUTHERN INDUSTRIES, INC. 29,500 $2,616,281
RETAIL - FOOD CHAINS - 2.7%
KROGER CO. * 50,500 1,114,156
SAFEWAY, INC. * 102,600 4,629,825
5,743,981
RETAIL - BUILDING SUPPLIES - 2.2%
HOME DEPOT, INC. 92,775 4,632,952
RETAIL - COMPUTER & ELECTRONIC - 1.7%
BEST BUY, INC. * 56,500 3,573,625
RETAIL - GENERAL MERCHANDISE - 3.3%
WAL-MART STORES, INC. 120,000 6,915,000
SERVICES - ADVERTISING & MARKETING - 0.9%
OMNICOM GROUP, INC. 20,400 1,816,875
TOTAL EQUITY SECURITIES (COST $163,166,934) 194,562,756
PRINCIPAL
COMMERCIAL PAPER - 6.8% AMOUNT
CORPORACION ANDINA, 6.52%, 7/6/2000 $200,000 199,819
COUNTRYWIDE HOME LOANS, INC. 6.78%, 7/14/2000
3,300,000 3,291,920
FORD MOTOR CREDIT CORP.,
6.55%, 7/11/2000 3,500,000 3,493,632
7.00%, 7/11/2000 4,000,000 3,992,222
NEPTUNE FUNDING CORP., 6.80%, 7/24/2000 1,300,000 1,294,352
REPSOL INTERNATIONAL FINANCIAL, 6.55%, 7/17/2000
2,100,000 2,093,887
TOTAL COMMERCIAL PAPER (COST $14,365,832) 14,365,832
TOTAL INVESTMENTS (COST $177,532,766) - 98.9% 208,928,588
OTHER ASSETS AND LIABILITIES, NET - 1.1% 2,356,329
NET ASSETS - 100% $211,284,917
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
SMALL CAPITALIZATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 98.7% SHARES VALUE
AIR FREIGHT - 0.4%
FORWARD AIR CORP.* 12,000 $480,000
BEVERAGES - ALCOHOLIC - 1.0%
BERINGER WINE ESTATES HOLDINGS, INC.* 37,700 1,331,281
BIOTECHNOLOGY - 1.3%
IDEC PHARMACEUTICALS CORP.* 15,000 1,759,687
BROADCAST - 3.0%
CITADEL COMMUNICATIONS CORP.* 35,100 1,226,306
COX RADIO, INC.* 47,000 1,316,000
EMMIS COMMUNICATIONS CORP.* 37,800 1,563,975
4,106,281
CHEMICALS - SPECIALTY - 1.3%
ATMI, INC.* 38,700 1,799,550
COMMUNICATIONS EQUIPMENT - 5.1%
ANTEC CORP.* 41,400 1,720,688
ASPECT COMMUNICATIONS CORP.* 65,200 2,563,175
COMMSCOPE, INC.* 28,300 1,160,300
EFFICIENT NETWORKS, INC.* 20,000 1,471,250
6,915,413
COMPUTERS - 27.5%
ADVENT SOFTWARE, INC.* 48,600 3,134,700
AWARE, INC.* 18,900 966,263
BSQUARE CORP* 18,300 410,606
BUSINESS OBJECTS SA* 41,400 3,648,375
CNET NETWORKS, INC.* 62,000 1,522,875
CRITICAL PATH INC.* 24,300 1,416,994
ENTRUST TECHNOLOGIES, INC.* 55,000 4,551,250
ESPEED, INC.* 35,300 1,533,344
ISS GROUP, INC.* 27,000 2,665,828
INTUIT, INC.* 18,600 769,575
KANA COMMUNICATIONS, INC.* 23,100 1,429,312
LIBERATE TECHNOLOGIES* 20,000 586,250
METASOLV SOFTWARE, INC.* 30,000 1,320,000
MICROMUSE, INC.* 22,400 3,706,850
PHONE.COM, INC.* 27,000 1,758,375
REALNETWORKS, INC.* 55,000 2,780,937
VIGNETTE CORP.* 28,000 1,456,437
VITRIA TECHNOLOGY, INC.* 60,000 3,667,500
37,325,471
ELECTRICAL EQUIPMENT - 1.0%
SYMBOL TECHNOLOGIES, INC. 25,000 1,350,000
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONICS - INSTRUMENT - 5.0%
CYTYC CORP.* 53,600 $2,860,900
VARIAN, INC.* 39,900 1,840,388
WATERS CORP.* 16,000 1,997,000
6,698,288
ELECTRONICS - SEMICONDUCTORS - 6.1%
DALLAS SEMICONDUCTOR CORP. 38,400 1,564,800
LATTICE SEMICONDUCTOR CORP.* 39,100 2,702,788
MICROCHIP TECHNOLOGY, INC.* 44,700 2,604,473
PMC - SIERRA, INC.* 8,000 1,421,500
8,293,561
EQUIPMENT - SEMICONDUCTORS - 3.1%
LAM RESEARCH CORP.* 30,000 1,125,000
PRI AUTOMATION, INC.* 46,200 3,021,047
4,146,047
HEALTHCARE - DRUG-MAJOR PHARAMICAL - 4.8%
KING PHARMACEUTICALS, INC.* 90,000 3,948,750
UNITED THERAPEUTICS CORP.* 23,100 2,503,463
6,452,213
HEALTHCARE - MEDICAL PRODUCTS & SUPPLIES - 3.5%
ALPHARMA, INC. 32,700 2,035,575
MINIMED, INC.* 22,900 2,702,200
4,737,775
HEALTHCARE - DRUG-GENERAL - 4.0%
ALZA CORP.* 29,850 1,764,881
SEPRACOR, INC.* 30,800 3,715,250
5,480,131
MACHINERY - DIVERSIFIED - 1.0%
METTLER TOLEDO INTERNATIONAL, INC.* 33,300 1,332,000
OIL & GAS - 4.4%
BJ SERVICES CO.* 30,900 1,931,250
ROWAN CO.'S, INC.* 85,800 2,606,175
VARCO INTERNATIONAL, INC.* 62,272 1,447,824
5,985,249
RESTAURANTS - 2.2%
OUTBACK STEAKHOUSE, INC.* 100,000 2,925,000
RETAIL - GENERAL MERCHENDISE - 1.3%
BJ'S WHOLESALE CLUB, INC.* 53,000 1,749,000
RETAIL - SPECIALTY - 0.7%
MICHAELS STORES, INC.* 19,900 911,669
SERVICES - ADVERTISING/MARKETING - 1.3%
YOUNG & RUBICAM, INC. 31,700 1,812,844
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - COMMERCE & CONSUMABLE - 3.1%
GETTY IMAGES, INC.* 51,700 $1,916,131
TELETECH HOLDINGS, INC.* 75,000 2,329,688
4,245,819
SERVICES - DATA PROCESS - 4.1%
BISYS GROUP, INC.* 46,100 2,835,150
FACTSET RESEARCH SYSTEMS, INC. 66,800 1,887,100
FISERV, INC.* 19,900 860,675
5,582,925
TELECOMM - CELL/WIRELESS - 0.6%
TELECORP PCS, INC* 20,000 806,250
TELECOMM - LONG DISTANCE - 4.0%
ITC DELTACOM, INC.* 80,500 1,796,156
TIME WARNER TELECOM, INC.* 57,000 3,669,375
5,465,531
TOTAL EQUITY SECURITIES (COST $101,105,393 ) 121,691,985
PRINCIPAL
COMMERCIAL PAPER - 8.9% AMOUNT
BAUS FUNDING, 6.64%, 7/14/00 $2,400,000 2,394,245
COUNTRYWIDE HOME LOANS, INC., 6.78%, 7/14/00
3,100,000 3,092,410
FAYETTE, 6.67%, 7/21/00 3,100,000 3,088,513
FORD MOTOR CO., 6.55%, 7/11/00 3,000,000 2,994,542
NEPTUNE CORP., 6.80%, 7/24/00 500,000 497,828
TOTAL COMMERCIAL PAPER (COST $12,067,538 ) 12,067,538
TOTAL INVESTMENTS (COST $113,172,931) - 98.7% 133,759,523
OTHER ASSETS AND LIABILITIES, NET - 1.3% 1,755,054
NET ASSETS - 100% $135,514,577
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MIDCAP GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 89.0% SHARES VALUE
BROADCAST - TV, RADIO, CABLE - 0.5%
UNIVISION COMMUNICATIONS, INC.* 4,900 $507,150
CHEMICALS - SPECIALTY - 1.2%
ATMI, INC.* 28,300 1,315,950
COMMUNICATIONS EQUIPMENT - 1.1%
EFFICIENT NETWORKS, INC.* 16,500 1,213,781
COMPUTERS - SOFTWARE & SERVICES - 10.0%
AMDOCS, LTD.* 13,500 1,036,125
ARIBA, INC.* 4,000 392,187
ART TECHNOLOGY GROUP, INC.* 7,300 736,844
CNET NETWORKS, INC.* 56,200 1,380,413
COMMERCE ONE, INC.* 12,000 544,687
EBAY, INC.* 40,600 2,205,088
I2 TECHNOLOGIES, INC.* 4,400 458,769
INTUIT, INC.* 66,000 2,730,750
KANA COMMUNICATIONS, INC.* 9,700 600,187
PRICELINE.COM, INC.* 12,500 474,805
10,559,855
DISTRIBUTORS - FOOD & HEALTH - 1.1%
AMERISOURCE HEALTH CORP.* 36,200 1,122,200
ELECTRICAL EQUIPMENT - 2.7%
FLEXTRONICS INTERNATIONAL LTD.* 5,500 377,781
SANMINA CORP.* 12,740 1,089,270
SPX CORP.* 6,800 822,375
VISHAY INTERTECHNOLOGY, INC.* 15,000 569,063
2,858,489
ELECTRONICS - INSTRUMENTS - 3.3%
WATERS CORP.* 27,900 3,482,269
ELECTRONICS - SEMICONDUCTORS - 11.6%
ALTERA CORP.* 25,900 2,640,181
AMKOR TECHNOLOGY, INC.* 9,400 331,938
LINEAR TECHNOLOGY CORP. 49,900 3,190,481
MAXIM INTEGRATED PRODUCTS, INC.* 37,800 2,568,037
MICROCHIP TECHNOLOGY, INC.* 60,900 3,548,377
12,279,014
EQUIPMENT - SEMICONDUCTORS - 3.5%
ASM LITHOGRAPHY HOLDING NV* 19,800 873,675
TERADYNE, INC.* 39,213 2,882,156
3,755,831
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
HEALTHCARE - DIVERSIFIED - 0.6%
ALLERGAN, INC. 8,700 $648,150
HEALTHCARE - GENERAL, OTHER - 3.6%
ALZA CORP.* 63,650 3,763,306
HEALTHCARE - DRUGS - MAJOR PHARMACEUTICALS - 6.7%
FOREST LABORATORIES, INC.* 42,800 4,322,800
KING PHARMACEUTICALS, INC.* 62,400 2,737,800
7,060,600
INVESTMENT BANKING / BROKERAGE - 2.5%
LEHMAN BROTHERS HOLDINGS, INC. 4,950 468,084
PAINE WEBBER GROUP, INC. 48,500 2,206,750
2,674,834
LEISURE TIME - PRODUCTS - 1.7%
HARLEY-DAVIDSON, INC. 46,900 1,805,650
MACHINERY - DIVERSIFIED - 1.3%
DOVER CORP. 35,300 1,431,856
MANUFACTURING - DIVERSIFIED - 4.3%
JABIL CIRCUIT, INC.* 24,250 1,203,406
MILLIPORE CORP. 23,000 1,733,625
SEALED AIR CORP.* 30,100 1,576,488
4,513,519
OIL & GAS - DRILLING & EQUIPMENT - 10.8%
BJ SERVICES CO.* 58,000 3,625,000
COOPER CAMERON CORP.* 46,233 3,051,378
NABORS INDUSTRIES, INC.* 87,900 3,653,344
SANTA FE INTERNATIONAL CORP. 30,000 1,048,125
11,377,847
OIL & GAS - EXPLORATION & PRODUCTION - 2.0%
DEVON ENERGY CORP. 25,700 1,444,019
EOG RESOURCES, INC. 18,600 623,100
2,067,119
RAILROADS - 3.3%
KANSAS CITY SOUTHERN INDUSTRIES, INC. 39,200 3,476,550
RESTAURANTS - 6.5%
OUTBACK STEAKHOUSE, INC.* 111,600 3,264,300
STARBUCKS CORP.* 93,200 3,559,075
6,823,375
RETAIL - COMPUTERS & ELECTRONICS - 2.5%
BEST BUY CO., INC.* 41,900 2,650,175
RETAIL - SPECIALTY - 0.8%
BED BATH & BEYOND, INC.* 24,300 880,875
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - ADVERTISING / MARKETING - 2.3%
YOUNG & RUBICAM, INC. 4,220 $2,413,312
SERVICES - COMMERCIAL & CONSUMER - 0.9%
DIAMOND TECHNOLOGY PARTNERS, INC.* 6,500 572,000
VIAD CORP. 15,000 408,750
980,750
SERVICES - COMPUTER SYSTEMS - 0.5%
INVESTMENT TECHNOLOGY GROUP, INC.* 11,650 495,853
SERVICES - DATA PROCESSING - 3.3%
CSG SYSTEMS INTERNATIONAL* 10,900 611,081
FISERV, INC.* 67,300 2,910,725
3,521,806
TELEPHONE - 0.4%
BROADWING, INC. 16,500 427,969
TOTAL EQUITY SECURITIES (COST $75,591,046) 94,108,085
PRINCIPAL
COMMERCIAL PAPER - 12.5% AMOUNT
CORPORACION ANDINA, 6.52%, 7/6/00 $1,700,000 1,698,460
COUNTRYWIDE HOME LOANS, INC., 6.78%, 7/14/00
2,900,000 2,892,900
FORD MOTOR CORP., 6.55%, 7/11/00 1,600,000 1,597,089
HOMESIDE LENDING CO., 6.52%, 7/6/00 1,500,000 1,498,642
NEPTUNE FUNDING CORP., 6.80%, 7/24/00 3,600,000 3,584,360
REPSOL INTERNATIONAL FINANCIAL CORP., 6.55%, 7/17/00
2,000,000 1,994,178
TOTAL COMMERCIAL PAPER (COST $13,265,629) 13,265,629
TOTAL INVESTMENTS (COST $88,856,675) - 101.5% 107,373,714
OTHER ASSETS AND LIABILITIES, NET - (1.5)% (1,595,761)
NET ASSETS - 100% $105,777,953
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
EMERGING GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 98.7% SHARES VALUE
BANKS - 0.6%
COMERICA, INC. 4,700 $210,913
FIRST TENNESSEE NATIONAL CORP. 100 1,656
MELLON FINANCIAL CORP. 6,300 229,556
PNC FINANCIAL SERVICES GROUP 5,000 234,375
STATE STREET CORP. 700 74,244
750,744
BEVERAGES - ALCOHOLIC - 0.2%
ANHEUSER-BUSCH COMPANIES, INC. 3,400 253,938
BEVERAGES - NON-ALCOHOLIC - 0.2%
COCA-COLA CO. 5,100 292,931
BIOTECHNOLOGY - 1.5%
ABGENIX, INC.* 700 83,902
AMGEN, INC.* 13,800 969,450
BIOSOURCE INTERNATIONAL, INC.* 8,000 178,000
HUMAN GENOME SCIENCES, INC.* 1,000 133,375
IMMUNEX CORP.* 10,400 514,150
MEDIMMUNE, INC.* 2,800 207,200
2,086,077
BROADCAST - TV, RADIO & CABLE - 0.8%
AT&T - LIBERTY MEDIA GROUP * 22,200 538,350
CLEAR CHANNEL COMMUNICATIONS * 4,800 360,000
USA NETWORKS, INC.* 11,800 255,175
1,153,525
CHEMICALS - SPECIALTY - 0.0%
ATMI, INC.* 100 4,650
BIOSPHERE MEDICAL, INC.* 200 2,800
7,450
COMMUNICATIONS EQUIPMENT - 15.3%
ADC TELECOMMUNICATIONS, INC.* 16,492 1,383,266
ALCATEL SA 4,600 305,900
CIENA CORP.* 16,500 2,750,344
COMVERSE TECHNOLOGY, INC.* 3,900 362,700
CORNING, INC. 14,100 3,805,237
LUCENT TECHNOLOGIES, INC. 1,200 71,100
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
COMMUNICATIONS EQUIPMENT - CONT'D
METROMEDIA FIBER NETWORK, INC.* 44,220 $1,754,981
MOTOROLA, INC. 1,900 55,219
NOKIA OYJ 39,500 1,972,531
NORTEL NETWORKS CORP. 78,260 5,341,245
ONI SYSTEMS CORP* 190 22,269
SCIENTIFIC-ATLANTA, INC. 200 14,900
SYCAMORE NETWORKS, INC.* 6,500 717,438
TELEFONAKTIEBOLAGET LM ERICSSON (ADR) 65,400 1,308,000
TELLABS, INC.* 16,500 1,129,219
20,994,349
COMPUTERS - HARDWARE - 3.0%
BROCADE COMMUNICATIONS SYSTEM * 1,900 348,620
COMPAQ COMPUTER CORP. 7,200 184,050
DELL COMPUTER CORP.* 9,300 458,606
EMULEX CORP.* 1,100 72,256
JUNIPER NETWORKS, INC.* 6,600 960,713
MRV COMMUNICATIONS, INC.* 2,100 141,225
SUN MICROSYSTEMS, INC.* 20,900 1,900,594
4,066,064
COMPUTERS - NETWORKING - 6.1%
CABLETRON SYSTEMS * 6,700 169,175
CISCO SYSTEMS, INC.* 129,800 8,250,413
8,419,588
COMPUTERS - PERIPHERALS - 1.9%
EMC CORP. * 31,700 2,438,919
SEAGATE TECHNOLOGY, INC.* 3,200 176,000
STORAGE NETWORKS, INC.* 230 20,757
2,635,676
COMPUTERS - SOFTWARE & SERVICES - 21.7%
AKAMAI TECHNOLOGIES, INC.* 1,200 142,481
AMDOCS LTD * 400 30,700
ARIBA, INC.* 800 78,438
ART TECHNOLOGY GROUP, INC.* 400 40,375
BMC SOFTWARE, INC.* 27,000 985,078
BEA SYSTEMS, INC.* 700 34,606
CADENCE DESIGN SYSTEMS, INC.* 7,000 142,625
COMPUTER ASSOCIATES INTERNATIONAL, INC. 12,500 639,844
E.PIPHANY, INC* 900 96,469
FOUNDRY NETWORKS, INC.* 800 88,000
IMRGLOBAL CORP. * 800 10,450
INTERNET COMMERCE CORP.* 300 4,350
I2 TECHNOLOGIES, INC.* 1,800 187,678
LIGHTSPAN, INC.* 210 1,155
MERCURY INTERACTIVE CORP.* 2,400 232,200
MICROSOFT CORP.* 62,200 4,976,000
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
COMPUTERS - SOFTWARE & SERVICES - CONT'D
ORACLE CORP.* 191,300 $16,081,156
REDBACK NETWORKS* 2,200 391,600
SAP AG (ADR) 600 28,162
SIEBEL SYSTEMS, INC.* 5,000 817,813
VERITAS SOFTWARE CORP.* 10,200 1,152,759
VERISIGN, INC.* 13,248 2,338,184
CHECK POINT SOFTWARE TECHNOLOGIES * 6,100 1,291,675
29,791,798
CONSUMER FINANCE - 0.3%
HOUSEHOLD INTERNATIONAL, INC. 4,900 203,656
PROVIDIAN FINANCIAL CORP. 2,400 216,000
419,656
DISTRIBUTORS - FOOD & HEALTH - 0.3%
ALLSCRIPTS PHARMACEUTICALS, INC * 200 4,600
ANDRX CORP.* 1,000 63,922
CARDINAL HEALTH, INC. 4,600 340,400
408,922
ELECTRICAL EQUIPMENT - 1.9%
CAPSTONE TURBINE CORP.* 150 6,844
EMERSON ELECTRIC CO. 1,200 72,450
FLEXTRONICS INTERNATIONAL LTD.* 11,400 783,037
GENERAL ELECTRIC COMPANY 13,700 726,100
SANMINA CORP.* 7,320 625,860
SOLECTRON CORP.* 9,500 397,813
2,612,104
ELECTRONICS - INSTRUMENT - 0.2%
CREDENCE SYSTEMS CORP.* 200 11,037
LTX CORP.* 400 13,975
WATERS CORP.* 1,500 187,219
212,231
ELECTRONICS - SEMICONDUCTORS - 16.7%
ALTERA CORP.* 35,000 3,567,813
ANALOG DEVICES, INC.* 26,400 2,006,400
ARM HOLDINGS PLC (ADR)* 47,000 1,545,125
ATMEL CORP.* 7,700 283,937
BURR-BROWN CORP.* 150 13,003
CONEXANT SYSTEMS, INC.* 3,600 175,050
INTEL CORP. 30,700 4,104,206
JDS UNIPHASE CORP.* 7,770 931,429
LSI LOGIC CORP.* 16,900 914,712
LINEAR TECHNOLOGY CORP. 12,500 799,219
MAXIM INTEGRATED PRODUCTS* 200 13,588
MICREL, INC.* 200 8,687
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONICS - SEMICONDUCTORS - CONT'D
MICROCHIP TECHNOLOGY, INC.* 150 $8,740
MICRON TECHNOLOGY, INC.* 52,300 4,605,669
NATIONAL SEMICONDUCTOR CORP.* 15,000 851,250
NEW FOCUS, INC* 90 7,391
PMC - SIERRA, INC.* 2,100 373,144
SDL, INC.* 500 142,594
SIPEX CORP.* 800 22,150
TEXAS INSTRUMENTS, INC. 1,500 103,031
XILINX, INC.* 30,400 2,509,900
22,987,038
ENGINEERING & CONSTRUCTION - 0.8%
BOUYGUES SA (EUR) 1,700 1,136,093
QUANTA SERVICES, INC.* 300 16,500
1,152,593
ENTERTAINMENT - 0.6%
VIACOM, INC.* 11,600 790,975
EQUIPMENT - SEMICONDUCTORS - 1.2%
APPLIED MATERIALS, INC.* 6,500 589,062
LAM RESEARCH CORP.* 10,300 386,250
NOVELLUS SYSTEMS, INC.* 1,400 79,188
PHOTRONICS, INC.* 100 2,838
TERADYNE, INC.* 7,700 565,950
1,623,288
FINANCIAL - DIVERSIFIED - 1.2%
AMERICAN EXPRESS COMPANY 4,400 229,350
BIOTECH HOLDERS TRUST 3,000 534,000
CITIGROUP, INC. 13,800 831,450
1,594,800
HEALTHCARE - DIVERSIFIED - 0.8%
ABBOTT LABORATORIES 15,300 681,806
ALLERGAN, INC. 2,800 208,600
AMERICAN HOME PRODUCTS CORP. 2,600 152,750
1,043,156
HEALTHCARE - DRUGS - 1.4%
ALZA CORP.* 1,300 76,863
SEPRACOR, INC.* 14,900 1,797,312
1,874,175
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
HEALTHCARE - MAJOR PHARMACEUTICALS - 2.0%
ALKERMES, INC. * 200 $9,425
GENENTECH, INC* 5,100 877,200
MEDIGENE AG 180 7,218
PFIZER, INC. 29,275 1,405,200
PHARMACIA CORP. 2,700 139,556
TEVA PHARMACEUTICAL 5,000 277,187
2,715,786
HEALTHCARE - MEDICAL PRODUCTS & SUPLIES - 1.0%
BAUSCH & LOMB, INC. 3,300 255,338
PE CORP.-PE BIOSYSTEMS GROUP 13,200 869,550
CONDUCTUS, INC.* 6,400 126,400
QUEST DIAGNOSTICS, INC.* 1,000 71,562
1,322,850
INSURANCE - MULTI-LINE - 0.5%
AMERICAN INTERNATIONAL GROUP 4,100 481,750
HARTFORD FINANCIAL SERVICES 3,700 206,969
688,719
INVESTMENT BANKING / BROKERAGE - 0.9%
AXA FINANCIAL, INC. 7,600 258,400
MERRILL LYNCH & CO. 8,200 943,000
WADDELL & REED FINANCIAL, INC. 150 4,922
1,206,322
LEISURE TIME - PRODUCTS - 0.0%
INTERNATIONAL SPEEDWAY CORP. 200 8,275
MANUFACTURING - DIVERSIFIED - 3.5%
JABIL CIRCUIT, INC.* 1,700 84,362
MARVELL TECHNOLOGY GROUP LTD* 100 5,700
TYCO INTERNATIONAL LTD. 100,400 4,756,450
4,846,512
NATURAL GAS - 1.0%
COASTAL CORP. 10,500 639,187
DYNEGY, INC. 5,500 375,719
ENRON CORP. 6,000 387,000
1,401,906
OFFICE EQUIPMENT & SUPPLIES - 0.0%
UNITED STATIONERS, INC.* 200 6,475
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
OIL & GAS - DRILL & EQUIPMENT - 1.2%
BAKER HUGHES, INC. 16,400 $524,800
GLOBAL MARINE, INC.* 7,600 214,225
GRANT PRIDECO, INC * 3,000 75,000
HALLIBURTON CO. 4,600 217,063
NOBLE DRILLING CORP.* 8,300 341,856
TRANSOCEAN SEDCO FOREX, INC. 3,600 192,375
WEATHERFORD INTERNATIONAL, INC.* 3,000 119,437
1,684,756
OIL & GAS - EXPLORATION & PRODUCTION - 1.3%
ANADARKO PETROLEUM CORP. 7,100 350,119
APACHE CORP. 4,200 247,012
DEVON ENERGY CORP. 3,200 179,800
EOG RESOURCES, INC. 30,000 1,005,000
NOBLE AFFILIATES, INC. 1,500 55,875
1,837,806
POWER PRODUCERS - INDEPENDENT - 1.9%
AES CORP.* 15,800 720,875
CALPINE CORP.* 27,900 1,834,425
2,555,300
RETAIL - DRUG STORES - 0.2%
ALBERTSON'S, INC. 8,100 269,325
CVS CORP. 500 20,000
289,325
RETAIL - COMPUTER & ELECTRONIC - 0.4%
RADIOSHACK CORPORATION 12,100 573,238
RETAIL - DEPT STORES - 0.7%
KOHLS CORP.* 1,300 72,313
WAL-MART STORES, INC. 15,400 887,425
959,738
RETAIL - HOME SHOPPING - 0.0%
INSIGHT ENTERPRISES, INC.* 100 5,931
SAVINGS & LOAN COMPANIES - 0.2%
CHARTER ONE FINANCIAL, INC. 2,800 64,400
GOLDEN WEST FINANCIAL CORP. 5,800 236,712
301,112
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - COMMERCIAL & CONSUMER - 0.8%
CENDANT CORP.* 4,000 $56,000
COMPUTER SCIENCES CORP.* 9,700 724,469
LEARNING TREE INTERNATIONAL* 5,200 318,500
PEGASUS SOLUTIONS, INC.* 150 1,631
1,100,600
SERVICES - DATA PROCESS - 1.0%
AUTOMATIC DATA PROCESSING 16,900 905,206
FIRST DATA CORP. 9,100 451,588
FISERV, INC.* 1,600 69,200
1,425,994
TELECOMMUNICATION - CELL/WIRELESS - 3.4%
CHINA MOBIL (HKD) 1,600 14,111
NEXTEL COMMUNICATIONS, INC.* 5,500 336,531
SPRINT CORP. (PCS GROUP)* 25,400 1,511,300
VODAFONE AIRTOUCH (GBP) 189,605 766,000
VODAFONE AIRTOUCH PLC 11,700 484,819
VOICESTREAM WIRELESS CORP.* 13,921 1,618,969
4,731,730
TELECOMMUNICATION - LONG DISTANCE - 2.0%
GLOBAL CROSSING LTD.* 15,500 407,844
ITC DELTACOM, INC.* 200 4,462
INTERMEDIA COMMUNICATIONS* 200 5,950
MGC COMMUNICATIONS INC.* 2,100 125,869
NEXTLINK COMMUNICATIONS* 800 30,350
SONERA OYJ (EUR) 11,700 533,367
SPRINT CORP. (FON GROUP) 9,800 499,800
WORLDCOM, INC.* 26,400 1,211,100
2,818,742
TOBACCO - 0.0%
PHILIP MORRIS COMPANIES, INC. 1,800 47,812
TOTAL EQUITY SECURITIES (COST $110,055,517) 135,700,007
<PAGE>
U. S. GOVERNMENT AGENCIES PRINCIPAL
AND INSTRUMENTALITIES - 2.6% AMOUNT VALUE
FEDERAL HOME LOAN MORTGAGE CORP. DISCOUNT NOTES.
$3,500,000 $3,498,723
TOTAL U. S. GOVERNMENT AGENCIES
AND INSTRUMENTALIES (COST $3,498,723) 3,498,723
TOTAL INVESTMENTS (COST $113,554,240) - 101.3% 139,198,730
OTHER ASSETS AND LIABILITIES, NET - (1.3%) (1,776,087)
NET ASSETS - 100% $137,422,643
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
RESEARCH PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 96.7% SHARES VALUE
AEROSPACE / DEFENSE - 1.7%
BAE SYSTEMS, PLC (GBP) 28,000 $174,551
BOEING CO. 6,000 250,875
GENERAL DYNAMICS CORP. 1,440 75,240
500,666
ALUMINUM - 0.2%
ALCOA, INC. 2,200 63,800
BANKS - MAJOR REGIONAL - 1.3%
CHASE MANHATTAN CORP. 3,960 182,407
PNC FINANCIAL SERVICES GROUP 2,300 107,813
STATE STREET CORP. 100 10,606
U.S. BANCORP 3,800 73,150
373,976
BEVERAGES - ALCOHOLIC - 0.8%
ANHEUSER-BUSCH CO.'S, INC. 3,040 227,050
BROADCAST - 1.3%
COMCAST CORP.* 3,740 151,470
INFINITY BROADCASTING CORP.* 6,085 221,722
373,192
CHEMICALS - 0.3%
ROHM & HAAS CO. 2,800 96,600
COMMUNICATIONS EQUIPMENT - 8.2%
CIENA CORP.* 2,000 333,375
COMVERSE TECHNOLOGY, INC.* 2,600 241,800
CORNING, INC. 1,963 529,765
METROMEDIA FIBER NETWORK, INC.* 8,460 335,756
MOTOROLA, INC.* 9,496 275,978
NORTEL NETWORKS CORP.* 9,000 614,250
TELLABS, INC.* 1,300 88,968
2,419,892
COMPUTERS - HARDWARE - 4.3%
ANCOR COMMUNICATIONS, INC.* 785 28,076
COMPAQ COMPUTER CORP. 3,900 99,694
DELL COMPUTER CORP.* 2,120 104,543
HEWLETT-PACKARD CO. 2,510 313,435
INTERNATIONAL BUSINESS MACHINES CORP. 410 44,921
SUN MICROSYSTEMS, INC.* 7,550 686,578
1,277,247
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
COMPUTERS - NETWORKING - 3.5%
CABLETRON SYSTEMS* 3,400 $85,850
CISCO SYSTEMS, INC.* 15,060 957,251
1,043,101
COMPUTERS - PERIPHERALS - 3.2%
EMC CORP.* 9,900 761,681
SEAGATE TECHNOLOGY, INC.* 3,030 166,650
928,331
COMPUTERS - SOFTWARE & SERVICES - 8.9%
AMERICA ONLINE, INC.* 4,420 233,155
BEA SYSTEMS, INC.* 820 40,539
BMC SOFTWARE, INC.* 2,960 107,994
BUSINESS OBJECTS SA* (ADR) 200 17,625
COMPUTER ASSOCIATES INTERNATIONAL, INC. 2,010 102,887
DIGIMARC CORP.* 70 2,695
E.PIPHANY, INC.* 400 42,875
I2 TECHNOLOGIES, INC.* 700 72,986
INTERWORLD CORP.* 200 4,100
LIBERATE TECHNOLOGIES* 1,010 29,605
MACROMEDIA, INC.* 1,140 110,224
MICROSOFT CORP.* 10,320 825,600
ORACLE CORP.* 5,470 459,822
RATIONAL SOFTWARE CORP.* 680 63,197
SELECTICA, INC.* 240 16,815
SIEBEL SYSTEMS, INC.* 390 63,789
VERISIGN, INC.* 1,320 232,980
VERITAS SOFTWARE CORP.* 1,595 180,260
2,607,148
CONSUMER FINANCE - 0.9%
CAPITAL ONE FINANCIAL CORP. 2,530 112,901
PROVIDIAN FINANCIAL CORP. 1,720 154,800
267,701
CONTAINERS - 0.1%
OWENS-ILLINOIS, INC.* 3,450 40,322
ELECTRICAL EQUIPMENT - 3.8%
GENERAL ELECTRIC CO. 14,460 766,380
HITACHI, LTD. (JPY) 5,000 72,098
SCI SYSTEMS, INC.* 1,000 39,188
SOLECTRON CORP.* 3,400 142,375
SPX CORP.* 700 84,656
1,104,697
ELECTRONICS - SEMICONDUCTORS - 7.7%
ANALOG DEVICES, INC.* 2,100 159,600
ATMEL CORP.* 3,100 114,313
FAIRCHILD SEMICONDUCTOR INTERNATIONAL, INC.* 1,450 58,725
FLEXTRONICS INTERNATIONAL, LTD.* 2,856 196,171
INTEL CORP. 8,910 1,191,156
LSI LOGIC CORP.* 2,200 119,075
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONICS - SEMICONDUCTORS - CONT'D
MICRON TECHNOLOGY, INC.* 4,740 $417,416
2,256,456
ENTERTAINMENT - 1.8%
TIME WARNER, INC. 3,140 238,640
VIACOM, INC.* 4,153 283,183
521,823
EQUIPMENT - SEMICONDUCTORS - 1.0%
LAM RESEARCH CORP.* 3,900 146,250
TERADYNE, INC.* 2,000 147,000
293,250
FINANCIAL - DIVERSIFIED - 2.9%
ASSOCIATES FIRST CAPITAL CORP. 9,240 206,167
CITIGROUP, INC. 5,950 358,488
FEDERAL HOME LOAN MORTGAGE CORP. 3,920 158,760
HSBC HOLDINGS (GBP) 7,400 84,593
LLOYDS TSB GROUP, PLC (GBP) 34 321
MORGAN STANLEY DEAN WITTER & CO.* 700 58,275
866,604
FOODS - 0.2%
QUAKER OATS CO. 410 30,801
RALSTON PURINA GROUP 1,520 30,305
61,106
HEALTHCARE - DIVERSIFIED - 2.6%
AMERICAN HOME PRODUCTS CORP. 4,220 247,925
BRISTOL-MYERS SQUIBB CO. 8,860 516,095
764,020
HEALTHCARE - DRUG - MAJOR PHARMACEUTICAL - 3.8%
ASTRAZENECA GROUP, PLC (GBP) 2,780 129,768
PFIZER, INC. 6,875 330,000
PHARMACIA CORP. 12,513 646,766
1,106,534
HEALTHCARE - MEDICAL PRODUCTS & SUPPLIES - 1.3%
BAUSCH & LOMB, INC. 2,000 154,750
MEDTRONIC, INC. 4,490 223,658
378,408
HOUSEHOLD PRODUCTS - NON-DURABLE - 1.4%
CLOROX CO. 3,840 172,080
COLGATE-PALMOLIVE CO. 3,750 224,531
ENERGIZER HOLDINGS, INC.* 506 9,235
405,846
INSURANCE - LIFE & HEALTH - 0.2%
AFLAC, INC. 1,200 55,125
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
INSURANCE - MULTI-LINE - 1.5%
AMERICAN INTERNATIONAL GROUP 2,430 $285,525
HARTFORD FINANCIAL SERVICES GROUP 2,730 152,709
438,234
INSURANCE BROKERS - 0.4%
MARSH & MCLENNAN CO.'S 1,110 115,926
INSURANCE - LIFE & HEALTH - 0.3%
METLIFE, INC.* 4,920 103,627
INSURANCE - PROPERTY & CASUALTY - 0.1%
ST. PAUL CO.'S 1,300 44,363
INVESTMENT BANKING / BROKERAGE - 1.4%
AXA FINANCIAL, INC. 4,570 155,380
LEHMAN BROTHERS HOLDINGS, INC. 700 66,194
MERRILL LYNCH & CO. 1,540 177,100
398,674
MACHINERY - DIVERSIFIED - 4.2%
DEERE & CO. 4,320 159,840
INGERSOLL-RAND CO. 3,250 130,813
TYCO INTERNATIONAL, LTD. 16,040 759,895
UNITED TECHNOLOGIES CORP. 3,020 177,803
1,228,351
NATURAL GAS - 0.4%
WILLIAMS CO.'S, INC. 2,600 108,388
OFFICE EQUIPMENT & SUPPLIES - 0.1%
TRINTECH GROUP PLC* (ADR) 1,400 27,584
OIL & GAS - EXPLORATION & PRODUCTION - 4.0%
BAKER HUGHES, INC. 3,100 99,200
COOPER CAMERON CORP.* 450 29,700
DEVON ENERGY CORP. 1,010 56,749
EOG RESOURCES, INC. 3,840 128,640
GLOBAL MARINE, INC.* 8,700 245,231
NOBLE DRILLING CORP. 3,400 140,037
SANTA FE INTERNATIONAL CORP. 3,000 104,813
TRANSOCEAN SEDCO FOREX, INC. 4,550 243,141
WEATHERFORD INTERNATIONAL, INC.* 3,100 123,419
1,170,930
OIL - DOMESTIC INTEGRATED - 1.1%
CONOCO, INC. 13,610 334,296
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
OIL - INTERNATIONAL INTEGRATED - 4.3%
BP AMOCO PLC (ADR) 7,058 $399,241
EXXON MOBIL CORP. 6,544 513,704
ROYAL DUTCH PETROLEUM CO. (EUR) 4,400 273,464
TOTAL FINA (EUR) * 420 64,396
1,250,806
PAPER & FOREST PRODUCTS - 0.2%
BOWATER, INC. 1,330 58,686
POWER - PRODUCERS - 0.7%
AES CORP.* 4,620 210,788
PUBLISHING - NEWSPAPERS - 0.4%
TRIBUNE CO. 3,240 113,400
RESTAURANTS - 0.6%
MCDONALD'S CORP. 5,460 179,839
RETAIL - DRUG STORES - 1.7%
CVS CORP. 12,290 491,600
RITE AID CORP.* 630 4,134
495,734
RETAIL - FOOD CHAINS - 1.7%
SAFEWAY, INC.* 10,930 493,216
RETAIL - COMPUTER & ELECTRONIC - 0.8%
RADIOSHACK CORP. 5,210 246,824
RETAIL - GENERAL MERCHANDISE - 0.7%
WAL-MART STORES, INC. 3,740 215,518
RETAIL - SPECIALTY APPAREL - 0.6%
OFFICE DEPOT, INC.* 13,210 82,562
FAST RETAILING CO., LTD. (JPY) 200 83,691
166,253
SERVICES - COMMERCIAL & CONSUMER - 1.0%
COMPUTER SCIENCES CORP.* 4,000 298,750
SERVICES - DATA PROCESS - 1.2%
AUTOMATIC DATA PROCESSING, INC. 5,100 273,169
FISERV, INC.* 2,000 86,500
359,669
TELECOMMUNICATIONS - CELL / WIRELESS - 1.3%
SPRINT CORP. (PCS GROUP)* 6,620 393,889
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
TELECOMMUNICATIONS - LONG DISTANCE - 6.0%
ALLEGIANCE TELECOM, INC.* 300 $19,200
FLAG TELECOM HOLDINGS LTD.* 4,380 65,152
GLOBAL CROSSING, LTD.* 10,370 272,861
INTERMEDIA COMMUNICATIONS, INC.* 480 14,280
LEVEL 3 COMMUNICATIONS, INC.* 900 79,200
NIPPON TELEGRAPH & TELEPHONE CORP. (JPY) 13 172,753
QWEST COMMUNICATIONS INTERNATIONAL* 4,120 204,713
SPRINT CORP. (FON GROUP) 5,740 292,740
TIME WARNER TELECOM, INC.* 500 32,187
VERIZON COMMUNICATIONS* 2,630 133,637
VODAFONE AIRTOUCH (GBP) 28,413 114,789
WINSTAR COMMUNICATIONS, INC.* 435 14,736
WORLDCOM, INC.* 7,330 336,264
1,752,512
TRUCKERS - 0.6%
KONINKLIJKE KPN NV (EUR) 3,828 171,218
TOTAL EQUITY SECURITIES (COST $25,210,302) 28,410,369
U.S. GOVERNMENT AGENCIES PRINCIPAL
AND INSTRUMENTALITIES - 2.4% AMOUNT
FEDERAL HOME LOAN MORTGAGE CORP. DISCOUNT NOTES,
6.57%, 7/3/00 $700,000 699,745
TOTAL U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES
(COST $699,745) 699,745
TOTAL INVESTMENTS (COST $25,910,047 ) - 99.1% 29,110,114
OTHER ASSETS AND LIABILITIES, NET - 0.9% 266,567
NET ASSETS - 100% $29,376,681
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
GROWTH WITH INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 96.5% SHARES VALUE
AEROSPACE / DEFENSE - 1.2%
BOEING CO. 6,090 $254,638
GENERAL DYNAMICS CORP. 2,650 138,463
393,101
AUTO PARTS & EQUIPMENT - 0.4%
DELPHI AUTOMOTIVE SYSTEMS CORP. 3,900 56,794
FEDERAL-MOGUL CORP. 200 1,912
TRW, INC. 2,040 88,485
VISTEON CORP. 134 1,619
148,810
AUTOMOBILES - 0.1%
FORD MOTOR CO. 1,020 43,860
BANKS - MAJOR REGIONAL - 3.1%
COMERICA, INC. 1,210 54,299
NORTHERN TRUST CORP. 410 26,676
STATE STREET CORP. 5,010 531,373
U.S. BANCORP 10,210 196,542
WELLS FARGO CO. 5,800 224,750
1,033,640
BEVERAGES - ALCOHOLIC - 0.7%
ANHEUSER-BUSCH CO.'S, INC. 3,350 250,203
BEVERAGES - NON-ALCOHOLIC - 0.8%
COCA-COLA CO. 3,980 228,601
PEPSICO, INC. 1,030 45,771
274,372
CHEMICALS - 1.2%
AIR PRODUCTS & CHEMICALS, INC. 4,270 131,569
AKZO NOBEL NV (EUR) 2,420 102,812
DU PONT (E.I.) DE NEMOURS & CO. 480 21,000
ROHM & HAAS CO. 4,670 161,115
416,496
COMMUNICATIONS EQUIPMENT - 6.3%
CORNING, INC. 2,690 725,964
MOTOROLA, INC. 12,585 365,752
NOKIA OYJ 2,480 123,845
NORTEL NETWORKS CORP. 10,830 739,147
TELLABS, INC.* 2,920 199,838
2,154,546
COMPUTERS - HARDWARE - 4.8%
COMPAQ COMPUTER CORP. 3,660 93,559
DELL COMPUTER CORP.* 4,760 234,727
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
COMPUTERS - HARDWARE - CONT'D
HEWLETT-PACKARD CO. 6,100 $761,737
INTERNATIONAL BUSINESS MACHINES CORP. 1,730 189,543
SUN MICROSYSTEMS, INC.* 4,000 363,750
1,643,316
COMPUTERS - NETWORKING - 2.4%
CABLETRON SYSTEMS, INC.* 4,680 118,170
CISCO SYSTEMS, INC.* 11,130 707,451
825,621
COMPUTERS - PERIPHERALS - 0.6%
EMC CORP.* 2,490 191,574
COMPUTERS - SOFTWARE & SERVICES - 4.4%
BMC SOFTWARE, INC.* 1,400 51,078
COMPUTER ASSOCIATES INTERNATIONAL, INC. 3,880 198,608
MICROSOFT CORP.* 10,020 801,600
ORACLE CORP.* 3,590 301,784
RATIONAL SOFTWARE CORP.* 950 88,291
VERITAS SOFTWARE CORP.* 570 64,419
1,505,780
CONSUMER FINANCE - 0.2%
PROVIDIAN FINANCIAL CORP. 630 56,700
ELECTRIC COMPANIES - 2.9%
CMS ENERGY CORP. 3,710 82,084
GPU, INC. 2,390 64,679
NISOURCE, INC. 3,900 72,638
PECO ENERGY CORP. 7,070 285,009
PINNACLE WEST CAPITAL CORP. 3,530 119,579
TXU CORP. 7,820 233,385
UNICOM CORP. 3,160 122,253
979,627
ELECTRICAL EQUIPMENT - 4.1%
EMERSON ELECTRIC CO. 3,720 224,595
GENERAL ELECTRIC CO. 22,160 1,174,480
1,399,075
ELECTRONICS - COMPONENT DISTRIBUTION - 0.2%
GRAINGER (W.W.), INC. 2,440 75,183
ELECTRONICS - INSTRUMENTS - 0.1%
AGILENT TECHNOLOGIES, INC.* 456 33,630
ELECTRONICS - SEMICONDUCTORS - 3.6%
INTEL CORP. 7,730 1,033,404
NATIONAL SEMICONDUCTOR CORP.* 2,780 157,765
TEXAS INSTRUMENTS, INC. 380 26,101
1,217,270
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ENTERTAINMENT - 1.5%
TIME WARNER, INC. 5,030 $382,280
VIACOM, INC.* 1,960 133,648
515,928
FINANCIAL - DIVERSIFIED - 3.2%
AMERICAN EXPRESS CORP. 3,350 174,619
ASSOCIATES FIRST CAPITAL CORP. 1,670 37,262
CITIGROUP, INC. 3,420 206,055
FEDERAL HOME LOAN MORTGAGE CORP. 9,020 365,310
FEDERAL NATIONAL MORTGAGE ASSN. 3,040 158,650
HSBC HOLDINGS (GBP) 5,590 63,902
ING GROEP NV (EUR) 1,148 77,597
1,083,395
FOODS - 2.1%
BESTFOODS 2,520 174,510
NESTLE SA (CHF) 87 174,128
QUAKER OATS CO. 3,720 279,465
RALSTON PURINA CO. 4,370 87,127
715,230
HEALTHCARE - DIVERSIFIED - 3.0%
AMERICAN HOME PRODUCTS CORP. 3,350 196,813
BRISTOL-MYERS SQUIBB CO. 10,110 588,907
JOHNSON & JOHNSON 2,320 236,350
1,022,070
HEALTHCARE - DRUG - MAJOR PHARMACEUTICAL - 6.4%
ASTRAZENECA GROUP, PLC (GBP) 2,880 134,436
PFIZER, INC. 23,525 1,129,200
PHARMACIA CORP. 13,774 711,944
SCHERING-PLOUGH CORP. 4,080 206,040
2,181,620
HEALTHCARE - MANAGED CARE - 0.5%
UNITED HEALTH GROUP, INC. 2,050 175,787
HEALTHCARE - MEDICAL PRODUCTS & SUPPLIES - 1.4%
BAUSCH & LOMB, INC. 1,860 143,917
MEDTRONIC, INC. 6,170 307,343
PE BIOSYSTEMS GROUP 390 25,691
476,951
HOUSEHOLD PRODUCTS - NON-DURABLE - 1.6%
CLOROX CO. 3,060 137,126
COLGATE-PALMOLIVE CO. 5,290 316,739
ENERGIZER HOLDINGS, INC.* 1,446 26,390
PROCTER & GAMBLE CO. 1,290 73,852
554,107
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
INSURANCE - LIFE & HEALTH - 0.4%
LINCOLN NATIONAL CORP. 1,750 $63,219
TORCHMARK CORP. 3,440 84,925
148,144
INSURANCE - MULTI-LINE - 2.6%
AMERICAN INTERNATIONAL GROUP, INC. 2,780 326,650
HARTFORD FINANCIAL SERVICES 9,720 543,712
870,362
INSURANCE - PROPERTY & CASUALTY - 0.6%
ALLSTATE CORP. 1,860 41,385
MBIA, INC. 1,760 84,810
ST. PAUL CO.'S 1,810 61,766
187,961
INSURANCE BROKERS - 0.5%
MARSH & MCLENNAN CO.'S. 1,620 169,189
INVESTMENT BANKING / BROKERAGE - 0.6%
AXA FINANCIAL, INC. 5,530 188,020
MERRILL LYNCH & CO. 250 28,750
216,770
MACHINERY - DIVERSIFIED - 1.2%
DEERE & CO. 7,470 276,390
INGERSOLL-RAND CO. 3,250 130,812
407,202
MANUFACTURING - DIVERSIFIED - 3.8%
GLOBAL CROSSING, LTD.* 600 130,200
HONEYWELL INTERNATIONAL, INC. 1,770 59,627
TYCO INTERNATIONAL, LTD. 9,010 426,849
UNITED TECHNOLOGIES CORP. 11,150 656,456
1,273,132
NATURAL GAS - 1.9%
COASTAL CORP. 6,690 407,254
ENRON CORP. 1,230 79,335
WILLIAMS CO.'S, INC. 3,910 162,998
649,587
OIL & GAS - EXPLORATION & PRODUCTION - 1.1%
BAKER HUGHES, INC. 6,200 198,400
GLOBAL MARINE, INC.* 1,670 47,073
TRANSOCEAN SEDCO FOREX, INC. 2,300 122,906
368,379
OIL - DOMESTIC INTEGRATED - 1.0%
CONOCO, INC. 11,220 275,591
USX-MARATHON GROUP, INC. 1,870 46,867
322,458
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
OIL - INTERNATIONAL INTEGRATED - 6.5%
ROYAL DUTCH PETROLEUM CO. (EUR) 5,750 $357,368
BP AMOCO PLC (ADR) 15,372 869,479
CHEVRON CORP. 1,580 134,004
EXXON MOBIL CORP. 10,972 861,302
2,222,153
PAPER & FOREST PRODUCTS - 0.1%
WEYERHAEUSER CO. 800 34,400
PERSONAL CARE - 0.3%
GILLETTE CO. 3,070 107,258
PUBLISHING - NEWSPAPERS - 2.0%
GANNETT CO., INC. 4,230 253,007
NEW YORK TIMES CO. 6,120 241,740
TRIBUNE CO. 4,910 171,850
666,597
RAILROADS - 0.2%
CANADIAN NATIONAL RAILWAY CO. 2,361 68,912
RESTAURANTS - 0.2%
MCDONALD'S CORP. 2,310 76,086
RETAIL - DRUG STORES - 1.2%
CVS CORP. 10,110 404,400
RETAIL - FOOD CHAINS - 2.7%
KROGER CO.* 6,930 152,893
SAFEWAY, INC.* 16,770 756,746
909,639
RETAIL - GENERAL MERCHANDISE - 1.6%
TARGET CORP. 320 18,560
WAL-MART STORES, INC. 9,090 523,811
542,371
RETAIL - SPECIALTY APPAREL - 0.1%
FAST RETAILING CO., LTD. (JPY) 100 41,845
SERVICES - COMMERCIAL & CONSUMER - 0.7%
CINTAS CORP. 3,200 117,400
REUTERS GROUP PLC (ADR) 1,110 110,931
228,331
SERVICES - COMPUTER SYSTEMS - 0.6%
COMPUTER SCIENCES CORP.* 2,610 194,934
ELECTRONIC DATA SYSTEMS 70 2,887
197,821
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
SERVICES - DATA PROCESSING - 2.6%
AUTOMATIC DATA PROCESSING, INC. 7,370 $394,756
DST SYSTEMS, INC.* 2,690 204,776
FIRST DATA CORP. 5,710 283,359
882,891
TELECOMMUNICATIONS - CELL / WIRELESS - 2.0%
SPRINT CORP. (PCS GROUP)* 2,420 143,990
VERIZON COMMUNICATIONS 10,220 519,304
663,294
TELECOMMUNICATIONS - LONG DISTANCE - 2.5%
GLOBAL CROSSING LTD.* 2,090 54,993
NIPPON TELEGRAPH & TELEPHONE CORP. (JPY) 5 66,444
QWEST COMMUNICATIONS INTERNATIONAL* 920 45,712
SPRINT CORP. (FON GROUP) 4,840 246,840
VODAFONE AIRTOUCH (GBP) 33,659 135,981
WORLDCOM, INC.* 6,550 300,481
850,451
TELEPHONE - 2.2%
ALLTEL CORP. 4,860 301,016
BELLSOUTH CORP. 1,780 75,873
BROADWING, INC. 3,340 86,631
SBC COMMUNICATIONS, INC. 6,960 301,020
764,540
TOBACCO - 0.2%
PHILIP MORRIS COMPANIES, INC. 2,300 61,094
TRUCKERS - 0.3%
KONINKLIJKE KPN NV (EUR) 2,102 94,018
TOTAL EQUITY SECURITIES (COST $31,038,064) 32,797,177
PRINCIPAL
CORPORATE SECURITIES - 0.4% AMOUNT
BELL ATLANTIC FINANCIAL SERVICES, INC., 4.25%, 9/15/05
$40,800 49,673
NTL, INC., 5.75%, 12/15/09 95,000 75,201
TRANSOCEAN SEDCO FOREX, INC., 5/24/20 30,000 18,037
TOTAL CORPORATE SECURITIES (COST $154,511) 142,911
U.S. GOVERNMENT AGENCIES
AND INSTRUMENTALITIES - 3.2%
FEDERAL HOME LOAN MORTGAGE CORP. DISCOUNT NOTES, 6.57%, 7/3/00
1,100,000 1,099,599
TOTAL U.S. GOVERMENT AGENCIES AND INSTRUMENTALITIES
COST $1,099,599) 1,099,599
TOTAL INVESTMENTS (COST $32,292,174) - 100.1% 34,039,687
OTHER ASSETS AND LIABILITIES, NET - (0.1%) (16,677)
NET ASSETS - 100% $34,023,010
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INDEX 500 PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
EQUITY SECURITIES - 97.0% SHARES VALUE
AEROSPACE / DEFENSE - 0.5%
BOEING CO. 14,500 $606,281
GENERAL DYNAMICS CORP. 3,100 161,975
GOODRICH (B.F.) CO. 1,700 57,906
LOCKHEED MARTIN CORP. 6,400 158,800
NORTHROP GRUMMAN CORP. 1,100 72,875
1,057,837
AGRICULTURAL PRODUCTS - 0.0%
ARCHER-DANIELS-MIDLAND CO. 10,000 98,125
AIR FREIGHT - 0.1%
FEDEX CORP.* 4,500 171,000
AIRLINES - 0.2%
AMR CORP.* 2,400 63,450
DELTA AIR LINES, INC. 1,900 96,069
SOUTHWEST AIRLINES CO. 7,900 149,606
US AIRWAYS GROUP, INC.* 1,000 39,000
348,125
ALUMINUM - 0.2%
ALCAN ALUMINIUM, LTD. 3,600 111,600
ALCOA, INC. 13,720 397,880
509,480
AUTO PARTS & EQUIPMENT - 0.2%
COOPER TIRE & RUBBER CO. 1,200 13,350
DANA CORP. 2,200 46,612
DELPHI AUTOMOTIVE SYSTEMS CORP. 8,900 129,606
GENUINE PARTS CO. 2,800 56,000
GOODYEAR TIRE & RUBBER CO. 2,500 50,000
SNAP-ON, INC. 1,000 26,625
TRW, INC. 2,000 86,750
VISTEON CORP. 2,501 30,322
439,265
AUTOMOBILES - 0.6%
FORD MOTOR CO. 19,100 821,300
GENERAL MOTORS CORP. 8,572 497,712
1,319,012
BANKS - MAJOR REGIONAL - 2.9%
AMSOUTH BANCORP. 6,400 100,800
BANK OF NEW YORK CO., INC. 11,700 544,050
BANK ONE CORP. 18,200 483,438
BB&T CORP. 5,600 133,700
COMERICA, INC. 2,500 112,188
FIFTH THIRD BANCORP. 5,000 316,250
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
FIRSTAR CORP. 15,500 $326,469
FLEET BOSTON FINANCIAL CORP. 14,400 489,600
HUNTINGTON BANCSHARES, INC. 3,300 52,181
KEYCORP 6,900 121,613
MELLON FINANCIAL CORP. 7,700 280,569
NATIONAL CITY CORP. 9,700 165,506
NORTHERN TRUST CORP. 3,500 227,719
OLD KENT FINANCIAL CORP. 2,205 58,984
PNC FINANCIAL SERVICES GROUP, INC. 4,600 215,625
REGIONS FINANCIAL CORP. 3,600 71,550
SOUTHTRUST CORP. 2,700 61,087
STATE STREET CORP. 2,600 275,763
SUMMIT BANCORP. 3,000 73,875
SUNTRUST BANKS, INC. 4,800 219,300
SYNOVUS FINANCIAL CORP. 4,600 81,075
U.S. BANCORP. 11,800 227,150
UNION PLANTERS CORP. 2,300 64,256
WACHOVIA CORP. 3,200 173,600
WELLS FARGO & CO. 25,500 988,125
5,864,473
BANKS - MONEY CENTER - 1.3%
BANK OF AMERICA CORP. 26,300 1,130,900
CHASE MANHATTAN CORP. 19,550 900,522
FIRST UNION CORP. 15,700 389,556
J.P. MORGAN & CO. 2,600 286,325
2,707,303
BEVERAGES - ALCOHOLIC - 0.3%
ADOLPH COORS CO. 600 36,300
ANHEUSER-BUSCH COMPANIES, INC. 7,200 537,750
BROWN-FORMAN CORP. 1,100 59,125
633,175
BEVERAGES - NON-ALCOHOLIC - 1.7%
COCA-COLA CO. 39,300 2,257,294
COCA-COLA ENTERPRISES 7,000 114,187
PEPSICO, INC. 22,800 1,013,175
3,384,656
BIOTECHNOLOGY - 0.7%
AMGEN, INC.* 16,200 1,138,050
BIOGEN, INC.* 2,400 154,800
MEDIMMUNE, INC.* 3,200 236,800
1,529,650
BROADCAST - TELEVISION, RADIO, CABLE - 0.8%
CLEAR CHANNEL COMMUNICATIONS, INC.* 5,400 405,000
COMCAST CORP.* 14,300 579,150
MEDIAONE GROUP, INC.* 9,800 649,875
1,634,025
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
BUILDING MATERIALS - 0.1%
ARMSTRONG HOLDINGS, INC. 600 $9,187
MASCO CORP. 7,300 131,856
OWENS CORNING 900 8,325
149,368
CHEMICALS - 1.0%
AIR PRODUCTS & CHEMICALS, INC. 3,500 107,844
DOW CHEMICAL CO. 10,500 316,969
DU PONT (E.I.) DE NEMOURS & CO. 16,600 726,250
EASTMAN CHEMICAL CO. 1,300 62,075
ECOLAB, INC. 2,100 82,031
ENGELHARD CORP. 2,000 34,125
FMC CORP.* 500 29,000
GREAT LAKES CHEMICAL CORP. 900 28,350
HERCULES, INC. 1,700 23,906
INTERNATIONAL FLAVORS & FRAGRANCES, INC. 1,700 51,319
PPG INDUSTRIES, INC. 2,700 119,644
PRAXAIR, INC. 2,600 97,338
ROHM & HAAS CO. 3,600 124,200
SIGMA-ALDRICH CORP. 1,300 38,025
UNION CARBIDE CORP. 2,200 108,900
W.R. GRACE & CO.* 1,100 13,337
1,963,313
COMPUTERS - HARDWARE - 5.2%
APPLE COMPUTER, INC.* 5,000 261,875
COMPAQ COMPUTER CORP. 26,800 685,075
DELL COMPUTER CORP.* 40,900 2,016,881
GATEWAY, INC.* 5,000 283,750
HEWLETT-PACKARD CO. 15,900 1,985,512
INTERNATIONAL BUSINESS MACHINES CORP. 28,100 3,078,706
NCR CORP.* 1,500 58,406
SUN MICROSYSTEMS, INC.* 25,200 2,291,625
10,661,830
COMPUTERS - NETWORKING - 3.8%
3COM CORP.* 5,400 311,175
CABLETRON SYSTEMS, INC.* 2,800 70,700
CISCO SYSTEMS, INC.* 110,200 7,004,588
NETWORK APPLIANCE, INC.* 4,800 386,400
7,772,863
COMPUTERS - PERIPHERALS - 1.5%
EMC CORP.* 34,400 2,646,650
LEXMARK INTERNATIONAL, INC.* 2,100 141,225
SEAGATE TECHNOLOGY, INC.* 3,700 203,500
2,991,375
COMPUTERS - SOFTWARE & SERVICES - 7.8%
ADOBE SYSTEMS, INC. 1,900 247,000
AMERICA ONLINE, INC.* 36,500 1,925,375
AUTODESK, INC. 900 31,219
BMC SOFTWARE, INC.* 3,900 142,289
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
COMPUTERS - SOFTWARE & SERVICES - CONT'D
CITRIX SYSTEMS, INC.* 3,000 $56,812
COMPUTER ASSOCIATES INTERNATIONAL, INC. 9,300 476,044
COMPUWARE CORP.* 5,900 61,213
MERCURY INTERACTIVE CORP.* 1,300 125,775
MICROSOFT CORP.* 83,400 6,672,000
NOVELL, INC.* 5,300 49,025
ORACLE CORP.* 45,000 3,782,812
PARAMETRIC TECHNOLOGY CORP.* 4,400 48,400
PEOPLESOFT, INC.* 4,400 73,700
SIEBEL SYSTEMS, INC.* 3,100 507,044
UNISYS CORP.* 5,100 74,269
VERITAS SOFTWARE CORP.* 6,200 700,697
YAHOO, INC.* 8,600 1,065,325
16,038,999
CONSTRUCTION MATERIALS - 0.0%
VULCAN MATERIALS CO. 1,600 68,300
CONSUMER FINANCE - 0.5%
CAPITAL ONE FINANCIAL CORP. 3,200 142,800
COUNTRYWIDE CREDIT, INC. 1,800 54,563
HOUSEHOLD INTERNATIONAL, INC. 7,400 307,562
MBNA CORP. 12,700 344,487
PROVIDIAN FINANCIAL CORP. 2,300 207,000
1,056,412
CONSUMER JEWELRY, NOVELTY, GIFTS - 0.0%
AMERICAN GREETINGS CORP. 900 17,100
CONTAINERS - METAL & GLASS - 0.0%
BALL CORP. 500 16,094
CROWN CORK & SEAL CO., INC. 2,000 30,000
OWENS-ILLINOIS, INC.* 2,400 28,050
74,144
CONTAINERS & PACKAGING - 0.0%
BEMIS CO. 900 30,262
PACTIV CORP.* 2,900 22,837
TEMPLE-INLAND, INC. 900 37,800
90,899
DISTRIBUTORS - FOOD & HEALTH - 0.3%
CARDINAL HEALTH, INC. 4,400 325,600
MCKESSON HBOC, INC. 4,600 96,312
SUPERVALU, INC. 2,300 43,844
SYSCO CORP. 5,400 227,475
693,231
ELECTRIC COMPANIES - 1.4%
AMEREN CORP. 2,200 74,250
AMERICAN ELECTRIC POWER CO. 5,000 148,125
CAROLINA POWER & LIGHT CO. 2,600 83,038
CINERGY CORP. 2,600 66,137
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRIC COMPANIES - CONT'D
CMS ENERGY CORP. 1,800 $39,825
CONSOLIDATED EDISON, INC. 3,400 100,725
CONSTELLATION ENERGY GROUP, INC. 2,400 78,150
DOMINION RESOURCES, INC. 3,816 163,592
DTE ENERGY CO. 2,300 70,294
DUKE ENERGY CORP. 5,800 326,975
EDISON INTERNATIONAL 5,300 108,650
ENTERGY CORP. 3,600 97,875
FIRSTENERGY CORP. 3,800 88,825
FLORIDA PROGRESS CORP. 1,600 75,000
FPL GROUP, INC. 2,900 143,550
GPU, INC. 2,000 54,125
NEW CENTURY ENERGIES, INC. 1,900 57,000
NIAGARA MOHAWK HOLDINGS, INC.* 3,100 43,206
NORTHERN STATES POWER CO. 2,500 50,469
PECO ENERGY CO. 2,700 108,844
PG&E CORP. 6,300 155,138
PINNACLE WEST CAPITAL CORP. 1,400 47,425
PPL CORP. 2,300 50,456
PUBLIC SERVICE ENTERPRISE GROUP SERVICES CORP. 3,400 117,725
RELIANT ENERGY, INC. 4,800 141,900
SOUTHERN CO. 10,200 237,787
TXU CORP. 4,100 120,950
UNICOM CORP. 2,800 108,325
2,958,361
ELECTRICAL EQUIPMENT - 4.7%
AMERICAN POWER CONVERSION CORP.* 3,100 126,519
COOPER INDUSTRIES, INC. 1,500 48,844
EMERSON ELECTRIC CO. 6,800 410,550
GENERAL ELECTRIC CO. 156,800 8,310,400
MOLEX, INC. 3,025 145,578
ROCKWELL INTERNATIONAL CORP. 3,100 97,650
SANMINA CORP.* 2,300 196,650
SOLECTRON CORP.* 9,400 393,625
THOMAS & BETTS CORP. 900 17,213
9,747,029
ELECTRONICS - COMPONENT DISTRIBUTOR - 0.0%
GRAINGER (W.W.), INC. 1,500 46,219
ELECTRONICS - DEFENSE - 0.1%
RAYTHEON CO. 5,200 100,100
ELECTRONICS - INSTRUMENTS - 0.3%
AGILENT TECHNOLOGIES, INC.* 7,178 529,377
PERKINELMER, INC. 700 46,288
TEKTRONIX, INC. 700 51,800
627,465
ELECTRONICS - SEMICONDUCTORS - 6.0%
ADAPTEC, INC.* 1,700 38,675
ADVANCED MICRO DEVICES, INC.* 2,400 185,400
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
ELECTRONICS - SEMICONDUCTORS - CONT'D
ALTERA CORP.* 3,100 $316,006
ANALOG DEVICES, INC.* 5,500 418,000
CONEXANT SYSTEMS, INC.* 3,500 170,187
INTEL CORP. 53,100 7,098,806
LINEAR TECHNOLOGY CORP. 5,000 319,688
LSI LOGIC CORP.* 4,700 254,387
MAXIM INTEGRATED PRODUCTS, INC.* 4,400 298,925
MICRON TECHNOLOGY, INC.* 8,800 774,950
NATIONAL SEMICONDUCTOR CORP.* 2,800 158,900
TEXAS INSTRUMENTS, INC. 26,000 1,785,875
XILINX, INC.* 5,100 421,069
12,240,868
ENGINEERING & CONSTRUCTION - 0.0%
FLUOR CORP. 1,200 37,950
MCDERMOTT INTERNATIONAL, INC. 900 7,931
45,881
ENTERTAINMENT - 2.4%
SEAGRAM CO., LTD. 6,900 400,200
TIME WARNER, INC. 20,800 1,580,800
VIACOM, INC.* 24,132 1,645,467
WALT DISNEY (HOLDINGS) CO. 32,900 1,276,931
4,903,398
EQUIPMENT - SEMICONDUCTORS - 1.2%
APPLIED MATERIALS, INC.* 12,800 1,160,000
BROADCOM CORP.* 3,500 766,281
KLA-TENCOR CORP.* 2,800 163,975
NOVELLUS SYSTEMS, INC.* 2,100 118,781
TERADYNE, INC.* 2,700 198,450
2,407,487
FINANCIAL - DIVERSIFIED - 3.6%
AMERICAN EXPRESS CO. 21,100 1,099,838
ASSOCIATES FIRST CAPITAL CORP. 11,400 254,362
CITIGROUP, INC. 53,600 3,229,400
FEDERAL HOME LOAN MORTGAGE CORP. 15,900 829,781
FEDERAL NATIONAL MORTGAGE ASSN. 11,100 449,550
MORGAN STANLEY DEAN WITTER & CO. 18,000 1,498,500
SLM HOLDING CORP. 2,600 97,338
7,458,769
FOODS - 1.2%
BESTFOODS 4,400 304,700
CAMPBELL SOUP CO. 6,600 192,225
CONAGRA, INC. 7,600 144,875
GENERAL MILLS, INC. 4,700 179,775
HEINZ (H.J.) CO. 5,600 245,000
HERSHEY FOODS CORP. 2,200 106,700
KELLOGG CO. 6,600 196,350
NABISCO GROUP HOLDINGS CORP. 5,200 134,875
QUAKER OATS CO. 2,100 157,762
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
FOODS - CONT'D
RALSTON PURINA GROUP 4,900 $97,694
SARA LEE CORP. 13,600 262,650
UNILEVER N.V. (ADR) 9,100 391,300
WRIGLEY (WM.) JR. CO. 1,800 144,338
2,558,244
FOOTWEAR - 0.1%
NIKE, INC. 4,300 171,194
REEBOK INTERNATIONAL, LTD.* 900 14,344
185,538
GAMING, LOTTERY, PARIMUTUAL - 0.0%
HARRAH'S ENTERTAINMENT, INC.* 2,100 43,969
GOLD AND PRECIOUS METALS MINING - 0.1%
BARRICK GOLD CORP. 6,200 112,762
HOMESTAKE MINING CO. 4,300 29,563
NEWMONT MINING CORP. 2,900 62,712
PLACER DOME, INC. 5,200 49,725
254,762
HARDWARE & TOOLS - 0.0%
BLACK & DECKER CORP. 1,400 55,038
STANLEY WORKS 1,400 33,250
88,288
HEALTHCARE - DIVERSIFIED - 3.2%
ABBOTT LABORATORIES 24,700 1,100,694
ALLERGAN, INC. 2,100 156,450
AMERICAN HOME PRODUCTS CORP. 20,600 1,210,250
BRISTOL-MYERS SQUIBB CO. 31,300 1,823,225
JOHNSON & JOHNSON 22,100 2,251,437
MALLINCKRODT, INC. 1,100 47,781
6,589,837
HEALTHCARE - DRUGS - GENERAL, OTHER - 0.1%
ALZA CORP.* 1,700 100,513
WATSON PHARMACEUTICAL, INC.* 1,600 86,000
186,513
HEALTHCARE - DRUGS - MAJOR PHARMACEUTICALS - 5.6%
ELI LILLY & CO. 17,900 1,787,762
MERCK & CO., INC. 36,500 2,796,813
PFIZER, INC. 99,775 4,789,200
PHARMACIA CORP. 20,077 1,037,730
SCHERING-PLOUGH CORP. 23,100 1,166,550
11,578,055
HEALTHCARE - HOSPITAL MANAGEMENT - 0.2%
HCA - THE HEALTHCARE CO. 8,800 267,300
TENET HEALTHCARE CORP. 5,100 137,700
405,000
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
HEALTHCARE - LONGTERM CARE - 0.0%
MANOR CARE, INC.* 1,700 $11,900
HEALTHCARE - MANAGED CARE - 0.2%
AETNA, INC. 2,200 141,212
HUMANA, INC.* 2,600 12,675
UNITED HEALTH GROUP, INC. 2,600 222,950
WELLPOINT HEALTH NETWORKS* 1,000 72,438
449,275
HEALTHCARE - MEDICAL PRODUCTS & SUPPORT - 1.1%
BARD (C.R.), INC. 800 38,500
BAUSCH & LOMB, INC. 900 69,637
BAXTER INTERNATIONAL, INC. 4,600 323,438
BECTON DICKINSON & CO. 4,100 117,619
BIOMET, INC. 1,900 73,031
BOSTON SCIENTIFIC CORP.* 6,600 144,787
GUIDANT CORP.* 4,800 237,600
HEALTHSOUTH CORP.* 5,800 41,687
MEDTRONIC, INC. 18,900 941,456
PE BIOSYSTEMS GROUP 3,200 210,800
QUINTILES TRANSNATIONAL CORP.* 1,900 26,838
ST. JUDE MEDICAL, INC.* 1,300 59,638
2,285,031
HOMEBUILDING - 0.0%
CENTEX CORP. 1,000 23,500
KAUFMAN & BROAD HOME CORP. 800 15,850
PULTE CORP. 600 12,975
52,325
HOUSEHOLD FURNITURE & APPLIANCES - 0.1%
LEGGETT & PLATT, INC. 3,200 52,800
MAYTAG CORP. 1,300 47,938
WHIRLPOOL CORP. 1,200 55,950
156,688
HOUSEHOLD PRODUCTS - NON-DURABLE - 1.2%
CLOROX CO. 3,800 170,287
COLGATE-PALMOLIVE CO. 9,100 544,863
FORT JAMES CORP. 3,200 74,000
KIMBERLY-CLARK CORP. 8,800 504,900
PROCTER & GAMBLE CO. 20,700 1,185,075
2,479,125
HOUSEWARES - 0.1%
FORTUNE BRANDS, INC. 2,600 59,962
NEWELL RUBBERMAID, INC. 4,200 108,150
TUPPERWARE CORP. 900 19,800
187,912
INSURANCE - LIFE / HEALTH - 0.4%
AFLAC, INC. 4,200 192,938
AMERICAN GENERAL CORP. 3,900 237,900
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
INSURANCE - LIFE / HEALTH - CONT'D
CONSECO, INC. 5,200 $50,700
JEFFERSON-PILOT CORP. 1,700 95,944
LINCOLN NATIONAL CORP. 2,900 104,762
TORCHMARK CORP. 2,100 51,844
UNUMPROVIDENT CORP. 3,900 78,244
812,332
INSURANCE - MULTI-LINE - 1.7%
AMERICAN INTERNATIONAL GROUP 24,400 2,867,000
CIGNA CORP. 2,600 243,100
HARTFORD FINANCIAL SERVICES, INC. 3,400 190,188
LOEWS CORP. 1,600 96,000
3,396,288
INSURANCE - PROPERTY / AUTOMOBILE - 0.5%
ALLSTATE CORP. 11,900 264,775
CHUBB CORP. 2,800 172,200
CINCINNATI FINANCIAL CORP. 2,700 84,881
MBIA, INC. 1,600 77,100
MGIC INVESTMENT CORP. 1,700 77,350
PROGRESSIVE CORP. 1,200 88,800
SAFECO CORP. 2,000 39,750
ST. PAUL CO.'S 3,500 119,437
924,293
INSURANCE BROKERS - 0.3%
AON CORP. 4,200 130,463
MARSH & MCLENNAN CO.'S. 4,300 449,081
579,544
INVESTMENT BANKING / BROKERAGE - 0.9%
BEAR STEARNS CO.'S, INC. 1,785 74,301
LEHMAN BROTHERS HOLDINGS, INC. 1,900 179,669
MERRILL LYNCH & CO. 6,200 713,000
PAINE WEBBER GROUP, INC. 2,300 104,650
SCHWAB (CHARLES) CORP. 21,300 716,212
1,787,832
INVESTMENT MANAGEMENT - 0.1%
FRANKLIN RESOURCES, INC. 3,700 112,388
PRICE (T. ROWE) ASSOCIATES 1,900 80,750
193,138
IRON / STEEL - 0.1%
ALLEGHENY TECHNOLOGIES, INC. 1,450 26,100
BETHLEHEM STEEL CORP.* 1,800 6,412
NUCOR CORP. 1,400 46,463
USX-U.S. STEEL GROUP, INC. 1,500 27,844
WORTHINGTON INDUSTRIES, INC. 1,400 14,700
121,519
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
LEISURE TIME - PRODUCTS - 0.2%
BRUNSWICK CORP. 1,500 $24,844
HARLEY-DAVIDSON, INC. 4,700 180,950
HASBRO, INC. 2,900 43,681
MATTEL, INC. 6,700 88,356
337,831
LODGING - HOTELS - 0.2%
CARNIVAL CORP. 9,800 191,100
HILTON HOTELS CORP. 6,000 56,250
MARRIOTT INTERNATIONAL, INC. 3,900 140,644
387,994
MACHINERY-DIVERSIFIED - 0.3%
CATERPILLAR, INC. 5,600 189,700
DEERE & CO. 3,700 136,900
DOVER CORP. 3,300 133,856
INGERSOLL-RAND CO. 2,600 104,650
TIMKEN CO. 900 16,762
581,868
MANUFACTURING - DIVERSIFIED - 1.7%
CRANE CO. 1,000 24,313
DANAHER CORP. 2,300 113,706
EATON CORP. 1,200 80,400
HONEYWELL INTERNATIONAL, INC. 12,637 425,709
ILLINOIS TOOL WORKS, INC. 4,700 267,900
ITT INDUSTRIES, INC. 1,400 42,525
JOHNSON CONTROLS, INC. 1,400 71,837
MINNESOTA MINING & MANUFACTURING CO. 6,200 511,500
NATIONAL SERVICE INDUSTRIES, INC. 700 13,650
PARKER HANNIFIN CORP. 1,900 65,075
TEXTRON, INC. 2,300 124,919
THERMO ELECTRON CORP.* 2,600 54,762
TYCO INTERNATIONAL, LTD. 26,800 1,269,650
UNITED TECHNOLOGIES CORP. 7,500 441,563
3,507,509
MANUFACTURING - SPECIALIZED - 0.1%
AVERY DENNISON CORP. 1,800 120,825
BRIGGS & STRATTON CORP. 400 13,700
MILLIPORE CORP. 700 52,762
PALL CORP. 2,000 37,000
SEALED AIR CORP.* 1,400 73,325
297,612
METALS-DIVERSIFIED - 0.1%
FREEPORT-MCMORAN COPPER & GOLD, INC.* 2,700 24,975
INCO, LTD.* 3,000 46,125
PHELPS DODGE CORP. 1,300 48,344
119,444
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
NATURAL GAS - 0.8%
COASTAL CORP. 3,300 $200,888
COLUMBIA ENERGY GROUP 1,300 85,312
EASTERN ENTERPRISES 400 25,200
EL PASO ENERGY CORP. 3,700 188,469
ENRON CORP. 11,600 748,200
NICOR, INC. 700 22,838
ONEOK, INC. 500 12,969
PEOPLES ENERGY CORP. 600 19,425
SEMPRA ENERGY 3,200 54,400
WILLIAMS CO.'S., INC. 6,800 283,475
1,641,176
OFFICE EQUIPMENT & SUPPLIES - 0.1%
PITNEY BOWES, INC. 4,200 168,000
OIL - DOMESTIC INTEGRATED - 0.4%
AMERADA HESS CORP. 1,400 86,450
CONOCO, INC. 9,800 240,713
OCCIDENTAL PETROLEUM CORP. 6,000 126,375
PHILLIPS PETROLEUM CO. 4,000 202,750
USX-MARATHON GROUP, INC. 5,100 127,819
784,107
OIL - INTERNATIONAL INTEGRATED - 3.8%
CHEVRON CORP. 10,400 882,050
EXXON MOBIL CORP. 55,125 4,327,313
ROYAL DUTCH PETROLEUM CO. (ADR) 34,000 2,093,125
TEXACO, INC. 8,800 468,600
7,771,088
OIL & GAS - DRILLING & EQUIPMENT - 0.7%
BAKER HUGHES, INC. 5,400 172,800
HALLIBURTON CO. 7,000 330,312
ROWAN CO.'S, INC.* 1,500 45,563
SCHLUMBERGER, LTD. 9,100 679,087
TRANSOCEAN SEDCO FOREX, INC. 3,381 180,672
1,408,434
OIL & GAS - EXPLORATION & PRODUCTION - 0.3%
ANADARKO PETROLEUM CORP. 2,000 98,625
APACHE CORP. 1,700 99,981
BURLINGTON RESOURCES, INC. 3,500 133,875
KERR-MCGEE CORP. 1,400 82,513
UNION PACIFIC RESOURCES GROUP, INC. 3,900 85,800
UNOCAL CORP. 3,700 122,562
623,356
OIL & GAS - REFINERY & MARKETING - 0.1%
ASHLAND, INC. 1,200 42,075
SUNOCO, INC. 1,500 44,156
TOSCO CORP. 2,300 65,119
151,350
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
PAPER & FOREST PRODUCTS - 0.3%
BOISE CASCADE CORP. 900 $23,287
GEORGIA-PACIFIC GROUP 2,800 73,500
INTERNATIONAL PAPER CO. 7,831 233,462
LOUISIANA-PACIFIC CORP. 1,600 17,400
MEAD CORP. 1,800 45,450
POTLATCH CORP. 400 13,250
WESTVACO CORP. 1,600 39,700
WEYERHAEUSER CO. 3,700 159,100
WILLAMETTE INDUSTRIES, INC. 1,800 49,050
654,199
PERSONAL CARE - 0.4%
ALBERTO-CULVER CO. 900 27,506
AVON PRODUCTS, INC. 3,800 169,100
GILLETTE CO. 16,700 583,456
780,062
PHOTOGRAPHY / IMAGING - 0.3%
EASTMAN KODAK CO. 5,000 297,500
POLAROID CORP. 800 14,450
XEROX CORP. 10,500 217,875
529,825
POWER PRODUCERS - INDEPENDENT - 0.2%
AES CORP.* 6,800 310,250
PUBLISHING - 0.1%
HARCOURT GENERAL, INC. 1,200 65,250
MCGRAW-HILL COMPANIES, INC. 3,100 167,400
MEREDITH CORP. 800 27,000
259,650
PUBLISHING - NEWSPAPERS - 0.3%
DOW JONES & CO., INC. 1,400 102,550
GANNETT CO., INC. 4,200 251,212
KNIGHT RIDDER, INC. 1,200 63,825
NEW YORK TIMES CO. 2,800 110,600
TRIBUNE CO. 4,997 174,912
703,099
RAILROADS - 0.3%
BURLINGTON NORTHERN SANTA FE CORP. 6,800 155,975
CSX CORP. 3,500 74,156
KANSAS CITY SOUTHERN INDUSTRIES, INC. 1,800 159,638
NORFOLK SOUTHERN CORP. 6,200 92,225
UNION PACIFIC CORP. 3,800 141,312
623,306
RESTARAURANTS - 0.5%
DARDEN RESTAURANTS, INC. 2,100 34,125
MCDONALD'S CORP. 21,300 701,569
STARBUCKS CORP.* 3,000 114,563
TRICON GLOBAL RESTAURANTS, INC.* 2,500 70,625
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
RESTARAURANTS - CONT'D
WENDY'S INTERNATIONAL, INC. 1,900 $33,844
954,726
RETAIL - BUILDING SUPPLIES - 1.0%
HOME DEPOT, INC. 36,700 1,832,706
LOWE'S CO.'S, INC. 6,000 246,375
SHERWIN-WILLIAMS CO. 2,600 55,087
2,134,168
RETAIL - COMPUTERS & ELECTRONICS - 0.2%
BEST BUY CO., INC.* 3,300 208,725
CIRCUIT CITY STORES, INC. 3,300 109,519
RADIOSHACK CORP. 3,000 142,125
460,369
RETAIL - DEPARTMENT STORES - 0.3%
DILLARDS, INC. 1,600 19,600
FEDERATED DEPARTMENT STORES, INC.* 3,300 111,375
KOHLS CORP.* 5,200 289,250
MAY DEPARTMENT STORES CO. 5,100 122,400
NORDSTROM, INC. 2,200 53,075
PENNEY (J.C.) CO. 4,100 75,594
671,294
RETAIL - DISCOUNTERS - 0.1%
CONSOLIDATED STORES CORP.* 1,700 20,400
DOLLAR GENERAL CORP. 5,250 102,375
122,775
RETAIL - DRUG STORES - 0.4%
CVS CORP. 6,200 248,000
LONGS DRUG STORES, INC. 600 13,050
RITE AID CORP. 4,100 26,906
WALGREEN CO. 16,000 515,000
802,956
RETAIL - FOOD CHAINS - 0.4%
ALBERTSON'S, INC. 6,700 222,775
GREAT ATLANTIC & PACIFIC TEA CO. 600 9,975
KROGER CO.* 13,100 289,019
SAFEWAY, INC.* 8,000 361,000
WINN-DIXIE STORES, INC. 2,400 34,350
917,119
RETAIL - GENERAL MERCHANDISERS - 2.4%
COSTCO WHOLESALE CORP.* 7,000 231,000
KMART CORP.* 8,400 57,225
SEARS, ROEBUCK & CO. 5,600 182,700
TARGET CORP. 7,000 406,000
WAL-MART STORES, INC. 70,600 4,068,325
4,945,250
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
RETAIL - SPECIALTY - 0.2%
AUTOZONE, INC.* 2,100 $46,200
BED BATH & BEYOND, INC.* 2,200 79,750
OFFICE DEPOT, INC.* 5,200 32,500
STAPLES, INC.* 7,400 113,775
TIFFANY & CO. 1,200 81,000
TOYS R US, INC.* 3,400 49,512
402,737
RETAIL - SPECIALTY, APPAREL - 0.3%
GAP, INC. 13,500 421,875
LIMITED, INC. 7,000 151,375
TJX COMPANIES, INC. 5,000 93,750
667,000
SAVINGS & LOAN COMPANIES - 0.2%
CHARTER ONE FINANCIAL, INC. 3,500 80,500
GOLDEN WEST FINANCIAL CORP. 2,500 102,031
WASHINGTON MUTUAL, INC. 8,700 251,213
433,744
SERVICES - ADVERTISING / MARKETING - 0.3%
INTERPUBLIC GROUP CO.'S., INC. 4,600 197,800
OMNICOM GROUP, INC. 2,800 249,375
YOUNG & RUBICAM, INC. 1,100 62,906
510,081
SERVICES - COMMERCIAL & CONSUMER - 0.3%
BLOCK H&R, INC. 1,600 51,800
CENDANT CORP.* 11,800 165,200
CONVERGYS CORP.* 2,500 129,687
DUN & BRADSTREET CORP. 2,600 74,425
IMS HEALTH, INC. 5,000 90,000
511,112
SERVICES - COMPUTER SYSTEMS - 0.3%
COMPUTER SCIENCES CORP.* 2,700 201,656
ELECTRONIC DATA SYSTEMS 7,500 309,375
SABRE HOLDINGS CORP. 2,034 57,969
SAPIENT CORP.* 900 96,244
665,244
SERVICES - DATA PROCESSING - 0.6%
AUTOMATIC DATA PROCESSING, INC. 10,000 535,625
CERIDIAN CORP.* 2,400 57,750
EQUIFAX, INC. 2,200 57,750
FIRST DATA CORP. 6,600 327,525
PAYCHEX, INC. 5,850 245,700
1,224,350
SPECIALTY PRINTING - 0.0%
DELUXE CORP. 1,100 25,919
DONNELLEY (R.R.) & SONS CO. 1,800 40,613
66,532
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
TELECOMMUNICATION EQUIPMENT - 5.1%
ADC TELECOMMUNICATIONS, INC.* 5,300 $444,538
ANDREW CORP.* 1,200 40,275
COMVERSE TECHNOLOGY, INC.* 2,400 223,200
CORNING, INC. 4,400 1,187,450
LUCENT TECHNOLOGIES, INC. 51,700 3,063,225
MOTOROLA, INC. 34,101 991,060
NORTEL NETWORKS CORP. 47,000 3,207,750
QUALCOMM, INC.* 11,700 702,000
SCIENTIFIC-ATLANTA, INC. 2,600 193,700
TELLABS, INC.* 6,400 438,000
10,491,198
TELECOMMUNICATIONS - CELL / WIRELESS - 1.4%
NEXTEL COMMUNICATIONS, INC.* 12,100 740,369
SPRINT CORP. (PCS GROUP)* 14,600 868,700
VERIZON COMMUNICATIONS 24,500 1,244,906
2,853,975
TELECOMMUNICATIONS - LONG DISTANCE - 2.3%
AT&T CORP. 50,300 1,590,737
GLOBAL CROSSING, LTD.* 14,100 371,006
SPRINT CORP. (FON GROUP) 14,000 714,000
WORLDCOM, INC.* 45,400 2,082,725
4,758,468
TELEPHONE - 2.7%
ALLTEL CORP. 4,900 303,494
BELLSOUTH CORP. 29,800 1,270,225
CENTURYTEL, INC. 2,300 66,125
GTE CORP. 15,200 946,200
SBC COMMUNICATIONS, INC. 54,000 2,335,500
US WEST, INC. 8,000 686,000
5,607,544
TEXTILES - APPAREL - 0.0%
LIZ CLAIBORNE, INC. 1,000 35,250
RUSSELL CORP. 500 10,000
VF CORP. 1,900 45,244
90,494
TEXTILES - HOME FURNISH - 0.0%
SPRINGS INDUSTRIES, INC. 300 9,656
TOBACCO - 0.5%
PHILIP MORRIS CO.'S, INC. 36,100 958,906
UST, INC. 2,700 39,656
998,562
TRUCKERS - 0.0%
RYDER SYSTEM, INC. 1,000 18,938
<PAGE>
EQUITY SECURITIES - CONT'D SHARES VALUE
TRUCKS & PARTS - 0.1%
CUMMINS ENGINE CO., INC. 700 $19,075
NAVISTAR INTERNATIONAL CORP.* 1,000 31,062
PACCAR, INC. 1,300 51,594
101,731
WASTE MANAGEMENT - 0.1%
ALLIED WASTE INDUSTRIES, INC.* 2,800 28,000
WASTE MANAGEMENT, INC. 9,800 186,200
214,200
TOTAL EQUITY SECURITIES (COST $190,862,669) 199,411,328
PRINCIPAL
CORPORATE SECURITIES - 2.4% AMOUNT
AIM STIC PRIME FUND, 6.52%, 12/1/09 $4,830,323 4,830,323
PRIME OBLIGATIONS FUND, 5.40%, 12/1/09 16 16
TOTAL CORPORATE SECURITIES (COST $4,830,339) 4,830,339
U.S. TREASURY OBLIGATIONS - 0.3%
U.S. TREASURY BILL, 5.70%, 9/14/00 645,000 637,341
TOTAL U.S. TREASURY OBLIGATIONS (COST $637,341) 637,341
TOTAL INVESTMENTS (COST $196,330,349) - 99.7% 204,879,008
OTHER ASSETS AND LIABILITIES, NET - 0.3% 660,965
NET ASSETS - 100% $205,539,973
UNDERLYING UNREALIZED
# OF EXPIRATION FACE AMOUNT APPRECIATION INITIAL
FUTURES CONTRACTS DATE AT VALUE (DEPRECIATION) MARGIN
PURCHASED:
S&P 500 18 9/1/00 6,606,450 (84,089) 337,500^
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
PRINCIPAL
CERTIFICATES OF DEPOSIT - 3.6% AMOUNT VALUE
CANADIAN IMPERIAL BANK, 6.67%, 2/12/01 $3,000,000 $2,999,119
DEUTSCHE BANK, AG, 7.16%, 6/12/01 2,000,000 1,998,567
TOTAL CERTIFICATES OF DEPOSIT (COST $4,997,686) 4,997,686
CORPORATE OBLIGATIONS - 41.1%
BANK OF AMERICA NA, 7.38%, 5/17/01 3,000,000 3,000,000
BAYER LANESANSTALT, 6.25%, 2/12/01 3,279,000 3,268,405
BJS PARTNERSHIP LTD VRDN, 6.70%, 5/1/15, LOC: SUNTRUST BANK
1,750,000 1,750,000
CITICORP, 5.62%, 2/15/01 3,000,000 2,967,900
COMMUNITY HEALTH SYSTEMS, INC., VRDN, 6.85%, 10/1/03,
LOC: FIRST UNION BANK, NC 5,880,000 5,880,000
GOLDEN OVAL EGGS SERIES 2000 VRDN, 6.75%, 7/1/15,
LOC: US BANK, NA 7,000,000 7,000,000
JOHN DEERE CAPITAL CORPORATION, 7.14%, 6/20/01
2,000,000 2,000,000
LEHMAN BROTHERS HOLDINGS, 6.50%, 7/18/20 5,000,000 5,000,484
MASSACHUSETTS NURSING HOMES VRDN, 6.70%, 11/15/13,
LOC: AMERICAN NATIONAL BANK & TRUST 1,395,000 1,395,000
MERITER HOSPITAL VRDN, 6.70%, 12/1/16,
LOC: FIRSTAR BANK, MILWAUKEE 200,000 200,000
NATIONAL ROOFING CONTRACTORS ASSOCIATION VRDN,
6.70%, 10/1/24, LOC: AMERICAN NATIONAL BANK & TRUST
3,100,000 3,100,000
6.70%, 10/1/25, LOC: AMERICAN NATIONAL BANK & TRUST
900,000 900,000
RM GREENE, INC., VRDN, 6.60%, 5/1/30,
LOC: COLUMBUS BANK & TRUST 3,600,000 3,600,000
SOUTH CENTRAL COMMUNICATION CORPORATION VRDN,
6.70%, 6/1/13 7,000,000 7,000,000
TERRE HAUTE ASSOCIATION LIMITED PARTNERSHIP VRDN,
7.43%, 6/1/25, LOC: OLD NATIONAL BANK 1,000,000 1,000,000
WENATCHEE VALLEY CLINIC VRDN, 6.70%, 11/23/24,
LOC: US BANK, NA 1,600,000 1,600,000
W L PETREY WHOLESALE, INC., VRDN, 6.75%, 3/1/11,
LOC: SOUTHTRUST BANK, AL 2,470,000 2,470,000
YUENGLING BEER COMPANY, INC., VRDN, 6.85%, 11/1/19,
LOC: PNC BANK NA 5,000,000 5,000,000
TOTAL CORPORATE OBLIGATIONS (COST $57,131,789) 57,131,789
COMMERCIAL PAPER - 3.6%
JEFFERSON PILOT CORPORATION, 6.12%, 9/6/00 5,000,000 4,943,050
TOTAL COMMERCIAL PAPER (COST $4,943,050) 4,943,050
<PAGE>
PRINCIPAL
U.S. GOVERNMENT AGENCIES - 2.9% AMOUNT VALUE
FEDERAL HOME LOAN BANK, 6.56%, 2/15/01 $4,000,000 $3,997,654
TOTAL U.S. GOVERNMENT AGENCIES (COST $3,997,654) 3,997,654
MUNICIPAL OBLIGATIONS - 46.4%
BALTIMORE COUNTY MARYLAND REVENUE VRDN, 6.80%, 1/1/29,
LOC: FIRST UNION BANK, NC 1,650,000 1,650,000
BEXAR COUNTY TEXAS HEALTH FACILITIES DEVELOPMENT CORPORATION
REVENUE VRDN, 6.65%, 2/1/22, LOC: KREDIETBANK, NV
2,700,000 2,700,000
CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT MFH REVENUE
VRDN, 7.20%, 6/1/33, LOC: HELLER FINANCIAL 1,375,000 1,375,000
CALIFORNIA STATE HOUSING FINANCE AGENCY REVENUE VRDN,
6.80%, 8/1/29, BPA: BANK OF AMERICA, AMBAC INSURED
700,000 700,000
CATHOLIC HEALTH INITIATIVES REVENUE VRDN, 6.70%, 12/1/27,
BPA: MORGAN GUARANTY TRUST 1,500,000 1,500,000
CHICAGO ILLINOIS GO, 6.72%, 1/1/19, BPA: LASALLE BANK,
FGIC INSURED 4,500,000 4,500,000
CLARK COUNTY NEVADA IDA REVENUE VRDN, 6.80%, 12/1/38,
BPA: BANK ONE, NA, AMBAC INSURED 500,000 500,000
GREATER VALLEY CALIFORNIA MEDICAL BUILDING REVENUE VRDN,
6.95%, 3/1/21, LOC: KREDIETBANK, NV 2,225,000 2,224,324
ILLINOIS HOUSING DEVELOPMENT AUTHORITY, 6.704%, 6/1/22,
TOA: CITIBANK, AMBAC INSURED 5,000,000 5,000,000
KANSAS CITY MISSOURI IDA AND MFH REVENUE VRDN,
6.77%, 3/1/25, LOC: LASALLE BANK 1,000,000 1,000,000
LILIHA HAWAII PARKING COMPANY REVENUE VRDN, 6.85%, 8/1/24,
C/LOC: BANK ONE, NA, LOC: FIRST HAWAIIAN BANK
800,000 800,000
MAIN FINANCE AUTHORITY REVENUE VRDN, 6.60%, 6/1/08,
BPA: FLEET BANK, AMBAC INSURED 1,640,000 1,640,000
MARICOPA COUNTY ARIZONA IDA REVENUE VRDN, 6.70%, 2/1/29,
LOC: BANQUE NATIONAL DE PARIS 1,555,000 1,555,000
MARYLAND STATE HEALTH & HIGHER EDUCATION FACILITIES AUTHORITY
REVENUE VRDN, 7.00%, 1/1/28, LOC: FIRST UNION BANK, NC
2,000,000 2,000,000
MISSISSIPPI STATE IDA REVENUE VRDN,
6.90%, 6/1/10, LOC: NATIONAL BANK OF DETROIT
3,400,000 3,400,000
6.70%, 6/1/20, LOC: BANK OF AMERICA 6,700,000 6,700,000
MONTGOMERY ENGELSIDE ALABAMA MEDICAL CLINIC REVENUE VRDN,
6.70%, 3/1/24, C/LOC: SUNTRUST BANK 1,870,000 1,870,000
OHIO STATE VRDN, 6.704%, 10/1/21, TOA: CITIBANK,
AMBAC INSURED 2,000,000 2,000,000
PASADENA CALIFORNIA COPS REVENUE VRDN, 6.68%, 11/1/12,
LOC: CANADIAN IMPERIAL 4,650,000 4,650,000
PENSACOLA FLORIDA MEDICAL OFFICE BUILDING REVENUE VRDN, 6.65%,
10/1/15, LOC: AMSOUTH BANK 5,650,000 5,650,000
ROMAN CATHOLIC DIOCESE NORTH CAROLINA REVENUE VRDN,
6.73%, 4/1/15, LOC: BANK OF AMERICA 3,000,000 3,000,000
SAN DIEGO CALIFORNIA MFH REVENUE VRDN, 6.70%, 7/15/33
3,000,000 3,000,000
SAULT SAINTE MARIE MICHIGAN TRIBE BUILDING REVENUE VRDN,
7.51%, 6/1/03, LOC: FIRST AMERICAN BANK, MI
3,225,000 3,225,000
SUFFOLK COUNTY NEW YORK IDA REVENUE VRDN, 6.68%, 12/15/07,
LOC: CHASE MANHATTAN 2,900,000 2,900,000
<PAGE>
PRINCIPAL
MUNICIPAL OBLIGATIONS - CONT'D AMOUNT VALUE
TEXAS STATE VETERANS LAND SERIES-A, VRDN, 6.68%, 12/1/27,
TOA: CITIBANK $1,000,000 $1,000,000
TOTAL MUNICIPAL OBLIGATIONS (COST $64,539,324) 64,539,324
REPURCHASE AGREEMENTS - 1.6%
STATE STREET BANK, 6.35%, DATED 6/30/00, DUE 7/3/00
2,200,000 2,200,000
(COLLATERAL: $2,267,806, FHLB, 5.82%, 5/6/09)
TOTAL REPURCHASE AGREEMENTS (COST $2,200,000) 2,200,000
TOTAL INVESTMENTS (COST $137,809,503) - 99.2% 137,809,503
OTHER ASSETS AND LIABILITIES, NET - 0.8% 1,139,700
NET ASSETS - 100% $138,949,203
SEE NOTES TO PORTFOLIOS OF INVESTMENTS AND NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO PORTFOLIOS OF INVESTMENTS
* NON-INCOME PRODUCING.
^ FUTURES COLLATERALIZED BY 645,000 UNITS OF U.S. TREASURY BILLS.
FOR THE MONEY MARKET PORTFOLIO, OPTIONAL TENDER FEATURES GIVE THESE SECURITIES A
SHORTER EFFECTIVE MATURITY DATE.
EXPLANATION OF GUARANTEES:
BPA: BOND-PURCHASE AGREEMENT
C/LOC: COLLATERALIZED LOC
GA: GUARANTY AGREEMENT
LOC: LETTER OF CREDIT
TOA: TENDER OPTION AGREEMENT
ABBREVIATIONS:
ADR: AMERICAN DEPOSITORY RECEIPT
COPS: CERTIFICATES OF PARTICIPATION
IDA: INDUSTRIAL DEVELOPMENT AUTHORITY
VRDN: VARIABLE RATE DEMAND NOTES
(CHF) SECURITY IS VALUED IN SWISS FRANCS.
(EUR) SECURITY IS VALUED IN EUROPEAN EUROS.
(GBP) SECURITY IS VALUED IN GREAT BRITISH POUNDS.
(HKD) SECURITY IS VALUED IN HONG KONG DOLLARS.
(JPY) SECURITY IS VALUED IN JAPANESE YEN.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000
INCOME & SMALL
GROWTH GROWTH CAPITALIZATION
ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
INVESTMENTS IN SECURITIES, AT VALUE -
SEE ACCOMPANYING PORTFOLIOS $94,562,985 $208,928,588 $133,759,523
CASH 11,247 89,456 32,759
RECEIVABLE FOR SECURITIES SOLD 756,251 4,031,949 5,037,645
INTEREST & DIVIDENDS RECEIVABLE 18,565 21,721 2,750
TOTAL ASSETS 95,349,048 213,071,714 138,832,677
LIABILITIES
PAYABLE FOR SECURITIES PURCHASED 469,094 1,596,066 3,190,264
PAYABLE TO AMERITAS INVESTMENT CORP. 45,675 122,600 84,671
PAYABLE TO CALVERT ADMINISTRATIVE
SERVICES COMPANY 4,098 8,631 5,195
ACCRUED EXPENSES AND OTHER LIABILITIES 26,900 59,500 37,970
TOTAL LIABILITIES 545,767 1,786,797 3,318,100
NET ASSETS $94,803,281 $211,284,917 $135,514,577
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 5,090,760,
3,152,524, AND 2,387,239 SHARES OF COMMON
STOCK OUTSTANDING FOR THE INCOME AND GROWTH,
GROWTH, AND SMALL CAPITALIZATION PORTFOLIOS,
RESPECTIVELY, $0.01 PAR VALUE WITH 1,000,000,000
SHARES AUTHORIZED FOR EACH PORTFOLIO
$72,739,562 $177,576,304 $107,057,686
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
50,613 37,859 (305,551)
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS
9,282,392 2,274,933 8,175,850
NET UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENTS 12,730,714 31,395,821 20,586,592
NET ASSETS $94,803,281 $211,284,917 $135,514,577
NET ASSET VALUE PER SHARE $18.62 $67.02 $56.77
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000
MIDCAP EMERGING
GROWTH GROWTH RESEARCH
ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
INVESTMENTS IN SECURITIES, AT VALUE -
SEE ACCOMPANYING PORTFOLIOS $107,373,714 $139,198,730 $29,110,114
CASH 114,952 58,635 26,048
RECEIVABLE FOR SECURITIES SOLD - 2,775,780 414,914
INTEREST & DIVIDENDS RECEIVABLE 12,465 25,127 6,853
OTHER ASSETS - 2,870 1,007
TOTAL ASSETS 107,501,131 142,061,142 29,558,936
LIABILITIES
PAYABLE FOR SECURITIES PURCHASED 1,627,617 4,498,581 144,855
PAYABLE TO AMERITAS INVESTMENT CORP. 62,943 84,568 16,201
PAYABLE TO CALVERT ADMINISTRATIVE
SERVICES COMPANY 4,188 5,564 4,099
ACCRUED EXPENSES AND OTHER LIABILITIES 28,430 49,786 17,100
TOTAL LIABILITIES 1,723,178 4,638,499 182,255
NET ASSETS $105,777,953 $137,422,643 $29,376,681
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 2,845,423,
3,712,500, AND 1,205,281 SHARES OF COMMON
STOCK OUTSTANDING FOR THE MIDCAP GROWTH,
EMERGING GROWTH, AND RESEARCH PORTFOLIOS,
RESPECTIVELY, $0.01 PAR VALUE WITH 1,000,000,000
SHARES AUTHORIZED FOR EACH PORTFOLIO
$79,874,435 $100,390,123 $24,576,681
UNDISTRIBUTED NET INVESTMENT INCOME (LOSS)
(85,763) (168,604) (14,510)
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSATIONS 7,472,242 11,556,995 1,614,359
NET UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENTS AND FOREIGN CURRENCIES AND
ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES 18,517,039 25,644,129 3,200,151
NET ASSETS $105,777,953 $137,422,643 $29,376,681
NET ASSET VALUE PER SHARE $37.17 $37.02 $24.37
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000
GROWTH WITH INDEX MONEY
INCOME 500 MARKET
ASSETS PORTFOLIO PORTFOLIO PORTFOLIO
INVESTMENTS IN SECURITIES, AT VALUE -
SEE ACCOMPANYING PORTFOLIOS $34,039,687 $204,879,008 $137,809,503
CASH 91,307 26,591 142,232
RECEIVABLE FOR SECURITIES SOLD 146,673 1,439,336 -
RECEIVABLE FOR VARIATION MARGIN - 45,450 -
INTEREST & DIVIDENDS RECEIVABLE 31,555 220,933 1,097,490
TOTAL ASSETS 34,309,222 206,611,318 139,049,225
LIABILITIES
PAYABLE FOR SECURITIES PURCHASED 245,359 956,581 -
PAYABLE TO AMERITAS INVESTMENT CORP. 18,322 35,037 20,765
PAYABLE TO CALVERT ADMINISTRATIVE
SERVICES COMPANY 4,098 8,488 5,925
ACCRUED EXPENSES AND OTHER LIABILITIES 18,433 71,239 73,332
TOTAL LIABILITIES 286,212 1,071,345 100,022
NET ASSETS $34,023,010 $205,539,973 $138,949,203
NET ASSETS CONSIST OF:
PAID-IN CAPITAL APPLICABLE TO 1,595,465,
1,237,697, AND 138,946,569 SHARES OF COMMON
STOCK OUTSTANDING FOR THE GROWTH WITH INCOME,
INDEX 500, AND MONEY MARKET PORTFOLIOS,
RESPECTIVELY, $0.01 PAR VALUE WITH 1,000,000,000
SHARES AUTHORIZED FOR THE GROWTH WITH INCOME,
AND INDEX 500 PORTFOLIOS, AND 2,000,000,000
FOR THE MONEY MARKET PORTFOLIO
$32,285,150 $192,590,864 $138,946,569
UNDISTRIBUTED NET INVESTMENT INCOME 79,736 1,117,347 3,231
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS (89,115) 3,367,192 (597)
NET UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENTS AND FOREIGN CURRENCIES AND
ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES 1,747,239 8,464,570 -
NET ASSETS $34,023,010 $205,539,973 $138,949,203
NET ASSET VALUE PER SHARE $21.32 $166.07 $1.00
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
INCOME & SMALL
GROWTH GROWTH CAPITALIZATION
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
INTEREST INCOME $177,953 - $260,238
DIVIDEND INCOME (NET OF FOREIGN TAXES
WITHHELD OF $3,034 AND $701 FOR THE
INCOME & GROWTH AND GROWTH PORTFOLIOS,
RESPECTIVELY) 169,162 $837,154 17,991
TOTAL INVESTMENT INCOME 347,115 837,154 278,229
EXPENSES:
INVESTMENT ADVISORY FEE 272,520 772,842 551,348
TRANSFER AGENCY FEES AND EXPENSES 4,336 4,967 4,967
ACCOUNTING FEES 4,237 8,040 5,085
ADMINISTRATIVE FEES 24,863 51,523 32,432
DIRECTORS' FEES AND EXPENSES 3,227 7,893 4,831
CUSTODIAN FEES 13,604 17,279 17,201
REPORTS TO SHAREHOLDERS 17,894 44,004 27,097
PROFESSIONAL FEES 3,303 5,101 4,085
MISCELANEOUS EXPENSES 163 597 370
TOTAL EXPENSES 344,147 912,246 647,416
REIMBURSEMENT FROM ADVISOR (40,332) (86,118) (53,734)
FEES PAID INDIRECTLY (7,313) (12,068) (9,902)
NET EXPENSES 296,502 814,060 583,780
NET INVESTMENT INCOME (LOSS) 50,613 23,094 (305,551)
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
NET REALIZED GAIN (LOSS) 8,703,706 2,503,281 7,985,984
CHANGE IN UNREALIZED APPRECIATION OR
(DEPRECIATION) ON INVESTMENTS (2,719,613) 4,052,019 (6,362,930)
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 5,984,093 6,555,300 1,623,054
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $6,034,706 $6,578,394 $1,317,503
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
MIDCAP EMERGING
GROWTH GROWTH RESEARCH
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
INTEREST INCOME $260,659 - $15,692
DIVIDEND INCOME (NET OF FOREIGN TAXES WITHHELD
OF $6,577 AND $1,686 FOR THE EMERGING
GROWTH AND RESEARCH PORTFOLIOS, RESPECTIVELY)
41,293 $408,564 87,540
TOTAL INVESTMENT INCOME 301,952 408,564 103,232
EXPENSES:
INVESTMENT ADVISORY FEE 369,252 509,266 102,682
TRANSFER AGENCY FEES AND EXPENSES 4,967 4,966 4,966
ACCOUNTING FEES 4,504 6,837 3,502
ADMINISTRATIVE FEES 25,027 33,951 24,863
DIRECTORS' FEES AND EXPENSES 3,393 5,019 1,053
CUSTODIAN FEES 16,582 78,540 41,496
REPORTS TO SHAREHOLDERS 18,765 27,462 5,631
PROFESSIONAL FEES 3,381 4,171 2,396
MISCELANEOUS EXPENSES 259 372 93
TOTAL EXPENSES 446,130 670,584 186,682
REIMBURSEMENT FROM ADVISOR (51,151) (76,125) (61,993)
FEES PAID INDIRECTLY (7,264) (17,291) (6,947)
NET EXPENSES 387,715 577,168 117,742
NET INVESTMENT INCOME (LOSS) (85,763) (168,604) (14,510)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENTS 7,168,828 11,305,792 1,555,422
FOREIGN CURRENCY TRANSACTIONS - (15,777) (1,033)
7,168,828 11,290,015 1,554,389
CHANGE IN UNREALIZED APPRECIATION OR
(DEPRECIATION) ON:
INVESTMENTS AND FOREIGN CURRENCIES 6,757,379 (14,428,950) 115,519
ASSETS AND LIABILITIES DENOMINATED IN
FOREIGN CURRENCIES - 4,682 43
6,757,379 (14,424,268) 115,562
NET REALIZED AND UNREALIZED
GAIN (LOSS) 13,926,207 (3,134,253) 1,669,951
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $13,840,444 ($3,302,857) $1,665,441
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
GROWTH WITH INDEX
INCOME 500
NET INVESTMENT INCOME PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
INTEREST INCOME $13,159 $171,496
DIVIDEND INCOME (NET OF FOREIGN TAXES WITHHELD OF $2,095
AND $9,908 FOR THE GROWTH WITH INCOME AND INDEX 500
PORTFOLIOS, RESPECTIVELY) 206,421 1,147,057
TOTAL INVESTMENT INCOME 219,580 1,318,553
EXPENSES:
INVESTMENT ADVISORY FEE 125,040 241,539
TRANSFER AGENCY FEES AND EXPENSES 4,966 4,966
ADMINISTRATIVE FEES 24,863 50,321
DIRECTORS' FEES AND EXPENSES 1,316 7,832
CUSTODIAN FEES 29,450 82,649
ACCOUNTING FEES 3,681 8,064
REPORTS TO SHAREHOLDERS 7,021 42,320
PROFESSIONAL FEES 2,488 4,965
MISCELLANEOUS EXPENSES 114 593
TOTAL EXPENSES 198,939 443,249
REIMBURSEMENT FROM ADVISOR (47,602) (147,247)
FEES PAID INDIRECTLY (4,624) (14,207)
NET EXPENSES 146,713 281,795
NET INVESTMENT INCOME (LOSS) 72,867 1,036,758
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENTS (81,377) 2,742,528
FOREIGN CURRENCY TRANSACTIONS (5,657) -
FUTURES - (6,803)
(87,034) 2,735,725
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION) ON:
INVESTMENTS AND FOREIGN CURRENCIES 222,062 (5,721,515)
ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
(561) -
FUTURES - (215,159)
221,501 (5,936,674)
NET REALIZED AND UNREALIZED GAIN (LOSS) 134,467 (3,200,949)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $207,334 ($2,164,191)
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2000
NET INVESTMENT INCOME
INVESTMENT INCOME:
INTEREST INCOME $5,069,331
EXPENSES:
INVESTMENT ADVISORY FEE 161,303
TRANSFER AGENT FEES AND EXPENSES 4,765
DIRECTORS' FEES AND EXPENSES 6,513
ACCOUNTING FEES 8,064
ADMINISTRATIVE SERVICES FEES 40,326
CUSTODIAN FEES 17,487
REPORTS TO SHAREHOLDERS 34,915
PROFESSIONAL FEES 4,307
MISCELLANEOUS EXPENSES 520
TOTAL EXPENSES 278,200
REIMBURSEMENT FROM ADVISOR (54,368)
FEES PAID INDIRECTLY (14,138)
NET EXPENSES 209,694
NET INVESTMENT INCOME (LOSS) 4,859,637
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON INVESTMENTS (597)
NET REALIZED AND UNREALIZED GAIN (LOSS) (597)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,859,040
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INCOME & GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) $50,613 ($10,468)
NET REALIZED GAIN (LOSS) ON INVESTMENTS
8,703,706 2,895,907
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
(2,719,613) 15,450,327
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 6,034,706 18,335,766
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET REALIZED GAIN - (2,306,753)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 62,811,849
SHARES SOLD 17,480,089 2,633,985
REINVESTMENT OF DISTRIBUTIONS - 2,306,735
SHARES REDEEMED (9,096,235) (3,396,861)
TOTAL CAPITAL SHARE TRANSACTIONS 8,383,854 64,355,708
TOTAL INCREASE (DECREASE) IN NET ASSETS
14,418,560 80,384,721
NET ASSETS
BEGINNING OF PERIOD 80,384,721 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF $50,613 AND $0 RESPECTIVELY)
$94,803,281 $80,384,721
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 4,541,710
SHARES SOLD 965,883 165,610
REINVESTMENT OF DISTRIBUTIONS - 133,414
SHARES REDEEMED (508,164) (207,693)
TOTAL CAPITAL SHARE ACTIVITY 457,719 4,633,041
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) $23,094 $39,653
NET REALIZED GAIN (LOSS) 2,503,281 (228,348)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
4,052,019 27,343,802
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 6,578,394 27,155,107
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (24,888)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 173,585,294
SHARES SOLD 50,155,063 39,823,698
REINVESTMENT OF DISTRIBUTIONS - 24,877
SHARES REDEEMED (43,401,412) (42,611,216)
TOTAL CAPITAL SHARE TRANSACTIONS 6,753,651 170,822,653
TOTAL INCREASE (DECREASE) IN NET ASSETS
13,332,045 197,952,872
NET ASSETS
BEGINNING OF PERIOD 197,952,872 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $37,859 AND $14,765, RESPECTIVELY)
$211,284,917 $197,952,872
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 3,097,525
SHARES SOLD 762,788 661,287
REINVESTMENT OF DISTRIBUTIONS - 385
SHARES REDEEMED (663,752) (705,709)
TOTAL CAPITAL SHARE ACTIVITY 99,036 3,053,488
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
SMALL CAPITALIZATION PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($305,551) ($100,405)
NET REALIZED GAIN (LOSS) ON INVESTMENTS
7,985,984 1,266,853
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
(6,362,930) 26,949,522
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,317,503 28,115,970
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET REALIZED GAIN ON INVESTMENTS - (976,582)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 99,408,414
SHARES SOLD 167,153,815 39,190,361
REINVESTMENT OF DISTRIBUTIONS - 976,582
SHARES REDEEMED (158,533,461) (41,138,025)
TOTAL CAPITAL SHARE TRANSACTIONS 8,620,354 98,437,332
TOTAL INCREASE (DECREASE) IN NET ASSETS
9,937,857 125,576,720
NET ASSETS
BEGINNING OF PERIOD $125,576,720 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
(LOSS) OF ($305,551) AND $0, RESPECTIVELY)
$135,514,577 $125,576,720
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 2,256,718
SHARES SOLD 2,873,383 788,324
REINVESTMENT OF DISTRIBUTIONS - 17,603
SHARES REDEEMED (2,711,926) (836,863)
TOTAL CAPITAL SHARE ACTIVITY 161,457 2,225,782
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MIDCAP GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($85,763) ($6,695)
NET REALIZED GAIN (LOSS) ON INVESTMENTS
7,168,828 2,012,868
CHANGE IN UNREALIZED APPRECIATION OR (DEPRECIATION)
6,757,379 11,759,660
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 13,840,444 13,765,833
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET REALIZED GAINS - (1,702,759)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 61,836,665
SHARES SOLD 79,230,527 10,044,429
REINVESTMENT OF DISTRIBUTIONS - 1,702,758
SHARES REDEEMED (62,936,331) (10,003,613)
TOTAL CAPITAL SHARE TRANSACTIONS
16,294,196 63,580,239
TOTAL INCREASE (DECREASE) IN NET ASSETS
30,134,640 75,643,313
NET ASSETS
BEGINNING OF PERIOD 75,643,313 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
(LOSS) OF ($85,763) AND $0, RESPECTIVELY)
$105,777,953 $75,643,313
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 2,342,298
SHARES SOLD 2,211,540 344,824
REINVESTMENT OF DISTRIBUTIONS - 54,751
SHARES REDEEMED (1,767,298) (340,692)
TOTAL CAPITAL SHARE ACTIVITY 444,242 2,401,181
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
EMERGING GROWTH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($168,604) ($78,646)
NET REALIZED GAIN (LOSS) 11,290,015 345,626
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
(14,424,268) 40,068,397
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (3,302,857) 40,335,377
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 84,549,543
SHARES SOLD 34,301,806 7,719,494
SHARES REDEEMED (21,616,583) (4,564,137)
TOTAL CAPITAL SHARE TRANSACTIONS 12,685,223 87,704,900
TOTAL INCREASE (DECREASE) IN NET ASSETS 9,382,366 128,040,277
NET ASSETS
BEGINNING OF PERIOD 128,040,277 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
(LOSS) OF ($166,741) AND $0, RESPECTIVELY)
$137,422,643 $128,040,277
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 3,274,576
SHARES SOLD 900,879 253,139
SHARES REDEEMED (570,040) (146,054)
TOTAL CAPITAL SHARE ACTIVITY 330,839 3,381,661
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
RESEARCH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) ($14,510) ($1,699)
NET REALIZED GAIN (LOSS) ON INVESTMENTS
1,554,389 356,212
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
115,562 3,084,589
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,655,441 3,439,102
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET REALIZED GAIN - (294,543)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 22,806,495
SHARES SOLD 6,281,239 1,685,017
REINVESTMENT OF DISTRIBUTIONS - 294,543
SHARES REDEEMED (4,488,877) (2,001,736)
TOTAL CAPITAL SHARE TRANSACTIONS
1,792,362 22,784,319
TOTAL INCREASE (DECREASE) IN NET ASSETS
3,447,803 25,928,878
NET ASSETS
BEGINNING OF PERIOD 25,928,878 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT
INCOME OF ($14,510) AND $0, RESPECTIVELY)
$29,376,681 $25,928,878
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 1,126,803
SHARES SOLD 269,287 80,339
REINVESTMENT OF DISTRIBUTIONS - 12,902
SHARES REDEEMED (191,665) (92,385)
TOTAL CAPITAL SHARE ACTIVITY 77,622 1,127,659
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
GROWTH WITH INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) $72,867 $24,813
NET REALIZED GAIN (LOSS) ON INVESTMENTS
(87,034) (3,258)
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
221,501 1,525,738
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 207,334 1,547,293
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (16,767)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 33,614,544
SHARES SOLD 4,914,269 650,473
REINVESTMENT OF DISTRIBUTIONS - 16,767
SHARES REDEEMED (5,840,704) (1,070,199)
TOTAL CAPITAL SHARE TRANSACTIONS
(926,435) 33,211,585
TOTAL INCREASE (DECREASE) IN NET ASSETS
(719,101) 34,742,111
NET ASSETS
BEGINNING OF PERIOD 34,742,111 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $79,736 AND $6,869, RESPECTIVELY)
$34,023,010 $34,742,111
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 1,660,798
SHARES SOLD 234,103 31,786
REINVESTMENT OF DISTRIBUTIONS - 795
SHARES REDEEMED (279,700) (52,317)
TOTAL CAPITAL SHARE ACTIVITY (45,597) 1,641,062
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
INDEX 500 PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
NOVEMBER 1, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME (LOSS) $1,036,758 $386,391
NET REALIZED GAIN (LOSS) ON INVESTMENTS 2,735,725 631,467
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION)
(5,936,674) 14,401,244
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (2,164,191) 15,419,102
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME - (305,802)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 189,593,992
SHARES SOLD 47,336,554 17,091,074
REINVESTMENT OF DISTRIBUTIONS - 305,798
SHARES REDEEMED (46,504,269) (15,232,285)
TOTAL CAPITAL SHARE TRANSACTIONS 832,285 191,758,579
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,331,906) 206,871,879
NET ASSETS
BEGINNING OF PERIOD 206,871,879 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $1,117,347 AND $80,589, RESPECTIVELY)
$205,539,973 $206,871,879
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 1,223,108
SHARES SOLD 285,793 105,970
REINVESTMENT OF DISTRIBUTIONS - 1,834
SHARES REDEEMED (284,631) (94,377)
TOTAL CAPITAL SHARE ACTIVITY 1,162 1,236,535
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FROM INCEPTION,
OCTOBER 29, 1999
SIX MONTHS ENDED THROUGH
JUNE 30, DECEMBER 31,
INCREASE (DECREASE) IN NET ASSETS 2000 1999
OPERATIONS:
NET INVESTMENT INCOME $4,859,637 $1,641,990
NET REALIZED GAIN (LOSS) (597)
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 4,859,040 1,641,990
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME (4,858,220) (1,640,176)
CAPITAL SHARE TRANSACTIONS:
CONTRIBUTION OF ASSETS (SEE NOTE A) - 172,785,829
SHARES SOLD 874,017,962 263,478,740
REINVESTMENT OF DISTRIBUTIONS 4,867,088 1,606,827
SHARES REDEEMED (939,874,615) (237,935,262)
TOTAL CAPITAL SHARE TRANSACTIONS (60,989,565) 199,936,134
TOTAL INCREASE (DECREASE) IN NET ASSETS (60,988,745) 199,937,948
NET ASSETS
BEGINNING OF PERIOD 199,937,948 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $3,231 AND $1,814, RESPECTIVELY) $138,949,203 $199,937,948
CAPITAL SHARE ACTIVITY
CONTRIBUTION OF ASSETS (SEE NOTE A) - 172,785,829
SHARES SOLD 874,017,962 263,478,740
REINVESTMENT OF DISTRIBUTIONS 4,867,088 1,606,827
SHARES REDEEMED (939,874,615) (237,935,262)
TOTAL CAPITAL SHARE ACTIVITY (60,989,565) 199,936,134
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE A -- SIGNIFICANT ACCOUNTING POLICIES
GENERAL: THE AMERITAS PORTFOLIOS (THE "PORTFOLIOS"), A SERIES OF CALVERT
VARIABLE SERIES, INC. ("CVS" OR THE "FUND"). THE FUND IS REGISTERED UNDER THE
INVESTMENT COMPANY ACT OF 1940 AS AN OPEN-END MANAGEMENT INVESTMENT COMPANY. THE
INCOME & GROWTH, GROWTH, SMALL CAPITALIZATION, MIDCAP GROWTH AND EMERGING GROWTH
PORTFOLIOS ARE REGISTERED AS DIVERSIFIED PORTFOLIOS. THE RESEARCH, GROWTH WITH
INCOME, INDEX 500 AND MONEY MARKET PORTFOLIOS ARE REGISTERED AS NON-DIVERSIFIED
PORTFOLIOS. THE OPERATIONS OF EACH SERIES OF THE FUND ARE ACCOUNTED FOR
SEPARATELY. THE FUND OFFERS ITS SHARES, WITHOUT SALES CHARGE, ONLY FOR PURCHASE
BY INSURANCE COMPANIES FOR ALLOCATION TO THEIR VARIABLE ACCOUNTS.
AS OF NOVEMBER 1, 1999, NINE INVESTMENT OFFERINGS OF AMERITAS VARIABLE LIFE
INSURANCE COMPANY'S ("EXISTING FUNDS") BECAME THE AMERITAS PORTFOLIOS WITHIN THE
FUND. EACH OF THE AMERITAS PORTFOLIOS HAVE INVESTMENT OBJECTIVES AND POLICIES
THAT ARE SUBSTANTIALLY THE SAME OR SUFFICIENTLY SIMILAR TO THE INVESTMENT
OBJECTIVES AND POLICIES OF ONE OF THE EXISTING FUNDS INVOLVED IN THE
SUBSTITUTIONS (EACH, A "REPLACED FUND"). THE SUBSTITUTIONS WERE EFFECTED BY
REDEEMING SHARES OF THE REPLACED FUNDS AT RELATIVE NET ASSET VALUE AND USING THE
PROCEEDS TO PURCHASE SHARES OF THE AMERITAS PORTFOLIOS AT NET ASSET VALUE ON THE
DATE THE SUBSTITUTIONS TOOK PLACE. THE PROCEEDS OF SUCH EXISTING FUNDS
REDEMPTIONS' WERE EFFECTED THROUGH A COMBINATION OF CASH AND IN-KIND
TRANSACTIONS. ALL REDEMPTIONS AND PURCHASES WERE EFFECTED IN ACCORDANCE WITH
RULE 22C-1 UNDER THE INVESTMENT COMPANY ACT OF 1940.
SECURITY VALUATION: SECURITIES LISTED OR TRADED ON A NATIONAL SECURITIES
EXCHANGE ARE VALUED AT THE LAST REPORTED SALE PRICE. UNLISTED SECURITIES AND
LISTED SECURITIES FOR WHICH THE LAST SALE PRICE IS NOT AVAILABLE ARE VALUED AT
THE MOST RECENT BID PRICE OR BASED ON A YIELD EQUIVALENT OBTAINED FROM THE
SECURITIES' MARKET MAKER. FOREIGN SECURITY PRICES, FURNISHED BY QUOTATION
SERVICES IN THE SECURITY'S LOCAL CURRENCY, ARE TRANSLATED USING THE CURRENT U.S.
DOLLAR EXCHANGE RATE. ALL SECURITIES HELD BY MONEY MARKET ARE VALUED AT
AMORTIZED COST, WHICH APPROXIMATES MARKET. RESTRICTED SECURITIES AND OTHER
SECURITIES AND ASSETS FOR WHICH MARKET QUOTATIONS ARE NOT AVAILABLE OR DEEMED
INAPPROPRIATE ARE VALUED IN GOOD FAITH UNDER THE DIRECTION OF THE BOARD OF
DIRECTORS.
REPURCHASE AGREEMENTS: THE PORTFOLIO MAY ENTER INTO REPURCHASE AGREEMENTS WITH
RECOGNIZED FINANCIAL INSTITUTIONS OR REGISTERED BROKER/DEALERS AND, IN ALL
INSTANCES, HOLDS UNDERLYING SECURITIES WITH A VALUE EXCEEDING THE TOTAL
REPURCHASE PRICE, INCLUDING ACCRUED INTEREST. ALTHOUGH RISK IS MITIGATED BY THE
COLLATERAL, THE PORTFOLIO COULD EXPERIENCE A DELAY IN RECOVERING ITS VALUE AND
POSSIBLE LOSS OF INCOME OR VALUE IF THE COUNTERPARTY FAILS TO PERFORM IN
ACCORDANCE WITH THE TERMS OF THE AGREEMENT.
<PAGE>
FUTURES CONTRACTS: THE PORTFOLIO MAY ENTER INTO FUTURES CONTRACTS AGREEING TO
BUY OR SELL A FINANCIAL INSTRUMENT FOR A SET PRICE AT A FUTURE DATE. THE
PORTFOLIO MAINTAINS SECURITIES WITH A VALUE EQUAL TO ITS OBLIGATION UNDER EACH
CONTRACT. INITIAL MARGIN DEPOSITS OF EITHER CASH OR SECURITIES ARE MADE UPON
ENTERING FUTURES CONTRACTS; THEREAFTER, VARIATION MARGIN PAYMENTS ARE MADE OR
RECEIVED DAILY REFLECTING THE CHANGE IN MARKET VALUE. UNREALIZED OR REALIZED
GAINS AND LOSSES ARE RECOGNIZED BASED ON THE CHANGE IN MARKET VALUE. RISKS OF
FUTURES CONTRACTS ARISE FROM THE POSSIBLE ILLIQUIDITY OF THE FUTURES MARKETS AND
THE MOVEMENT IN THE VALUE OF THE INVESTMENT OR IN INTEREST RATES.
SECURITY TRANSACTIONS AND INVESTMENT INCOME: SECURITY TRANSACTIONS ARE ACCOUNTED
FOR ON TRADE DATE. REALIZED GAINS AND LOSSES ARE RECORDED ON AN IDENTIFIED COST
BASIS. DIVIDEND INCOME IS RECORDED ON THE EX-DIVIDEND DATE OR, IN THE CASE OF
DIVIDENDS ON CERTAIN FOREIGN SECURITIES, AS SOON AS THE PORTFOLIO IS INFORMED OF
THE EX-DIVIDEND DATE. INTEREST INCOME, ACCRETION OF DISCOUNT AND AMORTIZATION OF
PREMIUM ARE RECORDED ON AN ACCRUAL BASIS.
FOREIGN CURRENCY TRANSACTIONS: THE PORTFOLIO'S ACCOUNTING RECORDS ARE MAINTAINED
IN U.S. DOLLARS. FOR VALUATION OF ASSETS AND LIABILITIES ON EACH DATE OF NET
ASSET VALUE DETERMINATION, FOREIGN DENOMINATIONS ARE CONVERTED INTO U. S.
DOLLARS USING THE CURRENT EXCHANGE RATE. SECURITY TRANSACTIONS, INCOME AND
EXPENSES ARE TRANSLATED AT THE PREVAILING RATE OF EXCHANGE ON THE DATE OF THE
EVENT. THE EFFECT OF CHANGES IN FOREIGN EXCHANGE RATES ON SECURITIES IS INCLUDED
WITH THE NET REALIZED AND UNREALIZED GAIN OR LOSS ON INVESTMENTS.
DISTRIBUTIONS TO SHAREHOLDERS: DISTRIBUTIONS TO SHAREHOLDERS ARE RECORDED BY THE
PORTFOLIO ON EX-DIVIDEND DATE. DIVIDENDS FROM NET INVESTMENT INCOME AND
DISTRIBUTIONS FROM NET REALIZED CAPITAL GAINS, IF ANY, ARE PAID AT LEAST
ANNUALLY. DISTRIBUTIONS ARE DETERMINED IN ACCORDANCE WITH INCOME TAX REGULATIONS
WHICH MAY DIFFER FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES; ACCORDINGLY,
PERIODIC RECLASSIFICATIONS ARE MADE WITHIN THE PORTFOLIO'S CAPITAL ACCOUNTS TO
REFLECT INCOME AND GAINS AVAILABLE FOR DISTRIBUTION UNDER INCOME TAX
REGULATIONS.
ESTIMATES: 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 INCOME AND EXPENSES DURING THE REPORTING
PERIOD. ACTUAL RESULTS COULD DIFFER FROM THOSE ESTIMATES.
EXPENSE OFFSET ARRANGEMENTS: THE PORTFOLIO HAS AN ARRANGEMENT WITH ITS CUSTODIAN
BANK WHEREBY THE CUSTODIAN'S AND TRANSFER AGENT'S FEES MAY BE PAID INDIRECTLY BY
CREDITS EARNED ON THE PORTFOLIO'S CASH ON DEPOSIT WITH THE BANK. SUCH A DEPOSIT
ARRANGEMENT IS AN ALTERNATIVE TO OVERNIGHT INVESTMENTS.
FEDERAL INCOME TAXES: NO PROVISION FOR FEDERAL INCOME OR EXCISE TAX IS REQUIRED
SINCE THE PORTFOLIO INTENDS TO CONTINUE TO QUALIFY AS A REGULATED INVESTMENT
COMPANY UNDER THE INTERNAL REVENUE CODE AND TO DISTRIBUTE SUBSTANTIALLY ALL OF
ITS TAXABLE EARNINGS.
<PAGE>
NOTE B - RELATED PARTY TRANSACTIONS
AMERITAS INVESTMENT CORP. ("AIC") (THE "ADVISOR") IS A WHOLLY-OWNED SUBSIDIARY
OF AMAL CORPORATION, A NEBRASKA STOCK COMPANY, WHICH IN TURN IS A JOINT VENTURE
OF AMERITAS LIFE INSURANCE CORP. ("ALIC"), A STOCK LIFE INSURANCE COMPANY. ALIC
IS WHOLLY-OWNED BY AMERITAS HOLDING COMPANY, WHICH IN TURN, IS WHOLLY-OWNED BY
AMERITAS MUTUAL INSURANCE HOLDING COMPANY. PURSUANT TO A MERGER EFFECTIVE
JANUARY 1, 1999, AMERITAS MUTUAL INSURANCE HOLDING COMPANY MERGED WITH ACACIA
MUTUAL HOLDING CORPORATION TO FORM AMERITAS ACACIA MUTUAL HOLDING COMPANY. BOTH
AIC AND CALVERT GROUP, LTD. ("CALVERT"), ARE INDIRECTLY OWNED SUBSIDIARIES OF
THIS NEW ENTITY.
THE ADVISOR PROVIDES INVESTMENT ADVISORY SERVICES AND PAYS THE SALARIES AND FEES
OF OFFICERS AND AFFILIATED DIRECTORS OF THE PORTFOLIO. FOR ITS SERVICES, THE
ADVISOR RECEIVES MONTHLY FEES BASED ON THE FOLLOWING ANNUAL RATES OF THE
PORTFOLIO'S AVERAGE DAILY NET ASSETS:
INCOME & GROWTH .625%
GROWTH .75%
SMALL CAPITALIZATION .85%
MIDCAP GROWTH .80%
EMERGING GROWTH .75%
RESEARCH .75%
GROWTH WITH INCOME .75%
INDEX 500 .24%
MONEY MARKET .20%
THE PORTFOLIO'S AGGREGATE EXPENSES ARE LIMITED FOR A PERIOD OF ONE YEAR
FOLLOWING NOVEMBER 1, 1999 (OCTOBER 29, 1999 FOR MONEY MARKET) AS REFLECTED IN
THE TABLE BELOW.
INCOME & GROWTH .68%
GROWTH .79%
SMALL CAPITALIZATION .90%
MIDCAP GROWTH .84%
EMERGING GROWTH .85%
RESEARCH .86%
GROWTH WITH INCOME .88%
INDEX 500 .28%
MONEY MARKET .26%
<PAGE>
AS A RESULT OF THE EXPENSE GUARANTEE, THE ADVISOR CONTRACTUALLY REIMBURSED
INCOME & GROWTH, GROWTH, SMALL CAPITALIZATION, MIDCAP GROWTH, EMERGING GROWTH,
RESEARCH, GROWTH WITH INCOME, INDEX 500 AND MONEY MARKET EXPENSES OF $40,332,
$86,118, $53,734, $51,151, $76,125, $61,993, $47,602, $147,247 AND $54,368,
RESPECTIVELY AT JUNE 30, 2000.
THE ADVISOR MAY RECAPTURE FEES WAIVED AND/OR EXPENSES REIMBURSED FOLLOWING THE
EXPIRATION OF THE INITIAL FEE CAP PERIOD. SUCH RECAPTURE WOULD ONLY BE
PERMITTED, AFTER TAKING INTO ACCOUNT THE FEE RECAPTURE, TO THE EXTENT THAT THE
EXPENSE RATIO OF THE RELEVANT PORTFOLIOS DOES NOT EXCEED THE PRIOR EXPENSE
RATIO. IN ADDITION, SUCH RECAPTURE WILL ONLY BE AVAILABLE UNTIL THE SECOND
ANNIVERSARY OF THE END OF THE INITIAL FEE CAP PERIOD.
CALVERT ADMINISTRATIVE SERVICES COMPANY ("CASC"), A SUBSIDIARY OF CALVERT AND
ACACIA MUTUAL, PROVIDES ADMINISTRATIVE SERVICES FOR THE PORTFOLIOS. FOR ITS
SERVICES, CASC RECEIVES AN ANNUAL FEE, PAYABLE MONTHLY, OF .05% OF THE
PORTFOLIO'S AVERAGE DAILY NET ASSETS, OR A MINIMUM OF $50,000 PER PORTFOLIO.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), A SUBSIDIARY OF CALVERT AND ACACIA
MUTUAL, ACTS AS SHAREHOLDER SERVICING AGENT FOR THE PORTFOLIOS. NATIONAL
FINANCIAL DATA SERVICES, INC. IS THE TRANSFER AND DIVIDEND DISBURSING AGENT.
EACH DIRECTOR WHO IS NOT AFFILIATED WITH THE ADVISOR RECEIVED A FEE OF $1,500
FOR EACH BOARD MEETING ATTENDED PLUS AN ANNUAL FEE OF $15,000 FOR DIRECTORS NOT
SERVING ON OTHER CALVERT FUND BOARDS. DIRECTOR'S FEES ARE ALLOCATED TO EACH OF
THE PORTFOLIOS SERVED.
NOTE C - INVESTMENT ACTIVITY
DURING THE PERIOD, PURCHASES AND SALES OF INVESTMENTS, OTHER THAN SHORT-TERM
SECURITIES, WERE:
INCOME & SMALL MIDCAP
GROWTH GROWTH CAPITALIZATION GROWTH
PURCHASES: $88,557,931 $102,800,557 $79,354,236 $65,228,141
SALES: 78,182,157 102,946,226 77,272,238 56,888,272
EMERGING GROWTH INDEX
GROWTH RESEARCH WITH INCOME 500
PURCHASES: $151,142,637 $16,040,971 $12,274,870 $51,231,997
SALES: 125,530,888 14,461,602 13,953,196 51,335,970
MONEY MARKET HELD ONLY SHORT-TERM INVESTMENTS.
<PAGE>
THE COST OF INVESTMENTS OWNED AT JUNE 30, 2000, WAS SUBSTANTIALLY THE SAME FOR
FEDERAL INCOME TAX PURPOSES AND FINANCIAL REPORTING PURPOSES. THE FOLLOWING
TABLE PRESENTS THE COMPONENTS OF NET UNREALIZED APPRECIATION (DEPRECIATION) AS
OF JUNE 30, 2000 AND THE NET REALIZED CAPITAL LOSS CARRYFORWARDS AS OF DECEMBER
31, 1999 WITH EXPIRATION DATES:
UNREALIZED UNREALIZED CAPITAL LOSS EXPIRATION
APPRECIATION (DEPRECIATION) CARRYFORWARD DATES
INCOME & GROWTH $14,807,354 $2,076,640 - -
GROWTH 37,379,417 5,983,596 $228,348 2007
SMALL CAPITALIZATION 28,532,292 7,945,700 - -
MIDCAP GROWTH 22,326,721 3,809,682 - -
EMERGING GROWTH 30,213,523 4,569,033 - -
RESEARCH 4,780,336 1,580,301 - -
GROWTH WITH INCOME 3,940,615 2,193,165 - -
INDEX 500 26,007,664 17,459,005 - -
CAPITAL LOSSES MAY BE UTILIZED TO OFFSET CURRENT AND FUTURE CAPITAL GAINS UNTIL
EXPIRATION.
THE PORTFOLIOS MAY ENGAGE IN INTERPORTFOLIO PURCHASE AND SALES TRANSACTIONS WITH
OTHER PORTFOLIOS. FOR THE MONEY MARKET PORTFOLIO, THESE TRANSACTIONS ARE
PRIMARILY USED FOR CASH MANAGEMENT NEEDS. THESE TRANSACTIONS WERE EXECUTED AT
INDEPENDENTLY DERIVED PRICES PURSUANT TO RULE 17A-7 UNDER THE INVESTMENT COMPANY
ACT OF 1940.
NOTE D - LINE OF CREDIT
A FINANCING AGREEMENT IS IN PLACE WITH ALL CALVERT GROUP FUNDS (EXCEPT FOR
CALVERT SOCIAL INVESTMENT FUND MANAGED INDEX AND CVS AMERITAS INDEX 500
PORTFOLIOS) AND STATE STREET BANK AND TRUST COMPANY ("THE BANK"). UNDER THE
AGREEMENT, THE BANK IS PROVIDING AN UNSECURED LINE OF CREDIT FACILITY, IN THE
AGGREGATE AMOUNT OF $50 MILLION ($25 MILLION COMMITTED AND $25 MILLION
UNCOMMITTED), TO BE ACCESSED BY THE FUNDS FOR TEMPORARY OR EMERGENCY PURPOSES
ONLY. BORROWINGS UNDER THIS FACILITY BEAR INTEREST AT THE OVERNIGHT FEDERAL
FUNDS RATE PLUS .50% PER ANNUM. A COMMITMENT FEE OF .10% PER ANNUM WILL BE
INCURRED ON THE UNUSED PORTION OF THE COMMITTED FACILITY WHICH WILL BE ALLOCATED
TO ALL PARTICIPATING FUNDS. THE PORTFOLIOS HAD NO LOANS OUTSTANDING PURSUANT TO
THIS LINE OF CREDIT AT JUNE 30, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31,
INCOME & GROWTH PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $17.35 $13.83
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .01 -
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.26 4.03
TOTAL FROM INVESTMENT OPERATIONS 1.27 4.03
DISTRIBUTIONS FROM
NET REALIZED GAINS - (.51)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE 1.27 3.52
NET ASSET VALUE, ENDING $18.62 $17.35
TOTAL RETURN 7.32% 29.14%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME .12%(A) .09%)(A)
TOTAL EXPENSES .79%(A) .79%(A)
EXPENSES BEFORE OFFSETS .70%(A) .68%(A)
NET EXPENSES .68%(A) .68%(A)
PORTFOLIO TURNOVER 96% 18%
NET ASSETS, ENDING (IN THOUSANDS) $94,803 $80,385
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 5,091 4,633
PERIODS ENDED
JUNE 30, DECEMBER 31,
GROWTH PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $64.83 $56.04
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .01 .01
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.18 8.79
TOTAL FROM INVESTMENT OPERATIONS 2.19 8.80
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - (.01)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE 2.19 8.79
NET ASSET VALUE, ENDING $67.02 $64.83
TOTAL RETURN 3.38% 15.70%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME .02%(A) .12%(A)
TOTAL EXPENSES .89%(A) .90%(A)
EXPENSES BEFORE OFFSETS .80%(A) .79%(A)
NET EXPENSES .79%(A) .79%(A)
PORTFOLIO TURNOVER 53% 18%
NET ASSETS, ENDING (IN THOUSANDS) $211,285 $197,953
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 3,153 3,053
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31,
SMALL CAPITALIZATION PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $56.42 $44.05
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (0.13) (0.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 0.48 12.86
TOTAL FROM INVESTMENT OPERATIONS 0.35 12.81
DISTRIBUTIONS FROM
NET REALIZED GAINS - (0.44)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE 0.35 12.37
NET ASSET VALUE, ENDING $56.77 $56.42
TOTAL RETURN .62% 29.10%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.47%)(A) (.54%)(A)
TOTAL EXPENSES 1.00%(A) 1.00%(A)
EXPENSES BEFORE OFFSETS .92%(A) .90%(A)
NET EXPENSES .90%(A) .90%(A)
PORTFOLIO TURNOVER 64% 21%
NET ASSETS, ENDING (IN THOUSANDS) $133,515 $125,577
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 2,387 2,226
PERIODS ENDED
JUNE 30, DECEMBER 31,
MIDCAP GROWTH PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $31.50 $26.40
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.03) -
NET REALIZED AND UNREALIZED GAIN (LOSS) 5.70 5.82
TOTAL FROM INVESTMENT OPERATIONS 5.67 5.82
DISTRIBUTIONS FROM
NET REALIZED GAINS - (0.72)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE 5.67 5.10
NET ASSET VALUE, ENDING $37.17 $31.50
TOTAL RETURN 18.00% 22.09%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.19%)(A) (.06%)(A)
TOTAL EXPENSES .97%(A) .97% (A)
EXPENSES BEFORE OFFSETS .86%(A) .84%(A)
NET EXPENSES .84%(A) .84%(A)
PORTFOLIO TURNOVER 67% 21%
NET ASSETS, ENDING (IN THOUSANDS) $105,778 $75,643
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 2,845 2,401
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31,
EMERGING GROWTH PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $37.86 $25.82
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.05) (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.79) 12.06
TOTAL FROM INVESTMENT OPERATIONS (.84) 12.04
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.84) 12.04
NET ASSET VALUE, ENDING $37.02 $37.86
TOTAL RETURN (2.22%) 46.63%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME (.25%)(A) (.45%)(A)
TOTAL EXPENSES .99%(A) .98%(A)
EXPENSES BEFORE OFFSETS .88%(A) .86%(A)
NET EXPENSES .85%(A) .85%(A)
PORTFOLIO TURNOVER 101% 18%
NET ASSETS, ENDING (IN THOUSANDS) $137,423 $128,040
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 3,713 3,382
PERIODS ENDED
JUNE 30, DECEMBER 31,
RESEARCH PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $22.99 $20.24
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (.01) -
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.39 3.01
TOTAL FROM INVESTMENT OPERATIONS 1.38 3.01
DISTRIBUTIONS FROM
NET REALIZED GAINS - (0.26)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE 1.38 2.75
NET ASSET VALUE, ENDING $24.37 $22.99
TOTAL RETURN 6.00% 14.90%
RATIOS TO AVERAGE NET ASSETS:
NET NVESTMENT INCOME (.11%)(A) (.04%)(A)
TOTAL EXPENSES 1.36%(A) 1.42%(A)
EXPENSES BEFORE OFFSETS .91%(A) .89%(A)
NET EXPENSES .86%(A) .86%(A)
PORTFOLIO TURNOVER 54% 16%
NET ASSETS, ENDING (IN THOUSANDS) $29,377 $25,929
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 1,205 1,128
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31,
GROWTH WITH INCOME PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $21.17 $20.24
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .05 .02
NET REALIZED AND UNREALIZED GAIN (LOSS) .10 .92
TOTAL FROM INVESTMENT OPERATIONS .15 .94
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - (.01)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE .15 .93
NET ASSET VALUE, ENDING $21.32 $21.17
TOTAL RETURN .71% 4.65%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME .44%(A) .44%(A)
TOTAL EXPENSES 1.19%(A) 1.26%(A)
EXPENSES BEFORE OFFSETS .91%(A) .88%(A)
NET EXPENSES .88%(A) .88%(A)
PORTFOLIO TURNOVER 37% 16%
NET ASSETS, ENDING (IN THOUSANDS) $34,023 $34,742
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 1,595 1,641
PERIODS ENDED
JUNE 30, DECEMBER 31,
INDEX 500 PORTFOLIO 2000 1999^
NET ASSET VALUE, BEGINNING $167.30 $155.01
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .84 .31
NET REALIZED AND UNREALIZED GAIN (LOSS) (2.07) 12.23
TOTAL FROM INVESTMENT OPERATIONS (1.23) 12.54
DISTRIBUTIONS FROM
NET INVESTMENT INCOME - (.25)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (1.23) 12.29
NET ASSET VALUE, ENDING $166.07 $167.30
TOTAL RETURN (.74%) 8.09%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 1.03%(A) 1.16%(A)
TOTAL EXPENSES .44%(A) .40%(A)
EXPENSES BEFORE OFFSETS .29%(A) .29%(A)
NET EXPENSES .28%(A) .28%(A)
PORTFOLIO TURNOVER 26% 5%
NET ASSETS, ENDING (IN THOUSANDS) $205,540 $206,872
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 1,238 1,237
<PAGE>
FINANCIAL HIGHLIGHTS
PERIODS ENDED
JUNE 30, DECEMBER 31,
MONEY MARKET PORTFOLIO 2000 1999^^
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .03 .01
TOTAL FROM INVESTMENT OPERATIONS .03 .01
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.03) ( .01)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE - -
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.03% .99%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 6.03%(A) 5.67%(A)
TOTAL EXPENSES .34%(A) .33%(A)
EXPENSES BEFORE OFFSETS .28%(A) .26%(A)
NET EXPENSES .26%(A) .26%(A)
NET ASSETS, ENDING (IN THOUSANDS) $138,949 $199,938
NUMBER OF SHARES OUTSTANDING,
ENDING (IN THOUSANDS) 138,947 199,936
(A) ANNUALIZED
^ FROM NOVEMBER 1, 1999 INCEPTION.
^^ FROM OCTOBER 29, 1999 INCEPTION.
<PAGE>
