<PAGE>
The PRUDENTIAL [Logo]
Semi-Annual
Report to
Contract
Owners
June 30, 1995
PRUCO LIFE'S
PRUSELECT 1-Service Mark- AND
PRUSELECT II-Service Mark-
[Logo]
The Prudential Series Fund, Inc.
and
Pruco Life Variable Universal Account
<PAGE>
TABLE OF CONTENTS
NOTE: **The back inside cover provides important toll-free
telephone numbers for customer service.
PAGE
I. LETTER TO CONTRACT OWNERS
Summarizes the results of The Prudential Series Fund, Inc. and
provides an economic overview..................................... 1
II. THE PRUDENTIAL SERIES FUND, INC.
The Pruco Life Variable Universal Account is one of several
Accounts investing in The Prudential Series Fund, Inc.
1. FINANCIAL STATEMENTS............................................ A1
2. INVESTMENT OBJECTIVES........................................... B1
3. SCHEDULE OF INVESTMENTS
Lists the holdings in each of the investment options of The
Prudential Series Fund, Inc. ................................... B2
4. NOTES TO THE FINANCIAL STATEMENTS............................... C1
III. APPENDIX
1. GLOSSARY........................................................ i
2. BOARDS OF DIRECTORS............................................. iii
Please note: This Semi-Annual Report includes the financial statements of The
Prudential Series Fund. It does not include the financial statements for the
separate account that corresponds to your product. Product financial statements
will be included in the Annual Report dated December 31, 1995. If you would like
separate account financial statements as of June 30, 1995, please call the
appropriate number shown inside the back cover of this Report.
This Report may be used with the public only when preceded or accompanied by
current prospectuses for The Prudential Series Fund, the applicable variable
life or annuity product, and the current Performance Data Update for the
applicable product. The Performance Data Update shows historical investment
performance after the deduction of all product related expenses. The
prospectuses contain more information concerning charges and expenses and should
be read carefully before you invest or send money.
Variable life and annuity products are offered by Pruco Securities Corp., a
subsidiary of The Prudential. The principal business address of Pruco Securities
is 1111 Durham Avenue, South Plainfield, NJ 07080.
<PAGE>
STOCK & BOND MARKETS
REVIEW
THE PRUDENTIAL SERIES FUND, INC.
SIX MONTHS ENDED JUNE 30, 1995
DEAR CONTRACT OWNER:
OVER THE PAST SIX MONTHS, BOTH THE U.S. STOCK AND BOND MARKETS ENJOYED THEIR
BEST PERFORMANCE IN NINE YEARS. AFTER 1994'S WEAK SHOWING, BOTH MARKETS CAME
ROARING BACK IN THE FIRST SIX MONTHS OF THIS YEAR WITH DOUBLE-DIGIT RETURNS.
THESE RESULTS SHOW WHY IT MAY BE HELPFUL TO STAY THE COURSE.
HISTORY SHOWS THAT STOCKS TEND TO PERFORM BETTER THAN OTHER INVESTMENTS IN THE
LONG RUN -- DESPITE SHORT-TERM VOLATILITY. BONDS CAN PERFORM BETTER THAN FIXED
INTEREST ACCOUNTS, TOO. BUT THAT'S ADVICE EASIER TO GIVE THAN TO TAKE. SO WE
APPRECIATE THE CONFIDENCE YOU HAVE SHOWN IN US BY ENTRUSTING YOUR LIFE INSURANCE
AND ANNUITY ASSETS TO THE PRUDENTIAL OR ONE OF ITS SUBSIDIARIES. WE'RE
ESPECIALLY PLEASED TO NOTE THAT COLLECTIVELY, YOU NOW HAVE MORE THAN $15 BILLION
INVESTED IN THE PRUDENTIAL SERIES FUND.
WE'VE WRITTEN THIS REPORT TO EXPLAIN THE INVESTMENT STRATEGIES AND PERFORMANCE
OF YOUR PORTFOLIOS OVER THE LAST SIX MONTHS. WE CONCLUDE WITH OUR OUTLOOK FOR
THE SECOND HALF OF 1995. IN SHORT, WE EXPECT THE POSITIVE MOMENTUM TO CONTINUE,
ALBEIT AT A MUCH SLOWER PACE. WE DO NOT EXPECT A REPEAT OF THE FIRST HALF'S
UNUSUALLY ROBUST PERFORMANCE ANY TIME SOON.
WHY DID INTEREST RATES FALL? DIDN'T THEY JUST RISE?
STOCKS SOAR; BONDS REBOUND IN BEST SIX MONTHS IN 9 YEARS.
Stocks and bonds both soared during the first half of 1995, with stocks powered
primarily by higher corporate profits and bonds by lower interest rates.
Both stocks and bonds posted double-digit returns for the six months ended June
30, their best six months since the period ending in April 1986. The Standard &
Poor's 500 Stock Index, a broad measure of the U.S. stock market, rose 20%,
while the Lehman Brothers Aggregate Bond Index rose 11%. Foreign markets also
fared well (although not as well as the U.S.), with the Morgan Stanley World
Index gaining 9% in dollar terms. Last year's investment of choice, money market
funds, finished in last place as 3-month U.S. Treasury bills earned just 3% in
total return.
Interest rates peaked last fall when an inflation scare drove the yield of the
30-year U.S. Treasury bond to 8.2%. Eight months later on June 30, that yield
had plummeted to 6.6%, falling almost as rapidly as it rose last year. Why the
sharp change in sentiment? Last year the Federal Reserve started driving up
short-term interest rates, doubling them to 6% by February 1995, to try to slow
the rapidly growing economy. When economic growth did slow and the inflation
threat did break, interest rates began declining.
The last interest rate to fall was the very short-term overnight lending rate,
or federal funds target rate, which is set by the Federal Reserve. The rate was
reduced on July 5, by a quarter of a percentage point, to 5.75%. Thus, money
market rates peaked in the first half of the year, along with consumer lending
rates, like the prime rate.
Let's take a closer look at the stock and bond markets on the following pages:
IMPORTANT NOTE:
THE RATES OF RETURN QUOTED ON THE FOLLOWING PAGES REFLECT DEDUCTION OF
INVESTMENT MANAGEMENT FEES AND FUND EXPENSES BUT NOT PRODUCT CHARGES. THEY
REFLECT THE REINVESTMENT OF DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS. THEY ARE
NOT AN ESTIMATE OR A GUARANTEE OF FUTURE PERFORMANCE. CONTRACT UNIT VALUES
INCREASE OR DECREASE BASED ON THE PERFORMANCE OF THE PORTFOLIO. CHANGES IN
CONTRACT VALUES DEPEND NOT ONLY ON THE INVESTMENT PERFORMANCE OF THE PORTFOLIO,
BUT ALSO ON THE INSURANCE AND ADMINISTRATIVE CHARGES, APPLICABLE SALES CHARGES,
AND THE MORTALITY AND EXPENSE RISK CHARGE APPLICABLE UNDER A CONTRACT. THESE
CONTRACT CHARGES EFFECTIVELY REDUCE THE DOLLAR AMOUNT OF ANY NET GAINS AND
INCREASE THE DOLLAR AMOUNT OF ANY NET LOSSES. YOUR PRUDENTIAL/PRUCO SECURITIES
REPRESENTATIVE CAN PROVIDE YOU WITH ACTUAL RATES OF RETURN FOR YOUR VARIABLE
LIFE INSURANCE OR ANNUITY CONTRACT, SHOWING THE EFFECT OF THESE CHARGES.
1
<PAGE>
U.S. STOCKS
REVIEW
STOCKS FOLLOW BONDS HIGHER; DOW HITS 4000, THEN 4500.
Stocks were propelled higher by strong corporate earnings and lower interest
rates, which typically reduce operating costs and spark consumer spending.
Technology, financial services and energy stocks led the market. The Dow Jones
Industrial Average, a very narrow but frequently cited market average, set new
records of 4000 in March and 4500 in June. Just to put the first half's highly
unusual performance in perspective, consider that the stock market's rise in
1995 to date is more than its increase in all of 1993 and 1994 combined.
- TECHNOLOGY stocks were turbo-charged, returning 39%, as a group. In
companies around the globe, improving technology has helped increase
productivity and has kept wages under control. As a result, worldwide
demand is surging for technology-related goods and services. In addition,
home computer sales have risen dramatically in the U.S. as CD-ROM and
memory prices have fallen. Many analysts believe that technology shares
have now risen so far, so fast, that they may be vulnerable to a
correction. However, the underlining business fundamentals continue to
improve and do not show signs of weakening.
- FINANCIAL stocks, including banks, insurance and financial services
companies, returned 27% as a group. Financial services stocks were direct
beneficiaries of lower long-term interest rates, which made the cost of
their raw material -- money -- cheaper. Bank stocks also benefited from
continuing industry-wide consolidation.
- ENERGY stocks rose as demand for energy from industries around the world
began to outstrip supply for the first time in years. In addition, the
number of oil rigs in service has decreased dramatically, increasing the
value of oil exploration and production companies.
What didn't do as well?
- RETAIL stocks did not match the market's torrid pace, falling victim to a
slump in consumer spending. Personal income grew only moderately, while
baby boomers appeared to be less interested in fashion and more concerned
with saving.
- AUTO stocks fell back from their highs to their near-recessionary price
levels of 1990, and did not recover. Even though interest rates were
falling, recession-wary investors were not inclined to spend on big-ticket
items like cars.
U.S. BONDS
REVIEW
A ROUT TURNED INTO A RALLY.
After one of its worst years on record in 1994, the bond market rebounded in a
stunning rally, turning in its best performance in years. The yield on the
30-year U.S. Treasury bond fell to 6.6% by June 30, pushing prices up to levels
unseen since early 1994. Virtually all bonds more than made up the ground they
had lost last year.
Long-term bonds performed best, since they appreciated most when interest rates
fell. Long-term U.S. corporate bonds returned 17% over the six months, as
measured by Lehman. Investment-grade corporate bonds were the leading sector,
followed by high yield and government bonds. Mortgage backed securities did well
early in the year but trailed later as lower interest rates raised prepayment
fears.
FOREIGN STOCKS
REVIEW
FOREIGN MARKETS TRAIL U.S. FOR FIRST TIME IN TWO YEARS.
For the first time in two years, foreign stock markets lagged the U.S. market,
with the Morgan Stanley World Index gaining 9.4% in U.S. dollars. The leading
regions overseas were Europe, where stocks rose 13%, and the Pacific Basin
(excluding Japan), where stocks rose 7%. While Japan's stock market led the
world in 1994, prices fell by 8% this year.
There were plenty of reasons. Foreign markets were unnerved by the bankruptcy of
Baring Securities PLC, the Kobe earthquake in Japan and the Mexican currency
crisis. In Japan, the rising yen hurt exports, and political uncertainty and a
banking crisis sent stock prices lower. And despite stronger corporate earnings,
stock markets in Europe and the Pacific Rim languished until the second quarter,
when investor confidence improved.
U.S. stocks are now at all-time highs at a time when economic growth is expected
to slow. Overseas, the situation is reversed: the economies of many countries
are starting to pick up, while their stock markets appear underpriced. Foreign
corporate earnings are rising faster than U.S. earnings; they are projected to
rise 20% to 25% this year overseas, and only 10% in the U.S., as measured by the
S&P 500. Of course, foreign stocks pose a higher level of risk than U.S. stocks.
But we believe that the long-term advantages offered by foreign stocks warrant
consideration in a well-diversified portfolio held by more aggressive investors.
Investing in foreign securities carries additional risks that are not normally
associated with domestic investing - including currency risk, liquidity risk and
event risk.
OPPORTUNITIES IN EUROPE AND THE PACIFIC BASIN.
2
<PAGE>
HOW THE MARKETS COMPARE
Total Returns By Asset Class
[Graph]
26.1%
13.7%
11.2%
13.6
12.6 1 year: 6/30/94 to 6/30/95
10.0%
4.9% 20 year: Average Annual Returns
7.7%
0 5 10 15 20 25 30%
*Lehman Aggregate start date is as of 12/31/75
Source: Prudential Investment Corporation. For purposes of comparison only.
Bonds as measured by the Lehman Brothers Government/Corporate Aggregate. U.S.
stocks as measured by the S&P 500 Index. Global stocks as measured by the Morgan
Stanley Capital International-World Index. U.S. money markets as measured by
Lipper Money Market Average.
Financial Markets change, so an investment's past performance should never be
used to predict future results. This chart compares the 12-month total return
and the average annual total return over 20 years (both including reinvested
dividends) for various categories. There are different risks associated with
each investment sector, which should be considered before investing.
MONEY MARKET PORTFOLIO
Supported by one final increase in short-term interest rates in February, the
MONEY MARKET PORTFOLIO provided a total return of 2.9% over the past six months,
according to Lipper Analytical Services. At June 30, its 7-day yield had risen
to 5.73%, up from 5.47% on December 31 and 3.97% on June 30, 1994. (SOURCE:
IBC/DONOGHUE)
The Portfolio's yield increased partly because the Federal Reserve raised the
federal funds (overnight) target interest rate in February by one half of a
percentage point, to 6%, the last step in its year-long fight against inflation.
The Federal Reserve REDUCED this same target rate on July 5 by a quarter of a
percentage point, in light of the slowing economy. This will reduce the
Portfolio's yield.
Early in the year, as short-term interest rates were rising, Portfolio Manager
Robert Felice reduced the Portfolio's weighted average maturity so he could
reinvest assets more quickly in higher-yielding securities. As it became
apparent that the economy was weakening, Felice INCREASED the weighted average
maturity to a maximum of 64 days (up from 33 days at the beginning of the year),
after he believed interest rates had peaked.
The securities in the Money Market Portfolio are all of the highest quality.
This Portfolio does not invest in any of the risky derivatives that the SEC has
suggested are inappropriate for money market funds, such as inverse floaters, or
dual or cost-of-funds index floaters. We emphasize a conservative,
quality-oriented investment approach. Despite this, there can be no guarantee
that the Portfolio will be able to maintain a stable share value of $10.
INCEPTION DATE: 5/1/83
--------------------------------------------------------------------------------
RISING INTEREST RATES PUSHED MONEY MARKET RATES HIGHER
Historical Yield Curve
[Graph]
8%
7.5 12/31/94
7
6.5 6/30/95
6
5.5
3 6 1 2 3 5 10 30
MONTHS YEARS
Source: Bloomberg, L.P.
Q & A
PORTFOLIO MANAGER ROBERT FELICE
Q. WHAT IS YOUR OUTLOOK FOR MONEY MARKET RATES FOR THE REST OF THE YEAR?
A. Money market yields have peaked, after rising for the last year and a half.
In fact, the yield of the one-year U.S. Treasury bill has fallen by one and a
half percentage points, to 5.6%. We expect market interest rates will trend
lower through year-end. Should the Federal Reserve continue to reduce short-term
interest rates later this year, money market yields will fall further.
Q. HOW SHOULD INVESTORS USE THE MONEY MARKET PORTFOLIO?
A. This is the place for SHORT-TERM investments. Money market funds, such as
this Money Market Portfolio, offer relatively low risk to principal because
their share prices remain constant. Long-term investors whose goal is to grow
their share prices to outpace inflation should not place their assets in money
market funds for a considerable period of time. The main risk in a money market
investment is that it will not keep pace with inflation.
3
<PAGE>
BOND PORTFOLIO
The BOND PORTFOLIO delivered 12.1% in total return in the first half of 1995 as
interest rates fell sharply. The Portfolio placed 14th in a field of 39
BBB-rated corporate bond funds in variable life/annuity products. (SOURCE:
LIPPER ANALYTICAL SERVICES, INC.)
The Bond Portfolio is well-diversified across all sectors of the bond market,
holding intermediate- and long-term U.S. government and corporate bonds as well
as mortgage backed securities.
This Portfolio performed better than the average fund by holding as much as 71%
of assets in corporate and dollar-denominated foreign bonds when strong
corporate earnings helped these sectors lead the market.
We will watch our corporate exposure as the economy slows. Corporate sales and
earnings will continue to do well as long as the economy does not slow too much.
The Portfolio held an intermediate-term effective maturity ranging from 6.4 to
7.5 years. Generally, bonds in this maturity range rise in value more slowly
than longer term bonds as interest rates fall, and hold their value better than
long-term bonds as interest rates rise.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN BOND PORTFOLIO VS. LEHMAN AGGREGATE INDEX AND
LIPPER VIP CORPORATE BOND AVERAGE OVER TEN YEARS(1)
[Graph]
LB Aggregate Index $25,961
Lipper VIP Corp BBB $24,650
Bond Portfolio $ $24,796
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK TEN RANK
MONTH YEAR YEARS YEARS YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Bond Portfolio 12.1% 14/39 12.8% 17/39 7.6% 16/32 9.6% 11/29 9.5% 6/11
Lipper VIP Corp BBB(2) 11.8 12.7 7.8 9.3 9.5
Lehman Aggregate Index 11.4 12.6 7.5 9.4 10.0
INCEPTION DATE: 5/1/83
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The Lehman Aggregate Index (LAI) is comprised of 5,088 government and corporate
bonds. The LAI is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the LAI may differ substantially from the securities in the Portfolio.
The LAI is not the only index that may be used to characterize performance of
income funds and other indices may portray different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
DATA BANK
PORTFOLIO MANAGER BARBARA KENWORTHY
--------------------------------------------------------------------------------
THE PORTFOLIO CHANGES AS WE FIND OPPORTUNITIES.
NOW: AS OF 6/30/95.
Corporate . . . . . . . . . 52%
Foreign (US$) . . . . . . . 19
Treasury. . . . . . . . . . 19
Agency. . . . . . . . . . . .5
Mortgage. . . . . . . . . . .4
Asset-backed. . . . . . . . .1
Cash. . . . . . . . . . . . .0
LAST YEAR: AS OF 12/31/94.
Corporate . . . . . . . . . 29%
Foreign (US$) . . . . . . . 20
Treasury. . . . . . . . . . 32
Agency . . . . . . . . . . .2
Mortgage. . . . . . . . . . 13
Asset-backed. . . . . . . . .1
Cash. . . . . . . . . . . . .3
CORPORATE:
Bonds issued by major U.S. corporations.
FOREIGN:
Dollar-denominated bonds issued by foreign companies or governments.
TREASURY:
Backed by the full faith and credit of the U.S. government.
AGENCY:
Issued by U.S. government agencies, with implied U.S. government guarantee.
MORTGAGE:
Bonds backed by pools of home mortgages.
ASSET-BACKED:
Backed by pools of loan receivables, such as credit card and auto loans.
--------------------------------------------------------------------------------
THE PORTFOLIO'S CREDIT QUALITY.
AS OF 6/30/95.
AAA. . . . . . . . . . . . . . . 30%
AA . . . . . . . . . . . . . . . .5
A. . . . . . . . . . . . . . . . 21
Baa. . . . . . . . . . . . . . . 23
Ba.. . . . . . . . . . . . . . . 17
B. . . . . . . . . . . . . . . . .0
Non-Rated. . . . . . . . . . . . .4
Cash . . . . . . . . . . . . . . .0
4
<PAGE>
GOVERNMENT SECURITIES PORTFOLIO
The GOVERNMENT SECURITIES PORTFOLIO provided a total return of 12% for the six
months ended June 30, ranking 4th out of 26 variable life/annuity U.S.
Government portfolios. (SOURCE: LIPPER ANALYTICAL SERVICES, INC.)
The Government Securities Portfolio invests in intermediate- and long-term bonds
issued by the U.S. government and its agencies. (Neither the market value of
U.S. government securities nor the Portfolio's shares are guaranteed by the U.S.
government.)
The Portfolio performed much better than its competition because it held a
slightly longer effective maturity. When interest rates decline, bonds with
longer maturities appreciate faster than those with shorter maturities. Over the
last six months, the Portfolio's effective maturity has ranged from 7.5 to 8.4
years.
A new manager was appointed in May: Barbara Kenworthy, who also manages the
Prudential Series Fund Bond Portfolio. Barbara has more than 20 years experience
managing bond investments. She joined The Prudential last year from the Dreyfus
Corp. where she managed several bond funds rated four and five stars by
Morningstar. Barbara also manages several Prudential mutual funds, including the
$1.5 billion Prudential Government Income Fund and the new Prudential
Diversified Bond Fund.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN GOVERNMENT SECURITIES PORTFOLIO VS. LEHMAN
GOVERNMENT INDEX AND LIPPER VIP U.S. GOVERNMENT AVERAGE SINCE INCEPTION(1)
[Graph]
LB Government Index $17,682
Lipper VIP US Government Avg $17,103
Government Securities Portfolio $ $17,431
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Gov't Sec. Portfolio 12.0% 4/26 12.5% 4/24 7.9% 1/19 9.1% 7/14 9.4% 5/12
Lipper VIP US Gov't Avg(2) 10.7 11.3 6.9 8.9 9.0
Lehman Gov't Index 11.2 12.1 7.7 9.4 9.4
INCEPTION DATE: 5/1/89
</TABLE>
Some U.S. government securities are guaranteed as to timely payment of principal
and interest. The underlying securities in the Portfolio carry this guarantee;
not the Portfolio itself. Mortgage backed securities entail additional
prepayment and extension risk.
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The Lehman Government Index is a weighted index comprised of securities issued
or backed by the U.S. government, its agencies and instrumentalities with a
remaining maturity of one to 30 years. The LGI is an unmanaged index and
includes the reinvestment of all dividends, but does not reflect the payment of
transaction costs and advisory fees associated with an investment in the
Portfolio. The securities that comprise the LGI may differ substantially from
the securities in the Portfolio. The LGI is not the only index that may be used
to characterize performance of income funds and other indices may portray
different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
DATA BANK
PORTFOLIO MANAGER BARBARA KENWORTHY
--------------------------------------------------------------------------------
THE PORTFOLIO CHANGES AS WE FIND OPPORTUNITIES.
NOW: AS OF 6/30/95.
Treasury. . . . . . . . . . 53%
Mortgage. . . . . . . . . . 29
Agency. . . . . . . . . . . 11
Asset-backed. . . . . . . . 3
CMO . . . . . . . . . . . . 0
Cash. . . . . . . . . . . . 4
LAST YEAR: AS OF 12/31/94.
Treasury. . . . . . . . . . 37%
Mortgage. . . . . . . . . . 23
Agency. . . . . . . . . . . 12
Asset-backed. . . . . . . . 8
CMO . . . . . . . . . . . . 2
Cash. . . . . . . . . . . . 6
TREASURY:
Backed by the full faith and credit of the U.S. government.
MORTGAGE:
Bonds backed by pools of home mortgages.
AGENCY:
Issued by U.S. government agencies, with implied U.S. government guarantee.
ASSET-BACKED:
Bonds backed by pools of collateralized loan receivables, such as credit card
and auto loans.
CMO:
Collateralized mortgage obligations, parts of MBS pools.
--------------------------------------------------------------------------------
THE PORTFOLIO IS HIGH QUALITY.
HOW IT RATED AS OF 6/30/95
AAA. . . . . . . . . . . . . . 96.5%
AA . . . . . . . . . . . . . . .0.0
Non-Rated. . . . . . . . . . . 0.0
Cash . . . . . . . . . . . . . .3.5
5
<PAGE>
ZERO COUPON BOND PORTFOLIOS
(CURRENTLY ONLY AVAILABLE IN DISCOVERY LIFE PLUS AND PRUDENTIAL VARIABLE
APPRECIABLE LIFE POLICIES)
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN ZERO COUPON BOND 1995 PORTFOLIO VS. LEHMAN
GOVERNMENT INDEX AND LIPPER VIP TARGET MATURITY AVERAGE OVER TEN YEARS(1)
[Graph]
LB Government Index $22,019
Lipper VIP Target Mat Avg $23,952
Zero Coupon 1995 Portfolio $ $22,795
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Zero Coupon 1995 Port 4.1% 17/19 5.2% 19/19 5.4% 13/14 8.6% 12/13 9.2% 2/2
Lipper VIP Target Mat Avg(2) 13.3 14.3 9.7 11.1 9.3
Lehman Gov't Index 11.2 12.1 7.7 9.4 8.8
INCEPTION DATE: 2/12/86
</TABLE>
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN ZERO COUPON BOND 2000 PORTFOLIO VS. LEHMAN
GOVERNMENT INDEX AND LIPPER VIP TARGET MATURITY AVERAGE OVER TEN YEARS(1)
[Graph]
LB Government Index $22,019
Lipper VIP Target Mat Avg $23,952
Zero Coupon 1995 Portfolio $ $22,761
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Zero Coupon 2000 Port 14.3% 8/19 14.1% 8/19 10.0% 5/14 11.4% 6/13 11.5% 1/2
Lipper VIP Target Mat Avg(2) 13.3 14.3 9.7 11.1 9.3
Lehman Gov't Index 11.2 12.1 7.7 9.4 8.8
INCEPTION DATE: 2/12/86
</TABLE>
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN ZERO COUPON BOND 2005 PORTFOLIO VS. LEHMAN
GOVERNMENT INDEX AND LIPPER VIP TARGET MATURITY AVERAGE OVER TEN YEARS(1)
[Graph]
LB Government Index $17,682
Lipper VIP Target Mat $19,346
Zero Coupon 2005 Portfolio $ $20,127
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Zero Coupon 2005 Port 20.0% 5/19 20.7% 5/19 13.4% 4/14 13.1% 4/13 12.0% 4/12
Lipper VIP Target Mat Avg(2) 13.3 14.3 9.7 11.1 10.9
Lehman Gov't Index 11.2 12.1 7.7 9.4 9.4
INCEPTION DATE: 5/1/89
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The Lehman Government Index is a weighted index comprised of securities issued
or backed by the U.S. government, its agencies and instrumentalities with a
remaining maturity of one to 30 years. The LGI is an unmanaged index and
includes the reinvestment of all dividends, but does not reflect the payment of
transaction costs and advisory fees associated with an investment in the
Portfolio. The securities that comprise the LGI may differ substantially from
the securities in the Portfolio. The LGI is not the only index that may be used
to characterize performance of income funds and other indices may portray
different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
PORTFOLIO NOTES
FALLING INTEREST RATES DURING THE FIRST HALF OF THIS YEAR SHARPLY INCREASED THE
MARKET VALUE OF ZERO COUPON BONDS (AND THESE PORTFOLIOS), JUST AS RISING RATES
LAST YEAR DECREASED THEIR VALUE. A NEW MANAGER WAS APPOINTED IN MAY: BARBARA
KENWORTHY, WHO ALSO MANAGES THE PRUDENTIAL SERIES FUND BOND PORTFOLIO AND THE
GOVERNMENT SECURITIES PORTFOLIO.
ZERO COUPON BOND 1995 PORTFOLIO
THE ZERO COUPON BOND 1995 PORTFOLIO RETURNED 4.1% FOR THE SIX MONTHS ENDED JUNE
30.
NOTE: THIS PORTFOLIO MATURES ON NOVEMBER 15, 1995. BY THIS MATURITY DATE,
POLICYHOLDERS SHOULD SELECT ANOTHER PORTFOLIO INTO WHICH THE PRUDENTIAL CAN
REINVEST THEIR PROCEEDS. SHOULD WE NOT RECEIVE INSTRUCTIONS, WE WILL
AUTOMATICALLY TRANSFER THESE FUNDS TO THE MONEY MARKET PORTFOLIO.
ZERO COUPON BOND 2000 PORTFOLIO
THE ZERO COUPON BOND 2000 PORTFOLIO POSTED A TOTAL RETURN OF 14.3% FOR THE SIX
MONTHS ENDED JUNE 30. THIS PORTFOLIO CURRENTLY HAS AN AVERAGE MATURITY OF
APPROXIMATELY 5 YEARS. IT HAS AN INTERMEDIATE-TERM MATURITY AND THUS INCREASED
IN VALUE FASTER THAN 1995 PORTFOLIO, BUT MORE SLOWLY THAN THE 2005 PORTFOLIO.
ZERO COUPON BOND 2005 PORTFOLIO
THE ZERO COUPON BOND 2005 PORTFOLIO HAD A TOTAL RETURN OF 20% FOR THE SIX MONTHS
ENDED JUNE 30. THIS PORTFOLIO CURRENTLY HAS AN AVERAGE MATURITY OF APPROXIMATELY
10 YEARS. ITS LONGER MATURITY LED IT TO PERFORM BETTER THAN THE OTHER TWO ZERO
COUPON PORTFOLIOS THIS YEAR AS INTEREST RATES FELL.
6
<PAGE>
CONSERVATIVELY/AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIOS
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO VS. S&P
500, LEHMAN AGGREGATE INDEX AND LIPPER VIP FLEX AVERAGE OVER TEN YEARS(1)
[Graph]
$40,000 ---- S&P 500 $39,255
35,000 ____ Lipper VIP Flex Avg $29,656
30,000 **** LB Aggregate Index $25,962
25,000 #### Conservatively Mgd Flex Portfolio $26,703
20,000
15,000
10,000
85 86 87 88 89 90 91 92 93 94
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK TEN RANK
MONTH YEAR YEARS YEARS YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Conservatively Mgd Flex Port 9.8% 54/62 11.4% 53/59 9.0% 37/51 9.6% 35/47 10.3% 9/11
Lipper VIP Flex Avg(2) 13.1 15.8 10.1 10.6 11.5
S&P 500 20.2 26.1 13.3 12.1 14.7
Lehman Aggregate Index 11.4 12.6 7.5 9.4 10.0
INCEPTION DATE: 5/1/83
</TABLE>
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO VS. S&P
500, LEHMAN AGGREGATE INDEX AND LIPPER VIP FLEX AVERAGE OVER TEN YEARS(1)
[Graph]
$40,000 ---- S&P 500 $39,255
35,000 ____ Lipper VIP Flex Avg $29,656
30,000 **** LB Aggregate Index $25,962
25,000 #### Aggressively Mgd Flex Portfolio $29,765
20,000
15,000
10,000
85 86 87 88 89 90 91 92 93 94
-------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK TEN RANK
MONTH YEAR YEARS YEARS YEAR
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressively Mgd Flex Port 12.2% 40/62 14.9% 35/59 11.4% 11/51 11.1% 11/47 11.5% 6/11
Lipper VIP Flex Avg(2) 13.1 15.8 10.1 10.6 11.5
S&P 500 20.2 26.1 13.3 12.1 14.7
Lehman Aggregate Index 11.4 12.6 7.5 9.4 10.0
INCEPTION DATE: 5/1/83
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The S&P 500 is a capital weighted index, representing the aggregate market value
of the common equity of 500 stocks primarily traded on the New York Stock
Exchange. The S&P 500 is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the S&P 500 may differ substantially from the securities in the
Portfolio. The S&P 500 is not the only index that may be used to characterize
performance of this Portfolio and other indexes may portray different
comparative performance.
The Lehman Aggregate Index (LAI) is comprised of 5,088 government and corporate
bonds. The LAI is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the LAI may differ substantially from the securities in the Portfolio.
The LAI is not the only index that may be used to characterize performance of
income funds and other indices may portray different comparative performance.
The Lipper Variable Insurance Products (VIP) Flex Average is calculated by
Lipper Analytical Services, Inc. and reflects the investment return of
portfolios underlying variable life and insurance products. These returns are
net of investment fees and fund expenses but not product charges.
[Photo]
PORTFOLIO MANAGER MARK STUMPP
THE CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO ROSE 9.8% IN THE SIX MONTHS ENDED
JUNE 30, RANKING 54 OUT OF 62 VARIABLE LIFE/ANNUITY FLEXIBLE PORTFOLIOS.
(SOURCE: LIPPER ANALYTICAL SERVICES, INC.)
THE CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO INVESTS IN A MIX OF STOCKS, BONDS
AND MONEY MARKET SECURITIES. AS OF JUNE 30, IT HELD 41% OF ASSETS IN LARGE
COMPANY STOCKS, 33% IN BONDS AND 26% IN CASH. IT GENERALLY HOLDS MORE CASH AND
FEWER STOCKS THAN ITS AGGRESSIVE COUNTERPART.
PORTFOLIO MANAGER MARK STUMPP IS RELUCTANTLY BULLISH ON THE STOCK MARKET:
BULLISH BECAUSE INTEREST RATES HAVE FALLEN THIS YEAR, BUT RELUCTANT BECAUSE
STOCK PRICES HAVE ALREADY RISEN STEADILY. HE BELIEVES THAT STOCK PRICES CAN
CONTINUE TO RISE AS LONG AS INTEREST RATES DON'T.
THE AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO APPRECIATED 12.2% DURING THE SIX
MONTHS ENDED JUNE 30, RANKING 40 OUT OF 62 VARIABLE LIFE/ANNUITY FLEXIBLE
PORTFOLIOS. (SOURCE: LIPPER ANALYTICAL SERVICES)
THE PORTFOLIO INVESTS IN A MIX OF STOCKS, BONDS AND MONEY MARKET SECURITIES. ON
JUNE 30, IT HELD 56% OF ASSETS IN LARGE COMPANY STOCKS, 12% IN SMALL COMPANY
STOCKS, 28% IN BONDS AND 4% IN CASH.
THE AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO GENERALLY HOLDS MORE ASSETS IN
STOCKS, INCLUDING SMALL COMPANY STOCKS, AND LESS IN CASH THAN THE CONSERVATIVELY
MANAGED FLEXIBLE PORTFOLIO.
7
<PAGE>
HIGH YIELD BOND PORTFOLIO
The HIGH YIELD BOND PORTFOLIO rose 9.5% in total return in the six months ended
June 30, ranking 30th in a field of 35 high yield portfolios in variable
life/annuity products. (Source: Lipper Analytical Services, Inc.)
The Portfolio seeks a high total return by investing in a diversified portfolio
of non-investment grade or "junk bonds" rated BB or below by the major rating
agencies. These bonds have higher coupons and offer greater total return
potential than better quality bonds, but they also carry significantly more
credit risk. The Portfolio is well-diversified across industries and companies.
We manage the Portfolio conservatively, researching credit intensively to find
bonds with improving credit quality that may be upgraded.
Portfolio Co-Managers Lars Berkman and Mike Snyder have worked this year to
contain risk by upgrading the Portfolio's quality. They are emphasizing bonds
from established companies with proven products and strong management, bonds
that are more senior in the firm's capital structure (those with higher claims
on the company's assets), and bonds from economically defensive companies (those
that will do well even if the economy does slow more than we think it will):
supermarkets, hotels and gaming, cable and health care. We are also
consolidating the number of securities to permit more intensive scrutiny of each
holding.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN HIGH YIELD BOND PORTFOLIO VS. LEHMAN AGGREGATE
INDEX AND LIPPER VIP CORPORATE BOND AVERAGE SINCE INCEPTION(1)
[Graph]
$24,000 ----- LB High Yield Index $22,341
20,000 _____ Lipper VIP High Yield Avg $21,148
16,000 - - - High Yield Bond Portfolio $ $19,315
12,000
8,000
86 87 88 89 90 91 92 93 94
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High Yield Bond Portfolio 9.5% 30/35 7.7% 28/33 10.5% 10/25 12.6% 13/24 8.2% 13/14
Lipper VIP High Yield Avg(2) 10.9 10.3 10.3 12.9 9.7
Lehman High Yield Index 12.5 13.9 11.0 14.2 10.1
INCEPTION DATE: 2/23/87
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The Lehman High Yield Index (LHYI) is comprised of 781 noninvestment grade
bonds. The LHYI is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the LHYI may differ substantially from the securities in the Portfolio.
The LHYI is not the only index that may be used to characterize performance of
income funds and other indices may portray different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
DATA BANK
LARS BERKMAN
[Photo]
MIKE SNYDER
PORTFOLIO CO-MANAGERS
--------------------------------------------------------------------------------
THE PORTFOLIO'S QUALITY.
NOW: AS OF 6/30/95.
BAA . . . . . . . . . . . . .0%
BA. . . . . . . . . . . . . 12
B . . . . . . . . . . . . . 66
CAA or below. . . . . . . . .8
Non-Rated . . . . . . . . . 12
Cash. . . . . . . . . . . . .2
LAST YEAR: AS OF 12/31/94.
BAA . . . . . . . . . . . . .0%
BA. . . . . . . . . . . . . .6
B . . . . . . . . . . . . . 69
CAA or below. . . . . . . . .9
Non-Rated . . . . . . . . . 11
Cash. . . . . . . . . . . . .5
--------------------------------------------------------------------------------
TOP FIVE HOLDINGS.
AS OF 6/30/95
Host Marriott. . . . . . . . . .2.2%
Pathmark Stores. . . . . . . . .2.1
Continental Cablevision. . . . .1.8
Gaylord Container. . . . . . . .1.6
Ralph's Grocery. . . . . . . . .1.6
8
<PAGE>
STOCK INDEX PORTFOLIO
The STOCK INDEX PORTFOLIO gained 20% in the first six months of the year, in
line with the 20% gain of the S&P 500, the unmanaged stock market index this
Portfolio is designed to track. Investment management fees account for the
slight difference in returns.
The Portfolio holds all 500 stocks included in the S&P 500 Index, and attempts
to duplicate its performance. Portfolio Manager John Moschberger manages the
Portfolio by investing funds received daily while trying to minimize transaction
costs.
During the first half of the year, the S&P 500 rose more than it did in all of
1993 and 1994. Also in the first half, index funds invested in the S&P 500
performed better than nine out of ten mutual funds managed by professional stock
pickers, according to Lipper Analytical Services, Inc.
The best industries in the S&P 500 in the first six months of the year -- and
therefore in this Portfolio as well -- were technology, finance and consumer
growth stocks. Technology and consumer growth stocks were also among the top
performers last year, along with energy.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN STOCK INDEX PORTFOLIO VS. S&P 500 AND LIPPER VIP
EQUITY INCOME AVERAGE SINCE INCEPTION(1)
$30,000
- - - S & P $27,609
----- Lipper VIP Gro & Inc Avg $26,042
_____ Stock Index Portfolio $28,872
25,000
10,000
15,000
10,000
86 87 88 89 90 91 92 93 94
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
Six One Three Five Since
Month Year Years Years Inception
<S> <C> <C> <C> <C> <C>
Stock Index Portfolio* 20.0% 25.6% 12.8% 11.6% 14.8%
Lipper VIP Grow & Income Avg(2) 16.6 20.6 12.4 11.5 13.2
S&P 500 20.2 26.1 13.3 12.1 14.2
</TABLE>
INCEPTION DATE: 10/19/87
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
*Lipper lists the Stock Index Portfolio in its S&P 500 Index Universe. For
purposes of the Contractowner Letter, we compared the Portfolio to Lipper's
Growth & Income Universe: therefore, no ranks are given.
The S&P 500 is a capital weighted index, representing the aggregate market value
of the common equity of 500 stocks primarily traded on the New York Stock
Exchange. The S&P 500 is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the S&P 500 may differ substantially from the securities in the
Portfolio. The S&P 500 is not the only index that may be used to characterize
performance of this Portfolio and other indexes may portray different
comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
PORTFOLIO MANAGER
JOHN MOSCHBERGER
--------------------------------------------------------------------------------
THE S&P 500: WHAT'S IN IT?
SECTORS OF THE INDEX
AS OF 6/30/95
Consumer Growth...28%
Industrial........17
Utility...........13
Technology........12
Financial.........12
Energy............10
Consumer Cyclical. 8
--------------------------------------------------------------------------------
SECTOR RETURNS
NOW: SIX MONTHS ENDED 6/30/95
Technology . . . . . . . . .39%
Finance. . . . . . . . . . .27
Consumer Growth . . . . . .19
Industrial . . . . . . . . .18
Energy . . . . . . . . . . .15
Utility . . . . . . . . . .13
Consumer Cyclical . . . . .12
0 5 10 15 20 25 30 35
LAST YEAR: YEAR ENDED 1994
Technology . . . . . . . . . . 20%
Consumer Growth. . . . . . . . 8
Energy . . . . . . . . . . . . 4
Industrial . . . . . . . . . . -1
Finance. . . . . . . . . . . . -3
Utility. . . . . . . . . . . . -8
Consumer Cyclical. . . . . . .-12
-15 -10 -5 0 5 10 15
9
<PAGE>
HIGH DIVIDEND STOCK PORTFOLIO
The HIGH DIVIDEND STOCK PORTFOLIO rose 14.1% for the six months ended June 30,
ranking 12 of 14 equity income variable life/annuity portfolios. (Source:
Lipper Analytical Services, Inc.)
This Portfolio invests primarily in common stocks that have historically paid
higher-than-average dividends. These are theoretically less volatile than other
stocks because their generous dividend payment can help cushion any price losses
in the stock itself. Energy, finance and utility stocks are traditionally
considered high dividend stocks.
Portfolio Manager Warren Spitz is emphasizing industries that should benefit
from continued economic growth, such as industrial, finance and energy
companies. In fact, more than 50% of the Portfolio's assets are in industrial or
finance stocks. Financial stocks were the second-highest performing sector so
far this year, returning 27%.
Energy stocks benefited from increased worldwide demand for oil and natural gas
to power industry and homes. The energy sector returned 15% in the first half.
We also benefited from an increased exposure to technology stocks, the top
performing market sector in the first half. Technology is our fourth largest
position.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN HIGH DIVIDEND STOCK PORTFOLIO VS. S&P 500 AND
LIPPER GROWTH AVERAGE SINCE INCEPTION(1)
$30,000
- - - S & P $25,646
----- Lipper VIP Gro & Inc Avg $22,490
_____ Stock Index Portfolio $26,127
25,000
10,000
15,000
10,000
87 88 89 90 91 92 93 94
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
High Dividend Stock Portfolio 14.1% 12/14 17.0% 7/12 15.5% 2/5 14.0% 2/5 13.9% 1/4
Lipper VIP Equity Income Avg(2) 15.8 18.7 13.9 12.0 12.5
S&P 500 20.2 26.1 13.3 12.1 13.7
</TABLE>
INCEPTION DATE: 2/19/88
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first calendar
month of performance.
The S&P 500 is a capital weighted index, representing the aggregate market value
of the common equity of 500 stocks primarily traded on the New York Stock
Exchange. The S&P 500 is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the S&P 500 may differ substantially from the securities in the
Portfolio. The S&P 500 is not the only index that may be used to characterize
performance of this Portfolio and other indexes may portray different
comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
Equity Income Funds: seeks relatively high current income and growth of income
through investing 60% or more of its portfolio in equities.
Q & A
PORTFOLIO MANAGER
WARREN SPITZ
Q. WHAT IS GROWTH AND INCOME INVESTING?
A. "Growth" and "income" are simply the two individual components of total
return. For investors whose goal is maximum total return, long-term growth
through stock price gains is the surest way to get there. But income in the form
of dividends can cushion the effects of any short-term stock price declines.
Reinvested dividend income can also actually help increase total return -- in
the past 30 years, 50% of the S&P 500's total return was produced by reinvested
dividends. So in our Portfolio, we look for stocks of companies that provide
both growth and income. While no investment strategy is foolproof, this is a
conservative way to take part in the equity market.
Q. HOW DO YOU BALANCE THESE TWO OBJECTIVES WHEN STRUCTURING THE PORTFOLIO?
A. Overall, we search for stocks that offer as much current income as possible
without sacrificing too much growth potential. But we try to be nimble,
adjusting the Portfolio to reflect changing market themes. For instance, we
don't think the stock market offers a lot of income opportunities right now, so
we have reduced our income requirements -- and increased our emphasis on
long-term growth potential -- to make sure we reach our total return goals. We
think that's a fair trade-off.
10
<PAGE>
COMMON STOCK PORTFOLIO
The COMMON STOCK PORTFOLIO climbed 16.6% over the six months ended June 30. It
ranked 47th among 85 variable life/annuity growth portfolios this year.
(Source: Lipper Analytical Services, Inc.)
Portfolio Manager Tom Jackson adheres to a value investment style: he looks for
large company stocks with prices that are low compared to the company's
potential earnings, cash flow and book value.
As a typical "value" investor, Jackson held as much as 20% of assets in cash
last year, when he was having trouble finding undervalued stocks to buy. Late in
the year, he started to put that cash to work by buying stocks. He selectively
added to positions in financial stocks whose prices had fallen as interest rates
rose. This was a good move: financial stocks were among the best performers in
the market in the first half of the year. The Portfolio holds more than twice as
much in financial stocks as the S&P 500 average. By June 30, cash had fallen to
13% of assets.
Jackson maintained large positions in industrial and consumer-oriented cyclical
stocks in the auto and retail industries, as well. These represent attractive
values that Jackson believes will appreciate over time.
--------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN HIGH DIVIDEND STOCK PORTFOLIO VS. S&P 500 AND
LIPPER GROWTH AVERAGE SINCE INCEPTION(1)
$45,000
- - - - S&P 500 $39,255
------- Lipper VIP Growth Avg $35,380
_______ Common Stock Portfolio $40,297
40,000
35,000
30,000
20,000
15,000
10,000
85 86 87 88 89 90 91 92 93 94
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock Portfolio 16.6% 47/85 22.2% 37/83 16.1% 10/51 14.7% 8/43 15.0% 6/24
Lipper VIP Growth Avg(2) 17.6 23.0 13.3 11.9 13.6
S&P 500 20.2 26.1 13.3 12.1 14.7
</TABLE>
INCEPTION DATE: 5/1/83
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first calendar
month of performance.
The S&P 500 is a capital weighted index, representing the aggregate market value
of the common equity of 500 stocks primarily traded on the New York Stock
Exchange. The S&P 500 is an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs and advisory
fees associated with an investment in the Portfolio. The securities that
comprise the S&P 500 may differ substantially from the securities in the
Portfolio. The S&P 500 is not the only index that may be used to characterize
performance of this Portfolio and other indexes may portray different
comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
Growth Funds: invests in companies whose long-term earnings are expected to grow
significantly faster than the earnings of the stocks represented in the major
unmanaged indices.
Q & A
GROWTH STOCK PORTFOLIO
PORTFOLIO MANAGER TOM JACKSON
Q. THE STOCK MARKET HAS RISEN VERY FAR, VERY FAST THIS YEAR. WHY?
A. Interest rates rose last year, people got nervous, and stocks went nowhere.
This year, it looks like the Federal Reserve has beaten back inflation. So
investors are happy again, and they are bidding up stock prices, hoping that the
Federal Reserve will be cutting interest rates soon.
Q. HOW DO YOU INVEST IN THIS TYPE OF MARKET?
A. I don't invest in the market -- I invest in the stocks. I'm a value
investor. I look for companies that are priced too cheap not to own. Last year,
I had trouble finding bargains. This year, I haven't had any trouble.
Q. WHAT ARE YOUR FAVORITE KINDS OF STOCKS NOW?
A. I like financial services, retail and auto stocks. Financial stocks were
hurt last year by rising interest rates. Retail and auto stocks have been
depressed by concerns of a slower-growing economy. So far this year, financial
stocks have performed well. I expect that retail and auto stocks will follow
suit, once consumer confidence rises again.
11
<PAGE>
GROWTH STOCK PORTFOLIO
The GROWTH STOCK PORTFOLIO rose 11.8% during the two-month period
since its inception on May 1, 1995. (Source: Prudential
Insurance Mutual Fund Reporting)
The Portfolio seeks long-term growth through investment primarily
in stocks of established companies with above average growth
prospects. These are companies that have growing sales and
earnings, high return on equity and assets (or other strong
financial data) and are attractively priced. Such companies
generally enjoy a unique market niche, a promising new product
profile and/or superior management.
Portfolio Manager David Poiesz is a senior vice president and
director of Jennison Associates, which he joined in 1983.
Previously, he was a vice president and research analyst with
Dean Witter Reynolds, Inc. Jennison Associates is a wholly-owned
subsidiary of The Prudential.
The Portfolio has a substantial exposure to technology stocks. In
addition, it has above average holdings in consumer growth
stocks, health care and business services in its broadly
diversified portfolio.
----------------------------------------------------------------
VALUE OF $10,000 INVESTED IN GROWTH STOCK PORTFOLIO VS. LIPPER
VIP GROWTH AVERAGE AND S&P 500 SINCE INCEPTION(1)
$12,000
10,000
8,000
6,000
4,000 Growth Stock Portfolio
2,000 Lipper VIP Growth Avg.
0 S&P 500
----------------------------------------------------------------
RETURNS THROUGH JUNE 30, 1995
SINCE
INCEPTION
Growth Stock Portfolio 11.8%
Lipper VIP Growth Avg.(2) 7.4
S&P 500 6.5
INCEPTION DATE: 5/1/95
Source: Prudential Insurance Mutual Fund Reporting
(1)Past performance is not predictive of future performance.
Portfolio performance does not reflect Separate Account expenses
or other product charges.
(2)Lipper provides data on a monthly basis, so for comparative
purposes, the Lipper Average and Index inception returns reflect
the fund's first calendar month of performance.
The S&P 500 is a capital weighted index, representing the
aggregate market value of the common equity of 500 stocks
primarily traded on the New York Stock Exchange. The S&P 500 is
an unmanaged index and includes the reinvestment of all
dividends, but does not reflect the payment of transaction costs
and advisory fees associated with an investment in the Portfolio.
The securities that comprise the S&P 500 may differ substantially
from the securities in the Portfolio. The S&P 500 is not the only
index that may be used to characterize performance of this
Portfolio and other indexes may portray different comparative
performance.
The Lipper Variable Insurance Products (VIP) Average is
calculated by Lipper Analytical Services, Inc. and reflects the
investment return of portfolios underlying variable life and
insurance products. These returns are net of investment fees and
fund expenses but not product charges.
Growth Funds: invests in companies whose long-term earnings are
expected to grow significantly faster than the earnings of the
stocks represented in the major unmanaged indices.
Q & A
PORTFOLIO MANAGER
DAVID POIESZ
Q. WHAT ARE GROWTH STOCKS AND WHY SHOULD WE INVEST IN THEM?
A. Growth company stocks generally generate faster profit growth
than the average company, plus an above-average return on equity
and assets. In a slowing economy, these companies maintain profit growth
rates better than economically-sensitive companies. Many growth
stocks are selling at attractrive values.
Q. WHAT DO YOU LOOK FOR IN A GROWTH COMPANY?
A. We look for attractive earnings growth over the next four to
six quarters. We're long-term investors, but we've learned that
current earnings are often one of the more reliable indicators of
what to expect in the future.
We also want to see financial discipline, superior management or
leadership, strong market position, unique marketing competence
and strong research and development.
Q. HOW DO YOU GET YOUR INFORMATION?
A. We do our own extensive research on the companies. As part of
that research, we meet one-on-one with company management and
competitors.
12
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO
The SMALL CAPITALIZATION STOCK PORTFOLIO gained 6.6% during the two-month
period since its inception on May 1, 1995. (Source: Prudential Insurance
Mutual Fund Reporting)
The Portfolio seeks long-term growth through investment in publicly traded
companies with market values of generally less than $1 billion by attempting
to duplicate the performance of the S&P 600 Small Cap Index, a
widely-recognized barometer of small stocks. The stocks in which the
Portfolio invests are more volatile than the shares of larger, more
highly-capitalized and established companies.
The portfolio manager is Wai Chiang, Director of Portfolio Management for
Prudential Diversified Investment Strategies, who has been with the firm
since 1986. He manages ten different funds, and has started up 11 different
portfolios for Prudential, including the Prudential Series Fund Stock Index
Portfolio in 1987.
At inception, the Small Capitalization Stock Portfolio owned 595 of the 600
companies that comprise the S&P 600 Small Cap Index.
--------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN SMALL CAPITALIZATION PORTFOLIO VS. LIPPER VIP
SMALL CO. GROWTH AVERAGE AND S&P 600 SINCE INCEPTION(1)
$12,000
10,000
8,000
6,000
4,000 Small Cap. Stock Portfolio
2,000 Lipper VIP Small Co. Growth Avg.(2)
0 S&P 600
------------------------------------------------------------------------------
RETURNS THROUGH JUNE 30, 1995
SINCE
INCEPTION
-----------------
Small Cap. Stock Portfolio 6.6%
Lipper VIP Small Co. Growth Avg.(2) 7.8
S&P 600 7.2
INCEPTION DATE: 5/1/95
Source: Prudential Insurance Mutual Fund Reporting
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product
charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes,
the Lipper Average and Index inception returns reflect the fund's first
calendar month of performance.
The S&P Small Cap 600 Index is a capital weighted index, representing the
aggregate market value of the common equity of 600 small company stocks. The
S&P 600 is an unmanaged index and includes the reinvestment of all dividends,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Portfolio. The securities that comprise
the S&P 600 may differ substantially from the securities in the Portfolio.
The S&P 600 is not the only index that may be used to characterize
performance of this Portfolio and other indexes may portray different
comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
PORTFOLIO MANAGER
WAI CHIANG
Q. WHAT DOES "SMALL
CAPITALIZATION" MEAN?
A. Capitalization is market value -- the worth of all the outstanding shares
of a company's stock. In the S&P 600, the stocks on average have a market
value of less than $1 billion. In contrast, a large company like IBM has a
market value of $56 billion.
Q. WHY INVEST IN SMALL COMPANY STOCKS?
A. Historically, small stocks have performed better than larger company
stocks, when performance is measured over a long period of time. Earlier this
year, the larger stocks appreciated more, but recently we have seen the
smaller ones close that gap.
Q. WHAT IS IN THE S&P 600?
A. As far as industries are concerned, the S&P 600 is very much like its
cousin, the S&P 500, the well-known barometer of large stocks, except that it
measures small stocks. Industrial stocks are the largest single portion of
the S&P 600, at 76% of assets, followed by financials at 17%, utilities at 5%
and transportation at 2%. By industry, 19% of assets are in consumer
cyclicals (such as autos), 18% in technology, 16% in financials, and 16% in
consumer staples (such as foods).
13
<PAGE>
GLOBAL EQUITY PORTFOLIO
The GLOBAL EQUITY PORTFOLIO advanced 9.5%, ranking 7 out of 31 variable
life/annuity global equity portfolios. (SOURCE: LIPPER ANALYTICAL
SERVICES, INC.)
The Portfolio seeks long-term capital appreciation by investing primarily in
common stocks and common stock equivalents of foreign and domestic
corporations.
The Portfolio benefited from investments in the U.S., where good stock
selection helped us outperform the U.S. market. We also received good
performance from our European stocks, which did well after a slow start.
A broadening economic recovery, relaxed trade barriers and a wave of
corporate restructurings helped make Europe the leading region overseas in
the first half of the year, and we expect that to continue. Our largest
investment now is in Europe, at 26% of total assets.
The Portfolio was fortunate to hold fewer assets (13%) in Japan than many
other funds, since Japanese stocks have tumbled this year after leading the
world in 1994.
The Portfolio was hurt by the poor performance of the smaller Pacific Rim
countries, where we held 20% of assets. Over the long term, though, we remain
confident that some of the world's best growth opportunities are to be found
there.
--------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN GLOBAL EQUITY PORTFOLIO VS. MORGAN STANLEY WORLD
INDEX AND LIPPER VIP GLOBAL AVERAGE SINCE INCEPTION(1)
$30,000 - - - MSCI World Index $17,654
----- Lipper VIP Global Avg $18,474
25,000 ===== Global Equity Portfolio $18,007
20,000
15,000
10,000
88 89 90 91 92 93 94
------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
<CAPTION>
SIX RANK ONE RANK THREE RANK FIVE RANK SINCE RANK
MONTH YEAR YEARS YEARS INCEPTION
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Global Equity Portfolio 9.5% 7/31 8.3% 13/28 12.9% 5/16 7.7% 7/12 9.1% 5/8
Lipper VIP Global Avg(2) 6.1 8.2 10.7 7.8 9.9
Morgan Stanley World Index 9.4 11.2 13.1 7.7 8.7
INCEPTION DATE: 9/19/88
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product
charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first calendar
month of performance.
Foreign investments are subject to the risks of currency fluctuation and the
impact of social, political and economic change.
The Morgan Stanley Index is a weighted index comprised of approximately 1500
companies listed on the stock exchanges of the U.S.A., Europe, Canada,
Australia, New Zealand and the Far East. The combined market capitalization
of these companies represents approximately 60% of the aggregate market value
of the stock exchanges in the countries comprising the World Index. The World
Index is an unmanaged index and includes the reinvestment of all dividends,
but does not reflect the payment of transaction costs and advisory fees
associated with an investment in the Portfolio. The securities that comprise
the World Index may differ substantially from the securities in the
Portfolio. The World Index is not the only index that may be used to
characterize performance of global funds and other indexes may portray
different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
PORTFOLIO MANAGER
DAN DUANE
Q. WHAT HAS HELD BACK PERFORMANCE OF FOREIGN MARKETS THIS YEAR AFTER THEIR
GOOD SHOWINGS OVER THE LAST TWO YEARS?
A. Within a short six-month period, foreign investors faced an unexpected
drastic decline in the Mexican stock market, the Kobe earthquake, the
bankruptcy of Baring Securities and successive all-time lows for the dollar
against the Japanese yen and German mark. These events worried global
investors, sending them to more established markets like the U.S. or even
the perceived security of cash. These events show why global investors must
keep in mind that foreign investing involves risks above and beyond those of
U.S. investments, including social, political, currency and economic risks.
Q. ARE YOU STILL LOOKING FOR THE BULK OF YOUR GROWTH OPPORTUNITIES OUTSIDE
JAPAN?
A. Yes, the Portfolio holds a fairly small percentage of assets in Japan.
Japanese stocks have been hurt by the strong yen, a stagnant economy and a
severe political crisis. I'm looking for better long-term growth
opportunities in the smaller southeast Pacific markets, particularly in
Singapore. I think the last six months have created some real values in these
markets, the best in recent memory.
14
<PAGE>
NATURAL RESOURCES PORTFOLIO
The NATURAL RESOURCES PORTFOLIO gained 16% for the six months ended June 30,
ranking first out of 8 funds. (SOURCE: LIPPER ANALYTICAL SERVICES, INC.)
The Natural Resources Portfolio invests in companies that own, process or
provide goods and services in natural resources such as precious and base
metals, oil, natural gas and forest products. The Portfolio performed much
better than its peers because it held a higher percentage of assets in
energy. Energy stocks were the third best performing group in the S&P 500 in
the first six months of the year.
Portfolio Manager Leigh Goehring has made a substantial commitment to energy
stocks because worldwide demand for many kinds of energy is now catching up
with available supply. He holds 55% of assets in energy, up from 44% at
year-end. He found value in oil exploration companies, particularly offshore
drilling companies. To fund these purchases, Goehring sold some of the
Portfolio's base metals stocks.
------------------------------------------------------------------------------
VALUE OF $10,000 INVESTED IN NATURAL RESOURCES PORTFOLIO VS. S&P 500 AND
LIPPER VIP NATURAL RESOURCES AVERAGE SINCE INCEPTION(1)
$30,000
- - - - S&P 500 $26,173
25,000 ------- Lipper VIP Nat. Res Avg $15,601
======= Natural Resources Portfolio $22,154
20,000
15,000
10,000
88 89 90 91 92 93 94
------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH JUNE 30, 1995
<TABLE>
SIX ONE THREE FIVE SINCE
MONTHS RANK YEAR RANK YEARS RANK YEARS RANK INCEPTION RANK
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Natural Resources Portfolio 16.0% 1/8 13.8% 2/7 11.6% 2/7 9.7% 1/7 11.7% 1/3
Lipper VIP Nat. Resources Avg(2) 6.6 7.7 10.3 6.3 5.3
S&P 500 20.2 26.1 13.3 12.1 14.4
---------------------------------------------------------------------------------------------------------------
INCEPTION DATE: 5/1/88
</TABLE>
(1) Past performance is not predictive of future performance. Portfolio
performance does not reflect Separate Account expenses or other product
charges.
(2) Lipper provides data on a monthly basis, so for comparative purposes, the
Lipper Average and Index inception returns reflect the fund's first full
calendar month of performance.
The S&P 500 is a capital weighted index, representing the aggregate market
value of the common equity of 500 stocks primarily traded on the New York
Stock Exchange. The S&P 500 is an unmanaged index and includes the
reinvestment of all dividends, but does not reflect the payment of
transaction costs and advisory fees associated with an investment in the
Portfolio. The securities that comprise the S&P 500 may differ substantially
from the securities in the Portfolio. The S&P 500 is not the only index that
may be used to characterize performance of this Portfolio and other indexes
may portray different comparative performance.
The Lipper Variable Insurance Products (VIP) Average is calculated by Lipper
Analytical Services, Inc. and reflects the investment return of portfolios
underlying variable life and insurance products. These returns are net of
investment fees and fund expenses but not product charges.
PORTFOLIO MANAGER
LEIGH GOEHRING
Q: THIS HAS BEEN A PARTICULARLY GOOD SIX MONTHS FOR NATURAL RESOURCES
STOCKS, AFTER A DISAPPOINTING 1994. HAVE WE REACHED A TURNING POINT IN
NATURAL RESOURCES?
A: The natural resources market appears to be awakening from almost 15 years
of bearish slumber. Because global economies have been expanding, demand for
natural resources has been increasing, and may continue to do so far beyond
existing supplies. We are especially optimistic about energy stocks as they
should benefit from the healthy worldwide economic picture in 1995 and the
stabilization of U.S. interest rates. We also like fertilizer and timber
stocks.
Q. CAN CURRENCY FLUCTUATIONS INFLUENCE THE PERFORMANCE OF THIS PORTFOLIO?
A. Yes, in an indirect way. Commodity prices in the past six months, for
example, were helped by the strength of the German mark and the Japanese yen
compared to the U.S. dollar. That's because commodities are U.S.
dollar-denominated, so the dollar's weakness made commodities less expensive,
stimulating worldwide demand, which bolstered metals, oil, lumber and
fertilizer prices. The stocks of many of these companies rose as well.
15
<PAGE>
INVESTMENT ADVISOR'S OUTLOOK
WE'VE HAD A HIGHLY UNUSUAL RETURN FOR STOCKS IN A SIX-MONTH PERIOD -- THE
BEST IN NINE YEARS. WE THINK IT WILL BE NEARLY IMPOSSIBLE TO REPEAT ANYTIME
SOON. WE'RE EXPECTING RETURNS TO BE IN THE RANGE OF 8-10% A YEAR FROM THE
STOCK MARKET IN THE NEXT FEW YEARS, AND ENCOURAGE YOU TO ADJUST YOUR
EXPECTATIONS AS WELL.
WE ARE STICKING WITH OUR BIAS TOWARD BONDS FOR THE REMAINDER OF THE YEAR. WE
THINK THEY OFFER THE BEST COMBINATION OF RISK AND REWARD RIGHT NOW. WE'RE
NOT SURE THAT STOCKS WILL CONTINUE TO DO BETTER THAN BONDS -- IN FACT, WE
THINK THEY WILL PROVIDE ROUGHLY THE SAME RETURNS AS BONDS THROUGH THE REST OF
THE YEAR.
U.S. BONDS
OUTLOOK
Bond investors like a slowing economy. Why? Slower growth generally leads to
lower inflation because manufacturers find it hard to raise prices when
people have less money to spend. Low inflation makes it easier for interest
rates to fall and lower interest rates mean higher bond prices.
/ / In Treasury securities, the intermediate and long maturities are our
favorites now, since they would benefit most as interest rates fall.
/ / Corporate bonds, both investment grade and high yield, should be watched
carefully as the economy slows. Corporate sales and earnings will continue to
do well as long as the economy does not slow too much.
GLOBAL STOCKS
OUTLOOK
While the U.S. stock market has done well so far this year, many of the
foreign markets have lagged far behind. As a result we see opportunity in
foreign stocks.
/ / We expect economic growth in Europe will be the strongest in the
developed world, which bodes well for corporate profits.
/ / The Asian emerging markets look particularly appealing to us; their
economies continue to develop at a rapid pace, but stock valuations are very
attractive.
/ / The outlook for Japan is less promising, but we are finding that the
stocks of many good companies are selling at very cheap prices.
/ / We continue to avoid Latin America, which continues to recover from the
consequences of the Mexican peso's devaluation in December.
U.S. STOCKS
INCEPTION
We think the stock market's risk level has gone up, not just because stock
prices are higher now than they were at the beginning of the year, but also
because the economy is slowing down. Stocks generally don't thrive in a slow
economy, which usually is accompanied by lower corporate earnings.
/ / We still like financial stocks; these companies will profit as the
economy slows and interest rates fall.
/ / Electric utilities can benefit from falling interest rates. And a
slowdown in the pace of competition-enhancing regulatory changes continues to
help prices. We believe this is only a short-term phenomenon, however.
/ / We like consumer cyclical stocks, like retailers and automobile
manufacturers because they have already discounted a recession and are priced
to benefit as the stock market begins to anticipate another pickup in
economic growth later this year or early next year.
CAN WE HELP?
WE HOPE THE FIRST HALF OF THE YEAR HAS BEEN GOOD TO YOU, AND WISH YOU
CONTINUED HAPPY RETURNS FOR THE REST OF 1995.
YOUR PRUDENTIAL/PRUCO SECURITIES REPRESENTATIVE STANDS READY TO DISCUSS THESE
ISSUES AND TO ASSIST YOU IN ANY WAY HE OR SHE CAN. WE BELIEVE THAT YOUR
PERSONAL FINANCIAL REPRESENTATIVE -- THE ONE WHO UNDERSTANDS YOU AND YOUR
LONG-TERM INVESTMENT NEEDS -- IS A VERY VALUABLE RESOURCE GIVEN TODAY'S OFTEN
VOLATILE FINANCIAL MARKETS. WE URGE YOU TO TAKE ADVANTAGE OF YOUR
REPRESENTATIVE'S TRAINING AND EXPERIENCE TO HELP YOU MANAGE YOUR INSURANCE
NEEDS IN A MANNER MOST BENEFICIAL TO YOU AND YOUR FAMILY.
ALL OF US AT THE PRUDENTIAL THANK YOU FOR YOUR BUSINESS AND LOOK FORWARD TO
HELPING YOU PROVIDE FOR YOUR FUTURE FINANCIAL SECURITY.
E. MICHAEL CAULFIELD
PRESIDENT
THE PRUDENTIAL SERIES FUND, INC.
ROBERT P. HILL
CHAIRMAN
THE PRUDENTIAL SERIES FUND, INC.
16
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments................................ $ 617,586,455
Cash....................................... 81,762
Interest receivable........................ 2,374,797
Receivable for portfolio shares sold....... 172,000
--------------
Total Assets............................. 620,215,014
--------------
LIABILITIES
Accrued expenses........................... 144,213
Payable for securities purchased........... 12,000,000
Payable to investment adviser.............. 625,715
--------------
Total Liabilities........................ 12,769,928
--------------
NET ASSETS................................... $ 607,445,086
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 607,445
Paid-in capital, in excess of par........ 606,837,641
--------------
Net assets, June 30, 1995.................. $ 607,445,086
--------------
--------------
Net asset value per share of 60,744,509
outstanding shares of common stock
(authorized 200,000,000 shares).......... $ 10.0000
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 17,947,390
---------------
EXPENSES
Investment management fee.................. 1,155,515
Shareholders' reports...................... 58,771
Accounting fees............................ 38,804
Professional fees.......................... 16,551
Custodian expense -- net................... 5,431
Directors' expense......................... 1,061
Miscellaneous expenses..................... 888
S.E.C. fees................................ (3,240)
---------------
1,273,781
---------------
NET INVESTMENT INCOME........................ 16,673,609
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 16,673,609
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 16,673,609 $ 21,549,333
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (16,673,609) (21,549,333)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [7,721,600 and 18,862,200 shares, respectively]..................... 77,216,000 188,622,000
Reinvestment of dividend distributions [1,667,361 and 2,154,934 shares,
respectively]......................................................................... 16,673,609 21,549,333
Capital stock repurchased [(6,972,600) and (10,162,500) shares, respectively].......... (69,726,000) (101,625,000)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 24,163,609 108,546,333
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 24,163,609 108,546,333
NET ASSETS:
Beginning of period.................................................................... 583,281,477 474,735,144
------------------ -------------------
End of period.......................................................................... $ 607,445,086 $ 583,281,477
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A1
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
BOND PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$568,846,782)............................ $ 583,703,096
Cash....................................... 3,038
Interest receivable........................ 10,521,941
Receivable for securities sold............. 15,772,127
Receivable for portfolio shares sold....... 26,671
--------------
Total Assets............................. 610,026,873
--------------
LIABILITIES
Accrued expenses and other liabilities..... 60,851
Payable for securities purchased........... 20,763,395
Payable to investment adviser.............. 628,592
--------------
Total Liabilities........................ 21,452,838
--------------
NET ASSETS................................... $ 588,574,035
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 535,301
Paid-in capital, in excess of par........ 579,664,823
--------------
580,200,124
Undistributed net investment income........ 7,043,034
Accumulated net realized loss.............. (13,525,437)
Net unrealized appreciation................ 14,856,314
--------------
Net assets, June 30, 1995.................. $ 588,574,035
--------------
--------------
Net asset value per share of 53,530,051
outstanding shares of common stock
(authorized 200,000,000 shares).......... $ 10.9952
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 21,299,117
---------------
EXPENSES
Investment management fee.................. 1,112,208
Shareholders' reports...................... 61,861
Accounting fees............................ 41,272
Custodian expense -- net................... 16,429
Professional fees.......................... 10,561
Directors' expense......................... 1,095
Miscellaneous expenses..................... 823
S.E.C. fees................................ (3,513)
---------------
1,240,736
---------------
NET INVESTMENT INCOME........................ 20,058,381
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized loss on investments --
Securities transactions.................. (2,670,097)
Options written.......................... (48,047)
Net realized loss on investments......... (2,718,144)
Net unrealized gain on investments....... 46,788,462
---------------
NET GAIN ON INVESTMENTS.................... 44,070,318
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 64,128,699
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 20,058,381 $ 36,112,155
Net realized loss on investments....................................................... (2,718,144) (4,246,256)
Net unrealized gain (loss) on investments.............................................. 46,788,462 (50,839,016)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 64,128,699 (18,973,117)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (13,396,357) (35,627,999)
Net realized gain from investment transactions......................................... 0 (1,267,553)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (13,396,357) (36,895,552)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [863,885 and 3,414,897 shares, respectively]........................ 9,143,528 36,662,212
Reinvestment of dividend distributions [1,217,276 and 3,610,015 shares,
respectively]......................................................................... 13,396,357 36,895,552
Capital stock repurchased [(2,509,016) and (4,963,909) shares, respectively]........... (26,346,791) (52,266,357)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (3,806,906) 21,291,407
------------------ -------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS............................................................................ 46,925,436 (34,577,262)
NET ASSETS:
Beginning of period.................................................................... 541,648,599 576,225,861
------------------ -------------------
End of period.......................................................................... $ 588,574,035 $ 541,648,599
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A2
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
GOVERNMENT SECURITIES PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$451,860,188)............................ $ 475,207,360
Cash....................................... 880
Interest receivable........................ 7,341,861
--------------
Total Assets............................. 482,550,101
--------------
LIABILITIES
Accrued expenses........................... 5,046
Payable to investment adviser.............. 508,960
Payable for portfolio shares redeemed...... 22,977
--------------
Total Liabilities........................ 536,983
--------------
NET ASSETS................................... $ 482,013,118
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 420,570
Paid-in capital, in excess of par........ 477,564,780
--------------
477,985,350
Undistributed net investment income........ 6,424,398
Accumulated net realized losses............ (25,743,802)
Net unrealized appreciation................ 23,347,172
--------------
Net assets, June 30, 1995.................. $ 482,013,118
--------------
--------------
Net asset value per share of 42,057,044
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 11.4609
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 16,992,837
---------------
EXPENSES
Investment management fee.................. 939,386
Shareholders' reports...................... 52,453
Accounting fees............................ 35,024
Custodian expense -- net................... 27,878
Professional fees.......................... 4,502
Directors' expense......................... 1,097
Miscellaneous expenses..................... 742
S.E.C. fees................................ (11,433)
---------------
1,049,649
---------------
NET INVESTMENT INCOME........................ 15,943,188
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized loss on investments........... (14,819,989)
Net unrealized gain on investments......... 52,290,741
---------------
NET GAIN ON INVESTMENTS...................... 37,470,752
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 53,413,940
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 15,943,188 $ 33,431,928
Net realized loss on investments....................................................... (14,819,989) (10,380,614)
Net unrealized gain (loss) on investments.............................................. 52,290,741 (52,690,952)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 53,413,940 (29,639,638)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (10,450,285) (32,955,665)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [282,892 and 3,591,224 shares, respectively]........................ 3,122,625 41,656,912
Reinvestment of dividend distributions [909,163 and 3,094,061 shares, respectively].... 10,450,285 32,955,665
Capital stock repurchased [(5,742,230) and (5,912,961) shares, respectively]........... (62,097,752) (64,569,681)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (48,524,842) 10,042,896
------------------ -------------------
TOTAL DECREASE IN NET ASSETS............................................................. (5,561,187) (52,552,407)
NET ASSETS:
Beginning of period.................................................................... 487,574,305 540,126,712
------------------ -------------------
End of period.......................................................................... $ 482,013,118 $ 487,574,305
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A3
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
ZERO COUPON BOND 1995 PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$10,933,290)............................. $ 10,989,464
Cash....................................... 412
Interest receivable........................ 2,355
--------------
Total Assets............................. 10,992,231
--------------
LIABILITIES
Accrued expenses........................... 4,342
Payable to investment adviser.............. 25,181
--------------
Total Liabilities........................ 29,523
--------------
NET ASSETS................................... $ 10,962,708
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 10,252
Paid-in capital, in excess of par........ 10,693,282
--------------
10,703,534
Undistributed net investment income........ 68,505
Accumulated net realized gains............. 134,495
Net unrealized appreciation................ 56,174
--------------
Net assets, June 30, 1995.................. $ 10,962,708
--------------
--------------
Net asset value per share of 1,025,205
outstanding shares of common stock
(authorized 25,000,000 shares)........... $ 10.6932
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 456,052
---------------
EXPENSES
Investment management fee.................. 26,326
Accounting fees............................ 9,050
Custodian expense -- net................... 3,094
Shareholders' reports...................... 1,515
Directors' expense......................... 965
Professional fees.......................... 823
Miscellaneous expenses..................... 27
---------------
41,800
---------------
NET INVESTMENT INCOME........................ 414,252
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments........... 134,917
Net unrealized gain on investments......... 19,281
---------------
NET GAIN ON INVESTMENTS...................... 154,198
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 568,450
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 414,252 $ 1,027,426
Net realized gain on investments....................................................... 134,917 1,948
Net unrealized gain (loss) on investments.............................................. 19,281 (1,029,896)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 568,450 (522)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (330,231) (1,001,231)
Net realized gain from investment transactions......................................... 0 (3,573)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (330,231) (1,004,804)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [11,399 and 301,289 shares, respectively]........................... 123,131 3,295,000
Reinvestment of dividend distributions [30,920 and 94,042 shares, respectively]........ 330,231 1,004,804
Capital stock repurchased [(10,740) and (52,950) shares, respectively]................. (116,000) (592,000)
Initial capitalization repurchased [(680,487) and (18,027) shares, respectively]....... (7,346,505) (197,000)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (7,009,143) 3,510,804
------------------ -------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS............................................................................ (6,770,924) 2,505,478
NET ASSETS:
Beginning of period.................................................................... 17,733,632 15,228,154
------------------ -------------------
End of period.......................................................................... $ 10,962,708 $ 17,733,632
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A4
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
ZERO COUPON BOND 2000 PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$21,587,221)............................. $ 23,736,925
Cash....................................... 333
Interest receivable........................ 158
Receivable for portfolio shares sold....... 8,000
--------------
Total Assets............................. 23,745,416
--------------
LIABILITIES
Accrued expenses........................... 3,356
Payable to investment adviser.............. 36,574
--------------
Total Liabilities........................ 39,930
--------------
NET ASSETS................................... $ 23,705,486
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 17,752
Paid-in capital, in excess of par........ 20,473,621
--------------
20,491,373
Undistributed net investment income........ 118,370
Accumulated net realized gains............. 946,039
Net unrealized appreciation................ 2,149,704
--------------
Net assets, June 30, 1995.................. $ 23,705,486
--------------
--------------
Net asset value per share of 1,775,218
outstanding shares of common stock
(authorized 25,000,000 shares)........... $ 13.3536
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 566,517
---------------
EXPENSES
Investment management fee.................. 43,693
Accounting fees............................ 9,050
Custodian expense -- net................... 2,306
Shareholders' reports...................... 1,853
Professional fees.......................... 996
Directors' expense......................... 967
Miscellaneous expenses..................... 31
---------------
58,896
---------------
NET INVESTMENT INCOME........................ 507,621
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 945,638
Net unrealized gain on investments......... 1,484,654
---------------
NET GAIN ON INVESTMENTS...................... 2,430,292
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 2,937,913
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 507,621 $ 1,414,358
Net realized gain on investments....................................................... 945,638 38,776
Net unrealized gain (loss) on investments.............................................. 1,484,654 (3,049,221)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 2,937,913 (1,596,087)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (355,159) (1,398,377)
Net realized gain from investment transactions......................................... 0 (38,912)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (355,159) (1,437,289)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [75,888 and 102,167 shares, respectively]........................... 1,011,434 1,340,000
Reinvestment of dividend distributions [26,494 and 118,462 shares, respectively]....... 355,159 1,437,289
Capital stock repurchased [(57,786) and (60,345) shares, respectively]................. (767,434) (787,000)
Initial capitalization repurchased [(8,965) and (38,338) shares, respectively]......... (111,423) (507,000)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 487,736 1,483,289
------------------ -------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS............................................................................ 3,070,490 (1,550,087)
NET ASSETS:
Beginning of period.................................................................... 20,634,996 22,185,083
------------------ -------------------
End of period.......................................................................... $ 23,705,486 $ 20,634,996
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A5
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
ZERO COUPON BOND 2005 PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$16,498,474)............................. $ 18,640,990
Cash....................................... 959
Interest receivable........................ 47
--------------
Total Assets............................. 18,641,996
--------------
LIABILITIES
Accrued expenses........................... 3,553
Payable to investment adviser.............. 32,640
--------------
Total Liabilities........................ 36,193
--------------
NET ASSETS................................... $ 18,605,803
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 14,710
Paid-in capital, in excess of par........ 15,809,857
--------------
15,824,567
Undistributed net investment income........ 167,390
Accumulated net realized gains............. 471,330
Net unrealized appreciation................ 2,142,516
--------------
Net assets, June 30, 1995.................. $ 18,605,803
--------------
--------------
Net asset value per share of 1,471,046
outstanding shares of common stock
(authorized 50,000,000 shares)........... $ 12.6480
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Interest................................... $ 550,640
---------------
EXPENSES
Investment management fee.................. 35,561
Accounting fees............................ 9,050
Custodian expense -- net................... 2,773
Shareholders' reports...................... 1,731
Professional fees.......................... 1,177
Directors' expense......................... 965
Miscellaneous expenses..................... 25
---------------
51,282
---------------
NET INVESTMENT INCOME........................ 499,358
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 471,330
Net unrealized gain on investments......... 2,329,417
---------------
NET GAIN ON INVESTMENTS...................... 2,800,747
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 3,300,105
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 499,358 $ 955,176
Net realized gain on investments....................................................... 471,330 0
Net unrealized gain (loss) on investments.............................................. 2,329,417 (2,370,041)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 3,300,105 (1,414,865)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (355,166) (938,283)
Net realized gain from investment transactions......................................... 0 (3,855)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (355,166) (942,138)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [37,750 and 461,883 shares, respectively]........................... 426,000 5,262,071
Reinvestment of dividend distributions [27,883 and 86,081 shares, respectively]........ 355,166 942,138
Capital stock repurchased [(130,844) and (31,239) shares, respectively]................ (1,626,000) (366,000)
Initial capitalization repurchased [-0- and (122,127) shares, respectively]............ 0 (1,448,071)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (844,834) 4,390,138
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 2,100,105 2,033,135
NET ASSETS:
Beginning of period.................................................................... 16,505,698 14,472,563
------------------ -------------------
End of period.......................................................................... $ 18,605,803 $ 16,505,698
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A6
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$3,516,904,743).......................... $3,734,903,668
Cash....................................... 12,412
Interest and dividends receivable.......... 27,514,725
Receivable for securities sold............. 60,620,257
Receivable for portfolio shares sold....... 42,217
--------------
Total Assets............................. 3,823,093,279
--------------
LIABILITIES
Accrued expenses and other liabilities..... 414,926
Payable for securities purchased........... 101,908,062
Payable to investment adviser.............. 5,170,543
--------------
Total Liabilities........................ 107,493,531
--------------
NET ASSETS................................... $3,715,599,748
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 2,433,899
Paid-in capital, in excess of par........ 3,417,738,513
--------------
3,420,172,412
Undistributed net investment income........ 24,833,383
Accumulated net realized gains............. 52,595,028
Net unrealized appreciation................ 217,998,925
--------------
Net assets, June 30, 1995.................. $3,715,599,748
--------------
--------------
Net asset value per share of 243,389,851
outstanding shares of common stock
(authorized 300,000,000 shares).......... $ 15.2660
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $295,694 foreign
withholding tax)......................... $ 11,701,176
Interest................................... 77,685,355
---------------
89,386,531
---------------
EXPENSES
Investment management fee.................. 9,790,665
Shareholders' reports...................... 369,989
Accounting fees............................ 88,010
Custodian expense -- net................... 48,660
Professional fees.......................... 36,660
Miscellaneous expenses..................... 5,325
Directors' expense......................... 1,736
S.E.C. fees................................ (20,409)
---------------
10,320,636
---------------
NET INVESTMENT INCOME........................ 79,065,895
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 65,206,605
Net unrealized gain on investments......... 192,922,800
---------------
NET GAIN ON INVESTMENTS...................... 258,129,405
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 337,195,300
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 79,065,895 $ 122,670,711
Net realized gain on investments....................................................... 65,206,605 30,751,021
Net unrealized gain (loss) on investments.............................................. 192,922,800 (184,854,002)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 337,195,300 (31,432,270)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (51,639,099) (120,740,360)
Net realized gain from investment transactions......................................... 0 (37,214,012)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (51,639,099) (157,954,372)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [2,829,445 and 34,889,459 shares, respectively]..................... 41,722,491 514,344,688
Reinvestment of dividend distributions [3,386,272 and 11,198,868 shares,
respectively]......................................................................... 51,639,099 157,954,372
Capital stock repurchased [(11,219,884) and (5,887,371) shares, respectively].......... (164,422,329) (84,977,146)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (71,060,739) 587,321,914
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 214,495,462 397,935,272
NET ASSETS:
Beginning of period.................................................................... 3,501,104,286 3,103,169,014
------------------ -------------------
End of period.......................................................................... $ 3,715,599,748 $ 3,501,104,286
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A7
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$3,453,563,650).......................... $3,838,279,662
Cash....................................... 4,998
Interest and dividends receivable.......... 25,228,203
Receivable for securities sold............. 158,965,243
Receivable for portfolio shares sold....... 79,584
--------------
Total Assets............................. 4,022,557,690
--------------
LIABILITIES
Accrued expenses and other liabilities..... 484,965
Payable for securities purchased........... 188,433,210
Payable to investment adviser.............. 5,754,953
--------------
Total Liabilities........................ 194,673,128
--------------
NET ASSETS................................... $3,827,884,562
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 2,225,267
Paid-in capital, in excess of par........ 3,372,809,156
--------------
3,375,034,423
Undistributed net investment income........ 17,240,117
Accumulated net realized gains............. 50,894,010
Net unrealized appreciation................ 384,716,012
--------------
Net assets, June 30, 1995.................. $3,827,884,562
--------------
--------------
Net asset value per share of 222,526,686
outstanding shares of common stock
(authorized 300,000,000 shares).......... $ 17.2019
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $396,229 foreign
withholding tax)......................... $ 23,605,192
Interest................................... 52,031,461
---------------
75,636,653
---------------
EXPENSES
Investment management fee.................. 10,774,708
Shareholders' reports...................... 381,729
Custodian expense -- net................... 103,213
Accounting fees............................ 94,494
Professional fees.......................... 42,424
Miscellaneous expenses..................... 5,294
Directors' expense......................... 1,748
S.E.C. fees................................ (9,458)
---------------
11,394,152
---------------
NET INVESTMENT INCOME........................ 64,242,501
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCIES
Net realized gain (loss) on investments and
foreign currencies--
Securities transactions.................. 99,609,113
Foreign currency transactions............ (1,080)
Futures contracts........................ 554,055
---------------
Net realized gain on investments and
foreign currencies....................... 100,162,088
---------------
Net unrealized gain on investments and
foreign currencies--
Securities............................... 254,022,132
Foreign currency translations............ 1,637
---------------
Net unrealized gain on investments and
foreign currencies....................... 254,023,769
---------------
NET GAIN ON INVESTMENTS AND FOREIGN
CURRENCIES................................... 354,185,857
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 418,428,358
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 64,242,501 $ 98,878,114
Net realized gain on investments and foreign currency transactions..................... 100,162,088 23,838,273
Net unrealized gain (loss) on investments and foreign currency translations............ 254,023,769 (230,571,359)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 418,428,358 (107,854,972)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (39,231,762) (96,126,295)
Net realized gain from investment transactions......................................... 0 (98,311,584)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (39,231,762) (194,437,879)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [2,988,839 and 22,611,559 shares, respectively]..................... 48,651,140 370,947,414
Reinvestment of dividend distributions [2,285,065 and 12,531,550 shares,
respectively]......................................................................... 39,231,762 194,437,879
Capital stock repurchased [(7,420,508) and (4,617,224) shares, respectively]........... (120,735,235) (73,719,278)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (32,852,333) 491,666,015
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 346,344,263 189,373,164
NET ASSETS:
Beginning of period.................................................................... 3,481,540,299 3,292,167,135
------------------ -------------------
End of period.......................................................................... $ 3,827,884,562 $ 3,481,540,299
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A8
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
HIGH YIELD BOND PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$341,157,480)............................ $ 336,518,469
Cash....................................... 115,177
Interest and dividends receivable.......... 7,035,299
Receivable for securities sold............. 8,731,430
--------------
Total Assets............................. 352,400,375
--------------
LIABILITIES
Accrued expenses and other liabilities..... 39,192
Payable for securities purchased........... 14,931,868
Payable to investment adviser.............. 531,945
--------------
Total Liabilities........................ 15,503,005
--------------
NET ASSETS................................... $ 336,897,370
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 431,988
Paid-in capital, in excess of par........ 353,384,622
--------------
353,816,610
Undistributed net investment income........ 3,303,806
Accumulated net realized losses............ (15,584,035)
Net unrealized depreciation................ (4,639,011)
--------------
Net assets, June 30, 1995.................. $ 336,897,370
--------------
--------------
Net asset value per share of 43,198,847
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 7.7988
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends.................................. $ 393,058
Interest................................... 16,662,491
---------------
17,055,549
---------------
EXPENSES
Investment management fee.................. 886,954
Accounting fees............................ 60,685
Shareholders' reports...................... 30,983
Professional fees.......................... 10,950
Custodian expense -- net................... 5,706
Directors' expense......................... 1,041
Miscellaneous expenses..................... 360
---------------
996,679
---------------
NET INVESTMENT INCOME........................ 16,058,870
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized loss on investments........... (8,885,855)
Net unrealized gain on investments......... 22,334,642
---------------
NET GAIN ON INVESTMENTS...................... 13,448,787
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 29,507,657
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 16,058,870 $ 30,009,666
Net realized loss on investments....................................................... (8,885,855) (4,761,509)
Net unrealized gain (loss) on investments.............................................. 22,334,642 (34,417,342)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 29,507,657 (9,169,185)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (11,344,718) (30,650,298)
Net realized gain from investment transactions......................................... 0 (228)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (11,344,718) (30,650,526)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [1,754,909 and 7,836,280 shares, respectively]...................... 13,567,000 64,526,000
Reinvestment of dividend distributions [1,464,860 and 4,067,658 shares,
respectively]......................................................................... 11,344,718 30,650,526
Capital stock repurchased [(1,596,595) and (3,976,156) shares, respectively]........... (12,402,000) (31,985,000)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 12,509,718 63,191,526
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 30,672,657 23,371,815
NET ASSETS:
Beginning of period.................................................................... 306,224,713 282,852,898
------------------ -------------------
End of period.......................................................................... $ 336,897,370 $ 306,224,713
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A9
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
STOCK INDEX PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$631,457,411)............................ $ 833,016,338
Cash....................................... 464
Interest and dividends receivable.......... 1,810,111
Receivable for securities sold............. 48,315
Receivable for portfolio shares sold....... 90,641
--------------
Total Assets............................. 834,965,869
--------------
LIABILITIES
Accrued expenses........................... 61,036
Payable for securities purchased........... 3,501,416
Payable to investment adviser.............. 724,138
Payable for daily variation margin on open
futures contracts (see Note 2)........... 64,350
--------------
Total Liabilities........................ 4,350,940
--------------
NET ASSETS................................... $ 830,614,929
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 465,751
Paid-in capital, in excess of par........ 621,155,726
--------------
621,621,477
Undistributed net investment income........ 3,398,313
Accumulated net realized gains............. 3,550,987
Net unrealized appreciation
Securities................................. 201,558,927
Futures contracts.......................... 485,225
--------------
Net assets, June 30, 1995.................. $ 830,614,929
--------------
--------------
Net asset value per share of 46,575,103
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 17.8339
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $63,660 foreign
withholding tax)......................... $ 9,528,189
Interest................................... 769,653
---------------
10,297,842
---------------
EXPENSES
Investment management fee.................. 1,284,240
Shareholders' reports...................... 71,682
Accounting fees............................ 41,114
Custodian expense -- net................... 11,655
Professional fees.......................... 8,536
Directors' expense......................... 1,108
Miscellaneous expenses..................... 1,173
---------------
1,419,508
---------------
NET INVESTMENT INCOME........................ 8,878,334
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain on investments --
Securities transactions.................. 1,024,002
Futures contracts........................ 3,830,700
---------------
Net realized gain on investments........... 4,854,702
---------------
Net unrealized gain (loss) on investments
--
Securities............................... 120,586,637
Futures contracts........................ (29,925)
---------------
Net unrealized gain on investments......... 120,556,712
---------------
NET GAIN ON INVESTMENTS...................... 125,411,414
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 134,289,748
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 8,878,334 $ 15,899,579
Net realized gain (loss) on investments................................................ 4,854,702 (811,766)
Net unrealized gain (loss) on investments.............................................. 120,556,712 (8,435,032)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... 134,289,748 6,652,781
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (5,031,539) (15,754,398)
Net realized gain from investment transactions......................................... 0 (958,203)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (5,031,539) (16,712,601)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [2,677,708 and 4,553,644 shares, respectively]...................... 44,950,546 68,598,345
Reinvestment of dividend distributions [282,662 and 1,130,115 shares, respectively].... 5,031,539 16,712,601
Capital stock repurchased [(814,719) and (1,718,830) shares, respectively]............. (13,159,572) (25,854,984)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 36,822,513 59,455,962
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 166,080,722 49,396,142
NET ASSETS:
Beginning of period.................................................................... 664,534,207 615,138,065
------------------ -------------------
End of period.......................................................................... $ 830,614,929 $ 664,534,207
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A10
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
HIGH DIVIDEND STOCK PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$922,233,220)............................ $1,009,086,462
Cash....................................... 439
Interest and dividends receivable.......... 4,524,465
Receivable for securities sold............. 2,112,506
Receivable for portfolio shares sold....... 762,000
--------------
Total Assets............................. 1,016,485,872
--------------
LIABILITIES
Accrued expenses........................... 104,873
Payable for securities purchased........... 1,459,163
Payable to investment adviser.............. 1,014,006
--------------
Total Liabilities........................ 2,578,042
--------------
NET ASSETS................................... $1,013,907,830
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 620,064
Paid-in capital, in excess of par........ 914,678,260
--------------
915,298,324
Undistributed net investment income........ 8,282,176
Accumulated net realized gains............. 3,474,088
Net unrealized appreciation................ 86,853,242
--------------
Net assets, June 30, 1995.................. $1,013,907,830
--------------
--------------
Net asset value per share of 62,006,367
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 16.3517
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $54,245 foreign
withholding tax)......................... $ 17,067,728
Interest................................... 3,904,119
---------------
20,971,847
---------------
EXPENSES
Investment management fee.................. 1,856,827
Shareholders' reports...................... 78,049
Accounting fees............................ 40,564
Custodian expense -- net................... 14,004
Professional fees.......................... 8,194
S.E.C. fees................................ 2,880
Miscellaneous expenses..................... 1,308
Directors' expense......................... 1,140
---------------
2,002,966
---------------
NET INVESTMENT INCOME........................ 18,968,881
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 4,254,183
Net unrealized gain on investments......... 100,469,514
---------------
NET GAIN ON INVESTMENTS...................... 104,723,697
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 123,692,578
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 18,968,881 $ 29,929,976
Net realized gain on investments....................................................... 4,254,183 41,343,251
Net unrealized gain (loss) on investments.............................................. 100,469,514 (64,632,006)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... 123,692,578 6,641,221
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (10,832,464) (29,421,933)
Net realized gain from investment transactions......................................... 0 (44,325,396)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (10,832,464) (73,747,329)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [2,794,824 and 16,514,586 shares, respectively]..................... 43,047,000 261,909,000
Reinvestment of dividend distributions [660,269 and 5,080,100 shares, respectively].... 10,832,464 73,747,329
Capital stock repurchased [(801,297) and (746,813) shares, respectively]............... (12,503,000) (11,659,000)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 41,376,464 323,997,329
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 154,236,578 256,891,221
NET ASSETS:
Beginning of period.................................................................... 859,671,252 602,780,031
------------------ -------------------
End of period.......................................................................... $ 1,013,907,830 $ 859,671,252
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A11
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
COMMON STOCK PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$2,639,342,095).......................... $3,230,898,022
Cash....................................... 666
Interest and dividends receivable.......... 8,977,312
Receivable for securities sold............. 6,001,370
Receivable for portfolio shares sold....... 1,614,855
--------------
Total Assets............................. 3,247,492,225
--------------
LIABILITIES
Accrued expenses........................... 329,362
Payable for securities purchased........... 10,708,126
Payable to investment adviser.............. 3,571,892
--------------
Total Liabilities........................ 14,609,380
--------------
NET ASSETS................................... $3,232,882,845
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 1,353,800
Paid-in capital, in excess of par........ 2,569,281,781
--------------
2,570,635,581
Undistributed net investment income........ 9,497,826
Accumulated net realized gains............. 61,193,511
Net unrealized appreciation................ 591,555,927
--------------
Net assets, June 30, 1995.................. $3,232,882,845
--------------
--------------
Net asset value per share of 135,379,969
outstanding shares of common stock
(authorized 200,000,000 shares).......... $ 23.8801
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $457,920 foreign
withholding tax)......................... $ 30,243,299
Interest................................... 11,123,684
---------------
41,366,983
---------------
EXPENSES
Investment management fee.................. 6,536,397
Shareholders' reports...................... 269,464
Accounting fees............................ 58,113
Professional fees.......................... 25,116
Custodian expense -- net................... 23,106
S.E.C. fees................................ 13,790
Miscellaneous expenses..................... 3,982
Directors' expense......................... 1,513
---------------
6,931,481
---------------
NET INVESTMENT INCOME........................ 34,435,502
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 66,586,888
Net unrealized gain on investments......... 345,084,382
---------------
NET GAIN ON INVESTMENTS...................... 411,671,270
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 446,106,772
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 34,435,502 $ 57,699,769
Net realized gain on investments....................................................... 66,586,888 84,713,465
Net unrealized gain (loss) on investments.............................................. 345,084,382 (76,779,978)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................................... 446,106,772 65,633,256
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (19,218,827) (56,757,732)
Net realized gain from investment transactions......................................... (8,727,841) (106,046,594)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (27,946,668) (162,804,326)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [8,501,255 and 19,167,446 shares, respectively]..................... 191,180,493 412,393,503
Reinvestment of dividend distributions [1,169,361 and 7,934,974 shares,
respectively]......................................................................... 27,946,668 162,804,326
Capital stock repurchased [(983,304) and (2,170,186) shares, respectively]............. (22,176,437) (46,752,467)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 196,950,724 528,445,362
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 615,110,828 431,274,292
NET ASSETS:
Beginning of period.................................................................... 2,617,772,017 2,186,497,725
------------------ -------------------
End of period.......................................................................... $ 3,232,882,845 $ 2,617,772,017
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A12
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
GROWTH STOCK PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$17,284,396)............................. $ 18,711,575
Cash....................................... 244
Dividends and interest receivable.......... 11,780
Receivable for securities sold............. 273,389
Receivable for portfolio shares sold....... 373,000
--------------
Total Assets............................. 19,369,988
--------------
LIABILITIES
Accrued expenses........................... 9,530
Payable for securities purchased........... 2,233,797
Payable to investment adviser.............. 23,398
--------------
Total Liabilities........................ 2,266,725
--------------
NET ASSETS................................... $ 17,103,263
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 15,176
Paid-in capital, in excess of par........ 15,625,362
--------------
15,640,538
Undistributed net investment income........ 4,137
Accumulated net realized gains............. 31,409
Net unrealized appreciation................ 1,427,179
--------------
Net assets, June 30, 1995.................. $ 17,103,263
--------------
--------------
Net asset value per share of 1,517,583
outstanding shares of common stock
(authorized 50,000,000 shares)........... $ 11.2701
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period April 25, 1995
(Commencement of Business) to June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends.................................. $ 20,221
Interest................................... 24,650
---------------
44,871
---------------
EXPENSES
Investment management fee.................. 13,738
Accounting fees............................ 9,660
Custodian expense -- net................... 5,037
Shareholders' reports...................... 3,450
Professional fees.......................... 966
Directors' expense......................... 345
---------------
33,196
---------------
NET INVESTMENT INCOME........................ 11,675
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 31,409
Net unrealized gain on investments......... 1,427,179
---------------
NET GAIN ON INVESTMENTS...................... 1,458,588
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 1,470,263
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD
APRIL 25, 1995
(COMMENCEMENT OF BUSINESS)
TO JUNE 30, 1995
(UNAUDITED)
------------------------------
<S> <C>
OPERATIONS:
Net investment income........................................................................... $ 11,675
Net realized gain on investments................................................................ 31,409
Net unrealized gain on investments.............................................................. 1,427,179
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................ 1,470,263
-----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income........................................................................... (7,538)
-----------------
CAPITAL TRANSACTIONS:
Initial capitalization [990,000 shares]......................................................... 9,900,000
Capital stock sold [516,917 shares]............................................................. 5,633,000
Reinvestment of dividend distributions [667 shares]............................................. 7,538
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.................................. 15,540,538
-----------------
TOTAL INCREASE IN NET ASSETS...................................................................... 17,003,263
NET ASSETS:
Beginning of period............................................................................. *100,000
-----------------
End of period................................................................................... $ 17,103,263
-----------------
-----------------
</TABLE>
*Prior to April 25, 1995 (commencement of business), the Portfolio issued 10,000
shares to The Prudential for $100,000.
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A13
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
SMALL CAPITALIZATION STOCK PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$18,072,236)............................. $ 18,812,622
Cash....................................... 12,416
Interest and dividends receivable.......... 15,277
Receivable for securities sold............. 122,714
Receivable for portfolio shares sold....... 154,000
--------------
Total Assets............................. 19,117,029
--------------
LIABILITIES
Accrued expenses........................... 7,184
Payable for securities purchased........... 1,634,878
Payable to investment adviser.............. 18,658
Payable for daily variation margin on open
futures contracts (see Note 2)........... 3,250
--------------
Total Liabilities........................ 1,663,970
--------------
NET ASSETS................................... $ 17,453,059
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 16,348
Paid-in capital, in excess of par........ 16,639,611
--------------
16,655,959
Undistributed net investment income........ 18,226
Accumulated net realized gains............. 33,063
Net unrealized appreciation
Securities................................. 740,386
Futures contracts.......................... 5,425
--------------
Net assets, June 30, 1995.................. $ 17,453,059
--------------
--------------
Net asset value per share of 1,634,830
outstanding shares of common stock
(authorized 50,000,000 shares)........... $ 10.6758
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
For the Period April 25, 1995
(Commencement of Business) to June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends.................................. $ 25,619
Interest................................... 26,676
---------------
52,295
---------------
EXPENSES
Accounting fees............................ 9,660
Investment management fee.................. 8,998
Custodian expense -- net................... 6,210
Shareholders' reports...................... 690
Directors' expense......................... 345
Professional fees.......................... 207
---------------
26,110
---------------
NET INVESTMENT INCOME........................ 26,185
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments --
Securities transactions.................. 31,883
Futures contracts........................ 1,180
---------------
Net realized gain on investments........... 33,063
---------------
Net unrealized gain on investments --
Securities............................... 740,386
Futures contracts........................ 5,425
---------------
Net unrealized gain on investments......... 745,811
---------------
NET GAIN ON INVESTMENTS...................... 778,874
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 805,059
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD
APRIL 25, 1995
(COMMENCEMENT OF BUSINESS)
TO JUNE 30, 1995
(UNAUDITED)
------------------------------
<S> <C>
OPERATIONS:
Net investment income........................................................................... $ 26,185
Net realized gain on investments................................................................ 33,063
Net unrealized gain on investments.............................................................. 745,811
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................ 805,059
-----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income........................................................................... (7,959)
-----------------
CAPITAL TRANSACTIONS:
Initial capitalization [990,000]................................................................ 9,900,000
Capital stock sold [634,083].................................................................... 6,648,000
Reinvestment of dividend distributions [746].................................................... 7,959
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.................................. 16,555,959
-----------------
TOTAL INCREASE IN NET ASSETS...................................................................... 17,353,059
NET ASSETS:
Beginning of period............................................................................. *100,000
-----------------
End of period................................................................................... $ 17,453,059
-----------------
-----------------
</TABLE>
*Prior to April 25, 1995 (commencement of business), the Portfolio issued 10,000
shares to The Prudential for $100,000.
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A14
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
GLOBAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$327,186,791)............................ $ 369,110,287
Foreign currency, at value (cost:
$12,080)................................. 12,222
Cash....................................... 134,068
Dividends and interest receivable.......... 697,588
Net unrealized appreciation on forward
foreign exchange contracts............... 57,592
Receivable for securities sold............. 375,001
Receivable for portfolio shares sold....... 414,868
Other assets............................... 170,132
--------------
Total Assets............................. 370,971,758
--------------
LIABILITIES
Accrued expenses........................... 747,254
Payable for securities purchased........... 134,000
Payable to investment adviser.............. 679,672
Payable for portfolio shares redeemed...... 288,120
--------------
Total Liabilities........................ 1,849,046
--------------
NET ASSETS................................... $ 369,122,712
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 243,364
Paid-in capital, in excess of par........ 330,908,950
--------------
331,152,314
Undistributed net investment income........ 463,951
Accumulated net realized losses............ (4,491,771)
Net unrealized appreciation................ 41,998,218
--------------
Net assets, June 30, 1995.................. $ 369,122,712
--------------
--------------
Net asset value per share of 24,336,367
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 15.1675
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of $308,048 foreign
withholding tax)......................... $ 2,943,188
Interest................................... 250,317
---------------
3,193,505
---------------
EXPENSES
Investment management fee.................. $ 1,317,798
Custodian expense -- net................... 468,726
Accounting fees............................ 67,753
Shareholders' reports...................... 3,827
Miscellaneous expenses..................... 3,146
Directors' expense......................... 1,016
Professional fees.......................... 880
---------------
1,863,146
---------------
NET INVESTMENT INCOME........................ 1,330,359
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
SECURITIES AND FOREIGN CURRENCIES
Net realized loss on securities and foreign
currency transactions.................... (3,661,405)
Net unrealized gain on securities and
foreign currency translations............ 35,110,383
---------------
NET GAIN ON SECURITIES AND FOREIGN
CURRENCIES................................... 31,448,978
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 32,779,337
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. 1,330,359 474,722
Net realized loss on securities and foreign currency transactions...................... (3,661,405) (578,250)
Net unrealized gain on securities and foreign currency translations.................... 35,110,383 (16,334,560)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 32,779,337 (16,438,088)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (559,732) (499,141)
Net realized gain from investment transactions......................................... 0 (394,438)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (559,732) (893,579)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [1,248,673 and 17,513,960 shares, respectively]..................... 17,167,583 254,421,899
Reinvestment of dividend distributions [36,974 and 64,991 shares, respectively]........ 559,732 893,579
Capital stock repurchased [(1,859,895) and (751,122) shares, respectively]............. (26,558,186) (10,781,034)
Initial capitalization repurchased [0 and (735,674) shares, respectively].............. 0 (10,558,000)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS.............. (8,830,871) 233,976,444
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 23,388,734 216,644,777
NET ASSETS:
Beginning of period.................................................................... 345,733,978 129,089,201
------------------ -------------------
End of period.......................................................................... $ 369,122,712 $ 345,733,978
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A15
<PAGE>
FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
NATURAL RESOURCES PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
June 30, 1995
<S> <C>
ASSETS
Investments, at value (cost:
$236,448,065)............................ $ 268,798,958
Cash....................................... 465
Interest and dividends receivable.......... 708,675
Receivable for securities sold............. 4,155,314
--------------
Total Assets............................. 273,663,412
--------------
LIABILITIES
Accrued expenses and other liabilities..... 36,431
Payable for securities purchased........... 3,542,025
Payable to investment adviser.............. 313,608
--------------
Total Liabilities........................ 3,892,064
--------------
NET ASSETS................................... $ 269,771,348
--------------
--------------
Net assets were comprised of:
Common stock, at $0.01 par value......... $ 162,359
Paid-in capital, in excess of par........ 230,676,082
--------------
230,838,441
Undistributed net investment income........ 528,084
Accumulated net realized gains............. 6,053,930
Net unrealized appreciation................ 32,350,893
--------------
Net assets, June 30, 1995.................. $ 269,771,348
--------------
--------------
Net asset value per share of 16,235,925
outstanding shares of common stock
(authorized 100,000,000 shares).......... $ 16.6157
--------------
--------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
(UNAUDITED)
Six Months Ended June 30, 1995
<S> <C>
INVESTMENT INCOME
Dividends (net of $60,473 foreign
withholding tax)......................... $ 1,918,353
Interest................................... 344,244
---------------
2,262,597
---------------
EXPENSES
Investment management fee.................. 554,794
Accounting fees............................ 22,263
Shareholders' reports...................... 21,269
Professional fees.......................... 3,858
Custodian expense -- net................... 2,183
Directors' expense......................... 1,006
S.E.C. fees................................ 777
Miscellaneous expenses..................... 345
---------------
606,495
---------------
NET INVESTMENT INCOME........................ 1,656,102
---------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Net realized gain on investments........... 6,048,372
Net unrealized gain on investments......... 29,276,945
---------------
NET GAIN ON INVESTMENTS...................... 35,325,317
---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................... $ 36,981,419
---------------
---------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED
JUNE 30, 1995 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1994
------------------ -------------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................................. $ 1,656,102 $ 2,229,099
Net realized gain on investments....................................................... 6,048,372 4,072,054
Net unrealized gain (loss) on investments.............................................. 29,276,945 (16,859,455)
------------------ -------------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........................ 36,981,419 (10,558,302)
------------------ -------------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................................................................. (1,164,895) (2,145,214)
Net realized gain from investment transactions......................................... (1,041,282) (4,370,759)
------------------ -------------------
TOTAL DIVIDENDS TO SHAREHOLDERS........................................................ (2,206,177) (6,515,973)
------------------ -------------------
CAPITAL TRANSACTIONS:
Capital stock sold [747,916 and 5,475,055 shares, respectively]........................ 11,323,000 85,097,000
Reinvestment of dividend distributions [131,992 and 446,624 shares, respectively]...... 2,206,177 6,515,973
Capital stock repurchased [(379,709) and (393,177) shares, respectively]............... (5,807,000) (6,107,000)
------------------ -------------------
NET INCREASE IN NET ASSETS RESULTING FROM CAPITAL TRANSACTIONS......................... 7,722,177 85,505,973
------------------ -------------------
TOTAL INCREASE IN NET ASSETS............................................................. 42,497,419 68,431,698
NET ASSETS:
Beginning of period.................................................................... 227,273,929 158,842,231
------------------ -------------------
End of period.......................................................................... $ 269,771,348 $ 227,273,929
------------------ -------------------
------------------ -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
A16
<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
INVESTMENT OBJECTIVES
(Schedule of Investments appear on the following pages)
--------------------------------------------------------------------------------
FIXED INCOME PORTFOLIOS
MONEY MARKET Maximum current income, stability of capital and
maintenance of liquidity through investment in high
quality short-term debt instruments.
BOND A high level of income over the longer term, providing
reasonable safety of capital through investment in readily
marketable intermediate and long-term fixed income
securities.
GOVERNMENT High level of income, over the longer term, through
SECURITIES investment primarily in U.S. Government securities,
including intermediate and long-term Treasury bonds, and
other debt obligations issued by U.S. Government agencies
and instrumentalities.
ZERO COUPON BONDS; Highest predictable compound investment return consistent
MATURITIES OF 1995, with safety of capital, if held to maturity, through
2000, AND 2005 investment primarily in debt obligations of the U.S.
Treasury and investment grade corporations.
--------------------------------------------------------------------------------
BALANCED PORTFOLIOS
CONSERVATIVELY A favorable total return through investment in a blend of
MANAGED FLEXIBLE money market instruments, fixed income securities and
common stocks managed towards a lower potential risk of
loss than the Aggressively Managed Flexible Portfolio and
correspondingly lower potential for appreciation.
AGGRESSIVELY MANAGED Higher total return through investment in a blend of money
FLEXIBLE market instruments, fixed income securities and common
stocks managed with a higher degree of risk of loss in
order to attain potentially higher results than the
Conservatively Managed Flexible Portfolio.
--------------------------------------------------------------------------------
HIGH YIELD BOND PORTFOLIOS
HIGH YIELD BONDS Seeks a high total return through investment in a
diversified portfolio of low to medium quality (high
yield) fixed income securities. Such securities have
speculative characteristics, and generally involve greater
risks of loss than higher quality securities.
--------------------------------------------------------------------------------
DIVERSIFIED STOCK PORTFOLIOS
STOCK INDEX Seeks results that correspond to the price and yield
performance of the broad, publicly-traded stock market by
trying to duplicate the performance of the Standard and
Poor's 500 Composite Stock Price Index.
HIGH DIVIDEND STOCK Seeks both current income and capital appreciation by
investing primarily in stocks and convertible securities
with prospects for income returns above those of the S&P
500 Index or New York Stock Exchange indices.
COMMON STOCK The Portfolio seeks capital appreciation through
investment primarily in stocks and convertible securities
of major, established corporations as well as stocks of
smaller companies. Income from dividends from the
Portfolio's investments will be incidental.
GROWTH STOCK Seeks long-term growth of capital through investment
primarily in common stock of established companies with
above average growth prospects. Dividend income from the
Portfolio's investments will be incidental.
SMALL CAPITALIZATION This Portfolio seeks to achieve long-term growth of
STOCK capital through investment primarily in common stocks of
publicly traded companies with smaller market
capitalization. Dividend income from the Portfolio's
investments will be incidental.
GLOBAL EQUITY Seeks long-term capital growth through investment
primarily in common stock and common stock equivalents of
foreign and domestic corporations.
--------------------------------------------------------------------------------
SPECIALIZED PORTFOLIOS
NATURAL RESOURCES Seeks long term growth of capital by investing primarily
in stocks and convertible securities of companies that
operate within the natural resources sector of the
economy.
B1
<PAGE>
THE PRUDENTIAL SERIES FUND, INC.
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 101.7% AMOUNT VALUE
------------- --------------
<S> <C> <C>
BANK-RELATED INSTRUMENTS -- 20.4%
Bank of Montreal, T.D.,
5.990%, 07/05/95.............................. $ 14,000,000 $ 14,000,000
Bank of New York, C.D.,
6.150%, 07/03/95.............................. 2,000,000 2,000,000
6.270%, 10/31/95.............................. 3,000,000 3,000,668
Caisse Nationale de Credit Agricole, C.D.,
6.220%, 11/02/95.............................. 5,000,000 5,000,311
Commerzbank, C.D.,
7.100%, 02/02/96.............................. 2,000,000 2,005,061
7.320%, 01/24/96.............................. 1,000,000 1,003,701
Dai-Ichi Kangyo Bank, Ltd., T.D.,
6.375%, 07/05/95.............................. 4,651,000 4,651,000
Industrial Bank of Japan, Ltd., T.D.,
6.020%, 07/05/95.............................. 15,000,000 15,000,000
Mitsubishi Bank, Ltd., C.D.,
6.125%, 07/12/95.............................. 12,000,000 12,000,000
Mitsubishi Bank, Ltd., T.D.,
6.063%, 07/14/95.............................. 5,000,000 5,000,000
6.188%, 07/07/95.............................. 13,000,000 13,000,000
National Westminster Bank, PLC, C.D.,
5.850%, 12/26/95.............................. 2,000,000 2,000,000
Norinchukin Bank, C.D.,
6.060%, 07/20/95.............................. 5,000,000 5,000,023
Sanwa Bank, Ltd., C.D.,
5.950%, 07/06/95.............................. 11,000,000 10,999,954
6.020%, 07/03/95.............................. 3,000,000 3,000,000
Sumitomo Bank, Ltd., C.D.,
6.000%, 07/10/95.............................. 11,000,000 11,000,000
Sumitomo Bank, Ltd., T.D.,
6.060%, 07/14/95.............................. 15,000,000 15,000,046
--------------
123,660,764
--------------
COMMERCIAL PAPER -- 49.7%
Abbey National North America Corp.,
5.820%, 09/15/95.............................. 7,000,000 6,916,257
5.900%, 07/19/95.............................. 3,000,000 2,992,133
American Express Credit Corp.,
5.900%, 10/16/95.............................. 10,000,000 9,827,917
American Home Food Products, Inc.,
5.900%, 07/27/95.............................. 1,000,000 996,067
American Home Products Corp.,
5.910%, 08/30/95.............................. 2,100,000 2,080,005
5.950%, 07/27/95-08/31/95..................... 4,000,000 3,972,564
5.970%, 08/10/95.............................. 7,000,000 6,955,888
6.000%, 07/12/95-07/20/95..................... 7,000,000 6,981,500
American Honda Finance Corp.,
5.880%, 09/05/95.............................. 1,000,000 989,547
5.950%, 08/23/95.............................. 1,000,000 991,571
5.980%, 07/12/95.............................. 8,000,000 7,988,040
6.000%, 08/23/95.............................. 1,000,000 991,500
Aristar, Inc.,
6.020%, 07/05/95.............................. 1,000,000 999,666
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
Associates Corp. of North America,
5.910%, 08/29/95.............................. $ 5,000,000 $ 4,953,213
5.960%, 08/02/95-08/03/95..................... 6,000,000 5,969,869
6.000%, 07/05/95.............................. 5,000,000 4,998,333
AT&T Corp.,
5.830%, 09/12/95.............................. 2,000,000 1,977,004
BHF Finance, Inc.,
5.800%, 09/22/95.............................. 5,000,000 4,934,750
Bradford & Bingley Building Society,
5.810%, 09/26/95.............................. 2,000,000 1,972,564
5.900%, 09/13/95.............................. 2,000,000 1,976,400
Bridgestone/Firestone, Inc.,
6.000%, 07/12/95.............................. 2,000,000 1,997,000
Caterpillar Financial Services Corp.,
5.920%, 09/14/95.............................. 1,000,000 987,996
CIT Group Holdings, Inc.,
5.900%, 09/11/95.............................. 7,000,000 6,919,694
6.000%, 07/05/95.............................. 2,000,000 1,999,333
Coca Cola Enterprises, Inc.,
6.000%, 07/07/95-11/03/95..................... 2,000,000 1,978,833
Commerzbank U.S. Finance, Inc.,
5.840%, 09/27/95.............................. 2,900,000 2,859,542
Countrywide Funding Corp.,
5.960%, 07/20/95.............................. 1,000,000 997,186
5.970%, 07/06/95.............................. 1,328,000 1,327,339
5.980%, 07/19/95.............................. 5,000,000 4,986,711
6.000%, 07/28/95.............................. 3,000,000 2,987,500
6.020%, 07/27/95.............................. 1,375,000 1,369,482
Dean Witter, Discover & Company,
5.970%, 07/05/95.............................. 4,000,000 3,998,673
Duracell, Inc.,
5.980%, 08/11/95.............................. 1,000,000 993,522
Finova Capital Corp.,
5.980%, 08/03/95.............................. 1,000,000 994,851
6.000%, 08/21/95.............................. 4,000,000 3,967,333
6.010%, 08/10/95.............................. 2,775,000 2,757,396
6.020%, 08/11/95.............................. 1,712,000 1,700,835
6.030%, 08/01/95.............................. 1,300,000 1,293,685
6.050%, 07/20/95-08/07/95..................... 5,000,000 4,976,640
Ford Motor Credit Co.,
6.200%, 09/12/95.............................. 10,000,000 9,877,722
Fuji Bank, Ltd.,
5.970%, 07/05/95.............................. 4,000,000 3,998,673
General Electric Capital Corp.,
6.050%, 10/18/95.............................. 14,000,000 13,748,253
General Motors Acceptance Corp.,
6.100%, 07/17/95.............................. 8,500,000 8,479,836
6.150%, 07/12/95-07/13/95..................... 19,153,000 19,122,407
GTE Finance Corp.,
5.980%, 08/11/95.............................. 1,000,000 993,522
Halifax Building Society,
5.810%, 09/11/95.............................. 1,675,000 1,656,077
Hanson Finance, PLC,
5.830%, 09/20/95-09/22/95..................... 4,000,000 3,948,502
5.900%, 09/21/95.............................. 6,000,000 5,921,333
Hertz Corp.,
5.860%, 09/18/95.............................. 15,000,000 14,811,992
Household Finance Corp.,
5.820%, 09/26/95.............................. 3,000,000 2,958,775
</TABLE>
B2
<PAGE>
MONEY MARKET PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
ITT Corp.,
6.000%, 07/11/95.............................. $ 3,000,000 $ 2,996,000
ITT Hartford Group, Inc.,
5.960%, 07/13/95.............................. 10,000,000 9,983,444
6.000%, 07/27/95.............................. 3,199,000 3,186,204
Leeds Permanent Building Society,
6.070%, 07/07/95.............................. 8,000,000 7,994,604
McKenna Triangle National Corp.,
5.900%, 07/27/95.............................. 3,000,000 2,988,200
5.980%, 07/27/95.............................. 3,000,000 2,988,040
Merrill Lynch & Co., Inc.,
5.970%, 08/03/95.............................. 7,000,000 6,964,014
%Money Market Auto Loan Trust
1990-1,
6.235%, 07/17/95.............................. 10,300,000 10,300,751
Morgan Stanley Group, Inc.,
5.850%, 10/02/95.............................. 7,000,000 6,896,487
Norwest Financial, Inc.,
6.000%, 07/05/95.............................. 2,000,000 1,999,333
NS Finance, Inc.,
6.000%, 07/13/95.............................. 1,700,000 1,697,167
PacifiCorp Credit, Inc.,
6.000%, 07/05/95.............................. 1,000,000 999,666
Paribas Finance, Inc.,
6.000%, 08/01/95.............................. 2,000,000 1,990,333
Pennsylvania Power & Light Co.,
5.950%, 07/17/95.............................. 1,000,000 997,686
6.020%, 07/07/95.............................. 2,000,000 1,998,662
Philip Morris Companies, Inc.,
6.020%, 07/13/95.............................. 6,000,000 5,989,967
PNC Funding Corp.,
5.960%, 08/18/95.............................. 4,000,000 3,969,538
Sears Roebuck Acceptance Corp.,
5.980%, 07/10/95.............................. 3,000,000 2,996,512
Sherwood Medical Co.,
5.970%, 07/21/95.............................. 5,000,000 4,985,075
WCP Funding, Inc.,
5.950%, 08/15/95.............................. 2,000,000 1,985,786
Whirlpool Financial Corp.,
6.050%, 07/21/95.............................. 4,000,000 3,987,900
--------------
301,970,800
--------------
TERM NOTES -- 25.5%
Abbey National Treasury Services, PLC,
6.400%, 05/17/96.............................. 5,000,000 5,000,000
American Express Centurion Bank,
%4.500%, 08/04/95, Tranche #TR00037........... 2,000,000 1,999,982
%4.813%, 08/18/95-09/19/95, Tranche #TR00039,
#TR00080.................................... 5,000,000 4,999,920
%6.125%, 02/16/96, Tranche #TR00088........... 1,000,000 999,875
Associates Corp. of North America,
8.800%, 03/01/96.............................. 2,000,000 2,026,066
%Avco Financial Services, Inc.,
4.677%, 09/13/95.............................. 4,000,000 4,000,000
Bank One Indianapolis N.A.,
5.980%, 08/01/95, Tranche #TR00002............ 25,000,000 24,999,980
7.180%, 02/05/96, Tranche #TR00002............ 1,000,000 1,002,327
Bayerische Hypotheken,
6.376%, 04/24/96, Tranche #TR00002............ 3,000,000 2,998,254
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
%Beneficial Corp.,
4.487%, 07/19/95.............................. $ 7,000,000 $ 6,999,790
BP America, Inc.,
10.150%, 03/15/96............................. 1,000,000 1,022,714
CIT Group Holdings, Inc.,
4.750%, 03/15/96.............................. 1,000,000 988,163
8.875%, 06/15/96.............................. 1,800,000 1,846,442
Ford Motor Credit Co.,
8.250%, 05/15/96.............................. 2,500,000 2,542,147
8.875%, 03/15/96.............................. 2,000,000 2,029,025
General Electric Capital Corp.,
%6.000%, 09/28/95, Tranche #TR00291........... 1,000,000 1,000,043
6.950%, 03/01/96, Tranche #TR00649............ 4,000,000 4,007,964
General Motors Acceptance Corp.,
4.800%, 01/16/96, Tranche #TR00001............ 1,000,000 992,735
8.800%, 07/03/96, Tranche #TR00612............ 1,000,000 1,024,906
%**Goldman Sachs Group L.P.,
5.375%, 07/22/96, Series A.................... 28,000,000 28,000,000
Huntington National Bank,
6.200%, 11/03/95.............................. 3,000,000 3,000,833
International Lease Finance Corp.,
5.400%, 04/01/96, Tranche #TR00139............ 1,000,000 989,907
Mellon Bank N.A.,
6.200%, 11/01/95, Tranche #TR00005............ 2,000,000 1,999,870
Merrill Lynch & Co., Inc.,
%4.823%, 09/22/95, Tranche #TR00106........... 3,000,000 2,999,870
4.885%, 10/02/95, Tranche #TR00110............ 6,500,000 6,499,684
Morgan Stanley Group, Inc.,
%6.250%, 08/15/95, Tranche #TR00100........... 5,000,000 5,000,000
%6.251%, 08/15/95, Tranche #TR00102........... 2,000,000 2,000,000
%6.375%, 07/17/95, Tranche #TR00102........... 4,000,000 4,000,000
NationsBank of Texas N.A.,
6.820%, 10/31/95, Tranche #TR00048............ 6,000,000 6,000,995
7.000%, 02/06/96, Tranche #TR00050............ 8,000,000 8,000,908
7.300%, 01/26/96, Tranche #TR00043............ 5,000,000 5,011,775
7.550%, 01/09/96, Tranche #TR00037............ 3,000,000 3,012,367
Northern Trust Company,
6.600%, 11/17/95, Tranche #TR00023............ 3,000,000 3,003,496
State Street Bank & Trust Co.,
6.010%, 09/20/95, Tranche #TR00419............ 2,000,000 1,999,962
Westdeutsche Landesbank,
6.850%, 03/01/96.............................. 3,000,000 3,003,084
--------------
155,003,084
--------------
</TABLE>
B3
<PAGE>
MONEY MARKET PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
PROMISSORY NOTES -- 4.8%
%General Electric Capital Corp.,
5.969%, 10/23/95.............................. $ 10,000,000 $ 10,000,000
%Lehman Brothers Holdings, Inc.,
6.263%, 11/20/95.............................. 14,000,000 14,000,000
Paribas Finance, Inc.,
5.840%, 09/28/95.............................. 2,000,000 1,971,773
5.940%, 07/26/95.............................. 3,000,000 2,988,615
--------------
28,960,388
--------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS -- 1.3%
Federal Home Loan Bank,
6.050%, 06/13/96.............................. 4,000,000 4,002,218
Federal National Mortgage Association,
5.710%, 06/10/96.............................. 4,000,000 3,989,201
--------------
7,991,419
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 617,586,455
--------------
LIABILITIES -- (1.7%)
(net of other assets).......................................... (10,141,369)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 607,445,086
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
C.D. Certificates of Deposit
PLC Public Limited Company (British Corporation)
T.D. Time Deposit
**Indicates a restricted security; the aggregate cost of the restricted
securities is $28,000,000. The aggregate value, $28,000,000 is
approximately 4.6% of net assets. (See Note 2)
%Indicates a variable rate security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B4
<PAGE>
BOND PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 98.3% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 21.5%
Advanta Mortgage Loan Trust, Series 1994-3
8.490%, 01/25/26.............................. $ 8,500,000 $ 8,797,500
Aristar, Inc.,
5.750%, 07/15/98.............................. 2,000,000 1,965,120
7.500%, 07/01/99.............................. 2,000,000 2,068,400
Associates Corp. of North America,
8.375%, 01/15/98.............................. 500,000 522,585
%Baybanks, Inc.,
6.125%, 09/30/97.............................. 5,000,000 4,956,500
Capital One Bank, M.T.N.,
8.125%, 02/27/98, Tranche #TR00032............ 5,000,000 5,141,000
Chase Manhattan Corp.,
8.000%, 06/15/99.............................. 2,000,000 2,092,740
Chemical Bank,
6.625%, 08/15/05.............................. 2,000,000 1,938,340
Chrysler Financial Corp.,
9.500%, 12/15/99.............................. 5,000,000 5,499,850
Chrysler Financial Corp., M.T.N.,
5.260%, 07/06/95, Tranche #TR00029............ 900,000 900,000
5.340%, 07/05/95, Tranche #TR00028............ 2,300,000 2,300,000
Citicorp, M.T.N.,
8.500%, 02/24/97, Tranche #TR00128............ 3,000,000 3,108,870
Coles Myer Finance USA Ltd., M.T.N.,
5.560%, 02/15/99, Tranche #TR00018............ 6,000,000 5,821,080
Enterprise Rent-A-Car USA Finance Co., M.T.N.,
7.875%, 03/15/98, Tranche #TR00003............ 5,000,000 5,168,906
**8.750%, 12/15/99, Tranche #TR00001.......... 3,000,000 3,236,644
Equitable of Iowa Companies,
8.500%, 02/15/05.............................. 5,000,000 5,452,850
Ford Motor Credit Co.,
6.250%, 02/26/98.............................. 3,000,000 2,992,260
Geico Corp.,
7.500%, 04/15/05.............................. 5,000,000 5,240,600
General Motors Acceptance Corp.,
8.400%, 10/15/99.............................. 3,700,000 3,930,991
General Motors Acceptance Corp., M.T.N.,
7.500%, 11/04/97, Tranche #TR00598............ 2,000,000 2,046,260
**Liberty Mutual Insurance Co.,
8.500%, 05/15/25.............................. 3,750,000 3,827,513
Los Angeles County, California,
Zero Coupon, 06/30/08......................... 15,000,000 5,854,050
**Manufacturers Life Insurance Co.,
7.875%, 04/15/05.............................. 4,000,000 4,134,500
**Massachusetts Mutual Life Insurance,
7.625%, 11/15/23.............................. 2,000,000 1,941,820
Mellon Financial Co.,
6.500%, 12/01/97.............................. 2,000,000 2,008,700
**Nationwide CSN Trust,
9.875%, 02/15/25.............................. 5,000,000 5,566,600
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
**Potomac Capital Investment Corp., M.T.N.,
6.190%, 04/28/97, Series B.................... $ 3,500,000 $ 3,485,869
**Principal Mutual Life Insurance,
7.875%, 03/01/24.............................. 5,000,000 4,783,350
Republic New York Corp.,
9.125%, 05/15/21.............................. 2,850,000 3,346,526
%Salomon, Inc., M.T.N.,
6.975%, 02/14/96.............................. 10,000,000 10,012,000
Santander Financial Issuances, Ltd.,
7.875%, 04/15/05.............................. 5,000,000 5,252,600
Union Bank of Finland, Ltd.,
5.250%, 06/15/96.............................. 3,000,000 2,960,850
--------------
126,354,874
--------------
FOREIGN -- 11.2%
Australia & New Zealand Banking Group, Ltd.,
6.250%, 02/01/04.............................. 3,000,000 2,864,520
**Banco de Commercio Exterior, SA, M.T.N.,
8.625%, 06/02/00, Tranche #TR00001............ 2,000,000 2,020,000
**Banco Ganadero, SA, M.T.N.,
9.750%, 08/26/99, Tranche #TR00001............ 4,100,000 4,094,875
**Cemex, SA,
8.875%, 06/10/98.............................. 5,000,000 4,287,500
Central Puerto and Cent Negue, SA,
10.750%, 11/02/97............................. 3,000,000 2,880,000
**Compania Sud Americana de Vapores, SA,
7.375%, 12/08/03.............................. 4,000,000 3,720,000
**Financiera Energetica Nacional, SA, M.T.N.,
9.000%, 11/08/99.............................. 1,500,000 1,537,500
Kansallis-Osake Pankki, N.Y.,
**%8.650%, 12/29/49........................... 5,000,000 5,237,500
10.000%, 05/01/02............................. 5,000,000 5,796,850
National Australia Bank, Ltd.,
9.700%, 10/15/98.............................. 1,700,000 1,860,956
Nippon Telegraph & Telephone Corp.,
9.500%, 07/27/98.............................. 1,800,000 1,966,986
Noranda, Inc.,
8.125%, 06/15/04.............................. 2,000,000 2,131,760
Nova Scotia, Province of Canada,
8.875%, 07/01/19.............................. 3,000,000 3,384,330
Ontario, Province of Canada,
15.750%, 03/15/12............................. 3,475,000 4,168,124
**%Petroleos Mexicanos,
5.563%, 03/08/99.............................. 2,500,000 2,050,000
Republic of Argentina,
8.375%, 12/20/03.............................. 3,000,000 2,212,500
Republic of Columbia,
7.250%, 02/23/04.............................. 2,500,000 2,312,500
8.750%, 10/06/99.............................. 2,000,000 2,070,000
**Republic of Trinidad and Tobago,
11.750%, 10/03/04............................. 1,600,000 1,696,000
Saskatchewan, Province of Canada,
8.000%, 07/15/04.............................. 4,000,000 4,308,640
**Tenaga Nasional Berhad,
7.875%, 06/15/04.............................. 3,000,000 3,182,400
</TABLE>
B5
<PAGE>
BOND PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
United States of Mexico with Rights,
6.250%, 12/31/19, Class B..................... $ 4,000,000 $ 2,425,000
--------------
66,207,941
--------------
INDUSTRIAL -- 35.5%
Arkla, Inc., M.T.N.,
9.320%, 12/18/00, Tranche #TR00043............ 2,000,000 2,129,560
9.380%, 03/15/96, Tranche #TR00018............ 1,300,000 1,322,230
Auburn Hills Trust,
12.000%, 05/01/20............................. 10,000,000 14,629,500
Boeing Co.,
7.250%, 06/15/25.............................. 5,000,000 4,950,350
Boise Cascade Corp.,
9.875%, 02/15/01.............................. 1,000,000 1,070,230
Canadian Pacific Forest Products Ltd.,
10.250%, 01/15/03............................. 4,000,000 4,456,000
Canadian Pacific Forest Products Ltd., M.T.N.,
9.250%, 06/15/02.............................. 3,000,000 3,135,960
Centex Corp.,
7.375%, 06/01/05.............................. 3,750,000 3,689,363
Columbia/HCA Healthcare Corp.,
6.910%, 06/15/05.............................. 4,950,000 4,887,581
Comsat Corp.,
8.125%, 04/01/04.............................. 4,000,000 4,312,520
Crane Co.,
7.250%, 06/15/99.............................. 3,000,000 3,044,160
Delta Air Lines, Inc.,
9.875%, 05/15/00.............................. 6,000,000 6,593,880
Delta Air Lines, Inc., M.T.N.,
7.790%, 12/01/98.............................. 1,000,000 1,020,140
8.380%, 06/12/98, Tranche #TR00017............ 2,000,000 2,063,180
Federal Express Corp.,
9.650%, 06/15/12.............................. 3,000,000 3,527,250
Fleming Companies, Inc.,
10.625%, 12/15/01............................. 5,000,000 5,262,500
J.C. Penney Co., Inc.,
9.750%, 06/15/21.............................. 6,400,000 7,333,312
Louisiana Land and Exploration Co.,
7.650%, 12/01/23.............................. 9,000,000 8,734,050
Lubrizol Corp.,
7.250%, 06/15/25.............................. 5,000,000 4,959,200
Nabisco, Inc.,
7.550%, 06/15/15.............................. 3,000,000 2,978,580
News America Holdings, Inc.,
7.450%, 06/01/00.............................. 6,000,000 6,116,940
8.625%, 02/01/03.............................. 5,000,000 5,392,600
Noble Affiliates, Inc.,
7.250%, 10/15/23.............................. 2,000,000 1,825,080
Occidental Petroleum Corp.,
10.125%, 11/15/01............................. 5,000,000 5,812,100
11.125%, 08/01/10............................. 5,000,000 6,578,200
Oryx Energy Co., M.T.N.,
6.050%, 02/01/96, Tranche #TR00013............ 3,000,000 2,981,100
Paramount Communications, Inc.,
7.500%, 01/15/02.............................. 5,000,000 4,999,650
Parker & Parsley Petroleum Co.,
8.875%, 04/15/05.............................. 4,000,000 4,287,920
Price/Costco, Inc.,
7.125%, 06/15/05.............................. 5,000,000 5,023,300
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
PT Alatief Freeport Financial Co.,
9.750%, 04/15/01.............................. $ 5,750,000 $ 5,908,125
RJR Nabisco, Inc.,
6.700%, 06/15/02.............................. 2,000,000 1,979,180
8.000%, 01/15/00.............................. 5,000,000 5,212,200
Rogers Cablesystems Ltd.,
10.000%, 03/15/05, Series B................... 3,500,000 3,596,250
Royal Caribbean Cruises Ltd.,
11.375%, 05/15/02............................. 5,000,000 5,475,000
Tele-Communications, Inc.,
10.125%, 04/15/22............................. 5,000,000 5,664,650
Time Warner, Inc.,
**6.050%, 07/01/95............................ 2,500,000 2,500,000
7.750%, 06/15/05.............................. 5,000,000 4,963,750
Transco Energy Co.,
9.125%, 05/01/98.............................. 3,000,000 3,191,940
9.375%, 08/15/01.............................. 6,000,000 6,735,600
United Air Lines, Inc.,
10.670%, 05/01/04, Series A................... 10,200,000 11,750,910
Viacom, Inc.,
7.750%, 06/01/05.............................. 7,050,000 7,117,961
Westinghouse Electric Corp.,
8.375%, 06/15/02.............................. 2,000,000 2,090,580
Westvaco Corp.,
9.750%, 06/15/20.............................. 5,000,000 6,318,600
Whitman Corp.,
7.500%, 08/15/01.............................. 3,000,000 3,114,690
--------------
208,735,872
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 26.4%
Federal Farm Credit Bank,
8.650%, 10/01/99, Series A.................... 150,000 163,383
Federal Farm Credit Bank, M.T.N.,
7.900%, 03/01/96.............................. 2,800,000 2,836,652
Federal Home Loan Bank,
9.800%, 03/25/96.............................. 4,000,000 4,116,240
Federal Home Loan Mortgage Corp.,
6.820%, 06/29/05.............................. 10,000,000 9,878,100
Federal National Mortgage Association,
9.000%, 10/01/16-09/01/21..................... 761,882 802,296
Government National Mortgage Association,
7.500%, 05/20/02-12/15/09..................... 21,959,251 22,368,382
International Bank for Reconstruction and
Development,
12.375%, 10/15/02............................. 750,000 998,558
Resolution Funding Corp.,
Zero Coupon, 10/15/15......................... 17,100,000 4,120,758
8.125%, 10/15/19.............................. 700,000 802,046
8.625%, 01/15/21.............................. 200,000 241,718
United States Treasury Bonds,
8.750%, 08/15/20.............................. 8,400,000 10,430,448
11.250%, 02/15/15............................. 12,100,000 18,153,750
12.000%, 08/15/13............................. 26,000,000 38,350,000
United States Treasury Notes,
6.500%, 05/15/05.............................. 3,275,000 3,344,593
7.500%, 02/29/96-02/15/05..................... 18,350,000 19,211,665
7.875%, 07/31/96.............................. 7,000,000 7,149,870
9.250%, 01/15/96.............................. 12,000,000 12,213,720
--------------
155,182,179
--------------
</TABLE>
B6
<PAGE>
BOND PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
UTILITIES -- 3.7%
%Central Maine Power Co., M.T.N.,
5.978%, 08/03/95, Tranche #TR00036............ $ 4,000,000 $ 4,000,000
Consolidated Edison of New York, Inc.,
9.700%, 12/01/25.............................. 2,100,000 2,282,301
Niagara Mohawk Power Corp.,
7.750%, 05/15/06.............................. 5,000,000 5,086,700
Norsk Hydro A.S.,
7.750%, 06/15/23.............................. 5,000,000 5,130,750
Pennsylvania Power & Light Co.,
9.375%, 07/01/21.............................. 1,150,000 1,292,439
Texas Utilities Electric Co.,
5.875%, 04/01/98.............................. 4,000,000 3,923,040
--------------
21,715,230
--------------
TOTAL LONG-TERM BONDS
(Cost $563,339,782)............................................ 578,196,096
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 0.9% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. $ 5,507,000 $ 5,507,000
--------------
OTHER ASSETS -- 0.8%
(net of liabilities)........................................... 4,870,939
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 588,574,035
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
M.T.N. Medium Term Note
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
**Indicates a restricted security; the aggregate cost of the restricted
securities is $56,777,698. The aggregate value, $57,302,071 is
approximately 9.7% of net assets. (See Note 2)
%Indicates a variable rate security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B7
<PAGE>
GOVERNMENT SECURITIES PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 95.6% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 3.2%
%Chase Manhattan Credit Card Trust,
6.193%, 08/15/01, Series 1995-2, Class A...... $ 12,500,000 $ 12,496,094
Equicon Home Equity Loan Trust, CMO,
7.850%, 03/18/14, Series 1994-2, Class A2..... 3,000,000 3,083,906
--------------
15,580,000
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 92.4%
Federal Home Loan Mortgage Corp.,
%6.306%, 06/01/25............................. 20,000,000 20,381,250
6.710%, 06/11/02.............................. 5,000,000 5,014,250
6.820%, 06/29/05.............................. 5,000,000 4,939,050
6.970%, 06/16/05.............................. 15,000,000 15,018,750
Federal National Mortgage Association,
8.500%, 05/01/24-04/01/25..................... 46,251,796 47,697,164
9.000%, 02/01/25-04/01/25..................... 21,089,791 21,966,282
Government National Mortgage Association,
7.000%, 09/15/22-06/15/24..................... 49,591,984 48,801,488
Resolution Funding Corp.,
Zero Coupon, 07/15/20......................... 22,500,000 3,876,300
8.125%, 10/15/19, Principal Only Class A...... 4,200,000 4,812,276
Student Loan Market Association,
7.500%, 03/08/00.............................. 12,000,000 12,630,000
Student Loan Market Association, M.T.N.,
7.620%, 04/18/00.............................. 6,000,000 6,112,080
United States Treasury Bonds,
7.500%, 11/15/24.............................. 40,000,000 44,256,400
8.125%, 08/15/19.............................. 55,000,000 63,989,200
United States Treasury Notes,
5.000%, 01/31/99.............................. 16,000,000 15,515,040
6.375%, 08/15/02.............................. 8,000,000 8,094,960
7.750%, 12/31/99.............................. 57,000,000 60,856,620
7.875%, 11/15/04.............................. 55,000,000 61,256,250
--------------
445,217,360
--------------
TOTAL LONG-TERM BONDS
(Cost $437,450,188)............................................ 460,797,360
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 3.0% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 14,410,000 14,410,000
--------------
OTHER ASSETS -- 1.4%
(net of liabilities)........................................... 6,805,758
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 482,013,118
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
CMO Collateralized Mortgage Obligations
M.T.N. Medium Term Note
%Indicates a variable rate security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B8
<PAGE>
ZERO COUPON BOND 1995 PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 45.8% VALUE VALUE
------------- --------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS
Coupon Treasury Receipts,
Zero Coupon, 08/15/96......................... $ 1,000,020 $ 941,439
Treasury Investment Growth Receipts,
Zero Coupon, 11/15/95......................... 236,000 231,254
United States Treasury Bills,
Zero Coupon, 11/16/95......................... 3,000,000 2,938,020
United States Treasury Bonds, Stripped,
Zero Coupon, 02/15/97......................... 1,000,000 912,250
--------------
TOTAL LONG-TERM BONDS
(Cost $4,966,789).............................................. 5,022,963
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 54.4% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 42.2%
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 4,631,000 4,631,000
--------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS -- 12.2%
Federal Home Loan Banks,
6.430%, 11/01/95.............................. 1,365,000 1,335,501
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 5,966,501
--------------
LIABILITIES -- (0.2%)
(net of other assets).......................................... (26,756)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 10,962,708
--------------
--------------
</TABLE>
ZERO COUPON BOND 2000 PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 98.8% VALUE VALUE
------------- --------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS
United States Treasury Bonds, Stripped,
Zero Coupon, 02/15/00-02/15/02................ $ 33,250,000 $ 23,425,925
--------------
TOTAL LONG-TERM BONDS
(Cost $21,276,221)............................................. 23,425,925
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 1.3% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 311,000 311,000
--------------
LIABILITIES -- (0.1%)
(net of other assets).......................................... (31,439)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 23,705,486
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B9
<PAGE>
ZERO COUPON BOND 2005 PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 99.7% VALUE VALUE
------------- --------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS
Resolution Funding Corp., Stripped,
Zero Coupon, 07/15/07......................... $ 10,000,000 $ 4,493,300
United States Treasury Bonds, Stripped,
Zero Coupon, 11/15/04-05/15/06................ 27,000,000 14,054,690
--------------
TOTAL LONG-TERM BONDS
(Cost $16,405,474)............................................. 18,547,990
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 0.5% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 93,000 93,000
--------------
LIABILITIES -- (0.2%)
(net of other assets).......................................... (35,187)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 18,605,803
--------------
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B10
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 40.6% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 1.2%
+Coltec Industries, Inc......................... 311,000 $ 5,364,750
GenCorp, Inc.................................... 676,800 7,275,600
Loral Corp...................................... 338,100 17,496,675
Rockwell International Corp..................... 253,100 11,579,325
+UNC, Inc....................................... 289,100 1,553,913
--------------
43,270,263
--------------
AIRLINES -- 0.5%
+AMR Corp....................................... 100,000 7,462,500
+UAL Corp....................................... 28,000 3,927,000
+USAir Group, Inc............................... 675,000 7,846,875
--------------
19,236,375
--------------
AUTOS - CARS & TRUCKS -- 3.0%
A.O. Smith Corp................................. 466,800 10,969,800
Chrysler Corp................................... 500,000 23,937,500
Ford Motor Co................................... 318,300 9,469,425
General Motors Corp............................. 500,000 23,437,500
General Motors Corp. (Class 'E' Stock).......... 243,900 10,609,650
General Motors Corp. (Class 'H' Stock).......... 465,900 18,403,050
Titan Wheel International, Inc.................. 498,900 12,846,675
--------------
109,673,600
--------------
BANKS AND SAVINGS & LOANS -- 2.8%
First Bank System, Inc.......................... 490,900 20,126,900
First Interstate Bancorp........................ 300,000 24,075,000
KeyCorp......................................... 937,400 29,410,925
Norwest Corp.................................... 1,060,200 30,480,750
--------------
104,093,575
--------------
CHEMICALS -- 1.3%
Imperial Chemical Industries, PLC, ADR.......... 371,300 18,100,875
OM Group, Inc................................... 308,400 8,789,400
W.R. Grace & Co................................. 318,800 19,566,350
--------------
46,456,625
--------------
CHEMICALS - SPECIALTY -- 0.8%
Ferro Corp...................................... 655,200 17,362,800
M.A. Hanna Co................................... 489,700 12,732,200
--------------
30,095,000
--------------
COMPUTER SERVICES -- 0.8%
National Data Corp.............................. 620,100 14,339,813
+Paxar Corp..................................... 818,343 14,627,881
--------------
28,967,694
--------------
CONSTRUCTION -- 0.5%
+J. Ray McDermott, SA........................... 500,000 11,062,500
Ply-Gem Industries, Inc......................... 400,000 7,100,000
--------------
18,162,500
--------------
CONTAINERS -- 0.2%
+Sealed Air Corp................................ 145,200 6,388,800
--------------
DIVERSIFIED GAS -- 0.1%
+Basin Exploration, Inc......................... 148,000 878,750
Tidewater, Inc.................................. 73,600 1,849,200
Western Gas Resources, Inc...................... 162,100 2,796,225
--------------
5,524,175
--------------
ELECTRICAL EQUIPMENT -- 0.4%
Belden, Inc..................................... 524,300 14,156,100
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
ELECTRONICS -- 0.3%
+ADT Ltd........................................ 620,000 $ 7,285,000
+IMO Industries, Inc............................ 596,900 5,372,100
--------------
12,657,100
--------------
FINANCIAL SERVICES -- 1.6%
American Express Co............................. 319,000 11,204,875
Dean Witter, Discover & Co...................... 736,500 34,615,500
Reinsurance Group of America, Inc............... 487,800 13,963,275
--------------
59,783,650
--------------
FOREST PRODUCTS -- 0.8%
Louisiana-Pacific Corp.......................... 395,100 10,371,375
Mead Corp....................................... 350,800 20,828,750
--------------
31,200,125
--------------
FURNITURE -- 0.2%
Leggett & Platt, Inc............................ 190,100 8,364,400
--------------
GAS PIPELINES -- 0.5%
Enron Oil & Gas Co.............................. 332,700 7,236,225
+Global Marine, Inc............................. 615,800 3,540,850
+Seagull Energy Corp............................ 387,200 6,388,800
--------------
17,165,875
--------------
HOSPITAL MANAGEMENT -- 0.7%
Columbia/HCA Healthcare Corp.................... 321,816 13,918,542
+Tenet Healthcare Corp.......................... 825,000 11,859,375
--------------
25,777,917
--------------
HOUSING RELATED -- 0.8%
+Giant Cement Holdings, Inc..................... 415,200 5,086,200
+Owens-Corning Fiberglas Corp................... 662,800 24,440,750
--------------
29,526,950
--------------
INSURANCE -- 2.5%
Emphesys Financial Group, Inc................... 314,600 7,432,425
Equitable of Iowa Companies..................... 372,700 12,252,513
Financial Security Assurance Holdings, Ltd...... 226,200 5,655,000
National Re Corp................................ 207,600 6,954,600
PennCorp Financial Group, Inc................... 638,400 11,810,400
Provident Life & Accident Insurance Co. (Class
'B' Stock).................................... 177,200 4,119,900
TIG Holdings, Inc............................... 588,300 13,530,900
Trenwick Group, Inc............................. 276,200 11,738,500
W.R. Berkley Corp............................... 192,800 6,844,400
Western National Corp........................... 900,000 11,137,500
--------------
91,476,138
--------------
MACHINERY -- 0.8%
Case Corp....................................... 475,300 14,140,175
DT Industries, Inc.............................. 234,500 2,755,375
+INDRESCO, Inc.................................. 390,700 6,055,850
Parker-Hannifin Corp............................ 204,750 7,422,188
--------------
30,373,588
--------------
MEDIA -- 2.2%
Central Newspapers, Inc. (Class 'A' Stock)...... 331,700 9,826,613
Comcast Corp. (Class 'A' Stock)................. 362,500 6,592,969
Comcast Corp. (Special Class 'A' Stock)......... 9,600 178,200
+Cox Communications, Inc. (Class 'A' Stock)..... 246,115 4,768,478
Lee Enterprises, Inc............................ 168,700 6,431,687
Media General, Inc. (Class 'A' Stock)........... 123,600 3,769,800
</TABLE>
B11
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Tele-Communications, Inc. (Class 'A' Stock).... 848,200 $ 19,879,687
Time Warner, Inc................................ 599,500 24,654,437
Times Mirror Co. (Class 'A' Stock).............. 280,276 6,691,590
--------------
82,793,461
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 4.3%
American Publishing Co. (Class 'A' Stock)....... 161,400 1,735,050
BW/IP, Inc. (Class 'A' Stock)................... 379,200 7,015,200
Danaher Corp.................................... 455,600 13,781,900
Donaldson Company, Inc.......................... 400,400 10,460,450
+Enterra Corp................................... 380,300 7,986,300
+FMC Corp....................................... 110,800 7,451,300
+IDEX Corp...................................... 285,600 9,567,600
+Itel Corp...................................... 168,700 6,579,300
+Jan Bell Marketing, Inc........................ 1,000,000 2,312,500
+Litton Industries, Inc......................... 259,700 9,576,437
Mark IV Industries, Inc......................... 572,565 12,310,147
Mascotech, Inc.................................. 650,000 8,043,750
Pentair, Inc.................................... 472,950 20,573,325
+SPS Transaction Services, Inc.................. 192,800 6,675,700
Textron, Inc.................................... 96,400 5,603,250
Trinity Industries, Inc......................... 385,500 12,817,875
+Wolverine Tube, Inc............................ 279,500 8,978,938
York International Corp......................... 199,000 8,955,000
--------------
160,424,022
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 1.1%
Eastman Kodak Co................................ 372,300 22,570,688
Whitman Corp.................................... 913,400 17,697,125
--------------
40,267,813
--------------
PETROLEUM -- 1.0%
Amerada Hess Corp............................... 100,000 4,887,500
Cabot Oil & Gas Corp. (Class 'A' Stock)......... 594,400 8,173,000
Elf Aquitaine, ADR.............................. 530,100 19,746,225
Parker & Parsley Petroleum Co................... 257,800 5,059,325
--------------
37,866,050
--------------
PETROLEUM SERVICES -- 2.3%
Baker Hughes, Inc............................... 300,000 6,150,000
+Coflexip, ADR.................................. 361,700 9,178,138
+ENSCO International, Inc....................... 600,000 9,525,000
+Hornbeck Offshore Services, Inc................ 208,000 3,276,000
+ICO, Inc....................................... 500,000 2,875,000
+Marine Drilling Co., Inc....................... 309,800 1,219,837
+Mesa, Inc...................................... 1,008,400 4,789,900
Murphy Oil Corp................................. 190,800 7,822,800
Noble Affiliates, Inc........................... 200,000 5,100,000
+Noble Drilling Corp............................ 800,000 5,900,000
+Oryx Energy Co................................. 849,400 11,679,250
+Pride Petroleum Services, Inc.................. 360,100 2,700,750
+Rowan Companies, Inc........................... 269,400 2,188,875
+Western Atlas, Inc............................. 300,000 13,312,500
--------------
85,718,050
--------------
RAILROADS -- 0.9%
Burlington Northern, Inc........................ 259,000 16,414,125
Illinois Central Corp........................... 440,000 15,180,000
--------------
31,594,125
--------------
REAL ESTATE DEVELOPMENT -- 0.8%
Zeneca Group, PLC, ADR.......................... 607,200 31,119,000
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
RESTAURANTS -- 0.4%
Morrison Restaurants, Inc....................... 350,300 $ 8,407,200
+Shoney's, Inc.................................. 530,100 6,228,675
--------------
14,635,875
--------------
RETAIL -- 2.6%
+Best Products Company, Inc..................... 1,094,500 8,824,406
+Burlington Coat Factory Warehouse.............. 244,600 2,537,725
+Caldor Corp.................................... 454,400 8,122,400
Charming Shoppes, Inc........................... 2,000,000 10,500,000
Dillard Department Stores, Inc. (Class 'A'
Stock)........................................ 500,000 14,687,500
+Filene's Basement Corp......................... 160,000 560,000
K mart Corp..................................... 1,058,700 15,483,487
Rite Aid Corp................................... 258,200 6,616,375
Sears, Roebuck & Co............................. 139,800 8,370,525
TJX Companies, Inc.............................. 914,900 12,122,425
Woolworth Corp.................................. 600,000 9,075,000
--------------
96,899,843
--------------
RUBBER -- 0.3%
Goodyear Tire & Rubber Co....................... 269,800 11,129,250
--------------
STEEL -- 1.9%
+Bethlehem Steel Corp........................... 1,000,000 16,250,000
+LTV Corp....................................... 1,500,000 21,937,500
+Material Sciences Corp......................... 675,000 13,753,125
+National Steel Corp. (Class 'B' Stock)......... 300,000 4,650,000
USX-U.S. Steel Group............................ 450,000 15,468,750
--------------
72,059,375
--------------
TELECOMMUNICATIONS -- 1.6%
+Airtouch Communications, Inc................... 385,500 10,986,750
Century Telephone Enterprises, Inc.............. 337,300 9,570,887
Frontier Corp................................... 797,700 19,144,800
MCI Communications Corp......................... 661,100 14,544,200
+Nextel Communications, Inc. (Class 'A'
Stock)........................................ 495,400 6,997,525
--------------
61,244,162
--------------
TEXTILES -- 1.4%
+Farah, Inc..................................... 258,500 1,680,250
+Fieldcrest Cannon, Inc......................... 460,000 9,947,500
+Fruit of the Loom, Inc. (Class 'A' Stock)...... 500,000 10,562,500
+Owens-Illinois, Inc............................ 552,700 7,185,100
Phillips-Van Heusen Corp........................ 600,000 9,300,000
+Tultex Corp.................................... 579,000 3,256,875
V.F. Corp....................................... 154,600 8,309,750
--------------
50,241,975
--------------
TOTAL COMMON STOCKS
(Cost $1,308,041,989).......................................... 1,508,343,451
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 0.1% SHARES VALUE
------------- --------------
<S> <C> <C>
MEDIA
Times Mirror Co. (Cum. Conv.), Series B......... 119,724 2,858,410
--------------
(Cost $2,807,626)
</TABLE>
B12
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 31.8% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 6.7%
Associates Corp. of North America,
6.875%, 01/15/97.............................. $ 5,250,000 $ 5,294,940
8.375%, 01/15/98.............................. 1,100,000 1,149,687
Banc One Credit Card Master Trust,
7.750%, 12/15/99, Series 1994-B, Class B...... 5,100,000 5,232,243
Capital One Bank, M.T.N.,
6.740%, 05/31/99, Tranche #TR00038............ 33,500,000 33,433,000
8.125%, 02/27/98, Tranche #TR00032............ 6,500,000 6,683,300
Chrysler Financial Corp., M.T.N.,
5.390%, 08/27/96, Tranche #TR00041............ 7,300,000 7,234,081
CIGNA Mortgage Securities, Inc.,
9.400%, 01/15/02, Series 1988-1, Class A2..... 2,698,315 2,761,979
Citicorp, M.T.N.,
8.500%, 02/24/97, Tranche #TR00128............ 5,100,000 5,285,078
Discover Card Trust,
7.875%, 04/16/98, Series 1991-C, Class B...... 10,000,000 10,106,200
Federal Express Corp., M.T.N.,
10.010%, 06/01/98, Tranche #SR00067........... 3,000,000 3,244,110
10.050%, 06/15/99, Tranche #SR00068........... 500,000 552,165
%Finova Capital Corp.,
6.500%, 03/06/98.............................. 13,000,000 12,980,500
First Union Corp.,
9.450%, 06/15/99.............................. 4,000,000 4,357,560
%Ford Motor Credit Co., M.T.N.,
6.438%, 02/01/99, Tranche #TR00137............ 35,000,000 34,911,450
General Motors Acceptance Corp.,
8.250%, 08/01/96.............................. 5,000,000 5,097,400
General Motors Acceptance Corp., M.T.N.,
6.300%, 09/10/97, Tranche #TR00532............ 5,000,000 4,991,200
6.500%, 06/10/96.............................. 13,000,000 13,051,480
7.375%, 07/20/98, Tranche #TR00667............ 4,650,000 4,755,090
7.500%, 11/04/97, Tranche #TR00598............ 15,000,000 15,346,950
7.850%, 03/05/97, Tranche #TR00187............ 3,300,000 3,380,982
**Liberty Mutual Insurance Co.,
8.500%, 05/15/25.............................. 4,125,000 4,210,264
**Manufacturers Life Insurance Co.,
7.875%, 04/15/05.............................. 10,000,000 10,336,250
Mellon Financial Co.,
6.500%, 12/01/97.............................. 1,650,000 1,657,178
%OKOBank,
7.938%, 09/27/49.............................. 12,500,000 12,531,250
**Pacific Mutual Life Insurance,
7.900%, 12/30/23.............................. 4,250,000 4,086,843
**Principal Mutual Life Insurance,
7.875%, 03/01/24.............................. 2,500,000 2,391,675
8.000%, 03/01/44.............................. 5,000,000 4,672,000
Santander Financial Issuances, Ltd.,
7.875%, 04/15/05.............................. 6,750,000 7,091,010
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Standard Credit Card Master Trust,
5.950%, 10/07/04. Series 1993-2A.............. $ 4,650,000 $ 4,421,825
Union Bank of Finland, Ltd.,
5.250%, 06/15/96.............................. 16,650,000 16,432,717
Westinghouse Credit Corp., M.T.N.,
8.750%, 06/03/96, Tranche #TR00248............ 2,600,000 2,645,812
--------------
250,326,219
--------------
FOREIGN -- 4.3%
**Banco de Commercio Exterior, SA, M.T.N.,
8.625%, 06/02/00.............................. 5,500,000 5,555,000
Banco Ganadero, SA, M.T.N.,
9.750%, 08/26/99.............................. 2,300,000 2,297,125
**9.750%, 08/26/99, Tranche #TR00001.......... 5,000,000 4,993,750
**%Cemex, SA,
6.250%, 10/25/95, Series B.................... 4,250,000 4,212,813
**Cemex, SA, M.T.N.,
9.500%, 09/20/01, Tranche #TR00010............ 12,500,000 9,609,375
**Compania Sud Americana de Vapores, SA,
7.375%, 12/08/03.............................. 10,000,000 9,300,000
Controladora Commercial Mexicana, SA,
8.750%, 04/21/98.............................. 5,190,000 3,944,400
Empresa Columbia de Petroleos,
7.250%, 07/08/98.............................. 8,250,000 8,043,750
Financiera Energetic Nacional, SA,
6.625%, 12/13/96.............................. 5,000,000 4,962,500
**Financiera Energetic Nacional, SA, M.T.N.,
9.000%, 11/08/99.............................. 7,500,000 7,687,500
Fomento Economico Mexicano, SA,
9.500%, 07/22/97.............................. 5,150,000 4,673,625
**Grupo Condumex, SA, M.T.N.,
6.250%, 07/27/96.............................. 4,300,000 3,913,000
Grupo Embotellador Mexicana,
10.750%, 11/19/97............................. 8,015,000 7,494,025
Grupo Televisa, SA,
10.000%, 11/09/97............................. 7,250,000 6,778,750
**%Kansallis-Osake Pankki, N.Y.,
8.650%, 12/29/49.............................. 10,000,000 10,475,000
Kansallis-Osake Pankki, N.Y., C.D.,
6.125%, 05/15/98.............................. 6,160,000 6,144,600
Kansallis-Osake-Pankki, N.Y.,
9.750%, 12/15/98.............................. 16,950,000 18,493,805
Quebec, Province of Canada,
7.500%, 07/15/23.............................. 3,750,000 3,631,463
Republic of Columbia,
7.125%, 05/11/98.............................. 2,775,000 2,768,063
7.250%, 02/23/04.............................. 5,400,000 4,995,000
8.750%, 10/06/99.............................. 4,825,000 4,993,875
Republic of Italy,
6.875%, 09/27/23.............................. 16,250,000 14,424,150
**Republic of Trinidad and Tobago,
11.750%, 10/03/04............................. 3,750,000 3,975,000
United Mexican States,
5.820%, 06/28/01.............................. 1,375,000 893,750
6.970%, 08/12/00.............................. 2,300,000 1,679,000
8.500%, 09/15/02.............................. 6,850,000 5,171,750
--------------
161,111,069
--------------
</TABLE>
B13
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
INDUSTRIAL -- 9.8%
AMR Corp.,
9.880%, 06/15/20.............................. $ 9,565,000 $ 10,939,776
Arkla, Inc., M.T.N.,
9.250%, 12/18/97, Tranche #TR00027............ 3,000,000 3,119,730
Auburn Hills Trust,
12.000%, 05/01/20............................. 11,550,000 16,897,072
Blockbuster Entertainment Corp.,
6.625%, 02/15/98.............................. 3,625,000 3,601,764
Boeing Co.,
8.625%, 11/15/31.............................. 3,625,000 4,172,266
8.750%, 09/15/31.............................. 7,500,000 8,748,300
Canadian Pacific Forest Products Ltd., M.T.N.,
9.250%, 06/15/02.............................. 10,500,000 10,975,860
Centex Corp.,
7.375%, 06/01/05.............................. 7,875,000 7,747,661
Coca-Cola Enterprises, Inc.,
6.500%, 11/15/97.............................. 3,750,000 3,778,163
Columbia/HCA Healthcare Corp.,
6.910%, 06/15/05.............................. 9,300,000 9,182,727
Delta Air Lines, Inc.,
9.250%, 03/15/22.............................. 7,300,000 7,776,471
9.750%, 05/15/21.............................. 10,000,000 11,148,600
Fleming Companies, Inc.,
10.625%, 12/15/01............................. 3,750,000 3,946,875
Hanson Overseas Corp.,
5.500%, 01/15/96.............................. 2,000,000 1,993,980
Hertz Corp.,
9.500%, 05/15/98.............................. 10,000,000 10,777,200
K mart Corp., M.T.N.,
7.770%, 07/02/02, Tranche #TR00044............ 3,000,000 3,128,550
8.190%, 11/24/03, Tranche #TR00019............ 2,500,000 2,667,850
Magma Copper Co.,
8.700%, 05/15/05.............................. 15,000,000 14,925,000
Nabisco, Inc.,
7.550%, 06/15/15.............................. 6,150,000 6,106,089
News America Holdings, Inc.,
7.450%, 06/01/00.............................. 3,500,000 3,568,215
7.500%, 03/01/00.............................. 6,500,000 6,655,350
8.625%, 02/01/03.............................. 7,250,000 7,819,270
9.125%, 10/15/99.............................. 12,500,000 13,558,124
Oryx Energy Co., M.T.N.,
6.050%, 02/01/96, Tranche #TR00013............ 12,000,000 11,924,400
PT Alatief Freeport Financial Co.,
9.750%, 04/15/01.............................. 8,950,000 9,196,125
RJR Nabisco, Inc.,
6.700%, 06/15/02.............................. 2,500,000 2,473,975
7.625%, 09/15/03.............................. 3,000,000 2,895,270
8.625%, 12/01/02.............................. 6,250,000 6,420,250
Rogers Cablesystems Ltd.,
10.000%, 03/15/05............................. 5,375,000 5,522,813
Royal Caribbean Cruises, Ltd.,
8.250%, 04/01/05.............................. 5,475,000 5,768,077
Sears, Roebuck & Co., M.T.N.,
9.420%, 04/01/96, Series IV................... 1,000,000 1,050,533
Sears, Roebuck Acceptance Corp.,
9.000%, 09/15/96.............................. 2,000,000 2,062,280
Service Corp. International,
7.000%, 06/01/15.............................. 2,500,000 2,536,600
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Tele-Communications, Inc.,
9.250%, 04/15/02.............................. $ 10,784,000 $ 11,693,091
Time Warner Entertainment Co., L.P.,
9.625%, 05/01/02.............................. 6,640,000 7,441,249
Time Warner, Inc.,
**6.050%, 07/01/95............................ 8,000,000 8,000,000
7.750%, 06/15/05.............................. 12,500,000 12,409,375
United Air Lines, Inc.,
9.750%, 08/15/21.............................. 7,500,000 8,093,175
10.670%, 05/01/04............................. 19,250,000 22,176,963
11.210%, 05/01/14............................. 2,500,000 3,036,175
USX Corp.,
9.800%, 07/01/01.............................. 13,303,000 14,774,179
Viacom, Inc.,
7.750%, 06/01/05.............................. 50,675,000 51,163,506
Westinghouse Electric Corp., M.T.N.,
8.700%, 06/20/96, Tranche #TR00029............ 2,950,000 3,004,133
--------------
364,877,062
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 10.1%
Federal National Mortgage Association,
9.050%, 04/10/00.............................. 14,000,000 15,614,340
United States Treasury Bonds,
7.500%, 11/15/24.............................. 18,550,000 20,523,906
11.250%, 02/15/15............................. 115,100,000 172,685,680
12.000%, 08/15/13............................. 32,100,000 47,347,500
United States Treasury Notes,
6.000%, 11/30/97.............................. 61,700,000 61,825,251
6.250%, 05/31/00-02/15/03..................... 8,050,000 8,121,561
6.500%, 05/15/05.............................. 6,750,000 6,893,438
7.250%, 11/15/96-02/15/98..................... 31,000,000 31,708,620
7.500%, 11/15/01-02/15/05..................... 7,975,000 8,620,988
--------------
373,341,284
--------------
UTILITIES -- 0.9%
%Texas Utilities Electric Co.,
6.563%, 05/01/99.............................. 35,000,000 35,014,000
--------------
TOTAL LONG-TERM BONDS
(Cost $1,167,022,955).......................................... 1,184,669,634
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 28.0% AMOUNT VALUE
------------- --------------
<S> <C> <C>
BANK-RELATED INSTRUMENTS -- 5.7%
Bank of Montreal, T.D.,
5.990%, 07/05/95.............................. $ 20,000,000 $ 20,000,000
Bank of New York, C.D.,
6.150%, 07/03/95.............................. 3,000,000 3,000,000
6.270%, 10/31/95.............................. 2,000,000 2,000,446
Caisse Nationale de Credit Agricole, C.D.,
6.220%, 11/02/95.............................. 8,000,000 8,000,498
Fuji Bank, Ltd., T.D.,
6.000%, 07/10/95.............................. 40,000,000 40,000,000
Industrial Bank of Japan, Ltd., T.D.,
6.020%, 07/05/95.............................. 24,000,000 24,000,000
6.125%, 07/05/95.............................. 5,738,000 5,738,000
Mitsubishi Bank, Ltd., C.D.,
6.125%, 07/12/95.............................. 23,000,000 23,000,000
Mitsubishi Bank, Ltd., T.D.,
6.188%, 07/07/95.............................. 25,000,000 25,000,000
</TABLE>
B14
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
National Westminster Bank, PLC, C.D.,
5.850%, 12/26/95.............................. $ 2,000,000 $ 2,000,000
Norinchukin Bank, C.D.,
6.060%, 07/20/95.............................. 14,000,000 14,000,065
Societe Generale Bank, C.D.,
7.650%, 01/08/96.............................. 3,000,000 3,014,878
Sumitomo Bank, Ltd., C.D.,
6.000%, 07/10/95.............................. 28,000,000 28,000,000
6.060%, 07/05/95.............................. 9,000,000 9,000,020
Sumitomo Bank, Ltd., T.D.,
6.060%, 07/14/95.............................. 6,000,000 6,000,018
--------------
212,753,925
--------------
COMMERCIAL PAPER -- 13.9%
Abbey National North America Corp.,
5.820%, 09/15/95.............................. 8,000,000 7,904,293
American Express Credit Corp.,
5.900%, 10/16/95.............................. 15,000,000 14,741,875
6.180%, 08/21/95.............................. 10,000,000 9,915,883
American General Financial Corp.,
5.850%, 09/18/95.............................. 5,000,000 4,937,438
American Home Food Products, Inc.,
5.970%, 07/11/95-07/28/95..................... 10,000,000 9,972,638
American Home Products Corp.,
5.950%, 07/27/95.............................. 12,143,000 12,094,833
5.980%, 07/27/95.............................. 7,000,000 6,972,093
American Honda Finance Corp.,
5.880%, 09/05/95.............................. 1,000,000 989,547
6.050%, 07/31/95.............................. 5,000,000 4,976,472
Aristar, Inc.,
6.020%, 07/05/95.............................. 3,345,000 3,343,881
Associates Corp. of North America,
5.910%, 08/29/95.............................. 6,000,000 5,943,855
5.960%, 08/02/95.............................. 2,000,000 1,990,067
6.000%, 07/05/95.............................. 26,000,000 25,991,333
AT&T Capital Corp.,
5.830%, 09/08/95.............................. 2,000,000 1,978,299
AT&T Corp.,
5.830%, 09/12/95.............................. 4,000,000 3,954,008
Bank of New York,
5.980%, 07/05/95.............................. 2,000,000 1,999,336
BHF Finance, Inc.,
5.800%, 09/22/95.............................. 7,000,000 6,908,650
Bradford & Bingley Building Society,
5.900%, 09/13/95.............................. 4,000,000 3,952,800
Bridgestone/Firestone, Inc.,
6.350%, 07/05/95.............................. 7,310,000 7,307,421
CIT Group Holdings, Inc.,
5.850%, 09/18/95.............................. 4,000,000 3,949,950
5.900%, 09/11/95.............................. 12,000,000 11,862,333
6.000%, 07/05/95.............................. 3,500,000 3,498,833
Coca Cola Enterprises, Inc.,
6.000%, 07/07/95-11/03/95..................... 3,610,000 3,567,927
Commerzbank U.S. Finance, Inc.,
5.850%, 09/21/95.............................. 4,300,000 4,244,100
Countrywide Funding Corp.,
6.020%, 07/28/95.............................. 14,000,000 13,941,472
Dean Witter, Discover & Company,
5.970%, 07/05/95.............................. 7,000,000 6,997,678
Duracell, Inc.,
5.980%, 08/11/95.............................. 2,000,000 1,987,043
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
Falcon Asset Securitization Corp.,
5.930%, 08/23/95.............................. $ 2,354,000 $ 2,334,224
Finova Capital Corp.,
5.980%, 08/03/95.............................. 7,000,000 6,963,954
6.000%, 08/21/95.............................. 4,451,000 4,414,650
6.020%, 08/11/95.............................. 5,000,000 4,967,392
6.030%, 07/31/95.............................. 2,000,000 1,990,620
6.050%, 07/27/95-08/07/95..................... 5,000,000 4,976,136
Ford Motor Credit Co.,
5.950%, 07/14/95.............................. 27,900,000 27,849,276
6.070%, 01/05/96.............................. 14,300,000 13,851,528
6.200%, 09/12/95.............................. 6,000,000 5,926,633
General Electric Capital Corp.,
6.050%, 10/17/95-10/18/95..................... 12,000,000 11,785,225
6.530%, 10/30/95.............................. 14,000,000 13,697,806
General Motors Acceptance Corp.,
6.150%, 07/12/95-07/13/95..................... 53,339,000 53,255,542
GTE Finance Corp.,
5.980%, 08/11/95.............................. 2,000,000 1,987,043
Hanson Finance, PLC,
5.830%, 09/20/95-09/22/95..................... 5,000,000 4,935,060
5.900%, 09/21/95.............................. 10,000,000 9,868,889
Household Finance Corp.,
5.820%, 09/26/95.............................. 5,000,000 4,931,292
ITT Hartford Group, Inc.,
5.960%, 07/14/95.............................. 7,000,000 6,987,252
6.000%, 07/27/95.............................. 9,000,000 8,964,000
Maguire/Thomas Partners,
6.000%, 07/17/95.............................. 2,000,000 1,995,333
McKenna Triangle National Corp.,
5.900%, 07/27/95.............................. 2,000,000 1,992,133
5.980%, 07/27/95.............................. 8,000,000 7,968,107
Merrill Lynch & Co., Inc.,
5.970%, 07/11/95.............................. 11,000,000 10,985,407
Morgan Stanley Group, Inc.,
5.850%, 10/02/95.............................. 10,000,000 9,852,125
Norwest Financial, Inc.,
6.000%, 07/05/95.............................. 4,000,000 3,998,667
Orix America, Inc.,
6.000%, 07/17/95.............................. 3,000,000 2,993,000
Paribas Finance, Inc.,
6.000%, 08/01/95.............................. 4,000,000 3,980,667
Pennsylvania Power & Light Co.,
5.950%, 07/17/95.............................. 2,333,000 2,327,602
Philip Morris Capital Corp.,
5.900%, 08/18/95.............................. 3,000,000 2,977,383
Philip Morris Companies, Inc.,
6.020%, 07/13/95.............................. 10,000,000 9,983,279
PNC Funding Corp.,
5.960%, 08/18/95.............................. 6,000,000 5,954,307
Preferred Receivables Funding Corp.,
5.850%, 09/20/95.............................. 2,850,000 2,813,413
Sears Roebuck Acceptance Corp.,
5.980%, 07/11/95.............................. 6,000,000 5,992,027
Sherwood Medical Co.,
5.950%, 07/27/95.............................. 19,000,000 18,924,633
5.970%, 07/21/95.............................. 5,000,000 4,985,075
Sumitomo Corp. of America,
6.020%, 07/31/95.............................. 13,955,000 13,889,660
U.S. West Communications, Inc.,
5.850%, 08/30/95.............................. 5,000,000 4,952,875
WCP Funding, Inc.,
5.950%, 08/15/95.............................. 3,000,000 2,978,679
</TABLE>
B15
<PAGE>
CONSERVATIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
Whirlpool Corp.,
5.970%, 07/10/95.............................. $ 11,000,000 $ 10,987,231
Whirlpool Financial Corp.,
6.000%, 07/31/95.............................. 4,900,000 4,877,134
Xerox Credit Corp.,
5.820%, 09/14/95.............................. 4,000,000 3,952,793
--------------
514,972,110
--------------
LOAN PARTICIPATIONS -- 0.1%
Morgan Stanley Group, Inc.,
6.080%, 07/07/95.............................. 3,373,000 3,373,000
--------------
TERM NOTES -- 6.5%
Abbey National Treasury Services, PLC,
6.400%, 05/17/96.............................. 16,000,000 16,000,000
%American Express Centurion Bank,
4.500%, 08/04/95, Tranche #TR00037............ 4,000,000 3,999,965
Associates Corp. of North America,
8.800%, 03/01/96.............................. 2,000,000 2,029,359
Atlantic Richfield Co.,
10.375%, 07/15/95............................. 2,000,000 2,002,414
Bank One Indianapolis N.A.,
7.180%, 02/05/96, Tranche #TR00002............ 6,000,000 6,013,961
Bank One Milwaukee N.A.,
5.980%, 07/31/95, Tranche #TR00010............ 47,000,000 46,999,892
%Corestates Capital Corp.,
6.020%, 07/19/95, Tranche #TR00076............ 10,000,000 10,000,169
Exxon Capital Corp.,
7.875%, 04/15/96.............................. 5,500,000 5,574,623
Ford Motor Credit Co.,
9.850%, 02/27/96, Tranche #TR00018............ 5,000,000 5,103,674
%General Electric Capital Corp.,
6.000%, 09/28/95, Tranche #TR00291............ 11,550,000 11,550,500
Huntington National Bank,
6.200%, 11/03/95.............................. 5,000,000 5,001,388
Mellon Bank N.A.,
6.200%, 11/01/95, Tranche #TR00005............ 4,000,000 3,999,739
NationsBank of Texas N.A.,
6.820%, 10/31/95, Tranche #TR00048............ 3,000,000 3,001,492
7.000%, 02/06/96, Tranche #TR00050............ 40,000,000 40,013,733
7.300%, 01/26/96, Tranche #TR00043............ 4,000,000 4,009,420
7.550%, 01/09/96, Tranche #TR00037............ 8,500,000 8,535,040
Northern Trust Company,
6.600%, 11/17/95, Tranche #TR00023............ 25,000,000 25,029,138
PepsiCo, Inc.,
15.000%, 11/08/95, Tranche #TR00057........... 5,000,000 5,148,491
%Salomon, Inc.,
6.975%, 02/14/96.............................. 25,000,000 25,000,000
State Street Bank & Trust Co.,
6.010%, 09/20/95, Tranche #TR00419............ 3,000,000 2,999,943
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
USX Corp.,
7.063%, 02/15/96.............................. $ 7,500,000 $ 7,513,512
--------------
239,526,453
--------------
PROMISSORY NOTES -- 1.3%
%General Electric Capital Corp.,
5.969%, 10/23/95.............................. 15,000,000 15,000,000
%Lehman Brothers Holdings, Inc.,
6.263%, 11/20/95.............................. 26,000,000 26,000,000
Paribas Finance, Inc.,
5.840%, 09/28/95.............................. 3,000,000 2,957,660
5.940%, 07/26/95.............................. 5,000,000 4,981,025
--------------
48,938,685
--------------
REPURCHASE AGREEMENTS -- 0.5%
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 19,468,000 19,468,000
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 1,039,032,173
--------------
LIABILITIES -- (0.5%)
(net of other assets).......................................... (19,303,920)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $3,715,599,748
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
C.D. Certificates of Deposit
L.P. Limited Partnership
M.T.N. Medium Term Note
PLC Public Limited Company (British Corporation)
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
T.D. Time Deposit
**Indicates a restricted security; the aggregate cost of the restricted
securities is $94,969,153. The aggregate value, $93,418,470 is
approximately 2.5% of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
%Indicates a variable rate security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B16
<PAGE>
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 65.7% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 1.3%
Boeing Co....................................... 382,600 $ 23,960,325
+Coltec Industries, Inc......................... 550,400 9,494,400
United Technologies Corp........................ 190,900 14,914,063
--------------
48,368,788
--------------
AUTOS - CARS & TRUCKS -- 2.0%
Chrysler Corp................................... 429,200 20,547,950
General Motors Corp............................. 550,000 25,781,250
General Motors Corp. (Class 'E' Stock).......... 702,700 30,567,450
--------------
76,896,650
--------------
BANKS AND SAVINGS & LOANS -- 4.1%
Bank of New York Company, Inc................... 1,549,400 62,557,025
J.P. Morgan & Co., Inc.......................... 556,800 39,045,600
NationsBank Corp................................ 520,000 27,885,000
Norwest Corp.................................... 997,800 28,686,750
--------------
158,174,375
--------------
CHEMICALS -- 3.8%
A. Schulman, Inc................................ 390,800 11,235,500
Agrium, Inc..................................... 1,351,700 45,773,623
E.I. Du Pont de Nemours & Co.................... 692,600 47,616,250
Eastman Chemical Co............................. 404,600 24,073,700
+McWhorter Technologies, Inc.................... 243,950 3,659,250
+Mississippi Chemical Corp...................... 278,700 5,574,000
OM Group, Inc................................... 301,700 8,598,450
--------------
146,530,773
--------------
CHEMICALS - SPECIALTY -- 1.1%
+IMC Global, Inc................................ 751,400 40,669,525
--------------
COMMERCIAL SERVICES -- 0.6%
ServiceMaster, L.P.............................. 540,850 14,535,343
Sotheby's Holdings, Inc. (Class 'A' Stock)...... 465,100 6,336,988
--------------
20,872,331
--------------
COMPUTER SERVICES -- 2.2%
+American Management Systems, Inc............... 382,050 9,599,005
Automatic Data Processing, Inc.................. 740,400 46,552,650
First Data Corp................................. 422,500 24,029,688
National Data Corp.............................. 174,700 4,039,938
--------------
84,221,281
--------------
DIVERSIFIED GAS -- 0.4%
+Basin Exploration, Inc......................... 235,400 1,397,688
Cross Timbers Oil Co............................ 810,000 12,858,750
--------------
14,256,438
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 0.7%
International Business Machines Corp............ 290,500 27,887,999
--------------
DRUGS AND HOSPITAL SUPPLIES -- 2.3%
Abbott Laboratories............................. 345,200 13,980,600
American Home Products Corp..................... 400,000 30,950,000
Baxter International, Inc....................... 725,000 26,371,875
Schering-Plough Corp............................ 400,000 17,650,000
--------------
88,952,475
--------------
ELECTRICAL EQUIPMENT -- 0.7%
Baldor Electric Co.............................. 501,640 14,359,445
Belden, Inc..................................... 519,900 14,037,300
--------------
28,396,745
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
ELECTRONICS -- 3.0%
+ADT Ltd........................................ 1,641,200 $ 19,284,100
Emerson Electric Co............................. 1,093,800 78,206,700
Teleflex, Inc................................... 400,000 17,200,000
--------------
114,690,800
--------------
FINANCIAL SERVICES -- 5.3%
Dean Witter, Discover & Co...................... 1,087,600 51,117,200
Federal Home Loan Mortgage Corp................. 898,500 61,771,875
First USA, Inc.................................. 610,300 27,082,062
Manufactured Home Communities, Inc.............. 717,900 11,037,713
MBNA Corp....................................... 841,100 28,387,125
Morgan Stanley Group, Inc....................... 300,000 24,300,000
--------------
203,695,975
--------------
FOODS -- 1.9%
Archer-Daniels-Midland Co....................... 2,031,140 37,829,983
Pioneer Hi-Bred International, Inc.............. 788,200 33,104,400
--------------
70,934,383
--------------
FOREST PRODUCTS -- 1.5%
Caraustar Industries, Inc....................... 419,500 7,551,000
Willamette Industries, Inc...................... 903,200 50,127,600
--------------
57,678,600
--------------
GAS PIPELINES -- 0.2%
+Seagull Energy Corp............................ 535,400 8,834,099
--------------
HEALTHCARE -- 0.3%
+Sybron International Corp...................... 260,200 10,375,474
--------------
HOSPITAL MANAGEMENT -- 1.9%
+Apria Healthcare Group, Inc.................... 323,600 9,141,700
Columbia/HCA Healthcare Corp.................... 898,362 38,854,157
+Health Care and Retirement Corp................ 590,800 17,280,900
+Tenet Healthcare Corp.......................... 583,600 8,389,250
--------------
73,666,007
--------------
INSURANCE -- 3.5%
American International Group, Inc............... 491,800 56,065,200
Chubb Corp...................................... 309,500 24,798,688
General Re Corp................................. 332,000 44,446,500
NAC Re Corp..................................... 277,400 8,634,075
--------------
133,944,463
--------------
LEISURE -- 3.4%
+Bally Entertainment Corp....................... 1,704,000 20,874,000
Carnival Corp. (Class 'A' Stock)................ 2,000,000 46,750,000
Hasbro, Inc..................................... 433,600 13,766,800
+MGM Grand, Inc................................. 426,700 11,680,913
+Mirage Resorts, Inc............................ 600,400 18,387,250
+Players International, Inc..................... 550,000 11,000,000
Royal Caribbean Cruise, Ltd..................... 411,400 9,050,800
--------------
131,509,763
--------------
MACHINERY -- 0.1%
+Thermo Fibertek, Inc........................... 225,300 4,477,837
--------------
MEDIA -- 2.9%
Comcast Corp. (Class 'A' Stock)................. 710,100 $ 12,914,944
Gannett Co., Inc................................ 364,700 19,784,975
+Heritage Media Corp. (Class 'A' Stock)......... 297,700 8,596,088
Shaw Communications, Inc. (Class 'B' Stock)..... 703,700 4,227,889
</TABLE>
B17
<PAGE>
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Tele-Communications, Inc. (Class 'A'Stock)..... 1,642,100 $ 38,486,718
+Viacom, Inc. (Class 'B' Stock)................. 533,800 24,754,975
--------------
108,765,589
--------------
MINERAL RESOURCES -- 2.6%
Pittston Services Group......................... 350,000 8,400,000
Potash Corp. of Saskatchewan, Inc............... 1,027,600 57,417,150
+Sante Fe Pacific Gold Corp..................... 974,000 11,809,750
Vigoro Corp..................................... 483,100 20,048,650
--------------
97,675,550
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 6.6%
+American Business Information, Inc............. 540,100 14,582,700
Danaher Corp.................................... 226,200 6,842,550
Expeditors International of Washington, Inc..... 254,000 5,715,000
General Electric Co............................. 677,300 38,182,787
Illinois Tool Works, Inc........................ 960,000 52,800,000
Libbey, Inc..................................... 494,000 10,250,500
Martin Marietta Materials, Inc.................. 647,600 12,952,000
Modine Manufacturing Co......................... 316,600 11,635,050
Pentair, Inc.................................... 263,200 11,449,200
+Thermo Electron Corp........................... 865,650 34,842,413
TJ International, Inc........................... 229,800 4,308,750
Trinity Industries, Inc......................... 291,300 9,685,725
Tyco International Ltd.......................... 403,600 21,794,400
York International Corp......................... 400,000 18,000,000
--------------
253,041,075
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 0.6%
+DeVRY, Inc..................................... 779,200 15,584,000
Kellwood Co..................................... 533,900 9,076,300
--------------
24,660,300
--------------
PETROLEUM -- 2.7%
Exxon Corp...................................... 410,000 28,956,250
Royal Dutch Petroleum Co., ADR.................. 606,300 73,892,813
--------------
102,849,063
--------------
PETROLEUM SERVICES -- 1.2%
Baker Hughes, Inc............................... 581,700 11,924,850
+Mesa, Inc...................................... 537,800 2,554,550
+Oryx Energy Co................................. 575,100 7,907,625
Total SA, ADR................................... 757,500 22,914,375
--------------
45,301,400
--------------
RAILROADS -- 2.2%
Illinois Central Corp........................... 682,000 23,529,000
Kansas City Southern Industries, Inc............ 900,000 33,525,000
Norfolk Southern Corp........................... 420,000 28,297,500
--------------
85,351,500
--------------
REAL ESTATE DEVELOPMENT -- 0.8%
Crescent Real Estate Equities, Inc.............. 492,600 15,701,625
Duke Realty Investments, Inc.................... 444,800 12,565,600
Equity Residential Properties Trust............. 43,300 1,206,988
--------------
29,474,213
--------------
RETAIL -- 1.2%
Harcourt General, Inc........................... 480,500 20,421,250
+Mikasa, Inc.................................... 205,800 3,061,275
+Toys 'R' Us, Inc............................... 775,000 22,668,750
--------------
46,151,275
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
STEEL -- 0.5%
Broken Hill Proprietary Co., Ltd., ADR.......... 200,000 $ 9,875,000
+Material Sciences Corp......................... 164,300 3,347,613
Worthington Industries, Inc..................... 320,000 6,540,000
--------------
19,762,613
--------------
TELECOMMUNICATIONS -- 1.7%
+Airtouch Communications, Inc................... 641,100 18,271,350
AT&T Corp....................................... 596,200 31,673,125
TCA Cable TV, Inc............................... 494,300 13,346,100
--------------
63,290,575
--------------
TEXTILES -- 0.2%
Unifi, Inc...................................... 272,500 6,539,999
--------------
TOBACCO -- 2.2%
Philip Morris Companies, Inc.................... 438,900 32,643,188
RJR Nabisco Holdings Corp....................... 1,905,000 53,101,875
--------------
85,745,063
--------------
TOTAL COMMON STOCKS
(Cost $2,144,802,833).......................................... 2,513,642,996
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 0.6% SHARES VALUE
------------- --------------
<S> <C> <C>
MEDIA
News Corp., Ltd., ADR........................... 1,140,000 22,800,000
--------------
(Cost $17,330,010)
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 27.9% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 7.0%
Banc One Credit Card Master Trust,
7.750%, 12/15/99, Series 1994-B, Class B...... $ 5,000,000 $ 5,129,650
Capital One Bank, M.T.N.,
6.740%, 05/31/99, Tranche #TR00038............ 33,500,000 33,433,000
8.125%, 02/27/98, Tranche #TR00032............ 6,500,000 6,683,300
Chase Manhattan Credit Card Trust,
7.400%, 05/15/00, Series 1992-1, Class A...... 5,000,000 5,079,650
%Finova Capital Corp.,
6.500%, 03/06/98.............................. 46,500,000 46,430,250
%First USA Bank, M.T.N.,
6.463%, 03/07/97, Tranche #TR00009............ 20,000,000 20,058,400
Ford Motor Credit Co., M.T.N.,
%6.438%, 02/01/99, Tranche #TR00137........... 28,000,000 27,929,160
%6.463%, 06/02/98, Tranche #TR00810........... 14,000,000 14,003,360
%6.525%, 05/26/98, Tranche #TR00803........... 10,000,000 10,005,100
General Motors Acceptance Corp., M.T.N.,
6.500%, 06/10/96.............................. 10,000,000 10,039,600
7.000%, 05/19/97, Tranche #TR00041............ 10,000,000 10,118,200
7.000%, 06/02/97, Tranche #TR00476............ 6,000,000 6,071,220
</TABLE>
B18
<PAGE>
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
7.375%, 07/20/98, Tranche #TR00667............ $ 4,500,000 $ 4,601,700
7.850%, 03/05/97.............................. 3,200,000 3,278,528
7.875%, 03/15/00, Tranche #TR00187............ 5,000,000 5,226,500
**Liberty Mutual Insurance Co.,
8.500%, 05/15/25.............................. 4,125,000 4,210,264
**Manufacturers Life Insurance Co.,
7.875%, 04/15/05.............................. 10,000,000 10,336,250
%MBNA Master Credit Card Trust,
5.745%, 01/15/02, Series 1994-A, Class B...... 7,500,000 7,514,025
%OKOBank,
7.938%, 09/27/49.............................. 12,500,000 12,531,250
**Pacific Mutual Life Insurance,
7.900%, 12/30/23.............................. 4,250,000 4,086,842
Principal Mutual Life Insurance,
**7.875%, 03/01/24............................ 2,500,000 2,391,675
**8.000%, 03/01/44............................ 5,000,000 4,672,000
Santander Financial Issuances, Ltd.,
7.875%, 04/15/05.............................. 6,750,000 7,091,010
Standard Credit Card Master Trust,
5.950%, 10/07/04, Series 1993-2A.............. 4,500,000 4,279,185
Westinghouse Credit Corp., M.T.N.,
8.750%, 06/03/96, Tranche #TR00248............ 3,330,000 3,388,675
--------------
268,588,794
--------------
FOREIGN -- 4.3%
**Banco de Commercio Exterior, SA, M.T.N.,
8.625%, 06/02/00, Tranche #TR00001............ 5,500,000 5,555,000
Banco Ganadero, SA, M.T.N.,
9.750%, 08/26/99.............................. 2,300,000 2,297,125
**9.760%, 08/26/99, Tranche #TR00001.......... 5,000,000 4,993,750
**Cemex, SA,
8.875%, 06/10/98.............................. 5,000,000 4,287,500
**Cemex, SA, M.T.N.,
9.500%, 09/20/01, Tranche #TR00010............ 12,500,000 9,609,375
**Compania Sud Americana de Vapores, SA,
7.375%, 12/08/03.............................. 7,250,000 6,742,500
Controladora Commercial Mexicana, SA,
8.750%, 04/21/98.............................. 15,100,000 11,476,000
Empresa Columbia de Petroleos,
7.250%, 07/08/98.............................. 8,250,000 8,043,750
Empresas La Moderna, SA,
10.250%, 11/12/97............................. 2,000,000 1,835,000
Financiera Energetic Nacional, SA,
6.625%, 12/13/96.............................. 5,100,000 5,061,750
**Financiera Energetic Nacional, SA, M.T.N.,
9.000%, 11/08/99.............................. 7,500,000 7,687,500
Fomento Economico Mexicano, SA,
9.500%, 07/22/97.............................. 6,300,000 5,717,250
Grupo Embotellador Mexicana,
10.750%, 11/19/97............................. 8,020,000 7,498,700
Grupo Televisa, SA,
10.000%, 11/09/97............................. 4,000,000 3,740,000
**%Kansallis-Osake Pankki, N.Y.,
8.650%, 12/29/49.............................. 9,000,000 9,427,500
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Kansallis-Osake-Pankki, N.Y.,
9.750%, 12/15/98.............................. $ 16,760,000 $ 18,286,501
New Zealand Government,
9.875%, 01/15/11.............................. 7,300,000 9,251,728
Quebec, Province of Canada,
7.500%, 07/15/23.............................. 3,750,000 3,631,462
Republic of Columbia,
7.125%, 05/11/98.............................. 2,700,000 2,693,250
7.250%, 02/23/04.............................. 4,100,000 3,792,500
8.750%, 10/06/99.............................. 4,800,000 4,968,000
Republic of Italy,
6.875%, 09/27/23.............................. 17,250,000 15,311,790
**Republic of Trinidad and Tobago,
11.750%, 10/03/04............................. 3,650,000 3,869,000
United Mexican States,
5.820%, 06/28/01.............................. 1,375,000 893,750
6.970%, 08/12/00.............................. 2,300,000 1,679,000
8.500%, 09/15/02.............................. 6,925,000 5,228,375
--------------
163,578,056
--------------
INDUSTRIAL -- 10.0%
Auburn Hills Trust,
12.000%, 05/01/20............................. 11,050,000 16,165,598
Blockbuster Entertainment Corp.,
6.625%, 02/15/98.............................. 3,625,000 3,601,764
Boeing Co.,
8.625%, 11/15/31.............................. 3,625,000 4,172,266
8.750%, 09/15/31.............................. 2,500,000 2,916,100
Canadian Pacific Forest Products Ltd., M.T.N.,
9.250%, 06/15/02.............................. 10,600,000 11,080,392
Centex Corp.,
7.375%, 06/01/05.............................. 7,875,000 7,747,661
Columbia/HCA Healthcare Corp.,
6.910%, 06/15/05.............................. 9,250,000 9,133,358
Delta Air Lines, Inc.,
9.250%, 03/15/22.............................. 8,709,000 9,277,436
9.750%, 05/15/21.............................. 34,956,000 38,971,046
9.875%, 01/01/98.............................. 6,000,000 6,370,680
Fleming Companies, Inc.,
10.625%, 12/15/01............................. 24,000,000 25,260,000
K mart Corp., M.T.N.,
7.770%, 07/02/02, Tranche #TR00044............ 3,000,000 3,128,550
8.190%, 11/24/03, Tranche #TR00019............ 2,500,000 2,667,850
Magma Copper Co.,
8.700%, 05/15/05.............................. 15,000,000 14,925,000
Nabisco, Inc.,
6.700%, 06/15/02.............................. 2,500,000 2,473,975
7.550%, 06/15/15.............................. 6,150,000 6,106,089
News America Holdings, Inc.,
7.450%, 06/01/00.............................. 3,500,000 3,568,215
7.500%, 03/01/00.............................. 6,500,000 6,655,350
8.625%, 02/01/03.............................. 7,250,000 7,819,270
9.125%, 10/15/99.............................. 12,500,000 13,558,125
Oryx Energy Co.,
9.300%, 05/01/96.............................. 2,350,000 2,381,490
Oryx Energy Co., M.T.N.,
6.050%, 02/01/96, Tranche #TR00013............ 10,500,000 10,433,850
PT Alatief Freeport Financial Co.,
9.750%, 04/15/01.............................. 7,600,000 7,809,000
</TABLE>
B19
<PAGE>
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
RJR Nabisco, Inc.,
7.625%, 09/15/03.............................. $ 3,000,000 $ 2,895,270
8.625%, 12/01/02.............................. 6,250,000 6,420,250
Rogers Cablesystems Ltd.,
10.000%, 03/15/05............................. 5,375,000 5,522,813
Royal Caribbean Cruises, Ltd.,
8.250%, 04/01/05.............................. 5,475,000 5,768,077
Service Corp. International,
7.000%, 06/01/15.............................. 2,500,000 2,536,600
Tele-Communications, Inc.,
9.250%, 04/15/02.............................. 10,775,000 11,683,333
Time Warner Entertainment Co., L.P.,
9.625%, 05/01/02.............................. 6,640,000 7,441,249
Time Warner, Inc.,
7.750%, 06/15/05.............................. 12,500,000 12,409,375
Transco Energy Co.,
9.125%, 05/01/98.............................. 14,000,000 14,895,720
United Air Lines, Inc.,
9.750%, 08/15/21.............................. 7,500,000 8,093,175
10.670%, 05/01/04, Series A................... 19,250,000 22,176,962
11.210%, 05/01/14, Series B................... 2,500,000 3,036,175
USX Corp.,
9.800%, 07/01/01.............................. 13,270,000 14,737,529
Viacom, Inc.,
7.750%, 06/01/05.............................. 50,675,000 51,163,506
--------------
385,003,099
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 5.3%
Federal National Mortgage Association,
Zero Coupon, 10/09/19......................... 11,800,000 2,087,066
Government National Mortgage Association,
8.950%, 10/15/28, Pool #222286................ 4,015,529 4,085,175
United States Treasury Bonds,
7.500%, 11/15/24.............................. 5,000,000 5,532,050
8.875%, 08/15/17.............................. 12,200,000 15,189,000
9.250%, 02/15/16.............................. 16,200,000 20,771,478
11.250%, 02/15/15............................. 80,300,000 120,474,893
United States Treasury Notes,
6.125%, 05/15/98.............................. 20,300,000 20,433,168
6.250%, 02/15/03.............................. 1,250,000 1,253,325
6.500%, 05/15/05.............................. 6,750,000 6,893,438
7.500%, 11/15/01-02/15/05..................... 4,475,000 4,809,802
--------------
201,529,395
--------------
UTILITIES -- 1.3%
%Texas Utilities Electric Co.,
6.563%, 05/01/99.............................. 50,650,000 50,670,260
--------------
TOTAL LONG-TERM BONDS
(Cost $1,058,963,745).......................................... 1,069,369,604
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 6.1% AMOUNT VALUE
------------- --------------
<S> <C> <C>
BANK-RELATED INSTRUMENTS -- 0.8%
Bank of Montreal, T.D.,
5.990%, 07/05/95.............................. 5,000,000 5,000,000
Bank of New York, C.D.,
6.150%, 07/03/95.............................. 1,000,000 1,000,000
Caisse Nationale de Credit Agricole, C.D.,
6.220%, 11/02/95.............................. 1,000,000 1,000,062
Fuji Bank, Ltd., T.D.,
6.000%, 07/10/95.............................. 6,000,000 6,000,000
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
Industrial Bank of Japan, Ltd., T.D.,
6.020%, 07/05/95.............................. $ 3,000,000 $ 3,000,000
Lloyds Bank, C.D. PLC,
6.750%, 07/11/95.............................. 1,500,000 1,500,093
Mitsubishi Bank, Ltd., C.D.,
6.125%, 07/12/95.............................. 2,000,000 2,000,000
Sanwa Bank, Ltd., C.D.,
5.950%, 07/06/95.............................. 4,000,000 3,999,983
6.020%, 07/03/95.............................. 2,000,000 2,000,000
Sumitomo Bank, Ltd., C.D.,
6.000%, 07/10/95.............................. 2,000,000 2,000,000
Sumitomo Bank, Ltd., T.D.,
6.060%, 07/14/95.............................. 4,000,000 4,000,012
--------------
31,500,150
--------------
COMMERCIAL PAPER -- 1.6%
Abbey National North America Corp.,
5.820%, 09/15/95.............................. 1,000,000 988,037
American Express Credit Corp.,
5.850%, 09/19/95.............................. 3,000,000 2,961,975
American Home Food Products,
5.980%, 07/27/95.............................. 2,178,000 2,169,317
American Home Products Corp.,
5.950%, 07/27/95.............................. 1,357,000 1,351,617
5.970%, 08/10/95.............................. 3,000,000 2,981,095
American Honda Finance Corp.,
6.050%, 07/31/95.............................. 1,000,000 995,294
Aristar, Inc.,
6.020%, 07/05/95.............................. 130,000 129,957
Associates Corp. of North America,
6.000%, 07/05/95.............................. 3,000,000 2,999,000
AT&T Corp.,
5.830%, 09/12/95.............................. 1,000,000 988,502
Bradford & Bingley Building Society,
5.900%, 09/13/95.............................. 1,000,000 988,200
CIT Group Holdings, Inc.,
5.850%, 09/18/95.............................. 1,000,000 987,488
5.900%, 09/11/95.............................. 2,000,000 1,977,056
Commerzbank U.S. Finance, Inc.,
5.850%, 09/21/95.............................. 1,000,000 987,000
Countrywide Funding Corp.,
5.960%, 07/20/95.............................. 1,000,000 997,186
5.980%, 07/19/95.............................. 1,000,000 997,342
6.020%, 07/28/95.............................. 1,000,000 995,819
Dean Witter, Discover & Company,
5.970%, 07/05/95.............................. 1,000,000 999,668
Finova Capital Corp.,
5.980%, 07/31/95.............................. 650,000 646,977
6.020%, 08/11/95.............................. 1,000,000 993,478
6.030%, 08/01/95.............................. 1,000,000 995,143
6.120%, 07/11/95.............................. 700,000 699,048
Ford Motor Credit Co.,
5.950%, 07/14/95.............................. 2,400,000 2,395,637
General Motors Acceptance Corp.,
6.150%, 07/12/95-07/13/95..................... 8,963,000 8,948,824
Hanson Finance, PLC,
5.830%, 09/22/95.............................. 1,000,000 986,883
5.900%, 09/21/95.............................. 1,000,000 986,889
Household Finance Corp.,
5.820%, 09/26/95.............................. 1,000,000 986,258
ITT Hartford Group, Inc.,
5.960%, 07/14/95.............................. 2,000,000 1,996,358
6.000%, 07/27/95.............................. 2,000,000 1,992,000
</TABLE>
B20
<PAGE>
AGGRESSIVELY MANAGED FLEXIBLE PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
McKenna Triangle National Corp.,
5.970%, 08/01/95.............................. $ 1,500,000 $ 1,492,786
5.980%, 07/27/95.............................. 1,000,000 996,013
Merrill Lynch & Co., Inc.,
5.970%, 08/03/95.............................. 4,000,000 3,979,437
National Australia Fund,
6.350%, 08/04/95.............................. 1,000,000 994,356
Norwest Financial, Inc.,
6.000%, 07/05/95.............................. 1,000,000 999,667
Orix America, Inc.,
6.000%, 07/17/95.............................. 2,000,000 1,995,333
Philip Morris Capital Corp.,
5.950%, 08/11/95.............................. 1,200,000 1,192,265
PNC Funding Corp.,
5.960%, 08/18/95.............................. 1,000,000 992,384
Sears Roebuck Acceptance Corp.,
5.980%, 07/11/95.............................. 1,000,000 998,671
Sumitomo Corp. of America,
6.020%, 07/31/95.............................. 1,045,000 1,040,107
U.S. West Communications, Inc.,
5.850%, 08/30/95.............................. 1,000,000 990,575
Xerox Credit Corp.,
5.820%, 09/14/95.............................. 1,000,000 988,197
--------------
62,781,839
--------------
TERM NOTES -- 1.7%
Abbey National Treasury Services, PLC,
6.400%, 05/17/96.............................. 2,000,000 2,000,000
Associates Corp. of North America,
%4.500%, 02/15/96............................. 3,200,000 3,156,137
8.800%, 03/01/96.............................. 2,000,000 2,029,359
Bank One Indianapolis N.A.,
7.180%, 02/05/96, Tranche #TR00002............ 1,000,000 1,002,327
Bank One Milwaukee N.A.,
5.980%, 07/31/95, Tranche #TR00010............ 3,000,000 2,999,993
Ford Motor Credit Co.,
%5.150%, 03/15/96, Tranche #TR00690........... 2,000,000 1,981,916
8.250%, 05/15/96.............................. 2,300,000 2,347,561
%General Electric Capital Corp.,
6.000%, 09/28/95.............................. 3,000,000 3,000,130
Huntington National Bank,
6.200%, 11/03/95.............................. 1,000,000 1,000,278
NationsBank of Texas N.A.,
6.820%, 10/31/95.............................. 9,000,000 9,002,438
Northern Trust Company,
6.600%, 11/17/95, Tranche #TR00023............ 2,000,000 2,002,331
%Salomon, Inc.,
Zero Coupon, 02/14/96......................... 25,000,000 25,000,000
USX Corp.,
7.063%, 02/15/96.............................. 7,500,000 7,513,511
--------------
63,035,981
--------------
PROMISSORY NOTES -- 0.3%
%General Electric Capital Corp.,
5.969%, 10/23/95.............................. 5,000,000 5,000,000
%Lehman Brothers Holdings, Inc.,
6.263%, 11/20/95.............................. 4,000,000 4,000,000
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS (CONTINUED) AMOUNT VALUE
------------- --------------
<S> <C> <C>
Paribas Finance, Inc.,
5.840%, 09/28/95.............................. $ 1,000,000 $ 985,887
5.940%, 07/26/95.............................. 1,000,000 996,205
--------------
10,982,092
--------------
REPURCHASE AGREEMENTS -- 1.7%
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 64,167,000 64,167,000
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 232,467,062
--------------
LIABILITIES -- (0.3%)
(net of other assets).......................................... (10,395,100)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $3,827,884,562
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
C.D. Certificates of Deposit
L.P. Limited Partnership
M.T.N. Medium Term Note
PLC Public Limited Company (British Corporation)
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
T.D. Time Deposit
**Indicates a restricted security; the aggregate cost of the restricted
securities is $87,297,121. The aggregate value, $85,367,856 is
approximately 2.2% of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
%Indicates a variable rate security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B21
<PAGE>
HIGH YIELD BOND PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 0.4% SHARES VALUE
------------- --------------
<S> <C> <C>
BEVERAGES -- 0.0%
**+Dr. Pepper Bottling Holdings, Inc. (Class 'B'
Stock)........................................ 5,807 $ 20,325
--------------
CHEMICALS - SPECIALTY -- 0.0%
**+Thermadyne Holdings Corp..................... 2,437 34,423
--------------
ELECTRONICS -- 0.2%
**+Berg Electronics Holding Corp................ 154,080 770,400
--------------
FINANCIAL SERVICES -- 0.0%
**+PM Holdings Corp............................. 1,103 0
--------------
RETAIL -- 0.0%
**+Loehmann's Holdings, Inc..................... 19,708 19,707
--------------
TOBACCO -- 0.2%
RJR Nabisco Holdings Corp....................... 24,800 691,300
--------------
TOTAL COMMON STOCKS
(Cost $1,487,465).............................................. 1,536,155
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 2.2% SHARES VALUE
------------- --------------
<S> <C> <C>
BANKS AND SAVINGS & LOANS -- 0.4%
**Riggs National Corp., Series B................ 47,500 1,211,250
--------------
ELECTRONICS -- 0.6%
[Berg Electronics Holding Corp., Series E....... 78,331 2,114,937
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 0.8%
[Harvard Industries, Inc. (Ex.)................. 41,752 1,158,618
[Supermarkets General Holdings Corp. (Ex.)...... 56,670 1,586,760
--------------
2,745,378
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 0.0%
[+Pay 'n Pak Stores (Cum. Ex.).................. 82,384 0
--------------
RETAIL -- 0.4%
Color Tile, Inc................................. 10,000 1,080,000
**Color Tile, Inc., Series A (Cum.)............. 40,000 120,000
[Grand Union Holdings Corp., Series C (Cum.).... 9,000 0
--------------
1,200,000
--------------
TOTAL PREFERRED STOCKS
(Cost $11,008,797)............................................. 7,271,565
--------------
<CAPTION>
MARKET
RIGHTS AND WARRANTS -- 0.1% SHARES VALUE
------------- --------------
<S> <C> <C>
COMMUNICATIONS -- 0.0%
**++Dial Page, Inc. (Warrants).................. 1,543 2,006
++Dial Page, Inc. (Warrants).................... 2,250 2,250
--------------
4,256
--------------
HOUSING RELATED -- 0.0%
**++J.M. Peters Co., Inc. (Warrants)............ 9,875 4,938
++Miles Homes, Inc. (Warrants).................. 15,000 7,500
--------------
12,438
--------------
LEISURE -- 0.0%
++Casino America, Inc. (Warrants)............... 6,526 1,000
++Casino Magic Finance Corp. (Warrants)......... 10,500 525
**++Louisiana Casino Cruise, Inc. (Warrants).... 4,200 0
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
RIGHTS AND WARRANTS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
**++President Riverboat Casinos, Inc.
(Warrants).................................... 15,000 $ 7,500
++President Riverboat Casinos, Inc.
(Warrants).................................... 22,075 11,037
--------------
20,062
--------------
MACHINERY -- 0.0%
**++Terex Corp. (Warrants)...................... 8,000 0
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 0.1%
++CellNet Data System, Inc. (Warrants).......... 14,000 0
++Foamex - JPS Automotive, L.P. (Warrants)...... 2,000 0
++Gaylord Container (Warrants).................. 21,259 220,562
++Health O Meter, Inc. (Warrants)............... 2,000 0
**++Pagemart Nationwide (Warrants).............. 13,125 0
**++Purity Supreme (Warrants)................... 5,198 104
**++Sam Houston Race Park (Warrants)............ 4,000 400
--------------
221,066
--------------
TELECOMMUNICATIONS -- 0.0%
**++Pagemart, Inc. (Warrants)................... 9,200 36,800
++People's Choice TV Corp. (Warrants)........... 2,500 0
--------------
36,800
--------------
UTILITY - COMMUNICAITONS -- 0.0%
**++Intermedia Communications of Florida, Inc.
(Warrants).................................... 3,000 0
--------------
TOTAL RIGHTS AND WARRANTS
(Cost $78,830)................................................. 294,622
--------------
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 95.3% VALUE VALUE
------------- --------------
<S> <C> <C>
FINANCIAL -- 3.7%
Empress River Casino,
10.750%, 04/01/02............................. $ 4,500,000 $ 4,500,000
Indah Kiat International Finance Co.,
12.500%, 06/15/06............................. 4,000,000 4,000,000
*Mesa Capital Corp.,
Zero Coupon, 06/30/96......................... 17,000 15,300
*PM Holdings Corp.,
Zero Coupon, 09/01/05, Series B............... 2,981,000 1,520,310
PSF Finance, L.P.,
12.250%, 06/15/04............................. 1,000,000 980,000
Reliance Group Holdings, Inc.,
9.750%, 11/15/03.............................. 1,500,000 1,455,000
--------------
12,470,610
--------------
FOREIGN -- 0.3%
**Tubos De Acero De Mexico, SA, M.T.N.,
13.750%, 12/08/99, Tranche #TR00001........... 1,000,000 882,500
--------------
INDUSTRIAL -- 91.3%
ACME Holdings, Inc.,
11.750%, 06/01/00............................. 2,500,000 1,250,000
+X+Adelphia Communications Corp.,
9.500%, 02/15/04, Series B.................... 1,691,600 1,391,341
Anacomp, Inc.,
15.000%, 11/01/00............................. 3,118,000 2,400,860
Anchor Glass Container,
9.875%, 12/15/08.............................. 3,250,000 2,973,750
*Apparel Retailers, Inc.,
Zero Coupon, 08/15/05, Series B............... 4,000,000 2,440,000
</TABLE>
B22
<PAGE>
HIGH YIELD BOND PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Applied Extrusion Technologies, Inc.,
11.500%, 04/01/02, Series B................... $ 1,700,000 $ 1,785,000
Baldwin Co.,
10.375%, 08/01/03, Series B................... 750,000 457,500
Bally's Park Place Funding, Inc.,
9.250%, 03/15/04.............................. 4,500,000 4,230,000
**Benedek Broadcasting Corp.,
11.875%, 03/01/05............................. 2,800,000 2,877,000
Big Flower Press, Inc.,
10.750%, 08/01/03............................. 2,000,000 1,970,000
Boyd Gaming Corp.,
10.750%, 09/01/03............................. 3,500,000 3,605,000
*Building Materials Corp. of America,
Zero Coupon, 07/01/04, Series B............... 5,000,000 2,975,000
Cablevision Systems Corp.,
9.875%, 02/15/13.............................. 1,000,000 1,055,000
Casino America, Inc.,
11.500%, 11/15/01............................. 4,225,000 4,225,000
**CellNet Data System, Inc.,
Zero Coupon, 06/15/05......................... 3,500,000 1,890,000
*Cencall Communications Corp.,
Zero Coupon, 01/15/04......................... 1,500,000 750,000
Centennial Cellular,
10.125%, 05/15/05............................. 4,500,000 4,443,750
Chancellor Broadcasting Co.,
12.500%, 10/01/04............................. 1,600,000 1,656,000
Clark R & M Holdings, Inc.,
Zero Coupon, 02/15/00......................... 1,500,000 922,500
Clean Harbors, Inc.,
12.500%, 05/15/01............................. 1,000,000 890,000
CMI Industries, Inc.,
9.500%, 10/01/03.............................. 2,070,000 1,894,050
Cole National Group, Inc.,
11.250%, 10/01/01............................. 2,775,000 2,594,625
Comcast Corp.,
9.375%, 05/15/05.............................. 3,000,000 2,992,500
Continental Cablevision, Inc.,
9.500%, 08/01/13.............................. 6,000,000 6,180,000
**+X+Del Monte Corp.,
12.250%, 09/01/02............................. 2,534,000 2,027,200
Di Giorgio Corp.,
12.000%, 02/15/03............................. 1,500,000 1,095,000
*Dial Call Communications, Inc.,
Zero Coupon, 04/15/04-12/15/05................ 3,250,000 1,530,000
Doehler-Jarvis, Inc.,
11.875%, 06/01/02............................. 3,750,000 4,012,500
**Dominick's Finer Foods, Inc.,
10.875%, 05/01/05............................. 3,250,000 3,274,375
Domtar, Inc.,
11.750%, 03/15/99............................. 1,000,000 1,095,000
12.000%, 04/15/01............................. 1,000,000 1,150,000
Exide Corp.,
*Zero Coupon, 12/15/04........................ 2,000,000 1,590,000
**10.000%, 04/15/05........................... 2,000,000 2,060,000
Fairchild Corp.,
13.125%, 03/15/06............................. 655,000 520,725
Fairchild Industries, Inc.,
12.250%, 02/01/99............................. 2,340,000 2,375,100
Falcon Drilling, Inc.,
12.500%, 03/15/05, Series B................... 2,500,000 2,600,000
+X+Falcon Holdings Group, L.P.,
11.000%, 09/15/03............................. 3,138,444 2,824,600
Family Restaurants, Inc.,
9.750%, 02/01/02.............................. 2,250,000 1,462,500
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Farm Fresh, Inc.,
12.250%, 10/01/00............................. $ 2,250,000 $ 2,115,000
12.250%, 10/01/00, Series A................... 500,000 483,750
Flagstar Corp.,
10.750%, 09/15/01............................. 3,775,000 3,548,500
10.875%, 12/01/02............................. 1,000,000 930,000
Foamex, L.P.,
11.250%, 10/01/02............................. 1,500,000 1,477,500
11.875%, 10/01/04............................. 500,000 475,000
*Foamex - JPS Automotive, L.P.,
Zero Coupon, 07/01/04, Series B............... 2,000,000 1,080,000
Forstmann & Co., Inc.,
14.750%, 04/15/99............................. 830,000 863,200
%14.750%, 04/15/99............................ 500,000 520,000
**14.750%, 04/15/99........................... 500,000 495,000
Fresh Del Monte Produce,
10.000%, 05/01/03, Series B................... 3,000,000 2,700,000
G-I Holdings, Inc.,
Zero Coupon, 10/01/98, Series B............... 3,500,000 2,345,000
Garden State Newspapers, Inc.,
12.000%, 07/01/04............................. 2,250,000 2,250,000
Gaylord Container Corp.,
*Zero Coupon, 05/15/05........................ 5,000,000 4,875,000
11.500%, 05/15/01............................. 500,000 530,000
Geneva Steel, Inc.,
11.125%, 03/15/01............................. 3,000,000 2,370,000
Grand Casinos Resorts, Inc.,
12.500%, 02/01/00, Series B................... 2,000,000 2,160,000
Grand Union Co.,
12.000%, 09/01/04............................. 5,274,000 5,096,002
**Granite Broadcasting,
10.375%, 05/15/05, Series A................... 1,200,000 1,204,500
Great Dane Holdings, Inc.,
12.750%, 08/01/01............................. 2,925,000 2,881,125
Gulf Canada Resources, Ltd.,
9.625%, 07/01/05.............................. 4,000,000 3,980,000
Harvard Industries, Inc.,
12.000%, 07/15/04............................. 1,125,000 1,136,250
Health O Meter, Inc.,
13.000%, 08/15/02............................. 2,000,000 1,820,000
Hills Stores Co.,
10.250%, 09/30/03............................. 2,680,000 2,653,200
**HMH Properties, Inc.,
9.500%, 05/15/05.............................. 4,000,000 3,880,000
Horsehead Industries, Inc.,
14.000%, 06/01/99............................. 2,000,000 2,045,000
**Host Marriott Travel Plaza,
9.500%, 05/15/05.............................. 3,850,000 3,705,625
HWCC-Tunica, Inc.,
13.500%, 09/30/98............................. 850,000 960,500
Imo Industries, Inc.,
12.000%, 11/01/01............................. 1,500,000 1,552,500
12.250%, 08/15/97............................. 51,000 51,127
*Indspec Chemical Corp.,
Zero Coupon, 12/01/03, Class B................ 2,500,000 1,575,000
Interlake Corp.,
12.000%, 11/15/01............................. 2,000,000 2,030,000
12.125%, 03/01/02............................. 2,950,000 2,913,125
**Intermedia Communications of Florida, Inc.,
13.500%, 06/01/05............................. 3,000,000 3,015,000
International Cabletel, Inc.,
**Zero Coupon, 04/15/05....................... 4,350,000 2,577,375
*
*0.100%, 10/15/03............................. 1,500,000 982,500
</TABLE>
B23
<PAGE>
HIGH YIELD BOND PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
J.B. Poindexter & Co.,
12.500%, 05/15/04............................. $ 3,250,000 $ 3,120,000
J.M. Peters Co.,
12.750%, 05/01/02............................. 1,250,000 1,025,000
Jones Intercable, Inc.,
10.500%, 03/01/08............................. 1,250,000 1,325,000
JPS Automotive Products Corp.,
11.125%, 06/15/01............................. 2,250,000 2,216,250
K & F Industries, Inc.,
11.875%, 12/01/03............................. 1,500,000 1,530,000
13.750%, 08/01/01............................. 925,000 955,063
Kaiser Aluminum & Chemical Corp.,
9.875%, 02/15/02.............................. 2,000,000 1,945,000
12.750%, 02/01/03............................. 2,375,000 2,553,125
Kloster Cruise Ltd.,
13.000%, 05/01/03............................. 1,500,000 1,155,000
Louisiana Casino Cruises, Inc.,
11.500%, 12/01/98............................. 1,400,000 1,302,000
Mail-Well Corp.,
10.500%, 02/15/04............................. 2,500,000 2,225,000
Malette, Inc.,
12.250%, 07/15/04............................. 3,015,000 3,346,650
*Marcus Cable Operating Co., L.P.,
Zero Coupon, 08/01/04......................... 5,500,000 3,478,750
*Maxxam Group, Inc.,
Zero Coupon, 08/01/03......................... 2,500,000 1,550,000
Miles Homes, Inc.,
12.000%, 04/01/01............................. 1,250,000 1,000,000
Motor Wheel Corp.,
11.500%, 03/01/00, Series B................... 2,500,000 2,175,000
National Medical Enterprises, Inc.,
10.125%, 03/01/05............................. 3,500,000 3,696,875
*Neodata Services, Inc.,
Zero Coupon, 05/01/03, Series B............... 2,000,000 1,665,000
NewCity Communications, Inc.,
11.375%, 11/01/03............................. 1,500,000 1,455,000
Newflo Corp.,
13.250%, 11/15/02............................. 1,500,000 1,492,500
*Nextel Communications, Inc.,
Zero Coupon, 09/01/03-08/15/04................ 3,500,000 1,800,000
Northwest Airlines, Inc.,
12.092%, 12/31/00............................. 1,152,819 1,187,403
Orchard Supply Hardware,
9.375%, 02/15/02.............................. 365,000 321,200
Overhead Door Co.,
12.250%, 02/01/00............................. 1,500,000 1,511,250
**Pagemart Nationwide,
*
Zero Coupon, 02/01/05......................... 3,750,000 2,287,500
*Pagemart, Inc.,
Zero Coupon, 11/01/03......................... 2,000,000 1,270,000
Pathmark Stores, Inc.,
*Zero Coupon, 11/01/03........................ 4,500,000 2,700,000
9.625%, 05/01/03.............................. 1,250,000 1,218,750
11.625%, 06/15/02............................. 2,000,000 2,115,000
Penn Traffic Co.,
9.625%, 04/15/05.............................. 6,750,000 6,361,875
*People's Choice TV Corp.,
Zero Coupon, 06/01/04......................... 2,500,000 1,187,500
Petroleum Heat & Power Company, Inc.,
9.375%, 02/01/06.............................. 2,000,000 1,790,000
12.250%, 02/01/05............................. 1,250,000 1,325,000
Pier 1 Imports, Inc.,
11.500%, 07/15/03............................. 324,000 338,175
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Pilgrim's Pride Corp.,
10.875%, 08/01/03............................. $ 3,250,000 $ 3,063,125
**Players International, Inc.,
10.875%, 04/15/05............................. 3,000,000 2,955,000
Pueblo Xtra International, Inc.,
9.500%, 08/01/03.............................. 3,750,000 3,431,250
Ralph's Grocery Co.,
10.450%, 06/15/04............................. 4,000,000 3,990,000
11.000%, 06/15/05............................. 500,000 488,750
13.750%, 06/15/05............................. 1,000,000 1,070,000
**Remington Arms Co.,
*
9.500%, 12/01/03.............................. 1,000,000 940,000
Repap New Brunswick,
10.625%, 04/15/05............................. 4,500,000 4,556,250
Revlon Consumer Products,
9.375%, 04/01/01, Series B.................... 3,000,000 2,895,000
Revlon Worldwide Corp.,
Zero Coupon, 03/15/98, Series B............... 2,500,000 1,731,250
Rogers Cablesystems Ltd.,
10.000%, 03/15/05, Series B................... 4,250,000 4,366,875
Rohr, Inc.,
11.625%, 05/15/03............................. 1,000,000 1,055,000
-C-Sam Houston Race Park, Ltd.,
11.750%, 07/15/99............................. 1,000,000 250,000
Seven-Up/RC Bottling Co.,
11.500%, 08/01/99............................. 1,375,000 1,210,000
Showboat, Inc.,
13.000%, 08/01/09............................. 1,500,000 1,545,000
Specialty Foods Acquisition Corp.,
11.250%, 08/15/03, Series B................... 625,000 615,625
Specialty Retailers, Inc.,
11.000%, 08/15/03............................. 1,500,000 1,380,000
SPX Corp.,
11.750%, 06/01/02............................. 2,500,000 2,606,250
Stone Consolidated Corp.,
10.250%, 12/15/00............................. 650,000 674,375
Stone Container Corp.,
10.750%, 10/01/02............................. 1,500,000 1,571,250
12.625%, 07/15/98............................. 1,500,000 1,627,500
**Terex Corp.,
13.750%, 05/15/02............................. 2,000,000 1,780,000
**Terra Industries, Inc.,
10.500%, 06/15/05............................. 2,500,000 2,550,000
TransTexas Gas Corp.,
11.500%, 06/15/02............................. 4,500,000 4,601,250
Trism, Inc.,
10.750%, 12/15/00............................. 2,150,000 2,117,750
*Triton Energy Corp.,
Zero Coupon, 12/15/00......................... 2,000,000 1,760,000
Trump Taj Mahal Funding, Inc.,
11.350%, 11/15/99, Series A................... 5,850,000 4,636,125
UCAR Global Enterprises,
12.000%, 01/15/05............................. 2,000,000 2,160,000
**United Stationer Supply,
12.750%, 05/01/05............................. 3,500,000 3,556,875
US Air, Inc.,
9.625%, 02/01/01.............................. 2,000,000 1,700,000
10.375%, 03/01/13, Series 93-A3............... 1,000,000 950,000
12.875%, 04/01/00............................. 950,000 953,563
Wainoco Oil Corp.,
12.000%, 08/01/02............................. 2,500,000 2,575,000
Waters Corp.,
12.750%, 09/30/04, Series B................... 1,715,000 1,796,463
</TABLE>
B24
<PAGE>
HIGH YIELD BOND PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
LONG-TERM BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
WCI Steel, Inc.,
10.500%, 03/01/02............................. $ 2,000,000 $ 1,960,000
**Weirton Steel Corp.,
10.750%, 06/01/05............................. 3,000,000 2,820,000
Westpoint Stevens, Inc.,
9.375%, 12/15/05.............................. 2,250,000 2,165,625
Wickes Lumber Co.,
11.625%, 12/15/03............................. 2,500,000 2,100,000
Williamhouse Regency, Inc.,
11.500%, 06/15/05............................. 2,000,000 2,000,000
--------------
307,572,672
--------------
TOTAL LONG-TERM BONDS
(Cost $322,316,098)............................................ 320,925,782
--------------
<CAPTION>
MARKET
OTHER LONG-TERM INVESTMENTS -- 0.1% SHARES VALUE
------------- --------------
<S> <C> <C>
**+PG Partners L.P.............................. 7,541 339,345
(Cost $115,290)
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 1.8% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 6,151,000 6,151,000
--------------
OTHER ASSETS -- 0.1%
(net of liabilities)........................................... 378,901
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 336,897,370
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
L.P. Limited Partnership
M.T.N. Medium Term Note
-C- Bond is currently in default.
*Denotes deferred interest security that accrues no interest until a
predetermined date at which time a specified coupon rate becomes effective.
**Indicates a restricted security; the aggregate cost of the restricted
securities is $48,213,943. The aggregate value, $47,345,148 is
approximately 14.1% of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
++Non-income producing.
%Indicates a variable rate security.
[Payment-in-kind preferred stock--dividend is paid in additional preferred
shares in lieu of cash.
+X+Payment-in-kind bonds--interest is paid in additional bonds in lieu of
cash.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B25
<PAGE>
STOCK INDEX PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 96.4% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 2.3%
AlliedSignal, Inc............................... 56,900 $ 2,532,050
Boeing Co....................................... 67,950 4,255,369
General Dynamics Corp........................... 12,100 536,937
Lockheed Martin Corp............................ 42,349 2,673,280
Loral Corp...................................... 17,000 879,750
McDonnell Douglas Corp.......................... 23,600 1,811,300
Northrop Grumman Corp........................... 10,000 521,250
Raytheon Co..................................... 24,800 1,925,100
Rockwell International Corp..................... 43,400 1,985,550
United Technologies Corp........................ 24,700 1,929,687
--------------
19,050,273
--------------
AIRLINES -- 0.3%
+AMR Corp....................................... 15,100 1,126,838
Delta Air Lines, Inc............................ 9,900 730,125
Southwest Airlines Co........................... 29,000 692,375
+USAir Group, Inc............................... 10,500 122,062
--------------
2,671,400
--------------
ALUMINUM -- 0.5%
Alcan Aluminum, Ltd............................. 45,050 1,362,762
Aluminum Co. of America......................... 35,400 1,774,425
Reynolds Metals Co.............................. 12,800 662,400
--------------
3,799,587
--------------
AUTOS - CARS & TRUCKS -- 2.4%
Chrysler Corp................................... 74,300 3,557,113
Cummins Engine Co., Inc......................... 8,300 362,088
Dana Corp....................................... 20,100 575,363
Echlin, Inc..................................... 11,800 410,050
Ford Motor Co................................... 205,800 6,122,550
General Motors Corp............................. 149,400 7,003,125
Genuine Parts Co................................ 24,550 929,831
Johnson Controls, Inc........................... 8,100 457,650
+Navistar International Corp.................... 14,500 219,313
Safety Kleen Corp............................... 11,050 178,180
--------------
19,815,263
--------------
BANKS AND SAVINGS & LOANS -- 5.6%
Banc One Corp................................... 80,022 2,580,710
Bank of Boston Corp............................. 22,300 836,250
Bank of New York Company, Inc................... 37,500 1,514,062
BankAmerica Corp................................ 74,348 3,912,564
Bankers Trust NY Corp........................... 15,300 948,600
Barnett Banks, Inc.............................. 19,400 994,250
Boatmen's Bancshares, Inc....................... 25,700 905,925
Chase Manhattan Corp............................ 36,886 1,733,641
Chemical Banking Corp........................... 48,382 2,286,050
Citicorp........................................ 79,100 4,577,913
CoreStates Financial Corp....................... 28,000 976,500
First Chicago Corp.............................. 18,400 1,101,700
First Fidelity Bancorp.......................... 16,300 961,700
First Interstate Bancorp........................ 15,500 1,243,875
First Union Corp................................ 35,100 1,588,275
Fleet Financial Group, Inc...................... 27,800 1,032,075
Golden West Financial Corp...................... 12,200 574,925
Great Western Financial Corp.................... 26,000 536,250
H.F. Ahmanson & Co.............................. 23,900 525,800
J.P. Morgan & Co., Inc.......................... 37,150 2,605,144
KeyCorp......................................... 47,100 1,477,762
Mellon Bank Corp................................ 28,650 1,192,556
NationsBank Corp................................ 54,939 2,946,104
NBD Bancorp, Inc................................ 31,525 1,008,800
Norwest Corp.................................... 64,500 1,854,375
PNC Bank Corp................................... 47,000 1,239,625
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Shawmut National Corp........................... 25,600 $ 816,000
Suntrust Banks, Inc............................. 23,100 1,345,575
U.S. Bancorp.................................... 18,900 454,781
Wachovia Corp................................... 33,400 1,194,050
Wells Fargo & Co................................ 10,400 1,874,600
--------------
46,840,437
--------------
BEVERAGES -- 3.6%
Adolph Coors Co. (Class 'B' Stock).............. 7,100 116,262
Anheuser-Busch Companies, Inc................... 51,100 2,906,313
Brown-Forman Corp. (Class 'B' Stock)............ 15,300 510,638
Coca-Cola Co.................................... 254,700 16,237,125
PepsiCo, Inc.................................... 157,800 7,199,625
Seagram Co., Ltd................................ 74,200 2,569,175
--------------
29,539,138
--------------
CHEMICALS -- 2.6%
Air Products & Chemicals, Inc................... 22,400 1,248,800
Dow Chemical Co................................. 55,000 3,953,125
E.I. Du Pont de Nemours & Co.................... 110,700 7,610,625
Eastman Chemical Co............................. 16,500 981,750
Hercules, Inc................................... 23,400 1,140,750
Mallinckrodt Group, Inc......................... 14,800 525,400
Monsanto Co..................................... 22,900 2,063,863
Nalco Chemical Co............................... 13,900 505,612
Rohm & Haas Co.................................. 13,100 718,862
Sigma-Aldrich Corp.............................. 9,800 481,425
Union Carbide Corp.............................. 29,900 997,912
W.R. Grace & Co................................. 18,500 1,135,438
--------------
21,363,562
--------------
CHEMICALS - SPECIALTY -- 0.4%
Engelhard Corp.................................. 18,850 808,194
First Mississippi Corp.......................... 3,700 126,262
Great Lakes Chemical Corp....................... 13,700 825,425
Morton International, Inc....................... 29,300 857,025
Praxair, Inc.................................... 27,400 685,000
Raychem Corp.................................... 8,600 330,025
--------------
3,631,931
--------------
COMMERCIAL SERVICES -- 0.5%
+CUC International, Inc......................... 22,700 953,400
Deluxe Corp..................................... 16,500 546,562
Dun & Bradstreet Corp........................... 34,060 1,788,150
John H. Harland Co.............................. 5,900 134,963
Moore Corp., Ltd................................ 20,200 446,925
Ogden Corp...................................... 9,300 203,438
--------------
4,073,438
--------------
COMPUTER SERVICES -- 3.5%
Autodesk, Inc................................... 9,700 417,100
Automatic Data Processing, Inc.................. 28,800 1,810,800
+Cabletron Systems, Inc......................... 14,100 750,825
+Ceridian Corp.................................. 9,200 339,250
+Cisco Systems, Inc............................. 53,500 2,705,094
Computer Associates International, Inc.......... 32,350 2,191,713
+Computer Sciences Corp......................... 11,200 637,000
First Data Corp................................. 24,400 1,387,750
+Intergraph Corp................................ 7,600 84,550
+Lotus Development Corp......................... 9,600 612,000
+Microsoft Corp................................. 116,500 10,528,688
+Novell, Inc.................................... 73,500 1,465,405
+Oracle Corp.................................... 86,950 3,358,444
+Silicon Graphics, Inc.......................... 31,700 1,264,038
</TABLE>
B26
<PAGE>
STOCK INDEX PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Sun Microsystems, Inc.......................... 19,300 $ 936,050
+Tandem Computers, Inc.......................... 22,900 369,262
--------------
28,857,969
--------------
CONSTRUCTION -- 0.2%
Fluor Corp...................................... 16,300 847,600
Foster Wheeler Corp............................. 6,800 239,700
Kaufman & Broad Home Corp....................... 6,366 92,307
Pulte Corp...................................... 5,100 142,800
--------------
1,322,407
--------------
CONTAINERS -- 0.2%
Ball Corp....................................... 6,300 219,713
Bemis Co., Inc.................................. 10,000 260,000
+Crown Cork & Seal Co., Inc..................... 18,100 907,262
--------------
1,386,975
--------------
COSMETICS & SOAPS -- 2.3%
Alberto Culver Co. (Class 'B' Stock)............ 5,000 151,250
Avon Products, Inc.............................. 13,900 931,300
Clorox Co....................................... 10,400 678,600
Colgate Palmolive Co............................ 29,000 2,120,625
Gillette Co..................................... 88,800 3,962,700
International Flavors & Fragrances, Inc......... 22,300 1,109,425
Procter & Gamble Co............................. 137,752 9,900,925
--------------
18,854,825
--------------
DIVERSIFIED GAS -- 0.2%
Ashland, Inc.................................... 12,600 442,575
Coastal Corp.................................... 21,100 640,912
Eastern Enterprises............................. 4,100 122,488
ENSERCH Corp.................................... 14,400 246,600
NICOR, Inc...................................... 10,300 276,812
ONEOK, Inc...................................... 4,600 98,325
--------------
1,827,712
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 2.4%
Alco Standard Corp.............................. 10,888 869,678
Avery Dennison Corp............................. 10,500 420,000
+COMPAQ Computer Corp........................... 52,500 2,382,188
Honeywell, Inc.................................. 25,800 1,112,625
International Business Machines Corp............ 116,500 11,184,000
Pitney Bowes, Inc............................... 30,500 1,170,438
+Unisys Corp.................................... 33,100 359,962
Xerox Corp...................................... 21,382 2,507,040
--------------
20,005,931
--------------
DRUGS AND HOSPITAL SUPPLIES -- 8.0%
Abbott Laboratories............................. 159,900 6,475,950
Allergan, Inc................................... 12,100 328,212
+ALZA Corp...................................... 17,000 397,375
American Home Products Corp..................... 61,900 4,789,512
+Amgen, Inc..................................... 26,600 2,139,638
Bausch & Lomb, Inc.............................. 11,300 468,950
Baxter International, Inc....................... 55,800 2,029,725
Becton, Dickinson & Co.......................... 14,000 815,500
+Biomet, Inc.................................... 23,500 364,250
+Boston Scientific Corp......................... 30,500 972,188
Bristol-Myers Squibb Co......................... 101,640 6,924,225
C.R. Bard, Inc.................................. 9,900 297,000
Eli Lilly & Co.................................. 58,500 4,592,250
Johnson & Johnson............................... 129,300 8,743,912
Medtronic, Inc.................................. 22,900 1,766,162
Merck & Co., Inc................................ 249,550 12,227,950
Pfizer, Inc..................................... 63,300 5,847,338
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Schering-Plough Corp............................ 74,300 $ 3,278,488
St. Jude Medical, Inc........................... 9,300 466,162
United States Surgical Corp..................... 10,500 219,188
Upjohn Co....................................... 34,700 1,314,263
Warner-Lambert Co............................... 27,100 2,340,762
--------------
66,799,000
--------------
ELECTRICAL EQUIPMENT -- 0.4%
+Applied Materials, Inc......................... 16,700 1,446,638
W.W. Grainger, Inc.............................. 9,900 581,625
Westinghouse Electric Corp...................... 72,000 1,053,000
--------------
3,081,263
--------------
ELECTRONICS -- 5.1%
+Advanced Micro Devices, Inc.................... 21,800 792,975
+Amdahl Corp.................................... 23,300 259,213
AMP, Inc........................................ 42,200 1,782,950
Apple Computer, Inc............................. 24,000 1,114,500
+Cray Research, Inc............................. 4,700 114,563
+Data General Corp.............................. 5,400 51,975
+Digital Equipment Corp......................... 29,200 1,189,900
EG&G, Inc....................................... 11,800 197,650
Emerson Electric Co............................. 46,500 3,324,750
Harris Corp..................................... 8,100 418,162
Hewlett-Packard Co.............................. 102,200 7,613,900
Intel Corp...................................... 166,000 10,509,875
Micron Technology, Inc.......................... 41,200 2,260,850
Motorola, Inc................................... 117,900 7,914,037
+National Semiconductor Corp.................... 25,300 702,075
Perkin-Elmer Corp............................... 8,100 287,550
Tandy Corp...................................... 14,965 776,309
Tektronix, Inc.................................. 6,400 315,200
Texas Instruments, Inc.......................... 18,800 2,516,850
Thomas & Betts Corp............................. 4,000 273,500
+Zenith Electronics Corp........................ 8,300 61,213
--------------
42,477,997
--------------
ENVIRONMENTAL SERVICES -- 0.1%
Laidlaw, Inc. (Class 'B' Stock)................. 53,800 517,825
--------------
FINANCIAL SERVICES -- 2.8%
American Express Co............................. 98,900 3,473,863
Beneficial Corp................................. 10,500 462,000
Dean Witter, Discover & Co...................... 33,845 1,590,715
Federal Home Loan Mortgage Corp................. 36,250 2,492,187
Federal National Mortgage Association........... 54,500 5,143,437
H & R Block, Inc................................ 20,600 847,175
Household International , Inc................... 19,100 945,450
MBNA Corp....................................... 28,900 975,375
Merrill Lynch & Co., Inc........................ 37,200 1,953,000
National City Corp.............................. 29,500 866,563
Salomon, Inc.................................... 20,600 826,575
Transamerica Corp............................... 14,200 827,150
Travelers, Inc.................................. 63,831 2,792,605
--------------
23,196,095
--------------
FOODS -- 2.9%
Archer-Daniels-Midland Co....................... 102,664 1,912,117
Campbell Soup Co................................ 50,100 2,454,900
ConAgra, Inc.................................... 49,700 1,733,288
CPC International, Inc.......................... 29,400 1,815,450
Fleming Companies, Inc.......................... 7,400 196,100
General Mills, Inc.............................. 31,700 1,628,588
Giant Food, Inc. (Class 'A' Stock).............. 12,200 346,175
H.J. Heinz & Co................................. 48,800 2,165,500
Hershey Foods Corp.............................. 16,900 933,725
</TABLE>
B27
<PAGE>
STOCK INDEX PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Kellogg Co...................................... 44,200 $ 3,154,775
Pioneer Hi-Bred International, Inc.............. 16,600 697,200
Quaker Oats Co.................................. 27,100 890,912
Ralston-Ralston Purina Group.................... 19,940 1,016,940
Sara Lee Corp................................... 96,100 2,738,850
Sysco Corp...................................... 36,100 1,064,950
W. M. Wrigley, Jr. Co........................... 23,100 1,071,262
--------------
23,820,732
--------------
FOREST PRODUCTS -- 1.8%
Boise Cascade Corp.............................. 9,886 400,383
Champion International Corp..................... 18,700 974,738
Federal Paper Board Co., Inc.................... 8,500 300,688
Georgia-Pacific Corp............................ 18,000 1,561,500
International Paper Co.......................... 25,200 2,160,900
James River Corp. of Virginia................... 15,900 439,238
Kimberly-Clark Corp............................. 32,000 1,916,000
Louisiana Pacific Corp.......................... 22,300 585,375
Mead Corp....................................... 11,700 694,687
Potlatch Corp................................... 5,800 242,150
Scott Paper Co.................................. 30,600 1,514,700
+Stone Container Corp........................... 18,866 400,902
Temple Inland, Inc.............................. 11,300 538,162
Union Camp Corp................................. 14,400 833,400
Westvaco Corp................................... 13,300 588,525
Weyerhaeuser Co................................. 40,900 1,927,412
--------------
15,078,760
--------------
GAS PIPELINES -- 0.5%
+Columbia Gas System, Inc....................... 9,500 301,625
Consolidated Natural Gas Co..................... 18,800 709,700
Enron Corp...................................... 50,400 1,770,300
NorAm Energy Corp............................... 21,100 137,150
Panhandle Eastern Corp.......................... 29,890 728,569
Peoples Energy Corp............................. 6,400 165,600
Williams Companies, Inc......................... 19,900 694,012
--------------
4,506,956
--------------
HOSPITAL MANAGEMENT -- 0.7%
+Beverly Enterprises, Inc....................... 17,000 210,375
Columbia/HCA Healthcare Corp.................... 88,532 3,829,009
Community Psychiatric Centers................... 7,900 88,875
Manor Care, Inc................................. 11,850 345,130
Service Corp. International..................... 19,100 604,038
Shared Medical Systems Corp..................... 4,700 188,588
+Tenet Healthcare Corp.......................... 39,000 560,625
--------------
5,826,640
--------------
HOUSING RELATED -- 0.5%
Armstrong World Industries, Inc................. 7,800 390,975
Centex Corp..................................... 6,000 169,500
Fleetwood Enterprises, Inc...................... 8,700 171,825
Lowe's Companies, Inc........................... 32,200 961,975
Masco Corp...................................... 31,300 845,100
Maytag Corp..................................... 20,500 328,000
+Owens-Corning Fiberglas Corp................... 9,700 357,688
Skyline Corp.................................... 1,000 18,125
Stanley Works................................... 9,000 340,875
Whirlpool Corp.................................. 14,800 814,000
--------------
4,398,063
--------------
INSURANCE -- 2.9%
Aetna Life & Casualty Co........................ 22,700 1,427,263
Alexander & Alexander Services, Inc............. 8,500 202,938
American General Corp........................... 41,500 1,400,625
American International Group, Inc............... 63,325 7,219,050
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Chubb Corp...................................... 17,200 $ 1,378,150
CIGNA Corp...................................... 14,600 1,133,325
General Re Corp................................. 16,350 2,188,855
Jefferson-Pilot Corp............................ 9,650 528,338
Lincoln National Corp........................... 19,000 831,250
Marsh & McLennan Companies, Inc................. 14,600 1,184,425
Providian Corp.................................. 19,500 706,875
SAFECO Corp..................................... 12,800 735,200
St. Paul Companies, Inc......................... 16,700 822,475
Torchmark Corp.................................. 13,900 524,725
U.S. Healthcare, Inc............................ 32,600 998,375
United Healthcare Corp.......................... 34,400 1,423,300
UNUM Corp....................................... 14,500 679,687
USF&G Corp...................................... 19,600 318,500
USLIFE Corp..................................... 4,600 185,150
--------------
23,888,506
--------------
LEISURE -- 1.0%
+Bally Entertainment Corp....................... 7,200 88,200
Brunswick Corp.................................. 18,300 311,100
Handleman Co.................................... 5,850 56,306
Hasbro, Inc..................................... 17,500 555,625
+King World Productions, Inc.................... 7,550 305,775
Mattel, Inc..................................... 44,445 1,155,570
Outboard Marine Corp............................ 3,900 76,538
Walt Disney Co.................................. 104,400 5,807,250
--------------
8,356,364
--------------
LODGING -- 0.5%
Hilton Hotels Corp.............................. 9,400 660,350
Loews Corp...................................... 11,600 1,403,600
Marriott International, Inc..................... 24,700 886,113
+Promus Companies, Inc.......................... 20,850 813,150
--------------
3,763,213
--------------
MACHINERY -- 1.2%
Briggs & Stratton Corp.......................... 5,200 179,400
Caterpillar, Inc................................ 40,200 2,582,850
Cincinnati Milacron, Inc........................ 6,900 186,300
Cooper Industries, Inc.......................... 23,000 908,500
Deere & Co...................................... 17,300 1,481,313
Dover Corp...................................... 11,200 814,800
Eaton Corp...................................... 15,500 900,938
Giddings & Lewis, Inc........................... 6,900 123,337
Harnischfeger Industries, Inc................... 9,500 328,938
Ingersoll-Rand Co............................... 20,700 791,775
PACCAR, Inc..................................... 7,730 361,377
Parker-Hannifin Corp............................ 14,850 538,313
Snap-On, Inc.................................... 8,000 310,000
SPX Corp........................................ 1,500 17,062
Timken Co....................................... 6,400 295,200
+Varity Corp.................................... 8,810 387,640
--------------
10,207,743
--------------
MEDIA -- 2.6%
Capital Cities/ABC, Inc......................... 30,600 3,304,800
CBS, Inc........................................ 12,150 814,050
Comcast Corp. (Special Class 'A' Stock)......... 46,500 863,156
Dow Jones & Co., Inc............................ 19,200 708,000
Gannett Co., Inc................................ 27,800 1,508,150
Interpublic Group of Companies, Inc............. 15,300 573,750
Knight-Ridder, Inc.............................. 10,500 597,188
McGraw-Hill, Inc................................ 9,900 751,162
Meredith Corp................................... 5,800 147,175
</TABLE>
B28
<PAGE>
STOCK INDEX PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
New York Times Co. (Class 'A' Stock)............ 19,800 $ 465,300
R. R. Donnelley & Sons Co....................... 30,600 1,101,600
+Tele-Communications, Inc. (Class 'A' Stock).... 130,800 3,065,625
Time Warner, Inc................................ 76,140 3,131,258
Times Mirror Co. (Class 'A' Stock).............. 24,000 573,000
Tribune Co...................................... 13,100 804,012
+Viacom, Inc. (Class 'B' Stock)................. 71,667 3,323,557
--------------
21,731,783
--------------
MINERAL RESOURCES -- 1.0%
ASARCO, Inc..................................... 8,700 265,350
Barrick Gold Corporation........................ 70,300 1,775,075
Burlington Resources, Inc....................... 25,500 940,313
Cyprus Amax Minerals Co......................... 19,000 541,500
Echo Bay Mines, Ltd............................. 21,800 196,200
Homestake Mining Co............................. 26,300 433,950
Inco, Ltd....................................... 23,500 663,875
Newmont Mining Corp............................. 17,000 711,875
Phelps Dodge Corp............................... 13,900 820,100
Pittston Services Group......................... 8,600 206,400
Placer Dome, Inc................................ 47,500 1,240,938
Sante Fe Pacific Gold Corp...................... 34,916 423,356
--------------
8,218,932
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 4.2%
Bassett Furniture Industries, Inc............... 2,612 73,136
Browning-Ferris Industries, Inc................. 42,400 1,531,700
Crane Co........................................ 5,500 199,375
Ecolab, Inc..................................... 13,400 328,300
+FMC Corp....................................... 7,400 497,650
General Electric Co............................. 339,700 19,150,588
General Signal Corp............................. 9,262 368,165
Illinois Tool Works, Inc........................ 22,800 1,254,000
ITT Corp........................................ 21,500 2,526,250
+JWP, Inc....................................... 4,200 0
Millipore Corp.................................. 5,500 371,250
Morrison Knudsen Corp........................... 5,800 39,150
NACCO Industries, Inc. (Class 'A' Stock)........ 1,600 95,800
Pall Corp....................................... 23,400 520,650
PPG Industries Inc.............................. 41,300 1,775,900
Teledyne, Inc................................... 11,800 289,100
Textron, Inc.................................... 17,400 1,011,375
Trinova Corp.................................... 5,600 196,000
TRW, Inc........................................ 12,700 1,014,412
Tyco International Ltd.......................... 15,200 820,800
WMX Technologies, Inc........................... 96,800 2,746,700
Zurn Industries, Inc............................ 2,000 40,000
--------------
34,850,301
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 2.2%
American Greetings Corp. (Class 'A' Stock)...... 14,900 437,688
Black & Decker Corp............................. 16,500 509,438
Corning, Inc.................................... 45,500 1,490,125
Dial Corp....................................... 19,100 472,725
Eastman Kodak Co................................ 68,500 4,152,813
Jostens, Inc.................................... 8,100 172,125
Minnesota Mining & Manufacturing Co............. 84,100 4,814,725
Polaroid Corp................................... 9,500 387,125
Premark International, Inc...................... 12,300 638,062
Rubbermaid, Inc................................. 31,900 885,225
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Unilever N.V., ADR.............................. 32,100 $ 4,177,012
Whitman Corp.................................... 21,700 420,437
--------------
18,557,500
--------------
PETROLEUM -- 8.2%
Amerada Hess Corp............................... 18,200 889,525
Amoco Corp...................................... 99,730 6,644,511
Atlantic Richfield Co........................... 32,285 3,543,279
Chevron Corp.................................... 130,600 6,089,225
Exxon Corp...................................... 249,000 17,585,625
Kerr-McGee Corp................................. 10,600 568,425
Louisiana Land & Exploration Co................. 6,500 259,188
Mobil Corp...................................... 79,300 7,612,800
Occidental Petroleum Corp....................... 63,200 1,445,700
Pennzoil Co..................................... 9,100 428,838
Phillips Petroleum Co........................... 52,800 1,762,200
Royal Dutch Petroleum Co., ADR.................. 107,400 13,089,375
+Santa Fe Energy Resources, Inc................. 17,970 170,715
Sun Co., Inc.................................... 21,000 574,875
Tenneco, Inc.................................... 37,100 1,706,600
Texaco, Inc..................................... 52,100 3,419,062
Unocal Corp..................................... 48,800 1,348,100
USX-Marathon Group.............................. 59,200 1,169,200
--------------
68,307,243
--------------
PETROLEUM SERVICES -- 0.8%
Baker Hughes, Inc............................... 28,400 582,200
Dresser Industries, Inc......................... 36,600 814,350
Halliburton Co.................................. 22,700 811,525
Helmerich & Payne, Inc.......................... 5,100 150,450
McDermott International, Inc.................... 10,900 262,963
+Oryx Energy Co................................. 18,600 255,750
+Rowan Companies, Inc........................... 15,200 123,500
Schlumberger, Ltd............................... 48,900 3,037,912
Sonat, Inc...................................... 17,100 521,550
+Western Atlas, Inc............................. 10,500 465,938
--------------
7,026,138
--------------
RAILROADS -- 1.0%
Burlington Northern, Inc........................ 17,800 1,128,075
Conrail Inc..................................... 15,700 873,313
CSX Corp........................................ 21,156 1,589,345
Norfolk Southern Corp........................... 26,800 1,805,650
Santa Fe Pacific Gold Corp...................... 29,286 746,792
Union Pacific Corp.............................. 41,200 2,281,450
--------------
8,424,625
--------------
RESTAURANTS -- 0.8%
+Darden Restaurants, Inc........................ 31,000 337,125
Luby's Cafeterias, Inc.......................... 4,550 91,569
McDonald's Corp................................. 138,700 5,426,638
+Ryan's Family Steak Houses, Inc................ 8,500 66,937
+Shoney's, Inc.................................. 7,900 92,825
Wendy's International, Inc...................... 19,700 352,137
--------------
6,367,231
--------------
RETAIL -- 5.6%
Albertson's, Inc................................ 50,600 1,505,350
American Stores Co.............................. 30,400 855,000
Brown Group, Inc................................ 3,000 68,250
Bruno's, Inc.................................... 13,700 159,263
Charming Shoppes, Inc........................... 18,300 96,075
Circuit City Stores, Inc........................ 19,900 629,338
Dayton-Hudson Corp.............................. 14,114 1,012,680
Dillard Department Stores, Inc. (Class 'A'
Stock)........................................ 23,250 682,969
</TABLE>
B29
<PAGE>
STOCK INDEX PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Great Atlantic & Pacific Tea Co., Inc........... 7,000 $ 184,625
Harcourt General, Inc........................... 15,406 654,755
Home Depot, Inc................................. 90,449 3,674,491
J.C. Penney Co., Inc............................ 46,300 2,222,400
K mart Corp..................................... 90,400 1,322,100
+Kroger Co...................................... 23,500 631,563
Liz Claiborne, Inc.............................. 15,600 331,500
Longs Drug Stores, Inc.......................... 3,600 135,000
May Department Stores Co........................ 50,100 2,085,412
Melville Corp................................... 21,200 726,100
Mercantile Stores Co., Inc...................... 7,100 330,150
Newell Co....................................... 31,500 771,750
Nike, Inc. (Class 'B' Stock).................... 14,500 1,218,000
Nordstrom, Inc.................................. 16,200 670,275
Pep Boys-Manny, Moe & Jack...................... 11,700 312,975
+Price/Costco, Inc.............................. 42,566 691,697
Reebok International, Ltd....................... 15,600 530,400
Rite Aid Corp................................... 17,100 438,187
Sears, Roebuck & Co............................. 77,600 4,646,300
Sherwin-Williams Co............................. 17,200 612,750
Stride Rite Corp................................ 9,400 97,525
Supervalu, Inc.................................. 13,700 399,012
The Gap, Inc.................................... 28,300 986,962
The Limited, Inc................................ 72,000 1,584,000
TJX Companies, Inc.............................. 14,300 189,475
+Toys 'R' Us, Inc............................... 56,150 1,642,387
Wal-Mart Stores, Inc............................ 460,600 12,321,050
Walgreen Co..................................... 24,400 1,223,050
Winn Dixie Stores, Inc.......................... 14,900 860,475
Woolworth Corp.................................. 26,400 399,300
--------------
46,902,591
--------------
RUBBER -- 0.2%
B.F. Goodrich Co................................ 5,400 289,575
Cooper Tire & Rubber Co......................... 17,400 424,125
Goodyear Tire & Rubber Co....................... 30,500 1,258,125
--------------
1,971,825
--------------
STEEL -- 0.3%
+Armco, Inc..................................... 19,500 131,625
+Bethlehem Steel Corp........................... 21,000 341,250
Inland Steel Industries, Inc.................... 8,900 271,450
Nucor Corp...................................... 17,100 914,850
USX-U.S. Steel Group............................ 15,040 517,000
Worthington Industries, Inc..................... 19,100 390,356
--------------
2,566,531
--------------
TELECOMMUNICATIONS -- 4.9%
+Airtouch Communications, Inc................... 98,100 2,795,850
Alltel Corp..................................... 38,500 976,938
Ameritech Corp.................................. 111,100 4,888,400
+Andrew Corp.................................... 7,350 425,381
AT&T Corp....................................... 317,173 16,849,815
+DSC Communications Corp........................ 23,100 1,074,150
+M/A-Com, Inc................................... 2,300 27,025
MCI Communications Corp......................... 136,600 3,005,200
Northern Telecom, Ltd........................... 50,700 1,850,550
SBC Communications, Inc......................... 121,800 5,800,725
Scientific-Atlanta, Inc......................... 14,500 319,000
Sprint Corp..................................... 70,000 2,353,750
--------------
40,366,784
--------------
TEXTILES -- 0.2%
+Fruit of the Loom, Inc. (Class 'A' Stock)...... 15,400 325,325
National Service Industries, Inc................ 9,500 274,313
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Russell Corp.................................... 8,400 $ 241,500
Springs Industries, Inc......................... 3,700 137,825
V.F. Corp....................................... 13,118 705,092
--------------
1,684,055
--------------
TOBACCO -- 1.8%
American Brands, Inc............................ 39,000 1,550,250
Philip Morris Companies, Inc.................... 169,400 12,599,125
UST, Inc........................................ 38,600 1,148,350
--------------
15,297,725
--------------
TRUCKING/SHIPPING -- 0.2%
Consolidated Freightways, Inc................... 8,300 183,638
+Federal Express Corp........................... 11,500 698,625
Roadway Services, Inc........................... 8,400 396,900
Ryder System, Inc............................... 16,000 382,000
Yellow Corp..................................... 6,000 108,750
--------------
1,769,913
--------------
UTILITY - COMMUNICATIONS -- 3.3%
Bell Atlantic Corp.............................. 87,400 4,894,400
BellSouth Corp.................................. 99,400 6,311,900
GTE Corp........................................ 194,420 6,634,583
NYNEX Corp...................................... 84,800 3,413,200
Pacific Telesis Group........................... 85,300 2,281,775
U S West, Inc................................... 93,700 3,900,262
--------------
27,436,120
--------------
UTILITY - ELECTRIC -- 3.7%
American Electric Power Co., Inc................ 37,400 1,313,675
Baltimore Gas & Electric Co..................... 29,050 726,250
Carolina Power & Light Co....................... 31,800 961,950
Central & South West Corp....................... 37,800 992,250
CINergy Corp.................................... 30,539 801,649
Consolidated Edison Co. of NY, Inc.............. 47,400 1,398,300
Detroit Edison Co............................... 29,600 873,200
Dominion Resources, Inc......................... 34,950 1,275,675
Duke Power Co................................... 41,000 1,701,500
Entergy Corp.................................... 45,300 1,092,863
FPL Group, Inc.................................. 36,800 1,421,400
General Public Utilities Corp................... 23,400 696,150
Houston Industries, Inc......................... 26,300 1,107,888
Niagara Mohawk Power Corp....................... 28,300 417,425
Northern States Power Co........................ 13,700 631,912
Ohio Edison Co.................................. 29,800 674,225
Pacific Enterprises............................. 15,700 384,650
Pacific Gas & Electric Co....................... 86,500 2,508,500
PacifiCorp...................................... 58,100 1,089,375
PECO Energy Co.................................. 43,900 1,212,738
Public Service Enterprise Group, Inc............ 48,400 1,343,100
SCEcorp......................................... 90,200 1,544,675
Southern Co..................................... 134,200 3,002,725
Texas Utilities Co.............................. 44,929 1,544,433
Unicom Corp..................................... 42,400 1,128,900
Union Electric Company.......................... 20,600 767,350
--------------
30,612,758
--------------
TOTAL COMMON STOCKS
(Cost $599,496,147)............................................ 801,052,061
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 0.0% SHARES VALUE
------------- --------------
<S> <C> <C>
MISCELLANEOUS - BASIC INDUSTRY
Teledyne, Inc. (Cum.), Series E................. 206 3,013
--------------
(Cost $0)
</TABLE>
B30
<PAGE>
STOCK INDEX PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 3.9% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 3.7%
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. $ 30,676,000 $ 30,676,000
--------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS -- 0.2%
++US Treasury Bills,
5.590%, 09/14/95.............................. 1,300,000 1,285,264
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 31,961,264
--------------
##
VARIATION MARGIN ON OPEN FUTURES CONTRACTS -- 0.0%...............
(64,350)
--------------
LIABILITIES -- (0.3%)
(net of other assets).......................................... (2,337,059)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 830,614,929
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
+No dividend was paid on this security during the 12 months ending June 30,
1995.
++Entire amount pledged as collateral for futures transactions (See Note 2).
##Open futures contracts as of June 30, 1995 are as follows:
PAR VALUE
COVERED BY CONTRACT TYPE EXPIRATION DATE VALUE OF CONTRACTS
$26,598,700 S&P 500 Index Futures Sept 95 $27,083,925
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B31
<PAGE>
HIGH DIVIDEND STOCK PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 73.3% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 4.0%
Northrop Grumman Corp........................... 404,200 $ 21,068,925
Thiokol Corp.................................... 633,900 19,175,475
--------------
40,244,400
--------------
AUTOS - CARS & TRUCKS -- 4.2%
Chrysler Corp................................... 888,617 42,542,538
--------------
BANKS AND SAVINGS & LOANS -- 0.1%
First Fidelity Bancorp.......................... 12,300 725,700
--------------
COMMERCIAL SERVICES -- 1.1%
Dun & Bradstreet Corp........................... 200,000 10,500,000
John H. Harland Co.............................. 36,800 841,800
--------------
11,341,800
--------------
COMPUTER SERVICES -- 0.8%
+Intergraph Corp................................ 760,900 8,465,012
--------------
DIVERSIFIED GAS -- 1.8%
British Gas, PLC, ADR........................... 115,600 5,317,600
Equitable Resources, Inc........................ 83,550 2,412,506
Sonat Offshore Drilling, Inc.................... 221,200 6,359,500
Tidewater, Inc.................................. 160,000 4,020,000
Yankee Energy Systems, Inc...................... 30,400 676,400
--------------
18,786,006
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 2.5%
International Business Machines Corp............ 264,900 25,430,400
--------------
ELECTRICAL EQUIPMENT -- 2.0%
Kuhlman Corp.................................... 383,300 4,312,125
Westinghouse Electric Corp...................... 1,105,600 16,169,400
--------------
20,481,525
--------------
ELECTRONICS -- 1.1%
+IMO Industries, Inc............................ 437,200 3,934,800
Newport Corp.................................... 316,400 2,966,250
Pacific Scientific Co........................... 211,000 3,771,625
--------------
10,672,675
--------------
FINANCIAL SERVICES -- 6.0%
A.G. Edwards, Inc............................... 375,100 8,439,750
Bear Stearns Companies, Inc..................... 633,780 13,547,047
Legg Mason, Inc................................. 89,300 2,411,100
Lehman Brothers Holdings, Inc................... 1,169,100 25,574,063
Manufactured Home Communities, Inc.............. 301,500 4,635,563
Morgan Stanley Group, Inc....................... 80,000 6,480,000
--------------
61,087,523
--------------
FOREST PRODUCTS -- 0.7%
Rayonier, Inc................................... 200,000 7,100,000
--------------
GAS PIPELINES -- 2.2%
+Global Marine, Inc............................. 523,500 3,010,125
Panhandle Eastern Corp.......................... 421,700 10,278,937
TransCanada Pipelines, Ltd...................... 442,700 5,921,113
Williams Companies, Inc......................... 76,553 2,669,786
--------------
21,879,961
--------------
HOUSING RELATED -- 0.7%
Irvine Apartment Communities, Inc............... 400,000 6,900,000
--------------
INSURANCE -- 7.7%
Aetna Life & Casualty Co........................ 212,100 13,335,787
Alexander & Alexander Services, Inc............. 812,000 19,386,500
Fremont General Corp............................ 104,060 2,510,447
Lincoln National Corp........................... 168,800 7,385,000
Marsh & McLennan Companies, Inc................. 139,600 11,325,050
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Ohio Casualty Corp.............................. 178,900 $ 5,635,350
SAFECO Corp..................................... 199,000 11,430,063
Selective Insurance Group, Inc.................. 208,400 6,877,200
--------------
77,885,397
--------------
MACHINERY -- 0.5%
+Esterline Technologies Corp.................... 188,700 4,269,338
+Terex Corp..................................... 278,600 1,288,525
--------------
5,557,863
--------------
MEDIA -- 0.8%
Gannett Co., Inc................................ 120,000 6,510,000
Pulitzer Publishing Co.......................... 37,375 1,593,109
--------------
8,103,109
--------------
MINERAL RESOURCES -- 0.5%
Potash Corp. of Saskatchewan, Inc............... 98,300 5,492,512
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 1.0%
Morrison Knudsen Corp........................... 1,172,900 7,917,075
+Tubos De Acero De Mexico, ADR.................. 59,500 293,781
United Industrial Corp.......................... 31,700 225,863
Zurn Industries, Inc............................ 64,100 1,282,000
--------------
9,718,719
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 0.6%
Kellwood Co..................................... 338,900 5,761,300
--------------
PETROLEUM -- 7.3%
Elf Aquitaine, ADR.............................. 295,979 11,025,217
KN Energy, Inc.................................. 261,900 6,645,713
Mobil Corp...................................... 36,700 3,523,200
Occidental Petroleum Corp....................... 445,100 10,181,662
Petroleum Heat and Power Co., Inc. (Class 'A'
Stock)........................................ 49,800 410,850
Quaker State Corp............................... 720,900 10,813,500
Sun Co., Inc.................................... 150,100 4,108,988
Tenneco, Inc.................................... 258,700 11,900,200
Texaco, Inc..................................... 47,200 3,097,500
USX-Marathon Group.............................. 608,600 12,019,850
--------------
73,726,680
--------------
PETROLEUM SERVICES -- 8.7%
Baker Hughes, Inc............................... 641,300 13,146,650
**+Crestar Energy, Inc.......................... 200,000 2,075,520
Dresser Industries, Inc......................... 656,400 14,604,900
Halliburton Co.................................. 252,900 9,041,175
McDermott International, Inc.................... 1,022,400 24,665,400
+Rowan Companies, Inc........................... 229,300 1,863,062
+Smith International Inc........................ 422,300 7,073,525
Sonat, Inc...................................... 234,400 7,149,200
+Varco International, Inc....................... 1,089,700 8,990,025
--------------
88,609,457
--------------
REAL ESTATE DEVELOPMENT -- 11.5%
Amli Residential Properties Trust............... 208,300 3,957,700
Avalon Properties, Inc.......................... 265,000 5,266,875
Beacon Properties Corp.......................... 184,800 3,672,900
Bradley Real Estate, Inc........................ 240,000 3,870,000
Carr Realty Corp................................ 26,500 457,125
Crescent Real Estate Equities, Inc.............. 597,000 19,029,375
Equity Residential Properties Trust............. 781,000 21,770,375
Essex Property Trust, Inc....................... 146,000 2,646,250
First Union Real Estate Investments............. 122,100 915,750
Gables Residential Trust........................ 435,800 8,933,900
Glimcher Realty Trust........................... 300,000 6,225,000
JDN Realty Corp................................. 293,200 5,973,950
JP Realty, Inc.................................. 84,000 1,722,000
</TABLE>
B32
<PAGE>
HIGH DIVIDEND STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Kimco Realty Corp............................... 37,500 $ 1,425,000
Malan Realty Investors, Inc..................... 140,000 2,030,000
MGI Properties, Inc............................. 34,800 522,000
Pennsylvania Real Estate Investment Trust....... 50,100 1,020,787
Security Capital Pacific Trust.................. 527,034 9,157,216
Simon Property Group, Inc....................... 214,300 5,384,287
Storage Equities, Inc........................... 56,500 925,188
Vornado Realty Trust............................ 278,800 9,723,150
Weingarten Realty Investors..................... 62,500 2,359,375
--------------
116,988,203
--------------
RETAIL -- 2.8%
Gibson Greetings, Inc........................... 385,900 5,161,413
J.C. Penney Co., Inc............................ 180,000 8,640,000
K mart Corp..................................... 340,000 4,972,500
May Department Stores Co........................ 150,000 6,243,750
TJX Companies, Inc.............................. 270,000 3,577,500
--------------
28,595,163
--------------
STEEL -- 2.6%
+LTV Corp....................................... 102,300 1,496,138
USX-U.S. Steel Group............................ 720,000 24,750,000
--------------
26,246,138
--------------
TELECOMMUNICATIONS -- 0.7%
Ameritech Corp.................................. 12,800 563,200
Telefonos de Mexico (Class 'L' Stock), ADR...... 214,000 6,339,750
--------------
6,902,950
--------------
TEXTILES -- 0.8%
+Fruit of the Loom, Inc. (Class 'A' Stock)...... 355,000 7,499,375
Garan, Inc...................................... 3,300 55,275
Oxford Industries, Inc.......................... 33,000 602,250
--------------
8,156,900
--------------
UTILITY - COMMUNICATIONS -- 0.1%
U S West, Inc................................... 14,800 616,050
--------------
UTILITY - ELECTRIC -- 0.5%
Central Louisiana Electric Co................... 10,500 246,750
Entergy Corp.................................... 217,200 5,239,950
--------------
5,486,700
--------------
TOTAL COMMON STOCKS
(Cost $663,205,529)............................................ 743,504,681
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 12.8% SHARES VALUE
------------- --------------
<S> <C> <C>
ALUMINUM -- 1.2%
Kaiser Aluminum Corp. (Cum. Conv.).............. 363,500 4,907,250
Reynolds Metals Co. (Cum. Conv.)................ 147,700 7,126,525
--------------
12,033,775
--------------
DRUGS & HOSPITAL SUPPLIES -- 0.5%
U.S. Surgical Corp. (Cum. Conv.)................ 208,300 5,311,650
--------------
ELECTRICAL EQUIPMENT -- 2.1%
**Westinghouse Electric Corp. (Cum. Conv.),
Series C...................................... 1,457,000 21,672,875
--------------
ELECTRONICS -- 1.1%
National Semiconductor Corp. (Cum. Conv.)....... 112,000 11,051,600
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
PREFERRED STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
FINANCIAL SERVICES -- 0.6%
**Parker & Parsley Capital, LLC (Cum. Conv.).... 135,000 $ 6,024,375
--------------
FOREST PRODUCTS -- 0.7%
James River Corp. of Virginia (Cum. Conv. Ex.),
Series P...................................... 268,300 6,640,425
--------------
INSURANCE -- 0.7%
**Alexander & Alexander Services, Inc. (Cum.
Conv.), Series A.............................. 100,000 5,000,000
**Unocal Corp. (Cum. Conv.)..................... 35,000 1,863,750
USF&G Corp. (Conv. Ex.), Series A............... 10,900 542,275
--------------
7,406,025
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 0.6%
Echo Bay Finance Corp. (Cum. Conv.), Series A... 100,000 2,825,000
Hecla Mining Co. (Cum. Conv.), Series B......... 60,000 2,962,500
--------------
5,787,500
--------------
PETROLEUM SERVICES -- 1.0%
**McDermott International, Inc. (Cum. Conv.),
Series C...................................... 100,000 4,475,000
Noble Drilling Corp. (Cum. Conv.)............... 90,000 2,137,500
Reading & Bates Corp. (Cum. Conv.).............. 134,800 3,841,800
--------------
10,454,300
--------------
REAL ESTATE DEVELOPMENT -- 0.1%
Security Capital Pacific Trust (Cum. Conv.),
Series A...................................... 54,500 1,212,625
--------------
STEEL -- 1.9%
**Bethlehem Steel Corp. (Cum. Conv.)............ 300,000 14,081,250
USX Corp. (Cum. Conv.).......................... 114,600 5,443,500
--------------
19,524,750
--------------
TEXTILES -- 0.4%
Fieldcrest Cannon, Inc. (Cum. Conv.), Series
A............................................. 85,000 4,037,500
--------------
TOBACCO -- 1.8%
RJR Nabisco Holdings Corp. (Conv.).............. 2,955,000 18,099,375
--------------
UTILITY - ELECTRIC -- 0.1%
Gulf States Utilities Co. (Cum.)................ 900 50,963
Gulf States Utilities Co. (Cum.), Series A...... 4,392 439,200
--------------
490,163
--------------
TOTAL PREFERRED STOCKS
(Cost $129,361,263)............................................ 129,746,938
--------------
<CAPTION>
MARKET
RIGHTS AND WARRANTS -- 0.0% SHARES VALUE
------------- --------------
<S> <C> <C>
MACHINERY
**++Terex Corp. (Rights)........................ 16,950 0
--------------
(Cost $0)
<CAPTION>
PAR MARKET
CONVERTIBLE BONDS -- 6.5% VALUE VALUE
------------- --------------
<S> <C> <C>
INDUSTRIAL
AMR Corp.,
6.125%, 11/01/24.............................. $ 18,000,000 $ 18,720,000
Baker Hughes, Inc.,
Zero Coupon, 05/05/08......................... 6,750,000 4,050,000
</TABLE>
B33
<PAGE>
HIGH DIVIDEND STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
CONVERTIBLE BONDS (CONTINUED) VALUE VALUE
------------- --------------
<S> <C> <C>
Coeur d'Alene Mines Corp.,
7.000%, 11/30/02.............................. $ 3,000,000 $ 3,630,000
Conner Peripherals, Inc.,
6.750%, 03/01/01.............................. 1,980,000 1,683,000
Cross Timbers Oil Co.,
5.250%, 11/01/03.............................. 2,583,000 2,182,635
IMC Global, Inc.,
6.250%, 12/01/01.............................. 4,500,000 4,573,125
Malan Realty Investors, Inc.,
9.500%, 07/15/04.............................. 3,000,000 2,707,500
Noble Affiliates, Inc.,
4.250%, 11/01/03.............................. 11,701,000 11,262,213
Oryx Energy Co.,
7.500%, 05/15/14.............................. 2,000,000 1,740,000
Quantum Corp.,
6.375%, 04/01/02.............................. 7,000,000 8,715,000
**Seagate Technology,
5.000%, 11/01/03.............................. 2,500,000 3,875,000
6.750%, 05/01/12.............................. 3,070,000 3,223,500
--------------
66,361,973
--------------
TOTAL CONVERTIBLE BONDS
(Cost $60,735,316)............................................. 66,361,973
--------------
<CAPTION>
PAR MARKET
LONG-TERM BONDS -- 0.8% VALUE VALUE
------------- --------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS
United States Treasury Bonds,
7.500%, 11/15/24.............................. 7,000,000 7,744,870
--------------
(Cost $7,203,112)
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 6.1% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 61,728,000 61,728,000
--------------
OTHER ASSETS -- 0.5%
(net of liabilities)........................................... 4,821,368
--------------
TOTAL NET ASSETS -- 100.0%....................................... $1,013,907,830
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
PLC Public Limited Company (British Corporation)
**Indicates a restricted security; the aggregate cost of the restricted
securities is $61,844,793. The aggregate value, $59,067,770 is
approximately 5.8% of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
++Non-income producing.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B34
<PAGE>
COMMON STOCK PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 86.2% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 3.7%
AAR Corp........................................ 650,000 $ 11,618,750
Lockheed Martin Corp............................ 338,877 21,391,610
Loral Corp...................................... 900,000 46,575,000
United Technologies Corp........................ 500,000 39,062,500
--------------
118,647,860
--------------
ALUMINUM -- 1.2%
+Alumax, Inc.................................... 267,500 8,325,938
Aluminum Co. of America......................... 600,000 30,075,000
--------------
38,400,938
--------------
AUTOS - CARS & TRUCKS -- 4.1%
Chrysler Corp................................... 1,963,910 94,022,191
General Motors Corp............................. 700,000 32,812,500
+Navistar International Corp.................... 395,200 5,977,400
--------------
132,812,091
--------------
BANKS AND SAVINGS & LOANS -- 7.7%
Bank of New York Company, Inc................... 900,000 36,337,500
BankAmerica Corp................................ 550,000 28,943,750
Bankers Trust NY Corp........................... 300,000 18,600,000
Chase Manhattan Corp............................ 600,000 28,200,000
Comerica, Inc................................... 1,000,000 32,125,000
First of America Bank Corp...................... 187,000 6,942,375
Great Western Financial Corp.................... 1,000,000 20,625,000
J.P. Morgan & Co., Inc.......................... 395,400 27,727,425
Mellon Bank Corp................................ 276,398 11,505,067
Mercantile Bankshares Corp...................... 279,600 6,291,000
NationsBank Corp................................ 600,000 32,175,000
--------------
249,472,117
--------------
CHEMICALS -- 0.8%
Eastman Chemical Co............................. 466,550 27,759,725
--------------
CHEMICALS - SPECIALTY -- 1.5%
+ESSEF Corp..................................... 110,000 1,787,500
IMC Global, Inc................................. 705,500 38,185,188
Witco Corp...................................... 268,800 8,668,800
--------------
48,641,488
--------------
COMMERCIAL SERVICES -- 0.4%
Wellman, Inc.................................... 550,000 15,056,250
--------------
COMPUTER SERVICES -- 1.1%
Comdisco, Inc................................... 900,000 27,337,500
Gerber Scientific, Inc.......................... 419,800 7,031,650
+Harris Computer Systems Corp................... 15,000 206,250
--------------
34,575,400
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 0.9%
International Business Machines Corp............ 300,000 28,800,000
--------------
DRUGS AND HOSPITAL SUPPLIES -- 2.9%
Baxter International, Inc....................... 2,100,000 76,387,500
Upjohn Co....................................... 450,000 17,043,750
--------------
93,431,250
--------------
ELECTRICAL EQUIPMENT -- 0.0%
+Rexel, Inc..................................... 107,199 1,018,391
--------------
ELECTRONICS -- 6.8%
+Amdahl Corp.................................... 2,818,500 31,355,812
+Digital Equipment Corp......................... 2,500,000 101,875,000
Harris Corp..................................... 300,000 15,487,500
Tandy Corp...................................... 1,323,500 68,656,563
Zero Corp....................................... 120,500 1,807,500
--------------
219,182,375
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
FINANCIAL SERVICES -- 7.7%
American Express Co............................. 2,100,000 $ 73,762,500
Dean Witter, Discover & Co...................... 1,600,000 75,200,000
Lehman Brothers Holdings, Inc................... 900,000 19,687,500
Republic New York Corp.......................... 225,000 12,600,000
Salomon, Inc.................................... 700,000 28,087,500
Travelers, Inc.................................. 900,000 39,375,000
--------------
248,712,500
--------------
FOREST PRODUCTS -- 6.0%
International Paper Co.......................... 415,000 35,586,250
James River Corp. of Virginia................... 560,000 15,470,000
Rayonier, Inc................................... 125,000 4,437,500
Scott Paper Co.................................. 2,834,200 140,292,900
--------------
195,786,650
--------------
GAS PIPELINES -- 0.3%
NorAm Energy Corp............................... 1,300,000 8,450,000
--------------
HEALTHCARE -- 1.0%
+Foundation Health Corp......................... 1,150,000 31,050,000
--------------
HOSPITAL MANAGEMENT -- 2.0%
Columbia/HCA Healthcare Corp.................... 400,000 17,300,000
+Tenet Healthcare Corp.......................... 3,237,832 46,543,835
--------------
63,843,835
--------------
HOUSING RELATED -- 0.5%
Centex Corp..................................... 600,000 16,950,000
--------------
INSURANCE -- 10.1%
Alexander & Alexander Services, Inc............. 1,050,000 25,068,750
American General Corp........................... 1,000,000 33,750,000
Chubb Corp...................................... 700,000 56,087,500
Citizens Corp................................... 700,000 11,462,500
Emphesys Financial Group, Inc................... 441,400 10,428,075
Equitable Companies, Inc........................ 1,600,000 33,400,000
First Colony Corp............................... 1,253,600 30,086,400
Old Republic International Corp................. 1,000,590 26,140,414
Providian Corp.................................. 340,500 12,343,125
SAFECO Corp..................................... 800,000 45,950,000
SCOR U.S. Corp.................................. 195,600 1,760,400
St. Paul Companies, Inc......................... 400,000 19,700,000
Western National Corp........................... 1,624,300 20,100,712
--------------
326,277,876
--------------
LODGING -- 2.2%
Loews Corp...................................... 600,000 72,600,000
--------------
MINERAL RESOURCES -- 1.4%
+Amax Gold, Inc................................. 131,342 722,381
Cyprus Amax Minerals Co......................... 1,533,200 43,696,200
+Nord Resources Corp............................ 130,500 440,438
--------------
44,859,019
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 1.6%
American Water Works Co., Inc................... 135,000 4,286,250
ITT Corp........................................ 400,000 47,000,000
+Worldtex, Inc.................................. 107,199 629,794
--------------
51,916,044
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 0.9%
Eastman Kodak Co................................ 500,000 30,312,500
--------------
PETROLEUM -- 4.3%
Amerada Hess Corp............................... 325,000 15,884,374
Atlantic Richfield Co........................... 250,000 27,437,500
</TABLE>
B35
<PAGE>
COMMON STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
Elf Aquitaine, ADR.............................. 1,855,133 $ 69,103,704
Occidental Petroleum Corp....................... 1,100,000 25,162,500
--------------
137,588,078
--------------
PETROLEUM SERVICES -- 2.0%
+B.J. Services Co............................... 500,000 11,375,000
+Oryx Energy Co................................. 1,600,000 22,000,000
Total SA, ADR................................... 717,640 21,708,610
Union Texas Petroleum Holdings, Inc............. 504,500 10,657,563
--------------
65,741,173
--------------
RAILROADS -- 0.6%
+Southern Pacific Rail Corp..................... 1,300,000 20,475,000
--------------
RETAIL -- 7.6%
Dayton-Hudson Corp.............................. 119,600 8,581,300
Dillard Department Stores, Inc. (Class 'A'
Stock)........................................ 1,991,700 58,506,188
+Federated Department Stores, Inc............... 700,000 18,025,000
Gibson Greetings, Inc........................... 750,000 10,031,250
K mart Corp..................................... 4,000,000 58,500,000
Liz Claiborne, Inc.............................. 1,200,000 25,500,000
Petrie Stores Corp.............................. 540,000 3,645,000
TJX Companies, Inc.............................. 1,509,300 19,998,224
+Toys 'R' Us, Inc............................... 800,000 23,400,000
+Waban, Inc..................................... 1,300,000 19,337,500
--------------
245,524,462
--------------
STEEL -- 0.9%
+Bethlehem Steel Corp........................... 500,000 8,125,000
Birmingham Steel Corp........................... 873,500 16,159,750
Carpenter Technology Corp....................... 50,000 3,406,250
--------------
27,691,000
--------------
TELECOMMUNICATIONS -- 3.3%
Sprint Corp..................................... 1,700,000 57,162,500
Telefonica de Espana, SA, ADR................... 1,300,000 50,375,000
--------------
107,537,500
--------------
TOBACCO -- 1.4%
RJR Nabisco Holdings Corp....................... 1,600,000 44,600,000
--------------
TRUCKING/SHIPPING -- 0.6%
+OMI Corp....................................... 1,000,000 6,625,000
Overseas Shipholding Group, Inc................. 600,000 12,450,000
--------------
19,075,000
--------------
UTILITY - ELECTRIC -- 0.7%
American Electric Power Co., Inc................ 180,000 6,322,500
General Public Utilities Corp................... 500,000 14,875,000
--------------
21,197,500
--------------
TOTAL COMMON STOCKS
(Cost $2,194,930,485).......................................... 2,787,986,022
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 0.8% SHARES VALUE
------------- --------------
<S> <C> <C>
TOBACCO
RJR Nabisco Holdings Corp. (Conv.).............. 4,000,000 24,500,000
--------------
(Cost $25,999,610)
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 12.9% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 418,412,000 $ 418,412,000
--------------
OTHER ASSETS -- 0.1%
(net of liabilities)........................................... 1,984,823
--------------
TOTAL NET ASSETS -- 100.0%....................................... $3,232,882,845
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B36
<PAGE>
GROWTH STOCK PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 96.8% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 2.9%
Boeing Co....................................... 7,900 $ 494,737
--------------
AIRLINES -- 1.4%
+AMR Corp....................................... 3,300 246,262
--------------
BEVERAGES -- 3.3%
Coca-Cola Co.................................... 4,300 274,125
PepsiCo, Inc.................................... 6,300 287,438
--------------
561,563
--------------
COMMERCIAL SERVICES -- 3.6%
+America Online, Inc............................ 5,200 228,800
+CUC International, Inc......................... 4,000 168,000
First Financial Management Corp................. 2,500 213,750
--------------
610,550
--------------
COMMUNICATIONS -- 1.2%
+Clear Channel Communications, Inc.............. 3,100 199,562
--------------
COMPUTER SERVICES -- 17.2%
Adobe Systems, Inc.............................. 5,500 319,000
Autodesk, Inc................................... 6,900 296,700
+Broderbund Software, Inc....................... 3,900 248,625
+Cerner Corp.................................... 2,800 171,500
+Cisco Systems, Inc............................. 8,000 404,500
Computer Associates International, Inc.......... 3,300 223,575
+Electronic Arts, Inc........................... 6,400 173,600
+EMC Corp....................................... 11,300 274,025
+Intuit, Inc.................................... 2,200 167,200
+Microsoft Corp................................. 5,100 460,913
+Silicon Graphics, Inc.......................... 5,200 207,350
--------------
2,946,988
--------------
CONTAINERS -- 1.2%
+Crown Cork & Seal Co., Inc..................... 4,100 205,512
--------------
COSMETICS & SOAPS -- 1.5%
Gillette Co..................................... 5,600 249,900
--------------
DIVERSIFIED OFFICE EQUIPMENT -- 1.7%
+COMPAQ Computer Corp........................... 6,300 285,862
--------------
DRUGS AND HOSPITAL SUPPLIES -- 6.2%
Astra AB, ADR A................................. 9,000 273,375
+Chiron Corporation............................. 2,200 143,000
Eli Lilly & Co.................................. 2,400 188,400
Pfizer, Inc..................................... 1,800 166,275
Smithkline Beecham PLC, ADR UTS................. 6,400 289,600
--------------
1,060,650
--------------
ELECTRICAL EQUIPMENT -- 1.2%
+Applied Materials, Inc......................... 2,300 199,237
--------------
ELECTRONICS -- 20.8%
Duracell International, Inc..................... 4,300 185,975
Hewlett-Packard Co.............................. 8,400 625,800
Intel Corp...................................... 10,200 645,788
+International Rectifier Corp................... 6,700 217,750
+LSI Logic Corp................................. 10,000 391,250
Motorola, Inc................................... 7,000 469,875
Nokia Corp., ADR A.............................. 6,000 357,750
Sensormatic Electronics Corp.................... 5,300 188,150
+Symbol Technologies, Inc....................... 5,400 207,225
Texas Instruments, Inc.......................... 2,000 267,750
--------------
3,557,313
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
FINANCIAL SERVICES -- 2.7%
Federal National Mortgage Association........... 3,100 $ 292,563
Morgan Stanley Group, Inc....................... 2,000 162,000
--------------
454,563
--------------
HOSPITAL MANAGEMENT -- 1.2%
+PhyCor, Inc.................................... 6,000 210,750
--------------
INSURANCE -- 7.2%
American International Group, Inc............... 2,900 330,600
E.W. Blanch Holdings, Inc....................... 6,200 115,475
MGIC Investment Corp............................ 3,900 182,813
Mutual Risk Management, Ltd..................... 5,500 184,250
United Healthcare Corp.......................... 6,000 248,250
+Value Health, Inc.............................. 5,400 174,150
--------------
1,235,538
--------------
LEISURE -- 4.8%
Carnival Corp. (Class 'A' Stock)................ 7,500 175,313
Circus Circus Enterprises, Inc.................. 5,800 204,450
Walt Disney Co.................................. 8,000 445,000
--------------
824,763
--------------
LODGING -- 2.5%
Hilton Hotels Corp.............................. 3,300 231,825
+Promus Companies, Inc.......................... 5,100 198,900
--------------
430,725
--------------
MACHINERY -- 1.4%
Harnischfeger Industries, Inc................... 7,000 242,374
--------------
MEDIA -- 3.7%
News Corp. Ltd., ADR............................ 8,100 183,263
Omnicom Group, Inc.............................. 3,300 200,062
Reuters Holdings PLC, ADR....................... 5,100 255,638
--------------
638,963
--------------
MINERAL RESOURCES -- 0.9%
Minerals Technologies, Inc...................... 4,500 162,000
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 1.0%
+Scholastic Corp................................ 3,100 168,175
--------------
RAILROADS -- 1.1%
+Wisconsin Central Transportation Corp.......... 3,800 186,200
--------------
RESTAURANTS -- 1.9%
+Lone Star Steakhouse and Saloon................ 5,000 151,562
McDonald's Corp................................. 4,500 176,063
--------------
327,625
--------------
RETAIL -- 3.8%
+AutoZone, Inc.................................. 6,700 168,338
Dollar General Corporation...................... 5,900 186,588
Home Depot, Inc................................. 4,700 190,937
+Kohl's Corp.................................... 2,400 109,500
--------------
655,363
--------------
TELECOMMUNICATIONS -- 2.4%
L.M. Ericsson Telephone Co. (Class 'B' Stock),
ADR........................................... 8,100 162,000
Vodafone Group PLC, ADR......................... 6,400 242,400
--------------
404,400
--------------
TOTAL COMMON STOCKS
(Cost $15,132,396)............................................. 16,559,575
--------------
</TABLE>
B37
<PAGE>
GROWTH STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 12.6% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 2,152,000 $ 2,152,000
--------------
LIABILITIES -- (9.4%)
(net of other assets).......................................... (1,608,312)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 17,103,263
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
PLC Public Limited Company (British Corporation)
UTS Unit Trust Shares
+No dividend was paid on this security during the 12 months ending June 30,
1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B38
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 91.0% SHARES VALUE
------------- --------------
<S> <C> <C>
AEROSPACE -- 0.5%
AAR Corp........................................ 1,100 $ 19,662
+BE Aerospace, Inc.............................. 1,000 8,875
Kaman Corp. (Class 'A' Stock)................... 1,100 14,025
+Orbital Sciences Corp.......................... 1,200 21,900
+UNC, Inc....................................... 1,200 6,450
Watkins-Johnson Co.............................. 500 22,250
--------------
93,162
--------------
AIRLINES -- 0.1%
SkyWest, Inc.................................... 700 15,837
--------------
ALUMINUM -- 0.1%
IMCO Recycling, Inc............................. 800 15,000
--------------
AUTOS - CARS & TRUCKS -- 1.0%
A.O. Smith Corp................................. 1,400 32,900
+Custom Chrome, Inc............................. 200 4,000
Myers Industries, Inc........................... 1,100 15,813
Simpson Industries, Inc......................... 1,100 12,375
Spartan Motors, Inc............................. 600 5,250
Standard Motor Products, Inc.................... 900 18,225
Standard Products Co............................ 1,200 26,100
+TBC Corp....................................... 1,600 17,200
Wabash National Corp............................ 1,300 40,462
Wynn's International, Inc....................... 400 9,300
--------------
181,625
--------------
BANKS AND SAVINGS & LOANS -- 6.8%
+American Savings of Florida.................... 600 12,525
+Astoria Financial Corp......................... 800 28,600
Bell Bancorp, Inc............................... 600 16,950
+California Federal Bank........................ 3,400 44,625
Centerbank...................................... 800 11,600
Centura Banks, Inc.............................. 1,600 44,600
+Coast Savings Financial, Inc................... 1,300 26,812
Collective Bancorp, Inc......................... 1,400 28,350
+Commercial Federal Corp........................ 900 24,525
Cullen/Frost Bankers, Inc....................... 600 24,300
Deposit Guaranty Corp........................... 1,200 46,800
Downey Financial Corp........................... 1,100 20,075
First Commercial Corp........................... 1,500 38,250
First Financial Corp............................ 1,800 31,500
First Michigan Bank Corp........................ 930 23,018
+FirstBank Puerto Rico.......................... 1,000 18,000
FirstFed Michigan Corp.......................... 1,300 36,400
Firstmerit Corp................................. 2,000 52,500
JSB Financial, Inc.............................. 700 20,213
Keystone Financial, Inc......................... 1,400 39,463
Liberty Bancorp, Inc............................ 600 19,350
Loyola Capital Corp............................. 400 12,400
Magna Group, Inc................................ 1,700 37,400
Mark Twain Bancshares, Inc...................... 1,000 32,250
North American Mortgage Co...................... 800 18,500
ONBANcorp, Inc.................................. 1,000 28,375
+Premier Bancorp, Inc........................... 2,100 37,800
Provident Bancorp, Inc.......................... 1,000 34,625
+Riggs National Corp............................ 1,600 15,800
Rochester Community Savings Bank................ 1,000 20,000
Roosevelt Financial Group, Inc.................. 2,800 46,725
Sovereign Bancorp, Inc.......................... 3,300 31,762
St. Paul Bancorp, Inc........................... 1,200 26,850
Summit Bancorp.................................. 2,100 44,625
Union Planters Corp............................. 2,800 74,900
United States Trust Corp........................ 600 43,200
Whitney Holding Corp............................ 800 21,400
Zions Bancorp................................... 900 45,000
--------------
1,180,068
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
BEVERAGES -- 0.1%
Coca Cola Bottling Co........................... 500 $ 15,500
--------------
CHEMICALS -- 0.9%
+American Pacific Corp.......................... 400 1,900
Chemed Corp..................................... 700 24,325
+Cytec Industries, Inc.......................... 900 36,787
+Hauser Chemical Research, Inc.................. 700 3,719
Lilly Industries, Inc. (Class 'A' Stock)........ 1,200 14,100
+McWhorter Technologies, Inc.................... 700 10,500
+Mycogen Corp................................... 1,000 8,250
Quaker Chemical Corp............................ 500 8,125
+Scotts Co...................................... 1,300 28,438
WD-40 Co........................................ 400 16,600
--------------
152,744
--------------
CHEMICALS - SPECIALTY -- 0.1%
Penwest, Ltd.................................... 400 9,300
--------------
COMMERCIAL SERVICES -- 2.2%
ABM Industries, Inc............................. 600 13,875
ADVO, Inc....................................... 1,400 26,425
+America Online, Inc............................ 2,300 101,200
Bowne & Company, Inc............................ 1,200 20,550
+CDI Corp....................................... 1,400 28,700
+Corrections Corp. of America................... 700 24,062
+Envoy, Inc..................................... 600 5,100
+Franklin Quest Co.............................. 1,600 38,400
+Insurance Auto Auction, Inc.................... 800 23,400
LSB Industries, Inc............................. 900 5,513
Merrill Corp.................................... 500 9,500
+NFO Research, Inc.............................. 300 6,075
+Pharmaceutical Marketing Services, Inc......... 800 7,350
Plenum Publishing Corp.......................... 200 7,000
+Primark Corp................................... 1,300 23,562
Thomas Nelson, Inc.............................. 700 13,475
True North Communications, Inc.................. 1,600 30,200
--------------
384,387
--------------
COMPUTER SERVICES -- 7.1%
+Acxiom Corp.................................... 1,500 35,813
+American Management Systems, Inc............... 1,800 45,225
Amtech Corp..................................... 1,000 6,125
+Auspex Systems, Inc............................ 1,200 15,000
+BancTec, Inc................................... 600 9,375
+Banyan Systems, Inc............................ 1,200 16,500
+BISYS Group, Inc............................... 1,100 24,475
+Bolt, Beranek & Newman, Inc.................... 1,200 32,850
+Broderbund Software, Inc....................... 1,400 89,250
+Cerner Corp.................................... 1,000 61,250
+Chipcom Corp................................... 1,200 28,500
+Chips & Technologies, Inc...................... 1,200 15,750
+Cognex Corp.................................... 1,100 44,275
+Comverse Technologies, Inc..................... 1,400 24,850
+Continuum Company, Inc......................... 1,300 43,063
+Control Data Systems, Inc...................... 900 8,100
+FileNet Corp................................... 800 32,300
First Data Corp................................. 150 8,531
Gerber Scientific, Inc.......................... 1,600 26,800
+Hyperion Software Corp......................... 500 22,625
+Komag, Inc..................................... 1,400 72,800
+Maxtor Corp.................................... 3,500 22,312
National Data Corp.............................. 1,300 30,062
+Network General Corp........................... 1,500 40,875
+Paxar Corp..................................... 1,200 21,450
+Platinum Software Corp......................... 900 13,050
+PLATINUM Technology, Inc....................... 1,700 30,813
+Progress Software Corp......................... 400 20,800
</TABLE>
B39
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Read-Rite Corp................................. 3,100 $ 82,925
+Standard Microsystems Corp..................... 900 13,950
+Sterling Software, Inc......................... 1,600 61,600
+SunGard Data Systems, Inc...................... 1,200 62,700
System Software Associates, Inc................. 1,900 38,000
+Tech Data Corp................................. 2,600 29,737
Telxon Corp..................................... 1,100 23,925
+Tricord Systems, Inc........................... 900 3,375
+Viewlogic Systems, Inc......................... 1,100 13,888
+Wall Data, Inc................................. 600 9,150
+Zilog, Inc..................................... 1,300 64,837
--------------
1,246,906
--------------
CONSTRUCTION -- 0.5%
+BMC West Corp.................................. 400 6,000
+Insituform Technologies, Inc. (Class 'A'
Stock)........................................ 1,000 13,250
+Kasler Holding Co.............................. 2,000 10,500
M.D.C. Holdings, Inc............................ 1,200 7,500
Ply-Gem Industries, Inc......................... 1,000 17,750
Republic Gypsum Co.............................. 700 7,000
+Southern Energy Homes, Inc..................... 500 7,000
Stone & Webster, Inc............................ 1,000 29,500
--------------
98,500
--------------
CONTAINERS -- 0.1%
+Shorewood Packaging Corp....................... 1,300 19,012
--------------
COSMETICS & SOAPS -- 0.1%
Helene Curtis Industries, Inc................... 700 19,950
--------------
DIVERSIFIED GAS -- 4.2%
Atmos Energy Corp............................... 1,100 22,275
+Barrett Resources Corp......................... 700 16,275
+Benton Oil & Gas Co............................ 1,700 23,588
+Box Energy Corp. (Class 'B' Stock)............. 1,400 11,900
Cascade Natural Gas Corp........................ 600 8,400
Connecticut Energy Corp......................... 600 11,775
Cross Timbers Oil Co............................ 1,100 17,462
Daniel Industries, Inc.......................... 800 12,600
Devon Energy Corp............................... 1,500 32,250
Energen Corp.................................... 800 17,200
+Gerrity Oil & Gas Corp......................... 900 3,038
+HS Resources, Inc.............................. 800 11,200
KCS Energy, Inc................................. 800 17,100
New Jersey Resources Corp....................... 1,100 25,437
Northwest Natural Gas Co........................ 900 28,125
+Oceaneering International, Inc................. 1,700 15,088
Pennsylvania Enterprises, Inc................... 400 12,400
Phoenix Resource Companies, Inc................. 500 15,875
Plains Petroleum Co............................. 700 20,737
+Plains Resources, Inc.......................... 1,000 8,750
Pogo Producing Co............................... 2,300 52,613
Public Service Company of North Carolina,
Inc........................................... 1,400 22,925
Snyder Oil Corp................................. 2,100 26,512
Sonat Offshore Drilling, Inc.................... 2,000 57,500
Southwest Gas Corp.............................. 1,600 22,800
Southwestern Energy Co.......................... 1,800 24,975
St. Mary Land & Exploration Co.................. 600 7,500
+Tuboscope Vetco International, Inc............. 1,300 8,288
United Cities Gas Co............................ 600 9,000
+United Meridian Corp........................... 1,900 29,450
Vintage Petroleum, Inc.......................... 1,400 26,250
Washington Energy Co............................ 1,500 24,562
+Weatherford International, Inc................. 3,700 47,175
WICOR, Inc...................................... 1,200 33,750
Wiser Oil Co.................................... 600 8,175
--------------
732,950
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
DIVERSIFIED OFFICE EQUIPMENT -- 0.2%
Nashua Corp..................................... 400 $ 7,600
New England Business Service, Inc............... 1,000 19,750
--------------
27,350
--------------
DRUGS AND HOSPITAL SUPPLIES -- 5.7%
A.L. Pharma, Inc. (Class 'A' Stock)............. 1,500 28,125
ADAC Laboratories............................... 1,100 13,338
+Advanced Tissue Sciences, Inc.................. 2,400 23,400
+Alliance Pharmaceutical Corp................... 1,700 14,025
+American Medical Response, Inc................. 1,300 36,400
+Amsco International, Inc....................... 2,000 27,750
Ballard Medical Products........................ 1,800 23,400
+Calgene, Inc................................... 2,100 14,568
+CellPro, Inc................................... 900 12,038
+Cephalon, Inc.................................. 1,100 20,350
+Circon Corp.................................... 500 9,750
Collagen Corp................................... 500 8,563
+COR Therapeutics, Inc.......................... 1,300 11,619
+Cygnus Therapeutic Systems..................... 1,100 10,863
+CytRx Corp..................................... 2,200 4,263
+Enzo Biochem, Inc.............................. 1,470 16,720
+Genetic Therapy, Inc........................... 600 8,925
+Heart Technology, Inc.......................... 1,000 19,375
+IDEXX Laboratories, Inc........................ 2,200 57,200
+ImmuLogic Pharmaceutical Corp.................. 900 7,088
Invacare Corp................................... 1,000 41,500
+Liposome Company, Inc.......................... 1,700 18,488
+Liposome Technology, Inc....................... 1,200 12,300
+Marsam Pharmaceuticals, Inc.................... 800 15,200
+MedImmune, Inc................................. 1,000 14,375
+Molecular Biosystems, Inc...................... 700 4,375
+NBTY, Inc...................................... 1,100 7,150
+North American Vaccine, Inc.................... 1,900 18,880
+Noven Pharmaceuticals, Inc..................... 1,100 8,525
Omnicare, Inc................................... 1,800 48,825
Owens & Minor, Inc.............................. 2,100 26,250
+Patterson Dental Co............................ 1,100 26,125
+Perseptive Biosystems, Inc..................... 700 7,700
+Pharmaceutical Resources, Inc.................. 1,100 11,550
+Protein Design Labs, Inc....................... 1,000 20,750
+Regeneron Pharmaceuticals, Inc................. 1,200 10,800
+Resound Corp................................... 900 7,313
+Respironics, Inc............................... 900 12,825
+Roberts Pharmaceutical Corp.................... 1,200 26,400
+SciClone Pharmaceuticals, Inc.................. 1,100 6,875
+SpaceLabs Medical, Inc......................... 600 15,225
+STERIS Corp.................................... 600 29,100
+Summit Technology, Inc......................... 1,200 45,300
+Sunrise Medical, Inc........................... 1,300 40,462
+Syncor International Corp...................... 600 6,525
+TECNOL Medical Products, Inc................... 1,200 26,400
+The Immune Response Corp....................... 1,100 4,675
+TheraTech, Inc................................. 700 9,713
+U.S. Bioscience, Inc........................... 2,800 12,075
+Vertex Pharmaceuticals, Inc.................... 1,100 18,012
+VISX, Inc...................................... 700 9,275
Vital Signs, Inc................................ 800 13,800
+Watson Pharmaceuticals, Inc.................... 1,000 39,000
+Zoll Medical Corp.............................. 400 5,000
--------------
988,528
--------------
ELECTRICAL EQUIPMENT -- 2.8%
+Advance Circuits, Inc.......................... 500 9,000
Augat, Inc...................................... 1,200 24,600
Baldor Electric Co.............................. 1,300 37,212
Fluke Corp...................................... 500 21,000
+Integrated Device Technology, Inc.............. 2,600 120,250
</TABLE>
B40
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+KEMET Corp..................................... 1,300 $ 68,250
+Kent Electronics Corp.......................... 600 22,725
Kuhlman Corp.................................... 900 10,125
+Microchip Technology, Inc...................... 2,200 80,025
+Rexel, Inc..................................... 1,700 16,150
+Valance Technology, Inc........................ 1,400 4,900
+Vicor Corp..................................... 1,400 62,912
+Xircom, Inc.................................... 1,300 13,163
--------------
490,312
--------------
ELECTRONICS -- 6.3%
Allen Group, Inc................................ 1,800 53,325
Bell Industries, Inc............................ 420 8,978
+Benchmark Electronics, Inc..................... 300 7,388
BMC Industries, Inc............................. 900 22,612
Core Industries, Inc............................ 700 7,525
+Cyrix Corp..................................... 1,300 31,362
Dallas Semiconductor Corp....................... 1,800 36,900
+Dionex Corp.................................... 500 22,875
+Dynatech Corp.................................. 1,100 20,625
+IMO Industries, Inc............................ 1,200 10,800
+Input/Output, Inc.............................. 1,200 43,200
+Integrated Circuit Systems, Inc................ 700 10,325
+Intermagnetics General Corp.................... 618 8,807
+International Rectifier Corp................... 1,700 55,250
+Itron, Inc..................................... 800 25,000
+Lattice Semiconductor Corp..................... 1,300 44,688
+Marshall Industries............................ 1,200 40,200
+Maxim Integrated Products, Inc................. 2,000 102,000
+Norand Corp.................................... 500 20,375
+Oak Industries, Inc............................ 1,200 30,900
Pacific Scientific Co........................... 800 14,300
Pioneer Standard Electronics, Inc............... 900 22,050
+Plexus Corp.................................... 300 4,050
+S3, Inc........................................ 1,500 54,000
+Sanmina Corp................................... 600 22,800
+SCI Systems, Inc............................... 1,900 47,500
Smith Corona Corp............................... 2,000 2,750
+StrataCom, Inc................................. 2,500 121,875
+Three-Five Systems, Inc........................ 500 17,187
Tseng Laboratories, Inc......................... 1,300 11,375
+Video Lottery Technologies, Inc................ 700 4,550
+VLSI Technology, Inc........................... 2,500 75,312
Wyle Electronics................................ 800 22,500
X-Rite, Inc..................................... 1,400 25,900
+Zebra Technologies Corp. (Class 'A' Stock)..... 800 42,600
Zero Corp....................................... 1,000 15,000
--------------
1,106,884
--------------
ENVIRONMENTAL SERVICES -- 1.3%
+Allwaste, Inc.................................. 2,100 11,550
+Chambers Development Company, Inc. (Class 'A'
Stock)........................................ 2,100 13,519
Dames & Moore, Inc.............................. 1,600 20,800
+Groundwater Technology, Inc.................... 500 6,063
+Ionics, Inc.................................... 1,000 34,750
+OHM Corp....................................... 1,700 20,612
+Omega Environmental, Inc....................... 2,300 8,050
+Pure Technology International, Inc............. 1,300 7,231
+Sanifill, Inc.................................. 1,200 37,650
+TETRA Technologies, Inc........................ 800 9,700
+U.S.A. Waste Services, Inc..................... 1,200 18,600
+United States Filter Corp...................... 1,500 28,500
+Western Waste Industries....................... 1,000 20,125
--------------
237,150
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
FINANCIAL SERVICES -- 2.5%
Alex Brown, Inc................................. 1,000 $ 41,500
Charter One Financial, Inc...................... 1,400 34,300
Eaton Vance Corp................................ 600 19,350
Foothill Group, Inc. (Class 'A' Stock).......... 1,100 28,050
Inter-Regional Financial Group, Inc............. 600 17,700
Legg Mason, Inc................................. 800 21,600
+Medaphis Corp.................................. 2,400 52,200
+National Auto Credit, Inc...................... 1,800 24,075
Pioneer Group, Inc.............................. 1,700 45,687
Piper Jaffray Companies, Inc.................... 1,200 18,150
Quick & Reilly Group, Inc....................... 1,150 41,688
Raymond James Financial, Inc.................... 1,400 27,125
TCF Financial Corp.............................. 1,200 57,000
Waterhouse Investor Services, Inc............... 600 13,800
--------------
442,225
--------------
FOODS -- 1.1%
Chiquita Brands International, Inc.............. 3,400 47,600
Dekalb Genetics Corp. (Class 'B' Stock)......... 400 17,600
GoodMark Foods, Inc............................. 500 8,000
Interstate Bakeries Corp........................ 1,300 21,450
+J & J Snack Foods Corp......................... 400 5,050
Nash-Finch Co................................... 700 11,375
Richfood Holdings, Inc.......................... 1,300 28,763
Rykoff-Sexton, Inc.............................. 1,000 17,625
+Smithfield Foods, Inc.......................... 1,100 23,443
Super Food Services, Inc........................ 800 9,500
--------------
190,406
--------------
FOREST PRODUCTS -- 0.3%
Caraustar Industries, Inc....................... 1,700 30,600
Pope & Talbot, Inc.............................. 900 14,625
--------------
45,225
--------------
FURNITURE -- 0.5%
+Ethan Allen Interiors, Inc..................... 1,000 17,750
Interface, Inc. (Class 'A' Stock)............... 1,100 13,750
Juno Lighting, Inc.............................. 1,300 20,800
La-Z-Boy Chair Co............................... 1,200 31,650
Thomas Industries, Inc.......................... 700 11,462
--------------
95,412
--------------
HEALTHCARE -- 0.4%
Nature's Sunshine Products, Inc................. 600 9,450
+Sybron International Corp...................... 1,600 63,800
--------------
73,250
--------------
HOSPITAL MANAGEMENT -- 3.6%
+Apria Healthcare Group, Inc.................... 2,860 80,795
+CareLine, Inc.................................. 900 7,425
+Charter Medical Corp........................... 2,000 32,500
+Community Health Systems, Inc.................. 1,100 37,263
+Express Scripts, Inc. (Class 'A' Stock)........ 1,000 35,250
+Genesis Health Ventures, Inc................... 1,000 29,625
+GranCare, Inc.................................. 900 14,513
+Hillhaven Corp................................. 2,000 56,500
Integrated Health Services, Inc................. 1,400 42,000
+Lincare Holdings, Inc.......................... 1,800 47,812
+Living Centers of America, Inc................. 900 24,413
+Mariner Health Group, Inc...................... 1,500 16,875
+PhyCor, Inc.................................... 1,300 45,662
+Quantum Health Resources, Inc.................. 1,100 18,150
+Universal Health Services, Inc. (Class 'B'
Stock)........................................ 1,000 29,000
</TABLE>
B41
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Vencor, Inc.................................... 1,900 $ 59,850
+Vivra, Inc..................................... 1,600 43,400
--------------
621,033
--------------
HOUSING RELATED -- 0.5%
+Champion Enterprises, Inc...................... 1,000 15,875
Continental Homes Holding Corp.................. 400 6,950
Oakwood Homes Corp.............................. 1,500 38,437
Ryland Group, Inc............................... 1,100 17,738
Standard-Pacific Corp........................... 2,100 14,438
--------------
93,438
--------------
INSURANCE -- 3.7%
A.J. Gallagher and Co........................... 800 29,100
Allied Group, Inc............................... 600 17,100
American Bankers Insurance Group, Inc........... 1,200 38,100
Capital Re Corp................................. 900 23,400
Capitol American Financial Corp................. 1,200 27,300
CMAC Investment Corp............................ 800 34,700
+Coventry Corp.................................. 1,700 24,013
Enhance Financial Services Group, Inc........... 1,200 23,250
Fidelity National Financial, Inc................ 800 12,000
First American Financial Corp................... 800 18,500
Fremont General Corp............................ 1,180 28,467
Frontier Insurance Group, Inc................... 800 21,500
Hilb, Rogal and Hamilton Co..................... 800 10,000
Integon Corp.................................... 1,100 18,700
Life Partners Group, Inc........................ 1,900 38,000
Life Re Corp.................................... 1,100 20,488
Mutual Risk Management, Ltd..................... 900 30,150
National Re Corp................................ 1,100 36,850
Orion Capital Corp.............................. 1,000 39,000
Protective Life Corp............................ 1,800 49,050
Selective Insurance Group, Inc.................. 900 29,700
+Sierra Health Services, Inc.................... 1,000 24,500
Trenwick Group, Inc............................. 300 12,750
Washington National Corp........................ 800 16,500
Zenith National Insurance Corp.................. 1,200 25,800
--------------
648,918
--------------
LEISURE -- 2.3%
Arctco, Inc..................................... 1,900 22,325
+Aztar Corp..................................... 2,600 24,050
+Bally Gaming International, Inc................ 700 7,175
+Bell Sports Corp............................... 600 6,900
+Boomtown, Inc.................................. 600 7,200
+Carmike Cinemas, Inc. (Class 'A'Stock)......... 600 14,550
+Casino Magic Corp.............................. 2,000 11,125
+Cineplex Odeon Corp............................ 6,000 14,250
+Cobra Golf, Inc................................ 1,300 41,112
+Grand Casinos, Inc............................. 1,500 53,062
+Hollywood Park, Inc............................ 1,100 14,025
Huffy Corp...................................... 900 11,700
+International Lottery & Totalizator Systems,
Inc........................................... 1,200 3,750
+Players International, Inc..................... 1,900 38,000
+Regal Cinemas, Inc............................. 400 12,800
+Roadmaster Industries, Inc..................... 2,500 7,500
+Score Board, Inc............................... 700 4,025
Showboat, Inc................................... 1,100 20,350
Sturm Ruger & Company, Inc...................... 900 29,363
Thor Industries, Inc............................ 600 11,850
Winnebago Industries, Inc....................... 1,700 14,875
+WMS Industries, Inc............................ 1,700 33,363
--------------
403,350
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
LODGING -- 0.2%
Marcus Corp..................................... 900 $ 27,225
--------------
MACHINERY -- 1.6%
AGCO Corp....................................... 1,500 56,250
+Astec Industries, Inc.......................... 500 5,687
+INDRESCO, Inc.................................. 1,600 24,800
Kysor Industrial Corp........................... 300 6,225
+Lindsay Manufacturing Co....................... 300 10,425
Manitowoc Company, Inc.......................... 400 11,550
+Novellus Systems, Inc.......................... 1,100 74,525
Regal Beloit Corp............................... 1,400 21,700
Roper Industries, Inc........................... 1,000 35,000
+Royal Appliance Manufacturing Co............... 1,700 4,675
Toro Co......................................... 900 25,200
--------------
276,037
--------------
MEDIA -- 0.6%
+Catalina Marketing Corp........................ 700 37,537
+International Family Entertainment, Inc. (Class
'B' Stock).................................... 2,200 34,650
+NTN Communications, Inc........................ 1,400 7,175
+Westcott Communications, Inc................... 1,100 19,525
--------------
98,887
--------------
METALS - DIVERSIFIED -- 1.1%
Amcast Industrial Corp.......................... 600 11,400
AMCOL International Corp........................ 1,200 19,200
Brenco, Inc..................................... 700 8,488
Commercial Metals Co............................ 1,100 29,700
Glamis Gold, Ltd................................ 1,800 14,400
Handy & Harman.................................. 1,000 15,500
+Hecla Mining Co................................ 3,300 34,237
+Magma Copper Co................................ 3,200 52,000
--------------
184,925
--------------
MINERAL RESOURCES -- 0.4%
+Addington Resources, Inc....................... 1,000 14,750
Coeur D' Alene Mines Corp....................... 1,100 19,112
Dravo Corp...................................... 1,000 14,750
+Sunshine Mining and Refining Co................ 10,400 18,200
--------------
66,812
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 3.8%
Air Express International Corp.................. 1,300 30,550
+Alliant Techsystems, Inc....................... 900 37,575
AMTROL, Inc..................................... 500 9,000
Aquarion Co..................................... 500 11,500
BW/IP, Inc. (Class 'A' Stock)................... 1,700 31,450
Clarcor, Inc.................................... 1,000 22,875
Consumers Water Co.............................. 400 6,750
+Cyrk, Inc...................................... 600 5,325
+Fibreboard Corp................................ 600 14,400
+Figgie International, Inc. (Class 'A' Stock)... 1,200 10,350
Fisher Scientific International, Inc............ 1,100 36,438
+Flow International Corp........................ 900 8,944
+Gentex Corp.................................... 1,100 21,725
Greenfield Industries, Inc...................... 1,000 29,000
+Griffon Corp................................... 2,100 16,800
Harmon Industries, Inc.......................... 300 5,025
Hayes Wheels International, Inc................. 1,100 23,375
Insteel Industries, Inc......................... 600 4,500
+Intermet Corp.................................. 1,300 12,350
+Jan Bell Marketing, Inc........................ 1,800 4,163
Justin Industries, Inc.......................... 1,700 18,700
K-Swiss, Inc. (Class 'A' Stock)................. 500 6,500
+L.A. Gear, Inc................................. 1,600 3,800
+Lydall, Inc.................................... 1,200 26,400
Medusa Corp..................................... 1,100 27,362
</TABLE>
B42
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Mohawk Industries, Inc......................... 2,200 $ 32,450
+Mueller Industries, Inc........................ 600 29,550
O'Sullivan Corp................................. 1,100 12,650
+Paragon Trade Brands, Inc...................... 800 11,500
+SPS Technologies, Inc.......................... 300 11,287
+Timberland Co. (Class 'A' Stock)............... 800 19,700
TJ International, Inc........................... 1,200 22,500
Tredegar Industries, Inc........................ 600 14,925
Valmont Industries, Inc......................... 700 15,137
Walbro Corp..................................... 500 9,000
+Whittaker Corp................................. 600 13,200
+Wolverine Tube, Inc............................ 900 28,912
Wolverine World Wide, Inc....................... 1,150 23,863
--------------
669,531
--------------
MISCELLANEOUS - CONSUMER GROWTH/STABLE -- 12.5%
Hughes Supply, Inc.............................. 400 8,800
Ideon Group, Inc................................ 2,000 19,750
Kellwood Co..................................... 1,500 25,500
+Mail Boxes, Etc................................ 700 6,650
+Merisel, Inc................................... 2,000 15,250
Philadelphia Suburban Corp...................... 800 14,800
Southern California Water Co.................... 400 7,750
Standard and Poor's 500 Depository Receipt...... 37,450 2,037,516
+Valassis Communications, Inc................... 2,800 46,900
--------------
2,182,916
--------------
PETROLEUM -- 0.4%
Cabot Oil & Gas Corp. (Class 'A' Stock)......... 1,600 22,000
KN Energy, Inc.................................. 1,900 48,213
--------------
70,213
--------------
PETROLEUM SERVICES -- 1.6%
Camco International, Inc........................ 1,500 35,062
+Hornbeck Offshore Services, Inc................ 800 12,600
+Landmark Graphics Corp......................... 1,200 30,600
+Mesa, Inc...................................... 4,400 20,900
+Newfield Exploration Co........................ 1,100 31,213
+Noble Drilling Corp............................ 5,800 42,775
+Offshore Logistics, Inc........................ 1,200 16,800
Piedmont Natural Gas Company, Inc............... 1,900 39,425
+Pool Energy Services Co........................ 900 7,425
+Pride Petroleum Services, Inc.................. 1,500 11,250
Production Operators Corp....................... 500 15,750
+Seitel, Inc.................................... 600 18,600
--------------
282,400
--------------
RAILROADS -- 0.1%
+RailTex, Inc................................... 500 11,875
--------------
REAL ESTATE DEVELOPMENT -- 0.3%
AMRESCO, Inc.................................... 1,200 11,250
+Toll Brothers, Inc............................. 2,300 37,088
--------------
48,338
--------------
RESTAURANTS -- 1.2%
Applebee's International, Inc................... 1,900 48,925
+Au Bon Pain, Inc. (Class 'A' Stock)............ 700 8,487
+Bertucci's, Inc................................ 600 4,613
+Checkers Drive-In Restaurants, Inc............. 3,500 6,781
+Cheesecake Factory, Inc........................ 700 18,025
+Flagstar Companies, Inc........................ 2,600 14,625
+Foodmaker, Inc................................. 2,700 14,850
+Fresh Choice, Inc.............................. 400 4,200
+IHOP Corp...................................... 500 12,875
+Showbiz Pizza Time, Inc........................ 600 6,975
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
+Sonic Corp..................................... 500 $ 13,750
+Taco Cabana (Class 'A' Stock).................. 800 4,400
TCBY Enterprises, Inc........................... 1,800 10,800
+TPI Enterprises, Inc........................... 1,400 5,863
+Triarc Companies, Inc. (Class 'A' Stock)....... 2,100 32,812
--------------
207,981
--------------
RETAIL -- 4.4%
Arbor Drugs, Inc................................ 1,550 24,800
Big B, Inc...................................... 1,200 16,950
+Bombay Company, Inc............................ 2,500 19,688
+Books-A-Million, Inc........................... 1,100 17,188
+Caldor Corp.................................... 1,100 19,663
Casey's General Stores, Inc..................... 1,800 32,400
Cash America International, Inc................. 2,000 14,750
Cato Corp. (Class 'A' Stock).................... 1,700 13,813
+Chico's FAS, Inc............................... 500 2,125
+CompUSA, Inc................................... 1,300 43,225
+Damark International, Inc...................... 600 3,525
+Designs, Inc................................... 1,100 9,763
+Dress Barn, Inc................................ 1,400 13,650
+Eagle Hardware & Garden, Inc................... 1,400 9,625
+Fabri-Centers of America, Inc.................. 600 12,450
Fastenal Co..................................... 2,600 71,013
Fay's, Inc...................................... 1,400 10,675
+Filene's Basement Corp......................... 1,400 4,900
+Forschner Group, Inc........................... 400 4,200
+Gottschalks, Inc............................... 700 4,637
Hechinger Co. (Class 'A' Stock)................. 2,600 18,687
+Hi-Lo Automotive, Inc.......................... 600 6,300
J. Baker, Inc................................... 700 7,087
+Lechters, Inc.................................. 900 13,950
+Levitz Furniture, Inc.......................... 2,000 14,000
Lillian Vernon Corp............................. 700 12,862
Medicine Shoppe International, Inc.............. 500 17,562
+Michaels Stores, Inc........................... 1,500 31,875
+MicroAge, Inc.................................. 1,000 14,250
+Musicland Stores Corp.......................... 2,400 24,600
Oshkosh B' Gosh, Inc. (Class 'A' Stock)......... 800 12,800
+Payless Cashways, Inc.......................... 2,700 17,212
Pier 1 Imports, Inc............................. 2,700 24,975
+Proffitt's, Inc................................ 700 20,825
Ross Stores, Inc................................ 1,300 15,275
Russ Berrie & Company, Inc...................... 1,400 19,425
+Shoe Carnival, Inc............................. 800 4,600
Shopko Stores, Inc.............................. 2,200 23,650
+Sports & Recreation, Inc....................... 1,400 18,375
+Stein Mart, Inc................................ 1,200 16,200
Strawbridge & Clothier (Class 'A' Stock)........ 600 12,000
+Tyco Toys, Inc................................. 2,400 16,500
Venture Stores, Inc............................. 1,200 11,850
+Whole Foods Market, Inc........................ 800 12,200
+Williams-Sonoma, Inc........................... 1,600 35,200
--------------
771,300
--------------
STEEL -- 0.8%
+Acme Metals, Inc............................... 600 9,450
Birmingham Steel Corp........................... 2,000 37,000
+Material Sciences Corp......................... 1,000 20,375
+Northwestern Steel and Wire Co................. 1,700 13,813
+NS Group, Inc.................................. 900 3,037
Quanex Corp..................................... 800 19,800
Steel Technologies, Inc......................... 700 8,050
+WHX Corp....................................... 1,800 21,150
--------------
132,675
--------------
</TABLE>
B43
<PAGE>
SMALL CAPITALIZATION STOCK PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
TELECOMMUNICATIONS -- 2.6%
+Aspect Telecommunications Corp................. 600 $ 26,850
+California Microwave, Inc...................... 1,100 27,569
+Cellular Communications, Inc. (Class 'A'
Stock)........................................ 800 36,400
+Centigram Communications, Inc. (Class 'A'
Stock)........................................ 400 5,700
+CommNet Cellular, Inc.......................... 800 22,400
+Compression Labs, Inc.......................... 1,000 9,750
+Digi International, Inc........................ 900 20,475
+Digital Microwave Corp......................... 800 10,100
+Geotek Communications, Inc..................... 3,500 30,187
+InterVoice, Inc................................ 900 15,750
+Network Equipment Technologies, Inc............ 1,200 28,500
+PictureTel Corp................................ 900 43,313
+Symmetricom, Inc............................... 1,000 21,750
+U.S. Robotics Corp............................. 1,400 152,600
--------------
451,344
--------------
TEXTILES -- 1.4%
+Ashworth, Inc.................................. 800 6,600
+Cone Mills Corp................................ 1,900 24,463
Delta Woodside Industries, Inc.................. 1,600 12,200
Dixie Yarns, Inc................................ 800 5,400
+Fieldcrest Cannon, Inc......................... 600 12,975
G & K Services, Inc. (Class 'A' Stock).......... 800 15,600
+Galey & Lord, Inc.............................. 800 11,100
Guilford Mills, Inc............................. 900 21,937
Haggar Corp..................................... 400 7,800
+Hartmarx Corp.................................. 2,000 10,000
Johnston Industries, Inc........................ 700 5,513
+Nautica Enterprises, Inc....................... 900 32,625
Oxford Industries, Inc.......................... 600 10,950
Phillips-Van Heusen Corp........................ 1,800 27,900
+Pillowtex Corp................................. 700 7,175
St. John Knits, Inc............................. 600 26,925
+Tultex Corp.................................... 2,000 11,250
--------------
250,413
--------------
TRUCKING/SHIPPING -- 1.6%
+American Freightways, Inc...................... 1,900 38,950
Arkansas Best Corp.............................. 1,200 10,800
Comair Holdings, Inc............................ 1,300 49,238
+Heartland Express, Inc......................... 800 20,400
+Kirby Corp..................................... 1,900 30,163
+Landstar Systems, Inc.......................... 800 20,600
+M.S. Carriers, Inc............................. 800 15,200
Rollins Truck Leasing Corp...................... 3,200 34,400
TNT Freightways Corp............................ 1,500 29,812
Werner Enterprises, Inc......................... 1,500 30,000
--------------
279,563
--------------
UTILITY - ELECTRIC -- 1.4%
Bangor Hydro-Electric Co........................ 500 5,125
Central Hudson Gas & Electric Corp.............. 1,200 32,400
Central Vermont Public Service Corp............. 800 11,100
Commonwealth Energy System...................... 700 26,425
Eastern Utilities Associates.................... 1,400 31,675
Green Mountain Power Corp....................... 300 7,538
Interstate Power Co............................. 700 16,888
Orange & Rockland Utilities, Inc................ 900 30,375
Sierra Pacific Resources........................ 2,000 43,500
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
TNP Enterprises, Inc............................ 700 $ 11,287
United Illuminating Co.......................... 1,000 33,000
--------------
249,313
--------------
TOTAL COMMON STOCKS
(Cost $15,149,784)............................................. 15,890,170
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 16.8% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS -- 16.5%
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. $ 2,873,000 $ 2,873,000
--------------
U. S. GOVERNMENT & AGENCY OBLIGATIONS -- 0.3%
United States Treasury Bills,
+5.400%, 09/14/95............................. 50,000 49,452
--------------
TOTAL SHORT-TERM INVESTMENTS..................................... 2,922,452
--------------
##
VARIATION MARGIN ON OPEN FUTURES CONTRACTS -- 0.0%...............
(3,250)
--------------
LIABILITIES -- (7.8%)
(net of other assets).......................................... (1,356,313)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 17,453,059
--------------
--------------
+No dividend was paid on this security during the 12 months ending June 30, 1995.
+Entire amount pledged as collateral for futures transactions (See Note 2).
##Open futures contracts as of June 30, 1995 are as follows:
PAR VALUE
COVERED BY CONTRACT TYPE EXPIRATION DATE VALUE OF CONTRACTS
$1,362,450 S&P 500 Index Futures Sept 95 $1,367,875
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B44
<PAGE>
GLOBAL EQUITY PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS -- 98.5% SHARES VALUE
------------- --------------
<S> <C> <C>
AUSTRALIA -- 7.2%
Brambles Industries, Ltd.
(Miscellaneous - Basic Industry).............. 393,500 $ 3,728,833
Broken Hill Proprietary Co., Ltd.
(Metals - Diversified)........................ 422,177 5,194,153
BTR Nylex, Ltd.
(Miscellaneous - Basic Industry).............. 1,753,644 3,350,935
Coca-Cola Amatil, Ltd.
(Foods)....................................... 984,418 6,083,746
Publishing and Broadcasting, Ltd.
(Media)....................................... 152,400 453,598
Western Mining Corp. Holdings, Ltd.
(Metals - Diversified)........................ 1,370,812 7,536,872
--------------
26,348,137
--------------
BELGIUM -- 1.1%
Bekaert, SA
(Miscellaneous - Basic Industry).............. 4,900 3,910,217
--------------
FEDERAL REPUBLIC OF GERMANY -- 1.8%
Bilfinger & Berger Bau, AG
(Construction)................................ 4,444 2,053,625
Linde, AG
(Machinery)................................... 8,040 4,771,513
--------------
6,825,138
--------------
FINLAND -- 5.3%
Kymmene Corp.
(Forest Products)............................. 101,400 3,162,860
Nokia Corp. (Class 'A' Stock)
(Telecommunications).......................... 279,700 16,399,206
--------------
19,562,066
--------------
FRANCE -- 7.1%
Carrefour Supermarche
(Retail)...................................... 9,400 4,821,508
Guyenne et Gascogne
(Retail)...................................... 3,100 895,815
Imetal
(Mineral Resources)........................... 41,180 4,844,956
**Lafarge
(Construction)................................ 1,100 85,643
Lafarge
(Construction)................................ 56,810 4,423,083
Legrand
(Electrical Equipment)........................ 33,000 5,244,853
Plastic Omnium
(Autos - Cars & Trucks)....................... 7,265 736,285
Valeo, SA
(Autos - Cars & Trucks)....................... 105,785 5,150,870
--------------
26,203,013
--------------
HONG KONG -- 3.8%
Cdl Hotels International, Ltd.
(Real Estate Development)..................... 4,887,174 2,384,280
Guoco Group, Ltd.
(Financial Services).......................... 1,553,000 7,245,380
Hung Hing Printing Group, Ltd.
(Miscellaneous - Basic Industry).............. 3,452,000 753,946
Hutchison Whampoa, Ltd.
(Miscellaneous - Basic Industry).............. 761,000 3,688,063
--------------
14,071,669
--------------
INDONESIA -- 0.5%
PT Kabelmetal Indonesia (Foreign)
(Telecommunications).......................... 1,099,400 1,851,257
--------------
JAPAN -- 13.2%
Aiwa
(Electronics)................................. 222,000 5,373,081
Autobacs Seven
(Retail)...................................... 53,800 5,240,260
Daibiru Corp.
(Real Estate Development)..................... 170,000 1,982,999
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
DDI Corp.
(Telecommunications).......................... 460 $ 3,693,034
Keyence Corp.
(Electrical Equipment)........................ 41,000 4,598,583
Kyocera Corp.
(Electrical Equipment)........................ 81,000 6,675,089
Murata Manufacturing Co., Ltd.
(Electronics)................................. 500 18,949
Nichiei Co., Ltd.
(Financial Services).......................... 96,300 5,946,269
Nintendo Corp. Ltd.
(Other Technology)............................ 97,000 5,577,214
Nissen Co., Ltd.
(Retail)...................................... 68,520 2,062,881
Omron Corp.
(Electronics)................................. 208,000 3,978,276
Sony Music Entertainment
(Leisure)..................................... 82,600 3,500,992
--------------
48,647,627
--------------
MALAYSIA -- 4.7%
I.J.M. Corp. Berhad
(Construction)................................ 1,098,000 4,369,835
Renong Berhad
(Miscellaneous - Basic Industry).............. 2,727,000 5,079,629
Resorts World Berhad
(Leisure)..................................... 670,000 3,930,989
Technology Resources Industries Berhad
(Miscellaneous - Basic Industry).............. 1,402,000 4,026,587
United Merchant Group Berhad
(Financial Services).......................... 666 1,098
--------------
17,408,138
--------------
MEXICO -- 1.4%
Apasco SA de CV
(Miscellaneous - Basic Industry).............. 469,700 1,862,280
Cifra, SA de CV (Class 'B' Stock)
(Retail)...................................... 1,387,800 1,908,086
Fomento Economico Mexicano, SA de CV (Class 'B'
Stock)
(Miscellaneous - Basic Industry).............. 665,100 1,552,432
--------------
5,322,798
--------------
NETHERLANDS -- 1.4%
Heineken, N.V.
(Beverages)................................... 34,225 5,186,032
--------------
NEW ZEALAND -- 1.5%
Fletcher Challenge, Ltd.
(Forest Products)............................. 1,967,800 5,522,926
--------------
REPUBLIC OF KOREA -- 2.3%
Pohang Iron & Steel Co., Ltd.
(Steel)....................................... 4,000 345,006
Samsung Electronics Co.
(Electronics)................................. 41,530 6,682,044
Samsung Electronics Co. (New)
(Electronics)................................. 5,810 923,317
Shinsegae Department Store
(Retail)...................................... 4,900 368,994
Shinsegae Department Store (New)
(Retail)...................................... 1,454 101,631
--------------
8,420,992
--------------
SINGAPORE -- 5.6%
Fraser & Neave, Ltd.
(Beverages)................................... 318,000 3,664,066
I.J.M. Corp. Berhad
(Construction)................................ 810,000 3,223,189
Overseas Union Bank, Ltd. (Foreign)
(Banks and Savings & Loans)................... 925,000 5,825,521
Sembawang Maritime, Ltd.
(Trucking/Shipping)........................... 883,500 3,667,287
</TABLE>
B45
<PAGE>
GLOBAL EQUITY PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
United Overseas Bank, Ltd. (Foreign)
(Banks and Savings & Loans)................... 227,200 $ 2,146,311
Wing Tai Holdings, Ltd.
(Miscellaneous - Basic Industry).............. 1,070,250 2,060,382
--------------
20,586,756
--------------
SPAIN -- 3.4%
Acerinox, SA
(Steel)....................................... 38,360 4,720,534
Banco Popular Espanol, SA
(Banks and Savings & Loans)................... 23,800 3,545,284
Centros Commerciales Pryca, SA
(Retail)...................................... 116,762 2,174,132
Dragados Y Construcciones, SA
(Construction)................................ 141,500 2,060,965
--------------
12,500,915
--------------
SWEDEN -- 4.8%
Astra, AB (Series 'B' Free)
(Drugs and Hospital Supplies)................. 181,350 5,467,246
Hennes & Mauritz (Series 'B' Free)
(Retail)...................................... 71,000 4,163,657
Mo Och Domsjo, AB (Series 'B' Free)
(Forest Products)............................. 64,700 3,736,312
Volvo, AB (Series 'B' Free)
(Autos - Cars & Trucks)....................... 237,800 4,533,865
--------------
17,901,080
--------------
THAILAND -- 1.0%
Land & House Public Co., Ltd. (Foreign)
(Construction)................................ 30,700 646,709
Sahaviriya Steel Industry
(Metals - Diversified)........................ 54,300 133,083
Sahaviriya Steel Industry (Foreign)
(Metals - Diversified)........................ 1,255,400 3,076,836
--------------
3,856,628
--------------
UNITED KINGDOM -- 9.2%
Barclays, PLC
(Banks and Savings & Loans)................... 294,000 3,165,437
Britannic Assurance, PLC
(Insurance)................................... 28,000 244,122
British Sky Broadcasting Group, PLC
(Media)....................................... 738,900 3,232,876
Carlton Communications
(Communications).............................. 229,300 3,481,209
Commercial Union, PLC
(Insurance)................................... 324,000 3,021,078
GKN, PLC
(Autos - Cars & Trucks)....................... 536,170 5,477,994
**Guest Kean & Nettlefolds, PLC
(Autos - Cars & Trucks)....................... 22,870 233,660
J. Sainsbury, PLC
(Retail)...................................... 356,700 2,510,122
Siebe, PLC
(Machinery)................................... 596,340 5,978,684
Vodafone Group, PLC
(Telecommunications).......................... 1,790,700 6,664,549
--------------
34,009,731
--------------
UNITED STATES -- 23.2%
+Applied Materials, Inc.
(Electrical Equipment)........................ 67,600 5,855,850
Mattel, Inc.
(Leisure)..................................... 280,887 7,303,062
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
McDonald's Corp.
(Restaurants)................................. 125,100 $ 4,894,538
MCI Communications Corp.
(Telecommunications).......................... 251,800 5,539,600
+Microsoft Corp.
(Computer Services)........................... 95,700 8,648,888
+Mirage Resorts, Inc.
(Leisure)..................................... 157,000 4,808,125
Mobil Corp.
(Petroleum)................................... 63,700 6,115,200
Motorola, Inc.
(Electronics)................................. 139,100 9,337,088
+Nextel Communications, Inc. (Class 'A' Stock)
(Telecommunications).......................... 218,300 3,083,487
Norwest Corp.
(Banks and Savings & Loans)................... 203,600 5,853,500
+Oracle Corp.
(Computer Services)........................... 132,000 5,098,500
Pohang Iron & Steel Co., Ltd., ADR
(Steel)....................................... 53,900 1,590,050
+Silicon Graphics, Inc.
(Computer Services)........................... 207,300 8,266,087
Time Warner, Inc.
(Media)....................................... 135,800 5,584,775
+Viacom, Inc. (Class 'A' Stock)
(Media)....................................... 77,600 3,608,400
--------------
85,587,150
--------------
TOTAL COMMON STOCKS
(Cost $320,035,926)............................................ 363,722,270
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 0.6% SHARES VALUE
------------- --------------
<S> <C> <C>
FEDERAL REPUBLIC OF GERMANY
Krones, AG
(Machinery)................................... 4,368 2,083,312
--------------
(Cost $3,406,550)
<CAPTION>
MARKET
RIGHTS AND WARRANTS -- 0.9% SHARES VALUE
------------- --------------
<S> <C> <C>
AUSTRALIA -- 0.1%
Coca-Cola Amatil Ltd. (Rights),
(Foods)....................................... 246,104 297,194
--------------
FEDERAL REPUBLIC OF GERMANY -- 0.1%
)Nissen Co., Ltd. (Warrants),
(Retail)...................................... 316 373,689
--------------
FRANCE -- 0.0%
**Lafarge (Warrants),
(Construction)................................ 1,000 2,580
--------------
SINGAPORE -- 0.6%
United Overseas Bank Ltd. (Warrants),
(Banks and Savings & Loans)................... 486,800 2,299,349
--------------
SWITZERLAND -- 0.1%
\Nitori Co., Ltd. (Warrants),
(Furniture)................................... 2,950 161,580
--------------
UNITED STATES -- 0.0%
#Autobacs Seven Warrants 96 #2,
(Retail)...................................... 35 36,313
--------------
TOTAL RIGHTS AND WARRANTS
(Cost $3,610,315).............................................. 3,170,705
--------------
</TABLE>
B46
<PAGE>
GLOBAL EQUITY PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 0.0% AMOUNT VALUE
------------- --------------
<S> <C> <C>
UNITED STATES
'First Boston,
6.130%, 7/3/95................................ $ 134,000 $ 134,000
--------------
+UNREALIZED APPRECIATION ON FORWARD FOREIGN EXCHANGE CONTRACTS -
0.0%........................................................... 57,592
LIABILITIES -- 0.0%
(net of other assets).......................................... (45,167)
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 369,122,712
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
AB Aktiebolag (Swedish Stock Company)
ADR American Depository Receipt
AG Aktiengesellschaft (West German Stock Company)
CV Corporation of Variable Capital
N.V. Naamloze Vennootschap (Dutch Corporation)
PLC Public Limited Company (British Corporation)
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
#These are American warrants with an underlying Japanese security.
)These are German warrants with an underlying Japanese security.
\These are Swiss warrants with an underlying Japanese security.
**Indicates a restricted security; the aggregate cost of the restricted
securities is $321,883. The aggregate value, 216,115 is approximately .1%
of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
+Forward Foreign Exchange Contracts as of June 30, 1995:
FOREIGN
CURRENCY
SOLD
JAPANESE EXPIRATION
YEN DATE UNREALIZED APPRECIATION/(DEPRECIATION)
$1,125,000,000 May 15, 1996 $ (44,702)
415,000,000 May 30, 1996 102,294
$ 57,592
'First Boston, 6.130%, entered 06/30/95; maturing 07/03/95 in the amount of
$134,000; Collateralized by $445,076 United States Treasury Bonds, 7.500%,
11/15/16; $86,000 United States Treasury Bonds, 7.250%, 5/16/16.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B47
<PAGE>
NATURAL RESOURCES PORTFOLIO
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
MARKET
COMMON STOCKS -- 90.9% SHARES VALUE
<CAPTION>
------------- --------------
<S> <C> <C>
ALUMINUM -- 1.0%
Comalco, Ltd., ADR.............................. 142,000 $ 2,566,664
--------------
CHEMICALS - SPECIALTY -- 2.3%
IMC Global, Inc................................. 116,000 6,278,500
--------------
CONSTRUCTION -- 2.0%
+J. Ray McDermott, SA........................... 238,000 5,265,750
--------------
DIVERSIFIED GAS -- 12.1%
Apache Corporation.............................. 140,000 3,832,500
+Arethusa (Off-Shore) Ltd....................... 150,000 2,700,000
+Basin Exploration, Inc......................... 130,000 771,875
+Beau Canada Exploration, Ltd. (Class 'A'
Stock)........................................ 831,900 1,060,208
Cross Timbers Oil Co............................ 224,900 3,570,287
+Rigel Energy Corp.............................. 335,400 3,165,338
Sonat Offshore Drilling, Inc.................... 147,000 4,226,250
+Talisman Energy, Inc........................... 350,000 6,499,654
USX-Delhi Group................................. 146,500 1,684,750
Western Gas Resources, Inc...................... 300,300 5,180,175
--------------
32,691,037
--------------
FOREST PRODUCTS -- 7.0%
+Asia Pacific Resource International Holdings
Ltd........................................... 464,900 4,242,213
Fletcher Challenge, Ltd., ADR................... 348,300 4,658,512
Rayonier, Inc................................... 208,600 7,405,300
+Timberwest Forest, Ltd......................... 257,600 2,626,370
--------------
18,932,395
--------------
GAS PIPELINES -- 3.7%
+Global Marine, Inc............................. 206,500 1,187,375
+Reading & Bates Offshore Drilling Co........... 282,600 2,614,050
+Seagull Energy Corp............................ 170,400 2,811,600
+Tejas Gas Corp................................. 70,450 3,496,081
--------------
10,109,106
--------------
METALS - DIVERSIFIED -- 4.5%
Cameco Corporation.............................. 175,000 5,288,934
+Stillwater Mining Co........................... 242,900 6,755,656
--------------
12,044,590
--------------
MINERAL RESOURCES -- 26.6%
Agnico-Eagle Mines, Ltd......................... 510,000 6,757,500
Barrick Gold Corporation........................ 254,653 6,429,987
Battle Mountain Gold Co......................... 162,300 1,562,137
+Cominco, Ltd................................... 144,000 2,646,000
CRA, Ltd., ADR.................................. 69,200 3,755,352
Freeport-McMoRan Copper & Gold, Inc. (Class 'A'
Stock)........................................ 162,300 3,347,438
M.I.M. Holdings, Ltd., ADR...................... 840,000 2,072,028
Newmont Mining Corp............................. 126,307 5,289,106
Pegasus Gold, Inc............................... 172,000 1,741,500
Placer Dome, Inc................................ 199,700 5,217,163
Potash Corp. of Saskatchewan, Inc............... 210,400 11,756,100
Sante Fe Pacific Gold Corp...................... 487,700 5,913,363
+TVX Gold, Inc.................................. 600,000 4,350,000
Vigoro Corp..................................... 164,000 6,806,000
Western Mining Corp. Holdings, Ltd., ADR........ 187,500 4,125,000
--------------
71,768,674
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 1.0%
+Enterra Corp................................... 128,500 2,698,500
TJ International, Inc........................... 6,700 125,625
--------------
2,824,125
--------------
</TABLE>
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
COMMON STOCKS (CONTINUED) SHARES VALUE
------------- --------------
<S> <C> <C>
PETROLEUM -- 11.1%
Anadarko Petroleum Corp......................... 95,000 $ 4,096,875
Cabot Oil & Gas Corp. (Class 'A' Stock)......... 129,900 1,786,125
Elf Aquitaine, ADR.............................. 272,783 10,161,168
NGC Corp........................................ 522,888 5,490,324
+Northstar Energy Corp.......................... 429,900 3,482,968
Parker & Parsley Petroleum Co................... 145,000 2,845,625
+Stolt Comex Seaway, SA......................... 220,000 2,145,000
--------------
30,008,085
--------------
PETROLEUM SERVICES -- 19.6%
Baker Hughes, Inc............................... 32,800 672,400
+Cairn Energy USA, Inc.......................... 250,000 2,750,000
Camco International, Inc........................ 131,600 3,076,150
+Coflexip, ADR.................................. 172,000 4,364,500
+Crestar Energy, Inc............................ 20,000 207,552
**+Crestar Energy, Inc.......................... 220,000 2,283,072
+Dreco Energy Services, Ltd. (Class 'A'
Stock)........................................ 88,100 1,277,450
+ENSCO International, Inc....................... 185,000 2,936,875
+Hornbeck Offshore Services, Inc................ 187,200 2,948,400
+ICO, Inc....................................... 192,300 1,105,725
+Marine Drilling Co., Inc....................... 1,013,000 3,988,688
+Mesa, Inc...................................... 440,900 2,094,275
+Newfield Exploration Co........................ 197,000 5,589,875
Noble Affiliates, Inc........................... 250,800 6,395,400
+Noble Drilling Corp............................ 140,600 1,036,925
+Offshore Logistics, Inc........................ 65,700 919,800
+Oryx Energy Co................................. 117,100 1,610,125
+PetroCorp, Inc................................. 217,500 1,794,375
+Pride Petroleum Services, Inc.................. 360,000 2,700,000
+Varco International, Inc....................... 157,400 1,298,550
+Western Atlas, Inc............................. 85,600 3,798,500
--------------
52,848,637
--------------
TOTAL COMMON STOCKS
(Cost $213,132,764)............................................ 245,337,563
--------------
<CAPTION>
MARKET
PREFERRED STOCKS -- 4.9% SHARES VALUE
------------- --------------
<S> <C> <C>
MINERAL RESOURCES -- 1.6%
Amax Gold, Inc. (Conv.), Series B............... 50,000 2,412,500
Battle Mountain Gold Co. (Conv.)................ 12,000 663,000
Freeport - McMoRan Copper & Gold, Inc........... 60,000 1,170,000
--------------
4,245,500
--------------
MISCELLANEOUS - BASIC INDUSTRY -- 1.6%
Hecla Mining Co. (Conv.), Series B.............. 87,000 4,295,625
--------------
PETROLEUM SERVICES -- 1.7%
Noble Drilling Corp. (Conv.).................... 150,000 3,562,500
Reading & Bates Corp. (Cum. Conv.).............. 39,900 1,137,150
--------------
4,699,650
--------------
TOTAL PREFERRED STOCKS
(Cost $13,249,296)............................................. 13,240,775
--------------
<CAPTION>
MARKET
RIGHTS AND WARRANTS -- 0.1% SHARES VALUE
------------- --------------
<S> <C> <C>
PETROLEUM SERVICES
BJ Services Co. (Warrants)...................... 32,440 137,870
--------------
(Cost $56,770)
</TABLE>
B48
<PAGE>
NATURAL RESOURCES PORTFOLIO (CONTINUED)
JUNE 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR MARKET
CONVERTIBLE BONDS -- 2.1% VALUE VALUE
------------- --------------
<S> <C> <C>
INDUSTRIAL
Coeur d'Alene Mines Corp.,
6.375%, 01/31/04.............................. $ 4,319,000 $ 3,887,100
7.000%, 11/30/02.............................. 1,465,000 1,772,650
--------------
5,659,750
--------------
TOTAL CONVERTIBLE BONDS
(Cost $5,586,235).............................................. 5,659,750
--------------
<CAPTION>
PRINCIPAL
SHORT-TERM INVESTMENTS -- 1.6% AMOUNT VALUE
------------- --------------
<S> <C> <C>
REPURCHASE AGREEMENTS
Joint Repurchase Agreement Account,
6.102%, 07/03/95 (see Note 4)................. 4,423,000 4,423,000
--------------
OTHER ASSETS -- 0.4%
(net of liabilities)........................................... 972,390
--------------
TOTAL NET ASSETS -- 100.0%....................................... $ 269,771,348
--------------
--------------
<FN>
The following abbreviations are used in portfolio descriptions:
ADR American Depository Receipt
SA Sociedad Anonima (Spanish Corporation) or Societe
Anonyme (French Corporation)
**Indicates a restricted security; the aggregate cost of the restricted
securities is $2,797,065. The aggregate value, $2,283,072 is approximately
0.9% of net assets. (See Note 2)
+No dividend was paid on this security during the 12 months ending June 30,
1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS ON PAGES C1 THROUGH C13.
B49
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS OF
THE PRUDENTIAL SERIES FUND, INC.
FOR THE PERIODS ENDED JUNE 30, 1995 (UNAUDITED) AND DECEMBER 31, 1994
NOTE 1: GENERAL
The Prudential Series Fund, Inc. ("Series Fund"), a Maryland corporation,
organized on November 15, 1982, is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended. The
Series Fund is composed of sixteen Portfolios, each with a separate series of
capital stock. Shares in the Series Fund are currently sold only to certain
separate accounts of The Prudential Insurance Company of America ("The
Prudential"), Pruco Life Insurance Company and Pruco Life Insurance Company of
New Jersey (together referred to as the "Companies") to fund benefits under
certain variable life insurance and variable annuity contracts issued by the
Companies.
The Zero Coupon Bond Portfolio 1995 will be liquidated on November 15, 1995. On
that date, all shares held will be redeemed and unless otherwise directed, the
redemption proceeds will be transferred to the Money Market Portfolio in
accordance with the prospectus.
The shareholders of Pruco Life Series Fund, Inc. ("Pruco Fund") and the Series
Fund approved the merger of the Pruco Fund into the Series Fund as of November
1, 1986. The merger combined five portfolios with identical investment
strategies (Money Market, Bond, Common Stock, Aggressively Managed Flexible and
Conservatively Managed Flexible) of the Pruco Fund with their counterpart in the
Series Fund. The merger was effected by converting the net assets of the Pruco
Fund at the merger date into shares of the Series Fund at the share price of
that day and was accounted for as a pooling of interest.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SECURITIES VALUATION: Equity securities are valued at market. Securities traded
on a national securities exchange are valued at the last sales price on such
exchange as of the close of the New York Stock Exchange or, in the absence of
recorded sales, at the mean between the most recently quoted bid and asked
prices. For any securities not traded on a national securities exchange but
traded in the over-the-counter market, the securities are valued at the mean
between the most recently quoted bid and asked prices, except that securities
for which quotations are furnished through a nationwide automated quotation
system approved by the National Association of Securities Dealers, Inc.
("NASDAQ") are valued at the last sales price or if there was no sale on such
day, at the mean between the most recently quoted bid and asked prices.
Convertible debt securities are valued at the mean between the most recently
quoted bid and asked prices provided by principal market makers. High yield
bonds are valued either by quotes received from principal market makers or by an
independent pricing service which determines prices by analysis of quality,
coupon, maturity and other adjustment factors. Long-term bonds are valued at
market, based on valuation prices by an independent pricing service which
determines prices by analysis of quality, coupon, maturity and other adjustment
factors. Short-term investments are valued at amortized cost, which with accrued
interest approximates market value. Amortized cost is computed using the cost on
the date of purchase adjusted for constant amortization of discount or premium
to maturity. The interest rates shown for Commercial Paper, Promissory Notes,
and certain U.S. Government Agency Obligations on the Schedules of Investments
are the discount rates paid at the time of purchase. Any security for which a
quotation is unavailable is valued at fair value as determined in good faith by
or under the direction of the Series Fund's Board of Directors.
The ability of issuers of debt securities held by specific Portfolios of the
Series Fund to meet their obligations may be affected by economic developments
in a specific country or industry.
Each portfolio, other than the Money Market Portfolio, may invest up to 15% of
its net assets in securities which are subject to legal or contractual
restrictions on resale or for which no readily available market exists
("restricted securities"). The Money Market Portfolio may invest up to 10% of
its net assets in restricted securities. Restricted securities are valued
pursuant to the valuation procedures noted above.
DERIVATIVE FINANCIAL INSTRUMENTS: The Series Fund may engage in various
portfolio strategies to seek increased returns by hedging the portfolios against
adverse movements in the equity, debt, and currency markets. Losses may arise
due to changes in the value of the contract or if the counterparty does not
perform under the contract.
OPTION WRITING: When the Series Fund sells an option, an amount equal to the
premium received is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received
C1
<PAGE>
from writing options which expire unexercised are treated on the expiration date
as gains from the sale of securities. As to options which are closed, the
difference between the premium and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a
gain, or if the premium received is less than the amount paid for the closing
purchase transaction, as a loss. If a call option is exercised, the premium is
added to the proceeds from the sale in determining whether a gain or loss has
been realized.
The Series Fund's use of written options involves, to varying degrees, elements
of market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts reflect the extent of the Series
Fund's involvement in these financial instruments. Risks arise from the possible
movements in foreign exchange rates and securities values underlying these
instruments.
STOCK INDEX FUTURES: Portfolios of the Fund may attempt to reduce the risk of
investment in equity securities by hedging a portion of their equity portfolios
through the use of stock index futures traded on a commodities exchange or board
of trade. A stock index futures contract is an agreement in which the seller of
the contract agrees to deliver to the buyer an amount of cash equal to a
specific dollar amount times the difference between the value of a specific
stock index at the close of the last trading day of the contract and the price
at which the agreement was made. Upon entering into a futures contract, a
Portfolio is required to pledge to the broker liquid assets equal to the minimum
"initial margin," approximately 5% of the contract amount. The Portfolio further
agrees to receive or pay to the broker an amount of cash equal to the futures
contract's daily fluctuation in value. These receipts or payments are known as
the "variation margin" and are recorded as unrealized gains or losses. When a
futures contract is closed, the Portfolio records a realized gain or loss equal
to the difference between the value of the contract at the time it was opened
and the value at the time it was closed.
FOREIGN CURRENCY TRANSACTIONS: The books and records of the Series Fund are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, other assets and liabilities at the
mid daily rate of exchange as reported by a major New York City bank;
(ii) purchases and sales of investment securities, income and expenses at the
rate of exchange prevailing on the respective dates of such transactions.
Since the net assets of the Series Fund are presented at the foreign exchange
rates and market values at the close of the fiscal period, it is not practical
to isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the fluctuations arising from change
in the market prices of securities held at the end of the fiscal period.
Similarly, it is not practical to isolate the effect of changes in foreign
exchange rates from the fluctuations arising from changes in the market prices
of equities sold during the fiscal year.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of government supervision and regulation of foreign security markets.
The Global Equity Portfolio may invest up to 100% of its total assets in common
stock and convertible securities denominated in a foreign currency and issued by
foreign or domestic issuers. The Bond and High Yield Bond Portfolios may each
invest up to 20% of their assets in United States currency denominated debt
securities issued outside the United States by foreign or domestic issuers. In
addition, the bond components of the Conservatively Managed Flexible and
Aggressively Managed Flexible Portfolios may each invest up to 20% of their
assets in such securities. Further, Conservatively Managed Flexible,
Aggressively Managed Flexible, and High Dividend Stock Portfolios may invest up
to 30% of their total assets in debt and equity securities denominated in a
foreign currency and issued by foreign or domestic issuers. In addition, Common
Stock, Growth Stock, and Natural Resources Portfolios may invest up to 30% of
their total assets in non-United States currency denominated common stock and
fixed-income securities convertible into common stock of foreign and U.S.
issuers.
Net realized gains and losses on foreign currency transactions represent net
foreign exchange gains and losses from holding of foreign currencies; currency
gains or losses realized between the trade and settlement dates on security
transactions; and the difference between the amounts of the dividends and
foreign taxes recorded on the Series Fund's books and the U.S. dollar equivalent
amounts actually received or paid. Net currency gains and losses from valuing
foreign currency denominated assets and liabilities at fiscal period end
exchange rates are reflected as a component of unrealized loss on foreign
currencies.
C2
<PAGE>
FORWARD FOREIGN EXCHANGE CONTRACTS: The Series Fund is authorized to enter into
forward foreign exchange contracts as a hedge against either specific
transactions or portfolio positions. Such contracts are not entered on the
Series Fund's records. However, the effect on operations is recorded from the
date the Series Fund enters into such contracts. Premium or discount is
amortized over the life of the contracts.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Dividend income is recorded on
the ex-dividend date. Interest income is accrued daily on both long-term bonds
and short-term investments. Interest income also includes net amortization from
the purchase of fixed-income securities. Long-term security and option
transactions are recorded on the first business day following the trade date,
except that transactions on the last business day of the reporting cycle are
recorded on that date. Short-term security and futures transactions are recorded
on trade date. Realized gains and losses from security transactions are
determined and accounted for on the basis of identified cost.
DISTRIBUTIONS AND TAXES: The Portfolios of the Series Fund intend to continue
to qualify for and elect the special tax treatment afforded regulated investment
companies under Subchapter M of the Internal Revenue Code, thereby relieving the
Series Fund of Federal income taxes. To so qualify, the Series Fund intends to
distribute substantially all of its net investment income and net realized
capital gains, if any, less any available capital loss carry forward. As of
December 31, 1994, (based on an October 31 measurement period) the Bond
Portfolio had a net capital loss carry forward of $643,550 (expiring in 2002).
The High Yield Bond Portfolio had a net capital loss carry forward of $5,141,222
($3,756,791 expiring in 1999 and $1,384,431 expiring in 2002). The Global Equity
Portfolio had a net capital loss carry forward of $6,265,350 (expiring in 2002).
Finally, the Zero Coupon Bond 2005 Portfolio had a net capital loss carry
forward of $123,179 (expiring in 2002). These amounts will be available to
offset any future taxable gains.
The Money Market Portfolio declares dividends of net investment income
(including realized and unrealized gains and losses on Portfolio securities) on
each business day. These dividends are reinvested in additional full and
fractional shares of the Portfolio. This policy enables the Money Market
Portfolio to maintain a net asset value of $10.00 per share. Dividends from
investment income of the other Portfolios will normally be declared and
reinvested in additional full and fractional shares four times annually.
Dividends from net realized capital gains are declared and reinvested in
additional full and fractional shares twice a year.
EXPENSES: Each Portfolio pays for certain expenses incurred in its individual
operation, and also pays a portion of the Series Fund's general administrative
expenses allocated on the basis of the asset size of the respective Portfolios.
The Series Fund has an arrangement with Chemical Banking Corporation, a
custodian bank. On a daily basis, cash funds which are not invested earn a
credit which is used to offset custody charges on a Portfolio basis, exclusive
of the Global Equity Portfolio, for which Brown Brothers Harriman & Co. is the
custodian bank. For the six months ended June 30, 1995, the total of the credits
used was:
<TABLE>
<S> <C>
Conservatively Managed Flexible Portfolio..................... $ 14,487
Aggressively Managed Flexible Portfolio....................... 13,113
Money Market Portfolio........................................ 11,394
High Yield Bond Portfolio..................................... 7,032
Bond Portfolio................................................ 1,099
Zero Coupon Bond 2000 Portfolio............................... 605
Natural Resources Portfolio................................... 264
Zero Coupon Bond 2005 Portfolio............................... 167
</TABLE>
NOTE 3: INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT MANAGEMENT AND ACCOUNTING FEES: Pursuant to an investment advisory
agreement (the "Agreement"), The Prudential receives an investment management
fee, calculated daily, at an effective annual rate of 0.35% of the average daily
net assets of the Stock Index Portfolio: 0.40% of the average daily net assets
of the Money Market, Bond, Government Securities, Zero Coupon Bond 1995, Zero
Coupon Bond 2000, Zero Coupon Bond 2005, High Dividend Stock, and Small
Capitalization Stock Portfolios; 0.45% of average daily net assets of the Common
Stock and Natural Resources Portfolios; 0.55% of the average daily net assets of
the Conservatively Managed Flexible and the High Yield Bond Portfolios; 0.60% of
the average daily net assets of the Aggressively Managed Flexible and Growth
Stock Portfolios; and 0.75% of the average daily net assets of the Global Equity
Portfolio. Under the Agreement, The Prudential has agreed to refund to a
portfolio (other
C3
<PAGE>
than the Global Equity Portfolio), the portion of the management fee for that
Portfolio equal to the amount that the aggregate annual ordinary operating
expenses (excluding interest, taxes and brokerage commissions) exceeds 0.75% of
the Portfolio's average daily net assets.
DIRECTORS' EXPENSES: The Series Fund pays for the fees and expenses of those
members of the Series Fund's Board of Directors who are not officers or
employees of The Prudential or its affiliates.
BROKERAGE COMMISSIONS: For the six month period ending June 30, 1995,
Prudential Securities Inc., an indirect, wholly-owned subsidiary of The
Prudential, earned $484,213 in brokerage commissions from Portfolio transactions
executed on behalf of the Series Fund.
OTHER TRANSACTIONS WITH AFFILIATES: As of June 30, 1995, The Prudential had
investments of $11,275,764 in the Growth Stock Portfolio; $10,681,245 in the
Small Capitalization Stock Portfolio; and $1,267,821 in the Global Equity
Portfolio.
NOTE 4: JOINT REPURCHASE AGREEMENT ACCOUNT
The Portfolios of the Series Fund transfer uninvested cash balances into a
single joint account, the daily aggregate balance of which is invested in one or
more repurchase agreements collateralized by U.S. Government obligations. The
Series Fund's undivided investment in the joint repurchase agreement account
represented, in principal, $635,002,000 as of June 30, 1995. The Portfolios of
the Series Fund with cash invested in the joint account had the following
percentage participation in the account:
<TABLE>
<S> <C>
Common Stock Portfolio........................................ 65.89%
Aggressively Managed Flexible Portfolio....................... 10.11%
High Dividend Stock Portfolio................................. 9.72%
Stock Index Portfolio......................................... 4.83%
Conservatively Managed Flexible Portfolio..................... 3.06%
Government Securities Portfolio............................... 2.27%
High Yield Bond Portfolio..................................... .97%
Bond Portfolio................................................ .87%
Zero Coupon Bond 1995 Portfolio............................... .73%
Natural Resources Portfolio................................... .70%
Small Capitalization Stock Portfolio.......................... .45%
Growth Stock Portfolio........................................ .34%
Zero Coupon Bond 2000 Portfolio............................... .05%
Zero Coupon Bond 2005 Portfolio............................... .01%
----------
100.00%
</TABLE>
As of such date, each repurchase agreement in the joint account and the
collateral thereof were as follows:
Bear Stearns Repurchase Agreement, dated 6/30/95, in the principal amount of
$170,000,000, repurchase price $170,086,768, due 7/3/95; collateralized by
$9,945,000 U.S. Treasury Bonds, 12.00%, due 5/15/05; $25,400,000 U.S. Treasury
Bonds, 8.75%, due 5/15/17; $100,000,000 U.S. Treasury Bonds, 8.875%, due
8/15/17.
Morgan Stanley and Company Repurchase Agreement, dated 6/30/95, in the principal
amount of $145,002,000, repurchase price $145,074,870, due 7/3/95;
collateralized by $45,550,000 U.S. Treasury Notes, 5.00%, due 1/31/99;
$79,260,000 U.S. Treasury Notes, 7.375%, due 11/15/97; $18,805,000 U.S. Treasury
Notes, 8.625%, due 8/15/97.
Nomura Securities Repurchase Agreement, dated 6/30/95, in the principal amount
of $150,000,000, repurchase price $150,076,561, due 7/3/95; collateralized by
$143,665,000 U.S. Treasury Notes, 7.75%, due 12/31/99.
Smith Barney Repurchase Agreement, dated 6/30/95, in the principal amount of
$170,000,000, repurchase price $170,086,698, due 7/3/95; collateralized by
$38,530,000 U.S. Treasury Notes, 7.375%, due 11/15/97; $50,000,000 U.S. Treasury
Notes, 6.875%, due 10/31/96; $38,000,000 U.S. Treasury Notes, 9.25%, due
1/15/96; $41,000,000 U.S. Treasury Notes, 9.50%, due 11/15/95.
C4
<PAGE>
NOTE 5: PURCHASE AND SALE OF SECURITIES
The aggregate cost of purchase and the proceeds from the sales of securities
(excluding short-term issues) for the six months ended June 30, 1995 were as
follows:
Cost of Purchases:
<TABLE>
<CAPTION>
ZERO ZERO ZERO CONSERVATIVELY AGGRESSIVELY HIGH
GOVERNMENT COUPON COUPON COUPON MANAGED MANAGED YIELD
BOND SECURITIES 1995 2000 2005 FLEXIBLE FLEXIBLE BOND
------------ ------------ ------------ ----------- ----------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Debt Securities... $737,173,814 $817,150,470 $ 0 $16,200,140 $12,134,537 $2,114,041,085 $2,320,071,155 $280,149,510
Equity
Securities...... $ 0 $ 0 $ 0 $ 0 $ 0 $ 333,620,116 $1,036,861,353 $ 3,167,170
</TABLE>
<TABLE>
<CAPTION>
HIGH SMALL
STOCK DIVIDEND COMMON GROWTH CAPITALIZATION GLOBAL NATURAL
INDEX STOCK STOCK STOCK STOCK EQUITY RESOURCES
------------ ------------ ------------ ----------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Debt Securities... $ 0 $ 48,691,501 $ 0 $ 0 $ 0 $ 0 $ 0
Equity
Securities...... $ 45,168,572 $279,187,615 $295,512,477 $16,349,542 $17,049,831 $ 118,366,013 $ 55,284,167
</TABLE>
Proceeds From Sales:
<TABLE>
<CAPTION>
ZERO ZERO ZERO CONSERVATIVELY AGGRESSIVELY HIGH
GOVERNMENT COUPON COUPON COUPON MANAGED MANAGED YIELD
BOND SECURITIES 1995 2000 2005 FLEXIBLE FLEXIBLE BOND
------------ ------------ ------------ ----------- ----------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Debt Securities... $730,397,021 $831,886,931 $ 13,265,486 $16,435,388 $12,825,478 $1,968,359,775 $2,187,809,579 $244,032,716
Equity
Securities...... $ 0 $ 0 $ 0 $ 0 $ 0 $ 214,856,938 $ 817,036,749 8,472,551
</TABLE>
<TABLE>
<CAPTION>
HIGH SMALL
STOCK DIVIDEND COMMON GROWTH CAPITALIZATION GLOBAL NATURAL
INDEX STOCK STOCK STOCK STOCK EQUITY RESOURCES
------------ ------------ ------------ ----------- ----------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Debt Securities... $ 0 $ 46,456,684 $ 0 $ 0 $ 0 $ 185,142 1,473,430
Equity
Securities...... $ 5,062,818 $222,612,398 $217,400,661 $ 1,248,555 $ 1,931,931 $ 88,454,900 44,630,008
</TABLE>
Transactions in call options during the six months ended June 30, 1995 were as
follows:
<TABLE>
<CAPTION>
BOND
----------------------
NUMBER OF PREMIUMS
CONTRACTS RECEIVED
--------- -----------
<S> <C> <C>
Options outstanding at
December 31, 1994....... 0 $ 0
Options written........... 4,500 239,063
Options terminated in
closing purchase
transactions............ (4,500) (239,063)
Options expired........... 0 0
Options exercised......... 0 0
--------- -----------
Options outstanding at
June 30, 1995........... 0 $ 0
--------- -----------
--------- -----------
</TABLE>
The federal income tax basis and unrealized appreciation/depreciation of the
Fund's investments as of June 30, 1995 were as follows:
<TABLE>
<CAPTION>
ZERO ZERO ZERO
MONEY GOVERNMENT COUPON COUPON COUPON
MARKET BOND SECURITIES 1995 2000 2005
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation... $ 0 $ 19,683,791 $ 24,390,207 $ 56,174 $ 2,149,704 $ 2,142,516
Gross Unrealized Depreciation... 0 (4,827,477) (1,043,035) 0 0 0
Total Net Unrealized............ 0 14,856,314 23,347,172 56,174 2,149,704 2,142,516
Tax Basis....................... $617,586,455 $ 568,846,782 $451,860,188 $ 10,993,290 $21,587,221 $16,498,474
<CAPTION>
HIGH HIGH SMALL
YIELD STOCK DIVIDEND COMMON GROWTH CAPITALIZATION
BOND INDEX STOCK STOCK STOCK STOCK
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Gross Unrealized Appreciation... $ 8,657,797 $ 211,839,975 $111,000,151 $653,802,734 $ 1,489,066 $ 1,084,237
Gross Unrealized Depreciation... (15,037,769) (10,281,048) (24,146,909) (62,246,807) (61,887) (343,851)
Total Net Unrealized............ (6,379,972) 201,558,927 88,853,242 591,555,927 1,427,179 740,386
Tax Basis....................... $342,898,441 $ 631,457,411 $922,233,221 2$,639,342,095 $17,284,396 $18,072,236
<CAPTION>
CONSERVATIVELY AGGRESSIVELY
MANAGED MANAGED
FLEXIBLE FLEXIBLE
--------------- ---------------
<S> <C> <C>
Gross Unrealized Appreciation... $ 285,816,603 $ 422,435,005
Gross Unrealized Depreciation... (67,817,678) (37,718,993)
Total Net Unrealized............ 217,998,925 384,716,012
Tax Basis....................... $3,516,904,743 $3,453,583,650
GLOBAL NATURAL
EQUITY RESOURCES
--------------- ---------------
<S> <C> <C>
Gross Unrealized Appreciation... $ 67,802,486 $ 45,330,872
Gross Unrealized Depreciation... (25,804,268) (12,979,979)
Total Net Unrealized............ 41,998,218 32,350,893
Tax Basis....................... $ 327,198,871 236,448,065
</TABLE>
C5
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS
The following average per share data, ratios and supplemental information by
Portfolio have been derived from information provided in the financial
statements.
<TABLE>
<CAPTION>
MONEY MARKET
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.284 0.402 0.290 0.372 0.596 0.778 0.877 0.717 0.630 0.062
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 0.284 0.402 0.290 0.372 0.596 0.778 0.877 0.717 0.630 0.062
Distributions to
Shareholders:
Distributions from net
investment income...... (0.284) (0.402) (0.290) (0.372) (0.596) (0.778) (0.877) (0.717) (0.630) (0.062)
Distributions from net
realized gains......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.284) (0.402) (0.290) (0.372) (0.596) (0.778) (0.877) (0.717) (0.630) (0.062)
Reverse stock split (10
to 1).................. -- -- -- -- -- -- -- -- -- 9.000
Net increase (decrease)
in Net Asset Value..... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 9.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $10.000 $ 10.000 $ 10.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 2.90 % 4.05 % 2.95 % 3.79 % 6.16 % 8.16 % 9.25 % 7.35 % 6.52 % 6.54 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $607.4 $583.3 $474.7 $528.7 $529.6 $434.2 $236.1 $155.9 $107.2 $52.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.22 % 0.47 % 0.45 % 0.47 % 0.46 % 0.50 % 0.55 % 0.57 % 0.53 % 0.55 %
Ratio of net investment
income to average net
assets................. 2.84 % 4.02 % 2.90 % 3.72 % 5.96 % 7.80 % 8.77 % 7.17 % 6.30 % 6.16 %
Portfolio turnover
rate................... -- -- -- -- -- -- -- -- -- --
Number of shares
outstanding at end of
period (in millions)... 60.7 58.3 47.5 52.9 53.0 43.4 23.6 15.6 10.7 5.2
</TABLE>
<TABLE>
<CAPTION>
BOND
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $10.038 $11.103 $10.829 $11.002 $10.332 $10.321 $ 9.942 $10.038 $ 11.048 $ 10.967
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.377 0.682 0.686 0.761 0.797 0.825 0.886 0.875 0.859 0.904
Net realized gains
(losses)and unrealized
appreciation
(depreciation) on
investments............ 0.836 (1.040) 0.398 0.013 0.842 (0.004) 0.424 (0.069) (0.821) 0.607
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 1.213 (0.358) 1.084 0.774 1.639 0.821 1.310 0.806 0.038 1.511
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.256) (0.683) (0.657) (0.728) (0.779) (0.810) (0.854) (0.902) (0.990) (0.909)
Distributions from net
realized gains......... 0.000 (0.024) (0.153) (0.219) (0.190) 0.000 (0.077) 0.000 (0.058) (0.521)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.256) (0.707) (0.810) (0.947) (0.969) (0.810) (0.931) (0.902) (1.048) (1.430)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 0.957 (1.065) 0.274 (0.173) 0.670 0.011 0.379 (0.096) (1.010) 0.081
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $10.995 $10.038 $11.103 $10.829 $11.002 $10.332 $10.321 $ 9.942 $ 10.038 $ 11.048
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 12.08 % (3.23 %) 10.13 % 7.19 % 16.44 % 8.32 % 13.49 % 8.19 % 0.29 % 14.45 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $588.6 $541.6 $576.2 $428.8 $318.7 $227.7 $191.1 $148.8 $139.5 $110.1
Ratio of expenses net of
reimbursement to
average net assets..... 0.22 % 0.45 % 0.46 % 0.47 % 0.49 % 0.47 % 0.53 % 0.53 % 0.53 % 0.51 %
Ratio of net investment
income to average net
assets................. 3.58 % 6.41 % 6.05 % 6.89 % 7.43 % 8.06 % 8.56 % 8.52 % 8.15 % 8.11 %
Portfolio turnover
rate................... 138.06 % 31.57 % 41.12 % 60.53 % 131.01 % 42.10 % 272.85 % 222.20 % 238.41 % 246.82 %
Number of shares
outstanding at end of
period (in millions)... 53.5 54.0 51.9 39.6 29.0 22.0 18.5 15.0 13.9 10.0
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
*The per share information of the Portfolios of The Prudential Series Fund,
Inc. has not been restated to reflect the operations of the Pruco Life Series
Fund, Inc. prior to the November 1, 1986 merger.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C6
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT SECURITIES
-----------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 05/01/89
TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $10.461 $11.784 $11.094 $11.133 $10.146 $10.324 $10.017
-------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net investment income.... 0.370 0.703 0.700 0.731 0.736 0.791 0.545
Net realized and
unrealized gains
(losses) on
investments............ 0.884 (1.311) 0.678 (0.092) 0.847 (0.177) 0.613
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations........... 1.254 (0.608) 1.378 0.639 1.583 0.614 1.158
-------- -------- -------- -------- -------- -------- --------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.254) (0.723) (0.642) (0.593) (0.596) (0.769) (0.489)
Distributions from net
realized gains......... 0.000 0.008 (0.046) (0.085) 0.000 (0.023) (0.362)
-------- -------- -------- -------- -------- -------- --------
Total
distributions........ (0.254) (0.715) (0.688) (0.678) (0.596) (0.792) (0.851)
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in Net Asset Value..... 1.000 (1.323) 0.690 (0.039) 0.987 (0.178) 0.307
-------- -------- -------- -------- -------- -------- --------
Net Asset Value at end of
period................. $11.461 $10.461 $11.784 $11.094 $11.133 $10.146 $10.324
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Total Investment Rate of
Return:**.............. 11.98 % (5.16 %) 12.56 % 5.85 % 16.11 % 6.34 % 11.60 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $482.0 $487.6 $540.1 $315.5 $95.0 $23.7 $17.0
Ratio of expenses net of
reimbursement to
average net assets..... 0.22 % 0.45 % 0.46 % 0.53 % 0.58 % 0.74 % 0.50 %
Ratio of net investment
income to average net
assets................. 3.36 % 6.30 % 5.91 % 6.58 % 6.97 % 7.86 % 5.06 %
Portfolio turnover
rate................... 185.77 % 34.19 % 18.59 % 80.71 % 127.18 % 379.45 % 208.86 %
Number of shares
outstanding at end of
period (in millions)... 42.1 46.6 45.8 28.3 8.5 2.3 1.6
</TABLE>
<TABLE>
<CAPTION>
ZERO COUPON BOND 1995
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 02/12/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $10.593 $11.282 $11.174 $11.250 $10.380 $11.094 $10.331 $10.270 $ 11.724 $ 10.156
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.321 0.800 0.761 0.802 0.844 1.447 0.889 0.888 0.893 0.791
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0.111 (0.808) 0.107 (0.010) 0.874 (0.670) 0.766 0.027 (1.263) 1.437
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 0.432 (0.008) 0.868 0.792 1.718 0.777 1.655 0.915 (0.370) 2.228
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.332) (0.679) (0.760) (0.798) (0.845) (1.491) (0.892) (0.854) (1.084) (0.660)
Distributions from net
realized gains......... 0.000 (0.002) 0.000 (0.070) (0.003) 0.000 0.000 0.000 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.332) (0.681) (0.760) (0.868) (0.848) (1.491) (0.892) (0.854) (1.084) (0.660)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 0.100 (0.689) 0.108 (0.076) 0.870 (0.714) 0.763 0.061 (1.454) 1.568
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $10.693 $10.593 $11.282 $11.174 $11.250 $10.380 $11.094 $10.331 $ 10.270 $ 11.724
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 4.09 % (0.03 %) 7.87 % 7.19 % 17.20 % 7.95 % 16.41 % 9.01 % (3.25 %) 21.96 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $11.0 $17.7 $15.2 $13.6 $13.0 $11.0 $10.0 $9.0 $7.5 $7.2
Ratio of expenses net of
reimbursement to
average net assets..... 0.30 % 0.60 % 0.63 % 0.69 % 0.71 % 0.75 % 0.75 % 0.75 % 0.69 % 0.42 %
Ratio of net investment
income to average net
assets................. 2.98 % 6.72 % 6.61 % 7.12 % 7.86 % 13.80 % 8.13 % 8.34 % 8.17 % 6.89 %
Portfolio turnover
rate................... 0.00 % 4.38 % 5.84 % 34.80 % 0.77 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
Number of shares
outstanding at end of
period (in millions)... 1.0 1.7 1.3 1.2 1.2 1.1 0.9 0.9 0.7 0.6
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C7
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
ZERO COUPON BOND 2000
-------------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 02/12/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $11.862 $13.715 $12.550 $12.402 $11.279 $11.883 $11.004 $10.685 $ 12.476 $ 10.267
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.292 0.927 0.850 0.892 0.908 1.114 0.919 0.919 0.934 0.807
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.404 (1.907) 1.157 0.140 1.308 (0.593) 1.277 0.292 (1.623) 2.087
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 1.696 (0.980) 2.007 1.032 2.216 0.521 2.196 1.211 (0.689) 2.894
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.204) (0.850) (0.837) (0.884) (0.944) (1.125) (0.915) (0.892) (1.102) (0.685)
Distributions from net
realized gains......... 0.000 (0.023) (0.005) 0.000 (0.149) 0.000 (0.402) 0.000 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.204) (0.873) (0.842) (0.884) (1.093) (1.125) (1.317) (0.892) (1.102) (0.685)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 1.492 (1.853) 1.165 0.148 1.123 (0.604) 0.879 0.319 (1.791) 2.209
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $13.354 $11.862 $13.715 $12.550 $12.402 $11.279 $11.883 $11.004 $ 10.685 $ 12.476
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 14.29 % (7.18 %) 16.15 % 8.59 % 20.71 % 5.11 % 20.38 % 11.56 % (5.51 %) 28.62 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $23.7 $20.6 $22.2 $16.7 $14.6 $13.9 $13.1 $10.9 $9.0 $8.1
Ratio of expenses net of
reimbursement to
average net assets..... 0.27 % 0.51 % 0.62 % 0.66 % 0.68 % 0.75 % 0.75 % 0.75 % 0.64 % 0.40 %
Ratio of net investment
income to average net
assets................. 2.30 % 6.69 % 6.21 % 7.24 % 7.77 % 9.99 % 7.73 % 8.24 % 8.19 % 6.61 %
Portfolio turnover
rate................... 73.83 % 9.41 % 0.53 % 0.00 % 0.00 % 0.00 % 38.62 % 0.00 % 0.00 % 0.00 %
Number of shares
outstanding at end of
period (in millions)... 1.8 1.7 1.6 1.3 1.2 1.2 1.1 1.0 0.8 0.7
</TABLE>
<TABLE>
<CAPTION>
ZERO COUPON BOND 2005
-----------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 05/01/89
TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $10.744 $12.677 $11.029 $10.874 $ 9.798 $10.457 $10.017
-------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net investment income.... 0.327 0.752 0.768 0.804 0.820 0.850 0.561
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.823 (1.967) 1.623 0.207 1.143 (0.649) 0.598
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations........... 2.150 (1.215) 2.391 1.011 1.963 0.201 1.159
-------- -------- -------- -------- -------- -------- --------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.246) (0.715) (0.741) (0.792) (0.827) (0.860) (0.531)
Distributions from net
realized gains......... 0.000 (0.003) (0.002) (0.064) (0.060) 0.000 (0.188)
-------- -------- -------- -------- -------- -------- --------
Total
distributions........ (0.246) (0.718) (0.743) (0.856) (0.887) (0.860) (0.719)
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in Net Asset Value..... 1.904 (1.933) 1.648 0.155 1.076 (0.659) 0.440
-------- -------- -------- -------- -------- -------- --------
Net Asset Value at end of
period................. $12.648 $10.744 $12.677 $11.029 $10.874 $ 9.798 $10.457
-------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- --------
Total Investment Rate of
Return:**.............. 19.99 % (9.61 %) 21.94 % 9.66 % 21.16 % 2.56 % 11.67 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $18.6 $16.5 $14.5 $9.8 $8.7 $7.3 $7.2
Ratio of expenses net of
reimbursement to
average net assets..... 0.29 % 0.60 % 0.66 % 0.75 % 0.75 % 0.75 % 0.49 %
Ratio of net investment
income to average net
assets................. 2.80 % 6.53 % 6.17 % 7.46 % 8.08 % 8.83 % 5.25 %
Portfolio turnover
rate................... 69.01 % 5.94 % 3.62 % 11.48 % 5.76 % 4.36 % 59.90 %
Number of shares
outstanding at end of
period (in millions)... 1.5 1.5 1.1 0.9 0.8 0.7 0.7
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C8
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
CONSERVATIVELY MANAGED FLEXIBLE
-----------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $14.095 $14.905 $14.243 $14.318 $13.060 $13.361 $12.295 $11.889 $ 12.571 $ 12.173
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.324 0.528 0.486 0.558 0.687 0.821 0.891 0.773 0.656 0.652
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investmentss........... 1.062 (0.679) 1.229 0.410 1.738 (0.143) 1.155 0.424 (0.399) 1.046
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 1.386 (0.151) 1.715 0.968 2.425 0.678 2.046 1.197 0.257 1.698
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.215) (0.505) (0.468) (0.533) (0.668) (0.812) (0.887) (0.791) (0.709) (0.517)
Distributions from net
realized gains......... 0.000 (0.154) (0.585) (0.510) (0.499) (0.167) (0.093) 0.000 (0.230) (0.783)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.215) (0.659) (1.053) (1.043) (1.167) (0.979) (0.980) (0.791) (0.939) (1.300)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 1.171 (0.810) 0.662 (0.075) 1.258 (0.301) 1.066 0.406 (0.682) 0.398
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $15.266 $14.095 $14.905 $14.243 $14.318 $13.060 $13.361 $12.295 $ 11.889 $ 12.571
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 9.84 % (0.97 %) 12.20 % 6.95 % 19.07 % 5.27 % 16.99 % 10.19 % 1.54 % 14.17 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $3,715.6 $3,501.1 $3,103.2 $2,114.0 $1,500.0 $1,100.2 $976.0 $815.6 $803.9 $375.4
Ratio of expenses net of
reimbursement to
average net assets..... 0.29 % 0.61 % 0.60 % 0.62 % 0.63 % 0.65 % 0.64 % 0.65 % 0.66 % 0.64 %
Ratio of net investment
income to average net
assets................. 2.20 % 3.61 % 3.22 % 3.88 % 4.89 % 6.21 % 6.81 % 6.22 % 5.05 % 5.10 %
Portfolio turnover
rate................... 93.03 % 125.18 % 79.46 % 62.07 % 115.35 % 44.04 % 153.92 % 110.67 % 140.69 % 207.78 %
Number of shares
outstanding at end of
period (in millions)... 243.4 248.4 208.2 148.4 104.8 84.2 73.0 66.3 67.6 29.9
<CAPTION>
AGGRESSIVELY MANAGED FLEXIBLE
-----------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $15.496 $16.957 $16.005 $16.288 $13.996 $14.446 $13.123 $12.326 $ 13.555 $ 12.810
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.288 0.473 0.566 0.583 0.650 0.715 0.813 0.724 0.577 0.611
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.596 (1.021) 1.882 0.607 2.809 (0.466) 1.989 0.840 (0.753) 1.342
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 1.884 (0.548) 2.448 1.190 3.459 0.249 2.802 1.564 (0.176) 1.953
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.178) (0.451) (0.567) (0.559) (0.654) (0.699) (0.813) (0.767) (0.673) (0.456)
Distributions from net
realized gains......... 0.000 (0.462) (0.929) (0.914) (0.513) 0.000 (0.666) 0.000 (0.380) (0.752)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.178) (0.913) (1.496) (1.473) (1.167) (0.699) (1.479) (0.767) (1.053) (1.208)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 1.706 (1.461) 0.952 (0.283) 2.292 (0.450) 1.323 0.797 (1.229) 0.745
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $17.202 $15.496 $16.957 $16.005 $16.288 $13.996 $14.446 $13.123 $ 12.326 $ 13.555
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 12.16 % (3.16 %) 15.58 % 7.61 % 25.43 % 1.91 % 21.77 % 12.83 % (1.83 %) 15.48 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $3,827.9 $3,481.5 $3,292.2 $2,435.6 $1,990.7 $1,507.8 $1,386.5 $1,103.9 $1,062.4 $593.6
Ratio of expenses net of
reimbursement to
average net assets..... 0.31 % 0.66 % 0.66 % 0.67 % 0.67 % 0.69 % 0.69 % 0.70 % 0.71 % 0.67 %
Ratio of net investment
income to average net
assets................. 1.77 % 2.90 % 3.30 % 3.63 % 4.23 % 5.13 % 5.66 % 5.52 % 4.09 % 4.43 %
Portfolio turnover
rate................... 94.46 % 123.63 % 62.99 % 59.03 % 93.13 % 51.87 % 141.04 % 128.45 % 123.83 % 133.76 %
Number of shares
outstanding at end of
period (in millions)... 222.5 224.7 194.1 152.2 122.2 107.7 96.0 84.1 86.2 43.8
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
*The per share information of the Portfolios of The Prudential Series Fund,
Inc. has not been restated to reflect the operations of the Pruco Life Series
Fund, Inc. prior to the November 1, 1986 merger.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C9
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
HIGH YIELD BOND
-------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 02/23/87
TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87
-------- -------- -------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $ 7.366 $ 8.406 $ 7.719 $ 7.212 $ 5.838 $ 7.673 $ 8.904 $ 8.742 $ 10.000
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Income From Investment
Operations:
Net investment income.... 0.382 0.869 0.822 0.824 0.836 0.936 1.071 1.066 0.968
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0.323 (1.102) 0.632 0.415 1.397 (1.792) (1.223) 0.065 (1.428)
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total from investment
operations........... 0.705 (0.233) 1.454 1.239 2.233 (0.856) (0.152) 1.131 (0.460)
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.272) (0.807) (0.767) (0.732) (0.859) (0.979) (1.079) (0.969) (0.798)
Distributions from net
realized gains......... 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total
distributions........ (0.272) (0.807) (0.767) (0.732) (0.859) (0.979) (1.079) (0.969) (0.798)
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Net increase (decrease)
in Net Asset Value..... 0.433 (1.040) 0.687 0.507 1.374 (1.835) (1.231) 0.162 (1.258)
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Net Asset Value at end of
period................. $ 7.799 $ 7.366 $ 8.406 $ 7.719 $ 7.212 $ 5.838 $ 7.673 $ 8.904 $ 8.742
-------- -------- -------- -------- -------- -------- -------- -------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total Investment Rate of
Return:**.............. 9.53 % (2.72 %) 19.27 % 17.54 % 39.71 % (11.84 %) (2.05 %) 13.17 % (4.91 %)
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $336.9 $306.2 $282.9 $153.7 $78.7 $49.8 $60.0 $65.8 $40.4
Ratio of expenses net of
reimbursement to
average net assets..... 0.31 % 0.65 % 0.65 % 0.70 % 0.75 % 0.75 % 0.71 % 0.75 % 0.73 %
Ratio of net investment
income to average net
assets................. 4.95 % 9.82 % 9.91 % 10.67 % 12.05 % 13.42 % 12.29 % 11.60 % 10.13 %
Portfolio turnover
rate................... 83.89 % 68.67 % 95.52 % 75.04 % 57.21 % 34.66 % 60.59 % 70.73 % 16.58 %
Number of shares
outstanding at end of
period (in millions)... 43.2 41.6 33.6 19.9 10.9 8.5 7.8 7.4 4.6
<CAPTION>
STOCK INDEX
-------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 10/19/87
TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87
-------- -------- -------- -------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $14.957 $15.202 $14.218 $13.605 $10.760 $11.732 $ 9.454 $ 8.531 $ 8.071
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Income From Investment
Operations:
Net investment income.... 0.197 0.377 0.361 0.350 0.351 0.357 0.326 0.357 0.047
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 2.789 (0.231) 1.002 0.600 2.814 (0.792) 2.570 0.951 0.548
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total from investment
operations........... 2.986 0.146 1.363 0.950 3.165 (0.435) 2.896 1.308 0.595
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.109) (0.368) (0.346) (0.329) (0.307) (0.309) (0.354) (0.385) (0.135)
Distributions from net
realized gains......... 0.000 (0.023) (0.033) (0.008) (0.013) (0.228) (0.264) 0.000 0.000
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total
distributions........ (0.109) (0.391) (0.379) (0.337) (0.320) (0.537) (0.618) (0.385) (0.135)
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Net increase (decrease)
in Net Asset Value..... 2.877 (0.245) 0.984 0.613 2.845 (0.972) 2.278 0.923 0.460
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Net Asset Value at end of
period................. $17.834 $14.957 $15.202 $14.218 $13.605 $10.760 $11.732 $ 9.454 $ 8.531
-------- -------- -------- -------- -------- -------- -------- -------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- ---------
Total Investment Rate of
Return:**.............. 19.97 % 1.01 % 9.66 % 7.13 % 29.72 % (3.63 %) 30.93 % 15.44 % 7.35 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $830.6 $664.5 $615.1 $433.5 $236.9 $104.5 $53.8 $36.0 $24.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.19 % 0.42 % 0.42 % 0.46 % 0.47 % 0.60 % 0.69 % 0.78 % 0.45 %
Ratio of net investment
income to average net
assets................. 1.20 % 2.50 % 2.43 % 2.56 % 2.82 % 3.23 % 2.95 % 3.87 % 0.53 %
Portfolio turnover
rate................... 0.71 % 1.74 % 0.60 % 0.43 % 1.10 % 17.80 % 14.54 % 15.62 % 0.47 %
Number of shares
outstanding at end of
period (in millions)... 46.6 44.4 40.5 30.5 17.4 9.7 4.6 3.8 2.9
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C10
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
HIGH DIVIDEND STOCK
---------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 02/19/88
TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period $14.484 $15.655 $13.673 $13.209 $11.241 $12.254 $10.621 $10.132
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net investment income.... 0.313 0.664 0.551 0.582 0.578 0.509 0.539 0.452
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.732 (0.453) 2.459 0.723 2.430 (0.980) 1.841 0.684
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations 2.045 0.211 3.010 1.305 3.008 (0.471) 2.380 1.136
-------- -------- -------- -------- -------- -------- -------- --------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.177) (0.562) (0.501) (0.515) (0.542) (0.461) (0.462) (0.420)
Distributions from net
realized gains......... 0.000 (0.820) (0.527) (0.326) (0.498) (0.081) (0.285) (0.227)
-------- -------- -------- -------- -------- -------- -------- --------
Total
distributions........ (0.177) (1.382) (1.028) (0.841) (1.040) (0.542) (0.747) (0.647)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in Net Asset Value..... 1.868 (1.171) 1.982 0.464 1.968 (1.013) 1.633 0.489
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value at end of
period................. $16.352 $14.484 $15.655 $13.673 $13.209 $11.241 $12.254 $10.621
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
Total Investment Rate of
Return:**.............. 14.11 % 1.44 % 22.28 % 10.14 % 27.50 % (3.73 %) 22.67 % 11.31 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $1,013.9 $859.7 $602.8 $234.4 $106.9 $55.5 $34.9 $11.3
Ratio of expenses net of
reimbursement to
average net assets..... 0.21 % 0.52 % 0.54 % 0.57 % 0.57 % 0.60 % 0.74 % 0.64 %
Ratio of net investment
income to average net
assets................. 2.03 % 3.92 % 3.56 % 4.32 % 4.53 % 4.53 % 4.48 % 4.08 %
Portfolio turnover
rate................... 30.81 % 62.66 % 41.43 % 39.98 % 60.12 % 54.79 % 56.65 % 61.31 %
Number of shares
outstanding at end of
period (in millions)... 62.0 59.4 38.5 17.1 8.1 4.9 2.9 1.1
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 01/01/88 01/01/87 01/01/86
TO TO TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86*
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $20.662 $21.487 $18.903 $17.905 $15.449 $18.539 $15.463 $13.620 $ 14.815 $ 14.634
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Income From Investment
Operations:
Net investment income.... 0.264 0.512 0.417 0.444 0.482 0.577 0.474 0.402 0.393 0.448
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 3.164 0.054 3.666 2.050 3.414 (1.573) 4.064 1.909 (0.065) 1.765
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total from investment
operations........... 3.428 0.566 4.083 2.494 3.896 (0.996) 4.538 2.311 0.328 2.213
Distributions to
Shareholders:
Distributions from net
investment income...... (0.189) (0.487) (0.404) (0.439) (0.478) (0.563) (0.503) (0.468) (0.496) (0.275)
Distributions from net
realized gains......... (0.021) (0.904) (1.095) (1.057) (0.962) (1.531) (0.959) 0.000 (1.027) (1.757)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total
distributions........ (0.210) (1.391) (1.499) (1.496) (1.440) (2.094) (1.462) (0.468) (1.523) (2.032)
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net increase (decrease)
in Net Asset Value..... 3.218 (0.825) 2.584 0.998 2.456 (3.090) 3.076 1.843 (1.195) 0.181
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Net Asset Value at end of
period................. $23.880 $20.662 $21.487 $18.903 $17.905 $15.449 $18.539 $15.463 $ 13.620 $ 14.815
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
-------- -------- -------- -------- -------- -------- -------- -------- --------- ---------
Total Investment Rate of
Return:**.............. 16.58 % 2.78 % 21.87 % 14.17 % 26.01 % (5.21 %) 29.73 % 17.05 % 1.67 % 15.10 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $3,232.9 $2,617.8 $2,186.5 $1,416.6 $1,032.8 $700.5 $675.5 $500.1 $451.0 $247.9
Ratio of expenses net of
reimbursement to
average net assets..... 0.24 % 0.55 % 0.53 % 0.53 % 0.51 % 0.56 % 0.56 % 0.57 % 0.51 % 0.52 %
Ratio of net investment
income to average net
assets................. 1.18 % 2.39 % 1.99 % 2.33 % 2.66 % 3.37 % 2.66 % 2.67 % 2.34 % 2.90 %
Portfolio turnover
rate................... 8.54 % 6.90 % 12.95 % 15.70 % 20.85 % 84.84 % 73.54 % 62.35 % 79.91 % 117.15 %
Number of shares
outstanding at end of
period (in millions)... 135.4 126.7 101.8 74.9 57.7 45.3 36.4 32.3 33.1 16.7
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
*The per share information of the Portfolios of The Prudential Series Fund,
Inc. has not been restated to reflect the operations of the Pruco Life Series
Fund, Inc. prior to the November 1, 1986 merger.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C11
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH
STOCK
--------
04/25/95*
TO
06/30/95
--------
<S> <C>
Net Asset Value at
beginning of period $10.000
--------
Income From Investment
Operations:
Net investment income.... 0.010
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.266
--------
Total from investment
operations........... 1.276
--------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.006)
Distributions from net
realized gains......... 0.000
--------
Total
distributions........ (0.006)
--------
Net increase (decrease)
in Net Asset Value..... 1.270
--------
Net Asset Value at end of
period................. $11.270
--------
--------
Total Investment Rate of
Return:**.............. 11.76 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $17.1
Ratio of expenses net of
reimbursement to
average net assets..... 0.27 %
Ratio of net investment
income to average net
assets................. 0.10 %
Portfolio turnover
rate................... 8.80 %
Number of shares
outstanding at end of
period (in millions)... 1.5
<CAPTION>
SMALL
CAPITALIZATION
STOCK
--------
04/25/95*
TO
06/30/95
--------
<S> <C>
Net Asset Value at
beginning of period.... $10.000
--------
Income From Investment
Operations:
Net investment income.... 0.022
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 0.659
--------
Total from investment
operations........... 0.681
--------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.005)
Distributions from net
realized gains......... 0.000
--------
Total
distributions........ (0.005)
--------
Net increase (decrease)
in Net Asset Value..... 0.676
--------
Net Asset Value at end of
period................. $10.676
--------
--------
Total Investment Rate of
Return:**.............. 6.62 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $17.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.22 %
Ratio of net investment
income to average net
assets................. 0.22 %
Portfolio turnover
rate................... 14.15 %
Number of shares
outstanding at end of
period (in millions)... 1.6
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
*Commencement of business.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C12
<PAGE>
NOTE 6: FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
GLOBAL EQUITY
---------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 09/19/88
TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period $13.879 $14.639 $10.368 $10.792 $ 9.866 $11.547 $10.508 $ 9.818
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net investment income.... 0.053 0.028 0.023 0.051 0.096 0.203 0.079 0.052
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 1.259 (0.744) 4.433 (0.419) 1.020 (1.802) 1.806 0.787
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations........... 1.312 (0.716) 4.456 (0.368) 1.116 (1.599) 1.885 0.839
-------- -------- -------- -------- -------- -------- -------- --------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.023) (0.019) (0.079) (0.056) (0.100) (0.067) (0.073) (0.149)
Distributions from net
realized gains......... 0.000 (0.025) (0.106) 0.000 (0.090) (0.015) (0.773) 0.000
-------- -------- -------- -------- -------- -------- -------- --------
Total
distributions........ (0.023) (0.044) (0.185) (0.056) (0.190) (0.082) (0.846) (0.149)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in Net Asset Value..... 1.289 (0.760) 4.271 (0.424) 0.926 (1.681) 1.039 0.690
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value at end of
period................. $15.168 $13.879 $14.639 $10.368 $10.792 $ 9.866 $11.547 $10.508
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
Total Investment Rate of
Return:**.............. 9.45 % (4.89 %) 43.14 % (3.42 %) 11.39 % (12.91 %) 18.82 % 8.57 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $369.1 $345.7 $129.1 $34.0 $34.3 $26.2 $29.4 $26.9
Ratio of expenses net of
reimbursement to
average net assets..... 0.53 % 1.23 % 1.44 % 1.87 % 1.62 % 1.67 % 1.47 % 0.42 %
Ratio of net investment
income to average net
assets................. 0.38 % 0.20 % 0.18 % 0.49 % 0.92 % 1.92 % 0.70 % 0.51 %
Portfolio turnover
rate................... 26.37 % 37.46 % 54.54 % 78.16 % 136.21 % 43.12 % 47.95 % 6.40 %
Number of shares
outstanding at end of
period (in millions)... 24.3 24.9 8.8 3.3 3.2 2.7 2.5 2.6
<CAPTION>
NATURAL RESOURCES
---------------------------------------------------------------------------------
01/01/95 01/01/94 01/01/93 01/01/92 01/01/91 01/01/90 01/01/89 05/01/88
TO TO TO TO TO TO TO TO
06/30/95 12/31/94 12/31/93 12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value at
beginning of period.... $14.443 $15.562 $12.949 $12.450 $11.622 $12.705 $10.141 $ 9.910
-------- -------- -------- -------- -------- -------- -------- --------
Income From Investment
Operations:
Net investment income.... 0.103 0.183 0.227 0.319 0.368 0.417 0.364 0.254
Net realized gains
(losses) and unrealized
appreciation
(depreciation) on
investments............ 2.207 (0.850) 3.004 0.588 0.821 (1.143) 3.216 0.274
-------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations........... 2.310 (0.667) 3.231 0.907 1.189 (0.726) 3.580 0.528
-------- -------- -------- -------- -------- -------- -------- --------
Distributions to
Shareholders:
Distributions from net
investment income...... (0.072) (0.150) (0.207) (0.309) (0.361) (0.336) (0.358) (0.252)
Distributions from net
realized gains......... (0.065) (0.302) (0.411) (0.099) 0.000 (0.021) (0.658) (0.045)
-------- -------- -------- -------- -------- -------- -------- --------
Total
distributions........ (0.137) (0.452) (0.618) (0.408) (0.361) (0.357) (1.016) (0.297)
-------- -------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
in Net Asset Value..... 2.173 (1.119) 2.613 0.499 0.828 (1.083) 2.564 0.231
-------- -------- -------- -------- -------- -------- -------- --------
Net Asset Value at end of
period................. $16.616 $14.443 $15.562 $12.949 $12.450 $11.622 $12.705 $10.141
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
Total Investment Rate of
Return:**.............. 15.98 % (4.30 %) 25.15 % 7.30 % 10.30 % (5.76 %) 35.64 % 5.42 %
Ratios/Supplemental Data:
Net assets at end of
period (in millions)... $269.8 $227.3 $158.8 $77.5 $62.6 $50.6 $17.9 $9.5
Ratio of expenses net of
reimbursement to
average net assets..... 0.24 % 0.61 % 0.60 % 0.72 % 0.68 % 0.75 % 0.86 % 0.58 %
Ratio of net investment
income to average net
assets................. 0.67 % 1.09 % 1.50 % 2.44 % 2.97 % 3.45 % 3.04 % 2.46 %
Portfolio turnover
rate................... 18.91 % 18.10 % 19.64 % 29.20 % 21.33 % 42.18 % 49.17 % 59.33 %
Number of shares
outstanding at end of
period (in millions)... 16.2 15.7 10.2 6.0 5.0 4.4 1.4 0.9
</TABLE>
All calculations are based on average month-end shares outstanding, where
applicable.
**Total investment returns are at the portfolio level and exclude contract
specific charges which would reduce returns.
C13
<PAGE>
GLOSSARY OF TERMS FOR THE REPORT TO CONTRACT OWNERS
(NOTE: ADDITIONAL EXPLANATIONS WILL BE FOUND IN NOTES TO FINANCIAL STATEMENTS)
ACCUMULATION UNIT -- The measure for determining the Contract owner's share in
the separate account of a deferred variable annuity during the accumulation
period before annuity benefits begin to be paid. Contract owner transactions
such as purchase payments, transfers, and withdrawals result in changes to the
number of accumulation units credited to the Contract owner. Investment results
and daily charges affect the value of the accumulation unit.
ANNUITY UNIT -- The measure of the fixed number of benefit units purchased by
the accumulation units when annuitizing via a variable payout annuity.
AMERICAN DEPOSITORY RECEIPT (ADR) -- A certificate issued by an American bank to
evidence ownership of a block of foreign shares. The certificate can be traded
like a share of stock.
BOND -- A debt security which obligates the issuer to pay interest at specific
intervals and to redeem the bond for a specified amount on the maturity date. A
bond can be categorized based on the time interval between issue date and
maturity date. Short-term bond: 2 years or less; medium-term bond: 2 - 10 years;
long-term bond: 10 years or more.
CERTIFICATE OF DEPOSIT (CD) -- A short-term, interest-bearing bond issued by a
bank or a savings and loan.
COMMERCIAL PAPER -- A short-term, unsecured promissory note issued by either a
corporation or bank.
COMMON STOCK -- The basic unit of ownership of a public corporation which
entitles stockholders to dividend payments, although amount and frequency of
dividends are not guaranteed. (see also Stock)
CONVERTIBLE BOND -- A bond that is exchangeable for another type of security
(usually common stock).
COUPON RATE -- The annual rate of interest the issuer of a bond will pay
bondholders.
DEFAULTED SECURITY -- A bond which fails to make interest payments in a timely
manner.
FUTURES CONTRACT -- A contract calling for the delivery of a specified quantity
of cash, a financial security or a commodity. The contract includes a specific
price and future time at which the exchange may take place.
LOAN PARTICIPATION -- A loan to a corporation which is sold by a bank in the
form of a short-term, unsecured promissory note.
NET ASSETS -- The term used to designate the total value of securities owned,
cash, receivables, and other assets less any liabilities.
MARKET VALUE -- The dollar value of a security on a given day, usually based on
the last sales price of that given day.
OPTION CONTRACT -- A contract giving the investor the right to buy or sell an
underlying security at a fixed price before the expiration date. An option which
grants the investor the right to buy the underlying security is a Call Option; a
Put Option gives the investor the right to sell the underlying security.
PIK BOND/STOCK (PAY IN KIND) -- A security which has the option to pay interest
or dividends in the form of either additional bonds or shares of stock.
PREFERRED STOCK -- A high quality unit of ownership of a public corporation
which entitles the holder to preference over common stock holders in the payment
of dividends. (see also Stock)
PORTFOLIO TURNOVER -- A measure of portfolio trading activity.
REALIZED GAIN/LOSS -- The amount of profit or loss from the sale of securities.
Calculated as the sale price minus the purchase price.
I
<PAGE>
REPURCHASE AGREEMENT -- An agreement where an investor loans cash to a bank in
exchange for a Treasury security held as collateral and interest on the loan.
The agreement indicates that the cash and collateral are exchanged back the
following day. These securities are used to invest idle cash.
RESTRICTED SECURITY -- A security which is sold privately because it is not
registered with the SEC.
RIGHT -- Privilege granted to stockholders of a company to buy shares of a new
issue of common stock (at a price below the public offering price) before it is
offered to the public.
STOCK -- Unit of ownership in a public corporation. The value of a share of
stock varies, according to how buyers and sellers of the stock view the
corporation's future success. Shareholders generally receive dividend payments,
which are their part of the corporation's earnings. (see also Common Stock;
Preferred Stock)
TIME DEPOSIT (TD) -- A non-negotiable short-term, interest bearing bond issued
by a bank or savings & loan. The maturity period can be from 1 day to 6 months.
UNREALIZED GAIN/LOSS -- The increase or decrease in the value of a security,
based on its daily market price and its original purchase price. A gain or loss
is "unrealized" until the sale of the security.
VARIATION MARGIN -- A term used in the daily valuation of futures contracts. It
refers to the difference between the current and previous day's settling price.
WARRANT -- A security which entitles the holder to buy additional shares of
common stock at a specified price (usually higher than the market price at the
time of issuance), over a period of years.
II
<PAGE>
BOARD OF
DIRECTORS THE PRUDENTIAL SERIES FUND, INC.
ROBERT P. HILL W. SCOTT McDONALD, JR., E. MICHAEL CAULFIELD
EXECUTIVE VICE PhD. CEO,
PRESIDENT, EXECUTIVE VICE PRUDENTIAL PREFERRED
THE PRUDENTIAL PRESIDENT, FINANCIAL SERVICES;
INSURANCE FAIRLEIGH DICKINSON PRESIDENT, SERIES FUND
COMPANY OF AMERICA UNIVERSITY
CHAIRMAN OF THE BOARD,
SERIES FUND
SAUL K. FENSTER, PhD. JOSEPH WEBER, PhD.
PRESIDENT, NEW JERSEY VICE PRESIDENT,
INSTITUTE OF TECHNOLOGY INTERCLASS
(INTERNATIONAL
CORPORATE LEARNING)
--------------------------------------------------------------------------------
BOARD OF
DIRECTORS PRUCO LIFE INSURANCE COMPANY
E. MICHAEL CAULFIELD GARNETT L. KEITH, JR. I. EDWARD PRICE
CEO, VICE CHAIRMAN, CEO,
PRUDENTIAL PREFERRED THE PRUDENTIAL PRUDENTIAL
FINANCIAL SERVICES INSURANCE COMPANY OF INTERNATIONAL INSURANCE
ROBERT P. HILL AMERICA
EXECUTIVE VICE IRA J. KLEINMAN
PRESIDENT, PRESIDENT,
THE PRUDENTIAL PRUDENTIAL SELECT
INSURANCE COMPANY OF MARKETING COMPANY
AMERICA ESTHER H. MILNES
CHAIRMAN OF THE BOARD SENIOR VICE PRESIDENT,
OF PRUDENTIAL INSURANCE
PRUCO LIFE AND PRUCO AND
LIFE OF NEW JERSEY FINANCIAL SERVICES;
PRESIDENT, PRUCO LIFE
AND
PRUCO LIFE OF NEW
JERSEY
III
