<PAGE> 1
MANULIFE SERIES FUND, INC.
1996 SEMI-ANNUAL REPORT
[LOGO]
MANULIFE FINANCIAL
<PAGE> 2
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy the variable contracts funded by the Separate Accounts of The
Manufacturers Life Insurance Company of America which invests in Manulife
Series Fund, Inc., unless accompanied or preceded by the current Portfolio
Review and prospectus for the respective Separate Account and the Manulife
Series Fund, Inc.
Variable contracts of The Manufacturers Life Insurance Company of America are
distributed by their affiliated broker/dealer, ManEquity, Inc., and other
broker/dealers appointed by ManEquity, Inc.
<PAGE> 3
CONTENTS
<TABLE>
<S> <C>
SHAREHOLDER LETTER .......................... 2
PORTFOLIO REVIEW:
Emerging Growth Equity Fund .............. 4
Common Stock Fund ........................ 5
Real Estate Securities Fund .............. 6
Balanced Assets Fund ..................... 7
Capital Growth Bond Fund ................. 8
Money-Market Fund ........................ 9
International Fund ....................... 10
Pacific Rim Emerging Markets Fund ........ 11
Equity Index Fund ........................ 12
RESULTS OF SPECIAL MEETING OF SHAREHOLDERS .. 13
STATEMENT OF INVESTMENTS:
Emerging Growth Equity Fund .............. 15
Common Stock Fund ........................ 17
Real Estate Securities Fund .............. 19
Balanced Assets Fund ..................... 20
Capital Growth Bond Fund ................. 24
Money-Market Fund ........................ 26
International Fund ....................... 27
Pacific Rim Emerging Markets Fund ........ 32
Equity Index Fund ........................ 35
STATEMENT OF ASSETS AND LIABILITIES ......... 36
STATEMENT OF OPERATIONS ..................... 38
STATEMENTS OF CHANGES IN NET ASSETS ......... 40
NOTES TO FINANCIAL STATEMENTS ............... 43
DIRECTORS AND OFFICERS ...................... 56
</TABLE>
<PAGE> 4
SHAREHOLDER LETTER
Dear Shareholder:
During the first half of 1996 the strengthening U.S. economy continued to push
stock prices up and, because it fueled inflation concerns, sent bond prices
down.
The Standard & Poor's 500 Index ended the first half of 1996 up just over 10%
continuing an eighteen month climb during which the S&P 500 has risen 46%. Gains
of this magnitude naturally raise concerns about the potential for a correction,
however, in our view, there is no clear signal that this is imminent. A
short-term correction could happen, but we are confident that the fundamental
business conditions which underlie stock prices are sound, and we take the view
that equities represent long-term value.
The strengthening U.S. economy had the opposite effect on the bond market.
Fluctuations in bond prices may continue for the balance of the year because of
uncertainty over whether the Federal Reserve will step in to increase interest
rates in order to curb inflationary pressure. Again, consistent with our view
to invest for the long-term, we feel high-quality bonds also represent good
value.
Global equity markets also rose but not as much as in the United States. Pacific
Asia markets were mixed with Japan, Malaysia, Indonesia and Hong Kong posting
advances of 10% or better. Australia gained just 2%, Singapore was virtually
unchanged and Thailand fell slightly. European markets generally performed
well, helped by the strength on Wall Street and considerable merger and
acquisition activity.
Given that your policy with Manulife America is a long-term financial planning
vehicle, we encourage you to consider both stock and bond funds in your
portfolio. To illustrate this point, the chart below shows the long-term
cumulative performance of investments in the U.S. markets from 1925 to 1995. As
you can see, stocks are the most volatile but also provide the highest returns.
On the other hand, returns on Treasuries have been the least volatile but also
generated the lowest returns. Bonds fall between those two extremes.
VALUE OF $1 INVESTED IN 1925
[FIGURE]
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.
Source: Stocks, Bonds, Bills, and Inflation 1996 Yearbook (TM). Ibbotson
Associates, Chicago (annually updates work by Roger G. Ibbotson and Rex A.
Sinquefield). Used with permission. All rights reserved.
2
<PAGE> 5
The chart demonstrates that while stocks hold the best potential, their
inherent volatility argues against "having all your eggs in one basket." Because
stocks and bonds react differently you can minimize volatility by holding a
diversified portfolio including both stocks and bonds. This frees you to take a
long-term view rather than reacting to short-term market fluctuations.
Manulife America makes this easy for you with interactive computer-based Asset
Allocation Analysis software. This software assists you in determining asset
allocation objectives consistent with your personal risk/reward profile. To
help ensure your asset allocation objectives continue to be met, an Asset
Allocation Balancer program is offered which automatically rebalances your
portfolio to your targets every six months.
If you have any questions about your policy or any of the services offered,
please feel free to contact your registered representative or contact us
directly at P.O. Box 600, Niagara Square Station, Buffalo, NY 14201-0600 or at
1-800-VARILINE (1-800-827-4546). We thank you for entrusting us with a part of
your financial portfolio and we look forward to continuing to serve you in the
future.
Sincerely
/s/ Donald A. Guloien
Donald A. Guloien
President
Manulife Series Fund, Inc.
August, 1996
3
<PAGE> 6
EMERGING GROWTH EQUITY FUND
INVESTMENT OBJECTIVE: To achieve growth of capital by investing primarily in
equity securities of companies believed to offer growth
potential over both the intermediate and the long term.
NET ASSETS: $191.2 million
INCEPTION DATE: June 26, 1984
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Emerging Growth Equity Fund* $55,451
Small Company Growth Funds Average - Lipper VA Universe $52,811
Standard & Poor's Small Cap Index $58,201
Lipper Small Company Growth Index $53,085
NASDAQ Composite Index $43,840
</TABLE>
[FIGURE]
ASSET MIX
<TABLE>
<S> <C>
Technology 21 %
Consumer Services 18 %
Healthcare 14 %
Capital Goods 9 %
Basic Industry 9 %
Business Services 7 %
Financial 5 %
Other 11 %
Cash & Short Term 6 %
</TABLE>
LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
COMPANY % OF FUND
<S> <C>
Jack Henry and Associates Inc. 2.8
Teltrend Inc. 2.7
Harman International Industries Inc. 2.7
Global Industries Inc. 2.3
Prime Hospitality Corp. 2.2
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 Year 5 Years 10 Years Inception
<S> <C> <C> <C> <C>
7.04% 23.16% 22.01% 14.55% 15.32%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Emerging Growth Equity Fund returned 7.04% for the six months ending June
30, 1996.
Small capitalization stocks began to attract greater investor attention in 1996,
as they continued to show better prospects for growth and more attractive
valuations than their large-cap counterparts. Cash inflows into
aggressive-growth mutual funds reached a record rate about three times that of a
year earlier, and small cap share prices outpaced large caps from February to
May.
In June, small caps gave back some of their gains, mainly on concerns about the
quality of second quarter earnings and simple profit-taking after the run-up.
The relative performance of the fund during the first six months was mainly
attributable to its heavy exposure to stocks at the small end of the small-cap
spectrum. During June small cap shares declined broadly, but the drops were
related to company size - the smaller the company, the lower the returns. In
addition, the fund was overweighted in the technology and health care sectors,
which underperformed the market.
Positive contributions to performance resulted from overweighting of business
services and energy stocks.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
4
<PAGE> 7
COMMON STOCK FUND
INVESTMENT OBJECTIVE: To achieve intermediate and long-term growth through
capital appreciation and current income by investing in common stocks and other
equity securities of well established companies with promising prospects for
providing an above-average rate of return.
NET ASSETS: $76.0 million
INCEPTION DATE: April 30, 1987
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Common Stock Fund* $24,612
Growth & Income Funds Average - Lipper VA Universe $24,415
Standard & Poor's 500 Index (with dividends reinvested) $30,891
</TABLE>
[FIGURE]
ASSET MIX
<TABLE>
<S> <C>
Durables 4 %
Financial Services 14 %
Utilities-Telephone 12 %
Technology 12 %
Energy 10 %
Retail 9 %
Staples 9 %
Consumer Services 8 %
Healthcare 7 %
Basic Materials 5 %
Capital Goods 5 %
Cash 5 %
</TABLE>
LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
COMPANY % OF FUND
<S> <C>
Philip Morris Companies Inc. 1.9
General Electric Company 1.8
Mobil Corp. 1.8
Exxon Corp. 1.8
Pepsico Inc. 1.7
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 Year 5 Years Inception
<S> <C> <C> <C>
8.45% 25.55% 13.44% 10.31%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Common Stock Fund returned 8.45% for the six months ending June 30, 1996.
The year opened with the bond market still jittery
over the federal budget deadlock. The stock market nonetheless advanced to
record levels, propelled by better than expected earnings reports from some key
blue chip companies. When signs of stronger economic growth forced interest
rates up, the market gave back some of its gains. But the climb resumed in the
second quarter as corporate profits continued to rise, although more slowly
than in months just prior, and the flow of cash into mutual funds continued at
a record pace.
Technology stocks, which had a tremendous run through 1995, retreated over the
six months on indications of slower growth in the sector. By June the retreat
had gained momentum, and some investors were selling NASDAQ technology issues
indiscriminately.
The fund's one-year return of 25.55% places it ahead of about three-quarters of
the funds in its Lipper category, mainly owing to its primary focus on stocks
with strong earnings momentum. The relative performance of the fund during the
first six months was mainly attributable, in the first quarter, to the market's
favoring of value stocks (the fund's price-to-earnings ratio is close to
average) and in the second quarter to the atypical underperformance of earnings
momentum stocks.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
5
<PAGE> 8
REAL ESTATE SECURITIES FUND
INVESTMENT OBJECTIVE: To achieve a combination of long-term capital
appreciation and satisfactory current income by investing in real
estate-related equity and debt securities.
NET ASSETS: $56.9 million
INCEPTION DATE: April 30, 1987
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Real Estate Securities Fund* $26,577
Real Estate Funds Average - Lipper VA Universe $20,697
National Association of Real Estate Investment Trusts
(NAREIT) All-REIT Index $18,141
Standard & Poor's 500 Index (with dividends reinvested) $30,891
</TABLE>
ASSET MIX
<TABLE>
<S> <C>
Cash 1 %
Financial REITs 74 %
Building-Related Stocks 11 %
Healthcare REITs 9 %
Lodging Stocks 2 %
Mortgage Finance 1 %
</TABLE>
LARGEST HOLDINGS
<TABLE>
<CAPTION>
ISSUER/COMPANY % OF FUND
<S> <C>
Kimco Realty Corp. 3.1
JP Realty Inc. 3.0
Duke Realty Investments Inc. 3.0
Sovran Self Storage Inc. 3.0
Nationwide Health Properties Inc. 2.9
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR 5 YEARS INCEPTION
<S> <C> <C> <C>
6.03% 15.34% 15.78% 11.24%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Real Estate Securities Fund returned 6.03% for the six months ending June
30, 1996.
During the first quarter, real estate securities underperformed the broader
stock market, taking their cue from the bond market, which was sending long term
interest rates higher. REITs did advance modestly, but in response to higher
rates, homebuilding stocks fell more than 10%. In the second quarter, real
estate issues defied the continued interest rate climb, rallying on strong new
home sales, construction spending data, and continued inflows of new money into
REITs. Over the quarter, REITs matched the overall stock market, returning 4.5%.
The relative performance of the fund during the first six months was mainly
attributable to exposure to homebuilding stocks, which fell sharply in the
first quarter. Weightings of building material stocks and self-storage REITs
were also factors. The fund outperformed the All-REIT Index in the second
quarter, as low cash holdings enabled the fund to take maximum advantage of the
rally. REIT sector weightings also helped, as did good security selection.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
6
<PAGE> 9
BALANCED ASSETS FUND
INVESTMENT OBJECTIVE: To achieve intermediate and long-term growth through
capital appreciation and income by investing in both debt and equity
securities.
NET ASSETS: $122.0 million
INCEPTION DATE: June 26, 1984
AVERAGE CREDIT QUALITY
(FIXED INCOME PORTFOLIO): A+
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Balanced Assets Fund* $40,146
Balanced Funds Average - Lipper VA Universe $40,482
Standard & Poor's 500 Index (with dividends reinvested) $64,902
Salomon Brothers Corporate Bond Index $39,601
</TABLE>
ASSET MIX
<TABLE>
<S> <C>
Cash & Other 3 %
Common Stock 55 %
Fixed Income 42 %
</TABLE>
LARGEST HOLDINGS
<TABLE>
<CAPTION>
COMPANY (COMMON STOCK) % OF FUND
<S> <C>
Philip Morris Companies Inc. 1.1
General Electric Company 1.1
Pepsico Inc. 1.0
Exxon Corp. 0.9
Sears Roebuck & Company 0.8
</TABLE>
<TABLE>
<CAPTION>
ISSUER (FIXED INCOME) % OF FUND
<S> <C>
United States of America (12 issues) 5.0
Procter & Gamble 1.0
Kansallis Osake Pankki NY 0.9
Coca Cola Enterprises Inc. 0.9
GTE Corp. 0.9
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR 5 YEARS 10 YEARS INCEPTION
<S> <C> <C> <C> <C>
3.36% 15.16% 11.01% 8.62% 12.26%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Balanced Assets Fund returned 3.36% for the six months ending June 30,
1996.
Over the six months, the fund's asset mix was moved from 46% stocks, 45% bonds,
and 9% cash to 55/42/3. (Note that within the bond portion of the fund, the
portfolio manager may hold cash as a part of the strategy of managing movements
in interest rates.)
The performance of the stock portion of the fund was negatively affected, in
the first quarter, to the market's favoring of value stocks (the fund's
price-to-earnings ratio is close to average) and in the second quarter to the
atypical underperformance of stocks with strong earnings momentum
characteristics, on which the portfolio is
primarily based.
The performance of the fixed income portion of the fund was negatively impacted
by its longer duration during a period of rising rates. The fund benefited,
however, from the purchase of corporate bonds of good relative value and from
its weighting of industrial bonds.
Given the economic and financial outlook, there are no planned changes of the
target mix.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
7
<PAGE> 10
CAPITAL GROWTH BOND FUND
INVESTMENT OBJECTIVE: To achieve growth of capital by investing in medium-grade
or better debt securities, with income as a secondary consideration.
NET ASSETS: $41.3 million
INCEPTION DATE: June 26, 1984
AVERAGE MATURITY: 9.2 years
AVERAGE CREDIT QUALITY: A+
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Capital Growth Bond Fund* $34,308
BBB Corporate Bond Funds Average - Lipper VA Universe $32,433
Salomon Brothers Corporate Bond Index $39,601
</TABLE>
ASSET MIX
<TABLE>
<S> <C>
Finance 27 %
Industrials 25 %
Yankee 18 %
Utilities 17 %
US Treasury/US Gov't Agency 3 %
</TABLE>
BOND CREDIT QUALITY
[FIGURE]
LARGEST BOND HOLDINGS
<TABLE>
<CAPTION>
ISSUER % OF FUND
<S> <C>
Procter & Gamble ESOP (due 01/01/2021) 2.9
Republic New York Corp. (due 04/15/2014) 2.8
Kansallis Osake Pankki NY (due 05/01/2002) 2.7
GTE Corp. (due 11/01/2021) 2.7
Coca Cola Enterprises Inc. (due 02/01/2022) 2.6
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR 5 YEARS 10 YEARS INCEPTION
<S> <C> <C> <C> <C>
- -2.29% 4.43% 7.94% 7.50% 10.80%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Capital Growth Bond Fund returned -2.29% for the six months ending June 30,
1996.
The year began with the U.S. economy showing more signs of weakness than
strength, and late in January the Federal Reserve (the 'Fed') cut the Fed Funds
rate by 1/4 point. By the end of the first quarter, however, a picture of
stronger economic growth emerged from such indicators as jobs, housing, and
retail sales. This raised expectations among bond investors of higher inflation
and interest rates, and bond prices fell. The Fed, meanwhile, has not moved the
overnight money rate since the January cut, as inflation has remained subdued;
however, market forces have raised long term rates, on perceptions that
increased growth would be inflationary.
The relative performance of the fund during the first six months was mainly
attributable to its longer duration during a period of rising rates. The funds
benefited, however, from the purchase of corporate bonds of good relative value
and from its weightings of industrial bond subsectors.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
8
<PAGE> 11
MONEY-MARKET FUND
INVESTMENT OBJECTIVE: To provide maximum current income consistent with capital
preservation and liquidity by investing in high-quality money-market
instruments.
NET ASSETS: $38.3 million
INCEPTION DATE: June 26, 1984
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Money-Market Fund* $19,942
Money Market Funds Average - Lipper VA Universe $17,832
90-day Treasury Bills $20,357
</TABLE>
ASSET MIX
<TABLE>
<S> <C>
Commercial Paper 4 %
US Government 53 %
Canadian Government Agencies 23 %
US Government Agencies 20 %
</TABLE>
DISTRIBUTION OF ASSETS BY MATURITY
[FIGURE]
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR 5 YEARS 10 YEARS INCEPTION
<S> <C> <C> <C> <C>
2.46% 5.24% 4.14% 5.58% 5.91%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Money-Market Fund returned 2.46% for the six months ending June 30, 1996.
By June 30, 96% of fund assets were invested in government securities, to
enable the fund to respond quickly to shifts in interest rates and invest at
the most advantageous point in the yield curve, while still holding securities
of high credit quality.
The slight outperformance of the fund relative to its Lipper Universe during
the first six months was mainly attributable to the fund's slightly long
maturity when the Federal Reserve lowered the Federal Funds rate to 5.25% at
the end of January.
The performance of the fund relative to 90-day Treasury Bill returns was
attributable to the term of the fund, which was shorter than 90 days throughout
the half-year. At March 31, average maturity was 39 days; at June 30, it was 10
days.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .50% (prior to 1987, .20%). The data shown indicate past performance and are
not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
9
<PAGE> 12
INTERNATIONAL FUND
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by investing in a
diversified portfolio comprised primarily of common stocks and equity-related
securities of corporations domiciled in countries other than the U.S. and
Canada.
NET ASSETS: $26.5 million
INCEPTION DATE: October 4, 1994
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
International Fund* $11,525
International Funds Average - Lipper VA Universe $11,379
Blended Financial Times Actuaries Index** $11,454
Financial Times Actuaries World ex-US Index $11,101
</TABLE>
GEOGRAPHICAL WEIGHTINGS
<TABLE>
<S> <C>
Pacific Asia 27 %
Japan 19 %
Europe ex-UK 16 %
United Kingdom 9 %
Cash 29 %
</TABLE>
LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
COMPANY % OF FUND
<S> <C>
Volvo AB (Series B shares) 0.9
HSBC Holdings 0.9
Hutchison Whampoa 0.8
Royal Dutch Petrol 0.8
Standard Chartered 0.8
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR INCEPTION
<S> <C> <C>
5.18% 13.68% 8.50%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The International Fund returned 5.18% for the six months ending June 30, 1996.
Pacific Asia markets were mixed. Malaysia, Indonesia, and Hong Kong joined other
world markets in posting solid advances of 10% or better. But Australia drifted
in a narrow range, gaining just 2%, Singapore was nearly unchanged, and Thailand
fell slightly. The Japanese market rose about 13%, mostly in the second quarter,
due to a gradual economic recovery, a weaker yen, relatively steady interest
rates, and improving profits.
European markets generally performed well, helped by the strength on Wall Street
and considerable merger and acquisition activity. The U.K. market, however, ran
out of steam in the second quarter, as M&A activity dropped off and relations
with the European Union worsened.
The relative performance of the fund during the first six months was mainly
attributable to underweighting in the Continental European markets.
Cash holdings were raised from 14% to 29% as managers became more cautious of
markets following the rise in bond yields, particularly in the U.S.
*Results are net of investment advisor and expense fees. Investment advisory
fees are deducted daily, at an annual rate of .85%, and expense fees are
deducted daily at a rate of up to .50%. The advisory fee will drop to .70% on
assets in excess of $100 million. The data shown indicate past performance and
are not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
** Comprising 45% of the Financial Times Actuaries Europe Index, 30% of the
Pacific ex-Japan Index, and 25% of the Japan Index.
10
<PAGE> 13
PACIFIC RIM EMERGING MARKETS FUND
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by investing in a
diversified portfolio comprised primarily of common stocks and equity-related
securities of the countries of the Pacific Rim region.
NET ASSETS: $19.6 million
INCEPTION DATE: October 4, 1994
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Pacific Rim Emerging Markets Fund* $11,258
Pacific Region Funds Average - Lipper VA Universe $10,630
Blended Financial Times Actuaries Index** $10,762
Financial Times Actuaries World ex-US Index $10,085
</TABLE>
GEOGRAPHICAL WEIGHTINGS
<TABLE>
<S> <C>
Australia 19 %
Malaysia 16 %
Hong Kong 12 %
Japan 13 %
Other 14 %
Cash 26 %
</TABLE>
LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
COMPANY % OF FUND
<S> <C>
WMC Limited 2.2
YTL Corp. 1.8
HSBC Holdings 1.7
National Australia Bank 1.6
Tab Corp. Holdings Ltd. 1.6
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
YTD 1 YEAR INCEPTION
<S> <C> <C>
7.03% 15.80% 7.05%
</TABLE>
PORTFOLIO MANAGER'S COMMENTARY
The Pacific Rim Emerging Markets Fund returned 7.03% for the six months ending
June 30, 1996.
Pacific Asia markets were mixed. Malaysia, Japan, Indonesia, and Hong Kong
joined other world markets in posting solid advances of 10% or better in local
currency terms. But Australia drifted in a narrow range, gaining just 2%,
Singapore was nearly unchanged, and Thailand fell 0.3%.
In Malaysia, improving macro-economic fundamentals, inflows of foreign money,
and strong GDP growth contributed to a gain of 14%. The Japanese market
roseabout 13%, mostly in the second quarter, due to a gradual economic recovery,
a weaker yen, relatively steady interest rates, and improving profits. The Thai
market struggled on several counts, including poor company results and worries
over interest rates, and ended down 0.3%.
The relative performance of the fund during the first six months was mainly
attributable to overweighting of Thai stocks.
Cash holdings were raised from 14% to 22% as managers became more cautious of
markets.
*Results are net of investment advisor and expense fees. Investment advisory
fees are deducted daily, at an annual rate of .85%, and expense fees are
deducted daily at a rate of up to .65%. The advisory fee will drop to .70% on
assets in excess of $100 million. The data shown indicate past performance and
are not representative of expected future results. Actual investment return and
principal value will fluctuate so that an investment in the fund when redeemed
may be worth more or less than when purchased. Policy charges are not included.
Results would be lower if they were.
** Comprising 80% of the Financial Times Actuaries Pacific ex-Japan Index, and
20% of the Japan Index.
11
<PAGE> 14
EQUITY INDEX FUND
INVESTMENT OBJECTIVE: To achieve investment results which approximate the total
return of publicly traded common stocks in the aggregate, as represented by the
Standard & Poor's 500? Composite Stock Price Index.
Net Assets: $2.5 million
INCEPTION DATE: February 14, 1996
CHANGE IN VALUE OF A $10,000 INVESTMENT SINCE INCEPTION TO JUNE 30, 1996
[FIGURE]
<TABLE>
<S> <C>
Equity Index Fund* $10,371
S&P 500 Funds Average - Lipper VA Universe $10,331
Standard & Poor's 500 Index (with dividends reinvested) $10,349
</TABLE>
ASSET MIX
<TABLE>
<S> <C>
Consumer 35 %
Interest-Sensitive 25 %
Basic Industry 20 %
Capital Goods 20 %
</TABLE>
STOCKS UNDERLYING THE S&P 500? INDEX
LARGEST HOLDINGS
STOCKS UNDERLYING THE S&P 500? INDEX
<TABLE>
<CAPTION>
COMPANY % OF FUND
<S> <C>
General Electric Company 2.9
Coca Cola Enterprises Inc. 2.4
Exxon Corp. 2.2
AT&T Corp. 1.9
Philip Morris Companies Inc. 1.7
</TABLE>
TOTAL RETURN SINCE INCEPTION
FEBRUARY 14, 1996 TO JUNE 30, 1996
3.71%
PORTFOLIO MANAGER'S COMMENTARY
The Equity Index Fund, launched on February 14, 1996, returned 3.71% for the
period from inception to June 30, 1996.
The year opened with the bond market still jittery overthe federal budget
deadlock. The stock market nonetheless advanced to record levels, propelled by
better than expected earnings reports from some key blue chip companies. When
signs of stronger growth forced interest rates up, the market gave back some of
its gains. But the climb resumed in the second quarter as corporate profits
continued to rise, although more slowly than in months just prior, and the flow
of cash into mutual funds continued at a record pace.
Technology stocks, which had a tremendous run through 1995, retreated over the
six months on indications of slower growth in the sector.
The fund was launched in response to a need among our variable universal life
insurance policyowners for an economical and convenient means of maintaining a
widely diversified investment in the U.S. equity market as part of an overall
investment strategy.
The Standard & Poor's 500? Index is an index of unmanaged groups of 500
selected common stocks, most of which are listed on the New York Stock
Exchange. The index is heavily weighted toward stocks with large market
capitalizations and represents more than 70% of the total market value of all
domestic common stocks.
*Results are net of investment advisory fee, deducted daily, at an annual rate
of .25%, and expense fees are deducted daily at a rate of up to .15%. The data
shown indicate past performance and are not representative of expected future
results. Actual investment return and principal value will fluctuate so that an
investment in the fund when redeemed may be worth more or less than when
purchased. Policy charges are not included. Results would be lower if they
were.
"Standard & Poor's " and "S&P" are trademarks of McGraw-Hill, Inc. and have
been licensed for use by Manulife Financial. The Equity Index Fund is not
sponsored, endorsed, sold or promoted by Standard & Poor's and Standard &
Poor's makes no representation regarding the advisability of investing in the
Fund.
12
<PAGE> 15
RESULTS OF SPECIAL MEETING OF SHAREHOLDERS
On February 14, 1996 a special meeting of shareholders of Manulife Series Fund
(the "Fund") was held for the purpose of considering and voting upon:
PROPOSAL 1: ratification and approval of the Investment Advisory Agreement
between the Fund and Manufacturers Adviser Corporation ("MAC") and
approval of an amendment to that agreement applicable solely to the
Equity Index Fund.
PROPOSAL 2: ratification and approval of the Service Agreement between the Fund
and MAC and The Manufacturers Life Insurance Company.
PROPOSAL 3: approval of an amendment to the fundamental restriction of the Fund
regarding purchase of commodities and commodity contracts to permit
the Equity Index Fund to purchase and sell S&P 500 Stock Index
futures contacts.
At the meeting, all of the 65,000 outstanding shares of the Equity Index Fund
voted to approve each of the three proposals. There were no votes cast against
any of the proposals and no abstentions.
13
<PAGE> 16
STATEMENT OF INVESTMENTS
& FINANCIAL STATEMENTS
14
<PAGE> 17
EMERGING GROWTH EQUITY FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
BIOTECHNOLOGY 4.2%
* American Biogenetic Sciences 270,620 $1,640,634
* Integra Lifesciences Corp. 181,700 1,771,575
* Liposome Inc. 125,900 2,360,625
* Medarex Inc. 144,300 1,172,437
* Molecular Biosystems Inc. 126,400 1,137,600
-----------
8,082,871
-----------
BUILDING MATERIALS 2.0%
* Furniture Brands International Inc. 101,800 1,119,800
Texas Industries Inc. 38,300 2,628,338
-----------
3,748,138
-----------
CHEMICALS & FERTILIZERS 1.6%
* Photran Corp. 37,900 379,000
* Tetra Technologies Inc. 155,200 2,696,600
-----------
3,075,600
-----------
COMMUNICATIONS EQUIPMENT 7.6%
Allen Group Inc. 76,000 1,653,000
* Digi International Inc. 140,300 3,753,025
* First Pacific Networks Inc. 494,800 1,113,300
* ITI Technologies Inc. 62,900 2,075,700
* Spectrum Control Inc. 124,500 606,937
* Teltrend Inc. 135,200 5,239,000
-----------
14,440,962
-----------
COMPUTER HARDWARE 1.4%
* Cylink Corp. 20,500 353,625
* Pinnacle Systems Inc. 110,800 2,299,100
-----------
2,652,725
-----------
DRUGS 4.0%
* Depotech Corp. 96,200 2,429,050
* Matrix Pharmaceuticals 157,400 2,833,200
* Sciclone Pharmaceuticals Inc. 165,100 2,290,763
-----------
7,553,013
-----------
ELECTRICAL EQUIPMENT 3.0%
Belden Inc. 82,200 2,466,000
* Fischer Imaging Corp. 190,700 2,288,400
* Tencor Instruments 52,100 983,387
-----------
5,737,787
-----------
ELECTRONICS 9.9%
* Advanced Energy Industries Inc. 87,300 676,575
Charter Power Systems Inc. 115,200 4,003,200
Harman International Industries Inc. 103,700 5,107,225
* LTX Corp. 237,100 1,481,875
* Mackie Designs Inc. 209,000 2,351,250
* NU Horizons Electronics Corp. 200,900 2,222,456
Wyle Electronics 92,600 3,067,375
-----------
18,909,956
-----------
ENGINEERING & CONSTRUCTION 1.5%
American Buildings Company 97,700 $2,857,725
-----------
ENTERTAINMENT 2.0%
* Cannondale Corp. 145,600 2,948,400
* Premier Parks Inc. 37,900 814,850
-----------
3,763,250
-----------
FINANCE: INSURANCE 0.8%
American Travellers Corp. 67,500 1,552,500
-----------
HOSPITAL MANAGEMENT 1.7%
* Inphynet Medical Management Inc. 169,200 3,172,500
-----------
HOSPITAL SUPPLIES 7.4%
* American Homepatient Inc. 38,000 1,681,500
* Applied Biomedical Inc. 88,400 1,403,350
* Coherent Inc. 72,300 3,759,600
* Imagyn Medical Inc. 126,100 1,387,100
* Lifecore Biomedical Inc. 60,100 1,277,125
* Mednet MPC Inc. 93,300 180,769
* Urocor Inc. 25,300 309,925
* Ventritex Inc. 108,000 1,849,500
* VISX Inc. 64,600 2,204,475
-----------
14,053,344
-----------
HOTELS 2.2%
* Prime Hospitality Corp. 252,200 4,161,300
-----------
MACHINERY 3.1%
* Hadco Corp. 132,600 2,850,900
Measurex Corp. 105,900 3,097,575
-----------
5,948,475
-----------
MANUFACTURING 3.6%
* Altron Inc. 148,950 3,016,238
* Electroglas Inc. 34,000 484,500
LSI Industries Inc. 200,800 3,463,800
-----------
6,964,538
-----------
OFFICE EQUIPMENT 1.5%
* Daisytek International Corp. 66,200 2,780,400
-----------
OIL SERVICES 11.6%
Camco International Inc. 27,400 928,175
* Cliffs Drilling Company 77,500 2,635,000
* Energy Ventures Inc. 76,000 2,470,000
* Falcon Drilling 43,200 1,171,800
* Global Industries Inc. 147,000 4,373,250
* Marine Drilling Companies Inc. 320,900 3,249,112
* Maverick Tube Corp. 209,900 2,466,325
* Pride Petroleum Services Inc. 219,900 3,133,575
* Tuboscope Vetco International Inc. 163,900 1,823,388
-----------
22,250,625
-----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
15
<PAGE> 18
EMERGING GROWTH EQUITY FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
PAPER & FOREST PRODUCTS 1.9%
Caraustar Industries Inc. 135,200 $3,582,800
-----------
POLLUTION CONTROL 0.7%
* GTS Duratek Inc. 80,400 1,306,500
-----------
RETAIL 1.9%
* Brightpoint Inc. 165,700 3,562,550
* First Team Sports 9,700 104,275
-----------
3,666,825
-----------
SOFTWARE 11.2%
* Applix Inc. 67,400 1,937,750
* Checkfree Corp. 101,000 2,007,375
* Control Data Systems Inc. 122,300 2,614,163
* Eagle River Interactive Inc. 97,000 1,915,750
Henry Jack & Associates Inc. 157,600 5,358,400
* MicroCom Inc. 298,200 3,764,775
* Network Equipment Technologies 99,800 2,120,750
* Open Market Inc. 12,600 307,125
* Tecnomatix Technologies Ltd. 76,400 1,451,600
-----------
21,477,688
-----------
TELEPHONE 5.3%
* Arch Communications Group Inc. 89,600 1,668,800
* Atlantic Telephone Network Inc. 47,700 1,144,800
* Global Star Telecom 93,500 4,137,375
* Metrocall Inc. 147,200 1,637,600
* Mobilemedia Corp. 132,700 1,608,988
-----------
10,197,563
-----------
TEXTILES 3.1%
* Quiksilver Inc. 78,100 2,343,000
Wolverine World Wide Inc. 107,400 3,490,500
-----------
5,833,500
-----------
TRANSPORTATION 1.8%
* Stolt Nielsen 194,500 3,525,312
-----------
TOTAL COMMON STOCK 94.8% 181,295,897
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
CANADIAN GOVERNMENT AGENCIES 3.3%
Canadian Wheat Board 5.350%
due 07/08/1996 350,000 $349,636
Export Development Corp. 5.250%
due 07/08/1996 370,000 369,622
Her Majesty in Right of Canada
5.250% due 07/10/1996 5,000,000 4,993,437
5.350% due 07/08/1996 650,000 649,324
-----------
6,362,019
-----------
TOTAL SHORT TERM INVESTMENT 3.3% 6,362,019
-----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 0.7%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$1,326,281 U.S. Treasury Bond, 8.125%,
due 05/15/2021 1,300,000 $1,300,000
------------
TOTAL INVESTMENTS 98.8% 188,957,916
------------
OTHER ASSETS LESS
LIABILITIES 1.2% 2,234,736
------------
NET ASSETS - EQUIVALENT TO $24.74 PER SHARE
BASED ON 7,729,562 SHARES OF CAPITAL
STOCK OUTSTANDING. 100% $191,192,652
============
</TABLE>
16
<PAGE> 19
COMMON STOCK FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
AUTOMOBILES 3.5%
Amoco Corp. 10,600 $767,175
Chrysler Corp. 15,400 954,800
Ford Motor Company 28,100 909,738
----------
2,631,713
----------
BIOTECHNOLOGY 1.2%
U.S. Healthcare Inc. 16,500 907,500
----------
CHEMICALS & FERTILIZERS 2.7%
Dow Chemical Company 11,100 843,600
Engelhard Corp. 32,400 745,200
B.F. Goodrich Company 11,700 437,288
----------
2,026,088
----------
COMMUNICATIONS 0.1%
*Paging Network Inc. 2,000 48,000
----------
COMPUTER HARDWARE 3.2%
*Cadence Design Systems Inc. 10,050 339,187
*Digital Equipment Corp. 9,300 418,500
*Silicon Graphics Inc. 14,900 357,600
*Sun Microsystems Inc. 17,800 1,047,975
*U.S. Robotics Corp. 2,900 247,950
----------
2,411,212
----------
CONGLOMERATE 1.2%
*ITT Corp. 14,100 934,125
----------
DRUGS 5.1%
American Home Products Corp. 17,000 1,022,125
Bristol Myers Squibb Company 10,700 963,000
Schering Plough Corp. 16,600 1,041,650
Warner Lambert Company 14,90 819,500
----------
3,846,275
----------
ELECTRICAL EQUIPMENT 1.8%
General Electric Company 16,100 1,392,650
----------
ELECTRONICS 4.5%
*3COM Corp. 11,400 521,550
*Applied Materials Inc. 19,400 591,700
*Cabletron Systems Inc. 7,000 480,375
Intel Corp. 10,500 771,094
Linear Technology Corp. 19,800 594,000
*LSI Logic Corp. 17,900 465,400
----------
3,424,119
----------
ENGINEERING & CONSTRUCTION 2.0%
Dresser Industries Inc. 26,200 772,900
Fluor Corp. 11,500 751,812
----------
1,524,712
----------
ENTERTAINMENT 3.1%
Carnival Corp. 26,400 $762,300
HBO & Company 7,600 514,900
*Mirage Resorts Inc. 8,200 442,800
*Viacom Inc. Class 'B' 16,900 656,988
----------
2,376,988
----------
FINANCE & BANKING 13.6%
American International Group Inc. 8,500 838,312
Banc One Corp. 23,300 792,200
BankAmerica Corp. 4,900 371,175
Bankers Trust New York Corp. 12,400 916,050
Chase Manhattan Corp. 14,000 988,750
Chubb Corp. 14,200 708,225
Citicorp 9,900 817,987
Firstar Corp. 5,800 267,525
Fleet Financial Group Inc. 19,300 839,550
Marsh & McLennan Companies Inc. 8,700 839,550
MBNA Corp. 23,900 681,150
J.P. Morgan & Company Inc. 8,700 736,238
Northern Trust Corp. 5,200 300,300
SunAmerica Inc. 4,700 265,550
Travelers Group Inc. 21,750 992,344
----------
10,354,906
----------
FOODS & BEVERAGES 4.2%
Campbell Soup Company 11,800 831,900
Pepsico Inc. 37,400 1,323,025
Quaker Oats Company 23,200 791,700
*Vons Companies Inc. 6,100 227,988
----------
3,174,613
----------
FUNERAL SERVICES 0.1%
Service Corp. International 800 46,000
----------
HOSPITAL MANAGEMENT 0.4%
*Health Management Association 13,200 267,300
----------
HOSPITAL SUPPLY 1.0%
Becton Dickinson & Company 9,700 778,425
----------
HOUSEHOLD PRODUCTS 3.4%
Black & Decker Corp. 21,300 822,712
Clorox Company 4,100 363,362
Colgate Palmolive Company 10,800 915,300
Rubbermaid Inc. 17,000 463,250
----------
2,564,624
----------
MACHINERY 1.0%
Case Corp. 5,000 240,000
Cooper Industries Inc. 12,800 531,200
----------
771,200
----------
NATURAL GAS PIPELINES 0.7%
Coastal Corp. 13,600 567,800
----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
17
<PAGE> 20
COMMON STOCK FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
OIL & OIL SERVICES 9.7%
Amerada Hess Corp. 8,000 $429,000
Atlantic Richfield Company 8,600 1,019,100
Chevron Corp. 14,900 879,100
Exxon Corp. 15,500 1,346,563
Halliburton Company 8,800 488,400
Mobil Corp. 12,000 1,345,500
Texaco Inc. 12,100 1,014,887
Tidewater Inc. 10,100 443,138
USX Marathon Group 21,200 426,650
----------
7,392,338
----------
PAPER & FOREST PRODUCTS 1.9%
Georgia Pacific Corp. 7,000 497,000
Kimberly Clark Corp. 12,600 973,350
----------
1,470,350
----------
PUBLISHING 1.1%
Gannett Inc. 12,300 870,225
----------
RETAIL 8.9%
Albertsons Inc. 15,500 641,312
American Stores Company 6,700 276,375
Dayton Hudson Corp. 8,900 917,813
Dillard Department Stores Inc. 20,000 730,000
*Federated Department Stores Inc. 16,100 549,412
Liz Claiborne 5,800 200,825
Nike Inc. 6,600 678,150
*Office Max Inc. 6,600 157,575
Sears Roebuck & Company 20,800 1,011,400
*Tommy Hilfiger Corp. 8,100 434,363
*Toys R Us Inc. 20,400 581,400
Wal-Mart Stores Inc. 23,300 591,237
----------
6,769,862
----------
SOFTWARE 4.1%
*America On-Line Inc. 2,900 126,875
*Cisco Systems Inc. 16,200 917,325
*Informix Corp. 26,500 596,250
*Microsoft Corp. 7,700 924,963
Paychex Inc. 11,700 563,062
----------
3,128,475
----------
TELEPHONE 6.5%
*Airtouch Communications Inc. 25,800 728,850
Bellsouth Corp. 17,500 741,563
GTE Corp. 18,700 836,825
LCI International Inc. 10,800 338,850
MCI Communications Corp. 25,000 640,625
NYNEX Corp. 21,100 1,002,250
Pacific Telesis Group 19,500 658,125
----------
4,947,088
----------
TOBACCO 1.9%
Philip Morris Companies Inc. 13,800 1,435,200
----------
TRANSPORTATION 2.4%
*AMR Corp. 9,900 $900,900
Southwest Airlines Company 31,700 923,263
----------
1,824,163
----------
UTILITIES: ELECTRIC 5.2%
*Calenergy Inc. 11,000 280,500
Dominion Resources Inc. 18,000 720,000
Duke Power Company 15,900 814,875
FPL Group Inc. 19,100 878,600
Pacific Gas & Electric Company 23,600 548,700
Pinnacle West Capital Corp. 7,100 215,662
Southern Company 21,500 529,437
----------
3,987,774
----------
TOTAL COMMON STOCK 94.5% 71,873,725
----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES 1.2%
Federal Natl. Mortgage Assoc. 5.000%
due 07/12/1996 910,000 $908,610
----------
CANADIAN GOVERNMENT AGENCIES 2.3%
Export Development Corp. 5.900%
due 08/08/1995 748,000 747,236
Her Majesty in Right of Canada
5.350% due 07/08/96 1,000,000 998,960
----------
1,746,196
----------
TOTAL SHORT TERM INVESTMENTS 3.5% 2,654,806
----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 2.1%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$1,636,600 Federal Home Loan
Mortgage Corporation ("FHLMC"),
5.00%, due 05/15/2014 1,600,000 $1,600,000
-----------
TOTAL INVESTMENTS 100.1% 76,128,531
-----------
OTHER ASSETS LESS
LIABILITIES (0.1%) (96,433)
-----------
NET ASSETS - EQUIVALENT TO $18.73 PER SHARE
BASED ON 4,059,539 SHARES OF CAPITAL STOCK
OUTSTANDING. 100.0% $76,032,098
===========
</TABLE>
18
<PAGE> 21
REAL ESTATE SECURITIES FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
BUILDING 9.4%
*D.R. Horton Inc. 59,184 $621,432
Fleetwood Enterprises Inc. 9,300 288,300
*Hovnanian Enterprises Inc. 99,800 592,563
Owens Corning 7,000 301,000
*Schottenstein Homes Inc. 57,500 531,875
Sherwin Williams Company 13,300 618,450
Stanley Works 22,500 669,375
*Toll Brothers Inc. 65,900 1,079,112
Webb (Del) Corp. 31,000 620,000
--------- ----------
5,322,107
----------
FINANCE: HEALTHCARE 4.9%
Health Care Property Investments Inc. 33,800 1,140,750
Nationwide Health Properties Inc. 78,200 1,651,975
--------- ----------
2,792,725
----------
FINANCE: REAL ESTATE 78.1%
Ambassador Apartments Inc. 32,000 540,000
Bay Apartment Community Inc. 63,700 1,648,238
Beacon Properties 62,500 1,601,562
Bradley Real Estate Inc. 37,700 546,650
BRE Properties Inc. 46,200 900,900
Cali Realty Corp. 50,100 1,214,925
CarrAmerica Realty Corp. 45,000 1,080,000
*Catellus Development Corp. 61,500 561,188
Centerpoint Properties Corp. 54,500 1,321,625
Developers Diversified Realty 17,100 545,062
Duke Realty Investments Inc. 55,900 1,690,975
Equity Residential Properties Trust 35,200 1,157,200
Evans Withycombe Residential 75,900 1,584,413
Federal Realty Investment Trust 19,300 434,250
Felcor Suite Hotels Inc. 38,900 1,186,450
General Growth Properties Inc. 46,600 1,124,225
Highwoods Properties Inc. 50,400 1,392,300
Irvive Apartment Communities Inc. 55,500 1,116,937
JDN Realty Corp. 11,100 248,363
JP Realty Inc. 80,000 1,710,000
Kimco Realty Corp. 62,000 1,751,500
Liberty Property 25,600 508,800
Meditrust 38,200 1,274,925
Merry Land and Investment Company 66,200 1,390,200
National Golf Properties Inc. 50,900 1,234,325
Oasis Residential Inc. 28,000 612,500
Post Properties Inc. 33,900 1,199,212
Public Storage Inc. 60,900 1,256,062
Reckson Associaties Realty Corp. 35,500 1,171,500
ROC Communities Inc. 57,700 1,377,588
Security Capital Industrial Trust 31,400 553,425
Security Capital Pacific Trust 27,500 598,125
Shurgard Storage Centers Inc. 63,600 1,605,900
South West Property Trust Inc. 82,000 1,096,750
Sovran Self Storage Inc. 63,500 1,682,750
Storage Trust Realty 24,400 500,200
Summit Properties 30,300 594,637
Sun Communities Inc. 52,600 1,413,625
United Dominion Realty Trust Inc. 112,400 1,615,750
Weingarten Realty Investments 34,200 1,325,250
----------
44,368,287
----------
LODGING & RESTAURANTS 2.1%
Marriott International Inc. 22,400 1,204,000
----------
MORTGAGE FINANCE 1.0%
CMAC Investment Corp. 10,200 586,500
----------
RETAIL 0.9%
Home Depot Inc. 5,000 270,000
Hughes Supply Inc. 7,300 253,675
----------
523,675
----------
TOTAL COMMON STOCK 96.4% 54,797,294
----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 1.8%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$1,021,519 U.S. Treasury Bond, 8.125%,
due 05/15/2021 1,000,000 $1,000,000
-----------
TOTAL INVESTMENTS 98.1% 55,797,294
-----------
OTHER ASSETS LESS
LIABILITIES 1.9% 1,063,069
-----------
NET ASSETS - EQUIVALENT TO $16.01
PER SHARE BASED ON 3,550,678 SHARES
OF CAPITAL STOCK OUTSTANDING. 100.0% $56,860,363
===========
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
19
<PAGE> 22
BALANCED ASSETS FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S GOVERNMENT OBLIGATIONS 6.2%
United States Treasury Bonds 7.625%
due 02/15/2025 945,000 $1,018,238
United States Treasury Bonds 6.875%
due 08/15/2025 200,000 197,968
United States Treasury Notes 4.375%
due 11/15/1996 745,000 741,975
United States Treasury Notes 6.500%
due 05/15/1997 260,000 261,667
United States Treasury Notes 5.125%
due 04/30/1998 500,000 491,560
United States Treasury Notes 5.875%
due 08/15/1998 1,175,000 1,167,844
United States Treasury Notes 6.250%
due 08/31/2000 650,000 645,430
United States Treasury Notes 5.750%
due 10/31/2000 70,000 68,184
United States Treasury Notes 6.250%
due 02/15/2003 985,000 967,605
United States Treasury Notes 7.875%
due 11/15/2004 205,000 220,342
United States Treasury Notes 6.500%
due 08/15/2005 545,000 537,163
United States Treasury Notes 5.875%
due 11/15/2005 1,385,000 1,304,712
-----------
TOTAL U.S. GOVERNMENT 7,622,688
-----------
CANADIAN GOVERNMENT 1.8%
Province of Ontario 8.000%
due 10/17/2001 1,000,000 1,047,930
Province of Quebec 8.800%
due 04/15/2003 1,000,000 1,091,300
-----------
2,139,230
-----------
ITALIAN GOVERNMENT 0.7%
Republic of Italy 6.875%
due 09/27/2023 1,000,000 901,720
-----------
CHINESE GOVERNMENT 0.8%
Peoples Republic of China
7.375% due 07/03/2001 1,000,000 1,007,360
-----------
TOTAL FOREIGN GOVERNMENT 3.3% 4,048,310
-----------
TOTAL GOVERNMENT 9.6% 11,670,998
-----------
BANKING 6.3%
Bank of Nova Scotia Halifax 9.000%
due 10/01/1999 1,000,000 $1,056,490
Bank of New York Inc. 6.625%
due 06/15/2003 1,000,000 966,610
BankAmerica Corp. 8.125%
due 02/01/2002 1,000,000 1,050,450
BCH Cayman Islands Ltd. 6.500%
due 02/15/2006 1,000,000 922,080
Citicorp 7.125%
due 06/01/2003 500,000 500,400
Kansallis Osake Pankki N Y 10.000%
due 05/01/2002 1,000,000 1,128,070
MBNA Corp. 7.490%
due 09/14/1999 1,000,000 1,018,340
Nationsbank Corp. 4.750%
due 08/15/1996 500,000 499,385
Republic of New York Corp. 9.500%
due 04/15/2014 500,000 585,460
-----------
7,727,285
-----------
BUSINESS CREDIT INSTITUTIONS 1.6%
Avco Financial Services Inc. 7.500%
due 11/15/1996 500,000 502,955
Chrysler Financial Corp. 5.875%
due 02/07/2001 1,000,000 960,920
CIT Group Holdings Inc. 8.750%
due 04/15/1998 500,000 518,575
-----------
1,982,450
-----------
COMMUNICATIONS EQUIPMENT 0.9%
GTE Corp. 8.750%
due 11/01/2021 1,000,000 1,111,420
-----------
ELECTRIC UTILITIES 3.2%
Baltimore Gas & Electric Co. 6.125%
due 07/01/2003 1,000,000 948,820
Carolina Power & Light Co. 6.875%
due 10/01/1998 500,000 493,735
Northern States Power Co. 7.875%
due 10/01/2001 1,000,000 1,036,010
Pacific Gas & Electric Co. 6.250%
due 08/01/2003 1,000,000 949,890
Philadelphia Electric Co. 6.500%
due 05/01/2003 500,000 480,410
-----------
3,908,865
-----------
</TABLE>
See Accompanying Notes
20
<PAGE> 23
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
FOODS & BEVERAGES 1.6%
Coca Cola Enterprises Inc. 8.500%
due 02/01/2022 1,000,000 $1,094,290
IBP Inc. 7.125%
due 02/01/2026 1,000,000 905,850
-----------
2,000,140
-----------
FUNERAL SERVICES 0.8%
Service Corp. International 6.750%
due 06/01/2001 1,000,000 993,150
-----------
HOSPITAL MANAGEMENT 0.9%
Columbia / HCA Healthcare Corp.
8.700% due 02/10/2010 1,000,000 1,093,090
-----------
HOUSEHOLD PRODUCTS 1.0%
Procter & Gamble ESOP 9.360%
due 01/01/2021 1,000,000 1,184,550
-----------
LODGING & RESTAURANTS 0.8%
ITT Corp. 6.250%
due 11/15/2000 1,000,000 970,610
-----------
NATURAL GAS 0.8%
Columbia Gas Systems Inc. 7.050%
due 11/28/2007 1,000,000 958,590
-----------
NEWSPAPERS 0.9%
News America Holdings Inc. 8.500%
due 02/15/2005 1,000,000 1,051,120
-----------
PERSONAL CREDIT INSTITUTIONS 3.3%
Associates Corp. of North America 6.125%
due 02/01/1998 500,000 497,475
Commercial Credit Group Inc. 7.375%
due 04/15/2005 1,000,000 1,002,200
Ford Motor Credit Corp. 6.375%
due 04/15/2000 1,000,000 981,050
General Electric Capital Corp. 8.850%
due 04/01/2005 500,000 552,410
Household Finance Corp. 7.750%
due 06/01/1999 1,000,000 1,023,020
-----------
4,056,155
-----------
PETROLEUM 0.8%
Ultramar Corp. Medium Term Note 8.000%
due 03/15/2005 1,000,000 1,028,280
-----------
REAL ESTATE 0.8%
MEPC Financial Inc. 7.500%
due 05/01/2003 1,000,000 $1,007,850
-----------
SECURITIES BROKERS & DEALERS 1.6%
Donaldson Lufkin & Jenrette 5.625%
due 02/15/2016 1,000,000 949,880
Salomon Inc. 5.75%
due 03/31/1998 1,000,000 982,920
-----------
1,932,800
-----------
TELEPHONE 2.5%
MCI Communications Corp. 7.750%
due 03/23/2025 1,000,000 981,940
New Jersey Bell Telephone Co. 5.875%
due 12/01/2006 500,000 447,950
New York Telephone Co. 7.000%
due 12/01/2033 1,000,000 901,300
Pacific Bell 6.625%
due 10/15/2034 900,000 773,712
-----------
3,104,902
-----------
TOTAL CORPORATE 28.0% 34,111,257
-----------
TOTAL BONDS 37.5% 45,782,255
-----------
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
AUTOS/AUTO RELATED 1.9%
Amoco Corp. 9,400 $680,325
Chrysler Corp. 13,700 849,400
Ford Motor Company 24,700 799,662
-----------
2,329,387
-----------
BIOTECHNOLOGY 0.6%
U.S. Healthcare Inc. 14,300 786,500
-----------
CHEMICALS & FERTILIZERS 1.5%
Dow Chemical Company 9,600 729,600
Engelhard Corp. 30,100 692,300
B.F. Goodrich Company 10,400 388,700
-----------
1,810,600
-----------
COMMUNICATIONS 0.0%
* Paging Network Inc. 1,800 43,200
-----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
21
<PAGE> 24
BALANCED ASSETS FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
COMPUTER HARDWARE 1.8%
*Cadence Design Systems Inc. 9,250 $312,187
*Digital Equipment Corp. 8,000 360,000
*Silicon Graphics Inc. 17,600 422,400
*Sun Microsystems Inc. 14,400 847,800
*U.S. Robotics Corp. 2,600 222,300
----------
2,164,687
----------
CONGLOMERATE 0.7%
*ITT Corp. 12,600 834,750
----------
DRUGS 2.8%
American Home Products Corp. 14,800 889,850
Bristol Myers Squibb Company 9,500 855,000
Schering Plough Corp. 15,300 960,075
Warner Lambert Company 13,200 726,000
----------
3,430,925
----------
ELECTRICAL EQUIPMENT 1.0%
General Electric Company 14,500 1,254,250
----------
ELECTRONICS 2.6%
*3COM Corp. 11,700 535,275
*Applied Materials Inc. 16,900 515,450
*Cabletron Systems Inc. 6,800 466,650
Intel Corp. 9,400 690,313
Linear Technology Corp. 17,900 537,000
*LSI Logic Corp. 17,700 460,200
----------
3,204,888
----------
ENGINEERING & CONSTRUCTION 1.1%
Dresser Industries Inc. 25,500 752,250
Fluor Corp. 9,600 627,600
----------
1,379,850
----------
ENTERTAINMENT 1.6%
Carnival Corp. 21,300 615,037
HBO & Company 6,800 460,700
*Mirage Resorts Inc. 7,300 394,200
*Viacom Inc. Class 'B' 13,800 536,475
----------
2,006,412
----------
FINANCE: BANKS 4.7%
Banc One Corp. 20,000 680,000
BankAmerica Corp. 4,400 333,300
Bankers Trust New York Corp. 11,400 842,175
Chase Manhattan Corp. 12,400 875,750
Citicorp 8,700 718,837
Firstar Corp. 4,800 221,400
Fleet Financial Group Inc. 16,900 735,150
MBNA Corp. 23,150 659,775
J.P. Morgan & Company Inc. 8,200 693,925
----------
5,760,312
----------
FINANCE: CONSUMER & OTHER 1.1%
Northern Trust Corp. 4,300 $248,325
SunAmerica Inc. 4,400 248,600
Travelers Group Inc. 18,750 855,469
----------
1,352,394
----------
FINANCE: INSURANCE 1.9%
American International Group Inc. 8,600 848,175
Chubb Corp. 14,400 718,200
Marsh & McLennan Companies Inc. 7,800 752,700
----------
2,319,075
----------
FOODS & BEVERAGES 2.3%
Campbell Soup Company 9,700 683,850
Pepsico Inc. 33,800 1,195,675
Quaker Oats Company 21,000 716,625
*Vons Companies Inc. 5,400 201,825
----------
2,797,975
----------
FUNERAL SERVICES 0.0%
Service Corp. International 700 40,250
----------
HOSPITAL MANAGEMENT 0.2%
*Heath Management Association 11,250 227,813
----------
HOSPITAL SUPPLY 0.6%
Becton Dickinson & Company 9,400 754,350
----------
HOUSEHOLD PRODUCTS 1.8%
Black & Decker Corp. 18,800 726,150
Clorox Company 3,700 327,913
Colgate Palmolive Company 9,100 771,225
Rubbermaid Inc. 15,000 408,750
----------
2,234,038
----------
MACHINERY 0.6%
Case Corp. 4,200 201,600
Cooper Industries Inc. 11,800 489,700
----------
691,300
----------
NATURAL GAS PIPELINES 0.4%
Coastal Corp. 13,000 542,750
----------
OIL & OIL SERVICES 5.4%
Amerada Hess Corp. 7,400 396,825
Atlantic Richfield Company 7,600 900,600
Chevron Corp. 12,400 731,600
Exxon Corp. 13,600 1,181,500
Halliburton Company 8,100 449,550
Mobil Corp. 10,800 1,210,950
Texaco Inc. 11,100 931,012
Tidewater Inc. 9,300 408,037
USX Marathon Group 18,700 376,338
----------
6,586,412
----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
22
<PAGE> 25
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
PAPER & FOREST PRODUCTS 1.1%
Georgia Pacific Corp. 6,200 $440,200
Kimberly Clark Corp. 11,700 903,825
-----------
1,344,025
-----------
PUBLISHING 0.6%
Gannett Inc. 10,600 749,950
-----------
RETAIL 5.1%
Albertsons Inc. 15,000 620,625
American Stores Corp. 6,000 247,500
Dayton Hudson Corp. 7,800 804,375
Dillard Department Stores Inc. 17,800 649,700
*Federated Department Stores Inc. 14,600 498,225
Liz Claiborne 4,900 169,663
Nike Inc. 5,600 575,400
*Office Max Inc. 5,900 140,862
Sears Roebuck & Company 20,100 977,363
*Tommy Hilfiger Corp. 7,700 412,912
*Toys R Us Inc. 18,000 513,000
Wal-Mart Stores Inc. 25,700 652,138
-----------
6,261,763
-----------
SOFTWARE 2.3%
*America On-Line Inc. 2,000 87,500
*Cisco Systems Inc. 14,100 798,413
*Informix Corp. 27,800 625,500
*Microsoft Corp. 6,400 768,800
Paychex Inc. 10,200 490,875
-----------
2,771,088
-----------
TELEPHONE 3.8%
*Airtouch Communications Inc. 24,800 700,600
Bellsouth Corp. 15,500 656,813
GTE Corp. 17,400 778,650
LCI International Inc. 9,500 298,062
MCI Communications Corp. 26,200 671,375
NYNEX Corp. 19,300 916,750
Pacific Telesis Group 19,000 641,250
-----------
4,663,500
-----------
TOBACCO 1.1%
Philip Morris Companies Inc. 12,800 1,331,200
-----------
TRANSPORTATION 1.3%
*AMR Corp. 8,400 764,400
Southwest Airlines Company 29,700 865,012
-----------
1,629,412
-----------
UTILITIES: ELECTRIC 3.0%
*Calenergy Inc. 10,200 260,100
Dominion Resources Inc. 16,100 644,000
Duke Power Company 13,900 712,375
FPL Group Inc. 17,600 809,600
Pacific Gas & Electric Company 21,800 506,850
Pinnacle West Capital Corp. 6,000 182,250
Southern Company 23,200 571,300
-----------
3,686,475
-----------
TOTAL COMMON STOCK 53.3% 64,989,531
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES 0.8%
Federal National Mortgage Assoc.
5.000% due 07/12/1996 930,000 $928,579
------------
CANADIAN GOVERNMENT 7.2%
AGENCIES
Canadian Wheat Board 5.350%
due 07/08/1996 5,000,000 4,994,799
Export Development Corp. 5.250%
due 07/08/1996 3,167,000 3,163,767
Her Majesty in Right of Canada
5.250% due 07/10/1996 600,000 599,212
------------
8,757,778
------------
TOTAL SHORT TERM INVESTMENTS 7.9% 9,686,357
------------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 2.0%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$2,450,000 FHLMC, 5.00%,
due 05/15/2014 2,400,000 $2,400,000
------------
TOTAL INVESTMENTS 100.7% 122,858,143
------------
OTHER ASSETS LESS
LIABILITIES (0.7%) (839,799)
------------
NET ASSETS - EQUIVALENT TO $17.73
PER SHARE BASED ON 6,882,224 SHARES
OF CAPITAL STOCK OUTSTANDING. 100.0% $122,018,344
============
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
23
<PAGE> 26
CAPITAL GROWTH BOND FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS 2.6%
United States Treasury Bonds 7.625%
due 02/15/2025 90,000 $96,975
United States Treasury Bonds 6.875%
due 08/15/2025 175,000 173,222
United States Treasury Notes 4.750%
due 10/31/1998 225,000 218,005
United States Treasury Notes 5.750%
due 10/31/2000 190,000 185,072
United States Treasury Notes 7.875%
due 11/15/2004 155,000 166,600
United States Treasury Notes 5.875%
due 11/15/2005 245,000 230,797
-----------
TOTAL U.S. GOVERNMENT 1,070,671
-----------
CANADIAN GOVERNMENT 5.2%
Province of Ontario 8.000%
due 10/17/2001 1,000,000 1,047,930
Province of Quebec 8.800%
due 04/15/2003 1,000,000 1,091,300
-----------
2,139,230
-----------
ITALIAN GOVERNMENT 2.2%
Republic of Italy 6.875%
due 09/27/2023 1,000,000 901,720
-----------
TOTAL FOREIGN GOVERNMENT 7.4% 3,040,950
-----------
BANKING 15.1%
Bank of Nova Scotia Halifax 9.000%
due 10/01/1999 1,000,000 $1,056,490
Bank of New York Inc. 6.625%
due 06/15/2003 1,000,000 966,610
BCH Cayman Islands Ltd. 6.500%
due 02/15/2006 1,000,000 922,080
Citicorp 7.125%
due 06/01/2003 1,000,000 1,000,800
Kansallis Osake Pankki N Y 10.000%
due 05/01/2002 1,000,000 1,128,070
Republic New York Corp. 9.500%
due 04/15/2014 1,000,000 1,170,920
-----------
6,244,970
-----------
BUSINESS CREDIT INSTITUTIONS 7.3%
Avco Financial Services Inc. 7.500%
due 11/15/1996 1,000,000 1,005,910
Chrysler Financial Corp. 5.875%
due 02/07/2001 1,000,000 960,920
CIT Group Holdings Inc. 8.750%
due 04/15/1998 1,000,000 1,037,150
-----------
3,003,980
-----------
COMMUNICATIONS EQUIPMENT 2.7%
GTE Corp. 8.750%
due 11/01/2021 1,000,000 $1,111,420
-----------
ELECTRIC UTILITIES 6.9%
Baltimore Gas & Electric Co. 6.125%
due 07/01/2003 1,000,000 948,820
Northern States Power Co. 6.375%
due 04/01/2003 1,000,000 958,030
Pacific Gas & Electric Co. 6.250%
due 08/01/2003 1,000,000 949,890
-----------
2,856,740
-----------
FOODS & BEVERAGES 4.8%
Coca Cola Enterprises Inc. 8.500%
due 02/01/2022 1,000,000 1,094,290
IBP Inc. 7.125%
due 02/01/2026 1,000,000 905,850
-----------
2,000,140
-----------
FUNERAL SERVICES 2.4%
Service Corp. International 6.750%
due 06/01/2001 1,000,000 993,150
-----------
HOSPITAL MANAGEMENT 2.6%
Columbia / HCA Healthcare Corp.
8.700% due 02/10/2010 1,000,000 1,093,090
-----------
HOUSEHOLD PRODUCTS 2.9%
Procter & Gamble ESOP 9.360%
due 01/01/2021 1,000,000 1,184,550
-----------
LODGING & RESTAURANTS 2.3%
ITT Corp. 6.250%
due 11/15/2000 1,000,000 970,610
-----------
NATURAL GAS 2.3%
Columbia Gas Systems Inc. 7.050%
due 11/28/2007 1,000,000 958,590
-----------
NEWSPAPERS 2.5%
News American Holdings Inc. 8.500%
due 02/15/2005 1,000,000 $1,051,120
-----------
PERSONAL CREDIT INSTITUTIONS 9.7%
Associates Corp. of North America
6.125% due 02/01/1998 1,000,000 994,950
Commercial Credit Group Inc. 7.375%
due 04/15/2005 1,000,000 1,002,200
Ford Motor Credit Corp. 6.375%
due 04/15/2000 1,000,000 981,050
</TABLE>
See Accompanying Notes
24
<PAGE> 27
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
PERSONAL CREDIT INSTITUTIONS - continued
Household Finance Corp. 7.750%
due 06/01/1999 1,000,000 $1,023,020
-----------
4,001,220
-----------
PETROLEUM 2.5%
Ultramar Corp. Medium Term Note
8.000% due 03/15/2005 1,000,000 1,028,280
-----------
REAL ESTATE 2.4%
MEPC Financial Inc. 7.500%
due 05/01/2003 1,000,000 1,007,850
-----------
SECURITIES BROKERS & DEALERS 4.7%
Donaldson Lufkin & Jenrette 5.625%
due 02/15/2016 1,000,000 949,880
Salomon Inc. 5.750%
due 03/31/1998 1,000,000 982,920
-----------
1,932,800
-----------
TELEPHONE 6.6%
AT & T Corp. 5.125%
due 04/01/2001 1,000,000 932,310
Bellsouth Savings ESOP 9.190%
due 07/01/2003 755,529 808,039
MCI Communications Corp. 7.750%
due 03/23/2025 1,000,000 981,940
-----------
2,722,289
-----------
TOTAL CORPORATE 77.8% 32,160,799
-----------
TOTAL BONDS 87.8% 36,272,420
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS 7.4%
United States Treasury Bills 5.035%
due 08/29/1996 3,100,000 $3,074,419
-----------
CANADIAN GOVERNMENT 2.1%
Export Development Corp. 5.250%
due 07/08/1996 876,000 875,105
-----------
TOTAL SHORT TERM INVESTMENTS 9.6% 3,949,524
-----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 1.0%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$411,600 FHLMC, 5.00%,
due 05/15/2014 400,000 $400,000
----------
TOTAL INVESTMENTS 98.3% 40,621,944
----------
OTHER ASSETS LESS LIABILITIES 1.7% 707,320
----------
NET ASSETS - EQUIVALENT TO $11.04 PER
SHARE BASED ON 3,744,236 SHARES OF
CAPITAL STOCK OUTSTANDING 100.0% $41,329,264
===========
</TABLE>
See Accompanying Notes
25
<PAGE> 28
MONEY - MARKET FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES 19.5%
Federal Home Loan Bank 5.180%
due 07/17/1996 3,440,000 $3,432,081
Federal Home Loan Mortgage 5.170%
due 07/16/1996 1,550,000 1,546,661
Federal National Mortgage Assoc.
5.200% due 07/12/1996 1,200,000 1,198,093
Federal National Mortgage Assoc.
5.200% due 07/18/1996 1,290,000 1,286,832
-----------
7,463,667
-----------
U.S. GOVERNMENT OBLIGATIONS 46.0%
United States Treasury Bills 4.930%
due 08/01/1996 8,500,000 8,463,915
United States Treasury Bills 4.980%
due 08/01/1996 6,000,000 5,974,270
United States Treasury Bills 5.010%
due 08/01/1996 3,200,000 3,186,195
-----------
17,624,380
-----------
CANADIAN GOVERNMENT AGENCIES 27.9%
CIT Group Holdings Inc. 5.270%
due 07/05/1996 1,700,000 1,699,005
Export Development Corp. 5.250%
due 07/08/1996 839,000 838,144
Her Majesty in Right of Canada
5.350% due 07/08/1996 2,270,000 2,267,639
5.250% due 07/10/1996 5,000,000 4,993,437
5.220% due 08/15/1996 900,000 894,127
-----------
10,692,352
-----------
TOTAL SHORT TERM GOVERNMENT 93.4% 35,780,399
-----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 6.3%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$2,450,000 FHLMC, 5.00%,
due 05/15/2014 2,400,000 $2,400,000
-----------
TOTAL INVESTMENTS 99.7% 38,180,399
-----------
OTHER ASSETS LESS LIABILITIES 0.3% 109,099
-----------
NET ASSETS - EQUIVALENT TO $11.11 PER SHARE
BASED ON 3,447,615 SHARES OF CAPITAL STOCK
OUTSTANDING. 100.0% $38,289,498
-----------
</TABLE>
See Accompanying Notes
26
<PAGE> 29
INTERNATIONAL FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
AUSTRALIA 7.0%
Australian Gas & Light 8,000 $ 33,257
Australian & New Zealand Bank Group 20,000 94,617
Amcor Ltd. 15,000 101,965
Broken Hill Property 7,700 106,317
CSR Ltd. 33,000 116,440
Faulding (FH) & Company 15,000 90,177
Henry Walker Group 35,000 53,360
Lend Lease Corp. 7,000 107,269
National Australia Bank 20,000 184,676
Newcrest Mining 24,000 96,189
Normandy Mining Ltd. 33,000 52,126
Novus Petroleum 70,000 101,768
Pasminco Ltd. 47,000 66,114
Qantas Airways 20,000 33,792
Santos Ltd. 35,510 122,785
Savage Resources 95,000 86,601
Tab Corp. Holdings Ltd. 38,000 171,709
News Corp. 16,000 90,656
WMC Ltd. 19,500 139,450
-----------
1,849,268
-----------
BELGIUM 0.7%
Soc Gen De Belgique 2,562 195,619
-----------
DENMARK 0.3%
Den Danske Bank 125 8,385
Novo Nordisk AS 75 10,626
Tele Danmark AS 1,285 64,705
Unidanmark 115 5,339
-----------
89,055
-----------
FINLAND 0.2%
Enso OY 2,230 17,381
Kesko 565 8,393
Nokia (AB) OY (Series A) 320 11,815
Nokia (AB) OY (Series K) 235 8,610
Metsa Serla OY 1,675 11,934
-----------
58,133
-----------
FRANCE 2.7%
Alcatel Alst (CGE) 405 35,354
Banque National Paris 670 23,538
Carrefour 112 62,798
CGIP 12 2,762
Christian Dior 100 13,026
Cie De St. Gobain 245 32,818
Cie De Suez 2,200 80,539
*CSF(Thomson) 265 7,455
*Danone 220 33,319
Eaux (Cie Generale) 350 39,127
Elf Aquitaine 700 51,524
Erid Beghin Say 65 10,185
Havas 125 10,231
LaFarge 340 20,591
L'Oreal 160 53,161
LVMH Moet Hennessy 280 66,413
Lyonnaise Des Eaux SA 130 12,425
Peugeot SA 165 22,102
Pinault Printemps Redoute SA 55 19,258
Rhone Poulenc SA 1,000 26,246
Societe Generale 280 30,811
Total "B" Shares 730 54,186
Valeo 155 8,302
-----------
716,171
-----------
GERMANY 3.0%
Allianz AG Holding 55 95,314
Basf AG 140 40,053
Bayer AG 1,600 56,560
Bayer Motoren Werk 40 23,216
Commerzbank AG 90 18,645
Daimler Benz AG 110 58,925
Deutsche Bank AG 1,175 55,639
Dresdner Bank AG 1,105 27,798
Hoechst AG 1,250 42,420
Linde AG 85 55,344
*Metallgesellschaft 6,550 112,649
Mannesmann AG 120 41,513
Siemens AG 1,300 69,510
Veba AG 1,150 61,164
Volkswagen AG 75 27,894
-----------
786,644
-----------
HONG KONG 6.7%
Amoy Properties 766 925
Amoy Properties ADR 25,000 23,453
Asia Satellite Telecom Holdings Ltd. 1,000 2,965
Bank of East Asia 11,000 40,215
Cheung Kong (Holdings) 15,000 108,031
China Light & Power 20,000 90,688
Citic Pacific Ltd. 8,000 32,348
Esprit Asia 12,000 3,798
Grand Hotel Holdings 78,000 30,733
Great Eagle Holdings 10,000 29,261
Guangdong Investment 55,000 34,816
Guangshen Railway 14,000 5,290
Hang Seng Bank 8,000 80,612
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
27
<PAGE> 30
INTERNATIONAL FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
HONG KONG (CONTINUED)
Henderson Investment 46,000 $41,301
Henderson Land Development Co. Ltd. 15,000 112,391
Hong Kong Electric 15,000 45,732
Hong Kong Telecommunications 60,000 107,741
HSBC Holdings 16,000 241,835
Hutchison Whampoa 35,000 220,197
Hysan Development 20,000 61,234
M.C. Packaging 70,000 29,616
Manhattan Card Company 80,000 38,239
* New World Infrastructure Ltd. 20,028 42,691
New World Development Company 18,000 83,480
Shangri La Asia Ltd. 20,000 28,033
Sun Hung Kai Properties 13,000 131,414
Swire Pacific 7,000 59,910
Wheelock & Company 20,000 39,531
----------
1,766,480
----------
INDONESIA 0.9%
Astra International 15,000 21,751
Bank International Indonesia 9,000 44,468
Dharmala Sakti Sej 45,000 30,451
Indosat 11,000 36,982
Kalbe Farma 7,000 15,639
Matahari Putra Prima 17,500 31,955
Pakuwon Jati 95,000 34,694
* Tambang Timah 15,000 27,712
----------
243,652
----------
ITALY 1.6%
Assic Generali 1,900 43,863
Credito Italiano 15,900 18,649
* Eni Spa 18,000 89,868
Stet 19,300 65,289
Stet Di Risp (Non Conv.) 14,500 38,114
Telecom Italia 32,600 70,150
Telecom Italia (Non Conv.) 7,800 13,473
Telecom Italia Mobile 32,600 72,918
Telecom Italia Mobile Di Risp 7,800 10,646
----------
422,970
----------
JAPAN 14.7%
Almetax Manufacturing Company 4,120 48,220
Best Denki Company 6,000 89,974
Catena Corp. 5,000 65,835
Circle K Japan Company 2,400 124,647
Cosmo Oil Company 6,000 37,197
Daiichi Clinical 1,000 18,745
Daiwa Securities 6,000 77,356
East Japan Railway 20 105,152
Fuji Oil Company 4,000 32,844
Hankyu Corp. 13,000 76,313
Hitachi Zosen Corp. 16,000 90,852
Itochu Corp. 14,000 98,057
Japan Radio Company 7,000 100,489
Japan Tobacco Inc. 2 15,361
* Kawasaki Steel Corp. 30,000 108,353
Kurita Water Industries 3,000 73,241
Marui Company 2,000 44,438
Mitsubishi Estate 5,000 69,035
Mitsubishi Corp. 4,000 52,668
Mitsubishi Heavy Industries 15,000 130,709
Mitsui Fudosan Company 3,000 40,598
Mitsui Marine & Fire 10,000 79,642
Nikko Company 2,000 19,933
Nippon Fire & Marine 10,000 65,377
Nippon Sanso Corp. 20,000 98,752
Nippon Sheet Glass 18,000 88,383
Nippon Telegraph & Telephone Corp. 20 148,494
Nomura Securities 6,000 117,405
NTT Data Communications System 4 119,965
Onward Kashiyama 10,000 163,672
Promise Company 3,800 187,629
Rengo Company 15,000 105,610
Royal Company 9,000 176,108
Sangetsu Company 2,000 53,582
Sumitomo Densetsu 5,000 59,891
Sumitomo Trust & Banking 5,000 68,578
* TDK Corp. 3,000 179,399
THK Company 4,000 96,923
Taisei Corp. 14,000 99,593
Taisei Prefab Construction Company 5,000 36,346
Takeda Chemical Industries 6,000 106,433
Tokyo Electron 4,000 116,674
Toray Industries Inc. 15,000 103,689
Toyo Engineering 7,000 47,236
Yokogawa Electric 5,000 50,290
----------
3,889,688
----------
MALAYSIA 5.2%
Arab Malaysian Financial 21,000 91,762
Cement Manufacturing 10,000 58,529
DCB Holdings BHD 35,000 119,964
Eastern & Oriental 45,000 106,434
* IOI Corp. 70,000 97,094
KFC Holdings 15,000 81,179
Leader Universal Holdings 14,666 41,449
Lingui Devel BHD 15,000 35,478
Malayan Bank BHD 10,000 96,212
</TABLE>
28
<PAGE> 31
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
MALAYSIA (CONTINUED)
Malaysian Resources Corp. 15,000 $36,681
Nylex Malaysia BHD 27,000 103,909
Resorts World BHD 22,000 126,117
R.J. Reynolds BHD 34,000 100,180
Technology Resources Industries BHD 35,000 122,069
Tractors Malaysia Holdings 17,000 33,802
Westmont Industries 9,800 16,265
Westmont Industries 7,000 12,291
YTL Corp. 18,000 93,806
----------
1,373,221
----------
NETHERLANDS 2.2%
ABN AMRO Holdings NV 755 40,550
Heineken NV 120 26,835
Ing Groep NV 1,662 49,602
KLM 165 5,282
Kon PTT Nederland 1,115 42,233
Philips Electronic 3,815 124,147
Royal Dutch Petrol 1,350 208,654
Unilever NV 410 59,378
Wolters Kluwer NV 150 17,054
----------
573,735
----------
NORWAY 0.3%
Den Norske Bank 20,125 61,097
Kvaerner ASA 110 4,255
Norsk Hydro AS 280 13,721
Orkla ASA 115 6,061
----------
85,134
----------
SINGAPORE 3.1%
Amtek Engineering 41,000 74096
City Developments 4,000 31,183
DBS Land 5,000 17,151
Development Bank Singapore 4,000 49,894
Fraser & Neave 3,600 37,250
Hour Glass 30,000 26,364
Jurong Shipyard 6,000 30,404
Keppel Corp. 4,000 33,452
Keppel International Engineering Ltd. 30,000 36,782
Orchard Parade Holding 11,000 45,216
Overseas Chinese Bank 8,000 93,551
Overseas Union Enterprises 4,000 21,829
Singapore Airlines 9,000 95,039
Singapore Finance 17,000 28,916
Ssangyong Cement 9,000 23,600
Straits Trading Company 16,000 41,956
United Overseas Bank 8,000 76,541
United Overseas Land 26,000 45,698
----------
808,922
----------
SPAIN 0.8%
Argentaria Corp. 300 $13,101
Banco Bilbao Vizcaya 500 20,272
* Banco Espana De Credito 1,600 10,362
Banco Popular Espana 100 17,843
Banco Santander SA 300 14,015
Empresa Nacional Electricidad 600 37,452
Iberdrola SA 2,000 20,546
Repsol SA 800 27,843
Telefonica De Espana 2,200 40,561
----------
201,995
----------
SWEDEN 1.6%
Electrolux AB 450 22,670
Swedish Match 15,500 48,232
Volvo AB (Series A) 4,800 109,847
Volvo AB (Series B) 10,700 244,060
----------
424,809
----------
SWITZERLAND 2.9%
ABB AG 20 24,764
Baloise Holdings 15 32,635
Ciba Geigy AG 65 79,287
CS Holdings 445 42,357
Holderbank Financial Glarus 10 7,999
Nestle SA 120 137,162
Roche Holdings AG 5 62,190
Roche Holdings AG Genusscheine 15 114,521
Sandoz AG 100 114,462
Schweiz Ruckversicherungs 30 30,835
Schweizerische Bankgesellschaft 40 39,194
Schweizerischer Bankverein 174 34,377
Winterthur 85 50,652
----------
770,435
----------
THAILAND 1.0%
Advance Agro 2,000 5,200
Bank of Ayuda Public Company Ltd. 8,000 33,090
Dhana Siam Finance & Sec. Public Co. 4,000 22,218
Krung Thai Bank Place 12,300 57,660
Land & House 2,000 25,212
Lanna Lignite 2,500 21,863
Matichon Public Company Ltd. 4,000 30,884
National Finance & Securities Company 2,000 8,903
National Petrochem 14,000 20,957
Nawarat Patanakarn 5,000 13,788
Securities One 1,000 7,879
Shinawatra C. & Commissions 1,000 21,666
Siam Pulp & Paper 2,000 4,254
----------
273,574
----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
29
<PAGE> 32
INTERNATIONAL FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
UNITED KINGDOM 9.2%
Abbey National 5,000 $42,010
Airtours 17,000 134,252
Allied Domecq PLC 2,000 14,071
Amstrad 19,000 56,950
BAA 7,000 50,714
BAT Industries 4,000 31,123
BOC Group 1,000 14,342
BTG 1,500 37,448
BTR 9,000 35,363
Barclays Bank 3,000 35,992
Bass 2,000 25,113
Blue Circle Industries 2,000 11,182
Boots Company 2,000 17,984
British Aerospace 1,000 15,165
British Airways 3,000 25,765
British Petroleum 9,000 78,972
British Telecom 14,000 75,229
Cable & Wireless 5,000 33,041
Cadbury Schweppes 4,571 36,134
General Electric 3,000 16,144
Glaxo Wellcome 5,470 73,653
Granada Group 1,629 21,795
Grand Metropolitan 21,500 142,576
Great Universal Stores 13,000 131,938
Guinness 3,000 21,805
Hanson 6,000 16,773
HSBC Holdings 5,000 78,273
Imperial Chemical Industries 2,000 24,476
Lloyds TSB Group 33,408 163,434
London Electricity 2,000 19,428
Lucas Industries 17,500 61,558
Marks & Spencer 4,000 29,228
National Westminster 4,000 38,143
P & O 2,000 15,033
Pearson 1,000 10,312
Prudential Corp. 5,000 31,527
RTZ Corp. 1,000 14,800
Redland 1,000 6,181
Reed International 2,000 33,437
Reuters Holdings 3,000 36,294
Shell Transport & Trading 9,000 131,946
Smith & Nephew 6,500 20,719
SmithKline Beecham 5,057 54,073
Standard Chartered 21,000 209,054
Tesco 6,000 27,396
Tomkins 24,000 90,200
Tullow Oil 9,500 13,574
Unilever 2,000 39,758
Vodafone Group 5,000 18,598
Whitbread 2,000 22,022
Zeneca Group 2,000 44,230
----------
2,429,228
----------
TOTAL COMMON STOCK 64.1% 16,958,733
----------
</TABLE>
<TABLE>
<CAPTION>
WARRANTS * SHARES VALUE
(Note 2)
<S> <C> <C> <C>
AUSTRALIA 0.0%
Normandy Mining 3,200 $1,459
Savage Resources 9,500 2,426
---------
3,885
---------
HONG KONG 0.0%
Barclays De Zoete 28,000 6,945
Hysan Development 1,000 530
---------
7,475
---------
JAPAN 0.4%
Asahi Glass Company 7 6,038
Best Denki Company 30 17,250
Canon Sales Company Inc. 90 19,437
Canon Sales Company Inc. 65 10,450
Kyocera Corp. 10 11,375
NGK Spark Plug Company 15 9,188
Nomura International 15 10,875
Shiseido Company 30 4,007
Takashimaya Company 120 16,317
---------
104,937
---------
MALAYSIA 0.1%
DCB Holdings BHD 5,000 6,574
IOI Corp. 16,000 6,671
---------
13,245
---------
SINGAPORE 0.0%
United Overseas Land 2,600 1,290
---------
UNITED KINGDOM 0.0%
British Aerospace 40 286
---------
TOTAL WARRANTS 0.5% 131,118
---------
</TABLE>
30
<PAGE> 33
<TABLE>
<CAPTION>
RIGHTS * SHARES VALUE
(Note 2)
<S> <C> <C> <C>
GERMANY 0.0%
Daimler Benz AG 110 $ 19
-----------
THAILAND 0.0%
Bank of Ayudhya 2,000 2,758
-----------
TOTAL RIGHTS 0.0% 2,777
-----------
</TABLE>
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
FRANCE 0.0%
Lyonnaise Des Eaux 4.000%
due 01/01/2006 1,000 $ 1,111
----------
HONG KONG 0.2%
Wharf Capital International 5.000%
due 07/15/2000 50,000 56,125
----------
JAPAN 3.6%
Marui Company 6.100%
due 01/29/1999 YEN 2,000,000 21,250
NEC Corp. 1.700%
due 03/31/1999 YEN 10,000,000 112,284
Sony Corp. 0.150%
due 03/30/2001 YEN 26,000,000 264,838
Ricoh Company 1.500%
due 03/29/2002 YEN 12,000,000 131,120
MBL International Finance 3.000%
due 11/30/2002 100,000 117,000
Matsushita Electric Works 2.700%
due 05/31/2002 YEN 5,000,000 58,520
Mitsubishi Bank 3.500%
due 03/31/2004 230,000 242,795
THK Company Ltd. 0.300%
due 09/30/2003 YEN 1,000,000 9,144
----------
956,951
----------
TOTAL CONVERTIBLE BONDS 3.8% 1,014,187
----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
HONG KONG 0.1%
Henderson Capital International
5.000% due 03/28/1997 20,000 $ 16,600
----------
JAPAN 0.5%
JGC Corp. 2.400%
due 03/31/1997 7,000,000 66,547
Namco, zero coupon
due 03/31/1997 6,000,000 59,855
----------
126,402
----------
TOTAL SHORT TERM INVESTMENTS 0.5% 143,002
----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 6.9%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$1,874,639 U.S. Treasury Bond, 8.125%,
due 08/15/2019 1,833,000 $ 1,833,000
-----------
TOTAL INVESTMENTS 75.8% 20,082,817
-----------
OTHER ASSETS LESS
LIABILITIES 24.2% 6,394,435
-----------
NET ASSETS - EQUIVALENT TO $11.22 PER SHARE
BASED ON 2,359,525 SHARES OF CAPITAL STOCK
OUTSTANDING. 100.0% $26,477,252
===========
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
31
<PAGE> 34
PACIFIC RIM EMERGING MARKETS FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
AUSTRALIA 18.8%
Australian Gas & Light 20,000 $83,143
Australian & New Zealand Bank Group 20,000 94,617
Amcor Ltd. 22,000 149,548
Broken Hill Property 13,300 183,639
CSR Ltd. 65,000 229,352
Faulding (FH) & Company 39,000 234,460
Henry Walker Group 60,000 91,473
Lend Lease Corp. 15,000 229,862
National Australia Bank 35,000 323,183
Newcrest Mining 30,000 120,236
Normandy Mining Ltd. 83,000 131,104
Novus Petroleum 190,500 276,955
Pasminco Ltd. 148,000 208,189
Qantas Airways 50,000 84,479
Santos Ltd. 54,921 189,904
Savage Resources 94,000 85,689
Tab Corp. Holdings Ltd. 70,000 316,308
News Corp. 40,000 226,640
WMC Ltd. 60,000 429,077
----------
3,687,858
----------
HONG KONG 11.7%
Amoy Properties ADR 40,000 37,525
Asia Satellite Telecom Holdings Ltd. 1,000 2,965
Bank of East Asia 14,000 51,183
Cheung Kong (Holdings) 22,000 158,446
China Light & Power 25,000 113,360
Citic Pacific Ltd. 10,000 40,435
Esprit Asia 16,000 5,064
Grand Hotel Holdings 98,000 38,614
Great Eagle Holdings 15,000 43,891
Guangdong Investment 60,000 37,981
Guangshen Railway 20,000 7,557
Hang Seng Bank 10,000 100,765
Henderson Investment 60,000 53,870
Henderson Land Development Co. Ltd. 20,000 149,855
Hong Kong Electric 20,000 60,976
Hong Kong Telecommunications 82,000 147,246
HSBC Holdings 21,800 329,501
Hutchison Whampoa 44,000 276,819
Hysan Development 25,000 76,542
M.C. Packaging 100,000 42,308
Manhattan Card Company 40,000 19,119
*New World Infrastructure Ltd. 20,045 42,727
New World Development Company 22,000 102,031
Shangri La Asia Ltd. 30,000 42,050
Sun Hung Kai Properties 16,000 161,740
Swire Pacific 11,000 94,144
Wheelock & Company 30,000 59,296
----------
2,296,010
----------
INDONESIA 2.1%
Astra International 25,000 36,251
Bank International Indonesia 14,000 69,173
Dharmala Sakti Sej 100,000 67,669
Indosat 17,000 57,154
Kalbe Farma 5,000 11,171
Matahari Putra Prima 29,000 52,954
Pakuwon Jati 200,000 73,040
*Tambang Timah 20,000 36,950
----------
404,362
----------
JAPAN 10.2%
Almetax Manufacturing Company 2,060 24,110
Best Denki Company 5,000 74,978
Catena Corp. 3,000 39,501
Circle K Japan Company 1,200 62,323
Cosmo Oil Company 3,000 18,598
Daiwa Securities 2,000 25,785
East Japan Railway 10 52,576
Fuji Oil Company 3,000 24,633
Hankyu Corp. 7,000 41,092
Hitachi Zosen Corp. 5,000 28,391
Itochu Corp. 7,000 49,028
Japan Radio Company 4,000 57,422
Japan Tobacco Inc. 1 7,681
*Kawasaki Steel Corp. 5,000 18,059
Kurita Water Industries 1,000 24,414
Marui Company 1,000 22,219
Mitsubishi Estate 3,000 41,421
Mitsubishi Corp. 2,000 26,334
Mitsubishi Heavy Industries 5,000 43,570
Mitsui Fudosan Company 2,000 27,065
Mitsui Marine & Fire 5,000 39,821
Nikko Company 1,000 9,967
Nippon Fire & Marine 5,000 32,689
Nippon Sanso Corp. 9,000 44,438
Nippon Sheet Glass 6,000 29,461
Nippon Telegraph & Telephone Corp. 11 81,671
Nomura Securities 3,000 58,703
NTT Data Communications System 2 59,983
Onward Kashiyama 5,000 81,836
Promise Company 2,000 98,752
Rengo Company 5,000 35,203
Royal Company 3,000 58,703
Sangetsu Company 2,000 53,582
Sumitomo Densetsu 2,000 23,956
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
32
<PAGE> 35
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
JAPAN (CONTINUED)
Sumitomo Trust & Banking 2,000 $27,431
*TDK Corp. 2,000 119,600
THK Company 2,000 48,462
Taisei Corp. 8,000 56,910
Taisei Prefab Construction Company 3,000 21,808
Takeda Chemical Industries 5,000 88,694
Tokyo Electron 2,000 58,337
Toray Industries Inc. 10,000 69,126
Toyo Engineering 6,000 40,488
Yokogawa Electric 5,000 50,290
-----------
1,999,111
-----------
MALAYSIA 15.3%
Arab Malaysian Financial 38,000 166,045
Cement Manufacturing 19,000 111,205
DCB Holdings BHD 71,000 243,355
Eastern & Oriental 100,000 236,520
*IOI Corp. 147,000 203,897
KFC Holdings 45,000 243,536
Leader Universal Holdings 35,333 99,859
Lingui Devel BHD 30,000 70,956
Malayan Bank BHD 11,000 105,833
Malaysian Resources Corp. 30,000 73,361
Nylex Malaysia BHD 49,000 188,575
Resorts World BHD 39,000 223,572
R.J. Reynolds BHD 64,000 188,575
Technology Resources Industries BHD 70,000 244,137
Tractors Malaysia Holdings 100,000 198,837
Westmont Industries 15,400 25,559
Westmont Industries 11,000 19,314
YTL Corp. 67,500 351,774
-----------
2,994,910
-----------
SINGAPORE 8.3%
Amtek Engineering 80,000 144,578
City Developments 7,000 54,571
DBS Land 9,000 30,872
Development Bank Singapore 12,000 149,681
Fraser & Neave 6,000 62,084
Hour Glass 67,000 58,880
Jurong Shipyard 9,000 45,606
Keppel Corp. 8,000 66,903
Keppel International Engineering Ltd. 80,000 98,086
Orchard Parade Holding 22,000 90,432
Overseas Chinese Bank 14,000 163,714
Overseas Union Enterprises 7,000 38,200
Singapore Airlines 21,000 221,758
Singapore Finance 47,000 79,943
Ssangyong Cement 25,000 65,556
Straits Trading Company 23,000 60,312
United Overseas Bank 13,000 124,380
United Overseas Land 47,000 82,608
-----------
1,638,164
-----------
THAILAND 3.0%
Advance Agro 4,000 10,400
Bank of Ayuda Public Company Ltd. 15,000 62,045
Dhana Siam Finance & Sec. Public Co. Ltd. 12,000 66,654
Krung Thai Bank Place 25,300 118,602
Land & House 4,000 50,423
Lanna Lignite 5,000 43,727
Matichon Public Company Ltd. 10,000 77,211
National Finance & Securities Company Ltd. 4,000 17,806
National Petrochem 19,000 28,442
Nawarat Patanakarn 6,000 16,545
Securities One 3,000 23,636
Shinawatra C. & Commissions 2,000 43,333
Siam Pulp & Paper 5,000 10,636
United Communication Industry 2,000 26,787
-----------
596,247
-----------
TOTAL COMMON STOCK 69.4% 13,616,662
-----------
</TABLE>
<TABLE>
<CAPTION>
WARRANTS * SHARES VALUE
(Note 2)
<S> <C> <C> <C>
Australia 0.0%
Normandy Mining 13,200 $6,016
Savage Resources 9,400 2,401
----------
8,417
----------
HONG KONG 0.0%
Barclays De Zoete 16,000 3,969
Hysan Development 1,250 662
----------
4,631
----------
JAPAN 0.3%
Asahi Glass Company 4 3,450
Canon Sales Company Inc. 100 16,077
Kyocera Corp. 5 5,687
NGK Spark Plug Company 10 6,125
Nomura International 10 7,250
Shiseido Company 15 2,004
Takashimaya Company 78 10,606
----------
51,199
----------
MALAYSIA 0.1%
DCB Holdings BHD 11,250 14,793
IOI Corp. 26,250 10,944
----------
25,737
----------
SINGAPORE 0.0%
United Overseas Land 4,700 2,332
----------
TOTAL WARRANTS 0.5% 92,316
----------
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
33
<PAGE> 36
PACIFIC RIM EMERGING MARKETS FUND (CONTINUED)
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
RIGHTS * SHARES VALUE
(Note 2)
<S> <C> <C> <C>
THAILAND 0.0%
Bank of Ayudhya 3,750 $ 5,170
-----------
TOTAL RIGHTS 0.0% 5,170
-----------
</TABLE>
<TABLE>
<CAPTION>
BONDS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
HONG KONG 0.3%
Wharf Capital International 5.000%
due 07/15/2000 60,000 $ 67,350
-----------
JAPAN 2.2%
MBL International Finance 3.000%
due 11/30/2002 50,000 58,500
Marui Company 6.100%
due 01/29/1999 YEN 2,000,000 21,250
Mitsubishi Bank 3.500%
due 03/31/2004 100,000 105,563
NEC Corp. 1.700%
due 03/31/1999 YEN 5,000,000 56,142
Sony Corp. 0.150%
due 03/30/2001 YEN 11,000,000 112,047
Ricoh Company 1.500%
due 03/29/2002 YEN 6,000,000 65,560
THK Company Ltd. 0.300%
due 09/30/2003 YEN 1,000,000 9,144
-----------
428,206
-----------
TOTAL CONVERTIBLE BONDS 2.5% 495,556
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
HONG KONG 0.1%
Henderson Capital International
5.000% due 03/28/1997 25,000 $ 20,750
----------
JAPAN 0.3%
JGC Corp. 2.400%
due 03/31/1997 4,000,000 38,027
Namco, zero coupon
due 03/31/1997 3,000,000 29,927
----------
67,954
----------
TOTAL SHORT TERM INVESTMENTS 0.5% 88,704
----------
</TABLE>
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 17.9%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$3,589,914 U.S. Treasury Bill, 5.150%,
due 09/05/1996 3,516,000 $ 3,516,000
-----------
TOTAL INVESTMENTS 90.8% 17,814,408
-----------
OTHER ASSETS LESS LIABILITIES 9.2% 1,812,175
-----------
NET ASSETS - EQUIVALENT TO $11.08 PER SHARE
BASED ON 1,770,794 SHARES OF CAPITAL STOCK
OUTSTANDING. 100.0% $19,626,583
===========
</TABLE>
34
<PAGE> 37
EQUITY INDEX FUND
Statement of Investments as of June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK SHARES VALUE
(Note 2)
<S> <C> <C> <C>
MISCELLANEOUS 4.6%
SPDR Trust 1,700 $ 114,059
-----------
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. GOVERNMENT AGENCIES 8.0%
Federal National Mortgage Assoc.
5.230% due 07/19/1996 200,000 $ 199,477
-----------
U.S. GOVERNMENT OBLIGATIONS 48.0%
United States Treasury Bills 4.950%
due 07/25/1996 800,000 797,360
United States Treasury Bills 5.000%
due 07/25/1996 300,000 299,000
United States Treasury Bills 4.950%
due 08/08/1996 100,000 99,478
-----------
1,195,838
-----------
</TABLE>
<TABLE>
<CAPTION>
SHORT TERM INVESTMENTS FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
CANADIAN GOVERNMENT 16.0%
Her Majesty in Right of Canada
5.250% due 07/10/1996 400,000 $ 399,475
-----------
<CAPTION>
REPURCHASE AGREEMENT FACE AMOUNT VALUE
(Note 2)
<S> <C> <C> <C>
U.S. DOLLAR 20.1%
State Street Bank and Trust Co. 4.750%
due 07/01/1996-Collateralized by
$511,683 U.S. Treasury Note, 6.500%,
due 04/30/1999 500,000 $ 500,000
-----------
TOTAL INVESTMENTS 96.6% 2,408,849
-----------
OTHER ASSETS LESS LIABILITIES 3.4% 84,178
-----------
NET ASSETS - EQUIVALENT TO $10.37 PER SHARE
BASED ON 240,388 SHARES OF CAPITAL STOCK
OUTSTANDING. 100.0% $ 2,493,027
===========
</TABLE>
See Accompanying Notes
35
<PAGE> 38
Statement Of Assets and Liabilities as of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK REAL ESTATE
EQUITY FUND FUND SECURITIES FUND
--------------- ------------ ---------------
<S> <C> <C> <C>
ASSETS:
Investments, at market value (cost-Emerging
Growth Equity Fund: $180,457,523, Common
Stock Fund: $67,403,016, Real Estate Securities
Fund: $54,187,059, Balanced Assets Fund:
$114,418,287, Capital Growth Bond Fund:
$40,692,493, Money Market Fund $38,180,399,
International Fund: $18,372,177, Pacific Rim
Emerging Markets Fund: $16,757,169, Equity
Index Fund: $2,408,731) (Note 2).................... $188,957,916 $76,128,531 $55,797,294
Cash................................................ 1,466,529 78,149 70,145
Cash - foreign currencies (cost-
International Fund: $6,518,107
Pacific Rim Emerging Markets Fund: $2,009,700).... --- --- ---
Variation margin for open futures contracts......... --- --- ---
Receivable for undelivered sales.................... 1,999,612 515,797 2,199,964
Investment income receivable........................ 27,004 127,639 271,617
Tax reclaim receivable.............................. --- --- ---
--------------- -------------- --------------
Total assets........................................ 192,451,061 76,850,116 58,339,020
--------------- -------------- --------------
LIABILITIES:
Payable for investment advisory fees (Note 8)....... 82,205 30,811 22,972
Payable for undelivered purchases................... 1,176,204 787,207 1,455,685
Withholding taxes payable........................... --- --- ---
--------------- -------------- --------------
Total liabilities................................... 1,258,409 818,018 1,478,657
--------------- -------------- --------------
NET ASSETS............................................. $191,192,652 $76,032,098 $56,860,363
=============== ============== ==============
REPRESENTED BY:
Paid In Capital (Note 5)............................ $148,653,784 $59,370,162 $48,830,850
Net unrealized appreciation (depreciation) of
investments................................... 8,500,393 8,725,515 1,610,235
Net unrealized appreciation of futures contracts.... --- --- ---
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign
currencies..................................... --- --- ---
Accumulated undistributed net realized gain
(loss) on investments.......................... 33,822,586 6,472,576 2,721,627
Accumulated undistributed net realized gain on
futures contracts.............................. --- --- ---
Accumulated undistributed net realized loss on
transactions in foreign currencies............. --- --- ---
Accumulated undistributed net investment income..... 215,889 1,463,845 3,697,651
--------------- -------------- --------------
NET ASSETS............................................. $191,192,652 $76,032,098 $56,860,363
=============== ============== ==============
Capital stock outstanding (Note 5).................. 7,729,562 4,059,539 3,550,678
=============== ============== ==============
Net asset value, offering and redemption
price per share................................ $24.74 $18.73 $16.01
=============== ============== ==============
</TABLE>
See Accompanying Notes
36
<PAGE> 39
<TABLE>
<CAPTION>
BALANCED CAPITAL GROWTH MONEY - MARKET
ASSETS FUND BOND FUND FUND
----------- -------------- --------------
<S> <C> <C> <C>
ASSETS:
Investments, at market value (cost-Emerging
Growth Equity Fund: $180,457,523, Common
Stock Fund: $67,403,016, Real Estate Securities
Fund: $54,187,059, Balanced Assets Fund:
$114,418,287, Capital Growth Bond Fund:
$40,692,493, Money Market Fund $38,180,399,
International Fund: $18,372,177, Pacific Rim
Emerging Markets Fund: $16,757,169, Equity
Index Fund: $2,408,731) (Note 2).................... $122,858,143 $40,621,944 $38,180,399
Cash................................................ 45,438 74,833 124,478
Cash - foreign currencies (cost-
International Fund: $6,518,107
Pacific Rim Emerging Markets Fund: $2,009,700).... --- --- ---
Variation margin for open futures contracts......... --- --- ---
Receivable for undelivered sales.................... 459,946 --- ---
Investment income receivable........................ 918,870 649,655 950
Tax reclaim receivable.............................. --- --- ---
--------------- -------------- --------------
Total assets........................................ 124,282,397 41,346,432 38,305,827
--------------- -------------- --------------
LIABILITIES:
Payable for investment advisory fees (Note 8)....... 49,625 17,168 16,329
Payable for undelivered purchases................... 2,214,428 --- ---
Withholding taxes payable........................... --- --- ---
--------------- -------------- --------------
Total liabilities................................... 2,264,053 17,168 16,329
--------------- -------------- --------------
NET ASSETS............................................. $122,018,344 $41,329,264 $38,289,498
=============== ============== ==============
REPRESENTED BY:
Paid In Capital (Note 5)............................ $101,716,519 $41,367,287 $35,648,654
Net unrealized appreciation (depreciation) of
investments................................... 8,439,856 (70,549) ---
Net unrealized appreciation of futures contracts.... --- --- ---
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign
currencies..................................... --- --- ---
Accumulated undistributed net realized gain
(loss) on investments.......................... 6,433,581 (1,262,470) ---
Accumulated undistributed net realized gain on
futures contracts.............................. --- --- ---
Accumulated undistributed net realized loss on
transactions in foreign currencies............. --- --- ---
Accumulated undistributed net investment income..... 5,428,388 1,294,996 2,640,844
--------------- -------------- --------------
NET ASSETS............................................. $122,018,344 $41,329,264 $38,289,498
=============== ============== ==============
Capital stock outstanding (Note 5).................. 6,882,224 3,744,236 3,447,615
=============== ============== ==============
Net asset value, offering and redemption
price per share................................ $17.73 $11.04 $11.11
=============== ============== ==============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PACIFIC RIM EMERGING EQUITY
FUND MARKETS FUND INDEX FUND
------------- -------------------- ----------
<S> <C> <C> <C>
ASSETS:
Investments, at market value (cost-Emerging
Growth Equity Fund: $180,457,523, Common
Stock Fund: $67,403,016, Real Estate Securities
Fund: $54,187,059, Balanced Assets Fund:
$114,418,287, Capital Growth Bond Fund:
$40,692,493, Money Market Fund $38,180,399,
International Fund: $18,372,177, Pacific Rim
Emerging Markets Fund: $16,757,169, Equity
Index Fund: $2,408,731) (Note 2).................... $20,082,817 $17,814,408 $2,408,849
Cash................................................ 678 23 70,910
Cash - foreign currencies (cost-
International Fund: $6,518,107
Pacific Rim Emerging Markets Fund: $2,009,700).... 6,551,938 2,008,640 ---
Variation margin for open futures contracts......... --- --- 13,200
Receivable for undelivered sales.................... 51,837 20,272 ---
Investment income receivable........................ 60,323 51,679 794
Tax reclaim receivable.............................. 19,336 --- ---
--------------- -------------- -------------
Total assets........................................ 26,766,929 9,895,022 2,493,753
--------------- -------------- -------------
LIABILITIES:
Payable for investment advisory fees (Note 8)....... 28,563 23,723 726
Payable for undelivered purchases................... 254,506 240,472 ---
Withholding taxes payable........................... 6,608 4,244 ---
--------------- -------------- -------------
Total liabilities................................... 289,677 268,439 726
--------------- -------------- -------------
NET ASSETS............................................. $26,477,252 $19,626,583 $2,493,027
=============== ============== =============
REPRESENTED BY:
Paid In Capital (Note 5)............................ $24,251,895 $18,033,411 $2,449,644
Net unrealized appreciation (depreciation) of
investments................................... 1,710,640 1,057,239 118
Net unrealized appreciation of futures contracts.... --- --- 16,455
Net unrealized appreciation (depreciation) on
translation of assets and liabilities in foreign
currencies..................................... 33,537 (963) ---
Accumulated undistributed net realized gain
(loss) on investments.......................... 537,964 510,906 ---
Accumulated undistributed net realized gain on
futures contracts.............................. --- --- 5,943
Accumulated undistributed net realized loss on
transactions in foreign currencies............. (275,709) (79,501) ---
Accumulated undistributed net investment income..... 218,925 105,491 20,867
--------------- -------------- -------------
NET ASSETS............................................. $26,477,252 $19,626,583 $2,493,027
=============== ============== =============
Capital stock outstanding (Note 5).................. 2,359,525 1,770,794 240,388
=============== ============== =============
Net asset value, offering and redemption
price per share................................ $11.22 $11.08 $10.37
=============== ============== =============
</TABLE>
37
<PAGE> 40
Statement of Operations for the Six Months Ended June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK REAL ESTATE
EQUITY FUND FUND SECURITIES FUND
--------------- ------------ ---------------
<S> <C> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest*........................... $247,804 $151,112 $91,455
Dividends**......................... 223,013 650,953 1,374,851
----------- ----------- ----------
Total investment income........... 470,817 802,065 1,466,306
----------- ----------- ----------
EXPENSES:
Investment advisory fees (Note 8)... 461,194 172,981 134,516
General expenses (Note 8)........... --- --- ---
----------- ----------- ----------
Total Expenses.................... 461,194 172,981 134,516
----------- ----------- ----------
Net investment income (Note 2).... 9,623 629,084 1,331,790
----------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) :
Net realized gain (loss) on:
Investment transactions (excluding
short term investments)............. 15,682,844 4,965,989 1,881,741
Futures contracts................... --- --- ---
Foreign currency transactions....... --- --- ---
----------- ----------- ----------
Net realized gain (loss).......... 15,682,844 4,965,989 1,881,741
----------- ----------- ----------
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding
short term investments)............. (4,172,268) 4,889 9,993
Futures contracts................... --- --- ---
Translation of assets and liabilities
in foreign currencies............. --- --- ---
----------- ----------- ----------
Net unrealized appreciation
(depreciation).................. (4,172,268) 4,889 9,993
----------- ----------- ----------
Net realized and unrealized gain
(loss)........................... 11,510,576 4,970,878 1,891,734
----------- ----------- ----------
INCREASE (DECREASE) IN NET ASSETS
----------- ----------- ----------
DERIVED FROM OPERATIONS............. $11,520,199 $5,599,962 $3,223,524
=========== =========== ==========
</TABLE>
* Net of withholding taxes of $211 and $105 for the International & Pacific
Rim Emerging Markets Funds, respectively.
** Net of withholding taxes of $30,789 and $12,535 for the International &
Pacific Rim Emerging Markets Funds, respectively.
See Accompanying Notes
38
<TABLE>
<CAPTION>
BALANCED CAPITAL GROWTH MONEY - MARKET
ASSETS FUND BOND FUND FUND
----------- -------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest*............................ $1,841,754 $1,398,946 $1,054,344
Dividends**.......................... 608,989 --- ---
----------- ---------- ----------
Total investment income............. 2,450,743 1,398,946 1,054,344
----------- ---------- ----------
EXPENSES:
Investment advisory fees (Note 8).... 291,102 105,547 97,884
General expenses (Note 8)............ --- --- ---
----------- ---------- ----------
Total Expenses...................... 291,102 105,547 97,884
----------- ---------- ----------
Net investment income (Note 2)...... 2,159,641 1,293,399 956,460
----------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) :
Net realized gain (loss) on:
Investment transactions (excluding
short term investments).............. 4,751,133 (202,432) ---
Futures contracts.................... --- --- ---
Foreign currency transactions........ --- --- ---
----------- ---------- ----------
Net realized gain (loss)........... 4,751,133 (202,432) ---
----------- ---------- ----------
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding
short term investments)............. (3,034,280) (2,083,239) ---
Futures contracts................... --- --- ---
Translation of assets and liabilities
in foreign currencies............... --- --- ---
----------- ---------- ----------
Net unrealized appreciation
(depreciation)................... (3,034,280) (2,083,239) ---
----------- ---------- ----------
Net realized and unrealized
gain (loss)...................... 1,716,853 (2,285,671) ---
----------- ---------- ----------
INCREASE (DECREASE) IN NET ASSETS
----------- ---------- ----------
DERIVED FROM OPERATIONS.............. $3,876,494 ($992,272) $956,460
=========== ========== ==========
</TABLE>
* For the period February 14, 1996 (commencement of operations) to June 30,
1996.
<PAGE> 41
<TABLE>
<CAPTION>
INTERNATIONAL PACIFIC RIM EMERGING EQUITY
FUND MARKETS FUND INDEX FUND*
------------- -------------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest* ............................. $122,180 $79,854 $22,081
Dividends** ........................... 248,188 148,867 596
---------- --------- --------
Total investment income.............. 370,368 228,721 22,677
---------- --------- --------
EXPENSES:
Investment advisory fees (Note 8)...... 97,095 70,055 1,810
General expenses (Note 8).............. 57,115 53,572 ---
---------- --------- --------
Total Expenses....................... 154,210 123,627 1,810
---------- --------- --------
Net investment income (Note 2)....... 216,158 105,094 20,867
---------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS) :
Net realized gain (loss) on:
Investment transactions (excluding
short term investments)................ 534,044 496,780 ---
Futures contracts...................... --- --- 5,943
Foreign currency transactions.......... (215,423) (75,880) ---
---------- --------- --------
Net realized gain (loss)............. 318,621 420,900 5,943
---------- --------- --------
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding
short term investments).............. 540,566 432,559 118
Futures contracts...................... --- --- 16,455
Translation of assets and liabilities
in foreign currencies................ 33,131 (1,336) ---
---------- --------- --------
Net unrealized appreciation
(depreciation)..................... 573,697 431,223 16,573
---------- --------- --------
Net realized and unrealized gain (loss) 892,318 852,123 22,516
---------- --------- --------
INCREASE (DECREASE) IN NET ASSETS
DERIVED FROM OPERATIONS................ $1,108,476 $957,217 $43,383
========== ========= ========
</TABLE>
39
<PAGE> 42
Statements of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK
EQUITY FUND FUND
------------------------------- -------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ................................ $9,623 $206,266 $629,084 $834,761
Net realized gain (loss) from investments, futures
and foreign currency transactions................... 15,682,844 18,252,359 4,965,989 2,091,782
Net unrealized appreciation (depreciation) of
investments and translation of assets and
liabilities in foreign currencies................... (4,172,268) 12,756,627 4,889 9,276,249
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived from
operations.......................................... 11,520,199 31,215,252 5,599,962 12,202,792
------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................. --- (35,611) --- ---
Net realized gain..................................... --- (3,730,311) --- ---
------------ ------------ ----------- -----------
Total distributions to shareholders................... --- (3,765,922) --- ---
------------ ------------ ----------- -----------
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock............... 27,723,993 46,820,911 13,354,722 17,959,899
Net asset value of shares issued to shareholder
for reinvestment of dividends....................... --- 3,765,922 --- ---
------------ ------------ ----------- -----------
27,723,993 50,586,833 13,354,722 17,959,899
Cost of capital stock reacquired...................... (10,478,007) (12,989,112) (3,918,514) (3,995,283)
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived from
capital stock transactions......................... 17,245,986 37,597,721 9,436,208 13,964,616
------------ ------------ ----------- -----------
Net increase (decrease) in net assets................ 28,766,185 65,047,051 15,036,170 26,167,408
NET ASSETS:
Beginning of period................................... 162,426,467 97,379,416 60,995,928 34,828,520
------------ ------------ ----------- -----------
Six months ended June 30, 1996 and end of period 1995
including undistributed net investment income of
$215,889 and $206,266 respectively in the Emerging
Growth Equity Fund, $1,463,845 and $834,761
respectively in the Common Stock Fund, $3,697,651 and
$2,365,861 respectively in the Real Estate Securities
Fund, $5,428,388 and $3,268,747 respectively in the
Balanced Assets Fund, $1,294,996 and $1,597
respectively in the Capital Growth Bond Fund,
$2,640,844 and $1,684,384 respectively in the Money
- - Market Fund, $218,925 and $2,767 respectively in
the International Fund, $105,491 and $397
respectively in the Pacific Rim Emerging Markets
Fund and $20,867 in the Equity Index Fund.
(Note 2).............................................. $191,192,652 $162,426,467 $76,032,098 $60,995,928
============ ============ =========== ===========
</TABLE>
See Accompanying Notes
40
<TABLE>
<CAPTION>
REAL ESTATE BALANCED ASSETS
SECURITIES FUND FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ................................ $1,331,790 $2,365,861 $2,159,641 $3,392,436
Net realized gain (loss) from investments, futures
and foreign currency transactions................... 1,881,741 1,242,307 4,751,133 2,741,674
Net unrealized appreciation (depreciation) of
investments and translation of assets and
liabilities in foreign currencies................... 9,993 3,176,323 (3,034,280) 14,094,035
------------ ------------ ------------- ------------
Increase (decrease) in net assets derived from
operations.......................................... 3,223,524 6,784,491 3,876,494 20,228,145
------------ ------------ ------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................. --- (852,969) --- (129,234)
Net realized gain..................................... --- --- --- ---
------------ ------------ ------------ ------------
Total distributions to shareholders................... --- (852,969) --- (129,234)
------------ ------------ ------------ ------------
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock............... 4,900,762 11,341,799 13,696,563 24,303,441
Net asset value of shares issued to shareholder
for reinvestment of dividends....................... --- 852,969 --- 129,234
------------ ------------ ------------ ------------
4,900,762 12,194,768 13,696,563 24,432,675
Cost of capital stock reacquired...................... (3,704,040) (8,257,316) (6,315,452) (8,507,590)
------------ ------------ ------------ ------------
Increase (decrease) in net assets derived from
capital stock transactions.......................... 1,196,722 3,937,452 7,381,111 15,925,085
------------ ------------ ------------ ------------
Net increase (decrease) in net assets................. 4,420,246 9,868,974 11,257,605 36,023,996
NET ASSETS:
Beginning of period................................... 52,440,117 42,571,143 110,760,739 74,736,743
------------ ------------ ------------ ------------
Six months ended June 30, 1996 and end of period 1995
including undistributed net investment income of
$215,889 and $206,266 respectively in the Emerging
Growth Equity Fund, $1,463,845 and $834,761
respectively in the Common Stock Fund, $3,697,651 and
$2,365,861 respectively in the Real Estate Securities
Fund, $5,428,388 and $3,268,747 respectively in the
Balanced Assets Fund, $1,294,996 and $1,597
respectively in the Capital Growth Bond Fund,
$2,640,844 and $1,684,384 respectively in the Money
- - Market Fund, $218,925 and $2,767 respectively in
the International Fund, $105,491 and $397
respectively in the Pacific Rim Emerging Markets
Fund and $20,867 in the Equity Index Fund.
(Note 2).............................................. $56,860,363 $52,440,117 $122,018,344 $110,760,739
============ ============ ============ ============
</TABLE>
<PAGE> 43
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY - MARKET
BOND FUND FUND
------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ------------ ---------------- -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ................................ $1,293,399 $2,541,376 $956,460 $1,684,385
Net realized gain (loss) from investments, futures
and foreign currency transactions................... (202,432) 677,362 --- ---
Net unrealized appreciation (depreciation) of
investments and translation of assets and
liabilities in foreign currencies................... (2,083,239) 4,016,399 --- ---
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived from
operations.......................................... (992,272) 7,235,137 956,460 1,684,385
------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................. --- (2,545,873) --- (1,405)
Net realized gain..................................... --- (425,137) --- ---
------------ ------------ ----------- -----------
Total distributions to shareholders................... --- (2,971,010) --- (1,405)
------------ ------------ ----------- -----------
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock............... 7,198,255 12,263,927 22,224,026 36,173,191
Net asset value of shares issued to shareholder
for reinvestment of dividends....................... --- 2,971,010 --- 1,405
------------ ------------ ----------- -----------
7,198,255 15,234,937 22,224,026 36,174,596
Cost of capital stock reacquired...................... (7,570,505) (10,423,191) (20,882,987) (26,250,063)
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived from
capital stock transactions.......................... (372,250) 4,811,746 1,341,039 9,924,533
------------ ------------ ----------- -----------
Net increase (decrease) in net assets................. (1,364,522) 9,075,873 2,297,499 11,607,513
NET ASSETS:
Beginning of period................................... 42,693,786 33,617,913 35,991,999 24,384,486
------------ ------------ ----------- -----------
Six months ended June 30, 1996 and end of period 1995
including undistributed net investment income of
$215,889 and $206,266 respectively in the Emerging
Growth Equity Fund, $1,463,845 and $834,761
respectively in the Common Stock Fund, $3,697,651 and
$2,365,861 respectively in the Real Estate Securities
Fund, $5,428,388 and $3,268,747 respectively in the
Balanced Assets Fund, $1,294,996 and $1,597
respectively in the Capital Growth Bond Fund,
$2,640,844 and $1,684,384 respectively in the Money
- - Market Fund, $218,925 and $2,767 respectively in
the International Fund, $105,491 and $397
respectively in the Pacific Rim Emerging Markets
Fund and $20,867 in the Equity Index Fund.
(Note 2).............................................. $41,329,264 $42,693,786 $38,289,498 $35,991,999
============ ============ =========== ===========
</TABLE>
41
<PAGE> 44
Statements of Changes in Net Assets (continued)
(Unaudited)
<TABLE>
<CAPTION>
INTERNATIONAL PACIFIC RIM EMERGING EQUITY
FUND MARKETS FUND INDEX FUND
----------------------------- ----------------------------- --------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEB. 14/96* TO
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95 JUNE 30/96
(UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------- ----------- ---------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income ............................... $216,158 $229,950 $105,094 $105,798 $20,867
Net realized gain from investment and
foreign currency transactions...................... 318,621 170,289 420,900 56,190 5,943
Net unrealized appreciation of investments,
futures and translation of assets
and liabilities in foreign currencies.............. 573,697 1,360,677 431,223 1,075,635 16,573
----------- ----------- ----------- ----------- ----------
Increase in net assets derived
from operations.................................... 1,108,476 1,760,916 957,217 1,237,623 43,383
----------- ----------- ----------- ----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................ --- (231,976) --- (110,840) ---
Net realized gain.................................... --- (219,782) --- (46,196) ---
----------- ----------- ----------- ----------- ----------
Total distributions to shareholders.................. --- (451,758) --- (157,036) ---
----------- ----------- ----------- ----------- ----------
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital stock.............. 6,969,768 6,682,274 6,959,044 5,286,274 3,824,214
Net asset value of shares issued to shareholder
for reinvestment of dividends...................... --- 451,758 --- 157,036 ---
----------- ----------- ----------- ----------- ----------
6,969,768 7,134,032 6,959,044 5,443,310 3,824,214
Cost of capital stock reacquired..................... (648,530) (686,059) (1,346,777) (1,124,015) (1,374,570)
----------- ----------- ----------- ----------- ----------
Increase in net assets derived from capital
stock transactions................................. 6,321,238 6,447,973 5,612,267 4,319,295 2,449,644
----------- ----------- ----------- ----------- ----------
Net increase in net assets........................... 7,429,714 7,757,131 6,569,484 5,399,882 2,493,027
NET ASSETS:
Beginning of period.................................. 19,047,538 11,290,407 13,057,099 7,657,217 ---
----------- ----------- ----------- ----------- ----------
Six months ended June 30, 1996 and end of period 1995
including undistributed net investment income of
$215,889 and $206,266 respectively in the Emerging
Growth Equity Fund, $1,463,845 and $834,761
respectively in the Common Stock Fund, $3,697,651 and
$2,365,861 respectively in the Real Estate Securities
Fund, $5,428,388 and $3,268,747 respectively in the
Balanced Assets Fund, $1,294,996 and $1,597
respectively in the Capital Growth Bond Fund,
$2,640,844 and $1,684,384 respectively in the Money -
Market Fund, $218,925 and $2,767 respectively in the
International Fund, $105,491 and $397 respectively in
the Pacific Rim Emerging Markets Fund and $20,867 in
the Equity Index Fund.
(Note 2)............................................. $26,477,252 $19,047,538 $19,626,583 $13,057,099 $2,493,027
=========== =========== =========== =========== ==========
</TABLE>
*Commencement of operations
See Accompanying Notes
42
<PAGE> 45
Notes to Financial Statements, June 30, 1996
(Unaudited)
1. ORGANIZATION
Manulife Series Fund, Inc. ("MSFI"), incorporated on July 22, 1983, and
domiciled in the State of Maryland, is a no-load, diversified open-end
management investment company. MSFI was incorporated for the purpose of
investing premiums from variable contracts issued by The Manufacturers Life
Insurance Company of America. MSFI is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 and its shares are
registered under the Securities Act of 1933. The effective date of the initial
registration was June 26, 1984. Separate Accounts One, Two, Three and Four of
The Manufacturers Life Insurance Company of America (the "Separate Accounts")
have purchased their shares of the common stock of MSFI as an investment and
not with a view towards resale, distribution or redemption. On October 4,
1994, MSFI launched the International Fund and Pacific Rim Emerging Markets
Fund with initial Seed money from The Manufacturers Life Insurance Company of
America of $10,000,000 and $7,000,000, respectively. On February 14, 1996,
MSFI launched the Equity Index Fund with initial seed money from the
Manufacturers Life Insurance Company of America of $675,000.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by MSFI
in preparation of its financial statements in conformity with generally
accepted accounting principles ("GAAP").
A) BASIS OF PRESENTATION.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of management, all adjustments necessary
for a fair presentation of the financial position and the results of operations
have been included. Results for the six months ended June 30, 1996 are not
necessarily indicative of annual results.
B) SECURITY VALUATION.
Except with respect to debt instruments having a remaining maturity of 60 days
or less, securities held by MSFI are valued as follows: Securities listed on a
securities exchange are valued at the last sale price or, if there has been no
sale that day, at the last bid price reported as of the close of trading on the
New York Stock Exchange. Securities traded in the over-the-counter market
are valued at the last bid price or yield equivalent as of the close of trading
on the New York Stock Exchange. Securities which are traded both in the
over-the-counter market and on a stock exchange are valued according to the
broadest and most representative market, and for debt securities this
ordinarily will be the over-the-counter market. Although the practice of each
fund is to purchase only assets having a readily ascertainable market value, if
market quotations for such assets are unavailable, such assets are valued at
their fair value as determined in good faith by MSFI's Board of Directors.
There were no such securities held at June 30, 1996.
Debt instruments held with a remaining maturity of 60 days or less are valued
on an amortized cost basis. Under this method of valuation, the security is
initially valued at cost on the date of purchase (or in the case of securities
purchased with more than 60 days remaining to maturity, the market value on the
61st day prior to maturity); and thereafter a constant proportionate
amortization in value is assumed until maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the security. For purposes of this method of valuation, the maturity of a
variable rate instrument is deemed to be the next date on which the interest
rate is to be adjusted.
C) INTERNATIONAL AND PACIFIC RIM EMERGING MARKETS FUNDS.
Apart from the accounting policies mentioned above there are other significant
accounting policies followed by MSFI in preparation of financial statements for
the International and Pacific Rim Emerging Markets Funds.
Generally securities will be valued as described above on the exchanges which
they are traded, however, where a country has adopted other conventions with
respect to valuations, these will be utilized instead. Trading in securities
on European and Far Eastern exchanges and over-the counter markets is normally
completed well before 4:00 P.M. eastern time. As a result, if events
materially affecting the value of such securities occur between the time when
their price is determined and the time the Funds net asset value is calculated,
such securities will be valued at fair value as determined in good faith by
MSFI's Board of Directors. There were no such securities held at June 30,
1996.
The values of all assets and liabilities initially expressed in foreign
currencies are translated into US dollars at the exchange rate of such
currencies against the US dollar as provided by the pricing service as of 12:00
P.M. New York time.
43
<PAGE> 46
Notes to Financial Statements, June 30, 1996 (continued)
(Unaudited)
C) INTERNATIONAL AND PACIFIC RIM EMERGING MARKETS FUNDS - CONTINUED.
The Funds may utilize futures contracts to a limited extent, and may enter into
forward foreign currency contracts to protect the securities and related
receivable and payable against changes in future foreign exchange rates. The
primary risks associated with the use of futures contracts are imperfect
correlation between the change in market value of the securities held by the
Fund and the prices of futures contracts, and the possibility of an illiquid
market. Risks associated with forward currency contracts include movement in
the value of the foreign currency relative to the US dollar and the ability of
the counterpart to perform. Futures and forward currency contracts are valued
based upon their quoted daily settlement prices. Fluctuations in the value of
such contracts are recorded as unrealized appreciation (depreciation) until
terminated, at which time realized gains (losses) are recognized. Unrealized
appreciation (depreciation) related to open futures and forward currency
contracts may be required to be treated as realized gain (loss) for tax
purposes.
Foreign dividends are recorded on the ex-date or as soon after the ex-date that
the Fund is aware of such dividends, net of all non-rebatable tax withholdings.
D) EQUITY INDEX FUND.
Apart from the accounting policies mentioned above, there are other significant
accounting policies followed by MSFI in preparation of financial statements for
the Equity Index Fund.
The Equity Index Fund is using futures contracts to replicate the experience of
the Standard & Poor's 500 Composite Stock Price Index until the fund reaches
$25 million in net assets. The primary risks associated with the use of
futures contracts are imperfect correlation between the change in market value
of the index contracts and the prices of futures contracts and the possibility
of an illiquid market.
E) FEDERAL INCOME TAXES.
It is MSFI's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholder. Therefore, no Federal income tax provision
is required.
F) DIVIDENDS TO SHAREHOLDER.
Dividends to shareholder are recorded on the ex-dividend date.
G) OTHER.
Security transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recorded as earned. Dividend
income is recorded on the ex-dividend date. MSFI uses the First In, First Out
method for determining realized gain or loss on investments for both financial
statement and federal income tax reporting purposes. The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amount of assets and
liabilities. Actual results may differ from these estimates.
44
<PAGE> 47
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term securities for the six
months ended June 30, 1996.
<TABLE>
<CAPTION>
PURCHASES
-------------------------------------------------------------------------------
PORTFOLIO U.S. GOVERNMENT CORPORATE BONDS COMMON STOCK
- ---------------------- --------------- --------------- ------------
<S> <C> <C> <C>
Emerging Growth Equity.......... --- --- $168,324,631
Common Stock.................... --- --- 38,776,405
Real Estate Securities.......... --- --- 47,218,273
Balanced Assets................. $8,929,584 $11,480,525 34,269,230
Capital Growth Bond............. 9,384,643 9,972,652 ---
International .................. --- 976,743 5,574,829
Pacific Rim Emerging Markets.... --- 551,712 5,531,188
Equity Index.................... --- --- 113,941
</TABLE>
<TABLE>
<CAPTION>
SALES
-------------------------------------------------------------------------------
PORTFOLIO U.S. GOVERNMENT CORPORATE BONDS COMMON STOCK
- ---------------------- --------------- --------------- ------------
<S> <C> <C> <C>
Emerging Growth Equity.......... --- --- $152,635,938
Common Stock.................... --- --- 27,541,885
Real Estate Securities.......... --- --- 43,164,293
Balanced Assets................. $14,635,793 $3,969,689 25,260,571
Capital Growth Bond............. 13,301,549 7,929,757 ---
International .................. --- 198,336 4,921,636
Pacific Rim Emerging Markets.... --- 66,665 3,782,980
Equity Index.................... --- --- ---
</TABLE>
The following is a summary of futures contracts activity for the period February
14, 1996 (commencement of operations) to June 30, 1996.
<TABLE>
<CAPTION>
EQUITY INDEX FUND PURCHASES OF FUTURES CONTRACTS
--------------------------------------------------------
NUMBER OF AGGREGATE MARKET UNREALIZED
CONTRACTS VALUE OF CONTRACTS GAIN
--------- ------------------ ----------
<S> <C> <C> <C>
S & P 500 Futures:
Outstanding at June 30, 1996 7 $2,378,100 $16,455
--------- ------------------ ----------
</TABLE>
4. TAX BASIS OF INVESTMENTS
Investment information based on the cost for Federal income tax purposes of the
securities (excluding short-term investments) held at June 30, 1996 is as
follows:
<TABLE>
<CAPTION>
AGGREGATE GROSS AGGREGATE GROSS NET UNREALIZED AGGREGATE COST OF
UNREALIZED UNREALIZED APPRECIATION SECURITIES FOR FEDERAL
PORTFOLIO APPRECIATION DEPRECIATION (DEPRECIATION) INCOME TAX PURPOSES
- ---------------------- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Growth Equity.......... $23,447,980 ($15,001,857) $8,446,123 $180,511,793
Common Stock.................... 10,524,151 (1,800,938) 8,723,213 67,405,318
Real Estate Securities.......... 2,274,226 (677,258) 1,596,968 54,200,326
Balanced Assets................. 10,841,985 (2,410,329) 8,431,656 114,426,487
Capital Growth Bond............. 574,605 (645,404) (70,799) 40,692,743
International .................. 2,327,222 (616,986) 1,710,236 18,372,581
Pacific Rim Emerging Markets.... 1,579,762 (522,523) 1,057,239 16,757,169
Equity Index.................... 118 0 118 2,408,731
</TABLE>
45
<PAGE> 48
Notes to Financial Statements, June 30, 1996 (continued)
5. CAPITAL STOCK AND DISTRIBUTIONS
At June 30, 1996 there were 1,000,000,000 shares of $0.01 par value common
stock authorized.
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK
EQUITY FUND FUND
--------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ---------- ---------------- ----------
<S> <C> <C> <C> <C>
Shares sold.................... 1,116,957 2,232,451 743,819 1,190,184
Shares issued to
shareholder in
reinvestment of
dividends.................... --- 164,511 --- ---
------------- ---------- ------------- ----------
Total issued................... 1,116,957 2,396,962 743,819 1,190,184
Shares reacquired.............. (418,127) (615,559) (216,354) (264,451)
------------- ---------- ------------- ----------
Net increase................... 698,830 1,781,403 527,465 925,733
============= ========== ============= ==========
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY - MARKET
BOND FUND FUND
--------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ---------- ---------------- ----------
<S> <C> <C> <C> <C>
Shares sold.................... 651,493 1,094,742 2,027,504 3,422,196
Shares issued to
shareholder in
reinvestment of
dividends.................... --- 263,567 --- 132
------------- ---------- -------------- ----------
Total issued................... 651,493 1,358,309 2,027,504 3,422,328
Shares reacquired.............. (686,639) (907,815) (1,900,344) (2,477,727)
------------- ---------- -------------- ----------
Net increase................... (35,146) 450,494 127,160 944,601
============= ========== ============== ==========
</TABLE>
At June 30, 1996 the total value of The Manufacturers Life Insurance Company
of America's investments and accumulated earnings were:
International Fund $11,524,879; Pacific Rim Emerging Markets Fund
$7,881,678 and Equity Index Fund $316,731.
46
<PAGE> 49
<TABLE>
<CAPTION>
REAL ESTATE BALANCED ASSETS EQUITY INDEX
SECURITIES FUND FUND FUND
------------------------------ -------------------------------- --------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED FEB. 14/96* TO
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95 JUNE 30/96
(UNAUDITED) (UNAUDITED) (UNAUDITED)
---------------- ---------- ---------------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
Shares sold............. 320,217 815,153 788,038 1,589,739 376,308
Shares issued to
shareholder in
reinvestment of
dividends............. --- 57,730 --- 8,032 ---
------------ ---------- ------------- ---------- ------------
Total issued............ 320,217 872,883 788,038 1,597,771 376,308
Shares reacquired....... (242,400) (590,162) (362,994) (566,288) (135,920)
------------ ---------- ------------- ---------- ------------
Net increase............ 77,817 282,721 425,044 1,031,483 240,388
============ ========== ============= ========== ============
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PACIFIC RIM
FUND EMERGING MARKETS FUND
------------------------------ ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
JUNE 30/96 DEC. 31/95 JUNE 30/96 DEC. 31/95
(UNAUDITED) (UNAUDITED)
---------------- ---------- ---------------- ----------
<S> <C> <C> <C> <C>
Shares sold............. 633,474 659,837 633,886 546,094
Shares issued to
shareholder in
reinvestment of
dividends............. --- 42,491 --- 15,245
------------ ---------- ------------- ----------
Total issued............ 633,474 702,328 633,886 561,339
Shares reacquired....... (59,429) (66,801) (123,977) (114,449)
------------ ---------- ------------- ----------
Net increase............ 574,045 635,527 509,909 446,890
============ ========== ============= ==========
</TABLE>
*Commencement of operations
47
<PAGE> 50
Notes to Financial Statements, June 30, 1996 (continued)
(Unaudited)
6. INDUSTRY DISCLOSURE
As of June 30, 1996 the International Fund and Pacific Rim Emerging Markets Fund
portfolio diversification was as follows:
<TABLE>
<CAPTION>
PACIFIC RIM
INTERNATIONAL EMERGING
INDUSTRY FUND MARKETS FUND
- ------------------------------------------------------------------
<S> <C> <C>
Basic Industries 17.67% 12.66%
Capital Goods 9.89% 11.88%
Conglomerates 5.04% 4.13%
Consumer goods 8.96% 5.96%
Consumer Services 1.26% 1.05%
Finance 19.21% 16.98%
General Business 11.57% 13.24%
Real Estate 4.46% 7.13%
Repurchase Agreements 9.13% 19.74%
Technology 7.07% 4.04%
Utilities 5.74% 3.19%
------ ------
Total 100.00% 100.00%
====== ======
</TABLE>
7. FOREIGN EXCHANGE CONTRACTS
The International and Pacific Rim Emerging Markets Fund will, from time to time,
enter into foreign currency exchange contracts. There are costs and risks
associated with such currency transactions. No type of foreign currency
transaction will eliminate fluctuations in the prices of the Fund's foreign
securities nor will prevent loss if the prices of such securities should
decline. No forward foreign exchange contracts were held by the Fund at June
30, 1996.
8. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MSFI has an Investment Advisory Agreement with Manufacturers Adviser Corporation
("the Adviser"), a wholly-owned subsidiary of The Manufacturers Life Insurance
Company of America, which in turn is a wholly-owned subsidiary of The Manulife
Reinsurance Corporation (USA)("MRC"). MRC is a life insurance holding company
organized in 1983 under Michigan law and a wholly-owned subsidiary of The
Manufacturers Life Insurance Company ("Manulife Financial"), a mutual life
insurance company based in Toronto, Canada.
The Adviser is responsible for the management of MSFI's Funds and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operation of MSFI. For such services, the Adviser receives daily
compensation at the annual rate of .50% from the Emerging Growth Equity Fund,
Common Stock Fund, Real Estate Securities Fund, Balanced Assets Fund, Capital
Growth Bond Fund, and Money - Market Fund.
For the International Fund and Pacific Rim Emerging Markets Fund, the Adviser
receives the following for investment management: i) .85% of the average daily
value of the aggregate net assets of each Fund on the first $100 million and ii)
.70% of the average daily value of the aggregate net assets of each Fund in
excess of $100 million. In addition, the Funds will reimburse the Adviser for
general expenses necessary to the operation of the Funds at the rate of i) up to
.50% of the daily net assets of the portfolio for the International Fund and
ii) up to .65% of the daily net assets of the portfolio for the Pacific Rim
Emerging Markets Fund.
For the Equity Index Fund, the Adviser receives .25% of the average daily value
of the aggregate net assets of the fund for investment management. In addition,
the fund will reimburse the Adviser for general expenses necessary to the
operation of the fund at the rate of up to .15% of the daily net assets of the
portfolio.
Certain officers and/or directors of MSFI are officers and/or directors of the
Adviser, MHC, MLIM, and Manulife Financial, however, there are no common
directors of MSFI and the Adviser.
48
<PAGE> 51
9. FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
EMERGING GROWTH EQUITY FUND
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period.................... $23.10 $18.55 $19.42 $17.76 $16.18 $9.95
-------- -------- ------- ------- ------- ------
Income from investment operations:
Net investment income.................. --- 0.03 0.01 (0.01) (0.02) ---
Net realized and unrealized gain
(loss) on investments.................. 1.64 5.10 (0.81) 4.16 3.51 7.08
-------- -------- ------- ------- ------- ------
Total from investment operations...... 1.64 5.13 (0.80) 4.15 3.49 7.08
-------- -------- ------- ------- ------- ------
Dividend Distributions:
Net investment income.................. --- (0.01) 0.00 --- --- ---
Net realized gain...................... --- (0.57) (0.07) (2.49) (1.91) (0.85)
-------- -------- ------- ------- ------- ------
Total dividend distributions........... 0.00 (0.58) (0.07) (2.49) (1.91) (0.85)
-------- -------- ------- ------- ------- ------
Net asset value end of period.......... $24.74 $23.10 $18.55 $19.42 $17.76 $16.18
======== ======== ======= ======= ======= ======
Net assets end of period (in 000's).... $191,193 $162,426 $97,379 $55,767 $18,504 $9,822
Aggregate return on share outstanding
during entire period................... 7.04 % 27.75 % (4.10) % 23.89 % 21.82 % 71.34 %
Significant ratios :
Portfolio turnover..................... 171.10 % (A) 145.42 % 69.40 % 92.95 % 126.62 % 87.63 %
Ratio of expenses to average
net assets............................. 0.50 % (A) 0.50 % 0.50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets..................... 0.01 % (A) 0.16 % 0.07 % (0.04) % (0.14) % 0.02 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets.................. 12.14 % (A) 23.73 % (3.02) % 23.61 % 23.82 % 50.44 %
Average commission rate per share (B).. $0.060 N/A N/A N/A N/A N/A
</TABLE>
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets, the
relationship between the translated U.S. dollar price per share and
commissions paid per share may vary from that of domestic markets.
49
<PAGE> 52
Notes to Financial Statements, June 30, 1996 (continued)
9. FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding
for the periods indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK FUND
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period..................... $17.27 $13.36 $14.68 $13.73 $13.33 $10.48
------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income................... 0.12 0.24 0.20 0.19 0.18 0.21
Net realized and unrealized gain
(loss) on investments................... 1.34 3.67 (0.81) 1.64 0.61 2.94
------- ------- ------- ------- ------ ------
Total from investment operations....... 1.46 3.91 (0.61) 1.83 0.79 3.15
------- ------- ------- ------- ------ ------
Dividend Distributions:
Net investment income................... --- --- (0.20) (0.19) (0.18) (0.21)
Net realized gain....................... --- --- (0.51) (0.69) (0.21) (0.09)
------- ------- ------- ------- ------ ------
Total dividend distributions............ 0.00 0.00 (0.71) (0.88) (0.39) (0.30)
------- ------- ------- ------- ------ ------
Net asset value end of period........... $18.73 $17.27 $13.36 $14.68 $13.73 $13.33
======= ======= ======= ======= ====== ======
Net assets end of period (in 000's)..... $76,032 $60,996 $34,829 $21,651 $9,708 $5,480
Aggregate return on share outstanding
during entire period.................... 8.45 % 29.23 % (4.19) % 13.39 % 6.07 % 30.18 %
Significant ratios :
Portfolio turnover...................... 85.74 % (A) 109.03 % 84.78 % 88.23 % 47.60 % 53.01 %
Ratio of expenses to average
net assets.............................. 0.50 % (A) 0.50 % 0.50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets...................... 1.77 % (A) 1.76 % 1.53 % 1.39 % 1.51 % 1.78 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................... 15.76 % (A) 25.70 % (4.49) % 11.50 % 7.94 % 25.41 %
Average commission rate per share (B)... $0.060 N/A N/A N/A N/A N/A
</TABLE>
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets, the
relationship between the translated U.S. dollar price per share and
commissions paid per share may vary from that of domestic markets.
50
<PAGE> 53
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE SECURITIES FUND
- -----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period..................... $15.10 $13.34 $14.07 $12.75 $10.92 $8.16
------- ------- ------- ------- ------ ------
Income from investment operations:
Net investment income................... 0.36 0.67 0.55 0.47 0.45 0.53
Net realized and unrealized gain
(loss) on investments................... 0.55 1.35 (0.93) 2.38 1.83 2.76
------- ------- ------- ------- ------ ------
Total from investment operations....... 0.91 2.02 (0.38) 2.85 2.28 3.29
------- ------- ------- ------- ------ ------
Dividend Distributions:
Net investment income................... 0.00 (0.26) (0.27) (0.47) (0.45) (0.53)
Net realized gain....................... 0.00 --- (0.08) (1.06) --- ---
------- ------- ------- ------- ------ ------
Total dividend distributions............ 0.00 (0.26) (0.35) (1.53) (0.45) (0.53)
------- ------- ------- ------- ------ ------
Net asset value end of period........... $16.01 $15.10 $13.34 $14.07 $12.75 $10.92
======= ======= ======= ======= ====== ======
Net assets end of period (in 000's)..... $56,860 $52,440 $42,571 $24,106 $7,273 $4,120
Aggregate return on share outstanding
during entire period.................... 6.03 % 15.14 % (2.76)% 22.61 % 21.29 % 41.10 %
Significant ratios :
Portfolio turnover...................... 169.22 % (A) 136.05 % 35.60 % 143.00 % 70.71 % 40.29 %
Ratio of expenses to average
net assets............................... 0.50 % (A) 0.50 % 0.50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets...................... 4.88 % (A) 5.06 % 4.26 % 3.93 % 4.13 % 5.40 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................... 11.81 % (A) 14.51 % (4.48) % 15.23 % 20.29 % 33.48 %
Average commission rate per share (B)... $0.060 N/A N/A N/A N/A N/A
</TABLE>
51
<PAGE> 54
Notes to Financial Statements, June 30, 1996 (continued)
9. FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding for the
periods indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
BALANCED ASSETS FUND
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period..................... $17.15 $13.77 $15.18 $14.52 $14.51 $12.35
-------- -------- ------- ------- ------- -------
Income from investment operations:
Net investment income................... 0.28 0.53 0.48 0.44 0.51 0.60
Net realized and unrealized gain
(loss) on investments................... 0.30 2.87 (1.11) 1.29 0.37 2.22
-------- -------- ------- ------- ------- -------
Total from investment operations....... 0.58 3.40 (0.63) 1.73 0.88 2.82
-------- -------- ------- ------- ------- -------
Dividend Distributions:
Net investment income................... --- (0.02) (0.48) (0.44) (0.51) (0.60)
Net realized gain....................... --- --- (0.30) (0.63) (0.36) (0.06)
-------- -------- ------- ------- ------- -------
Total dividend distributions............ 0.00 (0.02) (0.78) (1.07) (0.87) (0.66)
-------- -------- ------- ------- ------- -------
Net asset value end of period........... $17.73 $17.15 $13.77 $15.18 $14.52 $14.51
======== ======== ======= ======= ======= =======
Net assets end of period (in 000's)..... $122,018 $110,761 $74,737 $58,156 $27,733 $18,515
Aggregate return on share outstanding
during entire period.................... 3.36 % 24.69 % (4.15) % 11.99 % 6.21 % 23.36 %
Significant ratios :
Portfolio turnover...................... 81.97 % (A) 98.99 % 86.42 % 96.62 % 75.83 % 41.95 %
Ratio of expenses to average
net assets.............................. 0.50 % (A) 0.50 % 0.50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets...................... 3.65 % (A) 3.65 % 3.37 % 3.08 % 3.75 % 4.52 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................... 6.56 % (A) 21.79 % (4.11) % 10.09 % 6.99 % 20.84 %
Average commission rate per share (B)... $0.059 N/A N/A N/A N/A N/A
</TABLE>
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets, the
relationship between the translated U.S. dollar price per share and
commissions paid per share may vary from that of domestic markets.
52
<PAGE> 55
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL GROWTH BOND FUND
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period.................... $11.30 $10.10 $11.33 $11.12 $11.47 $10.62
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income.................. 0.35 0.72 0.72 0.65 0.77 0.83
Net realized and unrealized gain
(loss) on investments.................. (0.61) 1.32 (1.22) 0.51 (0.11) 0.85
------- ------- ------- ------- ------- -------
Total from investment operations....... (0.26) 2.04 (0.50) 1.16 0.66 1.68
------- ------- ------- ------- ------- -------
Dividend Distributions:
Net investment income.................. --- (0.72) (0.72) (0.65) (0.78) (0.83)
Net realized gain...................... --- (0.12) (0.01) (0.30) (0.23) ---
------- ------- ------- ------- ------- -------
Total dividend distributions........... 0.00 (0.84) (0.73) (0.95) (1.01) (0.83)
------- ------- ------- ------- ------- -------
Net asset value end of period.......... $11.04 $11.30 $10.10 $11.33 $11.12 $11.47
======= ======= ======= ======= ======= =======
Net assets end of period (in 000's).... $41,329 $42,694 $33,618 $41,183 $30,695 $29,326
Aggregate return on share outstanding
during entire period................. (2.29) % 20.24 % (4.49) % 10.56 % 5.89 % 16.38 %
Significant ratios :
Portfolio turnover..................... 100.85 % (A) 84.74 % 79.04 % 94.75 % 153.05 % 19.60 %
Ratio of expenses to average net
assets............................... 0.50 % (A) 0.50 % 0 .50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets..................... 6.14 % (A) 6.36 % 6.29 % 5.69 % 6.76 % 7.54 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................ (4.71) % (A) 18.11 % (5.23) % 9.28 % 5.78 % 15.35 %
Average commission rate per share (B).. N/A N/A N/A N/A N/A N/A
</TABLE>
53
<PAGE> 56
Notes to Financial Statements, June 30, 1996 (continued)
9. FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding for the
periods indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
MONEY - MARKET FUND
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 DEC. 31/93 DEC. 31/92 DEC. 31/91
JUNE 30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value
beginning of period........................ $10.84 $10.26 $10.23 $10.22 $10.21 $10.21
------- ------- ------- ------- ------- ------
Income from investment operations:
Net investment income...................... 0.27 0.58 0.39 0.27 0.34 0.57
Net realized and unrealized
loss on investments and foreign
currency transactions and translation --- --- --- --- --- ---
------- ------- ------- ------- ------- ------
Total from investment operations.......... 0.27 0.58 0.39 0.27 0.34 0.57
------- ------- ------- ------- ------- ------
Dividend Distributions:
Net investment income...................... --- --- (0.36) (0.26) (0.33) (0.57)
Net realized gain.......................... --- --- --- --- --- ---
------- ------- ------- ------- ------- ------
Total dividend distributions............... 0.00 0.00 (0.36) (0.26) (0.33) (0.57)
------- ------- ------- ------- ------- ------
Net asset value end of period.............. $11.11 $10.84 $10.26 $10.23 $10.22 $10.21
======= ======= ======= ======= ======= ======
Net assets end of period (in 000's)........ $38,289 $35,992 $24,384 $13,860 $10,825 $8,615
Aggregate return on share outstanding
during entire period....................... 2.46 % 5.63 % 3.89 % 2.73 % 3.40 % 5.60 %
Significant ratios :
Portfolio turnover......................... None None None None None None
Ratio of expenses to average
net assets................................. 0.50 % (A) 0.50 % 0.50 % 0.50 % 0.50 % 0.50 %
Ratio of net investment income to
average net assets......................... 4.85 % (A) 5.35 % 3.84 % 2.67 % 3.25 % 5.45 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets...................... 4.85 % (A) 5.35 % 3.84 % 2.67 % 3.25 % 5.45 %
Average commission rate per share (B)...... N/A N/A N/A N/A N/A N/A
</TABLE>
(A) Annualized
(B) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share of all security
trades on which commissions are charged. In certain foreign markets, the
relationship between the translated U.S. dollar price per share and
commissions paid per share may vary from that of domestic markets.
54
<PAGE> 57
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL FUND PACIFIC RIM EMERGING MARKETS FUND
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED OCT. 04/94* TO SIX MONTHS YEAR ENDED
ENDED DEC. 31/95 DEC. 31/94 ENDED DEC. 31/95
JUNE 30/96 JUNE 30/96
(UNAUDITED) (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value
beginning of period.................... $10.67 $9.82 $10.00 $10.36 $9.41
------- ------- ------- ------- -------
Income from investment operations:
Net investment income.................. 0.09 0.13 0.02 0.06 0.12
Net realized and unrealized loss
on investments and foreign currency
transactions and translation 0.46 0.98 (0.18) 0.66 0.96
------- ------- ------- ------- -------
Total from investment operations....... 0.55 1.11 (0.16) 0.72 1.08
------- ------- ------- ------- -------
Dividend Distributions:
Net investment income.................. --- (0.13) (0.02) --- (0.09)
Net realized gain...................... --- (0.13) --- --- (0.04)
------- ------- ------- ------- -------
Total dividend distributions........... 0.00 (0.26) (0.02) 0.00 (0.13)
------- ------- ------- ------- -------
Net asset value end of period.......... $11.22 $10.67 $9.82 $11.08 $10.36
======= ======= ======= ======= =======
Net assets end of period (in 000's).... $26,477 $19,048 $11,290 $19,627 $13,057
Aggregate return on share outstanding
during entire period................. 5.18 % 11.28 % (1.54) % 7.03 % 11.47 %
Significant ratios :
Portfolio turnover..................... 54.03 % (A) 60.95 % 0.00 % 56.53 % (A) 54.85 %
Ratio of expenses to average
net assets........................... 1.35 % (A) 1.35 % 1.35 % (A) 1.50 % (A) 1.50 %
Ratio of net investment income to
average net assets................... 1.83 % (A) 1.49 % 1.31 % (A) 1.22 % (A) 1.01 %
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................ 9.37 % (A) 11.39 % (6.28) % (A) 11.14 % (A) 11.86 %
Average commission rate
per share (B)........................ $0.019 N/A N/A $0.021 N/A
<CAPTION>
- ---------------------------------------------------------------------------
EQUITY INDEX FUND
- ---------------------------------------------------------------------------
OCT. 04/94* TO FEB. 14/96* TO
DEC. 31/94 JUNE 30/96
(UNAUDITED)
- ---------------------------------------------------------------------------
<S> <C> <C>
Net asset value
beginning of period.................... $10.00 $10.00
------ ------
Income from investment operations:
Net investment income.................. 0.04 0.09
Net realized and unrealized loss
on investments and foreign currency
transactions and translation (0.59) 0.28
------ ------
Total from investment operations....... (0.55) 0.37
------ ------
Dividend Distributions:
Net investment income.................. (0.04) ---
Net realized gain...................... --- ---
------ ------
Total dividend distributions........... (0.04) 0.00
------ ------
Net asset value end of period.......... $9.41 $10.37
====== ======
Net assets end of period (in 000's).... $7,657 $2,493
Aggregate return on share outstanding
during entire period................. (5.63) % 3.71 %
Significant ratios :
Portfolio turnover..................... 0.00 % 0.00 %
Ratio of expenses to average
net assets........................... 1.50 % (A) 0.40 % (A)
Ratio of net investment income to
average net assets................... 1.84 % (A) 3.75 % (A)
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets................ (23.41) % (A) 7.79 % (A)
Average commission rate per share (B).. N/A $0.040
</TABLE>
* Commencement of Operations
55
<PAGE> 58
Directors & Officers
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
NAME POSITION WITH PRINCIPAL OCCUPATIONS
THE COMPANY DURING PAST FIVE YEARS
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
*Edward C. Balzarotti Director President, Jettron Products Inc., East Hanover, NJ.
Donald A. Guloien Director Senior Vice President, Business Development - 1994 -
and President present, The Manufacturers Life Insurance Company; Vice
President, U.S. Individual Business - 1990 - 1994,
The Manufacturers Life Insurance Company.
*Francis J. Knott Director President - 1992 - present, VITAL Resources;
Chairman - 1989 - 1992, Videoconferencing Systems, Inc.
*F. David Rolwing Director President, Montgomery Mutual Insurance Company,
Sandy Spring, MD.
John D. Richardson Director Senior Vice President, and General Manager, U.S. Operations -
and Chairman 1995 - present, The Manufacturers Life Insurance Company;
Senior Vice President and General Manager, Canadian
Operations - 1992 - 1994, The Manufacturers Life Insurance
Company; Senior Vice President, Financial Services - 1992,
The Manufacturers Life Insurance Company; Executive Vice
Chairman & CFO - 1989 - 1991, Canada Trust.
Douglas H. Myers Vice President, Assistant Vice President and Controller, U.S. Operations -
Compliance 1988 - present, The Manufacturers Life Insurance Company.
Vice President,
Finance and
Treasurer
Sheri L. Kocen Secretary Assistant Vice President and Counsel - 1996 - present, The
Manufacturers Life Insurance Company; Senior Counsel - 1990
- 1996, The Manufacturers Life Insurance Company.
</TABLE>
* Audit Committee Member
56
<PAGE> 59
LOGO
The Manufacturers Life Insurance Company of America
ManEquity, Inc.
Manulife Financial and the block design are registered service marks of The
Manufacturers Life Insurance Company and are used by it and its subsidiaries.
IM5057SR 08/96 Printed in Canada
