AMERICAN VARIABLE INSURANCE SERIES
Part B
Statement of Additional Information
APRIL 1, 1995
(AS AMENDED JUNE 14, 1995)
This document is not a prospectus but should be read in conjunction with the
current prospectus of American Variable Insurance Series (the "Series") dated
April 1, 1995. The prospectus may be obtained from your investment dealer or
financial planner or by writing to the Series at the following address:
American Variable Insurance Series
Attention: Secretary
333 South Hope Street
Los Angeles, CA 90071
(213) 486-9200
TABLE OF CONTENTS
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ITEM PAGE NO.
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INVESTMENT POLICIES 1
INVESTMENT RESTRICTIONS 6
SERIES OFFICERS AND TRUSTEES 11
TRUSTEE COMPENSATION 11
MANAGEMENT 15
PRICE OF SHARES 16
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES 17
EXECUTION OF PORTFOLIO TRANSACTIONS 18
GENERAL INFORMATION 19
APPENDIX 20
FINANCIAL STATEMENTS ATTACHED
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INVESTMENT POLICIES
The discussion below is intended to supplement the information contained in
the prospectus.
ASSET ALLOCATION FUND AND HIGH-YIELD BOND FUND
CERTAIN RISK FACTORS RELATING TO HIGH-YIELD, HIGH-RISK SECURITIES:
SENSITIVITY TO INTEREST RATE AND ECONOMIC CHANGES - High-yield, high-risk
securities can be sensitive to adverse economic changes and corporate
developments. During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience financial stress that
would adversely affect their ability to service their principal and interest
payment obligations, to meet projected business goals, and to obtain additional
financing. If the issuer of a bond defaulted on its obligations to pay
interest or principal or entered into bankruptcy proceedings, each fund may
incur losses or expenses in seeking recovery of amounts owed to it. In
addition, periods of economic uncertainty and changes can be expected to result
in increased volatility of market prices and yields of high-yield, high-risk
bonds and each fund's net asset value.
PAYMENT EXPECTATIONS - High-yield, high-risk bonds may contain redemption or
call provisions. If an issuer exercised these provisions in a declining
interest rate market, each fund would have to replace the security with a lower
yielding security, resulting in a decreased return for investors. Conversely,
a high-yield, high-risk bond's value will decrease in a rising interest rate
market, as will the value of each fund's assets. If a fund experiences
unexpected net redemptions, this may force it to sell high-yield, high-risk
bonds without regard to their investment merits, thereby decreasing the asset
base upon which expenses can be spread and possibly reducing each fund's rate
of return.
LIQUIDITY AND VALUATION - There may be little trading in the secondary market
for particular bonds, which may affect adversely each fund's ability to value
accurately or dispose of such bonds. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may decrease the
values and liquidity of high-yield, high-risk bonds, especially in a thin
market.
GROWTH FUND, HIGH-YIELD BOND FUND AND INTERNATIONAL FUND
CURRENCY TRANSACTIONS -- The Growth Fund, High-Yield Bond Fund and
International Fund have the ability to hold a portion of their assets in
various currencies and to enter into certain currency contracts in connection
with investing in non-U.S. dollar denominated securities. The Growth Fund does
not currently intend to enter into currency contracts other than foreign
exchange contracts which will be used to facilitate settlement of trades. For
example, the fund might purchase a currency or enter into a foreign exchange
contract to preserve the U.S. dollar price of securities it has contracted to
purchase.
The High-Yield Bond Fund and International Fund, in addition to entering into
foreign exchange contracts, may enter into forward currency contracts to hedge
against changes in currency exchange rates relative to the U.S. dollar. For
example, a fund might enter into a forward currency contract to protect against
an anticipated decline in value of a foreign currency against the U.S. dollar
when it holds securities denominated in that foreign currency.
To avoid having an amount greater than its net assets subject to market risk
in connection with currency contract transactions, each fund will segregate
cash, cash equivalents, or high quality debt instruments in an amount equal to
the value of the currency it has committed to purchase.
ASSET ALLOCATION FUND AND U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
GNMA CERTIFICATES, FNMA AND FHLMC MORTGAGE-BACKED OBLIGATIONS, OTHER
MORTGAGE-RELATED SECURITIES -- The funds may purchase certificates issued by
the Government National Mortgage Association ("GNMA") and the U.S.
Government/AAA-Rated Securities Fund expects to invest in these securities.
GNMA certificates are mortgage-backed securities representing part ownership of
a pool of mortgage loans on which timely payment of interest and principal is
guaranteed by the full faith and credit of the U.S. Government. A pool of
these mortgages is assembled and, after being approved by GNMA, is offered to
investors through securities dealers. GNMA certificates differ from typical
bonds because principal is repaid monthly over the term of the loan rather than
returned in a lump sum at maturity. Because both interest and principal
payments (including prepayments) on the underlying mortgage loans are passed
through to the holder of the certificate, GNMA certificates are called
"pass-through" securities.
The Federal National Mortgage Association ("FNMA"), a federally chartered and
privately-owned corporation, issues pass-through securities representing
interests in a pool of conventional mortgage loans. FNMA guarantees the timely
payment of principal and interest, but this guarantee is not backed by the full
faith and credit of the U.S. Government. The Federal Home Loan Mortgage
Corporation ("FHLMC"), a corporate instrumentality of the U.S. Government,
issues participation certificates which represent an interest in a pool of
conventional mortgage loans. FHLMC guarantees the timely payment of interest
and the ultimate collection of principal and maintains reserves to protect
holders against losses due to default, but the certificates are not backed by
the full faith and credit of the U.S. Government. As is the case with GNMA
certificates, the actual maturity of and realized yield on particular FNMA and
FHLMC pass-through securities will vary based on the prepayment experience of
the underlying pool of mortgages.
The funds may invest in mortgage-related securities issued by financial
institutions such as commercial banks, savings and loan associations, mortgage
bankers and securities broker-dealers (or separate trusts or affiliates of such
institutions established to issue the securities) including collateralized
mortgage obligations ("CMO's") and mortgage-backed bonds. CMO's (including
real estate mortgage investment conduits as authorized under the Internal
Revenue Code of 1986, as amended) are issued in series that are made up of a
group of bonds that together are fully collateralized directly or indirectly by
a pool of mortgages on which the payments of principal and interest are
dedicated to payment of principal and interest on the bonds in the series.
Each class of bonds in the series may have a different maturity than the other
classes of bonds in the series, bear a different coupon and have a different
priority in receiving payments. The different maturities come from the fact
that all principal payments, both regular principal payments as well as any
prepayment of principal, are passed through first to the holders of the class
with the shortest maturity until it is completely retired. Thereafter,
principal payments are passed through to the next class of bonds in the series,
until all the classes have been paid off. As a result, an acceleration in the
rate of prepayments that may be associated with declining interest rates
shortens the expected life of each class, with the greatest impact on those
classes with the shortest maturities. Similarly, should the rate of
prepayments slow down, as may happen in times of rising interest rates, the
expected life of each class lengthens, again with the greatest impact on those
classes with the shortest maturities. In the case of some CMO series, each
class may receive a differing proportion of the monthly interest and principal
repayments on the underlying collateral. In these series the classes having
proportionally greater interests in principal repayments generally would be
more affected by an acceleration (or slowing) in the rate of prepayments.
Mortgage-backed bonds are general obligations of the issuer fully
collateralized directly or indirectly by a pool of mortgages. The mortgages
serve as collateral for the issuer's payment obligations on the bonds, but
interest and principal payments on the mortgages are not passed through either
directly (as with GNMA certificates and FNMA and FHLMC pass-through securities)
or on a modified basis (as with CMO's). Accordingly, a change in the rate of
prepayments on the pool of mortgages could change the effective maturity of a
CMO but not that of a mortgage-backed bond (although, like many bonds,
mortgage-backed bonds can provide that they are callable by the issuer prior to
maturity).
U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
REVERSE REPURCHASE AGREEMENTS -- Although the U.S. Government/AAA-Rated
Securities Fund has no current intention of doing so during the next 12 months,
the fund is authorized to enter into reverse repurchase agreements. A reverse
repurchase agreement is the sale of a security by the fund and its agreement to
repurchase the security at a specified time and price. The fund will maintain
in a segregated account with its custodian cash, cash equivalents or U.S.
Government securities in an amount sufficient to cover its obligations under
reverse repurchase agreements with broker-dealers (but no collateral is
required on reverse repurchase agreements with banks). Under the Investment
Company Act of 1940 (the "1940 Act"), reverse repurchase agreements may be
considered borrowings by the fund; accordingly, the fund will limit its
investments in reverse repurchase agreements, together with any other
borrowings, to no more than one-third of its total assets. The use of reverse
repurchase agreements by the fund creates leverage which increases the fund's
investment risk. As the fund's aggregate commitments under these reverse
repurchase agreements increase, the opportunity for leverage similarly
increases. If the income and gains on securities purchased with the proceeds
of reverse repurchase agreements exceed the costs of the agreements, the fund's
earnings or net asset value will increase faster than otherwise would be the
case; conversely, if the income and gains fail to exceed the costs, earnings or
net asset value would decline faster than otherwise would be the case.
ASSET ALLOCATION FUND, U.S. GOVERNMENT/AAA-RATED SECURITIES FUND AND
HIGH-YIELD BOND FUND
LOANS OF PORTFOLIO SECURITIES -- Although the Asset Allocation Fund, U.S.
Government/AAA-Rated Securities Fund and High-Yield Bond Fund have no current
intention of doing so during the next 12 months, these funds are authorized to
lend portfolio securities to selected securities dealers or other institutional
investors whose financial condition is monitored by Capital Research and
Management Company (the "Investment Adviser"). The borrower must maintain with
the Series' custodian collateral consisting of cash, cash equivalents or U.S.
Government securities equal to at least 100% of the value of the borrowed
securities, plus any accrued interest. The Investment Adviser will monitor the
adequacy of the collateral on a daily basis. Each fund may at any time call a
loan of its portfolio securities and obtain the return of the loaned
securities. Each fund will receive any interest paid on the loaned securities
and a fee or a portion of the interest earned on the collateral. Each fund
will limit its loans of portfolio securities to an aggregate of 10% of the
value of its total assets, determined at the time any such loan is made.
PORTFOLIO TRADING OF FIXED-INCOME SECURITIES -- The funds intend to engage in
portfolio trading of fixed-income securities when it is believed that the sale
of a fixed-income security owned and the purchase of another security of better
value can enhance principal and/or increase income. A security may be sold to
avoid any prospective decline in market value in light of what is evaluated as
an expected rise in prevailing yields, or a security may be purchased in
anticipation of a market rise (a decline in prevailing yields). A security
also may be sold and a comparable security purchased coincidentally in order to
take advantage of what is believed to be a disparity in the normal yield and
price relationship between the two securities.
"ROLL" TRANSACTIONS -- Although the Asset Allocation Fund, U.S.
Government/AAA-Rated Securities Fund and High-Yield Bond Fund have no current
intention of doing so during the next 12 months, these funds may engage in
"roll" transactions. A "roll" transaction is the sale of securities together
with a commitment (for which a fund may receive a fee) to purchase similar, but
not identical, securities at a future date. Under the 1940 Act, these
transactions may be considered borrowings by the funds; accordingly, each fund
will limit its use of these transactions, together with any other borrowings,
to no more than one-third of its total assets. The funds will segregate liquid
assets such as cash, U.S. Government securities or other high grade debt
obligations in an amount sufficient to meet their payment obligations in these
transactions. Although these transactions will not be entered into for
leveraging purposes, to the extent a fund's aggregate commitments under these
transactions exceed its holdings of cash and securities that do not fluctuate
in value (such as short-term money market instruments), the fund temporarily
will be in a leveraged position (I.E., it will have an amount greater than its
net assets subject to market risk). Should market value of a fund's portfolio
securities decline while the fund is in a leveraged position, greater
depreciation of its net assets would likely occur than were it not in such a
position. As the funds' aggregate commitments under these transactions
increase, the opportunity for leverage similarly increases.
HIGH-YIELD BOND FUND
LOAN PARTICIPATIONS The High-Yield Bond Fund may invest up to 10% of its
assets in loan participations. Loan participations typically are made by a
syndicate of banks to U.S. and non-U.S. corporate or governmental borrowers for
a variety of purposes. The underlying loans may be secured or unsecured, and
will vary in term and legal structure. Typically, price quotations with
respect to loan participations are available from the originating bank (the
bank that makes the underlying loan). The originating bank also serves as the
market maker for the resale of loan participations. When purchasing such
instruments, the fund may assume the credit risks associated with the original
bank lender as well as the credit risks associated with the borrower. In
addition, if the loan is foreclosed, a fund could be part owner of any
collateral, and could bear the costs and liabilities of owning and disposing of
the collateral. Loan participations generally are not rated by major rating
agencies and may not be protected by the securities laws. Also, loan
participations may be liquid or illiquid. To the extent these instruments are
illiquid, the fund may have difficulty determining their value or selling the
instruments as generally there is no secondary market. The fund will purchase
these instruments only to the extent that such a purchase would be consistent
with the fund's investment policies regarding debt securities and/or illiquid
securities.
In determining whether to purchase a particular loan participation, the
Investment Adviser will take into account all relevant factors including the
instrument's potential volatility, liquidity and risks (including whether the
fund could be put in an undesirable position as lender and/or owner of
collateral).
CASH MANAGEMENT FUND
The Cash Management Fund seeks to achieve its investment objective by
investing in a diversified selection of money market instruments and the other
funds generally will invest a portion of their assets in money market
instruments. These money market instruments include the following:
1. Commercial Paper: Short-term notes (up to nine months) issued by companies
or governmental bodies. The Cash Management Fund may only purchase commercial
paper judged by the Investment Adviser to be of suitable investment quality.
This includes commercial paper that is (a) rated in the two highest categories
by Standard & Poor's Corporation and by Moody's Investors Service, Inc. or (b)
other commercial paper deemed on the basis of the issuer's creditworthiness to
be of a quality appropriate for the Cash Management Fund. (No more than 5% of
the Cash Management Fund's assets may be invested in commercial paper rated in
the second highest rating category by either Moody's or Standard & Poor's; no
more than the greater of 1% of the Cash Management Fund's assets or $1 million
may be invested in such securities of any one issuer.) See the Appendix for a
description of the ratings. The commercial paper in which the Cash Management
Fund may invest includes variable amount master demand notes. Variable amount
master demand notes permit the Cash Management Fund to invest varying amounts
at fluctuating rates of interest pursuant to the agreement in the master note.
These are direct lending obligations between the lender and borrower, they are
generally not traded, and there is no secondary market. Such instruments are
payable with accrued interest in whole or in part on demand. The amounts of
the instruments are subject to daily fluctuations as the participants increase
or decrease the extent of their participations. Investments in these
instruments are limited to those that have a demand feature enabling the Cash
Management Fund unconditionally to receive the amount invested from the issuer
upon seven or fewer days' notice. (Generally, the Cash Management Fund
attempts to invest in instruments having a one-day notice provision). In
connection with master demand note arrangements, the Investment Adviser,
subject to the direction of the Trustees, monitors on an ongoing basis, the
earning power, cash flow, and other liquidity ratios of the borrower and its
ability to pay principal and interest on demand. The Investment Adviser also
considers the extent to which the variable amount master demand notes are
backed by bank letters of credit. These notes generally are not rated by
Moody's or Standard & Poor's. The Cash Management Fund may invest in them only
if it is deemed that at the time of investment the notes are of comparable
quality to the other commercial paper in which the Cash Management Fund may
invest. Master demand notes are considered to have a maturity equal to the
repayment notice period unless the Investment Adviser has reason to believe
that the borrower could not make timely repayment upon demand.
2. Commercial Bank Obligations: Certificates of deposit (interest-bearing
time deposits), bankers acceptances (time drafts drawn on a commercial bank
where the bank accepts an irrevocable obligation to pay at maturity)
representing direct or contingent obligations of commercial banks with assets
in excess of $1 billion, based on latest published reports or obligations
issued by commercial banks with assets of less than $1 billion if the principal
amount of such obligation is fully insured by the U.S. Government.
3. Corporate Bonds and Notes: The Cash Management Fund may purchase corporate
obligations that mature or that may be redeemed in one year or less. These
obligations originally may have been issued with maturities in excess of one
year. The Cash Management Fund may invest only in corporate bonds or notes of
issuers having outstanding short-term securities rated as described above in
"Commercial Paper."
4. Savings Association Obligations: Certificates of deposit (interest-bearing
time deposits) issued by savings banks or savings and loan associations that
have assets in excess of $1 billion, based on latest published reports, or
obligations issued by institutions with assets of less than $1 billion if the
principal amount of such obligation is fully insured by the U.S. Government.
5. Floating Rate Obligations: These securities have a coupon rate that
changes at least annually and generally more frequently. The coupon rate is
set in relation to money market rates. The obligations, issued primarily by
banks, other corporations, governments and semi-governmental bodies, may have a
maturity in excess of one year. In some cases, the coupon rate may vary with
changes in the yield on Treasury bills or notes or with changes in LIBOR
(London Interbank Offering Rate). The Investment Adviser considers floating
rate obligations to be liquid investments because a number of United States and
non-United States securities dealers make active markets in these securities.
INVESTMENT RESTRICTIONS
The Series has adopted certain investment restrictions for each fund which are
fundamental policies and cannot be changed without approval by a majority of
its outstanding shares. Such majority is defined by the 1940 Act as the vote
of the lesser of (i) 67 % or more of the outstanding shares present at a
meeting, if the holders of more than 50% of the outstanding voting securities
are present in person or by proxy, or (ii) more than 50% of the outstanding
voting securities. All percentage limitations expressed in the following
investment restrictions are measured immediately after the relevant transaction
is made.
INVESTMENT RESTRICTIONS OF THE ASSET ALLOCATION FUND, GROWTH FUND,
GROWTH-INCOME FUND, HIGH-YIELD BOND FUND AND INTERNATIONAL FUND
The Asset Allocation Fund, Growth Fund, Growth-Income Fund, High-Yield Bond
Fund and International Fund may not:
1. Invest more than 5% of the value of the total assets of the fund in the
securities of any one issuer, provided that this limitation shall apply only to
75% of the value of the fund's total assets and, provided further, that the
limitation shall not apply to obligations of the government of the U.S. under a
general Act of Congress. The short-term obligations of commercial banks are
excluded from this 5% limitation with respect to 25% of the fund's total
assets.
2. As to 75% of its total assets, purchase more than 10% of the outstanding
voting securities of an issuer.
3. Invest more than 25% of the fund's total assets in the securities of
issuers in the same industry. Obligations of the U.S. Government, its agencies
and instrumentalities, are not subject to this 25% limitation on industry
concentration. In addition, the fund may, if deemed advisable, invest more
than 25% of its assets in the obligations of domestic commercial banks.
4. Enter into any repurchase agreement maturing in more than seven days or
invest in any other illiquid security if, as a result, more than 10% of the
fund's total assets would be so invested.
5. Invest in real estate (including limited partnership interests, but
excluding securities of companies, such as real estate investment trusts, which
deal in real estate or interests therein).
6. Purchase commodities or commodity contracts; except that the Asset
Allocation Fund, High-Yield Bond Fund and International Fund may engage in
transactions involving currencies (including forward or futures contracts and
put and call options).
7. Invest in companies for the purpose of exercising control or management.
8. Make loans to others except for (a) the purchase of debt securities; (b)
entering into repurchase agreements; (c) the loaning of its portfolio
securities; and (d) entering into loan participations.
9. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of 5% of the value of the fund's total assets. Moreover,
in the event that the asset coverage for such borrowings falls below 300%, the
fund will reduce, within three days, the amount of its borrowings in order to
provide for 300% asset coverage.
10. Purchase securities on margin.
11. Pledge or hypothecate the fund's assets.
12. Sell securities short, except to the extent that the fund
contemporaneously owns, or has the right to acquire at no additional cost,
securities identical to those sold short.
13. Invest in puts, calls, straddles, spreads or any combination thereof;
except as described above in Investment Restriction number 6.
14. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization).
15. Engage in underwriting of securities issued by others, except to the
extent it may be deemed to be acting as an underwriter in the purchase or
resale of portfolio securities.
Notwithstanding investment restriction number 14, the fund may invest in
securities of other managed investment companies if deemed advisable by its
officers in connection with the administration of a deferred compensation plan
adopted by Trustees and to the extent such investments are allowed by an
exemptive order granted by the Securities and Exchange Commission.
The High-Yield Bond Fund and International Fund may invest not in excess of
10% of the market value of its total assets in securities which are restricted
as to resale. The Asset Allocation Fund, Growth Fund and Growth-Income Fund
may each invest no more than 5% of the market value of its total assets in
securities which are restricted as to resale. As a condition to the
acquisition of the type of securities mentioned herein, the funds will
ordinarily require that the issuer of such securities shall agree to bear the
expenses of registration under the Securities Act of 1933, if and when the
funds desire to sell such securities. The need to effect such registration
could result in a delay in disposing of such securities. Investment
restriction number 6 does not prevent the High-Yield Bond Fund from engaging in
transactions involving foreign currency forward or future contracts, although
the fund has no current intention of doing so. These policies of the Series
are not deemed fundamental policies and therefore may be changed without
shareholder approval.
To the extent a fund invests in non-U.S. securities, the Series has undertaken
to the California Department of Insurance (which regulates certain contracts
that use the Series as an underlying investment) to adhere to the following
guidelines with respect to such investments:
1. The fund will have no more than 20% of its net asset value invested in
securities of issuers located in any one country. An additional 15% of the
fund's assets may be invested in securities of issuers located in any one of
the following countries: Australia, Canada, France, Japan, the United Kingdom
or the former West Germany.
2. The fund will be invested in a minimum of five different non-U.S. countries
at all times. However, this minimum is reduced to four countries when non-U.S.
investments comprise less than 80% of the fund's net asset value; to three
countries when less than 60%; to two countries when less than 40% and to one
country when less than 20%.
INVESTMENT RESTRICTIONS OF THE U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
The U.S. Government/AAA-Rated Securities Fund may not:
1. Purchase any security (other than securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities ("U.S. Government
securities")) if, immediately after and as a result of such investment, more
than 5% of the value of the fund's total assets would be invested in securities
of the issuer.
2. Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to U.S. Government securities or
other securities to the extent they are backed by or represent interests in
U.S. Government securities or U.S. Government-guaranteed mortgages.
3. Invest in companies for the purpose of exercising control or management.
4. Knowingly purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition, or reorganization.
5. Buy or sell real estate or commodities or commodity contracts in the
ordinary course of its business; however, the fund may purchase or sell readily
marketable debt securities secured by real estate or interests therein or
issued by companies which invest in real estate or interests therein, including
real estate investment trusts.
6. Acquire securities subject to restrictions on disposition imposed by the
Securities Act of 1933, if, immediately after and as a result of such
acquisition, the value of such restricted securities and all other illiquid
securities held by the fund would exceed 10% of the value of the fund's total
assets.
7. Engage in the business of underwriting securities of other issuers, except
to the extent that the disposal of an investment position may technically cause
it to be considered an underwriter as that term is defined under the Securities
Act of 1933.
8. Make loans, except that the fund may: (a) purchase readily marketable debt
securities; (b) invest in repurchase agreements; (c) make loans of portfolio
securities; and (d) enter into loan participations. The fund will not invest
in repurchase agreements maturing in more than seven days if any such
investment, together with any illiquid securities (including securities which
are subject to legal or contractual restrictions on resale) held by the fund,
exceeds 10% of the value of its total assets.
9. Sell securities short, except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost securities identical to
those sold short.
10. Purchase securities on margin, except that the fund may obtain such
short-term credits as may be necessary for the clearance of purchases and sales
of securities.
11. Borrow money, except from banks for temporary or emergency purposes not in
excess of 5% of the value of the fund's total assets, except that the fund may
enter into reverse repurchase agreements.
12. Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the sale of securities pursuant to a reverse
repurchase agreement.
13. Write, purchase or sell puts, calls or combinations thereof.
Notwithstanding investment restriction number 4, the fund may invest in
securities of other managed investment companies if deemed advisable by its
officers in connection with the administration of a deferred compensation plan
adopted by Trustees and to the extent such investments are allowed by an
exemptive order granted by the Securities and Exchange Commission.
INVESTMENT RESTRICTIONS OF THE CASH MANAGEMENT FUND
The Cash Management Fund may not:
1. Invest more than 5% of the value of the total assets of the fund in the
securities of any one issuer, provided that this limitation shall apply only to
75% of the value of the fund's total assets and, provided further, that the
limitation shall not apply to obligations of the government of the U.S. under a
general Act of Congress. The short-term obligations of commercial banks are
excluded from this 5% limitation with respect to 25% of fund's total assets.
2. As to 75% of its total assets, purchase more than 10% of the outstanding
voting class of securities of an issuer.
3. Invest more than 25% of the fund's total assets in the securities of
issuers in the same industry. Obligations of the U.S. Government, its agencies
and instrumentalities, are not subject to this 25% limitation on industry
concentration. In addition, the fund may, if deemed advisable, invest more
than 25% of its assets in the obligations of domestic commercial banks.
4. Enter into any repurchase agreement maturing in more than seven days or
invest in any other illiquid security if, as a result, more than 10% of the
fund's total assets would be so invested.
5. Make loans to others except for the purchase of the debt securities listed
above. The fund may enter into repurchase agreements as described above.
6. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of 5% of the value of the fund's total assets. Moreover,
in the event that the asset coverage for such borrowings falls below 300%, the
fund will reduce within three days the amount of its borrowings in order to
provide for 300% asset coverage.
7. Pledge or hypothecate the fund's assets.
8. Sell securities short except to the extent that the fund contemporaneously
owns or has the right to acquire at no additional cost, securities identical to
those sold short.
9. Invest in puts, calls, straddles, spreads or any combination thereof.
10. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization), real
estate or commodities.
11. Act as underwriter of securities issued by others, engage in distribution
of securities for others, or make investments in other companies for the
purpose of exercising control or management.
Notwithstanding investment restriction number 10, the fund may invest in
securities of other investment companies if deemed advisable by its officers in
connection with the administration of a deferred compensation plan adopted by
Trustees pursuant to an exemptive order granted by the Securities and Exchange
Commission.
Notwithstanding investment restriction number 1 above, in order to comply with
Rule 2a-7 under the 1940 Act, the Cash Management Fund has adopted a
non-fundamental policy (that may be changed by the Board of Trustees without
shareholder approval) of investing no more than 5% of its assets (measured at
the time of purchase) in the securities of any one issuer (other than the U.S.
Government); provided however, that the Cash Management Fund may invest, as to
25% of its assets, more than 5% of its assets in certain high-quality
securities (as defined in the Rule) of a single issuer for a period of up to
three business days. Investment restriction number 9 above does not prevent
the purchase by the Cash Management Fund of securities that have "put" or
"stand-by" commitment features.
* * * * * *
To the extent that any fund is used with a variable life insurance contract
sold in the state of California, it will limit its borrowing activities to (1)
10% of net asset value when borrowing for any general purpose and (2) 25% of
net asset value when borrowing as a temporary measure to facilitate
redemptions. For this purpose, reverse repurchase agreements shall constitute
borrowing. This policy is not deemed a fundamental policy and therefore may be
changed without shareholder approval.
SERIES OFFICERS AND TRUSTEES
Trustees and Trustee Compensation
(with their principal occupations during the past five years)#
<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH PRINCIPAL OCCUPATION(S) AGGREGATE COMPENSATION TOTAL COMPENSATION TOTAL
REGISTRANT DURING PAST 5 YEARS# (INCLUDING FROM ALL FUNDS NUMBER OF
VOLUNTARILY DEFERRED MANAGED BY CAPITAL FUND BOARDS
COMPENSATION/1/) FROM RESEARCH AND ON WHICH
SERIES DURING FISCAL MANAGEMENT TRUSTEE
YEAR ENDED 11/30/94 COMPANY/2/ SERVES/2/
<S> <C> <C> <C> <C> <C>
Charles H. Black Trustee Private investor and consultant; $21,900 $102,300 4
525 Alma Real Drive Former Executive Vice President
Pacific Palisades, CA and Director, Kaiser Steel
90272 Corporation
Age: 68
+ H. Frederick Christie Trustee Private Investor; Former President $15,700 $135,583 18
P. O. Box 144 and Chief Executive Officer, The
Palos Verdes, CA 90274 Mission Group (non-utility holding
Age: 61 Company, subsidiary of Southern
California Edison Company)
Joe E. Davis Trustee Private Investor. Former Chairman, $23,100 $23,100 1
3436 Caribeth Drive Linear Corporation; former
Encino, CA 91436 President and Chief Executive
Age: 60 Officer, National Health
Enterprises, Inc.
Martin Fenton, Jr. Trustee Chairman, Senior Resource Group none $93,050 15
4350 Executive Drive (management of senior living
Suite 101 centers)
San Diego, CA 92123
Age: 59
++ Richard H. M. Holmes Trustee Retired. Former Vice President, $19,500 $19,500 4
580 Laurent Road Capital Research and Management
Hillsborough, CA 94010 Company
Age: 69
Mary Myers Kauppila Trustee Founder and President, Energy $15,700/3/ $67,200 4
286 Congress Street Investment, Inc.
Boston, MA 02110
Age: 40
@* James F. Rothenberg President and President and Director, Capital none/4/ none/4/ 1
Age: 48 Trustee Research and Management
Company
@* Thomas E. Terry Chairman of Retired. Former Vice President and none/4/ none/4/ 3
Age: 57 the Board Secretary, Capital Research and
Management Company
Leonard Weil Trustee Consultant, President Emeritus, $23,100 $23,100 1
515 South Figueroa Street Manufacturers Bank. Former
Los Angeles, CA 90071 President, Manufacturers Bank
Age: 72
</TABLE>
# Positions within the organizations listed may have changed during this
period.
+ May be deemed an "interested person" of the Series due to membership on the
board of directors of the parent company of a registered broker-dealer.
++ Not considered an "interested person" within the meaning of the Investment
Company Act of 1940, as amended (the "1940 Act"), but he does not participate
on the Contracts or Nominating Committees due to his former affiliation with
the Investment Adviser.
@ Trustees who are considered "interested persons as defined in the 1940 Act,
on the basis of their affiliation with the Series' Investment Adviser, Capital
Research and Management Company.
* Address is 333 South Hope Street, Los Angeles, CA 90071//
/1/ Amounts may be deferred by eligible trustees under a non-qualified deferred
compensation plan adopted by the Series in 1993. Deferred amounts accumulate
at an earnings rate determined by the total return of one or more funds in The
American Funds Group as designated by the Trustee.
/2/ Capital Research and Management Company manages The American Funds Group
consisting of 28 funds: AMCAP Fund, Inc., American Balanced Fund, Inc.,
American High-Income Municipal Bond Fund, Inc., American High-Income Trust,
American Mutual Fund, Inc., The Bond Fund of America, Inc., The Cash Management
Trust of America, Capital Income Builder, Inc., Capital World Growth and Income
Fund, Inc., Capital World Bond Fund, Inc., EuroPacific Growth Fund, Fundamental
Investors, Inc., The Growth Fund of America, Inc., The Income Fund of America,
Inc., Intermediate Bond Fund of America, The Investment Company of America,
Limited Term Tax-Exempt Bond Fund of America, The New Economy Fund, New
Perspective Fund, Inc., SMALLCAP World Fund, Inc., The Tax-Exempt Bond Fund of
America, Inc., The Tax-Exempt Fund of California, The Tax-Exempt Fund of
Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt Money Fund of
America, The U. S. Treasury Money Fund of America, U.S. Government Securities
Fund and Washington Mutual Investors Fund, Inc. Capital Research and
Management Company also manages Anchor Pathway Fund which serves as the
underlying investment vehicle for certain variable insurance contracts; and
Bond Portfolio for Endowments, Inc. and Endowments, Inc. whose shares may be
owned only by tax-exempt organizations. These amounts reflect the aggregate
compensation paid during the most recent fiscal year of the funds involved.
/3/ Since the plan's adoption, the total amount of deferred compensation
accrued by the series (plus earnings thereon) for participating Trustees is as
follows: Mary Myers Kauppila ($16,089). Amounts deferred and accumulated
earnings thereon are not funded and are general unsecured liabilities of the
series until paid to the Trustee.
/4/ James F. Rothenberg and Thomas E. Terry are affiliated with the Investment
Adviser and, accordingly, receive no remuneration from the series.
OFFICERS
(with their principal occupations during the past five years)#
THOMAS E. TERRY, CHAIRMAN OF THE BOARD (see above).
JAMES F. ROTHENBERG, PRESIDENT (see above).
* JAMES K. DUNTON, SENIOR VICE PRESIDENT
Senior Vice President and Director - Capital Research and Management Company.
* ABNER D. GOLDSTINE, SENIOR VICE PRESIDENT
Senior Vice President and Director - Capital Research and Management Company.
* MICHAEL J. DOWNER, VICE PRESIDENT.
Assistant General Counsel - Legal Division, The Capital Group Companies, Inc.;
Secretary, Capital Research and Managment Company; Secretary, American Funds
Distributors, Inc.
* CLAUDIA P. HUNTINGTON, VICE PRESIDENT.
Senior Vice President, Capital Research Company.
** STEVEN N. KEARSLEY, VICE PRESIDENT AND TREASURER.
Vice President and Treasurer, Capital Research and Management Company.
* DINA N. PERRY, VICE PRESIDENT.
Vice President, Capital Research and Management Company.
JOHN H. SMET, VICE PRESIDENT. 11100 Santa Monica Boulevard, Los Angeles, CA
90025.
Vice President, Capital Research and Management Company.
* CHAD L. NORTON, SECRETARY.
Vice President - Fund Business Management Group, Capital Research and
Management Company.
* DAVID E. CARTER, ASSISTANT SECRETARY.
Associate, Capital Research and Management Company.
** MARY C. CREMIN, ASSISTANT TREASURER.
Senior Vice President - Fund Business Management Group, Capital Research and
Management Company.
** ROBERT P. SIMMER, ASSISTANT TREASURER.
Vice President - Fund Business Management Group, Capital Research and
Management Company.
__________________________________
# The principal occupation shown reflects the principal employment of each
individual during the past five years. Corporate positions may, in some
instances, have changed during this period.
* Address is 333 South Hope Street, Los Angeles, CA 90071.
** Address is 135 South State College Boulevard, Brea, CA 92621.
All of the Officers listed above are officers of the Investment Adviser or its
affiliated companies. No compensation is paid by the Series to any Officer or
Trustee who is a director or officer of the Investment Adviser or its
affiliated companies. The compensation paid by the Series to each unaffiliated
Trustee is $15,000 per annum, plus $1,200 for each Board of Trustees meeting
attended, plus $600 for each meeting attended as a member of a committee of the
Board of Trustees. No pension or retirement benefits are accrued as part of
fund expenses. The Trustees may elect, on a voluntary basis, to defer all or a
portion of their fees through a deferred compensation plan in effect for the
Series. The Series also reimburses certain expenses of the Trustees who are
not affiliated with the Investment Adviser.
MANAGEMENT
INVESTMENT ADVISER - The Investment Adviser, founded in 1931, maintains
research facilities in the U.S. and abroad, with a staff of professionals, many
of whom have a number of years of investment experience. The Investment
Adviser's research professionals travel several million miles a year, making
more than 5,000 research visits in more than 50 countries around the world.
The Investment Adviser believes that it is able to attract and retain quality
personnel.
An affiliate of the Investment Adviser compiles indices for major stock
markets around the world and compiles and edits the Morgan Stanley Capital
International Perspective, providing financial and market information about
more than 2,400 companies around the world.
The Investment Adviser and its affiliated companies are responsible for
approximately $100 billion of stocks, bonds and money market instruments and
serve over five million investors of all types throughout the world. These
investors include privately owned businesses and large corporations as well as
schools, colleges, foundations and other non-profit and tax-exempt
organizations.
INVESTMENT ADVISORY AND SERVICE AGREEMENT - The Investment Advisory and Service
Agreement (the "Agreement") between the Series and the Investment Adviser,
unless sooner terminated, will continue in effect until November 30, 1995, and
may be renewed from year to year thereafter, provided that any such renewal has
been specifically approved at least annually by (i) the Board of Trustees, or
by the vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Series, and (ii) the vote of a majority of Trustees
who are not parties to the Agreement or interested persons (as defined in the
1940 Act) of any such party, cast in person at a meeting called for the purpose
of voting on such approval. The Agreement provides that the Investment Adviser
has no liability to the Series for its acts or omissions in the performance of
its obligations to the Series not involving willful misconduct, bad faith,
gross negligence or reckless disregard of its obligations under the Agreement.
The Agreement also provides that either party has the right to terminate it,
without penalty, upon 60 days' written notice to the other party and that the
Agreement automatically terminates in the event of its assignment (as defined
in the 1940 Act).
The Investment Adviser is waiving (effective December 1, 1994) any fees
received from the International Fund under the current Agreement that would
exceed the fees payable under an amended Agreement, containing additional fee
breakpoints, to be presented to the Board of Trustees in June 1995.
The Investment Adviser, in addition to providing investment advisory services,
furnishes the services and pays the compensation and travel expenses of
qualified persons to perform the executive, and related administrative
functions of the Series, provides necessary office space, office equipment and
utilities, and general purpose accounting forms, supplies, and postage used at
the office of the Series relating to the services furnished by the Investment
Adviser. Subject to the expense agreement described below, the Series will pay
all expenses not expressly assumed by the Investment Adviser, including, but
not limited to, registration and filing fees with federal and state agencies;
blue sky expenses (if any); expenses of shareholders' meetings; the expense of
reports to existing shareholders; expenses of printing proxies and
prospectuses; insurance premiums; legal and auditing fees; dividend
disbursement expenses; the expense of the issuance, transfer, and redemption of
its shares; custodian fees; printing and preparation of registration
statements; taxes; compensation, fees and expenses paid to Trustees
unaffiliated with the Investment Adviser; association dues; and costs of
stationery and forms prepared exclusively for the Series.
The Agreement provides for an advisory fee reduction to the extent that each
fund's annual ordinary net operating expenses, except the International Fund's,
exceed 1 1/2% of the first $30 million of the average month-end total net
assets of the fund and 1% of the average month-end total net assets in excess
thereof. For the International Fund, the advisory fee will be reduced to the
extent that its annual ordinary net operating expenses exceed 1 1/2% of its
average month-end total net assets. Expenditures, including costs incurred in
connection with the purchase or sale of portfolio securities, which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, are accounted for as capital items and not
as expenses.
During the fiscal years ended November 30, 1994, 1993 and 1992, the Investment
Adviser's total fees, respectively, amounted to the following: Growth Fund
$8,735,000, $7,048,000 and $4,746,000; International Fund $8,330,000,
$4,318,000 and $2,321,000; Growth-Income Fund $11,517,000, $9,526,000 and
$6,586,000; Asset Allocation Fund $3,129,000, $2,390,000 and $1,411,000;
High-Yield Bond Fund $2,022,000, $1,454,000 and $791,000; U. S.
Government/AAA-Rated Securities Fund $2,459,000, $2,238,000 and $1,532,000;
and Cash Management Fund $905,000, $750,000 and $826,000.
The Investment Adviser also serves as investment adviser to the following
registered investment companies: AMCAP Fund, Inc., American Balanced Fund,
Inc., American High-Income Municipal Bond Fund, Inc., American High-Income
Trust, American Mutual Fund, Inc., Anchor Pathway Fund, The Bond Fund of
America, Inc., Bond Portfolio for Endowments Inc., Capital Income Builder,
Inc., Capital World Bond Fund, Inc., Capital World Growth and Income Fund,
Inc., The Cash Management Trust of America, Endowments, Inc., EuroPacific
Growth Fund, Fundamental Investors, Inc., The Growth Fund of America, Inc., The
Income Fund of America, Inc., Intermediate Bond Fund of America, The Investment
Company of America, Limited Term Tax-Exempt Bond Fund of America, The New
Economy Fund, New Perspective Fund, Inc., SMALLCAP World Fund, Inc., The
Tax-Exempt Bond Fund of America, Inc., The Tax-Exempt Fund of California, The
Tax-Exempt Fund of Maryland, The Tax-Exempt Fund of Virginia, The Tax-Exempt
Money Fund of America, U.S. Government Securities Fund, The U.S. Treasury Money
Fund of America and Washington Mutual Investors Fund, Inc.
PRICE OF SHARES
The price paid for shares, the net asset value price, is calculated for each
of the funds once daily at the close of trading (currently 4:00 p.m., New York
Time) each day the New York Stock Exchange is open as set forth below. The New
York Stock Exchange is currently closed on weekends and on the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas Day. The net asset
value per share is determined as follows:
1. Stocks and convertible bonds and debentures traded on securities exchanges
or the over-the-counter market are valued at the last reported sale price on
the day of valuation or, lacking any sales on that day, at the last reported
bid price.
2. Non-convertible bonds and debentures and other long-term debt securities
and Treasury notes normally are valued at prices obtained from a bond pricing
service when such prices are available on the day of valuation; however, in
circumstances where the Investment Adviser deems it appropriate to do so, such
securities will be valued at the mean of representative quoted bid and asked
prices or, if such prices are not available, at prices for securities of
comparable maturity, quality and type. Securities traded on exchanges outside
the United States are valued at the last sale price on the day of valuation or,
lacking any sales on that day, at the last reported bid price. Short-term
securities other than Treasury notes with original or remaining maturities in
excess of 60 days are valued at the mean of representative quoted bid and asked
prices or, if such prices are not available, at such prices for securities of
comparable maturity, quality and type. Short-term securities with 60 days or
less to maturity are valued at amortized cost, which approximates market value.
Options on currencies purchased by the fund are valued at the last sale price
in the case of listed options or at the average of the last bid prices obtained
from dealers in the case of OTC options. Futures contracts involving foreign
currencies traded on exchanges are valued at their last sale or settlement
price as of the close of such exchanges or, lacking any sales, at the mean
between the last reported bid and asked prices. Other securities are valued on
the basis of last sale or bid prices in what is, in the opinion of the
Investment Adviser, the broadest and most representative market, which may be
either a securities exchange or the over-the-counter market.
3. Where quotations are not readily available, securities are valued at fair
value as determined in good faith by the Board of Trustees. The fair value of
all other assets is added to the value of securities to arrive at the
respective fund's total assets;
4. The value of any security denominated in a currency other than U.S. dollars
will be translated into U.S. dollars at the prevailing market rate as
determined by the Series' officers;
5. There are deducted from the total assets, thus determined, the liabilities
of the respective funds including proper accruals of expense items; and
6. The net assets of the respective fund so obtained is then divided by the
total number of shares outstanding (excluding treasury shares), and the result,
rounded to the nearer cent, is the fund's net asset value per share.
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAXES
Each fund of the Series intends to qualify to be taxed as a "regulated
investment company" under the provisions of Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). To qualify for the tax
treatment afforded a regulated investment company under the Code, a fund must
annually distribute at least 90% of its net investment income and certain
short-term capital gains and meet certain diversification of assets and other
requirements of the Code. If a fund qualifies for such tax treatment, it will
not be subject to Federal income tax on the part of its ordinary income and its
net realized capital gains which it distributes to shareholders. To meet the
requirements of the Code, a fund must (a) derive at least 90% of its gross
income from dividends, interest, payments with respect to securities loans, and
gains from the sale or other disposition of stock or securities or currencies;
(b) derive less than 30% of its gross income from the sale or other disposition
of securities held less than three months; and (c) diversify its holdings so
that, at the end of each fiscal quarter, (i) at least 50% of the market value
of the fund's assets is represented by cash, U.S. Government securities and
other securities, limited, in respect of any one issuer, to an amount not
greater than 5% of the fund's assets and 10% of the outstanding voting
securities of such issuer, and (ii) not more than 25% of the value of its
assets is invested in the securities of any one issuer (other than U.S.
Government securities or the securities of other regulated investment
companies), or in two or more issuers which each fund controls and which are
engaged in the same or similar trades or businesses. It is the Series' policy
to distribute to the shareholders (the insurance company separate accounts) all
of its net investment income and capital gains realized during each fiscal
year.
Under the Code, the Asset Allocation Fund's and the International Fund's
taxable income for each year will be computed without regard to any net foreign
currency loss attributable to transactions after October 31, and any such net
foreign currency loss will be treated as arising on the first day of the
following taxable year.
The amount of any realized gain or loss of the Asset Allocation Fund and the
International Fund on closing out a currency contract will generally result in
a realized capital gain or loss for tax purposes. Under Code Section 1256,
currency contracts held by each fund at the end of each fiscal year will be
required to be "marked to market" for federal income tax purposes, that is,
deemed to have been sold at market value. Sixty percent (60%) of any net gain
or loss recognized on these deemed sales and sixty percent (60%) of any net
realized gain or loss from any actual sales, will be treated as long-term
capital gain or loss, and the remainder will be treated as short-term capital
gain or loss. Code Section 988 may also apply to currency contracts. Under
Section 988, each foreign currency gain or loss is generally computed
separately and treated as ordinary income or loss. In the case of overlap
between Sections 1256 and 988, special provisions determine the character and
timing of any income, gain or loss. Each fund will attempt to monitor Section
988 transactions to avoid an adverse tax impact.
Each fund, except for Cash Management Fund, may be required to pay withholding
and other taxes imposed by foreign countries which would reduce investment
income. Tax conventions between certain countries and the United States may
reduce or eliminate such taxes.
In addition to the asset diversification and other requirements for
qualification as a regulated investment company, the funds are subject to
another set of asset diversification requirements applicable to insurance
company separate accounts and their underlying funding vehicles. To satisfy
these diversification requirements, as of the end of each calendar quarter or
within 30 days thereafter, no more than 55% of the total assets of a fund may
be represented by any one investment, no more than 70% by any two investments,
no more than 80% by any three investments, and no more than 90% by any four
investments. For this purpose all securities of the same issuer are considered
a single investment, and each agency or instrumentality of the U.S. government
is treated as a separate issue of securities. The Series intends to comply
with these regulations. If a fund should fail to comply with these
regulations, Contracts invested in that fund shall not be treated as annuity,
endowment or life insurance contracts under the Code.
See the applicable Contract prospectus for information regarding the Federal
income tax treatment of the Contracts and distributions to the separate
accounts.
EXECUTION OF PORTFOLIO TRANSACTIONS
There are occasions on which portfolio transactions for the Series may be
executed as part of concurrent authorizations to purchase or sell the same
security for other funds served by the Investment Adviser, or for trusts or
other accounts served by affiliated companies of the Investment Adviser.
Although such concurrent authorizations potentially could be either
advantageous or disadvantageous to the Series, they are effected only when the
Investment Adviser believes that to do so is in the interest of the Series.
When such concurrent authorizations occur, the objective is to allocate the
executions in an equitable manner. The Series will not pay a mark-up for
research in principal transactions.
Brokerage commissions paid on portfolio transactions, including dealer
concessions on underwritings for the fiscal years ended November 30, 1994, 1993
and 1992, respectively, amounted to the following: Growth Fund $2,230,000,
$1,927,000, and $1,484,000; International Fund $2,251,000, $1,078,000, and
$558,000; Growth-Income Fund $2,590,000, $2,218,000, and $1,733,000; Asset
Allocation Fund $628,000, $586,000, and $199,000; High-Yield Bond Fund
$2,760,000, $2,123,000, and $748,000. No brokerage commissions were paid by
the U.S. Government/AAA-Rated Securities Fund during those periods. Because
all portfolio transactions for the Cash Management Fund were on a "net price"
basis and involved short-term money market instrumets only, that fund did not
pay any brokerage commissions during those periods.
GENERAL INFORMATION
CUSTODIAN OF ASSETS -- Securities and cash owned by the Series', including
proceeds from the sale of shares of the Series and of securities in the Series
portfolio, are held by State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, as Custodian. Non-U.S. securities may be
held by the Custodian in non-U.S. banks or securities depositories or foreign
branches of U.S. banks.
INDEPENDENT ACCOUNTANTS -- Price Waterhouse LLP, 400 South Hope Street, Los
Angeles, CA 90071, has served as the Series' independent accountants since
March 18, 1991, providing audit services, preparation of tax returns and review
of certain documents to be filed with the Securities and Exchange Commission.
The financial statements, included in this Statement of Additional Information,
have been so included in reliance on the report of Price Waterhouse LLP given
on the authority of said firm as experts in auditing and accounting. Prior to
March 18, 1991, KPMG Peat Marwick, 725 South Figueroa Street, Los Angeles, CA
90017, served as the Series' independent public accountants. The selection of
the Series' independent accountant is reviewed and determined annually by the
Board of Trustees.
REPORTS TO SHAREHOLDERS -- The Series' fiscal year ends November 30. Contract
owners are provided at least semi-annually with reports showing the investment
portfolio, financial statements and other information. The financial
statements included in the Annual Report are audited by the independent
accounting firm of Price Waterhouse LLP.
PERSONAL INVESTING POLICY - Capital Research and Management Company and its
affiliated companies have adopted a personal investing policy consistent with
Investment Company Institute guidelines. This policy includes: a ban on
acquisitions of securities pursuant to an initial public offering; restrictions
on acquisitions of private placement securities; pre-clearance and reporting
requirements; review of duplicate confirmation statements; annual
recertification of compliance with codes of ethics; disclosure of personal
holdings by certain investment personnel prior to recommendation for purchase
for the fund; blackout periods on personal investing for certain investment
personnel; ban on short-term trading profits for investment personnel;
limitations on service as a director of publicly traded companies; and
disclosure of personal securities transactions.
SHAREHOLDER AND TRUSTEE RESPONSIBILITY -- Under the laws of certain states,
including Massachusetts, where the Series was organized, and California, where
the Series' principal office is located, shareholders of a Massachusetts
business trust may, under certain circumstances, be held personally liable as
partners for the obligations of the Series. However, the risk of a shareholder
incurring any financial loss on account of shareholder liability is limited to
circumstances in which the Series itself would be unable to meet its
obligations. The Declaration of Trust contains an express disclaimer of
shareholder liability for acts or obligations of the Series and provides that
notice of the disclaimer may be given in each agreement, obligation, or
instrument which is entered into or executed by the Series or trustees. The
Declaration of Trust provides for indemnification out of Series property of any
shareholder personally liable for the obligations of the Series and also
provides for the Series to reimburse such shareholder for all legal and other
expenses reasonably incurred in connection with any such claim or liability.
Under the Declaration of Trust, the Trustees or officers are not liable for
actions or failure to act; however, they are not protected from liability by
reason of their willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office. The Series
will provide indemnification to its Trustees and officers as authorized by its
By-Laws and by the 1940 Act and the rules and regulations thereunder.
REGISTRATION STATEMENT -- A registration statement has been filed with the
Securities and Exchange Commission under the Securities Act of 1933 and the
1940 Act, with respect to the Series. The Prospectus and this Statement of
Additional Information do not contain all information set forth in the
registration statement, its amendments and exhibits, to which reference is made
for further information concerning the Series. Statements contained in the
Prospectus and this Statement of Additional Information as to the content of
the Contracts issued through the separate accounts and other legal instruments
are summaries. For a complete statement of the terms thereof, reference is
made to the registration statements of the separate accounts and Contracts as
filed with the Securities and Exchange Commission.
AUTHORIZED SHARES -- The Series was organized as a Massachusetts Business Trust
which permits each fund of the Series to issue an unlimited number of shares of
beneficial interest of a single class.
APPENDIX
DESCRIPTION OF COMMERCIAL PAPER RATINGS
Moody's Investors Service, Inc. top two rating designations for commercial
paper are described as follows: issuers rated Prime-1 have a superior capacity
for repayment of short-term promissory obligations. Prime-1 repayment capacity
will normally be evidenced by the following characteristics: leading market
positions in well-established industries; high rates of return on funds
employed; conservative capitalization structures with moderate reliance on debt
and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established
access to a range of financial markets and assured sources of alternate
liquidity. Issues rated Prime-2 have a strong capacity for repayment of
short-term promissory obligations. This will normally be evidenced by many of
the characteristics cited above, but to a lesser degree. Earnings trends and
coverage ratios, while sound, will be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected
by external conditions. Ample alternate liquidity is maintained.
Standard & Poor's Corporation's top two rating categories for commercial
paper are described as follows: A -- Issues assigned its highest rating are
regarded as having the greatest capacity for timely payment. Issues in this
category are delineated with numbers 1 or 2 to indicate the relative degree of
safety. A-1 -- This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined
to possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation. A-2 -- Capacity for timely payments on issues with this
designation is strong. However, the relative degree of safety is not as high
as for issues designated "A-1".
INVESTMENTS PRIMARILY IN STOCKS
Growth Fund
Investment Portfolio, November 30, 1994
STOCKS 88.01%
CASH 11.99%
<TABLE>
<CAPTION>
LARGEST Percent of
INDIVIDUAL EQUITY HOLDINGS Net Assets
Tele-Communications 3.25%
<S> <C>
Intel 2.81
Walt Disney 2.33
Microsoft 2.17
Silicon Graphics 2.08
Compaq Computer 1.86
Texas Instruments 1.77
Capital Cities/ABC 1.65
Adobe Systems 1.55
Time Warner 1.51
</TABLE>
- --------------
<TABLE>
<CAPTION>
Market Percent
Number of Value Of
STOCKS (COMMON AND PREFERRED) Shares (000) Net Assets
DATA PROCESSING & REPRODUCTION- 10.74%
<S> <C> <C> <C>
Microsoft Corp./1/ 700,000 $43,925 2.17%
Silicon Graphics, Inc./1/ 1,370,000 42,127 2.08
Compaq Computer Corp./1/ 962,500 37,658 1.86
Adobe Systems Inc. 950,000 31,350 1.55
Lotus Development Corp./1/ 375,000 16,781 0.83
Oracle Systems Corp./1/ 355,000 14,644 0.72
International Business Machines Corp. 190,000 13,443 0.66
Mentor Graphics Corp./1/ 1,000,000 13,250 0.65
Sequent Computer Systems, Inc./1/ 570,000 10,616 0.52
Apple Computer, Inc. 235,000 8,695 0.43
Electronic Arts/1/ 425,000 8,447 0.42
Tandem Computers Inc./1/ 440,000 7,480 0.37
Legent Corp./1/ 140,000 4,480 0.22
Chipcom Corp./1/ 90,000 3,690 0.18
Structural Dynamics Research Corp./1/ 475,000 2,731 0.14
Amdahl Corp./1/ 127,100 1,239 0.06
Data General Corp./1/ 100,000 1,075 0.05
Tripos, Inc./1/ 19,333 85 0
BROADCASTING & PUBLISHING- 12.20%
Tele-Communications, Inc., Class A/1/ 2,789,950 65,913 3.25
Capital Cities/ABC, Inc. 410,000 33,517 1.65
Time Warner Inc. 908,000 30,645 1.51
News Corp. Ltd. (American Depositary Receipts) (Australia) 1,270,000 20,002 1.42
News Corp. Ltd., preferred shares (American Depositary
Receipts)/1/ 635,000 8,811
Turner Broadcasting System, Inc., Class B 1,065,100 16,376 0.81
Gaylord Entertainment Co., Class A 550,000 12,444 0.61
Cablevision Systems Corp., Class A/1/ 240,000 12,150 0.6
New York Times Co., Class A 450,000 10,687 0.53
CBS Inc. 160,445 8,905 0.44
Comcast Corp., Class A, special stock/1/ 500,000 7,812 0.39
United International Holdings, Inc., Class A/1/ 485,000 7,154 0.35
Jones Intercable, Inc., Class A/1/ 370,000 4,995 0.25
Adelphia Communications Corp., Class A/1/ 350,000 3,762 0.19
Infinity Broadcasting Corp., Class A/1/ 112,500 3,319 0.16
BHC Communications, Inc., Class A/1/ 11,189 820 0.04
BUSINESS & PUBLIC SERVICES- 12.04%
United HealthCare Corp. 589,000 27,978 1.38
WMX Technologies, Inc. 1,025,000 26,394 1.3
Columbia Healthcare Corp. 640,000 24,240 1.2
FHP International Corp./1/ 805,100 21,536 1.06
General Motors Corp., Class E 555,000 20,396 1.01
Federal Express Corp./1/ 350,000 19,906 0.98
Bay Networks Inc./1/ 680,125 17,428 0.86
CUC International Inc./1/ 562,600 17,300 0.85
U.S. Healthcare, Inc. 325,000 14,463 0.71
Oxford Health Plans, Inc./1/ 172,200 12,011 0.59
ADT Ltd./1/ 955,000 10,624 0.52
Avery Dennison Corp. 200,000 6,450 0.32
Humana Inc./1/ 250,000 5,594 0.28
Pitney Bowes Inc. 150,000 4,988 0.25
Ceridian Corp./1/ 150,000 3,750 0.18
Value Health, Inc./1/ 100,000 3,687 0.18
Dun & Bradstreet Corp. 50,000 2,644 0.13
BHA Group, Inc., Class A 195,000 2,389 0.12
Air & Water Technologies Corp., Class A/1/ 285,000 1,674 0.08
Safety-Kleen Corp. 50,000 725 0.04
ELECTRONIC COMPONENTS- 11.42%
Intel Corp. 905,200 56,914 2.81
Texas Instruments Inc. 475,000 35,862 1.77
LSI Logic Corp./1/ 710,000 30,353 1.5
National Semiconductor Corp./1/ 1,365,000 25,082 1.24
Analog Devices, Inc./1/ 455,000 15,072 0.74
Newbridge Networks Corp./1/ 400,000 13,450 0.66
Micron Technology, Inc. 312,500 12,969 0.64
SCI Systems, Inc./1/ 646,263 11,875 0.58
Advanced Micro Devices, Inc./1/ 290,000 7,322 0.36
Motorola, Inc. 122,000 6,878 0.34
EMC Corp./1/ 200,000 4,500 0.22
Rogers Corp./1/ 95,400 3,995 0.2
Park Electrochemical Corp. 125,000 3,875 0.19
Xilinx, Inc./1/ 30,000 1,755 0.09
Quantum Corp./1/ 100,000 1,575 0.08
TELECOMMUNICATIONS- 5.82%
Vanguard Cellular Systems, Inc./1/ 1,035,000 27,169 1.34
MCI Communications Corp. 1,010,000 19,695 0.97
LIN Broadcasting Corp./1/ 129,400 18,472 0.91
United States Cellular Corp./1/ 510,000 15,938 0.79
AirTouch Communications/1/ 475,000 12,884 0.63
Cellular Communications, Inc., convertible preferred/1/ 165,000 8,250 0.41
Associated Communications Corp., Class A/1/ 275,000 6,944 0.47
Associated Communications Corp., Class B/1/ 100,000 2,550
Centennial Cellular Corp./1/ 300,000 4,800 0.24
Cellular Communications of Puerto Rico, Inc./1/ 37,500 1,237 0.06
LEISURE & TOURISM- 5.23%
Walt Disney Co. 1,085,000 47,333 2.33
Marriott International, Inc. 500,000 13,125 0.65
Mirage Resorts, Inc./1/ 600,000 11,850 0.59
Promus Companies Inc./1/ 375,000 10,406 0.51
Circus Circus Enterprises, Inc./1/ 475,000 9,975 0.49
Host Marriott Corp./1/ 655,000 6,223 0.31
Luby's Cafeterias, Inc. 250,000 5,500 0.27
International Game Technology 100,000 1,662 0.08
HEALTH & PERSONAL CARE- 4.27%
Cordis Corp./1/ 255,000 15,045 0.74
Tambrands Inc. 300,000 11,588 0.57
Genetics Institute, Inc./1/ 260,000 10,075 0.5
Omnicare, Inc. 200,000 8,325 0.41
Forest Laboratories, Inc./1/ 151,000 7,078 0.35
Genentech, Inc./1/ 150,000 7,050 0.35
AB Astra, Class A (Sweden) 250,000 6,728 0.33
Paragon Trade Brands, Inc./1/ 300,000 5,625 0.28
Acuson Corp./1/ 195,000 3,266 0.16
Johnson & Johnson 48,800 2,605 0.13
Puritan-Bennett Corp. 111,600 2,372 0.12
Alpha-Beta Technology, Inc./1/ 200,000 2,150 0.1
Liposome Technology, Inc./1/ 300,000 1,987 0.1
Biogen, Inc./1/ 50,000 1,938 0.09
Upjohn Co. 25,000 803 0.04
BANKING- 3.92%
BayBanks, Inc. 409,400 21,596 1.07
Mercantile Bancorporation Inc. 517,500 15,719 0.78
Banc One Corp. 530,750 14,264 0.7
Huntington Bancshares Inc. 468,087 8,601 0.42
Commerce Bancshares, Inc. 275,000 7,975 0.39
Northern Trust Corp. 125,000 4,187 0.21
Golden West Financial Corp. 90,000 3,150 0.16
BankAmerica Corp. 50,000 2,050 0.1
Bay View Capital Corp. 100,000 1,900 0.09
INSURANCE- 2.61%
EXEL Ltd. (Bermuda) 355,000 13,312 0.66
Transatlantic Holdings, Inc. 230,000 11,989 0.59
NAC Re Corp. 285,000 7,196 0.36
NYMAGIC, Inc. 368,300 6,031 0.3
TIG Holdings, Inc. 325,000 5,688 0.28
Trenwick Group Inc. 118,400 4,351 0.21
American Re Corp./1/ 165,000 4,269 0.21
MERCHANDISING- 2.54%
Toys "R" Us, Inc./1/ 310,000 11,354 0.56
Spiegel, Inc., Class A 752,600 9,972 0.49
Barnes & Noble, Inc./1/ 350,000 9,581 0.47
Staples, Inc./1/ 416,250 9,053 0.45
ShopKo Stores, Inc. 575,000 5,750 0.29
Goody's Family Clothing, Inc./1/ 415,000 3,424 0.17
TJX Companies, Inc. 150,000 2,269 0.11
Phar-Mor, Inc./1/ 60,000 60 0
TRANSPORTATION: AIRLINES-1.89%
Southwest Airlines Co. 1,166,900 24,651 1.22
AMR Corp./1/ 195,000 9,896 0.49
Delta Air Lines, Inc. 75,000 3,759 0.18
CHEMICALS- 1.69%
Loctite Corp. 250,000 11,312 0.56
Valspar Corp. 350,000 11,113 0.55
Raychem Corp. 305,000 10,561 0.52
McWhorter, Inc./1/ 50,000 856 0.04
Lubrizol Corp. 11,000 346 0.02
RECREATION & OTHER CONSUMER PRODUCTS- 1.41%
Mattel, Inc. 727,625 19,464 0.96
Hasbro, Inc. 185,000 5,458 0.27
Duracell International Inc. 80,000 3,600 0.18
ENERGY EQUIPMENT- 1.03%
Schlumberger Ltd. (Netherlands Antilles) 295,000 15,672 0.77
Western Atlas Inc./1/ 120,000 5,235 0.26
FINANCIAL SERVICES- 0.88%
Federal National Mortgage Assn. 250,000 17,781 0.88
TRANSPORTATION: RAIL & ROAD- 0.74%
Chicago & North Western Holdings Corp./1/ 775,000 15,113 0.74
ENERGY SOURCES- 0.71%
Murphy Oil Corp. 200,000 8,950 0.44
Parker & Parsley Petroleum Co. 240,000 5,550 0.27
ELECTRICAL & ELECTRONICS- 0.67%
Telefonaktiebolaget LM Ericsson, Class B (American Depositary
Receipts) (Sweden) 245,000 13,598 0.67
TEXTILES & APPAREL- 0.59%
Phillips-Van Heusen Corp. 750,000 11,906 0.59
BEVERAGES & TOBACCO- 0.47%
Philip Morris Companies Inc. 160,000 9,560 0.47
APPLIANCES & HOUSEHOLD DURABLES- 0.39%
Mohawk Industries, Inc./1/ 475,000 7,956 0.39
INDUSTRIAL COMPONENTS- 0.28%
Cooper Tire & Rubber Co. 240,000 5,610 0.28
MACHINERY & ENGINEERING- 0.27%
Caterpillar Inc. 100,000 5,400 0.27
FOOD & HOUSEHOLD PRODUCTS- 0.26%
Archer Daniels Midland Co. 192,937 5,330 0.26
ELECTRONIC INSTRUMENTS- 0.24%
Applied Materials, Inc./1/ 104,000 4,940 0.24
AEROSPACE & MILITARY TECHNOLOGY- 0.20%
Litton Industries, Inc./1/ 120,000 4,095 0.2
CONSTRUCTION & HOUSING- 0.15%
Stone & Webster, Inc. 90,000 2,992 0.15
MULTI-INDUSTRY- 0.06%
Textron Inc. 20,000 940 0.05
Tenneco Inc. 7,900 307 0.01
FOREST PRODUCTS & PAPER- 0.03%
ITT Rayonier Inc. 25,000 700 0.03
MISCELLANEOUS
Other stocks in initial period of acquisition 62,581 3.09
TOTAL STOCKS (cost: $1,462,065,000) 1,784,303 88.01
--------- -------
Principal
Amount
SHORT-TERM SECURITIES (000)
CORPORATE SHORT-TERM NOTES- 10.26%
Ford Motor Credit Co. 5.20%-5.93% due 12/6/94-1/19/95 $37,200 36,936 1.82
Texaco Inc. 5.42% due 1/20/95 25,000 24,795 1.22
Beneficial Corp. 5.07%-5.60% due 12/27/94-1/11/95 23,100 22,966 1.13
Commercial Credit Co. 5.15%-5.75% due 12/12/94-1/12/95 20,900 20,787 1.03
J.C. Penney Funding Corp. 5.62% due 1/17/95 20,000 19,847 0.98
AT&T 5.37%-5.43% due 1/5-1/18/95 19,900 19,776 0.98
Eli Lilly & Co. 5.73% due 1/9/95 16,300 16,196 0.8
H.J. Heinz Co. 5.02% due 12/13/94 13,300 13,276 0.66
Ameritech Capital Funding Corp. 5.16% due 12/14/94 11,400 11,377 0.56
Associates Corp. of North America 5.72% due 12/1/94 10,000 9,999 0.49
National Rural Utilities Cooperative Finance Corp. 5.70% due
1/6/95 7,000 6,959 0.34
Union Pacific Corp. 5.02% due 12/7/94 5,000 4,995 0.25
FEDERAL AGENCY DISCOUNT NOTES- 1.96%
Federal National Mortgage Assn. 4.81% due 12/5/94 19,770 19,756 0.97
Tennessee Valley Authority 5.09% due 12/2/94 8,300 8,297 0.41
Federal Farm Credit Bank 4.94% due 12/8/94 7,000 6,992 0.35
Federal Home Loan Mortgage Corp. 5.11% due 12/2/94 4,700 4,699 0.23
----------- --------
TOTAL SHORT-TERM SECURITIES (cost: $247,679,000) 247,653 12.22
-------- -------
TOTAL INVESTMENT SECURITIES (cost: $1,709,744,000) 2,031,956 100.23
Excess of payables over money market account, cash and
receivables 4,615 0.23
-------- --------
NET ASSETS $2,027,341 100.00%
============ ========
</TABLE>
/1/ Non-income-producing securities
/2/ Purchased in a private placement
transaction; resale potential extends
to qualified institutional buyers.
See Notes to Financial Statements
Stocks appearing in the portfolio
since May 31, 1994
- ------------------------------------
AirTouch Communications
Amdahl
Barnes & Noble
Bay Networks
Bay View Capital
Biogen
CBS
Circus Circus Enterprises
Cooper Tire & Rubber
Cordis
EMC
Gaylord Entertainment
Humana
International Game Technology
ITT Rayonier
Micron Technology
Mohawk Industries
Newbridge Networks
Oracle Systems
Promus Companies
Tripos
Xilinx
Stocks eliminated from the
portfolio since May 31, 1994
- -------------------------------
Adaptec
Bancorp Hawaii
C.R. Bard
Betz Laboratories
Century Telephone Enterprises
Contel Cellular
Evans & Sutherland Computer
Informix
ITT
Keystone International
Liberty Media
QVC Network
Student Loan Marketing
Sun Microsystems
SynOptics Communications
Tektronix
20th Century Industries
U.S. Bancorp
Unisys
VLSI Technology
***************************************************************************
***************************************************************************
***************************************************************************
AMERICAN VARIABLE INSURANCE SERIES INTERNATIONAL FUND
Investment Portfolio, November 30, 1994
OTHER 1.79%
THE AMERICAS 9.41%
CASH 18.15%
ASIA/PACIFIC 21.51%
EUROPE 49.14%
<TABLE>
<CAPTION>
LARGEST INDIVIDUAL EQUITY HOLDINGS Percent of
Net Assets
<S> <C>
Daimler-Benz 1.98%
Telefonos de Mexico 1.84
Nokia 1.46
Bayerische Motoren Werke 1.45
Forte 1.31
Volkswagen 1.28
TNT 1.26
Telecom Corp. of New Zealand 1.24
ABN AMRO 1.21
Australia and New Zealand Banking Group 1.21
</TABLE>
- ----------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Market Percent
Number of Value of Net
Stocks (common and preferred) Shares (000) Assets
TELECOMMUNICATIONS - 7.02%
Telefonos de Mexico, SA de CV, Class L (American Depositary
Receipts)(Mexico) 487,000 $25,811 1.84%
Telecom Corp. of New Zealand Ltd. (New Zealand)/1/ 4,956,800 16,810
Telecom Corp. of New Zealand Ltd.(American Depositary
Receipts) 11,700 633 1.24
Tele Danmark AS, Class B (American Depositary Receipts)
(Denmark)/2/ 600,000 15,525 1.11
Telecomunicacoes Brasileiras SA, preferred nominative
(Brazil) 256,722,053 12,290 0.87
Telecom Italia SpA (Italy) 3,861,000 9,967
Telecom Italia SpA, savings shares 276,000 572 0.75
BCE Inc. (Canada) 293,000 9,768 0.7
Telefonica de Espana, SA (American Depositary Receipts)
(Spain) 158,000 6,103 0.43
Rogers Cantel Mobile Communications Inc., Class B (Canada)/2/ 195,000 5,728 0.41
STET - Societa Finanziaria Telefonica p.a. (Italy) 950,000 2,769
STET - Societa Finanziaria Telefonica p.a., nonconvertible
savings shares 950,000 2,268 0.36
Philippine Long Distance Telephone Co. (Global
Depositary Receipts)(Philippines)/2/ 80,000 3,980 0.28
Cable and Wireless PLC (United Kingdom) 587,700 3,570 0.25
Nippon Telegraph & Telephone Corp. (Japan) 400 3,396 0.24
Vodafone Group PLC (American Depositary Receipts)(United
Kingdom) 66,000 2,145
Vodafone Group PLC 392,976 1,249 0.24
Pakistan Telecommunication Corp. (Global Depositary
Receipts)(Pakistan)/12/ 12,800 1,958 0.14
AUTOMOBILES - 7.41%
Daimler-Benz AG (Germany) 58,920 27,840 1.98
Bayerische Motoren Werke AG (Germany) 35,000 16,816
Bayerische Motoren Werke AG, perferred shares 10,472 3,599 1.45
Volkswagen AG, preferred shares (Germany) 83,000 17,932 1.28
Peugeot SA (France) 110,000 16,089 1.15
Toyota Motor Corp. (Japan) 398,000 8,487 0.6
Suzuki Motor Corp. (Japan) 612,000 6,989 0.5
Renault V.I. SA (France)/1/ 129,500 4,356 0.31
Nissan Motor Co., Ltd. (Japan) 226,000 1,907 0.14
BANKING - 6.95%
Australia and New Zealand Banking Group Ltd. (Australia) 5,614,016 17,067 1.21
ABN AMRO Holding NV (Netherlands) 491,334 16,985 1.21
Westpac Banking Corp. (Australia) 3,815,761 12,303 0.88
P.T. Bank Internasional Indonesia (Indonesia) 1,863,000 6,329 0.45
Banco Bradesco SA, preferred nominative (Brazil) 725,076,991 5,914 0.42
Kansallis-Osake-Pankki (Finland)/2/ 4,100,000 5,053 0.36
Canadian Imperial Bank of Commerce (Canada) 200,000 4,778 0.34
Bank of Montreal (Canada) 220,000 4,057 0.29
CS Holding Group (Switzerland) 8,000 3,382
CS Holding Group, registered shares 8,000 653 0.29
Safra Republic Holdings SA (Luxembourg) 42,000 3,685 0.26
Banco Bilbao Vizcaya, SA (American Depositary Receipts)
(Spain) 130,000 3,396 0.24
Bank of Ayudhya, Ltd. (Thailand) 765,000 3,084 0.22
Credit local de France (France) 39,800 3,067 0.22
National Australia Bank Ltd. (Australia) 290,201 2,339 0.17
Bangkok Bank Ltd. (Thailand) 212,500 2,104 0.15
Deutsche Bank AG (Germany) 3,300 1,556 0.11
Philippine National Bank (Philippines) 98,049 1,309 0.09
Bayerische Vereinsbank AG (Germany) 2,000 582 0.04
MULTI-INDUSTRY - 6.91%
Nokia Corp., preferred shares (Finland) 80,000 10,929
Nokia Corp. 70,000 9,548 1.46
Brierley Investments Ltd. (New Zealand) 20,901,870 15,620
Brierley Investments Ltd., 9.00% convertible preferred 1,445,000 1,007 1.18
Groupe Bruxelles Lambert SA (Belgium) 83,000 9,938 0.71
Preussag AG (Germany) 29,000 7,991 0.57
Pearson PLC (United Kingdom) 540,000 5,199 0.37
Lend Lease Corp. Ltd. (Australia) 420,901 5,138 0.37
Industriforvaltnings AB Kinnevik, Class A (Sweden) 101,600 3,071
Industriforvaltnings AB Kinnevik, Class B 65,000 2,025 0.36
Orkla AS, Class A (Norway) 155,000 4,944 0.35
Swire Pacific Ltd., Class A (Hong Kong) 718,000 4,781 0.34
Hutchison Whampoa Ltd. (Hong Kong) 1,200,000 4,779 0.34
Investor AB, Class B (Sweden) 170,000 4,327 0.31
Chargeurs (France) 17,000 4,048 0.29
B-A-T Industries PLC (United Kingdom) 512,000 3,591 0.26
BROADCASTING & PUBLISHING - 4.86%
Television Broadcasts Ltd. (Hong Kong) 2,562,000 10,270 0.73
News Corp. Ltd. (American Depositary Receipts)(Australia) 362,000 5,701
News Corp. Ltd., preferred shares (American Depositary
Receipts)/2/ 181,000 2,511 0.58
NV Verenigd Bezit VNU (Netherlands) 77,000 7,565 0.54
Grupo Televisa, SA (American Depositary Receipts)(Mexico) 149,000 6,742 0.48
Rogers Communications Inc., Class B (Canada)/2/ 475,000 6,559 0.47
Independent Newspapers, PLC (Ireland) 994,450 4,347 0.31
Elsevier NV (Netherlands) 340,000 3,383 0.24
Europe 1 Communication (Monaco) 8,571 2,673 0.19
Holdingmaatschappij De Telegraaf NV (Netherlands) 23,500 2,605 0.19
John Fairfax Holdings Ltd. (Australia) 1,280,000 2,575 0.18
CANAL+ (France) 14,778 2,496 0.18
Daily Mail and General Trust PLC, Class A (United Kingdom) 145,000 2,202 0.16
News International PLC, special dividend shares (United
Kingdom) 580,000 2,134 0.15
Tokyo Broadcasting System, Inc. (Japan) 113,000 1,907 0.14
Wolters Kluwer NV (Netherlands) 25,740 1,815 0.13
AUDIOFINA (Luxembourg) 2,455 1,240
AUDIOFINA, 5.00% convertible preferred 223 109 0.1
Sing Tao Holdings Ltd. (Hong Kong - Incorporated in Bermuda) 2,223,230 1,294 0.09
UTILITIES: ELECTRIC & GAS - 3.90%
Hongkong Electric Holdings Ltd. (Hong Kong) 5,025,000 12,475 0.89
Korea Electric Power Corp. (Korea) 188,000 7,019
Korea Electric Power Corp. (American Depositary Receipt)/2/ 215,000 4,515 0.82
Centrais Eletricas Brasileiras SA, Class B,
preferred nominative (Brazil) 31,000,000 10,736 0.76
China Light & Power Co., Ltd. (Hong Kong) 1,517,800 6,535 0.47
Iberdrola, SA (Spain) 915,000 6,135 0.44
Companhia Energetica de Sao Paulo, preferred nominative,
(American Depositary Receipts)(Brazil)/12/ 183,998 2,760
Companhia Energetica de Sao Paulo, units/2/ 681,500 918 0.26
Scottish Power PLC (United Kingdom) 600,000 3,311 0.24
Hong Kong and China Gas Co. Ltd. (Hong Kong) 202,320 330 0.02
CHEMICALS - 3.73%
L'Air Liquide (France) 73,977 10,202 0.73
Akzo NV (Netherlands) 92,000 10,200 0.73
DSM NV (Netherlands) 98,902 7,366 0.52
Sumitomo Chemical Co., Ltd. (Japan) 1,221,000 7,071 0.5
Ciba-Geigy Ltd. (Switzerland) 10,400 6,031
Ciba-Geigy Ltd., warrants, expire 1995/2/ 1,060 4 0.43
Bayer AG (Germany) 22,500 4,923 0.35
BASF AG (Germany) 19,000 3,678 0.26
Hoechst AG (Germany) 15,000 3,002 0.21
BUSINESS & PUBLIC SERVICES - 3.55%
Autopistas, Concesionaria Espanola, SA (Spain) 1,035,000 8,645 0.62
Reuters Holdings PLC (United Kingdom) 932,000 7,179 0.51
Havas SA (France) 67,757 5,500 0.39
Eurotunnel SA, units (France)/2/ 1,376,000 5,427 0.39
Thames Water PLC (United Kingdom) 608,202 4,656 0.33
Saatchi & Saatchi Co. PLC (United Kingdom) 1,808,995 4,315 0.31
Welsh Water PLC (United Kingdom) 394,000 3,911 0.28
De La Rue PLC (United Kingdom) 200,000 3,189 0.23
Cross-Harbour Tunnel Co., Ltd. (Hong Kong) 1,500,000 3,123 0.22
Securicor Group PLC, Class A (United Kingdom) 165,000 2,436 0.17
Lex Service PLC (United Kingdom) 281,400 1,454 0.1
ELECTRICAL & ELECTRONICS - 3.15%
ASEA AB, Class A (Sweden) 130,000 9,237
ASEA AB, Class B 69,300 4,924 1.01
Siemens AG (Germany) 23,850 9,266 0.66
BBC Brown Boveri Ltd, Class A (Switzerland) 9,292 7,779 0.55
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 121,500 6,684
Telefonaktiebolaget LM Ericsson, Class B, 4.25% convertible
preferred 14,500 28 0.48
Alcatel Alsthom (France) 47,354 3,999 0.28
Johnson Electric Holdings Ltd. (Hong Kong - Incorporated in
Bermuda) 495,000 1,267 0.09
Hitachi, Ltd. (Japan) 115,000 1,135 0.08
INSURANCE - 2.49%
Munchener Ruckversicherungs-Gesellschaft (Germany) 4,349 7,777
Munchener Ruckversicherungs-Gesellschaft, warrants,
expire 1998/2/ 483 57 0.56
Irish Life PLC (Ireland) 2,506,000 7,111 0.51
GIO Australia Holdings Ltd. (Australia) 2,788,794 4,946 0.35
Corporation Mapfre, CIR, SA (Spain) 98,652 4,500 0.32
Willis Corroon Group PLC (United Kingdom) 1,712,250 3,860 0.27
United Friendly Group PLC, Class B, (United Kingdom) 500,000 3,491 0.25
Refuge Group PLC (United Kingdom) 800,000 3,194 0.23
MACHINERY & ENGINEERING - 2.42%
Mannesmann AG (Germany) 45,187 11,790 0.84
VA Technologie AG (Austria)/1/ 55,100 5,368 0.38
Atlas Copco AB, Class A (Sweden) 410,000 5,272 0.38
Sembawang Shipyard Ltd. (Singapore) 645,000 4,628 0.33
Sandvik AB, Class B (Sweden) 175,000 2,946 0.21
GEA AG, preferred shares (Germany) 5,000 1,511
GEA AG 3,750 1,420 0.21
Siu-Fung Ceramics Holdings Ltd. (Hong Kong - Incorporated
in Bermuda) 5,000,000 1,009 0.07
LEISURE & TOURISM - 2.25%
Forte PLC (United Kingdom) 4,968,836 18,436 1.31
PolyGram NV (New York Registered Shares)(Netherlands) 175,000 7,306 0.52
Mandarin Oriental International Ltd. (Hong Kong -
Incorporated in Bermuda) 5,665,277 5,897 0.42
BUILDING MATERIALS & COMPONENTS - 2.13%
Holderbank Financiere Glaris Ltd. (Switzerland) 16,300 12,616
Holderbank Financiere Glaris Ltd., warrants, expire 1994/2/ 81,500 126 0.91
CEMEX, SA, Class A (Mexico) 1,086,250 10,226 0.73
Poliet (France) 40,782 2,960 0.21
Sika Finanz AG, participation certificates (Switzerland) 6,500 1,785 0.13
Tolmex, SA de CV, Class B2 (Mexico) 85,000 1,241 0.09
CAMAS PLC (United Kingdom) 668,750 817 0.06
HEALTH & PERSONAL CARE - 1.90%
AB Astra, Class A (Sweden) 470,000 12,648 0.9
Glaxo Holdings PLC (American Depositary Receipts)
(United Kingdom) 500,000 9,625 0.69
Sandoz Ltd., participation certificates (Switzerland) 8,500 4,360 0.31
BEVERAGES & TOBACCO - 1.79%
Coca-Cola Amatil Ltd. (Australia)/1/ 2,083,417 13,595 0.97
Heineken NV (Netherlands) 45,017 6,504 0.46
Grupo Embotellador de Mexico, SA de CV (Global Depositary
Receipts)(Mexico) 212,100 5,064 0.36
FOOD & HOUSEHOLD PRODUCTS - 1.79%
Reckitt & Colman PLC (United Kingdom) 1,300,000 11,356 0.81
Nestle SA (Switzerland) 11,936 11,061 0.79
Hazlewood Foods PLC (United Kingdom) 1,500,000 2,654 0.19
MERCHANDISING - 1.75%
Tesco PLC (United Kingdom) 2,000,000 7,702 0.55
WHSmith Group PLC, Class A (United Kingdom) 700,000 4,887 0.35
Amway Japan Ltd. (American Depositary Receipts)(Japan) 200,000 3,200 0.23
Kwik-Fit Holdings PLC (United Kingdom) 1,200,000 3,109 0.22
Ito-Yokado Co., Ltd. (Japan) 50,000 2,653 0.19
Cifra, SA de CV, Class C (Mexico) 832,000 2,265 0.16
Aoyama Trading Co., Ltd. (Japan) 30,000 670 0.05
MISCELLANEOUS MATERIALS & COMMODITIES - 1.72%
Compagnie de Saint-Gobain (France) 79,954 9,617 0.68
English China Clays PLC (United Kingdom) 1,419,050 7,575 0.54
Pilkington PLC (United Kingdom) 2,700,000 7,080 0.5
TRANSPORTATION: AIRLINES - 1.62%
Cathay Pacific Airways Ltd. (Hong Kong) 8,460,000 12,088 0.86
British Airways PLC (American Depositary Receipts)
(United Kingdom) 63,750 3,833
British Airways PLC 560,000 3,314 0.51
Singapore Airlines Ltd. (Singapore) 358,000 3,474 0.25
APPLIANCES & HOUSEHOLD DURABLES - 1.55%
THORN EMI PLC (United Kingdom) 460,000 7,223 0.51
AB Electrolux, Class B (Sweden) 137,900 7,038 0.5
Sony Corp. (Japan) 101,000 5,359 0.38
Philips Electronics NV (Netherlands) 70,000 2,117 0.15
Samsung Electronics Co., Ltd. (South Korea) 666 110 0.01
INDUSTRIAL COMPONENTS - 1.26%
Compagnie Generale des Etablissements Michelin, Class B
(France) 348,000 13,371
Compagnie Generale des Etablissements Michelin, 2.50%
convertible preferred 23,200 1,113 1.03
Magna International Inc., Class A (Canada) 43,000 1,451 0.1
Pirelli SpA (Italy)/2/ 900,000 1,194 0.08
Orbital Engine Corp. Ltd. (Australia)/2/ 611,040 699 0.05
TRANSPORTATION: RAIL & ROAD - 1.26%
TNT Ltd., 8.00% convertible preferred (Australia)/1/ 5,790,400 10,713
TNT Ltd. 3,945,500 7,027 1.26
FOREST PRODUCTS & PAPER - 1.09%
Repola Ltd. (Finland) 385,000 7,039 0.5
Fletcher Challenge Ltd. (New Zealand) 2,200,000 5,526
Fletcher Challenge Ltd. (American Depositary Receipts) 51,670 594 0.44
Carter Holt Harvey Ltd. (New Zealand) 981,674 2,176 0.15
ENERGY SOURCES - 1.02%
Societe Nationale Elf Aquitane (American Depositary
Receipts)(France) 150,000 5,100 0.36
Petrofina SA (Belgium) 15,175 4,419 0.31
TOTAL, Class B (France) 55,022 3,442 0.24
Petron Corp. (Global Depositary Receipts)(Philippines)/12/ 36,000 1,548 0.11
METALS: STEEL - 0.88%
British Steel PLC (United Kingdom) 2,223,000 5,533 0.39
Thyssen AG (Germany) 21,000 3,735 0.27
Svenskt Stal AB, Class A (Sweden) 60,000 2,645 0.19
Tubos de Acero de Mexico, SA (American Depositary Receipts)
(Mexico)/2/ 85,000 420 0.03
WHOLESALE & INTERNATIONAL TRADE - 0.62%
ITOCHU Corp. (Japan) 600,000 4,390 0.31
Mitsubishi Corp. (Japan) 325,000 4,336 0.31
METALS: NONFERROUS - 0.53%
Falconbridge Ltd (Canada)/12/ 250,000 4,133 0.29
Teck Corp., Class B (Canada) 200,000 3,434 0.24
REAL ESTATE - 0.46%
Sun Hung Kai Properities Ltd. (Hong Kong) 1,000,000 6,427 0.46
AEROSPACE & MILITARY TECHNOLOGY - 0.37%
Rolls-Royce PLC (United Kingdom) 1,875,000 5,240 0.37
ELECTRONIC INSTRUMENTS - 0.27%
Scitex Corp. Ltd. (Israel) 210,000 3,754 0.27
DATA PROCESSING & REPRODUCTION - 0.25%
Oce-van der Grinten NV (Netherlands) 81,000 3,542 0.25
FINANCIAL SERVICES - 0.17%
Pioneer Industries International (Holdings) Ltd. (Hong Kong) 3,200,000 2,255
Pioneer Industries International (Holdings) Ltd., warrants,
expire 1995/2/ 640,000 147 0.17
TEXTILES & APPAREL - 0.08%
Wacoal Corp. (Japan) 103,000 1,155 0.08
------------ -------------
-
TOTAL STOCKS (cost: $997,156,000) 1,109,658 78.99
------------ -------------
-
Principal
Amount
Convertible Debentures (000)
- -------------------------------------------------------------- ------------- ------------ -------------
- ---------- -
FINANCIALS - 0.23%
Bangkok Bank Ltd. 3.25% convertible bonds 2004/1/ $3,675 3,271 0.23
MULTI-INDUSTRY - 0.08%
Jardine Strategic Holdings Ltd., 7.50% convertible bonds 2049 1,000 1,080 0.08
------------ -------------
-
TOTAL CONVERTIBLE DEBENTURES (cost: $4,630,000) 4,351 0.31
------------ -------------
-
MISCELLANEOUS
Other equity-type securities in initial period of acquisition
(cost: $27,516,000) 26,771 1.9
------------ -------------
-
TOTAL EQUITY-TYPE SECURITIES (cost: $1,029,302,000) 1,140,780 81.2
------------ -------------
-
Bonds & Notes
- -------------------------------------------------------------- ------------- ------------ -------------
- ---------- -
GOVERNMENTS (EXCLUDING U.S. GOVERNMENT) - 0.58%
New Zealand Government 9.00% 1996 NZ8,000 4,984 0.35
Republic of Argentina 4.25%, Eurobonds, Series L, 2023/3/ 7000 3,159 0.23
INDUSTRIALS - 0.07%
Rogers Cantel Mobile Communications Inc. 10.75% 2001 1,000 1,010 0.07
------------ -------------
-
TOTAL BONDS & NOTES (cost: $9,406,000) 9,153 0.65
------------ -------------
-
Principal Market Percent
Amount Value of Net
SHORT-TERM SECURITIES (000) (000) Assets
- -------------------------------------------------------------- ------------- ------------ -------------
- ---------- -
CORPORATE SHORT-TERM NOTES - 10.93%
ABN-AMRO North America Finance Inc. 4.80%-5.03% due
12/1-12/19/94 24,400 $24,385 1.73
Barclays Bank of Canada 5.20% due 12/14/94 16,500 16,467 1.17
Dresdner U.S. Finance Inc. 5.70% due 1/3/95 15,000 14,921 1.06
British Telecommunications PLC 5.73% due 1/27/95 15,000 14,864 1.06
Nestle Capital Corp. 5.31%-5.49% due 12/19-12/29/94 13,000 12,955 0.92
Arco Coal Australia Inc. 5.62% due 1/12/95 10,144 10,076 0.72
Toronto-Dominion Holdings USA Inc. 5.10% due 12/12/94 10,000 9,983 0.71
Panasonic Finance Inc. 5.50% due 12/29/94 10,000 9,956 0.71
Halifax Building Society 5.00% due 12/19/94 9,100 9,076 0.65
Daimler-Benz North America Corp. 5.70% due 1/4/95 9,000 8,950 0.64
SmithKline Beecham Corp. 5.48% due 12/2/94 8,300 8,297 0.59
Siemens Corp. 5.37% due 1/13/95 5,200 5,164 0.37
National Australia Funding (Delaware) Inc. 5.57% due 1/5/95 5,000 4,972 0.35
Canadian Wheat Board 5.12% due 12/8/94 3,500 3,496 0.25
FEDERAL AGENCY DISCOUNT NOTES - 2.80%
Federal National Mortgage Assn. 4.81%-4.97% due 12/5-12/21/94 36,930 36,841 2.62
Federal Home Loan Mortgage Corp. 5.65% due 12/1/94 2,500 2,500 0.18
CERTIFICATES OF DEPOSIT - 4.56%
Canadian Imperial Bank of Commerce 5.12% due 12/12/94 25,000 25,000 1.78
Banque Nationale de Paris 5.00% due 12/1/94 15,000 15,000 1.07
Morgan Guaranty Trust Co. of New York 5.14% due 12/5/94 10,000 10,000 0.71
Societe Generale 5.55% due 1/31/95 9,000 8,992 0.64
Lloyds Bank PLC 5.23% due 12/13/94 5,000 5,000 0.36
------------ -------------
-
TOTAL SHORT-TERM SECURITIES (cost: $256,901,000) 256,895 18.29
------------ -------------
-
TOTAL INVESTMENT SECURITIES (cost: $1,295,609,000) 1,406,828 100.14
Excess of payables over money market account, cash and
receivables 1,942 0.14
------------ -------------
-
NET ASSETS $1,404,886 100.00%
=========== ========
</TABLE>
/1/ Purchased in a private placement transaction; resale to the
public may require registration or may extend only to
qualified institutional buyers.
/2/ Non-income-producing securities
/3/ Coupon rate may change periodically
See Notes to Financial Statements
Equity-type securities appearing in the
portfolio since May 31, 1994
- ---------------------------------------
Amway Japan
CAMAS
Companhia Energetica de Sao Paulo
Falconbridge
Kansallis-Osake-Pankki
Mandarin Oriental International
Nippon Telegraph & Telephone
Pakistan Telecommunication
Petrofina
Petron
Philippine Long Distance Telephone
Renault V.I.
Scottish Power
Sumitomo Chemical
Television Broadcasts
Wacoal
Equity-type securities eliminated from the
portfolio since May 31, 1994
- -------------------------------------------
British Telecommunications
Champion Technology
Commonwealth Bank of Australia
Compagnie Generale des Eaux
Compania de Telefonos de Chile
Dominion Mining
Elf Gabon
Grupo Financiero Bancomer
Kajima
Koninklijke Nederlandsche Hoogovens en Staalfabrieken
Kyocera
Mori Seiki
Motor-Columbus
P.T. Inti Indorayon Utama
Schweizerischer Bankgesellschaft
Sekisui House
Shun Tak Holdings
Sumitomo Forestry
Television Francaise 1
Valeo
Woodside Petroleum
***************************************************************************
***************************************************************************
***************************************************************************
American Variable Insurance Series
GROWTH-INCOME FUND
Investment Portfolio - November 30, 1994
STOCKS 85.29%
CASH 14.71%
<TABLE>
<CAPTION>
Percent
of Net
LARGEST INDIVIDUAL EQUITY HOLDINGS Assets
<S> <C>
WMX Technologies 1.63%
International Business Machines 1.36
Aluminum Co. of America 1.34
Philip Morris 1.33
Tele-Communications 1.31
Telefonos de Mexico 1.29
BankAmerica 1.26
Boeing 1.26
Dun & Bradstreet 1.12
AT&T 1.09
</TABLE>
- ------------------------------------------------
<TABLE>
<CAPTION>
Number Market Percent
of Value of Net
Stocks (common and preferred) Shares (000) Assets
<S> <C> <C> <C>
HEALTH & PERSONAL CARE - 6.63%
Schering-Plough Corp. 370,200 $27,719 1.01%
American Home Products Corp. 410,000 26,701 0.97
Eli Lilly and Co. 420,000 26,303 0.96
Merck & Co., Inc. 650,000 24,213 0.88
Warner-Lambert Co. 260,000 20,118 0.73
Pfizer Inc. 235,000 18,183 0.66
Bristol-Myers Squibb Co. 295,000 17,036 0.62
Abbott Laboratories 460,000 14,663 0.54
C.R. Bard, Inc. 440,000 11,440 0.42
Baxter International Inc. 350,000 9,013 0.33
Johnson & Johnson 100,000 5,337 0.19
Upjohn Co. 165,000 5,301 0.19
McKesson Corp. 125,000 3,922 0.14
BANKING - 6.97%
BankAmerica Corp. 845,000 34,645 1.26
Banc One Corp. 662,550 17,806 0.65
First Interstate Bancorp 210,000 14,805 0.54
First Fidelity Bancorporation 313,000 14,085 0.51
PNC Bank Corp. 636,000 13,197 0.48
Bankers Trust New York Corp. 210,000 12,443 0.45
Wells Fargo & Co. 80,000 11,550 0.42
Wachovia Corp. 350,000 11,419 0.42
SunTrust Banks, Inc. 225,000 10,603 0.39
First Union Corp. 225,000 8,972 0.33
Citicorp $5.375 convertible preferred, Series 13/1/ 40,000 4,610
Citicorp 100,000 4,163 0.32
Huntington Bancshares Inc. 477,400 8,772 0.32
First Tennessee National Corp. 200,000 8,450 0.31
J.P. Morgan & Co. Inc. 100,000 5,875 0.21
Bank of New York Co., Inc. 200,000 5,575 0.2
Signet Banking Corp. 150,000 4,481 0.16
TELECOMMUNICATIONS- 6.28%
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts)(Mexico) 665,800 35,287 1.29
AT&T Corp. 610,000 29,966 1.09
Ameritech Corp. 510,000 20,145 0.74
Sprint Corp. 625,000 18,672 0.68
MCI Communications Corp. 859,800 16,766 0.61
U S WEST Communications, Inc. 463,200 16,328 0.6
GTE Corp. 335,000 10,259 0.37
AirTouch Communications/2/ 332,323 9,014 0.33
Pacific Telesis Group 250,000 7,250 0.26
Bell Atlantic Corp. 90,000 4,511 0.16
Southwestern Bell Corp. 100,000 4,138 0.15
ENERGY SOURCES - 5.76%
Amoco Corp. 455,000 27,641 1.01
Phillips Petroleum Co. 740,000 24,420 0.89
Exxon Corp. 355,000 21,433 0.78
Royal Dutch Petroleum Co. (New York Registered
Shares) (Netherlands) 195,000 21,182 0.77
Atlantic Richfield Co. 150,000 15,525 0.57
Texaco Inc. 235,000 14,599 0.53
Valero Energy Corp. 560,000 10,640 0.39
Mobil Corp. 100,000 8,525 0.31
British Petroleum Co. PLC (American Depositary
Receipts) (United Kingdom) 101,828 8,083 0.3
Chevron Corp. 130,000 5,671 0.21
BROADCASTING & PUBLISHING - 5.70%
Tele-Communications, Inc., Class A/2/ 1,525,000 36,028 1.31
Gannett Co., Inc. 430,000 20,371 0.74
Time Warner Inc. 592,000 19,980 0.73
News Corp. Ltd. (American Depositary Receipts)
(Australia) 800,000 12,600
News Corp. Ltd., preferred shares
(American Depositary Receipts)/2/ 400,000 5,550 0.66
Capital Cities/ABC, Inc. 220,000 17,985 0.66
Times Mirror Co., Series A 520,000 16,055 0.59
CBS Inc. 220,075 12,214 0.45
New York Times Co., Class A 344,300 8,177 0.3
Tribune Co. 140,000 7,018 0.26
BUSINESS & PUBLIC SERVICES - 4.92%
WMX Technologies, Inc. 1,730,000 44,548 1.63
Dun & Bradstreet Corp. 580,000 30,668 1.12
General Motors Corp., Class E 610,000 22,418 0.82
Browning-Ferris Industries, Inc. 434,800 11,740 0.43
Federal Express Corp./2/ 190,000 10,806 0.39
Omnicom Group Inc. 170,000 8,861 0.32
Pitney Bowes Inc. 175,000 5,819 0.21
DATA PROCESSING & REPRODUCTION - 4.29%
International Business Machines Corp. 525,000 37,144 1.36
Xerox Corp. 250,000 24,563 0.9
Compaq Computer Corp./2/ 540,000 21,128 0.77
Microsoft Corp./2/ 280,000 17,570 0.64
Apple Computer, Inc. 250,000 9,250 0.34
Novell, Inc./2/ 212,000 4,214 0.15
Hewlett-Packard Co. 35,000 3,430 0.13
CHEMICALS - 3.23%
Monsanto Co. 245,000 17,640 0.64
Praxair, Inc. 850,000 17,213 0.63
Eastman Chemical Co. 325,000 15,316 0.56
Dow Chemical Co. 190,000 12,160 0.44
Betz Laboratories, Inc. 150,000 6,712 0.25
E.I. du Pont de Nemours and Co. 100,000 5,388 0.2
PPG Industries, Inc. 140,000 5,040 0.18
Imperial Chemical Industries PLC (American
Depositary Receipts) (United Kingdom) 100,000 4,775 0.17
BFGoodrich Co. 100,000 4,450 0.16
MULTI-INDUSTRY - 3.16%
Harsco Corp. 515,000 21,115 0.77
Tenneco Inc. 505,000 19,632 0.72
ITT Corp. 200,000 15,925 0.58
Minnesota Mining and Manufacturing Co. 240,000 12,300 0.45
Textron Inc. 240,000 11,280 0.41
Hanson PLC (American Depositary Receipts)
(United Kingdom) 340,000 6,205 0.23
UTILITIES: ELECTRIC & GAS - 3.15%
Entergy Corp. 900,000 20,250 0.74
Pacific Gas and Electric Co. 705,000 16,832 0.61
Allegheny Power System, Inc. 550,000 11,962 0.44
Central and South West Corp. 450,000 9,563 0.35
Consolidated Edison Co. of New York, Inc. 350,000 9,056 0.33
Houston Industries Inc. 250,000 8,500 0.31
Detroit Edison Co. 200,000 5,350 0.2
General Public Utilities Corp. 120,000 3,090 0.11
Long Island Lighting Co. 95,000 1,591 0.06
BEVERAGES & TOBACCO - 3.03%
Philip Morris Companies Inc. 610,000 36,447 1.33
Seagram Co. Ltd. (Canada) 650,000 18,931 0.69
PepsiCo, Inc. 435,000 15,388 0.56
American Brands, Inc. 350,000 12,381 0.45
AEROSPACE & MILITARY TECHNOLOGY - 2.96%
Boeing Co. 770,000 34,457 1.26
Litton Industries, Inc./2/ 441,800 15,076 0.55
United Technologies Corp. 200,000 11,700 0.43
E-Systems, Inc. 300,000 10,987 0.4
Raytheon Co. 70,000 4,401 0.16
Coltec Industries Inc./2/ 260,000 4,257 0.16
INSURANCE - 2.83%
SAFECO Corp. 465,000 22,785 0.83
Allstate Corp. 800,000 18,900 0.69
American General Corp. 600,000 15,750 0.58
Arthur J. Gallagher & Co. 195,600 6,112 0.22
St. Paul Companies, Inc. 120,000 4,950 0.18
General Re Corp. 40,000 4,695 0.17
TIG Holdings, Inc. 150,000 2,625 0.1
American International Group, Inc. 17,500 1,603 0.06
MACHINERY & ENGINEERING - 2.16%
Sundstrand Corp. 375,000 16,031 0.59
Cincinnati Milacron Inc. 575,000 13,728 0.5
Deere & Co. 172,200 11,064 0.4
Ingersoll-Rand Co. 300,000 9,675 0.35
Parker Hannifin Corp. 200,000 8,775 0.32
FINANCIAL SERVICES - 1.85%
Student Loan Marketing Assn. 500,000 17,125 0.62
American Express Co. 410,000 12,146 0.44
Household International, Inc. 300,000 11,550 0.42
Beneficial Corp. 200,000 7,300 0.27
ADVANTA Corp., Class A 100,000 2,725 0.1
METALS: NONFERROUS - 1.79%
Aluminum Co. of America 450,000 36,731 1.34
Inco Ltd. (Canada) 262,200 7,210 0.26
Phelps Dodge Corp. 50,000 2,863 0.11
Alumax Inc./2/ 80,000 2,100 0.08
TRANSPORTATION: RAIL & ROAD - 1.72%
Conrail, Inc. 460,000 23,920 0.87
Norfolk Southern Corp. 245,000 14,822 0.54
Union Pacific Corp. 140,000 6,510 0.24
Roadway Services, Inc. 40,000 2,010 0.07
MERCHANDISING - 1.65%
Limited Inc. 1,100,000 21,312 0.78
May Department Stores Co. 250,000 9,062 0.33
Melville Corp. 287,400 9,053 0.33
Walgreen Co. 140,000 5,810 0.21
ENERGY EQUIPMENT - 1.64%
Cooper Industries, Inc. 570,000 19,808 0.72
Western Atlas Inc./2/ 371,900 16,224 0.59
Schlumberger Ltd. (Netherland Antilles) 170,000 9,031 0.33
LEISURE & TOURISM - 1.47%
Walt Disney Co. 585,000 25,521 0.93
Circus Circus Enterprises, Inc./2/ 350,000 7,350 0.27
Marriott International, Inc. 200,000 5,250 0.19
Host Marriott Corp./2/ 240,000 2,280 0.08
FOREST PRODUCTS & PAPER - 1.47%
Union Camp Corp. 440,000 20,405 0.75
James River Corp. of Virginia 500,000 10,562 0.39
ITT Rayonier Inc. 325,000 9,100 0.33
FOOD & HOUSEHOLD PRODUCTS - 1.26%
CPC International Inc. 400,000 20,500 0.75
Archer Daniels Midland Co. 308,000 8,509 0.31
ConAgra, Inc. 180,000 5,558 0.2
ELECTRICAL & ELECTRONICS - 1.24%
General Electric Co. 590,000 27,140 0.99
Honeywell Inc. 236,200 6,909 0.25
Hubbell Inc., Class B 700 38 0
TRANSPORTATION: AIRLINES - 1.18%
AMR Corp./2/ 295,000 14,971 0.55
Delta Air Lines, Inc. 190,000 9,524 0.35
UAL Corp./2/ 80,000 7,640 0.28
MISCELLANEOUS MATERIALS & COMMODITIES - 0.89%
Potash Corp. of Saskatchewan Inc. (Canada) 600,000 21,375 0.78
TRINOVA Corp. 100,000 2,963 0.11
ELECTRONIC COMPONENTS - 0.86%
Motorola, Inc. 240,000 13,530 0.49
Intel Corp. 100,000 6,288 0.23
Texas Instruments Inc. 50,000 3,775 0.14
INDUSTRIAL COMPONENTS - 0.80%
Dana Corp. 403,100 8,717 0.32
Rockwell International Corp. 250,000 8,469 0.31
TRW Inc. 75,000 4,763 0.17
AUTOMOBILES - 0.63%
General Motors Corp. 450,000 17,156 0.63
APPLIANCES & HOUSEHOLD DURABLES - 0.54%
Corning Inc. 300,000 9,000 0.33
LADD Furniture, Inc. 979,400 5,754 0.21
ELECTRONIC INSTRUMENTS - 0.50%
Johnson Controls, Inc. 280,000 13,580 0.5
TEXTILES & APPAREL - 0.41%
VF Corp. 230,000 11,155 0.41
RECREATION & OTHER CONSUMER PRODUCTS - 0.37%
Eastman Kodak Co. 220,000 10,037 0.37
MISCELLANEOUS
Other stocks in initial period of acquisition 80,498 2.94
----------- -----------
TOTAL STOCKS (COST: $2,197,851,000) 2,337,284 85.29
----------- -----------
Principal
Amount
SHORT-TERM SECURITIES (000)
CORPORATE SHORT-TERM NOTES - 13.86%
AT&T Corp. 5.37%-5.68% due 1/4-1/18/95 $59,100 58,721 2.14
Beneficial Corp. 5.07%-5.60% due 12/27/94-1/11/95 47,800 47,572 1.74
Commercial Credit Co. 5.37%-5.75% due
12/21/94-1/23/95 36,700 36,515 1.33
Ford Motor Credit Co. 5.45%-5.50% due 1/6-1/17/95 34,000 33,779 1.23
Central and South West Corp. 5.00%-5.52% due
12/2/94-1/9/95 32,500 32,431 1.18
Texaco Inc. 5.30%-5.70% due 12/16/94-1/20/95 32,000 31,853 1.16
John Deere Capital Corp. 5.70% due 1/23/95 30,000 29,740 1.09
H.J. Heinz Co. 4.97% due 12/12/94 20,000 19,967 0.73
National Rural Utilities Cooperative Finance Corp.
5.70% due 1/6-1/11/95 20,000 19,875 0.73
J.C. Penney Funding Corp. 5.50% due 1/4/95 15,900 15,815 0.58
Intel Corp. 5.03% due 12/23/94 15,000 14,952 0.55
Chevron Oil Finance Co. 5.36% due 1/18/95 12,600 12,501 0.46
American Express Credit Corp. 5.48% due 12/29/94 8,900 8,861 0.32
Ameritech Capital Funding Corp. 5.16% due 12/14/94 8,800 8,782 0.32
Weyerhaeuser Co. 4.99% due 12/7/94 8,300 8,292 0.3
FEDERAL AGENCY DISCOUNT NOTES - 2.24%
Federal Home Loan Mortgage Corp. 4.81%-5.65% due
12/1-12/9/94 25,800 25,772 0.94
Federal Home Loan Bank 5.42% due 12/27/94 18,500 18,425 0.67
Federal Farm Credit Bank 4.94% due 12/8/94 12,000 11,986 0.44
Federal National Mortgage Assn. 4.97% due 12/19/94 5,300 5,286 0.19
BANKERS' ACCEPTANCES - 0.36%
Morgan Guaranty Trust Co. 5.08% due 12/15/94 10,000 9,979 0.36
----------- --------
TOTAL SHORT-TERM SECURITIES (COST: $451,146,000) 451,104 16.46
----------- ---------
TOTAL INVESTMENT SECURITIES (COST: $2,648,997,000) 2,788,388 101.75
Excess of payables over money market account, cash
and receivables 48,022 1.75
----------- -----------
NET ASSETS $2,740,366 100.00%
============ ===========
</TABLE>
/1/Purchased in a private placement transaction;
resale potential extends to qualifed institutional
buyers.
/2/Non-income-producing securities.
See Notes to Financial Statements
Stocks appearing in the portfolio
since May 31, 1994
- ----------------------------------
ADVANTA
Airtouch Communications
Alumax
Apple Computer
Beneficial
Chevron
Cincinnati Milacron
Circus Circus Enterprises
E-Systems
Federal Express
First Tennessee National
First Union
Harsco
Hubbell
Huntington Bancshares
Imperial Chemical Industries
ITT Rayonier
Johnson & Johnson
Johnson Controls
Limited
McKesson
Microsoft
Novell
Pitney Bowes
Signet Banking
TRINOVA
Valero Energy
Wachovia
Walgreen
Stocks eliminated from the portfolio
since May 31, 1994
- ---------------------------------------
American Cyanimid
Anheuser-Bush
BellSouth
Gerber Products
Great Western Financial
Kmart
Lehman Brothers Holdings
NBD Bancorp
Southern New England Telecommunications
Sun Microsystems
Syntex
Unisys
Woolworth
***************************************************************************
***************************************************************************
***************************************************************************
American Variable Insurance Series
Asset Allocation Fund
Investment Portfolio, November 30, 1994
- ----------------------------------------------------
Common Stocks 62.81%
Government Bonds 15.66%
Corporate Bonds 13.07%
Cash 6.51%
Convertible Debentures 1.95%
<TABLE>
<CAPTION>
Percent
of Net
Assets
LARGEST INDIVIDUAL HOLDINGS
<S> <C>
American Home Products 2.30%
Warner Lambert 1.82
Eli Lilly 1.77
American Express 1.63
Amoco 1.62
International Business Machines 1.55
Dun & Bradstreet 1.41
Mobil 1.40
Citicorp 1.37
DuPont 1.35
</TABLE>
- --------------
<TABLE>
<CAPTION>
Market Percent
Number of Value of Net
Common Stocks Shares (000) Assets
- ---------------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
HEALTH & PERSONAL CARE- 6.55%
American Home Products Corp. 225,000 $14,653 2.30%
Warner-Lambert Co. 150,000 11,606 1.82
Eli Lilly and Co. 180,000 11,273 1.77
Bristol-Myers Squibb Co. 145,000 8,374 1.31
Baxter International Inc. 175,000 4,506 0.71
Pfizer Inc. 57,500 4,449 0.7
Abbott Laboratories 48,000 1,530 0.24
ENERGY SOURCES- 6.62%
Amoco Corp. 170,000 10,328 1.62
Mobil Corp. 105,000 8,951 1.4
Phillips Petroleum Co. 245,000 8,085 1.27
Royal Dutch Petroleum Co. (New York Registered
Shares) (Netherlands) 60,000 6,518 1.02
Kerr-McGee Corp. 80,000 3,780 0.59
Texaco Inc. 40,000 2,485 0.39
Atlantic Richfield Co. 20,000 2,070 0.33
BANKING- 6.54%
Citicorp 210,000 8,741 1.37
First Interstate Bancorp 85,000 5,993 0.94
BankAmerica Corp. 100,000 4,100 0.64
First Fidelity Bancorporation 90,000 4,050 0.64
Fleet Financial Group, Inc. 120,000 3,735 0.59
PNC Bank Corp. 160,000 3,320 0.52
First Union Corp. 80,000 3,190 0.5
Bankers Trust New York Corp. 50,000 2,963 0.47
U.S. Bancorp 120,000 2,730 0.43
J.P.Morgan & Co. Inc. 35,000 2,056 0.32
Comerica Inc. 30,000 791 0.12
INSURANCE- 3.36%
SAFECO Corp. 145,000 7,105 1.11
American General Corp. 200,000 5,250 0.82
AMBAC Inc. 130,000 4,501 0.71
St. Paul Companies, Inc. 80,000 3,300 0.52
Ohio Casualty Corp. 44,000 1,254 0.2
DATA PROCESSING & REPRODUCTION- 3.25%
International Business Machines Corp. 140,000 9,905 1.55
Xerox Corp. 40,000 3,930 0.62
Hewlett-Packard Co. 40,000 3,920 0.62
Apple Computer, Inc. 80,000 2,960 0.46
UTILITIES: ELECTRIC & GAS- 3.13%
Entergy Corp. 200,000 4,500 0.71
Long Island Lighting Co. 195,000 3,266 0.51
Unicom Corp. 120,000 2,805 0.44
Detroit Edison Co. 100,000 2,675 0.42
General Public Utilities Corp. 90,000 2,317 0.36
Houston Industries Inc. 60,000 2,040 0.32
Texas Utilities Co. 47,749 1,558 0.24
Consolidated Edison Co. of New York, Inc. 33,000 854 0.13
MULTI-INDUSTRY- 2.35%
Textron Inc. 120,000 5,640 0.9
Tenneco Inc. 120,000 4,665 0.73
Minnesota Mining and Manufacturing Co. 90,000 4,612 0.72
BEVERAGES & TOBACCO- 2.25%
American Brands, Inc. 150,000 5,306 0.83
PepsiCo, Inc. 150,000 5,306 0.83
Seagram Co. Ltd. (Canada) 130,000 3,787 0.59
AEROSPACE & MILITARY TECHNOLOGY- 2.24%
Boeing Co. 150,000 6,713 1.05
Litton Industries, Inc./1/ 150,000 5,119 0.8
Northrop Grumman Corp. 60,000 2,437 0.39
FOOD & HOUSEHOLD PRODUCTS- 1.97%
General Mills, Inc. 100,000 5,375 0.84
H.J. Heinz Co. 100,000 3,638 0.57
Archer Daniels Midland Co. 130,000 3,591 0.56
CHEMICALS- 1.79%
E.I. du Pont de Nemours and Co. 160,000 8,620 1.35
Eastman Chemical Co. 60,000 2,827 0.44
BROADCASTING & PUBLISHING- 1.77%
CBS Inc. 150,000 8,325 1.31
Times Mirror Co., Series A 95,000 2,933 0.46
MERCHANDISING- 1.72%
Melville Corp. 125,000 3,937 0.62
May Department Stores Co. 100,000 3,625 0.57
Limited Inc. 175,000 3,391 0.53
TELECOMMUNICATIONS- 1.70%
Bell Atlantic Corp. 100,000 5,012 0.79
GTE Corp. 100,000 3,063 0.48
LIN Broadcasting Corp./1/ 19,100 2,727 0.43
INDUSTRIAL COMPONENTS- 1.69%
Rockwell International Corp. 240,000 8,130 1.28
Dana Corp. 120,000 2,595 0.41
FINANCIAL SERVICES- 1.63%
American Express Co. 350,000 10,369 1.63
TRANSPORTATION: RAIL & ROAD- 1.52%
CSX Corp. 50,000 3,475 0.55
Union Pacific Corp. 70,000 3,255 0.5
Norfolk Southern Corp. 50,000 3,025 0.47
BUSINESS & PUBLIC SERVICES- 1.41%
Dun & Bradstreet Corp. 170,000 8,989 1.41
ELECTRICAL & ELECTRONICS- 1.03%
Hubbell Inc., Class B 60,000 3,285 0.52
General Electric Co. 70,000 3,220 0.51
FOREST PRODUCTS & PAPER- 1.02%
Union Camp Corp. 80,000 3,710 0.58
ITT Rayonier Inc. 100,000 2,800 0.44
ENERGY EQUIPMENT- 0.89%
Cooper Industries, Inc. 100,000 3,475 0.55
Western Atlas Inc./1/ 50,000 2,181 0.34
METALS: NONFERROUS- 0.64%
Aluminum Co. of America 50,000 4,081 0.64
TRANSPORTATION: AIRLINES- 0.64%
AMR Corp./1/ 80,000 4,060 0.64
RECREATION & OTHER CONSUMER PRODUCTS- 0.50%
Eastman Kodak Co. 70,000 3,194 0.5
AUTOMOBILES- 0.48%
General Motors Corp. 80,000 3,050 0.48
TEXTILES & APPAREL- 0.44%
Brown Group, Inc. 90,000 2,857 0.44
LEISURE & TOURISM- 0.43%
Circus Circus Enterprises, Inc./1/ 130,000 2,730 0.43
MISCELLANEOUS
Other common stocks in initial period of acquisition 18,783 2.95
----------- -----------
TOTAL COMMON STOCKS (cost: $396,045,000) 400,330 62.81
----------- -----------
Principal
Amount
Convertible Debentures (000)
- ---------------------------------------------------- ---------- ---------- ----------
INDUSTRIALS & SERVICES- 1.95%
Turner Broadcasting System, Inc. 0% 2007/2/ $10,000 3,925 0.62
Hanson America Inc. 2.39% 2001/2/ 5,000 3,575 0.56
USX Corp. 0% 2005 8,000 3,480 0.54
Time Warner Inc. 0% 2012 4,800 1,458 0.23
---------- ----------
TOTAL CONVERTIBLE DEBENTURES (cost: $12,309,000) 12,438 1.95
---------- ----------
TOTAL EQUITY-TYPE SECURITIES (cost: $408,354,000) 412,768 64.76
---------- ----------
Bonds & Notes
- -----------------------------------------------
U.S. TREASURY OBLIGATIONS- 15.32%
6.75% 1997 12,000 11,781 1.85
5.75% 1997 12,000 11,415 1.79
8.875% 1996 11,000 11,215 1.76
5.375% 1998 12,000 11,147 1.75
6.875% 1996 10,000 9,911 1.55
6.50% 1996 10,000 9,850 1.55
8.75% 1997 6,000 6,169 0.96
9.25% 1998 5,000 5,236 0.82
8.75% 2008 5,000 5,200 0.82
4.25% 1996 5,000 4,791 0.75
8.75% 2000 3,000 3,124 0.49
8.875% 1999 2,500 2,598 0.41
8.50% 1997 1,000 1,022 0.16
8.00% 1996 1,000 1,011 0.16
7.875% 1996 1,000 1,008 0.16
6.75% 1997 1,000 985 0.15
11.75% 2010 500 627 0.1
10.75% 2003 500 587 0.09
INDUSTRIALS- 6.19%
Container Corp. of America 9.75% 2003 6,500 6,110 0.96
Federal Paper Board Co., Inc. 10.00% 2011 5,000 5,317 0.83
Polaroid Corp. 8.00% 1999 5,000 4,836 0.76
Tele-Communications, Inc. 9.25% 2002 3,000 3,003
Tele-Communications, Inc. 9.25% 2023 1,000 918 0.61
Oryx Energy Co. 9.50% 1999 3,000 2,824
Oryx Energy Co. 10.00% 1999 1,000 983 0.6
Pohang Iron & Steel 7.50% 2002 3,000 2,761 0.43
General Motors Corp. 8.80% 2021 2,500 2,609 0.41
News America Holdings Inc. 10.125% 2012 2,000 2,067 0.33
USX Corp. 9.625% 2003 2,000 2,014 0.32
Acme Metals Inc. 12.50% 2002 2,000 1,970 0.31
Coso Funding Corp. 8.87% 2001/2/ 2,000 1,924 0.3
CenCall Communications Corp. 0%/10.125% 2004/3/ 3,000 1,125 0.18
Dayton Hudson Corp. 9.35% 2020 900 976 0.15
FINANCIAL- 4.56%
General Motors Acceptance Corp. 8.875% 2010 3,235 3,410
General Motors Acceptance Corp. 7.00% 2000 3,000 2,782
General Motors Acceptance Corp. 9.625% 2001 2,000 2,086
General Motors Acceptance Corp. 6.70% 1997 2,000 1,936
General Motors Acceptance Corp. 8.375% 1997 1,500 1,500 1.83
American Re Corp. 10.875% 2004 4,500 4,880 0.77
First Federal Michigan 0% Eurobonds 2005 10,000 4,131 0.65
General Electric Capital Corp. 8.875% 2009 2,000 2,037 0.32
H.F. Ahmanson & Co. 9.875% 1999 1,400 1,467 0.23
B.F. Saul Real Estate Investment Trust 11.625% 2002 1,500 1,305 0.2
Security Pacific Corp. 10.25% 2001 1,000 1,094 0.17
National Westminster Bancorp Inc. 9.45% 2001 1,000 1,053 0.17
Shopping Center Associates 6.75% 2004/2/ 1,000 865 0.14
Golden West Financial Corp. 10.25% 2000 500 539 0.08
TRANSPORTATION- 1.12%
Delta Air Lines, Inc. 9.875% 2000 2,000 1,992
Delta Air Lines, Inc. 10.375% 2011 1,000 959
Delta Air Lines, Inc. 9.20% 2014 1,000 857
Delta Air Lines, Inc. 10.125% 2010 500 471 0.67
Federal Express Corp. 7.53% 2006 1,500 1,384 0.22
AMR Corp. 9.75% 2000 1,000 1,006 0.16
United Air Lines, Inc. 9.00% 2003 500 457 0.07
COLLATERALIZED MORTGAGE OBLIGATIONS-
(PRIVATELY ORIGINATED)/4/- 0.48%
American Airlines Inc., 1991-A, 9.71% 2007 2,374 2,294 0.36
Resolution Trust Corp., Series 1992-C5,
Class C, 8.85% 2022 803 763 0.12
ELECTRIC UTILITIES- 0.40%
Texas Utilities Electric Co. 9.75% 2021 2,500 2,560 0.4
FEDERAL AGENCY OBLIGATIONS-OTHER- 0.34%
Resolution Funding Corp. 8.875% 2020 2,000 2,139 0.34
TELEPHONE UTILITIES- 0.20%
GTE Corp. 10.25% 2020 1,205 1,266 0.2
ASSET-BACKED OBLIGATIONS /4/- 0.12%
Standard Credit Card Trust, 1990-6A, 9.375% 1998 750 771 0.12
---------- ----------
TOTAL BONDS & NOTES (cost: $194,972,000) 183,118 28.73
---------- ----------
Short-Term Securities
- ------------------------------------------------
CORPORATE SHORT-TERM NOTES- 5.80%
Campbell Soup Co. 5.20% due 12/22/94 11,400 11,364 1.78
Vermont American Corp. 5.52% due 12/15/94 6,700 6,685 1.05
J.C. Penney Funding Corp. 5.25% due 12/16/94 4,400 4,390 0.69
McDonald's Corp. 5.47% due 12/5/94 4,000 3,997 0.63
Xerox Corp. 5.72% due 1/5/95 4,000 3,977 0.62
Associates Corp. of North America 5.72% due 12/1/94 3,590 3,590 0.56
Union Pacific Corp. 5.02% due 12/16/94 3,000 2,993 0.47
U.S. TREASURY OBLIGATIONS- 0.33%
11.50% due 11/15/95 2,000 2,084 0.33
--------- ---------
TOTAL SHORT-TERM SECURITIES (cost: $39,289,000) 39,080 6.13
--------- ---------
TOTAL INVESTMENT SECURITIES (cost: $642,615,000) 634,966 99.62
--------- ---------
Excess of money market account, cash and
receivables over payables 2,404 0.38
--------- ---------
NET ASSETS $637,370 100.00%
========= =========
</TABLE>
/1/Non-income-producing securities.
/2/Purchased in a private placement transaction;
resale potential extends to qualified institutional
buyers.
/3/Represents a zero coupon bond which will
convert to a coupon-bearing security at a
later date.
/4/ Pass-through securities backed by a pool of
mortgages or other loans on which principal payments
are periodically made. Therefore, the effective
maturity of these securities is shorter than the
stated maturity.
See Notes to Financial Statements
Equity-type securities appearing in the portfolio
since May 31, 1994
- -------------------------------------------------
AMBAC
Apple Computer
Circus Circus Enterprises
Cooper Industries
Dana
Detroit Edison
First Fidelity Bancorporation
General Mills
H.J. Heinz
ITT Rayonier
LIN Broadcasting
Northrop Grumman
PepsiCo
Seagram
Time Warner
Unicom
USX
Equity-type securities eliminated from the portfolio
since May 31, 1994
- --------------------------------------------------------
H.F. Ahmanson
Barnett Banks
Commonwealth Edison
Delta Air Lines
Dow Chemical
Great Western Financial
Lehman Brothers Holdings
Philip Morris
Shared Medical Systems
Sprint
Stone & Webster
Upjohn
Woolworth
***************************************************************************
***************************************************************************
***************************************************************************
AMERICAN VARIABLE INSURANCE SERIES
HIGH-YIELD BOND FUND
INVESTMENT PORTFOLIO - NOVEMBER 30, 1994
CORPORATE BONDS 82.89%
U.S. GOVERNMENT BONDS 5.34%
NON-U.S. GOVERNMENT BONDS 1.83%
UTILITIES 2.90%
CASH 7.00%
STOCKS 0.04%
<TABLE>
<CAPTION>
Percent
of Net
LARGEST HOLDINGS Assets
<S> <C>
U.S. Treasury 5.34%
Rogers Cantel Mobile Communications 3.56
Comcast/Comcast Cellular 3.12
NEXTEL Communications 3.09
Container Corp. of America 2.83
Continental Cablevision 2.75
Coltec Industries 2.55
MFS Communications 2.52
California Energy 2.51
Dial Call Communications 2.22
</TABLE>
- ----------
<TABLE>
<CAPTION>
Number Market Percent
Common Stocks of Value of Net
shares (000) Assets
<S> <C> <C> <C>
SERVICES - 0.01%
Marriott International, Inc. 4,512 $118 .03%
Host Marriott Corp./1/ 4,512 43 0.01
-------- --------
TOTAL COMMON STOCKS (cost: $142,000) 161 0.04
-------- --------
Principal
Bonds & Notes Amount
(000)
INDUSTRIALS & SERVICES - 81.63%
Rogers Cantel Mobile Communications Inc. 10.75%
2001 $11,248 11,360
Rogers Cantel Mobile Communications Inc. 11.125%
2002 2,500 2,537 3.56
NEXTEL Communications, Inc. 0%/11.50% 2003/2/ 15,500 6,665
NEXTEL Communications, Inc. 0%/9.75% 2004/2/ 14,500 5,401 3.09
Container Corp. of America 9.75% 2003 11,750 11,045 2.83
Continental Cablevision, Inc. 8.625% 2003 5,000 4,475
Continental Cablevision, Inc. 10.625% 2002 4,000 4,010
Continental Cablevision, Inc. 8.50% 2001 1,500 1,365
Continental Cablevision, Inc. 8.875% 2005 1,000 880 2.75
Coltec Industries Inc 9.75% 2000 8,450 8,281
Coltec Industries Inc 9.75% 1999 1,750 1,662 2.55
MFS Communications Co., Inc. 0%/9.375% 2004/2/ 17,250 9,833 2.52
California Energy Co., Inc. 0%/10.25% 2004/2/ 13,800 9,798 2.51
Comcast Cellular Corp., Series B, 0% 2000 10,000 6,525
Comcast Cellular Corp., Series A, 0% 2000 4,500 2,936 2.43
Dial Call Communications, Inc. 0%/12.25% 2004/2/ 22,750 8,645 2.22
Fort Howard Corp. 8.25% 2002 4,500 4,005
Fort Howard Corp. 9.25% 2001 3,750 3,469
Fort Howard Corp. 9.00% 2006 1,250 1,053 2.19
Centennial Cellular Corp. 8.875% 2001 9,500 8,408 2.16
Riverwood International Corp. 10.75% 2000 5,500 5,555
Riverwood International Corp. 11.25% 2002 2,000 2,050
Riverwood International Corp., Series 2, 10.75%
2000 500 505 2.08
PanAmSat, LP 9.75% 2000 5,000 4,850
PanAmSat, LP 0%/11.375% 2003/2/ 4,000 2,640 1.92
Foodmaker, Inc. 9.25% 1999 5,500 4,703
Foodmaker, Inc. 9.75% 2002 3,750 2,756 1.91
MobileMedia 0%/10.50% 2003/2/ 12,750 7,395 1.9
Global Marine, Inc. 12.75% 1999 6,700 7,169 1.84
Videotron Holdings 0%/11.125% 2004/2/ 13,000 6,760 1.73
Century Communications Corp. 9.75% 2002 3,500 3,325
Century Communications Corp. 9.50% 2000 3,500 3,308 1.7
CenCall Communications Corp. 0%/10.125% 2004/2/ 17,250 6,469 1.66
Paging Network, Inc. 11.75% 2002 5,300 5,512
Paging Network, Inc. 8.875% 2006 1,000 805 1.62
Marvel Holdings Inc., Series B, 0% 1998 9,900 6,237 1.6
Bell Cablemedia 0%/11.95% 2004/2/ 12,000 6,180 1.58
Horizon Finance Corp., Series B, 0%/11.375% 2000/2/ 8,500 6,163 1.58
Ralphs Grocery Co. 10.25% 2002 6,350 6,128 1.57
International CableTel Inc. 0%/10.875% 2003/2/ 12,250 6,125 1.57
Dr Pepper Bottling Co. of Texas 10.25% 2000 5,500 5,527 1.42
Star Markets Co., Inc. 13.00% 2004/3/ 5,000 4,950 1.27
MagneTek, Inc. 10.75% 1998 5,000 4,925 1.26
Barnes & Noble, Inc. 11.875% 2003 4,250 4,548 1.17
P.T. Indah Kiat Pulp & Paper Corp. 8.875% 2000/3/ 5,250 4,502 1.16
Dr Pepper/Seven-Up Companies, Inc. 0%/11.50% 2002/2/ 5,465 4,317 1.11
Owens-Illinois, Inc. 11.00% 2003 4,000 4,100 1.05
Canandaigua Wine Co., Inc. 8.75% 2003 4,500 3,960 1.02
Thrifty PayLess, Inc. 11.75% 2003 3,000 2,895
Thrifty PayLess, Inc. 12.25% 2004 units 1,000 1,025 1.01
Pacific Lumber Co. 10.50% 2003 4,000 3,720 0.95
Kloster Cruise Ltd. 13.00% 2003 3,500 3,325 0.85
Stater Bros. Holdings Inc. 11.00% 2001 3,500 3,255 0.83
Four Seasons Hotels Inc. 9.125% 2000/3/ 3,500 3,220 0.83
Cellular, Inc. 0%/11.75% 2003/2/ 4,500 3,038 0.78
Triton Energy Corp. 0%/9.75% 2000/2/ 3,000 2,220
Triton Energy Corp. 0% 1997 1,000 730 0.76
Infinity Broadcasting Corp. 10.375% 2002 2,750 2,750 0.71
Coleman Holdings Inc. 0% 1998 4,000 2,680 0.69
Univision Television Group, Inc. 11.75% 2001 2,500 2,612 0.67
Comcast Corp. 10.25% 2001 2,650 2,571 0.66
Embassy Suites, Inc. 8.75% 2000 2,500 2,313 0.59
WestPoint Stevens Inc. 8.75% 2001 2,500 2,262 0.58
American Media Operations, Inc. 11.625% 2004 2,250 2,258 0.58
Wilrig AS 11.25% 2004 2,500 2,225 0.57
Acme Metals Inc. 0%/13.50% 2004/2/ 3,000 2,018 0.52
CompUSA 9.50% 2000 2,425 2,013 0.52
Tuboscope Corp. 10.75% 2003 2,000 1,960 0.5
Neodata Services, Inc., Series B, 0%/12.00% 2003/2/ 2,500 1,950 0.5
Vons Companies, Inc. 9.625% 2002 2,000 1,940 0.5
American Standard Inc. 0%/10.50% 2005/2/ 3,000 1,890 0.48
MAXXAM Group Inc. 11.25% 2003 2,000 1,860 0.48
Maxus Energy Corp. 9.875% 2002 2,000 1,820 0.47
Plitt Theatres, Inc. 10.875% 2004 1,500 1,410 0.36
Summitt Communications Group, Inc. 10.50% 2005 1,000 1,050 0.27
Tjiwi Kimia International Finance Co. BV 13.25%
2001 1,000 1,031 0.26
Harrah's Jazz Finance Corp. 14.25% 2001 1,000 1,025 0.26
Levitz Furniture Corp. 12.375% 1997 1,000 1,020 0.26
Safeway Inc. 10.00% 2002 1,000 1,010 0.26
PriCellular Wireless Corp. 0.5%/14.00% 2001 /3/,/4/ 1,500 997 0.26
P.T. Indah Kiat International Finance Co. BV,
Series B, 11.875% 2002 1,000 986 0.25
Anchor Glass Container Corp. 10.25% 2002 1,000 970 0.25
AnnTaylor, Inc. 8.75% 2000 1,000 940 0.24
Rykoff-Sexton, Inc. 8.875% 2003 1,000 915 0.23
Haynes International 11.25% 1998 1,000 890 0.23
P.T. Inti Indorayon Utama 9.125% 2000 1,000 862 0.22
Toll Corp. 9.50% 2003 1,000 855 0.22
Payless Cashways, Inc. 9.125% 2003 750 675 0.17
Primark Corp. 8.75% 2000 700 644 0.17
Jones Intercable, Inc. 11.50% 2004 500 525 0.13
Storer Communications, Inc. 10.00% 2003 134 127 0.03
U.S. TREASURY OBLIGATIONS - 5.34%
7.75% 2001 8,000 7,979 2.05
11.625% 2004 4,600 5,744 1.47
8.50% 2000 5,000 5,161 1.32
6.875% 1999 2,000 1,929 0.5
INDEPENDENT POWER PRODUCERS - 2.14%
Midland Cogeneration Venture LP 10.33% 2002 8,800 8,359 2.14
GOVERNMENTS (EXCLUDING U.S. GOVERNMENT) - 1.83%
Republic of Argentina, 4.25% Eurobonds, Series L,
2023 /4/ 8,000 3,610 0.93
United Mexican State Government 6.25% Eurobonds,
Series B, 2019 3,000 1,920
United Mexican State Government 6.25% Eurobonds,
Series A, 2019 2,500 1,600 0.9
TRANSPORTATION - 1.24%
TNT (USA) Inc. 11.50% 2004 3,000 3,000 0.77
Viking Star Shipping Inc. 9.625% 2003 2,000 1,840 0.47
GAS UTILITIES - 0.76%
Transco Energy Co. 9.625% 2000 2,000 1,970
Transco Energy Co. 9.125% 1998 1,000 985 0.76
COLLATERALIZED MORTGAGE OBLIGATIONS
(PRIVATELY ORIGINATED)/5/ - 0.02%
Collateralized Mortgage Obligation Trust 21-Z
8.45% 2017 73 65 0.02
-------- -------
TOTAL BONDS & NOTES (cost: $405,045,000) 362,461 92.96
-------- --------
Short-Term Securities
CORPORATE SHORT-TERM NOTES - 5.50%
Xerox Corp. 5.73% due 1/12/95 9,000 8,939 2.29
Associates Corp. of North America 5.72% due
12/1/94 6,500 6,499 1.67
National Rural Utilities Cooperative Finance Corp.
4.97% due 12/2/94 6,000 5,998 1.54
-------- -------
TOTAL SHORT-TERM SECURITIES (cost: $21,436,000) 21,436 5.5
-------- -------
TOTAL INVESTMENT SECURITIES (cost: $426,623,000) 384,058 98.5
Excess of money market account, cash and
receivables over payables 5,867 1.5
--------- -------
NET ASSETS $389,925 100.00%
========= =======
</TABLE>
/1/ Non-income-producing security.
/2/ Represents a zero coupon bond which will convert
to a coupon-bearing security at a later date.
/3/ Purchased in a private placement transaction;
resale potential extends to qualified
institutional buyers.
/4/ Coupon rate may change periodically.
/5/ Pass-through security backed by a pool of
mortgages or other loans on which principal
payments are periodically made. Therefore, the
effective maturity of this security is shorter
than the stated maturity.
See Notes to Financial Statements
***************************************************************************
***************************************************************************
***************************************************************************
American Variable Insurance Series
U.S. Government/AAA-Rated Securities Fund
Investment Portfolio, November 30, 1994
- ------------------------------------------------ --------
U.S. TREASURY BONDS 41.84%
CASH 20.26%
FEDERAL AGENCY MORTGAGE-RELATED SECURITIES 13.40%
PRIVATE MORTGAGE & ASSET-BACKED SECURITIES 9.64%
OTHER FEDERAL OBLIGATIONS 5.77%
CORPORATE BONDS 5.29%
DEVELOPMENT AGENCIES & NON-U.S. GOVT. BONDS 3.80%
<TABLE>
<CAPTION>
Principal Market Percent
Amount Value of Net
Bonds & Notes (000) (000) Assets
<S> <C> <C> <C>
- ------------------------------------------------ -------- -------- --------
U.S. TREASURY OBLIGATIONS- 34.63%
8.125% 1998 $33,000 $33,387 7.21%
9.25% 1998 20,000 20,944 4.53
12.00% 2013 13,000 17,142 3.7
8.875% 2000 16,250 17,019 3.68
9.375% 1996 11,500 11,815 2.55
8.75% 2008 10,000 10,400 2.25
8.875% 1997 10,000 10,320 2.23
8.875% 1996 10,000 10,195 2.2
6.50% 1996 10,000 9,850 2.13
10.375% 2009 7,500 8,677 1.87
8.00% 1997 8,000 8,081 1.75
11.75% 2010 5,500 6,895 1.49
8.875% 2017 6,000 6,463 1.4
8.375% 2008 5,000 5,081 1.1
7.25% 1996 5,000 4,991 1.08
8.75% 2000 2,750 2,864 0.62
14.25% 2002 2,000 2,693 0.58
15.75% 2001 1,500 2,127 0.46
13.125% 2001 1,500 1,897 0.41
10.75% 2003 1,250 1,467 0.32
9.00% 1998 1,250 1,298 0.28
FEDERAL AGENCY OBLIGATIONS-MORTGAGE PASS-
THROUGHS/1/-11.08%
Government National Mortgage Assn. 9.50% 2019-2020 5,799 5,955
Government National Mortgage Assn. 8.50% 2022 5,969 5,839
Government National Mortgage Assn. 7.50% 2022-2023 5,438 5,006
Government National Mortgage Assn. 5.00% 2024 5,055 4,684
Government National Mortgage Assn. 4.50% 2024 4,787 4,362
Government National Mortgage Assn. 8.00% 2022 4,056 3,856 7.05
Government National Mortgage Assn. 9.00% 2009-2016 2,138 2,156
Government National Mortgage Assn. 10.50% 2019 580 626
Government National Mortgage Assn. 11.00% 2019 114 122
Government National Mortgage Assn. 12.00% 2012-2014 11 13
Federal National Mortgage Assn. 8.50% 2023 9,190 9,012
Federal National Mortgage Assn. 9.00% 2011-2025 4,991 5,027 3.38
Federal National Mortgage Assn. 7.00% 2018-2023 1,746 1,587
Federal Home Loan Mortgage Corp. 9.00% 2021-2022 2,738 2,755
Federal Home Loan Mortgage Corp. 9.50% 2016 240 247 0.65
Federal Home Loan Mortgage Corp. 12.00% 2010 3 4
FEDERAL AGENCY OBLIGATIONS-OTHER- 5.77%
FNSM Principal STRIPS 0%/7.56% 2001/2/ 15,000 12,225
FNSM Principal STRIPS 0%/8.62% 2022/2/ 10,000 7,088
FNSM Principal STRIPS 0%/7.94% 2001/2/ 5,000 4,150 5.35
FNSM Principal STRIPS 0%/8.25% 2022/2/ 2,000 1,279
Federal National Mortgage Assn. 8.625% 2021 2,000 1,936 0.42
ASSET-BACKED OBLIGATIONS/1/- 4.97%
Standard Credit Card Master Trust 1991-1, Class A,
8.50% 1997 8,000 8,100
Standard Credit Card Master Trust 1991-3, Class A,
8.875% 1999 5,500 5,623 3.35
Standard Credit Card Trust 1990-6, Series A,
9.375% 1998 1,750 1,800
MBNA Credit Card Trust, 1991-A, 7.75% 1998 7,500 7,479 1.62
COLLATERALIZED MORTGAGE OBLIGATIONS
(PRIVATELY ORIGINATED)/1/- 4.67%
GE Capital Mortgage Services, Inc., Series 1994-15,
Class A-10, 6.00% 2009 8,000 6,210 1.34
Prudential Home Mortgage Securities Co., Inc.,
Series 1992-33, Class A-12, 7.50% 2022 5,724 5,556 1.2
CMC Securities Corp. I, Series 1993-E, Class S-9,
6.50% 2008 4,518 3,554 0.77
Residential Funding Mortgage Securities I, Inc.,
Series 1992-43, Class A-3, 7.00% 2022 3,274 3,199 0.69
Nomura Asset Securities, Series 1994-MD1, Class
A-1B, 7.526% 2018/3/ 3,250 3,081 0.67
FINANCIAL- 4.22%
The Trustees of Columbia University in the City of
New York, Series B, 8.65% 2003 3,000 3,050
The Trustees of Columbia University in the City of 1.1
New York, Series B, 8.62% 2001 2,000 2,033
General Electric Capital Corp. 8.70% 2007 2,500 2,527
General Electric Capital Corp. 8.625% 2008 2,000 2,044 0.99
Signal Capital Corp. 9.95% 2006 4,169 4,376 0.94
First Federal Michigan 0% Eurobonds 2005 10,000 4,131 0.89
National Westminster Bancorp Inc. 12.125% 2002 1,256 1,379 0.3
DEVELOPMENTAL AUTHORITIES- 3.06%
International Bank for Reconstruction & Development
7.90% 1998 3,000 2,993
International Bank for Reconstruction & Development
14.90% 1997 1,200 1,371
International Bank for Reconstruction & Development 1.39
9.76% 1998 1,000 1,048
International Bank for Reconstruction & Development
9.77% 1998 1,000 1,044
Inter-American Development Bank 9.50% 1997 4,000 4,154 0.9
European Investment Bank 8.875% 2001 2,000 2,064 0.45
Asian Development Bank 8.00% Eurobonds 1996 1,500 1,507 0.32
COLLATERALIZED MORTGAGE OBLIGATIONS
(FEDERAL AGENCIES)/1/- 2.32%
Federal Home Loan Mortgage Corp., Series 1625,
Class SG, 7.492% 2008/3/4 4,304 2,238
Federal Home Loan Mortgage Corp., Series 1716,
Class A, 6.50% 2009 2,250 1,909
Federal Home Loan Mortgage Corp., Series 1609,
Class IJ, 4.078% 2023/3/4 6,100 1,586
Federal Home Loan Mortgage Corp., Series 1625,
Class SC, 7.492% 2008/3/4 3,150 1,260
Federal Home Loan Mortgage Corp., Series 21, 2.32
Class SE, 8.419%, 2023/3/4 2,896 1,108
Federal Home Loan Mortgage Corp., Series 1585,
Class PL, 5.383% 2023/3/4 3,987 1,066
Federal Home Loan Mortgage Corp., Series 83-B,
Class B-3, 12.50% 2013 882 943
Federal Home Loan Mortgage Corp., Series 1673,
Class SA, 6.769% 2024/3/4 2,000 640
TELEPHONE UTILITIES- 0.94%
Nippon Telegraph & Telephone Corp. 9.50% 1998 3,000 3,130 0.68
BellSouth Savings and Security ESOP Trust 9.125%
2003 1,186 1,216 0.26
GOVERNMENTS (EXCLUDING U.S. GOVERNMENT)- 0.74%
Ontario (Province of) 15.75% 2012 1,700 2,049
Ontario (Province of) 15.25% 2012 1,145 1,393 0.74
INDUSTRIALS- 0.13%
DeBartolo Capital Corp. II 8.00% Euronotes 1996 575 579 0.13
-------- --------
TOTAL BONDS & NOTES (cost: $394,078,000) 368,975 79.74
-------- --------
Short-Term Securities
- ------------------------------------------------
CORPORATE SHORT-TERM NOTES- 19.45%
Ford Motor Credit Co. 5.82% due 1/9/95 14,500 14,406 3.11
U S WEST Communications, Inc. 5.13%-5.48%
due 12/5-12/16/94 12,000 11,980 2.59
AIG Funding Inc. 5.48% due 12/12/94 11,400 11,379 2.46
Commercial Credit Co. 5.15% due 12/7/94 10,200 10,190 2.2
Wal-Mart Stores, Inc. 5.45% due 12/13/94 10,200 10,180 2.2
Associates Corp. of North America 5.72% due 12/1/94 8,600 8,599 1.86
Texaco Inc. 5.25% due 12/14/94 7,500 7,485 1.62
Intel Corp. 5.49% due 12/14/94 6,400 6,386 1.38
J.C. Penney Funding Corp. 5.25% due 12/16/94 5,700 5,687 1.23
National Rural Utilities Cooperative Finance
Corp. 5.15% due 12/12/94 3,200 3,194 0.69
Holiday Inns, Inc. 9.00% due 2/15/95 500 500 0.11
U.S. TREASURY OBLIGATIONS- 0.33%
12.625% due 5/15/95 1,500 1,548 0.33
-------- --------
TOTAL SHORT-TERM SECURITIES (cost: $91,755,000) 91,534 19.78
-------- --------
TOTAL INVESTMENT SECURITIES (cost: $485,833,000) 460,509 99.52
Excess of money market account, cash and receivables
over payables 2,228 0.48
-------- --------
NET ASSETS $462,737 100.00%
======== ========
</TABLE>
/1/ Pass-through securities backed by a pool of
mortgages or other loans on which principal
payments are periodically made. Therefore, the
effective maturity of these securities is shorter
than the stated maturity.
/2/ Represents a zero coupon bond which will convert
to a coupon-bearing security at a later date.
/3/ Coupon rates may change periodically.
/4/ Represents an inverse floater, which is a floating
rate note whose interest rate moves in the
opposite direction of prevailing interest rates.
See Notes to Financial Statements
***************************************************************************
***************************************************************************
***************************************************************************
AMERICAN VARIABLE INSURANCE SERIES
CASH MANAGEMENT FUND
INVESTMENT PORTFOLIO, NOVEMBER 30, 1994
<TABLE>
<CAPTION>
Principal Market
Amount Value Percent of
Short-Term Securities (000) (000) Net Assets
<S> <C> <C> <C>
CORPORATE SHORT-TERM NOTES-79.10%
Eli Lilly & Co. 5.70% due 1/6/95 $8,000 $7,953 3.60%
Pitney Bowes Credit Corp. 5.15% due 12/15/94 7,800 7,783 3.53
Commercial Credit Co. 4.90% due 12/6/94 7,500 7,494 3.41
Melville Corp. 5.18% due 12/12/94 7,500 7,487 3.39
Ford Motor Credit Co. 5.06% due 12/20/94 7,200 7,180 3.25
Duke Power Co. 5.20% due 12/12/94 7,100 7,088 3.21
U S WEST Communications, Inc. 5.15% due
12/7/94 7,000 6,993 3.17
John Deere Capital Corp. 5.15% due 12/12/94 7,000 6,988 3.17
Union Pacific Corp. 5.02% due 12/16/94 7,000 6,984 3.16
Campbell Soup Co. 5.20% due 12/22/94 7,000 6,978 3.16
Procter & Gamble Co. 5.54% due 1/9/95 6,900 6,857 3.10
Beneficial Corp. 5.00% due 12/9/94 6,700 6,692 3.03
Norfolk Southern Corp. 5.10% due 12/5/94 6,200 6,196 2.81
Motorola, Inc. 4.87% due 12/1/94 6,100 6,099 2.76
American Express Credit Corp. 5.50% due
12/21/94 6,100 6,080 2.76
Texaco Inc. 5.25% due 12/14/94 6,000 5,988 2.71
Xerox Corp. 5.72% due 1/5/95 6,000 5,966 2.70
A.I. Credit Corp. 5.75% due 1/10/95 6,000 5,961 2.70
Intel Corp. 5.49% due 12/14/94 5,200 5,189 2.35
H.J. Heinz Co. 5.70% due 1/19/95 5,200 5,159 2.34
Schering Corp. 5.55% due 12/7/94 5,100 5,094 2.31
Baltimore Gas & Electric Co. 5.50%
due 12/16/94 5,000 4,988 2.26
PACCAR Financial Corp. 5.72% due 1/12/95 5,000 4,966 2.25
Weyerhaeuser Co. 4.99% due 12/7/94 4,600 4,595 2.08
Ameritech Capital Funding Corp. 5.16%
due 12/14/94 4,600 4,591 2.08
Wal-Mart Stores, Inc. 5.45% due 12/13/94 4,400 4,391 1.99
AT&T Corp. 5.48% due 1/4/95 4,100 4,078 1.85
National Rural Utilities Cooperative Finance
Corp. 5.70% due 1/6/95 3,500 3,479 1.57
Vermont American Corp. 5.52% due 12/15/94 2,700 2,694 1.22
Toys "R" Us, Inc. 5.46% due 12/6/94 2,600 2,598 1.18
FEDERAL AGENCY DISCOUNT NOTES-21.39%
Federal Home Loan Mortgage Corp. 4.90%-5.11%
due 12/2-12/5/94 19,085 19,078 8.64
Tennessee Valley Authority 4.90%-4.92%
due 12/2-12/9/94 13,300 13,287 6.02
Federal Home Loan Bank 5.42% due 12/27/94 7,900 7,868 3.56
Federal National Mortgage Assn. 4.93% due
12/5/94 7,000 6,995 3.17
------------- ------------
TOTAL INVESTMENT SECURITIES (cost:
$221,817,000) 221,817 100.49
Excess of payables over cash and
receivables 1,086 0.49
------------- ------------
NET ASSETS $220,731 100.00%
============= ============
</TABLE>
See Notes to Financial Statements
American Variable Insurance Series
Financial Statements
Statement of Assets and Liabilities
at November 30, 1994
<TABLE>
<CAPTION>
Inter- Growth- Asset
Growth national Income Allocation
Fund Fund Fund Fund
- --------------------------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities at market
(cost: $1,709,744; $1,295,609;
$2,648,997; $642,615; $426,623;
$485,833; $221,817
and $7,431,238, respectively) $2,031,956 $1,406,828 $2,788,388 $634,966
Money market account 100 100 100 100
Cash 137 81 100 5
Receivables for-
Sales of investments 15,962 2,182 555 4,961
Sales of fund's shares 2,000 1,736 1,798 153
Dividends and accrued
interest 1,223 4,236 9,204 4,899
---------- ---------- ---------- ----------
2,051,378 1,415,163 2,800,145 645,084
LIABILITIES: ---------- ---------- ---------- ----------
Payables for-
Purchases of investments 22,483 8,592 58,272 7,065
Repurchases of fund's shares 759 689 478 374
Management services 759 798 981 264
Accrued expenses 36 198 48 11
---------- ---------- ---------- ----------
24,037 10,277 59,779 7,714
NET ASSETS AT ---------- ---------- ---------- ----------
NOVEMBER 30, 1994 $2,027,341 $1,404,886 $2,740,366 $637,370
=========== =========== =========== ===========
Shares of beneficial interest
outstanding (unlimited
shares authorized) 63,475,904 105,875,564 108,327,575 56,639,797
Net asset value per share $31.94 $13.27 $25.30 $11.25
</TABLE>
(continued)
<TABLE>
<CAPTION>
U.S. (dollars
Government/ in
High-Yield AAA-Rated Cash thousands)
Bond Securities Management
Fund Fund Fund Total
- --------------------------------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities at market
(cost: $1,709,744; $1,295,609;
$2,648,997; $642,615; $426,623;
$485,833; $221,817
and $7,431,238, respectively) $384,058 $460,509 $221,817 $7,928,522
Money market account 100 100 - 600
Cash 57 68 91 539
Receivables for-
Sales of investments 2,018 3,231 - 28,909
Sales of fund's shares 691 345 168 6,891
Dividends and accrued
interest 6,369 5,616 - 31,547
---------- ---------- ---------- ----------
393,293 469,869 222,076 7,997,008
LIABILITIES: ---------- ---------- ---------- ----------
Payables for-
Purchases of investments 3,092 6,464 - 105,968
Repurchases of fund's shares 104 469 1,259 4,132
Management services 165 191 82 3,240
Accrued expenses 7 8 4 312
---------- ---------- ---------- ----------
3,368 7,132 1,345 113,652
NET ASSETS AT ---------- ---------- ---------- ----------
NOVEMBER 30, 1994 $389,925 $462,737 $220,731 $7,883,356
=========== =========== =========== ===========
Shares of beneficial interest
outstanding (unlimited
shares authorized) 30,260,277 42,851,930 19,895,148
Net asset value per share $12.89 $10.80 $11.09
</TABLE>
See Notes to Financial Statements
American Variable Insurance Series
Financial Statements
Statement of Operations
for the year ended November 30,1994
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Inter- Growth- Asset
Growth national Income Allocation
Fund Fund Fund Fund
---------- ---------- --------- ----------
INVESTMENT INCOME:
Income:
Dividends $13,525 $21,729 $64,111 $13,742
Interest 10,827 12,287 19,812 17,927
---------- ---------- --------- ----------
24,352 34,016 83,923 31,669
---------- ---------- --------- ----------
Expenses:
Management services fee 8,735 8,330 11,517 3,129
Reports to shareholders 120 75 165 39
Registration statement and
prospectus 166 90 228 54
Postage, stationery and
supplies 3 2 4 1
Trustees' fees 44 23 60 14
Auditing and legal fees 31 16 40 12
Custodian fee 187 1,021 245 63
Taxes other than federal
income tax 29 17 39 10
Other expenses 20 38 18 7
---------- ---------- --------- ----------
9,335 9,612 12,316 3,329
---------- ---------- --------- ----------
Net investment income 15,017 24,404 71,607 28,340
---------- ---------- --------- ----------
REALIZED GAIN (LOSS) AND
UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS:
Realized gain (loss) before
non-U.S. taxes 52,610 43,615 112,012 9,504
Non-U.S. taxes - 57 - -
---------- ---------- ---------- -----------
Net realized gain (loss) 52,610 43,558 112,012 9,504
---------- ---------- ---------- -----------
Net change in unrealized
appreciation (depreciation):
Beginning of year 338,142 89,602 245,362 33,961
End of year 322,212 111,219 139,391 (7,649)
---------- ---------- ---------- -----------
Net unrealized appreciation
(depreciation) (15,930) 21,617 (105,971) (41,610)
---------- ---------- ---------- -----------
Net realized gain (loss) and
unrealized appreciation
(depreciation) on investments 36,680 65,175 6,041 (32,106)
---------- ---------- ---------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $51,697 $89,579 $77,648 $(3,766)
========= =========== ========= =========
See Notes to Financial Statements
</TABLE>
(continued)
<TABLE>
<CAPTION>
(dollars
in
U.S. thousands)
High- Government/ Cash
Yield AAA-Rated Manage-
Bond Securities ment
Fund Fund Fund Total
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $1 - - $113,108
Interest 39,401 $35,133 $8,081 143,468
---------- ----------- ---------- ---------
39,402 35,133 8,081 256,576
---------- ----------- ---------- ---------
Expenses:
Management services fee 2,022 2,459 905 37,097
Reports to shareholders 25 31 13 468
Registration statement and
prospectus 36 46 14 634
Postage, stationery and
supplies 1 1 - 12
Trustees' fees 9 12 4 166
Auditing and legal fees 8 10 5 122
Custodian fee 43 50 21 1,630
Taxes other than federal
income tax 7 8 3 113
Other expenses 5 6 4 98
---------- ----------- ---------- ---------
2,156 2,623 969 40,340
---------- ----------- ---------- ---------
Net investment income 37,246 32,510 7,112 216,236
---------- ----------- ---------- ---------
REALIZED GAIN (LOSS) AND
UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS:
Realized gain (loss) before
non-U.S. taxes (27) (2,512) - 215,202
Non-U.S. taxes - - - 57
---------- ----------- ---------- ---------
Net realized gain (loss) (27) (2,512) - 215,145
---------- ----------- ---------- ---------
Net change in unrealized
appreciation (depreciation):
Beginning of year 18,642 28,031 - 753,740
End of year (42,565) (25,324) - 497,284
---------- ----------- ---------- ---------
Net unrealized appreciation
(depreciation) (61,207) (53,355) - (256,456)
---------- ----------- ---------- ---------
Net realized gain (loss) and
unrealized appreciation
(depreciation) on investments (61,234) (55,867) - (41,311)
---------- ----------- ---------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS $(23,988) $(23,357) $7,112 $174,925
========= ========== ========= =========
</TABLE>
See Notes to Financial Statements
American Variable Insurance Series
Financial Statements
Statement of Changes in Net Assets
for the year ended November 30, 1994
<TABLE>
<CAPTION>
Inter- Growth- Asset
Growth national Income Allocation
Fund Fund Fund Fund
- ---------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $15,017 $24,404 $71,607 $28,340
Net realized gain (loss) on investments 52,610 43,558 112,012 9,504
Net unrealized appreciation
(depreciation) on investments (15,930) 21,617 (105,971) (41,610)
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations 51,697 89,579 77,648 (3,766)
----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (14,164) (18,349) (66,032) (27,518)
Distributions from net realized
gain on investments (59,961) (15,818) (83,551) (8,793)
----------- ----------- ----------- -----------
Total dividends and distributions (74,125) (34,167) (149,583) (36,311)
----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold:
14,010,480; 43,466,926; 13,134,545;
7,970,745; 6,513,155; 4,821,568;
28,332,973 and 118,250,392 shares,
respectively 448,195 581,497 337,011 92,993
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
2,334,569; 2,609,004; 5,881,586;
3,143,664; 2,912,711; 3,038,723;
552,766 and 20,473,023 shares,
respectively 74,125 34,167 149,583 36,311
Cost of shares repurchased:
6,590,651; 7,999,702; 4,320,323;
2,577,232; 4,132,973; 6,589,305;
27,641,214 and 59,851,400 shares,
respectively (209,659) (106,589) (110,017) (29,742)
'Net increase in net assets ----------- ----------- ----------- -----------
resulting from capital share
transactions 312,661 509,075 376,577 99,562
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 290,233 564,487 304,642 59,485
NET ASSETS:
Beginning of year 1,737,108 840,399 2,435,724 577,885
----------- ----------- ----------- -----------
End of year (including
undistributed net investment
income: $4,555; $7,823; $21,198;
$7,533; $10,069; $8,556; $2,143
and $61,877, respectively) $2,027,341 $1,404,886 $2,740,366 $637,370
============ ============ ============ ============
See Notes to Financial Statements
</TABLE>
(continued)
<TABLE>
<CAPTION>
(dollars
in
U.S. thousands)
Government/
High-Yield AAA-Rated Cash
Bond Securities Management
Fund Fund Fund Total
- ---------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $37,246 $32,510 $7,112 $216,236
Net realized gain (loss) on investments (27) (2,512) - 215,145
Net unrealized appreciation
(depreciation) on investments (61,207) (53,355) - (256,456)
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from operations (23,988) (23,357) 7,112 174,925
----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (34,372) (31,462) (6,080) (197,977)
Distributions from net realized
gain on investments (6,377) (2,925) - (177,425)
----------- ----------- ----------- -----------
Total dividends and distributions (40,749) (34,387) (6,080) (375,402)
----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold:
14,010,480; 43,466,926; 13,134,545;
7,970,745; 6,513,155; 4,821,568;
28,332,973 and 118,250,392 shares,
respectively 93,032 55,095 313,018 1,920,841
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
2,334,569; 2,609,004; 5,881,586;
3,143,664; 2,912,711; 3,038,723;
552,766 and 20,473,023 shares,
respectively 40,749 34,387 6,080 375,402
Cost of shares repurchased:
6,590,651; 7,999,702; 4,320,323;
2,577,232; 4,132,973; 6,589,305;
27,641,214 and 59,851,400 shares,
respectively (57,974) (74,350) (304,971) (893,302)
'Net increase in net assets ----------- ----------- ----------- -----------
resulting from capital share
transactions 75,807 15,132 14,127 1,402,941
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS 11,070 (42,612) 15,159 1,202,464
NET ASSETS:
Beginning of year 378,855 505,349 205,572 6,680,892
----------- ----------- ----------- -----------
End of year (including
undistributed net investment
income: $4,555; $7,823; $21,198;
$7,533; $10,069; $8,556; $2,143
and $61,877, respectively) $389,925 $462,737 $220,731 $7,883,356
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
American Variable Insurance Series
Financial Statements
Statement of Changes in Net Assets
for the year ended November 30, 1993
<TABLE>
<CAPTION>
Inter- Growth- Asset
Growth national Income Allocation
Fund Fund Fund Fund
- ---------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $13,029 $9,582 $56,147 $21,997
Net realized gain on investments 59,726 15,963 82,772 8,909
Net unrealized appreciation on
investments 144,638 101,559 88,992 14,253
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations 217,393 127,104 227,911 45,159
----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (11,826) (7,893) (52,017) (19,186)
Distributions from net realized
gain on investments (9,216) - (20,243) (4,847)
----------- ----------- ----------- -----------
Total dividends and distributions (21,042) (7,893) (72,260) (24,033)
----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold:
15,769,183; 31,639,630; 22,464,776;
15,165,342; 11,473,807; 9,704,277;
22,204,821 and 128,421,836 shares,
respectively 474,158 363,435 561,027 178,823
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
714,558; 706,625; 2,921,495;
2,063,370; 1,601,297; 2,385,881;
410,128 and 10,803,354 shares,
respectively 21,042 7,893 72,260 24,033
Cost of shares repurchased:
5,439,739; 907,755; 2,285,222;
442,583; 2,024,904; 1,760,218;
21,839,022 and 34,699,443 shares,
respectively (166,884) (9,829) (57,693) (5,256)
'Net increase in net assets ----------- ----------- ----------- -----------
resulting from capital share
transactions 328,316 361,499 575,594 197,600
----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS 524,667 480,710 731,245 218,726
NET ASSETS:
Beginning of year 1,212,441 359,689 1,704,479 359,159
----------- ----------- ----------- -----------
End of year (including
undistributed net investment
income: $3,702; $2,703; $15,623;
$6,711; $7,195; $7,508; $1,111
and $44,553, respectively) $1,737,108 $840,399 $2,435,724 $577,885
============ ============ ============ ============
See Notes to Financial Statements
</TABLE>
(continued)
<TABLE>
<CAPTION>
(dollars
in
U.S. thousands)
Government/
High-Yield AAA-Rated Cash
Bond Securities Management
Fund Fund Fund Total
<S> <C> <C> <C> <C>
- ---------------------------------- ----------- ----------- ----------- -----------
OPERATIONS:
Net investment income $23,370 $28,356 $4,241 $156,722
Net realized gain on investments 6,321 2,831 - 176,522
Net unrealized appreciation on
investments 13,363 18,067 - 380,872
----------- ----------- ----------- -----------
Net increase in net assets resulting
from operations 43,054 49,254 4,241 714,116
----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS PAID TO
SHAREHOLDERS:
Dividends from net investment income (20,359) (26,819) (4,502) (142,602)
Distributions from net realized
gain on investments (2,703) (1,588) - (38,597)
----------- ----------- ----------- -----------
Total dividends and distributions (23,062) (28,407) (4,502) (181,199)
----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold:
15,769,183; 31,639,630; 22,464,776;
15,165,342; 11,473,807; 9,704,277;
22,204,821 and 128,421,836 shares,
respectively 168,457 116,874 244,540 2,107,314
Proceeds from shares issued in
reinvestment of net investment
income dividends and distributions
of net realized gain on investments:
714,558; 706,625; 2,921,495;
2,063,370; 1,601,297; 2,385,881;
410,128 and 10,803,354 shares,
respectively 23,062 28,407 4,502 181,199
Cost of shares repurchased:
5,439,739; 907,755; 2,285,222;
442,583; 2,024,904; 1,760,218;
21,839,022 and 34,699,443 shares,
respectively (29,835) (21,222) (240,582) (531,301)
'Net increase in net assets ----------- ----------- ----------- -----------
resulting from capital share
transactions 161,684 124,059 8,460 1,757,212
----------- ----------- ----------- -----------
TOTAL INCREASE IN NET ASSETS 181,676 144,906 8,199 2,290,129
NET ASSETS:
Beginning of year 197,179 360,443 197,373 4,390,763
----------- ----------- ----------- -----------
End of year (including
undistributed net investment
income: $3,702; $2,703; $15,623;
$6,711; $7,195; $7,508; $1,111
and $44,553, respectively) $378,855 $505,349 $205,572 $6,680,892
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
1. American Variable Insurance Series (the "series") is registered under the
Investment Company Act of 1940 as an open-end, diversified management
investment company with seven different funds. The assets of each fund are
segregated, with each fund, in effect, accounted for separately. The following
paragraphs summarize the significant accounting policies consistently followed
by the series in the preparation of its financial statements:
Equity-type securities are stated at market value based upon closing sales
prices reported on recognized securities exchanges on the last business day of
the year or, for listed securities having no sales reported and for unlisted
securities, upon last-reported bid prices on that date. Bonds and notes are
valued at prices obtained from a bond-pricing service provided by a major
dealer in bonds, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such securities
will be valued at the mean of their representative quoted bid and asked prices
or, if such prices are not available, at the mean of such prices for securities
of comparable maturity, quality, and type. Short-term securities with original
or remaining maturities in excess of 60 days are valued at the mean of their
quoted bid and asked prices. Short-term securities with 60 days or less to
maturity are valued at amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Valuation Committee of the Board
of Trustees.
As is customary in the mutual fund industry, securities transactions are
accounted for on the date the securities are purchased or sold. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend and interest income is reported on the accrual basis.
Discounts on securities purchased are amortized over the life of the respective
securities. Distributions to shareholders are recorded on the ex-dividend
date.
Investment securities and other assets and liabilities denominated in
non-U.S. currencies are recorded in the financial statements after translation
into U.S. dollars utilizing rates of exchange on the last business day of the
year. Purchases and sales of investment securities, income, and expenses are
calculated using the prevailing exchange rate as accrued. The series does not
identify the portion of each amount shown in the series' Statement of
Operations under the caption "Realized Gain (Loss) and Unrealized Appreciation
(Depreciation) on Investments" that arises from changes in non-U.S. currency
exchange rates.
Common expenses incurred by the series are allocated among the funds based
upon relative net assets. In all other respects, expenses are charged to each
fund as incurred on a specific identification basis.
Pursuant to the custodian agreement, each fund within the series receives
credits against its custodian fee for imputed interest on certain balances with
the custodian bank. Custodian fees for the series aggregated $1,630,000 of
which $20,000 was paid by these credits rather than in cash.
During the current year, the series adopted Statement of Position 93-2
"Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies."
Accordingly, book and tax basis differences relating to shareholder
distributions are reclassified to or from paid-in capital. As of December 1,
1993, for the International Fund, the cumulative effect of such differences
totaling $878,000 was reclassified from undistributed net investment income to
undistributed net realized gains. During the year ended November 30, 1994, the
International Fund reclassified $57,000 from undistributed net investment
income to undistributed net realized gains. There were no reclassifications
made for the remaining funds in the series. Net investment income, net
realized gains and net assets were not affected by this change.
2. It is the series' policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision
is required. There was no difference between book and tax realized gains on
securities transactions for the year ended November 30, 1994. During the year
ended November 30, 1994, the U.S. Government/AAA-Rated Securities Fund realized
a capital loss of $1,925,000, which may be used to offset capital gains
realized during subsequent years through November 30, 2002. For book and
federal income tax purposes, the amounts of unrealized appreciation and
depreciation and the cost of portfolio securities at November 30, 1994 were as
follows:
(dollars in thousands)
<TABLE>
<CAPTION>
Growth- Asset
Growth International Income Allocation
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
Unrealized appreciation $407,856 $163,838 $239,448 $26,643
Unrealized depreciation 85,644 52,619 100,057 34,292
Net unrealized appreciation
(depreciation) 322,212 111,219 139,391 (7,649)
Cost of portfolio securities 1,709,744 1,295,609 2,648,997 642,615
</TABLE>
(continued)
<TABLE>
<CAPTION>
U.S.
High-Yield Government/ Cash
Bond AAA-Rated Management
Fund Securities Fund Fund Total
<S> <C> <C> <C> <C>
Unrealized appreciation $1,370 $2,210 - $841,365
Unrealized depreciation 43,935 27,534 - 344,081
Net unrealized appreciation
(depreciation) (42,565) (25,324) - 497,284
Cost of portfolio securities 426,623 485,833 $221,817 7,431,238
</TABLE>
- -----
3. The fees for management services were paid pursuant to an agreement with
Capital Research and Management Company (CRMC), with which certain officers and
Trustees of the series are affiliated. The Investment Advisory and Service
Agreement provides for monthly fees, accrued daily, based on the following
annual rates: Growth Fund - 0.60% of the first $30 million of average net
assets; 0.50% of such assets in excess of $30 million but not exceeding $600
million; 0.45% of such assets in excess of $600 million but not exceeding $1.2
billion; 0.42% of such assets in excess of $1.2 billion but not exceeding $2.0
billion; and 0.37% of such assets in excess of $2.0 billion; International Fund
- - 0.90% of the first $60 million of average net assets; 0.78% of such assets in
excess of $60 million but not exceeding $600 million; and 0.60% of such assets
in excess of $600 million; Growth-Income Fund - 0.60% of the first $30 million
of average net assets; 0.50% of such assets in excess of $30 million but not
exceeding $600 million; 0.45% of such assets in excess of $600 million but not
exceeding $1.5 billion; 0.40% of such assets in excess of $1.5 billion but not
exceeding $2.5 billion; and 0.32% of such assets in excess of $2.5 billion;
Asset Allocation Fund - 0.60% of the first $30 million of average net assets;
0.50% of such assets in excess of $30 million but not exceeding $600 million;
and 0.42% of such assets in excess of $600 million; High-Yield Bond Fund -
0.60% of the first $30 million of average net assets; 0.50% of such assets in
excess of $30 million but not exceeding $600 million; and 0.46% of such assets
in excess of $600 million; U.S. Government/AAA-Rated Securities Fund - 0.60% of
the first $30 million of average net assets; 0.50% of such assets in excess of
$30 million but not exceeding $600 million; and 0.40% of such assets in excess
of $600 million; Cash Management Fund - 0.50% of the first $100 million of
average net assets; 0.42% of such assets in excess of $100 million but not
exceeding $400 million; and 0.38% of such assets in excess of $400 million.
4.
(dollars in thousands)
<TABLE>
<CAPTION>
Growth- Asset
Growth International Income Allocation
Fund Fund Fund Fund
<S> <C> <C> <C> <C>
As of November 30, 1994:
Accumulated undistributed
net realized gain (loss) on
investments $51,164 $43,362 $111,125 $9,449
Paid-in capital 1,649,410 1,242,482 2,468,652 628,037
For the year ended
November 30, 1994:
Purchases of investment
securities* 814,748 594,357 1,049,551 342,994
Sales of investment
securities* 491,089 184,676 629,807 209,047
</TABLE>
(continued)
<TABLE>
<CAPTION>
U.S.
High-Yield Government/ Cash
Bond AAA-Rated Management
Fund Securities Fund Fund Total
<S> <C> <C> <C> <C>
As of November 30, 1994:
Accumulated undistributed
net realized gain (loss) on
investments $(97) $(2,642) - $212,361
Paid-in capital 422,518 482,147 $218,588 7,111,834
For the year ended
November 30, 1994:
Purchases of investment
securities* 202,376 184,296 - 3,188,322
Sales of investment
securities* 144,885 182,518 - 1,842,022
</TABLE>
*Excludes short-term securities
5. Dividend and interest income for the International Fund is recorded net of
non-U.S. taxes paid. For the year ended November 30, 1994, such non-U.S. taxes
were $2,993,000.
PER-SHARE DATA AND RATIOS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Net realized Total Distri-
& unrealized income Dividends butions
Net asset Net gain from from net from
Period value, invest- (loss) on invest- invest- net Total
ended beginning ment invest- ment ment realized distri-
11/30 of period income ments operations income gains butions
- ------ -------- -------- -------- -------- -------- -------- --------
Growth Fund
1990 $22.91 $.54 $(2.27) $(1.73) $(.56) $(.64) $(1.20)
1991 19.98 .41 4.48 4.89 (.47) (.22) (.69)
1992 24.18 .29 4.25 4.54 (.31)/1/ - (.31)
1993 28.41 .25 4.13 4.38 (.24) (.21) (.45)
1994 32.34 .24 .69 .93 (.24) (1.09) (1.33)
International Fund
1990 $10.00 $.11 $(.62) $(.51) $(.04) - $(.04)
1991 9.45 .22 .59 .81 (.24) - (.24)
1992 10.02 .19 (.09) .10 (.21) (.02) (.23)
1993 9.89 .17 2.50 2.67 (.16) - (.16)
1994 12.40 .25 1.04 1.29 (.20) (.22) (.42)
Growth-Income Fund
1990 $21.43 $.82 $(1.91) $(1.09) $(.86) $(.25) $(1.11)
1991 19.23 .75 2.63 3.38 (.79) (.10) (.89)
1992 21.72 .65 2.74 3.39 (.67) (.27) (.94)
1993 24.17 .63 2.12 2.75 (.63) (.28) (.91)
1994 26.01 .68 .14 .82 (.65) (.88) (1.53)
Asset Allocation Fund
1990 $10.17 $.50 $(.75) $(.25) $(.42) - $(.42)
1991 9.50 .53 1.11 1.64 (.55) - (.55)
1992 10.59 .48 .94 1.42 (.49) $(.05) (.54)
1993 11.47 .51 .67 1.18 (.49) (.15) (.64)
1994 12.01 .51 (.57) (.06) (.52) (.18) (.70)
High-Yield Bond Fund
1990 $12.82 $1.33 $(1.02) $.31 $(1.30) - $(1.30)
1991 11.83 1.17 1.78 2.95 (1.25) - (1.25)
1992 13.53 1.10 .62 1.72 (1.08) - (1.08)
1993 14.17 1.09 1.20 2.29 (1.10) $(.19) (1.29)
1994 15.17 1.27 (2.07) (.80) (1.23) (.25) (1.48)
U.S. Government/AAA Rated
Securities Fund
1990 $10.74 $.83 $(.11) $.72 ($.80) - $(.80)
1991 10.66 .77 .58 1.35 (.79) - (.79)
1992 11.22 .75 .32 1.07 (.76) - (.76)
1993 11.53 .74 .68 1.42 (.75) $(.05) (.80)
1994 12.15 .76 (1.30) (.54) (.74) (.07) (.81)
Cash Management Fund
1990 $11.00 $.71 $.13 .84 $(.70) - $(.70)
1991 11.14 .62 .01 .63 (.66) - (.66)
1992 11.11 .35 .01 .36 (.43) - (.43)
1993 11.04 .29 - .29 (.31) - (.31)
1994 11.02 .37 .02 .39 (.32) - (.32)
</TABLE>
(continued)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
PER-SHARE
DATA AND
RATIOS Ratio
Net asset Net assets, Ratio of of net
Period value, end of expenses income to Portfolio
ended end of Total period (in to average average turnover
11/30 period return millions) net assets net assets rate
- --------- --------- --------- --------- --------- --------- ---------
Growth Fund
1990 $19.98 (7.87)% $304 .59% 3.00% 16.8%
1991 24.18 24.90 700 .56 1.94 9.8
1992 28.41 18.90 1,212 .53 1.15 11.2
1993 32.34 15.59 1,737 .50 .86 20.4
1994 31.94 2.92 2,027 .49 .78 29.6
International Fund /2/
1990 $9.45 (5.08)% $66 1.03%/3/ 3.18%/3/ 4.5%
1991 10.02 8.67 197 1.04 2.62 8.2
1992 9.89 .90 360 1.00 2.11 16.7
1993 12.40 27.20 840 .96 1.75 17.7
1994 13.27 10.48 1,405 .80 2.03 19.7
Growth-Income Fund
1990 $19.23 (5.27)% $535 .56% 4.77% 9.7%
1991 21.72 17.83 1,022 .56 3.80 11.1
1992 24.17 15.90 1,704 .52 3.01 13.6
1993 26.01 11.63 2,436 .49 2.66 24.9
1994 25.30 3.21 2,740 .47 2.72 29.3
Asset Allocation Fund
1990 $9.50 (2.34)% $106 .64% 6.70% 14.4%
1991 10.59 17.63 194 .59 5.56 15.1
1992 11.47 13.69 359 .57 4.73 19.7
1993 12.01 10.59 578 .55 4.66 19.0
1994 11.25 (.54) 637 .53 4.55 36.1
High-Yield Bond Fund
1990 $11.83 2.49% $58 .68% 11.17% 22.7%
1991 13.53 26.22 107 .63 9.81 18.1
1992 14.17 13.14 197 .59 8.88 47.4
1993 15.17 17.09 379 .56 8.18 34.1
1994 12.89 (5.71) 390 .54 9.37 38.5
U.S. Government/AAA Rated
Securities Fund
1990 $10.66 7.11% $126 .61% 8.58% 24.0%
1991 11.22 13.24 240 .58 7.91 27.1
1992 11.53 9.83 360 .57 7.08 40.0
1993 12.15 12.65 505 .55 6.42 21.7
1994 10.80 (4.58) 463 .54 6.69 45.2
Cash Management Fund
1990 $11.14 7.91% $143 .60% 7.48% -
1991 11.11 5.84 163 .58 5.65 -
1992 11.04 3.31 197 .53 3.24 -
1993 11.02 2.67 206 .51 2.57 -
1994 11.09 3.59 221 .49 3.60 -
</TABLE>
/1/ Amount includes net realized short-term gains treated as net investment
income
for federal income tax purposes.
/2/ Commenced operations May 1, 1990.
/3/ Annualized
REPORT OF INDEPENDENT ACCOUNTANTS
_________________________________________________________________
To the Board of Trustees and Shareholders of
American Variable Insurance Series
In our opinion, the accompanying statements of assets and liabilities,
including the investment portfolios, and the related statements of operations
and of changes in net assets and the per-share data and ratios present fairly,
in all material respects, the financial position of the Growth Fund, the
International Fund, the Growth-Income Fund, the Asset Allocation Fund, the
High-Yield Bond Fund, the U.S. Government/AAA-Rated Securities Fund and the
Cash Management Fund (constituting the American Variable Insurance Series,
hereafter referred to as the "Series") at November 30, 1994, the results of
each of their operations for the year then ended, the changes in each of their
net assets for each of the two years in the period then ended, and the
per-share data and ratios for each of the four years in the period then ended,
in conformity with generally accepted accounting principles. These financial
statements and per-share data and ratios (hereafter referred to as "financial
statements") are the responsibility of the Series' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included
confirmation of securities at November 30, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above. The financial statements of the American
Variable Insurance Series at and for the year ended November 30, 1990,
including the per-share data and ratios for the yearthen ended, were audited by
other independent accountants whose report dated December 26, 1990 expressed an
unqualified opinion on those statements.
/s/Price Waterhouse LLP
Los Angeles, California
December 30, 1994