AMERICAN VARIABLE INSURANCE SERIES
1997 Annual Report
for the year ended November 30
[cover: photo cube with photos depicting automobile manufacturing plant,
factory, globe, satellite, computer analyst]
Lit. No. VI3-011-0198
FUND RESULTS AT A GLANCE
American Variable Insurance Series(R)
American Variable Insurance Series is the underlying investment vehicle for the
American Legacy III variable annuity.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
TOTAL RETURNS
periods ended 11/30/97 periods ended 12/31/97
5-Year 10-Year 5-Year 10-Year
Average Average Average Average
1-Year Annual Annual 1-Year Annual Annual
Total Compound Compound Total Compound Compound
Return Return Return Return Return Return
Page-
14 Global Growth Fund
(since 4/30/97) +6.28%* - - +8.34%* - -
18 Growth Fund +24.27% +17.74% +17.87% +29.80% +17.79% +16.85%
23 International Fund
(since 5/1/90) +9.25% +14.44% +9.77%* +8.82% +14.32% +9.82%*
30 Growth-Income Fund +22.60% +17.61% +16.10% +25.54% +17.58% +15.27%
36 Asset Allocation Fund
(since 8/1/89) +17.61% +14.46% +12.06%* +20.15% +14.43% +12.07%*
43 Bond Fund
(since 1/2/96) +9.07% +7.62%* - +9.89% +7.73%* -
49 High-Yield Bond Fund +12.17% +10.76% +11.97% +12.09% +10.69% +11.79%
56 U.S. Government/AAA-
Rated Securities Fund +6.20% +6.43% +8.03% +8.21% +6.24% +7.97%
59 Cash Management Fund +4.92% +4.15% +5.16% +4.92% +4.19% +5.15%
</TABLE>
*Reflects return for the lifetime of the fund, which is shorter than the
complete period.
This table shows the investment results for Class 2 shares of the funds in
American Variable Insurance Series. Class 2 shares began operations on April
30, 1997. Results which encompass periods prior to April 30, 1997 assume a
hypothetical investment in Class 1 shares, and include deduction of the 0.25%
annual expense for Class 2 shares under the series' Plan of Distribution. The
variable annuities and life insurance contracts that use the series' funds
contain certain fees and expenses not reflected here. Investment results
through November 30, 1997 are through the close of our most recent fiscal year.
Investment results as of December 31, 1997 are as of the end of the most recent
calendar quarter.
THE FIGURES IN THIS REPORT REFLECT PAST RESULTS AND ARE NOT PREDICTIVE OF
FUTURE RESULTS. UNIT PRICE AND RETURN WILL VARY, SO YOU MAY LOSE MONEY BY
INVESTING IN THE CONTRACT. THE SHORTER THE TIME PERIOD OF YOUR INVESTMENT, THE
GREATER THE POSSIBILITY OF LOSS. UNITS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
INSURED OR GUARANTEED BY, THE U.S. GOVERNMENT, ANY FINANCIAL INSTITUTION, THE
FEDERAL DEPOSIT INSURANCE CORPORATION, OR ANY OTHER AGENCY, ENTITY OR PERSON.
INVESTING OUTSIDE THE UNITED STATES IS SUBJECT TO ADDITIONAL RISKS, SUCH AS
CURRENCY FLUCTUATIONS OR POLITICAL INSTABILITY, WHICH ARE DETAILED IN THE
PROSPECTUS.
ABOUT OUR COVER: Managing American Legacy's nine variable funds requires
flexibility, a broad perspective and a wealth of expertise. Capital Research
and Management Company, the funds' investment adviser, has been meeting the
challenge of finding strength in diversity for more than 65 years.
DEAR INVESTORS:
OUR 1997 FISCAL YEAR - representing the 12 months ended November 30 - coincided
with another strong period in U.S. financial markets. The nation's economic
expansion, now in its seventh year, has been feeding on a heady combination of
productivity gains, rising corporate profits and exceptionally low inflation.
This unusual convergence of strong growth and low inflation buoyed investor
confidence and spurred advances in both stock and bond prices. Standard &
Poor's 500 Composite Index, an unmanaged measure of the largest U.S. stocks,
rose 28.6% with dividends reinvested, marking the third consecutive year of
gains over 20%, the first time this has happened this century. Bond markets
appreciated as well, recovering from weakness in the first half of the year.
The unmanaged Salomon Brothers Broad Investment-Grade Bond Index increased 7.6%
on a reinvested basis.
The investment landscape was far from placid, however. In October, a free-fall
in currency values and stock prices in Southeast Asia caught investors by
surprise. While non-Asian markets have recovered, the crisis has injected
considerable uncertainty into the investment outlook. It remains to be seen how
individual companies with interests in Asia will be affected over the next year
or so.
American Variable Insurance Series, which serves as the underlying investment
vehicle for the American Legacy variable annuities and other insurance
contracts, benefited from the markets' gains. All nine funds in the series rose
in value, some considerably. These gains, along with positive cash flows into
most of the funds, significantly increased the assets of the series. As of
November 30, they stood at more than $17 billion.
Here are brief comments about the investment activities of each of the funds:
THE GLOBAL GROWTH FUND, the series' newest fund option, returned 6.3% since
beginning operations on April 30. We spent the past seven months carefully
selecting attractive securities in a wide variety of markets. As the portfolio
listing beginning on page 14 shows, the fund's holdings include multinational
giants - such as Sony, Time Warner and the recently privatized France Telecom -
as well as companies with a more regional focus, such as Cifra, Mexico's
largest retailer, and Swedish bank ForeningsSparbanken. As is the case with all
of our funds, we invest one security at a time rather than focusing on broad
industries or regions. As a result, the fund is well-diversified. At November
30, it held investments in stocks of 79 companies based in 22 countries. The
U.S. is the largest area of concentration with 29% of net assets. The fund,
which is now almost fully invested, also has sizable concentrations in Europe
(see table).
GLOBAL GROWTH FUND
Where the Fund's Assets Are Invested
(as of 11/30/97)
Percent of Net Assets
The Americas
United States 28.6%
Canada 3.4
Argentina 3.1
Mexico 2.5
Other Americas 1.0
38.6
Europe
United Kingdom 12.7
Germany 3.7
Sweden 3.6
France 3.5
Spain 3.3
Norway 1.7
Italy 1.4
Finland .7
Portugal .5
Russia .5
Other Europe .4
32.0
Asia/Pacific
Japan 7.7
Australia 3.8
New Zealand 1.5
Other Asia/Pacific .8
13.8
Other Countries 3.1
Cash & Equivalents 12.5
Total 100.0%
THE GROWTH FUND was the series' biggest gainer for the year, rising 24.3%. Many
of the fund's largest holdings did extremely well, posting double-, and
occasionally, triple-digit returns. Enthusiasm for information technology
stocks, the fund's largest sector concentration, boosted a wide range of
businesses that supply computer parts and services. They included the fund's
largest holding, Internet service provider America Online (+113%), disk drive
maker Quantum (+99%) and Analog Devices (+74%), which manufactures circuit
boards and other computer components. On a cautionary note, despite the
industry's excellent long-term prospects, we believe a number of factors - the
"Asian flu," stiff pricing competition and manufacturing overcapacity - may
adversely affect some technology stocks over the near term. Elsewhere, media
and entertainment issues rebounded strongly from a somewhat disappointing 1996.
Fund holdings such as Cablevision Systems (+172%), Tele-Communications, Liberty
Media Group (+103%) and Home Shopping Network operator HSN (+80%) have
benefited from recent alliances and attempts to cut costs and provide new
services. At the other end of the spectrum, software producer Oracle (+2%) took
a breather from last year's gains, while Viacom (-7%), the entertainment
conglomerate, is still struggling with management issues arising from recent
acquisitions. On November 30, the fund was invested in stocks of 149 companies.
THE INTERNATIONAL FUND had a return of 9.3% for fiscal 1997. World markets
presented investors with a mixed bag - broad strength in Europe and Latin
America and widespread weakness in Asia. In Europe, a favorable combination of
low interest rates, benign inflation and fiscal restraint bolstered investor
confidence and sent stock prices higher. With nearly half of net assets
invested in Europe (see table opposite), the fund was well-positioned to
benefit from those trends. Most markets posted double-digit gains for the year,
although a strong U.S. dollar trimmed returns somewhat for American investors.
Investments in Latin America also made positive contributions to results. Among
the fund's most successful holdings for the year were Brazilian utility
companies CESP (+92%) and Eletrobras (+49%), Telefonos de Mexico (+63%) and
Panamerican Beverages (+47%). Unfortunately, events in Southeast Asia, where
about 20% of net assets were invested, hobbled the fund's results. Lax lending
policies, a shaky real estate market and an overbuilding of manufacturing
capacity aggravated a currency crisis and stock market rout that began in
Thailand and quickly spread throughout the region. Japan, already struggling
with a contracting economy and unstable financial institutions, saw stock
prices plummet 25% in dollar terms. While many of our Asian investments lost
ground, good stock selection meant that a number of our individual holdings
increased in value during the year, including Rohm (+60%), a Japanese maker of
electronic components, Sony (+33%) and Honda (+23%). Although we are obviously
concerned about the short-term consequences of the turmoil in these markets, we
remain optimistic about long-term prospects for the regions.
THE GROWTH-INCOME FUND had another strong year, rising 22.6%. U.S. stocks
continued their extraordinary upward march, propelled by the economy's solid
footing and sustained infusions of capital from enthusiastic investors.
Corporate profits surged as restructuring activity and increased productivity
more than offset rising wages. Among our largest commitments throughout the
year, we were especially successful with our investments in health care and
banks. Among the latter, we would note Northern Trust (+71%), Norwest (+60%),
Bank of New York (+50%) and BankAmerica (+42%). In health care, outstanding
results were achieved by two of the fund's three largest holdings:
Schering-Plough (+76%) and Pfizer (+62%). The largest single investment in the
fund at both the beginning and end of the year was AT&T (+49%), which enjoyed
substantial appreciation, particularly in the second part of the year. With
continuing cash flow in a robust stock market, the fund's net assets grew to
$6.6 billion, up 25% from a year ago. We used the opportunity to add to many
current holdings, as well as purchase stocks of new companies, including
several in the technology and business services sectors. Overall, the fund is
broadly diversified, with stocks of 200 companies. About 86% of the fund is
held in equities. The portfolio's cash and equivalents position, currently near
14% of net assets, serves as a buying reserve but would also help cushion the
portfolio in a market decline.
THE ASSET ALLOCATION FUND returned 17.6%. The fund, which is managed as though
it constitutes the entire investment program of a prudent investor,
participated in increases in all three major asset classes. The fund's asset
mix on November 30 reflected the relative gains in each market. About 61% was
allocated to stocks, 29% to bonds and the remaining 10% to short-term
securities. The equity portion, which is similar to a conservative growth and
income fund, emphasizes large U.S. corporations with long histories of paying
dividends. In a market run-up driven by blue-chip stocks, most of the fund's
equity holdings posted positive returns for the year; of 54 companies held
throughout the year, only six lost ground. Among the fund's larger holdings,
retailers such as Wal-Mart Stores (+57%), Walgreen (+54%) and Limited (+34%)
benefited from a rise in consumer spending, as did cruise line operator
Carnival (+71%) and other leisure companies. Other sectors, including banking
and health care, also did well. On the fixed-income side, the fund holds a
combination of U.S. corporate and government bonds with an average weighted
maturity of 7.1 years. During the year, declining longer term interest rates
boosted bond prices and contributed to the fund's gains.
INTERNATIONAL FUND
Where the Fund's Assets Are Invested
(as of 11/30/97)
Percent of Net Assets
Europe
United Kingdom 12.3%
France 7.2
Sweden 4.4
Switzerland 4.1
Germany 4.0
Spain 3.7
Italy 2.5
Norway 2.3
Finland 2.1
Netherlands 1.7
Portugal 1.4
Luxembourg 1.0
Russia .9
Greece .5
Other Europe .4
48.5
Asia/Pacific
Japan 11.8
Australia 5.0
Hong Kong 4.8
People's Republic of China 1.3
Philippines 1.0
South Korea .7
Taiwan .7
Indonesia .5
Other Asia/Pacific .1
25.9
The Americas
Canada 5.0
Mexico 4.2
Brazil 3.9
Argentina .5
Peru .5
Other Americas .4
14.5
Other Countries 2.3
Cash & Equivalents 8.8
Total 100.0%
THE BOND FUND increased 9.1% for the fiscal year. The fund is diversified
across a wide spectrum of fixed-income securities, and it participated strongly
in the broad rebound in bond prices during the second half of the year.
Fixed-income investors, concerned about rising inflationary pressures earlier
in the year, were reassured by midsummer that cost increases would remain
subdued, even as the labor market tightened amid rising productivity. U.S.
bonds were further buoyed by sharp stock declines in August and October, which
sent many investors on a "flight to quality" to fixed-income securities. The
Asian crisis also helped push down interest rates in the U.S. and other
developed economies, although it drove up yields significantly in the affected
countries. (Bond prices move in the opposite direction of yields.) The fund has
the flexibility to invest in nearly every type of bond to seek attractive
returns for investors. On November 30, nearly half of the portfolio was
invested in corporate bonds; 30% was held in lower rated instruments, which pay
higher yields to compensate for their higher risk of default. Bonds denominated
in non-U.S. currencies, representing about 5% of net assets, accounted for a
growing proportion of the portfolio. In keeping with its high-quality emphasis,
the fund held about one-quarter of net assets in government-backed bonds and
about 20% in top-rated short-term securities. We are also pleased to report
that this relatively new fund has continued to grow: Net assets during the year
nearly doubled to $144 million.
THE HIGH-YIELD BOND FUND posted a 12.2% gain for the 12 months ended November
30. The market for lower rated securities continued to flourish, charged by
dual currents - robust stock prices, which raised the credit standing of many
corporate issuers, and lower interest rates, which sent investors clamoring for
yield. Increased demand for these bonds has created a certain amount of market
"froth," without regard to company fundamentals. In this environment,
proprietary research is particularly critical, given the higher risks of
high-yield bonds and a lack of knowledge on Wall Street about many issuers. Our
analysts spend considerable time researching each company under consideration
for the fund. We select securities on an issue-by-issue basis, with a focus not
only on yield but also on capital appreciation. The fund continues to emphasize
rapidly growing industries such as networking and wireless communication. It
also invests in companies with relatively stable cash flows, such as forest and
paper businesses (Container Corp. of America), cable television operators
(Cablevision Systems) and health care providers (Integrated Health Services).
At the close of the fiscal year, 78% of net assets was invested in lower rated
issues - Ba and BB or below - with the balance in other bonds, short-term
securities and stocks.
THE U.S. GOVERNMENT/AAA-RATED SECURITIES FUND rose 6.2%. U.S. Treasuries did
particularly well in the rally that pushed bond prices higher in the second
half of the year. With scant evidence of inflation on the horizon, optimistic
investors sent yields on 10-year Treasury bonds down to a low of 5.8% in
October. Although most fixed-income securities benefited from the stream of
positive economic data, Treasuries were further helped by increased demand from
foreign buyers for dollar-denominated investments, a lower federal budget
deficit and the comfort of a government guarantee. The fund seeks attractive
income and preservation of principal from the highest quality bonds, with
investments limited primarily to obligations issued or guaranteed by the U.S.
Treasury and federal agencies. As of November 30, Treasuries accounted for 45%
of net assets. Roughly the same amount, 44%, was held in mortgage- and
asset-backed securities, which helped provide a yield advantage and good total
return during the year. The remainder was invested in high-grade short-term
securities, corporate bonds and other agency obligations.
THE CASH MANAGEMENT FUND had a 4.9% return for the year. The fund, which is
managed for relatively stable value, provided a quiet harbor in the
comparatively stormy seas of stock and bond markets. The Federal Reserve Board
kept a light touch on monetary policy, raising short-term rates only once, in
March, in a pre-emptive strike against inflation. Since then consumer prices
have risen only slightly, and short-term rates have remained relatively flat.
The fund continues to emphasize quality by concentrating its assets in
high-grade commercial paper (short-term loans to major corporations) and
federal agency discount notes (short-term loans to government agencies). All
the money market securities in the portfolio carry the highest credit rating
from Standard & Poor's and Moody's Investors Service. Many investors choose the
fund as a diversification tool in their overall financial programs, while
others use it as a base from which to make regular investments into other
funds.
The series' nine variable funds provide a unique opportunity to pursue a broad
range of investment objectives within a single financial program. In the
article beginning on page 8, we explain how the funds' investment adviser meets
the challenge of managing that diversity.
We look forward to reporting to you again in six months.
Cordially,
/s/ Thomas E. Terry
Thomas E. Terry
Chairman of the Board
American Variable Insurance Series
/s/ James F. Rothenberg
James F. Rothenberg
President
American Variable Insurance Series
January 16, 1998
HOW A $10,000 INVESTMENT HAS GROWN
These charts show the growth of a $10,000 investment over the past 10 years -
or lifetime if shorter than 10 years - of each of the investment portfolios in
American Variable Insurance Series (with the exception of the Cash Management
Fund, which is managed to provide preservation of principal). The tables below
the charts show the average annual compound returns on an investment over
various periods. The funds in American Variable Insurance Series have no sales
charges. However, the variable annuity and life insurance contracts that use
the series' funds contain certain fees and expenses not reflected here.
Investments primarily in stocks
GLOBAL GROWTH FUND
scale adjusted for shorter time period
$11,072 MSCI World Index /1/
$10,628 Global Growth Fund
$10,081 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C>
04/30/97 $10,000 $10,000 $10,000
05/31/97 10,420 9,994 10,619
06/30/97 10,650 10,006 11,150
07/31/97 11,060 10,019 11,666
08/31/97 10,580 10,037 10,887
09/30/97 11,299 10,062 11,480
10/31/97 10,668 10,087 10,878
11/30/97 10,628 10,081 11,072
</TABLE>
Ended Ended
11/30/97 12/31/97
Lifetime +6.28% +8.34%
(total return since 4/30/97)
Investments primarily in stocks
GROWTH FUND
$55,623 S&P 500 Index
$51,769 Growth Fund
$13,995 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C>
S&P Consumer
Growth 500 Price
Date Fund Index Index
11/30/87 10,000 10,000 10,000
11/30/88 12,188 12,332 10,425
11/30/89 16,876 16,136 10,910
11/30/90 15,494 15,557 11,594
11/30/91 19,295 18,731 11,941
11/30/92 22,881 22,202 12,305
11/30/93 26,377 24,441 12,634
11/30/94 27,071 24,687 12,972
11/30/95 36,543 33,832 13,310
11/30/96 41,660 43,267 13,743
11/30/97 51,769 55,623 13,995
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +24.27% +29.80%
Five Years +17.74 +17.79
10 Years +17.87 +16.85
Lifetime +16.17 +16.26
(since 2/8/84)
Investments in both stocks and bonds
ASSET ALLOCATION FUND
$34,975 S&P 500 Index
$25,823 Asset Allocation Fund
$19,874 Salomon Bros BIG Index /3/
$12,982 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Salomon
Asset S&P Consumer Brothers
Allocation 500 Price BIG
Date Fund Index Index Index/3/
8/1/89 10,000 10,000 10,000 10,000
11/30/89 10,162 10,146 10,121 10,233
5/31/90 10,289 10,770 10,386 10,378
11/30/90 9,892 9,782 10,756 11,015
5/31/91 11,483 12,040 10,900 11,690
11/30/91 11,598 11,778 11,077 12,602
5/31/92 12,619 13,236 11,230 13,163
11/30/92 13,145 13,960 11,415 13,749
5/31/93 14,014 14,772 11,592 14,669
11/30/93 14,494 15,368 11,720 15,261
5/31/94 14,407 15,396 11,857 14,803
11/30/94 14,373 15,523 12,034 14,797
5/31/95 16,623 18,503 12,235 16,508
11/30/95 18,555 21,273 12,347 17,432
5/31/96 19,906 23,778 12,588 17,227
11/30/96 21,957 27,205 12,749 18,475
5/31/97 23,589 30,787 12,870 18,652
11/30/97 25,823 34,975 12,982 19,874
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +17.61% +20.15%
Five Years +14.46 +14.43
Lifetime +12.06 +12.07
(since 8/1/89)
Investments primarily in bonds
BOND FUND
scale adjusted for shorter time period
$11,505 Bond Fund
$11,246 Salomon Bros. BIG Index /3/
$10,521 Consumer Price Index
<TABLE>
<CAPTION>
Salomon
Bond Consumer Brothers
Fund Price BIG
Date Index Index/3/
<S> <C> <C> <C>
1/2/96 10,000 10,000 10,000
2/29/96 9,846 10,091 9,897
5/31/96 9,740 10,202 9,748
8/31/96 9,945 10,248 9,886
11/30/96 10,550 10,332 10,454
2/28/97 10,719 10,397 10,413
5/31/97 10,844 10,430 10,554
8/31/97 11,258 10,476 10,875
11/30/97 11,505 10,521 11,246
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +9.07% +9.89%
Lifetime +7.62 +7.73
(since 1/2/96)
Investments primarily in stocks
INTERNATIONAL FUND
$20,284 International Fund
$16,483 MSCI EAFE Index /2/
$12,529 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C>
International MSCI Consumer
Fund EAFE Price
Date Index/2/ Index
5/1/90 10,000 10,000 10,000
11/30/90 9,477 9,483 10,380
5/31/91 10,261 10,583 10,520
11/30/91 10,270 10,310 10,691
5/31/92 11,388 10,261 10,838
11/30/92 10,333 9,508 11,016
5/31/93 11,712 11,986 11,187
11/30/93 13,109 11,852 11,311
5/31/94 14,171 13,648 11,443
11/30/94 14,444 13,646 11,614
5/31/95 15,007 14,362 11,808
11/30/95 15,956 14,724 11,916
5/31/96 17,538 15,943 12,149
11/30/96 18,566 16,504 12,304
5/31/97 21,148 17,195 12,421
11/30/97 20,284 16,483 12,529
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +9.25% +8.82%
Five Years +14.44 +14.32
Lifetime +9.77 +9.82
(since 5/1/90)
Investments primarily in stocks
GROWTH-INCOME FUND
$55,623 S&P 500 Index
$44,502 Growth-Income Fund
$13,995 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Growth- S&P Consumer
Income 500 Price
Date Fund Index Index
11/30/87 10,000 10,000 10,000
11/30/88 12,169 12,332 10,425
11/30/89 15,434 16,136 10,910
11/30/90 14,570 15,557 11,594
11/30/91 17,115 18,731 11,941
11/30/92 19,776 22,202 12,305
11/30/93 22,013 24,441 12,634
11/30/94 22,653 24,687 12,972
11/30/95 30,073 33,832 13,310
11/30/96 36,297 43,267 13,743
11/30/97 44,502 55,623 13,995
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +22.60% +25.54%
Five Years +17.61 +17.58
10 Years +16.10 +15.27
Lifetime +15.66 +15.66
(since 2/8/84)
Investments primarily in bonds
HIGH-YIELD BOND FUND
$34,031 Salomon Long-Term High-Yield Index
$30,976 High-Yield Bond Fund
$24,237 Salomon BIG Index /3/
$13,995 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Salomon Salomon
High- Bros. Bros.
Yield Long-Term Consumer BIG
Bond Index Price Index/3/
Date Fund Index
11/30/87 10,000 10,000 10,000 10,000
11/30/88 11,635 11,692 10,425 10,926
11/30/89 12,843 11,667 10,910 12,479
11/30/90 13,107 10,497 11,594 13,433
11/30/91 16,480 15,087 11,941 15,368
11/30/92 18,580 17,981 12,305 16,767
11/30/93 21,683 21,676 12,634 18,611
11/30/94 20,379 20,762 12,972 18,045
11/30/95 24,343 26,574 13,310 21,258
11/30/96 27,615 29,232 13,743 22,530
11/30/97 30,976 34,031 13,995 24,237
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +12.17% +12.09%
Five Years +10.76 +10.69
10 Years +11.97 +11.79
Lifetime +12.57 +12.59
(since 2/8/84)
Investments primarily in bonds
U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
$23,845 Salomon Bros. Treasury/Govt-Sponsored/Mortgage Index
$21,656 US Govt/AAA-Rated Securities Fund
$13,995 Consumer Price Index
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S., Govt./ Salomon Bros.
AAA-Rated Treas/Gov. Consumer
Date Securities Spon./Mortg. Price
Fund Index Index
11/30/87 10,000 10,000 10,000
11/30/88 10,901 10,881 10,425
11/30/89 12,032 12,434 10,910
11/30/90 12,839 13,436 11,594
11/30/91 14,486 15,306 11,941
11/30/92 15,858 16,656 12,305
11/30/93 17,809 18,399 12,634
11/30/94 16,942 17,872 12,972
11/30/95 19,383 10,935 13,310
11/30/96 20,393 22,174 13,743
11/30/97 22,394 23,845 13,995
</TABLE>
Ended Ended
11/30/97 12/31/97
One Year +6.20% +8.21%
Five Years +6.43 +6.24
10 Years +8.03 +7.97
Lifetime +7.90 +7.92
(since 12/1/85)
The indexes are unmanaged and do not reflect sales charges, commissions or
expenses.
Past results are not predictive of future results.
/1/Morgan Stanley Capital International World Index
/2/Morgan Stanley Capital International EAFE(R) (Europe, Australasia, Far East)
Index
/3/Salomon Brothers Broad Investment-Grade (BIG) Bond Index
STRENGTH IN DIVERSITY
[photo cube: factory workers, computer analysts]
A LOOK AT THE MULTIFACETED WORLD OF CAPITAL RESEARCH AND MANAGEMENT COMPANY
Your American Legacy variable annuity contract gives you a wide range of
investment choices. From the growth-oriented International Fund to the Cash
Management Fund, the variable funds cover the investment spectrum. Capital
Research and Management Company (CRMC), investment adviser to all nine of the
variable funds, is well-suited to the task of managing that diversity of
options.
[American Legacy(R) A Variable Annuity]
[Lincoln Life(R)]
[American Funds Distributors(R)]
The very qualities that set your variable annuity apart - diversity, choice and
flexibility - are also the hallmarks of the investment firm that oversees your
financial assets. "Multiple points of view are inherent in every process we
have," notes Jim Rothenberg, president of American Variable Insurance Series
(as the variable funds are known collectively). "They are key ingredients in
our effort to achieve superior long-term returns with low volatility." The
diversity of that effort is evident in all aspects of the Capital organization.
It spans international borders, languages and investment styles.
[sphere with 9 cubes represnting the funds within the Series: Global Growth
Fund, Growth-Income Fund, Growth Fund, High-Yield Bond Fund, Asset Allocation
Fund, International Fund, U.S. Government/AAA-Rated Securities Fund, Bond Fund,
Cash Management Fund]
[Begin sidebar]
A WORLD OF INVESTMENT CHOICES
American Legacy's nine variable funds encompass a broad diversity of
investments - from international stocks to U.S. Treasury bonds. Each fund has a
distinct investment objective. Contractholders may also opt for one of two
fixed accounts managed by The Lincoln National Life Insurance Company, which
issues your contract.
[End sidebar]
GEOGRAPHIC DIVERSITY
Today's economy is truly global. Giant multinational companies do the majority
of their business outside the countries in which they are based. A vast
expansion of economic freedom has opened new markets for consumer goods and
services. Technological innovations have created industries that did not exist
a decade ago. Credit markets are growing as businesses expand capacity to meet
demand.
CRMC has a long history of international investing. Recognizing the growing
importance of a worldwide perspective on financial markets, the Capital
organization set up its first non-U.S. research base in the early 1960s. That
single office in Geneva is now part of an elaborate global intelligence network
of nine research offices in many of the world's major financial centers.
Don O'Neal, a San Francisco-based portfolio counselor for the Global Growth
Fund and Growth Fund, believes that CRMC's geographic reach gives it an
important competitive edge. "No matter where you invest," he says, "the ability
to take a $local look' at global markets lets you be responsive to
opportunities that other investors may have missed."
Today, The Capital Group Companies, of which CRMC is a part, is one of the
largest U.S.-based investors in international assets, according to
Institutional Investor magazine. In fact, nearly every variable fund in
American Legacy has some holdings in securities issued in countries outside the
United States.
While other investment companies have offices around the world, few are as
globally integrated as CRMC. "It's not just the communication that's so
impressive," says Martial Chaillet, a Geneva-based portfolio counselor for the
Global Growth Fund and International Fund. "It's also the process linked to the
communication that makes CRMC so special." Portfolio counselors and analysts
share information at weekly conference calls, and visit companies together so
that people with different responsibilities can contribute their perspectives
to investment decisions. This dynamic helps generate a depth of understanding
that few investment firms can match.
The multiple portfolio counselor system at work:
Research Analysts Portfolio (typically 25% to 30% of assets)
[pie chart divided into four equal parts: research analysts portfolio, Claudia
Huntington, Jim Dontun, Bob O'Donnell]
THE GROWTH-INCOME FUND
[photo: Claudia P. Huntington]
Claudia Huntington:
22 years of investment experience
[photo: Jim Dunton]
Jim Dunton:
36 years of investment experience
[photo: Bob O'Donnell]
Bob O'Donnell:
26 years of investment experience
[Begin sidebar]
A VARIETY OF VIEWPOINTS
The multiple portfolio counselor system accommodates a range of investment
styles. For example, the Growth-Income Fund, the series' largest based on
assets, has three portfolio counselors, with an average of 28 years of
investment experience. Each manages his or her portion as though it were an
entire fund. An additional portion is managed by the fund's research analysts.
[End sidebar]
A RANGE OF PERSPECTIVES
That spectrum of opinions is also at the heart of CRMC's unusual investment
management process: the multiple portfolio counselor system. The assets of each
variable fund are divided among several portfolio counselors, each of whom
manages his or her portion independently. These "generalists" invest in a wide
range of companies and industries. Their investment decisions are part of a
collaborative effort with a group of research analysts - "specialists" who
recommend securities from the particular industries or regions they follow. In
most cases, analysts also manage a segment of a variable fund, bringing their
extensive knowledge directly to bear on the investment process. All investments
are monitored for consistency with the particular objectives and overall
guidelines of each variable fund.
The multiple portfolio counselor system, which CRMC originated in 1958, has a
number of benefits. It encourages independent thinking, accommodates growing
funds and assures continuity if responsibilities change hands. Portfolio
counselors and research analysts have the freedom to act on the ideas they feel
most strongly about. Most importantly, it gives contractholders the benefit of
a range of viewpoints and investment styles.
[photo: stock exchange floor]
Claudia Huntington, who has been with Capital for nearly two decades, was a
research analyst for the Growth-Income Fund for five years before becoming a
portfolio counselor for the fund three years ago. Over the years, she has noted
that some investment styles have been particularly well-suited to relatively
expensive markets, while other investment styles have shone during a downturn.
"CRMC's flexible approach gives contractholders the luxury of not being stuck
with just one investment style," says Claudia. "That's particularly important
for long-term investors, who will probably experience a variety of market
conditions over their financial lifetimes."
A DIVERSITY OF BACKGROUNDS
Of course, an organization is only as good as its people, and CRMC does its
best to attract some of the most talented in the industry. The men and women
who research and manage your investments are part of a diverse group, hailing
from more than 30 countries and speaking more than two dozen languages. This
diversity adds an important multicultural dimension to recognizing global
investment opportunities.
The professionals who oversee your assets have significant investment
experience. The funds' 18 portfolio counselors have been with the Capital
organization for an average of 18 years. Many have witnessed virtually every
type of market, from long upward movements to dramatic one-day declines and
periods of steady erosion. Their maturity provides a critical historical
perspective to the investment process, while the enthusiasm of their younger
colleagues helps invigorate the organization.
[Begin sidebar]
CULTURAL DIVERSITY
Capital's investment professionals hail from many cultural and professional
backgrounds. That diversity helps them understand local business practices
better; at the same time, it brings a global perspective to the investment
process.
[End sidebar]
[map]
Countries of origin of the Capital organization's investment professionals
Argentina
Australia
Belgium
Brazil
Burma (Myanmar)
Canada
Chile
China
Denmark
Egypt
France
Germany
Hong Kong
India
Italy
Japan
Korea
Malaysia
Mexico
New Zealand
Poland
Romania
Singapore
Sri Lanka
Sweden
Switzerland
Taiwan
Turkey
Ukraine
United Kingdom
United States
Vietnam
[End map]
Frequently, CRMC's stock and bond analysts share information about a company
under consideration. "In the high-yield sector, we invest in a lot of
entrepreneurial, world-class companies, many of which do not have publicly
traded stocks," says Susan Tolson, a portfolio counselor for the High-Yield
Bond Fund who works from CRMC's Los Angeles office. "Our global research
network is clearly an advantage. Our fixed-income and equity analysts are able
to have comprehensive dialogues to help find rewarding investment
opportunities."
A BROAD SPECTRUM OF SECURITIES
As you can see by the portfolio listings beginning on page 14, American
Legacy's variable funds encompass a wide range of investments. Some emphasize
stocks or bonds of well-known U.S. corporations. Others invest in securities
issued by countries or companies outside the U.S. Almost all hold a portion in
short-term obligations maturing in under three months. CRMC invests in
thousands of securities - one at a time. All of the funds' portfolios are built
on a company-by-company basis rather than emphasizing particular regions,
countries or industries. This "bottom-up" approach means that CRMC's investment
professionals can focus on investments which they believe are most appropriate
for the funds, and which offer the greatest potential for growth.
It's an approach that requires extensive research. Before purchasing a
security, analysts may spend hundreds of hours meeting with managers,
suppliers, customers and competitors. They will consult with industry
specialists, economists and government officials. Only then - and only if the
price seems reasonable <UNDEF> will they recommend that investment for one of
the variable funds. The scope of CRMC's research effort is virtually
unparalleled in the industry: Last year, the company spent more than $50
million on over 7,500 research visits around the world.
CRMC's research process is part of a constant search for value, another
hallmark of the organization. "To us, value doesn't just mean low
price-earnings multiples," says Don O'Neal. "It means buying something worth
100 cents for meaningfully less than 100 cents." Instead of asking, "Where will
this stock be in three to six months", analysts try to determine, "Where will
this company be in five or ten years?" That test for value applies to every
security they consider.
BOUND BY A COMMON PHILOSOPHY
A global perspective. Multiple viewpoints. Cultural diversity. Meticulous
research. What brings these disparate elements together? All of CRMC's
investment professionals share a common goal: achieving consistently superior
long-term investment results.
"What unifies us as an organization, and what distinguishes CRMC from many
other investment firms," says Jim Rothenberg, "is that we focus on the
fundamentals, and then make investments that reflect informed judgments about
what we think is good for contractholders over the long term." For a lifelong
program like the American Legacy variable annuity, consistency over the long
term can be tremendously reassuring, no matter which investment options you've
chosen.
For use with American Legacy variable annuity contract forms 23591, 25338,
28618, and 28276.
<TABLE>
AMERICAN VARIABLE INSURANCE SERIES GLOBAL GROWTH FUND
Investment Portfolio, November 30, 1997
(Unaudited)
<S> <C> <C> <C>
Where the Fund's Assets Are Invested
Percent of Percent of
Net Assets Net Assets
-----------------------
The Americas 38.63%
Europe 32.01%
Asia/Pacific 13.81%
Other Countries 3.10%
Cash & Equivalent 12.45%
100.00%
Largest Individual Equity Holdings
Zeneca Group 4.73%
Telefonica de Espana 3.28
Telecom Argentina STET-France Telecom 3.11
ForeningsSparbanken 2.96
Rentokil Group 2.29
Bank of Nova Scotia 2.23
Time Warner 2.23
Schlumberger 2.22
Suzuki Motor 2.14
Reuters Holdings 2.02
Market Percent
Number of Value of Net
Stocks (common and preferred) Shares (000) Assets
- ------------------------------------------------------ ----------- --------- ------
TELECOMMUNICATIONS - 13.75%
Telefonica de Espana, SA (American Depositary
Receipts) (Spain) 47900 $ 4,143
Telefonica de Espana, SA 500 14 3.28%
Telecom Argentina STET-France Telecom SA, Class B
(American Depositary Receipts) (Argentina) 128500 3943 3.11
Telecom Italia SpA, nonconvertible shares (Italy) (formerly
STET - Societa Finanziaria Telefonica p.a.) 445000 1748 1.38
AirTouch Communications (USA) (1) 36500 1433 1.13
Mannesmann AG (Germany) 2850 1325 1.05
Orange PLC (United Kingdom) (1) 262000 1103 .87
Cable and Wireless PLC (United Kingdom) 211100 937 .74
France Telecom (France) 19400 712 .56
TELECEL - Comunicacoes Pessoais, SA (Portugal) 6700 612 .48
Telefonos de Mexico, SA de CV, Class L (American Depositary
Receipts) (Mexico) 10800 535 .42
Millicom International Cellular SA (Luxembourg) (1) 14000 522 .41
Compania de Telecomunicaciones de Chile SA (American
Depositary Receipts) (Chile) 15000 406 .32
BUSINESS & PUBLIC SERVICES - 10.26%
Rentokil Group PLC (United Kingdom) 690,800 2,909 2.29
Reuters Holdings PLC (United Kingdom) 226,700 2,556 2.02
America Online, Inc. (USA) (1) 24,500 1,850 1.46
Brambles Industries Ltd. (Australia) 90,200 1,719 1.36
Cie. Generale des Eaux (France) 11,800 1,558 1.23
USA Waste Services, Inc. (USA) (1) 42,000 1,389 1.10
Columbia/HCA Healthcare Corp. (USA) 19,000 561 .44
CUC International Inc. (USA) (1) 16,000 460 .36
HEALTH & PERSONAL CARE - 10.03%
Zeneca Group PLC (United Kingdom) 184960 5901
Zeneca Group PLC (American Depositary Receipts) 1000 96 4.73
Avon Products, Inc. (USA) 42900 2480 1.96
Pfizer Inc (USA) 27650 2012 1.59
Glaxo Wellcome PLC (United Kingdom) 52900 1161 .91
Omnicare, Inc. (USA) 37000 1068 .84
ELECTRONIC COMPONENTS - 7.44%
Rohm Co., Ltd. (Japan) 21000 2071 1.63
Murata Manufacturing Co., Ltd. (Japan) 68000 2038 1.61
Texas Instruments Inc. (USA) 34000 1675 1.32
Micron Technology, Inc. (USA) (1) 57500 1430 1.13
Altera Corp. (USA) (1) 19000 889 .70
Advanced Micro Devices, Inc. (USA)(1) 40,000 873 .69
Kyocera Corp. (Japan) 9500 458 .36
BANKING - 6.17%
ForeningsSparbanken AB (Sweden) (formerly Sparbanken
Sverige AB) 147200 3,745 2.96
Bank of Nova Scotia (Canada) 64500 2,827 2.23
Washington Mutual, Inc. (USA) 18000 1,244 .98
BROADCASTING & PUBLISHING - 5.75%
Time Warner Inc. (USA) 48,500 2,825 2.23
ProSieben Media AG non-voting, preferred shares (Germany) (1) 36,000 1,725 1.36
Viacom Inc., Class B, non-voting shares (USA)(1) 33,000 1,155 .91
TV Azteca, SA de CV (American Depositary Receipts) (Mexico) ( 47,600 985 .78
SOFTBANK CORP. (Japan) 17600 317 .25
Nasionale Pers Beperk (South Africa) 34,800 287 .22
LEISURE & TOURISM - 5.17%
HFS Inc. (USA)(1) 25000 1716 1.35
Village Roadshow Ltd., Class A, preferred
shares (Australia) 866000 1680 1.33
Host Marriott Corp. (USA)(1) 65000 1353 1.07
Walt Disney Co. (USA) 10225 971 .77
Carnival Corp., Class A (USA) 15350 830 .65
AUTOMOBILES - 4.48%
Suzuki Motor Corp. (Japan) 249000 2709 2.14
Bayerische Motoren Werke AG (Germany) 2200 1641 1.29
Chrysler Corp. (USA) 38800 1331 1.05
ENERGY SOURCES - 3.87%
Fletcher Challenge Energy (New Zealand) 467,088 1,899 1.50
Woodside Petroleum Ltd. (Australia) 142,000 1,015 .80
Oryx Energy Co. (USA) (1) 29,000 783 .62
Oil Co. LUKoil (American Depositary Receipts) (Russia) 9,200 706 .55
TOTAL, Class B (American Depositary Receipts) (France) 9,600 505 .40
MERCHANDISING - 3.34%
Consolidated Stores Corp. (USA)(1) 40,000 1,945 1.53
Viking Office Products, Inc. (USA) (1) 55,000 1,275 1.01
Cifra, SA de CV, Class B (American Depositary
Receipts) (Mexico) 485000 1009 .80
DATA PROCESSING & REPRODUCTION - 2.73%
Netscape Communications Corp. (USA)(1) 48300 1376 1.08
Oracle Corp. (USA)(1) 34600 1153 .91
Dassault Systemes SA (France) 29600 787 .62
Ascend Communications, Inc. (USA) (1) 6000 150 .12
ENERGY EQUIPMENT - 2.22%
Schlumberger Ltd. (Netherlands Antilles) 34,200 2,815 2.22
METALS: NONFERROUS - 2.03%
Aluminum Co. of America (USA) 11000 740 .58
Freeport-McMoRan Copper & Gold Inc. (USA) 35000 733 .58
Rio Tinto PLC (United Kingdom) (formerly RTZ Corp.) 46400 560 .45
Inco Ltd. (Canada) 28000 534 .42
APPLIANCES & HOUSEHOLD DURABLES - 1.72%
Sony Corp. (Japan) 25,600 2,184 1.72
MULTI-INDUSTRY - 1.58%
Orkla AS, Class A (Norway) 13,300 1,146 .91
Incentive AB, Class A (Sweden) 9,600 851 .67
ELECTRICAL & ELECTRONICS - 1.51%
Northern Telecom Ltd. (Canada) 11200 1006 .79
Thomson-CSF (France) 31300 905 .72
BEVERAGES & TOBACCO - 0.78%
Fomento Economico Mexicano, SA de CV, Class B (Mexico) 75000 618 .49
Coca-Cola Amatil Ltd. (Australia) 50310 373 .29
MACHINERY & ENGINEERING - 0.78%
Kaerner AS (Norway) 20,000 987 .78
CHEMICALS - 0.69%
BOC Group PLC (United Kingdom) 55,000 877 .69
AEROSPACE & MILITARY - 0.67%
General Motors Corp., Class H (USA) 12,700 851 .67
FINANCIAL SERVICES - 0.66%
Credicorp Ltd. (Peru) 46,000 840 .66
FOOD & HOUSEHOLD PRODUCTS - 0.66%
Raisio Group (Finland) 7,300 839 .66
TEXTILES & APPAREL - 0.43%
Nine West Group Inc. (USA) (1) 20,000 544 .43
MISCELLANEOUS
Other stocks in initial period of acquisition 1046 .83
----------------------
TOTAL STOCKS (cost: $112,505,000) 110980 87.55
----------------------
Principal Market Percent
Amount Value of Net
Short-Term Securities (000) (000) Assets
- ----------------------------------------------------------------------------------- -------
CORPORATE SHORT-TERM NOTES - 9.64%
Bell Atlantic Financial Services, Inc. 5.70% due 1/14/98 $2,500 2,482 1.96
General Mills, Inc. 5.62% due 1/9/98 2,400 2,385 1.88
Sara Lee Corp. 5.53% due 12/4/97 2,300 2,299 1.81
American Express Credit Corp. 5.54% due 12/22/97 1,300 1,296 1.02
Beneficial Corp. 5.70% due 1/12/98 1,300 1,291 1.02
Lucent Technologies Inc. 5.49% due 12/18/97 1,100 1,097 .87
Monsanto Co. 5.48% due 12/4/97 (2) 800 799 .63
Associates Corp. of North America 5.75% due 12/1/97 569 569 .45
FEDERAL AGENCY DISCOUNT NOTES - 2.52%
Freddie Mac 5.43%-5.47% due 12/11-12/15/97 3,200 3,194 2.52
---------------------
TOTAL SHORT-TERM SECURITIES (cost: $15,412,000) 15,412 12.16
---------------------
TOTAL INVESTMENT SECURITIES (cost: $127,917,000) 126,392 99.71
Excess of cash and receivables over payables 370 .29
------------------------
NET ASSETS $126,762 100.00%
======== ========
1 Non-income-producing securities.
2 Purchased in a private placement transaction;
resale to the public may require registration
or sale only to qualified institutional buyers.
See Notes to Financial Statements
Stocks appearing in the portfolio since May 31, 1997
AirTouch Communications
Altera
BOC Group
Cable and Wireless
Credicorp
CUC International
Dassault Systemes
Fletcher Challenge Energy
Fomento Economico Mexicano
France Telecom
Freeport-McMoRan Copper & Gold
General Motors
Glaxo Wellcome
Incentive
Kvaerner
Kyocera
Mannesmann
Micron Technology
Millicom International Cellular
Nine West Group
Oil Co. LUKoil
Orange
Orkla
Oryx Energy
ProSieben Media
Raisio Group
Sony
TELECEL - Comunicacoes Pessoais
Telecomunicaciones de Chile
Telefonos de Mexico
Texas Instruments
Thomson-CSF
Time Warner
TOTAL
TV Azteca
Viking Office Products
Washington Mutual
Stocks eliminated from the portfolio since May 31, 1997
HSBC Holdings
Sybase
U S WEST Media
Waste Management
</TABLE>
<TABLE>
GROWTH FUND
Investment Portfolio November 30, 1997
- ------------------------------------------------------
<S> <C> <C> <C>
STOCKS 89.86%
CASH &
EQUIVALENTS 10.14%
- ------------------------------------------------------
Percent
Of Net
Largest Individual Stocks Assets
- ------------------------------------------------------ -
America Online 5.60%
Time Warner 4.05
Walt Disney 2.80
Viacom 2.51
Tele-Communications, Liberty Media Group 2.22
Tele-Communications, TCI Group 2.10
Texas Instruments 1.97
King World Productions 1.72
Oracle 1.70
Guidant 1.62
Market Percent
Number of Value of Net
Stocks (common and preferred) Shares (000) Assets
- -------------------------------------------- - - -
Broadcasting & Publishing- 17.91%
Time Warner Inc. 3,302,575 $192,375 4.05%
Viacom Inc., Class B (1) 3,400,000 119,000 2.51
Tele-Communications, Inc., Series A, Liberty Media Gro 3,120,137 105,305 2.22
Tele-Communications, Inc., Series A, TCI Group (1) 4,350,000 99,642 2.10
HSN, Inc. (1) 1,485,000 66,268 1.40
News Corp. Ltd., preferred shares (American
Depositary Receipts) (Australia) 1,867,500 36,883
News Corp. Ltd. (American Depositary Receipts) 1,270,000 27,543 1.36
Comcast Corp., Class A, special stock 2,000,000 56,000 1.18
Cox Communications, Inc., Class A (1) 1,400,000 47,513 1.00
BHC Communications, Inc., Class A (1) 286,189 35,917 .76
Jones Intercable, Inc., Class A (1) 1,525,000 21,350 .45
Cablevision Systems Corp., Class A (1) 240,000 19,665 .41
United International Holdings, Inc., Class A (1) 1,180,000 12,390 .26
Adelphia Communications Corp., Class A (1) 393,400 5,704 .12
Jacor Communications, Inc. (1) 100,000 4,375 .09
Business & Public Services- 11.60%
America Online, Inc. (1) 3,520,000 265,760 5.60
Columbia/HCA Healthcare Corp. 1,597,500 47,126 .99
Federal Express Corp. (1) 550,000 36,884 .78
CUC International Inc. (1) 1,061,250 30,511 .64
Electronic Data Systems Corp. 741,700 28,185 .59
USA Waste Services, Inc. (1) 750,000 24,797 .52
Manpower Inc. 700,200 23,544 .50
Waste Management, Inc. 700,628 17,253 .36
Ecolab Inc. 300,000 15,300 .32
Shared Medical Systems Corp. 235,000 15,040 .32
Universal Health Services, Inc., Class B (1) 300,000 13,106 .28
Avery Dennison Corp. 220,000 9,213 .19
APAC Teleservices, Inc. (1) 638,500 8,939 .19
Ceridian Corp. (1) 150,000 6,581 .14
Paychex, Inc. 147,600 6,052 .13
Quorum Health Group, Inc. (1) 73,950 1,775 .04
PacifiCare Health Systems, Inc., Class A (1) 6,323 326 .01
Electronic Components- 10.95%
Texas Instruments Inc. 1,900,000 93,575 1.97
Intel Corp. 800,800 62,162 1.31
Adaptec, Inc. (1) 1,236,000 61,182 1.29
SCI Systems, Inc. (1) 1,000,526 45,837 .97
Analog Devices, Inc. (1) 1,366,666 42,879 .90
LSI Logic Corp. (1) 1,750,000 40,687 .86
ADC Telecommunications, Inc. (1) 605,900 22,532 .47
National Semiconductor Corp. (1) 665,000 22,028 .46
Newbridge Networks Corp. (Canada) (1) 460,000 19,377 .41
Microchip Technology Inc. (1) 500,000 17,500 .37
Quantum Corp. (1) 500,000 13,313 .28
Flextronics International Ltd. (Incorporated in Singap 300,000 12,000 .25
Bay Networks, Inc. (1) 350,000 10,522 .22
Xilinx, Inc. (1) 300,000 10,369 .22
Advanced Micro Devices, Inc. (1) 475,000 10,361 .22
Altera Corp. (1) 200,000 9,362 .20
Rogers Corp. (1) 190,800 7,787 .16
Park Electrochemical Corp. 250,000 6,563 .14
Seagate Technology (1) 200,000 4,537 .10
Actel Corp. (1) 300,000 4,425 .09
Motorola, Inc. 42,000 2,641 .06
Data Processing & Reproduction- 9.87%
Oracle Corp. (1) 2,425,000 80,783 1.70
Netscape Communications Corp. (1) 2,082,900 59,363 1.25
Digital Equipment Corp. (1) 1,000,000 49,250 1.04
Solectron Corp. (1) 1,271,000 46,312 .98
Intuit Inc. (1) 1,193,300 36,023 .76
Computer Associates International, Inc. 630,000 32,799 .69
Silicon Graphics, Inc. (1) 2,420,000 31,762 .67
Sequent Computer Systems, Inc. (1) 1,200,000 27,900 .59
3Com Corp. (1) 730,000 26,462 .56
Lexmark International Group, Inc., Class A (1) 750,000 23,906 .50
Autodesk, Inc. 400,000 15,375 .32
Sybase, Inc. (1) 860,700 12,050 .25
Structural Dynamics Research Corp. (1) 475,000 7,927 .17
Mentor Graphics Corp. (1) 800,000 7,600 .16
Ascend Communications, Inc. (1) 300,000 7,481 .16
Data General Corp. (1) 100,000 1,794 .04
Danka Business Systems PLC (American Depositary Receipts)
(United Kingdom) 45,000 1,654 .03
Leisure & Tourism- 9.12%
Walt Disney Co. 1,400,000 132,912 2.80
King World Productions, Inc. (1) 1,500,000 81,563 1.72
HFS Inc. (1) 900,000 61,762 1.30
Host Marriott Corp. (1) 1,800,000 37,463 .79
Carnival Corp., Class A 650,000 35,141 .74
Mirage Resorts, Inc. (1) 1,100,000 26,125 .55
MGM Grand, Inc. (1) 650,000 25,431 .54
Marriott International, Inc. 250,000 18,109 .38
Harrah's Entertainment, Inc. (1) 700,000 14,044 .30
Health & Personal Care- 4.45%
Guidant Corp. 1,200,000 77,100 1.62
Omnicare, Inc. 1,000,000 28,875 .61
Medtronic, Inc. 377,600 18,030 .38
Forest Laboratories, Inc. (1) 380,000 17,005 .36
Dura Pharmaceuticals, Inc. (1) 300,000 13,162 .28
Sepracor Inc. (1) 300,000 11,063 .23
BioChem Pharma Inc. (Canada) (1) 400,000 10,200 .21
Gillette Co. 95,100 8,779 .18
United States Surgical Corp. 233,200 6,151 .13
Johnson & Johnson 97,600 6,143 .13
Avon Products, Inc. 100,000 5,781 .12
SONUS Pharmaceuticals, Inc. (1) (2) 106,910 4,116 .09
SEQUUS Pharmaceuticals, Inc. (1) 400,000 3,100
SEQUUS Pharmaceuticals, Inc., warrants, expire 4/17/98 40,416 20 .07
Pharmacia & Upjohn, Inc. 36,250 1,223 .03
Alpha-Beta Technology, Inc. (1) 200,000 588 .01
Merchandising- 3.43%
Consolidated Stores Corp. (1) 1,465,625 71,266 1.50
Payless ShoeSource, Inc. (1) 295,000 18,732 .40
Barnes & Noble, Inc. (1) 550,000 17,016 .36
Woolworth Corp. (1) 775,000 16,759 .35
Limited Inc. 575,000 13,836 .29
Lowe's Companies, Inc. 200,000 9,187 .19
Circuit City Stores, Inc. - Circuit City Group 200,000 6,563 .14
Boise Cascade Office Products Corp. (1) 300,000 5,438 .12
Spiegel, Inc., Class A (1) 726,600 3,905 .08
Banking- 2.25%
Washington Mutual, Inc. 440,000 30,415 .64
BankBoston Corp. 290,840 25,921 .55
Norwest Corp. 500,000 18,719 .39
Charter One Financial, Inc. 275,625 16,331 .34
Northern Trust Corp. 250,000 15,562 .33
Energy Sources- 2.10%
Union Texas Petroleum Holdings, Inc. 1,500,000 32,719 .69
Oryx Energy Co. (1) 800,000 21,600 .45
Murphy Oil Corp. 350,000 19,250 .41
Enterprise Oil PLC (United Kingdom) 1,500,000 14,786 .31
Pogo Producing Co. 274,300 8,606 .18
Talisman Energy Inc. (Canada) (1) 100,000 2,953 .06
Telecommunications- 2.06%
Tele-Communications Inc., Series A, TCI Ventures Group 1,875,000 42,422 .89
AirTouch Communications Inc. (1) 1,000,000 39,250 .83
LCI International, Inc. (1) 400,000 11,025 .23
MCI Communications Corp. 120,000 5,272 .11
Transportation: Airlines- 2.03%
Southwest Airlines Co. 2,625,450 64,159 1.35
AMR Corp. (1) 195,000 23,632 .50
Delta Air Lines, Inc. 75,000 8,358 .18
Insurance- 1.67%
EXEL Ltd. (Incorporated in Bermuda) 510,000 31,365 .66
Transatlantic Holdings, Inc. 405,000 28,932 .61
Aetna Inc. 150,000 11,306 .24
Everest Reinsurance Holdings, Inc. 200,000 7,588 .16
Electrical & Electronics- 1.33%
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts) (Sweden) 1,040,000 42,055 .88
Nokia Corp., Class A (American Depositary Receipts) (F 210,000 17,456 .37
NextLevel Systems, Inc. (1) (formerly of General Instr 286,700 3,799 .08
Chemicals- 1.27%
Valspar Corp. 990,400 30,083 .63
Mycogen Corp. (1) 800,000 15,600 .33
Air Products and Chemicals, Inc. 125,000 9,586 .20
Engelhard Corp. 284,400 5,066 .11
Recreation & Other Consumer Products- 1.26%
Mattel, Inc. 1,250,000 50,078 1.05
Midway Games Inc. (1) 368,500 7,416 .16
Electronic Arts (1) 69,000 2,312 .05
Energy Equipment- 1.08%
Reading & Bates Corp. (1) 800,000 30,700 .65
Schlumberger Ltd. (Netherlands Antilles) 250,000 20,578 .43
Financial Services- 0.98%
Fannie Mae (formerly Federal National Mortgage Assn.) 600,000 31,687 .67
Capital One Financial Corp. 200,000 9,063 .19
Freddie Mac (formerly Federal Home Loan Mortgage Corp. 137,000 5,651 .12
Textiles & Apparel- 0.79%
Nine West Group Inc. (1) 905,000 24,605 .52
NIKE, Inc., Class B 175,000 8,520 .18
Liz Claiborne Inc. 86,000 4,321 .09
Beverages & Tobacco - 0.48%
Philip Morris Companies Inc. 355,000 15,443 .32
PepsiCo, Inc. 200,000 7,375 .16
Aerospace & Military- 0.22%
Gulfstream Aerospace Corp. (1) 350,000 10,281 .22
Machinery & Engineering- 0.16%
Thermo Electron Corp. (1) 200000 7,363 .16
Utilities: Electric & Gas- 0.10%
K N Energy, Inc. 100000 4,675 .10
Construction & Housing- 0.09%
Stone & Webster, Inc. 90,000 4,219 .09
Electronic Instruments- 0.05%
ANTEC Corp. (1) 150000 2,288 .05
Real Estate- 0.05%
Security Capital Group Inc., Class B (1) 70100 2,252 .05
Miscellaneous
Other stocks in initial period of acquisition 216,451 4.56
- -
TOTAL STOCKS (cost: $2,936,133,000) 4,264,084 89.86
- -
Principal
Amount
Short-Term Securities (000)
- ------------------------------------------------------ - - -
Corporate Short-Term Notes- 6.52%
J.C. Penney Funding Corp. 5.50%-5.60% due 12/12/97-2/3 $65,000 64,531 1.36
Warner-Lambert Co. 5.50%-5.51% due 12/16/97-2/11/98 (2 61,600 61,116 1.29
E.I. du Pont de Nemours and Co. 5.53%-5.59% due 1/14-1 58,400 57,989 1.22
Procter & Gamble Co. 5.48%-5.57% due 1/6-2/12/98 37,600 37,281 .79
H.J. Heinz Co. 5.55% due 1/8/98 17,400 17,295 .36
Wal-Mart Stores, Inc. 5.49% due 12/1/97 15,800 15,798 .33
National Rural Utilities Cooperative Finance Corp.
5.49%-5.66% due 2/19-3/2/98 14,000 13,813 .29
Monsanto Co. 5.48% 12/8/97 13,700 13,683 .29
Lucent Technologies Inc. 5.50% due 1/5/98 13,000 12,928 .27
General Electric Capital Corp. 5.71% due 2/24/98 9,500 9,367 .20
International Lease Finance Corp. 5.67% due 1/21/98 6,000 5,951 .12
Federal Agency Discount Notes- 3.02%
Fannie Mae 5.44%-5.475% due 1/20-2/5/98 74,100 73,442 1.55
Student Loan Marketing Assn. (formerly Student Loan Marketing Assn.)
5.47% due 1/27/98 36,800 36,470 .77
Freddie Mac 5.39%-5.43% due 12/5-12/24/97 33,300 33,246 .70
- -
TOTAL SHORT-TERM SECURITIES (cost: $452,972,000) 452,910 9.54
- -
TOTAL INVESTMENT SECURITIES (cost: $3,389,105,000) 4,716,994 99.40
Excess of cash and receivables over payables 28,389 .60
- -
NET ASSETS $4,745,383 100.00%
= =
(1) Non-income-producing securities.
(2) Purchased in a private placement transaction; resale to the public
may require registration or sale only to qualified institutional buyers.
See Notes to Financial Statements
- ------------------------------------------------------
Stocks appearing in the portfolio
since May 31, 1997
- ------------------------------------------------------
Aetna
Altera
Avon
BioChem Pharma
Capital One Financial
Cox Communications
Dura Pharmaceuticals
Jacor Communications
K N Energy
Lowe's Companies
Nine West Group
Oryx Energy
Pogo Producing
Quantum
Quorum Health Group
Security Capital Group
Sepracor
Talisman Energy
Thermo Electron
Universal Health Services
Washington Mutual
Woolworth
- ------------------------------------------------------
Stocks eliminated from the portfolio
since May 31, 1997
- ------------------------------------------------------
AccuStaff
Air & Water Technologies
Amway Asia Pacific
Cardinal Health
Commerce Bancshares
CompuServe
Gaylord Entertainment
Kimberly-Clark
Nellcor Puritan Bennett
Oxford Health Plans
Pioneer Hi-Bred International
Republic Industries
Tandem Computers
Trump Hotels & Casino Resorts
U S WEST Media Group
United HealthCare
</TABLE>
<TABLE>
AMERICAN VARIABLE INSURANCE SERIES INTERNATIONAL FUND
Investment Portfolio, November 30, 1997
<S> <C> <C> <C>
Where the Fund's Assets Are Invested
Percent of Percent of
Net Assets Net Assets
-----------------------------------
EUROPE 48.51%
United Kingdom 13.0%
Germany 4.5
Sweden 4.5
Italy 3.8
France 3.6
Spain 3.6
Switzerland 3.6
Netherlands 2.5
Norway 2.0
Finland 1.6
Luxembourg 1.2
Other Europe 1.2
ASIA/PACIFIC 25.87%
Japan 13.8
Hong Kong 6.0
Australia 5.5
South Korea 1.9
Other Asia/Pacific 3.1
THE AMERICAS 14.51%
Canada 5.6
Brazil 4.3
Mexico 3.2
Other Americas 0.8
OTHER COUNTRIES 2.28%
CASH AND EQUIVALENTS 8.83%
TOTAL 100.0%
Largest Individual Equities
Telefonica de Espana 3.32%
Novartis 2.24
Orkla 1.80
Telefonos de Mexico 1.64
France Telecom 1.57
Centrais Eletricas Brasileiras - ELETROBRAS 1.48
Bank of Nova Scotia 1.44
TELECEL - Comunicacoes Pessoais 1.40
Forenings Sparbanken 1.39
Bayerische Motoren Werke 1.35
Market Percent
Number of Value of Net
Stocks (common and preferred) Shares (000) Assets
- -------------------------------------------------------------------------------- ------------- ----------
TELECOMMUNICATIONS - 15.38%
Telefonica de Espana, SA (Spain) 2590000 $74,645
Telefonica de Espana, SA (American Depositary Receipts) 158000 13667 3.32%
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 882000 43659 1.64
France Telecom (France) 1139200 41818 1.57
TELECEL - Comunicacoes Pessoais, SA (Portugal) 406000 37134 1.40
Hong Kong Telecommunications Ltd. (Hong Kong) 14706553 27968 1.05
Telecom Italia Mobile SpA (Italy) 6023000 24298
Telecom Italia Mobile SpA, savings shares 1588800 3472 1.04
Mannesmann AG (Germany) 45000 20928 .79
Koninklijke PTT Nederland NV (Netherlands) 490000 19659 .74
Orange PLC (United Kingdom) (1) 4240000 17856 .67
Telefonica de Argentina SA, Class B (American Depositary
Receipts) (Argentina) 417000 13787 .52
Telecomunicacoes Brasileiras SA, preferred nominative
(American Depositary Receipts) (Brazil) 116000 12107 .46
Telecom Italia SpA, nonconvertible savings shares (Italy) (formerly
STET - Societa Finanziaria Telefonica p.a.) 3060465 12019 .45
TELUS Corp. (Canada) 518600 11164 .42
Philippine Long Distance Telephone Co., convertible preferred
(Global Depositary Receipts) (Philippines) 80000 3890
Philippine Long Distance Telephone Co. (American Depositary Recei 154000 3812
Philippine Long Distance Telephone Co., ordinary shares 135000 3273 .41
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp. (Ind 2108000 4792
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp. .32
(American Depositary Receipts) 164200 3674
Cable and Wireless PLC (United Kingdom) 1900000 8434 .32
Deutsche Telekom AG (Germany) 195100 3951 .15
SK Telecom Co., Ltd. (South Korea) 4871 1553 .06
Videsh Sanchar Nigam Ltd. (Global Depositary Receipts) (India) (2 108600 1439 .05
BANKING - 7.47%
Bank of Nova Scotia (Canada) 874200 38,313 1.44
ForeningsSparbanken AB (Sweden) 1454500 37,004 1.39
Safra Republic Holdings SA (Luxembourg) 253000 25,553 .96
Bank of Scotland (United Kingdom) 3005200 25,515 .96
Australia and New Zealand Banking Group Ltd. (Australia) 2957627 20,210 .76
Lloyds TSB Group PLC (United Kingdom) 1140000 12,988 .49
Westpac Banking Corp. (Australia) 1900000 11,884 .45
Banco de Santander, SA (Spain) 300000 9,068 .34
Sakura Bank, Ltd. (Japan) 1720000 6,004 .23
Toronto-Dominion Bank (Canada) 130000 4,606 .17
Grupo Financiero Banamex Accival, SA de CV, Class B (Mexico)(1) 1130397 2,478
Grupo Financiero Banamex Accival, SA de CV, Class L(1) 92128 191 .10
Fuji Bank, Ltd. (Japan) 470000 2,520 .09
Hanil Bank (South Korea) 804980 1,962 .07
Fuji International Finance (Bermuda) Trust,
convertible preference share units (Japan) 40 453 .02
BROADCASTING & PUBLISHING - 6.95%
CANAL+ (France) 124418 21635 .81
FLEXTECH PLC (United Kingdom) (1) 2,250,000 21,315 .80
ProSieben Media AG (Germany) (1) 400,000 19,170 .72
News Corp. Ltd. (American Depositary Receipts) (Australia) 362000 7851
News Corp. Ltd., preferred shares (American Depositary Receipts) 181000 3575 .57
News Corp. Ltd., preferred shares (United Kingdom) 790115 3830
Pathe (France) 73,000 14,066 .53
Seven Network Ltd. (Australia) 3600000 13108 .49
Metropole Television (France) 106,000 10,338 .39
Mediaset SpA (Italy) 1,967,000 9,720 .37
Grupo Televisa, SA (American Depositary Receipts) (Mexico) (1) 261000 9657 .36
TV Azteca, SA de CV (American Depositary Receipts) (Mexico) (1) 438,100 9,063 .34
Independent Newspapers, PLC (Ireland) 1,221,420 7,153 .27
Nippon Television Network Corp. (Japan) 21000 6772 .25
Television Broadcasts Ltd. (Hong Kong) 2259300 5553 .21
Springer Axel (Germany) 6,329 4,948 .19
Carlton Communications PLC (United Kingdom) 540,000 4,133 .16
Multicanal Participacoes SA (American Depositary Receipts) (Brazi 791,000 3,757 .14
SOFTBANK CORP. (Japan) 206800 3723 .14
Publishing & Broadcasting Ltd. (Australia) 500,000 2,824 .11
Modern Times Group MTG AB, Class B (American Depositary Receipts)
(Sweden) (1) 61,000 2,135
Modern Times Group MTG AB, Class A (1) 101,600 638 .10
MULTI-INDUSTRY - 5.66%
Orkla AS, Class A (Norway) 555000 47836 1.80
Hutchison Whampoa Ltd. (Hong Kong) 5,200,000 34,645 1.30
Siebe PLC (United Kingdom) 920,000 16,724 .63
Imasco Ltd. (Canada) 450,000 16,087 .60
Incentive AB, Class A (Sweden) 106100 9410 .35
Lend Lease Corp. Ltd. (Australia) 452616 9211 .35
Suez Lyonnaise des Eaux (France) 83038 8928 .34
Benpres Holdings Corp. (Global Depositary Receipts) (Philippines) 1,876,000 5,534 .21
Swire Pacific Ltd., Class A (Hong Kong) 450,000 2,253 .08
HEALTH & PERSONAL CARE - 4.97%
Novartis AG (Switzerland) 37,324 59,612 2.24
Sankyo Co., Ltd. (Japan) 912,000 29,051 1.09
AB Astra, Class A (Sweden) 1,613,333 27,990 1.05
Zeneca Group PLC (United Kingdom) 320,000 10,208 .38
Elan Corp., PLC (American Depositary Receipts) (Ireland) (1) 60,400 3,186 .12
SmithKline Beecham PLC (American Depositary Receipts) (United Kin 50,000 2,481 .09
ELECTRICAL & ELECTRONICS - 4.13%
Telefonaktiebolaget LM Ericsson, Class B (Sweden) 804600 32814
Telefonaktiebolaget LM Ericsson, Class B, 4.25% convertible prefe 14,500 83 1.24
Nokia Corp., Class A (Finland) 180000 14485
Nokia Corp., Class K 150000 12043 1.00
Northern Telecom Ltd. (Canada) 230000 20657 .78
Thomson-CSF (France) 560000 16195 .61
Premier Farnell PLC (United Kingdom) 1000000 6811 .26
ABB AB, Class A (Sweden) (formerly ASEA AB) 500000 6376 .24
AUTOMOBILES - 3.96%
Bayerische Motoren Werke AG (Germany) 48000 35810 1.35
Honda Motor Co., Ltd. (Japan) 806,000 29,144 1.10
Volkswagen AG (Germany) 33,900 19,204 .72
Suzuki Motor Corp. (Japan) 1700000 18494 .70
Hyundai Motor Co., preferred shares (Global Depositary Receipts)
(South Korea) 705,000 2,379 .09
BUSINESS & PUBLIC SERVICES - 3.64%
Rentokil Group PLC (United Kingdom) 8,080,000 34,027 1.28
Brambles Industries Ltd. (Australia) 920,182 17,540 .66
Reuters Holdings PLC (United Kingdom) 896,000 10,102 .38
Thames Water PLC (United Kingdom) 475,000 7,152 .27
Vedior NV (Netherlands) 360,000 6,823 .26
Generale des Eaux (France) 42,500 5,613 .21
United Utilities PLC (United Kingdom) 400,000 5,138 .19
Zhejiang Expressway Co. Ltd. (China) 25,000,000 4,593 .17
Havas SA (France) 67,335 4,395 .17
Severn Trent PLC (United Kingdom) 76,287 1,205 .05
MERCHANDISING - 3.36%
Kingfisher PLC (United Kingdom) 2,390,000 32,918 1.24
Cifra, SA de CV, Class C (Mexico) 6000000 11371
Cifra, SA de CV, Class B 1500000 3216
Cifra, SA de CV, Class A 917306 1788 .62
Tesco PLC (United Kingdom) 1,979,302 15,986 .60
Carrefour SA (France) 29,000 15,512 .58
Coles Myer Ltd. (Australia) 1,000,227 4,901 .18
Amway Japan Ltd. (American Depositary Receipts) (Japan) 300,000 2625
Amway Japan Ltd. 65,000 1053 .14
UTILITIES: ELECTRIC & GAS - 3.21%
Centrais Eletricas Brasileiras SA - ELETROBRAS Class B, preferred
nominative (American Depositary Receipts) (Brazil) 1,628,000 39,683 1.48
Hongkong Electric Holdings Ltd. (Hong Kong) 5875000 19875 .75
Cia. Paranaense de Energia-Copel, Class B, preferred nominative
(Brazil) (1) 732873000 10904 .41
Cia. Paranaense de Energia-Copel, ordinary nominative (1) 492941000 5956 .22
Scottish Power PLC (United Kingdom) 661200 5357 .20
CESP - Cia. Energetica de Sao Paulo, preferred nominative
(American Depositary Receipts) (Brazil) (1) 94096 1811
CESP - Cia. Energetica de Sao Paulo, ordinary nominative (1) 8,869,000 475 .09
Cia. Energetica de Minas Gerais - CEMIG (Brazil) 35692000 1480 .06
BEVERAGES & TOBACCO - 3.20%
Coca-Cola Amatil Ltd. (Australia) 2722747 20203 .76
Cia. Cervejaria Brahma, preferred nominative (Brazil) 26,300,000 17,431 .66
Panamerican Beverages, Inc., Class A (Mexico) 486000 16646 .63
South African Breweries Ltd. (South Africa) 593,238 14,535 .55
Hellenic Bottling Co. SA (Greece) 555,220 13,071 .49
San Miguel Corp., Class B (Philippines) 2357000 2959 .11
FOOD & HOUSEHOLD PRODUCTS - 2.89%
Nestle SA (Switzerland) 20936 30796 1.16
Reckitt & Colman PLC (United Kingdom) 1218375 17748 .67
Cadbury Schweppes PLC (United Kingdom) 1,500,000 15,571 .59
Groupe Danone (France) 50,987 8,132 .31
PT Indofood Sukses Makmur (Indonesia) 6518100 4298 .16
ELECTRONIC COMPONENTS - 2.72%
Rohm Co., Ltd. (Japan) 354000 34910 1.31
Hoya Corp. (Japan) 475000 14499 .55
Murata Manufacturing Co., Ltd. (Japan) 420000 12590 .47
Hirose Electric Co., Ltd. (Japan) 91000 5463 .21
Kyocera Corp. (Japan) 99000 4773 .18
ENERGY SOURCES - 2.39%
TOTAL, Class B (France) 156372 16416
TOTAL, Class B, (American Depositary Receipts) 75000 3942 .77
RAO Gazprom (American Depositary Receipts) (Russia) 460000 9867 .37
Oil Cos LUKoil (American Depositary Receipts) (Russia) 124500 9562 .36
ENI SpA (American Depositary Receipts) (Italy) 140000 8129 .31
Elf Aquitaine (France) 40000 4639 .17
Woodside Petroleum Ltd. (Australia) 600000 4287 .16
"Shell" Transport and Trading Co., PLC (United Kingdom) 90000 3752 .14
Imperial Oil Ltd. (Canada) 51200 3043 .11
DATA PROCESSING & REPRODUCTION - 1.91%
Acer Inc. (Taiwan) 9200000 13958
Acer Inc. (Global Depositary Receipts) (1) 308300 2343 .61
Dassault Systemes SA (France) 466000 12388 .47
Fujitsu Ltd. (Japan) 1070000 11975 .45
Olivetti SpA (Italy) (1) 18112000 10165 .38
FINANCIAL SERVICES - 1.65%
Shohkoh Fund & Co., Ltd. (Japan) 109000 30967 1.16
Credicorp Ltd. (Peru) 720000 13140 .49
BUILDING MATERIALS & COMPONENTS - 1.61%
Cemex, SA de CV, ordinary participation certificates (Mexico) 4562700 19729
Cemex, SA de CV, Class A 2321450 10010 1.12
Holderbank Financiere Glaris Ltd. (Switzerland) 15000 13072 .49
APPLIANCES & HOUSEHOLD DURABLES - 1.57%
Sony Corp. (Japan) 340000 29005 1.09
Philips Electronics NV (Netherlands) 195000 12873 .48
Samsung Electronics Co., Ltd. (South Korea) 1,118 40 .00
METALS: NONFERROUS - 1.23%
Alcan Aluminium Ltd. (Canada) 310000 8351 .31
Noranda Inc. (Canada) 400,000 6,728 .25
WMC Ltd. (Australia) 1928134 6148 .23
Teck Corp., Class B (Canada) 300000 4298 .16
Pechiney, Class A (France) 101813 3996 .15
Inco Ltd. (Canada) 180000 3431 .13
RECREATION & OTHER CONSUMER PRODUCTS - 1.15%
Sony Music Entertainment (Japan) Inc. (Japan) 270,000 8,960 .34
Yue Yuen Industrial (Holdings) Ltd. (Hong Kong - Incorporated in 3,600,000 7,871 .30
TAG Heuer International SA (Switzerland) 58,000 5,632 .21
Nintendo Co., Ltd. (Japan) 50,000 5,165 .19
Square Co. Ltd. (Japan) 102,000 2,882 .11
AEROSPACE & MILITARY TECHNOLOGY - 1.12%
Bombardier Inc., Class B (Canada) 793900 16449 .62
British Aerospace PLC (United Kingdom) 490000 13365 .50
INDUSTRIAL COMPONENTS - 1.11%
Minebea Co., Ltd. (Japan) 1000000 11114 .42
Sumitomo Electric Industries, Ltd. (Japan) 820000 10974 .41
Cie. Generale des Etablissements Michelin, Class B (France) 70661 3805 .14
Bridgestone Corp. (Japan) 175000 3794 .14
MISCELLANEOUS MATERIALS & COMMODITIES - 0.94%
English China Clays PLC (United Kingdom) 3168750 13692 .51
De Beers Consolidated Mines Ltd. (South Africa) 345000 7245 .27
SGL Carbon AG (Germany) 25300 3260 .12
Bunzl PLC (United Kingdom) 267700 1028 .04
REAL ESTATE - 0.76%
Cheung Kong (Holdings) Ltd. (Hong Kong) 2427000 17112 .64
Mitsui Fudosan Co., Ltd. (Japan) 300000 3170 .12
INSURANCE - 0.60%
Royal & Sun Alliance Insurance Group PLC (United Kingdom) 1761988 15852 .60
ELECTRONIC INSTRUMENTS - 0.47%
Tokyo Electron Ltd. (Japan) 328000 12553 .47
MACHINERY & ENGINEERING - 0.47%
Valmet Corp. (Finland) 600000 8948 .34
Kawasaki Heavy Industries, Ltd. (Japan) 1400000 3430 .13
ENERGY EQUIPMENT - 0.45%
Petroleum Geo-Services ASA (American Depositary Receipts) (Norway 187200 12039 .45
FOREST PRODUCTS & PAPER - 0.41%
UPM-Kymmene Corp. (Finland) 509590 10945 .41
TRANSPORTATION: SHIPPING - 0.41%
Stolt-Nielsen SA, Class B (American Depositary Receipts)
(Multinational) 327000 7,685 .29
Nippon Yusen KK (Japan) 1000000 3,060 .12
TRANSPORTATION: AIRLINES - 0.39%
China Southern Airlines Co. Ltd., Class H (China) 30206000 8,597 .32
KLM Royal Dutch Airlines (Netherlands) 50000 1,797 .07
GOLD MINES - 0.34%
Ashanti Goldfields Co. Ltd. (Global Depositary Receipts) (Ghana) 508540 3655
Ashanti Goldfields Co. Ltd. (Australia) 392212 2883 .25
Normandy Mining Ltd. (Australia) 2900000 2487 .09
LEISURE & TOURISM - 0.18%
Mandarin Oriental International Ltd. (Singapore) 6911218 4838 .18
CONSTRUCTION & HOUSING - 0.17%
Leighton Holdings Ltd. (Australia) 1163700 4514 .17
MISCELLANEOUS
Other stocks in initial period of acquisition 88029 3.31
------------- -----------
TOTAL STOCKS (cost: $2,119,075,000) 2398571 90.18
------------- -----------
Principal
Amount
Convertible Debentures (000)
- ----------------------------------------------------------------- ------------- ------------- ----------
BROADCASTING & PUBLISHING - 0.31%
United News & Media PLC 6.125% 2003 (1) $4,500 8175 .31
ELECTRONIC COMPONENTS - 0.24%
LG Electronics-LG Semiconduct 0.25% 2007 KW5,000 3550 .13
Acer Peripherals Inc. 1.25% 2006 $2,680 2948 .11
UTILITIES: ELECTRIC & GAS - 0.16%
Korea Electric Power Corp. 5.00% 2001 KW5,000 4388 .16
ENERGY SOURCES - 0.04%
Zhenhai Refining & Chemical Co. Ltd. 3.00% 2003(2) $950 1111 .04
------------- -----------
TOTAL CONVERTIBLE DEBENTURES (cost: $21,151,000) 20,172 .75
------------- --------
TOTAL EQUITY-TYPE SECURITIES (cost: $2,140,226,000) 2,418,743 90.93
------------- --------
Bonds and Notes
- ----------------------------------------------------------------- ------------- ------------- ----------
INDUSTRIALS - 0.24%
RBS Participaco+A294es SA 11.00% 2007 (2) $7,000 6335 .24
------------- -----------
TOTAL BONDS & NOTES (cost: $7,023,000) 6,335 .24
------------- -----------
Principal Market Percent
Amount Value of Net
Short-Term Securities (000) (000) Assets
- ----------------------------------------------------------------- ------------- ------------- -------
CORPORATE SHORT-TERM NOTES - 7.49%
Electricite de France 5.47%-5.64% due 12/11/97-1/20/98 $29,500 29,290 1.10
Svenska Handelsbanken Inc. 5.51%-5.67% due 12/9/97-2/19/98 23,500 23,352 .87
Glaxo Wellcome PLC 5.50% due 12/11/97 (2) 23,000 22,961 .86
Ford Credit Europe PLC 5.55% due 1/9/98 20,000 19,876 .75
Toyota Motor Credit Corp. 5.65% due 1/16/98 20,000 19,855 .75
Caisse d'amortissement de la dette sociale 5.50%-5.60%
due 12/12/97-2/13/98 15,500 15,396 .58
General Electric Capital Corp. 5.80% due 12/1/97 12800 12798 .48
Telstra Corp. Ltd. 5.55% due 1/21/98 12,500 12,398 .47
Lloyds Bank PLC 5.55% due 1/12/98 10,000 9,933 .37
Barclays U.S. Funding Corp. 5.55% due 1/26/98 10000 9911 .37
National Australia Funding (Delaware) Inc. 5.48% due 2/10/98 10000 9885 .37
Deutsche Bank Financial Inc. 5.52% due 1/8/98 7,000 6,958 .26
Rank Xerox Capital (Europe) PLC 5.55% due 1/14/98 7,000 6,950 .26
FEDERAL AGENCY DISCOUNT NOTES - 0.96%
Freddie Mac (formerly Federal Home Loan Mortgage Corp.)
5.39%-5.45% due 12/5-12/11/97 15500 15475 .58
Fannie Mae (formerly Federal National Mortgage Assn.)
5.45% due 12/11/97 10000 9983 .38
CERTIFICATES OF DEPOSIT - 0.41%
Dresdner Bank AG 5.65%-5.68% due 1/9-2/10/98 11000 10997 .41
NON-U.S. CURRENCY - 0.07%
New Taiwanese Dollar NT$57,450 1790 .07
------------- ----------
TOTAL SHORT-TERM SECURITIES (cost: $238,048,000) 237,808 8.93
------------- ----------
TOTAL INVESTMENT SECURITIES (cost: $2,385,297,000) 2,662,886 100.10
Excess of payables over cash and receivables 2,767 .10
------------- -------------
NET ASSETS $2,660,119 100.00%
======== ========
(1) Non-income-producing securities.
(2) Purchased in a private placement transaction; resale to the public may
require registration or sale only to qualified institutional buyers.
See Notes to Financial Statements
Equity-type securities appearing in the portfolio
since May 31, 1997
Acer
Cable and Wireless
Cheung Kong (Holdings)
China Southern Airlines
Coles Myer
Credicorp
Dassault Systemes
Elf Aquitaine
FLEXTECH
ForeningsSparbanken
France Telecom
Generale des Eaux
Hellenic Bottling
Imperial Oil
Incentive
Leighton Holdings
LG Electronics-LG SEMICONDUCT
Metropole Television
Minebea
Modern Times Group
Oil Cos Lukoil
Orange
Petroleum Geo-Services
Premier Farnell
ProSieben Media
Publishing & Broadcasting
RAO Gazprom
Shohkoh Fund & Co.
Springer Axel
Suez Lyonnaise des Eaux
Telefonica de Argentina
TELUS
Thomson-CSF
TV Azteca
United Utilities
Vedior
Zhejiang Expressway
Equity-type securities eliminated from the portfolio
since May 31, 1997
Anglovaal
B.A.T Industries
BEC World
Ciba Specialty Chemicals Holdings
Electrolux
Elsevier
EMI Group
George Weston
Granges
HSBC Holdings
Industriforvaltnings AB Kinnevik
Kawasaki Steel
Korea Electric Power
LVMH Moet Hennessy Louis Vuitton
NTT Data Communications Systems
Pearson
Repsol
Rothmans of Pall Mall (Malaysia)
Royal Bank of Canada
Seat
SmarTone Telecommunications Holdings
Svedala Industri
Telecom Corp. of New Zealand
Telefonica del Peru
Toyota Motor
Unilever
United News & Media
Verenigd Bezit
Volvo
Wolters Kluwer
</TABLE>
<TABLE>
American Variable Insurance Series
GROWTH-INCOME FUND
Investment Portfolio - November 30, 1997
<S> <C> <C> <C>
Equity-Type Securities 86.45%
Cash & Equivalents 13.55%
Percent
of Net
Largest Individual Equities Assets
AT&T 1.82%
Schering-Plough 1.43
Pfizer 1.33
Ultramar Diamond Shamrock 1.28
Valero Energy 1.28
Repsol 1.19
Atlantic Richfield 1.15
Walt Disney 1.14
Potash Corp. of Saskatchewan 1.08
Ameritech 1.06
Market Percent
Number of Value of Net
Stocks (common and preferred) Shares (000) Assets
Energy Sources - 8.95%
Ultramar Diamond Shamrock Corp. 2780400 $84,628 1.28%
Valero Energy Corp. 2688250 84344 1.28
Repsol SA (American Depositary Receipts) (Spain) 1825000 78703 1.19
Atlantic Richfield Co. 930000 75795 1.15
Pennzoil Co. 780900 52028 .80
Texaco Inc. 810,000 45,765 .69
Amoco Corp. 450000 40500 .61
Pioneer Natural Resources Co. 1000000 31938 .48
Murphy Oil Corp. 463200 25476 .40
Elf Aquitaine (American Depositary Receipts) (France) 300000 17175 .26
Kerr-McGee Corp. 225000 14920 .23
Norsk Hydro AS (American Depositary Receipts) (Norway 250000 12953 .20
Phillips Petroleum Co. 250000 12109 .18
Ashland Inc. 200000 9338 .14
Chevron Corp. 50000 4009 .06
Health & Personal Care - 7.81%
Schering-Plough Corp. 1500000 94031 1.43
Pfizer Inc 1200000 87300 1.33
Warner-Lambert Co. 460000 64343 .98
AB Astra, Class A (American Depositary Receipts) (Swe 2600000 44200 .67
Glaxo Wellcome PLC (American Depositary Receipts)
(United Kingdom) 950,000 43,403 .66
Merck & Co., Inc. 425,000 40189 .61
Guidant Corp. 450,000 28,913 .44
Bristol-Myers Squibb Co. 275000 25747 .39
Abbott Laboratories 350,000 22,750 .35
American Home Products Corp. 255500 17853 .27
Avon Products, Inc. 300000 17,344 .26
Johnson & Johnson 250,000 15,734 .24
Kimberly-Clark Corp. 240,000 12,495 .18
Banking - 6.10%
Norwest Corp. 1600000 59900 .91
Chase Manhattan Corp. 319400 34695 .53
BankAmerica Corp. 470800 34368 .52
Marshall & Ilsley Corp. 599,800 31864 .48
KeyCorp 400000 26975 .41
Northern Trust Corp. 400000 24900 .38
First Chicago NBD Corp. 275,500 21558 .33
Bank of New York Co., Inc. 400,000 21500 .33
First Union Corp. 430000 20963 .32
SunTrust Banks, Inc. 280,000 19880 .30
J.P. Morgan & Co. Inc. 150000 17,128 .26
Hibernia Corp., Class A 800000 14500 .22
Huntington Bancshares Inc. 417,890 14208 .22
CoreStates Financial Corp 172800 13,360 .20
Citicorp 100,000 11994 .18
Fleet Financial Group, Inc. 150000 9909 .15
Bank of Tokyo-Mitsubishi, Ltd. (American Depositary
Receipts) (Japan) 600000 8,700 .13
Banc One Corp. 166375 8548 .13
Sakura Bank, Ltd. (American Depositary Receipts) (Jap 200000 6,900 .10
Merchandising - 5.85%
Wal-Mart Stores, Inc. 1,400,000 55,912 .85
Federated Department Stores, Inc. (1) 1200000 54675 .83
Albertson's, Inc. 1218700 54080 .82
J.C. Penney Co., Inc. 717800 46119 .70
Limited Inc. 1494900 35971 .55
Circuit City Stores Inc. - Circuit City Group 1025000 33633 .51
Gap, Inc. 600000 32212 .49
Giant Food Inc., Class A 825,000 27,844 .42
Circuit City Stores Inc. - Carmax Group (1) 1,300,000 15,519 .24
Lowe's Companies, Inc. 250000 11484 .17
Woolworth Corp. (1) 500000 10813 .16
Cardinal Health, Inc., Class A 96700 7325 .11
Business & Public Services - 5.40%
Browning-Ferris Industries, Inc. 1858600 66329 1.01
Electronic Data Systems Corp. 1199500 45581 .69
Hertz Corp., Class A 991800 39114 .59
Waste Management, Inc. 1560628 38430 .58
IKON Office Solutions, Inc. 1000000 30438 .46
Cognizant Corp. 655000 28083 .43
Alexander & Baldwin, Inc. 1,020,000 27,540 .42
Federal Express Corp.(1) 380000 25484 .40
Avery Dennison Corp. 500000 20937 .32
Pitney Bowes Inc. 175000 14711 .22
Manpower Inc. 300,000 10,088 .15
Columbia/HCA Healthcare Corp. 300,000 8,850 .13
Broadcasting & Publishing - 4.88%
Viacom Inc., Class B (1) 1725000 60375 .92
Time Warner Inc. 942,000 54,872 .83
Tele-Communications, Inc., Series A, Liberty
Media Group (1) 1090625 36808 .57
Harte-Hanks Communications, Inc. 922800 31837 .48
News Corp. Ltd. (American Depositary Receipts) (Austr 1100000 23856
News Corp. Ltd., preferred shares (American Depositary
Receipts) 400000 7900 .48
Media General Inc., Class A 636100 27114 .41
E.W. Scripps Co., Class A 630000 26499 .40
Comcast Corp., Class A, special stock 729706 20432 .31
Gannett Co., Inc. 340000 19741 .30
Houston Industries Inc., 7.00% convertible preferred 123300 6843 .10
Chris-Craft Industries, Inc. 104875 5257 .08
Telecommunications- 4.64%
AT&T Corp. 2140000 119573 1.82
Ameritech Corp. 905900 69811 1.06
U S WEST Communications, Inc. 850,000 38,409 .58
AirTouch Communications (1) 549,621 21,573 .33
Telefonica de Espana, SA (American Depositary Receipts)
(Spain) 200,000 17,300 .26
Telefonos de Mexico, SA de CV, Class L
(American Depositary Receipts) (Mexico) 335000 16582 .25
MCI Communications Corp. 350,000 15,378 .23
SBC Communications Inc. 100000 7281 .11
Chemicals - 4.46%
Millennium Chemicals Inc. 2050000 47150 .72
Praxair, Inc. 975400 42857 .65
E.I. du Pont de Nemours and Co. 625,000 37,851 .57
Monsanto Co. 673,000 29,402 .45
Mallinckrodt Inc. 780100 28864 .44
Dow Chemical Co. 250000 24687 .37
Witco Corp. 500000 21563 .33
PPG Industries, Inc. 350000 20278 .31
Lyondell Petrochemical Co. 640000 16280 .25
Imperial Chemical Industries PLC (American
Depositary Receipts) (United Kingdom) 200000 11887 .18
Air Products and Chemicals, Inc. 100000 7669 .11
Engelhard Corp. 284400 5066 .08
Forest Products & Paper - 4.06%
Bowater Inc. 1495000 67088 1.02
Union Camp Corp. 780000 46849 .71
Fort James Corp.
(formerly James River Corp. of Virginia) 869499 34019 .52
Georgia-Pacific Corp. 300000 25612 .39
Weyerhaeuser Co. 450000 23766 .36
International Paper Co. 450000 21347 .32
Rayonier Inc. 425000 20772 .32
Sonoco Products Co. 500000 16406 .25
Westvaco Corp. 187500 6117 .09
Louisiana-Pacific Corp. 200000 4038 .06
Deltic Timber Corp. 46628 1340 .02
Data Processing & Reproduction - 3.46%
Oracle Corp. (1) 1,312,500 43,723 .66
Computer Associates International, Inc. 709,500 36,938 .56
International Business Machines Corp. 325,400 35,652 .54
Xerox Corp. 450,000 34,959 .53
3Com Corp. (1) 900000 32625 .50
Silicon Graphics, Inc. (1) 2,074,300 27,225 .41
Adobe Systems Inc. 400,000 16,800 .26
Machinery & Engineering - 3.14%
Caterpillar Inc. 1310000 62798 .95
Parker Hannifin Corp. 960100 42725 .65
Deere & Co. 716600 39279 .60
Ingersoll-Rand Co. 525000 21459 .33
Crompton & Knowles Corp. 700000 18550 .28
New Holland NV (Netherlands) 625000 15664 .24
Greenfield Capital Trust, 6.00% convertible preferred 118000 6195 .09
Insurance - 2.44%
General Re Corp. 240000 47640 .72
Allstate Corp. 300000 25762 .39
USF&G Corp. 1275000 25739 .39
Liberty Corp. 400000 18000 .27
American General Corp. 320000 17240 .26
Royal & Sun Alliance Insurance Group PLC (United King 1500000 13495 .20
St. Paul Companies, Inc. 120000 9600 .15
Arthur J. Gallagher & Co. 84300 3014 .06
Beverages & Tobacco - 2.31%
Philip Morris Companies Inc. 1,405,000 61,118 .93
Seagram Co. Ltd. (Canada) 1350000 43622 .66
PepsiCo, Inc. 870000 32081 .49
UST Inc. 500000 15437 .23
Aerospace & Military Technology - 2.28%
Boeing Co. 770000 40906 .62
United Technologies Corp. 519,800 38,953 .59
Sundstrand Corp. 500000 25656 .39
General Motors Corp., Class H 370000 24790 .38
Raytheon Co. 350,000 19,578 .30
Utilities: Electric & Gas - 2.18%
Duke Energy Corp. (formerly Duke Power Co.) 625000 32500 .49
DPL Inc. 1000000 26250 .40
Union Electric Co. 500000 19906 .30
Consolidated Edison Co. of New York, Inc. 450000 16988 .26
GPU, Inc. 400000 15800 .24
Williams Companies, Inc. 261000 13947 .21
Scottish Power PLC (American Depositary Receipts)
(United Kingdom) 350000 11550 .18
Edison International 250000 6703 .10
Electronic Components - 1.88%
Intel Corp. 750,000 58,219 .88
Texas Instruments Inc. 700,000 34,475 .52
AMP Inc. 725000 31492 .48
Electrical & Electronics - 1.70%
Nokia Corp., Class A (American Depositary Receipts)
(Finland) 550000 45719 .69
York International Corp. 725000 33576 .51
Lucent Technologies Inc. 232320 18615 .29
Telefonaktiebolaget LM Ericsson, Class B
(American Depositary Receipts) (Sweden) 350000 14153 .21
Multi-Industry - 1.45%
FMC Corp. (1) 448300 32754 .50
Tenneco Inc. 645000 27936 .41
Textron Inc. 340000 20103 .31
AlliedSignal Inc. 400000 14850 .23
Miscellaneous Materials & Commodities - 1.45%
Potash Corp. of Saskatchewan Inc. (Canada) 900000 70819 1.08
Crown Cork & Seal Co., Inc. 500000 24406 .37
Financial Services - 1.43%
Household International, Inc. 350000 44100 .67
FINOVA Group Inc. 360000 16965 .26
Beneficial Corp. 200,000 15,525 .24
Capital One Financial Corp. 300000 13594 .20
Associates First Capital Corp., Class A 60000 3855 .06
Food & Household Products - 1.34%
McCormick & Co. 950000 25175 .38
Unilever NV (New York Registered Shares) (Netherlands 400000 23225 .35
CPC International Inc. 200000 20675 .32
Kellogg Co. 250000 11594 .18
General Mills, Inc. 100000 7400 .11
Leisure & Tourism - 1.33%
Walt Disney Co. 789932 74994 1.14
Host Marriott Corp. (1) 600000 12488 .19
Automobiles - 1.14%
Ford Motor Co. 997100 42875 .65
Chrysler Corp. 500000 17156 .26
General Motors Corp. 250000 15250 .23
Energy Equipment - 1.09%
Western Atlas Inc. (1) 521800 36298 .55
Schlumberger Ltd. (Netherlands Antilles) 270000 22224 .34
Dresser Industries, Inc. 300000 11212 .17
Baker Hughes Inc. 50000 2094 .03
Industrial Components - 1.04%
Goodyear Tire & Rubber Co. 395,000 23,971 .36
Federal-Mogul Corp. 400000 16450 .26
Dana Corp. 231,800 10,837 .16
Cooper Industries, Inc. 179802 9282 .14
Echlin Inc. 250,000 7,922 .12
Transportation: Rail & Road - 0.80%
Union Pacific Corp. 595050 35703 .54
Norfolk Southern Corp. 540,000 17,179 .26
Metals: Nonferrous - 0.72%
Aluminum Co. of America 634800 42690 .64
Alumax Inc. (1) 160000 5030 .08
Textiles & Apparel - 0.54%
VF Corp. 460,000 21,246 .32
NIKE, Inc., Class B 300,000 14,606 .22
Transportation: Airlines - 0.40%
AMR Corp. (1) 162500 19693 .30
Delta Air Lines, Inc. 60000 6686 .10
Recreation & Other Consumer Products - 0.24%
Harley-Davidson Motor Co., Inc. 600000 15863 .24
Metals: Steel - 0.20%
Allegheny Teledyne Inc. 500,000 12,875 .20
Appliances & Household Durables - 0.15%
Rubbermaid Inc. 400000 9700 .15
Miscellaneous
Other stocks in initial period of acquisition 90974 1.38
- -
TOTAL STOCKS (cost:$3,979,482,000) 5,680,744 86.24
- -
Principal
Convertible Debentures Amount Market ValuPercent of
Business & Public Services - 0.21% (000) (000) Net Assets
CUC International Inc., 3.00% convertible debentures $12,000 13530 .21
- -
TOTAL CONVERTIBLE DEBENTURES (cost: $11,977,000) 13530 .21
- -
TOTAL EQUITY-TYPE SECURITIES (cost: $3,991,459,000) 5694274 86.45
- -
Short-Term Securities
Corporate Short-Term Notes - 11.26%
J.C. Penney Funding Corp. 5.50%-5.60% due 12/5/97-2/3 61800 61383 .93
Wal-Mart Stores, Inc. 5.49%-5.50% due 12/1/97 53710 53702 .82
International Lease Finance Corp. 5.48%-5.67%
due 12/3/97-1/21/98 51000 50770 .77
Lucent Technologies Inc. 5.48%-5.50% due 12/4/97-1/5/ 50800 50668 .77
Kimberly-Clark Corp. 5.51%-5.54% due 12/3-12/17/97 (2 50691 50587 .76
Ameritech Capital Funding Corp. 5.48%-5.50%
due 12/9-12/11/97 (2) 49700 49625 .75
H.J. Heinz Co. 5.50%-5.55% due 12/8/97-1/8/98 49100 48958 .74
Procter & Gamble Co. 5.48%-5.60% due 1/12-1/20/98 48000 47660 .72
Duke Energy Corp. 5.50%-5.62% due 12/12/97-1/15/98 42300 42145 .64
National Rural Utilities Cooperative
Finance Corp. 5.49%-5.66% due 2/19-3/2/98 42000 41449 .63
Walt Disney Co. 5.52%-5.58% due 1/2-1/22/98 40800 40541 .62
Xerox Corp. 5.48% due 12/11/97 36000 35940 .55
E.I. du Pont de Nemours and Co. 5.51%-5.53%
due 1/14-1/16/98 33200 32964 .50
Coca-Cola Co. 5.47%-5.53% due 12/16/97-1/13/98 31000 30834 .47
Electronic Data Systems Corp. 5.49% due 12/2/97 (2) 25000 24992 .38
AIG Funding, Inc. 5.49%-5.50% due 12/9-12/10/97 24900 24863 .38
Warner-Lambert Co. 5.50% due 2/11/98 (2) 24400 24118 .37
Monsanto Co. 5.50%-5.68% due 12/8/97-1/6/98 (2) 15200 15157 .23
General Electric Capital Corp. 5.71% due 2/24/98 15250 15037 .23
Federal Agency Discount Notes - 2.04%
Freddie Mac (formerly Federal Home Loan Mortgage Corp.)
5.39%-5.47% due 12/5-12/24/97 89200 89058 1.35
Fannie Mae (formerly Federal National Mortgage Assn.)
5.475% due 1/29/98 46000 45573 .69
- -
TOTAL SHORT-TERM SECURITIES (cost: $876,085,000) 876024 13.30
- -
TOTAL INVESTMENT SECURITIES (cost: $4,867,544,000) 6570298 99.75
Excess of cash and receivables over payables 16,712 .25
- -
NET ASSETS $6,587,010 100.00%
======================
(1) Non-income-producing securities.
(2) Purchased in a private placement transaction;
resale to the public may require registration or
sale only to qualified institutional buyers.
See Notes to Financial Statements
Equity-type securities appearing in the portfolio
since May 31, 1997
Albertson's
Avery Dennison
Avon Products
Bristol-Myers Squibb
Cardinal Health
Computer Associates International
DPL
Glaxo Wellcome
Guidant
Harte-Hanks Communications
Hertz
Houston Industries
Huntington Bancshares
IKON Office Solutions
Kellogg
Kerr-McGee
Lowe's
Marshall & Ilsley
Millennium Chemicals
NIKE
Pioneer Natural Resources
Royal & Sun Alliance Insurance Group
Scottish Power
USF&G
Williams Companies
Equity-type securities eliminated from the portfolio
since May 31, 1997
ACNielsen
Dun & Bradstreet
Eastman Kodak
El Paso Natural Gas
Eli Lilly
Exxon
Great Lakes Chemical
Inco
ITT Industries
Litton Industries
McDermott
New York Times
Newport News Shipbuilding
PacifiCare Health Systems
Philips Electronics
Pioneer Hi-Bred International
Polaroid
Rockwell International
Royal Dutch Petroleum
SAFECO
Sears, Roebuck
Tambrands
TOTAL
Tribune
U S WEST Media
</TABLE>
<TABLE>
Asset Allocation Fund Percent
Investment Portfolio November 30, 1997 of Net
Assets
- --------------------------------------------------------------
<S> <C> <C> <C>
Equity-Type Securities 61.16%
Corporate Bonds 14.80
U.S. Government Bonds 14.18
Non-U.S. Government Bonds .43
Cash & Equivalents 9.43
LARGEST INDIVIDUAL EQUITIES
Pfizer 2.03%
Atlantic Richfield 1.82
Praxair 1.68
DuPont 1.52
Carnival 1.51
Rentokil Group 1.46
Warner-Lambert 1.46
BankAmerica 1.37
PepsiCo 1.34
Royal Dutch Petroleum 1.32
Market Percent
Number Valu of Net
Stocks (common and preferred) Shares (000) Assets
- -------------------------------------------------------------- -------------------
Energy Sources- 8.99%
Atlantic Richfield Co. 320,000 $26,080 1.82%
Royal Dutch Petroleum Co. (New York Registered
Shares) (Netherlands) 360,000 18,968 1.32
Chevron Corp. 225,000 18,042 1.26
Pioneer Natural Resources Co. 475,000 15,170 1.06
Kerr-McGee Corp. 200,000 13,263 .92
Phillips Petroleum Co. 200,000 9,688 .67
Murphy Oil Corp. 175,300 9,641 .67
Ultramar Diamond Shamrock Corp. 300,000 9,131 .64
Amoco Corp. 100,000 9,000 .63
Chemicals- 6.87%
Praxair, Inc. 550000 24,166 1.68
E.I. du Pont de Nemours and Co. 360000 21,803 1.52
Air Products and Chemicals, Inc. 210000 16,104 1.12
Millennium Chemicals Inc. 485100 11,157 .78
Mallinckrodt Inc. 250000 9,250 .64
PPG Industries, Inc. 150000 8,691 .61
Dow Chemical Co. 75000 7,406 .52
Banking- 5.48%
BankAmerica Corp. 270,000 19,710 1.37
NationsBank Corp. 200,000 12,012 .84
Citicorp 100000 11,994 .84
H.F. Ahmanson & Co. 200000 11,900 .83
CoreStates Financial Corp 125,000 9,664 .67
Fleet Financial Group, Inc. 120000 7,928 .55
KeyCorp 80000 5,395 .38
Merchandising- 5.37%
J.C. Penney Co., Inc. 290000 18,633 1.30
Wal-Mart Stores, Inc. 400000 15,975 1.11
Giant Food Inc., Class A 400000 13,500 .94
Limited Inc. 550000 13,234 .92
Walgreen Co. 400000 12,875 .90
Circuit City Stores, Inc. - Circuit City Group 88200 2,894 .20
Health & Personal Care- 5.23%
Pfizer Inc. 400000 29,100 2.03
Warner-Lambert Co. 150000 20,981 1.46
SmithKline Beecham PLC (American Depositary
Receipts) (United Kingdom) 300000 14,888 1.04
Gillette Co. 108,480 10,014 .70
Insurance- 3.48%
USF&G Corp. 900000 18,169 1.27
General Re Corp. 70000 13,895 .97
American General Corp. 176700 9,520 .66
CIGNA Corp. 50000 8,362 .58
Aerospace & Military Technology- 2.61%
General Motors Corp., Class H 275000 18,425 1.28
Boeing Co. 200000 10,625 .74
Raytheon Co. 150000 8,391 .59
Business & Public Services- 2.47%
Rentokil Group PLC (American Depositary Receipts)
(United Kingdom) 500000 21,000 1.46
Avery Dennison Corp. 250000 10,469 .73
Alexander & Baldwin, Inc. 150000 4,050 .28
Telecommunications- 2.32%
Century Telephone Enterprises, Inc. 357,500 16,467 1.15
Telefonica de Espana, SA (American Depositary Receipts)
(Spain) 175000 15,137 1.05
NEXTEL Communications, Inc. 13.00% exchangeable
preferred, Series D (1) (2) (3) 1250 1,394 .10
Iridium LLC, warrants, expire 2005 (2) (3) 1500 210 .01
Esat Holdings Ltd., warrants, expire 2007 (Ireland) 3500 105 .01
McCaw International, Ltd., warrants, expire 2007 (2) 2000 5 .00
Forest Products & Paper- 2.02%
Weyerhaeuser Co. 176500 9,321 .65
Georgia-Pacific Corp. 100000 8,538 .59
Union Camp Corp. 100000 6,006 .42
Sonoco Products Co. 158300 5,194 .36
Beverages & Tobacco- 1.98%
PepsiCo, Inc. 520000 19,175 1.34
UST Corp. 300000 9,262 .64
Electrical & Electronics- 1.95%
Nokia Corp., Class A (American Depositary
Receipts) (Finland) 170000 14,131 .98
York International Corp. 175000 8,105 .57
Hubbell Inc., Class B 126000 5,725 .40
Leisure & Tourism- 1.51%
Carnival Corp., Class A 400000 21,625 1.51
Transportation: Rail & Road- 1.25%
Union Pacific Corp. 300000 18,000 1.25
Industrial Components- 1.16%
Genuine Parts Co. 300000 9,600 .67
Dana Corp. 150000 7,012 .49
Data Processing & Reproduction- 1.11%
International Business Machines Corp. 145000 15,887 1.11
Metals: Nonferrous- 0.94%
Aluminum Co. of America 200000 13,450 .94
Electronic Components- 0.91%
AMP Inc. 300000 13,031 .91
Food & Household Products- 0.77%
General Mills, Inc. 150000 11,100 .77
Machinery & Engineering- 0.69%
Deere & Co. 180000 9,866 .69
Broadcasting & Publishing- 0.61%
Time Warner Inc. 10.25% exchangeable preferred,
Series M (1) 2871 3,273 .23
American Radio Systems Corp. 11.375%
exchangeable preferred (1) (2) (3) 26320 3,092 .22
Adelphia Communications Corp. 13.00% exchangeable
preferred, Series A (2) (3) 20000 2,320 .16
Metals: Steel- 0.54%
Allegheny Teledyne Inc. 300000 7,725 .54
Multi-Industry- 0.49%
Textron Inc. 120000 7,095 .49
Miscellaneous Materials & Commodities- 0.44%
Potash Corp. of Saskatchewan Inc. (Canada) 80000 6,295 .44
Automobiles- 0.42%
General Motors Corp. 100000 6,100 .42
Utilities: Electric & Gas- 0.16%
Nevada Power Co. 100000 2,319 .16
Real Estate- 0.09%
CarrAmerica Realty Corp. 8.57% redeemable preferred,
Series B 50000 1,247 .09
--------------------
MISCELLANEOUS
Other stocks in initial period of acquisition 9,537 .66
-------------------
TOTAL STOCKS (cost: $604,139,000) 868512 60.52
--------------------
Principal
Amount
Convertible Debentures (000)
- -------------------------------------------------------------- -------------------
Industrials & Services- 0.64%
Time Warner Inc.:
0% 2013 $7,000 3,509
0% 2012 2,500 994 .32
Sunglass Hut International, Inc. 5.25% 2003 3375 2,480 .17
Rogers Communications Inc. 0% 2013 5,000 2,137 .15
Discovery Zone Inc. 0% 2013 6,000 15 .00
-------------------
TOTAL CONVERTIBLE DEBENTURES (cost: $10,857,000) 9135 .64
-------------------
TOTAL EQUITY-TYPE SECURITIES (cost: $614,996,000) 877,647 61.16
-------------------
Bonds & Notes
- -----------------------------------------------
Diversified Media, Cable Television &
Telecommunications- 2.09%
Time Warner Inc.:
9.125% 2013 4,000 4,703
6.10% 2001 (2) 2,750 2,680 .51
Tele-Communications, Inc.:
8.75% 2015 2,000 2,272
9.25% 2023 2,000 2,202 .31
Consorcio Ecuatoriano de Telecomunicaciones SA
CONECEL:
Units, 14.00% 2000 (2) 3000 3,030 .28
14.00% 2002 (2) 1000 1,010
U S WEST Capital Funding, Inc. 7.30% 2007 2500 2,582 .18
Qwest Communications International Inc.
0%/9.47% 2007 (2) (4) 4000 2,580 .18
CEI Citicorp Holdings SA 11.25% 2007 (2) 2750 2,366 .17
Telesystem International Wireless Inc.
0%/13.25% 2007 (2) (4) 3700 2,202 .15
Iridium LLC 13.00% 2005 (2) 1500 1,537 .11
Comtel Brasileira Ltda. 10.75% 2004 (2) 1,500 1,432 .10
Orion Network Systems, Inc. 11.25% 2007 1,250 1,403 .10
Transportation- 1.79%
Continental Airlines, Inc.:
Series 1996-A, 6.94% 2013 3922 4,006
Series 1996-2C, 10.22% 2014 2187 2,635 .58
Series 1997-4A, 6.90% 2018 1700 1,726
United Air Lines, Inc.:
1996-A2, 7.87% 2019 2500 2,666
1995-A1, 9.02% 2012 1388 1,574 .34
9.00% 2003 500 558
Delta Air Lines, Inc.:
1993-A2, 10.50% 2016 2000 2,579
1992-A2, 9.20% 2014 1000 1,176 .26
Airplanes Pass Through Trust, Class C, 8.15% 2019 (5 3000 3,173 .22
Jet Equipment Trust, Series 1995-B, 7.83% 2015 (2) 2372 2,472 .17
USAir, Inc., 1996-B, 7.50% 2008 1901 1,982 .14
AMR Corp. 9.75% 2000 1000 1,071 .08
Financial Services- 1.40%
Capital One Bank:
7.35% 2000 7500 7,667
7.30% 2027 (2) (6) 1250 1,183 .62
Ocwen Financial Corp. 11.875% 2003 2850 3,192 .23
BTC Capital Trust I 6.469% 2026 (6) 2250 2,205 .15
Pan Pacific Industrial Investments PLC 0% 2007 (2) 6,000 2,180 .15
Central Fidelity Capital Trust I 6.758% 2027 (2) (6) 2000 2,030 .14
Wharf International Finance Ltd., Series A, 7.625% 2 1750 1,615 .11
Banking & Thrifts- 1.35%
Imperial Capital Trust I, Series A, 9.98% 2026 2950 3,277 .23
Advanta Capital Trust I, Series B, 8.99% 2026 3000 2,970 .21
Dime Capital Trust I, Series A, 9.33% 2027 2500 2,793 .19
Chase Capital II 6.25% 2027 (6) 2500 2,375 .16
Chevy Chase Bank, FSB 9.25% 2008 2000 2,040 .14
Advanta National Bank 6.45% 2000 1950 1,896 .13
First Nationwide Holdings Inc. 10.625% 2003 1500 1,684 .12
First Union Corp. 6.82%/7.57% 2026 (4) 1250 1,288 .09
National Westminster Bancorp Inc. 9.45% 2001 1000 1,091 .08
Broadcasting & Publishing- 1.03%
Fox/Liberty Networks, LLC 0%/9.75% 2007 (2) (4) 4000 2,510 .18
News America Holdings Inc.:
7.43% 2026 1,250 1,323
10.125% 2012 1,000 1,158 .17
ITT Publimedia BV 9.375% 2007 (2) 2,250 2,357 .16
Chancellor Radio Broadcasting Co. 8.75% 2007 (2) 2,250 2,284 .16
Adelphia Communications Corp. 9.25% 2002 (2) 2000 1,995 .14
RBS Participacoes SA 11.00% 2007 (2) 2,000 1,810 .13
Cablevision Systems Corp. 8.125% 2009 (2) 1,250 1,272 .09
Energy & Related Companies- 0.86%
Oryx Energy Co.:
9.50% 1999 3,000 3,147
8.375% 2004 2,500 2,679 .48
10.00% 1999 1,000 1,045
USX Corp. 9.125% 2013 2,500 2,965 .21
OXYMAR 7.50% 2016 (2) 2500 2,520 .17
Cellular, Paging & Wireless Communications- 0.79%
CenCall Communications Corp. 0%/10.125% 2004 (4) 3000 2,621 .18
Esat Holdings Ltd. 0%/12.50% 2007 (4) 3,500 2,450 .17
McCaw International, Ltd. 0%/13.00% 2007 (4) 3000 1,763 .12
Omnipoint Corp. 11.625% 2006 1500 1,590 .11
NEXTEL Communications, Inc. 0%/9.75% 2007 (2) (4) 2,000 1,155 .08
Clearnet Communications Inc. 0%/11.75% 2007 (4) C$2,250 956 .07
PriCellular Wireless Corp. 10.75% 2004 $ 750 814 .06
Collateralized Mortgage Obligations
(Privately Originated) (5)- 0.73%
Asset-Backed Securities Investment Trust,
Series 1997-D, 6.79% 2003 (2) 5000 5,026 .35
Asset Securitization Corp., Series 1997-D5, Class A-1A,
6.50% 2043 2975 2,998 .21
GMAC Commercial Mortgage Securities, Inc.,
Series 1997-C1, Class A-1, 6.83% 2003 2467 2,502 .17
Real Estate- 0.70%
SocGen Real Estate Co. LLC, Series A, 7.64% 2049 (2) 2500 2,524 .18
Security Capital Industrial Trust 7.95% 2008 1500 1,609 .11
B.F. Saul Real Estate Investment Trust 11.625% 2002 1500 1,605 .11
Irvine Co. 7.46% 2006 (2) (7) 1500 1,509 .10
Shopping Center Associates 6.75% 2004 (2) 1500 1,508 .10
Irvine Apartment Communities, LP 7.00% 2007 1500 1,494 .10
Asset-Backed Obligations (5)- 0.47%
IMC Home Equity Loan Trust, Series 1996-2,
Class A-2, 6.78% 2011 3979 3,974 .28
FIRSTPLUS Home Loan Owner Trust, Series 1997-1,
Class A-6, 6.95% 2015 1500 1,522 .11
Green Tree Financial Corp., Series 1995-A, Class NIM,
7.25% 2005 1197 1,162 .08
Health & Personal Care- 0.42%
Allegiance Corp. 7.00% 2026 3000 3,077 .21
Integrated Health Services, Inc.:
9.25% 2008 (2) 1,750 1,746
9.50% 2007 (2) 1,250 1,262 .21
Forest Products & Paper- 0.39%
Fort James Corp. 6.625% 2004 2,500 2,490 .17
Container Corp. of America 9.75% 2003 2000 2,150 .15
Pindo Deli Finance Mauritius Ltd. 10.75% 2007 (2) 1000 938 .07
Manufacturing & Materials- 0.32%
Freeport-McMoRan Copper & Gold Inc. 7.20% 2026 2750 2,692 .19
Owens-Illinois, Inc. 8.10% 2007 1,750 1,853 .13
Utilities: Electric & Gas- 0.30%
Israel Electric Corp. Ltd. 7.25% 2006 (2) 2500 2,532 .18
Commonwealth Edison Co., Series 75, 9.875% 2020 1500 1,793 .12
Metals: Nonferrous- 0.27%
Inco Ltd.:
9.60% 2022 2000 2,264
9.875% 2019 1,500 1,607 .27
Insurance- 0.24%
Terra Nova (Bermuda) Holdings Ltd. 10.75% 2005 2000 2,217 .15
Aetna Services, Inc. 6.97% 2036 1250 1,281 .09
Merchandising- 0.24%
Dayton Hudson Corp. 8.50% 2022 2500 2,674 .19
Woolworth Corp., Series A, 7.00% 2002 750 762 .05
Beverages & Tobacco- 0.21%
Sparkling Spring Water Group Ltd. 11.50% 2007 (2) 3,000 3,060 .21
Leisure, Tourism & Restaurants- 0.21%
Royal Caribbean Cruises Ltd. 7.00% 2007 3000 3,009 .21
Food & Household Products- 0.20%
Fage Dairy Industry SA 9.00% 2007 2000 1,933 .13
GRUMA, SA de CV 7.625% 2007 (2) 1000 976 .07
Cable & Telephone in the United Kingdom- 0.20%
COLT Telecom Group PLC, Units, 0%/12.00% 2006 (4) 3,750 2,869 .20
Electrical & Electronics- 0.15%
Philips Electronics NV 7.20% 2026 2000 2,078 .15
Data Processing & Reproduction- 0.14%
Unisys Corp. 11.75% 2004 1750 1,986 .14
Machinery & Engineering- 0.10%
United Defense Industries, Inc. 8.75% 2007 (2) 1,400 1,390 .10
Appliances & Household Durables- 0.10%
Samsung Electronics Co., Ltd. 7.45% 2002 (2) 1,500 1,358 .10
Business & Public Services- 0.08%
Federal Express Corp. 7.53% 2006 1046 1,081 .08
Recreation & Other Consumer Products- 0.02%
CLN Holdings Inc. 0% 2001 500 316 .02
Non-U.S. Governments & Governmental
Authorities- 0.43%
Argentina (Republic of) 11.75% 2007 (2) 2500 2,407 .17
Canadian Government 4.366% 2026 (8) C$2,000 1,499 .10
Mendoza (Province of) 10.00% 2007 (2) $1,500 1,427 .10
Poland (Republic of) Past Due Interest Bond 4.00% 20 1000 850 .06
Federal Agency Obligations-Mortgage
Pass-Throughs (5)- 3.02%
Government National Mortgage Assn.:
8.00% 2020-2026 18538 19,233
7.50% 2026 6315 6,442
8.50% 2022-2026 4965 5,217 2.24
10.00% 2019 1102 1,232
Fannie Mae (formerly Federal National Mortgage Assn.):
8.50% 2024 8711 9,095
7.00% 2009 1547 1,572 .78
9.00% 2019 475 508
Federal Agency Obligations-Other- 0.63%
Fannie Mae:
6.53% 2006 5000 4,927
7.52% 2004 4000 4,060 .63
U.S. Treasury Obligations- 10.53%
7.00% 2006 25000 26,812
7.125% 2000 25000 25,683
7.25% 2004 20000 21,466
10.375% 2009-2012 14000 18,329
6.50% 2002 15000 15,366
3.626% 2002 (8) 12,500 12,613
8.75% 2000-2008 8000 8,897
8.25% 2005 5000 5,279 10.53
9.25% 1998 5000 5,120
11.875% 2003 2500 3,241
8.875% 1999 2,500 2,589
11.125% 2003 2000 2,501
7.50% 2016 1700 1,959
11.75% 2010 500 667
10.75% 2003 500 611
-------------------
TOTAL BONDS & NOTES (cost: $413,100,000) 421946 29.41
-------------------
Short-Term Securities
- ------------------------------------------------
Corporate Short-Term Notes- 7.56%
E.I. du Pont de Nemours and Co. 5.51%-5.59%
due 1/15-1/16/98 23,900 23,727 1.65
Minnesota Mining and Manufacturing Co. 5.53% due 12/ 20,000 19,948 1.39
J.C. Penney Funding Corp. 5.50%-5.52%
due 12/12/97-1/9/98 (2) 15,200 15,124 1.05
Coca-Cola Co. 5.53% due 1/9/98 12,700 12,622 .88
General Electric Capital Corp. 5.80% due 12/1/97 11,600 11,598 .81
Procter & Gamble Co. 5.49% due 2/12/98 10,600 10,476 .73
Ameritech Capital Funding Corp. 5.48% due 12/11/97 ( 9,400 9,384 .66
H.J. Heinz Co. 5.55% due 1/8/98 3,500 3,479 .24
Monsanto Co. 5.48% due 12/8/97 2,191 2,189 .15
Federal Agency Discount Notes- 1.33%
Fannie Mae 5.47%-5.53% due 1/29-2/20/98 19,300 19,081 1.33
------------------
TOTAL SHORT-TERM SECURITIES (cost: $127,637,000) 127628 8.89
------------------
TOTAL INVESTMENT SECURITIES (cost: $1,155,733,000) 1427221 99.46
Excess of cash and receivables over payables 7,761 .54
------------------
NET ASSETS $1,434,98 100.00%
==================
/1/Payment in kind. The issuer has the option of paying
additional securities in lieu of cash.
/2/Purchased in a private placement transaction;
resale to the public may require registration or sale
only to qualified institutional buyers.
/3/Non-income-producing securities.
/4/ Step bond; coupon rate will increase at a later date.
/5/ Pass-through securities backed by a pool of
mortgages or other loans on which principal payments
are periodically made. Therefore, the effective
maturity is shorter than the stated maturity.
/6/ Coupon rate changes periodically.
/7/ Valued under procedures established by the
Board of Trustees.
/8/ Index-linked bond, which is a floating rate bond whose
principal amount moves with a government retail price
index.
See Notes to Financial Statements
Equity-type securities appearing in the portfolio
since May 31, 1997
Adelphia Communications
AMP
Avery Dennison
CarrAmerica Realty
Dow Chemical
Esat Holdings
Genuine Parts
Giant Food
Iridium LLC
McCaw International
Millennium Chemicals
Murphy Oil
NEXTEL Communications
Pioneer Natural Resources
Praxair
Raytheon
Rogers Communications
Sonoco Products
Sunglass Hut International
USF&G
UST
York International
Equity-type securities eliminated from the portfolio
since May 31, 1997
American Home Products
AT&T
Crompton & Knowles
Dun & Bradstreet
Echlin
Kimberly-Clark
McCormick & Co.
Rayonier
Rochester Gas and Electric
Rockwell International
SAFECO
SBC Communications
Tambrands
Tenneco
U S WEST Communications
</TABLE>
<TABLE>
AMERICAN VARIABLE INSURANCE SERIES
BOND FUND
INVESTMENT PORTFOLIO - November 30, 1997
<S> <C> <C> <C>
CORPORATE BONDS 46.09%
U.S. GOVERNMENT BONDS 24.89
EQUITY-TYPE SECURITIES 4.80
NON-U.S. GOVERNMENT BONDS 3.12
CASH & EQUIVALENTS 21.10
Principal Market Percent
Amount Value Of Net
Bonds & Notes (000) (000) Assets
Diversified Media, Cable Television &
Telecommunications - 6.38%
Tele-Communications, Inc.:
9.80% 2012 $ 485 $ 594
9.25% 2023 500 550 .79%
Consorcio Ecuatoriano de Telecomunicaciones SA CONECEL:
Units, 14.00% 2000 (1) 600 606
14.00% 2002 (1) 500 505 .77
Time Warner Inc.:
7.95% 2000 500 514 .70
6.10% 2001 (1) 500 487
Comtel Brasileira Ltda. 10.75% 2004 (1) 1000 955 .66
Comcast Corp.:
9.50% 2007 500 518 .55
8.375% 2007 250 275
Brooks Fiber Properties, Inc.:
10.00% 2007 500 570
0%/10.875% 2006 (2) 200 164 .51
WorldCom, Inc. 8.875% 2006 500 536 .37
U S WEST Capital Funding, Inc. 6.95% 2037 500 509 .35
RCN Corp. 10.00% 2007 (1) 500 501 .35
Qwest Communications International Inc. 0%/9.47% 2007 (1) (2) 750 484 .34
Telesystem International Wireless Inc. 0%/13.25% 2007 (1) (2) 625 372 .26
Orion Network Systems, Inc. 11.25% 2007 250 281 .19
Iridium LLC 13.00% 2005 250 256 .18
Northern Telecom Ltd. 6.875% 2002 250 255 .18
Viacom International Inc. 9.125% 1999 250 253 .18
Cellular, Paging & Wireless Communications - 6.35%
Omnipoint Corp. 11.625% 2006 1,500 1,590 1.11
Esat Holdings Ltd. 0%/12.50% 2007 (2) 2,000 1,400 .97
McCaw International, Ltd. 0%/13.00% 2007 (2) 2,000 1,175 .82
NEXTEL Communications, Inc.:
0%/9.75% 2004 (1) (2) 1,000 862
0%/9.75% 2007 (1) (2) 500 289 .80
Crown Castle International Corp. 10.625% 2007 (1) 1,000 610 .42
Cellular Communications International, Inc.:
0% 2000 500 393
Units 0% 2000 (3) 250 201 .41
Clearnet Communications Inc. 0%/11.75% 2007 (2) C$1,358 577 .40
PriCellular Wireless Corp. 10.75% 2004 $500 542 .38
NEXTLINK Communications, Inc. 9.625% 2007 500 505 .35
Globalstar, LP, 11.375% 2004 500 500 .35
Cellular Communications of Puerto Rico, Inc.) 10.00% 2007 500 490 .34
Financial Services - 4.45%
J.P. Morgan & Co. Inc., Series A, 5.994% 2012 (4) (5) 2,000 1,912 1.33
Ocwen Financial Corp. 11.875% 2003 1 .89
Capital One Bank:
7.15% 2006 500 507
8.125% 2000 250 259 .70
7.30% 2027 (1), (5) 250 236
Central Fidelity Capital Trust I 6.758% 2027 (1) (5) 500 507 .35
Wharf International Finance Ltd. 7.625% 2007 515 475 .33
MBNA Capital 8.278% 2026 400 413 .29
Pan Pacific Industrial Investments PLC 0% 2007 (1) 785 285 .20
Hutchison Whampoa Finance Ltd. 6.988% 2037 (1) 300 283 .19
BTC Capital Trust I 6.469% 2026 (5) 250 245 .17
Broadcasting & Publishing - 4.26%
Fox/Liberty Networks, LLC 0%/9.75% 2007 (1) (2) 2250 1412 .98
Cablevision Systems Corp. 8.125% 2009 (1) 1250 1272 .88
Chancellor Media Corp. 8.75% 2007 (1) 750 761 .53
ITT Publimedia BV 9.375% 2007 (1) 500 524 .36
TV Azteca, SA de CV 10.125% 2004 500 517 .36
TCI Communications, Inc. 6.375% 1999 500 499 .35
American Radio Systems Corp. 9.00% 2006 400 425 .30
News America Holdings Inc. 7.43% 2026 250 265 .18
Globo Comunicacoes E Participacoes LTDA. 10.50% 2006 (1) 250 235 .16
RBS Participacoes SA 11.00% 2007 (1) 250 226 .16
Cable & Telephone in the United Kingdom - 3.07%
COLT Telecom Group PLC:
10.125% 2007 GBP1,000 1,688
Units, 0%/12.00% 2006 (2) $1,000 765 2.00
8.875% 2007 DM750 425
TeleWest Communications PLC 0%/11.00% 2007 (2) $1,000 762 .53
Comcast UK Cable Partners Ltd. 0%/11.20% 2007 (2) 650 518 .36
International CableTel Inc., Series B, 10.00% 2007 250 262 .18
Health & Personal Care - 2.63%
Integrated Health Services, Inc.:
9.25% 2008 (1) 1,000 998
9.50% 2007 (1) 750 757 1.22
Paracelsus Healthcare Corp. 10.00% 2006 500 520 .36
Allegiance Corp. 7.00% 2026 500 513 .36
Sun HealthCare Group, Inc. 9.50% 2007 (1) 500 508 .35
Vencor, Inc. 8.625% 2007 (1) 500 493 .34
Manufacturing & Materials - 2.57%
AK Steel Corp. 9.125% 2006 750 773 .54
Hyundai Semiconductor America, Inc. 8.625% 2007 (1) 700 596 .42
Printpack, Inc. 10.625% 2006 500 530 .37
Fairchild Semiconductor Corp. 10.125% 2007 500 522 .36
Freeport-McMoRan Copper & Gold Inc. 7.20% 2026 500 489 .34
Owens-Illinois, Inc. 8.10% 2007 250 265 .18
U.S. Can Corp. 10.125% 2006 250 265 .18
Kaiser Aluminum & Chemical Corp. 9.875% 2002 250 259 .18
Transportation - 2.44%
Continental Airlines, Inc.:
7.42% 2007 500 516
Series 1997-4A 6.90% 2018 300 305 .77
Series 1996-C 9.50% 2015 (6) 245 281
Airplanes Pass Through Trust:
Class C, 8.15% 2019 (6) 500 529
Class D, 10.875% 2019 (6) 275 308 .58
Jet Equipment Trust:
Series 1995-A, 11.44% 2014 (1) 300 398
Series 1994-A, 11.79% 2013 (1) 250 333 .51
United Air Lines, Inc. 10.67% 2004 500 596 .41
Teekay Shipping Corp. 8.32% 2008 250 252 .17
Banking & Thrifts - 2.24%
Imperial Capital Trust I, Series A, 9.98% 2026 550 611 .43
First Nationwide Holdings Inc. 10.625% 2003 500 561 .39
Dime Capital Trust I, Series A, 9.33% 2027 500 559 .39
Chevy Chase Bank, FSB 9.25% 2008 500 510 .35
Advanta Capital Trust I 8.99% 2026 500 495 .34
Advanta National Bank 6.45% 2000 500 486 .34
Energy & Related Companies - 1.21%
J. Ray McDermott, SA 9.375% 2006 500 528
McDermott Inc. 9.375% 2002 400 425 .66
Petrozuata Finance Inc. 7.63% 2009 (1) 750 787 .55
Forest Products & Paper - 1.17%
Pindo Deli Finance Mauritius Ltd.:
10.75% 2007 (1) 750 703
10.25% 2002 (1) 500 476 .82
Fort James Corp. 6.625% 2004 500 498 .35
Real Estate - 1.05%
SocGen Real Estate Co. LLC, Series A, 7.64% 2049 (1) 1,000 1,010 .70
Irvine Apartment Communities, LP 7.00% 2007 500 498 .35
Asset- Backed Obligations (6) - 1.04%
FIRSTPLUS Home Loan Owner Trust, Series 1997-1,
Class A-6, 6.95% 2015 500 508 .35
IMC Home Equity Loan Trust, Series 1996-2,
Class A-2, 6.78% 2011 398 397 .28
EQCC Home Equity Loan Trust, Asset-Backed Certificates, Series 1996-A,
Class A-2, 6.95% 2012 300 304 .21
Green Tree Financial Corp., Series 1995-A, Class NIM, 7.25% 2005 299 290 .20
Collateralized Mortgage Obligations (Privately Originated) (6) - 0.92%
Asset Securitization Corp., Series 1997-D5, Class A-1A, 6.50% 2043 496 500 .35
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1,
Class A-1, 6.83% 2003 493 500 .35
Merrill Lynch Mortgage Investors, Inc., Series 1995-C2,
Class A, 7.124% 2021 315 320 .22
Food & Household Products - 0.85%
GRUMA, SA de CV 7.625% 2007 (1) 1,000 976 .68
Fage Dairy Industry SA 9.00% 2007 250 242 .17
Machinery & Engineering - 0.76%
United Defense Industries, Inc. 8.75% 2007 (1) 800 794 .55
Deere & Co. 8.95% 2019 250 295 .21
Leisure, Tourism & Restaurants - 0.72%
Rio Hotel & Casino, Inc. 9.50% 2007 500 529 .37
Royal Caribbean Cruises Ltd. 7.00% 2007 500 501 .35
Beverages & Tobacco - 0.71%
Sparkling Spring Water Group Ltd. 11.50% 2007 (1) 1,000 1,020 .71
Insurance - 0.65%
Integon Capital I, Integon Corp., Series A, 10.75% 2027 500 660 .46
Terra Nova (Bermuda) Holdings Ltd. 10.75% 2005 250 277 .19
Business & Public Services - 0.57%
Allied Waste North America, Inc. 10.25% 2006 500 545 .38
Federal Express Corp. 9.875% 2002 250 280 .19
Chemicals - 0.38%
Texas Petrochemicals Corp. 11.125% 2006 500 550 .38
Miscellaneous Services - 0.37%
Petro Stopping Centers, LP, Petro Financial Corp. 10.50% 2007 500 525 .37
Multi-Industry - 0.35%
Reliance Industries Ltd.:
10.25% 2097 (1) 250 251 .18
Series B, 10.25% 2097 250 251 .17
Utilities: Electric & Gas - 0.33%
Commonwealth Edison Co., Series 75, 9.875% 2020 400 478 .33
Data Processing & Reproduction - 0.20%
Unisys Corp. 11.75% 2004 250 284 .20
Appliances & Household Durables - 0.16%
Samsung Electronics Co., Ltd. 7.45% 2002 (1) 250 226 .16
Independent Power Producers - 0.15%
California Energy Co., Inc. 9.875% 2003 200 217 .15
Recreation & Other Consumer Products - 0.11%
CLN Holdings Inc. 0% 2001 250 158 .11
Non-U.S. Governments & Governmental
Authorities - 3.12%
Canadian Government:
4.618% 2021 (4) C$2,00 1,585
4.366% 2026 (4) 1,000 750 1.62
Argentina (Republic of) 11.75% 2007 (1) $750 722 .50
Ireland (Republic of) 8.00% 2006 IRpounds25 424 .29
Mendoza (Province of) 10.00% 2007 (1) $250 238 .17
Brazil (Federal Republic of) Capitalization Bond 8.00% 2014 (7) 285 214 .15
Poland (Republic of) Past Due Interest Bond 4.00% 2014 (5) 250 212 .15
South Africa (Republic of) 13.00% 2010 ZAR1,00 190 .13
Deutschland Republic 8.00% 2002 DM250 159 .11
Federal Agency Obligations - Mortgage Pass-Throughs (5) - 7.92%
Government National Mortgage Assn.:
5.00% 2026 (5) $3,654 3,682
6.00% 2026 (5) 1,372 1,387
6.50% 2025-2026 1,217 1,197 5.83
10.00% 2019 735 822
9.50% 2021 749 814
7.00% 2026 493 494
Fannie Mae (formerly Federal National Mortgage Assn.):
10.00% 2018-2025 1,048 1,150
6.137% 2033 (5) 915 912
9.00% 2021 636 679
6.50% 2026 270 265 2.09
Federal Agency Obligations-Other - 1.23%
Fannie Mae 7.04% 2005 890 886 .62
Freddie Mac (formerly Federal Home Loan Mortgage Corp.):
6.78% 2005 500 496
5.78% 2003 400 388 .61
U.S. Treasury Obligations - 15.74%
6.25% 2003 10,500 10,677
8.875% 2017 4,000 5,250
7.25% 2004 2,000 2,150 15.74
5.875% 1999 2,000 2,003
10.375% 2009-2012 1,000 1,283
3.626% 2002 (4) 1,000 1,009
7.50% 2016 250 288
----------------
TOTAL BONDS & NOTES (cost: $104,416,000) 106,642 74.10
---------------
Number
of
Shares
Stocks
Common & Preferred Stocks - 3.74%
American Radio Systems Corp. 11.375% exchangeable preferred (1) (3) (7 18,423 2,165 1.50
Time Warner Inc. 10.25% exchangeable preferred, Series M (7) 580 661 .46
Chancellor Radio Broadcasting Co. 12.00% preferred (1) (3) (7) 5,294 625 .44
Adelphia Communications Corp., 13.00% exchangeable preferred,
Series A (1) (3) 5,000 580 .40
CarrAmerica Realty Corp. 8.57% redeemable preferred, Series B 20,000 499 .35
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital 20,000 480 .33
NEXTEL Communications, Inc., 13.00% exchangeable preferred, Series D, (1) 250 279 .19
Esat Holdings Ltd., warrants, expire 2007 (Ireland) (1) (3) 2,000 60 .04
Iridium LLC, warrants, expire 2005 (1) (3) 250 35 .03
McCaw International, Ltd., warrants, expire 2007 (1) (3) 2,000 4 .00
Miscellaneous
Other stocks in initial period of acquisition 83 .06
----------------
TOTAL STOCKS (cost: $4,661,000) 5,471 3.80
----------------
Principal
Convertible Debentures Amount (000)
Industrials & Services - 1.00%
Time Warner Inc. 0% 2013 1,000 502 .35
Kelley Oil & Gas Corp. 8.50% 2000 $500 493 .34
Sunglass Hut International, Inc. 5.25% 2003 600 440 .31
----------------
TOTAL CONVERTIBLE DEBENTURES (cost: $1,387,000) 1,435 1.00
----------------
TOTAL EQUITY-TYPE SECURITIES (cost: $6,048,000) 6,906 4.80
----------------
Short-Term Securities
Corporate Short-Term Notes - 19.99%
E.I. du Pont de Nemours and Co. 5.50% due 12/23/97 2,500 2,491 1.73
Ford Motor Credit Co. 5.72% due 1/8/98 2,500 2,484 1.73
Pitney Bowes Credit Corp. 5.54% due 12/01/97 2,200 2,200 1.53
Duke Energy Corp. 5.56% due 12/9/97 2,100 2,097 1.46
Procter & Gamble Co. 5.49% due 12/9/97 2,000 1,997 1.39
Campbell Soup Co. 5.49% due 12/12/97 2,000 1,996 1.39
General Mills, Inc. 5.62% due 1/9/98 2,000 1,987 1.38
Associates Corp. of North America 5.75% due 12/1/97 1,900 1,900 1.32
Wal-Mart Stores, Inc. 5.50% due 12/2/97 1,900 1,899 1.32
American Express Credit Corp. 5.54% due 12/15/97 1,900 1,896 1.32
Motorola Credit Corp. 5.52% due 12/22/97 1,700 1,694 1.18
Sara Lee Corp. 5.53% due 12/4/97 1600 1599 1.11
General Electric Capital Corp. 5.72% due 1/20/98 1500 1488 1.03
Gannett Co., Inc. 5.65% due 1/20/98 (1) 1151 1142 .79
Ameritech Capital Funding Corp. 5.50% due 12/29/97 (1) 1000 996 .69
Lucent Technologies Inc. 5.49% due 12/18/97 900 899 .62
---------------
TOTAL SHORT-TERM SECURITIES (cost: $28,765,000) 28,765 19.99
---------------
TOTAL INVESTMENT SECURITIES (cost: $139,229,000) 142,313 98.89
Excess of cash and receivables over payables 1,613 1.11
---------------
NET ASSETS $143,926 100.00%
-----------------
-----------------
1 Purchased in a private placement transaction;
resale to the public may require registration or sale
only to qualified institutional buyers.
2 Step bond; coupon rate will increase at a later date.
3 Non-income-producing securities.
4 Index-linked bond, which is a floating rate bond whose principal amount
moves with a government retail price index.
5 Coupon rate changes periodically.
6 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.
7 Payment in kind. The issuer has the option of paying additional
securities in lieu of cash.
See Notes to Financial Statements
</TABLE>
<TABLE>
AMERICAN VARIABLE INSURANCE SERIES
HIGH-YIELD BOND FUND
INVESTMENT PORTFOLIO - NOVEMBER 30, 1997
<S> <C> <C> <C>
CORPORATE BONDS 79.95%
NON-U.S. CORPORATE BONDS 0.00%
U.S. TREASURY BONDS 5.75%
NON-U.S. GOVERNMENT BONDS 1.77%
CASH & EQUIVALENTS 7.25%
EQUITY-TYPE SECURITIES 5.28%
Percent
of Net
Largest Corporate Holdings Assets
Integrated Health 2.44%
Chancellor Media 2.05
USAir 2.01
Paracelsus Healthcare 1.79
Container Corp. of America 1.79
COLT Telecom 1.79
International CableTel/NTL 1.74
American Radio Systems 1.70
Omnipoint 1.68
Orion Network Systems 1.63
Principal Market Percent
Amount Value Of Net
Bonds & Notes (000) (000) Assets
Cellular, Paging & Wireless Communications - 12.75%
Omnipoint Corp. 11.625% 2006 $12,500 $13,250 1.68%
Orion Network Systems, Inc. Units, 11.25% 2007 11,250 12,628 1.61
PriCellular Wireless Corp.:
0%/12.25% 2003(1) 6,000 6,007 1.45
10.75% 2004 2,750 2,984
0%/14.00% 2001(1) 2,185 2,414
Centennial Cellular Corp. 8.875% 2001 10,000 10,150 1.29
Cellular Communications of Puerto Rico, Inc. 10.00% 2007 7,250 7,105 .90
Cellular Communications International, Inc.:
Units, 0% 2000(2) 6,500 5,233 .72
0% 2000 500 393
Comcast Cellular Holdings, Inc.:
Series B, 9.50% 2007 4,000 4,140 .66
10.25% 2001 925 1,013
Clearnet Communications Inc. 0%/11.75% 2007(1) C$ 11,825 5,025 .64
CenCall Communications Corp. 0%/10.125% 2004(1) $4,750 4,150 .53
Mobile Telecommunications Technology Corp. 13.50% 2002 3,500 3,999 .51
Comunicacion Celular SA 0%/13.125% 2003(1) 5,000 3,775 .48
Powertel Inc.(formerly InterCel, Inc.):
0%/12.00% 2006(1) 2,500 1,784 .43
11.125% 2007 1,500 1,590
NEXTEL Communications, Inc.:
0%/9.75% 2007(1) 4,500 2,599 .41
0%/9.75% 2004(1) 750 647
Telesystems International, Inc. 0%/13.25% 2007(1),(3) 3,950 2,350 .30
Western Wireless Corp. 10.50% 2006 1,500 1,586 .20
McCaw International, Ltd. 0%/13.00% 2007(1) 2,500 1,469 .19
Heartland Wireless Communications, Inc. 13.00% 2003 3,500 1,225 .16
Sprint Spectrum LP, Sprint Spectrum Finance Corp. 11.00% 2006 1000 1125 .14
Rogers Cantel Mobile Communications Inc. 9.375% 2008 1,000 1,055 .13
Vanguard Cellular Systems, Inc. 9.375% 2006 1,000 1,030 .13
Globalstar LP 11.375% 2004 1,000 1,000 .13
MobileMedia Communications, Inc. 0%/10.50% 2003(1) 4,000 460 .06
Diversified Media, Cable Television &
Telecommunications - 8.97%
Cablevision Systems Corp.:
8.125% 2009(3) 4,500 4,579 1.00
9.875% 2013 3,000 3,255
Adelphia Communications Corp. 9.25% 2002(3) 7,500 7,481 .95
GST Equipment Funding, Inc.
(formerly GST Telecommunications, Inc.) 13.25% 2007 6,000 6,900 .88
WorldCom, Inc. 9.375% 2004 6,319 6,689 .85
Nextlink Communications LLC,:
Nextlink Communications, Inc. 9.625% 2007 5,000 5,050 .79
Nextlink Capital, Inc. 12.50% 2006 1,000 1,135
Hermes Euro Railtel BV 11.50% 2007(3) 5,000 5,475 .70
Brooks Fiber Properties, Inc.:
10.00% 2007 2,500 2,850 .55
0%/10.875% 2006(1) 1,750 1,437
Netia Holdings B.V.:
0%/11.25% 2007(1),(3) 3,000 1,695 .40
10.25% 2007(3) 1,500 1,421
Qwest Communications International Inc.:
10.875% 2007 1,500 1,687 .37
0%/9.47% 2007(1),(3) 2,000 1,290
Multicanal Participacoes SA, Series B, 12.625% 2004 3,000 2,880 .37
Consorcio Ecuatoriano de Telecommunicaciones SA Conecel
Units, 14.00% 2000(3) 1,000 1,010 .22
14.00% 2002(3) 750 758
RCN Corporation 0%/11.125% 2007(1),(3) 3,000 1,762 .22
Jones Intercable, Inc. 9.625% 2002 1,500 1,596 .20
Viacom International Inc. 7.75% 2005 1,500 1,512 .19
Teligent, Inc. 11.50% 2007 1,500 1,502 .19
Intermedia Communications Inc. 0%/11.25% 2007(1) 2,000 1,370 .17
Verio Inc. Units, 13.50% 2004(3) 1,000 1,180 .15
IXC Communications Inc., Series B, 12.50% 2005 1,000 1,140 .15
Teleport Communications Group Inc. 9.875% 2006 1,000 1,100 .14
TCI Communications, Inc. 6.375% 1999 1,000 998 .13
Comtel Brasileira Ltda. 10.75% 2004(3) 1,000 955 .12
Esat Holdings Ltd. 0%/12.50% 2007(1) 1,250 875 .11
Fox/Liberty Networks, LLC 8.875% 2007(3) 500 496 .06
ICG Holdings, Inc. 0%/13.50% 2005(1) 500 400 .05
Manufacturing & Materials - 8.34%
Kaiser Aluminum & Chemical Corp.:
12.75% 2003 3,850 4,119 1.21
Series B, 10.875% 2006 2,500 2,713
9.875% 2002 2,350 2,432
Series D, 10.875% 2006 250 271
Flextronics International Ltd. 8.75% 2007(3) 7,250 7,196 .93
Texas Petrochemicals Corp. 11.125% 2006 6,250 6,875 .87
Derlan Manufacturing Inc. 10.00% 2007 6,050 6,352 .81
Anchor Glass Container Corp. 11.25% 2005(3) 5,000 5,400 .69
Impress Metal Packaging Holdings BV 9.875% 2007 DM7,000 3,965 .50
Consumers International Inc. 10.25% 2005(3) $3,250 3,542 .45
Fairchild Semiconductor Corp. 10.125% 2007 3,250 3,396 .43
AK Steel Corp.:
9.125% 2006 2,000 2,060 .40
10.75% 2004 1,000 1,070
Key Plastics, Inc., Series B, 10.25% 2007 3,000 3,120 .40
Westinghouse Air Brake Co. 9.375% 2005 3,000 3,113 .40
U.S. Can Corp. 10.125% 2006 1,750 1,855 .24
Altos Hornos de Mexico, Series A, 11.375% 2002 1,750 1,820 .23
UCAR Global Enterprises Inc. 12.00% 2005 1,500 1,680 .21
Printpack, Inc. 10.625% 2006 1,500 1,590 .20
Friendly Ice Cream Corp. 10.50% 2007 1,500 1,515 .19
Nortek, Inc. 9.25% 2007 1,000 1,012 .13
Polymer Group, Inc. 9.00% 2007 500 495 .06
Cable & Telephone in the United Kingdom - 7.46%
COLT Telecom Group PLC:
Units, 0%/12.00% 2006(1) $11,250 $8,606
8.875% 2007 DM6,500 3,682 1.79
10.125% 2007 Pounds 1,0 1,688
International CableTel Inc. 0%/10.875% 2003 (1) $13,250 12,124 1.54
NTL Inc., Series B, 10.00% 2007 1,500 1,571 .20
Videotron Holdings PLC:
0%/11.125% 2004(1) 10,000 9,452 1.48
0%/11.00% 2005(1) 2,500 2,199
Comcast UK Cable Partners Ltd. 0%/11.20% 2007(1) 10,000 7,975 1.01
TeleWest Communications PLC:
9.625% 2006 3,500 3,622 .85
0%/11.00% 2007(1) 4,000 3,050
Bell Cablemedia PLC 0%/11.95% 2004(1) 5,000 4,645 .59
Broadcasting & Publishing - 6.26%
Chancellor Media Corp.:
8.75% 2007(3) 5,500 5,583 .96
9.375% 2004 1500 1564
8.75% 2007 500 508
American Media Operations, Inc. 11.625% 2004 4,750 5,154 .66
American Radio Systems Corp. 9.00% 2006 4,750 5,047 .64
Newsquest Capital PLC:
11.00% 2006 3,000 3,345 .64
Series B, 11.00% 2006 1,500 1,672
Globo Comunicacoes E Participacoes LTDA. 10.50% 2006(3) 4,600 4,324 .55
ITT Publimedia BV 9.375% 2007(3) 3,750 3,928 .50
Acme Intermediate Holdings Units, 0%/12.00% 2005(1),(3) 5,970 3,343 .43
Antenna TV SA 9.00% 2007(3) 2,750 2,688 .34
Young Broadcasting Inc. 10.125% 2005 2,000 2,085 .27
TV Azteca, SA de CV 10.125% 2004 1,750 1,809 .23
Gray Communications Systems, Inc. 10.625% 2006 1,500 1,598 .20
TEVECAP SA 12.625% 2004 1,750 1,593 .20
STC Broadcasting, Inc. 11.00% 2007 1,250 1,344 .17
ITT Promedia CVA 9.125% 2007(3) DM2,000 1,167 .15
Transwestern Publishing Company, LP, TWP Capital Corp. 9.625% 2007 $1,000 1,014 .13
RBS Participacoes SA 11.00% 2007(3) 1,000 905 .12
Sun Media Corp. 9.50% 2007 500 531 .07
Health & Personal Care - 5.69%
Integrated Health Services, Inc.:
10.25% 2006 5,000 5,263 1.81
9.50% 2007(3) 4,750 4,797
9.25% 2008(3) 4,250 4,239
Paracelsus Healthcare Corp. 10.00% 2006 13,500 14,040 1.79
Mariner Health Group, Inc. 9.50% 2006 4,750 4,845 .62
Vencor, Inc. 8.625% 2007(3) 3,500 3,448 .44
Universal Health Services, Inc. 8.75% 2005 2,900 3,052 .39
Unison HealthCare Corp. 13.00% 2006(3) 3,100 2,542 .32
Sun Healthcare Group, Inc. 9.50% 2007(3) 1,500 1,523 .19
Tenet Healthcare Corp. 8.00% 2005 1,000 1,010 .13
Energy & Related Companies - 5.58%
Abraxas Petroleum Corp. 11.50% 2004 8,500 9,180 1.17
Kelley Oil & Gas Corp. 10.375% 2006 7,000 7,385 .94
Benton Oil and Gas Co.:
11.625% 2003 3,000 3,308 .81
9.375% 2007(3) 3,000 3,038
Forcenergy Inc:
9.50% 2006 2,250 2,368 .56
8.50% 2007 2,000 2,005
Pogo Producing Co. 8.75% 2007 4,250 4,335 .55
McDermott Inc. 9.375% 2002 3,250 3,457 .44
Falcon Drilling Co., Inc.:
Series B, 8.875% 2003 2,250 2,374 .43
Series B, 9.75% 2001 1,000 1,047
Lomak Petroleum, Inc. 8.75% 2007 2,250 2,250 .29
J. Ray McDermott, SA 9.375% 2006 1,000 1,055 .13
Mariner Energy, Inc. 10.50% 2006 1,000 1,040 .13
Ocean Energy, Inc. 8.875% 2007 1,000 1,035 .13
Leisure, Tourism & Restaurants - 4.73%
AMF Group Inc.:
0%/12.25% 2006(1) 10,150 7,892 1.52
10.875% 2006 3,750 4,078
Station Casinos, Inc.:
9.625% 2003 5,600 5,600 .84
9.625% 2003 1,000 1,008
Boyd Gaming Corp.:
9.25% 2003 3,500 3,623 .79
9.50% 2007(4) 2,500 2,575
Rio Hotel & Casino, Inc.:
10.625% 2005 2,250 2,441 .44
9.50% 2007 1,000 1,057
Wyndham Hotel Corp. 10.50% 2006 2,500 2,912 .37
Sun International Hotels Ltd., Sun International
North America, Inc. 9.00% 2007 1,500 1,545 .20
Foodmaker, Inc. 9.25% 1999 1,429 1,461 .19
FelCor Suites LP 7.375% 2004(3) 1,250 1,241 .16
CLN Holdings, Inc. 0% 2001 1,500 949 .12
California Hotel Finance Corp. 11.00% 2002 750 781 .10
Miscellaneous Services - 3.66%
CellNet Data Systems, Inc. Units, 0%/14.00% 2007(1),(3) 20,870 10,800 1.38
Allied Waste North America, Inc. 10.25% 2006 7,300 7,957 1.01
Petro Stopping Centers, LP, Petro Financial Corp. 10.50% 2007 2,750 2,887 .37
Teletrac, Inc. Units, 14.00% 2007(3) 2,000 2,060 .26
EarthWatch Inc. Units, 12.50% 2001(3),(4) 2,000 2,000 .26
Iron Mountain Inc.:
10.125% 2006 1,500 1,627 .25
8.75% 2009(3) 350 355
Katz Media Corp., Series B, 10.50% 2007 1,000 1,102 .14
Forest Products & Paper - 3.61%
Container Corp. of America:
9.75% 2003 10,000 10,750 1.79
Series A, 11.25% 2004 2,000 2,190
Series B, 10.75% 2002 1,000 1,092
Pacific Lumber Co. 10.50% 2003 4,000 4,120 .52
Advance Agro PLC 13.00% 2007(4) 3,000 2,723 .35
MAXXAM Group Inc. 11.25% 2003 2,000 2,125 .27
Indah Kiat Finance Mauritius Ltd. 10.00% 2007(3) 2,000 1,820 .23
Pindo Deli Finance Mauritius Ltd. 10.25% 2002(3) 1,500 1,429 .18
Copamex Industrias, SA de CV 11.375% 2004 1,000 1,081 .14
U.S. Timberlands Finance Corp. 9.625% 2007 1,000 1,023 .13
Food & Food Retailing - 3.26%
Fage Dairy Industry SA 9.00% 2007 8,500 8,213 1.04
Randall's Food Markets, Inc. 9.375% 2007(3) 4,750 4,821 .62
Carr-Gottstein Foods Co. 12.00% 2005 3,000 3,315 .42
Stater Brothers Holdings Inc. 11.00% 2001 2,000 2,210 .28
Rykoff-Sexton, Inc. 8.875% 2003 2,100 2,132 .27
Bruno's, Inc. 10.50% 2005 5,700 1,995 .25
DGS International Finance Co. BV 10.00% 2007(3) 2,000 1,888 .24
Quality Food Centers, Inc., Series B, 8.70% 2007 1,000 1,075 .14
Transportation - 3.25%
USAir, Inc.:
10.00% 2003 5,750 5,980 2.01
9.625% 2001 4,250 4,420
Pass-Through Trust, Series 1993-A3, 10.375% 2013(5) 3,000 3,344
Pass-Through Trust, Series 1993-A2, 9.625% 2003(5) 1,500 1,613
Pass-Through Trust, Series 1993-A1 8.625% 1998(5) 500 505
Kitty Hawk, Inc. 9.95% 2004(3) 4,000 4,050 .52
Teekay Shipping Corp. 8.32% 2008 3,500 3,535 .45
Delta Air Lines, Inc. 10.00% 2014(3) 1,000 1,248 .16
Airplanes Pass Through Trust, Class D, 10.875% 2019(5) 750 840 .11
Beverages - 2.58%
Canandaigua Wine Co., Inc.:
Series C, 8.75% 2003 3,750 3,778 .84
8.75% 2003 2,750 2,778
Delta Beverage Group, Inc. 9.75% 2003 4,700 4900 .62
Sparkling Spring Water Group Ltd. 11.50% 2007(3) 4,500 4,590 .58
Standard Commercial Corp. 8.875% 2005(3) 3,250 3,258 .41
Dr Pepper Bottling Co. of Texas 10.25% 2000 1,000 1015 .13
Independent Power Producers - 1.57%
California Energy Co., Inc. 10.25% 2004 11,300 12,346 1.57
Protection Services - 0.54%
Protection One Alarm Monitoring, Inc. 0%/13.625% 2005(1),(4) 2,000 2,170 .28
Borg-Warner Security Corp. 9.625% 2007 2,000 2,060 .26
Banking & Financial Services - 0.39%
First Nationwide Holdings Inc. 10.625% 2003 1,500 1,684 .21
Ocwen Financial Corp. 11.875% 2003 1,250 1,400 .18
Merchandising - 0.30%
Loehmann's, Inc. 11.875% 2003 1,250 1,262 .16
Barnes & Noble, Inc., Series B, 11.875% 2003 1,000 1,070 .14
Real Estate - 0.27%
B.F. Saul Real Estate Investment Trust 11.625% 2002 2,000 2,140 .27
Electric & Gas Utilities - 0.26%
Columbia Gas Systems, Inc., Series A, 6.39% 2000 2,000 2,011 .26
Textiles & Apparel - 0.24%
WestPoint Stevens Inc. 8.75% 2001 1,000 1,040 .13
Tultex Corp. 10.625% 2005 750 812 .10
Insurance - 0.18%
Integon Capital I, Integon Corp., Series A, 10.75% 2027 1,100 1,452 .18
Machinery & Engineering - 0.06%
United Defense Industries, Inc. 8.75% 2007(3) 500 496 .06
Non-U.S. Governments & Governmental
Authorities - 1.77%
Argentina (Republic of):
11.75% 2007(3) ARP 4,500 4333 1.19
Eurobond, Series L, 6.688% 2005 (6) $4,464 3962
11.375% 2017 1,000 1068
Panama (Republic of) Interest Reduction Bond 3.75% 2014(3),(6) 3000 2284 .29
United Mexican States Government 11.375% 2016 1250 1417 .18
Poland (Republic of) Past Due Interest Bond 4.00% 2014(6) 1,000 850 .11
U.S. Treasury Obligations - 5.75%
11.625% 2004 13,600 17,975 5.75
7.75% 2001 8,000 8,441
6.875% 1999 7,000 7,117
8.50% 2000 5,000 5,357
8.00% 2001 4,000 4,264
6.625% 2002 2,000 2,058
----------------
TOTAL BONDS & NOTES (cost: $664,895,000) 687,583 87.47
---------------
Number
of
Stocks Shares
Common & Preferred Stocks - 4.80%
Chancellor Media Corp. 12.00% exchangeable preferred(2),(3),(7) 72,764 8,586 1.09
American Radio Systems Corp. 11.375% exchangeable preferred(2),(3), 67,823 7,969
American Radio Systems Corp., Class A(2) 7,500 373 1.06
NEXTEL Communications, Inc. 13.00% exchangeable preferred(2),(3),(7 3,500 3,902 .51
NEXTEL Communications, Inc. Class A(2) 5,422 137
NEXTEL Communications, Inc., warrants, expire 1999(2),(4) 9,500 -
Time Warner Inc. 10.25% exchangeable preferred, Series M(7) 3,479 3,966 .50
IXC Communications, Inc. 12.50% exchangeable preferred, 2009(3),(7) 2,576 2,938 .37
EarthWatch Inc. 12.00% convertible preferred, Series C(2),(3),(4),( 350,000 2,800 .36
Kelley Oil & Gas Corp. convertible preferred 90,000 2,025 .26
Integrated Health Services, Inc. 39,000 1,187 .15
Jacor Communications, Inc.(2) 25,000 1,094 .14
CellNet Data Systems, Inc.(2),(4) 112,000 750 .10
Cellular Communications International, Inc.(2) 10,200 444 .06
Acme Television, LLC(2),(3) 362 363 .05
Marriott International, Inc. 4,512 327 .04
Comunicacion Celular SA, Class B, warrants, expire 2003(2),(3) 5,000 300 .04
ICG Holdings, Inc., warrants, expire 2005(2),(3) 13,200 178 .02
Orion Network Systems, Inc., warrants, expire 2007 (2) 11,250 173 .02
Globalstar Telesystem, warrants, expire 2004 (2) 1,000 120 .02
Protection One Alarm Monitoring, Inc., warrants, expire 2005(2),(3) 6,400 70 .01
Esat Holdings Ltd., warrants, expire 2007(2),(3) 1,250 37 .00
McCaw International, Ltd., warrants, expire 2007(2),(3) 2,500 6 .00
Heartland Wireless Communications, Inc., warrants, expire 2000(2),( 18,000 -
----------------
TOTAL STOCKS (cost: $33,545,000) 37,745 4.80
----------------
Principal Market Percent
Amount Value Of Net
Convertible Debentures (000) (000) Assets
Industrials & Services - 0.48%
Integrated Health Services, Inc. 5.75% 2001 $ 3,500 3,780 .48
----------------
TOTAL CONVERTIBLE DEBENTURES (cost: $3,446,000) 3,780 .48
----------------
TOTAL EQUITY -TYPE SECURITIES (cost: $36,991,000) 41,525 5.28
----------------
Short-Term Securities
Corporate Short-Term Notes - 4.74%
Ameritech Corp. 5.48%-5.50% due 12/11-12/19/97(3) 15,800 15,764 2.01
E.I. du Pont de Nemours and Co. 5.55%-5.59% due 12/1/97-1/5/98 11,600 11,545 1.47
International Lease Finance Corp. 5.50% due 01/05/98 10,000 9,945 1.27
Federal Agency Discount Notes - .61%
Fannie Mae 5.44%-5.62% due 12/11/97-1/20/98 4,800 4,772 .61
---------------
TOTAL SHORT-TERM SECURITIES (cost: $42,027,000) 42,026 5.35
---------------
TOTAL INVESTMENT SECURITIES (cost: $743,913,000) 771,134 98.10
Excess of cash and receivables over payables 14,924 1.90
---------------
NET ASSETS $786,058100.00%
===============
(1) Step bond; coupon rate will increase at a later date.
(2) Non-income-producing securities.
(3) Purchased in a private placement transaction; resale to the public
may require registration or sale only to qualified institutional buyers.
(4) Valued under procedures established by the Board of Trustees.
(5) 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.
(6) Coupon rate changes periodically.
(7) Payment in kind. The issuer has the option of
paying additional securities in lieu of cash.
</TABLE>
<TABLE>
American Variable Insurance Series
U.S. Government/AAA-Rated Securities Fund
Investment Portfolio, November 30, 1997
<S> <C> <C> <C>
- ------------------------------------------------ -------- ----------------
U.S. TREASURY BONDS 44.97%
PRIVATE MORTGAGE & ASSET-BACKED SECURITIES 22.78
FEDERAL AGENCY MORTGAGE-RELATED SECURITIES 21.12
CASH & EQUIVALENTS 7.60
OTHER FEDERAL OBLIGATIONS 3.08
CORPORATE BONDS 0.45
- ------------------------------------------------ -------- ----------------
Principal Market Percent
Amount Value of Net
Bonds & Notes (000) (000) Assets
- ------------------------------------------------ -------- ----------------
U.S. Treasury Obligations - 44.97%
10.75% 2003 $53,000 $64,801
8.875% 2017 39800 52238
10.375% 2009 33,500 41,718
12.00% 2013 10000 14631
7.25% 2004 11150 11967
3.626% 2002 (1) 11000 11099 44.97%
7.125% 2023 6,750 7,602
5.875% 1999 5,000 5,008
14.25% 2002 2000 2621
13.125% 2001 1500 1839
9.00% 1998 1,250 1,269
Federal Agency Obligations - Mortgage
Pass-Throughs (2) - 16.44%
Government National Mortgage Assn.:
7.00% 2018-2024 16375 16751
8.50% 2021-2026 11711 12397
9.50% 2019-2021 4876 5293
6.50% 2027 3975 3912
7.375% 2024 3420 3504
10.00% 2019 2939 3287 10.18
6.875% 2018 1911 1964
9.00% 2009-2016 1193 1283
10.50% 2019 134 152
11.00% 2019 46 53
12.00% 2012-2014 7 8
Fannie Mae (formerly Federal National Mortgage Assn.):
8.00% 2024 7288 7610
8.50% 2023 5268 5530
7.50% 2009-2027 4274 4375
10.00% 2018 3698 4065 5.88
7.00% 2010-2027 3403 3431
9.00% 2011-2025 2882 3068
Feddie Mac (formerly Federal Home Loan Mortgage Corp.):
9.00% 2021-2022 1589 1707
9.50% 2016 107 114 .38
12.00% 2010 2 2
Collateralized Mortgage Obligations
(Privately Originated) (2) - 13.65%
Prudential-Bache CMO Trust III, 9.44% 2018 14000 14648 3.06
GE Capital Mortgage Services, Inc.:
Series 1994-15, Class A-10, 6.00% 2009 8000 7,560
Series 1995-10, Class A-1, 7.00% 2010 6833 6,850 3.02
Westam Mortgage, Class 4-H, 8.95% 2018 11000 11,656 2.44
Morgan Stanley Capital I, Series 1997-HF1,
Class A-1, 6.86% 2006 (3) 4924 5019 1.05
Merrill Lynch Mortgage Investors, Inc.:
Series 1997-C1, Class A-1, 6.95% 2029 2,925 2,987
Series 1995-C3, Class A-2, 6.847% 2025 (4) 1,500 1,522 .94
Structured Asset Securities Corp., Series 1996-CFL,
Class A1-C, 5.944% 2028 4316 4292 .90
AMRESCO Commercial Mortgage Funding I Corp.,
Series 1997-C1, Class A-1, 6.73% 2029 3928 3981 .83
J.P. Morgan Commercial Mortgage Finance Corp., Series 1995-C1,
Class A2, 7.403% 2010 (4) 3000 3133 .66
DLJ Mortgage Acceptance Corp., Series 1995-CF2,
Class A-1B, 6.85% 2027 (3) 2250 2285 .48
Prudential Home Mortgage Securities Co., Inc., Series 1992-33,
Class A-12, 7.50% 2022 1289 1286 .27
Asset-Backed Obligations (2) - 9.13%
ContiMortgage Home Equity Loan Trust 1996-4,
Class A-4, 6.37% 2011 12000 11,963 2.51
Green Tree Financial Corp.:
Series 1995-9, Class A-5, 6.80% 2027 5000 5034
Series 1995-3, Class A-5, 7.30% 2025 2050 2092 1.91
Series 1996-10, Class A-5, 6.83% 2028 2000 2009
UCFL Acceptance Corp., Series 1996-D1,
Class A-5, 6.918% 2019 8500 8,594 1.80
Standard Credit Card Master Trust 1991-3, Class A,
8.875% 1999 5500 5589 1.17
California Infrasturcture and Economic Development Bank Special
Purpose Trust PG&E-1, Series 1997-1, Class A-6, 6.32% 2005 5500 5507 1.15
EQCC Home Equity Loan Asset-Backed Certificates,
Series 1996-A, Class A-2, 6.95% 2012 2000 2024 .42
IMC Home Equity Loan Trust, Series 1996-2,
Class A-2, 6.78% 2011 797 795 .17
Collateralized Mortgage Obligations
(Federal Agencies) (2) - 3.64%
Feddie Mac:
Series 1567, Class A, 6.15% 2023 (4) 9577 9026
Series 1948, Class PJ, 6.65% 2027 4000 3941
Series 1716, Class A, 6.50% 2009 2250 2198
Series 1507, Class JZ, 7.00% 2023 548 544 3.46
Series 83-B, Class B-3, 12.50% 2013 409 448
Series 1983, Class FB, 6.25% 2026 (4) 391 392
Fannie Mae, Series 1994-4, Class ZA, 6.50% 2024 904 841 .18
Federal Agency Obligations - Other - 3.08%
Freddie Mac, 6.555% 2006 8500 8383 1.76
FNSM Principal STRIPS:
0%/8.62% 2022 (5) 4500 4430
0%/8.25% 2022 (5) 2000 1882 1.32
Federal Collateralized Mortgage Obligations
(Privately Originated) (2) - 1.04%
Fannie Mae, 6.85% 2026 5087 4992 1.04
Financial - 0.25%
Signal Capital Corp. 9.95% 2006 1150 1182 .25
Telephone Utilities - 0.20%
BellSouth Savings and Security ESOP Trust 9.125% 2003 890 957 .20
----------------
TOTAL BONDS & NOTES (cost: $431,559,000) 441,341 92.40
----------------
Short-Term Securities
- ------------------------------------------------
Corporate Short-Term Notes - 9.22%
General Electric Capital Corp. 5.80% due 12/1/97 17700 17697 3.71
International Lease Finance Corp. 5.52% due 12/16/97 17400 17357 3.63
Kellogg Co. 5.50% due 12/12/97 9000 8984 1.88
----------------
TOTAL SHORT-TERM SECURITIES (cost: $44,038,000) 44038 9.22
----------------
TOTAL INVESTMENT SECURITIES (cost: $475,597,000) 485379 101.62
Excess of payables over cash and receivables 7,730 1.62
----------------
NET ASSETS $477,649100.00%
================
(1) Index-linked bond, which is a floating rate
bond whose principal amount moves with a
government retail price index.
(2) 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.
(3) Purchased in a private placement transaction;
resale to the public may require registration or sale only to
qualified institutional buyers.
(4) Coupon rate may change periodically.
(5) Step bond; coupon rate will
increase at a later date.
See Notes to Financial Statements
</TABLE>
<TABLE>
American Variable Insurance Series
Cash Management Fund
Investment Portfolio, November 30, 1997
<S> <C> <C> <C>
Principa Market
Amount Value Percent of
Short-Term Securities (000) (000) Net Assets
Corporate Short-Term Notes - 71.95%
General Mills, Inc. 5.62%-5.65% due 1/7-1/9/98 $ 8,500 $ 8,448 3.52%
General Electric Capital Corp. 5.48% due 12/8/97 8,000 7,990 3.33
Beneficial Corp. 5.50% due 12/12-12/19/97 8,000 7,980 3.33
Sherwin-Williams Co. 5.48% due 12/5/97 (1) 7,500 7,494 3.13
Gillette Co. 5.48% due 12/5/97 (1) 7,300 7,295 3.04
J.C. Penney Funding Corp. 5.60%-5.70% due 1/5-1/12/98 7,300 7,253 3.02
Gannett Co., Inc. 5.67%-5.75% due 1/8-1/15/98 (1) 7,300 7,250 3.02
Merck & Co., Inc. 5.47% due 12/1/97 7,100 7,099 2.96
Atlantic Richfield Co. 5.47% due 12/22/97 7,000 6,977 2.91
Pfizer Inc 5.50% due 12/2/97 (1) 6,500 6,498 2.71
Procter & Gamble Co. 5.49% due 12/9/97 6,000 5,992 2.50
H.J. Heinz Co. 5.48%-5.60% due 12/4/97-1/5/98 6,000 5,991 2.49
SBC Communications Inc. 5.52% due 12/8/97 (1) 5,500 5,493 2.29
Bell Atlantic Financial Services, Inc. 5.68%-5.70%
due 1/14-1/16/98 5,500 5,460 2.28
E.I. du Pont de Nemours and Co. 5.55% due 12/11/97 5,400 5,391 2.25
A.I. Credit Corp. 5.52% due 12/3/97 5,300 5,298 2.21
Kellogg Co. 5.63% due 1/15/98 5,200 5164 2.15
Xerox Corp. 5.49% due 12/2/97 5,000 4,999 2.08
Electronic Data Systems Corp. 5.49% due 12/11/97 (1) 5,000 4,992 2.08
Hershey Foods Corp. 5.50% due 12/11/97 5,000 4992 2.08
American Express Credit Corp. 5.49% due 12/16/97 5,000 4,988 2.08
Ameritech Corp. 5.50% due 12/16/97 (1) 5,000 4988 2.08
Albertson's, Inc. 5.57% due 12/16/97 5,000 4,988 2.08
Yale University 5.50% due 12/23/97 5,000 4982 2.08
Wal-Mart Stores, Inc. 5.52% due 12/1/97 4,300 4,299 1.79
Ford Motor Credit Co. 5.71% due 1/6/98 3,800 3778 1.58
Commercial Credit Co. 5.48% due 12/4/97 3,400 3,398 1.42
Lucent Technologies Inc. 5.48% due 12/2/97 3,000 2999 1.25
Schering Corp. 5.53% due 12/23/97 3,000 2989 1.25
Pitney Bowes Credit Corp. 5.60% due 1/9/98 3,000 2,981 1.24
Duke Energy Corp. 5.50% due 12/12/97 2,200 2,196 .92
Motorola Credit Corp. 5.60% due 12/31/97 1930 1921 .80
Federal Agency Obligations - 23.14%
Freddie Mac (formerly Federal Home Loan
Mortgage Corp.) 5.43%-5.50% due 12/11-12/31/97 31,700 31607 13.17
Fannie Mae (formerly Federal National
Mortgage Assn.) 5.46%-5.50% due 12/8-12/19/97 16,080 16049 6.70
Federal Home Loan Banks 5.50%-5.53% due 1/9-1/14/98 7,900 7850 3.27
Certificates of Deposit - 4.16%
Morgan Guaranty Trust Co. of New York 5.59% due 12/19 5000 5000 2.08
Wachovia Corp. 5.52% due 12/8/97 5000 5000 2.08
Bankers' Acceptances - 0.83%
BankAmerica Corp. 5.50% due 12/29/97 2,000 1991 0.83
-------------------
TOTAL INVESTMENT SECURITIES (cost: $240,060,000) 240060 100.08
Excess of payables over cash and receivables 185 0.08
-------------------
NET ASSETS $239,875 100.00%
===================
(1) Purchased in a private placement transaction; resale to the public
may require registration or sale only to qualified institutional buyers.
See Notes to Financial Statements
</TABLE>
<TABLE>
American Variable Insurance Series
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
at November 30, 1997
(dollars
in
thousands) Global Inter- Growth-
Growth Growth national Income
Fund Fund Fund Fund
- --------------------------------- ----------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities at market $126,392 $4,716,994$2,662,886$6,570,298
Cash 5 114 32 233
Receivables for-
Sales of investments 414 30,779 7,685 13,709
Sales of fund's shares 31 73 31 52
Open forward currency
contracts - - 1,826 -
Dividends and accrued
interest 151 991 5,911 11,431
--------- --------- --------- ----------
126,993 4,748,951 2,678,371 6,595,723
LIABILITIES: --------- --------- --------- ----------
Payables for-
Purchases of investments 136 1,264 16,184 5,575
Repurchases of fund's shares 11 652 422 1,103
Management services 69 1,548 1,253 1,887
Distribution fees - Class 2 (1) 9 14
Accrued expenses 6 90 384 119
--------- --------- --------- ----------
231 3,568 18,252 8,713
NET ASSETS AT ----------------------------------------
November 30, 1997 $126,762 $4,745,383$2,660,119$6,587,010
=========================================
Investment securities at cost $127,917 $3,389,105$2,385,297$4,867,544
=========================================
Class 1 (unlimited shares authorized):
Net Assets $80,271 $4,670,771$2,612,322$6,429,794
Shares of beneficial interest
outstanding 7,559,756 93,190,502162,594,75160,872,178
Net asset value per share $10.62 $50.12 $16.07 $39.97
Class 2 (unlimited shares authorized) (1):
Net Assets $46,491 $74,612 $47,797 $157,216
Shares of beneficial interest
outstanding 4,381,550 1,489,554 2,976,975 3,935,910
Net asset value per share $10.61 $50.09 $16.06 $39.94
U.S.
Government/
Asset High-YieldAAA-Rated
Allocation Bond Bond Securities
Fund Fund Fund Fund
----------------------------------------
ASSETS:
Investment securities at market $1,427,221 $142,313 $771,134 $485,379
Cash 1,113 62 929 26
Receivables for-
Sales of investments - - 1,885 -
Sales of fund's shares 45 15 11 -
Open forward currency
contracts - 7 147 -
Dividends and accrued
interest 8,418 1,717 13,884 3,984
--------- --------- --------- ----------
1,436,797 144,114 787,990 489,389
LIABILITIES: --------- --------- --------- ----------
Payables for-
Purchases of investments 1,055 103 1,434 11,447
Repurchases of fund's shares 204 21 158 78
Management services 518 60 317 198
Distribution fees - Class 2 (1)
Accrued expenses 31 2 19 15
--------- --------- --------- ----------
1,815 188 1,932 11,740
NET ASSETS AT ----------------------------------------
November 30, 1997 $1,434,982 $143,926 $786,058 $477,649
=========================================
Investment securities at cost $1,155,733 $139,229 $743,913 $475,597
=========================================
Class 1 (unlimited shares authorized):
Net Assets $1,393,415 $132,172 $765,413 $470,624
Shares of beneficial interest
outstanding 86,209,60812,449,55851,175,56242,109,994
Net asset value per share $16.16 $10.62 $14.96 $11.18
Class 2 (unlimited shares authorized) (1):
Net Assets $41,567 $11,754 $20,645 $7,025
Shares of beneficial interest
outstanding 2,573,220 1,107,877 1,381,229 628,985
Net asset value per share $16.15 $10.61 $14.95 $11.17
Cash
Management
Fund Total
--------------------
ASSETS:
Investment securities at market $240,060 $17,142,677
Cash 39 2,553
Receivables for-
Sales of investments - 54,472
Sales of fund's shares - 258
Open forward currency
contracts - 1,980
Dividends and accrued
interest 72 46,559
--------- ----------
240,171 17,248,499
LIABILITIES: --------- ----------
Payables for-
Purchases of investments - 37,198
Repurchases of fund's shares 195 2,844
Management services 92 5,942
Distribution fees - Class 2 (1) 78
Accrued expenses 7 673
--------- ----------
296 46,735
NET ASSETS AT --------------------
November 30, 1997 $239,875 $17,201,764
=====================
Investment securities at cost $240,060 $13,524,395
=====================
Class 1 (unlimited shares authorized):
Net Assets $226,046
Shares of beneficial interest
outstanding 20,316,468
Net asset value per share $11.13
Class 2 (unlimited shares authorized) (1):
Net Assets $13,829
Shares of beneficial interest
outstanding 1,243,706
Net asset value per share $11.12
1 Shares offered for sale
commencing on April 30, 1997.
See Notes to Financial Statements
</TABLE>
<TABLE>
American Variable Insurance Series (dollars
FINANCIAL STATEMENTS in
thousands)
Statement of Operations
for the year ended November 30, 1997
Global Inter- Growth-
Growth Growth national Income
Fund (1) Fund Fund Fund
--------------------------- ---------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $439 $18,508 $49,121 $96,848
Interest 473 24,088 10,452 43,091
--------------------------- ----------
912 42,596 59,573 139,939
--------------------------- ----------
Expenses:
Management services fee 310 17,154 15,477 21,263
Distribution fees - Class 2 (2) 32 46 34 99
Reports to shareholders 1 119 78 166
Registration statement and
prospectus 1 77 46 102
Postage, stationery and
supplies 1 67 47 98
Trustees' fees - 52 34 73
Auditing and legal fees - 49 32 71
Custodian fee 15 125 2,039 146
Taxes other than federal
income tax - 52 32 70
Other expenses 3 34 160 44
--------------------------- ----------
363 17,775 17,979 22,132
--------------------------- ----------
Net investment income 549 24,821 41,594 117,807
--------------------------- ----------
REALIZED GAIN (LOSS) AND
UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS:
Realized gain (loss) (99) 561,323 277,748 631,933
--------------------------- ----------
Net change in unrealized appreciation
(depreciation) on investments (1,529) 342,407 (93,902) 464,898
Net increase in unrealized appreciation
on open forward currency contracts - - 1,826 -
--------------------------- ----------
Net unrealized appreciation
(depreciation) (1,529) 342,407 (92,076) 464,898
--------------------------- ----------
Net realized gain (loss) and
unrealized appreciation (depreciation)
on investments (1,628) 903,730 185,672 1,096,831
--------------------------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $(1,079)$928,551 $227,266 $1,214,638
=========================== =========
U.S.
High- Government/
Asset Yield AAA-Rated
Allocatio Bond Bond Securities
Fund Fund Fund Fund
------------------------------------------
<S>
INVESTMENT INCOME:
Income:
Dividends $16,612 $ 124 $447 -
Interest 35,802 7,467 68,229 $35,077
--------------------------- ----------
52,414 7,591 68,676 35,077
--------------------------- ----------
Expenses:
Management services fee 5,806 557 3,624 2,444
Distribution fees - Class 2 (2) 26 7 14 5
Reports to shareholders 36 3 21 14
Registration statement and
prospectus 22 2 12 8
Postage, stationery and
supplies 21 2 12 8
Trustees' fees 16 1 9 7
Auditing and legal fees 15 1 9 7
Custodian fee 57 7 39 24
Taxes other than federal
income tax 16 2 10 7
Other expenses 12 2 8 7
--------------------------- ----------
6,027 584 3,758 2,531
--------------------------- ----------
Net investment income 46,387 7,007 64,918 32,546
--------------------------- ----------
REALIZED GAIN (LOSS) AND
UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS:
Realized gain (loss) 78,404 1,649 14,913 (9,383)
--------------------------- ----------
Net change in unrealized appreciation
(depreciation) on investments 86,689 1,006 4,975 6,202
Net increase in unrealized appreciation
on open forward currency contracts - 1 147 -
------------------------------------------
Net unrealized appreciation
(depreciation) 86,689 1,007 5,122 6,202
------------------------------------------
Net realized gain (loss) and
unrealized appreciation (depreciation)
on investments 165,093 2,656 20,035 (3,181)
--------------------------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $211,480 $9,663 $84,953 $29,365
==========================================
Cash
Manage-
ment
Fund Total
------------------
<S>
INVESTMENT INCOME:
Income:
Dividends - $182,099
Interest $13,554 238,233
-------------------
13,554 420,332
-------------------
Expenses:
Management services fee 1,113 67,748
Distribution fees - Class 2 (2) 11 274
Reports to shareholders 7 445
Registration statement and
prospectus 8 278
Postage, stationery and
supplies 4 260
Trustees' fees 4 196
Auditing and legal fees 3 187
Custodian fee 12 2,464
Taxes other than federal
income tax 4 193
Other expenses 6 276
-------------------
1,172 72,321
-------------------
Net investment income 12,382 348,011
-------------------
REALIZED GAIN (LOSS) AND
UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS:
Realized gain (loss) - 1,556,488
-------------------
Net change in unrealized appreciation
(depreciation) on investments - 810,746
Net increase in unrealized appreciation
on open forward currency contracts - 1,974
-------------------
Net unrealized appreciation
(depreciation) - 812,720
-------------------
Net realized gain (loss) and
unrealized appreciation (depreciation)
on investments 2,369,208
-------------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $12,382 $2,717,219
==================
1 For the period April 30, 1997, commencement of
operations, through November 30, 1997.
2 Shares offered for sale commencing on
April 30, 1997.
See Notes to Financial Statements
</TABLE>
<TABLE>
American Variable Insurance Series
FINANCIAL STATEMENTS
Statement of Changes in Net Assets Global
Growth Fund Growth Fund
-------- --------
Period ended Year ended Year ended
November 30, November 30, November 30,
1997 (1) 1997 1996
- ---------------------------------- -------- -------- --------
<S> <C> <C> <C>
OPERATIONS:
Net investment income $549 $24,821 $20,827
Net realized gain (loss) on investments (99) 561,323 269,265
Net unrealized appreciation (depreciation)
on investments (1,529) 342,407 183,049
-------- -------- --------
Net increase (decrease) in net assets
resulting from operations (1,079) 928,551 473,141
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (176) (24,809) (24,246)
Class 2 (3)
-------- -------- --------
Total dividends from net investment income
Distributions from net realized gain on
investments - (268,039) (259,930)
-------- -------- --------
Total dividends and distributions (238) (292,898) (284,176)
-------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 81,956 238,801 506,249
Proceeds from shares issued on reinvestment
of dividends and distributions 176 292,848 284,176
Cost of shares repurchased (6,631) (354,956) (273,482)
-------- -------- --------
Net increase (decrease) from Class 1 transac 75,501 176,693 516,943
-------- -------- --------
Class 2: (3)
Proceeds from shares sold 47,516 72,649 -
Proceeds from shares issued on reinvestment
of dividends 62 50 -
Cost of shares repurchased - (11) -
-------- -------- --------
Net increase from Class 2 transactions 47,578 72,688 -
Net increase (decrease) in net -------- -------- --------
assets resulting from capital share
transactions 123,079 249,381 516,943
-------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 121,762 885,034 705,908
NET ASSETS:
Beginning of year 5,000 (4) 3,860,349 3,154,441
-------- -------- --------
End of year $126,762 $4,745,383 $3,860,349
============ ============ ============
Undistributed net investment income $311 $4,612 $4,638
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 7,649,183 5,361,345 12,825,093
Shares issued on reinvestment of dividends
and distributions 15,620 7,259,293 7,512,662
Shares repurchased (605,047) (8,120,252) (7,086,581)
----------- -------- --------
Net increase (decrease) in shares outstandi 7,059,756 4,500,386 13,251,174
============ ============ ============
Class 2: (3)
Shares sold 4,376,072 1,488,730 -
Shares issued on reinvestment of dividends 5,510 1,040 -
Shares repurchased (32) (216) -
-------- -------- --------
Net increase in shares outstanding 4,381,550 1,489,554 -
============ ============ ============
International Fund Growth-Income Fund
-------- --------
Year ended Year ended Year ended
November 30, November 30, November 30,
1997 1996 1997
- ---------------------------------- -------- -------- --------
<S> <C> <C> <C>
OPERATIONS:
Net investment income $41,594 $40,449 $117,807
Net realized gain (loss) on investments 277,748 96,629 631,933
Net unrealized appreciation (depreciation)
on investments (92,076) 177,135 464,898
-------- -------- --------
Net increase (decrease) in net assets
resulting from operations 227,266 314,213 1,214,638
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (43,541) (42,718) (112,850)
Class 2 (3)
-------- -------- --------
Total dividends from net investment income (1
Distributions from net realized gain on
investments (94,763) (35,844) (373,625)
-------- -------- --------
Total dividends and distributions (138,470) (78,562) (487,043)
-------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 208,181 412,624 258,887
Proceeds from shares issued on reinvestment
of dividends and distributions 138,304 78,562 486,475
Cost of shares repurchased (196,240) (60,680) (287,990)
-------- -------- --------
Net increase (decrease) from Class 1 transac 150,245 430,506 457,372
-------- -------- --------
Class 2: (3)
Proceeds from shares sold 51,308 - 152,837
Proceeds from shares issued on reinvestment
of dividends 166 - 568
Cost of shares repurchased (24) - (2)
-------- -------- --------
Net increase from Class 2 transactions 51,450 - 153,403
Net increase (decrease) in net -------- -------- --------
assets resulting from capital share
transactions 201,695 430,506 610,775
-------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 290,491 666,157 1,338,370
NET ASSETS:
Beginning of year 2,369,628 1,703,471 5,248,640
-------- -------- --------
End of year $2,660,119 $2,369,628 $6,587,010
============ ============ ============
Undistributed net investment income $9,642 $7,669 $29,653
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 12,876,841 28,612,329 7,261,018
Shares issued on reinvestment of dividends
and distributions 8,982,981 5,605,115 14,498,052
Shares repurchased (11,853,859) (4,238,963) (7,793,511)
-------- -------- --------
Net increase (decrease) in shares outstandi 10,005,963 29,978,481 13,965,559
============ ============ ============
Class 2: (3)
Shares sold 2,969,078 - 3,921,601
Shares issued on reinvestment of dividends 9,366 - 14,358
Shares repurchased (1,469) - (49)
-------- -------- --------
Net increase in shares outstanding 2,976,975 - 3,935,910
============ ============ ============
Growth- Asset
Income Fund Allocation Fund
---------- -------- ---------
Year ended Year ended Year ended
November 30, November 30, November 30,
1996 1997 1996
-------- -------- --------
OPERATIONS:
Net investment income $101,854 $46,387 $38,391
Net realized gain (loss) on investments 373,978 78,404 72,509
Net unrealized appreciation (depreciation)
on investments 407,012 86,689 62,633
-------- -------- --------
Net increase (decrease) in net assets
resulting from operations 882,844 211,480 173,533
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (101,529) (43,924) (36,923)
Class 2 (3)
-------- -------- --------
Total dividends from net investment income
Distributions from net realized gain on
investments (159,645) (72,976) (30,506)
-------- -------- --------
Total dividends and distributions (261,174) (117,167) (67,429)
-------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 540,891 94,533 131,175
Proceeds from shares issued on reinvestment
of dividends and distributions 261,174 116,900 67,429
Cost of shares repurchased (128,364) (52,765) (33,309)
-------- -------- --------
Net increase (decrease) from Class 1 transac 673,701 158,668 165,295
-------- -------- --------
Class 2: (3)
Proceeds from shares sold - 40,846 -
Proceeds from shares issued on reinvestment
of dividends - 267 -
Cost of shares repurchased - (203) -
-------- -------- --------
Net increase from Class 2 transactions - 40,910 -
Net increase (decrease) in net -------- -------- --------
assets resulting from capital share
transactions 673,701 199,578 165,295
-------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 1,295,371 293,891 271,399
NET ASSETS:
Beginning of year 3,953,269 1,141,091 869,692
-------- -------- --------
End of year $5,248,640 $1,434,982 $1,141,091
============ ============ ============
Undistributed net investment income $25,264 $12,170 $9,974
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 16,813,646 6,313,389 9,441,738
Shares issued on reinvestment of dividends
and distributions 8,475,637 8,150,386 4,980,163
Shares repurchased (4,001,696) (3,428,456) (2,391,438)
-------- -------- --------
Net increase (decrease) in shares outstandi 21,287,587 11,035,319 12,030,463
============ ============ ============
Class 2: (3)
Shares sold - 2,569,382 -
Shares issued on reinvestment of dividends - 16,640 -
Shares repurchased - (12,802) -
-------- -------- --------
Net increase in shares outstanding - 2,573,220 -
============ ============ ============
Bond Fund High-Yield Bond Fund
-------- --------
Year ended Year ended Year ended
November 30, November 30, November 30,
1997 1996 (2) 1997
-------- -------- --------
OPERATIONS:
Net investment income $7,007 $2,470 $64,918
Net realized gain (loss) on investments 1,649 38 14,913
Net unrealized appreciation (depreciation)
on investments 1,007 2,083 5,122
-------- -------- --------
Net increase (decrease) in net assets
resulting from operations 9,663 4,591 84,953
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (5,948) (1,349) (61,513)
Class 2 (3)
-------- -------- --------
Total dividends from net investment income
Distributions from net realized gain on
investments - - -
-------- -------- --------
Total dividends and distributions (6,074) (1,349) (61,900)
-------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 52,881 73,438 74,311
Proceeds from shares issued on reinvestment
of dividends and distributions 5,948 1,349 61,513
Cost of shares repurchased (7,585) (1,604) (55,586)
-------- -------- --------
Net increase (decrease) from Class 1 transac 51,244 73,183 80,238
-------- -------- --------
Class 2: (3)
Proceeds from shares sold 11,571 - 20,198
Proceeds from shares issued on reinvestment
of dividends 126 - 387
Cost of shares repurchased (29) - (3)
-------- -------- --------
Net increase from Class 2 transactions 11,668 - 20,582
Net increase (decrease) in net -------- -------- --------
assets resulting from capital share
transactions 62,912 73,183 100,820
-------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 66,501 76,425 123,873
NET ASSETS:
Beginning of year 77,425 1,000 (5) 662,185
-------- -------- --------
End of year $143,926 $77,425 $786,058
============ ============ ============
Undistributed net investment income $2,081 $1,121 $17,389
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 5,092,091 7,434,995 5,078,465
Shares issued on reinvestment of dividends
and distributions 579,221 137,024 4,250,842
Shares repurchased (732,975) (160,798) (3,792,325)
-------- -------- --------
Net increase (decrease) in shares outstandi 4,938,337 7,411,221 5,536,982
============ ============ ============
Class 2: (3)
Shares sold 1,098,637 - 1,355,310
Shares issued on reinvestment of dividends 12,011 - 26,144
Shares repurchased (2,771) - (225)
-------- -------- --------
Net increase in shares outstanding 1,107,877 - 1,381,229
============ ============ ============
U.S. Government/
AAA-Rated
Securities Fund
--------
Year ended Year ended Year ended
November 30, November 30, November 30,
1996 1997 1996
-------- -------- --------
OPERATIONS:
Net investment income $55,086 $ 32,546 $38,502
Net realized gain (loss) on investments 4,194 (9,383) (2,883)
Net unrealized appreciation (depreciation)
on investments 17,642 6,202 (8,951)
-------- -------- --------
Net increase (decrease) in net assets
resulting from operations 76,922 29,365 26,668
-------- -------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (53,386) (34,740) (38,383)
Class 2 (3)
-------- -------- --------
Total dividends from net investment income
Distributions from net realized gain on
investments - - -
-------- -------- --------
Total dividends and distributions (53,386) (34,863) (38,383)
-------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 91,739 23,001 39,469
Proceeds from shares issued on reinvestment
of dividends and distributions 53,386 34,740 38,383
Cost of shares repurchased (40,681) (93,774) (96,167)
-------- -------- --------
Net increase (decrease) from Class 1 transac 104,444 (36,033) (18,315)
-------- -------- --------
Class 2: (3)
Proceeds from shares sold - 8,344 -
Proceeds from shares issued on reinvestment
of dividends - 123 -
Cost of shares repurchased - (1,538) -
-------- -------- --------
Net increase from Class 2 transactions - 6,929 -
Net increase (decrease) in net -------- -------- --------
assets resulting from capital share
transactions 104,444 (29,104) (18,315)
-------- -------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 127,980 (34,602) (30,030)
NET ASSETS:
Beginning of year 534,205 512,251 542,281
-------- -------- --------
End of year $662,185 $477,649 $512,251
============ ============ ============
Undistributed net investment income $14,357 $7,461 $9,778
============ ============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 6,502,188 2,087,594 3,523,988
Shares issued on reinvestment of dividends
and distributions 3,834,396 3,195,318 3,478,224
Shares repurchased (2,875,119) (8,543,011) (8,689,601)
-------- -------- --------
Net increase (decrease) in shares outstandi 7,461,465 (3,260,099) (1,687,389)
============ ============ ============
Class 2: (3)
Shares sold - 756,866 -
Shares issued on reinvestment of dividends - 11,218 -
Shares repurchased - (139,099) -
-------- -------- --------
Net increase in shares outstanding - 628,985 -
============ ============ ============
Cash Cash
Management Fund Management Fund
-------- --------
Year ended Year ended
November 30, November 30,
1997 1996
-------- --------
OPERATIONS:
Net investment income $12,382 10939
Net realized gain (loss) on investments - -
Net unrealized appreciation (depreciation)
on investments - -
-------- -------
Net increase (decrease) in net assets
resulting from operations 12,382 10,939
-------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (11,948) (10,336)
Class 2 (3) -
-------- --------
Total dividends from net investment income (10,336)
Distributions from net realized gain on
investments - -
-------- --------
Total dividends and distributions (12,130) (10,336)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 252,946 269,588
Proceeds from shares issued on reinvestment
of dividends and distributions 11,948 10,336
Cost of shares repurchased (279,424) (233,296)
-------- --------
Net increase (decrease) from Class 1 transac (14,530) 46,628
-------- --------
Class 2: (3)
Proceeds from shares sold 19,573 -
Proceeds from shares issued on reinvestment
of dividends 182 -
Cost of shares repurchased (5,950) -
-------- --------
Net increase from Class 2 transactions 13,805 -
Net increase (decrease) in net -------- --------
assets resulting from capital share
transactions (725) 46,628
-------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS (473) 47,231
NET ASSETS:
Beginning of year 240,348 193,117
-------- --------
End of year $239,875 $240,348
============ ============
Undistributed net investment income $3,341 $3,089
============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 22,809,829 24,337,746
Shares issued on reinvestment of dividends
and distributions 1,083,759 937,903
Shares repurchased (25,187,883) (21,049,530)
-------- --------
Net increase (decrease) in shares outstandi (1,294,295) 4,226,119
============ ============
Class 2: (3)
Shares sold 1,763,820 -
Shares issued on reinvestment of dividends 16,540 -
Shares repurchased (536,654) -
-------- --------
Net increase in shares outstanding 1,243,706 -
============ ============
Total
Year ended Year ended
November 30, November 30,
1997 1996
-------- --------
OPERATIONS:
Net investment income 348011 308518
Net realized gain (loss) on investments 1,556,488 813,730
Net unrealized appreciation (depreciation)
on investments 812,720 840,603
-------- --------
Net increase (decrease) in net assets
resulting from operations 2,717,219 1,962,851
-------- --------
DIVIDENDS AND DISTRIBUTIONS
PAID TO SHAREHOLDERS:
Dividends from net investment income:
Class 1 (339,449) (308,870)
Class 2 (3) -
-------- --------
Total dividends from net investment income (308,870)
Distributions from net realized gain on
investments (809,403) (485,925)
-------- --------
Total dividends and distributions (1,150,783) (794,795)
-------- --------
CAPITAL SHARE TRANSACTIONS:
Class 1:
Proceeds from shares sold 1,285,497 2,065,173
Proceeds from shares issued on reinvestment
of dividends and distributions 1,148,852 794,795
Cost of shares repurchased (1,334,951) (867,583)
-------- --------
Net increase (decrease) from Class 1 transac 1,099,398 1,992,385
-------- --------
Class 2: (3)
Proceeds from shares sold 424,842 -
Proceeds from shares issued on reinvestment
of dividends 1,931 -
Cost of shares repurchased (7,760) -
-------- --------
Net increase from Class 2 transactions 419,013 -
Net increase (decrease) in net -------- --------
assets resulting from capital share
transactions 1,518,411 1,992,385
-------- --------
TOTAL INCREASE (DECREASE) IN NET ASSETS 3,084,847 3,160,441
NET ASSETS:
Beginning of year 14,116,917 10,951,476
-------- --------
End of year $17,201,764 $14,111,917
============ ============
Undistributed net investment income $86,660 $75,890
============ ============
SHARES OF BENEFICIAL INTEREST:
Class 1:
Shares sold 74,529,755 109,491,723
Shares issued on reinvestment of dividends
and distributions 48,015,472 34,961,124
Shares repurchased (70,057,319) (50,493,726)
-------- --------
Net increase (decrease) in shares outstandi 52,487,908 93,959,121
============ ============
Class 2: (3)
Shares sold 20,299,496 -
Shares issued on reinvestment of dividends 112,827 -
Shares repurchased (693,317) -
-------- --------
Net increase in shares outstanding 19,719,006 -
============ ============
1 For the period April 30, 1997, commencement
of operations, through November 30, 1997.
2 For the period January 2, 1996, commencement
of operations, through November 30, 1996
3 Shares offered for sale commencing
April 30, 1997.
4 Represents initial capitalization from sale
of 500,000 Class 1 shares of beneficial interest.
5 Represents initial capitalization from sale
of 100,000 Class 1 shares of beneficial interest
See Notes to Financial Statements
</TABLE>
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 nine different funds. The ninth fund, the Global Growth
Fund, commenced operations on April 30, 1997. Also on that date, the series
commenced dual-class operations. The assets of each fund are segregated, with
each fund accounted for separately. The funds' investment objectives are as
follows: Global Growth
Fund - growth of capital by investing primarily in common stocks or securities
with common stock characteristics of issuers domiciled around the world; Growth
Fund - growth of capital by investing primarily in common stocks or securities
with common stock characteristics; International Fund - long-term growth of
capital by investing primarily in securities of issuers domiciled outside the
United States; Growth-Income Fund - growth of capital and income by investing
primarily in common stocks or other securities which demonstrate the potential
for appreciation and/or dividends; Asset Allocation Fund - high total return
(including income and capital gains) consistent with long-term preservation of
capital; Bond Fund - as high a level of current income as is consistent with
the preservation of capital by investing primarily in fixed-income securities;
High-Yield Bond Fund - high current income and secondarily capital appreciation
by investing primarily in intermediate and long-term corporate obligations,
with emphasis on higher yielding, higher risk, lower rated or unrated
securities; U.S. Government/AAA-Rated Securities Fund - a high level of current
income consistent with prudent investment risk and preservation of capital by
investing primarily in a combination of securities guaranteed by the U.S.
government and other debt securities rated AAA or Aaa; Cash Management Fund -
high current yield while preserving capital by investing in a diversified
selection of high-quality money market instruments.
Each fund in the series is authorized to offer multiple classes of shares.
Currently, each fund offers two classes of shares: Class 1 and Class 2. Class
1 shares are not subject to either an initial or contingent deferred sales
charge nor have they adopted a Plan of Distribution to cover any distribution
expenses. Class 2 shares are subject to certain fees pursuant to a Plan of
Distribution as described below. Both classes of shares have identical voting,
dividend, liquidation and other rights and shall have exclusive rights to vote
on matters affecting only individual classes. Income, expenses, and any
realized capital gains and losses not allocated to a particular class will be
allocated to each class on the basis of the net asset value of that class in
relation to net assets of the fund. Class-specific expenses will be allocated
to that particular class on a specific identification basis.
The following paragraphs summarize the significant accounting policies
consistently followed by the series in the preparation of its financial
statements:
Equity securities, including depositary receipts, are valued at the last
reported sale price on the exchange or market on which such securities are
traded, as of the close of business on the day the securities are being valued
or, lacking any sales, at the last available bid price. In cases where equity
securities are traded on more than one exchange, the securities are valued on
the exchange or market determined by the investment adviser to be the broadest
and most representative market, which may be either a securities exchange or
the over-the-counter market. Fixed-income securities are valued at prices
obtained from a pricing service, 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 quoted bid and asked prices or at prices
for securities of comparable maturity, quality and type.
Securities with original maturities of one year or less having 60 days or less
to maturity are amortized to maturity based on their cost if acquired within 60
days of maturity or, if already held on the 60th day, based on the value
determined on the 61st day. Forward currency contracts are valued at the mean
of representative quoted bid and asked prices.
Assets or liabilities initially expressed in terms of foreign currencies are
translated prior to the next determination of the net asset value of the fund's
shares into U.S. dollars at the prevailing market rates. The effects of
changes in foreign currency exchange rates on investment securities are
included with the net realized and unrealized gain or loss on investment
securities.
Securities and assets for which representative market quotations are not
readily available are valued at fair value as determined in good faith by a
committee appointed by 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. In the event
the series purchases securities on a delayed delivery or "when-issued" basis,
it will segregate with its custodian liquid assets in an amount sufficient to
meet its payment obligations in these transactions. 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. The series does not amortize premiums on securities
purchased. Dividends and distributions paid to shareholders are recorded on the
ex-dividend date.
The series may enter into forward currency contracts, which represent an
agreement to exchange currencies of different countries at a specified future
date at a specified rate. The series enters into these contracts to reduce its
exposure to fluctuations in foreign exchange rates arising from investments
denominated in non-U.S. currencies. The series' use of forward currency
contracts involves market risk in excess of the amount recognized in the
statement of assets and liabilities. The contracts are recorded in the
statement of assets and liabilities at their net unrealized value. The series
records realized gains or losses at the time the forward contract is closed or
offset by a matching contract. The face or contract amount in U.S. dollars
reflects the total exposure the series has in that particular contract. Risks
may arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from possible movements
in non-U.S. exchange rates and securities values underlying these instruments.
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.
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.
During the year ended November 30, 1997, the High-Yield Bond Fund utilized the
remaining capital loss carryforward totaling $6,501,000 to offset, for tax
purposes, capital gains realized during the year up to such amount. The U.S.
Government/AAA-Rated Securities Fund had available at November 30, 1997 a
capital loss carryforward totaling $19,579,000, which may be used to offset
capital gains realized during subsequent years through November 30, 2005. It is
the intention of the fund not to make distributions from capital gains while
there are capital loss carryforwards. During the year ended November 30, 1997,
the amounts of tax basis net capital gains/losses on securities transactions,
and the amounts of net gains related to non-U.S. currency transactions which
were treated as ordinary income for federal income tax purposes; and as of
November 30, 1997 the amounts for book and federal income tax purposes of
unrealized appreciation and depreciation, and the cost of portfolio securities,
excluding forward currency contracts, were as follows:
<TABLE>
(dollars in thousands)
Global Growth-
Growth Growth Interna- Income
Fund Fund tional Fu Fund
<S> <C> <C> <C> <C>
Tax basis net capital
gain (loss) $268 $581,546 $274,229 $631,933
Tax basis net currency
gain (loss) - 14 1,138 -
Unrealized
appreciation 6,548 1,513,114 517,233 1,787,152
Unrealized
depreciation 8,073 185,225 239,644 84,398
Net unrealized
appreciation
(depreciation) (1,525)1,327,889 277,589 1,702,754
Cost of portfolio
securities 127,917 3,389,1052,385,297 4,867,544
footnote Asset High-YielU.S. Government/
2) Allocati Bond Bond AAA-Rated
Fund Fund Fund Securities Fund
Tax basis net capital
gain (loss) $78,404 $1,634 $13,925 $(9,756)
Tax basis net currency
gain (loss) - 29 161 -
Unrealized
appreciation 283,615 4,025 40,812 10,977
Unrealized
depreciation 12,127 941 13,591 1,195
Net unrealized
appreciation
(depreciation) 271,488 3,084 27,221 9,782
Cost of portfolio
securities 1,155,73 139,229 743,913 475,597
Cash
Management
Fund Total
1,332,973 2,056,179
1,261,458 1,918,049
Tax basis net capital
gain (loss) - $1,572,183
Tax basis net currency
gain (loss) - 1,342
Unrealized
appreciation - 4,163,476
Unrealized
depreciation - 545,194
Net unrealized
appreciation
(depreciation) - 3,618,282
Cost of portfolio
securities $240,06013,524,395
</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: Global Growth Fund - 0.69% of average net assets; Growth Fund -
0.50% of the first $600 million of average net assets; 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; 0.37% of such assets in
excess of $2.0 billion but not exceeding $3.2 billion; and 0.35% of such assets
in excess of $3.2 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; 0.60% of such assets in excess of $600 million but not
exceeding $1.2 billion; 0.48% of such assets in excess of $1.2 billion but not
exceeding $2.0 billion; and 0.465% of such assets in excess of $2.0 billion;
Growth-Income Fund - 0.50% of the first $600 million of average net assets;
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;
0.32% of such assets in excess of $2.5 billion but not exceeding $4.0 billion;
and 0.285% of such assets in excess of $4.0 billion; Asset Allocation Fund -
0.50% of the first $600 million of average net assets; 0.42% of such assets in
excess of $600 million but not exceeding $1.2 billion; and 0.36% of such assets
in excess of $1.2 billion; Bond Fund - 0.60% of the first $30 million of
average net assets; and 0.50% of such assets in excess of $30 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.
The Board of Trustees has approved an amended Investment Advisory and Service
Agreement, which provides for reduced fees for the International Fund effective
December 1, 1997, at the following annual rates: 0.78% of the first $600
million of average net assets; 0.60% of such assets in excess of $600 million
but not exceeding $1.2 billion; 0.48% of such assets in excess of $1.2 billion
but not exceeding $2.0 billion; and 0.465% of such assets in excess of $2.0
billion. Beginning October 1, 1997, CRMC has voluntarily agreed to waive its
management fees in excess of those provided by the amended agreement.
Trustees who are unaffiliated with CRMC may elect to defer part or all of the
fees earned for services as members of the Board. Amounts deferred are not
funded and are general unsecured liabilities of the series. As of November
30,1997, aggregate amounts deferred and earnings thereon were $253,000.
Pursuant to a Plan of Distribution, each fund is authorized to pay 0.25% of
the average daily net assets of Class 2 shares in connection with certain
distribution services and related activities. During the year ended November
30, 1997, Plan expenses for the series aggregated $274,000. As of November 30,
1997, accrued and unpaid distribution expenses were $78,000.
4.
(dollars in thousands)
<TABLE>
Global Growth-
Growth Growth Interna- Income
Fund Fund tional Fu Fund
<S> <C> <C> <C> <C>
As of November 30, 1997:
Accumulated
undistributed
net realized
gain (loss) on
investments ($99) $561,009 $274,343 $631,524
Reclassification from
undistributed net
realized gain to
undistributed net
investment income - 12 4,086 -
Paid-in capital 128,079 2,851,8722,096,760 4,223,073
For the year
ended November 30,1997:
Purchases of
investment
securities (1) 120,913 (1,705,3721,332,973 2,056,179
Sales of invest-
ment securities (1) 8,310 (2) 1,810,9291,261,458 1,918,049
Asset High-YielU.S. Government/
Allocatio Bond Bond AAA-Rated
Fund Fund Fund Securities Fund
As of November 30, 1997:
Accumulated
undistributed
net realized
gain (loss) on
investments $77,850 $1,660 $7,736 ($20,405)
Reclassification from
undistributed net
realized gain to
undistributed net
investment income - 27 14 -
Paid-in capital 1,093,475 137,095 733,570 480,811
For the year
ended November 30,1997:
Purchases of
investment
securities (1) 540,208 96,410 444,916 241,610
Sales of invest-
ment securities (1) 385,045 44,969 334,892 287,863
Cash
Management
Fund Total
As of November 30, 1997:
Accumulated
undistributed
net realized
gain (loss) on
investments - $1,533,618
Reclassification from
undistributed net
realized gain to
undistributed net
investment income - 4,139
Paid-in capital $236,534 11,981,269
For the year
ended November 30,1997:
Purchases of
investment
securities (1) - 6,538,579
Sales of invest-
ment securities (1) - 6,051,515
(1) Excludes short-
term securities
(2) For the period
April 30, 1997,
commencement of
operations, through
May 31, 1997.
</TABLE>
5. 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 $2,464,000, of
which $252,000 was paid by these credits rather than in cash.
Dividend and interest income for the Global Growth Fund and the International
Fund is recorded net of non-U.S. taxes paid. For the year ended November 30,
1997, such non-U.S. taxes were $39,000 and $6,089,000, respectively. Net
realized currency gains/(losses) on dividends, interest, withholding taxes
reclaimable, and sales of non-U.S. bonds and notes for the year ended November
30, 1997 were $14,000, ($787,000), ($5,000) and ($5,000) for the Growth Fund,
the International Fund, the Bond Fund and the High-Yield Bond Fund,
respectively.
At November 30, 1997, the International Fund, the Bond Fund and the High-Yield
Bond Fund had outstanding forward currency contracts to sell non-U.S.
currencies as follows:
<TABLE>
Non-U.S. Currency Sale Contracts U.S.
<S>
Contract Valuation
Amount at 11/30/97 Unrealized
Fund Non-U.S. U.S. Amount Appreciation
--------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brazilian Real
expiring 10/6/98 International Fun BRL 9,251,0 $ 7,500,000 $ 6,952,000 $ 548,000
Japanese Yen
expiring 2/12/98 International FunJPY 5,593,500,0 45,587,000 44,309,000 1,278,000
Deutsche Marks
expiring 1/23/98 Bond Fund DM 983,0 566,000 559,000 7,000
expiring 2/3-2/25/98 High-Yield Bond F DM 14,809,0 8,573,000 8,426,000 147,000
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C>
PER-SHARE
DATA AND
RATIOS
Total
Net income
realized & (loss) Dividends
Net asset Net unrealized from from net
Year value, invest- gain (loss) invest- invest-
Ended beginning ment on invest- ment ment
11/30 of year income ments operations income
- --------- --------- --------- --------- --------- ---------
Global Growth Fund (2)
Class 1
1997 $10.00 $.06 $.59 $ 0.65 $(.03)
Class 2 (4)
1997 10.00 .03 0.60 (3) .63 (.02)
Growth Fund
Class 1
1993 $28.41 $.25 $ 4.13 $ 4.38 $(.24)
1994 32.34 .24 .69 .93 (.24)
1995 31.94 .33 10.63 10.96 (.29)
1996 41.81 .24 5.17 5.41 (.29)
1997 43.53 .27 9.61 9.88 (.27)
Class 2 (4)
1997 40.59 .11 9.51 9.62 (.12)
International Fund
Class 1
1993 $ 9.89 $.17 $2.50 $2.67 $(.16)
1994 12.40 .25 1.04 1.29 (.20)
1995 13.27 .34 1.02 1.36 (.33)
1996 13.89 .28 1.96 2.24 (.31)
1997 15.53 .25 1.18 1.43 (.27)
Class 2 (4)
1997 15.86 .13 .23 .36 (.16)
Growth Income Fund
Class 1
1993 $24.17 $.63 $2.12 $2.75 $(.63)
1994 26.01 .68 .14 .82 (.65)
1995 25.30 .73 7.20 7.93 (.73)
1996 31.47 .71 5.55 6.26 (.74)
1997 35.73 .73 6.78 7.51 (.72)
Class 2 (4)
1997 34.10 .37 5.82 6.19 (.35)
Asset Allocation Fund
Class 1
1993 $11.47 $.51 $ .67 $1.18 $(.49)
1994 12.01 .51 (.57) (.06) (.52)
1995 11.25 .50 2.69 3.19 (.50)
1996 13.77 .53 1.89 2.42 (.53)
1997 15.18 .55 1.94 2.49 (.54)
Class 2 (4)
1997 14.43 .29 1.69 1.98 (.26)
Bond Fund (5)
Class 1
1996 $10.00 $.40 $.16 $.56 $(.25)
1997 10.31 .63 .30 .93 (.62)
Class 2 (4)
1997 10.11 .35 .46 .81 (.31)
High-Yield Bond Fund
Class 1
1993 $14.17 $1.09 $ 1.20 $2.29 $(1.10)
1994 15.17 1.27 (2.07) (.80) (1.23)
1995 12.89 1.32 1.10 2.42 (1.32)
1996 13.99 1.28 .54 1.82 (1.30)
1997 14.51 1.29 .43 1.72 (1.27)
Class 2 (4)
1997 14.28 .69 .61 1.30 (.63)
U.S. Government/AAA-Rated Securities Fund
Class 1
1993 $11.53 $.74 $ .68 $1.42 $(.75)
1994 12.15 .76 (1.30) (.54) (.74)
1995 10.80 .82 .71 1.53 (.81)
1996 11.52 .83 (.24) .59 (.82)
1997 11.29 .76 (.07) .69 (.80)
Class 2 (4)
1997 10.83 .38 .33 .71 (.37)
Cash Management Fund
Class 1
1993 $11.04 $.29 - $.29 $(.31)
1994 11.02 .37 $ .02 .39 (.32)
1995 11.09 .63 (.02) .61 (.59)
1996 11.11 .54 .01 .55 (.54)
1997 11.12 .57 (.01) .56 (.55)
Class 2 (4)
1997 11.07 .28 .03 .31 (.26)
Distri-
butions
from Net asset Net assets,
Year net Total value, end of
Ended realized distri- end of Total year (in
11/30 gains butions year return millions)
- --------- --------- --------- --------- --------- ---------
Global Growth Fund (2)
Class 1
1997 - $ (.03) $10.62 6.45% (3) $80
Class 2 (4)
1997 - (.02) 10.61 6.28 (3) 46
Growth Fund
Class 1
1993 $ (.21) $ (.45) $32.34 15.59% $1,737
1994 (1.09) (1.33) 31.94 2.92 2,027
1995 (.80) (1.09) 41.81 35.35 3,154
1996 (3.40) (3.69) 43.53 14.32 3,860
1997 (3.02) (3.29) 50.12 24.57 4,671
Class 2 (4)
1997 - (.12) 50.09 23.73 (3) 75
International Fund
Class 1
1993 - $(.16) $12.40 27.20% $ 840
1994 $(.22) (.42) 13.27 10.48 1,405
1995 (.41) (.74) 13.89 10.78 1,703
1996 (.29) (.60) 15.53 16.66 2,370
1997 (.62) (.89) 16.07 9.52 2,612
Class 2 (4)
1997 - (.16) 16.06 2.20 (3) 48
Growth Income Fund
Class 1
1993 $ (.28) $ (.91) $26.01 11.63% $2,436
1994 (.88) (1.53) 25.30 3.21 2,740
1995 (1.03) (1.76) 31.47 33.14 3,953
1996 (1.26) (2.00) 35.73 21.02 5,249
1997 (2.55) (3.27) 39.97 22.92 6,430
Class 2 (4)
1997 - (.35) 39.94 18.18 (3) 157
Asset Allocation Fund
Class 1
1993 $(.15) $ (.64) $12.01 10.59% $ 578
1994 (.18) (.70) 11.25 (.54) 637
1995 (.17) (.67) 13.77 29.45 870
1996 (.48) (1.01) 15.18 18.65 1,141
1997 (.97) (1.51) 16.16 17.90 1,393
Class 2 (4)
1997 - (.26) 16.15 13.80 (3) 42
Bond Fund (5)
Class 1
1996 - $(.25) $10.31 5.74% (3) $ 77
1997 - (.62) 10.62 9.36 132
Class 2 (4)
1997 - (.31) 10.61 8.09 (3) 12
High-Yield Bond Fund
Class 1
1993 $(.19) $(1.29) $15.17 17.09% $379
1994 (.25) (1.48) 12.89 (5.71) 390
1995 - (1.32) 13.99 19.81 534
1996 - (1.30) 14.51 13.75 662
1997 - (1.27) 14.96 12.45 765
Class 2 (4)
1997 - (.63) 14.95 9.20 (3) 21
U.S. Government/AAA-Rated Securities Fund
Class 1
1993 $(.05) $(.80) $12.15 12.65% $505
1994 (.07) (.81) 10.80 (4.58) 463
1995 - (.81) 11.52 14.73 542
1996 - (.82) 11.29 5.49 512
1997 - (.80) 11.18 6.49 471
Class 2 (4)
1997 - (.37) 11.17 6.65 (3) 7
Cash Management Fund
Class 1
1993 - $(.31) $11.02 2.67% $206
1994 - (.32) 11.09 3.59 221
1995 - (.59) 11.11 5.65 193
1996 - (.54) 11.12 5.09 240
1997 - (.55) 11.13 5.21 226
Class 2 (4)
1997 - (.26) 11.12 2.87 (3) 14
Ratio
Ratio of of net Average
Year expenses income to commissions Portfolio
Ended to average average paid per turnover
11/30 net assets net assets share (1) rate
- --------- --------- --------- --------- ---------
Global Growth Fund (2)
Class 1
1997 0.44% (3) .80% (3) 3.70 c 13.22% (3)
Class 2 (4)
1997 .56 (3) .56 (3) 3.70 13.22 (3)
Growth Fund
Class 1
1993 0.50% 0.86% 6.43 c 20.40%
1994 .49 .78 6.09 29.58
1995 .47 .92 5.91 35.47
1996 .44 .61 5.42 30.88
1997 .42 .59 4.81 45.14
Class 2 (4)
1997 .37 (3) .08 (3) 4.81 45.14
International Fund
Class 1
1993 0.96% 1.75% .23 c 17.70%
1994 .80 2.03 1.01 19.66
1995 .75 2.64 .16 24.66
1996 .69 1.99 1.24 32.08
1997 .67 1.56 .41 50.12
Class 2 (4)
1997 .53 (3) .34 (3) .41 50.12
Growth Income Fund
Class 1
1993 0.49% 2.66% 7.02c 24.93%
1994 .47 2.72 6.39 29.26
1995 .44 2.70 6.21 26.91
1996 .41 2.26 5.75 31.27
1997 .38 2.01 4.87 37.55
Class 2 (4)
1997 .35 (3) .93 (3) 4.87 37.55
Asset Allocation Fund
Class 1
1993 0.55% 4.66% 6.85c 19.01%
1994 .53 4.55 6.38 36.13
1995 .52 4.11 6.27 39.89
1996 .49 3.88 5.60 50.62
1997 .47 3.63 4.98 34.14
Class 2 (4)
1997 .40 (3) 1.81 (3) 4.98 34.14
Bond Fund (5)
Class 1
1996 .52% (3) 6.18% (3) - 32.83% (3)
1997 .55 6.63 - 52.93
Class 2 (4)
1997 .44 (3) 3.50 (3) - 52.93
High-Yield Bond Fund
Class 1
1993 0.56% 8.18% - 34.05%
1994 .54 9.37 - 38.46
1995 .54 10.12 - 31.73
1996 .53 9.27 - 44.81
1997 .51 8.92 - 50.22
Class 2 (4)
1997 .43 (3) 4.92 (3) - 50.22
U.S. Government/AAA-Rated Securities Fund
Class 1
1993 0.55% 6.42% - 21.69%
1994 .54 6.69 - 45.21
1995 .54 7.37 - 30.11
1996 .53 7.33 - 30.45
1997 .52 6.73 - 53.80
Class 2 (4)
1997 .44 (3) 3.45 (3) - 53.80
Cash Management Fund
Class 1
1993 0.51% 2.57% - -
1994 .49 3.60 - -
1995 .49 5.37 - -
1996 .47 4.94 - -
1997 .47 4.99 - -
Class 2 (4)
1997 .41 (3) 2.80 (3) - -
(1) Brokerage
commissions paid on
portfolio transactions
increase the cost of
securities purchased
or reduce the proceeds
of securities sold,
and are not separately
reflected in the funds'
statement of
operations. Shares
traded on a principal
basis (without
commissions), such as
most over-the-counter
and fixed-income
transactions, are
excluded. Generally,
non-U.S. commissions
are lower than U.S.
commissions when
expressed as cents per
share but higher when
expressed as a
percentage of
transactions because
of the lower per-share
prices of many
non-U.S. securities.
(2) Commenced
operations April 30,
1997.
(3) Based on operations
for the period shown
and, accordingly, not
representative of a
full year's operations.
(4) Shares offered for
sale commencing
April 30, 1997.
(5) Commenced operations
January 2, 1996
</TABLE>
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 schedules of investments, 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 Global
Growth Fund, the Growth Fund, the International Fund, the Growth-Income Fund,
the Asset Allocation Fund, the Bond 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, 1997, the results of each of their operations for the year then
ended, the changes in each of their net assets for the years indicated, and the
per-share data and ratios for the years indicated, 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, 1997 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
PRICE WATERHOUSE LLP
Los Angeles, California
January 9, 1998
AMERICAN VARIABLE INSURANCE SERIES
BOARD OF TRUSTEES
Charles H. Black
Pacific Palisades, California
Private investor and consultant; former
Executive Vice President and Director,
KaiserSteel Corporation
H. Frederick Christie
Rolling Hills Estates, California
Private investor; former President and
Chief Executive Officer,
The Mission Group; former President,
Southern California Edison Company
Joe E. Davis
Encino, California
Private investor; former Chairman of the Board,
Linear Corporation; former President and
Chief Executive Officer,
National Health Enterprises, Inc.
Martin Fenton, Jr.
San Diego, California
Chairman of the Board,
Senior Resource Group, Inc.
(senior living centers management)
Mary Myers Kauppila
Boston, Massachusetts
Founder and President,
Energy Investment, Inc.
Richard H.M. Holmes retired from the Board effective December 16, 1997. He had
been a founding member of the Board of Trustees and the first President of the
series from 1983 to 1985. The Trustees thank him for his many contributions to
the series.
Kirk P. Pendleton
Southampton, Pennsylvania
Chairman of the Board and
Chief Executive Officer,
Cairnwood, Inc.
(venture capital investment)
James F. Rothenberg
Los Angeles, California
President of the series
President and Director,
Capital Research and Management Company
Thomas E. Terry
Los Angeles, California
Chairman of the Board of the series
Consultant;
former Vice President and Secretary,
Capital Research and Management Company
OTHER OFFICERS
James K. Dunton
Los Angeles, California
Senior Vice President of the series
Senior Vice President and Director,
Capital Research and Management Company
Abner D. Goldstine
Los Angeles, California
Senior Vice President of the series
Senior Vice President and Director,
Capital Research and Management Company
Michael J. Downer
Los Angeles, California
Vice President of the series
Senior Vice President - Fund Business Management Group,
Capital Research and Management Company
Claudia P. Huntington
Los Angeles, California
Vice President of the series
Director,
Capital Research and Management Company
Robert W. Lovelace
Los Angeles, California
Vice President of the series
Executive Vice President and Director,
Capital Research Company
Dina N. Perry
Washington, D.C.
Vice President of the series
Senior Vice President,
Capital Research and Management Company
John H. Smet
Los Angeles, California
Vice President of the series
Vice President,
Capital Research and Management Company
Chad L. Norton
Los Angeles, California
Secretary of the series
Vice President - Fund Business
Management Group,
Capital Research and Management Company
Robert P. Simmer
Norfolk, Virginia
Treasurer of the series
Vice President - Fund Business
Management Group,
Capital Research and Management Company
Sheryl F. Johnson
Norfolk, Virginia
Assistant Treasurer of the series
Assistant Vice President - Fund Business
Management Group,
Capital Research and Management Company
Steven N. Kearsley retired as an officer of the series effective June 18, 1997.
He served as Treasurer from 1983 to 1995 and Vice President from 1983 to 1997.
The Trustees thank him for his dedicated service to the series.
OFFICES OF THE SERIES AND OF
THE INVESTMENT ADVISER,
CAPITAL RESEARCH AND
MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, California 90071-1443
135 South State College Boulevard
Brea, California 92821-5804
CUSTODIAN OF ASSETS
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02105-1713
COUNSEL
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
400 South Hope Street
Los Angeles, California 90071-2889
This report is for the information of American Variable Insurance Series
investors, but it may also be used as sales literature when preceded or
accompanied by the current prospectus for American Variable Insurance Series
and the prospectus for the applicable insurance contract, which give details
about charges, expenses, investment objectives and operating policies. If used
as sales material after March 31, 1998, this report must be accompanied by an
American Legacy II Statistical Update for the most recently completed calendar
quarter.
Printed on recycled paper
Litho in USA MED/FS/3223
(c)1998 American Funds Distributors, Inc.
Lit. No. VI3-011-0198
