<PAGE>
Mutual of America
SEPARATE ACCOUNT NO. 2
SEMI-ANNUAL REPORT
&
SEMI-ANNUAL REPORTS OF
MUTUAL OF AMERICA INVESTMENT CORPORATION
SCUDDER VARIABLE LIFE INVESTMENT FUND
AMERICAN CENTURY VP CAPITAL APPRECIATION FUND
CALVERT SOCIAL BALANCED PORTFOLIO
FIDELITY INVESTMENTS(R) VARIABLE INSURANCE PRODUCTS FUND:
EQUITY-INCOME PORTFOLIO
FIDELITY INVESTMENTS(R) VARIABLE INSURANCE PRODUCTS
FUND II:
CONTRAFUND AND ASSET MANAGER PORTFOLIOS
JUNE 30, 1998
This report is not to be construed as an offering for sale of any Variable
Product. No offering is made except in conjunction with a prospectus which
must precede or accompany this report.
<PAGE>
MUTUAL OF AMERICA
SEPARATE ACCOUNT NO. 2
SEMI-ANNUAL REPORT
JUNE 30, 1998
Dear Participant:
We are pleased to send you the 1998 Semi-Annual Report of Mutual of
America's Separate Account No. 2. This Account is an investment vehicle for
participants in our Tax-Deferred Annuity, Voluntary Employee Contributions,
and Individual Retirement Annuity programs, Thrift and Section 457 Deferred
Compensation Plans, as well as for Flexible Premium Annuity policyholders.
Separate Account No. 2 consists of sixteen distinct funds. Each invests in
shares of one of eight funds of Mutual of America Investment Corporation (the
"Investment Company"): the Money Market, All America, Equity Index, Bond,
Short-Term Bond, Mid-Term Bond, Composite and Aggressive Equity Funds; three
portfolios of Scudder Variable Life Investment Fund ("Scudder"): the Bond,
Capital Growth and International Portfolios; the VP Capital Appreciation Fund
of American Century Variable Portfolios, Inc. ("American Century"); the
Calvert Social Balanced Portfolio of Calvert Variable Series, Inc. (formerly,
Acacia Capital Corporation's Calvert Responsibly Invested Portfolios)
("Calvert"); the Equity-Income Portfolio of Fidelity Investments Variable
Insurance Products Fund ("Fidelity VIP"); and the Contrafund and Asset Manager
Portfolios of Fidelity Investments Variable Insurance Products Fund II
("Fidelity VIP II").
Each of the funds of Separate Account No. 2 owns shares in a similarly named
fund of the Investment Company, portfolio of Scudder, fund of American
Century, portfolio of Calvert, portfolio of Fidelity VIP and portfolio of
Fidelity VIP II. The investment results of each of the funds of Separate
Account No. 2 are based on the performance of the corresponding funds or
portfolios of the Investment Company, Scudder, American Century, Calvert,
Fidelity VIP and Fidelity VIP II.
The Separate Account funds invest in funds and portfolios which have the
following investment objectives:
THE INVESTMENT COMPANY MONEY MARKET FUND: This Fund seeks to obtain high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital through investments in money
market instruments and other short-term debt securities.
THE INVESTMENT COMPANY ALL AMERICA FUND: The investment objective for
approximately 60% of the assets of this Fund (the "Indexed Assets") is to
provide investment results that, to the extent practical, correspond to the
performance of the Standard & Poor's Composite Index of 500 Stocks (the
"S&P 500"). The Indexed Assets are invested in the same manner as the
Equity Index Fund described below. The investment objective for the
remaining approximately 40% of the assets (the "Active Assets") is to
achieve a high level of total return, through both appreciation of capital
and, to a lesser extent, current income, by means of a diversified
portfolio of securities that may include common stocks, securities
convertible into common stocks, bonds and money market instruments.
THE INVESTMENT COMPANY EQUITY INDEX FUND: This Fund seeks to duplicate,
as closely as possible, the investment performance of the S&P 500 by
investing in approximately 500 publicly traded stocks that comprise the S&P
500 ("Standard & Poor's 500", "S&P" and "S&P 500" are trademarks of
Standard & Poor's Corporation).
THE INVESTMENT COMPANY BOND FUND: This Fund seeks a high level of current
income, together with preservation of capital, through investments in such
securities as U.S. Government, corporate and other notes and bonds.
THE INVESTMENT COMPANY SHORT-TERM BOND FUND: This Fund seeks a high level
of current income, together with preservation of capital, through
investments in such securities as U.S. Government, corporate and other
notes and bonds with an average maturity of one to three years.
THE INVESTMENT COMPANY MID-TERM BOND FUND: This Fund seeks a high level
of current income, together with preservation of capital, through
investments in such securities as U.S. Government, corporate and other
notes and bonds with an average maturity of three to seven years.
THE INVESTMENT COMPANY COMPOSITE FUND: This Fund seeks a high total rate
of return on investments, through both appreciation of capital and current
income, through investments in a diversified portfolio of common stocks,
bonds and money market instruments.
THE INVESTMENT COMPANY AGGRESSIVE EQUITY FUND: The investment objective
for approximately half of the assets of the Fund is to achieve capital
appreciation by investing in companies believed to possess above-average
growth potential. Growth can be in the areas of earnings or gross sales
which can be measured in either dollars or in unit volume. The investment
objective for the other half of the assets of the Fund is to achieve
capital appreciation by investing in companies believed to possess valuable
assets or whose securities are undervalued in the marketplace in relation
to factors such as a company's assets, earnings or growth potential.
I
<PAGE>
THE SCUDDER BOND PORTFOLIO: This Portfolio seeks a high level of income
consistent with the prudent investment of capital through a flexible
investment program emphasizing high-grade bonds.
THE SCUDDER CAPITAL GROWTH PORTFOLIO: This Portfolio seeks long-term
capital growth by investing primarily in common stocks of medium-to-large
sized U.S. companies. The Portfolio seeks to keep the value of its shares
more stable than other capital growth mutual funds. While current income is
not a stated objective of the Portfolio, many of the Portfolio's securities
may provide regular dividends, which are also expected to grow over time.
THE SCUDDER INTERNATIONAL PORTFOLIO: This Portfolio seeks long-term
growth of capital primarily through a diversified portfolio of foreign
equity securities.
VP CAPITAL APPRECIATION FUND: This Fund seeks capital growth over time by
investing primarily in common stocks that are considered by management to
have better-than-average prospects for appreciation.
THE CALVERT SOCIAL BALANCED PORTFOLIO (FORMERLY, CALVERT RESPONSIBLY
BALANCED PORTFOLIO): This Portfolio seeks a total return above the rate of
inflation through an actively managed portfolio of stocks, bonds and money
market instruments selected with a concern for the social impact of each
investment.
THE FIDELITY VIP EQUITY-INCOME PORTFOLIO: This Portfolio seeks reasonable
income by investing primarily in income-producing equity securities, while
considering the potential for capital appreciation. The Portfolio also
seeks to achieve a yield that exceeds the composite yield on the securities
comprising the S&P 500.
THE FIDELITY VIP II CONTRAFUND PORTFOLIO: This Portfolio seeks long-term
capital appreciation by investing primarily in a broad variety of common
stocks using both growth-oriented and contrarian disciplines.
THE FIDELITY VIP II ASSET MANAGER PORTFOLIO: This Portfolio seeks high
long-term return with reduced risk by using a broadly diversified mix of
stocks, bonds and short-term fixed-income investments.
For the six months ended June 30, 1998, the following total returns were
experienced in these sixteen Separate Account funds:
<TABLE>
<S> <C>
Investment Company Money Market Fund(1)............................. + 1.9%
Investment Company All America Fund................................. +13.5%
Investment Company Equity Index Fund................................ +16.6%
Investment Company Bond Fund........................................ + 3.2%
Investment Company Short-Term Bond Fund............................. + 2.0%
Investment Company Mid-Term Bond Fund............................... + 2.4%
Investment Company Composite Fund................................... + 9.0%
Investment Company Aggressive Equity Fund........................... + 0.6%
Scudder Bond Fund................................................... + 2.7%
Scudder Capital Growth Fund......................................... +15.0%
Scudder International Fund.......................................... +19.8%
American Century VP Capital Appreciation Fund....................... + 0.2%
Calvert Social Balanced Fund........................................ + 9.3%
Fidelity VIP Equity-Income Fund..................................... + 9.8%
Fidelity VIP II Contrafund.......................................... +15.9%
Fidelity VIP II Asset Manager Fund.................................. + 8.5%
</TABLE>
- -------
(1) The current seven-day net annualized yield as of 2/17/98 was 3.93% and is
not necessarily indicative of future actual yields.
Total return is equal to the changes in the value of a unit of participation
in a fund from the beginning to the end of the specified period. It reflects
investment income earned and reinvested plus the changes in the market value
(whether realized or unrealized) of the securities in the respective fund or
portfolio of the Investment Company, Scudder, American Century, Calvert or
Fidelity during the indicated period. Results are net of all charges,
including a monthly service charge (assessed against an average account
balance for all individually allocated contracts) based upon a hypothetical
$1,000 invested at the beginning of the period. These returns are not
guaranteed and are not necessarily indicative of the future investment
performance of the particular fund. Withdrawals and contributions made within
a period would experience different rates of return based on the respective
unit values on the dates of such transactions.
II
<PAGE>
This report includes financial statements for each fund of Separate Account
No. 2. Following this report are the financial statements for each similarly
named fund of the Investment Company, portfolio of Scudder, fund of American
Century, portfolio of Calvert and portfolios of Fidelity VIP and VIP II.
I hope you will find this report helpful and informative.
Sincerely,
/s/ Manfred Altstadt
Manfred Altstadt
Senior Executive Vice President and
Chief Financial Officer,
Mutual of America Life Insurance Company
III
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SEMI-ANNUAL REPORT OF MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2........... I
Statement of Assets and Liabilities..................................... V
Statement of Operations................................................. VII
Statements of Changes in Net Assets..................................... IX
Notes to Financial Statements........................................... XII
SEMI-ANNUAL REPORT OF MUTUAL OF AMERICA INVESTMENT CORPORATION........... 1
President's Message..................................................... 1
Portfolio Management Discussions........................................ 2
Portfolio of Investments in Securities:
Money Market Fund..................................................... 9
All America Fund...................................................... 10
Equity Index Fund..................................................... 19
Bond Fund............................................................. 25
Short-Term Bond Fund.................................................. 28
Mid-Term Bond Fund.................................................... 30
Composite Fund........................................................ 32
Aggressive Equity Fund................................................ 37
Statement of Assets and Liabilities..................................... 39
Statement of Operations................................................. 40
Statements of Changes in Net Assets..................................... 41
Financial Highlights.................................................... 43
Notes to Financial Statements........................................... 49
SEMI-ANNUAL REPORT OF SCUDDER VARIABLE LIFE INVESTMENT FUND
SEMI-ANNUAL REPORT OF VP CAPITAL APPRECIATION FUND OF AMERICAN CENTURY
VARIABLE PORTFOLIOS, INC.
SEMI-ANNUAL REPORT OF CALVERT SOCIAL BALANCED PORTFOLIO OF CALVERT
VARIABLE SERIES, INC.
SEMI-ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS
FUND: EQUITY-INCOME PORTFOLIO
SEMI-ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS
FUND II: CONTRAFUND PORTFOLIO
SEMI-ANNUAL REPORT OF FIDELITY INVESTMENTS VARIABLE INSURANCE PRODUCTS
FUND II: ASSET MANAGER PORTFOLIO
</TABLE>
IV
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------
MONEY MARKET ALL AMERICA EQUITY INDEX BOND
FUND FUND FUND FUND
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of
America Investment Corpo-
ration at market value
(Cost:
Money Market Fund --
$33,402,122
All America Fund --
$274,554,379
Equity Index Fund --
$161,532,364
Bond Fund -- $40,723,159
(Notes 1 and 2).......... $33,715,892 $392,508,544 $222,748,533 $42,349,766
Due From (To) Mutual of
America General Account.. 44,365 (83,003) 835,632 49,766
----------- ------------ ------------ -----------
Net Assets................ $33,760,257 $392,425,541 $223,584,165 $42,399,532
=========== ============ ============ ===========
Unit Value at June 30,
1998 ( Note 5)........... $ 1.99 $ 7.68 $ 2.63 $ 3.10
====== ====== ====== ======
Number of Units Outstand-
ing at June 30, 1998
(Note 5)................. 16,948,882 51,089,978 84,863,753 13,696,461
=========== ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
------------------------------------------------
AGGRESSIVE
SHORT-TERM MID-TERM COMPOSITE EQUITY
BOND FUND BOND FUND FUND FUND
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
Assets:
Investments in Mutual of
America Investment
Corporation at market value
(Cost:
Short-Term Bond Fund --
$3,161,618
Mid-Term Bond Fund --
$7,090,963
Composite Fund --
$273,826,760
Aggressive Equity Fund --
$140,504,146
(Notes 1 and 2)............. $3,180,097 $6,939,631 $289,505,938 $150,415,546
Due From (To) Mutual of
America General Account..... 5,525 5,910 (159,137) 115,893
---------- ---------- ------------ ------------
Net Assets................... $3,185,622 $6,945,541 $289,346,801 $150,531,439
========== ========== ============ ============
Unit Value at June 30, 1998
(Note 5).................... $ 1.22 $ 1.29 $ 4.76 $ 2.17
====== ====== ====== ======
Number of Units Outstanding
at June 30, 1998 (Note 5)... 2,616,555 5,379,428 60,819,342 69,442,129
========== ========== ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
V
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
SCUDDER AMERICAN CENTURY
-------------------------------------- ----------------
CAPITAL VP CAPITAL
BOND GROWTH INTERNATIONAL APPRECIATION
FUND FUND FUND FUND
----------- ------------ ------------- ----------------
<S> <C> <C> <C> <C>
Assets:
Investments in Scudder
Portfolios and American
Century VP Capital
Appreciation Fund at
market value
(Cost:
Scudder Bond Fund --
$19,540,438
Scudder Capital Growth
Fund -- $271,916,123
Scudder International
Fund -- $119,020,194
American Century VP
Capital Appreciation
Fund -- $42,171,567)
(Notes 1 and 2)........ $19,540,708 $400,081,473 $137,922,830 $40,262,534
Due From (To) Mutual of
America General
Account................ 290 7,997 (5,942) 24,982
----------- ------------ ------------ -----------
Net Assets.............. $19,540,998 $400,089,470 $137,916,888 $40,287,516
=========== ============ ============ ===========
Unit Value at June 30,
1998
(Note 5)............... $ 12.72 $ 34.14 $ 17.35 $ 11.08
======= ======= ======= =======
Number of Units
Outstanding at
June 30, 1998 (Note
5)..................... 1,535,952 11,719,450 7,949,653 3,637,313
=========== ============ ============ ===========
</TABLE>
<TABLE>
<CAPTION>
CALVERT FIDELITY
----------- ---------------------------------------
VIP
SOCIAL EQUITY- VIP II VIP II
BALANCED INCOME CONTRA ASSET MANAGER
FUND FUND FUND FUND
----------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Assets:
Investments in Calvert
Responsibly Invested
Portfolio and Fidelity
Portfolios at market value
(Cost:
Calvert Responsibly
Invested
Portfolio -- $31,789,351
VIP Equity-Income Fund --
$103,939,793
VIP II Contra Fund --
$105,690,241
VIP II Asset Manager
Fund -- $31,274,591)
(Notes 1 and 2)........... $39,588,765 $124,957,553 $143,266,972 $32,974,659
Due From (To) Mutual of
America General
Account................... 876 6,740 193,976 (161,010)
----------- ------------ ------------ -----------
Net Assets................. $39,589,641 $124,964,293 $143,460,948 $32,813,649
=========== ============ ============ ===========
Unit Value at June 30, 1998
(Note 5).................. $ 2.90 $ 30.52 $ 23.63 $ 22.97
====== ======= ======= =======
Number of Units Outstanding
at
June 30, 1998 (Note 5).... 13,658,887 4,094,194 6,071,646 1,428,539
=========== ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VI
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------------
MONEY MARKET ALL AMERICA EQUITY INDEX BOND
FUND FUND FUND FUND
------------ ----------- ------------ -----------------
<S> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $ -- $ -- $ -- $ --
-------- ----------- ----------- ----------
Total income............ -- -- -- --
-------- ----------- ----------- ----------
Expenses (Note 3):
Fees................... 206,683 2,318,359 1,171,621 257,154
Administrative
Expenses.............. 35,134 88,493 53,758 30,497
-------- ----------- ----------- ----------
Total Expenses.......... 241,817 2,406,852 1,225,379 287,651
-------- ----------- ----------- ----------
Net Investment Income
(loss)................. (241,817) (2,406,852) (1,225,379) (287,651)
-------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments (Note
1):
Net realized gain
(loss) on
investments........... (9,170) 5,242,916 1,186,231 66,769
Net unrealized
appreciation
(depreciation) of
investments........... 891,358 43,911,895 28,168,390 1,505,230
-------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... 882,188 49,154,811 29,354,621 1,571,999
-------- ----------- ----------- ----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $640,371 $46,747,959 $28,129,242 $1,284,348
======== =========== =========== ==========
<CAPTION>
MUTUAL OF AMERICA
---------------------------------------------------------
SHORT-TERM MID-TERM COMPOSITE AGGRESSIVE EQUITY
BOND FUND BOND FUND FUND FUND
------------ ----------- ------------ -----------------
<S> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $ -- $ -- $ -- $ --
-------- ----------- ----------- ----------
Total income............ -- -- -- --
-------- ----------- ----------- ----------
Expenses (Note 3):
Fees................... 18,999 39,558 1,749,559 964,726
Administrative
Expenses.............. 4,096 5,023 104,074 31,260
-------- ----------- ----------- ----------
Total Expenses.......... 23,095 44,581 1,853,633 995,986
-------- ----------- ----------- ----------
Net Investment Income
(Loss)................. (23,095) (44,581) (1,853,633) (995,986)
-------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments (Note
1):
Net realized gain
(loss) on
investments........... (4,113) (28,679) 200,817 725,525
Net unrealized
appreciation
(depreciation) of
investments........... 85,820 220,492 25,895,953 1,245,731
-------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... 81,707 191,813 26,096,770 1,971,256
-------- ----------- ----------- ----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $ 58,612 $ 147,232 $24,243,136 $ 975,270
======== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
AMERICAN
SCUDDER CENTURY CALVERT
----------------------------------- ------------ ----------
CAPITAL VP CAPITAL SOCIAL
BOND GROWTH INTERNATIONAL APPRECIATION BALANCED
FUND FUND FUND FUND FUND
-------- ----------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Investment Income and
Expenses:
Income (Notes 1 and 4):
Dividends.............. $618,550 $19,472,517 $15,648,053 $ 2,169,052 $ --
-------- ----------- ----------- ----------- ----------
Total income............ 618,550 19,472,517 15,648,053 2,169,052 --
-------- ----------- ----------- ----------- ----------
Expenses (Note 3):
Fees................... 118,218 2,295,216 790,871 231,820 227,408
Administrative
Expenses.............. 17,441 47,644 8,377 4,628 29,134
-------- ----------- ----------- ----------- ----------
Total Expenses.......... 135,659 2,342,860 799,248 236,448 256,542
-------- ----------- ----------- ----------- ----------
Net Investment Income
(Loss)................. 482,891 17,129,657 14,848,805 1,932,604 (256,542)
-------- ----------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments (Note
1):
Net realized gain on
investments........... (9,054) 1,998,698 4,593,339 (218,867) 101,753
Net unrealized
appreciation
(depreciation) of
investments........... 40,373 31,436,787 3,155,879 (1,526,404) 3,369,833
-------- ----------- ----------- ----------- ----------
Net Realized and
Unrealized Gain (Loss)
on Investments......... 31,319 33,435,485 7,749,218 (1,745,271) 3,471,586
-------- ----------- ----------- ----------- ----------
Net Increase (Decrease)
in Net Assets Resulting
from Operations........ $514,210 $50,565,142 $22,598,023 $ 187,333 $3,215,044
======== =========== =========== =========== ==========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
---------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
------------- ----------- -------------
<S> <C> <C> <C>
Investment Income and Expenses:
Income (Notes 1 and 4):
Dividends............................ $ 6,472,639 $ 6,753,142 $3,312,566
----------- ----------- ----------
Total income.......................... 6,472,639 6,753,142 3,312,566
----------- ----------- ----------
Expenses (Note 3):
Fees................................. 650,548 730,633 165,057
Administrative Expenses.............. 69,555 33,546 25,080
----------- ----------- ----------
Total Expenses........................ 720,103 764,179 190,137
----------- ----------- ----------
Net Investment Income (Loss).......... 5,752,536 5,988,963 3,122,429
----------- ----------- ----------
Net Realized and Unrealized Gain
(Loss) on Investments (Note 1):
Net realized gain (loss) on
investments......................... 67,188 790,886 11,503
Net unrealized appreciation
(depreciation) of investments....... 4,336,025 11,992,039 (802,768)
----------- ----------- ----------
Net Realized and Unrealized Gain
(Loss) on Investments................ 4,403,213 12,782,925 (791,265)
----------- ----------- ----------
Net Increase (Decrease) in Net Assets
Resulting from Operations............ $10,155,749 $18,771,888 $2,331,164
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
VIII
<PAGE>
MUTUAL OF AMERICA SEPERATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INVESTMENT COMPANY
------------------------------------------------------------------------------------
MONEY MARKET FUND ALL AMERICA FUND EQUITY INDEX FUND
-------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ (241,817) $ 1,562,015 $ (2,406,852) $ 38,428,360 $ (1,225,379) $ 1,775,466
Net realized gain
(loss) on
investments........... (9,170) 132,331 5,242,916 6,823,750 1,186,231 1,092,959
Net unrealized
appreciation
(depreciation) of
investments........... 891,358 (446,463) 43,911,895 22,669,697 28,168,390 24,542,212
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ 640,371 1,247,883 46,747,959 67,921,807 28,129,242 27,410,637
----------- ----------- ------------ ------------ ------------ ------------
From Unit Transactions:
Contributions.......... 3,865,777 5,788,009 15,779,428 31,724,926 16,063,189 22,975,577
Withdrawals............ (2,227,657) (4,229,179) (15,288,223) (21,956,687) (7,800,879) (6,932,093)
Net transfers.......... (1,366,825) (2,770,906) (1,502,144) 360,521 32,732,944 49,789,027
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
from unit
transactions........... 271,295 (1,212,076) (1,010,939) 10,128,760 40,995,254 65,832,511
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in Net Assets.......... 911,666 35,807 45,737,020 78,050,567 69,124,496 93,243,148
Net Assets:
Beginning of
Period/Year............ 32,848,591 32,812,784 346,688,521 268,637,954 154,459,669 61,216,521
----------- ----------- ------------ ------------ ------------ ------------
End of Period/Year...... $33,760,257 $32,848,591 $392,425,541 $346,688,521 $223,584,165 $154,459,669
=========== =========== ============ ============ ============ ============
<CAPTION>
INVESTMENT COMPANY
------------------------------------------------------------------------------------
BOND FUND SHORT-TERM BOND FUND MID-TERM BOND FUND
-------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income
(loss)................ $ (287,651) $ 1,945,958 $ (23,095) $ 133,338 $ (44,581) $ 278,336
Net realized gain
(loss) on
investments........... 66,769 111,901 (4,113) 17,305 (28,679) (98,969)
Net unrealized
appreciation
(depreciation) of
investment............ 1,505,230 889,880 85,820 (40,822) 220,492 101,700
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ 1,284,348 2,947,739 58,612 109,821 147,232 281,067
----------- ----------- ------------ ------------ ------------ ------------
From Unit Transactions:
Contributions.......... 2,917,336 4,701,303 363,610 668,221 454,952 813,398
Withdrawals............ (2,709,499) (4,020,196) (187,882) (647,104) (284,632) (586,994)
Net transfers.......... 2,936,246 (136,699) 143,174 252,496 986,892 585,047
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
from unit
transactions........... 3,144,083 544,408 318,902 273,613 1,157,212 811,451
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in Net Assets.......... 4,428,431 3,492,147 377,514 383,434 1,304,444 1,092,518
Net Assets:
Beginning of
Period/Year............ 37,971,101 34,478,954 2,808,108 2,424,674 5,641,097 4,548,579
----------- ----------- ------------ ------------ ------------ ------------
End of Period/Year...... $42,399,532 $37,971,101 $ 3,185,622 $ 2,808,108 $ 6,945,541 $ 5,641,097
=========== =========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
IX
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INVESTMENT COMPANY
--------------------------------------------------------
COMPOSITE FUND AGGRESSIVE EQUITY FUND
--------------------------- ---------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income.. $ (1,853,633) $ 55,725,648 $ (995,986) $ 13,631,161
Net realized gain
(loss) on
investments........... 200,817 3,228,464 725,525 808,445
Net unrealized
appreciation
(depreciation) of
investments........... 25,895,952 (20,441,501) 1,245,731 5,321,047
------------ ------------ ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ 24,243,136 38,512,611 975,270 19,760,653
------------ ------------ ------------ ------------
From Unit Transactions:
Contributions.......... 11,824,757 23,905,684 15,119,898 29,301,342
Withdrawals............ (11,761,330) (24,479,468) (7,469,386) (9,246,392)
Net transfers.......... (2,475,911) (20,666,992) (11,911,185) 24,458,890
------------ ------------ ------------ ------------
Net Increase (Decrease)
from unit
transactions........... (2,412,484) (21,240,776) (4,260,673) 44,513,840
------------ ------------ ------------ ------------
Net Increase (Decrease)
in Net Assets.......... 21,830,652 17,271,835 (3,285,403) 64,274,493
Net Assets:
Beginning of
Period/Year............ 267,516,149 250,244,314 153,816,842 89,542,349
------------ ------------ ------------ ------------
End of Period/Year...... $289,346,801 $267,516,149 $150,531,439 $153,816,842
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
SCUDDER
------------------------------------------------------------------------------------
BOND FUND CAPITAL GROWTH FUND INTERNATIONAL FUND
-------------------------- --------------------------- ---------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income.. $ 482,891 $ 791,376 $ 17,129,657 $ 14,929,366 $ 14,848,805 $ 1,048,262
Net realized gain
(loss) on
investments........... (9,054) (87,907) 1,998,698 3,989,169 4,593,339 10,918,585
Net unrealized
appreciation
(depreciation) of
investments........... 40,373 447,914 31,436,787 53,719,471 3,155,879 (3,147,476)
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in net assets resulting
from operations........ 514,210 1,151,383 50,565,142 72,638,006 22,598,023 8,819,371
----------- ----------- ------------ ------------ ------------ ------------
From Unit Transactions:
Contributions.......... 1,462,621 2,487,844 21,411,090 34,121,380 7,070,712 15,851,344
Withdrawls............. (909,348) (1,538,662) (14,369,983) (19,076,131) (5,933,174) (9,604,601)
Net Transfers.......... 125,622 610,052 13,649,602 36,296,377 (4,498,646) 377,532
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
from unit
transactions........... 678,895 1,559,234 20,690,709 51,341,626 (3,361,108) 6,624,275
----------- ----------- ------------ ------------ ------------ ------------
Net Increase (Decrease)
in Net Assets.......... 1,193,105 2,710,617 71,255,851 123,979,632 19,236,915 15,443,646
Net Assets:
Beginning of
Period/Year............ 18,347,893 15,637,276 328,833,619 204,853,987 118,679,973 103,236,327
----------- ----------- ------------ ------------ ------------ ------------
End of Period/Year...... $19,540,998 $18,347,893 $400,089,470 $328,833,619 $137,916,888 $118,679,973
=========== =========== ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
X
<PAGE>
MUTUAL OF AMERICA LIFE SEPARATE ACCOUNT NO. 2
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
AMERICAN CENTURY CALVERT
-------------------------- --------------------------
VP CAPITAL
APPRECIATION FUND SOCIAL BALANCED FUND
-------------------------- --------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
JUNE YEAR ENDED JUNE YEAR ENDED
30, 1998 DECEMBER 31, 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income.. $ 1,932,604 $ 710,068 $ (256,542) $ 1,887,424
Net realized gain
(loss) on
investments........... (218,867) 1,238,144 101,753 235,099
Net unrealized
appreciation
(depreciation) of
investments........... (1,526,404) (4,227,421) 3,369,833 2,600,706
------------ ------------ ----------- -----------
Net Increase (Decrease)
in net assets resulting
from operations........ 187,333 (2,279,209) 3,215,044 4,723,229
------------ ------------ ----------- -----------
From Unit Transactions:
Contributions.......... 2,944,737 8,707,773 3,678,606 6,373,996
Withdrawls............. (2,556,321) (6,920,015) (1,482,720) (2,497,692)
Net Transfers.......... (10,065,480) (33,483,832) 1,136,229 521,192
------------ ------------ ----------- -----------
Net Increase (Decrease)
from unit
transactions........... (9,677,064) (31,696,074) 3,332,115 4,397,496
------------ ------------ ----------- -----------
Net Increase (Decrease)
in Net Assets.......... (9,489,731) (33,975,283) 6,547,159 9,120,725
Net Assets:
Beginning of
Period/Year............ 49,777,247 83,752,530 33,042,482 23,921,757
------------ ------------ ----------- -----------
End of Period/Year...... $ 40,287,516 $ 49,777,247 $39,589,641 $33,042,482
============ ============ =========== ===========
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
------------------------------------------------------------------------------------
VIP VIP II VIP II
EQUITY-INCOME CONTRA ASSET MANAGER
FUND FUND FUND
--------------------------- --------------------------- --------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
From Operations:
Net investment income.. $ 5,752,536 $ 4,699,779 $ 5,988,963 $ 1,128,152 $ 3,122,429 $ 1,194,878
Net realized gain
(loss) on
investments........... 67,188 278,906 790,886 992,567 11,503 25,536
Net unrealized
appreciation
(depreciation) of
investments........... 4,336,025 11,806,259 11,992,039 16,333,421 (802,768) 1,637,367
------------ ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in net assets resulting
from operations........ 10,155,749 16,784,944 18,771,888 18,454,140 2,331,164 2,857,781
------------ ----------- ------------ ------------ ----------- -----------
From Unit Transactions:
Contributions.......... 10,696,300 16,485,680 11,110,097 21,050,465 3,633,722 5,663,920
Withdrawals............ (4,895,526) (5,431,923) (5,761,813) (6,172,824) (1,253,502) (1,306,235)
Net Transfers.......... 12,047,302 17,763,089 4,211,737 17,442,009 3,802,951 6,221,869
------------ ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
from unit
transactions........... 17,848,076 28,816,846 9,560,021 32,319,650 6,183,171 10,579,554
------------ ----------- ------------ ------------ ----------- -----------
Net Increase (Decrease)
in Net Assets.......... 28,003,825 45,601,790 28,331,909 50,773,790 8,514,335 13,437,335
Net Assets:
Beginning of
Period/Year............ 96,960,468 51,358,678 115,129,039 64,355,249 24,299,314 10,861,979
------------ ----------- ------------ ------------ ----------- -----------
End of Period/Year...... $124,964,293 $96,960,468 $143,460,948 $115,129,039 $32,813,649 $24,299,314
============ =========== ============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
XI
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Separate Account No. 2 of Mutual of America Life Insurance Company ("the
Company") was established in conformity with New York Insurance Law and
commenced operations on June 4, 1984. On October 31, 1986, Separate Account
No. 2 was reorganized into a unit investment trust consisting of four Funds:
the Money Market Fund, the All America Fund, the Bond Fund and the Composite
Fund. These Funds invest in corresponding funds of Mutual of America
Investment Corporation ("Investment Company"). Prior to May 2, 1994, the All
America Fund was known as the Stock Fund and had different investment
objectives and no sub-advisors.
On January 3, 1989, the following Funds became available to Separate Account
No. 2 as investment alternatives: Scudder Bond, Scudder Capital Growth,
Scudder International and VP Capital Appreciation Fund. The Scudder Funds
invest in corresponding portfolios of Scudder Variable Life Investment Fund
("Scudder"). The VP Capital Appreciation Fund invests in a corresponding fund
of American Century Variable Portfolios Inc. ("American Century"). Effective
May 13, 1991, the Calvert Social Balanced Fund (formerly, Calvert Responsibly
Invested Balanced Portfolio) became available as an investment alternative.
The Calvert Social Balanced Fund invests in a corresponding fund of Calvert
Social Balanced Portfolio of Calvert Variable Series, Inc. (formerly, the
Calvert Responsibly Invested Balanced Portfolio of Acacia Capital Corporation)
("Calvert").
On February 5, 1993 the Mutual of America Equity Index, Short-Term Bond and
Mid-Term Bond Funds became available to Separate Account No. 2 as investment
alternatives. On May 2, 1994 the Mutual of America Aggressive Equity Fund
became available as an investment option. These Funds invest in corresponding
funds of the Investment Company.
On May 1, 1995, Fidelity Investments Equity-Income, Contrafund and Asset
Manager Portfolios became available. The Fidelity Equity-Income Portfolio
invests in a corresponding portfolio of Fidelity Variable Insurance Products
Fund and the Contrafund and Asset Manager Portfolios invest in corresponding
portfolios of Fidelity Variable Insurance Products Fund II (collectively
"Fidelity").
Separate Account No. 2 was formed by the Company to support the operations
of the Company's group and individual variable accumulation annuity contracts
("Contracts"). The assets of Separate Account No. 2 are the property of the
Company. The portion of Separate Account No. 2's assets applicable to the
Contracts will not be charged with liabilities arising out of any other
business the Company may conduct.
The significant accounting policies of Separate Account No. 2 are as
follows:
Investment Valuation -- Investments are made in shares of the Investment
Company, Scudder, American Century, Calvert and Fidelity and are valued at the
reported net asset values of the respective funds or portfolios.
Investment Transactions -- Investment transactions are recorded on the trade
date. Realized gains and losses on sales of investments are determined based
on the average cost of the investment sold.
Federal Income Taxes -- Separate Account No. 2 will be treated as a part of
the Company and will not be taxed separately as a "regulated investment
company" under existing law. The Company is taxed as a life insurance company
under the life insurance tax provisions of the Internal Revenue Code of 1986.
No provision for income taxes is required in the accompanying financial
statements.
2. INVESTMENTS
The number of shares owned by Separate Account No. 2 and their respective
net asset values (rounded to the nearest cent) per share at June 30, 1998 are
as follows:
<TABLE>
<CAPTION>
NUMBER OF NET ASSET
SHARES VALUE
----------- ---------
<S> <C> <C>
Investment Company Funds:
Money Market Fund................................. 27,901,176 $ 1.21
All America Fund.................................. 126,588,218 3.10
Equity Index Fund................................. 91,221,510 2.44
Bond Fund......................................... 28,546,062 1.48
Short-Term Bond Fund.............................. 3,031,702 1.05
Mid-Term Bond Fund................................ 7,453,075 0.93
Composite Fund.................................... 162,574,553 1.78
Aggressive Equity Fund............................ 92,344,854 1.63
</TABLE>
XII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
NUMBER OF NET ASSET
SHARES VALUE
---------- ---------
<S> <C> <C>
Scudder Portfolios:
Bond Portfolio....................................... 2,840,219 $ 6.88
Capital Growth Portfolio--Class "A".................. 17,687,068 22.62
International Portfolio--Class "A"................... 9,300,258 14.83
American Century VP Capital Appreciation Fund......... 4,329,305 9.29
Calvert Social Balanced Portfolio..................... 18,135,028 2.18
Fidelity Portfolios:
Equity-Income--"Initial" Class....................... 4,964,543 25.17
Contrafund--"Initial" Class.......................... 6,526,969 21.95
Asset Manager--"Initial" Class....................... 1,911,574 17.25
</TABLE>
3. EXPENSES
Administrative Charges -- In connection with its administrative functions,
the Company deducts daily, at an annual rate of .40%, an amount from the value
of the net assets of all funds except the American Century VP Capital
Appreciation Fund for which the annual rate is .20% and each Fidelity fund,
for which the annual rate is .30%.
In addition, a deduction of up to $2.00 may be made at the end of each month
from a participant's account, except that such charge shall not exceed 1/12 of
1% of the balance in such account in any month.
Distribution Expense Charge -- As principal underwriter, the Company
performs all distribution and sales functions and bears all distribution and
sales expenses relative to the Contracts. For providing these services, the
Company deducts daily, at an annual rate of .35%, an amount from the value of
the net assets of each fund to cover such expenses.
Mortality and Expense Risk Charge -- The Company assumes the risk to make
annuity payments in accordance with annuity tables provided in the Contracts
regardless of how long a participant lives and also assumes certain expense
risks associated with such annuity payments. For assuming this risk, the
Company deducts daily, at an annual rate of .50%, an amount from the value of
the net assets of each fund.
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective funds or portfolios at net asset value. No dividend distributions
have been declared and none have been paid by the Investment Company during
the first six months of 1998. It is the Investment Company's practice to
declare and pay dividends at the end of the year.
On January 28, 1998, February 25, 1998 and April 28, 1998, dividends were
paid by the Scudder Bond Portfolio. The combined amount of the dividends was
$618,550.
On January 28, 1998, February 25, 1998 and April 28, 1998, dividends were
paid by the Scudder Capital Growth Portfolio. The combined amount of the
dividends was $19,472,517.
On February 25, 1998 a dividend was paid by the Scudder International
Portfolio. The amount of the dividend was $15,648,053.
On March 13, 1998 a dividend was paid by the American Century VP Capital
Appreciation Fund. The amount of the dividend was $2,169,052.
On February 6, 1998 a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $6,472,639.
On February 6, 1998, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $6,753,142.
On February 6, 1998, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $3,312,566.
XIII
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding throughout the
six months ended June 30, 1998 and each of the five years ended December 31,
1997, or, if not in existence a full year, the initial period ended December
31:
<TABLE>
<CAPTION>
INVESTMENT COMPANY MONEY MARKET FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $1.95 $1.87 $1.80 $1.72 $1.68 $1.65
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $1.99 $1.95 $1.87 $1.80 $1.72 $1.68
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 16,949 16,831 17,511 17,502 17,653 15,815
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY ALL AMERICA FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $6.76 $5.39 $4.52 $3.35 $3.36 $3.03
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $7.68 $6.76 $5.39 $4.52 $3.35 $3.36
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 51,090 51,312 49,798 43,620 38,669 36,510
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY EQUITY INDEX FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $2.26 $1.72 $1.42 $1.05 $1.05 $1.00
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $2.63 $2.26 $1.72 $1.42 $1.05 $1.05
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 84,864 68,462 35,660 17,109 4,644 2,135
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY BOND FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $3.00 $2.75 $2.69 $2.28 $2.39 $2.13
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $3.10 $3.00 $2.75 $2.69 $2.28 $2.39
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 13,696 12,671 12,548 12,083 10,601 12,244
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY
SHORT-TERM BOND FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $1.19 $1.14 $1.10 $1.03 $1.03 $1.00
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $1.22 $1.19 $1.14 $1.10 $1.03 $1.03
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 2,617 2,355 2,129 1,447 1,132 747
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY
MID-TERM BOND FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $1.26 $1.19 $1.16 $1.01 $1.06 $1.00
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $1.29 $1.26 $1.19 $1.16 $1.01 $1.06
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 5,379 4,478 3,828 2,848 1,444 1,411
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY COMPOSITE FUND
-----------------------------------------
1998 1997 1996 1995 1994 1993
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year...................... $4.36 $3.75 $3.39 $2.82 $2.95 $2.55
====== ====== ====== ====== ====== ======
Unit value, end of period/year.... $4.76 $4.36 $3.75 $3.39 $2.82 $2.95
====== ====== ====== ====== ====== ======
Thousands of units outstanding,
end of period/year............... 60,819 61,359 66,715 70,558 73,239 71,215
====== ====== ====== ====== ====== ======
<CAPTION>
INVESTMENT COMPANY
AGGRESSIVE EQUITY FUND
----------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of period/year..... $ 2.15 $ 1.80 $ 1.43 $ 1.05 $ 1.00
====== ====== ====== ====== ======
Unit value, end of period/year........... $ 2.17 $ 2.15 $ 1.80 $ 1.43 $ 1.05
====== ====== ====== ====== ======
Thousands of units outstanding, end of
period/year............................. 69,442 71,468 49,800 20,858 9,145
====== ====== ====== ====== ======
</TABLE>
XIV
<PAGE>
MUTUAL OF AMERICA SEPARATE ACCOUNT NO. 2
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SCUDDER BOND FUND
--------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year..................... $ 12.37 $ 11.48 $ 11.30 $ 9.69 $10.32 $ 9.30
======= ======= ======= ====== ====== ======
Unit value, end of period/year... $ 12.72 $ 12.37 $ 11.48 $11.30 $ 9.69 $10.32
======= ======= ======= ====== ====== ======
Thousands of units outstanding,
end of period/year.............. 1,536 1,484 1,362 1,269 1,169 1,277
======= ======= ======= ====== ====== ======
<CAPTION>
SCUDDER CAPITAL GROWTH FUND
--------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year..................... $ 29.64 $ 22.11 $ 18.64 $14.67 $16.46 $13.80
======= ======= ======= ====== ====== ======
Unit value, end of period/year... $ 34.14 $ 29.64 $ 22.11 $18.64 $14.67 $16.46
======= ======= ======= ====== ====== ======
Thousands of units outstanding,
end of period/year.............. 11,719 11,094 9,266 8,556 8,121 6,582
======= ======= ======= ====== ====== ======
<CAPTION>
SCUDDER INTERNATIONAL FUND
--------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year..................... $ 14.46 $ 13.43 $ 11.85 $10.80 $11.06 $ 8.13
======= ======= ======= ====== ====== ======
Unit value, end of period/year... $ 17.35 $ 14.46 $ 13.43 $11.85 $10.80 $11.06
======= ======= ======= ====== ====== ======
Thousands of units outstanding,
end of period/year.............. 7,950 8,205 7,688 7,269 8,610 5,400
======= ======= ======= ====== ====== ======
<CAPTION>
AMERICAN CENTURY
--------------------------------------------
VP CAPITAL APPRECIATION FUND
--------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year..................... $ 11.04 $ 11.53 $ 12.18 $ 9.39 $ 9.61 $ 8.81
======= ======= ======= ====== ====== ======
Unit value, end of period/year... $ 11.08 $ 11.04 $ 11.53 $12.18 $ 9.39 $ 9.61
======= ======= ======= ====== ====== ======
Thousands of units outstanding,
end of period/year.............. 3,637 4,510 7,264 8,061 6,361 5,946
======= ======= ======= ====== ====== ======
<CAPTION>
CALVERT
--------------------------------------------
SOCIAL BALANCED FUND
--------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year..................... $ 2.65 $ 2.23 $ 2.01 $ 1.57 $ 1.64 $ 1.54
======= ======= ======= ====== ====== ======
Unit value, end of period/year... $ 2.90 $ 2.65 $ 2.23 $ 2.01 $ 1.57 $ 1.64
======= ======= ======= ====== ====== ======
Thousands of units outstanding,
end of period/year.............. 13,659 12,479 10,713 7,849 5,986 5,151
======= ======= ======= ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
-------------------------------------------------------
EQUITY-INCOME FUND CONTRA FUND
--------------------------- ---------------------------
1998 1997 1996 1995 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period/year............ $27.77 $21.93 $19.43 $16.30 $20.36 $16.59 $13.85 $11.43
====== ====== ====== ====== ====== ====== ====== ======
Unit value, end of
period/year............ $30.52 $27.77 $21.93 $19.43 $23.63 $20.36 $16.59 $13.85
====== ====== ====== ====== ====== ====== ====== ======
Thousands of units
outstanding, end of
period/year............ 4,094 3,491 2,342 728 6,072 5,656 3,880 1,792
====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
FIDELITY
---------------------------
ASSET MANAGER FUND
---------------------------
1998 1997 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Unit value, beginning of period/year.............. $21.14 $17.72 $15.66 $14.04
====== ====== ====== ======
Unit value, end of period/year.................... $22.97 $21.14 $17.72 $15.66
====== ====== ====== ======
Thousands of units outstanding, end of
period/year...................................... 1,429 1,150 613 184
====== ====== ====== ======
</TABLE>
XV
<PAGE>
MUTUAL OF AMERICA LIFE INSURANCE COMPANY
320 Park Avenue New York, New York 10022-6839 212-224-1600
