<PAGE> 1
Semi-Annual Report
June 30, 1996
WRL Series Fund, Inc.
Aggressive Growth Portfolio
Emerging Growth Portfolio
Growth Portfolio
Global Portfolio
Tactical Asset Allocation Portfolio
Equity-Income Portfolio
Utility Portfolio
Balanced Portfolio
Bond Portfolio
Short-to-Intermediate Government Portfolio
Money Market Portfolio
C.A.S.E. Growth Portfolio
Value Equity Portfolio
Meridian/INVESCO Global Sector Portfolio
August 1996
ACC00001-S (8/96)
<PAGE> 2
- --------------------------------------------------------------------------------
T A B L E O F C O N T E N T S
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAGE
<S> <C>
Chairman's Letter..................................... 1
WRL SERIES FUND, INC.
Financial Statements:
Money Market Portfolio....................... 2
Bond Portfolio............................... 7
Growth Portfolio............................. 12
Short-to-Intermediate Government Portfolio... 18
Global Portfolio............................. 24
Equity-Income Portfolio...................... 32
Emerging Growth Portfolio.................... 39
Aggressive Growth Portfolio.................. 48
Balanced Portfolio........................... 54
Utility Portfolio............................ 60
Tactical Asset Allocation Portfolio.......... 66
C.A.S.E. Growth Portfolio.................... 73
Meridian/INVESCO Global Sector Portfolio..... 79
Value Equity Portfolio....................... 85
Notes to Financial Statements..................... 90
</TABLE>
THE PORTFOLIOS OF THE WRL SERIES FUND, INC. ARE MADE AVAILABLE THROUGH VARIABLE
LIFE INSURANCE, VARIABLE ANNUITY, AND GROUP ANNUITY PRODUCTS ISSUED BY WESTERN
RESERVE LIFE ASSURANCE CO. OF OHIO AND ITS AFFILIATES. THE AVAILABILITY OF
CERTAIN PORTFOLIOS MAY VARY FROM PRODUCT TO PRODUCT.
<PAGE> 3
FELLOW CONTRACT AND POLICY OWNERS:
(PHOTO) Shown is John R. Kenney, Chairman of the Board
JOHN R. KENNEY
Chairman of the Board
It hardly seems possible, but the first half of 1996 has drawn to a close. And
believe it or not, the Dow Jones Industrial Average -- the now-100-year-old
bellwether for the stock market -- stands some 500 points higher than it did in
January. A spectacular pace to be sure -- faster than the market's historical
average of 10% a year.
But make no mistake, the financial markets have been buffeted by more volatility
this year than they -- and we -- have experienced in some time.
Indeed, the relatively measured rise in the stock market averages masks some
rather abrupt corrections in many issues, especially in some of the more
unseasoned sectors of the market. The bond market, too, has proven to be
noticeably rambunctious these first six months, with long rates, widely expected
as the year began to move towards 5%, nudging instead above 7%.
Not so surprisingly, all of this commotion is leaving folks in and around the
financial markets a bit unnerved. And considering how far the markets have come,
in a way, it's only natural to fear they may be "running out of gas". But,
remember, it wasn't that long ago, just over two years in fact, when similar
anxieties surrounded the financial markets -- when fears of the "big correction"
so dominated investor psychology.
Of course, the so-called conventional wisdom of that time proved to be not so
wise, and the prophets of doom proved to be not so insightful. Nevertheless, it
wasn't easy to hold the course in such a volatile market. But investors who did
stick to their plans throughout it all have more than likely been rewarded for
it. Handsomely perhaps. Our hats are off to all of you.
We're pleased we could play a part. We remain proud of the manner in which the
WRL Series Fund portfolio managers have guided and are positioning funds in
these remarkable times. We are, of course, delighted with the results
they have posted. Please take a few minutes and review the personal comments
from these professionals regarding their respective Portfolios and just how
they've been investing for them. We invite you to evaluate these reports and
review the data, including major equity positions and industry weightings. All
of this information is intended to provide an insight into what has been some of
the industry's finest performance.
This period also marked the addition of three important and exciting new
Portfolios to the WRL Series Fund -- the Meridian/INVESCO Global Sector
Portfolio, co-managed by Meridian Investment Management Corporation and INVESCO
Global Asset Management Limited; the C.A.S.E. Growth Portfolio, managed by
C.A.S.E. Management, Inc.; and the Value Equity Portfolio, managed by NWQ
Investment Management Company, Inc. Make sure to ask your representative about
these new Portfolios with respect to your financial plan.
As for the rest of 1996, we're really not interested in making predictions on
what will or will not happen. After all, in the short term, the markets are
unpredictable. But long term, they're inevitable. The secret of wealth accum-
mulation in the market in the past has been long-term investing and not worrying
about the interim peaks and troughs. History has shown that investors often saw
better results the longer they held their investment. We're in it for the
long-term -- we are investors.
If it's true that success solicits success, then we're justified in our
optimistic outlook for this year and for years after that. The Portfolios of the
WRL Series Fund are managed not only with long-term results in mind but
long-term relationships as well. Our highest priority remains the safety of the
funds you've entrusted to us. We respect your personal task of financial
planning and appreciate the opportunity to help.
Sincerely yours,
/s/ JOHN R. KENNEY
---------------------------
John R. Kenney
Chairman of the Board
1
<PAGE> 4
WRL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------------ --------
<S> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (29.07%)
Federal Home Loan Mortgage Corp.
5.52%, due 07/01/96.............. $ 695,000 $ 694,787
Federal Home Loan Mortgage Corp.
5.27%, due 07/22/96.............. 5,000,000 4,983,165
Federal Home Loan Mortgage Corp.
5.29%, due 07/25/96.............. 3,500,000 3,486,628
Federal Home Loan Mortgage Corp.
5.28%, due 07/31/96.............. 5,000,000 4,976,533
Federal Home Loan Mortgage Corp.
5.30%, due 08/12/96.............. 3,000,000 2,980,567
Federal National Mortgage
Association
5.26%, due 07/12/96.............. 3,985,000 3,977,431
Federal National Mortgage
Association
5.55%, due 06/11/97.............. 4,000,000 3,997,054
U.S. Treasury Bills
4.96%, due 07/25/96.............. 212,000 210,527
U.S. Treasury Bills
4.90%, due 07/25/96.............. 36,000 35,873
U.S. Treasury Bills
5.01%, due 08/08/96.............. 42,000 41,766
U.S. Treasury Bills
5.12%, due 09/19/96.............. 92,000 90,927
U.S. Treasury Bonds
5.63%, due 06/30/97.............. 3,000,000 2,992,669
------------
Total Short-Term U.S. Government Obligations
(cost: $ 28,467,927)........................... 28,465,927
------------
COMMERCIAL PAPER (62.61%)
AUTOMOTIVE (7.13%)
Bayerische Vereinsbank
5.31%, due 07/08/96.............. 4,000,000 3,994,690
Ford Motor Credit Company
5.34%, due 07/16/96.............. 3,000,000 2,992,435
BEVERAGES (4.07%)
Coca-Cola Enterprises
5.29%, due 07/17/96.............. 4,000,000 3,989,420
COMMERCIAL BANKS (10.17%)
Banque Nationale de Paris
5.38%, due 08/07/96.............. 3,000,000 3,000,000
Canadian Imperial Bank
5.41%, due 08/26/96.............. 3,000,000 3,000,000
Chase Manhattan Bank
8.34%, due 08/09/96.............. 4,000,000 3,962,021
ELECTRONIC & OTHER ELECTRIC
EQUIPMENT (4.06%)
General Electric Capital
Corporation
5.30%, due 08/14/96.............. 4,000,000 3,972,911
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------------ --------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
FORESTRY (4.07%)
Weyerhaeuser Company
5.29%, due 07/17/96.............. $ 4,000,000 $ 3,989,420
INSURANCE (4.07%)
AIG Funding, Inc.
5.33%, due 07/16/96.............. 4,000,000 3,989,932
INDUSTRIAL MACHINERY & EQUIPMENT (4.07%)
John Deere Capital Corporation
5.28%, due 08/01/96.............. 4,000,000 3,980,640
MOTION PICTURES (4.08%)
Walt Disney Company
5.25%, due 07/08/96.............. 4,000,000 3,994,750
PETROLEUM REFINING (4.08%)
Chevron Oil Finance Co.
5.27%, due 07/09/96.............. 4,000,000 3,994,145
PHARMACEUTICALS (4.58%)
Eli Lilly & Company
5.34%, due 07/15/96.............. 4,500,000 4,489,320
TELECOMMUNICATIONS (12.23%)
AT&T Capital Corporation
5.28%, due 07/03/96.............. 4,000,000 3,997,654
BellSouth Capital Funding
5.31%, due 07/10/96.............. 4,000,000 3,993,510
Southwestern Bell
5.29%, due 07/08/96.............. 4,000,000 3,994,710
------------
Total Commercial Paper
(cost: $ 61,335,558)........................... 61,335,558
------------
BANK OBLIGATIONS (8.16%)
NationsBank Corporation
5.66%, due 04/30/97.............. 4,000,000 3,994,575
Societie Generale NY
5.80%, due 05/02/97.............. 4,000,000 4,000,000
------------
Total Bank Obligations
(cost: $ 7,994,575)............................ 7,994,575
------------
Total Investment Securities
(cost: $ 97,798,060)......................... $ 97,798,060
=============
SUMMARY
Investments at value................. 99.84% $ 97,798,060
Other Assets in
Excess of Liabilities............ 0.16% 160,904
-------- ------------
Net Assets......................... 100.00% $ 97,958,964
======== ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
2
<PAGE> 5
WRL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
CHART
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Short-term U.S. Government Obligations 29.07%
Automotive 7.13%
Beverages 4.07%
Commercial Banks 10.17%
Electronic & Other Electric Equipment 4.06%
Forestry 4.07%
Insurance 4.07%
Industrial Machinery & Equipment 4.07%
Motion Pictures 4.08%
Petroleum Refining 4.08%
Pharmaceuticals 4.58%
Telecommunications 12.23%
Bank Obligations 8.16%
Other 0.16%
</TABLE>
For the six months ended June 30, 1996, the Money Market Portfolio's net yield
was 2.49%.
Yields rose across the curve during the first quarter, despite an easing of the
Federal Funds Rate to 5.25% at the end of January. In addition, the February and
March employment reports, which showed surprisingly strong job growth, were
factors leading to the rise in yields. In the second quarter, yields continued
to rise with the release of economic data showing continued growth, leading
investors to expect the Federal Reserve Board (Fed) to raise rates. However, the
Consumer Price Index and the Producer Price Index continue to show subdued
inflation. The Money Market yield curve (yields on three-month to 12-month
instruments) steepened to 50 basis points as of June 30, 1996, from 5 basis
points at year-end 1995. We expect a Fed tightening by the end of summer and
believe that the higher interest rates will succeed in moderating the economy
while simultaneously controlling inflation.
The Portfolio invests only in high-quality U.S. dollar-denominated securities.
All securities in the Portfolio are rated A1/P1, AA or better, or of comparable
credit quality as determined by J.P. Morgan Investment Management Inc. It
maintains a weighted average of not more than 90 days, investing in individual
securities with effective maturities of not more than 13 months.
J.P. Morgan Investment assumed management of the Portfolio on May 1, 1996. The
Portfolio intends to maintain its average life at around 50 days and is
currently taking advantage of the higher yields offered by floating-rate notes,
commercial paper, and agency sectors, at the expense of Treasuries.
<TABLE>
<C> <S>
/s/ Robert R. Johnson
------------------------------
Robert R. Johnson
J.P. MORGAN INVESTMENT Money Market Portfolio Manager
</TABLE>
An investment in the Money Market Portfolio is neither insured nor guaranteed by
the U.S. Government
and there can be no assurance that the Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
- --------------------------------------------------------------------------------
3
<PAGE> 6
WRL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 0)..................................... $ 0
Short-term securities, at amortized cost......... 97,798,060
Cash............................................. 402
Cash collateral.................................. 0
Receivables:
Fund shares sold............................... 0
Securities sold................................ 0
Interest....................................... 207,742
Dividends...................................... 0
Other.......................................... 0
-------------
Total assets................................. 98,006,204
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 0
Accounts payable and accrued liabilities:
Investment advisory fees....................... 29,172
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 13,668
Deposits for securities on loan................ 0
Other fees..................................... 4,400
-------------
Total liabilities............................ 47,240
-------------
Total net assets........................... $ 97,958,964
==============
NET ASSETS:
Capital stock
($ .01 par value 150,000,000 authorized)....... $ 979,590
Additional paid-in capital....................... 96,979,374
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 0
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 0
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 0
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 97,958,964
==============
Shares outstanding at June 30, 1996.............. 97,958,964
==============
Net asset value per share........................ $ 1.00
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 2,407,170
Dividends.................................... 0
----------------
Total investment income................ 2,407,170
----------------
EXPENSES:
Investment advisory fees..................... 201,965
Printing and shareholder reports............. 7,608
Custody fees................................. 15,108
Legal fees................................... 141
Auditing and accounting fees................. 2,524
Directors fees............................... 112
Registration Fees............................ 45
Other fees................................... 0
----------------
Total expenses........................... 227,503
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 497
----------------
Net expenses........................... 227,006
----------------
Net investment income (loss)................. 2,180,164
----------------
Net realized gain (loss) on:
Investment securities.................... 0
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 0
----------------
Net gain (loss) on investments........... 0
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 2,180,164
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
4
<PAGE> 7
WRL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................. $ 2,180,164 $ 4,476,538
Net realized gain (loss) on investments.................................................. 0 0
Change in unrealized appreciation (depreciation) on investments.......................... 0 0
---------------- -----------------
Net increase (decrease) in net assets resulting from operations........................ 2,180,164 4,476,538
---------------- -----------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.................................................................... (2,180,164) (4,476,538)
Net realized gains....................................................................... 0 0
---------------- -----------------
Total distributions.................................................................... (2,180,164) (4,476,538)
---------------- -----------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares........................................................ 78,191,237 114,390,840
Dividends and distributions reinvested................................................... 2,180,164 4,476,538
Cost of shares repurchased............................................................... (62,956,109) (131,404,321)
---------------- -----------------
Increase (decrease) in net assets from capital shares transactions..................... 17,415,292 (12,536,943)
---------------- -----------------
Net increase (decrease) in net assets.................................................. 17,415,292 (12,536,943)
NET ASSETS:
Beginning of period...................................................................... 80,543,672 93,080,615
---------------- -----------------
End of period............................................................................ $ 97,958,964 $ 80,543,672
================== ===================
Undistributed net investment income.................................................... $ 0 $ 0
================== ===================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................. 80,543,672 93,080,615
---------------- -----------------
Shares issued............................................................................ 78,191,237 114,390,840
Shares issued - reinvestment of dividends and distributions.............................. 2,180,164 4,476,538
Shares redeemed.......................................................................... (62,956,109) (131,404,321)
---------------- -----------------
Increase (decrease) in shares outstanding................................................ 17,415,292 (12,536,943)
---------------- -----------------
Shares outstanding - end of period....................................................... 97,958,964 80,543,672
================== ===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
5
<PAGE> 8
WRL SERIES FUND, INC.
MONEY MARKET PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- -----------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from operations:
Net investment income (loss)......... .02 .05 .04 .02 .03 .05 .07 .07
Net realized and unrealized
gain (loss) on investments......... .00 .00 .00 .00 .00 .00 .00 .00
------- -------- -------- -------- -------- -------- -------- -------
Total income (loss) from
operations....................... .02 .05 .04 .02 .03 .05 .07 .07
------- -------- -------- -------- -------- -------- -------- -------
Distributions:
Dividends from net investment income. (.02 ) (.05) (.04) (.02) (.03) (.05) (.07) (.07)
Distributions from net realized gains
on investments..................... .00 .00 .00 .00 .00 .00 .00 .00
------- -------- -------- -------- -------- -------- -------- -------
Total distributions................ (.02 ) .(05) (.04) (.02) (.03) (.05) (.07) (.07)
------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end of period.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ========== ========= =========
Total return............................ 2.49% 5.40% 3.44% 2.45% 3.03% 5.25% 7.09% 8.09%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................ $97,959 $ 80,544 $ 93,081 $ 45,782 $ 45,600 $ 33,695 $ 24,931 $ 6,233
Ratio of expenses to average net
assets................................ .53% .56% .60% .66% .70% .70% .66% .70%
Ratio of net investment income (loss)
to average net assets................ 5.04% 5.30% 3.59% 2.41% 2.99% 5.07% 7.09% 7.82%
Ratio of commission paid to number of
shares............................... n/a n/a n/a n/a n/a n/a n/a n/a
Portfolio turnover rate................ n/a n/a n/a n/a n/a n/a n/a n/a
<CAPTION>
1988 1987 1986+
------- ----- -----
<S> <C> <C> <C>
Net asset value, beginning of period.... $ 1.00 $1.00 $1.00
Income from operations:
Net investment income (loss)......... .05 .04 .01
Net realized and unrealized
gain (loss) on investments......... .00 .00 .00
------- ----- -----
Total income (loss) from
operations....................... .05 .04 .01
------- ----- -----
Distributions:
Dividends from net investment income. (.05) (.04) (.01)
Distributions from net realized gains
on investments..................... .00 .00 .00
------- ----- -----
Total distributions................ (.05) (.04) (.01)
------- ----- -----
Net asset value, end of period.......... $ 1.00 $1.00 $1.00
========= ======= ========
Total return............................ 5.77% 4.56% 1.14%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................ $ 5,114 $ 582 $101
Ratio of expenses to average net
assets................................ .70% .89% .12%
Ratio of net investment income (loss)
to average net assets................ 6.26% 4.83% 1.14%
Ratio of commission paid to number of
shares............................... n/a n/a n/a
Portfolio turnover rate................ n/a n/a n/a
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was October 2, 1986. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
6
<PAGE> 9
WRL SERIES FUND, INC.
BOND PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (41.86%)
U.S. Treasury Bonds(a)
6.88%, due 05/15/06............. $ 9,000,000 $ 9,092,700
U.S. Treasury Notes
7.75%, due 11/30/99............. 1,500,000 1,562,010
U.S. Treasury Bonds
7.88%, due 11/15/04............. 23,000,000 24,723,390
U.S. Treasury Notes(a)
6.38%, due 03/31/01............. 3,000,000 2,986,200
------------
Total U.S. Government Obligations
(cost: $ 36,568,810).......................... 38,364,300
------------
CORPORATE DEBT SECURITIES (34.03%)
CHEMICALS & ALLIED PRODUCTS (1.05%)
Witco Corporation
7.75%, due 04/01/23............. 1,000,000 966,250
COMMERCIAL BANKS (14.66%)
BankAmerica Corporation
7.20%, due 04/15/06............. 2,000,000 1,975,000
Chase Manhattan Corporation
6.75%, due 08/15/08............. 2,000,000 1,885,000
Mellon Financial Company
6.70%, due 03/01/08............. 3,000,000 2,817,930
NationsBank Corporation
6.88%, due 02/15/05............. 2,000,000 1,940,000
NBD Bancorp, Inc.
7.13%, due 05/15/07............. 3,000,000 2,936,250
Swiss Bank Corporation
7.00%, due 10/15/15............. 2,000,000 1,882,500
FINANCE (5.23%)
Commercial Credit Corporation
6.50%, due 06/01/05............. 1,000,000 1,005,383
Ford Motor Credit Company
6.75%, due 08/15/08............. 4,000,000 3,785,000
FOOD & KINDRED PRODUCTS (3.19%)
Hershey Foods Corporation
6.70%, due 10/01/05............. 3,000,000 2,925,000
INDUSTRIAL MACHINERY & EQUIPMENT (2.05%)
Case Corporation
7.25%, due 01/15/16............. 2,000,000 1,875,000
LIFE INSURANCE (2.03%)
CPC International, Inc.
6.15%, due 01/15/06............. 2,000,000 1,860,000
MOTION PICTURES (3.18%)
Walt Disney Company
6.75%, due 03/30/06............. 3,000,000 2,910,000
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
CORPORATE DEBT SECURITIES (CONTINUED)
RESTAURANTS (2.64%)
McDonald's Corporation
7.38%, due 07/15/33............. $ 1,500,000 $ 1,430,626
PepsiCo, Inc.
7.05%, due 05/15/06............. 1,000,000 990,313
------------
Total Corporate Debt Securities
(cost: $ 31,899,649).......................... 31,184,252
------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (9.82%)
Federal Home Loan Mortgage Corp.
5.25%, due 07/01/96............. 7,000,000 6,997,958
Federal Home Loan Mortgage Corp.
5.48%, due 07/01/96............. 2,000,000 1,999,391
------------
Total Short-Term U.S. Government Obligations
(cost: $ 8,997,349)........................... 8,997,349
------------
COMMERCIAL PAPER (13.30%)
General Electric Capital
Corporation
5.35%, due 07/02/96............. 4,500,000 4,497,994
Household Finance Corp.
5.50%, due 07/01/96............. 3,700,000 3,698,869
Prudential Funding Corporation
5.35%, due 07/02/96............. 4,000,000 3,998,217
------------
Total Commercial Paper
(cost: $ 12,195,080).......................... 12,195,080
------------
Total Investment Securities
(cost: $ 89,660,888)........................ $ 90,740,981
=============
SUMMARY
Investments at value.............. 99.01% $ 90,740,981
Other Assets in
Excess of Liabilities........... 0.99% 909,343
-------- ------------
Net Assets........................ 100.00% $ 91,650,324
======== ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) See footnote 1C to financial statements.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
7
<PAGE> 10
WRL SERIES FUND, INC.
BOND PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 41.86%
Chemicals & Allied Products 1.05%
Commercial Banks 14.66%
Finance 5.23%
Food & Kindred Products 3.19%
Industrial Machinery & Equipment 2.05%
Life Insurance 2.03%
Motion Pictures 3.18%
Restaurants 2.64%
Short-Term U.S. Government Obligations 9.82%
Commercial Paper 13.30%
Other 0.99%
</TABLE>
Although the second quarter of 1996 was a relatively volatile period for bonds,
it proved to be much less difficult than the first three months of the year.
While interest rates moved moderately higher -- the yield on the benchmark
30-year Treasury bond touched 7.20% in mid-June -- a powerful rally at quarter
end dropped the yield back below the psychologically important 7% level, to
6.89%. For the six months ended June 30, 1996, the Bond Portfolio returned
(4.18%) while the Lehman Brothers Government/Corporate Bond Index returned
(1.88%).
After closing out 1995 in a strong fashion, surprising economic strength shocked
the bond market, which in turn faltered for most of the first half of 1996. The
bond market held up well during the last three months, however, in spite of
additional strong economic news, especially in the areas of employment,
manufacturing, auto, and housing sales. The breakdown in commodity prices was a
welcome counterweight to these numbers. Cheaper commodities suggest inflation
will probably remain low. Strong consumer confidence (and spending) may also be
stalling out, as evidenced by the growing rate of delinquencies on consumer
debt. All in all, the economic signals are mixed, although economic growth was
probably stronger in the second quarter. But the evidence is still inconclusive
as to whether the momentum will carry into the second half of the year.
Even though the volatility in bonds may have dampened some investors'
enthusiasm, a recent series of articles from Bloomberg Business News pointed out
that the bond market was in fact a very healthy investment during the last six
years. Since 1990, the benchmark 30-year Treasury has had an average annual
return of 9.5%, with dividends reinvested. This return was achieved in spite of
the market's performance in 1994, which was the worst since 1949, according to
Bloomberg. Bond investors who stayed the course have enjoyed excellent long-term
performance.
The reason bonds have performed so well this decade is that the world's major
economies are growing moderately and, as a result, inflation has remained
benign. Economic growth, and its effect on inflation, continues to be the key to
interest rate levels and to the performance of the government and
investment-grade sectors of the bond market.
Recently, the portfolio has been positioned conservatively in the face of
economic uncertainty, with a mix of investment-grade bonds, Treasuries, and cash
equivalents. Investment-grade debt was kept in shorter maturities, where yields
were competitive with longer-term securities but interest-rate risk is limited.
In general, we remain pleased with the Bond Portfolio's performance in a
volatile bond environment. If the economy slows from its current growth rate and
interest rates remain stable or decline, we should be positioned to post solid
results in the second half.
<TABLE>
<S> <C>
(JANUS SYMBOL)
(1)THE JANUS SYMBOL IS A
REGISTERED /s/ Ronald V. Speaker
SERVICE MARK OF JANUS CAPITAL Ronald V. Speaker
CORPORATION Bond Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE> 11
WRL SERIES FUND, INC.
BOND PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 68,468,458)............................ $ 69,548,551
Short-term securities, at amortized cost......... 21,192,429
Cash............................................. 79,245
Cash collateral.................................. 7,153,750
Receivables:
Fund shares sold............................... 0
Securities sold................................ 4,708,921
Interest....................................... 1,018,620
Dividends...................................... 0
Other.......................................... 35,438
-------------
Total assets................................. 103,736,954
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 4,867,135
Accounts payable and accrued liabilities:
Investment advisory fees....................... 34,696
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 7,153,750
Other fees..................................... 31,049
-------------
Total liabilities............................ 12,086,630
-------------
Total net assets........................... $ 91,650,324
==============
NET ASSETS:
Capital stock
($ .01 par value 25,000,000 authorized)........ $ 86,684
Additional paid-in capital....................... 98,765,834
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 347,971
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... (8,630,258 )
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 1,080,093
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 91,650,324
==============
Shares outstanding at June 30, 1996.............. 8,668,355
==============
Net asset value per share........................ $ 10.57
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 3,091,228
Dividends.................................... 0
------------
Total investment income................ 3,091,228
------------
EXPENSES:
Investment advisory fees..................... 235,183
Printing and shareholder reports............. 8,294
Custody fees................................. 13,184
Legal fees................................... 491
Auditing and accounting fees................. 2,524
Directors fees............................... 397
Registration fees............................ 138
Other fees................................... 1,095
------------
Total expenses......................... 261,306
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 453
------------
Net expenses........................... 260,853
------------
Net investment income (loss)................. 2,830,375
------------
Net realized gain (loss) on:
Investment securities.................... (1,098,643)
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... (5,885,211)
------------
Net gain (loss) on investments........... (6,983,854)
------------
Net increase (decrease) in net assets
resulting from operations.................. $ (4,153,479)
============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
9
<PAGE> 12
WRL SERIES FUND, INC.
BOND PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................. $ 2,830,375 $ 5,313,820
Net realized gain (loss) on investments.................................................. (1,098,643) 2,182,123
Change in unrealized appreciation (depreciation) on investments.......................... (5,885,211) 9,317,232
------------ ------------
Net increase (decrease) in net assets resulting from operations........................ (4,153,479) 16,813,175
------------ ------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.................................................................... (2,500,000) (5,296,224)
In excess of net investment income....................................................... 0 0
Net realized gains....................................................................... 0 0
------------ ------------
Total distributions.................................................................... (2,500,000) (5,296,224)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares........................................................ 11,770,501 26,382,392
Dividends and distributions reinvested................................................... 2,500,000 5,296,224
Cost of shares repurchased............................................................... (12,938,583) (17,287,599)
------------ ------------
Increase (decrease) in net assets from capital shares transactions..................... 1,331,918 14,391,017
------------ ------------
Net increase (decrease) in net assets.................................................. (5,321,561) 25,907,968
NET ASSETS:
Beginning of period...................................................................... 96,971,885 71,063,917
------------ ------------
End of period............................................................................ $ 91,650,324 $ 96,971,885
============ ============
Undistributed net investment income.................................................... $ 347,971 $ 17,596
============ ============
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................. 8,547,388 7,252,963
------------ ------------
Shares issued............................................................................ 1,068,942 2,425,769
Shares issued - reinvestment of dividends and distributions.............................. 237,892 477,566
Shares redeemed.......................................................................... (1,185,867) (1,608,910)
------------ ------------
Increase (decrease) in shares outstanding................................................ 120,967 1,294,425
------------ ------------
Shares outstanding - end of period....................................................... 8,668,355 8,547,388
============ ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
10
<PAGE> 13
WRL SERIES FUND, INC.
BOND PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
BOND PORTFOLIO
AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Lehman Brothers Government/Corporate Bond
Index (LB) over the same time frame.
<TABLE>
<CAPTION>
Portfolio LB Index
<S> <C> <C>
Inception 10/2/86 $10,000 $10,000
Period Ended 12/31/86 $10,412 $10,310
FYE 12/31/87 $ 9,823 $10,540
FYE 12/31/88 $10,583 $11,340
FYE 12/31/89 $12,133 $12,960
FYE 12/31/90 $12,887 $14,030
FYE 12/31/91 $15,317 $16,290
FYE 12/31/92 $16,358 $17,530
FYE 12/31/93 $18,547 $19,460
FYE 12/31/94 $17,260 $18,780
FYE 12/31/95 $21,228 $22,390
Six Months Ended 6/30/96 $20,341 $21,970
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
-------- ----------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 11.35 $ 9.80 $ 11.24 $ 11.18 $ 11.18 $ 9.91 $ 10.07 $ 9.29
Income from operations:
Net investment income (loss).......... .33 .69 .63 .72 .75 .86 .79 .75
Net realized and unrealized
gain (loss) on investments.......... (.82 ) 1.55 (1.44) .95 .32 1.30 (.16) .78
-------- -------- -------- -------- -------- -------- -------- -------
Total income (loss) from
operations........................ (.49 ) 2.24 (.81) 1.67 1.07 2.16 .63 1.53
-------- -------- -------- -------- -------- -------- -------- -------
Distributions:
Dividends from net investment income.. (.29 ) (.69) (.63) (.72) (.75) (.86) (.79) (.75)
Distributions from net realized gains
on investments...................... .00 .00 .00 (.89) (.32) (.03) .00 .00
-------- -------- -------- -------- -------- -------- -------- -------
Total distributions................. (.29 ) (.69) (.63) (1.61) (1.07) (.89) (.79) (.75)
-------- -------- -------- -------- -------- -------- -------- -------
Net asset value, end of period........... $ 10.57 $ 11.35 $ 9.80 $ 11.24 $ 11.18 $ 11.18 $ 9.91 $ 10.07
========== ========== ========== ========== ========== ========== ========== =========
Total return............................. (4.18 )% 22.99% (6.94)% 13.38% 6.79% 18.85% 6.21% 14.65%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................ $91,650 $ 96,972 $ 71,064 $ 90,715 $ 56,820 $ 22,291 $ 10,143 $ 7,025
Ratio of expenses to average net
assets................................ .55 % .61% .59% .64% .70% .70% .69% .70%
Ratio of net investment income (loss)
to average net assets................. 5.99 % 6.45% 5.94% 5.94% 6.49% 8.02% 8.82% 8.60%
Ratio of commission paid to number of
shares................................ n/a n/a n/a n/a n/a n/a n/a n/a
Portfolio turnover rate................. 54.89 % 120.54% 131.73% 149.02% 80.73% 33.47% 18.09% 23.26%
<CAPTION>
1988 1987 1986+
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of period..... $ 9.22 $ 10.28 $ 10.00
Income from operations:
Net investment income (loss).......... .90 .25 .13
Net realized and unrealized
gain (loss) on investments.......... .07 (.89) .15
------- ------- -------
Total income (loss) from
operations........................ .97 (.64) .28
------- ------- -------
Distributions:
Dividends from net investment income.. (.90) (.38) .00
Distributions from net realized gains
on investments...................... .00 (.04) .00
------- ------- -------
Total distributions................. (.90) (.42) .00
------- ------- -------
Net asset value, end of period........... $ 9.29 $ 9.22 $ 10.28
========= ========= =========
Total return............................. 7.73% (5.66)% 11.49%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................ $ 3,372 $ 1,400 $ 127
Ratio of expenses to average net
assets................................ .70% .86% .12%
Ratio of net investment income (loss)
to average net assets................. 8.96% 7.17% 1.51%
Ratio of commission paid to number of
shares................................ n/a n/a n/a
Portfolio turnover rate................. 21.54% 134.76% 123.68%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was October 2, 1986. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
11
<PAGE> 14
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (0.42%)
U.S. Treasury Notes(b)
5.50%, due 09/30/97............ $ 6,000,000 $ 5,970,840
---------------
Total U.S. Government Obligations
(cost: $ 6,023,888)......................... 5,970,840
---------------
CORPORATE DEBT SECURITIES (0.91%)
HOTELS & OTHER LODGING PLACES (0.91%)
Trump Atlantic City
11.25%, due 05/01/06........... 13,000,000 13,065,000
---------------
Total Corporate Debt Securities
(cost: $ 13,000,000)........................ 13,065,000
---------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
PREFERRED STOCKS (2.81%)
COMPUTER & DATA PROCESSING SERVICE (2.81%)
SAP AG-Vorzug(b)................. 271,637 $ 40,286,812
---------------
Total Preferred Stocks
(cost: $ 21,487,642)........................ 40,286,812
---------------
COMMON STOCKS (77.83%)
AEROSPACE (0.81%)
Boeing Company................... 134,275 11,698,709
APPAREL PRODUCTS (2.49%)
Gucci Group nv-NY
registered shares(a)........... 554,125 35,741,063
APPAREL, PIECE GOODS, & NOTIONS (2.75%)
Nike, Inc. - Class B............. 384,800 39,538,200
BEVERAGES (2.96%)
Coca-Cola Company................ 870,750 42,557,906
COMMERCIAL BANKS (5.96%)
Chase Manhattan Corporation...... 267,400 18,885,125
Citicorp......................... 384,555 31,773,857
Wells Fargo & Company............ 146,383 34,967,239
COMMUNICATIONS EQUIPMENT (9.36%)
Ascend Communications, Inc(a).... 957,825 53,877,656
Glenayre Technologies, Inc.(a)... 511,388 25,569,375
Picturetel Corporation(a)........ 533,600 21,010,500
QUALCOM, Inc.(a)................. 110,725 5,882,266
Stratacom, Inc.(a)............... 503,000 28,293,750
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER & DATA PROCESSING SERVICE (23.87%)
America Online, Inc.(a)(b)....... 178,750 $ 7,820,313
Cisco Systems, Inc.(a)(b)........ 819,500 46,404,188
First Data Corporation(b)........ 691,800 55,084,574
HBO & Company.................... 779,750 52,828,063
HNC Software, Inc.(a)............ 72,800 3,367,000
IKOS Systems, Inc.(a)............ 138,450 2,924,756
Informix Corporation(a).......... 438,700 9,870,750
Intuit, Inc.(a)(b)............... 210,925 9,966,206
Microsoft Corporation(a)......... 331,025 39,764,378
Netscape Communications
Corporation(a)(b).............. 289,125 17,998,031
Peoplesoft(a).................... 344,450 24,542,063
Premisys Communications,
Inc.(a)........................ 293,375 17,895,875
Shiva Corporation(a)(b).......... 262,150 20,972,000
Sun Microsystems, Inc.(a)........ 384,775 22,653,628
Xylan Corporation(a)(b).......... 235,125 10,933,313
COMPUTER & OFFICE EQUIPMENT (3.92%)
Dialogic Corporation(a).......... 54,600 3,255,525
U.S. Robotics Corporation(a)..... 620,350 53,039,925
ELECTRONIC & OTHER ELECTRIC
EQUIPMENT (1.49%)
General Electric Company......... 246,750 21,343,875
FINANCE (1.86%)
Federal Home Loan Mortgage
Corporation.................... 129,500 11,072,250
Federal National Mortgage
Association.................... 464,920 15,574,820
FOOD STORES (0.44%)
Starbucks Corporation(a)......... 221,900 6,268,675
HOTELS & OTHER LODGING PLACES (1.99%)
HFS, Inc.(a)..................... 337,425 23,619,750
Trump Hotels & Casino Resorts,
Inc.(a)........................ 173,200 4,936,200
INSURANCE (3.80%)
Oxford Health Plans, Inc.(a)..... 773,900 31,826,638
PacifiCare Health Systems, Inc. -
Class B(a)(b)................. 250,375 16,962,906
United Healthcare Corporation.... 113,775 5,745,638
MEDICAL INSTRUMENTS & SUPPLIES (0.88%)
Medtronic, Inc. ................. 224,800 12,588,800
MOTION PICTURES (0.85%)
Walt Disney Company.............. 193,075 12,139,591
PHARMACEUTICALS (8.65%)
Amgen, Inc.(a)................... 343,050 18,524,700
Astra AB - Class A Free.......... 194,584 8,579,851
Biochem Pharma, Inc.(a).......... 68,000 2,550,000
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
12
<PAGE> 15
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS (CONTINUED)
Chiron Corporation(a)............ 162,350 $ 15,910,300
Eli Lilly & Company.............. 308,575 20,057,375
Pfizer, Inc...................... 492,750 35,170,031
Smithkline Beecham Plc-ADR(b).... 417,325 22,692,047
Smithkline Beecham - Class A..... 66,388 710,394
RADIO & TELEVISION BROADCASTING(C)
Infinity Broadcasting
Corporation - Class A......... 1 15
RESTAURANTS (0.43%)
PepsiCo, Inc..................... 174,950 6,188,856
RUBBER & MISC. PLASTIC PRODUCTS (0.81%)
Fila Holding S.p.A. -
Sponsored ADR.................. 134,100 11,566,125
SECURITY & COMMODITY BROKERS (2.48%)
Charles Schwab Corporation....... 115,500 2,829,750
Merrill Lynch & Company, Inc..... 504,401 32,849,115
TELECOMMUNICATIONS (0.80%)
Brooks Fiber Properties, Inc. ... 182,750 6,030,750
Mfs Communications Company,
Inc.(b)........................ 147,300 5,523,750
WHOLESALE TRADE DURABLE GOODS (1.23%)
Johnson & Johnson................ 356,400 17,641,800
---------------
Total Common Stocks
(cost: $ 710,714,217)....................... 1,118,020,236
---------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (10.76%)
Federal Home Loan Mortgage Corp
5.18%, due 07/01/96........... $ 35,000,000 $ 34,989,928
Federal Home Loan Mortgage Corp
5.27%, due 07/22/96........... 30,000,000 29,898,992
Federal Home Loan Mortgage Corp
5.30%, due 08/08/96........... 40,000,000 39,764,444
Federal Mortgage Corporation
Discount Note 5.27%, due
07/24/96...................... 50,000,000 49,817,014
---------------
Total Short-Term U.S. Government Obligations
(cost: $ 154,470,378)....................... 154,470,378
---------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
COMMERCIAL PAPER (7.35%)
Ford Motor Credit Co.
5.49%, due 07/01/96........... $ 45,600,000 $ 45,586,092
General Electric Capital
Corporation
5.37%, due 07/02/96........... 10,000,000 9,995,525
Household Finance Corp.
5.25%, due 07/02/96........... 50,000,000 49,978,125
---------------
Total Commercial Paper
(cost: $ 105,559,742)....................... 105,559,742
---------------
Total Investment Securities
(cost: $ 1,011,255,867)................... $ 1,437,373,008
===============
SUMMARY
Investments at value............ 100.08 % $ 1,437,373,008
Other Liabilities in
Excess of Assets.............. (0.08)% (1,124,765)
-------- ---------------
Net Assets...................... 100.00 % $ 1,436,248,243
======== ===============
</TABLE>
INVESTMENTS BY COUNTRY
Size of investment is indicated as a percentage of total portfolio net assets.
<TABLE>
<CAPTION>
MARKET VALUE PERCENTAGE
--------------- ----------
<S> <C> <C>
Germany..................... $ 40,286,812 2.81%
Sweden...................... 8,579,851 0.60%
United Kingdom.............. 710,395 0.05%
United States............... 1,386,671,185 96.54%
--------------- ----------
$ 1,436,248,243 100.00%
=============== ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve
months.
(b) See footnote 1C to financial statements.
(c) Industry percentage is less than .01%.
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
13
<PAGE> 16
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Preferred Stocks 2.81%
Apparel Products 2.49%
Apparel, Piece Goods, & Notions 2.75%
Beverages 2.96%
Commercial Banks 5.96%
Communications Equipment 9.36%
Computer & Data Processing Service 23.87%
Computer & Office Equipment 3.92%
Insurance 3.80%
Pharmaceuticals 8.65%
Security & Commodity Brokers 2.48%
Short-Term U.S. Government Obligations 10.76%
Commercial Paper 7.35%
Other 12.84%
</TABLE>
The financial markets closed 1995 with one of the most exciting performances on
record. During the first half of 1996, however, higher interest rates continued
to put pressure on stocks. Still, in spite of increased volatility and some
fierce internal rotation at quarter end, especially in the technology sector,
equities made new highs. The Standard & Poor's Index of 500 Common Stocks was up
10.10% for the first six months this year and the Dow Jones Industrial Average
gained 11.70%. The Growth Portfolio, meanwhile, posted a 15.25% gain for the six
months ended June 30, 1996.
Towards the end of the period, the Portfolio pulled back in tandem with the
selloff in technology, only to rebound sharply at quarter's end. Overall, the
equities market showed considerable staying power. Even though the economic
backdrop continues to be mixed, growth appears relatively moderate and inflation
is low. The break in commodity prices that occurred during the last three months
also provided additional evidence that the economy is on the right track. If
interest rates decline from here, then the general market should be able to
support somewhat richer values for stocks.
Despite the turbulence in the technology group this year, our analysis of the
Portfolio's individual holdings indicates their fundamentals are still intact.
Business at these companies remains robust. However, it is not unexpected these
stocks should "come in" after substantial upward moves. Price retreats are part
of the ebb and flow of the market, although they are always tougher to take near
quarter end when there seems to be relatively little time left to make a
comeback. At these times, it is useful to remind ourselves that our real focus
extends much further than 90 days.
In a good market, valuations can sometimes get ahead of fundamental
expectations, and investors must sometimes wait until earnings grow into higher
prices and expectations re-adjust upward. Fortunately, this process takes less
time when companies are experiencing rapid revenue and earnings growth. Cisco
Systems, Inc., which dominates the market for many types of sophisticated
networking equipment, is a good example. Cisco's revenues are projected to grow
at 80% plus this year, while earnings should increase 67%. During the quarter,
Cisco broadened its product line with the strategic acquisition of Stratacom,
Inc., the premier developer of networking products that integrate information
such as voice, video, and multimedia data.
U.S. Robotics Corporation is also expanding its business at an exceptional pace.
The company develops and markets a range of commercial communication products,
from high-speed modems and software to network management systems. Earnings and
revenue growth should top 100% this year.
In the second half of the year, we will continue to focus on individual
companies that are positioned to capitalize on fundamental economic and
demographic trends. The prospects for our current holdings remain very
encouraging, especially in the health care, financial services,
telecommunications, technology, and specialty retail sectors.
Given the current volatile market environment, we intend to take advantage of
price dips to find optimum entry points for our best ideas. But should
individual holdings get ahead of themselves, we will probably be somewhat
quicker to take profits.
<TABLE>
<S> <C>
(JANUS SYMBOL)
(1)THE JANUS SYMBOL IS A
REGISTERED /S/ SCOTT W. SCHOELZEL
SERVICE MARK OF JANUS CAPITAL Scott W. Schoelzel
CORPORATION Growth Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
14
<PAGE> 17
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 751,225,747)......................... $ 1,177,342,888
Short-term securities, at amortized cost....... 260,030,120
Cash........................................... 47,599
Cash collateral................................ 123,064,783
Receivables:
Fund shares sold............................. 0
Securities sold.............................. 856,428
Interest..................................... 391,410
Dividends.................................... 844,023
Foreign receivable........................... 116,680
Foreign currency contracts................... 1,180,240
Other........................................ 877,203
---------------
Total assets............................... 1,564,751,374
---------------
LIABILITIES:
Fund shares purchased.......................... 0
Securities purchased........................... 3,807,539
Accounts payable and accrued liabilities:
Investment advisory fees..................... 874,513
Custody fees................................. 0
Auditing and accounting fees................. 0
Dividends to shareholders.................... 0
Deposit for securities on loan............... 123,064,783
Other fees................................... 756,296
Foreign payable.............................. 0
Foreign currency contracts................... 0
---------------
Total liabilities.......................... 128,503,131
---------------
Total net assets......................... $ 1,436,248,243
===============
NET ASSETS:
Capital stock
($ .01 par value 125,000,000 authorized)..... $ 394,293
Additional paid-in capital..................... 962,490,710
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss).............................. 5,046,576
Accumulated undistributed net realized
gain (loss) on:
Investment transactions.................... 39,208,184
Foreign currency transactions.............. 1,810,738
Net unrealized appreciation (depreciation) on:
Investment securities........................ 426,117,141
Foreign currency transactions................ 1,180,601
---------------
Net assets applicable to outstanding
shares of capital............................ $ 1,436,248,243
===============
Shares outstanding at June 30, 1996............ 39,429,337
===============
Net asset value per share...................... $ 36.43
===============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 8,134,043
Dividends (net of foreign tax of
$ 173,829)................................. 4,264,593
-------------
Total investment income................ 12,398,636
-------------
EXPENSES:
Investment advisory fees..................... 5,187,805
Printing and shareholder reports............. 108,619
Custody fees................................. 115,621
Legal fees................................... 2,975
Auditing and accounting fees................. 7,320
Directors fees............................... 2,339
Registration fees............................ 1,045
Other fees................................... 2,633
-------------
Total expenses......................... 5,428,357
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 937
-------------
Net expenses........................... 5,427,420
-------------
Net investment income (loss)................. 6,971,216
-------------
Net realized gain (loss) on:
Investment securities.................... 34,387,336
Foreign currency transactions............ 1,810,738
-------------
Total net realized gain (loss)......... 36,198,074
-------------
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 141,914,521
Foreign currency transactions............ 625,160
-------------
Total change in unrealized appreciation
(depreciation)....................... 142,539,681
-------------
Net gain (loss) on investments........... 178,737,755
-------------
Net increase (decrease) in net assets
resulting from operations.................. $ 185,708,971
=============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
15
<PAGE> 18
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 6,971,216 $ 8,852,198
Net realized gain (loss) on investments and foreign currency transactions............... 36,198,074 154,832,289
Change in unrealized appreciation (depreciation) on investments and foreign
currency transactions................................................................. 142,539,681 210,731,260
------------- -------------
Net increase (decrease) in net assets resulting from operations....................... 185,708,971 374,415,747
------------- -------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... (2,500,000 ) (8,276,838)
In excess of net investment income...................................................... 0 0
Net realized gains...................................................................... 0 (106,305,203)
In excess of net realized gains......................................................... 0 0
------------- -------------
Total distributions................................................................... (2,500,000 ) (114,582,041)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 101,577,851 111,725,690
Dividends and distributions reinvested.................................................. 2,500,000 114,582,041
Cost of shares repurchased.............................................................. (46,212,972 ) (105,350,493)
------------- -------------
Increase (decrease) in net assets from capital shares transactions.................... 57,864,879 120,957,238
------------- -------------
Net increase (decrease) in net assets................................................. 241,073,850 380,790,944
NET ASSETS:
Beginning of period..................................................................... 1,195,174,393 814,383,449
------------- -------------
End of period........................................................................... $ 1,436,248,243 $ 1,195,174,393
============= =============
Undistributed net investment income................................................... $ 5,046,576 $ 575,360
============= =============
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 37,749,399 34,205,930
------------- -------------
Shares issued........................................................................... 2,990,747 3,712,711
Shares issued - reinvestment of dividends and distributions............................. 69,091 3,625,404
Shares redeemed......................................................................... (1,379,900 ) (3,794,646)
------------- -------------
Increase (decrease) in shares outstanding............................................... 1,679,938 3,543,469
------------- -------------
Shares outstanding - end of period...................................................... 39,429,337 37,749,399
============= =============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
16
<PAGE> 19
WRL SERIES FUND, INC.
GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
GROWTH PORTFOLIO
AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard & Poor's Index of 500 Common
Stocks (S&P) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index
<S> <C> <C>
Inception 10/2/86 $10,000 $10,000
Period Ended 12/31/86 $10,144 $10,560
FYE 12/31/87 $11,249 $11,110
FYE 12/31/88 $13,344 $12,940
FYE 12/31/89 $19,621 $17,040
FYE 12/31/90 $19,578 $16,511
FYE 12/31/91 $31,284 $21,542
FYE 12/31/92 $32,021 $23,183
FYE 12/31/93 $33,293 $25,519
FYE 12/31/94 $30,527 $25,856
FYE 12/31/95 $44,912 $35,481
Six Months Ended 6/30/96 $51,762 $39,064
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
---------- -----------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
---------- ---------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................. $ 31.66 $ 23.81 $ 26.25 $ 25.83 $ 26.26 $ 17.48 $ 17.85
Income from operations:
Net investment income (loss)...... .18 .26 .22 .28 .36 .27 .30
Net realized and unrealized
gain (loss) on
investments..................... 4.65 10.97 (2.41) .79 .52 10.75 (.33)
---------- ---------- --------- --------- --------- --------- ---------
Total income (loss) from
operations.................... 4.83 11.23 (2.19) 1.07 .88 11.02 (.03)
Distributions:
Dividends from net investment
income.......................... (.06) (.24) (.22) (.28) (.36) (.27) (.30)
Distributions from net realized
gains on investments............ .00 (3.14) .00 (.37) (.95) (1.97) (.04)
Distributions in excess of net
realized gains on
investments..................... .00 .00 (.03) .00 .00 .00 .00
---------- ---------- --------- --------- --------- --------- ---------
Total distributions............. (.06) (3.38) (.25) (.65) (1.31) (2.24) (.34)
---------- ---------- --------- --------- --------- --------- ---------
Net asset value, end of period....... $ 36.43 $ 31.66 $ 23.81 $ 26.25 $ 25.83 $ 26.26 $ 17.48
============ ============ =========== =========== =========== =========== ===========
Total return......................... 15.25% 47.12% (8.31)% 3.97% 2.35% 59.79% (.22)%
Ratios and supplemental data:
Net assets at end of period
(in thousands).................... $1,436,248 $1,195,174 $ 814,383 $ 934,810 $ 711,422 $ 393,511 $ 129,057
Ratio of expenses to average net
assets............................ .82% .86% .84% .87% .86% .90% 1.00%
Ratio of net investment income
(loss) to average net assets...... 1.06% .90% .88% 1.07% 1.44% 1.21% 2.06%
Ratio of commission paid to number
of shares......................... 4.44% n/a n/a n/a n/a n/a n/a
Portfolio turnover rate............. 19.58% 130.48% 107.33% 77.91% 77.70% 7.27% 157.01%
<CAPTION>
1989 1988 1987 1986+
-------- -------- -------- ------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period............................. $ 12.97 $ 11.14 $ 10.14 $10.00
Income from operations:
Net investment income (loss)...... .19 .31 .21 .00
Net realized and unrealized
gain (loss) on
investments..................... 6.29 1.83 1.00 .14
-------- -------- -------- ------
Total income (loss) from
operations.................... 6.48 2.14 1.21 .14
Distributions:
Dividends from net investment
income.......................... (.19) (.31) (.21) .00
Distributions from net realized
gains on investments............ (1.41) .00 .00 .00
Distributions in excess of net
realized gains on
investments..................... .00 .00 .00 .00
-------- -------- -------- ------
Total distributions............. (1.60) (.31) (.21) .00
-------- -------- -------- ------
Net asset value, end of period....... $ 17.85 $ 12.97 $ 11.14 $10.14
========= ========= ========= ========
Total return......................... 47.04% 18.62% 10.90% 5.84%
Ratios and supplemental data:
Net assets at end of period
(in thousands).................... $ 74,680 $ 28,497 $ 15,815 $ 716
Ratio of expenses to average net
assets............................ 1.00% 1.00% 1.00% .19%
Ratio of net investment income
(loss) to average net assets...... 1.18% 2.50% 1.84% .03%
Ratio of commission paid to number
of shares......................... n/a n/a n/a n/a
Portfolio turnover rate............. 123.80% 76.27% 222.13% 8.55%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was October 2, 1986. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
17
<PAGE> 20
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (24.34%)
U.S. Treasury Bonds
7.50%, due 11/15/16............... $ 750,000 $ 788,130
U.S. Treasury Bonds
6.50%, due 08/15/05............... 1,000,000 985,770
U.S. Treasury Bonds
6.25%, due 02/15/03............... 1,000,000 982,820
U.S. Treasury Notes
7.25%, due 02/15/98............... 750,000 763,627
U.S. Treasury Notes
5.13%, due 04/30/98............... 1,500,000 1,476,150
U.S. Treasury Bonds(a)
7.50%, due 05/15/02............... 1,000,000 1,047,440
------------
Total U.S. Government Obligations
(cost: $ 6,109,222)............................ 6,043,937
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (15.19%)
Federal Agricultural Mortgage
Corporation
7.03%, due 05/26/98............... 300,000 303,677
Federal Land Bank Bonds
7.95%, due 10/21/96............... 1,000,000 1,006,690
Federal National Mortgage
Association
7.72%, due 12/16/96............... 500,000 504,900
Government Trust Certificate-Israel
Class 1-B
U.S. Government Guaranteed
5.25%, due 03/15/98............... 500,000 490,625
Government Trust Certificate-Israel
Class 1-C
U.S. Government Guaranteed
9.25%, due 11/15/01............... 430,000 459,024
Tennessee Valley Authority
8.25%, due 11/15/96............... 1,000,000 1,008,750
------------
Total U.S. Government Agency Obligations
(cost: $ 3,805,709)............................ 3,773,666
------------
MORTGAGE-BACKED SECURITIES (12.57%)
Federal National Mortgage
Association
6.00%, due 10/25/10............... 1,028,664 1,023,679
Federal National Mortgage
Association
REMIC Trust
Series 1989-40 Class B
9.50%, due 04/25/18............... 32,180 32,383
Federal National Mortgage
Association Strip
Series 66-Class 1
7.50%, due 01/01/20............... 278,048 275,640
Federal National Mortgage
Association Strip
Series 66-Class 1
8.15%, due 12/01/99............... 496,605 514,149
GNMA PL356318
7.00%, due 06/15/23............... 923,191 885,396
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------
<S> <C> <C>
MORTGAGE-BACKED SECURITIES (CONTINUED)
Prudential-Bache CMO Trust
Series 9-Class E
9.88%, due 08/01/17............... $ 379,452 $ 389,435
------------
Total Mortgage-Backed Securities
(cost $ 3,194,362)............................. 3,120,682
------------
ASSET-BACKED SECURITIES (8.78%)
American Express Master Trust
Series 1994-2 Class A
7.60%, due 08/15/02............... 1,000,000 1,035,400
Choice Credit Card Master Trust
Series 1992-2-Class B
7.20%, due 04/15/99............... 100,000 101,507
Ford Credit Auto Loan Master Trust
Series 1992-1 Class A
6.88%, due 01/15/99............... 100,000 100,730
Standard Credit Card Master Trust
Series 1993-2 Class A
5.95%, due 10/07/04............... 1,000,000 942,600
------------
Total Asset-Backed Securities
(cost $ 2,088,667)............................. 2,180,237
------------
SUPRANATIONAL AGENCY OBLIGATIONS (7.38%)
African Development Bank
9.30%, due 07/01/00............... 500,000 540,625
African Development Bank
7.75%, due 12/15/01............... 500,000 515,000
International Bank For
Reconstruction & Development
7.90%, due 04/01/98............... 250,000 256,563
International Bank For
Reconstruction & Development
8.02%, due 04/01/99............... 500,000 520,000
------------
Total Supranational Agency Obligations
(cost: $ 1,839,998)............................ 1,832,188
------------
CORPORATE DEBT SECURITIES (10.61%)
Finance (2.64%)
General Electric Capital Corporation
8.30%, due 09/20/09............... 600,000 657,000
HOLDING & OTHER INVESTMENT OFFICES
(3.01%)
Kimco Realty Corporation
6.00%, due 02/10/99............... 750,000 749,994
INSURANCE (2.90%)
Progressive Corporation
6.60%, due 01/15/04............... 750,000 719,063
OIL & GAS EXTRACTION (2.06%)
Shell Canada Limited
7.38%, due 06/01/99............... 500,000 510,625
------------
Total Corporate Debt Securities
(cost: $ 2,682,814)............................ 2,636,682
------------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
18
<PAGE> 21
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- --------
<S> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (12.04%)
Farm Credit Discount Note
5.21%, due 07/11/96............... $ 1,000,000 $ 998,263
Farm Credit Discount Note
5.28%, due 08/07/96............... 1,000,000 994,280
Federal National Mortgage
Association
5.24%, due 07/09/96............... 1,000,000 998,544
------------
Total Short-Term U.S. Government Obligations
(cost: $ 2,991,087)............................ 2,991,087
------------
COMMERCIAL PAPER (4.02%)
Ford Motor Credit Co.
5.29%, due 07/16/96............... 1,000,000 997,502
------------
Total Commercial Paper
(cost: $ 997,502).............................. 997,502
------------
SHORT-TERM OBLIGATION (7.95%)
Prudential-Bache Securities(b)
4.77%, Repurchase Agreement dated
06/28/96 to be repurchased at
$ 1,975,037 on 07/01/96........... 1,974,252 1,974,252
------------
Total Short-Term Obligation
(cost: $ 1,974,252)............................ 1,974,252
------------
Total Investment Securities
(cost: $ 25,683,613)......................... $ 25,550,233
============
SUMMARY
Investments at value................ 102.88% $ 25,550,233
Other Liabilities in
Excess of Assets.................. (2.88)% (714,627)
--------- ------------
Net Assets.......................... 100.00% $ 24,835,606
========= ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) See footnote 1C to financial statements.
(b) Collateralized by $7,704,578 Federal National Mortgage Association 9.00% due
09/01/22; market value and accrued interest aggregated $2,013,741 for this
collateral at June 30, 1996.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
19
<PAGE> 22
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets.
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 24.34%
U.S. Government Agency Obligations 15.19%
Mortgage-Backed Securities 12.57%
Asset-Backed Securities 8.78%
Supranational Agency Obligations 7.38%
Finance 2.64%
Holding & Other Investment Offices 3.01%
Short-Term U.S. Government Obligations 12.04%
Commercial Paper 4.02%
Short-Term Obligation 7.95%
Other 2.08%
</TABLE>
The bond market reversed its course in the first quarter of 1996 following its
year-long rally in 1995. The overall increase in interest rates for the first
half of the year, triggered midway through the first quarter, was the result of
evidence of stronger than expected economic performance. The Federal Reserve
Board (Fed) eased monetary policy again in late January, which was the third
quarter-point decrease since mid-1995. The anticipation of further declines has
dissipated since then. In fact, the market's current expectations are that the
Fed will continue to take a neutral stance and may eventually need to tighten.
As a result of the shift in expectations, the yields on two- and three-year
Treasury notes have increased by around 100 basis points year to date, ending at
6.11% and 6.27%, respectively. The benchmark 30-year Treasury bond yield also
expanded by approximately 100 basis points to 6.89% at the end of the second
quarter.
The Short-to-Intermediate Government Portfolio achieved market-level
performance, with a total return of (.12%) for six months ended June 30, 1996;
the benchmark Merrill Lynch 1-10 Year Government Index ("Index") declined (.12%)
for the same period. While the performance of the Portfolio was enhanced by
keeping the duration slightly shorter than the Index for most of the period, we
regret not having taken a stronger stance with our strategy given the severity
of the rate increases that occurred.
Transaction activity during the period maintained the Portfolio's duration in a
range generally between 90% and 105% of the Index. In addition to Treasury
transactions to adjust duration and core portfolio holdings, activity included
the additions of two short-term agency securities and two mortgage-backed
securities. Both were done in an effort to enhance the yield of the Portfolio
while maintaining its conservative bias. At the end of the second quarter, the
Portfolio's duration was approximately 91% of the Index, compared to 97% at year
end and 89% on March 31, 1996.
Looking into the second half of 1996, the Portfolio remains positioned to
benefit primarily from interest income, rather than price changes, and has the
flexibility to adjust quickly to changes from our present modestly bearish
interest rate outlook. The average maturity of the Portfolio is about 3.9 years,
resting near the mid-point of its 1-7 year permissible range. The Portfolio
maturity structure was approximately matched with the Index at the end of both
1995 and the first quarter of 1996, although a slight bias toward a barbell
weighting remained. Transaction activity during the second quarter has
substantially increased the bias toward a barbell, which positions the Portfolio
to benefit from a yield curve flattening environment.
<TABLE>
<S> <C> <C>
(Aegon(R)) /s/ Clifford A. Sheets /s/ Jarrell D. Frey
------------------------------- -------------------------
Clifford A. Sheets Jarrell D. Frey
Short-to-Intermediate Government
Co-Portfolio Managers
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE> 23
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 19,720,772)............................ $ 19,587,392
Short-term securities, at amortized cost......... 5,962,841
Cash............................................. 0
Cash collateral.................................. 1,060,000
Receivables:
Fund shares sold............................... 0
Securities sold................................ 0
Interest....................................... 291,669
Dividends...................................... 0
Other.......................................... 5,998
-----------
Total assets................................. 26,907,900
-----------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 994,133
Accounts payable and accrued liabilities:
Investment advisory fees....................... 11,241
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 1,060,000
Other fees..................................... 6,920
-----------
Total liabilities............................ 2,072,294
-----------
Total net assets........................... $ 24,835,606
===========
NET ASSETS:
Capital stock
($ .01 par value 100,000,000 authorized)....... $ 24,265
Additional paid-in capital....................... 25,001,053
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 262,745
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... (319,077 )
Net unrealized appreciation (depreciation) on:
Investment securities.......................... (133,380 )
-----------
Net assets applicable to outstanding
shares of capital.............................. $ 24,835,606
===========
Shares outstanding at June 30, 1996.............. 2,426,456
===========
Net asset value per share........................ $ 10.24
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 741,624
Dividends.................................... 0
--------
Total investment income................ 741,624
--------
EXPENSES:
Investment advisory fees..................... 71,519
Printing and shareholder reports............. 1,343
Custodian fees............................... 7,455
Legal fees................................... 69
Auditing and accounting fees................. 2,524
Directors fees............................... 55
Registration fees............................ 21
Other fees................................... 69
--------
Total expenses......................... 83,055
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 17
--------
Net expenses........................... 83,038
--------
Net investment income (loss)................. 658,586
--------
Net realized gain (loss) on:
Investment securities.................... 110,507
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... (792,746)
--------
Net gain (loss) on investments........... (682,239)
--------
Net increase (decrease) in net assets
resulting from operations.................. $ (23,653)
========
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
21
<PAGE> 24
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 658,586 $ 1,237,359
Net realized gain (loss) on investments................................................. 110,507 (188,473)
Change in unrealized appreciation (depreciation) on investments......................... (792,746) 1,624,946
----------- ------------
Net increase (decrease) in net assets resulting from operations....................... (23,653) 2,673,832
----------- ------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... (400,000) (1,233,200)
Net realized gains...................................................................... 0 0
----------- ------------
Total distributions................................................................... (400,000) (1,233,200)
----------- ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 7,592,416 13,644,823
Dividends and distributions reinvested.................................................. 400,000 1,233,200
Cost of shares repurchased.............................................................. (6,320,890) (13,087,126)
----------- ------------
Increase (decrease) in net assets from capital shares transactions.................... 1,671,526 1,790,897
----------- ------------
Net increase (decrease) in net assets................................................. 1,247,873 3,231,529
NET ASSETS:
Beginning of period..................................................................... 23,587,733 20,356,204
----------- ------------
End of period........................................................................... $ 24,835,606 $ 23,587,733
=========== ============
Undistributed net investment income................................................... $ 262,745 $ 4,159
=========== ============
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 2,264,543 2,093,571
----------- ------------
Shares issued........................................................................... 731,697 1,338,408
Shares issued - reinvestment of dividends and distributions............................. 39,228 119,758
Shares redeemed......................................................................... (609,012) (1,287,194)
----------- ------------
Increase (decrease) in shares outstanding............................................... 161,913 170,972
----------- ------------
Shares outstanding - end of period...................................................... 2,426,456 2,264,543
=========== ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
22
<PAGE> 25
WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
SHORT-TO-INTERMEDIATE GOVERNMENT PORTFOLIO AND THE MERRILL LYNCH 1-10 YEAR
GOVERNMENT BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Merrill Lynch 1-10 Year Government Bond
Index (ML) over the same time frame.
<TABLE>
<CAPTION>
Portfolio ML Index
<S> <C> <C>
Inception 12/3/92 $10,000 $10,000
Period Ended 12/31/92 $10,045 $10,132
FYE 12/31/93 $10,505 $10,960
FYE 12/31/94 $10,460 $10,772
FYE 12/31/95 $11,877 $12,341
Six Months Ended 6/30/96 $11,862 $12,327
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
-------- -----------------------------------------------
1996 1995 1994 1993 1992+
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 10.42 $ 9.72 $ 10.30 $ 10.02 $ 10.00
Income from operations:
Net investment income (loss)............... .28 .60 .50 .36 .02
Net realized and unrealized
gain (loss) on investments............... (.29) .70 (.58) .29 .02
-------- -------- -------- -------- --------
Total income (loss) from operations...... (.01) 1.30 (.08) .65 .04
-------- -------- -------- -------- --------
Distributions:
Dividends from net investment income....... (.17) (.60) (.50) (.35) (.02)
Distributions from net realized gains
on investments........................... .00 .00 .00 (.02) .00
-------- -------- -------- -------- --------
Total distributions...................... (.17) (.60) (.50) (.37) (.02)
-------- -------- -------- -------- --------
Net asset value, end of period................. $ 10.24 $ 10.42 $ 9.72 $ 10.30 $ 10.02
========= ========= ========= ========= =========
Total return................................... (.12)% 13.54% (.43)% 4.58% .45%
Ratios and supplemental data:
Net assets at end of period
(in thousands)............................. $ 24,836 $ 23,588 $ 20,356 $ 24,864 $ 2,509
Ratio of expenses to average net assets...... .69% .78% .81% 1.00% 1.00%
Ratio of net investment income (loss) to
average net assets......................... 5.46% 5.84% 4.95% 3.44% 3.24%
Ratio of commission paid to number of
shares..................................... n/a n/a n/a n/a n/a
Portfolio turnover rate...................... 26.87% 51.82% 93.70% 28.64% .00%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was December 3, 1992. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
23
<PAGE> 26
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
CONVERTIBLE BONDS (0.50%)
WHOLESALE TRADE DURABLE GOODS (0.50%)
Sumitomo Bank International - Series ADN
0.75%, due 05/31/01.............. $ 2,250,000 $ 2,210,625
-------------
Total Convertible Bonds
(cost: $ 2,065,854)........................... 2,210,625
-------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
PREFERRED STOCKS (5.26%)
AUTOMOTIVE (1.02%)
Porsche AG (a)...................... 7,546 $ 4,537,120
BEER, WINE, & DISTILLED BEVERAGES (0.31%)
Cia. Cervejaria Brahma.............. 2,297,000 1,360,973
CHEMICALS & ALLIED PRODUCTS (0.25%)
Wella Aktiengesellschaft............ 1,872 1,094,809
COMMERCIAL BANKS (D)
Banco Bradesco S.A.................. 790,562 6,324
COMPUTER & DATA PROCESSING SERVICE (1.78%)
SAP AG - Vorzug(b).................. 53,654 7,957,490
DEPARTMENT STORES (0.09%)
Eacada AG........................... 2,344 408,945
ELECTRIC, GAS & SANITARY SERVICES (0.37%)
Cia Energetica de Minas Gerais...... 60,841,000 1,630,103
HEALTH SERVICES (0.93%)
Fresenius AG........................ 22,799 4,123,685
PRINTING & PUBLISHING (0.51%)
News Corporation Ltd. .............. 468,558 2,287,153
TELECOMMUNICATIONS (D)
Telecomunicacoes Brasileiras SA..... 14,487 1,036
------------
Total Preferred Stocks
(cost: $ 17,714,652)........................... 23,407,638
------------
COMMON STOCKS (91.50%)
AEROSPACE (0.40%)
Boeing Company...................... 20,500 1,786,063
AGRICULTURE (1.45%)
Kesko OY............................ 135,910 2,014,262
Parmalat Finanziaria S.p.A. ........ 3,311,603 4,419,937
AIR TRANSPORTATION (1.40%)
Swissair AG(a)...................... 6,419 6,213,260
AMUSEMENT & RECREATION SERVICES (0.05%)
THORN EMI plc....................... 7,562 210,846
APPAREL PRODUCTS (1.11%)
Gucci Group nv - NY registered
share(a).......................... 76,425 4,929,413
APPAREL, PIECE GOODS & NOTIONS (0.50%)
Fila Holding S.p.A. - Sponsored ADR..... 25,650 2,212,313
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
AUTOMOTIVE (3.02%)
Bajaj Auto Limited - Sponsored GDR
144A(a)(b)(c)..................... 41,412 $ 1,578,833
Honda Motor Company, Ltd............ 220,000 5,689,828
Isuzu Motors Ltd.................... 320,000 1,824,242
Mahindra & Mahindra Limited -
Sponsored GDR(a).................. 35,132 377,669
Tata Engineering & Locomotive
Company Limited - GDR(c).......... 116,350 2,094,300
Tata Engineering & Locomotive
Company Limited - GDR(b).......... 79,750 1,435,500
Yamaha Motor Co., Ltd............... 45,000 458,975
BEER, WINE, & DISTILLED BEVERAGES (0.19%)
Cia, Cervejaria Brahma - Rights..... 183,667 9,300
Quilmes Industrial SA - ADR(a)...... 81,800 838,450
BUSINESS SERVICES (2.95%)
ISS International Service System
A/S - Class B..................... 41,617 929,553
Prosegur, CIA de Seguridad SA....... 7,719 270,990
Securitas AB - Class B Free......... 535,356 11,198,568
Sophus Berendsen A/S................ 5,425 725,341
CHEMICALS & ALLIED PRODUCTS (4.45%)
Amway Japan Limited................. 60,000 3,005,191
Cytec Industries, Inc.(a)........... 5,125 438,188
Hoechst AG(b)....................... 294,570 9,988,048
SGL Carbon AG(c).................... 46,126 5,395,208
The Carbide/Graphite Group, Inc.(a). 53,075 995,156
COMMERCIAL BANKS (3.52%)
Citicorp............................ 46,275 3,823,472
Corporacion Bancaria de
Espana SA......................... 48,287 2,105,823
HSBC Holdings plc................... 119,600 1,807,790
Mitsui Trust & Banking.............. 20,000 233,130
Nordbanken AB....................... 51,791 997,630
Skandinaviska Enskilda Banken -
Class A........................... 432,485 3,449,467
Sparbanken Sverige AB............... 33,693 436,057
Sumitomo Trust & Bank(a)............ 25,000 341,499
Wells Fargo & Company............... 10,258 2,450,380
COMPUTER & DATA PROCESSING SERVICE (9.15%)
Check Point Software
Technologies Ltd.(a).............. 1,350 32,400
Dassault Systemes S.A. ADR(a)....... 24,125 747,875
Electronic Data Systems
Corporation....................... 52,650 2,829,938
Enator AB(a)........................ 62,821 1,441,716
First Data Corporation.............. 2,875 228,922
Frontec AB - Class B(a)............. 92,468 1,134,107
Getronics NV........................ 418,771 9,274,399
Group Axime(a)(c)................... 47,665 6,667,470
JBA Holdings Plc.................... 239,120 1,902,798
Macronix International Co., Ltd.
Sponsored ADR(a).................. 102,375 1,663,594
Misys plc........................... 458,701 5,539,335
NTT Data Communications Systems
Company........................... 2,090 6,242,783
QIAGEN N.V.(a)...................... 16,275 246,159
Sun Microsystems, Inc.(a)........... 30,800 1,813,350
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
24
<PAGE> 27
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER & DATA PROCESSING SERVICE (CONTINUED)
Sungard Data Systems, Inc.(a)....... 18,425 $ 739,303
TABCORP Holdings Limited............ 51,814 234,561
COMPUTER & OFFICE EQUIPMENT (1.18%)
Oce-Van Der Grinten N.V. ........... 49,594 5,253,454
CONSTRUCTION (0.66%)
Hi Cement Corporation(a)(c)......... 5,748,000 2,176,107
PT Semen Cibinong................... 334,500 740,299
DEPARTMENT STORES (1.89%)
Credit Saison Co., Limited.......... 211,400 5,101,630
Daimaru, Inc........................ 53,000 370,194
Hankyu Department Store(b).......... 72,000 937,620
Isetan Co........................... 131,000 1,980,330
ELECTRIC, GAS & SANITARY SERVICES (0.25%)
Consolidated Electric Power
Asia Ltd.(c)...................... 6,225 102,938
Consolidated Electric Power
Asia Ltd. - ADR................... 618,500 1,022,776
ELECTRONIC COMPONENTS & ACCESSORIES (0.69%)
Omron Corporation................... 145,000 3,050,269
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (3.39%)
Canon, Inc.......................... 321,000 6,664,967
Pace Micro Technology Plc(a)........ 353,811 395,476
Rohm Company........................ 64,000 4,207,996
Sony Corporation.................... 30,500 2,002,595
Sony Corporation - ADR.............. 5,475 362,034
UCAR International, Inc.(a)......... 35,325 1,470,403
ENGINEERING & MANAGEMENT SERVICES (0.04%)
New World Infrastructure(a)(b)(c)... 75,600 161,152
ENVIRONMENTAL SERVICES (5.01%)
Rentokil Group PLC.................. 3,512,749 22,302,113
FINANCE (0.33%)
Federal National Mortgage
Association....................... 1,825 61,138
Lloyds TSB Group plc................ 285,377 1,397,129
FOOD STORES (1.16%)
Disco S.A. - Sponsored ADR(a)....... 70,700 1,564,238
Ito-Yokado Co. Ltd.................. 37,000 2,227,211
Santa Isabel S.A. .................. 48,700 1,351,425
FOOD & KINDRED PRODUCTS (2.50%)
Cultor Oy 2-Free(b)................. 45,818 2,329,294
Cultor Oy Series 1.................. 21,329 1,047,566
Nutricia Vereenigde Bedrijven
N.V............................... 73,345 7,756,487
FORESTRY (0.25%)
The Rauma Group..................... 55,756 1,110,988
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
FURNITURE & FIXTURES (0.26%)
AMRE, Inc.(a)....................... 52,975 $ 1,158,828
FURNITURE & HOME FURNISHINGS (0.24%)
Industrie Natuzzi Spa -
Sponsored ADR..................... 21,275 1,090,344
HEALTH SERVICES (0.24%)
HEALTHSOUTH Corporation(a).......... 28,200 1,015,200
Takare plc.......................... 35,591 71,910
HOLDING & OTHER INVESTMENT OFFICES (5.14%)
Citic Pacific Ltd. ................. 358,000 1,447,632
First Pacific Company Ltd........... 33,000 50,733
Grupo Carso SA de CV(a)............. 201,083 1,424,593
Investment AB Bure.................. 109,549 1,005,642
Kinnevik AB - Class B Free(b)....... 361,214 10,926,112
Lagardere Groupe(b)................. 310,587 8,007,246
HOTELS & OTHER LODGING PLACES (1.81%)
East India Hotels Limited(b)(c)..... 30,800 629,478
HFS, Inc.(a)........................ 98,225 6,875,750
Indian Hotels Company Limited -
Sponsored GDR(a)(b)(c)............ 19,961 568,889
INDUSTRIAL MACHINERY & EQUIPMENT (0.12%)
Hunter Douglas N.V. ................ 7,975 544,345
INSTRUMENTS & RELATED PRODUCTS (0.26%)
Grand Optical Photoservice.......... 9,111 1,173,569
IRON & STEEL FOUNDRIES (0.39%)
Boehler-Uddeholm AG(c).............. 22,442 1,738,878
Svenskt Stal AB - Series A.......... 481 6,080
LEATHER & LEATHER PRODUCTS (1.84%)
Adidas AG........................... 97,504 8,194,744
MACHINERY, EQUIPMENT & SUPPLIES (0.23%)
Sidel, SA........................... 4,036 1,026,407
MANAGEMENT SERVICES (0.22%)
Medaphis Corporation(a)............. 24,625 978,844
MANUFACTURING INDUSTRIES (3.89%)
Assa Abloy AB - Class B............. 74,085 1,070,302
Assa Abloy AB - Class B Free........ 370,426 5,351,527
Barco Industries nv................. 32,028 5,133,315
London International Group plc...... 344,926 813,507
Mitsubishi Heavy Industries Ltd..... 357,000 3,098,270
Sulzer AG........................... 2,862 1,839,220
MEDICAL INSTRUMENTS & SUPPLIES (1.15%)
Getinge Industrier AB - Class B..... 131,407 2,471,915
Nobel Biocare AB(a)................. 126,262 2,337,130
Nobel Biocare AB 144A(a)(c)......... 16,000 296,163
MINING (0.42%)
Potash Corporation of Saskatchewan,
Inc............................... 28,419 1,882,759
OIL & GAS EXTRACTION (0.86%)
YPF Sociedad Anonima SA - Sponsored
ADR............................... 169,550 3,814,875
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
25
<PAGE> 28
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PAPER & ALLIED PRODUCTS (0.40%)
Alco Standard Corporation........... 39,225 $ 1,774,931
PAPER & PAPER PRODUCTS (0.27%)
Valmet Corporation.................. 70,717 1,195,831
PERSONAL CREDIT INSTITUTIONS (0.29%)
Associates First Capital
Corporation(a).................... 34,425 1,295,241
PERSONAL SERVICES (2.52%)
Adia SA(b).......................... 5,044 1,265,939
Hays plc............................ 1,232,206 8,694,528
Ranstad Holdings N.V................ 17,047 1,258,450
PHARMACEUTICALS (11.10%)
Astra AB - Class A Free............. 9,884 435,818
Ciba-Geigy AG - Registered.......... 5,925 7,222,145
Eisai Company Ltd. ................. 261,500 4,929,469
Eli Lilly & Company................. 70,275 4,567,875
Gehe AG............................. 6,447 4,329,632
Glaxo Wellcome Plc.................. 113,500 1,528,521
Grupo Casa Autrey S.A. de C.V. -
Sponsored ADR..................... 67,075 1,442,113
Nycomed ASA - Class A(a)............ 6,993 100,672
Pfizer, Inc......................... 12,625 901,109
Roche Holding AG.................... 1,245 9,498,461
Sandoz AG........................... 6,319 7,227,631
SmithKline Beecham Plc.............. 315,122 3,372,016
SmithKline Beecham Plc - ADR........ 32,675 1,776,703
Takeda Chemical Industries Ltd. .... 117,000 2,067,025
PRIMARY METAL INDUSTRIES (0.63%)
Hoganas AB - Class B................ 50,960 1,779,190
Kobe Steel Ltd.(a).................. 165,000 473,318
NKK Corporation(a).................. 179,000 541,189
PRINTING & PUBLISHING (2.12%)
EMAP plc............................ 50,741 558,341
John H. Harland Company............. 39,225 965,916
Wolters Kluwer NV................... 69,559 7,902,209
RADIO & TELEVISION BROADCASTING (1.06%)
CanWest Global Communications
Corporation(a).................... 38,050 1,036,863
Central European Media Enterprises
Ltd.(a)........................... 91,165 2,279,125
Grupo Televisa S.A. - Sponsored
GDR(a)(b)......................... 29,125 895,594
Heritage Media Corporation - Class
A(a).............................. 13,150 524,356
RAILROADS (0.01%)
Tranz Rail Holdings Ltd. - Sponsored
ADR(a)............................ 4,700 65,213
REAL ESTATE (0.48%)
Empire East Land Holdings,
Inc.(a)........................... 330,000 162,657
Mitsubishi Estate Co., Ltd.......... 121,000 1,663,874
Mitsui Fudosan Co., Ltd............. 23,000 309,990
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
RESEARCH & TESTING SERVICES (1.06%)
WM-Data AB - Class B................ 74,807 $ 4,728,208
SECURITY & COMMODITY BROKERS (1.10%)
Grupo Financiero Inbursa, SA de
CV - Class B...................... 1,178,525 4,905,491
STONE, CLAY & GLASS PRODUCTS (0.27%)
Fortune Cement Corp.(a)............. 687,000 361,233
PT Mulia Industrindo................ 580,500 860,647
TELECOMMUNICATIONS (4.62%)
Asia Satellite Telecommunications
Holdings Ltd.(a)(b)............... 80,475 2,394,130
Compania de Telecomunicaciones de
Chile S.A. - Sponsored ADR(b)..... 6,075 596,109
Korea Mobile Telecommunications
144A(a)(b)(c)..................... 181,063 3,064,491
MFS Communications Company,
Inc.(a)(b)........................ 31,225 1,174,840
Millicom International Cellular
S.A.(a)........................... 32,825 1,563,290
Netcom Systems AB(a)................ 142,026 1,603,001
Nippon Telegraph & Telephone
Corporation....................... (e) 1,627
Nokia AB - K Shares................. 38,460 1,420,853
Paging Network, Inc.(a)............. 139,400 3,345,600
Portugal Telecom S.A. - Sponsored
ADR(b)............................ 64,700 1,698,374
Telecom Argentina Stet - France
Telecom S.A. - ADR(b)............. 6,650 311,718
Telecom Brasileiras SA - Sponsored
ADR Rights........................ 540 43
Telecomunicacoes Brasileiras SA -
Sponsored ADR..................... 15,400 1,101,251
Telefonica de Argentina S.A. -
Sponsored ADR(b).................. 76,175 2,256,683
TEXTILE MILL PRODUCTS (0.98%)
Wolford AG.......................... 18,196 4,350,995
TOBACCO PRODUCTS (1.98%)
Japan Tobacco, Inc.(c).............. 262 2,004,188
PT Hanjaya Mandala Sampoerna........ 597,500 6,804,361
------------
Total Common Stocks
(cost: $ 330,099,728).......................... 407,204,506
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS (0.27%)
U.S. Treasury Bills
5.12%, due 10/03/96............ $ 125,000 $ 123,295
U.S. Treasury Bills
5.12%, due 10/03/96............ 1,100,000 1,084,981
-------------
Total Short-Term U.S. Government Obligations
(cost: $ 1,208,276)........................... 1,208,276
-------------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
26
<PAGE> 29
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
COMMERCIAL PAPER (1.91%)
Ford Motor Credit Co.
5.49%, due 07/01/96............ $ 8,500,000 $ 8,497,408
-------------
Total Commercial Paper
(cost: $ 8,497,408)........................... 8,497,408
-------------
Total Investment Securities
(cost: $ 359,585,918)....................... $ 442,528,453
==============
SUMMARY
Investments at value............. 99.44% $ 442,528,453
Other Assets in
Excess of Liabilities.......... 0.56% 2,511,101
------- -------------
Net Assets....................... 100.00% $ 445,039,554
======= =============
INVESTMENTS BY COUNTRY
Size of investment is indicated as a percentage of total
portfolio net
assets.
<CAPTION>
MARKET VALUE PERCENTAGE
------------- ----------
<S> <C> <C>
Australia....................... $ 2,521,714 0.57%
Austria......................... 6,089,873 1.37%
Belgium......................... 5,133,315 1.15%
Brazil.......................... 3,007,779 0.68%
Denmark......................... 1,654,893 0.37%
Finland......................... 9,118,796 2.05%
France.......................... 16,874,691 3.79%
Germany......................... 46,029,682 10.34%
Hong Kong....................... 4,490,084 1.01%
Indonesia....................... 8,405,307 1.89%
Japan........................... 59,427,408 13.35%
Italy........................... 4,419,937 0.99%
Mexico.......................... 6,330,085 1.42%
Netherlands..................... 31,989,343 7.19%
Norway.......................... 100,672 0.02%
Philippines..................... 2,699,997 0.61%
Spain........................... 2,376,813 0.53%
Sweden.......................... 50,668,633 11.39%
Switzerland..................... 33,266,655 7.48%
United Kingdom.................. 46,786,524 10.51%
United States................... 103,647,353 23.29%
------------- ----------
$ 445,039,554 100.00%
============== ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
(b) See footnote 1C to financial statements.
(c) Securities are registered pursuant to rule 144A and may be deemed to be
restricted for resale.
(d) Industry percentage is less than .01%.
(e) Less than one share held.
ADR American Depository Receipt
GDR Global Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
27
<PAGE> 30
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Preferred Stocks 5.26%
Automotive 3.02%
Business Services 2.95%
Chemicals & Allied Products 4.45%
Commercial Banks 3.52%
Computer & Data Processing Service 9.15%
Electronic & Other Electric Equipment 3.39%
Environmental Services 5.01%
Food & Kindred Products 2.50%
Holding & Other Investment Offices 5.14%
Manufacturing Industries 3.89%
Personal Services 2.52%
Pharmaceuticals 11.10%
Printing & Publishing 2.12%
Telecommunications 4.62%
Other 31.36%
</TABLE>
After the financial markets posted strong gains for a majority of 1995, interest
rates reversed course and steadily moved up during 1996. Still, the Standard &
Poor's Index of 500 Common Stocks managed to reach a new high by posting a
10.10% gain for the first six months, and the Morgan Stanley Capital
International World Index posted a strong 7.36% gain for the first six months of
the year. The Global Portfolio outperformed both the indexes, rising 20.28% for
the six months ended June 30, 1996. Fundamental research and good individual
stock selection continue to be the driving force behind portfolio performance.
In the U.S., the economic backdrop remained mixed. Data on employment,
manufacturing, and auto and housing sales argued for increased momentum in the
rate of economic growth. Commodity prices, however, sold off during the most
recent quarter, which was good news for inflation. The high rate of consumer
loan delinquencies also suggested that consumer spending might be ready to
abate. Overseas, a number of the large European economies are still sluggish,
and interest rates have declined or remained relatively low. Despite renewed
strength in the Japanese economy, rates there are still depressed. Overall,
international markets performed well recently, led by the Far East and Latin
America.
Many familiar foreign names continued to register excellent returns. Getronics
NV, the Dutch computer systems integrator and service provider, split four for
one. The company continues to beat earnings expectations. Millicom International
Cellular S.A. is opening new cellular markets in emerging economies, and Swedish
company Assa Abloy AB, a maker of security devices, is generating strong
earnings.
In the U.S., a diverse group of holdings performed well. HFS, Inc., the hotel
franchisor, continues to make acquisitions and develop synergistic cross-selling
strategies. HFS, Inc., recently acquired real estate broker Century 21 and is
currently in negotiations to buy car rental company Avis. With markets
relatively high, we took profits somewhat more aggressively in the last quarter
than in the previous one and trimmed a number of positions. One example of this
is the newspaper publisher Hollinger International, Inc., which we sold when it
reached our price target.
We expect the U.S. markets to remain volatile as long as investors are uncertain
about the strength of economic growth. While price fluctuations can be unnerving
in the near term, they also present an opportunity to add value -- to establish
or augment positions at lower prices. Part of our strategy going forward will be
to take advantage of price volatility to selectively build the portfolio.
<TABLE>
<S> <C>
(JANUS SYMBOL) /S/ HELEN YOUNG HAYES
(1)THE JANUS SYMBOL IS A
REGISTERED SERVICE MARK OF JANUS Helen Young Hayes
CAPITAL CORPORATION Global Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
28
<PAGE> 31
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 349,880,234)........................... $ 432,822,769
Short-term securities, at amortized cost......... 9,705,684
Cash............................................. 3,280,072
Cash collateral.................................. 43,494,230
Receivables:
Fund shares sold............................... 0
Securities sold................................ 13,491,867
Interest....................................... 5,418
Dividends...................................... 620,698
Foreign receivable............................. 239,111
Foreign currency contracts..................... 2,265,108
Other.......................................... 259,863
-------------
Total assets................................. 506,184,820
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 15,782,849
Accounts payable and accrued liabilities:
Investment advisory fees....................... 264,677
Custody fees................................... 1,178,985
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 43,494,230
Other fees..................................... 424,525
-------------
Total liabilities............................ 61,145,266
-------------
Total net assets........................... $ 445,039,554
==============
NET ASSETS:
Capital stock
($ .01 par value 100,000,000 authorized)....... $ 238,697
Additional paid-in capital....................... 331,978,585
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 709,978
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 22,208,271
Foreign currency transactions................ 4,760,695
Futures contract............................. 353,304
Net unrealized appreciation (depreciation) on:
Investment securities........................ 82,942,535
Foreign currency transactions................ 2,254,714
Futures contracts............................ (407,225)
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 445,039,554
==============
Shares outstanding at June 30, 1996.............. 23,869,664
==============
Net asset value per share........................ $ 18.64
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest................................... $ 433,096
Dividends (net of foreign tax of
$ 463,366)............................... 3,146,123
-----------------
Total investment income.............. 3,579,219
-----------------
EXPENSES:
Investment advisory fees................... 1,449,081
Printing and shareholder reports........... 27,545
Custody fees............................... 181,687
Legal fees................................. 1,354
Auditing and accounting fees............... 5,049
Directors fees............................. 1,100
Registration fees.......................... 430
Other fees................................. 1,016
-----------------
Total expenses....................... 1,667,262
Less:
Advisory fee waiver and expense
reimbursement.......................... 0
Fees paid indirectly..................... 1,831
-----------------
Net expenses......................... 1,665,431
-----------------
Net investment income (loss)............... 1,913,788
-----------------
Net realized gain (loss) on:
Investment securities.................. 21,597,671
Foreign currency transactions.......... 4,760,695
Futures contracts...................... 353,304
-----------------
Total net realized gain (loss)....... 26,711,670
-----------------
Change in unrealized appreciation
(depreciation) on:
Investment securities.................. 37,794,630
Foreign currency transactions.......... 804,039
Futures contracts...................... (407,225)
-----------------
Total change in unrealized
appreciation (depreciation)........ 38,191,444
-----------------
Net gain (loss) on investments......... 64,903,114
-----------------
Net increase (decrease) in net assets
resulting from operations................ $ 66,816,902
===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
29
<PAGE> 32
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)......................................................... $ 1,913,788 $ 1,941,264
Net realized gain (loss) on investments and foreign currency transactions............ 26,711,670 8,256,989
Change in unrealized appreciation (depreciation) on investments and foreign currency
transactions....................................................................... 38,191,444 43,682,105
----------------- -----------------
Net increase (decrease) in net assets resulting from operations.................... 66,816,902 53,880,358
----------------- -----------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................ (400,000) 0
In excess of net investment income................................................... 0 0
Net realized gains................................................................... 0 (11,272,429)
In excess of net realized gains...................................................... 0 0
----------------- -----------------
Total distributions................................................................ (400,000) (11,272,429)
----------------- -----------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.................................................... 95,435,340 33,603,270
Dividends and distributions reinvested............................................... 400,000 11,272,429
Cost of shares repurchased........................................................... (6,718,335) (59,756,345)
----------------- -----------------
Increase (decrease) in net assets from capital shares transactions................. 89,117,005 (14,880,646)
----------------- -----------------
Net increase (decrease) in net assets.............................................. 155,533,907 27,727,283
NET ASSETS:
Beginning of period.................................................................. 289,505,647 261,778,364
----------------- -----------------
End of period........................................................................ $ 445,039,554 $ 289,505,647
=================== ===================
Undistributed net investment income................................................ $ 709,978 $ (803,810)
=================== ===================
SHARE ACTIVITY:
Shares outstanding - beginning of period............................................. 18,658,875 19,954,849
----------------- -----------------
Shares issued........................................................................ 5,586,667 2,319,062
Shares issued - reinvestment of dividends and distributions.......................... 21,560 726,386
Shares redeemed...................................................................... (397,438) (4,341,422)
----------------- -----------------
Increase (decrease) in shares outstanding............................................ 5,210,789 (1,295,974)
----------------- -----------------
Shares outstanding - end of period................................................... 23,869,664 18,658,875
=================== ===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
30
<PAGE> 33
WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
GLOBAL PORTFOLIO
AND THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Morgan Stanley Capital International World
Index (MS) over the same time frame.
<TABLE>
<CAPTION>
Portfolio MS Index
<S> <C> <C>
Inception 12/3/92 $10,000 $10,000
Period Ended 12/31/92 $10,162 $10,008
FYE 12/31/93 $13,724 $12,415
FYE 12/31/94 $13,759 $13,110
FYE 12/31/95 $16,932 $15,900
Six Months Ended 6/30/96 $20,365 $17,070
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- ------------------------------------------------
1996 1995 1994 1993 1992+
--------- --------- --------- -------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................... $ 15.52 $ 13.12 $ 13.62 $ 10.16 $ 10.00
Income from operations:
Net investment income (loss)....................... .09 .10 .10 .04 (.02)
Net realized and unrealized
gain (loss) on investments....................... 3.05 2.91 .10 3.72 .18
--------- --------- --------- -------- -------
Total income (loss) from operations.............. 3.14 3.01 .20 3.76 .16
--------- --------- --------- -------- -------
Distributions:
Dividends from net investment income............... (.02) .00 (.10) (.04) .00
Dividends in excess of net investment income....... .00 .00 (.01) .00 .00
Distributions from net realized gains
on investments................................... .00 (.61) (.56) (.26) .00
Distributions in excess of net realized gains
on investments................................... .00 .00 (.03) .00 .00
--------- --------- --------- -------- -------
Total distributions.............................. (.02) (.61) (.70) (.30) .00
--------- --------- --------- -------- -------
Net asset value, end of period......................... $ 18.64 $ 15.52 $ 13.12 $ 13.62 $ 10.16
========== ========== ========== ========= ========
Total return........................................... 20.28% 23.06% .25% 35.05% 1.62%
Ratios and supplemental data:
Net assets at end of period
(in thousands)..................................... $ 445,040 $ 289,506 $ 261,778 $ 99,094 $ 508
Ratio of expenses to average net assets.............. .91% .99% 1.01% 1.09% 2.48%
Ratio of net investment income (loss)
to average net assets.............................. 1.04% .75% .73% .30% (2.23)%
Ratio of commission paid to number of shares......... 1.86% n/a n/a n/a n/a
Portfolio turnover rate.............................. 45.45% 130.60% 192.06% 79.93% .00%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was December 3, 1992. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
Foreign securities involve special risks described in the prospectus that should
be considered carefully before investing.
- --------------------------------------------------------------------------------
31
<PAGE> 34
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------------ -----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (2.91%)
U.S. Treasury Notes
6.13%, due 05/31/97.............. $ 4,300,000 $ 4,313,502
U.S. Treasury Notes
6.00%, due 11/30/97.............. 4,500,000 4,502,655
------------
Total U.S. Government Obligations
(cost: $ 8,839,261)............................ 8,816,157
------------
CORPORATE DEBT SECURITIES (13.14%)
BUSINESS SERVICES (1.49%)
Olsten Corporation
7.00%, due 03/15/06.............. 4,625,000 4,503,593
CHEMICALS & ALLIED PRODUCTS (0.96%)
Dexter Corp
9.25%, due 12,15/16.............. 1,425,000 1,511,100
M.A. Hanna Company
9.38%, due 09/15/03.............. 1,250,000 1,393,750
COMMERCIAL BANKS (0.86%)
First Union Corporation
7.25%, due 02/15/03.............. 2,600,000 2,613,000
DEPARTMENT STORES (1.93%)
May Department Stores Company
9.13%, due 12/01/16.............. 5,500,000 5,775,000
May Department Stores Company
10.75%, due 06/15/18............. 75,000 80,250
ELECTRIC SERVICES (1.26%)
Potomac Electric Power Company
5.00%, due 09/01/02.............. 4,250,000 3,825,000
ELECTRICAL GOODS (0.72%)
Avnet, Inc.
6.88%, due 03/15/04.............. 2,199,000 2,166,015
GAS PRODUCTION & DISTRIBUTION (2.03%)
Oneok, Inc.
9.75%, due 12/01/20.............. 1,000,000 1,103,750
Transcontinental Gas Power & Light
Company
9.13%, due 02/01/17.............. 4,800,000 5,034,000
HEALTH SERVICES (0.71%)
Quantum Health Resources, Inc.
4.75%, due 10/01/00.............. 2,400,000 2,142,000
HOLDING & OTHER INVESTMENT OFFICES (0.20%)
Meditrust Corporation
6.88%, due 11/15/98.............. 600,000 600,000
LIFE INSURANCE (1.16%)
Torchmark Corporation
8.63%, due 03/01/17.............. 3,350,000 3,509,125
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
CORPORATE DEBT SECURITIES (CONTINUED)
RAILROADS (0.98%)
Union Pacific Corporation
6.25%, due 03/15/99.............. $ 3,000,000 $ 2,970,000
RESTAURANTS (0.14%)
PepsiCo, Inc.
7.88%, due 08/15/96.............. 409,000 410,023
TELECOMMUNICATIONS (0.36%)
GTE Corporation
10.75%, due 09/15/17............. 1,000,000 1,091,250
TOBACCO PRODUCTS (0.34%)
RJR Nabisco Holdings Corporation
8.30%, due 04/15/99.............. 1,000,000 1,037,500
------------
Total Corporate Debt Securities
(cost: $ 40,195,998)........................... 39,765,356
------------
CONVERTIBLE BONDS (2.67%)
INSURANCE (0.99%)
American Travelers Corporation
6.50%, due 10/01/05.............. 1,900,000 3,006,750
OIL & GAS EXTRACTION (0.90%)
Nabors Industries, Inc.
5.00%, due 05/15/06.............. 2,450,000 2,719,500
WHOLESALE TRADE DURABLE GOODS (0.78%)
Danka Business Systems PLC(c)...... 2,000,000 2,362,500
------------
Total Convertible Bonds
(cost: $ 6,489,791)............................ 8,088,750
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (3.24%)
ELECTRIC SERVICES (1.28%)
Calenergy, Inc. - Capital Trust(c)..... 72,000 $ 3,870,000
PAPER ALLIED PRODUCTS (1.96%)
International Paper Company(c)......... 49,000 2,241,750
James River Corporation of
Virginia - Series L.................. 78,800 3,693,750
------------
Total Convertible Preferred Stocks
(cost: $ 9,729,653)........................... 9,805,500
------------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
32
<PAGE> 35
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
PREFERRED STOCKS (0.99%)
MOTION PICTURES (0.99%)
Time Warner, Inc....................... 83,500 $ 3,006,000
------------
Total Preferred Stocks
(cost: $ 2,620,600)........................... 3,006,000
------------
COMMON STOCKS (74.82%)
APPAREL & ACCESSORY STORES (1.18%)
Intimate Brands, Inc. .................156,000 3,568,500
BUSINESS SERVICES (2.83%)
Manpower, Inc..........................110,000 4,317,500
Olsten Corporation(b)..................145,050 4,260,843
CHEMICALS & ALLIED PRODUCTS (10.88%)
Colgate-Palmolive Company............ 28,700 2,432,325
Estee Lauder Companies -
Class A..............................100,000 4,225,000
E.I. Dupont De Nemours &
Company.............................. 46,000 3,639,750
Hanson PLC - Sponsored
ADR(b)...............................255,000 3,633,750
Lawter International, Inc..............337,500 4,218,750
Loctite Corporation.................... 54,500 2,534,250
M.A. Hanna Company.....................152,475 3,182,916
Nalco Chemical Company.................130,100 4,098,150
Olin Corporation....................... 25,000 2,231,250
Procter & Gamble Company............... 30,000 2,718,750
COMMERCIAL BANKS (1.32%)
Mellon Bank Corporation................ 70,000 3,990,000
COMPUTER & DATA PROCESSING SERVICE (0.89%)
Electronic Data Systems
Corporation.......................... 50,000 2,687,500
Information Resources, Inc.(a).......... 873 10,694
COMPUTER & OFFICE EQUIPMENT (1.38%)
Hewlett-Packard Company................ 42,000 4,184,250
DEPARTMENT STORES (1.30%)
J.C. Penney Company, Inc............... 75,000 3,937,500
ELECTRICAL GOODS (1.21%)
Westinghouse Electric
Corporation(b).....................195,000 3,656,250
ELECTRONIC COMPONENTS & ACCESSORIES (1.15%)
AMP, Inc............................... 87,000 3,490,875
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (5.99%)
Duracell International, Inc............ 70,000 3,018,750
Emerson Electric Company............... 32,000 2,892,000
General Electric Company............... 60,000 5,190,000
National Service Industries, Inc.......114,800 4,491,550
Thomas & Betts Corporation............. 67,200 2,520,000
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
----------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ENVIRONMENTAL SERVICES (1.40%)
WMX Technologies, Inc..................129,100 $ 4,228,025
FABRICATED METAL PRODUCTS (1.89%)
Keystone International, Inc............130,000 2,697,500
Masco Corporation......................100,000 3,025,000
FINANCE (1.10%)
Federal National Mortgage
Association.......................... 99,000 $ 3,316,500
FOOD & KINDRED PRODUCTS (1.58%)
H.J. Heinz Company.....................157,500 4,784,063
HEALTH SERVICES (1.22%)
Columbia/HCA Healthcare
Corporation.......................... 69,400 3,704,225
HOLDING & OTHER INVESTMENT OFFICES (1.74%)
Crescent Real Estate Equities, 2,594,550
Inc.................................. 70,600
Storage USA, Inc....................... 82,500 2,660,625
INDUSTRIAL MACHINERY & EQUIPMENT (2.09%)
Baker Hughes, Inc......................120,000 3,945,000
Stewart & Stevenson Services, Inc......105,000 2,388,750
INSTRUMENTS & RELATED PRODUCTS (2.18%)
Eastman Kodak Company.................. 37,900 2,946,725
Raytheon Company....................... 70,800 3,655,050
INSURANCE (1.40%)
American International Group, Inc...... 43,000 4,240,874
INSURANCE AGENTS, BROKERS & SERVICE (1.75%)
Marsh & McLennan Companies, Inc........ 55,000 5,307,500
LUMBER & OTHER BUILDING MATERIALS (0.92%)
Home Depot, Inc........................ 51,612 2,787,048
MANUFACTURING INDUSTRIES (1.57%)
Tyco International Ltd.................117,000 4,767,750
MEDICAL INSTRUMENTS & SUPPLIES (1.91%)
Baxter International, Inc.............. 25,000 1,181,250
C.R. Bard, Inc.........................135,000 4,590,000
MOTION PICTURES (0.94%)
Walt Disney Company.................... 45,400 2,854,525
OIL & GAS EXTRACTION (2.48%)
Atlantic Richfield Company............. 34,000 4,029,000
Union Pacific Resources Group, Inc.....130,000 3,477,500
PAINT, GLASS, WALLPAPER STORES (1.04%)
Sherwin-Williams Company............... 67,700 3,148,050
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
33
<PAGE> 36
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PERSONAL CREDIT INSTITUTIONS (0.25%)
Associates First Capital
Corporation(a)....................... 20,000 $ 752,500
PERSONAL SERVICES (0.87%)
H&R Block, Inc......................... 81,100 2,645,888
PETROLEUM REFINING (4.43%)
Amoco Corporation...................... 60,700 4,393,163
Exxon Corporation...................... 57,400 4,986,625
Mobil Corporation...................... 35,900 4,025,288
PHARMACEUTICALS (3.04%)
Pharmacia & Upjohn, Inc. ..............112,525 4,993,297
Schering-Plough Corporation............ 67,000 4,204,250
PRINTING & PUBLISHING (0.97%)
A.H. Belo Corp. - Class A.............. 78,800 2,935,300
RESTAURANTS (0.99%)
PepsiCo, Inc. ......................... 85,000 3,006,875
SAVINGS INSTITUTIONS (1.44%)
First Colorado Bancorp, Inc. ..........330,000 4,372,500
TELECOMMUNICATIONS (2.31%)
Airtouch Communications, Inc.(a).......105,400 2,977,550
Alltel Corporation.....................117,900 3,625,425
Lucent Technologies, Inc............... 10,000 378,750
TOBACCO PRODUCTS (1.41%)
UST, Inc. .............................125,000 4,281,250
TRANSPORTATION & PUBLIC UTILITIES (1.01%)
Laidlaw One, Inc. .....................100,000 3,050,000
WHOLESALE TRADE DURABLE GOODS (3.11%)
Danka Business Systems PLC -
Sponsored ADR(b)..................... 18,000 526,500
Fisher Scientific International........105,000 3,937,500
Johnson & Johnson......................100,000 4,950,000
WHOLESALE TRADE NONDURABLE GOODS (1.65%)
Philip Morris Companies, Inc. ......... 48,000 4,992,000
------------
Total Common Stocks 226,495,274
(cost: $ 190,609,178)......................... ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
------------ -------------
<S> <C> <C>
SHORT-TERM OBLIGATION (2.34%)
Salomon Brothers(d)
4.98%, Repurchase Agreement dated
06/28/96 to be repurchased at
$ 7,091,863 on 07/01/96.......... $ 7,088,921 $ 7,088,921
-------------
Total Short-Term Obligation
(cost: $ 7,088,921)........................... 7,088,921
-------------
Total Investment Securities
(cost: $ 265,573,402)....................... $ 303,065,958
==============
SUMMARY
Investments at value............... 100.11 % $ 303,065,958
Other Liabilities in
Excess of Assets................. (0.11)% (329,659)
-------- -------------
Net Assets......................... 100.00 % $ 302,736,299
======== =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve
months.
(b) See footnote 1C to financial statements.
(c) Securities are registered pursuant to rule 144A and may be
deemed to be restricted for resale.
(d) Collateralized by $ 1,027,911 Treasury Note 6.38% due
06/30/97; $ 568,336 Treasury Note 7.50% due 10/31/99; $2,058,368 Treasury
Note 7.25% due 08/15/22; $ 908,274 Treasury Note 7.50% due 01/31/97;
$ 1,694,017 Treasury Note 11.25% due 02/15/15; market value and accrued
interest aggregated $ 1,066,072, $ 594,153, $ 2,160,236, $ 946,149,
$ 2,506,493 respectively for the collateral at June 30, 1996.
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
34
<PAGE> 37
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
CHART
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 2.91%
Corporate Debt Securities 13.14%
Business Services 2.83%
Chemicals & Allied Products 10.88%
Electronic & Other Electric Equipment 5.99%
Industrial Machinery & Equipment 2.09%
Instruments Related Products 2.18%
Oil & Gas Extraction 2.48%
Petroleum Refining 4.43%
Pharmaceuticals 3.04%
Telecommunications 2.31%
Wholesale Trade Durable Goods 3.11%
Convertible Bonds 2.67%
Convertible Preferred Stocks 3.24%
Short-Term Obligation 2.34%
Other 36.36%
</TABLE>
The Equity-Income Portfolio's objective is both growth and income generation.
The Portfolio invests in common stocks, convertible securities,
intermediate-term government and corporate bonds, and cash. For the six months
ended June 30, 1996, the Equity-Income Portfolio returned 6.91%. By comparison,
the Standard & Poor's 500 Index of 500 Common Stocks rose 10.10% and the Lehman
Brothers Government/Corporate Intermediate Bond Index retreated (.21%) for the
same period. On June 30, the asset mix for the Portfolio was 75.81% stocks,
5.91% convertible securities, 13.14% corporate bonds, 2.91% Treasury bonds, and
2.23% cash equivalents.
Given the strong performance of the equity market relative to the bond market
during the period, the Portfolio's bond holdings diluted overall investment
performance. The bond portion of the Portfolio still remains important, though,
because it generates a large portion of the Portfolio's income and tends to
reduce overall volatility.
Following a blockbuster year in 1995, stock prices continued higher in the first
half of 1996 as record mutual fund cash flows, cash repurchases, and merger and
acquisition activity overshadowed rising interest rates and slowing corporate
profit growth. Unlike last year, which experienced dramatic outperformance by
the market leaders (technology, finance and health care sectors), the first half
of 1996 was characterized by strength in a number of sectors. In general, steady
consumer-related stocks outpaced economically sensitive issues.
Given the narrow range of returns among various sectors, the Portfolio's
weightings in different industries had only a modest impact on overall
performance. The performance of stocks within given sectors, however, varied
widely. As a result, stock selection was very important and the Portfolio
contained winners within most sectors and among both large and small stocks.
Significant contributors to performance included Acme Cleveland Corporation
(which received a takeover bid from Danaher Corporation), Baker Hughes, Inc.,
General Electric Company, Hewlett-Packard Company, National Service Industries,
Inc., and Schering-Plough Corporation.
We continue to forecast volatility for the market over the next six months. The
presidential race and uncertainty over interest rates should contribute to this
inconstancy. The Equity-Income Portfolio focuses its investments on companies
with strong balance sheets, established market shares, and high and sustainable
profit levels. We continue to emphasize companies with defensible franchises,
consistent growth prospects, and compelling valuations. In line with the income
component of our objective, the Portfolio almost exclusively invests in
companies that pay a dividend and have strong dividend growth characteristics.
The Equity-Income Portfolio's strategy of investing in a blend of income
producing stocks and bonds has proven to be a successful method of participating
in much of the reward available in equity investing while reducing the
volatility of the overall Portfolio.
<TABLE>
<S> <C> <C>
[LKCM LOGO] /s/ Luther King /s/ Scot C. Hollmann
-------------------------------- ----------------------------
Luther King Scot C. Hollmann
Equity-Income Portfolio Managers
</TABLE>
- --------------------------------------------------------------------------------
35
<PAGE> 38
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 258,484,481)........................... $ 295,977,037
Short-term securities, at amortized cost......... 7,088,921
Cash............................................. 0
Cash collateral.................................. 10,326,100
Receivables:
Fund shares sold............................... 0
Securities sold................................ 715,853
Interest....................................... 892,772
Dividends...................................... 480,385
Foreign receivable............................. 3,787
Other.......................................... 132,265
-------------
Total assets................................. 315,617,120
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 2,243,259
Accounts payable and accrued liabilities:
Investment advisory fees....................... 183,692
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 10,326,100
Other fees..................................... 127,770
-------------
Total liabilities............................ 12,880,821
-------------
Total net assets........................... $ 302,736,299
==============
NET ASSETS:
Capital stock
($ .01 par value 100,000,000 authorized)....... $ 221,602
Additional paid-in capital....................... 253,376,754
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 1,863,121
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 9,782,266
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 37,492,556
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 302,736,299
==============
Shares outstanding at June 30, 1996.............. 22,160,243
==============
Net asset value per share........................ $ 13.66
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 2,156,222
Dividends (net of foreign tax of $ 11,788)... 2,858,708
----------------
Total investment income................ 5,014,930
----------------
EXPENSES:
Investment advisory fees..................... 1,117,410
Printing and shareholder reports............. 20,575
Custody fees................................. 25,037
Legal fees................................... 1,039
Auditing and accounting fees................. 3,534
Directors fees............................... 837
Registration fees............................ 326
Other fees................................... 1,074
----------------
Total expenses......................... 1,169,832
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 54
----------------
Net expenses........................... 1,169,778
----------------
Net investment income (loss)................. 3,845,152
----------------
Net realized gain (loss) on:
Investment securities.................... 9,232,264
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 5,285,714
----------------
Net gain (loss) on investments........... 14,517,978
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 18,363,130
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
36
<PAGE> 39
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................ $ 3,845,152 $ 6,717,146
Net realized gain (loss) on investments............................................. 9,232,264 9,894,197
Change in unrealized appreciation (depreciation) on investments..................... 5,285,714 31,505,904
---------------- -------------------
Net increase (decrease) in net assets resulting from operations................... 18,363,130 48,117,247
---------------- -------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income............................................................... (2,000,000) (6,700,560)
Net realized gains.................................................................. 0 (6,702,504)
---------------- -------------------
Total distributions............................................................... (2,000,000) (13,403,064)
---------------- -------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares................................................... 39,725,393 49,617,709
Dividends and distributions reinvested.............................................. 2,000,000 13,403,064
Cost of shares repurchased.......................................................... (12,157,894) (24,796,488)
---------------- -------------------
Increase (decrease) in net assets from capital shares transactions................ 29,567,499 38,224,285
---------------- -------------------
Net increase (decrease) in net assets............................................. 45,930,629 72,938,468
NET ASSETS:
Beginning of period................................................................. 256,805,670 183,867,202
---------------- -------------------
End of period....................................................................... $ 302,736,299 $ 256,805,670
================== ====================
Undistributed net investment income............................................... $ 1,863,121 $ 17,969
================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period............................................ 19,962,450 16,863,575
---------------- -------------------
Shares issued....................................................................... 2,958,953 4,064,325
Shares issued - reinvestment of dividends and distributions......................... 146,949 1,059,083
Shares redeemed..................................................................... (908,109) (2,024,533)
---------------- -------------------
Increase (decrease) in shares outstanding........................................... 2,197,793 3,098,875
---------------- -------------------
Shares outstanding - end of period.................................................. 22,160,243 19,962,450
================== ====================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
37
<PAGE> 40
WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
EQUITY-INCOME PORTFOLIO,
THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS AND LEHMAN BROTHERS
GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard & Poor's Index of 500 Common
Stocks (S&P) and Lehman Brothers Government/Corporate Intermediate Bond Index
(LB) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index LB Index
<S> <C> <C> <C>
Inception 3/1/93 $10,000 $10,000 $10,000
Period Ended 12/31/93 $11,349 $10,770 $10,490
FYE 12/31/94 $11,288 $10,912 $10,805
FYE 12/31/95 $14,072 $14,996 $12,461
Six Months Ended 6/30/96 $15,045 $16,510 $12,435
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- ------------------------------------
1996 1995 1994 1993+
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........................... $ 12.86 $ 10.90 $ 11.23 $ 10.00
Income from operations:
Net investment income (loss)............................... .18 .37 .31 .19
Net realized and unrealized
gain (loss) on investments............................... .71 2.33 (.33) 1.33
--------- --------- --------- --------
Total income (loss) from operations...................... .89 2.70 (.02) 1.52
--------- --------- --------- --------
Distributions:
Dividends from net investment income....................... (.09) (.37) (.31) (.19)
Distributions from net realized gains
on investments........................................... .00 (.37) .00 (.10)
--------- --------- --------- --------
Total distributions...................................... (.09) (.74) (.31) (.29)
--------- --------- --------- --------
Net asset value, end of period................................. $ 13.66 $ 12.86 $ 10.90 $ 11.23
========== ========== ========== =========
Total return................................................... 6.91% 24.66% (.53)% 13.49%
Ratios and supplemental data:
Net assets at end of period
(in thousands)............................................. $ 302,736 $ 256,806 $ 183,867 $ 90,560
Ratio of expenses to average net assets...................... .83% .87% .89% 1.00%
Ratio of net investment income (loss)
to average net assets...................................... 2.73% 3.07% 2.78% 1.70%
Ratio of commission paid to number of shares................. 5.68% n/a n/a n/a
Portfolio turnover rate...................................... 19.24% 52.59% 53.50% 27.41%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was March 1, 1993. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
38
<PAGE> 41
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (94.33%)
AGRICULTURE (0.17%)
Veterinary Centers of America,
Inc.(a)............................. 30,000 $ 671,250
AIR TRANSPORTATION (0.99%)
America West Airlines -
Class B(a).......................... 25,000 550,000
Comair Holdings, Inc.................. 30,000 810,000
Continental Airlines, Inc. -
Class A(a).......................... 10,000 610,000
Continental Airlines, Inc. - Class
B(a)(b)............................. 30,000 1,852,500
AMUSEMENT & RECREATION SERVICES (0.35%)
Anchor Gaming(a)...................... 15,000 903,750
Penske Motorsports, Inc.(a)(b)........ 17,500 463,750
APPAREL PRODUCTS (1.77%)
Designer Holdings Ltd.(a)............. 25,000 665,625
Liz Claiborne, Inc. .................. 35,000 1,211,875
Nautica Enterprises, Inc.(a).......... 60,000 1,725,000
Quiksilver, Inc.(a)................... 19,100 573,000
Tommy Hilfiger Corporation(a)......... 50,000 2,681,250
APPAREL & ACCESSORY STORES (1.94%)
Claire's Stores, Inc. ................ 22,800 629,850
Gadzooks, Inc.(a)..................... 30,000 967,500
GAP, Inc.............................. 25,000 803,125
Loehmann's Holdings, Inc.(a).......... 10,000 230,000
Ross Stores, Inc...................... 35,000 1,216,250
Saks Holdings, Inc.(a)................ 25,000 853,125
St. John Knits, Inc................... 44,000 1,963,500
Zale Corporation(a)(b)................ 50,000 843,750
APPAREL, PIECE GOODS, & NOTIONS (2.08%)
Fila Holding S.p.A. - Sponsored ADR... 40,000 3,450,000
Nike, Inc. - Class B.................. 45,000 4,623,750
AUTO REPAIR, SERVICES & PARKING (0.12%)
Oxford Resources Corp. -
Class A(a).......................... 20,000 465,000
BEVERAGES (0.18%)
Coca-Cola Enterprises, Inc. .......... 20,000 692,500
BUSINESS CREDIT INSTITUTIONS (0.55%)
Finova Group, Inc..................... 40,000 1,950,000
First USA Paymentech, Inc.(a)......... 4,300 172,000
BUSINESS SERVICES (3.38%)
Accustaff, Inc.(a).................... 103,500 2,820,374
APAC Teleservices, Inc.(a)............ 50,000 1,800,000
Caribiner International, Inc.(a)...... 6,300 202,387
CKS Group, Inc.(a)(b)................. 10,000 322,500
Concord EFS, Inc.(a).................. 15,000 532,500
Corestaff, Inc.(a).................... 30,000 1,342,500
IntelliQuest Information Group,
Inc.(a)............................. 900 29,475
Interpublic Group of
Companies, Inc...................... 25,000 1,171,875
Mossimo, Inc.(a)...................... 10,000 398,750
Omnicom Group, Inc.................... 25,000 1,162,500
Security Dynamics Technologies,
Inc.(a)............................. 25,000 2,056,250
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
BUSINESS SERVICES (CONTINUED)
Sitel Corporation(a).................. 23,700 $ 995,400
The Vincam Group, Inc.(a)............. 10,000 260,000
CHEMICALS & ALLIED PRODUCTS (1.12%)
First Brands Corporation.............. 50,000 1,350,000
Praxair, Inc. ........................ 35,000 1,478,750
Revlon, Inc. - Class A(a)............. 11,000 320,375
USA Detergents, Inc.(a)............... 30,000 1,196,250
COMMERCIAL BANKS (1.65%)
Bank of Boston Corporation............ 35,000 1,732,500
Cullen/Frost Bankers, Inc............. 25,000 693,750
First Bank System, Inc................ 15,000 870,000
Firstar Corporation................... 30,000 1,383,750
North Fork Bancorporation, Inc. ...... 20,000 522,500
Peoples Heritage Financial
Group, Inc. ........................ 25,000 509,375
Star Banc Corporation................. 10,000 673,750
COMMUNICATIONS EQUIPMENT (7.73%)
Ascend Communications, Inc.(a)........ 140,000 7,875,000
Aspect Telecommunication
Corporation(a)...................... 35,000 1,732,500
Cable Design Technologies(a).......... 15,000 491,250
Cascade Communications Corp.(a)(b).... 85,000 5,780,000
Checkpoint Systems, Inc.(a)(b)........ 45,000 1,546,875
DSP Communications, Inc.(a)........... 65,000 3,339,375
ECI Telecommunications Limited........ 40,000 930,000
Microware Systems
Corporation(a)...................... 7,500 135,000
Parigain Technologies, Inc.(a)........ 100,000 6,200,000
Picturetel Corporation(a)............. 25,000 984,375
United States Satellite Broadcasting
Company, Inc.(a).................... 25,000 943,750
COMPUTER & DATA PROCESSING SERVICE (16.61%)
Adaptec, Inc.(a)...................... 20,000 947,500
Advanced Technology
Laboratories, Inc.(a)............... 35,000 1,277,500
Amisys Managed Care
Systems(a).......................... 10,000 257,500
Aspect Development, Inc.(a)........... 5,000 127,500
Aspen Technologies, Inc.(a)........... 20,000 1,100,000
BMC Software, Inc.(a)................. 30,000 1,792,500
Cadence Design
Systems, Inc.(a).................... 110,000 3,712,500
Cambridge Technology
Partners, Inc.(a)................... 45,000 1,372,500
Cisco Systems, Inc.(a)................ 80,000 4,530,000
Computer Associates
International, Inc.................. 10,000 712,500
Cycare Systems, Inc.(a)............... 15,500 807,938
Cylink Corporation(a)................. 10,000 172,500
Factset Research
Systems, Inc.(a).................... 7,500 127,500
Farallon Communications(a)............ 5,000 73,750
Gartner Group, Inc. - Class A......... 85,000 3,113,125
GT Interactive Software
Corporation(a)...................... 15,000 251,250
HBO & Company......................... 140,000 9,485,000
IDX Systems Corporation(a)............ 15,000 585,000
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
39
<PAGE> 42
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
COMPUTER & DATA PROCESSING SERVICE (CONTINUED)
Inso Corporation(a)(b)................ 20,000 $ 1,047,500
Integrated Systems, Inc.(a)........... 30,000 1,201,875
McAfee Associates, Inc. .............. 97,500 4,777,500
Medic Computer Systems, Inc.(a)....... 20,000 1,622,500
Meta-Software, Inc.(a)................ 10,000 172,500
National Data Corporation............. 25,000 856,250
Network General Corporation(a)........ 40,000 860,000
Oracle Corporation(a)................. 60,000 2,366,250
Parametric Technology
Company(a).......................... 70,000 3,036,250
Peoplesoft(a)......................... 30,000 2,137,500
Primark Corporation(a)................ 10,000 326,250
Remedy Corporation(a)................. 10,000 730,000
Reynolds & Reynolds Company - Class
A................................... 30,000 1,597,500
Sapient Corporation(a)................ 2,500 105,625
Shiva Corporation(a).................. 40,000 3,200,000
SS&C Technologies, Inc.(a)............ 4,500 68,625
Structural Dynamics Research
Corporation(a)...................... 30,000 660,000
Sun Microsystems, Inc.(a)............. 70,000 4,121,250
Sungard Data Systems, Inc.(a)......... 40,000 1,605,000
Sykes Enterprises, Inc.(a)............ 3,400 167,450
TCSI Corporation(a)................... 22,500 542,813
Transition Systems, Inc.(a)........... 25,000 712,500
Unify Corporation(a).................. 5,000 62,500
Viasoft, Inc.(a)...................... 25,000 1,615,625
Visic Corporation(a).................. 5,000 180,000
Whittman-Hart, Inc.(a)................ 4,400 158,400
COMPUTER & OFFICE EQUIPMENT (3.73%)
Applix, Inc.(a)....................... 20,000 575,000
Astea International, Inc.(a).......... 15,000 363,750
Auspex Systems, Inc.(a)............... 25,000 375,000
CBT Group PLC - Sponsored
ADR(a).............................. 4,600 212,750
Citrix Systems, Inc.(a)............... 30,000 1,140,000
Clarify, Inc.(a)...................... 5,000 247,500
Engineering Animation, Inc.(a)........ 8,000 160,000
HPR, Inc.(a).......................... 10,000 212,500
MetaTools, Inc.(a).................... 5,000 117,500
Mylex Corporation(a).................. 40,000 710,000
Nu-Kote Holding, Inc. -
Class A(a).......................... 35,000 581,875
Project Software &
Development, Inc.(a)................ 20,000 937,500
Proxim, Inc.(a)....................... 25,000 1,006,250
Raptor Systems, Inc.(a)(b)............ 5,000 132,500
Segue Software, Inc.(a)............... 5,000 148,750
Sterling Commerce, Inc.(a)(b)......... 15,000 556,875
U.S. Robotics Corporation(a).......... 80,000 6,840,000
Workgroup Technology
Corporation(a)...................... 5,000 125,625
CONSTRUCTION (0.65%)
Foster Wheeler Corporation............ 25,000 1,121,875
Granite Construction, Inc............. 45,000 1,035,000
Lennar Corporation.................... 15,000 375,000
DEPARTMENT STORES (0.22%)
TJX Companies, Inc.................... 25,000 843,750
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
DRUG STORES & PROPRIETARY STORES (0.23%)
Eckerd Corporation(a)................. 40,000 $ 905,000
EDUCATIONAL SERVICES (0.27%)
Apollo Group, Inc. - Class A(a)....... 37,500 1,050,000
ELECTRICAL GOODS (0.37%)
Hughes Supply, Inc.................... 5,000 173,750
Kent Electronics Corp.(a)............. 40,000 1,250,000
ELECTRONIC COMPONENTS & ACCESSORIES (0.69%)
Atmel Corporation(a).................. 15,000 451,875
Berg Electronics Corporation(a)....... 15,000 356,250
BMC Industries, Inc................... 30,000 862,500
MEMC Electronic Materials, Inc.(a).... 10,000 387,500
Vitesse Semiconductor
Corporation(a)...................... 25,000 600,000
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.01%)
Haman International
Industries, Inc..................... 25,000 1,231,250
LSI Industries, Inc.(a)............... 15,000 258,750
Raychem Corporation................... 25,000 1,796,875
UCAR International, Inc.(a)........... 15,000 624,375
ENVIRONMENTAL SERVICES (1.37%)
Sanifill, Inc.(a)..................... 40,000 1,970,000
United Waste Systems, Inc.(a)(b)...... 80,000 2,580,000
USA Waste Services, Inc............... 26,000 770,250
FABRICATED METAL PRODUCTS (0.87%)
Danaher Corporation................... 40,000 1,740,000
Snap-On, Inc.......................... 15,000 710,625
Sturm, Ruger & Company, Inc. ......... 20,000 930,000
FINANCE (1.55%)
Aames Financial Corporation(b)........ 30,000 1,076,250
ContiFinancial Corporation(a)......... 19,200 566,400
Green Tree Financial Corporation...... 35,000 1,093,750
IMC Mortgage Company(a)............... 5,000 112,500
Imperial Credit Industries, Inc.(a)... 20,000 605,000
Student Loan Marketing
Association......................... 22,500 1,665,000
The Money Store, Inc.................. 40,000 885,000
FOOD STORES (1.13%)
Kroger Company(a)..................... 40,000 1,580,000
Safeway, Inc.(a)(b)................... 40,000 1,320,000
Vons Companies, Inc.(a)............... 40,000 1,495,000
FURNITURE & HOME FURNISHINGS STORES (0.48%)
Bed Bath & Beyond, Inc.(a)............ 70,000 1,872,500
GAS PRODUCTION & DISTRIBUTION (0.13%)
Williams Companies, Inc............... 10,000 495,000
HEALTH SERVICES (5.03%)
Access Health, Inc.(a)................ 35,000 1,653,750
Chronimed, Inc.(a).................... 22,400 411,600
Compdent Corporation(a)............... 20,000 930,000
Enterprise Systems, Inc.(a)........... 2,400 66,000
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
40
<PAGE> 43
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH SERVICES (CONTINUED)
First Commonwealth, Inc.(a)........... 2,000 $ 55,750
Genesis Health Ventures, Inc.(a)...... 22,500 705,938
Health Management Associates,
Inc.(a)............................. 80,625 1,632,656
Health Management Systems, Inc.(a).... 45,000 1,428,750
HealthCare COMPARE
Corporation(a)...................... 25,000 1,218,750
HEALTHSOUTH Corporation(a)............ 75,000 2,700,000
Intelligent Medical Imaging,
Inc.(a)............................. 7,500 110,625
Invacare Corporation.................. 20,000 470,000
Orthodontic Centers of America,
Inc.(a)............................. 25,000 662,500
PhyCor, Inc.(a)....................... 32,500 1,235,000
Physician Reliance Network,
Inc.(a)(b).......................... 50,000 1,112,500
Renal Treatment Centers, Inc.(a)...... 50,000 1,437,500
Spine-Tech, Inc.(a)................... 15,000 435,000
Tenet Healthcare Corporation(a)....... 30,000 641,250
Total Renal Care Holdings, Inc.(a).... 25,500 1,077,375
United Dental Care, Inc.(a)........... 15,000 633,750
Universal Health Services, Inc. -
Class B(a).......................... 30,000 783,750
Vitalcom, Inc.(a)..................... 6,000 103,500
HOTELS & OTHER LODGING PLACES (2.51%)
Doubletree Corporation(a)............. 35,000 1,242,500
HFS, Inc.(a).......................... 60,000 4,200,000
MGM Grand, Inc.(a).................... 15,000 598,125
Mirage Resorts, Inc.(a)............... 45,000 2,430,000
Promus Hotel Corporation(a)........... 35,000 1,036,875
Suburban Lodges of America, Inc.(a)... 10,000 231,250
INDUSTRIAL MACHINERY & EQUIPMENT (1.51%)
Baker Hughes, Inc..................... 20,000 657,500
Camco International, Inc.............. 25,000 846,875
Greenfield Industries................. 30,000 990,000
Pentair, Inc.......................... 25,000 750,000
Smith International, Inc.(a).......... 50,000 1,506,250
US Filter Corporation(a).............. 31,700 1,101,575
INSTRUMENTS & RELATED PRODUCTS (1.23%)
Input/Output, Inc.(a)................. 80,000 2,590,000
SCI Systems, Inc.(a).................. 15,000 609,375
Thermedics, Inc.(a)................... 30,000 750,000
Thermo Instrument Systems, Inc.(a).... 10,000 322,500
ThermoQuest Corporation(a)............ 5,000 69,375
Zygo Corporation(a)................... 10,000 437,500
INSURANCE (1.75%)
American Bankers Insurance
Group, Inc.......................... 20,000 872,500
CMAC Investment Corporation........... 30,000 1,725,000
Exel Limited(b)....................... 35,000 2,467,500
Old Republic International
Corporation......................... 30,000 645,000
TIG Holdings, Inc..................... 20,000 580,000
Vesta Insurance Group, Inc............ 15,000 500,625
INSURANCE AGENTS, BROKERS & SERVICE (0.48%)
CRA Managed Care, Inc.(a)............. 10,000 447,500
Penncorp Financial Group, Inc.(b)..... 44,100 1,400,175
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
IRON & STEEL FOUNDRIES (0.22%)
Precision Castparts Corporation....... 20,000 $ 860,000
LEATHER & LEATHER PRODUCTS (0.38%)
Wolverine World Wide, Inc............. 45,000 1,462,500
LIFE INSURANCE (1.00%)
American Travellers
Corporation(a)...................... 60,000 1,380,000
Conseco Inc.(b)....................... 20,000 800,000
Sunamerica, Inc....................... 30,000 1,695,000
LUMBER & WOOD PRODUCTS (0.29%)
Oakwood Homes Corp.................... 20,000 412,500
Sun International Hotels Ltd.(a)...... 15,000 727,500
MANAGEMENT SERVICES (2.23%)
ABR Information Services, Inc.(a)..... 7,500 376,875
Corrections Corporation of
America(a)(b)....................... 68,500 4,795,000
Data Processing Resources
Corporation(a)...................... 5,700 157,462
Medaphis Corporation(a)............... 25,000 993,750
Paychex, Inc.......................... 45,000 2,165,625
Walsh International, Inc.(a).......... 15,000 138,750
MANUFACTURING INDUSTRIES (0.62%)
Oakley, Inc.(a)(b).................... 26,500 1,205,750
Thermo Optek Corporation(a)(b)........ 7,500 97,500
Tiffany & Company..................... 15,000 1,095,000
MEDICAL INSTRUMENTS & SUPPLIES (3.18%)
Aksys, Ltd.(a)........................ 10,000 152,500
Arterial Vascular Engineering,
Inc.(a)............................. 10,000 362,500
CNS, Inc.(a).......................... 20,000 485,000
Coherent, Inc.(a)..................... 11,800 613,600
CONMED Corporation(a)................. 15,000 399,375
ESC Medical Systems Limited........... 15,000 423,750
Guidant Corporation................... 70,000 3,447,500
Gulf South Medical Supply, Inc.(a).... 20,000 780,000
Hologic, Inc.(a)...................... 27,200 1,203,600
IRIDEX Corporation(a)................. 10,000 150,000
Lunar Corporation(a).................. 6,200 213,900
MedPartners/Mullikin, Inc.(a)(b)...... 50,000 1,043,750
Mentor Corporation(a)................. 40,000 1,020,000
MiniMed, Inc.(a)...................... 30,000 892,500
Target Therapeutics, Inc.(a).......... 25,000 1,025,000
UroCor, Inc.(a)....................... 10,000 122,500
MINING (0.26%)
Potash Corporation of
Saskatchewan, Inc................... 15,000 993,750
MISC. GENERAL MERCHANDISE STORES (0.57%)
Consolidated Stores Corporation(a).... 40,000 1,470,000
Sunglass Hut International,
Inc.(a)(b).......................... 30,000 731,250
MOTION PICTURES (0.65%)
Regal Cinemas, Inc.(a)................ 55,000 2,516,250
OIL & GAS EXTRACTION (4.64%)
Belco Oil & Gas Corporation(a)........ 5,000 177,500
BJ Services Company - Warrants........ 14,000 185,500
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
41
<PAGE> 44
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
OIL & GAS EXTRACTION (CONTINUED)
BJ Services Company(a)................ 39,378 $ 1,383,152
Chesapeake Energy Corporation(a)(b)... 45,000 4,044,375
Diamond Offshore Drilling, Inc.(a).... 25,000 1,431,250
ENSCO International, Inc.............. 15,000 487,500
Flores & Rucks, Inc.(a)............... 25,000 862,500
Global Marine, Inc.(a)................ 75,000 1,040,625
Marine Drilling Company, Inc.(a)...... 40,000 405,000
Noble Drilling Corporation(a)......... 30,000 416,250
Pogo Producing Company................ 45,000 1,715,625
Pride Petroleum Services, Inc.(a)..... 70,000 997,500
Reading & Bates Corporation(a)........ 27,500 608,438
Rowan Companies, Inc.(a).............. 100,000 1,475,000
Rutherford-Moran Oil Corporation(a)... 10,000 243,750
Sonat Offshore Drilling Company....... 50,000 2,525,000
PAPER & ALLIED PRODUCTS (0.14%)
Sealed Air Corporation(a)............. 16,000 538,000
PAPER & PAPER PRODUCTS (1.36%)
Boise Cascade Office Products
Corporation(a)(b)................... 40,000 1,385,000
Corporate Express, Inc.(a)(b)......... 60,000 2,400,000
US Office Products Company(a)(b)...... 35,000 1,470,000
PERSONAL CREDIT INSTITUTIONS (0.04%)
RAC Financial Group, Inc.(a).......... 5,000 141,250
PERSONAL SERVICES (0.32%)
Career Horizons, Inc.(a).............. 25,000 875,000
Regis Corporation..................... 12,000 375,000
PHARMACEUTICALS (2.68%)
Biochem Pharma, Inc.(a)............... 15,000 562,500
Dura Pharmaceuticals, Inc.(a)......... 50,000 2,800,000
Elan Corporation Plc - Sponsored
ADR(a)(b)........................... 15,000 856,875
Genetics Institute, Inc.(a)........... 20,000 1,270,000
Henry Schein, Inc.(a)................. 17,000 650,250
Jones Medical Industries, Inc. ....... 22,500 748,125
Liposome Company, Inc.(a)(b).......... 25,000 468,750
Millipore Corp........................ 35,000 1,465,625
NCS HealthCare, Inc. - Class A(a)..... 5,000 151,250
Parexel International
Corporation(a)...................... 15,000 723,750
Rexall Sundown, Inc.(a)............... 25,000 675,000
PRIMARY METAL INDUSTRIES (0.31%)
Mueller Industries, Inc.(a)........... 20,000 830,000
Titanium Metals Corporation(a)(b)..... 15,000 388,125
PRINTING & PUBLISHING (0.43%)
Meredith Corporation.................. 40,000 1,670,000
RADIO & TELEVISION BROADCASTING (1.88%)
Clear Channel Communications,
Inc.(a)............................. 40,000 3,295,000
Evergreen Media Corporation - Class
A(a)................................ 35,000 1,496,250
Infinity Broadcasting Corporation -
Class A(a).......................... 67,500 2,025,000
Jacor Communications, Inc.(a)......... 15,000 463,125
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
RAILROADS (0.17%)
Conrail, Inc.......................... 10,000 $ 663,750
RESEARCH & TESTING SERVICES (0.50%)
ClinTrials, Inc.(a)................... 6,500 269,750
Curative Technologies, Inc.(a)........ 20,000 525,000
Quintiles Transnational
Corporation(a)...................... 17,500 1,150,625
RESIDENTIAL BUILDING CONSTRUCTION (0.08%)
Beazer Homes USA, Inc.(a)............. 20,000 320,000
RESTAURANTS (0.77%)
Boston Chicken, Inc.(a)(b)............ 35,000 1,137,500
Dave & Buster's, Inc.(a).............. 10,000 266,607
Outback Steakhouse, Inc.(a)........... 25,000 862,107
Planet Hollywood International, Inc. -
Class A(a)(b)....................... 20,000 540,000
Rainforest Cafe, Inc.(a).............. 3,600 175,500
RETAIL TRADE (1.60%)
Borders Group, Inc.(a)................ 28,500 919,125
CompUSA, Inc.(a)...................... 30,000 1,023,750
Garden Ridge Corp(a).................. 15,000 757,500
National Media Corporation(a)......... 15,000 264,375
Petco Animal Supplies, Inc.(a)........ 35,000 1,006,250
Staples, Inc.(a)...................... 82,500 1,608,750
Viking Office Products, Inc.(a)....... 20,000 627,500
RUBBER & MISC. PLASTIC PRODUCTS (0.39%)
B.F. Goodrich Company................. 40,000 1,495,000
SAVINGS INSTITUTIONS (0.77%)
TCF Financial Corporation............. 45,000 1,496,250
Washington Mutual, Inc.(b)............ 50,000 1,493,750
SHOE STORES (0.34%)
Just For Feet, Inc.(a)(b)............. 25,000 1,321,875
TELECOMMUNICATIONS (2.63%)
ACC Corporation....................... 30,000 1,458,750
Boston Communications Group, Inc.(a).. 9,700 160,050
Cellular Communications, Inc. - Class
A(a)................................ 10,000 531,250
Cincinnati Bell, Inc.................. 40,000 2,085,000
Frontier Corporation.................. 50,000 1,531,250
LCI International, Inc.(a)............ 60,000 1,882,500
Lucent Technologies, Inc.............. 23,700 897,638
Newbridge Network Corporation(a)...... 25,000 1,637,500
TRANSPORTATION & PUBLIC UTILITIES (0.17%)
Fritz Companies, Inc.(a).............. 20,000 645,000
WATER TRANSPORTATION (0.45%)
Tidewater, Inc........................ 40,000 1,755,000
WHOLESALE TRADE DURABLE GOODS (1.20%)
HA-LO Industries, Inc.(a)............. 15,000 390,000
Omnicare, Inc.(b)..................... 120,000 3,180,000
Physician Sales & Services, Inc.(a)... 45,000 1,091,250
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
42
<PAGE> 45
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
WHOLESALE TRADE NONDURABLE GOODS (0.21%)
Richfood Holdings, Inc................ 25,000 $ 812,500
-----------
Total Common Stocks
(cost: $ 251,338,133)............................. 365,603,485
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATION (5.93%)
Student Loan Marketing
Association
5.45%, due 07/01/96............ $ 23,000,000 $ 22,993,036
-------------
Total Short-Term U.S. Government Obligation
(cost: $ 22,993,036)......................... 22,993,036
-------------
Total Investment Securities
(cost: $ 274,331,169)...................... $ 388,596,521
=============
SUMMARY
Investments at value............. 100.26 % $ 388,596,521
Other Liabilities in
Excess of Assets............... (0.26)% (1,020,302)
-------- -------------
Net Assets....................... 100.00 % $ 387,576,219
======== =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
(b) See footnote 1C to financial statements.
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
43
<PAGE> 46
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Business Services 3.38%
Communications Equipment 7.73%
Computer & Data Processing Service 16.61%
Computer & Office Equipment 3.73%
Health Services 5.03%
Hotels & Other Lodging Places 2.51%
Medical Instruments & Supplies 3.18%
Oil & Gas Extraction 4.64%
Pharmaceuticals 2.68%
Telecommunications 2.63%
Short-Term U. S. Government Obligations 5.93%
Other 41.95%
</TABLE>
For the first half of the year, despite rising interest rates, the stock market
continued to rally in response to good earnings. For the six months ended June
30, 1996, the Emerging Growth Portfolio, with a 18.09% gain, beat all major
comparable indexes including the NASDAQ Composite, the S&P Midcap Index, and the
Russell 2000 which gained 12.6%, 9.2%, and 10.4% respectively for the period.
Energy and consumer-oriented sectors have been the best performers while the
cyclicals, interest sensitive, and health care groups have been the laggers. The
best performing stocks have come from many different sectors, which signify a
"stock pickers" market, rather than a sector betting market. Investors seem to
be looking for stocks of companies that can maintain solid growth even as the
economy slows. The Emerging Growth Portfolio, with its emphasis on small- and
mid-capitalization growth stocks, is ideally positioned with investments in
those types of companies.
The investment style being employed in the Emerging Growth Portfolio is a
bottom-up approach, which focuses on stock selection rather than "market timing"
or "sector rotation". Risk is controlled by maintaining a broadly diversified
portfolio, thereby avoiding big bets on any one sector or stock. Usually the
Portfolio remains fully invested. The objective is to outperform the market by
picking the best stocks in each sector. This investment style is designed to
deliver consistent results.
Stocks are selected based on the company's potential to deliver upside earnings
surprises. To find such companies, we look for rising earnings estimates and
improving valuations. Investments are made in the highest growth companies in
each sector that meet the buy criteria. In general, these will be smaller
companies with revenues less than $2 billion.
Our biggest gainers during the period were: Chesapeake Energy Corporation (oil
and gas extraction), Cascade Communications Corp. (communications equipment),
USA Detergents, Inc., (chemicals and allied products), Minimed, Inc., (medical
instruments and supplies), and Sitel Corporation (business services).
We continue to remain optimistic about the long-term prospects for smaller
capitalization growth stocks. The odds for a short correction phase have
increased, however, since these stocks have done so well over the last two years
without any meaningful pause. We view any pullback as a buying opportunity.
Small stocks in general are still selling at reasonable valuation levels when
compared to larger stocks, and would benefit strongly from any cut in the
capital gains tax rate.
<TABLE>
<S> <C>
/s/ Gary M. Lewis
---------------------------------
Gary M. Lewis
[VAN KAMPEN AMERICAN CAPITAL LOGO] Emerging Growth Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
44
<PAGE> 47
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 251,338,133)....................... $ 365,603,485
Short-term securities, at amortized cost....... 22,993,036
Cash........................................... 13,050
Cash collateral................................ 36,631,584
Receivables:
Fund shares sold............................. 0
Securities sold.............................. 3,053,351
Interest..................................... 5,341
Dividends.................................... 85,899
Foreign receivable........................... 1,635
Other........................................ 318,909
-------------
Total assets............................... 428,706,290
-------------
LIABILITIES:
Fund shares purchased.......................... 0
Securities purchased........................... 3,970,579
Accounts payable and accrued liabilities:
Investment advisory fees..................... 236,124
Custody fees................................. 0
Auditing and accounting fees................. 0
Dividends to shareholders.................... 0
Deposits for securities on loan.............. 36,631,584
Other fees................................... 291,784
-------------
Total liabilities.......................... 41,130,071
-------------
Total net assets......................... $ 387,576,219
==============
NET ASSETS:
Capital stock
($ .01 par value 100,000,000 authorized)..... $ 202,049
Additional paid-in capital..................... 264,213,899
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss).............................. (214,045)
Accumulated undistributed net realized
gain (loss) on:
Investment transactions.................... 9,109,269
Foreign currency transactions.............. (305)
-------------
Total net realized gain (loss)........... 8,358,963
-------------
Net unrealized appreciation (depreciation) on:
Investment securities........................ 114,265,352
-------------
Net assets applicable to outstanding
shares of capital............................ $ 387,576,219
==============
Shares outstanding at June 30, 1996............ 20,204,855
==============
Net asset value per share...................... $ 19.18
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest................................... $ 542,989
Dividends (net of foreign tax of
$ 2,744)................................. 613,330
----------------
Total investment income.............. 1,156,319
----------------
EXPENSES:
Investment advisory fees................... 1,302,011
Printing and shareholder reports........... 31,876
Custody fees............................... 45,072
Legal fees................................. 1,573
Auditing and accounting fees............... 3,534
Directors fees............................. 1,273
Registration fees.......................... 498
Other fees................................. 1,668
----------------
Total expenses....................... 1,387,505
Less:
Advisory fee waiver and expense
reimbursement.......................... 0
Fees paid indirectly..................... 264
----------------
Net expenses......................... 1,387,241
----------------
Net investment income (loss)............... (230,922)
----------------
Net realized gain (loss) on:
Investment securities.................. 8,359,268
Foreign currency transactions.......... (305)
----------------
Total net realized gain (loss)....... 8,358,963
----------------
Change in unrealized appreciation
(depreciation) on:
Investment securities.................. 45,894,443
----------------
Net gain (loss) on investments......... 54,253,406
----------------
Net increase (decrease) in net assets
resulting from operations.............. $ 54,022,484
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
45
<PAGE> 48
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ (230,922) $ 64,318
Net realized gain (loss) on investments and foreign currency transactions............... 8,358,963 35,450,575
Change in unrealized appreciation (depreciation) on investments......................... 45,894,443 52,134,219
------------- -------------
Net increase (decrease) in net assets resulting from operations....................... 54,022,484 87,649,112
------------- -------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... 0 (49,487)
Net realized gains...................................................................... 0 (11,919,087)
------------- -------------
Total distributions................................................................... 0 (11,968,574)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 63,149,643 49,653,525
Dividends and distributions reinvested.................................................. 0 11,968,574
Cost of shares repurchased.............................................................. (18,115,143) (31,433,111)
------------- -------------
Increase (decrease) in net assets from capital shares transactions.................... 45,034,500 30,188,988
------------- -------------
Net increase (decrease) in net assets................................................. 99,056,984 105,869,526
NET ASSETS:
Beginning of period..................................................................... 288,519,235 182,649,709
------------- -------------
End of period........................................................................... $ 387,576,219 $ 288,519,235
============= =============
Undistributed net investment income (loss)............................................ $ (214,045) $ 16,877
============= =============
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 17,758,249 15,817,298
------------- -------------
Shares issued........................................................................... 3,498,472 3,437,728
Shares issued - reinvestment of dividends and distributions............................. 0 739,247
Shares redeemed......................................................................... (1,051,866) (2,236,024)
------------- -------------
Increase (decrease) in shares outstanding............................................... 2,446,606 1,940,951
------------- -------------
Shares outstanding - end of period...................................................... 20,204,855 17,758,249
============= =============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
46
<PAGE> 49
WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
EMERGING GROWTH PORTFOLIO
AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard & Poor's Index of 500 Common
Stocks (S&P) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index
<S> <C> <C>
Inception 3/1/93 $10,000 $10,000
FYE 12/93 $12,471 $10,770
FYE 12/94 $11,553 $10,912
FYE 12/95 $16,960 $14,996
Six Months Ended 6/30/96 $20,028 $16,510
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- -------------------------------------
1996 1995 1994 1993+
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............. $ 16.25 $ 11.55 $ 12.47 $ 10.00
Income from operations:
Net investment income (loss)................. .00 .01 .01 (.04)
Net realized and unrealized
gain (loss) on investments................. 2.93 5.42 (.92) 2.51
--------- --------- --------- ---------
Total income (loss) from operations........ 2.93 5.43 (.91) 2.47
--------- --------- --------- ---------
Distributions:
Dividends from net investment income......... .00 .00 (.01) .00
Distributions from net realized gains
on investments............................. .00 (.73) .00 .00
--------- --------- --------- ---------
Total distributions........................ .00 (.73) (.01) .00
--------- --------- --------- ---------
Net asset value, end of period................... $ 19.18 $ 16.25 $ 11.55 $ 12.47
========== ========== ========== ==========
Total return..................................... 18.09% 46.79% (7.36)% 24.71%
Ratios and supplemental data:
Net assets at end of period
(in thousands)............................... $ 387,576 $ 288,519 $ 182,650 $ 102,472
Ratio of expenses to average net assets.......... .83% .91% .92% 1.00%
Ratio of net investment income (loss)
to average net assets.......................... (.14)% .03% .06% (.30)%
Ratio of commission paid to number of shares..... 5.77% n/a n/a n/a
Portfolio turnover rate.......................... 40.39% 124.13% 72.62% 12.79%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was March 1, 1993. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
47
<PAGE> 50
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (97.41%)
AEROSPACE (4.65%)
Boeing Company.................... 30,000 $ 2,613,750
McDonnell Douglas Corporation..... 84,400 4,093,400
Sundstrand Corporation............ 57,000 2,087,625
AGRICULTURE (0.51%)
Delta & Pine Land Company......... 23,000 971,750
AIR TRANSPORTATION (0.53%)
Delta Air Lines, Inc.............. 12,000 996,000
APPAREL PRODUCTS (3.14%)
Gucci Group nv-NY registered
share(a)........................ 54,000 3,483,000
Tommy Hilfiger Corporation(a)..... 45,800 2,456,025
APPAREL & ACCESSORY STORES (2.74%)
GAP, Inc.......................... 132,000 4,240,500
The Gymboree Corporation(a)....... 31,000 945,500
APPAREL, PIECE GOODS & NOTIONS (0.54%)
Nike, Inc. - Class B.............. 10,000 1,027,500
AUTOMOTIVE (0.94%)
Chrysler Corporation.............. 28,800 1,785,600
BUSINESS SERVICES (1.05%)
CUC International, Inc.(a)........ 56,000 1,988,000
CHEMICALS & ALLIED PRODUCTS (1.47%)
Colgate-Palmolive Company......... 21,000 1,779,750
Monsanto Company.................. 30,500 991,250
COMMERCIAL BANKS (3.26%)
Chase Manhattan Corporation....... 62,000 4,378,750
MBNA Corporation.................. 62,250 1,774,125
COMMUNICATIONS EQUIPMENT (6.13%)
Ascend Communications, Inc.(a). ... 51,400 2,891,250
Cable Design Technologies(a)...... 20,000 655,000
Cascade Communications
Corp.(a)(b)..................... 20,000 1,360,000
Glenayre Technologies, Inc.(a).... 82,775 4,138,750
Tellabs, Inc.(a).................. 38,000 2,541,250
COMPUTER & DATA PROCESSING SERVICE (14.14%)
3Com Corporation(a)............... 94,700 4,332,525
Adaptec, Inc.(a).................. 35,000 1,658,125
Altera Corporation(a)............. 47,600 1,808,800
Business Objects S.A. - Sponsored
ADR(a).......................... 23,200 933,800
Cisco Systems, Inc.(a)(b)......... 80,400 4,552,650
Compuware Corporation(a).......... 63,800 2,520,100
First Data Corporation............ 69,706 5,550,340
Informix Corporation(a)........... 183,400 4,126,500
Softkey International, Inc.(a)(b). 64,900 1,229,044
COMPUTER & OFFICE EQUIPMENT (2.01%)
Citrix Systems, Inc.(a)........... 26,000 988,000
Electronics For Imaging,
Inc.(a)......................... 25,600 1,776,000
Xerox Corp........................ 19,500 1,043,250
DEPARTMENT STORES (0.54%)
TJX Companies, Inc................ 30,000 1,012,500
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC COMPONENTS & ACCESSORIES (5.75%)
Intel Corporation................. 25,000 $ 1,835,938
Linear Technology Corporation..... 61,800 1,854,000
Maxim Integrated Products,
Inc.(a)......................... 85,000 2,321,563
Microchip Technology, Inc.(a)..... 41,600 1,029,600
Xilinx, Inc.(a)................... 120,500 3,825,875
ENGINEERING & MANAGEMENT SERVICES (0.56%)
Halliburton Company............... 18,900 1,048,950
ENVIRONMENTAL SERVICES (2.33%)
United Waste Systems, Inc.(a)..... 34,000 1,096,500
U.S.A. Waste Services, Inc.(a).... 111,900 3,315,037
FINANCE (1.72%)
Green Tree Financial Corporation.. 29,600 925,000
The Money Store, Inc.............. 105,000 2,323,125
HEALTH SERVICES (3.07%)
American Oncology
Resources(a).................... 13,000 282,750
Columbia/HCA Healthcare
Corporation..................... 60,000 3,202,500
Heartport, Inc.(a)................ 24,600 744,150
IDEXX Laboratories, Inc.(a)....... 40,000 1,570,000
INDUSTRIAL MACHINERY & EQUIPMENT (0.81%)
Case Corporation.................. 32,000 1,536,000
INSTRUMENTS & RELATED PRODUCTS (0.21%)
Thermo Electron Corporation(a).... 9,675 402,722
INSURANCE (3.77%)
American International
Group, Inc...................... 30,900 3,047,513
Oxford Health Plans, Inc.(a)...... 53,700 2,208,413
United Healthcare Corporation..... 37,000 1,868,500
LEATHER & LEATHER PRODUCTS (0.54%)
Nine West Group, Inc.(a).......... 20,000 1,022,500
LIFE INSURANCE (3.01%)
Loewen Group, Inc................. 78,300 2,368,575
Travelers Group, Inc.............. 72,900 3,326,062
MANUFACTURING INDUSTRIES (0.48%)
Oakley, Inc.(a)(b)................ 20,000 910,000
MEDICAL INSTRUMENTS & SUPPLIES (3.80%)
Boston Scientific
Corporation(a).................. 24,500 1,102,500
Guidant Corporation............... 19,100 940,675
Medtronic, Inc.................... 37,000 2,072,000
Steris Corporation(a)............. 27,000 864,000
Target Therapeutics, Inc.(a)...... 20,000 820,000
VISX, Inc.(a)..................... 40,500 1,382,062
OIL & GAS EXTRACTION (0.51%)
Schlumberger, Ltd................. 11,500 968,875
PERSONAL CREDIT INSTITUTIONS (0.48%)
Advanta Corporation - Class B..... 20,000 905,000
PERSONAL SERVICES (3.52%)
Cintas Corporation................ 29,000 1,551,500
Service Corporation
International................... 88,700 5,100,250
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
48
<PAGE> 51
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS (8.63%)
Amgen, Inc.(a).................... 27,700 $ 1,495,800
Astra AB - Sponsored ADR(b)....... 44,000 1,925,000
Biochem Pharma, Inc.(a)........... 83,500 3,131,250
Centocor, Inc.(a)................. 35,000 1,045,625
Eli Lilly & Company............... 43,600 2,834,000
Liposome Company, Inc.(a)(b)...... 34,500 646,875
Merck & Company, Inc. ............ 31,500 2,035,687
Pfizer, Inc. ..................... 25,400 1,812,925
SmithKline Beecham Plc - ADR...... 25,000 1,359,375
PRIMARY METAL INDUSTRIES (1.13%)
Aluminum Company of America....... 19,200 1,101,600
Titanium Metals
Corporation(a)(b)............... 40,000 1,035,000
RADIO & TELEVISION BROADCASTING (0.59%)
Evergreen Media Corporation -
Class A(a)...................... 26,100 1,115,775
RESIDENTIAL BUILDING CONSTRUCTION (1.24%)
Clayton Homes, Inc................ 116,750 2,335,000
RESTAURANTS (4.23%)
Boston Chicken, Inc.(a)(b)........ 70,000 2,275,000
Lone Star Steakhouse & Saloon(a).. 126,100 4,760,275
Outback Steakhouse, Inc.(a)....... 27,900 962,112
RETAIL TRADE (3.35%)
OfficeMax, Inc.(a)................ 199,750 4,769,031
Viking Office Products, Inc.(a)... 50,000 1,568,750
SECURITY & COMMODITY BROKERS (0.98%)
Charles Schwab Corporation........ 75,500 1,849,750
TELECOMMUNICATIONS (4.02%)
MFS Communications Company,
Inc.(a)(b)...................... 34,000 1,279,250
Telecomunicacoes Brasileiras SA -
Sponsored ADR................... 15,500 1,079,187
WorldCom, Inc.(a)................. 94,600 5,238,475
WATER TRANSPORTATION (0.55%)
Tidewater, Inc.................... 23,700 1,039,838
WHOLESALE TRADE DURABLE GOODS (0.48%)
Johnson & Johnson................. 18,292 905,454
-------------
Total Common Stocks
(cost: $ 159,147,655)........................ 184,103,578
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
SHORT-TERM OBLIGATION (3.29%)
Prudential-Bache Securities(c)
4.77%, Repurchase Agreement dated
06/28/96 to be repurchased at
$ 6,225,957 on 07/01/96.......... $ 6,223,483 $ 6,223,483
-------------
Total Short-Term Obligation
(cost: $ 6,223,483)........................... 6,223,483
-------------
Total Investment Securities
(cost: $ 165,371,138)....................... $ 190,327,061
=============
SUMMARY
Investments at value............... 100.70 % $ 190,327,061
Other Liabilities in
Excess of Assets................. (0.70)% (1,328,654)
-------- -------------
Net Assets......................... 100.00 % $ 188,998,407
======== =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve
months.
(b) See footnote 1C to financial statements.
(c) Collateralized by $ 3,220,035 Federal National Mortgage
Association 7.15% due 04/01/24; $ 6,021,335 Federal National Mortgage
Association 7.44% due 12/01/22; $ 6,183,852 First Merchants Acceptance
Corporation 6.23% due 02/01/20; market value and accrued interest
aggregated $ 2,348,867, $ 2,068,848, and $ 1,930,250 respectively for the
collateral at June 30, 1996.
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
49
<PAGE> 52
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Aerospace 4.65%
Communications Equipment 6.13%
Computer & Data Processing Service 14.14%
Electric Components & Accessories 5.75%
Insurance 3.77%
Medical Instruments & Supplies 3.80%
Personal Services 3.52%
Pharmaceuticals 8.63%
Restaurants 4.23%
Telecommunications 4.02%
Short-Term Obligation 3.29%
Other 38.07%
</TABLE>
The first six months of the year have been extremely challenging and volatile.
On more than one occasion, we have experienced the financial markets' equivalent
of wind-shear. But despite the volatility, half way through the year most of the
major stock market indexes are significantly higher, the NASDAQ Composite
leading the way with a 12.6% gain. Amongst broad market measures, the Standard &
Poor's Index of 500 Common Stocks has increased by 10.10% and the Dow Jones
Industrial Average has picked up 11.70%. For the six-month period ended June 30,
1996, the Aggressive Growth Portfolio gained 5.74%.
Market conditions so far this year have been the result of a dramatic change in
perception about the nature of the economy and a variety of unrelated, but
perplexing economic events. As 1996 began, the conventional wisdom in the market
was that the economy was extremely weak, and consequently would require a series
of Federal Reserve (Fed) actions to lower short-term rates in order to avoid a
possible recession.
To a certain degree this forecast proved accurate. Certain parts of the economy,
specifically semiconductors and other technology products, did pre-announce
disappointing results for the first quarter, continuing a trend which began with
a surge in large-cap stocks and a lag in the smaller companies, presumably
because the larger companies represented a safe haven against weak economic
conditions.
Throughout the period, key events occurred that radically altered the investment
landscape. First, two key commodities -- grains and petroleum products --
experienced accelerating price increases due in large part to the weather.
Secondly, on March 10 the Labor Department announced that the economy created
705,000 new jobs in February, a dramatic and unexpected surge in new job
formation. These changes threw the bond market into a panic and temporarily
altered the outlook of the stock market. The view about economic events began to
shift at this point and people began to consider that the economy was stronger
than they originally thought, inflation was becoming a problem, and the Fed
would no longer lower rates.
Through all of this, we have been unwilling to accept the view so prevalent in
January and February, that the economy was heading toward a recession. Nor are
we willing to accept the currently prevailing view that the economy is extremely
robust and will lead to exaggerated inflation followed by increases in
short-term interest rates sometime this summer. We do not see any data which
would lead to concerns of a higher level of inflation. If anything, there has
been a drop in commodity prices recently, and other industrial measures do not
show much stress in the economy.
It's important to note that when the bond market was at its worst, the stock
market remained relatively undervalued. At the same time, the stock market has
remained undervalued relative to short-term interest rates. In all likelihood,
this is why the stock market has remained relatively strong and did not respond
to the rapid rise in rates.
In conclusion, although the economy looks confusing, we see no reason to be less
than optimistic about the financial markets. We believe that the market is going
to remain challenging for the rest of the year, oscillating between fear of
recession and fear of inflation, with periods of intense sector rotations.
Against this background, we expect that fundamental analysis will win out.
<TABLE>
<S> <C>
[FRED ALGER MANAGEMENT, INC. LOGO] /s/ David D. Alger
---------------------------------
David D. Alger
President, Fred Alger Management,
Inc.
</TABLE>
- --------------------------------------------------------------------------------
50
<PAGE> 53
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 159,147,655)........................... $ 184,103,578
Short-term securities, at amortized cost......... 6,223,483
Cash............................................. 0
Cash collateral.................................. 11,612,795
Receivables:
Fund shares sold............................... 0
Securities sold................................ 1,058,016
Interest....................................... 2,593
Dividends...................................... 79,688
Other.......................................... 100,761
-------------
Total assets................................. 203,180,914
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 2,361,414
Accounts payable and accrued liabilities:
Investment advisory fees....................... 117,312
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 11,612,795
Other fees..................................... 90,986
-------------
Total liabilities............................ 14,182,507
-------------
Total net assets........................... $ 188,998,407
=============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)........ $ 134,886
Additional paid-in capital....................... 158,392,401
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ (95,466)
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 5,610,663
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 24,955,923
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 188,998,407
=============
Shares outstanding at June 30, 1996.............. 13,488,632
=============
Net asset value per share........................ $ 14.01
=============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 258,608
Dividends (net of foreign tax of $ 4,965).... 387,242
----------------
Total investment income................ 645,850
----------------
EXPENSES:
Investment advisory fees..................... 695,046
Printing and shareholder reports............. 22,475
Custody fees................................. 17,579
Legal fees................................... 1,085
Auditing and accounting fees................. 2,524
Directors fees............................... 893
Registration fees............................ 351
Other fees................................... 1,364
----------------
Total expenses......................... 741,317
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 1
----------------
Net expenses........................... 741,316
----------------
Net investment income (loss)................. (95,466)
----------------
Net realized gain (loss) on:
Investment securities.................... 6,043,988
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 3,055,950
----------------
Net gain (loss) on investments........... 9,099,938
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 9,004,472
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
51
<PAGE> 54
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)........................................................... $ (95,466) $ (515,168)
Net realized gain (loss) on investments................................................ 6,043,988 4,512,355
Change in unrealized appreciation (depreciation) on investments........................ 3,055,950 20,073,057
------------- ------------
Net increase (decrease) in net assets resulting from operations...................... 9,004,472 24,070,244
------------- ------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.................................................................. 0 0
In excess of net investment income..................................................... 0 (501)
Net realized gains..................................................................... 0 (4,186,091)
------------- ------------
Total distributions.................................................................. 0 (4,186,592)
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares...................................................... 50,996,387 133,357,432
Dividends and distributions reinvested................................................. 0 4,186,592
Cost of shares repurchased............................................................. (29,536,506) (37,719,938)
------------- ------------
Increase (decrease) in net assets from capital shares transactions................... 21,459,881 99,824,086
------------- ------------
Net increase (decrease) in net assets................................................ 30,464,353 119,707,738
NET ASSETS:
Beginning of period.................................................................... 158,534,054 38,826,316
------------- ------------
End of period.......................................................................... $ 188,998,407 $158,534,054
============= ============
Undistributed net investment income (loss)........................................... $ (95,466) $ 0
============= ============
SHARE ACTIVITY:
Shares outstanding - beginning of period............................................... 11,964,511 3,937,879
------------- ------------
Shares issued.......................................................................... 3,718,082 10,492,134
Shares issued - reinvestment of dividends and distributions............................ 0 315,955
Shares redeemed........................................................................ (2,193,961) (2,781,457)
------------- ------------
Increase (decrease) in shares outstanding.............................................. 1,524,121 8,026,632
------------- ------------
Shares outstanding - end of period..................................................... 13,488,632 11,964,511
============= ============
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
52
<PAGE> 55
WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
AGGRESSIVE GROWTH PORTFOLIO,
THE VALUE LINE (ARITHMETIC) INDEX AND THE STANDARD & POOR'S INDEX OF 500 COMMON
STOCKS
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Value Line (Arithmetic) Index (VL) and the
Standard's and Poor's Index of 500 Common Stocks (S&P) over the same time
frame.
<TABLE>
<CAPTION>
Portfolio VL Index S&P Index
<S> <C> <C> <C>
Inception 3/1/94 $10,000 $10,000 $10,000
Period Ended 12/31/94 $ 9,874 $ 9,685 $10,072
FYE 12/31/95 $13,628 $12,197 $13,854
Six Months Ended 6/30/96 $14,410 $13,431 $15,253
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- ------------------------
1996 1995 1994+
--------- --------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period................... $ 13.25 $ 9.86 $ 10.00
Income from operations:
Net investment income (loss)....................... (.01) (.06) .02
Net realized and unrealized
gain (loss) on investments....................... .77 3.96 (.14)
--------- --------- ------------
Total income (loss) from operations.............. .76 3.90 (.12)
--------- --------- ------------
Distributions:
Dividends from net investment income............... .00 .00 (.02)
Distributions from net realized gains
on investments................................... .00 (.51) .00
--------- --------- ------------
Total distributions.............................. .00 (.51) (.02)
--------- --------- ------------
Net asset value, end of period......................... $ 14.01 $ 13.25 $ 9.86
========== ========== ==============
Total return........................................... 5.74% 38.02% (1.26)%
Ratios and supplemental data:
Net assets at end of period
(in thousands)..................................... $ 188,998 $ 158,534 $ 38,826
Ratio of expenses to average net assets.............. .84% 1.07% 1.00%
Ratio of net investment income (loss)
to average net assets.............................. (.11)% (.48)% .20%
Ratio of commission paid to number of shares......... 7.20% n/a n/a
Portfolio turnover rate.............................. 49.72% 108.04% 89.73%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was March 1, 1994. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
53
<PAGE> 56
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (34.09%)
U.S. Treasury Bonds
6.38%, due 08/15/02.............. $ 2,000,000 $ 1,983,080
U.S. Treasury Bonds
7.25%, due 08/15/04.............. 1,000,000 1,035,820
U.S. Treasury Bonds(b)
6.50%, due 05/15/05.............. 2,000,000 1,973,380
U.S. Treasury Bonds
7.25%, due 11/15/96.............. 1,000,000 1,006,630
U.S. Treasury Notes
6.00%, due 11/30/97.............. 1,500,000 1,500,885
U.S. Treasury Notes
6.13%, due 03/31/98.............. 1,000,000 1,001,110
U.S. Treasury Notes
5.88%, due 08/15/98.............. 1,500,000 1,491,780
U.S. Treasury Notes
7.00%, due 04/15/99.............. 1,000,000 1,018,020
U.S. Treasury Notes
7.13%, due 09/30/99.............. 1,000,000 1,021,970
U.S. Treasury Notes
6.00%, due 10/15/99.............. 1,500,000 1,485,315
------------
Total U.S. Government Obligations
(cost: $ 13,604,799)........................... 13,517,990
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (57.84%)
AUTOMOTIVE (1.72%)
Chrysler Corporation............. 11,000 $ 682,000
ELECTRIC SERVICES (4.54%)
Duke Power Company............... 12,000 615,000
NIPSCO Industries, Inc.(b)....... 15,000 603,750
Teco Energy, Inc................. 23,000 580,750
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.96%)
General Electric Company......... 9,000 778,500
FABRICATED METAL PRODUCTS (1.83%)
Masco Corporation................ 24,000 726,000
FINANCE (3.91%)
Federal National Mortgage
Association.................... 17,000 569,500
Mego Financial Corporation(a).... 40,000 315,000
Student Loan Marketing
Association.................... 9,000 666,000
GAS PRODUCTION & DISTRIBUTION (1.70%)
Sonat, Inc. ..................... 15,000 675,000
HEALTH SERVICES (1.41%)
Columbia/HCA Healthcare
Corporation.................... 10,500 560,437
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
HOLDING & OTHER INVESTMENT OFFICES (9.23%)
Commercial Net Lease Realty...... 10,000 $ 138,750
Equity Residential Properties
Trust.......................... 17,000 558,875
Health and Retirement Property
Trust.......................... 31,000 534,750
Liberty Property Trust........... 24,000 477,000
Merry Land & Investment Company,
Inc............................ 23,000 483,000
Prime Retail..................... 40,000 455,000
Shurgard Storage Centers, Inc. -
Class A........................ 19,000 479,750
Storage USA, Inc. ............... 16,500 532,125
INSURANCE (3.13%)
Allstate Corporation............. 13,000 593,125
Foundation Health
Corporation(a)(b).............. 18,000 645,750
INSURANCE AGENTS, BROKERS & SERVICE (1.26%)
Humana, Inc.(a).................. 28,000 500,500
LIFE INSURANCE (2.78%)
Equitable of Iowa Companies...... 14,000 497,000
Western National Corporation..... 33,000 606,375
MANAGEMENT SERVICES (1.74%)
Dun & Bradstreet Corporation..... 11,000 687,500
OIL & GAS EXTRACTION (3.30%)
Dresser Industries, Inc. ........ 25,000 737,500
Enron Corporation................ 14,000 572,250
PAPER & ALLIED PRODUCTS (1.95%)
Kimberly-Clark Corporation....... 10,000 772,500
SAVINGS INSTITUTIONS (11.04%)
BankUnited Financial
Corporation - Class A(a)....... 35,000 253,750
Dime Bancorp, Inc.(a)............ 70,000 910,000
Imperial Thrift & Loan
Association(a)................. 50,000 737,500
Pacific Crest Capital, Inc.(a)... 110,000 990,000
Poughkeepsie Savings Bank, FSB... 100,000 500,000
Security First Network Bank(a)... 10,000 330,000
Washington Mutual, Inc.(b)....... 22,000 657,250
TELECOMMUNICATIONS (4.67%)
AT&T Corporation................. 11,000 682,000
Frontier Corporation............. 18,500 566,563
GTE Corporation.................. 13,500 604,125
TEXTILE MILL PRODUCTS (1.67%)
Fruit of the Loom, Inc.(a)....... 26,000 663,000
------------
Total Common Stocks
(cost: $ 20,484,541)......................... 22,937,875
------------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
54
<PAGE> 57
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
OTHER INVESTMENT SECURITIES (2.31%)
FINANCE (2.31%)
Templeton Russia Fund, Inc.(b)... 35,000 $ 914,375
------------
Total Other Investment Securities
(cost: $ 508,910)............................ 914,375
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ----------
<S> <C> <C>
SHORT-TERM OBLIGATION (7.87%)
Prudential-Bache Securities(c)
4.77%, Repurchase Agreement
dated 06/28/96 to be
repurchased at $ 3,120,215 on
07/01/96....................... $ 3,118,975 $ 3,118,975
------------
Total Short-Term Obligation
(cost: $ 3,118,975).......................... 3,118,975
------------
Total Investment Securities
(cost: $ 37,717,225)....................... $ 40,489,215
============
SUMMARY
Investments at value............. 102.11 % $ 40,489,215
Other Liabilities in
Excess of Assets............... (2.11)% (834,894)
-------- ------------
Net Assets....................... 100.00 % $ 39,654,321
======== ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
(b) See footnote 1C to financial statements
(c) Collateralized by $ 3,465,571 Federal National Mortgage Association
6.23% due 05/01/23: market value and accrued interest aggregated
$ 3,181,361 for this collateral at June 30, 1996.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
55
<PAGE> 58
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 34.09%
Electric Services 4.54%
Finance 3.91%
Holding & Other Investment Offices 9.23%
Insurance 3.13%
Life Insurance 2.78%
Oil & Gas Extraction 3.30%
Saving Institutions 11.04%
Telecommunications 4.67%
Short-Term Obligation 7.87%
Other 15.44%
</TABLE>
For the six-month period ended June 30, 1996, the Balanced Portfolio returned
3.35%. During the same period, the Standard & Poor's Index of 500 Common Stocks
gained 10.10% and the Lehman Brothers Government/Corporate Intermediate Bond
Index declined by (.21%).
As the year opened, the Portfolio's fixed-income exposure was increased to
approximately one third of assets; by the end of June it stood at 34%, with the
average maturity of the bond holdings at 4.2 years. This sector has trailed the
equity market and our efforts to assume a more cautionary stance have proven to
be, at this point, premature. The interest-bearing cash reserves now stand at
nearly 6% of the portfolio, with equity exposure at 60%, which is in line with
our long-term asset allocation benchmark. The Portfolio also carries an
additional defensive element -- current yield. The current yield of our current
holdings is 4.2%. By comparison, the current yield of the S&P 500 is around
2.0%.
During the second quarter, total return of the Portfolio was 3.04%, reflecting
renewed strength in financial stocks and other interest-rate sensitive equity
holdings. Individual holdings encompass the financial and utility sector, along
with consumer cyclical and non-cyclicals, and REITs. While these holdings
contain a number of stocks that will provide performance in an expanding equity
market, these equities are characterized as defensive.
We believe that the Balanced Portfolio is well positioned in light of our
expectation that the economy will slow from the second quarter growth rate of
approximately 3.5% to 4.0% back into the 2.0% to 2.25% range. This growth rate
will set up conditions which will, in our opinion, provide renewed strength in
the bond market and more attractive relative performance of the defensive equity
positions.
[AEGON LOGO]
/s/ Michael Van Meter
--------------------------
Michael Van Meter
Balanced Portfolio Manager
- --------------------------------------------------------------------------------
56
<PAGE> 59
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 34,598,250)............................ $ 37,370,240
Short-term securities, at amortized cost......... 3,118,975
Cash............................................. 0
Cash collateral.................................. 4,071,916
Receivables:
Fund shares sold............................... 0
Securities sold................................ 99,022
Interest....................................... 203,342
Dividends...................................... 59,696
Foreign receivable............................. 1,184
Other.......................................... 21,882
-------------
Total assets................................. 44,946,257
-------------
LIABILITIES:
Fund shares purchased............................ 0
Securities purchased............................. 1,175,000
Accounts payable and accrued liabilities:
Investment advisory fees....................... 23,464
Custody fees................................... 0
Auditing and accounting fees................... 0
Dividends to shareholders...................... 0
Deposits for securities on loan................ 4,071,916
Other fees..................................... 21,556
-------------
Total liabilities............................ 5,291,936
-------------
Total net assets........................... $ 39,654,321
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)........ $ 36,297
Additional paid-in capital....................... 36,176,171
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................ 305,864
Accumulated undistributed net realized
gain (loss) on:
Investment transactions...................... 363,999
Net unrealized appreciation (depreciation) on:
Investment securities.......................... 2,771,990
-------------
Net assets applicable to outstanding
shares of capital.............................. $ 39,654,321
==============
Shares outstanding at June 30, 1996.............. 3,629,650
==============
Net asset value per share........................ $ 10.93
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest................................... $ 424,048
Dividends.................................. 284,767
-----------------
Total investment income.............. 708,815
-----------------
EXPENSES:
Investment advisory fees................... 140,808
Printing and shareholder reports........... 3,732
Custody fees............................... 7,301
Legal fees................................. 187
Auditing and accounting fees............... 2,524
Directors fees............................. 152
Registration fees.......................... 59
Other fees................................. 79
-----------------
Total expenses....................... 154,842
Less:
Advisory fee waiver and expense
reimbursement.......................... 0
Fees paid indirectly..................... 4
-----------------
Net expenses......................... 154,838
-----------------
Net investment income (loss)............... 553,977
-----------------
Net realized gain (loss) on:
Investment securities.................. 1,090,546
-----------------
Total net realized gain (loss)....... 1,090,546
-----------------
Change in unrealized appreciation
(depreciation) on:
Investment securities.................. (381,464)
-----------------
Total change in unrealized
appreciation (depreciation)........ (381,464)
-----------------
Net gain (loss) on investments......... 709,082
-----------------
Net increase (decrease) in net assets
resulting from operations.............. $ 1,263,059
===================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
57
<PAGE> 60
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss)......................................................... $ 553,977 $ 1,075,870
Net realized gain (loss) on investments and foreign currency transactions............ 1,090,546 (304,469)
Change in unrealized appreciation (depreciation) on investments and foreign currency
transactions....................................................................... (381,464) 3,757,818
----------------- ------------------
Net increase (decrease) in net assets resulting from operations.................... 1,263,059 4,529,219
----------------- ------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................ (250,000) (1,074,367)
Net realized gains................................................................... 0 0
----------------- ------------------
Total distributions................................................................ (250,000) (1,074,367)
----------------- ------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.................................................... 10,369,459 12,933,665
Dividends and distributions reinvested............................................... 250,000 1,074,367
Cost of shares repurchased........................................................... (3,092,642) (5,770,415)
----------------- ------------------
Increase (decrease) in net assets from capital shares transactions................. 7,526,817 8,237,617
----------------- ------------------
Net increase (decrease) in net assets.............................................. 8,539,876 11,692,469
NET ASSETS:
Beginning of period.................................................................. 31,114,445 19,421,976
----------------- ------------------
End of period........................................................................ $ 39,654,321 $ 31,114,445
=================== ====================
Undistributed net investment income................................................ $ 305,864 $ 1,887
=================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period............................................. 2,925,799 2,102,921
----------------- ------------------
Shares issued........................................................................ 970,986 1,309,039
Shares issued - reinvestment of dividends and distributions.......................... 23,039 105,008
Shares redeemed...................................................................... (290,174) (591,169)
----------------- ------------------
Increase (decrease) in shares outstanding............................................ 703,851 822,878
----------------- ------------------
Shares outstanding - end of period................................................... 3,629,650 2,925,799
=================== ====================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
58
<PAGE> 61
WRL SERIES FUND, INC.
BALANCED PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
BALANCED PORTFOLIO,
THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS AND LEHMAN BROTHERS
GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard's and Poor's Index of 500 Common
Stocks (S&P) and the Lehman Brothers Government/Corporate Intermediate Bond
Index (LB) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index LB Index
<S> <C> <C> <C>
Inception 3/1/94 $10,000 $10,000 $10,000
Period Ended 12/31/94 $ 9,427 $10,072 $ 9,840
FYE 12/31/95 $11,293 $13,854 $11,348
Six Months Ended 6/30/96 $11,672 $15,253 $11,325
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
-------- -----------------------
1996 1995 1994+
-------- -------- ------------
<S> <C> <C> <C>
Net asset value, beginning of period...... $ 10.63 $ 9.24 $ 10.00
Income from operations:
Net investment income (loss).......... .18 .44 .34
Net realized and unrealized
gain (loss) on investments.......... .19 1.38 (.76)
-------- -------- ------------
Total income (loss) from
operations........................ .37 1.82 (.42)
-------- -------- ------------
Distributions:
Dividends from net investment income.. (.07) (.43) (.34)
Distributions from net realized gains
on investments...................... .00 .00 .00
-------- -------- ------------
Total distributions................. (.07) (.43) (.34)
-------- -------- ------------
Net asset value, end of period............ $ 10.93 $ 10.63 $ 9.24
========= ========= =============
Total return.............................. 3.35% 19.80% (5.73)%
Ratios and supplemental data:
Net assets at end of period
(in thousands)........................ $ 39,654 $ 31,114 $ 19,422
Ratio of expenses to average net
assets................................ .87% .97% 1.00%
Ratio of net investment income (loss)
to average net assets................. 3.11% 4.38% 4.27%
Ratio of Commission paid to number of
shares................................ .21% n/a n/a
Portfolio turnover rate................. 47.40% 98.55% 57.73%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was March 1, 1994. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
59
<PAGE> 62
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- ---------
<S> <C> <C>
CONVERTIBLE BONDS (6.47%)
COMPUTER & DATA PROCESSING SERVICE (1.43%)
Altera Corporation(b)
5.75%, due 06/15/02................ $ 280,000 $ 279,300
3Com Corporation(b)
10.25%, due 11/01/01............... 110,000 169,675
COMPUTER & OFFICE EQUIPMENT (0.87%)
Solectron Corporation(b)
6.00%, due 03/01/06................ 300,000 273,750
DEPARTMENT STORES (1.03%)
Federated Department Stores, Inc.
5.00%, due 10/01/03................ 280,000 322,000
ELECTRONIC COMPONENTS & ACCESSORIES (0.44%)
Analog Devices, Inc.
3.50%, due 12/01/00................ 120,000 136,800
ENGINEERING & MANAGEMENT SERVICES (0.91%)
New World Infrastructure 144A(b)
5.00%, due 07/15/01................ 300,000 286,500
PHARMACEUTICALS (0.78%)
Alza Corporation
5.00%, due 05/01/06................ 250,000 243,438
SECURITY & COMMODITY BROKERS (1.01%)
Merrill Lynch Strypes
convertible to Cox Communications, Inc.
6.00%, due 06/01/99................ 6,900 152,663
Merrill Lynch Strypes
convertible to SunAmerica, Inc.
7.25%, due 06/15/99................ 2,900 164,213
-----------
Total Convertible Bonds
(cost: $ 2,107,221)............................ 2,028,339
-----------
</TABLE>
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-------- ---------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (7.74%)
ENVIRONMENTAL SERVICES (1.16%)
Browning-Ferris Industries, Inc.(a)... 11,500 $ 365,125
GAS PRODUCTION & DISTRIBUTION (1.27%)
Williams Companies, Inc. ............. 5,000 398,750
LIFE INSURANCE (1.57%)
SunAmerica, Inc. - Series E........... 6,600 493,350
METAL MINING (0.88%)
Coeur D' Alene Mines Corporation...... 14,000 276,500
PAPER & ALLIED PRODUCTS (0.74%)
International Paper Company........... 2,900 127,600
International Paper Company 144a(b)... 2,400 105,600
PETROLEUM REFINING (0.39%)
Sun Company, Inc...................... 4,200 123,900
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-------- ---------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
SECURITY & COMMODITY BROKERS (1.73%)
Merrill Lynch & Company, Inc.(a)...... 10,000 $ 540,000
------------
Total Convertible Preferred Stocks
(cost: $ 2,334,112)............................ 2,430,825
------------
PREFERRED STOCKS (1.09%)
GAS PRODUCTION & DISTRIBUTION (0.67%)
NorAm Financing 1..................... 3,900 211,575
SECURITY & COMMODITY BROKERS (0.42%)
Salomon, Inc.......................... 4,800 130,800
------------
Total Preferred Stocks
(cost: $ 323,856).............................. 342,375
------------
COMMON STOCKS (80.44%)
AUTOMOTIVE (1.23%)
Ford Motor Company.................... 11,900 385,263
COMMERCIAL BANKS (0.96%)
Mellon Bank Corporation............... 5,300 302,100
COMPUTER & DATA PROCESSING SERVICE (0.71%)
Electronic Data Systems Corporation... 4,145 222,794
ELECTRIC SERVICES (39.09%)
CINergy Corporation................... 10,500 336,000
CMS Energy Corporation................ 27,900 861,413
DPL, Inc.............................. 33,400 814,125
DQE, Inc.............................. 24,350 669,625
Duke Power Company.................... 24,200 1,240,250
FPL Group, Inc........................ 28,200 1,297,200
General Public Utilities
Corporation......................... 13,300 468,825
Illinova Corporation.................. 26,900 773,374
Korea Electric Power Corporation-
Sponsored ADR(a).................... 14,100 341,925
National Power plc-ADR(a)............. 18,730 456,544
NIPSCO Industries, Inc................ 18,400 740,600
PacifiCorp............................ 23,800 529,550
Peco Energy Company................... 23,500 611,000
Pinnacle West Capital Corporation..... 30,400 923,400
Southern Company...................... 30,900 760,913
Teco Energy, Inc. .................... 26,000 656,500
Texas Utilities Company............... 18,300 782,324
ELECTRIC, GAS & SANITARY SERVICES (0.51%)
American Water Works
Company, Inc. ...................... 4,000 161,000
GAS PRODUCTION & DISTRIBUTION (6.18%)
MCN Corporation....................... 25,900 631,312
New Jersey Resources
Corporation......................... 2,100 60,375
Pacific Enterprises................... 22,400 663,600
PanEnergy Corporation................. 7,800 256,425
Williams Companies, Inc............... 6,600 326,700
HOLDING & OTHER INVESTMENT OFFICES (1.98%)
Meditrust Corporation................. 18,600 620,775
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
60
<PAGE> 63
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES VALUE
-------- ---------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
LIFE INSURANCE (C)
SunAmerica, Inc....................... 1 $ 57
OIL & GAS EXTRACTION (2.18%)
Enron Corporation..................... 16,700 682,613
PETROLEUM REFINING (2.10%)
Exxon Corporation..................... 7,600 660,250
TELECOMMUNICATIONS (23.79%)
AT&T Corporation(a)................... 19,200 1,190,400
Ameritech Corporation................. 17,200 1,021,250
BellSouth Corporation................. 31,800 1,347,524
Compania de Telecomunicaciones de
Chile S.A. - Sponsored ADR(a)....... 3,500 343,438
GTE Corporation....................... 27,700 1,239,574
MCI Communications Corporation........ 28,400 727,750
Pacific Telesis Group................. 19,000 641,250
SBC Communications, Inc.(a)........... 12,500 615,625
Telecomunicacoes Brasileiras SA -
Sponsored ADR....................... 4,800 334,200
WHOLESALE TRADE NONDURABLE GOODS (1.72%)
Phillip Morris Companies, Inc......... 5,200 540,800
------------
Total Common Stocks
(cost: $ 22,630,018)........................... 25,238,643
------------
Total Investment Securities
(cost: $ 27,395,207)......................... $ 30,040,182
=============
SUMMARY
Investments at value.................. 95.74% $ 30,040,182
Other Assets in
Excess of Liabilities............... 4.26% 1,335,197
-------- ------------
Net Assets............................ 100.00% $ 31,375,379
======== ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) See footnote 1C to financial statements
(b) Securities are registered pursuant to rule 144A and may be deemed to be
restricted for resale.
(c) Industry percentage is less than .01%.
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
61
<PAGE> 64
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Convertible Bonds 6.47%
Convertible Preferred Stocks 7.74%
Automotive 1.23%
Electric Services 39.08%
Gas Production & Distribution 6.18%
Holding & Other Investment Offices 1.98%
Oil & Gas Extraction 2.18%
Petroleum Refining 2.10%
Telecommunications 23.79%
Wholesale Trade Nondurable Goods 1.72%
Other 7.53%
</TABLE>
Year to date, the Utility Portfolio has performed relatively well. For the
six-month period ended June 30, 1996, the Portfolio posted a total return of
4.47%. By comparison, the Dow Jones Utility Index gained 0.14% while the
Standard & Poor's Utilities Index declined 0.01%. The Portfolio benefited from a
10% weighting in the natural gas sector, which has been the best performing
sub-sector of the S&P Utility Index this year, returning 14.6% compared to 0.2%
for the electric sector and (2.5%) for the telephone sector. The Portfolio also
enjoyed excellent performance in its diversified international utilities which
represent 8% of the portfolio.
The market is beginning to take an interest in utilities. During the last two
weeks of June, the S&P Utility Index and the Dow Utility Average delivered total
returns of 5.64% and 6.62% respectively, while the broad Standard & Poor's Index
of 500 Common Stocks returned only 0.86%. There are three reasons, we think, for
this outperformance. First, as the broad market indexes continued to march
forward in 1996, utilities began to appear undervalued on relative dividend
yield, book value, and price/earnings basis.
A second reason for utilities' recent outperformance is the interest rate on the
30-year Treasury bond dropping from its 13-month high of 7.20% in mid-June to
6.89% at month's end. The bond market improved as indications continued to mount
that inflation is benign, reducing pressure for the Federal Reserve to raise
short-term interest rates in July. As an interest-rate-sensitive sector,
utilities have rallied with the bond.
Finally, utility companies are enjoying healthy earnings growth rates. The
electric utility sector's earnings rose 8% in 1995, the third straight year of
earnings growth, a string not experienced in well over a decade. Further
earnings growth is expected this year. In the telephone sector, most companies
reported double-digit earnings growth rates for the first quarter, a trend which
is expected to continue. Natural gas companies are also enjoying an impressive
year with earnings growth bolstered by favorable weather, higher gas prices, and
reduced costs.
We are confident that our holdings in high-quality domestic utilities are
positioned to thrive in the future competitive environment and offer good
dividend growth prospects. We are, however, increasingly defensive about our
non-utility holdings. In this area, we're buying relatively high-yielding
convertible bonds and preferred stocks with excellent downside protection. We
are also bullish on the potential of our international utility holdings, with
their excellent prospects for dividend growth and total return.
Some of our major holdings include AT&T Corporation, TECO Energy, Inc., and
NORAM Energy Corporation. We are excited about the growth potential in these
holdings, mostly because of their increased efficiency as a result of
competition and deregulation.
We believe that investors will increasingly turn to utilities for their
defensive qualities as nervousness grows over the extended age and high
valuations of the current bull market. Overall, we are satisfied with our
performance as compared to the major indexes, and we are confident that our
holdings will provide good returns with downside protection for the rest of
1996.
[EAGLE LOGO] /s/ Christopher H. Wiles
------------------------
Christopher H. Wiles
Utility Portfolio Manager
- --------------------------------------------------------------------------------
62
<PAGE> 65
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 27,395,207)............................. $ 30,040,182
Short-term securities, at amortized cost.......... 0
Cash.............................................. 1,133,863
Cash collateral................................... 2,524,800
Receivables:
Fund shares sold................................ 0
Securities sold................................. 114,912
Interest........................................ 16,535
Dividends....................................... 82,662
Foreign receivable.............................. 125
Other........................................... 13,584
-------------
Total assets.................................. 33,926,663
-------------
LIABILITIES:
Fund shares purchased............................. 0
Securities purchased.............................. 0
Accounts payable and accrued liabilities:
Investment advisory fees........................ 17,184
Custody fees.................................... 0
Auditing and accounting fees.................... 0
Dividends to shareholders....................... 0
Deposits for securities on loan................. 2,524,800
Other fees...................................... 9,300
-------------
Total liabilities............................. 2,551,284
-------------
Total net assets............................ $ 31,375,379
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)......... $ 27,176
Additional paid-in capital........................ 27,787,862
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)................................. 253,540
Accumulated undistributed net realized
gain (loss) on:
Investment transactions....................... 661,819
Foreign currency transactions................. 7
Net unrealized appreciation (depreciation) on:
Investment securities........................... 2,644,975
-------------
Net assets applicable to outstanding
shares of capital............................... $ 31,375,379
==============
Shares outstanding at June 30, 1996............... 2,717,626
==============
Net asset value per share......................... $ 11.55
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 47,526
Dividends (net of foreign tax of $ 784)...... 531,362
----------------
Total investment income................ 578,888
----------------
EXPENSES:
Investment advisory fees..................... 105,451
Printing and shareholder reports............. 3,282
Custody fees................................. 13,962
Legal fees................................... 161
Auditing and accounting fees................. 2,524
Directors fees............................... 133
Registration fees............................ 52
Other fees................................... 46
----------------
Total expenses......................... 125,611
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 14
----------------
Net expenses................................. 125,597
----------------
Net investment income (loss)................. 453,291
----------------
Net realized gain (loss) on:
Investment securities.................... 666,236
Foreign currency transactions............ 7
----------------
Total net realized gain (loss)......... 666,243
----------------
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 100,147
----------------
Total change in unrealized appreciation
(depreciation)....................... 100,147
----------------
Net gain (loss) on investments........... 766,390
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 1,219,681
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
63
<PAGE> 66
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS:
Net investment income (loss).......................................................... $ 453,291 $ 788,903
Net realized gain (loss) on investments and foreign currency transactions............. 666,243 282,252
Change in unrealized appreciation (depreciation) on investments and foreign currency
transactions........................................................................ 100,147 2,876,054
---------------- ------------------
Net increase (decrease) in net assets resulting from operations..................... 1,219,681 3,947,209
---------------- ------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................. (200,000) (788,904)
Net realized gains.................................................................... 0 (191,089)
---------------- ------------------
Total distributions................................................................. (200,000) (979,993)
---------------- ------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares..................................................... 10,241,959 18,320,350
Dividends and distributions reinvested................................................ 200,000 979,993
Cost of shares repurchased............................................................ (4,693,750) (8,142,104)
---------------- ------------------
Increase (decrease) in net assets from capital shares transactions.................. 5,748,209 11,158,239
---------------- ------------------
Net increase (decrease) in net assets............................................... 6,767,890 14,125,455
NET ASSETS:
Beginning of period................................................................... 24,607,489 10,482,034
---------------- ------------------
End of period......................................................................... $ 31,375,379 $ 24,607,489
================== ====================
Undistributed net investment income................................................. $ 253,540 $ 249
================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period.............................................. 2,212,175 1,127,702
---------------- ------------------
Shares issued......................................................................... 906,294 1,789,282
Shares issued - reinvestment of dividends and distributions........................... 17,604 91,339
Shares redeemed....................................................................... (418,447) (796,148)
---------------- ------------------
Increase (decrease) in shares outstanding............................................. 505,451 1,084,473
---------------- ------------------
Shares outstanding - end of period.................................................... 2,717,626 2,212,175
================== ====================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
64
<PAGE> 67
WRL SERIES FUND, INC.
UTILITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
UTILITY PORTFOLIO,
THE DOW JONES UTILITIES AVERAGE INDEX AND THE STANDARD & POOR'S INDEX OF 500
COMMON STOCKS
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Dow Jones Utilities Average Index (Dow
Util) and the Standard's & Poor's Index of 500 Common Stocks (S&P) over the
same time frame.
<TABLE>
<CAPTION>
Dow Util
Portfolio Index S&P Index
<S> <C> <C> <C>
Inception 3/1/94 $10,000 $10,000 $10,000
Period Ended 12/31/94 $ 9,542 $ 8,625 $10,072
FYE 12/31/95 $11,952 $12,063 $13,854
Six Months Ended 6/30/96 $12,486 $12,080 $15,253
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
-------- ---------------------
1996 1995 1994+
-------- -------- --------
<S> <C> <C> <C>
Net asset value, beginning of period............ $ 11.12 $ 9.30 $ 10.00
Income from operations:
Net investment income (loss)................ .18 .46 .43
Net realized and unrealized
gain (loss) on investments................ .33 1.93 (.70)
-------- -------- --------
Total income (loss) from operations....... .51 2.39 (.27)
-------- -------- --------
Distributions:
Dividends from net investment income........ (.08) (.46) (.43)
Distributions from net realized gains
on investments............................ .00 (.11) .00
-------- -------- --------
Total distributions....................... (.08) (.57) (.43)
-------- -------- --------
Net asset value, end of period.................. $ 11.55 $ 11.12 $ 9.30
========= ========= =========
Total return.................................... 4.47% 25.25% (4.58)%
Ratios and supplemental data:
Net assets at end of period
(in thousands).............................. $ 31,375 $ 24,607 $ 10,482
Ratio of expenses to average net assets....... .88% 1.00% 1.00%
Ratio of net investment income (loss)
to average net assets....................... 3.19% 4.56% 5.36%
Ratio of commission paid by number of shares.. 4.83% n/a n/a
Portfolio turnover rate....................... 41.38% 78.34% 36.13%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was March 1, 1994. The total return is not
annualized.
The notes to the financial statements are in integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
65
<PAGE> 68
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (21.79%)
U.S. Treasury Notes
6.88%, due 03/31/00.............. $ 5,000,000 $ 5,075,650
U.S. Treasury Notes
6.25%, due 05/31/00.............. 5,000,000 4,968,900
U.S. Treasury Bonds
7.75%, due 02/15/01.............. 2,000,000 2,101,800
U.S. Treasury Bonds
7.50%, due 11/15/01.............. 4,000,000 4,175,920
U.S. Treasury Bonds
7.25%, due 11/15/96.............. 2,000,000 2,013,260
U.S. Treasury Notes
6.75%, due 05/31/97.............. 2,000,000 2,017,280
U.S. Treasury Notes
5.50%, due 07/31/97.............. 2,000,000 1,993,020
U.S. Treasury Notes
7.38%, due 11/15/97.............. 2,000,000 2,036,260
U.S. Treasury Notes
5.38%, due 05/31/98.............. 4,000,000 3,947,280
U.S. Treasury Notes
5.88%, due 08/15/98.............. 2,000,000 1,989,040
U.S. Treasury Notes
7.13%, due 10/15/98.............. 3,000,000 3,061,140
U.S. Treasury Notes
7.00%, due 04/15/99.............. 2,000,000 2,036,040
U.S. Treasury Notes
6.50%, due 04/30/99.............. 2,000,000 2,011,000
U.S. Treasury Notes
7.50%, due 10/31/99.............. 1,000,000 1,032,710
U.S. Treasury Bonds (b)
7.50%, due 05/15/02.............. 2,000,000 2,094,880
------------
Total U.S. Government Obligations
(cost: $ 41,020,917).......................... 40,554,180
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS (3.22%)
Federal Home Loan Bank
7.48%, due 06/28/01.............. 1,000,000 1,002,140
Federal Home Loan Bank
6.19%, due 11/20/01.............. 1,000,000 969,780
Federal Home Loan Mortgage
Corporation
6.57%, due 09/18/00.............. 1,000,000 990,650
Federal National Mortgage
Association
6.81%, due 5/15/00............... 1,000,000 999,210
Federal National Mortgage
Association
7.55%, due 4/22/02............... 1,000,000 1,035,060
Federal National Mortgage
Association
6.18%, due 07/22/98.............. 1,000,000 993,100
------------
Total U.S. Government Agency Obligations
(cost: $ 6,111,113)........................... 5,989,940
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
CORPORATE DEBT SECURITIES (6.38%)
AUTOMOTIVE (0.56%)
Ford Motor Credit Company
8.38%, due 01/15/00.............. $ 1,000,000 $ 1,050,000
COMMERCIAL BANKS (1.10%)
Chase Manhattan Corporation
5.50%, due 02/15/01.............. 1,000,000 946,250
Mellon Financial Company
9.25%, due 08/15/01.............. 1,000,000 1,097,500
DEPARTMENT STORES (0.53%)
Wal-Mart Stores, Inc.
6.75%, due 05/15/02.............. 1,000,000 993,750
ELECTRIC SERVICES (0.54%)
Commonwealth Edison Company
5.75%, due 11/01/96.............. 1,000,000 998,750
FABRICATED METAL PRODUCTS (0.53%)
Masco Corporation
6.63%, due 09/15/99.............. 1,000,000 995,000
PERSONAL CREDIT INSTITUTIONS (0.53%)
American Express Company
6.50%, due 08/01/00.............. 1,000,000 988,750
RESTAURANTS (0.55%)
PepsiCo, Inc.
7.75%, due 10/01/98.............. 1,000,000 1,026,250
SECURITY & COMMODITY BROKERS (0.53%)
Paine Webber Group, Inc.
6.25%, due 06/15/98.............. 1,000,000 992,500
TELECOMMUNICATIONS (1.51%)
BellSouth Telecommunications, Inc.
7.00%, due 02/01/05.............. 1,000,000 995,000
Southwestern Bell Telephone Company
5.75%, due 09/01/04.............. 2,000,000 1,825,000
------------
Total Corporate Debt Securities
(cost: $ 12,149,505).......................... 11,908,750
------------
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
66
<PAGE> 69
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
PREFERRED STOCKS (0.53%)
TELECOMMUNICATIONS (0.53%)
MCI Capital I - Series A........... 40,000 $ 985,000
-------------
Total Preferred Stocks
(cost: $ 1,000,000)........................... 985,000
-------------
COMMON STOCKS (53.47%)
AUTOMOTIVE (2.72%)
Chrysler Corporation............... 45,000 2,790,000
Ford Motor Company................. 70,000 2,266,250
BUSINESS SERVICES (1.26%)
Fingerhut Companies, Inc........... 150,000 2,343,750
CHEMICALS & ALLIED PRODUCTS (6.47%)
Dow Chemical Company............... 50,000 3,800,000
Eastman Chemical Company........... 40,000 2,435,000
Georgia Gulf Corporation........... 100,000 2,925,000
Praxair, Inc. ..................... 35,000 1,478,750
Wellman, Inc....................... 60,000 1,402,500
COMMUNICATIONS EQUIPMENT (1.05%)
Philips Electronics nv -
NY shares ADR.................... 60,000 1,957,500
COMPUTER & DATA PROCESSING SERVICE (0.97%)
Novell, Inc.(a).................... 130,000 1,803,750
COMPUTER & OFFICE EQUIPMENT (2.01%)
EMC Corporation(a)................. 80,000 1,490,000
Seagate Technology, Inc.(a)(b)..... 50,000 2,250,000
DEPARTMENT STORES (3.22%)
May Department Stores Company...... 60,000 2,625,000
TJX Companies, Inc. ............... 100,000 3,375,000
ELECTRONIC COMPONENTS & ACCESSORIES (2.77%)
American Power Conversion
Corporation(a)(b)................ 150,000 1,537,500
Intel Corporation.................. 30,000 2,203,125
Read-Rite Corporation(a)........... 100,000 1,412,500
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.28%)
Teleflex, Inc...................... 50,000 2,387,500
FINANCE (2.79%)
Countrywide Credit Industries,
Inc.............................. 70,000 1,732,500
Federal Home Loan Mortgage
Corporation...................... 20,000 1,710,000
Federal National Mortgage
Association...................... 52,000 1,742,000
HOLDING & OTHER INVESTMENT OFFICES (1.12%)
Horsham Corporation................ 150,000 2,081,250
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
INDUSTRIAL MACHINERY & EQUIPMENT (0.98%)
Applied Materials, Inc.(a)......... 60,000 $ 1,830,000
INSURANCE (5.05%)
AFLAC, Inc. ....................... 64,000 1,912,000
AMBAC, Inc......................... 40,000 2,085,000
John Alden Financial Corporation... 110,000 2,433,750
The PMI Group, Inc................. 70,000 2,975,000
LUMBER & WOOD PRODUCTS (1.19%)
Louisiana-Pacific Corporation...... 100,000 2,212,500
MINING (0.53%)
Potash Corporation of Saskatchewan,
Inc. ............................ 15,000 993,750
MOTOR VEHICLES, PARTS & SUPPLIES (0.42%)
TBC Corporation(a)................. 90,000 776,250
PAPER & ALLIED PRODUCTS (1.19%)
International Paper Company........ 60,000 2,212,500
PAPERBOARD CONTAINERS AND BOXES (1.26%)
Temple-Inland, Inc................. 50,000 2,337,500
PETROLEUM REFINING (3.05%)
Ashland, Inc. ..................... 50,000 1,981,250
Unocal Corporation................. 50,000 1,687,500
Valero Energy Corporation.......... 80,000 2,000,000
PHARMACEUTICALS (0.73%)
R.P. Scherer Corporation(a)........ 30,000 1,361,250
PRIMARY METAL INDUSTRIES (3.47%)
Alumax, Inc.(a).................... 70,000 2,126,250
Aluminum Company of America........ 40,000 2,295,000
Birmingham Steel Corporation....... 125,000 2,046,875
RESIDENTIAL BUILDING CONSTRUCTION (1.18%)
Clayton Homes, Inc................. 110,000 2,200,000
RESTAURANTS (0.52%)
Cracker Barrel Old Country
Store, Inc. ..................... 40,000 970,000
RETAIL TRADE (2.30%)
Toys "R" Us, Inc.(a)............... 150,000 4,275,000
SECURITY & COMMODITY BROKERS (0.93%)
Lehman Brothers Holdings, Inc...... 50,000 1,237,500
United Assets Management
Corporation...................... 20,000 490,000
SHOE STORES (0.16%)
Payless ShoeSource, Inc.(a)........ 9,600 304,800
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
67
<PAGE> 70
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (0.68%)
Sprint Corporation................. 30,000 $ 1,260,000
TEXTILE MILL PRODUCTS (1.04%)
Russell Corporation................ 70,000 1,933,750
TOBACCO PRODUCTS (1.38%)
UST, Inc........................... 75,000 2,568,750
VARIETY STORES (0.35%)
Value City Department Stores(a).... 60,000 660,000
WHOLESALE TRADE NONDURABLE GOODS (1.40%)
Philip Morris Companies, Inc....... 25,000 2,600,000
-------------
Total Common Stocks
(cost: $ 90,379,021).......................... 99,515,050
-------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
COMMERCIAL PAPER (13.04%)
AT&T Capital Corporation
5.43%, due 07/18/96.............. $ 1,300,000 $ 1,296,274
Allomon Funding Corporation
5.37%, due 07/11/96.............. 600,000 598,926
Anchor Funding Corporation
5.41%, due 07/08/96.............. 1,500,000 1,497,971
Anchor Funding Corporation
5.39%, due 07/15/96.............. 1,200,000 1,197,125
Anchor Funding Corporation
5.47%, due 07/19/96.............. 400,000 398,784
APC Funding
5.33%, due 07/02/96.............. 700,000 699,689
Bayshore Fuel
5.35%, due 07/01/96.............. 2,500,000 2,499,257
Creative Capital
5.38%, due 07/03/96.............. 1,500,000 1,499,103
Creative Capital
5.43%, due 07/16/96.............. 1,800,000 1,795,385
Industrial Funding
5.45%, due 07/19/96.............. 1,050,000 1,046,821
Iris Partners
5.43%, due 07/17/96.............. 1,119,000 1,115,962
Merrill Lynch
5.35%, due 07/12/96.............. 1,100,000 1,097,875
Merrill Lynch & Co., Inc.
5.35%, due 07/09/96.............. 1,250,000 1,248,142
Omnibus Fund G
5.46%, due 07/22/96.............. 497,000 495,266
Omnibus Fund G
5.45%, due 07/08/96.............. 2,600,000 2,596,459
Prime Asset Vehicle
5.37%, due 07/05/96.............. 1,000,000 999,105
Stellar Capital
5.40%, due 07/10/96.............. 2,000,000 1,996,700
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------- --------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
Stellar Capital
5.48%, due 07/15/96.............. $ 600,000 $ 598,539
Triple A One Funding Corporation
5.36%, due 07/02/96.............. 600,000 599,732
Triple A One Funding Corporation
5.42%, due 07/11/96.............. 1,000,000 998,193
-------------
Total Commercial Paper
(cost: $ 24,275,308).......................... 24,275,308
-------------
Total Investment Securities
(cost: $174,935,864)........................ $ 183,228,228
=============
SUMMARY
Investments at value............... 98.43% $ 183,228,228
Other Assets in
Excess of Liabilities............ 1.57% 2,928,815
-------- -------------
Net Assets......................... 100.00% $ 186,157,043
======== =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
(b) See footnote 1C to financial statements
ADR American Depository Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
68
<PAGE> 71
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 21.79%
U.S. Government Agency Obligations 3.22%
Corporate Debt Securities 6.38%
Automotive 2.72%
Chemicals & Allied Products 6.47%
Computer & Office Equipment 2.01%
Department Stores 3.22%
Electronic Components & Accessories 2.77%
Finance 2.79%
Insurance 5.05%
Petroleum Refining 3.05%
Primary Metal Industries 3.47%
Retail Trade 2.30%
Commercial Paper 13.04%
Other 21.72%
</TABLE>
The investment objective of the Tactical Asset Allocation Portfolio is
preservation of capital and competitive investment returns. This strategy seeks
to enhance value during strong market periods, while preserving capital during
weak or volatile market periods.
The U.S. stock market continued strong during the first half of 1996, with the
Standard & Poor's Index of 500 Common Stocks returning 10.10%. Fixed-income
markets, however, turned weak, and most market benchmarks showed losses on a
total return basis during the first half of 1996. Indeed, the Lehman Brothers
Government/Corporate Intermediate Bond Index declined (.21%). Against this
backdrop, for the six month period ending June 30, 1996, the Tactical Asset
Allocation Portfolio returned 4.81% on a total return basis.
Bond market participants entered 1996 expecting the U.S. economy to slow, and
expectations ran high for still lower interest rates. Many bond investors were
surprised by the vigor exhibited by the U.S. economy during the last two
quarters. It appears that consumers have been more willing to spend than was
widely expected, as growth in consumer income has been reasonably robust.
The Portfolio entered 1996 with a conservative exposure to the bond market and a
relatively cautious outlook on stocks for the intermediate term. Our
contrarian/value focus on stock selection guided us toward stocks that have
benefited nicely from the developing growth phase in the U.S. economy. We
entered the year with major positions in the retail, automotive, and basic
materials industries. All of these sectors provided better than market returns
during the first half, as economic growth expectations improved. Also, the
increased volatility within the equity market has been creating good buying
opportunities within the technology sector. We have expanded our holdings in the
technology area over the past several months and we will continue to look for
industry/sector rotation opportunities.
Our asset allocation discipline gives us a relatively low equity exposure when
risks appear high, and a relatively high equity exposure when risks appear low.
Currently, we remain slightly below our long-term average dedication to stocks.
Over a full market cycle, we intend to have an average allocation to equities
slightly greater than 60%.
Our fixed-income strategy seeks to enhance income through the purchase of
high-quality corporate bonds and U.S. Treasuries. The intent of this strategy is
that it play mostly a defensive role. Our decision to be very short in maturity
provided a sound foundation within the portfolio and for the first six months
minimized the volatility which most fixed-income investors experienced from
January to June.
We continue to hold a relatively cautious outlook toward the stock market over
the intermediate term (six to 12 months). Our long-term outlook (one to three
years) remains relatively positive. In the intermediate term, our concerns are
focused on stretched valuations, increased speculation in the markets, and
rising interest rates. These ingredients have typically been present prior to
cyclical setbacks in the stock market. Still, strong corporate earnings and
productivity, relatively low interest rates, and well-behaved inflation should
provide a sound environment for the financial markets over the long term.
<TABLE>
<S> <C> <C>
/s/ Arvind Sachdeva /s/ John C. Riazzi
---------------------------------------------------------
Arvind Sachdeva John C. Riazzi
(DEAN(R) LOGO) Tactical Asset Allocation Portfolio Managers
</TABLE>
- --------------------------------------------------------------------------------
69
<PAGE> 72
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 150,660,556).......................... $ 158,952,920
Short-term securities, at amortized cost........ 24,275,308
Cash............................................ 1,260,950
Cash collateral................................. 7,112,500
Receivables:
Fund shares sold.............................. 0
Securities sold............................... 5,401,842
Interest...................................... 933,191
Dividends..................................... 156,950
Other......................................... 55,933
--------------
Total assets................................ 198,149,594
--------------
LIABILITIES:
Fund shares purchased........................... 0
Securities purchased............................ 4,708,410
Accounts payable and accrued liabilities:
Investment advisory fees...................... 113,074
Custody fees.................................. 0
Auditing and accounting fees.................. 0
Dividends to shareholders..................... 0
Deposits for securities on loan............... 7,112,500
Other fees.................................... 58,567
--------------
Total liabilities........................... 11,992,551
--------------
Total net assets.......................... $ 186,157,043
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)....... $ 155,393
Additional paid-in capital...................... 173,892,006
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)............................... 1,413,576
Accumulated undistributed net realized
gain (loss) on:
Investment transactions..................... 2,403,704
Net unrealized appreciation (depreciation) on:
Investment securities......................... 8,292,364
--------------
Net assets applicable to outstanding
shares of capital............................. $ 186,157,043
==============
Shares outstanding at June 30, 1996............. 15,539,282
==============
Net asset value per share....................... $ 11.98
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 2,245,304
Dividends.................................... 821,246
----------------
Total investment income................ 3,066,550
----------------
EXPENSES:
Investment advisory fees..................... 631,902
Printing and shareholder reports............. 5,226
Custody fees................................. 23,120
Legal fees................................... 241
Auditing and accounting fees................. 2,676
Directors fees............................... 203
Registration fees............................ 81
Other fees................................... 0
----------------
Total expenses........................... 663,449
Less:
Advisory fee waiver and expense
reimbursement............................ 0
Fees paid indirectly....................... 36
----------------
Net expenses........................... 663,413
----------------
Net investment income (loss)................. 2,403,137
----------------
Net realized gain (loss) on:
Investment securities.................... 2,153,704
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 2,055,500
----------------
Net gain (loss) on investments........... 4,209,204
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 6,612,341
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
70
<PAGE> 73
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 2,403,137 $ 2,056,694
Net realized gain (loss) on investments................................................. 2,153,704 2,438,162
Change in unrealized appreciation (depreciation) on investments......................... 2,055,500 6,236,864
------------- -------------
Net increase (decrease) in net assets resulting from operations....................... 6,612,341 10,731,720
------------- -------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... (1,000,000) (2,046,255)
Net realized gains...................................................................... 0 (2,188,162)
------------- -------------
Total distributions................................................................... (1,000,000) (4,234,417)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 73,527,520 125,126,149
Dividends and distributions reinvested.................................................. 1,000,000 4,234,417
Cost of shares repurchased.............................................................. (14,513,785) (15,326,902)
------------- -------------
Increase (decrease) in net assets from capital shares transactions.................... 60,013,735 114,033,664
------------- -------------
Net increase (decrease) in net assets................................................. 65,626,076 120,530,967
NET ASSETS:
Beginning of period..................................................................... 120,530,967 0
------------- -------------
End of period........................................................................... $ 186,157,043 $ 120,530,967
============= =============
Undistributed net investment income................................................... $ 1,413,576 $ 10,439
============= =============
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 10,487,976 0
------------- -------------
Shares issued........................................................................... 6,202,344 11,463,783
Shares issued - reinvestment of dividends and distributions............................. 83,743 370,908
Shares redeemed......................................................................... (1,234,781) (1,346,715)
------------- -------------
Increase (decrease) in shares outstanding............................................... 5,051,306 10,487,976
------------- -------------
Shares outstanding - end of period...................................................... 15,539,282 10,487,976
============= =============
</TABLE>
* The inception of this portfolio was January 3, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
71
<PAGE> 74
WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
TACTICAL ASSET ALLOCATION PORTFOLIO,
THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS AND THE LEHMAN BROTHERS
GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard's and Poor's Index of 500 Common
Stocks (S&P) and the Lehman Brothers Government/Corporate Intermediate Bond
Index (LB) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index LB Index
<S> <C> <C> <C>
Inception 1/3/95 $10,000 $10,000 $10,000
Period Ended 12/31/95 $12,009 $13,758 $11,533
Six Months Ended 6/30/96 $12,587 $15,147 $11,509
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
--------- -----------
1996 1995+
--------- -----------
<S> <C> <C>
Net asset value, beginning of period.................. $ 11.49 $ 10.00
Income from operations:
Net investment income (loss)...................... .18 .41
Net realized and unrealized
gain (loss) on investments...................... .38 1.93
-------- --------
Total income (loss) from operations............. .56 2.34
-------- --------
Distributions:
Dividends from net investment income.............. (.07) (.41)
Distributions from net realized gains
on investments.................................. .00 (.44)
-------- --------
Total distributions............................. (.07) (.85)
-------- --------
Net asset value, end of period........................ $ 11.98 $ 11.49
======== ========
Total return.......................................... 4.81% 20.09%
Ratios and supplemental data:
Net assets at end of period
(in thousands)..................................... $ 186,157 $ 120,531
Ratio of expenses to average net assets............. .83% .93%
Ratio of net investment income (loss)
to average net assets............................. 3.01% 3.76%
Ratio of commission paid to number of shares........ 4.83% n/a
Portfolio turnover rate............................. 20.57% 38.68%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was January 3, 1995. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
72
<PAGE> 75
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS (0.01%)
AEROSPACE (0.01%)
Teledyne, Inc. - Series E........... 30 $ 454
---------
Total Convertible Preferred Stocks
(cost: $ 401).................................. 454
---------
COMMON STOCKS (69.53%)
AEROSPACE (2.76%)
Lockheed Martin Corporation......... 1,000 $ 84,000
Rohr Industries, Inc.(a)............ 5,700 118,987
APPAREL PRODUCTS (3.11%)
Starter Corporation(a).............. 12,500 107,812
U.S. Industries, Inc.(a)............ 5,000 120,625
APPAREL & ACCESSORY STORES (1.87%)
The Gymboree Corporation(a)......... 4,500 137,250
COMMERCIAL BANKS (0.71%)
Provident Bankshares Corporation.... 1,586 52,322
COMPUTER & DATA PROCESSING SERVICE (3.00%)
Cisco Systems, Inc.(a).............. 2,400 135,900
Sun Microsystems, Inc.(a)........... 1,440 84,780
COMPUTER & OFFICE EQUIPMENT (1.73%)
Seagate Technology, Inc.(a)......... 860 38,700
Xircom, Inc.(a)..................... 6,000 88,500
DEPARTMENT STORES (1.38%)
TJX Companies, Inc.................. 3,000 101,250
ELECTRIC SERVICES (4.10%)
Calenergy, Inc.(a).................. 3,700 94,350
Duke Power Company.................. 1,650 84,562
Unicom Corporation.................. 4,400 122,650
ELECTRICAL GOODS (2.59%)
Carlisle Companies, Inc............. 2,400 127,500
Motorola, Inc....................... 1,000 62,875
ELECTRONIC COMPONENTS & ACCESSORIES (1.90%)
Sanmina Corporation(a).............. 2,600 70,200
Vitesse Semiconductor
Corporation(a).................... 2,900 69,600
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.13%)
Lamson & Sessions Company(a)........ 7,000 83,125
ENGINEERING & MANAGEMENT SERVICES (0.91%)
Halliburton Company................. 1,200 66,600
FABRICATED METAL PRODUCTS (1.52%)
Storm, Ruger & Company, Inc......... 2,400 111,600
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
FINANCE (0.62%)
Imperial Credit Industries,
Inc.(a)........................... 1,500 $ 45,375
FOOD STORES (1.78%)
Vons Companies, Inc.(a)............. 3,500 130,812
FOOD & KINDRED PRODUCTS (1.55%)
Archer-Daniels-Midland Co........... 5,950 113,794
GAS PRODUCTION & DISTRIBUTION (2.69%)
NorAm Energy Corporation............ 9,300 101,137
Williams Companies, Inc............. 1,950 96,525
HEALTH SERVICES (1.20%)
Chronimed, Inc.(a).................. 4,800 88,200
HOTELS & OTHER LODGING PLACES (1.52%)
MGM Grand, Inc.(a).................. 600 23,925
Prime Hospitality Corp.(a).......... 5,300 87,450
INDUSTRIAL MACHINERY & EQUIPMENT (1.75%)
US Filter Corporation(a)............ 3,700 128,575
INSTRUMENTS & RELATED PRODUCTS (3.04%)
Eastman Kodak Company............... 1,450 112,737
Perkin-Elmer Corporation............ 2,300 110,975
MANAGEMENT SERVICES (1.77%)
Paychex, Inc........................ 2,700 129,938
MEDICAL INSTRUMENTS & SUPPLIES (1.64%)
Medtronic, Inc...................... 2,150 120,400
MISC. GENERAL MERCHANDISE STORES (1.36%)
Waban, Inc.(a)...................... 4,200 100,275
MOTION PICTURES (1.54%)
Carmike Cinemas, Inc.(a)............ 4,200 113,400
OIL & GAS EXTRACTION (4.99%)
ENSCO International, Inc.(a)........ 1,500 48,750
Global Natural Resources, Inc.(a)... 6,700 109,713
Noble Drilling Corporation(a)....... 9,100 126,263
Oryx Energy Company(a).............. 5,000 81,250
PHARMACEUTICALS (1.21%)
Watson Pharmaceuticals, Inc.(a)..... 2,350 89,006
PRIMARY METAL INDUSTRIES (1.56%)
Reynolds Metals Company............. 2,200 114,675
PRINTING & PUBLISHING (1.77%)
Merrill Corporation................. 5,200 130,000
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
73
<PAGE> 76
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
RADIO, TELEVISION & COMPUTER STORES (0.91%)
Bell Microproducts, Inc.(a)......... 8,800 $ 67,100
RESIDENTIAL BUILDING CONSTRUCTION (1.61%)
Southern Energy Homes, Inc.(a)...... 5,500 118,250
RETAIL TRADE (5.57%)
Borders Group, Inc.(a).............. 3,200 103,200
OfficeMax, Inc.(a).................. 4,100 97,888
Price/Costco, Inc.(a)............... 5,200 112,450
The Sports Authority, Inc........... 2,900 94,975
SAVINGS INSTITUTIONS (0.50%)
First Indiana Corporation........... 1,536 36,864
TELECOMMUNICATIONS (1.35%)
United States Cellular
Corporation (a)................... 3,200 99,200
WHOLESALE TRADE DURABLE GOODS (2.89%)
Fisher Scientific International..... 3,100 116,250
Wyle Electronics.................... 2,900 96,063
---------
Total Common Stocks
(cost: $ 5,049,426)............................ 5,108,603
---------
Total Investment Securities
(cost: $ 5,049,827).......................... $ 5,109,057
=========
SUMMARY
Investments at value................ 69.54% $ 5,109,057
Other Assets in
Excess of Liabilities............. 30.46% 2,238,124
------- ------------
Net Assets.......................... 100.00% $ 7,347,181
======= ============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
74
<PAGE> 77
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
SIX MONTHS ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Aerospace 2.76%
Apparel Products 3.11%
Apparel & Accessory Stores 1.87%
Computer & Data Processing Service 3.00%
Electric Services 4.10%
Electrical Goods 2.59%
Electronic Components & Accessories 1.90%
Gas Production & Distribution 2.69%
Instruments & Related Products 3.04%
Oil & Gas Extraction 4.99%
Retail Trade 5.57%
Wholesale Trade Durable Goods 2.89%
Other 61.49%
</TABLE>
The C.A.S.E. Growth Portfolio commenced operations on May 1, 1995, and has just
completed its first full year of operations. Its investment objective is
preservation and growth of capital. This is achieved through investments in
common stocks of small-to-medium-sized companies. For the six-month period ended
June 30, 1996, the Portfolio posted a total return of 6.77%. By comparison, the
Standard & Poor's Index of 500 Common Stocks returned 10.10% and the Dow Jones
Industrial Average returned 11.70% for the same period.
Generally, our strategy is to invest in stocks of companies with
well-above-average management, solid balance sheets, below market price to
earnings ratios (on both a leading and a lagging basis), above market insider
and institutional buying, and earnings estimates that are being revised upwards.
While generally employing a buy-and-hold posture until fundamentals dictate a
change, the Portfolio may use short-term strategies to take advantage of
changing market conditions.
The stock market continues to be dominated by earnings as it reaches new highs.
In fact, of the two dozen fundamental methodologies used professionally to
evaluate investments, the leading factors governing price movement are earnings
related -- quarterly earnings surprise factors, projected earnings changes,
quarterly earnings per share growth, earnings projections, and insider activity
for 1996. As the economy continues to grow, our emphasis has switched to
companies more dependent on the domestic economy.
Our approach assumes a softer, slower paced market. In place of a broad-based
movement, certain areas of the economic structure appear better situated than
others. For example, our studies reflect that companies dependent on the
domestic economy have performed well. The economic sectors of technology, energy
and consumer spending are leading the performance race. We expect these trends
to continue through the summer.
Stocks that exhibit fundamentals of exceptional strength will ordinarily do
better than the market in good times, as well as bad times. The broad reach and
economic scope of our study disciplines lend themselves to investing in
selective economic periods, when volatility and uncertainty are present.
Therefore, our approach seems well suited to the period ahead.
<TABLE>
<C> <S>
[C.A.S.E. LOGO] /s/ William E. Lange
--------------------------------------
William E. Lange
C.A.S.E. Growth Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
75
<PAGE> 78
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 5,049,827)............................ $ 5,109,057
Short-term securities, at amortized cost........ 0
Cash............................................ 2,233,625
Receivables:
Fund shares sold.............................. 0
Securities sold............................... 0
Interest...................................... 5,052
Dividends..................................... 4,471
Other......................................... 0
--------------
Total assets................................ 7,352,205
--------------
LIABILITIES:
Fund shares purchased........................... 0
Securities purchased............................ 0
Accounts payable and accrued liabilities:
Investment advisory fees...................... 4,019
Custody fees.................................. 0
Auditing and accounting fees.................. 0
Dividends to shareholders..................... 0
Deposits for securities on loan............... 0
Other fees.................................... 1,005
--------------
Total liabilities........................... 5,024
--------------
Total net assets.......................... $ 7,347,181
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)....... $ 5,903
Additional paid-in capital...................... 7,116,472
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)............................... 16,944
Accumulated undistributed net realized
gain (loss) on:
Investment transactions..................... 148,632
Net unrealized appreciation (depreciation) on:
Investment securities......................... 59,230
--------------
Net assets applicable to outstanding
shares of capital............................. $ 7,347,181
==============
Shares outstanding at June 30, 1996............. 590,290
==============
Net asset value per share....................... $ 12.45
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
INVESTMENT INCOME: JUNE 30, 1996
<S> <C>
Interest..................................... $ 12,669
Dividends (Net of foreign tax of $ 371)...... 23,789
----------------
Total investment income................ 36,458
----------------
EXPENSES:
Investment advisory fees..................... 15,882
Printing and shareholder reports............. 133
Custody fees................................. 17,237
Legal fees................................... 4
Auditing and accounting fees................. 1,515
Directors fees............................... 3
Registration fees............................ 43
Other fees................................... 4
----------------
Total expenses........................... 34,821
Less:
Advisory fee waiver and expense
reimbursement............................ 14,969
Fees paid indirectly....................... 0
----------------
Net expenses........................... 19,852
----------------
Net investment income (loss)................. 16,606
----------------
Net realized gain (loss) on:
Investment securities.................... 143,631
Change in unrealized appreciation
(depreciation) on:
Investment securities.................... 12,461
----------------
Net gain (loss) on investments........... 156,092
----------------
Net increase (decrease) in net assets
resulting from operations.................. $ 172,698
==================
</TABLE>
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
76
<PAGE> 79
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995*
<S> <C> <C>
OPERATIONS:
Net investment income (loss)............................................................ $ 16,606 $ 11,328
Net realized gain (loss) on investments................................................. 143,631 81,032
Change in unrealized appreciation (depreciation) on investments......................... 12,461 46,769
---------------- ------------------
Net increase (decrease) in net assets resulting from operations....................... 172,698 139,129
---------------- ------------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income................................................................... 0 (10,990)
Net realized gains...................................................................... 0 (76,031)
---------------- ------------------
Total distributions................................................................... 0 (87,021)
---------------- ------------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares....................................................... 4,763,315 2,442,347
Dividends and distributions reinvested.................................................. 0 87,021
Cost of shares repurchased.............................................................. (167,074) (3,234)
---------------- ------------------
Increase (decrease) in net assets from capital shares transactions.................... 4,596,241 2,526,134
---------------- ------------------
Net increase (decrease) in net assets................................................. 4,768,939 2,578,242
NET ASSETS:
Beginning of period..................................................................... 2,578,242 0
---------------- ------------------
End of period........................................................................... $ 7,347,181 $ 2,578,242
================== ====================
Undistributed net investment income................................................... $ 16,944 $ 338
================== ====================
SHARE ACTIVITY:
Shares outstanding - beginning of period................................................ 221,168 0
---------------- ------------------
Shares issued........................................................................... 382,499 213,996
Shares issued - reinvestment of dividends and distributions............................. 0 7,465
Shares redeemed......................................................................... (13,377) (293)
---------------- ------------------
Increase (decrease) in shares outstanding............................................... 369,122 221,168
---------------- ------------------
Shares outstanding - end of period...................................................... 590,290 221,168
================== ====================
</TABLE>
* The inception of this portfolio was May 1, 1995.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
77
<PAGE> 80
WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
C.A.S.E. GROWTH PORTFOLIO AND THE WILSHIRE 5000 INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Wilshire 5000 Index (Wilshire) over the
same time frame.
<TABLE>
<CAPTION>
Portfolio Wilshire Index
<S> <C> <C>
Inception 5/1/95 $10,000 $10,000
Period Ended 12/31/95 $12,065 $12,028
Six Months Ended 6/30/96 $12,882 $13,131
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
-------- -----------
1996 1995+
-------- -----------
<S> <C> <C>
Net asset value, beginning of period................... $ 11.66 $ 10.00
Income from operations:
Net investment income (loss)....................... .05 .12
Net realized and unrealized
gain (loss) on investments....................... .74 2.49
------- -------
Total income (loss) from operations.............. .79 2.61
------- -------
Distributions:
Dividends from net investment income............... .00 (.12)
Distributions from net realized gains
on investments................................... .00 (.83)
------- -------
Total distributions.............................. .00 (.95)
------- -------
Net asset value, end of period......................... $ 12.45 $ 11.66
======= =======
Total return........................................... 6.77% 20.65%
Ratios and supplemental data:
Net assets at end of period
(in thousands)...................................... $ 7,347 $ 2,578
Ratio of expenses to average net assets.............. 1.00% 1.00%
Ratio of net investment income (loss)
to average net assets.............................. .79% 1.02%
Ratio of commission paid to number of shares......... 6.03% n/a
Portfolio turnover rate.............................. 90.07% 121.62%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was May 1, 1995. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
78
<PAGE> 81
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
--------- --------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (7.24%)
U.S. Treasury Notes
5.63%, due 11/30/00................. $140,000 $ 135,580
------------
Total U.S. Government Obligations
(cost: $ 135,785).............................. 135,580
------------
ASSET-BACKED SECURITIES (3.46%)
General Motors Acceptance Corporation
6.75%, due 03/15/03................. 66,000 64,845
------------
Total Asset-Backed Securities
(cost: $ 64,614)............................... 64,845
------------
CORPORATE DEBT SECURITIES (3.46%)
FINANCE (3.46%)
NationsBank Corporation
7.00%, due 05/15/03................. 65,000 64,675
------------
Total Corporate Debt Securities
(cost: $ 64,680)............................... 64,675
------------
</TABLE>
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
PREFERRED STOCKS (1.11%)
COMPUTER & DATA PROCESSING SERVICE (1.11%)
SAP AG - Vorzug......................... 140 $ 20,764
-----------
Total Preferred Stocks
(cost: $ 18,994)................................. 20,764
-----------
COMMON STOCKS (44.59%)
APPAREL & ACCESSORY STORES (1.41%)
Gap, Inc................................ 820 26,343
AUTOMOTIVE (1.08%)
Bayerische Motoren Works AG............. 35 20,297
CHEMICALS & ALLIED PRODUCTS (3.17%)
Bayer AG................................ 590 20,839
Hoechat AG ............................. 590 20,005
Mitsubishi Chemical Corp................ 4,000 18,432
COMMERCIAL BANKS (0.65%)
HSBC Holdings plc....................... 800 12,092
COMMUNICATIONS EQUIPMENT (0.77%)
Tadiran Telecommunications Ltd.(a)...... 900 14,400
COMPUTER & DATA PROCESSING SERVICE (1.83%)
Bay Networks, Inc.(a)................... 450 11,588
CISCO Systems, Inc.(a).................. 400 22,650
CONSTRUCTION (0.83%)
DAIWA House Industry Co................. 1,000 15,481
DEPARTMENT STORES (1.29%)
May Department Store Company............ 200 8,750
Takashimaya Co.......................... 1,000 15,481
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRONIC COMPONENTS & ACCESSORIES (3.39%)
Atmel Corporation(a).................... 790 $ 23,799
Intel Corporation....................... 375 27,539
Lattice Semiconductor Corporation(a).... 500 12,063
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (0.93%)
Sharp Co................................ 1,000 17,485
ENGINEERING & MANAGEMENT SERVICES (0.80%)
New World Infrastructure(a)............. 7,000 14,922
FABRICATED METAL PRODUCTS (0.81%)
NSK Ltd................................. 2,000 15,099
FINANCE (1.99%)
Nikko Securities Company Ltd............ 2,000 22,402
Orix Corp............................... 400 14,789
HOLDING & OTHER INVESTMENT OFFICES (1.01%)
Hutchison Whampoa Limited............... 3,000 18,875
INSTRUMENTS & RELATED PRODUCTS (1.01%)
KLA Instruments Corporation(a).......... 810 18,833
LEATHER & LEATHER PRODUCTS (1.08%)
Adidas AG............................... 240 20,171
LUMBER & OTHER BUILDING MATERIALS (1.27%)
Home Depot, Inc. ....................... 440 23,760
MANUFACTURING INDUSTRIES (2.72%)
Bulgari SpA............................. 2,100 33,553
Mitsubishi Heavy Industries, Ltd........ 2,000 17,357
MEDICAL INSTRUMENTS & SUPPLIES (1.27%)
Coloplast A/S-Class B................... 240 23,734
METAL CANS & SHIPPING CONTAINERS (2.02%)
Crown Cork & Seal Company, Inc.......... 840 37,800
PHARMACEUTICALS (1.36%)
Nova Nordisk A/S........................ 180 25,473
PRIMARY METAL INDUSTRIES (0.77%)
Kawasaki Steel.......................... 4,000 14,388
RADIO, TELEVISION, & COMPUTER STORES (1.47%)
Circuit City Stores, Inc................ 760 27,455
REAL ESTATE (0.80%)
Henderson Land Development
Company Ltd. ......................... 2,000 14,985
RESTAURANTS (4.15%)
Cracker Barrel Old Country
Store, Inc............................ 1,060 25,705
Lone Star Steakhouse & Saloon(a)........ 660 24,915
McDonald's Corporation.................. 580 27,115
STONE, CLAY & GLASS PRODUCTS (2.09%)
Owens-Illinois, Inc.(a)................. 2,450 39,200
</TABLE>
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
79
<PAGE> 82
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (3.58%)
Lucent Technologies, Inc................ 600 $ 22,725
Newbridge Networks Corporation(a)....... 200 13,100
Telecom Italia Mobile SpA............... 14,000 31,377
TRUCKING & WAREHOUSING (1.04%)
Nippon Express Co....................... 2,000 19,488
-----------
Total Common Stocks
(cost: $ 840,991)................................ 834,465
-----------
Total Investment Securities
(cost: $ 1,125,064)............................ $ 1,120,329
===========
SUMMARY
Investments at value.................... 59.86% $ 1,120,329
Other Assets in
Excess of Liabilities................. 40.14% 751,259
-------- -----------
Net Assets.............................. 100.00% $ 1,871,588
======== ===========
</TABLE>
INVESTMENTS BY COUNTRY
Size of investment is indicated as a percentage of total portfolio net assets.
<TABLE>
<CAPTION>
MARKET
VALUE PERCENTAGE
---------- ----------
<S> <C> <C>
Denmark.............................. $ 49,207 2.63%
Germany.............................. 102,076 5.45%
Hong Kong............................ 60,875 3.25%
Italy................................ 64,930 3.47%
Japan................................ 170,403 9.11%
United States........................ 1,424,097 76.09%
----------- ----------
$ 1,871,588 100.00%
=========== =========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
80
<PAGE> 83
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
PERIOD ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
U.S. Government Obligations 7.24%
Asset-Backed Securities 3.46%
Corporate Debt Securities 3.46%
Preferred Stocks 1.11%
Chemicals & Allied Products 3.17%
Computer & Data Processing Service 1.83%
Electronic Components & Accessories 3.39%
Finance 1.99%
Manufacturing Industries 2.72%
Metal Cans & Shipping Containers 2.02%
Restaurants 4.15%
Stone, Clay & Glass Products 2.09%
Telecommunications 3.58%
Other 59.79%
</TABLE>
The Meridian/INVESCO Global Sector Portfolio commenced operations on May 1,
1996, with the investment objective of growth of capital. The Portfolio follows
an asset allocation and sector rotation strategy which shifts between a wide
range of asset classes, and within them, sectors. Though not yet fully invested,
through June 30, 1996 the Portfolio was down (0.16%) from its inception. The
Portfolio's benchmark index, which consists of a 60% weighting in the Financial
Times World Index and a 40% weighting in the Lehman Hutton Bond Index, was up
.68% for the same period.
Meridian Investment Management Corporation and INVESCO Global Asset Management
Limited have joined together in order to implement a two-tiered management
system with a sector rotation emphasis. Both firms concentrate their efforts in
areas where they are leaders in the financial industry. Asset allocations, as
well as industry and country allocations, are made based on Meridian's
proprietary quantitative valuation models. INVESCO selects the specific
securities within each industry and country.
Meridian's strategy is "value-driven" and has its foundations based on the
research of Benjamin Graham. The company uses a modern version of Graham's
valuation model which encompasses normalized earnings, expected growth rates,
implied risk levels, and specific country interest-rate levels in order to value
the global equity markets. Through computer automation, Meridian values over
2,000 stocks and groups them by their respective countries in the foreign
markets, and by their industry classifications within the U.S. Through this
"bottom-up" approach, Meridian strives to recognize underpriced and overpriced
markets and to invest the Portfolio in only those countries and industries that
offer above average anticipated returns. Meridian uses similar quantitative
methods to value REITs, US bonds, global bonds, and gold mining stocks.
INVESCO's country and industry specialists are responsible for the selection of
individual securities within Meridian's asset, country, and industry
allocations. Cash is used as a defensive position.
The Portfolio is currently underweighted in the domestic equity market, as well
as in foreign equity markets. Meridian's valuation model indicates that the
entire US stock market is overpriced by approximately 7%. Our models indicate
that most foreign stock markets are fully priced as well. Despite these
aggregate over-valuation readings, however, we are able to find several
attractive domestic industries and foreign countries based on our valuation
models. The Portfolio has positions in the following US industries: electronics,
computers, restaurants, containers, retail specialty, and communication
equipment. In addition, the Portfolio has positions in the following countries:
Germany, Italy, Denmark, Hong Kong, and Japan. The remainder of the Portfolio
consists of US bonds (corporate and government) as well as a cash position. With
inflation under 3% and bond yields near 7%, US bonds look attractive relative to
other asset classes. The Portfolio's cash position is relatively high, but will
be reduced in the coming weeks.
By design, the Meridian/INVESCO Global Sector Portfolio has the ability to
invest in a number of asset categories. This not only increases the opportunity
for investment, but also decreases the investment risk through diversification.
With the Portfolio currently positioned defensively, and the ability to change
allocations as opportunities present themselves, the Portfolio appears
well-suited for the remainder of 1996.
<TABLE>
<S> <C>
LOGO /s/ Bryan M. Ritz
(1)A REGISTERED SERVICE ------------------------------------------------
MARK OF INVESCO PLC Bryan M. Ritz
Meridian/INVESCO Global Sector Portfolio Manager
</TABLE>
- --------------------------------------------------------------------------------
81
<PAGE> 84
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 1,125,064)............................ $ 1,120,329
Short-term securities, at amortized cost........ 0
Cash............................................ 828,399
Receivables:
Fund shares sold.............................. 0
Securities sold............................... 0
Interest...................................... 4,300
Dividends..................................... 528
Foreign receivable............................ 127
Other......................................... 0
--------------
Total assets................................ 1,953,683
--------------
LIABILITIES:
Fund shares purchased........................... 0
Securities purchased............................ 80,618
Accounts payable and accrued liabilities:
Investment advisory fees...................... 1,250
Custody fees.................................. 0
Auditing and accounting fees.................. 0
Dividends to shareholders..................... 227
Deposits for securities on loan............... 0
Other fees.................................... 0
--------------
Total liabilities........................... 82,095
--------------
Total net assets.......................... $ 1,871,588
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)....... $ 1,875
Additional paid-in capital...................... 1,877,840
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)............................... 3,914
Accumulated undistributed net realized
gain (loss) on:
Investment transactions..................... (7,335)
Foreign currency transactions............... (185)
Net unrealized appreciation (depreciation) on:
Investment securities......................... (4,735)
Foreign currency transactions................. 214
--------------
Net assets applicable to outstanding
shares of capital............................. $ 1,871,588
==============
Shares outstanding at June 30, 1996............. 187,461
==============
Net asset value per share....................... $ 9.98
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: JUNE 30, 1996*
<S> <C>
Interest........................................ $ 5,699
Dividends (Net of foreign tax of $ 90).......... 818
--------------
Total investment income................... 6,517
--------------
EXPENSES:
Investment advisory fees........................ 2,202
Printing and shareholder reports................ 0
Custody fees.................................... 3,502
Legal fees...................................... 0
Auditing and accounting fees.................... 757
Directors fees.................................. 0
Registration Fees............................... 0
Other fees...................................... 0
--------------
Total expenses.............................. 6,461
Less:
Advisory fee waiver and expense
reimbursement............................... 3,858
Fees paid indirectly.......................... 0
--------------
Net expenses.............................. 2,603
--------------
Net investment income (loss).................... 3,914
--------------
Net realized gain (loss) on:
Investment securities....................... (7,335 )
Foreign currency transactions............... (185 )
--------------
Total net realized gain (loss)............ (7,520 )
--------------
Change in unrealized appreciation
(depreciation) on:
Investment securities....................... (4,735 )
Foreign currency transactions............... 214
--------------
Total change in unrealized appreciation
(depreciation).......................... (4,521 )
--------------
Net gain (loss) on investments.............. (12,041 )
--------------
Net increase (decrease) in net assets
resulting from operations..................... $ (8,127 )
===============
</TABLE>
* The inception of this portfolio was May 1, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
82
<PAGE> 85
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1996*
<S> <C>
OPERATIONS:
Net investment income (loss)................................................................................... $ 3,914
Net realized gain (loss) on investments and foreign currency transactions...................................... (7,520 )
Change in unrealized appreciation (depreciation) on investments and foreign currency transactions.............. (4,521 )
--------------
Net increase (decrease) in net assets resulting from operations.............................................. (8,127 )
--------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.......................................................................................... 0
Net realized gains............................................................................................. 0
--------------
Total distributions.......................................................................................... 0
--------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.............................................................................. 1,918,627
Dividends and distributions reinvested......................................................................... 0
Cost of shares repurchased..................................................................................... (38,912 )
--------------
Increase (decrease) in net assets from capital shares transactions........................................... 1,879,715
--------------
Net increase (decrease) in net assets........................................................................ 1,871,588
NET ASSETS:
Beginning of period............................................................................................ 0
--------------
End of period.................................................................................................. $ 1,871,588
===============
Undistributed net investment income.......................................................................... $ 3,914
===============
SHARE ACTIVITY:
Shares outstanding - beginning of period....................................................................... 0
--------------
Shares issued.................................................................................................. 191,354
Shares issued - reinvestment of dividends and distributions.................................................... 0
Shares redeemed................................................................................................ (3,893 )
--------------
Increase (decrease) in shares outstanding...................................................................... 187,461
--------------
Shares outstanding - end of period............................................................................. 187,461
===============
</TABLE>
* The inception of this portfolio was May 1, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
83
<PAGE> 86
WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
MERIDIAN/INVESCO GLOBAL SECTOR PORTFOLIO,
FINANCIAL TIMES WORLD INDEX AND LEHMAN HUTTON BOND INDEX
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in
the portfolio since inception versus the Financial Times World Index (FT) and
the Lehman Hutton Bond Index (LH) over the same time frame.
<TABLE>
<CAPTION>
Portfolio FT Index LH Index
<S> <C> <C> <C>
Inception 5/1/96 $10,000 $10,000 $10,000
Period Ended 6/30/96 $ 9,984 $10,003 $10,166
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30
--------
1996+
--------
<S> <C>
Net asset value, beginning of period.................................. $ 10.00
Income from operations:
Net investment income (loss)...................................... .03
Net realized and unrealized
gain (loss) on investments...................................... (.05)
--------
Total income (loss) from operations............................. (.02)
--------
Distributions:
Dividends from net investment income.............................. .00
Distributions from net realized gains
on investments.................................................. .00
--------
Total distributions............................................. $ .00
--------
Net asset value, end of period........................................ 9.98
=========
Total return.......................................................... (.16)%
Ratios and supplemental data:
Net assets at end of period
(in thousands)..................................................... $ 1,872
Ratio of expenses to average net assets............................. .85%
Ratio of net investment income (loss)
to average net assets............................................. 1.55%
Ratio of commission paid to number of shares........................ 6.28%
Portfolio turnover rate............................................. 3.25%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was May 1, 1996. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
Foreign securities involve special risks described in the prospectus that should
be considered carefully before investing.
- --------------------------------------------------------------------------------
84
<PAGE> 87
WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- ------------
<S> <C> <C>
COMMON STOCKS (85.30%)
AEROSPACE (6.22%)
Boeing Company......................... 900 $ 78,413
Sundstrand Corporation................. 1,550 56,769
United Technologies Corporation........ 600 69,000
AUTOMOTIVE (3.20%)
Echlin, Inc............................ 700 26,512
General Motors Corporation............. 1,500 78,562
CHEMICALS & ALLIED PRODUCTS (11.04%)
Air Products & Chemicals, Inc.......... 1,800 103,950
Dow Chemical Company................... 600 45,600
E.I. Dupont De Nemours &
Company.............................. 1,200 94,950
IMC Global, Inc........................ 2,200 82,775
W.R. Grace & Company................... 500 35,437
COMMERCIAL BANKS (7.99%)
Bank of New York Company, Inc. ........ 1,250 64,062
Comercia, Inc.......................... 1,000 44,625
National City Corporation.............. 1,700 59,712
Norwest Corporation.................... 2,700 94,162
CONSTRUCTION (2.30%)
Foster Wheeler Corporation............. 900 40,387
J. Ray Mcdermott, S.A.................. 1,400 35,000
ELECTRICAL GOODS (0.71%)
W.W. Grainger, Inc..................... 300 23,250
ELECTRONIC COMPONENTS & ACCESSORIES (4.84%)
AMP, Inc............................... 1,050 42,131
Intel Corporation...................... 300 22,031
Texas Instruments, Inc................. 1,900 94,762
ELECTRONIC & OTHER ELECTRIC EQUIPMENT 3.95%)
Black & Decker Corporation............. 600 23,175
Emerson Electric Company............... 300 27,113
General Electric Company............... 400 34,600
Thomas & Betts Corporation............. 1,200 45,000
ENGINEERING & MANAGEMENT SERVICES (1.18%)
Halliburton Company.................... 700 38,850
FABRICATED METAL PRODUCTS (3.38%)
Cooper Industries, Inc................. 1,200 49,800
Kennametal, Inc. ...................... 1,800 61,200
FORESTRY (1.42%)
Weyerhaeuser Company................... 1,100 46,750
HEALTH SERVICES (2.11%)
Columbia/HCA Healthcare Corporation.... 1,300 69,388
INDUSTRIAL MACHINERY & EQUIPMENT (12.72%)
Case Corporation....................... 1,000 48,000
Caterpiller, Inc....................... 2,000 135,500
Deere & Company........................ 2,650 106,000
Ingersoll-Rand Company................. 1,400 61,250
York International Corporation......... 1,300 67,275
INSTRUMENTS & RELATED PRODUCTS (2.99%)
General Signal Corporation............. 1,300 49,238
Honeywell, Inc......................... 900 49,050
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
--------- -------------
<S> <C> <C>
COMMON STOCKS (CONTINUED)
INSURANCE (4.77%)
Allstate Corporation................... 900 $ 41,063
American International Group, Inc...... 400 39,450
General Re Corporation................. 500 76,125
MANAGEMENT SERVICES (0.57%)
Dun & Bradstreet Corporation........... 300 18,750
MOTOR VEHICLES, PARTS & SUPPLIES (0.74%)
Exide Corporation...................... 1,000 24,250
OIL & GAS EXTRACTION (3.87%)
Dresser Industries, Inc. .............. 1,400 41,300
ENSCO International, Inc.(a)........... 1,000 32,500
Noble Drilling Corporation(a).......... 1,300 18,038
Reading & Bates Corporation............ 1,600 35,400
PAPER & ALLIED PRODUCTS (1.97%)
Champion International
Corporation.......................... 1,300 54,275
Minnesota Mining & Manufacturing
Company.............................. 150 10,350
PETROLEUM REFINING (0.38%)
Coastal Corporation.................... 300 12,525
PRIMARY METAL INDUSTRIES (2.27%)
Alumax, Inc.(a)........................ 1,600 48,600
Reynolds Metals Company................ 500 26,063
RAILROADS (1.72%)
Burlington Northern Sante Fe........... 700 56,613
TELECOMMUNICATIONS (3.10%)
A T & T Corporation.................... 1,500 93,000
GTE Corporation........................ 200 8,950
TRANSPORTATION EQUIPMENT (0.93%)
Trinity Industries, Inc................ 900 30,600
WATER TRANSPORTATION (0.93%)
Tidewater, Inc......................... 700 30,713
-----------
Total Common Stocks
(cost: $ 2,792,885)......................................... 2,802,844
-----------
Total Investment Securities
(cost: $ 2,792,885)....................................... $ 2,802,844
===========
<CAPTION>
SUMMARY
<S> <C> <C>
Investments at value................................. 85.30%
$ 2,802,844
Other Assets in
Excess of Liabilities.............................. 14.70%
482,923
----- -----------
Net Assets.......................................... 100.00% $ 3,285,767
====== ===========
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No income dividends were paid during the preceding twelve months.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
85
<PAGE> 88
WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION
PERIOD ENDED JUNE 30, 1996
INVESTMENTS BY INDUSTRY
AT JUNE 30, 1996
Amount of investments in each category is indicated as a percentage of total
Portfolio net assets
(CHART)
Pie chart depicting industry investments as a percentage of total portfolio net
assets.
<TABLE>
<S> <C>
Aerospace 6.22%
Automotive 3.20%
Chemicals & Allied Products 11.04%
Commercial Banks 7.99%
Construction 2.30%
Electronic Components & Accessories 4.84%
Electronic & Other Electric Equipment 3.95%
Fabricated Metal Products 3.38%
Health Services 2.11%
Industrial Machinery & Equipment 12.72%
Instruments & Related Products 2.99%
Insurance 4.77%
Oil & Gas Production 3.87%
Primary Metal Industries 2.27%
Telecommunications 3.10%
Other 25.25%
</TABLE>
The Value Equity Portfolio commenced operations on May 1, 1996. The Portfolio's
investment objective is to achieve maximum, consistent total return with minimum
risk to principal by investing primarily in common stocks with above-average
statistical value which, in the sub-adviser's opinion, are in fundamentally
attractive industries, and are undervalued at the time of purchase. During the
initial two months of management ended June 30, 1996, while getting fully
invested, the Portfolio returned .77%. The Standard & Poor's Index of 500 Common
Stocks gained 2.97% during the same period.
The cornerstone of our investment process is a disciplined approach to value
recognition within industries representing long-term market leadership. We
believe that investment opportunity is created by changes in the economic,
monetary, political, and social environment. We seek to recognize change early
in asset categories, market sectors, industries and companies -- before these
changes are reflected in securities' prices. Stock selection emphasizes medium-
to large-capitalization companies representing above-average statistical value.
Investments are concentrated in those fundamentally attractive industries
identified as the beneficiaries of long-term investment trends. NWQ's value
equity discipline serves as a complimentary, risk-averse style to other more
aggressive growth managers.
Depending upon whom one asks, we have been in a bull market for stocks since
1990, 1982, or 1974. The Dow Jones Industrial Average is up about 500 points so
far in 1996. In 1974 the Average was at 580. The extraordinary returns on
equities since 1974 has raised the question: Are stocks overpriced?
On balance, we find that the overall market is somewhat expensive but not
excessively overpriced, and realize that overvaluation can persist for a long
time. The old adage that it is not a stock market but a market of stocks should
be recalled, given today's generally high valuations. Investors need to focus on
those areas of the market where prices are still reasonable based on traditional
measures.
The Portfolio's stock holdings are concentrated in the industrial,
manufacturing, technology and financial sectors where price-to-earnings ratios
are still 10-13 times earnings and where the long-term profit outlook remains
favorable. We believe investments in these areas should carry more opportunity
during the current economic expansion and far less risk in any market correction
than stocks selling at much higher multiples in other sectors of the market.
<TABLE>
<S> <C> <C>
/s/ Edward C. Friedel
------------------------------
[NWQ LOGO] Edward C. Friedel
Value Equity Portfolio Manager
</TABLE>
- -------------------------------------------------------------------------------
86
<PAGE> 89
WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
ASSETS: JUNE 30, 1996
<S> <C>
Investments in securities, at market value
(cost $ 2,792,885)............................ $ 2,802,844
Short-term securities, at amortized cost........ 0
Cash............................................ 1,030,513
Receivables:
Fund shares sold.............................. 0
Securities sold............................... 0
Interest...................................... 1,939
Dividends..................................... 2,671
Other......................................... 0
--------------
Total assets................................ 3,837,967
--------------
LIABILITIES:
Fund shares purchased........................... 0
Securities purchased............................ 550,630
Accounts payable and accrued liabilities:
Investment advisory fees...................... 1,256
Custody fees.................................. 0
Auditing and accounting fees.................. 0
Dividends to shareholders..................... 0
Deposits for securities on loan............... 0
Other fees.................................... 314
--------------
Total liabilities........................... 552,200
--------------
Total net assets.......................... $ 3,285,767
==============
NET ASSETS:
Capital stock
($ .01 par value 75,000,000 authorized)....... $ 3,263
Additional paid-in capital...................... 3,267,280
Accumulated undistributed income:
Accumulated undistributed net investment
income (loss)............................... 5,265
Accumulated undistributed net realized
gain (loss) on:
Investment transactions..................... 0
Net unrealized appreciation (depreciation) on:
Investment securities......................... 9,959
--------------
Net assets applicable to outstanding
shares of capital............................. $ 3,285,767
==============
Shares outstanding at June 30, 1996............. 326,298
==============
Net asset value per share....................... $ 10.07
==============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
PERIOD ENDED
INVESTMENT INCOME: JUNE 30, 1996*
<S> <C>
Interest........................................ $ 3,300
Dividends....................................... 4,259
--------------
Total investment income................... 7,559
--------------
EXPENSES:
Investment advisory fees........................ 1,836
Printing and shareholder reports................ 0
Custody fees.................................... 3,633
Legal fees...................................... 0
Auditing and accounting fees.................... 757
Directors fees.................................. 0
Registration fees............................... 0
Other fees...................................... 0
--------------
Total expenses.............................. 6,226
Less:
Advisory fee waiver and expense
reimbursement............................... 3,930
Fees paid indirectly.......................... 2
--------------
Net expenses.............................. 2,294
--------------
Net investment income (loss).................... 5,265
--------------
Net realized gain (loss) on:
Investment securities....................... 0
Change in unrealized appreciation
(depreciation) on:
Investment securities....................... 9,959
--------------
Net gain (loss) on investments.............. 9,959
--------------
Net increase (decrease) in net assets
resulting from operations..................... $ 15,224
===============
</TABLE>
* The inception of this portfolio was May 1, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
87
<PAGE> 90
WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1996*
<S> <C>
OPERATIONS:
Net investment income (loss)................................................................................... $ 5,265
Net realized gain (loss) on investments........................................................................ 0
Change in unrealized appreciation (depreciation) on investments................................................ 9,959
--------------
Net increase (decrease) in net assets resulting from operations.............................................. 15,224
--------------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income.......................................................................................... 0
Net realized gains............................................................................................. 0
--------------
Total distributions.......................................................................................... 0
--------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares.............................................................................. 3,271,015
Dividends and distributions reinvested......................................................................... 0
Cost of shares repurchased..................................................................................... (472 )
--------------
Increase (decrease) in net assets from capital shares transactions........................................... 3,270,543
--------------
Net increase (decrease) in net assets........................................................................ 3,285,767
NET ASSETS:
Beginning of period............................................................................................ 0
--------------
End of period.................................................................................................. $ 3,285,767
===============
Undistributed net investment income.......................................................................... $ 5,265
===============
SHARE ACTIVITY:
Shares outstanding - beginning of period....................................................................... 0
--------------
Shares issued.................................................................................................. 326,345
Shares issued - reinvestment of dividends and distributions.................................................... 0
Shares redeemed................................................................................................ (47 )
--------------
Increase (decrease) in shares outstanding...................................................................... 326,298
--------------
Shares outstanding - end of period............................................................................. 326,298
===============
</TABLE>
* The inception of this portfolio was May 1, 1996.
The notes to the financial statements are an integral part of this report.
- --------------------------------------------------------------------------------
88
<PAGE> 91
WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO
(UNAUDITED)
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
VALUE EQUITY PORTFOLIO AND
THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
(CHART)
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Standard & Poor's Index of 500 Common
Stocks (S&P) over the same time frame.
<TABLE>
<CAPTION>
Portfolio S&P Index
<S> <C> <C>
Inception 5/1/96 $10,000 $10,000
Period Ended 6/30/96 $10,077 $10,297
</TABLE>
FINANCIAL HIGHLIGHTS*
FOR THE PERIOD ENDED
<TABLE>
<CAPTION>
JUNE 30
--------
1996+
--------
<S> <C>
Net asset value, beginning of period................... $ 10.00
Income from operations:
Net investment income (loss)....................... .03
Net realized and unrealized
gain (loss) on investments....................... .04
-------
Total income (loss) from operations.............. .07
-------
Distributions:
Dividends from net investment income............... .00
Distributions from net realized gains
on investments................................... .00
-------
Total distributions.............................. .00
-------
Net asset value, end of period......................... $ 10.07
=======
Total return........................................... .77%
Ratios and supplemental data:
Net assets at end of period
(in thousands)...................................... $ 3,286
Ratio of expenses to average net assets.............. .52%
Ratio of net investment income (loss)
to average net assets.............................. 1.32%
Ratio of commission paid to number of shares......... 8.00%
Portfolio turnover rate.............................. 0.00%
</TABLE>
* The above table illustrates the change for a share outstanding computed using
average shares outstanding throughout each period. See Note 6.
+ The inception of this portfolio was May 1, 1996. The total return is not
annualized.
The notes to the financial statements are an integral part of this report.
This material must be preceded or accompanied by the Fund's current prospectus.
- --------------------------------------------------------------------------------
89
<PAGE> 92
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
JUNE 30, 1996
NOTE 1 - ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Fund, Inc. (the "Fund") is a diversified, open-end,
investment management company registered under the Investment Company Act of
1940, as amended. The Fund was incorporated on August 21, 1985 as a Maryland
corporation and commenced operations with three Portfolios on October 2, 1986:
Money Market, Bond, and Growth (each with different investment objectives). From
inception of the Fund until June 30, 1992, shares were sold exclusively to the
WRL Series Life Account (the "Life Account") and the WRL Series Annuity Account
(the "Annuity Account"), collectively called the Separate Accounts of Western
Reserve Life Assurance Co. of Ohio ("WRL"), to fund benefits under variable
universal life insurance policies and variable annuity contracts issued by WRL.
Under an amendment dated September 19, 1994 to the Participation Agreement dated
July 1, 1992, the Fund's Board of Directors authorized sales of its shares of
certain Portfolios to the separate accounts of life insurers affiliated with
WRL.
Since our initial three Portfolio offerings, additional Portfolios have
been added.
<TABLE>
<CAPTION>
PORTFOLIO INCEPTION
- --------------------------------- -----------------
<S> <C>
Short-to-Intermediate Government December 3, 1992
Global December 3, 1992
Equity-Income March 1, 1993
Emerging Growth March 1, 1993
Aggressive Growth March 1, 1994
Balanced March 1, 1994
Utility March 1, 1994
Tactical Asset Allocation January 3, 1995
C.A.S.E. Growth May 1, 1995
Meridian/INVESCO Global Sector May 1, 1996
Value Equity May 1, 1996
</TABLE>
On May 1, 1996, WRL supplied seed capital as follows:
<TABLE>
<CAPTION>
PORTFOLIO CONTRIBUTION
- --------------------------------------- ------------
<S> <C>
Meridian/INVESCO Global Sector $ 1,000,000
Value Equity 500,000
</TABLE>
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS
The Board of Directors has determined that the most appropriate method for
valuing the securities of the Money Market Portfolio is the amortized cost
method. Under this method, the net asset value of Money Market Portfolio
shares is expected to remain at a constant $1.00 per share.
Securities held by the remaining Portfolios are valued at market value,
except for short-term debt securities. Short-term debt securities maturing
in 60 days or less are valued on the amortized cost basis, which
approximates market value. Stocks are valued at the latest sale price on the
last business day of the fiscal period as reported by the principal
securities exchange on which the issue is traded or, if no sale is reported
for a stock, the latest bid price is used. Bonds are valued using prices
quoted by a major dealer in bonds which offers a pricing service. Certain
pricing methodologies, such as matrix pricing of bonds, may involve the use
of estimates and actual sales prices may differ. Securities for which
quotations may not be readily available are valued as determined in good
faith in accordance with procedures established by and under the general
supervision of the Fund's Board of Directors.
The value of foreign securities are translated into U.S. dollars using spot
foreign exchange rates.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on the trade date. Security gains and
losses are calculated on the first-in first-out basis for both tax and
financial reporting purposes. Dividend income is recorded on the ex-dividend
date, and interest income, including amortization of bond premium and
accretion of discount, is accrued daily. Dividend income on foreign
securities is recorded net of foreign tax withholdings.
- --------------------------------------------------------------------------------
90
<PAGE> 93
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
The accounting records of the Fund are maintained in U.S. dollars. For
transactions denominated in a currency other than the U.S. dollar, purchases
and sales of securities, income received, and expenses paid are translated
into U.S. dollars at the foreign exchange spot rate on the date the
transaction is recorded. Currency gain and loss is also calculated on
payables and receivables that are denominated in foreign currencies. The
payables and receivables are generally related to security transactions and
income.
The unrealized gain or loss on forward foreign currency contracts is due to
the difference between the foreign exchange contract rate and the foreign
exchange forward rate applicable to that contract at the end of the period.
This gain or loss becomes realized when the contract is closed or settled.
Futures contracts and options are valued based upon daily settlement prices
with the fluctuations in value recorded as unrealized gains and losses.
These gains and losses become realized when the position is closed. The
risks associated with the use of options and futures contracts involve the
possibilities of an illiquid market and an imperfect correlation between the
value of the instrument and the underlying security.
C. SECURITIES LENDING
At June 30, 1996, securities with a market value of $ 242,067,610 had been
loaned under agreements whereby the Fund received cash collateral in the
amount of $ 247,052,458. The Fund derives income from its securities lending
activities. During the period ended June 30, 1996, the following amounts of
income, net of related expenses were resulted from the securities lending
activities:
<TABLE>
<CAPTION>
PORTFOLIO
--------------------------------------
<S> <C>
Bond $ 1,415
Growth 131,756
Short-to-Intermediate Government 90
Global 41,456
Equity-Income 3,935
Emerging Growth 26,327
Aggressive Growth 7,847
Balanced 400
Utility 752
<CAPTION>
PORTFOLIO
--------------------------------------
<S> <C>
Tactical Asset Allocation $ 1,010
C.A.S.E. Growth 0
Meridian/Invesco Global Sector 0
Value Equity 0
</TABLE>
D. FEDERAL INCOME TAXES
It is the Fund's policy to distribute substantially all of its taxable
income and capital gains to its shareholders and otherwise qualify as a
regulated investment company under the Internal Revenue Code. Pursuant to
Code Section 4982(f), regulated investment companies serving as funding
vehicles for life insurance company separate accounts are not subject to
excise tax distribution requirements. Accordingly, no provisions for federal
income taxes has been made.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for such items as wash sales, foreign currency
transactions, net operating losses and capital loss carryforwards.
E. DIVIDENDS AND DISTRIBUTIONS
Dividends of the Fund's Money Market Portfolio are declared daily and
reinvested monthly. Dividends of the remaining Portfolios are declared and
reinvested semi-annually, while capital gain distributions are declared and
reinvested annually. Dividends and distributions of the Fund are generally
paid to and reinvested by the Separate Accounts on the next business day
after declaration.
F. ORGANIZATION COSTS
All costs incurred in connection with the formation of the Fund and its
Portfolios were paid by WRL.
- --------------------------------------------------------------------------------
91
<PAGE> 94
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 2 - INVESTMENT ADVISORY AND
TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY
The Fund has entered into annually renewable investment advisory agreements
for each Portfolio with WRL as investment adviser. The Fund pays to WRL, and
charges to each respective Portfolio, advisory fees each month at the
following annual rate expressed as a percentage of the average daily net
assets of the respective Portfolio:
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
----------------------------- -----------------
<S> <C>
Money Market .40%
Bond .50%
Growth .80%
Short-to-Intermediate
Government .60%
Global .80%
Equity-Income .80%
Emerging Growth .80%
Aggressive Growth .80%
Balanced .80%
Utility .75%
Tactical Asset Allocation .80%
C.A.S.E. Growth .80%
Meridian/INVESCO Global
Sector 1.10%
Value Equity .80%
</TABLE>
WRL has entered into a sub-advisory agreement with various management
companies. Pursuant to each agreement, fifty percent of the advisory fee
paid to WRL is due the respective management company, for the following
Portfolios:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT MANAGER
-------------------------------------------------
<S> <C>
Money Market J.P. Morgan Investment
Management Inc.
Bond Janus Capital Corporation
("JCC")
Growth JCC
Global JCC
Equity-Income Luther King Capital
Management Corp.
Aggressive Growth Fred Alger Management, Inc.
C.A.S.E. Growth C.A.S.E. Management, Inc.
</TABLE>
Pursuant to other agreements, fifty percent of the advisory fee paid to WRL
less fifty percent of any expense reimbursement is due the respective
management company:
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT MANAGER
------------------------------------------------
<S> <C>
Short-to-Intermediate AEGON USA Investment
Government Management, Inc.
("AEGON Mgmt.")
Balanced AEGON Mgmt.
Emerging Growth Van Kampen American
Capital Asset
Management, Inc.
Tactical Asset Dean Investment
Allocation Associates
Value Equity NWQ Investment
Management, Inc.
</TABLE>
Pursuant to the Utility Portfolio agreement, 0.50% of the first $30 million
of average daily net assets, 0.35% of the next $20 million of average daily
net assets and 0.25% of average daily net assets in excess of $50 million,
is payable to Federated Investment Counseling.
Pursuant to the Meridian/INVESCO Global Sector Portfolio agreement, Meridian
Investment Management Corporation receives monthly compensation from the
Investment Adviser, as a percentage of the Portfolio's average daily net
assets, at an annual rate of 0.30% of the first $100 million of assets and
0.35% of assets in excess of $100 million. For its services, INVESCO Global
Asset Management Limited receives monthly compensation from the Investment
Adviser, as a percentage of the Port folio's average daily net assets, at an
annual rate of 0.40% of the first $100 million of assets and 0.35% of assets
in excess of $100 million.
- --------------------------------------------------------------------------------
92
<PAGE> 95
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 2 (CONTINUED)
WRL currently voluntarily waives its advisory fees to the extent a
Portfolio's normal operating expenses exceeds the percentage of net assets
of the Portfolio as listed below:
<TABLE>
<CAPTION>
PORTFOLIO PERCENT OF ASSETS
----------------------------- -----------------
<S> <C>
Money Market .70%
Bond .70%
Growth 1.00%
Short-to-Intermediate
Government 1.00%
Global 1.00%
Equity-Income 1.00%
Emerging Growth 1.00%
Aggressive Growth 1.00%
Balanced 1.00%
Utility 1.00%
Tactical Asset Allocation 1.00%
C.A.S.E. Growth 1.00%
Value Equity 1.00%
</TABLE>
The Portfolios are charged for expenses that specifically relate to their
individual operations. All other operating expenses of the Fund that are not
attributable to a specific portfolio are allocated based upon the
proportionate number of policy and contract owners of the underlying
sub-accounts. WRL directly incurs and pays these operating expenses relating
to the Fund, which subsequently reimburses WRL. All normal operating
expenses that exceed the established expense limit set forth above will be
borne by WRL.
B. AFFILIATES
WRL and AEGON Mgmt. are indirect wholly-owned subsidiaries of AEGON USA,
Inc., which is an indirect wholly-owned subsidiary of AEGON nv, a
Netherlands corporation.
C. OTHER MATTERS
Section 270.30d-1 under the Securities and Exchange Act of 1940, titled
"Reports to Stockholders of Management Companies," requires regulated
investment companies to report on all subject matter put to a vote of the
shareholders and provide final results. In adherence to this amendment, WRL
solicited a vote by the policyholders for a new sub-advisory agreement on
the Money Market Portfolio between WRL and J.P. Morgan Investment Management
Inc. At a special shareholder/policyholders meeting on February 21, 1996,
the resolution was adopted, 91% For, 6% Against, and 3% Abstain.
- --------------------------------------------------------------------------------
93
<PAGE> 96
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 3 - SECURITY TRANSACTIONS
Securities transactions are summarized as follows:
<TABLE>
<CAPTION>
SHORT-TO-
INTERMEDIATE
MONEY MARKET BOND GROWTH GOVERNMENT
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
For the six months ended June 30, 1996:
Purchases of securities:
Long-term excluding U.S. Government....... $ 0 $ 24,587,216 $ 269,041,041 $ 0
U.S. Government securities................ 495,641,924 88,364,695 532,272,557 16,055,827
Proceeds from maturities and sales of
securities:
Long-term excluding U.S. Government....... 0 30,680,420 196,814,963 1,195,323
U.S. Government securities................ 467,220,825 84,618,208 457,545,531 13,966,277
</TABLE>
<TABLE>
<CAPTION>
EQUITY- EMERGING AGGRESSIVE
GLOBAL INCOME GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
For the six months ended June 30, 1996:
Purchases of securities:
Long-term excluding U.S. Government....... $262,848,007 $ 87,887,520 $ 159,977,619 $104,413,377
U.S. Government securities................ 32,149,752 644,947 2,424,994,349 0
Proceeds from maturities and sales of
securities:
Long-term excluding U.S. Government....... 161,989,367 45,024,095 127,132,288 83,330,537
U.S. Government securities................ 40,791,868 7,000,000 2,419,948,324 0
</TABLE>
<TABLE>
<CAPTION>
TACTICAL
ASSET C.A.S.E.
BALANCED UTILITY ALLOCATION GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ------------ -------------- ------------
<S> <C> <C> <C> <C>
For the six months ended June 30, 1996:
Purchases of securities:
Long-term excluding U.S. Government....... $12,023,008 $ 17,026,422 $ 60,087,448 $ 5,691,483
U.S. Government securities................ 10,586,928 0 11,446,778 0
Proceeds from maturities and sales of
securities:
Long-term excluding U.S. Government....... 10,894,816 11,247,480 22,970,172 3,189,262
U.S. Government securities................ 5,386,525 0 7,490,703 0
</TABLE>
<TABLE>
<CAPTION>
MERIDIAN/
INVESCO VALUE
GLOBAL SECTOR EQUITY
PORTFOLIO* PORTFOLIO*
-------------- ------------
<S> <C> <C>
For the period ended June 30, 1996:
Purchases of securities:
Long-term excluding U.S. Government..................................... $ 1,030,234 $ 2,792,885
U.S. Government securities.............................................. 135,691 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government..................................... 33,625 0
U.S. Government securities.............................................. 0 0
</TABLE>
* The inception of these portfolios was May 1, 1996.
- --------------------------------------------------------------------------------
94
<PAGE> 97
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 4 - FEDERAL INCOME TAX MATTERS
The income, expenses, gains and losses on security transactions attributed
to each Portfolio for accounting purposes are also attributed to that Portfolio
for federal income tax purposes. Gains and losses on forward currency contracts,
if applicable, are treated as ordinary income for federal income tax purposes
pursuant to Section 988 of the Internal Revenue Code.
Each Portfolio has and will continue to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies, and
accordingly, has made or intends to make sufficient distributions of net
investment income and net realized gains, if any, to relieve it from all federal
and state income taxes and federal excise taxes.
The net capital loss carryforwards noted below as of December 31, 1995, if
applicable, are available to offset future realized capital gains through the
periods listed. Each portfolio will elect to treat the net capital losses
incurred in the two month period ended December 31, 1995, (Post-October Losses),
if applicable, as having been incurred in the following fiscal year. The
aggregate cost of investments and composition of unrealized appreciation and
depreciation for federal income tax purposes as of June 30, 1996 are as follows:
<TABLE>
<CAPTION>
PRIOR YEAR
POST-OCTOBER DECEMBER 31, 1995 NET CAPITAL LOSS
LOSSES NET CAPITAL LOSS CARRYFORWARD
PORTFOLIO RECOGNIZED CARRYFORWARD AVAILABLE THROUGH:
- --------------------------------------------------- ------------ ------------------ ------------------
<S> <C> <C> <C>
Money Market....................................... $ n/a $ n/a n/a
Bond............................................... 0 (7,509,065) December 31, 2002
Growth............................................. 233,731 0 n/a
$ 171,939 through
Short-to-Intermediate Government................... 9,904 (419,679) December 31, 2002
$ 247,740 through
December 31, 2003
Global............................................. 5,806 0 n/a
Equity-Income...................................... 0 0 n/a
Emerging Growth.................................... 0 0 n/a
Aggressive Growth.................................. 4,016,717 0 n/a
Balanced........................................... 472,914 (241,574) December 31, 2002
Utility............................................ 0 0 n/a
Tactical Asset Allocation.......................... 0 0 n/a
C.A.S.E. Growth.................................... 0 0 n/a
Meridian/INVESCO Global Sector..................... 0 0 n/a
Value Equity....................................... 0 0 n/a
</TABLE>
<TABLE>
<CAPTION>
NET UNREALIZED
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST BASIS APPRECIATION DEPRECIATION (DEPRECIATION)
- ----------------------------------------------- --------------- ------------- ------------ --------------
<S> <C> <C> <C> <C>
Money Market................................... $ 97,798,060 $ n/a $ n/a $ n/a
Bond........................................... 89,694,029 1,917,063 870,112 1,046,951
Growth......................................... 1,011,255,867 435,412,031 9,294,890 426,117,141
Short-to-Intermediate Government............... 25,683,613 116,604 249,984 (133,380 )
Global......................................... 359,613,553 86,721,893 3,806,993 82,914,900
Equity-Income.................................. 265,573,402 41,170,102 3,677,546 37,492,556
Emerging Growth................................ 274,497,180 118,509,045 4,409,704 114,099,341
Aggressive Growth.............................. 165,398,990 29,641,121 4,713,050 24,928,071
Balanced....................................... 37,729,283 3,096,587 336,655 2,759,932
Utility........................................ 27,408,277 2,958,365 326,460 2,631,905
Tactical Asset Allocation...................... 174,935,864 11,588,379 3,296,015 8,292,364
C.A.S.E. Growth................................ 5,049,827 300,946 241,716 59,230
Meridian/INVESCO Global Sector................. 1,125,064 26,758 31,493 (4,735 )
Value Equity................................... 2,792,885 52,856 42,897 9,959
</TABLE>
- --------------------------------------------------------------------------------
95
<PAGE> 98
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 5 - COMMITMENTS
The Fund is authorized to enter into foreign exchange contracts for the
purpose of hedging against foreign exchange risk arising from the Fund's
investment in securities denominated in foreign currencies. All foreign exchange
contracts are marked-to-market daily at the applicable foreign exchange rates
and the resulting unrealized gains or losses recorded in the Fund's financial
statements. These gains and losses are realized when the contract is
extinguished either by entering into a closing transaction or by delivery of the
currency. The risks that may arise from these contracts are the potential
inability of the counterparties to meet the terms of their contracts, and from
unanticipated movements in the currency's value relative to the U.S. dollar.
The Growth and Global Portfolios entered into forward foreign currency
contracts, which obligate the Fund to deliver currencies at specified future
dates. The open contracts at June 30, 1996 are as follows:
<TABLE>
<CAPTION>
JUNE 30, 1996 NET UNREALIZED
VALUE IN APPRECIATION
CURRENCY BOUGHT (SOLD) SETTLEMENT DATE U.S. DOLLARS (DEPRECIATION)
- ------------------------------------ -------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Growth Portfolio
German Deutschemark............... (19,713,000) 08/22/96 $ 12,997,640 $ 675,802
German Deutschemark............... (22,000,000) 07/11/96 14,467,647 467,453
German Deutschemark............... (8,500,000) 07/25/96 5,594,391 36,985
------------- --------------
Total Growth Portfolio.... $ 33,059,678 $ 1,180,240
============== ==============
Global Portfolio
Austrian Schilling................ 9,452,472 07/08/96 $ 882,271 $ 0
Swiss Franc....................... (10,000,000) 10/01/96 8,056,589 455,135
Swiss Franc....................... (5,854,000) 11/12/96 4,734,270 68,027
German Deutschemark............... 90,889 07/05/96 59,729 0
German Deutschemark............... (26,372,000) 07/25/96 17,357,092 588,537
German Deutschemark............... (14,000,000) 07/17/96 9,209,943 110,342
German Deutschemark............... 507,686 07/02/96 333,687 1,552
German Deutschemark............... (1,797,152) 07/01/96 1,181,147 723
Spanish Peseta.................... (111,890,178) 07/01/96 872,769 (6,478)
Finish Markka..................... 945,226 07/03/96 203,934 0
Finish Markka..................... (13,400,000) 07/25/96 2,890,822 76,767
Finish Markka..................... 1,135,027 07/01/96 244,542 (753)
Finish Markka..................... 1,890,452 07/02/96 407,321 (1,974)
French Franc...................... 1,696,494 07/31/96 329,724 0
French Franc...................... (15,425,000) 09/12/96 3,007,440 65,943
British Pound..................... 282,790 07/05/96 439,302 0
British Pound..................... 76,908 07/05/96 119,472 0
British Pound..................... (1,580,000) 07/25/96 2,455,067 (76,851)
British Pound..................... (2,200,000) 08/22/96 3,417,902 (45,324)
British Pound..................... (6,500,000) 11/19/96 10,099,360 (301,585)
British Pound..................... 66,753 07/01/96 103,745 856
British Pound..................... 128,433 07/01/96 199,605 1,647
British Pound..................... 170,481 07/02/96 264,952 2,475
British Pound..................... 98,821 07/03/96 153,581 1,351
British Pound..................... 211,793 07/03/96 329,154 2,896
British Pound..................... 43,878 07/05/96 68,191 248
British Pound..................... 141,018 07/05/96 219,157 798
Hong Kong Dollar.................. 591,944 07/02/96 76,467 0
Hong Kong Dollar.................. (4,967,262) 07/01/96 641,725 (18)
</TABLE>
- --------------------------------------------------------------------------------
96
<PAGE> 99
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 5 - COMMITMENTS (CONTINUED)
<TABLE>
<CAPTION>
JUNE 30, 1996 NET UNREALIZED
VALUE IN APPRECIATION
CURRENCY BOUGHT (SOLD) SETTLEMENT DATE U.S. DOLLARS (DEPRECIATION)
- ------------------------------------ -------------- --------------- ------------- --------------
<S> <C> <C> <C> <C>
Indonesian Rupiah................. (76,237,700) 07/02/96 $ 32,762 $ (60)
Italian Lira...................... (199,673,999) 07/01/96 130,279 (647)
Italian Lira...................... 91,754,134 07/01/96 59,866 297
Italian Lira...................... (254,799,215) 07/02/96 166,230 (517)
Japanese Yen...................... (1,300,000,000) 08/08/96 11,909,633 585,080
Japanese Yen...................... (445,000,000) 08/22/96 4,085,317 243,476
Japanese Yen...................... (650,000,000) 09/17/96 5,988,355 340,759
Japanese Yen...................... (900,000,000) 09/17/96 8,291,568 475,235
Japanese Yen...................... (1,000,000,000) 10/01/96 9,230,651 342,941
Japanese Yen...................... 200,000,000 10/01/96 1,846,130 (38,227)
Japanese Yen...................... (200,000,000) 12/11/96 1,865,763 6,020
Japanese Yen...................... (68,982,034) 07/02/96 628,557 2,771
Norwegian Krone................... 655,044 07/03/96 100,748 0
Norwegian Krone................... (2,317,826) 07/01/96 356,901 (1,449)
Norwegian Krone................... (2,756,885) 07/02/96 424,518 (35)
Philippine Peso................... 1,663,662 07/05/96 63,486 0
Philippine Peso................... 1,215,123 07/01/96 46,467 36
Philippine Peso................... 10,317,171 07/01/96 394,538 302
Philippine Peso................... 503,784 07/02/96 19,265 12
Philippine Peso................... 2,258,352 07/03/96 86,361 99
Swedish Krona..................... 435,307 07/03/96 65,606 0
Swedish Krona..................... 1,295,127 07/03/96 195,192 0
Swedish Krona..................... 140,996 07/03/96 21,250 0
Swedish Krona..................... 802,261 07/03/96 120,911 0
Swedish Krona..................... (99,000,000) 07/25/96 14,894,184 (630,082)
Swedish Krona..................... 447,596 07/01/96 67,356 (433)
Swedish Krona..................... 844,071 07/01/96 127,020 (816)
Swedish Krona..................... (9,340,017) 07/02/96 1,405,511 5,453
Swedish Krona..................... 353,868 07/02/96 53,251 (207)
Swedish Krona..................... 715,958 07/02/96 107,739 (418)
Swedish Krona..................... 15,065,582 07/02/96 2,267,110 (8,796)
------------- --------------
Total Global Portfolio.... $ 133,411,485 $ 2,265,108
============== ==============
</TABLE>
The Global Portfolio entered into S&P 500 futures contracts, which obligate
the Fund to settle variation margins in cash daily. The open contracts at June
30, 1996 are as follows:
<TABLE>
<CAPTION>
JUNE 30, 1996 NET UNREALIZED
VALUE IN APPRECIATION
CONTRACT BOUGHT SETTLEMENT DATE U.S. DOLLARS (DEPRECIATION)
- ------------------------------------ -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
S&P 500............................. 591 09/20/96 $ 1,163,751 $ (407,225)
-------------- --------------
Total Global Portfolio.... $ 1,163,751 $ (407,225)
============== ==============
</TABLE>
- --------------------------------------------------------------------------------
97
<PAGE> 100
WRL SERIES FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 6 - FINANCIAL HIGHLIGHTS
The Financial Highlights for each Portfolio (except the Money Market
Portfolio) contains a chart (the "comparison chart") setting forth Average
Annual Total Return ("total return") and a comparison of the change in value of
a $10,000 investment in that Portfolio to one or more broad based market
indices. In the comparison chart and the total return set forth in "Financial
Highlights", the total return and the change in value of the portfolio reflect
the advisory fee and all other portfolio expenses and include reinvestment of
dividends and capital gains; they do not reflect the charges against the
corresponding sub-accounts or the charges and deductions under the applicable
Policies or Annuity Contracts. Where a Portfolio's period from inception is less
than one year, the total return shown is not annualized. The indices referred to
in the comparison charts are unmanaged and are used as a general measure of
market performance; with the exception of the Value Line (Arithmetic) Index,
they assume reinvestment of dividends and capital gains and all indices do not
include any management or investment expenses.
The ratio of expenses to average net assets in the Financial Highlights is
net of advisory fee waiver (see Note 2). The June 30, 1996 ratio is annualized,
along with the ratio of net investment income to average net assets. Without the
advisory fee waived by WRL the ratio for each period presented would be as
follows:
<TABLE>
<CAPTION>
JUNE 30 DECEMBER 31
------- ----------------------------------------------------------------------------
PORTFOLIO 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---------------------------- ------- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Money Market................ * * * * * * * 0.84% 1.16% 1.63% 6.33%
Bond........................ * * * * * 0.82% * 0.82% 1.07% 2.12% 6.37%
Growth...................... * * * * * * * 1.13% 1.49% 1.90% 6.76%
Short-to-Intermediate
Government................ * * * 1.02% 1.41% ** ** ** ** ** **
Global...................... * * * * * ** ** ** ** ** **
Equity-Income............... * * * 1.12% ** ** ** ** ** ** **
Emerging Growth............. * * * 1.16% ** ** ** ** ** ** **
Aggressive Growth........... * * 1.18% ** ** ** ** ** ** ** **
Balanced.................... * * 1.34% ** ** ** ** ** ** ** **
Utility..................... * 1.08% 1.90% ** ** ** ** ** ** ** **
Tactical Asset Allocation... * * ** ** ** ** ** ** ** ** **
C.A.S.E. Growth............. 1.65% 4.15% ** ** ** ** ** ** ** ** **
Meridian/INVESCO Global
Sector.................... 2.55% ** ** ** ** ** ** ** ** ** **
Value Equity................ 1.56% ** ** ** ** ** ** ** ** ** **
</TABLE>
* No waiver - portfolio did not exceed expense limitations.
** Portfolio was not in existence during this period.
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98
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<PAGE> 102
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<PAGE> 103
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W R L S E R I E S F U N D , I N C .
- --------------------------------------------------------------------------------
OFFICE OF THE WRL SERIES FUND
201 Highland Avenue
Largo, FL 33770-2597
1-800-851-9777
Ext. 6538
---------------------------------------------
DISTRIBUTOR:
InterSecurities, Inc.
201 Highland Avenue
Largo, FL 33770-2597
---------------------------------------------
FUND CUSTODIAN:
Investors Bank & Trust Company
89 South Street
Boston, MA 02111
---------------------------------------------
INVESTMENT ADVISER:
Western Reserve Life Assurance Co. of Ohio
201 Highland Avenue
Largo, FL 33770-2957
---------------------------------------------
SUB-ADVISERS:
<TABLE>
<S> <C>
Janus Capital Corporation AEGON USA
100 Fillmore Street Investment Management, Inc.
Denver, CO 80206 4333 Edgewood Road, N.E.
Luther King Capital Cedar Rapids, IA 52449
Management Corporation Van Kampen American Capital
301 Commerce Street Asset Management, Inc.
Fort Worth, TX 76102 One Parkview Plaza
Federated Investment Counseling Oakbrook Terrace, IL 60181
Federated Investors Tower Fred Alger Management, Inc.
Pittsburgh, PA 15222-3779 75 Maiden Lane
NWQ Investment New York, NY 10038
Management Company, Inc. J.P. Morgan Investment
655 South Hope Street Management Inc.
11th Floor 522 Fifth Avenue
Los Angeles, CA 90017 New York, NY 10036
Meridian Investment Management INVESCO Global Asset
Corporation Management Limited
12835 East Arapahoe Road Rosebank, 12 Bermudiana Road
Tower II, 7th Floor Hamilton, Bermuda HM11
Englewood, CO 80112
C.A.S.E. Management, Inc. Dean Investment Associates
2255 Glades Rd. 2480 Kettering Tower
Suite 221-A Dayton, OH 45423-2480
Boca Raton, FL 33431
</TABLE>
---------------------------------------------
INDEPENDENT ACCOUNTANTS:
Price Waterhouse LLP
1055 Broadway
Kansas City, MO 64105
<PAGE> 104
THIS MATERIAL IS FOR CONTRACT AND POLICY
HOLDER'S REPORTING PURPOSES ONLY AND SHALL NOT
BE USED IN CONNECTION WITH A SOLICITATION,
OFFER OR ANY PROPOSED SALE OR PURCHASE
OF SECURITIES. THIS MATERIAL MUST BE
PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
- --------------------------------------------------------------------------------
Investment Adviser
Western Reserve Life Assurance Co. of Ohio
Distributor: InterSecurities, Inc.
201 Highland Avenue - Largo, FL 33770-2597
August 1996
ACC00001-S (8/96)
