WRL SERIES FUND, INC.
ANNUAL REPORT DECEMBER 31,1998
February 1999
ACC00001-2/99
<PAGE>
FELLOW CONTRACT AND POLICY OWNERS:
LIVING WITH RISK
[PHOTO OMITTED]
Shown is John R. Kenney, Chairman of the Board.
Supported by a remarkably small group of old names and propelled by a broader
group of remarkable new ones, the Standard and Poor's Index of 500 Common Stock
just completed its record-setting fourth straight year of double-digit gains.
Those double-digit gains, however, fail to convey the remarkable amount of
volatility contained within them. Those double-digit gains obscure, in fact, the
remarkably high drama that was investing in 1998.
It was a year in which we worried about every imaginable trouble-from Asia to
Latin America, from inflation to impeachment, from hedge funds to foreign
currencies. It was a year in which stock prices surged, swooned, then soared
once again, with more sharp, stomach-turning, multiday jumps and dives than
perhaps any this century. It was a year in which different categories of funds
delivered dramatically different results, leaving some investors exultant and
others angry. It was a year in which a good memory and a sound investment
background were often disadvantages in terms of performance. It was a year in
which we were all reminded of just how little we know about where the market is
headed in the short term.
The enormous disparity in the prices of large, U.S. growth stocks and those
of their cheaper, smaller, or overseas counterparts left more than a few
investment styles distinctly out of favor. As such, many investment managers
found it virtually impossible to generate superior returns. That, however, is
the nature of investing in the capital markets. What's important is that
managers stick just as close to their chosen disciplines when they are
temporarily out of favor as when they are most decidedly in.
To that end, we are enormously proud of each and every one of the portfolio
managers of the WRL Series Fund, Inc.--from the growth-style manager who
produced returns far exceeding that of the broad market to the value-style
manager whose stocks were so assuredly out of favor this period. All faced the
vagaries of 1998 head on and stayed altogether true to their stated objectives.
I invite you--I urge you--to peruse their individual comments contained in this
Report. Understanding how these talented professionals dealt with this complex
market can only make it easier for you to stick to your own investment plan.
While we can never be certain how various types of funds will perform in the
future, the wild ride of 1998 clearly demonstrates the need for an investment
approach that's suitable for the tough times. For our part, we'll be expanding
the options of the WRL Series Fund, Inc. to assist you in that process. Check
with your representative later this year for details on the new Portfolios.
As for the market, we can only suppose the year-end euphoria will wane as the
new year progresses. We suspect, too, stock prices will not keep rising without
taking into consideration things like softer corporate earnings and slower
consumer spending. All that we can be sure of is the massively complex thing we
refer to as the global economy will have more than a few surprises in store for
us in 1999. No matter what happens, it will come in the face of continued, maybe
even increased, volatility.
Still, the greater risk in investing continues to be that of missing out on
the long-term, wealth-building climb of stock prices. While sticking to a
buy-and-hold strategy in a misshapen market is easier said than done, it is,
nevertheless, the essence of long-term investing. The honors will go to those
who succeed in staying the course. We recognize the challenges you face with
respect to your own investment plan and greatly appreciate the opportunity to
assist in meeting them.
Sincerely yours,
/s/ JOHN R. KENNEY
- ------------------
JOHN R. KENNEY
CHAIRMAN OF THE BOARD
1998 ANNUAL REPORT 1
<PAGE>
TABLE OF CONTENTS
PAGE
Chairman's Letter ......................................................... 1
Report of Independent Accountants ......................................... 3
WRL SERIES FUND, INC.
PORTFOLIO MANAGER'S COMMENTARY:
Money Market Portfolio .................................................. 4
Bond Portfolio .......................................................... 6
Growth Portfolio ........................................................ 8
Global Portfolio ........................................................ 10
Strategic Total Return Portfolio ........................................ 12
Emerging Growth Portfolio ............................................... 14
Aggressive Growth Portfolio ............................................. 16
Balanced Portfolio ...................................................... 18
Growth & Income Portfolio ............................................... 20
Tactical Asset Allocation Portfolio ..................................... 22
C.A.S.E. Growth Portfolio ............................................... 24
Global Sector Portfolio ................................................. 26
Value Equity Portfolio .................................................. 28
International Equity Portfolio .......................................... 30
U.S. Equity Portfolio ................................................... 32
Third Avenue Value Portfolio ............................................ 34
Real Estate Securities Portfolio ........................................ 36
SCHEDULE OF INVESTMENTS:
Money Market Portfolio .................................................. 38
Bond Portfolio .......................................................... 40
Growth Portfolio ........................................................ 43
Global Portfolio ........................................................ 46
Strategic Total Return Portfolio ........................................ 50
Emerging Growth Portfolio ............................................... 53
Aggressive Growth Portfolio ............................................. 57
Balanced Portfolio ...................................................... 59
Growth & Income Portfolio ............................................... 61
Tactical Asset Allocation Portfolio ..................................... 63
C.A.S.E. Growth Portfolio ............................................... 66
Global Sector Portfolio ................................................. 68
Value Equity Portfolio .................................................. 71
International Equity Portfolio .......................................... 73
U.S. Equity Portfolio ................................................... 78
Third Avenue Value Portfolio ............................................ 82
Real Estate Securities Portfolio ........................................ 83
Statement of Assets and Liabilities ...................................... 84
Statement of Operations .................................................. 88
Statement of Changes in Net Assets ....................................... 92
Financial Highlights ..................................................... 98
Notes to the Financial Statements ........................................ 106
Supplementary Information ................................................ 117
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.
2 WRL SERIES FUND, INC.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Shareholders of the WRL Series Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of each
of the portfolios constituting the WRL Series Fund, Inc. (hereafter
referred to as the "Fund") at December 31, 1998, the results of each of
their operations, the changes in each of their net assets and the
financial highlights for each of the periods indicated, in conformity
with generally accepted accounting principles. These financial statements
and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe
that our audits, which included confirmation of securities at December
31, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
/s/ PRICEWATERHOUSECOOPERS LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 29, 1999
1998 ANNUAL REPORT 3
<PAGE>
MONEY MARKET PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS MAXIMUM CURRENT INCOME CONSISTENT WITH PRESERVATION OF CAPITAL AND
MAINTENANCE OF LIQUIDITY.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Federal Maritime Commission 13.65 %
Associates First Capital Corporation 5.85 %
CXC Inc. - 144A 4.96 %
Monsanto Company - 144A 4.65 %
Bank One Corporation 4.12 %
[GRAPHIC] MARKET ENVIRONMENT
Throughout 1998, the U.S. economy continued its strong growth. While the
Asian financial crisis seemed to be stabilizing early in the year, the Russian
currency breakdown and the forced liquidations by leveraged funds caused all
major sectors of the U.S. stock market to decline. The ongoing Asian contagion
brought liquidity concerns causing investors to seek the relative safety of U.S.
Treasuries, which performed relatively well in the third quarter. The Federal
Reserve Board ("Fed") cut interest rates three times in the space of six weeks
towards year end. Such action eased liquidity constraints and helped to restore
investor confidence.
[GRAPHIC] PERFORMANCE
During the year, the Portfolio's performance was positively enhanced by the
addition of asset-backed commercial paper, and by maintaining our commitment to
floating-rate notes. Effective liquidity and duration management were also key
factors in the Portfolio's favorable performance. As the yield curve inverted in
the third quarter, the Portfolio was positively affected by having enough
liquidity to purchase 1-3 month commercial paper. We increased the Portfolio's
holdings in asset-backed commercial paper and floating-rate notes in the last
quarter. This decision was a result of the response we saw from the flat and
inverted yield curve earlier in the year. While we maintained an average
maturity near the high end of the Portfolio's range (45-50 days), we were
sensitive to liquidity to take advantage of year-end pressures. In addition, we
maintained a laddered portfolio throughout the second half of the year.
[GRAPHIC] OUTLOOK
We continue to look for sluggish overall growth in the global economy in 1999
and virtually no growth in manufacturing. While we are impressed with the
persistent strength we're seeing in the U.S. economy, we believe the ongoing
slowdown in manufacturing will lead to more modest growth in the coming year,
with Gross Domestic Product growth for the year targeted at 1.5 %. Though the
risk of an abrupt slowdown is present, prompted by either a stock market
correction or a currency crisis, the more likely outcome is an undramatic
slowing of activity.
We expect the Fed to be responsive to the slowing economy by easing monetary
policy through the year, causing the yield curve to steepen and overall interest
rate levels to decline. By year-end 1999, our most likely scenario is for the
federal funds rate to be in the area of 4.00 % and 30-year U.S. Treasury yields
to be slightly below 5.00 %.
ROBERT R. JOHNSON
MONEY MARKET PORTFOLIO
PORTFOLIO MANAGER
4 WRL SERIES FUND, INC.
<PAGE>
[J.P. MORGAN INVESTMENT LOGO]
[GRAPH]
Pie chart depicting portfolio composition as a percentage of total portfolio net
assets.
Commercial Paper 26.60%
Short-Term Obligations 40.31%
Certifiactes of Deposits 19.44%
Short-Term US Government Obligations 13.65%
Bar chart depicting maturity composition of the portfolio at December 31, 1998.
(All amounts in thousands.)
MARKET VALUE
------------
30 days $27,167
31-60 days $29,866
61-90 days $17,391
91-180 days $41,888
181-270 days $34,992
271 days to 1 year $17,203
more than 1 year $0
Past Performance does not guarantee future results. An investment in the Money
Market Portfolio is neither insured nor guaranteed by the Federal Deposit
Insurance Corporation or any other government agency and there can be no
assurance that the Portfolio will be able to maintain a stable net asset value
of $1.00 per share.
DURING THE YEAR, THE PORTFOLIO'S PERFORMANCE WAS POSITIVELY ENHANCED BY THE
ADDITION OF ASSET-BACKED COMMERCIAL PAPER, AND BY MAINTAINING OUR COMMITMENT TO
FLOATING-RATE NOTES.
1998 ANNUAL REPORT 5
<PAGE>
BOND PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS THE HIGHEST POSSIBLE CURRENT RETURN WITHIN THE CONFINES OF INSURING
PROTECTION OF CAPITAL.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
U.S. Treasury Note 10/31/2002 4.25 %
U.S. Treasury Bond 11/15/2026 4.09 %
U.S. Treasury Bond 05/15/2016 3.55 %
U.S. Treasury Note 05/15/2007 3.30 %
U.S. Treasury Bond 08/15/2023 3.28 %
[GRAPHIC] MARKET ENVIRONMENT
Across the first half of 1998, we experienced a trading range market for
interest rates with relatively low volatility. During the third quarter,
however, intensifying concerns surrounding a global economic slowdown led to
stock market declines throughout the world on expectations of declining
corporate profits. A strong flight-to-quality bid developed as a result of the
crisis, which moved interest rates dramatically lower in August and September.
The yield curve steepened in the last six months of the year, reflecting the
desire for liquidity by investors and action taken by the Federal Reserve Board
("Fed") to restore confidence.
From late September, the Fed eased three times for a total of 75 basis
points, leaving the federal funds rate at 4.75 % at year end. Corporate bond
spreads widened dramatically during the third quarter, especially in August,
leaving spreads at or near levels experienced in the last recession. The
deteriorating spread environment was due to a combination of the strong market
for U.S. Treasuries and the lack of liquidity for spread-related securities.
[GRAPHIC] PERFORMANCE
The performance of the Portfolio primarily reflects a duration longer than
its benchmark index through most of the period. For the year ended December 31,
1998, the Bond Portfolio produced a total return of 9.32 %. This compares with
the Lehman Brothers Government/Corporate Bond Index, which gained 9.47 %.
[GRAPHIC] STRATEGY REVIEW
Transaction activity for 1998 was influenced by new cash flow during the
year, with inflows concentrated in the late-August to mid-October time. The
Portfolio was the beneficiary of the incremental yields from allocations to
spread product like high-quality corporate, asset-backed, and mortgage-backed
securities. The dramatic spread widening in corporate bonds, however, caused the
sector's performance to be below that of U.S Treasuries. Despite a modest
reduction in our allocation to corporate bonds prior to the spread widening, the
Portfolio was still overweighted relative to its benchmark. Portfolio
performance was also enhanced by its maturity structure given the steepening of
the yield curve, but was somewhat hindered by security selection. Within
corporates, for example, we were underweighted in the utility sector which,
though usually defensive, was strong in 1998.
[GRAPHIC] OUTLOOK
A moderate growth economy, limited inflation concerns, and a positive
backdrop provided by European bond markets continue to impact interest rate
expectations. Concerns surrounding Asia and Latin America remain a wildcard,
while technical factors will also influence the market's direction. Considering
all these factors, we are neutral to modestly bullish on the bond market. We see
a greater probability of a steeper curve going forward given its still
historically flat slope and have, therefore, retained the longer-term maturity
structure of the Portfolio. Both Portfolio activity and Portfolio structure
reflect our strategy and market outlook. Our current duration relative to the
benchmark is approximately 100 %. We also have a relatively large exposure to
intermediate maturities, leaving the average maturity of the Portfolio shorter
than its benchmark. Although the Portfolio is broadly diversified, it continues
to have an emphasis on corporate bonds, with the heaviest exposure to
financials. While there is a substantial overweight to single-A rated
securities, the average quality of the Portfolio remains high at AA.
CLIFFORD A. SHEETS JARRELL D. FREY
BOND PORTFOLIO
CO-PORTFOLIO MANAGERS
6 WRL SERIES FUND, INC.
<PAGE>
[AEGON LOGO]
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
[GRAPH]
Mountain gragh 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.
PORTFOLIO LB INDEX
--------- --------
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
FYE 12/31/96 $21,258 $23,040
FYE 12/31/97 $23,204 $25,290
FYE 12/31/98 $25,366 $27,685
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
ALTHOUGH THE PORTFOLIO IS BROADLY DIVERSIFIED, IT CONTINUES TO HAVE AN EMPHASIS
ON CORPORATE BONDS, WITH THE HEAVIEST EXPOSURE TO FINANCIALS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 7
<PAGE>
GROWTH PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS GROWTH OF CAPITAL THROUGH INVESTMENTS IN COMMON STOCKS WITH SUPERIOR
EARNINGS GROWTH POTENTIAL.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Dell Computer Corporation 9.17 %
America Online, Inc. 8.06 %
Microsoft Corporation 7.25 %
Nokia Oyj - Sponsored ADR 6.14 %
Pfizer Inc. 5.01 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Pharmaceuticals 19.0 %
Computer & Data Processing Services 16.1 %
Computer & Office Equipment 13.1 %
Communications Equipment 7.0 %
Telecommunications 5.3 %
[GRAPHIC] MARKET ENVIRONMENT
The past year was, to say the least, a study in contrasts. After rallying
across the first two quarters, stocks sold off in July and August amidst nagging
concerns over the flailing Japanese economy and the disturbing developments in
Russia and Brazil. The ensuing "flight to quality" created a liquidity crunch
that forced the Federal Reserve Board to lower interest rates, which, in turn,
led to a rally through year end.
Importantly, though, market leadership became increasingly narrow. But unlike
the narrow, liquidity-driven rallies of the recent past, the fourth-quarter
rally was led by companies exhibiting solid fundamentals. This run-up was
somewhat surprising, especially considering all the potential negative
distractions--the attack on Iraq, the impeachment hearings, and a bevy of
earnings pre-warnings by several multinational corporations to name a few. As it
turned out, the market took on a "teflon-like" quality in which even the most
negative events could not transform the bulls into bears.
[GRAPHIC] PERFORMANCE
Despite the market's volatility during the period, the Growth Portfolio fared
quite well, outperforming, in fact, every major market index. For the year ended
December 31, 1998, the Portfolio returned 64.47 %. By comparison, the Standard
and Poor's Index of 500 Common Stocks gained 28.58 %, while the Dow Jones
Industrial Average picked up 18.16 %.
[GRAPHIC] STRATEGY REVIEW
A major focus of the Portfolio has been to invest in companies that are
becoming increasingly prominent in our everyday lives--to invest, in other
words, in tomorrow's leading franchises. In trying to identify companies that
are instigating change, we have found a number of promising ideas in the
telecommunications, technology, pharmaceuticals, financial services, retailing,
and media arenas. While the pace of innovation in these sectors is
extraordinarily rapid, our research analysts have done an excellent job
identifying and analyzing these opportunities.
Since we genuinely believe the internet will be the single most influential
phenomenon affecting our lives over the next 10 years, we chose to invest in
many companies we believe will play a key role in its evolution. Most notable
were our large positions in Microsoft Corporation, Dell Computer Corporation,
and America Online, Inc. which significantly bolstered performance. For the
year, the stock prices of these securities advanced more than 100 %, 200 %, and
400 %, respectively.
Despite the Portfolio's noteworthy return, there were stocks that fell short
of our expectations. Our financial services positions, for example, once thought
to be some of the more stable and predictable in the Portfolio, proved to be
some of the most volatile. We chose to liquidate our positions in both Citigroup
(formally known as Citicorp) and BankAmerica Corporation.
[GRAPHIC] OUTLOOK
Looking ahead, we believe market volatility is here to stay. The size and
speed at which information is being delivered almost guarantees that the
volatility we've seen is only a precursor to future market actions. While all of
this can be unsettling, we'll continue to focus on company fundamentals when
making our investment decisions. Despite the potential increase in volatility,
we remain very bullish on the longer-term prospects for financial assets,
particularly those for growth stocks.
SCOTT W. SCHOELZEL
GROWTH PORTFOLIO
PORTFOLIO MANAGER
8 WRL SERIES FUND, INC.
<PAGE>
[JANUS LOGO]
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
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
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 $35,572
FYE 12/31/96 $52,979 $43,740
FYE 12/31/97 $62,274 $58,333
FYE 12/31/98 $102,424 $75,004
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
A MAJOR FOCUS OF THE PORTFOLIO HAS
BEEN TO INVEST IN COMPANIES THAT ARE BECOMING INCREASINGLY PROMINENT IN OUR
EVERYDAY LIVES--TO INVEST, IN OTHER WORDS, IN TOMORROW'S LEADING FRANCHISES.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
FOREIGN SECURITIES INVOLVE SPECIAL RISK DESCRIBED IN THE PROSPECTUS THAT SHOULD
BE CONSIDERED CAREFULLY BEFORE INVESTING.
1998 ANNUAL REPORT 9
<PAGE>
GLOBAL PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM GROWTH OF CAPITAL PRIMARILY THROUGH INVESTMENTS IN COMMON
STOCKS OF FOREIGN AND DOMESTIC ISSUERS.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Cisco Systems, Inc. 4.90 %
Microsoft Corporation 3.45 %
Tyco International Ltd. 3.44 %
Securitas AB - Class B 2.98 %
Mannesmann AG 2.78 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Telecommunications 14.3 %
Pharmaceuticals 10.9 %
Computer & Data Processing Services 10.2 %
Communications Equipment 5.9 %
Computer & Office Equipment 5.7 %
[GRAPHIC] MARKET ENVIRONMENT
Against a backdrop of positive economic growth and benign inflationary
pressures, the year began with U.S. and European stocks moving to record levels.
For the first six months, both markets logged impressive results with European
bourses actually outpacing their U.S. rivals. But Russia's mid-year currency
devaluation and the subsequent default on its outstanding debt effectively
removed the global marketplace's rosy underpinnings. With that, investors shied
away from seemingly anything with a hint of risk, resulting in a widespread
sell-off across the U.S. and Europe. Subsequent intervention by the world's
central banks helped reestablish investor confidence, however, and U.S. and
European markets recouped much of their lost ground by year end.
[GRAPHIC] PERFORMANCE
Though we didn't completely escape the correction, our strong performance on
either side of it helped the Portfolio to keep pace with its benchmark. For the
year ended December 31, 1998, the Global Portfolio returned 30.01 % versus the
Morgan Stanley Capital International World Index which gained 24.34 %.
[GRAPHIC] STRATEGY REVIEW
While the Portfolio derived its strong performance from a number of different
themes, its U.S. exposure was the most noteworthy. Three of the Portfolio's
largest holdings, Cisco Systems, Inc., Time Warner Inc., and Microsoft
Corporation, did indeed have truly outstanding years. And, despite their
terrific individual performances, we remain optimistic on each of their
respective prospects. All three play integral roles in our vision of the
future--Time Warner Inc.'s cable serving as the information highway, Cisco
Systems, Inc.'s routers and other networking products serving as the road signs
and traffic lights, and Microsoft Corporation emerging as one of the dominant
providers of content.
The Global Portfolio's stellar performance was not restricted to the U.S. We
held several European communications companies whose performance was notable,
including our position in Nokia Oyj, the Finnish cellular phone company. Another
company that bolstered performance was COLT Telecom Group PLC ("COLT"). COLT is
an alternative telephone service provider that has fully exploited the
environment of local deregulation to undercut the huge pricing umbrella of some
of the larger providers.
Not all of our companies performed so well, however. We were disappointed by
Alcatel SA, a restructuring story where meaningful changes were not realized as
quickly as expected. Several of our financial holdings also performed poorly
after they suffered severe losses resulting from loans made to hedge funds with
highly leveraged Russian exposure.
[GRAPHIC] OUTLOOK
We believe the trend towards lower interest rates will continue as global
growth slows. That's not to say we believe we are entering a recessionary
environment, but one characterized by slower growth. As a result, we will
restrict our investments to stocks of companies with pricing power in dynamic,
growing industries. We believe companies with these qualities can thrive in this
type of slower growth environment.
HELEN YOUNG HAYES
GLOBAL PORTFOLIO
PORTFOLIO MANAGER
10 WRL SERIES FUND, INC.
<PAGE>
[JANUS LOGO]
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
[GRAPH]
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 tume frame.
PORTFOLIO MS INDEX
--------- --------
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
FYE 12/31/96 $21,628 $18,130
FYE 12/31/97 $25,683 $21,070
FYE 12/31/98 $33,392 $26,198
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WHILE THE PORTFOLIO DERIVED ITS STRONG PERFORMANCE FROM A NUMBER
OF DIFFERENT THEMES, ITS U.S. EXPOSURE WAS THE MOST NOTEWORTHY.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
FOREIGN SECURITIES INVOLVE SPECIAL RISK DESCRIBED IN THE PROSPECTUS THAT SHOULD
BE CONSIDERED CAREFULLY BEFORE INVESTING.
1998 ANNUAL REPORT 11
<PAGE>
STRATEGIC TOTAL RETURN PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS CURRENT INCOME, LONG-TERM GROWTH OF INCOME, AND CAPITAL APPRECIATION BY
INVESTING IN A BLEND OF EQUITY AND FIXED-INCOME SECURITIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
MCI Worldcom, Inc. 2.29 %
Alltel Corporation 2.19 %
Tyco International Ltd. 2.17 %
U.S. Treasury Note 02/28/2002 2.03 %
U.S. Treasury Note 09/30/2001 1.94 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Telecommunications 8.8 %
Pharmaceuticals 7.4 %
Chemicals & Allied Products 6.8 %
U.S. Government Obligations 6.1 %
Commercial Banks 5.6 %
[GRAPHIC] MARKET ENVIRONMENT
Despite experiencing the most severe one-month decline since October, 1987,
the Standard and Poor's Index of 500 Common Stocks ("S&P 500") enjoyed an
unprecedented fourth consecutive year of 20 % or better gains. The stock market
turbulence of last summer was caused in part by a realization that, in the face
of moderate economic growth, many companies were experiencing a "profits
recession." Still, by year-end the S&P 500 had set a record high. Concerns about
domestic profits and the global economy were simply overwhelmed by the liquidity
available for investment in U.S. stocks.
[GRAPHIC] PERFORMANCE
The Portfolio is managed using an approach which emphasizes capital
appreciation, income generation, and protection against excessive volatility. In
order to attain the desired reward/risk profile, the Portfolio invests in a
blend of common stocks, convertible securities, government and corporate bonds,
and cash. For the year ended December 31, 1998, the Strategic Total Return
Portfolio generated a total return of 9.64 %. By comparison, over the same
one-year period the S&P 500 gained 28.58 % and the Lehman Brothers
Government/Corporate Intermediate Bond Index returned 8.44 %.
[GRAPHIC] STRATEGY REVIEW
Market pundits claim that the stock market "climbs a wall of worry" and the
strong performance of 1998 did indeed seem to ignore the worries of a
fundamental slowing in corporate profit growth. These worries did, however,
shape the underlying composition of the 1998 bull market and thus had an impact
on the Portfolio's results. We benefited from the performance of high quality
stocks that possess rock-solid balance sheets and predictable earnings
streams--hallmarks of many of the Portfolio's investments. Schering-Plough
Corporation, for example, a pharmaceutical concern with a stable of drugs was
one of our top performers this year as investors were rewarded for the company's
pattern of consistent growth. Another stellar performer for us was General
Electric Company, one of the world's largest companies and one of the
Portfolio's larger positions.
While a portion of the technology sector remains high risk, we underestimated
the fundamental attractiveness of a number of the more established businesses
and, as a result, the Portfolio had limited exposure. The Portfolio spread its
underweighted position in the technology sector across positions in the
consumer, healthcare, energy, finance, and service sectors. We did capitalize to
some extent on the positive growth trends in information technology and the
internet through MCI WORLDCOM, Inc., which more than doubled in value over the
course of 1998. We continue to look for investment opportunities in this high
growth segment of the economy but remain dedicated to balance the potential
rewards against acceptable risks for the Portfolio and its investors.
[GRAPHIC] OUTLOOK
The excitement of 1998 will be difficult to top. Nevertheless, 1999 promises
to have its historic moments and investment opportunities as well. While
companies are likely to face a challenging environment in which to grow
earnings, we suspect they may muster modestly better operating performance than
is currently anticipated. This will especially be true if emerging market
economies show any element of recovery. The strong demand for financial assets,
which has characterized the 1990's bull market, is likely to continue unabated.
We believe our philosophy of investing in a blend of asset classes as a way to
control volatility is especially suited for today's markets.
LUTHER KING SCOT C. HOLLMANN
STRATEGIC TOTAL RETURN PORTFOLIO
CO-PORTFOLIO MANAGERS
12 WRL SERIES FUND, INC.
<PAGE>
[LKCM LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. STRATEGIC TOTAL RETURN PORTFOLIO, THE STANDARD & POOR'S INDEX OF 500 COMMON
STOCKS AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX
[GRAPH]
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 Browther Government/Corporate Intermediate Bond Index
(LB) over the same time frame.
PORTFOLIO S&P INDEX LB INDEX
--------- --------- --------
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
FYE 12/31/96 $16,182 $18,459 $12,966
FYE 12/31/97 $19,178 $24,618 $13,986
FYE 12/31/98 $21,619 $31,654 $15,167
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WE BENEFITED FROM THE PERFORMANCE OF HIGH QUALITY STOCKS THAT POSSESS
ROCK-SOLID BALANCE SHEETS AND PREDICTABLE EARNINGS STREAMS--HALLMARKS OF MANY OF
THE PORTFOLIO'S INVESTMENTS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 13
<PAGE>
EMERGING GROWTH PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS CAPITAL APPRECIATION BY INVESTING IN THE COMMON STOCKS OF
SMALL- AND MEDIUM-SIZED COMPANIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
America Online, Inc. 6.75 %
Dell Computer Corporation 4.32 %
Compuware Corporation 3.75 %
EMC Corporation 3.73 %
Best Buy Co., Inc. 2.07 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Computer & Data Processing Services 25.3 %
Computer & Office Equipment 12.0 %
Pharmaceuticals 6.0 %
Electronic Components & Accessories 4.9 %
Radio & Television Broadcasting 3.8 %
[GRAPHIC] MARKET ENVIRONMENT
With larger capitalization stocks generally faring better than smaller stocks
during the year, we responded by raising the Portfolio's median market
capitalization. Encouragingly, smaller stocks performed better in the fourth
quarter, but even then, only in step with larger stocks. It was another roller
coaster year with strong performance in the first half, a correction in the
third quarter, and a sharp rebound in the fourth quarter. The fourth quarter
turned out to be the best in the Portfolio's history.
For us, the best performing group by far was technology, and, due to the
strong performance, the group now exceeds 40 % of the Portfolio's assets.
Technology finished the year still looking like the best group, at least under
our stock selection criteria. Stocks are typically selected based on two key
criteria: rising earnings expectations and improving valuations. The worst group
was energy, as falling oil prices hurt every sector of the industry. The
Portfolio's weighting in the group has fallen to less than 1% of assets. This
was an unusual year because the strong stocks stayed strong all year, while the
weak stocks stayed weak all year. Normally more sector rotation occurs.
[GRAPHIC] PERFORMANCE
Despite the significant third quarter correction, the Emerging Growth
Portfolio gained 37.33 % for the year ended December 31, 1998. By comparison,
the Standard and Poor's Index of 500 Common Stocks rose 28.58 % for the same
period. The Portfolio's performance did, in fact, beat the Dow Jones Industrial
Average and the Russell 2000 Index.
[GRAPHIC] STRATEGY REVIEW
The investment style being employed in the Portfolio is a bottom-up approach
that focuses on stock selection. Since the Portfolio remains fully invested,
risk is controlled by maintaining a broadly diversified list of stocks. The
style remains consistent in any market condition. Stocks are selected based on
two key criteria: rising earnings expectations and improving valuations. Stocks
are sold immediately if earnings expectations fall, and very quickly if the
valuation declines. The approach attempts to identify the best performing
high-growth companies. Among the best performers during the year were America
OnLine, Inc., Dell Computer Corporation, Yahoo! Inc., Best Buy Co., Inc., and
EMC Corporation. All of these stocks were among the biggest winners in the
market this year.
[GRAPHIC] OUTLOOK
The market tends to treat emerging growth stocks differently depending on the
level of uncertainty. When fear rises, the market seeks "safe haven" stocks, and
tends to avoid the type of stocks held in the Portfolio. On the other hand, when
confidence returns, the market seeks the potentially higher returns available
from emerging growth companies. Emotional swings are occurring at a seemingly
accelerated pace in this marketplace and that seems unlikely to change near
term.
In the meantime, emerging growth stock valuations are at the bottom of their
historic range when compared to larger companies. With that, they should be
considered very attractive for investors. Moreover, it appears to me that many
of the same conditions present in 1991, one of the best years ever for small
growth stocks, are present now, most notably low interest rates and low
inflation. The market should not only continue its incredible bull run in 1999,
I believe its favor should return to smaller stocks.
GARY M. LEWIS
EMERGING GROWTH PORTFOLIO
PORTFOLIO MANAGER
14 WRL SERIES FUND, INC.
<PAGE>
[VAN KAMPEN LOGO]
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
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
Inception 3/1/93 $10,000 $10,000
FYE 12/31/93 $12,471 $10,770
FYE 12/31/94 ` $11,553 $10,912
FYE 12/31/95 $16,960 $14,996
FYE 12/31/96 $20,162 $18,459
FYE 12/31/97 $24,488 $24,618
FYE 12/31/98 $33,629 $31,654
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
EMERGING GROWTH STOCKS VALUATIONS
ARE AT THE BOTTOM OF THEIR HISTORIC RANGE WHEN COMPARED TO LARGER COMPANIES
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 15
<PAGE>
AGGRESSIVE GROWTH PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED, ACTIVELY
MANAGED PORTFOLIO OF EQUITY SECURITIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
America Online, Inc. 4.86 %
Intel Corporation 3.61 %
Dell Computer Corporation 3.51 %
The Home Depot, Inc. 3.46 %
Cisco Systems, Inc. 3.30 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Pharmaceuticals 14.6 %
Computer & Office Equipment 14.2 %
Computer & Data Processing Services 12.7 %
Electronic Components & Accessories 8.1 %
Insurance 4.7 %
[GRAPHIC] MARKET ENVIRONMENT
1998 proved a turbulent and challenging year for investors in the U.S. stock
market. During the first half of the year, stocks that had been undeservedly
sold in the wake of the Asian crisis rebounded nicely. Inflation remained
subdued and the Federal Reserve Board ("Fed") left interest rates unchanged. The
post-Asian crisis earnings season came and went with some predictable
casualties, but most companies got through it unscathed. Moreover, after a year
in which value stocks significantly outperformed growth stocks, investors
returned to the more aggressive discipline. By mid-July, most major market
indexes were trading at record levels.
But amid incidents of international economic instability and domestic
political controversy, specifically, the collapse of the Russian economy and the
worsening of the Japanese banking system, the market sold off dramatically in
August. Economic activity was slowed by a credit crunch, as spreads between
corporate and U.S. Treasury bonds widened. At the same time, national stability
was rocked by presidential scandal. As measured by the Standard and Poor's Index
of 500 Common Stocks ("S&P 500"), the historically placid month of August proved
to be the worst performing month since October, 1987. The markets recovered
during September in anticipation of relief from the Fed, yet sold off sharply
toward the end of the month following what was perceived to be a disappointing
reduction of the federal funds rate by 25 basis points.
As October progressed, stocks gained a boost from a rare intra-meeting rate
reduction by the Fed. The technology sector stabilized as Intel Corporation and
Microsoft Corporation reported better than expected quarterly earnings. A rally
prompted by additional relief from the Fed in November highlighted a strong
fourth quarter, which anchored another lucrative, albeit challenging, year for
the U.S. stock market.
[GRAPHIC] PERFORMANCE
In this environment, the Aggressive Growth Portfolio posted a return of 48.69
% for the year ended December 31, 1998. The Portfolio's performance compares
quite favorably to the returns of its benchmarks, the S&P 500 at 28.58 %, and
the Value Line (Arithmetic) Index at 5.82 %.
[GRAPHIC] STRATEGY REVIEW
While small-cap stocks had another disappointing year, the Portfolio's
all-cap approach benefited from its dramatic overexposure to large-cap stocks.
The Portfolio's favorable returns were also augmented by the performance of
technology and pharmaceutical holdings. Notable performing stocks that were held
for the entire year included America Online, Inc., Microsoft Corporation, and
Cisco Systems, Inc. Key holdings in the retail sector also boosted the
Portfolio's annual performance. These names included The Home Depot, Inc.,
Wal-Mart Stores, Inc., and Staples, Inc., all of which were held for the entire
year and all of which appreciated in excess of 100 %.
[GRAPHIC] OUTLOOK
Looking ahead, we remain cautiously optimistic. Although the rate of economic
growth may be slowing, interest rates, inflation, and unemployment remain at
very low levels. We will continue to seek out and invest in companies that we
feel will grow their earnings rapidly and consistently.
DAVID D. ALGER
PRESIDENT, FRED ALGER MANAGEMENT, INC.
16 WRL SERIES FUND, INC.
<PAGE>
[FRED ALGER LOGO]
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
[GRAPH]
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 & Poor's Index of 500 Common Stocks (S&P) over the same time frame.
PORTFOLIO VL INDEX S&P INDEX
--------- -------- ---------
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 $13,857
FYE 12/31/96 $15,052 $14,609 $17,039
FYE 12/31/97 $18,072 $18,766 $22,724
FYE 12/31/98 $27,807 $19,857 $29,218
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
THE PORTFOLIO'S ALL-CAP APPROACH BENEFITED FROM ITS DRAMATIC OVEREXPOSURE TO
LARGE-CAP STOCKS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 17
<PAGE>
BALANCED PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS PRESERVATION OF CAPITAL, REDUCED VOLATILITY, AND LONG-TERM RETURNS BY
INVESTING IN COMMON STOCK, CONVERTIBLE SECURITIES, AND FIXED-INCOME SECURITIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
U.S. Treasury Bond 11/15/2028 4.31 %
U.S. Treasury Bond 11/15/2016 3.92 %
U.S. Treasury Bond 05/15/2016 3.82 %
U.S. Treasury Note 08/15/2004 3.55 %
U.S. Treasury Bond 11/15/2027 3.53 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
U.S. Government Obligations 35.7 %
Pharmaceuticals 7.7 %
Commercial Banks 7.7 %
Insurance 6.3 %
Finance 5.4 %
[GRAPHIC] MARKET ENVIRONMENT
The U.S. stock market for 1998 can be summed up in two points: increased
volatility and the divergence between large and small-capitalized companies.
While the Balanced Portfolio was certainly not immune to those influences, its
bond exposure and focus on large-cap issues helped minimize these variables.
Much of the strength in the markets was fueled by the Federal Reserve Board
("Fed"). In 1998, the Fed cut rates three times, totaling 75 basis points. Such
phrases as a hop, skip, and a jump come to mind when thinking about what
happened to larger-cap stocks after the rate cuts. These words also bring to
mind the volatility in 1998--in mid-July, the Standard and Poor's Index of 500
Common Stocks ("S&P 500") was up 23 % for the year, was relatively flat in early
October, only to close the year ahead 28.58 %.
[GRAPHIC] PERFORMANCE
For its part, the Balanced Portfolio returned 6.93 % for the year ended
December 31, 1998. For the same period, the S&P 500 gained 28.58 % and the
Lehman Brothers Government/Corporate Intermediate Bond Index advanced 8.44 %. At
year-end, 64.3 % of the Portfolio's asset were allocated to equities with 35.7 %
in U.S. Treasuries.
[GRAPHIC] STRATEGY REVIEW
Throughout the year, we made a conscious effort to consolidate the number of
holdings in the Portfolio while increasing the average market capitalization of
the remaining stocks. This was achieved primarily through the elimination of
smaller companies from the Portfolio. As a result, we ended the year with a
capitalization rate for the majority of our issues well above the $ 20 billion
mark. The Portfolio ended the year with 29 equity positions, trading, for the
most part, at what we think are reasonable valuations.
For our balanced strategy, the highlight of the year had to be the
performance of bonds, specifically U.S. Treasuries. After starting out with a
yield of 5.92 %, the 30-year Treasury ended the year at 5.09 %, a drop in yield
that amounted to a 14 % return on price alone. By comparison, the Russell 2000
Index, a broad index of common stocks, was down 2.55 % for the same period. A
good argument can be made, in other words, that U.S. Treasuries outperformed a
sizable portion of the U.S. equity market.
[GRAPHIC] OUTLOOK
Looking at the market from a top-down approach there are troubling signs,
such as the narrowness in market leadership which is contributing to higher
volatility and the disconnection between slower earnings growth relative to
expanding valuations. Our goal is not to guess the timing or even the direction
of the market, but to deliver consistent returns over a long period of time. To
meet this goal, our investment team has tightened its investment process and has
developed an improved set of valuation tools. We believe this effort will
contribute to a reduction in volatility and deliver, we trust, competitive
market returns over time.
MICHAEL VAN METER
BALANCED PORTFOLIO
PORTFOLIO MANAGER
18 WRL SERIES FUND, INC.
<PAGE>
[AEGON LOGO]
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
THE LEHMAN BROTHERS GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX
[GRAPH]
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 the Lehman Brothers Government/Corporate Intermediate Bond
Index (LB) over the same time frame.
PORTFOLIO S&P INDEX LB INDEX
--------- --------- --------
Inception 3/1/94 $10,000 $10,000 $10,000
Period Ended 12/31/94 $9,427 $10,072 $9,872
FYE 12/31/95 $11,293 $13,857 $13,068
FYE 12/31/96 $12,504 $17,039 $15,575
FYE 12/31/97 $14,642 $22,724 $20,165
FYE 12/31/98 $15,657 $29,218 $24,667
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
FOR OUR BALANCED STRATEGY, THE
HIGHLIGHT OF THE YEAR HAD TO BE THE PERFORMANCE OF BONDS, SPECIFICALLY
U.S. TREASURIES.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 19
<PAGE>
GROWTH & INCOME PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS TOTAL RETURN BY INVESTING IN SECURITIES THAT HAVE DEFENSIVE
CHARACTERISTICS.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
U.S. Treasury Note 04/30/1999 7.32 %
KeySpan Energy Corporation 2.65 %
Irvine Apartment Communites, Inc. 2.13 %
New England Electric System 2.08 %
BEC Energy 2.01 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Holding & Other Investment Offices 19.1 %
Gas Production & Distribution 17.9 %
Electric Services 16.0 %
Electric, Gas & Sanitary Services 14.8 %
U.S. Government Obligations 7.3 %
[GRAPHIC] MARKET ENVIRONMENT
With a sharp fourth quarter rebound, the Standard and Poor's Index of 500
Common Stocks ("S&P 500") closed 1998 with an unprecedented fourth straight year
of gains in excess of 20 %. The market environment, however, became quite
speculative once again, with internet mania the most visible display of excess.
In this environment, the Growth & Income Portfolio with its conservative,
value-oriented style will naturally trail in nominal returns. I believe we did,
however, achieve our goal of protecting investors during market declines. The
Portfolio's defensive performance during days of market stress reflects, we
think, the Portfolio's relatively low risk.
[GRAPHIC] PERFORMANCE
For the year ended December 31, 1998, the Portfolio returned 3.05 %, which is
somewhat disappointing after the solid return of 1997. By comparison, the S&P
500 returned 28.58 % and the Russell 3000 Index returned 22.32 %.
[GRAPHIC] STRATEGY REVIEW
The primary reason for the lagging performance in 1998 was the weakness in
real estate investment trusts ("REITs"), which on average comprised 20 % of the
Portfolio. Despite the group's relative attractive earnings growth,
price/earning multiple, and dividend yield, the REITs trailed the S&P 500 by
more than 40 %. REITs are now at their most undervalued levels on record, and we
reiterate our confidence in the sector.
In the meantime, earnings prospects for electric companies continue to
improve relative to those of the overall market. In fact, for the first time in
this decade, electric companies may produce more rapid earnings growth than the
S&P 500. Cash flow is at record levels, and many companies are repurchasing
their own stock, which adds to demand for electric shares. Many electric
companies have new, dynamic executives that have personal financial incentives
to produce higher profits and higher share prices. Further, industry
deregulation is leading to consolidation and takeovers. The Portfolio's top
performing electric stock was DQE, Inc., which returned 25 % in 1998.
Natural gas companies are appealing to us as well, because the leading
companies have irreplaceable assets, and gas demand is rising while supply
likely will be constrained. Gas is the "fuel of choice" for new power generating
plants because it is clean, efficient, and domestic. Advances in gas turbines
and accelerated construction of new generating plants are positive for demand
while the gas producing capacity of Canada and the Gulf of Mexico is slipping.
Southwest Gas Corporation was our top performer in this sector, as it rose 30 %
in the fourth quarter on a takeover bid.
[GRAPHIC] OUTLOOK
Our current strategy is to emphasize companies that we believe will generate
cash flow above their capital spending and dividend requirements and stocks with
high dividend yields. Our favorite sectors besides REITs are electric and gas
utilities.
The Portfolio remains value-oriented and conservative. The higher the stock
market gets, the more conservative our strategy becomes. This may not be in
vogue amid internet mania, but it is prudent for preserving and enhancing the
value of capital.
STEVEN J. LEHMAN LINDA A. DUESSEL
GROWTH & INCOME PORTFOLIO
CO-PORTFOLIO MANAGERS
20 WRL SERIES FUND, INC.
<PAGE>
[FEDERATED LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
GROWTH & INCOME PORTFOLIO, THE RUSSELL 3000 INDEX, AND THE STANDARD & POOR'S
INDEX OF 500 COMMON STOCKS
[GRAPH]
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), the Standard & Poor's Index of 500 Common Stocks (S&P), and the Russel
3000 Index over the same time frame.
RUSSEL
PORTFOLIO S&P INDEX 3000 INDEX
--------- --------- ----------
Inception 3/1/94 $10,000 $10,000 $10,000
Period Ended 12/31/94 $9,542 $10,072 $9,872
FYE 12/31/95 $11,952 $13,857 $13,068
FYE 12/31/96 $13,343 $17,039 $15,575
FYE 12/31/97 $16,631 $22,724 $20,165
FYE 12/31/98 $171397 $29,218 $24,667
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
I BELIEVE WE DID ACHIEVE OUR GOAL OF PROTECTING INVESTORS DURING MARKET
DECLINES.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 21
<PAGE>
TACTICAL ASSET ALLOCATION PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS PRESERVATION OF CAPITAL AND COMPETITIVE RETURNS BY INVESTING IN STOCKS,
U.S. TREASURY SECURITIES, AND MONEY MARKETS.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
AT&T Corporation 3.29 %
Phillip Morris Companies Inc. 3.29 %
The News Corporation Limited. -
Sponsored ADR 3.04 %
U.S. Treasury Note 05/15/2005 3.00 %
U.S. Treasury Note 02/15/2004 2.88 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Finance 9.5 %
Insurance 8.6 %
U.S. Government Obligations 5.9 %
Telecommunications 5.5 %
U.S. Government Agency Obligations 5.2 %
[GRAPHIC] MARKET ENVIRONMENT
While the 1998 stock market was more volatile than at any point in the 1990s,
by year-end many market indexes were back near their all-time highs. For its
part, the Standard and Poor's Index of 500 Common Stocks ("S&P 500") rose more
than 20 % for the fourth straight year. Never before, however, have its gains
been concentrated in so few stocks. The top 10 contributors to the S&P 500's
1998 performance accounted for an outsized proportion of the total increase. At
the same time, nearly three fourths of the component stocks included in the S&P
500 individually failed to match its overall performance.
[GRAPHIC] PERFORMANCE
In this extraordinary environment, the Tactical Asset Allocation Portfolio
produced a total return of 8.33 % for the year ended December 31, 1998. For the
same period, the S&P 500 gained 28.58 % and the Lehman Brothers
Government/Corporate Intermediate Bond Index returned 8.44 %.
[GRAPHIC] STRATEGY REVIEW
We believe the wide valuation disparity between large-cap growth stocks and
the remainder of the market has created an environment where equity selection is
likely to be a dominant factor in determining returns. In choosing investments
to include in the Portfolio, we have emphasized several investment themes.
First, we've increased the Portfolio's average market capitalization. It's
evident that a certain number of large-cap stocks are needed as a "foundation of
stability" in the Portfolio, provided they meet our value criteria. With this in
mind, we added to our prominent investment positions in Philip Morris Companies
Inc. and AT&T Corp.
Given the condition of the marketplace, we're also more aggressively
searching for out-of-favor stocks with favorable operating fundamentals. Our
positions in the oil service industry like Diamond Offshore Drilling, Inc., R&B
Falcon Corporation, and Tidewater Inc. fit this profile, as does Trinity
Industries, Inc., an under-recognized company in the capital goods area.
We are, at the same time, reducing international exposure and emphasizing
companies with a domestic business profile. To that end, we've reduced the
Portfolio's exposure to technology and basic materials, areas where results are
dependent on falling commodity prices. We have maintained a healthy position in
the financial services sector, but are aware that this area is vulnerable to
overseas-related fears. Accordingly, we are buying issues like Conseco Inc., The
Allstate Corporation, Ambac Financial Group, Inc., and MGIC Investment
Corporation, all of which we believe are inexpensive and have little foreign
exposure.
Most importantly, perhaps, we are maintaining our commitment to "defense".
The Portfolio's overall allocation to equities reflects the discipline of our
asset allocation models. Presently, these models are proposing a fairly cautious
intermediate-term outlook, with a likelihood of continued volatility. In
addition, we're maintaining prominent investment positions in traditionally
defensive sectors such as electric utilities and real estate investment trusts,
or "REITs." Relative valuations on the REITs give these stocks solid potential,
and their high yield has the opportunity to provide current income and downside
protection.
[GRAPHIC] OUTLOOK
Our stock selection process and asset allocation models have provided
long-term investors with relatively stable returns that have been competitive
with the market indexes. Going forward, we expect our approach to continue to
reward investors, while providing downside protection in times of market
instability.
ARVID SACHDEVA JOHN C. RIAZZI
TACTICAL ASSET ALLOCATION PORTFOLIO
CO-PORTFOLIO MANAGERS
22 WRL SERIES FUND, INC.
<PAGE>
[DEAN LOGO]
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
[GRAPH]
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio versus the Standard & Poor's Index of 500 Common stocks (S&P) and the
Lehman Brothers Government/Corporate Intermediate Bond Index (LB) over the same
time frame.
PORTFOLIO S&P INDEX LB INDEX
--------- --------- --------
Inception 1/3/95 $10,000 $10,000 $10,000
Period Ended 12/31/95 $12,009 $13,758 $11,533
FYE 12/31/96 $13,741 $16,917 $12,000
FYE 12/31/97 $16,020 $22,560 $12,944
FYE 12/31/98 $173547 $29,008 $14,037
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WE BELIEVE THE WIDE VALUATION DISPARITY BETWEEN LARGE-CAP GROWTH STOCKS AND THE
REMAINDER OF THE MARKET HAS CREATED AN ENVIRONMENT WHERE EQUITY SELECTION IS
LIKELY TO BE A DOMINANT FACTOR.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 23
<PAGE>
C.A.S.E. GROWTH PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS ANNUAL GROWTH OF CAPITAL THROUGH INVESTMENTS IN COMPANIES WHOSE
MANAGEMENT, FINANCIAL RESOURCES AND FUNDAMENTALS APPEAR ATTRACTIVE.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
ADC Telecommunications, Inc. 6.06 %
Tellabs, Inc. 4.94 %
BMC Software, Inc. 4.75 %
MCI Worldcom, Inc. 4.14 %
CIENA Corporation 4.09 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Communications Equipment 18.2 %
Computer & Data Processing Services 16.8 %
Apparel & Accessory Stores 8.9 %
Telecommunications 7.7 %
Apparel Products 5.6 %
[GRAPHIC] MARKET ENVIRONMENT
This was the year of the high-growth rate, high-risk form of investing, with
psychology and liquidity far more important to the market than company
fundamentals. In this environment, a mere handful of large-cap stocks led the
market, leaving the performance of most other issues to trail well behind the
broad averages. With the market's leaders priced at levels that alarmed most
investment professionals, it's no surprise the majority of professional money
managers underperformed the indexes in 1998. We still believe the "golden rule"
of investing is that no stock should bear a price multiple greater than its
growth rate.
[GRAPHIC] PERFORMANCE
Against this backdrop, the C.A.S.E. Growth Portfolio languished relative to
its benchmark, the Wilshire 5000 Index which gained 21.72 %. For the year ended
December 31, 1998, the Portfolio posted a return of 2.47 %. The Standard and
Poor's Index of 500 Common Stocks returned 28.58 %.
[GRAPHIC] STRATEGY REVIEW
With many large-cap stocks trading at huge premiums to their expected growth
rates, we sought to shelter the Portfolio from earnings declines by changing our
strategic emphasis from large-cap growth to broad market value. Unfortunately,
the autumn selloff was so broad it affected all classes of stocks. During that
period we did raise our cash position to approximately 20 % of the Portfolio's
assets which allowed us accumulate in October a select group of high quality
stocks that had been hard hit. This contributed to the Portfolio's relatively
attractive average price-to-earnings multiple at period's end.
Within the Portfolio, our positions in basic industry, transport, and energy
bore the brunt of earnings disappointments this period. We still believe,
however, these sectors have innate characteristics that will enable them to
recover rapidly. Meanwhile there are other sectors, like discount retailers,
communication, electronics, and technology that may benefit from cheaper Asian
goods and a pick-up in consumer demand.
[GRAPHIC] OUTLOOK
In our opinion, the biggest negative for 1999 will be the year-over-year
earnings comparatives. In addition, foreign investments are lessening somewhat,
there is more volatility now between bonds and stocks, and the U.S. dollar
continues to weaken. If these trends continue, we believe they will contribute
to the slowdown in the U.S. and global economies. The good news, though, is that
money flowing in from individual investors remains positive and alternative
investments lack the excitement and returns of common stocks. If it's true that
over time, most stocks follow their fundamentals, 1999 should prove a good
period for our style of investing.
WILLIAM E. LANGE
PRESIDENT & CHIEF EXECUTIVE OFFICER
C.A.S.E. MANAGEMENT, INC.
24 WRL SERIES FUND, INC.
<PAGE>
[C.A.S.E. LOGO]
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
[GRAPH]
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.
PORTFOLIO WILSHIRE INDEX
--------- --------------
Inception 5/1/95 $10,000 $10,000
Period Ended 12/31/95 $12,065 $12,028
FYE 12/31/96 $14,176 $14,294
FYE 12/31/97 $16,306 $18,464
FYE 12/31/98 $16,709 $22,474
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WE SOUGHT TO SHELTER THE PORTFOLIO FROM EARNINGS DECLINES BY CHANGING OUR
STRATEGIC EMPHASIS FROM LARGE-CAP GROWTH TO BROAD MARKET VALUE.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 25
<PAGE>
GLOBAL SECTOR PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS GROWTH OF CAPITAL BY FOLLOWING AN ASSET ALLOCATION STRATEGY THAT SHIFTS
AMONG A WIDE RANGE OF ASSET CATEGORIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
U.S. Treasury Note 06/30/2001 12.94 %
U.S. Treasury Note 02/15/2004 6.66 %
U.S. Treasury Note 08/15/2004 5.03 %
U.S. Treasury Note 05/15/2007 4.36 %
Pacific Gas & Electric Company 03/01/2002 2.77 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
U.S. Government Obligations 29.0 %
Pharmaceuticals 5.5 %
Telecommunications 5.4 %
Computer & Office Equipment 4.6 %
Business Services 2.9 %
[GRAPHIC] MARKET ENVIRONMENT
As the year closed, domestic and international stock markets were rebounding
sharply from steep third quarter declines. The Standard and Poor's Index of 500
Common Stocks, the widely recognized U.S. equity benchmark composed primarily of
large-capitalization growth stocks, managed to end 1998 with its fourth straight
year of double-digit returns. Other asset categories turned in mixed
performances. Bonds were strong performers. The best returns were found in the
U.S. government sector of the bond market, which profited from its perceived
safety in the wake of global economic turmoil. Less traditional asset
categories, however, such as emerging markets and real estate, posted
disappointing returns for the year. With all of this, asset allocation was an
effective method of dampening market volatility in 1998.
[GRAPHIC] PERFORMANCE
Against this backdrop, the Global Sector Portfolio produced a total return of
9.83 % for the year ended December 31, 1998. By comparison, a 60 %/40 % blend of
the Financial Times World Index and the Lehman Hutton Aggregate Bond Index
appreciated 17.96 %. Individually, the Financial Times World Index returned
20.94 % and the Lehman Hutton Aggregate Bond Index returned 13.49 %.
[GRAPHIC] STRATEGY REVIEW
The Portfolio's active asset allocation strategy emphasized equity markets
throughout the year. Our bullish stance was based on our quantitative valuation
methodology, which indicated early in 1998 that many global equity markets were
undervalued. Domestically, the Portfolio benefited from a heavy exposure to
technology stocks. Stocks within the computer networking, computer peripheral,
and equipment semiconductor industries were top performers. Many leisure stocks
were also market leaders. Our positions in the restaurant, entertainment, and
tobacco industries all participated in the market's advance.
The international investments in the Portfolio focused on Europe and Asia.
Europe benefited from fiscal and monetary discipline brought on by the birth of
the European Monetary Unit. The combination of steady economic growth and low
interest rates created many attractive investment opportunities, as several
European stock markets outpaced the U.S. in 1998. Our current European holdings
include one European Union country, Germany, and one country that has yet to
join, Denmark. We were early investing into Japan, but remain optimistic on its
long-term prospects.
[GRAPHIC] OUTLOOK
While many of the leading large-capitalization stocks now appear overpriced,
we feel the market as a whole still looks undervalued. Our quantitative model,
which includes earnings, growth, risk, and interest rates, indicates that the
broad U.S. stock market and many foreign markets are still undervalued. Based on
our current valuations, the domestic areas with the best long-term potential
include middle- and small-capitalization value stocks. For their part,
international investments will likely remain targeted towards Europe and Asia.
We were consistent with our bullish posture during the volatile year of 1998,
and our optimism for global equities remains for 1999.
PATRICK BOYLE
GLOBAL SECTOR PORTFOLIO
PORTFOLIO MANAGER
26 WRL SERIES FUND, INC.
<PAGE>
[MERIDIAN LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. GLOBAL SECTOR PORTFOLIO, FINANCIAL TIMES WORLD INDEX, AND THE
LEHMAN HUTTON AGGREGATE BOND INDEX
[GRAPH]
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.
PORTFOLIO FT INDEX LH INDEX
--------- -------- --------
Inception 5/1/96 $10,000 $10,000 $10,000
Period Ended 12/31/96 $10,608 $10,473 $10,811
FYE 12/31/97 $10,972 $11,858 $12,421
FYE 12/31/98 $12,051 $14,341 $14,096
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
OUR QUANTITATIVE VALUATION METHODOLOGY, INDICATED EARLY IN 1998 THAT MANY GLOBAL
EQUITY MARKETS WERE UNDERVALUED.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
FOREIGN SECURITIES INVOLVE SPECIAL RISK DESCRIBED IN THE PROSPECTUS THAT SHOULD
BE CONSIDERED CAREFULLY BEFORE INVESTING.
1998 ANNUAL REPORT 27
<PAGE>
VALUE EQUITY PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS TOTAL RETURN WITH MINIMUM RISK TO PRINCIPAL BY INVESTING IN COMMON
STOCKS WITH ABOVE-AVERAGE STATISTICAL VALUE.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Phillip Morris Companies Inc. 6.64 %
Loews Corporation 4.92 %
First Union Corporation 3.82 %
Texas Instruments Incorporated 3.41 %
Wells Fargo & Company 3.39 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Commercial Banks 17.4 %
Insurance 9.0 %
Industrial Machinery & Equipment 8.8 %
Food & Kindred Products 6.6 %
Chemicals & Allied Products 4.8 %
[GRAPHIC] MARKET ENVIRONMENT
1998 was perhaps the most turbulent year in nearly a quarter century. After a
prolonged period of steady growth around the world, events began spinning out of
control early in the year. The fallout from the collapse of Asia's emerging
economies had, by far, the greatest impact on financial markets. Few investors
anticipated that the crisis would engulf Russia and parts of Latin American and
lead to chaos in credit markets throughout the world. Beyond this, the Asian
crisis triggered a collapse in the prices of virtually all commodities, oil
prices and agricultural commodity prices in particular.
Though large-capitalization averages like the Dow Jones Industrial Average
and the Standard and Poor's Index of 500 Common Stocks ("S&P 500") produced
record-setting results, there were record disparities in individual performance,
with growth stocks outpacing value stocks and large stocks outpacing small
stocks by a large margin. Results for 1998 weren't consistent, but in many ways,
world economic developments for the year were extraordinary.
[GRAPHIC] PERFORMANCE
Performance results for the Value Equity Portfolio reflect the dramatic
underperformance of value-oriented stocks versus the narrow list of
large-capitalization growth stocks that dominate the S&P 500. For the year ended
December 31, 1998, the Portfolio declined 4.78 %. The S&P 500, by comparison,
rose 28.58 %.
[GRAPHIC] STRATEGY REVIEW
Throughout the year, investment flows sought "safe" investments considered
immune from the world's near-term problems, creating a huge valuation disparity
between very large-capitalization growth stocks and virtually everything else.
While the extremely difficult economic and financial environment effectively
derailed our long held industrial theme in 1998, we have been gradually moving
the Portfolio away from its intense concentration on industrial and capital
goods stocks for more than two years. Many of our positions in the
industrial/cyclical/capital goods sectors have been reduced substantially, and
others eliminated completely. A number of new positions have been established
outside the industrial sector, including Philip Morris Companies Inc., Loews
Corporation, First Union Corporation, Time Warner Inc., Xerox Corporation, Delta
Air Lines, Inc., Aetna Inc., Bank One Corporation, Waste Management, Inc.,
Lockheed Martin Corporation, The Bear Stearns Companies, Inc., and American
Greetings Corporation.
[GRAPHIC] OUTLOOK
As investors become more comfortable with the outlook for economic growth
both in the U.S. and the rest of the world, we believe the risk premiums and
valuation disparities will recede, allowing the broad stock market to catch up
with 1998's narrow list of winners.
We fully recognize that we've been through a difficult year. With the benefit
of hindsight, we wish we had moved away from our prior investment theme more
rapidly. But we are moving in a new direction now, and will continue to do so
with the same dedication to the investment principles that have always guided
our long-term approach to value investing. Adherence to these disciplines has
proved profitable over a very long period of time and we have every confidence
that such a disciplined approach will continue to reward investors in the years
ahead.
EDWARD C. FRIEDEL
VALUE EQUITY PORTFOLIO
PORTFOLIO MANAGER
28 WRL SERIES FUND, INC.
<PAGE>
[NWQ LOGO]
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
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
Inception 5/1/96 $10,000 $10,000
Period Ended 12/31/96 $11,319 $11,500
FYE 12/31/97 $14,153 $15,337
FYE 12/31/98 $13,477 $19,720
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
RESULTS FOR 1998 WEREN'T CONSISTENT, BUT IN MANY WAYS,
WORLD ECONOMIC DEVELOPMENTS FOR THE YEAR WERE EXTRAORDINARY.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 29
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING PRIMARILY IN THE COMMON STOCK
OF FOREIGN ISSUERS TRADED ON OVERSEAS EXCHANGES.
Five Largest Holdings (% of Net Assets)
Axa 3.11 %
Nokia Oyj - Class A 2.97 %
ING Groep NV 2.65 %
Mannesmann AG 2.57 %
Preussag AG 2.37 %
Five Largest Industries (% of Net Assets)
Commercial Banks 14.3 %
Telecommunications 8.0 %
Pharmaceuticals 5.7 %
Food Stores 5.6 %
Communications Equipment 5.2 %
[GRAPHIC] MARKET ENVIRONMENT
1998 was a volatile period in international equity markets. The third quarter
collapse of the Russian economy affected the global banking sector and every
emerging market. Equity and bond investors reacted positively when central
bankers began cutting interest rates in an attempt to restore stability. The
resulting rally in equity markets left many market indexes at year-end levels
that made it look as if the turmoil of the third quarter had never happened.
[GRAPHIC] PERFORMANCE
In this environment, the International Equity Portfolio produced a total
return of 12.85 %. By comparison, the Morgan Stanley Capital International
(EAFE) Index returned 13.13 % and the Morgan Stanley Capital International World
(excl. United States) Index returned 12.36 %.
[GRAPHIC] STRATEGY REVIEW
SCOTTISH EQUITABLE INVESTMENT MANAGEMENT LIMITED:
While asset allocation had a relatively neutral effect this year, we were
adversely impacted by relatively poor equity selection in Europe and by the
strengthening of the yen against the dollar. In Europe, the sudden deterioration
of economic conditions over the summer resulted in a number of the stocks
reporting profits which surprised and disappointed the market. As a consequence,
stock selection was particularly hazardous in the second half of the year. The
sudden strength of the yen was entirely unexpected and, in many ways, has
exacerbated the rise of the Japanese currency.
GE INVESTMENT MANAGEMENT INCORPORATED:
Despite global market volatility, our strategy of focusing on the long-term
fundamentals of individual companies was justified when European markets
recovered in the fourth quarter and our European stocks outperformed.
Performance was affected slightly because we were underweighted in the Japanese
equity market, where the yen rose sharply against the dollar in the fourth
quarter. Japan's underlying market fundamentals continue to deteriorate. The
strong yen made exports more expensive, which negatively affected corporate
earnings. Our top performers included Nokia Oyj, the Finnish cellular telephone
manufacturer, AXA, a French insurance company, and Mannesmann AG, a German
industrial manufacturing company.
[GRAPHIC] OUTLOOK
SCOTTISH EQUITABLE INVESTMENT MANAGEMENT LIMITED:
Overall, we are reasonably positive on the investment outlook for 1999, but a
note of caution is required. The performance from most major equity and bond
markets in recent years has been very good and it is unlikely that returns of
the magnitude we have seen can be sustained. In a low inflation environment,
lower nominal returns should be anticipated, therefore, we expect returns in
most markets this year to be lower than in 1998. Nevertheless, with inflation
and interest rates remaining at low levels, we still believe it makes sense to
stay fully invested.
GE INVESTMENT MANAGEMENT INCORPORATED:
Looking ahead, we are entering a deflationary era, an environment where few
investors have experience. Prices are falling in many areas, including
commodities such as crude oil, metals, and agriculture. These prices bear
careful watching because developing nations, which depend on primary products
for economic wealth, also tend to be the swing factor in economic recoveries.
The European Monetary Union's January 1 debut will continue to be a catalyst for
industry consolidation in the 11 participating countries. We are well positioned
to benefit from consolidations in the banking, insurance, automotive and retail
segments. Since it seems unlikely that Japan will solve its economic problems in
the near term, the Portfolio will continue to have a small exposure in Japanese
stocks.
RUSSELL HOGAN RALPH LAYMAN
SCOTTISH EQUITABLE INVESTMENT GE INVESTMENT
MANAGEMENT LIMITED MANAGEMENT INCORPORATED
FOR THE INVESTMENT PORTFOLIO MANAGER
MANAGEMENT BOARD
INTERNATIONAL EQUITY PORTFOLIO
CO-PORTFOLIO MANAGEMENT
30 WRL SERIES FUND, INC.
<PAGE>
[SCOTTISH EQUITABLE & GE INVESTMENTS LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. INTERNATIONAL EQUITY PORTFOLIO, THE MORGAN STANLEY CAPITAL INTERNATIONAL
(EAFE) INDEX, AND THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD (EXCL. UNITED
STATES) INDEX
[GRAPH]
Mountain graph depicting the change in value of a $10,000 investment in the
portfolio since inception versus the Morgan Stanley Capital International (EAFE)
Index, and the Morgan Stanley Capital International World (excl. United States)
Index over the same time frame.
MSCI MSCI
PORTFOLIO (EAFE) (exc. US)
--------- ------- ---------
Inception 1/2/97 $10,000 $10,000 $10,000
Period Ended 12/31/97 $10,750 $9,993 $10,018
FYE 12/31/98 $12,131 $11,305 $11,255
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
STOCK SELECTION WAS PARTICULARLY HAZARDOUS
IN THE SECOND HALF OF THE YEAR.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
FOREIGN SECURITIES INVOLVE SPECIAL RISK DESCRIBED IN THE PROSPECTUS THAT SHOULD
BE CONSIDERED CAREFULLY BEFORE INVESTING.
1998 ANNUAL REPORT 31
<PAGE>
U.S. EQUITY PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM GROWTH OF CAPITAL BY INVESTING IN EQUITY SECURITIES OF U.S.
COMPANIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Citigroup Inc. 2.76 %
Merck & Co., Inc. 2.51 %
Bristol-Myers Squibb Company 2.43 %
International Business
Machines Corporation 2.07 %
Fannie Mae 1.93 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Pharmaceuticals 13.8 %
Computer & Office Equipment 8.1 %
Telecommunications 7.4 %
Insurance 5.5 %
Computer & Data Processing Services 4.2 %
[GRAPHIC] MARKET ENVIRONMENT
In a narrow market environment where a few large companies, notably in
technology, did extremely well, the Portfolio modestly underperformed the
Standard and Poor's Index of 500 Common Stocks ("S&P 500"). As it turned out,
investors gave a fairly short list of companies, notably, again, in technology,
extremely high valuations. Although the Portfolio includes strong technology
stocks like Cisco Systems, Inc. and International Business Machines Corporation,
it was underweighted in the sector because of concerns about the extremely high
valuations these stocks have been given.
[GRAPHIC] PERFORMANCE
For the year ended December 31, 1998, the U.S. Equity Portfolio returned
22.87 % which compares very favorable with its peer group. The
capitalization-weighted S&P 500, the Portfolio's benchmark index posted a 28.58
% gain for the same period.
[GRAPHIC] STRATEGY REVIEW
Strong performances by consumer stocks helped the Portfolio outperform its
peers. Healthcare issues such as Allergan, Inc., R.P. Scherer Corporation and
Watson Pharmaceuticals, Inc. did well because their earnings are less affected
by market cycles. With consumer confidence high and unemployment low, holdings
in home improvement retailers like The Home Depot, Inc., and Lowe's Companies,
Inc., and other retailers like Wal-Mart Stores, Inc., and Dayton Hudson
Corporation, posted excellent returns. Comcast Corporation, a media company, did
well for similar reasons.
In contrast, the Portfolio's energy stock sector underperformed because oil
prices stayed down longer than expected. Factors such as colder weather,
production cutbacks within the Organization of Petroleum Exporting Countries and
a possible increase in demand from Asia may reverse the inventory overhand and
resulting price weaknesses.
[GRAPHIC] OUTLOOK
Looking ahead, we foresee a healthy United States economy fueled by low
inflation, high consumer confidence, job growth, and another Federal budget
surplus. Although domestic and global growth may slow from the double-digit pace
of the past four years, signs of recession are few. Businesses, however, are
likely to find it challenging to raise prices. In this environment, investors
will reward companies that can increase their profits without raising prices.
EUGENE BOLTON
U.S. EQUITY PORTFOLIO
PORTFOLIO MANAGER
32 WRL SERIES FUND, INC.
<PAGE>
[GE INVESTMENTS LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
U.S. EQUITY PORTFOLIO AND THE STANDARD & POOR'S INDEX OF 500 COMMON STOCKS
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
Inception 1/2/97 $10,000 $10,000
Period Ended 12/31/97 $12,701 $13,336
FYE 12/31/98 $15,606 $17,148
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WE FORESEE A HEALTHY UNITED STATES ECONOMY FUELED BY LOW INFLATION, HIGH
CONSUMER CONFIDENCE, JOB GROWTH, AND ANOTHER FEDERAL BUDGET SURPLUS.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 33
<PAGE>
THIRD AVENUE VALUE PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM CAPITAL APPRECIATION BY INVESTING EQUITY SECURITIES OF
WELL-FINANCED COMPANIES BELIEVED TO BE PRICED BELOW THEIR PRIVATE MARKET VALUES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
3Com Corporation 7.33 %
FSI International, Inc. 4.55 %
Financial Security Assurance Holdings Ltd. 4.47 %
Mitsui Marine & Fire
Insurance Company, Ltd. 4.41 %
Toyoda Automatic Loom Works, Ltd. 4.28 %
FIVE LARGEST INDUSTRIES (% OF NET ASSETS)
Industrial Machinery & Equipment 24.4 %
Insurance 22.4 %
Computer & Office Equipment 8.8 %
Electronic Components &
Accessories 4.6 %
Medical Instruments & Supplies 4.3 %
[GRAPHIC] MARKET ENVIRONMENT
Extreme volatility characterized security prices across a variety of markets
for virtually the entire period. In its bouts of irrationality, however, the
market afforded some excellent opportunities to accumulate investments at very
attractive prices. While share prices of many of the Portfolio's holdings
rebounded nicely from the depressed levels they had reached earlier in the year,
they nevertheless remain undervalued, at least when measured by the ratio of
public market share prices to corporate business values.
[GRAPHIC] PERFORMANCE
The Third Avenue Value Portfolio, which commenced operations January 2 of
this year, declined 6.84 % through December 31, 1998. The Standard and Poor's
Index of 500 Common Stocks gained 28.58 % for the same period. I believe the
Portfolio's sub-par performance is a measure indicating that terrific values
became even more terrific as the common stocks of strong business with large,
long-term potential became even more attractively priced than when they were
acquired initially.
[GRAPHIC] STRATEGY REVIEW
In the fourth quarter, we closed out our remaining position in Japanese bank
common stocks at a loss. In acquiring stocks in this sector, I had hoped to
replicate the enormous success of investing in troubled U.S. depository
institutions in the early 1990s. This seems to have been especially faulty
analysis on my part. As it turns out, there was never any chance these stocks
could have been like their U.S. counterparts. And though I now have the benefit
of hindsight, I really think I should have known better.
On the other hand, our investments in Japanese non-life insurance companies
far outperformed relevant indexes. The experience for the Portfolio's
investments in semiconductor equipment common stocks seems to have been similar.
This is the way it should be. First, the companies in which we invest enjoy
exceptional strength. As such, they are unlikely to be victimized by dramatic,
adverse, unpredictable business changes. Second, if there is no evidence of
permanent impairment of capital, we average down by increasing our positions in
solid companies at lower and lower prices.
[GRAPHIC] OUTLOOK
Many of the factors that negatively impacted performance during the year were
reversed and ultimately created buying opportunities. As we move into 1999, we
are even more encouraged with the Portfolio and our approach to investing. There
is a great deal of comfort in investing using a balanced approach and it seems
particularly appropriate for investors with true long-term goals. If we do the
analysis right, long-term performance for the Portfolio should be satisfactory.
I remain optimistic about our current holdings, both in terms of quality and in
terms of appreciation potential.
MARTIN J. WHITMAN
THIRD AVENUE VALUE PORTFOLIO
PORTFOLIO MANAGER
34 WRL SERIES FUND, INC.
<PAGE>
[THIRD AVENUE FUNDS LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND,
INC. THIRD AVENUE VALUE PORTFOLIO AND THE STANDARD & POOR'S INDEX OF 500 COMMON
STOCKS
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
Inception 1/2/98 $10,000 $10,000
Period Ended 12/31/98 $9,316 $12,858
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost.
This performance information must be accompanied by the quarterly performance
reports as of the most recent calendar quarter for the appropriate variable
annuity products showing average annual and cumulative total returns of the
respective products, net of fees and charges, including mortality and expense
risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
MANY OF THE FACTORS THAT NEGATIVELY IMPACTED PERFORMANCE DURING THE YEAR WERE
REVERSED AND ULTIMATELY CREATED BUYING OPPORTUNITIES.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
FOREIGN SECURITIES INVOLVE SPECIAL RISK DESCRIBED IN THE PROSPECTUS THAT SHOULD
BE CONSIDERED CAREFULLY BEFORE INVESTING.
1998 ANNUAL REPORT 35
<PAGE>
REAL ESTATE SECURITIES PORTFOLIO
FOR THE YEAR ENDED DECEMBER 31, 1998
...SEEKS LONG-TERM TOTAL RETURN FROM INVESTING PRIMARILY IN EQUITY SECURITIES OF
REAL ESTATE COMPANIES.
FIVE LARGEST HOLDINGS (% OF NET ASSETS)
Equity Office Properties Trust 9.07 %
Equity Residential Properties Trust 6.79 %
Simon Property Group, Inc. 6.71 %
Arden Realty, Inc. 5.76 %
National Golf Properties, Inc. 4.81 %
[GRAPHIC] MARKET ENVIRONMENT
The real estate investment trust ("REIT") market began a slow decent in the
first quarter of 1998. During the second quarter, the capital markets for REITs
began to contract with only a hint of what was just around the
corner--performance continued to slide with the group posting an even larger
negative return. REITs suffered again with the broader market in the third
quarter, recording another, and larger, loss for the period. But unlike the
broader markets that rallied in the fourth quarter, REITs continued their slide.
All told, the Morgan Stanley REIT Index ended the year with a (16.9)% return.
[GRAPHIC] PERFORMANCE
From its inception May 1, 1998 through December 31, 1998, the Real Estate
Securities Portfolio declined 14.93 %. For the same period, the Morgan Stanley
REIT Index declined 13.23 %. These returns are, of course, in sharp contrast to
the performance of the Standard and Poor's Index of 500 Common Stocks which
gained 11.71 % for the same period.
[GRAPHIC] STRATEGY REVIEW
Bad news plagued the industry as international economies crumbled. The
collapse and bail out of hedge fund Long Term Capital Management caused a near
complete shut-down in lending from the Commercial Mortgage Backed Securities
markets, a prime source of capital for REITs.
Our underperformance for the period was the result of over-weight positions
in Starwood Hotels & Resorts, Crescent Real Estate Equities Company, and Simon
Property Group, Inc. Our lack of exposure to Duke Realty Investment in the
office/industrial sector also hurt performance.
[GRAPHIC] OUTLOOK
A simplified way to look at the expected return for REIT's is to combine the
current dividend yield with the estimated growth in earnings. Given the yield on
the Morgan Stanley REIT Index at year end and analysts' consensus estimates for
growth in funds from operations in 1999, future investment returns for the group
appear to be favorable. So while performance for REIT's in 1998 was
disappointing, we think there is a silver lining.
Meanwhile, supply and demand fundamentals remain in balance and the U.S.
economy continues to grow. Continuous new job growth should spur further demand
for office and industrial space which in turn could result in upward pressure on
rental rates. With equity markets recording double-digit returns for the past
four years, the need for diversification in an investment portfolio has rarely
been more apparent. We believe REIT's offer such diversification and performance
expectations appear strong.
DANIEL P. O'CONNOR
REAL ESTATE SECURITIES PORTFOLIO
PORTFOLIO MANAGER
36 WRL SERIES FUND, INC.
<PAGE>
[J.P. MORGAN INVESTMENTS LOGO]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE WRL SERIES FUND, INC.
REAL ESTATE SECURITIES PORTFOLIO AND THE MORGAN STANLEY REIT INDEX
[GRAPH]
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.
PORTFOLIO S&P INDEX
--------- ---------
Inception 5/1/98 $10,000 $10,000
Period Ended 12/31/98 $8,507 $8,677
* Inception
The Portfolio's investment return and net asset value per share will fluctuate.
Past performance does not guarantee future results. Investor's units, when
redeemed, may be worth more or less than their original cost. This performance
information must be accompanied by the quarterly performance reports as of the
most recent calendar quarter for the appropriate variable annuity products
showing average annual and cumulative total returns of the respective products,
net of fees and charges, including mortality and expense risk charge.
For variable universal life insurance, please refer to the hypothetical
illustrations in the prospectus, which show the effect on performance of all
charges that may apply to a policy. You may wish to obtain a personalized
illustration, which reflects all the charges that apply to a policy.
WITH EQUITY MARKETS RECORDING DOUBLE-DIGIT RETURNS FOR THE PAST
FOUR YEARS, THE NEED FOR DIVERSIFICATION IN AN
INVESTMENT PORTFOLIO HAS RARELY BEEN MORE APPARENT.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S CURRENT PROSPECTUS.
1998 ANNUAL REPORT 37
<PAGE>
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (13.65 %)
Federal Maritime Commission
4.50 %, due 01/04/1999 .............. $ 23,185 $ 23,173
--------
Total Short-Term U.S.
Government Obligations
(cost: $ 23,173)................................... 23,173
--------
COMMERCIAL PAPER (26.60 %)
CHEMICALS & ALLIED PRODUCTS (4.65 %)
Monsanto Company - 144A (b)
5.00 %, due 04/06/1999 .............. 8,000 7,894
COMMERCIAL BANKS (3.52 %)
NationsBank Corporation
5.50 %, due 02/02/1999 .............. 6,000 5,971
FINANCE (12.58 %)
CXC Inc. - 144A (b)
5.08 %, due 03/15/1999 .............. 8,500 8,412
Province of Quebec
5.50 %, due 01/11/1999 .............. 4,000 3,994
Province of Quebec
5.04 %, due 03/15/1999 .............. 2,000 1,980
San Paolo US Financial Company
5.49 %, due 02/08/1999 .............. 7,000 6,959
PERSONAL CREDIT INSTITUTIONS (5.85 %)
Associates First Capital Corporation
5.03 %, due 02/16/1999 .............. 10,000 9,936
--------
Total Commercial Paper
(cost: $ 45,146).................................. 45,146
--------
SHORT-TERM OBLIGATIONS (39.59 %)
BEVERAGES (3.53 %)
PepsiCo, Inc. (a)
5.21 %, due 08/19/1999 .............. 6,000 5,996
BUSINESS CREDIT INSTITUTIONS (3.65 %)
The CIT Group, Inc. (a)
4.95 %, due 10/20/1999 .............. 6,200 6,200
COMMERCIAL BANKS (19.45 %)
American Express Centurion Bank (a)
5.53 %, due 05/07/1999 .............. 1,000 1,000
American Express Centurion Bank (a)
5.48 %, due 08/13/1999 .............. 5,000 5,000
Bank One Corporation (a)
5.24 %, due 08/04/1999 .............. 7,000 7,000
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM OBLIGATIONS (CONTINUED)
COMMERCIAL BANKS (CONTINUED)
First Union Corporation (a)
5.48 %, due 05/14/1999 .............. $ 5,000 $ 5,000
First Union National Bank (a)
5.21 %, due 10/25/1999 .............. 4,000 4,000
KeyBank National Association (a)
4.84 %, due 09/03/1999 .............. 7,000 6,999
KeyBank National Association (a)
5.57 %, due 10/15/1999 .............. 2,000 2,000
The Bank of New York
Company, Inc.
5.64 %, due 03/26/1999 .............. 2,000 2,000
FINANCE (4.12 %)
Abbey National Treasury Services (a)
5.17 %, due 06/01/1999 ................ 5,000 4,998
Asset-Backed Securities Investment
Trust - 144A (a) (b)
5.54 %, due 08/15/1999 .............. 2,000 2,000
PERSONAL CREDIT INSTITUTIONS (8.84 %)
Beneficial Corporation (a)
5.41 %, due 10/12/1999 .............. 5,000 5,003
General Electric Capital
Corporation (a)
4.86 %, due 05/04/1999 .............. 5,000 5,000
General Motors Acceptance
Corporation (a)
5.20 %, due 07/06/1999 ................ 5,000 4,998
--------
Total Short-Term Obligations
(cost: $ 67,194)..................................
67,194
--------
CERTIFICATES OF DEPOSITS (19.44 %)
Bank of America National Trust &
Savings Association
5.63 %, due 02/26/1999 .............. 2,000 2,000
Bank of Nova Scotia (a)
5.45 %, due 06/07/1999 .............. 5,000 4,998
Bankers Trust Company (a)
5.07 %, due 05/14/1999 .............. 5,000 4,999
Commerzbank AG
5.67 %, due 03/05/1999 .............. 3,000 3,000
Deutsche Bank AG
5.73 %, due 04/15/1999 .............. 3,000 3,000
Rabobank Nederland NV - NY
5.62 %, due 02/03/1999 .............. 5,000 4,999
Societe Generale - NY (a)
5.54 %, due 05/26/1999 .............. 5,000 4,999
Swiss Bank Corporation - NY
5.64 %, due 03/23/1999 .............. 2,000 2,000
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
38 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CERTIFICATES OF DEPOSITS (CONTINUED)
Toronto-Dominion Bank - NY
5.65 %, due 07/24/1999 .................. $ 3,000 $ 2,999
---------
Total Certificates of Deposits
(cost: $ 32,994)..................................... 32,994
---------
Total Investment Securities
(cost: $ 168,507).................................... $ 168,507
=========
SUMMARY
Investments, at market value .......... 99.28 % $ 168,507
Other assets in
excess of liabilities ............... 0.72 % 1,224
-------- ---------
Net assets ............................ 100.00 % $ 169,731
======== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Floating rate note. Rate listed is as of December 31, 1998.
(b) Securities are registered pursuant to Rule 144A and may be deemed
to be restricted for resale.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 39
<PAGE>
SCHEDULE OF INVESTMENTS
BOND PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (26.07 %)
U.S. Treasury Bond
7.25 %, due 05/15/2016 ......... $ 5,000 $ 6,055
U.S. Treasury Bond
6.25 %, due 08/15/2023 ......... 5,000 5,593
U.S. Treasury Bond
6.50 %, due 11/15/2026 ......... 6,000 6,983
U.S. Treasury Note
5.75 %, due 10/31/2002 ......... 7,000 7,255
U.S. Treasury Note
5.25 %, due 08/15/2003 ......... 2,000 2,050
U.S. Treasury Note (a)
6.50 %, due 05/15/2005 ......... 5,000 5,477
U.S. Treasury Note (a)
6.63 %, due 05/15/2007 ......... 5,000 5,633
U.S. Treasury Note (a)
6.13 %, due 08/15/2007 ......... 5,000 5,470
-------
Total U.S. Government Obligations
(cost: $ 42,793)............................. 44,516
-------
U.S. GOVERNMENT AGENCY OBLIGATIONS (2.97 %)
Federal Home Loan Bank
5.50 %, due 08/13/2001 ......... 5,000 5,076
-------
Total U.S. Government Agency Obligations
(cost: $ 5,092).............................. 5,076
-------
MORTGAGE-BACKED SECURITIES (2.85 %)
Aetna Commercial Mortgage Trust
1997-ALIC
6.71 %, due 01/15/2006 ......... 2,500 2,592
CBM Funding Corporation
7.08 %, due 11/01/2007 ......... 2,150 2,275
-------
Total Mortgage-Backed Securities
(cost: $ 4,817).............................. 4,867
-------
ASSET-BACKED SECURITIES (5.55 %)
AmeriCredit Automobile
Receivables Trust 1996-D
6.30 %, due 05/12/2002 ......... 1,500 1,528
CIT RV Trust 1998-A
6.09 %, due 03/15/2012 ......... 2,000 2,035
Citibank Credit Card Master
Trust I 1998-2
6.05 %, due 01/15/2010 ......... 2,000 2,042
CSXT Trade Receivable Master
Trust 1998-1
6.00 %, due 07/26/2004 ......... 2,000 2,037
ICON Equipment Lease Grantor
Trust 1998-A
6.19 %, due 09/15/2006 ......... 1,817 1,838
-------
Total Asset-Backed Securities
(cost: $ 9,288).............................. 9,480
-------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CORPORATE DEBT SECURITIES (57.77 %)
AUTO REPAIR, SERVICES & PARKING (1.57 %)
Ryder System, Inc.
9.25 %, due 05/15/2001 ......... $ 2,500 $ 2,678
AUTOMOTIVE (5.05 %)
Daimler-Benz of North America, Inc.
7.38 %, due 09/15/2006 ......... 2,000 2,238
Ford Motor Credit Company
6.75 %, due 08/15/2008 ......... 2,000 2,165
General Motors Corporation
7.13 %, due 05/01/2003 ......... 4,000 4,220
BUSINESS CREDIT INSTITUTIONS (2.38 %)
FINOVA Capital Corporation
6.50 %, due 07/28/2002 ......... 2,000 2,018
Heller Financial, Inc.
6.44 %, due 10/06/2002 ......... 2,000 2,040
CHEMICALS & ALLIED PRODUCTS (1.80 %)
Praxair, Inc.
6.90 %, due 11/01/2006 ......... 3,000 3,071
COMMERCIAL BANKS (10.31 %)
Den Danske Bank - 144A (b)
6.38 %, due 06/15/2008 ......... 2,500 2,463
Golden State Bancorp Inc. - 144A (b)
7.13 %, due 08/01/2005 ........... 1,500 1,479
NationsBank Corporation
7.50 %, due 09/15/2006 ......... 3,000 3,304
PNC Bank Corp.
6.88 %, due 07/15/2007 ......... 2,000 2,153
Skandinaviska Enskilda
Banken - 144A (b) (c)
6.50 %, due 12/29/2049 ......... 2,000 1,952
Swiss Bank Corporation
6.75 %, due 07/15/2005 ......... 2,000 2,103
Swiss Bank Corporation
7.00 %, due 10/15/2015 ......... 2,000 2,063
The Bank of New York
Company, Inc.
6.63 %, due 06/15/2003 ......... 2,000 2,088
COMPUTER & OFFICE EQUIPMENT (1.25 %)
International Business Machines
Corporation
7.25 %, due 11/01/2002 ......... 2,000 2,135
DEPARTMENT STORES (2.55 %)
J. C. Penney Company, Inc.
7.60 %, due 04/01/2007 ......... 2,000 2,200
Sears Roebuck Acceptance
Corporation
7.00 %, due 06/15/2007 ......... 2,000 2,153
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
40 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
BOND PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CORPORATE DEBT SECURITIES (CONTINUED)
ELECTRIC, GAS & SANITARY SERVICES (1.15 %)
United Utilities PLC
6.88 %, due 08/15/2028 ................... $ 2,000 $ 1,963
ENVIRONMENTAL SERVICES (1.46 %)
Waste Management, Inc.
6.13 %, due 07/15/2001 ................... 2,500 2,497
FINANCE (12.55 %)
AT&T Capital Corporation
7.50 %, due 11/15/2000 ................... 2,000 2,030
Fannie Mae
5.25 %, due 01/15/2003 ................... 5,000 5,041
Fannie Mae (a)
5.75 %, due 06/15/2005 ................... 5,000 5,183
Fannie Mae (a)
5.75 %, due 02/15/2008 ................... 5,000 5,186
Fannie Mae
7.00 %, due 08/25/2010 ................... 2,000 2,087
Federal National Conversion Issue
6.00 %, due 06/01/2013 ................... 1,914 1,919
FOOD & KINDRED PRODUCTS (1.21 %)
CPC International, Inc.
6.15 %, due 01/15/2006 ................... 2,000 2,068
GAS PRODUCTION & DISTRIBUTION (1.25 %)
Tennessee Gas Pipeline Company
7.50 %, due 04/01/2017 ................... 2,000 2,129
MORTGAGE BANKERS AND BROKERS (3.64 %)
Captiva Finance Ltd. - 144A (b)
6.86 %, due 11/30/2009 ................... 2,000 2,100
Countrywide Home Loans, Inc.
5.62 %, due 10/16/2000 ................... 2,000 1,994
The Money Store Inc.
7.30 %, due 12/01/2002 ................... 2,000 2,118
OIL & GAS EXTRACTION (0.57 %)
Mitchell Energy & Development
Corp.
6.75 %, due 02/15/2004 ................... 1,000 976
PERSONAL CREDIT INSTITUTIONS (0.68 %)
Capital One Bank
6.74 %, due 05/31/1999 ................... 250 251
Capital One Bank
6.42 %, due 11/12/1999 ................... 500 504
Capital One Bank
6.66 %, due 06/19/2000 ................... 400 408
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CORPORATE DEBT SECURITIES (CONTINUED)
PETROLEUM REFINING (1.30 %)
Texaco Capital Inc.
7.09 %, due 02/01/2007 ................... $ 2,000 $ 2,213
PRINTING & PUBLISHING (1.24 %)
Tribune Company
6.88 %, due 11/01/2006 ................... 2,000 2,115
RAILROADS (0.62 %)
CSX Corporation
7.25 %, due 05/01/2004 ................... 1,000 1,064
RUBBER & MISC. PLASTIC PRODUCTS (0.63 %)
Rubbermaid Incorporated
6.60 %, due 11/15/2006 ................... 1,000 1,074
SECURITY & COMMODITY BROKERS (3.66 %)
Lehman Brothers Inc.
6.38 %, due 10/23/2000 ................... 2,050 2,053
Merrill Lynch & Co., Inc.
6.56 %, due 12/16/2007 ................... 2,000 2,100
Morgan Stanley Dean
Witter and Co.
6.88 %, due 03/01/2007 ................... 2,000 2,100
TELECOMMUNICATIONS (0.94 %)
MCI WORLDCOM, Inc.
6.95 %, due 08/15/2006 ................... 1,500 1,601
WHOLESALE TRADE NONDURABLE GOODS (1.96 %)
SYSCO Corporation
7.25 %, due 04/15/2007 ................... 3,000 3,345
---------
Total Corporate Debt Securities
(cost: $ 95,251)...................................... 98,642
---------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (1.76 %)
Federal Maritime Commission
5.10 %, due 01/07/1999 ................... 3,000 2,997
---------
Total Short-Term U.S.
Government Obligations
(cost: $ 2,997)....................................... 2,997
---------
Total Investment Securities
(cost: $ 160,238).....................................
$ 165,578
=========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 41
<PAGE>
SCHEDULE OF INVESTMENTS
BOND PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
SUMMARY
Investments, at market value ......... 96.97 % $ 165,578
Other assets in
excess of liabilities .............. 3.03 % 5,166
----- ---------
Net assets ........................... 100.00 % $ 170,744
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 22,219. See
footnote 1F to the financial statements.
(b) Securities are registered pursuant to Rule 144A and may be deemed to be
restricted for resale.
(c) Variable rate note. Rate listed is as of December 31, 1998.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
42 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CONVERTIBLE BONDS (0.01 %)
ELECTRONIC COMPONENTS & ACCESSORIES (0.01 %)
Lernout & Hauspie Speech
Products NV - 144A (c)
8.00 %, due 11/15/2001 ............ $ 148 $ 440
--------
Total Convertible Bonds
(cost: $ 148)........................................ 440
--------
NUMBER OF MARKET
SHARES VALUE
--------- ------
PREFERRED STOCKS (0.03 %)
COMPUTER & DATA PROCESSING SERVICES (0.03 %)
SAP AG - Vorzug ......................... 1,665 $ 795
--------
Total Preferred Stocks
(cost: $ 727)........................................ 795
--------
COMMON STOCKS (88.35 %)
BEVERAGES (0.99 %)
Coca-Cola Company ....................... 455,850 30,485
COMMERCIAL BANKS (2.69 %)
Banca Commerciale Italiana .............. 6,818,345 47,246
Firstar Corporation ..................... 384,435 35,849
COMMUNICATION (1.01 %)
Comcast Corporation - Class A ........... 516,735 30,326
Level 3 Communications, Inc. (a) (b)..... 17,850 770
COMMUNICATIONS EQUIPMENT (6.99 %)
Newbridge Networks
Corporation (a) ....................... 11,960 363
Nokia Oyj - Sponsored ADR (b) ........... 1,574,250 189,599
Tekelec (a) ............................. 11,965 198
Tellabs, Inc. (a) (b) ................... 371,710 25,485
ViaSat, Inc. (a) ........................ 20,000 201
COMPUTER & DATA PROCESSING SERVICES (16.03 %)
America Online, Inc. (a) ................ 1,555,345 248,855
BMC Software, Inc. (a) .................. 28,705 1,279
Cadence Design Systems, Inc. (a) ........ 65,820 1,958
Cambridge Technology
Partners, Inc. (a) .................... 8,975 199
Citrix Systems, Inc. (a) ................ 4,190 407
Compuware Corporation (a) ............... 11,400 891
Concord Communications, Inc. (a)......... 8,905 505
Electronic Data Systems
Corporation ........................... 9,750 490
Intuit Inc. (a) ......................... 3,585 260
J.D. Edwards & Company (a) (b) .......... 292,420 8,297
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
COMPUTER & DATA PROCESSING SERVICES (CONTINUED)
Legato Systems, Inc. (a) ................ 13,780 $ 909
Microsoft Corporation (a) ............... 1,612,350 223,613
SAP AG - Sponsored ADR (b) .............. 2,990 108
Sapient Corporation (a) (b) ............. 32,785 1,836
VERITAS Software Corporation (a) ........ 58,018 3,477
Visio Corporation (a) ................... 22,710 830
Whittman-Hart, Inc. (a) ................. 29,800 823
COMPUTER & OFFICE EQUIPMENT (13.11 %)
Ascend Communications,
Inc. (a) (b) .......................... 14,935 982
Cisco Systems, Inc. (a) ................. 1,245,715 115,618
Dell Computer Corporation (a) ........... 3,864,625 282,842
EMC Corporation (a) ..................... 17,960 1,527
Hewlett-Packard Company ................. 2,985 204
International Business Machines
Corporation ........................... 7,050 1,302
Sun Microsystems, Inc. (a) .............. 24,910 2,133
DEPARTMENT STORES (0.77 %)
Fred Meyer, Inc. (a) .................... 394,420 23,764
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (4.25 %)
General Electric Company ................ 1,283,690 131,017
ELECTRONIC COMPONENTS & ACCESSORIES (4.21 %)
JDS FITEL Inc. (a) ...................... 37,579 930
Micron Technology, Inc. (a) (b) ......... 18,995 960
PMC-Sierra, Inc. (a) .................... 12,285 775
Texas Instruments Incorporated .......... 1,390,355 118,962
Uniphase Corporation (a) ................ 22,595 1,568
Vitesse Semiconductor
Corporation (a) ....................... 16,800 767
Xilinx, Inc. (a) ........................ 89,745 5,845
ENGINEERING & MANAGEMENT SERVICES (0.02 %)
META Group, Inc. (a) .................... 20,212 601
FINANCE (1.05 %)
Freddie Mac ............................. 505,025 32,543
FOOD STORES (2.63 %)
Safeway Inc. (a) ........................ 1,329,930 81,043
MANUFACTURING INDUSTRIES (0.02 %)
Mattel, Inc. (b) ........................ 22,670 517
MEDICAL INSTRUMENTS & SUPPLIES (1.23 %)
Medtronic, Inc. (b) ..................... 509,510 37,831
Photoelectron Corporation (a) (b) ....... 56,850 249
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 43
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
MOTION PICTURES (1.85 %)
Time Warner Inc. (b) ..................... 920,430 $ 57,124
PERSONAL CREDIT INSTITUTIONS (1.94 %)
American Express Company ................... 585,975 59,916
PHARMACEUTICALS (19.01 %)
American Home Products
Corporation ............................. 737,470 41,529
Astra AB - Class A Free ................... 518,890 10,630
Astra AB - Sponsored ADR (b) .............. 59,665 1,234
Bristol-Myers Squibb Company .............. 444,983 59,544
Elan Corporation PLC -
Sponsored ADR (a) (b) ................... 832,505 57,911
Eli Lilly and Company ..................... 1,272,425 113,087
Pfizer Inc. ............................... 1,232,700 154,627
SmithKline Beecham PLC -
Sponsored ADR ........................... 420,785 29,245
Warner-Lambert Company .................... 1,583,710 119,075
RADIO & TELEVISION BROADCASTING (1.20 %)
Fox Entertainment
Group, Inc. - Class A (a) ............... 120,985 3,047
Jacor Communications, Inc. (a) (b) ........ 525,730 33,844
RESTAURANTS (0.96 %)
Starbucks Corporation (a) (b) ............. 527,430 29,602
TELECOMMUNICATIONS (5.28 %)
AirTouch Communications, Inc. (a).......... 450,960 32,525
Lucent Technologies Inc. .................. 520,930 57,302
MCI WORLDCOM, Inc. (a) .................... 512,520 36,773
Qwest Communications
International Inc. (a) (b) .............. 728,160 36,408
VARIETY STORES (1.92 %)
Costco Companies, Inc. (a) ................ 818,905 59,115
WATER TRANSPORTATION (1.19 %)
Royal Caribbean Cruises Ltd. .............. 994,415 36,793
-----------
Total Common Stocks
(cost: $ 1,196,028)..................................... 2,726,570
-----------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (8.87 %)
Fannie Mae
5.07 %, due 01/15/1999 ................. $ 75,000 $ 74,852
Fannie Mae
5.04 %, due 02/19/1999 ................. 20,000 19,863
Fannie Mae
4.70 %, due 06/23/1999 ................. 25,000 24,435
Federal Home Loan Bank
4.72 %, due 01/19/1999 ................. 40,000 39,906
Federal Maritime Commission
4.98 %, due 01/04/1999 ................. 35,000 34,985
Federal Maritime Commission
4.77 %, due 01/22/1999 ................. 25,000 24,930
Federal Maritime Commission
4.82 %, due 02/02/1999 ................. 25,000 24,893
Federal Maritime Commission
5.06 %, due 02/12/1999 ................. 30,000 29,823
-----------
Total Short-Term U.S.
Government Obligations
(cost: $ 273,687)..................................... 273,687
-----------
COMMERCIAL PAPER (0.66 %)
Household Finance Corporation
5.25 %, due 01/04/1999 ................. 20,400 20,391
Total Commercial Paper
(cost: $ 20,391)...................................... 20,391
-----------
Total Investment Securities
(cost: $ 1,490,981)................................... $ 3,021,883
===========
SUMMARY
Investments, at market value ............. 97.92 % $ 3,021,883
Other assets in
excess of liabilities .................. 2.08 % 64,174
----- -----------
Net assets ............................... 100.00 % $ 3,086,057
====== ===========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
44 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS, AT
MARKET VALUE.
MARKET
VALUE PERCENTAGE
----------- ----------
Canada ................................... $ 930 0.03 %
Germany .................................. 795 0.03 %
Italy .................................... 47,246 1.56 %
Sweden ................................... 10,630 0.35 %
United States ............................ 2,962,282 98.03 %
----------- ------
Investments, at market value ......... $ 3,021,883 100.00 %
=========== ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 160,945. See
footnote 1F to the financial statements.
(c) Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 45
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
PREFERRED STOCKS (1.60 %)
AUTOMOTIVE (0.50 %)
Porsche AG ............................... 2,331 $ 5,317
COMPUTER & DATA PROCESSING SERVICES (0.46 %)
SAP AG - Vorzug .......................... 10,322 4,927
INSURANCE (0.64 %)
Marschollek, Lautenschlaeger
und Partner AG ......................... 12,064 6,880
-------
Total Preferred Stocks
(cost: $ 15,910).......................... 17,124
-------
COMMON STOCKS (91.83 %)
AGRICULTURE (0.06 %)
Delta and Pine Land Company .............. 16,520 611
AIR TRANSPORTATION (0.18 %)
SAS Danmark A/S (b) ...................... 32,196 364
SAS Norge ASA - Class B .................. 43,600 366
SAS Sverige AB ........................... 134,876 1,244
AUTOMOTIVE (1.83 %)
DaimlerChrysler AG (a) ................... 60,051 5,930
DaimlerChrysler AG - NY Shares (a)........ 51,657 4,962
Honda Motor Company, Ltd. ................ 119,000 3,916
Renault SA ............................... 81,614 3,668
Volvo AB - Class B ....................... 48,641 1,120
BEER, WINE, & DISTILLED BEVERAGES (0.97 %)
Diageo PLC ............................... 232,501 2,645
Kirin Brewery Company, Ltd. .............. 605,000 7,728
BEVERAGES (0.10 %)
Coca-Cola Femsa SA -
Sponsored ADR (b) ...................... 78,120 1,035
BUSINESS SERVICES (3.46 %)
Adecco SA ................................ 4,288 1,960
Capita Group PLC ......................... 113,149 1,045
Securitas AB - Class B ................... 2,045,376 31,903
SEMA Group PLC ........................... 201,852 1,984
WPP Group PLC ............................ 15,018 91
CHEMICALS & ALLIED PRODUCTS (2.59 %)
Akzo Nobel NV ............................ 31,548 1,438
Hoechst AG ............................... 102,424 4,248
Kao Corporation .......................... 180,000 4,072
Monsanto Company ......................... 96,150 4,567
Solutia Inc. ............................. 4,300 96
The Estee Lauder
Companies Inc. - Class A (b) ........... 155,160 13,266
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
COMMERCIAL BANKS (4.38 %)
Argentaria, Caja Postal y Banco
Hipotecario de Espana, SA .............. 142,000 $ 3,673
Banca Commerciale Italiana ............... 888,151 6,154
Banca di Roma (a) (b) .................... 3,842,175 6,506
Banco Bilbao Vizcaya, SA ................. 122,141 1,913
Banco Central
Hispanoamericano SA .................... 274,902 3,260
Bank Austria AG (b) ...................... 33,628 1,711
Bayerische Hypo-und Vereinsbank .......... 10,834 849
Den Norske Bank ASA ...................... 175,712 607
Deutsche Pfandbrief-und
Hypothekenbank AG ...................... 67,291 5,897
Kapital Holding .......................... 10,714 530
Lloyds TSB Group PLC ..................... 720,209 10,240
UBS AG ................................... 16,553 5,091
Unidanmark A/S - Class A ................. 4,843 438
COMMUNICATION (1.44 %)
Comcast Corporation - Class A ............ 262,550 15,408
COMMUNICATIONS EQUIPMENT (5.91 %)
Nokia Oyj - Class A ...................... 215,236 26,184
Nokia Oyj - Sponsored ADR ................ 176,200 21,221
NTT Data Corporation (b) ................. 1,452 7,226
Royal Philips Electronics NV - NY
Registered Shares (b) .................. 95,399 6,457
Telefonaktiebolaget LM Ericsson -
Sponsored ADR .......................... 90,296 2,161
COMPUTER & DATA PROCESSING SERVICES (9.72 %)
Alcatel - ADR (b) ........................ 46,125 1,127
America Online, Inc. (a) ................. 5,065 810
Atos SA (a) .............................. 25,550 6,112
Cap Gemini SA (b) ........................ 77,154 12,393
Equant - NY Registered
Shares (a) (b) ......................... 62,695 4,252
Equant NV (a) ............................ 31,719 2,209
Getronics NV ............................. 214,235 10,619
Intuit Inc. (a) .......................... 87,550 6,347
JBA Holdings PLC ......................... 113,793 350
Logica PLC ............................... 1,424,638 12,378
Microsoft Corporation (a) ................ 266,015 36,894
Misys PLC ................................ 474,946 3,457
Tieto Corporation - Class B .............. 158,323 7,052
COMPUTER & OFFICE EQUIPMENT (5.71 %)
Cisco Systems, Inc. (a) .................. 564,885 52,429
Dell Computer Corporation (a) ............ 32,730 2,395
EMC Corporation (a) ...................... 11,285 959
International Business Machines
Corporation ............................ 5,115 945
Sun Microsystems, Inc. (a) ............... 51,120 4,377
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
46 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
CONSTRUCTION (0.77 %)
Suez Lyonnaise des Eaux .................. 40,162 $ 8,256
ELECTRIC SERVICES (0.13 %)
VEBA AG .................................. 23,606 1,413
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.61 %)
Electrolux AB - Series B ................. 595,388 10,281
Rohm Company Ltd. ........................ 9,000 822
Royal Philips Electronics NV ............. 88,115 5,918
Simac Techniek NV ........................ 84,735 2,145
Sony Corporation ......................... 120,500 8,797
ELECTRONIC COMPONENTS & ACCESSORIES (0.42 %)
Electrocomponents PLC .................... 37,589 252
Fujitsu Ltd. ............................. 314,500 4,199
ENVIRONMENTAL SERVICES (3.72 %)
Rentokil Initial PLC ..................... 2,795,486 21,058
Vivendi (b) .............................. 72,161 18,736
FOOD & KINDRED PRODUCTS (1.03 %)
Danone (b) ............................... 32,388 9,279
Raisio Group PLC ......................... 156,395 1,718
FOOD STORES (0.56 %)
Koninklijke Ahold NV ..................... 162,232 6,001
HOLDING & OTHER INVESTMENT OFFICES (0.57 %)
Amvescap PLC ............................. 312,986 2,427
Lagardere S.C.A. ......................... 86,428 3,676
HOTELS & OTHER LODGING PLACES (0.01 %)
EIH Limited - Sponsored GDR .............. 10,525 58
INDUSTRIAL MACHINERY & EQUIPMENT (3.99 %)
Siebe PLC ................................ 1,488,369 5,866
Tyco International Ltd. (b) .............. 487,937 36,810
INSURANCE (0.65 %)
Muenchener Rueckversicherungs-
Gesellschaft AG - warrants ............. 314 15
Zurich Allied AG ......................... 9,400 6,968
INSURANCE AGENTS, BROKERS & SERVICE (0.33 %)
Sampo Insurance Company
Ltd. - Class A ......................... 94,329 3,581
LIFE INSURANCE (0.37 %)
AEGON NV (d) ............................. 23,673 2,910
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
LIFE INSURANCE (CONTINUED)
Schweizerische Lebensversicherungs-
und Rentenanstalt ........................ 1,443 $ 1,073
MACHINERY, EQUIPMENT & SUPPLIES (2.78 %)
Mannesmann AG ............................ 259,150 29,712
MANUFACTURING INDUSTRIES (2.14 %)
Assa Abloy AB - Class B Free (b) ......... 453,558 17,405
Tomkins PLC .............................. 633,812 2,988
Williams PLC ............................. 440,315 2,499
MOTION PICTURES (2.49 %)
Time Warner Inc. ......................... 429,060 26,629
MOTOR VEHICLES, PARTS & SUPPLIES (0.80 %)
Valeo - 144A (c) ......................... 81,612 6,436
Valeo SA ................................. 27,296 2,153
PERSONAL SERVICES (1.22 %)
Hays PLC ................................. 1,360,890 11,937
Kuoni Reisen AG - Class B ................ 286 1,136
PHARMACEUTICALS (10.90 %)
American Home Products
Corporation ............................ 58,640 3,302
Elan Corporation PLC -
Sponsored ADR (a) (b) .................. 111,525 7,758
Glaxo Wellcome PLC ....................... 205,861 7,079
Merck KGaA ............................... 46,515 2,094
Novartis AG - Registered Shares .......... 5,150 10,135
Pfizer Inc. .............................. 60,575 7,598
Pharmacia & Upjohn, Inc. ................. 252,985 14,325
Pharmacia & Upjohn, Inc. -
Depository Shares ...................... 13,141 739
Rhone-Poulenc SA - Class A ............... 174,345 8,979
Roche Holding AG ......................... 853 10,420
Sanofi SA ................................ 29,960 4,936
SmithKline Beecham PLC ................... 147,778 2,064
SmithKline Beecham PLC -
Sponsored ADR .......................... 79,925 5,555
Takeda Chemical Industries ............... 405,000 15,628
Warner-Lambert Company ................... 213,023 16,017
PRINTING & PUBLISHING (2.02 %)
Wolters Kluwer NV ........................ 100,930 21,615
RADIO & TELEVISION BROADCASTING (0.99 %)
Clear Channel
Communications, Inc. (a) ............... 120,815 6,584
Fox Entertainment
Group, Inc. - Class A (a) .............. 32,355 815
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 47
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
RADIO & TELEVISION BROADCASTING (CONTINUED)
Grupo Televisa SA -
Sponsored GDR (a) (b) .................. 128,015 $ 3,160
RESEARCH & TESTING SERVICES (0.21 %)
WM-Data AB - Class B ..................... 51,486 2,205
RESTAURANTS (1.37 %)
Compass Group PLC ........................ 819,182 9,379
Tele Pizza, SA (a) ....................... 555,994 5,283
RETAIL TRADE (0.43 %)
Ito-Yokado Co., Ltd. ..................... 65,000 4,555
RUBBER & MISC. PLASTIC PRODUCTS (0.07 %)
Bridgestone Corp. ........................ 35,000 796
TELECOMMUNICATIONS (14.29 %)
AirTouch
Communications, Inc. (a) (b) ........... 120,655 8,702
Alcatel SA ............................... 2,586 317
China Telecom (Hong Kong)
Limited (a) ............................ 2,500,000 4,324
COLT Telecom Group PLC (a) ............... 156,422 2,332
Energis PLC (a) .......................... 562,051 12,571
MCI WORLDCOM, Inc. (a) ................... 238,270 17,096
MediaOne Group, Inc. ..................... 59,030 2,774
Nippon Telegraph &
Telephone Corp. ........................ 82 636
NTT Mobile Communication
Network, Inc. .......................... 517 21,326
Orange PLC (a) ........................... 32,681 380
Panafon SA (a) ........................... 25,950 695
Portugal Telecom SA ...................... 24,860 1,141
Qwest Communications
International Inc. (a) ................. 7,560 378
Swisscom AG (a) .......................... 37,694 15,797
Telecom Argentina Stet -
France Telecom SA -
Sponsored ADR (b) ...................... 11,330 312
Telecom Italia Mobile SpA ................ 989,635 7,306
Telecom Italia SpA ....................... 2,370,409 20,175
Tele-Communications, Inc. -
Class A (a) (b) ........................ 325,235 17,990
Telecomunicacoes Brasileiras SA -
Sponsored ADR (a) (b) .................. 69,440 5,047
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
Telefonaktiebolaget LM Ericsson -
Class B ................................ 4,064 $ 97
Telefonica de Argentina SA -
Sponsored ADR (b) ...................... 83,680 2,338
Telefonica SA ............................ 111,540 4,954
Telefonica SA - rights ................... 111,540 99
Telefonica SA - Sponsored ADR ............ 21,593 2,923
Vodafone Group PLC ....................... 191,044 3,101
WATER TRANSPORTATION (0.16 %)
Carnival Corporation ..................... 35,380 1,698
WHOLESALE TRADE NONDURABLE GOODS (0.45 %)
Unilever NV - CVA ........................ 56,497 4,833
-----------
Total Common Stocks
(cost: $ 670,961)...................................... 982,407
-----------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (4.66 %)
Fannie Mae
5.01 %, due 01/14/1999 ................. $ 20,000 $ 19,964
Fannie Mae
5.03 %, due 02/05/1999 ................. 30,000 29,853
-----------
Total Short-Term U.S.
Government Obligations
(cost: $ 49,817)....................................... 49,817
-----------
COMMERCIAL PAPER (2.19 %)
Household Finance Corporation
5.25 %, due 01/04/1999 ................. 23,400 23,390
Total Commercial Paper
(cost: $ 23,390)....................................... 23,390
-----------
Total Investment Securities
(cost: $ 760,078)...................................... $ 1,072,738
===========
SUMMARY
Investments, at market value ............. 100.28 % $ 1,072,738
Liabilities in
excess of other assets ................. (0.28)% (2,973)
---------- -----------
Net assets ............................... 100.00 % $ 1,069,765
========== ===========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
48 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS, AT
MARKET VALUE.
MARKET
VALUE PERCENTAGE
-------------- -------------
Austria ................................ $ 1,711 0.16 %
Denmark ................................ 1,332 0.12 %
Finland ................................ 38,536 3.59 %
France ................................. 87,149 8.12 %
Germany ................................ 67,282 6.27 %
Great Britain .......................... 116,122 10.82 %
Greece ................................. 695 0.06 %
Hong Kong .............................. 4,324 0.40 %
Italy .................................. 40,141 3.74 %
Japan .................................. 79,701 7.43 %
Netherlands ............................ 55,478 5.17 %
Norway ................................. 973 0.09 %
Portugal ............................... 1,141 0.11 %
Spain .................................. 19,183 1.79 %
Sweden ................................. 64,994 6.06 %
Switzerland ............................ 52,580 4.90 %
United States .......................... 441,396 41.17 %
----------- -----
Investments, at market value ......... $ 1,072,738 100.00 %
=========== ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 71,286. See
footnote 1F to the financial statements.
(c) Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
(d) Affiliated company. See footnote 2C to the financial statements.
ADR American Depositary Receipt
GDR Global Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 49
<PAGE>
SCHEDULE OF INVESTMENTS
STRATEGIC TOTAL RETURN PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (6.09 %)
U.S. Treasury Note (b)
6.38 %, due 09/30/2001 ................... $ 11,000 $ 11,484
U.S. Treasury Note (b)
7.50 %, due 11/15/2001 ................... 8,500 9,146
U.S. Treasury Note
6.25 %, due 02/28/2002 ................... 11,500 12,026
U.S. Treasury Note
7.50 %, due 02/15/2005 ................... 3,000 3,435
--------
Total U.S. Government Obligations
(cost: $ 35,117)........................................ 36,091
--------
CORPORATE DEBT SECURITIES (20.55 %)
AEROSPACE (0.95 %)
Lockheed Martin Corporation
7.45 %, due 06/15/2004 ................... 5,200 5,625
BUSINESS SERVICES (0.79 %)
Olsten Corporation
7.00 %, due 03/15/2006 ................... 4,625 4,694
CHEMICALS & ALLIED PRODUCTS (1.70 %)
Dexter Corporation
9.25 %, due 12/15/2016 ................... 143 149
The Procter & Gamble Company
5.25 %, due 09/15/2003 ................... 9,875 9,949
COMMERCIAL BANKS (1.83 %)
First Bank Minnesota
6.88 %, due 04/01/2006 ................... 5,000 5,344
First Union Corporation
7.25 %, due 02/15/2003 ................... 2,600 2,798
J.P. Morgan & Co. Incorporated
7.63 %, due 09/15/2004 ................... 2,510 2,698
ELECTRIC SERVICES (3.82 %)
Florida Power & Light Company
7.88 %, due 01/01/2013 ................... 6,500 6,801
Kentucky Utilities Company
8.55 %, due 05/15/2027 ................... 4,000 4,440
Old Dominion Electric Cooperative
8.76 %, due 12/01/2022 ................... 5,000 6,100
West Penn Power Company
8.88 %, due 02/01/2021 ................... 5,000 5,250
ELECTRIC, GAS & SANITARY SERVICES (0.69 %)
Interstate Power Company
8.63 %, due 09/15/2021 ................... 3,825 4,083
ELECTRICAL GOODS (0.39 %)
Avnet, Inc.
6.88 %, due 03/15/2004 ................... 2,199 2,303
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
CORPORATE DEBT SECURITIES (CONTINUED)
INDUSTRIAL MACHINERY & EQUIPMENT (1.35 %)
Tyco International Ltd.
6.38 %, due 06/15/2005 ................... $ 7,850 $ 7,978
INSTRUMENTS & RELATED PRODUCTS (0.99 %)
Raytheon Company
6.50 %, due 07/15/2005 ................... 5,700 5,878
INSURANCE (1.05 %)
Chartwell Re Corporation
10.25 %, due 03/01/2004 .................. 5,925 6,229
PERSONAL CREDIT INSTITUTIONS (1.11 %)
Associates First Capital Corporation
6.20 %, due 05/16/2005 ................... 6,400 6,567
RAILROADS (1.31 %)
Union Pacific Corporation
6.25 %, due 03/15/1999 ................... 3,000 3,004
Union Pacific Corporation
8.50 %, due 01/15/2017 ................... 4,596 4,757
RUBBER & MISC. PLASTIC PRODUCTS (0.24 %)
M.A. Hanna Company
9.38 %, due 09/15/2003 ................... 1,250 1,450
TELECOMMUNICATIONS (4.33 %)
AirTouch Communications, Inc.
7.00 %, due 10/01/2003 ................... 4,700 4,973
Alltel Corporation
7.25 %, due 04/01/2004 ................... 6,650 7,099
GTE Hawaiian Telephone Company
Incorporated
7.38 %, due 09/01/2006 ................... 5,000 5,512
Lucent Technologies Inc.
6.90 %, due 07/15/2001 ................... 7,675 8,020
--------
Total Corporate Debt Securities
(cost: $ 124,450)......................................... 121,701
--------
CONVERTIBLE BONDS (4.20 %)
ELECTRICAL GOODS (1.42 %)
Kent Electronics Corporation
4.50 %, due 09/01/2004 ................... 10,916 8,419
LUMBER & OTHER BUILDING MATERIALS (1.78 %)
The Home Depot, Inc.
3.25 %, due 10/01/2001 ................... 4,000 10,510
OIL & GAS EXTRACTION (1.00 %)
Nabors Industries, Inc.
5.00 %, due 05/15/2006 ................... 6,025 5,942
--------
Total Convertible Bonds
(cost: $ 14,879)........................................... 24,871
--------
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
50 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
STRATEGIC TOTAL RETURN PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
CONVERTIBLE PREFERRED STOCKS (3.56 %)
CHEMICALS & ALLIED PRODUCTS (1.96 %)
Monsanto Company (b) ........................... 88,500 $ 4,337
The Estee Lauder
Companies Inc. TRACES ........................ 94,000 7,285
RADIO & TELEVISION BROADCASTING (1.60 %)
Sinclair Broadcast Group, Inc. ................. 190,000 9,476
-------
Total Convertible Preferred Stocks
(cost: $ 20,097).......................................... 21,098
-------
COMMON STOCKS (64.35 %)
BEVERAGES (1.45 %)
PepsiCo, Inc. .................................. 210,000 8,597
BUSINESS CREDIT INSTITUTIONS (1.87 %)
The CIT Group, Inc. - Class A .................. 349,000 11,103
BUSINESS SERVICES (1.10 %)
Modis Professional
Services, Inc. (a) (b) ....................... 447,500 6,489
CHEMICALS & ALLIED PRODUCTS (3.16 %)
Colgate-Palmolive Company (b) .................. 98,400 9,139
The Procter & Gamble Company ................... 105,000 9,588
COMMERCIAL BANKS (3.74 %)
Compass Bancshares, Inc. ....................... 150,500 5,728
Mellon Bank Corporation ........................ 122,500 8,422
Wells Fargo & Company .......................... 200,000 7,988
COMMUNICATIONS EQUIPMENT (1.55 %)
Motorola, Inc. ................................. 150,000 9,159
COMPUTER & DATA PROCESSING SERVICES (2.80 %)
BMC Software, Inc. (a) ......................... 95,000 4,233
Microsoft Corporation (a) ...................... 42,300 5,866
Oracle Corporation (a) ......................... 150,000 6,469
COMPUTER & OFFICE EQUIPMENT (1.20 %)
Hewlett-Packard Company ........................ 104,000 7,105
EDUCATIONAL SERVICES (1.12 %)
ITT Educational Services, Inc. (a) ............. 195,500 6,647
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.79 %)
General Electric Company ....................... 104,000 10,615
ENVIRONMENTAL SERVICES (1.81 %)
Waste Management, Inc. ......................... 230,000 10,724
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
FABRICATED METAL PRODUCTS (1.36 %)
The Gillette Company ........................... 167,000 $ 8,068
FINANCE (0.77 %)
Fannie Mae ..................................... 62,000 4,588
FOOD & KINDRED PRODUCTS (3.19 %)
H.J. Heinz Company ............................. 145,000 8,211
Philip Morris Companies Inc. ................... 200,000 10,700
HOLDING & OTHER INVESTMENT OFFICES (2.06 %)
Crescent Real Estate Equities
Company ...................................... 260,000 5,980
Starwood Hotels & Resorts ...................... 275,000 6,239
INDUSTRIAL MACHINERY & EQUIPMENT (2.98 %)
Tyco International Ltd. ........................ 170,000 12,824
United States Filter
Corporation (a) .............................. 210,200 4,808
INSURANCE (2.67 %)
American International
Group, Inc. (b) .............................. 61,750 5,967
E. W. Blanch Holdings, Inc. .................... 72,300 3,430
PartnerRe Ltd. ................................. 140,000 6,405
LIFE INSURANCE (0.66 %)
American General Corporation ................... 50,000 3,900
MEDICAL INSTRUMENTS & SUPPLIES (1.72 %)
Sybron International
Corporation (a) .............................. 374,600 10,184
OIL & GAS EXTRACTION (1.11 %)
Schlumberger Limited ........................... 143,000 6,596
PAPER & ALLIED PRODUCTS (1.87 %)
Kimberly-Clark Corporation ..................... 124,000 6,758
The St. Joe Company (b) ........................ 183,700 4,305
PERSONAL CREDIT INSTITUTIONS (1.14 %)
Associates First Capital Corporation -
Class A ...................................... 160,000 6,780
PETROLEUM REFINING (5.01 %)
Amoco Corporation .............................. 101,400 5,983
Atlantic Richfield Company ..................... 90,000 5,873
Exxon Corporation .............................. 114,800 8,395
Mobil Corporation .............................. 107,800 9,392
PHARMACEUTICALS (7.36 %)
American Home Products
Corporation .................................. 135,000 7,602
Cardinal Health, Inc. .......................... 32,063 2,433
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 51
<PAGE>
SCHEDULE OF INVESTMENTS
STRATEGIC TOTAL RETURN PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS (CONTINUED)
Pharmacia & Upjohn, Inc. ................ 100,000 $ 5,663
Schering-Plough Corporation ............. 203,400 11,238
SmithKline Beecham PLC -
Sponsored ADR ......................... 160,000 11,120
Teva Pharmaceutical Industries
Ltd. - Sponsored ADR .................. 135,000 5,493
PRINTING & PUBLISHING (2.74 %)
A. H. Belo Corporation - Class A ........ 300,800 5,997
Harte-Hanks, Inc. ....................... 359,200 10,237
RADIO & TELEVISION BROADCASTING (1.80 %)
CBS Corporation (b) ..................... 325,000 10,644
RADIO, TELEVISION, & COMPUTER STORES (0.76 %)
Tandy Corporation ....................... 108,800 4,481
RESEARCH & TESTING SERVICES (1.08 %)
Covance Inc. (a) ........................ 220,000 6,408
TELECOMMUNICATIONS (4.48 %)
Alltel Corporation ...................... 216,900 12,972
MCI WORLDCOM, Inc. (a) .................. 189,350 13,586
---------
Total Common Stocks
(cost: $ 279,397)...................................... 381,132
---------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM OBLIGATIONS (3.46 %)
Investors Bank & Trust
Company (c)
4.25 %, Repurchase Agreement
dated 12/31/1998 to be
repurchased at $ 20,505 on
01/04/1999 ............................ $ 20,495 $ 20,495
---------
Total Short-Term Obligations
(cost: $ 20,495)....................................... 20,495
---------
Total Investment Securities
(cost: $ 494,435)...................................... $ 605,388
=========
SUMMARY
Investments, at market value ............ 102.21 % $ 605,388
Liabilities in
excess of other assets ................ (2.21)% (13,076)
----------- ---------
Net assets .............................. 100.00 % $ 592,312
=========== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market
value of all securities on loan at December 31, 1998 is
$ 29,846. See footnote 1F to the financial statements.
(c) Collateralized by $ 4,941 Freddie Mac - Series 1618 Class FB 4.14 %
due 10/15/2008; $ 8,400 Freddie Mac London Interbank Offered Rate
Floater - Series 1684 Class SA 6.76 % due 03/15/2024; $ 8,000 Fannie
Mae Series 1992-39 - Class FB 4.69 % due 03/25/2022; Market Value and
accrued interest aggregated $ 4,913, $ 8,516 and $ 8,091,
respectively, for the collateral at December 31, 1998.
ADR American Depositary Receipt
TRACES Trust Automatic Common Exchange Securities
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
52 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
EMERGING GROWTH PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (96.57 %)
AEROSPACE (0.68 %)
Gulfstream Aerospace
Corporation (a) ........................ 109,500 $5,831
AIR TRANSPORTATION (0.61 %)
Comair Holdings, Inc. .................... 67,000 2,261
Southwest Airlines Co. ................... 132,500 2,973
APPAREL & ACCESSORY STORES (3.28 %)
Abercrombie &
Fitch Co. - Class A (a) ................ 125,000 8,844
American Eagle Outfitters, Inc. (a)....... 14,000 933
AnnTaylor, Inc. (a) (b) .................. 80,000 3,155
The GAP, Inc. ............................ 125,000 7,031
The TJX Companies, Inc. .................. 277,000 8,033
APPAREL PRODUCTS (0.10 %)
WestPoint Stevens Inc. (a) ............... 26,000 821
AUTOMOTIVE (0.56 %)
Federal-Mogul Corporation (b) ............ 68,000 4,046
Gentex Corporation (a) ................... 35,000 700
BEVERAGES (0.26 %)
Adolph Coors Company - Class B ........... 40,000 2,258
BUSINESS CREDIT INSTITUTIONS (2.34 %)
Providian Financial
Corporation (c) ........................ 230,000 17,249
The FINOVA Group Inc. .................... 50,000 2,697
BUSINESS SERVICES (2.61 %)
Omnicom Group Inc. ....................... 109,000 6,322
Outdoor Systems, Inc. (a) ................ 132,500 3,975
Robert Half International Inc. (a) ....... 64,500 2,882
Snyder Communications,
Inc. (a) (b) ........................... 25,000 844
The Interpublic Group of
Companies, Inc. ........................ 65,000 5,184
Valassis Communications, Inc. (a) ........ 60,000 3,098
COMMERCIAL BANKS (2.71 %)
AmSouth Bancorporation ................... 37,500 1,711
Concord EFS, Inc. (a) .................... 115,000 4,873
Fifth Third Bancorp ...................... 32,500 2,318
Firstar Corporation ...................... 50,000 4,663
National Commerce
Bancorporation ......................... 32,000 602
Northern Trust Corporation ............... 48,000 4,191
Old Kent Financial Corporation ........... 55,000 2,558
Zions Bancorporation ..................... 35,000 2,183
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
COMMUNICATION (1.25 %)
Cablevision Systems Corporation -
Class A (a) (b) ........................ 108,000 $5,420
EarthLink Network, Inc. (a) .............. 55,000 3,135
EchoStar Communications
Corporation (a) (b) .................... 43,000 2,080
COMMUNICATIONS EQUIPMENT (1.95 %)
Comverse Technology, Inc. (a) ............ 60,000 4,260
General Instrument
Corporation (a) ........................ 90,000 3,054
Gilat Satellite Networks (a) (b) ......... 30,000 1,654
Nokia Oyj - Sponsored ADR ................ 50,000 6,022
Tekelec (a) .............................. 100,000 1,656
COMPUTER & DATA PROCESSING SERVICES (25.27 %)
Affiliated Computer
Services, Inc. - Class A (a) (b) ....... 40,000 1,800
America Online, Inc. (a) ................. 360,000 57,599
American Management Systems,
Incorporated (a) ....................... 65,000 2,600
BMC Software, Inc. (a) ................... 174,000 7,754
CIBER, Inc. (a) .......................... 83,000 2,319
Citrix Systems, Inc. (a) (b) ............. 120,000 11,647
Compuware Corporation (a) ................ 410,000 32,030
Concord Communications, Inc. (a).......... 35,000 1,986
CSG Systems
International, Inc. (a) (b) ............ 78,000 6,162
Fiserv, Inc. (a) ......................... 50,000 2,572
GeoTel Communications
Corporation (a) ........................ 35,000 1,304
IMRglobal (a) ............................ 42,500 1,251
International Network Services (a)........ 65,000 4,323
Keane, Inc. (a) .......................... 66,000 2,636
Legato Systems, Inc. (a) ................. 155,000 10,220
Macromedia, Inc. (a) ..................... 105,000 3,537
Mastech Corporation (a) .................. 50,000 1,431
MedQuist Inc. (a) ........................ 35,000 1,383
Mercury Interactive
Corporation (a) ........................ 40,000 2,530
Microsoft Corporation (a) ................ 30,000 4,161
MindSpring Enterprises, Inc. (a) ......... 60,000 3,664
Network Appliance, Inc. (a) .............. 195,000 8,775
Network Solutions, Inc. (a) (b) .......... 16,700 2,186
Networks Associates, Inc. (a) ............ 65,000 4,306
New Era of Networks, Inc. (a) ............ 47,600 2,094
Peregrine Systems, Inc. (a) .............. 15,000 696
Rational Software Corporation (a)......... 125,000 3,313
Sterling Software, Inc. (a) .............. 76,000 2,057
SunGard Data Systems Inc. (a) (b)......... 110,000 4,366
Sykes Enterprises, Incorporated (a)....... 7,400 226
VeriSign, Inc. (a) (b) ................... 15,000 887
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 53
<PAGE>
SCHEDULE OF INVESTMENTS
EMERGING GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
COMPUTER & DATA PROCESSING SERVICES (CONTINUED)
VERITAS Software Corporation (a).......... 116,500 $6,983
Wind River Systems, Inc. (a) ............. 30,000 1,410
Yahoo! Inc. (a) (b) ...................... 66,000 15,513
COMPUTER & OFFICE EQUIPMENT (11.96 %)
Apple Computer, Inc. (a) (b) ............. 64,500 2,640
Cisco Systems, Inc. (a) .................. 112,500 10,440
Dell Computer Corporation (a) ............ 504,000 36,886
Electronics for Imaging, Inc. (a) ........ 40,000 1,608
EMC Corporation (a) ...................... 375,000 31,874
Lexmark International
Group, Inc. - Class A (a) .............. 117,700 11,828
Symbol Technologies, Inc. ................ 75,000 4,795
Xircom, Inc. (a) ......................... 60,000 2,040
CONSTRUCTION (0.28 %)
Kaufman and Broad Home
Corporation ............................ 35,000 1,006
Pulte Corporation ........................ 50,000 1,391
DRUG STORES & PROPRIETARY STORES (1.17 %)
CVS Corporation .......................... 99,000 5,445
Omnicare, Inc. ........................... 130,000 4,518
EDUCATIONAL SERVICES (0.08 %)
Education Management
Corporation (a) ........................ 30,000 709
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.62 %)
American Power Conversion
Corporation (a) ........................ 150,000 7,266
Gemstar International Group
Limited (a) ............................ 115,000 6,584
ELECTRONIC COMPONENTS & ACCESSORIES (4.91 %)
Advanced Micro
Devices, Inc. (a) (b) .................. 61,000 1,765
Altera Corporation (a) ................... 80,000 4,870
Applied Micro Circuits
Corporation (a) ........................ 35,000 1,189
Flextronics International Ltd. (a) ....... 55,000 4,709
Intel Corporation ........................ 50,000 5,928
Jabil Circuit, Inc. (a) .................. 80,000 5,970
QLogic Corporation (a) ................... 19,200 2,513
Sanmina Corporation (a) .................. 25,000 1,563
Solectron Corporation (a) (b) ............ 50,000 4,647
Texas Instruments Incorporated ........... 25,000 2,139
Vitesse Semiconductor
Corporation (a) ........................ 145,000 6,616
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
ENGINEERING & MANAGEMENT SERVICES (0.38 %)
Paychex, Inc. ............................ 63,000 $3,241
ENVIRONMENTAL SERVICES (0.60 %)
Allied Waste Industries, Inc. (a) ........ 216,750 5,121
FABRICATED METAL PRODUCTS (0.51 %)
Danaher Corporation ...................... 80,000 4,345
FOOD & KINDRED PRODUCTS (0.33 %)
Smithfield Foods, Inc. (a) ............... 23,000 779
The Earthgrains Company .................. 65,000 2,011
FOOD STORES (0.96 %)
Safeway Inc. (a) ......................... 135,000 8,227
FURNITURE & HOME FURNISHINGS STORES (1.41 %)
Bed Bath & Beyond Inc. (a) ............... 95,000 3,242
Linens 'N Things, Inc. (a) ............... 140,000 5,548
Williams-Sonoma, Inc. (a) ................ 80,000 3,225
HEALTH SERVICES (1.46 %)
Allegiance Corporation ................... 210,000 9,791
Express Scripts, Inc. (a) ................ 40,000 2,685
INDUSTRIAL MACHINERY & EQUIPMENT (1.15 %)
Tyco International Ltd. .................. 130,000 9,807
INSTRUMENTS & RELATED PRODUCTS (0.56 %)
Waters Corporation (a) ................... 55,000 4,799
INSURANCE (0.51 %)
Fidelity National Financial, Inc. ........ 16,500 503
The Progressive Corporation .............. 10,000 1,694
Wellpoint Health Networks Inc. (a)........ 25,000 2,175
LIFE INSURANCE (0.19 %)
Protective Life Corporation .............. 40,000 1,593
LUMBER & OTHER BUILDING MATERIALS (2.06 %)
Lowe's Companies, Inc. ................... 140,000 7,166
The Home Depot, Inc. ..................... 170,000 10,401
MACHINERY, EQUIPMENT & SUPPLIES (0.07 %)
National-Oilwell, Inc. (a) ............... 51,000 571
MANAGEMENT SERVICES (0.43 %)
Lason, Inc. (a) .......................... 25,000 1,455
The Metzler Group, Inc. (a) .............. 45,000 2,191
MEDICAL INSTRUMENTS & SUPPLIES (2.42 %)
Biomet, Inc. ............................. 80,000 3,220
Guidant Corporation ...................... 77,500 8,544
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
54 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
EMERGING GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
MEDICAL INSTRUMENTS & SUPPLIES (CONTINUED)
Medtronic, Inc. .......................... 50,000 $ 3,713
MiniMed, Inc. (a) ........................ 45,000 4,714
VISX, Incorporated (a) ................... 4,900 428
MOTION PICTURES (0.85 %)
Hollywood Entertainment
Corporation (a) ........................ 45,000 1,226
Liberty Media Group -
Class A (a) (b) ........................ 130,250 6,000
OIL & GAS EXTRACTION (0.20 %)
BJ Services Company - warrants ........... 14,000 116
Marine Drilling
Companies, Inc. (a) .................... 120,000 923
Veritas DGC Inc. (a) ..................... 50,000 650
PERSONAL CREDIT INSTITUTIONS (0.99 %)
Capital One Financial Corporation......... 69,500 7,993
Metris Companies Inc. .................... 9,300 468
PHARMACEUTICALS (6.01 %)
Allergan, Inc. ........................... 55,000 3,561
Amgen Inc. (a) ........................... 25,000 2,614
Biogen, Inc. (a) ......................... 200,000 16,599
Biomatrix, Inc. (a) (b) .................. 30,000 1,748
Cardinal Health, Inc. .................... 37,500 2,845
Genzyme Corporation -
General (a) (b) ........................ 90,000 4,478
Immunex Corporation (a) (b) .............. 42,500 5,347
Medicis Pharmaceutical
Corporation (a) ........................ 32,500 1,938
MedImmune, Inc. (a) (b) .................. 37,500 3,729
PathoGenesis Corporation (a) (b) ......... 15,000 870
Watson Pharmaceuticals,
Inc. (a) (b) ........................... 120,000 7,545
PRINTING & PUBLISHING (0.61 %)
Consolidated Graphics, Inc. (a) .......... 30,000 2,027
Meredith Corporation ..................... 85,000 3,219
RADIO & TELEVISION BROADCASTING (3.83 %)
Chancellor Media
Corporation (a) (b) .................... 305,000 14,601
Clear Channel
Communications, Inc. (a) ............... 189,000 10,300
Jacor Communications, Inc. (a) ........... 121,100 7,796
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
RADIO, TELEVISION, & COMPUTER STORES (2.19 %)
Best Buy Co., Inc. (a) (b) ............... 288,000 $17,675
Trans World Entertainment
Corporation (a) (b) .................... 52,500 1,001
RESEARCH & TESTING SERVICES (0.87 %)
Covance Inc. (a) ......................... 31,300 912
Cree Research, Inc. (a) (b) .............. 25,000 1,197
Quintiles Transnational Corp. (a) ........ 100,000 5,338
RESTAURANTS (0.58 %)
Brinker International, Inc. (a) .......... 85,000 2,454
Tricon Global Restaurants, Inc. (a)....... 50,000 2,506
RETAIL TRADE (2.09 %)
CDW Computer
Centers, Inc. (a) (b) .................. 45,000 4,317
Henry Schein, Inc. (a) ................... 19,300 864
Insight Enterprises, Inc. (a) ............ 35,000 1,781
Micro Warehouse, Inc. (a) ................ 25,000 845
Staples, Inc. (a) ........................ 230,000 10,048
SAVINGS INSTITUTIONS (0.14 %)
Dime Bancorp, Inc. ....................... 45,000 1,190
SECURITY & COMMODITY BROKERS (0.23 %)
SEI Investments Company .................. 20,000 1,988
TELECOMMUNICATIONS (1.40 %)
Century Telephone
Enterprises, Inc. ...................... 70,000 4,725
Global Crossing Ltd. (a) ................. 30,000 1,354
Metromedia Fiber
Network, Inc. (a) (b) .................. 174,800 5,856
TEXTILE MILL PRODUCTS (0.23 %)
Shaw Industries, Inc. .................... 80,000 1,940
VARIETY STORES (1.22 %)
Costco Companies, Inc. (a) ............... 29,000 2,093
Dollar Tree Stores, Inc. (a) (b) ......... 76,500 3,342
Family Dollar Stores, Inc. ............... 226,000 4,972
WHOLESALE TRADE DURABLE GOODS (0.22 %)
Patterson Dental Company (a) ............. 30,000 1,305
PSS World Medical, Inc. (a) .............. 25,000 575
WHOLESALE TRADE NONDURABLE GOODS (0.23 %)
U.S. Foodservice (a) ..................... 40,000 1,960
-------
Total Common Stocks
(cost: $ 493,143)................................... 824,197
-------
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 55
<PAGE>
SCHEDULE OF INVESTMENTS
EMERGING GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (4.01 %)
Federal Home Loan Bank
4.30 %, due 01/04/1999 .................. $ 34,198 $ 34,186
---------
Total Short-Term U.S.
Government Obligations
(cost: $ 34,186)........................................ 34,186
---------
Total Investment Securities (d)
(cost: $ 527,329)....................................... $ 858,383
=========
SUMMARY
Investments, at market value ......... 100.58 % $ 858,383
Liabilities in
excess of other assets ............. (0.58)% (4,943)
------ ---------
Net assets ........................... 100.00 % $ 853,440
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 113,954. See
footnote 1F to the financial statements.
(c) Affiliated company. See footnote 2C to the financial statements.
(d) The Convertible Preferred Stocks - Telecommunications category has been
omitted. The percentage is less than .01 %. The two securities in this
category; AirTouch Communications, Inc. Series B & C, each had a cost
and a market value individually and in aggregate less than $ 1.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
56 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (95.97 %)
BUSINESS SERVICES (1.16 %)
Outdoor Systems, Inc. (a) (b) .............. 222,750 $6,683
COMMERCIAL BANKS (3.70 %)
BankAmerica Corporation .................... 109,300 6,572
First Union Corporation .................... 69,900 4,251
The Bank of New York
Company, Inc. ............................ 164,900 6,637
U.S. Bancorp (b) ........................... 106,400 3,777
COMMUNICATION (2.86 %)
American Tower
Corporation (a) (b) ...................... 105,200 3,110
Comcast Corporation - Class A .............. 226,800 13,310
COMMUNICATIONS EQUIPMENT (2.68 %)
Newbridge Networks
Corporation (a) .......................... 151,200 4,593
Nokia Oyj - Sponsored ADR .................. 29,000 3,493
Telefonaktiebolaget LM Ericsson -
Sponsored ADR ............................ 304,400 7,287
COMPUTER & DATA PROCESSING SERVICES (12.74 %)
America Online, Inc. (a) ................... 174,500 27,919
At Home Corporation -
Class A (a) (b) .......................... 46,300 3,438
Citrix Systems, Inc. (a) (b) ............... 38,200 3,708
Compuware Corporation (a) .................. 185,200 14,469
IMS Health Incorporated .................... 99,400 7,498
Microsoft Corporation (a) .................. 116,000 16,088
COMPUTER & OFFICE EQUIPMENT (14.24 %)
Ascend Communications,
Inc. (a) (b) ............................. 170,100 11,184
Cisco Systems, Inc. (a) .................... 204,250 18,956
Compaq Computer Corporation ................ 146,000 6,123
Dell Computer Corporation (a) .............. 275,700 20,177
EMC Corporation (a) ........................ 100,600 8,551
International Business Machines
Corporation .............................. 44,000 8,129
Quantum Corporation ........................ 405,900 8,625
DEPARTMENT STORES (2.53 %)
Fred Meyer, Inc. (a) ....................... 103,900 6,260
Wal-Mart Stores, Inc. (b) .................. 101,300 8,250
DRUG STORES & PROPRIETARY STORES (1.30 %)
CVS Corporation ............................ 83,500 4,593
Rite Aid Corporation ....................... 57,600 2,855
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
ELECTRONIC COMPONENTS & ACCESSORIES (8.12 %)
ASM Lithography
Holding NV (a) (b) ....................... 88,000 $2,684
Intel Corporation .......................... 174,600 20,700
Linear Technology Corporation .............. 76,000 6,807
Texas Instruments Incorporated ............. 192,100 16,437
ENVIRONMENTAL SERVICES (2.19 %)
Waste Management, Inc. (b) ................. 270,000 12,589
FINANCE (0.46 %)
Freddie Mac ................................ 40,600 2,616
FOOD STORES (1.39 %)
Safeway Inc. (a) ........................... 51,900 3,163
The Kroger Co. (a) (b) ..................... 79,400 4,804
HEALTH SERVICES (0.46 %)
Allegiance Corporation ..................... 56,100 2,616
INDUSTRIAL MACHINERY & EQUIPMENT (3.06 %)
Tyco International Ltd. .................... 232,674 17,552
INSURANCE (4.67 %)
American International
Group, Inc. (b) .......................... 108,500 10,484
Citigroup Inc. ............................. 329,500 16,310
LUMBER & OTHER BUILDING MATERIALS (3.46 %)
The Home Depot, Inc. ....................... 324,300 19,842
MEDICAL INSTRUMENTS & SUPPLIES (1.38 %)
Medtronic, Inc. ............................ 107,100 7,952
PERSONAL CREDIT INSTITUTIONS (0.43 %)
Household International, Inc. .............. 63,000 2,496
PHARMACEUTICALS (14.60 %)
Biogen, Inc. (a) ........................... 37,300 3,096
Bristol-Myers Squibb Company ............... 59,500 7,962
Cardinal Health, Inc. ...................... 196,200 14,887
McKesson Corporation (b) ................... 83,900 6,633
Pfizer Inc. ................................ 126,900 15,918
Schering-Plough Corporation ................ 244,900 13,531
SmithKline Beecham PLC -
Sponsored ADR ............................ 97,500 6,776
Warner-Lambert Company ..................... 199,900 15,030
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 57
<PAGE>
SCHEDULE OF INVESTMENTS
AGGRESSIVE GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
RADIO & TELEVISION BROADCASTING (3.90 %)
Capstar Broadcasting Corporation -
Class A (a) ............................... 197,100 $ 4,509
Clear Channel
Communications, Inc. (a) .................. 85,600 4,665
Fox Entertainment
Group, Inc. - Class A (a) ................. 85,500 2,154
Infinity Broadcasting Corp. -
Class A (a) ............................... 138,700 3,797
Jacor Communications, Inc. (a) .............. 113,300 7,294
RADIO, TELEVISION, & COMPUTER STORES (0.53 %)
Best Buy Co., Inc. (a) ...................... 49,600 3,044
RAILROADS (0.55 %)
Kansas City Southern
Industries, Inc. .......................... 64,500 3,173
RETAIL TRADE (1.62 %)
Office Depot, Inc. (a) ...................... 86,000 3,177
Staples, Inc. (a) ........................... 140,400 6,134
SECURITY & COMMODITY BROKERS (2.67 %)
Morgan Stanley Dean
Witter and Co. ............................ 146,200 10,380
Paine Webber Group Inc. ..................... 128,800 4,975
TELECOMMUNICATIONS (3.56 %)
Global Crossing Ltd. (a) .................... 44,700 2,017
MCI WORLDCOM, Inc. (a) ...................... 256,700 18,417
VARIETY STORES (1.05 %)
Costco Companies, Inc. (a) .................. 83,900 6,057
WATER TRANSPORTATION (0.66 %)
Carnival Corporation ........................ 78,700 3,778
---------
Total Common Stocks
(cost: $ 365,999)........................................ 550,992
---------
SHORT-TERM OBLIGATIONS (4.08 %)
Investors Bank & Trust Company (c)
4.25 %, Repurchase Agreement
dated 12/31/1998 to be
repurchased at $ 23,448 on
01/04/1999 ................................ $ 23,437 $ 23,437
---------
Total Short-Term Obligations
(cost: $ 23,437)......................................... 23,437
---------
Total Investment Securities
(cost: $ 389,436)......................................... $ 574,429
=========
SUMMARY
Investments, at market value ................ 100.05 % $ 574,429
Liabilities in
excess of other assets .................... (0.05)% (265)
------ ---------
Net assets .................................. 100.00 % $ 574,164
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 52,221. See
footnote 1F to the financial statements.
(c) Collateralized by $ 8,630 Freddie Mac - Series 1625 - Class FL 4.04 %
due 12/15/2008; $ 19,084 Fannie Mae - Series 1997-46 Class T 6.50 % due
07/18/2012; $ 9,728 Fannie Mae Adjustable Rate Mortgage - 417838 7.69 %
due 07/01/2026; market value and accrued interest aggregated $ 8,543, $
7,379 and $ 8,687, respectively, for the collateral at December 31,
1998.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
58 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
BALANCED PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (35.69 %)
U.S. Treasury Bond
7.25 %, due 05/15/2016 ................. $ 3,000 $ 3,633
U.S. Treasury Bond
7.50 %, due 11/15/2016 ................. 3,000 3,726
U.S. Treasury Bond
6.13 %, due 11/15/2027 ................. 3,000 3,352
U.S. Treasury Bond (b)
5.25 %, due 11/15/2028 ................. 4,000 4,095
U.S. Treasury Note
6.38 %, due 08/15/2002 ................. 2,500 2,638
U.S. Treasury Note
7.25 %, due 08/15/2004 ................. 3,000 3,373
U.S. Treasury Note (b)
6.50 %, due 05/15/2005 ................. 3,000 3,287
U.S. Treasury Note (b)
6.50 %, due 10/15/2006 ................. 3,000 3,336
U.S. Treasury Note (b)
6.13 %, due 08/15/2007 ................. 3,000 3,282
U.S. Treasury Note (b)
5.50 %, due 02/15/2008 ................. 3,000 3,179
--------
Total U.S. Government Obligations
(cost: $ 31,643).................................... 33,901
--------
NUMBER OF MARKET
SHARES VALUE
--------- ------
CONVERTIBLE PREFERRED STOCKS (0.78 %)
HOLDING & OTHER INVESTMENT OFFICES (0.78 %)
Walden Residential Properties, Inc........... 32,300 $ 743
--------
Total Convertible Preferred Stocks
(cost: $ 860).......................................... 743
--------
COMMON STOCKS (63.08 %)
BEVERAGES (2.46 %)
PepsiCo, Inc. ............................... 57,000 2,333
COMMERCIAL BANKS (7.65 %)
BankAmerica Corporation ..................... 38,000 2,285
J.P. Morgan & Co. Incorporated .............. 22,000 2,311
Wells Fargo & Company ....................... 67,000 2,675
COMMUNICATIONS EQUIPMENT (2.44 %)
Motorola, Inc. .............................. 38,000 2,320
COMPUTER & OFFICE EQUIPMENT (5.22 %)
Hewlett-Packard Company ..................... 35,000 2,391
Sun Microsystems, Inc. (a) .................. 30,000 2,569
DEPARTMENT STORES (2.49 %)
Wal-Mart Stores, Inc. (b) ................... 29,000 2,362
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
ELECTRIC SERVICES (1.68 %)
Endesa SA - Sponsored ADR ................... 59,000 $ 1,593
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.79 %)
General Electric Company .................... 26,000 2,654
FINANCE (5.38 %)
Fannie Mae .................................. 34,000 2,516
SLM Holding Corporation ..................... 53,999 2,592
FOOD & KINDRED PRODUCTS (2.53 %)
Philip Morris Companies Inc. ................ 45,000 2,408
INDUSTRIAL MACHINERY & EQUIPMENT (0.74 %)
Mettler-Toledo
International Inc. (a) .................... 25,000 702
INSTRUMENTS & RELATED PRODUCTS (2.52 %)
Raytheon Company - Class B .................. 45,000 2,396
INSURANCE (6.31 %)
Citigroup Inc. .............................. 46,000 2,277
The Allstate Corporation .................... 46,000 1,777
United HealthCare Corporation ............... 45,000 1,938
PHARMACEUTICALS (7.73 %)
Abbott Laboratories ......................... 46,000 2,254
BioSource International, Inc. (a) ........... 150,000 441
Johnson & Johnson ........................... 29,000 2,432
Merck & Co., Inc. ........................... 15,000 2,215
RAILROADS (2.13 %)
Burlington Northern Santa Fe
Corporation ............................... 60,000 2,025
SAVINGS INSTITUTIONS (2.57 %)
Washington Mutual, Inc. ..................... 64,000 2,444
SECURITY & COMMODITY BROKERS (2.52 %)
Alliance Capital Management L.P. ............ 93,000 2,395
TELECOMMUNICATIONS (4.81 %)
Frontier Corporation ........................ 69,000 2,346
GTE Corporation ............................. 33,000 2,225
TRUCKING & WAREHOUSING (1.11 %)
Heartland Express, Inc. (a) ................. 60,000 1,050
--------
Total Common Stocks
(cost: $ 48,599)....................................... 59,926
--------
Total Investment Securities
(cost: $ 81,102)....................................... $ 94,570
========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 59
<PAGE>
SCHEDULE OF INVESTMENTS
BALANCED PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
SUMMARY
Investments, at market value ......... 99.55 % $ 94,570
Other assets in
excess of liabilities .............. 0.45 % 430
------ --------
Net assets ........................... 100.00 % $ 95,000
====== ========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 19,214. See
footnote 1F to the financial statements.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
60 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH & INCOME PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (7.32 %)
U.S. Treasury Note (b)
6.38 %, due 04/30/1999 ................. $ 6,375 $ 6,413
-------
Total U.S. Government Obligations
(cost: $ 6,405)..................................... 6,413
-------
CONVERTIBLE BONDS (1.22 %)
FINANCE (1.22 %)
Bell Atlantic Financial
Services - 144A (c)
5.75 %, due 04/01/2003 ................. 1,035 1,069
-------
Total Convertible Bonds
(cost: $ 1,049)..................................... 1,069
-------
NUMBER OF MARKET
SHARES VALUE
--------- ------
CONVERTIBLE PREFERRED STOCKS (4.29 %)
GAS PRODUCTION & DISTRIBUTION (3.33 %)
KN Energy, Inc. (a) ...................... 35,500 $ 1,334
MCN Energy Group Inc. .................... 84,500 1,579
SECURITY & COMMODITY BROKERS (0.96 %)
Merrill Lynch & Co., Inc.
IGL - STRYPES .......................... 35,500 843
-------
Total Convertible Preferred Stocks
(cost: $ 4,261)..................................... 3,756
-------
COMMON STOCKS (78.19 %)
BUSINESS SERVICES (0.06 %)
The Wackenhut Corporation -
Class A ................................ 2,000 51
ELECTRIC SERVICES (15.98 %)
BEC Energy ............................... 42,700 1,759
Dominion Resources, Inc. ................. 21,100 986
DQE, Inc. ................................ 31,500 1,384
Edison International ..................... 47,000 1,310
Florida Progress Corporation ............. 28,000 1,255
FPL Group, Inc. .......................... 23,500 1,448
New England Electric System .............. 37,900 1,824
OGE Energy Corp. ......................... 59,500 1,726
Potomac Electric Power Company ........... 32,400 853
PowerGen Plc - Sponsored ADR ............. 12,000 642
Puget Sound Energy, Inc. ................. 29,300 817
ELECTRIC, GAS & SANITARY SERVICES (14.81 %)
American States Water Company ............ 39,100 1,065
California Water Service Group ........... 22,400 701
CMS Energy Corporation ................... 26,400 1,279
E' Town Corporation ...................... 26,500 1,255
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
ELECTRIC, GAS & SANITARY SERVICES (CONTINUED)
NIPSCO Industries, Inc. .................. 32,900 $ 1,001
Northwestern Corporation ................. 28,900 764
PacifiCorp ............................... 38,600 813
PG&E Corporation ......................... 47,100 1,484
Public Service Enterprise Group
Incorporated ........................... 15,400 616
Rochester Gas and Electric
Corporation ............................ 33,400 1,044
Sempra Energy ............................ 58,500 1,484
United Water Resources Inc. .............. 31,500 754
VEBA AG - Sponsored ADR .................. 12,000 719
FOOD & KINDRED PRODUCTS (2.46 %)
General Mills, Inc. ...................... 16,800 1,306
McCormick & Company,
Incorporated ........................... 25,200 852
GAS PRODUCTION & DISTRIBUTION (14.56 %)
AGL Resources Inc. ....................... 56,200 1,296
Atmos Energy Corporation ................. 38,100 1,229
Connecticut Energy Corporation ........... 15,900 485
Consolidated Natural Gas
Company ................................ 26,100 1,409
El Paso Energy Corporation ............... 37,100 1,292
Equitable Resources, Inc. ................ 27,200 792
KeySpan Energy Corporation ............... 74,900 2,321
National Fuel Gas Company ................ 34,000 1,536
Northwest Natural Gas Company ............ 19,700 510
Questar Corporation ...................... 43,300 839
Southwest Gas Corporation ................ 39,000 1,048
HOLDING & OTHER INVESTMENT OFFICES (19.08 %)
ABB AB - Sponsored ADR ................... 60,000 660
Apartment Investment and
Management Company -
Class A (b) ............................ 45,000 1,673
Archstone Communities Trust (b) .......... 53,000 1,073
AvalonBay Communities, Inc. .............. 45,667 1,564
BRE Properties, Inc. - Class A ........... 39,300 973
Camden Property Trust .................... 56,700 1,474
Colonial Properties Trust ................ 28,700 764
Equity Residential Properties Trust....... 43,343 1,753
First Industrial Realty Trust, Inc. ...... 49,300 1,322
HRPT Properties Trust .................... 84,000 1,181
Irvine Apartment
Communities, Inc. ...................... 58,500 1,865
Liberty Property Trust ................... 41,500 1,022
Prentiss Properties Trust ................ 61,900 1,381
METAL CANS & SHIPPING CONTAINERS (0.78 %)
Crown Cork & Seal Company, Inc............ 22,200 684
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 61
<PAGE>
SCHEDULE OF INVESTMENTS
GROWTH & INCOME PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
METAL MINING (1.46 %)
Barrick Gold Corporation (b) ...... 65,600 $ 1,279
MINING (1.48 %)
USEC Inc. ......................... 93,600 1,299
OIL & GAS EXTRACTION (0.87 %)
Kerr-McGee Corporation (b) ........ 20,000 765
PETROLEUM REFINING (1.05 %)
Ultramar Diamond Shamrock
Corporation ..................... 38,000 922
REAL ESTATE (3.88 %)
AMB Property Corporation .......... 54,900 1,208
Post Properties, Inc. (b) ......... 38,300 1,472
ProLogis Trust .................... 34,500 716
TELECOMMUNICATIONS (1.72 %)
AT&T Corp. ........................ 20,000 1,505
--------
Total Common Stocks
(cost: $ 65,621).............................. 68,504
--------
SHORT-TERM OBLIGATIONS (8.97 %)
Greenwich Capital Markets, Inc. (d)
4.50 %, Repurchase Agreement
dated 12/31/1998 to be
purchased at $ 7,868 on
01/04/1999 ...................... $ 7,864 $ 7,864
--------
Total Short-Term Obligations
(cost: $ 7,864).............................. 7,864
--------
Total Investment Securities
(cost: $ 85,200)............................. $ 87,606
========
SUMMARY
Investments, at market value ...... 99.99 % $ 87,606
Other assets in
excess of liabilities ........... 0.01 % 10
------ --------
Net assets ........................ 100.00 % $ 87,616
====== ========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market
value of all securities on loan at December 31, 1998 is
$ 10,834. See footnote 1F to the financial statements.
(c) Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
(d) Collateralized by $ 4,742 U.S. Treasury Bonds 11.25 % due 02/15/2015;
market value and accrued interest aggregated $ 8,063 for this
collateral at December 31, 1998.
ADR American Depositary Receipt
STRYPES Structured Yield Product Exchangeable for Common Stock
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
62 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
TACTICAL ASSET ALLOCATION PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
U.S. GOVERNMENT OBLIGATIONS (5.88 %)
U.S. Treasury Note
5.88 %, due 02/15/2004 ..................... $ 10,000 $ 10,550
U.S. Treasury Note (b)
6.50 %, due 05/15/2005 ..................... 10,000 10,955
--------
Total U.S. Government Obligations
(cost: $ 20,501).......................................... 21,505
--------
U.S. GOVERNMENT AGENCY OBLIGATIONS (5.22 %)
Federal Home Loan Bank
5.50 %, due 07/14/2000 ..................... 10,000 10,089
Federal Home Loan Bank
6.10 %, due 04/29/2004 ..................... 9,000 9,000
--------
Total U.S. Government Agency Obligations
(cost: $ 18,983).......................................... 19,089
--------
CORPORATE DEBT SECURITIES (21.26 %)
AUTO REPAIR, SERVICES & PARKING (2.49 %)
PHH Corporation
7.02 %, due 11/09/2001 ..................... 9,000 9,095
CHEMICALS & ALLIED PRODUCTS (2.21 %)
E. I. du Pont de Nemours
and Company
6.50 %, due 09/01/2002 ..................... 7,750 8,099
ELECTRIC SERVICES (2.47 %)
The Washington Water
Power Company
5.99 %, due 12/10/2007 ..................... 9,000 9,028
FINANCE (6.95 %)
Fannie Mae
5.63 %, due 03/15/2001 ..................... 8,000 8,130
Fannie Mae
5.25 %, due 01/15/2003 ..................... 8,000 8,066
Fannie Mae
7.50 %, due 02/02/2007 ..................... 9,000 9,221
PERSONAL CREDIT INSTITUTIONS (2.55 %)
Commercial Credit Company
6.50 %, due 08/01/2004 ..................... 9,000 9,315
PERSONAL SERVICES (2.51 %)
Cendant Corporation
7.75 %, due 12/01/2003 ..................... 9,000 9,198
SECURITY & COMMODITY BROKERS (2.08 %)
Merrill Lynch & Co., Inc.
6.02 %, due 05/11/2001 ..................... 7,500 7,594
--------
Total Corporate Debt Securities
(cost: $ 76,519).......................................... 77,746
--------
NUMBER OF MARKET
SHARES VALUE
--------- ------
PREFERRED STOCKS (3.04 %)
MOTION PICTURES (3.04 %)
The News Corporation Limited -
Sponsored ADR (b) .......................... 450,000 $ 11,108
--------
Total Preferred Stocks
(cost: $ 8,560)........................................... 11,108
--------
COMMON STOCKS (54.25 %)
AIR TRANSPORTATION (0.69 %)
Comair Holdings, Inc. ........................ 75,000 2,531
AUTOMOTIVE (1.86 %)
Ford Motor Company ........................... 60,000 3,521
PACCAR Inc. .................................. 80,000 3,290
COMMERCIAL BANKS (1.12 %)
The Chase Manhattan
Corporation ................................ 60,000 4,084
COMMUNICATION (0.47 %)
Cox Communications, Inc. -
Class A (a) (b) ............................ 25,000 1,728
COMMUNICATIONS EQUIPMENT (1.46 %)
ECI Telecom Ltd. ............................. 150,000 5,344
COMPUTER & DATA PROCESSING SERVICES (1.28 %)
NCR Corporation (a) .......................... 111,750 4,666
ELECTRIC SERVICES (2.56 %)
Houston Industries Incorporated .............. 100,000 3,213
Illinova Corporation ......................... 100,000 2,500
The Southern Company ......................... 125,000 3,633
ELECTRIC, GAS & SANITARY SERVICES (1.34 %)
DPL Inc. ..................................... 226,500 4,898
FINANCE (2.54 %)
Fannie Mae ................................... 60,000 4,440
Freddie Mac .................................. 75,000 4,833
FOOD & KINDRED PRODUCTS (3.29 %)
Philip Morris Companies Inc. ................. 225,000 12,037
HEALTH SERVICES (1.35 %)
Columbia/HCA Healthcare
Corporation ................................ 200,000 4,950
HOLDING & OTHER INVESTMENT OFFICES (4.88 %)
Duke Realty Investments, Inc. ................ 150,000 3,488
Equity Residential Properties
Trust (b) .................................. 53,000 2,143
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 63
<PAGE>
SCHEDULE OF INVESTMENTS
TACTICAL ASSET ALLOCATION PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
HOLDING & OTHER INVESTMENT OFFICES (CONTINUED)
Health Care Property
Investors, Inc. ............................ 100,700 $ 3,097
Merry Land Properties, Inc. (a) .............. 5,000 18
Simon Property Group, Inc. ................... 150,000 4,275
Storage USA, Inc. ............................ 150,000 4,847
INDUSTRIAL MACHINERY & EQUIPMENT (0.43 %)
AGCO Corporation ............................. 200,000 1,575
INSTRUMENTS & RELATED PRODUCTS (1.31 %)
Raytheon Company - Class B ................... 90,000 4,793
INSURANCE (8.61 %)
AFLAC Incorporated ........................... 150,000 6,600
Ambac Financial Group, Inc. .................. 100,000 6,019
Conseco, Inc. (b) ............................ 148,320 4,533
Frontier Insurance Group, Inc. (b)............ 275,000 3,541
MGIC Investment Corporation .................. 100,000 3,981
The Allstate Corporation ..................... 100,000 3,863
The PMI Group, Inc. .......................... 60,300 2,977
LUMBER & WOOD PRODUCTS (1.42 %)
Clayton Homes, Inc. .......................... 375,000 5,180
MINING (1.31 %)
Potash Corporation of
Saskatchewan Inc. (b) ...................... 75,000 4,791
MORTGAGE BANKERS AND BROKERS (1.28 %)
Countrywide Credit
Industries, Inc. ........................... 93,400 4,688
OIL & GAS EXTRACTION (1.71 %)
Diamond Offshore
Drilling, Inc. (b) ......................... 210,000 4,974
R&B Falcon Corporation (a) ................... 170,000 1,296
RAILROADS (0.68 %)
CSX Corporation .............................. 60,000 2,490
RESTAURANTS (3.51 %)
Cracker Barrel Old Country
Store, Inc. ................................ 175,000 4,080
Tricon Global
Restaurants, Inc. (a) ...................... 175,000 8,772
SHOE STORES (1.30 %)
Payless ShoeSource, Inc. (a) ................. 100,000 4,738
NUMBER OF MARKET
SHARES VALUE
--------- ------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (5.45 %)
Alltel Corporation ........................... 92,500 $ 5,533
AT&T Corp. (b) ............................... 160,000 12,039
Sprint Corporation ........................... 25,000 2,103
Sprint PCS (a) ............................... 12,500 289
TRANSPORTATION EQUIPMENT (1.98 %)
Halter Marine Group, Inc. (a) ................ 300,000 1,463
Trinity Industries, Inc. ..................... 150,000 5,775
WATER TRANSPORTATION (1.43 %)
Tidewater Inc. ............................... 225,000 5,217
WHOLESALE TRADE DURABLE GOODS (0.99 %)
Miami Computer Supply
Corporation (a) (b) ......................... 146,700 3,612
---------
Total Common Stocks
(cost: $ 180,380)........................................ 198,458
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
COMMERCIAL PAPER (9.52 %)
Block Financial Corporation
5.30 %, due 01/04/1999 ..................... $ 5,400 $ 5,398
Concord Minutemen
Capital Co. - 144A (c)
5.70 %, due 01/15/1999 ..................... 6,500 6,486
Consolidation Coal Company
6.10 %, due 01/04/1999 ..................... 5,000 4,997
Consolidation Coal Company
6.00 %, due 01/21/1999 ..................... 5,000 4,983
Distribution Funding Corp.
6.00 %, due 01/05/1999 ..................... 9,950 9,943
General Motors Acceptance
Corporation
5.57 %, due 01/12/1999 ..................... 1,500 1,497
Triple A One Funding
Corp. - 144A (c)
6.01 %, due 01/08/1999 ..................... 500 499
Windmill Funding Corp.
5.57 %, due 01/05/1999 ..................... 1,000 999
---------
Total Commercial Paper
(cost: $ 34,802)........................................... 34,802
---------
Total Investment Securities
(cost: $ 339,745).......................................... $ 362,708
=========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
64 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
TACTICAL ASSET ALLOCATION PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
SUMMARY
Investments, at market value ......... 99.17 % $ 362,708
Other assets in
excess of liabilities .............. 0.83 % 3,030
----- ---------
Net assets ........................... 100.00 % $ 365,738
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 47,288. See
footnote 1F to the financial statements.
(c) Securities are registered pursuant to Rule 144A and may be
deemed to be restricted for resale.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 65
<PAGE>
SCHEDULE OF INVESTMENTS
C.A.S.E. GROWTH PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
---------- ---------
COMMON STOCKS (101.21 %)
AEROSPACE (0.70 %)
The Boeing Company ............................. 15,000 $ 489
AIR TRANSPORTATION (1.29 %)
UAL Corporation (a) ............................ 15,000 895
APPAREL & ACCESSORY STORES (8.88 %)
Claire's Stores, Inc. .......................... 113,000 2,317
Pacific Sunwear of
California, Inc. (a) (b) ..................... 110,000 1,801
Ross Stores, Inc. .............................. 52,000 2,048
APPAREL PRODUCTS (5.60 %)
Jones Apparel Group, Inc. (a) .................. 94,700 2,089
Tommy Hilfiger Corporation (a) ................. 30,000 1,800
CHEMICALS & ALLIED PRODUCTS (1.07 %)
Colgate-Palmolive Company ...................... 8,000 743
COMMERCIAL BANKS (4.06 %)
Bank One Corporation ........................... 25,000 1,277
BankAmerica Corporation ........................ 25,658 1,543
COMMUNICATIONS EQUIPMENT (18.21 %)
ADC Telecommunications, Inc. (a)................ 121,000 4,206
CIENA Corporation (a) (b) ...................... 194,200 2,840
Northern Telecom Limited (b) ................... 43,000 2,155
Tellabs, Inc. (a) .............................. 50,000 3,429
COMPUTER & DATA PROCESSING SERVICES (16.77 %)
BMC Software, Inc. (a) (b) ..................... 74,000 3,298
Broadvision, Inc. (a) .......................... 60,000 1,920
Computer Sciences Corporation (a)............... 40,000 2,578
Excite, Inc. (a) (b) ........................... 43,000 1,809
Structural Dynamics Research
Corporation (a) .............................. 42,000 835
Symantec Corporation (a) ....................... 55,000 1,196
COMPUTER & OFFICE EQUIPMENT (4.98 %)
3Com Corporation (a) ........................... 27,100 1,214
Storage Technology
Corporation (a) .............................. 63,000 2,240
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (4.53 %)
General Electric Company ....................... 16,000 1,633
U.S. Industries, Inc. .......................... 81,000 1,509
FABRICATED METAL PRODUCTS (1.67 %)
The Gillette Company ........................... 24,000 1,160
HEALTH SERVICES (0.87 %)
NovaCare, Inc. (a) ............................. 241,000 603
NUMBER OF MARKET
SHARES VALUE
---------- ---------
COMMON STOCKS (CONTINUED)
HOLDING & OTHER INVESTMENT OFFICES (0.70 %)
Inacom Corp. (a) (b) ........................... 32,500 $ 483
HOTELS & OTHER LODGING PLACES (1.06 %)
Prime Hospitality Corp. (a) .................... 70,000 739
INSURANCE (3.26 %)
Citigroup Inc. ................................. 35,500 1,757
CMAC Investment Corporation .................... 11,000 505
MEDICAL INSTRUMENTS & SUPPLIES (2.63 %)
Respironics, Inc. (a) .......................... 91,000 1,823
OIL & GAS EXTRACTION (1.11 %)
Diamond Offshore Drilling, Inc. ................ 16,000 379
Global Marine Inc. (a) ......................... 42,700 392
PETROLEUM REFINING (0.31 %)
PennzEnergy Company ............................ 7,000 114
Pennzoil-Quaker State
Company (a) .................................. 7,000 103
PHARMACEUTICALS (2.55 %)
Merck & Co., Inc. .............................. 12,000 1,772
RADIO, TELEVISION, & COMPUTER STORES (0.96 %)
CompUSA Inc. (a) ............................... 51,000 666
SAVINGS INSTITUTIONS (1.87 %)
Washington Mutual, Inc. ........................ 34,000 1,298
SECURITY & COMMODITY BROKERS (0.57 %)
Lehman Brothers Holdings Inc. .................. 9,000 397
SHOE STORES (2.98 %)
Genesco Inc. (a) ............................... 363,000 2,065
TELECOMMUNICATIONS (7.71 %)
AT&T Corp. ..................................... 33,000 2,483
MCI WORLDCOM, Inc. (a) ......................... 40,000 2,870
TRANSPORTATION EQUIPMENT (0.60 %)
Halter Marine Group, Inc. (a) .................. 85,000 414
TRUCKING & WAREHOUSING (1.27 %)
Yellow Corporation (a) ......................... 46,000 880
VARIETY STORES (3.02 %)
Kmart Corporation (a) .......................... 137,000 2,098
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
66 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
C.A.S.E. GROWTH PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
---------- ---------
COMMON STOCKS (CONTINUED)
WATER TRANSPORTATION (1.98 %)
SEACOR SMIT Inc. (a) (b) ....................... 17,000 $ 840
Tidewater Inc. ................................. 17,000 394
Trico Marine Services, Inc. (a) ................ 29,000 141
--------
Total Common Stocks
(cost: $ 77,157).......................................... 70,240
--------
Total Investment Securities
(cost: $ 77,157)........................................... $ 70,240
========
SUMMARY
Investments, at market value ................... 101.21 % $ 70,240
Liabilities in
excess of other assets ....................... (1.21)% (839)
------ --------
Net assets ..................................... 100.00 % $ 69,401
====== ========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 5,956. See
footnote 1F to the financial statements.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 67
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL SECTOR PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
PRINCIPAL MARKET
AMOUNT VALUE
---------- ---------
U.S. GOVERNMENT OBLIGATIONS (28.99 %)
U.S. Treasury Note
6.63 %, due 06/30/2001 ....................... $ 1,435 $ 1,501
U.S. Treasury Note
5.88 %, due 02/15/2004 ....................... 730 773
U.S. Treasury Note
7.25 %, due 08/15/2004 ....................... 520 584
U.S. Treasury Note
6.63 %, due 05/15/2007 ....................... 450 506
-------
Total U.S. Government Obligations
(cost: $ 3,165)........................................... 3,364
-------
ASSET-BACKED SECURITIES (0.59 %)
General Motors Acceptance
Corporation
6.75 %, due 03/15/2003 ....................... 66 69
-------
Total Asset-Backed Securities
(cost: $ 65).............................................. 69
-------
CORPORATE DEBT SECURITIES (4.75 %)
COMMERCIAL BANKS (0.59 %)
NationsBank Corporation
7.00 %, due 05/15/2003 ....................... 65 68
ELECTRIC, GAS & SANITARY SERVICES (2.77 %)
Pacific Gas & Electric Company
7.88 %, due 03/01/2002 ....................... 300 322
PERSONAL CREDIT INSTITUTIONS (1.39 %)
Commercial Credit Company
6.13 %, due 12/01/2005 ....................... 160 161
-------
Total Corporate Debt Securities
(cost: $ 530).................................................. 551
-------
NUMBER OF MARKET
SHARES VALUE
--------- -------
PREFERRED STOCKS (1.63 %)
COMPUTER & DATA PROCESSING SERVICES (1.63 %)
SAP AG - Vorzug ................................ 395 $ 189
-------
Total Preferred Stocks
(cost: $ 63)..................................................... 189
-------
COMMON STOCKS (62.72 %) APPAREL PRODUCTS (0.72 %)
Adidas-Salomon AG .............................. 760 83
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
AUTO REPAIR, SERVICES & PARKING (0.50 %)
Rollins Truck Leasing Corp. .................... 2,550 $ 38
Ryder System, Inc. ............................. 750 20
AUTOMOTIVE (2.05 %)
Bayerische Motoren
Werke AG ..................................... 105 81
Bayerische Motoren
Werke AG - New (a) ........................... 21 16
Honda Motor Company, Ltd. ...................... 1,800 59
Nissan Motor Company, Ltd. ..................... 9,000 28
Toyota Motor Corporation ....................... 2,000 54
AUTOMOTIVE DEALERS & SERVICE STATIONS (0.57 %)
AutoZone, Inc. (a) ............................. 2,000 66
BEER, WINE, & DISTILLED BEVERAGES (0.55 %)
Carlsberg A/S - Class A ........................ 1,100 64
BUSINESS SERVICES (2.88 %)
Omnicom Group Inc. ............................. 1,100 64
Orix Corp. ..................................... 900 67
Secom Co. Ltd. ................................. 800 66
Sophus Berendsen - New - Class B ............... 400 14
The Interpublic Group of
Companies, Inc. .............................. 900 72
True North Communications Inc. ................. 1,900 51
CHEMICALS & ALLIED PRODUCTS (2.29 %)
Bayer AG ....................................... 1,980 83
Cheminova Holding A/S - Class B ................ 2,000 33
Degussa AG ..................................... 1,200 66
Mitsubishi Chemical Corp. ...................... 16,000 34
The Sherwin-Williams Company ................... 1,700 50
COMMERCIAL BANKS (1.22 %)
Den Danske Bank ................................ 1,050 141
COMMUNICATIONS EQUIPMENT (2.00 %)
ADC Telecommunications, Inc. (a)................ 1,800 63
Motorola, Inc. ................................. 1,000 61
Northern Telecom Limited ....................... 1,058 53
Tellabs, Inc. (a) .............................. 800 55
COMPUTER & DATA PROCESSING SERVICES (0.59 %)
Acxiom Corporation (a) ......................... 2,200 68
COMPUTER & OFFICE EQUIPMENT (4.63 %)
3Com Corporation (a) ........................... 2,100 94
Ascend Communications, Inc. (a) ................ 1,100 72
Cabletron Systems, Inc. (a) .................... 4,700 39
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
68 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL SECTOR PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
COMPUTER & OFFICE EQUIPMENT (CONTINUED)
Cisco Systems, Inc. (a) ........................ 1,372 $ 127
EMC Corporation (a) ............................ 600 51
Lexmark International Group, Inc. -
Class A (a) .................................. 500 50
Quantum Corporation (a) ........................ 1,500 32
Seagate Technology, Inc. (a) ................... 1,200 36
Storage Technology
Corporation (a) .............................. 1,000 36
CONSTRUCTION (2.07 %)
Daiwa House Industry Co., Ltd. ................. 5,000 53
Fluor Corporation .............................. 1,100 47
Granite Construction Incorporated............... 1,300 44
Jacobs Engineering
Group Inc. (a) ............................... 1,400 57
Morrison Knudsen
Corporation (a) .............................. 4,000 39
ELECTRIC SERVICES (0.52 %)
VEBA AG ........................................ 1,000 60
ELECTRICAL GOODS (0.41 %)
Hughes Supply, Inc. ............................ 1,600 47
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.00 %)
Canon, Inc. .................................... 2,000 43
NEC Corporation ................................ 7,200 66
Sharp Corporation .............................. 8,000 72
Sony Corporation ............................... 700 51
ELECTRONIC COMPONENTS & ACCESSORIES (0.69 %)
Fujitsu Ltd. ................................... 6,000 80
ENGINEERING & MANAGEMENT SERVICES (0.39 %)
ACNielsen Corporation (a) ...................... 1,600 45
ENVIRONMENTAL SERVICES (0.73 %)
Ratin A/S - Class B ............................ 400 85
FABRICATED METAL PRODUCTS (0.26 %)
Mitsubishi Materials Corporation ............... 18,000 30
FOOD & KINDRED PRODUCTS (1.66 %)
Danisco A/S .................................... 1,000 54
Philip Morris Companies Inc. ................... 1,500 80
RJR Nabisco Holdings Corp. ..................... 2,000 59
FURNITURE & HOME FURNISHINGS STORES (0.47 %)
Bed Bath & Beyond Inc. (a) ..................... 1,600 55
HOLDING & OTHER INVESTMENT OFFICES (0.76 %)
Marubeni Corporation ........................... 25,000 43
Nikko Securities Company Ltd. .................. 16,000 45
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
INDUSTRIAL MACHINERY & EQUIPMENT (1.42 %)
Applied Materials, Inc. (a) .................... 1,900 $ 81
Novellus Systems, Inc. (a) ..................... 1,700 84
INSTRUMENTS & RELATED PRODUCTS (1.65 %)
Fuji Photo Film ................................ 1,000 37
KLA-Tencor Corporation (a) ..................... 1,600 69
Teradyne, Inc. (a) ............................. 2,000 85
INSURANCE (2.78 %)
A/S Forsikringsselskabet Codan ................. 400 47
Berkshire Hathaway Inc. -
Class A (a) .................................. 1 74
The Allstate Corporation ....................... 1,400 54
The Chubb Corporation .......................... 800 52
The St. Paul Companies, Inc. ................... 2,761 96
INSURANCE AGENTS, BROKERS & SERVICE (0.63 %)
Allianz AG ..................................... 200 73
LEATHER & LEATHER PRODUCTS (0.61 %)
Nine West Group Inc. (a) ....................... 2,000 31
Wolverine World Wide, Inc. ..................... 3,000 40
LUMBER & OTHER BUILDING MATERIALS (1.66 %)
Fastenal Company ............................... 1,200 53
Lowe's Companies, Inc. ......................... 1,300 67
The Home Depot, Inc. ........................... 1,200 73
MACHINERY, EQUIPMENT & SUPPLIES (1.79 %)
Daikin Industries Ltd. ......................... 7,000 70
Mannesmann AG .................................. 1,200 138
MEDICAL INSTRUMENTS & SUPPLIES (1.94 %)
Baxter International Inc. ...................... 600 39
Becton, Dickinson and Company .................. 900 38
Boston Scientific Corporation (a) .............. 1,800 48
Guidant Corporation ............................ 500 55
Medtronic, Inc. ................................ 600 45
METAL MINING (2.52 %)
Barrick Gold Corporation ....................... 4,100 80
Battle Mountain Gold Company ................... 14,400 59
Homestake Mining Company ....................... 5,400 50
Newmont Mining Corporation ..................... 2,100 38
Placer Dome Inc. ............................... 5,700 66
PHARMACEUTICALS (5.51 %)
Amgen Inc. (a) ................................. 300 31
Bergen Brunswig Corporation .................... 1,000 35
Biogen, Inc. (a) ............................... 300 25
Cardinal Health, Inc. .......................... 400 30
Centocor, Inc. (a) ............................. 500 23
Chiron Corporation (a) ......................... 1,000 26
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 69
<PAGE>
SCHEDULE OF INVESTMENTS
GLOBAL SECTOR PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
PHARMACEUTICALS (CONTINUED)
Genzyme Corporation -
General (a) .................................. 400 $ 20
ICN Pharmaceuticals, Inc. ...................... 1,600 36
Jones Pharma Incorporated ...................... 1,200 44
McKesson Corporation ........................... 400 32
MedImmune, Inc. (a) ............................ 600 60
Mylan Laboratories Inc. ........................ 1,200 38
Novo Nordisk A/S - Class B ..................... 1,150 152
Sankyo Company, Ltd. ........................... 2,000 44
Watson Pharmaceuticals, Inc. (a) ............... 700 44
PRIMARY METAL INDUSTRIES (0.37 %)
Andrew Corporation (a) ......................... 2,600 43
REAL ESTATE (0.35 %)
Mitsui Fudosan Co., Ltd. ....................... 5,400 41
RESTAURANTS (2.63 %)
Cracker Barrel Old Country
Store, Inc. .................................. 1,440 34
Lone Star Steakhouse &
Saloon, Inc. (a) ............................. 2,950 27
McDonald's Corporation ......................... 1,370 105
Starbucks Corporation (a) ...................... 1,000 56
Tricon Global
Restaurants, Inc. (a) ........................ 1,000 50
Wendy's International, Inc. .................... 1,500 33
RETAIL TRADE (2.46 %)
Office Depot, Inc. (a) ......................... 3,600 133
OfficeMax, Inc. (a) ............................ 3,000 36
Staples, Inc. (a) .............................. 2,000 87
Toys "R" Us, Inc. (a) .......................... 1,700 29
RUBBER & MISC. PLASTIC PRODUCTS (0.61 %)
Nike, Inc. - Class B ........................... 1,000 41
Reebok International Ltd. (a) .................. 2,000 30
TELECOMMUNICATIONS (5.38 %)
Ameritech Corporation .......................... 1,400 89
BellSouth Corporation .......................... 2,000 100
Deutsche Telekom AG ............................ 3,800 125
GTE Corporation ................................ 1,100 74
Lucent Technologies Inc. ....................... 500 55
Nippon Telegraph &
Telephone Corp. .............................. 6 46
Tele Danmark A/S ............................... 1,000 135
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
TEXTILE MILL PRODUCTS (0.32 %)
Toray Industries, Inc. ......................... 7,000 $ 37
TOBACCO PRODUCTS (0.63 %)
UST Inc. ....................................... 2,100 73
TRANSPORTATION EQUIPMENT (0.30 %)
McDermott International, Inc. .................. 1,400 35
TRUCKING & WAREHOUSING (0.73 %)
J.B. Hunt Transport Services, Inc. ............. 1,500 35
USFreightways Corporation ...................... 850 25
Werner Enterprises, Inc. ....................... 1,437 25
WHOLESALE TRADE NONDURABLE GOODS (0.47 %)
SUPERVALU INC. ................................. 1,000 28
SYSCO Corporation .............................. 1,000 27
--------
Total Common Stocks
(cost: $ 6,919)........................................... 7,278
--------
Total Investment Securities
(cost: $ 10,742).......................................... $ 11,451
========
SUMMARY
Investments, at market value ................... 98.68 % $ 11,451
Other assets in
excess of liabilities ........................ 1.32 % 153
----- --------
Net assets ..................................... 100.00 % $ 11,604
====== ========
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS, AT
MARKET VALUE.
MARKET
VALUE PERCENTAGE
-------- ----------
Denmark ......................................... $ 725 6.33 %
Germany ......................................... 913 7.97 %
Japan ........................................... 1,068 9.33 %
United States ................................... 8,745 76.37 %
-------- -----
Investments, at market value ............... $ 11,451 100.00 %
======== ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No 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.
70 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
VALUE EQUITY PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- --------
COMMON STOCKS (89.61 %)
AEROSPACE (1.67 %)
Lockheed Martin
Corporation .................................. 30,900 $ 2,619
AIR TRANSPORTATION (2.48 %)
Delta Air Lines, Inc. ........................... 75,000 3,900
CHEMICALS & ALLIED PRODUCTS (4.81 %)
Air Products and Chemicals, Inc. ................ 59,600 2,384
IMC Global Inc. ................................. 55,700 1,191
Morton International, Inc. ...................... 69,000 1,691
Praxair, Inc. ................................... 65,000 2,291
COMMERCIAL BANKS (17.42 %)
Bank One Corporation ............................ 74,000 3,779
BankAmerica Corporation ......................... 30,000 1,804
First Union Corporation ......................... 98,800 6,008
National City Corporation ....................... 46,600 3,379
The Bank of New York
Company, Inc. ................................ 60,000 2,415
The Chase Manhattan
Corporation .................................. 68,800 4,683
Wells Fargo & Company ........................... 133,400 5,328
COMPUTER & OFFICE EQUIPMENT (2.73 %)
Hewlett-Packard Company ......................... 31,800 2,172
Xerox Corporation ............................... 18,000 2,124
CONSTRUCTION (2.95 %)
Foster Wheeler Corporation ...................... 11,800 156
Halliburton Company ............................. 151,200 4,479
DEPARTMENT STORES (1.75 %)
Federated Department
Stores, Inc. (a) (b) ......................... 63,000 2,744
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.94 %)
Cooper Industries, Inc. ......................... 42,700 2,036
Thomas & Betts Corporation ...................... 23,300 1,009
ELECTRONIC COMPONENTS & ACCESSORIES (3.41 %)
Texas Instruments
Incorporated ................................. 62,600 5,356
ENVIRONMENTAL SERVICES (2.37 %)
Waste Management, Inc. .......................... 80,000 3,730
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
FABRICATED METAL PRODUCTS (2.68 %)
Fortune Brands, Inc. ............................ 133,000 $ 4,206
FOOD & KINDRED PRODUCTS (6.64 %)
Philip Morris Companies Inc. ..................... 195,000 10,433
HEALTH SERVICES (1.71 %)
Columbia/HCA Healthcare
Corporation .................................. 108,900 2,695
INDUSTRIAL MACHINERY & EQUIPMENT (8.80 %)
Case Corporation (b) ............................ 83,000 1,810
Deere & Company ................................. 81,450 2,698
Harnischfeger Industries, Inc. .................. 32,000 326
Ingersoll-Rand Company .......................... 66,500 3,121
Kennametal Inc. ................................. 12,300 261
Sundstrand Corporation .......................... 61,550 3,193
Weatherford
International, Inc. (a) ...................... 125,000 2,422
INSTRUMENTS & RELATED PRODUCTS (1.74 %)
Emerson Electric Co. ............................ 43,600 2,728
INSURANCE (8.99 %)
Aetna Inc. ...................................... 53,000 4,167
Loews Corporation ............................... 78,700 7,731
The Allstate Corporation ........................ 57,800 2,233
LIFE INSURANCE (2.12 %)
Travelers Property
Casualty Corp. ............................... 107,300 3,326
MOTION PICTURES (2.92 %)
Time Warner Inc. (b) ............................ 74,000 4,593
OIL & GAS EXTRACTION (3.08 %)
Noble Affiliates, Inc. .......................... 32,500 800
Noble Drilling Corporation (a) .................. 147,600 1,910
Ocean Energy, Inc. (a) .......................... 212,690 1,343
Transocean Offshore Inc. ........................ 29,400 788
PAPER & ALLIED PRODUCTS (0.94 %)
Champion International
Corporation .................................. 36,300 1,470
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 71
<PAGE>
SCHEDULE OF INVESTMENTS
VALUE EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
PERSONAL CREDIT INSTITUTIONS (0.58 %)
Household International, Inc. .................. 22,950 $ 909
PRINTING & PUBLISHING (1.83 %)
American Greetings Corporation -
Class A ...................................... 70,000 2,874
SECURITY & COMMODITY BROKERS (1.02 %)
The Bear Stearns Companies Inc. ................. 42,750 1,598
TELECOMMUNICATIONS (2.56 %)
MediaOne Group, Inc. (a) (b) .................... 85,600 4,023
WATER TRANSPORTATION (0.54 %)
Tidewater Inc. .................................. 36,900 856
WHOLESALE TRADE DURABLE GOODS (1.93 %)
W.W. Grainger, Inc. ............................. 73,000 3,039
------
Total Common Stocks
(cost: $ 139,987) ........................................ 140,831
-------
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS (6.30 %)
U.S. Treasury Bill
4.61 %, due 03/25/1999 ....................... $ 10,000 $ 9,894
---------
Total Short-Term U.S.
Government Obligations
(cost: $ 9,894).............................................. 9,894
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
SHORT-TERM OBLIGATIONS (4.00 %)
Investors Bank & Trust Company (c)
4.25 %, Repurchase Agreement dated
12/31/1998 to be repurchased at $ 6,292
on 01/04/1999 ................................ $ 6,289 $ 6,289
--------
Total Short-Term Obligations
(cost: $ 6,289)............................................... 6,289
--------
Total Investment Securities
(cost: $ 156,170)............................................. $ 157,014
=========
SUMMARY
Investments, at market value ..................... 99.91 % $ 157,014
Other assets in
excess of liabilities ........................... 0.09 % 143
----- ---------
Net assets ....................................... 100.00 % $ 157,157
====== =========
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, the security is on loan. The market value
of all securities on loan at December 31, 1998 is $ 4,866. See
footnote 1F to the financial statements.
(c) Collateralized by $ 42,600 Freddie Mac Adjustable Rate Mortgage - 845202
7.47 % due 10/01/2022; $ 4,166 Freddie Mac Adjustable Rate Mortgage -
410134 7.66 % due 05/01/2025; market value and accrued interest
aggregated $ 5,732 and $ 871, respectively, for the collateral at
December 31, 1998.
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
72 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- --------
PREFERRED STOCKS (0.08 %)
MEDICAL INSTRUMENTS & SUPPLIES (0.08 %)
Fresenius Medical Care AG ....................... 527 $ 25
TELECOMMUNICATIONS (D)
Telerj Celular SA - Class B (a) ................. 25,800 1
-----
Total Preferred Stocks
(cost: $ 33)................................................ 26
-----
COMMON STOCKS (94.34 %)
AEROSPACE (0.50 %)
British Aerospace PLC ........................... 19,076 162
AMUSEMENT & RECREATION SERVICES (1.77 %)
Airtours PLC .................................... 45,231 289
Granada Group PLC ............................... 15,792 279
APPAREL PRODUCTS (0.58 %)
Adidas-Salomon AG ............................... 1,468 159
Giordano International, Limited ................. 76,000 14
Wacoal Corp. .................................... 1,000 13
AUTOMOTIVE (4.18 %)
Autoliv, Inc. ................................... 8,020 289
DaimlerChrysler AG (a) .......................... 2,770 274
Honda Motor Company, Ltd. ....................... 2,000 66
LucasVarity PLC ................................. 60,734 202
Renault SA ...................................... 3,371 152
Toyota Motor Corporation ........................ 1,000 27
Volkswagen AG ................................... 4,186 334
BEER, WINE, & DISTILLED BEVERAGES (0.82 %)
Diageo PLC ...................................... 21,945 250
Foster's Brewing Group Limited .................. 5,600 15
BEVERAGES (0.26 %)
Coca-Cola Amatil Limited ........................ 2,933 11
Panamerican Beverages, Inc. -
Class A ...................................... 3,265 71
BUSINESS SERVICES (0.80 %)
SEMA Group PLC .................................. 26,193 257
CHEMICALS & ALLIED PRODUCTS (0.37 %)
Kao Corporation ................................. 1,000 23
Shin-Etsu Chemical Co., Ltd. .................... 4,000 97
COMMERCIAL BANKS (14.26 %)
Alpha Credit Bank ................................ 855 89
Argentaria, Caja Postal y Banco
Hipotecario de Espana, SA ..................... 11,474 297
Banca Intesa SpA ................................. 29,195 175
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
COMMERCIAL BANKS (CONTINUED)
Banco Bilbao Vizcaya, SA ........................ 21,600 $ 337
Banco Comercial Portugues, SA ................... 5,396 166
Bank of Scotland ................................ 5,740 68
Bank of Tokyo-Mitsubishi, Ltd. .................. 1,000 10
Bayerische Hypo-und Vereinsbank ................. 3,242 254
BHW Holding AG .................................. 8,250 134
Commerzbank AG .................................. 213 7
Commonwealth Bank of Australia .................. 2,930 42
Deutsche Pfandbrief-und
Hypothekenbank AG ............................ 2,050 180
HSBC Holdings PLC ............................... 1 (c)
ING Groep NV .................................... 13,973 853
Lloyds TSB Group PLC ............................ 19,117 272
Merita Ltd. - Class A ........................... 24,520 155
National Australia Bank Limited ................. 2,700 41
National Bank of Greece SA -
GDR - 144A (a) (b) ........................... 734 32
Northern Rock PLC ............................... 17,000 159
Oversea-Chinese Banking
Corporation Ltd. ............................. 6,000 41
Sanwa Bank Ltd. ................................. 3,000 23
Societe Generale - Class A ...................... 1,279 207
Sumitomo Bank, Limited .......................... 1,000 10
Svenska Handelsbanken - Class A ................. 8,915 377
UBS AG .......................................... 675 208
Uniao de Bancos Brasileiros SA -
Sponsored GDR ................................ 3,120 45
Unicredito Italiano SpA ......................... 63,343 374
Westpac Banking Corporation
Limited ...................................... 4,400 29
COMMUNICATION (0.74 %)
Reed International PLC .......................... 26,830 210
Saatchi & Saatchi PLC ........................... 12,646 29
COMMUNICATIONS EQUIPMENT (5.19 %)
Comverse Technology, Inc. (a) ................... 1,874 133
ECI Telecom Ltd. ................................ 7,645 272
Nokia Oyj - Class A ............................. 7,861 956
Northern Telecom Limited ........................ 3,032 152
NTT Data Corporation ............................ 31 154
COMPUTER & DATA PROCESSING SERVICES (1.14 %)
Cap Gemini SA ................................... 2,284 367
COMPUTER & OFFICE EQUIPMENT (0.03 %)
Ricoh Company, Ltd. ............................. 1,000 9
CONSTRUCTION (1.97 %)
Beazer Group PLC ................................ 50,000 126
Suez Lyonnaise des Eaux ......................... 2,412 496
Toda Corporation ................................ 2,000 10
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 73
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
ELECTRIC SERVICES (1.79 %)
Endesa SA ....................................... 7,860 $ 208
Kyushu Electric Power Co.,
Incorporated ................................. 1,000 19
Tohoku Electric Power Co., Inc. ................. 1,000 18
Tokyo Electric Power ............................ 1,000 25
VEBA AG ......................................... 5,135 307
ELECTRIC, GAS & SANITARY SERVICES (0.07 %)
Kansai Electric Power
Company, Inc. ................................ 1,000 22
ELECTRICAL GOODS (0.38 %)
Johnson Electric Holdings, Ltd. ................. 35,400 91
Johnson Matthey PLC ............................. 4,740 32
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (2.84 %)
Canon, Inc. ..................................... 11,000 236
General Electric Company PLC .................... 20,200 182
Mabuchi Motor Co., Ltd. ......................... 200 15
Matsushita Electric Industrial
Company, Ltd. ................................ 1,000 18
Mitsumi Electric Company, Ltd. .................. 1,000 21
Nintendo Company Ltd. ........................... 200 19
Pioneer Electronic Corporation .................. 1,000 17
Royal Philips Electronics NV .................... 3,014 202
Sony Corporation ................................ 2,800 204
ELECTRONIC COMPONENTS & ACCESSORIES (1.39 %)
Electrocomponents PLC ........................... 14,059 94
Fujitsu Ltd. .................................... 1,000 13
Minebea Company Ltd. ............................ 9,000 103
Taiwan Semiconductor
Manufacturing Company Ltd. -
Sponsored ADR (a) ............................ 9,587 136
Toshiba Corporation ............................. 17,000 101
ENGINEERING & MANAGEMENT SERVICES (0.51 %)
ABB AG .......................................... 92 108
VA Technologie AG ............................... 658 57
ENVIRONMENTAL SERVICES (0.37 %)
Rentokil Initial PLC ............................ 15,600 118
FINANCE (0.08 %)
Nichiei Co., Ltd. ............................... 330 26
FOOD & KINDRED PRODUCTS (0.24 %)
Gruma SA - Class B (a) .......................... 8,242 21
Nippon Meat Packers, Inc. ....................... 1,000 16
San Miguel Corporation - Class B ................ 20,200 39
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
FOOD STORES (5.64 %)
Carrefour SA .................................... 330 $ 249
Etablissements Economicques du
Casino Guichard-Perrachon SA ................. 4,185 436
Jeronimo Martins, SGPS, SA ...................... 2,015 110
Koninklijke Ahold NV ............................ 5,266 195
Laurus NV ....................................... 7,303 185
Nestle SA ....................................... 101 220
Safeway PLC ..................................... 34,600 174
Somerfield PLC .................................. 17,072 114
Tesco PLC ....................................... 38,025 108
Woolworths Limited .............................. 6,250 21
FURNITURE & HOME FURNISHINGS (D)
Industrie Natuzzi SpA -
Sponsored ADR ................................ 38 1
GAS PRODUCTION & DISTRIBUTION (0.35 %)
BG PLC .......................................... 13,755 87
Osaka Gas Co. ................................... 4,000 14
Tokyo Gas Co. ................................... 5,000 13
HOLDING & OTHER INVESTMENT OFFICES (2.18 %)
Barlow Limited .................................. 6,167 24
Desc SA de CV - Series B ........................ 19,383 16
Desc SA de CV - Sponsored ADR ................... 2,914 56
Grupo Carso SA de CV -
Sponsored ADR ................................ 11,808 80
Grupo Financiero Banamex Accival,
SA de CV - Class B (a) ....................... 44,423 58
Hutchison Whampoa Limited ....................... 17,000 120
Investor AB - Class B ........................... 552 25
Invik & Company AB - Class B .................... 446 36
Kinnevik AB - Class B ........................... 882 21
Montedison SpA .................................. 139,296 184
Sembcorp Industries Limited (a) ................. 12,000 14
Sun Hung Kai Properties Ltd. .................... 9,000 66
INDUSTRIAL MACHINERY & EQUIPMENT (1.27 %)
Siebe PLC ....................................... 103,238 407
INSTRUMENTS & RELATED PRODUCTS (0.15 %)
Fuji Photo Film ................................. 1,000 37
Olympus Optical Co., Ltd. ....................... 1,000 12
INSURANCE (4.17 %)
Assicurazioni Generali .......................... 4,756 199
CGU PLC ......................................... 4,835 76
Muenchener Rueckversicherungs-
Gesellschaft AG .............................. 470 228
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
74 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
INSURANCE (CONTINUED)
Muenchener Rueckversicherungs-
Gesellschaft AG - warrants .................. 19 $ 1
QBE Insurance Group Limited ..................... 4,250 18
Royal & Sun Alliance Insurance
Group PLC .................................... 25,665 209
Tokio Marine & Fire Insurance
Co. Ltd. ..................................... 1,000 12
Zurich Allied AG ............................... 807 598
INSURANCE AGENTS, BROKERS & SERVICE (3.88 %)
Axa ............................................. 6,893 1,000
Pohjola Group Insurance
Corporation - Class B ........................ 812 44
Sampo Insurance Company Ltd. -
Class A ...................................... 5,356 203
LIFE INSURANCE (0.63 %)
Prudential Corporation PLC ..................... 13,550 204
LUMBER & CONSTRUCTION MATERIALS (0.07 %)
Pioneer International Limited ................... 10,400 22
MACHINERY, EQUIPMENT & SUPPLIES (3.90 %)
Alstom (a) ...................................... 7,511 176
Komatsu Ltd. .................................... 2,000 11
Mannesmann AG ................................... 7,202 826
Schneider SA .................................... 3,967 241
MANUFACTURING INDUSTRIES (0.43 %)
FKI PLC ........................................ 49,254 110
Wesfarmers Limited .............................. 3,500 29
MEDICAL INSTRUMENTS & SUPPLIES (1.12 %)
Fresenius Medical Care AG ....................... 4,761 335
Terumo Corporation .............................. 1,000 24
METAL MINING (0.10 %)
North Limited ................................... 7,850 13
Rio Tinto Limited ............................... 1,700 20
MORTGAGE BANKERS AND BROKERS (0.26 %)
Newcourt Credit Group Inc. ..................... 2,429 85
MOTOR VEHICLES, PARTS & SUPPLIES (0.78 %)
Valeo SA ........................................ 3,181 251
OIL & GAS EXTRACTION (3.66 %)
Coflexip SA - Sponsored ADR ..................... 4,366 140
ENI SpA ........................................ 32,600 214
Repsol SA ...................................... 1,057 56
Saipem SpA ..................................... 33,391 141
Shell Transport & Trading
Company PLC .................................. 20,794 128
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
OIL & GAS EXTRACTION (CONTINUED)
Total SA - Class B .............................. 4,900 $ 497
PERSONAL CREDIT INSTITUTIONS (0.05 %)
Promise Company, Ltd. ........................... 300 16
PETROLEUM & PETROLEUM PRODUCTS (0.07 %)
Australian Gas Light Company
Limited ...................................... 3,200 23
PETROLEUM REFINING (1.15 %)
British Petroleum Company PLC ................... 5,000 75
Elf Aquitaine SA ................................ 2,559 296
PHARMACEUTICALS (5.72 %)
Banyu Pharmaceutical Co. Ltd. ................... 1,000 19
Fujisawa Pharmaceutical
Co., Ltd. .................................... 2,000 28
Glaxo Wellcome PLC .............................. 7,330 252
Novartis AG - Registered Shares ................. 278 547
Pharmacia & Upjohn, Inc. ........................ 3,829 217
Rhone-Poulenc SA - Class A ...................... 4,866 251
Roche Holding AG ................................ 17 208
Sankyo Company, Ltd. ............................ 1,000 22
Takeda Chemical Industries ...................... 1,000 39
Teva Pharmaceutical Industries
Ltd. - Sponsored ADR ......................... 3,271 133
Zeneca Group PLC ................................ 2,815 123
PRIMARY METAL INDUSTRIES (3.33 %)
Hoganas AB - Class B ............................ 13,565 222
Iscor Limited ................................... 29,860 5
Ispat International NV -
NY Registered Shares ......................... 2,458 19
Mitsui Mining &
Smelting Co., Ltd. ........................... 2,000 10
Nippon Steel Corporation ........................ 8,000 15
Pohang Iron & Steel
Company Ltd. ................................. 116 7
Pohang Iron & Steel Company
Ltd. - Sponsored ADR ......................... 1,678 28
Preussag AG ..................................... 1,687 763
PRINTING & PUBLISHING (2.15 %)
Singapore Press Holdings Ltd. ................... 2,000 22
Toppan Printing Co., Ltd. ....................... 1,000 12
Verenigde Nederlandse
Uitgeversbedrijven ........................... 12,649 477
Wolters Kluwer NV ............................... 845 181
RAILROADS (0.25 %)
Central Japan Railway Company ................... 2 11
East Japan Railway Co. .......................... 3 17
Railtrack Group PLC ............................. 1,946 51
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 75
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
REAL ESTATE (0.54 %)
British Land Company PLC ........................ 18,850 $ 140
City Developments Limited ....................... 4,000 17
Mitsui Fudosan Co., Ltd. ........................ 2,000 15
RESTAURANTS (0.10 %)
Compass Group PLC ............................... 2,770 32
RETAIL TRADE (0.91 %)
Great Universal Stores PLC ...................... 12,700 134
Marks & Spencer PLC ............................. 23,355 160
RUBBER & MISC. PLASTIC PRODUCTS (0.18 %)
Bridgestone Corp. ............................... 1,000 23
Compagnie Generale des
Etablissements Michelin -
Class B ...................................... 860 34
TELECOMMUNICATIONS (7.96 %)
British Telecommunications PLC .................. 13,827 208
Cable & Wireless
Communications PLC (a) ....................... 19,278 176
NetCom AB - Class B (a) ......................... 1,931 79
Nippon Telegraph &
Telephone Corp. .............................. 3 23
NTT Mobile Communication
Network, Inc. ................................ 1 41
SmarTone Telecommunications
Holdings Limited ............................. 21,000 58
Societe Europeenne de
Communication SA - Sponsored
ADR - Class A (a) ............................ 15 (c)
Societe Europeenne de
Communication SA - Sponsored
ADR - Class B (a) ............................ 135 2
Telecom Italia Mobile SpA ....................... 32,332 239
Telecom Italia Mobile SpA -
Class NC ..................................... 59,593 279
Telecom Italia SpA .............................. 23,290 198
Telecom Italia SpA - Class NC ................... 47,550 298
Telecomunicacoes Brasileiras SA -
Sponsored ADR (a) ............................ 1,157 84
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
Telefonaktiebolaget LM
Ericsson - Class B ........................... 7,280 $ 174
Telefonica SA ................................... 6,955 309
Telefonica SA rights ............................ 6,955 6
Telekomunikacja Polska SA -
GDR - 144A (a) (b) ........................... 16,567 84
Telstra Corporation Limited ..................... 9,000 42
Vodafone Group PLC .............................. 15,880 258
TEXTILE MILL PRODUCTS (0.03 %)
Kuraray Company Limited ......................... 1,000 11
TOBACCO PRODUCTS (0.14 %)
Japan Tobacco, Inc. ............................. 2 20
Rothmans Industries Limited ..................... 4,000 24
TRANSPORTATION & PUBLIC UTILITIES (1.62 %)
BAA PLC ......................................... 18,520 216
Brambles Industries, Ltd. ....................... 12,472 304
TRANSPORTATION EQUIPMENT (0.72 %)
Schindler Holding AG ............................ 145 233
WATER TRANSPORTATION (0.51 %)
IHC Caland NV ................................... 3,927 163
WHOLESALE TRADE DURABLE GOODS (0.04 %)
Mitsubishi Corporation .......................... 2,000 12
-------
Total Common Stocks
(cost: $ 27,262)............................................ 30,330
-------
Total Investment Securities
(cost: $ 27,295)............................................ $ 30,356
========
SUMMARY
Investments, at market value .................... 94.42 % $ 30,356
Other assets in
excess of liabilities .......................... 5.58 % 1,793
----- --------
Net assets ...................................... 100.00 % $ 32,149
====== ========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
76 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
INTERNATIONAL EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS, AT
MARKET VALUE.
MARKET
VALUE PERCENTAGE
----------- ----------
Australia ............................. $ 629 2.07 %
Austria ............................... 57 0.19 %
Brazil ................................ 1 (d)
Canada ................................ 85 0.28 %
Finland ............................... 1,359 4.48 %
France ................................ 4,652 15.32 %
Germany ............................... 3,826 12.60 %
Greece ................................ 89 0.29 %
Hong Kong ............................. 349 1.15 %
Italy ................................. 2,301 7.58 %
Japan ................................. 1,771 5.83 %
Republic of Korea ..................... 7 0.02 %
Mexico ................................ 96 0.32 %
Netherlands ........................... 2,256 7.43 %
Philippines ........................... 39 0.13 %
Portugal .............................. 276 0.91 %
Singapore ............................. 118 0.39 %
South Africa .......................... 29 0.10 %
Spain ................................. 1,215 4.00 %
Sweden ................................ 1,224 4.03 %
Switzerland ........................... 2,121 6.99 %
United Kingdom ........................ 6,170 20.33 %
United States ......................... 1,686 5.56 %
-------- ------
Investments, at market value ......... $ 30,356 100.00 %
======== ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) Securities are registered pursuant to Rule 144A and may be deemed to be
restricted for resale.
(c) Market Value is less than $ 1.
(d) Percentage is less than .01 %.
ADR American Depositary Receipt
GDR Global Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 77
<PAGE>
SCHEDULE OF INVESTMENTS
U.S. EQUITY PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
CONVERTIBLE PREFERRED STOCKS (0.68 %)
COMPUTER & DATA PROCESSING SERVICES (0.68 %)
Microsoft Corporation ........................... 7,747 $ 757
-----
Total Convertible Preferred Stocks
(cost: $ 730)............................................... 757
-----
COMMON STOCKS (93.77 %)
AEROSPACE (1.66 %)
Gulfstream Aerospace
Corporation (a) .............................. 2,550 136
Lockheed Martin Corporation ..................... 2,183 185
Textron Inc. .................................... 12,790 971
United Technologies Corporation ................. 5,062 550
AIR TRANSPORTATION (0.94 %)
Continental Airlines, Inc. -
Class B (a) .................................. 13,968 468
Delta Air Lines, Inc. ........................... 11,109 578
AMUSEMENT & RECREATION SERVICES (0.58 %)
The Walt Disney Company ......................... 21,435 643
AUTOMOTIVE (1.95 %)
AlliedSignal Inc. (b) ........................... 43,084 1,909
Ford Motor Company .............................. 4,250 249
BEVERAGES (1.82 %)
Anheuser-Busch Companies, Inc. (b)............... 12,094 794
Coca-Cola Company ............................... 580 39
PepsiCo, Inc. (b) ............................... 28,864 1,182
BUSINESS SERVICES (2.66 %)
Catalina Marketing
Corporation (a) .............................. 5,537 379
Equifax Inc. .................................... 30,448 1,041
Pittston Brink's Group .......................... 1,893 60
Reuters Group PLC -
Sponsored ADR ................................ 5,352 339
The Interpublic Group of
Companies, Inc. .............................. 14,084 1,123
CHEMICALS & ALLIED PRODUCTS (2.86 %)
Air Products and Chemicals, Inc. ................ 9,428 377
Airgas, Inc. (a) ................................ 5,951 53
Avon Products, Inc. ............................. 18,818 833
Colgate-Palmolive Company ....................... 1,236 115
E. I. du Pont de Nemours
and Company .................................. 10,433 554
Great Lakes Chemical Corporation ................ 5,158 206
Morton International, Inc. ...................... 6,434 158
The Procter & Gamble Company .................... 9,583 875
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
COMMERCIAL BANKS (3.35 %)
BankAmerica Corporation ......................... 10,201 $ 613
BankBoston Corporation .......................... 7,998 311
Crestar Financial Corporation ................... 7 1
First Union Corporation ......................... 5,796 352
National City Corporation ....................... 7,554 548
State Street Corporation ........................ 5,356 373
The Bank of New York
Company, Inc. ................................ 5,738 231
The Chase Manhattan Corporation ................. 8,945 609
U.S. Bancorp .................................... 10,896 387
Wells Fargo & Company ........................... 7,187 287
COMMUNICATION (1.57 %)
Comcast Corporation - Class A ................... 17,118 1,005
NTL Incorporated (a) ............................ 12,948 731
COMMUNICATIONS EQUIPMENT (0.55 %)
Northern Telecom Limited ........................ 12,172 610
COMPUTER & DATA PROCESSING SERVICES (3.52 %)
Automatic Data Processing, Inc. ................. 11,148 894
Computer Sciences Corporation (a)................ 6,086 392
First Data Corporation .......................... 41,789 1,324
Microsoft Corporation (a) ....................... 9,274 1,286
COMPUTER & OFFICE EQUIPMENT (8.06 %)
Cisco Systems, Inc. (a) ......................... 20,016 1,858
EMC Corporation (a) ............................. 13,910 1,182
Hewlett-Packard Company ......................... 9,100 622
International Business
Machines Corporation ......................... 12,403 2,291
Pitney Bowes Inc. ............................... 8,655 572
Sun Microsystems, Inc. (a) ...................... 12,944 1,108
Xerox Corporation ............................... 11,032 1,302
CONSTRUCTION (0.36 %)
Halliburton Company ............................. 13,562 402
DEPARTMENT STORES (1.98 %)
Federated Department
Stores, Inc. (a) ............................. 8,308 362
Sears, Roebuck and Co. .......................... 7,612 324
Wal-Mart Stores, Inc. ........................... 18,509 1,507
DRUG STORES & PROPRIETARY STORES (0.19 %)
CVS Corporation ................................. 2,318 127
Omnicare, Inc. .................................. 2,255 78
ELECTRIC SERVICES (2.02 %)
American Electric Power
Company, Inc. ................................ 8,713 410
Duke Energy Corporation ......................... 7,844 503
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
78 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
U.S. EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
ELECTRIC SERVICES (CONTINUED)
Edison International ............................ 10,877 $ 303
Florida Progress Corporation .................... 6,086 273
FPL Group, Inc. ................................. 4,347 268
Northern States Power Company ................... 6,530 181
Texas Utilities Company ......................... 6,530 305
ELECTRIC, GAS & SANITARY SERVICES (0.78 %)
CMS Energy Corporation .......................... 11,206 543
New Century Energies, Inc. ...................... 6,530 318
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (0.86 %)
Harman International Industries,
Incorporated ................................. 2,960 113
Hubbell Incorporated - Class B .................. 22,158 842
ELECTRONIC COMPONENTS & ACCESSORIES (1.90 %)
Analog Devices, Inc. (a) ........................ 16,094 505
Intel Corporation ............................... 10,471 1,241
Molex Incorporated - Class A .................... 11,179 356
ENVIRONMENTAL SERVICES (0.88 %)
Waste Management, Inc. .......................... 21,024 980
FABRICATED METAL PRODUCTS (0.38 %)
Masco Corporation ............................... 8,713 250
The Gillette Company ............................ 2,183 105
The Stanley Works ............................... 2,454 68
FINANCE (1.93 %)
Fannie Mae ...................................... 28,864 2,136
FOOD & KINDRED PRODUCTS (2.42 %)
Bestfoods ....................................... 5,216 278
ConAgra, Inc. ................................... 6,530 206
General Mills, Inc. ............................. 3,922 305
Philip Morris Companies Inc. .................... 23,416 1,253
Ralston Purina Company .......................... 19,629 635
FOOD STORES (0.17 %)
Nestle SA ....................................... 85 185
HEALTH SERVICES (0.46 %)
Lincare Holdings Inc. (a) ....................... 5,978 242
Tenet Healthcare Corporation (a) ................ 10,008 263
HOLDING & OTHER INVESTMENT OFFICES (0.18 %)
Tele-Communications TCI Ventures
Group - Class A (a) .......................... 8,232 194
INDUSTRIAL MACHINERY & EQUIPMENT (1.81 %)
Applied Materials, Inc. (a) ..................... 6,859 293
Baker Hughes Incorporated ....................... 7,651 135
Deere & Company ................................. 6,859 227
Dover Corporation ............................... 37,017 1,356
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
INSTRUMENTS & RELATED PRODUCTS (0.72 %)
Emerson Electric Co. ............................ 12,809 $ 801
INSURANCE (5.48 %)
American International
Group, Inc. .................................. 9,138 883
Berkshire Hathaway Inc. -
Class B (a) .................................. 532 1,251
Citigroup Inc. .................................. 61,805 3,060
Loews Corporation ............................... 6,472 636
The St. Paul Companies, Inc. .................... 5,004 174
Unum Corporation ................................ 1,256 73
INSURANCE AGENTS, BROKERS & SERVICE (0.76 %)
Axa ............................................. 704 102
Marsh & McLennan
Companies, Inc. .............................. 5,178 303
The Hartford Financial Services
Group, Inc. .................................. 7,921 435
LIFE INSURANCE (1.23 %)
Lincoln National Corporation .................... 5,216 427
Provident Companies, Inc. ....................... 9,795 406
ReliaStar Financial Corp. ....................... 11,553 533
LUMBER & OTHER BUILDING MATERIALS (1.94 %)
Lowe's Companies, Inc. .......................... 20,962 1,073
The Home Depot, Inc. ............................ 17,562 1,075
LUMBER & WOOD PRODUCTS (0.16 %)
Rayonier Inc. ................................... 3,922 180
MACHINERY, EQUIPMENT & SUPPLIES (0.06 %)
Mannesmann AG ................................... 528 61
MEDICAL INSTRUMENTS & SUPPLIES (0.36 %)
DENTSPLY International Inc. ..................... 5,226 135
Sybron International
Corporation (a) .............................. 9,770 266
METAL MINING (0.41 %)
Barrick Gold Corporation ........................ 10,220 199
Newmont Mining Corporation ...................... 14,335 259
MINING (0.63 %)
Martin Marietta Materials, Inc. ................. 11,186 696
MORTGAGE BANKERS AND BROKERS (0.08 %)
Countrywide Credit
Industries, Inc. ............................. 1,758 88
MOTION PICTURES (0.51 %)
Liberty Media Group -
Class A (a) .................................. 7,363 339
Time Warner Inc. ................................ 3,632 225
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 79
<PAGE>
SCHEDULE OF INVESTMENTS
U.S. EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
OIL & GAS EXTRACTION (2.15 %)
Anadarko Petroleum Corporation .................. 4,888 $ 151
Burlington Resources Inc. ....................... 13,118 470
Nabors Industries, Inc. (a) ..................... 4,502 61
RWE AG .......................................... 528 29
Schlumberger Limited ............................ 15,920 734
Total SA - Sponsored ADR ........................ 3,265 162
Unocal Corporation .............................. 17,929 523
USX-Marathon Group .............................. 8,192 247
PAPER & ALLIED PRODUCTS (0.29 %)
Kimberly-Clark Corporation ...................... 5,951 324
PERSONAL CREDIT INSTITUTIONS (1.54 %)
American Express Company (b) .................... 11,322 1,158
Associates First Capital
Corporation - Class A ........................ 13,060 553
PETROLEUM REFINING (3.83 %)
British Petroleum Company
PLC - Sponsored ADR .......................... 5,757 547
Chevron Corporation ............................. 3,053 253
Exxon Corporation ............................... 17,601 1,287
Mobil Corporation ............................... 11,882 1,035
Royal Dutch Petroleum Company -
NY Registered Shares ......................... 17,678 846
Texaco Inc. ..................................... 5,216 276
PHARMACEUTICALS (13.78 %)
Abbott Laboratories ............................. 27,801 1,362
Allergan, Inc. .................................. 12,210 791
American Home Products
Corporation .................................. 12,056 679
Amgen Inc. (a) .................................. 3,265 341
Bristol-Myers Squibb Company .................... 20,151 2,696
Cardinal Health, Inc. ........................... 22,875 1,736
Eli Lilly and Company ........................... 1,159 103
Johnson & Johnson ............................... 17,020 1,428
Merck & Co., Inc. ............................... 18,837 2,783
Pfizer Inc. ..................................... 9,351 1,173
Pharmacia & Upjohn, Inc. ........................ 9,795 555
Schering-Plough Corporation ..................... 12,616 697
Shire Pharmaceuticals Group
PLC - ADR (a) ................................ 2,085 42
Watson Pharmaceuticals, Inc. (a) ................ 14,084 886
PRINTING & PUBLISHING (1.21 %)
Gannett Co., Inc. ............................... 14,857 983
Knight-Ridder, Inc. ............................. 6,975 357
RAILROADS (0.85 %)
Burlington Northern
Santa Fe Corporation ......................... 21,754 734
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
RAILROADS (CONTINUED)
Canadian Pacific Limited ........................ 10,819 $ 204
RESTAURANTS (0.60 %)
McDonald's Corporation .......................... 8,636 662
RETAIL TRADE (0.11 %)
Henry Schein, Inc. (a) .......................... 2,616 117
SECURITY & COMMODITY BROKERS (0.92 %)
Morgan Stanley Dean
Witter and Co. ............................... 14,393 1,022
TELECOMMUNICATIONS (7.36 %)
AirTouch
Communications, Inc. (a) (b) ................. 19,803 1,428
AT&T Corp. (b) .................................. 6,975 525
Bell Atlantic Corporation (b) ................... 13,930 791
BellSouth Corporation ........................... 4,134 206
Frontier Corporation ............................ 5,448 185
GTE Corporation ................................. 14,876 1,003
MCI WORLDCOM, Inc. (a) .......................... 10,356 743
Qwest Communications
International Inc. (a) ....................... 3,091 155
SBC Communications Inc. ......................... 29,985 1,608
Sprint Corporation .............................. 2,821 237
Tele-Communications, Inc. -
Class A (a) .................................. 14,567 806
U S WEST, Inc. .................................. 7,187 464
TEXTILE MILL PRODUCTS (0.91 %)
Sara Lee Corporation ............................ 35,781 1,009
VARIETY STORES (1.75 %)
Costco Companies, Inc. (a) ...................... 6,144 444
Dayton Hudson Corporation ....................... 27,589 1,497
WATER TRANSPORTATION (0.29 %)
Carnival Corporation ............................ 6,781 325
--------
Total Common Stocks
(cost: $ 91,815)............................................ 103,891
--------
Total Investment Securities
(cost: $ 92,545)............................................ $ 104,648
=========
SUMMARY
Investments, at market value .................... 94.45 % $ 104,648
Other assets in
excess of liabilities ........................ 5.55 % 6,155
------ ---------
Net assets ...................................... 100.00 % $ 110,803
====== =========
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
80 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
U.S. EQUITY PORTFOLIO (CONTINUED)
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS,
AT MARKET VALUE.
MARKET
VALUE PERCENTAGE
------------ ------------
France ................................ $ 102 0.10 %
Germany ............................... 89 0.09 %
Switzerland ........................... 185 0.17 %
United States ......................... 104,272 99.64 %
--------- -----
Investments, at market value ......... $ 104,648 100.00 %
========= ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No dividends were paid during the preceding twelve months.
(b) As of December 31, 1998, a portion or all of the security has been
segregated with the custodian to cover margin requirements for open
futures contracts. The market value of all securities segregated at
December 31, 1998 is $ 1,594. See footnote 5 to the financial
statements.
ADR American Depositary Receipt
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 81
<PAGE>
SCHEDULE OF INVESTMENTS
THIRD AVENUE VALUE PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (85.48 %)
COMMUNICATIONS EQUIPMENT (1.04 %)
Glenayre Technologies, Inc. (a) ................. 42,500 $ 189
COMPUTER & DATA PROCESSING SERVICES (4.04 %)
NCR Corporation (a) ............................. 17,600 735
COMPUTER & OFFICE EQUIPMENT (8.77 %)
3Com Corporation (a) ............................ 29,800 1,334
Electronics for Imaging, Inc. (a) ............... 6,500 261
ELECTRONIC & OTHER ELECTRIC EQUIPMENT (1.25 %)
Electro Scientific Industries,
Inc. (a) ..................................... 5,000 227
ELECTRONIC COMPONENTS & ACCESSORIES (4.61 %)
AVX Corporation ................................. 30,000 508
Planar Systems, Inc. (a) ........................ 48,800 332
HOLDING & OTHER INVESTMENT OFFICES (2.70 %)
Imperial Credit Commercial
Mortgage Investment Corp. .................... 25,000 234
Koger Equity, Inc. .............................. 15,000 258
INDUSTRIAL MACHINERY & EQUIPMENT (24.39 %)
Electroglas, Inc. (a) ........................... 64,500 758
FSI International, Inc. (a) ..................... 79,900 829
Silicon Valley Group, Inc. (a) .................. 51,100 652
SpeedFam International, Inc. (a) ................ 45,300 776
Tecumseh Products Company -
Class A ...................................... 7,200 336
Tecumseh Products Company -
Class B ...................................... 6,900 312
Toyoda Automatic Loom
Works, Ltd. .................................. 44,000 780
INSURANCE (22.44 %)
Chiyoda Fire & Marine Insurance
Company, Limited ............................. 165,000 555
Enhance Financial Services
Group Inc. ................................... 17,000 510
Financial Security Assurance
Holdings Ltd. ................................ 15,000 814
Leucadia National Corporation (a)................ 17,900 564
MBIA Inc. ....................................... 3,000 197
Mitsui Marine and Fire Insurance
Company, Ltd. ................................ 152,000 802
Risk Capital Holdings, Inc. (a) ................. 29,600 644
MANAGEMENT SERVICES (1.14 %)
American Physicians Service
Group, Inc. (a) .............................. 46,000 207
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
MEDICAL INSTRUMENTS & SUPPLIES (4.30 %)
Hologic, Inc. (a) ............................... 33,000 $ 400
Protocol Systems, Inc. (a) ...................... 53,700 383
OIL & GAS EXTRACTION (3.28 %)
Nabors Industries, Inc. (a) ..................... 44,000 597
REAL ESTATE (0.31 %)
Avatar Holdings Inc. (a) ........................ 3,500 56
TELECOMMUNICATIONS (3.19 %)
Boston Communications
Group, Inc. (a) .............................. 44,600 580
WATER TRANSPORTATION (4.02 %)
Alexander & Baldwin, Inc. ....................... 31,500 732
------
Total Common Stocks
(cost: $ 16,999)........................................... 15,562
------
NUMBER OF MARKET
CONTRACTS VALUE
---------- -------
PURCHASED OPTIONS (0.15 %)
Japanese Yen Put
expires 10/7/1999 .............................. 1 $ 27
--------
Total Purchased Options
(cost: $ 46)................................................. 27
--------
Total Investment Securities
(cost: $ 17,045)............................................. $ 15,589
========
SUMMARY
Investments, at market value .................... 85.63 % $ 15,589
Other assets in
excess of liabilities ........................ 14.37 % 2,617
----- --------
Net assets ...................................... 100.00 % $ 18,206
====== ========
INVESTMENTS BY COUNTRY:
SIZE OF INVESTMENT IS INDICATED AS A PERCENTAGE OF PORTFOLIO INVESTMENTS, AT
MARKET VALUE.
MARKET
VALUE PERCENTAGE
---------- ----------
Japan ................................. $ 2,137 13.71 %
United States ......................... 13,452 86.29 %
------- -----
Investments, at market value ......... $15,589 100.00 %
======= ======
NOTES TO SCHEDULE OF INVESTMENTS:
(a) No 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.
82 WRL SERIES FUND, INC.
<PAGE>
SCHEDULE OF INVESTMENTS
REAL ESTATE SECURITIES PORTFOLIO
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT SHARE AMOUNTS) IN THOUSANDS
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (95.73 %)
HOLDING & OTHER INVESTMENT OFFICES (84.01 %)
APARTMENTS (17.98 %)
Apartment Investment and
Management Company - Class A.................. 3,100 $ 115
Archstone Communities Trust ..................... 3,400 69
AvalonBay Communities, Inc. ..................... 600 21
Camden Property Trust ........................... 300 8
Equity Residential Properties Trust.............. 4,043 164
Post Properties, Inc. ........................... 1,000 38
Summit Properties Inc. .......................... 1,100 19
DIVERSIFIED (11.35 %)
Liberty Property Trust .......................... 2,900 71
National Golf Properties, Inc. .................. 4,000 116
Spieker Properties, Inc. ........................ 2,500 87
HOTELS (5.63 %)
FelCor Lodging Trust
Incorporated ................................. 2,000 46
MeriStar Hospitality Corporation ................ 600 11
Starwood Hotels & Resorts ....................... 3,500 79
MANUFACTURED HOMES (1.37%)
Manufactured Home
Communities, Inc. ............................ 1,300 33
OFFICE PROPERTY (16.98 %)
CarrAmerica Realty Corporation .................. 1,000 24
Cousins Properties Incorporated ................. 3,100 100
Crescent Real Estate Equities
Company ...................................... 2,200 51
Equity Office Properties Trust .................. 9,100 219
TriNet Corporate Realty
Trust, Inc. .................................. 600 16
REGIONAL MALL (11.43 %)
CBL & Associates
Properties, Inc. ............................. 1,000 26
Simon Property Group, Inc. ...................... 5,700 162
The Macerich Company ............................ 2,200 56
The Mills Corporation ........................... 1,600 32
SHOPPING CENTER (11.81 %)
Burnham Pacific
Properties, Inc. ............................. 5,900 71
Developers Diversified Realty
Corporation .................................. 1,900 34
NUMBER OF MARKET
SHARES VALUE
--------- -------
COMMON STOCKS (CONTINUED)
SHOPPING CENTER (CONTINUED)
Federal Realty Investment Trust ................. 1,900 $ 45
IRT Property Company ............................ 4,000 40
JP Realty, Inc. ................................. 500 10
Regency Realty Corporation ...................... 500 11
Vornado Realty Trust ............................ 2,200 74
STORAGE (4.02 %)
Public Storage, Inc. ............................ 3,600 97
WAREHOUSE (3.44 %)
CenterPoint Properties
Corporation .................................. 300 10
Weeks Corporation ............................... 2,600 73
REAL ESTATE (11.72 %)
APARTMENTS (0.79 %)
Charles E. Smith Residential
Realty, Inc. ................................. 600 19
DIVERSIFIED (1.70 %)
Glenborough Realty Trust
Incorporated ................................. 2,000 41
HOTELS (0.83 %)
Patriot American Hospitality, Inc. .............. 3,400 20
OFFICE PROPERTY (8.40 %)
Arden Realty, Inc. .............................. 6,000 139
Cornerstone Properties Inc. ..................... 4,100 64
-------
Total Common Stocks
(cost: $ 2,388)........................................... 2,311
-------
Total Investment Securities
(cost: $ 2,388)........................................... $ 2,311
=======
SUMMARY
Investments, at market value .................... 95.73 % $ 2,311
Other assets in
excess of liabilities ........................ 4.27 % 103
------ -------
Net assets ...................................... 100.00 % $ 2,414
====== =======
See notes to schedule of investments.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 83
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT PER SHARE AMOUNTS) IN THOUSANDS
<TABLE>
<CAPTION>
MONEY MARKET BOND
PORTFOLIO PORTFOLIO
<S> <C> <C>
ASSETS:
Investments in securities, at cost ......................... $ 168,507 $ 160,238
========= =========
Foreign cash, at cost ...................................... $ 0 $ 0
========= =========
Investments in securities, at market value ................. $ 168,507 $ 165,578
Cash ....................................................... 48 2,968
Foreign cash ............................................... 0 0
Cash collateral for securities on loan ..................... 0 22,960
Receivables:
Securities sold ........................................... 0 0
Interest .................................................. 1,269 2,270
Dividends ................................................. 0 0
Dividend reclaims receivable .............................. 0 0
Foreign currency contracts ................................ 0 0
Other ..................................................... 0 75
--------- ---------
Total assets ............................................. 169,824 193,851
--------- ---------
LIABILITIES:
Securities purchased ....................................... 0 0
Accounts payable and accrued liabilities:
Investment advisory fees .................................. 59 64
Due to custodian .......................................... 0 0
Dividends to shareholders ................................. 25 0
Deposits for securities on loan ........................... 0 22,960
Foreign currency contracts ................................ 0 0
Other fees ................................................ 9 83
--------- ---------
Total liabilities ........................................ 93 23,107
--------- ---------
Net assets .............................................. $ 169,731 $ 170,744
========= =========
NET ASSETS CONSISTS OF:
Capital stock shares authorized ............................ 450,000 25,000
========= =========
Capital stock ($ .01 par value)............................. $ 1,697 $ 147
Additional paid-in-capital ................................. 168,034 169,408
Accumulated undistributed (distributions in
excess of) net investment income (loss) ................... 0 175
Accumulated undistributed net realized gain (loss) on
investment securities, futures contracts and
foreign currency transactions ............................. 0 (4,326)
Net unrealized appreciation (depreciation) on:
Investment securities ..................................... 0 5,340
Foreign currency transactions ............................. 0 0
Futures contracts ......................................... 0 0
--------- ---------
Net assets applicable to outstanding shares of capital ..... $ 169,731 $ 170,744
========= =========
Shares outstanding ......................................... 169,731 14,727
========= =========
Net asset value and offering price per share ............... $ 1.00 $ 11.59
========= =========
<CAPTION>
STRATEGIC
TOTAL
GROWTH GLOBAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C>
ASSETS:
Investments in securities, at cost ......................... $ 1,490,981 $ 760,078 $ 494,435
=========== =========== =========
Foreign cash, at cost ...................................... $ 0 $ 0 $ 0
=========== =========== =========
Investments in securities, at market value ................. $ 3,021,883 $ 1,072,738 $ 605,388
Cash ....................................................... 109 84 0
Foreign cash ............................................... 0 0 0
Cash collateral for securities on loan ..................... 164,506 74,406 30,328
Receivables:
Securities sold ........................................... 68,931 965 0
Interest .................................................. 24 10 3,240
Dividends ................................................. 699 405 464
Dividend reclaims receivable .............................. 15 638 2
Foreign currency contracts ................................ 14 1,338 0
Other ..................................................... 685 350 151
----------- ----------- ---------
Total assets ............................................. 3,256,866 1,150,934 639,573
----------- ----------- ---------
LIABILITIES:
Securities purchased ....................................... 3,592 2,233 16,319
Accounts payable and accrued liabilities:
Investment advisory fees .................................. 1,856 689 389
Due to custodian .......................................... 0 59 53
Dividends to shareholders ................................. 0 0 0
Deposits for securities on loan ........................... 164,506 74,406 30,328
Foreign currency contracts ................................ 152 3,355 0
Other fees ................................................ 703 427 172
----------- ----------- ---------
Total liabilities ........................................ 170,809 81,169 47,261
----------- ----------- ---------
Net assets .............................................. $ 3,086,057 $ 1,069,765 $ 592,312
=========== =========== =========
NET ASSETS CONSISTS OF:
Capital stock shares authorized ............................ 125,000 100,000 100,000
=========== =========== =========
Capital stock ($ .01 par value)............................. $ 515 $ 451 $ 361
Additional paid-in-capital ................................. 1,440,783 745,252 464,663
Accumulated undistributed (distributions in
excess of) net investment income (loss) ................... 1,083 (1,472) 1,633
Accumulated undistributed net realized gain (loss) on
investment securities, futures contracts and
foreign currency transactions ............................. 112,912 14,867 14,702
Net unrealized appreciation (depreciation) on:
Investment securities ..................................... 1,530,902 312,660 110,953
Foreign currency transactions ............................. (138) (1,993) 0
Futures contracts ......................................... 0 0 0
----------- ----------- ---------
Net assets applicable to outstanding shares of capital ..... $ 3,086,057 $ 1,069,765 $ 592,312
=========== =========== =========
Shares outstanding ......................................... 51,486 45,121 36,106
=========== =========== =========
Net asset value and offering price per share ............... $ 59.94 $ 23.71 $ 16.40
=========== =========== =========
</TABLE>
The notes to the financial statements are an integral part of this report.
84 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT PER SHARE AMOUNTS) IN THOUSANDS
<TABLE>
<CAPTION>
EMERGING AGGRESSIVE GROWTH & TACTICAL ASSET
GROWTH GROWTH BALANCED INCOME ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost ......................... $ 527,329 $ 389,436 $ 81,102 $ 85,200 $ 339,745
========= ========= ======== ======== =========
Foreign cash, at cost ...................................... $ 0 $ 0 $ 0 $ 0 $ 0
========= ========= ======== ======== =========
Investments in securities, at market value ................. $ 858,383 $ 574,429 $ 94,570 $ 87,606 $ 362,708
Cash ....................................................... 181 27 1,413 48 832
Foreign cash ............................................... 0 0 0 0 0
Cash collateral for securities on loan ..................... 114,305 52,755 19,808 11,150 48,474
Receivables:
Securities sold ........................................... 1,745 0 1,573 753 0
Interest .................................................. 16 10 467 87 1,924
Dividends ................................................. 109 69 119 416 532
Dividend reclaims receivable .............................. 2 2 1 0 0
Foreign currency contracts ................................ 0 0 0 0 0
Other ..................................................... 456 512 96 72 178
--------- --------- -------- -------- ---------
Total assets ............................................. 975,197 627,804 118,047 100,132 414,648
--------- --------- -------- -------- ---------
LIABILITIES:
Securities purchased ....................................... 6,448 0 3,078 1,233 0
Accounts payable and accrued liabilities:
Investment advisory fees .................................. 522 360 63 54 243
Due to custodian .......................................... 0 0 0 0 0
Dividends to shareholders ................................. 0 0 0 0 0
Deposits for securities on loan ........................... 114,305 52,755 19,808 11,150 48,474
Foreign currency contracts ................................ 0 0 0 0 0
Other fees ................................................ 482 525 98 79 193
--------- --------- -------- -------- ---------
Total liabilities ........................................ 121,757 53,640 23,047 12,516 48,910
--------- --------- -------- -------- ---------
Net assets .............................................. $ 853,440 $ 574,164 $ 95,000 $ 87,616 $ 365,738
========= ========= ======== ======== =========
NET ASSETS CONSISTS OF:
Capital stock shares authorized ............................ 100,000 75,000 75,000 75,000 75,000
========= ========= ======== ======== =========
Capital stock ($ .01 par value)............................. $ 317 $ 256 $ 76 $ 71 $ 274
Additional paid-in-capital ................................. 501,020 367,750 83,914 82,977 339,359
Accumulated undistributed (distributions in
excess of) net investment income (loss) ................... 0 9,035 316 1,628 1,336
Accumulated undistributed net realized gain (loss) on
investment securities, futures contracts and
foreign currency transactions ............................. 21,049 12,130 (2,774) 534 1,806
Net unrealized appreciation (depreciation) on:
Investment securities ..................................... 331,054 184,993 13,468 2,406 22,963
Foreign currency transactions ............................. 0 0 0 0 0
Futures contracts ......................................... 0 0 0 0 0
--------- --------- -------- -------- ---------
Net assets applicable to outstanding shares of capital ..... $ 853,440 $ 574,164 $ 95,000 $ 87,616 $ 365,738
========= ========= ======== ======== =========
Shares outstanding ......................................... 31,698 25,588 7,574 7,135 27,393
========= ========= ======== ======== =========
Net asset value and offering price per share ............... $ 26.92 $ 22.44 $ 12.54 $ 12.28 $ 13.35
========= ========= ======== ======== =========
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 85
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT PER SHARE AMOUNTS) IN THOUSANDS
<TABLE>
<CAPTION>
C.A.S.E. GLOBAL VALUE INTERNATIONAL
GROWTH SECTOR EQUITY EQUITY U.S. EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, at cost ......................... $ 77,157 $ 10,742 $ 156,170 $ 27,295 $ 92,545
======== ======== ========= ======== =========
Foreign cash, at cost ...................................... $ 0 $ 0 $ 0 $ 3 $ 0
======== ======== ========= ======== =========
Investments in securities, at market value ................. $ 70,240 $ 11,451 $ 157,014 $ 30,356 $ 104,648
Cash ....................................................... 0 118 50 1,741 6,119
Foreign cash ............................................... 0 0 0 7 0
Cash collateral for securities on loan ..................... 6,227 0 4,943 0 0
Receivables:
Securities sold ........................................... 0 0 0 6 81
Interest .................................................. 18 41 1 4 47
Dividends ................................................. 44 6 208 17 87
Dividend reclaims receivable .............................. 0 1 0 32 1
Foreign currency contracts ................................ 0 0 0 1 0
Other ..................................................... 35 0 88 25 12
-------- -------- --------- -------- ---------
Total assets ............................................. 76,564 11,617 162,304 32,189 110,995
-------- -------- --------- -------- ---------
LIABILITIES:
Securities purchased ....................................... 621 0 0 0 93
Accounts payable and accrued liabilities:
Investment advisory fees .................................. 46 8 109 27 71
Due to custodian .......................................... 235 0 0 0 0
Dividends to shareholders ................................. 0 0 0 0 0
Deposits for securities on loan ........................... 6,227 0 4,943 0 0
Foreign currency contracts ................................ 0 0 0 0 0
Other fees ................................................ 34 5 95 13 28
-------- -------- --------- -------- ---------
Total liabilities ........................................ 7,163 13 5,147 40 192
-------- -------- --------- -------- ---------
Net assets .............................................. $ 69,401 $ 11,604 $ 157,157 $ 32,149 $ 110,803
======== ======== ========= ======== =========
NET ASSETS CONSISTS OF:
Capital stock shares authorized ............................ 75,000 75,000 75,000 75,000 75,000
======== ======== ========= ======== =========
Capital stock ($ .01 par value)............................. $ 53 $ 11 $ 130 $ 27 $ 77
Additional paid-in-capital ................................. 73,173 10,926 160,905 29,941 96,997
Accumulated undistributed (distributions in
excess of) net investment income (loss) ................... 3,954 92 607 42 1,275
Accumulated undistributed net realized gain (loss) on
investment securities, futures contracts and
foreign currency transactions ............................. (862) (134) (5,329) (943) 199
Net unrealized appreciation (depreciation) on:
Investment securities ..................................... (6,917) 709 844 3,061 12,103
Foreign currency transactions ............................. 0 0 0 4 0
Futures contracts ......................................... 0 0 0 17 152
-------- -------- --------- -------- ---------
Net assets applicable to outstanding shares of capital ..... $ 69,401 $ 11,604 $ 157,157 $ 32,149 $ 110,803
======== ======== ========= ======== =========
Shares outstanding ......................................... 5,342 1,049 12,972 2,664 7,684
======== ======== ========= ======== =========
Net asset value and offering price per share ............... $ 12.99 $ 11.06 $ 12.12 $ 12.07 $ 14.42
======== ======== ========= ======== =========
</TABLE>
The notes to the financial statements are an integral part of this report.
86 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
AT DECEMBER 31, 1998
ALL AMOUNTS (EXCEPT PER SHARE AMOUNTS) IN THOUSANDS
<TABLE>
<CAPTION>
THIRD AVENUE REAL ESTATE
VALUE SECURITIES
PORTFOLIO PORTFOLIO
<S> <C> <C>
ASSETS:
Investments in securities, at cost ......................... $ 17,045 $ 2,388
======== =======
Foreign cash, at cost ...................................... $ 0 $ 0
======== =======
Investments in securities, at market value ................. $ 15,589 $ 2,311
Cash ....................................................... 2,237 83
Foreign cash ............................................... 0 0
Cash collateral for securities on loan ..................... 0 0
Receivables:
Securities sold ........................................... 406 0
Interest .................................................. 9 1
Dividends ................................................. 13 22
Dividend reclaims receivable .............................. 0 0
Foreign currency contracts ................................ 0 0
Other ..................................................... 0 0
-------- -------
Total assets ............................................. 18,254 2,417
-------- -------
LIABILITIES:
Securities purchased ....................................... 33 0
Accounts payable and accrued liabilities: ..................
Investment advisory fees .................................. 12 2
Due to custodian .......................................... 0 0
Dividends to shareholders ................................. 0 0
Deposits for securities on loan ........................... 0 0
Foreign currency contracts ................................ 0 0
Other fees ................................................ 3 1
-------- -------
Total liabilities ........................................ 48 3
-------- -------
Net assets .............................................. $ 18,206 $ 2,414
======== =======
NET ASSETS CONSISTS OF:
Capital stock shares authorized ............................ 75,000 75,000
======== =======
Capital stock ($ .01 par value)............................. $ 20 $ 3
Additional paid-in-capital ................................. 19,314 2,688
Accumulated undistributed (distributions in
excess of) net investment income (loss) ................... 328 72
Accumulated undistributed net realized gain (loss) on
investment securities, futures contracts and
foreign currency transactions ............................. 0 (272)
Net unrealized appreciation (depreciation) on:
Investment securities ..................................... (1,456) (77)
Foreign currency transactions ............................. 0 0
Futures contracts ......................................... 0 0
-------- -------
Net assets applicable to outstanding shares of capital ..... $ 18,206 $ 2,414
======== =======
Shares outstanding ......................................... 1,960 284
======== =======
Net asset value and offering price per share ............... $ 9.29 $ 8.51
======== =======
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 87
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
STRATEGIC
TOTAL
MONEY MARKET BOND GROWTH GLOBAL RETURN
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $ 9,034 $ 8,967 $ 11,344 $ 2,454 $ 11,716
Dividends .............................................. 0 0 14,091 9,860 6,746
Foreign tax withheld ................................... 0 0 (355) (1,213) (13)
------- -------- ----------- --------- --------
Total investment income .............................. 9,034 8,967 25,080 11,101 18,449
------- -------- ----------- --------- --------
EXPENSES:
Investment advisory fees ............................... 645 664 18,112 7,538 4,485
Printing and shareholder reports ....................... 15 40 338 232 111
Custody fees ........................................... 41 33 341 878 88
Administrative service fees ............................ 6 17 144 99 47
Legal fees ............................................. 2 5 46 32 15
Auditing and accounting fees ........................... 7 8 24 18 11
Directors fees ......................................... 2 1 7 5 2
Registration fees ...................................... 0 0 2 1 0
Other fees ............................................. 9 24 207 143 68
------- -------- ----------- --------- --------
Total expenses ....................................... 727 792 19,221 8,946 4,827
Less:
Advisory fee waiver and expense reimbursement ......... 0 0 0 0 0
Fees paid indirectly .................................. 0 0 0 0 0
------- -------- ----------- --------- --------
Net expenses ......................................... 727 792 19,221 8,946 4,827
------- -------- ----------- --------- --------
Net investment income (loss) ........................... 8,307 8,175 5,859 2,155 13,622
------- -------- ----------- --------- --------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investment securities ................................. 0 1,952 113,017 58,178 25,081
Futures contracts ..................................... 0 0 0 0 0
Foreign currency transactions ......................... 0 0 (3,397) (17,191) 0
------- -------- ----------- --------- --------
Total net realized gain (loss) ....................... 0 1,952 109,620 40,987 25,081
------- -------- ----------- --------- --------
Change in unrealized appreciation (depreciation) on:
Investment securities ................................. 0 2,580 1,066,507 193,907 12,649
Futures contracts ..................................... 0 0 0 0 0
Foreign currency transactions ......................... 0 0 1,401 (387) 0
------- -------- ----------- --------- --------
Total change in unrealized appreciation
(depreciation) ..................................... 0 2,580 1,067,908 193,520 12,649
------- -------- ----------- --------- --------
Net gain (loss) on investment securities, futures
contracts and foreign currency transactions .......... 0 4,532 1,177,528 234,507 37,730
------- -------- ----------- --------- --------
Net increase (decrease) in net assets resulting
from operations .................................... $ 8,307 $ 12,707 $ 1,183,387 $ 236,662 $ 51,352
======= ======== =========== ========= ========
</TABLE>
The notes to the financial statements are an integral part of this report.
88 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
EMERGING AGGRESSIVE GROWTH & TACTICAL ASSET
GROWTH GROWTH BALANCED INCOME ALLOCATION
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $ 2,314 $ 1,086 $ 1,771 $ 1,040 $ 8,978
Dividends .............................................. 1,283 1,858 1,459 2,980 3,850
Foreign tax withheld ................................... (3) (14) (7) (4) (14)
---------- --------- --------- --------- --------
Total investment income .............................. 3,594 2,930 3,223 4,016 12,814
--------- --------- -------- -------- --------
EXPENSES:
Investment advisory fees ............................... 5,408 3,362 681 578 2,711
Printing and shareholder reports ....................... 224 172 25 28 60
Custody fees ........................................... 130 67 28 27 67
Administrative service fees ............................ 96 73 11 12 26
Legal fees ............................................. 31 24 3 4 8
Auditing and accounting fees ........................... 11 8 7 7 8
Directors fees ......................................... 4 3 1 1 1
Registration fees ...................................... 1 1 0 0 0
Other fees ............................................. 138 106 16 29 38
--------- --------- -------- -------- --------
Total expenses ....................................... 6,043 3,816 772 686 2,919
Less:
Advisory fee waiver and expense reimbursement ......... 0 0 0 0 0
Fees paid indirectly .................................. 0 1 0 0 0
--------- --------- -------- -------- --------
Net expenses ......................................... 6,043 3,815 772 686 2,919
--------- --------- -------- -------- --------
Net investment income (loss) ........................... (2,449) (885) 2,451 3,330 9,895
--------- --------- -------- -------- --------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investment securities ................................. 48,782 44,175 (2,695) 1,377 19,941
Futures contracts ..................................... 0 0 0 0 0
Foreign currency transactions ......................... 0 0 0 0 0
--------- --------- -------- -------- --------
Total net realized gain (loss) ....................... 48,782 44,175 (2,695) 1,377 19,941
--------- --------- -------- -------- --------
Change in unrealized appreciation (depreciation) on:
Investment securities ................................. 178,298 131,450 6,041 (2,082) (3,713)
Futures contracts ..................................... 0 0 0 0 0
Foreign currency transactions ......................... 0 0 0 0 0
--------- --------- -------- -------- --------
Total change in unrealized appreciation
(depreciation) ..................................... 178,298 131,450 6,041 (2,082) (3,713)
--------- --------- -------- -------- --------
Net gain (loss) on investment securities, futures
contracts and foreign currency transactions ........... 227,080 175,625 3,346 (705) 16,228
--------- --------- -------- -------- --------
Net increase (decrease) in net assets resulting
from operations .................................... $ 224,631 $ 174,740 $ 5,797 $ 2,625 $ 26,123
========= ========= ======== ======== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 89
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
C.A.S.E. GLOBAL VALUE INTERNATIONAL
GROWTH SECTOR EQUITY EQUITY U.S. EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $ 281 $ 271 $ 907 $ 69 $ 291
Dividends .............................................. 453 75 2,296 486 921
Foreign tax withheld ................................... (1) (5) (6) (61) (7)
--------- -------- ----------- ------- ---------
Total investment income .............................. 733 341 3,197 494 1,205
-------- ------- ---------- ------- --------
EXPENSES:
Investment advisory fees ............................... 516 99 1,458 275 555
Printing and shareholder reports ....................... 33 2 44 9 14
Custody fees ........................................... 48 46 37 240 140
Administrative service fees ............................ 14 1 19 4 6
Legal fees ............................................. 5 0 6 1 2
Auditing and accounting fees ........................... 6 5 5 6 7
Directors fees ......................................... 1 0 1 0 0
Registration fees ...................................... 0 0 0 0 0
Other fees ............................................. 21 4 28 6 10
-------- ------- ---------- ------- --------
Total expenses ....................................... 644 157 1,598 541 734
Less:
Advisory fee waiver and expense reimbursement ......... 0 0 0 128 0
Fees paid indirectly .................................. 0 0 0 0 1
-------- ------- ---------- ------- --------
Net expenses ......................................... 644 157 1,598 413 733
-------- ------- ---------- ------- --------
Net investment income (loss) ........................... 89 184 1,599 81 472
-------- ------- ---------- ------- --------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investment securities ................................. 7,730 112 7,509 (567) 3,697
Futures contracts ..................................... 0 0 0 48 886
Foreign currency transactions ......................... 0 0 0 (29) 1
-------- ------- ---------- ------- --------
Total net realized gain (loss) ....................... 7,730 112 7,509 (548) 4,584
-------- ------- ---------- ------- --------
Change in unrealized appreciation (depreciation) on:
Investment securities ................................. (6,329) 810 (21,758) 2,896 10,999
Futures contracts ..................................... 0 0 0 17 133
Foreign currency transactions ......................... 0 0 0 0 0
-------- ------- ---------- ------- --------
Total change in unrealized appreciation
(depreciation) ..................................... (6,329) 810 (21,758) 2,913 11,132
-------- ------- ---------- ------- --------
Net gain (loss) on investment securities, futures
contracts and foreign currency transactions ........... 1,401 922 (14,249) 2,365 15,716
-------- ------- ---------- ------- --------
Net increase (decrease) in net assets resulting
from operations .................................... $ 1,490 $ 1,106 $ (12,650) $ 2,446 $ 16,188
======== ======= ========== ======= ========
</TABLE>
The notes to the financial statements are an integral part of this report.
90 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
THIRD AVENUE REAL ESTATE
VALUE SECURITIES
PORTFOLIO (a) PORTFOLIO (b)
<S> <C> <C>
INVESTMENT INCOME:
Interest ............................................... $ 150 $ 5
Dividends .............................................. 78 79
Foreign tax withheld ................................... (2) 0
---------- -------
Total investment income .............................. 226 84
--------- -------
EXPENSES:
Investment advisory fees ............................... 112 9
Printing and shareholder reports ....................... 3 0
Custody fees ........................................... 31 26
Administrative service fees ............................ 1 0
Legal fees ............................................. 0 0
Auditing and accounting fees ........................... 5 5
Directors fees ......................................... 0 0
Registration fees ...................................... 0 0
Other fees ............................................. 2 0
--------- -------
Total expenses ....................................... 154 40
Less:
Advisory fee waiver and expense reimbursement ......... 14 28
Fees paid indirectly .................................. 0 0
--------- -------
Net expenses ......................................... 140 12
--------- -------
Net investment income (loss) ........................... 86 72
--------- -------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investment securities ................................. 292 (272)
Futures contracts ..................................... 0 0
Foreign currency transactions ......................... 0 0
--------- -------
Total net realized gain (loss) ....................... 292 (272)
--------- -------
Change in unrealized appreciation (depreciation) on:
Investment securities ................................. (1,456) (77)
Futures contracts ..................................... 0 0
Foreign currency transactions ......................... 0 0
--------- -------
Total change in unrealized appreciation
(depreciation) ..................................... (1,456) (77)
--------- -------
Net gain (loss) on investment securities, futures
contracts and foreign currency transactions ........... (1,164) (349)
--------- -------
Net increase (decrease) in net assets resulting
from operations .................................... $ (1,078) $ (277)
========= =======
</TABLE>
(a) The inception date of this Portfolio was January 2, 1998.
(b) The inception date of this Portfolio was May 1, 1998.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 91
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
MONEY MARKET BOND
PORTFOLIO PORTFOLIO
----------------------------- -----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 8,307 $ 6,679 $ 8,175 $ 5,746
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 0 0 1,952 (343)
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 0 0 2,580 3,049
----------- ----------- --------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 8,307 6,679 12,707 8,452
----------- ----------- --------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (8,307) (6,679) (8,188) (5,720)
In excess of net investment income ........... 0 0 0 0
Net realized gains ........................... 0 0 0 0
In excess of net realized gains .............. 0 0 0 0
----------- ----------- --------- ---------
Total distributions ......................... (8,307) (6,679) (8,188) (5,720)
----------- ----------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 415,785 265,418 81,280 53,537
Dividends and distributions reinvested ....... 8,307 6,679 8,188 5,720
Cost of shares redeemed ...................... (374,069) (274,503) (52,897) (28,094)
----------- ----------- --------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 50,023 (2,406) 36,571 31,163
----------- ----------- --------- ---------
Net increase (decrease) in net assets ........ 50,023 (2,406) 41,090 33,895
NET ASSETS:
Beginning of year ............................ 119,708 122,114 129,654 95,759
----------- ----------- --------- ---------
End of year .................................. $ 169,731 $ 119,708 $ 170,744 $ 129,654
=========== =========== ========= =========
Undistributed (distributions in excess
of) net investment income .................. $ 0 $ 0 $ 175 $ 188
=========== =========== ========= =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 119,708 122,114 11,637 8,943
----------- ----------- --------- ---------
Shares issued ................................ 415,785 265,418 6,906 4,738
Shares issued-reinvestment of dividends
and distributions ........................... 8,307 6,679 706 518
Shares redeemed .............................. (374,069) (274,503) (4,522) (2,562)
----------- ----------- --------- ---------
Increase (decrease) in shares outstanding..... 50,023 (2,406) 3,090 2,694
----------- ----------- --------- ---------
Shares outstanding - end of year ............. 169,731 119,708 14,727 11,637
=========== =========== ========= =========
<CAPTION>
GROWTH
PORTFOLIO
-------------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 5,859 $ 13,661
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 109,620 192,805
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 1,067,908 61,839
----------- -----------
Net increase (decrease) in net assets
resulting from operations ................... 1,183,387 268,305
----------- -----------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (4,582) (12,508)
In excess of net investment income ........... 0 0
Net realized gains ........................... (20,376) (183,828)
In excess of net realized gains .............. 0 0
----------- -----------
Total distributions ......................... (24,958) (196,336)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 334,912 211,999
Dividends and distributions reinvested ....... 24,958 196,336
Cost of shares redeemed ...................... (271,695) (168,260)
----------- -----------
Increase (decrease) in net assets from
capital share transactions ................. 88,175 240,075
----------- -----------
Net increase (decrease) in net assets ........ 1,246,604 312,044
NET ASSETS:
Beginning of year ............................ 1,839,453 1,527,409
----------- -----------
End of year .................................. $ 3,086,057 $ 1,839,453
=========== ===========
Undistributed (distributions in excess
of) net investment income .................. $ 1,083 $ 3,203
=========== ===========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 49,925 43,639
----------- -----------
Shares issued ................................ 7,017 5,508
Shares issued-reinvestment of dividends
and distributions ........................... 540 5,203
Shares redeemed .............................. (5,996) (4,425)
----------- -----------
Increase (decrease) in shares outstanding..... 1,561 6,286
----------- -----------
Shares outstanding - end of year ............. 51,486 49,925
=========== ===========
</TABLE>
The notes to the financial statements are an integral part of this report.
92 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
GLOBAL
PORTFOLIO
------------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
--------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 2,155 $ 2,809
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 40,987 82,081
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 193,520 25,087
----------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 236,662 109,977
----------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (5,524) (4,928)
In excess of net investment income ........... 0 (39,132)
Net realized gains ........................... (34,430) (49,141)
In excess of net realized gains .............. (2,669) 0
----------- ---------
Total distributions ......................... (42,623) (93,201)
----------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 170,974 203,595
Dividends and distributions reinvested ....... 42,623 93,201
Cost of shares redeemed ...................... (123,837) (62,426)
----------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 89,760 234,370
----------- ---------
Net increase (decrease) in net assets ........ 283,799 251,146
NET ASSETS:
Beginning of year ............................ 785,966 534,820
----------- ---------
End of year .................................. $ 1,069,765 $ 785,966
=========== =========
Undistributed (distributions in excess
of) net investment income .................. $ (1,472) $ 5,937
=========== =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 41,272 29,523
----------- ---------
Shares issued ................................ 7,631 10,065
Shares issued-reinvestment of dividends
and distributions ........................... 1,899 4,695
Shares redeemed .............................. (5,681) (3,011)
----------- ---------
Increase (decrease) in shares outstanding..... 3,849 11,749
----------- ---------
Shares outstanding - end of year ............. 45,121 41,272
=========== =========
<CAPTION>
STRATEGIC
TOTAL RETURN EMERGING GROWTH
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 13,622 $ 11,181 $ (2,449) $ (1,350)
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 25,081 34,138 48,782 52,368
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 12,649 44,737 178,298 46,598
--------- --------- --------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 51,352 90,056 224,631 97,616
--------- --------- --------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (13,507) (11,471) 0 0
In excess of net investment income ........... 0 (919) 0 0
Net realized gains ........................... (11,332) (31,748) (28,331) (54,441)
In excess of net realized gains .............. 0 0 0 0
--------- --------- --------- ---------
Total distributions ......................... (24,839) (44,138) (28,331) (54,441)
--------- --------- --------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 61,940 75,270 124,046 130,853
Dividends and distributions reinvested ....... 24,839 44,138 28,331 54,441
Cost of shares redeemed ...................... (47,557) (28,890) (87,240) (67,920)
--------- --------- --------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 39,222 90,518 65,137 117,374
--------- --------- --------- ---------
Net increase (decrease) in net assets ........ 65,735 136,436 261,437 160,549
NET ASSETS:
Beginning of year ............................ 526,577 390,141 592,003 431,454
--------- --------- --------- ---------
End of year .................................. $ 592,312 $ 526,577 $ 853,440 $ 592,003
========= ========= ========= =========
Undistributed (distributions in excess
of) net investment income .................. $ 1,633 $ 1,275 $ 0 $ 15
========= ========= ========= =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 33,702 27,923 29,066 23,371
--------- --------- --------- ---------
Shares issued ................................ 3,867 4,860 5,401 6,410
Shares issued-reinvestment of dividends
and distributions ........................... 1,537 2,768 1,183 2,639
Shares redeemed .............................. (3,000) (1,849) (3,952) (3,354)
--------- --------- --------- ---------
Increase (decrease) in shares outstanding..... 2,404 5,779 2,632 5,695
--------- --------- --------- ---------
Shares outstanding - end of year ............. 36,106 33,702 31,698 29,066
========= ========= ========= =========
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 93
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH
PORTFOLIO
-----------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ (885) $ (166)
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 44,175 36,183
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 131,450 20,413
--------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 174,740 56,430
--------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ 0 0
In excess of net investment income ........... (1,181) (8,640)
Net realized gains ........................... (28,097) (21,613)
In excess of net realized gains .............. 0 0
--------- ---------
Total distributions ......................... (29,278) (30,253)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 125,033 97,484
Dividends and distributions reinvested ....... 29,278 30,253
Cost of shares redeemed ...................... (61,775) (38,300)
--------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 92,536 89,437
--------- ---------
Net increase (decrease) in net assets ........ 237,998 115,614
NET ASSETS:
Beginning of year ............................ 336,166 220,552
--------- ---------
End of year .................................. $ 574,164 $ 336,166
========= =========
Undistributed (distributions in excess
of) net investment income .................. $ 9,035 $ 506
========= =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 20,952 15,556
--------- ---------
Shares issued ................................ 6,605 5,967
Shares issued-reinvestment of dividends
and distributions ........................... 1,461 1,837
Shares redeemed .............................. (3,430) (2,408)
--------- ---------
Increase (decrease) in shares outstanding..... 4,636 5,396
--------- ---------
Shares outstanding - end of year ............. 25,588 20,952
========= =========
<CAPTION>
BALANCED GROWTH & INCOME
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 2,451 $ 1,918 $ 3,330 $ 1,747
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... (2,695) 5,106 1,377 7,812
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 6,041 2,540 (2,082) 1,006
---------- -------- ---------- --------
Net increase (decrease) in net assets
resulting from operations ................... 5,797 9,564 2,625 10,565
---------- -------- ---------- --------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (2,097) (2,040) (3,680) (1,900)
In excess of net investment income ........... 0 (1,739) 0 (2,580)
Net realized gains ........................... 0 (3,594) (645) (3,981)
In excess of net realized gains .............. (90) 0 0 0
---------- -------- ---------- --------
Total distributions ......................... (2,187) (7,373) (4,325) (8,461)
---------- -------- ---------- --------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 27,666 20,555 44,343 20,687
Dividends and distributions reinvested ....... 2,187 7,373 4,325 8,461
Cost of shares redeemed ...................... (11,914) (5,999) (19,844) (8,875)
---------- -------- ---------- --------
Increase (decrease) in net assets from
capital share transactions ................. 17,939 21,929 28,824 20,273
---------- -------- ---------- --------
Net increase (decrease) in net assets ........ 21,549 24,120 27,124 22,377
NET ASSETS:
Beginning of year ............................ 73,451 49,331 60,492 38,115
---------- -------- ---------- --------
End of year .................................. $ 95,000 $ 73,451 $ 87,616 $ 60,492
========== ======== ========== ========
Undistributed (distributions in excess
of) net investment income .................. $ 316 $ 597 $ 1,628 $ 1,554
========== ======== ========== ========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 6,116 4,329 4,817 3,240
---------- -------- ---------- --------
Shares issued ................................ 2,254 1,673 3,566 1,630
Shares issued-reinvestment of dividends
and distributions ........................... 175 603 354 665
Shares redeemed .............................. (971) (489) (1,602) (718)
---------- -------- ---------- --------
Increase (decrease) in shares outstanding..... 1,458 1,787 2,318 1,577
---------- -------- ---------- --------
Shares outstanding - end of year ............. 7,574 6,116 7,135 4,817
========== ======== ========== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
94 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
TACTICAL ASSET ALLOCATION
PORTFOLIO
-----------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 9,895 $ 6,864
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 19,941 21,974
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ (3,713) 10,442
--------- ---------
Net increase (decrease) in net assets
resulting from operations ................... 26,123 39,280
--------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (10,269) (7,098)
In excess of net investment income ........... 0 (3,952)
Net realized gains ........................... (24,569) (11,378)
In excess of net realized gains .............. 0 0
--------- ---------
Total distributions ......................... (34,838) (22,428)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 65,710 80,867
Dividends and distributions reinvested ....... 34,838 22,428
Cost of shares redeemed ...................... (28,840) (23,574)
--------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 71,708 79,721
--------- ---------
Net increase (decrease) in net assets ........ 62,993 96,573
NET ASSETS:
Beginning of year ............................ 302,745 206,172
--------- ---------
End of year .................................. $ 365,738 $ 302,745
========= =========
Undistributed (distributions in excess
of) net investment income .................. $ 1,336 $ 848
========= =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 22,239 16,349
--------- ---------
Shares issued ................................ 4,661 5,989
Shares issued-reinvestment of dividends
and distributions ........................... 2,566 1,631
Shares redeemed .............................. (2,073) (1,730)
--------- ---------
Increase (decrease) in shares outstanding..... 5,154 5,890
--------- ---------
Shares outstanding - end of year ............. 27,393 22,239
========= =========
<CAPTION>
C.A.S.E. GROWTH GLOBAL SECTOR
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 89 $ 103 $ 184 $ 135
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 7,730 6,966 112 480
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ (6,329) (2,149) 810 (372)
---------- ---------- -------- --------
Net increase (decrease) in net assets
resulting from operations ................... 1,490 4,920 1,106 243
---------- ---------- -------- --------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (1,766) (115) (200) (148)
In excess of net investment income ........... (4,411) (4,867) (3) (442)
Net realized gains ........................... (411) (438) (100) (50)
In excess of net realized gains .............. 0 0 (39) 0
---------- ---------- -------- --------
Total distributions ......................... (6,588) (5,420) (342) (640)
---------- ---------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 27,821 42,918 3,126 10,666
Dividends and distributions reinvested ....... 6,588 5,420 342 640
Cost of shares redeemed ...................... (20,506) (13,801) (5,349) (5,174)
---------- ---------- -------- --------
Increase (decrease) in net assets from
capital share transactions ................. 13,903 34,537 (1,881) 6,132
---------- ---------- -------- --------
Net increase (decrease) in net assets ........ 8,805 34,037 (1,117) 5,735
NET ASSETS:
Beginning of year ............................ 60,596 26,559 12,721 6,986
---------- ---------- -------- --------
End of year .................................. $ 69,401 $ 60,596 $ 11,604 $ 12,721
========== ========== ======== ========
Undistributed (distributions in excess
of) net investment income .................. $ 3,954 $ 1,677 $ 92 $ 16
========== ========== ======== ========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 4,325 1,979 1,227 662
---------- ---------- -------- --------
Shares issued ................................ 2,031 2,855 284 952
Shares issued-reinvestment of dividends
and distributions ........................... 505 390 31 61
Shares redeemed .............................. (1,519) (899) (493) (448)
---------- ---------- -------- --------
Increase (decrease) in shares outstanding..... 1,017 2,346 (178) 565
---------- ---------- -------- --------
Shares outstanding - end of year ............. 5,342 4,325 1,049 1,227
========== ========== ======== ========
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 95
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
VALUE EQUITY
PORTFOLIO
-----------------------------
DECEMBER 31, DECEMBER 31,
1998 1997
-------------- --------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 1,599 $ 1,004
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 7,509 1,710
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ (21,758) 19,277
--------- ---------
Net increase (decrease) in net assets
resulting from operations ................... (12,650) 21,991
--------- ---------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (1,703) (1,036)
In excess of net investment income ........... (1,500) (869)
Net realized gains ........................... (7,955) (296)
In excess of net realized gains .............. (3,222) 0
--------- ---------
Total distributions ......................... (14,380) (2,201)
--------- ---------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 60,182 116,169
Dividends and distributions reinvested ....... 14,380 2,201
Cost of shares redeemed ...................... (63,810) (14,119)
--------- ---------
Increase (decrease) in net assets from
capital share transactions ................. 10,752 104,251
--------- ---------
Net increase (decrease) in net assets ........ (16,278) 124,041
NET ASSETS:
Beginning of year ............................ 173,435 49,394
--------- ---------
End of year .................................. $ 157,157 $ 173,435
========= =========
Undistributed (distributions in excess
of) net investment income .................. $ 607 $ 104
========= =========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 12,473 4,384
--------- ---------
Shares issued ................................ 4,316 9,039
Shares issued-reinvestment of dividends
and distributions ........................... 1,168 160
Shares redeemed .............................. (4,985) (1,110)
--------- ---------
Increase (decrease) in shares outstanding..... 499 8,089
--------- ---------
Shares outstanding - end of year ............. 12,972 12,473
========= =========
<CAPTION>
INTERNATIONAL
EQUITY U.S. EQUITY
PORTFOLIO PORTFOLIO
----------------------------- ----------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 (a) 1998 1997 (a)
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 81 $ 20 $ 472 $ 129
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... (548) (346) 4,584 1,894
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ 2,913 169 11,132 1,123
---------- -------- --------- ----------
Net increase (decrease) in net assets
resulting from operations ................... 2,446 (157) 16,188 3,146
---------- -------- --------- ----------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (23) (20) (1,004) (129)
In excess of net investment income ........... 0 (65) (2,280) (1,301)
Net realized gains ........................... 0 0 (758) (133)
In excess of net realized gains .............. 0 0 0 0
---------- -------- --------- ----------
Total distributions ......................... (23) (85) (4,042) (1,563)
---------- -------- --------- ----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 26,504 25,394 82,493 54,442
Dividends and distributions reinvested ....... 23 85 4,042 1,563
Cost of shares redeemed ...................... (16,596) (5,442) (30,829) (14,637)
---------- -------- --------- ----------
Increase (decrease) in net assets from
capital share transactions ................. 9,931 20,037 55,706 41,368
---------- -------- --------- ----------
Net increase (decrease) in net assets ........ 12,354 19,795 67,852 42,951
NET ASSETS:
Beginning of year ............................ 19,795 0 42,951 0
---------- -------- --------- ----------
End of year .................................. $ 32,149 $ 19,795 $ 110,803 $ 42,951
========== ======== ========= ==========
Undistributed (distributions in excess
of) net investment income .................. $ 42 $ 11 $ 1,275 $ 532
========== ======== ========= ==========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 1,850 0 3,511 0
---------- -------- --------- ----------
Shares issued ................................ 2,225 2,346 6,159 4,640
Shares issued-reinvestment of dividends
and distributions ........................... 2 8 286 127
Shares redeemed .............................. (1,413) (504) (2,272) (1,256)
---------- -------- --------- ----------
Increase (decrease) in shares outstanding..... 814 1,850 4,173 3,511
---------- -------- --------- ----------
Shares outstanding - end of year ............. 2,664 1,850 7,684 3,511
========== ======== ========= ==========
</TABLE>
(a) The inception date of this Portfolio was January 2, 1997.
The notes to the financial statements are an integral part of this report.
96 WRL SERIES FUND, INC.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED
ALL AMOUNTS IN THOUSANDS
<TABLE>
<CAPTION>
THIRD AVENUE REAL ESTATE
VALUE SECURITIES
PORTFOLIO PORTFOLIO
-------------- -------------
DECEMBER 31, DECEMBER 31,
1998 (A) 1998 (B)
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) ................. $ 86 $ 72
Net realized gain (loss) on investment
securites, futures contracts and
foreign currency transactions ............... 292 (272)
Change in unrealized appreciation
(depreciation) on investment securities,
futures contracts and foreign currency
transactions ................................ (1,456) (77)
-------- --------
Net increase (decrease) in net assets
resulting from operations ................... (1,078) (277)
-------- --------
DISTRIBUTION TO SHAREHOLDERS:
Net investment income ........................ (50) 0
In excess of net investment income ........... 0 0
Net realized gains ........................... 0 0
In excess of net realized gains .............. 0 0
-------- --------
Total distributions ......................... (50) 0
-------- --------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............ 24,952 4,110
Dividends and distributions reinvested ....... 50 0
Cost of shares redeemed ...................... (5,668) (1,419)
-------- --------
Increase (decrease) in net assets from
capital share transactions ................. 19,334 2,691
-------- --------
Net increase (decrease) in net assets ........ 18,206 2,414
NET ASSETS:
Beginning of year ............................ 0 0
-------- --------
End of year .................................. $ 18,206 $ 2,414
======== ========
Undistributed (distributions in excess
of) net investment income .................. $ 328 $ 72
======== ========
SHARE ACTIVITY:
Shares outstanding - beginning of year ....... 0 0
-------- --------
Shares issued ................................ 2,566 448
Shares issued-reinvestment of dividends
and distributions ........................... 6 0
Shares redeemed .............................. (612) (164)
-------- --------
Increase (decrease) in shares outstanding..... 1,960 284
-------- --------
Shares outstanding - end of year ............. 1,960 284
======== ========
</TABLE>
(a) The inception date of this Portfolio was January 2, 1998.
(b) The inception date of this Portfolio was May 1, 1998.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 97
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
-----------------------------
DECEMBER 31,
-----------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 1.00 $ 1.00
Income from operations:
Net investment income (loss) ........................................ 0.05 0.05
Net realized and unrealized gain (loss) on investments .............. 0.00 0.00
-------- --------
Net income (loss) from operations .................................. 0.05 0.05
-------- --------
Distributions:
Dividends from net investment income ................................ (0.05) (0.05)
Dividends in excess of net investment income ........................ 0.00 0.00
Distributions from net realized gains on investments ................ 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00
-------- --------
Total distributions ................................................ (0.05) (0.05)
-------- --------
Net asset value, end of year .......................................... $ 1.00 $ 1.00
======== ========
Total return (a) ...................................................... 5.26 % 5.24 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $169,731 $ 119,708
Ratio of expenses to average net assets (b) ......................... 0.46 % 0.48 %
Ratio of net investment income (loss) to average net assets (b) ..... 5.24 % 5.32 %
Portfolio turnover rate (a) ......................................... n/a n/a
<CAPTION>
MONEY MARKET PORTFOLIO
------------------------------------------
DECEMBER 31,
------------------------------------------
1996 1995 1994
-------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 1.00 $ 1.00 $ 1.00
Income from operations:
Net investment income (loss) ........................................ 0.05 0.05 0.04
Net realized and unrealized gain (loss) on investments .............. 0.00 0.00 0.00
-------- ------- -------
Net income (loss) from operations .................................. 0.05 0.05 0.04
-------- ------- -------
Distributions:
Dividends from net investment income ................................ (0.05) (0.05) (0.04)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ 0.00 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
-------- ------- -------
Total distributions ................................................ (0.05) (0.05) (0.04)
-------- ------- -------
Net asset value, end of year .......................................... $ 1.00 $ 1.00 $ 1.00
======== ======= =======
Total return (a) ...................................................... 5.03 % 5.40 % 3.44 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $122,114 $ 80,544 $ 93,081
Ratio of expenses to average net assets (b) ......................... 0.52 % 0.56 % 0.60 %
Ratio of net investment income (loss) to average net assets (b) ..... 5.03 % 5.30 % 3.59 %
Portfolio turnover rate (a) ......................................... n/a n/a n/a
</TABLE>
<TABLE>
<CAPTION>
BOND PORTFOLIO
-----------------------------
DECEMBER 31,
-----------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 11.14 $ 10.71
Income from operations:
Net investment income (loss) ........................................ 0.64 0.65
Net realized and unrealized gain (loss) on investments .............. 0.40 0.32
-------- --------
Net income (loss) from operations .................................. 1.04 0.97
-------- --------
Distributions:
Dividends from net investment income ................................ (0.59) (0.54)
Dividends in excess of net investment income ........................ 0.00 0.00
Distributions from net realized gains on investments ................ 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00
-------- --------
Total distributions ................................................ (0.59) (0.54)
-------- --------
Net asset value, end of year .......................................... $ 11.59 $ 11.14
======== ========
Total return (a) ...................................................... 9.32 % 9.16 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 170,744 $ 129,654
Ratio of expenses to average net assets (b) ......................... 0.54 % 0.64 %
Ratio of net investment income (loss) to average net assets (b) ..... 5.54 % 5.90 %
Portfolio turnover rate (a) ......................................... 51.60 % 213.03 %
<CAPTION>
BOND PORTFOLIO
----------------------------------------
DECEMBER 31,
----------------------------------------
1996 1995 1994
------------- ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 11.35 $ 9.80 $ 11.24
Income from operations:
Net investment income (loss) ........................................ 0.64 0.69 0.63
Net realized and unrealized gain (loss) on investments .............. (0.64) 1.55 (1.44)
-------- -------- --------
Net income (loss) from operations .................................. 0.00 2.24 (0.81)
-------- -------- --------
Distributions:
Dividends from net investment income ................................ (0.64) (0.69) (0.63)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ 0.00 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
-------- -------- --------
Total distributions ................................................ (0.64) (0.69) (0.63)
-------- -------- --------
Net asset value, end of year .......................................... $ 10.71 $ 11.35 $ 9.80
======== ======== ========
Total return (a) ...................................................... 0.14 % 22.99 % (6.94)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 95,759 $ 96,972 $ 71,064
Ratio of expenses to average net assets (b) ......................... 0.64 % 0.61 % 0.59 %
Ratio of net investment income (loss) to average net assets (b) ..... 5.96 % 6.45 % 5.94 %
Portfolio turnover rate (a) ......................................... 187.72 % 120.54 % 131.73 %
</TABLE>
The notes to the financial statements are an integral part of this report.
98 WRL SERIES FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
---------------------------------
DECEMBER 31,
---------------------------------
1998 1997
---------------- ----------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 36.84 $ 35.00
Income from operations:
Net investment income (loss) ........................................ 0.12 0.31
Net realized and unrealized gain (loss) on investments .............. 23.49 5.88
---------- ----------
Net income (loss) from operations .................................. 23.61 6.19
---------- ----------
Distributions:
Dividends from net investment income ................................ (0.09) (0.26)
Dividends in excess of net investment income ........................ 0.00 0.00
Distributions from net realized gains on investments ................ (0.42) (4.09)
Distributions in excess of net realized gains on investments ........ 0.00 0.00
---------- ----------
Total distributions ................................................ (0.51) (4.35)
---------- ----------
Net asset value, end of year .......................................... $ 59.94 $ 36.84
========== ==========
Total return (a) ...................................................... 64.47 % 17.54 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $3,086,057 $ 1,839,453
Ratio of expenses to average net assets (b) ......................... 0.83 % 0.87 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.25 % 0.80 %
Portfolio turnover rate (a) ......................................... 35.29 % 85.88 %
<CAPTION>
GROWTH PORTFOLIO
--------------------------------------------------
DECEMBER 31,
--------------------------------------------------
1996 1995 1994
---------------- ---------------- ----------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 31.66 $ 23.81 $ 26.25
Income from operations:
Net investment income (loss) ........................................ 0.34 0.26 0.22
Net realized and unrealized gain (loss) on investments .............. 5.35 10.97 (2.41)
---------- ---------- -----------
Net income (loss) from operations .................................. 5.69 11.23 (2.19)
---------- ---------- -----------
Distributions:
Dividends from net investment income ................................ (0.35) (0.24) (0.22)
Dividends in excess of net investment income ........................ (0.01) 0.00 0.00
Distributions from net realized gains on investments ................ (1.99) (3.14) 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 (0.03)
---------- ---------- -----------
Total distributions ................................................ (2.35) (3.38) (0.25)
---------- ---------- -----------
Net asset value, end of year .......................................... $ 35.00 $ 31.66 $ 23.81
========== ========== ===========
Total return (a) ...................................................... 17.96 % 47.12 % (8.31)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $1,527,409 $ 1,195,174 $ 814,383
Ratio of expenses to average net assets (b) ......................... 0.88 % 0.86 % 0.84 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.98 % 0.90 % 0.88 %
Portfolio turnover rate (a) ......................................... 45.21 % 130.48 % 107.33 %
</TABLE>
<TABLE>
<CAPTION>
GLOBAL PORTFOLIO
-------------------------------
DECEMBER 31,
-------------------------------
1998 1997
---------------- --------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 19.04 $ 18.12
Income from operations:
Net investment income (loss) ........................................ 0.05 0.08
Net realized and unrealized gain (loss) on investments .............. 5.61 3.32
---------- --------
Net income (loss) from operations .................................. 5.66 3.40
---------- --------
Distributions:
Dividends from net investment income ................................ (0.13) (0.13)
Dividends in excess of net investment income ........................ 0.00 (1.01)
Distributions from net realized gains on investments ................ (0.80) (1.34)
Distributions in excess of net realized gains on investments ........ (0.06) 0.00
---------- --------
Total distributions ................................................ (0.99) (2.48)
---------- --------
Net asset value, end of year .......................................... $ 23.71 $ 19.04
========== ========
Total return (a) ...................................................... 30.01 % 18.75 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $1,069,765 $ 785,966
Ratio of expenses to average net assets (b) ......................... 0.95 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.23 % 0.41 %
Portfolio turnover rate (a) ......................................... 87.36 % 97.54 %
<CAPTION>
GLOBAL PORTFOLIO
--------------------------------------------
DECEMBER 31,
--------------------------------------------
1996 1995 1994
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 15.52 $ 13.12 $ 13.62
Income from operations:
Net investment income (loss) ........................................ 0.08 0.10 0.10
Net realized and unrealized gain (loss) on investments .............. 4.20 2.91 0.10
-------- -------- --------
Net income (loss) from operations .................................. 4.28 3.01 0.20
-------- -------- --------
Distributions:
Dividends from net investment income ................................ (0.04) 0.00 (0.10)
Dividends in excess of net investment income ........................ (0.17) 0.00 (0.01)
Distributions from net realized gains on investments ................ (1.47) (0.61) (0.56)
Distributions in excess of net realized gains on investments ........ 0.00 0.00 (0.03)
-------- -------- --------
Total distributions ................................................ (1.68) (0.61) (0.70)
-------- -------- --------
Net asset value, end of year .......................................... $ 18.12 $ 15.52 $ 13.12
======== ======== ========
Total return (a) ...................................................... 27.74 % 23.06 % 0.25 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $534,820 $289,506 $261,778
Ratio of expenses to average net assets (b) ......................... 0.99 % 0.99 % 1.01 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.46 % 0.75 % 0.73 %
Portfolio turnover rate (a) ......................................... 88.31 % 130.60 % 192.06 %
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 99
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
STRATEGIC TOTAL RETURN
PORTFOLIO
-----------------------------
DECEMBER 31,
-----------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 15.62 $ 13.97
Income from operations:
Net investment income (loss) ........................................ 0.39 0.37
Net realized and unrealized gain (loss) on investments .............. 1.09 2.68
-------- --------
Net income (loss) from operations .................................. 1.48 3.05
-------- --------
Distributions:
Dividends from net investment income ................................ (0.38) (0.35)
Dividends in excess of net investment income ........................ 0.00 (0.03)
Distributions from net realized gains on investments ................ (0.32) (1.02)
Distributions in excess of net realized gains on investments ........ 0.00 0.00
-------- --------
Total distributions ................................................ (0.70) (1.40)
-------- --------
Net asset value, end of year .......................................... $ 16.40 $ 15.62
======== ========
Total return (a) ...................................................... 9.64 % 21.85 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $592,312 $ 526,577
Ratio of expenses to average net assets (b) ......................... 0.86 % 0.88 %
Ratio of net investment income (loss) to average net assets (b) ..... 2.43 % 2.43 %
Portfolio turnover rate (a) ......................................... 49.20 % 48.20 %
<CAPTION>
STRATEGIC TOTAL RETURN PORTFOLIO
-------------------------------------------
DECEMBER 31,
-------------------------------------------
1996 1995 1994
-------------- -------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 12.86 $ 10.90 $ 11.23
Income from operations:
Net investment income (loss) ........................................ 0.37 0.37 0.31
Net realized and unrealized gain (loss) on investments .............. 1.56 2.33 (0.33)
-------- -------- --------
Net income (loss) from operations .................................. 1.93 2.70 (0.02)
-------- -------- --------
Distributions:
Dividends from net investment income ................................ (0.32) (0.37) (0.31)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ (0.50) (0.37) 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
-------- -------- --------
Total distributions ................................................ (0.82) (0.74) (0.31)
-------- -------- --------
Net asset value, end of year .......................................... $ 13.97 $ 12.86 $ 10.90
======== ======== ========
Total return (a) ...................................................... 15.00 % 24.66 % (0.53)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $390,141 $ 256,806 $ 183,867
Ratio of expenses to average net assets (b) ......................... 0.91 % 0.87 % 0.89 %
Ratio of net investment income (loss) to average net assets (b) ..... 2.72 % 3.07 % 2.78 %
Portfolio turnover rate (a) ......................................... 49.32 % 52.59 % 53.50 %
</TABLE>
<TABLE>
<CAPTION>
EMERGING GROWTH PORTFOLIO
-----------------------------
DECEMBER 31,
-----------------------------
1998 1997
-------------- --------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 20.37 $ 18.46
Income from operations:
Net investment income (loss) ........................................ (0.08) (0.05)
Net realized and unrealized gain (loss) on investments .............. 7.56 4.03
-------- --------
Net income (loss) from operations .................................. 7.48 3.98
-------- --------
Distributions:
Dividends from net investment income ................................ 0.00 0.00
Dividends in excess of net investment income ........................ 0.00 0.00
Distributions from net realized gains on investments ................ (0.93) (2.07)
Distributions in excess of net realized gains on investments ........ 0.00 0.00
-------- --------
Total distributions ................................................ (0.93) (2.07)
-------- --------
Net asset value, end of year .......................................... $ 26.92 $ 20.37
======== ========
Total return (a) ...................................................... 37.33 % 21.45 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $853,440 $592,003
Ratio of expenses to average net assets (b) ......................... 0.89 % 0.93 %
Ratio of net investment income (loss) to average net assets (b) ..... (0.36)% (0.27)%
Portfolio turnover rate (a) ......................................... 99.50 % 99.78 %
<CAPTION>
EMERGING GROWTH PORTFOLIO
-------------------------------------------
DECEMBER 31,
-------------------------------------------
1996 1995 1994
-------------- -------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 16.25 $ 11.55 $ 12.47
Income from operations:
Net investment income (loss) ........................................ (0.04) 0.01 0.01
Net realized and unrealized gain (loss) on investments .............. 3.10 5.42 (0.92)
-------- -------- --------
Net income (loss) from operations .................................. 3.06 5.43 (0.91)
-------- -------- --------
Distributions:
Dividends from net investment income ................................ 0.00 0.00 (0.01)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ (0.85) (0.73) 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
-------- -------- --------
Total distributions ................................................ (0.85) (0.73) (0.01)
-------- -------- --------
Net asset value, end of year .......................................... $ 18.46 $ 16.25 $ 11.55
======== ======== ========
Total return (a) ...................................................... 18.88 % 46.79 % (7.36)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $431,454 $ 288,519 $ 182,650
Ratio of expenses to average net assets (b) ......................... 0.94 % 0.91 % 0.92 %
Ratio of net investment income (loss) to average net assets (b) ..... (0.24)% 0.03 % 0.06 %
Portfolio turnover rate (a) ......................................... 80.02 % 124.13 % 72.62 %
</TABLE>
The notes to the financial statements are an integral part of this report.
100 WRL SERIES FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
---------------------------
DECEMBER 31,
---------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 16.04 $ 14.18
Income from operations:
Net investment income (loss) ........................................ (0.04) (0.01)
Net realized and unrealized gain (loss) on investments .............. 7.68 3.44
---------- ----------
Net income (loss) from operations .................................. 7.64 3.43
---------- ----------
Distributions:
Dividends from net investment income ................................ 0.00 0.00
Dividends in excess of net investment income ........................ (0.05) (0.42)
Distributions from net realized gains on investments ................ (1.19) (1.15)
Distributions in excess of net realized gains on investments ........ 0.00 0.00
---------- ----------
Total distributions ................................................ (1.24) (1.57)
---------- ----------
Net asset value, end of year .......................................... $ 22.44 $ 16.04
========== ==========
Total return (a) ...................................................... 48.69 % 24.25 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 574,164 $ 336,166
Ratio of expenses to average net assets (b) ......................... 0.91 % 0.96 %
Ratio of net investment income (loss) to average net assets (b) ..... (0.21)% (0.06)%
Portfolio turnover rate (a) ......................................... 117.44 % 136.18 %
<CAPTION>
AGGRESSIVE GROWTH PORTFOLIO
----------------------------------------
DECEMBER 31,
----------------------------------------
1996 1995 1994 (c)
------------- ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 13.25 $ 9.86 $ 10.00
Income from operations:
Net investment income (loss) ........................................ (0.01) (0.06) 0.02
Net realized and unrealized gain (loss) on investments .............. 1.38 3.96 (0.14)
---------- ---------- ---------
Net income (loss) from operations .................................. 1.37 3.90 (0.12)
---------- ---------- ---------
Distributions:
Dividends from net investment income ................................ 0.00 0.00 (0.02)
Dividends in excess of net investment income ........................ (0.19) 0.00 0.00
Distributions from net realized gains on investments ................ (0.25) (0.51) 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
---------- ---------- ---------
Total distributions ................................................ (0.44) (0.51) (0.02)
---------- ---------- ---------
Net asset value, end of year .......................................... $ 14.18 $ 13.25 $ 9.86
========== ========== =========
Total return (a) ...................................................... 10.45 % 38.02 % (1.26)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 220,552 $ 158,534 $ 38,826
Ratio of expenses to average net assets (b) ......................... 0.98 % 1.07 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... (0.10)% (0.48)% (0.20)%
Portfolio turnover rate (a) ......................................... 101.28 % 108.04 % 89.73 %
</TABLE>
<TABLE>
<CAPTION>
BALANCED PORTFOLIO
---------------------------
DECEMBER 31,
---------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 12.01 $ 11.39
Income from operations:
Net investment income (loss) ........................................ 0.35 0.38
Net realized and unrealized gain (loss) on investments .............. 0.47 1.56
------- -------
Net income (loss) from operations .................................. 0.82 1.94
------- -------
Distributions:
Dividends from net investment income ................................ (0.28) (0.36)
Dividends in excess of net investment income ........................ 0.00 (0.30)
Distributions from net realized gains on investments ................ 0.00 (0.66)
Distributions in excess of net realized gains on investments ........ (0.01) 0.00
------- -------
Total distributions ................................................ (0.29) (1.32)
------- -------
Net asset value, end of year .......................................... $ 12.54 $ 12.01
======= =======
Total return (a) ...................................................... 6.93 % 17.10 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 95,000 $73,451
Ratio of expenses to average net assets (b) ......................... 0.91 % 0.94 %
Ratio of net investment income (loss) to average net assets (b) ..... 2.89 % 3.13 %
Portfolio turnover rate (a) ......................................... 83.94 % 77.06 %
<CAPTION>
BALANCED PORTFOLIO
---------------------------------------
DECEMBER 31,
---------------------------------------
1996 1995 1994 (c)
------------ ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 10.63 $ 9.24 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.34 0.44 0.34
Net realized and unrealized gain (loss) on investments .............. 0.80 1.38 (0.76)
------- ------- ---------
Net income (loss) from operations .................................. 1.14 1.82 (0.42)
------- ------- ---------
Distributions:
Dividends from net investment income ................................ (0.28) (0.43) (0.34)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ (0.10) 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
------- ------- ---------
Total distributions ................................................ (0.38) (0.43) (0.34)
------- ------- ---------
Net asset value, end of year .......................................... $ 11.39 $ 10.63 $ 9.24
======= ======= =========
Total return (a) ...................................................... 10.72 % 19.80 % (5.73)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $49,331 $31,114 $ 19,422
Ratio of expenses to average net assets (b) ......................... 0.97 % 0.97 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 3.14 % 4.38 % 4.27 %
Portfolio turnover rate (a) ......................................... 76.90 % 98.55 % 57.73 %
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 101
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
GROWTH & INCOME PORTFOLIO
---------------------------
DECEMBER 31,
---------------------------
1998 1997
------------- -------------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 12.56 $ 11.76
Income from operations:
Net investment income (loss) ........................................ 0.53 0.49
Net realized and unrealized gain (loss) on investments .............. (0.16) 2.35
------- --------
Net income (loss) from operations .................................. 0.37 2.84
------- --------
Distributions:
Dividends from net investment income ................................ (0.55) (0.43)
Dividends in excess of net investment income ........................ 0.00 (0.59)
Distributions from net realized gains on investments ................ (0.10) (1.02)
Distributions in excess of net realized gains on investments ........ 0.00 0.00
------- --------
Total distributions ................................................ (0.65) (2.04)
------- --------
Net asset value, end of year .......................................... $ 12.28 $ 12.56
======= ========
Total return (a) ...................................................... 3.05 % 24.65 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 87,616 $ 60,492
Ratio of expenses to average net assets (b) ......................... 0.90 % 0.96 %
Ratio of net investment income (loss) to average net assets (b) ..... 4.35 % 3.84 %
Portfolio turnover rate (a) ......................................... 97.17 % 155.77 %
<CAPTION>
GROWTH & INCOME PORTFOLIO
----------------------------------------
DECEMBER 31,
----------------------------------------
1996 1995 1994 (c)
------------- ------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 11.12 $ 9.30 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.42 0.46 0.43
Net realized and unrealized gain (loss) on investments .............. 0.87 1.93 (0.70)
------- ------- ---------
Net income (loss) from operations .................................. 1.29 2.39 (0.27)
------- ------- ---------
Distributions:
Dividends from net investment income ................................ (0.33) (0.46) (0.43)
Dividends in excess of net investment income ........................ 0.00 0.00 0.00
Distributions from net realized gains on investments ................ (0.32) (0.11) 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
------- ------- ---------
Total distributions ................................................ (0.65) (0.57) (0.43)
------- ------- ---------
Net asset value, end of year .......................................... $ 11.76 $ 11.12 $ 9.30
======= ======= =========
Total return (a) ...................................................... 11.64 % 25.25 % (4.58)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $38,115 $24,607 $ 10,482
Ratio of expenses to average net assets (b) ......................... 1.00 % 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 3.73 % 4.56 % 5.36 %
Portfolio turnover rate (a) ......................................... 68.53 % 78.34 % 36.13 %
</TABLE>
<TABLE>
<CAPTION>
TACTICAL ASSET
ALLOCATION
PORTFOLIO
--------------
DECEMBER 31,
--------------
1998
--------------
<S> <C>
Net asset value, beginning of year .................................... $ 13.61
Income from operations:
Net investment income (loss) ........................................ 0.41
Net realized and unrealized gain (loss) on investments .............. 0.71
--------
Net income (loss) from operations .................................. 1.12
--------
Distributions:
Dividends from net investment income ................................ (0.39)
Dividends in excess of net investment income ........................ 0.00
Distributions from net realized gains on investments ................ (0.99)
Distributions in excess of net realized gains on investments ........ 0.00
--------
Total distributions ................................................ (1.38)
--------
Net asset value, end of year .......................................... $ 13.35
========
Total return (a) ...................................................... 8.33 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 365,738
Ratio of expenses to average net assets (b) ......................... 0.86 %
Ratio of net investment income (loss) to average net assets (b) ..... 2.93 %
Portfolio turnover rate (a) ......................................... 76.62 %
<CAPTION>
TACTICAL ASSET ALLOCATION PORTFOLIO
--------------------------------------------
DECEMBER 31,
--------------------------------------------
1997 1996 1995 (d)
-------------- -------------- --------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 12.61 $ 11.49 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.36 0.33 0.41
Net realized and unrealized gain (loss) on investments .............. 1.72 1.33 1.93
-------- -------- --------
Net income (loss) from operations .................................. 2.08 1.66 2.34
-------- -------- --------
Distributions:
Dividends from net investment income ................................ (0.33) (0.30) (0.41)
Dividends in excess of net investment income ........................ (0.19) 0.00 0.00
Distributions from net realized gains on investments ................ (0.56) (0.24) (0.44)
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00
-------- -------- --------
Total distributions ................................................ (1.08) (0.54) (0.85)
-------- -------- --------
Net asset value, end of year .......................................... $ 13.61 $ 12.61 $ 11.49
======== ======== ========
Total return (a) ...................................................... 16.59 % 14.42 % 20.09 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $302,745 $206,172 $120,531
Ratio of expenses to average net assets (b) ......................... 0.87 % 0.90 % 0.93 %
Ratio of net investment income (loss) to average net assets (b) ..... 2.65 % 2.78 % 3.76 %
Portfolio turnover rate (a) ......................................... 63.76 % 98.97 % 38.68 %
</TABLE>
The notes to the financial statements are an integral part of this report.
102 WRL SERIES FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
C.A.S.E. GROWTH PORTFOLIO
---------------------------------------------------
DECEMBER 31,
---------------------------------------------------
1998 1997 1996 1995 (e)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year .................................... $ 14.01 $ 13.42 $ 11.66 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.02 0.04 0.12 0.12
Net realized and unrealized gain (loss) on investments .............. 0.31 1.95 1.92 2.49
-------- -------- -------- --------
Net income (loss) from operations .................................. 0.33 1.99 2.04 2.61
-------- -------- -------- --------
Distributions:
Dividends from net investment income ................................ (0.36) (0.03) (0.05) (0.12)
Dividends in excess of net investment income ........................ (0.90) (1.23) 0.00 0.00
Distributions from net realized gains on investments ................ (0.09) (0.14) (0.23) (0.83)
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00 0.00
-------- -------- -------- --------
Total distributions ................................................ (1.35) (1.40) (0.28) (0.95)
-------- -------- -------- --------
Net asset value, end of year .......................................... $ 12.99 $ 14.01 $ 13.42 $ 11.66
======== ======== ======== ========
Total return (a) ...................................................... 2.47 % 15.03 % 17.50 % 20.65 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $ 69,401 $ 60,596 $ 26,559 $ 2,578
Ratio of expenses to average net assets (b) ......................... 1.00 % 1.00 % 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.14 % 0.25 % 0.94 % 1.02 %
Portfolio turnover rate (a) ......................................... 205.28 % 196.50 % 160.27 % 121.62 %
</TABLE>
<TABLE>
<CAPTION>
GLOBAL SECTOR PORTFOLIO
-------------------------------------------
DECEMBER 31,
-------------------------------------------
1998 1997 1996 (f)
------------- ------------- -----------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 10.37 $ 10.55 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.16 0.14 0.06
Net realized and unrealized gain (loss) on investments .............. 0.85 0.23 0.55
------- ------- -------
Net income (loss) from operations .................................. 1.01 0.37 0.61
------- ------- -------
Distributions:
Dividends from net investment income ................................ (0.19) (0.13) (0.02)
Dividends in excess of net investment income ........................ 0.00 (0.38) 0.00
Distributions from net realized gains on investments ................ (0.09) (0.04) (0.04)
Distributions in excess of net realized gains on investments ........ (0.04) 0.00 0.00
------- ------- -------
Total distributions ................................................ (0.32) (0.55) (0.06)
------- ------- -------
Net asset value, end of year .......................................... $ 11.06 $ 10.37 $ 10.55
======= ======= =======
Total return (a) ...................................................... 9.83 % 3.43 % 6.08 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $11,604 $12,721 $ 6,986
Ratio of expenses to average net assets (b) ......................... 1.27 % 1.70 % 2.37 %
Ratio of net investment income (loss) to average net assets (b) ..... 1.49 % 1.27 % 0.62 %
Portfolio turnover rate (a) ......................................... 38.57 % 56.26 % 27.58 %
</TABLE>
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 103
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
VALUE EQUITY PORTFOLIO
----------------------------------------------
DECEMBER 31,
----------------------------------------------
1998 1997 1996 (f)
-------------- -------------- ------------
<S> <C> <C> <C>
Net asset value, beginning of year .................................... $ 13.90 $ 11.27 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.12 0.12 0.10
Net realized and unrealized gain (loss) on investments .............. (0.78) 2.69 1.23
-------- -------- -------
Net income (loss) from operations .................................. (0.66) 2.81 1.33
-------- -------- -------
Distributions:
Dividends from net investment income ................................ (0.13) (0.09) (0.04)
Dividends in excess of net investment income ........................ (0.12) (0.07) 0.00
Distributions from net realized gains on investments ................ (0.62) (0.02) (0.02)
Distributions in excess of net realized gains on investments ........ (0.25) 0.00 0.00
-------- -------- -------
Total distributions ................................................ (1.12) (0.18) (0.06)
-------- -------- -------
Net asset value, end of year .......................................... $ 12.12 $ 13.90 $ 11.27
======== ======== =======
Total return (a) ...................................................... (4.78)% 25.04 % 13.19 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $157,157 $173,435 $49,394
Ratio of expenses to average net assets (b) ......................... 0.89 % 0.89 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.89 % 0.90 % 0.89 %
Portfolio turnover rate (a) ......................................... 43.60 % 17.28 % 7.93 %
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
PORTFOLIO
--------------------------
DECEMBER 31,
--------------------------
1998 1997 (g)
------------ -----------
<S> <C> <C>
Net asset value, beginning of year .................................... $ 10.70 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.03 0.02
Net realized and unrealized gain (loss) on investments .............. 1.35 0.73
------- -------
Net income (loss) from operations .................................. 1.38 0.75
------- -------
Distributions:
Dividends from net investment income ................................ (0.01) (0.01)
Dividends in excess of net investment income ........................ 0.00 (0.04)
Distributions from net realized gains on investments ................ 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00
------- -------
Total distributions ................................................ (0.01) (0.05)
------- -------
Net asset value, end of year .......................................... $ 12.07 $ 10.70
======= =======
Total return (a) ...................................................... 12.85 % 7.50 %
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $32,149 $19,795
Ratio of expenses to average net assets (b) ......................... 1.50 % 1.50 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.30 % 0.18 %
Portfolio turnover rate (a) ......................................... 71.74 % 54.33 %
</TABLE>
The notes to the financial statements are an integral part of this report.
104 WRL SERIES FUND, INC.
<PAGE>
FINANCIAL HIGHLIGHTS*
FOR THE YEAR ENDED
<TABLE>
<CAPTION>
U.S. THIRD AVENUE REAL ESTATE
EQUITY VALUE SECURITIES
PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------- -------------- -------------
DECEMBER 31, DECEMBER 31, DECEMBER 31,
---------------------------- -------------- -------------
1998 1997 (g) 1998 (h) 1998 (i)
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year .................................... $ 12.23 $ 10.00 $ 10.00 $ 10.00
Income from operations:
Net investment income (loss) ........................................ 0.09 0.09 0.06 0.36
Net realized and unrealized gain (loss) on investments .............. 2.69 2.60 (0.74) (1.85)
-------- ------- ------- ---------
Net income (loss) from operations .................................. 2.78 2.69 (0.68) (1.49)
-------- ------- ------- ---------
Distributions:
Dividends from net investment income ................................ (0.15) (0.04) (0.03) 0.00
Dividends in excess of net investment income ........................ (0.33) (0.38) 0.00 0.00
Distributions from net realized gains on investments ................ (0.11) (0.04) 0.00 0.00
Distributions in excess of net realized gains on investments ........ 0.00 0.00 0.00 0.00
-------- ------- ------- ---------
Total distributions ................................................ (0.59) (0.46) (0.03) 0.00
-------- ------- ------- ---------
Net asset value, end of year .......................................... $ 14.42 $ 12.23 $ 9.29 $ 8.51
======== ======= ======= =========
Total return (a) ...................................................... 22.87 % 27.01 % (6.84)% (14.93)%
Ratios and supplemental data:
Net assets at end of year (in thousands) ............................ $110,803 $42,951 $18,206 $ 2,414
Ratio of expenses to average net assets (b) ......................... 1.05 % 1.30 % 1.00 % 1.00 %
Ratio of net investment income (loss) to average net assets (b) ..... 0.67 % 0.75 % 0.63 % 6.03 %
Portfolio turnover rate (a) ......................................... 63.08 % 92.35 % 4.35 % 100.80 %
</TABLE>
NOTES TO FINANCIAL HIGHLIGHTS:
* Per share information has been computed using average shares outstanding
throughout each year.
See Note 6.
(a) Not annualized for periods of less than one full year.
(b) Annualized for periods of less than one full year.
(c) The inception of this Portfolio was March 1, 1994.
(d) The inception of this Portfolio was January 3, 1995.
(e) The inception of this Portfolio was May 1, 1995.
(f) The inception of this Portfolio was May 1, 1996.
(g) The inception of this Portfolio was January 2, 1997.
(h) The inception of this Portfolio was January 2, 1998.
(i) The inception of this Portfolio was May 1, 1998.
The notes to the financial statements are an integral part of this report.
1998 ANNUAL REPORT 105
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 1 -- ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
The WRL Series Fund, Inc. (collectively referred to as the "Fund" and
individually as a "Portfolio") 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 serves
as a funding vehicle for the Separate Accounts of Western Reserve Life Assurance
Co. of Ohio ("WRL") and certain of its affiliates. See the prospectus and the
Statement of Additional Information for a description of each portfolio's
investment objective.
The following is a summary of significant accounting policies followed
consistently by the Fund in accordance with generally accepted accounting
principles. The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
A. VALUATION OF INVESTMENTS
The securities held by the Money Market Portfolio are valued on the basis of
amortized cost which approximates market value.
Securities held by the remaining Portfolios are valued at market value, except
for short-term debt securities. Securities are valued at the last reported sales
price on the securities exchange on which the issue is principally traded, or if
no sale is reported for a stock, the latest bid price is used. Stocks traded in
the over-the-counter market are valued at the last quoted bid prices. Bonds are
valued using prices quoted by independent pricing services. Short-term debt
securities maturing in 60 days or less are valued based on amortized cost, which
approximates market value. Other 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.
B. SECURITIES 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. Dividend income is recorded on
the ex-dividend date except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date. Interest
income, including amortization of premium and accretion of discount, is accrued
daily, commencing on the settlement date.
C. FOREIGN CURRENCY TRANSLATION
The accounting records of the Fund are maintained in U.S. dollars. Securities
and other assets and liabilities denominated in foreign currencies are
translated into U.S. dollars at the closing exchange rate each day. The cost of
foreign securities is translated at the exchange rate in effect when the
investment is acquired. The Fund combines fluctuations from currency exchange
rates and fluctuations in market value when computing net realized and
unrealized gain or loss from investments. Net foreign currency gains and losses
resulting from changes in exchange rates include foreign currency gains and
losses between trade date and settlement date of investment securities
transactions, gains and losses on forward foreign currency contracts and the
difference between the amounts of interest and dividends recorded in the
accounting records in U.S. dollars and the amounts actually received. Foreign
denominated assets may involve risks not typically associated with domestic
transactions including unanticipated movements in exchange rates, the degree of
government supervision and regulation of security markets and the possibility of
political or economic instability.
D. FORWARD FOREIGN CURRENCY CONTRACTS
The Fund is authorized to enter into forward foreign currency contracts for the
purpose of hedging against exchange risk arising from current or anticipated
investments in securities denominated in foreign currencies. Forward foreign
currency contracts are valued at the contractual forward rate and are marked to
market daily, with the change in market value recorded as an unrealized gain or
loss. When the contracts are closed the Portfolios record a realized gain or
loss. The open forward currency contracts at December 31, 1998, are listed in
Note 5. Risks may arise from the changes in market value of the underlying
instruments and from the possible inability of counterparties to meet the terms
of their contracts.
E. FUTURES CONTRACTS
The Fund is authorized to enter into stock index or U.S. Treasury securities
futures contracts. Futures contracts are valued at the settlement price
established each day by the board of trade or exchange on which they are traded.
The underlying face amounts at value of any open futures contracts at December
31, 1998, are listed in Note 5. The variation margin receivable or payable, as
applicable, is included in the accompanying Statement of Assets and Liabilities.
The primary risk associated with the use of futures contracts is imperfect
correlation between the
106 WRL SERIES FUND, INC.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 1 -- (CONTINUED)
change in the value of the futures contracts and the market value of the
securities held by the Portfolio.
F. SECURITIES LENDING
The Fund derives income from its securities lending activities. For securities
loaned, collateral values are continuously maintained at not less than 100 % by
pricing both the securities loaned and the collateral daily. During the year
ended December 31, 1998, the following amounts of income, net of related
expenses, resulting from securities lending activities are included in interest
income:
<TABLE>
<CAPTION>
PORTFOLIO INCOME
- ----------------------------------- -------
<S> <C>
Bond .............................. $ 72
Growth ............................ 305
Global ............................ 412
Strategic Total Return ............ 203
Emerging Growth ................... 458
Aggressive Growth ................. 152
Balanced .......................... 81
Growth & Income ................... 17
Tactical Asset Allocation ......... 89
C.A.S.E. Growth ................... 35
Value Equity ...................... 13
</TABLE>
G. 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 provision 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.
Reclassifications between undistributed net investment income ("UNII"),
undistributed net realized capital gains ("UNCG") and additional paid-in capital
accounts are made to reflect income and gains available for distribution under
Federal tax regulations. Net investment income, net realized gains and net
assets were not effected by these reclassifications.
The Portfolios and the amounts of the reclassifications are as follows:
<TABLE>
<CAPTION>
PORTFOLIO UNII UNCG
- ----------------------------------- ------------ -------------
<S> <C> <C>
Growth ............................ $ (3,397) $ 3,397
Global ............................ (17,536) 17,536
Strategic Total Return ............ 243 (243)
Aggressive Growth ................. 10,595 (10,595)
Balanced .......................... (635) 635
Growth & Income ................... 424 (424)
Tactical Asset Allocation ......... 862 (862)
C.A.S.E. Growth ................... 8,365 (8,365)
Global Sector ..................... 95 (95)
Value Equity ...................... 2,107 (2,107)
International Equity .............. (27) 27
U.S. Equity ....................... 3,555 (3,555)
Third Avenue Value ................ 292 (292)
</TABLE>
In addition, reclassifications were made in the Global and Emerging Growth
Portfolios for $ 13,496 and $ 2,434, respectively, increasing UNII and
decreasing additional paid-in capital.
H. DIVIDENDS AND DISTRIBUTIONS
Dividends of the Money Market Portfolio are declared daily and reinvested
monthly. Dividends and capital gains distributions of the remaining Portfolios
are typically 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 the ex-date.
An investment in a real estate investment trust ("REIT") equity security may
result in the receipt of income in excess of the security's earnings. This
excess amount may not be determinable at the time of receipt. Amounts
distributed which are subsequently determined to exceed the security's earnings
would constitute a return of capital to the Fund shareholders for federal income
tax purposes.
I. EXPENSE OFFSET ARRANGEMENT
Fees paid indirectly, in the accompanying Statement of Operations, represent
reductions in custody expenses in lieu of interest
1998 ANNUAL REPORT 107
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 1 -- (CONTINUED)
income earned on incidental uninvested cash balances. Such fees have been added
to custody fees to reflect total Fund expenses.
J. INVESTMENT RISK
There are certain additional risks involved in investing in REITs rather than a
more diversified portfolio of investments. The Real Estate Securities Portfolio
invests primarily in real estate related securities. As a result, the net asset
value can be expected to change in light of factors affecting the real estate
industry. These factors include economic conditions, changes in zoning laws,
changes in real estate value and property taxes, and changes in interest rates.
The value of the Real Estate Securities Portfolio's shares may fluctuate more
widely than the value of shares of a portfolio that invests in a broader range
of industries.
K. REPURCHASE AGREEMENTS
Subject to a Portfolio's investment restrictions and policies, a Portfolio may
enter into repurchase agreements. The Portfolio, through its custodian, receives
delivery of the underlying securities, the market value of which at the time of
purchase is required to be in an amount equal to at least 100 % of the resale
price.
NOTE 2 -- INVESTMENT ADVISORY AND
TRANSACTIONS WITH AFFILIATES
WRL Investment Management, Inc. ("WRL Management") is the investment adviser
for the Fund. WRL Investment Services, Inc. ("WRL Services") provides the Fund
with administrative and transfer agency services. InterSecurities, Inc. ("ISI")
is the Fund's distributor. WRL Management and WRL Services are wholly owned
subsidiaries of WRL, which is an indirect wholly owned subsidiary of AEGON NV,
a Netherlands corporation. In addition, ISI is an indirect wholly owned
subsidiary of AEGON NV.
A. INVESTMENT ADVISORY FEES
The Portfolios pay advisory fees at the following annual rate to WRL Management
as a percentage of the average daily net assets of the respective Portfolio. WRL
Management currently voluntarily waives its advisory fees to the extent a
Portfolio's normal operating expenses exceed the stated annual limit.
<TABLE>
<CAPTION>
PORTFOLIO ADVISORY FEE EXPENSE LIMIT
- ----------------------------------- -------------- --------------
<S> <C> <C>
Money Market ...................... 0.40 % 0.70 %
Bond .............................. 0.45 % 0.70 %
</TABLE>
<TABLE>
<CAPTION>
PORTFOLIO ADVISORY FEE EXPENSE LIMIT
- ----------------------------------- -------------- --------------
<S> <C> <C>
Growth* ........................... 0.78 % 1.00 %
Global ............................ 0.80 % 1.00 %
Strategic Total Return ............ 0.80 % 1.00 %
Emerging Growth ................... 0.80 % 1.00 %
Aggressive Growth ................. 0.80 % 1.00 %
Balanced .......................... 0.80 % 1.00 %
Growth & Income ................... 0.75 % 1.00 %
Tactical Asset Allocation ......... 0.80 % 1.00 %
C.A.S.E. Growth ................... 0.80 % 1.00 %
Global Sector ..................... 0.80 % n/a
Value Equity ...................... 0.80 % 1.00 %
International Equity .............. 1.00 % 1.50 %
U.S. Equity ....................... 0.80 % 1.30 %
Third Avenue Value ................ 0.80 % 1.00 %
Real Estate Securities ............ 0.80 % 1.00 %
</TABLE>
* The Growth Portfolio's advisory fee reflects 0.80 % of the average daily net
assets for the period prior to May 1, 1998, and 0.775 % of the first $ 3
billion of average daily net assets and 0.75 % of the average daily net
assets in excess of $ 3 billion for the period May 1, 1998 to December 31,
1998.
B. SUB-ADVISERS
WRL Management has entered into sub-advisory agreements with various management
companies ("Sub-Advisers") to provide investment services to the Portfolios and
compensates the Sub-Advisers as described in the prospectus.
Effective January 1, 1998, the Sub-Adviser for the Bond Portfolio changed
from Janus Capital Corporation to AEGON USA Investment Management, Inc. ("AEGON
Management"). AEGON Management is also the Sub-Adviser to the Balanced
Portfolio and is an indirect wholly owned subsidiary of AEGON NV. Scottish
Equitable Investment Management, Ltd. is a Sub-Adviser to the International
Equity Portfolio and is also an indirect wholly owned subsidiary of AEGON NV.
The Sub-Advisers may occasionally place portfolio business with affiliated
brokers of WRL Management or a Sub-Adviser. The Fund has been informed that
brokerage commissions were paid to affiliated brokers of WRL Management or the
Sub-Adviser during the year ended December 31, 1998, as follows:
<TABLE>
<CAPTION>
PORTFOLIO COMMISSIONS
- ---------------------------- ------------
<S> <C>
Emerging Growth ............ $ 1
Aggressive Growth .......... 912
Third Avenue Value ......... 21
</TABLE>
108 WRL SERIES FUND, INC.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 2 -- (CONTINUED)
C. INVESTMENT IN AFFILIATES
The Fund held the following investments in affiliates at December 31, 1998.
<TABLE>
<CAPTION>
MARKET
SHARES COST VALUE
-------- ---------- ----------
<S> <C> <C> <C>
Global Portfolio:
AEGON NV ................ 24 $ 2,276 $ 2,910
Emerging Growth Portfolio:
Providian Financial
Corporation ............. 230 9,858 17,249
</TABLE>
<TABLE>
<CAPTION>
1998
1998 1998 DIVIDEND
PURCHASES SALES INCOME
----------- --------- ------------
<S> <C> <C> <C>
Global Portfolio:
AEGON NV ....................... $ 2,276 $ 0 $ 0
Nortel Inversora S.A. - ADR..... 0 2,970 23
Emerging Growth Portfolio:
Providian Financial
Corporation .................... 7,418 0 22
U.S. Equity Portfolio:
AEGON NV ....................... 2 23 0
Providian Financial
Corporation .................... 0 0.18 0
</TABLE>
D. ADMINISTRATIVE SERVICES
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 Separate Accounts. WRL
Services directly incurs and pays these operating expenses relating to the Fund,
which subsequently reimburses WRL Services.
E. PLAN OF DISTRIBUTION
Effective January 1, 1997, the Fund adopted a Plan of Distribution pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended ("Distribution
Plan") and pursuant to the Distribution Plan, has entered into a Distribution
Agreement with ISI.
Under the Distribution Plan, the Fund, on behalf of the Portfolios, is
authorized to pay to various service providers, as direct payment for expenses
incurred in connection with the distribution of a Portfolio's shares, amounts
equal to actual expenses associated with distributing such Portfolio's shares,
up to a maximum rate of 0.15% on an annualized basis of the average daily net
assets.
ISI has determined that it will not seek payment by the Fund of the
distribution expenses incurred with respect to any Portfolio during the fiscal
year ended December 31, 1998. Prior to ISI seeking reimbursement of future
expenses, policy and contract owners will be notified in advance.
F. DEFERRED COMPENSATION PLAN
Each eligible Director of the Fund who is not an officer or affiliated person as
defined under the Investment Company Act of 1940, as amended, may elect to
participate in the Deferred Compensation Plan for Directors of the WRL Series
Fund, Inc. (the "Plan"). Under the Plan, such directors may elect to defer
payment of a percentage of their total fees earned as a Director of the Fund.
These deferred amounts may be invested in any Portfolio of the IDEX Series Fund,
an affiliate of the Fund. At December 31, 1998, the market value of invested
plan amounts was $ 66. Invested plan amounts and the total liability for
deferred compensation to the Directors under the Plan at December 31, 1998 is
included in Net assets in the accompanying Statement of Assets and Liabilities.
1998 ANNUAL REPORT 109
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 3 -- SECURITIES TRANSACTIONS
Securities transactions for the year ended December 31, 1998, are summarized as
follows:
<TABLE>
<CAPTION>
MONEY
MARKET BOND GROWTH GLOBAL
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
Purchases of securities:
Long-term excluding U.S. Government ............ $ 0 $ 80,468 $ 744,656 $ 789,469
U.S. Government ................................ 1,777,014 453,744 921,603 149,721
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government ............ 0 27,859 871,896 816,646
U.S. Government ................................ 1,765,195 509,307 788,175 100,600
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC EMERGING AGGRESSIVE
TOTAL RETURN GROWTH GROWTH BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
Purchases of securities:
Long-term excluding U.S. Government ............ $ 264,144 $ 677,784 $ 533,491 $ 66,490
U.S. Government ................................ 33,527 8,775,532 0 20,527
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government ............ 219,945 640,486 474,098 52,844
U.S. Government ................................ 50,196 8,775,356 0 15,743
</TABLE>
<TABLE>
<CAPTION>
GROWTH & TACTICAL ASSET C.A.S.E. GLOBAL
INCOME ALLOCATION GROWTH SECTOR
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C>
Purchases of securities:
Long-term excluding U.S. Government ............ $ 88,008 $ 241,894 $ 133,378 $ 4,517
U.S. Government ................................ 10,354 34,668 0 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government ............ 59,142 185,344 121,506 6,057
U.S. Government ................................ 10,937 51,169 0 0
</TABLE>
<TABLE>
<CAPTION>
VALUE INTERNATIONAL THIRD AVENUE
EQUITY EQUITY U.S. EQUITY VALUE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO (a)
<S> <C> <C> <C> <C>
Purchases of securities:
Long-term excluding U.S. Government ................ $ 70,507 $ 28,154 $ 92,791 $ 17,215
U.S. Government .................................... 21,613 0 0 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government ................ 70,581 18,466 40,553 463
U.S. Government .................................... 18,938 0 0 0
</TABLE>
<TABLE>
<CAPTION>
REAL ESTATE
SECURITIES
PORTFOLIO (b)
<S> <C>
Purchases of securities:
Long-term excluding U.S. Government ............ $ 4,311
U.S. Government ................................ 0
Proceeds from maturities and sales of securities:
Long-term excluding U.S. Government ............ 1,649
U.S. Government ................................ 0
</TABLE>
(a) The inception date of this Portfolio was January 2, 1998. (b) The inception
date of this Portfolio was May 1, 1998.
110 WRL SERIES FUND, INC.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
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, 1998, 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 prior to December 31, 1998, (Post-October
Losses Deferred), if applicable, as having been incurred in the following fiscal
year.
<TABLE>
<CAPTION>
PRIOR YEAR
POST-OCTOBER NET CAPITAL LOSS DECEMBER 31, 1998 NET CAPITAL LOSS
LOSSES CARRYFORWARD NET CAPITAL LOSS CARRYFORWARD
PORTFOLIO DEFERRED UTILIZED CARRYFORWARD AVAILABLE THROUGH
- ------------------------------- -------------- ------------------ ------------------- ---------------------------------
<S> <C> <C> <C> <C>
Money Market .................. $ 0 $ 0 $ 0 $ 0
Bond .......................... 0 1,856 4,326 4,065 through December 31, 2002
261 through December 31, 2005
Growth ........................ 0 0 0 n/a
Global ........................ 3,455 0 0 n/a
Strategic Total Return ........ 0 0 0 n/a
Emerging Growth ............... 0 0 0 n/a
Aggressive Growth ............. 0 0 0 n/a
Balanced ...................... 641 0 2,133 December 31, 2006
Growth & Income ............... 0 0 0 n/a
Tactical Asset Allocation ..... 0 0 0 n/a
C.A.S.E. Growth ............... 728 0 0 n/a
Global Sector ................. 132 0 0 n/a
Value Equity .................. 5,333 0 0 n/a
International Equity .......... 203 0 545 105 through December 31, 2005
440 through December 31, 2006
U.S. Equity ................... 0 0 0 n/a
Third Avenue Value ............ 0 0 0 n/a
Real Estate Securities ........ 5 0 75 December 31, 2006
</TABLE>
1998 ANNUAL REPORT 111
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 4 -- (CONTINUED)
The aggregate cost of investments and composition of unrealized appreciation
(depreciation) for Federal income tax purposes as of December 31, 1998, are as
follows:
<TABLE>
<CAPTION>
NET UNREALIZED
FEDERAL TAX UNREALIZED UNREALIZED APPRECIATION
PORTFOLIO COST BASIS APPRECIATION (DEPRECIATION) (DEPRECIATION)
- ----------------------------------- ------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Money Market ...................... $ 168,507 n/a n/a n/a
Bond .............................. 160,238 $ 5,482 $ (142) $ 5,340
Growth ............................ 1,491,590 1,531,762 (1,469) 1,530,293
Global ............................ 762,061 329,418 (18,741) 310,677
Strategic Total Return ............ 496,617 118,177 (9,406) 108,771
Emerging Growth ................... 528,045 337,276 (6,938) 330,338
Aggressive Growth ................. 392,267 183,435 (1,273) 182,162
Balanced .......................... 81,102 14,254 (786) 13,468
Growth & Income ................... 84,555 5,145 (2,094) 3,051
Tactical Asset Allocation ......... 338,988 47,397 (23,677) 23,720
C.A.S.E. Growth ................... 77,291 5,592 (12,643) (7,051)
Global Sector ..................... 10,776 1,552 (877) 675
Value Equity ...................... 156,170 22,466 (21,622) 844
International Equity .............. 27,491 4,452 (1,587) 2,865
U.S. Equity ....................... 93,266 14,007 (2,625) 11,382
Third Avenue Value ................ 17,040 1,282 (2,733) (1,451)
Real Estate Securities ............ 2,575 15 (279) (264)
</TABLE>
112 WRL SERIES FUND, INC.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
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, Global, International Equity and U.S. Equity Portfolios entered
into forward foreign currency contracts, which obligate the Fund to deliver
currencies at specified future dates. The open contracts at December 31, 1998,
are as follows:
<TABLE>
<CAPTION>
VALUE IN NET UNREALIZED
SETTLEMENT U.S. DOLLARS APPRECIATION
CURRENCY BOUGHT (SOLD) DATE BOUGHT (SOLD) (DEPRECIATION)
- ---------------------------------- --------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
Growth Portfolio
British Pound ................... (1,000) 04/07/1999 $ (1,659) $ 10
British Pound ................... (10,800) 05/13/1999 (17,908) (45)
British Pound ................... 3,200 05/13/1999 5,306 (50)
German Deutschemark ............. (225) 01/21/1999 (135) (2)
German Deutschemark ............. (150) 01/22/1999 (90) (1)
German Deutschemark ............. (100) 01/25/1999 (60) 0
German Deutschemark ............. (100) 01/25/1999 (60) 1
German Deutschemark ............. 100 01/25/1999 60 1
German Deutschemark ............. (100) 01/26/1999 (60) 1
German Deutschemark ............. (75) 01/26/1999 (45) 1
Italian Lira .................... (39,000,000) 01/22/1999 (23,620) (54)
---------- -------
Total Growth Portfolio ......... $ (38,271) $ (138)
========== =======
Global Portfolio
Austrian Schilling .............. (780) 01/07/1999 $ (67) $ (1)
British Pound ................... (19,200) 04/07/1999 (31,847) 637
British Pound ................... (17,390) 04/07/1999 (28,845) 306
British Pound ................... (7,110) 05/06/1999 (11,790) (102)
British Pound ................... (4,000) 05/13/1999 (6,632) (17)
Dutch Guilder ................... (9,000) 01/21/1999 (4,802) (94)
Dutch Guilder ................... (5,000) 01/22/1999 (2,668) (22)
Dutch Guilder ................... (35,000) 01/26/1999 (18,680) 28
Dutch Guilder ................... (8,700) 01/27/1999 (4,643) (112)
French Franc .................... (321) 01/29/1999 (58) 0
French Franc .................... 87 01/29/1999 16 0
German Deutschemark ............. (6,000) 01/22/1999 (3,606) 3
German Deutschemark ............. (13,500) 01/25/1999 (8,114) 103
German Deutschemark ............. (5,000) 01/26/1999 (3,005) (59)
</TABLE>
1998 ANNUAL REPORT 113
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 5 -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE IN NET UNREALIZED
SETTLEMENT U.S. DOLLARS APPRECIATION
CURRENCY BOUGHT (SOLD) DATE BOUGHT (SOLD) (DEPRECIATION)
- ---------------------------------------------------------------- --------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
Global Portfolio (continued)
German Deutschemark ........................................... (16,000) 01/27/1999 $ (9,618) $ (215)
German Deutschemark ........................................... (31,000) 01/27/1999 (18,634) (431)
Italian Lira .................................................. 1,628,436 01/04/1999 985 2
Japanese Yen .................................................. 55,580 01/05/1999 493 11
Japanese Yen .................................................. (51,610) 01/05/1999 (458) (10)
Japanese Yen .................................................. (1,600,000) 02/12/1999 (14,276) (431)
Japanese Yen .................................................. (1,000,000) 02/12/1999 (8,922) (306)
Japanese Yen .................................................. (200,000) 02/12/1999 (1,784) (62)
Japanese Yen .................................................. (100,000) 04/07/1999 (899) (138)
Japanese Yen .................................................. 100,000 04/07/1999 899 27
Japanese Yen .................................................. (2,345,000) 04/08/1999 (21,080) (474)
Japanese Yen .................................................. (555,000) 04/21/1999 (4,998) (31)
Japanese Yen .................................................. (1,400,000) 05/20/1999 (12,656) (801)
Swedish Krona ................................................. (30,000) 03/25/1999 (3,728) 43
Swedish Krona ................................................. (59,500) 04/07/1999 (7,398) 45
Swedish Krona ................................................. (20,000) 05/06/1999 (2,490) 77
Swiss Franc ................................................... 306 01/04/1999 223 (1)
Swiss Franc ................................................... (1,600) 04/07/1999 (1,178) 30
Swiss Franc ................................................... (3,000) 04/07/1999 (2,208) (48)
Swiss Franc ................................................... (1,500) 04/08/1999 (1,104) 26
----------- ---------
Total Global Portfolio ....................................... $ (233,572) $ (2,017)
=========== =========
International Equity Portfolio
European Currency Unit ........................................ (680) 1/13/1999 $ (799) $ 1
----------- ---------
Total International Equity Portfolio ......................... $ (799) $ 1
=========== =========
U.S. Equity Portfolio
British Pound ................................................. (14) 1/5/1999 $ (23) $ 0
----------- ---------
Total U.S. Equity Portfolio .................................. $ (23) $ 0
=========== =========
</TABLE>
114 WRL SERIES FUND, INC.
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 5 -- (CONTINUED)
The U.S. Equity Portfolio entered into S&P 500 futures contracts, which
obligate the Fund to settle variation margins in cash daily. Securities with an
aggregate market value of $ 1,594 have been segregated with the custodian to
cover margin requirements for the following open future contracts at December
31, 1998:
<TABLE>
<CAPTION>
NET UNREALIZED
SETTLEMENT VALUE IN APPRECIATION
TYPE CONTRACTS DATE U.S. DOLLARS (DEPRECIATION)
- ----------------------- ----------- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
S&P 500 Index ......... 13 03/19/1999 $ 4,048 $ 152
</TABLE>
The International Equity Portfolio entered into FTSE 100 Index futures
contracts, which obligate the Fund to settle variation margins in cash daily.
Cash in the amount of $ 25 is held by the broker to cover margin requirements
for the following open future contracts at December 31, 1998:
<TABLE>
<CAPTION>
NET UNREALIZED
SETTLEMENT VALUE IN APPRECIATION
TYPE CONTRACTS DATE U.S. DOLLARS (DEPRECIATION)
- ------------------------ ----------- ------------ -------------- ---------------
<S> <C> <C> <C> <C>
FTSE 100 Index ......... 5 03/19/1999 $ 17 $ 17
</TABLE>
NOTE 6 -- FINANCIAL HIGHLIGHTS
The total return set forth in "Financial Highlights" reflects the advisory fee
and all other Portfolio expenses and includes reinvestment of dividends and
capital gains; it does 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 ratio of expenses to average net assets in the Financial Highlights is net
of the advisory fee waiver (see Note 2). Where a Portfolio's period from
inception is less than one year, the ratio of expenses to average net assets is
annualized. Without the advisory fee waived by WRL the ratio for each period
presented would be as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------------
PORTFOLIO 1998 1997 1996 1995 1994
- --------------------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Money Market .......................... * * * * *
Bond .................................. * * * * *
Growth ................................ * * * * *
Global ................................ * * * * *
Strategic Total Return ................ * * * * *
Emerging Growth ....................... * * * * *
Aggressive Growth (a) ................. * * * * 1.18 %
Balanced (a) .......................... * * * * 1.34 %
Growth & Income (a) ................... * * * 1.08 % 1.90 %
Tactical Asset Allocation (b) ......... * * * * **
C.A.S.E. Growth (c) ................... * 1.13 % 1.64 % 4.15 % **
Global Sector (d) ..................... * * * ** **
Value Equity (d) ...................... * * 1.03 % ** **
International Equity (e) .............. 1.96 % 3.12 % ** ** **
U.S. Equity (e) ....................... * 1.49 % ** ** **
Third Avenue Value (f) ................ 1.13 % ** ** ** **
Real Estate Securities (g) ............ 3.34 % ** ** ** **
</TABLE>
1998 ANNUAL REPORT 115
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1998
ALL AMOUNTS IN THOUSANDS
NOTE 6 -- (CONTINUED)
Without the advisory fee waived by WRL and the fees paid indirectly, the ratio
for each period presented would be as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
PORTFOLIO 1998 1997
- ------------------------------------ ------------ ------------
<S> <C> <C>
Money Market ....................... * *
Bond ............................... * *
Growth ............................. * *
Global ............................. * *
Strategic Total Return ............. * *
Emerging Growth .................... * *
Aggressive Growth .................. * *
Balanced ........................... * *
Growth & Income .................... * *
Tactical Asset Allocation .......... * *
C.A.S.E. Growth .................... * 1.14 %
Global Sector ...................... * *
Value Equity ....................... * *
International Equity (e) ........... 1.96 % 3.14 %
U.S. Equity (e) .................... * 1.54 %
Third Avenue Value (f) ............. 1.13 % **
Real Estate Securities (g) ......... 3.34 % **
</TABLE>
* No waiver since the portfolio did not exceed expense limitations.
** Portfolio was not in existence during this period.
(a) The inception date of this Portfolio was March 1, 1994.
(b) The inception date of this Portfolio was January 3, 1995.
(c) The inception date of this Portfolio was May 1, 1995.
(d) The inception date of this Portfolio was May 1, 1996.
(e) The inception date of this Portfolio was January 2, 1997.
(f) The inception date of this Portfolio was January 2, 1998.
(g) The inception date of this Portfolio was May 1, 1998.
NOTE 7 -- SUBSEQUENT EVENT
On January 20, 1999, the Fund received approval from the Securities and Exchange
Commission pursuant to an exemptive order (Rel. No. IC-23657) to substitute
shares of the Fund's Global Portfolio for shares of the Fund's Global Sector
Portfolio. The substitution of shares is expected to occur on May 1, 1999.
116 WRL SERIES FUND, INC.
<PAGE>
SUPPLEMENTARY INFORMATION
Section 270.30d-1 under the Investment Company Act of 1940, as amended, 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:
Approval of a proposal to permit WRL Investment Management, Inc., after
obtaining approval by the Board of Directors of the Fund, to enter into and
materially amend Sub-Advisory Agreements with investment sub-advisers for each
Portfolio of the Fund, without shareholder approval, subject to certain
restrictions.
At a special shareholders/policyholders meeting held on December 15, 1998, the
results of the proposal were as follows:
<TABLE>
<CAPTION>
PORTFOLIO FOR AGAINST ABSTAIN
- ----------------------------------- ------ --------- --------
<S> <C> <C> <C>
Money Market ...................... 87 % 9 % 4 %
Bond .............................. 87 % 9 % 4 %
Growth ............................ 85 % 10 % 5 %
Global ............................ 85 % 9 % 6 %
Strategic Total Return ............ 88 % 7 % 5 %
Emerging Growth ................... 85 % 9 % 6 %
Aggressive Growth ................. 87 % 9 % 4 %
Balanced .......................... 88 % 6 % 6 %
Growth & Income ................... 88 % 7 % 5 %
Tactical Asset Allocation ......... 89 % 7 % 4 %
C.A.S.E. Growth ................... 87 % 7 % 6 %
Global Sector ..................... 72 % 24 % 4 %
Value Equity ...................... 87 % 8 % 5 %
International Equity .............. 85 % 10 % 5 %
U.S. Equity ....................... 92 % 6 % 2 %
Third Avenue Value ................ 89 % 6 % 5 %
Real Estate Securities ............ 88 % 11 % 1 %
</TABLE>
1998 ANNUAL REPORT 117
<PAGE>
This Page for Notes and Computations
- --------------------------------------------------------------------------------
118 WRL SERIES FUND, INC.
<PAGE>
WRL SERIES FUND, INC.
OFFICE OF THE WRL SERIES FUND
570 Carillon Parkway
St. Petersburg, FL 33716
1-800-851-9777
DISTRIBUTOR:
InterSecurities, Inc.
570 Carillon Parkway
St. Petersburg, FL 33716
CUSTODIAN:
Investors Bank & Trust Company
200 Clarendon Street
16th Floor
Boston, MA 02116
INVESTMENT ADVISER:
WRL Investment Management, Inc.
570 Carillon Parkway
St. Petersburg, FL 33716
SUB-ADVISERS:
Janus Capital Corporation Scottish Equitable Investment
100 Fillmore Street Management Limited
Denver, CO 80206 Edinburgh Park
Edinburgh EH12 9SE, Scotland
Luther King Capital
Management Corporation AEGON USA
301 Commerce Street Investment Management, Inc.
Suite 1600 4333 Edgewood Road, N.E.
Fort Worth, TX 76102 Cedar Rapids, IA 52449
Federated Investment Counseling Van Kampen Asset
Federated Investors Tower Management, Inc.
Pittsburgh, PA 15222-3779 One Parkview Plaza
Oakbrook Terrace, IL 60181
NWQ Investment
Management Company, Inc. Fred Alger Management, Inc.
2049 Century Park East 75 Maiden Lane
4th Floor New York, NY 10038
Los Angeles, CA 9006
J.P. Morgan Investment
Meridian Investment Management Inc.
Management Corporation 522 Fifth Avenue
12835 East Arapahoe Road New York, NY 10036
Tower II, Penthouse
Englewood, CO 80112 Dean Investment Associates
2480 Kettering Tower
EQSF Advisers, Inc. Dayton, OH 45423-2480
767 Third Avenue
New York, NY 10017-2023 GE Investment
Management Incorporated
C.A.S.E. Management, Inc. 3003 Summer Street
5355 Tower Center Road Stamford, CT 06905
Suite 702
Boca Raton, FL 33486
INDEPENDENT ACCOUNTANTS:
PricewaterhouseCoopers LLP
160 Federal Street
Boston, MA 02110
[WRL LOGO]
INVESTMENT ADVISER
WRL INVESTMENT MANAGEMENT, INC.
DISTRIBUTOR: INTERSECURITIES, INC.
570 CARILLON PARKWAY
ST. PETERSBURG, FL 33716
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED
BY A PROSPECTUS.
February 1999
ACC00002-2/99
