<PAGE>
SOLID ANSWERS FOR A CHANGING WORLD-Registered Trademark-
SERIES FUND
ANNUAL REPORT
- --------------------------------------------------------------------------------
BRINGING YOU A WORLD OF OPPORTUNITY
- --------------------------------------------------------------------------------
DECEMBER 31, 1996
REPRESENTING THE PORTFOLIOS OF:
- MASTERS VARIABLE ANNUITY
- OPPORTUNITY FIXED & VARIABLE ANNUITY
- WALL STREET SERIES VUL 100, 220, & 500
<PAGE>
FORTIS SERIES FUND, INC.
ANNUAL REPORT
- --------------------------------------------------------------------------------
HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. GLOBAL
MONEY GOVERNMENT DIVERSIFIED GLOBAL HIGH ASSET ASSET
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
------ ---------- ----------- ------ ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
NET ASSET VALUE PER SHARE:
Beginning of period............................. $10.83 $11.16 $12.20 $11.30 $9.74 $15.90 $11.42
End of period................................... $10.94 $10.57 $11.70 $11.11 $9.83 $16.99 $12.34
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters Variable
Annuity....................................... +3.75 % +0.82% +2.74% +1.86 % +9.03 % +10.99% +11.20%
Harmony Investment Life......................... +4.38 % +1.43% +3.36% +2.48 % +9.69 % +11.66% +11.88%
Wall Street Series 220/500...................... +3.94 % +1.00% +2.93% +2.05 % +9.22 % +11.19% +11.40%
<CAPTION>
VALUE
SERIES
----------
<S> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
NET ASSET VALUE PER SHARE:
Beginning of period............................. $ 10.27
End of period................................... $ 11.38
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters Variable
Annuity....................................... +10.49%
Harmony Investment Life......................... +10.92%
Wall Street Series 220/500...................... +10.61%
</TABLE>
<TABLE>
<CAPTION>
S&P BLUE
GROWTH & 500 CHIP GLOBAL GROWTH INTERNATIONAL AGGRESSIVE
INCOME INDEX STOCK GROWTH STOCK STOCK GROWTH
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
-------- -------- -------- ------ ------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
NET ASSET VALUE PER SHARE:
Beginning of period............................. $12.83 $10.09 $10.07 $15.97 $28.09 $11.27 $12.68
End of period................................... $15.16 $11.47 $11.67 $19.00 $32.59 $12.44 $13.62
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters Variable
Annuity....................................... +19.87% +13.27% +15.20% +17.50% +14.85% +12.48% +6.19%
Harmony Investment Life......................... +20.60% +13.67% +15.73% +18.21% +15.54% +13.16% +6.83%
Wall Street Series 220/500...................... +20.09% +13.36% +15.40% +17.71% +15.05% +12.68% +6.38%
</TABLE>
- --------------------------------------------------------------------------------
OPERATING EXPENSES:*
<TABLE>
<CAPTION>
U.S. GLOBAL
MONEY GOVERNMENT DIVERSIFIED GLOBAL HIGH ASSET ASSET
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
------ ---------- ----------- ------ ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
Investment Advisory and Management Fee............ .30% .46% .47% .75% .50% .48% .90%
Other Expenses.................................... .08% .07% .08% .27% .13% .06% .30%
------ --- --- ------ ------ --- -----
TOTAL FORTIS SERIES OPERATING EXPENSES............ .38% .53% .55% 1.02% .63% .54% 1.20%
------ --- --- ------ ------ --- -----
<CAPTION>
VALUE
SERIES
-----------
<S> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
Investment Advisory and Management Fee............ .70%
Other Expenses.................................... .17%
---
TOTAL FORTIS SERIES OPERATING EXPENSES............ .87%
---
</TABLE>
<TABLE>
<CAPTION>
S&P BLUE
GROWTH & 500 CHIP GLOBAL GROWTH INTERNATIONAL AGGRESSIVE
INCOME INDEX STOCK GROWTH STOCK STOCK GROWTH
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
-------- -------- -------- ------ ------ ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD ENDED DECEMBER 31, 1996:
Investment Advisory and Management Fee............ .68% .40% .90% .70% .62% .85% .70%
Other Expenses.................................... .08% .39% .23% .09% .05% .30% .08%
--- --- -------- ------ ------ ----- ---
TOTAL FORTIS SERIES OPERATING EXPENSES............ .76% .79% 1.13% .79% .67% 1.15% .78%
--- --- -------- ------ ------ ----- ---
</TABLE>
* Represents the annualized expenses of the series itself, without the expenses
associated with the variable annuities or variable universal life insurance
policies.
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of the fund's
performance during the past year,
refer to the Highlights box. The
letter from the portfolio managers
and presidents provide a more
detailed analysis of the fund and
financial markets.
The charts alongside the letter are
useful because they provide more
information about your investments.
The top holdings chart shows the
types of securities in which the
portfolios invest, and the pie chart
shows a breakdown of the portfolios'
assets by sector. The portfolio
changes show the investment
decisions your portfolio manager has
made over the period in response to
changing market conditions.
The performance chart graphically
compares the portfolios' total
return performance with a selected
investment index. Remember, however,
that an index may reflect the
performance of securities the
portfolio may not hold. Also, the
index does not deduct investment
advisory fees and other fund
expenses, whereas your portfolio
does. Individuals cannot buy an
unmanaged index fund without
incurring some charges and expenses.
This report is just one of several
tools you can use to learn more
about your investment in the Fortis
Family of Products and Services.
Your investment representative, who
understands your personal financial
situation, can best explain the
features of your investment and how
it's designed to help you meet your
financial goals.
----------------------------------------------------------------------
<TABLE>
<S> <C>
CONTENTS
Letter to Shareholders............................ 2
Schedules of Investments
Money Market Series............................. 19
U.S. Government Securities Series............... 20
Diversified Income Series....................... 22
Global Bond Series.............................. 26
High Yield Series............................... 28
Asset Allocation Series......................... 32
Global Asset Allocation Series.................. 37
Value Series.................................... 42
Growth & Income Series.......................... 44
S&P 500 Series.................................. 47
Blue Chip Stock Series.......................... 52
Global Growth Series............................ 55
Growth Stock Series............................. 59
International Stock Series...................... 61
Aggressive Growth Series........................ 64
Statements of Assets and Liabilities.............. 66
Statements of Operations.......................... 68
Statements of Changes in Net Assets............... 70
Notes to Financial Statements..................... 73
Independent Auditors' Report...................... 87
Directors and Officers............................ 88
Products and Services............................. 89
</TABLE>
1
<PAGE>
Photo
FORTIS SERIES FUND, INC. ANNUAL REPORT,
DECEMBER 31, 1996
DEAR SHAREHOLDER:
1996. What a year for the stock and bond markets alike! Often one market or the
other will dominate the news depending on its performance; this year, both
received attention albeit for different reasons. It's interesting to note that
of the record-breaking performance on the Standard & Poor's 500 Stock Index,
more than half resulted from just 25 stocks. On the other hand, we find the bond
market reacting very negatively to an unexpectedly strong U.S. economy. What
this information tells us is that we must weigh all of the contributing factors
before making investment decisions. We must identify and remain true to our
long-term goals. In so doing, it's critical to work closely with your
representative who, through extensive training, experience and education, can
help you determine the investment portfolio(s) that will best match your needs.
Along the same vein, we were also pleased to mark history this year by bringing
you three more investment selections. On May 1, we added the Value Portfolio,
which is managed by Fortis Advisers, Inc.; the S&P 500 Stock Index Portfolio,
which is subadvised by Dreyfus; and the Blue Chip Stock Portfolio, which is
subadvised by T. Rowe Price. The addition of these portfolios brings your
investment choices to 15, and the number of experienced money management firms
to six. At this time, we're pleased to offer you the annual review of the Fortis
Series Fund for the 12-month investment period ended December 31, 1996.
EQUITY MARKET REVIEW AND OUTLOOK
Many of the world's equity (or stock) markets performed favorably in 1996, as
measured by the 11.7 percent gain registered by the Morgan Stanley Capital
International World Index. The United States was the best-performing major
market during the year, with a return of 22.98 percent as measured by the
Standard & Poor's 500 Stock Index. The one major market that significantly
lagged in performance during the year was Japan, which registered a decline in
U.S. dollar terms. Key factors in the market's performance over the past several
years have been favorable global liquidity, (or the amount of money available
for investment in financial assets) and a highly favorable economic background.
A moderately-growing global economy has led to slowing inflation and lower
interest rates outside the United States. Financial markets are sensitive to
trends in inflation because it impacts both the level of interest rates and the
valuation placed on common stocks. Global inflation has declined from 7 percent
in 1995 to an expected level of below 4 percent in 1997. Low levels of inflation
going forward will help maintain a positive environment for financial assets.
The outlook for financial market performance in 1997 is as always uncertain;
however, many of the positive trends that have been in place for the past
several years are likely to persist. The driving forces of the equity market
returns have been strongly growing corporate earnings and higher valuation
levels for equities. Both of these factors are likely to moderate as we enter
1997.
The concerns over slowing corporate earnings growth are legitimate and will
likely impact individual stock performance in 1997. The bull market, which began
in 1991, is one of the longest on record. Although the major indices such as the
S&P 500 and the Dow Jones Industrial Average have not experienced a significant
correction since 1991, other sectors of the market have. Both the mid-sized and
smaller high growth company sectors have been through sharp corrective phases
during 1992, 1994, and the second half of 1996. This corrective process has
helped reduce some of the excesses in the valuation for growth-oriented
equities.
Looking forward, we feel that many mid-size growth companies offer reasonable
value relative to their respective growth rates. In general, the outlook for
1997 must
2
<PAGE>
incorporate a degree of volatility in the stock market. Investors will likely
react fairly strongly to changes in the outlook for corporate earnings growth,
inflation, or changes in interest rates.
The longer term outlook remains favorable for equity investors. We have been in
a most favorable period for investment with slow-growing economies and low
levels of inflation. This scenario is likely to persist for some time and should
provide a favorable backdrop for equity investors.
FIXED INCOME MARKET REVIEW AND OUTLOOK
When 1996 began, we expected a marginally expanding U.S. economy with minimal
inflationary pressures. In addition, expectations were that the Federal Reserve
would lower short-term rates and that the federal budget would be balanced. But
these favorable views unwound quickly when budget negotiations failed to make
progress on the deficit, and the February employment statistics contributed to a
changed market outlook with interest rates moving higher. As the bond market
started to slide, we made swift defensive adjustments to the portfolios, a
strategy that paid-off as bonds continued to trend lower through the first half
of 1996.
Early in the fourth quarter, economic indicators suggested that the economy was
slowing and the bond market rallied, only to reverse course once again to end
the year with slightly higher yields. In general, 1996 was a good performance
year for spread product (mortgages and government agency notes) when compared to
comparable maturity treasuries. These sectors had greater returns than did
comparable treasury securities as yield spreads held steady or tightened.
Our view is that the 1997 economy will continue to expand and inflation will
continue to be under control. On a global basis, we concur with those who
subadvise our global bond portfolio: due to the structural problems many
countries face in conjunction with economic growth, bond yields around the world
are not likely to decline significantly from current levels.
As always, the identification of improving situations and undervalued securities
is done through extensive credit research by our portfolio managers and in-house
research staff. We believe the quality of our research should give our
portfolios a performance advantage.
YOU ARE IMPORTANT TO US.
Thank you for your investment with Fortis. You trust us to manage your money
with our utmost in skill, knowledge and experience, and we accept that charge
with confidence. Your ongoing commitment is important to us, and we look forward
to serving you in the future.
Sincerely,
<TABLE>
<S> <C> <C>
[SIGNATURE] [SIGNATURE] [SIGNATURE]
Dean C. Kopperud James S. Byrd Howard H. Hudson
President Vice President, Equities Vice President, Fixed Income
</TABLE>
Dated: January 14, 1997
3
<PAGE>
PORTFOLIO ALLOCATION
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Banks 15.0%
Diversified Finance 19.3%
Captive Equipment Finance 13.5%
Utilities - Electric 9.2%
Captive Auto Financing 9.0%
Consumer Financing 17.5%
Food - Grocery, Miscellaneous 6.6%
Brokerage and Investment 4.8%
Tobacco 4.4%
Cash Equivalents/Receivables 0.7%
</TABLE>
FORTIS SERIES FUND: MONEY MARKET PORTFOLIO
AS THE MOST CONSERVATIVE SUBACCOUNT, THIS PORTFOLIO IS DESIGNED FOR INVESTORS
SEEKING LIQUIDITY AND STABLE PRINCIPAL. ACCORDINGLY, THE MONEY MANAGERS CHOOSE
HIGH-QUALITY, SHORT-TERM MONEY MARKETS AND U.S. GOVERNMENT SECURITIES.
REVIEW
When the year began, we expected short-term rates to decline due to a weakening
economy. Our forecast proved accurate, initially evidenced by 60-day commercial
paper rates, which fell by nearly half of a percentage point by mid-February.
While signs of an economic slowdown also prompted the Federal Reserve Bank to
lower the federal funds rate, the drop in market rates was short-lived. The
unexpectedly strong February employment report and subsequent economic data
caused rates to retrace most of their decline by the end of March.
After the volatility of the first quarter, short-term rates were relatively
stable over the next nine months, reflecting a moderately growing economy with
low inflation. This condition supported the Fed's decision to leave the federal
funds rate unchanged through year-end.
In 1996, the portfolio's return was 5.17 percent, down from 5.71 percent in 1995
when short-term rates were higher. During the year, the portfolio's yield
followed a pattern similar to that of the market: it declined in the first
quarter; rose in the second quarter; and leveled off over the last half of the
year.
Our strategy throughout the year was to keep the fund's average maturity between
50 and 60 days. This strategy helped us take advantage of higher yields on
longer maturities during a period in which we did not anticipate rates to rise.
In December, we shortened the average maturity to take advantage of the higher
yields available on shorter maturities due to year-end pressures. At the close
of this reporting period, the fund was 100 percent invested in high quality
securities with an average maturity of 45 days.
OUTLOOK
Recently there have been indications that the economy is more robust than we had
expected. In the event that growth accelerates, we will lower the fund's average
maturity in anticipation of higher short-term rates. However, our current view
of 1997 is that the economy will continue to expand at a real growth rate
between 2.5 percent and 3 percent, with inflation this year at about 3 percent
to 3.5 percent.
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
FNMAs 21.1%
U.S. Treasury Securities 34.1%
Other Direct Federal Obligations 14.2%
Cash Equivalents/Receivables 12.9%
GNMAs 15.3%
Other 2.4%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Bond (6.875%) 2006 9.9%
2. U.S. Treasury Note (6.375%) 2001 9.4%
3. TVA Global (6.375%) 2005 9.1%
4. GMNA (7.00%) 2026 8.1%
5. FHLB Note (7.31%) 2004 5.1%
6. FNMA Global Note (6.85%)2000 4.4%
7. U.S. Treasury Note (6.50%) 2001 4.1%
8. U.S. Treasury Note (6.25%) 2001 3.5%
9. FNMA (7.00%) #250345 2025 2.9%
10. FNMA (7.00%) #307055 2025 2.9%
</TABLE>
FORTIS SERIES FUND: U.S. GOVERNMENT SECURITIES PORTFOLIO
THIS PORTFOLIO IS DESIGNED FOR CONSERVATIVE INVESTORS SEEKING A STRONG TOTAL
RETURN, AS WELL AS A RELATIVELY HIGH LEVEL OF CURRENT INCOME. IT FOCUSES ITS
INVESTMENTS IN U.S. GOVERNMENT BONDS, TREASURIES AND MORTGAGE-BACKED SECURITIES.
REVIEW
The bond market began 1996 with the 30-year treasury bond (long bond) yielding
5.95 percent. In addition, expectations were that the Federal Reserve would
lower short-term rates and that the federal budget would be balanced. These
favorable views unwound quickly when budget negotiations failed to make progress
on the deficit, the February employment statistics contributed to a changed
market outlook, and interest rates moved higher.
During the year's second and third quarters, the long bond essentially traded in
a range from 6.70 percent to 7.20 percent. Early in the fourth quarter, economic
indicators suggested that the economy was slowing and the bond market responded
by rallying to a 6.35 percent yield on the long bond. It then reversed course
and ended the year with a 6.64 percent yield. In general, 1996 was a good year
for returns for spread product (mortgages and government agency notes) when
compared to comparable maturity treasuries. These sectors had greater returns
than did comparable treasury securities as yield spreads held steady or
tightened.
We began 1996 with a portfolio duration of approximately five-and-a-half years.
(Duration is a measure of the portfolio's average maturity, and, subsequently,
its sensitivity to changes in interest rates.) Upon release of February's
stronger than expected payroll numbers, however, we shortened duration to help
minimize volatility. As of year end, the portfolio's duration continued to be
under five years. Believing that the market was in a trading range, we made only
modest adjustments to the portfolio's duration over the last six months of this
period. Our strategy was to lengthen the portfolio's duration as interest rates
moved toward the high end of the trading range, and shorten the portfolio as
interest rates approached the low end of the trading range. This strategy allows
the portfolio to have a stronger response than the market to a rally, and a
milder reaction to a sell-off.
We also reduced our exposure to the mortgage market in August, after
successfully overweighting it earlier in the year. We have kept it to around
one-third of the portfolio since. We continue to have 20 percent of our holdings
in agency notes, since we feel the extra yield these securities offer over
treasuries will enhance the total rate of return. These combined efforts
produced a positive return of 2.21 percent. The portfolio, however, did lag the
3.28 percent return of its benchmark, the Lehman Brothers Intermediate
Government Bond Index.
OUTLOOK
Going forward, we believe the economy will continue to expand through 1997 at a
rate of about 2.5 percent to 3 percent, after inflation. We also expect
inflation to remain modest, albeit somewhat higher than 1996's rate of just 2.6
percent. As a result, we look for the market to trade in a range, with the
30-year treasury bond yielding between 6.5 percent to 7.25 percent.
VALUE OF $10,000 INVESTED MARCH 24, 1987
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS U.S. GOVERNMENT
INTERMEDIATE GOV'T*** SECURITIES SERIES
<S> <C> <C> <C>
3/24/87 10,000 10,000
87 10,240 9,994
88 10,895 10,630
89 12,277 12,027
90 13,450 12,981
91 15,348 14,845
92 16,411 15,756
93 17,751 17,245
94 17,464 16,135
95 19,996 19,166
96 $20,652 $19,588
U.S. GOVERNMENT SECURITIES SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
MARCH 24,
1 YEAR 5 YEAR 1987**
+2.21% +5.70% +7.12%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of government bonds with an average maturity of three to
four years.
5
<PAGE>
PORTFOLIO ALLOCATION
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Asset Backed Securities 25.7%
U.S. Government Agencies 21.9%
Corporate Bonds - Investment Grade 21.4%
U.S. Treasury Securities 17.5%
Corporate Bonds - Non-Investment Grade 13.2%
Cash Equivalent/Receivables 0.3%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. US Treasury Note (7.00%) 2006 5.6%
2. US Treasury Bond (6.50%) 2006 4.8%
3. GNMA (9.00%) 2020 3.2%
4. US Treasury Bond (6.75%) 2026 2.9%
5. FNMA Remic (7.00%) 2020 2.8%
6. FNMA (7.00%) 2025 2.7%
7. Oakwood Mortgage Investors, Inc. (7.10%) 2020 2.3%
8. Transcontinental Gas Pipeline (7.25%) 2026 2.3%
9. DLJ Mtg Acceptance Corp., (8.50%) 2001 2.1%
10. GNMA (7.50%) 2022 2.0%
</TABLE>
FORTIS SERIES FUND: DIVERSIFIED INCOME PORTFOLIO
THIS PORTFOLIO IS DESIGNED ESPECIALLY FOR THOSE PEOPLE INTERESTED IN SEEKING
INCOME FROM BOTH GOVERNMENT SECURITIES AND CORPORATE BONDS. THE MAJORITY OF THE
PORTFOLIO WILL PURSUE HIGH-QUALITY CORPORATE BONDS AND U.S. GOVERNMENT
SECURITIES. A PORTION MAY BE INVESTED IN DIVIDEND-PAYING STOCKS AND LOWER-RATED
CORPORATE BONDS FOR ADDED OPPORTUNITY.
REVIEW
A difficult year for bonds, 1996 took a toll on fixed income markets, in
general. The Salomon Brothers Broad Investment Grade Index ended the year with a
3.62 percent return, and the Lehman Brothers Aggregate Index with a 3.63 percent
return. While down significantly from a year ago, the return on this portfolio
exceeded these fixed income indexes by more than 0.5 percent. The following
information details our course of action throughout the year.
Our investment strategy entering 1996 was based on our outlook for a marginally
expanding U.S. economy with little or no inflationary pressure. Accordingly, we
positioned our portfolio to reflect our positive view on bonds. The portfolio
duration was just over five years when the strong February employment statistics
suggested a more vigorous economy. (Duration is a measure of the portfolio's
average maturity, and, subsequently, its sensitivity to changes in interest
rates.) As the bond market started to sell-off, we made a swift downward
adjustment to the duration that paid off as the market continued to trend lower
through the first half of 1996.
For most of the second half of the year, we maintained the duration of the
portfolio between 4.5 and 4.75 years as the market traded in a range. In
December 1996, we lengthened the duration of the portfolio to approximately 5.75
years, which we deemed to be about average within our competitive universe or
neutral for strategic reasons.
In 1996 we reduced our exposure to governments and agencies to overweight
sectors that offered higher yields, such as corporate bonds and asset-backed
securities. Strong fundamentals and higher demand for yield promised a higher
performance in these market areas, and indeed these sectors turned out to be the
highest performing for the year. In our quest for yield, we have taken a more
conservative approach by limiting our exposure to lower-quality bonds.
OUTLOOK
Our view is that the 1997 economy will continue to expand and inflation will
continue to be under control. Should this forecast prove true, interest rates
are likely to move within trading ranges determined by the strength of the
economic data releases. Our strategy in this scenario will be to lengthen the
portfolio duration when rates approach what we perceive to be the high end of
the range, and shorten it when rates approach the lower end. This strategy
allows the portfolio to have a stronger response than the market to a rally, and
a milder reaction to a sell-off.
We will continue to overweight corporate bonds and asset-backed securities, as
we believe that corporate profits will remain positive and demand for yield will
continue. Our main focus in corporate bonds will be on industry sectors that
present improving fundamentals and lower business and event risks.
Identification of improving situations and undervalued securities is done
through extensive credit research by our portfolio managers and in-house
research staff. We believe the quality of our research should give the portfolio
a performance advantage.
VALUE OF $10,000 INVESTED MAY 2, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
AGGREGATE BOND*** DIVERSIFIED INCOME SERIES
<S> <C> <C>
5/2/88 10,000 10,000
88 10,454 10,390
89 11,973 11,668
90 13,046 12,704
91 15,133 14,567
92 16,254 15,598
93 17,838 17,588
94 17,333 16,670
95 20,535 19,548
96 $21,152 $20,359
DIVERSIFIED INCOME SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR 5 YEAR MAY 2, 1988**
+4.15% +6.92% +8.55%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of government, corporate and mortgage-backed securities
with an average maturity of approximately nine years.
6
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 20.6%
Denmark 16.9%
Canada 11.0%
Spain 10.4%
Germany 9.3%
Italy 7.6%
United Kingdom 4.7%
Other 4.7%
Austria 3.7%
Netherlands 3.4%
Receivables/Cash Equivalents 7.7%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Kingdom of Denmark (8.00%) 2003 10.9%
2. Bonos Y Obligation Del Estado (10.5%) 2003 10.4%
3. U.S. Treasury Note (7.75%) 2000 10.3%
4. Buoni Poliennali Del Tesoro Tesoro (9.50%) 2001 7.6%
5. Canadian Government (7.25%) 2001 6.4%
6. United Kingdom Treasury (8.75%) 2017 4.7%
7. Canadian Government (7.00%) 2001 4.6%
8. Kingdom of Denmark (8.00%) 2001 3.8%
9. Republic of Austria (7.875%) 2002 3.7%
10. General Electric Capital Corp. (8.125%) 2007 3.6%
</TABLE>
FORTIS SERIES FUND: GLOBAL BOND PORTFOLIO
(SUBADVISED BY MERCURY ASSET MANAGEMENT)
BECAUSE IT OFFERS INVESTORS A COMBINATION OF CURRENT INCOME AND GROWTH
POTENTIAL, THIS PORTFOLIO MAKES AN EXCELLENT CHOICE FOR THOSE INVESTORS WHO SEEK
TO ROUND OUT THEIR INVESTMENT SELECTIONS WITH GLOBAL BONDS. THE MONEY MANAGERS
SEEK OUT HIGH QUALITY BONDS AND OTHER FIXED INCOME SECURITIES OFFERED BY
GOVERNMENTS AND CORPORATIONS WORLDWIDE, EMPHASIZING DEVELOPED COUNTRIES.
REVIEW
Superior currency management and bond market selection added value over this
reporting period, helping the Global Bond Portfolio achieve its 3.15 percent
return. Hedging foreign currency exposure into the dollar and the underweighting
of the U.S. and Japanese bond markets (to the benefit of European markets) drove
relative performance.
On the currency side, the portfolio maintained an overweight position in the
United States, with significant foreign currency exposure hedged into the
dollar. On the bond side, the portfolio maintained an underweight exposure to
both the United States and Japanese bond markets while emphasizing the European
markets. Within Europe, the period saw a gradual shift from the core markets
(especially Germany) to the higher-yielding peripheral markets (especially
Denmark and Spain).
OUTLOOK
The best may have been seen of the benign liquidity conditions that have been
supporting financial markets. The currency policy shift in Japan and stronger
than expected economic growth in the United States will produce pressures for
higher interest rates. Within Europe, a broad-based currency (EMU) is likely,
and synchronized fiscal tightening ahead of monetary union will slow economic
growth. Thus, the European bond markets appear to offer the best value on a
global basis. On the currency front, dollar strength will continue on the back
of robust economic growth in the United States.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SALOMON BROS WORLD GLOBAL
GOV'T BOND *** BOND SERIES
<S> <C> <C>
1/3/95 10,000 10,000
95 11,904 11,914
96 12,899 12,289
GLOBAL BOND SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR JANUARY 3, 1995**
+3.15% +10.89%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of world government bonds with maturities of at least
one year.
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 29.3%
Telecommunications 21.0%
Cable Television 11.8%
Leisure Time - Amusements 6.5%
Broadcasting 6.1%
U.S. Treasury Security 6.1%
Cash Equivalents/Receivables 5.3%
Chemicals 5.2%
Energy 5.0%
Health Care Services 3.7%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note, (7.00%) 2006 6.1%
2. Mohegan Tribal Gaming (13.50%) 2002 3.1%
3. Adelphia Communications Corp. (12.50%) 2002 2.4%
4. Silgan Holdings Corp. (13.25%) 2002 2.2%
5. Echostar Communications, Inc. (11.34%) 2004 1.9%
6. United International Holdings, Inc., (14.00%) 1999 1.7%
7. Nextel Communications (13.422%) 2004 1.6%
8. Samsonite Corp. (11.125%) 2005 1.6%
9. American Communications Services, Inc. (13.00%)
2005 1.4%
10. Sterling Chemical Holdings (12.32%) 2008 1.4%
</TABLE>
FORTIS SERIES FUND: HIGH YIELD PORTFOLIO
LONG-TERM INVESTORS, WILLING TO ACCEPT GREATER PRICE FLUCTUATIONS, MAY CHOOSE TO
DIVERSIFY THEIR STOCK OR BOND INVESTMENTS WITH THIS PORTFOLIO OF HIGHER YIELD
BONDS. ITS MONEY MANAGERS INVEST IN A WIDELY DIVERSIFIED PORTFOLIO OF
LOWER-RATED CORPORATE BONDS.
REVIEW
Aided by moderate growth and low inflation in the U.S. economy, a vibrant stock
market, and unflagging demand from fixed income investors, the high yield bond
market marched to a second straight year of double-digit returns in 1996. Over
the last 10 years, the high yield bond sector has been the best-performing class
of fixed income securities. In fact, in terms of 1996 total return performance,
the high yield bond sector was outpaced only by convertible bonds and emerging
market debt.
For the year ended December 31, 1996, the Fortis High Yield Portfolio
outperformed the average total return of the Lehman Brothers High Yield Bond
Index, returning 10.52 percent versus 10.43 percent, and the portfolio
underperformed its Lipper Analytical Services Peer Group. Several factors had an
impact on the portfolio's performance:
* The bonds of Marvel Holdings, which held a 2 percent position in the
portfolio, declined substantially when the company reported poor operating
results and filed for bankruptcy.
* The telecommunications and cable television sectors, our two largest industry
allocations, delivered below-average results due to concerns over capital needs
and the zero-coupon structure of many telecommunication issues.
* The strength of the economy and low default rates generally rewarded the
lowest quality, highest risk sectors of the high yield bond market. In
hindsight, our decision to improve the overall credit quality and trading
liquidity of the portfolio, and thus lessen the portfolio's risk, proved to be
somewhat counterproductive under these market conditions.
After carefully reviewing our strategy for the portfolio, we are currently
maintaining its focus on the telecommunications and cable television sectors,
which we believe, over the long term, will provide the rates of growth necessary
to pay down the debt of the highly-leveraged companies within those industries.
Despite the market's appetite for very low credit quality in 1996, we are not
lowering the current credit quality of the portfolio because we are concerned
that corporate profits may fall below market expectations in the near term.
Finally and most importantly, we have renewed our commitment to stringent credit
analysis and review.
OUTLOOK
The formula for good returns in the high yield bond market appears to be in
place as we begin 1997. Moderate economic growth, low inflation, and a soaring
stock market usually propel lower-rated bond prices higher and yields lower.
Cautionary signals are still present, however. The near-term outlook for
interest rates is higher, a scenario that would negatively affect the market
value of fixed income securities. And U.S. stock prices, which have risen over
50 percent in two years, may embody an overly-optimistic view of corporate
earnings growth.
VALUE OF $10,000 INVESTED MAY 2, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
HIGH YIELD*** HIGH YIELD SERIES
<S> <C> <C>
5/3/98 10,000 10,000
94 10,165 9,925
95 12,150 11,189
96 13,417 12,366
HIGH YIELD SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR MAY 2, 1994**
+10.52% +8.28%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of lower quality, high yield corporate debt securities.
8
<PAGE>
PORTFOLIO ALLOCATION AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Asset Allocation Series
Asset Backed Securities 9.7%
Corporate Bonds - Investment Grade 5.9%
Corporate Bonds - Non-Investment Grade 4.8%
U.S. Government Agencies 9.0%
U.S. Treasury Securities 10.1%
Equity Securities 57.0%
Cash Equivalents/Receivables 3.5%
</TABLE>
TOP HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Microsoft Corp. 1.8%
2. MBNA Corp. 1.8%
3. Green Tree Financial Corp. 1.7%
4. WorldCom, Inc. 1.7%
5. Ericsson (L.M.) Telephone Co., Class B ADR 1.7%
6. Cisco Systems, Inc. 1.6%
7. Oracle Systems Corp. 1.6%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. US Treasury Note (6.50%) 2001 2.7%
2. Oakwood Mortgage Investors, Inc. (7.10%) 2020 1.6%
3. US Treasury Note (6.00%) 1998 1.6%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
STOCK ADDITIONS: Santa Fe Energy Resources,
360 Communications Co. Inc.
Abbott Laboratories Schlumberger, Ltd.
AES Corp. Staples, Inc.
American International Group, Sterling Commerce, Inc.
Inc. Sun International Hotels, Ltd.
Amgen, Inc. Teva Pharmaceutical
Banc One Corp. Industries, Ltd. ADR
Biovail Corp. International Tucson Electric Power Co.
Cardinal Health, Inc. Union Planters Corp.
Centocor, Inc. United States Filter Corp.
ConAgra, Inc. Wackenhut Corp.
Crown Cork & Seal Company, STOCK ELIMINATIONS:
Inc. Adobe Systems, Inc.
Depuy, Inc. Applied Materials, Inc.
Deutsche Telekom ADR Bay Networks, Inc.
Fiserv, Inc. Columbia/HCA Healthcare Corp.
Forest Laboratories, Inc. Disney (Walt) Co.
General Electric Co. News Corp., Ltd. ADR (The)
Heinz (H.J.) Co. Micron Technology, Inc.
Hyperion Telecom (Warrants) Nokia Corp. ADR
Ingram Micro, Inc. Silicon Graphics, Inc.
Lilly (Eli) & Co., Inc. Solectron Corp.
Magna International, Inc. Talbots, Inc.
MGIC Investment Corp. Tandy Corp.
Monsato Co. 3Com Corp.
Noble Affiliates, Inc. U.S. Healthcare
Nuevo Energy Co. Vodafone Group plc
Precision Drilling Corp. Wal-Mart Stores, Inc.
Philip Morris Companies, Inc.
FORTIS SERIES FUND: ASSET ALLOCATION PORTFOLIO
DESIGNED FOR INVESTORS WHO SEEK TOTAL RETURN FROM A BLEND OF GROWTH POTENTIAL
AND CURRENT INCOME. THE PORTFOLIO MANAGERS SELECT A MEDLEY OF U.S. STOCKS, BONDS
AND MONEY MARKETS IN PERCENTAGES THAT MAY VARY WITH CURRENT MARKET CONDITIONS.
REVIEW
In the Asset Allocation Portfolio, the allocation mix is altered as the outlook
for the equity and fixed income markets change. In 1996, this portfolio, due to
its balanced nature, outperformed the bond markets, but realized a return lower
than that of the Standard & Poor's 500 Stock Index. The stock allocation was
increased gradually over the latest period from 45 percent in mid-1996 to
represent 57 percent of the portfolio by the end of the year. Bond holdings
constitute the remaining 40 percent of the portfolio.
STOCKS
The portfolio's equity portion is invested primarily in large capitalization
companies with superior earnings prospects. This year presented interesting
challenges. For the first six months of the year, the retail and
telecommunications sectors enhanced the portfolio's return. However, by the end
of the year, these two sectors actually detracted from performance. Other
holdings in the technology, financial, health care, and energy sectors helped
contribute positively to overall performance.
BONDS
In the bond portion of the fund, we started 1996 with a constructive outlook for
interest rates. This view was based on our forecast of a marginally expanding
U.S. economy with little or no inflationary pressure. Accordingly, we positioned
our portfolio to reflect our positive view on bonds.
However, in March 1996, the economic picture was changed by the February
employment statistics that told of greater strength in the economy than we had
anticipated. We immediately assumed a neutral posture of a 4.5 year duration as
we awaited further evidence of economic strength. That duration adjustment paid
off as the market continued to trend lower through the first half of 1996. For
most of the second half of the year, we maintained the duration of the portfolio
within the range of 4.5 to 4.75 years as the market traded in a range.
Our sector allocation strategy throughout 1996 was to overweight such higher
yielding bonds as corporate bonds and asset-backed securities. We believed that
corporate profits would remain strong and demand for yield would continue. These
sectors turned out to be the highest performing for the year. Within the
corporate sector, we took a more conservative approach in terms of credit
exposure. Although we are permitted to hold up to 30 percent of lower quality
bonds, we limited our exposure to 12 percent to 15 percent.
OUTLOOK
Looking forward, we think the economy will continue to show signs of strength,
and we expect inflationary pressures to remain modest. Should this forecast
prove true, interest rates are likely to move within trading ranges determined
by the strength of the economic data releases. Therefore, we are not favoring a
duration bias in the near term, but will make duration adjustments as we
approach the trading range boundaries.
As always, we will continue to focus on individual security selection, seek a
thorough understanding of each credit to avoid deterioration, and strive to help
the portfolio benefit from improving situations.
VALUE OF $10,000 INVESTED APRIL 1, 1987
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
AGGREGATE BOND + S&P 500 ++ ASSET ALLOCATION SERIES
<S> <C> <C> <C>
5/1/87 10,000 10,000 10,000
87 10,108 8,673 9,426
88 10,906 10,131 9,776
89 12,490 13,322 12,097
90 13,609 12,899 12,341
91 15,787 16,840 15,752
92 16,956 18,130 16,847
93 18,609 19,942 18,496
94 18,082 20,203 18,439
95 21,422 27,780 22,490
96 22,065 34,051 25,302
ASSET ALLOCATION SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR 5 YEAR MAY 1, 1987**
+12.50% +9.94% +10.07%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
+ An unmanaged index of government, corporate, and mortgage-backed securities
with an average maturity of approximately nine years.
++ This is an unmanaged index of 500 common stocks.
9
<PAGE>
PORTFOLIO ALLOCATION AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 48.8%
Long-Term Foreign Bonds-Investment Grade 26.5%
U.S. Treasury Securities 10.5%
Cash Equivalents/Receivables 14.2%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (6.25%) 2000 2.8%
2. U.S. Treasury Note (5.625%) 2001 2.8%
3. U.S. Treasury Note (7.25%) 2004 2.5%
4. U.S. Treasury Note (7.875%) 2004 2.3%
5. German Government (8.50%) 2003 2.0%
6. Italian Government (10.50%) 2000 2.0%
7. German Unity Fund (8.00%) 2002 1.9%
8. United Kingdom Treasury (9.75%) 2002 1.6%
<CAPTION>
Stocks
- -------------------------------------------------------------------
<C> <S> <C>
1. Philips Electronics 1.9%
2. UST Corp. 1.6%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Akzo Nobel NV Addington Resources, Inc.
AT & T Corp. AMR Corp.
Browning-Gerris Industries, Brooklyn Bancorp.
Inc. Ciba-Geigy AG
CSR Limited Comsat Corp.
Echlin, Inc. Cray Research, Inc.
Greenfield Industries, Inc. Data General Corp.
Holderbank Financiere Glaris Gap, Inc.
AG Johnstown America Industries,
ING Groep NV Inc.
Intelidata Technologies, Inc. Koninklijke PTT Nederland NV
Lucent Technologies, Inc. Koninklijke Van Ommeren NV
Matsushita Electric Industrial Kuoni Reisen Holding AG
Co. Labinal S.A.
Mattews (Bernard) Skandinaviskilda Banken A Free
Nippon Telegraph & Telephone Sun Co. Inc.
Corp. Westpac Banking Corp. Ltd.
Novartis AG
Novell, Inc.
Olivetti Group
Penncorp Financial Group, Inc.
Railtrack Group
Reckett & Colman
Repsol S.A.
Scor S.A.
Silicon Graphics, Inc.
Skandia Forsakrings AB
Southern Electric
Sulzer AG
Tandy Corp.
FORTIS SERIES FUND: GLOBAL ASSET ALLOCATION PORTFOLIO
(SUBADVISED BY MORGAN STANLEY ASSET MANAGEMENT)
DESIGNED ESPECIALLY FOR INVESTORS WHO WANT A FLEXIBLE PORTFOLIO THAT SEEKS TOTAL
RETURN FROM A BLEND OF GROWTH POTENTIAL AND CURRENT INCOME FROM AROUND THE
WORLD, INCLUDING THE UNITED STATES. MONEY MANAGERS INVEST IN GLOBAL STOCKS,
BONDS AND MONEY MARKETS IN PERCENTAGES THAT MAY VARY WITH MARKET CONDITIONS.
REVIEW
For the year, as a whole, the portfolio appreciated by 12.72 percent. This
favorably compares to the returns by the portfolio's measures or "benchmarks."
The Morgan Stanley Capital International World Index (stocks) saw a 11.7 percent
return and the Salomon Brothers World Government Bond Index realized an 8.36
percent return.
Contributing to this portfolio's success this year were a number of factors,
including overweighted positions in Canadian bonds, high-yielding European
bonds, the U.S. dollar and sterling currency. An underweight position in
Japanese equities also made a positive contribution. Specific stock selection in
Australia, Germany, Italy, Japan and the United States also benefited the
overall return.
Factors that detracted from the portfolio's performance include a slightly
defensive overall bond duration, an overweighted bond position in the United
Kingdom and selected French equities.
The stance of the bond portion of the portfolio remained little changed
throughout the quarter. Namely, the portfolio was overweighted in Europe at the
expense of the Japanese and U.S. markets, with overall duration slightly shorter
than benchmark. We added to the Canadian bond and currency exposure, slightly
reduced Denmark and built-up relative exposure to the sterling bond market. In
addition, Dutch bonds were sold and Swedish bonds increased.
On the stock or equity side, there were only minor changes in our investment
strategy. The geographic allocation was the result of stock-picking decisions,
and, at the end of this reporting period, the equities were split 40 percent
U.S., 13 percent Japan, 44 percent Europe and 3 percent other.
Cash levels averaged 10 percent during the fourth quarter and were held in
dollar deposits and Treasury bills.
During the fourth quarter, we were satisfied with the portfolio's allocation and
did not make any specific moves to change its balance. As the year closed, the
fixed income portion was held near the 40 percent benchmark, with global
equities around 50 percent.
OUTLOOK
We do not foresee a full-blooded global recovery in 1997, as Europe, Japan and
certain emerging markets have structural problems regarding economic growth,
while bond yields around the world are unlikely to decline significantly from
current levels.
This leaves us cautious on world stock markets generally and cyclicals
specifically after recent relative strength. Our preferred investment
characteristic for 1997 is strong cash generation in a weakish global economy,
which draws us to brandname stocks whose unglamorous growth rates have left them
relatively cheap.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SALOMON BROS. WORLD GLOBAL ASSET
GOV'T BOND + MSCI WORLD INDEX ++ ALLOCATION SERIES
<S> <C> <C> <C> <C>
1/3/95 10,000 10,000 10,000
95 11,904 12,132 11,747
96 12,899 13,830 13,242
GLOBAL ASSET ALLOCATION SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR JANUARY 3,
1995**
+12.72% +15.12%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future
performance. Investment return and principal value
will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
This represents the performance of the Series
itself, without the expenses associated with the
variable annuities or variable universal life
insurance policies.
* SEC defined total returns, including
reinvestment of all dividend and capital
gains distributions.
** Date shares were first offered to the public.
+ An unmanaged index of world government bonds
with maturities of at least one year.
++ An unmanaged index of the world's major
equity markets in U.S. dollars, weighted by
stock market value.
10
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 43.4%
Cash Equivalents/Receivables 10.9%
Banks 6.7%
Food 6.3%
Oil - Crude Petroleum and Gas 5.2%
Chemicals - Specialty 4.7%
Office Equipment and Supplies 4.2%
Real Estate - Investment Trust 4.1%
Telecommunications 3.7%
Utilities - Telephone 3.7%
Electronic Semiconductor 3.6%
Business Services and Supplies 3.5%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Kimco Realty Corp. 2.4%
2. General Electric Co. 2.3%
3. Columbia/HCA Healthcare Corp. 2.3%
4. Exxon Corp. 2.2%
5. ADT, Ltd. 2.2%
6. Comcast Corp. 2.1%
7. Owens Corning 2.0%
8. Mallinckrodt Group, Inc. 1.9%
9. Ameritech Corp. 1.9%
10. Atlantic Richfield Co. 1.9%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Ameritech Corp. AT & T Corp.
Archer-Daniels-Midland Co. Circus Circus Enterprises,
Atlantic Richfield Co. Inc.
BankAmerica Corp. Continuum, Inc.
Cleveland-Cliffs, Inc. Echlin, Inc.
ConAgra, Inc. GTE Corp.
Crown Cork & Seal Co., Inc. H & R Block, Inc.
Enron Corp. Lowe's Companies, Inc.
Finova Group, Inc. Lucent Technologies, Inc.
First Bank System, Inc. Lyondell Petrochemical Co.
Flightsafety International, Mallinckrodt Group, Inc.
Inc. McDonnell Douglas Corp.
Grainger (W.W,), Inc. Mylan Laboratories, Inc.
Heinz (H.J.) Co. Payless ShoeSource, Inc.
IMC Global, Inc. Schlumberger, Ltd.
International Game Technology Solectron Corp.
Johnson & Johnson Stewart And Stevenson
Nynex Corp. Services, Inc.
Pall Corp. Tele Communications, Inc.
Philip Morris Companies, Inc. Unifi, Inc.
Sara Lee Corp.
SBC Communications, Inc.
Sprint Corp.
Unisource Worldwide, Inc.
FORTIS SERIES FUND: VALUE PORTFOLIO
DESIGNED FOR INVESTORS WHO LIKE TO DISCOVER QUALITY-GROWTH INVESTMENT
OPPORTUNITIES AT "BARGAIN" PRICES. THE PORTFOLIO MANAGERS CHOOSE STOCKS WITH
CURRENT PRICES THAT DO NOT NECESSARILY REFLECT THE STOCKS' POTENTIAL VALUE.
REVIEW
As a relatively new addition to the Fortis Series Fund, the Value Portfolio
opened to investors on May 1, 1996. For the eight months ended December 31, the
portfolio achieved a total return of 11.49 percent, compared to 14.53 percent
for the Standard & Poor's 500 Stock Index the portfolio's benchmark.
While satisfactory, the stock market's upward, but choppy, progress was
characterized by wide disparities in the performance of individual stocks and
sectors. For example, technology stocks sold off sharply in the summer, only to
rebound strongly by the end of the year. Although the economy has been strong,
investors remain concerned that the strongest part of the current business
expansion is aging. Consequently, the shares of cyclical companies have been
performing poorly. In contrast, a handful of blue chip stocks have been
performing well because they offer investors predictable earnings growth in an
uncertain environment.
Throughout 1996, we increased our exposure to such "blue chip" investments, and
reduced our exposure to the shares of companies vulnerable to the business
cycle. However, we also remained opportunistic. For example, the sharp decline
in the prices of many technology shares presented an attractive opportunity to
add to our holdings. These purchases appreciated nicely toward the end of 1996.
OUTLOOK
Looking forward, our main concern is that profit margins are near their peak for
this business cycle. With profit margins in the next few years more likely to
decline than rise, earnings growth will probably become scarce. In this
environment, it will become increasingly difficult to identify companies that
will satisfy our primary buy criteria of having accelerating earnings over the
next few years. Accordingly, we will need to rely more heavily on our secondary
criteria, which is to find companies that are reasonably priced in relation to
their long-term growth rates. As a result, our disciplines have led us to invest
more heavily in defensive stocks.
VALUE OF $10,000 INVESTED MAY 1, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** VALUE SERIES
<S> <C> <C>
5/1/96 10,000 10,000
96 $11,453 $11,149
VALUE SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE MAY 1, 1996**
+11.49%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
11
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 29.9%
Cash Equivalents/Receivables 13.6%
Finance Services 10.0%
Natural Gas Transmissions 9.6%
Drugs 9.1%
Utilities - Telephone 8.8%
Banks 4.1%
Oil - Crude Petroleum and Gas 6.9%
Insurance 4.2%
Food 3.8%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Sunamerica, Inc. Convertible Preferred 3.0%
2. PanEnergy Corp. 2.8%
3. Household International, Inc. 2.2%
4. El Paso Natural Gas Co. 2.1%
5. ConAgra, Inc. 2.0%
6. Beacon Properties Corp. 1.9%
7. Philip Morris Companies, Inc. 1.9%
8. United Technologies Corp. 1.9%
9. Minnesota Mining and Manufacturing Co. 1.8%
10. Pharmacia and UpJohn, Inc. 1.8%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Banc One Corp. AMP, Inc.
Beacon Properties Corp. Bell Atlantic Corp.
Chase Manhattan Corp. Browning-Ferris Ind.
ConAgra, Inc. Echlin, Inc.
Crown Cork & Seal Co., Inc. Ethyl Corp.
Convertible Preferred H & R Block, Inc.
Deutsche Telekom ADR JC Penney Company, Inc.
Exxon Corp. Johnson & Johnson
Green Tree Financial Corp. Mercury Finance
Heinz (H.J.) Co. New England Business Service,
Highwoods Properties, Inc. Inc.
Intimate Brands, Inc. Panhandle Eastern Corp.
Lucent Technologies, Inc. Schering-Plough Corp.
Minnesota Mining and Shared Medical Systems Corp.
Manufacturing Co. U.S. HealthCare
Monterey Resources, Inc.
Nuevo Energy Co. Convertible
Preferred
PanEnergy Corp.
Pharmacia and UpJohn, Inc.
Safeco Corp.
Sprint Corp.
Sunamerica, Inc. Convertible
Preferred
Tenneco Inc.
Tranz Rail Ltd.
Union Planters Corp.
United Tech. Corp.
FORTIS SERIES FUND: GROWTH & INCOME PORTFOLIO
THIS PORTFOLIO OFFERS A SOLUTION TO INVESTORS WHO WANT TO COMBINE CONSERVATIVE
GROWTH OPPORTUNITIES WITH INCOME POTENTIAL. IT FOCUSES ON COMPANIES WITH
ATTRACTIVE CURRENT DIVIDEND YIELDS RELATIVE TO THE STANDARD AND POOR'S 500 STOCK
INDEX. THE PORTFOLIO IS WELL DIVERSIFIED WITH EXPOSURE TO MANY SECTORS OF THE
ECONOMY.
REVIEW
During the period under review, the Growth & Income Portfolio performed in line
with the market as measured by the Standard & Poor's 500 Stock Index. The
portfolio's performance was enhanced by selected holdings in the financial,
energy and healthcare sectors. Detracting from performance were positions in the
retail and telecommunications sectors.
The Growth & Income Portfolio concentrates on those sectors in the market that
offer a combination of earnings growth and above average current yields. The
technology sector generally does not provide above average current yields, hence
our underweighted position in this sector.
OUTLOOK
We anticipate a continuation of moderate economic growth, coupled with modest
inflation in the months ahead. This is generally a positive environment for the
investment of financial assets. In reflection of these factors, the stock market
has performed well and is currently accorded somewhat above average valuations.
Therefore, we have slightly above average cash reserves in the portfolio to take
advantage of opportunities as they present themselves.
VALUE OF $10,000 INVESTED MAY 2, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH & INCOME SERIES
<S> <C> <C>
5/2/94 10,000 10,000
94 10,397 10,174
95 14,297 13,196
96 $17,524 $16,035
GROWTH & INCOME SERIES
AVERAGE ANNUAL TOTAL RETURN*
1 YEAR SINCE MAY 2, 1994**
+21.51% +19.36%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
12
<PAGE>
COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Spending 21.8%
Consumer Staples 13.0%
Finance 14.6%
Consumer Discretionary 11.7%
Energy & Related 9.6%
Utilities 9.6%
Health Care 9.1%
Basic Industry 5.5%
Other 2.9%
Cash Equivalents/Receivables 2.2%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. General Electric Co. 2.7%
2. Coca Cola Co. 2.3%
3. EXXON Corp. 2.1%
4. Intel Corp. 1.8%
5. Microsoft Corp. 1.7%
6. Royal Dutch Petroleum 1.6%
7. Merck & Co., Inc. 1.6%
8. Philip Morris Co., Inc. 1.5%
9. International Business Machines 1.4%
10. Johnson & Johnson 1.2%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Allegheny Teledyne, Inc. Bally Entertainment Corp.
Battle Mountain Gold Co. Brown Group, Inc.
CVS Corp. Community Psychiatric Center
Dell Computer Corp. Cons Freightways, Inc.
Dow Jones & Co., Inc. Engehard Corp.
Guidant Corp. Loral Corp.
HFS, Inc. Loral Space & Comm.
Lucent Technologies, Inc. Masco Corp.
Marsh & McLennean Companies Melville Corp.
MBIA Inc. Ogden Corp.
MGIC Investment Corp. Outboard Marine Corp.
Morgan J.P. & Co., Inc. Payless ShoeSource
Seagate Technology Premark Intl Inc.
Union Pacific Resources Group Teledyne, Inc.
US Healthcare, Inc.
Variety Corp.
Yellow Corp.
FORTIS SERIES FUND: S&P 500 STOCK INDEX PORTFOLIO
(SUBADVISED BY DREYFUS)
THIS PORTFOLIO IS DESIGNED ESPECIALLY FOR INVESTORS WHO WANT TO EMULATE THE
TOTAL RETURN OF THE STANDARD & POOR'S 500 STOCK INDEX.
REVIEW
The Fortis S&P 500 Index Portfolio became available on May 1, 1996. For the
eight month period ended December 31, the portfolio realized a total return of
14.29 percent, while the Standard & Poor's 500 Stock Index had a total return of
14.53 percent.
This portfolio is designed to passively replicate the large capitalization
United States equity market as it is represented by the S&P 500 Index. In 1996,
large capitalization equities provided strong returns, outperforming both small
and mid-capitalization stocks.
Among the best-performing groups in the S&P 500 in 1996 were oil and gas
drilling companies, electronics companies, computer software companies and money
center banks. Currently, the Fortis S&P 500 Index Portfolio holds all 500 stocks
in the S&P 500 in direct proportion to their weight in the Index.
OUTLOOK
As a portfolio that mirrors the holdings of an existing stock index, we will
continue to make the appropriate changes in accordance with the portfolio's
investment objective.
VALUE OF $10,000 INVESTED MAY 1, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** S&P 500 SERIES
<S> <C> <C>
5/1/96 10,000 10,000
96 $11,453 $11,429
S & P 500 SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE MAY 1, 1996**
+14.29%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
13
<PAGE>
COMPOSITION BY INDUSTRY AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 53.8%
Finance Services 7.9%
Banks 6.6%
Computer - Software 5.5%
Food 5.9%
Insurance 5.5%
Cash Equivalent/Receivables 9.1%
Drugs 5.7%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Federal Home Loan Mortgage Corp. 1.4%
2. Travelers Group, Inc. 1.3%
3. Pfizer, Inc. 1.3%
4. Allied Signal, Inc. 1.2%
5. Ace, Ltd. 1.2%
6. Mobil Corp. 1.2%
7. General Electric Co. 1.2%
8. Merck & Co., Inc. 1.2%
9. Mellon Bank Corp. 1.1%
10. Kimberly-Clark Corp. 1.1%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Alltel Corp. Alco Standard Corp.
Ascend Communications, Inc. Altera corp.
Boston Chicken, Inc. Associates First Capital Corp.
Camco International, Inc. Atlantic Richfield Co.
Carnival Corp. Baker Hughes, Inc.
Corporate Express, Inc. Cisco Systems, Inc.
Crown Cork & Seal Company Inc. ContiFinancial Corp.
Electronic Data Systems Corp. Deluxe Corp.
General Mills, Inc. Echlin
H & R Block, Inc. Exide Corp.
Intersate Bakeries Corp. Fleet Financial Group, Inc.
ITT Corp. IMC Mortgage Co.
KeyCorp. Olsten Corp.
Linear Technology Corp. Oxford Resources Corp.
Panamerican Beverages, Inc.
Masco Corp. Pharmacia and UpJohn, Inc.
McCormick & Company, Inc. RAC Financial Group, Inc.
Medic Computer Systems, Inc. Rite Aid Corp.
Mid Ocean Ltd. Royal Caribbean Cruises Ltd.
Nabisco Holdings Corp. Saks Holdings, Inc.
Newmont Mining Corp. Security First Network Bank
Nucor Corp. Southern Pacific Funding Corp.
Outback Steakhouse, Inc. St. Jude Medical, Inc.
Petrolite Corp. Teleport Communications Group,
Schluman, Inc. Inc.
Staples, Inc. Union Carbide Corp. Holding
Time Warner, Inc. Co.
U.S.A. Waste Services, U.S. Bancorp
Wallace Computer Services, Viacom, Inc.
Inc. WMX Technologies
Warnaco Group
Warner-Lambert Co.
WorldCom, Inc.
FORTIS SERIES FUND: BLUE CHIP STOCK PORTFOLIO
(SUBADVISED BY T. ROWE PRICE)
THE MONEY MANAGERS FOR THIS PORTFOLIO TARGET "BLUE CHIP" COMPANIES WITH LEADING
MARKET POSITIONS, SEASONED MANAGEMENTS AND STRONG FINANCIAL FUNDAMENTALS. IT IS
DESIGNED FOR PEOPLE WHO WANT TO INVEST IN WELL-ESTABLISHED COMPANIES THAT
GENERATE CONSISTENT, DURABLE EARNINGS GROWTH WITH THE POTENTIAL FOR ABOVE
AVERAGE STOCK PERFORMANCE.
REVIEW
The Blue Chip Stock Portfolio recognized its first eight months as part of the
Fortis Series Fund with a strong, positive performance return of 16.24 percent.
In fact, following stellar gains in 1995, the U.S. stock market surprised many
investors by advancing steadily through 1996 to mark one of the best two-year
performance periods on record. We remain cautiously optimistic that many of the
factors that have provided a strong environment for stocks will continue;
specifically, favorable inflation and interest rates, mutual fund inflows and
corporate earnings.
Risks that could dampen this outlook include the inconsistent economic
performance of many key trading partners, such as Japan and several European
economies, including Germany. More consistent performance of these economies is
needed for continued strong earnings growth at many U.S. multinational
companies. However, a strong synchronized boom in major world economies would
probably be a major negative for inflation, interest rates and, ultimately,
stock values.
Although your portfolio has less exposure to the technology market than the
average growth fund, our technology holdings performed very well. Financial
stocks also performed well, and we discovered some sound investment ideas in the
struggling retail sector. For example, Eckerd (a drug store holding) saw a boost
in its stock price when J.C. Penney's purchased the company. And the supermarket
giant, Safeway, also contributed positively to performance.
OUTLOOK
Stock values remain expensive, and we are wary of the strong results generated
by the market for two consecutive years. However, we realize that sound
investing must be driven by the outlook for the general investment environment
and future company earnings. Considering these factors, we believe the outlook
for U.S. stocks remains favorable.
We continue to target holdings that we believe are generally "all-season" growth
companies -- they can generate earnings growth regardless of the economic or
interest rate environment. As always, we strive to seek out blue chip companies
with leading market positions, seasoned management and strong financial
fundamentals, as we continue to believe they will provide superior investment
results.
VALUE OF $10,000 INVESTED MAY 1, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** BLUE CHIP STOCK SERIES
<S> <C> <C>
5/1/1996 10,000 10,000
96 $ 11,453 $ 11,624
BLUE CHIP SERIES SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
MAY 1, 1996**
+16.24%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
14
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 41.7%
Other 24.6%
Japan 6.7%
Germany 5.6%
Netherlands 5.0%
Receivables/Cash Equivalents 4.7%
Sweden 4.6%
United Kingdom 3.9%
Finland 3.3%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Gartner Group, Inc. Class A (US) 3.8%
2. SAP AG Systeme Non-Voting (Germany) 2.7%
3. Nokia (AB) K Shares (Finland) 2.7%
4. SGL Carbon AG (Germany) 2.2%
5. Wisconsin Centeral Transportation Corp. (US) 2.1%
6. Randstad Holdings NV (Netherlands) 2.0%
7. 3Com Corp. (US) 2.0%
8. U.S. Robotics Corp. (US) 1.7%
9. OMV Aktiengesellschaft (Australian) 1.6%
10. Barco N.V. (Belgium) 1.6%
</TABLE>
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
Altera Corp. 3Com Corp.
Amway Japan Ltd. Anixter International, Inc.
ANSYS, Inc. Applied Materials, Inc.
Asia Satellite Bajaj Auto Ltd.
Telecommunications Holdings British Sky Broadcasting plc
Ltd. Buenos Aires Embotelladora
Blyth Industries, Inc. S.A.
Capita Group plc Canadian National Railway Co.
Centeral European Media Continente Cent Co.
Enterprises Ltd. Crown Cork & Seal Company Inc.
Ceridian Corp. De Rigo S.P.A. ADR
CPT Telefonia Del Peru-B S.A. DSC Commnications Corp.
CUC International, Inc. First Pacific Co. Ltd.
Data Processing Resources Iochpe Maxion S.A.
Corp. Landmark Graphics Corp.
Deutsche Telekom AG ADR Mercury Interactive Corp.
Disco S.A.
Dr. Solomon's Group plc
Empire East Land Holdings,
Inc.
Green Tree Financial Corp.
Harvey Nichols
Hutchison Whampoa, Ltd. News Corp. (The), Ltd. ADR
Interim Services, Inc. News Corp. (The), Ltd.
KCI Konecranes International Preferred
Corp. Office Depot, Inc.
Laox Co. Ltd. Rogers Cantel Mobile
LCI International, Inc. Communications, Inc.
Multicanal Participacoes S.A. Scandinavian Mobility
ADR Internatiol
Novartis AG Sidel S.A.
OMV Aktiengesellschaft Tandy Corp.
Open Joint Stock Vimpel Technology Resources
Communications Industries
Orange plc Telewest plc
Outback Steakhouse, Inc. Thorn Lighting Group plc
Pathe S.A. Videotrom Holdings plc ADR
Petroleum Geo-Services ADS Vodafone Group plc
PetsMart, Inc. Wabash National Corp.
Physician Reliance Network,
Inc.
Portugal Telecom S.A. ADR
Puma AG
Sony Corp.
SQA, Inc.
Sun Hung Kai Properties Ltd.
Sykes Enterprises, Inc.
Tag Heuer International S.A.
ADR
Telefonica del Peru ADR
Tidewater, Inc.
Tommy Hilfiger Corp.
Toolex Alpha
Total Renal Care Holdings
Vans, Inc.
Wolford AG
Xylan Corp.
FORTIS SERIES FUND: GLOBAL GROWTH PORTFOLIO
SLIGHTLY MORE AGGRESSIVE GROWTH INVESTORS WHO WANT TO DIVERSIFY AND EXPAND THEIR
HORIZONS BEYOND THE UNITED STATES MAY WANT TO CONSIDER THIS HIGHLY DIVERSIFIED
PORTFOLIO.
REVIEW
As a global portfolio, the Global Growth Series has the flexibility to invest in
a variety of stock markets around the world, including the United States. This
is a highly diversified portfolio with 117 holdings in 29 different nations. Our
investment focus is on companies with strong market positions and superior
growth prospects relative to the respective local economy.
The positive 19.10 percent performance of the Global Growth Series over the past
year can be attributed to favorable stock selection and a meaningful asset
weighting in the United States. In comparison, the Morgan Stanley Capital
International (MSCI) World Index, the portfolio's benchmark, realized a 14.00
percent return. Over the past several years, the portfolio has been
underweighted in markets such as Japan, which has significantly underperformed
the World Index. When researching potential investments, we look for companies
with a focused growth strategy, a strong management team, and the ability to
finance future growth. We also look for companies that tend to dominate their
respective market or industry. We have found that companies with these
characteristics tend to achieve superior returns for shareholders.
Through a global approach to growth investing, we are able to expose the
investor to the world's most dynamic growth segments. At the same time, global
investing provides greater diversification, which can help to reduce the
volatility traditionally associated with equity investing. Our approach at
Fortis has traditionally focused on mid-sized companies with superior growth
prospects. During 1996 these types of companies performed strongly during the
first half of the year. During the second half of 1996, these stocks tended to
lag the broader market averages, which are dominated by larger, "blue chip"
companies.
OUTLOOK
We are hopeful that investor focus will again return to companies with superior
growth prospects such as those held in the Global Growth Portfolio. Longer term,
the prospects for global investing remain quite favorable. The relatively poor
performance of the Japanese market, since 1989, has been more than offset by
stellar returns from the U.S. Our approach to global investing exposes investors
to all of the major markets and allows a greater degree of flexibility, which is
important with our high-growth investment style. Over the past year we have
broadened our diversification by adding to the number of holdings in the
portfolio. This has been done in an effort to limit the amount of
company-specific risk in the portfolio.
VALUE OF $10,000 INVESTED MAY 1, 1992
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI WORLD INDEX*** GLOBAL GROWTH SERIES
<S> <C> <C>
5/1/1992 10,000 10,000
92 10,236 11,088
93 12,613 13,075
94 13,317 12,685
95 16,156 16,553
96 $ 18,417 $ 19,715
GLOBAL GROWTH SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR MAY 1, 1992**
+19.10% +15.65%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of the world's major equity markets in U.S. dollars,
weighted by stock market value.
15
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 25.4%
Computer - Software 16.9%
Computer - Communications Equipment 11.0%
Financial Services 10.4%
Health Care Services 7.4%
Retail - Specialty 7.0%
Telecommunication Equipment 6.6%
Telephone Services 5.9%
Cash Equivalents/Receivables 9.4%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. 3Com Corp. 3.8%
2. Cisco Systems, Inc. 3.6%
3. Oracle Corp. 3.5%
4. Microsoft Corp. 3.3%
5. Tellabs, Inc. 3.3%
6. WorldCom, Inc. 2.6%
7. BMC Software, Inc. 2.5%
8. Federal National Mortgage Association 2.5%
9. Parametric Technology Corp. 2.3%
10. MFS Communications Co., Inc. 2.2%
</TABLE>
PORTFOLIO CHANGES FOR THE
PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
AccuStaff Inc. America Online, Inc.
Advanta Corp., Class B Applied Materials,
Anadarko Petroleum Corp. Inc.
BioChem Pharma, Inc. AutoZone, Inc.
Capital One Financial Corp. Bay Networks, Inc.
Cascade Communications Corp. Boston Chicken, Inc.
Chicago Miniature Lamp, Inc. Compaq Computer Corp.
Danka Business Systems plc ADR Cypress Semiconductor
ENSCO International, Inc. Corp.
Falcon Drilling Co. DSC Communications
First USA, Inc. Corp.
Genzyme Corp.-General Division Harrah's
Green Tree Financial Corp. Entertainment, Inc.
HFS Inc. Lam Research Corp.
La Quinta Inns, Inc. Lowe's Co., Inc.
LCI International, Inc. LSI Logic Corp.
MBNA Corp. Medaphis Corp.
MedPartners, Inc. Micron Technology,
Medtronics, Inc. Inc.
Nike, Inc., Class B Mobile
Noble Drilling Corp. Telecommunications
Technologies Corp.
Pacific Gateway Exchange, Inc. Motorola, Inc.
Phycor Inc. Nokia Corp.
Republic Industries, Inc. U.S. HealthCare, Inc.
Schlumberger, Ltd. Wal-Mart Stores, Inc.
Smith International, Inc.
Starbucks Corp.
Steris Corp.
Sterling Commerce, Inc.
Tidewater, Inc.
U.S. Robotics Corp.
Vertas Sortware Corp.
West Marine, Inc.
Wisconsin Central
Transportation Corp.
FORTIS SERIES FUND: GROWTH STOCK PORTFOLIO
THIS PORTFOLIO IS DESIGNED FOR INVESTORS WHO SEEK REWARD POTENTIAL ENTIRELY
THROUGH U.S. STOCKS. IT INVESTS IN MEDIUM-SIZED GROWTH COMPANIES THAT HAVE MOVED
BEYOND THE VENTURE STAGE.
REVIEW
The positive performance of the Growth Stock Portfolio in 1996 of 16.41 percent
was largely attributable to the portfolio's holdings of technology stocks, which
represented more than one-third of its assets during the year. Also making
positive contributions were selected holdings in the healthcare, financial
services and energy areas. Underlying the increase in the value of the
portfolio, of course, was the very strong advance exhibited by the overall stock
market, as represented by the major indices, such as the Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average, of 22.98 percent and 29.49
percent, respectively.
The fact that the portfolio's gain was somewhat less than that of the major
indices is a result of two factors. First, while the Growth Portfolio invests
mainly in mid-sized companies, the market's leadership in 1996 was clearly among
the large, multi-national companies; and, second, small and mid-sized growth
stocks came under a great deal of selling pressure late in the year, erasing a
portion of the gains made in the first 11 months. The recovery in most of these
stocks early in 1997 would seem to imply that the selling was not done for
reasons to do with company fundamentals.
OUTLOOK
Our outlook for 1997 reflects the view that economic and financial market
fundamentals will be similar to those experienced in 1996. Specifically, that
means an economy that is growing but not at an exuberant rate, inflation that
can best be described as benign, and interest rates that should be contained
within the range traced over the last several months.
As the economy slows, we must concentrate on companies that are able to sustain
growth of their revenues. As a result, the portfolio continues to contain a
significant number of companies arrayed across a wide range of technologies.
Surveys of U.S. companies show an intention to expand the rate of spending on
technology, and the growth rate of such spending by foreign corporations is
significantly greater yet.
Other areas of the portfolio include low-cost providers of telecommunication
services competing against the major local exchange and long-distance companies;
companies providing oil and gas production equipment and services as production
companies strive to meet the needs of a growing global economy; healthcare
products and provider services in the struggle to contain the rising cost of
care; providers of financial products and services to allow individuals to plan
for the major financial requirements of their lives; and companies taking on
outsourcing responsibilities for a wide range of corporate functions as
companies continue to look for ways to lower costs of their products and
services in a highly competitive global environment.
VALUE OF $10,000 INVESTED MARCH 24, 1987
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** GROWTH STOCK SERIES
<S> <C> <C>
03/24/1987 10,000 10,000
87 8,909 8,639
88 10,407 9,027
89 13,684 12,318
90 13,250 11,937
91 17,298 18,323
92 18,624 18,861
93 20,485 20,518
94 20,753 19,940
95 28,535 25,456
96 $ 34,978 $ 29,635
GROWTH STOCK SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR 5 YEAR MARCH 24, 1987**
+16.41% +10.09% +11.75%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
16
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Japan 22.8%
United Kingdom 19.5%
France 14.3%
Germany 12.8%
Other 10.2%
Switzerland 5.8%
Cash Equivalents/Receivables 4.8%
Hong Kong 3.4%
Netherlands 3.2%
Italy 3.2%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Hoechst AG (Denmark) 3.1%
2. British Aerospace (United Kingdom) 3.0%
3. Sony Corp. (Japan) 2.9%
4. Alcatel Alsthom CIE Generale D'Electricite S.A.
(France) 2.5%
5. HSBC Holdings (Hong Kong) 2.3%
6. Daimler Benz (Germany) 2.3%
7. Royal Dutch Petroleum Co. (Netherlands) 2.3%
8. Rhone Poulenc (France) 2.3%
9. Rohm Company (Japan) 2.3%
10. CIE Generale Des Eaux (France) 2.2%
</TABLE>
PORTFOLIO CHANGES FOR THE
PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
BTR plc DDI Corp.
B.A.T. Industries plc ING Groep NV
Electrowatt AG Lloyds Abbey Life plc
Ente Naionale Idocarbuiri Spa Nackebro Fastighets AB
Grand Metropolitan ORD Roussel UCLAF ADR
HSBC Holdings plc Siemens AG
INA Istituto Nazionale Thorn Emi plc
Assicurazioni
Metro AG
Novartis AG
Swire Pacific Ltd.
FORTIS SERIES FUND: INTERNATIONAL STOCK PORTFOLIO
(SUBADVISED BY LAZARD FRERES ASSET MANAGEMENT)
INVESTORS WILLING TO BALANCE THE RISKS AND REWARDS OF INTERNATIONAL STOCK
INVESTING OFTEN SELECT THIS PORTFOLIO TO DIVERSIFY AN ESTABLISHED INVESTMENT
STRATEGY. IT FOCUSES EXCLUSIVELY ON GROWTH COMPANY STOCKS OUTSIDE OF THE UNITED
STATES.
REVIEW
The International Stock Portfolio, continuing to be propelled by strong stock
holdings, finished the year by outperforming the Morgan Stanley Capital
International Europe Asia Far East (MSCI EAFE) Index 14.02 percent to 6.64
percent. In fact, the fourth quarter provided a fitting end to another strong
year as several international equity markets reached record highs. Although U.S.
market performance captured much of the headlines during the year, European
equities rivaled its performance. In Japan, the market closed at its year low
after reaching a four-year high in June.
In 1996, investors witnessed a pivotal year for value creation by international
companies. The "shareholder value" focus started in the U.S. is quickly being
adopted in Europe and slowly in Japan. Investing in companies taking concrete
steps in line with the interests of stockholders was a major driver of the
portfolio's outperformance in 1996.
Specifically, European pharmaceutical companies continued to unlock value during
the fourth quarter, and the consolidation of European banking, utility and
telecommunications industries further evidenced the growing commitment to
creating shareholder value.
In Japan, despite good company results a weak Japanese business outlook survey
dragged its market down for the quarter and the entire year. Further behind in
its restructuring curve, Japan's slow economy and austere government programs
make stock picking in Japan essential. Companies that face their problems and
make changes will continue to profit, especially if the Japanese economy
struggles. This year was a perfect example as Japanese stock selection (Honda
and Toyota, for example) was a large contributor to outperformance of the
portfolio in 1996.
OUTLOOK
Looking ahead, global investors should be encouraged by attractive valuations
and by the concrete steps international companies are taking to improve their
return on capital and lower their cost of capital. Other important issues to
watch in 1997 include the development of a common European currency (EMU),
Japanese banks' willingness to write-off their bad debts, Hong Kong's transition
to China, and the value of the U.S. dollar.
It's important to note that many of the same forces that drove U.S. equity
returns in the past few years are now in place in foreign markets. Improving
global competitiveness, better corporate returns, declining interest rates,
cheaper foreign valuations, and a new equity culture bodes well for
international equity outperformance in the future through value stock selection.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL
MSCI EAFE*** STOCK SERIES
<S> <C> <C>
1/3/95 10,000 10,000
95 11,155 11,435
96 $11,896 $13,038
INTERNATIONAL STOCK SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR JANUARY 3, 1995**
14.02% 14.23%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future
performance. Investment return and principal value
will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
This represents the performance of the Series
itself, without the expenses associated with the
variable annuities or variable universal life
insurance policies.
* SEC defined total returns, including
reinvestment of all dividend and capital
gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of the stocks of Europe,
Australia, and the Far East.
17
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/96
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Telephone Services 7.3%
Telecommunication Equipment 4.5%
Retail - Specialty 5.5%
Restaurants and Franchising 3.5%
Other 16.1%
Health Care Services 8.5%
Computer - Communications Equipment 8.2%
Computer - Software 17.3%
Cash Equivalents/Receivables 14.1%
Business Services and Supplies 15.0%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/96
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Cisco Systems, Inc. 2.6%
2. APAC Teleservices, Inc. 2.5%
3. MFS Communications Co. 2.2%
4. Cascade Communications Corp. 1.6%
5. Legato Systems, Inc. 1.6%
6. United Waste System, Inc. 1.6%
7. Chicago Miniature Lamp Inc. 1.6%
8. Acxiom Corp. 1.6%
9. West Marine, Inc. 1.6%
10. Apollo Group, Inc. Class A 1.6%
</TABLE>
FORTIS SERIES FUND: AGGRESSIVE GROWTH PORTFOLIO
DESIGNED ESPECIALLY FOR THE MOST AGGRESSIVE, LONG-TERM INVESTOR WHO BELIEVES IN
THE ENTREPRENEURIAL OPPORTUNITIES OF AMERICA. THIS PORTFOLIO INVESTS IN SMALLER,
EMERGING GROWTH COMPANIES THAT HAVE HIGH UNIT GROWTH RATES FOR THEIR PRODUCTS OR
SERVICES.
REVIEW
As we had suggested, 1996 was characterized by volatile performance. The
portfolio had strong performance through mid-May, followed by significant
fluctuations, both up and down. While the portfolio did provide a positive 7.6
percent return for the year, it was below that of the major market averages.
Most of our largest holdings continued to show very strong fundamentals and high
rates of earnings growth; however, investors' preference moved toward
larger-size and safety, bringing down valuations on smaller, high-growth
companies. To lessen risk and remain well-diversified, the portfolio increased
the number of holdings, thereby lowering the average size of positions.
OUTLOOK
Looking ahead, we continue to focus on quality, emerging high-growth companies
with a track record of success, and we believe the market will reward this type
of performance in the future.
Historically, investing in smaller companies can be more volatile over the short
term as a result of their higher relative valuations. We expect this tendency to
continue in 1997. It is our belief that investors with patience and a longer
time horizon can benefit from volatility and may be rewarded by the capital
appreciation of the leading growth companies of the future.
VALUE OF $10,000 INVESTED MAY 2, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500*** AGGRESSIVE GROWTH SERIES
<S> <C> <C>
5/2/1994 10,000 10,000
94 10,397 9,811
95 14,297 12,743
96 $ 17,524 $ 13,718
AGGRESSIVE GROWTH SERIES
AVERAGE ANNUAL TOTAL RETURN*
SINCE
1 YEAR MAY 2, 1994**
+7.64% +12.58%
</TABLE>
Annual period ended December 31,
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks.
PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/96
ADDITIONS: ELIMINATIONS:
ABR Information Services, Inc. America Online, Inc.
AccuStaff, Inc. Authentic Fitness
Advanced Fibre Avid Tech, Inc.
Communications Books-A-Million
American Eagle Outfitters, Inc. Boston Chicken, Inc.
Apollo Group, Inc. Cerner Corp.
Ascend Comm., Inc. Cheesecake Factory, Inc.
Aspen Tech. Inc. Davidson and Associates, Inc.
Biochem Pharma DSC Commun Corp.
Boston Beer (The) FSI International
Brooks Fiber Properties, Inc. Genesis Health Ventures, Inc.
Chicago Miniature Lamp, Inc. Gymboree Corp.
COREstaff, Inc. Health Care & Retirement Corp.
Correctional Services Corp. Healthsource, Inc.
Corrections Corp. of America IntelCom Group, Inc.
CUC International, Inc. Isolyser Co., Inc.
Cybercash, Inc. Macromedia, Inc.
CyberMedia, Inc. Mecon, Inc.
Falcon Drilling Co. Medaphis Corp.
Famous Dave's of America Micro Warehouse
Fila Holdings MIDCOM Communication
HCIA, Inc. Paradigm Technology, Inc.
HNC Software Inc. Quarterdeck Corp.
ICG Communications, Inc. Spyglass Inc.
Indus Group StrataCom, Inc.
Infinity Financial Technology, Summit Medical Systems, Inc.
Inc. Sunglass Hut International, Inc.
INSO Corp. Ultratech Stepper
Intermedia Communications, Inc. Unitrode Corp.
Just for Feet, Inc. Visioneer Inc.
L & H Speech Prod Xilinx, Inc.
McLeod Inc.
National Education Corp.
Pairgain Technologies, Inc.
Parexel Intl. Corp.
Percision Response Corp.
Pharm Prod Dev Inc.
Platinum Technology Corp.
Pure Atria Corp.
Quality Dining, Inc.
Rainforest Cafe, Inc.
Rational Software Corp.
Romac Intl.
Seattle Film Works, Inc.
Siebel Systems, Inc.
Snyder Communications, Inc.
Sterling Commerc Inc.
Sykes Enterprises, Inc.
Tele Tech Holdings, Inc.
Transition Systems, Inc.
Trico Marine Services Inc.
Vantive Corp.
Veritas Software Corp.
Verity Inc.
Westell Tech Inc.
Xylan Corp.
18
<PAGE>
FORTIS SERIES FUND, INC.
MONEY MARKET SERIES
Schedule of Investments
December 31, 1996
SHORT-TERM INVESTMENTS-99.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard &
Poor's
Principal Rating Market
Amount (Unaudited) Cost (a) Value (b)
----------- ------------ ----------- ------------
<C> <S> <C> <C> <C>
BANKS-14.98%
$2,900,000 Banc One Funding Corp., 5.43% 1-10-1997
(c)........................................ A1 $2,895,731 $ 2,895,731
2,800,000 Deutsche Bank Financial Inc., 5.43%
1-21-1997.................................. A1+ 2,791,376 2,791,376
1,789,000 First Trust Money Market Variable Rate Time
Deposit, Current Rate -- 5.25%............. A1+ 1,789,000 1,789,000
1,800,000 First Union Bank of North Carolina, 5.51%
1-7-1997................................... A1 1,798,124 1,798,124
----------- ------------
9,274,231 9,274,231
----------- ------------
BROKERAGE AND INVESTMENT-4.80%
2,000,000 Merrill Lynch & Co., Inc., 5.49% 3-4-1997.... A1+ 1,981,380 1,981,136
1,000,000 Merrill Lynch & Co., Inc., 5.52% 2-11-1997... A1+ 993,758 993,758
----------- ------------
2,975,138 2,974,894
----------- ------------
CAPTIVE AUTO FINANCE-8.99%
2,600,000 Ford Motor Credit Corp., 5.64% 1-7-1997...... A1 2,597,194 2,597,194
1,500,000 General Motors Acceptance Corp., 5.67%
1-27-1997.................................. A1 1,493,857 1,493,857
1,500,000 General Motors Acceptance Corp., 5.49%
4-9-1997................................... A2 1,478,179 1,477,767
----------- ------------
5,569,230 5,568,818
----------- ------------
CAPTIVE EQUIPMENT FINANCE-13.50%
3,000,000 IBM Credit Corp., 5.45% 2-11-1997............ A1 2,981,485 2,981,485
2,800,000 John Deere Capital Corp., 5.46% 5-14-1997.... A1 2,745,283 2,743,824
2,700,000 PACCAR Financial Co., 5.79% 6-13-1997........ A1 2,632,596 2,633,704
----------- ------------
8,359,364 8,359,013
----------- ------------
CONSUMER FINANCING-17.50%
2,800,000 American Express Credit Co., 5.47%
2-10-1997.................................. A1+ 2,783,099 2,783,099
2,700,000 American General Finance Corp., 5.46%
1-30-1997.................................. A1 2,688,075 2,688,075
1,500,000 Beneficial Corp., 5.47% 1-16-1997............ A1 1,496,453 1,496,453
1,900,000 Commercial Credit Corp., 5.51% 1-30-1997..... A1 1,891,450 1,891,450
2,000,000 Household Finance Corp., 5.47% 4-4-1997...... A1 1,972,322 1,971,852
----------- ------------
10,831,399 10,830,929
----------- ------------
DIVERSIFIED FINANCE-19.26%
3,033,000 Associates Corp. Master Variable Rate Note,
Current Rate -- 5.31%...................... A1+ 3,033,000 3,033,000
3,100,000 CIT Group Holdings, Inc., 5.41% 1-6-1997..... A1 3,097,267 3,097,267
3,000,000 General Electric Capital Corp., 5.53%
4-29-1997.................................. A1 2,946,946 2,946,549
2,900,000 Prudential Funding Corp., 5.48% 5-7-1997..... A1+ 2,845,983 2,844,857
----------- ------------
11,923,196 11,921,673
----------- ------------
FOOD-GROCERY, MISCELLANEOUS-6.60%
2,500,000 Kellogg Co., 5.50% 2-5-1997(e)............... A1+ 2,486,550 2,486,550
1,600,000 Nestle Capital Corp., 5.41% 1-14-1997........ A1 1,596,696 1,596,696
----------- ------------
4,083,246 4,083,246
----------- ------------
TOBACCO-4.35%
2,700,000 Phillip Morris Cos., Inc., 5.44% 1-13-1997... A1 2,694,842 2,694,842
----------- ------------
UTILITIES-ELECTRIC-9.16%
2,700,000 Central & South West Credit Corp., 5.46%
2-21-1997.................................. A1 2,679,213 2,679,213
3,000,000 Wisconsin Electric Fuel Trust, 5.44%
1-24-1997.................................. A1+ 2,989,380 2,989,380
----------- ------------
5,668,593 5,668,593
----------- ------------
TOTAL SHORT-TERM INVESTMENTS (COST:
$61,379,239) (A)........................... $61,376,239
------------
------------
</TABLE>
(a) At December 31, 1996, the cost of securities for federal income tax
purposes was $61,379,239 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $ 0
Unrealized depreciation............................................... (3,000)
- --------------------------------------------------------------------------------
Net unrealized depreciation........................................... $ (3,000)
- --------------------------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Commercial paper sold within the terms of a private placement memorandum,
exempt from registration under Section 4(2) of the Securities Act of 1933,
as amended, and may be sold only to dealers in that program or to other
"accredited investors". These securities have been determined to be liquid
under the guidelines established by the board of directors.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of U.S. dollar denominated
investments in foreign securities represents 4.51% of net assets as of
December 31, 1996.
(e) Securities sold within the terms of private placement memorandums, exempt
from registration under Section 4(2) of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These investments have been identified by portfolio
management as illiquid securities. The portfolio entered into the following
Section 4(2) security transactions. On December 17, 1996 the portfolio
acquired 2,500,000 par of Kellogg due 1997 with a cost basis of $2,486,550.
The value of this security at Dec. 31, 1996 is $2,486,550 which represents
4.0% of total net assets.
19
<PAGE>
FORTIS SERIES FUND, INC.
U.S. GOVERNMENT SECURITIES SERIES
Schedule of Investments
December 31, 1996
U.S. GOVERNMENT SECURITIES-87.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-0.75%
MORTGAGE BACKED SECURITIES:
$ 1,091,573 9.50% 2016................................... $ 1,174,634 $ 1,174,805
35,109 11.25% 2015.................................. 38,192 39,459
------------- -------------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORPORATION................................ 1,212,826 1,214,264
------------- -------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-21.11%
MORTGAGE BACKED SECURITIES:
1,730,281 6.00% 2011................................... 1,688,507 1,663,773
2,784,926 6.50% 2010-2024.............................. 2,750,639 2,734,248
11,811,998 7.00% 2003-2025.............................. 11,639,711 11,606,004
8,498,740 7.50% 2023-2026.............................. 8,500,918 8,496,080
283,645 8.50% 2017................................... 290,302 293,661
199,474 9.00% 2020-2021.............................. 199,178 210,195
1,270,809 9.75% 2020................................... 1,370,885 1,381,210
------------- -------------
26,440,140 26,385,171
------------- -------------
NOTES:
7,000,000 6.85% 2000................................... 7,000,000 7,043,022
------------- -------------
REMIC-PAC'S:
707,261 7.50% 2019................................... 733,452 707,386
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 34,173,592 34,135,579
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-15.27%
MORTGAGE BACKED SECURITIES:
13,365,701 7.00% 2026................................... 12,797,164 13,077,497
3,575,489 7.50% 2022................................... 3,582,193 3,577,724
3,027,654 9.00% 2020................................... 3,171,467 3,190,390
1,086,124 9.125% 2018.................................. 1,111,877 1,100,671
3,495,931 9.50% 2018-2021.............................. 3,629,340 3,749,685
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 24,292,041 24,695,967
------------- -------------
OTHER DIRECT FEDERAL OBLIGATIONS-14.19%
FEDERAL HOME LOAN BANK:
7,895,000 7.31% 2004................................... 7,917,916 8,222,871
------------- -------------
TENNESSEE VALLEY AUTHORITY:
15,000,000 6.375% 2005.................................. 14,354,901 14,717,040
------------- -------------
TOTAL OTHER DIRECT FEDERAL OBLIGATIONS....... 22,272,817 22,939,911
------------- -------------
OTHER GOVERNMENT AGENCIES-1.69%
RESOLUTION FUNDING CORPORATION:
9,000,000 8.395% Zero Coupon Strips 2014 (d)........... 2,347,545 2,731,221
------------- -------------
U.S. TREASURY SECURITIES-34.13%
BONDS:
1,700,000 6.50% 2006................................... 1,728,835 1,709,562
15,525,000 6.875% 2006.................................. 15,870,731 16,005,297
4,575,000 8.125% 2019-2021............................. 5,169,873 5,302,188
------------- -------------
22,769,439 23,017,047
------------- -------------
NOTES:
5,675,000 6.25% 2001................................... 5,736,480 5,678,547
15,150,000 6.375% 2001.................................. 15,313,117 15,235,219
10,310,000 6.50% 2001-2005.............................. 10,339,875 10,407,731
800,000 7.00% 2006................................... 831,658 831,250
------------- -------------
32,221,130 32,152,747
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 54,990,569 55,169,794
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. $ 139,289,390 $ 140,886,736
------------- -------------
------------- -------------
</TABLE>
20
<PAGE>
SHORT-TERM INVESTMENTS-11.72%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-3.27%
$ 5,283,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 5,283,000
-------------
DIVERSIFIED FINANCE-2.15%
3,481,000 Associates Corp. Master Variable Rate Note,
Current rate --............................ 3,481,000
-------------
U.S. GOVERNMENT AGENCY-6.30%
10,200,000 Federal Home Loan Mortgage Corp., 5.44%,
1-15-1997.................................. 10,177,305
-------------
TOTAL SHORT-TERM INVESTMENTS................. 18,941,305
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$158,230,695) (A).......................... $ 159,828,041
-------------
-------------
</TABLE>
(a) At December 31, 1996, the cost of securities for federal income tax
purposes was $158,645,239 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,816,966
Unrealized depreciation..................................... (634,164)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $1,182,802
- ------------------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(d) The interest rate disclosed for this security represents the effective
yield on the date of acquisition.
21
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES
Schedule of Investments
December 31, 1996
WARRANTS-0.02%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- -------- -------------
<C> <S> <C> <C>
RETAIL-MISCELLANEOUS-0.02%
500 Petro PSC Properties, L.P. (Warrants) (a).... $18,285 $ 25,000
-------- -------------
</TABLE>
ASSET BACKED SECURITIES-25.66%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
AIRLINES-1.53%
$1,300,000 Delta Airlines, 10.50% Pass Thru Certificate
4-30-2016.................................. BBB $ 1,588,685 $ 1,615,873
------------ -------------
COMMERCIAL LOANS-14.30%
1,484,210 Chase Commercial Mortgage Securities Corp.,
7.60% Ser 1996-1 Class A-1 12-18-2005...... AAA 1,500,638 1,536,099
481,347 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (f).......... AAA 484,939 490,974
958,306 GS MSC II Protective Life, 7.02% Ser 1996-pl
3-1- 2026.................................. Aaa* 958,244 965,942
984,066 J.P. Morgan Commercial Mortgage, 6.47%
1996-C2 Class A 11-25-2027................. AAA 991,145 972,081
2,275,118 Merrill Lynch Mortgage Investors, Inc.,
6.788% Variable Rate Ser 1995-C3 Cl A1
12-26-2025................................. AAA 2,261,707 2,265,797
1,073,439 Merrill Lynch Mortgage Investors, Inc.,
6.815% Variable Rate Ser 1995-C2 Cl A1
6-15-2021.................................. Aaa* 1,089,709 1,091,306
1,400,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996 Cl B 4-25-2028.................... AA 1,364,978 1,417,937
1,000,000 Midland, 7.76% Ser 1996-C1-B 7-25-2008....... AA 1,009,860 1,035,664
600,000 Morgan Stanley Capital, Inc., 6.586% Series
1996WF1 B Tranche 11-15-2028............... AA 575,017 577,031
1,650,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MCI-B 2-15-2006....................... AA+ 1,666,436 1,727,988
2,000,000 Nationslink Funding Corp., 7.515% Ser 1996-1
Class A2 7-20-2005......................... AAA 2,002,389 2,051,875
972,821 Nationslink Funding Corp., 7.533% Ser 1996-1
Class A1 9-20-2002......................... AAA 981,759 1,000,638
------------ -------------
14,886,821 15,133,332
------------ -------------
MANUFACTURED HOMES-5.48%
1,800,000 Green Tree Financial Corp., 7.20% Ser 1993-4
Class B1 1-15-2019......................... Baa3* 1,787,102 1,788,469
1,500,000 Green Tree Financial Corp., 7.65% Sr Sub Pass
Thru Certificate Ser 1994-1 Cl A5
4-15-2019.................................. Aa2* 1,494,141 1,536,753
2,500,000 Oakwood Mortgage Investors, Inc., 7.10% Ser
1995-A Cl A3 9-15-2020..................... AAA 2,497,656 2,477,200
------------ -------------
5,778,899 5,802,422
------------ -------------
MISCELLANEOUS-0.50%
526,571 Fifth Third Bank Auto Trust 1996-B-B, 6.70%
3-15-2002.................................. A 526,216 530,768
------------ -------------
MULTI-FAMILY LOANS-3.85%
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 1,473,750 1,528,325
2,150,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-4 Cl A2 4-18-2001 A 2,188,255 2,219,374
444,198 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.231% Ser 1996-1 Cl A
Principal Only 1-1-2033 (f)(g)............. Baa* 323,046 323,154
------------ -------------
3,985,051 4,070,853
------------ -------------
TOTAL ASSET BACKED SECURITIES................ $26,765,672 $ 27,153,248
------------ -------------
------------ -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-21.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.96%
$1,000,000 Lockheed Martin Corp., 7.25% Note
5-15-2006.................................. BBB+ $ 999,101 $ 1,015,753
------------ -------------
BANKS-3.38%
1,500,000 ANZ Banking Group Ltd., 7.55% 9-15-2006...... A+ 1,497,766 1,550,730
2,000,000 Capital One Bank, 7.15% 9-15-2006............ BBB- 1,999,081 2,025,470
------------ -------------
3,496,847 3,576,200
------------ -------------
</TABLE>
22
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
BROKERAGE AND INVESTMENT-1.98%
$1,500,000 Lehman Brothers Holdings, 8.50% Note
5-1-2007................................... A $ 1,589,856 $ 1,608,483
500,000 Salomon, Inc., 6.75% Sr Note 2-15-2003....... BBB 499,091 488,247
------------ -------------
2,088,947 2,096,730
------------ -------------
CHEMICALS-0.46%
500,000 Lyondell Petrochemical, 7.55% Note
2-15-2026.................................. BBB- 465,101 482,308
------------ -------------
CONTAINERS AND PACKAGING-1.85%
2,000,000 Crown Cork & Seal Co. Inc., 7.375%
12-15-2026................................. BBB+ 1,975,989 1,961,328
------------ -------------
ENERGY-3.74%
1,500,000 NGC Corp., 7.625% 10-15-2026................. BBB+ 1,492,844 1,528,263
2,500,000 Transcontinental Gas Pipeline, 7.25%
12-1-2026.................................. BBB 2,495,753 2,434,325
------------ -------------
3,988,597 3,962,588
------------ -------------
FOOD-GROCERY, MISCELLANEOUS-1.39%
1,500,000 CPC International, Inc., 7.25% Deb
12-15-2026................................. A+ 1,494,917 1,475,426
------------ -------------
HEALTH CARE SERVICES-2.38%
1,000,000 Columbia/HCA Healthcare, 7.69% Note
6-15-2025.................................. A- 1,013,183 1,026,253
1,500,000 Medpartners, Inc., 7.375% Sr Note
10-1-2006.................................. BBB 1,487,542 1,494,204
------------ -------------
2,500,725 2,520,457
------------ -------------
MEDIA-1.00%
1,000,000 News America Holdings, Inc., 8.875% Sr Note
4-26-2023.................................. BBB 992,005 1,056,215
------------ -------------
PAPER-1.41%
1,000,000 Champion International, Inc., 7.20%
11-1-2026.................................. BBB 999,431 990,886
520,000 Champion International, Inc., 7.35% Deb
11-1-2025.................................. BBB 517,150 499,405
------------ -------------
1,516,581 1,490,291
------------ -------------
REAL ESTATE-INVESTMENT TRUST-0.97%
1,000,000 Meditrust, 7.82% Note 9-10-2026.............. BBB- 1,000,000 1,029,063
------------ -------------
SUPRANATIONAL-0.95%
1,000,000 Corp Andina De Formento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 999,409 1,004,313
------------ -------------
TELECOMMUNICATIONS-0.94%
1,000,000 360 Communications Corp., 7.50% Sr Note
3-1-2006................................... BBB- 997,822 992,088
------------ -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $22,516,041 $ 22,662,760
------------ -------------
------------ -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-13.24%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.48%
$ 500,000 Sinclair Broadcasting, Inc., 10.00% Sr Sub
Note 9-30-2005............................. B $ 500,000 $ 509,375
------------ -------------
CABLE TELEVISION-2.76%
1,000,000 Cablevision Systems Corp., 10.50% Sr Sub Deb
5-15-2016.................................. B 1,014,992 1,035,000
500,000 Century Communications, Inc., 9.50% Sr Note
3-1-2005................................... BB- 519,894 510,000
500,000 Groupe Videotron, 10.625% Sr Note
2-15-2005.................................. BB+ 525,214 551,250
500,000 Telewest plc, 11.00% Sr Disc Deb 10-1-2007
(Zero coupon until 10-1-2000, thereafter
11.00%) (e)................................ BB 335,757 347,500
500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. B- 488,834 485,000
------------ -------------
2,884,691 2,928,750
------------ -------------
</TABLE>
23
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
ENERGY-0.51%
$ 500,000 Mesa Operating Co., 10.625% Sr Note
7-1-2006................................... B $ 504,853 $ 541,250
------------ -------------
FOOD-MISCELLANEOUS-1.01%
1,000,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 1,000,000 1,065,000
------------ -------------
HEALTH CARE SERVICES-0.52%
500,000 Tenet Healthcare Corp., 10.125% Sr Sub Note
3-1-2005................................... B+ 533,251 552,500
------------ -------------
HOTEL AND MOTEL-0.99%
1,000,000 HMH Properties, Inc., 9.50% Sr Note
5-15-2005.................................. BB- 1,012,315 1,043,750
------------ -------------
LEISURE TIME-AMUSEMENTS-0.94%
1,000,000 Trump Atlantic City Associates, 11.25% First
Mtg Bond 5-1-2006.......................... BB- 983,827 990,000
------------ -------------
STEEL AND IRON-1.54%
1,000,000 AK Steel Corp., 10.75% Sr Note 4-1-2004...... BB- 1,096,250 1,092,500
500,000 Algoma Steel, Inc., 12.375% First Mortgage
Note 7-15-2005............................. B 526,101 537,500
------------ -------------
1,622,351 1,630,000
------------ -------------
TECHNOLOGY-0.99%
1,000,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999.................................. B- 1,033,750 1,045,000
------------ -------------
TELECOMMUNICATIONS-3.50%
1,000,000 American Communications Services, Inc.,
13.00% Sr Disc Note 11-1-2005 (Zero coupon
until 11-1-2000, thereafter 13.00%) (e).... NR 599,487 590,000
1,000,000 Nextlink Communications, L.L.C., 12.50% Sr
Note 4-15-2006............................. NR 1,000,000 1,072,500
1,000,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 1,041,478 1,023,750
500,000 Sprint Spectrum L.P., 12.50% Sr Disc Note
8-15-2006 (Zero coupon through 8-15-2001,
12.50% thereafter) (e)..................... B+ 321,273 336,250
1,000,000 Teleport Communications, 11.125% Sr Disc Deb
7-1-2007 (Zero coupon until 7-1-2001,
thereafter 11.125%) (e).................... B 618,245 685,000
------------ -------------
3,580,483 3,707,500
------------ -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $13,655,521 $ 14,013,125
------------ -------------
------------ -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-39.34%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-14.20%
MORTGAGE BACKED SECURITIES:
$ 961,267 6.00% 2011................................... $ 938,057 $ 924,318
1,808,324 6.50% 2010................................... 1,792,219 1,775,548
4,834,094 7.00% 2025................................... 4,761,834 4,729,856
2,582,482 7.50% 2022-2026.............................. 2,615,253 2,581,674
------------- -------------
10,107,363 10,011,396
------------- -------------
NOTE:
2,000,000 6.85% 2000................................... 2,000,000 2,012,292
------------- -------------
REMIC-PAC:
3,000,000 7.00% Trust #1192-49H Busted PAC 2020........ 2,892,344 3,004,200
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 14,999,707 15,027,888
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-7.67%
MORTGAGE BACKED SECURITIES:
2,145,293 7.50% 2022................................... 2,149,316 2,146,634
3,260,550 9.00% 2020................................... 3,415,426 3,435,805
1,026,077 9.125% Fleet Mortgage Securities Ser 1989-3
Class D 2018 (GNMA Backed)................. 1,040,783 1,039,820
</TABLE>
24
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
$1,399,561 9.50% 2019................................... $ 1,452,554 $ 1,498,458
------------- -------------
8,058,079 8,120,717
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 8,058,079 8,120,717
------------- -------------
U.S. TREASURY SECURITIES-17.47%
BONDS:
5,000,000 6.50% 2006................................... 5,071,194 5,028,125
3,000,000 6.75% 2026................................... 3,066,917 3,020,625
445,000 6.875% 2006.................................. 454,269 458,767
1,350,000 8.125% 2021.................................. 1,573,822 1,566,000
------------- -------------
10,166,202 10,073,517
------------- -------------
NOTES:
5,700,000 7.00% 2006................................... 5,958,458 5,922,653
930,000 7.50% 1999................................... 959,541 964,584
1,400,000 7.875% 2004.................................. 1,493,580 1,527,750
------------- -------------
8,411,579 8,414,987
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 18,577,781 18,488,504
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. $ 41,635,567 $ 41,637,109
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 104,591,086 $ 105,491,242
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-0.20%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- -------------
<C> <S> <C>
BANKS-0.20%
$209,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 209,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$104,800,086) (b).......................... $ 105,700,242
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $104,814,230 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,396,129
Unrealized depreciation..................................... (510,117)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $ 886,012
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuations of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 3.77% of net assets as of December 31, 1996.
(e) The interest rate disclosed for these securities represents the effective
yields on the date of acquisition.
(f) Securities sold within the terms of private placement memorandums, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These Investments have been identified by portfolio
management as illiquid securities. The portfolio entered into the following
Section 144A security transactions: On May 17, 1996 the portfolio acquired
481,347 par DLJ Mortgage Acceptance Corp. due 2028 with a cost basis of
$484,939 on December 31, 1996. On March 7, 1996 the portfolio acquired
444,198 par of Fund America Structured Transactions due 2033 with a cost
basis of $323,046 on December 31, 1996. The value of these securities at
December 31, 1996, is $814,128 which represents .77% of total net assets.
(g) The interest rate disclosed for principal only strips represent effective
yields at December 31, 1996, based upon future cash flows. This investment
has been identified by portfolio management as an illiquid security. The
aggregate value of this security at December 31, 1996 is $323,154 which
represents .31% of total net assets.
* Moody's Rating
25
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL BOND SERIES
Schedule of Investments
December 31, 1996
LONG-TERM FOREIGN BONDS-INVESTMENT GRADE-75.11%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (d) (Unaudited) Cost (a)(d) Value (b)(d)
--------------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
AUSTRALIA-1.68%
$ 200,000 Australian Government (Australian Dollar),
6.75% 11-15-2006........................... AAA $ 158,410 $ 152,116
200,000 Australian Government (Australian Dollar),
10.00% 10-15-2007.......................... AAA 187,792 188,167
------------ ------------
346,202 340,283
------------ ------------
AUSTRIA-3.70%
700,000 Republic of Austria (US Dollar), 7.875%
3-26-2002.................................. AAA 739,173 747,250
------------ ------------
CANADA-11.02%
1,200,000 Canadian Government (Canadian Dollar), 7.00%
9-1-2001................................... AA+ 959,475 929,776
1,650,000 Canadian Government (Canadian Dollar), 7.50%
3-1-2001................................... AAA 1,338,709 1,298,979
------------ ------------
2,298,184 2,228,755
------------ ------------
DENMARK-16.84%
4,050,000 Kingdom of Denmark (Danish Krone), 8.00%
11-15-2001................................. AAA 732,421 762,090
2,400,000 Kingdom of Denmark (Danish Krone), 8.00%
3-15-2006.................................. AAA 451,204 447,541
11,700,000 Kingdom of Denmark (Danish Krone), 8.00%
5-15-2003.................................. AAA 2,119,078 2,197,033
------------ ------------
3,302,703 3,406,664
------------ ------------
GERMANY-9.27%
1,000,000 Bundesobl.V.95/oos.116 STV (German
Deutschemark), 5.75% 8-22-2000............. Aaa* 694,206 679,835
880,000 Deutsche Ausgleichsbank (German
Deutschemark), 6.375% 11-7-2002............ AAA 624,040 603,851
860,000 Landeskreditbank Baden-Wurttemberg (German
Deutschemark), 6.625% 8-20-2003............ AAA 614,091 591,522
------------ ------------
1,932,337 1,875,208
------------ ------------
ITALY-7.60%
2,130,000,000 Buoni Poliennali Del Tesoro (Italian Lira),
9.50% 2-1-2001............................. AAA 1,441,600 1,538,279
------------ ------------
JAPAN-3.04%
18,000,000 International Bank Reconstruction &
Development (Japanese Yen), 4.50%
6-20-2000.................................. Aaa* 183,928 172,234
18,000,000 International Bank Reconstruction &
Development (Japanese Yen), 5.25%
3-20-2002.................................. AAA 191,207 181,345
25,000,000 Japan Development Bank (Japanese Yen), 6.50%
9-20-2001.................................. Aaa* 280,254 261,830
------------ ------------
655,389 615,409
------------ ------------
NETHERLANDS-3.37%
1,100,000 Dutch Government (Dutch Guilders), 6.50%
4-15-2003.................................. NR 679,529 681,086
------------ ------------
SPAIN-10.35%
224,000,000 Spanish Government (Spanish Peseta), 10.50%
10-30-2003................................. NR 2,079,034 2,093,536
------------ ------------
UNITED KINGDOM-4.69%
500,000 United Kingdom Treasury (British Pound),
8.75% 8-25-2017............................ Aaa* 891,043 949,504
------------ ------------
UNITED STATES-3.55%
650,000 General Electric Capital Corp., 8.125%
2-23-2007.................................. AAA 708,375 717,438
------------ ------------
TOTAL LONG-TERM FOREIGN BONDS - INVESTMENT
GRADE...................................... $15,073,569 $15,193,412
------------ ------------
------------ ------------
</TABLE>
U.S. GOVERNMENT SECURITIES-17.09%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount (d) Cost (a)(d) Value (b)(d)
----------- ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-17.09%
BONDS:
$ 400,000 6.50% 2026................................... $ 402,185 $ 392,500
400,000 8.125% 2019.................................. 459,286 462,250
------------ ------------
861,471 854,750
------------ ------------
</TABLE>
26
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount (d) Cost (a)(d) Value (b)(d)
----------- ------------ ------------
<C> <S> <C> <C>
NOTES:
$ 500,000 7.00% 2006................................... $ 512,638 $ 519,531
1,990,000 7.75% 2000................................... 2,115,168 2,082,658
------------ ------------
2,627,806 2,602,189
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. $ 3,489,277 $ 3,456,939
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $18,562,846 $18,650,351
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-6.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount (d) Value (b)(d)
----------- ------------
<C> <S> <C>
U.S. TREASURY BILLS - 4.92%
$1,000,000 U.S. Treasury Bill, 4.83% 2-6-1997........... $ 995,036
------------
INVESTMENT COMPANY - 1.97%
398,117 First American Institutional Government Fund,
Current rate -- 5.10%...................... 398,117
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,393,153
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$19,955,999) (a)........................... $20,043,504
------------
------------
</TABLE>
(a) At December 31, 1996, the cost of securities for federal income tax
purposes was $19,955,999 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 306,195
Unrealized depreciation..................................... (218,690)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 87,505
- -------------------------------------------------------------------------
</TABLE>
(b) See Note 1 of accompanying Notes to Financial Statements regarding
valuations of securities.
(c) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(d) Cost and market value is stated in U.S. dollars; principal amount is stated
in the currency indicated.
* Moody's Rating
27
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS AND WARRANTS-0.33%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- --------- ------------
<C> <S> <C> <C>
APPAREL-0.00%
250 Hosiery Corp. of America, Class A (a)(f)..... $ 4,230 $ 1,375
--------- ------------
CABLE TELEVISION-0.01%
2,500 American Telecasting, Inc. (Warrants) (a).... 5,000 2,500
500 People's Choice T.V. Corp. (Warrants)
(a)(f)..................................... 5,660 500
--------- ------------
10,660 3,000
--------- ------------
CONSUMER GOODS-0.00%
200 Chattem, Inc. (Warrants) (a)(f).............. 2,546 700
--------- ------------
RETAIL-MISCELLANEOUS-0.03%
250 Petro PSC Properties, L.P. (Warrants) (a).... 9,142 12,500
--------- ------------
TELECOMMUNICATIONS-0.29%
1,000 American Communications Services, Inc.
(Warrants) (a)(f).......................... 45,700 85,000
3,300 Clearne Communications, Inc. (Warrants)...... 42,075 29,700
500 Hyperion Telecom (Warrants).................. 1,998 10,000
--------- ------------
89,773 124,700
--------- ------------
TOTAL COMMON STOCKS AND WARRANTS............. $116,351 $ 142,275
--------- ------------
--------- ------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-87.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.63%
$ 250,000 K & F Industries, Inc., 11.875% Sr Secured
Note 12-01-2003............................ B+ $ 235,500 $ 268,750
------------ ------------
AIRLINES-2.39%
500,000 U.S. Air, Inc., 10.00% Sr Note 7-1-2003...... CCC+ 470,048 500,000
500,000 U.S. Air, Inc., 10.375% Pass Thru Certificate
3-1-2013................................... B+ 466,250 517,500
------------ ------------
936,298 1,017,500
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-3.42%
500,000 CSK Auto, Inc., 11.00% Sr Sub Note 11-1-2006
(f)........................................ B- 500,000 515,000
500,000 Exide Corp., 11.564% Sr Disc Note 12-15-2004
(Zero coupon through 12-15-97, thereafter
12.25%) (e)................................ B 461,095 455,000
500,000 J.B. Poindexter & Co., 12.50% Sr Note
5-15-2004.................................. B- 485,339 487,500
------------ ------------
1,446,434 1,457,500
------------ ------------
BROADCASTING-6.09%
250,000 Commodore Media, Inc., 12.71% Sr Sub Note
5-1-2003................................... NR 238,167 260,000
500,000 JACOR Communications Co., 9.75% Sr Sub Note
12-15-2006................................. B 500,000 510,625
500,000 Paxson Communications Corp., 11.625% Sr Sub
Note 10-1-2002............................. B- 512,265 522,500
500,000 SFX Broadcasting, 10.75% Sr Sub Note
5-15-2006.................................. B- 515,000 528,750
500,000 Sinclair Broadcasting, 10.00% Sr Sub Note
9-30-2005.................................. B 500,000 509,375
250,000 Spanish Broadcasting Systems, Inc., 11.52% Sr
Note 6-15-2002 (7.50% coupon through
6-15-1997, thereafter 12.50%) (e).......... B 255,245 263,125
------------ ------------
2,520,677 2,594,375
------------ ------------
CABLE TELEVISION-11.82%
1,000,000 Adelphia Communications Corp., 12.50% Sr Note
5-15-2002.................................. B 1,014,927 1,025,000
1,000,000 Australis Media Ltd., 14.00% Sr Sub Disc Note
5-15-2003.................................. NR 618,364 560,000
500,000 Cablevision Systems Corp., 10.50% Sr Sub Deb
5-15-2016.................................. B 507,497 517,500
500,000 Groupe Videotron, 10.625% Sr Note
2-15-2005.................................. BB+ 525,214 551,250
250,000 Lodgenet Entertainment, 10.25% Sr Note
12-15-2006 (f)............................. B 250,000 250,625
500,000 Olympus Communication L.P., 10.625% Sr Note
11-15-2006 (f)............................. B 500,000 511,875
1,000,000 People's Choice T.V. Corp., 13.33% Sr Disc
Note 6-1-2004 (Zero coupon until 6-1-2000,
thereafter 13.125%) (e).................... CCC+ 622,900 420,000
1,000,000 United International Holdings, Inc., 14.00%
Zero Coupon Sr Secured Disc Note Ser B
11-15-1999 (e)............................. B- 692,144 710,000
</TABLE>
28
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
$ 500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. B- $ 517,165 $ 485,000
------------ ------------
5,248,211 5,031,250
------------ ------------
CHEMICALS-5.18%
500,000 Agricultural Minerals & Chemicals, 10.75% Sr
Note 9-30-2003............................. B+ 526,164 547,500
500,000 LaRoche Industries, Inc., 13.00% Sr Sub Note
8-15-2004.................................. B 537,285 532,500
1,000,000 Sterling Chemical Holdings, 12.32% Sr Disc
Note 8-15-2008 (Zero coupon through
8-15-2001, thereafter 13.50%) (e).......... B+ 600,869 585,000
500,000 Terra Industries, 10.50% Sr Note 6-15-2005... B+ 530,610 545,000
------------ ------------
2,194,928 2,210,000
------------ ------------
CONSUMER GOODS-2.16%
250,000 Chattem, Inc., 12.75% Sr Sub Note Ser B
6-15-2004.................................. B- 259,147 260,000
600,000 Samsonite Corp., 11.125% Sr Sub Note
7-15-2005.................................. B- 656,846 660,000
------------ ------------
915,993 920,000
------------ ------------
CONTAINERS AND PACKAGING-2.17%
915,000 Silgan Holdings Corp., 13.25% Sr Disc Deb
12-15-2002................................. B- 921,844 921,863
------------ ------------
ENERGY-5.03%
500,000 Benton Oil & Gas, 11.625% Sr Note 5-1-2003... NR 527,005 550,000
500,000 Costilla Energy, 10.25% Sr Note 10-1-2006.... B 500,000 525,625
500,000 Mesa Operating Co., 10.625% Sr Note
7-1-2006................................... B 500,000 541,250
500,000 National Energy Group, Inc., 10.75% Sr Note
11-1-2006 (f).............................. NR 500,619 525,000
------------ ------------
2,027,624 2,141,875
------------ ------------
FINANCE COMPANIES-0.93%
250,000 Dollar Financial Group, Inc., 10.875% Sr Note
11-15-2006 (f)............................. B+ 250,000 257,500
125,000 Homeside, Inc., 11.25% Sr Secured Second
Priority Note 5-15-2003.................... B+ 125,000 139,375
------------ ------------
375,000 396,875
------------ ------------
FOOD-MISCELLANEOUS-1.85%
250,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 248,125 266,250
500,000 International Home Foods, 10.375% Sr Sub Note
11-1-2006 (f).............................. B- 500,000 520,000
------------ ------------
748,125 786,250
------------ ------------
HEALTH CARE SERVICES-3.73%
500,000 Abbey Healthcare Group, 9.50% Sr Sub Note
11-1-2002.................................. BB+ 526,250 522,500
500,000 Tenet Healthcare Corp., 10.125% Sr Sub Note
3-1-2005................................... B+ 553,189 552,500
500,000 Unison Healthcare Corp., 12.25% Sr Note
11-1-2006 (f).............................. B 500,000 512,500
------------ ------------
1,579,439 1,587,500
------------ ------------
HOTEL AND MOTEL-1.23%
500,000 HMH Properties, Inc., 9.50% Sr Note
5-15-2005.................................. BB- 484,470 521,875
------------ ------------
HOUSING-2.41%
500,000 MDC Holdings, Inc., 11.125% Note
12-15-2003................................. NR 479,976 502,500
500,000 NVR, Inc., 11.00% Sr Note 4-15-2003.......... B 500,938 522,500
------------ ------------
980,914 1,025,000
------------ ------------
INDUSTRIAL-1.22%
250,000 Amtrol Acquisition, Inc., 10.625% Sr Sub Note
12-31-2006 (f)............................. B- 250,000 257,500
250,000 Spinnaker Industries, Inc., 10.75% Sr Secured
Note 10-15-2006 (f)........................ B 250,000 260,000
------------ ------------
500,000 517,500
------------ ------------
LEISURE TIME-AMUSEMENTS-6.46%
1,000,000 Mohegan Tribal Gaming, 13.50% Sr Note
11-15-2002................................. NR 1,239,352 1,320,000
500,000 Stuart Entertainment, 12.50% Sr Sub Note
11-15-2004 (f)............................. B- 501,865 508,750
400,000 Trump Atlantic City Associates, 11.25% First
Mtg Bond 5-1-2006.......................... BB- 387,062 396,000
500,000 United Artists, 11.50% Sr Secured Note
5-1-2002................................... BB- 529,284 526,250
------------ ------------
2,657,563 2,751,000
------------ ------------
</TABLE>
29
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ ------------
<C> <S> <C> <C> <C>
MACHINERY-SPECIALTY-0.60%
$ 250,000 Goss Graphic Systems, Inc., 12.00% Sr Sub
Note 10-15-2006............................ B $ 250,000 $ 257,500
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-1.24%
500,000 Flores & Rucks, 9.75% Sr Sub Note
10-1-2006.................................. B- 508,624 528,750
------------ ------------
PUBLISING-1.56%
1,000,000 Marvel (Parent) Holdings, Inc., 14.46% Sr
Secured Zero Coupon Discount Note 4-15-1998
(a)(e)..................................... C 837,727 140,000
500,000 Petersen Publishing, 11.125% Sr Sub Note
11-15-2006 (f)............................. B- 500,000 522,500
------------ ------------
1,337,727 662,500
------------ ------------
RETAIL-GROCERY-2.54%
500,000 Grand Union Co., 12.00% Sr Note 9-1-2004..... B- 496,345 530,000
500,000 Smith's Food & Drug Centers, Inc., 11.25% Sr
Sub Note 5-15-2007......................... B- 512,917 552,500
------------ ------------
1,009,262 1,082,500
------------ ------------
STEEL AND IRON-2.42%
250,000 Algoma Steel, Inc., 12.375% First Mortgage
Note 7-15-2005............................. B 257,408 268,750
250,000 Bar Technologies, Inc., 13.50% Sr Secured
Note 4-1-2001.............................. B- 250,000 253,750
500,000 Weirton Steel Corp., 11.375% Sr Notes
7-1-2004................................... NR 502,491 510,000
------------ ------------
1,009,899 1,032,500
------------ ------------
TECHNOLOGY-1.23%
500,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999.................................. B- 449,563 522,500
------------ ------------
TELECOMMUNICATIONS-20.67%
1,000,000 American Communications Services, Inc.,
13.00% Sr Disc Note 11-1-2005 (Zero coupon
until 11-1-2000, thereafter 13.00%) (e).... NR 585,961 590,000
750,000 Brooks Fiber Properties, 10.356% Sr Disc Note
3-1-2006 (Zero Coupon until 3-1-2001,
thereafter 10.875%) (e).................... NR 502,500 500,625
250,000 Brooks Fiber Properties, Inc., 11.093% Sr
Disc Note 11-1-2006 (Zero coupon through
11-1-2001, thereafter 11.875%) (e)(f)...... NR 152,927 159,375
500,000 Call-Net Enterprises, Inc., 10.74% Sr Disc
Note 12-1-2004 (Zero coupon until
12-1-1999, thereafter 13.25%) (e).......... B+ 396,816 410,000
500,000 Cellular Communications, Inc., 11.96% Zero
Coupon Note 8-15-2000 (e).................. CCC+ 333,593 346,250
1,000,000 Echostar Communications, Inc., 11.34% Sr Disc
Note 6-1-2004 (Zero Coupon through
6-1-1999, thereafter 12.875%) (e).......... B 809,112 827,500
500,000 Fonorola, Inc., 12.50% Sr Secured Note
8-15-2002.................................. B+ 517,637 547,500
500,000 Globo Communicacoes e Participacoes Ltda.,
10.50% Private Placement 10-20-2006 (f).... NR 497,210 503,125
100,000 GST Telecommunications, Inc., 13.875% Sr
Conv. Disc Note 12-15-2005 (Zero coupon
until 12-15-2000, thereafter 13.875%)
(e)(f)..................................... NR 77,831 65,000
800,000 GST Telecommunications, Inc., 13.875% Sr Disc
Note 12-15-2005 (Zero coupon until
12-15-2000, thereafter 13.875%) (e)........ NR 460,183 488,000
500,000 Hyperion Communcations, Inc.,13.00% Sr Disc
Note 4-15-2003 (Zero coupon until
4-15-2001, thereafter13.00%) (e)........... NR 289,905 283,750
500,000 IXC Communications, Inc., 12.50% Sr Note
10-1-2005.................................. NR 530,469 550,000
250,000 Mobile Telecommunications, 13.50% Sr Note
12-15-2002................................. B- 250,623 250,625
1,000,000 Nextel Communications, 13.422% Sr Disc Note
8-15-2004 (Zero coupon through 2-15-1999,
thereafter 9.75%) (e)...................... CCC- 665,398 681,250
500,000 Nextlink Communications, L.L.C., 12.50% Sr
Note 4-15-2006............................. NR 500,000 536,250
500,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 506,250 511,875
500,000 Sprint Spectrum L.P., 11.00% Sr Note
8-15-2006.................................. B+ 541,250 541,250
500,000 Western Wireless, 10.50% Sr Sub Note
2-1-2007................................... B- 500,000 521,875
1,000,000 Wireless One, Inc., 13.463% Sr Disc Note
8-1-2006 (Zero coupon through 8-1-2001,
thereafter 13.50%) (and warrants) (e)...... B- 546,272 485,000
------------ ------------
8,663,937 8,799,250
------------ ------------
WASTE DISPOSAL-0.98%
375,000 Norcal Waste Systems, Inc., 13.00% Increasing
Rate Sr Note 11-15-2005 (e)................ BB- 369,323 416,250
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $37,371,355 $37,450,863
------------ ------------
------------ ------------
</TABLE>
30
<PAGE>
U.S. GOVERNMENT SECURITIES-6.10%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-6.10%
NOTES:
$2,500,000 7.00% 2006................................... $ 2,616,993 $ 2,597,655
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $40,104,699 $40,190,793
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-5.04%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-2.12%
$ 903,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 903,000
------------
DIVERSIFIED FINANCE-2.92%
1,242,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 1,242,000
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,145,000
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$42,249,699) (b)........................... $42,335,793
------------
------------
</TABLE>
(a) Presently non-income producing. For corporate debt securities items
identified are in default as to payment of interest and/or prinicpal.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $42,252,318 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,255,391
Unrealized depreciation..................................... (1,151,916)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 103,475
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 6.67% of net assets as of December 31, 1996.
(e) The interest rate disclosed for these securities represents the original
issue discount yields on the date of acquisition.
(f) Securities sold within terms of a private placement memorandum, exempt from
registration under Section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or to other "accredited
investors". These investments have been identified by portfolio management
as illiquid securities. The portfolio entered into the following Section
144A security transactions:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS 12/31/96
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
June 10, 1994 200 Chattem, Inc. (Warrants) 2,546
October 7, 1994 250 Hosiery Corp of America, Class A 4,230
November 10, 1995 1,000 American Communications Services, Inc. 45,700
(Warrants)
December 14, 1995 100,000 GST Telecommunications, Inc., 13.875% 77,831
12-15-2005
May 20, 1996 500 Peoples Choice T.V. Corp (Warrants) 5,660
October 18, 1996 250,000 Spinnaker Industries, Inc., 10.75% 10-15-2006 250,000
October 23, 1996 500,000 CSK Auto, Inc., 11.00% 11-01-2006 500,000
October 28, 1996 500,000 Unison Healthcare Corp., 12.25% 11-01-2006 500,000
October 29, 1996 500,000 International Home Foods 10.375% 11-01-2006 500,000
October 29, 1996 500,000 National Energy Group, Inc., 10.75% 11-01-2006 500,619
November 5, 1996 250,000 Brooks Fiber Properties, Inc., 11.093% 152,927
11-01-2006
November 7, 1996 250,000 Amtrol Acquisition, Inc., 10.625% 12-31-2006 250,000
November 7, 1996 500,000 Olympus Communications L.P. 10.625% 11-15-2006 500,000
November 12, 1996 250,000 Dollar Financial Group, Inc., 10.875% 250,000
11-15-2006
November 20, 1996 500,000 Petersen Publishing 11.125% 11-15-2006 500,000
December 3, 1996 500,000 Stuart Entertainment 12.50% 11-15-2004 501,865
December 10, 1996 500,000 Globo Communicacoes e Participacoes Ltda., 497,210
10.50% 10-20-2006
December 16, 1996 250,000 Lodgenet Entertainment 10.25% 12-15-2006 250,000
The value of these securities at December 31, 1996, is $5,456,325 which represents 12.81% of net
assets.
</TABLE>
31
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-56.98%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.65%
46,000 Magna International, Inc. Class A............ $ 2,185,416 $ 2,564,500
------------- -------------
BANKS-1.50%
91,000 Banc One Corp................................ 3,277,694 3,913,000
53,000 Union Planters Corp.......................... 1,839,620 2,067,000
------------- -------------
5,117,314 5,980,000
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.04%
33,000 Amgen, Inc. (a).............................. 1,856,402 1,794,375
66,000 Centocor, Inc. (a)........................... 2,318,401 2,359,500
------------- -------------
4,174,803 4,153,875
------------- -------------
BUSINESS SERVICES AND SUPPLIES-2.45%
58,000 Ceridian Corp. (a)........................... 2,572,542 2,349,000
150,114 First Data Corp. (b)......................... 2,894,404 5,479,161
45,000 Ingram Micro, Inc. (a)....................... 893,400 1,035,000
57,000 Wackenhut Corp. Class B...................... 1,368,069 869,250
------------- -------------
7,728,415 9,732,411
------------- -------------
CHEMICALS-0.62%
63,000 Monsato Co................................... 2,602,164 2,449,125
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.60%
100,000 Cisco Systems, Inc. (a)...................... 1,244,016 6,362,500
------------- -------------
COMPUTER-SOFTWARE-6.31%
71,050 Computer Associates International, Inc....... 1,762,645 3,534,737
41,300 Fiserv, Inc. (a)............................. 1,592,062 1,517,775
88,500 Microsoft Corp. (a).......................... 1,883,251 7,312,312
151,050 Oracle Corp. (a)............................. 636,670 6,306,337
123,919 Sterling Commerce, Inc. (a).................. 1,691,211 4,368,145
65,000 Sterling Software, Inc. (a).................. 591,044 2,055,625
------------- -------------
8,156,883 25,094,931
------------- -------------
CONTAINERS AND PACKAGING-0.55%
40,500 Crown Cork & Seal Company, Inc. (a).......... 1,875,060 2,202,187
------------- -------------
DRUGS-2.31%
37,000 Abbott Laboratories.......................... 1,681,465 1,877,750
43,000 Biovail Corp. International (a).............. 1,335,262 1,101,875
50,500 Forest Laboratories, Inc. (a)................ 1,894,212 1,653,875
45,000 Lilly (Eli) & Co., Inc....................... 2,797,817 3,285,000
25,200 Teva Pharmaceutical Industries, Ltd. ADR..... 1,226,925 1,266,300
------------- -------------
8,935,681 9,184,800
------------- -------------
ELECTRICAL EQUIPMENT-1.27%
51,000 General Electric Co.......................... 4,493,271 5,042,625
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.08%
33,000 Intel Corp................................... 1,768,690 4,320,937
64,400 Motorola, Inc................................ 2,884,391 3,952,550
------------- -------------
4,653,081 8,273,487
------------- -------------
FINANCE SERVICES-6.63%
169,000 Federal National Mortgage Association........ 4,410,213 6,295,250
36,000 Franklin Resources, Inc...................... 1,472,500 2,461,500
178,996 Green Tree Financial Corp.................... 2,421,448 6,913,720
171,500 MBNA Corp.................................... 3,071,657 7,117,250
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
47,000 MGIC Investment Corp......................... $ 3,146,689 $ 3,572,000
------------- -------------
14,522,507 26,359,720
------------- -------------
FOOD-1.47%
76,000 ConAgra, Inc................................. 3,310,671 3,781,000
58,000 Heinz (H.J.) Co.............................. 1,852,810 2,073,500
------------- -------------
5,163,481 5,854,500
------------- -------------
HEALTH CARE SERVICES-2.73%
39,000 Cardinal Health, Inc......................... 1,848,080 2,271,750
93,000 Columbia/HCA Healthcare Corp................. 2,621,893 3,789,750
33,000 Oxford Health Plans, Inc. (a)................ 1,235,312 1,932,563
18,700 PacifiCare Health Systems, Inc., Class B
(a)........................................ 1,461,929 1,594,175
27,900 United Healthcare Corp....................... 1,514,310 1,255,500
------------- -------------
8,681,524 10,843,738
------------- -------------
HOTEL AND GAMING-1.49%
171,500 Mirage Resorts, Inc. (a)..................... 1,933,090 3,708,688
61,000 Sun International Hotels, Ltd. (a)........... 2,934,931 2,226,500
------------- -------------
4,868,021 5,935,188
------------- -------------
INSURANCE-1.33%
49,000 American International Group, Inc............ 4,734,197 5,304,250
------------- -------------
MEDICAL TECHNOLOGY-2.64%
77,900 Boston Scientific Corp. (a).................. 3,181,528 4,674,000
75,600 Depuy, Inc. (a).............................. 1,323,000 1,530,900
63,200 Medtronic, Inc. (and rights)................. 2,186,423 4,297,600
------------- -------------
6,690,951 10,502,500
------------- -------------
OIL AND GAS FIELD SERVICES-1.15%
34,000 Precision Drilling Corp. (a)................. 1,089,926 1,181,500
34,000 Schlumberger, Ltd............................ 2,959,025 3,395,750
------------- -------------
4,048,951 4,577,250
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-2.22%
31,200 Noble Affiliates, Inc........................ 1,380,744 1,493,700
100,400 Nuevo Energy Co. (a)......................... 3,991,559 5,220,800
151,000 Santa Fe Energy Resources, Inc. (a).......... 2,193,754 2,095,125
------------- -------------
7,566,057 8,809,625
------------- -------------
PAPER-0.49%
62,000 United States Filter Corp. (a)............... 1,951,302 1,968,500
------------- -------------
PUBLISHING-0.61%
36,300 Scholastic Corp. (a)......................... 1,851,033 2,441,175
------------- -------------
RETAIL-DEPARTMENT STORES-0.82%
83,200 Kohl's Corp. (a)............................. 1,624,870 3,265,600
------------- -------------
RETAIL-SPECIALTY-6.04%
85,600 AutoZone, Inc. (a)........................... 1,881,356 2,354,000
224,150 CUC International, Inc. (a).................. 3,529,388 5,323,563
81,500 Home Depot, Inc.............................. 3,542,446 4,085,188
56,000 Lowe's Companies, Inc........................ 2,231,318 1,988,000
50,000 Office Depot, Inc. (a)....................... 859,498 887,500
121,500 Pep Boys-Manny Moe & Jack.................... 3,563,862 3,736,125
191,000 Price/Costco, Inc. (a)....................... 3,371,589 4,798,875
48,000 Staples, Inc. (a)............................ 1,062,939 867,000
------------- -------------
20,042,396 24,040,251
------------- -------------
</TABLE>
32
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
TELECOMMUNICATIONS-0.01%
1,000 Hyperion Telecom (Warrants).................. $ 4,022 $ 20,000
------------- -------------
TELECOMMUNICATION EQUIPMENT-2.60%
220,000 Ericsson (L.M.) Telephone Co., Class B ADR... 2,657,302 6,641,250
98,000 Tellabs, Inc. (a)............................ 1,981,118 3,687,250
------------- -------------
4,638,420 10,328,500
------------- -------------
TELEPHONE SERVICES-2.88%
71,000 360 Communications Co. (a)................... 1,709,275 1,641,875
121,000 AirTouch Communications, Inc. (a)............ 3,149,507 3,055,250
258,988 WorldCom, Inc. (a)........................... 2,529,525 6,749,875
------------- -------------
7,388,307 11,447,000
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
TOBACCO-1.25%
44,000 Philip Morris Companies, Inc................. $ 4,750,716 $ 4,955,500
------------- -------------
TOYS-1.18%
169,651 Mattel, Inc.................................. 2,566,899 4,707,815
------------- -------------
UTILITIES-ELECTRIC-0.73%
28,100 AES Corp. (a)................................ 1,112,365 1,306,650
94,900 Tucson Electric Power Co. (a)................ 1,584,142 1,577,713
------------- -------------
2,696,507 2,884,363
------------- -------------
UTILITIES-TELEPHONE-0.33%
65,000 Deutsche Telekom AG ADR (a).................. 1,227,850 1,324,375
------------- -------------
TOTAL COMMON STOCKS.......................... $ 156,184,115 $ 226,610,291
------------- -------------
------------- -------------
</TABLE>
ASSET BACKED SECURITIES-9.74%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-5.06%
$3,957,894 Chase Commercial Mortgage Securities Corp.,
7.60% Ser 1996-1 Class A-1 12-18-2005...... AAA $ 4,001,701 $ 4,096,265
1,925,388 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (f).......... AAA 1,939,758 1,963,895
3,114,494 GS MSC II Protective Life, 7.02% Ser 1996-pl
3-1-2026................................... Aaa* 3,072,042 3,139,313
1,476,099 J.P. Morgan Commercial Mortgage, 6.47%
1996-C2 Class A 11-25-2027................. AAA 1,486,718 1,458,122
1,600,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996 Cl B 4-25-2028.................... AA 1,602,485 1,620,500
1,200,000 Midland 7.76% Ser 1996-C1-B 7-25-2008........ AA 1,211,832 1,242,797
550,000 Morgan Stanley Capital, Inc., 6.586% Series
1996WF1 B Tranche 11-15-2028............... AA 527,099 528,945
1,000,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MCI-B 2-15-2006....................... AA+ 1,009,961 1,047,266
1,870,000 Nationslink Funding Corp., 7.515% Ser 1996-1
Class A2 7-20-2005......................... AAA 1,872,234 1,918,503
3,015,746 Nationslink Funding Corp., 7.533% Ser 1996-1
Class A1 9-20-2002......................... AAA 3,033,506 3,101,977
------------ -------------
19,757,336 20,117,583
------------ -------------
MANUFACTURED HOMES-2.64%
4,000,000 Green Tree Financial Corp., 7.65% Sr Sub Pass
Thru Certificate Ser 1994-1 Cl A5
4-15-2019.................................. Aa2* 4,070,313 4,098,008
6,500,000 Oakwood Mortgage Investors, Inc., 7.10% Ser
1995-A Cl A3 9-15-2020..................... AAA 6,500,937 6,440,720
------------ -------------
10,571,250 10,538,728
------------ -------------
MISCELLANEOUS-0.23%
892,494 Fifth Third Bank Auto Trust 1996-B-B, 6.70%
3-15-2002.................................. A 891,892 899,607
------------ -------------
MULTI-FAMILY LOANS-1.81%
4,851,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-4 Cl A2 4-18-2001 A 4,937,314 5,007,527
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 1,473,750 1,528,325
888,396 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.231% Ser 1996-1 Cl A
Principal Only 1-1-2033 (f)(g)............. Baa* 646,035 646,308
------------ -------------
7,057,099 7,182,160
------------ -------------
TOTAL ASSET BACKED SECURITIES................ $38,277,577 $ 38,738,078
------------ -------------
------------ -------------
</TABLE>
33
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
CORPORATE BONDS-INVESTMENT GRADE-5.90%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.89%
$3,500,000 Lockheed Martin Corp., 7.25% Note
5-15-2006.................................. BBB+ $ 3,496,852 $ 3,555,135
------------ -------------
BROKERAGE AND INVESTMENT-1.17%
2,500,000 Lehman Brothers Holdings, 8.50% Note
5-1-2007................................... A 2,649,942 2,680,805
2,000,000 Salomon, Inc., 6.75% Sr Note 2-15-2003....... BBB 1,996,364 1,952,990
------------ -------------
4,646,306 4,633,795
------------ -------------
CHEMICALS-0.36%
1,500,000 Lyondell Petrochemical, 7.55% Note
2-15-2026.................................. BBB- 1,412,816 1,446,924
------------ -------------
CONTAINERS AND PACKAGING-0.50%
2,000,000 Crown Cork & Seal Financial plc, 7.00%
12-15-2006................................. BBB+ 1,993,360 1,985,782
------------ -------------
ENERGY-0.39%
1,500,000 NGC Corp., 7.625% 10-15-2026................. BBB+ 1,492,843 1,528,263
------------ -------------
FOOD-GROCERY, MISCELLANEOUS-0.43%
1,750,000 CPC International, Inc., 7.25% Deb
12-15-2026................................. A+ 1,744,070 1,721,330
------------ -------------
MEDIA-0.40%
1,500,000 News America Holdings, Inc., 8.963% Sr Note
4-26-2023.................................. BBB 1,559,842 1,584,322
------------ -------------
MISCELLANEOUS-0.07%
250,000 New York (City of), 10.00% General Obligation
Taxable Bond Fiscal 1991 Ser D 8-1-2005.... BBB+ 236,966 282,943
------------ -------------
RETAIL-MISCELLANEOUS-0.44%
1,750,000 Rite Aid Corp., 7.70% Deb 2-15-2027.......... BBB+ 1,745,031 1,761,469
------------ -------------
SUPRANATIONAL-0.38%
1,500,000 Corp Andina De Formento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 1,499,114 1,506,470
------------ -------------
TELECOMMUNICATIONS-0.87%
3,500,000 360 Communications Corp., 7.50% Sr Note
3-1-2006................................... BBB- 3,492,378 3,472,308
------------ -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $23,319,578 $ 23,478,741
------------ -------------
------------ -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-4.81%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.26%
$1,000,000 Sinclair Broadcasting, Inc., 10.00% Sr Sub
Note 9-30-2005............................. B $ 1,000,000 $ 1,018,750
------------ -------------
CABLE TELEVISION-0.99%
1,000,000 Cablevision Systems Corp., 10.50% Sr Sub Deb
5-15-2016.................................. B 1,014,992 1,035,000
1,000,000 Century Communications, Inc., 9.50% Sr Note
3-1-2005................................... BB- 1,039,787 1,020,000
500,000 Groupe Videotron, 10.625% Sr Note
2-15-2005.................................. BB+ 525,214 551,250
500,000 Telewest plc, 11.00% Sr Disc Deb 10-1-2007
(Zero coupon until 10-1-2000, thereafter
11.00%) (e)................................ BB 335,757 347,500
1,000,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. B- 977,668 970,000
------------ -------------
3,893,418 3,923,750
------------ -------------
</TABLE>
34
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ----------- ------------ -------------
<C> <S> <C> <C> <C>
ENERGY-0.27%
$1,000,000 Mesa Operating Co., 10.625% Sr Note
7-1-2006................................... B $ 1,009,706 $ 1,082,500
------------ -------------
FOOD-MISCELLANEOUS-0.40%
1,500,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 1,498,125 1,597,500
------------ -------------
HEALTH CARE SERVICES-0.28%
1,000,000 Tenet Healthcare Corp., 10.125% Sr Sub Note
3-1-2005................................... B+ 1,066,502 1,105,000
------------ -------------
HOTEL AND MOTEL-0.26%
1,000,000 HMH Properties, Inc., 9.50% Sr Note
5-15-2005.................................. BB- 1,012,315 1,043,750
------------ -------------
LEISURE TIME-AMUSEMENTS-0.25%
1,000,000 Trump Atlantic City Associates, 11.25% First
Mtg Bond 5-1-2006.......................... BB- 981,964 990,000
------------ -------------
STEEL AND IRON-0.68%
1,000,000 AK Steel Corp., 10.75% Sr Note 4-1-2004...... BB- 1,096,250 1,092,500
1,500,000 Algoma Steel, Inc., 12.375% First Mortgage
Note 7-15-2005............................. B 1,578,303 1,612,500
------------ -------------
2,674,553 2,705,000
------------ -------------
TECHNOLOGY-0.26%
1,000,000 Computervision Corp., 11.375% Sr Sub Note
8-15-1999.................................. B- 1,033,750 1,045,000
------------ -------------
TELECOMMUNICATIONS-1.16%
1,000,000 American Communications Services, Inc.,
13.00% Sr Disc Note 11-1-2005 (Zero coupon
until 11-1-2000, thereafter 13.00%) (e).... NR 599,487 590,000
1,000,000 Hyperion Communcations, Inc.,13.00% Sr Disc
Note 4-15-2003 (Zero coupon until
4-15-2001, thereafter13.00%) (e)........... NR 580,506 567,500
1,000,000 Nextlink Communications, L.L.C., 12.50% Sr
Note 4-15-2006............................. NR 1,000,000 1,072,500
1,000,000 Paging Network, Inc., 10.125% Sr Sub Note
8-1-2007................................... B 1,057,562 1,023,750
500,000 Sprint Spectrum L.P., 12.50% Sr Disc Note
8-15-2006 (Zero coupon through 8-15-2001,
12.50% thereafter) (e)..................... B+ 321,273 336,250
1,500,000 Teleport Communications, 11.125% Sr Disc Deb
7-1-2007 (Zero coupon until 7-1-2001,
thereafter 11.125%) (e).................... B 927,367 1,027,500
------------ -------------
4,486,195 4,617,500
------------ -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $18,656,528 $ 19,128,750
------------ -------------
------------ -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-19.10%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-6.28%
MORTGAGE BACKED SECURITIES:
$ 1,922,535 6.00% 2011................................... $ 1,876,119 $ 1,848,637
5,426,732 6.50% 2010................................... 5,378,400 5,328,373
7,733,546 7.00% 2011-2025.............................. 7,606,059 7,605,998
3,492,810 7.50% 2022-2026.............................. 3,545,076 3,491,717
1,608,308 8.00% 2025................................... 1,632,684 1,637,459
61,440 9.00% 2021................................... 61,305 64,742
------------- -------------
20,099,643 19,976,926
------------- -------------
NOTES:
2,000,000 6.85% 2000................................... 2,000,000 2,012,292
------------- -------------
REMIC-PAC'S:
3,000,000 7.00% Trust #1192-49H Busted PAC 2020........ 2,892,344 3,004,200
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ $ 24,991,987 $ 24,993,418
------------- -------------
</TABLE>
35
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-2.70%
MORTGAGE BACKED SECURITIES:
$ 5,508,528 7.50% 2022-2023.............................. $ 5,353,848 $ 5,511,971
4,346,804 9.00% 2022-2023.............................. 4,488,075 4,580,445
543,062 9.125% Fleet Mortgage Securities Ser 1989-3
Class D 2018 (GNMA Backed)................. 555,960 550,335
82,998 9.50% 2020................................... 82,791 89,664
------------- -------------
10,480,674 10,732,415
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 10,480,674 10,732,415
------------- -------------
U.S. TREASURY SECURITIES-10.12%
BONDS:
4,990,000 6.50% 2006................................... 5,080,307 5,018,069
1,360,000 6.875% 2006.................................. 1,409,783 1,402,074
------------- -------------
6,490,090 6,420,143
------------- -------------
NOTES:
8,660,000 5.875% 1999-2001............................. 8,614,826 8,577,960
6,410,000 6.00% 1998................................... 6,429,033 6,418,013
1,750,000 6.25% 2001................................... 1,778,737 1,751,094
10,565,000 6.50% 2001................................... 10,660,664 10,680,549
2,580,000 7.125% 1999.................................. 2,623,883 2,650,142
3,615,000 7.50% 1999................................... 3,729,830 3,749,431
------------- -------------
33,836,973 33,827,189
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 40,327,063 40,247,332
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 75,799,724 75,973,165
------------- -------------
TOTAL LONG-TERM DEBT SECURITIES.............. 156,053,407 157,318,734
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 312,237,522 $ 383,929,025
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-4.06%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.06%
$16,126,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 16,126,000
-------------
DIVERSIFIED FINANCE-0.00%
14,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 14,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 16,140,000
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$328,377,522) (b).......................... $ 400,069,025
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $328,392,288 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $75,479,928
Unrealized depreciation..................................... (3,803,191)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $71,676,737
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuations of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 5.96% of net assets as of December 31, 1996.
(e) The interest rate disclosed for these securities represents the original
issue discount yields on the date of acquisition.
(f) Securities sold within the terms of private placement memorandums, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These investments have been identified by portfolio
management as illiquid securities. The portfolio entered into the following
Section 144A security transactions: May 17, 1996 the portfolio acquired
1,925,388 par DLJ Mortgage Acceptance Corp. due 2028 with a cost basis of
$1,939,758 on December 31, 1996. On March 7, 1996 the portfolio acquired
$888,396 par of Fund America Structured Transactions due 2033 with a cost
basis of $646,035 on December 31, 1996. The value of these securities at
December 31, 1996, is $2,610,203 which represents .66% of total net assets.
(g) The interest rate disclosed for principal only strips represent effective
yields at December 31, 1996, based upon future cash flows. This investment
has been identified by portfolio management as an illiquid security. The
aggregate value of this security at December 31, 1996 is $646,308 which
represents .16% of total net assets.
* Moody's Rating
36
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-48.56%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b)(e) Value (c)(e)
--------- ------------ ------------
<C> <S> <C> <C>
AUSTRALIA-0.84%
4,000 Brambles Industries Ltd. -- BUSINESS SERVICES
AND SUPPLIES............................... $ 46,576 $ 77,996
34,460 Coles Myer Ltd. -- RETAIL-MISCELLANEOUS...... 120,901 141,777
27,300 CSR Limited -- BUILDING MATERIALS............ 92,890 95,406
------------ ------------
260,367 315,179
------------ ------------
BELGIUM-0.32%
2,000 Delhaize-Le Lion,
S.A. -- RETAIL-MISCELLANEOUS............... 79,986 118,686
------------ ------------
CANADA-0.13%
2,950 Hudson's Bay Co. -- RETAIL-DEPARTMENT
STORES..................................... 57,925 49,287
------------ ------------
FRANCE-2.84%
4,540 Banque Nationale de Paris -- BANKS........... 170,985 175,356
341 Bongrain S.A. -- FOOD........................ 169,170 131,645
560 Credit Lyonnaise (a) -- BANKS................ 35,896 14,327
1,683 Elf Aquitaine -- OIL-CRUDE PETROLEUM AND
GAS........................................ 119,270 152,899
2,100 PSA Peugeot Citroen S.A. -- AUTOMOBILE
MANUFACTURERS.............................. 280,723 235,903
2,850 Scor S.A. -- INSURANCE....................... 99,467 100,048
4,050 Valeo S.A. -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 177,328 249,291
------------ ------------
1,052,839 1,059,469
------------ ------------
GERMANY-2.82%
5,000 Basf AG -- CHEMICALS......................... 110,339 191,421
6,550 Bayer AG -- CHEMICALS........................ 182,990 265,424
5,250 Deutsche Telekom AG ADR
(a) -- UTILITIES-TELEPHONE................. 99,172 106,969
660 Karstadt AG -- RETAIL-DEPARTMENT STORES...... 255,306 219,271
195 Mannesmann AG -- MACHINERY................... 53,318 83,790
150 Varta AG (a) -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 30,189 26,766
1,700 Veba AG -- UTILITIES-ELECTRIC................ 58,756 97,624
150 Volkswagen AG -- AUTOMOBILE MANUFACTURERS.... 43,858 62,049
------------ ------------
833,928 1,053,314
------------ ------------
HONG KONG-0.41%
42,000 Jardine Strategic Holdings
Ltd. -- MISCELLANEOUS...................... 125,664 152,040
------------ ------------
IRELAND-0.91%
50,000 Avonmore Foods plc -- FOOD................... 107,398 147,249
46,969 Green Property plc -- REAL ESTATE............ 129,763 190,790
------------ ------------
237,161 338,039
------------ ------------
ITALY-0.67%
146,000 Olivetti Group, includes Ing C. Olivetti & C.
S.p.A. -- OFFICE EQUIPMENT AND SUPPLIES.... 55,941 51,371
37,100 Stet Societa' Finanziaria Telefonica
S.p.A. -- TELECOMMUNICATIONS............... 87,719 125,049
38,000 Telecom Italia
S.p.A. -- UTILITIES-TELEPHONE.............. 47,368 73,976
------------ ------------
191,028 250,396
------------ ------------
JAPAN-6.22%
4,000 Daicel Chemical Industries
Ltd. -- CHEMICALS.......................... 21,751 18,713
40 East Japan Railway Co. -- TRANSPORTATION..... 195,497 179,547
18,000 Fuji Photo Film -- PHOTOGRAPHIC.............. 531,715 592,401
6,000 Hitachi Ltd. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 56,981 55,828
42,000 Kao Corp. -- HOUSEHOLD PRODUCTS.............. 546,788 488,498
6,000 Matsushita Electric Industrial
Co. -- ELECTRIC PRODUCTS................... 101,168 97,700
54,000 Nichido Fire & Marine
Insurance -- INSURANCE..................... 419,179 307,056
20 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 142,089 151,288
2,000 Sony Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 114,488 130,783
10,000 Sumitomo Rubber Industries -- AUTOMOBILE AND
MOTOR VEHICLE PARTS........................ 88,145 74,352
2,000 TDK Corp. -- ELECTRIC-COMPONENTS AND PARTS... 105,885 130,094
4,000 Toyo Seikan Kaisha -- CONTAINERS AND
PACKAGING.................................. 125,311 96,149
------------ ------------
2,448,997 2,322,409
------------ ------------
</TABLE>
37
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b)(e) Value (c)(e)
--------- ------------ ------------
<C> <S> <C> <C>
NETHERLANDS-3.72%
3,468 ABN-AMRO Holding NV -- BANKS................. $ 127,746 $ 225,354
1,300 Akzo Nobel NV -- CHEMICALS................... 142,361 177,368
205 Hollandsche Beton Groep NV -- CONSTRUCTION... 31,456 42,417
6,162 ING Groep NV -- FINANCE SERVICES............. 137,997 221,581
17,800 Philips Electronics NV -- ELECTRIC
PRODUCTS................................... 591,748 720,341
------------ ------------
1,031,308 1,387,061
------------ ------------
SPAIN-1.87%
12,700 Iberdrola S.A. -- UTILITIES-ELECTRIC......... 76,653 179,650
8,080 Repsol S.A. -- OIL-CRUDE PETROLEUM AND GAS... 281,515 309,348
9,000 Telefonica de Espana -- TELECOMMUNICATIONS... 113,414 208,610
------------ ------------
471,582 697,608
------------ ------------
SWEDEN-1.04%
6,600 Skandia Forsakrings AB -- INSURANCE.......... 145,049 186,555
10,000 Svenska Cellulosa B Free -- BANKS............ 135,893 202,840
------------ ------------
280,942 389,395
------------ ------------
SWITZERLAND-2.83%
50 Ascom Holding AG -- TELECOMMUNICATIONS....... 49,185 50,755
65 Bobst S.A. -- MACHINERY...................... 79,455 87,621
160 Forbo Holding AG -- HOUSEHOLD PRODUCTS....... 72,668 64,347
220 Holderbank Financiere Glaris AG -- BUILDING
MATERIALS.................................. 167,699 156,637
110 Magazine Zum Globus -- RETAIL-DEPARTMENT
STORES..................................... 64,038 56,937
200 Nestle S.A. Registered -- FOOD............... 205,446 214,043
160 Novartis AG (a) -- DRUGS..................... 91,076 182,560
110 SIG Schweizerische Industrie-Gesellschaft
Holding AG -- MACHINERY.................... 107,975 133,125
190 Sulzer AG -- MISCELLANEOUS................... 119,878 109,382
------------ ------------
957,420 1,055,407
------------ ------------
UNITED KINGDOM-4.32%
3,400 Calor Group plc -- OIL-CRUDE PETROLEUM AND
GAS........................................ 14,749 17,252
24,000 Christian Salvesen plc -- MISCELLANEOUS...... 102,796 117,669
9,682 English China Clays plc -- MINERALS.......... 57,354 31,895
6,800 Kwik Save Group plc -- FOOD.................. 53,210 37,354
50,000 Mattews (Bernard) plc -- FOOD................ 74,479 107,384
11,600 Railtrack Group plc, Partly Paid -- RAILROAD
AND RAILROAD EQUIPMENT..................... 35,083 76,923
26,059 Reckitt & Colman plc -- HOUSEHOLD PRODUCTS... 290,453 322,860
8,650 Southern Electric
plc -- UTILITIES-ELECTRIC.................. 86,853 117,830
22,232 Tate & Lyle plc -- FOOD...................... 163,217 180,336
21,600 Unilever plc -- CONSUMER GOODS............... 428,321 523,596
17,700 WPP Group plc -- ADVERTISING-PUBLIC
RELATIONS.................................. 36,181 76,937
------------ ------------
1,342,696 1,610,036
------------ ------------
UNITED STATES-19.62%
4,200 Aluminum Company of
America -- METALS-FABRICATING.............. 211,484 267,750
1,300 AMR Corp. (a) -- AIRLINES.................... 75,878 114,562
4,050 AT & T Corp. -- UTILITIES-TELEPHONE.......... 169,678 176,175
9,500 Bank of New York Co., Inc. -- BANKS.......... 206,521 320,625
3,000 Beazer Homes USA, Inc. (a) -- MANUFACTURED
HOMES...................................... 43,950 55,500
8,800 Browning-Ferris Industries, Inc. -- WASTE
DISPOSAL................................... 235,764 231,000
19,000 Cadiz Land Co., Inc. (a) -- LAND
DEVELOPMENT................................ 108,321 98,562
15,850 Comsat Corp. -- TELECOMMUNICATIONS........... 307,316 390,306
34,250 Data General Corp.
(a) -- COMPUTER-SOFTWARE................... 400,876 496,625
1,850 Echlin, Inc. -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 62,856 58,506
18,300 Egghead, Inc. (a) -- RETAIL-SPECIALTY........ 163,751 96,075
6,800 Enhance Financial Services Group,
Inc. -- INSURANCE.......................... 123,144 248,200
3,900 Equitable Companies, Inc. -- INSURANCE....... 81,220 96,037
6,000 Finova Group, Inc. -- FINANCE SERVICES....... 241,239 385,500
3,850 General Motors Corp. -- AUTOMOBILE
MANUFACTURERS.............................. 191,334 214,637
13,000 GenRad, Inc. (a) -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 73,818 302,250
2,850 Georgia Pacific Corp. -- FOREST PRODUCTS..... 205,129 205,200
</TABLE>
38
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b)(e) Value (c)(e)
--------- ------------ ------------
<C> <S> <C> <C>
5,900 Greenfield Industries,
Inc. -- MACHINERY-TOOLS.................... $ 144,100 $ 180,688
4,950 Houghton Mifflin Co. -- PUBLISHING........... 208,454 280,294
21,800 Intelidata Technologies Corp.
(a) -- TELECOMMUNICATIONS.................. 204,956 158,050
4,895 Limited (The), Inc. -- RETAIL-CLOTHING....... 85,521 89,946
1,312 Lucent Technologies,
Inc. -- TELECOMMUNICATIONS................. 62,052 60,680
5,300 Lukens, Inc. -- STEEL AND IRON............... 152,922 106,663
2,550 MBIA, Inc. -- INSURANCE...................... 177,327 258,187
7,600 MCI Communications
Corp. -- UTILITIES-TELEPHONE............... 183,214 248,425
4,000 Mellon Bank Corp. -- BANKS................... 161,649 284,000
3,400 Novell, Inc. (a) -- COMPUTER-SOFTWARE........ 43,768 32,194
7,400 Penncorp Financial Group, Inc. -- FINANCE
SERVICES................................... 244,103 266,400
2,100 Philip Morris Companies, Inc. -- TOBACCO..... 149,888 236,513
1,298 Silicon Graphics, Inc. (a) -- OFFICE
EQUIPMENT AND SUPPLIES..................... 33,198 33,099
3,450 Tandy Corp. -- OFFICE EQUIPMENT AND
SUPPLIES................................... 136,061 151,800
1,700 Tecumseh Products Co. Cl A -- MACHINERY...... 83,600 97,537
29,400 UST Corp. -- BANKS........................... 440,001 606,375
15,500 Waban, Inc. (a) -- RETAIL-MISCELLANEOUS...... 342,116 403,000
15,200 WorldCorp, Inc. (a) -- TRANSPORTATION........ 138,291 66,500
------------ ------------
5,893,500 7,317,861
------------ ------------
TOTAL COMMON STOCKS.......................... $15,265,343 $18,116,187
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-0.21%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b)(e) Value (c)(e)
--------- ----------- ------------
<C> <S> <C> <C>
GERMANY-0.21%
250 Volkswagen AG -- AUTOMOBILE MANUFACTURERS.... $ 53,169 $ 79,651
----------- ------------
</TABLE>
LONG-TERM FOREIGN BONDS-INVESTMENT GRADE-26.45%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (e) (Unaudited) Cost (b)(e) Value (c)(e)
--------------- ----------- ----------- ------------
<C> <S> <C> <C> <C>
AUSTRALIA-0.48%
$ 200,000 Australian Government (Australian dollar),
9.50% 8-15-2003............................ AAA $ 168,248 $ 177,810
----------- ------------
CANADA-2.73%
710,000 Canadian Government (Canadian Dollar), 7.50%
12-1-2003.................................. AA+ 524,659 560,229
400,000 Canadian Government (Canadian Dollar), 7.50%
3-1-2001................................... AAA 315,499 314,904
150,000 Canadian Government (Canadian Dollar), 9.75%
6-1-2021................................... NR 133,125 143,508
----------- ------------
973,283 1,018,641
----------- ------------
DENMARK-1.75%
2,000,000 Kingdom of Denmark (Danish Krone), 7.00%
12-15-2004................................. NR 342,965 353,387
1,600,000 Kingdom of Denmark (Danish Krone), 8.00%
11-15-2001................................. NR 287,405 301,073
----------- ------------
630,370 654,460
----------- ------------
FRANCE-1.09%
1,900,000 French Treasury Bill (French Franc), 7.75%
4-12-2000.................................. Aaa* 399,750 406,406
----------- ------------
GERMANY-6.02%
300,000 German Government (German Deutschemark),
6.25% 1-4-2024............................. NR 183,774 184,757
500,000 German Government (German Deutschemark),
6.50% 7-15-2003............................ Aaa* 343,675 345,011
1,000,000 German Government (German Deutschemark),
8.50% 8-21-2000............................ Aaa* 751,130 737,456
980,000 German Unity Fund (German Deutschemark),
8.00% 1-21-2002............................ NR 724,698 723,979
350,000 Treuhandanstalt (German Deutschemark), 7.50%
9-9-2004................................... AAA 254,547 253,726
----------- ------------
2,257,824 2,244,929
----------- ------------
</TABLE>
39
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
LONG-TERM FOREIGN BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (e) (Unaudited) Cost (b)(e) Value (c)(e)
--------------- ----------- ----------- ------------
<C> <S> <C> <C> <C>
IRELAND-1.22%
$ 150,000 Irish Government (Irish Punt), 6.25%
4-1-1999................................... NR $ 241,265 $ 255,273
----------- ------------
ITALY-2.38%
1,000,000,000 Italian Government (Italian Lira), 10.50%
7-15-2000.................................. AAA 695,263 736,731
200,000,000 Italian Government BTP (Italian Lira), 9.50%
Bond 2-1-2006.............................. AAA 140,109 149,951
----------- ------------
835,372 886,682
----------- ------------
JAPAN-2.33%
20,000,000 Int'l Bank Reconstruction & Development
(Japanese Yen), 5.25% 03-20-2002........... AAA 211,488 201,495
44,000,000 Int'l Bank Reconstruction & Development
(Japanese Yen), 4.75% 12-20-2004........... AAA 462,396 441,630
41,000,000 Japan Development Bank (Japanese Yen), 6.50%
9-20-2001.................................. Aaa* 481,040 429,401
----------- ------------
1,154,924 1,072,526
----------- ------------
SPAIN-0.88%
35,000,000 Bonos Y Obligation Del Estado (Spanish
Peseta), 10.50% 10-30-2003................. NR 327,194 327,115
----------- ------------
SWEDEN-3.37%
1,100,000 Swedish Government (Swedish Krona), 10.25%
5-5-2000................................... NR 157,577 186,083
3,000,000 Swedish Government (Swedish Krona), 13.00%
6-15-2001.................................. NR 537,976 566,479
1,500,000 Swedish Government (Swedish Krona), 6.00%
2-9-2005................................... NR 211,505 212,890
300,000 Swedish Government (US Dollar), 4.50%
3-24-1999.................................. AA+ 287,557 291,563
----------- ------------
1,194,615 1,257,015
----------- ------------
UNITED KINGDOM-4.20%
250,000 United Kingdom Treasury (British pound),
10.00% 9-8-2003............................ Aaa* 451,216 485,314
350,000 United Kingdom Treasury (British Pound),
7.75% 9-8-2006............................. Aaa* 595,025 607,939
250,000 United Kingdom Treasury (British Pound),
9.75% 8-27-2002............................ Aaa* 444,917 474,217
----------- ------------
1,491,158 1,567,470
----------- ------------
TOTAL LONG-TERM FOREIGN BONDS - INVESTMENT
GRADE...................................... $9,674,003 $ 9,868,327
----------- ------------
----------- ------------
</TABLE>
U.S. GOVERNMENT SECURITIES-10.46%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount (e) Cost (b)(e) Value (c)(e)
----------- ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-10.46%
NOTES:
$1,050,000 5.625% 2001.................................. $ 1,030,931 $ 1,029,327
1,050,000 6.25% 2000................................... 1,057,184 1,054,594
900,000 7.25% 2004................................... 944,186 947,250
800,000 7.875% 2004.................................. 860,400 873,000
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 3,892,701 3,904,171
------------ ------------
TOTAL LONG-TERM DEBT SECURITIES.............. $13,566,704 $13,772,498
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $28,885,216 $31,968,336
------------ ------------
------------ ------------
</TABLE>
40
<PAGE>
SHORT-TERM INVESTMENTS-13.26%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount (e) Value (c)(e)
----------- ------------
<C> <S> <C>
BANKS-13.26%
$4,946,490 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 4,946,490
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$33,831,706) (b)........................... $36,914,826
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $33,831,706 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 3,922,000
Unrealized depreciation..................................... (838,880)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 3,083,120
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(e) Cost and market value is stated in U.S. dollars; principal amount is stated
in the currency indicated.
* Moody's Rating
41
<PAGE>
FORTIS SERIES FUND, INC.
VALUE SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-88.97%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.87%
5,500 Interpublic Group of Companies, Inc.......... $ 259,370 $ 261,250
------------ ------------
AEROSPACE AND EQUIPMENT-0.69%
900 Boeing Co.................................... 76,461 95,737
------------ ------------
AIR FREIGHT-1.59%
5,000 Federal Express Corp. (a).................... 191,600 222,500
------------ ------------
BANKS-6.74%
7,100 Bank of New York Co., Inc.................... 208,336 239,625
2,500 BankAmerica Corp............................. 242,813 249,375
2,000 Citicorp..................................... 181,517 206,000
3,600 First Bank System, Inc....................... 252,324 245,700
------------ ------------
884,990 940,700
------------ ------------
BROADCASTING-2.76%
16,300 Comcast Corp., Special Class A............... 273,841 290,344
2,700 Viacom, Inc. Class B (a)..................... 99,553 94,162
------------ ------------
373,394 384,506
------------ ------------
BROKERAGE AND INVESTMENT-0.44%
750 Merrill Lynch & Co., Inc..................... 46,292 61,125
------------ ------------
BUILDING MATERIALS-1.99%
6,500 Owens Corning................................ 256,185 277,062
------------ ------------
BUSINESS SERVICES AND SUPPLIES-3.50%
13,600 ADT, Ltd. (a)................................ 262,403 311,100
3,700 Flightsafety International, Inc.............. 163,843 177,137
------------ ------------
426,246 488,237
------------ ------------
CHEMICALS-0.90%
3,200 IMC Global, Inc.............................. 124,973 125,200
------------ ------------
CHEMICALS-SPECIALTY-4.67%
4,800 Cabot Corp................................... 124,082 120,600
6,100 Mallinckrodt Group, Inc...................... 248,371 269,162
4,200 Sigma-Aldrich Corp........................... 226,343 262,237
------------ ------------
598,796 651,999
------------ ------------
COMPUTER-SOFTWARE-0.92%
3,500 Fiserv, Inc. (a)............................. 124,865 128,625
------------ ------------
CONTAINERS AND PACKAGING-0.93%
2,400 Crown Cork & Seal Company, Inc. (a).......... 122,772 130,500
------------ ------------
DRUGS-2.88%
3,000 Johnson & Johnson............................ 150,645 149,250
3,900 Schering-Plough Corp......................... 234,476 252,525
------------ ------------
385,121 401,775
------------ ------------
ELECTRICAL EQUIPMENT-2.34%
3,300 General Electric Co.......................... 286,807 326,287
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.90%
3,000 Cooper Industries, Inc....................... 121,795 126,375
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-3.61%
4,200 Avnet, Inc................................... 200,326 244,650
11,100 Vishay Intertechnology, Inc. (a)............. 233,061 259,463
------------ ------------
433,387 504,113
------------ ------------
FINANCE SERVICES-0.92%
2,000 Finova Group, Inc............................ 124,180 128,500
------------ ------------
FOOD-6.26%
5,600 Archer-Daniels-Midland Co.................... 121,923 123,200
4,900 ConAgra, Inc................................. 216,836 243,775
3,500 Heinz (H.J.) Co.............................. 124,316 125,125
5,000 Sara Lee Corp................................ 171,667 186,250
6,000 Sysco Corp................................... 191,843 195,750
------------ ------------
826,585 874,100
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
HEALTH CARE SERVICES-2.28%
7,800 Columbia/HCA Healthcare Corp................. $ 284,261 $ 317,850
------------ ------------
HOUSEHOLD PRODUCTS-1.00%
1,300 Procter & Gamble Co.......................... 114,585 139,750
------------ ------------
MACHINERY-0.93%
5,100 Pall Corp.................................... 131,682 130,050
------------ ------------
MACHINERY-SPECIALTY-1.84%
3,200 Grainger (W.W.), Inc......................... 235,837 256,800
------------ ------------
METALS-MINING AND MISCELLANEOUS-1.63%
5,000 Cleveland-Cliffs, Inc........................ 195,536 226,875
------------ ------------
NATURAL GAS TRANSMISSIONS-3.07%
4,700 Enron Corp................................... 205,487 202,688
6,000 Williams Companies, Inc...................... 197,584 225,000
------------ ------------
403,071 427,688
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-4.20%
1,500 International Business Machines Corp......... 150,682 226,500
3,300 Pitney Bowes, Inc............................ 158,827 179,850
3,400 Xerox Corp................................... 177,133 178,925
------------ ------------
486,642 585,275
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-5.16%
3,000 Anadarko Petroleum Corp...................... 166,958 194,250
3,200 Exxon Corp................................... 268,066 313,600
9,500 Union Texas Petroleum Holdings, Inc.......... 194,005 212,563
------------ ------------
629,029 720,413
------------ ------------
OIL-REFINING-1.90%
2,000 Atlantic Richfield Co........................ 263,868 265,000
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.53%
2,200 Emerson Electric Co.......................... 185,238 212,850
------------ ------------
PRINTING-0.84%
5,800 Unisource Worldwide, Inc. (a)................ 117,748 117,450
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-1.80%
2,900 Burlington Northern Santa Fe Corp............ 241,560 250,488
------------ ------------
REAL ESTATE-INVESTMENT TRUST-4.05%
6,200 Developers Diversified Realty Corp........... 196,398 230,175
9,600 Kimco Realty Corp............................ 272,207 334,800
------------ ------------
468,605 564,975
------------ ------------
RECREATION EQUIPMENT-0.89%
6,800 International Game Technology................ 121,958 124,100
------------ ------------
RETAIL-DEPARTMENT STORES-3.07%
6,400 Federated Department Stores, Inc. (a)........ 210,226 218,400
4,500 May Department Stores Co..................... 206,678 210,375
------------ ------------
416,904 428,775
------------ ------------
RETAIL-SPECIALTY-1.76%
4,900 Home Depot, Inc.............................. 263,046 245,613
------------ ------------
TELECOMMUNICATIONS-3.71%
4,400 Ameritech Corp............................... 246,104 266,750
5,200 Nynex Corp................................... 235,219 250,250
------------ ------------
481,323 517,000
------------ ------------
TOBACCO-1.70%
2,100 Philip Morris Companies, Inc................. 240,786 236,513
------------ ------------
UTILITIES-TELEPHONE-3.70%
4,900 SBC Communications, Inc...................... 246,497 253,575
6,600 Sprint Corp.................................. 266,178 263,175
------------ ------------
512,675 516,750
------------ ------------
TOTAL COMMON STOCKS.......................... $ 11,458,173 $ 12,412,806
------------ ------------
------------ ------------
</TABLE>
42
<PAGE>
PREFERRED STOCKS-1.63%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
PAPER-1.63%
7,200 James River Corp. of Virginia Conv. Ser P
Preferred.................................. $ 185,600 $ 226,800
------------ ------------
TOTAL EQUITY INVESTMENTS..................... $11,643,773 $12,639,606
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-10.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
BANKS-2.97%
$414,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 414,000
------------
DIVERSIFIED FINANCE-4.34%
606,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 606,000
------------
U.S. GOVERNMENT AGENCY-3.58%
500,000 Federal National Mortgage Assoc., 5.40%,
1-7-1997................................... 499,485
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,519,485
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$13,163,258) (b)........................... $14,159,091
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $13,172,569 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,067,965
Unrealized depreciation..................................... (81,443)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $ 986,522
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
43
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-81.40%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.92%
39,200 United Technologies Corp..................... $ 2,250,682 $ 2,587,200
------------ -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.19%
27,000 Genuine Parts Co............................. 1,079,390 1,201,500
39,000 Tenneco, Inc. (a)............................ 1,784,915 1,759,875
------------ -------------
2,864,305 2,961,375
------------ -------------
BANKS-4.08%
55,000 Banc One Corp................................ 1,981,037 2,365,000
22,000 Chase Manhattan Corp......................... 1,858,455 1,963,500
30,000 Union Planters Corp.......................... 1,041,287 1,170,000
------------ -------------
4,880,779 5,498,500
------------ -------------
BUSINESS SERVICES AND SUPPLIES-1.07%
31,500 Omnicom Group, Inc........................... 969,907 1,441,125
------------ -------------
DIVERSIFIED COMPANIES-2.53%
25,500 Chemed Corp.................................. 901,850 930,750
30,000 Minnesota Mining and Manufacturing Co........ 1,860,371 2,486,250
------------ -------------
2,762,221 3,417,000
------------ -------------
DRUGS-9.10%
29,300 Abbott Laboratories.......................... 1,110,928 1,486,975
33,000 American Home Products Corp.................. 1,437,860 1,934,625
33,000 Lilly (Eli) & Co., Inc....................... 1,489,560 2,409,000
30,000 Merck & Co., Inc............................. 1,642,851 2,377,500
20,000 Pfizer, Inc.................................. 932,096 1,657,500
61,000 Pharmacia and UpJohn, Inc.................... 2,514,623 2,417,125
------------ -------------
9,127,918 12,282,725
------------ -------------
ELECTRICAL EQUIPMENT-1.45%
19,800 General Electric Co.......................... 1,277,216 1,957,725
------------ -------------
FINANCE SERVICES-9.95%
27,500 American Express Co.......................... 969,270 1,553,750
37,100 Beneficial Corp.............................. 1,802,661 2,351,212
43,200 Federal National Mortgage Association........ 975,787 1,609,200
33,000 Green Tree Financial Corp.................... 1,127,474 1,274,625
32,000 Household International, Inc................. 1,737,322 2,952,000
44,850 MBNA Corp.................................... 899,373 1,861,275
19,600 Student Loan Marketing Association........... 1,020,328 1,825,250
------------ -------------
8,532,215 13,427,312
------------ -------------
FOOD-3.75%
55,000 ConAgra, Inc................................. 2,380,104 2,736,250
65,000 Heinz (H.J.) Co.............................. 2,076,425 2,323,750
------------ -------------
4,456,529 5,060,000
------------ -------------
HAND TOOLS AND GENERAL HARDWARE-1.78%
67,500 Snap-On, Inc................................. 2,030,431 2,404,687
------------ -------------
HOUSEHOLD PRODUCTS-1.40%
18,800 Clorox Co.................................... 1,266,517 1,887,050
------------ -------------
INSURANCE-1.20%
41,000 Safeco Corp.................................. 1,399,125 1,616,937
------------ -------------
MACHINERY-OIL AND WELL-1.88%
41,000 Dresser Industries, Inc...................... 892,957 1,271,000
21,000 Halliburton Co............................... 786,965 1,265,250
------------ -------------
1,679,922 2,536,250
------------ -------------
</TABLE>
44
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
MEDICAL SUPPLIES-1.67%
55,000 Baxter International, Inc.................... $ 2,002,824 $ 2,255,000
------------ -------------
NATURAL GAS TRANSMISSIONS-9.60%
57,127 El Paso Natural Gas Co....................... 1,836,879 2,884,914
41,500 Enron Corp................................... 1,467,824 1,789,688
84,500 PanEnergy Corp............................... 2,520,241 3,802,500
41,600 Sonat, Inc................................... 1,352,679 2,142,400
62,250 Williams Companies, Inc...................... 1,586,546 2,334,375
------------ -------------
8,764,169 12,953,877
------------ -------------
OIL-CRUDE PETROLEUM AND GAS-6.50%
22,000 Amoco Corp................................... 1,454,173 1,771,000
40,300 Baker Hughes, Inc............................ 842,123 1,390,350
24,000 Exxon Corp................................... 1,982,160 2,352,000
24,000 Kerr-McGee Corp.............................. 1,331,177 1,728,000
94,800 Monterey Resources, Inc. (a)................. 1,436,694 1,528,650
------------ -------------
7,046,327 8,770,000
------------ -------------
PUBLISHING-2.10%
37,800 McGraw Hill Companies, Inc................... 1,492,990 1,743,525
27,000 Readers Digest Association, Inc. Class A
Non-Voting................................. 1,234,707 1,086,750
------------ -------------
2,727,697 2,830,275
------------ -------------
RAILROAD AND RAILROAD EQUIPMENT-1.00%
76,500 Tranz Rail Holdings, Ltd. ADR (a)............ 956,250 1,353,094
------------ -------------
REAL ESTATE-INVESTMENT TRUST-2.99%
71,000 Beacon Properties Corp....................... 2,183,250 2,600,375
42,500 Highwoods Properties, Inc.................... 1,253,750 1,434,375
------------ -------------
3,437,000 4,034,750
------------ -------------
RETAIL-DEPARTMENT STORES-0.92%
26,800 Sears Roebuck & Co........................... 886,773 1,236,150
------------ -------------
RETAIL-SPECIALTY-1.96%
77,000 Intimate Brands, Inc......................... 1,137,947 1,309,000
33,500 Rite Aid Corp................................ 809,055 1,331,625
------------ -------------
1,947,002 2,640,625
------------ -------------
TELECOMMUNICATIONS-0.56%
16,204 Lucent Technologies, Inc..................... 736,008 749,435
------------ -------------
TOBACCO-3.02%
30,000 American Brands, Inc......................... 1,216,046 1,488,750
23,000 Philip Morris Companies, Inc................. 1,794,669 2,590,375
------------ -------------
3,010,715 4,079,125
------------ -------------
UTILITIES-TELEPHONE-8.78%
50,000 AT & T Corp.................................. 2,012,265 2,175,000
43,000 Deutsche Telekom AG ADR (a).................. 812,270 876,125
53,400 Frontier Corp................................ 1,369,424 1,208,175
45,000 GTE Corp..................................... 1,932,878 2,047,500
40,500 Sprint Corp.................................. 1,437,021 1,614,938
23,000 Telecom Corp. of New Zealand Ltd. ADR........ 1,432,604 1,863,000
64,000 US West Communications Group................. 1,988,480 2,064,000
------------ -------------
10,984,942 11,848,738
------------ -------------
TOTAL COMMON STOCKS.......................... $85,997,474 $ 109,828,955
------------ -------------
------------ -------------
</TABLE>
45
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
PREFERRED STOCKS-4.79%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ -------------
<C> <S> <C> <C>
CONTAINERS AND PACKAGING-1.46%
37,900 Crown Cork and Seal Co., Inc. Convertible
Preferred 4.50%............................ $ 1,677,075 $ 1,970,800
------------ -------------
INSURANCE-2.97%
95,000 Sunamerica, Inc. Convertible Preferred 8.50%
(a)........................................ 3,564,404 4,013,750
------------ -------------
OIL-CRUDE PETROLEUM AND GAS-0.36%
9,000 Nuevo Energy Co. Convertible Preferred Series
A.......................................... 450,000 482,625
------------ -------------
TOTAL PREFERRED STOCKS....................... $ 5,691,479 $ 6,467,175
------------ -------------
------------ -------------
TOTAL EQUITY INVESTMENTS..................... $91,688,953 $ 116,296,130
------------ -------------
------------ -------------
</TABLE>
SHORT-TERM INVESTMENTS-12.78%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-4.48%
$6,044,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 6,044,000
-------------
DIVERSIFIED FINANCE-2.97%
4,005,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.29%...................... 4,005,000
-------------
U.S. GOVERNMENT AGENCY-5.33%
7,200,000 Federal National Mortgage Assoc., 5.40%,
1-7-1997................................... 7,192,580
-------------
TOTAL SHORT-TERM INVESTMENTS................. 17,241,580
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$108,930,533) (B).......................... $ 133,537,710
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $108,930,533 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $25,183,661
Unrealized depreciation..................................... (576,484)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $24,607,177
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 3.03% of net assets as of December 31, 1996.
46
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-97.77%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
BASIC INDUSTRY-5.51%
700 Air Products & Chemicals..................... $ 45,414 $ 48,387
500 Alco Standard Corp........................... 26,087 25,812
1,300 Allied Signal, Inc........................... 82,177 87,100
100 Armstrong World Industry..................... 5,579 6,950
400 Ashland, Inc................................. 17,058 17,550
200 Avery Dennison Corp.......................... 5,440 7,075
100 Ball Corp.................................... 2,979 2,600
100 Bemis, Inc................................... 3,140 3,687
100 Boise Cascade Corp........................... 4,391 3,175
400 Centex Corp.................................. 12,291 15,050
200 Champion International Corp.................. 8,719 8,650
500 Crown Cork & Seal............................ 23,725 27,187
900 Dow Chemical Co.............................. 73,648 70,537
2,200 Du Pont (E.I.) De Nemours.................... 189,265 207,625
300 Eastman Chemical Co.......................... 18,136 16,575
700 Engelhard Corp............................... 15,324 13,387
300 Fluor Corp................................... 19,111 18,825
100 FMC Corp. (a)................................ 6,766 7,012
100 Foster Wheeler Corp.......................... 4,566 3,712
300 Georgia-Pacific Corp......................... 22,273 21,600
300 Goodrich (B.F.) Co........................... 12,430 12,150
200 Grace (W. R.) & Co........................... 10,126 10,350
200 Great Lakes Chemical......................... 12,634 9,350
400 Hercules, Inc................................ 22,765 17,300
1,200 International Paper.......................... 50,234 48,450
600 James River Corp. of Virginia................ 15,720 19,875
1,000 Kimberly Clark Corp.......................... 81,399 95,250
200 Louisiana Pacific Corp....................... 4,784 4,225
600 Masco Corp................................... 19,405 21,600
200 Mead Corp.................................... 11,171 11,625
2,000 Monsanto Co.................................. 68,878 77,750
400 Morton International, Inc.................... 14,681 16,300
300 Nalco Chemical Co............................ 10,323 10,837
1,200 Occidental Petroleum Corp.................... 29,823 28,050
100 Potlatch Corp................................ 4,229 4,300
700 PPG Industries, Inc.......................... 37,063 39,287
700 Praxair, Inc................................. 29,676 32,287
200 Rohm & Haas Co............................... 13,269 16,325
100 Sherwin Williams Co.......................... 4,465 5,600
300 Sigma Aldrich Corp........................... 16,027 18,731
600 Stone Container Corp......................... 8,320 8,925
100 Temple Inland, Inc........................... 4,665 5,412
100 Union Camp Corp.............................. 4,978 4,775
400 Union Carbide Corp. Holdings Co.............. 18,333 16,350
700 Westvaco Corp................................ 20,241 20,125
500 Weyerhaeuser Co.............................. 22,734 23,687
300 Willamette Industries, Inc................... 19,025 20,887
------------ ------------
1,153,487 1,212,299
------------ ------------
CAPITAL SPENDING-21.78%
600 3 Com Corp. (a).............................. 30,645 44,025
600 Advanced Micro Devices (a)................... 7,970 15,450
100 Alexander & Alexander........................ 2,006 1,737
100 Amdahl Corp. (a)............................. 847 1,212
900 Amp, Inc..................................... 33,594 34,537
100 Andrew Corp. (a)............................. 3,850 5,306
600 Apple Computer, Inc. (a)..................... 14,931 12,525
800 Applied Materials, Inc. (a).................. 24,786 28,750
100 Autodesk, Inc................................ 3,942 2,800
1,000 Automatic Data Processing.................... 40,709 42,875
600 Bay Networks, Inc. (a)....................... 17,203 12,525
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
500 Block H & R, Inc............................. $ 13,769 $ 14,500
1,033 Boeing Co.................................... 91,975 109,885
100 Briggs & Stratton Corp....................... 4,379 4,400
700 Browning Ferris Industries................... 20,094 18,375
800 Cabletron System, Inc. (a)................... 25,227 26,600
200 Case Corp.................................... 9,771 10,900
900 Caterpillar, Inc............................. 64,006 67,725
400 Ceridian Corp. (a)........................... 18,296 16,200
100 Cincinnati Milacron.......................... 2,618 2,187
2,600 Cisco Systems, Inc. (a)...................... 146,745 165,425
800 Cognizant Corp............................... 26,729 26,400
1,000 Compaq Computer Corp. (a).................... 50,026 74,250
1,600 Computer Association International........... 88,181 79,600
300 Computer Sciences (a)........................ 22,761 24,637
500 Cooper Industries............................ 20,012 21,062
150 Crane Co..................................... 4,168 4,350
1,550 CUC International, Inc. (a).................. 37,199 36,812
100 Cummins Engine, Inc.......................... 4,593 4,600
200 Data General Corp. (a)....................... 2,512 2,900
1,100 Deere & Co................................... 43,988 44,687
600 Dell Computer Corp. (a)...................... 21,437 31,875
400 Deluxe Corp.................................. 14,452 13,100
300 Digital Equipment Corp. (a).................. 14,537 10,912
600 Dover Corp................................... 29,685 30,150
600 Dresser Industries, Inc...................... 16,730 18,600
400 DSC Communications (a)....................... 11,037 7,150
300 Dun & Bradstreet............................. 6,795 7,125
900 E M C Corp. (a).............................. 18,481 29,812
300 Eaton Corp................................... 17,415 20,925
100 EG & G, Inc.................................. 2,066 2,012
1,000 Emerson Electric Co.......................... 89,119 96,750
1,700 First Data Corp.............................. 65,058 62,050
200 General Dynamics Corp........................ 12,971 14,100
6,100 General Electric Co.......................... 529,638 603,137
100 General Signal Corp.......................... 3,841 4,275
500 Genuine Parts Co............................. 22,575 22,250
100 Giddings & Lewis, Inc........................ 1,875 1,287
200 Grainger (W.W.), Inc......................... 13,809 16,050
300 Harnischfeger Industries..................... 12,274 14,437
100 Harris Corp.................................. 6,243 6,862
4,000 Hewlett Packard Co........................... 186,437 201,000
400 Honeywell, Inc............................... 21,133 26,300
400 Illinois Tool Works, Inc..................... 25,933 31,950
600 Ingersoll Rand Co............................ 26,583 26,700
3,000 Intel Corp................................... 286,851 392,812
200 Intergraph Corp. (a)......................... 2,300 2,050
2,000 International Business Machines.............. 245,638 302,000
300 Interpublic Group............................ 14,261 14,250
600 ITT Industries, Inc.......................... 14,358 14,700
100 Johnson Controls, Inc........................ 6,904 8,287
1,000 Laidlaw, Inc. ADR............................ 10,038 11,500
700 Lockheed Martin Corp......................... 57,236 64,050
300 LSI Logic Corp. (a).......................... 8,302 8,025
100 McDermott International, Inc................. 1,940 1,662
1,200 McDonnell Douglas Corp....................... 59,957 76,800
1,400 Micron Technology, Inc....................... 41,379 40,775
4,500 Microsoft Corp. (a).......................... 284,324 371,812
1,800 Minnesota Mining & Manufacturing Co.......... 127,402 149,175
2,300 Motorola, Inc................................ 124,721 141,162
600 National Semiconductor (a)................... 8,990 14,625
100 National Service Industry.................... 3,893 3,737
900 Northern Telecom, Ltd........................ 45,350 55,687
</TABLE>
47
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
200 Northrop Grumman Co.......................... $ 13,772 $ 16,550
1,300 Novell, Inc. (a)............................. 14,824 12,309
2,800 Oracle System Corp. (a)...................... 105,502 116,900
100 Owens Corning................................ 4,040 4,262
600 Pall Corp.................................... 14,870 15,300
200 Parker Hannifin Corp......................... 7,459 7,750
100 Perkin Elmer Corp............................ 5,191 5,887
600 Pitney Bowes, Inc............................ 31,733 32,700
100 Raychem Corp................................. 7,556 8,012
900 Raytheon Co.................................. 47,446 43,312
800 Rockwell International Corp.................. 41,729 48,700
400 Ryder System, Inc............................ 11,796 11,250
400 Safety Kleen Corp............................ 6,071 6,550
100 Scientific Atlanta........................... 1,790 1,500
1,000 Seagate Technology (a)....................... 26,155 39,500
1,100 Service Corp. International.................. 30,241 30,800
100 Shared Medical System Corp................... 6,355 4,925
300 Silicon Graphics (a)......................... 7,385 7,650
300 Snap-On, Inc................................. 9,533 10,687
200 Stanley Works................................ 6,266 5,400
2,000 Sun Microsystem, Inc. (a).................... 56,060 51,375
600 Tandem Computers, Inc. (a)................... 6,483 8,250
100 Tektronix, Inc............................... 3,816 5,125
800 Tellabs, Inc. (a)............................ 27,838 30,100
800 Texas Instruments, Inc....................... 39,442 51,000
200 Textron, Inc................................. 16,521 18,850
200 Thomas & Betts Corp.......................... 7,883 8,875
100 Timken Co.................................... 4,091 4,587
100 Trinova Corp................................. 3,431 3,637
400 TRW, Inc..................................... 18,483 19,800
500 Tyco International, Ltd., Class B............ 19,924 26,437
700 Unisys Corp. (a)............................. 4,501 4,725
1,000 United Technologies Corp..................... 60,277 66,000
1,700 WMX Technologies, Inc........................ 56,160 55,462
1,400 Xerox Corp................................... 68,180 73,675
------------ ------------
4,184,304 4,786,997
------------ ------------
CONSUMER DISCRETIONARY-11.67%
600 Albertsons, Inc.............................. 23,305 21,375
300 American Greetings Corp...................... 8,573 8,512
600 American Stores Co........................... 23,183 24,525
400 Black & Decker Mfg. Co....................... 15,817 12,050
500 Brunswick Corp............................... 11,514 12,000
600 Charming Shoppes, Inc. (a)................... 3,528 3,037
3,100 Chrysler Corp................................ 98,537 102,300
200 Circuit City Stores.......................... 6,032 6,025
1,400 Comcast Corp................................. 23,897 24,937
300 Cooper Tire & Rubber......................... 6,898 5,925
200 CVS Corp..................................... 6,552 8,275
200 Dana Corp.................................... 6,207 6,525
900 Darden Restaurant............................ 8,698 7,875
1,100 Dayton Hudson Corp........................... 37,122 43,175
200 Dillard Department Stores.................... 7,119 6,175
2,800 Disney (Walt) Co. Holdings................... 182,010 194,950
700 Donnelley (R.R.) & Sons...................... 22,798 21,962
200 Dow Jones & Co., Inc......................... 7,796 6,775
100 Echlin, Inc.................................. 3,665 3,162
1,200 Federated Department Stores (a).............. 40,603 40,950
100 Fleetwood Enterprises........................ 2,516 2,750
200 Fleming Co., Inc............................. 3,108 3,450
4,800 Ford Motor Co................................ 159,249 153,000
300 Fruit of the Loom, Inc. (a).................. 9,040 11,362
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
400 Gannett, Inc................................. $ 27,344 $ 29,950
1,100 Gap, Inc..................................... 33,368 33,137
600 General Instruments Corp. (a)................ 14,694 12,975
2,700 General Motors Corp.......................... 141,863 150,525
200 Giant Foods, Inc............................. 6,696 6,900
600 Goodyear Tire & Rubber Co.................... 29,386 30,825
100 Great Atlantic & Pacific Tea Co.............. 3,406 3,187
200 Harcourt General, Inc........................ 9,396 9,225
100 Harland John H. Co........................... 2,691 3,300
200 Harrah's Entertainment, Inc. (a)............. 5,334 3,975
400 Hasbro, Inc.................................. 16,033 15,550
500 HFS, Inc. (a)................................ 32,030 29,875
1,000 Hilton Hotels Corp........................... 27,078 26,125
2,000 Home Depot, Inc.............................. 105,686 100,250
300 ITT Corp. (a)................................ 18,173 13,012
100 Jostens, Inc................................. 1,981 2,112
1,700 K Mart Corp. (a)............................. 18,063 17,637
100 King World Productions, Inc. (a)............. 4,141 3,687
500 Knight-Ridder, Inc........................... 18,884 19,125
200 Kroger Co. (a)............................... 8,034 9,300
1,000 Limited (The), Inc........................... 20,334 18,375
400 Liz Claiborne, Inc........................... 13,693 15,450
100 Longs Drug Stores, Inc....................... 4,429 4,912
500 Lowe's Companies, Inc........................ 17,749 17,750
100 Luby's Cafeterias, Inc....................... 2,429 1,987
400 Mariott International, Inc................... 21,171 22,100
1,000 Mattel, Inc.................................. 26,259 27,750
900 May Department Stores Co..................... 42,033 42,075
400 Maytag Corp.................................. 8,131 7,900
2,900 McDonald's Corp.............................. 133,999 131,225
500 McGraw Hill Companies, Inc................... 22,405 23,062
100 Mercantile Stores Co., Inc................... 6,104 4,938
100 Meredith Corp................................ 4,604 5,275
200 Moore Corp., Ltd............................. 3,857 4,075
100 Nacco Industries, Inc........................ 6,116 5,350
100 Navistar International Corp. (a)............. 1,040 913
400 New York Times Co............................ 13,519 15,200
1,000 Nike, Inc., Class B.......................... 52,400 59,750
300 Nordstrom, Inc............................... 13,000 10,631
100 Paccar, Inc.................................. 4,600 6,800
900 Penney (J.C.), Inc........................... 46,431 43,875
100 Pep Boys Manny Moe & Jack.................... 3,328 3,075
800 Price/Costco, Inc. (a)....................... 15,861 20,100
200 Reebok International, Ltd.................... 6,319 8,400
200 Rite Aid Corp................................ 6,394 7,950
100 Russell Corp................................. 2,818 2,975
600 Ryans Family Steak (a)....................... 4,622 4,125
1,800 Sears Roebuch & Co........................... 84,627 83,025
200 Shoneys, Inc. (a)............................ 2,183 1,400
100 Springs Industries, Inc., Class A............ 4,416 4,300
100 Stride Rite Corp............................. 904 1,000
600 Supervalu, Inc............................... 16,833 17,025
1,000 Sysco Corp................................... 33,241 32,625
200 Tandy Corp................................... 8,894 8,800
2,100 Tele-Communications TCI Group, Inc. (a)...... 30,999 27,431
800 Tenneco, Inc. (a)............................ 35,901 36,100
2,100 Time Warner, Inc............................. 83,424 78,750
400 Times Mirror Co., Class A.................... 17,331 19,900
300 TJX Companies, Inc........................... 9,290 14,213
1,000 Toys"R"US, Inc. (a).......................... 27,009 30,000
300 Tribune Co................................... 21,977 23,663
2,400 US West Media Group (a)...................... 45,634 44,400
</TABLE>
48
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
200 V F Corp..................................... $ 11,571 $ 13,500
1,400 Viacom, Inc., Class B (a).................... 52,905 48,825
8,800 Wal-Mart Stores, Inc......................... 224,294 201,300
900 Walgreen Co.................................. 31,546 36,000
800 Wendy's International, Inc................... 15,528 16,400
1,200 Westinghouse Electric Co..................... 21,706 23,850
100 Whirlpool Corp............................... 5,553 4,663
500 Winn Dixie Stores, Inc....................... 17,324 15,813
600 Woolworth Corp. (a).......................... 12,673 13,125
------------ ------------
2,561,456 2,563,870
------------ ------------
CONSUMER STAPLES-12.99%
100 Alberto-Culver Co............................ 3,743 4,800
1,000 American Brands, Inc......................... 45,764 49,625
1,700 Anheuser Busch Companies, Inc................ 61,769 68,000
2,070 Archer-Daniels Midland....................... 39,601 45,540
400 Avon Products, Inc........................... 18,527 22,850
200 Brown Forman Corp............................ 7,946 9,150
900 Campbell Soup Co............................. 61,871 72,225
200 Clorox Co.................................... 17,971 20,075
9,500 Coca Cola Co................................. 449,548 499,938
600 Colgate-Palmolive Co......................... 51,754 55,350
1,100 Conagra, Inc................................. 50,256 54,725
100 Coors Adolph Co., Class B.................... 1,818 1,900
800 CPC International, Inc....................... 60,079 62,000
1,200 Eastman Kodak Co............................. 87,480 96,300
300 Ecolab, Inc.................................. 9,824 11,288
500 General Mills, Inc........................... 28,760 31,688
2,000 Gillette Co.................................. 126,763 155,500
1,400 Heinz (H.J.) Co.............................. 48,494 50,050
800 Hershey Foods Corp........................... 32,971 35,000
200 International Flavors & Fragrance, Inc....... 9,382 9,000
5,400 Johnson & Johnson Co......................... 264,221 268,650
700 Kellogg Co................................... 49,903 45,938
300 Newell Co.................................... 8,423 9,450
6,100 Pepsico, Inc................................. 189,349 178,425
3,000 Philip Morris Co., Inc....................... 290,701 337,875
200 Pioneer Hi-Bred International................ 10,659 14,000
100 Polaroid Corp................................ 4,592 4,350
2,600 Procter & Gamble Co.......................... 241,865 279,500
400 Quaker Oats Co............................... 14,392 15,250
400 Ralston-Ralston Purina Group................. 26,857 29,350
700 Rubbermaid, Inc.............................. 20,136 15,925
1,900 Sara Lee Corp................................ 64,898 70,775
1,500 Seagrams, Ltd................................ 54,124 58,125
200 Tupperware Corp.............................. 8,219 10,725
500 Unilever N.V................................. 82,593 87,625
900 UST, Inc..................................... 27,769 29,138
200 Whitman Corp................................. 4,857 4,575
700 Wrigley Jr., William Co...................... 39,437 39,375
------------ ------------
2,617,316 2,854,055
------------ ------------
ENERGY & RELATED-9.56%
400 Amerada Hess Corp............................ 22,046 23,150
2,000 Amoco Corp................................... 147,664 161,000
500 Atlantic Richfield........................... 61,060 66,250
600 Baker Hughes, Inc............................ 20,298 20,700
500 Burlington Resources, Inc.................... 22,138 25,188
2,800 Chevron Corp................................. 169,665 182,000
500 Coastal Corp................................. 20,950 24,438
100 Columbia Gas Systems, Inc.................... 4,553 6,363
400 Cons Natural Gas............................. 20,428 22,100
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
100 Eastern Enterprises.......................... $ 3,504 $ 3,538
1,200 Enron Corp................................... 49,929 51,750
400 Enserch Corp................................. 8,059 9,200
4,600 EXXON Corp................................... 393,287 450,800
500 Halliburton Co............................... 28,621 30,125
100 Helmerich & Payne............................ 3,704 5,213
100 Kerr-McGee Corp.............................. 6,353 7,200
200 Louisiana Land & Exploration Co.............. 10,933 10,725
1,500 Mobil Corp................................... 176,129 183,375
300 Nicor, Inc................................... 9,587 10,725
800 Noram Energy Corp............................ 10,804 12,300
100 Oneok, Inc................................... 2,617 3,000
1,000 Oryx Energy Co. (a).......................... 19,395 24,750
500 Pacific Enterprises.......................... 14,640 15,188
400 PanEnergy Corp............................... 12,746 18,000
100 Pennzoil Co.................................. 4,329 5,650
100 Peoples Energy Corp., and Rights............. 3,129 3,388
1,000 Phillips Petroleum Co........................ 40,697 44,250
300 Rowan Companies, Inc. (a).................... 4,665 6,788
2,100 Royal Dutch Petroleum NY Reg. Shares......... 320,601 358,575
600 Santa Fe Energy Resources (a)................ 7,386 8,325
1,000 Schlumberger, Ltd............................ 89,215 99,875
300 Sonat, Inc................................... 12,678 15,450
100 Sun Co., Inc................................. 2,903 2,438
1,000 Texaco, Inc.................................. 89,714 98,125
1,000 Unocal Corp.................................. 35,391 40,625
900 USX-Marathon Group........................... 18,645 21,488
100 Western Atlas, Inc. (a)...................... 6,016 7,088
600 Williams Companies, Inc...................... 20,034 22,500
------------ ------------
1,894,513 2,101,643
------------ ------------
FINANCE-14.60%
644 Aetna, Inc................................... 48,319 51,520
400 Ahmanson H F & Co............................ 10,467 13,000
1,900 Allstate Corp................................ 92,789 109,963
1,800 American Express Co.......................... 85,400 101,700
1,000 American General Corp........................ 37,967 40,875
1,700 American International Group, Inc............ 178,503 184,025
400 Aon Corp..................................... 23,422 24,850
1,900 Banc One Corp................................ 74,218 81,700
1,600 Bank New York, Inc........................... 46,858 54,000
500 Bank of Boston Corp.......................... 26,925 32,125
1,500 BankAmerica Corp............................. 126,062 149,625
200 Bankers Trust of New York Corp............... 15,159 17,250
600 Barnett Banks, Inc........................... 18,724 24,675
100 Beneficial Corp.............................. 5,791 6,338
400 Boatmens Bancshares.......................... 15,925 25,800
1,700 Chase Manhattan Corp......................... 129,980 151,725
600 Chubb Corp................................... 28,040 32,250
300 Cigna Corp................................... 35,015 40,988
1,600 Citicorp..................................... 160,107 164,800
500 Comerica, Inc................................ 23,486 26,188
900 Corestates Financial Corp.................... 39,250 46,688
600 Dean Witter Discovery........................ 34,362 39,750
600 Federal Home Loan Mortgage................... 54,568 66,075
4,100 Federal National Mortgage Association........ 141,470 152,725
300 Fifth Third Bancorp.......................... 16,423 18,844
500 First Bank System, Inc....................... 31,175 34,125
1,200 First Chicago NBD Corp....................... 51,351 64,500
800 First Union Corp............................. 50,879 59,200
1,000 Fleet Financial Group, Inc................... 42,835 49,875
300 General Re Corp.............................. 44,353 47,325
</TABLE>
49
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
200 Golden West Financial........................ $ 10,847 $ 12,625
500 Great Western Financial Corp................. 12,927 14,500
700 Green Tree Financial......................... 25,144 27,038
500 Household International Corp................. 41,788 46,125
400 ITT Hartford Group........................... 21,730 27,000
200 Jefferson Pilot Corp......................... 10,809 11,325
100 Kaufman & Broad Home Corp.................... 1,381 1,288
1,000 KeyCorp...................................... 44,651 50,500
400 Lincoln National Corp........................ 18,969 21,000
400 Loews Corp................................... 30,569 37,700
200 Marsh & McLennan Companies................... 18,772 20,800
100 MBIA Inc..................................... 10,363 10,125
1,000 MBNA Corp.................................... 35,504 41,500
500 Mellon Bank Corp............................. 28,535 35,500
600 Merrill Lynch & Co........................... 37,713 48,900
200 MGIC Investment Corp......................... 12,607 15,200
500 Morgan J. P. & Co., Inc...................... 42,235 48,813
600 Morgan Stanley Group......................... 29,830 34,275
1,000 National City Corp........................... 38,800 44,875
1,400 Nationsbank Corp............................. 124,953 136,850
1,600 Norwest Corp................................. 62,513 69,600
1,600 PNC Financial Corp........................... 53,956 60,200
400 Providian Corp............................... 17,605 20,550
100 Pulte Corp................................... 2,692 3,075
200 Republic New York Corp....................... 12,697 16,325
700 Safeco Corp.................................. 25,761 27,606
400 Salomon, Inc................................. 17,457 18,850
400 St. Paul Companies, Inc...................... 22,734 23,450
1,100 Suntrust Banks, Inc.......................... 46,041 54,175
200 Torchmark Corp............................... 8,734 10,100
100 Transamerica Corp............................ 7,516 7,900
2,433 Travelers Group, Inc......................... 86,151 110,397
600 U S Bancorp.................................. 22,563 26,963
100 UNUM Corp.................................... 6,003 7,225
100 US Life Corp................................. 2,806 3,325
700 USF & G Corp................................. 13,275 14,613
500 Wachavia Corp................................ 22,660 28,250
400 Wells Fargo & Co............................. 100,858 107,900
------------ ------------
2,819,972 3,208,947
------------ ------------
HEALTH CARE-9.12%
3,000 Abbott Labs.................................. 139,259 152,250
100 Allergan, Inc................................ 3,691 3,563
400 Alza Corp. (a)............................... 10,784 10,350
2,500 American Home Products....................... 156,740 146,563
1,300 Amgen, Inc. (a).............................. 76,660 70,688
100 Bard (C.R.), Inc............................. 3,578 2,800
100 Bausch & Lomb................................ 3,703 3,500
900 Baxter International, Inc.................... 37,458 36,900
600 Becton Dickinson............................. 24,249 26,025
600 Beverly Enterprises (a)...................... 7,146 7,650
600 Biomet, Inc.................................. 9,566 9,075
600 Boston Scientific Corp. (a).................. 30,035 36,000
1,900 Bristol Myers Squibb......................... 179,575 206,625
2,650 Columbia/HCA Healthcare Corp................. 97,561 107,988
900 Corning, Inc................................. 33,773 41,625
300 Guidant Corp................................. 16,835 17,100
700 Humana, Inc. (a)............................. 14,336 13,388
2,100 Lilly (Eli) & Co............................. 137,420 153,300
300 Mallinckrodt Group, Inc...................... 12,341 13,238
100 Manor Care, Inc.............................. 2,486 2,700
1,200 Medtronic, Inc............................... 68,969 81,600
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
4,500 Merck & Co., Inc............................. $ 308,893 $ 356,625
100 Millipore Corp............................... 4,442 4,138
2,500 Pfizer, Inc.................................. 186,865 207,188
1,400 Pharmacia & Upjohn, Inc...................... 58,805 55,475
1,600 Schering Plough Corp......................... 97,737 103,600
100 St. Jude Medical, Inc. (a)................... 3,775 4,263
900 Tenet Healthcare Corp. (a)................... 19,094 19,688
200 U S Surgical Corp............................ 6,947 7,875
600 United Healthcare............................ 29,449 27,000
1,000 Warner Lambert Co............................ 65,185 75,000
------------ ------------
1,847,357 2,003,780
------------ ------------
METAL & MINING-1.38%
1,200 Alcan Aluminium, Ltd......................... 39,015 40,350
692 Allegheny Teledyne, Inc...................... 12,963 15,916
600 Aluminum Company of America.................. 35,962 38,250
600 Armco, Inc. (a).............................. 2,571 2,475
100 ASARCO, Inc.................................. 3,381 2,488
1,700 Barrick Gold Corp............................ 49,033 48,875
400 Battle Mountain Gold Co...................... 3,435 2,750
600 Bethlehem Steel Corp. (a).................... 5,421 5,400
200 Cyprus Amax Mineral.......................... 5,107 4,675
300 Echo Bay Mines, Ltd.......................... 3,524 1,988
500 Freeport-McMoran Copper & Gold, Inc.......... 15,506 14,938
300 Homestake Mining Co.......................... 5,990 4,275
700 Inco, Ltd.................................... 22,027 22,313
200 Inland Steel Industries, Inc................. 4,008 4,000
200 Newmont Mining Corp.......................... 10,920 8,950
200 Nucor Corp................................... 11,009 10,200
300 Phelps Dodge Corp............................ 19,486 20,250
900 Placer Dome, Inc............................. 23,161 19,575
100 Reynolds Metals Co........................... 5,928 5,638
700 Santa Fe Pacific Gold Corp................... 9,127 10,763
300 USX-US Steel Group, Inc...................... 8,678 9,413
600 Worthington Industries, Inc.................. 12,750 10,875
------------ ------------
309,002 304,357
------------ ------------
TRANSPORTATION-1.51%
300 AMR Corp. (a)................................ 25,476 26,438
800 Burlington Northern Santa Fe................. 68,316 69,100
100 Caliber System, Inc.......................... 3,929 1,925
200 Conrail, Inc................................. 14,147 19,925
900 CSX Corp..................................... 42,907 38,025
500 Delta Air Lines, Inc......................... 37,290 35,438
200 Federal Express Corp. (a).................... 7,028 8,900
400 Norfolk Southern Corp........................ 34,071 35,000
400 Southwest Airlines Co........................ 10,659 8,850
700 Union Pacific Corp........................... 34,068 42,088
1,092 Union Pacific Resources Group................ 30,252 31,941
600 USAir Group, Inc. (a)........................ 10,671 14,025
------------ ------------
318,814 331,655
------------ ------------
UTILITIES-9.65%
1,800 Airtouch Communication (a)................... 50,348 45,450
500 Alltel Corp.................................. 15,135 15,688
500 American Electric Power, Inc................. 20,949 20,563
2,000 Ameritech Corp............................... 111,960 121,250
6,000 AT & T Corp.................................. 249,318 261,000
400 Baltimore Gas & Electric..................... 10,557 10,700
1,700 Bell Atlantic Corp........................... 104,103 110,075
3,700 Bellsouth Corp............................... 146,141 149,388
700 Carolina Power and Light Co.................. 25,597 25,550
</TABLE>
50
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
700 Central & South West Corp.................... $ 19,278 $ 17,938
500 Cinergy Corp................................. 15,485 16,688
900 Con Edison Co. NY............................ 26,128 26,325
500 Dominion Resources, Inc...................... 19,472 19,250
500 DTE Energy Co................................ 14,863 16,188
700 Duke Power Co................................ 34,547 32,375
1,500 Edison International......................... 25,847 29,813
1,200 Entergy Corp................................. 32,988 33,300
1,000 FPL Group, Inc............................... 44,736 46,000
300 GPU, Inc..................................... 9,951 10,088
3,800 GTE Corp..................................... 162,124 172,900
1,300 Houston Industries, Inc...................... 29,380 29,413
2,431 Lucent Technologies, Inc..................... 113,288 112,434
2,700 MCI Communications Corp...................... 76,814 88,256
500 Niagara Mohawk Power (a)..................... 4,090 4,938
200 Northern States Power Co..................... 9,434 9,175
2,000 Nynex Corp................................... 93,907 96,250
500 Ohio Edison Co............................... 10,687 11,375
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
1,500 Pacific Gas & Electric....................... $ 33,191 $ 31,500
1,600 Pacific Telesis Group........................ 55,878 58,800
1,000 Pacificorp................................... 21,166 20,500
900 Peco Energy Co............................... 23,007 22,725
600 PP&L Resources, Inc.......................... 13,930 13,800
1,000 Public Service Enterprise.................... 27,007 27,250
2,500 SBC Communications........................... 126,031 129,375
2,700 Southern Co.................................. 62,046 61,088
1,400 Sprint Corp.................................. 55,671 55,825
800 Texas Utilities Co........................... 33,013 32,600
900 Unicom Corp.................................. 24,482 24,413
400 Union Electric Co............................ 15,690 15,400
1,800 US West Communications Group................. 57,127 58,050
1,400 Worldcom, Inc. (a)........................... 34,485 36,488
------------ ------------
2,059,851 2,120,184
------------ ------------
TOTAL COMMON STOCKS.......................... $ 19,766,072 $ 21,487,787
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-2.48%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
INVESTMENT COMPANY-2.35%
$515,514 First American Prime Obligation Fund, Current
rate -- 5.06%.............................. $ 515,514
------------
U.S. TREASURY BILLS-0.13%
30,000 U.S. Treasury Bill, 4.83%, 3-27-1997 (e)..... 29,654
------------
TOTAL SHORT-TERM INVESTMENTS................. 545,168
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$20,311,240) (b)........................... $22,032,955
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $20,312,678 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 2,087,419
Unrealized depreciation..................................... (367,142)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 1,720,277
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 3.46% of net assets as of December 31, 1996
(e) Security pledged as initial margin deposit for open financial futures
position detailed below:
<TABLE>
<CAPTION>
FINANCIAL FUTURES-LONG
UNREALIZED
MARKET VALUE APPRECIATION/
NUMBER OF COVERED (DEPRECIATION)
ISSUER CONTRACT(S) BY CONTRACT(S) EXPIRATION AT 12/31/96
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's 500....................................... 1 $ 372,250 March 97 (3,250.00)
</TABLE>
51
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-90.91%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.89%
3,200 AlliedSignal, Inc............................ $ 196,727 $ 214,400
1,300 Lockheed Martin Corp......................... 107,320 118,950
------------ ------------
304,047 333,350
------------ ------------
APPAREL-0.86%
5,100 Warnaco Group Class A........................ 133,212 151,087
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.10%
500 Lear Corp. (a)............................... 14,467 17,062
------------ ------------
BANKS-6.60%
1,400 Banc One Corp................................ 51,529 60,200
1,200 Bank of Boston Corp.......................... 66,811 77,100
2,100 Chase Manhattan Corp......................... 152,871 187,425
1,500 Citicorp..................................... 125,131 154,500
800 KeyCorp...................................... 40,936 40,400
2,800 Mellon Bank Corp............................. 162,642 198,800
1,300 NationsBank Corp............................. 114,377 127,075
1,600 Northern Trust Corp.......................... 48,043 58,000
4,100 Norwest Corp................................. 155,774 178,350
300 Wells Fargo & Co............................. 78,697 80,925
------------ ------------
996,811 1,162,775
------------ ------------
BEVERAGE-0.78%
400 Coca-Cola Co................................. 16,781 21,050
4,000 PepsiCo, Inc................................. 124,843 117,000
------------ ------------
141,624 138,050
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-0.34%
1,100 Amgen, Inc. (a).............................. 61,666 59,812
------------ ------------
BUILDING MATERIALS-0.41%
2,000 Masco Corp................................... 65,647 72,000
------------ ------------
BUSINESS SERVICES AND SUPPLIES-3.04%
4,600 ADT, Ltd. (a)................................ 89,832 105,226
1,500 Catalina Marketing Corp. (a)................. 61,227 82,687
1,600 Ceridian Corp. (a)........................... 77,268 64,800
4,900 First Data Corp.............................. 191,544 178,850
3,000 Wallace Computer Services, Inc............... 89,753 103,500
------------ ------------
509,624 535,063
------------ ------------
CHEMICALS-1.28%
1,100 Du Pont (E.I.) de Nemours & Co............... 88,558 103,812
2,000 Great Lakes Chemical Corp.................... 121,297 93,500
600 Petrolite Corp............................... 27,113 28,800
------------ ------------
236,968 226,112
------------ ------------
CHEMICALS-SPECIALTY-0.44%
3,200 Schluman (A.), Inc........................... 76,675 78,400
------------ ------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.72%
1,800 3Com Corp. (a)............................... 92,754 132,075
800 Ascend Communications, Inc. (a).............. 42,570 49,700
1,900 Cisco Systems, Inc. (a)...................... 107,258 120,887
------------ ------------
242,582 302,662
------------ ------------
COMPUTER-SOFTWARE-5.47%
1,300 Adobe Systems, Inc........................... 51,882 48,587
2,800 Automatic Data Processing, Inc............... 113,073 120,050
3,800 BMC Software, Inc. (a)....................... 122,735 157,225
1,700 Electronic Data Systems Corp................. 80,739 73,525
2,600 Informix Corp. (a)........................... 64,862 52,975
1,200 Microsoft Corp. (a).......................... 63,446 99,150
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
2,000 National Data Corp........................... $ 71,100 $ 87,000
2,300 Oracle Corp. (a)............................. 92,059 96,025
3,700 Reynolds & Reynolds Co., Class A............. 92,796 96,200
2,400 Sungard Data Systems, Inc. (a)............... 87,848 94,800
800 Synopsys, Inc. (a)........................... 28,458 37,000
------------ ------------
868,998 962,537
------------ ------------
CONSUMER GOODS-0.37%
700 Colgate-Palmolive Co......................... 61,234 64,575
------------ ------------
CONTAINERS AND PACKAGING-0.93%
3,000 Crown Cork & Seal Company Inc. (a)........... 138,005 163,125
------------ ------------
DRUGS-5.68%
2,100 American Home Products Corp.................. 122,826 123,112
3,600 Johnson & Johnson............................ 176,067 179,100
1,200 Lilly (Eli) & Co., Inc....................... 78,830 87,600
2,600 Merck & Co., Inc............................. 194,053 206,050
2,700 Pfizer, Inc.................................. 196,016 223,762
1,500 Schering-Plough Corp......................... 90,732 97,125
1,100 Warner-Lambert Co............................ 72,161 82,500
------------ ------------
930,685 999,249
------------ ------------
ELECTRICAL EQUIPMENT-1.18%
2,100 General Electric Co.......................... 174,745 207,637
------------ ------------
ELECTRIC PRODUCTS-0.67%
1,800 Honeywell, Inc............................... 97,635 118,350
------------ ------------
ELECTRIC-COMPONENTS AND PARTS-1.28%
4,300 Hubbell, Inc., Class B....................... 153,872 185,975
900 Linear Technology Corp....................... 29,498 39,487
------------ ------------
183,370 225,462
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.37%
1,300 Hewlett-Packard Co........................... 60,102 65,325
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.78%
1,300 Intel Corp................................... 122,516 170,219
1,600 Maxim Integrated Products, Inc. (a).......... 50,647 69,200
2,000 Xilinx, Inc. (a)............................. 62,380 73,625
------------ ------------
235,543 313,044
------------ ------------
FINANCE SERVICES-7.91%
2,550 Aames Financial Corp......................... 80,970 91,481
600 Advanta Corp., Class B....................... 29,410 24,525
2,600 American Express Co.......................... 124,585 146,900
2,200 Federal Home Loan Mortgage Corp.............. 202,589 242,275
4,100 Federal National Mortgage Association........ 144,502 152,725
1,600 Green Tree Financial Corp.................... 52,981 61,800
4,200 H & R Block, Inc............................. 115,601 121,800
900 Household International, Inc................. 73,990 83,025
3,600 Money Store, Inc. (The)...................... 90,596 99,450
1,500 Student Loan Marketing Association........... 113,277 139,687
5,033 Travelers Group, Inc......................... 176,475 228,372
------------ ------------
1,204,976 1,392,040
------------ ------------
FOOD-5.91%
2,300 American Stores Co........................... 91,182 94,012
700 General Mills, Inc........................... 44,679 44,362
3,200 Heinz (H.J.) Co.............................. 107,178 114,400
2,900 Interstate Bakeries Corp..................... 103,982 142,462
2,700 McCormick & Company, Inc..................... 66,545 63,619
2,500 Nabisco Holdings Corp. Class A............... 84,522 97,187
1,200 Ralston -- RALSTON PURINA GROUP.............. 81,290 88,050
4,550 Richfood Holdings, Inc....................... 100,851 110,337
</TABLE>
52
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
3,400 Safeway, Inc (a)............................. $ 129,045 $ 145,350
3,800 Sara Lee Corp................................ 130,520 141,550
------------ ------------
939,794 1,041,329
------------ ------------
FOREST PRODUCTS-0.28%
700 Williamette Industries, Inc.................. 42,381 48,737
------------ ------------
GLASS AND GLASS PRODUCTS, POTTERY-1.00%
3,800 Corning, Inc................................. 144,577 175,750
------------ ------------
HEALTH CARE SERVICES-3.38%
2,200 Apria Healthcare Group, Inc. (a)............. 55,648 41,250
4,350 Columbia/HCA Healthcare Corp................. 159,793 177,263
1,900 Medic Computer Systems, Inc. (a)............. 67,954 76,594
1,300 PacifiCare Health Systems, Inc., Class B
(a)........................................ 104,030 110,825
1,600 United Healthcare Corp....................... 92,755 72,000
3,700 Vencor, Inc. (a)............................. 109,562 117,013
------------ ------------
589,742 594,945
------------ ------------
HOTEL AND GAMING-0.39%
1,600 ITT Corp. (a)................................ 68,690 69,400
------------ ------------
HOUSEHOLD PRODUCTS-2.58%
2,000 Kimberly-Clark Corp.......................... 161,825 190,500
1,300 Procter & Gamble Co.......................... 116,151 139,750
2,300 Tupperware Corp. (a)......................... 101,839 123,338
------------ ------------
379,815 453,588
------------ ------------
INSURANCE-5.50%
3,500 Ace, Ltd..................................... 174,393 210,438
900 American International Group, Inc............ 89,997 97,425
2,000 Berkley (W.R.) Corp.......................... 92,365 101,500
3,000 Mid Ocean Ltd. (a)........................... 130,242 157,500
1,900 PMI Group, Inc............................... 90,444 105,213
4,700 Travelers/Aetna Property Casualty Corp. Class
A.......................................... 134,870 166,263
1,800 UNUM Corp.................................... 113,133 130,050
------------ ------------
825,444 968,389
------------ ------------
LEISURE TIME-AMUSEMENTS-1.47%
3,000 Carnival Corp. Class A....................... 91,664 99,000
2,300 Disney (Walt) Co............................. 147,241 160,138
------------ ------------
238,905 259,138
------------ ------------
MACHINERY-1.04%
3,500 Teleflex, Inc................................ 166,410 182,438
------------ ------------
MACHINERY-OIL AND WELL-0.79%
2,300 Halliburton Co............................... 135,306 138,575
------------ ------------
MACHINERY-TOOLS-1.06%
4,000 Danaher Corp................................. 159,297 186,500
------------ ------------
MEDICAL SUPPLIES-0.16%
700 Millipore Corp............................... 28,392 28,963
------------ ------------
MEDICAL TECHNOLOGY-1.55%
2,400 Boston Scientific Corp. (a).................. 122,685 144,000
1,900 Medtronic, Inc. (and rights)................. 112,283 129,200
------------ ------------
234,968 273,200
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
METALS-FABRICATING-0.54%
3,000 Newell Co.................................... $ 87,325 $ 94,500
------------ ------------
METAL & MINING-0.23%
900 Newmont Mining Corp.......................... 41,998 40,275
------------ ------------
MISCELLANEOUS-1.99%
1,800 Eastman Kodak Co............................. 136,691 144,450
2,700 Jones Apparel Group, Inc. (a)................ 73,169 100,913
2,000 Tyco International, Ltd...................... 83,816 105,750
------------ ------------
293,676 351,113
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-2.04%
2,800 Alco Standard Corp........................... 138,328 144,550
1,200 International Business Machines Corp......... 142,418 181,200
1,300 Silicon Graphics, Inc. (a)................... 30,188 33,150
------------ ------------
310,934 358,900
------------ ------------
OIL AND GAS FIELD SERVICES-2.25%
1,800 BJ Services Co. (a).......................... 63,331 91,800
1,500 Camco International, Inc..................... 63,108 69,188
2,300 Cooper Cameron Corp. (a)..................... 109,918 175,950
600 Schlumberger, Ltd............................ 49,814 59,925
------------ ------------
286,171 396,863
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-2.14%
1,200 British Petroleum Co. plc ADR................ 138,586 169,650
1,700 Mobil Corp................................... 199,965 207,825
------------ ------------
338,551 377,475
------------ ------------
PHARMACEUTICALS-0.89%
2,300 SmithKline Beecham plc ADR................... 126,095 156,400
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.55%
1,000 Emerson Electric Co.......................... 84,590 96,750
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-0.59%
1,200 Burlington Northern Santa Fe Corp............ 101,766 103,650
------------ ------------
RESTAURANTS AND FRANCHISING-1.53%
2,000 Boston Chicken, Inc. (a)..................... 68,750 71,750
3,600 McDonald's Corp.............................. 168,721 162,900
1,300 Outback Steakhouse, Inc. (a)................. 30,921 34,775
------------ ------------
268,392 269,425
------------ ------------
RETAIL-DEPARTMENT STORES-1.26%
3,500 Federated Department Stores, Inc. (a)........ 115,439 119,438
2,600 Kohl's Corp. (a)............................. 87,900 102,050
------------ ------------
203,339 221,488
------------ ------------
RETAIL-ELECTRIC PRODUCTS, RADIO, TV, AUDIO-0.21%
1,200 Circuit City Stores, Inc..................... 37,803 36,150
------------ ------------
RETAIL-MISCELLANEOUS-1.20%
2,500 Corporate Express, Inc. (a).................. 72,232 73,594
3,700 Revco D.S., Inc. (a)......................... 98,648 136,900
------------ ------------
170,880 210,494
------------ ------------
RETAIL-SPECIALTY-1.72%
4,050 CUC International, Inc. (a).................. 96,672 96,188
739 Eckerd Corp. (a)............................. 15,260 23,648
4,200 General Nutrition Companies, Inc. (a)........ 86,515 70,875
1,600 Home Depot, Inc.............................. 80,699 80,200
1,800 Staples, Inc. (a)............................ 39,282 32,513
------------ ------------
318,428 303,424
------------ ------------
</TABLE>
53
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
STEEL AND IRON-0.26%
900 Nucor Corp................................... $ 44,174 $ 45,900
------------ ------------
TELECOMMUNICATIONS-0.49%
2,300 Time Warner, Inc............................. 88,696 86,250
------------ ------------
TELECOMMUNICATION EQUIPMENT-0.34%
2,000 Ericsson (L.M.) Telephone Co., Class B ADR... 43,044 60,375
------------ ------------
TELEPHONE SERVICES-0.64%
2,500 Alltel Corp.................................. 78,734 78,438
1,300 WorldCom, Inc. (a)........................... 31,683 33,881
------------ ------------
110,417 112,319
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
TOBACCO-1.02%
1,600 Philip Morris Companies, Inc................. $ 151,467 $ 180,200
------------ ------------
UTILITIES-TELEPHONE-2.41%
1,500 AT & T Corp.................................. 59,806 65,250
3,300 MCI Communications Corp...................... 92,815 107,869
2,700 SBC Communications, Inc...................... 134,094 139,725
2,700 Vodafone Group plc ADR....................... 99,806 111,713
------------ ------------
386,521 424,557
------------ ------------
WASTE DISPOSAL-0.40%
2,200 U.S.A. Waste Services, Inc. (a).............. 61,380 70,125
------------ ------------
TOTAL COMMON STOCKS.......................... $ 14,247,984 $ 16,005,302
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-10.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
INVESTMENT COMPANY-0.72%
$127,128 First American Prime Obligation Fund, Current
rate -- 5.06%.............................. $ 127,128
------------
FINANCE COMPANIES-8.21%
500,000 Sweden (Kingdom of), 5.47%, 2-4-1997......... 497,404
150,000 Corporate Asset Funding Co., 5.72%,
1-10-1997.................................. 149,766
400,000 Ciesco L.P., 5.75%, 1-10-1997................ 399,372
400,000 Preferred Receivables Funding, 6.10%,
1-9-1997................................... 399,400
------------
1,445,942
------------
U.S. GOVERNMENT AGENCY-1.42%
250,000 Federal Home Loan Mortgage, 5.36%,
1-14-1997.................................. 249,489
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,822,559
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$16,070,543) (b)........................... $17,827,861
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $16,074,027 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $1,982,480
Unrealized depreciation..................................... (228,646)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $1,753,834
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 6.88% of net assets as of December 31, 1996.
54
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-92.66%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
ARGENTINA-1.33%
150,000 Disco S.A. ADR (a) -- FOOD................... $ 2,364,750 $ 4,237,500
------------- -------------
AUSTRIA-2.78%
46,800 OMV Aktiengesellschaft (g) -- OIL-CRUDE
PETROLEUM AND GAS.......................... 4,739,434 5,271,701
30,000 Wolford AG -- APPAREL........................ 3,188,998 3,625,616
------------- -------------
7,928,432 8,897,317
------------- -------------
BELGIUM-1.62%
30,000 Barco N.V. (a) -- TELECOMMUNICATIONS......... 3,715,162 5,175,588
------------- -------------
BERMUDA-0.82%
82,000 Central European Media Enterprises Ltd. Class
A (a) -- BROADCASTING...................... 2,255,000 2,603,500
------------- -------------
BRAZIL-0.94%
32,000 Multicanal Participacoes S.A. ADR
(a) -- BROADCASTING........................ 448,000 410,000
34,000 Telebras ADR (f) -- UTILITIES-TELEPHONE...... 1,931,228 2,601,000
------------- -------------
2,379,228 3,011,000
------------- -------------
CHILE-0.49%
69,100 Santa Isabel S.A. ADR (a) -- FOOD............ 1,469,920 1,563,388
------------- -------------
FINLAND-3.32%
66,100 KCI Konecranes International Corp.
(a)(g) -- MACHINERY........................ 1,369,093 2,079,514
148,000 Nokia (AB) K Shares -- TELECOMMUNICATIONS.... 2,478,815 8,541,531
------------- -------------
3,847,908 10,621,045
------------- -------------
FRANCE-2.29%
9,000 Castorama Dubois
Investisse -- RETAIL-MISCELLANEOUS......... 958,605 1,545,952
10,000 Pathe S.A. (a) -- BROADCASTING............... 2,339,579 2,404,430
34,000 Sanofi S.A. -- DRUGS......................... 1,996,096 3,374,666
------------- -------------
5,294,280 7,325,048
------------- -------------
GERMAN, FED-REPUBLIC WEST-2.88%
25,000 Deutsche Telekom AG ADR
(a) -- UTILITIES-TELEPHONE................. 472,250 509,375
44,500 Puma AG (a) -- APPAREL....................... 1,545,524 1,530,391
57,000 SGL Carbon AG (a) -- STEEL AND IRON.......... 2,708,232 7,179,051
------------- -------------
4,726,006 9,218,817
------------- -------------
HONG KONG-1.82%
11,600 Asia Satellite Telecommunications Holdings
Ltd. (a) -- UTILITIES-TELEPHONE............ 299,280 271,150
1,600,000 First Pacific Co. Ltd. -- MISCELLANEOUS...... 1,776,244 2,078,863
210,000 Hutchison Whampoa Ltd. -- REAL ESTATE........ 1,379,712 1,649,322
150,000 Sun Hung Kai Properties Ltd. -- REAL
ESTATE..................................... 1,292,660 1,837,428
------------- -------------
4,747,896 5,836,763
------------- -------------
HUNGARY-0.94%
240,000 MOL Magyar Olaj-es Gazipari Rt. GDS
(a)(g) -- OIL-REFINING..................... 1,944,000 2,999,064
------------- -------------
INDIA-0.30%
38,000 Indian Hotels Co. Ltd. (The) GDR
(a)(e) -- HOTEL AND GAMING................. 630,800 969,000
------------- -------------
INDONESIA-0.80%
74,000 P.T. Telekomunikasi Indonesia
(a)(f) -- UTILITIES-TELEPHONE.............. 1,378,872 2,553,000
------------- -------------
ISRAEL-1.83%
84,000 ECI Telecom Ltd. (f) -- TELECOMMUNICATIONS... 1,662,746 1,785,000
81,000 Teva Phamaceutical Industries Ltd. ADR
(f) -- DRUGS............................... 2,755,500 4,070,250
------------- -------------
4,418,246 5,855,250
------------- -------------
ITALY-2.25%
82,700 Fila Holdings S.p.A. ADR (f) -- APPAREL...... 1,943,696 4,806,938
104,000 Industrie Natuzzi S.p.A. ADR -- FURNITURE.... 1,160,467 2,392,000
------------- -------------
3,104,163 7,198,938
------------- -------------
</TABLE>
55
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
JAPAN-6.70%
50,000 Amway Japan Ltd. -- HOUSEHOLD PRODUCTS....... $ 2,426,926 $ 1,602,481
30,000 Autobacs Seven Co.
Ltd. -- RETAIL-MISCELLANEOUS............... 2,959,769 2,116,826
27,000 Canon, Inc. ADR -- OFFICE EQUIPMENT AND
SUPPLIES................................... 2,113,633 2,970,000
470 DDI Corp. -- TELECOMMUNICATIONS.............. 3,192,170 3,101,749
40,000 Kyocera Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 3,089,965 2,488,154
110,000 Laox Co. Ltd. -- RETAIL-ELECTRIC PRODUCTS,
RADIO, TV, AUDIO........................... 2,383,092 1,667,959
16,700 Matsushita Electric Industrial Co. Ltd.
ADR -- ELECTRONIC-CONTROLS AND EQUIPMENT... 2,772,445 2,726,275
369 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 3,179,997 2,791,264
30,000 Sony Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 1,951,042 1,961,747
------------- -------------
24,069,039 21,426,455
------------- -------------
MEXICO-0.50%
34,000 Panamerican Beverages, Inc. Class
A -- BEVERAGE.............................. 1,189,321 1,593,750
------------- -------------
NETHERLANDS-4.97%
30,000 Gucci Group (a) -- RETAIL-MISCELLANEOUS...... 660,000 1,916,250
70,000 IHC Caland N.V. -- MACHINERY-OIL AND WELL.... 1,402,766 3,994,249
90,000 Randstad Holdings N.V. -- BUSINESS SERVICES
AND SUPPLIES............................... 2,461,190 6,493,473
29,000 Toolex Alpha N.V.
(a) -- MACHINERY-SPECIALTY................. 677,327 308,125
24,000 Wolters Kluwer -- PUBLISHING................. 1,404,741 3,184,299
------------- -------------
6,606,024 15,896,396
------------- -------------
NORWAY-1.45%
118,700 Petroleum Geo-Services ADR
(a) -- MACHINERY-OIL AND WELL.............. 3,323,284 4,629,300
------------- -------------
PERU-0.33%
450,000 CPT Telefonica del Peru S.A. Class
B -- UTILITIES-TELEPHONE................... 995,990 842,115
11,000 Telefonica del Peru
ADR -- UTILITIES-TELEPHONE................. 225,500 207,625
------------- -------------
1,221,490 1,049,740
------------- -------------
PHILIPPINES-1.09%
2,616,700 Empire East Land Holdings, Inc.
(a)(g) -- REAL ESTATE...................... 1,355,265 1,193,931
5,742,750 Megaworld Properties & Holdings, Inc.
(a) -- REAL ESTATE......................... 1,529,234 2,292,732
------------- -------------
2,884,499 3,486,663
------------- -------------
PORTUGAL-0.32%
35,800 Portugal Telecom S.A.
ADR -- UTILITIES-TELEPHONE................. 818,674 1,011,350
------------- -------------
RUSSIA-0.07%
10,000 Open Joint Stock Vimpel Communications
(a) -- TELECOMMUNICATIONS.................. 205,000 236,250
------------- -------------
SOUTH KOREA-0.66%
164,800 Korea Mobile Telecommunications ADR
(f) -- TELEPHONE SERVICES.................. 2,580,000 2,121,800
------------- -------------
SWEDEN-4.57%
90,000 Astra AB 'B' -- DRUGS........................ 1,860,144 4,336,539
138,000 Ericsson (L.M.) Telephone Co. Class B ADR
(f) -- TELECOMMUNICATION EQUIPMENT......... 2,352,375 4,165,875
95,000 Hoganas Class B -- MISCELLANEOUS............. 2,474,103 3,325,266
166,700 Industri Matematik International Corp.
(a) -- COMPUTER-SOFTWARE................... 1,620,462 2,187,938
7,100 WM Data AB Class B -- BUSINESS SERVICES AND
SUPPLIES................................... 197,037 613,501
------------- -------------
8,504,121 14,629,119
------------- -------------
SWITZERLAND-1.71%
2,665 Novartis AG (a) -- DRUGS..................... 3,059,226 3,042,661
300 Roche Holdings AG, Genusschein
NVP -- DRUGS............................... 1,568,202 2,326,991
7,000 Tag Heuer International S.A. ADR
(a) -- APPAREL............................. 136,850 112,875
------------- -------------
4,764,278 5,482,527
------------- -------------
THAILAND-0.27%
90,000 Bangkok Bank Co. Ltd. -- BANKS............... 997,301 870,514
------------- -------------
UNITED KINGDOM-3.87%
163,900 Capita Group plc -- BUSINESS SERVICES AND
SUPPLIES................................... 1,050,020 1,364,545
550,000 Dixons Group plc -- RETAIL-ELECTRIC PRODUCTS,
RADIO, TV, AUDIO........................... 1,747,817 5,106,092
50,000 Dr. Solomon's Group plc ADR
(a) -- COMPUTER-SOFTWARE................... 850,000 856,250
62,000 Harvey Nichols Group plc
(a)(g) -- RETAIL-CLOTHING.................. 254,381 367,108
</TABLE>
56
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
675,000 Orange plc -- TELECOMMUNICATIONS............. $ 2,141,022 $ 2,171,640
260,000 Powerscreen International
plc -- CONSTRUCTION........................ 1,304,787 2,513,900
------------- -------------
7,348,027 12,379,535
------------- -------------
UNITED STATES-41.74%
88,000 3Com Corp. (a)(f) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 1,155,000 6,457,000
33,000 Altera Corp. (a)(f) -- ELECTRONIC-CONTROLS
AND EQUIPMENT.............................. 1,388,406 2,398,688
134,000 American Oncology Resources, Inc.
(a) -- HEALTH CARE SERVICES................ 1,943,584 1,373,500
141,500 ANSYS, Inc. (a) -- COMPUTER-SOFTWARE......... 1,734,475 1,910,250
175,000 Apple South, Inc. (f) -- RESTAURANTS AND
FRANCHISING................................ 2,196,510 2,362,500
85,000 Applebees International, Inc.
(f) -- RESTAURANTS AND FRANCHISING......... 1,454,875 2,337,500
60,000 AutoZone, Inc. (a)(f) -- RETAIL-SPECIALTY.... 1,430,967 1,650,000
75,000 Avant! Corp. (a)(f) -- COMPUTER-SOFTWARE..... 1,945,445 2,381,250
112,000 Bed, Bath & Beyond, Inc.
(a)(f) -- RETAIL-SPECIALTY................. 1,601,689 2,716,000
77,000 Blyth Industries, Inc.
(a)(f) -- MISCELLANEOUS.................... 3,510,585 3,513,125
56,000 Catalina Marketing Corp. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 1,240,539 3,087,000
56,000 Ceridian Corp. (a) -- BUSINESS SERVICES AND
SUPPLIES................................... 2,791,040 2,268,000
76,000 Cheesecake Factory, Inc.
(a)(f) -- RESTAURANTS AND FRANCHISING...... 1,962,425 1,377,500
80,000 Cisco Systems, Inc.
(a)(f) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 917,000 5,090,000
148,000 Credit Acceptance Corp. (a)(f) -- FINANCE
SERVICES................................... 3,167,200 3,478,000
162,300 CUC International, Inc.
(a)(f) -- RETAIL-SPECIALTY................. 3,564,066 3,854,625
110,000 Data Processing Resources Corp.
(a) -- BUSINESS SERVICES AND SUPPLIES...... 2,271,475 2,035,000
310,000 Gartner Group, Inc. Class A
(a)(f) -- BUSINESS SERVICES AND SUPPLIES... 1,550,000 12,070,625
90,000 Green Tree Financial Corp. (f) -- FINANCE
SERVICES................................... 2,972,661 3,476,250
85,000 HCIA, Inc. (a) -- HEALTH CARE SERVICES....... 2,889,315 2,932,500
130,000 Input/Output, Inc. (a) -- MACHINERY-OIL AND
WELL....................................... 934,975 2,405,000
53,000 Interim Services, Inc. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 2,292,250 1,881,500
57,900 LCI International, Inc. (a) -- TELEPHONE
SERVICES................................... 1,631,293 1,244,850
172,200 Mercury Finance Co. -- FINANCE SERVICES...... 1,937,907 2,109,450
72,000 Oracle Corp. (a)(f) -- COMPUTER-SOFTWARE..... 968,000 3,006,000
49,000 Outback Steakhouse, Inc. (a) -- RESTAURANTS
AND FRANCHISING............................ 1,296,331 1,310,750
100 Owen Healthcare, Inc.(a) -- HEALTH CARE
SERVICES................................... 1,200 2,650
100,000 Parametric Technology Corp.
(a) -- COMPUTER-SOFTWARE................... 1,506,616 5,137,500
21,200 PetsMart, Inc. (a) -- RETAIL-MISCELLANEOUS... 540,779 463,750
115,000 Physician Reliance Network, Inc.
(a)(f) -- HEALTH CARE SERVICES............. 1,594,134 891,250
70,000 R.P. Sherer Corp. (a) -- DRUGS............... 3,116,570 3,517,500
100,000 Service Corp. International (f) -- BUSINESS
SERVICES AND SUPPLIES...................... 2,209,570 2,800,000
23,400 SQA, Inc. (a) -- COMPUTER-SOFTWARE........... 585,975 778,050
90,000 Steris Corp. (a) -- MEDICAL SUPPLIES......... 1,526,528 3,915,000
35,000 Sykes Enterprises, Inc. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 1,412,906 1,312,500
80,000 Synopsys, Inc. (a)(f) -- COMPUTER-SOFTWARE... 1,733,112 3,700,000
120,000 Tellabs, Inc. (a)(f) -- TELECOMMUNICATION
EQUIPMENT.................................. 1,613,430 4,515,000
60,000 Tidewater, Inc. -- SHIP BUILDING, SHIPPING... 2,104,500 2,715,000
55,000 Tommy Hilfiger Corp. (a)(f) -- APPAREL....... 2,159,675 2,640,000
51,000 Total Renal Care Holdings, Inc. (a) -- HEALTH
CARE SERVICES.............................. 1,738,832 1,848,750
76,000 U.S. Robotics Corp.
(a)(f) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 1,633,487 5,472,000
102,000 Vans, Inc. (a) -- SHOES AND LEATHER.......... 1,643,250 1,275,000
60,000 Viking Office Prodicts, Inc.
(a)(f) -- RETAIL-SPECIALTY................. 896,730 1,601,250
37,500 Western Atlas, Inc. (a) -- OIL AND GAS FIELD
SERVICES................................... 1,713,488 2,657,813
171,000 Wisconsin Central Transportation Corp.
(a) -- TRANSPORTATION...................... 1,943,225 6,775,875
40,000 Xilinx, Inc.
(a)(f) -- ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR.................................. 541,220 1,472,500
45,000 Xylan Corp. (a)(f) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 1,785,001 1,271,250
------------- -------------
82,748,241 133,489,501
------------- -------------
TOTAL COMMON STOCKS.......................... $ 197,463,962 $ 296,368,118
------------- -------------
------------- -------------
</TABLE>
57
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
PREFERRED STOCKS-2.71%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
GERMAN, FED-REPUBLIC WEST-2.71%
63,000 SAP AG Systeme -- COMPUTER-SOFTWARE.......... $ 2,010,752 $ 8,658,311
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 199,474,714 $ 305,026,429
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-4.56%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-1.68%
$5,373,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 5,373,000
-------------
DIVERSIFIED FINANCE-2.88%
9,224,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.31%...................... 9,224,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 14,597,000
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$214,071,714) (b).......................... $ 319,623,429
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $214,071,714 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $114,944,485
Unrealized depreciation..................................... (9,392,770)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $105,551,715
- --------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
(e) Securities sold within the terms of private placement memorandums, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". Pursuant to guidelines adopted by the Board of
Directors, these issues are determined to be liquid. The aggregate value of
these securities at December 31, 1996, is $969,000 which represents .30% of
total net assets.
(f) Security is fully or partially on loan at December 31, 1996. See Note 1 of
accompanying Notes to Financial Statements.
(g) Common Stock sold within the terms of private placement memorandums, exempt
from registration under Section 144A of the Securities Act of 1933, as
amended, and may be sold only to dealers in that program or to other
"accredited investors". These investments have been identified by portfolio
management as illiquid securities:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS 12/31/96
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------
November 22, 1995 240,000 MOL Magyar Olaj-ex Gazipari GDS $ 1,944,000
March 19, 1996 27,000 KCI Konecranes 397,927
April 22, 1996 62,000 Harvey Nichols 254,381
May 22, 1996 46,800 OMV Aktiengesellschaft 4,739,434
June 21, 1996 850,000 Empire East Land Holdings, Inc. 418,965
June 28, 1996 700,000 Empire East Land Holdings, Inc. 438,348
July 12, 1996 39,100 KCI Konecranes 971,166
July 19, 1996 294,500 Empire East Land Holdings, Inc. 145,669
November 20, 1996 439,600 Empire East Land Holdings, Inc. 201,173
November 21, 1996 332,600 Empire East Land Holdings, Inc. 151,110
-------------------
$ 9,662,173
-------------------
The value of these securities at December 31, 1996 is $11,911,318 which represents
3.72% of net assets.
</TABLE>
58
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-90.46%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
APPAREL-0.98%
135,000 Tommy Hilfiger Corp. (a)..................... $ 4,633,870 $ 6,480,000
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-2.27%
79,600 BioChem Pharma, Inc. (a)..................... 3,347,273 3,999,900
165,000 Biogen, Inc. (a)............................. 4,408,687 6,393,750
213,400 Genzyme Corp.-General Division (a)........... 6,458,318 4,641,450
------------- -------------
14,214,278 15,035,100
------------- -------------
BUSINESS SERVICES AND SUPPLIES-2.72%
265,500 AccuStaff, Inc. (a).......................... 6,944,137 5,608,687
165,000 Danka Business Systems plc ADR............... 7,032,482 5,836,875
179,206 First Data Corp.............................. 3,774,569 6,541,019
------------- -------------
17,751,188 17,986,581
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-10.98%
344,100 3Com Corp. (a)............................... 2,663,402 25,248,337
110,100 Ascend Communications, Inc. (a).............. 4,243,370 6,839,962
121,200 Cascade Communications Corp. (a)............. 5,795,204 6,681,150
373,400 Cisco Systems, Inc. (a)...................... 3,382,666 23,757,575
163,000 FORE Systems, Inc. (a)....................... 5,266,613 5,358,625
65,400 U.S. Robotics Corp. (a)...................... 4,217,953 4,708,800
------------- -------------
25,569,208 72,594,449
------------- -------------
COMPUTER-SOFTWARE-16.90%
400,800 BMC Software, Inc. (a)....................... 5,037,454 16,583,100
134,000 Computer Associates International, Inc....... 5,022,420 6,666,500
539,700 Informix Corp. (a)........................... 5,796,119 10,996,387
264,200 Microsoft Corp. (a).......................... 4,693,098 21,829,525
551,400 Oracle Corp. (a)............................. 2,035,424 23,020,950
289,800 Parametric Technology Corp. (a).............. 4,008,045 14,888,475
288,419 Sterling Commerce, Inc. (a).................. 2,797,559 10,166,770
181,100 Sterling Software, Inc. (a).................. 1,637,152 5,727,287
37,050 Veritas Software Corp. (a)................... 1,696,118 1,843,237
------------- -------------
32,723,389 111,722,231
------------- -------------
ELECTRICAL EQUIPMENT-0.30%
48,000 Chicago Miniature Lamp, Inc. (a)............. 1,603,910 1,992,000
------------- -------------
ELECTRONIC-COMPONENTS-1.88%
233,500 Solectron Corp. (a).......................... 6,502,540 12,463,062
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.49%
75,000 Intel Corp................................... 3,206,523 9,820,313
------------- -------------
FINANCE SERVICES-10.41%
130,000 Advanta Corp., Class B....................... 6,451,250 5,313,750
254,800 Capital One Financial Corp................... 7,706,421 9,172,800
439,000 Federal National Mortgage Association........ 10,071,624 16,352,750
220,000 First USA, Inc............................... 6,370,511 7,617,500
100,000 Franklin Resources, Inc...................... 3,604,950 6,837,500
299,000 Green Tree Financial Corp.................... 9,883,524 11,548,875
175,000 MBNA Corp.................................... 6,585,103 7,262,500
387,450 Mercury Finance Co........................... 4,156,802 4,746,263
------------- -------------
54,830,185 68,851,938
------------- -------------
HEALTH CARE SERVICES-7.35%
162,000 HBO & Co..................................... 5,245,284 9,618,750
395,000 Medpartners, Inc. (a)........................ 10,353,944 8,295,000
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
247,000 Oxford Health Plans, Inc. (a)................ $ 6,932,431 $ 14,464,938
85,000 PacifiCare Health Systems, Inc., Class B
(a)........................................ 6,508,525 7,246,250
157,400 PhyCor, Inc. (a)............................. 4,861,954 4,466,225
99,600 United Healthcare Corp....................... 4,296,512 4,482,000
------------- -------------
38,198,650 48,573,163
------------- -------------
HOTEL AND GAMING-1.56%
130,000 HFS, Inc. (a)................................ 7,719,704 7,767,500
65,600 La Quinta Inns, Inc.......................... 1,381,536 1,254,600
43,050 Promus Hotel Corp. (a)....................... 944,539 1,275,356
------------- -------------
10,045,779 10,297,456
------------- -------------
MACHINERY-OIL AND WELL-2.55%
178,000 Input/Output, Inc. (a)....................... 4,223,569 3,293,000
347,100 Petroleum Geo-Services ASA ADR (a) 9,028,922 13,536,900
------------- -------------
13,252,491 16,829,900
------------- -------------
MEDICAL SUPPLIES-1.10%
167,000 Steris Corp. (a)............................. 5,690,284 7,264,500
------------- -------------
MEDICAL TECHNOLOGY-1.49%
145,000 Medtronic, Inc. (and rights)................. 8,707,806 9,860,000
------------- -------------
OIL AND GAS FIELD SERVICES-0.98%
40,000 Schlumberger, Ltd............................ 3,535,828 3,995,000
56,700 Smith International, Inc. (a)................ 2,160,444 2,544,413
------------- -------------
5,696,272 6,539,413
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-0.29%
30,000 Anadarko Petroleum Corp...................... 1,789,395 1,942,500
------------- -------------
OIL-OFFSHORE DRILLING-1.58%
44,000 ENSCO International, Inc. (a)................ 1,869,989 2,134,000
163,500 Falcon Drilling Co. (a)...................... 5,045,522 6,417,375
96,000 Noble Drilling Corp. (a)..................... 1,653,850 1,908,000
------------- -------------
8,569,361 10,459,375
------------- -------------
PUBLISHING-0.56%
54,700 Scholastic Corp. (a)......................... 2,787,578 3,678,575
------------- -------------
RESTAURANTS AND FRANCHISING-3.14%
258,400 Lone Star Steakhouse & Saloon, Inc. (a)...... 4,816,875 6,912,200
185,300 Outback Steakhouse, Inc. (a)................. 3,827,337 4,956,775
311,700 Starbucks Corp. (a).......................... 5,273,845 8,922,413
------------- -------------
13,918,057 20,791,388
------------- -------------
RETAIL-DEPARTMENT STORES-0.51%
85,400 Kohl's Corp. (a)............................. 1,372,378 3,351,950
------------- -------------
RETAIL-SPECIALTY-6.96%
61,600 Barnes & Noble, Inc. (a)..................... 1,662,646 1,663,200
560,550 CUC International, Inc. (a).................. 8,047,950 13,313,063
177,200 Home Depot, Inc.............................. 6,435,766 8,882,150
174,375 Office Depot, Inc. (a)....................... 2,250,275 3,095,156
160,000 Pep Boys-Manny Moe & Jack.................... 3,807,193 4,920,000
105,000 Republic Industries, Inc. (a)................ 3,390,629 3,274,688
463,125 Staples, Inc. (a)............................ 6,211,573 8,365,195
88,400 West Marine, Inc. (a)........................ 3,141,297 2,497,300
------------- -------------
34,947,329 46,010,752
------------- -------------
</TABLE>
59
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
SHIP BUILDING, SHIPPING-0.28%
41,000 Tidewater, Inc............................... $ 1,601,362 $ 1,855,250
------------- -------------
SHOES AND LEATHER-0.89%
99,000 Nike, Inc., Class B.......................... 5,769,464 5,915,250
------------- -------------
TELECOMMUNICATION EQUIPMENT-6.61%
298,000 ADC Telecommunications, Inc. (a)............. 4,839,814 9,275,250
133,500 Andrew Corp. (a)............................. 4,296,061 7,083,844
140,000 QUALCOMM, Inc. (a)........................... 5,296,387 5,582,500
577,800 Tellabs, Inc. (a)............................ 3,752,764 21,739,725
------------- -------------
18,185,026 43,681,319
------------- -------------
TELEPHONE SERVICES-5.86%
60,000 LCI International, Inc. (a).................. 1,812,743 1,290,000
267,000 MFS Communications Co., Inc. (a)............. 7,492,894 14,551,500
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
61,000 Pacific Gateway Exchange, Inc. (a)........... $ 1,717,784 $ 2,226,500
246,000 Paging Network, Inc. (a)..................... 3,720,750 3,751,500
650,000 WorldCom, Inc. (a)........................... 7,378,215 16,940,625
------------- -------------
22,122,386 38,760,125
------------- -------------
TRANSPORTATION-0.82%
136,300 Wisconsin Central Transportation Corp. (a)... 4,898,273 5,400,888
------------- -------------
TOTAL COMMON STOCKS.......................... $ 358,586,982 $ 598,157,478
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-9.61%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.83%
$31,938,595 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.25%............. $ 31,938,595
-------------
DIVERSIFIED FINANCE-1.80%
11,925,000 Associate Corp. Master Variable Rate Note,
Current Rate -- 5.31%...................... 11,925,000
-------------
U.S. OTHER DIRECT FEDERAL OBLIGATIONS-2.98%
19,700,000 Federal Farm Credit Bank, 5.46%, 1-10-1997... 19,670,614
-------------
TOTAL SHORT-TERM INVESTMENTS................. 63,534,209
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$422,121,191) (b).......................... $ 661,691,687
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $422,121,191 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $249,850,780
Unrealized depreciation..................................... (10,280,284)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $239,570,496
- --------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuations of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 3.53% of net assets as of December 31, 1996.
60
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-93.45%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
AUSTRALIA-2.54%
170,900 Westpac Banking Corp. Ltd. -- BANKS.......... $ 698,129 $ 971,885
87,200 Coles Myer Ltd. -- RETAIL-MISCELLANEOUS...... 324,059 358,762
------------ ------------
1,022,188 1,330,647
------------ ------------
DENMARK-0.97%
9,800 Uni-Danmark A/S 'A' -- BANKS................. 443,809 506,704
------------ ------------
FINLAND-0.95%
23,800 UPM -- KYMMENE CORP. -- PAPER................ 496,400 498,307
------------ ------------
FRANCE-14.28%
21,800 Banque Nationale de Paris -- BANKS........... 901,625 842,020
6,800 Compagnie De Saint-Gobain -- BUILDING
MATERIALS.................................. 867,695 960,079
35,088 Rhone Poulenc -- BUILDING MATERIALS.......... 899,184 1,193,957
4,030 Accor S.A. -- HOTEL AND GAMING............... 508,113 509,299
11,500 Elf Aquitaine -- OIL-CRUDE PETROLEUM AND
GAS........................................ 895,473 1,044,763
5,605 Total S.A. Co. Francaise Petroles
'B' -- OIL-CRUDE PETROLEUM AND GAS......... 355,577 454,978
16,110 Alcatel Alsthom CIE Generale D'Electricite
S.A. -- TELECOMMUNICATIONS................. 1,459,662 1,291,592
9,500 CIE Generale Des
Eaux -- TELECOMMUNICATIONS................. 1,018,372 1,174,997
------------ ------------
6,905,701 7,471,685
------------ ------------
GERMANY-12.80%
17,600 Daimler Benz AG -- AUTOMOBILE
MANUFACTURERS.............................. 986,184 1,204,847
18,800 Deutsche Bank AG -- BANKS.................... 905,686 875,889
34,900 Hoechst AG -- CHEMICALS...................... 1,000,021 1,614,662
6,000 Metro AG -- CONSUMER GOODS................... 547,918 469,143
2,060 Mannesmann AG -- MACHINERY................... 717,187 885,163
2,600 Thyssen AG -- STEEL AND IRON................. 500,401 460,409
14,300 Veba AG -- UTILITIES-ELECTRIC................ 650,240 821,194
18,100 Deutsche Telekom AG ADR
(a) -- UTILITIES-TELEPHONE................. 341,909 368,787
------------ ------------
5,649,546 6,700,094
------------ ------------
HONG KONG-3.42%
56,605 HSBC Holdings plc -- BANKS................... 829,336 1,211,135
60,500 Swire Pacific Ltd. "A" -- TRANSPORTATION..... 543,853 576,843
------------ ------------
1,373,189 1,787,978
------------ ------------
ITALY-1.41%
190,500 INA Istituto Nazionale
Assicurazioni -- INSURANCE................. 279,621 247,568
95,300 Ente Nazionale Idrocarbuiri
SpA -- OIL-REFINING........................ 451,650 487,938
------------ ------------
731,271 735,506
------------ ------------
JAPAN-22.82%
36,000 Honda Motor -- AUTOMOBILE MANUFACTURERS...... 854,483 1,026,622
117,000 Mitsubishi Heavy Industries
Ltd. -- AUTOMOBILE MANUFACTURERS........... 911,877 927,371
20,000 Toyota Motor -- AUTOMOBILE MANUFACTURERS..... 444,363 573,792
76,000 Sumitomo Trust & Bank -- BANKS............... 993,195 759,542
56,000 Sekisui Chemical Co. -- CHEMICALS............ 690,129 564,487
52,000 Matsushita Electric Industrial
Co. -- ELECTRIC PRODUCTS................... 882,146 846,730
18,000 Rohm Co. -- ELECTRIC PRODUCTS................ 1,015,702 1,178,599
23,000 Omron Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 470,425 431,981
23,300 Sony Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 1,379,905 1,523,624
7,600 Promise Co. Ltd. -- FINANCE SERVICES......... 354,557 373,223
34,000 Mitsui Marine & Fire Ins. -- INSURANCE....... 262,717 182,493
19,000 Orix Corp. -- LEASING........................ 717,961 789,007
96,000 Ricoh Corp. Ltd. -- OFFICE EQUIPMENT AND
SUPPLIES................................... 1,045,118 1,100,026
26,000 Dai Nippon Printing Co. Ltd. -- PRINTING..... 448,305 454,726
165,000 NKK Corp. -- STEEL AND IRON.................. 507,149 371,026
11,800 Nintendo -- TOYS............................. 785,891 842,784
------------ ------------
11,763,923 11,946,033
------------ ------------
</TABLE>
61
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1996
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
NETHERLANDS-3.23%
2,800 Heineken NV -- BEVERAGE...................... $ 557,449 $ 495,012
7,000 Royal Dutch Petroleum Co. NY Reg.
Shares -- OIL-CRUDE PETROLEUM AND GAS...... 955,611 1,195,250
------------ ------------
1,513,060 1,690,262
------------ ------------
NEW ZEALAND-0.38%
82,300 Lion Nathan Ltd. -- BUILDING MATERIALS....... 179,187 197,121
------------ ------------
SPAIN-2.24%
16,500 Empresa Nacional de Electricidad -- ELECTRIC
PRODUCTS................................... 957,215 1,172,093
------------ ------------
SWEDEN-3.14%
22,700 Svenska Handelsbanken -- BANKS............... 425,747 651,609
10,900 Astra AB 'B' -- DRUGS........................ 417,752 525,203
8,000 Electrolux AB 'B' Free -- HOUSEHOLD
PRODUCTS................................... 396,448 463,970
------------ ------------
1,239,947 1,640,782
------------ ------------
SWITZERLAND-5.75%
194 SGS Societe Generale de Surveillance Holding
S.A. -- BANKS.............................. 355,974 475,348
800 Novartis AG (a) -- DRUGS..................... 694,374 912,798
700 Electrowatt AG Class B -- ELECTRIC
PRODUCTS................................... 270,712 277,869
825 Nestle S.A. Registered -- FOOD............... 883,767 882,927
230 Baloise Holdings Ltd. -- INSURANCE........... 476,909 460,781
------------ ------------
2,681,736 3,009,723
------------ ------------
UNITED KINGDOM-19.52%
72,483 British Aerospace plc -- AEROSPACE AND
EQUIPMENT.................................. 876,990 1,587,714
65,000 Redland plc -- BUILDING MATERIALS............ 425,443 407,674
42,900 Unilever plc -- CONSUMER GOODS............... 871,366 1,039,920
75,900 General Electric Co. plc -- ELECTRIC
PRODUCTS................................... 442,080 497,470
65,800 Rank Group plc -- LEISURE TIME-AMUSEMENTS.... 442,399 490,388
182,200 BTR plc -- MISCELLANEOUS..................... 760,415 885,509
94,800 Mirror Group plc -- PUBLISHING............... 290,173 349,608
76,500 Allied Domecq plc -- RETAIL-DEPARTMENT
STORES..................................... 593,578 597,624
125,400 Grand Metropolitan ORD -- RETAIL-DEPARTMENT
STORES..................................... 932,875 985,000
429,200 Sears -- RETAIL-DEPARTMENT STORES............ 684,243 697,766
115,109 Cadbury Schweppes plc -- STEEL AND IRON...... 921,926 970,156
98,400 B.A.T. Industries plc -- TOBACCO............. 789,569 815,859
106,600 National Power plc -- UTILITIES-ELECTRIC..... 769,579 892,057
------------ ------------
8,800,636 10,216,745
------------ ------------
TOTAL COMMON STOCKS.......................... $43,757,808 $48,903,680
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-1.80%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
ITALY-1.80%
321,000 Fiat SpA -- AUTOMOBILE MANUFACTURERS......... $ 668,484 $ 528,843
136,700 Fiat SpA Ord -- AUTOMOBILE MANUFACTURERS..... 410,278 412,662
------------ ------------
TOTAL PREFERRED STOCKS....................... 1,078,762 941,505
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $44,836,570 $49,845,185
------------ ------------
------------ ------------
</TABLE>
62
<PAGE>
SHORT-TERM INVESTMENTS-5.02%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
U.S. GOVERNMENT AGENCY-1.90%
$1,000,000 Federal Home Loan Mortgage Corp., 5.52%,
1-22-1997.................................. $ 996,688
------------
U.S. TREASURY BILLS-2.75%
1,394,000 U.S. Treasury Bill, 4.95%, 2-13-1997......... 1,385,737
56,000 U.S. Treasury Bill, 4.99%, 2-6-1997.......... 55,719
------------
1,441,456
------------
BANKS-0.37%
192,822 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. 192,822
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,630,966
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$47,467,536) (b)........................... $52,476,151
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $47,467,536 and the aggregate gross unrealized appreciation
and depreciation
<TABLE>
<CAPTION>
based on that cost was:
<S> <C>
Unrealized appreciation..................................... $5,204,074
Unrealized depreciation..................................... (195,459)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $5,008,615
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets.
63
<PAGE>
FORTIS SERIES FUND, INC.
AGGRESSIVE GROWTH SERIES
Schedule of Investments
December 31, 1996
COMMON STOCKS-85.72%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.07%
2,500 CKS Group, Inc. (a).......................... $ 42,500 $ 69,687
------------ ------------
APPAREL-0.54%
9,000 Fila Holdings S.p.A. ADR..................... 698,310 523,125
------------ ------------
BEVERAGE-0.57%
54,300 Boston Beer Co. (The), Inc. (a).............. 1,189,348 556,575
------------ ------------
BIOMEDICS, GENETICS RESEARCH AND DEVELOPMENT-1.30%
25,000 Biochem Pharma, Inc. (a)..................... 1,077,475 1,256,250
------------ ------------
BUSINESS SERVICES AND SUPPLIES-14.98%
27,920 AccuStaff, Inc. (a).......................... 696,080 589,810
63,200 Acxiom Corp. (a)............................. 595,637 1,516,800
64,000 APAC TeleServices, Inc. (a).................. 584,508 2,456,000
7,200 Catalina Marketing Corp. (a)................. 200,394 396,900
32,000 COREstaff, Inc. (a).......................... 853,611 758,000
67,000 Correctional Services Corp. (a).............. 914,669 963,125
23,000 Corrections Corp of America (a).............. 697,338 704,375
25,300 Fastenal Co.................................. 806,450 1,157,475
25,200 Indus Group, Inc. (a)........................ 497,877 648,900
25,700 Infinity Financial Technology, Inc. (a)...... 456,281 443,325
35,000 Precision Response Corp. (a)................. 986,875 1,229,375
36,500 Romac International, Inc. (a)................ 941,325 803,000
30,600 Snyder Communications, Inc. (a).............. 615,442 826,200
21,000 Sykes Enterprises, Inc. (a).................. 953,487 787,500
47,500 TeleTech Holdings, Inc. (a).................. 707,500 1,235,000
------------ ------------
10,507,474 14,515,785
------------ ------------
COMPUTER-COMMUNICATIONS EQUIPMENT-8.19%
23,000 Ascend Communications, Inc. (a).............. 1,298,706 1,428,875
29,000 Cascade Communications Corp. (a)............. 1,410,601 1,598,625
39,800 Cisco Systems, Inc. (a)...................... 650,812 2,532,275
44,000 Network General Corp. (a).................... 817,067 1,331,000
20,000 Shiva Corp. (a).............................. 902,188 697,500
12,500 Xylan Corp. (a).............................. 743,750 353,125
------------ ------------
5,823,124 7,941,400
------------ ------------
COMPUTER-SOFTWARE-17.28%
14,000 Aspen Technology, Inc. (a)................... 715,546 1,123,500
2,400 Citrix Systems, Inc. (a)..................... 18,000 93,750
3,100 Cybercash, Inc. (a).......................... 52,700 71,300
2,600 CyberMedia, Inc. (a)......................... 41,600 40,950
28,000 HNC Software, Inc. (a)....................... 926,744 878,500
48,600 Informix Corp. (a)........................... 735,304 990,225
13,000 INSO Corp. (a)............................... 646,750 516,750
48,000 Legato Systems, Inc. (a)..................... 768,375 1,566,000
20,000 Lernout and Hauspie Speech Products N.V.
(a)........................................ 761,669 335,000
17,000 Netscape Communications Corp. (a)............ 804,762 966,875
19,600 Parametric Technology Corp. (a).............. 324,960 1,006,950
26,800 Platinum Technology, Inc. (a)................ 377,234 365,150
33,000 Pure Atria Corp. (a)......................... 1,196,373 816,750
18,000 Rational Software Corp. (a).................. 679,500 712,125
19,000 Scopus Technology, Inc. (a).................. 378,029 883,500
36,200 Siebel Systems Inc. (a)...................... 876,756 977,400
25,178 Sterling Commerce, Inc. (a).................. 417,489 887,520
11,100 Sterling Software, Inc. (a).................. 138,980 351,037
24,000 Synopsys, Inc. (a)........................... 661,712 1,110,000
30,000 Vantive Corp. (a)............................ 910,758 937,500
19,450 Veritas Software Corp. (a)................... 890,183 967,637
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
74,800 Verity Inc. (a).............................. $ 927,909 $ 1,150,050
------------ ------------
13,251,333 16,748,469
------------ ------------
CONSUMER GOODS-0.90%
43,000 Seattle Film Works, Inc. (a)................. 688,000 876,125
------------ ------------
EDUCATIONAL SERVICES-2.46%
45,000 Apollo Group, Inc. Class A (a)............... 872,434 1,504,687
58,000 National Education Corp. (a)................. 985,260 884,500
------------ ------------
1,857,694 2,389,187
------------ ------------
ELECTRICAL EQUIPMENT-1.61%
37,500 Chicago Miniature Lamp, Inc. (a)............. 1,106,250 1,556,250
------------ ------------
HEALTH CARE SERVICES-8.47%
23,850 ABR Information Services, Inc. (a)........... 1,076,434 939,094
114,000 American Oncology Resources, Inc. (a) 1,495,925 1,168,500
31,000 HCIA, Inc. (a)............................... 1,095,658 1,069,500
28,000 Medic Computer Systems, Inc. (a)............. 745,573 1,128,750
28,000 Medpartners, Inc. (a)........................ 668,842 588,000
46,000 Omnicare, Inc................................ 706,235 1,477,750
10,000 Parexel International Corp. (a).............. 337,500 516,250
40,000 Pharmaceutical Products Development, Inc.
(a)........................................ 1,043,045 1,010,000
22,300 Transition Systems, Inc. (a)................. 481,871 314,987
------------ ------------
7,651,083 8,212,831
------------ ------------
MACHINERY-OIL AND WELL-2.96%
75,000 Input/Output, Inc. (a)....................... 1,212,054 1,387,500
38,000 Petroleum Geo-Services ADR (a)............... 964,878 1,482,000
------------ ------------
2,176,932 2,869,500
------------ ------------
MEDICAL SUPPLIES-0.74%
20,000 Idexx Laboratories, Inc. (a)................. 784,375 720,000
------------ ------------
OIL AND GAS FIELD SERVICES-0.97%
19,500 Trico Marine Services Inc. (a)............... 768,729 936,000
------------ ------------
OIL-OFFSHORE DRILLING-0.65%
16,000 Falcon Drilling Co. (a)...................... 568,000 628,000
------------ ------------
RESTAURANTS AND FRANCHISING-3.51%
9,200 Applebees International, Inc................. 143,065 253,000
26,500 Famous Dave's of America..................... 210,902 218,625
26,500 Famous Dave's of America (Warrants).......... 72,498 56,313
23,000 Lone Star Steakhouse & Saloon, Inc. (a) 769,775 615,250
12,600 Papa John's International, Inc. (a).......... 153,850 425,250
40,000 Quality Dining, Inc. (a)..................... 1,000,000 715,000
47,500 Rainforest Cafe, Inc. (a).................... 1,432,502 1,116,250
------------ ------------
3,782,592 3,399,688
------------ ------------
RETAIL-MISCELLANEOUS-1.67%
34,500 Corporate Express, Inc. (a).................. 674,375 1,015,594
27,600 PetsMart, Inc. (a)........................... 310,538 603,750
------------ ------------
984,913 1,619,344
------------ ------------
RETAIL-SPECIALTY-5.50%
43,900 American Eagle Outfitters, Inc. (a).......... 1,206,063 345,713
24,000 Bed, Bath & Beyond, Inc. (a)................. 347,675 582,000
45,900 CUC International, Inc. (a).................. 985,999 1,090,125
47,100 Gadzooks, Inc. (a)........................... 600,633 859,575
36,000 Just for Feet, Inc. (a)...................... 1,252,500 945,000
53,400 West Marine, Inc. (a)........................ 803,200 1,508,550
------------ ------------
5,196,070 5,330,963
------------ ------------
</TABLE>
64
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
TELECOMMUNICATION EQUIPMENT-4.46%
25,000 ADC Telecommunications, Inc. (a)............. $ 403,225 $ 778,125
9,400 Advanced Fibre Communications (a)............ 532,994 522,875
36,000 Pairgain Technologies, Inc. (a).............. 1,276,349 1,095,750
26,800 Tellabs, Inc.(a)............................. 311,000 1,008,350
40,000 Westell Technologies, Inc. Class A (a)....... 1,471,470 915,000
------------ ------------
3,995,038 4,320,100
------------ ------------
TELEPHONE SERVICES-7.28%
32,250 Brooks Fiber Properties, Inc. (a)............ 934,159 822,375
36,400 ICG Communications, Inc. (a)................. 545,334 641,550
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
45,000 Intermedia Communications, Inc. (a).......... $ 759,375 $ 1,158,750
49,200 LCI International, Inc. (a).................. 739,740 1,057,800
50,000 McLeod, Inc. Class A (a)..................... 1,190,951 1,275,000
38,600 MFS Communications Co., Inc. (a)............. 779,723 2,103,700
------------ ------------
4,949,282 7,059,175
------------ ------------
WASTE DISPOSAL-1.61%
45,400 United Waste Systems, Inc. (a)............... 698,075 1,560,625
------------ ------------
TOTAL COMMON STOCKS.......................... $ 67,796,597 $ 83,089,079
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-14.78%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-4.83%
$4,688,000 First Trust Money Market Variable Rate Time
Deposit, Current rate -- 5.19%............. $ 4,688,000
------------
DIVERSIFIED FINANCE-2.74%
2,653,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.29%...................... 2,653,000
------------
U.S. GOVERNMENT AGENCY-7.21%
4,400,000 Federal National Mortgage Assoc., 5.40%,
1-7-1997................................... 4,395,466
2,600,000 Federal Home Loan Mortgage Corp., 5.44%,
1-15-1997.................................. 2,594,215
------------
6,989,681
------------
TOTAL SHORT-TERM INVESTMENTS................. 14,330,681
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$82,127,278) (b)........................... $97,419,760
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1996, the cost of securities for federal income tax
purposes was $82,127,278 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $22,481,528
Unrealized depreciation..................................... (7,189,046)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $15,292,482
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Note: Percentage of investments as shown is the ratio of the total market
value to total net assets. Market value of investments in foreign
securities represents 2.41% of net assets as of December 31, 1996.
65
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Assets and Liabilities
December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY U.S. GOV'T. DIVERSIFIED GLOBAL HIGH
MARKET SECURITIES INCOME BOND YIELD
SERIES SERIES SERIES SERIES SERIES
------------ ------------- ----------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $61,376,239 $ 159,828,041 $ 105,700,242 $ 20,043,504 $ 42,335,793
Cash on deposit with custodian........ -- 514,161 1,080 15,803 94,457
Foreign currency on deposit with
custodian........................... -- -- -- 94,221 --
Collateral for securities lending
transactions (Note 1)............... -- -- -- -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- -- 53,577 --
Investment securities sold.......... -- 104 33,713 -- 541,330
Interest and dividends.............. 12,867 1,256,128 1,302,370 579,293 727,950
Subscriptions of capital stock...... 642,141 159,686 -- -- 211,812
Prepaid expenses...................... -- -- -- -- --
------------ ------------- ----------------- --------------- ----------------
TOTAL ASSETS............................ 62,031,247 161,758,120 107,037,405 20,786,398 43,911,342
------------ ------------- ----------------- --------------- ----------------
LIABILITIES:
Bank overdraft........................ 2,406 -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- -- -- -- --
Payable for investment securities
purchased........................... -- -- 1,096,250 -- 1,308,750
Redemptions of capital stock.......... 102,324 4,329 59,291 537,150 --
Payable for investment advisory and
management fees (Note 2)............ 15,089 63,888 42,670 13,179 17,538
Accounts payable and accrued
expenses............................ 5,077 11,930 8,594 8,448 6,994
------------ ------------- ----------------- --------------- ----------------
TOTAL LIABILITIES....................... 124,896 80,147 1,206,805 558,777 1,333,282
------------ ------------- ----------------- --------------- ----------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share-authorized
20,000,000,000 shares**............. 59,304,793 170,784,186 107,281,596 19,731,401 43,603,746
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... (3,000) 1,597,346 900,156 144,340 86,094
Undistributed net investment income... 2,705,009 10,455,469 7,379,870 162,922 78,341
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ (100,451) (21,159,028) (9,731,022) 188,958 (1,190,121)
------------ ------------- ----------------- --------------- ----------------
TOTAL NET ASSETS........................ $61,906,351 $ 161,677,973 $ 105,830,600 $ 20,227,621 $ 42,578,060
------------ ------------- ----------------- --------------- ----------------
NET ASSET VALUE PER SHARE............... $10.94 $10.57 $11.70 $11.11 $9.83
------------ ------------- ----------------- --------------- ----------------
*Cost................................... $61,379,239 $ 158,230,695 $ 104,800,086 $ 19,955,999 $ 42,249,699
**Outstanding shares.................... 5,656,757 15,296,587 9,046,813 1,820,600 4,333,334
<CAPTION>
ASSET
ALLOCATION
SERIES
-----------------
<S> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $ 400,069,025
Cash on deposit with custodian........ 669,900
Foreign currency on deposit with
custodian........................... --
Collateral for securities lending
transactions (Note 1)............... --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... --
Investment securities sold.......... --
Interest and dividends.............. 2,019,991
Subscriptions of capital stock...... --
Prepaid expenses...................... --
-----------------
TOTAL ASSETS............................ 402,758,916
-----------------
LIABILITIES:
Bank overdraft........................ --
Payable upon return of securities
loaned (Note 1)..................... --
Payable for investment securities
purchased........................... 4,799,680
Redemptions of capital stock.......... 57,675
Payable for investment advisory and
management fees (Note 2)............ 163,021
Accounts payable and accrued
expenses............................ 26,207
-----------------
TOTAL LIABILITIES....................... 5,046,583
-----------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share-authorized
20,000,000,000 shares**............. 324,477,828
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 71,691,503
Undistributed net investment income... 156,227
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 1,386,775
-----------------
TOTAL NET ASSETS........................ $ 397,712,333
-----------------
NET ASSET VALUE PER SHARE............... $16.99
-----------------
*Cost................................... $ 328,377,522
**Outstanding shares.................... 23,404,342
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL ASSET GROWTH & S & P 500
ALLOCATION VALUE INCOME INDEX
SERIES SERIES SERIES SERIES
---------------- ---------------- ----------------- ----------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1)...................... $ 36,914,826 $ 14,159,091 $ 133,537,710 $ 22,032,955
Cash on deposit with custodian.......... -- 117,427 299 --
Foreign currency on deposit with
custodian............................. 89,069 -- -- --
Collateral for securities lending
transactions (Note 1)................. -- -- -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... 15,775 -- -- --
Investment securities sold............ 16,981 -- 939,041 --
Interest and dividends................ 412,137 26,990 254,553 37,595
Subscriptions of capital stock........ 106,483 54,489 283,243 93,110
Prepaid expenses........................ -- 945 -- 63
---------------- ---------------- ----------------- ----------------
TOTAL ASSETS............................ 37,555,271 14,358,942 135,014,846 22,163,723
---------------- ---------------- ----------------- ----------------
LIABILITIES:
Bank overdraft........................ -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- -- -- --
Payable for investment securities
purchased........................... 54,375 397,860 -- 131,334
Redemptions of capital stock.......... 146,953 -- -- 33,300
Payable for investment advisory and
management fees (Note 2)............ 27,803 7,800 75,965 7,141
Accounts payable and accrued
expenses............................ 19,108 1,807 6,676 13,359
---------------- ---------------- ----------------- ----------------
TOTAL LIABILITIES....................... 248,239 407,467 82,641 185,134
---------------- ---------------- ----------------- ----------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share-authorized
20,000,000,000 shares**............. 34,095,931 12,965,555 110,792,259 20,168,129
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 3,097,304 995,833 24,607,177 1,718,465
Undistributed net investment income... 78,306 5,662 4,639 6,792
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 35,491 (15,575) (471,870) 85,203
---------------- ---------------- ----------------- ----------------
TOTAL NET ASSETS........................ $ 37,307,032 $ 13,951,475 $ 134,932,205 $ 21,978,589
---------------- ---------------- ----------------- ----------------
NET ASSET VALUE PER SHARE............... $12.34 $11.38 $15.16 $11.47
---------------- ---------------- ----------------- ----------------
*Cost................................... $ 33,831,706 $ 13,163,258 $ 108,930,533 $ 20,311,240
**Outstanding shares.................... 3,022,304 1,226,043 8,898,856 1,916,785
<CAPTION>
BLUE CHIP GLOBAL GROWTH INTERNATIONAL
STOCK GROWTH STOCK STOCK
SERIES SERIES SERIES SERIES
---------------- ----------------- ----------------- ---------------
<S> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1)...................... $ 17,827,861 $ 319,623,429 $ 661,691,687 $ 52,476,151
Cash on deposit with custodian.......... -- 795 919 --
Foreign currency on deposit with
custodian............................. -- -- -- --
Collateral for securities lending
transactions (Note 1)................. -- 79,685,151 -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... -- -- -- --
Investment securities sold............ 3,155 -- -- --
Interest and dividends................ 21,336 205,862 224,676 168,809
Subscriptions of capital stock........ 21,034 291,675 -- --
Prepaid expenses........................ 2,925 -- -- 427
---------------- ----------------- ----------------- ---------------
TOTAL ASSETS............................ 17,876,311 399,806,912 661,917,282 52,645,387
---------------- ----------------- ----------------- ---------------
LIABILITIES:
Bank overdraft........................ -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- 79,685,151 -- --
Payable for investment securities
purchased........................... 233,104 -- -- --
Redemptions of capital stock.......... 20,500 68,814 313,213 236,053
Payable for investment advisory and
management fees (Note 2)............ 12,996 186,813 349,361 36,518
Accounts payable and accrued
expenses............................ 3,553 35,413 37,666 41,475
---------------- ----------------- ----------------- ---------------
TOTAL LIABILITIES....................... 270,153 79,976,191 700,240 314,046
---------------- ----------------- ----------------- ---------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share-authorized
20,000,000,000 shares**............. 15,836,984 231,190,342 426,254,517 47,238,758
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 1,757,318 105,551,373 239,570,496 5,009,040
Undistributed net investment income... 777 -- 66,146 45,335
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 11,079 (16,910,994) (4,674,117) 38,208
---------------- ----------------- ----------------- ---------------
TOTAL NET ASSETS........................ $ 17,606,158 $ 319,830,721 $ 661,217,042 $ 52,331,341
---------------- ----------------- ----------------- ---------------
NET ASSET VALUE PER SHARE............... $11.67 $19.00 $32.59 $12.44
---------------- ----------------- ----------------- ---------------
*Cost................................... $ 16,070,543 $ 214,071,714 $ 422,121,191 $ 47,467,536
**Outstanding shares.................... 1,508,633 16,836,922 20,286,628 4,206,065
<CAPTION>
AGGRESSIVE
GROWTH
SERIES
----------------
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1)...................... $ 97,419,760
Cash on deposit with custodian.......... 953
Foreign currency on deposit with
custodian............................. --
Collateral for securities lending
transactions (Note 1)................. --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... --
Investment securities sold............ --
Interest and dividends................ 28,457
Subscriptions of capital stock........ 18,645
Prepaid expenses........................ 464
----------------
TOTAL ASSETS............................ 97,468,279
----------------
LIABILITIES:
Bank overdraft........................ --
Payable upon return of securities
loaned (Note 1)..................... --
Payable for investment securities
purchased........................... 377,234
Redemptions of capital stock.......... 96,833
Payable for investment advisory and
management fees (Note 2)............ 57,350
Accounts payable and accrued
expenses............................ 6,099
----------------
TOTAL LIABILITIES....................... 537,516
----------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share-authorized
20,000,000,000 shares**............. 87,922,312
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 15,292,482
Undistributed net investment income... 1,353
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ (6,285,384)
----------------
TOTAL NET ASSETS........................ $ 96,930,763
----------------
NET ASSET VALUE PER SHARE............... $13.62
----------------
*Cost................................... $ 82,127,278
**Outstanding shares.................... 7,116,883
</TABLE>
67
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Operations
For the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY U.S. GOV'T. DIVERSIFIED GLOBAL HIGH ASSET
MARKET SECURITIES INCOME BOND YIELD ALLOCATION
SERIES SERIES SERIES SERIES SERIES SERIES
----------- ------------ ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $2,906,077 $11,346,227 $ 7,883,291 $1,067,999 $3,714,195 $14,666,315
Dividend Income..................... -- -- -- -- -- 927,456
Fee income (Note 1)................. -- -- -- -- -- --
----------- ------------ ------------ ----------- ----------- ------------
Total Income *........................ 2,906,077 11,346,227 7,883,291 1,067,999 3,714,195 15,593,771
----------- ------------ ------------ ----------- ----------- ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 157,756 786,612 503,938 131,386 171,148 1,794,647
Legal and auditing fees (Note 2).... 13,150 26,800 18,430 9,360 13,900 32,000
Custodian fees...................... 11,000 31,900 21,456 30,746 17,000 57,000
Trademark expenses.................. -- -- -- -- -- --
Shareholders' notices and reports... 15,309 47,750 29,140 2,985 9,005 100,600
Directors' fees and expenses........ 1,439 4,900 3,050 150 980 10,500
Other............................... 2,168 8,051 5,333 5,284 3,153 13,222
----------- ------------ ------------ ----------- ----------- ------------
Total Expenses........................ 200,822 906,013 581,347 179,911 215,186 2,007,969
----------- ------------ ------------ ----------- ----------- ------------
NET INVESTMENT INCOME................... 2,705,255 10,440,214 7,301,944 888,088 3,499,009 13,585,802
----------- ------------ ------------ ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
(NOTE 1)
Net realized gain (loss) from:
Investments......................... -- (834,376) (825,580) 385,391 305,622 14,650,440
Foreign currency transactions....... -- -- -- (55,670) -- --
----------- ------------ ------------ ----------- ----------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN
CURRENCY TRANSACATIONS................ -- (834,376) (825,580) 329,721 305,622 14,650,440
----------- ------------ ------------ ----------- ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... (52,386) (6,445,889) (2,233,621) (147,788) (372,410) 15,819,704
Translation of assets and liabilities
denominated in foreign currency..... -- -- -- (291,902) -- --
----------- ------------ ------------ ----------- ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACATIONS........................... (52,386) (6,445,889) (2,233,621) (439,690) (372,410) 15,819,704
----------- ------------ ------------ ----------- ----------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY........................ (52,386) (7,280,265) (3,059,201) (109,969) (66,788) 30,470,144
----------- ------------ ------------ ----------- ----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... $2,652,869 $ 3,159,949 $ 4,242,743 $ 778,119 $3,432,221 $44,055,946
----------- ------------ ------------ ----------- ----------- ------------
</TABLE>
<TABLE>
<CAPTION>
*Net of foreign witholding taxes of:
<S> <C>
Global Bond Series $ 2,502
Asset Allocation Series 14,444
Global Asset Allocation Series 30,666
Global Growth Series 129,787
International Stock Series 71,735
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
ASSET GROWTH & S & P 500 BLUE CHIP GLOBAL
ALLOCATION VALUE INCOME INDEX STOCK GROWTH
SERIES SERIES SERIES SERIES SERIES SERIES
----------- ----------- ------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income....................... $ 893,130 $ 38,510 $ 748,726 $ 12,220 $ 51,685 $ 979,521
Dividend Income....................... 316,718 83,720 2,245,756 185,080 93,062 1,472,770
Fee income (Note 1)................... -- -- -- -- -- 93,561
----------- ----------- ------------ ----------- ----------- ------------
Total Income *.......................... 1,209,848 122,230 2,994,482 197,300 144,747 2,545,852
----------- ----------- ------------ ----------- ----------- ------------
Expenses:
Investment advisory and management
fees (Note 2)....................... 258,678 32,997 660,575 34,900 66,780 1,888,142
Legal and auditing fees (Note 2)...... 14,798 3,497 16,100 7,758 5,130 30,613
Custodian fees........................ 61,616 3,900 20,100 18,821 9,500 135,400
Trademark expenses.................... -- -- -- 5,000 -- --
Shareholders' notices and reports..... 6,152 478 21,960 1,520 1,835 68,435
Directors' fees and expenses.......... 720 73 2,900 350 228 7,049
Other................................. 3,424 102 4,584 449 169 9,890
----------- ----------- ------------ ----------- ----------- ------------
Total Expenses.......................... 345,388 41,047 726,219 68,798 83,642 2,139,529
----------- ----------- ------------ ----------- ----------- ------------
NET INVESTMENT INCOME................... 864,460 81,183 2,268,263 128,502 61,105 406,323
----------- ----------- ------------ ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
(NOTE 1)
Net realized gain (loss) from:
Investments......................... 557,455 (15,575) 1,336,739 86,309 11,079 (3,129,858)
Foreign currency transactions....... 111,077 -- -- -- -- (12,776)
----------- ----------- ------------ ----------- ----------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN
CURRENCY TRANSACATIONS................ 668,532 (15,575) 1,336,739 86,309 11,079 (3,142,634)
----------- ----------- ------------ ----------- ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 2,188,922 995,833 15,884,901 1,718,465 1,757,318 46,401,691
Translation of assets and liabilities
denominated in foreign currency..... (170,228) -- -- -- -- (955)
----------- ----------- ------------ ----------- ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACATIONS........................... 2,018,694 995,833 15,884,901 1,718,465 1,757,318 46,400,736
----------- ----------- ------------ ----------- ----------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY........................ 2,687,226 980,258 17,221,640 1,804,774 1,768,397 43,258,102
----------- ----------- ------------ ----------- ----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... $3,551,686 $1,061,441 $19,489,903 $1,933,276 $1,829,502 $43,664,425
----------- ----------- ------------ ----------- ----------- ------------
<CAPTION>
GROWTH INTERNATIONAL AGGRESSIVE
STOCK STOCK GROWTH
SERIES SERIES SERIES
------------ ----------- ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income....................... $ 5,449,572 $ 162,582 $ 746,010
Dividend Income....................... 933,561 899,406 19,920
Fee income (Note 1)................... -- -- --
------------ ----------- ------------
Total Income *.......................... 6,383,133 1,061,988 765,930
------------ ----------- ------------
Expenses:
Investment advisory and management
fees (Note 2)....................... 3,734,829 317,951 535,835
Legal and auditing fees (Note 2)...... 42,837 13,304 15,020
Custodian fees........................ 79,151 78,367 19,946
Trademark expenses.................... -- -- --
Shareholders' notices and reports..... 167,679 13,643 17,612
Directors' fees and expenses.......... 16,973 1,000 2,026
Other................................. 21,490 3,343 4,636
------------ ----------- ------------
Total Expenses.......................... 4,062,959 427,608 595,075
------------ ----------- ------------
NET INVESTMENT INCOME................... 2,320,174 634,380 170,855
------------ ----------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY:
(NOTE 1)
Net realized gain (loss) from:
Investments......................... 22,383,900 913,155 (4,837,293)
Foreign currency transactions....... -- 6,403 --
------------ ----------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN
CURRENCY TRANSACATIONS................ 22,383,900 919,558 (4,837,293)
------------ ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 65,647,351 3,682,861 6,947,700
Translation of assets and liabilities
denominated in foreign currency..... -- 584 --
------------ ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACATIONS........................... 65,647,351 3,683,445 6,947,700
------------ ----------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY........................ 88,031,251 4,603,003 2,110,407
------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... $90,351,425 $5,237,383 $ 2,281,262
------------ ----------- ------------
</TABLE>
69
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
U.S. GOVERNMENT
MONEY MARKET SERIES SECURITIES SERIES
- -------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 2,705,255 $ 2,222,930 $ 10,440,214 $ 11,811,430
Net realized gain (loss) on
investments and foreign currency
transactions........................ -- -- (834,376) (173,955)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... (52,386) 47,894 (6,445,889) 18,308,069
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 2,652,869 2,270,824 3,159,949 29,945,544
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (2,223,183) (1,570,821) (11,838,465) (8,675)
From net realized gains on
investments......................... -- -- -- --
Excess distributions of net realized
gains............................... -- -- (28,104) --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (2,223,183) (1,570,821) (11,866,569) (8,675)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 62,995,729 36,255,680 11,422,482 10,572,854
Proceeds from shares issued as a
result of reinvested dividends...... 2,223,183 1,570,821 11,866,569 8,675
Less cost of repurchase............... (45,549,360) (41,552,126) (35,591,789) (30,487,565)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 19,669,552 (3,725,625) (12,302,738) (19,906,036)
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 20,099,238 (3,025,622) (21,009,358) 10,030,833
NET ASSETS:
Beginning of period................... 41,807,113 44,832,735 182,687,331 172,656,498
------------- ------------- ------------- -------------
End of period (Note 5)................ $ 61,906,351 $ 41,807,113 $161,677,973 $182,687,331
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL ASSET
ASSET ALLOCATION SERIES ALLOCATION SERIES
- -----------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 13,585,802 $ 12,830,751 $ 864,460 $ 389,354
Net realized gain (loss) on
investments and foreign currency
transactions........................ 14,650,440 1,295,064 668,532 235,189
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... 15,819,704 43,924,636 2,018,694 1,078,610
------------- ------------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 44,055,946 58,050,451 3,551,686 1,703,153
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (13,564,759) (12,700,612) (897,921) (384,576)
From net realized gains on
investments......................... (6,227,823) -- (601,285) (159,956)
Excess distributions of net realized
gains............................... (158,951) (287,248) -- --
------------- ------------- ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (19,951,533) (12,987,860) (1,499,206) (544,532)
------------- ------------- ------------ ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 36,485,877 31,823,988 17,172,109 18,857,559
Proceeds from shares issued as a
result of reinvested dividends...... 19,951,533 12,987,860 1,499,206 544,532
Less cost of repurchase............... (24,340,796) (8,956,238) (3,496,933) (480,542)
------------- ------------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 32,096,614 35,855,610 15,174,382 18,921,549
------------- ------------- ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 56,201,027 80,918,201 17,226,862 20,080,170
NET ASSETS:
Beginning of period................... 341,511,306 260,593,105 20,080,170 --
------------- ------------- ------------ ------------
End of period (Note 5)................ $397,712,333 $341,511,306 $37,307,032 $20,080,170
------------- ------------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
<TABLE>
<CAPTION>
DIVERSIFIED INCOME SERIES GLOBAL BOND SERIES HIGH YIELD SERIES
- -----------------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995 1996 1995
------------- ------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 7,301,944 $ 7,976,729 $ 888,088 $ 485,845 $ 3,499,009 $ 2,384,126
Net realized gain (loss) on
investments and foreign currency
transactions........................ (825,580) (1,398,057) 329,721 316,175 305,622 (1,238,691)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... (2,233,621) 9,667,974 (439,690) 584,030 (372,410) 1,145,719
------------- ------------- ------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 4,242,743 16,246,646 778,119 1,386,050 3,432,221 2,291,154
------------- ------------- ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (8,135,037) (3,947) (669,496) (485,845) (3,450,721) (2,354,226)
From net realized gains on
investments......................... -- -- (311,936) (200,672) -- (366)
Excess distributions of net realized
gains............................... (78,938) -- -- -- (171,270) (84,407)
------------- ------------- ------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (8,213,975) (3,947) (981,432) (686,517) (3,621,991) (2,438,999)
------------- ------------- ------------ ------------ ------------ ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 6,371,872 7,246,843 9,900,900 14,567,624 16,606,547 15,339,416
Proceeds from shares issued as a
result of reinvested dividends...... 8,213,975 3,947 981,432 686,517 3,621,991 2,438,999
Less cost of repurchase............... (13,903,761) (12,687,564) (3,638,872) (2,766,200) (5,589,855) (3,207,237)
------------- ------------- ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 682,086 (5,436,774) 7,243,460 12,487,941 14,638,683 14,571,178
------------- ------------- ------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. (3,289,146) 10,805,925 7,040,147 13,187,474 14,448,913 14,423,333
NET ASSETS:
Beginning of period................... 109,119,746 98,313,821 13,187,474 -- 28,129,147 13,705,814
------------- ------------- ------------ ------------ ------------ ------------
End of period (Note 5)................ $105,830,600 $109,119,746 $20,227,621 $13,187,474 $42,578,060 $28,129,147
------------- ------------- ------------ ------------ ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
S & P 500 BLUE CHIP
VALUE SERIES GROWTH & INCOME SERIES INDEX SERIES STOCK SERIES
- -------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
PERIOD FROM PERIOD FROM PERIOD FROM
MARCH 28, MARCH 28, MARCH 28,
1996 1996 1996
(INCEPTION) FOR THE FOR THE (INCEPTION) (INCEPTION)
TO YEAR ENDED YEAR ENDED TO TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1996 1995 1996 1996
------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 81,183 $ 2,268,263 $ 1,013,019 $ 128,502 $ 61,105
Net realized gain (loss) on
investments and foreign currency
transactions........................ (15,575) 1,336,739 (355,389) 86,309 11,079
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... 995,833 15,884,901 8,815,109 1,718,465 1,757,318
------------ ------------- ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 1,061,441 19,489,903 9,472,739 1,933,276 1,829,502
------------ ------------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (75,521) (2,285,895) (994,141) (121,710) (60,328)
From net realized gains on
investments......................... -- (1,402,797) -- (1,106) --
Excess distributions of net realized
gains............................... -- -- -- -- --
------------ ------------- ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (75,521) (3,688,692) (994,141) (122,816) (60,328)
------------ ------------- ------------ ------------ ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 13,000,854 58,720,953 34,778,769 21,220,266 18,830,072
Proceeds from shares issued as a
result of reinvested dividends...... 75,521 3,688,692 994,141 122,816 60,328
Less cost of repurchase............... (110,820) (2,811,581) (994,663) (1,174,953) (3,053,416)
------------ ------------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 12,965,555 59,598,064 34,778,247 20,168,129 15,836,984
------------ ------------- ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 13,951,475 75,399,275 43,256,845 21,978,589 17,606,158
NET ASSETS:
Beginning of period................... -- 59,532,930 16,276,085 -- --
------------ ------------- ------------ ------------ ------------
End of period (Note 5)................ $13,951,475 $134,932,205 $59,532,930 $21,978,589 $17,606,158
------------ ------------- ------------ ------------ ------------
</TABLE>
71
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
GLOBAL GROWTH SERIES GROWTH STOCK SERIES
- -------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 406,323 $ 1,108,355 $ 2,320,174 $ 2,379,239
Net realized gain (loss) on
investments and foreign currency
transactions........................ (3,142,634) (7,950,095) 22,383,900 (947,755)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... 46,400,736 51,532,856 65,647,351 106,596,487
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 43,664,425 44,691,116 90,351,425 108,027,971
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (420,937) (1,085,007) (2,282,758) (2,351,222)
Tax return of capital................. (12,672) -- -- --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (433,609) (1,085,007) (2,282,758) (2,351,222)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 75,164,853 27,895,172 67,982,620 60,908,396
Proceeds from shares issued as a
result of reinvested dividends...... 433,609 1,085,007 2,282,758 2,351,222
Less cost of repurchase............... (6,911,460) (9,320,296) (28,061,530) (15,474,378)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 68,687,002 19,659,883 42,203,848 47,785,240
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 111,917,818 63,265,992 130,272,515 153,461,989
NET ASSETS:
Beginning of period................... 207,912,903 144,646,911 530,944,527 377,482,538
------------- ------------- ------------- -------------
End of period (Note 5)................ $319,830,721 $207,912,903 $661,217,042 $530,944,527
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL STOCK SERIES AGGRESSIVE GROWTH SERIES
- ---------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 634,380 $ 170,404 $ 170,855 $ 164,467
Net realized gain (loss) on
investments and foreign currency
transactions........................ 919,558 237,666 (4,837,293) (1,338,512)
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency.................... 3,683,445 1,325,595 6,947,700 7,867,124
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... 5,237,383 1,733,665 2,281,262 6,693,079
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ (698,708) (104,078) (169,502) (164,573)
From net realized gains on
investments......................... (882,391) (193,288) -- --
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... (1,581,099) (297,366) (169,502) (164,573)
------------ ------------ ------------ ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 6)
Proceeds from sale of shares.......... 30,566,115 19,917,541 54,010,106 31,077,776
Proceeds from shares issued as a
result of reinvested dividends...... 1,581,099 297,366 169,502 164,631
Less cost of repurchase............... (4,799,479) (323,884) (6,303,867) (4,353,338)
------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS................ 27,347,735 19,891,023 47,875,741 26,889,069
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS.................................. 31,004,019 21,327,322 49,987,501 33,417,575
NET ASSETS:
Beginning of period................... 21,327,322 -- 46,943,262 13,525,687
------------ ------------ ------------ ------------
End of period (Note 5)................ $52,331,341 $21,327,322 $96,930,763 $46,943,262
------------ ------------ ------------ ------------
</TABLE>
72
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The fund is an open-end
management investment company which currently is comprised of fifteen
separate investment portfolios and series of capital stock: Money Market
Series, U.S. Government Securities Series, Diversified Income Series, High
Yield Series, Asset Allocation Series, Global Asset Allocation Series, Value
Series, Growth & Income Series, S & P 500 Index Series, Blue Chip Stock
Series, Global Growth Series, Growth Stock Series, International Stock Series
and Aggressive Growth Series, which are diversified portfolios, and Global
Bond Series which is non-diversified. Each Series has different investment
objectives and its own investment portfolio and net asset value. The
investment objectives of the Series, which can be changed at any time without
the approval of Contract owners, are as follows:
- The objectives of the "Money Market Series" are high levels of capital
stability and liquidity and, to the extent consistent with these primary
objectives, a high level of current income.
- The objective of the "U.S. Government Securities Series" is a high level of
current income through investment primarily in debt securities of varying
maturities which have been issued, guaranteed, insured or collateralized by
the United States Government or its agencies or instrumentalities.
- The objective of the "Diversified Income Series" is a high level of current
income by investing primarily in a diversified portfolio of government
securities and investment grade corporate bonds.
- The objective of the "Global Bond Series" is total return from current
income and capital appreciation. The Series invests in a global portfolio
principally consisting of high quality fixed-income securities of
governmental and corporate issuers and supranational organizations.
- The objective of the "High Yield Series" is maximum total return through
current income and capital appreciation by investing primarily in
high-yield, high-risk fixed-income securities.
- The objective of the "Asset Allocation Series" is maximum total return on
invested capital, to be derived primarily from capital appreciation,
dividends, and interest.
- The objective of the "Global Asset Allocation Series" is maximum total
return, to be derived primarily from capital appreciation, dividends and
interest, by following a flexible asset allocation strategy investing in
global securities.
- The objective of the "Value Series" is short and long-term capital
appreciation. Current income is only a secondary objective. The Series
invests primarily in equity securities and selects stocks based on the
"value" philosophy.
- The objective of the "Growth & Income Series" are capital appreciation and
current income, which such Series seeks by investing primarily in equity
securities that provide an income component and the potential for growth.
- The objective of the "S & P 500 Index Series" is to replicate the return of
the Standard & Poor's 500 Composite Stock Price Index (the "S & P 500
Index" or the "Index") primarily through investments in equity securities.
- The objective of the "Blue Chip Stock Series" is to provide long-term
growth of capital. Current income is a secondary objective, and many of the
stocks in the Series' portfolio are expected to pay dividends.
- The primary objective of the "Global Growth Series" is long-term
appreciation, which it seeks primarily by investing in a global portfolio
of equity securities, allocated among diverse international markets.
- The primary objective of the "Growth Stock Series" is short and long-term
capital appreciation. The Series will seek to meet these objectives by
investing primarily in common stocks and securities convertible into common
stocks.
- The objective of the "International Stock Series" is capital appreciation
by investing primarily in the equity securities of non-United States
companies.
- The objective of the "Aggressive Growth Series" is maximum long-term
capital appreciation by investing primarily in equity securities of small
and medium sized companies that are early in their life cycles, but which
have the potential to become major enterprises, and of more established
companies that have the potential for above-average capital growth.
The Articles of Incorporation of Fortis Series Fund, Inc., permits the Board
of Directors to create additional portfolios in the future. An investment in
the Money Market Series is neither insured nor guaranteed by the U.S.
Government.
Shares of the fund will not be sold directly to the public, but sold only to
Fortis Benefits Insurance Company or First Fortis Life separate accounts in
connection with variable insurance contracts and policies.
The inception of Value Series, S & P 500 Index Series, and Blue Chip Stock
Series was March 28, 1996, and the commencement of operations was May 1,
1996.
The significant accounting policies followed by the Funds are summarized as
follows:
SECURITY VALUATION: Investments in securities traded on U.S. or foreign
securities exchanges or on the NASDAQ National Market System are valued at
the last reported sales price. Securities for which over-the-counter market
quotations are readily available are valued on the basis of the last current
bid price. An outside pricing service may be utilized to provide such
valuations. The pricing service may employ electronic data processing
techniques and/or a matrix system to determine valuations using methods which
include consideration of yields or prices of bonds of comparable quality,
type of issue, coupon, maturity and rating indications as to value from
dealers, and general market conditions. Securities for which quotations are
not readily available are valued at fair value as determined in good faith by
management under supervision of the Board of Directors. Short-term
investments, with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued at amortized cost.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS: Delivery and payment for
securities that have been purchased by all portfolios except for Money Market
Series and Growth Stock Series on a forward commitment or when-issued basis
can take place a month or more after the transaction date. During this
period, such securities are subject to market fluctuation and the portfolio
maintains, in a segregated account with its custodian,
73
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
assets with a market value equal to the amount of its purchase commitments.
As of December 31, 1996 none of the portfolios had outstanding when-issued or
forward commitments.
FOREIGN CURRENCY TRANSLATIONS AND FORWARD FOREIGN CURRENCY CONTRACTS:
Securities and other assets and liabilities denominated in foreign currencies
are translated daily into U.S. dollars at the closing rate of exchange.
Foreign currency amounts related to the purchase or sale of securities,
income and expenses are translated at the exchange rate on the transaction
date. The effect of changes in foreign exchange rates on realized and
unrealized security gains or losses is reflected as a component of such gains
or losses. In the statement of operations, net realized gains or losses from
foreign currency transactions may arise from sales of foreign currency,
closed forward contracts, exchange gains or losses realized between the trade
date and settlement dates on securities transactions, and other translation
gains or losses on dividends, interest income and foreign withholding taxes.
Global Bond Series, High Yield Series, Global Asset Allocation Series, Blue
Chip Stock Series, Global Growth Series, International Stock Series, and
Aggressive Growth Series may enter into forward foreign currency exchange
contracts for operational purposes and to attempt to minimize the risk from
adverse exchange rate fluctuations. Global Bond Series, Global Asset
Allocation Series and International Stock Series may also enter into
speculative forward contracts. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the fund and the resulting
unrealized appreciation or depreciation are determined using foreign currency
exchange rates from an independent pricing service. The fund is subject to
the credit risk that the other party will not complete the obligations of the
contract.
SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex-dividend date for all funds or upon receipt of ex-dividend notification in
the case of certain foreign securities. Interest income is recorded on the
accrual basis. Realized security gains and losses are determined using the
identified cost method. For financial reporting purposes each portfolio
amortizes bond premium , market discount and original issue discount. For the
year ended December 31, 1996, the cost of purchases and proceeds from sales
of securities for Money Market Series were $321,445,992 and $303,052,167,
respectively. The cost of purchases and proceeds from sales of securities
(other than short-term securities) for the other portfolios were as follows:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
<S> <C> <C>
- ------------------------------------------------------------
U.S. Government
Securities Series...... $ 275,534,956 $ 305,065,482
Diversified Income
Series................. 178,226,145 175,138,588
Global Bond Series....... 26,840,310 20,238,166
High Yield Series........ 89,529,308 75,387,197
Asset Allocation
Series................. 438,723,579 410,411,391
Global Asset Allocation
Series................. 25,185,266 11,324,838
Value Series............. 13,823,794 2,164,446
Growth & Income Series... 62,605,482 15,986,117
S & P 500 Index Series... 20,331,691 651,929
Blue Chip Stock Series... 15,729,737 1,492,832
Global Growth Series..... 111,376,389 35,907,056
Growth Stock Series...... 223,424,905 149,775,916
International Stock
Series................. 35,270,950 9,497,132
<CAPTION>
Cost of Proceeds
Purchases from Sales
<S> <C> <C>
- ------------------------------------------------------------
Aggressive Growth
Series................. 53,962,528 13,761,519
</TABLE>
In the Global Asset Allocation Series for the period from January 2, 1996 to
December 31, 1996, brokerage commissions paid to an affiliated broker
amounted to $2,008.
LENDING OF PORTFOLIO SECURITIES: At December 31, 1996, securities valued at
$77,268,169 were on loan to brokers from Global Growth Series. For
collateral, the portfolio's custodian received $79,685,151 in cash which is
maintained in a separate account and invested by the custodian in short-term
investment vehicles. Fee income from securities lending amounted to $93,561
for the year ended December 31, 1996 for Global Growth Series. The risks to
the portfolio in security lending transactions are that the borrower may not
provide additional collateral when required or return the securities when due
and that the proceeds from the sale of investments made with cash collateral
received will be less than amounts required to be returned to the borrowers.
INCOME TAXES: The portfolios intend to qualify, under the Internal Revenue
Code, as regulated investment companies and if so qualified, will not have to
pay federal income taxes to the extent their taxable net income is
distributed. For tax purposes, each portfolio is a single taxable entity.
On a calendar year basis, each portfolio intends to distribute substantially
all of its net investment income and realized gains, if any, to avoid payment
of federal excise taxes.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the recognition of realized gain (loss)
from forgein currency transactions as ordinary income (loss) for tax purposes
and the deferral of "wash sale" losses for tax purposes. The character of
distributions made during the year from net investment income or net realized
gains may also differ from it's ultimate characterization for federal income
tax purposes.
On the Statement of Assets and Liabilities, due to permanent book-to-tax
differences, reclassification on adjustments in the following amounts have
been made to increase (decrease) accumulated net realized gain (loss) with an
offsetting increase (decrease) to undistributed net investment income.
<TABLE>
<CAPTION>
Global
Global Asset Global International
Bond Allocation Growth Stock
Series Series Series Series
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Accumulated Net Realized Gain (Loss)......... $ 55,670 $ (111,077) $ 12,776 $(96,763)
Undistributed Net Investment Income.......... $ (55,670) $ 111,077 $ (12,776) $ 96,763
</TABLE>
In addition, the Money Market Series, due to permanent book-to-tax
differences, accumulated net realized loss decreased by $20,625, which
resulted in a reclassification adjustment to decrease paid-in-capital by
$20,625.
For federal income tax purposes the portfolios had the following capital loss
carryovers at December 31, 1996, which, if not offset by subsequent
74
<PAGE>
- --------------------------------------------------------------------------------
capital gains, will expire in 1997 through 2005. It is unlikely the Board of
Directors will authorize a distribution of any net realized gains until the
available capital loss carryovers have been offset or expire.
<TABLE>
<S> <C>
Money Market Series.......................... $ 100,451
U.S. Government Securities Series............ 20,813,645
Diversified Income Series.................... 9,784,542
High Yield Series............................ 1,195,344
Growth & Income Series....................... 471,870
Global Growth Series......................... 16,910,994
Growth Stock Series.......................... 4,674,117
Aggressive Growth Series..................... 6,285,384
</TABLE>
ILLIQUID SECURITIES: At December 31, 1996, investments in securities for the
funds included issues that are illiquid. Money Market Series, U.S. Government
Series, Diversified Income Series, Asset Allocation Series, and Growth Series
currently limit investments in illiquid securities to 5% of total assets;
Global Growth Series to 10% of total assets; Global Bond Series, High Yield
Series, Global Asset Allocation Series, Growth and Income Series,
International Stock Series, Aggressive Growth Series, Value Series, S & P 500
Series, and Blue Chip Stock Series to 15%, of net assets, at market value, at
date of purchase. The aggregate values of such securities at December 31,
1996 were $2,486,550 Money Market Series; $1,137,282 Diversified Income
Series; $3,256,511 Asset Allocation Series; $5,456,325 High Yield Series;
$11,911,318 Global Growth Series, which represents 4.0%, 1.08%, .82%, 12.81%,
3.72% of net assets, respectively. Pursuant to guidelines adopted by the
Board of Directors, certain unregistered securities are determined to be
liquid and are not included within the percent limitations specified above.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: The portfolios intend to make income
and capital gains distributions, if any, on an annual basis. All
distributions will be reinvested in additional shares of the portfolio at net
asset value.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increase and decrease
in net assets from operations during the reporting period. Actual results
could differ from those estimates.
2. PAYMENTS TO RELATED PARTIES:
Fortis Advisers, Inc., (Advisers), is the investment adviser for each series.
Investment advisory and management fees are based on each series' average
daily net assets and decrease in reduced percentages as average daily net
assets increase.
The following chart represents the annual fee percentages:
<TABLE>
<CAPTION>
Annual
Investment Advisory
Series Average Net Assets and Management Fee
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Money Market Series For the first $500 million .3%
For assets over $500 million .25%
U.S. Government Securitites Series For the first $50 million .5%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .5%
For assets over $50 million .45%
Global Bond Series For the first $100 million .75%
For assets over $100 million .65%
<CAPTION>
Annual
Investment Advisory
Series Average Net Assets and Management Fee
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
High Yield Series For the first $250 million .5%
For assets over $250 million .45%
Asset Allocation Series For the first $250 million .5%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .9%
For assets over $100 million .85%
Value Series For the first $100 million .7%
For assets over $100 million .6%
Growth & Income Series For the first $100 million .7%
For assets over $100 million .6%
S & P 500 Index Series For all assets .4%
Blue Chip Stock Series For the first $100 million .9%
For assets over $100 million .85%
Global Growth Series For the first $500 million .7%
For assets over $500 million .6%
Growth Stock Series For the first $100 million .7%
For assets over $100 million .6%
International Stock Series For the first $100 million .85%
For assets over $100 million .8%
Aggressive Growth Series For the first $100 million .7%
For assets over $100 million .6%
</TABLE>
The Global Bond Series, Global Asset Allocation Series, International Stock
Series, S & P 500 Series, and Blue Chip Series have retained sub-advisers
under an investment sub-advisory agreements to provide investment advice and,
in general, to conduct the management investment program of each portfolio,
subject to the general control of Advisers and the Board of Directors of the
Fortis Series Fund, Inc. Pursuant to the sub-advisory agreements, each
sub-adviser will regularly provide its respective portfolio with investment
research, advice and supervision and furnish continuously an investment
program for each portfolio consistent with its investment objectives and
policies, including the purchase, retention and disposition of securities.
From its advisory fee, Advisers pays the following fees to each of the sub-
advisers:
<TABLE>
<CAPTION>
Annual
Advisory
Series Sub-Adviser Average Net Assets Fee
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Global Bond Series Mercury For the first $100 .35%
Asset Management million .225%
International Ltd. For assets over $100
million
Global Asset Allocation Morgan Stanley For the first $100 .5%
Series Asset Management million .4%
Limited For assets over $100
million
S & P 500 Series The Dreyfus Corporation For all levels of assets .17%
Blue Chip Stock Series T. Rowe Price Associate, For the first $100 .5%
Inc. million .45%
For assets over $100
million
International Stock Lazard-Freres Asset For the first 100 million .45%
Series Management For assets over $100 .375%
million
</TABLE>
75
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
For the year ended December 31, 1996, legal fees and expenses were paid as
follows to a law firm of which the secretary of the fund is a partner.
<TABLE>
<CAPTION>
Series Amount
<S> <C>
- ---------------------------------------------------------
Money Market Series.......................... $ 1,540
U.S. Government Securities Series............ 7,000
Diversified Income Series.................... 3,100
Global Bond Series........................... 2,622
High Yield Series............................ 1,300
Asset Allocation Series...................... 11,000
Global Asset Allocation Series............... 1,300
Value Series................................. 2,482
Growth & Income Series....................... 3,500
S & P 500 Index Series....................... 6,228
Blue Chip Stock Series....................... 3,600
<CAPTION>
Series Amount
<S> <C>
- ---------------------------------------------------------
Global Growth Series......................... $ 10,500
Growth Stock Series.......................... 20,675
International Stock Series................... 236
Aggressive Growth Series..................... 2,900
</TABLE>
3. FORWARD FOREIGN CURRENCY CONTRACTS: At December 31, 1996, the Global Bond
Series and Global Asset Allocation Series entered into forward foreign
currency exchange contracts that obligated the Series to deliver/receive
currencies at a specified future date. The unrealized appreciation
(depreciation) of $53,577 and $15,775, respectively, on these contracts is
included in the accompanying financial statements. The terms of the open
contracts are as follows:
<TABLE>
<CAPTION>
GLOBAL BOND SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To December Currecy To December Appreciation/
Settle Date Be Delivered 31, 1996 Be Received 31, 1996 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Jan. 30, 1997 400,000 400,000 45,383,000 393,342 (16,658)
U.S. Dollar Japanese Yen
Feb. 7, 1997 437,000 $347,134 348,045 $348,045 $ 911
Australian Dollar U.S. Dollar
Feb. 7, 1997 213,000 364,447 351,450 351,450 (12,997)
British Pound Sterling U.S. Dollar
Feb. 7, 1997 6,430,775 4,704,094 4,795,709 4,795,709 91,615
Canadian Dollar U.S. Dollar
Feb. 7, 1997 15,510,000 2,638,486 2,650,019 2,650,019 11,533
Danish Krone U.S. Dollar
Feb. 7, 1997 2,900,000 560,045 569,096 569,096 9,051
French Franc U.S. Dollar
Feb. 7, 1997 2,390,450 1,555,116 1,554,761 1,554,761 (355)
Deutsche Mark U.S. Dollar
Feb. 7, 1997 352,150,000 231,517 230,148 230,148 (1,369)
Italian Lira U.S. Dollar
Feb. 7, 1997 113,894,166 987,267 1,002,872 1,002,872 15,605
Japanese Yen U.S. Dollar
Feb. 7, 1997 206,750 1,592,092 1,624,347 1,624,347 32,255
Spanish Peseta U.S. Dollar
Feb. 7, 1997 2,200,000 323,717 333,172 333,172 9,455
Swedish Krona U.S. Dollar
Feb. 7, 1997 1,541,275 1,541,275 917,000 1,569,002 27,727
U.S. Dollar British Pound Sterling
Feb. 7, 1997 3,133,370 3,133,370 4,186,000 3,062,047 (71,323)
U.S. Dollar Canadian Dollar
Feb. 7, 1997 204,065 204,065 1,200,000 204,138 73
U.S. Dollar Danish Krone
Feb. 7, 1997 554,493 554,493 2,900,000 560,045 5,552
U.S. Dollar French Franc
Feb. 7, 1997 816,899 816,899 1,260,000 819,697 2,798
U.S. Dollar Deutsche Mark
Feb. 7, 1997 161,418 161,418 250,000,000 164,360 2,942
U.S. Dollar Italian Lira
Feb. 7, 1997 2,467,789 2,467,789 277,413,690 2,404,388 (53,401)
U.S. Dollar Japenese Yen
Feb. 7, 1997 224,582 224,582 385,000 223,325 (1,257)
U.S. Dollar Netherland Guilder
Feb. 7, 1997 322,297 322,297 2,200,000 323,717 1,420
U.S. Dollar Swedish Krona
----------- ----------- ---------------
$23,130,103 $23,183,680 $ 53,577
----------- ----------- ---------------
</TABLE>
76
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL ASSET ALLOCATION SERIES
- -------------------------------------------------------------------------------------------
U.S. U.S.
Dollar Dollar
Value As Value As
Of Of Unrealized
Currency To December Currency To December Appreciation/
Settle Date Be Delivered 31, 1996 Be Received 31, 1996 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Jan. 21, 1997 1,441,192 $1,441,192 2,200,000 $1,429,629 $(11,563)
U.S. Dollar Deutsche Mark
Feb. 12, 1997 150,000 150,000 91,321 156,231 6,231
U.S. Dollar British Pounds
Feb. 18, 1997 573,082 573,082 861,287 560,688 (12,394)
U.S. Dollar Deutsche Mark
Mar. 3, 1997 139,002 139,002 18,000,000 138,457 (545)
U.S. Dollar Spanish Peseta
Jan. 28, 1997 672,947 672,947 75,000,000 649,295 (23,652)
U.S. Dollar Japanese Yen
Jan. 15,1997 800,000 597,371 645,161 645,161 47,790
Swiss Franc U.S. Dollar
Jan. 17, 1997 600,000 389,790 392,080 392,080 2,290
Deutsche Mark U.S. Dollar
Jan. 21, 1997 2,300,000 1,494,612 1,502,188 1,502,188 7,576
Deutsche Mark U.S. Dollar
Feb. 12, 1997 91,321 156,231 153,502 153,502 (2,729)
British Pounds U.S. Dollar
Feb. 18, 1997 3,800,000 559,414 573,082 573,082 13,668
Swedish Krona U.S. Dollar
Feb. 28, 1997 235,000 401,858 387,310 387,310 (14,548)
British Pounds U.S. Dollar
Jan. 15, 1997 250,000 $182,592 186,243 186,243 $ 3,651
Canadian Dollar U.S. Dollar
---------- ---------- ---------------
$6,758,091 $6,773,866 $ 15,775
---------- ---------- ---------------
</TABLE>
4. FUTURES TRANSACTIONS: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund
is exposed to market risk as a result of changes in the value of the
underlying financial instruments (see the Notes to Schedule of Investments).
Investment in financial futures require the Fund to "mark to market" on a
daily basis, which reflects the change in the market value of the contract at
the close of each day's trading. Accordingly, variation margin payments are
received or made to reflect daily unrealized gain or losses. When the
contracts are closed, the Fund reconizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist
of cash or cash equivalents. The amount of these deposits is determined by
the exchange or Board of Trade on which the contract is traded and is subject
to change. Contracts open as of December 31, 1996 and their related
unrealized market appreciation are set forth in the Notes to Schedule of
Investments.
5. NET ASSETS INCLUDE UNDISTRIBUTED NET INVESTMENT INCOME OF:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1996 1995
<S> <C> <C>
- --------------------------------------------------------------------------------
Money Market Series.......................... $ 2,705,009 $ 2,222,937
U.S. Government Securitites Series........... 10,455,469 11,853,720
Diversified Income Series.................... 7,379,870 8,212,963
Global Bond Series........................... 162,922 0
High Yield Series............................ 78,341 30,053
Asset Allocation Series...................... 156,227 135,184
Global Asset Allocation Series............... 78,306 690
Value Series................................. 5,662 0
Growth & Income Series....................... 4,639 22,271
S & P 500 Index Series....................... 6,792 0
Blue Chip Stock Series....................... 777 0
Global Growth Series......................... 0 27,390
Growth Stock Series.......................... 66,146 28,730
International Stock Series................... 45,335 12,900
Aggressive Growth Series..................... 1,353 0
</TABLE>
77
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
6. SHARES OF CAPITAL STOCK SOLD AND REPURCHASED:
<TABLE>
<CAPTION>
SHARES ISSUED AS A NET INCREASE
RESULT OF REINVESTED (DECREASE)
SHARES SOLD DIVIDENDS SHARES REPURCHASED OF SHARES
---------------------- -------------------- ------------------------ ------------------------
1996 1995 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Money Market Series...... 5,746,206 3,402,945 206,460 151,377 (4,157,440) (3,910,030) 1,795,226 (355,708)
U.S. Government
Securities Series...... 1,061,458 1,003,644 1,175,676 873 (3,307,239) (3,010,238) (1,070,105) (2,005,721)
Diversified Income
Series................. 532,522 634,079 737,175 360 (1,169,544) (1,139,383) 100,153 (504,944)
Global Bond Series....... 889,018 1,347,679 89,211 61,377 (324,860) (241,825) 653,369 1,167,231
High Yield Series........ 1,622,409 1,501,657 371,174 251,886 (548,867) (312,519) 1,444,716 1,441,024
Asset Allocation
Series................. 2,214,581 2,038,210 1,169,911 831,716 (1,459,586) (605,840) 1,924,906 2,264,086
Global Asset Allocation
Series................. 1,436,030 1,752,325 123,737 48,124 (295,210) (42,702) 1,264,557 1,757,747
Value Series............. 1,229,584 -- 6,662 -- (10,203) -- 1,226,043 --
Growth & Income Series... 4,220,664 3,028,308 244,448 79,311 (205,106) (85,117) 4,260,006 3,022,502
S & P 500 Index Series... 2,011,060 -- 10,638 -- 104,913 -- 1,916,785 --
Blue Chip Stock Series... 1,790,768 -- 5,170 -- (287,305) -- 1,508,633 --
Global Growth Series..... 4,179,864 1,889,132 23,217 70,385 (384,054) (695,692) 3,819,027 1,263,825
Growth Stock Series...... 2,229,103 2,352,546 69,162 86,651 (911,048) (614,975) 1,387,217 1,824,222
International Stock
Series................. 2,586,940 1,894,172 131,438 26,914 (404,381) (29,018) 2,313,997 1,892,068
Aggressive Growth
Series................. 3,864,188 2,658,950 12,491 13,701 (463,405) (349,765) 3,413,274 2,322,886
</TABLE>
78
<PAGE>
- --------------------------------------------------------------------------------
6. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Series is presented based upon average fund shares outstanding:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------
MONEY MARKET SERIES 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.83 $ 10.63 $ 10.23 $ 10.21 $ 10.15
-------- -------- -------- -------- --------
Operations:
Investment income - net............... .57 .60 .41 .28 .36
Net realized and unrealized gains
(losses) on investments............. -- -- (.01) .02 .06
-------- -------- -------- -------- --------
Total from operations................... .57 .60 .40 .30 .42
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.46) (.40) -- (.28) (.36)
-------- -------- -------- -------- --------
Total distributions to shareholders..... (.46) (.40) -- (.28) (.36)
-------- -------- -------- -------- --------
Net asset value, end of period.......... $ 10.94 $ 10.83 $ 10.63 $ 10.23 $ 10.21
-------- -------- -------- -------- --------
Total Return @.......................... 5.17% 5.71% 3.92% 2.77% 3.36%
Net assets end of period (000s
omitted).............................. $ 61,906 $ 41,807 $ 44,833 $ 28,682 $ 27,528
Ratio of expenses to average daily net
assets................................ .38% .40% .40% .44% .46%
Ratio of net investment income to
average daily net assets.............. 5.14% 5.44% 3.96% 2.74% 3.51%
</TABLE>
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
U.S. GOVERNMENT SECURITIES SERIES 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 11.16 $ 9.40 $ 10.94 $ 10.73 $ 10.77
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .67 .70 .71 .74 .78
Net realized and unrealized gains
(losses) on investments............. (.51) 1.06 (1.54) .46 .15
--------- --------- --------- --------- ---------
Total from operations................... .16 1.76 (.83) 1.20 .93
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.75) -- (.71) (.74) (.78)
From net realized gains............... -- -- -- (.24) (.19)
Excess distributions of net realized
gains............................... -- -- -- (.01) --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (.75) -- (.71) (.99) (.97)
--------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 10.57 $ 11.16 $ 9.40 $ 10.94 $ 10.73
--------- --------- --------- --------- ---------
Total Return @.......................... 2.21% 18.78% (6.44%) 9.45% 6.14%
Net assets end of period (000s
omitted).............................. $ 161,678 $ 182,687 $ 172,656 $ 235,588 $ 132,683
Ratio of expenses to average daily net
assets................................ .53% .53% .53% .52% .57%
Ratio of net investment income to
average daily net assets.............. 6.17% 6.78% 6.87% 6.49% 7.10%
Portfolio turnover rate................. 176% 115% 187% 141% 135%
</TABLE>
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
79
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
----------------------------------------------------------
DIVERSIFIED INCOME SERIES 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 12.20 $ 10.40 $ 11.93 $ 11.34 $ 11.22
--------- --------- -------- -------- --------
Operations:
Investment income - net............... .82 .88 .87 .87 .82
Net realized and unrealized gains
(losses) on investments............. (.40) .92 (1.53) 1.03 .33
--------- --------- -------- -------- --------
Total from operations................... .42 1.80 (.66) 1.90 1.15
--------- --------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.91) -- (.87) (.87) (.81)
From net realized gains............... -- -- -- (.43) (.01)
Excess distributions of net realized
gains............................... (.01) -- -- (.01) (.21)
--------- --------- -------- -------- --------
Total distributions to shareholders..... (.92) -- (.87) (1.31) (1.03)
--------- --------- -------- -------- --------
Net asset value, end of period.......... $ 11.70 $ 12.20 $ 10.40 $ 11.93 $ 11.34
--------- --------- -------- -------- --------
Total Return @.......................... 4.15% 17.26% (5.22%) 12.76% 7.08%
Net assets end of period (000s
omitted).............................. $ 105,831 $ 109,120 $ 98,314 $ 92,589 $ 28,490
Ratio of expenses to average daily net
assets................................ .55% .55% (.55%) .57% .67%
Ratio of net investment income to
average daily net assets.............. 6.86% 7.78% 7.59% 7.15% 7.08%
Portfolio turnover rate................. 171% 139% 142% 125% 83%
</TABLE>
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December
31,
--------------------
GLOBAL BOND SERIES 1996 1995**
<S> <C> <C>
- ---------------------------------------------------------------
Net asset value, beginning of period.... $ 11.30 $ 10.00
-------- --------
Operations:
Investment income - net............... .57 .54
Net realized and unrealized gains
(losses) on investments............. (.13) 1.52
-------- --------
Total from operations................... .44 2.06
-------- --------
Distributions to shareholders:
From investment income - net.......... (.43) (.54)
From net realized gains............... (.20) (.22)
-------- --------
Total distributions to shareholders..... (.63) (.76)
-------- --------
Net asset value, end of period.......... $ 11.11 $ 11.30
-------- --------
Total Return @.......................... 3.15% 19.02%
Net assets end of period (000s
omitted).............................. $ 20,228 $ 13,187
Ratio of expenses to average daily net
assets................................ 1.02% 1.28%*
Ratio of net investment income to
average daily net assets.............. 5.07% 5.01%*
Portfolio turnover rate................. 129% 184%
</TABLE>
* Annualized.
** For the Period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
80
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
--------------------------------
HIGH YIELD SERIES 1996 1995 1994**
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value, beginning of period.... $ 9.74 $ 9.47 $ 10.00
-------- -------- --------
Operations:
Investment income - net............... 1.04 1.15 .71
Net realized and unrealized gains
(losses) on investments............. .13 .30 (.53)
-------- -------- --------
Total from operations................... 1.17 1.45 (.18)
-------- -------- --------
Distributions to shareholders:
From investment income - net.......... (1.03) (1.14) (.71)
Excess distributions of net realized
gains............................... (.05) (.04) --
-------- -------- --------
Total distributions to shareholders..... (1.08) (1.18) (.71)
-------- -------- --------
Net asset value, end of period.......... $ 9.83 $ 9.74 $ 9.47
-------- -------- --------
Total Return @.......................... 10.52% 12.73% (.75%)
Net assets end of period (000s
omitted).............................. $ 42,578 $ 28,129 $ 13,706
Ratio of expenses to average daily net
assets................................ .63% .63% .75%*
Ratio of net investment income to
average daily net assets.............. 10.22% 11.30% 10.44%*
Portfolio turnover rate................. 235% 130% 20%
</TABLE>
* Annualized.
** For the Period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
ASSET ALLOCATION SERIES 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 15.90 $ 13.56 $ 14.14 $ 13.28 $ 12.81
--------- --------- --------- --------- --------
Operations:
Investment income - net............... .61 .65 .56 .52 .62
Net realized and unrealized gains
(losses) on investments............. 1.38 2.35 (.58) .92 .47
--------- --------- --------- --------- --------
Total from operations................... 1.99 3.00 (.02) 1.44 1.09
--------- --------- --------- --------- --------
Distributions to shareholders:
From investment income - net.......... (.61) (.64) (.56) (.52) (.62)
From net realized gains............... (.28) (.02) -- (.06) --
Excess distributions of net realized
gains............................... (.01) -- -- -- --
--------- --------- --------- --------- --------
Total distributions to shareholders..... (.90) (.66) (.56) (.58) (.62)
--------- --------- --------- --------- --------
Net asset value, end of period.......... $ 16.99 $ 15.90 $ 13.56 $ 14.14 $ 13.28
--------- --------- --------- --------- --------
Total Return @.......................... 12.50% 21.97% (.31%) 9.79% 6.95%
Net assets end of period (000s
omitted).............................. $ 397,712 $ 341,511 $ 260,593 $ 204,603 $ 89,076
Ratio of expenses to average daily net
assets................................ .54% .55% .56% .56% .60%
Ratio of net investment income to
average daily net assets.............. 3.66% 4.25% 4.05% 3.72% 4.78%
Portfolio turnover rate................. 115% 98% 73% 74% 54%
Average commission rate paid*........... $ .0748 $ -- $ -- $ -- $ --
</TABLE>
* In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
81
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December
31,
--------------------
GLOBAL ASSET ALLOCATION SERIES 1996 1995**
<S> <C> <C>
- ---------------------------------------------------------------
Net asset value, beginning of period.... $ 11.42 $ 10.00
-------- --------
Operations:
Investment income - net............... .36 .35
Net realized and unrealized gains
(losses) on investments............. 1.19 1.55
-------- --------
Total from operations................... 1.55 1.90
-------- --------
Distributions to shareholders:
From investment income - net.......... (.38) (.34)
From net realized gains............... (.25) (.14)
-------- --------
Total distributions to shareholders..... (.63) (.48)
-------- --------
Net asset value, end of period.......... $ 12.34 $ 11.42
-------- --------
Total Return @.......................... 12.72% 17.47%
Net assets end of period (000s
omitted).............................. $ 37,307 $ 20,080
Ratio of expenses to average daily net
assets................................ 1.20% 1.28%*
Ratio of net investment income to
average daily net assets.............. 3.01% 3.26%*
Portfolio turnover rate................. 46% 44%
Average commission rate paid***......... $ .0412 $ --
</TABLE>
* Annualized.
** For the Period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period divided by the total number of related shares purchased and
sold. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
VALUE SERIES 1996***
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 10.27
--------
Operations:
Investment income - net............... .14
Net realized and unrealized gain
(loss) on investments............... 1.10
--------
Total from operations................... 1.24
--------
Distributions to shareholders:
From investment income - net.......... (.13)
--------
Net asset value, end of period.......... $ 11.38
--------
Total Return @.......................... 11.49%
Net assets end of period (000s
omitted).............................. $13,951
Ratio of expenses to average daily net
assets................................ 0.87%*
Ratio of net investment income to
average daily net assets.............. 1.72%*
Portfolio turnover rate................. 36%
Average commission rate paid**.......... $ .0556
</TABLE>
@ These are the portfolios total returns during the periods, including
reinvestment of all dividend and capital gains distributions.
* Annualized.
** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
*** For the period May 1, 1996 (commencement of operations) to December
31, 1996. The portfolio's inception was March 28, 1996 when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1996. Information is not presented for the period from March 28, 1996
through May 1, 1996, as the portfolio's shares were not registered
during the period.
82
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
---------------------------------
GROWTH & INCOME SERIES 1996 1995 1994**
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
Net asset value, beginning of period.... $ 12.83 $ 10.07 $ 10.00
--------- -------- --------
Operations:
Investment income - net............... .34 .33 .21
Net realized and unrealized gains
(losses) on investments............. 2.54 2.76 .07
--------- -------- --------
Total from operations................... 2.88 3.09 .28
--------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.34) (.33) (.21)
From net realized gains............... (.21) -- --
--------- -------- --------
Total distributions to shareholders..... (.55) (.33) (.21)
--------- -------- --------
Net asset value, end of period.......... $ 15.16 $ 12.83 $ 10.07
--------- -------- --------
Total Return @.......................... 21.51% 29.70% 1.74%
Net assets end of period (000s
omitted).............................. $ 134,932 $ 59,533 $ 16,276
Ratio of expenses to average daily net
assets................................ .76% .80% .86%*
Ratio of net investment income to
average daily net assets.............. 2.38% 2.86% 3.12%*
Portfolio turnover rate................. 20% 17% 2%
Average commission rate paid***......... $ .0688 $ -- $ --
</TABLE>
* Annualized.
** For the Period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
S&P 500 INDEX SERIES 1996*
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 10.09
--------
Operations:
Investment income - net............... .10
Net realized and unrealized gain
(loss) on investments............... 1.37
--------
Total from operations................... 1.47
--------
Distributions to shareholders:
From investment income - net.......... (.09)
--------
Net asset value, end of period.......... $ 11.47
--------
Total Return @.......................... 14.29%
Net assets end of period (000s
omitted).............................. $ 21,979
Ratio of expenses to average daily net
assets................................ 0.79%**
Ratio of net investment income to
average daily net assets.............. 1.47%**
Portfolio turnover rate................. 6%
Average commission rate paid***......... $ .0477
</TABLE>
* For the period May 1, 1996 (commencement of operations) to December
31, 1996. The portfolio's inception was March 28, 1996 when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1996. Information is not presented for the period from March 28, 1996
through May 1, 1996, as the portfolio's shares were not registered
during the period.
** Annualized.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
@ These are the Fund's total return during the period, including
reinvestment of all dividend and capital gain distributions.
83
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
BLUE CHIP STOCK SERIES 1996*
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 10.07
--------
Operations:
Investment income - net............... .07
Net realized and unrealized gain
(loss) on investments............... 1.60
--------
Total from operations................... 1.67
--------
Distributions to shareholders:
From investment income - net.......... (.07)
--------
Net asset value, end of period.......... $ 11.67
--------
Total Return @.......................... 16.24%
Net assets end of period (000s
omitted).............................. $ 17,606
Ratio of expenses to average daily net
assets................................ 1.13%**
Ratio of net investment income to
average daily net assets.............. 0.82%**
Portfolio turnover rate 17%
Average commission rate paid***......... $ .0329
</TABLE>
* For the period May 1,1996 (commencement of operations) to December,
1996. The portfolio's inception was March 28, 1996,when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1996. Information is not presented for the period from March 28, 1996,
through May 1, 1996, as the portfolio's shares were not regestered
during the period.
** Annualized.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
@ These are the Fund's total return during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------
GLOBAL GROWTH SERIES 1996 1995 1994 1993 1992**
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 15.97 $ 12.31 $ 12.77 $ 10.86 $ 9.82
--------- --------- --------- -------- --------
Operations:
Investment income - net............... .03 .09 .10 .06 .05
Net realized and unrealized gains
(losses) on investments............. 3.03 3.66 (.46) 1.91 1.04
--------- --------- --------- -------- --------
Total from operations................... 3.06 3.75 (.36) 1.97 1.09
--------- --------- --------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.03) (.09) (.10) (.06) (.05)
--------- --------- --------- -------- --------
Net asset value, end of period.......... $ 19.00 $ 15.97 $ 12.31 $ 12.77 $ 10.86
--------- --------- --------- -------- --------
Total Return@>.......................... 19.10% 30.49% 2.98% 17.92% 10.88%
Net assets end of period (000s
omitted).............................. $ 319,831 $ 207,913 $ 144,647 $ 75,882 $ 11,091
Ratio of expenses to average daily net
assets................................ .79% .80% .81% 1.02% 1.22%*
Ratio of net investment income to
average daily net assets.............. .15% .64% .82% .53% .73%*
Portfolio turnover rate................. 14% 29% 20% 19% 21%
Average commission rate paid***......... $ .0295 $ -- $ -- $ -- $ --
</TABLE>
* Annualized.
** For the Period May 1, 1992 (commencement of operations) to December
31, 1992. The portfolio's inception was April 13, 1992, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1992. Information is not presented for the period from April 13, 1992,
through May 1, 1992, as the portfolio's shares were not registered
during that period.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period divided by the total number of related shares purchased and
sold. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
84
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------
GROWTH STOCK SERIES 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 28.09 $ 22.11 $ 22.92 $ 21.15 $ 20.68
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .12 .13 .18 .09 .18
Net realized and unrealized gains
(losses) on investments............. 4.50 5.98 (.81) 1.77 .47
--------- --------- --------- --------- ---------
Total from operations................... 4.62 6.11 (.63) 1.86 .65
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.12) (.13) (.18) (.09) (.18)
--------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 32.59 $ 28.09 $ 22.11 $ 22.92 $ 21.15
--------- --------- --------- --------- ---------
Total Return @.......................... 16.41% 27.66% (2.82%) 8.78% 2.94%
Net assets end of period (000s
omitted).............................. $ 661,217 $ 530,945 $ 377,483 $ 304,293 $ 188,172
Ratio of expenses to average daily net
assets................................ .67% .67% .68% .69% .76%
Ratio of net investment income to
average daily net assets.............. .39% .51% .81% .46% .92%
Portfolio turnover rate................. 30% 20% 19% 26% 24%
Average commission rate paid*........... $ .0728 $ -- $ -- $ -- $ --
</TABLE>
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
* In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
<TABLE>
<CAPTION>
Year Ended December
31,
--------------------
INTERNATIONAL STOCK SERIES 1996 1995**
<S> <C> <C>
- ---------------------------------------------------------------
Net asset value, beginning of period.... $ 11.27 $ 10.00
-------- --------
Operations:
Investment income - net............... .20 .14
Net realized and unrealized gains
(losses) on investments............. 1.48 1.38
-------- --------
Total from operations................... 1.68 1.52
-------- --------
Distributions to shareholders:
From investment income - net.......... (.21) (.09)
From net realized gains............... (.30) (.16)
-------- --------
Total distributions to shareholders..... (.51) (.25)
-------- --------
Net asset value, end of period.......... $ 12.44 $ 11.27
-------- --------
Total Return @.......................... 14.02% 14.35%
Net assets end of period (000s
omitted).............................. $ 52,331 $ 21,327
Ratio of expenses to average daily net
assets................................ 1.15% 1.14%*
Ratio of net investment income to
average daily net assets.............. 1.71% 1.41%*
Portfolio turnover rate................. 27% 39%
Average commission paid***.............. $ .0363 $ --
</TABLE>
* Annualized.
** For the Period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period divided by the total number of related shares purchased and
sold. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
85
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
--------------------------------
AGGRESSIVE GROWTH SERIES 1996 1995 1994**
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value, beginning of period.... $ 12.68 $ 9.80 $ 10.03
-------- -------- --------
Operations:
Investment income - net............... .03 .07 .08
Net realized and unrealized gains
(losses) on investments............. .94 2.88 (.23)
-------- -------- --------
Total from operations................... .97 2.95 (.15)
-------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.03) (.07) (.08)
-------- -------- --------
Net asset value, end of period.......... $ 13.62 $ 12.68 $ 9.80
-------- -------- --------
Total Return @.......................... 7.64% 29.89% (1.89)%
Net assets end of period (000s
omitted).............................. $ 96,931 $ 46,943 $ 13,526
Ratio of expenses to average daily net
assets................................ .78% .81% .88%*
Ratio of net investment income to
average daily net assets.............. .22% .58% 1.24%*
Portfolio turnover rate................. 22% 21% 5%
Average commission rate paid***......... $ .0692 $ -- $ --
</TABLE>
* Annualized.
** For the Period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
*** In accordance with rules adopted by the Securities and Exchange
Commission, disclosure of average commmission rate paid is required
beginning with fiscal year 1996. The amount represents total brokerage
commission paid on applicable purchases and sales of securities for
the period, divided by the total number of related shares purchased
and sold.
@ These are the portfolios total returns during the period, including
reinvestment of all dividend and capital gains distributions.
86
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Fortis Series Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of Money Market Series, U.S.
Government Securities Series, Diversified Income Series, Global Bond Series,
High Yield Series, Asset Allocation Series, Global Asset Allocation Series,
Value Series, Growth & Income Series, S & P 500 Index Series, Blue Chip Stock
Series, Global Growth Series, Growth Stock Series, International Stock Series
and Aggressive Growth Series (series within Fortis Series Fund, Inc.) as of
December 31, 1996 and the related statements of operations, statements of
changes in net assets and the financial highlights for the periods presented.
These financial statements and the financial highlights are the responsibility
of fund management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered, we
request confirmations from brokers, and where replies are not received, we carry
out other appropriate auditing procedures. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Money
Market Series, U.S. Government Securities Series, Diversified Income Series,
Global Bond Series, High Yield Series, Asset Allocation Series, Global Asset
Allocation Series, Value Series, Growth & Income Series, S & P 500 Index Series,
Blue Chip Stock Series, Global Growth Series, Growth Stock Series, International
Stock Series and Aggressive Growth Series as of December 31, 1996 and the
results of their operations, changes in their net assets and the financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 14, 1997
87
<PAGE>
DIRECTORS AND OFFICERS
DIRECTORS Richard W. Cutting CPA AND FINANCIAL CONSULTANT
Allen R. Freedman CHAIRMAN AND CHIEF EXECUTIVE OFFICER,
FORTIS, INC. MANAGING DIRECTOR OF
FORTIS INTERNATIONAL, N.V.
Dr. Robert M. Gavin INTERIM PRESIDENT, HAVERFORD COLLEGE.
PRIOR TO JULY 1996, PRESIDENT
MACALESTER COLLEGE
Jean L. King PRESIDENT, COMMUNI-KING
Dean C. Kopperud CHIEF EXECUTIVE OFFICER AND DIRECTOR,
FORTIS ADVISERS, INC. PRESIDENT AND
DIRECTOR, FORTIS INVESTORS, INC.
SENIOR VICE PRESIDENT AND DIRECTOR,
FORTIS BENEFITS INSURANCE COMPANY AND
TIME INSURANCE COMPANY
Edward M. Mahoney PRIOR TO JANUARY, 1995, CHAIRMAN AND
CHIEF EXECUTIVE OFFICER, FORTIS
ADVISERS, INC., FORTIS INVESTORS,
INC.
Robb L. Prince FINANCIAL AND EMPLOYEE BENEFIT
CONSULTANT PRIOR TO JULY, 1995, VICE
PRESIDENT AND TREASURER, JOSTENS,
INC.
Leonard J. Santow PRINCIPAL, GRIGGS & SANTOW, INC.
Joseph M. Wikler INVESTMENT CONSULTANT AND PRIVATE
INVESTOR PRIOR TO JANUARY, 1994,
DIRECTOR OF RESEARCH, CHIEF
INVESTMENT OFFICER, PRINCIPAL, AND
DIRECTOR, THE ROTHSCHILD CO.
OFFICERS
Dean C. Kopperud
PRESIDENT AND DIRECTOR
Robert W. Beltz, Jr.
VICE PRESIDENT
James S. Byrd
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Gary N. Yalen
VICE PRESIDENT
Michael J. Radmer
SECRETARY
INVESTMENT MANAGER, REGISTRAR Fortis Advisers, Inc.
AND TRANSFER AGENT BOX 64284, ST. PAUL, MINNESOTA 55164
PRINCIPAL UNDERWRITER Fortis Investors, Inc.
BOX 64284, ST. PAUL, MINNESOTA 55164
CUSTODIAN First Bank National Association
MINNEAPOLIS, MINNESOTA
GENERAL COUNSEL Dorsey & Whitney LLP
MINNEAPOLIS, MINNESOTA
INDEPENDENT AUDITORS KPMG Peat Marwick LLP
MINNEAPOLIS, MINNESOTA
The use of this material is authorized only when preceded or accompanied by a
prospectus.
88
<PAGE>
FORTIS FINANCIAL GROUP'S OTHER PRODUCTS AND SERVICES
MUTUAL Fortis Bond Funds MONEY FUND
FUNDS/PORTFOLIOS U.S. GOVERNMENT
CONVENIENT ACCESS TO SECURITIES FUND
A BROAD RANGE OF TAX-FREE MINNESOTA
SECURITIES PORTFOLIO
TAX-FREE NATIONAL
PORTFOLIO
TAX-FREE NEW YORK
PORTFOLIO
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION
PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
FIDUCIARY FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
CAPITAL APPRECIATION
PORTFOLIO
FIXED AND VARIABLE Fortis Opportunity Fixed FIXED ACCOUNT
ANNUITIES & Variable Annuity MONEY MARKET SUBACCOUNT
TAX-DEFERRED Masters Variable Annuity U.S. GOVERNMENT
INVESTING SECURITIES SUBACCOUNT
DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
AGGRESSIVE GROWTH
SUBACCOUNT
Fortune Fixed Annuities SINGLE PREMIUM ANNUITY
FLEXIBLE PREMIUM ANNUITY
Income Annuities GUARANTEED FOR LIFE
GUARANTEED FOR A
SPECIFIED PERIOD
LIFE Wall Street Series FIXED ACCOUNT
INSURANCE PROTECTION Variable Universal Life MONEY MARKET SUBACCOUNT
AND TAX-DEFERRED Insurance U.S. GOVERNMENT
INVESTMENT SECURITIES SUBACCOUNT
OPPORTUNITY DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
GROWTH STOCK SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
AGGRESSIVE GROWTH
SUBACCOUNT
Adaptable Life
Universal Life
FORTIS FINANCIAL GROUP manages and distributes mutual funds, annuities and life
insurance products. The mutual funds, variable life and variable annuity
products are distributed through FORTIS INVESTORS, INC. and managed by FORTIS
ADVISERS, INC. The insurance products are issued by FORTIS BENEFITS INSURANCE
COMPANY, FIRST FORTIS LIFE INSURANCE COMPANY and TIME INSURANCE COMPANY.
FOR MORE COMPLETE INFORMATION, INCLUDING CHARGES AND EXPENSES, SEND FOR A
PROSPECTUS. WRITE TO: FORTIS INVESTORS, INC., P.O. BOX 64284, ST. PAUL, MN
55164. READ IT CAREFULLY BEFORE INVESTING OR SENDING MONEY.
89
<PAGE>
FORTIS FINANCIAL GROUP
Fortis Financial Group (FFG) provides solutions for customers' financial
needs using mutual funds, annuities and life insurance. Besides our own array of
quality products, we create and deliver customized products for other financial
service providers. Like the Fortis name, which comes from the Latin for strong
and steadfast, we concentrate on the customer relationships we build, the
services we provide, the solutions we offer and the performance we seek.
FFG includes Fortis Advisers, Inc. an established money manager, as well as
Fortis Investors, Inc., a broker dealer with nationwide sales and marketing
influence. The guarantees in our insurance products are underwritten by
Fortis, Inc., a part of Fortis, a worldwide group of companies.
[PICTURE]
Fortis Benefits Insurance Company and Time Insurance Company.
Fortis Financial Group is part of Fortis, Inc. a financial services company
that provides specialty insurance and investment products to individuals,
businesses, associations and other financial services organizations in the
United States. Fortis, Inc., is part of Fortis, a worldwide group of companies
active in the fields of insurance, banking and investment. Fortis is jointly
owned by Fortis, AMEV of The Netherlands and Fortis AG of Belgium.
[PICTURE]
For more information, call your investment representative or Fortis at (800)
800-2638.
---------------
Bulk Rate
U.S. Postage
PAID
Permit No. 3794
Minneapolis, MN
---------------
[LOGO]
FORTIS FINANCIAL GROUP
P.O. BOX 64284
ST. PAUL, MN 55164
FORTIS SERIES FUND, INC.
[LOGO]
Printed on recycled paper with
40% preconsumer waste and 10%
post consumer waste. Please recycle.
[LOGO] and Fortis-Registered Trademark- are registered servicemarks of Fortis
AMEV and Fortis AG.
59749 (2/97)
