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SOLID PARTNERS, FLEXIBLE SOLUTIONS-SM-
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FORTIS SERIES FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1998
FORTIS FINANCIAL GROUP
<PAGE>
FORTIS SERIES FUND, INC.
SEMI-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 SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $11.03 $10.68 $11.98 $10.65 $10.77 $13.29 $17.62
End of year........................... $11.32 $11.11 $12.48 $10.98 $11.00 $14.44 $19.79
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters
Variable Annuity.................... +1.94% +3.33% +3.41% +2.46% +1.44% +7.95% +11.57%
Harmony Investment Life............... +2.25% +3.64% +3.72% +2.76% +1.74% +8.27% +11.90%
Wall Street Series 220/500............ +2.03% +3.43% +3.50% +2.55% +1.53% +8.04% +11.67%
Wall Street Series Survivor........... +1.94% +3.33% +3.41% +2.46% +1.44% +7.95% +11.57%
Empower Variable Annuity*............. +.66% +1.69% +1.64% +.36% -.86% -2.68% +2.83%
<CAPTION>
GROWTH &
VALUE INCOME
SERIES SERIES
------ --------
<S> <C> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $13.42 $18.76
End of year........................... $14.81 $20.69
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters
Variable Annuity.................... +9.61% +9.58%
Harmony Investment Life............... +9.94% +9.90%
Wall Street Series 220/500............ +9.71% +9.67%
Wall Street Series Survivor........... +9.61% +9.58%
Empower Variable Annuity*............. -1.78% -.34%
</TABLE>
<TABLE>
<CAPTION>
S&P BLUE CHIP INTERNATIONAL MID CAP SMALL CAP GLOBAL LARGE CAP
500 INDEX STOCK STOCK STOCK VALUE GROWTH GROWTH
SERIES SERIES SERIES SERIES* SERIES* SERIES SERIES*
--------- --------- ------------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $14.93 $14.76 $13.36 $9.94 $9.96 $20.29 $10.16
End of year........................... $17.53 $17.25 $15.84 $9.43 $9.60 $23.40 $10.60
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/ Masters
Variable Annuity.................... +16.66% +6.19% +17.76% -5.29% -3.81% +14.57% +4.16%
Harmony Investment Life............... +17.01% +16.54% +18.11% -5.20% -3.71% +14.91% +4.26%
Wall Street Series 220/500............ +16.76% +16.30% +17.87% -5.27% -3.78% +14.67% +4.19%
Wall Street Series Survivor........... +16.66% +16.19% +17.76% -5.29% -3.81% +14.57% +4.16%
Empower Variable Annuity*............. +1.15% +1.05% +.56% -5.28% -3.79% -.79% +4.17%
<CAPTION>
GROWTH AGGRESSIVE
STOCK GROWTH
SERIES SERIES
--------- ----------
<S> <C> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $36.64 $13.81
End of year........................... $42.44 $15.70
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/ Masters
Variable Annuity.................... +15.05% +12.91%
Harmony Investment Life............... +15.39% +13.25%
Wall Street Series 220/500............ +15.15% +13.01%
Wall Street Series Survivor........... +15.05% +12.91%
Empower Variable Annuity*............. +1.60% -1.77%
</TABLE>
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OPERATING EXPENSES:*
<TABLE>
<CAPTION>
U.S. GLOBAL
MONEY GOVERNMENT DIVERSIFIED GLOBAL HIGH ASSET ASSET
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION VALUE
SERIES SERIES SERIES SERIES SERIES SERIES SERIES SERIES
------ ---------- ----------- ------ ------ ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
Investment Advisory and
Management Fee....................... .30% .47% .47% .75% .50% .90% .47% .70%
Other Expenses.......................... .09% .08% .08% .18% .07% .16% .05% .06%
------ --- --- ------ ------ ----- --- ------
TOTAL FORTIS SERIES OPERATING EXPENSES.. .39% .55% .55% .93% .57% 1.06% .52% .76%
------ --- --- ------ ------ ----- --- ------
<CAPTION>
GROWTH &
INCOME
SERIES
--------
<S> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
Investment Advisory and
Management Fee....................... .64%
Other Expenses.......................... .03%
---
TOTAL FORTIS SERIES OPERATING EXPENSES.. .67%
---
</TABLE>
<TABLE>
<CAPTION>
S&P BLUE CHIP INTERNATIONAL MID CAP SMALL CAP GLOBAL LARGE CAP GROWTH
500 INDEX STOCK STOCK STOCK VALUE GROWTH GROWTH STOCK
SERIES SERIES SERIES SERIES* SERIES* SERIES SERIES* SERIES
--------- --------- ------------- ------- --------- ------ --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
Investment Advisory and Management
Fee................................... .40% .89% .85% .90% .90% .70% .90% .61%
Other Expenses.......................... .05% .05% .10% .35% .35% .05% .35% .05%
--- --- --- ------- --------- ------ --------- ------
TOTAL FORTIS SERIES OPERATING
EXPENSES.............................. .45% .94% .95% 1.25% 1.25% .75% 1.25% .66%
--- --- --- ------- --------- ------ --------- ------
<CAPTION>
AGGRESSIVE
GROWTH
SERIES
----------
<S> <C>
FOR THE SIX-MONTH PERIOD
ENDED JUNE 30, 1998:
Investment Advisory and Management
Fee................................... .68%
Other Expenses.......................... .04%
---
TOTAL FORTIS SERIES OPERATING
EXPENSES.............................. .72%
---
</TABLE>
* For the period May 1, 1998 to June 30, 1998.
** Represents the expenses of the series itself, without the expenses associated
with the variable annuities or variable universal life insurance policies,
(annualized).
1
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of the fund's
performance during the past
six-months, refer to the Highlights
box. The letter from the portfolio
managers and president 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 invests, 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 22
U.S. Government Securities Series 23
Diversified Income Series 25
Global Bond Series 30
High Yield Series 32
Global Asset Allocation Series 37
Asset Allocation Series 42
Value Series 49
Growth & Income Series 51
S&P 500 Index Series 54
Blue Chip Stock Series 59
International Stock Series 63
Mid Cap Stock Series 66
Small Cap Value Series 68
Global Growth Series 69
Large Cap Growth Series 73
Growth Stock Series 75
Aggressive Growth Series 77
Statements of Assets and Liabilities 79
Statements of Operations 82
Statements of Changes in Net Assets 85
Notes to Financial Statements 88
Directors and Officers 103
Products and Services 104
</TABLE>
2
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[PHOTO]
FORTIS SERIES FUND, INC. SEMI-ANNUAL REPORT,
JUNE 30, 1998
DEAR SHAREHOLDER:
The first half of 1998 has been another remarkable period for the capital
markets. Through June, the S&P 500 advanced 17.70 percent and the long treasury
bond returned 6.40 percent. This performance reflects the continuing growth of
the U.S. economy and the resulting good environment for jobs and growth in
consumer income, enabling corporations to record solid gains in profits. While
it is clear that these dynamics have been positively received by investors, it
is all the more remarkable given the dire and deteriorating situation which has
been unfolding in Asia.
Last fall, the Asian economies began to decline. As the first half of 1998 has
unfolded, the Asian crisis has deepened causing economic deterioration, banking
system woes, significant debt burdens and pressure on Asian stock and bond
markets and currencies. The impact on the U.S. economy has intensified resulting
in a deteriorating balance of trade, a meaningful slackening of demand for U.S.
produced goods and greater competitive pressure for U.S. corporations.
Initially, the Asian problem was confined to certain areas of the U.S. economy
such as capital goods and technology companies. However, it now is negatively
impacting our economy more broadly and is resulting in a slowing of economic
growth and corporate earnings.
Initially, the U.S. capital markets responded favorably to the Asian crisis
expecting that inflation would decline further, a positive backdrop for
financial assets. Further, the bond market benefited from increased interest in
U.S. Treasury obligations which were perceived to be a safe haven, particularly
for foreign investors, in light of the uncertainty developing in Asia. However,
this summer, the stock and bond markets have focused on the negative results of
the Asian problem. Lower demand, lack of pricing power, margin contraction, and
disappointing earnings have resulted in a market correction. For many small and
midsized companies, the correction to date has been severe, approximating 30
percent.
As we look forward, we believe that most of the correction is now behind us.
Although the market is likely to remain around current levels for several more
months and the volatility will continue to be high, we see this correction as
healthy and indeed normal. As investors evaluate the prospects for next year, it
is likely they will again focus on the positive trends of better earnings growth
and low inflation which will enable the markets to resume an upward course.
Sincerely,
<TABLE>
<S> <C> <C>
[SIGNATURE] [SIGNATURE] [SIGNATURE]
Dean C. Kopperud Lucinda S. Mezey Howard G. Hudson
President Vice President, Equities Vice President, Fixed Income
</TABLE>
August 7, 1998
3
<PAGE>
PORTFOLIO ALLOCATION AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Consumer Financing 21.7%
Diversified Finance 15.5%
Captive Auto Finance 12.8%
Banks 12.2%
Utilities-Electric 8.9%
Captive Equipment Finance 8.2%
Captive Oil Finance 4.6%
Industrial 4.4%
Food-Grocery, Misc. 4.3%
Brokerage and Investment 4.1%
Oil-Refining 3.3%
</TABLE>
FORTIS SERIES FUND: MONEY MARKET SERIES
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.
During the six months ending June 30, 1998, short-term interest rates were
exceptionally stable as 90-day commercial paper rates ranged from a low of 5.35
percent to a high of 5.55 percent. Throughout this period, the U.S. economy
exhibited strong growth and low inflation. In this environment, the Federal
Reserve Bank, or the "Fed," has not seen a need to change the federal funds
rate. The federal funds rate is the interbank borrowing rate set by the Fed and
the primary determinant of short-term interest rates. Therefore, the fund's
performance generally is linked to the federal funds rate. The fund's rate has
been relatively steady and the return over the last six months was 2.63 percent.
The fund continues to place great emphasis on high quality and liquidity, while
looking to target the fund's average maturity at an optimal length. Maturity is
the length of time between now and the date a security is repayable. We consider
40 to 50 days to be a neutral target for the portfolio. At the beginning of the
year, the average maturity of the securities in the portfolio was 40 days, due,
in part, to the possibility that the Fed might raise short-term interest rates
in reaction to an Asian-induced slowdown in the U.S. economy. By mid-February,
it became apparent to us that these concerns were unwarranted and we increased
the average maturity to 60 days. The increase reflected our belief that the Fed
would not change interest rates for some time and allowed us to buy securities
that offered a modestly higher yield.
In the months ahead, we'll continue to monitor what the Federal Reserve is doing
with short-term interest rates as any change in short-term rates will have an
impact on this fund's performance. We believe that two things could happen for
the Federal Reserve to change interest rates. On the domestic side, we could see
an increase in interest rates (referred to as "tightening of monetary policy")
if the present level of economic growth continues. Additionally, the level of
economic growth in the global economy as a whole has an impact upon interest
rates in the U.S. Lately, Asia has had the greatest impact; i.e. slower economic
growth.
While most of these events are not likely to be resolved in the near future,
they may affect the Federal Reserve's decisions on whether to raise or lower
interest rates, and consequently affect the portfolio's return to shareholders.
4
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C>
U.S. Treasury Securities 31.4%
Other Direct Federal Obligations 25.8%
FNMAs 21.2%
GNMAs 10.0%
Cash Equivalents/Receivables 4.8%
FHLMCs 4.2%
Other 2.6%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. TVA Global (6.375%) 2005 11.2%
2. GNMA (7.50%) 2027 6.5%
3. Federal Home Loan Bank (7.31%) 2004 6.1%
4. U.S. Treasury Note (6.375%) 2000 5.9%
5. U.S. Treasury Note (6.625%) 2002 5.6%
6. U.S. Treasury Strip (5.92%) 2009 5.5%
7. U.S. Treasury Note (6.125%) 2001 4.2%
8. Federal Farm Credit Bank (5.70%) 2001 3.6%
9. FNMA (7%) 30 Year Dollar Roll 3.3%
10. FNMA (6.58%) 2007 3.0%
</TABLE>
FORTIS SERIES FUND: U.S. GOVERNMENT SECURITIES SERIES
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 GOVERNMENT AGENCY
MORTGAGE-BACKED SECURITIES.
During the first half of 1998, the U.S. economy continued its brisk pace of
growth. Fueled by a rapidly expanding work force -- nearly 1.5 million more jobs
were created -- and strong consumer demand, real GDP grew at a 3.5 percent
annualized rate. After an initial scare from the emerging markets in January, it
appeared that the economic problems overseas, Asia in particular, would remain
localized, and that the strong U.S. domestic economy would force the Federal
Reserve to raise rates. As the year progressed, however, it became clear that
the problems in Asia were more severe and far reaching than originally
anticipated. The ripple effects of Asia began to affect the U.S. economy,
negatively impacting gross domestic product, or GDP. As a result, growth slowed
dramatically from the first quarter -- 5.5 percent real GDP to 1.4 percent real
GDP in the second quarter.
The net result of these events was that the interest rates increased during both
February and April, and then declined significantly later in the second quarter.
The 30-year treasury began the year at 5.92 percent, increased to as high as 6.0
percent, and fell to 5.63 percent on June 30, 1998. Long-term rates decreased
more than short-term rates.
We did not believe that the problems in Asia would remedy quickly, and used the
back-up in interest rates that accompanied the market's premature relief to
extend the portfolio's duration. Duration is a measure of a bond portfolio's
sensitivity to changes in interest rates; therefore a "long duration" assumes
interest rates will decline. Currently, the portfolio's duration is 4.75 years.
Since callable bonds perform poorly in periods of declining interest rates, we
also improved the overall call protection in the portfolio. This involved:
selling conventional mortgage-backed securities, or MBS, which are subject to
immediate prepayment; and buying MBS with better call protection and
non-callable agency debentures. If rates either remain at current levels or
decline further, these securities should provide better total rates of return
than the issues we sold.
Our strategies during the first half of 1998 produced a total rate of return of
4.03 percent. This compared favorably to the 3.38 percent return for the Lehman
Brothers Intermediate Government Bond Index, which has almost 10 percent more
interest rate risk than does the fund.
Our strategy going forward will depend once again on the severity and duration
of the Asian crisis. Should Asia's problems continue, we anticipate that the
U.S. dollar will remain strong, exports will continue to be restrained, and the
drag on the U.S. economy will prevent the Federal Reserve from having to raise
short-term interest rates. In addition, foreign investors will look to our
markets for "safe-haven investing." These outcomes all suggest that interest
rates will likely remain at these levels or move lower.
VALUE OF $10,000 INVESTED JULY 1, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS U.S. GOVERNMENT
INTERMEDIATE GOV'T SECURITIES
<S> <C> <C> <C>
Bond Index** Series
7/1/88 $ 10,000 $ 10,000
89 $ 11,009 $ 10,990
90 $ 11,858 $ 11,806
91 $ 13,109 $ 12,874
92 $ 14,795 $ 14,493
93 $ 16,280 $ 16,159
94 $ 16,248 $ 15,334
95 $ 17,865 $ 17,164
96 $ 18,611 $ 17,912
97 $ 19,903 $ 19,274
98 $ 21,570 $ 21,253
U.S. Government Securities Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+10.27% +5.63% +7.83%
</TABLE>
Annual period ended June 30
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.
** An unmanaged index of government bonds with an average maturity of three to
four years.
5
<PAGE>
PORTFOLIO ALLOCATION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C>
Corporate Bonds - Investment Grade 39.5%
Asset Backed Securities 19.7%
Corporate Bonds - Non-Investment Grade 15.1%
U.S. Treasury Securities 9.4%
U.S. Government Agencies 8.1%
Cash Equivalent / Receivables 8.0%
Equity Securities 0.2%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (6.625%) 2007 3.5%
2. FNMA (7%) 30 Year Dollar Roll 2.5%
3. GNMA (9%) 2020 2.2%
4. DLJ Mortgage Acceptance Corp. (8.50%) 2001 2.0%
5. GTE Corp. (7.51%) 2009 2.0%
6. Nationslink Funding Corp. (7.52%) 2005 1.9%
7. General Motors Acceptance Corp. (5.875%) 2003 1.8%
8. U.S. Treasury Bond (8.125%) 2021 1.8%
9. Green Tree Financial Group (7.20%) 2019 1.6%
10. Mortgage Capital Funding, Inc. (7.90%) 2006 1.6%
</TABLE>
FORTIS SERIES FUND: DIVERSIFIED INCOME SERIES
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.
In our last shareholder letter, we forecasted that inflation would be benign and
economic growth would moderate, partly as a result of the economic crisis in
Asia. We also mentioned that this environment would result in favorable
conditions for U.S. Treasury securities and that prospects for corporate and
mortgage-backed bonds were not quite as optimistic. In retrospect, the economy
took slightly longer to slow down than we had initially forecast. The first
quarter's gross domestic product growth of 5.4 percent was followed by a much
more tame 1.4 percent second quarter. Inflation continues to be well behaved, as
the consumer price index year-to-date is running at 1.4 percent annual rate. In
addition, the Asian financial crisis did negatively impact the various
non-government sectors, as they underperformed U.S. treasuries.
For the six months ended June 30, 1998, The Diversified Income Fund earned a
4.10 percent total rate of return, compared with 3.92 percent for the Lehman
Brothers Aggregate Index. The fund's return benefited from our strategies
regarding duration, sector allocation and security selection. On the duration
front, we believed and continue to believe that interest rates were in a trading
range with a view that they would move lower. Given this bias, we extended the
portfolio's duration to longer than the benchmark as interest rates rose and
reduced our duration to that of the benchmark at the lower end of the range.
Duration is a measure of a bond portfolio's sensitivity to changes in interest
rates; therefore a "long duration" assumes interest rates will decline. Our
current duration stands at 5.57 years, which is slightly longer than where we
began the year: 5.52 years. During the first six months of 1998 interest rates
moved lower -- from 5.92 percent at year end to 5.63 percent on June 30, 1998 --
performance was enhanced by our duration strategy.
Other areas of note include a decrease in the percentage of mortgage-backed
securities held in this portfolio, reflecting our concern that the mortgage-
backed sector would see rapid prepayments. Our percentage holdings in the
high-yield sector were reduced from 20.6 percent to 16.7 percent, as we
continued to be wary of the spillover effects of the deteriorating economic
situation in the Far East.
Our strategy going forward will depend on the severity and length of the Asian
crisis. Specifically, should the difficulties in the Far East continue as
anticipated, it is likely to have a dampening effect on U.S. economic growth.
Additionally, a continuation of the crisis should bolster the U.S. dollar,
making foreign goods cheaper and keeping inflation in check. In this scenario,
interest rates would likely stay at current rate levels, if not move lower.
These concerns continue to lead us to a cautious stance in the outlook for the
various spread sectors, as a slowdown of economic growth and/or a flight of
capital to the U.S. would negatively impact the non-governments. Therefore, we
are underweight in non-governments relative to our benchmark as we await better
entry points, such as wider yield spreads when compared to U.S. treasuries.
VALUE OF $10,000 INVESTED JULY 1, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS DIVERSIFIED
AGGREGATE INCOME
<S> <C> <C>
Bond Index** Series
7/1/88 $10,000 $10,000
89 11,222 10,974
90 12,103 11,881
91 13,398 13,070
92 15,279 14,723
93 17,080 16,718
94 16,856 16,281
95 18,989 18,130
96 19,822 19,044
97 21,439 20,673
98 23,700 23,062
Diversified Income Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+11.56% +6.65% +8.71%
</TABLE>
Annual period ended June 30
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.
** 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 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Germany 21.4%
United States 20.5%
Denmark 12.4%
Australia 10.1%
Cash Equivalents/Receivables 8.2%
Canada 5.4%
France 5.1%
Italy 4.8%
Austria 3.5%
United Kingdom 2.9%
Sweden 2.9%
Netherlands 2.8%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (5.625%) 2000 4.8%
2. Kingdom of Denmark (8%) 2006 4.8%
3. German Government (7.125%) 2002 4.7%
4. Australian Government (7.50%) 2009 4.7%
5. General Electric Capital Corp (8.125%) 2007 4.6%
6. Kingdom of Denmark (7%) 2007 4.0%
7. Canadian Government (4.875%) 2008 3.9%
8. Kingdom of Denmark (8%) 2003 3.6%
9. Republic of Austria (7.875%) 2002 3.6%
10. Buoni Poliennali Del Tesoro (10.50%) 2000 3.2%
</TABLE>
FORTIS SERIES FUND: GLOBAL BOND SERIES
(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.
During the six-month period, the Global Bond portfolio performed marginally
better than the Salomon World Government Bond Index: 3.15 percent versus 2.79
percent.
The factors benefiting performance were threefold. The portfolio benefited from
a long overall duration in relation to the benchmark. Duration is a measure of a
bond portfolio's sensitivity to changes in interest rates; therefore a "long
duration" portfolio assumes interest rates will decline.
Additionally, the portfolio began the period with the belief that the Japanese
yen would continue to weaken, and established a currency hedge that reflected
this view. Toward the end of the period, as the yen reached a level of 142 yen
to the dollar, the portfolio reduced this position. Finally, within the European
profile, the portfolio was overweighted in Denmark bonds which performed well
relative to other European issues.
One adverse factor that affected the portfolio was the position in Australian
bonds, which were modestly disappointing on potential political uncertainty and
the impact of the Asian crisis on the Australian economy.
Looking ahead, we believe that as long as the inflationary environment remains
benign, the fixed income markets will continue to do well. The portfolio has
maintained an overweight exposure to the global bond market with concentrated
positions in the core European markets and the U.S. bond market. On the currency
front, the dollar has continued to remain strong against most currencies with
the portfolio maintaining an overweight position in the greenback.
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 INDEX *** BOND SERIES
<S> <C> <C>
1/3/95 $10,000 $10,000
95 11,688 11,541
96 11,728 11,588
97 12,183 12,083
98 12,708 12,715
Global Bond Series
Average Annual Total Return*
Since
1 Year January 3, 1995**
+5.23% +7.12%
</TABLE>
Annual period ended June 30
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 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 34.2%
Telecommunications 15.3%
Cable Television 10.5%
Textile Manufacturing 5.9%
Cash Equivalents/Receivables 5.8%
Broadcasting 4.4%
Steel and Iron 3.7%
Forest Products 3.3%
Publishing 3.1%
Restaurants and Franchising 3.0%
Energy 2.9%
Food-Miscellaneous 2.9%
Health Care Services 2.6%
Chemicals 2.4%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Unisys Corp (11.75%) 2004 1.7%
2. ITC Deltacom, Inc. (11%) 2007 1.6%
3. Greyhound Lines, Inc. (11.50%) 2007 1.6%
4. MDC Holdings, Inc. (11.125%) 2003 1.6%
5. Grand Casinos, Inc. (10.125%) 2003 1.6%
6. Pillowtex Corp. (10%) 2006 1.5%
7. Sinclair Broadcasting Group, Inc. (10%) 2005 1.5%
8. Clark Materials Handling (10.75%) 2006 1.5%
9. Weirton Steel Corp. (11.375%) 2004 1.5%
10. Newport News Ship Building (9.25%) 2006 1.5%
</TABLE>
FORTIS SERIES FUND: HIGH YIELD SERIES
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.
During this six-month reporting period, from January 1 to June 30, 1998, we've
added a new portfolio manager, Ho Wang. Mr. Wang brings to Fortis more than 28
years experience as a high yield specialist and a focus on investing in
high-yield bonds that will maximize the total return for shareholders. The fund
was up 2.12 percent over the first six months of 1998.
The primary reason that this fund underperformed expectations was due to ongoing
problems stemming from two specific holdings in our portfolio, Australis and
Wireless One. The negative earnings situation with these companies began last
year and continued to deteriorate throughout this reporting period. In addition,
our overweighting in the telecommunications sector hurt performance as that
sector has lagged the rest of the market in 1998.
Our decision to underweight emerging market bonds has significantly helped the
returns for the fund. Specifically, Southeast Asia, Japan and Russia, have
underperformed during 1998.
We have refocused our efforts on selecting higher-quality securities for this
portfolio. This strategy is crucial to our success in producing consistently
above average, total rates of return.
Looking ahead, we see U.S. economic activity beginning to moderate but we do not
expect this to have significant influence on the fund. Although we're currently
underweighted in the emerging market sector, we will continue to look for
opportunities within the sector that may add value in the coming months.
VALUE OF $10,000 INVESTED MAY 2, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS HIGH
HIGH YIELD YIELD
<S> <C> <C>
Index*** Series
5/2/94 $10,000 $10,000
94 10,036 9,998
95 11,423 10,817
96 12,407 11,694
97 14,104 13,003
98 15,708 13,860
High Yield Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+6.59% +8.15%
</TABLE>
Annual period ended June 30
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 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C>
Equity Securities 55.9%
Foreign - Government Bonds - Investment Grade 20.5%
U.S. Government Securities 14.5%
Cash Equivalents/Receivables 7.5%
Corporate Bonds - Investment Grade 1.6%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. United Kingdom Treasury (8.50%) 2007 3.0%
2. U.S. Treasury Note (5.75%) 2003 2.6%
3. U.S. Treasury Note (7.875%) 2004 2.3%
4. U.S. Treasury Bond (8.125%) 2019 1.8%
5. Germany Bundesrepublik (6.50%) 2005 1.8%
6. Bundesrepublik Deutschland (6.00%) 2001 1.7%
7. Italian Government (9.50%) 2006 1.7%
8. U.S. Treasury Note (7.25%) 2004 1.6%
9. German Government (6.25%) 2024 1.6%
<CAPTION>
Stocks
- -------------------------------------------------------------------
<C> <S> <C>
1. Philip Morris Co., Inc. 1.8%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
American Stores Co. AT&T Corp.
BTR plc Irish Life plc
Chase Manhattan Corp. Lukens, Inc.
Compagnie Financiere Richemont Polaroid Corp.
AG Racal Electronics plc
Fujisawa Pharmaceutical Co. Svenska Cellulosa B Free
Groupe Danone Tate & Lyle plc
Ocean Energy, Inc. Toys 'R' Us, Inc.
Tupperware Corp. Unilever plc
Unicom Corp. United Meridian Corp.
Wolseley plc
FORTIS SERIES FUND: GLOBAL ASSET ALLOCATION SERIES
(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.
Year-to-date through June 30th, the portfolio had a total return of 8.67 percent
versus the benchmark return of 11.20 percent. The relatively poor performance
was primarily the result of the underperformance of the global equity portion of
the portfolio.
The portfolio's recent underperformance was almost entirely due to weak relative
performance from U.S. stock selection. Partly due to individual stock
disappointments, it is also clearly reflective of the U.S. market, which has
been driven to record levels by large-cap names such as General Electric,
Microsoft and Coca-Cola. As value investors, we are loath to pay such premiums
in what seems to be an expensive flight to quality.
Several of our U.S. stocks were hurt however by specific events which we believe
caused them to be oversold. Borg Warner, for example, the auto components
manufacturer, fell 24 percent during the quarter due to Asian fears and
production delays within Ford. Oil stocks, Noble Drilling and Ocean Energy,
continued to be impacted by the weakness of oil prices. On a positive note, our
underweight position and stock selection in Japan and Asia continues to benefit
the portfolio.
Over the six-month period, the fixed income portion of the portfolio
outperformed its benchmark. This was principally due to our overweighting of
Swedish bonds and our overweighting of the U.S. dollar in favor of the yen.
Going forward, Japan and the level of the Japanese yen are now key to any
recovery within the Asian economies. It is difficult to predict what will happen
in Japan and Asia, but on balance, we feel that the Asian crisis together with
its implications for global growth will continue. These fundamentals should
continue to support global bonds and also sustain the ongoing flight to quality
from the emerging markets. We are therefore positive on global bond markets with
the exception of Japan and are therefore positioned for neutral interest rate
exposure overall, expecting bonds to remain a good performing asset class over
the remainder of the year.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SALOMON BROS MSCI GLOBAL ASSET
WORLD GOV'T WORLD ALLOCATION
BOND INDEX + INDEX ++ SERIES
<S> <C> <C> <C>
1/3/95 $10,000 $10,000 $10,000
95 11,688 10,942 11,189
96 11,728 13,021 12,516
97 12,183 15,965 14,368
98 12,708 18,753 16,334
Global Asset Allocation Series
Average Annual Total Return*
Since
1 Year January 3, 1995**
+13.68% +15.09%
</TABLE>
Annual period ended June 30
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.
9
<PAGE>
PORTFOLIO ALLOCATION AS OF 06/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Equity Securities 59.8%
U.S. Treasuries Securities 10.9%
Asset Backed Securities 8.0%
Corporate Bonds - Investment Grade 6.7%
Corporate Bonds - Non-Investment Grade 5.3%
U.S. Government Agencies Securities 5.0%
Cash Equivalents/Receivables 4.3%
</TABLE>
TOP 10 HOLDINGS AS OF 06/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. American International Group, Inc. 2.0%
2. Warner-Lambert Co. 1.7%
3. Camco International, Inc. 1.5%
4. Microsoft Corp. 1.5%
5. Kohl's Corp. 1.4%
6. Costco Companies, Inc. 1.4%
7. Groupe Danone ADR 1.4%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Note (6.375%) 2000 2.9%
2. FNMA (6.50%) 2028 1.8%
3. U.S. Treasury Note (6%) 1999 1.4%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES
FOR THE PERIOD ENDED 6/30/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
America Online, Inc. Baker Hughes, Inc.
American Express Co. Cendant Corp.
Exxon Corp. Centocor, Inc.
Kmart Corp. ConAgra, Inc.
Masco Corp. Disney (Walt) Co.
McDonald's Corp. Ericsson (L.M.) Telephone Co.
New York Times Co. Class B ADR
St. Joe Corp. Heinz (H.J.) Co.
Unisys Corp. Loral Space and Communications
Wal-Mart Stores, Inc. Ltd.
U.S. Filter Corp.
Union Planters Corp.
FORTIS SERIES FUND: ASSET ALLOCATION SERIES
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.
This six-month reporting period, from January 1 to June 30, 1998, the portfolio
produced a total return of 12.32 percent. The S&P 500 returned 17.70 percent
over the same time period. The S&P 500 Index is the weighted average of 500 of
the largest U.S. companies, as calculated by Standard & Poor's. The portfolio
currently has 40 percent of its assets in bonds. There are no bonds in the S&P
500 Index.
Presently, the equity portion of the portfolio is most heavily weighted in the
health care and retail sectors. Some of the most well-known names in the
portfolio carried the portfolio's equity performance during the first half of
1998. These names include: WalMart, McDonalds, Home Depot, Microsoft and
Medtronic. Also during the first half of 1998, we've lowered the portfolio's
energy and utilities sector weightings and increased the health care sector
weighting. These changes have helped the performance of the portfolio.
In the bond portion of this portfolio, we decreased our weighting of
investment-grade corporate and high-yield bonds which helped the performance of
the portfolio. We've also increased our government bond position to 12.0 percent
of the portfolio, up from 5.7 percent at the beginning of the year. We made this
shift to take advantage of the considerable inflow of investment dollars,
sometimes referred to as the "flight to quality," into U.S. government bonds due
to the situation in Southeast Asia.
While our investment strategy will remain the same, two things could impact
returns in the short run: Asia's financial ills and higher interest rates. Both
of these factors could hamper the performance of the portfolio, its index, and
the market overall. We will be closely monitoring events that effect these
factors so that we will have the portfolio adjusted accordingly.
Looking forward, we have positioned the equity portion of the portfolio for
growth by spreading out our holdings in some well-defined market sectors such as
health care. We'll also boost our technology weighting to better position
ourselves. We will not greatly overweight sectors relative to the benchmark but
will continue to focus on stock selection.
We believe that stronger company earnings will help the portfolio. We do not
expect interest rates to rise significantly. Stirred by a strong economy, the
environment is right for good portfolio performance in the months ahead.
VALUE OF $10,000 INVESTED JULY 1, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS ASSET
AGGREGATE BOND ALLOCATION
INDEX + S&P 500 ++ SERIES
<S> <C> <C> <C>
7/1/88 $10,000 $10,000 $10,000
89 11,222 12,052 11,311
90 12,103 14,029 13,089
91 13,398 15,065 13,941
92 15,279 17,093 15,997
93 17,080 19,416 17,951
94 16,856 19,676 17,907
95 18,989 24,799 21,542
96 19,822 31,286 23,980
97 21,439 41,922 28,519
98 23,700 54,563 34,836
Asset Allocation Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+22.15% +14.18% +13.29%
</TABLE>
Annual period ended June 30
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.
+ 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.
10
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 35.9%
Banks 10.5%
Cash Equivalents/Receivables 10.0%
Financial Services 6.3%
Telephone Services 5.2%
Oil-Crude Petroleum and Gas 5.1%
Utilities-Electric 4.1%
Building Materials 3.9%
Unit Investment Trust 3.7%
Health Care Services 3.4%
Food 3.2%
Computer-Software 3.1%
Insurance 3.1%
Natural Gas Transmissions 2.5%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. S&P 500 Depositary Receipt 3.7%
2. Republic New York Corp 2.6%
3. Raytheon Co. 2.4%
4. Sterling Commerce, Inc. 2.2%
5. U.S. Bancorp 2.1%
6. Bank of New York Company, Inc. 2.1%
7. BankBoston Corp. 2.0%
8. Hartford Financial Services Group, Inc. 2.0%
9. Masco Corp. 2.0%
10. Owens Corning 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
Burlington Resources, Inc. Anadarko Petroleum Corp.
CNF Transportation, Inc. Citicorp
Chevron Corp. Disney (Walt) Co.
First Chicago NBD Corp. International Business
First Data Corp. Machines Corp.
Foundation Health Systems, Lockheed Martin Corp.
Inc. Mobil Corp.
Masco Corp. Morton International, Inc.
Owens Corning (with rights)
Raytheon Co. Class A Raytheon Co. Class B
S&P 500 Depositary Receipt Royal Dutch Petroleum Co. NY
Shares
Texaco, Inc.
FORTIS SERIES FUND: VALUE SERIES
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.
For the six-month period ending June 30, 1998, the S&P 500 Index advanced 17.70
percent while the Fortis Value Series portfolio returned 10.35 percent. While we
were disappointed in this performance, it is in line with the performance of our
competition: funds investing in large capitalization, value stocks as defined by
Morningstar.
The fund's primary strategy is to invest in companies with accelerating earnings
growth, where we anticipate a company growth rate to rise over time. To the
extent that we cannot find accelerating earnings growth, we focus on our
secondary criteria, inexpensively valued growth. In the current market
environment, earnings acceleration is rare so we find ourselves focusing on
inexpensively valued growth. We continue to maintain adequate diversification
across market sectors and remain focused on stock selection.
Owens Corning was one of the fund's better performing stocks during the first
six months of 1998. We've also recently added Hubbell and Mead, two companies we
feel have relatively attractive prospects at low valuations.
Looking ahead, we see the economy in the late stages of the current expansion
and we expect to see a shift to slower economic growth. We believe that the
health care sector is a logical place for us to invest in this kind of
environment because companies in the business of providing goods and services
used in the delivery of health care tend to enjoy relatively stable demand.
Rising interest rates and uncertainties in Southeast Asia could affect the
fund's performance. We continue to monitor the effects of interest rates and
Asia on the portfolio's holdings.
We remain focused on investing in accelerating earnings growth or inexpensively
valued growth. We believe that this investment philosophy will provide good
returns to shareholders for the long term.
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 10,300 10,153
97 13,802 12,654
98 17,964 15,407
Value Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+21.76% +22.10%
</TABLE>
Annual period ended June 30
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 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 30.8%
Drugs 9.0%
Finance Services 8.5%
Cash Equivalents/Receivables 7.8%
Natural Gas Transmissions 7.0%
Telephone Services 7.0%
Real Estate-Investment Trust 6.6%
Utilities-Electric 4.4%
Oil-Crude Petroleum and Gas 4.2%
Insurance 4.1%
Food 4.0%
Banks 3.9%
Publishing 2.7%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Enron Corp. 2.5%
2. McGraw Hill Companies, Inc. 2.2%
3. Beneficial Corp. 2.1%
4. SBC Communications, Inc. 2.0%
5. American Express Co. 1.9%
6. Pharmacia and UpJohn, Inc. 1.8%
7. General Electric Co. 1.8%
8. Glaxo Wellcome plc ADR 1.8%
9. Omnicom Group, Inc. 1.8%
10. Royal Caribbean Cruises Ltd. 1.7%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
ALLTEL Corp. AT&T Corp.
Columbia Energy Group Baker Hughes, Inc.
Du Pont (E.I.) de Nemours & Chase Manhattan Corp.
Co. ConAgra, Inc.
Eastman Kodak Co. Deutsche Telekom AG ADR
Fleet Financial Group, Inc. Lilly (Eli) & Co., Inc.
Frontier Corp. Pfizer, Inc.
Sea Containers Ltd. Sprint Corp.
Sealed Air Corp. Convertible Telecom Corp. Of New Zealand
Series A Ltd. ADR
Starwood Hotels & Resorts Union Planters Corp.
Teekay Shipping Corp.
FORTIS SERIES FUND: GROWTH & INCOME SERIES
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.
During this six-month reporting period, from January 1 to June 30, 1998, the
U.S. economy has experienced significant growth, inflation continues to be low,
and the Fortis Growth and Income portfolio has continued to enjoy steady growth.
The portfolio returned 10.31 percent year-to-date through June 30, 1998, which
compares to a 17.70 percent rise in the S&P 500 Index. The index is the weighted
average of 500 of the largest U.S. companies, as calculated by Standard &
Poor's. However, the portfolio's underperformance is fairly typical during
periods of robust growth performance as growth and income vehicles tend to be
less volatile due to emphasis on income as well as growth opportunities.
We continue our strategy to invest in companies with higher dividend yields than
the portfolio's benchmark. Emphasis is also on well-established companies with
consistent growth prospects. This combination of moderate growth and growing
dividends should prove to be rewarding over time with less volatility than the
overall market.
We continue to favor the telecommunications, utilities and consumer durable
sectors. We expect to continue to carry lower than average weightings in
technology due to the lack of current yield in this sector. During the first six
months, we've added several household names to the fund including McGraw-Hill,
DuPont and Readers' Digest.
Looking ahead, we anticipate a slowing in earnings growth for the S&P 500
stocks. We also do not expect any significant upturn in either inflation or
interest rates any time soon. This outlook should be good for the Growth and
Income portfolio relative to its index in the months ahead.
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 9,912 9,942
95 12,492 11,448
96 15,760 14,430
97 21,118 18,403
98 27,486 22,587
Growth & Income Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+22.73% +21.61%
</TABLE>
Annual period ended June 30
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>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Spending 22.7%
Finance 17.2%
Consumer Discretionary 12.1%
Consumer Staples 11.6%
Health Care 10.3%
Utilities 8.9%
Energy & Related 7.5%
Basic Industry 4.6%
Cash Equivalents/Receivables 3.4%
Other 1.7%
</TABLE>
TOP 10 HOLDINGS AS OF 06/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. General Electric Co. 3.2%
2. Microsoft Corp. 2.9%
3. Coca-Cola Co. 2.3%
4. Exxon Corp. 1.9%
5. Merck & Co., Inc. 1.7%
6. Pfizer, Inc. 1.5%
7. Wal-Mart Stores, Inc. 1.5%
8. Intel Corp. 1.4%
9. Procter & Gamble Co. 1.3%
10. Royal Dutch Petroleum Co. 1.3%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
Ascend Communications, Inc. Charming Shoppes, Inc.
Consolidated Stores Corp. Echo Bay Mines Ltd.
Franklin Resources, Inc. Harland (John H.) Co.
Mercantile Bancorporation, Raytheon Corp.
Inc. Whitman Corp.
Northern Trust Corp.
Summit Bancorp
FORTIS SERIES FUND: S&P 500 INDEX SERIES
(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.
For the six-month period ending June 30, 1998, the portfolio realized a total
return of 17.44 percent while the S&P 500 realized a total return of 17.70
percent.
The portfolio is designed to replicate the large-cap U.S. equity market as it is
represented by the S&P 500 Index. Large-cap equities again outperformed both
small and mid-cap equities over the six-month reporting period.
The objective of the fund is to mirror the holdings of the S&P 500 Index. We
will continue to adjust the portfolio to mirror the holdings of the S&P 500
Index.
VALUE OF $10,000 INVESTED MAY 1, 1996
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 INDEX*** S&P 500 INDEX SERIES
<S> <C> <C>
5/1/96 $10,000 $10,000
96 10,300 10,279
97 13,802 13,716
98 17,964 17,760
S&P 500 Index Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+29.48% +30.39%
</TABLE>
Annual period ended June 30
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>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 35.8%
Finance Services 9.2%
Banks 8.6%
Drugs 8.5%
Computer-Software 7.4%
Cash Equivalent/Receivables 5.6%
Telephone Services 4.8%
Business Services 3.9%
Food 3.8%
Insurance 3.8%
Retail-Department Stores 2.3%
Health Care Services 2.1%
Aerospace and Equipment 2.1%
Retail-Specialty 2.1%
</TABLE>
TOP 10 HOLDINGS AS OF 06/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Travelers Group, Inc. 1.6%
2. Bristol-Myers Squibb Co. 1.5%
3. Tyco International Ltd. 1.5%
4. Freddie Mac 1.5%
5. AlliedSignal, Inc. 1.5%
6. Microsoft Corp. 1.5%
7. Warner-Lambert Co. 1.4%
8. Safeway, Inc. 1.3%
9. Pfizer, Inc. 1.2%
10. Danaher Corp. 1.2%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
AirTouch Communications, Inc. Hubbell, Inc. Class B
CBS Corp. JP Foodservice, Inc.
Capital One Financial Corp. Lockheed Martin Corp.
Fort James Corp. Motorola, Inc.
Hasbro, Inc. Nabisco Holdings Corp. Class A
Hilton Hotels Corp. SmithKline Beecham plc ADR
MediaOne Group, Inc. St. Paul Companies, Inc.
Rite Aid Corp. Synopsys, Inc.
Sterling Commerce, Inc. Texaco, Inc.
Tellabs, Inc. U.S. West Media Group
FORTIS SERIES FUND: BLUE CHIP STOCK SERIES
(SUBADVISED BY T. ROWE PRICE)
THE MONEY MANAGERS FOR THIS PORTFOLIO TARGET "BLUE CHIP" COMPANIES WITH LEADING
MARKET POSITIONS, SEASONED MANAGEMENT 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.
We're pleased to announce that the portfolio returned 16.93 percent from the
reporting period of Jan 1, 1998 through June 30, 1998. The portfolio's
benchmark, the S&P 500, returned 17.70 percent for the same time period. The S&P
500 is the weighted average of the 500 largest U.S. companies, as calculated by
Standard & Poor's.
Looking back over the first six months of 1998, the U.S. stock market continued
to surge to record highs. Carrying the market's performance were some of the
largest companies in the S&P 500 -- such as G.E. and Microsoft. Portfolio
performance was also helped by owning many of these same stocks.
The portfolio continued its approach of remaining sector neutral with the
exception of being slightly overweighted in the business, transportation,
financial and consumer services sectors.
Looking forward, we expect the U.S. economy to continue to grow, albeit at a
slower pace. Interest rates should remain stable as the Southeast Asian crisis
is monitored closely by Wall Street. This type of environment has historically
been favorable for stocks.
We will continue to follow our discipline of investing in high-quality, growing
companies. We believe this approach will provide excellent returns for investors
in the long run.
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>
5/1/96 $10,000 $10,000
96 10,300 10,134
97 13,802 13,345
98 17,964 17,262
Blue Chip Stock Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+29.36% +28.69%
</TABLE>
Annual period ended June 30
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 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United Kingdom 17.3%
France 17.1%
Japan 13.9%
Germany 10.8%
Switzerland 7.7%
Sweden 7.0%
Cash Equivalents/Receivables 6.6%
Other 6.5%
Italy 5.2%
Netherlands 4.0%
Spain 3.9%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Elf Aquitaine S.A. 2.7%
2. British Aerospace plc 2.4%
3. Telefonica S.A. 2.3%
4. Vivendi 2.2%
5. Zurich Versicherungs Gesellsharf 2.2%
6. Rhone - Poulenc S.A. 2.2%
7. Alcatel Alsthom 2.2%
8. Axa 2.2%
9. Viag AG 1.9%
10. British Petroleum Co. plc 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
ABB AB A Shares Deutsche Bank AG
Allianz AG General Electric Co. plc
Argentaria S.A. Havas S.A.
Asahi Breweries Ltd. Holderbank Financiere Glaris
Broken Hill Proprietary Co. AG.
Ltd. Metallgesellschaft AG
Imperial Chemical Industries Mitsubishi Heavy Industries
plc Ltd.
Istituto Bancario San Paolo di Mitsui Marine & Fire Insurance
Torino Rank Group plc
Michelin (C.G.D.E.) Class B Royal Dutch Petroleum Co. NY
Suez Lyonnaise des Eaux Shares
Volvo AB B Shares
FORTIS SERIES FUND: INTERNATIONAL STOCK SERIES
(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.
After keeping pace with the market's torrid first quarter rise, the
International Stock portfolio outpaced the MSCI EAFE Index during the second
quarter of 1998. EAFE rose 1.1 percent as Europe's 5.1 percent gain was tempered
by continued weakness in Asia. Year-to-date, the Lazard portfolio had a total
return of 18.55 percent, significantly ahead of EAFE's 16.08 percent gain.
Consolidation and corporate restructuring accelerated to unprecedented levels
during the second quarter. Global competition is forcing companies to alter
radically the way they do business. European stock prices are rising as
companies embrace change to improve their return on capital by shedding non-core
activities and bolstering main business operations through mergers and
acquisitions. Change is taking place in every industry, but none was bigger than
Daimler-Benz's (Germany) surprise acquisition of Chrysler (U.S.) to create a
global automotive powerhouse in the largest industrial takeover in history. In
telecom equipment, Alcatel (France) extended its global reach with the
acquisition of DSC Communications in the U.S. During the past two years, Alcatel
has successfully restructured itself from a French conglomerate into a leading
global telecom equipment company.
The Japanese equity market slipped 4.6 percent in the second quarter, but ended
on a positive note as talk of new economic recovery plans and the potential for
financial industry reform provided a glimmer of hope to investors. Although the
portfolio is underweight in Japan, valuations are becoming more compelling and
signs of change in Japan are beginning to appear. However, companies must
ultimately show the ability to improve their returns for the stock market to
recover.
Longer term, we feel the pendulum is swinging in favor of international
equities, especially Europe. The three factors that have contributed to the
strong performance of European equities have been: the restructuring of European
conglomerates, declining interest rates, and a growing acceptance among European
investors with equities as an asset class. We see these trends continuing for
some time.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI INTERNATIONAL
EAFE*** STOCK SERIES
<S> <C> <C>
1/3/95 $10,000 $10,000
95 $10,276 $10,488
96 $11,707 $12,355
97 $13,237 $14,683
98 $14,081 $17,310
International Stock Series
Average Annual Total Return*
Since
1 Year January 3, 1995**
+17.89% +17.02%
</TABLE>
Annual period ended June 30
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.
15
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Consumer Cyclical 17.7%
Capital Spending 17.6%
Finance 13.4%
Basic Industry 10.3%
Utilities 8.8%
Health Care 8.3%
Energy & Related 7.7%
Consumer Non-Cyclical 7.2%
Cash Equivalents/Receivables 6.6%
Transportation 1.4%
Metals-Mining, Miscellaneous 1.0%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. BMC Software, Inc. 1.9%
2. Commonwealth Energy System 1.6%
3. TJX Companies, Inc. 1.5%
4. STERIS Corp. 1.4%
5. Century Telephone Enterprises, Inc. 1.4%
6. Watson Pharmaceuticals, Inc. 1.4%
7. BEC Energy 1.3%
8. Tellabs, Inc. 1.3%
9. Compuware Corp. 1.3%
10. Waters Corp. 1.3%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS:
BEC Energy
BMC Software, Inc.
Century Telephone Enterprises,
Inc.
Commonwealth Energy System
Compuware Corp.
STERIS Corp.
TJX Companies, Inc.
Tellabs, Inc.
Waters Corp.
Watson Pharmaceuticals, Inc.
FORTIS SERIES FUND: MID CAP STOCK SERIES
(SUBADVISED BY DREYFUS)
THIS PORTFOLIO IS DESIGNED FOR INVESTORS WHO WISH TO INVEST IN MID
CAPITALIZATION COMPANIES THAT HAVE EXCELLENT POTENTIAL GROWTH CHARACTERISTICS
BUT ARE REASONABLY PRICED.
Since the inception of this portfolio on May 1, 1998, the fund has returned
- -5.08 percent. The S&P 400 Midcap Index returned -4.60 percent over the same
time period.
Dreyfus employs its disciplined investment process in the management of the
Fortis mid-cap portfolio. It is designed to maximize stock selection, while
neutralizing risks that are not rewarded by the market. The economic sectors are
closely managed to the S&P 400 Midcap Index, minimizing industry risk while
market risk is neutralized by managing the portfolio's volatility in line with
the S&P 400. Stock selection is based upon 14 fundamentally based factors, which
focus both on a stock's valuation and earnings health. These factors are
dynamically weighted to capture those characteristics that are preferred by the
market in the current environment.
Mid-cap stocks significantly underperformed large-cap stocks during the first
two months of the portfolio's existence as large-caps continue the trend of
market leadership. The portfolio underperformed marginally relative to the S&P
400 during this period. After outperforming in May, the portfolio underperformed
the S&P 400 Midcap in June, largely due to not holding the largest stock in the
S&P 400, America Online, until late in the month. America Online was over 26
percent in the month of June.
Despite the recent underperformance of mid-cap stocks relative to the large-cap
sector, we are confident that the underlying opportunity in mid-cap stocks will
ultimately be recognized by the marketplace. Typically, mid-cap companies have
better earnings growth than large-cap companies, and lesser volatility as
compared to the small-cap sector. It is for these reasons that we believe that
this sector should remain an important component of long-term investors'
portfolios.
VALUE OF $10,000 INVESTED MAY 1, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 400 MID CAP
<S> <C> <C>
Mid Cap Stock Series
5/1/98 $10,000 $10,000
98 $9,592 $9,492
Mid Cap Stock Series
Average Annual Total Return*
Since
May 1, 1998**
- -5.08%
</TABLE>
Annual period ended June 30
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 common stocks that measures the performance of the
mid-range sector of the U.S. stock market
16
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 19.5%
Cash Equivalents/Receivables 18.0%
Banks 9.8%
Real Estate Investment Trust 9.2%
Savings and Loans, Mortgage Companies 6.7%
Telecommunication Equipment 6.1%
Closed End Global Country Fund 5.9%
Telecommunications 4.7%
Ship Building, Shipping 4.6%
Consumer Goods 4.4%
Machinery 3.8%
Computer-Hardware 3.7%
Electronic-Controls and Equipment 3.6%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Knightsbridge Tankers Ltd. 4.6%
2. Federal Signal Corp. 4.5%
3. Jostens, Inc. 4.4%
4. CCB Financial Group 4.1%
5. Jones Intercable Inc. Class A 3.5%
6. Hollinger International, Inc. 3.3%
7. Summit Properties, Inc. 3.2%
8. IRT Property Co. 3.1%
9. First Savings Bank of Washington 2.9%
10. Eagle Hardware & Garden 2.3%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS:
CCB Financial Group
Eagle Hardware & Garden
Federal Signal Corp.
First Savings Bank of
Washington
Hollinger International, Inc.
IRT Property Co.
Jones Intercable, Inc. Class A
Jostens, Inc.
Knightsbridge Tankers Ltd.
Summit Properties, Inc.
FORTIS SERIES FUND: SMALL CAP VALUE SERIES
(SUBADVISED BY BERGER)
THIS PORTFOLIO IS DESIGNED FOR AGGRESSIVE INVESTORS WHO WANT TO INVEST IN SMALL
COMPANY STOCKS THAT THE PORTFOLIO MANAGERS BELIEVE ARE SIGNIFICANTLY
"UNDERVALUED".
The Small Cap Value portfolio's performance for the period May 1 to June 30,
1998 was -3.60 percent. Compared to the broad market index returns, our
portfolio return, and that of the small-cap stock dominating Russell 2000,
reflect 1998's two-tiered market. Investors concerned about Asia, and about
sustainability of the market's lofty valuations, again favored liquidity and
visibility of earnings, the hallmarks of large companies. Thus, large-cap stocks
continued to outperform small-caps, even though their returns were lower this
quarter than last.
One of our core strategies is to invest approximately 15 percent of total fund
assets in "fallen" growth stocks -- stocks that due to what we believe are
temporary problems, are 50 to 70 percent off of their highs. The current problem
faced by many of our fallen growth stock holdings is Asia. As a result, this
strategy has not performed for us in the short term. We feel confident in the
long-term prospects of these stocks, however, because we believe the risk/reward
factor at these price levels are in our favor.
We increased our REIT industry holdings during the second quarter. We believe
REITs are underpriced due to unwarranted concern about the potential resurgence
of commercial real estate construction to meet high demand.
The market today is trading at all-time highs, but the emphasis is on large-cap
stocks. We believe that the value market, relative to the general market, is as
cheap as it has been in many years. Going forward, we will continue to invest in
fallen growth companies and to maintain a relatively high cash position in order
to take advantage of buying opportunities created by a market we feel is
overemphasizing short-term problems. We believe this approach takes less risk
and offers greater potential rewards over the long term.
VALUE OF $10,000 INVESTED MAY 1, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 *** SMALL CAP VALUE SERIES
<S> <C> <C>
5/1/98 $10,000 $10,000
98 $9,491 $9,640
Small Cap Value Series
Average Annual Total Return*
Since
May 1, 1998**
- -3.60%
</TABLE>
Annual period ended June 30
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 common stocks of the smallest 2000 companies in the
Russell 3000 Index, which represents approximately 11% of the Russell 3000
Index.
17
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
United States 38.7%
Other 15.1%
Germany 8.1%
United Kingdom 6.1%
Netherlands 5.2%
France 4.7%
Finland 4.4%
Receivables/Cash Equivalents 4.3%
Japan 3.9%
Sweden 3.4%
Switzerland 3.1%
Spain 3.0%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. SAP AG Systeme Preferred 4.4%
2. Nokia Oyj K Shares 3.1%
3. Cisco Systems, Inc. 2.9%
4. Telefonica S.A. 2.5%
5. Ericsson Telephone Co. Class B ADR 2.0%
6. Gartner Group, Inc. Class A 2.0%
7. Orange plc 1.9%
8. Randstad Holdings N.V. 1.7%
9. Tellabs, Inc. 1.7%
10. Novartis AG 1.6%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
ADC Telecommunications, Inc. CIPE France S.A.
Banca di Roma Deutsche Lufthansa AG
Bayerische Vereinsbank AG ENSCO International, Inc.
Citrix Systems, Inc. Hong Kong Land Holdings Ltd.
Dresdner Bank AG Matsushita Electric Industrial
Grupo Televisa S.A. ADR Co. Ltd. ADR
Heller Financial, Inc. Motorola, Inc.
Honda Motor Co. Ltd. Oracle Corp.
Newbridge Networks Corp. ADR Powerscreen International plc
Union Bank of Switzerland Tommy Hilfiger Corp.
Vans, Inc.
FORTIS SERIES FUND: GLOBAL GROWTH SERIES
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.
We're pleased to report that during this six-month reporting period, from
January 1 to June 30, 1998, this fund returned 15.34 percent. This compares to a
16.85 percent rate in the MSCI World Index.
This fund's charter is to take advantage of a world of opportunities and invest
in stock markets around the world. We look to invest in segments of the world's
economy which demonstrate consistently strong levels of growth.
During the first six months of 1998, large company stocks did particularly well
for this fund. Specifically, SAP AG Systems Preferred, a Germany-based software
producer, was a good performer and our largest holding. Other strong performers
were Nokia, a Finnish company which is a worldwide leader in both the cellular
phone and the cellular infrastructure equipment markets, and Telefonica de
Espana, Spain's telephone company, which is currently building the largest
telephone network in Latin America.
We have been overweighted in Europe over the past several months which has
helped this fund's performance because of Europe's strong performing markets. On
the other hand, our underweighting in the lagging Asian and Japanese markets has
also helped this fund to diminish the significant impact of that region's poor
performance.
In the months ahead, we expect the economies of the United States and Europe to
continue to benefit from an environment of low inflation and low interest rates.
We should also continue to see moderate economic growth. These elements combined
create an environment that provides a favorable backdrop for the financial
markets.
We also should see continued volatility in the world markets in general. We
anticipate that Japan will continue struggle to turn its economy around which
will likely result in a slow growth environment.
We would like to emphasize that while country economic performance is important,
this fund focuses on individual stocks. Therefore we believe the fund's focus on
individual companies with sound fundamental growth outlooks should help it to
continue to perform well over the long term.
VALUE OF $10,000 INVESTED MAY 1, 1992
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MSCI WORLD INDEX*** GLOBAL GROWTH PORTFOLIO
<S> <C> <C> <C>
5/1/92 $10,000 $10,000
92 $10,057 $9,967
93 $11,828 $11,996
94 $13,102 $12,002
95 $14,571 $14,808
96 $17,340 $19,668
97 $21,260 $21,027
98 $24,973 $24,290
Global Growth Series
Average Annual Total Return*
Since
1 Year 5 Year May 1, 1992**
+15.51% +15.15% +15.48%
</TABLE>
Annual period ended June 30
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.
18
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 23.1%
Cash Equivalents/Receivables 13.8%
Financial Services 11.4%
Drugs 8.2%
Computer-Communications Equipment 8.1%
Banks 6.7%
Telephone Services 4.7%
Telecommunications 4.1%
Business Services and Supplies 3.8%
Retail-Department Stores 3.7%
Retail-Specialty 3.7%
Tobacco 3.4%
Computer-Software 2.8%
Broadcasting 2.5%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Dell Computers Corp. 4.3%
2. Associates First Capital Corp. 4.0%
3. AirTouch Communications, Inc. 4.0%
4. Nokia Oyj Corp. ADR 3.9%
5. Tyco International Ltd. 3.8%
6. Cisco Systems, Inc. 3.8%
7. Home Depot, Inc. 3.7%
8. Philip Morris Companies, Inc. 3.4%
9. Citicorp 2.9%
10. Merck & Co., Inc. 2.6%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS:
AirTouch Communications, Inc.
Associates First Capital Corp.
Cisco Systems, Inc.
Citicorp
Dell Computers Corp.
Home Depot, Inc.
Merck & Co., Inc.
Nokia Oyj Corp. ADR
Philip Morris Companies, Inc.
Tyco International Ltd.
FORTIS SERIES FUND: LARGE CAP GROWTH SERIES
(SUBADVISED BY ALLIANCE)
THIS PORTFOLIO IS DESIGNED FOR INVESTORS WHO WANT TO INVEST IN LARGE
CAPITALIZATION, FAST GROWING COMPANIES.
We are pleased to report that the portfolio performance was 4.39 percent over
the two-month period May 1 to June 30, 1998. The S&P 500 performed 1.43 percent
over the same period.
During the first six months of 1998 the U.S. stock market continued to attain
record levels. Carrying the markets performance were some of the largest
companies in the S&P 500, companies such as General Electric, Microsoft and
Cisco. Portfolio performance was also helped by owning many of these same
stocks. Also performing well during this period were several technology stocks.
The portfolio's slight overweighting in this area helped fund performance as
well.
One other sector that performed well was the financials. The portfolio's
holdings in AIG and Morgan Dean Witter helped portfolio performance during May
and June.
Underperforming sectors included the oil services stocks and airlines. Norwest
Airlines in particular was hurt by Asian economic problems and a tough labor
situation. Disney also has been hurt recently as several of their new movie
releases have not met expectations and several senior managers have left the
company. While the underperforming releases are not worrisome, the management
staff departures are a development that we will monitor closely.
With the U.S. 30-year bond at 5.6 percent and receding inflationary fears, U.S.
equities are an attractive investment at this time. While the portfolio's
composition reflects that view, it also recognizes that the U.S. equity market
has risen quite sharply this past quarter. The portfolio returns should weather
potential market volatility due to stock selection and our trading methodology.
VALUE OF $10,000 INVESTED MAY 1, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500 *** LARGE CAP GROWTH SERIES
<S> <C> <C>
5/1/98 $10,000 $10,000
98 $10,227 $10,439
Large Cap Growth Series
Average Annual Total Return*
Since
May 1, 1996**
+4.39%
</TABLE>
Annual period ended June 30
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.
19
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 26.2%
Computer-Software 13.4%
Cash Equivalents/Receivables 9.2%
Retail-Specialty 7.9%
Finance Services 8.6%
Health Care Services 5.5%
Computer-Communications Equipment 4.3%
Insurance 4.1%
Medical Supplies 3.9%
Telephone Services 3.4%
Telecommunication Equipment 3.2%
Retail-Department Stores 2.9%
Banks 2.8%
Oil-Offshore Drilling 2.3%
Drugs 2.3%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Cisco Systems, Inc. 3.5%
2. Capital One Financial Corp. 3.4%
3. WorldCom, Inc. 3.4%
4. BMC Software, Inc. 3.4%
5. Microsoft Corp. 3.2%
6. HBO & Co. 3.1%
7. Staples, Inc. 3.0%
8. Kohl's Corp. 2.9%
9. Home Depot, Inc. 2.7%
10. Tellabs, Inc. 2.6%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
Concord EFS, Inc. ADC
Crompton & Knowles Corp. Telecommunications,
Life Re Corp. Inc.
Mercury General Corp. Cendant Corp.
Platinum Technology, Inc. ENSCO International,
Royal Caribbean Cruises Ltd. Inc.
Sofamor Danek Group, Inc. Fannie Mae
Storage Technology Corp. Input/Output, Inc.
Total Renal Care Holdings, Medpartners, Inc.
Inc. Medtronic, Inc. (with
Watson Pharmaceuticals, Inc. rights)
Noble Drilling Corp.
Oracle Corp.
Schlumberger Ltd.
FORTIS SERIES FUND: GROWTH STOCK SERIES
THIS PORTFOLIO IS DESIGNED FOR INVESTORS WHO SEEK TO REWARD POTENTIAL ENTIRELY
THROUGH U.S. EXCHANGE LISTED STOCKS. IT INVESTS IN MEDIUM-SIZED GROWTH COMPANIES
THAT MOVED BEYOND THE VENTURE STAGE.
For the first six months of this year the Fortis Growth portfolio had a total
return of 15.82 percent. This compares to an 8.63 percent return for the S&P 400
Midcap Index. This index is the most relevant comparison for the Fortis Growth
portfolio as the portfolio's primary investment focus is in mid-capitalization
stocks, typically those with a market capitalization between $1 billion and $6
billion.
There are a number of factors which contributed to the favorable performance
versus the S&P 400 Index. The portfolio had a overweighting in the technology
sector, particularly in the software and telecommunications equipment stocks.
These areas performed extremely well during this period. Conversely, there was
little exposure to the semiconductor industry, a business that was hard hit by
overcapacity and margin concerns. The portfolio also had a major presence in the
retail sector. This industry is enjoying solid growth due to recent strong gains
in personal income as the economic expansion in the U.S. continues.
The portfolio's positions in retailers Kohl's, Dollar Tree and Staples all were
up more than 40 percent. Performance was also aided by underweightings in the
basic materials, capital goods and utility sectors. We believe these areas offer
limited growth opportunities since they have underperformed in the first half
due to unfavorable supply/demand characteristics.
The growth portfolio had a change of portfolio manager in March, and has seen a
substantial modification in the composition of the portfolio as a result. The
number of holdings has risen from 49 to 64, large weightings in certain economic
sectors have been reduced, while diversification has been increased. These
changes are designed to reduce the volatility and overall risk of the portfolio.
Other changes include increasing exposure to the health care, business services
and financial sectors while decreasing positions in technology and energy. Going
forward, the portfolio will maintain a disciplined investment process by
investing in a well-diversified group of companies, with an emphasis on
companies with strong earnings growth, upside earnings momentum and reasonable
valuation.
The stock market outlook for the second half of 1998 is somewhat mixed. While
the U.S. economy remains healthy, inflation is subdued, interest rates are low,
and the economic crisis in Asia is clearly having a negative impact,
particularly on corporate profits. Declining corporate profit growth coupled
with relatively high stock valuation levels could produce the long-awaited
market correction. More likely, the market will resist further appreciation
until the Asian situation begins to show signs of improvement. While large
capitalization stocks have outperformed mid-caps for the last several years,
mid-cap stocks have considerably less exposure to Asia than the large-caps and
are more dependent on the U.S. economy for their earnings growth, and thus may
reverse the recent investment underperformance trend versus large-caps.
We appreciate your investment in the Fortis Growth Portfolio and emphasize that
regardless of the short-term market environment, we will retain our disciplined
investment process, both in buying and selling stocks, and will maintain a
well-diversified portfolio. We believe this approach offers the best opportunity
for portfolio performance over the long term.
VALUE OF $10,000 INVESTED JULY 1, 1988
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500** GROWTH STOCK SERIES
<S> <C> <C>
7/1/88 $10,000 $10,000
89 $12,052 $12,182
90 $14,029 $14,605
91 $15,065 $15,701
92 $17,093 $18,188
93 $19,416 $21,602
94 $19,676 $20,280
95 $24,799 $26,334
96 $31,286 $31,416
97 $41,922 $35,206
98 $54,563 $42,819
Growth Stock Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+21.62% +14.66% +15.65%
</TABLE>
Annual period ended June 30
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.
** An unmanaged index of 500 common stocks.
20
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 6/30/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Other 19.4%
Computer-Software 16.0%
Business Services 12.9%
Cash Equivalents/Receivables 13.0%
Retail-Specialty 10.2%
Telephone Services 9.5%
Telecommunication Equipment 4.9%
Oil and Gas Field Services 4.5%
Health Care Services 4.1%
Computer-Communications Equip. 3.1%
Telecommunications 2.4%
</TABLE>
TOP 10 HOLDINGS AS OF 6/30/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Worldcom, Inc. 2.6%
2. Cisco Systems, Inc. 2.3%
3. Acxiom Corp. 2.2%
4. Intermedia Communications, Inc. 2.2%
5. Petroleum Geo-Services ADR 2.1%
6. USA Waste Services, Inc. 2.0%
7. Bed Bath & Beyond, Inc. 2.0%
8. Qwest Communications Intl., Inc. 2.0%
9. Parametric Technology Corp. 1.9%
10. Sterling Commerce, Inc. 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 6/30/98
ADDITIONS: ELIMINATIONS:
ALLTEL Corp. BMC Industries, Inc.
Ascend Communications, Inc. Brooks Fiber Properties, Inc.
CIENA Corp. CORESTAFF, Inc.
Metamor Worldwide, Inc. Camco International, Inc.
Michaels Stores, Inc. Corrections Corp. of America
Mobius Management Systems, E* Trade Group, Inc.
Inc. HSN, Inc.
Pier 1 Imports, Inc. Netscape Communications Corp.
Primus Telecommunications Spine Tech, Inc.
Group, Inc. Viking Office Products, Inc.
Sylvan Learning Systems, Inc.
USA Networks, Inc.
FORTIS SERIES FUND: AGGRESSIVE GROWTH SERIES
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.
Over the period of January 1, 1998 through June 30, 1998, the portfolio
significantly outperformed the Russell 2000 Index, the widely-used index for
small capitalization portfolios. During this six-month period, the portfolio was
up 13.67 percent versus the 5.27 percent return of the Russell 2000 Index.
The performance of small-cap companies has trailed that of large-cap companies
since 1994. This is at least partially due to the perception that big companies
are "safer." Big companies are perceived as safer, in part, due to a comfort
level of owning a well-known company. Additionally, investors can buy and sell
large blocks of their shares quickly, without moving the price much. When a
large company reports disappointing earnings, the stock can fall sharply, but
trading typically remains orderly. In addition, large companies have broad, deep
businesses that can withstand a period of weakness.
The outperformance of the portfolio over this time period can be attributed
directly to successful stock picking. No one sector stood out. The stocks that
did well are the ones that continued to exceed the expectations of earnings and
sales growth. For example, Ascend Communications, a manufacturer of networking
products, appreciated more than 102 percent on strong second-quarter profits and
higher sales. Legato Systems, a developer of network software, was up 77.3
percent as their array of products continued to gain wide-scale acceptance. Bed
Bath & Beyond, a national retailer of domestic merchandise and home furnishings,
appreciated 34.6 percent and benefited from strong home sales. On the negative
side, the companies with businesses linked to the oil industry underperformed as
the price of oil declined.
Looking ahead, there is concern about poorer earnings growth as the economy
slows down. In anticipation about this possible occurrence; the portfolio holds
moderately higher cash positions, increased diversification via a greater number
of holdings, and ownership of companies that are in the upper range of the
acceptable level of market capitalization. Notwithstanding the prospect of
increased short-term volatility, we are confident that investors will ultimately
recognize the superior profit growth and relatively lower price-to-earnings
ratios enjoyed by small stocks.
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
5/2/94 $10,000 $10,000
<S> <C> <C>
94 $9,912 $9,133
95 $12,492 $11,352
96 $15,760 $14,722
97 $21,118 $12,960
98 $27,486 $15,815
Aggressive Growth Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+22.03% +11.64%
</TABLE>
Annual period ended June 30
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.
21
<PAGE>
FORTIS SERIES FUND, INC.
MONEY MARKET SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
SHORT-TERM INVESTMENTS-99.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal Maturity & Poor's
Amount Yield Date Rating Value (a)
----------- ------ --------- --------------- ------------
<C> <S> <C> <C> <C> <C>
BANKS-12.16%
$2,700,000 Banc One Funding Corp. (c)................... 5.65% 09/03/98 A1 $ 2,673,187
2,700,000 Deutsche Bank AG............................. 5.63% 09/08/98 A1+ 2,671,230
2,000,000 First Union National Bank.................... 5.65% 09/21/98 A1 1,975,008
22,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit............................... 5.42% 07/01/98 A1+ 22,000
------------
7,341,425
------------
BROKERAGE AND INVESTMENT-4.05%
2,500,000 Merrill Lynch & Co., Inc..................... 5.70% 11/18/98 A1+ 2,446,146
------------
CAPTIVE AUTO FINANCE-12.79%
2,800,000 Ford Motor Credit Corp....................... 5.64% 08/05/98 A1 2,784,656
1,100,000 General Motors Acceptance Corp............... 5.66% 09/18/98 A1 1,086,727
1,600,000 General Motors Acceptance Corp............... 5.66% 09/16/98 A1 1,580,968
2,300,000 Toyota Motor Credit Corp..................... 5.67% 09/25/98 A1+ 2,269,374
------------
7,721,725
------------
CAPTIVE EQUIPMENT FINANCE-8.22%
2,500,000 IBM Credit Corp.............................. 5.66% 08/26/98 A1 2,478,308
2,500,000 John Deere Capital Corp...................... 5.63% 07/30/98 A1 2,488,562
------------
4,966,870
------------
CAPTIVE OIL FINANCE-4.62%
2,800,000 Chevron Oil Finance Co....................... 5.61% 07/21/98 A1+ 2,791,017
------------
CONSUMER FINANCING-21.65%
2,800,000 American Express Credit Corp................. 5.66% 10/09/98 A1 2,756,951
2,700,000 American General Finance Corp................ 5.65% 08/12/98 A1 2,682,359
2,500,000 Beneficial Corp.............................. 5.69% 09/23/98 A1 2,467,476
2,600,000 Commercial Credit Corp....................... 5.65% 08/19/98 A1 2,580,103
2,600,000 Household Finance Corp....................... 5.60% 08/07/98 A1 2,585,043
------------
13,071,932
------------
DIVERSIFIED FINANCE-15.46%
1,415,000 Associates Corp. Master Variable Rate Note... 5.42% 07/01/98 A1+ 1,415,000
2,700,000 CIT Group Inc................................ 5.61% 07/24/98 A1 2,690,100
2,500,000 General Electric Capital Corp................ 5.69% 09/15/98 A1+ 2,470,644
2,800,000 Prudential Funding Corp...................... 5.67% 09/25/98 A1 2,763,257
------------
9,339,001
------------
FOOD-GROCERY, MISCELLANEOUS-4.30%
2,600,000 Nestle Capital Corp.......................... 5.57% 07/08/98 A1+ 2,596,839
------------
INDUSTRIAL-4.42%
2,700,000 Xerox Credit Corp............................ 5.63% 09/11/98 A1 2,670,435
------------
OIL-REFINING-3.31%
2,000,000 Texaco, Inc.................................. 5.55% 07/07/98 A1 1,997,877
------------
UTILITIES-ELECTRIC-8.91%
2,000,000 CSW Credit, Inc.............................. 5.64% 07/16/98 A1+ 1,995,102
600,000 CSW Credit, Inc.............................. 5.65% 08/07/98 A1+ 596,504
2,800,000 Duke Energy Corp............................. 5.61% 07/22/98 A1 2,790,640
------------
5,382,246
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$60,325,513) (b)........................... $60,325,513
------------
------------
</TABLE>
(a) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(b) Also represents cost for federal income tax purposes.
(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". This security has been determined to be liquid
under the guidelines established by the Board of Directors. The aggregate
value of this security at June 30, 1998, was $2,673,187, which represents
4.43% of total net assets.
22
<PAGE>
FORTIS SERIES FUND, INC.
U.S. GOVERNMENT SECURITIES SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
U.S. GOVERNMENT SECURITIES-95.23%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (a) Value (b)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-4.18%
MORTGAGE BACKED SECURITIES:
$ 3,718,475 5.50% 2001................................... $ 3,681,813 $ 3,685,938
12,321 11.25% 2015.................................. 13,402 13,703
------------- -------------
3,695,215 3,699,641
------------- -------------
NOTES:
2,000,000 6.75% Global 2006............................ 2,058,087 2,132,908
------------- -------------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORPORATION................................ 5,753,302 5,832,549
------------- -------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-21.21%
MORTGAGE BACKED SECURITIES:
1,506,043 6.00% 2013................................... 1,483,645 1,489,092
1,949,830 6.20% 2006................................... 1,956,837 1,967,959
798,099 6.36% 2008................................... 796,867 813,313
1,842,522 6.48% 2008................................... 1,860,411 1,899,205
4,388,684 6.50% 2013-2028.............................. 4,378,178 4,393,424
746,499 6.54% 2007................................... 759,971 769,594
6,247,151 7.00% 2003-2028 (e).......................... 6,279,608 6,338,071
2,694,656 7.50% 2023................................... 2,772,969 2,763,687
192,574 8.50% 2017................................... 196,983 200,999
138,302 9.00% 2020-2021.............................. 138,029 145,995
869,634 9.75% 2020................................... 938,118 934,721
------------- -------------
21,561,616 21,716,060
------------- -------------
NOTES:
1,510,000 5.625% 2001.................................. 1,509,013 1,508,579
3,935,000 6.58% 2007................................... 3,926,189 4,168,629
2,020,000 7.15% 2007................................... 2,190,876 2,216,239
------------- -------------
7,626,078 7,893,447
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 29,187,694 29,609,507
------------- -------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION-10.03%
MORTGAGE BACKED SECURITIES:
8,881,117 7.50% 2027................................... 8,940,261 9,122,594
2,070,893 9.00% 2020................................... 2,169,261 2,215,856
2,480,713 9.50% 2018-2021.............................. 2,572,833 2,661,468
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 13,682,355 13,999,918
------------- -------------
OTHER DIRECT FEDERAL OBLIGATIONS-25.81%
FEDERAL FARM CREDIT BANK:
5,000,000 5.70% 2001................................... 5,020,441 5,002,340
------------- -------------
FEDERAL HOME LOAN BANK:
3,350,000 5.60% 2001................................... 3,337,719 3,339,615
1,075,000 5.75% 2001................................... 1,073,889 1,075,752
2,500,000 5.925% 2000.................................. 2,503,097 2,514,197
7,895,000 7.31% 2004................................... 7,914,237 8,512,452
------------- -------------
14,828,942 15,442,016
------------- -------------
TENNESSEE VALLEY AUTHORITY:
15,000,000 6.375% Global 2005........................... 14,443,417 15,573,135
------------- -------------
TOTAL OTHER DIRECT FEDERAL OBLIGATIONS....... 34,292,800 36,017,491
------------- -------------
OTHER GOVERNMENT AGENCIES-2.58%
RESOLUTION FUNDING CORPORATION:
9,000,000 8.395% Zero Coupon Strips 2014 (d)........... 2,630,372 3,596,490
------------- -------------
</TABLE>
23
<PAGE>
FORTIS SERIES FUND, INC.
U.S. GOVERNMENT SECURITIES SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (a) Value (b)
------------ ------------- -------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-31.42%
BONDS:
$14,450,000 5.92% 2009 (d)............................... $ 7,441,079 $ 7,642,749
4,650,000 6.07% 2019 (d)............................... 1,335,246 1,432,851
6,450,000 6.10% 2021 (d)............................... 1,583,172 1,698,994
3,700,000 6.375% 2027.................................. 4,055,509 4,064,221
1,040,000 8.125% 2021.................................. 1,224,762 1,354,276
------------- -------------
15,639,768 16,193,091
------------- -------------
NOTES:
4,100,000 5.625% 1999.................................. 4,094,333 4,103,846
1,350,000 6.00% 1999................................... 1,349,567 1,356,329
5,825,000 6.125% 2001.................................. 5,750,765 5,928,761
305,000 6.25% 2002................................... 313,300 312,530
8,065,000 6.375% 2000.................................. 8,145,279 8,185,975
7,500,000 6.625% 2002.................................. 7,703,932 7,767,188
------------- -------------
27,357,176 27,654,629
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 42,996,944 43,847,720
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. $ 128,543,467 $ 132,903,675
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-7.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
----------- -------------
<C> <S> <C>
BANKS-4.08%
$5,700,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 5,700,000
-------------
DIVERSIFIED FINANCE-3.33%
4,641,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 4,641,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 10,341,000
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$138,884,467) (a).......................... $ 143,244,675
-------------
-------------
</TABLE>
(a) At June 30, 1998, the cost of securities for federal income tax purposes
was $139,086,588 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $4,193,467
Unrealized depreciation.......................................... (35,380)
- -----------------------------------------------------------------------------
Net unrealized appreciation...................................... $4,158,087
- -----------------------------------------------------------------------------
</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.
(e) The cost of securities purchased on a when-issued basis at June 30, 1998,
was $4,653,426 .
24
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
WARRANTS - 0.19%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
CONSUMER GOODS - 0.19%
1,000 Iridium LLC/Capital Corp. (Warrants)
(a)(e)..................................... $ 96,501 $ 205,000
------------- -------------
</TABLE>
ASSET BACKED SECURITIES - 19.67%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS - 10.46%
$ 428,939 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (e).......... AAA $ 432,097 $ 445,723
1,250,000 First Union Lehman Brothers Commercial
Mortgage, 7.30% Ser 1997-C1 Class A2
12-18-2006................................. Aaa* 1,262,031 1,326,875
774,486 GS Mortgage Securities Corp. II Protective
Life, 7.02% Ser 1996-PL Class A1
3-1-2026................................... Aaa* 774,437 794,878
795,066 J.P. Morgan Commercial Mortgage Finance
Corp., 6.47% Ser 1996-C2 Class A
11-25-2027................................. AAA 800,693 803,128
823,694 Merrill Lynch Mortgage Investors, Inc., 6.76%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 801,889 839,904
1,400,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996-C1 Class B 4-25-2028.............. AA 1,365,400 1,481,270
1,000,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 1,009,015 1,076,875
1,650,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,664,463 1,791,917
2,000,000 Nationslink Funding Corp., 7.52% Ser 1996-1
Class A2 7-20-2005......................... AAA 2,002,072 2,118,760
817,477 Nationslink Funding Corp., 7.53% Ser 1996-1
Class A1 9-20-2002......................... AAA 823,311 854,403
------------- -------------
10,935,408 11,533,733
------------- -------------
HOUSING - 1.16%
750,000 Money Store (The) Home Improvement Trust,
7.41% Ser 1997-1 Class M1 5-15-2017........ AA 752,978 782,935
500,000 Money Store (The) Residential Trust, 7.09%
1997-I-M1 7-15-2016........................ AA 499,923 504,375
------------- -------------
1,252,901 1,287,310
------------- -------------
MANUFACTURED HOMES - 3.08%
1,800,000 Green Tree Financial Corp., 7.20% Ser 1993-4
Class B1 1-15-2019......................... Baa3* 1,787,478 1,814,616
1,500,000 Green Tree Financial Corp., 7.65% Ser 1994-1
Class A5 4-15-2019......................... Aa2* 1,494,141 1,586,775
------------- -------------
3,281,619 3,401,391
------------- -------------
MISCELLANEOUS - 0.19%
206,216 Fifth Third Auto Grantor Trust, 6.70% Ser
1996-B Class B 3-15-2002................... A 206,112 207,498
------------- -------------
MULTI-FAMILY LOANS - 3.91%
2,150,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-MF4 Class A2 4-18-2001................ A 2,176,363 2,218,757
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-MF12 Class B1 9-18-2003............... NR 1,473,750 1,553,955
676,938 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.76% Ser 1996-1 Class
A Principal Only 1-1-2033 (f)(h)........... Baa3* 514,410 536,685
------------- -------------
4,164,523 4,309,397
------------- -------------
WHOLE LOAN RESIDENTIAL - 0.87%
923,825 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 923,250 956,759
------------- -------------
TOTAL ASSET BACKED SECURITIES................ $ 20,763,813 $ 21,696,088
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE - 39.49%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT - 0.51%
$ 500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB+ $ 502,816 $ 556,665
------------- -------------
AIRLINES - 1.59%
1,300,000 Delta Airlines, 10.50% Pass Thru Certificate
4-30-2016.................................. BBB 1,578,778 1,753,206
------------- -------------
</TABLE>
25
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
BANKS - 7.94%
$ 750,000 Banco Santiago S.A., 7.00% Sub Note
7-18-2007.................................. BBB $ 743,730 $ 752,955
1,500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(f)........................................ AAA 1,497,243 1,637,898
1,000,000 CoreStates Capital Corp., 6.75% Medium Term
Note 11-15-2006............................ A 1,007,022 1,038,445
1,500,000 Keystone Financial Funding Corp., 7.30%
Medium Term Note 5-15-2004................. BBB+ 1,496,794 1,575,658
1,000,000 Republic NY Capital I, 7.75% 11-15-2026...... A+ 969,282 1,086,540
1,100,000 Republic NY Capital II, 7.53% 12-4-2026...... A+ 1,053,425 1,151,791
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- 498,057 515,523
1,000,000 US Bancorp., 6.00% Sub Note 10-15-2003....... A 998,104 1,000,856
------------- -------------
8,263,657 8,759,666
------------- -------------
BROKERAGE AND INVESTMENT - 3.27%
1,500,000 Bear Stearns Capital Trust I, 7.00% Variable
Rate Bond 1-15-2027........................ BBB 1,499,143 1,529,854
500,000 Donaldson, Lufkin & Jenrette, 6.50% Note
6-1-2008................................... A- 497,934 502,006
1,500,000 Lehman Brothers Holdings, 7.375% Sr Note
5-15-2004.................................. A 1,494,853 1,577,656
------------- -------------
3,491,930 3,609,516
------------- -------------
CABLE TELEVISION - 1.78%
1,000,000 Comcast Cable Communications, Inc., 8.50%
Note 5-1-2027 (with rights)................ BBB- 998,306 1,204,733
750,000 Cox Communications, Inc., 6.95% 1-15-2028.... A- 747,230 755,918
------------- -------------
1,745,536 1,960,651
------------- -------------
CAPTIVE AUTO FINANCE - 1.80%
2,000,000 General Motors Acceptance Corp., 5.875% Sr.
Sub Deb 1-22-2003.......................... A 1,993,835 1,981,370
------------- -------------
CHEMICALS - 0.96%
1,000,000 Lyondell Petrochemical, 7.55% Deb
2-15-2026.................................. BBB- 946,674 1,063,004
------------- -------------
ENERGY - 0.80%
750,000 NGC Corp. Capital Trust, 8.32% 6-1-2027...... BBB 750,000 877,921
------------- -------------
FINANCE COMPANIES - 1.16%
1,250,000 Homeside Lending, Inc., 6.875% Medium Term
Note 6-30-2002............................. A+ 1,249,659 1,278,993
------------- -------------
FOREIGN-GOVERNMENT - 1.17%
1,250,000 Poland (Republic of), 7.125% Yankee Bond
7-1-2004................................... BBB- 1,244,362 1,285,938
------------- -------------
FOREST PRODUCTS - 0.46%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 499,471 504,919
------------- -------------
HOUSING - 1.38%
1,500,000 Masco Corp., 6.625% 4-15-2018................ A- 1,497,895 1,519,914
------------- -------------
INDUSTRIAL - 0.92%
1,000,000 Tyco International, 7.00% 6-15-2028.......... A- 992,794 1,016,358
------------- -------------
MEDIA - 1.09%
1,000,000 News America Holdings, 8.875% Deb
4-26-2023.................................. BBB- 992,460 1,206,301
------------- -------------
NATURAL GAS TRANSMISSIONS - 1.70%
1,000,000 Tennessee Gas Pipeline, 7.50% Bond
4-1-2017................................... BBB 984,481 1,091,997
750,000 Trans-Canada Pipelines Ltd., 7.06% Note
10-14-2025................................. A- 750,000 786,869
------------- -------------
1,734,481 1,878,866
------------- -------------
OIL-EQUIPMENT WELLS AND SERVICES - 0.47%
500,000 Petroleum Geo-Services, 7.125% Sr Note
3-30-2028.................................. BBB 498,554 516,641
------------- -------------
OIL-REFINING - 3.00%
1,500,000 Coastal Corp., 7.42% Note 2-15-2037.......... BBB- 1,427,119 1,621,245
1,500,000 Tosco Corp., 7.80% 1-1-2027.................. BBB- 1,498,343 1,691,846
------------- -------------
2,925,462 3,313,091
------------- -------------
REAL ESTATE-INVESTMENT TRUST - 0.94%
1,000,000 Meditrust, 7.82% Note 9-10-2026.............. BBB- 1,000,000 1,038,900
------------- -------------
</TABLE>
26
<PAGE>
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
SUPRANATIONAL - 0.93%
$1,000,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ $ 999,532 $ 1,025,703
------------- -------------
TELECOMMUNICATIONS - 0.97%
1,000,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 998,085 1,071,478
------------- -------------
TELEPHONE SERVICES - 3.32%
1,500,000 Century Telephone Enterprises, Inc., 6.15%
1-15-2005.................................. BBB+ 1,497,842 1,477,524
2,000,000 GTE Corp., 7.51% Note 4-1-2009............... A 1,984,856 2,180,184
------------- -------------
3,482,698 3,657,708
------------- -------------
UTILITIES-ELECTRIC - 3.33%
1,500,000 Empresa Nacional de Electricidad, 7.325%
Yankee Bond 2-1-2037....................... A- 1,500,000 1,565,474
750,000 Puget Sound Energy, Inc., 7.02% Medium Term
Note 12-1-2027............................. A- 750,000 777,674
1,250,000 Texas Utilities Electric Capital V, 8.175%
1-30-2037.................................. BBB 1,250,000 1,332,565
------------- -------------
3,500,000 3,675,713
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 40,888,679 $ 43,552,522
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE - 15.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
BROADCASTING - 0.49%
$ 500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B $ 500,000 $ 536,250
------------- -------------
CABLE TELEVISION - 2.13%
1,008,177 Australis Media Ltd., 16.20% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (a)(e)(g)............... D 796,220 50,409
1,000,000 CSC Holdings, Inc., 10.50% 5-15-2016......... BB- 1,014,585 1,167,500
1,000,000 Lenfest Communications, 8.25% Sr Note
2-15-2008 (f).............................. BB- 997,332 1,040,000
500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 490,523 93,750
------------- -------------
3,298,660 2,351,659
------------- -------------
COMPUTER-HARDWARE - 1.04%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,078,757 1,153,750
------------- -------------
ENERGY - 0.89%
1,000,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 1,000,000 980,000
------------- -------------
ENTERTAINMENT - 0.94%
1,000,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 1,008,233 1,035,000
------------- -------------
FOREIGN - GOVERNMENT - 1.06%
125,000 Korea (Republic of), 8.75% Global Bond
4-15-2003.................................. BB+ 119,138 117,355
375,000 Korea (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ 369,991 340,319
750,000 Philippines (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ 746,119 716,250
------------- -------------
1,235,248 1,173,924
------------- -------------
HOUSING - 0.50%
500,000 MDC Holdings, Inc., 11.125% Note
12-15-2003................................. BB- 523,930 548,750
------------- -------------
MEDICAL SUPPLIES - 0.50%
500,000 Maxxim Medical, 10.50% Sr Sub Note
8-1-2006................................... B 549,501 548,750
------------- -------------
RESTAURANTS AND FRANCHISING - 0.46%
500,000 Tricon Global Restaurant, 7.65% Sr Note
5-15-2008.................................. BB 498,887 507,871
------------- -------------
STEEL AND IRON - 0.97%
1,000,000 Weirton Steel Corp., 11.375% Sr Note
7-1-2004................................... B 1,055,475 1,067,500
------------- -------------
</TABLE>
27
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
TELECOMMUNICATIONS - 3.26%
$ 500,000 Intermedia Communications, 8.50% Sr Note
1-15-2008.................................. B $ 512,717 $ 500,000
500,000 Nextel Communications, Inc., 9.58% Sr Disc
Note 9-15-2007 (Zero coupon until
9-15-2002, thereafter 10.65%) (g).......... CCC+ 330,850 336,250
500,000 Omnipoint Corp., 11.625% Sr Note 8-15-2006... CCC+ 488,828 526,250
500,000 Omnipoint Corp., 11.625% Sr Note Ser A
8-15-2006.................................. CCC+ 487,651 526,250
250,000 Phonetel Technologies, Inc., 12.00% Sr Note
12-15-2006................................. CCC 260,447 250,000
1,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 1,061,385 1,037,500
500,000 Winstar Communications, Inc., 9.83% Sr Disc
Note 10-15-2005 (Zero coupon until
10-15-2000, thereafter 14.00%) (g)......... CCC+ 424,977 416,250
------------- -------------
3,566,855 3,592,500
------------- -------------
TEXTILE MANUFACTURING - 0.98%
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,050,122 1,080,000
------------- -------------
TRANSPORTATION - 1.01%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,077,650 1,110,000
------------- -------------
UTILITIES-ELECTRIC - 0.90%
1,000,000 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BB- 994,283 994,280
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 17,437,601 $ 16,680,234
------------- -------------
------------- -------------
</TABLE>
U.S. GOVERNMENT SECURITIES - 17.48%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.93%
MORTGAGE BACKED SECURITIES:
$ 837,241 6.00% 2013................................... $ 824,790 $ 827,818
279,312 6.30% 2008................................... 279,680 283,502
2,758,437 7.00% 2028 (i)............................... 2,792,056 2,797,207
1,485,379 7.50% 2022-2027.............................. 1,532,373 1,523,432
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 5,428,899 5,431,959
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
3.13%
MORTGAGE BACKED SECURITIES:
2,230,193 9.00% 2020................................... 2,336,127 2,386,306
994,941 9.50% 2019................................... 1,032,954 1,065,761
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 3,369,081 3,452,067
------------- -------------
U.S. TREASURY SECURITIES - 9.42%
BONDS:
2,750,000 6.07% 2019 (g)............................... 789,997 847,385
950,000 6.10% 2021 (g)............................... 242,379 250,239
1,500,000 6.375% 2027.................................. 1,626,284 1,647,657
1,500,000 8.125% 2021.................................. 1,900,185 1,953,282
------------- -------------
4,558,845 4,698,563
------------- -------------
NOTES:
800,000 5.625% 1999.................................. 798,894 800,750
1,000,000 5.75% 2003................................... 1,006,659 1,009,688
</TABLE>
28
<PAGE>
U.S. GOVERNMENT SECURITIES - 17.48%-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
$3,610,000 6.625% 2007.................................. $ 3,844,666 $ 3,879,624
------------- -------------
5,650,219 5,690,062
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 10,209,064 10,388,625
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 19,007,044 19,272,651
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 98,193,638 $ 101,406,495
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS - 9.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS - 3.20%
$3,525,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 5.42%......... $ 3,525,000
-------------
DIVERSIFIED FINANCE - 3.71%
4,096,000 Associates Corp. Master Variable Rate Note,
Current rate - 5.42%....................... 4,096,000
-------------
U.S. GOVERNMENT AGENCY - 2.44%
1,200,000 Federal Home Loan Mortgage Corp., 5.54%,
7-6-1998................................... 1,198,912
1,500,000 Federal National Mortgage Association, 5.59%,
7-27-1998.................................. 1,493,835
-------------
2,692,747
-------------
TOTAL SHORT-TERM INVESTMENTS................. 10,313,747
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$108,507,385) (b).......................... $ 111,720,242
-------------
-------------
</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 June 30, 1998, the cost of securities for federal income tax purposes
was $108,507,385 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $4,540,756
Unrealized depreciation..................................... (1,327,899)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $3,212,857
- ------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statement 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 9.84% of total net assets as of June 30, 1998.
(e) Securities sold within the 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:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
1997 1,008,177 Australis Media Ltd., 16.20% Sr Sub Disc
Note 5-15-2003 (Zero coupon through
5-15-2000, thereafter 15.75%) $ 796,220
1996 428,939 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 432,097
1997 1,000 Iridium LLC/Capital Corp. (Warrants) 96,501
The aggregate value of these securities at June 30, 1998, was $701,132, which represents .64% of total
net assets.
</TABLE>
(f) Securities sold within the 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". Pursuant to guidelines adopted by the Board of
Directors, these issues are deemed to be liquid. The aggregate value of
these securities at June 30, 1998, was $3,214,583, which represents 2.91%
of total net assets.
(g) The interest rate disclosed for these securities represents the effective
yield on the date of acquisition.
(h) The interest rate disclosed for principal only strips represents the
effective yield at June 30, 1998, based upon future cash flows. This
investment has been identified by portfolio management as a liquid
security. The aggregate value of this security at June 30, 1998, was
$536,685, which represents .49% of total net assets.
(i) The cost of securities purchased on a when-issued basis at June 30, 1998,
was $2,792,056.
* Moody's Rating
29
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL BOND SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-75.99%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (a)(d) Value (b)(d)
--------------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
AUSTRALIA-10.06%
$ 800,000 Australian Government (Australian Dollar),
10.00% 10-15-2007.......................... AAA $ 617,226 $ 652,896
1,360,000 Australian Government (Australian Dollar),
7.50% 9-15-2009............................ AAA 970,352 971,414
640,000 Australian Government (Australian Dollar),
9.50% 8-15-2003............................ AAA 509,873 467,950
------------ ------------
2,097,451 2,092,260
------------ ------------
AUSTRIA-3.58%
700,000 Republic of Austria (US Dollar), 7.875%
3-26-2002.................................. AAA 729,267 744,625
------------ ------------
CANADA-5.36%
345,000 Canadian Government (Canadian Dollar), 8.00%
6-1-2023................................... AAA 287,948 312,837
1,450,000 Canadian Government (German Deutschemark),
4.875% 7-7-2008............................ AA+ 802,824 801,267
------------ ------------
1,090,772 1,114,104
------------ ------------
DENMARK-12.42%
5,000,000 Kingdom of Denmark (Danish Krone), 7.00%
11-15-2007................................. AAA 810,341 837,211
5,700,000 Kingdom of Denmark (Danish Krone), 8.00%
3-15-2006.................................. AAA 926,259 990,675
4,550,000 Kingdom of Denmark (Danish Krone), 8.00%
5-15-2003.................................. AAA 828,271 756,075
------------ ------------
2,564,871 2,583,961
------------ ------------
FRANCE-5.10%
450,000 Government of France (European Currency
Unit), 4.50% Treasury Bill 7-12-2002....... NR 494,575 495,640
500,000 Government of France (European Currency
Unit), 5.25% 4-25-2008..................... Aaa* 559,193 564,262
------------ ------------
1,053,768 1,059,902
------------ ------------
GERMANY-21.38%
1,100,000 Bundesobligation (German Deutschemark), 4.50%
Bond 8-1-2002.............................. Aaa* 601,699 613,089
900,000 Deutsche Ausgleichsbank (German
Deutschemark), 6.375% 11-7-2002............ AAA 551,403 534,110
350,000 Freistaat Bayern (German Deutschemark), 6.00%
10-30-2006................................. NR 203,123 208,256
1,050,000 German Government (German Deutschemark),
6.00% 1-5-2006............................. Aaa* 613,915 628,797
1,600,000 German Government (German Deutschemark),
7.125% 12-20-2002.......................... Aaa* 964,369 982,831
750,000 Helaba International Finance plc (German
Deutschemark), 5.50% 2-4-2013.............. AAA 415,513 426,683
550,000 Kredit Fuer Wiederaufbau (German
Deutschemark), 5.00% 1-4-2009.............. AAA 301,245 305,841
400,000 Kredit Fuer Wiederaufbau (German
Deutschemark), 5.50% 1-22-2018............. AAA 221,001 226,593
860,000 Landeskreditbank Baden-Wuerttemberg (German
Deutschemark), 6.625% 8-20-2003............ AAA 611,668 519,747
------------ ------------
4,483,936 4,445,947
------------ ------------
ITALY-4.81%
1,080,000,000 Buoni Poliennali Del Tesoro (Italian Lira),
10.50% 4-1-2000............................ AAA 687,234 665,998
530,000,000 Buoni Poliennali Del Tesoro (Italian Lira),
9.50% 2-1-2001............................. AAA 343,347 334,034
------------ ------------
1,030,581 1,000,032
------------ ------------
NETHERLANDS-2.82%
1,100,000 Dutch Government (Dutch Guilders), 6.50%
4-15-2003.................................. Aaa* 676,023 587,434
------------ ------------
SWEDEN-2.90%
3,900,000 Kingdom of Sweden (Swedish Krona), 13% Deb
6-15-2001.................................. Aa1* 619,589 603,190
------------ ------------
UNITED KINGDOM-2.92%
280,000 United Kingdom Treasury (British Pound),
8.00% 6-7-2021............................. Aaa* 596,472 607,626
------------ ------------
UNITED STATES-4.64%
850,000 General Electric Capital Corp., 8.125%
2-23-2007.................................. AAA 922,760 964,219
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $15,865,490 $15,803,300
------------ ------------
------------ ------------
</TABLE>
30
<PAGE>
U.S. GOVERNMENT SECURITIES-15.84%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (a) Value (b)
----------- ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-15.84%
BONDS:
$ 300,000 6.50% 2026................................... $ 323,274 $ 333,188
1,450,000 6.82% 2017 (e)............................... 401,971 494,711
450,000 7.50% 2016................................... 502,826 540,281
400,000 8.125% 2019.................................. 457,527 516,250
270,000 11.75% 2014.................................. 400,177 406,519
------------ ------------
2,085,775 2,290,949
------------ ------------
NOTES:
1,000,000 5.625% 2000.................................. 1,001,380 1,002,188
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 3,087,155 3,293,137
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $18,952,645 $19,096,437
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-2.41%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)(d)
--------- ------------
<C> <S> <C>
BANKS-0.00%
$ 872 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 872
------------
INVESTMENT COMPANY-2.41%
500,063 First American Institutional Government Fund,
Current rate -- 5.28%...................... 500,063
------------
TOTAL SHORT-TERM INVESTMENTS................. 500,935
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$19,453,580) (a)........................... $19,597,372
------------
------------
</TABLE>
(a) At June 30, 1998, the cost of securities for federal income tax purposes
was $19,455,877 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 501,921
Unrealized depreciation..................................... (360,426)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 141,495
- -------------------------------------------------------------------------
</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) Cost and market value are stated in U.S. dollars; principal amount is
stated in the currency indicated.
(e) The interest rate disclosed for these securities represents the effective
yield on the date of acquisition.
* Moody's Rating
31
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS AND WARRANTS-0.30%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
APPAREL-0.02%
250 Hosiery Corp. of America Class A (a)(e)...... $ 4,230 $ 17,500
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.01%
500 Highwaymaster Communications, Inc. (Warrants)
(a)(e)..................................... 5,000 3,750
------------ ------------
CABLE TELEVISION-0.00%
2,500 American Telecasting, Inc. (Warrants)
(a)(e)..................................... 5,000 25
------------ ------------
CONSUMER GOODS-0.00%
1,000 Wireless One, Inc. (Warrants) (a)(e)......... 7,831 10
------------ ------------
PUBLISHING-0.04%
79,000 Marvel Entertainment Group, Inc. (a)(e)...... 849,041 25,280
------------ ------------
TELECOMMUNICATIONS-0.23%
3,300 Clearnet Communications, Inc. (Warrants)
(a)(e)..................................... 42,075 11,550
1,000 e.spire Communications, Inc. (Warrants)
(a)(e)..................................... 45,700 140,000
2,560 Powertel, Inc. (Warrants) (a)(e)............. 18,823 10,240
------------ ------------
106,598 161,790
------------ ------------
TOTAL COMMON STOCKS AND WARRANTS............. $ 977,700 $ 208,355
------------ ------------
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-0.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
-------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
FINANCE COMPANIES-0.14%
$81,000 Homeside, Inc., 11.25% Sr Secured Second
Priority Note 5-15-2003.................... A+ $ 81,000 $ 96,086
------------ ------------
</TABLE>
CORPORATE BONDS - NON-INVESTMENT GRADE-93.72%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
AIR FREIGHT-0.74%
$ 500,000 Kitty Hawk, Inc., 9.95% Sr Note 11-15-2004... B+ $ 511,762 $ 517,500
------------ ------------
APPAREL-0.79%
500,000 Hosiery Corp. of America, Inc., 13.75% Sr Sub
Note 8-1-2002.............................. B- 531,286 548,750
------------ ------------
AUTOMOBILE MANUFACTURERS-1.44%
1,000,000 Navistar International Corp., 8.00% Sr Sub
Note 2-1-2008.............................. BB- 1,002,078 1,005,000
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-1.99%
1,000,000 Diamond Triumph Auto, 9.25% Sr Note 4-1-2008
(e)........................................ B+ 1,019,863 1,017,500
500,000 Highwaymaster, Inc., 13.75% Sr Note 9-15-2005
(e)........................................ B- 536,374 375,000
------------ ------------
1,556,237 1,392,500
------------ ------------
BROADCASTING-4.39%
500,000 Chancellor Media Corp., 8.125% Sr Sub Note
12-15-2007................................. Ba3* 498,765 506,250
500,000 Grupo Televisa S.A., 10.04% Sr Disc Note
5-15-2008 (Zero coupon through 5-15-2001,
thereafter 13.25%) (g)..................... BB 398,902 403,750
500,000 Shop at Home, Inc., 11.00% Sr Secured Note
4-1-2005................................... B 500,000 527,500
1,000,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B 1,032,245 1,072,500
500,000 Young Broadcasting, Inc., 11.75% Sr Sub Note
11-15-2004................................. B 549,455 552,500
------------ ------------
2,979,367 3,062,500
------------ ------------
BUSINESS SERVICES AND SUPPLIES-0.78%
500,000 Dialog Corp. plc, 11.00% Sr Sub Note
11-15-2007................................. B 500,000 543,750
------------ ------------
</TABLE>
32
<PAGE>
CORPORATE BONDS - NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
CABLE TELEVISION-10.50%
$1,000,000 Adelphia Communications, Inc., 9.25% Sr Note
10-1-2002.................................. B2* $ 1,018,525 $ 1,037,500
3,033,461 Australis Media Ltd., 14.00% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%)(with warrants)
(a)(e)(g).................................. D 2,277,149 151,673
1,000,000 Century Communications Corp., 8.875% Sr Note
1-15-2007.................................. BB- 1,030,655 1,060,000
1,000,000 CSC Holdings Inc., 9.25% 11-1-2005........... BB- 1,050,714 1,057,500
500,000 Galaxy Telecom L.P., 12.375% Sr Sub Note
10-1-2005.................................. B- 545,210 556,250
500,000 Lenfest Communications, 7.625% Sr Note
2-15-2008 (f).............................. BB+ 498,638 508,125
500,000 Lenfest Communications, 8.25% Sr Note
2-15-2008 (f).............................. BB- 498,666 520,000
500,000 Marcus Cable Co.,7.23% Sr Disc Note
12-15-2005 (Zero coupon through 6-15-2000,
thereafter 14.25%) (g)..................... B 462,827 465,000
500,000 Mediacom LLC/Capital, 8.50% Sr Note 4-15-2008
(e)........................................ B+ 500,000 498,125
500,000 Olympus Communication L.P., 10.625% Sr Note
11-15-2006................................. B 500,000 552,500
150,000 People's Choice T.V. Corp., 17.08% Sr Disc
Note 6-1-2004 (Zero coupon until 6-1-2000,
thereafter 13.125%) (g).................... CCC- 79,860 46,500
500,000 Rifkin Acquisition Partners L.P., 11.125% Sr
Sub Note 1-15-2006......................... B- 552,347 551,250
1,500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 1,188,503 281,250
500,000 Wireless One, Inc., 13.463% Sr Disc Note
8-1-2006 (Zero coupon through 8-1-2001,
thereafter 13.50%) (g)..................... CCC+ 343,479 50,000
------------ ------------
10,546,573 7,335,673
------------ ------------
CHEMICALS-2.38%
500,000 Agricultural Minerals & Chemicals, 10.75% Sr
Note 9-30-2003............................. BB- 521,705 532,500
500,000 NL Industries, Inc., 11.75% Sr Secured Note
10-15-2003................................. B 553,368 550,625
1,000,000 Trans-Resources, Inc., 11.93% Sr Disc Note
3-15-2008 (Zero coupon until 3-15-2003,
thereafter 12.00%) (g)..................... B- 582,232 580,000
------------ ------------
1,657,305 1,663,125
------------ ------------
COMPUTER-HARDWARE-1.65%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,115,843 1,153,750
------------ ------------
CONSUMER GOODS-1.88%
250,000 Chattem, Inc., 12.75% Sr Sub Note Ser B
6-15-2004.................................. B- 257,887 280,000
1,000,000 Drypers Corp., 10.25% Sr Note 6-15-2007
(f)........................................ B 1,033,925 1,035,000
------------ ------------
1,291,812 1,315,000
------------ ------------
DAIRY PRODUCTS-1.39%
1,000,000 Fage Dairy Industries, Inc., 9.00% Sr Note
2-1-2007................................... BB 966,957 972,500
------------ ------------
ELECTRIC-COMPONENTS AND PARTS-0.71%
500,000 Wesco Distribution, Inc., 9.125% Sr Sub Note
6-1-2008 (f)............................... B 498,382 495,000
------------ ------------
ELECTRONIC-DEFENSE-0.78%
500,000 Tracor, Inc., 8.50% Sr Sub Note 3-1-2007..... B+ 522,972 542,500
------------ ------------
ENERGY-2.87%
1,000,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 997,631 980,000
500,000 Gulfmark Offshore, 8.75% Sr Note 6-1-2008
(f)........................................ NR 498,352 485,000
500,000 KCS Energy, Inc., 11.00% Sr Note 1-15-2003... B 549,592 537,500
------------ ------------
2,045,575 2,002,500
------------ ------------
ENTERTAINMENT-1.48%
1,000,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 1,008,826 1,035,000
------------ ------------
FOOD SERVICE-1.48%
1,000,000 SC International Services, Inc., 9.25% Sr Sub
Note 9-1-2007.............................. B 1,042,284 1,035,000
------------ ------------
FOOD-MISCELLANEOUS-2.92%
500,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 531,463 531,250
500,000 Favorite Brands International, Inc., 10.75%
Sr Note 5-15-2006 (e)...................... B- 500,000 505,000
500,000 Fresh Foods, Inc., 10.75% Sr Note 6-1-2006
(e)........................................ B 500,321 500,000
500,000 Smithfield Foods, Inc., 7.625% Sr Note
2-15-2008 (e).............................. BB+ 498,311 505,000
------------ ------------
2,030,095 2,041,250
------------ ------------
</TABLE>
33
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
CORPORATE BONDS - NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
FOREIGN-GOVERNMENT-1.33%
$ 500,000 Korea (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ $ 493,322 $ 453,758
500,000 Philippines (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ 497,413 477,500
------------ ------------
990,735 931,258
------------ ------------
FOREST PRODUCTS-3.33%
1,000,000 Domtar, Inc., 8.75% Note 8-1-2006............ BB+ 1,047,239 1,045,000
750,000 Pacific Lumber Co., 10.50% Sr Note
3-1-2003................................... B 772,029 770,625
500,000 Stone Container Corp., 9.875% Sr Note
2-1-2001................................... B 509,447 511,875
------------ ------------
2,328,715 2,327,500
------------ ------------
HEALTH CARE SERVICES-2.58%
250,000 Oxford Health Plans, 11.00% Sr Note 5-15-2005
(f)........................................ B- 250,000 256,250
1,000,000 Quorum Health Group, Inc., 8.75% Sr Sub Note
11-1-2005.................................. BB- 1,041,171 1,030,000
500,000 Tenet Healthcare Corp., 8.625% Sr Sub Note
1-15-2007.................................. BB- 517,065 515,625
------------ ------------
1,808,236 1,801,875
------------ ------------
HEALTH PRODUCTS-0.71%
500,000 Global Health Sciences, 11.00% Sr Note
5-1-2008 (e)............................... B+ 485,466 493,750
------------ ------------
HOUSING-1.57%
1,000,000 MDC Holdings, Inc., 11.125% Note
12-15-2003................................. BB- 1,060,263 1,097,500
------------ ------------
LEISURE TIME-AMUSEMENTS-1.57%
1,000,000 Grand Casinos, Inc., 10.125% First Mtg Bond
12-1-2003.................................. BB 1,085,211 1,095,000
------------ ------------
MACHINERY-1.53%
1,000,000 Clark Materials Handling, 10.75% Sr Note
11-15-2006................................. B+ 1,026,382 1,070,000
------------ ------------
MACHINERY-TOOLS-0.36%
250,000 Simonds Industries, Inc., 10.25% Sr Sub Note
7-1-2008 (e)............................... B- 250,000 250,000
------------ ------------
MEDICAL SUPPLIES-0.79%
500,000 Maxxim Medical, 10.50% Sr Sub Note
8-1-2006................................... B 549,501 548,750
------------ ------------
METALS-FABRICATING-1.39%
1,000,000 Metals USA, Inc., 8.625% Sr Sub Note
2-15-2008 (f).............................. B 1,003,660 972,500
------------ ------------
MISCELLANEOUS-0.72%
500,000 La Petite Acad/LPA Holdings, 10.00% Sr Note
5-15-2008 (e).............................. B- 500,000 503,750
------------ ------------
PAPER-0.72%
500,000 Plainwell, Inc., 11.00% Sr Sub Note 3-1-2008
(e)........................................ B- 500,000 502,500
------------ ------------
PRINTING-0.78%
500,000 Day International Group, Inc., 11.125% Sr
Note 6-1-2005.............................. B+ 544,926 543,125
------------ ------------
PUBLISHING-3.02%
550,000 Affinity Group, 11.50% Sr Sub Note
10-15-2003................................. B 583,723 580,250
500,000 Garden State Newspapers, 8.75% Sr Sub Note
10-1-2009.................................. B+ 503,648 507,500
500,000 Primedia, Inc., 10.25% Sr Note 6-1-2004...... BB- 537,990 532,500
500,000 Primedia, Inc., 7.625% Sr Note 4-1-2008...... BB- 497,198 486,250
------------ ------------
2,122,559 2,106,500
------------ ------------
RESTAURANTS AND FRANCHISING-2.99%
500,000 Advantica Restaurant Group, Inc., 11.25% Sr
Note 1-15-2008............................. B 540,136 531,250
1,000,000 Friendly Ice Cream, 10.50% Sr Note
12-1-2007.................................. B 1,032,908 1,050,000
500,000 Tricon Global Restaurant, 7.65% Sr Note
5-15-2008.................................. BB 498,887 507,871
------------ ------------
2,071,931 2,089,121
------------ ------------
RETAIL-GROCERY-1.43%
1,000,000 Fred Meyer, Inc., 7.45% Sr Note 3-1-2008..... BB+ 997,523 1,002,109
------------ ------------
SHIP BUILDING, SHIPPING-1.52%
1,000,000 Newport News Ship Building, 9.25% Sr Sub Note
12-1-2006.................................. B+ 1,062,968 1,062,500
------------ ------------
</TABLE>
34
<PAGE>
CORPORATE BONDS - NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
STEEL AND IRON-3.69%
$1,000,000 Gulf States Steel Corp., 13.50% First Mtg
Bond 4-15-2003............................. B- $ 1,036,438 $ 1,000,000
1,000,000 Weirton Steel Corp., 11.375% Sr Note
7-1-2004................................... B 1,043,066 1,067,500
500,000 Wheeling-Pittsburgh Corp., 9.25% Sr Note
11-15-2007................................. BB- 511,062 510,000
------------ ------------
2,590,566 2,577,500
------------ ------------
TECHNOLOGY-0.33%
500,000 Diva Systems Corp., 12.58% Sr Disc Note
3-1-2008 (Zero coupon through 3-1-2003,
thereafter 12.625%)(and warrants) (e)(g)... NR 283,253 230,000
------------ ------------
TELECOMMUNICATIONS-15.03%
1,000,000 Comcast Cellular Holdings, 9.50% Sr Note
5-1-2007................................... BB+ 1,043,916 1,042,500
500,000 Flag Limited, 8.25% Sr Note 1-30-2008 (e).... B+ 500,000 505,000
500,000 Fonorola, Inc., 12.50% Sr Secured Note
8-15-2002.................................. BB- 513,904 553,750
500,000 Globalstar LP/Capital, 11.25% Sr Note
6-15-2004.................................. B 515,964 485,000
500,000 Hyperion Telecommunication, 12.25% Sr Note
9-1-2004................................... B 537,557 538,750
750,000 Intermedia Communications, 8.50% Sr Note
1-15-2008.................................. B 778,269 750,000
500,000 Intermedia Communications, Inc., 11.25% Sr
Disc Note 7-15-2007 (Zero Coupon until
7-15-2002, thereafter 11.25%) (g).......... B 375,930 365,625
1,000,000 ITC Deltacom, Inc., 11.00% Sr Note
6-1-2007................................... B 1,130,760 1,127,500
1,000,000 Level III Communications, 9.125% Sr Note
5-1-2008 (f)............................... B 995,836 973,750
970,000 McleodUSA, Inc., 9.25% Sr Note 7-15-2007..... B+ 1,045,183 1,006,375
500,000 Nextel Communications, Inc., 9.58% Sr Disc
Note 9-15-2007 (Zero coupon until
9-15-2002, thereafter 10.65%) (f)(g)....... CCC+ 337,167 336,250
1,000,000 Omnipoint Corp., 11.625% Sr Note Ser A
8-15-2006.................................. CCC+ 968,945 1,052,500
1,000,000 Qwest Communications Int'l, 8.29% Sr Disc
Note 2-1-2008 (Zero coupon until 2-1-2003,
thereafter 8.29%) (f)(g)................... BB+ 689,171 720,000
1,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 1,061,385 1,037,500
------------ ------------
10,493,987 10,494,500
------------ ------------
TEXTILE MANUFACTURING-5.87%
1,000,000 Anvil Knitwear, Inc., 10.875% Sr Note
3-15-2007.................................. B+ 1,020,663 1,025,000
1,000,000 Galey & Lord, Inc., 9.125% Sr Sub Note
3-1-2008................................... B3* 995,113 965,000
1,000,000 Maxim Group, Inc., 9.25% Sr Note
10-15-2007................................. B 989,179 1,027,500
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,072,669 1,080,000
------------ ------------
4,077,624 4,097,500
------------ ------------
TRANSPORTATION-1.59%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,053,501 1,110,000
------------ ------------
UTILITIES-ELECTRIC-1.45%
1,000,000 AES Corp., 8.50% Sr Sub Note 11-1-2007....... B+ 1,026,627 1,010,000
------------ ------------
UTILITIES-WATER AND SEWER-0.63%
500,000 Cathay International, Ltd., 13.00% Sr Note
4-15-2008 (e).............................. BB- 480,097 440,000
------------ ------------
WASTE DISPOSAL-0.62%
375,000 Norcal Waste Systems, Inc., 13.50% Increasing
Rate Sr Note 11-15-2005.................... BB- 375,000 431,250
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 68,576,085 65,449,786
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $69,634,785 $65,754,227
------------ ------------
------------ ------------
</TABLE>
35
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
SHORT-TERM INVESTMENTS-4.00%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-2.72%
$1,904,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 1,904,000
------------
DIVERSIFIED FINANCE-1.28%
894,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 894,000
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,798,000
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$72,432,785) (b)........................... $68,552,227
------------
------------
</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 June 30, 1998, the cost of securities for federal income tax purposes
was $72,436,559 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,082,008
Unrealized depreciation..................................... (4,966,340)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $(3,884,332)
- -------------------------------------------------------------------------
</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 8 .70% of total net assets as of June 30, 1998.
(e) Securities sold within the 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:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
1995 $ 2,500 American Telecasting, Inc. (Warrants) $ 5,000
1996 - 1998 3,033,461 Australis Media Ltd. 0/14.00% 5-15-2003 2,277,149
1998 500,000 Cathay International Ltd. 13.00% 4-15-2008 -- 144A 480,097
1996 3,300 Clearnet Communications, Inc. (Warrants) 42,075
1998 1,000,000 Diamond Triumph Auto, 9.25% 4-1-2008 -- 144A 1,019,863
1998 500,000 Diva Systems Corp. 0/12.625% 3-1-2008 -- 144A 283,253
1995 1,000 e.spire Communications, Inc. (Warrants) -- 144A 45,700
1998 500,000 Favorite Brands International, Inc., 10.75% 5-15-2006 -- 144A 500,000
1998 500,000 Flag Limited 8.25% 1-30-2008 -- 144A 500,000
1998 500,000 Fresh Foods, Inc., 10.75% 6-1-2006 -- 144A 500,321
1998 500,000 Global Health Sciences 11.00% 5-1-2008 -- 144A 485,466
1998 500 Highwaymaster Communications, Inc. (Warrants) -- 144A 5,000
1997 500,000 Highwaymaster, Inc., 13.75% 9-15-2005 536,374
1994 250 Hosiery Corp. of America - Class A -- 144A 4,230
1998 500,000 La Petite Acad/LPA Holdings 10.00% 5-15-2008 -- 144A 500,000
1994 - 1996 79,000 Marvel Entertainment Group, Inc. -- 144A 849,041
1998 500,000 Mediacom LLC/Capital 8.50% 4-15-2008 -- 144A 500,000
1998 500,000 Plainwell, Inc., 11.00% 3-1-2008 -- 144A 500,000
1997 2,560 Powertel, Inc. (Warrants) 18,823
1998 250,000 Simonds Industries, Inc., 10.25% 7-1-2008 -- 144A 250,000
1998 500,000 Smithfield Foods, Inc 7.625% 2-15-2008 -- 144A 498,311
1996 1,000 Wireless One, Inc. (Warrants) -- 144A 7,831
</TABLE>
The aggregate value of these securities at June 30, 1998, was $6,685,653,
which represents 9.57% of total net assets.
(f) Securities sold within the 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". Pursuant to guidelines adopted by the Board of
Directors, these issues are determined to be liquid. The aggregate value of
these securities at June 30, 1998, was $6,301,875, which represents 9.02%
of total net assets.
(g) The interest rates disclosed for these securities represents the effective
yield on the date of acquisition.
* Moody's Rating
36
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES
Schedule of Investments
June 30,1998 (Unaudited)
COMMON STOCKS-55.90%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b)(f) Value (c)(f)
-------- ------------ ------------
<C> <S> <C> <C>
AUSTRALIA-0.48%
55,000 CSR Limited -- BUILDING MATERIALS............ $ 188,584 $ 158,727
52,700 Telstra Corp. -- TELECOMMUNICATIONS.......... 73,623 135,118
------------ ------------
262,207 293,845
------------ ------------
BELGIUM-0.48%
2,700 Delhaize-Le Lion
S.A. -- RETAIL-MISCELLANEOUS............... 153,029 188,659
1,846 G.I.B. Holdings
Ltd. -- RETAIL-MISCELLANEOUS............... 91,244 104,182
------------ ------------
244,273 292,841
------------ ------------
BERMUDA-0.53%
10,300 Terra Nova (Burmuda) Holdings -- INSURANCE... 202,333 323,162
------------ ------------
CANADA-0.90%
4,016 Potash Corp. of Saskatchewan -- CHEMICALS.... 324,569 302,579
9,470 Telus Corp. -- TELEPHONE SERVICES............ 199,155 245,025
------------ ------------
523,724 547,604
------------ ------------
FINLAND-0.26%
9,195 Valmet OY -- MACHINERY....................... 119,396 158,543
------------ ------------
FRANCE-2.95%
341 Bongrain S.A. -- FOOD........................ 169,170 171,233
1,683 Elf Aquitaine S.A. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 119,270 236,611
2,300 France Telecom S.A. -- TELECOMMUNICATIONS.... 72,517 158,634
2,250 Groupe Danone -- FOOD........................ 486,777 620,369
9,650 Scor S.A. -- INSURANCE....................... 494,336 612,103
------------ ------------
1,342,070 1,798,950
------------ ------------
GERMANY-2.91%
5,000 Basf AG -- CHEMICALS......................... 110,339 236,842
10,130 Bayer AG -- CHEMICALS........................ 353,720 522,495
660 Karstadt AG -- RETAIL-DEPARTMENT STORES...... 255,306 318,848
5,200 Veba AG -- UTILITIES-ELECTRIC................ 264,108 354,349
250 Viag AG -- ELECTRIC PRODUCTS................. 102,693 168,975
180 Volkswagen AG -- AUTOMOBILE MANUFACTURERS.... 60,621 173,019
------------ ------------
1,146,787 1,774,528
------------ ------------
HONG KONG-0.11%
78,000 Hysan Development, Co., (with
warrants) -- REAL ESTATE................... 120,560 64,489
------------ ------------
IRELAND-1.75%
21,900 Bank of Ireland -- BANKS..................... 272,700 448,713
23,700 Clondalkin Group Units plc -- CONTAINERS AND
PACKAGING.................................. 205,365 198,355
60,388 Green Property plc -- REAL ESTATE............ 194,211 421,176
------------ ------------
672,276 1,068,244
------------ ------------
ITALY-1.25%
74,300 Mediaset S.p.A. -- BROADCASTING.............. 358,531 474,211
59,193 Telecom Italia S.p.A -- TELEPHONE SERVICES... 128,527 286,549
------------ ------------
487,058 760,760
------------ ------------
JAPAN-4.03%
17,000 Fuji Photo Film -- PHOTOGRAPHIC.............. 508,385 591,635
18,000 Fujisawa Pharmaceutical Co. -- DRUGS......... 156,210 168,347
20,000 Hitachi Ltd. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 159,743 130,418
22,000 Kao Corp. -- HOUSEHOLD PRODUCTS.............. 300,249 339,230
20,000 Matsushita Electric Industrial Co.
Ltd. -- ELECTRIC PRODUCTS.................. 308,597 321,360
54,000 Nichido Fire & Marine
Insurance -- INSURANCE..................... 419,179 282,091
22 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 158,519 182,296
2,000 Sony Corp. -- ELECTRONIC COMPONENTS.......... 114,488 172,209
2,000 TDK Corp. -- ELECTRIC-COMPONENTS AND PARTS... 105,885 147,710
</TABLE>
37
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
June 30,1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b)(f) Value (c)(f)
-------- ------------ ------------
<C> <S> <C> <C>
6,000 Yamanouchi Pharmaceutical -- DRUGS........... $ 126,213 $ 124,941
------------ ------------
2,357,468 2,460,237
------------ ------------
NETHERLANDS-3.12%
13,872 ABN-AMRO Holding NV -- BANKS................. 127,746 324,603
1,300 Akzo Nobel NV -- CHEMICALS................... 142,361 288,988
3,650 Benckiser NV Class B -- MISCELLANEOUS........ 123,179 224,469
2,050 Hollandsche Beton Groep NV -- CONSTRUCTION... 31,456 42,729
10,722 ING Groep NV -- INSURANCE.................... 316,828 702,080
3,800 Philips Electronics NV -- ELECTRIC
PRODUCTS................................... 123,910 319,438
------------ ------------
865,480 1,902,307
------------ ------------
NEW ZEALAND-0.27%
74,900 Lion Nathan Ltd. -- BUILDING MATERIALS....... 180,673 166,409
------------ ------------
PORTUGAL-0.28%
4,930 Cimpor Cimentos De Portugal -- BUILDING
MATERIALS.................................. 124,185 173,212
------------ ------------
SPAIN-1.42%
25,500 Iberdrola S.A. -- UTILITIES-ELECTRIC......... 230,401 414,756
9,818 Telefonica S.A. -- TELECOMMUNICATIONS........ 140,631 454,697
------------ ------------
371,032 869,453
------------ ------------
SWEDEN-1.46%
56,900 Nordbanken Holding AB -- BANKS............... 271,659 417,391
33,000 Skandia Forsakrings AB -- INSURANCE.......... 145,049 471,730
------------ ------------
416,708 889,121
------------ ------------
SWITZERLAND-4.61%
92 ABB AG Baden -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 123,082 135,865
145 Ascom Holding AG -- TELECOMMUNICATIONS....... 145,129 267,669
65 Bobst S.A. -- MACHINERY...................... 79,455 119,561
390 Compagnie Financiere Richemont
AG -- TOBACCO.............................. 537,066 510,384
690 Forbo Holding AG -- HOUSEHOLD PRODUCTS....... 288,071 351,187
500 Holderbank Financiere Glaris AG -- BUILDING
MATERIALS.................................. 400,197 636,208
280 Nestle S.A. Registered -- FOOD............... 292,398 599,209
240 SIG Schweizerische Industrie-Gesellschaft
Holding AG -- MACHINERY.................... 146,200 195,411
------------ ------------
2,011,598 2,815,494
------------ ------------
UNITED KINGDOM-7.02%
89,500 Aegis Group plc -- MEDIA..................... 121,651 144,104
14,911 Bass plc -- BEVERAGE......................... 197,252 278,645
92,881 BTR plc -- MISCELLANEOUS..................... 265,434 263,840
12,100 Burmah Castrol plc -- OIL-CRUDE PETROLEUM AND
GAS........................................ 199,890 216,626
12,150 Danka Business Systems plc ADR -- BUSINESS
SERVICES AND SUPPLIES...................... 198,696 143,522
36,232 English China Clays plc -- MINERALS.......... 153,276 125,138
42,000 Imperial Tobacco Group plc -- TOBACCO........ 264,801 308,689
50,000 Matthews (Bernard) plc -- FOOD............... 74,479 98,024
24,200 Peninsular & Orient Steam Navigation -- SHIP
BUILDING, SHIPPING......................... 273,443 349,065
33,800 Premier Farnell plc -- ELECTRONIC
COMPONENTS................................. 257,505 172,006
32,867 Reckitt & Colman plc -- HOUSEHOLD PRODUCTS... 368,722 627,344
38,600 Royal & Sun Alliance Insurance Group
plc -- INSURANCE........................... 331,004 393,831
15,969 Southern Electric
plc -- UTILITIES-ELECTRIC.................. 86,853 147,476
48,700 Wolseley plc -- BUILDING MATERIALS........... 345,728 288,662
110,850 WPP Group plc -- ADVERTISING-PUBLIC
RELATIONS.................................. 431,435 729,640
------------ ------------
3,570,169 4,286,612
------------ ------------
UNITED STATES-22.07%
8,600 Albertson's, Inc. -- RETAIL-GROCERY.......... 299,495 445,588
4,200 Aluminum Company of
America -- METALS-FABRICATING.............. 211,484 276,937
29,400 American Stores Co. -- FOOD.................. 723,781 711,112
3,000 Beazer Homes USA, Inc. (a) -- MANUFACTURED
HOMES...................................... 43,950 77,812
13,500 BJ's Wholesale Club, Inc.
(a) -- RETAIL-MISCELLANEOUS................ 240,005 548,438
</TABLE>
38
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b)(f) Value (c)(f)
-------- ------------ ------------
<C> <S> <C> <C>
7,900 Borg-Warner Automotive, Inc. -- CONSUMER
CYCLICAL................................... $ 338,112 $ 379,694
35,110 Cadiz Land Co., Inc. (a) -- LAND
DEVELOPMENT................................ 302,647 405,959
5,600 Chase Manhattan Corp. -- BANKS............... 374,662 422,800
26,330 Comsat Corp. -- TELECOMMUNICATIONS........... 499,024 745,468
27,150 Data General Corp.
(a) -- COMPUTER-SOFTWARE................... 385,841 405,553
18,300 Egghead, Inc. (a) -- RETAIL-SPECIALTY........ 163,751 154,406
18,200 Enhance Financial Services Group,
Inc. -- INSURANCE.......................... 203,568 614,250
9,750 Finova Group, Inc. -- FINANCE SERVICES....... 205,318 552,094
3,300 General Signal Corp. -- ELECTRICAL
EQUIPMENT.................................. 149,405 118,800
13,000 GenRad, Inc. (a) -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 73,818 256,750
5,600 Georgia-Pac (Georgia-Pac GP) -- FOREST
PRODUCTS................................... 320,108 330,050
2,850 Georgia-Pacific (Timber Grp) -- FOREST
PRODUCTS................................... 46,747 65,728
7,800 Goodrich (B.F.) Co. -- CHEMICALS-SPECIALTY... 335,915 387,075
15,500 Homebase, Inc. (a) -- RETAIL-MISCELLANEOUS... 75,381 123,031
25,900 Houghton Mifflin Co. -- PUBLISHING........... 643,633 822,325
7,200 IBP, Inc. -- FOOD............................ 167,646 130,500
39,300 Intelidata Technologies Corp.
(a) -- TELECOMMUNICATIONS.................. 311,431 38,072
5,900 MBIA, Inc. -- INSURANCE...................... 232,045 441,762
6,300 Mellon Bank Corp. -- BANKS................... 134,470 438,637
7,953 NCR Corp. -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 235,095 258,472
8,960 Noble Drilling Corp. (a) -- OIL-OFFSHORE
DRILLING................................... 256,745 215,600
11,180 Ocean Energy, Inc. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 253,029 218,709
19,000 Penncorp Financial Group, Inc. -- FINANCE
SERVICES................................... 626,598 389,500
14,800 Pharmacia and UpJohn, Inc. -- DRUGS.......... 501,873 682,650
27,600 Philip Morris Companies, Inc. -- TOBACCO..... 1,041,905 1,086,750
3,600 Tecumseh Products Co. Class A -- MACHINERY... 193,800 190,125
8,000 Tenneco, Inc. -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 353,119 304,500
12,050 Tupperware Corp. (a) -- HOUSEHOLD PRODUCTS... 316,560 338,906
5,500 Unicom Corp. -- UTILITIES-ELECTRIC........... 203,251 192,844
5,400 United Dominion Industries
Ltd. -- MACHINERY.......................... 135,070 180,225
19,400 UST Corp. -- BANKS........................... 290,001 514,100
15,200 WorldCorp, Inc. (a) -- AIRLINES.............. 138,291 4,750
------------ ------------
11,027,574 13,469,972
------------ ------------
TOTAL COMMON STOCKS.......................... $26,045,571 $34,115,783
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-0.28%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b)(f) Value (c)(f)
----- ------------ ------------
<C> <S> <C> <C>
GERMANY-0.28%
250 Volkswagen AG -- AUTOMOBILE MANUFACTURERS.... $ 53,169 $ 170,360
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-22.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b)(f) Value (c)(f)
--------------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
AUSTRALIA-1.40%
$ 400,000 Australian Government (Australian Dollar),
10.00% 2-15-2006........................... AAA $ 339,607 $ 315,426
600,000 Australian Government (Australian Dollar),
12.00% 11-15-2001.......................... AAA 421,411 447,377
120,000 Australian Government (Australian Dollar),
8.75% 8-15-2008............................ AAA 98,360 92,140
------------ ------------
859,378 854,943
------------ ------------
</TABLE>
39
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
June 30,1998 (Unaudited)
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b)(f) Value (c)(f)
--------------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
CANADA-1.62%
$ 180,000 Canadian Government (Canadian Dollar), 8.00%
6-1-2023................................... AAA $ 163,635 $ 163,219
1,010,000 Canadian Government (Canadian Dollar), 8.75%
12-1-2005.................................. AAA 846,698 827,896
------------ ------------
1,010,333 991,115
------------ ------------
DENMARK-1.84%
3,650,000 Kingdom of Denmark (Danish Krone), 7.00%
12-15-2004................................. AAA 593,584 594,495
600,000 Kingdom of Denmark (Danish Krone), 8.00%
11-15-2001................................. AAA 105,928 96,632
2,700,000 Kingdom of Denmark (Danish Krone), 9.00%
11-15-2000................................. AAA 437,227 432,577
------------ ------------
1,136,739 1,123,704
------------ ------------
GERMANY-8.22%
1,700,000 Bundesrepublik Deutschland (German
Deutschemark), 6.00% 5-21-2001............. NR 1,026,727 1,023,402
1,300,000 Bundesrepublik Deutschland (German
Deutschemark), 8.375% 5-21-2001............ Aaa* 813,187 801,321
1,550,000 German Government (German Deutschemark),
6.25% 1-4-2024............................. Aaa* 944,572 965,556
900,000 German Government (German Deutschemark),
6.50% 7-15-2003............................ Aaa* 562,570 544,135
980,000 German Unity Fund (German Deutschemark),
8.00% 1-21-2002............................ NR 710,330 608,176
1,750,000 Germany Bundesrepublik (German Deutschemark),
6.50% 10-14-2005........................... NR 1,062,947 1,076,953
------------ ------------
5,120,333 5,019,543
------------ ------------
ITALY-2.56%
790,000,000 Italian Government (Italian Lira), 10.00%
8-1-2003................................... AAA 526,315 549,717
1,400,000,000 Italian Government BTP (Italian Lira), 9.50%
Bond 2-1-2006.............................. AAA 961,807 1,015,331
------------ ------------
1,488,122 1,565,048
------------ ------------
JAPAN-1.17%
27,000,000 Int'l Bank Reconstruction & Development
(Japanese Yen), 4.75% 12-20-2004........... AAA 238,713 238,048
56,000,000 Japan Development Bank (Japanese Yen), 6.50%
9-20-2001.................................. AAA 608,670 474,987
------------ ------------
847,383 713,035
------------ ------------
MALAYSIA-0.15%
100,000 Petroliam Nasional Berhd (U.S. Dollar),
7.125% Note 10-18-2006 (e)................. A- 93,710 88,027
------------ ------------
SWEDEN-1.89%
4,500,000 Swedish Government (Swedish Krona), 6.00%
2-9-2005................................... Aa1* 590,151 602,153
3,300,000 Swedish Government (Swedish Krona), 9.00%
4-20-2009.................................. Aa1* 523,353 549,143
------------ ------------
1,113,504 1,151,296
------------ ------------
UNITED KINGDOM-2.96%
920,000 United Kingdom Treasury (British Pound),
8.50% 7-16-2007............................ Aaa* 1,768,352 1,803,648
------------ ------------
UNITED STATES-0.33%
100,000 Met Life Insurance, 7.45% Note 11-1-2023
(e)........................................ A+ 101,379 100,325
100,000 Nationwide Mutual Insurance, 7.50% Note
2-15-2024 (e).............................. A+ 101,949 102,688
------------ ------------
203,328 203,013
------------ ------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $13,641,182 $13,513,372
------------ ------------
------------ ------------
</TABLE>
U.S. GOVERNMENT SECURITIES-14.46%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b)(f) Value (c)(f)
------------ ------------ ------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-1.28%
NOTES:
$50,000,000 2.00% 1999 (Japanese Yen).................... $ 354,557 $ 367,700
400,000 6.375% 2007.................................. 258,070 255,293
250,000 6.50% 2002................................... 184,719 160,274
------------ ------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 797,346 783,267
------------ ------------
</TABLE>
40
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b)(f) Value (c)(f)
------------ ------------ ------------
<C> <S> <C> <C>
U.S. TREASURY SECURITIES-13.18%
BONDS:
$ 900,000 6.25% 2023................................... $ 945,318 $ 963,282
850,000 8.125% 2019.................................. 1,052,717 1,097,031
------------ ------------
1,998,035 2,060,313
------------ ------------
NOTES:
700,000 3.625% 2008.................................. 695,717 692,125
350,000 5.625% 2001.................................. 342,454 350,875
1,600,000 5.75% 2003................................... 1,534,535 1,617,000
900,000 7.25% 2004................................... 936,701 976,500
850,000 7.50% 2005................................... 933,991 941,110
1,250,000 7.875% 2004.................................. 1,351,211 1,403,906
------------ ------------
5,794,609 5,981,516
------------ ------------
TOTAL U.S. TREASURY SECURITIES............... 7,792,644 8,091,829
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 8,589,990 8,825,096
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $48,329,912 $56,624,611
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-5.33%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)(f)
------------- ------------
<C> <S> <C>
BANKS-5.33%
$ 157,712,022 Sumitomo Bank Tokyo Time Deposit (Japanese
Yen), 0.46% 7-2-1998....................... $ 1,136,377
2,115,656 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ 2,115,656
------------
TOTAL SHORT-TERM INVESTMENTS................. 3,252,033
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$51,562,192) (b)........................... $59,876,644
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $51,562,192 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $10,108,721
Unrealized depreciation..................................... (1,794,269)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 8,314,452
- -------------------------------------------------------------------------
</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 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.
<TABLE>
<CAPTION>
PERIOD
ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
1998 $ 100,000 Met Life Insurance, 7.45% 11-1-2023 $ 101,379
1998 100,000 Nationwide Mutual Insurance, 7.50% 101,949
2-15-2024
1998 100,000 Petroliam Nasional Berhd, 7.125% 93,710
10-18-2006
The aggregate value of these securities at June 30, 1998, was $291,040, which represents .48% of total net assets.
</TABLE>
(f) Cost and market value are stated in U.S. dollars; principal amount is
stated in the currency indicated.
* Moody's Rating
41
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-59.78%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.75%
67,600 Interpublic Group of Companies, Inc. $ 3,196,787 $ 4,102,475
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.58%
500 Highwaymaster Communications, Inc. (Warrants)
(a)(e)..................................... 9,093 3,750
46,000 Magna International, Inc. Class A............ 2,185,416 3,156,750
------------- -------------
2,194,509 3,160,500
------------- -------------
BANKS-1.96%
58,300 Banc One Corp................................ 2,049,927 3,253,869
67,000 Mellon Bank Corp............................. 4,502,735 4,664,875
73,000 Norwest Corp................................. 2,700,804 2,728,375
------------- -------------
9,253,466 10,647,119
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.01%
84,000 Amgen, Inc. (a).............................. 4,837,813 5,491,500
------------- -------------
BROADCASTING-0.55%
51,000 Viacom, Inc. Class B (a)..................... 2,265,723 2,970,750
------------- -------------
BUILDING MATERIALS-1.08%
135,000 Dal-Tile International, Inc. (a)............. 1,147,500 1,324,687
75,000 Masco Corp................................... 4,035,463 4,537,500
------------- -------------
5,182,963 5,862,187
------------- -------------
BUSINESS SERVICES AND SUPPLIES-2.09%
55,000 Cognizant Corp............................... 2,362,225 3,465,000
139,950 Fiserv, Inc. (a)............................. 3,711,764 5,943,502
45,000 Ingram Micro, Inc. Class A (a)............... 893,400 1,991,250
------------- -------------
6,967,389 11,399,752
------------- -------------
CHEMICALS-0.88%
86,000 Monsanto Co.................................. 3,665,635 4,805,250
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.74%
27,000 Ascend Communications, Inc. (a).............. 1,239,437 1,338,187
38,000 Cisco Systems, Inc. (a)...................... 300,703 3,498,375
165,000 Unisys Corp. (a)............................. 3,893,389 4,661,250
------------- -------------
5,433,529 9,497,812
------------- -------------
COMPUTER-SOFTWARE-4.69%
40,000 America Online, Inc. (a)..................... 1,990,221 4,240,000
52,800 Computer Sciences Corp. (a).................. 2,544,012 3,379,200
36,000 EMC Corp. (a)................................ 1,265,400 1,613,250
75,000 Microsoft Corp. (a).......................... 2,318,035 8,128,125
135,700 Novell, Inc. (a)............................. 1,797,604 1,730,175
133,000 Sterling Commerce, Inc. (a).................. 2,319,294 6,450,500
------------- -------------
12,234,566 25,541,250
------------- -------------
DRUGS-4.32%
74,000 Abbott Laboratories.......................... 1,681,465 3,024,750
88,000 Forest Laboratories, Inc. (a)................ 1,602,562 3,146,000
60,000 Lilly (Eli) & Co., Inc....................... 1,915,257 3,963,750
133,000 Mylan Laboratories, Inc...................... 2,422,610 3,998,312
135,000 Warner-Lambert Co............................ 5,358,265 9,365,625
------------- -------------
12,980,159 23,498,437
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT-0.87%
52,000 General Electric Co.......................... $ 2,339,305 $ 4,732,000
------------- -------------
ELECTRONIC-COMMUNICATION SECURITY-0.57%
96,000 Bay Networks, Inc. (a)....................... 2,968,147 3,096,000
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.44%
46,000 Motorola, Inc................................ 2,629,914 2,417,875
------------- -------------
FINANCE SERVICES-3.25%
53,000 American Express Co.......................... 5,196,149 6,042,000
95,000 Fannie Mae................................... 2,957,225 5,771,250
90,000 MBNA Corp.................................... 1,155,859 2,970,000
51,000 MGIC Investment Corp......................... 1,724,992 2,910,187
------------- -------------
11,034,225 17,693,437
------------- -------------
FOOD-1.99%
80,000 Archer-Daniels-Midland Co.................... 1,694,800 1,550,000
135,000 Groupe Danone ADR............................ 4,185,000 7,425,000
52,000 Nabisco Holdings Corp. Class A............... 2,485,639 1,875,250
------------- -------------
8,365,439 10,850,250
------------- -------------
HEALTH CARE SERVICES-0.67%
39,000 Cardinal Health, Inc......................... 1,848,080 3,656,250
------------- -------------
HOTEL AND GAMING-0.84%
72,500 Mirage Resorts, Inc. (a)..................... 826,500 1,545,156
67,000 Sun International Hotels Ltd. (a)............ 3,206,317 3,048,500
------------- -------------
4,032,817 4,593,656
------------- -------------
HOUSEHOLD PRODUCTS-0.30%
18,000 Procter & Gamble Co.......................... 1,614,780 1,639,125
------------- -------------
INSURANCE-3.35%
75,200 American International Group, Inc............ 5,256,265 10,979,200
127,400 Hartford Life, Inc. Class A.................. 4,363,467 7,253,838
------------- -------------
9,619,732 18,233,038
------------- -------------
LEISURE TIME-AMUSEMENTS-0.23%
123,300 Royal Olympic Cruise Lines, Inc. (a)......... 1,888,801 1,233,000
------------- -------------
MACHINERY-0.51%
80,000 McDermott International, Inc................. 3,195,497 2,755,000
------------- -------------
MACHINERY-TOOLS-0.18%
27,000 Danaher Corp................................. 971,740 990,563
------------- -------------
MEDICAL TECHNOLOGY-1.16%
99,400 Medtronic, Inc. (with rights)................ 2,020,745 6,336,750
------------- -------------
NATURAL GAS TRANSMISSIONS-1.14%
62,000 Enron Corp................................... 3,145,285 3,351,875
84,000 Williams Companies, Inc...................... 2,060,232 2,835,000
------------- -------------
5,205,517 6,186,875
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-0.26%
50,000 Compaq Computer Corp......................... 1,628,000 1,418,750
------------- -------------
OIL AND GAS FIELD SERVICES-2.58%
105,000 Camco International, Inc..................... 5,817,132 8,176,875
86,000 Schlumberger Ltd............................. 3,979,114 5,874,875
------------- -------------
9,796,246 14,051,750
------------- -------------
</TABLE>
42
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
OIL-CRUDE PETROLEUM AND GAS-1.99%
54,000 Exxon Corp................................... $ 3,942,007 $ 3,850,875
100,400 Nuevo Energy Co. (a)......................... 3,991,559 3,225,350
217,000 Santa Fe Energy Resources, Inc. (a).......... 1,949,146 2,332,750
40,000 Triton Energy Ltd. (a)....................... 1,613,644 1,427,500
------------- -------------
11,496,356 10,836,475
------------- -------------
PAPER-0.75%
150,000 St. Joe Corp................................. 5,100,000 4,106,250
------------- -------------
PERSONAL SERVICES-0.29%
37,000 Service Corp. International.................. 1,426,010 1,586,375
------------- -------------
PUBLISHING-2.13%
53,300 New York Times Co............................ 3,760,848 4,224,025
86,000 Time Warner, Inc............................. 4,513,824 7,347,625
------------- -------------
8,274,672 11,571,650
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.14%
112,500 Tranz Rail Holdings Ltd. ADR................. 2,025,000 745,313
------------- -------------
RESTAURANTS AND FRANCHISING-0.78%
61,200 McDonald's Corp.............................. 3,697,131 4,222,800
------------- -------------
RETAIL-DEPARTMENT STORES-2.38%
150,000 Kohl's Corp. (a)............................. 1,464,971 7,781,250
85,000 Wal-Mart Stores, Inc......................... 4,449,725 5,163,750
------------- -------------
5,914,696 12,945,000
------------- -------------
RETAIL-MISCELLANEOUS-1.64%
270,000 Kmart Corp. (a).............................. 4,237,234 5,197,500
77,500 Tiffany & Co................................. 3,798,317 3,720,000
------------- -------------
8,035,551 8,917,500
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-2.91%
45,900 AutoZone, Inc. (a)........................... $ 1,603,257 $ 1,465,931
120,000 Costco Companies, Inc. (a)................... 1,946,859 7,567,500
82,000 Home Depot, Inc.............................. 2,771,544 6,811,125
------------- -------------
6,321,660 15,844,556
------------- -------------
RETAIL-VARIETY AND VARIETY MAIL ORDER-0.71%
92,900 Walgreen Co.................................. 3,034,504 3,837,931
------------- -------------
TELECOMMUNICATIONS-0.02%
1,000 Hyperion Telecom (Warrants) (a)(e)........... 4,022 100,000
------------- -------------
TELECOMMUNICATION EQUIPMENT-0.33%
25,000 Tellabs, Inc. (a)............................ 505,150 1,790,625
------------- -------------
TELEPHONE SERVICES-3.57%
103,200 AirTouch Communications, Inc. (a)............ 2,813,833 6,030,750
120,100 Frontier Corp................................ 2,973,906 3,783,150
61,000 MCI Communications Corp...................... 2,461,875 3,545,625
126,000 WorldCom, Inc. (a)........................... 1,721,974 6,103,125
------------- -------------
9,971,588 19,462,650
------------- -------------
TOBACCO-0.95%
132,000 Philip Morris Companies, Inc................. 4,750,716 5,197,500
------------- -------------
TOYS-0.64%
82,000 Mattel, Inc.................................. 1,586,023 3,469,625
------------- -------------
UTILITIES-ELECTRIC-2.00%
135,000 AES Corp. (a)................................ 3,435,481 7,095,938
176,000 Endesa S.A. ADR.............................. 3,963,168 3,806,000
------------- -------------
7,398,649 10,901,938
------------- -------------
WASTE DISPOSAL-0.56%
62,000 USA Waste Services, Inc. (a)................. 2,286,796 3,061,250
------------- -------------
TOTAL COMMON STOCKS.......................... $ 219,200,048 $ 325,458,789
------------- -------------
------------- -------------
</TABLE>
ASSET BACKED SECURITIES-7.97%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-4.09%
$1,715,756 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (e).......... AAA $ 1,728,381 $ 1,782,893
2,500,000 First Union Lehman Brothers Commercial
Mortgage, 7.30% Ser 1997-C1 Class A2
12-18-2006................................. Aaa* 2,524,061 2,653,750
2,510,000 GMAC Commercial Mortgage Securities, Inc.,
7.09% Ser 1997-C1 Class E 12-15-2010....... A 2,522,004 2,539,216
2,517,080 GS Mortgage Securities Corp. II Protective
Life, 7.02% Ser 1996-PL Class A1
3-1-2026................................... Aaa* 2,475,349 2,583,354
1,192,599 J.P. Morgan Commercial Mortgage Finance
Corp., 6.47% Ser 1996-C2 Class A
11-25-2027................................. AAA 1,201,039 1,204,692
860,000 J.P. Morgan Commercial Mortgage Finance
Corp., 7.47% Ser 1997-C4 Class B
12-26-2028................................. Aa2* 866,376 917,244
1,152,716 Merrill Lynch Mortgage Investors, Inc., 6.76%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 1,163,866 1,175,402
682,447 Merrill Lynch Mortgage Investors, Inc., 6.82%
Variable Rate Ser 1995-C2 Class A1
6-15-2021.................................. Aaa* 692,388 697,646
1,600,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996-C1 Class B 4-25-2028.............. AA 1,602,453 1,692,880
1,200,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 1,210,818 1,292,250
1,000,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,008,766 1,086,010
1,870,000 Nationslink Funding Corp., 7.52% Ser 1996-1
Class A2 7-20-2005......................... AAA 1,871,938 1,981,041
2,534,180 Nationslink Funding Corp., 7.53% Ser 1996-1
Class A1 9-20-2002......................... AAA 2,544,539 2,648,649
------------- -------------
21,411,978 22,255,027
------------- -------------
</TABLE>
43
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
ASSET BACKED SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
HOUSING-0.71%
$ 830,447 Green Tree, Recreational, Equipment &
Consumer Trust, 6.71% Ser 1998-A Class A1H
5-15-2029.................................. AAA $ 826,953 $ 832,523
500,000 Money Store (The) Home Improvement Trust,
7.41% Ser 1997-1 Class M1 5-15-2017........ AA 501,985 521,957
2,500,000 Money Store (The) Residential Trust, 7.09%
1997-I-M1 7-15-2016........................ AA 2,499,617 2,521,875
------------- -------------
3,828,555 3,876,355
------------- -------------
MANUFACTURED HOMES-1.07%
1,500,000 Green Tree Financial Corp., 7.54% Ser 1997-2
Class M1 4-15-2028......................... Aa3* 1,542,767 1,572,656
4,000,000 Green Tree Financial Corp., 7.65% Ser 1994-1
Class A5 4-15-2019......................... Aa2* 4,070,313 4,231,400
------------- -------------
5,613,080 5,804,056
------------- -------------
MISCELLANEOUS-0.06%
349,518 Fifth Third Auto Grantor Trust, 6.70% Ser
1996-B Class B 3-15-2002................... A 349,342 351,692
------------- -------------
MULTI-FAMILY LOANS-1.61%
1,500,000 DLJ Mortgage Acceptance Corp., 7.14%
Multifamily Mtg Pass Thru Certificate Ser
1997-CF2 Class B1 10-15-2007 (e)........... BBB 1,514,453 1,520,156
4,851,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-MF4 Class A2 4-18-2001................ A 4,910,483 5,006,135
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-MF12 Class B1 9-18-2003............... NR 1,473,750 1,553,955
846,172 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.76% Ser 1996-1 Class
A Principal Only 1-1-2033 (f)(h)........... Baa3* 635,366 670,856
------------- -------------
8,534,052 8,751,102
------------- -------------
WHOLE LOAN RESIDENTIAL-0.43%
1,402,363 Blackrock Capital Funding L.L.C., 7.75%
97-R1-Cl Class A1 3-1-2027 (e)............. Aaa* 1,415,143 1,415,948
923,825 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 923,250 956,759
------------- -------------
2,338,393 2,372,707
------------- -------------
TOTAL ASSET BACKED SECURITIES................ $ 42,075,400 $ 43,410,939
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-6.68%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.31%
$1,500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB+ $ 1,508,447 $ 1,669,996
------------- -------------
AIR FREIGHT-0.30%
1,487,260 Federal Express Corp., 7.50% 1997-A Pass Thru
Certificate 1-15-2018...................... AAA 1,487,260 1,622,913
------------- -------------
BANKS-0.84%
1,500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(f)........................................ AAA 1,497,244 1,637,898
1,350,000 CoreStates Capital Corp., 6.75% Medium Term
Note 11-15-2006............................ A 1,359,480 1,401,901
1,500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- 1,494,170 1,546,570
------------- -------------
4,350,894 4,586,369
------------- -------------
BROKERAGE AND INVESTMENT-0.72%
1,500,000 Bear Stearns Capital Trust I, 7.00% Variable
Rate Bond 1-15-2027........................ BBB 1,499,143 1,529,854
2,250,000 Lehman Brothers Holdings, 7.375% Sr Note
5-15-2004.................................. A 2,242,280 2,366,485
------------- -------------
3,741,423 3,896,339
------------- -------------
CHEMICALS-0.29%
1,500,000 Lyondell Petrochemical, 7.55% Deb
2-15-2026.................................. BBB- 1,414,029 1,594,506
------------- -------------
CONSUMER FINANCE-0.18%
1,000,000 Beneficial Corp., 6.33% Medium Term Note
12-18-2000................................. A 993,397 1,004,974
------------- -------------
</TABLE>
44
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
ELECTRONIC-MISCELLANEOUS-0.09%
$ 500,000 Sony Corp., 6.125% Bond 3-4-2003............. A+ $ 498,999 $ 501,058
------------- -------------
ENERGY-0.16%
750,000 NGC Corp. Capital Trust, 8.32% 6-1-2027...... BBB 750,000 877,921
------------- -------------
FINANCE COMPANIES-0.23%
1,250,000 Homeside Lending, Inc., 6.875% Medium Term
Note 6-30-2002............................. A+ 1,249,659 1,278,993
------------- -------------
FOREIGN-GOVERNMENT-0.19%
1,000,000 Poland (Republic of), 7.125% Yankee Bond
7-1-2004................................... BBB- 995,489 1,028,750
------------- -------------
FOREIGN-GOVERNMENT AGENCIES-0.24%
1,250,000 Quebec (Province of), 7.50% Yankee Bond
7-15-2002.................................. A+ 1,282,627 1,311,413
------------- -------------
FOREST PRODUCTS-0.19%
1,000,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 998,942 1,009,837
------------- -------------
HOUSING-0.23%
1,250,000 Masco Corp., 6.625% 4-15-2018................ A- 1,248,246 1,266,595
------------- -------------
INDUSTRIAL-0.23%
1,250,000 Tyco International Group, 6.375% 6-15-2005... A- 1,244,922 1,252,363
------------- -------------
MEDIA-0.15%
750,000 Belo (A.H.) Corp., 7.25% Note 9-15-2027...... BBB- 745,608 811,001
------------- -------------
MISCELLANEOUS-0.05%
195,000 New York (City of), 10.00% General Obligation
Ser D 8-1-2005............................. BBB+ 192,785 218,020
55,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005
(Prerefunded 8-1-2001 @103)................ BBB+ 54,375 62,488
------------- -------------
247,160 280,508
------------- -------------
NATURAL GAS TRANSMISSIONS-0.35%
1,250,000 Tennessee Gas Pipeline, 7.50% Bond
4-1-2017................................... BBB 1,230,601 1,364,996
500,000 Trans-Canada Pipelines Ltd., 7.06% Note
10-14-2025................................. A- 500,000 524,579
------------- -------------
1,730,601 1,889,575
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-0.19%
1,000,000 Saga Petroleum ASA, 7.25% Yankee Bond
9-23-2027.................................. BBB+ 990,065 1,035,002
------------- -------------
OIL-EQUIPMENT WELLS AND SERVICES-0.19%
1,000,000 Petroleum Geo-Services, 7.125% Sr Note
3-30-2028.................................. BBB 997,107 1,033,281
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.10%
500,000 CSX Corp., 7.90% Deb 5-1-2017................ BBB 499,717 570,174
------------- -------------
REAL ESTATE-INVESTMENT TRUST-0.29%
1,500,000 Meditrust, 7.82% Note 9-10-2026.............. BBB- 1,569,564 1,558,350
------------- -------------
SUPRANATIONAL-0.24%
1,250,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 1,249,416 1,282,129
------------- -------------
TELECOMMUNICATIONS-0.25%
1,250,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 1,247,606 1,339,348
------------- -------------
TELEPHONE SERVICES-0.38%
1,000,000 Century Telephone Enterprises, Inc., 6.15%
1-15-2005.................................. BBB+ 998,562 985,016
1,000,000 GTE Corp., 7.51% Note 4-1-2009............... A 992,428 1,090,092
------------- -------------
1,990,990 2,075,108
------------- -------------
UTILITIES-ELECTRIC-0.29%
1,500,000 Texas Utilities Electric Capital V, 8.175%
1-30-2037.................................. BBB 1,500,000 1,599,078
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 34,532,168 $ 36,375,581
------------- -------------
------------- -------------
</TABLE>
45
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
CORPORATE BONDS-NON-INVESTMENT GRADE-5.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.07%
$ 500,000 Highwaymaster, Inc., 13.75% Sr Note 9-15-2005
(e)........................................ NR $ 519,725 $ 375,000
------------- -------------
BROADCASTING-0.20%
1,000,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B 1,000,000 1,072,500
------------- -------------
CABLE TELEVISION-0.97%
1,000,000 Adelphia Communications, Inc., 8.375% Sr Note
2-1-2008................................... B 1,007,356 995,000
1,000,000 Adelphia Communications, Inc., 9.25% Sr Note
10-1-2002.................................. B2* 1,018,244 1,037,500
1,008,177 Australis Media Ltd., 16.20% Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (a)(e)(g)............... D 802,731 50,409
1,000,000 CSC Holdings, Inc., 10.50% 5-15-2016......... BB- 1,014,585 1,167,500
750,000 CSC Holdings, Inc., 8.125% Sr Deb
8-15-2009.................................. BB+ 770,888 800,625
1,000,000 Lenfest Communications, 8.25% Sr Note
2-15-2008 (f).............................. BB- 997,335 1,040,000
1,000,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 981,045 187,500
------------- -------------
6,592,184 5,278,534
------------- -------------
COMPUTER-HARDWARE-0.21%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,078,757 1,153,750
------------- -------------
ENERGY-0.32%
1,750,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 1,750,000 1,715,000
------------- -------------
ENTERTAINMENT-0.19%
1,000,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 1,008,233 1,035,000
------------- -------------
FOREIGN-GOVERNMENT-0.47%
1,000,000 Korea (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ 986,644 907,516
1,750,000 Philippines (Republic of), 8.875% Sr Note
4-15-2008.................................. BB+ 1,740,944 1,671,250
------------- -------------
2,727,588 2,578,766
------------- -------------
HOUSING-0.30%
1,500,000 MDC Holdings, Inc., 11.125% Note
12-15-2003................................. BB- 1,582,489 1,646,250
------------- -------------
RESTAURANTS AND FRANCHISING-0.19%
1,000,000 Tricon Global Restaurant, 7.65% Sr Note
5-15-2008.................................. BB 997,773 1,015,742
------------- -------------
STEEL AND IRON-0.20%
1,000,000 Weirton Steel Corp., 11.375% Sr Note
7-1-2004................................... B 1,030,818 1,067,500
------------- -------------
TELECOMMUNICATIONS-1.65%
1,000,000 Hyperion Telecommunication, 12.25% Sr Note
9-1-2004................................... B 1,094,508 1,077,500
750,000 Intermedia Communications, 8.50% Sr Note
1-15-2008.................................. B 750,000 750,000
1,000,000 Iridium LLC/Capital Corp., 14.00% Sr Note
7-15-2005.................................. B- 1,118,642 1,112,500
750,000 Microcell Telecommunications, Inc., 11.80%
Disc Note 6-1-2006 (Zero coupon until
12-1-2001, thereafter 14.00%) (g).......... NR 523,805 556,875
1,000,000 Nextel Communications, Inc., 9.58% Sr Disc
Note 9-15-2007 (Zero coupon until
9-15-2002, thereafter 10.65%) (g).......... CCC+ 661,701 672,500
500,000 Omnipoint Corp., 11.625% Sr Note 8-15-2006... CCC+ 488,828 526,250
750,000 Omnipoint Corp., 11.625% Sr Note Ser A
8-15-2006.................................. CCC+ 741,637 789,375
1,000,000 Phonetel Technologies, Inc., 12.00% Sr Note
12-15-2006................................. CCC 1,022,058 1,000,000
2,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 2,122,770 2,075,000
500,000 Winstar Communications, Inc., 9.83% Sr Disc
Note 10-15-2005 (Zero coupon until
10-15-2000, thereafter 14.00%) (g)......... CCC+ 424,977 416,250
------------- -------------
8,948,926 8,976,250
------------- -------------
TEXTILE MANUFACTURING-0.20%
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,050,168 1,080,000
------------- -------------
TRANSPORTATION-0.20%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,077,650 1,110,000
------------- -------------
UTILITIES-ELECTRIC-0.18%
1,000,000 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BB- 994,283 994,280
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 30,358,594 $ 29,098,572
------------- -------------
------------- -------------
</TABLE>
46
<PAGE>
U.S. GOVERNMENT SECURITIES-15.88%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 3.82%
MORTGAGE BACKED SECURITIES:
$ 1,664,574 6.00% 2013................................... $ 1,639,819 $ 1,645,839
749,075 6.30% 2008................................... 750,061 760,311
9,928,182 6.50% 2028................................... 9,793,663 9,884,676
5,269,538 7.00% 2011-2028 (i).......................... 5,285,017 5,349,582
1,980,375 7.50% 2022-2027.............................. 2,044,059 2,031,108
1,016,405 8.00% 2025................................... 1,031,810 1,051,344
47,826 9.00% 2021................................... 47,722 50,487
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 20,592,151 20,773,347
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
1.12%
MORTGAGE BACKED SECURITIES:
2,717,545 7.50% 2023................................... 2,589,311 2,791,435
3,028,155 9.00% 2022-2023.............................. 3,126,570 3,240,126
81,495 9.50% 2020................................... 81,291 87,989
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 5,797,172 6,119,550
------------- -------------
U.S. TREASURY SECURITIES - 10.94%
BONDS:
11,200,000 5.92% 2009 (g)............................... 5,732,605 5,923,792
3,300,000 6.07% 2019 (g)............................... 946,366 1,016,862
7,350,000 6.10% 2021 (g)............................... 1,786,565 1,936,064
350,000 6.375% 2027.................................. 371,271 384,453
------------- -------------
8,836,807 9,261,171
------------- -------------
NOTES:
1,250,000 5.50% 2000................................... 1,248,351 1,249,610
5,100,000 5.625% 1999.................................. 5,097,027 5,104,784
8,800,000 5.75% 2000-2003.............................. 8,857,035 8,874,941
7,650,000 6.00% 1999................................... 7,643,845 7,685,863
3,490,000 6.125% 2000-2001............................. 3,505,177 3,542,815
1,655,000 6.25% 2002................................... 1,693,346 1,695,859
15,535,000 6.375% 2000.................................. 15,762,764 15,768,025
5,935,000 6.625% 2007.................................. 6,328,938 6,378,273
------------- -------------
50,136,483 50,300,170
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 58,973,290 59,561,341
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 85,362,613 86,454,238
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 411,528,823 $ 520,798,119
------------- -------------
------------- -------------
</TABLE>
47
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
SHORT-TERM INVESTMENTS-5.32%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C> <C>
BANKS-3.59%
$19,547,000 U.S. Bank N.A. Money Market Variable Rate Time
Deposit, Current rate -- 5.42%................ $ 19,547,000
--------------
DIVERSIFIED FINANCE-0.74%
4,035,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%......................... 4,035,000
--------------
U.S. GOVERNMENT AGENCY-0.99%
5,400,000 Federal Home Loan Mortgage Corp., 5.53%,
7-8-1998...................................... 5,395,113
--------------
TOTAL SHORT-TERM INVESTMENTS.................... 28,977,113
--------------
--------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$440,505,936) (b)............................. $ 549,775,232
--------------
--------------
</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 June 30, 1998, the cost of securities for federal income tax purposes
was $440,508,968 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $117,767,376
Unrealized depreciation..................................... (8,501,112)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $109,266,264
- -------------------------------------------------------------------------
</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 6.07% of net assets as of June 30, 1998.
(e) Securities sold within the 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:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
1997 $1,008,177 Australis Media Ltd., 16.20% Sr Sub Disc Note 5-15-2003 $ 802,731
(Zero coupon through 5-15-2000, thereafter 15.75%)
1997 1,402,363 Blackrock Capital Funding L.L.C., 7.75% 97-R1-C1 Class 1,415,143
A1 3-1-2027
1997 1,500,000 DLJ Mortgage Acceptance Corp., 7.14% Multifamily Mtg 1,514,453
Pass thru Certificate Ser 1997-CF2 Class B1 10-15-2007
1996 1,715,756 DLJ Mortgage Acceptance Corp., 7.28% Ser 1996-CF1 1,728,381
Class A-1A 3-13-2028
1997 500,000 Highwaymaster, Inc. 13.75% Sr Sub Note 9-15-2005 519,725
1997 500 Highwaymaster Communications, Inc. (Warrants) 9,093
1996 1,000 Hyperion Telecom (Warrants) 4,022
The aggregate value of these securities at June 30, 1998, was $5,248,156, which represents .96% of total net assets.
</TABLE>
(f) Securities sold within the 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". Pursuant to guidelines adopted by the Board of
Directors, these issues are deemed to be liquid. The aggregate value of
these securities at June 30, 1998, was $3,348,754, which represents .62% of
total net assets.
(g) The interest rate disclosed for these securities represents the effective
yield on the date of acquisition.
(h) The interest rate disclosed for principal only strips represents effective
yield at June 30, 1998, based upon future cash flows. This security has
been identified by portfolio management as a liquid security. The aggregate
value of this security at June 30, 1998, was $670,856, which represents
.12% of total net assets.
(i) The cost of securities purchased on a when-issued basis at June 30, 1998,
was $3,722,741.
* Moody's Rating
48
<PAGE>
FORTIS SERIES FUND, INC.
VALUE SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-90.03%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-2.41%
34,342 Raytheon Co. Class A......................... $ 1,863,195 $ 1,978,958
------------ ------------
AUTOMOBILE MANUFACTURERS-1.52%
18,700 General Motors Corp.......................... 1,137,519 1,249,394
------------ ------------
BANKS-10.47%
27,900 Bank of New York Company, Inc................ 1,258,745 1,693,181
20,800 Chase Manhattan Corp......................... 1,075,677 1,570,400
16,500 First Chicago NBD Corp....................... 1,438,480 1,462,312
33,800 Republic New York Corp....................... 1,973,738 2,127,287
40,300 U.S. Bancorp................................. 1,244,385 1,732,900
------------ ------------
6,991,025 8,586,080
------------ ------------
BROADCASTING-0.93%
18,800 Comcast Corp. Special Class A................ 492,664 763,162
------------ ------------
BUILDING MATERIALS-3.91%
26,700 Masco Corp................................... 1,448,221 1,615,350
39,100 Owens Corning................................ 1,489,210 1,595,769
------------ ------------
2,937,431 3,211,119
------------ ------------
BUSINESS SERVICES AND SUPPLIES-1.55%
38,200 First Data Corp.............................. 1,334,610 1,272,537
------------ ------------
CHEMICALS-SPECIALTY-1.43%
29,300 Air Products and Chemicals, Inc.............. 1,183,665 1,172,000
------------ ------------
COMPUTER-COMMUNICATIONS EQUIPMENT-2.22%
9,100 Cisco Systems, Inc. (a)...................... 593,006 837,769
22,600 Sun Microsystems, Inc. (a)................... 954,157 981,687
------------ ------------
1,547,163 1,819,456
------------ ------------
COMPUTER-SOFTWARE-3.07%
13,050 Computer Associates International, Inc....... 619,566 725,091
36,900 Sterling Commerce, Inc. (a).................. 1,416,896 1,789,650
------------ ------------
2,036,462 2,514,741
------------ ------------
CONTAINERS AND PACKAGING-2.14%
15,600 Crown Cork & Seal Company, Inc............... 813,631 741,000
33,660 Sonoco Products Co........................... 1,117,694 1,018,215
------------ ------------
1,931,325 1,759,215
------------ ------------
DIVERSIFIED COMPANIES-0.40%
4,000 Minnesota Mining and Manufacturing Co. 376,441 328,750
------------ ------------
DRUGS-1.84%
19,400 Abbott Laboratories.......................... 711,676 792,975
6,200 Bristol-Myers Squibb Co...................... 586,790 712,612
------------ ------------
1,298,466 1,505,587
------------ ------------
ELECTRICAL EQUIPMENT-0.90%
8,100 General Electric Co.......................... 561,950 737,100
------------ ------------
ELECTRIC-COMPONENTS AND PARTS-0.24%
5,700 Etec Systems, Inc. (a)....................... 340,775 200,569
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.16%
31,600 American Power Conversion Corp. (a).......... 1,005,092 948,000
------------ ------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.36%
9,900 Altera Corp. (a)............................. 410,850 292,669
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
FINANCE SERVICES-6.34%
29,700 BankBoston Corp.............................. $ 1,368,865 $ 1,652,062
19,000 Fannie Mae................................... 952,329 1,154,250
27,200 Finova Group, Inc............................ 1,205,223 1,540,200
17,100 Household International, Inc................. 755,896 850,725
------------ ------------
4,282,313 5,197,237
------------ ------------
FOOD-3.23%
36,500 Archer-Daniels-Midland Co.................... 820,027 707,187
36,900 ConAgra, Inc................................. 1,155,623 1,169,269
15,500 Dole Food Company, Inc....................... 748,314 770,156
------------ ------------
2,723,964 2,646,612
------------ ------------
FREIGHT CARRIERS-1.78%
34,300 CNF Transportation, Inc...................... 1,376,408 1,457,750
------------ ------------
GLASS AND GLASS PRODUCTS, POTTERY-0.33%
7,700 Corning, Inc................................. 337,418 267,575
------------ ------------
HEALTH CARE SERVICES-3.41%
52,500 Foundation Health Systems, Inc. (a).......... 1,547,498 1,384,687
45,200 Tenet Healthcare Corp. (a)................... 1,484,341 1,412,500
------------ ------------
3,031,839 2,797,187
------------ ------------
HOTEL AND GAMING-0.86%
18,400 Promus Hotel Corp. (with rights)(a).......... 839,933 708,400
------------ ------------
HOUSEHOLD PRODUCTS-1.11%
19,900 Kimberly-Clark Corp.......................... 1,055,044 912,912
------------ ------------
INSURANCE-3.06%
6,000 American International Group, Inc............ 757,023 876,000
14,300 Hartford Financial Services Group, Inc....... 1,303,261 1,635,563
------------ ------------
2,060,284 2,511,563
------------ ------------
METALS-FABRICATING-1.77%
29,200 Newell Co.................................... 1,314,320 1,454,525
------------ ------------
NATURAL GAS TRANSMISSIONS-2.52%
11,500 Coastal Corp................................. 699,453 802,844
23,400 Enron Corp................................... 970,081 1,265,063
------------ ------------
1,669,534 2,067,907
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-0.92%
15,600 Pitney Bowes, Inc............................ 674,543 750,750
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-5.13%
39,200 Apache Corp.................................. 1,358,368 1,234,800
32,900 Burlington Resources, Inc.................... 1,458,514 1,416,756
18,700 Chevron Corp................................. 1,429,927 1,553,269
------------ ------------
4,246,809 4,204,825
------------ ------------
OIL-OFFSHORE DRILLING-0.82%
16,900 Diamond Offshore Drilling, Inc............... 756,164 676,000
------------ ------------
OIL-REFINING-0.95%
10,000 Atlantic Richfield Co........................ 771,031 781,250
------------ ------------
PAPER-1.27%
23,480 Fort James Corp.............................. 907,978 1,044,860
------------ ------------
PERSONAL SERVICES-0.87%
16,600 Service Corp. International.................. 694,705 711,725
------------ ------------
</TABLE>
49
<PAGE>
FORTIS SERIES FUND, INC.
VALUE SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
PRECISION INSTRUMENTS-TEST, RESEARCH-1.10%
15,000 Emerson Electric Co.......................... $ 895,984 $ 905,625
------------ ------------
PUBLISHING-1.24%
12,500 McGraw Hill Companies, Inc................... 874,180 1,019,531
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-0.55%
4,600 Burlington Northern Santa Fe Corp............ 437,411 451,663
------------ ------------
REAL ESTATE-INVESTMENT TRUST-0.89%
30,100 Manufactured Home Communities, Inc........... 795,757 726,163
------------ ------------
RETAIL-DEPARTMENT STORES-1.12%
17,100 Federated Department Stores, Inc. (a)........ 758,524 920,194
------------ ------------
RETAIL-SPECIALTY-1.39%
35,800 AutoZone, Inc. (a)........................... 1,140,025 1,143,363
------------ ------------
TELECOMMUNICATIONS-0.87%
24,800 Cincinnati Bell, Inc......................... 735,559 709,900
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
TELEPHONE SERVICES-5.20%
31,512 Bell Atlantic Corp........................... $ 1,207,066 $ 1,437,735
14,100 GTE Corp..................................... 664,517 784,313
33,900 SBC Communications, Inc...................... 1,143,933 1,356,000
9,700 Sprint Corp.................................. 471,424 683,850
------------ ------------
3,486,940 4,261,898
------------ ------------
UNIT INVESTMENT TRUST-3.73%
27,000 S & P 500 Depositary Receipt................. 3,032,434 3,059,438
------------ ------------
UTILITIES-ELECTRIC-4.06%
26,400 CMS Energy Corp.............................. 1,046,203 1,161,600
16,400 Duke Energy Corp............................. 891,172 971,700
26,400 New Century Energies, Inc.................... 1,178,314 1,199,550
------------ ------------
3,115,689 3,332,850
------------ ------------
WASTE DISPOSAL-0.96%
16,000 USA Waste Services, Inc. (a)................. 791,030 790,000
------------ ------------
TOTAL COMMON STOCKS.......................... $ 68,254,453 $ 73,851,040
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-11.86%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-4.08%
$3,341,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 3,341,000
------------
DIVERSIFIED FINANCE-2.07%
1,697,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 1,697,000
------------
U.S. GOVERNMENT AGENCY-5.71%
4,700,000 Federal Home Loan Mortgage Corp., 5.56%,
7-20-1998.................................. 4,685,769
------------
TOTAL SHORT-TERM INVESTMENTS................. 9,723,769
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$77,978,222) (b)........................... $83,574,809
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $77,989,983 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 7,503,783
Unrealized depreciation..................................... (1,918,957)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 5,584,826
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
50
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-84.84%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.20%
39,200 United Technologies Corp. (e)................ $ 2,250,682 $ 3,626,000
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.28%
101,000 Genuine Parts Co. (e)........................ 3,100,061 3,490,812
89,000 Tenneco, Inc................................. 4,007,655 3,387,562
------------- -------------
7,107,716 6,878,374
------------- -------------
BANKS-3.93%
85,800 Banc One Corp................................ 3,075,007 4,788,712
34,000 Fleet Financial Group, Inc................... 2,416,040 2,839,000
31,710 U.S. Bancorp................................. 787,129 1,363,530
65,850 Washington Mutual, Inc. (e).................. 2,414,719 2,860,359
------------- -------------
8,692,895 11,851,601
------------- -------------
BUSINESS SERVICES AND SUPPLIES-1.77%
107,000 Omnicom Group, Inc. (e)...................... 2,883,907 5,336,625
------------- -------------
CHEMICALS-0.96%
39,000 Du Pont (E.I.) de Nemours & Co............... 2,919,197 2,910,375
------------- -------------
CONSUMER GOODS-0.94%
74,000 Fortune Brands, Inc.......................... 2,360,839 2,844,375
------------- -------------
DIVERSIFIED COMPANIES-1.10%
25,500 Chemed Corp.................................. 901,850 868,594
30,000 Minnesota Mining and Manufacturing Co. (e)... 1,860,371 2,465,625
------------- -------------
2,762,221 3,334,219
------------- -------------
DRUGS-8.99%
86,600 Abbott Laboratories.......................... 2,067,438 3,539,775
98,000 American Home Products Corp.................. 2,713,760 5,071,500
90,000 Glaxo Wellcome plc ADR (e)................... 3,606,890 5,383,125
42,000 Johnson & Johnson............................ 2,821,928 3,097,500
33,500 Merck & Co., Inc............................. 1,966,881 4,480,625
120,500 Pharmacia and UpJohn, Inc.................... 4,853,589 5,558,062
------------- -------------
18,030,486 27,130,587
------------- -------------
ELECTRICAL EQUIPMENT-1.79%
59,200 General Electric Co.......................... 2,295,975 5,387,200
------------- -------------
FINANCE SERVICES-8.47%
49,500 American Express Co.......................... 3,400,398 5,643,000
41,100 Beneficial Corp.............................. 2,323,026 6,296,006
43,200 Fannie Mae................................... 975,787 2,624,400
96,000 Household International, Inc. (e)............ 1,737,322 4,776,000
48,000 Marsh and McLennan Companies, Inc............ 2,429,360 2,901,000
100,912 MBNA Corp.................................... 899,370 3,330,096
------------- -------------
11,765,263 25,570,502
------------- -------------
FOOD-3.96%
86,800 Groupe Danone ADR............................ 2,941,286 4,774,000
65,000 Heinz (H.J.) Co.............................. 2,076,425 3,648,125
37,000 Keebler Foods Co. (a)........................ 888,000 1,017,500
46,000 Quaker Oats Co............................... 1,944,305 2,527,125
------------- -------------
7,850,016 11,966,750
------------- -------------
FURNITURE-0.30%
60,000 Shelby Williams Industries, Inc.............. 825,000 900,000
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
HAND TOOLS AND GENERAL HARDWARE-0.81%
67,500 Snap-On, Inc................................. $ 2,030,431 $ 2,446,875
------------- -------------
HOUSEHOLD PRODUCTS-1.19%
37,600 Clorox Co. (e)............................... 1,266,517 3,586,100
------------- -------------
INSURANCE-2.58%
128,000 LaSalle Re Holdings Ltd. (e)................. 4,302,091 4,848,000
70,000 St. Paul Companies, Inc...................... 2,533,891 2,944,375
------------- -------------
6,835,982 7,792,375
------------- -------------
LEISURE TIME-AMUSEMENTS-1.71%
65,000 Royal Caribbean Cruises Ltd.................. 2,640,625 5,167,500
------------- -------------
MACHINERY-OIL AND WELL-1.40%
41,000 Dresser Industries, Inc...................... 892,957 1,806,562
54,000 Halliburton Co............................... 1,263,695 2,406,375
------------- -------------
2,156,652 4,212,937
------------- -------------
MEDICAL SUPPLIES-1.03%
58,000 Baxter International, Inc.................... 2,145,564 3,121,125
------------- -------------
NATURAL GAS TRANSMISSIONS-7.00%
51,600 Columbia Energy Group........................ 2,942,282 2,870,250
114,254 El Paso Natural Gas Co. (e).................. 1,836,879 4,370,215
137,212 Enron Corp................................... 5,399,914 7,418,024
57,900 Sonat, Inc................................... 2,238,564 2,236,388
125,500 Williams Companies, Inc. (e)................. 1,609,680 4,235,625
------------- -------------
14,027,319 21,130,502
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-3.49%
66,200 Amoco Corp................................... 2,373,442 2,755,575
48,000 Exxon Corp................................... 1,982,160 3,423,000
72,888 Texaco, Inc.................................. 3,433,067 4,350,503
------------- -------------
7,788,669 10,529,078
------------- -------------
OIL-REFINING-0.96%
38,000 Mobil Corp................................... 2,532,196 2,911,750
------------- -------------
PHOTOGRAPHIC-1.21%
50,000 Eastman Kodak Co............................. 3,435,033 3,653,125
------------- -------------
PUBLISHING-2.65%
80,000 McGraw Hill Companies, Inc................... 4,678,239 6,525,000
54,500 Readers Digest Association, Inc. Class A..... 1,468,042 1,478,313
------------- -------------
6,146,281 8,003,313
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.20%
89,500 Tranz Rail Holdings Ltd. ADR................. 1,190,250 592,938
------------- -------------
REAL ESTATE-INVESTMENT TRUST-6.58%
156,000 Cornerstone Properties, Inc.................. 2,257,051 2,749,500
63,600 Crescent Real Estate Equities Trust.......... 1,649,766 2,138,550
99,847 Equity Office Properties Trust............... 2,091,137 2,833,167
135,200 Excel Legacy Corp. (a)....................... 246,143 591,500
175,356 Excel Realty Trust, Inc. (e)................. 4,488,979 5,052,445
49,500 Highwoods Properties, Inc.................... 1,487,050 1,599,469
52,000 Manufactured Home Communities, Inc........... 1,355,120 1,254,500
38,000 Spieker Properties, Inc...................... 1,311,000 1,472,500
</TABLE>
51
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
45,000 Starwood Hotels & Resorts (e)................ $ 2,341,098 $ 2,174,063
------------- -------------
17,227,344 19,865,694
------------- -------------
RETAIL-CLOTHING-0.99%
90,000 Limited (The), Inc........................... 1,668,247 2,981,250
------------- -------------
RETAIL-DEPARTMENT STORES-0.87%
42,800 Sears Roebuck & Co........................... 1,764,053 2,613,475
------------- -------------
RETAIL-SPECIALTY-1.98%
77,000 Intimate Brands, Inc......................... 1,137,947 2,122,313
102,800 Rite Aid Corp. (e)........................... 1,663,663 3,861,425
------------- -------------
2,801,610 5,983,738
------------- -------------
SHIP BUILDING, SHIPPING-1.33%
50,000 Knightsbridge Tankers Ltd.................... 1,049,581 1,337,500
70,000 Sea Containers Ltd........................... 3,035,436 2,677,500
------------- -------------
4,085,017 4,015,000
------------- -------------
TELECOMMUNICATIONS-1.49%
100,000 Ameritech Corp............................... 3,744,862 4,487,500
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
TELEPHONE SERVICES-7.04%
57,000 ALLTEL Corp. (e)............................. $ 2,411,215 $ 2,650,500
140,000 Frontier Corp................................ 3,783,463 4,410,000
82,000 GTE Corp..................................... 3,840,836 4,561,250
150,000 SBC Communications, Inc. (e)................. 4,736,309 6,000,000
77,000 U.S. West, Inc............................... 2,735,145 3,619,000
------------- -------------
17,506,968 21,240,750
------------- -------------
TOBACCO-1.04%
80,000 Philip Morris Companies, Inc................. 2,287,660 3,150,000
------------- -------------
TRANSPORTATION-0.73%
88,000 Teekay Shipping Corp......................... 2,282,500 2,205,500
------------- -------------
UTILITIES-ELECTRIC-2.87%
79,896 Duke Energy Corp. (e)........................ 2,347,508 4,733,838
182,000 Endesa S.A. ADR (e).......................... 3,400,902 3,935,750
------------- -------------
5,748,410 8,669,588
------------- -------------
TOTAL COMMON STOCKS.......................... $ 181,056,387 $ 256,096,721
------------- -------------
------------- -------------
</TABLE>
PREFERRED STOCKS-5.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
CONSTRUCTION-0.62%
45,000 Sealed Air Corp., Convertible, Ser A......... $ 2,896,789 $ 1,890,000
------------- -------------
CONTAINERS AND PACKAGING-0.56%
37,900 Crown Cork and Seal Co, Inc., Convertible
4.50%...................................... 1,677,075 1,696,025
------------- -------------
INSURANCE-1.51%
95,000 Sunamerica, Inc., Convertible 8.50%.......... 3,564,404 4,560,000
------------- -------------
MEDIA-0.41%
24,000 Metromedia International Group, Inc.,
Cumulative Convertible 7.25%............... 1,200,000 1,236,000
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-0.70%
46,000 Nuevo Energy Co., Convertible, Ser A, 5.75%
(e)........................................ 2,236,990 2,101,625
------------- -------------
UTILITIES-ELECTRIC-1.55%
60,000 AES Corp., Convertible, Ser A "Tecons"
5.375%..................................... 3,000,000 4,680,000
------------- -------------
TOTAL PREFERRED STOCKS....................... $ 14,575,258 $ 16,163,650
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-0.66%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
WASTE DISPOSAL-0.66%
$1,600,000 USA Waste Services, Inc., 4.00% Convertible
Sub Note 2-1-2002.......................... BBB- $ 1,643,875 $ 1,980,000
------------- -------------
</TABLE>
52
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-1.32%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount Rating Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
ELECTRONIC-MISCELLANEOUS-0.05%
$ 200,000 Kent Electronics Corp., 4.50% Convertible Sub
Note 9-1-2004.............................. B $ 200,000 $ 158,000
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.00%
1,700,000 Assisted Living Concepts, Inc., Convertible
5.625% 5-1-2003 (d)........................ NR 1,700,000 1,612,875
1,600,000 Cypress Semiconductor, Corp., Convertible
6.00% 10-1-2002 (d)........................ B 1,600,000 1,400,000
------------- -------------
3,300,000 3,012,875
------------- -------------
METALS-MINING AND MISCELLANEOUS-0.27%
1,000,000 Coeur D'Alene Mines, Corp., 7.25% Convertible
Sub Deb 10-31-2005 (d)..................... CCC+ 1,000,000 821,250
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 4,500,000 $ 3,992,125
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 201,775,520 $ 278,232,496
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-8.26%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-3.15%
$9,511,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 9,511,000
-------------
DIVERSIFIED FINANCE-1.01%
3,045,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 3,045,000
-------------
U.S. GOVERNMENT AGENCY-4.10%
2,700,000 Federal Home Loan Mortgage Corp., 5.53%,
7-8-1998................................... 2,696,742
9,700,000 Federal Home Loan Mortgage Corp., 5.56%,
7-20-1998.................................. 9,670,630
-------------
12,367,372
-------------
TOTAL SHORT-TERM INVESTMENTS................. $ 24,923,372
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$226,698,892) (b).......................... $ 303,155,868
-------------
-------------
</TABLE>
(a) Presently not paying Dividend Income
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $226,698,892 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $80,998,252
Unrealized depreciation..................................... (4,541,276)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $76,456,976
- -------------------------------------------------------------------------
</TABLE>
(c) See Note 1 of accompanying Notes to Financial Statements regarding
valuation of securities.
(d) Securities sold within the 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:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------
1998 $1,700,000 Assisted Living Concepts, Inc. 5.625% 5-1-2003 $1,700,000
1997 1,000,000 Coeur D'Alene Mines, Corp. 6.00% 10-31-2005 1,000,000
1997 1,600,000 Cypress Semiconductor, Corp. 6.00% 10-1-2002 1,600,000
The value of these securities at June 30, 1998, was $3,834,125, which represents 1.27% of total net
assets.
</TABLE>
(e) Security is fully or partially on loan at June 30, 1998. See Note 1 of
accompanying Notes to Financial Statements.
(f) 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 6.91% of total net assets as of June 30, 1998.
53
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-96.55%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
BASIC INDUSTRY-4.56%
1,500 Adobe Systems, Inc........................... $ 67,799 $ 63,656
4,700 Air Products & Chemicals, Inc................ 181,935 188,000
700 Armstrong World Industries, Inc.............. 47,940 47,162
1,400 Ashland, Inc................................. 68,296 72,275
3,100 AutoZone, Inc. (a)........................... 87,745 99,006
2,900 Avery Dennison Corp.......................... 135,341 155,875
600 Ball Corp.................................... 21,696 24,112
900 Bemis Co., Inc............................... 35,088 36,787
900 Boise Cascade Corp........................... 32,727 29,475
1,300 Centex Corp.................................. 29,780 49,075
2,000 Champion International Corp.................. 108,518 98,375
2,500 Clear Channel Communications, Inc. (a)....... 201,682 272,812
2,500 Crown Cork & Seal Co., Inc................... 127,892 118,750
4,500 Dow Chemical Co.............................. 401,138 435,094
22,800 Du Pont (E.I.) de Nemours and Co............. 1,331,610 1,701,450
1,500 Eastman Chemical Co.......................... 91,383 93,375
2,700 Engelhard Corp............................... 54,118 54,675
1,400 Fluor Corp................................... 76,933 71,400
700 FMC Corp. (a)................................ 54,619 47,731
5,000 Fort James Corp.............................. 200,576 222,500
3,100 General Instrument Corp. (a)................. 49,486 84,281
1,800 Georgia-Pacific Group........................ 123,642 106,087
1,400 Goodrich (B.F.) Co........................... 63,215 69,475
1,200 Great Lakes Chemical Corp.................... 52,321 47,325
8,500 HBO & Co..................................... 212,680 299,625
1,900 Hercules, Inc................................ 91,169 78,137
6,700 International Paper Co....................... 313,405 288,100
600 Kaufman & Broad Home Corp.................... 8,596 19,050
11,700 Kimberly-Clark Corp.......................... 573,249 536,737
1,900 KLA-Tenor Corp. (a).......................... 98,694 52,606
2,300 Louisiana-Pacific Corp....................... 46,250 41,975
3,200 Masco Corp................................... 137,670 193,600
2,000 Mead Corp.................................... 64,803 63,500
11,700 Monsanto Co.................................. 489,415 653,737
2,400 Morton International, Inc. (with rights)..... 75,667 60,000
1,100 Nalco Chemical Co............................ 41,221 38,637
7,200 Occidental Petroleum Corp.................... 185,401 194,400
4,000 Omnicom Group, Inc........................... 170,577 199,500
2,900 Owens-Illinois, Inc. (a)..................... 109,288 129,775
5,600 Parametric Technology Corp. (a).............. 139,589 151,900
600 Potlatch Corp................................ 29,831 25,200
3,200 Praxair, Inc................................. 154,318 149,800
1,100 Rohm & Haas Co............................... 96,707 114,331
1,443 Sealed Air Corp. (a)......................... 78,906 53,030
3,200 Sherwin-Williams Co.......................... 95,295 106,000
2,200 Sigma-Aldrich Corp........................... 73,445 77,275
2,100 Stone Container Corp. (a).................... 28,912 32,812
1,200 Temple-Inland, Inc........................... 71,514 64,650
3,600 Tenneco, Inc................................. 154,516 137,025
1,400 Union Camp Corp.............................. 79,671 69,475
2,700 Union Carbide Corp........................... 130,739 144,112
1,200 W.R. Grace & Co. (a)......................... 17,157 20,475
2,200 Westvaco Corp................................ 67,431 62,150
3,800 Weyerhaeuser Co.............................. 190,389 175,512
2,200 Willamette Industries, Inc................... 79,852 70,400
------------- -------------
7,751,837 8,492,279
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
CAPITAL SPENDING-22.68%
7,000 3Com Corp. (a)............................... $ 287,149 $ 214,812
2,600 Advanced Micro Devices, Inc. (a)............. 66,779 44,362
400 Aeroquip-Vickers, Inc........................ 14,999 23,350
3,692 Allegheny Teledyne, Inc...................... 96,901 84,454
11,000 AlliedSignal, Inc............................ 425,149 488,125
4,400 AMP, Inc..................................... 184,349 151,250
1,600 Andrew Corp. (with rights) (a)............... 49,099 28,900
2,600 Apple Computer, Inc. (a)..................... 57,608 74,587
7,500 Applied Materials, Inc. (a).................. 244,071 221,250
3,700 Ascend Communications, Inc. (a).............. 178,949 183,381
700 Autodesk, Inc................................ 27,422 27,037
6,000 Automatic Data Processing, Inc............... 309,560 437,250
4,200 Bay Networks, Inc. (a)....................... 114,177 135,450
20,706 Boeing Co.................................... 1,018,911 922,711
300 Briggs & Stratton Corp....................... 14,378 11,231
3,500 Browning-Ferris Industries, Inc.............. 114,057 121,625
3,300 Cabletron Systems, Inc. (a).................. 79,869 44,344
1,600 Case Corp.................................... 104,548 77,200
7,400 Caterpillar, Inc............................. 364,948 391,275
1,300 Ceridian Corp. (a)........................... 54,715 76,375
600 Cincinnati Milacron, Inc..................... 15,570 14,587
20,300 Cisco Systems, Inc. (a)...................... 1,048,320 1,868,869
3,100 Cognizant Corp............................... 123,482 195,300
32,905 Compaq Computer Corp. (a).................... 772,204 933,679
10,700 Computer Associates International, Inc. 459,342 594,519
3,500 Computer Sciences Corp. (a).................. 149,134 224,000
3,000 Cooper Industries, Inc....................... 155,909 164,812
1,650 Crane Co..................................... 73,978 80,128
1,500 Cummins Engine Co., Inc...................... 81,789 76,875
700 Data General Corp. (a)....................... 20,376 10,456
5,600 Deere & Co................................... 282,776 296,100
12,800 Dell Computer Corp. (a)...................... 469,812 1,188,000
1,400 Deluxe Corp.................................. 47,310 50,137
4,500 Dover Corp................................... 141,048 154,125
2,100 Dow Jones & Co., Inc......................... 96,364 117,075
3,500 Dresser Industries, Inc...................... 131,550 154,219
2,400 DSC Communications Corp. (a)................. 60,683 72,000
3,600 Dun & Bradstreet Corp........................ 104,028 130,050
1,400 Eaton Corp................................... 113,003 108,850
1,100 EG&G, Inc.................................... 26,606 33,000
10,400 EMC Corp. (a)................................ 272,080 466,050
8,800 Emerson Electric Co.......................... 481,322 531,300
8,700 First Data Corp.............................. 311,998 289,819
600 Foster Wheeler Corp.......................... 24,899 12,862
3,100 Gateway 2000, Inc. (a)....................... 176,406 156,937
2,300 General Dynamics Corp........................ 93,249 106,950
65,500 General Electric Co.......................... 4,270,599 5,960,500
1,100 General Signal Corp.......................... 46,001 39,600
3,550 Genuine Parts Co............................. 115,997 122,697
1,800 Grainger (W.W.), Inc......................... 76,792 89,662
800 Harnischfeger Industries, Inc................ 34,258 22,650
1,600 Harris Corp.................................. 72,654 71,500
21,000 Hewlett-Packard Co........................... 1,226,091 1,257,375
2,400 Honeywell, Inc............................... 170,560 200,550
2,500 IKON Office Solutions, Inc................... 76,790 36,406
4,900 Illinois Tool Works, Inc..................... 241,436 326,769
3,150 Ingersoll-Rand Co............................ 119,329 138,797
34,100 Intel Corp................................... 2,548,450 2,527,662
18,700 International Business Machines Corp. 1,665,024 2,146,994
2,700 Interpublic Group of Companies, Inc.......... 121,551 163,856
</TABLE>
54
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
2,600 ITT Industries, Inc.......................... $ 77,000 $ 97,175
1,500 Johnson Controls, Inc........................ 66,703 85,781
3,800 Lockheed Martin Corp......................... 373,540 402,325
2,600 LSI Logic Corp. (a).......................... 75,198 59,962
26,362 Lucent Technologies, Inc..................... 1,093,379 2,192,989
1,200 McDermott International, Inc................. 36,095 41,325
12,700 MediaOne Group, Inc. (a)..................... 327,752 558,006
4,400 Micron Technology, Inc. (a).................. 140,930 109,175
49,500 Microsoft Corp. (a).......................... 3,134,906 5,364,562
7,900 Minnesota Mining & Manufacturing Co. 695,804 649,281
11,800 Motorola, Inc................................ 728,494 620,237
3,300 National Semiconductor Corp. (a)............. 85,374 43,519
900 National Service Industries, Inc............. 37,779 45,787
10,300 Northern Telecom Ltd......................... 448,233 584,525
1,200 Northrop Grumman Corp........................ 119,300 123,750
6,700 Novell, Inc. (a)............................. 64,594 85,425
19,100 Oracle Corp. (a)............................. 560,491 469,144
1,300 Owens Corning................................ 52,880 53,056
2,600 Pall Corp.................................... 58,398 53,300
2,100 Parker-Hannifin Corp......................... 80,422 80,062
800 Perkin-Elmer Corp............................ 52,906 49,750
5,200 Pitney Bowes, Inc............................ 197,399 250,250
3,600 PPG Industries, Inc.......................... 216,503 250,425
1,700 Raychem Corp................................. 71,807 50,256
6,600 Raytheon Co. Class B......................... 345,242 390,225
3,700 Rockwell International Corp.................. 199,214 177,831
1,400 Ryder System, Inc............................ 46,925 44,187
1,400 Scientific-Atlanta, Inc...................... 26,362 35,525
4,900 Seagate Technology, Inc. (a)................. 151,909 116,681
5,100 Service Corp. International.................. 173,583 218,662
400 Shared Medical Systems Corp.................. 25,542 29,375
3,900 Silicon Graphics, Inc. (a)................... 66,092 47,287
1,300 Snap-on, Inc................................. 51,724 47,125
1,700 Stanley Works................................ 71,509 70,656
8,200 Sun Microsystems, Inc. (a)................... 326,317 356,187
1,100 Tektronix, Inc............................... 44,724 38,912
3,600 Tellabs, Inc. (a)............................ 202,612 257,850
7,600 Texas Instruments, Inc....................... 338,523 443,175
3,200 Textron, Inc................................. 189,748 229,400
3,000 Thermo Electron Corp. (a).................... 114,275 102,562
1,300 Thomas & Betts Corp.......................... 63,761 64,025
1,100 Timken Co.................................... 31,981 33,894
11,500 Tyco International Ltd....................... 473,450 724,500
4,800 Unisys Corp. (a)............................. 71,347 135,600
4,600 United Technologies Corp..................... 351,888 425,500
9,300 Waste Management, Inc........................ 286,063 325,500
6,400 Xerox Corp................................... 465,796 650,400
------------- -------------
33,240,882 42,179,812
------------- -------------
CONSUMER DISCRETIONARY-12.08%
5,500 Albertson's, Inc............................. 230,372 284,969
1,600 American Greetings Corp. Class A............. 59,826 81,500
5,200 American Stores Co........................... 119,412 125,775
1,700 Black & Decker Corp.......................... 72,021 103,700
2,000 Brunswick Corp............................... 57,288 49,500
14,100 CBS Corp. (a)................................ 353,737 447,675
12,600 Chrysler Corp................................ 450,587 710,325
2,700 Circuit City Stores - Circuit City Group 104,382 126,562
7,900 Comcast Corp. Special Class A................ 212,397 320,691
2,000 Consolidated Stores Corp. (a)................ 84,246 72,500
1,300 Cooper Tire & Rubber Co...................... 29,876 26,812
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
4,300 Costco Companies, Inc. (a)................... $ 161,911 $ 271,169
8,200 CVS Corp..................................... 252,767 319,287
2,200 Dana Corp.................................... 98,250 117,700
2,900 Darden Restaurants, Inc...................... 32,684 46,037
9,300 Dayton Hudson Corp........................... 291,066 451,050
2,000 Dillard's, Inc. Class A...................... 72,655 82,875
13,800 Disney (Walt) Co............................. 1,206,822 1,449,862
2,700 Donnelley (R.R.) & Sons Co................... 96,737 123,525
1,100 Echlin, Inc.................................. 37,934 53,969
4,300 Federated Department Stores, Inc. (a) 176,486 231,394
800 Fleetwood Enterprises, Inc................... 29,075 32,000
24,700 Ford Motor Co................................ 842,256 1,457,300
1,600 Fruit of the Loom, Inc. Class A (a).......... 53,398 53,100
5,700 Gannett Co., Inc............................. 290,595 405,056
8,250 Gap, Inc..................................... 266,626 508,406
13,600 General Motors Corp.......................... 792,778 908,650
1,200 Giant Food, Inc. Class A..................... 41,763 51,675
3,100 Goodyear Tire & Rubber Co.................... 185,803 199,756
800 Great Atlantic & Pacific Tea Co., Inc........ 24,995 26,450
1,400 Harcourt General, Inc........................ 70,354 83,300
1,700 Harrah's Entertainment, Inc. (a)............. 34,607 39,525
2,700 Hasbro, Inc.................................. 82,364 106,144
5,000 Hilton Hotels Corp........................... 149,153 142,500
14,650 Home Depot, Inc.............................. 740,453 1,216,866
700 Jostens, Inc................................. 17,193 16,887
1,700 King World Productions, Inc. (a)............. 36,895 43,350
9,400 Kmart Corp. (a).............................. 123,595 180,950
1,700 Knight-Ridder, Inc........................... 83,761 93,606
5,800 Kroger Co. (a)............................... 196,162 248,675
4,700 Limited (The), Inc........................... 112,921 155,687
1,400 Liz Claiborne, Inc........................... 63,447 73,150
700 Longs Drug Stores Corp....................... 20,007 20,212
6,800 Lowe's Companies, Inc........................ 156,620 275,825
5,100 Marriott International, Inc. Class A......... 162,384 165,112
6,500 Mattel, Inc.................................. 225,576 275,031
5,000 May Department Stores Co..................... 267,631 327,500
1,900 Maytag Corp.................................. 60,213 93,812
13,700 McDonald's Corp.............................. 688,541 945,300
2,000 McGraw-Hill Companies, Inc................... 122,655 163,125
900 Mercantile Stores Co., Inc................... 54,331 71,044
1,200 Meredith Corp................................ 37,717 56,325
3,300 Mirage Resorts, Inc. (a)..................... 85,510 70,331
1,700 Moore Corp. Ltd.............................. 31,188 22,525
1,600 Navistar International Corp. (a)............. 32,861 46,200
1,800 New York Times Co. Class A................... 92,554 142,650
5,700 Nike, Inc. Class B........................... 310,336 277,519
1,400 Nordstrom, Inc............................... 68,393 108,150
1,400 PACCAR, Inc.................................. 57,415 73,150
4,900 Penney (J.C.) Co., Inc....................... 289,326 354,331
1,400 Pep Boys-Manny, Moe & Jack................... 38,431 26,512
1,000 Reebok International Ltd. (a)................ 31,947 27,687
5,100 Rite Aid Corp................................ 138,894 191,569
600 Russell Corp................................. 17,349 18,112
7,900 Sears, Roebuck & Co.......................... 410,559 482,394
600 Springs Industries, Inc. Class A............. 32,932 27,675
1,100 SUPERVALU, Inc............................... 37,651 48,812
6,500 SYSCO Corp................................... 125,263 166,562
2,200 Tandy Corp................................... 74,800 116,737
10,000 Tele-Communications TCI Group, Inc. Class A
(a)........................................ 196,959 384,375
12,100 Time Warner, Inc............................. 681,332 1,033,794
</TABLE>
55
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
1,700 Times Mirror Co. Class A..................... $ 91,460 $ 106,887
9,500 TJX Companies, Inc........................... 171,855 229,187
5,500 Toys "R" Us, Inc. (a)........................ 162,411 129,594
2,500 Tribune Co................................... 129,201 172,031
2,800 Tricon Global Restaurants, Inc. (a).......... 77,862 88,725
3,000 TRW, Inc..................................... 160,748 163,875
2,300 V F Corp..................................... 102,298 118,450
2,600 Venator Group, Inc. (a)...................... 59,545 49,725
7,000 Viacom, Inc. Class B (a)..................... 266,494 407,750
45,100 Wal-Mart Stores, Inc......................... 1,640,547 2,739,825
9,800 Walgreen Co.................................. 270,742 404,862
2,800 Wendy's International, Inc................... 62,582 65,800
1,500 Whirlpool Corp............................... 84,778 103,125
2,800 Winn-Dixie Stores, Inc....................... 111,937 143,325
------------- -------------
16,381,485 22,475,442
------------- -------------
CONSUMER STAPLES-11.63%
1,200 Alberto-Culver Co. Class B................... 33,106 34,800
9,900 Anheuser-Busch Companies, Inc................ 425,484 467,156
11,823 Archer-Daniels-Midland Co.................... 239,767 229,071
2,600 Avon Products, Inc........................... 172,362 201,500
5,500 Bestfoods.................................... 241,648 319,344
1,300 Brown-Forman Corp. Class B................... 63,617 83,525
9,600 Campbell Soup Co............................. 448,512 510,000
2,100 Cardinal Health, Inc......................... 143,399 196,875
16,636 Cendant Corp. (a)............................ 467,137 347,277
2,000 Clorox Co.................................... 136,680 190,750
49,600 Coca-Cola Co................................. 3,136,415 4,240,800
5,900 Colgate-Palmolive Co......................... 398,104 519,200
9,700 ConAgra, Inc................................. 288,125 307,369
600 Coors (Adolph) Co. Class B................... 16,343 20,400
4,700 Corning, Inc................................. 195,575 163,325
6,500 Eastman Kodak Co............................. 469,615 474,906
2,600 Ecolab, Inc.................................. 61,535 80,600
3,300 Fortune Brands, Inc.......................... 111,813 126,844
3,200 General Mills, Inc........................... 212,140 218,800
22,100 Gillette Co.................................. 1,000,357 1,252,794
7,100 Heinz (H.J.) Co.............................. 326,443 398,488
2,800 Hershey Foods Corp........................... 167,125 193,200
2,200 International Flavors & Fragrances, Inc. 104,895 95,563
27,100 Johnson & Johnson Co......................... 1,675,541 1,998,625
8,000 Kellogg Co................................... 321,137 300,500
100 NACCO Industries, Inc. Class A............... 6,117 12,925
3,000 Newell Co.................................... 113,287 149,438
29,400 PepsiCo, Inc................................. 1,009,093 1,210,913
48,800 Philip Morris Companies, Inc................. 1,993,395 1,921,500
5,000 Pioneer Hi-Bred International, Inc........... 148,071 206,875
1,100 Polaroid Corp................................ 49,698 39,119
27,000 Procter & Gamble Co.......................... 1,861,293 2,458,688
2,700 Quaker Oats Co............................... 121,110 148,331
2,000 Ralston-Ralston Purina Group................. 169,179 233,625
2,800 Rubbermaid, Inc.............................. 75,421 92,925
9,100 Sara Lee Corp................................ 418,457 509,031
7,000 Seagram (The) Co. Ltd........................ 260,937 286,563
1,400 Tupperware Corp.............................. 49,646 39,375
13,000 Unilever N.V. NY Shares...................... 715,184 1,026,188
3,900 UST, Inc..................................... 118,322 105,300
2,200 Wrigley (WM.) Jr. Co......................... 148,426 215,600
------------- -------------
18,114,511 21,628,108
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
ENERGY & RELATED-7.50%
2,000 Amerada Hess Corp............................ $ 107,919 $ 108,625
18,900 Amoco Corp................................... 804,099 786,713
1,200 Anadarko Petroleum Corp...................... 84,967 80,625
2,000 Apache Corp.................................. 71,564 63,000
6,400 Atlantic Richfield Co........................ 462,755 500,000
3,400 Baker Hughes, Inc............................ 130,918 117,513
3,305 Burlington Resources, Inc.................... 148,461 142,322
13,300 Chevron Corp................................. 982,952 1,104,731
2,100 Coastal Corp................................. 115,615 146,606
1,500 Columbia Energy Group........................ 66,598 83,438
1,900 Consolidated Natural Gas Co.................. 101,571 111,863
600 Eastern Enterprises.......................... 25,175 25,725
6,500 Enron Corp................................... 272,679 351,406
49,100 Exxon Corp................................... 2,851,034 3,501,444
5,200 Halliburton Co............................... 220,338 231,725
1,200 Helmerich & Payne, Inc....................... 40,580 26,700
900 Kerr-McGee Corp.............................. 62,667 52,088
15,900 Mobil Corp................................... 1,105,458 1,218,338
800 NICOR, Inc................................... 28,571 32,100
600 ONEOK, Inc................................... 18,850 23,925
2,000 Oryx Energy Co. (a).......................... 46,074 44,250
700 Pennzoil Co.................................. 40,922 35,438
600 People's Energy Corp. (with rights).......... 20,472 23,175
5,000 Phillips Petroleum Co........................ 220,873 240,938
1,500 Rowan Companies, Inc. (a).................... 37,675 29,156
43,100 Royal Dutch Petroleum Co. NY Shares 2,124,124 2,362,419
10,400 Schlumberger Ltd............................. 695,497 710,450
4,256 Sempra Energy (a)............................ 106,813 118,096
2,400 Sonat, Inc................................... 105,679 92,700
1,800 Sun Co., Inc................................. 65,099 69,863
11,200 Texaco, Inc.................................. 608,781 668,500
5,092 Union Pacific Resources Group, Inc........... 126,360 89,428
4,800 Unocal Corp.................................. 185,381 171,600
5,900 USX-Marathon Group........................... 178,925 202,444
1,000 Western Atlas, Inc. (a)...................... 57,389 84,875
9,000 Williams Companies, Inc...................... 238,151 303,750
------------- -------------
12,560,986 13,955,969
------------- -------------
FINANCE-17.18%
2,944 Aetna, Inc................................... 254,733 224,112
2,100 Ahmanson (H.F.) & Co......................... 103,072 149,100
8,300 Allstate Corp................................ 627,362 759,969
9,200 American Express Co.......................... 687,722 1,048,800
5,110 American General Corp........................ 261,731 363,768
14,150 American International Group, Inc............ 1,398,687 2,065,900
3,750 Aon Corp..................................... 201,544 263,438
6,856 Associates First Capital Corp. Class A....... 328,515 527,055
14,540 Banc One Corp................................ 700,120 811,514
7,600 Bank of New York Co., Inc.................... 353,068 461,225
13,600 BankAmerica Corp............................. 892,488 1,175,550
5,600 BankBoston Corp.............................. 229,862 311,500
1,800 Bankers Trust of New York Corp. and
Subsidiaries............................... 188,628 208,913
2,800 BB&T Corp.................................... 179,355 189,350
1,100 Beneficial Corp.............................. 99,780 168,506
2,000 Block H & R, Inc............................. 73,693 84,250
17,100 Chase Manhattan Corp......................... 907,175 1,291,050
3,200 Chubb Corp................................... 202,625 257,200
4,200 CIGNA Corp................................... 232,621 289,800
3,500 Cincinnati Financial Corp.................... 156,451 134,313
</TABLE>
56
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
9,000 Citicorp..................................... $ 1,108,508 $ 1,343,250
3,250 Comerica, Inc................................ 160,833 215,313
4,400 Conseco, Inc................................. 189,873 205,700
2,300 Countrywide Credit Industries, Inc........... 92,803 116,725
2,700 Equifax, Inc................................. 88,857 98,044
20,500 Fannie Mae................................... 984,186 1,245,375
5,125 Fifth Third Bancorp.......................... 212,538 322,875
5,600 First Chicago NBD Corp....................... 370,272 496,300
19,670 First Union Corp............................. 901,139 1,145,778
5,600 Fleet Financial Group, Inc................... 363,054 467,600
4,900 Franklin Resources, Inc...................... 260,545 264,600
13,700 Freddie Mac.................................. 490,843 644,756
1,500 General Re Corp.............................. 284,900 380,250
1,000 Golden West Financial Corp................... 75,049 106,313
2,600 Green Tree Financial Corp.................... 92,436 111,313
2,200 Hartford Financial Services Group, Inc. 192,177 251,625
7,000 Household International, Inc................. 275,367 348,250
3,800 Huntington Bancshares, Inc................... 131,289 127,300
3,500 J.P. Morgan & Co., Inc....................... 385,656 409,938
1,950 Jefferson-Pilot Corp......................... 94,169 112,978
8,900 KeyCorp...................................... 273,731 317,063
2,400 Lehman Brothers Holdings, Inc................ 142,854 186,150
2,000 Lincoln National Corp........................ 139,979 182,750
2,200 Loews Corp................................... 211,381 191,675
4,950 Marsh & McLennan Companies, Inc.............. 231,859 299,166
1,800 MBIA, Inc.................................... 109,323 134,775
9,850 MBNA Corp.................................... 258,110 325,050
5,100 Mellon Bank Corp............................. 252,208 355,088
3,200 Mercantile Bancorporation, Inc............... 175,160 161,200
6,800 Merrill Lynch & Co........................... 425,847 627,300
2,300 MGIC Investment Corp......................... 112,306 131,244
11,915 Morgan Stanley, Dean Witter & Co............. 618,115 1,088,733
6,500 National City Corp........................... 398,042 461,500
19,028 NationsBank Corp............................. 1,114,984 1,455,642
2,100 Northern Trust Corp.......................... 148,122 160,125
15,100 Norwest Corp................................. 461,133 564,363
5,800 PNC Bank Corp................................ 260,303 312,113
1,400 Progressive Corp............................. 160,047 197,400
1,900 Providian Financial Corp. (a)................ 75,685 149,269
1,200 Pulte Corp................................... 24,594 35,850
2,000 Republic New York Corp....................... 101,105 125,875
2,700 SAFECO Corp.................................. 122,854 122,681
5,200 Schwab (Charles) Corp........................ 164,530 169,000
4,458 St. Paul Companies, Inc...................... 168,658 187,515
3,100 State Street Corp............................ 176,305 215,450
3,600 Summit Bancorp............................... 178,555 171,000
3,800 SunAmerica, Inc.............................. 149,916 218,263
4,200 SunTrust Banks, Inc.......................... 263,420 341,513
4,950 Synovus Financial Corp....................... 107,804 117,563
2,700 Torchmark Corp............................... 99,825 123,525
1,200 Transamerica Corp............................ 121,822 138,150
22,991 Travelers Group, Inc......................... 1,004,166 1,393,829
2,700 UNUM Corp.................................... 118,733 149,850
15,271 US Bancorp................................... 478,422 656,653
4,000 Wachovia Corp................................ 280,679 338,000
7,500 Washington Mutual, Inc....................... 330,006 325,781
1,700 Wells Fargo & Co............................. 494,936 627,300
------------- -------------
24,789,245 31,958,000
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
HEALTH CARE-10.26%
31,200 Abbott Laboratories.......................... $ 1,001,503 $ 1,275,300
1,100 Allergan, Inc................................ 37,936 51,013
2,400 ALZA Corp. (a)............................... 84,696 103,800
26,200 American Home Products Corp.................. 1,005,063 1,355,850
5,100 Amgen, Inc. (a).............................. 292,411 333,413
1,100 Bard (C.R.), Inc............................. 36,455 41,869
1,100 Bausch & Lomb, Inc........................... 44,888 55,138
6,200 Baxter International, Inc.................... 320,093 333,638
2,500 Becton, Dickinson and Co..................... 126,182 194,063
2,400 Biomet, Inc.................................. 54,772 79,350
4,000 Boston Scientific Corp. (a).................. 228,013 286,500
20,000 Bristol-Myers Squibb Co...................... 1,597,301 2,298,750
12,950 Columbia/HCA Healthcare Corp................. 432,023 377,169
3,000 Guidant Corp................................. 151,544 213,938
7,900 HEALTHSOUTH Corp. (a)........................ 194,324 210,831
3,200 Humana, Inc. (a)............................. 70,925 99,800
22,400 Lilly (Eli) & Co............................. 1,206,849 1,479,800
1,300 Mallinckrodt, Inc............................ 48,203 38,594
1,100 Manor Care, Inc.............................. 33,687 42,281
9,200 Medtronic, Inc............................... 387,861 586,500
24,000 Merck & Co., Inc............................. 2,358,984 3,210,000
900 Millipore Corp............................... 35,087 24,525
26,300 Pfizer, Inc.................................. 1,714,807 2,858,481
10,300 Pharmacia & Upjohn, Inc...................... 394,907 475,088
14,600 Schering-Plough Corp......................... 786,547 1,337,725
1,600 St. Jude Medical, Inc. (a)................... 61,655 58,900
5,900 Tenet Healthcare Corp. (a)................... 172,532 184,375
1,700 U S Surgical Corp............................ 60,485 77,563
3,900 United Healthcare Corp....................... 206,624 247,650
16,700 Warner-Lambert Co............................ 696,582 1,158,563
------------- -------------
13,842,939 19,090,467
------------- -------------
METAL & MINING-0.66%
4,700 Alcan Aluminium Ltd.......................... 150,821 129,838
3,200 Aluminum Co. of America...................... 239,224 211,000
2,100 Armco, Inc. (a).............................. 10,563 13,388
900 ASARCO, Inc.................................. 26,473 20,025
7,200 Barrick Gold Corp............................ 163,174 138,150
4,500 Battle Mountain Gold Co...................... 27,611 26,719
2,400 Bethlehem Steel Corp. (a).................... 26,430 29,850
1,700 Cyprus Amax Minerals Co...................... 37,068 22,525
3,800 Freeport-McMoran Copper & Gold, Inc. 93,480 57,713
4,100 Homestake Mining Co.......................... 52,047 42,538
3,200 Inco Ltd..................................... 80,694 43,600
800 Inland Steel Industries, Inc................. 17,007 22,550
2,801 Newmont Mining Corp.......................... 100,487 66,174
2,000 Nucor Corp................................... 101,176 92,000
1,800 Phelps Dodge Corp............................ 114,489 102,938
5,100 Placer Dome, Inc............................. 87,812 59,925
1,200 Reynolds Metals Co........................... 76,501 67,125
1,600 USX-US Steel Group, Inc...................... 54,081 52,800
2,100 Worthington Industries, Inc.................. 39,175 31,631
------------- -------------
1,498,313 1,230,489
------------- -------------
TRANSPORTATION-1.07%
3,600 AMR Corp. (a)................................ 197,571 299,700
3,000 Burlington Northern Santa Fe Corp............ 272,595 294,563
4,400 CSX Corp. (with rights)...................... 229,534 200,200
1,400 Delta Air Lines, Inc......................... 135,379 180,950
2,780 FDX Corp. (a)................................ 157,392 174,445
6,400 Laidlaw, Inc................................. 86,546 78,000
</TABLE>
57
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
7,700 Norfolk Southern Corp........................ $ 245,116 $ 229,556
4,350 Southwest Airlines Co........................ 92,862 128,869
5,600 Union Pacific Corp........................... 323,467 247,100
1,900 US Airways Group, Inc. (a)................... 83,488 150,575
------------- -------------
1,823,950 1,983,958
------------- -------------
UTILITIES-8.93%
11,900 AirTouch Communications, Inc. (a)............ 456,384 695,406
3,500 ALLTEL Corp.................................. 122,066 162,750
2,800 Ameren Corp.................................. 107,234 111,300
4,500 American Electric Power Co., Inc............. 201,610 204,188
22,400 Ameritech Corp............................... 794,395 1,005,200
32,800 AT&T Corp.................................... 1,545,734 1,873,700
2,900 Baltimore Gas & Electric Co.................. 81,879 90,081
30,818 Bell Atlantic Corp........................... 1,191,392 1,406,071
20,100 BellSouth Corp............................... 1,007,882 1,349,213
3,000 Carolina Power & Light Co.................... 111,106 130,125
4,200 Central & South West Corp.................... 104,298 112,875
3,100 Cinergy Corp................................. 103,024 108,500
5,400 Consolidated Edison, Inc..................... 197,401 248,738
4,500 Dominion Resources, Inc...................... 175,765 183,375
2,900 DTE Energy Co................................ 93,497 117,088
7,053 Duke Energy Corp............................. 344,624 417,890
7,500 Edison International......................... 178,591 221,719
5,000 Entergy Corp................................. 129,825 143,750
4,500 FirstEnergy Corp............................. 113,894 138,375
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
3,500 FPL Group, Inc............................... $ 178,384 $ 220,500
3,600 Frontier Corp................................ 89,116 113,400
2,600 GPU, Inc..................................... 93,060 98,313
19,200 GTE Corp..................................... 929,030 1,068,000
5,774 Houston Industries, Inc...................... 134,383 178,272
14,200 MCI Communications Corp...................... 559,625 825,375
6,000 Nextel Communications, Inc. Class A (a)...... 194,844 149,250
3,000 Niagara Mohawk Power Corp. (a)............... 32,210 44,813
3,000 Northern States Power Co..................... 77,051 85,875
6,500 PacifiCorp................................... 143,947 147,063
4,400 PECO Energy Co............................... 103,850 128,425
7,500 PG&E Corp.................................... 198,222 236,719
3,100 PP&L Resources, Inc.......................... 69,410 70,331
4,500 Public Service Enterprise Group, Inc......... 126,759 154,969
37,002 SBC Communications, Inc...................... 1,176,715 1,480,080
13,700 Southern Co.................................. 319,778 379,319
8,700 Sprint Corp.................................. 464,698 613,350
5,702 Texas Utilities Co........................... 228,228 237,346
4,400 Unicom Corp.................................. 121,778 154,275
10,519 US West, Inc................................. 415,350 494,393
20,700 WorldCom, Inc. (a)........................... 686,361 1,002,656
------------- -------------
13,403,400 16,603,068
------------- -------------
TOTAL COMMON STOCKS.......................... $ 143,407,548 $ 179,597,592
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-4.30%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-4.10%
$7,627,578 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 7,627,578
-------------
INVESTMENT COMPANY-0.00%
600 First American Prime Obligation Fund, Current
rate -- 5.13%.............................. 600
-------------
U.S. TREASURY BILL-0.20%
365,000 U.S. Treasury Bill, 5.03%, 9-24-1998 (e)..... 360,794
-------------
TOTAL SHORT-TERM INVESTMENTS................. 7,988,972
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$151,396,458) (b).......................... $ 187,586,564
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $151,450,878 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $40,004,099
Unrealized depreciation.......................................... (3,868,413)
- -----------------------------------------------------------------------------
Net unrealized appreciation...................................... $36,135,686
- -----------------------------------------------------------------------------
</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 2.47% of total net assets as of June 30, 1998.
(e) Security pledged as initial margin deposit for open financial futures
position detailed below:
<TABLE>
<CAPTION>
FINANCIAL FUTURES-LONG
MARKET UNREALIZED
VALUE APPRECIATION
NUMBER OF COVERED BY (DEPRECIATION)
ISSUER CONTRACT(S) CONTRACT(S) EXPIRATION AT 6/30/98
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
September
Standard & Poor's 500....................................... 23 $6,572,250 98 $ 243,813
</TABLE>
58
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-94.40%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-2.13%
44,300 AlliedSignal, Inc............................ $ 1,719,720 $ 1,965,812
400 Boeing Co.................................... 20,197 17,825
15,200 Raytheon Co. Class B......................... 809,372 898,700
------------- -------------
2,549,289 2,882,337
------------- -------------
APPAREL-0.76%
24,300 Warnaco Group Class A........................ 776,886 1,031,231
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.38%
7,600 Federal-Mogul Corp........................... 374,598 513,000
------------- -------------
BANKS-8.63%
22,190 Banc One Corp................................ 1,100,338 1,238,479
17,300 Chase Manhattan Corp......................... 942,595 1,306,150
8,100 Citicorp..................................... 1,003,061 1,208,925
19,200 First Union Corp............................. 976,390 1,118,400
18,600 Mellon Bank Corp............................. 900,647 1,295,025
4,400 National City Corp........................... 324,320 312,400
20,700 NationsBank Corp............................. 1,357,696 1,583,550
35,700 Norwest Corp................................. 1,082,001 1,334,287
25,600 U.S. Bancorp................................. 881,374 1,100,800
9,900 Washington Mutual, Inc....................... 439,537 430,031
2,000 Wells Fargo & Co............................. 633,855 738,000
------------- -------------
9,641,814 11,666,047
------------- -------------
BEVERAGE-0.67%
21,900 PepsiCo, Inc................................. 748,552 902,006
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.46%
12,600 Biogen, Inc. (a)............................. 488,044 617,400
------------- -------------
BUILDING MATERIALS-0.76%
17,000 Masco Corp................................... 806,612 1,028,500
------------- -------------
BUSINESS SERVICES AND SUPPLIES-3.94%
4,400 Ceridian Corp. (a)........................... 245,557 258,500
9,500 Equifax, Inc................................. 343,392 344,969
28,700 First Data Corp.............................. 1,015,470 956,069
17,700 Galileo International, Inc................... 611,628 797,606
20,000 Omnicom Group, Inc........................... 776,926 997,500
31,316 Tyco International Ltd....................... 1,118,114 1,972,908
------------- -------------
4,111,087 5,327,552
------------- -------------
CABLE TELEVISION-0.46%
14,300 Media One Group, Inc. (a).................... 388,966 628,306
------------- -------------
CHEMICALS-0.95%
7,300 Du Pont (E.I.) de Nemours & Co............... 411,438 544,762
12,000 Great Lakes Chemical Corp.................... 515,645 473,250
6,400 Hercules, Inc................................ 292,648 263,200
------------- -------------
1,219,731 1,281,212
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-1.31%
12,150 Cisco Systems, Inc. (a)...................... 574,350 1,118,559
5,200 Dell Computer Corp. (a)...................... 261,616 482,625
4,000 Sun Microsystems, Inc. (a)................... 178,139 173,750
------------- -------------
1,014,105 1,774,934
------------- -------------
COMPUTER-SOFTWARE-7.43%
8,900 Adobe Systems, Inc........................... 432,430 377,694
4,800 America Online, Inc. (a)..................... 423,637 508,800
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
13,700 Automatic Data Processing, Inc............... $ 691,848 $ 998,387
27,400 BMC Software, Inc. (a)....................... 767,519 1,423,087
12,100 Cadence Design Systems, Inc. (a)............. 416,787 378,125
16,500 EMC Corp. (a)................................ 550,634 739,406
18,100 Microsoft Corp. (a).......................... 1,227,069 1,961,587
17,500 Networks Associates, Inc. (a)................ 652,244 837,812
24,200 Oracle Corp. (a)............................. 626,336 594,412
35,900 Parametric Technology Corp. (a).............. 946,181 973,787
14,800 Sterling Commerce, Inc. (a).................. 630,745 717,800
13,900 SunGard Data Systems, Inc. (a)............... 314,087 533,412
------------- -------------
7,679,517 10,044,309
------------- -------------
CONSUMER DISCRETIONARY-0.65%
22,300 Hasbro, Inc. (a)............................. 811,589 876,669
------------- -------------
CONSUMER GOODS-0.88%
9,700 Colgate-Palmolive Co......................... 605,021 853,600
4,200 Unilever N.V. ADR............................ 251,653 331,537
------------- -------------
856,674 1,185,137
------------- -------------
CONSUMER NON-CYCLICAL-0.07%
2,800 Interstate Bakeries Corp..................... 82,670 92,925
------------- -------------
CONTAINERS AND PACKAGING-0.08%
2,200 Crown Cork & Seal Company, Inc............... 121,376 104,500
------------- -------------
COSMETICS AND SUNDRIES-0.33%
7,800 Gillette Co.................................. 426,407 442,162
------------- -------------
DIVERSIFIED COMPANIES-0.56%
23,800 CBS Corp..................................... 756,851 755,650
------------- -------------
DRUGS-8.53%
10,600 Abbott Laboratories.......................... 337,354 433,275
22,100 American Home Products Corp.................. 827,150 1,143,675
18,100 Bristol-Myers Squibb Co...................... 1,717,081 2,080,369
14,700 Johnson & Johnson............................ 891,560 1,084,125
7,500 Lilly (Eli) & Co., Inc....................... 404,065 495,469
11,900 Merck & Co., Inc............................. 1,168,712 1,591,625
15,500 Pfizer, Inc.................................. 871,607 1,684,656
200 R.P. Scherer Corp. (a)....................... 15,461 17,725
12,500 Schering-Plough Corp......................... 655,277 1,145,312
26,600 Warner-Lambert Co............................ 1,198,951 1,845,375
------------- -------------
8,087,218 11,521,606
------------- -------------
ELECTRICAL EQUIPMENT-1.08%
16,000 General Electric Co.......................... 997,837 1,456,000
------------- -------------
ELECTRIC PRODUCTS-0.37%
6,000 Honeywell, Inc............................... 438,521 501,375
------------- -------------
ELECTRIC-COMPONENTS AND PARTS-0.33%
7,300 Linear Technology Corp....................... 422,430 440,281
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.58%
2,800 Cooper Industries, Inc....................... 185,958 153,825
10,600 Hewlett-Packard Co........................... 691,299 634,675
------------- -------------
877,257 788,500
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.01%
11,300 Intel Corp................................... 895,491 837,612
14,700 Maxim Integrated Products, Inc. (a).......... 421,985 465,806
</TABLE>
59
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
1,000 Texas Instruments, Inc....................... $ 55,759 $ 58,312
------------- -------------
1,373,235 1,361,730
------------- -------------
FINANCE SERVICES-9.21%
12,400 American Express Co.......................... 1,053,116 1,413,600
4,900 Associates First Capital Corp. Class A....... 390,624 376,687
17,800 BankBoston Corp.............................. 763,193 990,125
18,100 Block H & R, Inc............................. 673,227 762,462
5,800 Capital One Financial Corp................... 387,080 720,288
24,600 Fannie Mae................................... 1,211,968 1,494,450
41,800 Freddie Mac.................................. 1,574,339 1,967,213
19,400 Household International, Inc................. 810,560 965,150
7,700 Morgan Stanley, Dean Witter & Co............. 472,257 703,588
17,100 SLM Holding Corp............................. 736,406 837,900
36,449 Travelers Group, Inc......................... 1,671,103 2,209,721
------------- -------------
9,743,873 12,441,184
------------- -------------
FOOD-3.80%
4,200 Dean Foods Co................................ 205,357 230,738
9,100 Heinz (H.J.) Co.............................. 406,615 510,738
6,200 Hershey Foods Corp........................... 373,500 427,800
5,300 Ralston -- RALSTON PURINA GROUP.............. 470,090 619,106
36,600 Rentokil Initial plc......................... 199,219 263,504
41,700 Safeway, Inc. (a)............................ 1,184,660 1,696,669
16,600 Sara Lee Corp................................ 754,087 928,563
13,270 U.S. Foodservice, Inc. (a)................... 458,420 465,279
------------- -------------
4,051,948 5,142,397
------------- -------------
HEALTH CARE-0.34%
6,400 Guidant Corporation.......................... 436,124 456,400
------------- -------------
HEALTH CARE SERVICES-2.08%
41,600 HEALTHSOUTH Corp. (a)........................ 1,037,595 1,110,200
13,700 Tenet Healthcare Corp. (a)................... 438,813 428,125
20,000 United HealthCare Corp....................... 1,093,166 1,270,000
------------- -------------
2,569,574 2,808,325
------------- -------------
HOTEL AND GAMING-0.45%
21,600 Hilton Hotels Corporation.................... 660,446 615,600
------------- -------------
HOUSEHOLD PRODUCTS-0.99%
17,200 Kimberly-Clark Corp.......................... 882,728 789,050
6,000 Procter & Gamble Co.......................... 370,862 546,375
------------- -------------
1,253,590 1,335,425
------------- -------------
INSURANCE-3.84%
35,800 Ace Ltd...................................... 914,869 1,396,200
1,000 Allstate Corp................................ 96,632 91,563
1,200 American International Group, Inc............ 145,580 175,200
12,400 Exel Limited................................. 735,117 964,875
500 Fairfax Financial Holdings Ltd. (f).......... 167,667 195,158
1,000 Hartford Financial Services Group, Inc. 100,650 114,375
8,200 Mid Ocean Ltd................................ 454,472 643,700
21,400 Travelers Property Casualty Corp............. 781,793 917,525
12,400 Unum Corp.................................... 584,507 688,200
------------- -------------
3,981,287 5,186,796
------------- -------------
LEISURE TIME-AMUSEMENTS-1.67%
30,600 Carnival Corp. Class A....................... 689,191 1,212,525
10,000 Disney (Walt) Co............................. 902,727 1,050,625
------------- -------------
1,591,918 2,263,150
------------- -------------
MACHINERY-0.48%
17,200 Teleflex, Inc................................ 510,924 653,600
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
MACHINERY-OIL AND WELL-0.84%
8,200 Cooper Cameron Corp. (a)..................... $ 345,584 $ 418,200
16,200 Halliburton Co............................... 688,516 721,913
------------- -------------
1,034,100 1,140,113
------------- -------------
MACHINERY-TOOLS-1.46%
45,800 Danaher Corp................................. 1,322,122 1,680,288
4,600 SPX Corp..................................... 251,966 296,125
------------- -------------
1,574,088 1,976,413
------------- -------------
MEDICAL SUPPLIES-1.27%
8,800 Arterial Vascular Engineering, Inc. (a)...... 321,413 314,600
4,500 STERIS Corp. (a)............................. 249,754 286,172
24,600 US Surgical Corp............................. 843,263 1,122,375
------------- -------------
1,414,430 1,723,147
------------- -------------
MEDICAL TECHNOLOGY-0.35%
2,000 Boston Scientific Corp. (a).................. 123,376 143,250
5,100 Medtronic, Inc. (with rights)................ 189,736 325,125
------------- -------------
313,112 468,375
------------- -------------
METALS-FABRICATING-0.50%
13,500 Newell Co.................................... 555,178 672,469
------------- -------------
METALS-MINING AND MISCELLANEOUS-0.24%
13,600 Newmont Mining Corp.......................... 481,314 321,300
------------- -------------
MISCELLANEOUS-0.12%
4,000 Stanley Works................................ 179,912 166,250
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-0.75%
11,700 Compaq Computer Corp......................... 366,253 331,988
5,100 International Business Machines Corp. 541,994 585,544
1,000 Xerox Corp................................... 91,806 101,625
------------- -------------
1,000,053 1,019,157
------------- -------------
OIL AND GAS FIELD SERVICES-0.40%
7,000 Camco International, Inc..................... 391,574 545,125
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-0.95%
8,100 British Petroleum Co. plc ADR................ 581,698 714,825
2,800 Chevron Corp................................. 221,936 232,575
9,900 USX-Marathon Group, Inc...................... 324,421 339,694
------------- -------------
1,128,055 1,287,094
------------- -------------
OIL-REFINING-1.10%
4,000 Atlantic Richfield Co........................ 308,994 312,500
15,300 Mobil Corp................................... 1,049,164 1,172,363
------------- -------------
1,358,158 1,484,863
------------- -------------
PAPER-0.45%
13,800 Fort James Corp.............................. 577,721 614,100
------------- -------------
PERSONAL SERVICES-0.62%
19,500 Service Corp. International.................. 666,914 836,063
------------- -------------
PRINTING-0.38%
4,400 Donnelley (R.R.) & Sons Co................... 159,921 201,300
8,000 Valassis Communications, Inc. (a)............ 212,612 308,500
------------- -------------
372,533 509,800
------------- -------------
</TABLE>
60
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
PUBLISHING-1.92%
13,800 Time Warner, Inc............................. $ 799,286 $ 1,179,038
20,500 Tribune Co................................... 1,147,762 1,410,656
------------- -------------
1,947,048 2,589,694
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.97%
5,700 Burlington Northern Santa Fe Corp............ 521,841 559,669
25,000 Norfolk Southern Corp........................ 797,538 745,313
------------- -------------
1,319,379 1,304,982
------------- -------------
REAL ESTATE-INVESTMENT TRUST-1.34%
20,100 Crescent Real Estate Equities Trust.......... 737,012 675,863
23,600 Starwood Hotels & Resorts.................... 1,187,917 1,140,175
------------- -------------
1,924,929 1,816,038
------------- -------------
RESTAURANTS AND FRANCHISING-0.52%
10,100 McDonald's Corp.............................. 537,211 696,900
------------- -------------
RETAIL-DEPARTMENT STORES-2.27%
9,000 Dayton Hudson Corp........................... 347,564 436,500
8,700 Federated Department Stores, Inc. (a) 362,020 468,169
9,800 Kohl's Corp. (a)............................. 255,383 508,375
10,900 Neiman-Marcus Group, Inc. (a)................ 309,663 473,469
19,400 Wal-Mart Stores, Inc......................... 729,123 1,178,550
------------- -------------
2,003,753 3,065,063
------------- -------------
RETAIL-GROCERY-0.68%
21,700 Fred Meyer, Inc. (a)......................... 836,034 922,250
------------- -------------
RETAIL-MISCELLANEOUS-1.02%
35,342 CVS Corp..................................... 1,018,929 1,376,129
------------- -------------
RETAIL-SPECIALTY-2.07%
25,300 Cendant Corp. (a)............................ 783,340 528,138
19,100 General Nutrition Companies, Inc. (a)........ 518,422 594,488
11,550 Home Depot, Inc.............................. 592,030 959,372
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
18,900 Rite Aid Corp................................ $ 638,530 $ 709,931
------------- -------------
2,532,322 2,791,929
------------- -------------
TELECOMMUNICATIONS-0.73%
1,000 Lucent Technologies, Inc..................... 36,096 83,188
12,400 Nokia Oyj Corp., ADR Class A................. 560,011 899,775
------------- -------------
596,107 982,963
------------- -------------
TELECOMMUNICATION EQUIPMENT-0.73%
13,800 Tellabs, Inc. (a)............................ 822,206 988,425
------------- -------------
TELEPHONE SERVICES-4.84%
13,800 AirTouch Communications, Inc. (a)............ 648,345 806,438
11,500 ALLTEL Corp.................................. 397,784 534,750
13,600 AT & T Corp.................................. 650,090 776,900
19,400 MCI Communications Corp...................... 784,191 1,127,625
30,700 SBC Communications, Inc...................... 962,787 1,228,000
3,100 Telecomunicacoes Brasileiras S.A.-Telebras
ADR........................................ 350,631 338,481
1,600 Vodafone Group plc ADR....................... 102,695 201,700
31,600 WorldCom, Inc. (a)........................... 1,127,833 1,530,625
------------- -------------
5,024,356 6,544,519
------------- -------------
TEXTILE MANUFACTURING-0.23%
9,200 Unifi, Inc................................... 356,862 315,100
------------- -------------
TOBACCO-0.99%
34,000 Philip Morris Companies, Inc................. 1,383,279 1,338,750
------------- -------------
TOYS-0.38%
12,000 Mattel, Inc.................................. 464,737 507,750
------------- -------------
WASTE DISPOSAL-1.07%
29,200 USA Waste Services, Inc. (a)................. 1,202,766 1,441,750
------------- -------------
TOTAL COMMON STOCKS.......................... $ 102,868,010 $ 127,572,757
------------- -------------
------------- -------------
</TABLE>
61
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
SHORT-TERM INVESTMENTS-5.54%
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Value (c)
-------- -------------
<C> <S> <C> <C>
INVESTMENT COMPANY-1.45%
$1,954,094 First American Prime Obligation Fund, Current
rate -- 5.13%.............................. $ 1,954,094
-------------
DIVERSIFIED FINANCE-0.59%
800,000 Rio Tinto America, Inc., 5.62%, 7-10-1998
(e)........................................ 798,773
-------------
FINANCE COMPANIES-0.55%
750,000 Preferred Rec Funding, 5.64%, 7-1-1998 (e)... 749,885
-------------
FOOD-GROCERY, MISCELLANEOUS-2.58%
2,300,000 Kellogg Company, 5.62%, 7-24-1998............ 2,291,551
1,200,000 Kellogg Company, 5.63%, 7-28-1998............ 1,194,848
-------------
3,486,399
-------------
UTILITIES-TELEPHONE-0.37%
500,000 France Telecom, 5.63%, 7-27-1998............. 497,938
-------------
TOTAL SHORT-TERM INVESTMENTS................. 7,487,089
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$110,355,099) (b).......................... $ 135,059,846
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $110,437,276 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $25,969,768
Unrealized depreciation..................................... (1,347,198)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $24,622,570
- -------------------------------------------------------------------------
</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 3.37% of total net assets as of June 30, 1998.
(e) 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". This security has been determined to be illiquid
under the guidelines established by the Board of Directors. The aggregate
value of this security at June 30, 1998, was $1,548,658, which represents
1.15% of total net assets.
(f) Securities sold within the 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
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
3/19/98 500 Fairfax Financial Holdings Ltd. $167,667
</TABLE>
The aggregate value of these securities at June 30, 1998, was $195,158,
which represents 0.14% of total net assets.
62
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES
Schedule of Investments
June 30,1998 (Unaudited)
COMMON STOCKS-92.72%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
AUSTRALIA - 1.75%
114,200 Broken Hill Proprietary Co. Ltd. -- STEEL AND
IRON....................................... $ 1,126,723 $ 965,384
121,100 Westpac Banking Corp. Ltd. -- BANKS.......... 600,706 738,723
------------ ------------
1,727,429 1,704,107
------------ ------------
DENMARK-1.29%
14,000 Unidanmark A/S Class A -- BANKS.............. 725,372 1,258,107
------------ ------------
FINLAND-0.95%
76,800 Merita plc A Shares -- BANKS................. 393,689 506,727
15,000 UPM-Kymmene Corp. -- PAPER................... 307,943 412,831
------------ ------------
701,632 919,558
------------ ------------
FRANCE-17.05%
10,610 Alcatel Alsthom -- TELECOMMUNICATIONS........ 1,002,308 2,160,256
18,600 Axa -- INSURANCE............................. 1,263,353 2,091,962
19,500 Banque Nationale de Paris -- BANKS........... 805,098 1,593,285
9,450 Compagnie de Saint Gobain -- BUILDING
MATERIALS.................................. 1,274,171 1,752,142
18,600 Elf Aquitaine S.A. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 1,701,089 2,614,952
14,800 Michelin (C.G.D.E.) Class B -- RUBBER AND
PLASTIC.................................... 916,273 854,317
38,488 Rhone -- POULENC S.A. -- BUILDING
MATERIALS.................................. 1,185,370 2,170,759
7,000 Suez Lyonnaise des Eaux -- UTILITIES-WATER
AND SEWER.................................. 887,426 1,152,001
10,200 Vivendi -- TELECOMMUNICATIONS................ 1,203,512 2,178,002
------------ ------------
10,238,600 16,567,676
------------ ------------
GERMANY-10.76%
2,710 Allianz AG -- INSURANCE...................... 928,527 893,324
13,900 Daimler-Benz AG -- AUTOMOBILE
MANUFACTURERS.............................. 895,104 1,363,047
16,600 Daimler-Benz AG -- RTS (A) -- AUTOMOBILE
MANUFACTURERS.............................. 17,473 18,393
19,900 Dresdner Bank AG -- BANKS.................... 838,068 1,072,726
34,800 Hoechst AG -- CHEMICALS...................... 1,111,940 1,737,108
12,200 Mannesmann AG -- MACHINERY................... 476,321 1,237,573
21,670 Metro AG -- CONSUMER GOODS................... 1,013,306 1,314,607
3,700 Thyssen AG -- STEEL AND IRON................. 747,065 936,787
2,780 Viag AG -- ELECTRIC PRODUCTS................. 1,185,718 1,879,003
------------ ------------
7,213,522 10,452,568
------------ ------------
HONG KONG-1.84%
52,405 HSBC Holdings plc -- BANKS................... 1,163,620 1,281,618
74,500 Swire Pacific Ltd. "A" -- DIVERSIFIED
COMPANIES.................................. 600,798 281,228
233,000 Wharf Holdings Ltd. -- REAL ESTATE........... 632,322 230,035
------------ ------------
2,396,740 1,792,881
------------ ------------
ITALY-4.58%
134,800 Credito Italiano -- BANKS.................... 276,631 705,642
179,300 ENI S.p.A. -- OIL-REFINING................... 961,655 1,175,126
92,000 Istituto Bancario San Paolo di
Torino -- BANKS............................ 1,378,381 1,327,557
256,200 Telecom Italia S.p.A -- TELEPHONE SERVICES... 911,853 1,240,247
------------ ------------
3,528,520 4,448,572
------------ ------------
JAPAN-13.87%
44,000 Asahi Breweries Ltd. -- BEVERAGE............. 538,438 554,815
26,000 Honda Motor Co. Ltd. -- AUTOMOBILE
MANUFACTURERS.............................. 789,347 925,460
21,000 Ito-Yokado Co. Ltd. -- FOOD.................. 1,055,184 988,075
144 Japan Tobacco, Inc. -- TOBACCO............... 1,092,185 974,284
101,000 Matsushita Electric Industrial Co.
Ltd. -- ELECTRIC PRODUCTS.................. 1,769,221 1,622,870
12,600 Nintendo Co. Ltd. -- TOYS.................... 901,597 1,166,625
176 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 1,587,942 1,458,371
41,000 Omron Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 737,397 626,292
17,800 Orix Corp. -- LEASING........................ 676,771 1,201,758
17,300 Promise Co. Ltd. -- FINANCE SERVICES......... 783,424 711,770
</TABLE>
63
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES (CONTINUED)
Schedule of Investments
June 30,1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
77,000 Ricoh Co. Ltd. -- OFFICE EQUIPMENT AND
SUPPLIES................................... $ 925,936 $ 810,585
22,000 Sekisui Chemical Co. Ltd. -- CHEMICALS....... 168,423 112,548
15,600 Sony Corp. -- ELECTRONIC COMPONENTS.......... 1,080,487 1,343,229
220,000 Sumitomo Trust & Banking Co. -- BANKS........ 1,871,689 982,815
------------ ------------
13,978,041 13,479,497
------------ ------------
MALAYSIA-0.27%
145,000 Genting Berhad -- LEISURE TIME-AMUSEMENTS.... 590,817 262,206
------------ ------------
NETHERLANDS-4.05%
31,350 Heineken NV -- BEVERAGE...................... 990,739 1,231,376
18,800 KPN NV -- TELEPHONE SERVICES................. 528,928 723,646
17,800 Philips Electronics NV -- ELECTRIC
PRODUCTS................................... 1,015,844 1,496,313
18,800 TNT Post Group NV (a) -- TRANSPORTATION...... 362,123 480,582
------------ ------------
2,897,634 3,931,917
------------ ------------
SINGAPORE-0.40%
124,000 United Overseas Bank, Ltd. -- BANKS.......... 601,030 385,321
------------ ------------
SPAIN-3.94%
72,000 Argentaria S.A. -- BANKS..................... 1,270,053 1,617,872
47,673 Telefonica S.A. -- TELECOMMUNICATIONS........ 1,243,448 2,207,862
------------ ------------
2,513,501 3,825,734
------------ ------------
SWEDEN-7.02%
90,700 ABB AB A Shares -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 1,441,272 1,285,170
84,567 Astra AB -- CLASS B SHARES -- DRUGS.......... 1,466,970 1,686,052
54,000 Electrolux AB Ser B -- HOUSEHOLD PRODUCTS.... 594,459 927,660
30,200 Fastights AB Balder (Warrants) (a) -- REAL
ESTATE..................................... 0 954
73,300 Nordbanken Holding AB -- BANKS............... 406,791 537,693
30,200 Svenska Handelsbanken -- BANKS............... 653,146 1,401,146
33,000 Volvo AB-B Shares -- AUTOMOBILE
MANUFACTURERS.............................. 970,158 982,771
------------ ------------
5,532,796 6,821,446
------------ ------------
SWITZERLAND-7.67%
8,060 Credit Suisse Group -- REG -- BANKS.......... 1,094,915 1,793,414
468 Nestle S.A. Registered -- FOOD............... 531,175 1,001,535
670 Novartis AG -- DRUGS......................... 829,644 1,114,900
690 S.M.H. AG -- MISCELLANEOUS................... 434,122 533,149
494 SGS Societe Generale de Surveillance Holding
S.A. -- BANKS.............................. 965,942 837,338
3,410 Zurich Versicherungs
Gesellsharf -- INSURANCE................... 1,152,483 2,176,213
------------ ------------
5,008,281 7,456,549
------------ ------------
UNITED KINGDOM-17.28%
140,400 B.A.T. Industries plc -- TOBACCO............. 1,194,888 1,402,030
306,432 British Aerospace plc -- AEROSPACE AND
EQUIPMENT.................................. 1,263,181 2,351,895
126,700 British Petroleum Co.
plc -- OIL-MISCELLANEOUS................... 1,733,515 1,844,455
64,910 Cadbury Schweppes plc -- FOOD................ 553,238 1,005,045
130,814 Diageo, plc -- BEVERAGE...................... 1,068,793 1,557,307
67,320 EMI Group plc -- MISCELLANEOUS............... 725,052 590,259
66,100 Granada Group plc -- DIVERSIFIED COMPANIES... 926,309 1,217,577
57,000 Imperial Chemical Industries
plc -- CHEMICALS........................... 948,452 914,905
280,900 LucasVarity plc -- AUTOMOBILE AND MOTOR
VEHICLE PARTS.............................. 956,252 1,123,664
94,800 Mirror Group plc -- PUBLISHING............... 290,173 357,473
93,400 National Power plc -- UTILITIES-ELECTRIC..... 739,376 878,926
94,300 National Westminster Bank plc -- BANKS....... 1,372,636 1,688,253
76,300 Prudential Corp. plc -- INSURANCE............ 711,883 1,005,721
79,200 Unilever plc -- CONSUMER GOODS............... 412,343 850,354
------------ ------------
12,896,091 16,787,864
------------ ------------
TOTAL COMMON STOCKS.......................... $70,550,006 $90,094,003
------------ ------------
------------ ------------
</TABLE>
64
<PAGE>
PREFERRED STOCKS-0.64%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
ITALY-0.64%
142,570 Fiat S.p.A. ORD -- AUTOMOBILE
MANUFACTURERS.............................. $ 473,500 $ 624,002
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $71,023,506 $90,718,005
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-6.40%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-6.40%
$6,214,900 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 6,214,900
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$77,238,406) (b)........................... $96,932,905
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $77,283,625 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $23,426,834
Unrealized depreciation.......................................... (3,777,554)
- ------------------------------------------------------------------------------
Net unrealized appreciation...................................... $19,649,280
- ------------------------------------------------------------------------------
</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.
65
<PAGE>
FORTIS SERIES FUND, INC.
MID CAP STOCK SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-93.36%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
BASIC INDUSTRY-10.34%
700 ABT Building Products Corp. (a).............. $ 10,240 $ 12,031
1,400 Allied Waste Industries, Inc. (a)............ 34,756 33,600
600 America Online, Inc. (a)..................... 64,884 63,600
500 AptarGroup, Inc.............................. 30,445 31,094
1,200 Ball Corp.................................... 43,017 48,225
1,600 Cadence Design Systems, Inc. (a)............. 57,829 50,000
1,700 Caraustar Industries, Inc.................... 56,918 49,087
900 Centex Construction Products, Inc............ 34,830 34,650
1,500 Compuware Corp. (a).......................... 67,186 76,687
2,100 Crompton & Knowles Corp...................... 61,690 52,894
1,300 Cytec Industries, Inc. (a)................... 73,196 57,525
300 Federal-Mogul Corp........................... 19,375 20,250
2,700 International Specialty Products, Inc. (a)... 53,389 50,287
600 Solectron Corp. (a).......................... 24,336 25,237
----------- -----------
632,091 605,167
----------- -----------
CAPITAL SPENDING-17.58%
1,600 AccuStaff, Inc. (a).......................... 58,889 50,000
600 Apple Computer, Inc. (a)..................... 16,896 17,212
600 Billing Concepts Corp. (a)................... 17,775 9,300
2,100 BMC Software, Inc. (a)....................... 94,887 109,069
600 Case Corp.................................... 39,924 28,950
2,200 CHS Electronics, Inc. (a).................... 45,837 39,325
1,200 CORT Business Services Corp. (a)............. 50,848 37,800
400 Cummins Engine Co., Inc...................... 20,766 20,500
900 Danaher Corp................................. 34,026 33,019
1,000 Gulfstream Aerospace Corp. (a)............... 45,484 46,500
1,300 Hertz Corp. Class A.......................... 62,371 57,606
600 Keane, Inc. (a).............................. 31,068 33,600
800 Linear Technology Corp....................... 58,156 48,250
1,800 Maxim Integrated Products, Inc. (a).......... 66,662 57,037
900 Networks Associates, Inc. (a)................ 38,147 43,087
1,500 Sabre Group Holdings, Inc. (a)............... 56,557 57,000
1,400 Snyder Communications, Inc. (a).............. 69,562 61,600
1,200 Storage Technology Corp. (a)................. 48,940 52,050
1,100 Stratus Computer, Inc. (a)................... 48,013 27,844
1,100 Tellabs, Inc.(a)............................. 75,331 78,787
1,400 Timken (The) Co.............................. 48,025 43,137
1,300 Waters Corp. (a)............................. 68,677 76,619
----------- -----------
1,096,841 1,028,292
----------- -----------
CONSUMER CYCLICAL-17.74%
800 Computer Task Group, Inc..................... 29,663 26,800
700 Cracker Barrel Old Country Store, Inc........ 27,256 22,225
900 Dollar Tree Stores, Inc. (a)................. 32,133 36,562
2,700 Family Dollar Stores, Inc.................... 48,501 49,950
1,200 First Security Corp.......................... 28,247 25,687
1,700 Furniture Brands International, Inc. (a)..... 53,807 47,706
1,200 General Nutrition Companies, Inc. (a)........ 42,387 37,350
1,000 Harley-Davidson, Inc......................... 35,784 38,750
700 King World Productions, Inc. (a)............. 19,703 17,850
2,400 Leggett & Platt, Inc......................... 66,706 60,000
1,000 Nautica Enterprises, Inc. (a)................ 27,494 26,812
700 New Holland NV (a)........................... 13,890 13,737
600 Payless ShoeSource, Inc. (a)................. 44,018 44,212
1,700 Proffitt's, Inc. (a)......................... 64,768 68,637
500 Pulitzer Publishing Co....................... 42,082 44,625
700 RenaissanceRe Holdings, Ltd.................. 34,222 32,419
500 Rohm & Haas Co............................... 55,395 51,969
1,400 Ross Stores, Inc............................. 61,181 60,200
1,500 Sterling Software, Inc. (a).................. 44,849 44,344
200 The McClatchy Co............................. 5,858 6,925
3,700 TJX Companies, Inc........................... 84,801 89,263
800 USA Waste Services, Inc. (a)................. 38,658 39,500
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
1,200 VF Corp...................................... $ 62,410 $ 61,800
600 Whole Foods Market, Inc. (a)................. 37,754 36,300
1,700 Zale Corp. (a)............................... 52,724 54,081
----------- -----------
1,054,291 1,037,704
----------- -----------
CONSUMER NON-CYCLICAL-7.16%
800 Alberto-Culver Co............................ 24,019 23,200
1,100 American Power Conversion Corp. (a).......... 35,012 33,000
1,300 Bowne & Co., Inc............................. 56,146 58,500
1,600 Cellstar Corp. (a)........................... 25,937 20,700
500 Estee Lauder Companies, Inc. Class A......... 35,332 34,844
1,600 Hormel Foods Corp............................ 53,564 55,300
800 IHOP Corp. (a)............................... 35,844 33,100
1,600 Interstate Bakeries Corp..................... 52,395 53,100
600 Lancaster Colony Corp........................ 25,561 22,725
1,100 STAR Telecommunications, Inc. (a)............ 25,737 24,613
2,700 Universal Foods Corp......................... 66,948 59,906
----------- -----------
436,495 418,988
----------- -----------
ENERGY & RELATED-7.68%
1,900 BEC Energy................................... 76,573 78,850
800 Cliffs Drilling Co. (a)...................... 35,713 26,250
600 Cooper Cameron Corp. (a)..................... 36,168 30,600
1,200 El Paso Natural Gas Co....................... 44,682 45,900
1,400 Helmerich & Payne, Inc....................... 42,631 31,150
1,100 National Fuel Gas Co......................... 50,635 47,919
1,700 Noble Drilling Corp. (a)..................... 54,362 40,906
1,500 Questar Corp................................. 32,367 29,438
1,500 Rowan Companies, Inc. (a).................... 42,279 29,156
1,700 Sun Co., Inc................................. 71,524 65,981
700 Valero Energy, Corp. (a)..................... 22,591 23,275
----------- -----------
509,525 449,425
----------- -----------
FINANCE-13.44%
600 A.G. Edwards, Inc............................ 28,087 25,613
1,100 AFLAC, Inc................................... 35,882 33,344
1,100 Bear Stearns Companies, Inc.................. 64,175 62,563
1,300 Charter One Financial, Inc. (a).............. 42,918 43,794
1,500 City National Corp........................... 59,529 55,406
600 CMAC Investment Corp......................... 37,718 36,900
700 Cullen/Frost Bankers, Inc.................... 40,991 37,975
800 Downey Financial Corp........................ 26,405 26,150
1,200 FIRSTPLUS Financial Group, Inc. (a).......... 60,298 43,200
1,100 Imperial Bancorp (a)......................... 33,144 33,000
1,200 Mercantile Bankshares Corp................... 45,625 41,775
550 North Fork Bancorporation, Inc............... 14,910 13,441
1,700 Old Republic International Corp.............. 51,359 49,831
800 PMI Group, Inc............................... 64,563 58,700
1,200 Provident Financial Group, Inc............... 63,236 54,750
1,600 SouthTrust Corp.............................. 70,263 69,600
1,400 T. Rowe Associates, Inc...................... 49,788 52,588
900 Zions Bancorporation......................... 47,508 47,813
----------- -----------
836,399 786,443
----------- -----------
HEALTH CARE-8.25%
1,000 Arterial Vascular Engineering, Inc. (a)...... 33,450 35,750
1,600 Ballard Medical Products..................... 40,058 28,800
1,300 Biogen, Inc. (a)............................. 58,529 63,700
1,900 Biomet, Inc.................................. 56,814 62,819
200 DENTSPLY International, Inc.................. 6,283 5,000
1,100 Elan Corp. (a)............................... 69,055 70,744
700 Lincare Holdings, Inc........................ 30,133 29,444
700 Rexall Sundown, Inc. (a)..................... 24,748 24,675
1,300 STERIS Corp. (a)............................. 71,652 82,672
</TABLE>
66
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
1,700 Watson Pharmaceuticals, Inc. (a)............. $ 67,612 $ 79,369
----------- -----------
458,334 482,973
----------- -----------
METALS-MINING AND MISCELLANEOUS-1.04%
1,700 Bethlehem Steel Corp. (a).................... 27,049 21,144
200 Cleveland-Cliffs, Inc........................ 11,321 10,725
1,000 General Cable Corp........................... 30,127 28,875
----------- -----------
68,497 60,744
----------- -----------
TRANSPORTATION-1.35%
500 GATX Corp. (a)............................... 20,977 21,938
1,300 Trico Marine Services, Inc. (a).............. 25,888 17,794
500 UAL Corp. (a)................................ 39,008 39,000
----------- -----------
85,873 78,732
----------- -----------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
UTILITIES-8.78%
900 AES Corp. (a)................................ $ 45,923 $ 47,306
1,800 Century Telephone Enterprises, Inc........... 80,147 82,575
2,500 Commonwealth Energy System................... 94,219 94,375
1,300 DQE, Inc..................................... 46,758 46,800
1,800 GPU, Inc..................................... 76,460 68,063
1,100 Montana Power Co............................. 40,650 38,225
1,500 Pinnacle West Capital Corp................... 66,866 67,500
1,200 Sierra Pacific Resources..................... 44,090 43,575
1,700 Tel-Save Holdings, Inc. (a).................. 39,631 25,075
----------- -----------
534,744 513,494
----------- -----------
TOTAL COMMON STOCKS.......................... $ 5,713,090 $ 5,461,962
----------- -----------
----------- -----------
</TABLE>
SHORT-TERM INVESTMENTS-11.82%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- -----------
<C> <S> <C>
BANKS-11.48%
$671,656 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 671,656
-----------
U.S. TREASURY BILL-0.34%
20,000 U.S. Treasury Bill, 5.13%, 9-24-1998 (e)..... 19,770
-----------
TOTAL SHORT-TERM INVESTMENTS................. 691,426
-----------
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$6,404,508) (b)............................ $6,153,388
-----------
-----------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $6,404,508 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 148,557
Unrealized depreciation..................................... (399,677)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $ (251,120)
- -------------------------------------------------------------------------
</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) Security pledged as initial margin deposit for open financial futures
position detailed below:
<TABLE>
<CAPTION>
FINANCIAL FUTURES-LONG
MARKET
VALUE UNREALIZED
COVERED APPRECIATION
NUMBER OF BY (DEPRECIATION)
ISSUER CONTRACT(S) CONTRACTS EXPIRATION AT 6/30/98
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
September
Mid Cap 400............................................. 1 $ 182,300 98 $ 3,150
</TABLE>
67
<PAGE>
FORTIS SERIES FUND, INC.
SMALL CAP VALUE SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-82.02%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
AGRICULTURE-0.58%
1,600 Stratus Computer, Inc. (a)................... $ 56,466 $ 40,500
----------- -----------
APPAREL-2.20%
10,000 Gerber Childrenswear, Inc.................... 130,000 154,375
----------- -----------
BANKS-9.77%
2,700 CCB Financial Group.......................... 299,389 286,875
2,000 Community Bank System, Inc................... 69,977 62,625
8,000 First Source Bancorp, Inc.................... 80,000 77,500
2,200 GBC Bancorp.................................. 55,000 58,300
3,000 New England Community Bancorp, Inc........... 69,375 69,000
4,500 Trico Bancshares............................. 151,500 132,187
----------- -----------
725,241 686,487
----------- -----------
CARPETS AND FLOOR COVERINGS-1.62%
12,000 Congoleum Corp. Class A...................... 119,298 114,000
----------- -----------
CLOSED END GLOBAL COUNTRY FUND-5.90%
10,000 Central European Value Fund.................. 129,250 111,250
10,000 Emerging Markets Telecomm Fund............... 149,975 125,000
11,000 Latin American Equity Fund, Inc.............. 150,710 114,125
10,000 Morgan Stanley Asia Pacific Fund............. 64,350 64,375
----------- -----------
494,285 414,750
----------- -----------
COMPUTER-HARDWARE-3.66%
8,200 Smart Modular Technologies................... 110,749 119,925
8,000 Splash Technology Holdings................... 139,698 137,500
----------- -----------
250,447 257,425
----------- -----------
CONSUMER GOODS-4.43%
12,900 Jostens, Inc................................. 311,949 311,212
----------- -----------
ELECTRONIC COMPONENTS-1.07%
5,100 Sawtek, Inc. (a)............................. 70,925 75,225
----------- -----------
ELECTRONIC-CONTROLS AND EQUIPMENT-3.61%
10,400 Brooks Automation, Inc....................... 149,526 135,200
8,200 CFM Technologies, Inc........................ 97,675 118,900
----------- -----------
247,201 254,100
----------- -----------
MACHINERY-3.81%
17,500 PPT Vision, Inc.............................. 137,271 133,438
7,300 Speedfam International, Inc.................. 174,806 134,594
----------- -----------
312,077 268,032
----------- -----------
MEDICAL SUPPLIES-1.72%
12,000 Perrigo Co. (a).............................. 139,687 120,750
----------- -----------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ----------- -----------
<C> <S> <C> <C>
OIL AND GAS FIELD SERVICES-3.32%
5,300 Chieftain International, Inc................. $ 123,676 $ 125,544
8,200 Key Energy Group, Inc........................ 138,772 107,625
----------- -----------
262,448 233,169
----------- -----------
PUBLISHING-3.29%
13,600 Hollinger International, Inc................. 219,454 231,200
----------- -----------
REAL ESTATE-INVESTMENT TRUST-9.23%
5,000 Federal Realty Investment Trust.............. 122,474 120,313
3,000 Gables Residential Trust..................... 82,636 81,375
20,000 IRT Property Co.............................. 237,056 220,000
12,000 Summit Properties, Inc....................... 245,633 227,250
----------- -----------
687,799 648,938
----------- -----------
RESTAURANTS AND FRANCHISING-1.60%
6,200 Landry's Seafood Restaurants, Inc. (a)....... 125,214 112,181
----------- -----------
RETAIL-DEPARTMENT STORES-1.84%
18,000 Spiegel, Inc. Cl A........................... 107,375 129,375
----------- -----------
RETAIL-LEISURE TIME-2.30%
7,000 Eagle Hardware & Garden...................... 124,875 161,875
----------- -----------
SAVINGS AND LOANS, MORTGAGE COMPANIES-6.74%
8,000 First Savings Bank of Washington............. 207,000 202,000
5,000 St Paul Bancorp.............................. 131,800 112,969
12,000 Warren Bancorp, Inc.......................... 151,375 159,000
----------- -----------
490,175 473,969
----------- -----------
SHIP BUILDING, SHIPPING-4.57%
12,000 Knightsbridge Tankers Ltd.................... 349,788 321,000
----------- -----------
TELECOMMUNICATIONS-4.70%
14,500 General Communication Cl A................... 112,375 87,906
9,700 Jones Intercable, Inc. Cl A.................. 185,763 242,500
----------- -----------
298,138 330,406
----------- -----------
TELECOMMUNICATION EQUIPMENT-6.06%
12,900 Federal Signal Corp.......................... 305,010 313,631
11,200 Hypercom Corp................................ 126,109 112,000
----------- -----------
431,119 425,631
----------- -----------
TOTAL COMMON STOCKS.......................... $ 5,953,961 $ 5,764,600
----------- -----------
----------- -----------
</TABLE>
SHORT-TERM INVESTMENTS-18.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -----------
<C> <S> <C>
BANKS-18.13%
$1,273,821 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $1,273,821
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$7,227,782) (b)............................ $7,038,421
-----------
-----------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $7,229,282 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 214,405
Unrealized depreciation..................................... (405,266)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $ (190,861)
- -------------------------------------------------------------------------
</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 4.57% of total net assets as of June 30, 1998.
68
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-90.85%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ARGENTINA-1.07%
130,000 Disco S.A. ADR (a)(f) -- RETAIL-GROCERY...... $ 2,049,750 $ 4,160,000
------------- -------------
AUSTRIA-1.14%
33,000 OMV AG (e) -- OIL-CRUDE PETROLEUM AND GAS.... 3,380,433 4,420,269
------------- -------------
BELGIUM-1.02%
14,120 Barco N.V. -- TELECOMMUNICATION EQUIPMENT.... 1,993,251 3,946,466
------------- -------------
BRAZIL-1.22%
24,000 Telecomunicacoes Brasileiras S.A.-Telebras
ADR (f) -- TELEPHONE SERVICES.............. 1,514,978 2,620,500
52,000 Uniao de Bancos Brasileiros S.A. GDR
(f) -- BANKS............................... 1,755,000 1,534,000
74,000 Votorantim Celulose e Papel S.A. ADR
(f) -- PAPER............................... 1,104,080 566,218
------------- -------------
4,374,058 4,720,718
------------- -------------
CANADA-0.53%
85,500 Newbridge Networks Corp. ADR
(a)(f) -- TELECOMMUNICATIONS............... 2,307,558 2,046,656
------------- -------------
DENMARK-0.07%
6,900 Vestas Wind Systems A/S
(a)(e) -- MACHINERY........................ 273,645 272,408
------------- -------------
FINLAND-4.41%
99,100 KCI Konecranes International plc
(e) -- MACHINERY........................... 2,400,981 5,021,380
164,000 Nokia Oyj K Shares -- TELECOMMUNICATION
EQUIPMENT.................................. 1,611,926 12,076,187
------------- -------------
4,012,907 17,097,567
------------- -------------
FRANCE-4.73%
86,000 Companie Generale de Geophysique S.A. ADR
(a)(f) -- OIL AND GAS FIELD SERVICES....... 1,721,790 2,526,250
10,000 Dexia France -- BANKS........................ 1,242,782 1,346,345
17,500 Groupe Danone -- FOOD........................ 2,981,850 4,825,091
29,100 Michelin (C.G.D.E.) Class B -- RUBBER AND
PLASTIC.................................... 1,774,454 1,679,772
63,327 Rhone-Poulenc (Warrants)
(a)(f) -- CHEMICALS........................ 216,168 403,710
63,327 Rhone-Poulenc S.A. ADR (f) -- CHEMICALS...... 2,572,753 3,558,186
34,000 Sanofi S.A. -- DRUGS......................... 1,996,096 3,998,346
------------- -------------
12,505,893 18,337,700
------------- -------------
GERMANY-3.71%
28,000 Bayerische Vereinsbank AG -- BANKS........... 1,822,118 2,381,163
45,000 Dresdner Bank AG -- BANKS.................... 2,173,463 2,425,762
10,000 Mannesmann AG -- MACHINERY................... 891,762 1,014,404
179,660 Phoenix AG -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 2,898,863 4,125,710
38,000 SGL Carbon AG -- STEEL AND IRON.............. 1,949,942 4,442,105
------------- -------------
9,736,148 14,389,144
------------- -------------
HONG KONG-0.29%
210,000 Hutchison Whampoa Ltd. -- DIVERSIFIED
COMPANIES.................................. 1,379,712 1,108,458
------------- -------------
HUNGARY-1.34%
35,000 Matav Rt. ADR (a)(f) -- TELEPHONE SERVICES... 652,750 1,030,312
155,000 MOL Magyar Olaj-es Gazipari Rt. GDR
(e) -- OIL-CRUDE PETROLEUM AND GAS......... 1,255,500 4,179,993
------------- -------------
1,908,250 5,210,305
------------- -------------
ISRAEL-1.56%
84,000 ECI Telecommunications
Ltd. -- TELECOMMUNICATION EQUIPMENT........ 1,662,746 3,181,500
81,000 Teva Pharmaceutical Industries Ltd. ADR
(f) -- DRUGS............................... 2,755,500 2,850,187
------------- -------------
4,418,246 6,031,687
------------- -------------
ITALY-1.82%
900,000 Banca di Roma (a) -- BANKS................... 1,766,797 1,873,365
52,000 Industrie Natuzzi S.p.A. ADR
(f) -- FURNITURE........................... 765,795 1,352,000
519,000 Telecom Italia S.p.A. -- TELEPHONE
SERVICES................................... 3,457,555 3,820,492
------------- -------------
5,990,147 7,045,857
------------- -------------
</TABLE>
69
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
JAPAN-3.90%
135,000 Canon, Inc. ADR (f) -- OFFICE EQUIPMENT AND
SUPPLIES................................... $ 2,113,633 $ 3,088,125
48,000 Honda Motor Co. Ltd. -- AUTOMOBILE
MANUFACTURERS.............................. 1,813,932 1,708,542
24,000 Kyocera Corp. -- ELECTRONIC COMPONENTS....... 1,947,177 1,172,461
118,600 Laox Co. Ltd. -- RETAIL-ELECTRIC PRODUCTS,
RADIO, TV, AUDIO........................... 2,231,544 730,648
439 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 3,775,023 3,637,641
30,000 Sony Corp. -- ELECTRONIC COMPONENTS.......... 1,951,042 2,583,132
50,000 Tokyo Electron Limited -- MACHINERY.......... 1,894,508 1,531,145
51,000 Toppan Forms Co. Ltd. (e) -- BUSINESS
SERVICES AND SUPPLIES...................... 462,911 665,864
------------- -------------
16,189,770 15,117,558
------------- -------------
MEXICO-1.05%
51,000 Grupo Televisa S.A. ADR
(f) -- BROADCASTING........................ 1,798,448 1,918,875
68,000 Panamerican Beverages, Inc. Class A
(f) -- BEVERAGE............................ 1,189,321 2,137,750
------------- -------------
2,987,769 4,056,625
------------- -------------
NETHERLANDS-5.25%
56,000 ASM Lithography Holding N.V.
(a)(f) -- MACHINERY........................ 2,209,620 1,627,500
63,000 IHC Caland N.V. -- OIL AND GAS FIELD
SERVICES................................... 2,132,115 3,546,111
112,500 Randstad Holdings N.V. -- BUSINESS SERVICES
AND SUPPLIES............................... 1,260,270 6,774,776
140,000 VNU-Verenigde Bezit -- PUBLISHING............ 3,256,385 5,086,029
24,000 Wolters Kluwer N.V. -- PUBLISHING............ 1,404,741 3,294,071
------------- -------------
10,263,131 20,328,487
------------- -------------
NORWAY-1.87%
118,000 Petroleum Geo-Services ADR (a) -- OIL AND GAS
FIELD SERVICES............................. 1,587,170 3,599,000
130,000 Stolt Comex Seaway, S.A. ADR (a) -- OIL AND
GAS FIELD SERVICES......................... 916,705 2,518,750
65,000 Stolt Comex Seaway, S.A. ADR Class A
(a) -- OIL AND GAS FIELD SERVICES.......... 227,658 1,137,500
------------- -------------
2,731,533 7,255,250
------------- -------------
PORTUGAL-1.26%
65,000 Electricidade De Portugal
S.A. -- UTILITIES-ELECTRIC................. 1,512,855 1,510,990
63,800 Portugal Telecom S.A. ADR -- TELEPHONE
SERVICES................................... 1,989,354 3,377,412
------------- -------------
3,502,209 4,888,402
------------- -------------
SPAIN-3.01%
35,000 Repsol S.A. -- OIL-CRUDE PETROLEUM AND GAS... 1,448,791 1,931,870
70,000 Telefonica S.A. (f) -- TELEPHONE SERVICES.... 4,789,094 9,734,375
------------- -------------
6,237,885 11,666,245
------------- -------------
SWEDEN-3.45%
276,000 Ericsson (L.M.) Telephone Co. Class B
ADR -- TELECOMMUNICATION EQUIPMENT......... 2,352,375 7,900,500
142,500 Hoganas AB Class B -- CHEMICALS.............. 2,474,103 3,180,604
208,000 Industri-Matematik International Corp.
(a) -- COMPUTER-SOFTWARE................... 1,974,108 2,275,000
------------- -------------
6,800,586 13,356,104
------------- -------------
SWITZERLAND-3.12%
3,830 Novartis AG -- DRUGS......................... 5,138,617 6,373,233
300 Roche Holding AG -- DRUGS.................... 1,568,202 2,946,005
7,500 Union Bank of Switzerland -- BANKS........... 2,397,895 2,788,766
------------- -------------
9,104,714 12,108,004
------------- -------------
TAIWAN-0.23%
52,500 Taiwan Semiconductor Manufacturing Co. Ltd.
ADR (a)(f) -- ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR.................................. 1,300,950 885,938
------------- -------------
UNITED KINGDOM-6.14%
800,000 Avis Europe plc -- BUSINESS SERVICES AND
SUPPLIES................................... 1,650,954 3,610,632
491,700 Capita Group plc -- BUSINESS SERVICES AND
SUPPLIES................................... 1,050,020 4,229,168
32,000 Computacenter plc (a)(e) -- BUSINESS SERVICES
AND SUPPLIES............................... 350,716 399,906
110,000 Dr. Solomon's Group plc ADR
(a)(f) -- COMPUTER-SOFTWARE................ 2,321,250 3,836,250
36,300 Energis plc (a) -- TELEPHONE SERVICES........ 174,091 552,670
52,000 Glaxo Wellcome plc ADR (f) -- DRUGS.......... 2,043,923 3,110,250
</TABLE>
70
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
85,000 JBA Holdings plc -- COMPUTER-SOFTWARE........ $ 1,142,196 $ 865,117
675,000 Orange plc (a) -- TELEPHONE SERVICES......... 2,141,022 7,196,654
------------- -------------
10,874,172 23,800,647
------------- -------------
UNITED STATES-38.66%
121,000 3Com Corp. (a) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 1,486,105 3,713,188
150,000 AccuStaff, Inc. (a)(f) -- BUSINESS SERVICES
AND SUPPLIES............................... 3,418,110 4,687,500
49,000 ADC Telecommunications, Inc.
(a)(f) -- TELECOMMUNICATION EQUIPMENT...... 852,495 1,790,031
66,000 Altera Corp. (a) -- ELECTRONIC-SEMICONDUCTOR
AND CAPACITOR.............................. 1,388,406 1,951,125
192,500 Apple South, Inc. (f) -- RESTAURANTS AND
FRANCHISING................................ 2,430,573 2,514,531
106,500 Avant! Corp. (a)(f) -- COMPUTER-SOFTWARE..... 2,471,320 2,635,875
110,000 Bed Bath & Beyond, Inc.
(a)(f) -- RETAIL-SPECIALTY................. 2,189,769 5,699,375
115,500 Blyth Industries, Inc. (a)(f) -- CONSUMER
GOODS...................................... 3,510,585 3,840,375
49,000 Camco International, Inc. -- OIL AND GAS
FIELD SERVICES............................. 2,097,316 3,815,875
139,000 Cendant Corp. (a) -- RETAIL-SPECIALTY........ 3,296,052 2,901,625
166,950 Cheesecake Factory (The), Inc.
(a)(f) -- RESTAURANTS AND FRANCHISING...... 3,046,325 3,777,244
120,000 Cisco Systems, Inc.
(a) -- COMPUTER-COMMUNICATIONS EQUIPMENT... 917,000 11,047,500
28,000 Citrix Systems, Inc.
(a)(f) -- COMPUTER-SOFTWARE................ 1,517,175 1,914,500
9,000 Com21, Inc. (a) -- TELECOMMUNICATIONS........ 108,000 191,250
163,200 Covance, Inc. (a)(f) -- BUSINESS SERVICES AND
SUPPLIES................................... 3,177,281 3,672,000
135,000 Data Processing Resources Corp.
(a) -- BUSINESS SERVICES AND SUPPLIES...... 2,708,975 4,193,438
389,500 DSP Communications, Inc. (a) -- ELECTRONIC
COMPONENTS................................. 6,671,755 5,355,625
22,000 Enron Corp. -- NATURAL GAS TRANSMISSIONS..... 1,100,000 1,189,375
52,000 Galileo International, Inc. -- BUSINESS
SERVICES AND SUPPLIES...................... 1,274,000 2,343,250
220,000 Gartner Group, Inc. Class A
(a)(f) -- BUSINESS SERVICES AND SUPPLIES... 1,100,000 7,700,000
70,000 Heller Financial, Inc. (a) -- FINANCE
SERVICES................................... 1,890,000 2,100,000
130,000 Input/Output, Inc. (a) -- OIL AND GAS FIELD
SERVICES................................... 934,975 2,315,625
106,000 Interim Services, Inc. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 2,292,250 3,405,250
27,000 Intuit, Inc. (a)(f) -- COMPUTER-SOFTWARE..... 1,279,125 1,653,750
79,600 Landry's Seafood Restaurants, Inc.
(a)(f) -- RESTAURANTS AND FRANCHISING...... 2,344,934 1,440,263
105,000 Outback Steakhouse, Inc.
(a)(f) -- RESTAURANTS AND FRANCHISING...... 3,179,413 4,095,000
146,000 Parametric Technology Corp.
(a)(f) -- COMPUTER-SOFTWARE................ 1,081,329 3,960,250
70,100 Perkin-Elmer Corp. (f) -- PRECISION
INSTRUMENTS-TEST, RESEARCH................. 5,006,621 4,359,344
58,500 Pier 1 Imports, Inc. (f) -- RETAIL-HOUSEHOLD
FURNITURE.................................. 1,621,935 1,396,688
126,000 Polo Ralph Lauren Corp. (a) -- APPAREL....... 3,047,870 3,528,000
24,500 Premiere Technologies, Inc. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 771,084 203,273
120,000 R & B Falcon Corp. (a) -- OIL-OFFSHORE
DRILLING................................... 2,081,252 2,715,000
32,600 R.P. Scherer Corp. (a) -- DRUGS.............. 1,599,105 2,889,175
100,000 Service Corp. International -- PERSONAL
SERVICES................................... 2,209,570 4,287,500
3,500 Software.net Corp.
(a) -- RETAIL-MISCELLANEOUS................ 31,500 66,938
21,000 Steelcase, Inc. -- OFFICE EQUIPMENT AND
SUPPLIES................................... 588,000 546,000
35,700 STERIS Corp. (a) -- MEDICAL SUPPLIES......... 615,731 2,270,297
170,000 Sykes Enterprises, Inc. (a) -- BUSINESS
SERVICES AND SUPPLIES...................... 4,100,880 3,410,625
123,000 Synopsys, Inc. (a)(f) -- COMPUTER-SOFTWARE... 3,207,693 5,627,250
90,000 Tellabs, Inc. (a)(f) -- TELECOMMUNICATION
EQUIPMENT.................................. 1,210,073 6,446,250
180,003 Total Renal Care Holdings, Inc.
(a)(f) -- HEALTH CARE SERVICES............. 4,284,899 6,210,097
78,000 Transocean Offshore, Inc. -- OIL-OFFSHORE
DRILLING................................... 2,137,040 3,471,000
35,000 Univision Communications, Inc.
(a) -- BROADCASTING........................ 1,365,000 1,303,750
37,500 Western Atlas, Inc. (a) -- OIL AND GAS FIELD
SERVICES................................... 1,338,427 3,182,813
60,000 Xilinx, Inc.
(a)(f) -- ELECTRONIC-SEMICONDUCTOR AND
CAPACITOR.................................. 1,193,640 2,040,000
66,800 Xylan Corp. (a)(f) -- COMPUTER-COMMUNICATIONS
EQUIPMENT.................................. 2,244,617 1,991,475
------------- -------------
96,418,205 149,849,295
------------- -------------
TOTAL COMMON STOCKS.......................... $ 220,740,922 $ 352,099,790
------------- -------------
------------- -------------
</TABLE>
71
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
PREFERRED STOCKS-4.83%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
BRAZIL-0.45%
93,000 Petroleo Brasileiro S.A. ADR Preferred
(f) -- OIL-CRUDE PETROLEUM AND GAS......... $ 2,104,125 $ 1,728,759
------------- -------------
GERMANY-4.38%
25,000 SAP AG Systeme
Preferred -- COMPUTER-SOFTWARE............. 1,338,914 16,994,460
------------- -------------
TOTAL PREFERRED STOCKS....................... 3,443,039 18,723,219
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 224,183,961 $ 370,823,009
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-5.12%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-3.87%
$14,999,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 14,999,000
-------------
DIVERSIFIED FINANCE-0.32%
1,242,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 1,242,000
-------------
U.S. GOVERNMENT AGENCY-0.93%
3,645,000 Federal Home Loan Mortgage Corp. , 5.58%,
8-24-1998.................................. 3,614,595
-------------
TOTAL SHORT-TERM INVESTMENTS................. 19,855,595
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$244,039,556) (b).......................... $ 390,678,604
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $244,080,246 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $157,661,385
Unrealized depreciation..................................... (11,063,027)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $146,598,358
- --------------------------------------------------------------------------
</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 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:
<TABLE>
<CAPTION>
DATE ACQUIRED SHARES/PAR SECURITY COST BASIS
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
1998 32,000 Computacenter plc $ 350,716
1996 and 1998 99,100 KCI Konecranes International plc 2,400,981
1995 155,000 MOL Magyar Olaj-es Gazipari Rt. GDR 1,255,500
1996 33,000 OMV AG 3,380,433
1998 51,000 Toppan Forms Co. Ltd. 462,911
1998 6,900 Vestas Wind Systems A/S 273,645
The aggregate value of these securities at June 30, 1998, was $14,959,820, which
represents 3.86% of total net assets.
</TABLE>
(f) Security is fully or partially on loan at June 30, 1998. See Note 1 of
accompanying Notes to Financial Statements.
72
<PAGE>
FORTIS SERIES FUND, INC.
LARGE CAP GROWTH SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-86.24%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.37%
1,000 United Technologies Corp..................... $ 94,881 $ 92,500
----------- -----------
AIRLINES-2.23%
2,500 Northwest Airlines Corp. (a)................. 138,373 96,406
700 UAL Corp. (a)................................ 65,441 54,600
----------- -----------
203,814 151,006
----------- -----------
BANKS-6.73%
1,000 Chase Manhattan Corp......................... 70,125 75,500
1,300 Citicorp..................................... 201,206 194,025
800 Fifth Third Bancorp.......................... 40,650 50,400
1,600 NationsBank Corp............................. 122,436 122,400
300 Washington Mutual, Inc....................... 14,937 13,031
----------- -----------
449,354 455,356
----------- -----------
BEVERAGE-0.38%
300 Coca-Cola (The) Co........................... 24,196 25,650
----------- -----------
BROADCASTING-2.47%
4,300 Liberty Media Group (a)...................... 150,162 166,894
----------- -----------
BROKERAGE AND INVESTMENT-1.50%
1,100 Merrill Lynch & Co., Inc..................... 96,224 101,475
----------- -----------
BUSINESS SERVICES AND SUPPLIES-3.82%
4,100 Tyco International Ltd....................... 222,840 258,300
----------- -----------
COMPUTER-COMMUNICATIONS EQUIPMENT-8.06%
2,800 Cisco Systems, Inc. (a)...................... 197,409 257,775
3,100 Dell Computer Corp. (a)...................... 215,744 287,719
----------- -----------
413,153 545,494
----------- -----------
COMPUTER-SOFTWARE-2.82%
1,600 EMC Corp. (a)................................ 69,675 71,700
1,100 Microsoft Corp. (a).......................... 102,114 119,212
----------- -----------
171,789 190,912
----------- -----------
CONSUMER GOODS-0.39%
300 Colgate-Palmolive Co......................... 26,040 26,400
----------- -----------
DRUGS-8.22%
1,300 Bristol-Myers Squibb Co...................... 138,202 149,419
1,100 Humana, Inc.................................. 33,249 34,306
1,300 Merck & Co., Inc............................. 171,765 173,875
900 Pfizer, Inc.................................. 90,157 97,819
1,100 Schering-Plough Corp......................... 93,267 100,787
----------- -----------
526,640 556,206
----------- -----------
ELECTRIC PRODUCTS-0.12%
100 Honeywell, Inc............................... 7,982 8,356
----------- -----------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.21%
1,100 Intel Corp................................... 84,075 81,537
----------- -----------
FINANCE SERVICES-11.39%
3,531 Associates First Capital Corp. Class A....... 270,316 271,446
800 Beneficial Corp.............................. 107,669 122,550
600 Fannie Mae................................... 39,780 36,450
800 Freddie Mac.................................. 38,146 37,650
1,500 Household International, Inc................. 72,200 74,625
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
2,200 MBNA Corp.................................... $ 76,976 $ 72,600
1,700 Morgan Stanley, Dean Witter & Co............. 130,185 155,337
----------- -----------
735,272 770,658
----------- -----------
FOOD-0.86%
1,100 Campbell Soup Co............................. 56,047 58,437
----------- -----------
HEALTH CARE SERVICES-1.31%
1,400 United HealthCare Corp....................... 91,421 88,900
----------- -----------
INSURANCE-1.70%
400 American International Group, Inc............ 51,020 58,400
400 Progressive Corp. (The)...................... 53,070 56,400
----------- -----------
104,090 114,800
----------- -----------
LEISURE TIME-AMUSEMENTS-2.18%
1,400 Disney (Walt) Co............................. 160,658 147,087
----------- -----------
MACHINERY-OIL AND WELL-1.71%
2,600 Halliburton Co............................... 129,765 115,862
----------- -----------
MEDIA-1.26%
1,200 Gannett Co., Inc............................. 79,941 85,275
----------- -----------
MEDICAL SUPPLIES-0.68%
1,000 US Surgical Corp............................. 41,882 45,625
----------- -----------
MEDICAL TECHNOLOGY-0.10%
100 Medtronic, Inc. (with rights)................ 5,411 6,375
----------- -----------
MISCELLANEOUS-0.18%
300 Proffitt's, Inc. (a)......................... 11,753 12,112
----------- -----------
OFFICE EQUIPMENT AND SUPPLIES-0.80%
1,900 Compaq Computer Corp......................... 49,283 53,912
----------- -----------
OIL AND GAS FIELD SERVICES-2.16%
300 Camco International, Inc..................... 22,783 23,363
1,800 Schlumberger Ltd............................. 133,433 122,963
----------- -----------
156,216 146,326
----------- -----------
RETAIL-DEPARTMENT STORES-3.74%
2,500 Dayton Hudson Corp........................... 111,260 121,250
1,100 Federated Department Stores, Inc. (a)........ 57,177 59,194
1,400 Kohl's Corp. (a)............................. 59,610 72,625
----------- -----------
228,047 253,069
----------- -----------
RETAIL-SPECIALTY-3.68%
3,000 Home Depot, Inc.............................. 210,188 249,188
----------- -----------
SAVINGS AND LOANS, MORTGAGE COMPANIES-1.68%
1,600 Ahmanson (H.F.) & Co......................... 124,463 113,600
----------- -----------
TELECOMMUNICATIONS-4.11%
200 Lucent Technologies, Inc..................... 14,473 16,638
3,600 Nokia Oyj Corp., ADR Class A................. 217,307 261,225
----------- -----------
231,780 277,863
----------- -----------
TELECOMMUNICATION EQUIPMENT-1.29%
1,800 Ericsson (L.M.) Telephone Co. Class B ADR.... 46,463 51,525
500 Tellabs, Inc. (a)............................ 31,981 35,813
----------- -----------
78,444 87,338
----------- -----------
</TABLE>
73
<PAGE>
FORTIS SERIES FUND, INC.
LARGE CAP GROWTH SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
TELEPHONE SERVICES-4.66%
4,600 AirTouch Communications, Inc. (a)............ $ 226,013 $ 268,813
800 MCI Communications Corp...................... 40,538 46,500
----------- -----------
266,551 315,313
----------- -----------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ----------- -----------
<C> <S> <C> <C>
TOBACCO-3.43%
5,900 Philip Morris Companies, Inc................. $ 235,551 $ 232,313
----------- -----------
TOTAL COMMON STOCKS.......................... $ 5,467,913 $ 5,834,139
----------- -----------
----------- -----------
</TABLE>
SHORT-TERM INVESTMENTS-12.53%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- -----------
<C> <S> <C>
BANKS-12.53%
$847,607 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 847,607
-----------
TOTAL INVESTMENTS IN SECURITIES (COST:
$6,315,520) (b)............................ $6,681,746
-----------
-----------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $6,315,520 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 508,054
Unrealized depreciation..................................... (141,828)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 366,226
- -------------------------------------------------------------------------
</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 4.62% of total net assets as of June 30, 1998.
74
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-90.76%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-0.49%
119,700 Young & Rubicam, Inc.(a)..................... $ 3,255,418 $ 3,830,400
------------- -------------
AIRLINES-1.15%
163,100 Alaska Air Group, Inc. (a)................... 9,569,385 8,899,144
------------- -------------
APPAREL-1.68%
209,000 Tommy Hilfiger Corp. (a)..................... 7,768,525 13,062,500
------------- -------------
BANKS-2.84%
240,048 Banc One Corp................................ 5,961,694 13,397,668
162,000 Zions Bancorporation......................... 8,321,150 8,606,250
------------- -------------
14,282,844 22,003,918
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.92%
270,200 BioChem Pharma, Inc. (a)..................... 6,016,273 7,160,300
------------- -------------
BROADCASTING-0.56%
117,000 Univision Communications, Inc. (a)........... 3,671,732 4,358,250
------------- -------------
BUSINESS SERVICES AND SUPPLIES-1.86%
329,500 AccuStaff, Inc. (a).......................... 8,390,628 10,296,875
148,300 Viad Corp.................................... 4,023,363 4,115,325
------------- -------------
12,413,991 14,412,200
------------- -------------
CAPITAL SPENDING-1.76%
360,000 Newpark Resources, Inc. (a).................. 8,383,318 4,005,000
163,200 Waters Corp. (a)............................. 9,557,201 9,618,600
------------- -------------
17,940,519 13,623,600
------------- -------------
CHEMICALS-1.39%
427,500 Crompton & Knowles Corp...................... 11,888,825 10,767,656
------------- -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-4.29%
296,100 Cisco Systems, Inc. (a)...................... 2,473,569 27,259,706
212,800 Unisys Corp. (a)............................. 4,820,471 6,011,600
------------- -------------
7,294,040 33,271,306
------------- -------------
COMPUTER-HARDWARE-1.25%
224,000 Storage Technology Corp. (a)................. 8,350,435 9,716,000
------------- -------------
COMPUTER-SOFTWARE-13.37%
501,600 BMC Software, Inc. (a)....................... 3,478,985 26,051,850
226,400 Microsoft Corp. (a).......................... 2,416,862 24,536,100
135,000 National Instruments Corp. (a)............... 4,516,497 4,826,250
618,600 Parametric Technology Corp. (a).............. 5,476,673 16,779,525
495,000 Platinum Technology, Inc. (a)................ 13,270,537 14,138,437
288,419 Sterling Commerce, Inc. (a).................. 2,797,559 13,988,321
88,200 SunGard Data Systems, Inc. (a)............... 3,160,904 3,384,675
------------- -------------
35,118,017 103,705,158
------------- -------------
CONSTRUCTION-0.88%
180,000 Centex Corporation........................... 6,892,061 6,795,000
------------- -------------
DRUGS-2.32%
180,000 Mylan Laboratories, Inc...................... 5,614,288 5,411,250
270,000 Watson Pharmaceuticals, Inc. (a)............. 11,360,667 12,605,625
------------- -------------
16,974,955 18,016,875
------------- -------------
ELECTRONIC COMPONENTS-1.53%
283,000 Solectron Corp. (a).......................... 4,309,518 11,903,687
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.99%
122,800 Uniphase Corp. (a)........................... $ 6,834,504 $ 7,709,537
------------- -------------
FINANCE-1.04%
270,000 Imperial Bancorp (a)......................... 8,263,536 8,100,000
------------- -------------
FINANCE SERVICES-8.55%
210,800 Capital One Financial Corp................... 6,343,017 26,178,725
406,900 Concord EFS, Inc. (a)........................ 8,923,636 10,630,263
300,000 Franklin Resources, Inc...................... 3,604,950 16,200,000
403,750 MBNA Corp.................................... 6,864,397 13,323,750
------------- -------------
25,736,000 66,332,738
------------- -------------
FREIGHT CARRIERS-0.77%
135,000 Expeditors International of Washington,
Inc........................................ 5,790,645 5,940,000
------------- -------------
FURNITURE-0.99%
315,000 Herman Miller, Inc........................... 10,089,560 7,658,438
------------- -------------
HEALTH CARE SERVICES-5.46%
686,000 HBO & Co..................................... 6,070,191 24,181,500
194,100 Omnicare, Inc................................ 7,597,516 7,400,063
312,700 Total Renal Care Holdings, Inc. (a).......... 10,126,718 10,788,150
------------- -------------
23,794,425 42,369,713
------------- -------------
INSURANCE-4.15%
253,000 Horace Mann Educators Corp................... 8,841,239 8,728,500
147,300 Life Re Corp................................. 10,538,287 12,078,600
176,300 Mercury General Corp......................... 11,377,131 11,360,331
------------- -------------
30,756,657 32,167,431
------------- -------------
LEISURE TIME-AMUSEMENTS-1.39%
135,600 Royal Caribbean Cruises Ltd.................. 9,200,037 10,780,200
------------- -------------
MACHINERY-OIL AND WELL-1.04%
157,500 Cooper Cameron Corp. (a)..................... 6,350,987 8,032,500
------------- -------------
MEDICAL SUPPLIES-3.93%
128,100 Sofamor Danek Group, Inc. (a)................ 10,693,969 11,088,656
182,000 STERIS Corp. (a)............................. 6,495,597 11,574,063
309,000 Sybron International Corp. (a)............... 7,337,416 7,802,250
------------- -------------
24,526,982 30,464,969
------------- -------------
METALS-FABRICATING-0.74%
107,100 Precision Castparts Corp..................... 6,428,607 5,716,463
------------- -------------
OIL AND GAS FIELD SERVICES-1.84%
469,200 Petroleum Geo-Services ADR (a)............... 6,317,222 14,310,600
------------- -------------
OIL-OFFSHORE DRILLING-2.28%
452,600 R & B Falcon Corp. (a)....................... 8,184,848 10,240,075
167,600 Transocean Offshore, Inc..................... 5,387,312 7,458,200
------------- -------------
13,572,160 17,698,275
------------- -------------
RESTAURANTS AND FRANCHISING-1.35%
196,700 Starbucks Corp. (a).......................... 3,595,457 10,511,156
------------- -------------
RETAIL-DEPARTMENT STORES-2.90%
433,800 Kohl's Corp. (a)............................. 12,737,527 22,503,375
------------- -------------
</TABLE>
75
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
RETAIL-GROCERY-1.30%
45,000 Fred Meyer, Inc. (a)......................... $ 2,070,000 $ 1,912,500
135,000 Whole Foods Market, Inc. (a)................. 7,810,765 8,167,500
------------- -------------
9,880,765 10,080,000
------------- -------------
RETAIL-SPECIALTY-7.95%
252,750 Dollar Tree Stores, Inc. (a)................. 5,545,250 10,267,969
250,800 Home Depot, Inc.............................. 7,113,402 20,832,075
238,975 Office Depot, Inc. (a)....................... 4,752,504 7,542,648
795,187 Staples, Inc. (a)............................ 7,902,357 23,010,724
------------- -------------
25,313,513 61,653,416
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
TELECOMMUNICATION EQUIPMENT-3.17%
270,000 PairGain Technologies, Inc. (a).............. $ 6,188,170 $ 4,708,125
277,300 Tellabs, Inc.(a)............................. 2,041,544 19,861,613
------------- -------------
8,229,714 24,569,738
------------- -------------
TELEPHONE SERVICES-3.36%
538,000 WorldCom, Inc. (a)........................... 7,819,419 26,059,375
------------- -------------
WASTE DISPOSAL-1.27%
200,000 USA Waste Services, Inc. (a)................. 7,240,616 9,875,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 418,224,871 $ 704,058,918
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-9.51%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-4.03%
$31,242,595 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 31,242,595
-------------
DIVERSIFIED FINANCE-2.12%
16,472,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 16,472,000
-------------
U.S. GOVERNMENT AGENCY-3.36%
7,000,000 Federal Home Loan Mortgage Corp., 5.54%,
7-6-1998................................... 6,993,677
9,300,000 Federal Home Loan Mortgage Corp., 5.58%,
7-24-1998.................................. 9,266,024
2,900,000 Federal National Mortgage Association, 5.56%,
7-15-1998.................................. 2,893,390
6,900,000 Federal National Mortgage Association, 5.57%,
7-17-1998.................................. 6,882,177
-------------
26,035,268
-------------
TOTAL SHORT-TERM INVESTMENTS................. 73,749,863
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$491,974,734) (b).......................... $ 777,808,781
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $491,974,734 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $298,686,966
Unrealized depreciation..................................... (12,852,919)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $285,834,047
- --------------------------------------------------------------------------
</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 1.84% of total net assets as of June 30, 1998.
76
<PAGE>
FORTIS SERIES FUND, INC.
AGGRESSIVE GROWTH SERIES
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-86.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-0.39%
24,000 Hexcel Corp. (a)............................. $ 757,632 $ 543,000
------------ -------------
APPAREL-0.91%
53,000 North Face, Inc. (a)(e)...................... 1,226,416 1,272,000
------------ -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-1.17%
62,000 BioChem Pharma, Inc. (a)(e).................. 1,421,725 1,643,000
------------ -------------
BROADCASTING-1.08%
60,000 USA Networks, Inc. (a)....................... 1,045,876 1,507,500
------------ -------------
BUSINESS SERVICES AND SUPPLIES-12.93%
27,920 AccuStaff, Inc. (a)(e)....................... 696,080 872,500
121,700 Acxiom Corp. (a)............................. 1,559,387 3,034,894
7,200 Catalina Marketing Corp. (a)................. 200,394 373,950
52,000 Covance, Inc. (a)............................ 999,211 1,170,000
30,900 Envoy Corp. (a)(e)........................... 1,056,232 1,463,887
30,800 Fastenal Co.(e).............................. 1,089,700 1,430,275
39,000 Fiserv, Inc. (a)............................. 971,656 1,656,281
32,000 Metamor Worldwide, Inc. (a)(e)............... 853,611 1,126,000
20,025 Paychex, Inc................................. 382,348 814,767
26,000 Premiere Technologies, Inc. (a).............. 741,946 215,719
73,000 Romac International, Inc. (a)................ 941,325 2,217,375
35,000 Saville Systems plc ADR (a).................. 1,179,925 1,754,375
30,600 Snyder Communications, Inc. (a).............. 615,442 1,346,400
31,500 Sykes Enterprises, Inc. (a).................. 953,487 631,969
------------ -------------
12,240,744 18,108,392
------------ -------------
COMPUTER-COMMUNICATIONS EQUIPMENT-3.09%
23,000 Ascend Communications, Inc. (a).............. 697,187 1,139,937
34,600 Cisco Systems, Inc. (a)...................... 428,267 3,185,362
------------ -------------
1,125,454 4,325,299
------------ -------------
COMPUTER-SOFTWARE-15.95%
28,000 Aspen Technology, Inc. (a)................... 715,546 1,414,000
28,000 HNC Software, Inc. (a)....................... 926,744 1,142,750
34,000 Industri-Matematik International Corp. (a)... 680,000 371,875
67,600 Legato Systems, Inc. (a)..................... 583,150 2,636,400
24,700 Mobius Management Systems, Inc. (a) 430,599 370,500
16,500 Networks Associates, Inc. (a)(e)............. 694,719 789,937
99,200 Parametric Technology Corp. (a).............. 1,638,711 2,690,800
30,000 PeopleSoft, Inc. (a)......................... 909,375 1,410,000
36,000 Platinum Technology, Inc. (a)(e)............. 505,640 1,028,250
52,400 Siebel Systems, Inc. (a)..................... 661,756 1,689,900
54,778 Sterling Commerce, Inc. (a).................. 1,372,022 2,656,726
54,200 Sterling Software, Inc. (a).................. 649,038 1,602,287
38,800 Synopsys, Inc. (a)........................... 1,249,501 1,775,100
30,000 Vantive (The) Corp. (a)(e)................... 910,758 615,000
13,500 Verio, Inc. (a).............................. 348,362 335,812
43,762 VERITAS Software Corp. (a)................... 890,173 1,810,653
------------ -------------
13,166,094 22,339,990
------------ -------------
CONSUMER GOODS-1.00%
42,000 Blyth Industries, Inc. (a)................... 1,016,960 1,396,500
------------ -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
EDUCATIONAL SERVICES-2.30%
67,500 Apollo Group, Inc. Class A (a)............... $ 872,434 $ 2,231,719
30,000 Sylvan Learning Systems, Inc. (a)............ 990,000 982,500
------------ -------------
1,862,434 3,214,219
------------ -------------
ELECTRONIC COMPONENTS-0.90%
74,800 DSP Communications, Inc. (a)................. 1,200,040 1,028,500
5,000 Sanmina Corp. (a)(e)......................... 167,187 216,875
1,300 Sawtek, Inc. (a)............................. 43,550 19,175
------------ -------------
1,410,777 1,264,550
------------ -------------
ELECTRICAL EQUIPMENT-1.30%
69,750 SLI, Inc. (a)................................ 1,311,000 1,822,219
------------ -------------
HEALTH CARE SERVICES-4.10%
58,700 ABR Information Services, Inc. (a)........... 1,384,309 1,394,125
29,000 American Oncology Resources, Inc. (a) 291,189 354,344
22,000 Assisted Living Concepts, Inc. (a)........... 396,762 379,500
52,500 Omnicare, Inc.(e)............................ 891,128 2,001,563
20,000 PAREXEL International Corp. (a).............. 337,500 727,500
40,000 Pharmaceutical Product Development, Inc.
(a)........................................ 1,043,045 880,000
------------ -------------
4,343,933 5,737,032
------------ -------------
MEDICAL SUPPLIES-2.11%
41,600 Arterial Vascular Engineering, Inc. (a)...... 1,167,374 1,487,200
17,000 Sofamor Danek Group, Inc. (a)................ 836,859 1,471,563
------------ -------------
2,004,233 2,958,763
------------ -------------
MEDICAL TECHNOLOGY-0.38%
13,800 Stryker Corp................................. 419,175 529,575
------------ -------------
OIL AND GAS FIELD SERVICES-4.51%
92,000 Input/Output, Inc. (a)....................... 1,512,699 1,638,750
98,000 Petroleum Geo-Services ADR (a)............... 1,442,883 2,989,000
60,000 Stolt Comex Seaway S.A. (a).................. 629,194 1,162,500
30,000 Stolt Comex Seaway, S.A. ADR Class A 156,257 525,000
------------ -------------
3,741,033 6,315,250
------------ -------------
OIL-OFFSHORE DRILLING-1.26%
42,000 Marine Drilling Companies, Inc. (a).......... 677,250 672,000
48,000 R & B Falcon Corp. (a)....................... 836,394 1,086,000
------------ -------------
1,513,644 1,758,000
------------ -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-1.00%
28,000 Veritas DGC, Inc. (a)........................ 1,169,135 1,398,250
------------ -------------
PRINTING-0.52%
16,000 Applied Graphics Technologies, Inc. (a) 800,458 732,000
------------ -------------
RESTAURANTS AND FRANCHISING-1.87%
28,000 Applebee's International, Inc................ 711,537 626,500
16,200 Cracker Barrel Old Country Store, Inc. 419,514 514,350
37,600 Papa John's International, Inc. (a).......... 997,599 1,482,850
------------ -------------
2,128,650 2,623,700
------------ -------------
RETAIL-HOUSEHOLD FURNITURE-0.82%
48,000 Pier 1 Imports, Inc.......................... 1,285,859 1,146,000
------------ -------------
RETAIL-MISCELLANEOUS-0.41%
45,050 Corporate Express, Inc. (a).................. 623,919 571,572
------------ -------------
</TABLE>
77
<PAGE>
FORTIS SERIES FUND, INC.
AGGRESSIVE GROWTH SERIES (CONTINUED)
Schedule of Investments
June 30, 1998 (Unaudited)
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
RETAIL-SPECIALTY-10.21%
53,000 Bed Bath & Beyond, Inc. (a).................. $ 1,139,675 $ 2,746,063
45,900 Cendant Corp. (a)............................ 985,999 958,163
65,250 Dollar Tree Stores, Inc. (a)................. 1,406,500 2,650,781
81,100 Gadzooks, Inc. (a)(e)........................ 1,681,466 2,235,319
41,000 General Nutrition Companies, Inc. (a)........ 915,357 1,276,125
36,000 Just for Feet, Inc. (a)...................... 1,252,500 1,026,000
29,700 Michaels Stores, Inc. (a).................... 799,788 1,047,853
8,700 Restoration Hardware, Inc. (a)............... 220,073 218,588
58,400 West Marine, Inc. (a)(e)..................... 1,038,792 1,051,200
34,000 Wet Seal (The), Inc. Class A (a)............. 709,750 1,088,000
------------ -------------
10,149,900 14,298,092
------------ -------------
TELECOMMUNICATIONS-2.41%
19,500 Primus Telecommunications Group, Inc. (a).... 446,325 369,281
78,361 Qwest Communications International, Inc.
(a)........................................ 1,126,864 2,732,840
30,000 Telegroup, Inc. (a).......................... 594,022 277,500
------------ -------------
2,167,211 3,379,621
------------ -------------
TELECOMMUNICATION EQUIPMENT-4.86%
45,000 ADC Telecommunications, Inc. (a)............. 769,079 1,643,906
21,300 Andrew Corp. (with rights) (a)............... 498,823 384,731
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ -------------
<C> <S> <C> <C>
26,000 CIENA Corp. (a).............................. $ 1,273,969 $ 1,810,250
60,000 PairGain Technologies, Inc. (a).............. 1,705,523 1,046,250
26,800 Tellabs, Inc.(a)............................. 311,000 1,919,550
------------ -------------
4,558,394 6,804,687
------------ -------------
TELEPHONE SERVICES-9.45%
18,000 ALLTEL Corp.................................. 815,580 837,000
70,400 ICG Communications, Inc. (a)................. 1,501,709 2,574,000
72,000 Intermedia Communications, Inc. (a)(e) 607,500 3,019,500
50,000 McLeodUSA, Inc. Class A (a).................. 1,190,951 1,943,750
55,350 STAR Telecommunications, Inc. (a)............ 496,500 1,238,456
74,722 WorldCom, Inc. (a)(e)........................ 1,101,785 3,619,347
------------ -------------
5,714,025 13,232,053
------------ -------------
WASTE DISPOSAL-2.03%
57,620 USA Waste Services, Inc. (a)................. 1,019,925 2,844,988
------------ -------------
TOTAL COMMON STOCKS.......................... $ 78,224,606 $ 121,766,252
------------ -------------
------------ -------------
</TABLE>
SHORT-TERM INVESTMENTS-13.02%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-4.27%
$5,981,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.42%........ $ 5,981,000
-------------
DIVERSIFIED FINANCE-3.98%
5,564,000 Associates Corp. Master Variable Rate Note,
Current rate -- 5.42%...................... 5,564,000
-------------
U.S. GOVERNMENT AGENCY-4.77%
6,700,000 Federal Home Loan Mortgage Corp., 5.56%,
7-20-1998.................................. 6,679,714
-------------
TOTAL SHORT-TERM INVESTMENTS................. 18,224,714
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$96,449,320) (b)........................... $ 139,990,966
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At June 30, 1998, the cost of securities for federal income tax purposes
was $96,467,027 and the aggregate gross unrealized appreciation and
depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $47,853,999
Unrealized depreciation.......................................... (4,330,060)
- ------------------------------------------------------------------------------
Net unrealized appreciation...................................... $43,523,939
- ------------------------------------------------------------------------------
</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 4.48% of total net assets as of June 30, 1998.
(e) Security is fully or partially on loan at June 30, 1998. See Note 1 of
accompanying Notes to Financial Statements.
78
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Assets and Liabilities
(Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<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).................... $60,325,513 $143,244,675 $111,720,242 $19,597,372 $68,552,227
Cash on deposit with custodian........ 968 71 185 -- --
Foreign currency on deposit with
custodian........................... -- -- -- 678,162 --
Collateral for securities lending
transactions (Note 1)............... -- -- -- -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- -- 55,568 --
Investment securities sold.......... -- -- 33,713 808,504 146,487
Interest and dividends.............. 20,570 980,549 1,484,363 414,002 1,467,421
Subscriptions of capital stock...... 248,909 90,796 54,071 71,378 104,800
Prepaid expenses...................... 540 931 1,078 131 1,430
------------ ------------- ------------- ------------ ------------
TOTAL ASSETS............................ 60,596,500 144,317,022 113,293,652 21,625,117 70,272,365
------------ ------------- ------------- ------------ ------------
LIABILITIES:
Bank overdraft........................ -- -- -- -- 18,788
Unrealized depreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... -- -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- -- -- -- --
Payable for investment securities
purchased........................... -- 4,653,426 2,792,055 801,268 375,000
Redemptions of capital stock.......... 168,155 -- 148,994 -- 1,319
Payable for investment advisory and
management fees (Note 2)............ 15,253 53,770 42,540 12,756 28,650
Accounts payable and accrued
expenses............................ 20,408 43,639 31,319 14,847 11,376
------------ ------------- ------------- ------------ ------------
TOTAL LIABILITIES....................... 203,816 4,750,835 3,014,908 828,871 435,133
------------ ------------- ------------- ------------ ------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 55,626,839 140,985,936 104,557,026 20,498,617 64,999,006
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... -- 4,360,208 3,212,857 194,850 (3,880,558)
Undistributed (excess of distributions
over) net investment income......... 4,847,184 12,859,428 10,945,903 (124,122) 8,510,993
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ (81,339) (18,639,385) (8,437,042) 226,901 207,791
------------ ------------- ------------- ------------ ------------
TOTAL NET ASSETS........................ $60,392,684 $139,566,187 $110,278,744 $20,796,246 $69,837,232
------------ ------------- ------------- ------------ ------------
------------ ------------- ------------- ------------ ------------
NET ASSET VALUE PER SHARE............... $11.32 $11.11 $12.48 $10.98 $11.00
------------ ------------- ------------- ------------ ------------
------------ ------------- ------------- ------------ ------------
*Cost................................... $60,325,513 $138,884,467 $108,507,385 $19,453,580 $72,432,785
**Outstanding shares.................... 5,335,230 12,561,509 8,839,901 1,893,579 6,350,171
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
79
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Assets and Liabilities (continued)
(Unaudited)
June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL ASSET ASSET GROWTH & S & P
ALLOCATION ALLOCATION VALUE INCOME 500 INDEX
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).................... $59,876,644 $549,775,232 $83,574,809 $303,155,868 $187,586,564
Cash on deposit with custodian........ -- 656 730 863 91
Foreign currency on deposit with
custodian........................... 483,360 -- -- -- --
Collateral for securities lending
transactions (Note 1)............... -- -- -- 28,565,224 --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- -- -- --
Investment securities sold.......... -- -- 1,948,059 233,639 --
Interest and dividends.............. 684,998 2,418,794 97,248 834,541 210,804
Subscriptions of capital stock...... 180,254 167,919 44,563 225,088 616,586
Prepaid expenses...................... 1,213 13,555 1,655 9,613 6,393
------------ ------------- ------------ ------------- -------------
TOTAL ASSETS............................ 61,226,469 552,376,156 85,667,064 333,024,836 188,420,438
------------ ------------- ------------ ------------- -------------
LIABILITIES:
Bank overdraft........................ -- -- -- -- --
Unrealized depreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... 32,463 -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- -- -- 28,565,224 --
Payable for investment securities
purchased........................... 86,508 7,646,995 3,574,840 2,431,127 2,128,218
Redemptions of capital stock.......... -- -- 10,630 -- 157,652
Payable for investment advisory and
management fees (Note 2)............ 44,600 205,966 45,784 153,542 57,639
Accounts payable and accrued
expenses............................ 28,800 84,915 8,496 28,884 62,391
------------ ------------- ------------ ------------- -------------
TOTAL LIABILITIES....................... 192,371 7,937,876 3,639,750 31,178,777 2,405,900
------------ ------------- ------------ ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 50,180,729 396,932,505 70,642,668 212,757,973 147,794,209
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 8,287,315 109,269,296 5,596,587 76,456,976 36,433,919
Undistributed (excess of distributions
over) net investment income......... 374,029 7,427,897 427,064 3,467,114 909,926
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 2,192,025 30,808,582 5,360,995 9,163,996 876,484
------------ ------------- ------------ ------------- -------------
TOTAL NET ASSETS........................ $61,034,098 $544,438,280 $82,027,314 $301,846,059 $186,014,538
------------ ------------- ------------ ------------- -------------
------------ ------------- ------------ ------------- -------------
NET ASSET VALUE PER SHARE............... $14.44 $19.79 $14.81 $20.69 $17.53
------------ ------------- ------------ ------------- -------------
------------ ------------- ------------ ------------- -------------
*Cost................................... $51,562,192 $440,505,936 $77,978,222 $226,698,892 $151,396,458
**Outstanding shares.................... 4,227,105 27,512,557 5,538,786 14,589,142 10,608,937
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
80
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BLUE CHIP INTERNATIONAL MID CAP SMALL CAP GLOBAL LARGE CAP
STOCK STOCK STOCK VALUE GROWTH GROWTH
SERIES SERIES SERIES SERIES SERIES SERIES
------------- ------------ ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $135,059,846 $96,932,905 $6,153,388 $7,038,421 $390,678,604 $6,681,746
Cash on deposit with custodian........ -- -- 21 -- 1,761 --
Foreign currency on deposit with
custodian........................... -- -- -- -- -- --
Collateral for securities lending
transactions (Note 1)............... -- -- -- -- 93,412,589 --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- 506 -- -- -- --
Investment securities sold.......... -- 14,279 378,325 22,087 387,335 --
Interest and dividends.............. 98,795 580,163 4,572 10,637 447,842 7,149
Subscriptions of capital stock...... 429,479 62,780 13,235 158,941 54,705 82,251
Prepaid expenses...................... 4,794 2,592 13,114 8,224 3,898 6,980
------------- ------------ ----------- ----------- ------------- -----------
TOTAL ASSETS............................ 135,592,914 97,593,225 6,562,655 7,238,310 484,986,734 6,778,126
------------- ------------ ----------- ----------- ------------- -----------
LIABILITIES:
Bank overdraft........................ -- -- -- -- -- --
Unrealized depreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... -- -- -- -- 4,395 --
Payable upon return of securities
loaned (Note 1)..................... -- -- -- -- 93,412,589 --
Payable for investment securities
purchased........................... 355,393 330,133 707,154 204,427 3,359,954 6,651
Redemptions of capital stock.......... -- -- -- -- 348,603 --
Payable for investment advisory and
management fees (Note 2)............ 93,251 66,413 4,016 4,502 219,041 4,460
Accounts payable and accrued
expenses............................ 9,470 33,444 1,031 1,190 72,717 2,381
------------- ------------ ----------- ----------- ------------- -----------
TOTAL LIABILITIES....................... 458,114 429,990 712,201 210,119 97,417,299 13,492
------------- ------------ ----------- ----------- ------------- -----------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 107,447,451 73,256,321 6,127,070 7,214,612 223,237,744 6,404,106
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 24,704,749 19,691,935 (247,970) (189,361) 146,635,913 366,226
Undistributed (excess of distributions
over) net investment income......... 283,215 1,760,338 17,409 38,187 1,277,743 4,071
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 2,699,385 2,454,641 (46,055) (35,247) 16,418,035 (9,769)
------------- ------------ ----------- ----------- ------------- -----------
TOTAL NET ASSETS........................ $135,134,800 $97,163,235 $5,850,454 $7,028,191 $387,569,435 $6,764,634
------------- ------------ ----------- ----------- ------------- -----------
------------- ------------ ----------- ----------- ------------- -----------
NET ASSET VALUE PER SHARE............... $17.25 $15.84 $9.43 $9.60 $23.40 $10.60
------------- ------------ ----------- ----------- ------------- -----------
------------- ------------ ----------- ----------- ------------- -----------
*Cost................................... $110,355,099 $77,238,406 $6,404,508 $7,227,782 $244,039,556 $6,315,520
**Outstanding shares.................... 7,832,230 6,134,407 620,083 732,311 16,560,566 638,002
<CAPTION>
GROWTH AGGRESSIVE
STOCK GROWTH
SERIES SERIES
------------- -------------
<S> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $777,808,781 $139,990,966
Cash on deposit with custodian........ 683 386
Foreign currency on deposit with
custodian........................... -- --
Collateral for securities lending
transactions (Note 1)............... -- 14,099,277
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- --
Investment securities sold.......... 268,984 --
Interest and dividends.............. 287,224 55,905
Subscriptions of capital stock...... 178,659 80,279
Prepaid expenses...................... 10,132 8,528
------------- -------------
TOTAL ASSETS............................ 778,554,463 154,235,341
------------- -------------
LIABILITIES:
Bank overdraft........................ -- --
Unrealized depreciation on forward
foreign currency contracts -- net
(Note 1 and 3)...................... -- --
Payable upon return of securities
loaned (Note 1)..................... -- 14,099,277
Payable for investment securities
purchased........................... 1,961,673 --
Redemptions of capital stock.......... 330,732 19,733
Payable for investment advisory and
management fees (Note 2)............ 376,397 74,775
Accounts payable and accrued
expenses............................ 136,467 25,682
------------- -------------
TOTAL LIABILITIES....................... 2,805,269 14,219,467
------------- -------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 350,925,614 110,667,013
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 285,834,047 43,541,646
Undistributed (excess of distributions
over) net investment income......... 3,448,672 259,743
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 135,540,861 (14,452,528)
------------- -------------
TOTAL NET ASSETS........................ $775,749,194 $140,015,874
------------- -------------
------------- -------------
NET ASSET VALUE PER SHARE............... $42.44 $15.70
------------- -------------
------------- -------------
*Cost................................... $491,974,734 $ 96,449,320
**Outstanding shares.................... 18,280,784 8,917,139
</TABLE>
81
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Operations
(Unaudited)
For the Six-Month Period Ended June 30, 1998
- --------------------------------------------------------------------------------
<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>
NET INVESTMENT INCOME:
Income:
Interest income..................... $1,647,692 $4,355,725 $3,895,765 $ 544,760 $ 3,356,246
Dividend Income..................... -- -- -- -- --
Fee income (Note 1)................. -- -- -- -- --
----------- ----------- ----------- ---------- ------------
Total Income *........................ 1,647,692 4,355,725 3,895,765 544,760 3,356,246
----------- ----------- ----------- ---------- ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 88,036 325,570 252,152 77,010 164,290
Legal and auditing fees (Note 2).... 10,017 16,017 12,844 10,870 10,761
Custodian fees...................... 7,141 13,736 12,001 4,896 7,429
Shareholders' notices and reports... 7,042 18,348 10,513 2,018 3,769
Amortization of organization costs
(Note 1).......................... -- -- -- -- --
Registration fees................... -- -- -- -- --
Directors' fees and expenses........ 1,190 3,025 2,023 391 942
Other............................... 691 4,364 2,707 745 1,141
----------- ----------- ----------- ---------- ------------
Total Expenses........................ 114,117 381,060 292,240 95,930 188,332
Less reimbursable expenses (Note
2).............................. -- -- -- -- --
----------- ----------- ----------- ---------- ------------
Net Expenses...................... 114,117 381,060 292,240 95,930 188,332
----------- ----------- ----------- ---------- ------------
NET INVESTMENT INCOME................... 1,533,575 3,974,665 3,603,525 448,830 3,167,914
----------- ----------- ----------- ---------- ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... -- 1,137,136 1,041,434 156,043 (197,027)
Foreign currency transactions....... -- -- -- (371,671) --
Future contracts.................... -- -- -- -- --
----------- ----------- ----------- ---------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... -- 1,137,136 1,041,434 (215,628) (197,027)
----------- ----------- ----------- ---------- ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... -- 413,230 (322,366) 80,061 (1,720,218)
Translation of assets and liabilities
denominated in foreign currency..... -- -- -- 330,801 --
----------- ----------- ----------- ---------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... -- 413,230 (322,366) 410,862 (1,720,218)
----------- ----------- ----------- ---------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... -- 1,550,366 719,068 195,234 (1,917,245)
----------- ----------- ----------- ---------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $1,533,575 $5,525,031 $4,322,593 $ 644,064 $ 1,250,669
----------- ----------- ----------- ---------- ------------
----------- ----------- ----------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
*Net of foreign witholding taxes of:
<S> <C>
Global Bond Series $ 19,556
Asset Allocation Series 5,948
Global Asset Allocation Series 41,970
S & P 500 Index Series 11,993
Blue Chip Stock Series 2,932
Global Growth Series 244,914
Growth Stock Series 3,113
International Stock Series 112,719
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
** FOR THE PERIOD MARCH 25, 1998 (INCEPTION) TO JUNE 30, 1998.
82
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
ASSET ASSET GROWTH & S & P BLUE CHIP
ALLOCATION ALLOCATION VALUE INCOME 500 INDEX STOCK
SERIES SERIES SERIES SERIES SERIES SERIES
----------- ------------ ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 617,666 $ 7,496,135 $ 198,520 $ 1,177,899 $ 171,482 $ 221,057
Dividend Income..................... 368,832 1,075,133 492,485 3,186,628 1,063,813 538,716
Fee income (Note 1)................. -- -- -- 23,664 -- --
----------- ------------ ----------- ------------ ------------ ------------
Total Income *........................ 986,498 8,571,268 691,005 4,388,191 1,235,295 759,773
----------- ------------ ----------- ------------ ------------ ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 257,445 1,208,111 244,452 877,537 296,296 476,351
Legal and auditing fees (Note 2).... 11,197 21,274 10,057 12,546 9,769 10,091
Custodian fees...................... 17,361 33,473 6,546 12,645 12,744 10,934
Shareholders' notices and reports... 2,826 43,440 1,884 11,654 3,620 2,281
Amortization of organization costs
(Note 1).......................... -- -- -- -- -- --
Registration fees................... -- -- -- -- -- --
Directors' fees and expenses........ 2,241 6,744 431 3,124 774 575
Other............................... 11,894 11,058 571 3,571 6,820 881
----------- ------------ ----------- ------------ ------------ ------------
Total Expenses........................ 302,964 1,324,100 263,941 921,077 330,023 501,113
Less reimbursable expenses (Note
2).............................. -- -- -- -- -- --
----------- ------------ ----------- ------------ ------------ ------------
Net Expenses...................... 302,964 1,324,100 263,941 921,077 330,023 501,113
----------- ------------ ----------- ------------ ------------ ------------
NET INVESTMENT INCOME................... 683,534 7,247,168 427,064 3,467,114 905,272 258,660
----------- ------------ ----------- ------------ ------------ ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... 1,592,004 28,945,471 4,890,562 9,077,285 100,632 3,060,882
Foreign currency transactions....... (425,239) -- -- -- -- (61)
Future contracts.................... -- -- -- -- 651,463 --
----------- ------------ ----------- ------------ ------------ ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... 1,166,765 28,945,471 4,890,562 9,077,285 752,095 3,060,821
----------- ------------ ----------- ------------ ------------ ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 2,343,517 23,400,326 1,091,181 13,882,758 21,688,097 12,711,251
Translation of assets and liabilities
denominated in foreign currency..... 371,534 -- -- -- -- 54
----------- ------------ ----------- ------------ ------------ ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... 2,715,051 23,400,326 1,091,181 13,882,758 21,688,097 12,711,305
----------- ------------ ----------- ------------ ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... 3,881,816 52,345,797 5,981,743 22,960,043 22,440,192 15,772,126
----------- ------------ ----------- ------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $4,565,350 $59,592,965 $6,408,807 $26,427,157 $23,345,464 $16,030,786
----------- ------------ ----------- ------------ ------------ ------------
----------- ------------ ----------- ------------ ------------ ------------
<CAPTION>
INTERNATIONAL MID CAP
STOCK STOCK
SERIES SERIES **
------------ ----------
<S> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 103,047 $ 16,787
Dividend Income..................... 1,254,575 7,771
Fee income (Note 1)................. -- --
------------ ----------
Total Income *........................ 1,357,622 24,558
------------ ----------
Expenses:
Investment advisory and management
fees (Note 2)..................... 376,328 11,135
Legal and auditing fees (Note 2).... 11,505 2,871
Custodian fees...................... 24,935 594
Shareholders' notices and reports... 5,058 89
Amortization of organization costs
(Note 1).......................... -- 349
Registration fees................... -- 51
Directors' fees and expenses........ 1,141 47
Other............................... 1,250 185
------------ ----------
Total Expenses........................ 420,217 15,321
Less reimbursable expenses (Note
2).............................. -- (8,172)
------------ ----------
Net Expenses...................... 420,217 7,149
------------ ----------
NET INVESTMENT INCOME................... 937,405 17,409
------------ ----------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... 3,405,231 (48,905)
Foreign currency transactions....... (14,656) --
Future contracts.................... -- 2,850
------------ ----------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... 3,390,575 (46,055)
------------ ----------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 10,536,131 (247,970)
Translation of assets and liabilities
denominated in foreign currency..... 2,457 --
------------ ----------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... 10,538,588 (247,970)
------------ ----------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... 13,929,163 (294,025)
------------ ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $14,866,568 $(276,616)
------------ ----------
------------ ----------
</TABLE>
83
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Operations (continued)
(Unaudited)
For the Six-Month Period Ended June 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL CAP GLOBAL LARGE CAP GROWTH AGGRESSIVE
VALUE GROWTH GROWTH STOCK GROWTH
SERIES ** SERIES SERIES ** SERIES SERIES
---------- ------------ --------- ------------- ------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 19,408 $ 386,591 $ 9,271 $ 2,757,660 $ 435,979
Dividend Income..................... 32,017 1,844,134 9,073 786,421 14,806
Fee income (Note 1)................. -- 62,169 -- -- 31,926
---------- ------------ --------- ------------- ------------
Total Income *........................ 51,425 2,292,894 18,344 3,544,081 482,711
---------- ------------ --------- ------------- ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 11,764 1,293,888 11,808 2,250,380 443,202
Legal and auditing fees (Note 2).... 2,769 19,836 2,664 26,083 11,306
Custodian fees...................... 562 34,603 1,400 41,506 9,174
Shareholders' notices and reports... 84 27,274 448 70,565 5,764
Amortization of organization costs
(Note 1).......................... -- -- 349 -- --
Registration fees................... 2 -- 26 -- --
Directors' fees and expenses........ 44 6,347 47 13,092 2,033
Other............................... 22 8,649 71 18,125 2,613
---------- ------------ --------- ------------- ------------
Total Expenses........................ 15,247 1,390,597 16,813 2,419,751 474,092
Less reimbursable expenses (Note
2).............................. (2,009) -- (2,540) -- --
---------- ------------ --------- ------------- ------------
Net Expenses...................... 13,238 1,390,597 14,273 2,419,751 474,092
---------- ------------ --------- ------------- ------------
NET INVESTMENT INCOME................... 38,187 902,297 4,071 1,124,330 8,619
---------- ------------ --------- ------------- ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... (35,247) 17,341,248 (9,769) 101,313,741 1,290,693
Foreign currency transactions....... -- (14,811) -- -- --
Future contracts.................... -- -- -- -- --
---------- ------------ --------- ------------- ------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... (35,247) 17,326,437 (9,769) 101,313,741 1,290,693
---------- ------------ --------- ------------- ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... (189,361) 34,275,712 366,226 6,604,745 15,294,738
Translation of assets and liabilities
denominated in foreign currency..... -- 4,076 -- -- --
---------- ------------ --------- ------------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... (189,361) 34,279,788 366,226 6,604,745 15,294,738
---------- ------------ --------- ------------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... (224,608) 51,606,225 356,457 107,918,486 16,585,431
---------- ------------ --------- ------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $(186,421) $52,508,522 $360,528 $109,042,816 $16,594,050
---------- ------------ --------- ------------- ------------
---------- ------------ --------- ------------- ------------
</TABLE>
<TABLE>
<CAPTION>
*Net of foreign witholding taxes of:
<S> <C>
Global Bond Series $ 19,556
Asset Allocation Series 5,948
Global Asset Allocation Series 41,970
S & P 500 Index Series 11,993
Blue Chip Stock Series 2,932
Global Growth Series 244,914
Growth Stock Series 3,113
International Stock Series 112,719
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
** FOR THE PERIOD MARCH 25, 1998 (INCEPTION) TO JUNE 30, 1998.
84
<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
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 1,533,575 $ 3,313,980 $ 3,974,665 $ 8,872,753
Net realized gain (loss) on
investments and foreign currency
transactions........................ -- -- 1,137,136 1,395,092
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... -- 3,000 413,230 2,349,632
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 1,533,575 3,316,980 5,525,031 12,617,477
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (2,705,380) -- (10,443,459)
From net realized gains on
investments......................... -- -- -- --
Excess distributions of net realized
gains............................... -- -- -- (12,585)
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (2,705,380) -- (10,456,044)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 24,835,932 61,306,146 8,887,802 8,542,021
Proceeds from shares issued as a
result of reinvested dividends...... -- 2,705,380 -- 10,456,044
Less cost of repurchase............... (22,986,058) (69,520,242) (16,916,510) (40,767,607)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 1,849,874 (5,508,716) (8,028,708) (21,769,542)
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 3,383,449 (4,897,116) (2,503,677) (19,608,109)
NET ASSETS:
Beginning of period................... 57,009,235 61,906,351 142,069,864 161,677,973
------------- ------------- ------------- -------------
End of period (Note 4)................ $ 60,392,684 $ 57,009,235 $139,566,187 $142,069,864
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
DIVERSIFIED INCOME SERIES GLOBAL BOND SERIES
- -----------------------------------------------------------------------------------------------------
FOR THE
FOR THE SIX-MONTH
SIX-MONTH FOR THE PERIOD ENDED FOR THE
PERIOD ENDED YEAR ENDED JUNE 30, YEAR ENDED
JUNE 30, 1998 DECEMBER 31, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 3,603,525 $ 7,325,647 $ 448,830 $ 879,335
Net realized gain (loss) on
investments and foreign currency
transactions........................ 1,041,434 269,397 (215,628) (482,718)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... (322,366) 2,635,067 410,862 (360,352)
------------- ------------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 4,322,593 10,230,111 644,064 36,265
------------- ------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (7,363,139) -- (692,786)
From net realized gains on
investments......................... -- -- -- (189,105)
Excess distributions of net realized
gains............................... -- (16,851) -- --
------------- ------------- ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (7,379,990) -- (881,891)
------------- ------------- ------------ ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 5,831,237 5,081,901 1,350,340 3,704,954
Proceeds from shares issued as a
result of reinvested dividends...... -- 7,379,990 -- 881,891
Less cost of repurchase............... (5,075,026) (15,942,672) (1,890,127) (3,276,871)
------------- ------------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 756,211 (3,480,781) (539,787) 1,309,974
------------- ------------- ------------ ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 5,078,804 (630,660) 104,277 464,348
NET ASSETS:
Beginning of period................... 105,199,940 105,830,600 20,691,969 20,227,621
------------- ------------- ------------ ------------
End of period (Note 4)................ $110,278,744 $105,199,940 $20,796,246 $20,691,969
------------- ------------- ------------ ------------
------------- ------------- ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
85
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
GLOBAL ASSET
HIGH YIELD SERIES ALLOCATION SERIES
- -------------------------------------------------------------------------------------------------------
FOR THE FOR THE
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 3,167,914 $ 5,322,072 $ 683,534 $ 1,091,307
Net realized gain (loss) on
investments and foreign currency
transactions........................ (197,027) 1,616,252 1,166,765 2,194,474
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... (1,720,218) (2,246,434) 2,715,051 2,474,960
-------------- ------------ -------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 1,250,669 4,691,890 4,565,350 5,760,741
-------------- ------------ -------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (57,517) -- (958,004)
From net realized gains on
investments......................... -- -- -- (1,725,819)
Excess distributions of net realized
gains............................... -- (21,313) -- --
-------------- ------------ -------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (78,830) -- (2,683,823)
-------------- ------------ -------------- ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 12,579,713 17,384,708 5,828,555 11,926,186
Proceeds from shares issued as a
result of reinvested dividends...... -- 78,830 -- 2,683,823
Less cost of repurchase............... (3,221,590) (5,426,218) (1,842,199) (2,511,567)
-------------- ------------ -------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 9,358,123 12,037,320 3,986,356 12,098,442
-------------- ------------ -------------- ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 10,608,792 16,650,380 8,551,706 15,175,360
NET ASSETS:
Beginning of period................... 59,228,440 42,578,060 52,482,392 37,307,032
-------------- ------------ -------------- ------------
End of period (Note 4)................ $ 69,837,232 $59,228,440 $ 61,034,098 $52,482,392
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
</TABLE>
<TABLE>
<CAPTION>
BLUE CHIP STOCK SERIES INTERNATIONAL STOCK SERIES
- ------------------------------------------------------------------------------------------------------
FOR THE FOR THE
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 258,660 $ 340,780 $ 937,405 $ 739,033
Net realized gain (loss) on
investments and foreign currency
transactions........................ 3,060,821 (357,643) 3,390,575 2,268,127
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... 12,711,305 10,236,126 10,538,588 4,144,307
------------- ------------ -------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 16,030,786 10,219,263 14,866,568 7,151,467
------------- ------------ -------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (317,040) -- (862,090)
From net realized gains on
investments......................... -- (14,834) -- (2,341,614)
Excess distributions of net realized
gains............................... -- -- -- --
------------- ------------ -------------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (331,874) -- (3,203,704)
------------- ------------ -------------- ------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 41,635,483 51,873,817 11,268,443 23,285,792
Proceeds from shares issued as a
result of reinvested dividends...... -- 331,874 -- 3,203,705
Less cost of repurchase............... (1,260,076) (970,631) (8,114,204) (3,626,173)
------------- ------------ -------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 40,375,407 51,235,060 3,154,239 22,863,324
------------- ------------ -------------- ------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 56,406,193 61,122,449 18,020,807 26,811,087
NET ASSETS:
Beginning of period................... 78,728,607 17,606,158 79,142,428 52,331,341
------------- ------------ -------------- ------------
End of period (Note 4)................ $135,134,800 $78,728,607 $ 97,163,235 $79,142,428
------------- ------------ -------------- ------------
------------- ------------ -------------- ------------
</TABLE>
86
<PAGE>
<TABLE>
<CAPTION>
ASSET ALLOCATION SERIES VALUE SERIES
----------------------------- -----------------------------
FOR THE FOR THE
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 7,247,168 $ 13,892,259 $ 427,064 $ 461,950
Net realized gain (loss) on
investments and foreign currency
transactions........................ 28,945,471 52,435,168 4,890,562 3,157,481
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... 23,400,326 14,177,467 1,091,181 3,509,573
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 59,592,965 80,504,894 6,408,807 7,129,004
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (13,867,757) -- (467,774)
From net realized gains on
investments......................... -- (51,914,842) -- (2,671,473)
Excess distributions of net realized
gains............................... -- (43,990) -- --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (65,826,589) -- (3,139,247)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 15,922,265 33,396,356 23,213,083 35,435,693
Proceeds from shares issued as a
result of reinvested dividends...... -- 65,826,589 -- 3,139,247
Less cost of repurchase............... (13,356,979) (29,333,554) (2,652,478) (1,458,270)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 2,565,286 69,889,391 20,560,605 37,116,670
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 62,158,251 84,567,696 26,969,412 41,106,427
NET ASSETS:
Beginning of period................... 482,280,029 397,712,333 55,057,902 13,951,475
------------- ------------- ------------- -------------
End of period (Note 4)................ $544,438,280 $482,280,029 $ 82,027,314 $ 55,057,902
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
GROWTH & INCOME SERIES S & P 500 INDEX SERIES
----------------------------- -----------------------------
FOR THE FOR THE
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 3,467,114 $ 4,900,521 $ 905,272 $ 866,865
Net realized gain (loss) on
investments and foreign currency
transactions........................ 9,077,285 3,221,007 752,095 847,118
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... 13,882,758 37,967,041 21,688,097 13,027,357
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 26,427,157 46,088,569 23,345,464 14,741,340
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (4,905,160) -- (869,171)
From net realized gains on
investments......................... -- (2,662,426) -- (807,932)
Excess distributions of net realized
gains............................... -- -- -- --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (7,567,586) -- (1,677,103)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 32,757,350 70,154,490 68,160,512 92,987,716
Proceeds from shares issued as a
result of reinvested dividends...... -- 7,567,586 -- 1,677,102
Less cost of repurchase............... (2,308,815) (6,204,897) (15,063,205) (20,135,877)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 30,448,535 71,517,179 53,097,307 74,528,941
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 56,875,692 110,038,162 76,442,771 87,593,178
NET ASSETS:
Beginning of period................... 244,970,367 134,932,205 109,571,767 21,978,589
------------- ------------- ------------- -------------
End of period (Note 4)................ $301,846,059 $244,970,367 $186,014,538 $109,571,767
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
MID CAP SMALL CAP LARGE CAP
STOCK SERIES VALUE SERIES GLOBAL GROWTH SERIES GROWTH SERIES
-------------- -------------- ----------------------------- --------------
FOR THE PERIOD FOR THE PERIOD FOR THE FOR THE PERIOD
MARCH 25, 1998 MARCH 25, 1998 SIX-MONTH FOR THE MARCH 25, 1998
(INCEPTION) TO (INCEPTION) TO PERIOD ENDED YEAR ENDED (INCEPTION) TO
JUNE 30, 1998 JUNE 30, 1998 JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998
(UNAUDITED) (UNAUDITED) (UNAUDITED) 1997 (UNAUDITED)
-------------- -------------- ------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 17,409 $ 38,187 $ 902,297 $ 418,960 $ 4,071
Net realized gain (loss) on
investments and foreign currency
transactions........................ (46,055) (35,247) 17,326,437 15,959,078 (9,769)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... (247,970) (189,361) 34,279,788 6,804,752 366,226
-------------- -------------- ------------- ------------- --------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... (276,616) (186,421) 52,508,522 23,182,790 360,528
-------------- -------------- ------------- ------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- -- -- -- --
From net realized gains on
investments......................... -- -- -- -- --
Excess distributions of net realized
gains............................... -- -- -- -- --
-------------- -------------- ------------- ------------- --------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- -- -- -- --
-------------- -------------- ------------- ------------- --------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 6,202,550 7,227,013 7,201,296 32,866,688 6,414,150
Proceeds from shares issued as a
result of reinvested dividends...... -- -- -- -- --
Less cost of repurchase............... (75,480) (12,401) (25,394,953) (22,625,629) (10,044)
-------------- -------------- ------------- ------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. 6,127,070 7,214,612 (18,193,657) 10,241,059 6,404,106
-------------- -------------- ------------- ------------- --------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 5,850,454 7,028,191 34,314,865 33,423,849 6,764,634
NET ASSETS:
Beginning of period................... -- -- 353,254,570 319,830,721 --
-------------- -------------- ------------- ------------- --------------
End of period (Note 4)................ $ 5,850,454 $ 7,028,191 $387,569,435 $353,254,570 $ 6,764,634
-------------- -------------- ------------- ------------- --------------
-------------- -------------- ------------- ------------- --------------
<CAPTION>
GROWTH STOCK SERIES AGGRESSIVE GROWTH SERIES
----------------------------- -----------------------------
FOR THE FOR THE
SIX-MONTH FOR THE SIX-MONTH FOR THE
PERIOD ENDED YEAR ENDED PERIOD ENDED YEAR ENDED
JUNE 30, 1998 DECEMBER 31, JUNE 30, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................. $ 1,124,330 $ 2,324,447 $ 8,619 $ 251,481
Net realized gain (loss) on
investments and foreign currency
transactions........................ 101,313,741 38,901,237 1,290,693 (9,457,837)
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency.................... 6,604,745 39,658,806 15,294,738 12,954,426
------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... 109,042,816 80,884,490 16,594,050 3,748,070
------------- ------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............ -- (66,251) -- (1,710)
From net realized gains on
investments......................... -- -- -- --
Excess distributions of net realized
gains............................... -- -- -- --
------------- ------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS..... -- (66,251) -- (1,710)
------------- ------------- ------------- -------------
CAPITAL STOCK SOLD AND REPURCHASED:
(NOTE 5)
Proceeds from sale of shares.......... 9,435,085 27,477,854 8,392,187 29,055,088
Proceeds from shares issued as a
result of reinvested dividends...... -- 66,251 -- 1,710
Less cost of repurchase............... (49,883,493) (62,424,600) (7,425,523) (7,278,761)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM SHARES TRANSACTIONS.............. (40,448,408) (34,880,495) 966,664 21,778,037
------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET
ASSETS................................ 68,594,408 45,937,744 17,560,714 25,524,397
NET ASSETS:
Beginning of period................... 707,154,786 661,217,042 122,455,160 96,930,763
------------- ------------- ------------- -------------
End of period (Note 4)................ $775,749,194 $707,154,786 $140,015,874 $122,455,160
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
87
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The Fund is an open-end
management investment company which currently is comprised of eighteen
separate investment portfolios and series of capital stock: Money Market
Series, U.S. Government Securities Series, Diversified Income Series, High
Yield Series, Global Asset Allocation Series, Asset Allocation Series, Value
Series, Growth & Income Series, S & P 500 Index Series, Blue Chip Stock
Series, International Stock Series, Mid Cap Stock Series, Small Cap Value
Series, Global Growth Series, Large Cap Growth Series, Growth 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. AN INVESTMENT IN MONEY MARKET
SERIES IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
- The objective of the "U.S. Government Securities Series" is to maximize
total return (from income and market value change), while providing
shareholders with a high level of current income consistent with prudent
investment risk 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 to maximize total
return (from income and market value change), by investing primarily in a
diversified portfolio of government securities and investment grade
corporate bonds.
- The objectives 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 (from
income and market value change), by investing primarily in high-yield,
high-risk fixed-income securities, which may not be suitable for all
investors.
- 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 "Asset Allocation Series" is maximum total return on
invested capital, to be derived primarily from capital appreciation,
dividends, and interest.
- The primary 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
concept of fundamental value.
- The objectives of the "Growth & Income Series" are capital appreciation and
current income, which it 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 total
return of the Standard & Poor's 500 Composite Stock Price Index primarily
through investments in equity securities.
- The primary objective of the "Blue Chip Stock Series" is 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 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 "Mid Cap Stock Series" is total investment returns
(including capital appreciation and income) that consistently outperform
the Standard & Poor's 400 MidCap Index. The Series attempts to maintain a
diversified holding in common stocks of medium capitalization companies
with a market value between $200 million and $5 billion.
- The objective of the "Small Cap Value Series" is capital appreciation. The
Series invests primarily in common stocks of small companies that are out
of favor with markets or that have not yet been discovered by the broader
investment community and are therefore believed to be undervalued.
- 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 objective of the "Large Cap Growth Series" is long-term growth of
capital. The Series invests primarily in the equity securities of a limited
number of large, carefully selected, high quality United States companies
whose securities are believed likely to achieve superior earnings growth.
- 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 "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.
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 Mid Cap Stock Series, Small Cap Value Series and Large Cap
Growth Series was March 25, 1998, and the commencement of operations was May
1, 1998.
The significant accounting policies followed by the Portfolios are summarized
as follows:
SECURITY VALUATION: Investments in securities traded on a national securities
exchange 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. For
fixed income securities, 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
88
<PAGE>
- --------------------------------------------------------------------------------
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, assets with a market
value equal to the amount of its purchase commitments. As of June 30, 1998
U.S. Government Securities Series, Diversified Income Series and Asset
Allocation Series entered into outstanding when-issued or forward commitments
of $4,653,426, $2,792,056 and $3,722,741 respectively.
Consistent with its ability to purchase securities on a when-issued basis,
the U.S. Government Securities Series, Diversified Income Series and Asset
Allocation Series have entered into transactions to defer settlement of its
purchase commitments. As an inducement to defer settlement, the Portfolio
repurchases a similar security for settlement at a later date at a lower
purchase price relative to the current market. This transaction is referred
to as a Dollar Roll.
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 date on security transactions, and other translation
gains or losses on dividends, interest income and foreign withholding taxes.
Certain Portfolios may enter into forward foreign currency exchange contracts
for operational purposes and to attempt to minimize the risk from adverse
exchange rate fluctuations. The net U.S. dollar value of foreign currency
underlying all contractual commitments held by the Portfolio and the
resulting unrealized appreciation or depreciation are determined using
foreign currency exchange rates from an independent pricing service. The
Portfolio 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. Each Portfolio amortizes bond premium, market
discount and original issue discount. For the period ended June 30, 1998, the
cost of purchases and proceeds from sales of securities for Money Market
Series were $157,548,420 and $154,533,957, 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............ $ 118,608,819 $ 121,958,171
<CAPTION>
Cost of Proceeds
Purchases from Sales
<S> <C> <C>
- --------------------------------------------------------------------------------
Diversified Income Series.................... 66,338,330 67,633,697
Global Bond Series........................... 15,281,774 15,364,374
High Yield Series............................ 67,924,346 56,238,818
Global Asset Allocation Series............... 19,549,344 16,164,945
Asset Allocation Series...................... 289,334,263 267,713,333
Value Series................................. 70,386,591 51,911,140
Growth & Income Series....................... 63,521,877 27,880,651
S & P 500 Index Series....................... 53,591,331 523,623
Blue Chip Stock Series....................... 57,037,579 18,017,428
International Stock Series................... 20,605,944 21,126,432
Mid Cap Stock Series......................... 6,430,916 668,921
Small Cap Value Series....................... 6,477,649 488,441
Global Growth Series......................... 60,282,556 66,842,856
Large Cap Growth Series...................... 6,002,030 524,348
Growth Stock Series.......................... 285,720,169 286,733,123
Aggressive Growth Series..................... 13,003,264 15,924,664
</TABLE>
In the Global Asset Allocation Series for the period ended June 30, 1998,
brokerage commissions paid to an affiliated broker amounted to $2,445.
LENDING OF PORTFOLIO SECURITIES: At June 30, 1998, securities valued at
$91,434,048, $27,679,554, and $13,697,709, were on loan to brokers from
Global Growth Series, Growth & Income Series, and Aggressive Growth Series,
respectively. For collateral, the Portfolio's custodian received $93,412,589,
$28,565,224, and $14,099,277, 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 $62,169, $23,664, and $31,926, for
the period ended June 30, 1998, for Global Growth Series, Growth & Income
Series, and Aggressive 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. On a calendar year basis, the Portfolios intend to distribute
substantially all of their net investment income and realized gains, if any,
to avoid the payment of federal excise taxes.
Net investment income and net realized gains may differ for financial
statement and tax purposes. The character of distributions made during the
year from net investment income or net realized gains may, therefore, differ
from their ultimate characterization for federal income tax purposes. Also,
due to the timing of dividend distributions, the fiscal year in which amounts
are distributed may differ from the year that the income or realized gains
(losses) were recorded by the Portfolios. The effect on dividend
distributions of certain current year permanent book-to-tax differences is
reflected as excess distributions of net realized gains in the statements of
changes in net assets and the financial highlights.
<TABLE>
<CAPTION>
Global
Global Asset Blue Chip Global
Bond Allocation Stock International Growth
Series Series Series Stock Series Series
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
Accumulated Net Realized Gain................ $ 371,671 $ 425,239 $ 61 $ 14,656 $ 14,811
Undistributed Net Investment Income.......... $ (371,671) $ (425,239) $ (61) $ (14,656) $ (14,811)
</TABLE>
89
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
For federal income tax purposes the portfolios had the following capital loss
carryovers at December 31, 1997, which, if not offset by subsequent capital
gains, will expire in 1998 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.......................... $ 81,339
U.S. Government Securitites Series........... 19,568,683
Diversified Income Series.................... 9,476,925
Blue Chip Stock Series....................... 317,348
Global Growth Series......................... 923,213
International Stock Series................... 906,021
Aggressive Growth Series..................... 15,743,221
</TABLE>
ILLIQUID SECURITIES: At June 30, 1998, 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 Stock
Series currently limit investments in illiquid securities to 5% of total net
assets; Global Growth Series to 10%; Global Bond Series, High Yield Series,
Global Asset Allocation Series, Value Series, Growth and Income Series, S&P
500 Index Series, Blue Chip Stock Series, International Stock Series, Mid Cap
Stock Series, Small Cap Value Series, Large Cap Growth Series and Aggressive
Growth Series to 15%, of total net assets, at market value, at date of
purchase. The aggregate values of such securities at June 30, 1998, were
$701,132 Diversified Income Series; $6,685,653 High Yield Series; $291,040
Global Asset Allocation Series; $5,248,156 Asset Allocation Series;
$3,834,125 Growth & Income Series; $1,743,816 Blue Chip Stock Series;
$14,959,820 Global Growth Series, which represents .64%, 9.57%, .48%, .96%,
1.27%, 1.29%, 3.86% 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.
DEFERRED COSTS: Organization costs were incurred with the commencement of
operations of the Mid Cap Stock Series, Small Cap Value Series and the Large
Cap Growth Series. These costs will be amortized over sixty months on a
straight line basis beginning May 1, 1998.
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.
FUTURES TRANSACTIONS: Certain Portfolios may invest in financial futures
contracts in order to gain exposure to or protect against changes in the
market. The S & P 500 Index Series and Mid Cap Stock Series are exposed to
market risk as a result of changes in the value of the underlying financial
instruments (see the Notes to the Schedule of Investments). Investment in
financial futures require the Funds 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 Funds recognize 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 June 30, 1998 and their related unrealized market
appreciation are set forth in the Notes to the Schedule of Investments.
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 .30%
For assets over $500 million .25%
U.S. Government Securities Series For the first $50 million .50%
For assets over $50 million .45%
Diversified Income Series For the first $50 million .50%
For assets over $50 million .45%
Global Bond Series For the first $100 million .75%
For assets over $100 million .65%
High Yield Series For the first $250 million .50%
For assets over $250 million .45%
Global Asset Allocation Series For the first $100 million .90%
For assets over $100 million .85%
Asset Allocation Series For the first $250 million .50%
For assets over $250 million .45%
Value Series For the first $100 million .70%
For assets over $100 million .60%
Growth & Income Series For the first $100 million .70%
For assets over $100 million .60%
S & P 500 Index Series For all assets .40%
Blue Chip Stock Series For the first $100 million .90%
For assets over $100 million .85%
International Stock Series For the first $100 million .85%
For assets over $100 million .80%
Mid Cap Stock Series For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million .80%
Small Cap Value Series For the first $50 million .90%
For assets over $50 million .85%
Global Growth Series For the first $500 million .70%
For assets over $500 million .60%
Large Cap Growth Series For the first $100 million .90%
For the next $100 million .85%
For assets over $200 million .80%
Growth Stock Series For the first $100 million .70%
For assets over $100 million .60%
Aggressive Growth Series For the first $100 million .70%
For assets over $100 million .60%
</TABLE>
The Global Bond Series, Global Asset Allocation Series, S&P 500 Index Series,
Blue Chip Series, International Stock Series, Mid Cap Stock Series, Small Cap
Value Series and Large Cap Growth Series have retained sub-advisers under an
investment sub-advisory agreement 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.
90
<PAGE>
- --------------------------------------------------------------------------------
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 Asset Management For the first $100 .35%
International Ltd. million .225%
For assets over $100
million
Global Asset Allocation Morgan Stanley Asset For the first $100 .50%
Series Management Limited million .40%
For assets over $100
million
S & P 500 Index Series The Dreyfus Corporation For all levels of assets .17%
Blue Chip Stock Series T. Rowe Price Associate, For the first $100 .50%
Inc. million .45%
For assets over $100
million
International Stock Lazard-Freres Asset For the first $100 .45%
Series Management million .375%
For assets over $100
million
Mid Cap Stock Series The Dreyfus Corporation For the first $100 .50%
million .45%
For the next $150 million .40%
For assets over $250
million
Small Cap Value Series Berger Associates For the first $50 million .50%
For assets over $50 .45%
million
Large Cap Growth Series Alliance Capital For the first $100 .50%
Management L.P. million .45%
For the next $100 million .40%
For assets over $200
million
</TABLE>
Advisers has voluntarily undertaken to limit annual expenses for Mid Cap
Stock Series, Small Cap Value Series and Large Cap Growth Series (exclusive
of interest, taxes, brokerage commissions and non-recurring extraordinary
charges and expenses) commencing May 1, 1998 to 1.25% of average net assets.
During the semi-annual period ended June 30, 1998, Advisers reimbursed the
funds $8,172, $2,009, and $2,540, respectively.
For the period ended June 30, 1998, 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.......................... $ 1,091
U.S. Government Securitites Series........... 2,380
Diversified Income Series.................... 1,686
Global Bond Series........................... 456
High Yield Series............................ 893
Global Asset Allocation Series............... 784
Asset Allocation Series...................... 6,397
Value Series................................. 536
Growth & Income Series....................... 2,678
S & P 500 Index Series....................... 843
Blue Chip Stock Series....................... 669
International Stock Series................... 1,091
Mid Cap Stock Series......................... 2,687
Small Cap Value Series....................... 98
Global Growth Series......................... 5,207
Large Cap Growth Series...................... 50
Growth Stock Series.......................... 10,215
Aggressive Growth Series..................... 1,636
</TABLE>
3. FORWARD FOREIGN CURRENCY CONTRACTS: At June 30, 1998, the Global Bond Series,
Global Asset Allocation Series, Global Growth Series and International Stock
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 $55,568, ($32,463),
($4,395), $506, respectively, on these contracts is included in the
accompanying financial statements. The terms of the open contracts are as
follows:
91
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL BOND SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Jun 30, Currecy To Jun 30, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
July 21, 1998 4,560,000 $2,823,912 2,742,555 $2,742,555 $(81,357)
Australian Dollar U.S. Dollar
July 21, 1998 891,936 891,936 1,520,000 941,304 49,368
U.S. Dollar Australian Dollar
July 21, 1998 329,218 329,218 480,000 326,642 (2,576)
U.S. Dollar Canadian Dollar
July 21, 1998 4,460,000 2,474,717 2,516,930 2,516,930 42,213
Deutsche Mark U.S. Dollar
July 21, 1998 10,330,000 1,504,284 1,529,917 1,529,917 25,633
Danish Krone U.S. Dollar
July 21, 1998 765,846 765,846 470,000 783,076 17,230
U.S. Dollar British Pound Sterling
July 21, 1998 88,478,340 639,673 620,000 620,000 (19,673)
Japanese Yen U.S. Dollar
July 21, 1998 3,740,691 3,740,691 520,826,000 3,765,421 24,730
U.S. Dollar Japanese Yen
----------- ----------- ---------------
$13,170,277 $13,225,845 $ 55,568
----------- ----------- ---------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL ASSET ALLOCATION SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Jun 30, Currecy To Jun 30, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Aug. 19, 1998 450,000 $ 306,436 307,000 $ 307,000 $ 564
Canadian Dollar U.S. Dollar
Sept. 3, 1998 1,000,000 619,454 617,100 617,100 (2,354)
Australian Dollar U.S. Dollar
Sept. 3, 1998 700,000 433,617 425,705 425,705 (7,912)
Australian Dollar U.S. Dollar
Dec. 16, 1998 800,000 1,321,262 1,301,040 1,301,040 (20,222)
British Pound Sterling U.S. Dollar
Dec. 16, 1998 335,000 553,279 550,740 550,740 (2,539)
British Pound Sterling U.S. Dollar
----------- ----------- ---------------
$3,234,048 $3,201,585 $(32,463)
----------- ----------- ---------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL GROWTH SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Jun 30, Currecy To Jun 30, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depeciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
July 1, 1998 1,340,610 $ 244,347 243,120 $ 243,120 $ (1,227)
Finnish Markka U.S. Dollar
July 2, 1998 595,541 108,547 107,915 107,915 (632)
Finnish Markka U.S. Dollar
July 1, 1998 612,287 612,287 1,084,360,662 610,031 (2,256)
U.S. Dollar Italian Lira
July 1, 1998 2,881,330 20,761 20,294 20,294 (467)
Japanese Yen U.S. Dollar
July 6, 1998 1,714,840 12,356 12,297 12,297 (59)
Japanese Yen U.S. Dollar
July 2, 1998 1,512,855 1,512,855 279,500,000 1,513,101 246
U.S. Dollar Portuguese Escudo
----------- ----------- ---------------
$2,511,153 $2,506,758 $ (4,395)
----------- ----------- ---------------
</TABLE>
92
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL STOCK SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Jun 30, Currency To Jun 30, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
July 1, 1998 35,879 $ 35,879 5,086,187 $ 36,648 $ 769
U.S. Dollar Japanese Yen
July 1, 1998 11,978 11,978 1,693,687 12,203 225
U.S. Dollar Japanese Yen
July 1, 1998 1,981,775 14,280 13,976 13,976 (304)
Japanese Yen U.S. Dollar
July 2, 1998 24,684 24,684 3,421,217 24,651 (33)
U.S. Dollar Japanese Yen
July 6, 1998 256,782 256,782 456,173,595 256,631 (151)
U.S. Dollar Italian Lira
----------- ----------- ------
$ 343,603 $ 344,109 $ 506
----------- ----------- ------
</TABLE>
4. NET ASSETS INCLUDE UNDISTRIBUTED (EXCESS OF DISTRIBUTIONS OVER) NET
INVESTMENT INCOME OF:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
- -----------------------------------------------------------------------------
Money Market Series.......................... $ 4,847,184 $ 3,313,609
U.S. Government Securitites Series........... 12,859,428 8,884,763
Diversified Income Series.................... 10,945,903 7,342,378
Global Bond Series........................... (124,122) (201,281)
High Yield Series............................ 8,510,993 5,343,079
Global Asset Allocation Series............... 374,029 115,734
Asset Allocation Series...................... 7,427,897 180,729
Value Series................................. 427,064 --
Growth & Income Series....................... 3,467,114 --
<CAPTION>
1998 1997
<S> <C> <C>
- -----------------------------------------------------------------------------
S & P 500 Index Series....................... $ 909,926 $ 4,654
Blue Chip Stock Series....................... 283,215 24,616
International Stock Series................... 1,760,338 837,589
Mid Cap Stock Series......................... 17,409 --
Small Cap Value Series....................... 38,187 --
Global Growth Series......................... 1,277,743 390,257
Large Cap Growth Series...................... 4,071 --
Growth Stock Series.......................... 3,448,672 2,324,342
Aggressive Growth Series..................... 259,743 251,124
</TABLE>
5. SHARES OF CAPITAL STOCK SOLD AND REPURCHASED:
<TABLE>
<CAPTION>
SHARES ISSUED AS A
RESULT OF
REINVESTED
SHARES SOLD DIVIDENDS
--------------------------- -------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------
Money Market Series.......................... 2,220,780 5,533,479 -- 249,293
U.S. Government Securities Series............ 816,554 800,925 -- 1,020,261
Diversified Income Series.................... 476,590 427,986 -- 644,619
Global Bond Series........................... 124,403 342,502 -- 82,806
High Yield Series............................ 1,142,928 1,683,695 -- 7,380
Global Asset Allocation Series............... 407,965 916,423 -- 203,873
Asset Allocation Series...................... 851,850 1,768,619 -- 3,773,001
Value Series................................. 1,614,499 2,752,180 -- 235,641
Growth & Income Series....................... 1,644,802 4,127,164 -- 406,642
S & P 500 Index Series....................... 4,157,395 6,825,585 -- 112,916
Blue Chip Stock Series....................... 2,572,838 3,878,517 -- 22,898
International Stock Series................... 746,119 1,745,215 -- 241,819
Mid Cap Stock Series......................... 628,247 -- -- --
Small Cap Value Series....................... 733,593 -- -- --
Global Growth Series......................... 329,953 1,712,007 -- --
Large Cap Growth Series...................... 639,009 -- -- --
Growth Stock Series.......................... 243,704 793,904 -- 1,742
Aggressive Growth Series..................... 555,023 2,311,002 -- 125
<CAPTION>
NET INCREASE (DECREASE)
SHARES REPURCHASED OF SHARES
------------------------------- -----------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ---------------------------------------------
Money Market Series.......................... (2,054,118) (6,270,961) 166,662 (488,189)
U.S. Government Securities Series............ (1,556,933) (3,815,885) (740,379) (1,994,699)
Diversified Income Series.................... (415,473) (1,340,634) 61,117 (268,029)
Global Bond Series........................... (174,154) (302,578) (49,751) 122,730
High Yield Series............................ (292,433) (524,733) 850,495 1,166,342
Global Asset Allocation Series............... (130,739) (192,721) 277,226 927,575
Asset Allocation Series...................... (712,268) (1,572,987) 139,582 3,968,633
Value Series................................. (178,205) (111,372) 1,436,294 2,876,449
Growth & Income Series....................... (116,719) (371,603) 1,528,083 4,162,203
S & P 500 Index Series....................... (887,542) (1,516,202) 3,269,853 5,422,299
Blue Chip Stock Series....................... (76,241) (74,415) 2,496,597 3,827,000
International Stock Series................... (535,338) (269,473) 210,781 1,717,561
Mid Cap Stock Series......................... (8,164) -- 620,083 --
Small Cap Value Series....................... (1,282) -- 732,311 --
Global Growth Series......................... (1,178,935) (1,139,381) (848,982) 572,626
Large Cap Growth Series...................... (1,007) -- 638,002 --
Growth Stock Series.......................... (1,263,392) (1,781,802) (1,019,688) (986,156)
Aggressive Growth Series..................... (502,630) (563,264) 52,393 1,747,863
</TABLE>
6. At the special shareholders' meeting June 30, 1998, shareholders of the
Global Bond Series approved a new investment sub-advisory agreement for the
Series on substantially the same terms as the most recent sub-advisory
agreement for the Series. Because the ultimate parent of the Sub-Advisor
(Mercury Asset Management International Ltd.) was acquired by Merrill Lynch &
Co., the prior Investment Sub-Advisory Agreement has terminated.
93
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
7. FINANCIAL HIGHLIGHTS: Selected per share historical data for each of the
Series was as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------------------------------------
MONEY MARKET SERIES 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 11.03 $ 10.94 $ 10.83 $ 10.63 $ 10.23 $ 10.21
-------- -------- -------- -------- -------- --------
Operations:
Investment income - net............... .27 .58 .57 .60 .41 .28
Net realized and unrealized gains
(losses) on investments............. .02 -- -- -- (.01) .02
-------- -------- -------- -------- -------- --------
Total from operations................... .29 .58 .57 .60 .40 .30
-------- -------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.49) (.46) (.40) -- (.28)
-------- -------- -------- -------- -------- --------
Net asset value, end of period.......... $ 11.32 $ 11.03 $ 10.94 $ 10.83 $ 10.63 $ 10.23
-------- -------- -------- -------- -------- --------
Total Return @.......................... 2.63% 5.34% 5.17% 5.71% 3.92% 2.77%
Net assets end of period (000s
omitted).............................. $ 60,393 $ 57,009 $ 61,906 $ 41,807 $ 44,833 $ 28,682
Ratio of expenses to average daily net
assets................................ .39%* .38% .38% .40% .40% .44%
Ratio of net investment income to
average daily net assets.............. 5.23%* 5.19% 5.14% 5.44% 3.96% 2.74%
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ 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 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.68 $ 10.57 $ 11.16 $ 9.40 $ 10.94 $ 10.73
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .36 .80 .67 .70 .71 .74
Net realized and unrealized gains
(losses) on investments............. .07 .12 (.51) 1.06 (1.54) .46
--------- --------- --------- --------- --------- ---------
Total from operations................... .43 .92 .16 1.76 (.83) 1.20
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- (.81) (.75) -- (.71) (.74)
From net realized gains............... -- -- -- -- -- (.24)
Excess distributions of net realized
gains............................... -- -- -- -- -- (.01)
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... -- (.81) (.75) -- (.71) (.99)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 11.11 $ 10.68 $ 10.57 $ 11.16 $ 9.40 $ 10.94
--------- --------- --------- --------- --------- ---------
Total return @.......................... 4.03% 9.08% 2.21% 18.78% (6.44%) 9.45%
Net assets end of period (000s
omitted).............................. $ 139,566 $ 142,070 $ 161,678 $ 182,687 $ 172,656 $ 235,588
Ratio of expenses to average daily net
assets................................ .55%* .54% .53% .53% .53% .52%
Ratio of net investment income to
average daily net assets.............. 5.71%* 6.03% 6.17% 6.78% 6.87% 6.49%
Portfolio turnover rate................. 53% 148% 176% 115% 187% 141%
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ These are the portfolios total returns durning the period, including
reinvestment of all dividend and capital gains distributions.
94
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
------------------------------------------------------------------------
DIVERSIFIED INCOME SERIES 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 11.98 $ 11.70 $ 12.20 $ 10.40 $ 11.93 $ 11.34
--------- --------- --------- --------- -------- --------
Operations:
Investment income - net............... .40 .91 .82 .88 .87 .87
Net realized and unrealized gains
(losses) on investments............. .10 .26 (.40) .92 (1.53) 1.03
--------- --------- --------- --------- -------- --------
Total from operations................... .50 1.17 .42 1.80 (.66) 1.90
--------- --------- --------- --------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.89) (.91) -- (.87) (.87)
From net realized gains............... -- -- -- -- -- (.43)
Excess distributions of net realized
gains............................... -- -- (.01) -- -- (.01)
--------- --------- --------- --------- -------- --------
Total distributions to shareholders..... -- (.89) (.92) -- (.87) (1.31)
--------- --------- --------- --------- -------- --------
Net asset value, end of period.......... $ 12.48 $ 11.98 $ 11.70 $ 12.20 $ 10.40 $ 11.93
--------- --------- --------- --------- -------- --------
Total Return @.......................... 4.10% 10.44% 4.15% 17.26% (5.22%) 12.76%
Net assets end of period (000s
omitted).............................. $ 110,279 $ 105,200 $ 105,831 $ 109,120 $ 98,314 $ 92,589
Ratio of expenses to average daily net
assets................................ .55%* .55% .55% .55% .55% .57%
Ratio of net investment income to
average daily net assets.............. 6.76%* 7.11% 6.86% 7.78% 7.59% 7.15%
Portfolio turnover rate................. 43% 166% 171% 139% 142% 125%
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ 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 1998** 1997 1996 1995+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.65 $ 11.11 $ 11.30 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .31 .46 .57 .54
Net realized and unrealized gains
(losses) on investments............. .02 (.45) (.13) 1.52
-------- -------- -------- --------
Total from operations................... .33 .01 .44 2.06
-------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.37) (.43) (.54)
From net realized gains............... -- (.10) (.20) (.22)
-------- -------- -------- --------
Total distributions to shareholders..... -- (.47) (.63) (.76)
-------- -------- -------- --------
Net asset value, end of period.......... $ 10.98 $ 10.65 $ 11.11 $ 11.30
-------- -------- -------- --------
Total return @.......................... 3.15% .14% 3.15% 19.02%
Net assets end of period (000s
omitted).............................. $ 20,796 $ 20,692 $ 20,228 $ 13,187
Ratio of expenses to average daily net
assets................................ .93%* 1.10% 1.02% 1.28%*
Ratio of net investment income to
average daily net assets.............. 4.37%* 4.41% 5.07% 5.01%*
Portfolio turnover rate................. 80% 168% 129% 184%
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
+ 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.
95
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
--------------------------------------------------------
HIGH YIELD SERIES 1998** 1997 1996 1995 1994+
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 10.77 $ 9.83 $ 9.74 $ 9.47 $ 10.00
-------- -------- -------- -------- --------
Operations:
Investment income - net............... .46 .96 1.04 1.15 .71
Net realized and unrealized gains
(losses) on investments............. (.23) .00 .13 .30 (.53)
-------- -------- -------- -------- --------
Total from operations................... .23 .96 1.17 1.45 .18
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.02) (1.03) (1.14) (.71)
Excess distributions of net realized
gains............................... -- -- (.05) (.04) --
-------- -------- -------- -------- --------
Total distributions to shareholders..... -- (.02) (1.08) (1.18) (.71)
-------- -------- -------- -------- --------
Net asset value, end of period.......... $ 11.00 $ 10.77 $ 9.83 $ 9.74 $ 9.47
-------- -------- -------- -------- --------
Total Return @.......................... 2.12% 9.76% 10.52% 12.73% (0.75%)
Net assets end of period (000s
omitted).............................. $ 69,837 $ 59,228 $ 42,578 $ 28,129 $ 13,706
Ratio of expenses to average daily net
assets................................ .57%* .62% .63% .63% .75%*
Ratio of net investment income to
average daily net assets.............. 9.64%* 10.31% 10.22% 11.30% 10.44%*
Portfolio turnover rate................. 90% 353% 235% 130% 20%
</TABLE>
* Annualized.
** Six-month period ended June 30, 1998.
+ 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,
--------------------------------------------
GLOBAL ASSET ALLOCATION SERIES 1998** 1997 1996 1995+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.29 $ 12.34 $ 11.42 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .14 .28 .36 .35
Net realized and unrealized gains
(losses) on investments............. 1.01 1.39 1.19 1.55
-------- -------- -------- --------
Total from operations................... 1.15 1.67 1.55 1.90
-------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.26) (.38) (.34)
From net realized gains............... -- (.46) (.25) (.14)
-------- -------- -------- --------
Total distributions to shareholders..... -- (.72) (.63) (.48)
-------- -------- -------- --------
Net asset value, end of period.......... $ 14.44 $ 13.29 $ 12.34 $ 11.42
-------- -------- -------- --------
Total Return @.......................... 8.67% 13.51% 12.72% 17.47%
Net assets end of period (000s
omitted).............................. $ 61,034 $ 52,482 $ 37,307 $ 20,080
Ratio of expenses to average daily net
assets................................ 1.06%* 1.16% 1.20% 1.28%*
Ratio of net investment income to
average daily net assets.............. 2.39%* 2.42% 3.01% 3.26%*
Portfolio turnover rate................. 29% 51% 46% 44%
Average commission rate paid{::}........ $ .0292 $ .0360 $ .0412 --
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
+ 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.
{::} 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. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
96
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
--------------------------------------------------------------------------
ASSET ALLOCATION SERIES 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 17.62 $ 16.99 $ 15.90 $ 13.56 $ 14.14 $ 13.28
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .26 .59 .61 .65 .56 .52
Net realized and unrealized gains
(losses) on investments............. 1.91 2.82 1.38 2.35 (.58) .92
--------- --------- --------- --------- --------- ---------
Total from operations................... 2.17 3.41 1.99 3.00 (.02) 1.44
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- (.59) (.61) (.64) (.56) (.52)
From net realized gains............... -- (2.19) (.28) (.02) -- (.06)
Excess distributions of net realized
gains............................... -- -- (.01) -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions to shareholders..... -- (2.78) (.90) (.66) (.56) (.58)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 19.79 $ 17.62 $ 16.99 $ 15.90 $ 13.56 $ 14.14
--------- --------- --------- --------- --------- ---------
Total Return @.......................... 12.32% 20.24% 12.50% 21.97% (0.31%) 9.79%
Net assets end of period (000s
omitted).............................. $ 544,438 $ 482,280 $ 397,712 $ 341,511 $ 260,593 $ 204,603
Ratio of expenses to average daily net
assets................................ .52%* .53% .54% .55% .56% .56%
Ratio of net investment income to
average daily net assets.............. 2.85%* 3.16% 3.66% 4.25% 4.05% 3.72%
Portfolio turnover rate................. 50% 113% 115% 98% 73% 74%
Average commission rate paid{::}........ $ .0594 $ .0677 $ .0748 -- -- --
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ 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,
--------------------------------
VALUE SERIES 1998** 1997 1996+
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.42 $ 11.38 $ 10.27
-------- -------- --------
Operations:
Investment income - net............... .08 .12 .14
Net realized and unrealized gain
(loss) on investments............... 1.31 2.75 1.10
-------- -------- --------
Total from operations................... 1.39 2.87 1.24
-------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.13) (.13)
From net realized gains............... -- (.70) --
-------- -------- --------
Total distributions to shareholders..... -- (.83) (.13)
-------- -------- --------
Net asset value, end of period.......... $ 14.81 $ 13.42 $ 11.38
-------- -------- --------
Total return @.......................... 10.35% 25.24% 11.49%
Net assets end of period (000s
omitted).............................. $ 82,027 $ 55,058 $ 13,951
Ratio of expenses to average daily net
assets................................ .76%* .83% .87%*
Ratio of net investment income to
average daily net assets.............. 1.22%* 1.41% 1.72%*
Portfolio turnover rate................. 82% 121% 36%
Average commission rate paid{::}........ $ .0570 $ .0606 $ .0556
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
+ For the period May 1, 1996 (commencement of operations) to December
31, 1996. The portfolio's inception was March 28, 1996 when it was
initally 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.
@ These are the portfolio's total returns during the periods, including
reinvestment of all dividends 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.
97
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-----------------------------------------------------------
GROWTH & INCOME SERIES 1998** 1997 1996 1995 1994+
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 18.76 $ 15.16 $ 12.83 $ 10.07 $ 10.00
--------- --------- --------- -------- --------
Operations:
Investment income - net............... .23 .40 .34 .33 .21
Net realized and unrealized gains
(losses) on investments............. 1.70 3.80 2.54 2.76 .07
--------- --------- --------- -------- --------
Total from operations................... 1.93 4.20 2.88 3.09 .28
--------- --------- --------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.39) (.34) (.33) (.21)
From net realized gains............... -- (.21) (.21) -- --
--------- --------- --------- -------- --------
Total distributions to shareholders..... -- (.60) (.55) (.33) (.21)
--------- --------- --------- -------- --------
Net asset value, end of period.......... $ 20.69 $ 18.76 $ 15.16 $ 12.83 $ 10.07
--------- --------- --------- -------- --------
Total return @.......................... 10.31% 27.69% 21.51% 29.70% 1.74%
Net assets end of period (000s
omitted).............................. $ 301,846 $ 244,970 $ 134,932 $ 59,533 $ 16,276
Ratio of expenses to average daily net
assets................................ .67%* .70% .76% .80% .86%*
Ratio of net investment income to
average daily net assets.............. 2.51%* 2.63% 2.38% 2.86% 3.12%*
Portfolio turnover rate................. 11% 11% 20% 17% 2%
Average commission rate paid{::}........ $ .0600 $ .0710 $ .0688 $ -- $ --
</TABLE>
* Annualized.
** Six-month period ended June 30, 1998.
+ 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.
{::} 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 purchases
and sold.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
S&P 500 INDEX SERIES 1998** 1997 1996+
<S> <C> <C> <C>
- -----------------------------------------------------------------------------
Net asset value, beginning of period.... $ 14.93 $ 11.47 $ 10.09
--------- --------- --------
Operations:
Investment income - net............... .09 .12 .10
Net realized and unrealized gains
(losses) on investments............. 2.51 3.58 1.37
--------- --------- --------
Total from operations................... 2.60 3.70 1.47
--------- --------- --------
Distributions to shareholders:
From investment income - net.......... -- (.12) (.09)
From net realized gains............... -- (.12) --
--------- --------- --------
Total distributions to shareholders..... -- (.24) (.09)
--------- --------- --------
Net asset value, end of period.......... 17.53 14.93 11.47
--------- --------- --------
Total Return @.......................... 17.44% 32.32% 14.29%
Net assets end of period (000s
omitted).............................. $ 186,015 $ 109,572 $ 21,979
Ratio of expenses to average daily net
assets................................ .45%* .51% .79%*
Ratio of net investment income to
average daily net assets.............. 1.22%* 1.41% 1.47%*
Portfolio turnover rate................. 0% 5% 6%
Average commission rate paid{::}........ $ .0421 $ .0458 $ .0477
</TABLE>
* Annualized.
** Six-month period ended June 30, 1998.
+ 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. Supplementary 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.
@ These are the Fund's total return 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.
98
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-----------------------------------
BLUE CHIP STOCK SERIES 1998** 1997 1996+
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 14.76 $ 11.67 $ 10.07
--------- --------- ---------
Operations:
Investment income - net............... .03 .07 .07
Net realized and unrealized gains
(losses) on investments............. 2.46 3.08 1.60
--------- --------- ---------
Total from operations................... 2.49 3.15 1.67
--------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- (.06) (.07)
--------- --------- ---------
Net asset value, end of period.......... $ 17.25 $ 14.76 $ 11.67
--------- --------- ---------
Total Return @.......................... 16.93% 27.00% 16.24%
Net assets end of period (000s
omitted).............................. $ 135,135 $ 78,729 $ 17,606
Ratio of expenses to average daily net
assets................................ .94%* 1.02% 1.13%*
Ratio of net investment income to
average daily net assets.............. .49%* .75% .82%*
Portfolio turnover rate................. 18% 24% 17%
Average commission rate paid{::}........ $ .0330 $ .0346 $ .0329
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
+ 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. Supplementary 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.
@ These are the Fund's total return 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 1998** 1997 1996 1995+
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.36 $ 12.44 $ 11.27 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .15 .13 .20 .14
Net realized and unrealized gains
(losses) on investments............. 2.33 1.35 1.48 1.38
-------- -------- -------- --------
Total from operations................... 2.48 1.48 1.68 1.52
-------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.15) (.21) (.09)
From net realized gains............... -- (.41) (.30) (.16)
-------- -------- -------- --------
Total distributions to shareholders..... -- (.56) (.51) (.25)
-------- -------- -------- --------
Net asset value, end of period.......... $ 15.84 $ 13.36 $ 12.44 $ 11.27
-------- -------- -------- --------
Total Return @.......................... 18.55% 11.99% 14.02% 14.35%
Net assets end of period (000s
omitted).............................. $ 97,163 $ 79,142 $ 52,331 $ 21,327
Ratio of expenses to average daily net
assets................................ .95%* 1.08% 1.15% 1.14%*
Ratio of net investment income to
average daily net assets.............. 2.12%* 1.10% 1.71% 1.41%*
Portfolio turnover rate................. 24% 30% 27% 39%
Average commission rate paid{::}........ $ .0299 $ .0256 $ .0363 --
</TABLE>
* Annualized.
** Six-month period ended June 30, 1998.
+ 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.
{::} 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. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
99
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
MID CAP STOCK SERIES 1998+
<S> <C>
- --------------------------------------------------
Net asset value, beginning of period.... $ 9.94
-------
Operations:
Investment income - net............... .03
Net realized and unrealized gain
(loss) on investments............... (.54)
-------
Total from operations................... (.51)
-------
Net asset value, end of period.......... $ 9.43
-------
Total return @.......................... (5.08)%
Net assets end of period (000s
omitted).............................. $ 5,850
Ratio of expenses to average daily net
assets(a)............................. 1.25%*
Ratio of net investment income to
average daily net assets(a)........... 2.00%*
Portfolio turnover rate................. 18%
Average commission rate paid{::}........ $ .0404
</TABLE>
* Annualized.
+ For the period May 1, 1998 (commencement of operations) to June 30,
1998. The portfolio's inception was March 25, 1998, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1998. Information is not presented for the period from March 25, 1998
through May 1, 1998, 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 gain 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.
(a) Advisers has voluntarily undertaken to limit annual expenses for Mid
Cap Stock Series (exclusive of interest, taxes, brokerage commission
and non-recurring extraordinary charges and expenses) to 1.25% of the
average net assets. For the period presented, had the waiver and
reimbursement of expenses not been in effect, the ratios of expenses
and net investment income to average daily net assets would have been
1.76% and 1.05%, respectively.
<TABLE>
<CAPTION>
SMALL CAP VALUE SERIES 1998+
<S> <C>
- --------------------------------------------------
Net asset value, beginning of period.... $ 9.96
-------
Operations:
Investment income - net............... .05
Net realized and unrealized gain
(loss) on investments............... (.41)
-------
Total from operations................... (.36)
-------
Net asset value, end of period.......... $ 9.60
-------
Total return @.......................... (3.60)%
Net assets end of period (000s
omitted).............................. $ 7,028
Ratio of expenses to average daily net
assets(a)............................. 1.25%*
Ratio of net investment income to
average daily net assets(a)........... 4.06%*
Portfolio turnover rate................. 14%
Average commission rate paid{::}........ $ .0601
</TABLE>
* Annualized.
+ For the period May 1, 1998(commencement of operations) to June 30,
1998. The portfolio's inception was March 25, 1998, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1998. Supplementary information is not presented for the period from
March 25, 1998, through May 1, 1998, as the portfolio's shares were
not registered during the period.
@ These are the portfolios total return 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.
(a) Advisers has voluntarily undertaken to limit annual expenses for Small
Cap Value Series (exclusive of interest, taxes, brokerage commission
and non-recurring extraordinary charges and expenses) to 1.25% of the
average net assets. For the period presented, had the waiver and
reimbursement of expenses not been in effect, the ratios of expenses
and net investment income to average daily net assets would have been
1.62% and 3.85%, respectively.
100
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------------------
GLOBAL GROWTH SERIES 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 20.29 $ 19.00 $ 15.97 $ 12.31 $ 12.77 $ 10.86
--------- --------- --------- --------- --------- --------
Operations:
Investment income - net............... .05 .02 .03 .09 .10 .06
Net realized and unrealized gains
(losses) on investments............. 3.06 1.27 3.03 3.66 (.46) 1.91
--------- --------- --------- --------- --------- --------
Total from operations................... 3.11 1.29 3.06 3.75 (.36) 1.97
--------- --------- --------- --------- --------- --------
Distributions to shareholders:
From investment income - net.......... -- -- (.03) (.09) (.10) (.06)
--------- --------- --------- --------- --------- --------
Net asset value, end of period.......... $ 23.40 $ 20.29 $ 19.00 $ 15.97 $ 12.31 $ 12.77
--------- --------- --------- --------- --------- --------
Total return @.......................... 15.34% 6.82% 19.10% 30.49% (2.98)% 17.92%
Net assets end of period (000s
omitted).............................. $ 387,569 $ 353,255 $ 319,831 $ 207,913 $ 144,647 $ 75,882
Ratio of expenses to average daily net
assets................................ .75%* .79% .79% .80% .81% 1.02%
Ratio of net investment income to
average daily net assets.............. .49%* .12% .15% .64% .82% .53%
Portfolio turnover rate................. 17% 35% 14% 29% 20% 19%
Average commission rate paid{::}........ $ .0317 $ .0260 $ .0295 $ -- $ -- $ --
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ 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. The comparability of this information may be affected by the
fact that commission rates per share vary significantly among foreign
countries.
<TABLE>
<CAPTION>
LARGE CAP GROWTH SERIES 1998+
<S> <C>
- --------------------------------------------------
Net asset value, beginning of period.... $ 10.16
-------
Operations:
Net realized and unrealized gain
(loss) on investments............... .44
-------
Total from operations................... .44
-------
Net asset value, end of period.......... $ 10.60
-------
Total return @.......................... 4.39%
Net assets end of period (000s
omitted).............................. $ 6,765
Ratio of expenses to average daily net
assets(a)............................. 1.25%*
Ratio of net investment income to
average daily net assets(a)........... (.02)%*
Portfolio turnover rate................. 8%
Average commission rate paid{::}........ $ .0522
</TABLE>
* Annualized.
+ For the Period May 1, 1998 (commencement of operations) to June 30,
1998. The portfolio's inception was March 25, 1998, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1998. Information is not presented for the period from March 25, 1998,
through May 1, 1998, 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.
{::} 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.
(a) Advisers has voluntarily undertaken to limit annual expenses for Large
Cap Growth Series (exclusive of interest, taxes, brokerage commission
and non-recurring extraordinary charges and expenses) to 1.25% of the
average net assets. For the period presented, had the waiver and
reimbursement of expenses not been in effect, the ratios of expenses
and net investment income to average daily net assets would have been
1.43% and (.20%), respectively.
101
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
--------------------------------------------------------------------------
GROWTH STOCK SERIES 1998** 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 36.64 $ 32.59 $ 28.09 $ 22.11 $ 22.92 $ 21.15
--------- --------- --------- --------- --------- ---------
Operations:
Investment income - net............... .07 .12 .12 .13 .18 .09
Net realized and unrealized gains
(losses) on investments............. 5.73 3.93 4.50 5.98 (.81) 1.77
--------- --------- --------- --------- --------- ---------
Total from operations................... 5.80 4.05 4.62 6.11 (.63) 1.86
--------- --------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... -- -- (.12) (.13) (.18) (.09)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 42.44 $ 36.64 $ 32.59 $ 28.09 $ 22.11 $ 22.92
--------- --------- --------- --------- --------- ---------
Total return @.......................... 15.82% 12.42% 16.41% 27.66% (2.82%) 8.78%
Net assets end of period (000s
omitted).............................. $ 775,749 $ 707,155 $ 661,217 $ 530,945 $ 377,483 $ 304,293
Ratio of expenses to average daily net
assets................................ .66%* .66% .67% .67% .68% .69%
Ratio of net investment income to
average daily net assets.............. .31%* .33% .39% .51% .81% .46%
Portfolio turnover rate................. 45% 19% 30% 20% 19% 26%
Average commission rate paid{::}........ $ .0560 $ .0659 $ .0728 $ -- $ -- $ --
</TABLE>
* Annualized.
** For the six-month period ended June 30, 1998.
@ 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,
----------------------------------------------------------
AGGRESSIVE GROWTH SERIES 1998** 1997 1996 1995 1994+
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Net asset value, beginning of period.... $ 13.81 $ 13.62 $ 12.68 $ 9.80 $ 10.03
--------- --------- -------- -------- --------
Operations:
Investment income - net............... .00 .03 .03 .07 .08
Net realized and unrealized gains
(losses) on investments............. 1.89 .16 .94 2.88 (.23)
--------- --------- -------- -------- --------
Total from operations................... 1.89 .19 .97 2.95 (.15)
--------- --------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- -- (.03) (.07) (.08)
--------- --------- -------- -------- --------
Net asset value, end of period.......... $ 15.70 $ 13.81 $ 13.62 $ 12.68 $ 9.80
--------- --------- -------- -------- --------
Total Return @.......................... 13.67% 1.43% 7.64% 29.89% (1.89%)
Net assets end of period (000s
omitted).............................. $ 140,016 $ 122,455 $ 96,931 $ 46,943 $ 13,526
Ratio of expenses to average daily net
assets................................ .72%* .76% .78% .81% .88%*
Ratio of net investment income to
average daily net assets.............. .01%* .24% .22% .58% 1.24%*
Portfolio turnover rate................. 11% 25% 22% 21% 5%
Average commission rate paid{::}........ $ .0577 $ .0616 $ .0692 -- --
</TABLE>
* Annualized.
** Six-month period ended June 30, 1998.
+ 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.
{::} 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.
102
<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 PRESIDENT, CRANBROOK EDUCATION
COMMUNITY. 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
Peggy L. Ettestad
VICE PRESIDENT
Tamara L. Fagely
VICE PRESIDENT AND TREASURER
Howard G. Hudson
VICE PRESIDENT
Dickson W. Lewis
VICE PRESIDENT
Lucinda S. Mezey
VICE PRESIDENT
David A. Peterson
VICE PRESIDENT
Scott R. Plummer
VICE PRESIDENT
Rhonda J. Schwartz
VICE PRESIDENT
Melinda S. Urion
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 U.S. 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.
103
<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 NATIONAL
SECURITIES PORTFOLIO
TAX-FREE MINNESOTA
PORTFOLIO
STRATEGIC INCOME FUND
HIGH YIELD PORTFOLIO
Fortis Stock Funds ASSET ALLOCATION
PORTFOLIO
VALUE FUND
GROWTH & INCOME FUND
CAPITAL FUND
FIDUCIARY FUND
GLOBAL GROWTH PORTFOLIO
GROWTH FUND
INTERNATIONAL EQUITY
PORTFOLIO
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 Empower Variable SECURITIES SUBACCOUNT
Annuity DIVERSIFIED INCOME
SUBACCOUNT
GLOBAL BOND SUBACCOUNT
HIGH YIELD SUBACCOUNT
GLOBAL ASSET ALLOCATION
SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
LARGE CAP GROWTH
SUBACCOUNT
GROWTH 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
GLOBAL ASSET ALLOCATION
SUBACCOUNT
ASSET ALLOCATION
SUBACCOUNT
VALUE SUBACCOUNT
GROWTH & INCOME
SUBACCOUNT
S&P 500 INDEX SUBACCOUNT
BLUE CHIP STOCK
SUBACCOUNT
INTERNATIONAL STOCK
SUBACCOUNT
MID CAP STOCK SUBACCOUNT
SMALL CAP VALUE
SUBACCOUNT
GLOBAL GROWTH SUBACCOUNT
LARGE CAP GROWTH
SUBACCOUNT
GROWTH 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 FORTIS 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.
104
<PAGE>
[LOGO]
FORTIS
SOLID PARTNERS, FLEXIBLE SOLUTIONS-SM-
FORTIS MEANS STEADFAST
Fortis means "steadfast" in Latin. The worldwide Fortis family of companies
lives up to the name, and has each day since the 1800s, with flexible
solutions tailored to our customers' individual needs. We deliver the
stability you require today.. and tomorrow. You can count on it.
Fortis Financial Group offers mutual funds, annuities and life insurance
through its broker/dealer Fortis Investors, Inc.
We're part of Fortis, Inc., a financial services company that provides
specialty insurance and investment products to individuals, businesses,
associations and other financial services organizations throughout the United
States.
Fortis, Inc. is part of Fortis, a worldwide group of companies active in the
fields of insurance, banking and investments. Fortis is jointly owned by
Fortis AMEV of The Netherlands and Fortis AG of Belgium.
Fortis: steadfast for YOU!
FORTIS FINANCIAL GROUP
Fortis Advisers, Inc.
(fund management since 1949)
Fortis Investors, Inc.
(principal underwriter;
member NASD, SIPC)
Fortis Benefits Insurance Company
& Fortis Insurance Company
(issuers of FFG's insurance products)
P.O. Box 64284, St. Paul, MN 55164
Telephone (800) 800-2000
http://www.ffg.us.fortis.com
FORTIS FINANCIAL GROUP Bulk Rate
P.O. Box 64284 U.S. Postage
St. Paul, MN 55164 PAID
Permit No. 3794
Minneapolis, MN
Fortis Series Fund, Inc.
[LOGO] Printed on recycled paper with
40% preconsumer waste and 10%
post consumer waste. Please recycle.
The Fortis logo and Fortis-SM- are
servicemarks of Fortis AMEV and Fortis AG.
59475 -C-Fortis 7/98
