<PAGE>
[LOGO]
SOLID PARTNERS, FLEXIBLE SOLUTIONS-SM-
Bringing you a world of opportunity...
FORTIS SERIES FUND, INC.
ANNUAL REPORT
DECEMBER 31, 1998
FORTIS FINANCIAL GROUP
<PAGE>
FORTIS SERIES FUND, INC.
ANNUAL REPORT
- --------------------------------------------------------------------------------
HIGHLIGHTS
<TABLE>
<CAPTION>
U.S. GLOBAL
MONEY GOVERNMENT DIVERSIFIED GLOBAL HIGH ASSET ASSET
MARKET SECURITIES INCOME BOND YIELD ALLOCATION ALLOCATION
SERIES SERIES SERIES SERIES SERIES SERIES SERIES
-------- ---------- ----------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE YEAR ENDED
DECEMBER 31, 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........................... $11.06 $10.93 $11.91 $11.56 $9.91 $14.32 $21.09
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters
Variable Annuity.................... +3.90% +7.41% +4.88% +11.97% -0.73% +14.41% +18.36%
Harmony Investment Life............... +4.53% +8.06% +5.52% +12.65% -0.13% +15.10% +19.08%
Wall Street Series 220/500............ +4.09% +7.61% +5.07% +12.17% -0.55% +14.61% +18.58%
Wall Street Series Survivor........... +3.90% +7.41% +4.88% +11.97% -0.73% +14.41% +18.36%
Empower Variable Annuity*............. +2.65% +5.76% +3.14% +9.74% -2.93% +3.20% +9.15%
<CAPTION>
GROWTH &
VALUE INCOME
SERIES SERIES
------ --------
<S> <C> <C>
FOR THE YEAR ENDED
DECEMBER 31, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $13.42 $18.76
End of year........................... $14.38 $21.23
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/Masters
Variable Annuity.................... +8.18% +11.70%
Harmony Investment Life............... +8.83% +12.37%
Wall Street Series 220/500............ +8.37% +11.90%
Wall Street Series Survivor........... +8.17% +11.70%
Empower Variable Annuity*............. -3.02% +1.64%
</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 YEAR ENDED
DECEMBER 31, 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........................... $18.83 $18.58 $14.48 $9.64 $9.28 $22.57 $12.04
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/ Masters
Variable Annuity.................... +26.39% +26.39% +14.91% -3.75% -6.33% +9.87% +17.55%
Harmony Investment Life............... +27.16% +27.15% +15.60% -3.36% -5.95% +10.53% +18.02%
Wall Street Series 220/500............ +26.62% +26.62% +15.12% -3.63% -6.22% +10.06% +17.69%
Wall Street Series Survivor........... +26.39% +26.39% +14.91% -3.75% -6.33% +9.87% +17.55%
Empower Variable Annuity*............. +9.64% +9.98% -1.82% -3.68% -6.27% -4.81% +17.63%
<CAPTION>
GROWTH AGGRESSIVE
STOCK GROWTH
SERIES SERIES
--------- ----------
<S> <C> <C>
FOR THE YEAR ENDED
DECEMBER 31, 1998:
NET ASSET VALUE PER SHARE:
Beginning of year..................... $36.64 $13.81
End of year........................... $41.09 $16.70
ACCUMULATION UNIT PERFORMANCE:
Fortis Opportunity Annuity/ Masters
Variable Annuity.................... +17.42% +19.55%
Harmony Investment Life............... +18.13% +20.27%
Wall Street Series 220/500............ +17.63% +19.76%
Wall Street Series Survivor........... +17.42% +19.55%
Empower Variable Annuity*............. +3.74% +4.06%
</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 YEAR ENDED
DECEMBER 31, 1998:
Investment Advisory and
Management Fee....................... .30% .47% .47% .75% .50% .90% .47% .70%
Other Expenses.......................... .05% .04% .05% .13% .06% .11% .04% .06%
------ --- --- ------ ------ ----- --- ------
TOTAL FORTIS SERIES OPERATING EXPENSES.. .35% .51% .52% .88% .56% 1.01% .51% .76%
------ --- --- ------ ------ ----- --- ------
<CAPTION>
GROWTH &
INCOME
SERIES
--------
<S> <C>
FOR THE YEAR ENDED
DECEMBER 31, 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 YEAR ENDED
DECEMBER 31, 1998:
Investment Advisory and Management
Fee................................... .40% .89% .85% .90% .90% .70% .90% .61%
Other Expenses.......................... .06% .05% .09% .35% .34% .05% .35% .04%
--- --- --- ------- --------- ------ --------- ------
TOTAL FORTIS SERIES OPERATING
EXPENSES.............................. .46% .94% .94% 1.25% 1.24% .75% 1.25% .65%
--- --- --- ------- --------- ------ --------- ------
<CAPTION>
AGGRESSIVE
GROWTH
SERIES
----------
<S> <C>
FOR THE YEAR ENDED
DECEMBER 31, 1998:
Investment Advisory and Management
Fee................................... .68%
Other Expenses.......................... .04%
---
TOTAL FORTIS SERIES OPERATING
EXPENSES.............................. .72%
---
</TABLE>
* For the period May 1, 1998 to December 31, 1998.
** Represents the expenses of the series itself, without the expenses associated
with the variable annuities or variable universal life insurance policies,
(annualized).
<PAGE>
HOW TO USE THIS REPORT
For a quick overview of the
portfolio's performance during
the past year, refer to the
Highlights box. The letter from
the portfolio managers and
presidents provide a more
detailed analysis of the fund and
financial markets.
The charts alongside the letter
are useful because they provide
more information about your
investments. The top holdings
chart shows the types of
securities in which the
portfolios invest, and the pie
chart shows a breakdown of the
portfolios' assets by sector. The
portfolio changes show the
largest 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 portfolio 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 3
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 50
Growth & Income Series 53
S&P 500 Index Series 56
Blue Chip Stock Series 61
International Stock Series 64
Mid Cap Stock Series 67
Small Cap Value Series 69
Global Growth Series 71
Large Cap Growth Series 75
Growth Stock Series 77
Aggressive Growth Series 79
Statements of Assets and Liabilities 82
Statements of Operations 85
Statements of Changes in Net Assets 88
Notes to Financial Statements 91
Independent Auditor's Report 106
Directors and Officers 107
Products and Services 108
</TABLE>
2
<PAGE>
[PHOTO]
FORTIS SERIES FUND, INC. ANNUAL REPORT,
DECEMBER 31, 1998
DEAR SHAREHOLDER:
Another exciting year in the U.S. securities markets has come to a close. Adding
to the excitement was the dynamic international environment where political and
economic developments continued to significantly impact the global securities
markets, including our domestic markets.
On the pages that follow you have the opportunity to hear from the individuals
that manage the eighteen portfolios of Fortis Series Fund. We believe this
information will provide you with valuable insights into the performance of the
portfolios over the last year and their outlook for the future.
Thank you for your investment in Fortis. We appreciate your continued confidence
in our management of your investments.
Sincerely,
[SIGNATURE]
Dean C. Kopperud
President
Dated January 14, 1999
3
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Banks 16.8%
Diversified Finance 16.2%
Consumer Financing 15.3%
Captive Equipment Finance 12.5%
Utilities-Electric 12.2%
Captive Auto Finance 8.1%
Brokerage and Investment 8.1%
Oil-Refining 4.4%
Food 3.8%
Captive Oil Finance 2.6%
</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.
The U.S. economy enters 1999 in great shape despite the wide range of shocks it
endured in 1998. In the past year, the economy has survived a collapse in
exports, a 20% correction in the stock market and a two-month virtual shut down
in the fixed income market while GDP growth barely slowed and inflation remained
almost nonexistent. Within this environment, yields on money market instruments
were very stable during the first half of 1998 and then declined in the latter
half of the year. For example, the rates on 90-day commercial paper (a typical
fund investment) began the year at 5.55% moved to 5.49% by June 30, 1998 and
then dropped all the way to 4.80% by December 31, 1998. The drop in rates was
largely due to the actions of the Federal Reserve Bank (the "Fed") which lowered
the federal funds rate 0.75% in a series of 0.25% moves beginning September 29,
1998. The Fed cited numerous factors that influenced their decision to lower
rates including; the need to stabilize financial markets after the collapse of
the Long Term Capital hedge fund; and a desire to keep a slowing economy from
becoming a recession in 1999.
For the year, the fund returned 5.32% compared to 5.34% in 1997. The fund's
performance is generally linked to the federal funds rate (the interbank
borrowing rate set by the Fed and the primary determinant of short-term interest
rates) and therefore the fund's yield began to decline after the Fed began
lowering rates.
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. Through most
of 1998 we targeted the fund's average maturity at sixty days to take advantage
of modestly higher yields during a period in which we did not expect rates to
rise. As year end approached we shortened the average maturity of the fund
because we felt that the rates being paid on paper maturing in January
represented good value as borrowers were eager to pay for cash over year-end. We
will be moving the average maturity back out to sixty days during January when
these "year-end" effects dissipate.
OUTLOOK
Looking ahead to 1999, we anticipate that the U.S. economy will slow moderately
due to the continuing economic weakness of our trading partners, lower corporate
profits and excess capacity. Furthermore, we believe that inflation will remain
near its current low levels. Yields on money market instruments are likely to
move modestly lower in this forecast.
4
<PAGE>
PORTFOLIO ALLOCATION
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury Securities 32.2%
Other Direct Federal
Obligations 25.4%
FNMAs 26.8%
GNMAs 7.3%
Cash Equivalents/Receivables 2.5%
FHLMCs 3.3%
Other 2.5%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. TVA Global (6.375%) 2005 10.4%
2. U.S. Treasury Strip (5.10%) 2009 6.2%
3. Federal Home Loan Bank (7.31%) 2004 5.7%
4. U.S. Treasury Note (6.375%) 2000 5.4%
5. GNMA (7.50%) 2027 4.8%
6. U.S. Treasury Note (5.50%) 2003 4.4%
7. U.S. Treasury Note (6.125%) 2001 4.0%
8. U.S. Treasury Bond (8.125%) 2021 4.0%
9. U.S. Treasury Strip (5.83%) 2019 3.7%
10. Federal Farm Credit Bank (5.70%) 2001 3.3%
</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.
The first half of 1998 was a period of stability for the Fixed Income markets.
Despite strong U.S. economic growth (first half GDP was 3.7%), inflation
remained a low 1.7%. The Federal Reserve kept the Federal Funds rate at 5.25%,
although they shifted to a tightening bias. During this period spreads (the
yield difference between a security and its comparable Treasury) remained
stable, and mortgage backed securities and agency debentures outperformed
Treasuries.
In August, however, this period of relative tranquility came to a screeching
halt. Concerns over Asia resurfaced, Russia defaulted on its debt obligations,
and a number of hedge funds, including Long Term Capital Management, found
themselves either in, or on the brink of bankruptcy. This sequence of events all
culminated in a flight to quality to U.S. Treasuries during the second half of
1998. Treasury yields fell precipitously, while yield spreads widened
dramatically as investors demanded a greater premium to buy less liquid,
non-U.S. Treasury assets. It wasn't until the Federal Reserve lowered the
Federal Funds rate by 75 basis points (in three separate moves) that confidence
was restored to the marketplace.
The net result of these events was that interest rates were range-bound during
the first half of the year, fell dramatically in August and September, and
stabilized at lower levels in the fourth quarter. Specifically, the 30-year U.S.
Treasury traded in a yield range of 5.7% to 6.1% in the first half of the year,
fell to a low of 4.7% in early October, and traded in a 4.7%-5.3% range during
the remainder of the year. The Federal Reserve's interest rate cuts also enabled
short-term rates to decline more in yield than longer-term rates. Consequently,
despite a surprisingly strong U.S. economy (1998 GDP should be nearly 4%), 30 Yr
yields ended the year at 5.1%, a 12 month decline of 85 basis points.
Our positive interest rate outlook added to performance this year, as the
portfolio's duration was equal to or greater than its 4.75 year target all of
1998. We also benefitted by our mortgage backed securities underweighting
earlier in the year. These strategies enabled the portfolio to earn 8.87% for
1998, compared to the 8.47% return earned by the Lehman Brothers Intermediate
Government Index.
Looking forward, we believe that economic growth will be sustained through 1999
at a pace which, although somewhat below that of last year, will be healthy by
historic standards. Nonetheless, it is inevitable that the deflationary forces
at work in Asia and Latin America will have some moderating impact on domestic
production. Any related reduction of exports will likely result in further
suppression of prices and, therefore, a continuation of the low inflation
experience of the recent past. This environment is favorable for the bond market
as it supports low interest rates and good performance from MBS and Agency
Debentures which currently offer historically high levels of yield in relation
to comparable Treasury obligations.
VALUE OF $10,000 INVESTED JANUARY 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
Lehman Brothers
Intermediate Gov't Bond Index** U.S. Government Securities Series
<S> <C> <C> <C> <C>
01/01/89 $10,000 $10,000
89 $11,268 $11,314
90 $12,345 $12,211
91 $14,087 $13,965
92 $15,063 $14,822
93 $16,293 $16,223
94 $16,029 $15,179
95 $18,354 $18,030
96 $18,956 $18,428
97 $20,421 $20,102
98 $22,150 $21,885
U.S. Government Securities Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+8.87% +6.17% +8.15%
<CAPTION>
<S> <C>
01/01/89
89
90
91
92
93
94
95
96
97
98
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** An unmanaged index of government bonds with an average maturity of three to
four years.
5
<PAGE>
PORTFOLIO ALLOCATION AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Corporate Bonds - Investment Grade 45.7%
Asset Backed Securities 18.2%
Corporate Bonds - Non-Investment Grade 12.1%
U.S. Treasury Securities 11.9%
U.S. Government Agencies 10.5%
Cash Equivalent / Receivables 1.5%
Equity Securities 0.1%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Bond (8.125%) 2021 3.6%
2. FNMA (6.00%) 2013 3.2%
3. U.S. Treasury Note (6.125%) 2007 2.9%
4. FNMA (7.00%) 2028 2.4%
5. GTE Corp. (7.51%) 2009 2.0%
6. DLJ Mortgage Acceptance Corp. (8.50%) 2001 1.9%
7. Nationslink Funding Corp. (7.52%) 2005 1.9%
8. U.S. Treasury Strip (5.53%) 2022 1.8%
9. General Motors Acceptance Corp. (5.875%) 2003 1.7%
10. GNMA (9.00%) 2020 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.
The economic expansion that marked 1997 continued throughout 1998, surviving
land mines of Asian economies continued weakness, Russian defaults and the
collapse of leveraged hedge funds. During the first half of the year, Asia's
economic problems seemed somehow contained, and the U.S. economy grew at a
faster pace. The corporate bond market started to recover from the "Asian
contagion" effect and the "flight to quality" trade started to unwind. But that
rosy environment was quickly darkened by Russia defaulting on its debt, and Asia
and Latin America exhibiting more weakness in their economies. This picture
shocked the financial markets and drained liquidity from the financial system
prompting the Federal Reserve to reverse its tightening bias and to lower the
Federal Funds rate by a series of three .25% decreases. This rate action by the
Federal Reserve, along with a strong demand on treasuries, as the "flight to
quality" trade resumed, drove the yield on the 30-year treasury from a high of
6.08% during the first quarter to a low of 4.72% on October 5, ending the year
at 5.10%.
For the year ending December 31, 1998, the Diversified Income portfolio earned a
6.31% total rate of return. The return for the Lehman Brothers Aggregate Index
over the same time period was 8.67%. The portfolio benefited slightly from a
longer duration of 6.5 years as rates were declining towards the end of the
year. But the lack of liquidity in corporates and asset-backed securities,
caused these sectors to severely depreciate, thus limiting the performance of
the portfolio.
Looking ahead to 1999, we anticipate that the US economy will continue to grow
at a slower pace as production is impacted by ailing economies in Asia and Latin
America. Reduction in exports will be associated with further reduction in
prices, leading to a moderate inflation level. This environment is favorable for
the bond market as it supports low interest rates, and through a continuation of
healthy corporate profits, good performance from corporate bonds which currently
offer historically wide spread to yields of comparable government obligations.
VALUE OF $10,000 INVESTED JANUARY 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
DIVERSIFIED INCOME
AGGREGATE BOND INDEX** SERIES
<S> <C> <C>
01/01/89 $10,000 $10,000
89 $11,453 $11,230
90 $12,479 $12,227
91 $14,476 $14,020
92 $15,548 $15,012
93 $17,063 $16,927
94 $16,580 $16,044
95 $19,643 $18,814
96 $20,233 $19,594
97 $22,193 $21,640
98 $24,117 $23,005
Diversified Income Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+6.31% +6.33% +8.69%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** An unmanaged index of government, corporate and mortgage-backed securities
with an average maturity of approximately nine years.
6
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
United States 42.2%
Germany 15.8%
France 13.1%
Cash Equivalents/Receivables 12.6%
Canada 5.0%
Denmark 3.8%
Austria 3.0%
Spain 2.7%
Netherlands 1.8%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Government of France (ECU) (4.50%) 2002 6.8%
2. Government of France (ECU) (5.25%) 2008 6.3%
3. U.S. Treasury Bond (12.50%) 2014 5.4%
4. U.S. Treasury Note (6.50%) 2001 5.1%
5. U.S. Treasury Note (7.25%) 2004 4.5%
6. General Electric Capital Corp (8.125%) 2007 4.0%
7. U.S. Treasury Note (10.75%) 2005 3.8%
8. Canadian Government (4.875%) 2008 3.7%
9. U.S. Treasury Note (6.125%) 2007 3.6%
10. Republic of Austria (7.875%) 2002 3.1%
</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.
The global bond markets fared well in 1998 and as a result, the fund returned
13.49%. The Salomon Brothers World Bond Index returned 15.31% during 1998. Most
individual markets logged double digit returns with Europe as a region leading
the pack. The Japanese market followed with the dollar bloc markets of the U.S.,
Canada and Australia bringing up the rear.
On the currency front, the U.S. dollar was generally weaker, boosting the
returns of assets held in the non-U.S. currencies. The collapse of the Russian
banking system, hot on the heels of a severe financial crisis in south east
Asia, triggered a "flight to safety" which especially benefited bonds. As a
global economic slowdown followed, governments and central banks world-wide cut
interest rates again moving bond prices upward.
Confirmation that the U.S. economy is slowing is beginning to emerge. A slowdown
in continental European economies now seems inevitable. Against the backdrop of
a deteriorating international environment, exports are expected to slow further,
impacting adversely on domestic investment spending. The deflationary spiral in
Japan will continue, with the Japanese financial system remaining chronically
vulnerable. All-in-all, not a bad environment for bond investors. On the
currency side, the advent of the Euro and a perceived shift in Japanese policy
regarding the financing of its growing budget deficit may prove a challenge to
the U.S. dollar's current "monopoly" role. This could lead to a weakening of the
greenback, especially vis-a-vis the Euro.
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>
01/03/95 $10,000 $10,000
95 $11,904 $11,914
96 $12,335 $12,310
97 $12,364 $12,327
98 $14,256 $13,990
Global Bond Series
Average Annual Total Return*
Since
1 Year January 3, 1995**
+13.49% +8.77%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of world government bonds with maturities of at least
one year.
7
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 31.4%
Telecommunications 23.1%
Cable Television 9.4%
Broadcasting 8.2%
Cash Equivalents/Receivables 5.0%
Textile Manufacturing 4.8%
Leisure Time - Amusement 3.6%
Consumer Goods 3.3%
Printing 3.2%
Consumer Finance 2.9%
Energy 2.6%
Automobile & Motor Vehicle Parts 2.5%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Chancellor Media Corp (8.00%) 2008 3.6%
2. Iridium LLC\Capital Corp. (14.00%) 2005 3.0%
3. Renters Chioce, Inc. (11.00%) 2008 2.9%
4. Level 3 Communications, Inc. (10.50%) 2008 1.6%
5. Unisys Corp. (11.75%) 2004 1.6%
6. Greyhound Lines, Inc. (11.50%) 2007 1.6%
7. Simonds Industries, Inc. (10.25%) 2008 1.6%
8. Century Communications Corp. (8.875%) 2007 1.6%
9. NTL, Inc. (12.38%) 2008 1.5%
10. Grand Casinos, Inc. (10.125%) 2003 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.
Calendar year 1998 can be characterized as a year that several global financial
markets almost collapsed. The speed and convergence of the Asian contagion,
Russia's default, hedge fund failures and illiquidity in the capital markets
were unprecedented. The subsequent quick recovery was primarily attributable to
the Federal Reserve intervention through the use of three successive rate
reductions.
The High Yield portfolio recorded a .62% total return for the year. The return
of the DLJ High Yield Index over the same time period was .55%. The return of
the Lehman Brothers High Yield Index was 1.87% over the same time period.
Performance since mid-year was enhanced by a restructuring of the portfolio to
upgrade the quality of the bonds. Nonetheless, the 1998 performance continued to
be adversely affected by certain bond holdings. One, Australis Media, an
Australian pay-television operator, had its bonds drop substantially in price
after a failed merger. Another holding, the bonds of Wireless One, a U.S.
wireless cable television company, declined throughout the year and is in
restructuring as a result of insufficient cash to continue the build-out of its
cable systems. In the illiquid market which developed following the Russian
default, bonds such as these became unsaleable at any price. Our overweighting
of higher quality credits (BB's) prior to the market correction enhanced the
portfolio's performance. In addition, underweighting in industries such as
energy, forest products, chemicals and steel was helpful.
OUTLOOK
We believe that economic growth will be sustained through 1999 at a pace which,
although somewhat below that of last year, will be healthy by historic
standards. The deflationary forces at work in Asia and Latin America will have
some moderating impact on domestic production. A continuation of low inflation
and interest rates should provide a favorable environment for the bond market.
Our current strategy is to continue to improve the overall credit quality of the
portfolio. Our efforts will concentrate on improving the total return of the
portfolio.
VALUE OF $10,000 INVESTED MAY 2, 1994
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
HIGH YIELD INDEX*** HIGH YIELD SERIES
<S> <C> <C>
05/02/94 $10,000 $10,000
94 $10,165 $9,925
95 $12,150 $11,189
96 $13,417 $12,366
97 $15,031 $13,572
98 $15,312 $13,657
High Yield Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+0.62% +6.90%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of lower quality, high yield corporate debt securities.
8
<PAGE>
PORTFOLIO ALLOCATION AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Equity Securities 57.5%
Foreign - Government Bonds - Investment Grade 19.3%
U.S. Government Securities 11.0%
Cash Equivalents/Receivables 7.0%
Corporate Bonds - Investment Grade 5.2%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Bonds Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. United Kingdom Treasury (8.50%) 2007 2.6%
2. U.S. Treasury Note (7.875%) 2004 2.5%
3. U.S. Treasury Bond (6.25%) 2023 2.4%
4. Bundesrepublik Deutschland (8.375%) 2001 2.0%
5. Bundesrepublik Deutschland (6.50%) 2005 2.0%
6. Bundesrepublik Deutschland (6.25%) 2024 1.9%
7. German Government (6.50%) 2003 1.8%
8. Italian Government (9.50%) 2006 1.7%
<CAPTION>
Stocks
- -------------------------------------------------------------------
<C> <S> <C>
1. Philip Morris Co., Inc. 2.0%
2. Nestle S.A. 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
American Stores Co. AT&T Corp.
Boise Cascade Corp. Danka Business Systems plc ADR
Chase Manhattan Corp. Irish Life plc
Compagnie Financiere Richemont NCR Corp.
AG Peninsular & Orient Steam
Groupe Danone Navigation
G.I.B. Group S.A. Sony Corp.
Pohjola Group Insurance Corp. Svenska Cellulosa B Free
'B' Tate & Lyle plc
Swisscom AG Toys 'R' Us, Inc.
Unicom Corp. Unilever plc
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.
Value investors in 1998 faced a difficult environment as valuations in the U.S.
and Europe reached historic highs. The portfolio return of 17.27% lagged the
MSCI World Index benchmark of 24.34% primarily as a result of underperformance
in U.S. equities. The U.S. indexes were led by a small number of mega-cap
technology stocks, which were, by our measures, overvalued, while the majority
of stocks languished. This underperformance was somewhat mitigated by strength
from our European and Japanese holdings. The fixed income results were positive
as well in the wake of global interest rate easing.
Overall the portfolio is defensively positioned which gives us comfort in what
may be a volatile financial market environment in the first six months of 1999.
Trading has largely been absent in Europe in the lead-up to Euro conversion
weekend and therefore pent-up demand to deal could cause some liquidity-driven
volatility. All of this amidst a general slowdown in the global economy, in
particular in Japan and now in Europe, suggests some caution is warranted.
However, the aggressive global easing in monetary policy we have seen, led by
the Federal Reserve may sow the seeds for a further extension to this already
near record-breaking business cycle next year.
Taking a longer term perspective, Europe looks set to benefit from structural
change as a result of Economic and Monetary Union. We believe EMU could add
about 1/2% to long run potential GDP in the Euro-11 region because of
deregulation, privatization, corporate restructuring, consolidation and pricing
(goods and services) convergence across the Union. The structural shift from
bonds to equities is set to pick up pace as awareness builds of Europe's
unfunded pension liabilities. Cash and bonds will not generate the types of
returns required to satisfy mounting liabilities. Increased equity ownership in
Europe will also put more pressure on managements to perform and create value
for shareholders.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
SALOMON BROS WORLD GLOBAL ASSET
GOV'T BOND INDEX + MSCI WORLD INDEX ++ ALLOCATION SERIES
<S> <C> <C> <C>
01/03/95 $10,000 $10,000 $10,000
95 $11,904 $12,132 $11,747
96 $12,335 $13,830 $13,242
97 $12,364 $16,048 $15,031
98 $14,256 $20,027 $17,626
Global Asset Allocation
Series
Average Annual Total Return*
Since
1 Year January 3,1995**
+17.27% +15.25%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return
and principal value will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost. This represents the performance
of the Series itself, without the expenses associated with the variable
annuities or variable universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
+ An unmanaged index of world government bonds with maturities of at
least one year.
++ An unmanaged index of the world's major equity markets in U.S. dollars,
weighted by stock market value.
9
<PAGE>
PORTFOLIO ALLOCATION AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C>
Equity Securities 65.0%
Corporate Bonds - Investment Grade 10.9%
Asset Backed Securities 6.9%
Cash Equivalents/Receivables 5.9%
U.S. Treasury Securities 5.5%
Corporate Bonds - Non-Investment Grade 3.5%
U.S. Government Agencies 2.3%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Time Warner, Inc. 1.8%
2. Microsoft Corp. 1.8%
3. American International Group, Inc. 1.7%
4. Philip Morris Companies, Inc. 1.4%
5. American Online, Inc. 1.4%
6. MCI WorldCom, Inc. 1.4%
7. Interpublic Group of Companies, Inc. 1.4%
8. General Electric Co. 1.4%
<CAPTION>
Bonds
- -------------------------------------------------------------------
<C> <S> <C>
1. U.S. Treasury Strip (5.65%) 2019 2.0%
2. U.S. Treasury Note (6.625%) 2007 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES
FOR THE YEAR ENDED 12/31/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
America Online, Inc. Archer-Daniels-Midland Co.
AT & T Corp. Cendant Corp.
Endesa S.A. ADR Mattel, Inc.
Masco Corp. MNBA Corp.
Pharmacia and Upjohn, Inc. Motorola, Inc.
Sun Microsystems, Inc. Nabisco Holdings Corp. Class A
Tele-Communications, Inc. Nuevo Energy Co.
Texas Instruments, Inc. Schlumberger Ltd.
Unisys Corp. Sterling Commerce, Inc.
Wal-Mart Stores, Inc. U.S. Filter 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.
During the twelve-month period under review, the Asset Allocation portfolio
produced a total return of 19.97%. The S&P 500 returned 28.58% during the same
period; the Lehman Brothers Aggregate Bond Index advanced 8.67%. This portfolio
is currently 65% in equities with the remainder in fixed income. The stock/bond
ratio is altered by the Fortis portfolio managers as the investment environment
changes.
Presently, the equity portion of the portfolio is most heavily weighted in
health care, services and technology. All three of these sectors contributed to
the overall performance of the portfolio, while positions in energy detracted
from performance. Some well-known names added to the portfolio over the past six
months include: Clorox, Chevron, Pfizer, IBM and AT&T.
The fixed income portion of the portfolio benefited slightly from a longer
duration of 6.5 years as interest rates were declining towards the end of the
year. The 30-year treasury yield dropped to 5.10% at year end, down from a high
of 6.08% during the first half of the year. Unfortunately, this rate decline was
a response to a "flight to quality" after Russia defaulted on its debt, and the
Asian and Latin American economies continued to weaken. The resulting liquidity
crisis in the fixed income markets caused corporate and asset-backed securities
to limit the performance of the bond portion of the portfolio.
The outlook for economic growth and inflation remain moderate. This should
provide a benign environment for the fixed income markets in the months ahead.
Higher inflation or lower than expected economic growth could alter this
environment so we will carefully monitor these factors so the fixed income
portion of the portfolio can be adjusted accordingly. We continue to hold a
diversified portfolio which we feel should perform well in the months ahead.
VALUE OF $10,000 INVESTED JANUARY 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
LEHMAN BROTHERS
ASSET ALLOCATION
AGGREGATE BOND INDEX + S&P 500 ++ SERIES
01/01/89 $10,000 $10,000 $10,000
<S> <C> <C> <C>
89 $11,453 $13,149 $12,375
90 $12,479 $12,732 $12,624
91 $14,476 $16,621 $16,113
92 $15,548 $17,896 $17,233
93 $17,063 $19,684 $18,921
94 $16,580 $19,941 $18,862
95 $19,643 $27,420 $23,006
96 $20,233 $33,610 $25,882
97 $22,193 $44,789 $31,120
98 $24,117 $58,146 $37,335
Asset Allocation Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+19.97% +14.56% +14.08%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
+ 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 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 32.1%
Banks 13.4%
Oil-Crude Petroleum and Gas 11.6%
Financial Services 10.3%
Telephone Services 8.6%
Utilities-Electric 6.6%
Insurance 5.2%
Health Care Services 3.2%
Automoblie Manufacturers 3.0%
Aerospace and Equipment 2.7%
Chemicals 2.4%
Cash Equivalents/Receivables 0.9%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Exxon Corp. 4.2%
2. AT & T Corp. 3.3%
3. Citigroup, Inc. 2.7%
4. BankAmerica Corp. 2.7%
5. BellSouth Corp. 2.4%
6. Royal Dutch Petroleum Co. NY Shares 2.4%
7. American International Group, Inc. 2.2%
8. Fannie Mae 1.9%
9. Ford Motor Co. 1.8%
10. Mobil Corp. 1.7%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
Ameritech Corp. Bell Atlantic Corp.
AT & T Corp. Cincinnati Bell, Inc.
Bank One Corp. Crown Cork & Seal Co., Inc.
BankAmerica Corp. Fort James Corp.
BellSouth Corp. General Electric Co.
Exxon Corp. International Business
First Union Corp. Machines, Inc.
Ford Motor Co. Pitney Bowes, Inc.
Hewlett-Packard Co. Raytheon Co. Class B
Morgan Stanley Dean Witter & SBC Communications, Inc.
Co. Service Corp. International
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 year ending December 31, 1998, the S&P 500 Index advanced 28.58% percent
while the Fortis Value Series portfolio returned 9.64% percent. While we were
disappointed in this performance, value stocks, in general, performed poorly in
1998.
The fund's primary strategy is to invest in companies with accelerating growth,
where we anticipate a company's growth rate to rise over time. To the extent
that we cannot find accelerating earnings, we focus on our secondary criteria,
inexpensively valued growth. We continue to maintain adequate diversification
across market sectors and remain focused on stock selection.
Looking ahead, we see the economy in the late stages of the current expansion
and we expect to see 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 or slowing global growth could negatively affect the
fund's performance. We continue to monitor the effects of interest rates and the
economy on the portfolio's holdings.
We remain focused on investing in accelerating 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>
05/01/96 $10,000 $10,000
96 $11,499 $11,149
97 $15,334 $13,962
98 $19,716 $15,309
Value Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+9.64% +17.30%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
11
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 31.4%
Telephone Services 11.3%
Drugs 8.6%
Oil-Crude Petroleum and Gas 7.9%
Cash Equivalents/Receivables 6.6%
Financial Services 6.3%
Natural Gas Transmissions 5.8%
Real Estate Investment Trust 4.7%
Utilities-Electric 4.5%
Food 4.5%
Banks 4.3%
Publishing 4.1%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. McGraw Hill Companies, Inc. 3.3%
2. SBC Communications, Inc. 2.6%
3. Enron Corp. 2.5%
4. Pharmacia and UpJohn, Inc. 2.2%
5. SunAmerica, Inc. 2.2%
6. Philip Morris Companies, Inc. 2.1%
7. Ameritech Corp. 2.0%
8. France Telecom S.A. ADR 2.0%
9. Glaxo Wellcome plc ADR 2.0%
10. AT & T Corp. 2.0%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
STOCK ADDITIONS: STOCK ELIMINATIONS:
ALLTEL Corp. American Express Co.
Chevron Corp. American Home Products Corp.
Columbia Energy Group Fortune Brands, Inc.
Du Pont de Nemours & Co. Halliburton Co.
Eastman Kodak Co. Lilly (Eli) & Co., Inc.
Fleet Financial Group, Inc. Limited, Inc.
France Telecom S.A. ADR Sonat, Inc.
Frontier Corp. Sprint Corp.
Qwest Trends Trust Conv. 5.7% St. Paul Companies, Inc.
pfd Union Planters Corp.
Readers Digest Association,
Inc.
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 the twelve-month period ending December 31, 1998, the stock market
experienced considerable volatility. Concern over slowing international markets
influencing the U.S. economy and liquidity concerns in the fixed income markets
caused by overextended hedge funds contributed to a substantial down draft in
equity prices. Just as quickly, however, the markets recovered as the Federal
Reserve eased monetary policy three times during the fall. By year-end, the
stock market had recovered to near record highs.
For 1998 as a whole, the Growth and Income Portfolio increased 13.21% compared
to 28.58% for the S&P 500. The Growth and Income portfolio has been considerably
less volatile than the market due in large part to its emphasis on higher
dividend yields. Accordingly, during strong market periods it is likely that
this portfolio will lag the market.
We continue to emphasize those companies that we feel give us a good balance
between growth of earnings and regular dividend increases with some emphasis on
current yield at time of purchase. This combination of growth and rising
dividends should prove to be rewarding over time with less volatility than the
overall market.
We continue to emphasize telecommunications as the utility sector is our largest
industry weighting, which has helped overall performance. The energy sector has
also been overweighted which detracted from performance because of pressure on
oil prices. We've recently added several prominent names to the portfolio,
including Anheuser-Busch, Schering-Plough and AT&T.
Looking ahead, the economic growth and inflation outlook remain moderate. While
valuation levels in the equity markets have expanded over the past year, high
quality companies with more modest valuations should represent good investment
potential 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>
05/02/94 $10,000 $10,000
94 $10,397 $10,174
95 $14,299 $13,196
96 $17,580 $16,035
97 $23,444 $20,475
98 $30,144 $23,181
Growth & Income Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+13.21% +19.73%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
12
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Capital Spending 25.7%
Finance 15.4%
Consumer Discretionary 13.4%
Health Care 10.7%
Consumer Staples 10.6%
Utilities 10.5%
Energy & Related 6.2%
Basic Industry 4.2%
Cash
Equivalents/Receivables 1.9%
Other 1.4%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Microsoft Corp. 3.4%
2. General Electric Co. 3.3%
3. Intel Corp. 1.9%
4. Wal-Mart Stores, Inc. 1.8%
5. Exxon Corp. 1.7%
6. Merck & Co., Inc. 1.7%
7. International Business Machines Corp. 1.7%
8. Coca-Cola Co. 1.6%
9. Pfizer, Inc. 1.6%
10. Cisco Systems, Inc. 1.4%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
America Online, Inc. ASARCO, Inc.
Ascend Communications, Inc. Chrysler Corp.
Carnival Corp. DSC Communications Corp.
Coca-Cola Enterprises, Inc. General Re Corp.
Compuware Corp. Giant Food, Inc. Class A
Electronic Data Systems Corp. Inland Steel Industries, Inc.
Firstar Corp. Pennzoil Co.
Providian Financial Corp. Raytheon Corp. Class A
Safeway, Inc. Venator Group, Inc.
Staples, Inc. Whitman Corp.
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 twelve-month period ending December 31 1998, the portfolio realized a
total return of 28.11% while the S&P 500 realized a total return of 28.58%.
The Fortis Series S&P 500 Index is designed to passively replicate the large
capitalization U.S. equity market as represented by the S&P 500 Index. For the
twelve months ending December 31 1998, large capitalization stocks had positive
performance, outperforming small capitalization issues.
Among the best performing groups in the S&P 500 Index for the 12 months were
stocks of communications companies, retail stores (apparel) and retail stores
(general). The Fortis Series S&P 500 Index holds all stocks in direct proportion
to their weight in the 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>
05/01/96 $10,000 $10,000
96 $11,499 $11,429
97 $15,334 $15,123
98 $19,716 $19,374
S&P 500 Index Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+28.11% +28.12%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
13
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 40.1%
Drugs 9.1%
Financial Services 8.7%
Computer-Software 8.5%
Banks 7.1%
Telephone Services 6.1%
Business Services 5.0%
Food 3.6%
Insurance 3.5%
Cash
Equivalent/Receivables 3.0%
Health Care Services 2.7%
Electronic - Semiconductor 2.6%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Tyco International Ltd. 2.4%
2. MCI WorldCom, Inc. 2.4%
3. Freddie Mac 2.2%
4. Citigroup, Inc. 2.1%
5. Microsoft Corp. 2.0%
6. Wells Fargo Co. 1.8%
7. Bristol - Myers Squibb Co. 1.7%
8. Danaher Corp. 1.5%
9. Safeway, Inc. 1.5%
10. Fannie Mae 1.4%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
AirTouch Communications, Inc. BankBoston Corp.
America Online, Inc. Federated Department Stores,
Bank of New York Company, Inc. Inc.
Capital One Financial Corp. Honeywell, Inc.
CBS Corp. Lockheed Martin Corp.
Guidant Corp. Mattel, Inc.
Hasbro, Inc. Nabisco Holdings Corp. Class A
HBO & Co. SLM Holding Corp.
Infinity Broadcasting Corp. SmithKline Beecham plc ADR
Rite Aid Corp. St. Paul Companies, Inc.
Tenet Healthcare Corp.
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.
The past 12 months were dramatic for equities, with a harsh third quarter
correction sandwiched between a solid first half expansion and a strong rally at
the end of the year. Although the U.S. economic picture was respectable, severe
economic problems overseas -- continued problems in Asia, Russia's default of
its sovereign debt, and the collapse of a prominent global hedge fund --
captured headlines and heightened volatility.
Fortunately, the Federal Reserve (and other world monetary authorities) stepped
in by lowering interest rates three times in autumn. Their efforts promoted
stability and refocused investor attention on the economy's positive attributes:
low unemployment, steady consumer spending and strong earnings at many
companies. These trends helped restore blue chip stock performance at the end of
the year. Companies with stable growth characteristics, such as consumer stocks
and pharmaceuticals, logged the best results. The technology sector also
outperformed on the strength of a remarkable rally in Internet stocks.
Although share prices were volatile during the year, the portfolio benefited
from holdings in many sectors. The key was our stock picking approach, which
emphasized stable earnings, growth characteristics and strong management. These
efforts fit well with the market's recent preference for relatively reliable,
high-quality investments. Overall the portfolio produced a return of 28.07%
versus the S&P 500 return of 28.58%.
Our investment strategy continued to focus on maintaining positions in core
holdings as long as the fundamentals remain strong and the valuations are
reasonable. Consequently, much of the substantial cash flow the fund received
was invested opportunistically in existing holdings.
OUTLOOK
The market faces several challenges, including the persistent risk of a global
economic slowdown. Nonetheless, the overall environment for U.S. equities,
including inflation, interest rates, mutual fund inflows, and corporate
earnings, continues to be positive. On balance, the primary challenge for stock
performance may be the fact that stocks have already performed so well and
appear expensive by all conventional measures. We believe we can enhance returns
and lower risk over time by buying, at reasonable valuations, shares of
companies with leading market positions, seasoned management, strong financial
fundamentals, and the ability to generate earnings growth regardless of the
environment.
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>
05/01/96 $10,000 $10,000
96 $11,499 $11,624
97 $15,334 $14,763
98 $19,716 $18,906
Blue Chip Series Series
Average Annual Total Return*
Since
1 Year May 1, 1996**
+28.07% +26.96%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
14
<PAGE>
PORTFOLIO DIVERSIFICATION BY COUNTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
United Kingdom 21.6%
France 15.3%
Japan 14.9%
Germany 9.8%
Sweden 7.0%
Switzerland 6.2%
Italy 6.1%
Spain 5.9%
Other 4.2%
Netherlands 3.5%
Cash
Equivalents/Receivables 3.2%
Australia 2.3%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Vivendi (France) 2.8%
2. Zurich Allied AG (Switzerland) 2.7%
3. British Aerospace plc (United Kingdom) 2.5%
4. Telefonica S.A. (Spain) 2.5%
5. Telecom Italia S. p. A. (Italy) 2.3%
6. San Paolo IMI S. p. A. (Italy) 2.2%
7. Metro AG (Germany) 2.1%
8. Rhone - Poulenc S.A. (France) 2.1%
9. Argentaria S. A. (Spain) 2.0%
10. Banque Nationale de Paris (France) 2.0%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
Allianz Ag Credit Suisse Group - Reg
Asahi Breweries Ltd. Deutsche Bank AG
Broken Hill Proprietary Co. Dresdner Bank AG
Ltd. Honda Motor Co. Ltd.
Endesa S.A. Ito-Yokado Co. Ltd.
NTT Mobile Communications LucasVarity plc
Network, Inc. Mitsubishi Heavy Industries
Roche Holding AG Ltd.
Royal & Sun Alliance Insurance Novartis AG
Group plc Rank Group plc
Siebe plc Royal Dutch Petroleum Co. NY
Siemens AG Shares
Suez Lyonnaise des Eaux
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.
Financial markets in 1998 were highlighted by record high stock markets as well
as financial crises, unprecedented corporate consolidation, the possible
impeachment of the American President, and the dawn of the European Monetary
Union (EMU). Mergers, acquisitions, and restructuring drove equity markets to
all time highs in July before a sense of deja vu struck as an emerging market
financial crisis sent markets tumbling with indiscriminate selling. In July
1997, the devaluation of the Thai Baht set off the collapse of Southeast Asian
currencies and sent a tremor through equity markets globally. 1998's tempest was
sparked by the Russian government's default on its Treasury bills (GKOs) coupled
with the devaluation of the ruble that triggered margin calls on leveraged
investors worldwide. This sharp sell-off caused a ripple effect of further
margin calls and forced sales of liquid assets that destabilized both emerging
and developed markets. Investors' faith was nearly dashed with the financial
near-collapse of the Long-Term Capital Management hedge fund and a rash of
corporate profit warnings before three successive U.S. interest rate cuts and a
coordinated Europe-wide rate cut restored stability. Corporate activity resumed
and investors returned, sending international equity markets up 20.7% during the
fourth quarter to end the year ahead 20.0%. Europe rebounded 18.7% in the
quarter to post an impressive 28.5% advance for the year, while the Pacific
region's 26.1% quarterly jump recouped the losses of the first nine months of
the year to ink a 2.4% gain in 1998. The Fortis International Stock Series
participated in the fourth quarter rally with a rise to end the year up 16.5% as
compared to 20.33% for the MSCI EAFE Index.
Global competition continues forcing companies to alter radically the way they
do business. Stock prices and valuations are being driven higher as companies
embrace change to improve their return on capital by shedding non-core
activities and bolstering main business operations through mergers and
acquisitions. The total value of worldwide M&A in 1998 surpassed $2.4 trillion,
more than 50% above 1997's record. The January 1, 1999 introduction of EMU
provided added impetus for European companies to look past their traditional
country borders. In the pharmaceutical industry, Hoechst (Germany) announced
plans to split off the remainder of its industrial chemicals businesses, which
cleared the way to combine its life sciences operations with Rhone-Poulenc
(France). Astra (Sweden) linked with Zeneca (UK) in the largest ever
intra-Europe merger. But the biggest actions taken by European companies bridged
the Atlantic as well as country borders. Daimler-Benz (Germany) surprised the
world with its acquisition of Chrysler (U.S.) to create a global automotive
powerhouse. Before investors or even competitors could fully digest the
ramifications of the merger, DaimlerChrysler, was already in talks to extend its
reach with a stake in Nissan Diesel (Japan's 4th largest truck maker). In the
oil industry, historically low commodity prices intensified competition and
fuelled consolidation. British Petroleum (UK) made the first major move by
purchasing Amoco (U.S.) to join Royal Dutch (Netherlands) and Exxon (U.S.) in
the oil industry super league. Exxon upped the ante by announcing the world's
largest ever acquisition of Mobil (U.S.), while Royal Dutch responded with
massive restructuring plans.
While many have looked outside their own companies for opportunities to
strengthen core businesses, others have taken a surgical knife to themselves to
unlock value and cut costs. In a stark departure from Siemens' (Germany) past
strategy that deemed in-house computer chip production was necessary for a
global electronic equipment leader, Siemens announced plans to spin off its
semiconductor business. Even the traditionally regional retailing sector is
facing global competition. Metro (Germany), the world's second largest retailer
behind Wal-Mart, announced the spin off of one-sixth of its diversified
retailing operations to refocus on its supermarkets and hypermarkets as European
retailers cross national borders.
While the bulk of corporate activity has occurred in Europe and the U.S., Asia
seems ripe for change as its economies and companies are struggling to keep pace
with their global industry peers. The year began with hopes of Japan finally
shaking itself free from recession, but prospects dwindled as proposed
government fiscal spending packages appeared insufficient, the rest of Asia
continued to falter, and companies reported weak earnings. While further
government initiatives are not imminent and the current environment is dreary,
some signs of change appear. Companies are finally talking about restructuring,
and while most still lack a sense of urgency, some are taking action. Asahi
Breweries sold its stake in Torii Pharmaceutical to Japan Tobacco. Promise was
actually able to improve underlying operating earnings and created a tie-up with
JCB, Japan's largest credit card company, to take advantage of Japanese
financial deregulation. In the auto industry, Nissan showed its commitment to
restructure by selling its headquarter office buildings and leasing operations,
while it prepared to spin-off or sell its automatic transmission business. While
it is impossible to forecast, a turnaround exists for value opportunities to
present themselves in Japan. However many more Japanese companies must engage in
more radical restructuring to generate globally competitive returns for its
stock market to end its decade long slide.
Competitive pressures on margins will continue in 1999. Top-line revenues will
not be secure as pricing power does not exist and the global outlook remains
uncertain. Combined with the January 1st introduction of the EMU, the urge to
merge and restructure will remain. M&A activity in the US and Europe may be
joined by activity in Asia and Latin America if their economies stabilize
facilitating bottom-fishing by foreign investors. Financial crises in each of
the last two years have served a notice of caution, but investment opportunities
will continue to arise as companies take action to improve their own financial
productivity.
VALUE OF $10,000 INVESTED JANUARY 3, 1995
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTERNATIONAL
MSCI EAFE*** STOCK SERIES
<S> <C> <C>
01/03/95 $10,000 $10,000
95 $11,155 $11,435
96 $11,896 $13,038
97 $12,130 $14,601
98 $14,596 $17,006
International Stock Series
Average Annual Total Return*
Since
1 Year January 3, 1995**
+16.47% +14.22%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future
performance. Investment return and principal value
will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
This represents the performance of the Series
itself, without the expenses associated with the
variable annuities or variable universal life
insurance policies.
* SEC defined total returns, including
reinvestment of all dividend and capital
gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of the stocks of Europe,
Australia, and the Far East.
15
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C>
Capital Spending 30.4%
Consumer Cyclical 15.1%
Finance 14.2%
Utilities 10.6%
Health Care 10.4%
Energy & Related 5.6%
Basic Industry 5.0%
Consumer Staples 4.0%
Cash
Equivalents/Receivables 2.5%
Transportation 1.7%
Metals-Mining 0.5%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Compuware Corp. 2.1%
2. Biogen, Inc. 2.0%
3. Century Telephone Enterprises, Inc. 2.0%
4. Altera Corp. 1.7%
5. AFLAC, Inc. 1.5%
6. Watson Pharmaceuticals, Inc. 1.5%
7. Quintiles Transnational, Corp. 1.4%
8. BEC Energy 1.4%
9. Linear Technology Corp. 1.4%
10. Maxim Integrated Products, Inc. 1.4%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES
FOR THE PERIOD ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
AFLAC, Inc. AccuStaff, Inc.
Altera Corp. Bear Stearns Companies, Inc.
BEC Energy FIRSTPLUS Financial Group,
Biogen, Inc. Inc.
Century Telephone Enterprises, GPU, Inc.
Inc. Hormel Foods Corp.
Compuware Corp. North Fork Bancorporation,
Linear Technology Corp. Inc.
Quintiles Transnational, Corp. PMI Group, Inc.
Watson Pharmaceuticals, Inc. Provident Financial Group,
Inc.
SouthTrust Corp.
US Airways Group, 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.
For the eight month period ending 12/31/98, the Fortis Series Mid Cap Stock
returned -2.89%, while the S&P 400 Midcap Index returned 4.59% over the same
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 fourteen 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.
Most of the underperformance of the portfolio compared to the index occurred in
October and December when a handful of companies dominated the returns of the
benchmark. October was a month where larger and mid capitalization stocks
outperformed smaller capitalization stocks. The portfolio had a slightly smaller
than benchmark capitalization, causing some underperformance in the month. In
addition, a few of our selected securities such as, BMC Software, Steris
Corporation and Bowne & Company, experienced negative returns. In December, the
return of the Midcap Index was strongly influenced by changes to the Index. One
stock, America OnLine, returned 77% in the month accounting for a high
percentage of the Index return.
We have seen previous time periods where our quantitative model did not meet our
expectations. In the past these have been relatively short lived, and our model
has rebounded and allowed us to meet our performance expectations. We remain
committed to our fully invested and sector neutral portfolio construction
methods.
VALUE OF $10,000 INVESTED MAY 1, 1998
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 400
<S> <C> <C> <C> <C> <C>
Midcap*** Mid Cap Stock Series
05/01/98 $10,000 $10,000
98 $10,536 $9,711
Mid Cap Stock Series
Total Return*
Since
May 1, 1998**
-2.89%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 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 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 34.0%
Banks 14.2%
Real Estate Investment Trust 7.2%
Cash Equivalents/Receivables 6.4%
Telecommunication Equipment 6.2%
Oil and Gas Field Services 5.6%
Medical Supplies 4.4%
Telecommunications 4.2%
Closed End Global Country Fund 4.1%
Ship Building, Shipping 3.8%
Shoes and Leather 3.4%
Consumer Goods 3.4%
Forest Products 3.1%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Jones Intercable, Inc. Class A 3.9%
2. Knightsbridge Tankers Ltd. 3.8%
3. CCB Financial Corp. 3.6%
4. Jostens, Inc. 3.4%
5. Wolverine World Wide, Inc. 3.4%
6. Federal Signal Corp. 3.3%
7. Sola International, Inc. 2.7%
8. Chieftain International, Inc. 2.4%
9. Georgia-Pacific Corp. (Timber Group) 2.2%
10. Interim Services, Inc. 2.2%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES
FOR THE PERIOD ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
CCB Financial Corp. CFM Technologies, Inc.
Chieftain International, Inc. Federal Realty Investment
Federal Signal Corp. Trust
Georgia-Pacific Corp. (Timber Seagull Energy Corp.
Group)
Interim Services, Inc.
Jones Intercable, Inc. Class A
Jostens, Inc.
Knightsbridge Tankers Ltd.
Sola International, Inc.
Wolverine World Wide, 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 rebounded strongly during the 4th quarter of 1998.
Consumer and energy sector holdings were selectively increased based on the fund
manager's belief that the market was over-emphasizing what were only temporary
problems in fundamentally sound companies. The fund sold several stocks that had
appreciated more than 50% since their purchase. For the period of May 1, 1998 to
December 31, 1998 the portfolio had a return of -5.48% versus the Russell 2000
index's return of -12.24%
Over the long term, the manager believes small cap stocks can regain their
position as the best performing market segment. From 1974 to 1983, and again
from 1991 to 1994, small caps outperformed larger caps by a factor of almost two
after a period of underperformance. The small cap market may be near a period of
similar outperformance and may currently carry much less downside risk for
investors than larger caps.
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> <C> <C> <C>
05/01/98 $10,000 $10,000
98 $8,814 $9,452
Small Cap Value Series
Total Return*
Since
May 1, 1998**
-5.48%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 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 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
United States 39.2%
Other 12.7%
France 7.5%
United Kingdom 6.5%
Japan 5.9%
Germany 5.8%
Finland 5.8%
Netherlands 4.9%
Italy 3.3%
Spain 3.2%
Switzerland 3.2%
Cash
Equivalents/Receivables 2.0%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Nokia Oyj K Shares (Finland) 4.6%
2. Cisco Systems, Inc. (US) 4.1%
3. Telefonica de Espana S.A. ADR (Spain) 2.7%
4. SAP AG Systeme Preferred (Germany) 2.5%
5. 3Com Corp. (US) 2.4%
6. Orange plc (United Kingdom) 2.1%
7. Novartis AG (Switzerland) 2.1%
8. Bed Bath & Beyond, Inc. (US) 2.1%
9. Perkin - Elmer Corp. (US) 2.1%
10. Synopsys, Inc. (US) 1.9%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS:. ELIMINATIONS:
Axa Cendant Corp.
Cadbury Schweppes plc Deutsche Lufthansa AG
Citrix Systems, Inc. Disco S.A. ADR
Guidant Corp. ENSCO International, Inc.
HypoVereinsbank Hong Kong Land Holdings Ltd.
Intuit, Inc. Input/Output, Inc.
Mannesmann AG Interim Services, Inc.
Sidel JBA Holdings plc
Suez Lyonnaise des Eaux R & B Falcon Corp.
TDK Corp. SGL Carbon AG
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 are pleased to report that during the twelve-month reporting period, from
January 1 to December 31, 1998, the Global Growth Series portfolio returned
11.36%. Over the same time period the MSCI World Index returned 24.34%. The
outperformance of larger companies continued in 1998 worldwide, fueling the
performance of the index. The Global Growth Series has a focus on mid-size
growth companies. The performance of the portfolio has lagged the MSCI in recent
years due to the aforementioned outperformance of larger companies.
This portfolio'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.
Calendar year 1998 was volatile for all of the world's stock markets due to
concerns with economic weakness in Japan/Asia and debt defaults in Russia. These
economic issues raised the level of investor concern especially for smaller
company and emerging market equities. Large growth oriented equity investments
significantly outperformed other stock market sectors in most major markets
globally. Major holdings such as Nokia, a Finnish company which is the world
leader in cellular phone manufacturer and Cisco Systems (USA), which is a
dominant supplier of networking products, were beneficiaries of this trend.
The portfolio is broadly diversified geographically with significant exposure in
Europe and the United States. Japan represents an underweighted exposure for the
fund, however, we continue to look for appropriate growth opportunities in this
depressed economy. Emerging regions remain a minor weighting in the portfolio
due to their uncertain economic outlook. The fund historically has invested in
mid-sized and larger growth oriented companies.
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.
The outlook for the world's equity markets remains uncertain however due to
slowing global economies and worldwide disinflation/deflation. These concerns
will likely be offset by lower interest rates and a favorable outlook for global
money flows (liquidity) into equity investments. Our focus on companies with
exceptional growth characteristics worldwide should result in favorable
performance 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 SERIES
<S> <C> <C>
05/01/92 $10,000 $10,000
92 $10,236 $11,088
93 $12,613 $13,075
94 $13,317 $12,685
95 $16,156 $16,553
96 $18,417 $19,715
97 $21,371 $21,059
98 $26,670 $23,451
Global Growth Series
Average Annual Total Return*
Since
1 Year 5 Year May 1, 1992**
+11.36% +12.39% +13.63%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of the world's major equity markets in U.S. dollars,
weighted by stock market value.
18
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 22.5%
Financial Services 12.9%
Drugs 11.1%
Computer-Communication Equipment 9.8%
Retail-Specialty 8.3%
Telephone Services 7.3%
Telecommunications 6.6%
Banks 5.3%
Business Services and Supplies 5.2%
Cash Equivalents/Receivables 4.4%
Retail-Discount Stores 3.4%
Office Equipment and Supplies 3.2%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Nokia Oyj Corp. ADR Class A 6.0%
2. Dell Computer Corp. 5.2%
3. AirTouch Communications, Inc. 5.1%
4. Home Depot, Inc. 5.0%
5. Cisco Systems, Inc. 4.5%
6. Tyco International Ltd. 4.2%
7. Pfizer, Inc. 3.9%
8. Associates First Capital Corp. Class A 3.9%
9. Wal-Mart Stores, Inc. 3.4%
10. EMC Corp. 3.2%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE PERIOD ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
AirTouch Communications, Inc. Banc One Corp.
Associates First Capital Corp. Campbell Soup Co.
Class A Chase Manhattan Corp.
Cisco Systems, Inc. Compaq Computer Corp.
Dell Computer Corp. Ericsson (L.M.) Telephone Co.
EMC Corp. Class B ADR
Home Depot, Inc. Federated Department Stores,
Nokia Oyj Corp. ADR Class A Inc.
Pfizer, Inc. Halliburton Co.
Tyco International Ltd. Merrill Lynch & Co., Inc.
Wal-Mart Stores, Inc. Schlumberger Ltd.
United HealthCare Corp.
FORTIS SERIES: 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 over the period May 1, 1998 to December 31, 1998,
the portfolio returned 18.61%. The S & P 500 rose 10.79% over the same period.
The out-performance versus the index was driven by strong stock selection within
our investment process and, especially in the third quarter, our decision to
increase holdings in a few stocks that had been over-sold despite intact
fundamentals.
In the third quarter, technology, retailing and financials stocks in many
instances declined more than 40%. We added to select technology stocks such as
Cisco, Dell and Nokia, and retailers like Home Depot, Kohl's and Wal-Mart.
Technology companies saw enough demand from U.S. and European markets to offset
any weakness in emerging markets. Discount retailers benefit from interest rate
cuts and an employed, confident, U.S. consumer. We trimmed certain brokerage and
bank stocks as their asset quality was questioned.
Strong performing sectors for the year included technology and retailing where
the portfolio is overweight versus the S&P 500. Key technology holdings include
Cisco Systems +152% for the year, Dell +255%, Nokia +254%, and Microsoft +117%.
Discount retailers produced excellent same store sales and therefore Home Depot
+109%, Dayton Hudson +56%, Kohl's +76% and Wal-Mart +108% all performed well.
Pharmaceutical stocks were also exceptional performers, showing strong revenue
growth and promising new drug pipelines. Significant positions included Bristol
Myers Squibb, which was up 41% for the year, Pfizer +67%, Schering Plough +81%,
and Warner Lambert +77%. The overweight position in financial stocks hurt
performance. Several of these holdings have outperformed the market including
American International Group, Federal Home Loan Corporation and MBNA Corporation
and continue to be substantial holdings in the portfolio.
Our investment approach is to hold fairly concentrated positions in our top
twenty-five holdings. We research these companies thoroughly and then trade
around a core position taking advantage of market and individual stock
volatility. The investment discipline used in the management of the portfolio
has been in place for 21 years and has outperformed the S&P 500 by 4.4% per
annum, on average. Stock selection accounts for two-thirds of the
out-performance, intra-period trading around core positions accounts for
one-third of the out-performance.
The portfolio remains weighted toward industry dominant companies in rapidly
growing sectors of the economy. The lack of pricing power for many corporations
forces a renewed focus on volume growth and expense control. The technology,
retailing, and pharmaceutical stocks within the portfolio have demonstrated an
ability to grow earnings in excess of the market as a whole despite minimal
pricing power. The financial stocks remaining in the portfolio have also
demonstrated consistent earnings power and will likely help dampen the
volatility of the portfolio.
We believe that 1999 will be another year of moderate growth for the U.S. and
Europe with subdued inflation. Thus, 1999 may be similar to 1998 in many
respects. Interest rates should remain low under a vigilant Federal Reserve and
European Central Bank. The Southeast Asian crisis appears to be bottoming with
painful progress in Korea and Thailand. China's ability to avoid currency
devaluation in 1998 is evidence of some strength in its economy. Japan's
restructuring of its banking system also appears to be moving forward. Although
the potential for a mid-year correction in the stock market related to Year 2000
computer problems is a possibility, we believe any correction will be short
lived. We remain concerned about Russian instability and Brazil's financial
crisis but would expect the world community to provide sufficient assistance to
avoid a dramatic spillover impact elsewhere. With low interest rates around 5%
as modest competition for capital and with the aging populations in developed
nations increasing savings, U.S. equities should benefit from continued domestic
and international fund flows. Under this environment, large company growth
stocks should likely outperform again.
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> <C> <C> <C>
05/01/98 $10,000 $10,000
98 $11,172 $11,861
Large Cap Growth Series
Total Return*
Since
May 1, 1998**
+18.61%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
19
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 31.7%
Computer-Software 16.7%
Retail-Specialty 7.2%
Cash Equivalents/Receivables 6.9%
Drugs 5.9%
Financial Services 5.7%
Electronic Components 5.3%
Medical Supplies 4.7%
Telephone Services 4.3%
Business Services and
Supplies 4.0%
Advertising-Public Relations 3.8%
Health Care Services 3.8%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Home Depot, Inc. 2.9%
2. Solectron Corp. 2.9%
3. MCI Worldcom, Inc. 2.7%
4. Cisco Systems, Inc. 2.7%
5. Inktomi Corp. 2.4%
6. Watson Pharmaceuticals, Inc. 2.2%
7. Staples, Inc. 2.1%
8. Waters Corp. 2.1%
9. Concord EFS, Inc. 2.0%
10. Capital One Financial Corp. 1.8%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
Affiliated Computer Services, ADC
Inc. Telecommunications,
Century Telephone Enterprises, Inc.
Inc. BMC Software, Inc.
Concord EFS, Inc. Cendant Corp.
Exodus Communications, Inc. ENSCO International,
Inktomi Corp. Inc.
Outdoor Systems, Inc. Fannie Mae.
Sofamor Danek Group, Inc. HBO & Co.
Suiza Foods Corp. Medtronic, Inc. (with
Waters Corp. rights)
Watson Pharmaceuticals, Inc. Microsoft Corp.
R & B Falcon Corp.
Tellabs, Inc.
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 year ending December 31, 1998 the Fortis Series Growth Stock Fund had a
total return of 19.01%. This compares to a 19.09% return for the S&P 400 Midcap
Index and a 28.58% return for the S&P 500 Index. The S&P 400 Midcap Index has
become a relevant comparison for the Growth Stock Series, as the portfolio's
primary investment focus is mid capitalization stocks, typically those with a
market capitalizations between $1 billion and $6 billion.
There are a number of factors which contributed to the performance of the
portfolio versus the Midcap Index. The single largest factor was the presence of
America Online in the Midcap Index. This stock rose 566% for the year, and
contributed 7.11% of the Index's 19.09% total return, an enormous impact from
one stock. The portfolio had no position in AOL viewing it as a large
capitalization stock. Indeed, AOL was added to the S&P 500 index at the end of
the year. On the positive side, the portfolio had a material overweighting in
both technology, particularly in software and telecommunication equipment
stocks, and in consumer cyclical stocks, mainly retailers. These areas performed
extremely well during the year. Technology was the best performing sector and
contributed over 70% of the Index's full year return, while consumer cyclicals
were the second best performing sector contributing 2.7% of the Index's return.
Health care was the third best performer, and the portfolio was overweighted in
this area as well. In addition, the portfolio was underweighted in the two worst
performing sectors; energy and basic materials, two areas which suffered from
weak demand and excess supply.
The Growth Stock Series Fund had a change of portfolio managers in March, and
had a substantial modification in the composition of the portfolio as a result.
The number of holdings increased from 49 to 83, large weightings in certain
individual stocks were greatly reduced, and diversification was significantly
increased. These changes were designed to reduce the volatility or overall risk
of the portfolio. Additionally, the portfolio became more of a true mid-cap
portfolio, as a number of large capitalization holdings were sold, and were
replaced by holdings in companies with market capitalizations between $1 and $6
billion. The average market capitalization of the stocks in the portfolio at the
end of the year was approximately $3 billion.
The portfolio will maintain a disciplined investment process investing in a well
diversified portfolio, with an emphasis on companies with strong earnings
growth, upside earnings momentum, and reasonable valuation. We believe this
approach offers the best potential for competitive performance.
The stock market outlook for 1999 is somewhat mixed. The U.S. economy remains
healthy, inflation is subdued, interest rates are low, and the crisis in Asia
appears, at worst, to have bottomed, and in some countries is showing signs of
improvement. Corporate profit growth looks to be up mid to high single digits,
and the Federal Reserve has demonstrated its willingness to ease in the face of
emerging financial problems. Liquidity remains strong with no let-up in the flow
of funds into stock funds. Offsetting this good news is the market's high
valuation level. The strong rally at the end of 1998 has returned most of the
major indices to new highs, and the price/earnings multiple on the S&P 500 at 28
times is at an all time high. 1999 may be a year where the market takes a
breather while waiting for the fundamentals to catch up with valuation.
VALUE OF $10,000 INVESTED JANUARY 1, 1989
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
S&P 500** GROWTH STOCK SERIES
<S> <C> <C>
01/01/89 $10,000 $10,000
89 $13,162 $13,646
90 $12,754 $13,224
91 $16,631 $20,298
92 $17,896 $20,895
93 $19,693 $22,730
94 $19,952 $22,089
95 $27,441 $28,200
96 $33,737 $32,830
97 $44,989 $36,909
98 $57,845 $43,927
Growth Stock Series
Average Annual Total Return*
1 Year 5 Year 10 Year
+19.01% +14.09% +15.95%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future performance. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. This represents the performance of the Series
itself, without the expenses associated with the variable annuities or variable
universal life insurance policies.
* SEC defined total returns, including reinvestment of all dividend and
capital gains distributions.
** An unmanaged index of 500 common stocks.
20
<PAGE>
PORTFOLIO COMPOSITION BY INDUSTRY
AS OF 12/31/98
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C> <C> <C> <C> <C>
Other 25.4%
Computer-Software 23.0%
Health Care Services 8.0%
Electronic Components 7.2%
Cash Equivalents/Receivables 6.2%
Financial Services 5.6%
Drugs 5.2%
Educational Services 5.1%
Retail - Miscellaneous 4.2%
Business Services and Supplies 4.0%
Telecommunication Equipment 3.2%
Computer - Communication Equipment 2.9%
</TABLE>
TOP 10 HOLDINGS AS OF 12/31/98
<TABLE>
<CAPTION>
Percent of
Stocks Net Assets
- -------------------------------------------------------------------
<C> <S> <C>
1. Mercury Interactive Corp. 2.2%
2. DM Management Co. 2.0%
3. Insight Enterprises, Inc. 1.8%
4. Sylvan Learning Systems, Inc. 1.6%
5. Level One Communications, Inc. 1.6%
6. Network Appliance, Inc. 1.5%
7. Incyte Pharmaceutical, Inc. 1.4%
8. Jabil Circuit, Inc. 1.4%
9. Flextronics International, Ltd. 1.4%
10. Medicis Pharmaceutical Corp. 1.4%
</TABLE>
TEN LARGEST PORTFOLIO CHANGES FOR THE YEAR ENDED 12/31/98
ADDITIONS: ELIMINATIONS:
DM Management Co. Acxiom Corp.
Flextronics International Ltd. American Oncology Resources,
Incyte Pharmaceuticals, Inc. Inc.
Insight Enterprises, Inc. Apollo Group, Inc. Class A
Jabil Circuit, Inc. Bed Bath & Beyond, Inc.
Level One Communications, Inc. Cisco Systems, Inc.
Medicis Pharmaceutical Corp. Input/Output, Inc.
Mercury Interactive Corp. Intermedia Communications,
Network Appliance, Inc. Inc.
Sylvan Learning Systems, Inc. Parametric Technology Corp.
Petroleum Geo-Services ADR
Sterling Commerce, 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.
During 1998 the portfolio significantly outperformed both the Russell 2000 and
Russell 2000 growth indices -- the widely used benchmarks for small
capitalization portfolios. The portfolio was up 21.17% during the period versus
a 2.24% decline for the Russell 2000. Most of the fund's outperformance occurred
during the fourth quarter, when the fund gained 36.31% vs. 16.31% for the
Russell 2000.
1998 was an extremely volatile year in the market and was especially tough for
small cap stocks. The small cap indices significantly underperformed large cap
with the Russell 2000 declining 2.24% vs. a 28.58% gain for the S&P 500. Small
cap stocks were particularly weak during the well publicized market sell-off
this fall as investors flocked to large cap names in search of liquidity and a
perceived "flight to quality". The sell-off created an opportunity for the fund
to purchase quality growth companies at very attractive prices. The performance
of small cap stocks turned significantly after the first Federal Reserve bank
interest rate easing this fall. Additionally, third quarter earnings reports
demonstrated an acceleration in earnings per share growth for small companies
and a decline in growth rates for larger companies, making small stocks even
more attractive.
The outperformance of the fund vs. its benchmark during the period is
attributable to excellent stock selection, especially in the technology area.
Flextronics Inc., a contract manufacturer for various technology companies was
up 141%, DM Management, a catalogue retailer was up 135% and Applied
Microcircuits, a semi-conductor company which supplies to the telecommunications
sector was up 128%.
Going forward, we expect small cap stocks to perform well, given the current
attractive relative valuations. We expect performance to be driven by continued
strong earnings reports and a favorable interest rate environment. We are
confident that the market will begin to recognize the relative superior earnings
growth of small cap stocks by rewarding them with higher valuations.
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
05/02/94 $10,000 $10,000
<S> <C> <C>
94 $10,397 $9,811
95 $14,299 $12,743
96 $17,580 $13,718
97 $23,444 $13,913
98 $30,144 $16,858
Aggressive Growth Series
Average Annual Total Return*
Since
1 Year May 2, 1994**
+21.17% +11.84%
</TABLE>
Annual period ended December 31
Past performance is not indicative of future
performance. Investment return and principal value
will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost.
This represents the performance of the Series
itself, without the expenses associated with the
variable annuities or variable universal life
insurance policies.
* SEC defined total returns, including
reinvestment of all dividend and capital
gains distributions.
** Date shares were first offered to the public.
*** An unmanaged index of 500 common stocks
21
<PAGE>
FORTIS SERIES FUND, INC.
MONEY MARKET SERIES
Schedule of Investments
December 31, 1998
SHORT-TERM INVESTMENTS - 100.11%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Maturity Rating
Amount Yield Date (unaudited) Value (a)
----------- ------ --------- --------------- ------------
<C> <S> <C> <C> <C> <C>
BANKS-16.81%
$3,472,000 Banc One Funding Corp. (c)................... 5.43% 01/29/99 A1 $ 3,457,232
3,500,000 Deutsche Bank AG............................. 5.35% 02/16/99 A1 3,476,193
1,300,400 First Union National Bank.................... 5.40% 02/01/99 A1 1,294,366
1,083,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit............................... 5.03% 01/01/99 A1+ 1,083,000
3,700,000 Wells Fargo Corp............................. 5.21% 03/31/99 A1 3,653,102
------------
12,963,893
------------
BROKERAGE AND INVESTMENT-8.12%
1,000,000 Merrill Lynch & Co., Inc..................... 5.15% 02/12/99 A1+ 994,028
2,500,000 Merrill Lynch & Co., Inc..................... 5.16% 03/18/99 A1+ 2,473,264
2,800,000 Morgan Stanley Dean Witter Corp.............. 5.71% 01/20/99 A1 2,791,476
------------
6,258,768
------------
CAPTIVE AUTO FINANCE-8.15%
2,800,000 Ford Motor Credit Corp....................... 5.69% 01/11/99 A1 2,795,312
500,000 General Motors Acceptance Corp............... 5.28% 03/19/99 A1 494,453
3,000,000 General Motors Acceptance Corp............... 5.42% 01/15/99 A1 2,993,438
------------
6,283,203
------------
CAPTIVE EQUIPMENT FINANCE-12.53%
800,000 IBM Credit Corp.............................. 5.42% 01/08/99 A1 799,058
2,800,000 IBM Credit Corp.............................. 5.64% 01/11/99 A1 2,795,337
3,300,000 John Deere Capital Corp...................... 5.22% 03/05/99 A1 3,270,197
2,800,000 PACCAR Financial Corp........................ 5.68% 01/13/99 A1+ 2,794,489
------------
9,659,081
------------
CAPITIVE OIL FINANCE-2.58%
2,000,000 Chevron Oil USA, Inc......................... 5.33% 01/25/99 A1 1,992,778
------------
CONSUMER FINANCE-15.28%
3,500,000 American Express Credit Corp................. 5.26% 01/04/99 A1 3,497,997
3,600,000 American General Finance..................... 5.16% 01/22/99 A1 3,588,956
3,100,000 Commercial Credit Corp....................... 5.30% 01/12/99 A1 3,094,647
1,600,000 Household Finance Corp....................... 5.24% 01/19/99 A1 1,595,693
------------
11,777,293
------------
DIVERSIFIED FINANCE-16.25%
3,054,000 Associates Corp. Master Variable Rate Note... 4.69% 01/01/99 A1+ 3,054,000
3,200,000 CIT Group, Inc............................... 5.27% 01/27/99 A1 3,187,616
3,100,000 General Electric Capital Corp................ 5.45% 01/14/99 A1+ 3,093,635
3,200,000 Prudential Funding Corp...................... 5.25% 01/06/99 A1 3,197,275
------------
12,532,526
------------
FOOD-3.85%
3,000,000 Kellogg Co................................... 5.11% 03/11/99 A1 2,970,542
------------
OIL-REFINING-4.38%
3,400,000 Texaco, Inc.................................. 5.16% 02/23/99 A1 3,374,398
------------
UTILITIES-ELECTRIC-12.16%
1,600,000 CSW Credit Inc............................... 5.39% 03/12/99 A1+ 1,583,654
1,100,000 CSW Credit Inc............................... 5.55% 01/07/99 A1 1,098,851
3,300,000 Duke Energy Corp............................. 5.25% 01/15/99 A1 3,292,919
3,400,000 Wisconsin Electric Fuel Trust................ 5.20% 01/05/99 A1+ 3,397,592
------------
9,373,016
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$77,185,498) (b)........................... $77,185,498
------------
------------
</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 December 31, 1998, was $3,457,232, which
represents 4.48% of total net assets.
22
<PAGE>
FORTIS SERIES FUND, INC.
U.S. GOVERNMENT SECURITIES SERIES
Schedule of Investments
December 31, 1998
U.S. GOVERNMENT SECURITIES-97.49%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (a) Value (b)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-3.27%
MORTGAGE BACKED SECURITIES:
$ 2,805,826 5.50% 2001................................... $ 2,783,372 $ 2,792,675
12,177 11.25% 2015.................................. 13,247 13,521
------------- -------------
2,796,619 2,806,196
------------- -------------
NOTES:
2,000,000 6.75% Global 2006............................ 2,055,189 2,185,276
------------- -------------
TOTAL FEDERAL HOME LOAN MORTGAGE
CORPORATION................................ 4,851,808 4,991,472
------------- -------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION -
26.81%
MORTGAGE BACKED SECURITIES:
4,700,000 5.50% 2014 (e)............................... 4,635,375 4,642,298
1,300,000 5.835% 2008.................................. 1,315,297 1,315,387
4,420,530 6.00% 2013................................... 4,432,900 4,426,056
1,938,325 6.20% 2006................................... 1,945,291 1,994,597
792,257 6.36% 2008................................... 791,080 827,110
1,833,251 6.48% 2008................................... 1,850,355 1,927,900
4,166,167 6.50% 2013-2028.............................. 4,156,409 4,207,531
742,867 6.54% 2007................................... 755,743 784,129
1,308,769 6.63% 2005................................... 1,344,649 1,374,613
5,849,783 7.00% 2003-2028.............................. 5,901,251 5,965,544
2,290,408 7.50% 2023................................... 2,356,973 2,351,248
154,755 8.50% 2017................................... 158,230 162,106
113,644 9.00% 2020-2021.............................. 113,421 120,108
719,934 9.75% 2020................................... 776,629 773,303
------------- -------------
30,533,603 30,871,930
------------- -------------
NOTES:
2,000,000 6.18% 2001................................... 2,019,679 2,048,622
1,340,000 6.48% 2007................................... 1,434,537 1,450,495
3,935,000 6.58% 2007................................... 3,926,549 4,286,415
2,020,000 7.15% 2007................................... 2,183,248 2,274,831
------------- -------------
9,564,013 10,060,363
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCATION... 40,097,616 40,932,293
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
7.32%
MORTGAGE BACKED SECURITIES:
7,108,982 7.50% 2027................................... 7,156,090 7,328,934
1,585,032 9.00% 2020................................... 1,660,321 1,691,031
2,007,905 9.50% 2018-2021.............................. 2,081,425 2,153,008
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 10,897,836 11,172,973
------------- -------------
OTHER DIRECT FEDERAL OBLIGATIONS - 25.43%
FEDERAL FARM CREDIT BANK:
5,000,000 5.70% 2001................................... 5,016,811 5,071,605
------------- -------------
FEDERAL HOME LOAN BANK:
3,350,000 5.60% 2001................................... 3,339,842 3,389,496
2,100,000 5.61% 2001................................... 2,127,137 2,128,209
1,075,000 5.75% 2001................................... 1,074,074 1,091,584
2,500,000 5.925% 2000.................................. 2,502,446 2,538,095
7,895,000 7.31% 2004................................... 7,912,910 8,676,479
------------- -------------
16,956,409 17,823,863
------------- -------------
</TABLE>
23
<PAGE>
FORTIS SERIES FUND, INC.
U.S. GOVERNMENT SECURITIES SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (a) Value (b)
------------ ------------- -------------
<C> <S> <C> <C>
TENNESSEE VALLEY AUTHORITY:
$15,000,000 6.375% Global 2005........................... $ 14,475,281 $ 15,928,455
------------- -------------
TOTAL OTHER DIRECT FEDERAL OBLIGATIONS....... 36,448,501 38,823,923
------------- -------------
OTHER GOVERNMENT AGENCIES - 2.51%
RESOLUTION FUNDING CORPORATION:
9,000,000 7.96% Zero Coupon Strip 2014 (d)............. 2,734,629 3,832,551
------------- -------------
U.S. TREASURY SECURITIES - 32.15%
BONDS:
16,450,000 5.10% 2009 Zero Coupon Strip (d)............. 9,517,445 9,468,933
800,000 5.59% 2022 Zero Coupon Strip (d)............. 214,552 216,151
6,220,000 5.61% 2018 Zero Coupon Strip (d)............. 2,071,770 2,068,704
17,135,000 5.83% 2019 Zero Coupon Strip (d)............. 5,394,173 5,608,782
4,490,000 8.125% 2021.................................. 5,847,102 6,069,643
------------- -------------
23,045,042 23,432,213
------------- -------------
NOTES:
6,450,000 5.50% 2003................................... 6,664,486 6,655,594
4,100,000 5.625% 1999.................................. 4,096,423 4,132,033
5,825,000 6.125% 2001.................................. 5,760,379 6,059,823
8,065,000 6.375% 2000.................................. 8,124,587 8,246,462
500,000 6.625% 2007.................................. 562,388 562,344
------------- -------------
25,208,263 25,656,256
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 48,253,305 49,088,469
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. $ 143,283,695 $ 148,841,681
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-5.03%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
----------- -------------
<C> <S> <C>
BANKS-1.19%
$1,812,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 1,812,000
-------------
DIVERSIFIED FINANCE-0.45%
690,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 690,000
-------------
U.S. GOVERNMENT AGENCY-3.39%
5,200,000 Federal Home Loan Mortgage Corp., 5.23%,
1-25-1999.................................. 5,181,547
-------------
TOTAL SHORT-TERM INVESTMENTS................. 7,683,547
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$150,967,242) (a).......................... $ 156,525,228
-------------
-------------
</TABLE>
(a) At December 31, 1998, the cost of securities for federal income tax
purposes was $151,170,135 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $5,462,844
Unrealized depreciation.......................................... (107,751)
- -----------------------------------------------------------------------------
Net unrealized appreciation...................................... $5,355,093
- -----------------------------------------------------------------------------
</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 December 31,
1998, was $4,635,375.
24
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS AND WARRANTS - 0.11%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------- -------------
<C> <S> <C> <C>
CONSUMER GOODS - 0.11%
1,000 Iridium LLC/Capital Corp. (Warrants) (a)
(e)........................................ $ 96,501 $ 132,000
------------- -------------
</TABLE>
ASSET BACKED SECURITIES - 18.24%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS - 9.67%
$ 409,913 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (e).......... AAA $ 412,916 $ 427,478
1,250,000 First Union-Lehman Brothers Commercial
Mortgage, 7.30% Ser 1997-C1 Class A2
12-18-2006................................. Aaa* 1,261,503 1,347,000
637,857 GS Mortgage Securities Corp. II Protective
Life, 7.02% Ser 1996-PL Class A1
3-1-2026................................... Aaa* 637,817 675,434
690,325 J.P. Morgan Commercial Mortgage Finance
Corp., 6.47% Ser 1996-C2 Class A
11-25-2027................................. AAA 695,149 703,600
760,909 Merrill Lynch Mortgage Investors, Inc., 6.76%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 741,136 780,434
1,400,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996-C1 Class B 4-25-2028.............. AA 1,365,552 1,491,266
1,000,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 1,008,711 1,099,010
1,650,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,663,753 1,803,681
2,000,000 Nationslink Funding Corp., 7.52% Ser 1996-1
Class A2 7-20-2005......................... AAA 2,001,959 2,135,100
643,335 Nationslink Funding Corp., 7.53% Ser 1996-1
Class A1 9-20-2002......................... AAA 647,452 673,848
------------- -------------
10,435,948 11,136,851
------------- -------------
HOUSING - 1.13%
750,000 Money Store Home Improvement Trust, 7.41% Ser
1997-1 Class M1 5-15-2017.................. AA 752,941 782,694
500,000 Money Store Residential Trust, 7.09%
1997-I-M1 7-15-2016........................ AA 499,924 515,194
------------- -------------
1,252,865 1,297,888
------------- -------------
MANUFACTURED HOMES - 2.90%
1,800,000 Green Tree Financial Corp., 7.20% Ser 1993-4
Class B1 1-15-2019......................... Baa3* 1,787,613 1,785,726
1,500,000 Green Tree Financial Corp., 7.65% Ser 1994-1
Class A5 4-15-2019......................... Aa2* 1,494,141 1,558,614
------------- -------------
3,281,754 3,344,340
------------- -------------
MISCELLANEOUS - 0.12%
134,809 Fifth Third Auto Grantor Trust, 6.70% Ser
1996-B Class B 3-15-2002................... A 134,750 136,045
------------- -------------
MULTI-FAMILY LOANS - 3.65%
2,150,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-MF4 Class A2 4-18-2001................ A 2,172,072 2,198,138
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 1,473,750 1,531,695
591,082 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.34% Ser 1996-1 Class
A Principal Only 1-1-2033 (f)(h)........... Baa3* 448,996 472,866
------------- -------------
4,094,818 4,202,699
------------- -------------
WHOLE LOAN RESIDENTIAL - 0.77%
866,398 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 865,861 891,402
------------- -------------
TOTAL ASSET BACKED SECURITIES................ $ 20,065,996 $ 21,009,225
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE - 45.67%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT - 1.36%
$ 500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB+ $ 502,777 $ 560,366
1,000,000 Raytheon Co., 5.70%, 11-1-2003............... BBB 1,004,271 1,000,782
------------- -------------
1,507,048 1,561,148
------------- -------------
</TABLE>
25
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
AIRLINES - 1.47%
$1,300,000 Delta Airlines, 10.50% Pass Thru Certificate
4-30-2016.................................. BBB $ 1,575,166 $ 1,690,390
------------- -------------
BANKS - 7.46%
750,000 Banco Santiago S.A., 7.00% Sub Note
7-18-2007.................................. BBB 743,984 628,484
1,500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(f)........................................ AA+ 1,497,280 1,532,757
1,000,000 CoreStates Capital Corp., 6.75% Medium Term
Note 11-15-2006............................ A 1,006,701 1,044,857
1,500,000 Keystone Financial Funding Corp., 7.30%
Medium Term Note 5-15-2004................. BBB+ 1,497,018 1,594,098
1,000,000 Republic NY Capital I, 7.75% 11-15-2026...... A+ 969,430 1,086,041
1,100,000 Republic NY Capital II, 7.53% 12-4-2026...... A+ 1,053,655 1,165,358
500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- 498,200 522,422
1,000,000 US Bancorp., 6.00% Sub Note 10-15-2003....... A 998,260 1,022,144
------------- -------------
8,264,528 8,596,161
------------- -------------
BROKERAGE AND INVESTMENT - 4.00%
1,500,000 Bear Stearns Capital Trust I, 7.00% Variable
Rate Bond 1-15-2027........................ BBB 1,499,148 1,504,798
500,000 Donaldson, Lufkin & Jenrette, 6.50% Note
6-1-2008................................... A- 498,010 501,584
1,500,000 Lehman Brothers Holdings, Inc., 7.375% Sr
Note 5-15-2004............................. A 1,495,212 1,557,855
1,000,000 Salomon, Inc., 6.875% Sr Note 12-15-2003..... A 1,030,956 1,039,885
------------- -------------
4,523,326 4,604,122
------------- -------------
CABLE TELEVISION - 1.72%
1,000,000 Comcast Cable Communications, Inc., 8.50%
Note 5-1-2027 (with rights)................ BBB- 998,313 1,193,553
750,000 Cox Communications, Inc., 6.95% 1-15-2028.... A- 747,244 782,293
------------- -------------
1,745,557 1,975,846
------------- -------------
CAPTIVE AUTO FINANCE - 2.19%
2,000,000 General Motors Acceptance Corp., 5.875% Sr
Sub Deb 1-22-2003.......................... A 1,994,435 2,015,426
500,000 Toyota Motor Credit, 5.625% Note
11-13-2003................................. AAA 499,204 502,413
------------- -------------
2,493,639 2,517,839
------------- -------------
CHEMICALS - 0.39%
500,000 Equistar Chemical, 7.55% 2-15-2026........... BBB- 481,199 455,210
------------- -------------
DIVERSIFIED FINANCE - 1.10%
1,250,000 AT&T Capital Corp., 7.50% 11-15-2000......... BBB 1,248,912 1,270,832
------------- -------------
ENERGY - 0.66%
750,000 NGC Corp. Capital Trust, 8.32% 6-1-2027...... BBB 750,000 765,278
------------- -------------
FINANCE COMPANIES - 2.23%
1,250,000 Homeside Lending, Inc., 6.875% Medium Term
Note 6-30-2002............................. A+ 1,249,697 1,282,801
1,250,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 (e).............................. A+ 1,244,702 1,287,156
------------- -------------
2,494,399 2,569,957
------------- -------------
FOOD SERVICE - 0.89%
1,000,000 Sysco Corp., 6.50% 8-1-2028.................. AA- 996,865 1,028,743
------------- -------------
FOREIGN-GOVERNMENT - 2.87%
1,000,000 Alberta (Province of), 4.875% 10-29-2003..... AA+ 996,648 987,830
1,000,000 Canada (Government of), 5.25% 11-5-2008...... AA+ 999,773 1,006,340
1,250,000 Poland (Republic of), 7.125% Yankee Bond
7-1-2004................................... BBB- 1,244,745 1,309,375
------------- -------------
3,241,166 3,303,545
------------- -------------
FOREST PRODUCTS - 0.44%
500,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 499,527 509,516
------------- -------------
HOUSING - 1.32%
1,500,000 Masco Corp., 6.625% 4-15-2018................ A- 1,497,922 1,520,157
------------- -------------
LEASING - 0.44%
500,000 Ryder System, Inc., 6.60% Note 11-15-2005.... BBB+ 499,833 507,615
------------- -------------
MEDIA - 1.05%
1,000,000 News America Holdings, 8.875% Deb
4-26-2023.................................. BBB- 992,613 1,209,937
------------- -------------
</TABLE>
26
<PAGE>
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
NATURAL GAS TRANSMISSIONS - 1.58%
$1,000,000 Tennessee Gas Pipeline, 7.50% Bond
4-1-2017................................... BBB $ 984,675 $ 1,064,733
750,000 Trans-Canada Pipelines Ltd., 7.06% Note
10-14-2025................................. A- 750,000 753,289
------------- -------------
1,734,675 1,818,022
------------- -------------
OIL-EQUIPMENT WELLS AND SERVICES - 0.43%
500,000 Petroleum Geo-Services, 7.125% Sr Note
3-30-2028.................................. BBB 498,561 490,592
------------- -------------
OIL-REFINING - 2.71%
1,500,000 Coastal Corp., 7.42% Note 2-15-2037.......... BBB- 1,427,275 1,556,415
1,500,000 Tosco Corp., 7.80% 1-1-2027.................. BBB- 1,498,351 1,568,826
------------- -------------
2,925,626 3,125,241
------------- -------------
REAL ESTATE - 0.82%
1,000,000 Meditrust, 7.82% Note 9-10-2026.............. Baa3* 1,000,000 950,454
------------- -------------
SUPRANATIONAL - 0.86%
1,000,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 999,577 986,456
------------- -------------
TELECOMMUNICATIONS - 2.51%
1,000,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 998,180 1,101,449
1,000,000 Sprint Capital Corp., 6.125% 11-15-2008...... A- 999,267 1,020,353
750,000 U.S. West Capital Funding, Inc., 6.50%
11-15-2018................................. A- 745,708 768,288
------------- -------------
2,743,155 2,890,090
------------- -------------
TELEPHONE SERVICES - 3.32%
1,500,000 Century Telephone Enterprises, Inc., 6.15%
1-15-2005.................................. BBB+ 1,497,979 1,530,002
2,000,000 GTE Corp., 7.51% Note 4-1-2009............... A 1,985,327 2,295,912
------------- -------------
3,483,306 3,825,914
------------- -------------
UTILITIES-ELECTRIC - 3.85%
1,000,000 Detroit Edison Co., 5.90% Ser J 4-16-2001.... A- 1,007,631 1,008,200
1,500,000 Empresa Nacional de Electricidad, 7.325%
Yankee Bond 2-1-2037....................... A- 1,500,000 1,378,394
750,000 Puget Sound Energy, Inc., 7.02% Medium Term
Note 12-1-2027............................. A- 750,000 776,408
1,250,000 Texas Utilities Electric Capital V, 8.175%
1-30-2037.................................. BBB 1,250,000 1,269,828
------------- -------------
4,507,631 4,432,830
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 50,704,231 $ 52,605,895
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE - 12.09%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
BROADCASTING - 0.46%
$ 500,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B $ 500,000 $ 530,000
------------- -------------
CABLE TELEVISION - 1.99%
1,008,177 Australis Media Ltd., Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75) (a) (e).................. D 796,220 10
1,000,000 CSC Holdings, Inc., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 1,014,435 1,175,000
1,000,000 Lenfest Communications, 8.25% Sr Sub Note
2-15-2008.................................. BB- 997,429 1,042,500
500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 491,170 75,000
------------- -------------
3,299,254 2,292,510
------------- -------------
COMPUTER-HARDWARE - 1.01%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,074,077 1,160,000
------------- -------------
ENERGY - 0.80%
1,000,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 1,000,000 925,000
------------- -------------
ENERGY & RELATED - 0.69%
750,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 755,942 791,250
------------- -------------
</TABLE>
27
<PAGE>
FORTIS SERIES FUND, INC.
DIVERSIFIED INCOME SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
CORPORATE BONDS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
FOREIGN-GOVERNMENT - 0.34%
$ 500,000 United Mexican States, 6.25% Ser W-B Secured
Note 12-31-2019............................ BB $ 377,387 $ 389,050
------------- -------------
MEDICAL SUPPLIES - 0.46%
500,000 Maxxim Medical, 10.50% Sr Sub Note
8-1-2006................................... B 547,327 532,500
------------- -------------
RESTAURANTS AND FRANCHISING - 0.27%
300,000 Tricon Global Restaurants, Inc., 7.65% Sr
Note 5-15-2008............................. BB 299,355 313,604
------------- -------------
STEEL AND IRON - 0.59%
750,000 Weirton Steel Corp., 11.375% Sr Note
7-1-2004................................... B 794,289 675,000
------------- -------------
TELECOMMUNICATIONS - 2.67%
500,000 Intermedia Communications, Inc., 8.50% Sr
Note 1-15-2008............................. B 512,262 475,000
500,000 Nextel Communications, Inc., 9.58% Sr Disc
Note 9-15-2007 (Zero coupon through
9-15-2002, thereafter 10.65%) (g).......... CCC+ 347,672 318,750
150,000 Omnipoint Corp., 11.625% Sr Note Ser A
8-15-2006.................................. CCC+ 146,436 104,250
750,000 Qwest Communications International, Inc.,
7.25% Sr Note 11-1-2008 (e)................ BB+ 750,000 765,000
1,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 1,059,333 1,055,000
500,000 Winstar Communications, Inc., 9.83% Sr Disc
Note 10-15-2005 (Zero coupon through
10-15-2000, thereafter 14.00%) (g)......... CCC+ 440,477 355,000
------------- -------------
3,256,180 3,073,000
------------- -------------
TEXTILE MANUFACTURING - 0.94%
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,048,055 1,080,000
------------- -------------
TRANSPORTATION -- 0.98%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,074,786 1,135,000
------------- -------------
UTILITIES-ELECTRIC - 0.89%
1,000,000 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BB+ 994,872 1,024,383
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 15,021,524 $ 13,921,297
------------- -------------
------------- -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-22.43%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.25%
MORTGAGE BACKED SECURITIES:
$3,672,006 6.00% 2013................................... $ 3,682,281 $ 3,676,596
277,200 6.30% 2008................................... 277,550 288,310
1,454,188 6.63% 2005................................... 1,494,054 1,527,348
2,734,792 7.00% 2028................................... 2,776,435 2,787,778
1,195,512 7.50% 2022-2027.............................. 1,233,363 1,227,269
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 9,463,683 9,507,301
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
2.32%
MORTGAGE BACKED SECURITIES:
1,706,958 9.00% 2020................................... 1,788,038 1,821,110
793,492 9.50% 2019................................... 824,213 849,404
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 2,612,251 2,670,514
------------- -------------
U.S. TREASURY SECURITIES - 11.86%
BONDS:
7,700,000 5.53% 2022 Zero Coupon Strip (g)............. 2,081,981 2,080,455
4,685,000 5.61% 2018 Zero Coupon Strip (g)............. 1,560,489 1,558,180
5,100,000 5.63% 2019 Zero Coupon Strip (g)............. 1,667,988 1,669,378
500,000 6.625% 2027.................................. 593,409 591,407
3,040,000 8.125% 2021.................................. 3,963,431 4,109,783
------------- -------------
9,867,298 10,009,203
------------- -------------
</TABLE>
28
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
NOTES:
$3,030,000 6.125% 2007.................................. $ 3,242,395 $ 3,311,223
300,000 6.625% 2007.................................. 337,433 337,406
------------- -------------
3,579,828 3,648,629
------------- -------------
TOTAL U.S TREASURY SECURITIES................ 13,447,126 13,657,832
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 25,523,060 25,835,647
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 111,411,312 $ 113,504,064
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS - 0.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS - 0.14%
$ 158,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 158,000
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$111,569,312) (b).......................... $ 113,662,064
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $111,569,312 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $4,108,968
Unrealized depreciation..................................... (2,016,216)
- ------------------------------------------------------------------------
Net unrealized appreciation................................. $2,092,752
- ------------------------------------------------------------------------
</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 9.13% of total net assets as of December 31, 1998.
(e) Securities issued 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>
Year Acquired Shares/Par Security Cost Basis
- ------------------------------ ---------- ---------------------------------------- ------------------
<S> <C> <C> <C>
1997 1,008,177 Australis Media Ltd., Sr Sub Disc Note
5-15-2003 (Zero coupon through
5-15-2000, thereafter 15.75%) $ 796,220
1996 409,913 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 3-13-2028 412,916
1997 1,000 Iridium LLC/Capital Corp. (Warrants) 96,501
1998 1,250,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 1,244,702
1998 750,000 Qwest Communications International,
Inc., 7.25% 11-1-2008 750,000
The aggregate value of these securities at December 31, 1998, was $2,611,644, which represents 2.27% 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 December 31, 1998, was $2,005,623, which represents
1.74% 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 December 31, 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 December 31, 1998, was
$472,866, which represents .41% of total net assets.
* Moody's Rating
29
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL BOND SERIES
Schedule of Investments
December 31, 1998
BONDS-INVESTMENT GRADE-49.19%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (d) (Unaudited) Cost (a)(d) Value (b)(d)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
AUSTRIA-3.05%
$ 700,000 Republic of Austria (US Dollar), 7.875%
3-26-2002.................................. AAA $ 725,711 $ 752,500
------------ ------------
CANADA-4.98%
345,000 Canadian Government (Canadian Dollar), 8.00%
6-1-2023................................... AAA 287,649 310,073
1,450,000 Canadian Government (German Deutschemark),
4.875% 7-7-2008............................ AA+ 802,908 917,226
------------ ------------
1,090,557 1,227,299
------------ ------------
DENMARK-3.77%
4,100,000 Kingdom of Denmark (Danish Krone), 6.00%
11-15-2009................................. Aaa* 734,243 740,026
1,000,000 Kingdom of Denmark (Danish Krone), 7.00%
11-15-2007................................. AAA 183,833 188,656
------------ ------------
918,076 928,682
------------ ------------
FRANCE-13.08%
1,370,000 Government of France (European Currency
Unit), 4.50% Treasury Bill 7-12-2002....... NR 1,517,123 1,667,839
1,200,000 Government of France (European Currency
Unit), 5.25% O.A.T. Bond 4-25-2008......... AAA 1,367,403 1,556,981
------------ ------------
2,884,526 3,224,820
------------ ------------
GERMANY-15.77%
480,000 Bundesrepublic Deutschland (German
Deutschemark), 6.25% 1-4-2024.............. Aaa* 329,322 346,895
950,000 Bundesrepublic Deutschland (German
Deutschemark), 6.00% Bond 1-5-2006......... Aaa* 591,896 649,916
900,000 Deutsche Ausgleichsbank (German
Deutschemark), 6.375% 11-7-2002............ AAA 548,243 596,246
1,150,000 Deutsche Pfandbrief Bank (German
Deutschemark), 4.75% 7-15-2008 (f)......... AAA 628,555 718,796
350,000 Freistaat Bayern (German Deutschemark), 6.00%
10-30-2006................................. NR 202,500 236,309
750,000 Helaba International Finance plc (German
Deutschemark), 5.50% 2-4-2013.............. AAA 415,298 486,915
550,000 Kredit Fuer Wiederaufbau (German
Deutschemark), 5.00% 1-4-2009.............. AAA 301,239 353,073
400,000 Kredit Fuer Wiederaufbau (German
Deutschemark), 5.50% 1-22-2018............. AAA 220,966 257,877
360,000 Landeskreditbank Baden-Wurttemberg (German
Deutschemark), 6.625% 8-20-2003............ AAA 255,675 243,185
------------ ------------
3,493,694 3,889,212
------------ ------------
NETHERLANDS-1.86%
760,000 Netherlands Government (Dutch Guilders),
7.00% 2-15-2003............................ AAA 414,169 459,020
------------ ------------
SPAIN-2.68%
530,000 Bonos Y Obligation Del Estado (European
Currency Unit), 4.57% (Zero Coupon through
7-30-1999, thereafter 5.15%) 7-30-2009
(e)........................................ NR 628,391 662,059
------------ ------------
UNITED STATES-4.00%
850,000 General Electric Capital Corp., 8.125%
2-23-2007.................................. AAA 919,553 986,000
------------ ------------
TOTAL BONDS - INVESTMENT GRADE............... $11,074,677 $12,129,592
------------ ------------
------------ ------------
</TABLE>
U.S. GOVERNMENT SECURITIES-38.23%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (a) Value (b)
----------- ------------ ------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORP.-2.92%
NOTES:
$ 700,000 5.75% 2003................................... $ 721,830 $ 719,460
------------ ------------
FEDERAL HOME LOAN BANK-1.80%
NOTES:
445,000 5.125% 2003.................................. 444,341 444,023
------------ ------------
</TABLE>
30
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (a) Value (b)
----------- ------------ ------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION-3.35%
NOTES:
$ 425,000 5.75% 2003................................... $ 435,458 $ 436,540
370,000 6.00% 2008................................... 375,730 390,414
------------ ------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 811,188 826,954
------------ ------------
U.S. TREASURY SECURITIES-30.16%
BONDS:
330,000 8.125% 2019.................................. 444,294 441,272
305,000 11.75% 2014.................................. 453,633 474,466
830,000 12.50% 2014.................................. 1,355,197 1,334,225
------------ ------------
2,253,124 2,249,963
------------ ------------
NOTES:
810,000 6.125% 2007.................................. 845,622 885,179
1,200,000 6.50% 2001................................... 1,253,552 1,249,876
980,000 7.25% 2004................................... 1,111,033 1,102,194
700,000 10.75% 2005.................................. 944,771 933,187
435,000 11.625% 2004................................. 593,279 585,755
300,000 13.75% 2004.................................. 434,906 430,875
------------ ------------
5,183,163 5,187,066
------------ ------------
TOTAL U.S. TREASURY SECURITIES............... 7,436,287 7,437,029
------------ ------------
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 9,413,646 9,427,466
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $20,488,323 $21,557,058
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-6.26%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (b)
--------- ------------
<C> <S> <C>
BANKS-2.41%
$592,546 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 592,546
------------
INVESTMENT COMPANY-3.85%
950,000 First American Institutional Government Fund,
Current rate -- 5.31%...................... 950,000
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,542,546
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$22,030,869) (a)........................... $23,099,604
------------
------------
</TABLE>
(a) At December 31, 1998, the cost of securities for federal income tax
purposes was $22,030,869 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,143,560
Unrealized depreciation..................................... (74,825)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 1,068,735
- -------------------------------------------------------------------------
</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.
(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". The portfolio entered into the following Section
144A security transaction: July 15, 1998 the portfolio acquired $1,150,000
par of Deutsche Pfandbrief Bank due 2008 with a cost basis of $628,555. The
value of this security at December 31, 1998, is $718,796 which represents
2.91% of total net assets. This investment has been identified by porfolio
management as an illiquid security.
* Moody's Rating
31
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS AND WARRANTS-0.25%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
APPAREL-0.02%
250 Hosiery Corp. of America, Inc. Class A (a)
(e)........................................ $ 4,230 $ 16,000
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.00%
250 Highwaymaster Communications, Inc. (Warrants)
(a) (e).................................... 2,500 22
------------ ------------
CABLE TELEVISION-0.00%
2,500 American Telecasting, Inc. (Warrants) (a)
(e)........................................ 5,000 --
1,500 People's Choice T.V. Corp. (Warrants) (a)
(e)........................................ 15 --
------------ ------------
5,015 --
------------ ------------
CONSUMER GOODS-0.00%
1,000 Wireless One, Inc. (Warrants) (a) (e)........ 7,831 10
------------ ------------
PUBLISHING-0.02%
79,000 Marvel Entertainment Group, Inc. (a)......... 849,041 11,850
------------ ------------
TELECOMMUNICATIONS-0.21%
3,300 Clearnet Communications, Inc. (Warrants) (a)
(e)........................................ 42,075 23,513
14,168 e.spire Communications, Inc. (Warrants)
(a)........................................ 137,339 90,321
2,560 Powertel, Inc. (Warrants) (a) (e)............ 18,824 17,500
1,250 Splitrock Service (Warrants) (a)............. 15,398 13,750
------------ ------------
213,636 145,084
------------ ------------
TOTAL COMMON STOCKS AND WARRANTS............. $ 1,082,253 $ 172,966
------------ ------------
------------ ------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-0.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
-------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
FINANCE COMPANIES-0.13%
$81,000 Homeside, Inc., 11.25% Second Priority Sr
Secured Note 5-15-2003..................... A+ $ 81,000 $ 94,770
------------ ------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-94.63%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
APPAREL-0.72%
$ 500,000 Hosiery Corp. of America, Inc., 13.75% Sr Sub
Note 8-1-2002.............................. B- $ 528,186 $ 512,500
------------ ------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.45%
1,000,000 Diamond Triumph Auto, 9.25% Sr Note 4-1-2008
(e)........................................ B+ 1,019,197 995,000
750,000 Hayes Lemmerz International, Inc., 8.25% Sr
Sub Note 12-15-2008 (e).................... B 750,000 746,250
------------ ------------
1,769,197 1,741,250
------------ ------------
AUTOMOBILE MANUFACTURERS-1.43%
1,000,000 Navistar International Corp., 8.00% Sr Sub
Note 2-1-2008.............................. BB- 1,002,003 1,017,500
------------ ------------
BROADCASTING-8.16%
250,000 Ackerley Group, Inc., 9.00% Sr Sub Note
1-15-2009 (e).............................. B 250,000 253,750
500,000 Chancellor Media Corp. of Los Angeles, 8.125%
Sr Sub Note 12-15-2007..................... B 498,810 498,750
2,500,000 Chancellor Media Corp., 8.00% Sr Note
11-1-2008 (f).............................. B+ 2,478,950 2,556,250
500,000 Grupo Televisa S.A., 8.08% Sr Disc Note
5-15-2008 (Zero coupon through 5-15-2001,
thereafter 13.25%) (g)..................... BB 416,635 373,750
500,000 Shop at Home, Inc., 11.00% Sr Secured Note
4-1-2005................................... B 500,000 510,000
1,000,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B 1,030,623 1,060,000
</TABLE>
32
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
$ 500,000 Young Broadcasting Corp., 11.75% Sr Sub Note
11-15-2004................................. B $ 546,542 $ 536,250
------------ ------------
5,721,560 5,788,750
------------ ------------
CABLE TELEVISION-9.38%
1,000,000 Adelphia Communications, Inc., 9.25% Sr Note
10-1-2002.................................. B+ 1,016,663 1,055,000
3,033,461 Australis Media Ltd., Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (a) (e)................. D 2,277,149 30
1,000,000 Century Communications Corp., 8.875% Sr Note
1-15-2007.................................. BB- 1,029,388 1,105,000
1,000,000 CSC Holdings, Inc., 9.25% Sr Sub Note
11-1-2005.................................. BB- 1,048,120 1,070,000
500,000 Galaxy Telecom L.P., 12.375% Sr Sub Note
10-1-2005.................................. B- 543,039 555,000
500,000 Lenfest Communications, 7.625% Sr Note
2-15-2008.................................. BB+ 498,689 515,000
500,000 Lenfest Communications, 8.25% Sr Sub Note
2-15-2008.................................. BB- 498,714 521,250
500,000 Mediacom LLC/Capital, 8.50% Sr Note
4-15-2008.................................. B+ 500,000 511,875
500,000 Olympus Communication L.P., 10.625% Sr Note
11-15-2006................................. B 500,000 550,000
500,000 Rifkin Acquisition Partners L.P., 11.125% Sr
Sub Note 1-15-2006......................... B- 549,859 546,250
1,500,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 1,204,292 225,000
------------ ------------
9,665,913 6,654,405
------------ ------------
CHEMICALS-2.21%
500,000 Agricultural Minerals & Chemicals, 10.75% Sr
Note 9-30-2003............................. BB- 520,055 507,500
500,000 NL Industries, Inc., 11.75% Sr Secured Note
10-15-2003................................. B 549,302 531,250
1,000,000 Trans-Resources, Inc., 11.875% Sr Disc Note
3-15-2008 (Zero coupon through 3-15-2003,
thereafter 12.00%) (g)..................... B- 617,034 530,000
------------ ------------
1,686,391 1,568,750
------------ ------------
COMPUTER-HARDWARE-1.63%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,108,777 1,160,000
------------ ------------
CONSUMER FINANCE-2.86%
2,000,000 Renters Choice, Inc., 11.00% Sr Sub Note
8-15-2008 (f).............................. B 2,000,000 2,030,000
------------ ------------
CONSUMER GOODS-3.30%
1,000,000 Albecca, Inc., 10.75% Sr Sub Note 8-15-2008
(f)........................................ B- 1,000,000 980,000
250,000 Chattem, Inc., 12.75% Sr Sub Note Ser B
6-15-2004.................................. B- 257,412 276,250
1,000,000 Drypers Corp., 10.25% Sr Note 6-15-2007...... B 1,032,653 970,000
125,000 Windmere-Durable Holdings, 10.00% Sr Sub Note
7-31-2008.................................. B- 125,000 116,875
------------ ------------
2,415,065 2,343,125
------------ ------------
DIVERSIFIED COMPANIES-1.18%
1,000,000 Fage Dairy Industries S.A., 9.00% Sr Note
2-1-2007................................... BB 968,323 840,000
------------ ------------
ELECTRICAL-COMPONENTS AND PARTS-0.71%
500,000 Wesco Distribution, Inc., 9.125% Sr Sub Note
6-1-2008................................... B 498,436 500,000
------------ ------------
ENERGY-2.59%
1,000,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 997,719 925,000
500,000 Gulfmark Offshore, 8.75% Sr Note 6-1-2008.... BB- 498,407 455,000
500,000 KCS Energy, Inc., 11.00% Sr Note 1-15-2003... B 544,979 460,000
------------ ------------
2,041,105 1,840,000
------------ ------------
ENERGY & RELATED-0.74%
500,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 504,531 527,500
------------ ------------
FOOD-MISCELLANEOUS-1.98%
750,000 Agrilink Foods, Inc., 11.875% Sr Sub Note
11-1-2008.................................. B 750,000 763,125
172,000 Envirodyne Industries, Inc., 12.00% First
Priority Sr Secured Note 6-15-2000......... B+ 180,205 172,000
500,000 Fresh Foods, Inc., 10.75% Sr Note 6-1-2006... B 500,000 470,000
------------ ------------
1,430,205 1,405,125
------------ ------------
FOREIGN-GOVERNMENT-0.55%
500,000 United Mexican States, 6.25% Series W-B
Secured Note 12-31-2019.................... BB 377,387 389,050
------------ ------------
</TABLE>
33
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
FOREST PRODUCTS-1.80%
$ 750,000 Domtar, Inc., 8.75% Note 8-1-2006............ BB+ $ 783,821 $ 772,500
500,000 Stone Container Corp., 9.875% Sr Note
2-1-2001................................... B 507,780 506,250
------------ ------------
1,291,601 1,278,750
------------ ------------
HEALTH CARE SERVICES-2.08%
1,000,000 Quorum Health Group, Inc., 8.75% Sr Sub Note
11-1-2005.................................. BB- 1,039,040 955,000
500,000 Tenet Healthcare Corp., 8.625% Sr Sub Note
1-15-2007.................................. BB- 516,350 522,500
------------ ------------
1,555,390 1,477,500
------------ ------------
LEISURE TIME-AMUSEMENTS-3.57%
1,000,000 Grand Casinos, Inc., 10.125% First Mtg Bond
12-1-2003.................................. BB 1,078,758 1,090,000
1,000,000 Station Casinos, Inc., 10.125% Sr Sub Note
3-15-2006.................................. B+ 966,839 1,047,500
400,000 True Temper Sports, Inc., 10.875% Sr Sub Note
12-1-2008 (e).............................. B- 400,000 398,000
------------ ------------
2,445,597 2,535,500
------------ ------------
MACHINERY-2.13%
500,000 Anthony Crane Rentals, 10.375% Sr Note
8-1-2008 (f)............................... B 500,000 480,000
1,000,000 Clark Material Handling Co., 10.75% Sr Note
11-15-2006................................. B+ 1,025,320 1,030,000
------------ ------------
1,525,320 1,510,000
------------ ------------
MACHINERY-TOOLS-1.58%
1,100,000 Simonds Industries, 10.25% Sr Sub Note
7-1-2008 (f)............................... B- 1,060,098 1,122,000
------------ ------------
MEDICAL SUPPLIES-0.75%
500,000 Maxxim Medical, 10.50% Sr Sub Note
8-1-2006................................... B 547,327 532,500
------------ ------------
MISCELLANEOUS-0.70%
500,000 La Petite Acad/LPA Holdings, 10.00% Sr Note
5-15-2008.................................. B- 500,000 495,000
------------ ------------
PAPER-0.55%
500,000 Plainwell, Inc., 11.00% Sr Sub Note
3-1-2008................................... B- 500,000 390,000
------------ ------------
PRINTING-3.21%
500,000 Day International Group, Inc., 11.125% Sr
Note 6-1-2005.............................. B+ 542,527 527,500
750,000 Mail-Well Corp., 8.75% Sr Sub Note 12-15-2008
(e)........................................ B+ 750,000 750,000
1,000,000 World Color Press, Inc., 8.375% Sr Sub Note
11-15-2008 (e)............................. B- 1,000,000 1,000,000
------------ ------------
2,292,527 2,277,500
------------ ------------
PUBLISHING-2.14%
500,000 Garden State Newspapers, 8.75% Sr Sub Note
10-1-2009.................................. B+ 503,548 500,000
500,000 Primedia, Inc., 10.25% Sr Note 6-1-2004...... BB- 535,444 525,000
500,000 Primedia, Inc., 7.625% Sr Note 4-1-2008...... BB- 497,298 490,000
------------ ------------
1,536,290 1,515,000
------------ ------------
RESTAURANTS AND FRANCHISING-1.15%
500,000 Advantica Restaurant Group, Inc., 11.25% Sr
Note 1-15-2008............................. B 538,824 503,750
300,000 Tricon Global Restaurants, Inc., 7.65% Sr
Note 5-15-2008............................. BB 299,355 313,604
------------ ------------
838,179 817,354
------------ ------------
SHIP BUILDING, SHIPPING-1.49%
1,000,000 Newport News Ship Building, 9.25% Sr Sub Note
12-1-2006.................................. B+ 1,060,281 1,057,500
------------ ------------
STEEL AND IRON-2.05%
1,000,000 Gulf States Steel Corp., 13.50% First Mtg
Bond 4-15-2003............................. CCC+ 1,033,520 315,000
750,000 Weirton Steel Corp., 11.375% Sr Note
7-1-2004................................... B 782,694 675,000
500,000 Wheeling-Pittsburgh Corp., 9.25% Sr Note
11-15-2007................................. BB- 510,670 467,500
------------ ------------
2,326,884 1,457,500
------------ ------------
TELECOMMUNICATIONS-22.91%
250,000 Centennial Cellular, 10.75% Sr Sub Note
12-15-2008 (e)............................. CCC+ 250,000 248,750
1,000,000 Comcast Cellular Holdings, 9.50% Sr Note
5-1-2007................................... BB+ 1,042,204 1,060,000
</TABLE>
34
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
$ 500,000 Globalstar LP/Capital, 11.25% Sr Note
6-15-2004.................................. B $ 514,960 $ 377,500
750,000 Hermes Europe Railtel B.V., 10.375% Sr Sub
Note 1-15-2009 (e)......................... B 750,000 757,500
500,000 Hyperion Telecommunication, 12.25% Sr Note
9-1-2004................................... B+ 535,295 507,500
500,000 Intermedia Communications, Inc., 9.47% Sr
Disc Note 7-15-2007 (Zero Coupon through
7-15-2002, thereafter 11.25%) (g).......... B 389,468 340,000
750,000 Intermedia Communications, Inc., 8.50% Sr
Note 1-15-2008............................. B 777,247 712,500
2,250,000 Iridium LLC/Capital Corp., 14.00% Sr Note
7-15-2005.................................. B- 2,304,426 2,137,500
1,000,000 ITC Deltacom, Inc., 11.00% Sr Note
6-1-2007................................... B 1,125,757 1,070,000
500,000 ITC Deltacom, Inc., 9.75% Sr Note
11-15-2008................................. B 500,000 517,500
2,000,000 Level 3 Communications, Inc., 10.50% Sr Disc
Note 12-1-2008 (Zero coupon through
12-1-2003, thereafter 10.50%) (e) (g)...... B 1,209,484 1,165,000
970,000 McleodUSA, Inc., 9.25% Sr Note 7-15-2007..... B+ 1,042,269 1,013,650
250,000 McleodUSA, Inc., 9.50% Sr Note 11-1-2008
(e)........................................ B+ 250,000 265,000
500,000 Metromedia Fiber Network, Inc., 10.00% Sr
Note 11-15-2008 (e)........................ B 500,000 513,750
1,000,000 Nextel Communications, Inc., 9.90% Sr Disc
Note 9-15-2007 (Zero coupon through
9-15-2002, thereafter 10.65%) (g).......... CCC+ 707,597 637,500
1,750,000 NTL, Inc., 12.38% Sr Note 10-1-2008 (Zero
coupon through 10-1-2003, thereafter
12.375%) (f) (g)........................... B- 989,464 1,095,938
650,000 Omnipoint Corp., 11.625% Sr Note Ser A
8-15-2006.................................. CCC+ 632,720 451,750
1,000,000 Qwest Communications International, 8.29% Sr
Disc Note 2-1-2008 (Zero coupon through
2-1-2003, thereafter 8.29%) (g)............ BB+ 718,721 755,000
1,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 1,059,333 1,055,000
1,250,000 Splitrock Services, Inc., 11.75% Sr Note
7-15-2008.................................. NR 1,237,236 1,081,250
500,000 Verio, Inc., 11.25% Sr Note 12-1-2008 (e).... B- 500,000 502,500
------------ ------------
17,036,181 16,265,088
------------ ------------
TEXTILE MANUFACTURING-4.75%
1,000,000 Anvil Knitwear, Inc., 10.875% Sr Note
3-15-2007.................................. B- 1,019,901 650,000
750,000 Galey & Lord, Inc., 9.125% Sr Sub Note
3-1-2008................................... B 746,458 652,500
1,000,000 Maxim Group, Inc., 9.25% Sr Note
10-15-2007................................. B 989,557 990,000
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,069,619 1,080,000
------------ ------------
3,825,535 3,372,500
------------ ------------
TRANSPORTATION-1.60%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,051,564 1,135,000
------------ ------------
UTILITIES-ELECTRIC-1.43%
1,000,000 AES Corp., 8.50% Sr Sub Note 11-1-2007....... B+ 1,025,640 1,012,500
------------ ------------
UTILITIES-WATER AND SEWER-0.27%
500,000 Cathay International Ltd., 13.00% Sr Note
4-15-2008 (e).............................. B 480,612 190,000
------------ ------------
WASTE DISPOSAL-0.58%
375,000 Norcal Waste Systems, Inc., 13.50% Increasing
Rate Sr Note 11-15-2005.................... BB- 375,000 412,500
------------ ------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 72,991,105 67,171,647
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $74,154,358 $67,439,383
------------ ------------
------------ ------------
</TABLE>
35
<PAGE>
FORTIS SERIES FUND, INC.
HIGH YIELD SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
SHORT-TERM INVESTMENTS-3.78%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-3.17%
$2,247,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 2,247,000
------------
DIVERSIFIED FINANCE-0.61%
434,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 434,000
------------
TOTAL SHORT-TERM INVESTMENTS................. 2,681,000
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$76,835,358) (b)........................... $70,120,383
------------
------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $76,839,132 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,087,904
Unrealized depreciation..................................... (7,806,653)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $(6,718,749)
- -------------------------------------------------------------------------
</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 5.10% of total net assets as of December 31, 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>
Period Acquired Shares/Par Security Cost Basis
- ---------------- ----------- ----------------------------------------------------------- -----------
<S> <C> <C> <C>
1998 250,000 Ackerley Group, Inc. due 2009 - 144A $ 250,000
1995 2,500 American Telecasting, Inc. (Warrants) 5,000
1996 - 1998 3,033,461 Australis Media Ltd. due 2003 2,277,149
1998 500,000 Cathay International Ltd. due 2008 - 144A 480,612
1998 250,000 Centennial Cellular due 2008 - 144A 250,000
1996 3,300 Clearnet Communications, Inc. (Warrants) 42,075
1998 1,000,000 Diamond Triumph Auto due 2008 - 144A 1,019,197
1998 750,000 Hayes Lemmerz International, Inc. due 2008 - 144A 750,000
1998 750,000 Hermes Europe Railtel B.V. due 2009 - 144A 750,000
1998 250 Highwaymaster Communications, Inc. (Warrants) - 144A 2,500
1994 250 Hosiery Corp. of America, Inc. Class A - 144A 4,230
1998 2,000,000 Level 3 Communications, Inc. due 2008 - 144A 1,209,484
1998 750,000 Mail-Well Corp. due 2008 - 144A 750,000
1998 250,000 McleodUSA, Inc. due 2008 - 144A 250,000
1998 500,000 Metromedia Fiber Network, Inc. due 2008 - 144A 500,000
1996 1,500 People's Choice T.V. Corp. (Warrants) 15
1997 2,560 Powertel, Inc. (Warrants) 18,824
1998 400,000 True Temper Sports, Inc. due 2008 - 144A 400,000
1998 500,000 Verio, Inc. due 2008 - 144A 500,000
1996 1,000 Wireless One, Inc. (Warrants) - 144A 7,831
1998 1,000,000 World Color Press, Inc. due 2008 - 144A 1,000,000
</TABLE>
The aggregate value of these securities at December 31, 1998, was
$7,842,575, which represents 11.05% of total net assets.
(f) Securities issued 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 December 31, 1998, was $8,264,188, which represents
11.64% 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
December 31, 1998
COMMON STOCKS-57.12%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
AUSTRALIA-0.44%
125,400 CSR Limited -- BUILDING MATERIALS............ $ 347,548 $ 306,912
------------ ------------
BELGIUM-0.99%
2,700 Delhaize-Le Lion
S.A. -- RETAIL-MISCELLANEOUS............... 153,029 238,926
8,496 G.I.B. Group S.A. -- RETAIL-MISCELLANEOUS.... 411,529 445,156
------------ ------------
564,558 684,082
------------ ------------
BERMUDA-0.38%
10,300 Terra Nova (Burmuda) Holdings -- INSURANCE... 202,333 260,075
------------ ------------
CANADA-1.48%
7,030 Potash Corp. of Saskatchewan -- CHEMICALS.... 493,993 450,817
27,035 Telus Corp. -- TELEPHONE SERVICES............ 586,138 572,030
------------ ------------
1,080,131 1,022,847
------------ ------------
DENMARK-0.02%
255 Danisco A/S -- DIVERSIFIED COMPANIES......... 13,518 13,823
------------ ------------
FINLAND-0.90%
10,500 Pohjola Group Insurance Corp.
"B" -- MISCELLANEOUS....................... 354,770 576,490
3,245 Valmet OYJ -- MACHINERY...................... 41,975 43,579
------------ ------------
396,745 620,069
------------ ------------
FRANCE-3.87%
720 Bongrain S.A. -- FOOD........................ 345,692 322,223
5,033 Elf Aquitaine S.A. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 514,413 582,027
2,300 France Telecom S.A. -- TELECOMMUNICATIONS.... 72,517 182,808
2,880 Groupe Danone -- FOOD........................ 667,637 824,890
5,010 Michelin (C.G.D.E.) Class B -- RUBBER AND
PLASTIC.................................... 239,751 200,447
8,450 Scor S.A. -- INSURANCE....................... 494,535 558,926
------------ ------------
2,334,545 2,671,321
------------ ------------
GERMANY-3.44%
16,680 Basf AG -- CHEMICALS......................... 579,047 636,416
10,130 Bayer AG -- CHEMICALS........................ 353,720 425,428
660 Karstadt AG -- RETAIL-DEPARTMENT STORES...... 255,306 345,533
11,350 Veba AG -- UTILITIES-ELECTRIC................ 592,232 672,577
250 Viag AG -- ELECTRIC-PRODUCTS................. 102,693 147,845
1,800 Volkswagen AG -- AUTOMOBILE MANUFACTURERS.... 60,621 145,677
------------ ------------
1,943,619 2,373,476
------------ ------------
IRELAND-1.68%
29,640 Bank of Ireland -- BANKS..................... 403,692 649,479
23,700 Clondalkin Group Units plc -- CONTAINERS AND
PACKAGING.................................. 205,365 169,616
60,388 Green Property plc -- REAL ESTATE............ 194,211 342,146
------------ ------------
803,268 1,161,241
------------ ------------
ITALY-1.89%
54,800 Mediaset S.p.A. -- BROADCASTING.............. 265,729 445,328
136,693 Telecom Italia S.p.A -- TELEPHONE SERVICES... 554,592 862,133
------------ ------------
820,321 1,307,461
------------ ------------
JAPAN-4.55%
14,000 Fuji Photo Film -- PHOTOGRAPHIC.............. 438,495 521,277
18,000 Fujisawa Pharmaceutical Co. -- DRUGS......... 156,210 255,319
38,000 Hitachi Ltd. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 242,700 235,816
23 Japan Tobacco, Inc. -- TOBACCO............... 181,945 230,408
33,000 Kao Corp. -- HOUSEHOLD PRODUCTS.............. 485,088 746,011
20,000 Matsushita Electric Industrial Co.
Ltd. -- ELECTRIC-PRODUCTS.................. 308,598 354,433
40,000 Nichido Fire & Marine
Insurance -- INSURANCE..................... 311,613 196,809
54 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 407,566 417,447
</TABLE>
37
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
2,000 TDK Corp. -- ELECTRONIC COMPONENTS........... $ 124,872 $ 183,156
------------ ------------
2,657,087 3,140,676
------------ ------------
NETHERLANDS-2.30%
18,672 ABN-AMRO Holding NV -- BANKS................. 207,424 393,000
3,650 Benckiser NV Class B -- MISCELLANEOUS........ 123,179 239,223
10,828 ING Groep NV -- INSURANCE.................... 316,828 660,631
4,450 Koninklijke Philips Electronics
NV -- ELECTRIC-PRODUCTS.................... 187,543 298,769
------------ ------------
834,974 1,591,623
------------ ------------
NEW ZEALAND-0.44%
120,400 Lion Nathan Ltd. -- BUILDING MATERIALS....... 280,889 307,223
------------ ------------
PORTUGAL-0.47%
10,240 Cimpor Cimentos De Portugal -- BUILDING
MATERIALS.................................. 277,199 326,875
------------ ------------
SPAIN-1.77%
32,800 Iberdrola S.A. -- UTILITIES-ELECTRIC......... 346,440 614,585
13,635 Telefonica S.A. -- TELECOMMUNICATIONS........ 285,602 607,211
------------ ------------
632,042 1,221,796
------------ ------------
SWEDEN-0.90%
76,900 Nordbanken Holding AB -- BANKS............... 372,584 493,326
8,200 Skandia Forsakrings AB -- INSURANCE.......... 87,414 125,441
------------ ------------
459,998 618,767
------------ ------------
SWITZERLAND-6.10%
135 Ascom Holding AG -- TELECOMMUNICATIONS....... 135,243 211,321
65 Bobst S.A. -- MACHINERY...................... 79,455 80,451
815 Compagnie Financiere Richemont
AG -- TOBACCO.............................. 1,104,457 1,152,333
690 Forbo Holding AG -- HOUSEHOLD PRODUCTS....... 288,071 301,420
415 Holderbank Financiere Glaris AG -- BUILDING
MATERIALS.................................. 335,929 491,292
589 Nestle S.A. Registered -- FOOD............... 912,968 1,282,206
360 SIG Schweizerische Industrie-Gesellschaft
Holding AG -- MACHINERY.................... 241,526 212,304
1,160 Swisscom AG -- TELEPHONE SERVICES............ 293,212 485,621
------------ ------------
3,390,861 4,216,948
------------ ------------
UNITED KINGDOM-5.49%
6,300 Allied Domecq plc -- RETAIL-DEPARTMENT
STORES..................................... 57,789 57,284
21,700 Blue Circle Industries plc -- BUILDING
MATERIALS.................................. 111,661 125,282
103,481 BTR plc -- MISCELLANEOUS..................... 284,049 211,772
27,970 Burmah Castrol plc -- OIL-CRUDE PETROLEUM AND
GAS........................................ 423,009 401,842
40,200 Imperial Tobacco Group plc -- TOBACCO........ 253,557 431,407
50,000 Matthews (Bernard) plc -- FOOD............... 74,479 97,748
33,800 Premier Farnell plc -- ELECTRONIC
COMPONENTS................................. 257,505 89,135
61,767 Reckitt & Colman plc -- HOUSEHOLD PRODUCTS... 770,429 815,970
48,834 Royal & Sun Alliance Insurance Group
plc -- INSURANCE........................... 415,759 395,281
131,350 WPP Group plc -- ADVERTISING-PUBLIC
RELATIONS.................................. 518,801 795,486
------------ ------------
3,571,040 3,792,477
------------ ------------
UNITED STATES-20.01%
4,200 Albertson's, Inc. -- RETAIL-GROCERY.......... 143,308 267,487
5,380 Aluminum Company of
America -- METALS-FABRICATING.............. 287,643 401,146
29,400 American Stores Co. -- FOOD.................. 723,781 1,085,962
13,100 BJ's Wholesale Club, Inc.
(a) -- RETAIL-MISCELLANEOUS................ 234,659 606,694
16,450 Boise Cascade Corp -- PAPER.................. 447,038 509,950
10,900 Borg-Warner Automotive, Inc. -- AUTOMOBILE
AND MOTOR VEHICLE PARTS.................... 426,178 608,356
35,110 Cadiz, Inc. -- LAND DEVELOPMENT.............. 302,647 267,714
9,500 Chase Manhattan Corp. -- BANKS............... 498,894 646,594
24,130 Comsat Corp. -- TELECOMMUNICATIONS........... 472,433 868,680
27,150 Data General Corp.
(a) -- COMPUTER-SOFTWARE................... 385,841 446,278
18,200 Enhance Financial Services Group,
Inc. -- INSURANCE.......................... 203,568 546,000
</TABLE>
38
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------ ------------
<C> <S> <C> <C>
11,600 Finova Group, Inc. -- FINANCIAL SERVICES..... $ 301,775 $ 625,675
20,500 GenRad, Inc. (a) -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 197,217 322,875
5,350 Georgia-Pacific (Timber Group) -- FOREST
PRODUCTS................................... 288,622 313,309
7,800 Goodrich (B.F.) Co. -- CHEMICALS-SPECIALTY... 335,915 279,825
17,100 Houghton Mifflin Co. -- PUBLISHING........... 457,588 807,975
8,600 IBP, Inc. -- FOOD............................ 197,076 250,475
39,300 Intelidata Technologies Corp.
(a) -- TELECOMMUNICATIONS.................. 311,431 51,581
12,800 MBIA, Inc. -- INSURANCE...................... 599,030 839,200
6,200 Mellon Bank Corp. -- BANKS................... 170,099 426,250
15,360 Noble Drilling Corp. (a) -- OIL-OFFSORE
DRILLING................................... 205,906 198,720
26,480 Ocean Energy, Inc. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 385,488 167,155
19,000 Penncorp Financial Group, Inc. -- FINANCIAL
SERVICES................................... 626,598 19,000
7,550 Pharmacia and Upjohn, Inc. -- DRUGS.......... 253,548 427,519
26,350 Philip Morris Companies, Inc. -- TOBACCO..... 1,141,628 1,409,725
10,700 Tenneco, Inc. (with rights) -- AUTOMOBILE AND
MOTOR VEHICLE PARTS........................ 444,828 364,469
12,100 Tupperware Corp. (a) -- HOUSEHOLD PRODUCTS... 317,742 198,894
10,600 Unicom Corp. -- UTILITIES-ELECTRIC........... 377,563 408,763
19,400 UST Corp. -- BANKS........................... 290,001 457,112
15,200 WorldCorp, Inc. (a) -- AIRLINES.............. 138,291 2,280
------------ ------------
11,166,336 13,825,663
------------ ------------
TOTAL COMMON STOCKS.......................... $31,777,012 $39,463,355
------------ ------------
------------ ------------
</TABLE>
PREFERRED STOCKS-0.39%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
GERMANY-0.39%
5,400 Volkswagen AG Preferred -- AUTOMOBILE
MANUFACTURERS.............................. $ 198,620 $ 269,092
------------ ------------
</TABLE>
BONDS-INVESTMENT GRADE-24.44%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
Principal & Poor's Market
Amount (f) Rating Cost (b)(f) Value (c)(f)
--------------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
CANADA-1.75%
$ 800,000 Canadian Government (Canadian Dollar), 5.25%
9-1-2003................................... Aa1* $ 529,922 $ 531,667
210,000 Canadian Government (Canadian Dollar), 8.00%
6-1-2023................................... AAA 177,098 188,740
610,000 Canadian Government (Canadian Dollar), 8.75%
12-1-2005.................................. AAA 500,331 486,717
------------ ------------
1,207,351 1,207,124
------------ ------------
DENMARK-0.67%
2,550,000 Kingdom of Denmark (Danish Krone), 7.00%
12-15-2004................................. AAA 404,678 462,411
------------ ------------
GERMANY-10.78%
1,850,000 Bundesrepublik Deutschland (German
Deutschemark), 6.25% 1-4-2024.............. Aaa* 1,137,027 1,336,992
2,000,000 Bundesrepublik Deutschland (German
Deutschemark), 6.50% 10-14-2005............ NR 1,393,977 1,398,175
1,150,000 Bundesrepublik Deutschland (German
Deutschemark), 6.50% 7-4-2027.............. NR 850,757 866,159
2,100,000 Bundesrepublik Deutschland (German
Deutschemark), 8.375% 5-21-2001............ Aaa* 1,353,201 1,408,543
260,000 Deutsche Ausgleichsbank (US Dollar), 5.125%
9-22-2003.................................. AAA 259,731 260,598
200,000 Deutsche Bundesbahn (German Deutschemark),
8.00% 7-1-2002............................. NR 125,706 137,867
1,800,000 German Government (German Deutschemark),
6.50% 7-15-2003............................ Aaa* 1,151,582 1,218,504
780,000 German Unity Fund (German Deutschemark),
8.00% 1-21-2002............................ NR 556,454 529,868
450,000 Kredit Fuer Wiederaufbau (German
Deutschemark), 5.00% 1-4-2009.............. AAA 276,037 288,878
------------ ------------
7,104,472 7,445,584
------------ ------------
</TABLE>
39
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
Principal & Poor's Market
Amount (f) Rating Cost (b)(f) Value (c)(f)
--------------- ------------- ------------ ------------
<C> <S> <C> <C> <C>
ITALY-2.56%
$ 1,400,000,000 Italian Government BTP (Italian Lira), 9.50%
2-1-2006................................... AAA $ 953,245 $ 1,154,626
790,000,000 Italian Government (Italian Lira), 10.00%
8-1-2003................................... AAA 520,089 610,630
------------ ------------
1,473,334 1,765,256
------------ ------------
JAPAN-1.47%
43,000,000 Int'l Bank Reconstruction & Development
(Japanese Yen), 4.75% 12-20-2004........... AAA 422,597 447,726
56,000,000 Japan Development Bank (Japanese Yen), 6.50%
9-20-2001.................................. AAA 600,851 567,980
------------ ------------
1,023,448 1,015,706
------------ ------------
NEW ZEALAND-0.68%
800,000 New Zealand Government, 8.00% (New Zealand
Dollar) 4-15-2004.......................... AAA 474,006 472,466
------------ ------------
SPAIN-0.20%
130,000 Instituto De Credito Oficial (US Dollar),
6.00% 5-19-2008............................ AA 130,518 135,660
------------ ------------
SWEDEN-0.63%
3,200,000 Swedish Government (Swedish Krona), 6.00%
2-9-2005................................... Aa1* 406,114 438,696
------------ ------------
UNITED KINGDOM-4.09%
130,000 Halifax plc (US Dollar), 6.00% 2-26-2008..... AA 129,242 133,459
230,000 Scottish Power plc (German Deutschemark),
5.25% 8-4-2008............................. A+ 128,569 142,921
150,000 United Kingdom Treasury (British Pound),
8.00% 6-10-2003............................ Aaa* 263,302 284,684
840,000 United Kingdom Treasury (British Pound),
8.50% 7-16-2007............................ Aaa* 1,652,459 1,791,712
200,000 United Kingdom Treasury (British Pound),
9.00% 7-12-2011............................ Aaa* 453,309 476,246
------------ ------------
2,626,881 2,829,022
------------ ------------
UNITED STATES-1.61%
150,000 Associates Corp. NA, 6.00% 7-15-2005......... AA- 149,626 152,413
230,000 Citicorp, 5.50% 6-30-2010.................... A+ 127,582 144,648
130,000 General Electric Capital Corp., 8.125%
2-23-2007.................................. AAA 147,015 150,800
80,000 General Motors, 6.75% 5-1-2028............... A 79,904 83,494
100,000 Household Finance Corp., 6.375% 8-1-2010..... A 98,752 102,640
120,000 Merrill Lynch & Co., 6.875% 11-15-2018....... AA- 119,412 124,905
100,000 Met Life Insurance, 7.45% Note 11-1-2023
(e)........................................ A+ 101,369 103,565
150,000 Monsanto Co., 6.60% 12-1-2028 (e)............ A 149,460 149,723
100,000 Nationwide Mutual Insurance, 7.50% Note
2-15-2024 (e).............................. A+ 101,936 99,471
------------ ------------
1,075,056 1,111,659
------------ ------------
TOTAL BONDS - INVESTMENT GRADE............... $15,925,858 $16,883,584
------------ ------------
------------ ------------
</TABLE>
U.S. GOVERNMENT SECURITIES-10.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
------------ ------------ ------------
<C> <S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION-0.97%
NOTES:
$ 650,000 5.75% 2003................................... $ 652,553 $ 668,070
------------ ------------
OTHER DIRECT FEDERAL OBLIGATIONS - 0.26%
TENNESSEE VALLEY AUTHORITY:
180,000 5.375% 2008.................................. 179,252 180,682
------------ ------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-1.95%
NOTES:
50,000,000 2.00% 1999 (Japanese Yen).................... 351,560 450,188
250,000 6.50% 2002 (Australian Dollar)............... 184,219 161,516
650,000 5.75% 2005................................... 650,875 673,836
</TABLE>
40
<PAGE>
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
------------ ------------ ------------
<C> <S> <C> <C>
$ 100,000 6.375% 2007 (Australian Dollar).............. $ 64,392 $ 64,052
------------ ------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 1,251,046 1,349,592
------------ ------------
U.S. TREASURY SECURITIES-7.78%
BONDS:
1,470,000 6.25% 2023................................... 1,613,852 1,644,563
850,000 8.125% 2019.................................. 1,050,290 1,136,610
------------ ------------
2,664,142 2,781,173
NOTES:
700,000 3.625% 2008.................................. 695,906 686,219
150,000 7.50% 2005................................... 164,878 171,703
1,500,000 7.875% 2004.................................. 1,720,954 1,737,657
------------ ------------
TOTAL U.S. TREASURY SECURITIES............... 5,245,880 5,376,752
------------ ------------
TOTAL U.S. GOVERNMENT SECURITIES............. 7,328,731 7,575,096
------------ ------------
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $55,230,221 $64,191,127
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-5.32%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-5.32%
$3,672,934 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 3,672,934
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$58,903,155) (b)........................... $67,864,061
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $58,903,155 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $11,252,805
Unrealized depreciation..................................... (2,291,899)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 8,960,906
- -------------------------------------------------------------------------
</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 -
144A $ 101,369
1998 150,000 Monsanto Co., 6.60% 12-1-2028 - 144A 149,460
1998 100,000 Nationwide Mutual Insurance, 7.50%
2-15-2024 - 144A 101,936
The aggregate value of these securities at December 31, 1998, was $352,759, which represents .51% 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
December 31, 1998
COMMON STOCKS-64.96%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-1.40%
104,200 Interpublic Group of Companies, Inc.......... $ 5,250,932 $ 8,309,950
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.28%
250 Highwaymaster Communications, Inc. (Warrants)
(a)(e)..................................... 4,547 22
27,000 Magna International, Inc. Class A............ 1,289,673 1,674,000
------------- -------------
1,294,220 1,674,022
------------- -------------
BANKS -- 1.50%
63,000 Bank One Corp................................ 2,294,316 3,216,937
11,700 Firstar Corp................................. 991,435 1,091,025
67,000 Mellon Bank Corp............................. 4,502,735 4,606,250
------------- -------------
7,788,486 8,914,212
------------- -------------
BEVERAGE-0.62%
90,000 PepsiCo, Inc................................. 3,679,425 3,684,375
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-2.21%
68,000 Amgen, Inc. (a).............................. 4,275,714 7,110,250
40,000 Centocor, Inc. (a)........................... 1,649,351 1,805,000
25,000 Genentech, Inc. (a).......................... 1,920,742 1,992,187
45,000 Genzyme Corp. (a)............................ 1,669,552 2,238,750
------------- -------------
9,515,359 13,146,187
------------- -------------
BROADCASTING-2.73%
50,000 Comcast Corp. Special Class A................ 2,676,166 2,934,375
92,000 Fox Entertainment Group, Inc................. 2,125,237 2,317,250
90,000 Tele-Communications, Inc. (a)................ 3,398,076 4,978,125
81,000 Viacom, Inc. Class B (a)..................... 4,251,408 5,994,000
------------- -------------
12,450,887 16,223,750
------------- -------------
BUILDING MATERIALS-0.98%
203,000 Masco Corp................................... 5,578,523 5,836,250
------------- -------------
BUSINESS SERVICES AND SUPPLIES-1.87%
61,000 Computer Sciences Corp. (a).................. 3,181,767 3,930,687
139,950 Fiserv, Inc. (a)............................. 3,711,764 7,198,678
------------- -------------
6,893,531 11,129,365
------------- -------------
CHEMICALS-0.50%
62,000 Monsanto Co.................................. 2,762,776 2,945,000
------------- -------------
CHEMICALS-SPECIALTY-0.48%
70,000 Minerals Technologies, Inc................... 3,303,691 2,865,625
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-3.78%
52,500 3Com Corp. (a)............................... 1,550,393 2,352,656
63,000 Cisco Systems, Inc. (a)...................... 1,418,040 5,847,187
92,000 Sun Microsystems, Inc. (a)................... 4,396,686 7,877,500
185,000 Unisys Corp. (a)............................. 4,444,589 6,370,937
------------- -------------
11,809,708 22,448,280
------------- -------------
COMPUTER-SOFTWARE-3.88%
58,000 America Online, Inc. (a)..................... 1,818,671 8,395,500
20,000 Citrix Systems, Inc. (a)..................... 1,399,375 1,941,250
<CAPTION>
Market
Shares Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
32,000 Intuit, Inc. (a)............................. $ 2,059,886 $ 2,320,000
75,000 Microsoft Corp. (a).......................... 2,318,035 10,401,562
------------- -------------
7,595,967 23,058,312
------------- -------------
CONSUMER GOODS-0.72%
46,000 Colgate-Palmolive Co......................... 4,041,806 4,272,250
------------- -------------
DIVERSIFIED COMPANIES-0.30%
25,000 Minnesota Mining and Manufacturing Co........ 2,035,537 1,778,125
------------- -------------
DRUGS-6.66%
131,000 Abbott Laboratories.......................... 4,096,210 6,419,000
115,000 Forest Laboratories, Inc. (a)................ 2,913,158 6,116,562
22,000 Johnson & Johnson............................ 1,613,227 1,845,250
62,000 Lilly (Eli) & Co. (with rights).............. 3,297,976 5,510,250
155,000 Mylan Laboratories, Inc...................... 3,648,477 4,882,500
24,000 Pfizer, Inc.................................. 2,304,209 3,010,500
115,000 Pharmacia and Upjohn, Inc.................... 5,649,211 6,511,875
70,000 Warner-Lambert Co............................ 3,123,516 5,263,125
------------- -------------
26,645,984 39,559,062
------------- -------------
ELECTRICAL EQUIPMENT-1.36%
79,000 General Electric Co.......................... 4,480,567 8,062,937
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.86%
60,000 Texas Instruments, Inc....................... 3,329,634 5,133,750
------------- -------------
FINANCIAL SERVICES-1.44%
96,000 Fannie Mae................................... 3,894,416 7,104,000
36,000 MGIC Investment Corp......................... 1,230,012 1,433,250
------------- -------------
5,124,428 8,537,250
------------- -------------
FOOD-1.83%
135,000 Groupe Danone ADR............................ 4,185,000 7,593,750
55,000 Quaker Oats Co............................... 3,366,026 3,272,500
------------- -------------
7,551,026 10,866,250
------------- -------------
HOTEL AND GAMING-1.29%
168,100 Sun International Hotels Ltd. (a)............ 7,229,431 7,638,044
------------- -------------
HOUSEHOLD PRODUCTS-0.49%
25,000 Clorox Co.................................... 2,395,227 2,920,312
------------- -------------
INSURANCE-2.51%
106,000 American International Group, Inc. 4,969,856 10,242,250
80,500 Hartford Life, Inc. Class A.................. 2,857,963 4,689,125
------------- -------------
7,827,819 14,931,375
------------- -------------
MACHINERY-0.53%
124,000 Pall Corp.................................... 2,737,800 3,138,750
------------- -------------
MEDIA-0.27%
58,000 Infinity Broadcasting Corp. (a).............. 1,189,000 1,587,750
------------- -------------
MEDICAL SUPPLIES-0.68%
40,000 ALZA Corp. (a)............................... 1,766,190 2,090,000
30,000 Baxter International, Inc.................... 1,767,956 1,929,375
------------- -------------
3,534,146 4,019,375
------------- -------------
MEDICAL TECHNOLOGY-0.89%
71,000 Medtronic, Inc. (with rights)................ 1,755,812 5,271,750
------------- -------------
</TABLE>
42
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
NATURAL GAS TRANSMISSIONS-1.14%
68,000 Enron Corp................................... $ 3,592,035 $ 3,880,250
92,900 Williams Companies, Inc...................... 2,929,221 2,897,319
------------- -------------
6,521,256 6,777,569
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-1.34%
46,000 EMC Corp. (a)................................ 2,125,046 3,910,000
22,000 International Business Machines Corp......... 3,897,471 4,064,500
------------- -------------
6,022,517 7,974,500
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-2.03%
44,000 Chevron Corp................................. 3,750,336 3,649,250
54,000 Exxon Corp................................... 3,942,007 3,948,750
93,000 Royal Dutch Petroleum Co. NY Shares.......... 4,468,845 4,452,375
------------- -------------
12,161,188 12,050,375
------------- -------------
OIL-REFINING-0.57%
52,000 Atlantic Richfield Co........................ 3,626,251 3,393,000
------------- -------------
PERSONAL SERVICES-0.24%
37,000 Service Corp. International.................. 1,426,010 1,408,313
------------- -------------
PHOTOGRAPHIC-0.45%
37,000 Eastman Kodak Co............................. 3,100,685 2,664,000
------------- -------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.31%
19,000 Perkin-Elmer Corp............................ 1,856,216 1,853,688
------------- -------------
PUBLISHING-2.64%
53,000 New York Times Co. Class A................... 1,869,840 1,838,438
125,000 Reader's Digest Association, Inc. Class A.... 3,519,550 3,148,438
172,000 Time Warner, Inc............................. 4,513,824 10,674,750
------------- -------------
9,903,214 15,661,626
------------- -------------
RESTAURANTS AND FRANCHISING-0.79%
61,200 McDonald's Corp.............................. 3,697,131 4,689,450
------------- -------------
RETAIL-DEPARTMENT STORES-0.74%
71,000 Kohl's Corp. (a)............................. 694,721 4,362,063
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
RETAIL-DISCOUNT STORES-1.54%
40,000 Costco Companies, Inc. (a)................... $ 642,250 $ 2,887,500
77,000 Wal-Mart Stores, Inc......................... 4,037,709 6,270,688
------------- -------------
4,679,959 9,158,188
------------- -------------
RETAIL-GROCERY-0.66%
65,000 Kroger Co. (a)............................... 3,447,756 3,932,500
------------- -------------
RETAIL-SPECIALTY-2.77%
124,000 Home Depot, Inc.............................. 2,241,571 7,587,250
40,000 Rite Aid Corp................................ 1,861,376 1,982,500
39,000 Tiffany & Co................................. 1,873,836 2,023,125
83,000 Walgreen Co.................................. 2,712,202 4,860,688
------------- -------------
8,688,985 16,453,563
------------- -------------
TELECOMMUNICATIONS-0.02%
1,000 Hyperion Telecom
(Warrants) (a)(e).......................... 4,022 100,000
------------- -------------
TELEPHONE SERVICES-5.58%
61,500 AirTouch Communications, Inc. (a) 1,709,926 4,435,688
30,000 ALLTEL Corp.................................. 1,494,696 1,794,375
78,000 AT & T Corp.................................. 5,156,991 5,869,500
33,000 Bell Atlantic Corp........................... 1,626,662 1,874,813
205,000 Frontier Corp................................ 5,940,511 6,970,000
116,000 MCI WorldCom, Inc. (a)....................... 3,253,333 8,323,000
150,000 Vanguard Cellular Systems, Inc. Class A
(a)........................................ 3,446,472 3,871,875
------------- -------------
22,628,591 33,139,251
------------- -------------
TOBACCO-1.84%
158,000 Philip Morris Companies, Inc................. 5,852,248 8,453,000
70,000 Universal Corp............................... 2,533,392 2,458,750
------------- -------------
8,385,640 10,911,750
------------- -------------
UTILITIES-ELECTRIC-1.81%
126,000 AES Corp. (a)................................ 3,257,538 5,969,250
176,000 Endesa S.A. ADR.............................. 3,963,168 4,752,000
------------- -------------
7,220,706 10,721,250
------------- -------------
WASTE DISPOSAL-0.43%
55,000 Waste Management, Inc........................ 2,122,432 2,564,375
------------- -------------
TOTAL COMMON STOCKS.......................... $ 263,989,002 $ 385,767,769
------------- -------------
------------- -------------
</TABLE>
ASSET BACKED SECURITIES-6.95%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
COMMERCIAL LOANS-3.52%
$ 1,639,651 DLJ Mortgage Acceptance Corp., 7.28% Ser
1996-CF1 Class A-1A 3-13-2028 (e).......... AAA $ 1,651,658 $ 1,709,910
2,500,000 First Union-Lehman Brothers Commercial
Mortgage, 7.30% Ser 1997-C1 Class A2
12-18-2006................................. Aaa* 2,523,007 2,694,000
2,510,000 GMAC Commercial Mortgage Securities, Inc.,
7.085% Ser 1997-C1 Class E 12-15-2010...... A 2,521,697 2,492,882
2,073,036 GS Mortgage Securities Corp. II Protective
Life, 7.02% Ser 1996-PL Class A1
3-1-2026................................... Aaa* 2,038,210 2,195,159
1,035,487 J.P. Morgan Commercial Mortgage Finance
Corp., 6.47% Ser 1996-C2 Class A
11-25-2027................................. AAA 1,042,773 1,055,400
860,000 J.P. Morgan Commercial Mortgage Finance
Corp., 7.472% Ser 1997-C4 Class B
12-26-2028................................. Aa2* 866,348 924,104
1,065,276 Merrill Lynch Mortgage Investors, Inc., 6.76%
Variable Rate Ser 1995-C3 Class A1
12-26-2025................................. AAA 1,075,391 1,092,610
</TABLE>
43
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
ASSET BACKED SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
$ 532,581 Merrill Lynch Mortgage Investors, Inc.,
6.815% Variable Rate Ser 1995-C2 Class A1
6-15-2021.................................. Aaa* $ 540,168 $ 547,908
1,600,000 Merrill Lynch Mortgage Investors, Inc., 7.42%
Ser 1996-C1 Class B 4-25-2028.............. AA 1,602,442 1,704,304
1,200,000 Midland Realty Acceptance Corp., 7.76% Ser
1996-C1 Class B 7-25-2008.................. AA 1,210,453 1,318,812
1,000,000 Mortgage Capital Funding, Inc., 7.90% Ser
1996-MC1 Class B 2-15-2006................. AA+ 1,008,335 1,093,140
1,870,000 Nationslink Funding Corp., 7.52% Ser 1996-1
Class A2 7-20-2005......................... AAA 1,871,831 1,996,319
1,994,337 Nationslink Funding Corp., 7.53% Ser 1996-1
Class A1 9-20-2002......................... AAA 2,000,173 2,088,928
------------- -------------
19,952,486 20,913,476
------------- -------------
HOUSING-0.65%
739,458 Green Tree Recreational, Equipment & Consumer
Trust, 6.71% Ser 1998-A Class A1H
5-15-2029.................................. AAA 736,362 764,238
500,000 Money Store Home Improvement Trust, 7.41% Ser
1997-1 Class M1 5-15-2017.................. AA 501,960 521,796
2,500,000 Money Store Residential Trust, 7.09%
1997-I-M1 7-15-2016........................ AA 2,499,622 2,575,970
------------- -------------
3,737,944 3,862,004
------------- -------------
MANUFACTURED HOMES-0.96%
1,500,000 Green Tree Financial Corp., 7.54% Ser 1997-2
Class M1 4-15-2028......................... Aa3* 1,542,562 1,548,425
4,000,000 Green Tree Financial Corp., 7.65% Ser 1994-1
Class A5 4-15-2019......................... Aa2* 4,070,313 4,156,304
------------- -------------
5,612,875 5,704,729
------------- -------------
MISCELLANEOUS-0.04%
228,490 Fifth Third Auto Grantor Trust, 6.70% Ser
1996-B Class B 3-15-2002................... A 228,389 230,586
------------- -------------
MULTI-FAMILY LOANS-1.45%
1,500,000 DLJ Mortgage Acceptance Corp., 7.14%
Multifamily Mtg Pass Thru Certificate Ser
1997-CF2 Class B1 10-15-2007 (e)........... BBB 1,513,889 1,493,355
4,851,000 DLJ Mortgage Acceptance Corp., 8.50%
Multifamily Mtg Pass Thru Certificate Ser
1994-MF4 Class A2 4-18-2001................ A 4,900,802 4,959,614
1,500,000 DLJ Mortgage Acceptance Corp., 8.80%
Multifamily Mtg Pass Thru Certificate Ser
1993-12 Class B1 9-18-2003................. NR 1,473,750 1,531,695
738,852 Fund America Structured Transactions, L.P.,
Collateralized Note, 8.34% Ser 1996-1 Class
A Principal Only 1-1-2033 (f)(h)........... Baa3* 552,868 591,082
------------- -------------
8,441,309 8,575,746
------------- -------------
WHOLE LOAN RESIDENTIAL-0.33%
1,079,105 Blackrock Capital Funding L.L.C., 7.75% 97-R1
Class A1 3-25-2037 (e)..................... Aaa* 1,088,980 1,080,117
866,398 Mid-State Trust, 7.54% Ser 6 Class A3
7-1-2035................................... AA 865,861 891,402
------------- -------------
1,954,841 1,971,519
------------- -------------
TOTAL ASSET BACKED SECURITIES................ $ 39,927,844 $ 41,258,060
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-10.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
AEROSPACE AND EQUIPMENT-0.54%
$ 1,500,000 Lockheed Martin Corp., 7.65% Deb 5-1-2016.... BBB+ $ 1,508,331 $ 1,681,098
1,500,000 Raytheon Co., 5.70%, 11-1-2003............... BBB 1,506,407 1,501,173
------------- -------------
3,014,738 3,182,271
------------- -------------
AIR FREIGHT-0.26%
1,476,723 Federal Express, 7.50% Pass Thru Certificate
Ser 1997-A 1-15-2018....................... AAA 1,476,723 1,573,330
------------- -------------
BANKS-0.93%
1,500,000 Bank Austria AG, 7.25% Sub Note 2-15-2017
(f)........................................ AA+ 1,497,280 1,532,757
1,350,000 CoreStates Capital Corp., 6.75% Medium Term
Note 11-15-2006............................ A 1,359,046 1,410,557
1,000,000 Mellon Financial, 5.75% 11-15-2003........... A+ 998,193 1,005,857
</TABLE>
44
<PAGE>
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
$ 1,500,000 St. Paul Bancorp, Inc., 7.125% Sr Note
2-15-2004.................................. BBB- $ 1,494,601 $ 1,567,266
------------- -------------
5,349,120 5,516,437
------------- -------------
BROKERAGE AND INVESTMENT-0.87%
1,500,000 Bear Stearns Capital Trust I, 7.00% Variable
Rate Bond 1-15-2027........................ BBB 1,499,148 1,504,798
2,250,000 Lehman Brothers Holdings, Inc., 7.375% Sr
Note 5-15-2004............................. A 2,242,818 2,336,782
1,250,000 Salomon, Inc., 6.875% Sr Note 12-15-2003..... A 1,288,695 1,299,856
------------- -------------
5,030,661 5,141,436
------------- -------------
CABLE TELEVISION-0.60%
1,250,000 Comcast Cable Communications, 8.375%
5-1-2007................................... BBB- 1,416,537 1,446,779
1,000,000 Cox Communications, Inc., 6.40% 8-1-2008..... A- 1,025,047 1,047,226
1,000,000 Viacom, Inc., 7.75% 6-1-2005................. BBB- 1,068,933 1,091,919
------------- -------------
3,510,517 3,585,924
------------- -------------
CAPTIVE AUTO FINANCE-0.13%
750,000 Toyota Motor Credit, 5.625% Note
11-13-2003................................. AAA 748,806 753,620
------------- -------------
CHEMICALS-0.15%
1,000,000 Equistar Chemical, 7.55% 2-15-2026........... BBB- 940,690 910,420
------------- -------------
CONSUMER FINANCE-0.17%
1,000,000 Beneficial Corp., 6.33% Medium Term Note
12-18-2000................................. A 994,660 1,010,889
------------- -------------
DIVERSIFIED FINANCE-0.47%
1,250,000 Associates Corp. N.A., 5.75% 11-1-2003....... AA- 1,249,527 1,258,929
1,500,000 AT&T Capital Corp., 7.50% 11-15-2000......... BBB 1,498,694 1,524,999
------------- -------------
2,748,221 2,783,928
------------- -------------
ELECTRONIC-MISCELLANEOUS-0.09%
500,000 Sony Corp., 6.125% Bond 3-4-2003............. A+ 499,094 512,791
------------- -------------
ENERGY-0.13%
750,000 NGC Corp. Capital Trust, 8.32% 6-1-2027...... BBB 750,000 765,277
------------- -------------
FINANCIAL SERVICES-0.43%
1,250,000 Homeside Lending, Inc., 6.875% Medium Term
Note 6-30-2002............................. A+ 1,249,697 1,282,801
1,250,000 Prudential Insurance Co., 6.375% Sr Note
7-23-2006 (e).............................. A+ 1,244,721 1,287,156
------------- -------------
2,494,418 2,569,957
------------- -------------
FOOD-0.17%
1,000,000 Safeway, Inc., 6.05% 11-15-2003.............. BBB 998,323 1,009,226
------------- -------------
FOREIGN-GOVERNMENT AGENCIES-0.22%
1,250,000 Quebec (Province of), 7.50% Yankee Bond
7-15-2002.................................. A+ 1,279,042 1,325,325
------------- -------------
FOREIGN-GOVERNMENT-1.38%
1,250,000 Alberta (Province of), 4.875% 10-29-2003..... AA+ 1,245,810 1,234,788
1,250,000 Canada (Government of), 5.25% 11-5-2008...... AA+ 1,249,716 1,257,925
1,500,000 Manitoba (Province of), 5.50% 10-1-2008...... AA- 1,490,616 1,513,815
1,500,000 Ontario (Province of), 5.50% 10-1-2008....... AA- 1,491,290 1,507,050
1,500,000 Ontario (Province of), 7.375% 1-27-2003...... AA- 1,610,118 1,624,095
1,000,000 Poland (Republic of), 7.125% Yankee Bond
7-1-2004................................... BBB- 995,796 1,047,500
------------- -------------
8,083,346 8,185,173
------------- -------------
FOREST PRODUCTS-0.17%
1,000,000 Fort James Corp., 6.50% Sr Note 9-15-2002.... BBB- 999,054 1,019,032
------------- -------------
HOUSING-0.21%
1,250,000 Masco Corp., 6.625% 4-15-2018................ A- 1,248,268 1,266,798
------------- -------------
INDUSTRIAL-0.22%
1,250,000 Tyco International Group, 6.375% 6-15-2005... A- 1,245,219 1,277,356
------------- -------------
</TABLE>
45
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
CORPORATE BONDS-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
INSURANCE-0.26%
$ 1,500,000 Reliastar Financial Corp., 6.625% Note
9-15-2003.................................. A $ 1,550,176 $ 1,558,796
------------- -------------
LEASING-0.17%
1,000,000 Ryder System, Inc., 6.60% Note 11-15-2005.... BBB+ 999,665 1,015,230
------------- -------------
MEDIA-0.13%
750,000 Belo (A.H.) Corp., 7.25% Note 9-15-2027...... BBB- 745,631 765,392
------------- -------------
MISCELLANEOUS-0.05%
250,000 New York (City of), 10.00% General Obligation
Taxable Bond Ser D 8-1-2005
(Prerefunded 8-1-2001 @103)................ A- 248,612 286,194
------------- -------------
NATURAL GAS TRANSMISSIONS-0.31%
1,250,000 Tennessee Gas Pipeline, 7.50% Bond
4-1-2017................................... BBB 1,230,843 1,330,916
500,000 Trans-Canada Pipelines Ltd., 7.06% Note
10-14-2025................................. A- 500,000 502,193
------------- -------------
1,730,843 1,833,109
------------- -------------
OIL-EQUIPMENT WELLS AND SERVICES-0.25%
500,000 Petroleum Geo-Services, 6.25% 11-19-2003
(e)........................................ BBB 497,845 497,778
1,000,000 Petroleum Geo-Services, 7.125% Sr Note
3-30-2028.................................. BBB 997,122 981,183
------------- -------------
1,494,967 1,478,961
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.10%
500,000 CSX Corp., 7.90% Deb 5-1-2017................ BBB 499,721 566,612
------------- -------------
REAL ESTATE-INVESTMENT TRUST-0.24%
1,500,000 Meditrust, 7.82% Note 9-10-2026.............. Baa3* 1,569,181 1,425,681
------------- -------------
SUPRANATIONAL-0.21%
1,250,000 Corp Andina de Fomento, 7.10% Yankee Bond
2-1-2003................................... BBB+ 1,249,471 1,233,070
------------- -------------
TELECOMMUNICATIONS-0.74%
1,250,000 360 Communications Co., 7.50% Sr Note
3-1-2006................................... A 1,247,726 1,376,811
1,500,000 Sprint Capital Corp., 6.125% 11-15-2008...... A- 1,498,900 1,530,530
1,500,000 U.S. West Communications, 5.625%
11-15-2008................................. A+ 1,494,739 1,514,901
------------- -------------
4,241,365 4,422,242
------------- -------------
TELEPHONE SERVICES-0.36%
1,000,000 Century Telephone Enterprises, Inc., 6.15%
1-15-2005.................................. BBB+ 998,653 1,020,001
1,000,000 GTE Corp., 7.51% Note 4-1-2009............... A 992,664 1,147,956
------------- -------------
1,991,317 2,167,957
------------- -------------
UTILITIES-ELECTRIC-0.93%
1,500,000 Detroit Edison Co., 5.90% Ser J 4-16-2001.... A- 1,511,447 1,512,300
1,000,000 Duke Energy Corp., 6.00% Sr Note 12-1-2028... A 976,132 982,144
1,500,000 Madison Gas & Electric Co., 6.02%
9-15-2008.................................. AA- 1,500,000 1,513,839
1,500,000 Texas Utilities Electric Capital V, 8.175%
1-30-2037.................................. BBB 1,500,000 1,523,793
------------- -------------
5,487,579 5,532,076
------------- -------------
TOTAL CORPORATE BONDS - INVESTMENT GRADE..... $ 63,219,428 $ 64,674,510
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-3.53%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
BROADCASTING-0.18%
$ 1,000,000 Sinclair Broadcasting Group, Inc., 10.00% Sr
Sub Note 9-30-2005......................... B $ 1,000,000 $ 1,060,000
------------- -------------
</TABLE>
46
<PAGE>
CORPORATE BONDS-NON-INVESTMENT GRADE-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
------------ ------------- ------------- -------------
<C> <S> <C> <C> <C>
CABLE TELEVISION-0.88%
$ 1,000,000 Adelphia Communications, Inc., 8.375% Sr Note
2-1-2008................................... B+ $ 1,007,096 $ 1,032,500
1,000,000 Adelphia Communications, Inc., 9.25% Sr Note
10-1-2002.................................. B+ 1,016,410 1,055,000
1,008,177 Australis Media Ltd., Sr Sub Disc Note
5-15-2003 (Zero coupon through 5-15-2000,
thereafter 15.75%) (a)(e).................. D 802,731 10
1,000,000 CSC Holdings, Inc., 10.50% Sr Sub Deb
5-15-2016.................................. BB- 1,014,435 1,175,000
750,000 CSC Holdings, Inc., 8.125% Sr Deb
8-15-2009.................................. BB+ 770,277 788,850
1,000,000 Lenfest Communications, 8.25% Sr Sub Note
2-15-2008.................................. BB- 997,429 1,042,500
1,000,000 Wireless One, Inc., 13.00% Sr Note
10-15-2003................................. CCC+ 982,340 150,000
------------- -------------
6,590,718 5,243,860
------------- -------------
COMPUTER-HARDWARE-0.20%
1,000,000 Unisys Corp., 11.75% Sr Note 10-15-2004...... BB- 1,074,077 1,160,000
------------- -------------
ENERGY-0.27%
1,750,000 Energy Corp. of America, 9.50% Sr Sub Note
5-15-2007.................................. B 1,750,000 1,618,750
------------- -------------
ENTERTAINMENT-0.13%
750,000 Speedway Motorsports, Inc., 8.50% Sr Sub Deb
8-15-2007.................................. B+ 755,941 791,250
------------- -------------
FOREIGN-GOVERNMENT-0.13%
1,000,000 United Mexican States, 6.25% Ser W-B Secured
Note 12-31-2019............................ BB 754,775 778,100
------------- -------------
TELECOMMUNICATIONS-1.20%
1,000,000 Hyperion Telecommunication, 12.25% Sr Note
9-1-2004................................... B+ 1,088,746 1,015,000
750,000 Intermedia Communications, Inc., 8.50% Sr
Note 1-15-2008............................. B 750,000 712,500
1,000,000 Iridium LLC/Capital Corp., 14.00% Sr Note
7-15-2005.................................. B- 1,112,934 950,000
750,000 Microcell Telecommunications, Inc., 11.80%
Disc Note 6-1-2006 (Zero coupon through
12-1-2001, thereafter 14.00%) (g).......... B3* 557,128 556,875
1,000,000 Nextel Communications, Inc., 9.58% Sr Disc
Note 9-15-2007 (Zero coupon through
9-15-2002, thereafter 10.65%) (g).......... CCC+ 695,344 637,500
750,000 Qwest Communications International, Inc.,
7.25% Sr Note 11-1-2008 (e)................ BB+ 750,000 765,000
2,000,000 Rogers Cantel, Inc., 9.375% Sr Secured Deb
6-1-2008................................... BB+ 2,118,667 2,110,000
500,000 Winstar Communications, Inc., 9.83% Sr Disc
Note 10-15-2005 (Zero coupon through
10-15-2000, thereafter 14.00%) (g)......... CCC+ 440,477 355,000
------------- -------------
7,513,296 7,101,875
------------- -------------
TEXTILE MANUFACTURING-0.18%
1,000,000 Pillowtex Corp., 10.00% Sr Sub Note
11-15-2006................................. B+ 1,048,098 1,080,000
------------- -------------
TRANSPORTATION-0.19%
1,000,000 Greyhound Lines, Inc., 11.50% Sr Note
4-15-2007.................................. B- 1,074,786 1,135,000
------------- -------------
UTILITIES-ELECTRIC-0.17%
1,000,000 Niagara Mohawk Power, 7.25% Sr Note
10-1-2002.................................. BB+ 994,872 1,024,383
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... $ 22,556,563 $ 20,993,218
------------- -------------
------------- -------------
</TABLE>
U.S. GOVERNMENT SECURITIES-7.81%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.40%
MORTGAGE BACKED SECURITIES:
$ 1,617,677 6.00% 2013................................... $ 1,622,203 $ 1,619,699
742,498 6.30% 2008................................... 743,437 772,258
1,938,917 6.63% 2005................................... 1,992,072 2,036,464
1,384,130 7.00% 2011................................... 1,359,220 1,413,543
1,600,718 7.50% 2022-2027.............................. 1,652,229 1,643,238
744,548 8.00% 2025................................... 755,832 770,840
</TABLE>
47
<PAGE>
FORTIS SERIES FUND, INC.
ASSET ALLOCATION SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
U.S. GOVERNMENT SECURITIES-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Market
Amount Cost (b) Value (c)
------------ ------------- -------------
<C> <S> <C> <C>
$ 27,194 9.00% 2021................................... $ 27,134 $ 28,740
------------- -------------
TOTAL FEDERAL NATIONAL MORTGAGE
ASSOCIATION................................ 8,152,127 8,284,782
------------- -------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION -
0.87%
MORTGAGE BACKED SECURITIES:
2,370,273 7.50% 2023................................... 2,258,426 2,443,610
2,466,516 9.00% 2022-2023.............................. 2,546,678 2,631,464
80,942 9.50% 2020................................... 80,740 87,341
------------- -------------
TOTAL GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION................................ 4,885,844 5,162,415
------------- -------------
U.S. TREASURY SECURITIES - 5.54%
BONDS:
14,450,000 5.59% 2022 Zero Coupon Strip (g)............. 3,893,904 3,904,231
6,910,000 5.61% 2018 Zero Coupon Strip (g)............. 2,301,595 2,298,190
37,000,000 5.65% 2019 Zero Coupon Strip (g)............. 12,053,822 12,111,173
670,000 8.125% 2021.................................. 896,516 906,803
------------- -------------
19,145,837 19,220,397
------------- -------------
NOTES:
2,220,000 6.375% 2000.................................. 2,249,854 2,269,950
10,150,000 6.625% 2007.................................. 11,398,918 11,415,583
------------- -------------
13,648,772 13,685,533
------------- -------------
TOTAL U.S. TREASURY SECURITIES............... 32,794,609 32,905,930
------------- -------------
TOTAL U.S. GOVERNMENT SECURITIES............. 45,832,580 46,353,127
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 435,525,417 $ 559,046,684
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-5.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS - 2.61%
$15,498,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 15,498,000
-------------
DIVERSIFIED FINANCE-2.44%
14,512,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 14,512,000
-------------
U.S. GOVERNMENT AGENCY-0.84%
5,000,000 Federal Home Loan Mortgage Corp., 5.20%,
1-25-1999.................................. 4,994,322
-------------
TOTAL SHORT-TERM INVESTMENTS................. 35,004,322
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$470,529,739) (B).......................... $ 594,051,006
-------------
-------------
</TABLE>
(a) Presently non-income producing. For long-term debt securities, items
identified are in default as to payment of interest and/or principal.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $470,531,624 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $128,900,863
Unrealized depreciation..................................... (5,381,481)
- -------------------------------------------------------------------------
Net unrealized appreciation $123,519,382
- -------------------------------------------------------------------------
</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 7.59% of net assets as of December 31, 1998.
48
<PAGE>
- --------------------------------------------------------------------------------
(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>
1997 1,008,177 Australis Ltd. due 2003 $ 802,731
1997 1,079,105 Blackrock Capital Funding due 2037 - 144A 1,088,980
1997 1,500,000 DLJ Mortgage Acceptance Corp. due 2007 - 144A 1,513,889
1996 1,639,651 DLJ Mortgage Acceptance Corp. due 2028 - 144A 1,651,658
1997 250 Highwaymaster Communications, Inc. (Warrants) - 144A 4,547
1996 1,000 Hyperion Telecom (Warrants) - 144A 4,022
1998 500,000 Petroleum Geo-Services due 2003 - 144A 497,845
1998 1,250,000 Prudential Insurance Co. due 2006 - 144A 1,244,721
1998 750,000 Qwest Communications International, Inc. due 2008 - 144A 750,000
The aggregate value of these securities at December 31, 1998, was $6,933,348, which represents 1.17% 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, a s
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 December 31, 1998, was $2,123,839, which represents
.36% 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 December 31, 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 December 31, 1998, was $591,082, which represents
.10% of total net assets.
* Moody's Rating
49
<PAGE>
FORTIS SERIES FUND, INC.
VALUE SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-98.34%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-2.66%
11,500 AlliedSignal, Inc............................ $ 405,314 $ 509,594
21,000 Boeing Co.................................... 670,829 685,125
4,000 Lockheed Martin Corp......................... 421,273 339,000
7,000 Raytheon Co. Class A......................... 354,181 361,812
4,000 United Technologies Corp..................... 436,505 435,000
------------ ------------
2,288,102 2,330,531
------------ ------------
AIRLINES-0.90%
6,000 AMR Corp. (a)................................ 411,585 356,250
14,500 KLM Royal Dutch Air Lines N.V................ 434,777 435,000
------------ ------------
846,362 791,250
------------ ------------
AUTOMOBILE MANUFACTURERS-2.95%
27,000 Ford Motor Co................................ 1,227,231 1,584,562
14,000 General Motors Corp.......................... 821,751 1,001,875
------------ ------------
2,048,982 2,586,437
------------ ------------
BANKS-13.44%
16,300 Bank of New York Company, Inc................ 454,625 656,075
25,000 Bank One Corp................................ 961,167 1,276,562
38,800 BankAmerica Corp............................. 2,177,239 2,332,850
7,000 BankBoston Corp.............................. 268,599 272,562
15,800 Chase Manhattan Corp......................... 939,173 1,075,387
21,000 First Union Corp............................. 1,079,564 1,277,062
16,000 Fleet Financial Group, Inc................... 589,647 715,000
14,000 KeyCorp...................................... 399,814 448,000
7,500 Mellon Bank Corp............................. 425,666 515,625
6,000 National City Corp........................... 442,516 435,000
8,500 PNC Bank Corp................................ 410,066 460,062
13,500 Republic New York Corp....................... 597,693 615,094
4,500 SunTrust Banks, Inc.......................... 303,701 344,250
13,500 U.S. Bancorp................................. 474,997 479,250
4,500 Wachovia Corp................................ 392,997 393,469
12,500 Washington Mutual, Inc....................... 458,775 477,344
------------ ------------
10,376,239 11,773,592
------------ ------------
BROADCASTING-0.63%
7,500 Viacom, Inc. Class B (a)..................... 475,474 555,000
------------ ------------
BROKERAGE AND INVESTMENT-0.50%
6,500 Merrill Lynch & Co., Inc..................... 324,746 433,875
------------ ------------
BUILDING MATERIALS-0.30%
9,000 Masco Corp................................... 262,730 258,750
------------ ------------
BUSINESS SERVICES-1.15%
8,000 Computer Sciences Corp. (a).................. 464,433 515,500
15,500 First Data Corp.............................. 418,189 491,156
------------ ------------
882,622 1,006,656
------------ ------------
CABLE TELEVISION-0.70%
13,000 Media One Group, Inc. (a).................... 489,194 611,000
------------ ------------
CHEMICALS-2.36%
5,000 Dow Chemical Co.............................. 452,801 454,687
20,500 du Pont (E.I.) de Nemours & Co............... 1,159,968 1,087,781
11,000 Monsanto Co.................................. 535,855 522,500
------------ ------------
2,148,624 2,064,968
------------ ------------
CHEMICALS-SPECIALTY-1.10%
24,000 Air Products and Chemicals, Inc.............. 837,048 960,000
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
COMPUTER-COMMUNICATION EQUIPMENT-0.38%
7,500 3Com Corp. (a)............................... $ 262,627 $ 336,094
------------ ------------
COMPUTER-SOFTWARE-1.12%
10,500 Electronic Data Systems Corp................. 427,206 527,625
11,400 SunGard Data Systems, Inc. (a)............... 416,326 452,437
------------ ------------
843,532 980,062
------------ ------------
CONSTRUCTION-0.39%
7,500 Caterpillar, Inc............................. 383,797 345,000
------------ ------------
DIVERSIFIED COMPANIES-1.93%
14,500 CBS Corp. (a)................................ 403,520 474,875
7,500 Minnesota Mining and Manufacturing Co........ 555,467 533,437
6,500 PPG Industries, Inc.......................... 381,648 378,625
8,000 Seagram Company Ltd.......................... 280,619 304,000
------------ ------------
1,621,254 1,690,937
------------ ------------
DRUGS-0.76%
11,700 Pharmacia and Upjohn, Inc.................... 544,842 662,512
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.98%
9,000 Cooper Industries, Inc....................... 430,754 429,187
19,100 Hewlett-Packard Co........................... 954,677 1,304,769
------------ ------------
1,385,431 1,733,956
------------ ------------
ELECTRONIC-SEMICONDUCTOR-2.35%
9,000 Altera Corp. (a)............................. 351,007 547,875
11,500 Motorola, Inc................................ 601,007 702,219
9,500 Texas Instruments, Inc....................... 449,815 812,844
------------ ------------
1,401,829 2,062,938
------------ ------------
FINANCE COMPANIES-10.25%
8,500 American Express Co.......................... 886,036 869,125
17,000 Associates First Capital Corp. Class A....... 452,413 720,375
47,750 Citigroup, Inc............................... 1,875,437 2,363,625
7,000 Conseco, Inc................................. 244,082 213,937
22,000 Fannie Mae................................... 1,385,836 1,628,000
12,500 Finova Group, Inc............................ 606,412 674,219
11,600 Household International, Inc................. 460,638 459,650
4,000 J.P. Morgan & Company, Inc................... 348,712 420,250
8,500 Marsh & McLennan Companies, Inc.............. 465,672 496,719
16,000 Morgan Stanley Dean Witter & Co.............. 976,829 1,136,000
------------ ------------
7,702,067 8,981,900
------------ ------------
FOOD-0.64%
11,000 Suiza Foods Corp. (a)........................ 403,362 560,312
------------ ------------
FOREST PRODUCTS-1.27%
12,000 Georgia-Pacific Group........................ 648,989 702,750
8,000 Weyerhaeuser Co.............................. 377,468 406,500
------------ ------------
1,026,457 1,109,250
------------ ------------
FREIGHT CARRIERS-0.26%
6,000 CNF Transportation, Inc...................... 210,708 225,375
------------ ------------
HEALTH CARE SERVICES-3.22%
17,000 Columbia/HCA Healthcare Corp................. 311,671 420,750
14,000 HCR Manor Care, Inc. (a)..................... 452,839 411,250
62,000 HEALTHSOUTH Corp. (a)........................ 817,376 957,125
18,400 Tenet Healthcare Corp. (a)................... 537,619 483,000
</TABLE>
50
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
18,500 Total Renal Care Holdings, Inc. (a).......... $ 499,730 $ 546,906
------------ ------------
2,619,235 2,819,031
------------ ------------
INSURANCE-5.20%
19,000 Allstate Corp................................ 768,875 733,875
6,500 American General Corp........................ 452,732 507,000
19,500 American International Group, Inc............ 1,897,192 1,884,187
3,500 Chubb Corp................................... 245,210 227,062
7,000 CIGNA Corp................................... 487,357 541,187
12,100 Hartford Financial Services Group, Inc....... 633,481 663,988
------------ ------------
4,484,847 4,557,299
------------ ------------
LEISURE TIME-AMUSEMENTS-1.32%
38,500 Disney (Walt) Co............................. 972,722 1,155,000
------------ ------------
MACHINERY-SPECIALTY-1.03%
19,300 Ingersoll-Rand Co............................ 872,884 905,894
------------ ------------
METALS-FABRICATING-0.55%
6,500 Aluminum Company of America.................. 520,893 484,656
------------ ------------
NATURAL GAS TRANSMISSIONS-0.79%
8,400 Enron Corp................................... 414,252 479,325
11,000 MCN Energy Group, Inc........................ 216,316 209,688
------------ ------------
630,568 689,013
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-1.47%
30,800 Compaq Computer Corp......................... 945,255 1,291,675
------------ ------------
OIL-CRUDE PETROLEUM AND GAS-11.61%
14,500 Anadarko Petroleum Corp...................... 445,669 447,688
12,700 Chevron Corp................................. 1,089,336 1,053,306
49,900 Exxon Corp................................... 3,623,358 3,648,938
17,000 Mobil Corp................................... 1,323,294 1,481,125
10,000 Phillips Petroleum Company................... 432,547 426,250
43,600 Royal Dutch Petroleum Co. NY Shares.......... 2,185,145 2,087,350
11,500 Texaco, Inc.................................. 689,147 608,063
14,000 USX-Marathon Group, Inc...................... 452,196 421,750
------------ ------------
10,240,692 10,174,470
------------ ------------
OIL-REFINING-0.63%
8,500 Atlantic Richfield Co........................ 558,806 554,625
------------ ------------
PAPER-0.36%
7,000 International Paper Co....................... 312,943 313,688
------------ ------------
PHOTOGRAPHIC-0.62%
7,500 Eastman Kodak Co............................. 591,710 540,000
------------ ------------
PRECISION INSTRUMENTS-TEST, RESEARCH-0.55%
8,000 Emerson Electric Co.......................... 495,992 484,000
------------ ------------
PUBLISHING-0.56%
7,500 Tribune Co................................... 456,075 495,000
------------ ------------
RAILROAD AND RAILROAD EQUIPMENT-0.98%
10,500 Burlington Northern Santa Fe Corp............ 313,752 354,375
8,000 Norfolk Southern Corp........................ 259,638 253,500
5,500 Union Pacific Corp........................... 223,977 247,844
------------ ------------
797,367 855,719
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
RESTAURANTS AND FRANCHISING-1.27%
14,500 McDonald's Corp.............................. $ 841,047 $ 1,111,063
------------ ------------
RETAIL-DEPARTMENT STORES-2.16%
6,000 Federated Department Stores, Inc. (a)........ 239,615 261,375
5,000 May Department Stores Co..................... 299,721 301,875
30,000 Saks, Inc. (a)............................... 795,625 946,875
9,000 Sears, Roebuck & Co.......................... 400,489 382,500
------------ ------------
1,735,450 1,892,625
------------ ------------
RETAIL-GROCERY-0.36%
5,000 Albertson's, Inc............................. 300,507 318,438
------------ ------------
RETAIL-SPECIALTY-1.01%
15,100 AutoZone, Inc. (a)........................... 386,438 497,356
7,500 Lowe's Companies, Inc........................ 283,202 383,906
------------ ------------
669,640 881,262
------------ ------------
TELECOMMUNICATIONS-1.48%
20,500 Ameritech Corp............................... 1,290,903 1,299,188
------------ ------------
TELEPHONE SERVICES-8.59%
38,000 AT & T Corp.................................. 2,285,670 2,859,500
43,000 BellSouth Corp............................... 1,681,233 2,144,625
17,500 GTE Corp..................................... 1,196,090 1,180,156
6,700 Sprint Corp.................................. 306,096 563,638
12,000 U S West, Inc................................ 692,206 775,500
------------ ------------
6,161,295 7,523,419
------------ ------------
UTILITIES-ELECTRIC-6.56%
5,500 American Electric Power Company, Inc......... 274,542 258,844
6,200 CalEnergy Company, Inc. (a).................. 157,605 215,063
13,900 CMS Energy Corp.............................. 622,044 673,281
11,000 Consolidated Edison, Inc..................... 562,846 581,625
10,000 Dominion Resources, Inc...................... 463,203 467,500
7,000 Duke Energy Corp............................. 473,665 448,438
15,500 Edison International......................... 422,439 432,063
5,000 Energy East Corp............................. 271,915 282,500
4,000 FPL Group, Inc............................... 282,128 246,500
13,500 Houston Industries, Inc...................... 437,551 433,688
12,000 PG&E Corp.................................... 386,278 378,000
13,500 Southern Co.................................. 402,153 392,344
6,000 Texas Utilities Co........................... 278,681 280,125
17,000 Unicom Corp.................................. 658,546 655,563
------------ ------------
5,693,596 5,745,534
------------ ------------
TOTAL COMMON STOCKS.......................... $ 77,958,456 $ 86,151,994
------------ ------------
------------ ------------
</TABLE>
51
<PAGE>
FORTIS SERIES FUND, INC.
VALUE SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
PREFERRED STOCKS-0.77%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------ ------------
<C> <S> <C> <C>
COMPUTER-SOFTWARE-0.77%
12,000 Wang Labs, Conv., Ser B 6.50%................ $ 617,063 $ 673,500
------------ ------------
TOTAL LONG-TERM INVESTMENTS.................. $78,575,519 $86,825,494
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-1.42%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-1.42%
$1,241,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 1,241,000
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$79,816,519) (B)........................... $88,066,494
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $80,567,885 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 8,982,287
Unrealized depreciation..................................... (1,483,678)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 7,498,609
- -------------------------------------------------------------------------
</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 v
alue to total net assets. Market value of investments in foreign securities
represents 3.23% of total net assets as of December 31, 1998.
52
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-88.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.36%
39,200 United Technologies Corp..................... $ 2,250,682 $ 4,263,000
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-2.05%
101,000 Genuine Parts Co............................. 3,100,061 3,377,187
89,000 Tenneco, Inc. (with rights).................. 4,007,655 3,031,562
------------- -------------
7,107,716 6,408,749
------------- -------------
BANKS-4.31%
85,800 Bank One Corp................................ 3,075,007 4,381,162
68,000 Fleet Financial Group, Inc................... 2,416,040 3,038,750
31,710 U.S. Bancorp................................. 787,129 1,125,705
86,000 Valley National Bancorp...................... 3,017,729 2,424,125
65,850 Washington Mutual, Inc....................... 2,414,719 2,514,647
------------- -------------
11,710,624 13,484,389
------------- -------------
BEVERAGE-0.78%
37,000 Anheuser-Busch Companies, Inc................ 2,246,904 2,428,125
------------- -------------
BUSINESS SERVICES AND SUPPLIES-2.47%
42,000 Deluxe Corp.................................. 1,591,876 1,535,625
107,000 Omnicom Group, Inc........................... 2,883,907 6,206,000
------------- -------------
4,475,783 7,741,625
------------- -------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-1.93%
59,200 General Electric Co.......................... 2,295,975 6,042,100
------------- -------------
CHEMICALS-0.85%
50,000 du Pont (E.I.) de Nemours & Co............... 3,708,342 2,653,125
------------- -------------
DIVERSIFIED COMPANIES-0.68%
30,000 Minnesota Mining and Manufacturing Co........ 1,860,371 2,133,750
------------- -------------
DRUGS-8.65%
86,600 Abbott Laboratories.......................... 2,067,438 4,243,400
90,000 Glaxo Wellcome plc ADR....................... 3,606,890 6,255,000
40,000 Johnson & Johnson............................ 2,725,553 3,355,000
33,500 Merck & Co., Inc............................. 1,966,881 4,947,531
120,500 Pharmacia and Upjohn, Inc.................... 4,853,589 6,823,312
26,000 Schering-Plough Corp......................... 1,462,197 1,436,500
------------- -------------
16,682,548 27,060,743
------------- -------------
FINANCIAL SERVICES-6.30%
43,200 Fannie Mae................................... 975,787 3,196,800
80,000 Household International, Inc................. 1,953,063 3,170,010
48,000 Marsh & McLennan Companies, Inc. 2,429,360 2,805,000
151,368 MBNA Corp.................................... 899,370 3,774,740
83,503 SunAmerica, Inc.............................. 3,508,364 6,774,162
------------- -------------
9,765,944 19,720,712
------------- -------------
FOOD-4.48%
86,800 Groupe Danone ADR............................ 2,941,286 4,882,500
65,000 Heinz (H.J.) Co.............................. 2,076,425 3,680,625
92,000 Quaker Oats Co............................... 4,759,626 5,474,000
------------- -------------
9,777,337 14,037,125
------------- -------------
HAND TOOLS AND GENERAL HARDWARE-0.75%
67,500 Snap-On, Inc................................. 2,030,431 2,349,844
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
HOUSEHOLD PRODUCTS-1.40%
37,600 Clorox Co.................................... $ 1,266,517 $ 4,392,150
------------- -------------
INSURANCE-0.89%
128,000 LaSalle Re Holdings Ltd...................... 4,302,091 2,784,000
------------- -------------
LEISURE TIME-AMUSEMENTS-0.77%
65,000 Royal Caribbean Cruises Ltd.................. 1,320,312 2,405,000
------------- -------------
MACHINERY-0.65%
80,000 Pall Corp.................................... 1,926,953 2,025,000
------------- -------------
MEDICAL SUPPLIES-1.19%
58,000 Baxter International, Inc.................... 2,145,564 3,730,125
------------- -------------
NATURAL GAS TRANSMISSIONS-5.85%
51,600 Columbia Energy Group........................ 2,942,282 2,979,900
114,254 El Paso Energy Corp.......................... 1,836,879 3,977,467
137,212 Enron Corp................................... 5,399,914 7,829,660
112,500 Williams Companies, Inc...................... 1,874,200 3,508,594
------------- -------------
12,053,275 18,295,621
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-7.87%
66,200 Amoco Corp................................... 2,373,441 3,996,825
37,000 Chevron Corp................................. 3,216,314 3,068,688
108,000 Conoco Inc. Class A (a)...................... 2,484,000 2,254,500
48,000 Exxon Corp................................... 1,982,160 3,510,000
61,000 Mobil Corp................................... 4,349,056 5,314,625
55,000 Royal Dutch Petroleum Co. NY Shares.......... 2,642,866 2,633,125
72,888 Texaco, Inc.................................. 3,433,067 3,853,953
------------- -------------
20,480,904 24,631,716
------------- -------------
PHOTOGRAPHIC-1.15%
50,000 Eastman Kodak Co............................. 3,435,033 3,600,000
------------- -------------
PUBLISHING-4.13%
100,000 McGraw-Hill Companies, Inc................... 6,346,921 10,187,500
109,000 Reader's Digest Association, Inc. Class A.... 3,000,814 2,745,438
------------- -------------
9,347,735 12,932,938
------------- -------------
REAL ESTATE-INVESTMENT TRUST-4.75%
156,000 Cornerstone Properties, Inc.................. 2,257,051 2,437,500
63,600 Crescent Real Estate Equities Co............. 1,649,766 1,462,800
99,847 Equity Office Properties Trust............... 2,091,137 2,396,335
49,500 Highwoods Properties, Inc.................... 1,487,050 1,274,625
52,000 Manufactured Home Communities, Inc........... 1,355,120 1,303,250
210,427 New Plan Excel Realty Trust.................. 4,488,974 4,668,849
38,000 Spieker Properties, Inc...................... 1,311,000 1,315,750
------------- -------------
14,640,098 14,859,109
------------- -------------
RETAIL-DEPARTMENT STORES-0.58%
42,800 Sears, Roebuck & Co.......................... 1,764,053 1,819,000
------------- -------------
RETAIL-SPECIALTY-2.63%
105,000 Intimate Brands, Inc......................... 1,979,627 3,136,875
102,800 Rite Aid Corp................................ 1,663,663 5,095,025
------------- -------------
3,643,290 8,231,900
------------- -------------
</TABLE>
53
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH & INCOME SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
SHIP BUILDING, SHIPPING-1.20%
70,000 Sea Containers Ltd. Class A.................. $ 3,035,436 $ 2,095,625
88,000 Teekay Shipping Corp......................... 2,282,500 1,655,500
------------- -------------
5,317,936 3,751,125
------------- -------------
TELECOMMUNICATIONS-4.04%
100,000 Ameritech Corp............................... 3,744,862 6,337,500
80,000 France Telecom S.A. ADR...................... 5,589,384 6,315,000
------------- -------------
9,334,246 12,652,500
------------- -------------
TELEPHONE SERVICES-11.29%
76,000 ALLTEL Corp.................................. 3,280,417 4,545,750
83,000 AT & T Corp.................................. 5,413,664 6,245,750
176,000 Frontier Corp................................ 5,041,369 5,984,000
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
82,000 GTE Corp..................................... $ 3,840,836 $ 5,529,875
150,000 SBC Communications, Inc...................... 4,736,309 8,043,750
77,000 U S West, Inc................................ 2,735,145 4,976,125
------------- -------------
25,047,740 35,325,250
------------- -------------
TOBACCO-2.14%
125,000 Philip Morris Companies, Inc................. 4,234,492 6,687,500
------------- -------------
UTILITIES-ELECTRIC-3.21%
79,896 Duke Energy Corp............................. 2,347,508 5,118,338
182,000 Endesa S.A. ADR.............................. 3,400,902 4,914,000
------------- -------------
5,748,410 10,032,338
------------- -------------
TOTAL COMMON STOCKS.......................... $ 199,921,306 $ 276,478,559
------------- -------------
------------- -------------
</TABLE>
PREFERRED STOCKS-3.38%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------- -------------
<C> <S> <C> <C>
CONSTRUCTION-0.74%
45,000 Sealed Air Corp., Conv., Ser A............... $ 2,896,790 $ 2,334,375
------------- -------------
MISCELLANEOUS-1.31%
88,000 QWest TrENDS Trust, Conv. 5.75% (a) (d)...... 3,674,000 4,092,000
------------- -------------
UTILITIES-ELECTRIC-1.33%
60,000 AES Corp., Conv., Ser A Tecons 5.375%........ 3,000,000 4,170,000
------------- -------------
TOTAL PREFERRED STOCKS....................... $ 9,570,790 $ 10,596,375
------------- -------------
------------- -------------
</TABLE>
CORPORATE BONDS-INVESTMENT GRADE-0.61%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
WASTE DISPOSAL-0.61%
$1,600,000 Waste Management, Inc., 4.00% Conv. Sub Note
2-1-2002................................... BBB $ 1,643,875 $ 1,910,000
------------- -------------
</TABLE>
CORPORATE BONDS-NON-INVESTMENT GRADE-1.02%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Standard
& Poor's
Principal Rating Market
Amount (Unaudited) Cost (b) Value (c)
----------- ------------- ------------- -------------
<C> <S> <C> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.83%
$1,700,000 Assisted Living Concepts, Inc., 5.625% Conv.
5-1-2003 (d)............................... NR $ 1,700,000 $ 1,221,875
1,600,000 Cypress Semiconductor Corp., 6.00% Conv.
10-1-2002 (d).............................. B 1,600,000 1,380,000
------------- -------------
3,300,000 2,601,875
------------- -------------
METALS-MINING AND MISCELLANEOUS-0.19%
1,000,000 Coeur D'Alene Mines Corp., 7.25% Conv. Sub
Deb 10-31-2005 (d)......................... CCC+ 1,000,000 588,750
------------- -------------
TOTAL CORPORATE BONDS - NON-INVESTMENT
GRADE...................................... 4,300,000 3,190,625
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 215,435,971 $ 292,175,559
------------- -------------
------------- -------------
</TABLE>
54
<PAGE>
SHORT-TERM INVESTMENTS-6.44%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-2.08%
$6,519,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 6,519,000
-------------
DIVERSIFIED FINANCE-2.12%
6,630,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 6,630,000
-------------
U.S. GOVERNMENT AGENCY-2.24%
7,000,000 Federal Home Loan Mortgage Corp., 5.20%
1-8-1999................................... 6,992,051
-------------
TOTAL SHORT-TERM INVESTMENTS................. 20,141,051
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$235,577,022) (B).......................... $ 312,316,610
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $235,577,022 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $85,985,459
Unrealized depreciation..................................... (9,245,871)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $76,739,588
- -------------------------------------------------------------------------
</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>
Period 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., 7.25% 10-31-2005 1,000,000
1997 1,600,000 Cypress Semiconductor Corp., 6.00% 10-1-2002 1,600,000
1998 88,000 QWest TrENDS Trust, Conv. 5.75% 3,674,000
The value of these securities at December 31, 1998, was $7,282,625, which represents 2.33% of total net
assets.
</TABLE>
(e) 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 8.88% of total net assets as of December 31, 1998.
55
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-98.10%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
BASIC INDUSTRY-4.22%
1,700 Adobe Systems, Inc........................... $ 76,215 $ 79,475
5,700 Air Products & Chemicals, Inc................ 218,898 228,000
1,000 Armstrong World Industries, Inc.............. 64,355 60,312
1,900 Ashland, Inc................................. 96,561 91,912
3,800 AutoZone, Inc. (a)........................... 106,190 125,162
2,900 Avery Dennison Corp.......................... 136,600 130,681
800 Ball Corp.................................... 30,278 36,600
1,300 Bemis Co., Inc............................... 52,232 49,319
5,300 BMC Software, Inc............................ 310,315 236,181
1,400 Boise Cascade Corp........................... 45,617 43,400
1,500 Centex Corp.................................. 36,940 67,594
2,400 Champion International Corp.................. 122,216 97,200
6,600 Clear Channel Communications, Inc. (a)....... 280,546 359,700
4,900 Compuware Corp. (a).......................... 382,619 382,812
3,100 Crown Cork & Seal Co., Inc................... 148,230 95,519
3,300 Danaher Corp................................. 145,737 179,231
5,500 Dow Chemical Co.............................. 490,318 500,156
27,900 Du Pont (E.I.) de Nemours and Co............. 1,634,010 1,480,444
2,000 Eastman Chemical Co.......................... 118,700 89,500
3,500 Engelhard Corp............................... 70,782 68,250
1,900 Fluor Corp................................... 99,101 80,869
900 FMC Corp. (a)................................ 65,550 50,400
5,400 Fort James Corp.............................. 216,446 216,000
3,800 Fred Meyer, Inc. (a)......................... 182,954 228,950
4,200 General Instrument Corp. (a)................. 78,978 142,537
2,200 Georgia-Pacific Group........................ 140,503 128,837
1,800 Goodrich (B.F.) Co........................... 75,721 64,575
1,500 Great Lakes Chemical Corp.................... 64,280 60,000
11,400 HBO & Co..................................... 289,670 327,037
2,400 Hercules, Inc................................ 105,964 65,700
7,600 International Paper Co....................... 352,359 340,575
1,000 Kaufman & Broad Home Corp.................... 16,984 28,750
13,500 Kimberly-Clark Corp.......................... 656,484 735,750
2,100 KLA-Tencor Corp. (a)......................... 105,331 91,087
2,700 Louisiana-Pacific Corp....................... 53,339 49,444
8,400 Masco Corp................................... 196,126 241,500
2,600 Mead Corp.................................... 81,496 76,212
15,500 Monsanto Co.................................. 683,410 736,250
3,000 Morton International, Inc. (with rights)..... 90,797 73,500
1,600 Nalco Chemical Co............................ 56,010 49,600
8,600 Occidental Petroleum Corp.................... 214,281 145,125
4,200 Omnicom Group, Inc........................... 181,290 243,600
3,800 Owens-Illinois, Inc. (a)..................... 142,871 116,375
6,700 Parametric Technology Corp. (a).............. 155,164 109,712
5,700 PeopleSoft, Inc. (a)......................... 178,370 107,944
700 Potlatch Corp................................ 33,564 25,812
3,900 Praxair, Inc................................. 180,636 137,475
4,200 Rohm & Haas Co............................... 128,656 126,525
2,043 Sealed Air Corp. (a)......................... 103,761 104,321
4,300 Sherwin-Williams Co.......................... 127,194 126,312
2,500 Sigma-Aldrich Corp........................... 83,028 73,437
2,800 Solectron Corp. (SLR)........................ 261,370 260,225
1,400 Temple-Inland, Inc........................... 81,987 83,037
4,200 Tenneco, Inc. (with rights).................. 174,495 143,062
1,700 Union Camp Corp.............................. 93,649 114,750
3,300 Union Carbide Corp........................... 158,481 140,250
1,900 W.R. Grace & Co. (a)......................... 29,259 29,806
2,500 Westvaco Corp................................ 75,506 67,031
4,900 Weyerhaeuser Co.............................. 237,536 248,981
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
2,700 Willamette Industries, Inc................... $ 93,803 $ 90,450
------------- -------------
10,913,763 10,683,251
------------- -------------
CAPITAL SPENDING-25.67%
8,800 3Com Corp. (a)............................... 345,456 394,350
3,500 Advanced Micro Devices, Inc. (a)............. 85,944 101,281
700 Aeroquip-Vickers, Inc........................ 26,519 20,956
4,792 Allegheny Teledyne, Inc...................... 118,150 97,936
13,800 AlliedSignal, Inc............................ 540,174 611,512
5,400 AMP, Inc..................................... 226,657 281,137
2,100 Andrew Corp. (with rights) (a)............... 56,356 34,650
3,300 Apple Computer, Inc. (a)..................... 86,376 135,094
9,200 Applied Materials, Inc. (a).................. 302,953 392,725
5,400 Ascend Communications, Inc. (a).............. 263,262 355,050
1,200 Autodesk, Inc................................ 41,141 51,225
7,500 Automatic Data Processing, Inc............... 420,754 601,406
24,906 Boeing Co.................................... 1,176,583 812,558
600 Briggs & Stratton Corp....................... 26,617 29,925
4,300 Browning-Ferris Industries, Inc.............. 142,539 122,281
4,000 Cabletron Systems, Inc. (a).................. 87,167 33,500
1,800 Case Corp.................................... 109,851 39,262
9,000 Caterpillar, Inc............................. 442,866 414,000
1,800 Ceridian Corp. (a)........................... 82,355 125,662
39,100 Cisco Systems, Inc. (a)...................... 1,658,127 3,628,969
42,105 Compaq Computer Corp......................... 1,085,299 1,765,778
13,800 Computer Associates International, Inc. 584,647 588,225
3,900 Computer Sciences Corp. (a).................. 171,820 251,306
2,600 Cooper Industries, Inc....................... 139,476 123,987
1,675 Crane Co..................................... 53,751 50,564
1,000 Cummins Engine Co., Inc...................... 49,250 35,500
1,200 Data General Corp. (a)....................... 26,552 19,725
6,000 Deere & Co................................... 297,515 198,750
31,600 Dell Computer Corp. (a)...................... 852,281 2,312,725
2,000 Deluxe Corp.................................. 67,152 73,125
5,500 Dover Corp................................... 172,644 201,437
2,300 Dow Jones & Co., Inc......................... 105,949 110,687
4,200 Dun & Bradstreet Corp........................ 110,984 132,562
1,800 Eaton Corp................................... 138,676 127,237
1,100 EG&G, Inc.................................... 26,606 30,594
12,100 Electronic Data Systems Corp................. 494,761 608,025
12,400 EMC Corp. (a)................................ 400,851 1,054,000
10,900 Emerson Electric Co.......................... 610,913 681,931
11,000 First Data Corp.............................. 374,360 348,562
6,100 Firstar Corp................................. 568,825 568,825
1,000 Foster Wheeler Corp.......................... 30,374 13,187
3,900 Gateway 2000, Inc. (a)....................... 224,722 199,631
3,100 General Dynamics Corp........................ 132,909 181,737
81,200 General Electric Co.......................... 5,690,180 8,287,475
4,450 Genuine Parts Co............................. 144,919 148,797
2,400 Grainger (W.W.), Inc......................... 104,440 99,900
1,200 Harnischfeger Industries, Inc................ 39,701 12,225
2,000 Harris Corp.................................. 87,355 73,250
25,700 Hewlett-Packard Co........................... 1,497,695 1,755,631
3,100 Honeywell, Inc............................... 224,237 233,469
3,400 IKON Office Solutions, Inc................... 84,546 29,112
6,200 Illinois Tool Works, Inc..................... 316,011 359,600
4,050 Ingersoll-Rand Co............................ 158,473 190,097
41,400 Intel Corp................................... 3,246,997 4,908,487
23,100 International Business Machines Corp. 2,294,819 4,267,725
3,400 Interpublic Group of Companies, Inc.......... 165,489 271,150
2,600 ITT Industries, Inc.......................... 83,694 103,350
</TABLE>
56
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
2,100 Johnson Controls, Inc........................ $ 99,870 $ 123,900
4,900 Lockheed Martin Corp......................... 483,435 415,275
3,400 LSI Logic Corp. (a).......................... 90,305 54,825
32,562 Lucent Technologies, Inc..................... 1,630,724 3,581,820
1,500 McDermott International, Inc................. 43,897 37,031
15,000 MediaOne Group, Inc. (a)..................... 427,998 705,000
5,300 Micron Technology, Inc. (a).................. 171,726 267,981
61,800 Microsoft Corp. (a).......................... 4,596,740 8,570,887
1,000 Milacron, Inc................................ 23,069 19,250
9,900 Minnesota Mining & Manufacturing Co. 852,865 704,137
14,900 Motorola, Inc................................ 889,443 909,831
4,000 National Semiconductor Corp. (a)............. 92,929 54,000
1,000 National Service Industries, Inc............. 41,693 38,000
16,020 Northern Telecom Ltd......................... 720,536 803,002
1,700 Northrop Grumman Corp........................ 159,754 124,312
8,600 Novell, Inc. (a)............................. 89,484 155,875
24,000 Oracle Corp. (a)............................. 699,815 1,035,000
1,300 Owens Corning................................ 52,880 46,069
3,100 Pall Corp.................................... 70,958 78,469
2,700 Parker-Hannifin Corp......................... 99,426 88,425
1,200 Perkin-Elmer Corp............................ 80,203 117,075
6,800 Pitney Bowes, Inc............................ 284,642 449,225
4,400 PPG Industries, Inc.......................... 264,299 256,300
1,900 Raychem Corp................................. 77,646 61,394
8,300 Raytheon Co. Class B......................... 440,494 441,975
4,700 Rockwell International Corp.................. 241,981 228,244
1,800 Ryder System, Inc............................ 56,755 46,800
1,900 Scientific-Atlanta, Inc...................... 35,682 43,344
6,000 Seagate Technology, Inc. (a)................. 183,199 181,500
6,300 Service Corp. International.................. 219,778 239,794
700 Shared Medical Systems Corp.................. 41,401 34,912
4,600 Silicon Graphics, Inc. (a)................... 74,124 59,225
1,500 Snap-on, Inc................................. 58,585 52,219
2,200 Stanley Works................................ 89,235 61,050
9,400 Sun Microsystems, Inc. (a)................... 401,576 804,875
1,200 Tektronix, Inc............................... 47,327 36,075
4,800 Tellabs, Inc. (a)............................ 273,867 329,100
9,700 Texas Instruments, Inc....................... 472,324 829,956
4,000 Textron, Inc................................. 245,579 303,750
4,100 Thermo Electron Corp. (a).................... 135,140 69,444
1,400 Thomas & Betts Corp.......................... 68,108 60,637
1,500 Timken Co.................................... 39,173 28,312
15,993 Tyco International Ltd....................... 730,322 1,206,472
6,300 Unisys Corp.(a).............................. 112,380 216,956
5,600 United Technologies Corp..................... 445,688 609,000
14,105 Waste Management, Inc........................ 672,244 657,646
8,100 Xerox Corp................................... 638,489 955,800
------------- -------------
44,866,508 64,896,016
------------- -------------
CONSUMER DISCRETIONARY-13.39%
6,100 Albertson's, Inc............................. 265,419 388,494
12,200 America Online, Inc. (a)..................... 1,952,000 1,765,950
1,700 American Greetings Corp. Class A............. 64,009 69,806
6,800 American Stores Co........................... 167,085 251,175
2,200 Black & Decker Corp.......................... 107,576 123,337
2,400 Brunswick Corp............................... 63,500 59,400
14,600 Carnival Corp................................ 625,901 700,800
17,600 CBS Corp. (a)................................ 458,267 576,400
2,500 Circuit City Stores -- Circuit City Group 99,921 124,844
10,000 Coca-Cola Enterprises, Inc................... 296,938 357,500
9,100 Comcast Corp. Class A........................ 267,169 534,056
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
2,700 Consolidated Stores Corp. (a)................ $ 102,569 $ 54,506
1,900 Cooper Tire & Rubber Co...................... 41,743 38,831
5,400 Costco Companies, Inc. (a)................... 225,161 389,812
9,700 CVS Corp..................................... 320,837 533,500
4,022 Dana Corp.................................... 174,433 164,399
3,400 Darden Restaurants, Inc...................... 40,694 61,200
10,800 Dayton Hudson Corp........................... 355,038 585,900
2,700 Dillard's, Inc. Class A...................... 96,748 76,612
50,800 Disney (Walt) Co............................. 1,501,854 1,524,000
4,525 Dollar General Corp.......................... 147,346 106,903
3,400 Donnelley (R.R.) & Sons Co................... 127,518 148,962
5,200 Federated Department Stores, Inc. (a) 217,609 226,525
800 Fleetwood Enterprises, Inc................... 29,925 27,800
30,000 Ford Motor Co................................ 1,120,355 1,760,625
1,800 Fruit of the Loom, Inc. Class A (a).......... 56,761 24,862
7,000 Gannett Co., Inc............................. 370,801 463,312
14,475 Gap, Inc..................................... 358,975 814,219
16,200 General Motors Corp.......................... 969,884 1,159,312
3,900 Goodyear Tire & Rubber Co.................... 230,234 196,706
900 Great Atlantic & Pacific Tea Co., Inc........ 27,549 26,662
1,700 Harcourt General, Inc........................ 84,708 90,419
2,500 Harrah's Entertainment, Inc. (a)............. 50,063 39,219
3,200 Hasbro, Inc.................................. 99,880 115,600
6,400 Hilton Hotels Corp........................... 178,328 122,400
38,700 Home Depot, Inc.............................. 1,197,915 2,367,956
900 Jostens, Inc................................. 21,850 23,569
1,800 King World Productions, Inc. (a)............. 39,692 52,987
12,200 Kmart Corp. (a).............................. 167,777 186,812
1,900 Knight-Ridder, Inc........................... 94,151 97,137
3,900 Kohl's Corp. (a)............................. 216,318 239,606
6,400 Kroger Co. (a)............................... 228,739 387,200
5,600 Limited (The), Inc........................... 135,688 163,100
1,600 Liz Claiborne, Inc........................... 70,100 50,500
1,000 Longs Drug Stores Corp....................... 31,291 37,500
8,700 Lowe's Companies, Inc........................ 233,308 445,331
6,200 Marriott International, Inc. Class A......... 196,388 179,800
7,200 Mattel, Inc.................................. 250,888 164,250
5,800 May Department Stores Co..................... 313,815 350,175
2,300 Maytag Corp.................................. 80,492 143,175
16,900 McDonald's Corp.............................. 899,413 1,294,962
2,400 McGraw-Hill Companies, Inc................... 156,237 244,500
1,300 Meredith Corp................................ 41,620 49,237
4,400 Mirage Resorts, Inc. (a)..................... 106,009 65,725
2,200 Moore Corp. Ltd.............................. 36,527 24,200
1,700 Navistar International Corp. (a)............. 35,526 48,450
4,700 New York Times Co. Class A................... 128,809 163,031
7,100 Nike, Inc. Class B........................... 368,366 287,994
3,700 Nordstrom, Inc............................... 99,765 128,344
1,900 PACCAR, Inc.................................. 81,680 78,137
6,300 Penney (J.C.) Co., Inc....................... 369,224 295,312
1,600 Pep Boys-Manny, Moe & Jack................... 41,429 25,100
1,400 Reebok International Ltd. (a)................ 38,134 20,825
6,400 Rite Aid Corp................................ 191,992 317,200
8,000 RJR Nabsico Holdings Corp.................... 215,151 237,500
900 Russell Corp................................. 25,669 18,281
12,100 Safeway, Inc. (a)............................ 662,188 737,344
9,700 Sears, Roebuck & Co.......................... 495,638 412,250
600 Springs Industries, Inc. Class A............. 32,932 24,863
7,700 Staples, Inc................................. 220,956 336,394
3,000 SUPERVALU, Inc............................... 56,436 84,000
8,300 SYSCO Corp................................... 171,106 227,731
</TABLE>
57
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
2,500 Tandy Corp................................... $ 89,338 $ 102,969
13,300 Tele-Communications, Inc. Class A (a) 334,291 735,656
30,400 Time Warner, Inc............................. 985,740 1,886,700
2,000 Times Mirror Co. Class A..................... 112,743 112,000
8,000 TJX Companies, Inc........................... 169,167 232,000
6,400 Toys R Us, Inc. (a).......................... 179,588 108,000
3,000 Tribune Co................................... 164,106 198,000
3,800 Tricon Global Restaurants, Inc. (a).......... 117,014 190,475
3,000 TRW, Inc..................................... 162,919 168,563
3,000 V. F. Corp................................... 136,391 140,625
8,800 Viacom, Inc. Class B (a)..................... 379,635 651,200
55,800 Wal-Mart Stores, Inc......................... 2,373,302 4,544,213
12,400 Walgreen Co.................................. 395,498 726,175
3,100 Wendy's International, Inc................... 68,807 67,619
1,900 Whirlpool Corp............................... 104,832 105,213
3,700 Winn-Dixie Stores, Inc....................... 149,216 166,038
------------- -------------
24,972,604 33,849,972
------------- -------------
CONSUMER STAPLES-10.63%
1,400 Alberto-Culver Co. Class B................... 38,217 37,363
11,900 Anheuser-Busch Companies, Inc................ 537,177 780,938
14,644 Archer-Daniels-Midland Co.................... 277,448 251,694
6,500 Avon Products, Inc........................... 220,300 287,625
7,100 Bestfoods.................................... 331,014 378,075
1,700 Brown-Forman Corp. Class B (a)............... 88,991 128,669
11,100 Campbell Soup Co............................. 530,051 610,500
5,000 Cardinal Health, Inc......................... 268,340 379,375
21,136 Cendant Corp. (a)............................ 542,071 402,905
2,600 Clorox Co.................................... 198,388 303,713
61,100 Coca-Cola Co................................. 3,988,285 4,086,063
7,300 Colgate-Palmolive Co......................... 515,429 677,988
12,000 ConAgra, Inc................................. 353,719 378,000
900 Coors (Adolph) Co. Class B................... 36,207 50,794
5,700 Corning, Inc................................. 226,751 256,500
8,000 Eastman Kodak Co............................. 589,048 576,000
3,200 Ecolab, Inc.................................. 78,553 115,800
4,300 Fortune Brands, Inc.......................... 147,262 135,988
3,800 General Mills, Inc........................... 254,214 295,450
27,600 Gillette Co.................................. 1,267,702 1,333,425
9,000 Heinz (H.J.) Co.............................. 433,291 509,625
3,500 Hershey Foods Corp........................... 212,934 217,656
2,600 International Flavors & Fragrances, Inc. 120,576 114,888
33,300 Johnson & Johnson Co......................... 2,171,168 2,793,038
10,000 Kellogg Co................................... 390,507 341,250
200 NACCO Industries, Inc. Class A............... 20,871 18,400
4,000 Newell Co.................................... 159,635 165,000
36,300 PepsiCo, Inc................................. 1,261,587 1,486,031
60,300 Philip Morris Companies, Inc................. 2,549,528 3,226,050
5,900 Pioneer Hi-Bred International, Inc........... 175,382 159,300
1,100 Polaroid Corp................................ 49,698 20,556
33,000 Procter & Gamble Co.......................... 2,367,468 3,013,313
3,400 Quaker Oats Co............................... 160,918 202,300
7,700 Ralston-Ralston Purina Group................. 225,967 249,288
3,700 Rubbermaid, Inc.............................. 105,404 116,319
23,000 Sara Lee Corp................................ 551,883 648,313
9,700 Seagram (The) Co. Ltd........................ 357,344 368,600
1,400 Tupperware Corp.............................. 47,616 23,013
15,900 Unilever NV NY Shares........................ 925,728 1,318,706
4,600 UST, Inc..................................... 140,427 160,425
2,900 Wrigley (WM.) Jr. Co......................... 207,688 259,731
------------- -------------
23,124,787 26,878,667
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
ENERGY & RELATED-6.16%
4,500 AES Corp. (a)................................ $ 168,669 $ 213,188
2,200 Amerada Hess Corp............................ 119,144 109,450
3,000 Anadarko Petroleum Corp...................... 105,264 92,625
2,400 Apache Corp.................................. 81,794 60,750
8,000 Atlantic Richfield Co........................ 573,995 522,000
8,100 Baker Hughes, Inc............................ 230,972 143,269
4,405 Burlington Resources, Inc.................... 190,310 157,754
16,200 Chevron Corp................................. 1,221,028 1,343,588
5,200 Coastal Corp................................. 149,223 181,675
2,100 Columbia Energy Group........................ 99,671 121,275
2,400 Consolidated Natural Gas Co.................. 125,144 129,600
600 Eastern Enterprises.......................... 25,175 26,250
8,200 Enron Corp................................... 361,409 467,913
60,300 Exxon Corp................................... 3,666,311 4,409,438
10,800 Halliburton Co............................... 422,171 319,950
1,200 Helmerich & Payne, Inc....................... 40,580 23,250
1,200 Kerr-McGee Corp.............................. 75,345 45,900
19,300 Mobil Corp................................... 1,370,687 1,681,513
2,700 New Century Energies, Inc.................... 130,567 131,625
1,200 NICOR, Inc................................... 44,614 50,700
800 ONEOK, Inc................................... 25,917 28,900
2,600 Oryx Energy Co. (a).......................... 54,572 34,938
900 People's Energy Corp. (with rights).......... 31,743 35,888
6,400 Phillips Petroleum Co........................ 282,357 272,800
2,000 Rowan Companies, Inc. (a).................... 44,445 20,000
53,100 Royal Dutch Petroleum Co. NY Shares 2,621,083 2,542,163
13,400 Schlumberger Ltd............................. 838,924 618,075
5,955 Sempra Energy................................ 151,838 151,108
2,700 Sonat, Inc................................... 114,716 73,069
2,300 Sunoco, Inc.................................. 81,719 82,944
13,200 Texaco, Inc.................................. 725,677 697,950
6,092 Union Pacific Resources Group, Inc........... 138,459 55,209
5,900 Unocal Corp.................................. 223,061 172,206
7,600 USX-Marathon Group........................... 231,481 228,950
10,500 Williams Companies, Inc...................... 279,174 327,469
------------- -------------
15,047,239 15,573,382
------------- -------------
FINANCE-15.36%
3,544 Aetna, Inc................................... 296,368 278,647
20,400 Allstate Corp................................ 794,038 787,950
11,200 American Express Co.......................... 885,136 1,145,200
6,210 American General Corp........................ 335,452 484,380
25,975 American International Group, Inc............ 1,825,641 2,509,834
4,250 Aon Corp..................................... 232,320 235,344
17,912 Associates First Capital Corp. Class A....... 483,330 759,021
29,032 Banc One Corp................................ 1,336,402 1,482,447
18,900 Bank of New York Co., Inc.................... 471,026 760,725
42,894 BankAmerica Corp............................. 2,570,086 2,579,002
7,200 BankBoston Corp.............................. 306,162 280,350
2,400 Bankers Trust Corp........................... 244,547 205,050
7,300 BB&T Corp.................................... 237,244 294,281
2,800 Bear Stearns Companies, Inc.................. 151,369 104,650
2,500 Block H & R, Inc............................. 96,082 112,500
1,600 Capital One Financial Corp................... 195,348 184,000
21,100 Chase Manhattan Corp......................... 1,144,504 1,436,119
4,100 Chubb Corp................................... 268,428 265,988
5,200 CIGNA Corp................................... 301,496 402,025
4,100 Cincinnati Financial Corp.................... 178,377 150,163
56,291 Citigroup, Inc............................... 2,675,343 2,786,405
3,850 Comerica, Inc................................ 196,076 262,522
</TABLE>
58
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
7,682 Conseco, Inc................................. $ 313,486 $ 234,781
2,700 Countrywide Credit Industries, Inc........... 110,117 135,506
3,600 Equifax, Inc................................. 124,493 123,075
25,700 Fannie Mae................................... 1,328,734 1,901,800
6,625 Fifth Third Bancorp.......................... 307,384 472,445
24,570 First Union Corp............................. 1,185,707 1,494,163
14,000 Fleet Financial Group, Inc................... 475,408 625,625
6,200 Franklin Resources, Inc...................... 315,845 198,400
16,800 Freddie Mac.................................. 650,646 1,082,550
1,400 Golden West Financial Corp................... 113,220 128,363
5,800 Hartford Financial Services Group, Inc. 269,164 318,275
12,173 Household International, Inc................. 446,122 482,355
5,180 Huntington Bancshares, Inc................... 159,320 155,724
4,300 J.P. Morgan & Co., Inc....................... 476,411 451,769
2,650 Jefferson-Pilot Corp......................... 137,056 198,750
11,300 KeyCorp...................................... 349,719 361,600
2,900 Lehman Brothers Holdings, Inc................ 162,542 127,781
2,500 Lincoln National Corp........................ 183,420 204,531
2,800 Loews Corp................................... 264,113 275,100
6,350 Marsh & McLennan Companies, Inc.............. 312,885 371,078
2,500 MBIA, Inc.................................... 155,039 163,906
18,675 MBNA Corp.................................... 340,497 465,708
6,500 Mellon Bank Corp............................. 343,580 446,875
3,900 Mercantile Bancorporation, Inc............... 209,229 179,888
8,800 Merrill Lynch & Co........................... 578,101 587,400
2,800 MGIC Investment Corp......................... 132,363 111,475
14,415 Morgan Stanley Dean Witter & Co.............. 805,507 1,023,465
8,200 National City Corp........................... 512,659 594,500
2,800 Northern Trust Corp.......................... 200,784 244,475
4,000 Paychex, Inc................................. 205,475 205,750
7,500 PNC Bank Corp................................ 348,724 405,938
1,800 Progressive Corp............................. 212,911 304,875
3,300 Provident Companies, Inc..................... 119,026 136,950
3,550 Providian Financial Corp..................... 116,908 266,250
1,200 Pulte Corp................................... 24,594 33,375
5,500 Regions Financial Corp....................... 195,792 221,719
2,700 Republic New York Corp....................... 140,744 123,019
3,500 SAFECO Corp.................................. 157,298 150,281
9,900 Schwab (Charles) Corp........................ 224,217 556,256
4,100 SLM Holding Corp............................. 194,255 196,800
5,858 St. Paul Companies, Inc...................... 219,785 203,566
4,000 State Street Corp............................ 231,864 278,250
4,300 Summit Bancorp............................... 208,362 187,856
5,400 SunAmerica, Inc.............................. 264,003 438,075
5,200 SunTrust Banks, Inc.......................... 328,750 397,800
6,650 Synovus Financial Corp....................... 144,962 162,094
3,500 Torchmark Corp............................... 114,401 123,594
1,500 Transamerica Corp............................ 155,444 173,250
3,300 Union Planters Corp.......................... 164,313 149,531
3,400 UNUM Corp.................................... 152,915 198,475
18,271 US Bancorp................................... 598,359 648,621
5,100 Wachovia Corp................................ 376,202 445,931
14,572 Washington Mutual, Inc....................... 566,327 556,468
40,100 Wells Fargo Co............................... 1,257,676 1,601,494
------------- -------------
32,911,633 38,834,184
------------- -------------
HEALTH CARE-10.70%
37,900 Abbott Laboratories.......................... 1,303,966 1,857,100
1,600 Allergan, Inc................................ 66,392 103,600
2,100 ALZA Corp. (a)............................... 79,240 109,725
32,700 American Home Products Corp.................. 1,344,417 1,841,419
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
6,300 Amgen, Inc. (a).............................. $ 382,564 $ 658,744
1,400 Bard (C.R.), Inc............................. 50,282 69,300
1,400 Bausch & Lomb, Inc........................... 58,210 84,000
7,100 Baxter International, Inc.................... 376,020 456,619
6,100 Becton, Dickinson and Co..................... 171,870 260,394
2,800 Biomet, Inc.................................. 69,112 112,700
9,600 Boston Scientific Corp. (a).................. 278,354 257,400
24,600 Bristol-Myers Squibb Co...................... 2,126,842 3,291,788
15,850 Columbia/HCA Healthcare Corp................. 503,700 392,288
3,700 Guidant Corp. (a)............................ 209,406 407,925
2,700 HCR Manor Care, Inc. (a)..................... 82,990 79,313
10,500 HEALTHSOUTH Corp. (a)........................ 248,618 162,094
4,100 Humana, Inc. (a)............................. 86,747 73,031
4,100 IMS Health, Inc.............................. 179,117 309,294
27,300 Lilly (Eli) & Co. (with rights).............. 1,592,559 2,426,288
1,800 Mallinckrodt, Inc............................ 59,824 55,463
12,200 Medtronic, Inc............................... 585,692 905,850
29,500 Merck & Co., Inc............................. 3,129,731 4,356,781
1,100 Millipore Corp............................... 40,548 31,281
32,200 Pfizer, Inc.................................. 2,360,402 4,039,088
12,600 Pharmacia & Upjohn, Inc...................... 510,000 713,475
36,400 Schering-Plough Corp......................... 1,155,513 2,011,100
2,100 St. Jude Medical, Inc. (a)................... 73,350 58,144
7,600 Tenet Healthcare Corp. (a)................... 221,721 199,500
4,800 United HealthCare Corp....................... 243,448 206,700
20,400 Warner-Lambert Co............................ 969,856 1,533,825
------------- -------------
18,560,491 27,064,229
------------- -------------
METAL & MINING-0.55%
5,600 Alcan Aluminium Ltd.......................... 172,126 151,550
4,600 Aluminum Co. of America...................... 339,051 342,988
1,000 ASARCO, Inc.................................. 28,395 15,063
9,100 Barrick Gold Corp............................ 198,793 177,450
5,600 Battle Mountain Gold Co...................... 33,137 23,100
3,100 Bethlehem Steel Corp. (a).................... 32,946 25,963
2,300 Cyprus Amax Minerals Co...................... 44,075 23,000
4,200 Freeport-McMoRan Copper & Gold, Inc. (a)..... 95,559 43,838
5,900 Homestake Mining Co.......................... 72,234 54,206
4,100 Inco Ltd..................................... 90,311 43,306
4,101 Newmont Mining Corp.......................... 130,467 74,074
2,200 Nucor Corp................................... 109,980 95,150
1,400 Phelps Dodge Corp............................ 84,549 71,225
6,100 Placer Dome, Inc............................. 101,402 70,150
1,700 Reynolds Metals Co........................... 102,538 89,569
2,200 USX-US Steel Group........................... 67,504 50,600
2,400 Worthington Industries, Inc.................. 43,106 30,000
------------- -------------
1,746,173 1,381,232
------------- -------------
TRANSPORTATION-0.93%
4,500 AMR Corp. (a)................................ 255,506 267,188
11,600 Burlington Northern Santa Fe Corp............ 355,823 391,500
5,400 CSX Corp. ( with rights)..................... 270,305 224,100
3,500 Delta Air Lines, Inc......................... 182,936 182,000
3,680 FDX Corp. (a)................................ 215,190 327,520
8,100 Laidlaw, Inc................................. 103,604 81,506
9,300 Norfolk Southern Corp........................ 293,422 294,694
8,225 Southwest Airlines Co........................ 128,713 184,548
6,100 Union Pacific Corp........................... 347,579 274,881
2,200 US Airways Group, Inc. (a)................... 117,184 114,400
------------- -------------
2,270,262 2,342,337
------------- -------------
</TABLE>
59
<PAGE>
FORTIS SERIES FUND, INC.
S & P 500 INDEX SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
UTILITIES-10.49%
14,200 AirTouch Communications, Inc. (a)............ $ 589,472 $ 1,024,175
6,800 ALLTEL Corp.................................. 273,592 406,725
3,400 Ameren Corp.................................. 131,382 145,138
4,700 American Electric Power Co., Inc............. 211,060 221,194
27,300 Ameritech Corp............................... 1,043,749 1,730,138
44,800 AT&T Corp.................................... 2,273,780 3,371,200
3,700 Baltimore Gas & Electric Co.................. 106,439 114,238
38,518 Bell Atlantic Corp........................... 1,569,053 2,188,304
48,400 BellSouth Corp............................... 1,316,933 2,413,950
3,700 Carolina Power & Light Co.................... 140,980 174,131
5,200 Central & South West Corp.................... 131,563 142,675
3,900 Cinergy Corp................................. 131,297 134,063
5,800 Consolidated Edison, Inc..................... 217,871 306,675
4,800 Dominion Resources, Inc...................... 189,729 224,400
3,600 DTE Energy Co................................ 122,648 154,350
8,953 Duke Energy Corp............................. 461,197 573,552
8,700 Edison International......................... 212,259 242,513
6,100 Entergy Corp................................. 161,911 189,863
5,800 FirstEnergy Corp............................. 152,133 188,863
4,500 FPL Group, Inc............................... 242,728 277,313
4,200 Frontier Corp................................ 105,935 142,800
3,200 GPU, Inc..................................... 117,885 141,400
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
23,900 GTE Corp..................................... $ 1,193,935 $ 1,611,756
7,274 Houston Industries, Inc...................... 179,392 233,677
45,424 MCI WorldCom, Inc. (a)....................... 1,778,638 3,259,172
7,000 Nextel Communications, Inc. Class A (a)...... 216,078 165,375
4,600 Niagara Mohawk Power Corp. (a)............... 56,676 74,175
3,700 Northern States Power Co..................... 96,282 102,675
7,300 PacifiCorp................................... 160,287 153,756
5,500 PECO Energy Co............................... 142,806 228,938
9,400 PG&E Corp.................................... 258,685 296,100
3,700 PP&L Resources, Inc.......................... 84,857 103,138
5,700 Public Service Enterprise Group, Inc......... 169,997 228,000
48,502 SBC Communications, Inc...................... 1,689,031 2,600,920
17,200 Southern Co.................................. 417,877 499,875
10,700 Sprint Corp. (FON Group)..................... 554,279 900,138
10,250 Sprint Corp. (PCS Group) (a)................. 157,445 237,031
6,902 Texas Utilities Co........................... 280,414 322,237
5,300 Unicom Corp.................................. 155,296 204,381
12,419 US WEST, Inc................................. 522,648 802,578
------------- -------------
18,018,219 26,531,582
------------- -------------
TOTAL COMMON STOCKS.......................... $ 192,431,679 $ 248,034,852
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-2.35%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-2.17%
$5,498,326 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 5,498,326
-------------
U.S. TREASURY BILLS-0.18%
460,000 US Treasury Bill, 4.45%, 3-25-1999 (e)....... 455,574
-------------
TOTAL SHORT-TERM INVESTMENTS................. 5,953,900
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$198,385,579) (b).......................... $ 253,988,752
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $198,462,125 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $64,066,430
Unrealized depreciation.......................................... (8,539,803)
- -----------------------------------------------------------------------------
Net unrealized appreciation...................................... $55,526,627
- -----------------------------------------------------------------------------
</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 2.14% of total net assets as of December 31, 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 12/31/98
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's 500....................................... 18 $5,604,750 March 99 $ 125,725
</TABLE>
60
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-96.85%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-1.47%
50,900 AlliedSignal, Inc............................ $ 1,972,653 $ 2,255,506
8,000 Raytheon Co. Class B......................... 436,101 426,000
------------- -------------
2,408,754 2,681,506
------------- -------------
APPAREL-0.40%
29,200 Warnaco Group Class A........................ 957,944 737,300
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.51%
15,600 Federal-Mogul Corp........................... 789,540 928,200
------------- -------------
BANKS-7.09%
46,100 Bank of New York Company, Inc................ 1,390,671 1,855,525
13,990 Bank One Corp................................ 756,756 714,364
28,700 BankAmerica Corp............................. 1,905,905 1,725,587
17,900 Chase Manhattan Corp......................... 1,038,252 1,218,319
31,200 First Union Corp............................. 1,655,128 1,897,350
23,300 Mellon Bank Corp............................. 1,177,487 1,601,875
2,100 National City Corp........................... 138,049 152,250
3,000 State Street Corporation..................... 158,218 208,687
7,200 U.S. Bancorp................................. 303,528 255,600
83,500 Wells Fargo Co............................... 2,685,502 3,334,781
------------- -------------
11,209,496 12,964,338
------------- -------------
BEVERAGE-0.86%
3,700 Coca-Cola Co................................. 212,095 247,437
32,300 PepsiCo, Inc................................. 1,120,026 1,322,281
------------- -------------
1,332,121 1,569,718
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.58%
12,700 Biogen, Inc. (a)............................. 682,904 1,054,100
------------- -------------
BROADCASTING-1.01%
7,200 Chancellor Media Corporation (a)............. 260,834 344,700
36,400 Fox Entertainment Group, Inc................. 847,565 916,825
9,000 Jacor Communications, Inc. (a)............... 424,168 579,375
------------- -------------
1,532,567 1,840,900
------------- -------------
BUILDING MATERIALS-0.58%
37,000 Masco Corp................................... 891,855 1,063,750
------------- -------------
BUSINESS SERVICES AND SUPPLIES-5.01%
10,500 Ceridian Corp. (a)........................... 619,376 733,031
13,600 Equifax, Inc................................. 511,703 464,950
35,400 First Data Corp.............................. 1,200,421 1,121,737
21,500 Galileo International, Inc................... 726,985 935,250
26,600 Omnicom Group, Inc........................... 1,130,266 1,542,800
57,986 Tyco International Ltd....................... 2,440,355 4,374,319
------------- -------------
6,629,106 9,172,087
------------- -------------
CABLE TELEVISION-0.43%
16,900 Media One Group, Inc. (a).................... 503,918 794,300
------------- -------------
CHEMICALS-0.28%
12,700 Great Lakes Chemical Corp.................... 537,520 508,000
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-2.20%
7,700 Ascend Communications, Inc. (a).............. 390,306 506,275
19,725 Cisco Systems, Inc. (a)...................... 671,685 1,830,727
12,300 Dell Computer Corp. (a)...................... 568,159 900,206
9,300 Sun Microsystems, Inc. (a)................... 455,588 796,312
------------- -------------
2,085,738 4,033,520
------------- -------------
COMPUTER-SOFTWARE-8.48%
4,800 Adobe Systems, Inc........................... 197,147 224,400
13,700 America Online, Inc. (a)..................... 687,699 1,983,075
19,100 Automatic Data Processing, Inc............... 1,083,917 1,531,581
31,800 BMC Software, Inc. (a)....................... 1,001,333 1,417,087
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
4,200 Computer Associates International, Inc. $ 163,367 $ 179,025
10,700 Compuware Corp. (a).......................... 724,095 835,937
26,400 Microsoft Corp. (a).......................... 2,155,506 3,661,350
30,600 Networks Associates, Inc. (a)................ 1,229,474 2,027,250
23,800 Oracle Corp. (a)............................. 617,833 1,026,375
71,000 Parametric Technology Corp. (a).............. 1,259,342 1,162,625
17,700 Sterling Commerce, Inc. (a).................. 718,799 796,500
16,900 SunGard Data Systems, Inc. (a)............... 412,185 670,719
------------- -------------
10,250,697 15,515,924
------------- -------------
CONSUMER DISCRETIONARY-0.57%
28,800 Hasbro, Inc.................................. 1,044,850 1,040,400
------------- -------------
CONSUMER GOODS-0.54%
10,700 Colgate-Palmolive Co......................... 737,767 993,762
------------- -------------
COSMETICS AND SUNDRIES-0.37%
13,900 Gillette Co.................................. 643,725 671,544
------------- -------------
DIVERSIFIED COMPANIES-1.35%
10 Berkshire Hathaway, Inc. Class A............. 652,640 710,500
53,700 CBS Corp. (a)................................ 1,590,918 1,758,675
------------- -------------
2,243,558 2,469,175
------------- -------------
DRUGS-9.06%
27,100 American Home Products Corp.................. 1,139,871 1,526,069
23,600 Bristol-Myers Squibb Co...................... 2,385,396 3,157,975
14,700 Johnson & Johnson............................ 891,560 1,232,962
15,100 Lilly (Eli) & Co. (with rights).............. 966,163 1,342,012
15,600 Merck & Co., Inc............................. 1,648,875 2,303,925
19,800 Pfizer, Inc.................................. 1,312,573 2,483,662
4,200 Pharmacia and Upjohn, Inc.................... 208,429 237,825
31,900 Schering-Plough Corp......................... 1,006,720 1,762,475
33,600 Warner-Lambert Co............................ 1,719,694 2,526,300
------------- -------------
11,279,281 16,573,205
------------- -------------
ELECTRICAL-COMPONENTS AND PARTS-0.33%
6,700 Linear Technology Corp....................... 415,229 600,069
------------- -------------
ELECTRICAL EQUIPMENT-1.31%
23,400 General Electric Co.......................... 1,639,592 2,388,262
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-0.58%
15,400 Hewlett-Packard Co........................... 953,477 1,052,012
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-2.65%
18,700 Intel Corp................................... 1,572,852 2,217,119
22,700 Maxim Integrated Products, Inc. (a).......... 649,018 991,706
9,500 Texas Instruments, Inc....................... 614,918 812,844
12,600 Xilinx, Inc. (a)............................. 609,649 820,575
------------- -------------
3,446,437 4,842,244
------------- -------------
FINANCIAL SERVICES-8.69%
11,400 American Express Co.......................... 989,010 1,165,650
32,200 Associates First Capital Corp. Class A....... 1,218,914 1,364,475
20,100 Block H & R, Inc............................. 751,677 904,500
8,400 Capital One Financial Corp................... 706,024 966,000
77,949 Citigroup, Inc............................... 3,772,264 3,858,475
34,400 Fannie Mae................................... 1,852,171 2,545,600
61,900 Freddie Mac.................................. 2,606,851 3,988,681
5,500 Household International, Inc................. 256,246 217,938
9,800 Morgan Stanley Dean Witter & Co.............. 583,903 695,800
2,550 Providian Financial Corp..................... 129,559 191,250
------------- -------------
12,866,619 15,898,369
------------- -------------
FOOD-3.60%
10,000 Campbell Soup Co............................. 538,857 550,000
2,100 General Mills, Inc........................... 137,347 163,275
11,400 Heinz (H.J.) Co.............................. 531,217 645,525
</TABLE>
61
<PAGE>
FORTIS SERIES FUND, INC.
BLUE CHIP STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
12,100 Ralston -- Ralston Purina Group.............. $ 384,338 $ 391,738
36,600 Rentokil Initial plc......................... 199,219 273,723
43,700 Safeway, Inc. (a)............................ 1,264,929 2,662,969
42,000 Sara Lee Corp................................ 975,872 1,183,875
14,470 U.S. Foodservice (a)......................... 513,632 709,030
------------- -------------
4,545,411 6,580,135
------------- -------------
HEALTH CARE SERVICES-2.67%
6,885 Cardinal Health, Inc......................... 411,169 522,399
51,200 HBO & Co..................................... 1,306,267 1,468,800
42,200 HEALTHSOUTH Corp. (a)........................ 1,044,940 651,463
10,600 McKesson Corp................................ 777,880 838,063
32,500 United HealthCare Corp....................... 1,650,045 1,399,531
------------- -------------
5,190,301 4,880,256
------------- -------------
HOUSEHOLD PRODUCTS-1.21%
21,800 Kimberly-Clark Corp.......................... 1,057,851 1,188,100
11,200 Procter & Gamble Co.......................... 778,900 1,022,700
------------- -------------
1,836,751 2,210,800
------------- -------------
INSURANCE-3.52%
42,400 Ace Ltd...................................... 1,169,700 1,460,150
10,700 Allstate Corp................................ 454,346 413,288
3,000 American International Group, Inc............ 261,827 289,875
23,676 Exel Limited Class A......................... 1,409,481 1,775,700
2,600 Fairfax Financial Holdings Ltd (f)........... 844,704 868,359
23,400 Travelers Property Casualty Corp............. 872,483 725,400
15,600 Unum Corp.................................... 767,988 910,650
------------- -------------
5,780,529 6,443,422
------------- -------------
LEISURE TIME-AMUSEMENTS-0.92%
24,500 Carnival Corp. Class A....................... 656,407 1,176,000
16,900 Disney (Walt) Co............................. 573,940 507,000
------------- -------------
1,230,347 1,683,000
------------- -------------
MACHINERY-0.40%
16,200 Teleflex, Inc................................ 488,229 739,125
------------- -------------
MACHINERY-OIL AND WELL-0.45%
27,700 Halliburton Co............................... 1,049,890 820,613
------------- -------------
MACHINERY-TOOLS-1.65%
50,400 Danaher Corp................................. 1,536,730 2,737,350
4,100 SPX Corp..................................... 230,038 274,700
------------- -------------
1,766,768 3,012,050
------------- -------------
MEDIA-1.32%
12,700 Clear Channel Communications, Inc. (a)....... 629,969 692,150
62,800 Infinity Broadcasting Corp. (a).............. 1,341,122 1,719,150
------------- -------------
1,971,091 2,411,300
------------- -------------
MEDICAL SUPPLIES-0.33%
6,800 Arterial Vascular Engineering, Inc. (a)...... 288,211 357,000
8,600 STERIS Corp. (a)............................. 238,779 244,563
------------- -------------
526,990 601,563
------------- -------------
MEDICAL TECHNOLOGY-0.71%
9,100 Guidant Corp................................. 684,360 1,003,275
4,100 Medtronic, Inc. (with rights)................ 216,022 304,425
------------- -------------
900,382 1,307,700
------------- -------------
METALS-FABRICATING-0.40%
17,600 Newell Co.................................... 756,521 726,000
------------- -------------
OFFICE EQUIPMENT AND SUPPLIES-1.68%
13,200 Compaq Computer Corp......................... 425,428 553,575
18,300 EMC Corp. (a)................................ 694,445 1,555,500
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
5,200 International Business Machines Corp. $ 592,448 $ 960,700
------------- -------------
1,712,321 3,069,775
------------- -------------
OIL AND GAS FIELD SERVICES-0.11%
4,300 Schlumberger Ltd............................. 235,543 198,338
------------- -------------
OIL-CRUDE PETROLEUM AND GAS-2.14%
9,400 British Petroleum Co. plc ADR................ 701,644 842,475
9,200 Chevron Corp................................. 765,907 763,025
21,600 Mobil Corp................................... 1,519,233 1,881,900
14,400 USX-Marathon Group, Inc...................... 497,346 433,800
------------- -------------
3,484,130 3,921,200
------------- -------------
PAPER-0.43%
19,800 Fort James Corp.............................. 783,905 792,000
------------- -------------
PERSONAL SERVICES-0.32%
15,400 Service Corp. International.................. 541,137 586,163
------------- -------------
PHOTOGRAPHIC-0.23%
5,900 Eastman Kodak Co............................. 451,031 424,800
------------- -------------
PRINTING-0.23%
8,000 Valassis Communications, Inc. (a)............ 212,612 413,000
------------- -------------
PUBLISHING-2.14%
40,600 Time Warner, Inc............................. 1,388,401 2,519,738
21,100 Tribune Co................................... 1,240,481 1,392,600
------------- -------------
2,628,882 3,912,338
------------- -------------
RAILROAD AND RAILROAD EQUIPMENT-0.73%
16,000 Burlington Northern Santa Fe Corp............ 490,971 540,000
25,000 Norfolk Southern Corp........................ 797,538 792,188
------------- -------------
1,288,509 1,332,188
------------- -------------
REAL ESTATE-INVESTMENT TRUST-0.90%
27,500 Crescent Real Estate Equities Co............. 837,221 632,500
44,800 Starwood Hotels & Resorts.................... 1,762,736 1,016,400
------------- -------------
2,599,957 1,648,900
------------- -------------
RESTAURANTS AND FRANCHISING-0.76%
18,200 McDonald's Corp.............................. 1,072,549 1,394,575
------------- -------------
RETAIL-DEPARTMENT STORES-0.80%
6,300 Dayton Hudson Corp........................... 286,830 341,775
35,800 Saks, Inc. (a)............................... 976,234 1,129,938
------------- -------------
1,263,064 1,471,713
------------- -------------
RETAIL-DISCOUNT STORES-1.07%
24,000 Wal-Mart Stores, Inc......................... 1,062,673 1,954,500
------------- -------------
RETAIL-GROCERY-1.31%
30,800 Fred Meyer, Inc. (a)......................... 1,255,586 1,855,700
9,000 Kroger Co. (a)............................... 434,073 544,500
------------- -------------
1,689,659 2,400,200
------------- -------------
RETAIL-MISCELLANEOUS-1.05%
34,942 CVS Corp..................................... 1,012,693 1,921,810
------------- -------------
RETAIL-SPECIALTY-1.79%
29,300 Cendant Corp. (a)............................ 857,310 558,531
24,800 Home Depot, Inc.............................. 648,567 1,517,450
24,300 Rite Aid Corp................................ 888,156 1,204,369
------------- -------------
2,394,033 3,280,350
------------- -------------
TELECOMMUNICATIONS-0.97%
1,400 Lucent Technologies, Inc..................... 97,567 154,000
13,400 Nokia Oyj Corp., ADR Class A................. 690,577 1,613,863
------------- -------------
788,144 1,767,863
------------- -------------
TELECOMMUNICATION EQUIPMENT-0.16%
4,200 Tellabs, Inc. (a)............................ 183,936 287,963
------------- -------------
</TABLE>
62
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
TELEPHONE SERVICES-6.11%
19,500 AirTouch Communications, Inc. (a)............ $ 972,489 $ 1,406,438
24,900 ALLTEL Corp.................................. 1,002,523 1,489,331
15,800 AT & T Corp.................................. 782,000 1,188,950
9,800 GTE Corp..................................... 551,609 660,888
60,531 MCI WorldCom, Inc. (a)....................... 2,164,849 4,343,099
39,000 SBC Communications, Inc...................... 1,303,505 2,091,375
------------- -------------
6,776,975 11,180,081
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
TOBACCO-1.22%
41,800 Philip Morris Companies, Inc................. $ 1,783,731 $ 2,236,300
------------- -------------
WASTE DISPOSAL-1.17%
46,100 Waste Management, Inc........................ 2,147,792 2,149,413
------------- -------------
TOTAL COMMON STOCKS.......................... $ 135,239,181 $ 177,152,119
------------- -------------
------------- -------------
</TABLE>
PREFERRED STOCKS-0.14%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
TELECOMMUNICATIONS-0.14%
3,600 Telecomunicacoes Brasileiras S.A. ADR
Preferred (a).............................. $ 372,605 $ 261,675
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 135,611,786 $ 177,413,794
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-3.31%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-1.75%
$1,000,000 Societe General NY, 5.73% Certificate of
Deposit, 1-6-1999.......................... $ 999,975
1,000,000 Statoil, 5.27%, 1-21-1999 (e)................ 996,996
500,000 National Australia Funding, 5.42%,
1-8-1999................................... 499,409
700,000 FCAR Owner Trust, 5.27%, 1-19-1999........... 698,097
-------------
3,194,477
-------------
INDUSTRIAL-0.54%
500,000 Ciesco, LP, 5.32%, 2-5-1999.................. 497,400
500,000 Ciesco, LP, 5.37%, 2-5-1999.................. 497,375
-------------
994,775
-------------
INVESTMENT COMPANY-1.02%
1,863,541 First American Prime Obligation Fund, Current
rate -- 4.99%.............................. 1,863,541
-------------
TOTAL SHORT-TERM INVESTMENTS................. 6,052,793
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$141,664,579) (b).......................... $ 183,466,587
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $142,195,263 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $44,721,990
Unrealized depreciation..................................... (3,450,666)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $41,271,324
- -------------------------------------------------------------------------
</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 2.93% of total net assets as of December 31, 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". These securities have been determined to be
illiquid under the guidelines established by the Board of Directors. The
aggregate value of these securities at December 31, 1998, was $996,996,
which represents 0.55% 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". This investment has been identified by portfolio
management as an illiquid security. The portfolio entered into the
following Section 144A security transaction:
<TABLE>
<CAPTION>
Year Acquired Shares/Par Security Cost Basis
- -------------- ----------- ---------------------------------------------------------------------------------- -----------
<S> <C> <C> <C>
1998 2,600 Fairfax Financial Holdings Ltd. $ 844,704
</TABLE>
The aggregate value of this security at December 31, 1998, was $868,359,
which represents 0.47% of total net assets.
63
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-96.84%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
----------- ------------ -------------
<C> <S> <C> <C>
AUSTRALIA-2.33%
181,170 Broken Hill Proprietary Co. Ltd. -- STEEL AND
IRON....................................... $ 1,691,726 $ 1,335,667
159,700 Westpac Banking Corp. Ltd. -- BANKS.......... 825,753 1,069,723
------------ -------------
2,517,479 2,405,390
------------ -------------
DENMARK-1.23%
14,000 Unidanmark A/S Class A -- BANKS.............. 725,373 1,264,828
------------ -------------
FINLAND-1.08%
76,800 Merita plc Class A -- BANKS.................. 393,689 488,399
22,500 UPM-Kymmene Corp. -- PAPER................... 515,520 630,999
------------ -------------
909,209 1,119,398
------------ -------------
FRANCE-15.28%
10,610 Alcatel -- TELECOMMUNICATIONS................ 1,002,308 1,299,137
12,800 Axa -- INSURANCE............................. 892,720 1,856,002
24,500 Banque Nationale de Paris -- BANKS........... 1,218,230 2,018,349
10,610 Compagnie de Saint Gobain -- BUILDING
MATERIALS.................................. 1,457,858 1,498,566
15,400 Elf Aquitaine S.A. -- OIL-CRUDE PETROLEUM AND
GAS........................................ 1,612,657 1,780,889
14,800 Michelin (C.G.D.E.) Class B -- RUBBER AND
PLASTIC.................................... 916,273 592,138
42,288 Rhone -- POULENC S.A. -- BUILDING
MATERIALS.................................. 1,397,889 2,177,156
8,000 Suez Lyonnaise des Eaux -- UTILITIES-WATER
AND SEWER.................................. 1,053,361 1,644,051
11,100 Vivendi -- TELECOMMUNICATIONS................ 1,395,114 2,881,207
------------ -------------
10,946,410 15,747,495
------------ -------------
GERMANY-9.80%
4,038 Allianz AG -- INSURANCE...................... 1,365,524 1,503,098
13,970 DaimlerChrysler AG (a) -- AUTOMOBILE
MANUFACTURERS.............................. 895,104 1,388,060
43,400 Hoechst AG -- CHEMICALS...................... 1,506,126 1,795,305
28,080 Metro AG -- CONSUMER GOODS................... 1,408,027 2,208,501
21,000 Siemens AG -- UTILITIES-ELECTRIC............. 1,533,265 1,380,584
3,700 Thyssen AG -- STEEL AND IRON................. 747,065 699,748
1,895 Viag AG -- ELECTRIC-PRODUCTS................. 908,706 1,120,662
------------ -------------
8,363,817 10,095,958
------------ -------------
HONG KONG-0.96%
39,605 HSBC Holdings plc -- BANKS................... 988,682 986,636
------------ -------------
ITALY-6.07%
238,900 ENI S.p.A. -- OIL-REFINING................... 1,342,480 1,564,712
130,700 San Paolo IMI S.p.A. -- BANKS................ 2,008,427 2,314,478
376,300 Telecom Italia S.p.A -- TELEPHONE SERVICES... 1,559,689 2,373,352
------------ -------------
4,910,596 6,252,542
------------ -------------
JAPAN-14.93%
89,000 Asahi Breweries Ltd. -- BEVERAGE............. 1,147,178 1,313,697
192 Japan Tobacco, Inc. -- TOBACCO............... 1,464,834 1,923,404
66,000 Matsushita Electric Industrial Co.
Ltd. -- ELECTRIC-PRODUCTS.................. 1,178,613 1,169,628
12,300 Nintendo Co. Ltd. -- TOYS.................... 957,374 1,194,016
114 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 1,000,665 881,277
156,000 Nissan Motor Co. Ltd. -- AUTOMOBILE
MANUFACTURERS.............................. 511,056 478,511
38 NTT Mobile Communications Network,
Inc. -- TELECOMMUNICATIONS................. 1,371,415 1,566,489
41,000 Omron Corp. -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 737,397 562,660
22,800 Orix Corp. -- LEASING........................ 1,023,958 1,705,957
22,100 Promise Co. Ltd. -- FINANCIAL SERVICES....... 1,002,922 1,152,021
154,000 Ricoh Co. Ltd. -- OFFICE EQUIPMENT AND
SUPPLIES................................... 1,655,343 1,422,589
18,200 Sony Corp. -- ELECTRONIC COMPONENTS.......... 1,271,976 1,327,890
261,000 Sumitomo Trust & Banking Co. -- BANKS........ 2,055,253 694,149
------------ -------------
15,377,984 15,392,288
------------ -------------
</TABLE>
64
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
----------- ------------ -------------
<C> <S> <C> <C>
MALAYSIA-0.21%
145,000 Genting Berhad (e) -- LEISURE
TIME-AMUSEMENTS............................ $ 590,817 $ 220,304
------------ -------------
NETHERLANDS-3.52%
31,350 Heineken N.V. -- BEVERAGE.................... 990,739 1,887,649
8,900 ING Groep NV -- INSURANCE.................... 505,974 543,001
17,800 Koninklijke Philips Electronics
NV -- ELECTRIC-PRODUCTS.................... 1,015,844 1,195,076
------------ -------------
2,512,557 3,625,726
------------ -------------
SINGAPORE-0.77%
124,000 United Overseas Bank Ltd. -- BANKS........... 601,030 796,606
------------ -------------
SPAIN-5.91%
80,400 Argentaria S.A. -- BANKS..................... 1,462,082 2,085,245
55,500 Endesa S.A. -- ELECTRIC-PRODUCTS............. 1,371,967 1,472,735
56,786 Telefonica S.A. -- TELECOMMUNICATIONS........ 1,595,477 2,528,819
------------ -------------
4,429,526 6,086,799
------------ -------------
SWEDEN-6.96%
104,200 ABB AB Class A -- ELECTRONIC-CONTROLS AND
EQUIPMENT.................................. 1,646,168 1,111,957
84,567 Astra AB Class B -- DRUGS.................... 1,466,970 1,721,422
82,700 Electrolux AB Series B -- HOUSEHOLD
PRODUCTS................................... 1,084,372 1,423,259
73,300 Nordbanken Holding AB -- BANKS............... 406,791 470,231
36,400 Svenska Handelsbanken -- BANKS............... 880,764 1,535,789
39,500 Volvo AB Class B -- AUTOMOBILE
MANUFACTURERS.............................. 1,195,610 906,388
------------ -------------
6,680,675 7,169,046
------------ -------------
SWITZERLAND-6.22%
548 Nestle S.A. Registered -- FOOD............... 680,320 1,192,952
109 Roche Holding AG -- DRUGS.................... 1,272,771 1,330,062
624 SGS Societe Generale de Surveillance Holding
S.A. -- BANKS.............................. 1,129,783 611,052
810 S.M.H. AG -- MISCELLANEOUS................... 457,808 501,274
3,750 Zurich Allied AG -- INSURANCE................ 1,380,983 2,776,665
------------ -------------
4,921,665 6,412,005
------------ -------------
UNITED KINGDOM-21.57%
70,200 Allied Zurich plc (a) -- INSURANCE........... 813,014 1,050,604
306,432 British Aerospace plc -- AEROSPACE AND
EQUIPMENT.................................. 1,263,181 2,602,740
169,000 British American Tobacco plc -- TOBACCO...... 1,266,568 1,500,106
123,800 British Petroleum Co.
plc -- OIL-MISCELLANEOUS................... 1,716,958 1,847,626
44,310 Cadbury Schweppes plc -- FOOD................ 387,829 754,923
130,814 Diageo plc -- RETAIL-DEPARTMENT STORES....... 1,068,793 1,470,214
67,320 EMI Group plc -- MISCELLANEOUS............... 725,052 474,350
93,200 Granada Group plc -- DIVERSIFIED COMPANIES... 1,364,962 1,653,780
107,200 Great Universal Stores
plc -- RETAIL-CLOTHING..................... 1,304,408 1,122,772
133,500 Imperial Chemical Industries
plc -- CHEMICALS........................... 1,703,522 1,157,231
152,800 Mirror Group plc -- PUBLISHING............... 493,376 380,072
103,500 National Westminster Bank plc -- BANKS....... 1,539,102 1,994,114
129,500 Prudential Corp. plc -- INSURANCE............ 1,462,847 1,957,472
189,600 Royal & Sun Alliance Insurance Group
plc -- INSURANCE........................... 1,878,124 1,534,695
352,400 Siebe plc -- DIVERSIFIED COMPANIES........... 1,432,541 1,383,722
119,500 Unilever plc -- CONSUMER GOODS............... 826,020 1,343,056
------------ -------------
19,246,297 22,227,477
------------ -------------
TOTAL COMMON STOCKS.......................... $83,722,117 $ 99,802,498
------------ -------------
------------ -------------
</TABLE>
65
<PAGE>
FORTIS SERIES FUND, INC.
INTERNATIONAL STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
SHORT-TERM INVESTMENTS-2.84%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-2.84%
$2,931,176 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 2,931,176
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$86,653,293) (b)........................... $ 102,733,674
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $86,695,687 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $22,088,994
Unrealized depreciation.......................................... (6,051,007)
- ------------------------------------------------------------------------------
Net unrealized appreciation...................................... $16,037,987
- ------------------------------------------------------------------------------
</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>
Year Acquired Shares/Par Security Cost Basis
- ---------------- ---------------------------------------------------- -------------
<S> <C> <C> <C>
1997, 1998 145,000 Genting Berhad $ 590,817
</TABLE>
The aggregate value of these securities at December 31, 1998, was $220,304,
which represents .21% of total net assets.
66
<PAGE>
FORTIS SERIES FUND, INC.
MID CAP STOCK SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-97.48%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
BASIC INDUSTRY-4.98%
2,400 Ball Corp.................................... $ 91,505 $ 109,800
3,900 Caraustar Industries, Inc.................... 114,050 111,394
2,100 Centex Construction Products, Inc............ 80,818 85,312
4,500 Crompton & Knowles Corp...................... 108,816 93,094
3,000 Cytec Industries, Inc. (a)................... 115,220 63,750
1,500 Georgia-Pacific Corp. (Timber Group)......... 34,428 35,719
3,700 Solutia, Inc................................. 92,059 82,787
500 Vulcan Materials Co.......................... 62,600 65,781
------------ ------------
699,496 647,637
------------ ------------
CAPITAL SPENDING-30.42%
2,500 Advanced Micro Devices, Inc. (a)............. 63,970 72,344
2,800 Allied Waste Industries, Inc. (a)............ 64,881 66,150
3,600 Altera Corp. (a)............................. 145,645 219,150
2,200 American Power Conversion Corp. (a).......... 82,522 106,562
1,500 Apple Computer, Inc. (a)..................... 52,954 61,406
3,400 Arrow Electronics, Inc....................... 76,832 90,737
2,400 BMC Software, Inc. (a)....................... 117,709 106,950
1,900 Computer Task Group, Inc..................... 61,029 51,537
3,500 Compuware Corp. (a).......................... 183,520 273,437
2,200 Crane Co..................................... 64,758 66,412
1,000 DST Systems, Inc. (a)........................ 49,744 57,062
2,000 Graco, Inc................................... 57,827 59,000
2,300 Gulfstream Aerospace Corp. (a)............... 103,556 122,475
2,200 Harte-Hanks, Inc............................. 47,966 62,700
3,100 Hertz Corp. Class A.......................... 137,564 141,437
2,000 Ingram Micro, Inc. Class A (a)............... 93,700 69,750
1,200 J.D. Edwards & Co. (a)....................... 47,971 34,050
1,900 Kaydon Corp.................................. 75,820 76,119
3,400 Leggett & Platt, Inc......................... 80,359 74,800
1,400 Lexmark International Group Class A (a)...... 104,901 140,700
2,000 Linear Technology Corp....................... 132,255 179,125
4,100 Maxim Integrated Products, Inc. (a).......... 153,786 179,119
1,800 NCR Corp. (a)................................ 52,367 75,150
2,400 Networks Associates, Inc. (a)................ 107,807 159,000
2,400 Premark International, Inc................... 75,426 83,100
300 QUALCOMM, Inc. (a)........................... 13,876 15,544
3,500 Quintiles Transnational Corp. (a)............ 178,644 186,812
1,800 Robert Half International, Inc............... 79,287 80,437
3,500 Sabre Group Holdings, Inc. (a)............... 133,216 155,750
1,200 Sanmina Corp. (a)............................ 73,135 75,000
3,200 Snyder Communications, Inc. (a).............. 135,207 108,000
3,000 Sterling Software, Inc. (a).................. 82,355 81,187
1,200 Sundstrand Corp.............................. 60,430 62,250
1,800 Sylvan Learning Systems, Inc. (a)............ 48,575 54,900
2,000 Tellabs, Inc. (a)............................ 129,394 137,125
2,600 Trinity Industries, Inc...................... 86,568 100,100
2,100 United Stationers, Inc....................... 58,243 54,600
500 VERITAS Software Corp. (a)................... 26,794 29,969
1,400 Waters Corp. (a)............................. 91,794 122,150
1,900 Young & Rubicam, Inc. (a).................... 57,451 61,512
------------ ------------
3,489,838 3,953,608
------------ ------------
CONSUMER CYCLICAL-15.13%
1,200 Abercrombie & Fitch Co. Class A (a).......... 64,266 84,900
2,200 Best Buy Co., Inc. (a)....................... 113,813 135,025
3,200 Cracker Barrel Old Country Store, Inc........ 71,517 74,600
2,500 Dollar Tree Stores, Inc. (a)................. 96,670 109,219
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
1,200 Federal-Mogul Corp........................... $ 71,932 $ 71,400
3,900 Furniture Brands International, Inc. (a)..... 109,917 106,275
2,200 Harley-Davidson, Inc......................... 81,373 104,225
1,800 IHOP Corp. (a)............................... 75,954 71,887
3,300 International Game Technology................ 77,594 80,231
1,500 King World Productions, Inc. (a)............. 41,512 44,156
1,100 Knight Ridder, Inc........................... 57,655 56,237
400 Magna International, Inc. Class A............ 26,620 24,800
1,800 McClatchy Co. Class A........................ 60,818 63,675
2,500 Meritor Automotive, Inc...................... 51,290 52,969
2,200 Nautica Enterprises, Inc. (a)................ 52,292 33,000
1,200 Pulitzer Publishing Co....................... 98,325 103,950
3,700 Rohm & Haas Co............................... 126,679 111,462
3,200 Ross Stores, Inc............................. 127,013 126,000
2,500 SUPERVALU, Inc............................... 66,072 70,000
5,800 TJX Companies, Inc........................... 137,335 168,200
1,400 U.S. Foodservice (a)......................... 66,305 68,600
1,900 V.F. Corp.................................... 88,537 89,062
3,600 Zale Corp. (a)............................... 106,919 116,100
------------ ------------
1,870,408 1,965,973
------------ ------------
CONSUMER STAPLES-4.04%
3,000 Dial Corp.................................... 74,782 86,625
1,800 Earthgrains Co............................... 55,167 55,687
1,100 Estee Lauder Companies, Inc. Class A......... 74,242 94,050
3,200 International Home Foods, Inc. (a)........... 54,915 54,000
2,100 Lancaster Colony Corp........................ 74,636 67,463
6,100 Universal Foods Corp......................... 144,805 167,369
------------ ------------
478,547 525,194
------------ ------------
ENERGY & RELATED-5.57%
2,700 El Paso Energy Corp.......................... 94,156 93,994
2,800 ENSCO International, Inc..................... 36,753 29,925
3,000 Helmerich & Payne, Inc....................... 73,331 58,125
3,200 KeySpan Energy............................... 96,467 99,200
2,400 National Fuel Gas Co......................... 108,825 108,450
3,500 Questar Corp................................. 69,947 67,813
3,200 R & B Falcon Corp. (a)....................... 56,390 24,400
2,800 Sunoco, Inc.................................. 103,461 100,975
1,400 Tidewater, Inc............................... 38,560 32,463
2,500 Vastar Resources, Inc........................ 107,165 107,969
------------ ------------
785,055 723,314
------------ ------------
FINANCE-14.20%
3,000 A.G. Edwards, Inc............................ 116,394 111,750
4,500 AFLAC, Inc................................... 167,096 198,000
1,000 Centura Banks, Inc........................... 66,952 74,375
3,500 City National Corp........................... 130,567 145,688
1,400 CMAC Investment Corp......................... 76,563 64,313
1,800 Cullen/Frost Bankers, Inc.................... 98,472 98,775
2,600 Dime Bancorp, Inc............................ 65,555 68,738
3,400 First Tennessee National Corp................ 101,047 129,413
900 Golden West Financial Corp. (a).............. 82,132 82,519
2,700 Mercantile Bankshares Corp................... 96,169 103,950
2,100 Nationwide Financial Services, Inc........... 94,331 108,544
2,800 Old Kent Financial Corp...................... 102,976 130,200
1,800 PMI Group, Inc............................... 120,233 88,875
3,200 Regions Financial Corp....................... 127,835 129,000
900 RenaissanceRe Holdings Ltd................... 38,864 32,963
3,200 T. Rowe Price Associates, Inc................ 112,168 109,600
</TABLE>
67
<PAGE>
FORTIS SERIES FUND, INC.
MID CAP STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
700 Wilmington Trust Corp........................ $ 36,488 $ 43,138
2,000 Zions Bancorp................................ 101,788 124,750
------------ ------------
1,735,630 1,844,591
------------ ------------
HEALTH CARE-10.40%
1,100 Arterial Vascular Engineering, Inc. (a)...... 42,937 57,750
3,100 Biogen, Inc. (a)............................. 181,909 257,300
3,200 Biomet, Inc.................................. 102,965 128,800
800 Centocor, Inc. (a)........................... 35,517 36,100
1,000 Elan Corp. plc ADR (a)....................... 67,015 69,563
1,300 Genzyme Corp. (a)............................ 63,975 64,675
2,400 Lincare Holdings, Inc. (a)................... 94,676 97,350
1,500 McKesson Corp................................ 115,451 118,594
800 PacifiCare Health Systems, Inc. Class B (a) 63,195 63,600
700 Patterson Dental Co. (a)..................... 28,193 30,450
5,900 STERIS Corp. (a)............................. 162,114 167,781
2,200 Total Renal Care Holdings, Inc. (a).......... 57,344 65,038
3,100 Watson Pharmaceuticals, Inc. (a)............. 140,548 194,913
------------ ------------
1,155,839 1,351,914
------------ ------------
METAL & MINING-0.52%
500 Cleveland-Cliffs, Inc........................ 25,031 20,156
2,300 General Cable Corp........................... 57,212 47,150
------------ ------------
82,243 67,306
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
------- ------------ ------------
<C> <S> <C> <C>
TRANSPORTATION-1.67%
1,400 Alaska Air Group, Inc. (a)................... $ 55,795 $ 61,950
1,800 Kansas City Southern Industries, Inc......... 76,169 88,538
1,800 Royal Caribbean Cruises Ltd.................. 58,850 66,600
------------ ------------
190,814 217,088
------------ ------------
UTILITIES-10.55%
4,400 BEC Energy................................... 180,033 181,225
3,800 Century Telephone Enterprises, Inc........... 186,782 256,500
2,500 Commonwealth Energy System................... 87,462 101,250
2,200 Energy East Corp............................. 124,302 124,300
2,800 IPALCO Enterprises, Inc...................... 130,745 155,225
2,100 Montana Power Co............................. 83,868 118,781
3,400 Pinnacle West Capital Corp................... 149,392 144,075
4,400 Scana Corp................................... 140,179 141,900
2,100 Sierra Pacific Resources..................... 75,846 79,800
2,400 TECO Energy, Inc............................. 70,208 67,650
------------ ------------
1,228,817 1,370,706
------------ ------------
TOTAL COMMON STOCKS.......................... $ 11,716,687 $ 12,667,331
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-2.77%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
U.S. TREASURY BILL-0.30%
$ 40,000 U.S. Treasury Bill, 4.44%, 3-25-1999 (e)..... $ 39,615
------------
BANKS-2.47%
320,566 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ 320,566
------------
TOTAL SHORT-TERM INVESTMENTS................. 360,181
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$12,076,868) (b)........................... $13,027,512
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $12,089,478 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,419,388
Unrealized depreciation..................................... (481,354)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 938,034
- -------------------------------------------------------------------------
</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 .19% of total net assets as of December 31, 1998.
(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 12/31/98
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Standard & Poor's Midcap 400............................ 1 $ 195,875 March 99 $ 12,125
</TABLE>
68
<PAGE>
FORTIS SERIES FUND, INC.
SMALL CAP VALUE SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-93.58%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
APPAREL-1.58%
30,000 Gerber Childrenswear, Inc.................... $ 271,281 $ 260,625
------------ ------------
BANKS-14.19%
10,500 CCB Financial Group.......................... 574,380 598,500
9,500 Community Bank System, Inc................... 291,197 278,469
35,000 First Sentinel Bancorp, Inc.................. 298,389 284,375
9,000 GBC Bancorp.................................. 203,214 231,750
25,400 Life Financial Corp. (a)..................... 118,270 117,475
5,700 Mech Financial, Inc.......................... 122,394 158,175
14,000 New England Community Bancorp, Inc........... 284,968 280,000
6,750 Trico Bancshares............................. 151,500 111,375
6,000 Webster Financial Corp....................... 114,182 164,625
4,000 Western Bancorp.............................. 139,625 117,000
------------ ------------
2,298,119 2,341,744
------------ ------------
BUILDING MATERIALS-2.12%
9,000 Holophane Corp............................... 195,228 231,187
6,000 Thomas Industries, Inc....................... 113,215 117,750
------------ ------------
308,443 348,937
------------ ------------
BUSINESS SERVICES AND SUPPLIES-2.21%
15,600 Interim Services, Inc. (a)................... 305,050 364,650
------------ ------------
CARPETS AND FLOOR COVERINGS-0.62%
12,000 Congoleum Corp. Class A...................... 119,298 102,000
------------ ------------
CLOSED END GLOBAL COUNTRY FUND-4.06%
12,000 Central European Value Fund.................. 153,901 124,500
13,000 Emerging Markets Telecommunications Fund..... 188,530 116,187
16,000 Latin American Equity Fund, Inc.............. 204,004 115,000
45,000 Morgan Stanley Asia Pacific Fund............. 309,553 315,000
------------ ------------
855,988 670,687
------------ ------------
COMPUTER-HARDWARE-0.90%
20,000 Splash Technology Holdings................... 259,669 148,750
------------ ------------
CONSUMER GOODS-3.41%
21,500 Jostens, Inc................................. 507,309 563,031
------------ ------------
ELECTRONIC COMPONENTS-1.37%
12,600 Remec, Inc................................... 107,468 226,800
------------ ------------
ELECTRONIC-CONTROLS AND EQUIPMENT-1.33%
15,000 Brooks Automation, Inc....................... 190,655 219,375
------------ ------------
FOREST PRODUCTS-3.13%
15,500 Georgia-Pacific Corp. (Timber Group)......... 333,706 369,094
4,000 Potlatch Corp................................ 149,985 147,500
------------ ------------
483,691 516,594
------------ ------------
INSURANCE-1.76%
12,500 IPC Holdings Ltd............................. 285,033 289,844
------------ ------------
MACHINERY-2.59%
20,500 PPT Vision, Inc.............................. 152,646 102,500
19,000 SpeedFam International, Inc.................. 262,839 325,375
------------ ------------
415,485 427,875
------------ ------------
MACHINERY-SPECIALTY-1.70%
14,000 Cognex Corp.................................. 203,848 280,000
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
MEDIA-1.40%
11,000 Playboy Enterprises Class B.................. $ 171,472 $ 230,312
------------ ------------
MEDICAL SUPPLIES-4.43%
32,000 Perrigo Co. (a).............................. 318,624 282,000
26,000 Sola International, Inc...................... 439,326 448,500
------------ ------------
757,950 730,500
------------ ------------
MISCELLANEOUS-1.50%
16,500 Nautica Enterprises, Inc. (a)................ 300,977 247,500
------------ ------------
OIL AND GAS FIELD SERVICES-5.55%
30,000 BJ Services, Co. (Warrants) (a) (e).......... 259,106 249,375
28,000 Chieftain International, Inc................. 533,081 402,500
25,000 Key Energy Group, Inc........................ 293,093 117,187
7,000 Newfield Exploration Co. (a)................. 142,655 146,125
------------ ------------
1,227,935 915,187
------------ ------------
OIL-OFFSORE DRILLING-2.21%
43,000 Marine Drilling Companies, Inc. (a).......... 411,534 330,563
3,000 Mitchell Energy and Development Corp. Class
B.......................................... 34,002 34,875
------------ ------------
445,536 365,438
------------ ------------
PUBLISHING-1.35%
16,000 Hollinger International, Inc................. 255,860 223,000
------------ ------------
REAL ESTATE-INVESTMENT TRUST-7.24%
14,000 Gables Residential Trust..................... 377,652 324,625
36,000 IRT Property Co.............................. 399,798 360,000
6,400 Parkway Properties, Inc...................... 189,405 200,000
18,000 Summit Properties, Inc....................... 350,754 310,500
------------ ------------
1,317,609 1,195,125
------------ ------------
RESTAURANTS AND FRANCHISING-1.18%
26,000 Landry's Seafood Restaurants, Inc. (a)....... 282,906 195,000
------------ ------------
RETAIL-CLOTHING-0.90%
5,500 Lands' End, Inc.............................. 114,790 148,156
------------ ------------
RETAIL-DEPARTMENT STORES-1.12%
32,100 Spiegel, Inc. Class A........................ 164,597 184,575
------------ ------------
RETAIL-HOUSEHOLD FURNITURE-1.74%
9,000 Helig-Meyers Co.............................. 72,994 60,188
23,500 Pier 1 Imports, Inc.......................... 217,174 227,656
------------ ------------
290,168 287,844
------------ ------------
RETAIL-SPECIALTY-2.62%
14,000 Just for Feet, Inc. (a)...................... 209,591 243,250
4,000 Payless ShoeSource, Inc. (a)................. 188,664 189,500
------------ ------------
398,255 432,750
------------ ------------
SAVINGS AND LOANS, MORTGAGE COMPANIES-2.76%
10,500 St. Paul Bancorp, Inc........................ 223,100 285,797
18,700 Warren Bancorp, Inc.......................... 212,763 169,469
------------ ------------
435,863 455,266
------------ ------------
SHIP BUILDING, SHIPPING-3.78%
30,000 Knightsbridge Tankers Ltd.................... 739,622 624,375
------------ ------------
SHOES AND LEATHER-3.40%
42,400 Wolverine World Wide, Inc.................... 483,004 561,800
------------ ------------
</TABLE>
69
<PAGE>
FORTIS SERIES FUND, INC.
SMALL CAP VALUE SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
STEEL AND IRON-1.02%
37,800 NS Group, Inc................................ $ 242,086 $ 167,738
------------ ------------
TELECOMMUNICATIONS-4.21%
13,300 General Communication Class A................ 103,075 54,031
18,000 Jones Intercable, Inc. Class A............... 398,638 641,250
------------ ------------
501,713 695,281
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
TELECOMMUNICATION EQUIPMENT-6.20%
20,000 Federal Signal Corp.......................... $ 467,111 $ 547,500
22,000 Hypercom Corp. (a)........................... 205,801 217,250
25,000 Network Equipment Technologies, Inc. (a) 300,501 257,813
------------ ------------
973,413 1,022,563
------------ ------------
TOTAL COMMON STOCKS.......................... $ 15,715,093 $ 15,443,322
------------ ------------
------------ ------------
</TABLE>
SHORT-TERM INVESTMENTS-5.66%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
--------- ------------
<C> <S> <C>
BANKS-5.66%
$934,302 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate - 5.03%......... $ 934,302
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$16,649,395) (b)........................... $16,377,624
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $16,781,841 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 1,295,804
Unrealized depreciation..................................... (1,700,021)
- -------------------------------------------------------------------------
Net unrealized depreciation................................. $ (404,217)
- -------------------------------------------------------------------------
</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 5.54% of total net assets as of December 31, 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. The portfolio entered into the following
Section 144A security transactions:
<TABLE>
<CAPTION>
Year Acquired Shares/Par Security Cost Basis
- -------------------- ----------- ------------------------------ ---------------
<S> <C> <C> <C>
BJ Services, Co. (Warrants) -
1998 30,000 144A $ 259,106
The aggregate value of these securities at December 31, 1998, was $249,375, which
represents 1.51% of total net assets.
</TABLE>
70
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-95.05%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
AUSTRIA-0.56%
20,850 OMV Aktiengesellschaft (e) -- OIL-CRUDE
PETROLEUM AND GAS.......................... $ 2,135,819 $ 1,966,075
------------- -------------
BELGIUM-1.13%
14,120 Barco N.V. -- TELECOMMUNICATION EQUIPMENT.... 1,993,251 3,986,866
------------- -------------
BRAZIL-0.19%
45,100 Uniao de Bancos Brasileiros S.A.
GDR -- BANKS............................... 1,522,125 651,131
------------- -------------
FINLAND-5.85%
99,100 KCI Konecranes International plc
(e) -- MACHINERY........................... 2,400,981 4,501,521
131,000 Nokia Oyj K Shares -- TELECOMMUNICATION
EQUIPMENT.................................. 1,318,091 16,040,605
------------- -------------
3,719,072 20,542,126
------------- -------------
FRANCE-7.46%
17,000 Axa -- INSURANCE............................. 1,962,653 2,465,003
20,600 Casino Guichard Perrachon -- FOOD............ 2,093,040 2,146,217
51,200 Companie Generale de Geophysique S.A. ADR
(a) -- OIL AND GAS FIELD SERVICES.......... 1,130,190 556,800
12,500 Dexia France -- BANKS........................ 1,571,675 1,926,623
14,200 Groupe Danone -- FOOD........................ 2,470,350 4,067,165
63,327 Rhone-Poulenc (Warrants) (a) -- CHEMICALS.... 216,168 237,476
63,327 Rhone-Poulenc S.A. ADR -- CHEMICALS.......... 2,572,753 3,182,182
34,000 Sanofi S.A. -- DRUGS......................... 1,996,096 5,599,513
32,600 Sidel -- MACHINERY........................... 2,536,918 2,766,174
16,000 Suez Lyonnaise des Eaux -- UTILITIES-WATER
AND SEWER.................................. 2,854,150 3,288,103
------------- -------------
19,403,993 26,235,256
------------- -------------
GERMANY-3.33%
45,000 Dresdner Bank AG -- BANKS.................... 2,173,463 1,885,807
28,000 HypoVereinsbank -- BANKS..................... 1,822,118 2,215,658
5,300 Ixos Software AG (a) -- COMPUTER-SOFTWARE.... 561,301 1,193,264
26,000 Mannesmann AG -- TELECOMMUNICATION
EQUIPMENT.................................. 2,481,668 3,008,826
179,660 Phoenix AG -- AUTOMOBILE AND MOTOR VEHICLE
PARTS...................................... 2,898,863 3,397,749
------------- -------------
9,937,413 11,701,304
------------- -------------
HUNGARY-1.90%
81,000 Matav Rt. ADR (a) -- TELEPHONE SERVICES...... 1,924,635 2,414,812
155,000 MOL Magyar Olaj-es Gazipari Rt. GDR
(e) -- OIL-CRUDE PETROLEUM AND GAS......... 1,255,500 4,251,386
------------- -------------
3,180,135 6,666,198
------------- -------------
ISRAEL-2.26%
84,000 ECI Telecommunications
Ltd. -- TELECOMMUNICATION EQUIPMENT........ 1,662,746 2,992,500
122,000 Teva Pharmaceutical Industries Ltd.
ADR -- DRUGS............................... 4,377,137 4,963,875
------------- -------------
6,039,883 7,956,375
------------- -------------
ITALY-3.33%
47,000 Assicurazioni Generali -- INSURANCE.......... 1,786,768 1,966,716
900,000 Banca di Roma (a) -- BANKS................... 1,766,797 1,528,253
152,000 Industrie Natuzzi S.p.A. ADR -- FURNITURE.... 3,153,220 3,781,000
519,000 Telecom Italia S.p.A. -- TELEPHONE
SERVICES................................... 3,457,555 4,437,937
------------- -------------
10,164,340 11,713,906
------------- -------------
JAPAN-5.87%
31,600 Advantest Corp. -- MACHINERY................. 2,055,746 2,005,816
135,000 Canon, Inc. ADR -- OFFICE EQUIPMENT AND
SUPPLIES................................... 2,113,633 2,902,500
7,000 Fujitsu Support and Service, Inc.
(e) -- BUSINESS SERVICES................... 219,895 505,762
48,000 Honda Motor Co. Ltd. -- AUTOMOBILE
MANUFACTURERS.............................. 1,813,932 1,578,723
26,000 Megachips Corp.
(e) -- ELECTRONIC-SEMICONDUCTOR............ 517,413 1,002,660
493 Nippon Telegraph & Telephone
Corp. -- TELEPHONE SERVICES................ 4,176,327 3,811,135
34,000 Softbank Corp. First
Section -- COMPUTER-SOFTWARE............... 1,721,406 2,049,645
30,000 Sony Corp. -- ELECTRONIC COMPONENTS.......... 1,951,042 2,188,830
27,400 TDK Corp. -- ELECTRONIC COMPONENTS........... 2,049,518 2,509,238
</TABLE>
71
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
31,000 Tokyo Electron Limited -- MACHINERY.......... $ 1,049,357 $ 1,178,989
51,000 Toppan Forms Co. Ltd. (e) -- BUSINESS
SERVICES................................... 462,911 908,777
------------- -------------
18,131,180 20,642,075
------------- -------------
MEXICO-1.21%
76,200 Grupo Televisa S.A. GDR -- BROADCASTING...... 2,427,494 1,881,187
108,200 Panamerican Beverages, Inc. Class
A -- BEVERAGE.............................. 2,288,387 2,360,112
------------- -------------
4,715,881 4,241,299
------------- -------------
NETHERLANDS-4.91%
63,000 IHC Caland N.V. -- OIL AND GAS FIELD
SERVICES................................... 2,132,115 2,618,426
42,000 Randstad Holdings N.V. -- BUSINESS
SERVICES................................... 481,672 2,260,351
77,000 Royal Pakhoed N.V. -- TRANSPORTATION......... 2,063,025 1,944,797
140,000 VNU N.V. -- PUBLISHING....................... 3,256,385 5,281,611
24,000 Wolters Kluwer N.V. -- PUBLISHING............ 1,404,741 5,138,381
------------- -------------
9,337,938 17,243,566
------------- -------------
NORWAY-0.88%
118,000 Petroleum Geo-Services ADR (a) -- OIL AND GAS
FIELD SERVICES............................. 1,587,170 1,858,500
130,000 Stolt Comex Seaway S.A. (a) -- OIL AND GAS
FIELD SERVICES............................. 916,705 877,500
65,000 Stolt Comex Seaway S.A. ADR Class A
(a) -- OIL AND GAS FIELD SERVICES.......... 227,658 365,625
------------- -------------
2,731,533 3,101,625
------------- -------------
PORTUGAL-1.22%
65,000 Electricidade de Portugal
S.A. -- UTILITIES-ELECTRIC................. 1,512,855 1,431,102
63,800 Portugal Telecom S.A. ADR -- TELEPHONE
SERVICES................................... 1,989,354 2,847,075
------------- -------------
3,502,209 4,278,177
------------- -------------
SPAIN-3.23%
35,000 Repsol S.A. -- OIL-CRUDE PETROLEUM AND GAS... 1,448,791 1,869,853
70,000 Telefonica de Espana S.A. ADR -- TELEPHONE
SERVICES................................... 4,789,094 9,476,250
------------- -------------
6,237,885 11,346,103
------------- -------------
SWEDEN-2.81%
276,000 Ericsson (L.M.) Telephone Co. Class B
ADR -- TELECOMMUNICATION EQUIPMENT......... 2,352,375 6,606,750
142,500 Hoganas AB Class B -- CHEMICALS.............. 2,474,103 2,329,351
185,200 Industri-Matematik International Corp.
(a) -- COMPUTER-SOFTWARE................... 1,709,517 926,000
------------- -------------
6,535,995 9,862,101
------------- -------------
SWITZERLAND-3.18%
3,830 Novartis AG -- DRUGS......................... 5,138,617 7,528,941
300 Roche Holding AG -- DRUGS.................... 1,568,202 3,660,721
------------- -------------
6,706,819 11,189,662
------------- -------------
UNITED KINGDOM-6.51%
800,000 Avis Europe plc -- BUSINESS SERVICES......... 1,650,954 3,360,875
136,500 Cadbury Schweppes plc -- FOOD................ 2,070,021 2,325,592
351,700 Capita Group plc -- BUSINESS SERVICES........ 762,231 3,250,554
142,000 Dixons Group plc -- RETAIL-ELECTRIC PRODUCTS,
RADIO, TV, AUDIO........................... 1,783,438 1,988,124
36,300 Energis plc (a) -- TELEPHONE SERVICES........ 174,091 812,325
52,000 Glaxo Wellcome plc ADR -- DRUGS.............. 2,043,923 3,614,000
650,000 Orange plc (a) -- TELEPHONE SERVICES......... 2,063,061 7,543,250
------------- -------------
10,547,719 22,894,720
------------- -------------
UNITED STATES-39.22%
186,000 3Com Corp. (a) -- COMPUTER-COMMUNICATION
EQUIPMENT.................................. 3,840,457 8,335,125
66,000 Altera Corp.
(a) -- ELECTRONIC-SEMICONDUCTOR............ 1,388,406 4,017,750
182,900 Avant! Corp. (a) -- COMPUTER-SOFTWARE........ 3,709,433 2,926,400
101,250 Baker Hughes, Inc. -- MACHINERY-OIL AND
WELL....................................... 1,338,427 1,790,859
220,000 Bed Bath & Beyond, Inc.
(a) -- RETAIL-SPECIALTY.................... 2,189,769 7,507,500
115,500 Blyth Industries, Inc. (a) -- CONSUMER
GOODS...................................... 3,510,585 3,609,375
</TABLE>
72
<PAGE>
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
46,455 Cardinal Health, Inc. -- HEALTH CARE
SERVICES................................... $ 1,599,105 $ 3,524,773
166,950 Cheesecake Factory (The), Inc.
(a) -- RESTAURANTS AND FRANCHISING......... 3,046,325 4,951,111
156,000 Cisco Systems, Inc.
(a) -- COMPUTER-COMMUNICATION EQUIPMENT.... 843,667 14,478,750
28,000 Citrix Systems, Inc.
(a) -- COMPUTER-SOFTWARE................... 1,517,175 2,717,750
163,200 Covance, Inc. (a) -- HEALTH CARE SERVICES.... 3,177,281 4,753,200
135,000 Data Processing Resources Corp.
(a) -- BUSINESS SERVICES................... 2,708,975 3,948,750
220,300 DSP Communications, Inc. (a) -- ELECTRONIC
COMPONENTS................................. 3,116,468 3,373,344
22,000 Enron Corp. -- NATURAL GAS TRANSMISSIONS..... 1,100,000 1,255,375
48,500 Galileo International, Inc. -- BUSINESS
SERVICES................................... 1,188,250 2,109,750
150,000 Gartner Group, Inc. Class A (a) -- BUSINESS
SERVICES................................... 750,000 3,187,500
28,000 Guidant Corp. -- MEDICAL TECHNOLOGY.......... 1,992,416 3,087,000
23,000 Infinity Broadcasting Corp. (a) -- MEDIA..... 471,500 629,625
30,400 Intuit, Inc. (a) -- COMPUTER-SOFTWARE........ 1,408,006 2,204,000
41,000 Media One Group, Inc. (a) -- CABLE
TELEVISION................................. 1,571,350 1,927,000
28,000 Medtronic, Inc. (with rights) -- MEDICAL
TECHNOLOGY................................. 1,591,133 2,079,000
91,161 Networks Associates, Inc.
(a) -- COMPUTER-SOFTWARE................... 2,321,188 6,039,416
105,000 Outback Steakhouse, Inc. (a) -- RESTAURANTS
AND FRANCHISING............................ 3,179,413 4,186,875
146,000 Parametric Technology Corp.
(a) -- COMPUTER-SOFTWARE................... 1,081,328 2,390,750
75,100 Perkin-Elmer Corp. -- PRECISION
INSTRUMENTS-TEST, RESEARCH................. 5,315,905 7,326,944
126,000 Polo Ralph Lauren Corp. (a) -- APPAREL....... 3,047,870 2,417,625
28,438 Schlumberger Ltd. -- OIL AND GAS FIELD
SERVICES................................... 1,031,437 1,311,703
100,000 Service Corp. International -- PERSONAL
SERVICES................................... 2,209,570 3,806,250
74,900 Sykes Enterprises, Inc. (a) -- BUSINESS
SERVICES................................... 1,524,076 2,284,450
123,000 Synopsys, Inc. (a) -- COMPUTER-SOFTWARE...... 3,207,693 6,672,750
90,000 Tellabs, Inc. (a) -- TELECOMMUNICATION
EQUIPMENT.................................. 1,210,073 6,170,625
180,000 Total Renal Care Holdings, Inc. (a) -- HEALTH
CARE SERVICES.............................. 4,284,843 5,321,250
78,000 Transocean Offshore, Inc. -- OIL-OFFSHORE
DRILLING................................... 2,137,040 2,091,375
42,000 Univision Communications, Inc.
(a) -- BROADCASTING........................ 1,512,000 1,519,875
60,000 Xilinx, Inc.
(a) -- ELECTRONIC-SEMICONDUCTOR............ 1,193,640 3,907,500
------------- -------------
75,314,804 137,861,325
------------- -------------
TOTAL COMMON STOCKS.......................... $ 201,857,994 $ 334,079,890
------------- -------------
------------- -------------
</TABLE>
PREFERRED STOCKS-2.95%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------- -------------
<C> <S> <C> <C>
BRAZIL-0.49%
24,000 Telecomunicacoes Brasileiras S.A. ADR
Preferred (a) -- TELECOMMUNICATIONS....... $ 1,514,978 $ 1,744,500
------------- -------------
GERMANY-2.46%
18,000 SAP AG Systeme Preferred
-- COMPUTER-SOFTWARE...................... 1,019,104 8,640,129
------------- -------------
TOTAL PREFERRED STOCKS....................... 2,534,082 10,384,629
------------- -------------
------------- -------------
TOTAL LONG-TERM INVESTMENTS.................. $ 204,392,076 $ 344,464,519
------------- -------------
------------- -------------
</TABLE>
73
<PAGE>
FORTIS SERIES FUND, INC.
GLOBAL GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
SHORT-TERM INVESTMENTS-1.89%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-0.08%
$ 267,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 267,000
-------------
DIVERSIFIED FINANCE-1.81%
6,373,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 6,373,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 6,640,000
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$211,032,076) (b).......................... $ 351,104,519
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $211,072,766 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $145,995,117
Unrealized depreciation..................................... (5,963,364)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $140,031,753
- --------------------------------------------------------------------------
</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>
Year Acquired Shares/Par Security Cost Basis
- -------------------- ----------- ------------------------------ ---------------
<S> <C> <C> <C>
Fujitsu Support and Service,
1998 7,000 Inc. $ 219,895
KCI Konecranes International
1996-1998 99,100 plc 2,400,981
MOL Magyar Olaj-es Gazipari
1995 155,000 Rt. GDR 1,255,500
1998 26,000 Megachips Corp. 517,413
1996 20,850 OMV Aktiengesellschaft 2,135,819
1998 51,000 Toppan Forms Co. Ltd. 462,911
The aggregate value of these securities at December 31, 1998, was $13,136,181,
which represents 3.74% of total net assets.
</TABLE>
74
<PAGE>
FORTIS SERIES FUND, INC.
LARGE CAP GROWTH SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-95.63%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
AEROSPACE AND EQUIPMENT-0.91%
1,600 United Technologies Corp..................... $ 156,498 $ 174,000
------------ ------------
AIRLINES-1.61%
2,000 KLM Royal Dutch Air Lines N.V................ 86,920 60,000
4,800 Northwest Airlines Corp. (a)................. 207,121 122,700
2,100 UAL Corp. (a)................................ 161,944 125,344
------------ ------------
455,985 308,044
------------ ------------
AUTOMOBILE MANUFACTURERS-0.40%
1,300 Ford Motor Co................................ 76,852 76,294
------------ ------------
BANKS-5.28%
4,326 BankAmerica Corp............................. 303,665 260,101
2,200 Fifth Third Bancorp.......................... 130,637 156,887
4,900 U.S. Bancorp................................. 193,206 173,950
9,900 Washington Mutual, Inc....................... 401,214 378,056
1,000 Wells Fargo Co............................... 35,435 39,937
------------ ------------
1,064,157 1,008,931
------------ ------------
BROADCASTING-2.21%
8,100 Liberty Media Group (a)...................... 295,600 373,106
900 Tele-Communications, Inc. (a)................ 37,854 49,781
------------ ------------
333,454 422,887
------------ ------------
BUSINESS SERVICES AND SUPPLIES-5.17%
2,400 IMS Health, Inc.............................. 154,784 181,050
10,699 Tyco International Ltd....................... 617,516 807,106
------------ ------------
772,300 988,156
------------ ------------
COMPUTER-COMMUNICATION EQUIPMENT-9.76%
9,300 Cisco Systems, Inc. (a)...................... 510,997 863,156
13,700 Dell Computer Corp. (a)...................... 695,959 1,002,669
------------ ------------
1,206,956 1,865,825
------------ ------------
COMPUTER-SOFTWARE-2.10%
2,900 Microsoft Corp. (a).......................... 305,699 402,194
------------ ------------
CONSUMER GOODS-0.19%
400 Colgate-Palmolive Co......................... 30,757 37,150
------------ ------------
COSMETICS AND SUNDRIES-0.13%
500 Gillette Co.................................. 20,304 24,156
------------ ------------
DIVERSIFIED COMPANIES-0.26%
1 Berkshire Hathaway, Inc. Class A............. 51,273 49,000
------------ ------------
DRUGS-11.10%
3,500 Bristol-Myers Squibb Co...................... 371,817 468,344
1,900 Merck & Co., Inc............................. 258,420 280,606
5,900 Pfizer, Inc.................................. 614,106 740,081
9,300 Schering-Plough Corp......................... 441,602 513,825
1,600 Warner-Lambert Co............................ 119,003 120,300
------------ ------------
1,804,948 2,123,156
------------ ------------
ELECTRIC-PRODUCTS-1.66%
6,100 AMP, Inc..................................... 310,169 317,581
------------ ------------
ELECTRICAL EQUIPMENT-0.69%
1,300 General Electric Co.......................... 93,292 132,681
------------ ------------
<CAPTION>
Market
Shares Cost (b) Value (c)
-------- ------------ ------------
<C> <S> <C> <C>
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.74%
2,800 Intel Corp................................... $ 241,032 $ 331,975
------------ ------------
FINANCIAL SERVICES-12.93%
17,462 Associates First Capital Corp. Class A....... 655,792 739,952
5,300 Citigroup, Inc............................... 302,254 262,350
1,300 Fannie Mae................................... 84,527 96,200
6,000 Freddie Mac.................................. 333,781 386,625
3,603 Household International, Inc................. 138,923 142,769
24,450 MBNA Corp.................................... 537,348 609,722
3,300 Morgan Stanley Dean Witter & Co.............. 254,994 234,300
------------ ------------
2,307,619 2,471,918
------------ ------------
HEALTH CARE SERVICES-2.78%
18,500 HBO & Co..................................... 484,610 530,719
------------ ------------
INSURANCE-1.40%
1,900 American International Group, Inc............ 167,841 183,588
500 Progressive Corp. (The)...................... 65,938 84,688
------------ ------------
233,779 268,276
------------ ------------
LEISURE TIME-AMUSEMENTS-0.35%
2,200 Disney (Walt) Co............................. 87,074 66,000
------------ ------------
MEDIA-0.28%
800 Gannett Co., Inc............................. 56,313 52,950
------------ ------------
OFFICE EQUIPMENT AND SUPPLIES-3.24%
7,300 EMC Corp. (a)................................ 434,158 620,500
------------ ------------
RETAIL-DEPARTMENT STORES-3.14%
4,600 Dayton Hudson Corp........................... 197,955 249,550
5,700 Kohl's Corp. (a)............................. 269,605 350,194
------------ ------------
467,560 599,744
------------ ------------
RETAIL-DISCOUNT STORES-3.36%
7,900 Wal-Mart Stores, Inc......................... 523,718 643,356
------------ ------------
RETAIL-GROCERY-0.85%
2,700 Kroger Co. (a)............................... 137,005 163,350
------------ ------------
RETAIL-SPECIALTY-8.26%
15,500 Home Depot, Inc.............................. 619,186 948,406
6,600 Lowe's Companies, Inc........................ 262,192 337,838
5,900 Rite Aid Corp................................ 239,159 292,419
------------ ------------
1,120,537 1,578,663
------------ ------------
TELECOMMUNICATIONS-6.56%
900 Lucent Technologies, Inc..................... 83,226 99,000
9,600 Nokia Oyj Corp., ADR Class A................. 807,620 1,156,200
------------ ------------
890,846 1,255,200
------------ ------------
TELEPHONE SERVICES-7.34%
13,600 AirTouch Communications, Inc. (a)............ 711,810 980,900
5,900 MCI WorldCom, Inc. (a)....................... 335,605 423,325
------------ ------------
1,047,415 1,404,225
------------ ------------
TOBACCO-1.93%
6,900 Philip Morris Companies, Inc................. 325,976 369,150
------------ ------------
TOTAL COMMON STOCKS.......................... $ 15,040,286 $ 18,286,081
------------ ------------
------------ ------------
</TABLE>
75
<PAGE>
FORTIS SERIES FUND, INC.
LARGE CAP GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
SHORT-TERM INVESTMENTS-6.90%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- ------------
<C> <S> <C>
BANKS-1.67%
$ 319,351 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 319,351
------------
ELECTRIC PRODUCTS-5.23%
1,000,000 General Electric Capital Corp., 5.48%,
1-4-1999................................... 999,400
------------
TOTAL SHORT-TERM INVESTMENTS................. 1,318,751
------------
------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$16,359,037) (b)........................... $19,604,832
------------
------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $16,425,282 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $ 3,577,879
Unrealized depreciation..................................... (398,329)
- -------------------------------------------------------------------------
Net unrealized appreciation................................. $ 3,179,550
- -------------------------------------------------------------------------
</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 6.36% of total net assets as of December 31, 1998.
76
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-93.13%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-3.83%
180,000 Cox Radio, Inc. (a).......................... $ 7,734,362 $ 7,605,000
405,000 Outdoor Systems, Inc. (a).................... 9,305,067 12,150,000
292,500 Young & Rubicam, Inc. (a).................... 8,395,736 9,469,687
------------- -------------
25,435,165 29,224,687
------------- -------------
AUTOMOBILE AND MOTOR VEHICLE PARTS-0.86%
110,000 Federal-Mogul Corp........................... 6,910,404 6,545,000
------------- -------------
BANKS-1.91%
270,000 Imperial Bancorp (a)......................... 8,263,536 4,488,750
162,000 Zions Bancorporation......................... 8,321,150 10,104,750
------------- -------------
16,584,686 14,593,500
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-0.72%
121,500 Centocor, Inc. (a)........................... 5,565,518 5,482,687
------------- -------------
BROADCASTING-1.28%
270,000 Univision Communications, Inc. (a)........... 7,978,281 9,770,625
------------- -------------
BROKERAGE AND INVESTMENT-0.37%
45,000 Investment Technology Group, Inc. (a) 2,355,794 2,792,812
------------- -------------
BUSINESS SERVICES AND SUPPLIES-4.79%
180,000 ACNielsen Corp. (a).......................... 4,989,828 5,085,000
180,000 Central Parking Corp......................... 7,437,773 5,838,750
90,000 Ceridian Corp. (a)........................... 5,761,967 6,283,125
213,700 Quintiles Transnational Corp. (a)............ 9,661,291 11,406,237
258,700 Viad Corp.................................... 6,693,665 7,858,012
------------- -------------
34,544,524 36,471,124
------------- -------------
CHEMICALS-1.04%
382,500 Crompton & Knowles Corp...................... 9,287,960 7,912,969
------------- -------------
CHEMICALS-SPECIALTY-0.91%
225,000 Mallinckrodt Group, Inc...................... 6,469,329 6,932,812
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-2.82%
219,150 Cisco Systems, Inc. (a)...................... 1,166,749 20,339,859
45,000 USWeb Corp. (a).............................. 1,173,366 1,186,875
------------- -------------
2,340,115 21,526,734
------------- -------------
COMPUTER-HARDWARE-0.24%
51,200 Storage Technology Corp. (a)................. 1,761,418 1,820,800
------------- -------------
COMPUTER-SOFTWARE-16.73%
270,000 Affiliated Computer Services, Inc. (a) 10,046,179 12,150,000
135,000 Comverse Technology, Inc. (a)................ 8,792,749 9,585,000
90,000 CSG Systems International, Inc. (a).......... 6,423,292 7,110,000
135,000 DST Systems, Inc. (a)........................ 7,969,341 7,703,437
180,000 Exodus Communications, Inc. (a).............. 11,190,812 11,565,000
143,000 Inktomi Corp. (a)............................ 17,996,438 18,500,625
104,500 Intuit, Inc. (a)............................. 6,295,482 7,576,250
67,500 Legato Systems, Inc. (a)..................... 2,521,406 4,450,781
45,000 Macromedia, Inc. (a)......................... 1,500,469 1,515,937
135,000 MindSpring Enterprises, Inc. (a)............. 7,085,816 8,243,437
270,000 National Instruments Corp. (a)............... 8,025,862 9,213,750
135,000 Netscape Communications Corp. (a) 8,526,793 8,201,250
130,900 Parametric Technology Corp. (a).............. 2,160,757 2,143,488
67,500 Sapient Corp. (a)............................ 2,929,921 3,780,000
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
153,419 Sterling Commerce, Inc. (a).................. $ 2,999,671 $ 6,903,855
225,000 SunGard Data Systems, Inc. (a)............... 8,010,404 8,929,688
------------- -------------
112,475,392 127,572,498
------------- -------------
CONSTRUCTION-0.80%
135,000 Centex Corp.................................. 5,170,253 6,083,438
------------- -------------
DRUGS-5.88%
180,000 Forest Laboratories, Inc. (a)................ 7,063,545 9,573,750
112,500 MedImmune, Inc. (a).......................... 9,561,375 11,186,719
225,000 Mylan Laboratories, Inc...................... 6,972,593 7,087,500
270,000 Watson Pharmaceuticals, Inc. (a)............. 11,360,667 16,976,250
------------- -------------
34,958,180 44,824,219
------------- -------------
EDUCATIONAL SERVICES-0.54%
135,000 Sylvan Learning Systems, Inc. (a)............ 3,566,233 4,117,500
------------- -------------
ELECTRONIC COMPONENTS-5.28%
180,000 Gentex Corp. (a)............................. 3,294,843 3,600,000
112,500 Jabil Circuit, Inc. (a)...................... 6,943,700 8,395,313
238,000 Solectron Corp. (a).......................... 3,699,403 22,119,125
135,000 Vitesse Semiconductor Corp. (a).............. 3,749,553 6,159,375
------------- -------------
17,687,499 40,273,813
------------- -------------
ELECTRONIC-CONTROLS AND EQUIPMENT-2.28%
180,000 American Power Conversion Corp. (a) 7,758,118 8,718,750
136,000 Symbol Technologies, Inc..................... 6,666,113 8,695,500
------------- -------------
14,424,231 17,414,250
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-1.58%
135,000 Novellus Systems, Inc. (a)................... 5,750,064 6,682,500
77,800 Uniphase Corp. (a)........................... 3,754,933 5,397,375
------------- -------------
9,504,997 12,079,875
------------- -------------
FINANCIAL SERVICES-5.73%
180,000 Ambac Financial Group, Inc................... 11,495,841 10,833,750
120,800 Capital One Financial Corp................... 3,553,695 13,892,000
367,100 Concord EFS, Inc. (a)........................ 8,505,586 15,555,863
1,700 Franklin Resources, Inc...................... 25,769 54,400
133,125 MBNA Corp.................................... 1,689,606 3,319,805
------------- -------------
25,270,497 43,655,818
------------- -------------
FOOD-2.67%
180,000 Keebler Foods Co. (a)........................ 5,958,990 6,772,500
266,600 Suiza Foods Corp. (a)........................ 12,029,560 13,579,938
------------- -------------
17,988,550 20,352,438
------------- -------------
FURNITURE-2.05%
315,000 Furniture Brands International, Inc. (a) 7,561,403 8,583,750
261,000 Herman Miller, Inc........................... 7,979,729 7,014,375
------------- -------------
15,541,132 15,598,125
------------- -------------
HEALTH CARE SERVICES-3.75%
202,500 IDX Systems Corp. (a)........................ 8,289,379 8,910,000
43,900 MedQuist, Inc. (a)........................... 1,491,132 1,734,050
239,100 Omnicare, Inc................................ 8,919,001 8,308,725
326,000 Total Renal Care Holdings, Inc. (a).......... 9,644,737 9,637,375
------------- -------------
28,344,249 28,590,150
------------- -------------
</TABLE>
77
<PAGE>
FORTIS SERIES FUND, INC.
GROWTH STOCK SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
LEISURE TIME-AMUSEMENTS-0.88%
181,200 Royal Caribbean Cruises Ltd.................. $ 6,224,920 $ 6,704,400
------------- -------------
MEDICAL SUPPLIES-4.67%
45,000 MiniMed, Inc. (a)............................ 3,723,505 4,713,750
96,600 Sofamor Danek Group, Inc. (a)................ 8,016,693 11,761,050
327,600 STERIS Corp. (a)............................. 5,867,697 9,316,125
360,000 Sybron International Corp. (a)............... 8,608,045 9,787,500
------------- -------------
26,215,940 35,578,425
------------- -------------
METALS-FABRICATING-2.42%
62,100 Precision Castparts Corp..................... 3,746,665 2,747,925
179,900 Waters Corp. (a)............................. 10,747,614 15,696,275
------------- -------------
14,494,279 18,444,200
------------- -------------
OIL AND GAS FIELD SERVICES-0.54%
259,900 Petroleum Geo-Services ADR (a)............... 3,813,870 4,093,425
------------- -------------
OIL-OFFSORE DRILLING-0.35%
100,100 Transocean Offshore, Inc..................... 3,460,224 2,683,931
------------- -------------
POLLUTION CONTROL-0.32%
135,000 Catalytica, Inc. (a)......................... 2,438,396 2,430,000
------------- -------------
PUBLISHING-0.60%
90,000 Knight Ridder, Inc........................... 4,526,831 4,601,250
------------- -------------
RESTAURANTS AND FRANCHISING-1.78%
241,700 Starbucks Corp. (a).......................... 5,501,347 13,565,413
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
RETAIL-DEPARTMENT STORES-1.74%
216,300 Kohl's Corp. (a)............................. $ 9,388,441 $ 13,288,931
------------- -------------
RETAIL-SPECIALTY-7.22%
90,000 Best Buy Co., Inc. (a)....................... 4,669,677 5,523,750
252,750 Dollar Tree Stores, Inc. (a)................. 5,545,250 11,042,016
366,600 Home Depot, Inc.............................. 5,955,718 22,431,338
367,687 Staples, Inc. (a)............................ 4,316,592 16,063,326
------------- -------------
20,487,237 55,060,430
------------- -------------
TELECOMMUNICATION EQUIPMENT-0.79%
90,000 International Network Services (a)........... 3,615,644 5,985,000
------------- -------------
TELEPHONE SERVICES-4.32%
180,000 Century Telephone Enterprises, Inc........... 8,622,840 12,150,000
290,000 MCI WorldCom, Inc. (a)....................... 4,943,362 20,807,500
------------- -------------
13,566,202 32,957,500
------------- -------------
WASTE DISPOSAL-1.44%
315,000 Republic Services, Inc. (a).................. 7,688,497 5,807,813
110,000 Waste Management, Inc........................ 4,064,413 5,128,750
------------- -------------
11,752,910 10,936,563
------------- -------------
TOTAL COMMON STOCKS.......................... $ 529,650,648 $ 709,965,342
------------- -------------
------------- -------------
</TABLE>
SHORT-TERM INVESTMENTS-5.27%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
------------ -------------
<C> <S> <C>
BANKS-0.47%
$ 3,611,595 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 3,611,595
-------------
DIVERSIFIED FINANCE-0.02%
139,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 139,000
-------------
U.S. GOVERNMENT AGENCY-4.78%
31,800,000 Federal Home Loan Mortgage Corp., 5.23%,
1-8-1999................................... 31,763,770
4,700,000 Federal Home Loan Mortgage Corp., 5.21%,
1-14-1999.................................. 4,690,660
-------------
36,454,430
-------------
TOTAL SHORT-TERM INVESTMENTS................. 40,205,025
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$569,855,673) (b).......................... $ 750,170,367
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $570,459,320 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation..................................... $197,267,725
Unrealized depreciation..................................... (17,556,678)
- --------------------------------------------------------------------------
Net unrealized appreciation................................. $179,711,047
- --------------------------------------------------------------------------
</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 .54% of total net assets as of December 31, 1998.
78
<PAGE>
FORTIS SERIES FUND, INC.
AGGRESSIVE GROWTH SERIES
Schedule of Investments
December 31, 1998
COMMON STOCKS-93.73%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
ADVERTISING-PUBLIC RELATIONS-2.87%
27,000 DoubleClick, Inc. (a)........................ $ 550,829 $ 1,230,187
46,000 Lamar Advertising Co. (a).................... 1,546,970 1,713,500
32,500 TMP Worldwide, Inc. (a)...................... 895,089 1,365,000
------------- -------------
2,992,888 4,308,687
------------- -------------
AEROSPACE AND EQUIPMENT-1.19%
62,000 Kellstrom Industry, Inc. (a)................. 1,246,216 1,782,500
------------- -------------
BANKS-0.58%
40,000 Bay View Capital Corp........................ 626,720 867,500
------------- -------------
BEVERAGE-0.81%
27,000 Beringer Wine Estates Holdings, Inc. (a)..... 1,054,830 1,206,562
------------- -------------
BIOMEDICS, GENETICS RESEARCH AND
DEVELOPMENT-2.15%
40,000 Impath, Inc. (a)............................. 1,184,375 1,060,000
58,000 Incyte Pharmaceuticals, Inc. (a)............. 1,182,157 2,167,750
------------- -------------
2,366,532 3,227,750
------------- -------------
BROADCASTING-0.87%
30,000 Emmis Communications, Inc. Class A (a)....... 1,145,374 1,301,250
------------- -------------
BUSINESS SERVICES AND SUPPLIES-4.03%
25,500 Abacus Direct Corp. (a)...................... 1,117,978 1,160,250
60,000 Diamond Technology Partners, Inc. (a)........ 727,500 1,147,500
15,000 Lason, Inc. (a).............................. 799,999 872,812
40,000 Metzler Group, Inc. (a)...................... 1,472,750 1,947,500
7,500 RCM Technologies, Inc. (a)................... 178,813 198,750
114,900 Renaissance Worldwide, Inc. (a).............. 1,363,879 703,762
------------- -------------
5,660,919 6,030,574
------------- -------------
COMPUTER-COMMUNICATION EQUIPMENT-2.89%
10,800 Geotel Communications Corp. (a).............. 214,892 402,300
30,000 National Computer Systems, Inc............... 887,499 1,110,000
51,000 Network Appliance, Inc. (a).................. 1,184,145 2,295,000
20,000 USWeb Corp. (a).............................. 521,496 527,500
------------- -------------
2,808,032 4,334,800
------------- -------------
COMPUTER-HARDWARE-0.59%
60,000 Read-Rite Corp. (a).......................... 912,532 886,875
------------- -------------
COMPUTER-SOFTWARE-23.01%
61,000 Apex PC Solutions, Inc. (a).................. 1,201,060 1,761,375
55,000 Ardent Software, Inc. (a).................... 915,342 1,265,000
12,500 BindView Development Corp. (a)............... 262,500 343,750
60,000 Business Objects S.A. ADR (a)................ 1,047,632 1,950,000
18,000 Check Point Software Technologies Ltd. (a)... 694,157 824,625
44,000 CheckFree Holdings Corp. (a)................. 908,804 1,028,500
17,000 Citrix Systems, Inc. (a)..................... 1,035,313 1,650,062
15,500 Concord Communications, Inc. (a)............. 555,515 879,625
38,200 Exchange Applications, Inc. (a).............. 519,137 749,675
18,000 Exodus Communications, Inc. (a).............. 971,702 1,156,500
12,000 Infospace.Com, Inc. (a)...................... 180,000 457,500
5,000 Inktomi Corp. (a)............................ 700,000 646,875
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
63,000 Intelligroup, Inc. (a)....................... $ 1,231,017 $ 1,126,125
30,000 IONA Technologies plc ADR (a)................ 1,012,385 1,140,000
20,000 ISS Group, Inc. (a).......................... 804,062 1,100,000
26,000 Jack Henry & Associates, Inc................. 983,093 1,293,500
22,000 Lycos, Inc. (a).............................. 628,250 1,222,375
34,500 Macromedia, Inc. (a)......................... 807,781 1,162,219
45,000 MAPICS, Inc. (a)............................. 831,915 742,500
51,000 Mercury Interactive Corp. (a)................ 1,784,916 3,225,750
23,200 NetGravity, Inc. (a)......................... 450,628 388,600
7,600 Network Solutions, Inc. (a).................. 540,414 994,650
30,000 New Dimension Software Ltd. (a).............. 933,349 1,443,750
43,000 New Era of Networks, Inc. (with rights)
(a)........................................ 755,187 1,892,000
37,000 Preview Travel, Inc. (a)..................... 694,327 682,187
34,000 RWD Technologies, Inc. (a)................... 630,843 735,250
32,500 Segue Software, Inc. (a)..................... 527,346 658,125
35,500 TSI International Software Ltd. (a).......... 931,063 1,699,562
51,100 Verity, Inc. (a)............................. 833,269 1,354,150
25,000 Visio Corp. (a).............................. 883,763 914,062
------------- -------------
24,254,770 34,488,292
------------- -------------
DRUGS-5.19%
43,000 Anesta Corp. (a)............................. 1,019,633 1,144,875
40,000 Coulter Pharmaceutical, Inc. (a)............. 1,129,241 1,200,000
35,000 Emisphere Technologies, Inc. (a)............. 590,562 546,875
45,000 Jones Pharma, Inc............................ 1,207,033 1,642,500
35,000 Medicis Pharmaceutical Corp. (a)............. 1,455,882 2,086,875
20,000 PathoGenesis Corp. (a)....................... 746,000 1,160,000
------------- -------------
6,148,351 7,781,125
------------- -------------
EDUCATIONAL SERVICES-5.09%
47,000 Bright Horizons Family Solutions, Inc. (a)... 1,011,901 1,269,000
35,000 Career Education Corp. (a)................... 620,000 1,050,000
75,000 Education Management Corp. (a)............... 1,296,850 1,771,875
33,600 ITT Educational Services, Inc. (a)........... 962,647 1,142,400
78,500 Sylvan Learning Systems, Inc. (a)............ 2,122,594 2,394,250
------------- -------------
6,013,992 7,627,525
------------- -------------
ELECTRONIC-COMMUNICATION SECURITY-1.18%
29,000 AboveNet Communications, Inc. (a)............ 479,500 609,000
38,000 AXENT Technologies, Inc. (a)................. 670,921 1,161,375
------------- -------------
1,150,421 1,770,375
------------- -------------
ELECTRONIC COMPONENTS-7.19%
33,000 Alpha Industries, Inc........................ 1,121,246 1,188,000
43,000 Applied Micro Circuits Corp. (a)............. 857,655 1,460,656
25,200 Flextronics International Ltd. (a)........... 840,476 2,157,750
29,000 Jabil Circuit, Inc. (a)...................... 804,508 2,164,125
67,000 Level One Communications, Inc. (a)........... 1,374,000 2,378,500
12,000 Maxwell Technologies, Inc. (a)............... 255,900 483,000
15,000 PMC-Sierra, Inc. (a)......................... 413,393 946,875
------------- -------------
5,667,178 10,778,906
------------- -------------
ELECTRONIC-SEMICONDUCTOR AND CAPACITOR-0.82%
31,500 TranSwitch Corp. (a)......................... 512,345 1,226,531
------------- -------------
</TABLE>
79
<PAGE>
FORTIS SERIES FUND, INC.
AGGRESSIVE GROWTH SERIES (CONTINUED)
Schedule of Investments
December 31, 1998
COMMON STOCKS-CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
FINANCIAL SERVICES-5.56%
67,000 Financial Federal Corp. (a).................. $ 1,531,907 $ 1,658,250
138,100 Franchise Mortgage Acceptance Co. (a)........ 1,276,668 1,070,275
43,200 HealthCare Financial Partners, Inc. (a) 1,470,107 1,722,600
35,000 Metris Companies, Inc........................ 1,007,266 1,760,938
65,000 National Commerce Bancorp.................... 1,200,782 1,222,813
20,000 NCO Group, Inc. (a).......................... 541,578 900,000
------------- -------------
7,028,308 8,334,876
------------- -------------
FURNITURE-0.49%
27,500 Select Comfort Corp. (a)..................... 490,925 727,031
------------- -------------
HEALTH CARE SERVICES-7.99%
24,000 Alternative Living Services, Inc. (a)........ 759,619 822,000
30,000 CareMatrix Corp. (a)......................... 584,974 918,750
49,000 Eclipsys Corp. (a)........................... 1,205,969 1,421,000
49,200 Kendle International, Inc. (a)............... 1,332,872 1,150,050
35,000 Orthodontic Centers of America, Inc. (a)..... 671,475 680,313
30,000 Pediatrix Medical Group, Inc. (a)............ 1,504,094 1,798,125
30,000 Province Healthcare Co. (a).................. 848,124 1,076,250
32,000 Renal Care Group, Inc. (a)................... 923,997 922,000
25,000 Sunrise Assisted Living, Inc. (a)............ 955,938 1,296,875
21,200 Superior Consultant Holdings Corp. (a)....... 834,588 922,200
47,000 TLC The Laser Center, Inc. (a)............... 924,579 963,500
------------- -------------
10,546,229 11,971,063
------------- -------------
INSURANCE-0.61%
50,000 INSpire Insurance Solutions, Inc. (a)........ 1,542,500 918,750
------------- -------------
LEASING-0.44%
36,500 DVI, Inc. (a)................................ 659,831 661,563
------------- -------------
LEISURE TIME-AMUSEMENTS-1.41%
70,000 Family Golf Centers, Inc. (a)................ 1,220,884 1,382,500
27,000 Hollywood Entertainment Corp. (a)............ 727,507 735,750
------------- -------------
1,948,391 2,118,250
------------- -------------
MACHINERY-TOOLS-0.60%
59,200 White Cap Industries, Inc. (a)............... 873,087 902,800
------------- -------------
MEDICAL SUPPLIES-0.77%
35,000 CONMED Corp. (a)............................. 1,135,703 1,155,000
------------- -------------
MEDICAL TECHNOLOGY-1.27%
30,000 IGEN International, Inc. (a)................. 852,891 918,750
48,000 QuadraMed Corp. (a).......................... 1,026,206 984,000
------------- -------------
1,879,097 1,902,750
------------- -------------
<CAPTION>
Market
Shares Cost (b) Value (c)
--------- ------------- -------------
<C> <S> <C> <C>
MOTION PICTURES-1.16%
41,000 Macrovision Corp. (a)........................ $ 1,141,313 $ 1,732,250
------------- -------------
RESTAURANTS AND FRANCHISING-0.84%
28,600 Papa John's International, Inc. (a).......... 890,550 1,261,975
------------- -------------
RETAIL-CLOTHING-0.85%
78,000 Pacific Sunwear of California, Inc. (a) 1,806,985 1,277,250
------------- -------------
RETAIL-MISCELLANEOUS-4.18%
43,900 Action Performance Companies, Inc. (a)....... 1,067,531 1,552,963
53,500 Insight Enterprises, Inc. (a)................ 1,689,921 2,721,813
70,000 Musicland Stores Corp. (a)................... 906,633 1,045,625
16,500 Ticketmaster Online-CitySearch, Inc. (a)..... 406,000 940,500
------------- -------------
4,070,085 6,260,901
------------- -------------
RETAIL-SPECIALTY-0.28%
30,000 Media Arts Group, Inc. (a)................... 320,937 421,875
------------- -------------
RETAIL-VARIETY AND VARIETY MAIL ORDER-1.98%
155,900 DM Management Co. (a)........................ 2,131,428 2,962,100
------------- -------------
TELECOMMUNICATIONS-1.01%
98,000 IDT Corp. (a)................................ 1,620,067 1,506,750
------------- -------------
TELECOMMUNICATION EQUIPMENT-3.21%
43,200 ANTEC Corp. (a).............................. 749,758 869,400
25,000 CommScope, Inc. (a).......................... 337,500 420,313
95,000 Microwave Power Devices, Inc. (a)............ 848,513 985,625
32,000 RF Micro Devices, Inc. (a)................... 808,152 1,484,000
63,500 Tekelec (a).................................. 1,183,423 1,051,719
------------- -------------
3,927,346 4,811,057
------------- -------------
TELEPHONE SERVICES-1.17%
80,350 STAR Telecommunications, Inc. (a)............ 846,893 979,266
20,000 WinStar Communications, Inc. (a)............. 493,126 780,000
------------- -------------
1,340,019 1,759,266
------------- -------------
WASTE DISPOSAL-1.45%
30,000 Casella Waste Systems, Inc. (a).............. 958,750 1,113,750
61,000 Waste Industries, Inc. (a)................... 1,271,059 1,052,250
------------- -------------
2,229,809 2,166,000
------------- -------------
TOTAL COMMON STOCKS.......................... $ 108,143,710 $ 140,470,759
------------- -------------
------------- -------------
</TABLE>
80
<PAGE>
SHORT-TERM INVESTMENTS-5.39%
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Market
Amount Value (c)
----------- -------------
<C> <S> <C>
BANKS-3.38%
$5,061,000 U.S. Bank N.A. Money Market Variable Rate
Time Deposit, Current rate -- 5.03%........ $ 5,061,000
-------------
DIVERSIFIED FINANCE-2.01%
3,020,000 Associates Corp. Master Variable Rate Note,
Current rate -- 4.69%...................... 3,020,000
-------------
TOTAL SHORT-TERM INVESTMENTS................. 8,081,000
-------------
-------------
TOTAL INVESTMENTS IN SECURITIES (COST:
$116,224,710) (b).......................... $ 148,551,759
-------------
-------------
</TABLE>
(a) Presently not paying dividend income.
(b) At December 31, 1998, the cost of securities for federal income tax
purposes was $116,244,810 and the aggregate gross unrealized appreciation
and depreciation based on that cost was:
<TABLE>
<S> <C>
Unrealized appreciation.......................................... $35,938,075
Unrealized depreciation.......................................... (3,631,126)
- ------------------------------------------------------------------------------
Net unrealized appreciation...................................... $32,306,949
- ------------------------------------------------------------------------------
</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 4.22% of total net assets as of December 31, 1998.
81
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Assets and Liabilities
December 31, 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).................... $77,185,498 $156,525,228 $113,662,064 $23,099,604 $70,120,383
Cash on deposit with custodian........ 1,588 615 -- -- 468
Foreign currency on deposit with
custodian........................... -- -- -- 971,631 --
Collateral for securities lending
transactions (Note 1)............... -- -- -- -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- -- 287,620 --
Investment securities sold.......... -- -- 33,713 -- 19,612
Interest and dividends.............. 22,248 938,543 1,574,417 575,607 1,634,804
Subscriptions of capital stock...... -- 5,013 8,081 -- 19,753
Prepaid expenses...................... -- -- -- -- --
------------ ------------- ------------- ------------ ------------
TOTAL ASSETS............................ 77,209,334 157,469,399 115,278,275 24,934,462 71,795,020
------------ ------------- ------------- ------------ ------------
LIABILITIES:
Bank overdraft........................ -- -- 18,076 -- --
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........................... -- 4,635,375 -- -- 750,000
Redemptions of capital stock.......... 75,288 65,633 4,565 241,252 12,839
Payable for investment advisory and
management fees (Note 2)............ 19,268 60,917 46,093 15,667 30,215
Accounts payable and accrued
expenses............................ 17,643 35,171 27,164 18,346 19,268
------------ ------------- ------------- ------------ ------------
TOTAL LIABILITIES....................... 112,199 4,797,096 95,898 275,265 812,322
------------ ------------- ------------- ------------ ------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 73,810,121 156,438,833 114,400,456 23,210,462 72,919,431
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... -- 5,557,986 2,092,752 1,405,431 (6,714,975)
Undistributed (excess of distributions
over) net investment income......... 3,352,487 7,968,815 7,229,293 (146,800) 6,362,602
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ (65,473) (17,293,331) (8,540,124) 190,104 (1,584,360)
------------ ------------- ------------- ------------ ------------
TOTAL NET ASSETS........................ $77,097,135 $152,672,303 $115,182,377 $24,659,197 $70,982,698
------------ ------------- ------------- ------------ ------------
------------ ------------- ------------- ------------ ------------
NET ASSET VALUE PER SHARE............... $11.06 $10.93 $11.91 $11.56 $9.91
------------ ------------- ------------- ------------ ------------
------------ ------------- ------------- ------------ ------------
*Cost................................... $77,185,498 $150,967,242 $111,569,312 $22,030,869 $76,835,358
**Outstanding shares.................... 6,968,506 13,970,615 9,667,496 2,133,030 7,165,758
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
82
<PAGE>
- --------------------------------------------------------------------------------
<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).................... $67,864,061 $594,051,006 $ 88,066,494 $312,316,610 $253,988,752
Cash on deposit with custodian........ -- 34,313 1,116 17,996 --
Foreign currency on deposit with
custodian........................... 761,017 -- -- -- --
Collateral for securities lending
transactions (Note 1)............... -- -- 14,648,734 59,128,950 52,594,292
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... 7,751 -- -- -- --
Investment securities sold.......... -- -- 10,127,050 -- 1,457,252
Interest and dividends.............. 751,689 2,365,415 103,752 847,085 286,996
Subscriptions of capital stock...... 52,454 119,531 -- 3,957 384,937
Prepaid expenses...................... -- -- -- -- --
------------ ------------- ------------- ------------- -------------
TOTAL ASSETS............................ 69,436,972 596,570,265 112,947,146 372,314,598 308,712,229
------------ ------------- ------------- ------------- -------------
LIABILITIES:
Bank overdraft........................ -- -- -- -- 1,700
Unrealized depreciation on forward
foreign currency contracts-net (Note
1 and 3)............................ -- -- -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- -- 14,648,734 59,128,950 52,594,292
Payable for investment securities
purchased........................... -- 2,376,830 10,561,083 -- 3,164,813
Redemptions of capital stock.......... 266,533 -- 61,512 36,620 368
Payable for investment advisory and
management fees (Note 2)............ 52,159 225,429 51,920 164,449 81,070
Accounts payable and accrued
expenses............................ 32,025 90,136 19,504 45,089 38,010
------------ ------------- ------------- ------------- -------------
TOTAL LIABILITIES....................... 350,717 2,692,395 25,342,753 59,375,108 55,880,253
------------ ------------- ------------- ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 58,709,413 411,381,186 78,388,278 216,129,934 196,972,674
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 9,010,391 123,521,267 8,249,975 76,739,588 55,728,898
Undistributed (excess of distributions
over) net investment income......... (3,440) 13,723,599 9,431 7,013,204 20,905
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 1,369,891 45,251,818 956,709 13,056,764 109,499
------------ ------------- ------------- ------------- -------------
TOTAL NET ASSETS........................ $69,086,255 $593,877,870 $ 87,604,393 $312,939,490 $252,831,976
------------ ------------- ------------- ------------- -------------
------------ ------------- ------------- ------------- -------------
NET ASSET VALUE PER SHARE............... $14.32 $21.09 $14.38 $21.23 $18.83
------------ ------------- ------------- ------------- -------------
------------ ------------- ------------- ------------- -------------
*Cost................................... $58,903,155 $470,529,739 $ 79,816,519 $235,577,022 $198,385,579
**Outstanding shares.................... 4,824,005 28,154,879 6,094,107 14,742,412 13,423,931
<CAPTION>
BLUE CHIP INTERNATIONAL MID CAP
STOCK STOCK STOCK
SERIES SERIES SERIES
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $183,466,587 $102,733,674 $13,027,512
Cash on deposit with custodian........ -- -- --
Foreign currency on deposit with
custodian........................... -- 278,340 --
Collateral for securities lending
transactions (Note 1)............... 41,238,289 -- --
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- --
Investment securities sold.......... -- -- 859,435
Interest and dividends.............. 187,555 466,499 17,179
Subscriptions of capital stock...... -- 12,846 12,182
Prepaid expenses...................... 385 -- 9,620
------------- ------------- ------------
TOTAL ASSETS............................ 224,892,816 103,491,359 13,925,928
------------- ------------- ------------
LIABILITIES:
Bank overdraft........................ -- -- --
Unrealized depreciation on forward
foreign currency contracts-net (Note
1 and 3)............................ -- -- --
Payable upon return of securities
loaned (Note 1)..................... 41,238,289 -- --
Payable for investment securities
purchased........................... 479,991 278,340 911,542
Redemptions of capital stock.......... 94,207 39,182 --
Payable for investment advisory and
management fees (Note 2)............ 128,342 72,297 8,900
Accounts payable and accrued
expenses............................ 30,596 46,009 10,299
------------- ------------- ------------
TOTAL LIABILITIES....................... 41,971,425 435,828 930,741
------------- ------------- ------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 141,411,188 87,684,298 12,397,905
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... 41,802,009 16,093,872 962,769
Undistributed (excess of distributions
over) net investment income......... 9,441 96,265 --
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ (301,247) (818,904) (365,487)
------------- ------------- ------------
TOTAL NET ASSETS........................ $182,921,391 $103,055,531 $12,995,187
------------- ------------- ------------
------------- ------------- ------------
NET ASSET VALUE PER SHARE............... $18.58 $14.48 $9.64
------------- ------------- ------------
------------- ------------- ------------
*Cost................................... $141,664,579 $ 86,653,293 $12,076,868
**Outstanding shares.................... 9,846,939 7,115,716 1,348,541
</TABLE>
83
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Assets and Liabilities (continued)
December 31, 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>
ASSETS:
Investments in securities, as detailed
in the accompanying schedules, at
market* (Note 1).................... $16,377,624 $351,104,519 $19,604,832 $750,170,367 $148,551,759
Cash on deposit with custodian........ -- 280 -- 1,147 729
Foreign currency on deposit with
custodian........................... -- -- -- -- --
Collateral for securities lending
transactions (Note 1)............... -- 78,161,714 -- -- 33,678,050
Receivables:
Unrealized appreciation on forward
foreign currency contracts -- net
(Note 1 and 3).................... -- -- -- -- --
Investment securities sold.......... 710,253 610,473 -- 13,083,816 7,801,816
Interest and dividends.............. 48,670 270,587 8,118 154,268 42,619
Subscriptions of capital stock...... 6,657 663 43,217 -- --
Prepaid expenses...................... 38 -- -- -- --
------------ ------------- ------------ ------------- -------------
TOTAL ASSETS............................ 17,143,242 430,148,236 19,656,167 763,409,598 190,074,973
------------ ------------- ------------ ------------- -------------
LIABILITIES:
Bank overdraft........................ -- -- -- -- --
Unrealized depreciation on forward
foreign currency contracts-net (Note
1 and 3)............................ -- 5,276 -- -- --
Payable upon return of securities
loaned (Note 1)..................... -- 78,161,714 -- -- 33,678,050
Payable for investment securities
purchased........................... 600,722 -- 503,166 81,650 6,303,745
Redemptions of capital stock.......... 19,169 200,830 8,812 480,421 127,040
Payable for investment advisory and
management fees (Note 2)............ 11,598 201,689 13,238 369,264 78,861
Accounts payable and accrued
expenses............................ 8,290 102,573 10,221 124,496 27,599
------------ ------------- ------------ ------------- -------------
TOTAL LIABILITIES....................... 639,779 78,672,082 535,437 1,055,831 40,215,295
------------ ------------- ------------ ------------- -------------
NET ASSETS:
Net proceeds of capital stock, par
value $.01 per share -- authorized
20,000,000,000 shares;**............ 16,459,420 202,814,690 16,267,602 357,106,827 111,020,052
Unrealized appreciation (depreciation)
of investments in securities and
other assets and liabilities
denominated in foreign currency..... (271,771) 140,083,068 3,245,795 180,314,694 32,327,049
Undistributed (excess of distributions
over) net investment income......... 1,290 416,661 1,268 1,520,916 74,969
Accumulated net realized gain (loss)
from sale of investments and foreign
currency............................ 314,524 8,161,735 (393,935) 223,411,330 6,437,608
------------ ------------- ------------ ------------- -------------
TOTAL NET ASSETS........................ $16,503,463 $351,476,154 $19,120,730 $762,353,767 $149,859,678
------------ ------------- ------------ ------------- -------------
------------ ------------- ------------ ------------- -------------
NET ASSET VALUE PER SHARE............... $9.28 $22.57 $12.04 $41.09 $16.70
------------ ------------- ------------ ------------- -------------
------------ ------------- ------------ ------------- -------------
*Cost................................... $16,649,395 $211,032,076 $16,359,037 $569,855,673 $116,224,710
**Outstanding shares.................... 1,778,432 15,574,153 1,587,509 18,554,191 8,973,277
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
84
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Operations
For the Year Ended December 31, 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..................... $3,578,216 $ 8,709,591 $ 7,803,547 $1,107,359 $ 6,744,552
Dividend Income..................... -- -- -- -- --
Fee income (Note 1)................. -- -- -- -- --
----------- ------------ ------------ ----------- ------------
Total Income *........................ 3,578,216 8,709,591 7,803,547 1,107,359 6,744,552
----------- ------------ ------------ ----------- ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 194,182 673,637 521,148 163,906 338,252
Legal and auditing fees (Note 2).... 16,060 26,200 22,100 21,100 20,300
Custodian fees...................... 1,250 7,000 4,800 2,800 7,500
Shareholders' notices and reports... 10,995 21,500 16,800 2,896 10,500
Directors' fees and expenses........ 1,725 4,510 3,228 681 2,043
Other............................... 1,305 7,730 5,586 1,147 3,221
----------- ------------ ------------ ----------- ------------
Total Expenses........................ 225,517 740,577 573,662 192,530 381,816
Less reimbursable expenses (Note
2).............................. -- -- -- -- --
----------- ------------ ------------ ----------- ------------
Net Expenses........................ 225,517 740,577 573,662 192,530 381,816
----------- ------------ ------------ ----------- ------------
NET INVESTMENT INCOME................... 3,352,699 7,969,014 7,229,885 914,829 6,362,736
----------- ------------ ------------ ----------- ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... -- 2,483,190 938,352 798,168 (1,571,961)
Foreign currency transactions....... -- -- -- (475,036) --
Future contracts.................... -- -- -- -- --
----------- ------------ ------------ ----------- ------------
NET REALIZED GAIN(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... -- 2,483,190 938,352 323,132 (1,571,961)
----------- ------------ ------------ ----------- ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... -- 1,611,008 (1,442,471) 71,214 (4,554,635)
Translation of assets and liabilities
denominated in foreign currency..... -- -- -- 1,550,229 --
----------- ------------ ------------ ----------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... -- 1,611,008 (1,442,471) 1,621,443 (4,554,635)
----------- ------------ ------------ ----------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... -- 4,094,198 (504,119) 1,944,575 (6,126,596)
----------- ------------ ------------ ----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $3,352,699 $12,063,212 $ 6,725,766 $2,859,404 $ 236,140
----------- ------------ ------------ ----------- ------------
----------- ------------ ------------ ----------- ------------
</TABLE>
<TABLE>
<CAPTION>
*Net of foreign witholding taxes of:
<S> <C>
Global Bond Series $ 22,099
Global Asset Allocation Series 63,640
Asset Allocation Series 33,810
Value Series 198
Growth & Income Series 39,736
S&P 500 Index Series 20,041
Blue Chip Stock Series 3,931
International Stock Series 185,818
Global Growth Series 287,178
Large Cap Growth Series 755
Growth Stock Series 8,052
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
** FOR THE PERIOD MARCH 25, 1998 (INCEPTION) TO DECEMBER 31, 1998.
85
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Operations (continued)
For the Year Ended December 31, 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>
NET INVESTMENT INCOME:
Income:
Interest income..................... $1,312,470 $14,001,080 $ 339,020 $ 1,827,589 $ 321,689
Dividend Income..................... 590,054 2,395,670 1,189,443 7,068,486 2,543,379
Fee income (Note 1)................. -- -- 3,539 42,307 9,307
----------- ------------ ----------- ------------ ------------
Total Income *........................ 1,902,524 16,396,750 1,532,002 8,938,382 2,874,375
----------- ------------ ----------- ------------ ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 546,257 2,471,163 531,886 1,816,200 707,922
Legal and auditing fees (Note 2).... 22,200 52,250 17,200 29,100 19,300
Custodian fees...................... 17,600 20,700 9,900 11,600 32,750
Shareholders' notices and reports... 9,099 87,000 11,500 45,960 26,800
Directors' fees and expenses........ 1,036 15,704 2,419 8,658 5,542
Other............................... 13,825 26,196 3,049 13,660 16,759
----------- ------------ ----------- ------------ ------------
Total Expenses........................ 610,017 2,673,013 575,954 1,925,178 809,073
Less reimbursable expenses (Note
2).............................. -- -- -- -- --
----------- ------------ ----------- ------------ ------------
Net Expenses........................ 610,017 2,673,013 575,954 1,925,178 809,073
----------- ------------ ----------- ------------ ------------
NET INVESTMENT INCOME................... 1,292,507 13,723,737 956,048 7,013,204 2,065,302
----------- ------------ ----------- ------------ ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... 4,170,375 45,251,936 1,481,511 13,057,181 933,353
Foreign currency transactions....... (23,669) -- -- -- --
Future contracts.................... -- -- -- -- 755,725
----------- ------------ ----------- ------------ ------------
NET REALIZED GAIN(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... 4,146,706 45,251,936 1,481,511 13,057,181 1,689,078
----------- ------------ ----------- ------------ ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 2,232,049 37,652,297 3,744,569 14,165,370 40,983,076
Translation of assets and liabilities
denominated in foreign currency..... 1,206,078 -- -- -- --
----------- ------------ ----------- ------------ ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... 3,438,127 37,652,297 3,744,569 14,165,370 40,983,076
----------- ------------ ----------- ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... 7,584,833 82,904,233 5,226,080 27,222,551 42,672,154
----------- ------------ ----------- ------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $8,877,340 $96,627,970 $6,182,128 $34,235,755 $44,737,456
----------- ------------ ----------- ------------ ------------
----------- ------------ ----------- ------------ ------------
</TABLE>
<TABLE>
<CAPTION>
*Net of foreign witholding taxes of:
<S> <C>
Global Bond Series $ 22,099
Global Asset Allocation Series 63,640
Asset Allocation Series 33,810
Value Series 198
Growth & Income Series 39,736
S&P 500 Index Series 20,041
Blue Chip Stock Series 3,931
International Stock Series 185,818
Global Growth Series 287,178
Large Cap Growth Series 755
Growth Stock Series 8,052
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
** FOR THE PERIOD MARCH 25, 1998 (INCEPTION) TO DECEMBER 31, 1998.
86
<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>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 435,143 $ 222,971 $ 38,733 $ 57,693 $ 845,932 $ 46,984
Dividend Income..................... 1,282,845 1,745,817 47,922 147,356 2,138,552 46,033
Fee income (Note 1)................. 8,392 -- -- -- 122,532 --
------------ ------------ ----------- ----------- ------------ -----------
Total Income *........................ 1,726,380 1,968,788 86,655 205,049 3,107,016 93,017
------------ ------------ ----------- ----------- ------------ -----------
Expenses:
Investment advisory and management
fees (Note 2)..................... 1,131,224 782,792 49,482 61,548 2,487,275 63,457
Legal and auditing fees (Note 2).... 18,300 23,000 18,083 18,174 38,500 18,112
Custodian fees...................... 24,700 34,800 6,400 3,214 52,700 5,800
Shareholders' notices and reports... 18,300 18,000 450 457 71,500 450
Directors' fees and expenses........ 3,572 2,652 165 205 10,374 190
Other............................... 4,908 4,254 774 174 18,769 235
------------ ------------ ----------- ----------- ------------ -----------
Total Expenses........................ 1,201,004 865,498 75,354 83,772 2,679,118 88,244
Less reimbursable expenses (Note
2).............................. -- -- (10,396) -- -- (1,399)
------------ ------------ ----------- ----------- ------------ -----------
Net Expenses........................ 1,201,004 865,498 64,958 83,772 2,679,118 86,845
------------ ------------ ----------- ----------- ------------ -----------
NET INVESTMENT INCOME................... 525,376 1,103,290 21,697 121,277 427,898 6,172
------------ ------------ ----------- ----------- ------------ -----------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... 2,556,953 5,362,511 (370,862) 415,685 9,084,948 (393,935)
Foreign currency transactions....... (82) (6,965) -- -- (11,067) --
Future contracts.................... -- -- 5,375 -- -- --
------------ ------------ ----------- ----------- ------------ -----------
NET REALIZED GAIN(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... 2,556,871 5,355,546 (365,487) 415,685 9,073,881 (393,935)
------------ ------------ ----------- ----------- ------------ -----------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... 29,808,512 6,922,013 962,769 (271,771) 27,709,105 3,245,795
Translation of assets and liabilities
denominated in foreign currency..... 53 18,512 -- -- 17,838 --
------------ ------------ ----------- ----------- ------------ -----------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... 29,808,565 6,940,525 962,769 (271,771) 27,726,943 3,245,795
------------ ------------ ----------- ----------- ------------ -----------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... 32,365,436 12,296,071 597,282 143,914 36,800,824 2,851,860
------------ ------------ ----------- ----------- ------------ -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $32,890,812 $13,399,361 $ 618,979 $ 265,191 $37,228,722 $2,858,032
------------ ------------ ----------- ----------- ------------ -----------
------------ ------------ ----------- ----------- ------------ -----------
<CAPTION>
GROWTH AGGRESSIVE
STOCK GROWTH
SERIES SERIES
------------- ------------
<S> <C> <C>
NET INVESTMENT INCOME:
Income:
Interest income..................... $ 4,887,836 $ 898,424
Dividend Income..................... 1,278,336 32,749
Fee income (Note 1)................. -- 73,564
------------- ------------
Total Income *........................ 6,166,172 1,004,737
------------- ------------
Expenses:
Investment advisory and management
fees (Note 2)..................... 4,378,864 871,318
Legal and auditing fees (Note 2).... 50,600 20,900
Custodian fees...................... 29,000 4,300
Shareholders' notices and reports... 127,000 22,500
Directors' fees and expenses........ 21,600 3,912
Other............................... 37,163 6,424
------------- ------------
Total Expenses........................ 4,644,227 929,354
Less reimbursable expenses (Note
2).............................. -- --
------------- ------------
Net Expenses........................ 4,644,227 929,354
------------- ------------
NET INVESTMENT INCOME................... 1,521,945 75,383
------------- ------------
REALIZED & UNREALIZED GAIN (LOSS) ON
INVESTMENTS & FOREIGN CURRENCY
TRANSACTIONS: (NOTE 1)
Net realized gain (loss) from:
Investments......................... 223,412,949 22,180,829
Foreign currency transactions....... -- --
Future contracts.................... -- --
------------- ------------
NET REALIZED GAIN(LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS..... 223,412,949 22,180,829
------------- ------------
NET CHANGES IN UNREALIZED APPRECIATION
(DEPRECIATION) OF:
Investments........................... (98,914,608) 4,080,141
Translation of assets and liabilities
denominated in foreign currency..... -- --
------------- ------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS......... (98,914,608) 4,080,141
------------- ------------
NET GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY...................... 124,498,341 26,260,970
------------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS....................... $126,020,286 $26,336,353
------------- ------------
------------- ------------
</TABLE>
87
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
U.S. GOVERNMENT
MONEY MARKET SERIES SECURITIES SERIES
<CAPTION>
- ---------------------------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
---------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 3,352,699 $ 3,313,980 $ 7,969,014 $ 8,872,753
Net realized gain
(loss) on investments
and foreign currency
transactions......... -- -- 2,483,190 1,395,092
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... -- 3,000 1,611,008 2,349,632
---------------- ---------------- ----------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 3,352,699 3,316,980 12,063,212 12,617,477
---------------- ---------------- ----------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (3,313,814) (2,705,380) (8,884,962) (10,443,459)
From net realized gains
on investments....... -- -- -- --
Excess distributions of
net realized gains... -- -- -- (12,585)
---------------- ---------------- ----------------- -----------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (3,313,814) (2,705,380) (8,884,962) (10,456,044)
---------------- ---------------- ----------------- -----------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 69,216,897 61,306,146 33,885,181 8,542,021
Proceeds from shares
issued as a result of
reinvested
dividends............ 3,313,814 2,705,380 8,884,962 10,456,044
Less cost of
repurchase........... (52,481,696) (69,520,242) (35,345,954) (40,767,607)
---------------- ---------------- ----------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 20,049,015 (5,508,716) 7,424,189 (21,769,542)
---------------- ---------------- ----------------- -----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 20,087,900 (4,897,116) 10,602,439 (19,608,109)
NET ASSETS:
Beginning of year...... 57,009,235 61,906,351 142,069,864 161,677,973
---------------- ---------------- ----------------- -----------------
END OF YEAR (NOTE 4)..... $ 77,097,135 $ 57,009,235 $ 152,672,303 $ 142,069,864
---------------- ---------------- ----------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ASSET ALLOCATION SERIES VALUE SERIES
<CAPTION>
- -------------------------------------------------------------------------------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997
------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 13,723,737 $ 13,892,259 $ 956,048 $ 461,950
Net realized gain
(loss) on investments
and foreign currency
transactions......... 45,251,936 52,435,168 1,481,511 3,157,481
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 37,652,297 14,177,467 3,744,569 3,509,573
------------------ ------------------ ----------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 96,627,970 80,504,894 6,182,128 7,129,004
------------------ ------------------ ----------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (180,867) (13,867,757) (946,617) (467,774)
From net realized gains
on investments....... (863,229) (51,914,842) (995,235) (2,671,473)
Excess distributions of
net realized gains... -- (43,990) -- --
------------------ ------------------ ----------------- -----------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (1,044,096) (65,826,589) (1,941,852) (3,139,247)
------------------ ------------------ ----------------- -----------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 45,570,701 33,396,356 34,538,243 35,435,693
Proceeds from shares
issued as a result of
reinvested
dividends............ 1,044,096 65,826,589 1,941,852 3,139,247
Less cost of
repurchase........... (30,600,830) (29,333,554) (8,173,880) (1,458,270)
------------------ ------------------ ----------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 16,013,967 69,889,391 28,306,215 37,116,670
------------------ ------------------ ----------------- -----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 111,597,841 84,567,696 32,546,491 41,106,427
NET ASSETS:
Beginning of year...... 482,280,029 397,712,333 55,057,902 13,951,475
------------------ ------------------ ----------------- -----------------
END OF YEAR (NOTE 4)..... $ 593,877,870 $ 482,280,029 $ 87,604,393 $ 55,057,902
------------------ ------------------ ----------------- -----------------
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
DIVERSIFIED INCOME SERIES GLOBAL BOND SERIES HIGH YIELD SERIES
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998
----------------- ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 7,229,885 $ 7,325,647 $ 914,829 $ 879,335 $ 6,362,736
Net realized gain
(loss) on investments
and foreign currency
transactions......... 938,352 269,397 323,132 (482,718) (1,571,961)
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... (1,442,471) 2,635,067 1,621,443 (360,352) (4,554,635)
----------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 6,725,766 10,230,111 2,859,404 36,265 236,140
----------------- ----------------- ---------------- ---------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (7,342,970) (7,363,139) (386,998) (692,786) (5,343,079)
From net realized gains
on investments....... -- -- (678,922) (189,105) (417,351)
Excess distributions of
net realized gains... -- (16,851) -- -- --
----------------- ----------------- ---------------- ---------------- -----------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (7,342,970) (7,379,990) (1,065,920) (881,891) (5,760,430)
----------------- ----------------- ---------------- ---------------- -----------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 14,339,798 5,081,901 6,654,648 3,704,954 20,135,740
Proceeds from shares
issued as a result of
reinvested
dividends............ 7,342,970 7,379,990 1,065,920 881,891 5,760,430
Less cost of
repurchase........... (11,083,127) (15,942,672) (5,546,824) (3,276,871) (8,617,622)
----------------- ----------------- ---------------- ---------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 10,599,641 (3,480,781) 2,173,744 1,309,974 17,278,548
----------------- ----------------- ---------------- ---------------- -----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 9,982,437 (630,660) 3,967,228 464,348 11,754,258
NET ASSETS:
Beginning of year...... 105,199,940 105,830,600 20,691,969 20,227,621 59,228,440
----------------- ----------------- ---------------- ---------------- -----------------
END OF YEAR (NOTE 4)..... $ 115,182,377 $ 105,199,940 $ 24,659,197 $ 20,691,969 $ 70,982,698
----------------- ----------------- ---------------- ---------------- -----------------
<CAPTION>
GLOBAL ASSET
ALLOCATION SERIES
- -------------------------
FOR THE
YEAR ENDED
DECEMBER 31,
1997 1998 1997
----------------- ----------------- -----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 5,322,072 $ 1,292,507 $ 1,091,307
Net realized gain
(loss) on investments
and foreign currency
transactions......... 1,616,252 4,146,706 2,194,474
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... (2,246,434) 3,438,127 2,474,960
----------------- ----------------- -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 4,691,890 8,877,340 5,760,741
----------------- ----------------- -----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (57,517) (1,388,012) (958,004)
From net realized gains
on investments....... -- (3,400,505) (1,725,819)
Excess distributions of
net realized gains... (21,313) -- --
----------------- ----------------- -----------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (78,830) (4,788,517) (2,683,823)
----------------- ----------------- -----------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 17,384,708 12,350,058 11,926,186
Proceeds from shares
issued as a result of
reinvested
dividends............ 78,830 4,788,517 2,683,823
Less cost of
repurchase........... (5,426,218) (4,623,535) (2,511,567)
----------------- ----------------- -----------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 12,037,320 12,515,040 12,098,442
----------------- ----------------- -----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 16,650,380 16,603,863 15,175,360
NET ASSETS:
Beginning of year...... 42,578,060 52,482,392 37,307,032
----------------- ----------------- -----------------
END OF YEAR (NOTE 4)..... $ 59,228,440 $ 69,086,255 $ 52,482,392
----------------- ----------------- -----------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
BLUE CHIP STOCK
GROWTH & INCOME SERIES S & P 500 INDEX SERIES SERIES
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1998 1997 1998
------------------ ------------------ ------------------ ------------------ ------------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 7,013,204 $ 4,900,521 $ 2,065,302 $ 866,865 $ 525,376
Net realized gain
(loss) on investments
and foreign currency
transactions......... 13,057,181 3,221,007 1,689,078 847,118 2,556,871
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 14,165,370 37,967,041 40,983,076 13,027,357 29,808,565
------------------ ------------------ ------------------ ------------------ ------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 34,235,755 46,088,569 44,737,456 14,741,340 32,890,812
------------------ ------------------ ------------------ ------------------ ------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... -- (4,905,160) (2,050,052) (869,171) (540,313)
From net realized gains
on investments....... (87,128) (2,662,426) (1,703,968) (807,932) (2,496,974)
Excess distributions of
net realized gains... -- -- -- -- --
------------------ ------------------ ------------------ ------------------ ------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (87,128) (7,567,586) (3,754,020) (1,677,103) (3,037,287)
------------------ ------------------ ------------------ ------------------ ------------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 48,859,144 70,154,490 123,716,587 92,987,716 74,531,512
Proceeds from shares
issued as a result of
reinvested
dividends............ 87,128 7,567,586 3,754,020 1,677,102 3,037,287
Less cost of
repurchase........... (15,125,776) (6,204,897) (25,193,834) (20,135,877) (3,229,540)
------------------ ------------------ ------------------ ------------------ ------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 33,820,496 71,517,179 102,276,773 74,528,941 74,339,259
------------------ ------------------ ------------------ ------------------ ------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 67,969,123 110,038,162 143,260,209 87,593,178 104,192,784
NET ASSETS:
Beginning of year...... 244,970,367 134,932,205 109,571,767 21,978,589 78,728,607
------------------ ------------------ ------------------ ------------------ ------------------
END OF YEAR (NOTE 4)..... $ 312,939,490 $ 244,970,367 $ 252,831,976 $ 109,571,767 $ 182,921,391
------------------ ------------------ ------------------ ------------------ ------------------
<CAPTION>
INTERNATIONAL STOCK SERIES
- -------------------------
FOR THE
YEAR ENDED
DECEMBER 31,
1997 1998 1997
----------------- ------------------ -----------------
<S> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 340,780 $ 1,103,290 $ 739,033
Net realized gain
(loss) on investments
and foreign currency
transactions......... (357,643) 5,355,546 2,268,127
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 10,236,126 6,940,525 4,144,307
----------------- ------------------ -----------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 10,219,263 13,399,361 7,151,467
----------------- ------------------ -----------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (317,040) (1,711,172) (862,090)
From net realized gains
on investments....... (14,834) (5,357,302) (2,341,614)
Excess distributions of
net realized gains... -- -- --
----------------- ------------------ -----------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (331,874) (7,068,474) (3,203,704)
----------------- ------------------ -----------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 51,873,817 26,302,212 23,285,792
Proceeds from shares
issued as a result of
reinvested
dividends............ 331,874 7,068,474 3,203,705
Less cost of
repurchase........... (970,631) (15,788,470) (3,626,173)
----------------- ------------------ -----------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 51,235,060 17,582,216 22,863,324
----------------- ------------------ -----------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 61,122,449 23,913,103 26,811,087
NET ASSETS:
Beginning of year...... 17,606,158 79,142,428 52,331,341
----------------- ------------------ -----------------
END OF YEAR (NOTE 4)..... $ 78,728,607 $ 103,055,531 $ 79,142,428
----------------- ------------------ -----------------
</TABLE>
89
<PAGE>
FORTIS SERIES FUND, INC.
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MID CAP STOCK SERIES SMALL CAP VALUE SERIES GLOBAL GROWTH SERIES
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE
MARCH 25, 1998 MARCH 25, 1998 YEAR ENDED
(INCEPTION) TO (INCEPTION) TO DECEMBER 31,
DECEMBER 31, 1998 DECEMBER 31, 1998 1998 1997
--------------------- ----------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 21,697 $ 121,277 $ 427,898 $ 418,960
Net realized gain
(loss) on investments
and foreign currency
transactions......... (365,487) 415,685 9,073,881 15,959,078
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 962,769 (271,771) 27,726,943 6,804,752
--------------------- ------------ --------------------- ---------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 618,979 265,191 37,228,722 23,182,790
--------------------- ------------ --------------------- ---------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (22,320) (119,987) (390,427) --
From net realized gains
on investments....... -- (101,161) -- --
Excess distributions of
net realized gains... -- -- -- --
--------------------- ------------ --------------------- ---------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (22,320) (221,148) (390,427) --
--------------------- ------------ --------------------- ---------------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 12,640,460 16,846,539 13,480,954 32,866,688
Proceeds from shares
issued as a result of
reinvested
dividends............ 22,320 221,148 390,427 --
Less cost of
repurchase........... (264,252) (608,267) (52,488,092) (22,625,629)
--------------------- ------------ --------------------- ---------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 12,398,528 16,459,420 (38,616,711) 10,241,059
--------------------- ------------ --------------------- ---------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 12,995,187 16,503,463 (1,778,416) 33,423,849
NET ASSETS:
Beginning of year...... -- -- 353,254,570 319,830,721
--------------------- ------------ --------------------- ---------------------
END OF YEAR (NOTE 4)..... $ 12,995,187 $ 16,503,463 $ 351,476,154 $ 353,254,570
--------------------- ------------ --------------------- ---------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
AGGRESSIVE GROWTH
LARGE CAP GROWTH SERIES GROWTH STOCK SERIES SERIES
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FOR THE PERIOD FOR THE FOR THE
MARCH 25, 1998 YEAR ENDED YEAR ENDED
(INCEPTION) TO DECEMBER 31, DECEMBER 31,
DECEMBER 31, 1998 1998 1997 1998
------------------------ --------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment
income............... $ 6,172 $ 1,521,945 $ 2,324,447 $ 75,383
Net realized gain
(loss) on investments
and foreign currency
transactions......... (393,935) 223,412,949 38,901,237 22,180,829
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 3,245,795 (98,914,608) 39,658,806 4,080,141
------------ --------------------- --------------------- ---------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 2,858,032 126,020,286 80,884,490 26,336,353
------------ --------------------- --------------------- ---------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (4,904) (2,325,371) (66,251) (251,538)
From net realized gains
on investments....... -- (34,228,739) -- --
Excess distributions of
net realized gains... -- -- -- --
------------ --------------------- --------------------- ---------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (4,904) (36,554,110) (66,251) (251,538)
------------ --------------------- --------------------- ---------------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 16,576,296 21,539,491 27,477,854 16,306,399
Proceeds from shares
issued as a result of
reinvested
dividends............ 4,904 36,554,110 66,251 251,538
Less cost of
repurchase........... (313,598) (92,360,796) (62,424,600) (15,238,234)
------------ --------------------- --------------------- ---------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 16,267,602 (34,267,195) (34,880,495) 1,319,703
------------ --------------------- --------------------- ---------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 19,120,730 55,198,981 45,937,744 27,404,518
NET ASSETS:
Beginning of year...... -- 707,154,786 661,217,042 122,455,160
------------ --------------------- --------------------- ---------------------
END OF YEAR (NOTE 4)..... $ 19,120,730 $ 762,353,767 $ 707,154,786 $ 149,859,678
------------ --------------------- --------------------- ---------------------
<CAPTION>
- -------------------------
1997
---------------------
<S> <C>
OPERATIONS:
Net investment
income............... $ 251,481
Net realized gain
(loss) on investments
and foreign currency
transactions......... (9,457,837)
Net change in
unrealized
appreciation
(depreciation) on
investments and
foreign currency..... 12,954,426
---------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. 3,748,070
---------------------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income............... (1,710)
From net realized gains
on investments....... --
Excess distributions of
net realized gains... --
---------------------
TOTAL DISTRIBUTIONS TO
SHAREHOLDERS........... (1,710)
---------------------
CAPITAL STOCK SOLD AND
REPURCHASED: (NOTE 5)
Proceeds from sale of
shares............... 29,055,088
Proceeds from shares
issued as a result of
reinvested
dividends............ 1,710
Less cost of
repurchase........... (7,278,761)
---------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
SHARES TRANSACTIONS.... 21,778,037
---------------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS.......... 25,524,397
NET ASSETS:
Beginning of year...... 96,930,763
---------------------
END OF YEAR (NOTE 4)..... $ 122,455,160
---------------------
</TABLE>
90
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The Series 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 Series 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.
91
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 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 or greater than the amount of its purchase commitments. As of
December 31, 1998, U.S. Government Securities Series had entered into
outstanding when-issued or forward commitments of $4,635,375.
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 year ended December 31, 1998,
the cost of purchases and proceeds from sales of securities for Money Market
Series were $340,373,880 and $320,499,432, 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
Series Purchases from Sales
<S> <C> <C>
- --------------------------------------------------------------------------------
U.S. Government Securities Series............ 210,897,486 200,852,664
Diversified Income Series.................... 137,388,535 125,363,146
Global Bond Series........................... 39,004,233 38,193,280
High Yield Series............................ 93,388,587 75,808,552
Global Asset Allocation Series............... 46,722,187 39,015,850
Asset Allocation Series...................... 597,171,259 567,860,200
Value Series................................. 261,824,712 229,619,144
Growth & Income Series....................... 123,198,990 77,877,209
S & P 500 Index Series....................... 105,925,142 4,666,024
Blue Chip Stock Series....................... 113,366,211 41,098,355
International Stock Series................... 49,280,242 39,059,399
Mid Cap Stock Series......................... 16,790,641 4,703,092
Small Cap Value Series....................... 20,157,313 4,857,905
Global Growth Series......................... 109,690,983 127,786,868
Large Cap Growth Series...................... 18,718,033 3,283,812
Growth Stock Series.......................... 664,828,251 676,514,636
Aggressive Growth Series..................... 157,996,927 151,889,359
</TABLE>
In the Global Asset Allocation Series for the December 31, 1998, brokerage
commissions paid to an affiliated broker amounted to $3,154.
LENDING OF PORTFOLIO SECURITIES: At December 31, 1998, securities valued at
$14,313,303, $57,653,065, $51,347,697, $40,831,636, $78,016,507, and
$33,328,470, were on loan to brokers from Value Series, Growth & Income
Series, S&P 500 Index Series, Blue Chip Stock Series, Global Growth Series
and Aggressive Growth Series, respectively. For collateral, the portfolio's
custodian received $14,648,734, $59,128,950, $52,594,292, $41,238,289,
$78,161,714, and $33,678,050, in cash which is maintained in a separate
account and invested in short-term investment vehicles. Fee income from
securities lending amounted to $3,539, $42,307, $9,307, $8,392, $122,532 and
$73,564, for the December 31, 1998, for Value Series, Growth & Income Series,
S&P 500 Index Series, Blue Chip Stock Series, Global Growth Series and
Aggressive Growth Series. The risks to the portfolio in security lending
transactions are that the
92
<PAGE>
- --------------------------------------------------------------------------------
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 and capital
gains are distributed.
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.
On the Statements of Assets and Liabilities, due to permanent book-to-tax
differences, accumulated net realized gain (loss) and undistributed net
investment income have been increased (decreased), resulting in a net
reclassification adjustment to increase (decrease) paid-in capital by the
following:
<TABLE>
<CAPTION>
Accumulated Undistributed
Net Realized Net Investment
Gain (Loss) Income Paid-in-Capital
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Money Market Series.......................... $ 15,866 (7) $ (15,859)
Global Bond Series........................... $ 475,036 $ (473,350) $ (1,686)
High Yield Series............................ $ 134 $ (134) --
Global Asset Allocation Series............... $ 23,669 $ (23,669) --
Asset Allocation Series...................... $(1,000,000) -- $ 1,000,000
S & P 500 Index Series....................... $ -- $ 1,001 $ (1,001)
Blue Chip Stock Series....................... $ 353 $ (238) $ (115)
International Stock Series................... $ 133,442 $ (133,442) --
Mid Cap Stock Series......................... -- $ 623 $ (623)
Global Growth Series......................... $ 11,067 $ (11,067) --
</TABLE>
For federal income tax purposes the portfolios had the following capital loss
carryovers at, December 31, 1998, which, if not offset by subsequent capital
gains, will expire in 1999 through 2006. 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.......................... $ 65,473
U.S. Government Securities Series............ 17,090,438
Diversified Income Series.................... 8,540,124
High Yield Series............................ 1,580,586
International Stock Series................... 769,390
Mid Cap Stock Series......................... 340,752
Large Cap Growth Series...................... 327,690
</TABLE>
ILLIQUID SECURITIES: At December 31, 1998, investments in securities for the
funds included issues that are illiquid. Money Market Series, U.S. Government
Securities 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 December 31,
1998, were $2,611,644 Diversified Income Series; $718,796 Global Bond Series;
$7,842,575 High Yield Series; $352,759 Global Asset Allocation Series;
$6,933,348 Asset Allocation Series; $7,282,625 Growth & Income Series;
$1,865,355 Blue Chip Stock Series; $220,304 International Stock Series;
$249,375 Small Cap Value Series and $13,136,181 Global Growth Series, which
represents 2.27%, 2.91%, 11.05%, .51%, 1.17%, 2.33%, 1.02%, .21%, 1.51% and
3.74% of net assets, respectively. Pursuant to guidelines adopted by the
Board of Directors, certain unregistered securities are determined to be
liquid and are not included within the percent limitations specified above.
INCOME AND CAPITAL GAINS DISTRIBUTIONS: The portfolios intend to make income
and capital gains distributions, if any, on an annual basis. All
distributions will be reinvested in additional shares of the portfolio at net
asset value.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increase and decrease
in net assets from operations during the reporting period. Actual results
could differ from those estimates.
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 portfolios 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 portfolios 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 December 31, 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
93
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 Series Asset Allocation Series, S&P 500 Index
Series, Blue Chip Stock Series, International Stock Series, Mid Cap Stock
Series, Small Cap Value Series and Large Cap Growth Series have retained
sub-advisers under investment sub-advisory agreements to provide investment
advice and, in general, to conduct the management investment program of each
portfolio, subject to the general control of Advisers and the Board of
Directors of the Fortis Series Fund, Inc. Pursuant to the sub-advisory
agreements, each sub-adviser will regularly provide its respective portfolio
with investment research, advice and supervision and furnish continuously an
investment program for each portfolio consistent with its investment
objectives and policies, including the purchase, retention and disposition of
securities.
From its advisory fee, Advisers pays the following fees to each of the
sub-advisers:
<TABLE>
<CAPTION>
Series Sub-Adviser
<S> <C> <C>
- ------------------------------------------------------------------------------------------
Global Bond Series Mercury Asset Management
International Ltd.
Global Asset Allocation Series Morgan Stanley Asset
Management Limited
S & P 500 Index Series The Dreyfus
Corporation
Blue Chip Stock Series T. Rowe Price
Associate, Inc.
International Stock Series Lazard-Freres Asset
Management
Mid Cap Stock Series The Dreyfus Corporation
Small Cap Value Series Berger Associates
Large Cap Growth Series Alliance Capital Management L.P.
<CAPTION>
Annual
<S> <C> <C>
- ---------------------------------------------
Global Bond Series For the first .35%
$100 million
For assets over .225%
$100 million
Global Asset Allocation Series For the first .50%
$100 million
For assets over .40%
$100 million
S & P 500 Index Series For all levels .17%
of assets
Blue Chip Stock Series For the first .50%
$100 million
For assets over .45%
$100 million
International Stock Series For the first $100 million .45%
For assets over $100 million .375%
Mid Cap Stock Series For the first .50%
$100 million
For the next .45%
$150 million
For assets over .40%
$250 million
Small Cap Value Series For the first .50%
$50 million
For assets over .45%
$50 million
Large Cap Growth Series For the first .50%
$100 million
For the next .45%
$100 million
For assets over .40%
$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
94
<PAGE>
- --------------------------------------------------------------------------------
and non-recurring extraordinary charges and expenses) commencing May 1, 1998
to 1.25% of average net assets. For the year ended December 31, 1998,
Advisers reimbursed the funds $10,396, $0 and $1,399, respectively.
For the year ended December 31, 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.......................... $ 1,400
U.S. Government Securities Series............ 2,800
Diversified Income Series.................... 3,000
Global Bond Series........................... 800
High Yield Series............................ 2,000
Global Asset Allocation Series............... 1,900
Asset Allocation Series...................... 17,500
Value Series................................. 2,200
Growth & Income Series....................... 8,200
<CAPTION>
Series Amount
<S> <C>
- ---------------------------------------------------------
S & P 500 Index Series....................... $ 4,500
Blue Chip Stock Series....................... 3,300
International Stock Series................... 2,700
Mid Cap Stock Series......................... 8,841
Small Cap Value Series....................... 8,875
Global Growth Series......................... 11,800
Large Cap Growth Series...................... 8,869
Growth Stock Series.......................... 20,600
Aggressive Growth Series..................... 3,900
</TABLE>
3. FORWARD FOREIGN CURRENCY CONTRACTS: At December 31, 1998, the Global Bond
Series, Global Asset Allocation Series and Global Growth 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) on these contracts is included in the
accompanying financial statements. The terms of the open contracts are as
follows:
<TABLE>
<CAPTION>
GLOBAL BOND SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Dec. 31, Currency To Dec. 31, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Jan. 14, 1999 1,501,500 $1,501,500 910,000 $1,513,187 $ 11,687
U.S. Dollar British Pound Sterling
Jan. 14, 1999 470,000 306,048 306,189 306,189 141
Canadian Dollar U.S. Dollar
Jan. 14, 1999 221,003 221,003 1,430,000 224,821 3,818
U.S. Dollar Danish Krone
Jan. 14, 1999 2,070,000 1,256,396 1,223,766 1,223,766 (32,630)
Deutsche Mark U.S. Dollar
Jan. 14, 1999 4,157,044 4,157,044 503,667,500 4,474,787 317,743
U.S. Dollar Japanese Yen
Jan. 14, 1999 20,050,800 178,139 165,000 165,000 (13,139)
Japanese Yen U.S. Dollar
----------- ----------- ---------------
$7,620,130 $7,907,750 $287,620
----------- ----------- ---------------
</TABLE>
<TABLE>
<CAPTION>
GLOBAL ASSET ALLOCATION SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Dec. 31, Currency To Dec. 31, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Jan. 13, 1999 960,000 $ 625,111 618,936 $ 618,936 $ (6,175)
Canadian Dollar U.S. Dollar
Jan. 14, 1999 215,000 357,511 355,502 355,502 (2,009)
British Pound Sterling U.S. Dollar
Jan. 19, 1999 1,335,549 1,335,549 2,250,000 1,352,392 16,843
U.S. Dollar Deutsche Mark
Mar. 2, 1999 450,000 237,758 239,220 239,220 1,462
New Zealand Dollar U.S. Dollar
Mar. 2, 1999 460,000 243,042 240,672 240,672 (2,370)
New Zealand Dollar U.S. Dollar
----------- ----------- ---------------
$2,798,971 $2,806,722 $ 7,751
----------- ----------- ---------------
</TABLE>
95
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL GROWTH SERIES
- -------------------------------------------------------------------------------------------------------------
U.S. Dollar U.S. Dollar
Value As Of Value As Of Unrealized
Currency To Dec. 31, Currency To Dec. 31, Appreciation/
Settle Date Be Delivered 1998 Be Received 1998 (Depreciation)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
January 4, 2,627,230 $ 224,197 222,533 $ 222,533 $ (1,664)
1999 Austrian Schilling U.S. Dollar
January 5, 4,526,532 386,276 382,664 382,664 (3,612)
1999 Austrian Schilling U.S. Dollar
----------- ----------- ---------------
$ 610,473 $ 605,197 $ (5,276)
----------- ----------- ---------------
</TABLE>
4. NET ASSETS INCLUDE UNDISTRIBUTED (EXCESS OF DISTRIBUTIONS OVER) NET
INVESTMENT INCOME OF:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
- -----------------------------------------------------------------------------
Money Market Series.......................... $ 3,352,487 $ 3,313,609
U.S. Government Securities Series............ 7,968,815 8,884,763
Diversified Income Series.................... 7,229,293 7,342,378
Global Bond Series........................... (146,800) (201,281)
High Yield Series............................ 6,362,602 (5,343,079)
Global Asset Allocation Series............... (3,440) 115,734
Asset Allocation Series...................... 13,723,599 180,729
Value Series................................. 9,431 --
Growth & Income Series....................... 7,013,204 --
S & P 500 Index Series....................... 20,905 4,654
<CAPTION>
1998 1997
<S> <C> <C>
- -----------------------------------------------------------------------------
Blue Chip Stock Series....................... $ 9,441 $ 24,616
International Stock Series................... 96,265 837,589
Mid Cap Stock Series......................... -- --
Small Cap Value Series....................... 1,290 --
Global Growth Series......................... 416,661 390,257
Large Cap Growth Series...................... 1,268 --
Growth Stock Series.......................... 1,520,916 2,324,342
Aggressive Growth Series..................... 74,969 251,124
</TABLE>
5. SHARES OF CAPITAL STOCK SOLD AND REPURCHASED:
<TABLE>
<CAPTION>
SHARES ISSUED
AS A RESULT OF
SHARES SOLD REINVESTED DIVIDENDS
--------------------------- ---------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------
Money Market Series.......................... 6,203,394 5,533,479 304,288 249,293
U.S. Government Securities Series............ 3,084,204 800,925 829,215 1,020,261
Diversified Income Series.................... 1,179,783 427,986 625,983 644,619
Global Bond Series........................... 582,919 342,502 93,157 82,806
High Yield Series............................ 1,889,093 1,683,695 601,517 7,380
Global Asset Allocation Series............... 860,431 916,423 339,980 203,873
Asset Allocation Series...................... 2,347,101 1,768,619 57,611 3,773,001
Value Series................................. 2,434,382 2,752,180 140,390 235,641
Growth & Income Series....................... 2,447,766 4,127,164 4,707 406,642
S & P 500 Index Series....................... 7,384,185 6,825,585 202,574 112,916
Blue Chip Stock Series....................... 4,546,998 3,878,517 166,373 22,898
International Stock Series................... 1,774,205 1,745,215 491,607 241,819
Mid Cap Stock Series......................... 1,377,131 -- 2,414 --
Small Cap Value Series....................... 1,822,903 -- 24,650 --
Global Growth Series......................... 640,974 1,712,007 19,957 --
Large Cap Growth Series...................... 1,618,613 -- 413 --
Growth Stock Series.......................... 576,663 793,904 1,100,557 1,742
Aggressive Growth Series..................... 1,147,537 2,311,002 20,203 125
<CAPTION>
NET INCREASE (DECREASE) OF
SHARES REPURCHASED SHARES
------------------------------- -----------------------------
1998 1997 1998 1997
<S> <C> <C> <C> <C>
- ---------------------------------------------
Money Market Series.......................... (4,707,744) (6,270,961) 1,799,938 (488,189)
U.S. Government Securities Series............ (3,244,692) (3,815,885) 668,727 (1,994,699)
Diversified Income Series.................... (917,054) (1,340,634) 888,712 (268,029)
Global Bond Series........................... (486,376) (302,578) 189,700 122,730
High Yield Series............................ (824,528) (524,733) 1,666,082 1,166,342
Global Asset Allocation Series............... (326,285) (192,721) 874,126 927,575
Asset Allocation Series...................... (1,622,808) (1,572,987) 781,904 3,968,633
Value Series................................. (583,157) (111,372) 1,991,615 2,876,449
Growth & Income Series....................... (771,120) (371,603) 1,681,353 4,162,203
S & P 500 Index Series....................... (1,501,912) (1,516,202) 6,084,847 5,422,299
Blue Chip Stock Series....................... (202,065) (74,415) 4,511,306 3,827,000
International Stock Series................... (1,073,722) (269,473) 1,192,090 1,717,561
Mid Cap Stock Series......................... (31,004) -- 1,348,541 --
Small Cap Value Series....................... (69,121) -- 1,778,432 --
Global Growth Series......................... (2,496,326) (1,139,381) (1,835,395) 572,626
Large Cap Growth Series...................... (31,517) -- 1,587,509 --
Growth Stock Series.......................... (2,423,501) (1,781,802) (746,281) (986,156)
Aggressive Growth Series..................... (1,059,209) (563,264) 108,531 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.
96
<PAGE>
- --------------------------------------------------------------------------------
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
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 11.03 $ 10.94 $ 10.83 $ 10.63 $ 10.23
-------- -------- -------- -------- --------
Operations:
Investment income - net............... .57 .58 .57 .60 .41
Net realized and unrealized gain
(loss) on investments............... -- -- -- -- (.01)
-------- -------- -------- -------- --------
Total from operations................... .57 .58 .57 .60 .40
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.54) (.49) (.46) (.40) --
-------- -------- -------- -------- --------
Net asset value, end of year............ $ 11.06 $ 11.03 $ 10.94 $ 10.83 $ 10.63
-------- -------- -------- -------- --------
Total return @.......................... 5.32% 5.34% 5.17% 5.71% 3.92%
Net assets end of year (000s omitted)... $ 77,097 $ 57,009 $ 61,906 $ 41,807 $ 44,833
Ratio of expenses to average daily net
assets................................ .35% .38% .38% .40% .40%
Ratio of net investment income to
average daily net assets.............. 5.18% 5.19% 5.14% 5.44% 3.96%
</TABLE>
@ These are the portfolio's 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
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 10.68 $ 10.57 $ 11.16 $ 9.40 $ 10.94
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .60 .80 .67 .70 .71
Net realized and unrealized gain
(loss) on investments............... .34 .12 (.51) 1.06 (1.54)
--------- --------- --------- --------- ---------
Total from operations................... .94 .92 .16 1.76 (.83)
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.69) (.81) (.75) -- (.71)
--------- --------- --------- --------- ---------
Net asset value, end of year............ $ 10.93 $ 10.68 $ 10.57 $ 11.16 $ 9.40
--------- --------- --------- --------- ---------
Total return @.......................... 8.87% 9.08% 2.21% 18.78% (6.44%)
Net assets end of year (000s omitted)... $ 152,672 $ 142,070 $ 161,678 $ 182,687 $ 172,656
Ratio of expenses to average daily net
assets................................ .51% .54% .53% .53% .53%
Ratio of net investment income to
average daily net assets.............. 5.53% 6.03% 6.17% 6.78% 6.87%
Portfolio turnover rate................. 114% 148% 176% 115% 187%
</TABLE>
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
97
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------
DIVERSIFIED INCOME SERIES 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 11.98 $ 11.70 $ 12.20 $ 10.40 $ 11.93
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .73 .91 .82 .88 .87
Net realized and unrealized gain
(loss) on investments............... .01 .26 (.40) .92 (1.53)
--------- --------- --------- --------- ---------
Total from operations................... .74 1.17 .42 1.80 (.66)
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.81) (.89) (.91) -- (.87)
Excess distributions of net realized
gains............................... -- -- (.01) -- --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (.81) (.89) (.92) -- (.87)
--------- --------- --------- --------- ---------
Net asset value, end of year............ $ 11.91 $ 11.98 $ 11.70 $ 12.20 $ 10.40
--------- --------- --------- --------- ---------
Total return @.......................... 6.31% 10.44% 4.15% 17.26% (5.22%)
Net assets end of year (000s omitted)... $ 115,182 $ 105,200 $ 105,831 $ 109,120 $ 98,314
Ratio of expenses to average daily net
assets................................ .52% .55% .55% .55% .55%
Ratio of net investment income to
average daily net assets.............. 6.56% 7.11% 6.86% 7.78% 7.59%
Portfolio turnover rate................. 96% 166% 171% 139% 142%
</TABLE>
@ These are the portfolio's 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 year...... $ 10.65 $ 11.11 $ 11.30 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .30 .46 .57 .54
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions............... 1.13 (.45) (.13) 1.52
-------- -------- -------- --------
Total from operations................... 1.43 .01 .44 2.06
-------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.19) (.37) (.43) (.54)
From net realized gains............... (.33) (.10) (.20) (.22)
-------- -------- -------- --------
Total distributions to shareholders..... (.52) (.47) (.63) (.76)
-------- -------- -------- --------
Net asset value, end of year............ $ 11.56 $ 10.65 $ 11.11 $ 11.30
-------- -------- -------- --------
Total return @.......................... 13.49% .14% 3.32% 19.14%
Net assets end of year (000s omitted)... $ 24,659 $ 20,692 $ 20,228 $ 13,187
Ratio of expenses to average daily net
assets................................ .88% 1.10% 1.02% 1.28%*
Ratio of net investment income to
average daily net assets.............. 4.19% 4.41% 5.07% 5.01%*
Portfolio turnover rate................. 190% 168% 129% 184%
</TABLE>
* Annualized.
+ For the period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
98
<PAGE>
- --------------------------------------------------------------------------------
<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 year...... $ 10.77 $ 9.83 $ 9.74 $ 9.47 $ 10.00
-------- -------- -------- -------- --------
Operations:
Investment income - net............... .75 .96 1.04 1.15 .71
Net realized and unrealized gain
(loss) on investments............... (.71) -- .13 .30 (.53)
-------- -------- -------- -------- --------
Total from operations................... .04 .96 1.17 1.45 .18
-------- -------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.83) (.02) (1.03) (1.14) (.71)
From net realized gains............... (.07) -- -- -- --
Excess distributions of net realized
gains............................... -- -- (.05) (.04) --
-------- -------- -------- -------- --------
Total distributions to shareholders..... (.90) (.02) (1.08) (1.18) (.71)
-------- -------- -------- -------- --------
Net asset value, end of year............ $ 9.91 $ 10.77 $ 9.83 $ 9.74 $ 9.47
-------- -------- -------- -------- --------
Total return @.......................... .62% 9.76% 10.52% 12.73% (.75%)
Net assets end of year (000s omitted)... $ 70,983 $ 59,228 $ 42,578 $ 28,129 $ 13,706
Ratio of expenses to average daily net
assets................................ .56% .62% .63% .63% .75%*
Ratio of net investment income to
average daily net assets.............. 9.39% 10.31% 10.22% 11.30% 10.44%*
Portfolio turnover rate................. 120% 353% 235% 130% 20%
</TABLE>
* Annualized.
+ For the Period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
@ These are the portfolio's 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 year...... $ 13.29 $ 12.34 $ 11.42 $ 10.00
-------- -------- -------- --------
Operations:
Investment income - net............... .28 .28 .36 .35
Net realized and unrealized gain on
investments and foreign currency
transactions........................ 1.81 1.39 1.19 1.55
-------- -------- -------- --------
Total from operations................... 2.09 1.67 1.55 1.90
-------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.31) (.26) (.38) (.34)
From net realized gains............... (.75) (.46) (.25) (.14)
-------- -------- -------- --------
Total distributions to shareholders..... (1.06) (.72) (.63) (.48)
-------- -------- -------- --------
Net asset value, end of year............ $ 14.32 $ 13.29 $ 12.34 $ 11.42
-------- -------- -------- --------
Total return @.......................... 17.27% 13.51% 12.72% 17.47%
Net assets end of year (000s omitted)... $ 69,086 $ 52,482 $ 37,307 $ 20,080
Ratio of expenses to average daily net
assets................................ 1.01% 1.16% 1.20% 1.28%*
Ratio of net investment income to
average daily net assets.............. 2.13% 2.42% 3.01% 3.26%*
Portfolio turnover rate................. 69% 51% 46% 44%
</TABLE>
* Annualized.
+ For the period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
99
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------
ASSET ALLOCATION SERIES 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 17.62 $ 16.99 $ 15.90 $ 13.56 $ 14.14
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .49 .59 .61 .65 .56
Net realized and unrealized gain
(loss) on investments............... 3.02 2.82 1.38 2.35 (.58)
--------- --------- --------- --------- ---------
Total from operations................... 3.51 3.41 1.99 3.00 (.02)
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.01) (.59) (.61) (.64) (.56)
From net realized gains............... (.03) (2.19) (.28) (.02) --
Excess distributions of net realized
gains............................... -- -- (.01) -- --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (.04) (2.78) (.90) (.66) (.56)
--------- --------- --------- --------- ---------
Net asset value, end of year............ $ 21.09 $ 17.62 $ 16.99 $ 15.90 $ 13.56
--------- --------- --------- --------- ---------
Total return @.......................... 19.97% 20.24% 12.50% 21.97% (.31%)
Net assets end of year (000s omitted)... $ 593,878 $ 482,280 $ 397,712 $ 341,511 $ 260,593
Ratio of expenses to average daily net
assets................................ .51% .53% .54% .55% .56%
Ratio of net investment income to
average daily net assets.............. 2.64% 3.16% 3.66% 4.25% 4.05%
Portfolio turnover rate................. 114% 113% 115% 98% 73%
</TABLE>
@ These are the portfolio's total returns durning the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------
VALUE SERIES 1998 1997 1996+
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Net asset value, beginning of year...... $ 13.42 $ 11.38 $ 10.27
-------- -------- --------
Operations:
Investment income - net............... .16 .12 .14
Net realized and unrealized gain on
investments......................... 1.13 2.75 1.10
-------- -------- --------
Total from operations................... 1.29 2.87 1.24
-------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.16) (.13) (.13)
From net realized gains............... (.17) (.70) --
-------- -------- --------
Total distributions to shareholders..... (.33) (.83) (.13)
-------- -------- --------
Net asset value, end of year............ $ 14.38 $ 13.42 $ 11.38
-------- -------- --------
Total return @.......................... 9.64% 25.24% 11.49%
Net assets end of year (000s omitted)... $ 87,604 $ 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.............. 1.26% 1.41% 1.72%*
Portfolio turnover rate................. 332% 121% 36%
</TABLE>
* Annualized
+ For the period May 1, 1996 (commencement of operations) to December
31, 1996. The portfolio's inception was March 28, 1996, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 1,
1996. Information is not presented for the period from March 28, 1996,
through May 1, 1996, as the portfolio's shares were not registered
during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
100
<PAGE>
- --------------------------------------------------------------------------------
<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 year...... $ 18.76 $ 15.16 $ 12.83 $ 10.07 $ 10.00
--------- --------- --------- -------- --------
Operations:
Investment income - net............... .48 .40 .34 .33 .21
Net realized and unrealized gain on
investments......................... 2.00 3.80 2.54 2.76 .07
--------- --------- --------- -------- --------
Total from operations................... 2.48 4.20 2.88 3.09 .28
--------- --------- --------- -------- --------
Distributions to shareholders:
From investment income - net.......... -- (.39) (.34) (.33) (.21)
From net realized gains............... (.01) (.21) (.21) -- --
--------- --------- --------- -------- --------
Total distributions to shareholders..... (.01) (.60) (.55) (.33) (.21)
--------- --------- --------- -------- --------
Net asset value, end of year............ $ 21.23 $ 18.76 $ 15.16 $ 12.83 $ 10.07
--------- --------- --------- -------- --------
Total return @.......................... 13.21% 27.69% 21.51% 29.70% 1.74%
Net assets end of year (000s omitted)... $ 312,939 $ 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.............. 2.45% 2.63% 2.38% 2.86% 3.12%*
Portfolio turnover rate................. 30% 11% 20% 17% 2%
</TABLE>
* Annualized.
+ For the period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------
S&P 500 INDEX SERIES 1998 1997 1996+
<S> <C> <C> <C>
- -----------------------------------------------------------------------------
Net asset value, beginning of year...... $ 14.93 $ 11.47 $ 10.09
--------- --------- --------
Operations:
Investment income - net............... .16 .12 .10
Net realized and unrealized gain on
investments......................... 4.03 3.58 1.37
--------- --------- --------
Total from operations................... 4.19 3.70 1.47
--------- --------- --------
Distributions to shareholders:
From investment income - net.......... (.16) (.12) (.09)
From net realized gains............... (.13) (.12) --
--------- --------- --------
Total distributions to shareholders..... (.29) (.24) (.09)
--------- --------- --------
Net asset value, end of year............ $ 18.83 $ 14.93 $ 11.47
--------- --------- --------
Total return @.......................... 28.11% 32.32% 14.29%
Net assets end of year (000s omitted)... $ 252,832 $ 109,572 $ 21,979
Ratio of expenses to average daily net
assets................................ .46% .51% .79%*
Ratio of net investment income to
average daily net assets.............. 1.17% 1.41% 1.47%*
Portfolio turnover rate................. 3% 5% 6%
</TABLE>
* Annualized.
+ 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 that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
101
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<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 year...... $ 14.76 $ 11.67 $ 10.07
--------- -------- --------
Operations:
Investment income - net............... .05 .07 .07
Net realized and unrealized gain on
investments and foreign currency
transactions........................ 4.09 3.08 1.60
--------- -------- --------
Total from operations................... 4.14 3.15 1.67
--------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.06) (.06) (.07)
From net realized gains............... (.26) -- --
--------- -------- --------
Total distributions to shareholders..... (.32) (.06) (.07)
--------- -------- --------
Net asset value, end of year............ $ 18.58 $ 14.76 $ 11.67
--------- -------- --------
Total return @.......................... 28.07% 27.00% 16.24%
Net assets end of year (000s omitted)... $ 182,921 $ 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.............. .41% .75% .82%*
Portfolio turnover rate................. 34% 24% 17%
</TABLE>
* Annualized.
+ 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 that period.
@ These are the Portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
INTERNATIONAL STOCK SERIES 1998 1997 1996 1995+
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 13.36 $ 12.44 $ 11.27 $ 10.00
--------- -------- -------- --------
Operations:
Investment income - net............... .15 .13 .20 .14
Net realized and unrealized gain on
investments and foreign currency
transactions........................ 2.03 1.35 1.48 1.38
--------- -------- -------- --------
Total from operations................... 2.18 1.48 1.68 1.52
--------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.26) (.15) (.21) (.09)
From net realized gains............... (.80) (.41) (.30) (.16)
--------- -------- -------- --------
Total distributions to shareholders..... (1.06) (.56) (.51) (.25)
--------- -------- -------- --------
Net asset value, end of year............ $ 14.48 $ 13.36 $ 12.44 $ 11.27
--------- -------- -------- --------
Total return @.......................... 16.47% 11.99% 14.02% 14.35%
Net assets end of year (000s omitted)... $ 103,056 $ 79,142 $ 52,331 $ 21,327
Ratio of expenses to average daily net
assets................................ .94% 1.08% 1.15% 1.14%*
Ratio of net investment income to
average daily net assets.............. 1.20% 1.10% 1.71% 1.41%*
Portfolio turnover rate................. 44% 30% 27% 39%
</TABLE>
* Annualized.
+ For the period January 3, 1995 (commencement of operations) to
December 31, 1995. The portfolio's inception was December 14, 1994,
when it was initially capitalized. However, the portfolio's shares did
not become effectively registered under the Securities Act of 1933
until January 3, 1995. Information is not presented for the period
from December 14, 1994, through January 3, 1995, as the portfolio's
shares were not registered during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
102
<PAGE>
- --------------------------------------------------------------------------------
7. FINANCIAL HIGHLIGHTS (continued):
<TABLE>
<CAPTION>
MID CAP STOCK SERIES 1998+
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 9.94
--------
Operations:
Investment income - net............... .02
Net realized and unrealized gain
(loss) on investments............... (.30)
--------
Total from operations................... (.28)
--------
Distributions to shareholders:
From investment income - net.......... (.02)
--------
Net asset value, end of period.......... $ 9.64
--------
Total return @.......................... (2.89%)
Net assets end of period (000s
omitted).............................. $ 12,995
Ratio of expenses to average daily net
assets (a)............................ 1.25%*
Ratio of net investment income to
average daily net assets (a).......... .19%*
Portfolio turnover rate................. 66%
</TABLE>
* Annualized.
+ For the period May 1, 1998 (commencement of operations) to December
31, 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 from March 25,
1998, through May 1, 1998, as the portfolio's shares were not
registered during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
(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
1.40% and .04%, respectively.
<TABLE>
<CAPTION>
SMALL CAP VALUE SERIES 1998+
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 9.96
--------
Operations:
Investment income - net............... .07
Net realized and unrealized gain
(loss) on investments............... (.62)
--------
Total from operations................... (.55)
--------
Distributions to shareholders:
From investment income - net.......... (.07)
From net realized gains............... (.06)
--------
Total distributions to shareholders..... (.13)
--------
Net asset value, end of period.......... $ 9.28
--------
Total return @.......................... (5.48%)
Net assets end of period (000s
omitted).............................. $ 16,503
Ratio of expenses to average daily net
assets................................ 1.24%*
Ratio of net investment income to
average daily net assets.............. 1.56%*
Portfolio turnover rate................. 57%
</TABLE>
* Annualized.
+ For the period May 1, 1998 (commencement of operations) to December
31, 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 portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
103
<PAGE>
FORTIS SERIES FUND, INC.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------
GLOBAL GROWTH SERIES 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 20.29 $ 19.00 $ 15.97 $ 12.31 $ 12.77
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .03 .02 .03 .09 .10
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions............... 2.27 1.27 3.03 3.66 (.46)
--------- --------- --------- --------- ---------
Total from operations................... 2.30 1.29 3.06 3.75 (.36)
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.02) -- (.03) (.09) (.10)
--------- --------- --------- --------- ---------
Net asset value, end of year............ $ 22.57 $ 20.29 $ 19.00 $ 15.97 $ 12.31
--------- --------- --------- --------- ---------
Total return @.......................... 11.36% 6.82% 19.10% 30.49% (2.98%)
Net assets end of year (000s omitted)... $ 351,476 $ 353,255 $ 319,831 $ 207,913 $ 144,647
Ratio of expenses to average daily net
assets................................ .75% .79% .79% .80% .81%
Ratio of net investment income to
average daily net assets.............. .12% .12% .15% .64% .82%
Portfolio turnover rate................. 32% 35% 14% 29% 20%
</TABLE>
@ These are the Portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<TABLE>
<CAPTION>
LARGE CAP GROWTH SERIES 1998+
<S> <C>
- ---------------------------------------------------
Net asset value, beginning of period.... $ 10.16
--------
Operations:
Investment income - net............... --
Net realized and unrealized gain
(loss) on investments............... 1.88
--------
Total from operations................... 1.88
--------
Net asset value, end of period.......... $ 12.04
--------
Total return @.......................... 18.61%
Net assets end of period (000s
omitted).............................. $ 19,121
Ratio of expenses to average daily net
assets (a)............................ 1.25%*
Ratio of net investment income to
average daily net assets (a).......... .03%*
Portfolio turnover rate................. 36%
</TABLE>
* Annualized.
+ For the period May 1, 1998 (commencement of operations) to December
31, 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 portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
(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 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
1.27% and .01%, respectively.
104
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
7. FINANCIAL HIGHLIGHTS (continued):
Year Ended December 31,
-------------------------------------------------------------
GROWTH STOCK SERIES 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------
Net asset value, beginning of year...... $ 36.64 $ 32.59 $ 28.09 $ 22.11 $ 22.92
--------- --------- --------- --------- ---------
Operations:
Investment income - net............... .09 .12 .12 .13 .18
Net realized and unrealized gain
(loss) on investments............... 6.40 3.93 4.50 5.98 (.81)
--------- --------- --------- --------- ---------
Total from operations................... 6.49 4.05 4.62 6.11 (.63)
--------- --------- --------- --------- ---------
Distributions to shareholders:
From investment income - net.......... (.13) -- (.12) (.13) (.18)
From net realized gains on
investments......................... (1.91) -- -- -- --
--------- --------- --------- --------- ---------
Total distributions to shareholders..... (2.04) -- (.12) (.13) (.18)
--------- --------- --------- --------- ---------
Net asset value, end of year............ $ 41.09 $ 36.64 $ 32.59 $ 28.09 $ 22.11
--------- --------- --------- --------- ---------
Total return @.......................... 19.01% 12.42% 16.41% 27.66% (2.82%)
Net assets end of year (000s omitted)... $ 762,354 $ 707,155 $ 661,217 $ 530,945 $ 377,483
Ratio of expenses to average daily net
assets................................ .65% .66% .67% .67% .68%
Ratio of net investment income to
average daily net assets.............. .21% .33% .39% .51% .81%
Portfolio turnover rate................. 106% 19% 30% 20% 19%
</TABLE>
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
<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 year...... $ 13.81 $ 13.62 $ 12.68 $ 9.80 $ 10.03
--------- --------- -------- -------- --------
Operations:
Investment income - net............... .01 .03 .03 .07 .08
Net realized and unrealized gain
(loss) on investments............... 2.91 .16 .94 2.88 (.23)
--------- --------- -------- -------- --------
Total from operations................... 2.92 .19 .97 2.95 (.15)
--------- --------- -------- -------- --------
Distributions to shareholders:
From investment income - net.......... (.03) -- (.03) (.07) (.08)
--------- --------- -------- -------- --------
Net asset value, end of year............ $ 16.70 $ 13.81 $ 13.62 $ 12.68 $ 9.80
--------- --------- -------- -------- --------
Total return @.......................... 21.17% 1.43% 7.64% 29.89% (1.89%)
Net assets end of year (000s omitted)... $ 149,860 $ 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.............. .06% .24% .22% .58% 1.24%*
Portfolio turnover rate................. 135% 25% 22% 21% 5%
</TABLE>
* Annualized.
+ For the period May 2, 1994 (commencement of operations) to December
31, 1994. The portfolio's inception was April 26, 1994, when it was
initially capitalized. However, the portfolio's shares did not become
effectively registered under the Securities Act of 1933 until May 2,
1994. Information is not presented for the period from April 26, 1994,
through May 2, 1994, as the portfolio's shares were not registered
during that period.
@ These are the portfolio's total returns during the period, including
reinvestment of all dividend and capital gains distributions.
105
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders
Fortis Series Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments in securities, of Money Market Series, U.S.
Government Securities Series, Diversified Income Series, Global Bond Series,
High Yield Series, 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 (series within Fortis Series Fund, Inc.) as of December
31, 1998 and the related statements of operations, statements of changes in net
assets and the financial highlights for the periods presented. These financial
statements and the financial highlights are the responsibility of fund
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody are confirmed to us by the
custodian. As to securities purchased and sold but not received or delivered,
and securities on loan, we request confirmations from brokers and the custodian,
and where replies are not received, we carry out other appropriate auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
Money Market Series, U.S. Government Securities Series, Diversified Income
Series, Global Bond Series, High Yield Series, 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 as of December 31, 1998 and
the results of their operations, changes in their net assets and the financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Minneapolis, Minnesota
February 12, 1999
106
<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.
PRESIDENT - FORTIS FINANCIAL GROUP,
FORTIS BENEFITS INSURANCE COMPANY AND
SENIOR VICE PRESIDENT, FORTIS
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.
107
<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
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 SECURITIES SUBACCOUNT
Empower Variable DIVERSIFIED INCOME
Annuity 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.
108
<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.
59749 -C-Fortis 2/99
