<PAGE>
[Photograph]
[LOGO]
STEVE M. LARGENT
President
February 8, 1996
Dear First Variable Contract Owners,
In a year that was particularly favorable to both the stock and bond markets,
the Variable Investor Series Trust turned in one of the best performances in the
industry. Four portfolios finished the year in the top decile for all variable
annuity subaccounts and two in the next decile. Seven of the nine portfolios
produced a higher than average return.
In 1995 we added the Small Cap Portfolio subadvised by Pilgrim, Baxter &
Associates and the Growth & Income Portfolio subadvised by Warburg Pincus
Counsellors. These two were very well received by customers, who recognized
that the subadvisors are among the best in the business. Indeed, the Small
Cap Portfolio posted the best return of any variable annuity subaccount for
the three months ended October 31, 1995.
The World Equity Portfolio also stood out in a difficult year for international
markets, turning in a return of 24.32%, among the very best in the class for all
variable annuities. Our subadvisor, Keystone Investment Management, has
consistently produced extraordinarily high rankings.
As a result of both higher sales and the outstanding investment performance, the
total assets in VIST increased more than 32% to $141.1 million. Such rapid
growth will benefit all VIST shareholders by driving down expense ratios, one
of our key objectives.
We are not content to have just one portfolio to talk about. Although it will
be difficult to repeat the great returns of 1995, we are committed to managing
VIST to provide top quartile performance in all asset sectors over the long
term. In 1995 our subadvisors demonstrated that they are up to the challenge!
Very truly yours,
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
COMMON STOCK AND MULTIPLE STRATEGIES [LOGO]
PORTFOLIOS
SUB-ADVISOR: VALUE LINE ASSET MANAGEMENT
Hindered by higher interest rates, higher tax rates, and growing consumer debt
burdens, United States economic growth slowed as 1995 progressed. Throw in bad
weather, a strike at Boeing, and repeated government shut-downs, and it is
likely the economy barely grew at all in the fourth quarter. In response to
this, the Federal Reserve Board lowered short term interest rates by 25 basis
points at its December meeting. Given the current weakness of the economy and
the fact that 1996 is an election year, expectations are for several additional
Federal Reserve monetary easings early in the year. Lower interest rates should
enable the economy to strengthen in time for the election in November, although
growth for the first half of 1996 will likely not exceed 2.0% to 2.5%.
A slow growth environment should be positive for equity investors as an easing
of inflationary concerns should keep long term interest rates low. This should
help to offset the expected weakness in corporate profit growth in 1996. In
addition, a budget agreement compromise between Democrats and Republicans which
still seeks to balance the budget within seven years should also help keep
interest rates down. Although we do not expect to see a repeat of last year's
strong performance, we believe that 1996 will be a constructive year for the
stock market.
COMMON STOCK PORTFOLIO
The investment objective of the Common Stock Portfolio is capital growth which
it seeks to achieve through a policy of investing primarily in a diversified
portfolio of common stocks and securities convertible into or exchangeable for
common stock. The secondary objective is current income when consistent with
the primary objective.
The Common Stock Portfolio had a total return (including dividends and income)
for 1995 of 37.12% as compared to 37.53% for the Standard & Poor's 500 Index.
Stock selection is guided by the Value Line Timeliness Ranking System which
focuses on stocks with superior earnings growth and price momentum. The
Portfolio benefited from a significant overweighting in technology stocks which
helped to drive strong performance in the second and third quarters. During the
fourth quarter we reduced the technology weighting and shifted the focus of this
sector away from semiconductor related stocks and into networking and software
stocks. Healthcare and consumer cyclical stocks were also overweighted, while
utilities, energy, and consumer staples were underweighted. The cash position
at the end of the year was approximately 5%, a level we do not expect to change
significantly in 1996.
For 1996 we are cautiously optimistic on the outlook for the stock market, but
believe that issue selection will be more important than in 1995. We expect to
remain overweighted in technology, although probably not to the level seen last
year. Healthcare and financial sectors will also see heavy weighting, but we
intend to add more diversification by adding positions in energy,
transportation, and utilities.
VALUE LINE ASSET MANAGEMENT
1
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE COMMON STOCK
PORTFOLIO AND THE S&P 500 INDEX*
[GRAPH]
* This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
year years years
---- ----- -----
<S> <C> <C> <C>
Common Stock Portfolio 37.12% 12.99% 11.71%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Common Stock
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
2
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
MULTIPLE STRATEGIES PORTFOLIO
The investment objective of the Multiple Strategies Portfolio is to seek as high
a level of return as is considered consistent with prudent investment risk by
investing in a portfolio of equity securities, bonds, and short term instruments
in varying proportions.
At year end 1995 the Portfolio was 70% invested in common stocks, 18% in bonds
with a mixture of high grade corporates, government, and government agencies,
and about 12% in short term securities. This mixture (higher than a typical 60%
equities/40% bonds balanced portfolio) proved to be beneficial as the equity
market posted strong gains, although the bond market was also very strong. The
Portfolio had a total return of 32.24% last year compared to 37.53% for the S&P
500 Index and an estimated 30.20% for a 60% S&P 500/40% Lehman Brothers
Government/Corporate Bond Index mixture.
The equity holdings in the Portfolio mirror those of the Common Stock Portfolio
and will continue to do so. Selection is guided by the Value Line Timeliness
Ranking System which favorably ranks stocks with earnings and price momentum.
We anticipate maintaining a relatively high equity position in the Portfolio
(65% to 75%) based upon our constructive view of the stock market and the
likelihood of further interest rate cuts by the Federal Reserve Board. We
anticipate a nominal increase in the bond position and a corresponding decrease
in the cash position, as the weak economy and Fed easing should be positive for
bonds.
VALUE LINE ASSET MANAGEMENT
3
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE MULTIPLE STRATEGIES
PORTFOLIO, THE S&P 500 INDEX AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND
INDEX *
[GRAPH]
* These Indices are unmanaged indices in which investors can not invest.
Results for the Indices do not reflect the expenses and investment management
fees incurred by the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
year years Fund***
---- ----- -------
<S> <C> <C> <C>
Multiple Strategies Portfolio 32.24% 12.42% 10.11%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Multiple Strategies
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
*** From commencement of operations (May 5, 1987)
4
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
HIGH INCOME BOND PORTFOLIO [LOGO]
SUB-ADVISOR: FEDERATED INVESTORS
[LOGO]
The High Income Bond Portfolio invests in lower quality corporate bonds with a
goal of obtaining high current income and capital appreciation. Two major
factors impacted the performance of high yield bonds during 1995. First,
interest rates fell substantially, positively impacting all fixed income
securities including high yield bonds. For example, the yield on 10 year
Treasuries increased as investors became more concerned with the credit outlook
for high yield bonds as the economy slowed from its rapid pace of 1994. Default
rates also increased in 1995 impacting investors' perception of the risk
associated with owning high yield bonds. The overall impact of these two
factors resulted in high yield bonds delivering attractive absolute returns
although these returns trailed the returns of like duration high quality bonds.
The High Income Bond Portfolio outperformed both the Lipper High Current Yield
Average and the Lehman Brothers Single B index during 1995. Several factors
were responsible for this performance. First, the Portfolio experienced no
defaults during the year and avoided the majority of near default situations
such as Color Tile which had substantial price declines while not officially
defaulting. Second, the Portfolio has maintained a higher quality portfolio
profile than normal since the fourth quarter of 1994. Higher quality high yield
bonds outperformed during the year as they were impacted less by the spread
widening which impacted the overall market. Third, several industries that the
Portfolio has recently emphasized have performed well including cable TV,
telecommunications and broadcasting. Finally, various Portfolio holdings, such
as Australis Media, Cellular Communications International, People's Choice TV,
IXC Communications, and Affiliated Newspapers performed very well due to issuer
specific fundamentals.
The Portfolio's management expects the economy to be characterized by slow
growth and low inflation over the next few quarters. This should be a rewarding
environment for carefully selected portfolios of high yield bonds. Selectivity
will continue to be important as financial performance across high yield issuers
will vary widely. Given this environment, the High Income Bond Portfolio
continues to emphasize companies with superior operating profiles, companies
with the potential to grow unit volume above the rate of growth of the overall
economy, and companies that have a high level of predictability to their
financial performance. These areas of emphasis have not changed significantly
over the past several quarters. However, given the spread widening that has
occurred, we are attempting to identify selected lower quality issuers that we
believe are attractive on a risk return basis. These lower quality issuers
should be superior performers in a stronger growth environment that we believe
may occur in the second half of 1996.
FEDERATED INVESTORS
5
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE HIGH INCOME BOND
PORTFOLIO AND THE LEHMAN BROTHERS SINGLE "B" INDEX *
[GRAPH]
* This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
year years Fund***
---- ----- -------
<S> <C> <C> <C>
High Income Bond Portfolio 18.98% 13.31% 9.83%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the High Income Bond
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
*** From commencement of operations (June 1, 1987)
6
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
TILT UTILITY PORTFOLIO
SUB-ADVISOR: STATE STREET GLOBAL ADVISORS [LOGO]
[LOGO]
The investment objective of the Tilt Utility Portfolio is capital appreciation
and current income. The Portfolio will seek to achieve its investment objective
by investing in a diversified portfolio of common stock and income securities
issued by companies engaged in the utilities industry.
The strategy employed by State Street Global Advisors evaluates a broad universe
of over 200 utility stocks based upon two independent criteria - value and
growth. The manager looks for stocks that, in the aggregate, represent the best
value and future growth opportunities. The strategy, which is computer model
driven, is based on a stock selection methodology which builds a portfolio that
is neutral to broad economic events while focusing on stocks that have
increasing earnings estimates and are undervalued on a fundamental basis.
With the S&P Utility Index posting an impressive 41.78% return for the year,
1995 was a wonderful year for utility stocks. Strong corporate profits,
moderate economic growth, low inflation, lower interest rates and the potential
balancing of the federal budget all served to propel the market to record
levels.
The combination of low inflation and lower interest rates has a positive impact
on the utility industry, especially the electric utility sector. Lower
inflation decreases the near-term risk factor in utilities by allowing rate
setting boards to be more responsive to increasing rates. Also, in an
environment of low inflation and low interest rates, plant and equipment
financing becomes cheaper allowing more investment in efficient production
facilities and techniques.
As inflation remains under control, and the potential for lower interest rates
continues, we expect modest rises in the utility sector. Additionally, State
Street Global Advisors believes that the Portfolio is well positioned for 1996,
as it currently holds stocks which, by our measures, are undervalued and have
rising earnings estimates.
STATE STREET GLOBAL ADVISORS
7
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE TILT UTILITY
PORTFOLIO AND THE S&P UTILITY INDEX *
[GRAPH]
* This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
year years Fund***
---- ----- -------
<S> <C> <C> <C>
Tilt Utility Portfolio 33.45% 15.35% 13.71%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Tilt Utility
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
*** From commencement of operations (June 16, 1988)
8
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
[LOGO]
U.S. GOVERNMENT BOND PORTFOLIO
SUB-ADVISOR: STRONG CAPITAL MANAGEMENT, INC.
[LOGO]
The investment objective of the U.S. Government Bond Portfolio is to seek
current income and preservation of capital through investing primarily in bonds
issued by the U.S. Government and its agencies. The majority of the investments
in the Portfolio are issued or guaranteed as to timely payment of principal and
interest by the U.S. Government, its agencies or its instrumentalities. While
the U.S. Government guarantees individual securities in the Portfolio, it does
not guarantee the Portfolio's share price.
PATIENT BOND INVESTORS REWARDED IN 1995
After being buffeted by a turbulent bond market in 1994, investors with the
savvy and patience to stay the course were rewarded in 1995 with a powerful
rally. U.S. Government bonds essentially regained all of 1994's losses in the
first quarter of 1995, and prices continued to rise nearly unabated throughout
the entire year. The primary catalyst behind the bonds' strong performance this
year was a stream of unexpectedly weak economic numbers, particularly in April
and May. Many investors had been cautious of the bond market early in the year,
anticipating continued economic strength and higher inflation. When that
scenario failed to materialize, investors became more confident that interest
rates had reached a peak, and money poured from the short end of the market into
longer maturity bonds, forcing yields lower and driving prices higher.
PORTFOLIO STRATEGY: ADJUST DURATION TO MAXIMIZE OPPORTUNITY
While the Portfolio's asset allocation was varied only slightly during the year,
we actively adjusted the duration of our mortgage and Treasury holdings to
maximize the opportunity presented by falling rates. Through most of 1995, we
kept the Portfolio's overall duration slightly longer than neutral to make it
more sensitive to interest rate changes and help us lock in higher yields for
longer periods of time.
At the beginning of the year, we maintained our long duration by lengthening
maturities in the mortgage portion of the portfolio. As rates continued to
fall, however, we began to reduce the duration of our mortgage position, since
lower rates make it more likely that mortgages will be called as homeowners take
advantage of the opportunity to refinance. By October, our mortgage holdings
were of fairly short maturity, and we had increased the duration of our Treasury
position in order to maintain a slightly longer-than-neutral posture for the
portfolio overall.
THE VALUE OF KEEPING A LONGER-TERM PERSPECTIVE
Our outlook for the bond market over the next few quarters is positive. We
expect the economy to continue to grow at around a 2.5% annual rate, with
inflation remaining subdued. Against this backdrop, we look for interest rates
to stay in their current range with a downward bias, and we anticipate a
possible easing by the Federal Reserve in the first or early second quarter of
1996 - overall, a very favorable environment for bond investors.
Even in such a beneficial environment, investors must be patient and maintain a
longer-term outlook. While the market appears to have settled down in
anticipation of a slow growth economy, that doesn't mean a smooth, steady trend.
Instead, you can expect the market to be battered occasionally by contradictory
economic data, international events (particularly in Japan), and political
haggling in Washington as the budget debate and election campaigns kick into
high gear.
9
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
Such factors are why, at Strong, we believe that successful bond investing stems
from TIME IN THE MARKET rather than TIMING THE MARKET. It is important that
investors establish an investment timeline, select the Portfolio that matches
this horizon and then STAY THE COURSE. In our experience, investors who have
the discipline to look past short-term turbulence have the greatest chance of
reaching their goals.
STRONG CAPITAL MANAGEMENT, INC.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE U.S. GOVERNMENT
BOND PORTFOLIO AND THE LEHMAN BROTHERS GOVERNMENT BOND INDEX *
[GRAPH]
* This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
10
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
year years Fund***
---- ----- -------
<S> <C> <C> <C>
U.S. Government Bond Portfolio 20.18% 9.25% 9.16%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the U.S. Government Bond
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
*** From commencement of operations (May 27, 1987)
11
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
WORLD EQUITY PORTFOLIO [LOGO]
SUB-ADVISOR: KEYSTONE INVESTMENT MANAGEMENT COMPANY
The investment objective of the World Equity Portfolio is to seek maximum
long-term total return by investing primarily in common stocks, and securities
convertible into common stocks, traded in securities markets located around the
world, including the United States.
1995 IN REVIEW: INTERNATIONAL
The year 1995 was very volatile in international equity markets: first, due to
volatility in Japan's markets and secondly, due to fluctuations in the U.S.
dollar. Japan's equity market declined 25% (35% for Japanese small cap stocks)
through June, and then began a long climb back to end the year about unchanged.
The U.S. dollar also declined during the first six months about 23% before
recovering also to close the year about where it began.
European markets moved ahead approximately 10-15%, while emerging markets were
generally poor performers. India and Taiwan were down 30%, and markets in Latin
America were off as well. Emerging markets in Latin America and Asia suffered
due to the after effects of Mexico's devaluation in late 1994. As U.S. interest
rates declined in 1995, and as the U.S. dollar stabilized in late 1995, foreign
markets began to respond positively.
THE YEAR AHEAD: INTERNATIONAL
We believe 1996 will be a better year than 1995, and have therefore increased
the international portion of the portfolio from 50% to 70%. This is our maximum
international weighting. Generally speaking, foreign companies offer good
investment value now and we have positioned the Portfolio accordingly.
As of January 19, 1996, we have a weighting of 40% in Japan. We have increased
our Japanese holdings for the following reasons:
1. The markets have been in a bear market for five years, and many stocks
look attractive using standard measures of value.
2. We believe the banking crisis is starting to be dealt with which will have
a positive longer term impact.
3. The Yen has weakened (and should continue to weaken further), thus helping
sales for Japanese exporting companies.
4. The Japanese economy should recover slowly in 1996 from very depressed
levels in 1994 and 1995.
Our holdings in Japan include many blue chip companies (Canon, Sony, Toyota,
Toshiba, Bridgestone), and some sectors we believe are undervalued like
pharmaceuticals, and non-life insurance companies. We have no commercial bank
holdings.
1995 IN REVIEW: DOMESTIC
U.S. equity markets rose sharply in 1995 as investors reacted favorably to
several factors. Positive economic growth continued in 1995 albeit at a slower
pace than experienced in 1994. Inflation was not in evidence and interest rates
declined sharply. Corporate earnings were strong, benefiting from greatly
improved productivity and a weak US dollar.
12
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
Small cap stocks measured by the Russell 2000 actually underperformed the S&P
500. However, there was a significant divergence between growth and value
stocks within the index. Growth oriented small stocks substantially
outperformed value, driven principally by technology issues, an area we heavily
weighted during much of the year. As the year drew to a close, technology
stocks corrected sharply as investors grew concerned about prospects for 1996.
THE YEAR AHEAD: DOMESTIC
We do not expect that US markets will match 1995's thirty-something gains in
1996. In fact, our forecast is for a more normal return of about ten percent.
The environment for stocks is still good: the economy is growing, inflation
remains controlled, interest rates are low. Our biggest concern is corporate
earnings growth which peaked in early 1995. However, we believe that smaller,
emerging growth companies should be able to continue to report strong earnings.
Those earnings gains should compare well with larger cap stocks and hopefully
attract investors to the small cap sector.
KEYSTONE INVESTMENT MANAGEMENT COMPANY
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE WORLD EQUITY
PORTFOLIO AND THE MSCI WORLD INDEX *
[GRAPH]
* This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
13
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED DECEMBER 31, 1995
CONTINUED
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended December 31, 1995
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
year years Fund***
---- ----- -------
<S> <C> <C> <C>
World Equity Portfolio 24.32% 11.25% 7.49%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the World Equity
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
*** From commencement of operations (June 10, 1988)
14
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED DECEMBER 31, 1995 *
CONTINUED
SMALL CAP PORTFOLIO
SUB-ADVISOR: PILGRIM, BAXTER & ASSOCIATES, LTD. [LOGO]
The investment objective of the Small Cap Portfolio is to seek capital
appreciation by investing, under normal conditions, at least 65% of its total
assets in securities of companies with market capitalizations or annual revenues
under $1 billion at time of purchase.
1995 IN REVIEW
As we entered 1995, the level of economic activity that the U.S. was
experiencing was viewed as being well above long-run potential. This provoked a
preemptive series of interest rate hikes from the Federal Reserve followed by
concerns about a dislocation to overall corporate earnings once the economy did
begin to slow. Operating earnings for the Standard & Poor's 500 were rising at
a 20% rate, a level that provides significant competition for small cap growth
companies. Additionally, large multinational corporate profitability was
perceived to be benefiting from the weak dollar, providing many industrial and
cyclical companies with the opportunity for strong relative earnings gains.
As the year progressed, however, it became apparent that seven increases in the
Fed Funds rate - a tightening cycle first begun in the Spring of 1994 - and
significant tax hikes beginning in the same year, were indeed beginning to slow
the economy. The increasing acceptance of the "soft landing" scenario -
moderating real growth, benign inflation, declining interest rates and
decelerating corporate profitability - propelled small cap growth stocks higher
starting in June just after the Portfolio first opened. Investors were well
aware that, in previous soft landing periods, growth stocks had outperformed
their value and cyclical counterparts as the market rewarded earnings stamina
with a premium valuation.
In sum, recapping 1995 as a positive period for U.S. financial assets - and
growth stocks in particular - would be a significant understatement.
Stabilization of the federal deficit (with talk of significant improvement by
the Republican Congressional majority), record levels of non-financial corporate
profitability and cash flow (much of which was reinvested in productivity
enhancing information technology), relatively low costs of labor and capital,
benign levels of inflation and interest rates, and superior relative earnings
gains for small cap growth stocks were all significant contributors to
investment returns.
December Portfolio results were essentially "in line" with the various small cap
indices. Significant contributors to performance were found in the healthcare
and service sectors. Offsetting this was the performance of the technology
group, where semiconductor and semiconductor capital equipment manufacturers
were notably weak. For the year as a whole, technology, healthcare and consumer
issues were by far the principal contributors to investment results.
OUTLOOK
In looking to the year ahead, many of the positives for small cap growth stocks,
which propelled the asset class higher during the second half of 1995, remain in
place. We continue to feel that a landscape characterized by moderate economic
growth, quiescent inflation and interest rates, and continued relative earnings
expansion certainly favors the asset class.
* The Inception Date of the Small Cap Portfolio was May 4, 1995
15
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED DECEMBER 31, 1995
CONTINUED
Of course, the slowing economy carries its own special set of risks, the most
notable of which is the need for investors to adjust their expectations to the
slower revenue growth and, hence, much slower profit growth which lies ahead for
many companies. This will not be done without some periods of uncertainty and
attendant market volatility. Additionally, expectations in the bond market seem
particularly high regarding the budget balancing process. Tough decisions need
to be made here, and ultimate resolution of the process may well take a
significant amount of time. But at least we're having the discussion, and
that's quite bullish for the markets longer-term.
PILGRIM BAXTER & ASSOCIATES, LTD.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE SMALL CAP PORTFOLIO
AND THE RUSSELL 2000 INDEX **
[GRAPH]
** This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
16
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED DECEMBER 31, 1995
CONTINUED
AVERAGE ANNUAL TOTAL RETURNS ***
Period ended December 31, 1995
<TABLE>
<CAPTION>
Life of
Fund****
--------
<S> <C>
Small Cap Portfolio 30.08%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Small Cap Portfolio
and the return on the investment both will fluctuate and redemption proceeds may
be higher or lower than an investor's original cost.
*** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
**** From commencement of operations (May 4, 1995)
17
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED DECEMBER 31, 1995 *
CONTINUED
GROWTH & INCOME PORTFOLIO
SUB-ADVISOR: WARBURG PINCUS COUNSELLORS, INC. [LOGO]
The Growth & Income Portfolio was established May 31, 1995: its investment
objective is to provide growth of capital and income. The Portfolio rose 13.09%
in its first seven months, versus a return of 17.09% for the S&P 500. Much of
the Portfolio's underperformance was attributable to continued heavy
liquidations by gold-sector mutual funds, which pushed down share prices of
gold-mining and other precious-metals-related companies. These issues have a
significant representation in the Portfolio, and their weakness negated much of
the gains recorded by the Portfolio's other holdings during the period.
Their short-term performance notwithstanding, we remain bullish on the prospects
of gold and gold-mining stocks, and believe that their performance in 1996 will
be considerably improved relative to 1995. This bullishness is based entirely
on supply and demand factors, rather than on the gold-as-inflation-hedge
argument. Demand for gold, primarily for its use in jewelry, has risen steadily
over time. This growth has been particularly strong in the last decade, with
much of the demand coming from emerging markets.
We are finding excellent opportunities in other areas as well, and believe that
the portfolio is in good position as the year begins. Stocks we view as
promising include many industrial cyclical companies, particularly steel and
other metals firms, which stand to benefit significantly from what we expect to
be a stronger economy in the second half of the year.
We also see selected opportunities in oil-services companies, which as a group
should show a significant improvement in earnings due to the recent surge in
exploration activity by oil companies.
The Portfolio maintains a sizable weighting in banking stocks, and we believe
they hold good appreciation potential in 1996. Driving these stocks'
performance has been a favorable interest rate environment and the industry's
accelerating trend toward consolidation, which shows few signs of easing.
Recent weakness within the technology sector has brought valuations down to more
reasonable levels, and we have used the opportunity to add selected names to the
portfolio. Other areas in which we see good values are in cable and
telecommunications equipment companies. Collectively, these stocks are down
significantly from their highs, but they stand to benefit greatly from
deregulation following passage of the telecommunications bill, which has passed
both Houses of Congress and should become law some time later this year.
WARBURG, PINCUS COUNSELLORS, INC.
* The Inception Date of the Growth & Income Portfolio was May 31, 1995
18
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE PERIOD ENDED DECEMBER 31, 1995
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GROWTH & INCOME
PORTFOLIO AND THE S&P 500 INDEX **
[GRAPH]
** This Index is an unmanaged index in which investors can not invest. Results
for the Index do not reflect the expenses and investment management fees
incurred by the Portfolio.
AVERAGE ANNUAL TOTAL RETURNS ***
Period ended December 31, 1995
<TABLE>
<CAPTION>
Life of
Fund****
--------
<S> <C>
Growth & Income Portfolio 13.09%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gain distributions. Results represent past performance and do not
indicate future results. The value of an investment in the Growth & Income
Portfolio and the return on the investment both will fluctuate and redemption
proceeds may be higher or lower than an investor's original cost.
*** Performance data is historical and includes changes in share price and
reinvestment of dividends and capital gains. Performance numbers are net of all
fund operating expenses, but do not include any insurance charges imposed in
connection with your variable insurance contract. If this performance
information included the effect of the insurance charges, performance numbers
would be lower.
**** From commencement of operations (May 31, 1995)
19
<PAGE>
This page has been left blank intentionally.
20
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
To the Trustees and Contract Owners of Variable Investors Series Trust
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of Variable Investors Series Trust
(comprising, respectively, the Cash Management, Common Stock, High Income
Bond, Multiple Strategies, Tilt Utility, U.S. Government Bond, World Equity,
Small Cap and Growth & Income Portfolios) as of December 31, 1995, and the
related statements of operations, changes in net assets and financial
highlights for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of Variable
Investors Series Trust management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The financial statements of Variable Investors Series Trust for the
year ended December 31, 1994 and the financial highlights for each of the
four years in the period ended December 31, 1994 were audited by other
auditors whose report dated February 14, 1995 expressed an unqualified
opinion on those statements and financial highlights.
We conducted our audit 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 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.
Our procedures included confirmation of securities owned as of December 31,
1995, by correspondence with the custodian and brokers or by other appropriate
auditing procedures where replies from brokers were not received. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Variable Investors Series Trust at
December 31, 1995, the results of their operations, the changes in their net
assets and financial highlights for each of the indicated periods, in conformity
with generally accepted accounting principles.
Boston, Massachusetts
February 12, 1996
21
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER
BANKING - (19.7%)
Abbey National North America . . . . . . . . . . 5.710% 01/05/1996 $ 300,000 $ 299,810
Commerzbank United States Finance. . . . . . . . 5.590% 01/22/1996 500,000 498,370
Royal Bank of Canada . . . . . . . . . . . . . . 5.480% 01/11/1996 200,000 199,696
Societe General North America, Inc.. . . . . . . 5.600% 02/09/1996 500,000 496,967
Svenska Handelsbanken, Inc.. . . . . . . . . . . 5.650% 03/29/1996 500,000 493,094
-----------
1,987,937
FINANCE AUTO - (3.0%)
Ford Credit. . . . . . . . . . . . . . . . . . . 5.700% 01/16/1996 300,000 299,288
-----------
FINANCE COMMERCIAL - (22.5%)
Asset Securitization Cooperative Corp. . . . . . 5.750% 01/19/1996 300,000 299,137
Beta Finance, Inc. . . . . . . . . . . . . . . . 5.670% 02/20/1996 400,000 396,850
Beta Finance, Inc. . . . . . . . . . . . . . . . 5.590% 04/19/1996 100,000 98,307
CIT Group Holdings, Inc. . . . . . . . . . . . . 5.700% 01/19/1996 100,000 99,715
Falcon Asset Securitization. . . . . . . . . . . 5.540% 05/03/1996 500,000 490,536
General Electric Capital Corporation . . . . . . 5.690% 02/05/1996 400,000 397,787
Greenwich Funding Corporation. . . . . . . . . . 5.670% 02/15/1996 200,000 198,583
Greenwich Funding Corporation. . . . . . . . . . 5.660% 02/23/1996 300,000 297,500
-----------
2,278,415
FINANCE - RETAIL - (4.9%)
American Express Credit Corporation. . . . . . . 5.610% 04/08/1996 500,000 492,364
-----------
TOTAL COMMERCIAL PAPER - (COST $5,058,004) 50.1% 5,058,004
-----------
GOVERNMENT AND AGENCY SECURITIES
FINANCIAL SERVICES - (9.9%)
Federal Home Loan Mortgage Corporation. . . . . 5.750% 01/02/1996 1,000,000 999,840
-----------
TOTAL GOVERNMENT AND AGENCY SECURITIES - (Cost $999,840) 9.9% 999,840
-----------
BANKING - (24.2%)
Board of Industrial Development - City of
Pelham (Columbus Bank & Trust, LOC) (a). . . . . 6.069% 01/04/1996 390,000 390,000
Maryland State Industrial Authority
(First National Bank, Maryland LOC) (a). . . . . 5.910% 01/01/1996 500,000 500,000
Mississippi Business Finance Corporation
(CoAmerica Bank, LOC) (a). . . . . . . . . . . . 5.869% 01/04/1996 400,000 400,000
PNC Bank NA. . . . . . . . . . . . . . . . . . . . 5.535% 01/01/1996 500,000 499,600
Roby Company (Huntington National
Bank, LOC) (a) . . . . . . . . . . . . . . . . . 5.870% 01/04/1996 390,000 390,000
Vista Funding Corporation (Fifth Third
Bank, LOC) (a). . .. . . . . . . . . . . . . . . 5.869% 01/04/1996 263,000 263,000
-----------
2,442,600
</TABLE>
See notes to financial statements.
22
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C> <C>
VARIABLE RATE AND CORPORATE NOTES
INSURANCE - (4.9%)
Sun Life Insurance Company of America. . . . . . 6.088% 09/15/1996 $ 500,000 $ 500,000
------------
LEASING - (3.2%)
Navistar Financial Corporation . . . . . . . . . 5.750% 11/15/1996 323,223 323,217
------------
TOTAL VARIABLE RATE AND CORPORATE
NOTES - (Cost $3,265,817) 32.3% 3,265,817
------------
TIME DEPOSIT
BANKING - (1.0%)
Bank of Nova Scotia . . . . . . . . . . . . . . 7.000% 01/02/1996 100,000 100,000
------------
TOTAL TIME DEPOSIT - (COST $100,000) 1.0% 100,000
------------
</TABLE>
<TABLE>
<CAPTION>
MATURITY
AMOUNT
------
<S> <C> <C> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENTS (b) - (7.8%)
Goldman Sachs . . . . . . . . . . . . . . . . . 5.900% 01/02/1996 $ 390,256 390,000
Paine Webber Group, Inc.. . . . . . . . . . . . 5.930% 01/02/1996 400,264 400,000
------------
TOTAL SHORT TERM INVESTMENTS - (COST $790,000) 7.8% 790,000
------------
TOTAL INVESTMENTS - (Cost $10,213,661) 101.1% 10,213,661
------
OTHER ASSETS LESS LIABILITIES - (1.1)% (117,938)
------ ------------
NET ASSETS - 100.0% $ 10,095,723
------ ------------
------ ------------
</TABLE>
(a) Variable rate demand note. Interest rate is the rate in effect and
maturity date represents the next reset date at December 31, 1995.
(b) The repurchase agreements, dated 12/29/95, are fully collateralized by U.S.
government and/or agency obligations based on market prices at the date of
the purchase. The investments in repurchase agreements are through
participation in a joint account with other portfolios advised by Federated
Investment Counseling.
LOC - Letter of Credit
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
23
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE - (5.6%)
Loral Corporation . . . . . . . . . . . . . . . . . . . . . . . . 36,000 $ 1,273,500
McDonnell Douglas Corporation . . . . . . . . . . . . . . . . . . 10,000 920,000
Watkins Johnson Company . . . . . . . . . . . . . . . . . . . . . 5,000 218,750
------------
2,412,250
BANKS - (1.2%)
Fifth Third Bancorp . . . . . . . . . . . . . . . . . . . . . . . 7,000 512,750
------------
BUSINESS SERVICES - (0.9%)
National Data Corporation . . . . . . . . . . . . . . . . . . . . 16,000 396,000
------------
CHEMICALS - (6.0%)
First Mississippi Corporation. . . . . . . . . . . . . . . . . . . . 22,500 596,250
IMC Fertilizer Group, Inc. . . . . . . . . . . . . . . . . . . . . . 32,000 1,308,000
Praxair, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500 689,312
------------
2,593,562
COMMUNICATION EQUIPMENT - (0.8%)
Andrew Corporation (a) . . . . . . . . . . . . . . . . . . . . . . . 9,500 363,375
------------
COMPUTER RELATED - (10.1%)
3Com Corporation (a) . . . . . . . . . . . . . . . . . . . . . . . . 16,000 746,000
Cabletron Systems, Inc. (a). . . . . . . . . . . . . . . . . . . . . 10,000 810,000
Cisco System, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . 14,500 1,082,062
Compaq Computer Corporation (a). . . . . . . . . . . . . . . . . . . 7,000 336,000
First Data Corporation . . . . . . . . . . . . . . . . . . . . . . . 6,000 401,250
HBO & Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,500 574,688
Measurex Corporation . . . . . . . . . . . . . . . . . . . . . . . . 13,500 381,375
------------
4,331,375
COMPUTER SERVICES - (2.4%)
Computer Associates International, Inc.. . . . . . . . . . . . . . . 7,500 426,563
Informix Corporation . . . . . . . . . . . . . . . . . . . . . . . . 20,000 599,640
------------
1,026,203
CONSTRUCTION - (1.9%)
Clayton Homes, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 37,500 801,563
------------
COSMETICS & TOILETRIES - (1.9%)
Gillette Company . . . . . . . . . . . . . . . . . . . . . . . . . . 15,500 807,938
------------
DRUGS - (11.3%)
Amgen, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000 831,250
Cardinal Health, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 7,800 427,050
Genzyme Corporation (a). . . . . . . . . . . . . . . . . . . . . . . 13,000 810,875
Merck & Company, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 20,000 1,315,000
Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 756,000
Schering Plough Corporation. . . . . . . . . . . . . . . . . . . . . 13,000 711,750
------------
4,851,925
</TABLE>
See notees to financial statements.
24
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ ------
<S> <C> <C>
COMMON STOCKS
ELECTRONICS - (2.3%)
ADC Telecommunications, Inc. (a). . . . . . . . . . . . . . . . . 10,000 $ 365,000
Silicon Graphics, Inc. . . . . . . . . . . . . . . . . . . . . . 10,000 275,000
Vishay Intertechnology, Inc.. . . . . . . . . . . . . . . . . . . 11,000 346,500
-----------
986,500
ENVIRONMENTAL - (2.9%)
Thermo Electron Corporation (a) . . . . . . . . . . . . . . . . . 24,000 1,248,000
-----------
FINANCIAL SERVICES - (6.0%)
Countrywide Credit Industries, Inc. . . . . . . . . . . . . . . . 9,000 195,750
Finova Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 10,500 506,625
Green Tree Financial, Inc.. . . . . . . . . . . . . . . . . . . . 43,000 1,134,125
Money Store, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 15,000 234,375
Sunamerica, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 10,500 498,750
-----------
2,569,625
FOOD & BEVERAGES - (2.6%)
Coca Cola Company . . . . . . . . . . . . . . . . . . . . . . . . 6,000 445,500
PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 670,500
-----------
1,116,000
GAS & PIPELINE UTILITIES - (1.0%)
Panhandle Eastern Corporation . . . . . . . . . . . . . . . . . . 15,000 418,125
-----------
INSURANCE - (4.0%)
20th Century Industries (a) . . . . . . . . . . . . . . . . . . . 12,000 238,500
American International Group, Inc. . . . . . . . . . . . . . . . 8,000 740,000
Travelers, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 11,500 723,062
-----------
1,701,562
MACHINERY & EQUIPMENT - (7.1%)
Bombardier, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 49,000 645,917
Dover Corporation . . . . . . . . . . . . . . . . . . . . . . . . 10,000 368,750
Duriron, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 350,625
Gleason Corporation . . . . . . . . . . . . . . . . . . . . . . . 12,500 406,250
IDEX Corporation. . . . . . . . . . . . . . . . . . . . . . . . . 14,500 590,875
JLG Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . 23,000 684,250
-----------
3,046,667
MEDIA - (2.7%)
Capital Cities ABC, Inc.. . . . . . . . . . . . . . . . . . . . . 9,500 1,172,062
-----------
MEDICAL SUPPLIES & SERVICES - (6.8%)
Healthcare Compare Corporation (a). . . . . . . . . . . . . . . . 13,500 587,250
Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . 5,500 470,937
Medtronic, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 24,000 1,341,000
Stryker Corporation . . . . . . . . . . . . . . . . . . . . . . . 9,500 498,750
-----------
2,897,937
OIL & GAS - (0.7%)
Occidental Petroleum Corporation. . . . . . . . . . . . . . . . . 13,000 277,875
-----------
</TABLE>
See notes to financial statements.
25
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
PACKAGING - (1.0%)
Sealed Air Corporation (a). . . . . . . . . . . . . . . . . . . . 16,000 $ 450,000
------------
PETROLEUM SERVICES - (1.2%)
Halliburton Company . . . . . . . . . . . . . . . . . . . . . . . 10,000 506,250
------------
PRINTING & PUBLISHING - (1.1%)
Omnicom Group . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000 484,250
------------
RECREATION - (0.8%)
Walt Disney Company . . . . . . . . . . . . . . . . . . . . . . . 6,000 354,000
------------
RETAIL GROCERY - (1.0%)
Caseys General Stores, Inc. . . . . . . . . . . . . . . . . . . . 20,000 437,500
------------
RETAIL-SPECIALTY - (1.1%)
CUC International, Inc. (a) . . . . . . . . . . . . . . . . . . . 13,500 460,688
------------
SEMICONDUCTORS - (1.5%)
Intel Corporation . . . . . . . . . . . . . . . . . . . . . . . . 7,000 397,250
KLA Instruments (a) . . . . . . . . . . . . . . . . . . . . . . . 9,000 234,563
------------
631,813
SOFTWARE - (2.7%)
Microsoft Corporation (a) . . . . . . . . . . . . . . . . . . . . 6,000 526,500
Oracle System Corporation (a) . . . . . . . . . . . . . . . . . . 15,000 635,625
------------
1,162,125
STEEL - (1.2%)
Texas Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . 9,500 503,500
------------
TELECOMMUNICATIONS - (2.6%)
Sprint Corporation. . . . . . . . . . . . . . . . . . . . . . . . 20,000 797,500
Tellabs, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . 9,000 333,000
------------
1,130,500
TRANSPORTATION - (1.4%)
Burlington Northern Santa Fe. . . . . . . . . . . . . . . . . . . 7,700 600,600
------------
TOTAL COMMON STOCKS - (COST $32,787,844) 93.8% 40,252,520
------------
------------
</TABLE>
See notes to financial statements.
26
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY MATURITY
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT - (7.6%)
State Street Bank and Trust Company (b) . . . . 4.250% 01/02/1996 $ 3,257,538 $ 3,256,000
TOTAL SHORT TERM INVESTMENT - (COST $3,256,000) 7.6% 3,256,000
------------
TOTAL INVESTMENTS - (Cost $36,043,844) 101.4% 43,508,520
OTHER ASSETS LESS LIABILITIES - (1.4)% (589,796)
------ ------------
NET ASSETS - 100.0% $ 42,918,724
------ ------------
------ ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 12/29/95, is fully collateralized by a
United States Treasury Bond, 10.75%, 8/15/05, with a value of $3,324,325.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
27
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
AEROSPACE & DEFENSE - (1.8%)
Howmet Corporation (a). . . . . . . . . . . . . 10.000% 12/01/2003 $ 25,000 $ 26,000
Tracor, Inc.. . . . . . . . . . . . . . . . . . 10.875% 08/15/2001 125,000 129,844
----------
155,844
AUTOMOTIVE - (5.4%)
Aftermarket Technology Company. . . . . . . . . 12.000% 08/01/2004 125,000 131,875
Exide Corporation . . . . . . . . . . . . . . . 10.000% 04/15/2005 100,000 108,250
Lear Seating Corporation. . . . . . . . . . . . 8.250% 02/01/2002 125,000 122,656
Motor Wheel Corporation . . . . . . . . . . . . 11.500% 03/01/2000 125,000 108,750
----------
471,531
BANKING - (1.6%)
First Nationwide Holdings, Inc. . . . . . . . . 12.250% 05/15/2001 125,000 140,313
----------
BEVERAGE & TOBACCO - (0.5%)
Dr Pepper Bottling Holdings Company (b) . . . . 10.675% 02/15/2003 50,000 40,750
----------
BROADCAST RADIO & TELEVISION - (9.3%)
Ackerley Communications, Inc. . . . . . . . . . 10.750% 10/01/2003 125,000 133,750
Act III Broadcasting Inc. . . . . . . . . . . . 10.250% 12/15/2005 50,000 51,125
Allbritton CommunicationCompany . . . . . . . . 11.500% 08/15/2004 125,000 131,875
Chancellor Broadcasting Company . . . . . . . . 12.500% 10/01/2004 100,000 107,000
Pegasus Media & Communications, Inc.. . . . . . 12.500% 07/01/2005 50,000 49,750
Peoples Choice TV Corporation (b) . . . . . . . 12.385% 06/01/2004 100,000 58,250
SCI Television, Inc.. . . . . . . . . . . . . . 11.000% 06/30/2005 150,000 159,375
Sinclair Broadcast Group, Inc.. . . . . . . . . 10.000% 12/15/2003 125,000 127,812
----------
818,937
BUSINESS EQUIPMENT & Services - (2.1%)
Monarch Acquisition Corp. . . . . . . . . . . . 12.500% 07/01/2003 125,000 131,875
United Stationers Supply Company. . . . . . . . 12.750% 05/01/2005 50,000 54,625
----------
186,500
CABLE TELEVISION - (10.3%)
Australis Media Ltd. (b). . . . . . . . . . . . 9.631% 05/15/2003 100,000 72,250
Cablevision Systems Company . . . . . . . . . . 9.875% 02/15/2013 75,000 79,875
CAI Wireless Systems, Inc. . . . . . . . . . . 12.250% 09/15/2002 50,000 53,500
Continental Cablevision, Inc. . . . . . . . . . 9.500% 08/01/2013 200,000 212,000
Insight Communications Company (b). . . . . . . 10.678% 03/01/2000 50,000 50,625
International Cabletel, Inc. (b). . . . . . . . 11.475% 10/15/2003 250,000 173,750
Le Group Videotron Ltee.. . . . . . . . . . . . 10.625% 02/15/2005 100,000 107,500
TeleWest Plc(b) . . . . . . . . . . . . . . . . 10.989% 10/01/2007 175,000 105,219
Wireless One Inc. . . . . . . . . . . . . . . . 13.000% 10/15/2003 50,000 53,000
----------
907,719
CHEMICALS & PLASTICS - (6.2%)
Arcadian Partners L.P.. . . . . . . . . . . . . 10.750% 05/01/2005 125,000 137,500
Crain Industries, Inc. (a). . . . . . . . . . . 13.500% 08/15/2005 50,000 50,500
G-I Holdings, Inc.(b) . . . . . . . . . . . . . 9.407% 10/01/1998 75,000 57,562
</TABLE>
See notes to financial statements.
28
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
CHEMICALS & PLASTICS - (CONTINUED)
Harris Chemical North America, Inc. (b) . . . . 10.432% 07/15/2001 $ 100,000 $ 97,000
Polymer Group,Inc.. . . . . . . . . . . . . . . 12.250% 07/15/2002 125,000 128,750
Uniroyal Technology Corporation . . . . . . . . 11.750% 06/01/2003 75,000 72,000
-----------
543,312
CLOTHING & TEXTILES - (1.4%)
WestPoint Stevens, Inc. . . . . . . . . . . . . 9.375% 12/15/2005 125,000 123,438
-----------
CONGLOMERATES - (1.5%)
Sherritt Gordon, Ltd. . . . . . . . . . . . . . 9.750% 04/01/2003 125,000 132,500
-----------
CONSUMER PRODUCTS - (4.3%)
American Safety Razor Company . . . . . . . . . 9.875% 08/01/2005 50,000 50,750
Herff Jones Inc.. . . . . . . . . . . . . . . . 11.000% 08/15/2005 75,000 80,250
Hosiery Corporation of America, Inc.. . . . . . 13.750% 08/01/2002 50,000 53,875
ICON Health & Fitness, Inc. . . . . . . . . . . 13.000% 07/15/2002 100,000 108,000
Playtex Family Products Corporation . . . . . . 9.000% 12/15/2003 100,000 88,500
-----------
381,375
CONTAINER & GLASS PRODUCTS - (0.6%)
Portola Packaging,Inc.. . . . . . . . . . . . . 10.750% 10/01/2005 50,000 51,500
-----------
COSMETICS & TOILETRIES - (1.1%)
Revlon Consumer Products Corporation. . . . . . 9.375% 04/01/2001 100,000 101,250
-----------
ECOLOGICAL SERVICES & EQUIPMENT - (3.1%)
Allied Waste Industries, Inc. . . . . . . . . . 12.000% 02/01/2004 150,000 162,375
Mid-American Waste Systems, Inc.. . . . . . . . 12.250% 02/15/2003 125,000 112,500
-----------
274,875
FARMING & AGRICULTURE - (0.6%)
Spreckels Industries, Inc.. . . . . . . . . . . 11.500% 09/01/2000 50,000 49,250
-----------
FOOD & DRUG RETAILERS - (2.4%)
Pathmark Stores, Inc. . . . . . . . . . . . . . 9.625% 05/01/2003 50,000 48,500
Penn Traffic Company. . . . . . . . . . . . . . 9.625% 04/15/2005 75,000 58,406
Ralph's Grocery Company . . . . . . . . . . . . 10.450% 06/15/2004 100,000 101,500
-----------
208,406
FOOD PRODUCTS - (4.2%)
Curtice-Burns Foods, Inc. . . . . . . . . . . . 12.250% 02/01/2005 100,000 103,000
PMI Acquisition Corporation . . . . . . . . . . 10.250% 09/01/2003 100,000 102,500
Specialty Foods Corporation . . . . . . . . . . 11.250% 08/15/2003 125,000 111,250
Van De Kamp's, Inc. . . . . . . . . . . . . . . 12.000% 09/15/2005 50,000 51,750
-----------
368,500
FOOD SERVICES - (1.0%)
Flagstar Corporation 11.250% 11/01/2004 125,000 88,750
-----------
</TABLE>
See notes to financial statements.
29
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
FOREST PRODUCTS - (5.0%)
Container Corporation of America. . . . . . . . 11.250% 05/01/2004 $ 125,000 $128,437
Repap New Brunswick, Inc. . . . . . . . . . . . 9.875% 07/15/2000 125,000 125,625
S.D. Warren Company . . . . . . . . . . . . . . 12.000% 12/15/2004 100,000 109,500
Stone Container Corporation . . . . . . . . . . 9.875% 02/01/2001 75,000 72,750
-----------
436,312
HEALTHCARE - (2.5%)
AmeriSource Health Corporation. . . . . . . . . 11.250% 07/15/2005 101,525 111,678
Tenet Healthcare Corporation. . . . . . . . . . 10.125% 03/01/2005 100,000 110,750
-----------
222,428
HOME PRODUCTS & FURNISHINGS - (1.0%)
American Standard, Inc. (b) . . . . . . . . . . 9.021% 06/01/2005 100,000 85,750
-----------
INDUSTRIAL PRODUCTS & EQUIPMENT - (1.7%)
Cabot Safety Acquisition Corporation. . . . . . 12.500% 07/15/2005 100,000 106,500
Pace Industries,Inc.. . . . . . . . . . . . . . 10.625% 12/01/2002 50,000 44,000
-----------
150,500
LEISURE & ENTERTAINMENT - (3.1%)
Affinity Group, Inc.. . . . . . . . . . . . . . 11.500% 10/15/2003 50,000 50,750
Alliance Entertainment Corporation. . . . . . . 11.250% 07/15/2005 50,000 50,250
Premier Parks, Inc. . . . . . . . . . . . . . . 12.000% 08/15/2003 50,000 51,375
Six Flags Theme Parks, Inc. (b) . . . . . . . . 10.723% 06/15/2005 150,000 117,375
-----------
269,750
MACHINERY & EQUIPMENT - (2.2%)
Primeco, Inc. . . . . . . . . . . . . . . . . . 12.750% 03/01/2005 75,000 78,375
Waters Corporation. . . . . . . . . . . . . . . 12.750% 09/30/2004 100,000 112,500
-----------
190,875
OIL & GAS - (3.0%)
Falcon Drilling Company, Inc. . . . . . . . . . 12.500% 03/15/2005 100,000 109,500
Giant Industries, Inc.. . . . . . . . . . . . . 9.750% 11/15/2003 125,000 126,406
United Meridian Corporation . . . . . . . . . . 10.375% 10/15/2005 25,000 26,375
-----------
262,281
PRINTING & PUBLISHING - (1.8%)
Affiliated Newspaper (b) . . . . . . . . . . . 13.344% 07/01/2006 250,000 156,875
-----------
RETAILERS - (1.3%)
Brylane Capital Corporation . . . . . . . . . . 10.000% 09/01/2003 125,000 110,625
-----------
SERVICES - (0.6%)
Coinmach Corporation (a). . . . . . . . . . . . 11.750% 11/15/2005 50,000 50,625
-----------
STEEL - (3.3%)
EnviroSource, Inc.. . . . . . . . . . . . . . . 9.750% 06/15/2003 125,000 109,375
Geneva Steel Company. . . . . . . . . . . . . . 9.500% 01/15/2004 100,000 77,750
GS Technologies Operating Company, Inc. . . . . 12.000% 09/01/2004 100,000 99,000
-----------
286,125
</TABLE>
See notes to financial statements.
30
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
SURFACE TRANSPORTATION - (5.9%)
Gearbulk Holdings Ltd. . . . . . . . . . . . . 11.250% 12/01/2004 $ 100,000 $ 107,500
Sea Containers Ltd. . . . . . . . . . . . . . . 12.500% 12/01/2004 125,000 134,687
Stena AB. . . . . . . . . . . . . . . . . . . . 10.500% 12/15/2005 75,000 77,063
Trans Ocean Container Corporation . . . . . . . 12.250% 07/01/2004 75,000 78,000
Trism, Inc. . . . . . . . . . . . . . . . . . . 10.750% 12/15/2000 125,000 121,875
----------
519,125
TELECOMMUNICATIONS & CELLULAR - (6.5%)
Cellular Communications
International, Inc. (b) . . . . . . . . . . . 10.542% 08/15/2000 100,000 61,500
Dial Call Communications, Inc. (b) . . . . . . 14.646% 04/15/2004 100,000 57,000
Fonorola, Inc. . . . . . . . . . . . . . . . . 12.500% 08/15/2002 25,000 26,250
IXC Communications, Inc. (a). . . . . . . . . . 13.000% 10/01/2005 75,000 80,250
MobileMedia Communications,Inc. . . . . . . . . 9.375% 11/01/2007 25,000 25,625
PanAmSat Corporation(b) . . . . . . . . . . . . 9.848% 08/01/2003 100,000 81,500
ProNet, Inc. . . . . . . . . . . . . . . . . . 11.875% 06/15/2005 100,000 110,125
USA Mobile Communications, Inc. . . . . . . . . 9.500% 02/01/2004 125,000 123,750
----------
566,000
UTILITIES - (1.6%)
California Energy Company, Inc. (b) . . . . . . 9.300% 01/15/2004 150,000 141,000
----------
TOTAL CORPORATE BONDS - (COST $8,192,990) 96.9% 8,493,021
----------
<CAPTION>
SHARES
------
<S> <C> <C> <C>
COMMON STOCKS
BROADCAST RADIO & TELEVISION - (0.0%)
Pegasus Media & Communications, Inc. (a) (c) . . . . . . . . . . . . . . 5 0
-------
CONSUMER PRODUCTS - (0.0%)
Hosiery Corporation Of America, Inc.(c) . . . . . . . . . . . . . . . . . 50 250
-------
FOOD & DRUG RETAILERS - (0.3%)
Grand Union Company (c) . . . . . . . . . . . . . . . . . . . . . . . . . 3,535 26,512
-------
PRINTING & PUBLISHING - (0.1%)
Affiliated Newspaper (c). . . . . . . . . . . . . . . . . . . . . . . . . 250 6,250
-------
TOTAL COMMON STOCKS - (COST $201,312) . . . . . . . . . . . . . . . . . . 0.4% 33,012
-------
PREFERRED STOCK
Telecommunications & Cellular - (0.7%)
PanAmSat Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 60,634
-------
TOTAL PREFERRED STOCK - (COST $53,829). . . . . . . . . . . . . . . . . . 0.7% 60,634
-------
</TABLE>
See notes to financial statements.
31
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
WARRANTS
CONSUMER PRODUCTS - (0.0%)
IHF Capital, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . . 100 $ 2,500
----------
TELECOMMUNICATIONS & CELLULAR - (0.0%)
DIAL PAGE, INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 1
----------
TOTAL WARRANTS - (COST $1,408) 0.0% 2,501
----------
TOTAL INVESTMENTS - (Cost $8,449,539) 98.0% 8,589,168
OTHER ASSETS LESS LIABILITIES - 2.0% 174,672
------- -----------
NET ASSETS - 100.0% $ 8,763,840
------- -----------
------- -----------
</TABLE>
(a) Pursuant to Rule 144A under the Securities Act of 1933, these securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At December 31, 1995, these securities
aggregated $209,875 or 2.4% of the net assets of the Portfolio.
(b) Step bond. Interest rate shown represents yield to maturity.
(c) Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
32
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE - (4.3%)
Loral Corporation . . . . . . . . . . . . . . . . . . . . . . . . 16,000 $ 566,000
McDonnell Douglas Corporation . . . . . . . . . . . . . . . . . . 4,400 404,800
Watkins Johnson Company . . . . . . . . . . . . . . . . . . . . . 3,800 166,250
------------
1,137,050
BANKS - (0.9%)
Fifth Third Bancorp . . . . . . . . . . . . . . . . . . . . . . . 3,300 241,725
------------
BUSINESS SERVICES - (0.7%)
National Data Corporation . . . . . . . . . . . . . . . . . . . . 7,100 175,725
------------
CHEMICALS - (4.5%)
First Mississippi Corporation . . . . . . . . . . . . . . . . . . 10,400 275,600
IMC Fertilizer Group, Inc.. . . . . . . . . . . . . . . . . . . . 14,600 596,775
Praxair, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000 302,625
------------
1,175,000
COMMERCIAL SERVICES - (0.7%)
Measurex Corporation. . . . . . . . . . . . . . . . . . . . . . . 6,200 175,150
------------
COMMUNICATION EQUIPMENT - (0.6%)
Andrew Corporation (a). . . . . . . . . . . . . . . . . . . . . . 4,000 153,000
------------
COMPUTER RELATED - (6.7%)
3Com Corporation (a). . . . . . . . . . . . . . . . . . . . . . . 7,600 354,350
Cabletron Systems, Inc. (a) . . . . . . . . . . . . . . . . . . . 4,000 324,000
Cisco System, Inc. (a). . . . . . . . . . . . . . . . . . . . . . 6,800 507,450
Compaq Computer Corporation (a) . . . . . . . . . . . . . . . . . 3,200 153,600
First Data Corporation. . . . . . . . . . . . . . . . . . . . . . 2,500 167,188
HBO & Company . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500 268,187
------------
1,774,775
COMPUTER SERVICES - (1.6%)
Computer Associates International, Inc. . . . . . . . . . . . . . 3,000 170,625
Informix Corporation. . . . . . . . . . . . . . . . . . . . . . . 8,000 239,856
------------
410,481
CONSTRUCTION - (1.5%)
Clayton Homes, Inc. . . . . . . . . . . . . . . . . . . . . . . . 18,000 384,750
------------
COSMETICS & TOILETRIES - (1.4%)
Gillette Company. . . . . . . . . . . . . . . . . . . . . . . . . 6,900 359,663
------------
DRUGS - (8.1%)
Amgen, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . . . 6,800 403,750
Cardinal Health Inc.. . . . . . . . . . . . . . . . . . . . . . . 3,100 169,725
Genzyme Corporation (a) . . . . . . . . . . . . . . . . . . . . . 5,200 324,350
</TABLE>
See notes to financial statements.
33
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
DRUGS - (CONTINUED)
Merck & Company, Inc. . . . . . . . . . . . . . . . . . . . . . . 9,000 $ 591,750
Pfizer, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,200 327,600
Schering Plough Corporation . . . . . . . . . . . . . . . . . . . 5,800 317,550
------------
2,134,725
ELECTRONICS - (1.6%)
ADC Telecommunications, Inc. (a). . . . . . . . . . . . . . . . . 4,300 156,950
Silicon Graphics, Inc. . . . . . . . . . . . . . . . . . . . . . 4,000 110,000
Vishay Intertechnology, Inc.. . . . . . . . . . . . . . . . . . . 4,800 151,200
------------
418,150
ENVIRONMENTAL - (2.7%)
Thermo Electron Corporation (a) . . . . . . . . . . . . . . . . . 13,500 702,000
------------
FINANCIAL SERVICES - (4.5%)
Countrywide Credit Industries, Inc. . . . . . . . . . . . . . . . 5,600 121,800
Finova Group, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 4,700 226,775
Green Tree Financial, Inc.. . . . . . . . . . . . . . . . . . . . 20,000 527,500
Money Store, Inc. . . . . . . . . . . . . . . . . . . . . . . . . 6,500 101,562
Sunamerica, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 4,500 213,750
------------
1,191,387
FOOD & BEVERAGES - (2.0%)
Coca Cola Company . . . . . . . . . . . . . . . . . . . . . . . . 3,000 222,750
PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500 307,312
------------
530,062
GAS & PIPELINE UTILITIES - (0.6%)
Panhandle Eastern Corporation . . . . . . . . . . . . . . . . . . 6,000 167,250
------------
INSURANCE - (3.0%)
20th Century Industries (a) . . . . . . . . . . . . . . . . . . . 4,800 95,400
American International Group, Inc. . . . . . . . . . . . . . . . 3,950 365,375
Travelers, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 5,200 326,950
------------
787,725
MACHINERY & EQUIPMENT - (5.3%)
Bombardier, Inc.. . . . . . . . . . . . . . . . . . . . . . . . . 23,000 303,186
Dover Corporation . . . . . . . . . . . . . . . . . . . . . . . . 4,600 169,625
Duriron, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,700 156,612
Gleason Corporation . . . . . . . . . . . . . . . . . . . . . . . 5,600 182,000
IDEX Corporation. . . . . . . . . . . . . . . . . . . . . . . . . 7,000 285,250
JLG Industries, Inc. . . . . . . . . . . . . . . . . . . . . . . 10,400 309,400
------------
1,406,073
MEDIA - (2.0%)
Capital Cities ABC, Inc.. . . . . . . . . . . . . . . . . . . . . 4,300 530,512
------------
</TABLE>
See notes to financial statements.
34
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ----- ------
<S> <C> <C> <C>
COMMON STOCKS
MEDICAL SUPPLIES & SERVICES - (5.2%)
Healthcare Compare Corporation (a). . . . . . . . . . . . . . . . 6,200 $ 269,700
Johnson & Johnson . . . . . . . . . . . . . . . . . . . . . . . . 2,500 214,062
Medtronic, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 12,600 704,025
Stryker Corporation . . . . . . . . . . . . . . . . . . . . . . . 3,700 194,250
------------
1,382,037
OIL & GAS - (0.4%)
Occidental Petroleum Corporation. . . . . . . . . . . . . . . . . 5,300 113,288
------------
PACKAGING - (0.8%)
Sealed Air Corporation (a). . . . . . . . . . . . . . . . . . . . 7,400 208,125
------------
PETROLEUM SERVICES - (1.1%)
Halliburton Company . . . . . . . . . . . . . . . . . . . . . . . 5,800 293,625
------------
PRINTING & PUBLISHING - (0.8%)
Omnicom Group . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000 223,500
------------
RECREATION - (0.7%)
Walt Disney Company . . . . . . . . . . . . . . . . . . . . . . . 2,900 171,100
------------
RETAIL GROCERY - (0.8%)
Caseys General Stores, Inc. . . . . . . . . . . . . . . . . . . . 9,200 201,250
------------
RETAIL-SPECIALTY - (0.8%)
CUC International, Inc. (a) . . . . . . . . . . . . . . . . . . . 6,100 208,163
------------
SEMICONDUCTORS - (1.0%)
Intel Corporation . . . . . . . . . . . . . . . . . . . . . . . . 3,100 175,925
KLA Instruments (a) . . . . . . . . . . . . . . . . . . . . . . . 3,800 99,038
------------
274,963
SOFTWARE - (2.0%)
Microsoft Corporation (a) . . . . . . . . . . . . . . . . . . . . 2,800 245,700
Oracle System Corporation (a) . . . . . . . . . . . . . . . . . . 6,500 275,438
------------
521,138
STEEL - (0.9%)
Texas Industries, Inc.. . . . . . . . . . . . . . . . . . . . . . 4,300 227,900
------------
TELECOMMUNICATIONS - (1.8%)
Sprint Corporation. . . . . . . . . . . . . . . . . . . . . . . . 8,000 319,000
Tellabs, Inc.(a). . . . . . . . . . . . . . . . . . . . . . . . . 4,000 148,000
------------
467,000
TRANSPORTATION - (1.0%)
Burlington Northern Santa Fe. . . . . . . . . . . . . . . . . . . 3,300 257,400
------------
TOTAL COMMON STOCKS - (COST $14,911,378) 69.9% 18,404,692
------------
</TABLE>
See notes to financial statements.
35
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ------ ---- ------ -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
INDUSTRIALS - (5.8%)
BP America, Inc.. . . . . . . . . . . . . . . . 8.500% 04/15/2001 $250,000 $ 280,027
duPont (E.I.) deNemours . . . . . . . . . . . . 8.650% 12/01/1997 250,000 263,383
Mobil Corporation . . . . . . . . . . . . . . . 7.250% 03/27/2003 1,000,000 991,250
----------
TOTAL CORPORATE BONDS - (COST $1,502,259) 5.8% 1,534,660
----------
GOVERNMENT AND AGENCY SECURITIES
FEDERAL AGENCY - (1.6%)
Government National Mortgage Association. . . . 6.000% 11/15/2008 146,267 145,216
Government National Mortgage Association. . . . 6.500% 10/15/2008 146,609 147,937
Government National Mortgage Association. . . . 7.000% 10/15/2008 137,905 141,093
----------
434,246
U.S. GOVERNMENT SECURITIES - (10.2%)
United States Treasury Note . . . . . . . . . . 5.375% 05/31/1998 500,000 501,640
United States Treasury Note . . . . . . . . . . 6.375% 08/15/2002 500,000 524,295
United States Treasury Note . . . . . . . . . . 7.500% 01/31/1997 500,000 511,795
United States Treasury Bond . . . . . . . . . . 7.250% 08/15/2022 1,000,000 1,156,560
----------
2,694,290
----------
TOTAL GOVERNMENT AND AGENCY
SECURITIES - (Cost $2,952,975) 11.8% 3,128,536
----------
<CAPTION>
MATURITY
AMOUNT
------
<S> <C>
SHORT TERM INVESTMENT
Repurchase Agreement - (12.9%)
State Street Bank and Trust Company (b) . . . . 4.250% 01/02/1996 $ 3,417,613 3,416,000
----------
TOTAL SHORT TERM INVESTMENT -(COST $3,416,000) 12.9% 3,416,000
----------
TOTAL INVESTMENTS - (Cost $22,782,612) 100.4% 26,483,888
OTHER ASSETS LESS LIABILITIES - (0.4)% (104,180)
------ ----------
NET ASSETS - 100.0% $ 26,379,708
------ ----------
------ ----------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 12/29/95, is fully collateralized by a
United States Treasury Bond, 10.75%, 8/15/05, with a value of $3,486,659.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
36
<PAGE>
VARIABLE INVESTORS SERIES TRUST
TILT UTILITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
ELECTRIC UTILITIES - (37.8%)
American Electric Power, Inc. . . . . . . . . . . . . . . . . . 7,900 $ 319,950
Atlantic Energy, Inc. . . . . . . . . . . . . . . . . . . . . . 31,300 602,525
Boston Edison Company . . . . . . . . . . . . . . . . . . . . . 900 26,550
Central & South West Corporation. . . . . . . . . . . . . . . . 24,900 694,087
Consolidated Edison Company . . . . . . . . . . . . . . . . . . 22,600 723,200
Delmarva Power & Light Company. . . . . . . . . . . . . . . . . 28,600 650,650
DQE, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,100 495,075
Entergy Corporation . . . . . . . . . . . . . . . . . . . . . . 17,200 503,100
LG & E Energy Corporation . . . . . . . . . . . . . . . . . . . 5,100 215,475
Long Island Lighting Company. . . . . . . . . . . . . . . . . . 25,700 420,837
Northeast Utilities . . . . . . . . . . . . . . . . . . . . . . 10,300 251,062
Ohio Edison Company . . . . . . . . . . . . . . . . . . . . . . 30,700 721,450
Portland General Corporation. . . . . . . . . . . . . . . . . . 2,700 78,638
Rochester Gas & Electric Corporation. . . . . . . . . . . . . . 6,100 138,013
San Diego Gas & Electric Company. . . . . . . . . . . . . . . . 7,300 173,375
Unicom Corporation. . . . . . . . . . . . . . . . . . . . . . . 1,100 36,025
----------
6,050,012
GAS & PIPELINE UTILITIES - (7.5%)
Consolidated Natural Gas Company. . . . . . . . . . . . . . . . 2,900 131,588
Pacific Enterprises . . . . . . . . . . . . . . . . . . . . . . 24,400 689,300
Panhandle Eastern Corporation . . . . . . . . . . . . . . . . . 13,600 379,100
----------
1,199,988
TELEPHONE - (53.1%)
Alltel Corporation. . . . . . . . . . . . . . . . . . . . . . . 20,400 601,800
Ameritech Corporation . . . . . . . . . . . . . . . . . . . . . 13,300 784,700
AT&T Corporation. . . . . . . . . . . . . . . . . . . . . . . . 9,500 615,125
Bell Atlantic Corporation . . . . . . . . . . . . . . . . . . . 10,500 702,187
Bellsouth Corporation . . . . . . . . . . . . . . . . . . . . . 17,400 756,900
Century Telephone Enterprises, Inc. . . . . . . . . . . . . . . 20,700 657,225
Frontier Corporation. . . . . . . . . . . . . . . . . . . . . . 17,700 531,000
GTE Corporation . . . . . . . . . . . . . . . . . . . . . . . . 16,900 743,600
NYNEX Corporation . . . . . . . . . . . . . . . . . . . . . . . 13,700 739,800
Pacific Telesis Group . . . . . . . . . . . . . . . . . . . . . 22,600 759,925
SBC Communications, Inc.. . . . . . . . . . . . . . . . . . . . 12,600 724,500
Southern N E Telecommunications Corporation . . . . . . . . . . 6,900 274,275
Sprint Corporation. . . . . . . . . . . . . . . . . . . . . . . 15,700 626,038
----------
8,517,075
----------
TOTAL COMMON STOCKS - (COST $12,953,973) 98.4% 15,767,075
----------
</TABLE>
See notes to financial statements.
37
<PAGE>
VARIABLE INVESTORS SERIES TRUST
TILT UTILITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST
AND TITLE OF ISSUE RATE SHARES VALUE
------------------ -------- ------ -----
<S> <C> <C> <C> <C>
MUTUAL FUNDS - (1.2%)
Dreyfus Cash Management Plus (a). . . . . . . . 5.694% 190,764 $ 190,764
------------
TOTAL MUTUAL FUNDS - (COST $190,764) 1.2% 190,764
------------
TOTAL INVESTMENTS - (COST $13,144,737) 99.6% 15,957,839
OTHER ASSETS LESS LIABILITIES - 0.4% 60,471
------ ------------
NET ASSETS - 100.0% $ 16,018,310
------ ------------
------ ------------
</TABLE>
(a) Interest rate shown is the 7 day yield as of December 31, 1995.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
38
<PAGE>
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY SECURITIES
FEDERAL AGENCY - (2.4%)
Tennessee Valley Authority. . . . . . . . . . 6.375% 06/15/2005 $ 270,000 $ 278,978
------------
MORTGAGE BACKED SECURITIES - (23.4%)
Federal Home Loan Mortgage Corporation. . . . 8.500% 01/01/2003 267,104 275,016
Federal Home Loan Mortgage Corporation. . . . 9.000% 06/01/2016 382,851 403,669
Federal National Mortgage Association . . . . 6.500% 09/01/2008 254,290 255,338
Federal National Mortgage Association . . . . 10.000% 04/01/2020 154,384 169,726
Federal National Mortgage Association . . . . 12.500% 05/01/2015 691,455 800,455
Government National Mortgage Association. . . 7.500% 04/15/2024 279,998 288,223
Government National Mortgage Association. . . 9.000% 01/15/2008 491,481 521,564
------------
2,713,991
U.S. GOVERNMENT SECURITIES - (45.5%)
United States Treasury Note . . . . . . . . . 5.875% 11/15/2005 330,000 337,528
United States Treasury Note . . . . . . . . . 6.125% 05/31/1997 880,000 891,274
United States Treasury Note . . . . . . . . . 6.500% 08/15/1997 525,000 535,663
United States Treasury Note . . . . . . . . . 6.500% 04/30/1999 450,000 466,594
United States Treasury Note . . . . . . . . . 6.500% 08/15/2005 365,000 388,953
United States Treasury Note . . . . . . . . . 6.875% 07/31/1999 455,000 477,750
United States Treasury Note . . . . . . . . . 7.500% 05/15/2002 120,000 133,200
United States Treasury Note . . . . . . . . . 7.875% 08/15/2001 1,000,000 1,118,436
United States Treasury Bond . . . . . . . . . 6.250% 08/15/2023 670,000 688,844
United States Treasury Bond . . . . . . . . . 7.500% 11/15/2024 115,000 138,179
United States Treasury Bond . . . . . . . . . 7.625% 02/15/2025 90,000 109,997
------------
5,286,418
------------
TOTAL GOVERNMENT AND AGENCY
SECURITIES - (COST $7,930,234) 71.3% 8,279,387
------------
CORPORATE BONDS
BROADCASTING - (2.2%)
Viacom, Inc.. . . . . . . . . . . . . . . . . 7.625% 01/15/2016 255,000 257,436
------------
FOOD & BEVERAGES - (2.5%)
Coca Cola Enterprises, Inc. (a) . . . . . . . 6.785% 06/20/2020 1,505,000 295,284
------------
PRINTING & PUBLISHING - (2.9%)
News America Holdings, Inc. . . . . . . . . . 7.750% 02/01/2024 320,000 334,464
------------
TELECOMMUNICATIONS - (5.6%)
Bellsouth Telecommunications (a). . . . . . . 6.730% 12/15/2095 700,000 185,578
Tele Communications, Inc. . . . . . . . . . . 9.800% 02/01/2012 385,000 460,068
------------
645,646
------------
TOTAL CORPORATE BONDS - (COST $1,430,664) 13.2% 1,532,830
------------
</TABLE>
See notes to financial statements.
39
<PAGE>
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
OTHER MORTGAGES
COLLATERALIZED MORTGAGE OBLIGATIONS - (3.3%)
Community Program Loan Trust 1987 A . . . . . 4.500% 10/01/2018 $ 425,000 $ 380,884
------------
FEDERAL HOUSING AUTHORITY - (6.2%)
FHA Project Loan. . . . . . . . . . . . . . . 3.025% 11/01/2006 490,573 440,603
FHA Project Loan. . . . . . . . . . . . . . . 7.500% 11/15/2030 275,000 279,469
------------
720,072
------------
TOTAL OTHER MORTGAGES - (COST $1,033,568) 9.5% 1,100,956
------------
MATURITY
AMOUNT
------
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT (b) - (5.0%)
State Street Bank and Trust Company . . . . . 2.250% 01/02/1996 $ 584,146 584,000
------------
TOTAL SHORT TERM INVESTMENT - (COST $584,000) 5.0% 584,000
------------
TOTAL INVESTMENTS - (COST $10,978,466) 99.0% 11,497,173
OTHER ASSETS LESS LIABILITIES - 1.0% 120,882
------ ------------
NET ASSETS - 100.0% $ 11,618,055
------ ------------
------ ------------
</TABLE>
(a) Zero coupon bond. Interest rate shown represents yield to maturity.
(b) The repurchase agreement, dated 12/29/95, is fully collateralized by a
United States Treasury Bond, 10.75%, 8/15/05, with a value of $599,931.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
40
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AUSTRALIA - (3.4%)
Broken Hill Proprietary Company. . . . . . . . . . . . . . 19,795 $279,549
CRA Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 2,400 35,213
Memtec Ltd.. . . . . . . . . . . . . . . . . . . . . . . . 70,349 112,420
National Australia Bank. . . . . . . . . . . . . . . . . . 11,754 105,711
WMC Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 15,000 96,328
--------
629,221
BELGIUM - (1.3%)
Bekaert SA . . . . . . . . . . . . . . . . . . . . . . . . 295 243,077
--------
CANADA - (3.9%)
Brascan Ltd. . . . . . . . . . . . . . . . . . . . . . . . 4,000 70,304
Hudsons Bay Company. . . . . . . . . . . . . . . . . . . . 2,555 36,721
Loewen Group, Inc.. . . . . . . . . . . . . . . . . . . . 3,500 88,109
Potash Corporation Saskatchewan, Inc.. . . . . . . . . . . 3,520 249,403
Quebecor . . . . . . . . . . . . . . . . . . . . . . . . . 17,839 266,181
--------
710,718
FRANCE - (1.7%)
Accor. . . . . . . . . . . . . . . . . . . . . . . . . . . 154 19,938
Carrefour. . . . . . . . . . . . . . . . . . . . . . . . . 100 60,670
Credit Commerce France . . . . . . . . . . . . . . . . . . 2,543 129,772
Peugeot SA . . . . . . . . . . . . . . . . . . . . . . . . 345 45,512
Society Elf Aquitaine. . . . . . . . . . . . . . . . . . . 652 48,038
--------
303,930
GERMANY - (0.5%)
Bayer AG . . . . . . . . . . . . . . . . . . . . . . . . . 270 71,241
Schering AG. . . . . . . . . . . . . . . . . . . . . . . . 350 23,186
--------
94,427
HONG KONG - (1.9%)
HSBC Holdings. . . . . . . . . . . . . . . . . . . . . . . 18,000 272,357
Sime Darby HK. . . . . . . . . . . . . . . . . . . . . . . 88,000 84,785
--------
357,142
ITALY - (0.6%)
Telecom Italia (a) . . . . . . . . . . . . . . . . . . . . 32,000 56,318
Telecom Italia Mobilaire . . . . . . . . . . . . . . . . . 32,000 49,769
--------
106,087
JAPAN - (31.3%)
Advantest. . . . . . . . . . . . . . . . . . . . . . . . . 2,000 102,663
Bridgestone Corporation. . . . . . . . . . . . . . . . . . 12,000 190,605
Canon, Inc.. . . . . . . . . . . . . . . . . . . . . . . . 33,000 597,676
Daifuku Company . . . . . . . . . . . . . . . . . . . . . 3,000 42,421
Fanuc. . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 86,586
Fuji Coca Cola Bottling. . . . . . . . . . . . . . . . . . 15,000 162,712
Fuji Photo Film Company. . . . . . . . . . . . . . . . . . 14,000 404,068
</TABLE>
See notes to financial statements.
41
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
JAPAN - (CONTINUED)
Hitachi. . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 $110,799
Jusco Company. . . . . . . . . . . . . . . . . . . . . . . 10,000 260,533
Kita Kyushu Coca . . . . . . . . . . . . . . . . . . . . . 5,000 111,864
Mitsui Marine and Fire . . . . . . . . . . . . . . . . . . 48,000 342,160
Mori Seiki Company . . . . . . . . . . . . . . . . . . . . 2,000 45,133
NEC Corporation. . . . . . . . . . . . . . . . . . . . . . 18,000 219,661
NGK Spark Plug Company . . . . . . . . . . . . . . . . . . 22,000 276,998
Nichido Fire and Marine. . . . . . . . . . . . . . . . . . 64,000 514,479
Nichiei Company. . . . . . . . . . . . . . . . . . . . . . 2,000 149,153
Rohm Company . . . . . . . . . . . . . . . . . . . . . . . 3,000 169,395
Sharp Corporation. . . . . . . . . . . . . . . . . . . . . 37,000 591,283
Sodick Company (a) . . . . . . . . . . . . . . . . . . . . 5,000 46,973
Sony Corporation . . . . . . . . . . . . . . . . . . . . . 10,200 611,506
Sumitomo Marine and Fire . . . . . . . . . . . . . . . . . 65,000 533,850
Toshiba Corporation. . . . . . . . . . . . . . . . . . . . 15,000 117,530
----------
5,688,048
MALAYSIA - (1.1%)
Genting Berhad . . . . . . . . . . . . . . . . . . . . . . 12,000 100,169
Sime Darby Berhad. . . . . . . . . . . . . . . . . . . . . 35,000 93,023
----------
193,192
NETHERLANDS - (0.5%)
Akzo Nv. . . . . . . . . . . . . . . . . . . . . . . . . . 520 60,143
Philips Electronic . . . . . . . . . . . . . . . . . . . . 950 34,337
----------
94,480
SPAIN - (0.3%)
Repsol SA. . . . . . . . . . . . . . . . . . . . . . . . . 1,470 48,172
----------
SWEDEN - (3.2%)
Asea AB. . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 97,294
Astra AB Series A . . . . . . . . . . . . . . . . . . . . 1,500 59,867
Astra AB Series B . . . . . . . . . . . . . . . . . . . . 1,890 74,863
Electrolux AB. . . . . . . . . . . . . . . . . . . . . . . 2,000 82,082
Elekta . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500 100,155
Volvo AB . . . . . . . . . . . . . . . . . . . . . . . . . 8,100 165,911
580,172
SWITZERLAND - (1.5%)
Ciba Geigy AG. . . . . . . . . . . . . . . . . . . . . . . 80 70,394
Nestle SA. . . . . . . . . . . . . . . . . . . . . . . . . 180 199,116
----------
269,510
UNITED KINGDOM - (2.8%)
Antofagasta Holdings . . . . . . . . . . . . . . . . . . . 11,000 48,688
Compass Group. . . . . . . . . . . . . . . . . . . . . . . 6,700 50,986
Hanson . . . . . . . . . . . . . . . . . . . . . . . . . . 5,300 15,804
Lloyds TSB Group . . . . . . . . . . . . . . . . . . . . . 21,902 112,760
Pearson. . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 106,515
</TABLE>
See notes to financial statements.
42
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
UNITED KINGDOM - (CONTINUED)
Severn Trent . . . . . . . . . . . . . . . . . . . . . . . 4,400 $ 46,979
Smithkline Beecham . . . . . . . . . . . . . . . . . . . . 8,663 95,523
Williams Holdings. . . . . . . . . . . . . . . . . . . . . 5,900 30,009
----------
507,264
UNITED STATES - (36.9%)
Agco Corporation . . . . . . . . . . . . . . . . . . . . . 4,500 229,500
AHI Healthcare Systems, Inc. (a) . . . . . . . . . . . . . 17,500 100,625
Apple South, Inc.. . . . . . . . . . . . . . . . . . . . . 8,000 172,000
Applebees International, Inc. . . . . . . . . . . . . . . 6,000 136,500
Avant Corporation (a). . . . . . . . . . . . . . . . . . . 5,250 101,062
Cidco, Inc. (a). . . . . . . . . . . . . . . . . . . . . . 4,500 114,750
Devry, Inc., Delaware (a). . . . . . . . . . . . . . . . . 8,000 216,000
Epic Design Technology, Inc. (a) . . . . . . . . . . . . . 8,000 168,000
Expert Software, Inc. (a). . . . . . . . . . . . . . . . . 8,300 116,200
Gilead Sciences, Inc. (a). . . . . . . . . . . . . . . . . 4,000 128,000
Health Management Associates (a) . . . . . . . . . . . . . 9,000 235,125
HFS, Inc. (a). . . . . . . . . . . . . . . . . . . . . . . 3,500 286,125
Inso Corporation (a) . . . . . . . . . . . . . . . . . . . 5,400 229,500
Mattson Technology, Inc. (a) . . . . . . . . . . . . . . . 8,000 120,000
Medisense, Inc. (a). . . . . . . . . . . . . . . . . . . . 8,000 253,000
Mercury Interactive Corporation (a). . . . . . . . . . . . 6,000 109,500
Microchip Technology, Inc. (a) . . . . . . . . . . . . . . 5,500 200,750
Netmanage, Inc. (a). . . . . . . . . . . . . . . . . . . . 7,000 162,750
Newpark Resource, Inc. . . . . . . . . . . . . . . . . . . 6,300 140,175
Office Max, Inc. . . . . . . . . . . . . . . . . . . . . . 9,450 211,444
Outback Steakhouse, Inc. (a) . . . . . . . . . . . . . . . 5,000 179,375
Project Software & Development, Inc. (a) . . . . . . . . . 9,000 313,875
Pure Software, Inc. (a). . . . . . . . . . . . . . . . . . 7,000 225,750
Railtex, Inc. (a). . . . . . . . . . . . . . . . . . . . . 5,600 117,600
Seer Technologies, Inc. (a). . . . . . . . . . . . . . . . 7,500 93,750
Staples, Inc. (a). . . . . . . . . . . . . . . . . . . . . 7,000 170,625
Station Casinos, Inc. (a). . . . . . . . . . . . . . . . . 10,000 146,250
Studio Plus Hotels, Inc. (a) . . . . . . . . . . . . . . . 6,000 154,500
Swift Transportation, Inc. (a) . . . . . . . . . . . . . . 10,000 152,500
Synopsys, Inc. (a) . . . . . . . . . . . . . . . . . . . . 8,000 304,000
TCF Financial Corporation. . . . . . . . . . . . . . . . . 8,000 265,000
Teradyne, Inc. (a) . . . . . . . . . . . . . . . . . . . . 6,000 150,000
Thermedics, Inc. (a) . . . . . . . . . . . . . . . . . . . 8,000 222,000
Verity, Inc. (a). . . . . . . . . . . . . . . . . . . . . 8,000 354,000
Wabash National Corporation. . . . . . . . . . . . . . . . 5,000 111,250
Winstar Communications, Inc. (a) . . . . . . . . . . . . . 10,000 171,250
Xilinx, Inc. (a) . . . . . . . . . . . . . . . . . . . . . 5,000 152,500
----------
6,715,231
----------
TOTAL COMMON STOCKS - (COST $13,277,647). . . . . . . . . . 90.9% 16,540,671
----------
</TABLE>
See notes to financial statements.
43
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C> <C> <C>
RIGHTS
AUSTRALIA - (0.0%)
CRA Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . 180 $ 2,595
-----------
TOTAL RIGHTS - (COST $0) 0.0% 2,595
-----------
INTEREST MATURITY PRINCIPAL
RATE DATE AMOUNT
---- ---- ------
SHORT TERM INVESTMENT
UNITED STATES - (8.3%)
Federal Home Loan Mortgage Corporation. 5.750% 01/02/1996 $1,512,000 1,511,759
-----------
TOTAL SHORT TERM INVESTMENT - (COST $1,511,759) 8.3% 1,511,759
-----------
TOTAL INVESTMENTS - (COST $14,789,406) 99.2% 18,055,025
OTHER ASSETS LESS LIABILITIES - 0.8% 135,707
------ -----------
NET ASSETS - 100.0% $18,190,732
------ -----------
------ -----------
</TABLE>
(a) Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
44
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
ANALYSIS OF INDUSTRY CLASSIFICATIONS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS VALUE
- -------- ---------- -----
<S> <C> <C>
Agricultural Machinery . . . . . . . . . 1.3% $ 229,500
Appliances . . . . . . . . . . . . . . . 0.6 116,419
Automobiles . . . . . . . . . . . . . . 1.2 211,423
Automotive . . . . . . . . . . . . . . . 0.4 84,785
Banking . . . . . . . . . . . . . . . . 2.8 507,840
Broadcasting/Publishing . . . . . . . . 2.0 372,696
Business/Public . . . . . . . . . . . . 0.2 46,979
Chemicals . . . . . . . . . . . . . . . 3.3 605,846
Commercial Services . . . . . . . . . . 1.7 304,109
Computer Services . . . . . . . . . . . 2.5 455,062
Conglomerates . . . . . . . . . . . . . 1.0 179,130
Construction Materials . . . . . . . . . 0.2 30,009
Drugs & Health Care . . . . . . . . . . 4.6 835,220
Ecological Services & Equipment . . . . 0.8 140,175
Electrical Equipment . . . . . . . . . . 0.6 114,750
Electric Utilities . . . . . . . . . . . 0.5 97,294
Electronics . . . . . . . . . . . . . . 15.8 2,854,674
Energy Sources . . . . . . . . . . . . . 2.1 375,759
Entertainment . . . . . . . . . . . . . 0.8 146,250
Fertilizer . . . . . . . . . . . . . . . 1.4 249,403
Financial Services . . . . . . . . . . . 11.3 2,038,670
Food & Beverages . . . . . . . . . . . . 1.1 199,116
Gold Mining . . . . . . . . . . . . . . 0.2 48,688
Hospital Management . . . . . . . . . . 1.3 235,125
Hotels & Restaurants . . . . . . . . . . 2.5 460,563
Industrial Components . . . . . . . . . 3.9 710,680
Insurance . . . . . . . . . . . . . . . 5.8 1,048,329
Insurance Contracts . . . . . . . . . . 1.9 342,160
Leisure/Tourism . . . . . . . . . . . . 0.5 100,169
Machinery & Equipment . . . . . . . . . 0.7 134,528
Machinery Engineering . . . . . . . . . 0.6 112,420
Merchandising . . . . . . . . . . . . . 4.1 739,992
Metals . . . . . . . . . . . . . . . . . 0.7 134,137
Office Equipment . . . . . . . . . . . . 3.3 597,676
Packaging . . . . . . . . . . . . . . . 1.5 274,576
Restaurants . . . . . . . . . . . . . . 3.0 538,861
Software . . . . . . . . . . . . . . . . 9.5 1,723,325
Telecommunications . . . . . . . . . . . 1.5 277,337
Transportation . . . . . . . . . . . . . 1.2 228,850
Trucking & Freight Forwarding . . . . . 0.8 152,500
----- -----------
TOTAL . . . . . . . . . . . . . . . 99.2% $18,055,025
----- -----------
-----------
</TABLE>
See notes to financial statements.
45
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AIR TRANSPORTATION - (0.8%)
Atlas Air, Inc. (a). . . . . . . . . . . . . . . . . . . . 1,800 $30,150
-------
APPAREL - (4.3%)
Nautica Enterprises, Inc. (a). . . . . . . . . . . . . . . 1,200 52,500
St. John Knits, Inc. . . . . . . . . . . . . . . . . . . . 900 47,813
Tommy Hilfiger Corporation (a) . . . . . . . . . . . . . . 1,500 63,562
-------
163,875
Auto Finance - (0.6%)
Oxford Resources Corporation (a) . . . . . . . . . . . . . 1,100 24,750
-------
AUTOMATED DATA COLLECTION - (1.4%)
Zebra Technologies Corporation (a) . . . . . . . . . . . . 1,600 54,400
-------
BIOTECHNOLOGY - (1.2%)
Idexx Labs, Inc. (a) . . . . . . . . . . . . . . . . . . . 1,000 47,000
-------
CLIENT-SERVER SOFTWARE - (2.8%)
Hyperion Software Corporation (a). . . . . . . . . . . . . 1,600 34,000
Project Software & Development, Inc. (a) . . . . . . . . . 1,100 38,362
Remedy Corporation (a) . . . . . . . . . . . . . . . . . . 600 35,550
-------
107,912
COMMERCIAL SERVICES - (2.5%)
Acxiom Corporation (a) . . . . . . . . . . . . . . . . . . 1,500 41,063
Gartner Group, Inc. (a). . . . . . . . . . . . . . . . . . 1,100 52,662
-------
93,725
COMMUNICATION SERVICES - (2.1%)
Clear Channel Communications (a) . . . . . . . . . . . . . 1,200 52,950
LCI International, Inc. (a). . . . . . . . . . . . . . . . 1,300 26,650
-------
79,600
COMPONENTS - (1.1%)
Kemet Corporation (a). . . . . . . . . . . . . . . . . . . 1,700 40,588
-------
CONNECTORS - (0.7%)
Cable Design Technologies Corporation (a). . . . . . . . . 600 26,400
-------
CONSUMER PRODUCTS - (0.5%)
Cidco, Inc. (a). . . . . . . . . . . . . . . . . . . . . . 700 17,850
-------
CONSUMER SOFTWARE - (0.6%)
Davidson & Associates, Inc. (a). . . . . . . . . . . . . . 1,100 24,200
-------
CONTRACT MANUFACTURING - (1.1%)
Sanmina Corporation (a). . . . . . . . . . . . . . . . . . 800 41,500
-------
</TABLE>
See notes to financial statements.
46
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
CORRECTIONAL SERVICES - (2.3%)
Corrections Corporation of America (a) . . . . . . . . . . 2,400 $ 89,100
---------
DATACOMMUNICATIONS - (1.4%)
Global Village Communications (a). . . . . . . . . . . . . 1,300 25,188
Microcom, Inc. (a) . . . . . . . . . . . . . . . . . . . . 1,100 28,600
---------
53,788
DESIGN-MANUFACTURING AUTOMATION - (2.9%)
Cognex Corporation (a) . . . . . . . . . . . . . . . . . . 2,200 76,450
Epic Design Technology, Inc. (a) . . . . . . . . . . . . . 1,600 33,600
---------
110,050
DISTRIBUTED SYSTEM-HARDWARE & PERIPHERALS - (1.0%)
Stormedia, Inc. (a). . . . . . . . . . . . . . . . . . . . 1,000 36,500
---------
EMPLOYMENT SERVICE - (2.2%)
Accustaff, Inc. (a). . . . . . . . . . . . . . . . . . . . 1,400 61,600
Alternative Resources Corporation (a). . . . . . . . . . . 700 21,175
---------
82,775
ENVIRONMENTAL SERVICES - (2.8%)
Tetra Tech, Inc. (a) . . . . . . . . . . . . . . . . . . . 1,900 43,225
United Waste Systems, Inc. (a) . . . . . . . . . . . . . . 1,700 63,325
---------
106,550
GRAPHIC-IMAGE PROCESSING - (1.8%)
Electronics For Imaging, Inc. (a). . . . . . . . . . . . . 1,600 70,000
---------
HEALTH CARE-MANAGEMENT SERVICES - (1.3%)
Quintiles Transnational Corporation (a). . . . . . . . . . 1,200 49,200
---------
INFORMATION SYSTEMS - (0.8%)
Medic Computer Systems, Inc. (a) . . . . . . . . . . . . . 500 30,250
---------
LEISURE - (1.5%)
Regal Cinemas, Inc. (a). . . . . . . . . . . . . . . . . . 1,950 58,013
---------
MISCELLANEOUS - (0.6%)
Amresco Inc. . . . . . . . . . . . . . . . . . . . . . . . 1,800 22,950
---------
NETWORKING - (2.8%)
Alantec Corporation (a). . . . . . . . . . . . . . . . . . 800 46,600
Optical Data Systems, Inc. (a) . . . . . . . . . . . . . . 600 15,150
Shiva Corporation (a). . . . . . . . . . . . . . . . . . . 500 36,375
Transaction Systems Architects Inc. (a). . . . . . . . . . 300 9,637
---------
107,762
</TABLE>
See notes to financial statements.
47
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
NETWORKING SOFTWARE - (2.3%)
McAfee Associates, Inc. (a). . . . . . . . . . . . . . . . 1,350 $ 59,231
Netmanage, Inc. (a). . . . . . . . . . . . . . . . . . . . 1,200 27,900
---------
87,131
NON-DURABLES - (1.2%)
Blyth Industries, Inc. (a) . . . . . . . . . . . . . . . . 1,600 47,200
---------
PHARMACEUTICAL SERVICES - (2.1%)
Express Scripts, Inc. (a). . . . . . . . . . . . . . . . . 600 30,600
Omnicare, Inc. . . . . . . . . . . . . . . . . . . . . . . 1,100 49,225
---------
79,825
PHYSICIAN PRACTICE MANAGEMENT - (4.0%)
Compdent Corporation (a) . . . . . . . . . . . . . . . . . 700 29,050
Medpartners/Mullikin Inc. (a). . . . . . . . . . . . . . . 1,000 33,000
Phycor, Inc. (a) . . . . . . . . . . . . . . . . . . . . . 1,000 50,562
Physician Reliance Network, Inc. (a) . . . . . . . . . . . 1,000 39,750
---------
152,362
RESTAURANTS - (1.8%)
Boston Chicken, Inc. (a) . . . . . . . . . . . . . . . . . 1,400 44,975
Papa Johns International, Inc. (a) . . . . . . . . . . . . 600 24,713
---------
69,688
RETAIL-AUTOMOTIVE RELATED - (1.1%)
Discount Auto Parts, Inc. (a). . . . . . . . . . . . . . . 1,300 40,463
---------
RETAIL-CATALOG - (0.8%)
CDW Computer Centers, Inc. (a) . . . . . . . . . . . . . . 800 32,400
---------
RETAIL-OFFICE PRODUCTS - (1.8%)
Corporate Express, Inc. (a). . . . . . . . . . . . . . . . 1,200 36,150
U S Office Products Company (a). . . . . . . . . . . . . . 1,500 34,125
---------
70,275
RETAIL-SPECIALTY - (1.4%)
MSC Industrial Direct Inc. (a) . . . . . . . . . . . . . . 700 19,250
Sunglass Hut International, Inc. . . . . . . . . . . . . . 1,400 33,250
---------
52,500
SEMICONDUCTOR EQUIPMENT - (5.6%)
Credence Systems Corporation (a) . . . . . . . . . . . . . 1,100 25,162
Electroglas, Inc. (a). . . . . . . . . . . . . . . . . . . 2,000 49,000
FSI International, Inc. (a). . . . . . . . . . . . . . . . 1,500 30,375
GaSonics International Corporation (a) . . . . . . . . . . 1,450 19,575
Helix Technology Corporation (a) . . . . . . . . . . . . . 900 35,550
Integrated Process Equipment Corporation (a) . . . . . . . 800 18,800
Ultratech Stepper, Inc. (a). . . . . . . . . . . . . . . . 1,300 33,475
---------
211,937
</TABLE>
See notes to financial statements.
48
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
SEMICONDUCTOR MANUFACTURING - (3.2%)
Actel Corporation (a). . . . . . . . . . . . . . . . . . . 2,100 $ 22,575
Burr Brown (a) . . . . . . . . . . . . . . . . . . . . . . 1,000 25,500
DSP Communications, Inc. (a) . . . . . . . . . . . . . . . 900 39,262
S3, Inc. (a) . . . . . . . . . . . . . . . . . . . . . . . 2,000 35,250
---------
122,587
SERVICE-EQUIPMENT - (1.1%)
Input/Output, Inc. (a) . . . . . . . . . . . . . . . . . . 700 40,425
---------
SOFTWARE-GENERAL - (1.6%)
Inso Corporation (a) . . . . . . . . . . . . . . . . . . . 700 29,750
Rational Software Corporation (a). . . . . . . . . . . . . 1,400 31,325
---------
61,075
SUPPLIES - (3.3%)
Gulf South Medical Supply, Inc.. . . . . . . . . . . . . . 1,400 42,350
Physician Sales & Service, Inc. (a). . . . . . . . . . . . 2,900 82,650
---------
125,000
SURFACE TRANSPORTATION - (2.1%)
Fritz Company, Inc. (a). . . . . . . . . . . . . . . . . . 1,100 45,650
Wisconsin Central Transport Corporation (a). . . . . . . . 500 32,875
---------
78,525
SYSTEMS INTEGRATED VALUE ADDED RESELLERS - (1.5%)
Cambridge Technology Partners (a). . . . . . . . . . . . . 1,000 57,500
---------
TELECOMMUNICATION EQUIPMENT - (2.1%)
Allen Group, Inc.. . . . . . . . . . . . . . . . . . . . . 1,200 26,850
Coherent Communications System Corporation (a) . . . . . . 1,500 28,875
Tel Corporation (a). . . . . . . . . . . . . . . . . . . . 1,400 25,900
---------
81,625
TRANSACTION PROCESSING - (0.5%)
National Data Corporation. . . . . . . . . . . . . . . . . 800 19,800
---------
VOICE-CALL TRANSACTION PROCESSING - (2.1%)
Aspect Telecommunications Corporation (a). . . . . . . . . 1,500 50,250
Comverse Technology, Inc. (a). . . . . . . . . . . . . . . 1,400 28,000
---------
78,250
---------
TOTAL COMMON STOCKS - (COST $2,662,571) 80.7% 3,077,456
---------
</TABLE>
See notes to financial statements.
49
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY MATURITY
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ -------- -------- -------- -----
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
Repurchase Agreement - (13.8%)
State Street Bank and Trust Company (b) 2.250% 01/02/1996 $ 527,132 $ 527,000
----------
TOTAL SHORT TERM INVESTMENT - (COST $527,000) 13.8% 527,000
----------
TOTAL INVESTMENTS - (COST $3,189,571) 94.5% 3,604,456
OTHER ASSETS LESS LIABILITIES - 5.5% 208,646
------ ----------
NET ASSETS - 100.0% $3,813,102
------ ----------
------ ----------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 12/29/95, is fully collateralized by a
United States Treasury Bond, 10.75%, 8/15/05, with a value of $543,467.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
50
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE - (5.8%)
GRC International, Inc. (a). . . . . . . . . . . . . . . . 5,000 $ 191,875
---------
APPAREL & TEXTILES - (0.9%)
Intimate Brands, Inc. . . . . . . . . . . . . . . . . . . 2,000 30,000
--------
BANKS AND SAVINGS & LOANS - (8.4%)
Ahmanson H F and Company . . . . . . . . . . . . . . . . . 500 13,250
Bankamerica Corporation. . . . . . . . . . . . . . . . . . 1,300 84,175
Crestar Financial Corporation. . . . . . . . . . . . . . . 1,000 59,125
First Interstate Bancorp . . . . . . . . . . . . . . . . . 800 109,200
Great Western Financial Corporation. . . . . . . . . . . . 500 12,750
--------
278,500
COMMUNICATIONS & MEDIA - (3.4%)
Comcast Corporation. . . . . . . . . . . . . . . . . . . . 3,000 54,562
Tele Communications, Inc.. . . . . . . . . . . . . . . . . 3,000 59,625
--------
114,187
COMPUTERS & BUSINESS EQUIPMENT - (0.8%)
International Business Machines Corporation. . . . . . . . 300 27,525
--------
DRUGS & HEALTH CARE - (0.5%)
Acuson (a) . . . . . . . . . . . . . . . . . . . . . . . . 1,300 16,088
--------
ELECTRONICS - (7.7%)
Honeywell, Inc. . . . . . . . . . . . . . . . . . . . . . 1,500 72,937
Micron Technology, Inc. . . . . . . . . . . . . . . . . . 1,500 59,438
Motorola, Inc. . . . . . . . . . . . . . . . . . . . . . . 1,300 74,100
Texas Instruments, Inc.. . . . . . . . . . . . . . . . . . 1,000 51,750
--------
258,225
ENGINEERING & CONSTRUCTION - (2.3%)
Stone & Webster, Inc.. . . . . . . . . . . . . . . . . . . 2,100 75,337
--------
HEALTHCARE - (3.2%)
Foxmeyer Health Corporation. . . . . . . . . . . . . . . . 4,000 107,000
--------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS - (0.0%)
Beneficial Franklin Retail Store (a) . . . . . . . . . . . 333 916
--------
INDUSTRIAL MANUFACTURING & PROCESSING - (2.4%)
Corning, Inc.. . . . . . . . . . . . . . . . . . . . . . . 2,500 80,000
--------
INSURANCE - (1.8%)
USF & G Corporation. . . . . . . . . . . . . . . . . . . . 3,500 59,063
--------
LEISURE & ENTERTAINMENT - (1.5%)
Acclaim Entertainment, Inc. (a). . . . . . . . . . . . . . 4,000 49,500
--------
</TABLE>
See notes to financial statements.
51
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
METALS & MINING - (20.1%)
Coeur D'Alene Mines Corporation. . . . . . . . . . . . . . 5,000 $ 85,625
Hecla Mining Company (a) . . . . . . . . . . . . . . . . . 8,000 55,000
Homestake Mining Company . . . . . . . . . . . . . . . . . 8,000 125,000
Inco, Ltd. . . . . . . . . . . . . . . . . . . . . . . . . 2,000 66,500
Newmont Mining Corporation . . . . . . . . . . . . . . . . 3,000 135,750
Pegasus Gold, Inc. (a) . . . . . . . . . . . . . . . . . . 6,000 83,250
Placer Dome, Inc.. . . . . . . . . . . . . . . . . . . . . 5,000 120,625
---------
671,750
OIL SERVICES - (2.7%)
Baker Hughes, Inc. . . . . . . . . . . . . . . . . . . . . 2,000 48,750
Halliburton Company. . . . . . . . . . . . . . . . . . . . 800 40,500
---------
89,250
PAPER - (3.0%)
Boise Cascade Corporation. . . . . . . . . . . . . . . . . 2,000 69,250
James River Corporation. . . . . . . . . . . . . . . . . . 1,300 31,362
---------
100,612
PUBLISHING - (1.1%)
Time Warner, Inc. . . . . . . . . . . . . . . . . . . . . 1,000 37,875
---------
STEEL - (8.9%)
Bethleham Steel Corporation (a). . . . . . . . . . . . . . 7,000 98,000
LTV Corporation (a). . . . . . . . . . . . . . . . . . . . 7,000 96,250
USX U.S. Steel . . . . . . . . . . . . . . . . . . . . . . 3,000 92,250
WHX Corporation (a). . . . . . . . . . . . . . . . . . . . 800 8,700
---------
295,200
TELEPHONE - (1.3%)
Airtouch Communications, Inc. (a). . . . . . . . . . . . . 1,500 42,375
---------
TOTAL COMMON STOCKS - (COST $2,431,417) 75.8% 2,525,278
---------
</TABLE>
See notes to financial statements.
52
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH AND INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY MATURITY
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ -------- -------- -------- -----
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENTS
REPURCHASE AGREEMENT - (18.8%)
State Street Bank and Trust Company (b). . 5.400% 01/02/1996 $ 627,376 $ 627,000
----------
PRINCIPAL
AMOUNT
------
U.S. GOVERNMENT SECURITIES - (5.9%)
United States Treasury Bill. . . . . . . . 5.340% 02/29/1996 $ 200,000 198,250
----------
TOTAL SHORT TERM INVESTMENTS - (COST $825,250) 24.7% 825,250
----------
TOTAL INVESTMENTS - (COST $3,256,667) 100.5% 3,350,528
OTHER ASSETS LESS LIABILITIES - (0.5)% (15,772)
------ ----------
NET ASSETS - 100.0% $3,334,756
------ ----------
------ ----------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 12/29/95, is fully collateralized by a
United States Treasury Bond, 10.75%, 8/15/05, with a value of $642,279.
The percentage shown for each investment category is the total value of that
category as a percent of the total Net Assets of the Portfolio.
See notes to financial statements.
53
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
CASH COMMON
MANAGEMENT STOCK
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value. . . . . . . . . . . . . $ 9,423,661 $ 40,252,520
Investments - repurchase agreements . . . . . . . . . . . . 790,000 3,256,000
Foreign currency holdings (Cost $1,146) . . . . . . . . . . 0 0
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . 948 969
Income receivable . . . . . . . . . . . . . . . . . . . . . 22,529 36,460
Receivable for securities sold. . . . . . . . . . . . . . . 0 0
Unrealized appreciation on forward currency contracts . . . 0 0
Receivable for trust shares sold. . . . . . . . . . . . . . 29,051 83,076
Other assets. . . . . . . . . . . . . . . . . . . . . . . . 3 12
Due from adviser. . . . . . . . . . . . . . . . . . . . . . 7,819 0
------------ -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . 10,274,011 43,629,037
LIABILITIES
Payable for securities purchased. . . . . . . . . . . . . . 0 599,640
Unrealized depreciation on forward currency contracts . . . 0 0
Payable to custodian. . . . . . . . . . . . . . . . . . . . 0 0
Advisory fee payable. . . . . . . . . . . . . . . . . . . . 4,293 27,957
Accounts payable and accrued expenses . . . . . . . . . . . 51,342 53,393
Payable for trust shares redeemed . . . . . . . . . . . . . 122,653 29,323
------------ -------------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . 178,288 710,313
------------ -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 10,095,723 $ 42,918,724
------------ -------------
------------ -------------
NET ASSETS
Capital paid - in . . . . . . . . . . . . . . . . . . . . . $ 10,095,723 $ 35,214,338
Undistributed (distributions in excess of) net
investment income. . . . . . . . . . . . . . . . . . . . . 0 2,498
Accumulated net realized gain (loss) on
investments and foreign currency transactions. . . . . . . 0 237,212
Net unrealized appreciation of:
Investments. . . . . . . . . . . . . . . . . . . . . . . . 0 7,464,676
Foreign currency . . . . . . . . . . . . . . . . . . . . . 0 0
------------ -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 10,095,723 $ 42,918,724
------------ -------------
------------ -------------
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest outstanding,
unlimited number of shares authorized without par value). . $ 1,000 $ 25,866
Total shares outstanding at end of period . . . . . . . . . 10,095,723 1,659,267
Cost of investment securities . . . . . . . . . . . . . . . $ 10,213,661 $ 36,043,844
</TABLE>
See notes to financial statements.
54
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
HIGH INCOME MULTIPLE TILT U.S. WORLD
BOND STRATEGIES UTILITY GOVERNMENT BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments - securities, at value. . . . . . . . . . $ 8,589,168 $ 23,067,888 $ 15,957,839 $ 10,913,173 $ 18,055,025
Investments - repurchase agreements . . . . . . . . . 0 3,416,000 0 584,000 0
Foreign currency holdings (Cost $1,146) . . . . . . . 0 0 0 0 1,143
Cash. . . . . . . . . . . . . . . . . . . . . . . . . 0 605 0 797 86,584
Income receivable . . . . . . . . . . . . . . . . . . 207,819 102,317 93,889 155,070 13,874
Receivable for securities sold. . . . . . . . . . . . 109,092 0 0 1,809 0
Unrealized appreciation on forward currency contracts 0 0 0 0 22,878
Receivable for trust shares sold. . . . . . . . . . . 22,212 134,375 54,766 39,446 95,619
Other assets. . . . . . . . . . . . . . . . . . . . . 3 6 3 6 7,081
Due from adviser. . . . . . . . . . . . . . . . . . . 5,182 3,573 3,452 7,104 6,284
------------ ------------- ------------- ------------- -------------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . 8,933,476 26,724,764 16,109,949 11,701,405 18,288,488
LIABILITIES
Payable for securities purchased. . . . . . . . . . .
Unrealized depreciation on forward currency contracts 0 239,856 0 0 0
Payable to custodian. . . . . . . . . . . . . . . . . 0 0 0 0 8,563
Advisory fee payable. . . . . . . . . . . . . . . . . 42,210 0 0 0 0
Accounts payable and accrued expenses . . . . . . . . 5,324 15,572 8,606 5,928 10,509
Payable for trust shares redeemed . . . . . . . . . . 45,782 47,736 46,745 44,802 56,829
76,320 41,892 36,288 32,620 21,855
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . ------------ ------------- ------------- ------------- -------------
169,636 345,056 91,639 83,350 97,756
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . ------------ ------------- ------------- ------------- -------------
$ 8,763,840 $ 26,379,708 $ 16,018,310 $ 11,618,055 $ 18,190,732
------------ ------------- ------------- ------------- -------------
NET ASSETS ------------ ------------- ------------- ------------- -------------
Capital paid - in . . . . . . . . . . . . . . . . . .
Undistributed (distributions in excess of) net $ 9,245,346 $ 22,566,506 $ 13,044,307 $ 10,992,844 $ 14,701,568
investment income. . . . . . . . . . . . . . . . . . (14,589) 10,013 67,014 2,331 (11,431)
Accumulated net realized gain (loss) on
investments and foreign currency transactions. . . . (606,546) 101,913 93,887 104,173 220,351
Net unrealized appreciation of:
Investments. . . . . . . . . . . . . . . . . . . . . 139,629 3,701,276 2,813,102 518,707 3,265,616
Foreign currency . . . . . . . . . . . . . . . . . . 0 0 0 0 14,628
------------ ------------- ------------- ------------- -------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . $ 8,763,840 $ 26,379,708 $ 16,018,310 $ 11,618,055 $ 18,190,732
------------ ------------- ------------- ------------- -------------
------------ ------------- ------------- ------------- -------------
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest outstanding,
unlimited number of shares authorized without par
value) . . . . . . . . . . . . . . . . . . . . . . . $ 8,589 $ 12,043 $ 15,704 $ 10,510 $ 13,823
Total shares outstanding at end of period . . . . . . 1,020,302 2,190,519 1,019,992 1,105,453 1,315,970
Cost of investment securities . . . . . . . . . . . . $ 8,449,539 $ 22,782,612 $ 13,144,737 $ 10,978,466 $ 14,789,406
</TABLE>
55
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
GROWTH &
SMALL CAP INCOME
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value . . . . . . . . . . . . $ 3,077,456 $ 2,723,528
Investments - repurchase agreements . . . . . . . . . . . . 527,000 627,000
Foreign currency holdings (Cost $0) . . . . . . . . . . . . 0 0
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 167
Income receivable . . . . . . . . . . . . . . . . . . . . . 99 1,812
Receivable for securities sold. . . . . . . . . . . . . . . 0 0
Unrealized appreciation on forward currency contracts . . . 0 0
Receivable for trust shares sold. . . . . . . . . . . . . . 305,934 34,672
Other assets. . . . . . . . . . . . . . . . . . . . . . . . 0 0
Due from adviser. . . . . . . . . . . . . . . . . . . . . . 12,273 0
----------- -----------
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . 3,922,794 3,387,179
LIABILITIES
Payable for securities purchased. . . . . . . . . . . . . . 36,535 0
Unrealized depreciation on forward currency contracts . . . 0 0
Payable to custodian. . . . . . . . . . . . . . . . . . . . 0 0
Advisory fee payable . . . . . . . . . . . . . . . . . . . 2,484 18,261
Accounts payable and accrued expenses . . . . . . . . . . . 70,673 34,162
Payable for trust shares redeemed . . . . . . . . . . . . . 0 0
----------- -----------
TOTAL LIABILITIES. . . . . . . . . . . . . . . . . . . . 109,692 52,423
----------- -----------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 3,813,102 $ 3,334,756
----------- -----------
----------- -----------
NET ASSETS
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . $3,361,669 $3,225,253
Undistributed (distributions in excess of) net
investment income. . . . . . . . . . . . . . . . . . . . . 0 0
Accumulated net realized gain (loss) on
investments and foreign currency transactions. . . . . . . 36,548 15,642
Net unrealized appreciation of:
Investments . . . . . . . . . . . . . . . . . . . . . . . 414,885 93,861
Foreign currency. . . . . . . . . . . . . . . . . . . . . 0 0
----------- -----------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . . . . . $ 3,813,102 $ 3,334,756
----------- -----------
----------- -----------
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest outstanding,
unlimited number of shares authorized without par value). . $ 12,638 $ 11,171
Total shares outstanding at end of period . . . . . . . . . 301,724 298,528
Cost of investment securities . . . . . . . . . . . . . . . $ 3,189,571 $ 3,256,667
</TABLE>
See notes to financial statements.
56
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
CASH COMMON
MANAGEMENT STOCK
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income . . . . . . . . . . . . . . $ 0 $ 268,164
Interest income . . . . . . . . . . . . . . 596,554 172,022
Foreign taxes withheld. . . . . . . . . . . 0 (873)
---------- ------------
TOTAL INCOME. . . . . . . . . . . . . . 596,554 439,313
EXPENSES
Investment management fee . . . . . . . . . 49,056 262,290
Administrative fee. . . . . . . . . . . . . 34,029 82,349
Custodian fee . . . . . . . . . . . . . . . 34,452 31,479
Audit fee and expenses. . . . . . . . . . . 17,857 21,657
Legal fee . . . . . . . . . . . . . . . . . 11,428 11,428
Printing expenses . . . . . . . . . . . . . 6,429 6,429
Trustees fee and expenses . . . . . . . . . 6,324 6,325
Transfer agent fee. . . . . . . . . . . . . 2,059 2,058
Registration fees . . . . . . . . . . . . . 36 36
Insurance . . . . . . . . . . . . . . . . . 6,751 16,572
Other . . . . . . . . . . . . . . . . . . . 1,054 2,515
Expenses borne by the adviser . . . . . . . (95,420) (6,296)
Expense reductions. . . . . . . . . . . . . (36) (27)
---------- ------------
TOTAL EXPENSES. . . . . . . . . . . . . 74,019 436,815
---------- ------------
NET INVESTMENT INCOME . . . . . . . . . 522,535 2,498
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments. . . 65 4,418,581
Net realized gain on foreign currency
transactions. . . . . . . . . . . . . . . . 0 899
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . 0 7,157,127
Foreign currency. . . . . . . . . . . . . . 0 0
---------- ------------
NET REALIZED AND UNREALIZED GAIN. . . . 65 11,576,607
---------- ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . $ 522,600 $ 11,579,105
---------- ------------
---------- ------------
</TABLE>
See notes to financial statements.
57
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
HIGH INCOME MULTIPLE
BOND STRATEGIES
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income . . . . . . . . . . . . . . . . . . . . . . $ 3,829 $ 136,285
Interest income . . . . . . . . . . . . . . . . . . . . . . 828,304 420,560
Foreign taxes withheld. . . . . . . . . . . . . . . . . . . 0 (394)
------------ ------------
TOTAL INCOME. . . . . . . . . . . . . . . . . . . . . . 832,133 556,451
EXPENSES
Investment management fee . . . . . . . . . . . . . . . . . 59,701 166,507
Administrative fee. . . . . . . . . . . . . . . . . . . . . 22,817 51,459
Custodian fee . . . . . . . . . . . . . . . . . . . . . . . 41,021 43,689
Audit fee and expenses. . . . . . . . . . . . . . . . . . . 17,857 17,857
Legal fee . . . . . . . . . . . . . . . . . . . . . . . . . 11,428 11,428
Printing expenses . . . . . . . . . . . . . . . . . . . . . 6,429 6,429
Trustees fee and expenses . . . . . . . . . . . . . . . . . 6,324 6,324
Transfer agent fee. . . . . . . . . . . . . . . . . . . . . 2,059 2,059
Registration fees . . . . . . . . . . . . . . . . . . . . . 36 36
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 3,858 9,661
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . 556 1,458
Expenses borne by the adviser . . . . . . . . . . . . . . . (69,671) (31,469)
Expense reductions. . . . . . . . . . . . . . . . . . . . . (957) (73)
------------ ------------
TOTAL EXPENSES. . . . . . . . . . . . . . . . . . . . . 101,458 285,365
------------ ------------
NET INVESTMENT INCOME . . . . . . . . . . . . . . . . . 730,675 271,086
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments. . . . . . . . . . . (19,728) 2,272,079
Net realized gain on foreign currency transactions . . . . . 3,252 3
Change in unrealized appreciation (depreciation) of:
Investments . . . . . . . . . . . . . . . . . . . . . . . . 723,665 3,961,315
Foreign currency. . . . . . . . . . . . . . . . . . . . . . 0 0
------------ ------------
NET REALIZED AND UNREALIZED GAIN. . . . . . . . . . . . 707,189 6,233,397
------------ ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . . . $ 1,437,864 $ 6,504,483
------------ ------------
------------ ------------
</TABLE>
(1) From commencement of operations May 4, 1995.
(2) From commencement of operations May 31, 1995.
See notes to financial statements.
58
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
TILT U.S. WORLD GROWTH &
UTILITY GOVERNMENT BOND EQUITY SMALL CAP INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO (1) PORTFOLIO (2)
--------- --------- --------- ------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income . . . . . . . . . . . . . . . . . . . $ 709,178 $ 0 $ 178,074 $ 598 $ 10,010
Interest income . . . . . . . . . . . . . . . . . . . 362 860,404 81,298 8,333 17,129
Foreign taxes withheld. . . . . . . . . . . . . . . . 16 0 (24,340) 0 (101)
----------- ----------- ----------- ----------- -----------
TOTAL INCOME. . . . . . . . . . . . . . . . . . . 709,556 860,404 235,032 8,931 27,038
EXPENSES
Investment management fee . . . . . . . . . . . . . . 91,889 74,445 104,408 13,610 8,192
Administrative fee. . . . . . . . . . . . . . . . . . 33,125 29,503 35,454 33,592 21,671
Custodian fee . . . . . . . . . . . . . . . . . . . . 35,091 36,511 58,897 54,767 10,731
Audit fee and expenses. . . . . . . . . . . . . . . . 17,857 17,857 17,857 18,006 17,940
Legal fee . . . . . . . . . . . . . . . . . . . . . . 11,428 11,428 11,428 11,523 11,481
Printing expenses . . . . . . . . . . . . . . . . . . 6,429 6,429 6,429 6,483 6,459
Trustees fee and expenses . . . . . . . . . . . . . . 6,324 6,324 6,324 4,530 3,194
Transfer agent fee. . . . . . . . . . . . . . . . . . 2,059 2,059 2,059 1,398 1,395
Registration fees . . . . . . . . . . . . . . . . . . 36 36 36 36 36
Insurance . . . . . . . . . . . . . . . . . . . . . . 6,725 7,916 5,768 0 0
Other . . . . . . . . . . . . . . . . . . . . . . . . 1,017 1,098 852 101 101
Expenses borne by the adviser . . . . . . . . . . . . (47,787) (89,309) (69,498) (121,935) (64,518)
Expense reductions. . . . . . . . . . . . . . . . . . (2,278) (498) (229) (501) (2,715)
----------- ----------- ----------- ----------- -----------
TOTAL EXPENSES. . . . . . . . . . . . . . . . . . 161,915 103,799 179,785 21,610 13,967
----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME . . . . . . . . . . . . . . 547,641 756,605 55,247 (12,679) 13,071
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments. . . . . . . . 346,305 678,846 957,186 148,029 43,303
Net realized gain on foreign currency transactions . . 0 0 223,542 0 0
Change in unrealized appreciation (depreciation) of:
Investments . . . . . . . . . . . . . . . . . . . . . 3,179,720 843,009 2,212,725 414,885 93,861
Foreign currency. . . . . . . . . . . . . . . . . . . 0 0 (62,988) 0 0
----------- ----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN. . . . . . . . . 3,526,025 1,521,855 3,330,465 562,914 137,164
----------- ----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . . . $ 4,073,666 $ 2,278,460 $ 3,385,712 $ 550,235 $ 150,235
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
59
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH MANAGEMENT PORTFOLIO COMMON STOCK PORTFOLIO
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/95 12/31/94 12/31/95 12/31/94
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income. . . . . . . . . . . . . . $ 522,535 $ 484,186 $ 2,498 $ 267,715
Net realized gain (loss) on investments. . . . . 65 0 4,418,581 (1,190,682)
Net realized gain (loss) on foreign
currency transactions . . . . . . . . . . . . 0 0 899 0
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . . 0 0 7,157,127 332,617
Foreign currency. . . . . . . . . . . . . . . 0 0 0 0
----------- ---------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . 522,600 484,186 11,579,105 (590,350)
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . (522,535) (484,186) (267,715) (133,025)
Net realized gain on investments . . . . . . . . (53) 0 (2,264,091) (132,832)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . 0 0 0 0
Net realized gain on investments . . . . . . . . 0 0 0 0
Tax return of capital . . . . . . . . . . . . . . . 0 0 0 0
Trust share transactions - Note E . . . . . . . . . 1,897,366 (883,125) 3,056,280 (10,858,240)
----------- ---------- ----------- -----------
TOTAL INCREASE (DECREASE) . . . . . . . . . . 1,897,378 (883,125) 12,103,579 (11,714,447)
Net Assets
Beginning of period. . . . . . . . . . . . . . . 8,198,345 9,081,470 30,815,145 42,529,592
----------- ---------- ----------- -----------
END OF PERIOD (1). . . . . . . . . . . . . . . . $10,095,723 $8,198,345 $42,918,724 $30,815,145
----------- ---------- ----------- -----------
----------- ---------- ----------- -----------
(1) Including undistributed (distributions in
excess of) net investment income . . . . . . . . $ 0 $ 0 $ 2,498 $ 134,690
See notes to financial statements.
60
<PAGE>
<CAPTION>
HIGH INCOME BOND PORTFOLIO MULTIPLE STRATEGIES PORTFOLIO
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/95 12/31/94 12/31/95 12/31/94
---------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income. . . . . . . . . . . . . . $ 730,675 $ 843,098 $ 271,086 $ 360,791
Net realized gain (loss) on investments. . . . . (19,728) (545,819) 2,272,079 2,173,355
Net realized gain (loss) on foreign
currency transactions . . . . . . . . . . . . 3,252 (434) 3 0
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . .
Foreign currency. . . . . . . . . . . . . . . 723,665 (975,528) 3,961,315 (3,568,738)
0 0 0 0
---------- ----------- ----------- ------------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . 1,437,864 (678,683) 6,504,483 (1,034,592)
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . (730,675) (843,098) (270,194) (360,791)
Net realized gain on investments . . . . . . . . 0 (62,815) (2,115,878) (2,173,355)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . (43,548) (5,052) 0 (11,819)
Net realized gain on investments . . . . . . . . 0 (9,525) 0 (36,982)
Tax return of capital . . . . . . . . . . . . . . . 0 0 0 0
Trust share transactions - Note E . . . . . . . . . 329,113 (5,125,701) 1,111,737 245,164
---------- ----------- ----------- ------------
TOTAL INCREASE (DECREASE) . . . . . . . . . . 992,754 (6,724,874) 5,230,148 (3,372,375)
Net Assets
Beginning of period. . . . . . . . . . . . . . . 7,771,086 14,495,960 21,149,560 24,521,935
---------- ----------- ----------- ------------
END OF PERIOD (1). . . . . . . . . . . . . . . . $8,763,840 $ 7,771,086 $26,379,708 $ 21,149,560
---------- ----------- ----------- ------------
---------- ----------- ----------- ------------
(1) Including undistributed (distributions in
excess of) net investment income. . . . . . . . . . . $ (14,589) $ (5,486) $ 10,013 $ (11,819)
<CAPTION>
TILT UTILITY PORTFOLIO
YEAR ENDED YEAR ENDED
12/31/95 12/31/94
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income. . . . . . . . . . . . . . $ 547,641 $ 446,733
Net realized gain (loss) on investments. . . . . 346,305 1,214,155
Net realized gain (loss) on foreign
currency transactions . . . . . . . . . . . . 0 0
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . .
Foreign currency. . . . . . . . . . . . . . . 3,179,720 (1,775,894)
0 0
----------- -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . 4,073,666 (115,006)
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . (481,008) (446,352)
Net realized gain on investments . . . . . . . . (286,632) (1,394,774)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . 0 0
Net realized gain on investments . . . . . . . . 0 0
Tax return of capital . . . . . . . . . . . . . . . 0 0
Trust share transactions - Note E . . . . . . . . . 400,523 (983,283)
----------- -----------
TOTAL INCREASE (DECREASE) . . . . . . . . . . 3,706,549 (2,939,415)
Net Assets
Beginning of period. . . . . . . . . . . . . . . 12,311,761 15,251,176
----------- -----------
END OF PERIOD (1). . . . . . . . . . . . . . . . $16,018,310 $12,311,761
----------- -----------
----------- -----------
(1) Including undistributed (distributions in
excess of) net investment income . . . . . . . . $ 67,014 $ 381
</TABLE>
61
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
-CONTINUED-
<TABLE>
<CAPTION>
U.S. GOVERNMENT
BOND PORTFOLIO WORLD EQUITY PORTFOLIO
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
12/31/95 12/31/94 12/31/95 12/31/94
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income. . . . . . . . . . . . . . $ 756,605 $ 958,567 $ 55,247 $ 17,475
Net realized gain (loss) on investments. . . . . 678,846 146,586 957,186 820,711
Net realized gain (loss) on foreign
currency transactions . . . . . . . . . . . . 0 0 223,542 (216,114)
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . . 843,009 (1,598,045) 2,212,725 384,032
Foreign currency. . . . . . . . . . . . . . . 0 0 (62,988) 56,901
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . 2,278,460 (492,892) 3,385,712 1,063,005
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . (756,605) (958,567) 0 (20,517)
Net realized gain on investments . . . . . . . . (352,027) (146,586) (1,008,027) (622,228)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . (49,391) 0 0 0
Net realized gain on investments . . . . . . . . 0 (155,582) 0 (6,239)
Tax return of capital . . . . . . . . . . . . . . . 0 (3,468) 0 0
Trust share transactions - Note E . . . . . . . . . (3,946,311) (4,508,657) 4,313,369 (1,144,645)
----------- ----------- ----------- -----------
TOTAL INCREASE (DECREASE) . . . . . . . . . . (2,825,874) (6,265,752) 6,691,054 (730,624)
Net Assets
Beginning of period . . . . . . . . . . . . . . 14,443,929 20,709,681 11,499,678 12,230,302
----------- ----------- ----------- -----------
END OF PERIOD (1) . . . . . . . . . . . . . . . $11,618,055 $14,443,929 $18,190,732 $11,499,678
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(1) Including undistributed (distributions in
excess of) net investment income . . . . . . . . $ 2,331 $ 0 $ (11,431) $ (69,065)
(2) From commencement of operations May 4, 1995.
(3) From commencement of operations May 31, 1995.
See notes to financial statements.
62
<PAGE>
<CAPTION>
SMALL CAP PORTFOLIO GROWTH & INCOME PORTFOLIO
PERIOD ENDED PERIOD ENDED
12/31/95 (2) 12/31/95 (3)
----------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income. . . . . . . . . . . . . . $ (12,679) $ 13,071
Net realized gain (loss) on investments. . . . . 148,029 43,303
Net realized gain (loss) on foreign
currency transactions . . . . . . . . . . . . 0 0
Change in unrealized appreciation
(depreciation) of:
Investments . . . . . . . . . . . . . . . . . 414,885 93,861
Foreign currency. . . . . . . . . . . . . . . 0 0
---------- ----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . . . . 550,235 150,235
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . 0 (13,071)
Net realized gain on investments . . . . . . . . (98,802) (27,661)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . 0 0
Net realized gain on investments . . . . . . . . 0 0
Tax return of capital . . . . . . . . . . . . . . . 0 0
Trust share transactions - Note E . . . . . . . . . 3,361,669 3,225,253
---------- ----------
TOTAL INCREASE (DECREASE) . . . . . . . . . . 3,813,102 3,334,756
Net Assets
Beginning of period . . . . . . . . . . . . . . 0 0
---------- ----------
$3,813,102 $3,334,756
END OF PERIOD (1) . . . . . . . . . . . . . . . ---------- ----------
---------- ----------
(1) Including undistributed (distributions in
excess of) net investment income . . . . . . . . $ 0 $ 0
</TABLE>
63
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE A -- ORGANIZATION
Variable Investors Series Trust (the "Trust") was established as a
Massachusetts business trust under the laws of Massachusetts by an Agreement and
Declaration of Trust dated December 23, 1986. The Trust is an open-end, series
management investment company which currently comprises nine series of shares of
beneficial interest (the "Portfolios") each of which represents the entire
interest in a separate portfolio of investments. The Portfolios are the Cash
Management Portfolio, the Common Stock Portfolio, the High Income Bond
Portfolio, the Multiple Strategies Portfolio, the Tilt Utility Portfolio, the
U.S. Government Bond Portfolio, the World Equity Portfolio, the Small Cap
Portfolio and the Growth & Income Portfolio.
As of December 31, 1995, 92.74% of the assets of the Trust are owned by
First Variable Life Insurance Company ("First Variable") and 7.26% of the assets
of the Trust are owned by Monarch Life Insurance Company ("MLIC"), through
separate accounts maintained by First Variable and MLIC, respectively.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements.
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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS: The Trust's equity securities, including
American Depository Receipts (ADR's) and other forms of depository receipts,
traded on a national securities exchange are valued at the last sales price, or,
if no closing price is available, at a bid price estimated by a broker or
dealer. Debt securities are generally valued on the basis of valuations
furnished by a pricing service which determines valuations for normal
institutional size trading units of debt securities, without exclusive reliance
upon quoted prices. These valuations are believed to reflect with greater
accuracy the fair market value of such securities. Short-term securities
maturing in 60 days or less are valued at cost plus earned discount to maturity
(amortized cost), which approximates market value. The Cash Management Portfolio
values its securities using the amortized cost method, which values securities
initially at cost and thereafter assumes a constant amortization to maturity of
any discount or premium. Securities in other mutual funds are valued at the net
asset value of those funds. Securities for which current market quotations are
not readily available are stated at fair value as determined in good faith under
the direction of the Trustees.
FOREIGN SECURITIES: Foreign securities traded on a recognized securities
exchange are valued at the last sales price in the principal market where they
are traded, or, if closing prices are unavailable, at the last bid price
available prior to the time a Portfolio's net asset value is determined.
Foreign portfolio security prices are furnished by quotation services expressed
in the local currency's value and are translated into U.S. dollars at the
current rate of exchange. Foreign securities for which prices cannot be
obtained by the quotation services are valued using dealer supplied quotations.
REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Trust's custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount, including
interest, of the repurchase transaction. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is marked-to-
market on a daily basis to ensure the adequacy of the collateral. In the event
of default of the obligation to repurchase, the Portfolio has the right to
liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral, or proceeds may be subject to legal proceedings.
64
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
INVESTMENT TRANSACTIONS: Investment security transactions are recorded on
the date of purchase, sale, or maturity. Dividend income is recorded on the
ex-dividend date, or, in the case of dividend income on foreign securities, on
the ex-dividend date or when the Trust becomes aware of its declaration.
Interest income is recorded on the accrual basis. Realized gains and losses
from security transactions are determined on the basis of identified cost.
FOREIGN CURRENCY TRANSLATIONS: The records of the Trust are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at a
current rate of exchange of such currency to determine the value of investments,
other assets and liabilities on the date of any determination of net asset value
of the Portfolios. Purchases and sales of securities and income and expenses
are converted at the prevailing rate of exchange on the respective dates of such
transactions. Net realized gain/(loss) on foreign currency includes net
realized currency gains and losses recognized between accrual and payment
dates. The Portfolios do not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
FORWARD FOREIGN CURRENCY CONTRACTS: Upon the purchase or sale of a
security denominated in foreign currency the Trust may enter into a forward
currency exchange contract for the purchase or sale, for a fixed amount of U.S.
dollars, of an amount of the foreign currency required to settle the security
transaction in order to hedge against a change in the foreign currency exchange
rate. Accordingly, the Trust would not realize currency gains or losses between
the trade and settlement dates on such security transactions. A Portfolio may
engage in position hedging to protect against a decline in value relative to the
U.S. dollar of the currencies in which their portfolio securities are
denominated or quoted.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Trust on each day and the resulting net unrealized
appreciation (depreciation) and related net receivable (payable) amount are
determined by using foreign currency exchange rates supplied by a quotation
service.
Realized gain (loss) includes net gains or losses realized by the Trust on
contracts which have matured or which the Trust has terminated by entering into
an offsetting closing transaction.
FORWARD COMMITMENTS: To secure prices or yields deemed advantageous at a
particular time, each Portfolio of the Trust may enter into a forward commitment
in which a Portfolio agrees on trade date to either make or receive delivery
against payment for securities on a delayed delivery basis. The price and
interest rate of such securities are fixed at trade date. For forward
commitment purchases, the Portfolio does not earn interest on such security
until settlement date.
FEDERAL INCOME TAXES: Each Portfolio of the Trust is treated as a separate
entity for federal tax purposes. Each Portfolio of the Trust has qualified and
intends to continue to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code, as amended. By so qualifying,
the Portfolios of the Trust will not be subject to federal income taxes to the
extent that they distribute all of their taxable income, including realized
capital gains, for the fiscal year. In addition, by distributing during each
calendar year substantially all of their net investment income, capital gains
and certain other amounts, if any, the Portfolios of the Trust will not be
subject to a federal excise tax.
As of December 31, 1995, the High Income Bond Portfolio has a realized
capital loss carryforward, for Federal income tax purposes, of $757,850
($552,042 expires on December 31, 2002, $205,808 expires on December 31, 2003),
available to be used to offset future realized capital gains.
65
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
Any net capital losses incurred after October 31, within a Portfolio's tax
year, are deemed to arise on the first day of a Portfolio's next tax year. The
Portfolios incurred and elected to defer net capital losses as follows, during
such period in fiscal 1995:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT
--------- ------
<S> <C>
High Income Bond Portfolio $ 1,794
World Equity Portfolio 17,911
</TABLE>
EXPENSES: Expenses directly attributable to a Portfolio are charged to
that Portfolio. Expenses not directly attributable to a Portfolio are split
evenly among the affected Portfolios, allocated on the basis of relative average
net assets, or otherwise allocated among the Portfolios as the Trustees may
direct or approve.
DIVIDENDS AND DISTRIBUTIONS: Each of the Portfolios, other than the Cash
Management Portfolio, declares and distributes dividends from net investment
income, if any, and distributes its net realized capital gains, if any, at least
annually. The Cash Management Portfolio declares daily and pays monthly
dividends from net investment income. Income and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due
to utilization of capital loss carryovers, differing treatments for foreign
currency transactions and differences in the timing of recognition of certain
capital losses for financial reporting and tax purposes. Both dividends and
capital gain distributions are made in shares of such Portfolios unless an
election is made on behalf of an Annuity Account to receive dividends and
capital gain distributions in cash. The Trust made the following
reclassifications as of December 31, 1995:
<TABLE>
<CAPTION>
INCREASE INCREASE/(DECREASE)
INCREASE/(DECREASE) UNDISTRIBUTED NET ACCUMULATED
PAID IN CAPITAL INVESTMENT INCOME REALIZED GAIN/(LOSS)
------------------- ----------------- --------------------
<S> <C> <C> <C>
Common Stock Portfolio . . . . . . . $ (139,079) $ 133,033 $ 6,046
High Income Bond Portfolio . . . . . 281 34,445 (34,726)
Multiple Strategies Portfolio. . . . (11,822) 20,940 (9,118)
Tilt Utility Portfolio . . . . . . . 14,992 0 (14,992)
U.S. Government Bond Portfolio . . . 3,467 51,722 (55,189)
World Equity Portfolio . . . . . . . 14,611 19,950 (34,561)
Small Cap Portfolio. . . . . . . . . 0 12,679 (12,679)
Growth & Income Portfolio. . . . . . 0 1 (1)
</TABLE>
Net investment income, net realized gains and net assets were not affected by
these changes.
NOTE C -- INVESTMENT ADVISORY AND OTHER RELATED PARTY AGREEMENTS
INVESTMENT ADVISORY AGREEMENT
First Variable Advisory Services Corp. ("FVAS") is the investment adviser to all
Portfolios of the Trust under an investment advisory agreement with the Trust
dated September 22, 1994. FVAS retained the following sub-advisers at its own
cost and expense pursuant to sub-advisory agreements dated September 22, 1994:
Federated Investment Counseling as sub-adviser to the Cash Management and the
High Income Bond Portfolios, Value Line, Inc. as sub-adviser to the Multiple
Strategies and the Common Stock Portfolios, Strong Capital Management, Inc. as
sub-adviser to the U.S. Government
66
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
Bond Portfolio, State Street Bank and Trust Company as sub-adviser to the Tilt
Utility Portfolio, and Keystone Investment Management Company as sub-adviser to
the World Equity Portfolio. FVAS retained the following sub-advisers at its own
cost and expense pursuant to sub-advisory agreements dated May 1, 1995: Pilgrim
Baxter & Associates, Ltd. as sub-adviser to the Small Cap Portfolio and Warburg,
Pincus Counsellors, Inc. as sub-adviser to the Growth & Income Portfolio.
FVAS is a Massachusetts corporation which was incorporated on October 8,
1993 and which is registered with the Securities and Exchange Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended. FVAS
is a wholly-owned subsidiary of First Variable, which is a wholly-owned
subsidiary of Irish Life of North America, Inc. ("ILoNA"), which is a wholly-
owned subsidiary of Irish Life plc., of Dublin, Ireland.
As compensation for all services rendered, facilities provided and expenses
paid or assumed by FVAS under the advisory agreement, the Trust pays
compensation monthly to FVAS at the following annual rates based on the average
daily net assets of each Portfolio taken separately: 0.70% of average daily net
assets for the Common Stock and the Multiple Strategies Portfolios; 0.65% of the
first $100 million of average daily net assets and 0.55% of average daily net
assets in excess of $100 million for the Tilt Utility Portfolio; 0.70% of the
first $40 million of average daily net assets, 0.65% of the next $20 million of
average daily net assets, 0.55% of the next $15 million of average daily net
assets, and 0.50% of average daily net assets in excess of $75 million for the
High Income Bond Portfolio; 0.70% of the first $200 million of average daily
net assets, 0.625% of the next $300 million of average daily net assets, and
0.50% of average daily net assets in excess of $500 million for the World Equity
Portfolio; 0.60% of the first $200 million of average daily net assets and 0.50%
of average daily net assets in excess of $200 million for the U.S. Government
Bond Portfolio; 0.50% of the first $70 million of average daily net assets and
0.45% of average daily net assets in excess of $70 million for the Cash
Management Portfolio; 0.85% of average daily net assets for the Small Cap
Portfolio; and, 0.75% of average daily net assets for the Growth & Income
Portfolio.
LIMITATIONS
First Variable has agreed to reduce its compensation for certain services
to the Trust (and, if necessary, bear certain expenses of each of the
Portfolios) through April 1, 1996 with respect to each of the Portfolios to the
extent that Portfolio expenses, other than FVAS's compensation, exceed the
annual rate of 0.50% of a Portfolio's average daily net assets (0.25% in the
case of the Cash Management Portfolio and the U.S. Government Bond Portfolio).
EXPENSE REDUCTIONS
State Street Bank and Trust Company, the Trust's custodian, has agreed to
compensate the Portfolios and decrease the Trust's custodian expenses for cash
balances left uninvested in each of the Portfolios. For the period ended
December 31, 1995, the Trust's expenses were reduced by $7,314.
TRUSTEES' COMPENSATION
Trustees' fees of $8,000 per year, plus $1,500 per meeting of the Board of
Trustees and $750 for each Audit Committee meeting attended (if held on a day
other than when a Board of Trustees meeting is held), are paid by the Trust to
each Trustee who is not an interested person of the Trust, First Variable,
ILoNA, MLIC or FVAS. No remuneration is paid by the Trust to any Trustee or
officer of the Trust who is affiliated with First Variable, ILoNA, MLIC or FVAS.
NOTE D -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Portfolio other than the Cash Management
Portfolio, for the period ended December 31, 1995 were as follows:
67
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
NON- NON-
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Cash Management Portfolio. . . . . $432,892,962 $10,396,050 $432,191,132 $9,400,000
Common Stock Portfolio . . . . . . 58,510,324 0 57,016,729 0
High Income Bond Portfolio . . . . 7,322,323 0 6,618,927 0
Multiple Strategies Portfolio. . . 31,489,876 2,523,203 31,239,205 3,110,219
Tilt Utility Portfolio . . . . . . 6,774,768 0 6,697,168 0
U.S. Government Bond Portfolio . . 6,283,109 24,097,112 8,030,679 27,589,903
World Equity Portfolio . . . . . . 15,658,383 0 13,062,176 0
Small Cap Portfolio. . . . . . . . 4,167,474 0 1,652,932 0
Growth & Income Portfolio. . . . . 2,760,933 62,059 375,303 59,559
</TABLE>
The identified cost for federal income tax purposes of investments owned by each
Portfolio (including earned discount on corporate short-term notes and
commercial paper) and their respective gross unrealized appreciation and
depreciation at December 31, 1995 were as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED NET UNREALIZED
IDENTIFIED COST APPRECIATION (DEPRECIATION) APPRECIATION/(DEPRECIATION)
--------------- ------------ -------------- ---------------------------
<S> <C> <C> <C> <C>
Cash Management Portfolio. . . . . $10,213,661 $ 0 $ 0 $ 0
Common Stock Portfolio . . . . . . 36,043,844 8,197,998 (733,322) 7,464,676
High Income Bond Portfolio . . . . 8,541,588 374,085 (326,505) 47,580
Multiple Strategies Portfolio. . . 22,782,612 4,025,152 (323,876) 3,701,276
Tilt Utility Portfolio . . . . . . 13,176,577 2,817,862 (36,600) 2,781,262
U.S. Government Bond Portfolio . . 11,003,509 496,032 (2,368) 493,664
World Equity Portfolio . . . . . . 14,794,236 3,692,306 (431,520) 3,260,786
Small Cap Portfolio . . . . . . . 3,193,109 562,886 (151,539) 411,347
Growth & Income Portfolio . . . . 3,256,667 228,731 (134,870) 93,861
</TABLE>
NOTE E -- TRUST SHARE TRANSACTIONS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
CASH MANAGEMENT PORTFOLIO
Shares sold. . . . . . . . . . . . . . 20,464,576 $ 20,464,576 25,982,539 $ 25,982,539
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 522,595 522,595 484,179 484,179
------------ ------------ ------------ ------------
20,987,171 20,987,171 26,466,718 26,466,718
Shares repurchased . . . . . . . . . . (19,089,805) (19,089,805) (27,349,843) (27,349,843)
------------ ------------ ------------ ------------
Net increase (decrease) . . . . . . . 1,897,366 $ 1,897,366 (883,125) $ (883,125)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
68
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
COMMON STOCK PORTFOLIO
Shares sold . . . . . . . . . . . . . 363,229 $ 8,619,361 262,854 $ 5,195,828
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 98,408 2,531,806 13,273 265,857
------------ ------------ ----------- ------------
461,637 11,151,167 276,127 5,461,685
Shares repurchased . . . . . . . . . . (338,854) (8,094,887) (825,476) (16,319,925)
------------ ------------ ----------- ------------
Net increase (decrease) . . . . . . . 122,783 $ 3,056,280 (549,349) $(10,858,240)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
HIGH INCOME BOND PORTFOLIO
Shares sold. . . . . . . . . . . . . . 685,858 $ 6,023,295 1,118,872 $ 10,391,147
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 90,256 774,223 116,951 920,490
------------ ------------ ----------- ------------
776,114 6,797,518 1,235,823 11,311,637
Shares repurchased . . . . . . . . . . (737,813) (6,468,405) (1,747,524) (16,437,338)
------------ ------------ ----------- ------------
Net increase (decrease) . . . . . . . 38,301 $ 329,113 (511,701) $ (5,125,701)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
MULTIPLE STRATEGIES PORTFOLIO
Shares sold. . . . . . . . . . . . . . 407,094 $ 4,796,839 614,383 $ 6,597,428
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 199,328 2,386,073 257,485 2,582,947
------------ ------------ ----------- ------------
606,422 7,182,912 871,868 9,180,375
Shares repurchased . . . . . . . . . . (526,172) (6,071,175) (774,529) (8,935,211)
------------ ------------ ----------- ------------
Net increase . . . . . . . . . . . . . 80,250 $ 1,111,737 97,339 $ 245,164
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
TILT UTILITY PORTFOLIO
Shares sold. . . . . . . . . . . . . . 345,562 $ 4,803,339 211,964 $ 3,164,408
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 49,831 767,641 147,298 1,841,126
------------ ------------ ----------- ------------
395,393 5,570,980 359,262 5,005,534
Shares repurchased . . . . . . . . . . (370,564) (5,170,457) (405,142) (5,988,817)
------------ ------------ ----------- ------------
Net increase (decrease) . . . . . . . 24,829 $ 400,523 (45,880) $ (983,283)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
U.S. GOVERNMENT BOND PORTFOLIO
Shares sold. . . . . . . . . . . . . . 252,791 $ 2,717,003 382,993 $ 4,069,637
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 110,604 1,158,024 129,993 1,264,203
------------ ------------ ----------- ------------
363,395 3,875,027 512,986 5,333,840
Shares repurchased . . . . . . . . . . (744,322) (7,821,338) (922,528) (9,842,497)
------------ ------------ ----------- ------------
Net (decrease) . . . . . . . . . . . . (380,927) $ (3,946,311) (409,542) $ (4,508,657)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
WORLD EQUITY PORTFOLIO
Shares sold. . . . . . . . . . . . . . 659,927 $ 8,568,833 600,970 $ 7,167,528
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 72,816 1,008,027 55,538 648,984
------------ ------------ ----------- ------------
732,743 9,576,860 656,508 7,816,512
Shares repurchased . . . . . . . . . . (395,278) (5,263,491) (755,796) (8,961,157)
------------ ------------ ----------- ------------
Net increase (decrease) . . . . . . . 337,465 $ 4,313,369 (99,288) $ (1,144,645)
------------ ------------ ----------- ------------
------------ ------------ ----------- ------------
</TABLE>
69
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
PERIOD FROM
MAY 4, 1995 TO
DECEMBER 31, 1995
------------------------
SHARES AMOUNT
-------- ----------
<S> <C> <C>
SMALL CAP PORTFOLIO
Shares sold . . . . . . . . . . . . . 504,211 $5,867,210
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 7,913 98,802
-------- ----------
512,124 5,966,012
Shares repurchased . . . . . . . . . . (210,400) (2,604,343)
-------- ----------
Net increase . . . . . . . . . . . . . 301,724 $3,361,669
-------- ----------
-------- ----------
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM
MAY 31, 1995 TO
DECEMBER 31, 1995
------------------------
<S> <C> <C>
GROWTH & INCOME PORTFOLIO
Shares sold . . . . . . . . . . . . . 357,601 $3,877,668
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . 3,645 40,731
-------- ----------
361,246 3,918,399
Shares repurchased . . . . . . . . . . (62,718) (693,146)
-------- ----------
Net increase . . . . . . . . . . . . . 298,528 $3,225,253
-------- ----------
-------- ----------
</TABLE>
NOTE F -- FORWARD FOREIGN CURRENCY CONTRACT
As of December 31, 1995 the World Equity Portfolio had open twelve forward
foreign currency contracts which contractually obligates the Portfolio to
deliver currencies at a specified date, as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
CURRENCY SOLD SETTLEMENT DATE COST VALUE APPRECIATION/(DEPRECIATION)
------------- --------------- ---- ----- ---------------------------
<S> <C> <C> <C> <C> <C>
348,946 Australian Dollars 01/05/96 $ 259,269 $ 266,386 $ 7,117
2,993,120 Belgian Francs 02/20/96 101,984 104,000 2,016
794,502 Canadian Dollars 01/25/96 581,812 574,000 (7,812)
358,394 French Francs 02/05/96 73,241 73,000 (241)
32,225 German Marks 02/20/96 22,524 23,000 476
220,636,350 Japanese Yen 03/29/96 2,164,640 2,175,000 10,360
80,400,000 Italian Lira 02/20/96 50,280 50,000 (280)
73,682 Netherland Guilder 02/20/96 46,056 47,000 944
77,126 Pound Sterling 02/20/96 119,625 120,000 375
2,708,420 Spanish Peseta 02/13/96 22,225 22,000 (225)
1,514,907 Swedish Krona 03/28/96 226,567 227,000 433
72,102 Swiss Francs 02/20/96 62,843 64,000 1,157
-------
$14,320
-------
-------
</TABLE>
70
<PAGE>
This page has been left blank intentionally.
71
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income . . . . . . . . . . 0.052 0.036 0.024 0.032 0.055
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . . . . 0.000 0.000 0.000 0.000 0.000
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 0.052 0.036 0.024 0.032 0.055
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.052) (0.036) (0.024) (0.032) (0.055)
From Net Realized Capital Gains. . . . . . (0.000) (0.000) (0.000) (0.000) (0.000)
-------- -------- -------- -------- --------
Total Distributions. . . . . . . . . . . . (0.052) (0.036) (0.024) (0.032) (0.055)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD. . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 5.43% 3.68% 2.46% 3.22% 5.64%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . . $ 10,096 $ 8,198 $ 9,081 $ 18,405 $ 21,594
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 0.75% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 5.30% 3.64% 2.46% 3.20% 5.59%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.72%; 1994 - 1.46%; 1993 - 1.46%;
1992 - 1.13%; 1991 - 0.85%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
72
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 20.056 $ 20.390 $ 20.454 $ 26.290 $ 21.250
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . 0.007 0.173 0.468 0.254 0.571
Net Realized and Unrealized Gain
(Loss) on Investments. . . . . . . . . . 7.419 (0.335) 1.401 (2.256) 6.727
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 7.426 (0.162) 1.869 (2.002) 7.298
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.173) (0.086) (0.436) (0.254) (0.571)
In Excess of Net Investment Income . . . . (0.000) (0.000) (0.373) (0.000) (0.000)
From Net Realized Capital Gains. . . . . . (1.443) (0.086) (1.124) (3.580) (1.687)
-------- -------- -------- -------- --------
Total Distributions. . . . . . . . . . . . (1.616) (0.172) (1.933) (3.834) (2.258)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 25.866 $ 20.056 $ 20.390 $ 20.454 $ 26.290
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 37.12% (0.79)% 9.09% (7.59)% 34.37%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . . $ 42,919 $ 30,815 $ 42,530 $ 52,538 $ 54,877
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 1.17% 1.20% 1.20% 1.16% 0.99%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 1.17% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 0.01% 0.78% 1.74% 1.06% 2.12%
Portfolio Turnover Rate. . . . . . . . . . 166.87% 155.12% 6.05% 133.30% 69.04%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.19%; 1994 - 1.33%; 1993 - 1.21%;
1992 - 1.16%; 1991 - 1.00%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
73
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 7.914 $ 9.704 $ 9.492 $ 9.187 $ 7.911
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . 0.779 1.018 0.848 0.972 0.878
Net Realized and Unrealized Gain
(Loss) on Investments. . . . . . . . . . 0.717 (1.711) 0.567 0.481 1.258
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 1.496 (0.693) 1.415 1.453 2.136
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.779) (1.005) (0.849) (0.975) (0.860)
In Excess of Net Investment Income . . . . (0.042) (0.006) (0.000) (0.000) (0.000)
From Net Realized Capital Gains. . . . . . (0.000) (0.075) (0.354) (0.173) (0.000)
In Excess of Net Realized Capital Gains. . (0.000) (0.011) (0.000) (0.000) (0.000)
-------- -------- -------- -------- --------
Total Distributions. . . . . . . . . . . . (0.821) (1.097) (1.203) (1.148) (0.860)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 8.589 $ 7.914 $ 9.704 $ 9.492 $ 9.187
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 18.98% (7.08)% 14.91% 15.77% 27.01%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . . $ 8,764 $ 7,771 $ 14,496 $ 12,448 $ 8,386
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 1.20% 1.20% 1.20% 1.20% 1.13%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 1.21% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 8.62% 8.70% 8.04% 9.70% 10.54%
Portfolio Turnover Rate. . . . . . . . . . 82.15% 200.19% 90.82% 166.27% 41.14%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 2.04%; 1994 - 2.03%; 1993 - 1.59%;
1992 - 1.68%; 1991 - 2.15%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
74
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 10.022 $ 12.182 $ 11.785 $ 12.515 $ 10.790
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . 0.137 0.236 0.424 0.499 0.536
Net Realized and Unrealized Gain
(Loss) on Investments. . . . . . . . . . 3.086 (0.711) 0.835 (0.060) 1.989
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 3.223 (0.475) 1.259 0.439 2.525
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.136) (0.235) (0.424) (0.506) (0.526)
In Excess of Net Investment Income . . . . (0.000) (0.008) (0.000) (0.000) (0.000)
From Net Realized Capital Gains. . . . . . (1.066) (1.418) (0.438) (0.663) (0.274)
In Excess of Net Realized Capital Gains. . (0.000) (0.024) (0.000) (0.000) (0.000)
-------- -------- -------- -------- --------
Total Distributions . . . . . . . . . . . (1.202) (1.685) (0.862) (1.169) (0.800)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 12.043 $ 10.022 $ 12.182 $ 11.785 $ 12.515
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 32.24% (3.91)% 10.52% 3.62% 23.43%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . . $ 26,380 $ 21,150 $ 24,522 $ 26,012 $ 26,916
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 1.20% 1.20% 1.20% 1.20% 1.11%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 1.20% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 1.14% 1.74% 3.20% 3.73% 4.49%
Portfolio Turnover Rate. . . . . . . . . . 161.10% 153.64% 25.57% 52.11% 61.17%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.33%; 1994 - 1.48%; 1993 - 1.35%;
1992 - 1.24%; 1991 - 1.22%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
75
<PAGE>
VARIABLE INVESTORS SERIES TRUST
TILT UTILITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 12.372 $ 14.650 $ 13.891 $ 14.057 $ 12.183
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . 0.559 0.521 0.314 0.326 0.477
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . . . 3.560 (0.651) 2.171 (0.168) 3.140
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 4.119 (0.130) 2.485 0.158 3.617
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.494) (0.521) (0.296) (0.324) (0.475)
In Excess of Net Investment Income . . . . (0.000) (0.000) (0.170) (0.000) (0.000)
From Net Realized Capital Gains. . . . . . (0.293) (1.627) (1.260) (0.000) (1.268)
-------- -------- -------- -------- --------
Total Distributions. . . . . . . . . . . . (0.787) (2.148) (1.726) (0.324) (1.743)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 15.704 $ 12.372 $ 14.650 $ 13.891 $ 14.057
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 33.45% (1.05)% 17.87% 1.12% 29.79%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . . $ 16,018 $ 12,312 $ 15,251 $ 12,693 $ 11,156
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 1.15% 1.16% 1.20% 1.20% 1.12%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 1.17% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 3.89% 3.16% 1.85% 2.49% 3.54%
Portfolio Turnover Rate . . . . . . . . . 48.20% 193.40% 109.57% 308.39% 113.97%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.51%; 1994 - 1.60%; 1993 - 1.59%;
1992 - 1.64%; 1991 - 1.74%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
76
<PAGE>
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 9.718 $ 10.923 $ 10.659 $ 11.372 $ 10.610
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income . . . . . . . . . . 0.765 0.690 0.674 0.886 0.628
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . . . 1.191 (0.986) 0.328 (0.187) 0.929
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 1.956 (0.296) 1.002 0.699 1.557
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.765) (0.690) (0.673) (0.887) (0.614)
In Excess of Net Investment Income . . . . (0.045) (0.000) (0.000) (0.000) (0.000)
From Net Realized Capital Gains . . . . . (0.354) (0.105) (0.062) (0.525) (0.181)
In Excess of Net Realized Capital Gains . (0.000) (0.112) (0.000) (0.000) (0.000)
Tax Return of Capital . . . . . . . . . . (0.000) (0.002) (0.003) (0.000) (0.000)
-------- -------- -------- -------- --------
Total Distributions . . . . . . . . . . . (1.164) (0.909) (0.738) (1.412) (0.795)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 10.510 $ 9.718 $ 10.923 $ 10.659 $ 11.372
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3)
RATIOS & SUPPLEMENTAL DATA . . . . . . . . . 20.18% (2.72)% 9.38% 6.13% 14.70%
Net Assets at End of Period (000's) . . . $ 11,618 $ 14,444 $ 20,710 $ 24,280 $ 35,544
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (5) . . . . . . . . . . . . . 0.85% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 6.18% 5.65% 5.20% 6.41% 7.15%
Portfolio Turnover Rate . . . . . . . . . 252.94% 289.71% 27.84% 133.86% 125.90%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.59%; 1994 - 1.45%; 1993 - 1.30%;
1992 - 1.17%; 1991 - 1.04%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
77
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
1995 1994 (1) 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 11.752 $ 11.348 $ 10.177 $ 10.377 $ 9.734
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income . . . . . . . . . . 0.014 0.013 0.086 0.128 0.154
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . . . 2.872 1.119 1.679 (0.319) 0.645
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 2.886 1.132 1.765 (0.191) 0.799
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . (0.000) (0.023) (0.091) (0.009) (0.156)
In Excess of Net Investment Income . . . . (0.000) (0.000) (0.007) (0.000) (0.000)
From Net Realized Capital Gains . . . . . (0.815) (0.698) (0.496) (0.000) (0.000)
In Excess of Net Realized Capital Gains . (0.000) (0.007) (0.000) (0.000) (0.000)
-------- -------- -------- -------- --------
Total Distributions . . . . . . . . . . . (0.815) (0.728) (0.594) (0.009) (0.156)
-------- -------- -------- -------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 13.823 $ 11.752 $ 11.348 $ 10.177 $ 10.377
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
TOTAL RETURN (2) (3) . . . . . . . . . . . . 24.32% 10.02% 17.32% (1.83)% 8.22%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) . . . $ 18,191 $ 11,500 $ 12,230 $ 9,280 $ 8,304
Ratio of Net Operating Expenses to
Average Net Assets (4) . . . . . . . . . 1.20% 1.20% 1.20% 1.20% 1.11%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions(5) . . . . . . . . . . . . . 1.20% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . . . . 0.12% 0.16% 0.92% 1.34% 1.40%
Portfolio Turnover Rate . . . . . . . . . 97.85% 110.12% 78.50% 103.43% 79.97%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1995 and waiver of business management fee and payment or
reimbursement of certain other expenses by affiliates in 1994, 1993, 1992
and 1991. (See Note C to the Trust's financial statements.) Had affiliates
not undertaken to waive their fees and/or pay or reimburse expenses related
to the Portfolio, the Ratio of Operating Expenses to Average Net Assets
would have been as follows: 1995 - 1.67%; 1994 - 2.22%; 1993 - 1.79%;
1992 - 2.26%; 1991 - 2.93%.
(5) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
78
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP AND GROWTH & INCOME PORTFOLIOS
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO GROWTH & INCOME PORTFOLIO
PERIOD ENDED PERIOD ENDED
DECEMBER 31, 1995 (1) DECEMBER 31, 1995 (2)
--------------------- ---------------------
<S> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . $ 10.000 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) . . . . . . (0.042) 0.045
Net Realized and Unrealized Gain
(Loss) on Investments. . . . . . . . . 3.047 1.266
-------- --------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . 3.005 1.311
-------- --------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . (0.000) (0.045)
From Net Realized Capital Gains. . . . . (0.367) (0.095)
-------- --------
Total Distributions. . . . . . . . . . . (0.367) (0.140)
-------- --------
NET ASSET VALUE AT END OF PERIOD . . . . . . $ 12.638 $ 11.171
-------- --------
-------- --------
TOTAL RETURN (3) (4) . . . . . . . . . . . . 30.08% (5) 13.09% (5)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . . $ 3,813 $ 3,335
Ratio of Net Operating Expenses to
Average Net Assets (6) . . . . . . . . 1.35% (7) 1.25% (7)
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . . . 1.38% (7) 1.49% (7)
Ratio of Net Investment Income (Loss)
to Average Net Assets . . . . . . . . (0.79)% (7) 1.17% (7)
Portfolio Turnover Rate. . . . . . . . . 73.76% (5) 33.49% (5)
</TABLE>
(1) From commencement of operations May 4, 1995.
(2) From commencement of operations May 31, 1995.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) The performance of the Portfolios shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates. (See Note C to the Trust's financial statements.) Had
affiliates not undertaken to pay or reimburse expenses related to the
Portfolios, the Ratio of Operating Expenses to Average Net Assets would
have been reduced as follows: Small Cap Portfolio - 9.00%; Growth & Income
Portfolio - 7.27%, respectively.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
79
