<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
COMMON STOCK AND MULTIPLE STRATEGIES
PORTFOLIOS [LOGO]
SUB-ADVISOR: VALUE LINE ASSET MANAGEMENT
A DIVISION OF VALUE LINE, INC.
The market environment for the first six months of this year was in marked
contrast with the last six months of 1995. After slowing considerably during
the second half of last year, the economy rebounded strongly in the first
quarter of this year and accelerated more sharply in the second quarter. Second
quarter Gross Domestic Product advanced more than 4.0%. This growth spurt
surprised and roiled the stock and bond markets which had been expecting a
continuation of last year's slow growth. The yield on the 30 year U.S. Treasury
bond surged from less than 6.00% to a recent peak of nearly 7.25%, based on
concerns about strong economic growth rekindling inflation and forcing the
Federal Reserve to raise interest rates. This rise in interest rates helped
produce a volatile stock market. After rising steadily during the first six
months, the stock market hit an air pocket after some disturbing employment
numbers and negative earnings announcements, with the Dow Jones Industrials
retreating 10% from its May high of nearly 5,800 to 5,200 in July. However,
more recent economic data has indicated the economy is slowing down from its
fast pace of the second quarter, and the stock market has rebounded back close
to its previous highs.
We expect economic growth will slow down in the second half of this year from
the strong pace of the second quarter, with Gross Domestic Product growth of
about 2.0% to 2.5% and commensurate levels of inflation. A slowing growth
environment should be positive for equity investors as an easing of inflationary
concerns should enable long term interest rates to trend lower. This, coupled
with decent earnings growth, should give the stock market a modest positive bias
for the remainder of this year.
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 the first six months of 1996 of 13.47% as compared to 10.10% for the
unmanaged Standard & Poor's 500 Index. Stock selection is guided by the Value
Line Timeliness Ranking System which favorably ranks stocks with superior
earnings growth and price momentum. The Portfolio benefited from an
overweighting in technology stocks, particularly networking and enterprise
software companies, which outperformed the market, especially in the second
quarter. Healthcare and consumer cyclical stocks were also overweighted, and
these were also strong performers. In addition, the Portfolio benefited from a
significant underweighting in utility stocks which were weak due to the increase
in interest rates.
For the remainder of 1996 we are cautiously optimistic on the outlook for the
stock market, and believe that issue selection will be increasingly more
important than it was last year. We expect to remain overweighted in
technology, with a primary focus on networking stocks. Healthcare and
financials will also see heavy weighting. We recently built up a substantial
energy position to add diversification and take advantage of improving
fundamentals for oil service companies. Utilities and consumer staples will
remain underweighted.
VALUE LINE ASSET MANAGEMENT
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE COMMON STOCK
PORTFOLIO AND THE S&P 500 INDEX *
VIST S&P 500
YEAR/QTR COMMON STOCK INDEX
-------- ------------ -------
1994 $10,000 $10,000
4/1/94 10,000 10,000
6/30/94 9,393 9,966
9/30/94 10,141 10,380
12/31/94 10,264 10,303
3/31/95 10,834 11,305
6/30/95 12,461 12,383
9/30/95 14,180 13,365
12/31/95 14,075 14,169
3/31/96 15,209 14,930
6/30/96 15,970 15,599
* 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 June 30, 1996
Past 1 Past 5 Past 10
year years years
---- ----- -----
Common Stock Portfolio 28.07% 12.59% 12.47%
"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 SIX MONTHS ENDED JUNE 30, 1996
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.
On June 30, 1996, the Portfolio was 65% invested in common stocks, 20% in bonds
with a mixture of high grade corporates, government, and government agencies,
and approximately 15% 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 double digit gains, while the bond market had a
negative total return. The Portfolio had a total return of 8.81% for the first
six months of the year compared to 10.10% for the S&P 500 Index, and an
estimated 5.88% 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 superior earnings growth and
price momentum. We anticipate a slightly more conservative equity position in
the Portfolio, in the 60% to 65% range, based upon our view of only modest
upside for the stock market. We anticipate a nominal increase in the bond
position and a corresponding decrease in the cash position, as the slowing
economy should give a positive tone to the bond market.
VALUE LINE ASSET MANAGEMENT
3
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
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 *
VIST LEHMAN BROTHERS
MULTIPLE S&P 500 GOVERNMENT/CORPORATE
YEAR/QTR STRATEGIES INDEX BOND INDEX
-------- ----------- ------- ---------------------
1994 $10,000 $10,000 $10,000
4/1/94 10,000 10,000 10,000
6/30/94 9,364 9,966 9,876
9/30/94 9,913 10,380 9,925
12/31/94 9,974 10,303 9,962
3/31/95 10,475 11,305 10,458
6/30/95 11,845 12,383 11,136
9/30/95 13,154 13,365 11,343
12/31/95 13,189 14,169 11,872
3/31/96 13,884 14,930 11,594
6/30/96 14,351 15,599 11,648
* 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 June 30, 1996
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
Multiple Strategies Portfolio 21.09% 12.24% 10.55%
"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 SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
HIGH INCOME BOND PORTFOLIO [LOGO]
SUB-ADVISOR: FEDERATED INVESTORS
The High Income Bond Portfolio invests in lower quality corporate bonds with a
goal of obtaining high current income and capital appreciation. Stronger than
expected economic growth negatively impacted all fixed income markets in the
first half of 1996. The surprising strength in the United States' economy
fueled fears of inflation pushing interest rates higher. This caused high
quality bond prices to fall. During the period, high yield bonds performed much
better than high quality bonds as the surprising strength of the economy
produced an improved credit outlook that helped to offset the rise in interest
rates. For example, the Lehman Brothers High Yield Index returned 3.46% during
the period while the Lehman Brothers Aggregate Index, a measure of high quality
bond performance returned -1.21%. Stated another way, the yield spread between
high yield bonds and high quality bonds narrowed as perceived credit risk
declined.
During the period, the High Income Bond Portfolio outperformed the Lehman
Brothers High Yield index while under performing the Lipper High Current Yield
average. Differences in average quality were the main factor impacting relative
performance for the Portfolio and the indices. The Portfolio typically has a
higher quality profile than the average fund and a lower quality profile than
the Lehman Brothers High Yield Index. During the first half of 1996 the rise in
interest rates had a greater negative impact on higher quality yield bonds while
lower quality high yield bonds reacted positively to the improving economy. For
example, the Lehman Brothers Single B Index returned 4.69% during the period
while the Lehman Brothers Double B Index returned 1.21%. On a security specific
basis, the Portfolio was positively impacted by company specific events during
the period. For example, PACE INDUSTRIES and MOTOR WHEEL were involved in
mergers and subsequently retired their high yield securities at premiums.
AMERISOURCE HEALTH, WATER TECHNOLOGIES and POLYMER GROUP issued equity and used
the proceeds to tender or call their high yield debt at a premium. As the
period ended, ICON HEALTH & FITNESS and HOSIERY CORPORATION OF AMERICA were
poised to retire high yield debt with the proceeds from equity offerings. The
Portfolio was negatively impacted by its lack of exposure in the casino sector,
its underweight in the specialty retail sector and its overweight in the cable
and telecommunications sectors. The Portfolio's cable and telecommunications
holdings were impacted by the longer duration of some of the securities as well
as substantial new issuance in these sectors which put pressure on the
outstanding issues.
Portfolio management believes that the US economy will continue along a path of
modest growth with low inflation. Given this economic outlook we continue to
like the prospects for high yield bonds. A modest growth economy should be a
positive from a credit perspective for high yield bonds. Supply/demand
technicals remain in balance. Positive corporate actions including merger
activity and equity issuance continue to favorably impact high yield issuers.
Finally we believe that yield spreads will continue to narrow as the positive
economic and issuer fundamentals play out.
From a strategic viewpoint the Portfolio continues to like companies impacted by
the Telecommunications deregulation bill that passed in February of 1996. TV
and radio broadcasters like SINCLAIR BROADCASTING GROUP and CHANCELLOR
BROADCASTING are poised to benefit as their industries consolidate. New
competitive local exchange carriers like TELEPORT COMMUNICATIONS GROUP and
BROOKS FIBER PROPERTIES have bright futures as the playing field has been
leveled between them and the local Bell operating companies. We continue to
like the growth aspects of the United Kingdom and cable TV companies like
TELEWEST. As usual the Portfolio continues to find attractive opportunities in
high yield issuers that have a quality business profile despite having below
investment grade financial positions.
FEDERATED INVESTORS
5
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE HIGH INCOME BOND
PORTFOLIO AND THE LEHMAN BROTHERS SINGLE "B" INDEX *
VIST LEHMAN BROTHERS
YEAR/QTR HIGH INCOME SINGLE "B" INDEX
-------- ----------- -----------------
1994 $10,000 $10,000
4/1/94 10,000 10,000
6/30/94 9,906 10,010
9/30/94 9,879 10,198
12/31/94 9,655 10,215
3/31/95 10,167 10,745
6/30/95 10,729 11,299
9/30/95 11,102 11,641
12/31/95 11,487 11,907
3/31/96 11,795 11,840
6/30/96 11,948 12,131
* 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 June 30, 1996
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
High Income Bond Portfolio 11.33% 10.78% 9.74%
"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
Portfolio 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 SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
TILT UTILITY PORTFOLIO
SUB-ADVISOR: STATE STREET GLOBAL ADVISORS
A DIVISION OF STATE STREET BANK AND TRUST [LOGO]
COMPANY
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 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.
Year-to-date performance for the utility sector has been sluggish. Heated
competition coupled with interest rate uncertainty has led to a negative impact
on performance of utility stocks. The Portfolio had a total return of 0.67% for
the six months ended June 30, 1996, compared to 0.36% total return for the S&P
Utility Index over the same period.
Predictions of market performance over the next few months are mixed. The
general consensus is that the economy will slow as consumer debt increases and
the money supply tightens. This scenario, combined with a possible decline in
corporate earnings reported for the second quarter, could result in a further
decline in the market.
Prospects for a slowing economy with the possibility of lower interest rates
could positively impact the utility sector. In addition, given the high
volatility in the market, investors are looking for a defensive sector, one
which the utility sector has historically provided.
The Portfolio is currently well positioned, holding stocks which have rising
earnings estimates and the manager believes are undervalued. Likewise, the
Portfolio remains neutral to economic events focusing on stock selection.
STATE STREET GLOBAL ADVISORS
7
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE TILT UTILITY
PORTFOLIO AND THE S&P UTILITY INDEX *
VIST S&P 500
YEAR/QTR TILT UTILITY UTILITY INDEX
-------- ------------ -------------
1994 $10,000 $10,000
4/1/94 10,000 10,000
6/30/94 9,940 9,987
9/30/94 10,180 10,076
12/31/94 10,009 9,821
3/31/95 10,604 10,484
6/30/95 11,153 11,259
9/30/95 12,369 12,521
12/31/95 13,357 13,923
3/31/96 12,989 13,260
6/30/96 13,446 13,974
* 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 June 30, 1996
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
Tilt Utility Portfolio 20.50% 13.06% 12.90%
"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
Portfolio 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 SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
U.S. GOVERNMENT BOND PORTFOLIO [LOGO]
SUB-ADVISOR: STRONG CAPITAL MANAGEMENT, INC.
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.
BOND MARKET COOLED AS ECONOMIC GROWTH APPEARED TO STRENGTHEN
1995's impressive bond market rally cooled earlier this year on reports of
stronger-than-expected economic growth in the United States. Market sentiment
went through a dramatic turnaround during the first quarter, shifting from the
expectation for further rate cuts by the Federal Reserve Board, to the
possibility of higher interest rates. This shift in sentiment had a dramatic
effect on the bond market as yields rose across all maturities.
Although the Fed lowered its Fed Funds target rate at the end of January to
5.25%, unexpectedly strong economic numbers - including a staggering number of
new jobs reported in February - led many to believe that the economy was
entering a sustained period of strong growth.
Yields on the 10-year and 30-year U.S. Treasury bonds rose substantially over
this six-month period - each increased its yield by more than 0.75%. The
10-year bond closed June 30, 1996 at 6.71%, while the 30-year bond rose to
6.87%.
OUR OUTLOOK HAS CHANGED LITTLE
While we believe the economy has certainly moved off the bottom, we do not
believe that it has entered a sustained period of rapid growth. The increase in
interest rates appears to have brought value back into the bond market, but we
don't anticipate rates changing dramatically from current levels. Therefore,
our neutral duration is likely to remain unchanged until the market has settled
down.
Although the market's view of the economy changed dramatically earlier this
year, our view changed little. We didn't expect to see a recession in 1996, and
we continue to expect GDP growth of 2.5% or less this year. In our view, the
underlying fundamentals for the U.S. bond market remain positive.
STRONG CAPITAL MANAGEMENT, INC.
9
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE U.S. GOVERNMENT
BOND PORTFOLIO AND THE LEHMAN BROTHERS GOVERNMENT BOND INDEX *
VIST
U.S. GOVT. LEHMAN BROTHERS
YEAR/QTR BOND INDEX GOVT. BOND INDEX
-------- --------- ----------------
1994 $10,000 $10,000
4/1/94 10,000 10,000
6/30/94 9,929 9,885
9/30/94 9,960 9,927
12/31/94 9,959 9,962
3/31/95 10,474 10,431
6/30/95 11,162 11,078
9/30/95 11,403 11,273
12/31/95 11,968 11,788
3/31/96 11,663 11,522
6/30/96 11,666 11,576
* 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 June 30, 1996
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
U.S. Government Bond Portfolio 4.80% 8.02% 8.37%
"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
Portfolio 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)
10
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
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. The international portion of the Portfolio
is invested in blue chips, which compliments the U.S. portion which is invested
in small cap stocks.
PERFORMANCE: The net asset value of the World Equity Portfolio increased 9.82%
during the first half of 1996. The international portion (51% of the
Portfolio), was up 6.57%. This compares with Morgan Stanley Capital
International Europe, Australia & Far East performance of 3.44%. The Russell
2000 Growth Index, which is a general measure for the small cap stock universe,
was up 11.99% year to date through June 30, 1996. The U.S. portion of the World
Equity Portfolio was up 14.10% during the same time period. Cash represented 8%
of your Portfolio.
While we had a good first half of 1996, July was a dreadful month for U.S. small
cap stocks and international markets. The Portfolio's NAV declined to $13.93
(or -8.22%) during July. This decline was due to fears of higher U.S. interest
rates. Equity markets have started to recover as interest rate fears have
subsided during the first week of August, 1996.
FIRST HALF OF 1996: INTERNATIONAL
Japan, where the Portfolio has a 28% weighting, was up 8.54% in local currency
but 2.4% in U.S. dollar terms. This is because the dollar appreciated 5.99%
during the first half of 1996. The Portfolio had 34% of its Yen position
hedged. During the first six months of 1996, we reduced the weighting of Japan
from 40% to 28%.
European markets, where the Portfolio is 15% invested, were up 8.26% and 4.61%
in local currency and U.S. dollars, respectively. Although economic growth has
been low, corporate restructuring has been a positive unfolding development in
Europe. European economies should increase in 1997 from the slow growth
experienced in 1996. Germany's growth is expected to increase from 0.75% in
1996 to 2% in 1997.
The major influence in foreign markets has been the direction of U.S. interest
rates. Fears of higher U.S. rates have increased during the year, and this had
an adverse effect on foreign markets, particularly in July as previously noted.
These fears are lessening and stock and bond markets are doing better during the
first week of August, 1996.
LOOKING AHEAD: INTERNATIONAL
The continuing dominant influence on international markets will be the direction
of U.S. interest rates and the U.S. equity market (see U.S. comment). Estimates
for European growth have been cut back for 1996, but we believe valuations are
reasonable, that we own good companies with good prospects, and economic growth
will increase in 1997.
THE REVIEW OF THE FIRST HALF OF 1996: DOMESTIC U.S.
The U.S. markets for the first six months of 1996 have been quite volatile due
to uncertainty surrounding economic reports on growth, inflation and interest
rates. The actual reported economic numbers have not been as bad as the market
had indicated by its volatility. Interest rates have remained relatively stable
and there is little evidence of inflation despite strong GDP growth. Corporate
earnings were generally good; although there were some disappointments with
earnings reports lower than expected, the majority of earnings reports met or
exceeded expectations.
11
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
June and July were difficult months as the U.S. small cap market experienced a
correction. The Russell 2000 Growth Index declined 9.42% during the month of
July, the U.S. portion of the World Equity Portfolio outperformed the Russell
2000 Growth declining 8.22% during July.
LOOKING FORWARD TO THE SECOND HALF OF 1996: DOMESTIC U.S.
We believe the US market will continue to be choppy but we remain positive on
the small cap area. As the economy slows down (we are looking for 3% GDP growth
in the third quarter versus 4.2% growth in the second quarter), we believe the
small cap growth area will remain fertile ground for good growth ideas. The
quality companies will continue to report good earnings and we will continue
with our bottom-up stock picking process.
KEYSTONE INVESTMENT MANAGEMENT COMPANY
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE WORLD EQUITY
PORTFOLIO AND THE MSCI WORLD INDEX *
VIST MSCI
YEAR/QTR WORLD EQUITY WORLD INDEX
-------- ------------ -----------
1994 $10,000 $10,000
4/1/94 10,000 10,000
6/30/94 9,830 10,301
9/30/94 10,523 10,522
12/31/94 10,707 10,447
3/31/95 10,921 10,957
6/30/95 11,806 11,375
9/30/95 13,312 11,849
12/31/95 13,310 12,329
3/31/96 13,721 12,686
6/30/96 14,646 12,886
* 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.
12
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended June 30, 1996
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
World Equity Portfolio 23.98% 13.99% 8.29%
"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
Portfolio 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)
13
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
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.
Led by the strength among stocks of consumer-products makers, the U.S. equity
market continued to advance during the first six months of 1996. Among major
stock indices, the strongest performance over the January through June span
belonged to the NASDAQ Composite, which rose 12.63% despite substantial
volatility in smaller-company and technology related shares. Concerns about the
economy's health and the likely direction of interest rates once again were the
focus of much investor attention. Over the six month period, much of the data
released suggested a strengthening economy, evidenced most visibly by falling
unemployment, increased activity in the manufacturing sector, and a general rise
in most gauges of business and consumer confidence. Fears that stronger growth
would compel the Federal Reserve to raise short-term interest rates weighed on
interest rate sensitive sectors of the market, but the broad market continued to
advance on the view that a stronger economy would lead to higher earnings for
many companies.
Small company stocks generated solid gains in the second quarter, both on an
absolute basis and relative to larger cap issues. Supporting the sector were
strong cash flows into small capitalization and aggressive growth mutual funds
during the months of April and May, however June proved difficult. After a
strong start in which both the NASDAQ Composite and the Russell 2000 indices hit
all-time highs on June 5, small cap stocks suffered a sharp correction taking a
particularly heavy toll on technology issues. Triggering the sell off was a
series of pre-announcements of earnings disappointments among technology
companies which fed concerns about earnings prospects for the sector as a whole.
We have typically found our best growth companies in the consumer, health care
and technology sectors. Although these areas had supplied strong year-to-date
performance, they received the brunt of June's market correction. The perceived
threat of inflation continues to cast a dark cloud over these companies'
reliance on future earnings to justify their current valuations. The bond
market, having become convinced that the threat of inflation is real, reacted by
selling bonds, pushing yields above the 7% level.
After strong first quarter earnings results, the market chose to discount growth
companies, especially the smaller ones, to guard against possible disappointing
second quarter earnings announcements. Positive earnings announcements, an
important indicator of future earnings direction, are the last and best defense
of the small cap market. Unfortunately, the preponderance of earnings
pre-announcements have been in the negative vein, which made July another
volatile month in the small cap world. Some of our companies may miss their
earnings expectations and experience the corresponding market sell-off.
However, by following our time-tested process, identifying companies most likely
to meet or exceed the markets' earnings expectations, we expect to continue to
capture excess returns over the long term. Although we will have periods with
significant market turmoil similar to the one we are experiencing, we remain
convinced that a long term strategy of buying quality growth companies will
remain productive.
PILGRIM BAXTER & ASSOCIATES, LTD.
14
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE SMALL CAP PORTFOLIO
AND THE RUSSELL 2000 INDEX *
VIST RUSSELL 2000
YEAR/QTR SMALL CAP INDEX
-------- ------------ ------------
5/04/95 $10,000 $10,000
6/30/95 10,939 10,676
9/30/95 12,593 11,731
12/31/95 13,008 11,985
3/31/96 14,439 12,600
6/30/96 16,705 13,230
* 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 June 30, 1996
Past 1 Life of
Year Portfolio***
---- ------------
Small Cap Portfolio 52.54% 55.54%
"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
Portfolio 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)
15
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
GROWTH & INCOME PORTFOLIO
SUB-ADVISOR: WARBURG PINCUS COUNSELLORS, INC. [LOGO]
The Growth & Income Portfolio's investment objective is to provide growth of
capital and income. The Portfolio gained 14.11% in the first six months of
1996, compared to a 10.10% rise in the S&P 500 Index over the same time period.
The Portfolio benefited from the positive performance of smaller-cap issues
within the health care and technology sectors. Gold and precious-metals shares
also contributed positively to its performance. Gold and precious-metals
outpaced much of the market in the year's first three months, although the
sector suffered a sizable correction late in the second quarter. The
Portfolio's cyclical exposure, notably its steel and paper stocks, barely budged
in price over the last three months, despite mounting evidence that the economy
was growing strongly and would potentially continue to expand. Historically,
the correlation between stronger economic growth and the performance of cyclical
stocks has been very high, but in this instance the two bore little relation.
We made a number of fairly significant adjustments to the Portfolio in the
second quarter, both as a defensive measure and in an effort to better position
the Portfolio for the remainder of the year, given our revised outlook on the
economy's prospects. We cut back the Portfolio's cyclical exposure across the
board, with a particularly sharp reduction in its holdings of steel companies.
We made smaller reductions to its weightings in oil services and paper and
forest products. The rationale for these moves is that economic growth, while
currently strong, will at some point in the next three to six months begin to
slow, the result of higher bond yields and the likely tightening of credit by
the Federal Reserve. Cyclicals, as noted, have not responded favorably this
year to signs that the economy is picking up steam; it is difficult to believe
that they will fare better amid a period of potentially slower growth.
Stocks that should do well in a slower-growth environment are banks and
financial services companies, and accordingly we have increased the Portfolio's
exposure to these issues (from 8.4% at the beginning of the year to 18.7% at the
end of June). The focus of our emphasis here remains money-center banks, though
we are finding value among financial services companies (e.g., AETNA LIFE &
CASUALTY, CHARLES SCHWAB, STUDENT LOAN MARKETING ASSOCIATION and USF&G), as
well. Recent additions to the Portfolio from the banking area include BANK OF
NEW YORK, CHASE MANHATTAN, BANKER'S TRUST, GREENPOINT BANK and MERCANTILE
BANCORP, the last a Missouri regional bank. In addition to the likelihood of a
more-favorable interest rate backdrop in the months ahead, these banks should
benefit from their ongoing restructuring efforts and share-buyback programs.
BANK OF NEW YORK, to cite one example, is in the midst of repurchasing 10% of
its outstanding stock, and as a rule most of these banks are engaged in
similarly aggressive programs.
Health care stocks should also benefit from slower growth, and we have upped the
Portfolio's weighting here as well. Health care and pharmaceutical issues
accounted for 9.4% of the portfolio as of June 30.
These two areas--banks and financial services and health care and
pharmaceuticals -- represent the major thrust of the Portfolio's repositioning
efforts over the past few months, and we will likely continue to seek attractive
opportunities in these sectors, especially in health care. We have also added,
but to a lesser extent, to the Portfolio's weightings in computers and
telecommunications, having been afforded an excellent opportunity to do so by
the June correction in technology stocks. Another area that we will look to
build selectively on price weakness is energy, based primarily on our
expectations for higher oil prices next year and into 1998.
16
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
We have maintained the Portfolio's weighting in gold and precious-metals stocks,
their poor performance during the second quarter notwithstanding. Much of the
recent weakness in gold prices was triggered by weakness in other commodities,
notably copper. Gold also pulled back on the sell-off in oil prices following
the agreement between the United Nations and Iraq regarding that country's
re-entrance into the oil market. Nothing of gold's second-quarter's weakness is
reflective of a deterioration in the metal's fundamentals, which remain very
positive.
WARBURG, PINCUS COUNSELLORS, INC.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GROWTH & INCOME
PORTFOLIO AND THE S&P 500 INDEX *
VIST S&P 500
YEAR/QTR GROWTH & INCOME INDEX
-------- --------------- -------
5/04/95 $10,000 $10,000
6/30/95 10,152 10,232
9/30/95 11,145 11,043
12/31/95 11,310 11,708
3/31/96 12,747 12,337
6/30/96 12,907 12,890
* 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.
17
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
CONTINUED
AVERAGE ANNUAL TOTAL RETURNS **
Periods ended June 30, 1996
Past 1 Life of
Year Portfolio***
---- ------------
Growth & Income Portfolio 27.05% 26.51%
"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
Portfolio 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)
18
<PAGE>
This page has been left blank intentionally.
19
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<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--(4.6%)
Abbey National North America. . . . 5.130% 07/18/1996 $ 400,000 $ 399,031
-----------
FINANCE COMMERCIAL--(4.6%)
Ciesco, Inc.. . . . . . . . . . . . 4.870% 08/07/1996 400,000 397,998
-----------
FINANCE RETAIL--(2.3%)
Norwest Financial, Inc. . . . . . . 5.120% 09/27/1996 200,000 197,497
-----------
TOTAL COMMERCIAL
PAPER--(Cost $994,526) . . . . 11.5% 994,526
-----------
CORPORATE NOTES
BANKING--(11.2%)
Deutsche Bank Financial, Inc. . . . 8.800% 01/15/1997 555,000 564,981
NBD Bancorp, Inc. . . . . . . . . . 5.000% 07/15/1996 400,000 400,000
-----------
964,981
LEASING--(0.4%)
Navistar Financial Corporation. . . 5.750% 11/15/1996 36,487 36,486
-----------
TOTAL CORPORATE
NOTES--(Cost $1,001,467) . . . 11.6% 1,001,467
-----------
GOVERNMENT AND AGENCY SECURITIES
U.S. GOVERNMENT SECURITIES--(15.2%)
United States Treasury Note . . . . 6.875% 02/28/1997 800,000 808,558
United States Treasury Note . . . . 7.500% 01/31/1997 500,000 506,658
-----------
TOTAL GOVERNMENT AND AGENCY
SECURITIES--(Cost $1,315,216) 15.2% 1,315,216
-----------
VARIABLE RATE INSTRUMENTS
BANKING--(33.6%)
Board of Industrial Development - City
of Pelham (Columbus Bank &
Trust, LOC) (a) . . . . . . . . 5.780% 07/04/1996 385,000 385,000
Maryland State Industrial Authority
(First National Bank, Maryland LOC) (a) 5.630% 07/01/1996 500,000 500,000
Mississippi Business Finance Corporation
(CoAmerica Bank, LOC) (a) . . . . 5.580% 07/04/1996 375,000 375,000
PNC Bank NA . . . . . . . . . . . . 5.320% 07/01/1996 500,000 499,863
Roby Company (Huntington National
Bank, LOC) (a). . . . . . . . . . 5.580% 07/04/1996 390,000 390,000
SMM Trust (Morgan Guaranty Swap) (a) 5.616% 09/26/1996 500,000 500,000
Vista Funding Corporation (Fifth Third
Bank, LOC) (a). . . . . . . . . . 5.577% 07/04/1996 258,000 258,000
-----------
TOTAL VARIABLE
RATE INSTRUMENTS--(Cost $2,907,863) 33.6% 2,907,863
-----------
</TABLE>
See notes to financial statements.
20
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-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 AGREEMENTS (B)--(60.6%)
Chase Manhattan . . . . . . . . . . 5.450% 07/01/1996 $ 2,100,954 $ 2,100,000
Paine Webber Group, Inc.. . . . . . 5.500% 07/01/1996 500,229 500,000
Swiss Bank Corporation. . . . . . . 5.480% 07/01/1996 500,228 500,000
Union Bank Switzerland. . . . . . . 5.450% 07/01/1996 2,135,970 2,135,000
-----------
TOTAL SHORT TERM INVESTMENTS--
(Cost $5,235,000) 60.6% 5,235,000
-----------
TOTAL INVESTMENTS--(Cost $11,454,072) 132.5% 11,454,072
OTHER ASSETS LESS LIABILITIES-- (32.5)% (2,812,454)
-------- -----------
NET ASSETS-- 100.0% $8,641,618
-------- -----------
-------- -----------
</TABLE>
(a) Variable rate demand note. Interest rate is the rate in effect and
maturity date represents the next reset date at June 30, 1996.
(b) The repurchase agreements, dated 6/28/96, 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.
21
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE--(2.9%)
McDonnell Douglas Corporation . . . . . . . . . . . . . . 20,000 $ 970,000
Precision Castparts Corporation . . . . . . . . . . . . . 10,000 430,000
----------
1,400,000
BANKS--(2.3%)
Bankamerica Corporation . . . . . . . . . . . . . . . . . 7,500 568,125
Fifth Third Bancorp . . . . . . . . . . . . . . . . . . . 10,500 567,000
----------
1,135,125
CHEMICALS--(7.3%)
Goodrich (B.F.) Company . . . . . . . . . . . . . . . . . 16,000 598,000
IMC Fertilizer Group, Inc.. . . . . . . . . . . . . . . . 32,000 1,204,000
Olin Corporation. . . . . . . . . . . . . . . . . . . . . 10,000 892,500
Praxair, Inc. . . . . . . . . . . . . . . . . . . . . . . 20,500 866,125
----------
3,560,625
COMMUNICATION EQUIPMENT--(1.6%)
Andrew Corporation (a). . . . . . . . . . . . . . . . . . 14,250 765,938
----------
COMPUTER RELATED--(8.1%)
Cisco Systems, Inc. (a) . . . . . . . . . . . . . . . . . 37,000 2,095,125
First Data Corporation. . . . . . . . . . . . . . . . . . 11,000 875,875
HBO & Company . . . . . . . . . . . . . . . . . . . . . . 15,000 1,016,250
----------
3,987,250
COMPUTER SERVICES--(1.1%)
Computer Associates International, Inc. . . . . . . . . . 7,500 534,375
----------
COSMETICS & TOILETRIES--(2.0%)
Gillette Company. . . . . . . . . . . . . . . . . . . . . 15,500 966,812
----------
DRUGS--(7.3%)
Alza Corporation (a). . . . . . . . . . . . . . . . . . . 14,000 383,250
Amgen, Inc. (a) . . . . . . . . . . . . . . . . . . . . . 14,000 756,000
Cardinal Health, Inc. . . . . . . . . . . . . . . . . . . 10,800 778,950
Pfizer, Inc.. . . . . . . . . . . . . . . . . . . . . . . 12,000 856,500
Schering Plough Corporation . . . . . . . . . . . . . . . 13,000 815,750
----------
3,590,450
ELECTRONICS--(2.3%)
Adaptec, Inc. (a) . . . . . . . . . . . . . . . . . . . . 13,000 615,875
Dynatech Corporation (a). . . . . . . . . . . . . . . . . 15,000 487,500
----------
1,103,375
ENVIRONMENTAL--(3.1%)
Thermo Electron Corporation . . . . . . . . . . . . . . . 36,000 1,498,500
----------
FINANCIAL SERVICES--(6.7%)
Finova Group, Inc.. . . . . . . . . . . . . . . . . . . . 10,500 511,875
Green Tree Financial, Inc.. . . . . . . . . . . . . . . . 23,000 718,750
Money Store, Inc. . . . . . . . . . . . . . . . . . . . . 15,000 331,875
</TABLE>
See notes to financial statements.
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
FINANCIAL SERVICES--(CONTINUED)
Sunamerica, Inc. . . . . . . . . . . . . 10,500 $ 593,250
Travelers, Inc.. . . . . . . . . . . . . 24,750 1,129,219
------------
3,284,969
FOOD & BEVERAGES--(2.9%)
Coca Cola Company. . . . . . . . . . . . 12,000 586,500
PepsiCo, Inc.. . . . . . . . . . . . . . 24,000 849,000
------------
1,435,500
HEALTH CARE--(1.4%)
Omnicare, Inc. . . . . . . . . . . . . . 26,000 689,000
------------
INSURANCE--(2.4%)
20th Century Industries (a). . . . . . . 22,000 365,750
American International Group, Inc. . . . 8,000 789,000
------------
1,154,750
MACHINERY & EQUIPMENT--(4.6%)
Bombardier, Inc. . . . . . . . . . . . . 49,000 733,941
Dover Corporation. . . . . . . . . . . . 10,000 461,250
Gleason Corporation. . . . . . . . . . . 12,500 487,500
IDEX Corporation . . . . . . . . . . . . 14,500 551,000
------------
2,233,691
MANUFACTURING--(0.9%)
Millipore Corporation. . . . . . . . . . 10,000 418,750
------------
MEDICAL SUPPLIES & SERVICES--(2.4%)
Healthcare Compare Corporation (a) . . . 13,500 658,125
Johnson & Johnson. . . . . . . . . . . . 11,000 544,500
------------
1,202,625
OIL & GAS--(8.2%)
Helmerich & Payne, Inc.. . . . . . . . . 18,000 659,250
Louisiana Land & Exploration Company . . 15,000 864,375
Occidental Petroleum Corporation . . . . 13,000 321,750
Oryx Energy Company (a). . . . . . . . . 30,000 487,500
Panenergy Corporation. . . . . . . . . . 15,000 493,125
Sonat Offshore Drilling, Inc.. . . . . . 24,000 1,212,000
------------
4,038,000
PACKAGING--(1.1%)
Sealed Air Corporation (a) . . . . . . . 16,000 538,000
------------
PETROLEUM SERVICES--(7.0%)
Baker Hughes, Inc. . . . . . . . . . . . 25,000 821,875
Halliburton Company. . . . . . . . . . . 10,000 555,000
Rowan Companies, Inc. (a). . . . . . . . 35,000 516,250
Smith International, Inc. (a). . . . . . 27,000 813,375
Tidewater, Inc.. . . . . . . . . . . . . 16,000 702,000
------------
3,408,500
See notes financial statements.
23
<PAGE>
VARIABLE INVESTORS SERIES TRUST
COMMON STOCK PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
PRINTING & PUBLISHING--(1.2%)
Omnicom Group. . . . . . . . . . . . . . . . . . . . . . . . 13,000 $ 604,500
------------
RETAIL-SPECIALTY--(2.0%)
Autozone, Inc. (a) . . . . . . . . . . . . . . . . . . . . . 12,500 434,375
Consolidated Stores Corporation (a). . . . . . . . . . . . . 15,000 551,250
------------
985,625
SOFTWARE--(6.1%)
BMC Software, Inc. (a) . . . . . . . . . . . . . . . . . . . 25,000 1,493,750
Microsoft Corporation (a). . . . . . . . . . . . . . . . . . 6,000 720,750
Sterling Software, Inc. (a). . . . . . . . . . . . . . . . . 10,000 770,000
------------
2,984,500
STEEL--(1.3%)
Texas Industries, Inc. . . . . . . . . . . . . . . . . . . . 9,500 651,938
------------
TELECOMMUNICATIONS--(7.9%)
ADC Telecommunications, Inc. (a) . . . . . . . . . . . . . . 10,000 450,000
Newbridge Networks Corporation (a) . . . . . . . . . . . . . 24,000 1,572,000
Sprint Corporation . . . . . . . . . . . . . . . . . . . . . 20,000 840,000
Tellabs, Inc. (a). . . . . . . . . . . . . . . . . . . . . . 15,000 1,003,125
------------
3,865,125
TELECOMMUNICATION EQUIPMENT--(1.0%)
Loral Space & Communications (a) . . . . . . . . . . . . . . 36,000 490,500
------------
TOTAL COMMON STOCKS--(Cost $35,688,872) 95.1% 46,528,423
------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(5.2%)
State Street Bank and Trust
Company (b) 4.250% 07/01/1996 $ 2,520,893 2,520,000
------------
TOTAL SHORT TERM INVESTMENT--(Cost $2,520,000) 5.2% 2,520,000
TOTAL INVESTMENTS--(Cost $38,208,872) 100.3% 49,048,423
OTHER ASSETS LESS LIABILITIES-- (0.3)% (125,081)
------ ------------
NET ASSETS-- 100.0% 48,923,342
------ ------------
------ ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with a value of $2,570,700.
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 financial statements.
24
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<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--(1.4%)
Tracor, Inc. 10.875% 08/15/2001 $ 125,000 $ 132,188
-----------
AUTOMOTIVE--(2.7%)
Aftermarket Technology Company 12.000% 08/01/2004 75,000 81,000
Collins & Aikman Products Company 11.500% 04/15/2006 75,000 76,219
Exide Corporation 10.000% 04/15/2005 100,000 98,000
-----------
255,219
BANKING--(1.4%)
First Nationwide Holdings, Inc. 12.250% 05/15/2001 100,000 108,000
First Nationwide Parent Holdings 12.500% 04/15/2003 25,000 26,063
-----------
134,063
BEVERAGE & TOBACCO--(0.9%)
Dr Pepper Bottling Holdings Company (a) 17.130% 02/15/2003 100,000 82,000
-----------
BROADCAST RADIO & TELEVISION--(6.0%)
Chancellor Broadcasting Company 12.500% 10/01/2004 75,000 82,312
Heritage Media Corporation 8.750% 02/15/2006 25,000 23,188
Park Communications, Inc. (b) 13.750% 05/15/2004 25,000 26,250
Pegasus Media & Communications, Inc. 12.500% 07/01/2005 50,000 53,500
SCI Television, Inc. 11.000% 06/30/2005 50,000 51,938
SFX Broadcasting, Inc. (b) 10.750% 05/15/2006 75,000 74,625
Sinclair Broadcast Group, Inc. 10.000% 12/15/2003 125,000 119,062
Sullivan Broadcasting 10.250% 12/15/2005 50,000 47,875
Young Broadcasting, Inc. 10.125% 02/15/2005 50,000 47,875
Young Broadcasting, Inc. 9.000% 01/15/2006 50,000 44,375
-----------
571,000
BUSINESS EQUIPMENT & SERVICES--(2.8%)
Knoll, Inc. (b) 10.875% 03/15/2006 75,000 76,500
Monarch Acquisition Corporation 12.500% 07/01/2003 125,000 132,188
United Stationers Supply Company 12.750% 05/01/2005 50,000 53,625
-----------
262,313
CABLE TELEVISION--(9.4%)
Bell Cablemedia plc (a) 22.001% 07/15/2004 50,000 35,188
Cablevision Systems Company 9.875% 02/15/2013 75,000 69,750
CAI Wireless Systems, Inc. 12.250% 09/15/2002 50,000 52,250
Charter Communications Southeast, LP (b) 11.250% 03/15/2006 50,000 49,250
CS Wireless Systems, Inc. (a) (b) 13.212% 03/01/2006 100,000 51,500
Echostar Satellite Broadcasting (a) (b) 12.887% 03/15/2004 75,000 47,625
International Cabletel, Inc. (a) 19.885% 10/15/2003 125,000 90,312
International Cabletel, Inc. (a) 25.963% 04/15/2005 125,000 80,156
Le Group Videotron Ltee. 10.625% 02/15/2005 100,000 104,375
Lenfest Communications, Inc. (b) 10.500% 06/15/2006 50,000 50,250
Peoples Choice TV Corporation (a) 13.590% 06/01/2004 100,000 59,000
TeleWest plc (a) 23.082% 10/01/2007 175,000 103,250
UIH Australia / Pacific, Inc. (a) (b) 13.542% 05/15/2006 75,000 40,313
Wireless One, Inc. 13.000% 10/15/2003 50,000 52,500
-----------
885,719
</TABLE>
See notes to financial statements.
25
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-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--(4.6%)
Crain Industries, Inc. . . . . . . . . . . . . . . . 13.500% 08/15/2005 $ 50,000 $ 53,000
G-I Holdings, Inc. (a). . . . . . . . . . . . . . . . 10.073% 10/01/1998 35,000 28,087
Harris Chemical North America, Inc. . . . . . . . . . 10.250% 07/15/2001 100,000 100,000
Polymer Group, Inc. . . . . . . . . . . . . . . . . . 12.250% 07/15/2002 83,000 88,810
RBX Corporation . . . . . . . . . . . . . . . . . . . 11.250% 10/15/2005 50,000 47,250
Texas Petrochemical Corporation (b) . . . . . . . . . 11.125% 07/01/2006 50,000 50,750
Uniroyal Technology Corporation . . . . . . . . . . . 11.750% 06/01/2003 75,000 67,500
---------
435,397
CLOTHING & TEXTILES--(2.1%)
Dan River, Inc. . . . . . . . . . . . . . . . . . . . 10.125% 12/15/2003 75,000 72,469
WestPoint Stevens, Inc. . . . . . . . . . . . . . . . 9.375% 12/15/2005 125,000 121,250
---------
193,719
CONSUMER PRODUCTS--(3.8%)
American Safety Razor Company . . . . . . . . . . . . 9.875% 08/01/2005 50,000 50,500
Hosiery Corporation of America, Inc. . . . . . . . . 13.750% 08/01/2002 50,000 53,750
ICON Health & Fitness, Inc. . . . . . . . . . . . . . 13.000% 07/15/2002 100,000 111,125
Playtex Family Products Corporation . . . . . . . . . 9.000% 12/15/2003 100,000 93,625
Simmons Company (b) . . . . . . . . . . . . . . . . . 10.750% 04/15/2006 25,000 24,750
Twin Laboratories, Inc. (b) . . . . . . . . . . . . . 10.250% 05/15/2006 25,000 25,437
---------
. . . . . . . . . . . . . . . . . . . . . . . . . . . 359,187
CONTAINER & GLASS PRODUCTS--(2.1%)
Owens Illinois, Inc. . . . . . . . . . . . . . . . . 9.950% 10/15/2004 150,000 150,563
Packaging Resources, Inc. (b) . . . . . . . . . . . . 11.625% 05/01/2003 50,000 50,625
---------
201,188
COSMETICS & TOILETRIES--(1.0%)
Revlon Consumer Products Corporation . . . . . . . . 9.375% 04/01/2001 100,000 98,000
---------
ECOLOGICAL SERVICES & EQUIPMENT--(3.1%)
Allied Waste Industries, Inc. . . . . . . . . . . . . 12.000% 2/01/2004 150,000 164,250
ICF Kaiser International, Inc. . . . . . . . . . . . 13.000% 12/31/2003 50,000 48,000
Mid-American Waste Systems, Inc. (c). . . . . . . . . 12.250% 02/15/2003 125,000 80,000
---------
292,250
FOOD & DRUG RETAILERS--(2.1%)
Carr Gottstein Foods Company . . . . . . . . . . . . 12.000% 11/15/2005 50,000 51,250
Ralph's Grocery Company . . . . . . . . . . . . . . . 10.450% 06/15/2004 100,000 95,500
Smiths Food & Drug . . . . . . . . . . . . . . . . . 11.250% 05/15/2007 50,000 50,625
---------
197,375
FOOD PRODUCTS--(3.5%)
Curtice-Burns Foods, Inc. . . . . . . . . . . . . . . 12.250% 02/01/2005 50,000 48,875
Keebler Corporation (b) . . . . . . . . . . . . . . . 10.750% 07/01/2006 25,000 25,750
PMI Acquisition Corporation . . . . . . . . . . . . . 10.250% 09/01/2003 100,000 98,250
Specialty Foods Corporation . . . . . . . . . . . . . 11.250% 08/15/2003 125,000 107,500
Van De Kamp's, Inc. . . . . . . . . . . . . . . . . . 12.000% 09/15/2005 50,000 53,125
---------
333,500
</TABLE>
See notes to financial statements.
26
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
FOOD SERVICES--(1.5%)
Americold Corporation . . . . . . . . . . . . . . . . 12.875% 05/01/2008 $ 50,000 $ 51,000
Flagstar Corporation . . . . . . . . . . . . . . . . 10.750% 09/15/2001 100,000 87,250
---------
138,250
FOREST PRODUCTS--(4.0%)
Four M Corporation (b). . . . . . . . . . . . . . . . 12.000% 06/01/2006 25,000 25,562
Repap New Brunswick, Inc. . . . . . . . . . . . . . . 10.625% 04/15/2005 75,000 70,875
Riverwood International Corporation . . . . . . . . . 10.875% 04/01/2008 100,000 98,250
S.D. Warren Company . . . . . . . . . . . . . . . . . 12.000% 12/15/2004 100,000 105,000
Stone Container Corporation . . . . . . . . . . . . . 11.500% 10/01/2004 75,000 75,844
---------
375,531
HEALTH CARE--(1.7%)
Dade International, Inc. (b). . . . . . . . . . . . . 11.125% 05/01/2006 50,000 51,750
Tenet Healthcare Corporation . . . . . . . . . . . . 10.125% 03/01/2005 100,000 105,250
---------
157,000
HOTELS, MOTELS, INNS & CASINOS--(0.5%)
Courtyard Marriott Ltd. . . . . . . . . . . . . . . . 10.750% 02/01/2008 50,000 48,875
---------
INDUSTRIAL PRODUCTS & EQUIPMENT--(1.7%)
Cabot Safety Acquisition Corporation . . . . . . . . 12.500% 07/15/2005 100,000 110,250
Spreckels Industries, Inc. . . . . . . . . . . . . . 11.500% 09/01/2000 50,000 51,500
---------
161,750
LEISURE & ENTERTAINMENT--(3.9%)
Affinity Group, Inc. . . . . . . . . . . . . . . . . 11.500% 10/15/2003 50,000 50,375
AMF Group, Inc. (a) (b) . . . . . . . . . . . . . . . 12.742% 03/15/2006 200,000 110,000
Cobblestone Golf Group, Inc. (b). . . . . . . . . . . 11.500% 06/01/2003 25,000 25,125
Premier Parks, Inc. . . . . . . . . . . . . . . . . . 12.000% 08/15/2003 50,000 53,000
Six Flags Theme Parks, Inc. (a) . . . . . . . . . . . 15.943% 06/15/2005 150,000 127,125
---------
365,625
MACHINERY & EQUIPMENT--(1.7%)
Alvey Systems, Inc. . . . . . . . . . . . . . . . . . 11.375% 01/31/2003 75,000 76,500
Primeco, Inc. . . . . . . . . . . . . . . . . . . . . 12.750% 03/01/2005 75,000 80,250
---------
156,750
OIL & GAS--(4.3%)
Benton Oil & Gas Company (b). . . . . . . . . . . . . 11.625% 05/01/2003 50,000 51,500
Falcon Drilling Company, Inc. . . . . . . . . . . . . 12.500% 03/15/2005 100,000 111,125
Giant Industries, Inc. . . . . . . . . . . . . . . . 9.750% 11/15/2003 125,000 122,500
Mesa Operating Company . . . . . . . . . . . . . . . 10.625% 07/01/2006 50,000 50,750
United Meridian Corporation . . . . . . . . . . . . . 10.375% 10/15/2005 75,000 76,875
---------
412,750
PRINTING & PUBLISHING--(2.6%)
Adams Outdoor Advertising Ltd. (b). . . . . . . . . . 10.750% 03/15/2006 50,000 51,250
Affiliated Newspaper (a). . . . . . . . . . . . . . . 22.170% 07/01/2006 250,000 172,500
Hollinger International . . . . . . . . . . . . . . . 9.250% 02/01/2006 25,000 22,969
---------
246,719
RETAILERS--(1.3%)
Brylane Capital Corporation . . . . . . . . . . . . . 10.000% 09/01/2003 125,000 120,000
---------
</TABLE>
See notes to financial statements.
27
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
SERVICES--(0.6%)
Coinmach Corporation . . . . . . . . . . . . . . . . 11.750% 11/15/2005 $ 50,000 $ 52,375
---------
STEEL--(3.7%)
Bar Technologies, Inc. (b). . . . . . . . . . . . . . 13.500% 04/01/2001 25,000 25,375
Bayou Steel Corporation . . . . . . . . . . . . . . . 10.250% 03/01/2001 25,000 23,438
EnviroSource, Inc. . . . . . . . . . . . . . . . . . 9.750% 06/15/2003 125,000 114,062
Geneva Steel Company . . . . . . . . . . . . . . . . 9.500% 01/15/2004 50,000 39,625
GS Technologies Operating
Company, Inc. . . . . . . . . . . . . . . . . . . 12.000% 09/01/2004 100,000 102,000
Republic Engineered Steels, Inc. . . . . . . . . . . 9.875% 12/15/2001 50,000 46,562
---------
351,062
SURFACE TRANSPORTATION--(5.9%)
Gearbulk Holdings Ltd. . . . . . . . . . . . . . . . 11.250% 12/01/2004 100,000 104,500
OMI Corporation . . . . . . . . . . . . . . . . . . . 10.250% 11/01/2003 50,000 49,063
Sea Containers Ltd. . . . . . . . . . . . . . . . . . 12.500% 12/01/2004 125,000 138,125
Stena AB . . . . . . . . . . . . . . . . . . . . . . 10.500% 12/15/2005 75,000 74,437
Trans Ocean Container Corporation . . . . . . . . . . 12.250% 07/01/2004 75,000 77,250
Trism, Inc. . . . . . . . . . . . . . . . . . . . . . 10.750% 12/15/2000 125,000 117,187
---------
560,562
TELECOMMUNICATIONS & CELLULAR--(7.7%)
Brooks Fiber Properties, Inc. (a) (b) . . . . . . . . 12.559% 03/01/2006 250,000 133,125
Cellular Communications
International, Inc. (a) . . . . . . . . . . . . . 12.181% 08/15/2000 100,000 62,500
Dial Call Communications, Inc. (a). . . . . . . . . . 25.346% 04/15/2004 100,000 64,000
Fonorola, Inc. . . . . . . . . . . . . . . . . . . . 12.500% 08/15/2002 25,000 26,781
Intermedia Communications Florida (a) . . . . . . . . 30.051% 05/15/2006 50,000 28,000
Millicom International Cellular S A (a) (b) . . . . . 13.456% 06/01/2006 100,000 52,875
ProNet, Inc. . . . . . . . . . . . . . . . . . . . . 11.875% 06/15/2005 100,000 99,000
Teleport Communications Group (a). . . . . . . . . . 11.125% 07/01/2007 125,000 72,812
USA Mobile Communications, Inc. . . . . . . . . . . . 9.500% 02/01/2004 125,000 114,062
Vanguard Cellular Systems, Inc. . . . . . . . . . . . 9.375% 04/15/2006 75,000 72,563
---------
725,718
UTILITIES--(1.5%)
California Energy Company, Inc. (a) . . . . . . . . . 11.188% 01/15/2004 150,000 143,250
---------
TOTAL CORPORATE BONDS--(Cost $8,325,263) 89.5% 8,449,335
--------
GOVERNMENT AND AGENCY SECURITY
U.S. Government Security--(5.3%)
United States Treasury Note . . . . . . . . . . . . . 6.375% 03/31/2001 500,000 497,955
---------
TOTAL GOVERNMENT AND AGENCY SECURITY--(Cost $501,484) 5.3% 497,955
---------
</TABLE>
See notes to financial statements.
28
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
BROADCAST RADIO & TELEVISION--(0.0%)
Pegasus Media & Communications, Inc. (b) (d) . . . . . . . . . . . . 5 $ 0
-------
CONSUMER PRODUCTS--(0.0%)
Hosiery Corporation of America, Inc. (d) . . . . . . . . . . . . . . 50 250
-------
FOOD & DRUG RETAILERS--(0.2%)
Grand Union Company (d). . . . . . . . . . . . . . . . . . . . . . . 3,535 22,977
-------
PRINTING & PUBLISHING--(0.1%)
Affiliated Newspaper (d) . . . . . . . . . . . . . . . . . . . . . . 250 6,250
-------
TOTAL COMMON STOCKS--(Cost $201,313) . . . . . . . . . . . . . . 0.3% 29,477
-------
PREFERRED STOCKS
BROADCAST RADIO & TELEVISION--(0.5%)
Chancellor Broadcasting Company (b) (d). . . . . . . . . . . . . . . 500 51,000
-------
PRINTING & PUBLISHING--(0.5%)
K III Communications Corporation . . . . . . . . . . . . . . . . . . 500 50,000
-------
TELECOMMUNICATIONS & CELLULAR--(0.7%)
PanAmSat Corporation . . . . . . . . . . . . . . . . . . . . . . . . 59 67,127
-------
UTILITIES--(0.6%)
El Paso Electric Company (d) . . . . . . . . . . . . . . . . . . . . 500 52,625
-------
TOTAL PREFERRED STOCKS--(Cost $206,210) . . . . . . . . . . . . 2.3% 220,752
-------
WARRANTS
CABLE TELEVISION--(0.0%)
Wireless One, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . 150 900
-------
CONSUMER PRODUCTS--(0.0%)
IHF Capital, Inc. (b). . . . . . . . . . . . . . . . . . . . . . . . 100 2,500
-------
ECOLOGICAL SERVICES & EQUIPMENT--(0.0%)
ICF Kaiser International, Inc. . . . . . . . . . . . . . . . . . . . 240 150
-------
TELECOMMUNICATIONS & CELLULAR--(0.0%)
Nextel Communications, Inc. . . . . . . . . . . . . . . . . . . . . 100 2
-------
TOTAL WARRANTS--(Cost $1,558) . . . . . . . . . . . . . . . . . 0.0% 3,552
-------
</TABLE>
See notes to financial statements.
29
<PAGE>
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-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--(2.5%)
State Street Bank and Trust Company (e) 4.250% 07/01/1996 $ 237,084 $ 237,000
-----------
TOTAL SHORT TERM
INVESTMENT--(Cost $237,000) 2.5% 237,000
-----------
TOTAL INVESTMENTS--(Cost $9,472,828) 99.9% 9,438,071
OTHER ASSETS LESS LIABILITIES-- 0.1% 10,767
----- -----------
NET ASSETS-- 100.0% $ 9,448,838
----- -----------
----- -----------
</TABLE>
(a) Step bond. Interest rate shown represents yield to maturity.
(b) 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 June 30, 1996, these securities
aggregated $1,173,687 or 12.4% of the Net Assets of the Portfolio.
(c) Mid-American Waste Systems, Inc. defaulted on an interest payment due
February 15, 1996.
(d) Non-income producing security.
(e) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with a value of $243,380.
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.
30
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE--(2.0%)
McDonnell Douglas Corporation. . . . . . . . . . . . . . . 7,040 $ 341,440
Precision Castparts Corporation. . . . . . . . . . . . . . 6,000 258,000
-----------
599,440
BANKS--(2.1%)
Bankamerica Corporation. . . . . . . . . . . . . . . . . . 4,500 340,875
Fifth Third Bancorp. . . . . . . . . . . . . . . . . . . . 4,960 267,840
-----------
608,715
CHEMICALS--(4.8%)
Goodrich (B.F.) Company. . . . . . . . . . . . . . . . . . 7,000 261,625
IMC Fertilizer Group, Inc. . . . . . . . . . . . . . . . . 11,680 439,460
Olin Corporation . . . . . . . . . . . . . . . . . . . . . 4,000 357,000
Praxair, Inc.. . . . . . . . . . . . . . . . . . . . . . . 8,700 367,575
-----------
1,425,660
COMMUNICATION EQUIPMENT--(1.0%)
Andrew Corporation (a) . . . . . . . . . . . . . . . . . . 5,300 284,875
-----------
COMPUTER RELATED--(4.8%)
Cisco Systems, Inc. (a). . . . . . . . . . . . . . . . . . 13,440 761,040
First Data Corporation . . . . . . . . . . . . . . . . . . 3,600 286,650
HBO & Company. . . . . . . . . . . . . . . . . . . . . . . 5,600 379,400
-----------
1,427,090
COMPUTER SERVICES--(1.0%)
Computer Associates International, Inc.. . . . . . . . . . 4,000 285,000
-----------
COSMETICS & TOILETRIES--(1.2%)
Gillette Company . . . . . . . . . . . . . . <PAGE>
. . . . . . . 5,520 344,310
-----------
DRUGS--(4.8%)
Alza Corporation (a) . . . . . . . . . . . . . . . . . . . 5,480 150,015
Amgen, Inc. (a). . . . . . . . . . . . . . . . . . . . . . 6,000 324,000
Cardinal Health, Inc.. . . . . . . . . . . . . . . . . . . 4,940 356,298
Pfizer, Inc. . . . . . . . . . . . . . . . . . . . . . . . 4,160 296,920
Schering Plough Corporation. . . . . . . . . . . . . . . . 4,640 291,160
-----------
1,418,393
ELECTRONICS--(1.4%)
Adaptec, Inc. (a). . . . . . . . . . . . . . . . . . . . . 4,160 197,080
Dynatech Corporation (a) . . . . . . . . . . . . . . . . . 7,000 227,500
-----------
424,580
ENVIRONMENTAL--(2.4%)
Thermo Electron Corporation. . . . . . . . . . . . . . . . 16,830 700,549
-----------
FINANCIAL SERVICES--(4.6%)
Finova Group, Inc. . . . . . . . . . . . . . . . . . . . . 3,760 183,300
Green Tree Financial, Inc. . . . . . . . . . . . . . . . . 10,000 312,500
Money Store, Inc.. . . . . . . . . . . . . . . . . . . . . 6,000 132,750
</TABLE>
See notes to financial statements.
31
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
FINANCIAL SERVICES--(CONTINUED)
Sunamerica, Inc.. . . . . . . . . . . . . . . . . . 5,000 $ 282,500
Travelers, Inc. . . . . . . . . . . . . . . . . . . 9,540 435,263
-----------
1,346,313
FOOD & BEVERAGES--(1.8%)
Coca Cola Company . . . . . . . . . . . . . . . . . 4,800 234,600
PepsiCo, Inc. . . . . . . . . . . . . . . . . . . . 8,800 311,300
-----------
545,900
HEALTH CARE--(1.2%)
Omnicare, Inc.. . . . . . . . . . . . . . . . . . . 13,000 344,500
-----------
INSURANCE--(1.4%)
20th Century Industries (a) . . . . . . . . . . . . 6,520 108,395
American International Group, Inc.. . . . . . . . . 3,160 311,655
-----------
420,050
MACHINERY & EQUIPMENT--(3.1%)
Bombardier, Inc.. . . . . . . . . . . . . . . . . . 18,400 275,602
Dover Corporation . . . . . . . . . . . . . . . . . 4,680 215,865
Gleason Corporation . . . . . . . . . . . . . . . . 5,480 213,720
IDEX Corporation. . . . . . . . . . . . . . . . . . 5,600 212,800
-----------
917,987
MANUFACTURING--(1.0%)
Millipore Corporation . . . . . . . . . . . . . . . 7,000 293,125
-----------
MEDICAL SUPPLIES & SERVICES--(1.8%)
Healthcare Compare Corporation (a). . . . . . . . . 4,960 241,800
Johnson & Johnson . . . . . . . . . . . . . . . . . 6,000 297,000
-----------
538,800
OIL & GAS--(5.6%)
Helmerich & Payne, Inc. . . . . . . . . . . . . . . 7,200 263,700
Louisiana Land & Exploration Company. . . . . . . . 6,500 374,562
Occidental Petroleum Corporation. . . . . . . . . . 4,240 104,940
Oryx Energy Company (a) . . . . . . . . . . . . . . 12,000 195,000
Panenergy Corporation . . . . . . . . . . . . . . . 6,000 197,250
Sonat Offshore Drilling, Inc. . . . . . . . . . . . 10,000 505,000
-----------
1,640,452
PACKAGING--(0.8%)
Sealed Air Corporation (a). . . . . . . . . . . . . 6,920 232,685
-----------
PETROLEUM SERVICES--(4.9%)
Baker Hughes, Inc.. . . . . . . . . . . . . . . . . 9,000 295,875
Halliburton Company . . . . . . . . . . . . . . . . 5,640 313,020
Rowan Companies, Inc. (a) . . . . . . . . . . . . . 20,000 295,000
Smith International, Inc. (a) . . . . . . . . . . . 9,000 271,125
Tidewater, Inc. . . . . . . . . . . . . . . . . . . 6,000 263,250
-----------
1,438,270
</TABLE>
See notes to financial statements.
32
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
PRINTING & PUBLISHING--(0.9%)
Omnicom Group . . . . . . . . . . . . . . . . . . . 5,800 $ 269,700
-----------
RETAIL-SPECIALTY--(1.7%)
Autozone, Inc. (a). . . . . . . . . . . . . . . . . 5,400 187,650
Consolidated Stores Corporation (a) . . . . . . . . 9,000 330,750
-----------
518,400
SOFTWARE--(4.0%)
BMC Software, Inc. (a). . . . . . . . . . . . . . . 8,340 498,315
Microsoft Corporation (a) . . . . . . . . . . . . . 2,740 329,143
Sterling Software, Inc. (a) . . . . . . . . . . . . 4,500 346,500
-----------
1,173,958
STEEL--(0.8%)
Texas Industries, Inc.. . . . . . . . . . . . . . . 3,440 236,070
-----------
TELECOMMUNICATIONS--(5.4%)
ADC Telecommunications, Inc. (a). . . . . . . . . . 4,440 199,800
Newbridge Networks Corporation (a). . . . . . . . . 10,000 655,000
Sprint Corporation. . . . . . . . . . . . . . . . . 7,000 294,000
Tellabs, Inc. (a) . . . . . . . . . . . . . . . . . 6,500 434,687
-----------
1,583,487
TELECOMMUNICATION EQUIPMENT--(0.7%)
Loral Space & Communications (a). . . . . . . . . . 16,000 218,000
-----------
TOTAL COMMON STOCKS--(Cost $15,221,973) 65.2% 19,236,309
-----------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY PRINCIPAL
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
INDUSTRIALS--(1.8%)
BP America, Inc. . . . . . . . . . 8.500% 04/15/2001 $ 250,000 269,532
duPont (E.I.) deNemours . . . . . . 8.650% 12/01/1997 250,000 257,338
-----------
TOTAL CORPORATE BONDS--(Cost $502,109) 1.8% 526,870
-----------
GOVERNMENT AND AGENCY SECURITIES
FEDERAL AGENCY--(1.3%)
Government National Mortgage Association 6.000% 11/15/2008 138,436 132,292
Government National Mortgage Association 6.500% 10/15/2008 137,861 134,285
Government National Mortgage Association 7.000% 10/15/2008 128,897 127,727
-----------
394,304
U.S. GOVERNMENT SECURITIES--(16.9%)
United States Treasury Note . . . . 5.375% 05/31/1998 500,000 493,360
United States Treasury Note . . . . 5.875% 11/15/2005 1,000,000 942,030
United States Treasury Note . . . . 6.375% 08/15/2002 500,000 496,015
</TABLE>
See notes to financial statements.
33
<PAGE>
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<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
U.S. GOVERNMENT SECURITIES--(CONTINUED)
United States Treasury Note . . . . 6.500% 05/31/2001 $ 500,000 $ 500,235
United States Treasury Note . . . . 6.875% 05/15/2006 1,000,000 1,011,090
United States Treasury Note . . . . 7.500% 01/31/1997 500,000 505,310
United States Treasury Bond . . . . 7.250% 08/15/2022 1,000,000 1,023,910
-----------
4,971,950
-----------
TOTAL GOVERNMENT AND AGENCY
SECURITIES--(Cost $5,437,859) 18.2% 5,366,254
-----------
SHORT TERM INVESTMENTS
FEDERAL AGENCY--(5.0%)
Federal Farm Credit Bank Discount Note 5.290% 08/23/1996 1,500,000 1,488,318
-----------
<CAPTION>
MATURITY
AMOUNT
------
REPURCHASE AGREEMENT--(12.8%)
State Street Bank and Trust Company (b) 4.250% 07/01/1996 $ 3,787,341 3,786,000
-----------
TOTAL SHORT TERM
INVESTMENTS--(Cost $5,274,318) 17.8% 5,274,318
-----------
TOTAL INVESTMENTS--(Cost $26,436,259) 103.0% 30,403,751
OTHER ASSETS LESS LIABILITIES-- (3.0)% (889,950)
------ -----------
NET ASSETS-- 100.0% $29,513,801
------ -----------
------ -----------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with a value of $3,863,656.
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.
34
<PAGE>
VARIABLE INVESTORS SERIES TRUST
TILT UTILITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ ------
COMMON STOCKS
ELECTRIC UTILITIES--(37.8%)
American Electric Power, Inc. . . . . . . . 7,900 $ 336,738
Atlantic Energy, Inc. . . . . . . . . . . . 31,300 571,225
Boston Edison Company . . . . . . . . . . . 900 22,950
Central & South West Corporation. . . . . . 24,900 722,100
Consolidated Edison Company . . . . . . . . 22,600 661,050
Delmarva Power & Light Company. . . . . . . 19,700 413,700
DQE, Inc. . . . . . . . . . . . . . . . . . 14,800 407,000
Enova Corporation . . . . . . . . . . . . . 19,500 450,937
Entergy Corporation . . . . . . . . . . . . 17,200 488,050
General Public Utilities Corporation. . . . 11,600 408,900
LG & E Energy Corporation . . . . . . . . . 3,900 89,213
Long Island Lighting Company. . . . . . . . 39,000 653,250
Ohio Edison Company . . . . . . . . . . . . 30,700 671,562
Portland General Corporation. . . . . . . . 6,800 209,950
Rochester Gas & Electric Corporation. . . . 6,100 131,150
Texas Utilities Company . . . . . . . . . . 2,400 102,600
----------
6,340,375
GAS & PIPELINE UTILITIES--(9.2%)
Columbia Gas Systems, Inc.. . . . . . . . . 400 20,850
Consolidated Natural Gas Company. . . . . . 2,900 151,525
Pacific Enterprises . . . . . . . . . . . . 24,400 722,850
Panenergy Corporation . . . . . . . . . . . 13,600 447,100
Washington Gas Light Company. . . . . . . . 8,900 195,800
----------
1,538,125
TELEPHONE--(52.2%)
Alltel Corporation. . . . . . . . . . . . . 20,400 627,300
Ameritech Corporation . . . . . . . . . . . 11,900 706,562
AT&T Corporation. . . . . . . . . . . . . . 9,500 589,000
Bell Atlantic Corporation . . . . . . . . . 11,200 714,000
Bellsouth Corporation . . . . . . . . . . . 17,400 737,325
Century Telephone Enterprises, Inc. . . . . 20,700 659,812
Frontier Corporation. . . . . . . . . . . . 17,700 542,063
GTE Corporation . . . . . . . . . . . . . . 16,900 756,275
NYNEX Corporation . . . . . . . . . . . . . 13,700 650,750
Pacific Telesis Group . . . . . . . . . . . 21,100 712,125
SBC Communications, Inc.. . . . . . . . . . 15,000 738,750
Southern N E Telecommunications Corporation 15,700 659,400
Sprint Corporation. . . . . . . . . . . . . 15,700 659,400
----------
8,752,762
----------
TOTAL COMMON STOCKS--(Cost $14,020,427) 99.2% 16,631,262
----------
See notes to financial statements.
35
<PAGE>
VARIABLE INVESTORS SERIES TRUST
TILT UTILITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MARKET
AND TITLE OF ISSUE RATE SHARES VALUE
------------------ -------- ------ ------
<S> <C> <C> <C> <C>
MUTUAL FUNDS--(3.5%)
Dreyfus Cash Management Plus (a). . . 5.263% 583,678 $ 583,678
-----------
TOTAL MUTUAL FUNDS--(Cost $583,678) 3.5% 583,678
-----------
TOTAL INVESTMENTS--(Cost $14,604,105) 102.7% 17,214,940
OTHER ASSETS LESS LIABILITIES-- (2.7)% (458,954)
----- -----------
NET ASSETS-- 100.0% $16,775.986
----- -----------
----- -----------
</TABLE>
(a) Interest rate shown is the 7 day yield as of June 30, 1996.
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
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
GOVERNMENT AND AGENCY SECURITIES
ADJUSTABLE RATE MORTGAGE--(3.7%)
Federal National Mortgage Association . . . . 7.649% 08/01/2025 $ 388,738 $400,020
--------
FEDERAL AGENCY--(2.4%)
Tennessee Valley Authority. . . . . . . . . . 6.375% 06/15/2005 270,000 259,248
---------
MORTGAGE BACKED SECURITIES--(28.4%)
Federal Home Loan Mortgage Corporation. . . . 8.000% 05/01/2026 545,399 550,341
Federal Home Loan Mortgage Corporation. . . . 8.500% 01/01/2003 197,403 202,880
Federal Home Loan Mortgage Corporation. . . . 9.000% 06/01/2016 240,421 250,712
Federal Home Loan Mortgage Corporation. . . . 9.500% 04/01/2007 149,004 157,893
Federal Home Loan Mortgage Corporation. . . . 10.000% 10/01/2005 138,599 147,601
Federal National Mortgage Association . . . . 10.000% 04/01/2020 145,981 158,480
Federal National Mortgage Association . . . . 12.500% 05/01/2015 624,433 710,923
Government National Mortgage Association. . . 6.500% 12/16/2021 210,000 172,987
Government National Mortgage Association. . . 7.500% 04/15/2024 271,245 267,598
Government National Mortgage Association. . . 9.000% 01/15/2008 424,714 445,576
----------
3,064,991
U.S. GOVERNMENT SECURITIES--(44.7%)
United States Treasury Note . . . . . . . . . 5.875% 11/15/2005 1,490,000 1,403,857
United States Treasury Note . . . . . . . . . 6.500% 04/30/1999 450,000 452,671
United States Treasury Note . . . . . . . . . 6.875% 07/31/1999 455,000 461,682
United States Treasury Note . . . . . . . . . 7.875% 08/15/2001 345,000 365,485
United States Treasury Note . . . . . . . . . 8.000% 08/15/1999 525,000 549,281
United States Treasury Bond . . . . . . . . . 6.875% 08/15/2025 535,000 529,482
United States Treasury Bond . . . . . . . . . 7.500% 11/15/2024 115,000 121,936
United States Treasury Bond . . . . . . . . . 7.625% 02/15/2025 145,000 156,373
United States Treasury Bond . . . . . . . . . 11.625% 11/15/2004 600,000 786,937
----------
4,827,704
----------
TOTAL GOVERNMENT AND AGENCY SECURITIES--(Cost $8,646,174) 79.2% 8,551,963
---------
CORPORATE BONDS
BROADCASTING--(2.2%)
Viacom, Inc.. . . . . . . . . . . . . . . . . 6.750% 01/15/2003 250,000 235,881
--------
ENTERTAINMENT--(2.7%)
Time Warner, Inc. . . . . . . . . . . . . . . 7.750% 06/15/2005 300,000 292,433
--------
TRANSPORTATION--(2.1%)
AMR Corporation . . . . . . . . . . . . . . . 9.800% 10/01/2021 195,000 228,255
--------
TOTAL CORPORATE BONDS--(Cost $785,289) 7.0% 756,569
--------
</TABLE>
See notes to financial statements.
37
<PAGE>
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-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
FEDERAL HOUSING AUTHORITY--(6.2%)
FHA Project Loan. . . . . . . . . . . . . . . 3.025% 11/01/2006 $ 465,369 398,691
FHA Project Loan. . . . . . . . . . . . . . . 7.500% 11/15/2030 275,000 266,922
----------
TOTAL OTHER MORTGAGES--(Cost $675,237) 6.2% 665,613
----------
<CAPTION>
MATURITY
AMOUNT
------
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(4.0%)
State Street Bank and Trust Company (a) . . . 4.250% 07/01/1996 $ 432,153 432,000
-------
TOTAL SHORT TERM INVESTMENT--(Cost $432,000) 4.0% 432,000
-------
TOTAL INVESTMENTS--(Cost $10,538,700) 96.4% 10,406,145
OTHER ASSETS LESS LIABILITIES-- 3.6% 389,082
------ -----------
NET ASSETS-- 100.0% $10,795,227
------ -----------
------ -----------
</TABLE>
(a) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with a value of $441,126.
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
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
AUSTRALIA--(3.3%)
Broken Hill Proprietary Company . . . . . . . . . 20,079 $277,240
CRA Ltd.. . . . . . . . . . . . . . . . . . . . . 2,580 39,658
Memtec Ltd. . . . . . . . . . . . . . . . . . . . 7,034 257,038
National Australia Bank . . . . . . . . . . . . . 11,754 108,534
WMC Ltd. . . . . . . . . . . . . . . . . . . . . 15,000 107,269
---------
789,739
BELGIUM--(1.0%)
Bekaert SA. . . . . . . . . . . . . . . . . . . . 295 237,968
---------
CANADA--(3.0%)
Brascan Ltd.. . . . . . . . . . . . . . . . . . . 4,000 74,416
Hudsons Bay Company . . . . . . . . . . . . . . . 2,555 38,738
Loewen Group, Inc.. . . . . . . . . . . . . . . . 3,500 106,643
Potash Corporation Saskatchewan, Inc. . . . . . . 3,520 234,615
Quebecor. . . . . . . . . . . . . . . . . . . . . 17,839 278,959
---------
733,371
FINLAND--(0.2%)
Kemira Oy . . . . . . . . . . . . . . . . . . . . 5,700 59,688
---------
FRANCE--(1.3%)
Accor . . . . . . . . . . . . . . . . . . . . . . 154 21,557
Carrefour . . . . . . . . . . . . . . . . . . . . 150 84,104
Credit Commerce France. . . . . . . . . . . . . . 2,601 120,400
Peugeot SA. . . . . . . . . . . . . . . . . . . . 345 46,214
Society Elf Aquitaine . . . . . . . . . . . . . . 652 47,991
---------
320,266
GERMANY--(0.5%)
Bayer AG. . . . . . . . . . . . . . . . . . . . . 2,700 95,445
Schering AG . . . . . . . . . . . . . . . . . . . 350 25,482
---------
120,927
HONG KONG--(1.5%)
HSBC Holdings . . . . . . . . . . . . . . . . . . 18,000 272,065
Sime Darby HK . . . . . . . . . . . . . . . . . . 88,000 94,925
---------
366,990
ITALY--(2.0%)
Telecom Italia. . . . . . . . . . . . . . . . . . 86,000 192,359
Telecom Italia Mobilaire. . . . . . . . . . . . . 140,000 301,257
---------
493,616
See notes to financial statements.
39
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
JAPAN--(27.7%)
Bridgestone Corporation . . . . . . . . . . . . . 12,000 $229,324
Canon, Inc. . . . . . . . . . . . . . . . . . . . 33,000 687,971
Daifuku Company . . . . . . . . . . . . . . . . . 17,000 261,144
Daiichi Pharmaceutical Company. . . . . . . . . . 16,000 247,245
Fuji Coca Cola Bottling . . . . . . . . . . . . . 15,000 197,504
Fuji Photo Film Company . . . . . . . . . . . . . 14,000 442,921
Futaba Industrial . . . . . . . . . . . . . . . . 3,000 54,314
Hitachi . . . . . . . . . . . . . . . . . . . . . 11,000 102,592
Jusco Company . . . . . . . . . . . . . . . . . . 10,000 328,259
Kita Kyushu Coca. . . . . . . . . . . . . . . . . 5,000 123,440
Mitsui Marine and Fire. . . . . . . . . . . . . . 48,000 382,280
Nichido Fire and Marine . . . . . . . . . . . . . 67,200 520,444
Nichiei Company . . . . . . . . . . . . . . . . . 2,000 133,498
Sharp Corporation . . . . . . . . . . . . . . . . 37,000 649,568
Sodick Company. . . . . . . . . . . . . . . . . . 14,000 167,695
Sony Corporation. . . . . . . . . . . . . . . . . 10,200 672,445
Sumitomo Marine and Fire. . . . . . . . . . . . . 65,000 567,595
Taisho Pharmaceutical Company . . . . . . . . . . 15,000 325,058
Toshiba Corporation . . . . . . . . . . . . . . . 28,000 199,698
Toyota Motor Company. . . . . . . . . . . . . . . 17,000 425,913
---------
6,718,908
MALAYSIA--(0.8%)
Genting Berhad. . . . . . . . . . . . . . . . . . 12,000 93,806
Sime Darby Berhad . . . . . . . . . . . . . . . . 35,000 96,813
---------
190,619
NETHERLANDS--(1.3%)
Akzo Nv . . . . . . . . . . . . . . . . . . . . . 520 62,351
Philips Electronic. . . . . . . . . . . . . . . . 950 30,915
Van Ommeren Kon . . . . . . . . . . . . . . . . . 5,400 212,770
---------
306,036
SPAIN--(1.0%)
BCO Santander SA. . . . . . . . . . . . . . . . . 3,900 182,196
Repsol SA . . . . . . . . . . . . . . . . . . . . 1,470 51,161
---------
233,357
SWEDEN--(3.2%)
Asea AB . . . . . . . . . . . . . . . . . . . . . 1,000 105,890
Astra AB Series A . . . . . . . . . . . . . . . . 3,500 154,907
Astra AB Series B . . . . . . . . . . . . . . . . 1,890 82,508
Electrolux AB . . . . . . . . . . . . . . . . . . 2,000 100,754
See notes to financial statements.
40
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
SWEDEN--(Continued)
Esselte AB. . . . . . . . . . . . . . . . . . . . 6,000 $122,808
Swedish Match (a) . . . . . . . . . . . . . . . . 8,100 25,205
Volvo AB. . . . . . . . . . . . . . . . . . . . . 8,100 184,755
---------
776,827
SWITZERLAND--(1.6%)
Ciba Geigy AG . . . . . . . . . . . . . . . . . . 80 97,585
Fotolabo SA (a) . . . . . . . . . . . . . . . . . 220 91,505
Nestle SA . . . . . . . . . . . . . . . . . . . . 180 205,743
---------
394,833
UNITED KINGDOM--(2.5%)
Antofagasta Holdings. . . . . . . . . . . . . . . 11,000 54,667
Compass Group . . . . . . . . . . . . . . . . . . 6,700 61,391
Lloyds TSB Group. . . . . . . . . . . . . . . . . 21,902 107,146
Pearson . . . . . . . . . . . . . . . . . . . . . 11,000 113,434
Severn Trent. . . . . . . . . . . . . . . . . . . 4,400 37,173
Smithkline Beecham. . . . . . . . . . . . . . . . 8,828 94,391
Vodafone Group. . . . . . . . . . . . . . . . . . 28,000 104,147
Williams Holdings . . . . . . . . . . . . . . . . 5,900 31,016
---------
603,365
UNITED STATES--(37.2%)
Agco Corporation. . . . . . . . . . . . . . . . . 9,000 249,750
Amre, Inc.. . . . . . . . . . . . . . . . . . . . 4,500 98,438
Amresco, Inc. . . . . . . . . . . . . . . . . . . 5,500 94,188
Apple South, Inc. . . . . . . . . . . . . . . . . 8,000 214,000
Applebees International, Inc. . . . . . . . . . . 6,000 192,750
BJ Services Company (a) . . . . . . . . . . . . . 2,300 80,788
Blyth Industries, Inc. (a). . . . . . . . . . . . 5,700 258,638
Brooks Fiber Properties, Inc. (a) . . . . . . . . 4,000 132,000
Champion Enterprises, Inc. (a). . . . . . . . . . 13,000 271,375
Cidco, Inc. (a) . . . . . . . . . . . . . . . . . 4,500 158,625
Cognex Corporation (a). . . . . . . . . . . . . . 4,000 64,500
Cytotherapeutics (a). . . . . . . . . . . . . . . 7,000 77,875
Devry, Inc., Delaware (a) . . . . . . . . . . . . 8,000 360,000
Emeritus Corporation (a). . . . . . . . . . . . . 10,000 176,250
Epic Design Technology, Inc. (a). . . . . . . . . 8,000 202,000
Expert Software, Inc. (a) . . . . . . . . . . . . 8,300 64,325
Geoworks (a). . . . . . . . . . . . . . . . . . . 6,500 230,750
Gilead Sciences, Inc. (a) . . . . . . . . . . . . 4,000 101,000
Health Management Associates (a). . . . . . . . . 13,500 273,375
HFS, Inc. (a) . . . . . . . . . . . . . . . . . . 7,000 490,000
See notes to financial statements.
41
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
UNITED STATES--(CONTINUED)
Inso Corporation (a). . . . . . . . . . . . . 5,400 $282,825
Kemet Corporation (a) . . . . . . . . . . . . 4,700 94,000
Mens Wearhouse, Inc. (a). . . . . . . . . . . 6,000 193,500
Microchip Technology, Inc. (a). . . . . . . . 5,500 136,125
Netmanage, Inc. (a) . . . . . . . . . . . . . 2,900 31,900
Neurogen Corporation (a). . . . . . . . . . . 3,150 81,112
Newpark Resource, Inc. (a). . . . . . . . . . 6,300 231,525
Occusystems, Inc. (a) . . . . . . . . . . . . 8,000 299,000
Office Max, Inc.(a) . . . . . . . . . . . . . 9,450 225,619
Om Group, Inc.. . . . . . . . . . . . . . . . 2,600 102,050
Outback Steakhouse, Inc. (a). . . . . . . . . 5,000 172,422
P Common, Inc. (a). . . . . . . . . . . . . . 4,300 135,450
Phymatrix Corporation (a) . . . . . . . . . . 5,500 127,875
Project Software & Development, Inc. (a). . . 9,000 421,875
Railtex, Inc. (a) . . . . . . . . . . . . . . 5,600 144,200
Raptor Systems, Inc. (a). . . . . . . . . . . 4,000 106,000
Staples, Inc. (a) . . . . . . . . . . . . . . 10,500 204,750
Station Casinos, Inc. (a) . . . . . . . . . . 10,000 143,750
Studio Plus Hotels, Inc. (a). . . . . . . . . 6,000 198,000
Swift Transportation, Inc. (a). . . . . . . . 10,000 191,250
Synopsys, Inc. (a). . . . . . . . . . . . . . 8,000 318,000
TCF Financial Corporation . . . . . . . . . . 8,000 266,000
Teradyne, Inc. (a). . . . . . . . . . . . . . 6,000 103,500
Thermedics, Inc. (a). . . . . . . . . . . . . 8,000 200,000
Tiffany & Company . . . . . . . . . . . . . . 1,600 116,800
Tower Automotive, Inc. (a). . . . . . . . . . 4,500 110,250
Vitalcom, Inc. (a). . . . . . . . . . . . . . 10,000 172,500
Winstar Communications, Inc. (a). . . . . . . 11,000 274,312
Xilinx, Inc. (a). . . . . . . . . . . . . . . 5,000 158,750
-----------
9,033,967
-----------
TOTAL COMMON STOCKS--(Cost $16,334,976) 88.1% 21,380,477
-----------
PREFERRED STOCK
GERMANY--(0.5%)
Grohe Friedrich AG. . . . . . . . . . . . . . 380 110,214
-----------
TOTAL PREFERRED STOCK--(Cost $101,754) 0.5% 110,214
-----------
See notes financial statements.
42
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<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 SECURITY
UNITED STATES--(7.4%)
Federal Home Loan Bank
Consolidated Discount Note. . . 5.400% 07/01/1996 $ 1,795,000 $ 1,795,000
-----------
TOTAL GOVERNMENT AND AGENCY SECURITY--(Cost $1,795,000) 7.4% 1,795,000
-----------
TOTAL INVESTMENTS--(Cost $18,231,730) 96.0% 23,285,691
OTHER ASSETS LESS LIABILITIES-- 4.0% 982,606
------- -----------
NET ASSETS-- 100.0% $24,268,297
------- -----------
------- -----------
</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 statement.
43
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
ANALYSIS OF INDUSTRY CLASSIFICATIONS
JUNE 30, 1996 (UNAUDITED)
PERCENT OF
INDUSTRY NET ASSETS VALUE
-------- ---------- -----
Agricultural Machinery. . . . . . . . . 1.0% $ 249,750
Appliances. . . . . . . . . . . . . . . 0.6 131,669
Automotive. . . . . . . . . . . . . . . 3.6 862,058
Banking . . . . . . . . . . . . . . . . 2.8 683,195
Broadcasting/Publishing . . . . . . . . 1.6 392,393
Building Construction . . . . . . . . . 0.5 110,214
Business/Public . . . . . . . . . . . . 1.7 418,619
Chemicals . . . . . . . . . . . . . . . 3.6 860,039
Commercial Services . . . . . . . . . . 1.9 466,643
Computer Software & Services. . . . . . 1.4 336,750
Conglomerates . . . . . . . . . . . . . 0.7 171,229
Construction. . . . . . . . . . . . . . 1.1 271,375
Construction Materials. . . . . . . . . 0.1 31,016
Drugs & Health Care . . . . . . . . . . 3.9 936,200
Ecological Services & Equipment . . . . 1.0 231,525
Electric Utilities. . . . . . . . . . . 0.4 105,890
Electrical Equipment. . . . . . . . . . 0.7 158,625
Electronics . . . . . . . . . . . . . . 9.8 2,381,179
Energy Sources. . . . . . . . . . . . . 1.6 376,392
Entertainment . . . . . . . . . . . . . 0.6 143,750
Federal Agency. . . . . . . . . . . . . 7.4 1,795,000
Fertilizer. . . . . . . . . . . . . . . 1.0 234,615
Financial Services. . . . . . . . . . . 2.5 600,831
Food & Beverages. . . . . . . . . . . . 0.9 205,744
Gold Mining . . . . . . . . . . . . . . 0.2 54,667
Health & Personal Care. . . . . . . . . 4.2 1,029,003
Hospital Management . . . . . . . . . . 1.1 273,375
Hotels & Restaurants. . . . . . . . . . 5.5 1,350,120
Industrial Components . . . . . . . . . 2.1 521,605
Insurance . . . . . . . . . . . . . . . 4.5 1,088,039
Insurance Contracts . . . . . . . . . . 1.6 382,280
Leisure/Tourism . . . . . . . . . . . . 0.4 93,806
Machinery & Equipment . . . . . . . . . 2.8 685,877
Merchandising . . . . . . . . . . . . . 5.3 1,283,275
See notes to financial statements.
44
<PAGE>
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
ANALYSIS OF INDUSTRY CLASSIFICATIONS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
PERCENT OF
INDUSTRY NET ASSETS VALUE
-------- ---------- -----
Metals. . . . . . . . . . . . . . . . . 1.0% $ 245,365
Office Equipment. . . . . . . . . . . . 2.8 687,971
Oil . . . . . . . . . . . . . . . . . . 0.3 80,788
Packaging . . . . . . . . . . . . . . . 1.3 320,944
Software. . . . . . . . . . . . . . . . 5.4 1,320,925
Telecommunications. . . . . . . . . . . 4.2 1,007,525
Textiles. . . . . . . . . . . . . . . . 0.5 132,000
Tobacco . . . . . . . . . . . . . . . . 0.1 25,205
Transportation. . . . . . . . . . . . . 1.5 356,970
Trucking & Freight Forwarding . . . . . 0.8 191,250
----- -------------
TOTAL . . . . . . . . . . . . . . . 96.0% $ 23,285,691
----- -------------
----- -------------
See notes to financial statements.
45
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AIR TRANSPORTATION--(1.7%)
Atlas Air, Inc. (a). . . . . . . . . . . . . . 2,800 $ 161,000
----------
AUTO FINANCE--(0.6%)
Oxford Resources Corporation (a) . . . . . . . 2,400 55,800
----------
AUTOMATED DATA COLLECTION--(0.4%)
Zebra Technologies Corporation (a) . . . . . . 2,000 35,500
----------
BIOTECHNOLOGY--(0.5%)
Idexx Labs, Inc. (a) . . . . . . . . . . . . . 1,300 51,025
----------
BROADCASTING--(0.8%)
Emmis Broadcasting Corporation (a) . . . . . . 1,600 80,000
----------
BUSINESS SERVICES--(0.7%)
Payment Services, Inc. (a) . . . . . . . . . . 2,400 68,700
----------
CLIENT-SERVER SOFTWARE--(2.7%)
Applix, Inc. (a) . . . . . . . . . . . . . . . 1,700 48,875
Project Software & Development, Inc. (a) . . . 2,800 131,250
Remedy Corporation (a) . . . . . . . . . . . . 1,050 76,650
----------
256,775
COMPUTER SOFTWARE & SERVICES--(1.6%)
Aspen Technology, Inc. (a) . . . . . . . . . . 500 27,500
Dendrite International, Inc. (a) . . . . . . . 1,600 55,200
Sapient Corporation (a). . . . . . . . . . . . 1,700 71,825
----------
154,525
CONNECTORS--(0.7%)
Cable Design Technologies Corporation (a). . . 2,100 68,775
----------
CONSUMER APPAREL--(4.4%)
Nautica Enterprises, Inc. (a). . . . . . . . . 3,800 109,250
St. John Knits, Inc. . . . . . . . . . . . . . 2,900 129,412
Tommy Hilfiger Corporation (a) . . . . . . . . 2,100 112,613
Wolverine World Wide, Inc. (a) . . . . . . . . 2,000 65,000
----------
416,275
CONSUMER PRODUCTS--(0.9%)
Cidco, Inc. (a). . . . . . . . . . . . . . . . 2,300 81,075
----------
CONSUMER SERVICES--(0.9%)
Regis Corporation. . . . . . . . . . . . . . . 1,300 40,625
Veterinary Centers of America, Inc. (a). . . . 2,200 49,225
----------
89,850
CORRECTIONAL SERVICES--(1.7%)
Corrections Corporation of America (a) . . . . 2,300 161,000
----------
DATACOMMUNICATIONS--(0.4%)
Microcom, Inc. (a) . . . . . . . . . . . . . . 2,900 36,613
----------
</TABLE>
See notes to financial statements.
46
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
DESIGN-MANUFACTURING AUTOMATION--(0.6%)
Epic Design Technology, Inc. (a) . . . . . . . 2,100 $ 53,025
----------
DRUGS & HEALTH CARE--(8.6%)
Access Health, Inc. (a). . . . . . . . . . . . 800 37,800
CNS, Inc. (a). . . . . . . . . . . . . . . . . 2,700 65,475
Conmed Corporation (a) . . . . . . . . . . . . 1,600 42,600
CRA Managed Care, Inc. (a) . . . . . . . . . . 1,100 49,225
Dura Pharmaceuticals, Inc. (a) . . . . . . . . 1,000 56,000
Hologic, Inc. (a). . . . . . . . . . . . . . . 1,000 44,250
Jones Medical Industries, Inc. . . . . . . . . 1,400 46,550
Orthodontic Centers of America, Inc. (a) . . . 1,200 31,800
Orthologic Corporation (a) . . . . . . . . . . 2,900 36,975
Pediatrix Medical Group (a). . . . . . . . . . 1,800 87,300
Physicians Resource Group, Inc. (a). . . . . . 1,800 60,075
Renal Treatment Centers, Inc. (a). . . . . . . 3,200 92,000
Target Therapeutics, Inc. (a). . . . . . . . . 1,400 57,400
Techne Corporation (a) . . . . . . . . . . . . 1,500 43,875
Total Renal Care Holdings, Inc. (a). . . . . . 1,600 67,600
----------
818,925
ELECTRONICS--(1.5%)
Intermediate Telephone, Inc. (a) . . . . . . . 1,700 44,519
Octel Communications Corporation (a) . . . . . 2,700 53,325
SDL, Inc. (a). . . . . . . . . . . . . . . . . 1,600 44,400
----------
142,244
EMPLOYMENT SERVICE--(4.7%)
Accustaff, Inc. (a). . . . . . . . . . . . . . 4,500 122,625
Alternative Resources Corporation (a). . . . . 1,600 58,800
Career Horizons, Inc. (a). . . . . . . . . . . 3,000 105,000
Computer Horizons Corporation (a). . . . . . . 2,000 79,000
Corestaff, Inc. (a). . . . . . . . . . . . . . 1,900 85,025
----------
450,450
ENTERTAINMENT--(1.3%)
Regal Cinemas, Inc. (a). . . . . . . . . . . . 2,650 121,237
----------
ENVIRONMENTAL SERVICES--(4.2%)
Sanifill, Inc. (a) . . . . . . . . . . . . . . 1,300 64,025
Tetra Tech, Inc. (a) . . . . . . . . . . . . . 4,375 87,500
United States Filter Corporation (a) . . . . . 1,500 52,125
United Waste Systems, Inc. (a) . . . . . . . . 6,200 199,950
----------
403,600
FINANCIAL SERVICES--(2.8%)
Amresco, Inc.. . . . . . . . . . . . . . . . . 4,900 83,912
Sirrom Capital Corporation . . . . . . . . . . 2,100 57,225
Transaction Systems Architects Inc. (a). . . . 1,800 120,600
----------
261,737
</TABLE>
See notes to financial statements.
47
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
GRAPHIC-IMAGE PROCESSING--(1.8%)
Electronics For Imaging, Inc. (a). . . . . . . 2,400 $ 166,500
----------
HEALTH CARE--(0.8%)
Rural/Metro Corporation (a). . . . . . . . . . 2,200 75,350
----------
HEALTH CARE-MANAGEMENT SERVICES--(1.0%)
Quintiles Transnational Corporation (a). . . . 1,500 98,625
----------
HEALTH INFORMATION SYSTEMS--(1.0%)
MDL Information Systems, Inc. (a). . . . . . . 1,500 44,625
Medic Computer Systems, Inc. (a) . . . . . . . 600 48,675
----------
93,300
HOTELS & RESTAURANTS--(0.6%)
Wyndham Hotel Corporation (a). . . . . . . . . 2,500 52,188
----------
INFORMATION SYSTEMS--(0.9%)
HCIA, Inc. (a) . . . . . . . . . . . . . . . . 1,300 81,900
----------
INSURANCE--(0.4%)
HCC Insurance Holdings, Inc. . . . . . . . . . 1,700 38,250
----------
MANUFACTURING--(0.5%)
Chicago Miniature Lamp, Inc. (a) . . . . . . . 1,300 49,400
----------
NETWORKING--(0.5%)
Shiva Corporation (a). . . . . . . . . . . . . 600 48,000
----------
NETWORKING SOFTWARE--(1.3%)
McAfee Associates, Inc. (a). . . . . . . . . . 2,475 121,275
----------
NON-DURABLES--(1.7%)
Blyth Industries, Inc. (a) . . . . . . . . . . 3,600 163,350
----------
PHARMACEUTICAL SERVICES--(1.4%)
Express Scripts, Inc. (a). . . . . . . . . . . 1,000 46,000
Omnicare, Inc. . . . . . . . . . . . . . . . . 3,200 84,800
----------
130,800
PHYSICIAN PRACTICE MANAGEMENT--(1.8%)
Compdent Corporation (a) . . . . . . . . . . . 1,800 83,700
Physician Reliance Network, Inc. (a) . . . . . 3,900 86,775
----------
170,475
RESTAURANTS--(1.5%)
Boston Chicken, Inc. (a) . . . . . . . . . . . 1,200 39,000
Landrys Seafood Restaurant, Inc. (a) . . . . . 1,400 34,650
Papa Johns International, Inc. (a) . . . . . . 1,350 65,812
----------
139,462
RETAIL-CATALOG--(1.2%)
CDW Computer Centers, Inc. (a) . . . . . . . . 1,700 118,150
----------
</TABLE>
See notes to financial statements.
48
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
RETAIL-OFFICE PRODUCTS--(1.4%)
US Office Products Company (a) . . . . . . . 3,200 $134,400
--------
RETAIL-SPECIALTY--(1.1%)
MSC Industrial Direct Inc. (a) . . . . . . . 1,700 54,825
Sunglass Hut International, Inc. (a) . . . . 2,100 51,188
--------
106,013
SEMICONDUCTOR EQUIPMENT--(0.4%)
Helix Technology Corporation . . . . . . . . 1,100 42,625
--------
SEMICONDUCTOR MANUFACTURING--(2.4%)
DSP Communications, Inc. (a) . . . . . . . . 4,500 231,187
--------
SERVICE-EQUIPMENT--(0.9%)
Input/Output, Inc. (a) . . . . . . . . . . . 2,500 80,938
--------
SERVICES--(1.1%)
Ciber, Inc. (a). . . . . . . . . . . . . . . 3,500 72,362
Ha Lo Industries, Inc. (a) . . . . . . . . . 1,350 35,100
--------
107,462
SERVICE TELEMARKETING--(1.2%)
APAC Teleservices, Inc. (a). . . . . . . . . 1,600 57,600
Nova Corporation (a) . . . . . . . . . . . . 1,800 60,750
--------
118,350
SOFTWARE-GENERAL--(5.6%)
Cooper & Chyan Technology, Inc. (a). . . . . 1,000 21,875
Inso Corporation (a) . . . . . . . . . . . . 1,200 62,850
Rational Software Corporation (a). . . . . . 3,200 172,000
Security Dynamics Technology, Inc. (a) . . . 1,000 82,250
Veritas Software Company (a) . . . . . . . . 1,600 68,800
Videoserver, Inc. (a). . . . . . . . . . . . 1,900 74,100
Visio Corporation (a). . . . . . . . . . . . 1,300 46,800
--------
528,675
SUPPLIES--(1.7%)
Gulf South Medical Supply, Inc. (a). . . . . 1,900 74,100
Physician Sales & Service, Inc. (a). . . . . 3,600 87,300
--------
161,400
SURFACE TRANSPORTATION--(1.8%)
Fritz Company, Inc. (a). . . . . . . . . . . 1,900 61,275
Wisconsin Central Transport Corporation (a). 3,300 107,250
--------
168,525
SYSTEMS INTEGRATED VALUE ADDED RESELLERS--(1.4%)
Cambridge Technology Partners (a). . . . . . 4,500 137,250
--------
See notes to financial statements.
49
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
TECHNOLOGY--(1.5%)
Citrix Systems, Inc. (a) . . . . . . . . . . . . . . . . . . . . . 1,100 $ 41,800
Premisys Communications, Inc. (a). . . . . . . . . . . . . . . . . 1,200 73,200
Scopus Technology (a). . . . . . . . . . . . . . . . . . . . . . . 2,000 31,000
------------
146,000
TECHNOLOGY SEMI-CONDUCTOR--(0.7%)
Vitesse Semiconductor Corporation (a). . . . . . . . . . . . . . . 2,600 62,400
------------
TELECOMMUNICATION EQUIPMENT--(0.6%)
Coherent Communications System Corporation (a) . . . . . . . . . . 2,900 61,625
------------
TELEMARKETING--(1.2%)
Sitel Corporation (a). . . . . . . . . . . . . . . . . . . . . . . 2,800 117,600
------------
VOICE-CALL TRANSACTION PROCESSING--(2.4%)
Aspect Telecommunications Corporation (a). . . . . . . . . . . . . 2,400 118,800
Comverse Technology, Inc. (a). . . . . . . . . . . . . . . . . . . 3,600 109,800
------------
228,600
------------
TOTAL COMMON STOCKS--(Cost $6,005,157) 83.5% 7,948,206
------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(9.6%)
State Street Bank and Trust Company (b) 4.250% 07/01/1996 $ 910,322 910,000
------------
TOTAL SHORT TERM INVESTMENT--(Cost $910,000) 9.6% 910,000
------------
TOTAL INVESTMENTS--(Cost $6,915,157) 93.1% 8,858,206
OTHER ASSETS LESS LIABILITIES-- 6.9% 661,722
----- ------------
NET ASSETS-- 100.0% $ 9,519,928
----- ------------
----- ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with avalue of $932,956.
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 & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
COMMON STOCKS
AEROSPACE & DEFENSE--(5.1%)
GRC International, Inc. (a). . . . . . . . . . 8,000 $ 307,000
Litton Industries, Inc. (a). . . . . . . . . . 1,800 78,300
------------
385,300
BANKS AND SAVINGS & LOANS--(13.6%)
Bank of New York Co., Inc. . . . . . . . . . . 3,000 153,750
Bankamerica Corporation. . . . . . . . . . . . 2,500 189,375
Bankers Trust New York Corporation . . . . . . 2,500 184,687
Chase Manhattan Corporation. . . . . . . . . . 1,500 105,938
Greenpoint Financial Corporation . . . . . . . 1,500 42,375
Mercantile Bancorporation, Inc.. . . . . . . . 2,500 111,250
PNC Bank Corporation . . . . . . . . . . . . . 3,800 113,050
Wells Fargo & Company. . . . . . . . . . . . . 533 127,320
------------
1,027,745
BUSINESS SERVICES--(4.0%)
Sterling Commerce, Inc. (a). . . . . . . . . . 8,000 297,000
------------
COMMUNICATIONS & MEDIA--(0.6%)
Grupo Television SA de CV GDS. . . . . . . . . 1,500 46,125
------------
COMPUTERS & BUSINESS EQUIPMENT--(5.4%)
Amdahl Corporation (a) . . . . . . . . . . . . 4,400 47,300
Honeywell, Inc.. . . . . . . . . . . . . . . . 4,000 218,000
Intuit (a) . . . . . . . . . . . . . . . . . . 2,000 94,500
Network Peripherals, Inc. (a). . . . . . . . . 1,500 25,687
Sybase, Inc. (a) . . . . . . . . . . . . . . . 800 18,900
------------
404,387
ELECTRONICS--(0.8%)
Lexmark International Group, Inc. Class A (a). 3,000 60,375
------------
ENGINEERING & CONSTRUCTION--(1.5%)
Stone & Webster, Inc.. . . . . . . . . . . . . 3,400 116,025
------------
FINANCIAL SERVICES--(5.1%)
Aetna Life & Casualty Company. . . . . . . . . 2,100 150,150
Schwab (Charles) Corporation . . . . . . . . . 2,500 61,250
Student Loan Marketing Association Voting. . . 1,000 74,000
USF & G Corporation. . . . . . . . . . . . . . 6,000 98,250
------------
383,650
HEALTH CARE--(7.1%)
Alza Corporation (a) . . . . . . . . . . . . . 3,500 95,813
Biomet, Inc. (a) . . . . . . . . . . . . . . . 3,000 43,125
ESC Medical Systems Ltd. (a) . . . . . . . . . 9,750 275,438
Foxmeyer Health Corporation (a). . . . . . . . 4,000 59,500
Steris Corporation (a) . . . . . . . . . . . . 2,000 64,000
------------
537,876
See notes to financial statements.
51
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
INDUSTRIAL MANUFACTURING & PROCESSING--(4.6%)
Corning, Inc.. . . . . . . . . . . . . . . . . 4,000 $ 153,500
Inco, Ltd. . . . . . . . . . . . . . . . . . . 6,000 193,500
----------
347,000
METALS & MINING--(17.1%)
Coeur D'Alene Mines Corporation. . . . . . . . 5,000 91,875
Hecla Mining Company (a) . . . . . . . . . . . 8,000 56,000
Homestake Mining Company . . . . . . . . . . . 16,000 274,000
Newmont Mining Corporation . . . . . . . . . . 7,000 345,625
Pegasus Gold, Inc. (a) . . . . . . . . . . . . 15,000 183,750
Placer Dome, Inc.. . . . . . . . . . . . . . . 13,000 310,375
Western Deep Levels Ltd. ADR . . . . . . . . . 800 29,000
----------
1,290,625
OIL SERVICES--(2.3%)
Baker Hughes, Inc. . . . . . . . . . . . . . . 4,000 131,500
Halliburton Company. . . . . . . . . . . . . . 800 44,400
----------
175,900
PAPER AND FOREST PRODUCTS--(2.0%)
Westvaco Corporation . . . . . . . . . . . . . 2,900 86,638
Weyerhaeuser Company . . . . . . . . . . . . . 1,500 63,750
----------
150,388
PHARMACEUTICALS--(2.3%)
Biogen, Inc. (a) . . . . . . . . . . . . . . . 1,300 71,337
Columbia Labs, Inc.. . . . . . . . . . . . . . 2,500 37,188
Creative Biomolecules, Inc. (a). . . . . . . . 3,000 25,500
Cytogen Corporation (a). . . . . . . . . . . . 4,000 36,250
----------
170,275
RETAIL--(0.0%)
Ben Franklin Retail Stores, Inc. (a) . . . . . 333 375
----------
TELECOMMUNICATIONS & EQUIPMENT--(6.3%)
Airtouch Communications, Inc. (a). . . . . . . 5,800 163,850
Frontier Corporation . . . . . . . . . . . . . 4,000 122,500
Globalstar Telecom (a) . . . . . . . . . . . . 1,300 57,525
Lucent Technologies, Inc.. . . . . . . . . . . 1,700 64,387
Telefonos de Mexico SA de CZ Spon ADR. . . . . 2,000 67,000
----------
475,262
----------
TOTAL COMMON STOCKS--(Cost $5,467,998) . 77.8% 5,868,308
----------
</TABLE>
See notes to financial statements.
52
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
-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--(17.3%)
State Street Bank and Trust Company (b) 5.100% 07/01/1996 $ 1,310,557 $ 1,310,000
------------
TOTAL SHORT TERM
INVESTMENT--(Cost $1,310,000) 17.3% 1,310,000
------------
TOTAL INVESTMENTS--(Cost $6,777,998) 95.1% 7,178,308
OTHER ASSETS LESS LIABILITIES-- 4.9% 367,550
----- ------------
NET ASSETS-- 100.0% $ 7,545,858
----- ------------
----- ------------
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 6/28/96, is fully collateralized by a
United States Treasury Note, 5.25%, 12/31/97, with a value of $1,338,590.
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
JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
CASH COMMON
MANAGEMENT STOCK
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value. . . . . . . . $ 6,219,072 $ 46,528,423
Investments - repurchase agreements . . . . . . . 5,235,000 2,520,000
Foreign currency holdings, at value (Cost $29,905) 0 0
Cash. . . . . . . . . . . . . . . . . . . . . . . 418 262
Income receivable . . . . . . . . . . . . . . . . 88,639 21,836
Receivable for securities sold. . . . . . . . . . 0 0
Receivable for trust shares sold. . . . . . . . . 0 626,648
Foreign income tax reclaim receivable . . . . . . 0 0
Due from adviser. . . . . . . . . . . . . . . . . 6,846 0
Unrealized appreciation on forward currency
contracts. . . . . . . . . . . . . . . . . . . 0 0
Prepaid expenses. . . . . . . . . . . . . . . . . 1,929 8,661
----------- ------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . 11,551,904 49,705,830
LIABILITIES
Payable for securities purchased. . . . . . . . . 0 256,440
Advisory fee payable. . . . . . . . . . . . . . . 4,767 27,805
Accounts payable and accrued expenses . . . . . . 46,836 55,270
Payable for trust shares redeemed . . . . . . . . 2,858,683 442,973
Unrealized depreciation on forward currency
contracts. . . . . . . . . . . . . . . . . . . 0 0
----------- ------------
TOTAL LIABILITIES . . . . . . . . . . . . . . 2,910,286 782,488
----------- ------------
TOTAL NET ASSETS. . . . . . . . . . . . . . . $ 8,641,618 $ 48,923,342
----------- ------------
----------- ------------
NET ASSETS
Capital paid - in . . . . . . . . . . . . . . . . $ 8,641,618 $ 35,502,434
Undistributed (distributions in
excess of) net investment income . . . . . . . 0 (34,136)
Accumulated net realized gain (loss) on
investments and foreign currency transactions. 0 2,615,493
Net unrealized appreciation (depreciation) of:
Investments. . . . . . . . . . . . . . . . . . 0 10,839,551
Foreign currency . . . . . . . . . . . . . . . 0 0
----------- ------------
TOTAL NET ASSETS. . . . . . . . . . . . . . . $ 8,641,618 $ 48,923,342
----------- ------------
----------- ------------
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value) . . . . . . . . . . $ 1.000 $ 29.350
Total shares outstanding at end of period . . . . 8,641,618 1,666,905
Cost of investment securities . . . . . . . . . . $11,454,072 $ 38,208,872
</TABLE>
See notes to financial statements.
54
<PAGE>
<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>
$ 9,201,071 $ 26,617,751 $ 17,214,940 $ 9,974,145 $ 23,285,691
237,000 3,786,000 0 432,000 0
0 0 0 0 29,861
227 339 0 976 352
201,818 94,516 77,502 142,216 14,537
207,563 0 0 594,250 122,814
0 1,298 16,570 150 912,124
0 0 0 0 8,897
5,820 1,966 4,541 7,259 5,558
0 0 0 0 458
1,715 5,341 3,388 2,331 3,879
------------ ------------ ------------ ------------ ------------
9,855,214 30,507,211 17,316,941 11,153,327 24,384,171
322,482 891,185 412,534 271,847 2,436
5,508 16,854 8,767 5,327 13,389
45,274 47,230 49,376 44,292 62,312
33,112 38,141 90,278 36,634 15,464
0 0 0 0 22,273
------------ ------------ ------------ ------------ ------------
406,376 993,410 560,955 358,100 115,874
------------ ------------ ------------ ------------ ------------
$ 9,448,838 $ 29,513,801 $ 16,755,986 $ 10,795,227 $ 24,268,297
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
$ 9,579,664 $ 23,387,601 $ 13,670,326 $ 10,425,371 $ 18,782,969
364,714 169,546 366,454 315,617 32,228
(460,783) 1,989,162 108,371 186,794 420,946
(34,757) 3,967,492 2,610,835 (132,555) 5,053,961
0 0 0 0 (21,807)
------------ ------------ ------------ ------------ ------------
$ 9,448,838 $ 29,513,801 $ 16,755,986 $ 10,795,227 $ 24,268,297
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
$ 8.934 $ 13.104 $ 15.822 $ 10.273 $ 15.181
1,057,592 2,252,259 1,059,026 1,050,874 1,598,577
$ 9,472,828 $ 26,436,259 $ 14,604,105 $ 10,538,700 $ 18,231,730
</TABLE>
See notes to financial statements.
55
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
GROWTH &
SMALL CAP INCOME
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value. . . . . . . . $ 7,948,206 $ 5,868,308
Investments - repurchase agreements . . . . . . . 910,000 1,310,000
Foreign currency holdings, at value (Cost $0) . . 0 0
Cash. . . . . . . . . . . . . . . . . . . . . . . 955 735
Income receivable . . . . . . . . . . . . . . . . 460 5,357
Receivable for securities sold. . . . . . . . . . 34,681 0
Receivable for trust shares sold. . . . . . . . . 998,959 396,085
Foreign income tax reclaim receivable . . . . . . 0 0
Due from adviser. . . . . . . . . . . . . . . . . 5,729 9,377
Unrealized appreciation on forward currency
contracts. . . . . . . . . . . . . . . . . . . 0 0
Prepaid expenses. . . . . . . . . . . . . . . . . 852 846
----------- ------------
TOTAL ASSETS . . . . . . . . . . . . . . . . 9,899,842 7,590,708
LIABILITIES
Payable for securities purchased. . . . . . . . . 311,075 0
Advisory fee payable. . . . . . . . . . . . . . . 5,769 4,219
Accounts payable and accrued expenses . . . . . . 63,070 40,631
Payable for trust shares redeemed . . . . . . . . 0 0
Unrealized depreciation on forward currency
contracts. . . . . . . . . . . . . . . . . . . 0 0
----------- ------------
TOTAL LIABILITIES. . . . . . . . . . . . . . 379,914 44,850
----------- ------------
TOTAL NET ASSETS . . . . . . . . . . . . . . $ 9,519,928 $ 7,545,858
----------- ------------
----------- ------------
NET ASSETS
Capital paid - in . . . . . . . . . . . . . . . . $ 7,670,659 $ 6,959,969
Undistributed (distributions in
excess of) net investment income . . . . . . . (25,105) 13,515
Accumulated net realized gain (loss) on
investments and foreign currency transactions. (68,675) 172,064
Net unrealized appreciation (depreciation) of:
Investments. . . . . . . . . . . . . . . . . . 1,943,049 400,310
Foreign currency . . . . . . . . . . . . . . . 0 0
----------- ------------
TOTAL NET ASSETS . . . . . . . . . . . . . . $ 9,519,928 $ 7,545,858
----------- ------------
----------- ------------
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value) . . . . . . . . . . $ 16.231 $ 12.747
Total shares outstanding at end of period . . . . 586,531 591,956
Cost of investment securities . . . . . . . . . . $ 6,915,157 $ 6,777,998
</TABLE>
See notes to financial statements.
56
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
CASH COMMON
MANAGEMENT STOCK
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income . . . . . . . . . . . . . . . . . $ 0 $ 173,247
Interest income . . . . . . . . . . . . . . . . . 353,005 61,531
Foreign taxes withheld. . . . . . . . . . . . . . 0 (555)
--------- ----------
TOTAL INCOME . . . . . . . . . . . . . . . . . 353,005 234,223
EXPENSES
Investment management fee . . . . . . . . . . . . 32,471 160,880
Administrative fee. . . . . . . . . . . . . . . . 16,799 53,758
Custodian fee . . . . . . . . . . . . . . . . . . 18,431 24,566
Professional fees . . . . . . . . . . . . . . . . 13,308 13,308
Printing expenses . . . . . . . . . . . . . . . . 2,489 2,489
Trustees fee and expenses . . . . . . . . . . . . 3,165 3,165
Transfer agent fee. . . . . . . . . . . . . . . . 2,328 2,328
Insurance . . . . . . . . . . . . . . . . . . . . 2,027 8,541
Other . . . . . . . . . . . . . . . . . . . . . . 529 1,833
Expenses borne by the adviser . . . . . . . . . . (42,820) 0
Expense reductions. . . . . . . . . . . . . . . . (23) (11)
--------- ----------
TOTAL EXPENSES . . . . . . . . . . . . . . . . 48,704 270,857
--------- ----------
NET INVESTMENT INCOME (LOSS) . . . . . . . . . 304,301 (36,634)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments. . . . . . . . . . 0 2,378,276
Net realized gain on foreign currency transactions. 0 5
Change in unrealized appreciation of:
Investments . . . . . . . . . . . . . . . . . . . 0 3,374,875
Foreign currency. . . . . . . . . . . . . . . . . 0 0
--------- ----------
NET REALIZED AND UNREALIZED GAIN . . . . . . . 0 5,753,156
--------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS . . . . . . . . . . . . $304,301 $5,716,522
--------- ----------
--------- ----------
</TABLE>
See notes to financial statements.
57
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
HIGH INCOME MULTIPLE
BOND STRATEGIES
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income. . . . . . . . . . . . . . . . . . . . . . . . $ 1,881 $ 68,129
Interest income. . . . . . . . . . . . . . . . . . . . . . . . 429,939 249,729
Foreign taxes withheld . . . . . . . . . . . . . . . . . . . . 0 (234)
------------ ------------
TOTAL INCOME . . . . . . . . . . . . . . . . . . . . . . . . 431,820 317,624
EXPENSES
Investment management fee. . . . . . . . . . . . . . . . . . . 30,636 92,238
Administrative fee . . . . . . . . . . . . . . . . . . . . . . 12,021 31,330
Custodian fee. . . . . . . . . . . . . . . . . . . . . . . . . 24,947 23,395
Professional fees. . . . . . . . . . . . . . . . . . . . . . . 13,308 13,308
Printing expenses. . . . . . . . . . . . . . . . . . . . . . . 2,489 2,489
Trustees fee and expenses. . . . . . . . . . . . . . . . . . . 3,165 3,165
Transfer agent fee . . . . . . . . . . . . . . . . . . . . . . 2,328 2,328
Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,751 5,281
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 1,134
Expenses borne by the adviser. . . . . . . . . . . . . . . . . (37,218) (16,565)
Expense reductions . . . . . . . . . . . . . . . . . . . . . . (1,360) (12)
------------ ------------
TOTAL EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 52,517 158,091
------------ ------------
NET INVESTMENT INCOME (LOSS) . . . . . . . . . . . . . . . . 379,303 159,533
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments. . . . . . . . . . . . . 145,763 1,886,391
Net realized gain on foreign currency transactions . . . . . . . 0 858
Change in unrealized appreciation (depreciation) of:
Investments. . . . . . . . . . . . . . . . . . . . . . . . . . (174,386) 266,216
Foreign currency . . . . . . . . . . . . . . . . . . . . . . . 0 0
------------ ------------
NET REALIZED AND UNREALIZED GAIN (LOSS). . . . . . . . . . . (28,623) 2,153,465
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS. . . . . . . . . . . . . . . . . . . $ 350,680 $ 2,312,998
------------ ------------
------------ ------------
</TABLE>
See notes to financial statments.
58
<PAGE>
TILT U.S. WORLD GROWTH &
UTILITY GOVERNMENT BOND EQUITY SMALL CAP INCOME
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
$ 391,956 $ 0 $ 134,637 $ 1,048 $ 23,654
0 360,321 50,289 12,885 24,447
0 0 (16,367) 0 (366)
----------- ----------- ----------- ----------- -----------
391,956 360,321 168,559 13,933 47,735
52,292 33,201 72,609 24,587 20,119
19,602 14,633 24,916 25,729 22,872
23,111 21,281 38,365 15,502 25,680
13,308 13,308 13,308 13,308 13,308
2,489 2,489 2,489 2,489 2,489
3,165 3,165 3,165 3,165 3,037
2,328 2,328 2,328 2,328 2,328
3,131 2,325 3,610 727 689
761 (107) 865 169 153
(27,293) (45,378) (36,506) (48,816) (55,549)
(378) (210) (249) (150) (906)
----------- ----------- ----------- ----------- -----------
92,516 47,035 124,900 39,038 34,220
----------- ----------- ----------- ----------- -----------
299,440 313,286 43,659 (25,105) 13,515
14,484 82,621 118,791 (105,223) 156,422
0 0 81,804 0 0
(202,267) (651,262) 1,788,345 1,528,164 306,449
0 0 (36,435) 0 0
----------- ----------- ----------- ----------- -----------
(187,783) (568,641) 1,952,505 1,422,941 462,871
----------- ----------- ----------- ----------- -----------
$ 111,657 $ (255,355) $ 1,996,164 $ 1,397,836 $ 476,386
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
See notes to financial statments.
59
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH MANAGEMENT PORTFOLIO COMMON STOCK PORTFOLIO
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
6/30/96 12/31/95 6/30/96 12/31/95
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) . . . . . . . . . . . $ 304,301 $ 522,535 $ (36,634) $ 2,498
Net realized gain (loss) on investments. . . . . . 0 65 2,378,276 4,418,581
Net realized gain on foreign
currency transactions. . . . . . . . . . . . . . 0 0 5 899
Change in unrealized appreciation
(depreciation) of:
Investments. . . . . . . . . . . . . . . . . . . 0 0 3,374,875 7,157,127
Foreign currency . . . . . . . . . . . . . . . . 0 0 0 0
------------ ------------ ------------ ------------
Net increase in net assets
resulting from operations. . . . . . . . . . . . 304,301 522,600 5,716,522 11,579,105
Dividends and distributions to Shareholders
from:
Net investment income. . . . . . . . . . . . . . . (304,301) (522,535) 0 (267,715)
Net realized gain on investments . . . . . . . . . 0 (53) 0 (2,264,091)
Dividends and distributions to Shareholders
in excess of:
Net investment income. . . . . . . . . . . . . . . 0 0 0 0
Trust share transactions . . . . . . . . . . . . . . (1,454,105) 1,897,366 288,096 3,056,280
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE). . . . . . . . . . . . (1,454,105) 1,897,378 6,004,618 12,103,579
Net Assets
Beginning of period. . . . . . . . . . . . . . . . 10,095,723 8,198,345 42,918,724 30,815,145
------------ ------------ ------------ ------------
END OF PERIOD (1). . . . . . . . . . . . . . . . . $ 8,641,618 $ 10,095,723 $ 48,923,342 $ 42,918,724
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(1) Including undistributed (distributions in
excess of) net investment income . . . . . . . . . $ 0 $ 0 $ (34,136) $ 2,498
</TABLE>
See notes to financial statments.
60
<PAGE>
<TABLE>
<CAPTION>
HIGH INCOME BOND PORTFOLIO MULTIPLE STRATEGIES PORTFOLIO TILT UTILITY PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95
------- -------- ------- -------- ------- --------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
$ 379,303 $ 730,675 $ 159,533 $ 271,086 $ 299,440 $ 547,641
145,763 (19,728) 1,886,391 2,272,079 14,484 346,305
0 3,252 858 3 0 0
(174,386) 723,665 266,216 3,961,315 (202,267) 3,179,720
0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
350,680 1,437,864 2,312,998 6,504,483 111,657 4,073,666
0 (730,675) 0 (270,194) 0 (481,008)
0 0 0 (2,115,878) 0 (286,632)
0 (43,548) 0 0 0 0
334,318 329,113 821,095 1,111,737 626,019 400,523
------------ ------------ ------------ ------------ ------------ ------------
684,998 992,754 3,134,093 5,230,148 737,676 3,706,549
8,763,840 7,771,086 26,379,708 21,149,560 16,018,310 12,311,761
------------ ------------ ------------ ------------ ------------ ------------
$ 9,448,838 $ 8,763,840 $ 29,513,801 $ 26,379,708 $ 16,755,986 $ 16,018,310
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
$ 364,714 $ (14,589) $ 169,546 $ 10,013 $ 366,454 $ 67,014
</TABLE>
61
<PAGE>
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
-CONTINUED-
<TABLE>
<CAPTION>
U.S. GOVERNMENT
BOND PORTFOLIO WORLD EQUITY PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
6/30/96 12/31/95 6/30/96 12/31/95
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss). . . . . . . . $ 313,286 $ 756,605 $ 43,659 $ 55,247
Net realized gain (loss) on investments . . 82,621 678,846 118,791 957,186
Net realized gain on foreign
currency transactions . . . . . . . . . 0 0 81,804 223,542
Change in unrealized appreciation
(depreciation) of:. . . . . . . . . . .
Investments . . . . . . . . . . . . . . (651,262) 843,009 1,788,345 2,212,725
Foreign currency. . . . . . . . . . . . 0 0 (36,435) (62,988)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets
resulting from operations . . . . . . . (255,355) 2,278,460 1,996,164 3,385,712
Dividends and distributions to Shareholders
from:
Net investment income . . . . . . . . . . . 0 (756,605) 0 0
Net realized gain on investments. . . . . . 0 (352,027) 0 (1,008,027)
Dividends and distributions to Shareholders
in excess of:
Net investment income . . . . . . . . . . . 0 (49,391) 0 0
Trust share transactions . . . . . . . . . . . (567,473) (3,946,311) 4,081,401 4,313,369
------------ ------------ ------------ ------------
TOTAL INCREASE (DECREASE) . . . . . . . . . (822,828) (2,825,874) 6,077,565 6,691,054
Net Assets
Beginning of period . . . . . . . . . . . . 11,618,055 14,443,929 18,190,732 11,499,678
------------ ------------ ------------ ------------
END OF PERIOD (1) . . . . . . . . . . . . . $ 10,795,227 $ 11,618,055 $ 24,268,297 $ 18,190,732
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
(1) Including undistributed (distributions in
excess of) net investment income. . . . . . $ 315,617 $ 2,331 $ 32,228 $ (11,431)
</TABLE>
(2) From commencement of operations May 4, 1995.
(3) From commencement of operations May 31, 1995.
See notes to financial statements.
62
<PAGE>
SMALL CAP PORTFOLIO GROWTH & INCOME PORTFOLIO
SIX MONTHS ENDED PERIOD ENDED SIX MONTHS ENDED PERIOD ENDED
6/30/96 12/31/95 (2) 6/30/96 12/31/95 (3)
---------------- ------------ ---------------- ------------
(UNAUDITED) (UNAUDITED)
$ (25,105) $ (12,679) $ 13,515 $ 13,071
(105,223) 148,029 156,422 43,303
0 0 0 0
1,528,164 414,885 306,449 93,861
0 0 0 0
------------ ------------ ------------ ------------
1,397,836 550,235 476,386 150,235
0 0 0 (13,071)
0 (98,802) 0 (27,661)
0 0 0 0
4,308,990 3,361,669 3,734,716 3,225,253
------------ ------------ ------------ ------------
5,706,826 3,813,102 4,211,102 3,334,756
3,813,102 0 3,334,756 0
------------ ------------ ------------ ------------
$ 9,519,928 $ 3,813,102 $ 7,545,858 $ 3,334,756
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
$ (25,105) $ 0 $ 13,515 $ 0
63
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
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 June 30, 1996, 93.01% of the assets of the Trust are owned by First
Variable Life Insurance Company ("First Variable") and 6.99% 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 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.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements.
VALUATION OF INVESTMENTS: The Trust's equity securities, including
American Depositary 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
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
INVESTMENT TRANSACTIONS: Investment security transactions are recorded as
of 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
JUNE 30, 1996 (UNAUDITED)
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.
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 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.
66
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
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, 1997 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 June
30, 1996, the Trust's expenses were reduced by $3,299.
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 June 30, 1996 were as follows:
<TABLE>
<CAPTION>
NON- NON-
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
--------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
Cash Management Portfolio . . . . . . . $ 694,060,288 $ 1,323,328 $ 693,206,736 $ 1,000,000
Common Stock Portfolio. . . . . . . . . 18,102,342 0 17,579,590 0
High Income Bond Portfolio. . . . . . . 4,059,231 501,484 3,956,246 0
Multiple Strategies Portfolio . . . . . 9,068,853 2,512,500 11,575,089 25,588
Tilt Utility Portfolio. . . . . . . . . 2,045,449 0 993,479 0
U.S. Government Bond Portfolio. . . . . 3,018,035 11,807,855 4,034,032 11,129,313
World Equity Portfolio. . . . . . . . . 6,682,252 0 3,553,766 0
Small Cap Portfolio . . . . . . . . . . 5,113,667 0 1,665,858 0
Growth & Income Portfolio . . . . . . . 5,937,391 72,977 3,130,210 0
</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 June 30, 1996 were as follows:
67
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
GROSS UNREALIZED NET UNREALIZED
IDENTIFIED COST APPRECIATION (DEPRECIATION) APPRECIATION/(DEPRECIATION)
--------------- ------------ ------------ --------------------------
<S> <C> <C> <C> <C>
Cash Management Portfolio . . . . . . . $ 11,454,072 $ 0 $ 0 $ 0
Common Stock Portfolio. . . . . . . . . 38,208,872 11,167,109 (327,558) 10,839,551
High Income Bond Portfolio. . . . . . . 9,472,828 326,217 (360,974) (34,757)
Multiple Strategies Portfolio . . . . . 26,436,259 4,174,753 (207,261) 3,967,492
Tilt Utility Portfolio. . . . . . . . . 14,604,105 2,688,568 (77,733) 2,610,835
U.S. Government Bond Portfolio. . . . . 10,538,700 44,152 (176,707) (132,555)
World Equity Portfolio. . . . . . . . . 18,231,730 5,291,818 (237,857) 5,053,961
Small Cap Portfolio . . . . . . . . . . 6,915,157 2,059,456 (116,407) 1,943,049
Growth & Income Portfolio . . . . . . . 6,777,998 610,042 (209,732) 400,310
</TABLE>
The aggregate cost of each Fund's investments was substantially the same for
book and federal income tax purposes at June 30, 1996.
NOTE E -- TRUST SHARE TRANSACTIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
CASH MANAGEMENT PORTFOLIO
Shares sold. . . . . . . . . . . . . 17,146,152 $ 17,146,152 20,464,576 $ 20,464,576
Shares issued to shareholders in
reinvestment. . . . . . . . . . . 304,295 304,295 522,595 522,595
----------- ------------- ----------- -------------
17,450,447 17,450,447 20,987,171 20,987,171
Shares repurchased . . . . . . . . . (18,904,552) (18,904,552) (19,089,805) (19,089,805)
----------- ------------- ----------- -------------
Net increase (decrease). . . . . . . (1,454,105) $ (1,454,105) 1,897,366 $ 1,897,366
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
COMMON STOCK PORTFOLIO
Shares sold. . . . . . . . . . . . . 197,527 $ 5,599,866 363,229 $ 8,619,361
Shares issued to shareholders in
reinvestment. . . . . . . . . . . 0 0 98,408 2,531,806
----------- ------------- ----------- -------------
197,527 5,599,866 461,637 11,151,167
Shares repurchased . . . . . . . . . (189,889) (5,311,770) (338,854) (8,094,887
----------- ------------- ----------- -------------)
Net increase . . . . . . . . . . . . 7,638 $ 288,096 122,783 $ 3,056,280
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
HIGH INCOME BOND PORTFOLIO
Shares sold. . . . . . . . . . . . . 277,659 $ 2,447,562 685,858 $ 6,023,295
Shares issued to shareholders in
reinvestment. . . . . . . . . . . 0 0 90,256 774,223
----------- ------------- ----------- -------------
277,659 2,447,562 776,114 6,797,518
Shares repurchased . . . . . . . . . (240,369) (2,113,244) (737,813) (6,468,405
----------- ------------- ----------- -------------)
Net increase . . . . . . . . . . . . 37,290 $ 334,318 38,301 $ 329,113
----------- ------------- ----------- -------------
----------- ------------- ----------- -------------
</TABLE>
68
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
----------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
MULTIPLE STRATEGIES PORTFOLIO
Shares sold . . . . . . . . . . . . . 616,335 $ 7,886,281 407,094 $ 4,796,839
Shares issued to shareholders in
reinvestment . . . . . . . . . . . 0 0 199,328 2,386,073
--------- ------------- -------- -------------
616,335 7,886,281 606,422 7,182,912
Shares repurchased. . . . . . . . . . (554,595) (7,065,186) (526,172) (6,071,175)
--------- ------------- -------- -------------
Net increase. . . . . . . . . . . . . 61,740 $ 821,095 80,250 $ 1,111,737
--------- ------------- -------- -------------
--------- ------------- -------- -------------
TILT UTILITY PORTFOLIO
Shares sold . . . . . . . . . . . . . 154,413 $ 2,409,181 345,562 $ 4,803,339
Shares issued to shareholders in
reinvestment . . . . . . . . . . . 0 0 49,831 767,641
--------- ------------- -------- -------------
. . . . . . . . . . . . . . . . . 154,413 2,409,181 395,393 5,570,980
Shares repurchased. . . . . . . . . . (115,379) (1,783,162) (370,564) (5,170,457)
--------- ------------- -------- -------------
Net increase. . . . . . . . . . . . . 39,034 $ 626,019 24,829 $ 400,523
--------- ------------- -------- -------------
--------- ------------- -------- -------------
U.S. GOVERNMENT BOND PORTFOLIO
Shares sold . . . . . . . . . . . . . 114,002 $ 1,172,953 252,791 $ 2,717,003
Shares issued to shareholders in
reinvestment . . . . . . . . . . . 0 0 110,604 1,158,024
--------- ------------- -------- -------------
. . . . . . . . . . . . . . . . . 114,002 1,172,953 363,395 3,875,027
Shares repurchased. . . . . . . . . . (168,581) (1,740,426) (744,322) (7,821,338)
--------- ------------- -------- -------------
Net decrease. . . . . . . . . . . . . (54,579) $ (567,473) (380,927) $ (3,946,311)
--------- ------------- -------- -------------
--------- ------------- -------- -------------
WORLD EQUITY PORTFOLIO
Shares sold . . . . . . . . . . . . . 470,535 $ 6,770,032 659,927 $ 8,568,833
Shares issued to shareholders in
reinvestment . . . . . . . . . . . 0 0 72,816 1,008,027
--------- ------------- -------- -------------
. . . . . . . . . . . . . . . . . 470,535 6,770,032 732,743 9,576,860
Shares repurchased. . . . . . . . . . (187,928) (2,688,631) (395,278) (5,263,491)
--------- ------------- -------- -------------
Net increase. . . . . . . . . . . . . 282,607 $ 4,081,401 337,465 $ 4,313,369
--------- ------------- -------- -------------
--------- ------------- -------- -------------
<CAPTION>
PERIOD FROM
MAY 4, 1995 TO
DECEMBER 31, 1995
----------------------------
SMALL CAP PORTFOLIO
Shares sold . . . . . . . . . . . . . 393,120 $ 5,772,724 504,211 $ 5,867,210
Shares issued to shareholders in
reinvestment . . . . . . . . . . . 0 0 7,913 98,802
--------- ------------- -------- -------------
. . . . . . . . . . . . . . . . . 393,120 5,772,724 512,124 5,966,012
Shares repurchased. . . . . . . . . . (108,313) (1,463,734) (210,400) (2,604,343)
--------- ------------- -------- -------------
Net increase. . . . . . . . . . . . . 284,807 $ 4,308,990 301,724 $ 3,361,669
--------- ------------- -------- -------------
--------- ------------- -------- -------------
</TABLE>
69
<PAGE>
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
-CONTINUED-
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTHS ENDED MAY 31, 1995 TO
JUNE 30, 1996 DECEMBER 31, 1995
------------------ ----------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
GROWTH & INCOME PORTFOLIO
Shares sold. . . . . . . . . . . . . . . . 316,025 $4,017,133 357,601 $3,877,668
Shares issued to shareholders in
reinvestment . . . . . . . . . . . . . . 0 0 3,645 40,731
------- --------- ------- ----------
316,025 4,017,133 361,246 3,918,399
Shares repurchased . . . . . . . . . . . . (22,597) (282,417) (62,718) (693,146)
------- --------- ------- ----------
Net increase . . . . . . . . . . . . . . . 293,428 $3,734,716 298,528 $3,225,253
------- --------- ------- ----------
------- --------- ------- ----------
</TABLE>
NOTE F -- FORWARD FOREIGN CURRENCY CONTRACT
As of June 30, 1996 the World Equity Portfolio had thirteen forward foreign
currency contracts open 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>
458,202 Australian Dollars 07/09/96 $ 356,000 $359,846 $ (3,846)
507,601 Australian Dollars 07/09/96 398,000 398,641 (641)
1,759,912 Belgian Francs 08/20/96 56,000 56,411 (411)
409,898 French Francs 08/06/96 79,500 79,836 (336)
127,254 German Marks 08/20/96 83,200 83,961 (761)
144,654,102 Italian Lira 08/20/96 92,100 94,009 (1,909)
250,276,635 Japanese Yen 08/01/96 2,295,000 2,299,731 (4,731)
164,703 Netherland Guilder 08/20/96 96,450 96,942 (492)
84,311 Pound Sterling 08/20/96 127,200 130,883 (3,683)
7,603,208 Spanish Peseta 08/13/96 59,500 59,247 253
1,283,562 Swedish Krona 09/30/96 194,000 193,795 205
118,722 Swiss Francs 08/20/96 95,000 95,378 (378)
CURRENCY PURCHASED
------------------
458,202 Australian Dollars 07/09/96 364,931 359,846 (5,085)
---------
$ (21,815)
---------
---------
</TABLE>
70
<PAGE>
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71
<PAGE>
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------------
JUNE 30, 1996(1) 1995 1994(2) 1993 1992 1991
---------------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . . . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . . . 0.024 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 0.000
-------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . 0.024 0.052 0.036 0.024 0.032 0.055
-------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . . . (0.024) (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) (0.000)
-------- ------- ------- ------- ------- -------
Total Distributions. . . . . . . . . . . . . . (0.024) (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 $1.000
-------- ------- ------- ------- ------- -------
-------- ------- ------- ------- ------- -------
TOTAL RETURN (3) (4)....................... 2.79%(5) 5.43% 3.68% 2.46% 3.22% 5.64%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's)...... $ 8,642 $10,096 $8,198 $9,081 $18,405 $21,594
Ratio of Operating Expenses to
Average Net Assets (6)................ 0.75%(7) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8)........................ 0.75%(7) 0.75% - - - -
Ratio of Net Investment Income to
Average Net Assets.................... 4.67%(7) 5.30% 3.64% 2.46% 3.20% 5.59%
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 1.41%; 1995 - 1.72%;
1994 - 1.46%; 1993 - 1.46%; 1992 - 1.13% and 1991 - 0.85%.
(7) Annualized.
(8) 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,
SIX MONTHS ENDED -----------------------------------------------------
JUNE 30, 1996(1) 1995 1994(2) 1993 1992 1991
---------------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD . . . . . $25.866 $20.056 $20.390 $20.454 $26.290 $21.250
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . . . . . (0.022) 0.007 0.173 0.468 0.254 0.571
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . . . . . 3.506 7.419 (0.335) 1.401 (2.256) 6.727
-------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS . . . . . . . . 3.484 7.426 (0.162) 1.869 (2.002) 7.298
-------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . . . . . (0.000) (0.173) (0.086) (0.436) (0.254) (0.571)
In Excess of Net Investment Income . . . . . . (0.000) (0.000) (0.000) (0.373) (0.000) (0.000)
From Net Realized Capital Gains. . . . . . . . (0.000) (1.443) (0.086) (1.124) (3.580) (1.687)
-------- ------- ------- ------- ------- -------
Total Distributions. . . . . . . . . . . . . . (0.000) (1.616) (0.172) (1.933) (3.834) (2.258)
-------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD . . . . . . . . $29.350 $25.866 $20.056 $20.390 20.454 $26.290
-------- ------- ------- ------- ------- -------
-------- ------- ------- ------- ------- -------
TOTAL RETURN (3) (4).......................... 13.47%(5) 37.12% (0.79)% 9.09% (7.59)% 34.37%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).......... $48,923 $42,919 $30,815 $42,530 $52,538 $54.877
Ratio of Operating Expenses to
Average Net Assets (6)................... 1.18%(7) 1.17% 1.20% 1.20% 1.16% 0.99%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8)............................ 1.18%(7) 1.17% - - - -
Ratio of Net Investment Income to
Average Net Assets........................ (0.16)%(7) 0.01% 0.78% 1.74% 1.06% 2.12%
Portfolio Turnover Rate...................... 40.58%(5) 166.87% 155.12% 6.05% 133.30% 69.04%
Average Commission per Share (9) $0.05 - - - - -
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) 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% and 1991 - 1.00%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups,
mark-downs or spreads on shares traded on a principal basis.
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,
SIX MONTHS ENDED ----------------------------------------------------------------------
JUNE 30, 1996(1) 1995 1994 (2) 1993 1992 1991
---------------- ---- -------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD. . $ 8.589 $ 7.914 $ 9.704 $ 9.492 $ 9.187 $ 7.911
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . 0.359 0.779 1.018 0.848 0.972 0.878
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . (0.014) 0.717 (1.711) 0.567 0.481 1.258
--------- --------- ---------- --------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS. . . . . 0.345 1.496 (0.693) 1.415 1.453 2.136
--------- --------- ---------- --------- ---------- ----------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . (0.000) (0.779) (1.005) (0.849) (0.975) (0.860)
In Excess of Net Investment Income . . (0.000) (0.042) (0.006) (0.000) (0.000) (0.000)
From Net Realized Capital Gains. . . . (0.000) (0.000) (0.075) (0.354) (0.173) (0.000)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.011) (0.000) (0.000) (0.000)
--------- --------- ---------- --------- ---------- ----------
Total Distributions. . . . . . . . . . (0.000) (0.821) (1.097) (1.203) (1.148) (0.860)
--------- --------- ---------- --------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD. . . . . $ 8.934 $ 8.589 $ 7.914 $ 9.704 $ 9.492 $ 9.187
--------- --------- ---------- --------- ---------- ----------
--------- --------- ---------- --------- ---------- ----------
TOTAL RETURN (3) (4) . . . . . . . . . . 4.01%(5) 18.98% (7.08)% 14.91% 15.77% 27.01%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . $ 9,449 $ 8,764 $ 7,771 $ 14,496 $ 12,448 $ 8,386
Ratio of Operating Expenses to
Average Net Assets (6) . . . . . . 1.20%(7) 1.20% 1.20% 1.20% 1.20% 1.13%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . 1.23%(7) 1.21% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . 8.67%(7) 8.62% 8.70% 8.04% 9.70% 10.54%
Portfolio Turnover Rate . . . . . . . 46.26%(5) 82.15% 200.19% 90.82% 166.27% 41.14%
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 2.05%; 1995 - 2.04%;
1994 - 2.03%; 1993 - 1.59%; 1992 - 1.68% and 1991 - 2.15%.
(7) Annualized.
(8) 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,
SIX MONTHS ENDED ----------------------------------------------------------------------
JUNE 30, 1996(1) 1995 1994 (2) 1993 1992 1991
---------------- ---- -------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD. . $ 12.043 $ 10.022 $ 12.182 $ 11.785 $ 12.515 $ 10.790
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . 0.071 0.137 0.236 0.424 0.499 0.536
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . 0.990 3.086 (0.711) 0.835 (0.060) 1.989
---------- ---------- ----------- ---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS. . . . . 1.061 3.223 (0.475) 1.259 0.439 2.525
---------- ---------- ----------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . (0.000) (0.136) (0.235) (0.424) (0.506) (0.526)
In Excess of Net Investment Income . . (0.000) (0.000) (0.008) (0.000) (0.000) (0.000)
From Net Realized Capital Gains. . . . (0.000) (1.066) (1.418) (0.438) (0.663) (0.274)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.024) (0.000) (0.000) (0.000)
---------- ---------- ----------- ---------- ---------- ----------
Total Distributions. . . . . . . . . . (0.000) (1.202) (1.685) (0.862) (1.169) (0.800)
---------- ---------- ----------- ---------- ---------- ----------
NET ASSET VALUE AT END OF PERIOD. . . . . $ 13.104 $ 12.043 $ 10.022 $ 12.182 $ 11.785 $ 12.515
---------- ---------- ----------- ---------- ---------- ----------
---------- ---------- ----------- ---------- ---------- ----------
TOTAL RETURN (3) (4). . . . . . . . . . . 8.81%(5) 32.24% (3.91)% 10.52% 3.62% 23.43%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . $ 29,514 $ 26,380 $ 21,150 $ 24,522 $ 26,012 $ 26,916
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . . 1.20%(7) 1.20% 1.20% 1.20% 1.20% 1.11%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . 1.20%(7) 1.20% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . 1.21%(7) 1.14% 1.74% 3.20% 3.73% 4.49%
Portfolio Turnover Rate. . . . . . . . 51.80%(5) 161.10% 153.64% 25.57% 52.11% 61.17%
Average Commission per Share (9) . . . $ 0.05 - - - - -
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 1.33%; 1995 - 1.33%;
1994 - 1.48%; 1993 - 1.35%; 1992 - 1.24% and 1991 - 1.22%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups, mark-
downs or spreads on shares traded on a principal basis.
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,
SIX MONTHS ENDED -----------------------------------------------------------------------
JUNE 30, 1996 (1) 1995 1994 (2) 1993 1992 1991
---------------- ---- -------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD. . $ 15.704 $ 12.372 $ 14.650 $ 13.891 $ 14.057 $ 12.183
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . 0.280 0.559 0.521 0.314 0.326 0.477
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . (0.162) 3.560 (0.651) 2.171 (0.168) 3.140
---------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS. . . . . 0.118 4.119 (0.130) 2.485 0.158 3.617
---------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . (0.000) (0.494) (0.521) (0.296) (0.324) (0.475)
In Excess of Net Investment Income . . (0.000) (0.000) (0.000) (0.170) (0.000) (0.000)
From Net Realized Capital Gains. . . . (0.000) (0.293) (1.627) (1.260) (0.000) (1.268)
---------- --------- --------- --------- --------- ---------
Total Distributions. . . . . . . . . . (0.000) (0.787) (2.148) (1.726) (0.324) (1.743)
---------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD. . . . . $15.822 $ 15.704 $ 12.372 $ 14.650 $ 13.891 $ 14.057
---------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- ---------
TOTAL RETURN (3) (4). . . . . . . . . . . 0.67%(5) 33.45% (1.05)% 17.87% 1.12% 29.79%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . $ 16,756 $ 16,018 $ 12,312 $ 15,251 $ 12,693 $ 11,156
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . . 1.15%(7) 1.15% 1.16% 1.20% 1.20% 1.12%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . 1.15%(7) 1.17% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . 3.72%(7) 3.89% 3.16% 1.85% 2.49% 3.54%
Portfolio Turnover Rate. . . . . . . . 6.22%(5) 48.20% 193.40% 109.57% 308.39% 113.97%
Average Commission per Share (9) . . . $ 0.03 - - - - -
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 1.49%; 1995 - 1.51%;
1994 - 1.60%; 1993 - 1.59%; 1992 - 1.64% and 1991 - 1.74%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups,
mark-downs or spreads on shares traded on a principal basis.
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,
SIX MONTHS ENDED ----------------------------------------------------------------------
JUNE 30, 1996 (1) 1995 1994 (2) 1993 1992 1991
---------------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD. . $ 10.510 $ 9.718 $ 10.923 $ 10.659 $ 11.372 $ 10.610
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . 0.298 0.765 0.690 0.674 0.886 0.628
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . (0.535) 1.191 (0.986) 0.328 (0.187) 0.929
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS. . . . . (0.237) 1.956 (0.296) 1.002 0.699 1.557
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . (0.000) (0.765) (0.690) (0.673) (0.887) (0.614)
In Excess of Net Investment Income . . (0.000) (0.045) (0.000) (0.000) (0.000) (0.000)
From Net Realized Capital Gains. . . . (0.000) (0.354) (0.105) (0.062) (0.525) (0.181)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.112) (0.000) (0.000) (0.000)
Tax Return of Capital. . . . . . . . . (0.000) (0.000) (0.002) (0.003) (0.000) (0.000)
--------- --------- --------- --------- --------- ---------
Total Distributions. . . . . . . . . . (0.000) (1.164) (0.909) (0.738) (1.412) (0.795)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD. . . . . $ 10.273 $ 10.510 $ 9.718 $ 10.923 $ 10.659 $ 11.372
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN (3) (4). . . . . . . . . . . (2.25)%(5) 20.18% (2.72)% 9.38% 6.13% 14.70%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . $ 10,795 $ 11,618 $ 14,444 $ 20,710 $ 24,280 $ 35,544
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . . 0.85%(7) 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . 0.85%(7) 0.85% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . 5.66%(7) 6.18% 5.65% 5.20% 6.41% 7.15%
Portfolio Turnover Rate. . . . . . . . 139.71%(5) 252.94% 289.71% 27.84% 133.86% 125.90%
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 1.67%; 1995 - 1.59%;
1994 - 1.45%; 1993 - 1.30%; 1992 - 1.17% and 1991 - 1.04%.
(7) Annualized.
(8) 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,
SIX MONTHS ENDED ---------------------------------------------------------------------
JUNE 30, 1996(1) 1995 1994 (2) 1993 1992 1991
---------------- ---- ------- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD. . $ 13.823 $ 11.752 $ 11.348 $ 10.177 $ 10.377 $ 9.734
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . . 0.029 0.014 0.013 0.086 0.128 0.154
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . . 1.329 2.872 1.119 1.679 (0.319) 0.645
--------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS. . . . . 1.358 2.886 1.132 1.765 (0.191) 0.799
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . . (0.000) (0.000) (0.023) (0.091) (0.009) (0.156)
In Excess of Net Investment Income . . (0.000) (0.000) (0.000) (0.007) (0.000) (0.000)
From Net Realized Capital Gains. . . . (0.000) (0.815) (0.698) (0.496) (0.000) (0.000)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.007) (0.000) (0.000) (0.000)
--------- --------- --------- --------- --------- ---------
Total Distributions. . . . . . . . . . (0.000) (0.815) (0.728) (0.594) (0.009) (0.156)
--------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD. . . . . $ 15.181 $ 13.823 $ 11.752 $ 11.348 $ 10.177 $ 10.377
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN (3) (4). . . . . . . . . . . 10.04%(5) 24.32% 10.02% 17.32% (1.83)% 8.22%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). . $ 24,268 $ 18,191 $ 11,500 $ 12,230 $ 9,280 $ 8,304
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . . 1.20%(7) 1.20% 1.20% 1.20% 1.20% 1.11%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (8) . . . . . . . . . . 1.20%(7) 1.20% - - - -
Ratio of Net Investment Income to
Average Net Assets . . . . . . . . 0.42%(7) 0.12% 0.16% 0.92% 1.34% 1.40%
Portfolio Turnover Rate. . . . . . . . 18.83%(5) 97.85% 110.12% 78.50% 103.43% 79.97%
Average Commission per Share (9) . . . $ 0.04 - - - - -
</TABLE>
(1) Unaudited.
(2) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(3) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(4) 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 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: 1996 - 1.55%; 1995 - 1.67%;
1994 - 2.22%; 1993 - 1.79%; 1992 - 2.26% and 1991 - 2.93%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups, mark-
downs or spreads on shares traded on a principal basis.
78
<PAGE>
VARIABLE INVESTORS SERIES TRUST
SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1995(1) DECEMBER 31, 1995(2)
--------------- --------------------
NET ASSET VALUE AT BEGINNING OF PERIOD. $ 12.638 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . (0.043) (0.042)
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . 3.636 3.047
---------- ----------
TOTAL FROM INVESTMENT OPERATIONS. . . . 3.593 3.005
---------- ----------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . (0.000) (0.000)
From Net Realized Capital Gains. . . (0.000) (0.367)
---------- ----------
Total Distributions. . . . . . . . . (0.000) (0.367)
---------- ----------
NET ASSET VALUE AT END OF PERIOD. . . . $ 16.231 $ 12.638
---------- ----------
---------- ----------
TOTAL RETURN (3) (4). . . . . . . . . . 28.43%(5) 30.08%(5)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). $ 9,520 $ 3,813
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . 1.35%(7) 1.35%(7)
Ratio of Operating Expenses to
Average Net Assets Before Expense
Reductions (8). . . . . . . . . . 1.35%(7) 1.38%(7)
Ratio of Net Investment Income to
Average Net Assets . . . . . . . (0.87)%(6) (0.79)%(7)
Portfolio Turnover Rate. . . . . . . 30.91%(5) 73.76%(5)
Average Commission per Share (9) . . $ 0.05 -
(1) Unaudited.
(2) From commencement of operations May 4, 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 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 1995. (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: 1996 - 3.04%;
1995 - 9.00%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups,
mark-downs or spreads on shares traded on a principal basis.
79
<PAGE>
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1995(1) DECEMBER 31, 1995(2)
---------------- --------------------
NET ASSET VALUE AT BEGINNING OF PERIOD. $ 11.171 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income. . . . . . . . 0.023 0.045
Net Realized and Unrealized Gain
(Loss) on Investments . . . . . . 1.553 1.266
--------- ---------
TOTAL FROM INVESTMENT OPERATIONS. . . . 1.576 1.311
--------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income . . . . . (0.000) (0.045)
From Net Realized Capital Gains. . . (0.000) (0.095)
--------- ---------
Total Distributions. . . . . . . . . (0.000) (0.140)
--------- ---------
NET ASSET VALUE AT END OF PERIOD. . . . $ 12.747 $ 11.171
--------- ---------
--------- ---------
TOTAL RETURN (3) (4). . . . . . . . . . 14.11%(5) 13.09%(5)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's). $ 7,546 $ 3,335
Ratio of Operating Expenses to
Average Net Assets (6). . . . . . 1.25%(7) 1.25%(7)
Ratio of Operating Expenses to
Average Net Assets Before Expense
Reductions (8). . . . . . . . . . 1.29%(7) 1.49%(7)
Ratio of Net Investment Income to
Average Net Assets . . . . . . . 0.51%(6) 1.17%(7)
Portfolio Turnover Rate. . . . . . . 71.04%(5) 33.49%(5)
Average Commission per Share (9) . . $ 0.06 -
(1) Unaudited.
(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 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.
(5) Not annualized.
(6) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1996 and 1995. (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: 1996 - 3.30%;
1995 - 7.27%.
(7) Annualized.
(8) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(9) For fiscal years beginning on or after September 1, 1995, the Portfolio is
required to disclose its average commission rate per share for trades on
which commissions are charged. This rate does not reflect mark-ups,
mark-downs or spreads on shares traded on a principal basis.
80
<PAGE>
PRINCIPAL OFFICERS AND TRUSTEES OF
VARIABLE INVESTORS SERIES TRUST
----------------
NORMAN A. FAIR, TRUSTEE
WESLEY E. HORTON, TRUSTEE
W. LAWRENCE HOWE, TRUSTEE
LAIRD E. WIGGIN, TRUSTEE
PAUL G. CHENAULT, TRUSTEE
STEPHAN M. LARGENT, PRESIDENT AND TRUSTEE
ARNOLD R. BERGMAN, SECRETARY
MARK T. KELLY, TREASURER
----------------
INVESTMENT ADVISER
FIRST VARIABLE ADVISORY SERVICES CORP.
----------------
THE INFORMATION CONTAINED IN THIS REPORT IS INTENDED FOR GENERAL INFORMATIONAL
PURPOSES ONLY. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY CURRENT TRUST AND SEPARATE ACCOUNT
PROSPECTUSES WHICH CONTAIN IMPORTANT INFORMATION CONCERNING THE TRUST, THE
COMPANY, AND ITS CURRENT PUBLIC OFFERING OF VARIABLE ANNUITY CONTRACTS.
