<PAGE> 1
1997
semi-
annual
report
June 30, 1997
Variable Investors Series Trust
[FIRST VARIABLE LIFE LOGO]
<PAGE> 2
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
GROWTH (FORMERLY COMMON STOCK) AND
MULTIPLE STRATEGIES PORTFOLIOS
Sub-Advisor: Value Line Asset Management [LOGO]
a division of Value Line, Inc.
After a strong first quarter, during which the economy grew at a robust 4.9%,
the second quarter saw growth slow to an acceptable 2.2% level. The Federal
Reserve raised interest rates in March by 25 basis points in response to the
strong growth in the first quarter, but has since stayed on the sidelines
refusing to raise rates again at either the July or August Federal Open Market
Committee meetings. The stock market started the year on a strong note, but then
suffered a 10% correction in response to the strong economic data and the
Federal Reserve tightening. However, as evidence grew that economic growth was
slowing, the market staged a huge rally, moving up 25% in just three months. The
combination of a "Goldilocks" type economy, growing neither too fast nor too
slow, but just right, coupled with a very benign inflation outlook (the PPI
declined for five consecutive months), and stronger than expected corporate
profits proved to be Nirvana for equity investors and the S&P 500 was up more
than 20% for the first six months of the year. The Dow Jones Industrial Average
was up a similar amount, but the action was focused primarily on large
capitalization stocks as the mid-cap and small cap indices trailed the S&P 500
by a significant amount.
For the second half of the year we look for continued moderate economic growth
of around 2.5%, with corresponding low inflation, and better than expected
corporate profit growth. In such an environment we believe the stock market can
continue to perform well. However, we think the market has probably rallied too
far and too fast, discounting a tremendous amount of good news on the economy,
interest rates, and corporate profits in the process. Any disappointment in one
of these areas could lead to some profit taking. We would view this as a prelude
to the next move up.
GROWTH PORTFOLIO
The investment objective of the Growth 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 Growth Portfolio had a total return (including dividends and income) for the
first six months of 1997 of 12.49% as compared to 20.59% for the Standard &
Poor's 500 Index. Stock selection is guided by the Value Line Timeliness Ranking
System which focuses on stocks with superior earnings growth and price momentum.
The Ranking System is heavily weighted in mid-cap and small-cap stocks which
lagged the large capitalization stocks such as those in the S&P 500 during the
first six months of the year. In addition, the Portfolio was overweighted in the
technology sector, particularly networking stocks which suffered from product
transitions and a pause in local and long distance carrier capital spending
plans. The Portfolio was also overweighted in energy stocks, especially oil
service and drillers, and this area was weak due to a pullback in the price of
the commodity. The third overweighted sector was financial services, primarily
banks and insurance companies; two industries with excess capital and under
ongoing consolidation. This proved to be a benefit as the financial services
stocks in the Portfolio returned more than 30% in the first six months.
For the rest of 1997 we have a more sanguine outlook for the stock market,
although we do believe a high single digit or low double digit return is
possible from current levels. However, we would expect some type of a meaningful
correction during the second half, as the market has risen too far in too short
a period of time. We expect to remain overweighted in technology, with a focus
on networking and enterprise software stocks, financials, and energy stocks.
Utilities and consumer staples will remain underweight, due to poor earnings
growth and a lack of pricing power.
VALUE LINE ASSET MANAGEMENT
1
<PAGE> 3
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the Growth Portfolio
and the S&P 500 Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION> Vist S&P 500
Year/Qtr Growth Index
------------ ------- -------
<S> <C> <C>
1994 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000
Jun 30 $ 9,393 $ 8,988
Sep 30 $10,141 $10,380
Dec 31, 1994 $10,264 $10,303
Mar 31 $10,834 $11,305
Jun 30 $12,461 $12,383
Sep 30 $14,180 $13,365
Dec 31, 1995 $14,075 $14,169
Mar 31 $15,209 $14,930
Jun 30 $15,970 $15,599
Sep 30 $16,924 $16,081
Dec 31, 1996 $17,708 $17,420
Mar 31 $16,850 $17,889
Jun 30 $19,920 $21,009
</TABLE>
* 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. Past performance is not predictive of future
performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Past 10
year years years
---- ----- -----
Growth Portfolio 24.73% 16.80% 13.08%
"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 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> 4
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
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, 1997, the Portfolio was 76% invested in common stocks, 13% in bonds
with a mixture of high grade corporates, government, and government agencies,
and approximately 11% in short term securities. This mixture (more weighted in
stocks than a typical 60% equities/40% bonds balanced portfolio) proved to be
beneficial as the equity market posted a 20% return for the first six months,
while the bond market had only a low single digit total return. The Portfolio
had a total return of 10.27% for the first six months compared to 13.46% for a
60% S&P 500 Index / 40% Lehman Brothers Government/Corporate Bond Index mixture,
as the equity holdings were unable to keep pace with the S&P 500 Index.
The equity holdings in the Portfolio mirror those of the Growth Portfolio and
will continue to do so. Selection is guided by the Value Line Timeliness Ranking
System which favorably ranks stocks with earnings and price momentum. We
anticipate a more conservative equity position in the Portfolio going forward,
based upon our view of a likely correction for the stock market some time in the
second half of 1997.
Value Line Asset Management
- --------------------------------------------------------------------------------
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 *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vist Lehman Bros. S&P 500
Year/Qtr Multiple Strategies Govt/Corp Index
- ------------ ------------------- ------------ -------
<S> <C> <C> <C>
1994 $10,000 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000 $10,000
Jun 30 $ 9,364 $ 9,876 $ 9,966
Sep 30 $ 9,913 $ 9,925 $10,000
Dec 31, 1994 $ 9,974 $ 9,962 $10,303
Mar 31 $10,475 $10,458 $11,305
Jun 30 $11,845 $11,138 $12,383
Sep 30 $13,154 $11,343 $13,365
Dec 31, 1995 $13,189 $11,872 $14,769
Mar 31 $13,884 $11,594 $14,930
Jun 30 $14,351 $11,648 $15,599
Sep 30 $15,053 $11,854 $16,081
Dec 31, 1996 $15,609 $12,217 $17,420
Mar 31 $15,008 $11,875 $17,889
Jun 30 $17,212 $12,526 $21,009
</TABLE>
* 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. Past performance is not predictive of future
performance.
3
<PAGE> 5
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Past 10
year years years
---- ----- -----
Multiple Strategies Portfolio 19.94% 14.21% 11.29%
"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 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.
4
<PAGE> 6
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis --------------
For the Six Months Ended June 30, 1997 WARBURG PINCUS
Continued --------------
GROWTH & INCOME PORTFOLIO
Sub-Advisor: Warburg Pincus Counsellors, Inc.
The Growth & Income Portfolio's investment objective is to provide growth of
capital and income.
THE MANAGER: Brian Posner, a twelve year investment veteran who most recently
managed Fidelity Equity Income II Fund for five years, took control of the
Growth & Income Portfolio on January 9, 1997. Mr. Posner's investment style
targets temporarily out-of-favor stocks, including those that are in cyclically
depressed industries. Because he emphasizes risk-adjusted total-return
potential, most of the stocks held in the Portfolio pay dividends. In fact, the
Portfolio has a strong bias in favor of mid- and large-cap companies.
First Quarter Recap: Applying his brand of a disciplined, value-oriented
investment approach, Mr. Posner replaced almost every security in the Portfolio
during his first five weeks at the helm. Over that period, he worked closely
with the Portfolio's previous manager, Anthony Orphanos, to minimize shareholder
exposure to capital-gains taxes. Likewise, he managed the Portfolio's transition
with an eye on avoiding lapses in performance; by carefully planning his stock
sales and purchases, the Portfolio participated in the market's rise, which was
quite strong early in the first quarter (though a dramatic market pullback late
in the quarter took away much of the Portfolio's and the S&P 500's year-to-date
gains).
Second Quarter Commentary: During the second quarter, the Portfolio saw strong
showings from a number of its holdings during the period, with particularly good
performance coming from its technology, health care and financial stocks. The
Portfolio made few significant changes during the quarter, as fundamentals of
companies held in the Portfolio remain sound, and the majority of the holdings
continue to be attractively valued for their risk-adjusted-return potential. In
terms of sectors, the Portfolio's industry weightings stayed generally close to
those of the S&P 500 Index during the period. Although Mr. Posner selects stocks
strictly on a bottom-up basis, he saw little incentive to take on excessive
industry risk, given the lack of compelling sector valuations. Against this
backdrop, he attempted to add value via stock selection within specific areas
and by adding a few "special situation" stocks as opportunities arose. Overall,
the Portfolio returned 15.20% for the six months ended June 30, 1997, compared
to 20.59% for the S&P 500 Index.
One noteworthy composition change was within the energy and oil & oil-services
sectors of the Portfolio. The Portfolio increased its exposure to service
providers in deep-water-drilling. These stocks, which were strong performers in
1996, had come under heavy pressure earlier this year due to fears of declining
energy prices. The manager believed that the market's pessimism regarding these
companies was extreme, particularly given the companies' lengthy and potentially
lucrative contracts for projects in the Gulf of Mexico and the North Sea.
The Portfolio continued to have significant exposure to tobacco companies, which
were volatile performers during the period due to uncertainties surrounding the
scope of the industry's class-action-lawsuit settlement. Although progress
toward a settlement with the government continues to merit close scrutiny, Mr.
Posner's outlook on the longer-term prospects for these stocks remains positive.
For one, he believes that the market's fears regarding "worst-case" scenarios
are fading, given the tentative settlement details announced recently. And the
government, in his view, will not insist on reforms and punitive measures that
will threaten the industry's ability to make settlement payments. Other grounds
for optimism include the product and marketing creativity of companies such as
Philip Morris Cos., Inc. and the relatively inelastic demand for tobacco.
Elsewhere, the Portfolio established positions in special situation stocks such
as Polaroid Corp. The manager believes the efforts of the company's relatively
new management team, which has been revamping product lines and streamlining
costs, could result in significantly improved longer-term cash flows.
WARBURG, PINCUS COUNSELLORS, INC.
5
<PAGE> 7
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the Growth & Income
Portfolio and the S&P 500 Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vist Growth S&P 500
Year/Qtr & Income Index
- ------------ ----------- -------
<S> <C> <C>
1994
Apr 1, 1994
Jun 30
Sep 30
Dec 31, 1994
Mar 31
May 4, 1995 $10,000 $10,000
Jun 30 $10,152 $10,232
Sep 30 $11,145 $11,043
Dec 31, 1995 $11,310 $11,708
Mar 31 $12,747 $12,337
Jun 30 $12,907 $12,890
Sep 30 $12,162 $13,288
Dec 31, 1996 $12,680 $14,395
Mar 31 $12,833 $14,782
Jun 30 $14,608 $17,360
</TABLE>
* 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. Past performance is not predictive of future
performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Life of
Year Portfolio***
---- ------------
Growth & Income Portfolio 13.26% 19.94%
"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)
6
<PAGE> 8
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
-------------------
HIGH INCOME BOND PORTFOLIO FEDERATED INVESTORS
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. With economic
growth seemingly in check, the high yield market delivered good performance
through the first half of 1997. High yield bonds (as well as most financial
assets) continued to benefit from an almost ideal economic environment. The
economy appears to be slowing from its rapid first quarter pace while inflation
continues to modestly decline. This environment caused interest rates to decline
and stock prices to set new highs. This strength in high quality bonds and
equities had a positive impact on the high yield market. The high yield market
also benefited from strong demand as mutual fund inflows continued and
structured products like "Collateralized Bond Obligations" dedicated money to
the high yield market. In this environment, high yield bonds outperformed high
quality bonds as default activity remained modest and the yield spread between
high yield bonds and Treasury securities remained relatively constant.
The High Income Bond Portfolio returned 6.16% for the six months ended June 30,
1997, edging out the Lehman Brothers Single "B" Index which returned 5.44%.
Several factors positively impacted performance during this time period. First,
the Portfolio continued to avoid most problem credit situations in the high
yield market. Second, the cable industry, which is one of the Portfolio's
largest industry exposures, performed well as investors rediscovered the value
of well-managed cable properties. This recognition was driven by Microsoft's $1
billion investment into Comcast Corp. (a Portfolio holding) and several
strategic moves by Cablevision Systems Corp. (also a Portfolio holding) which
improved its overall credit profile. Finally, the Portfolio benefited from
several issuer-specific events. TCI Satellite Entertainment, Inc. agreed to
merge its Primestar satellite operation with News Corp.'s satellite operation
which should result in a stronger credit going forward. However, in a related
development, News Corp. abandoned its agreement with Echostar Satellite
Broadcasting Corp., another satellite operator which the Portfolio holds,
causing Echostar bonds to underperform during the quarter. Also, RBX Corp., a
foam manufacturer, reported better than expected earnings and Qwest
Communications International, Inc. completed an initial public offering of its
stock. On the negative side, Royal Oak Mines, Inc. underperformed as gold prices
sagged.
Our outlook for the high yield market continues to be optimistic, especially as
we look out over the balance of 1997. We see nothing to alter our outlook for
steady economic growth and modest inflation. While markets may be volatile on a
day to day basis, we believe high yield bonds will perform well as long as the
current economic environment continues. As the third quarter begins, the high
yield market is experiencing some modest weakness driven by substantial new
issue supply. Issuers and underwriters have responded to strong demand for high
yield securities and attractive interest rates to bring substantial new issuance
to market. This has caused modest weakness in the market as the secondary market
reacts to the new issuance. However, we believe that underlying demand remains
strong and the supply will be absorbed allowing markets to stabilize.
FEDERATED INVESTORS
7
<PAGE> 9
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the High Income Bond
Portfolio and the Lehman Brothers Single "B" Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vist High Lehman Bros.
Year/Qtr Income Bond Single 'B' Index
- ------------ ----------- ----------------
<S> <C> <C>
1994 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000
Jun 30 $ 9,906 $10,010
Sep 30 $ 9,879 $10,198
Dec 31, 1994 $ 9,655 $10,215
Mar 31 $10,167 $10,745
Jun 30 $10,729 $11,299
Sep 30 $11,102 $11,641
Dec 31, 1995 $11,487 $11,907
Mar 31 $11,795 $12,213
Jun 30 $11,948 $12,484
Sep 30 $12,635 $13,053
Dec 31, 1996 $13,123 $13,523
Mar 31 $13,269 $13,694
Jun 30 $13,931 $14,259
</TABLE>
* 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. Past performance is not predictive of future
performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Past 10
year years years
------ ------ -------
High Income Bond Portfolio 16.60% 10.47% 10.36%
"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.
8
<PAGE> 10
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
MATRIX EQUITY PORTFOLIO
(FORMERLY TILT UTILITY PORTFOLIO) [LOGO SSGA]
Sub-Advisor: State Street Global Advisors
a division of State Street Bank and Trust Company
The investment objective of the Matrix Equity Portfolio is capital appreciation
and current income. The Portfolio will seek to achieve its investment objective
by investing in a diversified portfolio that is selected by the sub-advisor on
the basis of its proprietary analytical model. Sector weights are normally
maintained at a similar level to that of the S&P 500 Index. The Portfolio will
invest at least 65% of its total assets in equity securities. (Prior to May 1,
1997, the Matrix Equity Portfolio was known as the "Tilt Utility Portfolio" and
had different policies, but maintained the same investment objective.)
Increased market volatility was the norm for the first quarter of 1997. Although
many believed that the market had anticipated the Federal Reserve interest rate
hike, market conditions proved that corrective pressures were present. In April,
the S&P 500 Index experienced its third largest point drop in history with a
decline of 20.69 points. In spite of this, the index ended up 5.84% for the
month. SSgA's Matrix Equity strategy experienced much of this same volatility
during the month, however it ended the month lagging the S&P 500 Index by 50
basis points.
From a capitalization perspective, May was almost a complete reversal of April,
with the differential between the S&P 500 and Russell 2000 Indices ending the
month at -5.15%. Small caps were spurred on primarily because of the strong
earnings reported by many companies in this segment of the market. In addition,
investors diversified away from large cap stocks believing that these were
overvalued and fearing they had reached their pinnacle. Our Matrix strategy was
able to take advantage of the movement of assets and posted a positive 1.11%
gain relative to the S&P 500. The positive performance was led by our continued
overweight to technology, specifically computer software, and our overweight to
financials, with much of the gain there coming from the insurance industry.
In June, both large and small capitalization stocks experienced strong
performance results with mid-cap stocks bringing up the rear. The Dow once again
reached several record highs during the month of June closing up 4.66% with the
S&P 500 and the Russell 2000 Indices following at 4.35% and 4.10%, respectively.
The pendulum of technology stocks once again swung the other way as our
overweight in this area cost us 23 basis points. Health care stocks also moved
against us causing the portfolio to forfeit another 38 basis points. These
losses were partially offset by slight gains in other industries which left the
portfolio down slightly for the month with a relative return of -54 basis
points.
Overall the second quarter was extremely volatile for both the market and the
Matrix Equity strategy. Even with the significant market movement the portfolio
finished the quarter with a positive relative return of 6 basis points.
STATE STREET GLOBAL ADVISORS
9
<PAGE> 11
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the Matrix Equity
Portfolio, the S&P Utility Index * and since May 1, 1997 the S&P 500 Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vist Matrix S&P Utility
Year/Qtr Equity Index
- ------------ ----------- -----------
<S> <C> <C>
1994 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000
Jun 30 $ 9,940 $ 9,987
Sep 30 $10,180 $10,076
Dec 31, 1994 $10,009 $ 9,821
Mar 31 $10,604 $10,484
Jun 30 $11,153 $11,259
Sep 30 $12,369 $12,521
Dec 31, 1995 $13,357 $13,923
Mar 31 $12,989 $13,260
Jun 30 $13,446 $13,974
Sep 30 $12,835 $13,503
Dec 31, 1996 $13,973 $14,403
Mar 31 $13,767 $14,028
Jun 30 $15,284 $15.366
</TABLE>
* 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. Effective May 1, 1997, the benchmark for the Matrix
Equity Portfolio is the S&P 500 Index. Past performance is not predictive of
future performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
Matrix Equity Portfolio 13.67% 13.66% 12.99%
"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 Matrix 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 16, 1988)
10
<PAGE> 12
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
SMALL CAP GROWTH PORTFOLIO [LOGO PILGRIM BAXTER & ASSOCIATES, LTD.]
(FORMERLY SMALL CAP PORTFOLIO) -------------------
Sub-Advisor: Pilgrim Baxter & Associates, Ltd. INVESTMENT COUNSEL
The investment objective of the Small Cap Growth 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.
While June's moderate gains don't give us cause for great celebration, the
advance was welcome given that the second quarter began with small cap stock
performance lagging that of the large caps by a magnitude not seen since 1937.
Larger cap stocks and blue-chip type names continued to log solid gains during
June, with the S&P 500 Index up 4.35%. Despite the fact that large cap equities
slightly outperformed the Russell 2000 Index and our relevant growth benchmarks
for the month, the strong performance of the large caps is in many ways a
positive sign for the broader market. It suggests that investors still believe
strongly in domestic equities, and as the economy remains stable it can only be
a matter of time before that support spreads to lift smaller cap stocks as well.
The market's appetite for growth will inevitably be drawn to the smaller
companies achieving some of the most consistent and impressive gains in earnings
and revenues. Overall, the Portfolio returned -0.25% for the six months ended
June 30, 1997, compared to 10.21% for the Russell 2000 Index.
The close of the quarter earnings releases produced some negative announcements,
some of which came from companies in the Small Cap Growth Portfolio. However,
investors seemed more willing to accept this round of earnings shortfalls as
isolated, company-specific events, rather than letting a few announcements
infect an entire sector, as has often been the case in the past. Computer chip
giant Intel, which has roiled the market in the past by missing quarterly
estimates, announced early in June that it would not meet analysts'
expectations. The following day the market opened down sharply in the wake of
such news, but most technology shares actually closed higher for the day. Such a
rational reaction has been reassuring to us during these summer months, which
are often a period of great volatility, particularly for technology shares.
During June, technology shares were up moderately, while the health care and
service sectors turned in the strongest performances. Telemarketing concern
Sitel Corp. climbed 25% during the month, and Pediatrix Medical Group was up
more than 15%. Consumer stocks also logged solid returns after reporting strong
quarterly results. St. John Knits, Inc. and Wolverine World Wide, Inc. (maker of
Hush Puppies shoes) shares were up 27% and 17%, respectively, while restaurateur
Papa John's International, Inc. gained 15% during the month.
Another sign that the health of smaller cap and growth stocks is returning,
initial public offerings and secondaries have resumed. The deals span more
industries than just technology, and they are not being bid up or down as
egregiously as is the case when small cap stocks have peaked or gone too far.
Investors are approaching this season's IPOs with an eye for quality and proven
concepts and managements. For example, Pierce-Leahy Corp. debuted at the end of
June with the kind of history and future for growth that we look for and want to
own. But, the company's business isn't exactly flashy, they archive documents,
so we didn't expect it to be a "hot" deal. The offering ended up being eight
times oversubscribed and the shares have gone from $18 at the offering to more
than $25 last week. On the flip-side of the IPO coin, Peapod, the much
ballyhooed Internet grocery shopping service, was priced at $16 and traded down
almost immediately. Investors were definitely looking for a few quarters of
performance before making a long-term commitment to these shares.
During the next few weeks, the market will be digesting and reacting to what we
expect to be some very positive earnings news. If investors are once again
willing to look at smaller companies and reward real growth in earnings, which
hasn't been the case for more than a year, then we believe there will be some
very positive days ahead for the types of companies we focus on. If growth
stocks, and the technology sector in particular, can make it through the summer
with only minor see-sawing, it will bode well for the second half of 1997 and
our style of investing. Eventually, investors will complete the recognition that
began in April of smaller company's earnings gains, and the competition will
resume to hold the best quality growth names like those that make up the
Portfolio.
PILGRIM BAXTER & ASSOCIATES, LTD.
11
<PAGE> 13
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the Small Cap Growth
Portfolio and the Russell 2000 Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Vist Small Russell 2000
Year/Qtr Capital Growth Index
- ------------ -------------- ------------
<S> <C> <C>
1994
Apr 1, 1994
Jun 30
Sep 30
Dec 31, 1994
May 4, 1995 $10,000 $10,000
Jun 30 $10,939 $10,676
Sep 30 $12,593 $11,731
Dec 31, 1995 $13,008 $11,985
Mar 31 $14,439 $12,000
Jun 30 $16,705 $13,230
Sep 30 $17,587 $13,275
Dec 31, 1996 $16,582 $13,965
Mar 31 $13,401 $13,242
Jun 30 $16,540 $15,655
</TABLE>
* 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. Past performance is not predictive of future
performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Life of
Year Portfolio***
---- ------------
Small Cap Growth Portfolio (0.99)% 26.21%
"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 Growth
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)
12
<PAGE> 14
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
U.S. GOVERNMENT BOND PORTFOLIO [STRONG 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.
The U.S. Government Bond Portfolio returned 2.95% for the six months ended June
30, 1997, compared to 2.62% for the Lehman Brothers Government Bond Index. The
first half of 1997 has shown strong economic growth in almost all sectors of the
economy. At the end of the first quarter, market yields were near their highs
for the year as investors expected continued strength in the economy to lead to
another round of Federal Reserve monetary tightening. But a subsequent slowdown
in retail sales, durable goods, housing, and auto sales eased the market's fears
of further Fed tightening during the second quarter, as inflationary pressure
appeared to be in check. The delay in tightening and continued signs of
moderating growth encouraged bond investors and led to a yield decline of 30 to
40 basis points across the yield curve through the end of June.
Since April, returns among bond market sectors have been similar, with
mortgage-backed securities and corporate bonds being the best performers, as
yield spreads to Treasuries tightened modestly. Because the decline in yields
was relatively uniform across maturities, longer-duration bonds out-performed
short-duration bonds.
For the remainder of 1997, we believe the Fed will continue to raise rates, but
at a more protracted pace than we have seen in previous tightening cycles.
Industrial production remains robust, the housing market is showing signs of
renewed strength, unemployment is at historical lows, and the stock market is up
over 20% since Alan Greenspan first spoke about "irrational exuberance." Any
indication of a pickup in inflationary pressures could be the signal for further
Fed tightening. We will maintain our neutral duration position and our
overweighting in mortgages until there are clearer signs of future interest rate
movements.
Such factors are why, at Strong, we believe that successful bond investing stems
from time in the market rather than timing the market. It is important that
investors establish an investment timeline, select the Portfolio that matches
this horizon and then stay the course. In our experience, investors who have the
discipline to look past short-term turbulence have the greatest chance of
reaching their goals.
STRONG CAPITAL MANAGEMENT, INC.
13
<PAGE> 15
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
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 *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION
Vist U.S. Lehman Bros.
Year/Qtr Govt Bond Govt Bond Index
- ------------ --------- ---------------
<S> <C> <C>
1994 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000
Jun 30 $ 9,929 $ 9,885
Sep 30 $ 9,960 $ 9,927
Dec 31, 1994 $ 9,959 $ 9,962
Mar 31 $10,474 $10,431
Jun 30 $11,162 $11,078
Sep 30 $11,403 $11,273
Dec 31, 1995 $11,968 $11,788
Mar 31 $11,663 $11,522
Jun 30 $11,666 $11,576
Sep 30 $11,839 $11,772
Dec 31, 1996 $12,217 $12,115
Mar 31 $12,143 $11,729
Jun 30 $12,578 $12,385
</TABLE>
* 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. Past performance is not predictive of future
performance.
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Past 10
year years years
---- ----- -----
U.S. Government Bond Portfolio 7.81% 7.03% 8.20%
"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.
14
<PAGE> 16
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ended June 30, 1997
Continued
WORLD EQUITY PORTFOLIO [LOGO KEYSTONE
Sub-Advisor: Keystone Investment Management Company INVESTMENTS]
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.
The World Equity Portfolio consists of 33% U.S. small cap stocks, 54%
international blue chip stocks, 8% emerging market equities, and 5% cash. Year
to date performance as of June 30, 1997 is 10.36%. The breakdown of performance
is 15.84% from our international portfolio and 4.93% from our domestic U.S.
small cap holdings. The relative benchmark performance for these components is
12.29% for the Lipper International Index (+3.55%) and 9.78% for the Lipper
Small Cap Index (-4.85%). Year to date we have slightly under performed our
benchmark by .78%. This measure assumes the benchmark is weighted 50% in each
index. We are pleased that our domestic small cap portfolio has returned 18%
since April and believe that market sentiment toward small caps has improved.
International Portfolio
- -----------------------
We are pleased with our strong relative performance YTD. Western Europe is our
largest weighting at 31%. The trends of 1996 of low inflation, low relative
interest rates, slow but improving growth, strong bond markets, and cost cutting
by more European companies have carried into 1997. Switzerland has been the top
performer at 32%. Japan is our largest country weighting at 15% and has returned
18.37%. Brazil with a weighting of 7.5% has been a very strong contributor of
performance at 75%. The markets of Australia and Canada are positive YTD with
Canada up 11.7%. Hong Kong has been the best performing of our Asian portfolios,
up 31%. Our Asian exposure (ex Japan) has been small. Currently the World Equity
Portfolio is 61% linked to the U.S. dollar; 33% is in U.S. equities, 8% in
countries linked to the U.S. dollar, and 20% is in currency hedges.
International Outlook for 1997
- ------------------------------
We have seen a continuation of 1996 trends so far in 1997. Foreign markets are
generally showing positive returns but with differences in performance, i.e.
Brazil up 75%, and Malaysia -21%. However, the continued strength of the U.S.
large cap stocks as measured by the S&P 500 and DJIA continues to overshadow the
broad foreign markets as represented by EAFE and the Lipper International Index.
We continue to be positive on the outlook for international equity markets in
1997. Worldwide economic growth should increase moderately at about 2.5% for the
G-7 countries with emerging economies growing at 5%. Inflation and interest
rates should continue to be moderate and well below U.S. interest rates.
Restructuring should continue in Europe and Japan. The biggest risks to our
positive outlook would be the ripple effects coming from a sharp decline in the
U.S. market. Valuations on international equities are reasonable on an absolute
basis and relative to the U.S.
Domestic Small Cap
- ------------------
Like the international markets of 1997, we have seen a continuation of 1996
trends in the U.S. small cap market. The continued strength of the U.S. large
cap stocks as measured by the S&P 500 and DJIA continues to overshadow the
domestic small cap market as represented by the Lipper Small Cap index gains of
9.78%. Investor preference for large cap stocks witnessed in 1995 and 1996 has
continued in 1997. The overall strength of the U.S. market driven by moderate
economic growth, low inflation, and relatively low interest rates has not only
driven the large cap indices to record levels, but also lifted the other major
indices, i.e. NASDAQ Composite, Russell 2000, and AMEX. We believe the run-up in
large caps has now put small cap stocks in a position where they are very
attractive from a valuation standpoint. We saw the
15
<PAGE> 17
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ending June 30, 1997
Continued
market respond to this in May. In May and June our performance was up 17.9%, the
Lipper Small Cap Index was up 17.3%, and the S&P 500 was up 10.8%. The top
performing sectors for us have been electronic technology, energy, and health
care. Software has been disappointing, but we have been underweight in this area
relative to the benchmark. We believe that over the long term small caps will
outperform large caps and will be a significant contributor of diversification
to a client's portfolio.
Overall Outlook
- ---------------
We believe that the remainder of the year will be positive for both the foreign
and the domestic small cap markets. We will continue to diligently monitor these
markets for changes in the above mentioned fundamentals and to search for strong
investment opportunities.
KEYSTONE INVESTMENT MANAGEMENT COMPANY
- --------------------------------------------------------------------------------
Comparison of Change in Value of a $10,000 Investment in the World Equity
Portfolio and the MSCI World Index *
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION
Vist World MSCI World
Year/Qtr Equity Index
------------ ---------- ----------
<S> <C> <C>
1994 $10,000 $10,000
Apr 1, 1994 $10,000 $10,000
Jun 30 $ 9,830 $10,301
Sep 30 $10,523 $10,522
Dec 31, 1994 $10,707 $10,447
Mar 31 $10,921 $10,957
Jun 30 $11,806 $11,375
Sep 30 $13,312 $11,849
Dec 31, 1995 $13,310 $12,329
Mar 31 $13,721 $12,772
Jun 30 $14,646 $13,131
Sep 30 $14,263 $13,187
Dec 31, 1996 $14,958 $13,666
Mar 31 $14,544 $13,749
Jun 30 $16,508 $15,728
</TABLE>
* 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. Past performance is not predictive of future
performance.
16
<PAGE> 18
VARIABLE INVESTORS SERIES TRUST
Management's Discussion and Analysis
For the Six Months Ending June 30, 1997
Continued
- --------------------------------------------------------------------------------
Average Annual Total Returns **
- --------------------------------------------------------------------------------
Periods ended June 30, 1997
Past 1 Past 5 Life of
year years Portfolio***
---- ----- ------------
World Equity Portfolio 12.70% 14.58% 8.77%
"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)
17
<PAGE> 19
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<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--(114.4%)
Federal Farm Credit Bank
Consolidated Discount Note 5.980% 07/01/1997 $ 70,000 $ 70,000
Federal Home Loan Bank
Consolidated Discount Note 6.000% 07/01/1997 125,000 125,000
Federal Home Loan Mortgage
Discount Note 5.750% 07/01/1997 70,000 70,000
Federal National Mortgage
Association Discount Note 5.450% 07/02/1997 70,000 69,989
Student Loan Marketing
Discount Note 6.000% 07/01/1997 365,000 365,000
United States Treasury Bills 4.770% 07/03/1997 50,000 49,987
--------
TOTAL GOVERNMENT AND AGENCY SECURITIES--(Cost $749,976) 114.4% 749,976
--------
TOTAL INVESTMENTS--(Cost $749,976) 114.4% 749,976
OTHER ASSETS LESS LIABILITIES-- (14.4)% (94,558)
----- --------
NET ASSETS-- 100.0% $655,418
===== ========
</TABLE>
See notes to financial statements.
18
<PAGE> 20
<TABLE>
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE--(4.8%)
McDonnell Douglas Corporation ..................................... 15,000 $ 1,027,500
Precision Castparts Corporation ................................... 17,500 1,043,438
United Technologies Corporation ................................... 10,000 830,000
-----------
2,900,938
BANKS--(3.5%)
BankAmerica Corporation ........................................... 20,000 1,291,250
Fifth Third Bancorp ............................................... 10,500 861,656
-----------
2,152,906
CHEMICALS--(1.9%)
Praxair, Inc. ..................................................... 20,500 1,148,000
-----------
COMMUNICATION EQUIPMENT--(0.7%)
Andrew Corporation (a) ............................................ 15,950 448,594
-----------
COMPUTER RELATED--(2.3%)
Cisco Systems, Inc. (a) ........................................... 21,000 1,409,625
-----------
COMPUTER SOFTWARE--(1.6%)
Computer Associates International, Inc. ........................... 17,250 960,609
-----------
COSMETICS & TOILETRIES--(2.0%)
Gillette Company .................................................. 13,000 1,231,750
-----------
DRUGS--(7.0%)
Amgen, Inc. ....................................................... 14,000 813,750
Cardinal Health, Inc. ............................................. 16,200 927,450
Eli Lilly & Company ............................................... 10,000 1,093,125
Pfizer, Inc. ...................................................... 12,000 1,434,000
-----------
4,268,325
DRUGS/PHARMACEUTICALS--(0.9%)
Dura Pharmaceuticals, Inc. (a) .................................... 14,000 558,250
-----------
ELECTRIC UTILITIES--(2.0%)
AES Corporation (a) ............................................... 17,000 1,202,750
-----------
ELECTRONICS--(3.0%)
Adaptec, Inc. (a) ................................................. 26,000 903,500
Dynatech Corporation (a) .......................................... 25,000 893,750
-----------
1,797,250
FINANCIAL SERVICES--(7.7%)
Finova Group, Inc. ................................................ 10,500 803,250
Green Tree Financial, Inc. ........................................ 15,000 534,375
Money Store, Inc. ................................................. 15,000 430,313
Sunamerica, Inc. .................................................. 17,000 828,750
Travelers, Inc. ................................................... 33,000 2,081,062
-----------
4,677,750
</TABLE>
See notes to financial statements.
19
<PAGE> 21
<TABLE>
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
FOOD & BEVERAGES--(3.0%)
Campbell Soup Company ............................................. 20,000 $ 1,000,000
Coca-Cola Company ................................................. 12,000 810,000
-----------
1,810,000
HOUSEHOLD PRODUCTS--(1.4%)
Procter & Gamble Company .......................................... 6,000 847,500
-----------
INDUSTRIALS--(1.2%)
duPont (E.I.) deNemours ........................................... 12,000 754,500
-----------
INSURANCE--(10.6%)
Allstate Corporation .............................................. 10,000 730,000
American International Group, Inc. ................................ 8,000 1,195,000
Conseco, Inc. ..................................................... 40,000 1,480,000
Frontier Insurance Group, Inc. .................................... 31,000 2,007,250
Western National Corporation ...................................... 40,000 1,072,500
-----------
6,484,750
MACHINERY & EQUIPMENT--(1.8%)
Bombardier, Inc. .................................................. 49,000 1,110,612
-----------
MEDICAL SUPPLIES & SERVICES--(2.3%)
Johnson & Johnson ................................................. 15,000 965,625
United States Surgical Corporation ................................ 12,000 447,000
-----------
1,412,625
METALS--(1.1%)
Wyman-Gordon Company (a) .......................................... 25,000 675,000
-----------
OIL & GAS--(12.4%)
BJ Services Company (a) ........................................... 10,000 536,250
ENSCO International, Inc. (a) ..................................... 10,000 527,500
Helmerich & Payne, Inc. ........................................... 21,000 1,210,125
Louisiana Land & Exploration Company .............................. 30,000 1,713,750
Oryx Energy Company (a) ........................................... 30,000 633,750
Transocean Offshore, Inc. ......................................... 24,000 1,743,000
USX Marathon Group ................................................ 15,000 433,125
Williams Companies, Inc. .......................................... 18,000 787,500
-----------
7,585,000
PACKAGING--(1.3%)
Sealed Air Corporation (a) ........................................ 16,000 760,000
-----------
PETROLEUM SERVICES--(7.7%)
Baker Hughes, Inc. ................................................ 25,000 967,188
Rowan Companies, Inc. (a) ......................................... 35,000 986,562
Smith International, Inc. (a) ..................................... 27,000 1,640,250
Tidewater, Inc. ................................................... 25,000 1,100,000
-----------
4,694,000
</TABLE>
See notes to financial statements
20
<PAGE> 22
<TABLE>
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
PRINTING & PUBLISHING--(1.3%)
Omnicom Group ..................................................... 13,000 $ 801,125
-----------
RETAIL--(0.4%)
ShopKo Stores, Inc. ............................................... 8,800 224,400
-----------
RETAIL-SPECIALTY--(1.3%)
Consolidated Stores Corporation (a) ............................... 23,438 814,453
-----------
SOFTWARE--(6.5%)
BMC Software, Inc. ................................................ 44,000 2,436,500
Microsoft Corporation (a) ......................................... 12,000 1,516,500
-----------
3,953,000
TELECOMMUNICATIONS--(7.8%)
ADC Telecommunications, Inc. (a) .................................. 20,000 667,500
Allied Signal, Inc. ............................................... 9,000 756,000
Ascend Communications, Inc. (a) ................................... 20,000 787,500
PairGain Technologies, Inc. (a) ................................... 30,000 465,000
Tellabs, Inc. (a) ................................................. 26,000 1,452,750
Worldcom, Inc. (a) ................................................ 20,000 640,000
-----------
4,768,750
-----------
TOTAL COMMON STOCKS--(Cost $38,787,496) 97.5% 59,452,462
-----------
</TABLE>
<TABLE>
<CAPTION>
Interest Maturity Maturity
Rate Date Amount
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
Repurchase Agreement--(4.8%)
State Street Bank and Trust Company (b) 4.500% 07/01/1997 $2,948,369 2,948,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $2,948,000) 4.8% 2,948,000
-----------
TOTAL INVESTMENTS--(Cost $41,735,496) 102.3% 62,400,462
OTHER ASSETS LESS LIABILITIES-- (2.3)% (1,422,074)
----- -----------
NET ASSETS-- 100.0% $60,978,388
===== ===========
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Note, 5.875%, 04/30/98, with a value of $3,007,225.
See notes to financial statements
21
<PAGE> 23
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE & DEFENSE--(4.0%)
Gulfstream Aerospace Corporation (a) .............................. 2,400 $ 70,800
Litton Industries, Inc. (a) ....................................... 4,000 193,250
Lockheed Martin Corporation ....................................... 1,500 155,344
Raytheon Company .................................................. 4,400 224,400
-----------
643,794
ALUMINUM--(1.9%)
Alumax, Inc. (a) .................................................. 4,100 155,544
Aluminum Company of America ....................................... 1,900 143,212
-----------
298,756
AUTOMOTIVE--(1.6%)
Ford Motor Company ................................................ 7,000 264,250
-----------
BANKS--(0.8%)
Republic New York Corporation ..................................... 1,200 129,000
-----------
BANKS AND SAVINGS & LOANS--(0.6%)
Bank of New York Company, Inc. .................................... 2,100 91,350
-----------
BUILDING MATERIALS & CONSTRUCTION--(1.4%)
USG Corporation (a) ............................................... 6,300 229,950
-----------
BUSINESS SERVICES--(2.4%)
Automatic Data Processing, Inc. ................................... 4,000 188,000
Block (H & R), Inc. ............................................... 1,900 61,275
Deluxe Corporation ................................................ 2,000 68,250
Reynolds & Reynolds Company ....................................... 4,000 63,000
-----------
380,525
CHEMICALS--(0.7%)
Ferro Corporation ................................................. 3,100 114,894
-----------
CHEMICALS & PLASTICS--(0.9%)
Union Carbide Corporation ......................................... 3,000 141,188
-----------
COMPUTERS--(0.4%)
Tandy Corporation ................................................. 1,100 61,600
-----------
COMPUTERS & BUSINESS EQUIPMENT--(5.4%)
Hewlett Packard Co. ............................................... 4,200 235,200
International Business Machines Corporation ....................... 4,000 360,750
Pitney Bowes, Inc. ................................................ 3,900 271,050
-----------
867,000
COMPUTER RELATED--(3.0%)
Quantum Corporation (a) ........................................... 4,700 95,469
Seagate Technology, Inc. .......................................... 5,800 204,087
Sun Microsystems, Inc. (a) ........................................ 4,900 182,372
-----------
481,928
</TABLE>
See notes to financial statements.
22
<PAGE> 24
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
CONSTRUCTION MATERIALS--(0.7%)
Harsco Corporation ................................................ 2,900 $ 117,450
-----------
CONSUMER DURABLES--(3.7%)
Chrysler Corporation .............................................. 13,900 456,094
Cummins Engine, Inc. .............................................. 2,000 141,125
-----------
597,219
DRUGS--(1.8%)
Bristol Myers Squibb Company ...................................... 2,200 178,200
Schering Plough Corporation ....................................... 2,400 114,900
-----------
293,100
DRUGS & HEALTH CARE--(3.3%)
Baxter International, Inc. ........................................ 3,300 172,425
Columbia / HCA Healthcare Corporation ............................. 4,000 157,250
McKesson Corporation .............................................. 500 38,750
Tenet Healthcare Corporation (a) .................................. 2,700 79,819
United Healthcare Corporation ..................................... 1,700 88,400
-----------
536,644
ELECTRIC UTILITIES--(1.7%)
American Electric Power, Inc. ..................................... 2,400 100,800
DPL, Inc. ......................................................... 1,100 27,088
DQE, Inc. ......................................................... 1,000 28,250
Entergy Corporation ............................................... 2,800 76,650
Illinova Corporation .............................................. 2,000 44,000
-----------
276,788
FINANCIAL SERVICES--(5.1%)
American Express Company .......................................... 2,700 201,150
Citicorp .......................................................... 1,800 217,012
Federal Home Loan Mortgage Corporation ............................ 3,100 106,563
Federal National Mortgage Association ............................. 4,000 174,500
Household International Inc. ...................................... 1,000 117,437
-----------
816,662
FOOD & BEVERAGES--(3.5%)
PepsiCo, Inc. ..................................................... 4,600 172,787
Ralston Purina Company ............................................ 800 65,750
Sara Lee Corporation .............................................. 3,600 149,850
Unilever N.V ...................................................... 800 174,400
-----------
562,787
HEALTH CARE--(1.5%)
Foundation Health Systems, Inc. (a) ............................... 4,120 124,888
Wellpoint Health Networks, Inc. (a) ............................... 2,400 110,100
-----------
234,988
</TABLE>
See notes to financial statements.
23
<PAGE> 25
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
HOUSEHOLD APPLIANCES & HOME FURNISHINGS--(1.0%)
Maytag Corporation ................................................ 4,435 $ 115,864
Newell Company .................................................... 1,100 43,588
-----------
159,452
INDUSTRIAL MACHINERY--(0.7%)
Ingersoll Rand Ltd. ............................................... 1,800 111,150
-----------
INSURANCE--(3.2%)
Berkley (W.R.) Corporation ........................................ 1,900 111,862
Equitable of Iowa Companies ....................................... 1,200 67,200
General Reinsurance Corporation ................................... 600 109,200
MBIA, Inc. ........................................................ 1,500 169,219
Terra Nova (Bermuda) Holdings, Ltd. ............................... 3,000 63,000
-----------
520,481
INVESTMENT COMPANIES--(1.0%)
Lehman Brothers Holdings, Inc. .................................... 4,100 166,050
-----------
LIQUOR--(1.6%)
Anheuser Busch Cos., Inc. ......................................... 6,200 260,013
-----------
MANUFACTURING--(1.3%)
Eaton Corporation ................................................. 1,300 113,506
Olin Corporation .................................................. 2,400 93,750
-----------
207,256
OIL & GAS--(3.7%)
Exxon Corporation ................................................. 5,800 356,700
Royal Dutch Petroleum Company ..................................... 1,200 65,250
Transocean Offshore, Inc. ......................................... 2,400 174,300
-----------
596,250
OIL SERVICES--(2.1%)
Dresser Industries, Inc. .......................................... 2,000 74,500
Parker & Parsley Petroleum Company ................................ 2,500 88,437
Western Atlas, Inc. (a) ........................................... 2,400 175,800
-----------
338,737
PETROLEUM SERVICES--(1.8%)
Noble Drilling Corporation (a) .................................... 7,700 173,731
Reading & Bates Corporation (a) ................................... 4,500 120,375
-----------
294,106
PHOTOGRAPHY--(0.9%)
Polaroid Corporation .............................................. 2,700 149,850
-----------
POLLUTION CONTROL--(0.7%)
Browning Ferris Industries, Inc. .................................. 1,800 59,850
Waste Management Inc. ............................................. 1,800 57,825
-----------
117,675
</TABLE>
See notes to financial statements.
24
<PAGE> 26
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
Restaurants--(0.3%)
Lone Star Steakhouse & Saloon ..................................... 2,000 $ 52,000
-----------
RETAIL TRADE--(6.7%)
Carson Pirie Scott & Company Illinois (a) ......................... 2,700 85,725
Federated Department Stores, Inc. (a) ............................. 3,700 128,575
May Department Stores Company ..................................... 2,100 99,225
Neiman Marcus Group, Inc. (a) ..................................... 3,100 81,375
Payless Shoesource, Inc. (a) ...................................... 2,800 153,125
Rite Aid Corporation .............................................. 2,600 129,675
Sothebys Holdings, Inc. ........................................... 5,000 84,375
Wal Mart Stores, Inc. ............................................. 9,300 314,456
-----------
1,076,531
STEEL--(0.4%)
LTV Corporation ................................................... 4,100 58,425
-----------
Telecommunications--(4.6%)
Allied Signal, Inc. ............................................... 1,200 100,800
Ameritech Corporation ............................................. 2,400 163,050
NYNEX Corporation ................................................. 4,300 247,787
SBC Communications, Inc. .......................................... 3,700 228,938
-----------
740,575
TELEPHONE--(1.0%)
Alltel Corporation ................................................ 2,000 66,875
MCI Communications Corporation .................................... 2,300 88,047
-----------
154,922
TOBACCO--(4.8%)
Philip Morris Companies, Inc. ..................................... 8,100 359,437
RJR Nabisco Holdings Corporation .................................. 9,500 313,500
Swedish Match AB .................................................. 2,900 98,600
771,537
Transportation--(1.6%)
Burlington Northern Santa Fe ...................................... 1,200 107,850
CSX Corporation ................................................... 2,800 155,400
-----------
263,250
TOTAL COMMON STOCKS--(Cost $12,035,842) ................... 81.7% 13,178,133
-----------
DEPOSITARY RECEIPTS
AUTOMOBILES--(1.2%)
Volvo Aktiebolaget ADR ............................................ 7,200 192,600
CHEMICALS--(1.2%)
Imperial Chemical Industries, Plc, ADR ............................ 3,500 199,063
</TABLE>
See notes to financial statements.
25
<PAGE> 27
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
------------------ ------ -----
<S> <C> <C>
DEPOSITARY RECEIPTS
OIL--(4.0%)
British Petroleum, Plc, ADR ....................................... 5,900 $ 441,762
Total S.A., ADR ................................................... 4,000 202,500
-----------
644,262
TOTAL DEPOSITARY RECEIPTS--(Cost $923,251) 6.4% 1,035,925
-----------
PREFERRED STOCKS
FINANCIAL SERVICES--(0.6%)
Aetna, Inc. ....................................................... 1,000 93,750
-----------
INSURANCE--(1.8%)
Allstate Corporation .............................................. 5,600 291,200
-----------
INVESTMENT COMPANIES--(0.5%)
Merrill Lynch & Company, Inc. ..................................... 2,400 90,000
-----------
TELEPHONE--(0.4%)
Airtouch Communications, Inc. ...................................... 2,100 59,850
TOTAL PREFERRED STOCKS--(Cost $504,331) 3.3% 534,800
-----------
</TABLE>
<TABLE>
<CAPTION>
Interest Maturity Principal
Rate Date Amount
---- ---- ------
<S> <C> <C> <C> <C> <C>
CORPORATE BOND
INSURANCE--(0.5%)
USF & G Corporation ................... 0.000% 03/03/2009 $100,000 73,000
-----------
TOTAL CORPORATE BOND--(Cost $68,004) 0.5% 73,000
-----------
</TABLE>
See notes to financial statements.
26
<PAGE> 28
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Interest Maturity Principal
Rate Date Amount
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(7.6%)
State Street Bank and Trust Company (b)... 5.800% 07/01/1997 $1,222,197 $1,222,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $1,222,000) 7.6% 1,222,000
-----------
TOTAL INVESTMENTS--(Cost $14,753,428) 99.5% 16,043,858
OTHER ASSETS LESS LIABILITIES-- 0.5% 86,880
----- -----------
NET ASSETS-- 100.0% $16,130,738
===== ===========
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Note, 6.00%, 05/31/98, with a value of $1,248,617.
See notes to financial statements.
27
<PAGE> 29
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
Advertising--(0.5%)
Outdoor Systems, Inc. (a) .............................. 8.875% 06/15/2007 $ 75,000 $ 73,500
--------
AEROSPACE & DEFENSE--(0.7%)
Tracor, Inc. ........................................... 8.500% 03/01/2007 100,000 101,750
--------
AUTOMOTIVE--(2.4%)
Aftermarket Technology Company ......................... 12.000% 08/01/2004 56,000 62,720
Collins & Aikman Products Company ...................... 11.500% 04/15/2006 150,000 170,625
Lear Corporation ....................................... 9.500% 07/15/2006 100,000 106,750
--------
340,095
BANKING--(1.4%)
First Nationwide Escrow Corporation, Inc. .............. 10.625% 10/01/2003 175,000 192,938
--------
BEVERAGE & TOBACCO--(0.7%)
Dimon, Inc. ............................................ 8.875% 06/01/2006 100,000 104,375
--------
BROADCAST RADIO & TELEVISION--(3.8%)
Capstar Radio Broadcasting
Partners, Inc. (a) ............................. 9.250% 07/01/2007 50,000 48,750
Chancellor Broadcasting Company (a) .................... 8.750% 06/15/2007 50,000 50,000
SCI Television, Inc. ................................... 11.000% 06/30/2005 50,000 53,010
Sinclair Broadcast Group, Inc. 10.000% 12/15/2003 175,000 181,125
Sullivan Broadcasting Holdings, Inc. 10.250% 12/15/2005 100,000 102,500
Young Broadcasting, Inc. ............................... 9.000% 01/15/2006 50,000 49,375
10.125% 02/15/2005 50,000 52,250
--------
537,010
BUILDING MATERIALS--(0.7%)
American Builders & Contractors
Supply Company (a) ............................. 10.625% 05/15/2007 50,000 51,750
Building Materials Corporation of
America ........................................ 8.625% 12/15/2006 50,000 51,000
--------
102,750
Business Equipment & Services--(1.6%)
Electronic Retailing Systems
International, Inc. (a) (b) .................... 13.753% 02/01/2004 50,000 34,750
Knoll, Inc. 10.875% 3/15/2006 49,000 54,451
Outsourcing Solutions, Inc. ............................ 11.000% 11/01/2006 50,000 54,750
United Stationers Supply Company ....................... 12.750% 05/01/2005 75,000 85,594
--------
229,545
CABLE TELEVISION--(11.6%)
Australis Holdings Pty. Ltd. (b) ....................... 11.289% 11/01/2002 75,000 55,500
Bell Cablemedia Plc (b) ................................ 9.466% 07/15/2004 50,000 45,250
Cablevision Systems Corporation ........................ 9.250% 11/01/2005 25,000 26,000
9.875% 02/15/2013 150,000 157,500
</TABLE>
See notes to financial statements.
28
<PAGE> 30
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
CORPORATE BONDS
CABLE TELEVISION--(CONTINUED)
Charter Communications Southeast, LP (b) ........... 11.250% 03/15/2006 $ 50,000 $ 53,750
........... 12.388% 03/15/2007 50,000 34,250
Comcast Corporation ................................ 9.375% 05/15/2005 150,000 158,250
........... 10.625% 07/15/2012 50,000 59,250
Diamond Cable Communications (a) (b) ............... 11.736% 02/15/2007 250,000 145,000
Echostar Satellite Broadcasting
Corporation ................................ 13.011% 03/15/2004 175,000 125,125
International CableTel, Inc. (b) ................... 10.914% 10/15/2003 125,000 109,375
(b) ............................... 11.352% 04/15/2005 125,000 96,875
Pegasus Media & Communications, Inc. ............... 12.500% 07/01/2005 50,000 54,250
Rogers Cablesystems Ltd. ........................... 10.000% 12/01/2007 150,000 162,000
TCI Satellite Entertainment, Inc. (a) .............. 10.875% 02/15/2007 50,000 50,125
TeleWest Plc (b) ................................... 10.603% 10/01/2007 275,000 200,750
UIH Australia / Pacific, Inc. (b) .................. 13.615% 05/15/2006 125,000 76,250
Wireless One, Inc. ................................. 13.000% 10/15/2003 50,000 32,000
--------
1,641,500
CHEMICALS & PLASTICS--(3.6%)
Harris Chemical North America, Inc. ................ 10.250% 07/15/2001 100,000 103,000
ISP Holdings, Inc. ................................. 9.750% 02/15/2002 100,000 106,500
Polymer Group, Inc. ................................ 12.250% 07/15/2002 83,000 92,796
RBX Corporation .................................... 11.250% 10/15/2005 50,000 44,500
Sterling Chemicals, Inc. (b) ....................... 11.923% 08/15/2008 125,000 83,438
Uniroyal Technology Corporation .................... 11.750% 06/01/2003 75,000 75,000
--------
505,234
CLOTHING & TEXTILES--(2.6%)
Glenoit Corporation (a) ............................ 11.000% 04/15/2007 50,000 52,625
Pillowtex Corporation .............................. 10.000% 11/15/2006 50,000 52,500
WestPoint Stevens, Inc. ............................ 9.375% 12/15/2005 250,000 261,250
--------
366,375
CONSUMER PRODUCTS--(3.0%)
American Safety Razor Company ...................... 9.875% 08/01/2005 50,000 52,500
Hosiery Corporation of America, Inc. ............... 13.750% 08/01/2002 50,000 54,750
ICON Fitness Corporation (b) ....................... 14.117% 11/15/2006 100,000 55,000
Playtex Family Products Corporation ................ 9.000% 12/15/2003 100,000 101,750
Renaissance Cosmetics .............................. 11.750% 02/15/2004 75,000 78,000
Simmons Company .................................... 10.750% 04/15/2006 75,000 79,500
--------
421,500
CONTAINER & GLASS PRODUCTS--(0.9%)
Owens Illinois, Inc. ............................... 9.750% 08/15/2004 50,000 52,687
........... 9.950% 10/15/2004 25,000 26,563
Packaging Resources, Inc. .......................... 11.625% 05/01/2003 50,000 52,250
--------
131,500
</TABLE>
See notes to financial statements.
29
<PAGE> 31
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (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
ECOLOGICAL SERVICES & EQUIPMENT--(2.1%)
Allied Waste Industries, Inc. (a) (b)................ 10.392% 06/01/2007 $125,000 $ 79,063
Allied Waste Industries, Inc.
North America (a) ........................... 10.250% 12/01/2006 150,000 161,062
Mid-American Waste Systems,
Inc. (c) (d) ............................... 12.250% 02/15/2003 125,000 64,375
--------
304,500
ELECTRONICS--(1.7%)
Advanced Micro Devices, Inc. ........................ 11.000% 08/01/2003 100,000 111,750
Fairchild Semiconductor Corporation (a) ............. 10.125% 03/15/2007 75,000 79,500
Viasystems, Inc. (a) ................................ 9.750% 06/01/2007 50,000 51,000
--------
242,250
FINANCIAL SERVICES--(0.9%)
Contifinancial Corporation .......................... 8.375% 08/15/2003 75,000 76,958
Olympic Financial Ltd. .............................. 11.500% 03/15/2007 50,000 51,000
--------
127,958
FOOD & DRUG RETAILERS--(2.1%)
Carr Gottstein Foods Company ........................ 12.000% 11/15/2005 50,000 55,625
Di Giorgio Corporation (a) .......................... 10.000% 06/15/2007 50,000 49,750
Ralph's Grocery Company ............................. 10.450% 06/15/2004 175,000 188,563
--------
293,938
FOOD PRODUCTS--(2.6%)
Curtice-Burns Foods, Inc. ........................... 12.250% 02/01/2005 50,000 55,125
International Home Foods, Inc. ...................... 10.375% 11/01/2006 100,000 103,250
MBW Foods, Inc. (a) ................................ 9.875% 02/15/2007 50,000 50,875
Specialty Foods Corporation ......................... 11.250% 08/15/2003 125,000 108,750
Van De Kamp's, Inc. ................................. 12.000% 09/15/2005 50,000 56,000
--------
374,000
FOREST PRODUCTS--(2.3%)
Four M Corporation .................................. 12.000% 06/01/2006 75,000 77,625
S.D. Warren Company ................................. 12.000% 12/15/2004 75,000 84,375
Stone Container Corporation ......................... 11.500% 10/01/2004 75,000 78,375
12.580% 08/01/2016 75,000 79,500
--------
319,875
HEALTH CARE--(3.4%)
Dade International, Inc. ............................ 11.125% 05/01/2006 100,000 112,000
Genesis Health Ventures, Inc. ....................... 9.250% 10/01/2006 50,000 51,000
Tenet Healthcare Corporation ........................ 8.000% 01/15/2005 50,000 50,500
8.625% 01/15/2007 100,000 102,000
10.125% 03/01/2005 150,000 165,000
--------
480,500
HOTELS, MOTELS, INNS & CASINOS--(0.4%)
Courtyard by Marriott II LP ......................... 10.750% 02/01/2008 50,000 54,125
--------
</TABLE>
See notes to financial statements.
30
<PAGE> 32
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (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
INDUSTRIAL PRODUCTS & EQUIPMENT--(4.5%)
Amphenol Corporation .................................. 9.875% 05/15/2007 $ 50,000 $ 51,875
Cabot Safety Acquisition Corporation .................. 12.500% 07/15/2005 100,000 110,500
Continental Global Group, Inc. (a) .................... 11.000% 04/01/2007 50,000 52,625
Euramax International Plc ............................. 11.250% 10/01/2006 75,000 81,000
Hawk Corporation ...................................... 10.250% 12/01/2003 50,000 51,625
International Knife & Saw, Inc. ....................... 11.375% 11/15/2006 50,000 53,875
Mettler Toledo, Inc. .................................. 9.750% 10/01/2006 125,000 133,125
Neenah Corporation (a) ................................ 11.125% 05/01/2007 50,000 53,250
Unifrax Investment Corporation ........................ 10.500% 11/01/2003 50,000 52,250
-----------
640,125
LEISURE & ENTERTAINMENT--(5.5%)
AMF Group, Inc. (b) ................................... 10.764% 03/15/2006 200,000 143,000
Cobblestone Golf Group, Inc. .......................... 11.500% 06/01/2003 75,000 79,125
Premier Parks, Inc. ................................... 12.000% 08/15/2003 50,000 55,625
Six Flags Theme Parks, Inc. (b) ....................... 9.730% 06/15/2005 175,000 180,250
Viacom, Inc. .......................................... 8.000% 07/07/2006 325,000 317,687
-----------
775,687
MACHINERY & EQUIPMENT--(2.2%)
Alvey Systems, Inc. ................................... 11.375% 01/31/2003 75,000 77,625
Clark Material Handling Corporation ................... 10.750% 11/15/2006 75,000 78,938
Primeco, Inc. ......................................... 12.750% 03/01/2005 67,000 79,730
Tokheim Corporation ................................... 11.500% 08/01/2006 75,000 82,875
-----------
319,168
METALS & MINING--(0.5%)
Royal Oaks Mines, Inc. ................................ 11.000% 08/15/2006 75,000 72,750
-----------
OIL & GAS--(5.9%)
Abraxas Petroleum Corporation ......................... 11.500% 11/01/2004 125,000 136,562
DI Industries, Inc. ................................... 8.875% 07/01/2007 50,000 49,500
Falcon Drilling Company, Inc. ......................... 12.500% 03/15/2005 100,000 111,500
Forcenergy Gas Exploration, Inc. ...................... 8.500% 02/15/2007 50,000 49,000
...................... 9.500% 11/01/2006 150,000 155,625
Pride Petroleum Services, Inc. ........................ 9.375% 05/01/2007 150,000 155,625
United Meridian Corporation ........................... 10.375% 10/15/2005 75,000 81,563
United Refining Company (a) ........................... 10.750% 06/15/2007 50,000 49,625
XCL Ltd. (a) .......................................... 13.500% 05/01/2004 50,000 51,250
-----------
840,250
PRINTING & PUBLISHING--(2.9%)
Affiliated Newspaper Investments, Inc. (b). ........... 10.807% 07/01/2006 250,000 226,875
Hollinger International Publishing, Inc. .............. 9.250% 03/15/2007 75,000 77,250
Petersen Publishing Company, L.L.C. ................... 11.125% 11/15/2006 100,000 112,000
-----------
416,125
</TABLE>
See notes to financial statements.
31
<PAGE> 33
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (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
REAL ESTATE--(0.8%)
Trizec Finance Ltd. ................................... 10.875% 10/15/2005 $100,000 $ 113,000
-----------
RETAILERS--(0.9%)
Brylane Capital Corporation ........................... 10.000% 09/01/2003 75,000 80,625
Leslie's Poolmart, Inc. (a) ........................... 10.375% 07/15/2004 50,000 51,500
-----------
132,125
SERVICES--(1.5%)
Coinmach Corporation .................................. 11.750% 11/15/2005 50,000 55,375
Intertek Finance Plc .................................. 10.250% 11/01/2006 100,000 104,750
Kindercare Learning Center, Inc. ...................... 9.500% 02/15/2009 50,000 48,375
-----------
208,500
STEEL--(2.6%)
Acme Metals, Inc. (b) ................................. 10.947% 08/01/2004 50,000 55,750
Bayou Steel Corporation ............................... 10.250% 03/01/2001 50,000 50,750
EnviroSource, Inc. .................................... 9.750% 06/15/2003 50,000 49,125
GS Technologies Operating Company, Inc. ............... 12.000% 09/01/2004 150,000 162,000
Republic Engineered Steels, Inc. ...................... 9.875% 12/15/2001 50,000 46,687
-----------
364,312
SURFACE TRANSPORTATION--(3.5%)
Chemical Leaman Corporation (a) ....................... 10.375% 06/15/2005 50,000 51,125
Gearbulk Holdings Ltd. ................................ 11.250% 12/01/2004 100,000 111,000
Statia Terminals International N.V. ................... 11.750% 11/15/2003 100,000 106,000
Stena AB .............................................. 10.500% 12/15/2005 100,000 109,750
Trism, Inc. ........................................... 10.750% 12/15/2000 125,000 120,625
-----------
498,500
TELECOMMUNICATIONS & CELLULAR--(9.5%)
Brooks Fiber Properties, Inc. (b) ..................... 10.762% 03/01/2006 250,000 171,250
Cellular Communications International,
Inc. (b) ...................................... 8.603% 08/15/2000 100,000 77,000
Dial Call Communications, Inc. (b) .................... 11.884% 04/15/2004 100,000 82,625
Intermedia Communications of Florida,
Inc. (b) ...................................... 11.135% 05/15/2006 200,000 138,500
McLeod, Inc. (a) (b) .................................. 10.097% 03/01/2007 150,000 96,000
Millicom International Cellular S.A. (b) .............. 10.922% 06/01/2006 150,000 108,563
Paging Network, Inc. .................................. 10.000% 10/15/2008 125,000 120,625
PhoneTel Technologies, Inc. ........................... 12.000% 12/15/2006 50,000 50,875
Sygnet Wireless, Inc. ................................. 11.500% 10/01/2006 50,000 50,250
Teleport Communications Group, Inc. (b) ............... 9.731% 07/01/2007 225,000 161,437
Telesystem International Wireless,
Inc. (a) (b) .................................. 13.034% 06/30/2007 75,000 40,031
USA Mobile Communications, Inc. ....................... 9.500% 02/01/2004 125,000 117,500
Vanguard Cellular Systems, Inc. ....................... 9.375% 04/15/2006 125,000 126,875
-----------
1,341,53
</TABLE>
See notes to financial statements.
32
<PAGE> 34
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
TELECOMMUNICATIONS--(1.1%)
Cellular Communications of Puerto
Rico Services, Inc. (a) ....................... 10.000% 02/01/2007 $ 50,000 $ 49,500
Qwest Communications International,
Inc. (a) ...................................... 10.875% 04/01/2007 100,000 109,000
-----------
158,500
UTILITIES--(2.5%)
California Energy Company, Inc. ....................... 10.250% 01/15/2004 275,000 297,687
El Paso Electric Company .............................. 9.400% 05/01/2011 50,000 55,350
-----------
353,037
TOTAL CORPORATE BONDS--(Cost $12,424,459) 92.9% 13,178,828
-----------
GOVERNMENT AND AGENCY SECURITY
U.S. GOVERNMENT SECURITY--(5.1%)
United States Treasury Note ........................... 5.750% 08/15/2003 750,000 724,335
-----------
TOTAL GOVERNMENT AND AGENCY SECURITY--(Cost $708,190) 5.1% 724,335
-----------
<CAPTION>
SHARES
------
<S> <C> <C>
PREFERRED STOCKS
BANKING--(0.2%)
California Federal Preferred
Capital Corporation, Pfd., 9.125% ................................................ 1,000 25,813
-----------
BROADCAST RADIO & TELEVISION--(3.6%)
American Radio Systems
Corporation, Pfd., 11.375% (a) ................................................... 915 97,948
Capstar Broadcasting Partners, Inc.,
Pfd., 12.00% (a) (d) ............................................................. 500 50,500
Chancellor Broadcasting Company,
Pfd., 12.00% (a) (d) ............................................................. 1,000 115,000
PIK Pfd., 12.25% ................................................................. 500 65,250
Pegasus Media & Communications
Corporation, Pfd., Series A, 12.75% (d) .......................................... 75 73,875
SFX Broadcasting, Inc., Pfd.,
Series E, 12.625% ................................................................ 500 54,250
Sinclair Capital, Pfd., 11.625% (a) ...................................................... 500 53,000
-----------
509,823
METALS & MINING--(0.5%)
Fairfield Manufacturing Company, Inc.,
Pfd., 11.25% (a) (d) ............................................................. 75 75,750
-----------
</TABLE>
See notes to financial statements.
33
<PAGE> 35
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
PREFERRED STOCKS
PRINTING & PUBLISHING--(1.0%)
K III Communications Corporation,
Pfd., Series D, 10.00% ........................................................... 750 $ 76,312
PIK Pfd., Series B, 11.625% ...................................................... 545 59,678
-----------
135,990
TELECOMMUNICATIONS & CELLULAR--(0.6%)
PanAmSat Corporation, PIK Pfd., 12.75% ................................................... 67 83,836
-----------
UTILITIES--(0.4%)
El Paso Electric Company, PIK Pfd., Series A, 11.40% ..................................... 573 64,736
-----------
TOTAL PREFERRED STOCKS--(Cost $790,910) 6.3% 895,948
-----------
COMMON STOCKS
BROADCAST RADIO & TELEVISION--(0.0%)
CS Wireless Systems, Inc. (a) (d) ........................................................ 13 0
Pegasus Media & Communications Corporation (d) ........................................... 112 1,246
-----------
1,246
CONSUMER PRODUCTS--(0.0%)
Hosiery Corporation of America, Inc. (d) ................................................. 50 375
-----------
PRINTING & PUBLISHING--(0.2%)
Affiliated Newspaper Investments, Inc. (d) ............................................... 250 25,125
-----------
TOTAL COMMON STOCKS--(Cost $349) 0.2% 26,746
-----------
WARRANTS
BUSINESS EQUIPMENT & SERVICES--(0.0%)
Electronic Retailing Systems International, Inc. (a) ..................................... 50 294
-----------
CABLE TELEVISION--(0.0%)
Australis Holdings Pty. Ltd. ............................................................. 75 0
Wireless One, Inc. ....................................................................... 150 0
-----------
0
CONSUMER PRODUCTS--(0.1%)
IHF Capital, Inc. (a) .................................................................... 100 5,050
-----------
ECOLOGICAL SERVICES & EQUIPMENT--(0.0%)
ICF Kaiser International, Inc. ........................................................... 240 60
-----------
STEEL--(0.0%)
Bar Technologies, Inc. (a) ............................................................... 25 1,125
-----------
</TABLE>
See notes to financial statements.
34
<PAGE> 36
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
WARRANTS
TELECOMMUNICATIONS & CELLULAR--(0.0%)
Cellular Communications International, Inc. .............................................. 100 $ 1,000
NEXTEL Communications, Inc. .............................................................. 100 1
-----------
1,001
-----------
TOTAL WARRANTS--(Cost $1,558) 0.1% 7,530
-----------
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(1.4%)
State Street Bank and Trust Company (e) 4.500% 07/01/1997 $198,025 198,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $198,000) 1.4% 198,000
-----------
TOTAL INVESTMENTS--(Cost $14,123,466) 106.0% 15,031,387
OTHER ASSETS LESS LIABILITIES-- (6.0)% (845,104)
---- -----------
NET ASSETS-- 100.0% $14,186,283
===== ===========
</TABLE>
(a) Pursuant to Rule 144A under the Securities Act of 1933, these securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At June 30, 1997, these securities
aggregated $1,980,323 or 13.96% of the net assets of the Portfolio.
(b) Step bond. Interest rate shown represents yield to maturity.
(c) On 01/22/97 Mid-American filed for protection under Chapter 11 of the
bankruptcy code. The Company has agreed to be acquired by USA Waste
Services, Inc. The timing and outcome of this transaction is uncertain.
Mid-American has been deemed illiquid as a result of contractual agreements
relating to litigation.
(d) Non-income producing security.
(e) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Note, 5.25%, 01/31/01, with a value of $202,989.
See notes to financial statements.
35
<PAGE> 37
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE & DEFENSE--(3.1%)
Aeroquip Vickers, Inc. ................................................... 3,200 $ 151,200
Newport News Shipbuilding, Inc. .......................................... 9,000 174,937
Parker Hannifin Corporation .............................................. 1,800 109,238
435,375
-----------
AUTOMOTIVE--(1.2%)
Ford Motor Company ....................................................... 4,500 169,875
-----------
BANKS--(5.4%)
AmSouth Bancorporation ................................................... 3,700 139,906
BankAmerica Corporation .................................................. 3,600 232,425
Pacific Century Financial Corporation .................................... 3,000 138,750
Republic New York Corporation ............................................ 1,500 161,250
UnionBanCal Corporation .................................................. 1,200 86,250
-----------
758,581
BUILDING MATERIALS & CONSTRUCTION--(3.1%)
Johns Manville Corporation ............................................... 2,000 23,625
Lowes Companies, Inc. .................................................... 3,700 137,362
USG Corporation (a) ...................................................... 3,800 138,700
Vulcan Materials Company ................................................. 1,700 133,450
-----------
433,137
BUSINESS SERVICES--(1.4%)
Accustaff, Inc. (a) ...................................................... 1,800 42,638
Comdisco, Inc. ........................................................... 5,750 149,500
-----------
192,138
CHEMICALS & PLASTICS--(3.3%)
Dow Chemical Company ..................................................... 2,000 174,250
Lyondell Petrochemical Company ........................................... 6,500 141,781
Union Carbide Corporation ................................................ 3,100 145,894
-----------
461,925
COMPUTERS--(2.5%)
Compaq Computer Corporation (a) .......................................... 2,300 228,275
Gateway 2000, Inc. (a) ................................................... 2,900 94,069
Tandy Corporation ........................................................ 600 33,600
-----------
355,944
COMPUTER RELATED--(5.2%)
Intel Corporation ........................................................ 2,200 311,987
Komag, Inc. (a) .......................................................... 3,700 60,587
Quantum Corporation (a) .................................................. 6,800 138,125
Read Rite Corporation (a) ................................................ 300 6,263
Sun Microsystems, Inc. (a) ............................................... 2,500 93,047
Western Digital Corporation (a) .......................................... 3,600 113,850
-----------
723,859
</TABLE>
See notes to financial statements.
36
<PAGE> 38
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
COMPUTER SOFTWARE--(1.3%)
Computer Associates International, Inc. .................................. 3,200 $ 178,200
-----------
DIVERSIFIED--(2.3%)
General Electric Company ................................................. 5,000 326,875
-----------
DRUGS--(5.4%)
Amgen, Inc. .............................................................. 2,800 162,750
Bristol Myers Squibb Company ............................................. 4,100 332,100
Merck & Company, Inc. .................................................... 1,000 103,500
Schering Plough Corporation .............................................. 3,200 153,200
-----------
751,550
ELECTRONICS--(3.6%)
Motorola, Inc. ........................................................... 3,500 266,000
National Semiconductor Corporation ....................................... 5,100 156,187
UCAR International, Inc. (a) ............................................. 1,900 86,925
-----------
509,112
EXPLORATION & PRODUCTION--(0.3%)
Chesapeake Energy Corporation ............................................ 3,900 38,269
-----------
FINANCIAL SERVICES--(2.4%)
ContiFinancial Corporation (a) ........................................... 4,500 164,250
Money Store, Inc. ........................................................ 5,800 166,388
-----------
330,638
FOOD & BEVERAGES--(6.0%)
Coca-Cola Company ........................................................ 3,300 222,750
Fleming Companies, Inc. .................................................. 8,400 151,200
Interstate Bakeries Corporation .......................................... 2,400 142,350
Quaker Oats Company ...................................................... 3,600 161,550
Richfood Holdings, Inc. .................................................. 6,400 166,400
-----------
844,250
HEALTH CARE--(6.8%)
Allegiance Corporation ................................................... 5,100 138,975
American Home Products Corporation ....................................... 3,200 244,800
Bergen Brunswig Corporation .............................................. 4,625 128,922
Quorum Health Group, Inc. (a) ............................................ 4,300 153,725
Tambrands, Inc. .......................................................... 2,800 139,650
Wellpoint Health Networks, Inc. (a) ...................................... 3,100 142,212
-----------
948,284
</TABLE>
See notes to financial statements.
37
<PAGE> 39
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
INSURANCE--(5.4%)
American General Corporation ............................................. 3,500 $ 167,125
CIGNA Corporation ........................................................ 1,000 177,500
Everest Reinsurance Holdings Inc. ........................................ 4,400 174,350
Lincoln National Corporation ............................................. 1,300 83,687
Torchmark Corporation .................................................... 2,100 149,625
-----------
752,287
LEISURE & ENTERTAINMENT--(2.5%)
King World Productions, Inc. ............................................. 2,500 87,500
MGM Grand, Inc. (a) ...................................................... 3,600 133,200
The Walt Disney Company .................................................. 1,600 128,400
-----------
349,100
MACHINERY & EQUIPMENT--(3.1%)
AGCO Corporation ......................................................... 2,000 71,875
Caterpillar, Inc. ........................................................ 1,900 204,013
Cooper Industries, Inc. .................................................. 3,100 154,225
-----------
430,113
MEDICAL SUPPLIES & SERVICES--(2.2%)
Lincare Holdings, Inc. (a) ............................................... 3,300 141,900
Shared Medical System Corporation ........................................ 3,100 167,400
-----------
309,300
OFFICE SUPPLIES--(1.0%)
American Business Products, Inc. ......................................... 6,100 138,775
-----------
OIL & GAS--(6.5%)
Amerada Hess Corporation ................................................. 1,600 88,900
Apache Corporation ....................................................... 2,100 68,250
Burlington Resources, Inc. ............................................... 1,800 79,425
Enron Oil & Gas Company .................................................. 3,400 61,625
Exxon Corporation ........................................................ 4,100 252,150
Mitchell Energy & Development Corporation ................................ 3,400 69,700
Mobil Corporation ........................................................ 1,000 69,875
Murphy Oil Corporation ................................................... 1,600 78,000
NGC Corporation .......................................................... 2,200 33,962
Pennzoil Company ......................................................... 1,400 107,450
-----------
909,337
PAPER--(0.6%)
Fort Howard Corporation (a) .............................................. 1,600 81,000
-----------
PETROLEUM SERVICES--(1.9%)
Noble Drilling Corporation (a) ........................................... 3,900 87,994
Rowan Companies, Inc. (a) ................................................ 3,700 104,294
Tidewater, Inc. .......................................................... 1,700 74,800
-----------
267,088
</TABLE>
See notes to financial statements.
38
<PAGE> 40
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
PRINTING & PUBLISHING--(2.1%)
A.H. Belo Corporation ................................................ 3,300 $ 137,363
Washington Post Company .............................................. 400 159,200
-----------
296,563
RETAIL-SPECIALTY--(3.7%)
Costco Companies, Inc. (a) ........................................... 4,900 161,087
Intimate Brands, Inc. ................................................ 6,700 140,700
Kroger Company (a) ................................................... 1,800 52,200
Ross Stores, Inc. .................................................... 4,900 160,169
-----------
514,156
SOFTWARE--(1.4%)
Microsoft Corporation (a) ............................................ 1,500 189,563
-----------
STEEL--(2.1%)
Inland Steel Industries, Inc. ........................................ 4,900 128,012
USX-US Steel Group, Inc. ............................................. 4,700 164,794
-----------
292,806
TECHNOLOGY--(1.1%)
Lucent Technologies, Inc. ............................................ 2,171 156,448
-----------
TELECOMMUNICATIONS--(5.5%)
Ameritech Corporation ................................................ 2,200 149,462
AT&T Corporation ..................................................... 1,400 49,088
Bell Atlantic Corporation ............................................ 1,900 144,162
GTE Corporation ...................................................... 1,500 65,813
NYNEX Corporation .................................................... 2,100 121,012
SBC Communications, Inc. ............................................. 2,000 123,750
U.S. West, Inc. ...................................................... 2,900 109,294
-----------
762,581
TOBACCO--(1.0%)
Philip Morris Companies, Inc. ........................................ 2,100 93,188
RJR Nabisco Holdings Corporation ..................................... 1,400 46,200
-----------
139,388
TRANSPORTATION--(0.8%)
CNF Transportation, Inc. ............................................. 1,500 48,375
CSX Corporation ...................................................... 1,200 66,600
-----------
114,975
UTILITIES--(3.9%)
Columbia Gas Systems, Inc. ........................................... 1,100 71,775
Entergy Corporation .................................................. 3,300 90,337
GPU, Inc. ............................................................ 1,600 57,400
Houston Industries, Inc. ............................................. 3,700 79,319
</TABLE>
See notes to financial statements.
39
<PAGE> 41
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST
AND TITLE OF ISSUE RATE SHARES VALUE
------------------ ---- ------ -----
<S> <C> <C> <C>
COMMON STOCKS
UTILITIES--(CONTINUED)
Montana Power Company ...................................................... 3,000 $ 69,562
Ohio Edison Company ........................................................ 3,600 78,525
Pacific Enterprises ........................................................ 700 23,538
Public Service Enterprise Group ............................................ 3,100 77,500
-----------
547,956
-----------
TOTAL COMMON STOCKS--(Cost $12,507,286) 98.1% 13,709,448
-----------
INTEREST
RATE
----
MUTUAL FUNDS--(0.0%)
Dreyfus Cash Management Plus (b) ................... 5.503% 4,534 4,534
-----------
TOTAL MUTUAL FUNDS--(Cost $4,534) 0.0% 4,534
-----------
TOTAL INVESTMENTS--(Cost $12,511,820) 98.1% 13,713,982
OTHER ASSETS LESS LIABILITIES-- 1.9% 265,767
----- -----------
NET ASSETS-- 100.0% $13,979,749
===== ===========
</TABLE>
(a) Non-income producing security.
(b) Interest rate shown is the 7 day yield as of June 30, 1997.
See notes to financial statements.
40
<PAGE> 42
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE--(3.6%)
McDonnell Douglas Corporation ............................................ 4,800 $ 328,800
Precision Castparts Corporation .......................................... 10,500 626,063
United Technologies Corporation .......................................... 4,000 332,000
-----------
1,286,863
BANKS--(2.9%)
BankAmerica Corporation .................................................. 9,600 619,800
Fifth Third Bancorp ...................................................... 4,960 407,030
-----------
1,026,830
CHEMICALS--(1.4%)
Praxair, Inc. ............................................................ 8,800 492,800
-----------
COMMUNICATION EQUIPMENT--(0.5%)
Andrew Corporation (a) ................................................... 6,300 177,188
-----------
COMPUTER RELATED--(1.3%)
Cisco Systems, Inc. (a) .................................................. 7,000 469,875
-----------
COMPUTER SOFTWARE--(1.4%)
Computer Associates International, Inc. ............................... 9,100 506,756
-----------
COSMETICS & TOILETRIES--(1.5%)
Gillette Company ......................................................... 5,520 523,020
-----------
DRUGS--(5.2%)
Amgen, Inc. .............................................................. 6,600 383,625
Cardinal Health, Inc. .................................................... 7,410 424,222
Eli Lilly & Company ...................................................... 4,000 437,250
Pfizer, Inc. ............................................................. 4,960 592,720
-----------
1,837,817
DRUGS/PHARMACEUTICALS--(0.9%)
Dura Pharmaceuticals, Inc. (a) ........................................... 8,000 319,000
-----------
ELECTRIC UTILITIES--(1.8%)
AES Corporation (a) ...................................................... 8,800 622,600
Duke Energy Corporation .................................................. 1 38
-----------
622,638
ELECTRONICS--(1.9%)
Adaptec, Inc. (a) ........................................................ 8,800 305,800
Dynatech Corporation (a) ................................................. 10,400 371,800
-----------
677,600
ENVIRONMENTAL--(0.3%)
Thermo Electron Corporation .............................................. 3,150 107,100
-----------
</TABLE>
See notes to financial statements.
41
<PAGE> 43
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
FINANCIAL SERVICES--(5.7%)
Finova Group, Inc. ................................................... 3,760 $ 287,640
Green Tree Financial, Inc. ........................................... 7,200 256,500
Money Store, Inc. .................................................... 6,100 174,994
Sunamerica, Inc. ..................................................... 10,200 497,250
Travelers, Inc. ...................................................... 12,720 802,155
-----------
2,018,539
FOOD & BEVERAGES--(2.2%)
Campbell Soup Company ................................................ 10,000 500,000
Coca-Cola Company .................................................... 4,000 270,000
-----------
770,000
HOUSEHOLD PRODUCTS--(1.2%)
Procter & Gamble Company ............................................. 3,000 423,750
-----------
INDUSTRIALS--(1.1%)
duPont (E.I.) deNemours .............................................. 6,000 377,250
-----------
INSURANCE--(8.6%)
Allstate Corporation ................................................. 6,200 452,600
American International Group, Inc. ................................... 3,460 516,837
Conseco, Inc. ........................................................ 19,400 717,800
Frontier Insurance Group, Inc. ....................................... 14,700 951,825
Western National Corporation ......................................... 15,000 402,188
-----------
3,041,250
MACHINERY & EQUIPMENT--(1.0%)
Bombardier, Inc. ..................................................... 15,400 349,050
-----------
MEDICAL SUPPLIES & SERVICES--(1.9%)
Johnson & Johnson .................................................... 7,600 489,250
United States Surgical Corporation ................................... 4,800 178,800
-----------
668,050
METALS--(0.7%)
Wyman-Gordon Company (a) ............................................. 8,500 229,500
-----------
OIL & GAS--(9.3%)
BJ Services Company (a) .............................................. 3,000 160,875
ENSCO International, Inc. (a) ........................................ 4,000 211,000
Helmerich & Payne, Inc. .............................................. 12,000 691,500
Louisiana Land & Exploration Company ................................. 13,200 754,050
Oryx Energy Company (a) .............................................. 12,200 257,725
Transocean Offshore, Inc. ............................................ 9,500 689,937
USX Marathon Group ................................................... 7,000 202,125
Williams Companies, Inc. ............................................. 7,500 328,125
-----------
3,295,337
PACKAGING--(0.9%)
Sealed Air Corporation (a) ........................................... 6,820 323,950
-----------
</TABLE>
See notes to financial statements.
42
<PAGE> 44
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
PETROLEUM SERVICES--(5.9%)
Baker Hughes, Inc. ................................................... 9,800 $ 379,137
Rowan Companies, Inc. (a) ............................................ 20,400 575,025
Smith International, Inc. (a) ........................................ 11,000 668,250
Tidewater, Inc. ...................................................... 10,100 444,400
-----------
2,066,812
PRINTING & PUBLISHING--(1.0%)
Omnicom Group ........................................................ 5,900 363,588
-----------
RETAIL--(0.3%)
ShopKo Stores, Inc. .................................................. 3,500 89,250
-----------
RETAIL-SPECIALTY--(2.4%)
Consolidated Stores Corporation (a) .................................. 14,219 494,102
Costco Companies, Inc. (a) ........................................... 11,093 364,682
-----------
858,784
SOFTWARE--(4.9%)
BMC Software, Inc. ................................................... 18,080 1,001,180
Microsoft Corporation (a) ............................................ 5,680 717,810
-----------
1,718,990
TELECOMMUNICATIONS--(6.9%)
ADC Telecommunications, Inc. (a) ..................................... 10,800 360,450
Allied Signal, Inc. .................................................. 5,000 420,000
Ascend Communications, Inc. (a) ...................................... 11,000 433,125
PairGain Technologies, Inc. (a) ...................................... 14,000 217,000
Tellabs, Inc. (a) .................................................... 13,200 737,550
Worldcom, Inc. (a) ................................................... 8,100 259,200
-----------
2,427,325
-----------
TOTAL COMMON STOCKS--(Cost $19,107,629) 76.7% 27,068,912
-----------
CORPORATE BONDS
INDUSTRIALS--(1.5%)
BP America, Inc. ...................................... 8.500% 04/15/2001 $250,000 264,903
duPont (E.I.) deNemours ............................... 8.650% 12/01/1997 250,000 252,830
-----------
TOTAL CORPORATE BONDS--(Cost $501,789) 1.5% 517,733
-----------
GOVERNMENT AND AGENCY SECURITIES
FEDERAL AGENCY--(1.0%)
Government National Mortgage Association 6.000% 11/15/2008 120,022 116,796
6.500% 10/15/2008 117,080 115,780
7.000% 10/15/2008 116,182 116,980
-----------
349,556
</TABLE>
See notes to financial statements.
43
<PAGE> 45
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (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--(10.1%)
United States Treasury Bond ....................... 7.250% 08/15/2022 $1,000,000 $ 1,043,910
United States Treasury Note ....................... 5.375% 05/31/1998 500,000 498,205
....................... 6.375% 08/15/2002 500,000 499,845
....................... 6.500% 05/31/2001 500,000 502,735
....................... 6.875% 05/15/2006 1,000,000 1,020,780
-----------
3,565,475
-----------
TOTAL GOVERNMENT AND AGENCY SECURITIES--(Cost $3,866,557) 11.1% 3,915,031
-----------
CONVERTIBLE BOND
MEDICAL SUPPLIES & SERVICES--(0.7%)
Alza Corporation .................................. 5.000% 05/01/2006 250,000 251,250
-----------
TOTAL CONVERTIBLE BOND--(Cost $240,622) 0.7% 251,250
-----------
MATURITY
AMOUNT
------
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(10.7%)
State Street Bank and Trust Company (b) 4.500% 07/01/1997 $3,783,473 3,783,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $3,783,000) 10.7% 3,783,000
-----------
TOTAL INVESTMENTS--(Cost $27,499,597) 100.7% 35,535,926
OTHER ASSETS LESS LIABILITIES-- (0.7)% (238,567)
----- -----------
NET ASSETS-- 100.0% $35,297,359
===== ===========
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Note, 5.875%, 04/30/98, with a value of $3,861,378.
See notes to financial statements.
44
<PAGE> 46
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AUTOMATED SOFTWARE QUALITY--(0.8%)
Rational Software Corporation (a) ...................................... 8,300 $ 139,544
-----------
AUTO-RELATED--(1.1%)
Miller Industries, Inc. Tennessee (a) .................................. 12,000 192,000
-----------
BUILDING MATERIAL CHAINS--(0.8%)
Eagle Hardware & Garden, Inc. (a) ...................................... 6,500 148,688
-----------
CABLES/FIBEROPTICS--(0.5%)
Cable Design Technologies Corporation (a) .............................. 2,900 85,369
-----------
CLIENT-SERVER HELP DESK--(3.2%)
Pegasystems, Inc. (a) .................................................. 6,900 216,487
Remedy Corporation (a) ................................................. 5,000 200,000
Scopus Technology (a) .................................................. 6,850 153,269
-----------
569,756
COMMERCIAL SERVICES--(1.1%)
Mastec, Inc., (a) ...................................................... 2,300 108,819
Telephone Save Holdings, Inc. (a) ...................................... 5,900 89,975
-----------
198,794
COMMUNICATION SERVICES--(0.9%)
LCI International, Inc. (a) ............................................ 7,000 153,125
-----------
CONSUMER PRODUCTS-MISCELLANEOUS--(1.9%)
Blyth Industries, Inc. (a) ............................................. 10,050 339,187
-----------
CORRECTIONAL SERVICES--(2.2%)
Corrections Corporation of America (a) ................................. 9,900 393,525
-----------
DATA STORAGE--(1.1%)
Network Appliance, Inc. (a) ............................................ 5,000 190,000
-----------
DIVERSIFIED FINANCIAL--(1.7%)
Amresco, Inc. .......................................................... 14,000 301,000
-----------
DOCUMENT MANAGEMENT--(0.5%)
Inso Corporation (a) ................................................... 4,200 86,363
-----------
DRUGS/PHARMACEUTICALS--(6.4%)
Dura Pharmaceuticals, Inc. (a) ......................................... 8,000 319,000
Jones Medical Industries, Inc. ......................................... 9,200 437,000
Medicis Pharmaceutical Corporation (a) ................................. 7,200 359,100
-----------
1,115,100
</TABLE>
See notes to financial statements.
45
<PAGE> 47
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
EDUCATIONAL SERVICES--(2.3%)
ITT Educational Services, Inc. (a) ....................................... 6,350 $ 157,559
Learning Tree International, Inc. (a) .................................... 5,600 248,500
-----------
406,059
ELECTRONIC COMMERCE--(1.3%)
Transaction Systems Architects, Inc. (a) ................................. 6,800 234,600
-----------
EMBEDDED SOFTWARE--(1.2%)
Wind River Systems, Inc. (a) ............................................. 5,650 216,113
-----------
EMPLOYMENT SERVICE--(1.3%)
Corestaff, Inc. (a) ...................................................... 8,250 222,750
-----------
ENTERTAINMENT/MOVIES--(2.6%)
Dover Downs Entertainment, Inc. .......................................... 8,000 144,000
Regal Cinemas, Inc. (a) .................................................. 9,275 306,075
-----------
450,075
ENVIRONMENTAL--(2.1%)
American Disposal Services, Inc. (a) ..................................... 5,600 126,000
Tetra Tech, Inc. (a) ..................................................... 9,975 240,647
-----------
366,647
EXPLORATION & PRODUCTION--(1.3%)
Chesapeake Energy Corporation ............................................ 6,900 67,706
Swift Energy Company (a) ................................................. 6,400 152,800
-----------
220,506
FOOD DISTRIBUTOR--(0.9%)
JP Foodservice, Inc. (a) ................................................. 5,500 157,781
-----------
HEALTH CARE SERVICES--(1.5%)
Rural/Metro Corporation (a) .............................................. 9,300 269,991
-----------
HOTELS/RESORTS--(3.8%)
CapStar Hotel Company (a) ................................................ 4,200 134,400
Vistana, Inc. (a) ........................................................ 15,700 243,350
Wyndham Hotel Corporation (a) ............................................ 9,100 296,887
-----------
674,637
INVESTMENT FIRMS--(1.2%)
Sirrom Capital Corporation ............................................... 6,000 207,000
-----------
MANAGED CARE-DENTAL--(0.8%)
Orthodontic Centers of America, Inc. (a) ................................. 7,400 134,588
-----------
MEDICAL DEVICES--(0.9%)
Theragenics Corporation (a) .............................................. 6,600 151,800
-----------
</TABLE>
See notes to financial statements.
46
<PAGE> 48
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
MEDICAL EQUIPMENT--(1.0%)
Acuson Corporation (a) ................................................. 7,500 $ 172,500
-----------
METALS--(1.1%)
RMI Titanium Company (a) ............................................... 7,200 196,200
-----------
NETWORKING SECURITY--(1.2%)
Security Dynamics Technology, Inc. (a) ................................. 5,800 213,875
-----------
NETWORKING SOFTWARE--(0.6%)
Veritas Software Company (a) ........................................... 2,000 100,500
-----------
PHYSICIAN PRACTICE MANAGEMENT--(1.7%)
Pediatrix Medical Group (a) ........................................... 6,700 306,944
-----------
PRECISION INSTRUMENTS--(2.7%)
Waters Corporation (a) ................................................. 8,000 287,000
Zygo Corporation (a) ................................................... 5,800 178,350
-----------
465,350
PRINTING SERVICES/FORMS--(1.1%)
Applied Graphics Technologies (a) ...................................... 4,900 194,775
-----------
RADIO/TELEVISION--(1.5%)
Heftel Broadcasting Corporation (a) .................................... 4,700 259,675
-----------
RESTAURANTS--(2.5%)
Einstein Noah Bagel Corporation (a) .................................... 9,600 114,600
Landrys Seafood Restaurant, Inc. (a) ................................... 9,300 213,900
Papa Johns International, Inc. (a) ..................................... 2,775 101,981
-----------
430,481
RETAIL-APPAREL--(4.1%)
Nautica Enterprises, Inc. (a) .......................................... 4,800 126,900
North Face, Inc. (a) ................................................... 8,800 160,600
St. John Knits, Inc. ................................................... 3,900 210,600
Wolverine World Wide, Inc. ............................................. 7,575 230,091
-----------
728,191
RETAIL-CATALOG--(1.9%)
CDW Computer Centers, Inc. (a) ......................................... 3,250 172,453
Insight Enterprises, Inc. (a) .......................................... 5,200 156,325
-----------
328,778
RETAIL-DISCOUNT STORES--(1.5%)
Dollar Tree Stores, Inc. (a) ........................................... 5,200 261,950
-----------
</TABLE>
See notes to financial statements.
47
<PAGE> 49
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
RETAIL-SPECIALTY--(1.6%)
Finish Line, Inc. (a) ................................................ 13,600 $ 198,900
Guitar Center, Inc. (a) .............................................. 4,600 77,625
-----------
276,525
SEMICONDUCTOR MANUFACTURING--(2.5%)
DSP Communications, Inc. (a) ......................................... 13,700 150,700
Vitesse Semiconductor Corporation (a) ................................ 8,950 292,553
-----------
443,253
SEMICONDUCTOR TESTING EQUIPMENT--(1.8%)
Electro Scientific Industries, Inc. .................................. 2,000 83,750
Uniphase Corporation (a) ............................................. 4,100 238,825
-----------
322,575
SERVICE/EQUIPMENT--(1.9%)
Global Industries, Inc. (a) .......................................... 6,700 156,508
Varco International, Inc. (a) ........................................ 5,300 170,925
-----------
327,433
SOFTWARE DESKTOP--(1.0%)
Visio Corporation (a) ................................................ 2,500 176,250
-----------
SPECIAL OUTPATIENT FACILITY--(4.1%)
National Surgery Centers, Inc. (a) ................................... 6,900 244,087
Renal Treatment Centers, Inc. (a) .................................... 9,000 241,875
Total Renal Care Holdings, Inc. (a) .................................. 5,800 233,088
-----------
719,050
SOFTWARE-OTHER--(1.8%)
JDA Software Group, Inc. (a) ......................................... 5,500 187,687
Viasoft, Inc. (a) .................................................... 2,600 131,950
-----------
319,637
SYSTEMS INTEGRATOR--(9.0%)
Cambridge Technology Partners (a) .................................... 6,400 204,800
Computer Horizons Corporation (a) .................................... 10,200 349,350
Computer Task Group, Inc. ............................................ 8,700 324,075
Henry Jack & Associates, Inc. (a) .................................... 10,350 250,987
Pierce Leahy Corporation ............................................. 2,000 36,000
Sapient Corporation (a) .............................................. 3,200 158,400
Technology Solutions Company (a) ..................................... 6,700 264,650
-----------
1,588,262
TELECOMMUNICATION EQUIPMENT--(4.3%)
Advanced Fibre Communications (a) .................................... 3,800 229,425
Allen Group, Inc. .................................................... 7,400 153,550
P Common, Inc. (a) ................................................... 3,900 128,700
Powerwave Technologies, Inc. ......................................... 3,600 79,200
Sawtek, Inc. ......................................................... 2,600 87,750
Videoserver, Inc. (a) ................................................ 5,100 67,575
-----------
746,200
</TABLE>
See notes to financial statements.
48
<PAGE> 50
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<C> <C> <C> <C> <C>
COMMON STOCKS
TELEMARKETING--(3.9%)
Precision Response Corporation (a) ....................................... 7,800 $ 128,700
Sitel Corporation (a) .................................................... 14,500 299,062
Sykes Enterprises, Inc. (a) .............................................. 9,750 253,500
-----------
681,262
VOICE-CALL TRANSACTION PROCESSING--(3.4%)
Aspect Telecommunications Corporation (a) ................................ 5,600 124,600
Comverse Technology, Inc. (a) ............................................ 9,200 478,400
-----------
603,000
TOTAL COMMON STOCKS--(Cost $14,635,777) 99.6% 17,487,664
INTEREST MATURITY MATURITY
RATE DATE AMOUNT VALUE
---- ---- ------ -----
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(1.3%)
State Street Bank and Trust Company (b) 4.500% 07/01/1997 $228,029 228,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $228,000) 1.3% 228,000
-----------
TOTAL INVESTMENTS--(Cost $14,863,777) 100.9% 17,715,664
OTHER ASSETS LESS LIABILITIES-- (0.9)% (159,849)
----- -----------
NET ASSETS-- 100.0% $17,555,815
===== ===========
</TABLE>
(a) Non-income producing security.
(b) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Bond, 8.125%, 08/15/19, with a value of $234,998.
See notes to financial statements.
49
<PAGE> 51
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<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
MORTGAGE BACKED SECURITIES--(47.5%)
FHA Insured Project Loan ............................ 3.025% 11/01/2006 $ 413,777 $ 364,600
............................ 7.500% 11/15/2030 272,912 270,353
FHLMC Participation Certificates (a) ................ 7.805% 08/01/2025 290,711 303,386
................ 8.500% 01/01/2003 155,074 159,467
................ 9.000% 03/01/2010 231,708 241,521
................ 9.000% 06/01/2016 191,619 205,559
................ 9.500% 04/01/2007 111,267 116,630
................ 10.000% 10/01/2005 104,775 112,605
FNMA Guaranteed Real Estate
Mortgage Investment Pass-Thru
Certificates (a) ................................ 6.969% 04/01/2020 157,495 163,908
(a) ............................. 7.298% 08/17/2018 235,000 238,819
................................ 8.000% 11/01/2026 517,064 529,891
................................ 10.000% 04/01/2020 123,053 134,282
................................ 12.500% 05/01/2015 511,931 593,082
GNMA Guaranteed Pass-Thru
Certificates (a) ................................ 7.000% 03/20/2018 298,247 306,797
................................ 7.500% 04/15/2024 245,683 246,605
................................ 9.000% 12/15/2006 218,234 229,526
................................ 9.000% 01/15/2008 316,169 332,803
----------
4,549,834
U.S. GOVERNMENT SECURITIES--(35.4%)
U.S. Treasury Bonds ................................. 6.000% 02/15/2026 200,000 179,000
................................. 6.875% 08/15/2025 535,000 536,839
................................. 7.500% 11/15/2024 115,000 124,056
................................. 11.625% 11/15/2004 600,000 777,187
U.S. Treasury Note .................................. 5.875% 11/30/2001 110,000 107,937
.................................. 6.250% 03/31/1999 185,000 185,694
.................................. 6.500% 04/30/1999 150,000 151,172
.................................. 6.625% 06/30/2001 465,000 469,795
.................................. 6.875% 07/31/1999 245,000 248,675
.................................. 7.875% 08/15/2001 345,000 363,867
.................................. 8.000% 08/15/1999 240,000 248,925
----------
3,393,147
----------
TOTAL GOVERNMENT AND AGENCY SECURITIES--(Cost $7,921,091) 82.9% 7,942,981
----------
CORPORATE BONDS
ENTERTAINMENT--(3.2%)
Time Warner, Inc. ................................... 7.750% 06/15/2005 300,000 304,892
----------
FINANCIAL SERVICES--(2.3%)
Contifinancial Corporation .......................... 8.375% 08/15/2003 215,000 221,719
----------
</TABLE>
See notes to financial statements.
50
<PAGE> 52
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
INSURANCE--(2.3%)
American Re-insurance Corporation .................... 7.450% 12/15/2026 $ 225,000 $ 223,130
----------
TOTAL CORPORATE BONDS--(Cost $753,204) 7.8% 749,741
----------
MUNICIPALS--(3.9%)
New Jersey Economic Development
Authority ....................................... 0.000% 02/15/2023 1,165,000 173,119
....................................... 0.000% 02/15/2024 700,000 97,090
....................................... 7.425% 02/15/2029 100,000 99,685
----------
TOTAL MUNICIPALS--(Cost $366,262) 3.9% 369,894
----------
MATURITY
AMOUNT
------
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT--(4.8%)
State Street Bank and Trust Company (b) .............. 5.000% 07/01/1997 $ 456,063 456,000
----------
TOTAL SHORT TERM INVESTMENT--(Cost $456,000) 4.8% 456,000
----------
TOTAL INVESTMENTS--(Cost $9,496,557) 99.4% 9,518,616
OTHER ASSETS LESS LIABILITIES-- 0.6% 62,893
----- ----------
NET ASSETS-- 100.0% $9,581,509
===== ==========
</TABLE>
(a) Variable rate instrument. Interest rate is the rate in effect at June 30,
1997.
(b) The repurchase agreement, dated 06/30/97, is fully collateralized by a
United States Treasury Bond, 7.50%, 11/15/16, with a value of $465,408.
See notes to financial statements.
51
<PAGE> 53
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AUSTRALIA--(3.4%)
Broken Hill Proprietary Company ...................................... 12,679 $ 186,689
CRA Ltd. ............................................................. 2,580 44,027
Evans Deakin Industries Ltd. ......................................... 18,200 55,019
National Australia Bank .............................................. 11,754 168,512
QBE Insurance Group .................................................. 17,500 105,805
Sonic Healthcare Ltd. ................................................ 111,000 155,193
WMC Ltd. ............................................................. 31,300 197,519
-----------
912,764
BRAZIL--(1.7%)
Eletrobras ........................................................... 820,000 458,539
-----------
CANADA--(2.4%)
Denbury Resources Inc. (a) ........................................... 10,000 167,500
E L Financial Ltd. ................................................... 1,000 150,621
Potash Corporation Saskatchewan, Inc. ................................ 1,120 84,307
Quebecor ............................................................. 12,539 230,632
-----------
633,060
FINLAND--(1.4%)
Huhtamaki Oy ......................................................... 8,700 374,455
-----------
FRANCE--(4.0%)
Axa .................................................................. 2,000 124,390
Axime Ex Segin ....................................................... 400 47,305
Carbone Lorraine ..................................................... 200 48,667
Credit Commerce France ............................................... 1,301 55,124
Lafarge .............................................................. 2,000 124,390
Michelin ............................................................. 1,300 78,066
Rhone Poulenc Rorer .................................................. 4,650 420,950
Society Elf Aquitaine ................................................ 852 91,917
Zodiac SA ............................................................ 300 76,574
-----------
1,067,383
GERMANY--(2.5%)
Bayer AG ............................................................. 2,700 103,752
Daimler Benz AG ...................................................... 4,200 340,749
Karstadt AG .......................................................... 600 213,634
-----------
658,135
HONG KONG--(3.5%)
HSBC Holdings ........................................................ 24,000 721,800
Regal Hotels International ........................................... 379,200 102,787
Sime Darby HK ........................................................ 88,000 97,685
-----------
922,272
ITALY--(1.6%)
Telecom Italia Mobilaire ............................................. 133,800 429,449
-----------
</TABLE>
See notes to financial statements.
52
<PAGE> 54
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
JAPAN--(15.0%)
Dai-Tokyo Fire & Marine .......................................... 56,000 $ 324,411
Fuji Photo Film Company .......................................... 14,000 563,078
Fujitsu .......................................................... 14,000 194,207
Jusco Company .................................................... 10,000 337,638
Kirin Brewery Company Ltd. ....................................... 28,800 299,006
Kurita Water Industries .......................................... 12,000 319,316
Nichiei Company .................................................. 2,000 232,071
Pioneer Electronic Corporation ................................... 21,000 509,335
Sharp Corporation ................................................ 18,000 248,124
Sony Corporation ................................................. 10,200 889,007
Taisho Pharmaceutical Company .................................... 3,000 80,876
-----------
3,997,069
NETHERLANDS--(3.2%)
Philips Electronic ............................................... 5,850 419,028
Unilever NV ...................................................... 1,100 231,555
Van Ommeren Kon .................................................. 5,400 209,629
-----------
860,212
SPAIN--(2.0%)
BCO Santander SA ................................................. 11,700 360,488
Repsol SA ........................................................ 3,770 159,397
-----------
519,885
SWEDEN--(3.7%)
Astra AB ......................................................... 20,800 387,202
Electrolux AB .................................................... 2,000 144,270
Esselte AB ....................................................... 10,100 237,632
Granges AB (a) .................................................. 1,000 13,250
Volvo AB ......................................................... 8,100 216,754
-----------
999,108
SWITZERLAND--(3.4%)
CS Holding AG .................................................... 2,000 256,849
Holderbank Financiere Glarus AG .................................. 130 122,788
Nestle SA ........................................................ 180 237,452
Novartis AG ...................................................... 175 279,760
-----------
896,849
TURKEY--(1.5%)
Akbank T.A.S ..................................................... 1,363,000 117,006
Arcelik A.S ...................................................... 2,157,000 290,456
-----------
407,462
</TABLE>
See notes to financial statements.
53
<PAGE> 55
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
UNITED KINGDOM--(7.8%)
British Airways ........................................................ 10,000 $ 113,990
British Telecom ........................................................ 30,700 228,016
Compass Group .......................................................... 17,300 193,601
Glaxo Holdings ......................................................... 16,500 341,408
Lloyds TSB Group ....................................................... 21,902 225,041
London International Group ............................................. 84,800 242,894
Pearson ................................................................ 23,600 273,536
Smithkline Beecham ..................................................... 12,227 225,098
Vodafone Group ......................................................... 50,137 244,635
-----------
2,088,219
UNITED STATES--(33.4%)
Action Performance Companies, Inc. (a) ................................. 10,000 242,500
Agouron Pharmaceuticals, Inc. (a) ...................................... 2,400 194,100
Amylin Pharmaceuticals, Inc. (a) ....................................... 11,000 151,250
Avid Technology, Inc. (a) .............................................. 7,000 184,625
Basin Exploration, Inc. (a) ............................................ 13,700 106,175
BJ Services Company (a) ................................................ 5,300 284,212
Black Box Corporation (a) .............................................. 2,300 92,575
BMC Industries, Inc. ................................................... 4,000 137,000
Cardiothoracic Systems, Inc. (a) ....................................... 2,100 29,400
Cognex Corporation (a) ................................................. 7,600 201,400
Cytyc Corporation ...................................................... 1,000 27,125
Dura Automotive Systems, Inc. (a) ...................................... 7,500 210,000
Falcon Drilling, Inc. (a) .............................................. 9,000 518,625
Furniture Brands International, Inc. (a) ............................... 7,000 135,625
G & K Services Class A ................................................. 1,100 40,975
Gadzooks, Inc. (a) ..................................................... 4,000 78,000
Greenpoint Financial Corporation ....................................... 3,600 239,625
Hanover Compressor Company ............................................. 2,400 46,800
Harmonic Lightwaves, Inc. .............................................. 5,500 94,188
Health Management Associates (a) ....................................... 13,500 384,750
Heartport, Inc. (a) .................................................... 3,900 68,738
HFS, Inc. (a) .......................................................... 5,000 290,000
Inso Corporation (a) ................................................... 5,400 111,038
International Telecomm Data Systems, Inc. .............................. 1,200 29,400
JLK Direct Distribution, Inc. .......................................... 3,600 72,000
KCS Energy, Inc. ....................................................... 8,600 175,225
Komag, Inc. (a) ........................................................ 4,000 65,500
Lattice Semiconductor Corporation (a) ................................. 1,400 79,100
McLeod, Inc. (a) ....................................................... 8,800 297,000
</TABLE>
See notes to financial statements.
54
<PAGE> 56
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
UNITED STATES--(Continued)
Microchip Technology, Inc. (a) ....................................... 2,600 $ 77,350
National Data Corporation ............................................ 3,400 147,262
Neurogen Corporation (a) ............................................. 3,150 71,663
Newpark Resource, Inc. (a) ........................................... 12,600 425,250
Norrell Corporation Georgia .......................................... 6,100 201,300
Ocean Energy, Inc. ................................................... 3,300 152,625
OM Group, Inc. ....................................................... 4,700 155,687
Omniquip International, Inc. (a) ..................................... 10,000 231,250
Ortel Corporation .................................................... 2,400 43,200
Pacific Sunwear of California ........................................ 4,500 145,125
Pediatrix Medical Group (a) .......................................... 3,000 137,438
Peoplesoft, Inc. ..................................................... 900 48,634
Pierce Leahy Corporation ............................................. 4,500 81,000
Project Software & Development, Inc. (a) ............................. 6,000 87,000
RadiSys Corporation (a) .............................................. 4,200 166,950
Railtex, Inc. (a) .................................................... 6,900 124,200
Rental Service Corporation (a) ....................................... 7,000 183,750
SmarTalk Teleservices, Inc. (a) ...................................... 10,000 155,000
Spine Tech, Inc. ..................................................... 1,000 37,125
Stone Energy Corporation (a) ......................................... 800 21,900
Synopsys, Inc. (a) ................................................... 10,000 367,500
TCF Financial Corporation ............................................ 2,000 98,750
Telecomunicacoes Brasileras ADR ...................................... 2,500 379,375
Thermedics, Inc. (a) ................................................. 8,000 125,500
Trimas Corporation ................................................... 6,200 174,375
United Meridian Corporation (a) ...................................... 2,700 81,000
USA Waste Services, Inc. (a) ......................................... 5,500 212,437
Vantive Corporation (a) .............................................. 6,500 183,625
-----------
8,903,222
TOTAL COMMON STOCKS--(Cost $18,315,554) 90.5% 24,128,083
-----------
PREFERRED STOCKS
BRAZIL--(4.3%)
COFAP ................................................................ 20,900 226,171
Companhia Riogrand Telec ............................................. 190,000 286,443
Companhia Vale do Rio Doce ........................................... 9,500 0
Companhia Vale do Rio Doce ........................................... 9,500 215,317
Itausa Investimentos Itau SA ......................................... 465,000 423,297
-----------
TOTAL PREFERRED STOCKS--(Cost $1,098,932) 4.3% 1,151,228
-----------
</TABLE>
See notes to financial statements.
55
<PAGE> 57
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C> <C> <C>
RIGHTS
BRAZIL--(0.0%)
Cia Rio Grand Telec. ................................................................ 6,767 $ 0
-----------
TOTAL RIGHTS--(Cost $0) 0.0% 0
-----------
INTEREST MATURITY PRINCIPAL
RATE DATE AMOUNT
---- ---- ------
SHORT TERM INVESTMENT
UNITED STATES--(6.4%)
Federal Home Loan Mortgage
Discount Note ................................... 5.750% 07/01/1997 $1,698,000 1,698,000
-----------
TOTAL SHORT TERM INVESTMENT--(Cost $1,698,000) 6.4% 1,698,000
-----------
TOTAL INVESTMENTS--(Cost $21,112,486) 101.2% 26,977,311
OTHER ASSETS LESS LIABILITIES-- (1.2)% (326,527)
----- -----------
NET ASSETS-- 100.0% $26,650,784
===== ===========
</TABLE>
(a) Non-income producing security.
See notes to financial statements.
56
<PAGE> 58
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
ANALYSIS OF INDUSTRY CLASSIFICATIONS
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS VALUE
- -------- ---------- -----
<S> <C> <C>
Apparel & Textiles ............................ 0.2% $ 40,975
Appliances .................................... 8.0 2,126,510
Automated Data Collection ..................... 1.5 405,625
Automobiles ................................... 2.1 557,503
Automotive Parts .............................. 1.9 514,237
Banking ....................................... 6.7 1,787,815
Beer .......................................... 1.1 299,005
Broadcasting/Publishing ....................... 1.9 504,167
Building Materials & Construction ............. 0.9 247,177
Business/Public Services ...................... 2.9 776,869
Chemicals ..................................... 1.0 259,440
Client-Server Software ........................ 1.3 345,350
Computers & Business Equipment ................ 1.7 454,500
Computer Related .............................. 0.2 65,500
Computer Software ............................. 0.3 92,575
Conglomerates ................................. 0.8 215,317
Data Communications ........................... 0.6 147,263
Distributed System-Hardware & Peripherals ..... 1.3 356,631
Document Management ........................... 0.4 111,038
Drugs & Health Care ........................... 1.4 360,636
Electric Utility .............................. 1.7 458,539
Electrical Equipment .......................... 0.5 127,767
Electronics ................................... 3.7 982,292
Energy Sources ................................ 2.3 612,528
Federal Agency ................................ 6.4 1,698,000
Fertilizer .................................... 0.3 84,307
Financial Services ............................ 1.2 330,821
Food & Beverages .............................. 3.2 843,462
Health & Personal Care ........................ 5.3 1,421,005
Health Care-Management Services ............... 2.0 536,190
Hotels, Leisure & Tourism ..................... 5.2 1,391,966
Insurance ..................................... 2.6 705,227
Leisure ....................................... 0.7 175,225
Machinery Engineering ......................... 1.9 503,066
Manufacturing ................................. 0.5 131,592
Metals ........................................ 1.0 254,797
Non-Durables .................................. 0.6 166,950
Oil & Gas ..................................... 1.7 451,712
Oil Services .................................. 4.6 1,234,504
Pharmaceuticals ............................... 5.4 1,426,940
Physician Practice Management ................. 0.5 137,438
Retail ........................................ 2.1 551,272
Retail-Catalog ................................ 0.4 106,175
Services ...................................... 2.1 551,097
Software-General .............................. 0.5 137,000
Supplies ...................................... 0.8 223,125
Systems Integrated Value Added Resellers ...... 0.6 162,387
Telecommunications ............................ 5.9 1,567,918
Transportation ................................ 0.9 238,190
Wholesale ..................................... 0.4 97,686
----- -----------
TOTAL ......................................... 101.2% $26,977,311
===== ===========
</TABLE>
See notes to financial statements.
57
<PAGE> 59
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
CASH
MANAGEMENT GROWTH
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value ..................................... $749,976 $59,452,462
Investments - repurchase agreements .................................... 0 2,948,000
Foreign currency holdings, at value .................................... 0 0
Cash ................................................................... 0 820
Income receivable ...................................................... 4,261 20,341
Receivable for securities sold ......................................... 0 0
Unrealized appreciation on forward currency
contracts ............................................................ 0 0
Receivable for trust shares sold ....................................... 0 110,833
Prepaid expenses ....................................................... 0 9,009
Foreign income tax reclaim receivable .................................. 0 0
Due from adviser ....................................................... 10,134 0
-------- -----------
TOTAL ASSETS ....................................................... 764,371 62,541,465
LIABILITIES
Payable for securities purchased ....................................... 0 759,798
Unrealized depreciation on forward currency
contracts ............................................................ 0 0
Payable to custodian ................................................... 46,920 0
Advisory fee payable ................................................... 225 34,717
Accounts payable and accrued expenses .................................. 61,210 57,802
Payable for trust shares redeemed ...................................... 598 710,760
-------- -----------
TOTAL LIABILITIES .................................................. 108,953 1,563,077
-------- -----------
TOTAL NET ASSETS ................................................... $655,418 $60,978,388
======== ===========
NET ASSETS
Capital paid-in ........................................................ $656,158 $38,602,124
Undistributed (distributions in
excess of) net investment income ..................................... 0 (97,128)
Accumulated net realized gain (loss) on
investments and foreign currency transactions ........................ (740) 1,808,426
Net unrealized appreciation (depreciation) of:
Investments .......................................................... 0 20,664,966
Foreign currency ..................................................... 0 0
-------- -----------
TOTAL NET ASSETS ................................................... $655,418 $60,978,388
======== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value) .......................................... $ 1.000 $ 34.448
Total shares outstanding at end of period .............................. 655,418 1,770,146
Cost of investment securities .......................................... $749,976 $41,735,496
</TABLE>
See notes to financial statements.
58
<PAGE> 60
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
GROWTH & HIGH INCOME MATRIX MULTIPLE SMALL CAP
INCOME BOND EQUITY STRATEGIES GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments - securities, at value ................ $14,821,858 $14,833,387 $13,713,982 $31,752,926 $17,487,664
Investments - repurchase agreements ............... 1,222,000 198,000 0 3,783,000 228,000
Foreign currency holdings, at value ............... 0 0 0 0 0
Cash .............................................. 618 0 20,109 274 480
Income receivable ................................. 32,213 272,013 15,791 72,568 676
Receivable for securities sold .................... 306,606 52,091 253,862 0 101,698
Unrealized appreciation on forward currency
contracts ....................................... 0 0 0 0 0
Receivable for trust shares sold .................. 64,669 34,728 27,180 32,126 46,259
Prepaid expenses .................................. 1,668 2,218 2,457 5,890 2,188
Foreign income tax reclaim receivable ............. 478 0 0 0 0
Due from adviser .................................. 3,380 3,848 2,580 181 3,440
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS .................................. 16,453,490 15,396,285 14,035,961 35,646,965 17,870,405
LIABILITIES
Payable for securities purchased .................. 244,932 0 0 249,439 181,129
Unrealized depreciation on forward currency
contracts ....................................... 0 0 0 0 0
Payable to custodian .............................. 0 33,308 0 0 0
Advisory fee payable .............................. 9,519 8,904 7,666 20,097 11,971
Accounts payable and accrued expenses ............. 42,289 40,214 47,855 50,552 57,265
Payable for trust shares redeemed ................. 26,012 1,127,576 691 29,518 64,225
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES ............................. 322,752 1,210,002 56,212 349,606 314,590
----------- ----------- ----------- ----------- -----------
TOTAL NET ASSETS .............................. $16,130,738 $14,186,283 $13,979,749 $35,297,359 $17,555,815
=========== =========== =========== =========== ===========
NET ASSETS
Capital paid-in ................................... $13,792,028 $13,298,308 $10,224,404 $26,944,580 $15,202,432
Undistributed (distributions in
excess of) net investment income ................ 78,331 455,469 235,323 137,729 (70,829)
Accumulated net realized gain (loss) on
investments and foreign currency transactions ... 969,949 (475,415) 2,317,860 178,721 (427,675)
Net unrealized appreciation (depreciation) of:
Investments ..................................... 1,290,430 907,921 1,202,162 8,036,329 2,851,887
Foreign currency ................................ 0 0 0 0 0
----------- ----------- ----------- ----------- -----------
TOTAL NET ASSETS .............................. $16,130,738 $14,186,283 $13,979,749 $35,297,359 $17,555,815
=========== =========== =========== =========== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value) ..................... $ 14.310 $ 9.737 $ 16.681 $ 14.003 $ 16.009
Total shares outstanding at end of period ......... 1,127,255 1,456,951 838,049 2,520,726 1,096,625
Cost of investment securities ..................... $14,753,428 $14,123,466 $12,511,820 $27,499,597 $14,863,777
</TABLE>
See notes to financial statements.
59
<PAGE> 61
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
U.S. GOVERNMENT WORLD
BOND EQUITY
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
ASSETS
Investments - securities, at value .................................... $9,062,616 $26,977,311
Investments - repurchase agreements ................................... 456,000 0
Foreign currency holdings, at value (Cost $19,561) .................... 0 19,466
Cash .................................................................. 404 1,214
Income receivable ..................................................... 106,238 30,593
Receivable for securities sold ........................................ 0 77,497
Unrealized appreciation on forward currency contracts ................. 0 61,603
Receivable for trust shares sold ...................................... 0 38,506
Prepaid expenses ...................................................... 1,701 4,203
Foreign income tax reclaim receivable ................................. 0 16,733
Due from adviser ...................................................... 6,351 2,968
---------- -----------
TOTAL ASSETS ...................................................... 9,633,310 27,230,094
LIABILITIES
Payable for securities purchased ...................................... 0 269,318
Unrealized depreciation on forward currency contracts ................. 0 217,808
Payable to custodian .................................................. 0 0
Advisory fee payable .................................................. 4,734 15,101
Accounts payable and accrued expenses ................................. 43,657 44,890
Payable for trust shares redeemed ..................................... 3,410 32,193
---------- -----------
TOTAL LIABILITIES ................................................. 51,801 579,310
---------- -----------
TOTAL NET ASSETS .................................................. $9,581,509 $26,650,784
========== ===========
NET ASSETS
Capital paid-in ....................................................... $9,251,436 $18,880,431
Undistributed (distributions in
excess of) net investment income .................................... 319,410 192,713
Accumulated net realized gain (loss) on
investments and foreign currency transactions ....................... (11,396) 1,869,361
Net unrealized appreciation (depreciation) of:
Investments ......................................................... 22,059 5,864,730
Foreign currency .................................................... 0 (156,451)
---------- -----------
TOTAL NET ASSETS .................................................. $9,581,509 $26,650,784
========== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value) ......................................... $ 10.232 $ 16.616
Total shares outstanding at end of period ............................. 936,386 1,603,884
Cost of investment securities ......................................... $9,496,557 $21,112,486
</TABLE>
See notes to financial statements.
60
<PAGE> 62
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
CASH
MANAGEMENT GROWTH
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income .......................................................... $ 0 $ 176,096
Interest income .......................................................... 20,257 41,724
Foreign taxes withheld ................................................... 0 (687)
-------- ----------
TOTAL INCOME ......................................................... 20,257 217,133
EXPENSES
Investment management fee ................................................ 1,861 196,132
Administrative fee ....................................................... 13,534 63,480
Custodian fee ............................................................ 31,304 26,530
Audit fee and expenses ................................................... 7,439 7,439
Legal fee ................................................................ 5,235 4,123
Printing expenses ........................................................ 2,755 2,755
Trustees fee and expenses ................................................ 3,415 3,416
Transfer agent fee ....................................................... 892 232
Insurance ................................................................ 2,317 8,212
Other .................................................................... 664 1,954
Expenses borne by the adviser ............................................ (66,534) 0
Expense reductions ....................................................... (86) (12)
-------- ----------
TOTAL EXPENSES ....................................................... 2,796 314,261
-------- ----------
NET INVESTMENT INCOME (LOSS) ......................................... 17,461 (97,128)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments .................................... 0 1,022,831
Net realized gain on foreign currency transactions ......................... 0 26
Change in unrealized appreciation (depreciation) of:
Investments .............................................................. 0 5,841,161
Foreign currency ......................................................... 0 0
-------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) .............................. 0 6,864,018
-------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................................ $ 17,461 $6,766,890
======== ==========
</TABLE>
See notes to financial statements.
61
<PAGE> 63
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
GROWTH & HIGH INCOME
INCOME BOND
PORTFOLIO PORTFOLIO
--------- ---------
<S> <C> <C>
INVESTMENT INCOME
Dividend income .......................................................... $ 127,683 $ 10,826
Interest income .......................................................... 31,302 571,112
Foreign taxes withheld ................................................... (1,669) 0
---------- ---------
TOTAL INCOME ......................................................... 157,316 581,938
EXPENSES
Investment management fee ................................................ 47,241 47,837
Administrative fee ....................................................... 15,421 16,009
Custodian fee ............................................................ 21,603 26,897
Audit fee and expenses ................................................... 7,431 7,451
Legal fee ................................................................ 4,103 4,132
Printing expenses ........................................................ 2,752 2,759
Trustees fee and expenses ................................................ 3,412 3,422
Transfer agent fee ....................................................... 2,283 175
Insurance ................................................................ 1,508 1,682
Other .................................................................... 309 427
Expenses borne by the adviser ............................................ (27,058) (28,766)
Expense reductions ....................................................... (20) (20)
---------- ---------
TOTAL EXPENSES ....................................................... 78,985 82,005
---------- ---------
NET INVESTMENT INCOME (LOSS) ......................................... 78,331 499,933
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments .................................... 1,119,188 (122,886)
Net realized gain on foreign currency transactions ......................... 0 0
Change in unrealized appreciation (depreciation) of:
Investments .............................................................. 690,668 480,747
Foreign currency ......................................................... 0 0
---------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) .................................... 1,809,856 357,861
---------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................................................ $1,888,187 $ 857,794
========== =========
</TABLE>
See notes to financial statements.
62
<PAGE> 64
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
MATRIX MULTIPLE SMALL CAP U.S. GOVERNMENT WORLD
EQUITY STRATEGIES GROWTH BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income ..................................... $ 259,095 $ 77,229 $ 7,773 $ 0 $ 215,933
Interest income ..................................... 4,350 248,310 18,869 339,617 25,018
Foreign taxes withheld .............................. 0 (216) 0 0 (27,525)
----------- ---------- --------- -------- ----------
TOTAL INCOME .................................... 263,445 325,323 26,642 339,617 213,426
EXPENSES
Investment management fee ........................... 44,395 115,216 61,368 29,622 86,446
Administrative fee .................................. 16,727 37,599 19,695 12,817 28,210
Custodian fee ....................................... 23,625 27,197 26,307 22,648 36,786
Audit fee and expenses .............................. 7,439 7,439 7,439 7,439 7,431
Legal fee ........................................... 4,123 4,123 4,123 4,123 4,103
Printing expenses ................................... 2,755 2,755 2,755 2,755 2,752
Trustees fee and expenses ........................... 3,416 3,416 3,416 3,416 3,412
Transfer agent fee .................................. 232 232 2,528 232 162
Insurance ........................................... 2,133 4,222 1,980 1,567 3,541
Other ............................................... 566 980 392 412 836
Expenses borne by the adviser ....................... (24,966) (5,655) (32,496) (42,559) (25,059)
Expense reductions .................................. (1,900) (11) (36) (508) (426)
----------- ---------- --------- -------- ----------
TOTAL EXPENSES .................................. 78,545 197,513 97,471 41,964 148,194
----------- ---------- --------- -------- ----------
NET INVESTMENT INCOME (LOSS) .................... 184,900 127,810 (70,829) 297,653 65,232
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments ............... 2,095,757 (71,409) (422,377) (18,823) 1,394,275
Net realized gain on foreign currency transactions .... 0 8 0 0 331,632
Change in unrealized appreciation (depreciation) of:
Investments ......................................... (1,064,480) 3,209,625 846,662 (487) 923,628
Foreign currency .................................... 0 0 0 0 (218,626)
----------- ---------- --------- -------- ----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ............... 1,031,277 3,138,224 424,285 (19,310) 2,430,909
----------- ---------- --------- -------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ........................... $ 1,216,177 $3,266,034 $ 353,456 $278,343 $2,496,141
=========== ========== ========= ======== ==========
</TABLE>
See notes to financial statements.
63
<PAGE> 65
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CASH MANAGEMENT PORTFOLIO GROWTH PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
6/30/97 12/31/96 6/30/97 12/31/96
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ................... $ 17,461 $ 574,740 $ (97,128) $ (112,724)
Net realized gain (loss) on investments ........ 0 (740) 1,022,831 3,885,594
Net realized gain (loss) on foreign
currency transactions ........................ 0 0 26 4
Change in unrealized appreciation
(depreciation) of:
Investments .................................. 0 0 5,841,161 7,359,129
Foreign currency ............................. 0 0 0 0
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .................. 17,461 574,000 6,766,890 11,132,003
Dividends and distributions to Shareholders
from:
Net investment income .......................... (17,461) (574,740) 0 0
Net realized gain on investments ............... 0 0 0 (3,224,517)
Dividends and distributions to Shareholders
in excess of:
Net investment income .......................... 0 0 0 (2,498)
Net realized gain on investments ............... 0 0 0 0
Trust share transactions ......................... (8,267,454) (1,172,111) (353,254) 3,741,040
----------- ----------- ----------- -----------
Total increase (decrease) .................... (8,267,454) (1,172,851) 6,413,636 11,646,028
Net assets
Beginning of period ............................ 8,922,872 10,095,723 54,564,752 42,918,724
----------- ----------- ----------- -----------
END OF PERIOD (1) .............................. $ 655,418 $ 8,922,872 $60,978,388 $54,564,752
=========== =========== =========== ===========
(1) Including undistributed (distributions in
excess of) net investment income ................ $ 0 $ 0 $ (97,128) $ 0
</TABLE>
See notes to financial statements.
64
<PAGE> 66
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH & INCOME PORTFOLIO HIGH INCOME BOND PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
6/30/97 12/31/96 6/30/97 12/31/96
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ................... $ 78,331 $ 58,118 $ 499,933 $ 763,269
Net realized gain (loss) on investments ........ 1,119,188 (135,171) (122,886) 284,309
Net realized gain (loss) on foreign
currency transactions ........................ 0 0 0 0
Change in unrealized appreciation
(depreciation) of:
Investments .................................. 690,668 505,901 480,747 287,545
Foreign currency ............................. 0 0 0 0
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .................. 1,888,187 428,848 857,794 1,335,123
Dividends and distributions to Shareholders
from:
Net investment income .......................... 0 (58,118) 0 (763,269)
Net realized gain on investments ............... 0 (29,710) 0 0
Dividends and distributions to Shareholders
in excess of:
Net investment income .......................... 0 (737) 0 (60,285)
Net realized gain on investments ............... 0 0 0 0
Trust share transactions ......................... 3,942,505 6,625,007 493,978 3,559,102
----------- ----------- ----------- -----------
Total increase (decrease) .................... 5,830,692 6,965,290 1,351,772 4,070,671
Net assets
Beginning of period ............................ 10,300,046 3,334,756 12,834,511 8,763,840
----------- ----------- ----------- -----------
END OF PERIOD (1) .............................. $16,130,738 $10,300,046 $14,186,283 $12,834,511
=========== =========== =========== ===========
(1) Including undistributed (distributions in
excess of) net investment income ................ $ 78,331 $ 0 $ 455,469 $ (44,464)
<CAPTION>
MATRIX EQUITY PORTFOLIO
SIX MONTHS ENDED YEAR ENDED
6/30/97 12/31/96
---------------- ----------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ................... $ 184,900 $ 589,737
Net realized gain (loss) on investments ........ 2,095,757 587,821
Net realized gain (loss) on foreign
currency transactions ........................ 0 0
Change in unrealized appreciation
(depreciation) of:
Investments .................................. (1,064,480) (546,460)
Foreign currency ............................. 0 0
----------- -----------
Net increase (decrease) in net assets
resulting from operations .................. 1,216,177 631,098
Dividends and distributions to Shareholders
from:
Net investment income .......................... 0 (589,737)
Net realized gain on investments ............... 0 (476,096)
Dividends and distributions to Shareholders
in excess of:
Net investment income .......................... 0 0
Net realized gain on investments ............... 0 (100)
Trust share transactions ......................... (1,684,033) (1,135,870)
----------- -----------
Total increase (decrease) .................... (467,856) (1,570,705)
Net assets
Beginning of period ............................ 14,447,605 16,018,310
----------- -----------
END OF PERIOD (1) .............................. $13,979,749 $14,447,605
=========== ===========
(1) Including undistributed (distributions in
excess of) net investment income ................... $ 235,323 $ 50,423
</TABLE>
See notes to financial statements.
65
<PAGE> 67
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
-CONTINUED-
<TABLE>
<CAPTION>
MULTIPLE STRATEGIES PORTFOLIO SMALL CAPITAL GROWTH PORTFOLIO
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
6/30/97 12/31/96 6/30/97 12/31/96
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ................... $ 127,810 $ 321,490 $ (70,829) $ (78,272)
Net realized gain (loss) on investments ........ (71,409) 3,291,193 (422,377) (1,760)
Net realized gain (loss) on foreign
currency transactions ........................ 8 17,576 0 0
Change in unrealized appreciation
(depreciation) of:
Investments .................................. 3,209,625 1,125,428 846,662 1,590,340
Foreign currency ............................. 0 0 0 0
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .................... 3,266,034 4,755,687 353,456 1,510,308
Dividends and distributions to Shareholders
from:
Net investment income .......................... 0 (321,490) 0 0
Net realized gain on investments ............... 0 (3,160,559) 0 (40,086)
Dividends and distributions to Shareholders
in excess of:
Net investment income .......................... 0 (95) 0 0
Net realized gain (loss) on investments ........ 0 0 0 0
Trust share transactions ......................... 147,816 4,230,258 3,399,250 8,519,785
----------- ----------- ----------- -----------
Total increase (decrease) .................... 3,413,850 5,503,801 3,752,706 9,990,007
Net assets
Beginning of period ............................ 31,883,509 26,379,708 13,803,109 3,813,102
----------- ----------- ----------- -----------
END OF PERIOD (1) .............................. $35,297,359 $31,883,509 $17,555,815 $13,803,109
=========== =========== =========== ===========
(1) Including undistributed (distributions
in excess of) net investment income ............ $ 137,729 $ 9,919 $ (70,829) $ 0
</TABLE>
See notes to financial statements.
66
<PAGE> 68
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
6/30/97 12/31/96 6/30/97 12/31/96
------- -------- ------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss) ................... $ 297,653 $ 637,006 $ 65,232 $ 21,021
Net realized gain (loss) on investments ........ (18,823) 115,107 1,394,275 878,643
Net realized gain (loss) on foreign
currency transactions ........................ 0 0 331,632 (170,197)
Change in unrealized appreciation
(depreciation) of:
Investments .................................. (487) (496,161) 923,628 1,675,486
Foreign currency ............................. 0 0 (218,626) 47,547
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .................... 278,343 255,952 2,496,141 2,452,500
Dividends and distributions to Shareholders
from:
Net investment income .......................... 0 (617,580) 0 (21,021)
Net realized gain on investments ............... 0 (211,853) 0 (565,417)
Dividends and distributions to Shareholders
in excess of:
Net investment income .......................... 0 0 0 (81,014)
Net realized gain (loss) on investments ........ 0 0 0 0
Trust share transactions ......................... (1,430,455) (310,953) (379,517) 4,558,380
----------- ----------- ----------- -----------
Total increase (decrease) .................... (1,152,112) (884,434) 2,116,624 6,343,428
Net assets
Beginning of period ............................ 10,733,621 11,618,055 24,534,160 18,190,732
----------- ----------- ----------- -----------
END OF PERIOD (1) .............................. $ 9,581,509 $10,733,621 $26,650,784 $24,534,160
=========== =========== =========== ===========
(1) Including undistributed (distributions
in excess of) net investment income ............ $ 319,410 $ 21,757 $ 192,713 $ 127,481
</TABLE>
See notes to financial statements.
67
<PAGE> 69
VARIABLE INVESTORS SERIES TRUST
CASH MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 --------------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<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 0.047 0.052 0.036 0.024 0.032
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 0.047 0.052 0.036 0.024 0.032
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ............ (0.024) (0.047) (0.052) (0.036) (0.024) (0.032)
From Net Realized Capital Gains ....... (0.000) (0.000) (0.000) (0.000 (0.000) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................... (0.024) (0.047) (0.052) (0.036) (0.024) (0.032)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ........ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) (3) .................... 2.46%(4) 4.81% 5.43% 3.68% 2.46% 3.22%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) ... $ 655 $ 8,923 $10,096 $ 8,198 $ 9,081 $18,405
Ratio of Operating Expenses to
Average Net Assets (5) .............. $ 0.75%(6) 0.75% 0.75% 0.75% 0.75% 0.75%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ...................... 0.77%(6) 0.75% 0.75% -- -- --
Ratio of Net Investment Income to
Average Net Assets .................. 4.69%(6) 4.67% 5.30% 3.64% 2.46% 3.20%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 18.62%; 1996 - 1.54%;
1995 - 1.72%; 1994 - 1.46%; 1993 - 1.46% and 1992 - 1.13%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
See notes to financial statements.
68
<PAGE> 70
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -----------------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $30.623 $25.866 $20.056 $20.390 $20.454 $26.290
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss) ....... (0.055) (0.063) 0.007 0.173 0.468 0.254
Net Realized and Unrealized Gain
(Loss) on Investments ............ 3.880 6.736 7.419 (0.335) 1.401 (2.256)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ..... 3.825 6.673 7.426 (0.162) 1.869 (2.002)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ......... (0.000) (0.002) (0.173) (0.086) (0.436) (0.254)
In Excess of Net Investment Income . (0.000) (0.000) (0.000) (0.000) (0.373) (0.000)
From Net Realized Capital Gains .... (0.000) (1.914) (1.443) (0.086) (1.124) (3.580)
------- ------- ------- ------- ------- -------
Total Distributions ................ (0.000) (1.916) (1.616) (0.172) (1.933) (3.834)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ..... $34.448 $30.623 $25.866 $20.056 $20.390 $20.454
======= ======= ======= ======= ======= =======
TOTAL RETURN (2)(3)................... 12.49% 25.74% 37.12% (0.79)% 9.09% (7.59)%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) $60,978 $54,565 $42,919 $30,815 $42,530 $52,538
Ratio of Operating Expenses to
Average Net Assets (5)............ 1.12% 1.17% 1.17% 1.20% 1.20% 1.16%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ................... 1.12% 1.17% 1.17% - - -
Ratio of Net Investment Income to
Average Net Assets ............... (0.35)% (0.23)% 0.01% 0.78% 1.74% 1.06%
Portfolio Turnover Rate ............ 21.04% 67.82% 166.87% 155.12% 6.05% 133.30%
Average Commission per Share (8) ... $ 0.05 $ 0.05 - - - -
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 18.62%; 1996 - 1.54%;
1995 - 1.72%; 1994 - 1.46%; 1993 - 1.46% and 1992 - 1.13%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
See notes to financial statements.
69
<PAGE> 71
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended Period Ended
(Unaudited) December 31, 1996 December 31, 1995 (1)
----------- ----------------- ---------------------
<S> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $ 12.421 $11.171 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .............. 0.069 0.070 0.045
Net Realized and Unrealized Gain
(Loss) on Investments ............ 1.820 1.291 1.266
-------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ..... 1.889 1.361 1.311
-------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ......... (0.000) (0.071) (0.045)
From Net Realized Capital Gains .... (0.000) (0.040) (0.095)
-------- ------- -------
Total Distributions ................ (0.000) (0.111) (0.140)
-------- ------- -------
NET ASSET VALUE AT END OF PERIOD ..... $ 14.310 $12.421 $11.171
======== ======= =======
TOTAL RETURN (2)(3) .................. 15.20%(4) 12.15% 13.09%(4)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) $ 16,131 $10,300 $ 3,335
Ratio of Operating Expenses to
Average Net Assets (5) ........... 1.25%(6) 1.25% 1.25%(6)
Ratio of Operating Expenses to
Average Net Assets Before Expense
Reductions (7) ................... 1.25%(6) 1.26% 1.49%(6)
Ratio of Net Investment Income to
Average Net Assets ............... 1.24%(6) 0.82% 1.17%(6)
Portfolio Turnover Rate ............ 149.64%(4) 131.85% 33.49%
Average Commission per Share (8) ... $ 0.06 $ 0.06 -
</TABLE>
(1) From commencement of operations May 31, 1995.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 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: 1997 - 1.68%;
1996 - 2.62%; 1995 - 7.27%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(8) 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.
See notes to financial statements.
70
<PAGE> 72
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 --------------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD .. $ 9.172 $ 8.589 $ 7.914 $ 9.704 $ 9.492 $ 9.187
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................. 0.344 0.595 0.779 1.018 0.848 0.972
Net Realized and Unrealized Gain
(Loss) on Investments ............... 0.221 0.624 0.717 (1.711) 0.567 0.481
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ........ 0.565 1.219 1.496 (0.693) 1.415 1.453
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ............ (0.000) (0.636) (0.779) (1.005) (0.849) (0.975)
In Excess of Net Investment Income .... (0.000) (0.000) (0.042) (0.006) (0.000) (0.000)
From Net Realized Capital Gains ....... (0.000) (0.000) (0.000) (0.075) (0.354) (0.173)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.011) (0.000) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................... (0.000) (0.636) (0.821) (1.097) (1.203) (1.148)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ........ $ 9.737 $ 9.172 $ 8.589 $ 7.914 $ 9.704 $ 9.492
======= ======= ======= ======= ======= =======
TOTAL RETURN(2)(3) ...................... 6.16%(4) 14.20% 18.98% (7.08)% 14.91% 15.77%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) ... $14,186 $12,833 $ 8,764 $ 7,771 $14,496 $12,448
Ratio of Operating Expenses to
Average Net Assets (5) .............. 1.20%(6) 1.18% 1.20% 1.20% 1.20% 1.20%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ...................... 1.20%(6) 1.20% 1.21% - - -
Ratio of Net Investment Income to
Average Net Assets .................. 7.32%(6) 7.96% 8.62% 8.70% 8.04% 9.70%
Portfolio Turnover Rate ............... 45.08%(4) 105.48% 82.15% 200.19% 90.82% 166.27%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 1.62%; 1996 - 1.97%;
1995 - 2.04%; 1994 - 2.03%; 1993 - 1.59% and 1992 - 1.68%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
See notes to financial statements.
71
<PAGE> 73
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 --------------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $15.254 $15.704 $12.372 $14.650 $13.891 $14.057
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income .............. 0.228 0.659 0.559 0.521 0.314 0.326
Net Realized and Unrealized Gain
(Loss) on Investments ............ 1.199 0.063 3.560 (0.651) 2.171 (0.168)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ..... 1.427 0.722 4.119 (0.130) 2.485 0.158
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ......... (0.000) (0.654) (0.494) (0.521) (0.296) (0.324)
In Excess of Net Investment Income . (0.000) (0.000) (0.000) (0.000) (0.170) (0.000)
From Net Realized Capital Gains .... (0.000) (0.518) (0.293) (1.627) (1.260) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................ (0.000) (1.172) (0.787) (2.148) (1.726) (0.324)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ..... $16.681 $15.254 $15.704 $12.372 $14.650 $13.891
======= ======= ======= ======= ======= =======
TOTAL RETURN (2)(3) .................. 9.38%(4) 3.74% 33.45% (1.05)% 17.87% 1.12%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) $13,980 $14,448 $16,018 $12,312 $15,251 $12,693
Ratio of Operating Expenses to
Average Net Assets (5) ........... 1.15%(6) 1.15% 1.15% 1.16% 1.20% 1.20%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ................... 1.18%(6) 1.15% 1.17% - - -
Ratio of Net Investment Income to
Average Net Assets ............... 2.71%(6) 3.74% 3.89% 3.16% 1.85% 2.49%
Portfolio Turnover Rate ............ 102.49%(4) 19.41% 48.20% 193.40% 109.57% 308.39%
Average Commission per Share (6) ... $ 0.03 $ 0.03 - - - -
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997- 1.52%; 1996 - 1.47%;
1995 - 1.51%; 1994 - 1.60%; 1993 - 1.59% and 1992 - 1.64%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(8) 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.
See notes to financial statements.
72
<PAGE> 74
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -----------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD .. $12.699 $12.043 $10.022 $12.182 $11.785 $12.515
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................. 0.051 0.143 0.137 0.236 0.424 0.499
Net Realized and Unrealized Gain
(Loss) on Investments ............... 1.253 2.068 3.086 (0.711) 0.835 (0.060)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ........ 1.304 2.211 3.223 (0.475) 1.259 0.439
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ............ (0.000) (0.144) (0.136) (0.235) (0.424) (0.506)
In Excess of Net Investment Income .... (0.000) (0.000) (0.000) (0.008) (0.000) (0.000)
From Net Realized Capital Gains ....... (0.000) (1.411) (1.066) (1.418) (0.438) (0.663)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.024) (0.000) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................... (0.000) (1.555) (1.202) (1.685) (0.862) (1.169)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ........ $14.003 $12.699 $12.043 $10.022 $12.182 $11.785
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) (3) .................... 10.27%(4) 18.29% 32.24% (3.91)% 10.52% 3.62%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) ... $35,297 $31,884 $26,380 $21,150 $24,522 $26,012
Ratio of Operating Expenses to
Average Net Assets (5) .............. 1.20%(6) 1.20% 1.20% 1.20% 1.20% 1.20%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ...................... 1.20%(6) 1.20% 1.20% - - -
Ratio of Net Investment Income to
Average Net Assets .................. 0.78%(6) 1.16% 1.14% 1.74% 3.20% 3.73%
Portfolio Turnover Rate ............... 17.41%(4) 92.21% 161.10% 153.64% 25.57% 52.11%
Average Commission per Share (8) ...... $ 0.05 $ 0.05 - - - -
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 1.23%; 1996 - 1.32%;
1995 - 1.33%; 1994 - 1.48%; 1993 - 1.35% and 1992 - 1.24%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(8) 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.
See notes to financial statements.
73
<PAGE> 75
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended Period Ended
(Unaudited) December 31, 1996 December 31, 1995 (1)
----------- ----------------- ---------------------
<S> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD $16.050 $12.638 $10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss ................ (0.065) (0.091) (0.042)
Net Realized and Unrealized Gain
on Investments ................... 0.024 3.560 3.047
------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ..... (0.041) 3.469 3.005
------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ......... (0.000) (0.000) (0.000)
From Net Realized Capital Gains .... (0.000) (0.057) (0.367)
------- ------- -------
Total Distributions ................ (0.000) (0.057) (0.367)
------- ------- -------
NET ASSET VALUE AT END OF PERIOD ..... $16.009 $16.050 $12.638
======= ======= =======
TOTAL RETURN (2) (3) ................. (0.25)%(4) 27.39% 30.08%(4)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) $17,556 $13,803 $ 3,813
Ratio of Operating Expenses to
Average Net Assets (5) ........... 1.35%(6) 1.35% 1.35%(6)
Ratio of Operating Expenses to
Average Net Assets Before Expense
Reductions (7) ................... 1.35%(6) 1.35% 1.38%(6)
Ratio of Net Investment Income to
Average Net Assets ............... (0.98)%(6) (0.90)% (0.79)%(6)
Portfolio Turnover Rate ............ 32.91 %(4) 72.66% 73.76%(4)
Average Commission per Share (8) ... $ 0.05 $ 0.05 -
</TABLE>
(1) From commencement of operations May 4, 1995.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 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: 1997 - 1.80%;
1996 - 2.38%; 1995 - 9.00%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(8) 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
See notes to financial statements.
74
<PAGE> 76
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -----------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD .. $ 9.939 $10.510 $ 9.718 $10.923 $10.659 $11.372
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................. 0.320 0.630 0.765 0.690 0.674 0.886
Net Realized and Unrealized Gain
(Loss) on Investments ............... (0.027) (0.365) 1.191 (0.986) 0.328 (0.187)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ........ 0.293 0.265 1.956 (0.296) 1.002 0.699
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ............ (0.000) (0.630) (0.765) (0.690) (0.673) (0.887)
In Excess of Net Investment Income .... (0.000) (0.000) (0.045) (0.000) (0.000) (0.000)
From Net Realized Capital Gains ....... (0.000) (0.206) (0.354) (0.105) (0.062) (0.525)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.112) (0.000) (0.000)
Tax Return of Capital ................. (0.000) (0.000) (0.000) (0.002) (0.003) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................... (0.000) (0.836) (1.164) (0.909) (0.738) (1.412)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ........ $10.232 $ 9.939 $10.510 $ 9.718 $10.923 $10.659
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) (3) .................... 2.95%(4) 2.36% 20.18% (2.72)% 9.38% 6.13%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) ... $ 9,582 $10,735 $11,618 $14,444 $20,710 $24,280
Ratio of Operating Expenses to
Average Net Assets (5) .............. 0.85%(6) 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ...................... 0.86%(6) 0.85% 0.85% - - -
Ratio of Net Investment Income to
Average Net Assets .................. 6.00%(6) 5.80% 6.18% 5.65% 5.20% 6.41%
Portfolio Turnover Rate ............... 60.41%(4) 244.96% 252.94% 289.71% 27.84% 133.86%
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 1.71%; 1996 - 1.66%;
1995 - 1.59%; 1994 - 1.45%; 1993 - 1.30% and 1992 - 1.17%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions
See notes to financial statements.
75
<PAGE> 77
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -----------------------------------------------------------------
(Unaudited) 1996 1995 1994(1) 1993 1992
----------- ---- ---- ------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD .. $15.062 $13.823 $11.752 $11.348 $10.177 $10.377
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income ................. 0.042 0.016 0.014 0.013 0.086 0.128
Net Realized and Unrealized Gain
(Loss) on Investments ............... 1.512 1.647 2.872 1.119 1.679 (0.319)
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ........ 1.554 1.663 2.886 1.132 1.765 (0.191)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From Net Investment Income ............ (0.000) (0.064) (0.000) (0.023) (0.091) (0.009)
In Excess of Net Investment Income .... (0.000) (0.000) (0.000) (0.000) (0.007) (0.000)
From Net Realized Capital Gains ....... (0.000) (0.360) (0.815) (0.698) (0.496) (0.000)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.007) (0.000) (0.000)
------- ------- ------- ------- ------- -------
Total Distributions ................... (0.000) (0.424) (0.815) (0.728) (0.594) (0.009)
------- ------- ------- ------- ------- -------
NET ASSET VALUE AT END OF PERIOD ........ $16.616 $15.062 $13.823 $11.752 $11.348 $10.177
======= ======= ======= ======= ======= =======
TOTAL RETURN (2) (3) .................... 10.36%(4) 12.33% 24.32% 10.02% 17.32% (1.83)%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's) ... $26,651 $24,534 $18,191 $11,500 $12,230 $ 9,280
Ratio of Operating Expenses to
Average Net Assets (5) .............. 1.20%(6) 1.20% 1.20% 1.20% 1.20% 1.20%
Ratio of Operating Expenses to
Average Net Assets before Expense
Reductions (7) ...................... 1.20%(6) 1.20% 1.20% - - -
Ratio of Net Investment Income to
Average Net Assets .................. 0.53%(6) 0.96% 0.12% 0.16% 0.92% 1.34%
Portfolio Turnover Rate ............... 48.75%(4) 61.14% 97.85% 110.12% 78.50% 103.43%
Average Commission per Share (8) ...... $ 0.01 $ 0.02 - - - -
</TABLE>
(1) On April 1, 1994, FVAS became investment adviser. Prior to that date,
results were achieved by former investment advisers.
(2) Total returns would have been lower had certain expenses not been borne by
the adviser or its affiliates.
(3) The performance of the Portfolio shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(4) Not annualized.
(5) Net Investment Income is after payment or reimbursement of certain expenses
by affiliates in 1997, 1996 and 1995 and waiver of business management fee
and payment or reimbursement of certain other expenses by affiliates in
1994, 1993 and 1992. (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: 1997 - 1.40%; 1996 - 1.49%;
1995 - 1.67%; 1994 - 2.22%; 1993 - 1.79% and 1992 - 2.26%.
(6) Annualized.
(7) For fiscal years ending after September 1, 1995, the Portfolio is required
to calculate an expense ratio without expense reductions.
(8) 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
See notes to financial statements.
76
<PAGE> 78
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (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 Growth Portfolio (formerly the Common Stock
Portfolio), the Growth & Income Portfolio, the High Income Bond Portfolio, the
Matrix Equity Portfolio (formerly the Tilt Utility Portfolio), the Multiple
Strategies Portfolio, the Small Cap Growth Portfolio, (formerly the Small Cap
Portfolio), the U.S. Government Bond Portfolio, and the World Equity Portfolio.
As of June 30, 1997, 96.4% of the assets of the Trust are owned by First
Variable Life Insurance Company ("First Variable") and 3.6% of the assets of the
Trust are owned by Monarch Life Insurance Company ("MLIC"), through separate
accounts maintained by First Variable and MLIC, respectively.
Effective May 1, 1997, the names of the Common Stock Portfolio, the Small
Cap Portfolio and the Tilt Utility Portfolio were changed to the Growth
Portfolio, the Small Cap Growth Portfolio and the Matrix Equity Portfolio,
respectively.
NOTE B -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements.
ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
VALUATION OF INVESTMENTS: The Trust's equity securities, including American
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.
77
<PAGE> 79
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
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.
INVESTMENT TRANSACTIONS: Investment security transactions are recorded on
the date of purchase, sale, or maturity. Dividend income is recorded on the
ex-dividend date, or, in the case of dividend income on foreign securities, on
the ex-dividend date or when the Trust becomes aware of its declaration.
Interest income is recorded on the accrual basis. Realized gains and losses from
security transactions are determined on the basis of identified cost.
FOREIGN CURRENCY TRANSLATIONS: The records of the Trust are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at a
current rate of exchange of such currency to determine the value of investments,
other assets and liabilities on the date of any determination of net asset value
of the Portfolios. Purchases and sales of securities and income and expenses are
converted at the prevailing rate of exchange on the respective dates of such
transactions. Net realized gain/(loss) on foreign currency includes net realized
currency gains and losses recognized between accrual and payment dates. The
Portfolios do not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments.
FORWARD FOREIGN CURRENCY CONTRACTS: Upon the purchase or sale of a security
denominated in foreign currency the Trust may enter into a forward currency
exchange contract for the purchase or sale, for a fixed amount of U.S. dollars,
of an amount of the foreign currency required to settle the security transaction
in order to hedge against a change in the foreign currency exchange rate.
Accordingly, the Trust would not realize currency gains or losses between the
trade and settlement dates on such security transactions. A Portfolio may engage
in position hedging to protect against a decline in value relative to the U.S.
dollar of the currencies in which their portfolio securities are denominated or
quoted.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Trust on each day and the resulting net unrealized
appreciation (depreciation) and related net receivable (payable) amount are
determined by using foreign currency exchange rates supplied by a quotation
service.
Realized gain (loss) includes net gains or losses realized by the Trust on
contracts which have matured or which the Trust has terminated by entering into
an offsetting closing transaction.
FORWARD COMMITMENTS: To secure prices or yields deemed advantageous at a
particular time, each Portfolio of the Trust may enter into a forward commitment
in which a Portfolio agrees on trade date to either make or receive delivery
against payment for securities on a delayed delivery basis. The price and
interest rate of such securities are fixed at trade date. For forward commitment
purchases, the Portfolio does not earn interest on such security until
settlement date.
FEDERAL INCOME TAXES: Each Portfolio of the Trust is treated as a separate
entity for federal tax purposes. Each Portfolio of the Trust has qualified and
intends to continue to qualify each year as a "regulated investment company"
under Subchapter M of the Internal Revenue Code, as amended. By so qualifying,
the Portfolios of the Trust will not be subject to federal income taxes to the
extent that they distribute all of their taxable income, including realized
capital gains, for the fiscal year. In addition, by distributing during each
calendar year substantially all of their net investment income, capital gains
and certain other amounts, if any, the Portfolios of the Trust will not be
subject to a federal excise tax.
78
<PAGE> 80
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
As of December 31, 1996, the High Income Bond Portfolio had a realized
capital loss carryforward, for Federal income tax purposes, of $344,480
($291,888 expires on December 31, 2002, $52,592 expires on December 31, 2003),
available to be used to offset future realized capital gains.
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 Growth
and Multiple Strategies Portfolios, Strong Capital Management, Inc. as
sub-adviser to the U.S. Government Bond Portfolio and State Street Bank and
Trust Company through its investment management division State Street Global
Advisors as sub-adviser to the Matrix 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 Growth Portfolio and Warburg, Pincus Counsellors, Inc. as
sub-adviser to the Growth & Income Portfolio. FVAS retained the following
sub-adviser at its own cost and expense pursuant to a sub-advisory agreement
dated December 9, 1996: Keystone Investment Management Company as sub-adviser to
the World Equity 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: 0.50% 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; 0.70% of average daily
net assets for the Growth and the Multiple Strategies Portfolios; 0.75% of
average daily net assets for the Growth & Income 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
79
<PAGE> 81
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
Income Bond Portfolio; 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
Matrix Equity Portfolio; 0.85% of average daily net assets for the Small Cap
Growth 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; 0.70% 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.
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, 1998 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 six months ended
June 30, 1997, the Trust's expenses were reduced by $3,019.
TRUSTEES' COMPENSATION
Trustees' fees of $10,000 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 six months ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
Non- Non-
Government Government Government Government
Purchases Purchases Sales Sales
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Cash Management Portfolio .... $85,265,000 $1,259,138 $85,306,000 $9,410,000
Growth Portfolio ............. 11,436,262 0 12,174,293 0
Growth & Income Portfolio .... 20,737,549 269,307 16,892,076 386,212
High Income Bond Portfolio ... 7,655,444 707,227 5,484,241 493,125
Matrix Equity Portfolio ...... 14,047,173 0 15,573,285 0
Multiple Strategies Portfolio 5,403,894 0 4,519,144 522,861
Small Cap Growth Portfolio ... 8,814,219 0 4,571,402 0
U.S. Government Bond Portfolio 1,874,874 4,008,659 2,214,022 5,049,528
World Equity Portfolio ....... 11,813,510 0 13,443,860 0
</TABLE>
80
<PAGE> 82
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
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, 1997 were as follows:
<TABLE>
<CAPTION>
Gross Unrealized Net Unrealized
Identified Cost Appreciation (Depreciation) Appreciation
--------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
Cash Management Portfolio .... $ 749,976 $ 0 $ 0 $ 0
Growth Portfolio ............. 41,735,496 21,485,364 (820,398) 20,664,966
Growth & Income Portfolio .... 14,753,428 1,397,592 (107,162) 1,290,430
High Income Bond Portfolio ... 14,123,466 1,040,643 (132,722) 907,921
Matrix Equity Portfolio ...... 12,511,820 1,385,413 (183,251) 1,202,162
Multiple Strategies Portfolio 27,499,597 8,489,096 (452,767) 8,036,329
Small Cap Growth Portfolio ... 14,863,777 3,607,523 (755,636) 2,851,887
U.S. Government Bond Portfolio 9,496,557 84,526 (62,467) 22,059
World Equity Portfolio ....... 21,112,486 6,272,825 (408,000) 5,864,825
</TABLE>
The aggregate cost of each Portfolio's investments was substantially the same
for book and federal income tax purposes at June 30, 1997.
NOTE E -- TRUST SHARE TRANSACTIONS
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
----------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
CASH MANAGEMENT PORTFOLIO
Shares sold .................... 410,627 $ 411,367 34,085,496 $ 34,085,496
Shares issued to shareholders in
reinvestment ................. 17,460 17,460 574,728 574,728
---------- ----------- ---------- ------------
428,087 428,827 34,660,224 34,660,224
Shares repurchased ............. (8,696,281) (8,696,281) (35,832,335) (35,832,335)
---------- ----------- ---------- ------------
Net decrease ................... (8,268,194) $(8,267,454) (1,172,111) $ (1,172,111)
========== =========== ========== ============
GROWTH PORTFOLIO
Shares sold .................... 205,805 $ 6,484,753 424,439 $ 12,507,958
Shares issued to shareholders in
reinvestment ................. 0 0 105,176 3,227,017
---------- ----------- ---------- ------------
205,805 6,484,753 529,615 15,734,975
Shares repurchased ............. (217,505) (6,838,007) (407,036) (11,993,935)
---------- ----------- ---------- ------------
Net (decrease) increase ........ (11,700) $ (353,254) 122,579 $ 3,741,040
========== =========== ========== ============
GROWTH & INCOME PORTFOLIO
Shares sold .................... 382,020 $ 5,049,542 648,884 $ 8,072,912
Shares issued to shareholders in
reinvestment ................. 0 0 7,099 88,565
---------- ----------- ---------- ------------
382,020 5,049,542 655,983 8,161,477
Shares repurchased ............. (84,022) (1,107,037) (125,254) (1,536,470)
---------- ----------- ---------- ------------
Net increase ................... 297,998 $ 3,942,505 530,729 $ 6,625,007
========== =========== ========== ============
</TABLE>
81
<PAGE> 83
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
----------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
HIGH INCOME BOND PORTFOLIO
Shares sold .................... 556,313 $ 5,195,697 980,079 $ 9,025,755
Shares issued to shareholders in
reinvestment ................. 0 0 89,263 817,769
-------- ----------- ---------- ------------
556,313 5,195,697 1,069,342 9,843,524
Shares repurchased ............. (498,565) (4,701,719) (690,441) (6,284,422)
-------- ----------- ---------- ------------
Net increase ................... 57,748 $ 493,978 378,901 $ 3,559,102
======== =========== ========== ============
MATRIX EQUITY PORTFOLIO
Shares sold .................... 23,098 $ 366,044 198,705 $ 3,085,526
Shares issued to shareholders in
reinvestment ................. 0 0 69,597 1,065,932
-------- ----------- ---------- ------------
23,098 366,044 268,302 4,151,458
Shares repurchased ............. (132,206) (2,050,077) (341,137) (5,287,328)
-------- ----------- ---------- ------------
Net decrease ................... (109,108) $(1,684,033) (72,835) $ (1,135,870)
======== =========== ========== ============
MULTIPLE STRATEGIES PORTFOLIO
Shares sold .................... 187,540 $ 2,438,944 1,191,576 $ 16,014,171
Shares issued to shareholders in
reinvestment ................. 0 0 272,676 3,482,144
-------- ----------- ---------- ------------
187,540 2,438,944 1,464,252 19,496,315
Shares repurchased ............. (177,494) (2,291,128) (1,144,091) (15,266,057)
-------- ----------- ---------- ------------
Net increase ................... 10,046 $ 147,816 320,161 $ 4,230,258
======== =========== ========== ============
SMALL CAP GROWTH PORTFOLIO
Shares sold .................... 482,789 $ 6,988,989 848,253 $ 12,925,499
Shares issued to shareholders in
reinvestment ................. 0 0 2,623 40,086
-------- ----------- ---------- ------------
482,789 6,988,989 850,876 12,965,585
Shares repurchased ............. (246,175) (3,589,739) (292,589) (4,445,800)
-------- ----------- ---------- ------------
Net increase ................... 236,614 $ 3,399,250 558,287 $ 8,519,785
======== =========== ========== ============
U.S. GOVERNMENT BOND PORTFOLIO
Shares sold .................... 32,664 $ 326,620 240,394 $ 2,471,577
Shares issued to shareholders in
reinvestment ................. 0 0 82,843 829,433
-------- ----------- ---------- ------------
32,664 326,620 323,237 3,301,010
Shares repurchased ............. (176,359) (1,757,075) (348,609) (3,611,963)
-------- ----------- ---------- ------------
Net decrease ................... (143,695) $(1,430,455) (25,372) $ (310,953)
======== =========== ========== ============
</TABLE>
82
<PAGE> 84
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 1997 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997 Year Ended
(Unaudited) December 31, 1996
----------------------- ----------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
WORLD EQUITY PORTFOLIO
Shares sold .................... 155,083 $ 2,331,332 872,836 $ 12,579,417
Shares issued to shareholders in
reinvestment ................. 0 0 45,499 667,451
-------- ----------- -------- ------------
155,083 2,331,332 918,335 13,246,868
Shares repurchased ............. (180,109) (2,710,849) (605,395) (8,688,488)
-------- ----------- -------- ------------
Net (decrease) increase ........ (25,026) $ (379,517) 312,940 $ 4,558,380
======== =========== ======== ============
</TABLE>
NOTE F -- FORWARD FOREIGN CURRENCY CONTRACT
As of June 30, 1997 the World Equity Portfolio had open seven forward
foreign currency contracts which contractually obligate 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>
430,901 Australian Dollars 07/09/97 $ 325,678 $ 334,000 $ 8,322
4,778,534 French Francs 08/06/97 815,173 826,000 10,827
848,033 German Marks 08/20/97 488,034 503,000 14,966
284,544,135 Japanese Yen 07/28/97 2,493,119 2,286,000 (207,119)
919,681 Netherland Guilder 08/20/97 470,208 485,000 14,792
352,231 Pound Sterling 08/20/97 585,689 575,000 (10,689)
704,247 Swiss Francs 08/20/97 485,304 498,000 12,696
---------
$(156,205)
=========
</TABLE>
NOTE G - PORTFOLIO LIQUIDATION
On January 2, 1997, First Variable redeemed its entire position of
8,214,891.968 shares in the Cash Management Portfolio and transferred it to the
Federated Prime Money Fund II after receiving approval of the substitution from
the Securities and Exchange Commission ("SEC"). MLIC is also in the process of
applying to the SEC for exemptive relief regarding the redemption of its shares
in the Portfolios. After MLIC receives approval from the SEC and redeems its
shares, the Cash Management Portfolio will be liquidated.
83
<PAGE> 85
PRINCIPAL OFFICERS AND TRUSTEES OF
VARIABLE INVESTORS SERIES TRUST
----------------
Paul G. Chenault, Trustee
Norman A. Fair, Trustee
Wesley E. Horton, Trustee
W. Lawrence Howe, Trustee
Laird E. Wiggin, Trustee
Stephan M. Largent, President and Trustee
Arnold R. Bergman, Secretary
Mark T. Kelly, Treasurer
----------------
INVESTMENT ADVISER
FIRST VARIABLE ADVISORY SERVICES CORP.
----------------
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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.
- --------------------------------------------------------------------------------
