<PAGE> 1
VARIABLE INVESTORS
SERIES TRUST
[PHOTO]
June 30, 2000 Semi-Annual Report
[BUILD, ENJOY, PRESERVE LOGO(SM)]
[ILONA FINANCIAL GROUP LOGO]
<PAGE> 2
TABLE
OF [BUILD, ENJOY, PRESERVE LOGO]
CONTENTS
Report of the President 2
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Management's Discussion & Analysis
Small Cap Growth 3
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World Equity 5
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Growth 7
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Matrix Equity 9
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Growth & Income 11
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Multiple Strategies 13
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High Income Bond 15
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U.S. Government Bond 17
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Schedule of Investments 19
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Statements of Assets and Liabilities 54
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Statements of Operations 56
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Statements of Changes in Net Assets 58
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Financial Highlights 62
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Notes to the Financial Statements 70
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<PAGE> 3
[FIRST VARIABLE LIFE INSURANCE COMPANY LOGO]
August 2000
Dear First Variable Contract Holder:
I am pleased to present the semi-annual report for the Variable Investors Series
Trust. This report gives you information on how the investment choices inside
your First Variable Contract have performed over the past year.
During the first half of 2000, the broader equity markets generated negative
total returns. The Standard & Poor's 500 Index was down by -0.43%, the NASDAQ
fell -2.54% and the Dow Jones Industrial Average dropped -6.04%. Smaller stocks,
on the other hand, experienced a rebound. The Russell 2000 finished up 3.03%,
and the disciplined strategy of our Small Cap Growth Portfolio soared to 26.25%
year-to-date through June 30, 2000.
The Federal Reserve raised again rates by 50 basis points on May 16th in
response to concerns about the economy's robust growth. Not yet affected by this
change, the Lehman Brothers Government Bond Index returned 4.96% year-to-date
through June 30, 2000.
The high yield market, however, underperformed the higher quality bond market
due to concerns about credit risk, a potential business slowdown and selling
pressure on the market. The First Boston High Yield Index finished the first
half of the year at -1.21%.
This period is an excellent illustration of the way in which different markets
experience substantially varying performance at the same time. The best strategy
through these times is a well-diversified portfolio. Your financial professional
has the experience and tools to help you construct a portfolio that meets your
investment goals and objectives.
We appreciate your business and continued confidence in us. First Variable Life
has been helping investors like you BUILD wealth, ENJOY income and PRESERVE
assets since 1968. We look forward to serving you in the future.
Sincerely,
/s/ John M. Soukup
John M. Soukup
President, Variable Investors Series Trust
<PAGE> 4
SMALL CAP GROWTH PORTFOLIO PILGRIM BAXTER &
ASSOCIATES, LTD.
[PILGRIM BAXTER & ASSOCIATES LOGO]
OBJECTIVE
Seeks capital appreciation by investing primarily in common stocks of emerging
companies with the potential for significant capital appreciation and strong
earnings growth with attendant risk. The Portfolio normally invests at least 65%
of assets in common stocks and convertible securities issued by companies with
market capitalization or annual revenues not exceeding $1 billion at the time of
purchase.
MANAGEMENT'S
DISCUSSION & ANALYSIS
Up and down. Right and left. Back and forth. This may sound like your last
experience on the American Eagle of Six Flags, but it is actually meant to
portray the daily minutia of the market. However you want to describe it, Wall
Street has not been able to sit still in the first half of the year -- at
certain times, the movement felt like a calm waltz up the valuation scale, other
times it felt like the impending "perfect storm." Charging straightforward is
never a guarantee on the Street of Dreams, but the first six months of the new
millennium have proven to be quite elusive in the directions department. Hot and
cold economic data has served only to solidify one aspect of today's market:
continued volatility. Peering back into 1999, we see where the seeds of today's
market were sown.
A bi-polar, dual personality market prevailed throughout most of 1999 -- either
large worked or small worked, either value was in vogue or growth graced the
cover, either the new economy was taking over or the old economy had begun its
long anticipated renaissance. The backdrop consisted of low inflation, low
unemployment (reaching 30 year lows), and world economies on the mend -- the
euphemistic Goldilocks economy was unfolding right before our very eyes. In the
foreground, the narrowness of the market reached endemic proportions and the
premiums that were being paid for liquidity were deeper than in the 1987 crash.
Being a small cap manager in early 1999 seemed like you were on the wrong side
of an ancient voodoo curse.
You could not have been within an earshot of Wall Street and not heard the
thundering roar of the technology stocks as 1999 drew to a close. However, few
investors remained unnerved by the
SMALL
CAP GROWTH
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 116.71%
------------------------------
5 Year 27.53%
------------------------------
Since Inception* 28.81%
</TABLE>
*May 4, 1995
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
<S> <C> <C>
Extreme Networks, Inc. 2.53% 11.83%
---------------------------------------------------------
Digital Lightwave, Inc. 2.41% 11.28%
---------------------------------------------------------
PC Connection, Inc. 2.31% 10.79%
---------------------------------------------------------
Newport Corporation 2.17% 10.16%
---------------------------------------------------------
Diamond Technology Partners, Inc. 2.14% 10.03%
---------------------------------------------------------
Keithley Instruments, Inc. 2.12% 9.92%
---------------------------------------------------------
Anaren Microwave, Inc. 2.11% 9.89%
---------------------------------------------------------
Mercury Interactive Corporation 2.10% 9.83%
---------------------------------------------------------
Celgene Corporation 1.74% 8.15%
---------------------------------------------------------
Micromuse, Inc. 1.74% 8.12%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% of
As of 6/30/00 Net Assets
<S> <C>
Electronic Components 17.1%
--------------------------------------
Telecommunication Equipment 9.8%
--------------------------------------
Drugs/Pharmaceuticals 9.3%
--------------------------------------
Computer Related 7.5%
--------------------------------------
Medical Products & Supplies 4.7%
</TABLE>
Special risks due to small size such as limited markets and financial resources
should be considered when investing in small cap stocks.
3
<PAGE> 5
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
swift bursts and tumbles of individual stocks over the full year. Price
volatility, now a seemingly permanent fixture, grew greater than ever and
outsized relative to the actual event triggers. With north of 45% of the
portfolio in technology companies (not atypical for a sector feature rich in the
characteristic set we strive to own), we were able to garner our fair share of
the upside volatility. As the Wall Street Journal reported, "tech stocks aren't
just leading the rest of the market, they are practically suffocating it."
Have we mentioned volatility? Webster's defines volatility as the "trait of
being unpredictably irresolute." 2000 began with a very healthy (read: painful)
dose of reality. Your computer worked and the world was still standing, but the
hangover from December hit quickly. Our heavy exposure to tech was the main
culprit for our underperformance to the benchmark in January. The markets manic
behavior had seemingly intensified in the early part of 2000 as February's
performance was nothing short of stunning. We showed sufficient outperformance
in the first quarter, but again, there seemed to be a lot of heavy lifting
ahead. The Street has become myopic on what the Fed is doing. The "i" word for
2000 is inflation, and the market is deathly afraid of having too much of this
one, after nearly choking on too much of 1999's "i" word (the Internet).
For the six months ended June 30, our portfolio has outperformed the Russell
2000 Growth Index by 2,320 basis points. The tech wreck that began on March 10
ran its course and bottomed around Memorial Day weekend. Successfully navigating
the turmoil within technology (read: buying great companies at blue light
special prices) and having exposure to some very dynamic medical device
companies has benefited the portfolio. We are fond of saying internally that we
own growth for growth's sake, whether it comes from a wireless infrastructure
company (ANEN -- Aneren Microwave) or donuts (KREM -- Krispy Kreme).
As we have witnessed over the last six months, the market almost always
guarantees to be unpredictable and temperamental. What has worked so well for us
over the better part of the past two decades is a tendency to be methodical,
calculated and consistent in the application of our discipline and philosophy.
We plan on staying true to our mandate and you should expect nothing less. As
Alan Greenspan tactfully put it: "...the economic forces behind the current
expansion could either be the result of a once-in-a-century acceleration of
innovation or one of the many euphoric speculative bubbles that have dotted
human history." The present tug-of-war shows no signs of declaring a victor just
yet. What is for certain is that all stocks are subject to increasing gyrations,
up and down, with gut wrenching intensity.
We believe small capitalization stocks continue to be well situated in the
present environment. Showing increasing signs of business momentum and superior
growth rates; small caps are quietly positioning themselves to garner more
attention within the investment community. With relative valuations still
attractive, superior growth rates starting to surface and an enormous amount of
capital to repatriate from those that drifted away, it's hard not to have a
constructive outlook on stocks of smaller companies. Though obviously not immune
from the factors that drive the macroeconomic landscape, we continue to stay
focused on the country's fastest growing small stocks. In times of turmoil,
survival often depends on a consistent application of a proven philosophy.
That's our mantra and our mandate. The market has shown a growing aptitude for
fickleness, and we would expect nothing less in the coming months.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE SMALL CAP GROWTH
PORTFOLIO AND THE RUSSELL 2000 INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST SMALL CAP GROWTH RUSSELL 2000 INDEX
<S> <C> <C>
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 $12,600
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
SEP 30 $18,778 $17,984
DEC 31, 1997 $16,703 $17,382
MAR 31 $18,207 $19,127
JUN 30 $16,690 $18,234
SEP 30 $12,902 $14,560
DEC 31, 1998 $16,181 $16,934
MAR 31 $15,120 $16,015
JUN 30 $17,031 $18,505
SEP 30 $18,331 $17,335
DEC 31, 1999 $29,234 $20,534
MAR 31 $35,305 $21,988
JUN 30, 2000 $36,908 $21,157
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Years Portfolio***
---- ----- ------------
<S> <C> <C> <C>
Small Cap Growth Portfolio 116.71% 27.53 28.81%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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)
4
<PAGE> 6
WORLD EQUITY PORTFOLIO EVERGREEN
INVESTMENT
MANAGEMENT
[EVERGREEN INVESTMENT MANAGEMENT LOGO]
OBJECTIVE
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. This objective per First Variable's
instruction, is to be obtained via international "blue chips" and domestic U.S.
small cap stocks.
MANAGEMENT'S
DISCUSSION & ANALYSIS
The performance for the fund year-to-date is 8.41%. This compares with our 50%
domestic 50% international benchmark return of -0.85%. Both the international
and domestic portions of the portfolio outperformed the benchmark.
INTERNATIONAL COMMENTARY
The international portion of the portfolio is divided into both "growth" and
"value" sectors. About 60% is currently growth, and 40% is currently value. This
practice of including both growth and value stocks has the effect of dampening
volatility over the long term, because it takes less style bias risk. However,
in periods when one style is heavily in favor, such as "growth" in 1999, the
portfolio's return is more moderate. The international has been fairly defensive
this year due to factors increasing global volatility, which included slow
recovery in Japan, higher interest rates globally, higher energy prices, and
greater US equity market volatility.
As a result, we have during the year, been underweight Japan, overweight Canada,
and held moderate emerging markets exposure. Recently, we have been reducing
exposure to the telecom services sector in Europe due to high valuations and low
cash flow expectations looking ahead. Hedges on the yen and sterling were lifted
during April, and currently, there is one hedge on our Canadian exposure. Other
currencies remain unhedged.
DOMESTIC COMMENTARY
A strong return in the domestic portion masked a
WORLD
EQUITY
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 55.36%
--------------------------------
5 Year 19.80%
--------------------------------
10 Year 12.71%
</TABLE>
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
<S> <C> <C>
Myriad Genetics, Inc. 1.89% 11.88%
-------------------------------------------------------
Schering AG 1.71% 10.73%
-------------------------------------------------------
Documentum, Inc. 1.64% 10.27%
-------------------------------------------------------
Three-Five Systems, Inc. 1.60% 10.02%
-------------------------------------------------------
Enzo Biochem, Inc. 1.59% 9.96%
-------------------------------------------------------
Tollgrade Communications, Inc. 1.58% 9.92%
-------------------------------------------------------
Cal Dive International, Inc. 1.57% 9.85%
-------------------------------------------------------
Netegrity, Inc. 1.54% 9.67%
-------------------------------------------------------
Pharmacopeia, Inc. 1.46% 9.18%
-------------------------------------------------------
Triton Energy Ltd. 1.36% 8.52%
</TABLE>
TOP 5 COUNTRIES
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
<S> <C>
United States 52.1%
---------------------------
Japan 10.6%
---------------------------
United Kingdom 6.6%
---------------------------
France 5.8%
---------------------------
Germany 5.5%
</TABLE>
Special risks such as currency fluctuations and political changes should be
considered when investing internationally.
5
<PAGE> 7
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
high degree of volatility within the period. Health and technology were very
strong until the end of February, and very weak thereafter. In March the market
began to recognize the wide valuation disparity between "New Economy" and "Old
Economy" stocks. With a broader section of the market performing well, money
flows went out of technology. The market was very choppy the second quarter. The
first half of the quarter was dominated by concerns over high valuations and the
possible effects of a slowing economy on earnings. At the end of May, investors
began to anticipate the possibility that rate hikes may be ending, and growth
stocks returned to favor.
The fund outperformed due to our overweighting in health technology (up 33%) and
electronic technology (up 22%). The expanding opportunities in mobile
communications represented the primary underlying driver. We also had strong
performance in health care. Detracting from performance was disappointing price
action in telecommunication service providers. Near quarter end, we
significantly increased our weighting in biotechnology.
While the concerns of investors regarding valuation, interest rate hikes, and
cyclical earnings slowdowns are still quite valid, emphasis has shifted to the
perception that a gentle slowdown and abating inflationary pressures are
beginning to occur. A slowing economy favors stocks with non-economically
sensitive earnings, such as health care. With growth becoming more scarce, areas
of high growth become even more desirable, such as technology. This is a great
environment for the types of stocks the funds invests in! With the speed the
market moves, it is difficult to say how long this period will last, but we hold
a very positive outlook as we enter the second half of the year.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE WORLD EQUITY
PORTFOLIO AND THE MSCI WORLD INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST WORLD EQUITY MSCI WORLD INDEX
<S> <C> <C>
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 $14,956 $13,666
MAR 31 $14,544 $13,749
JUN 30 $16,506 $15,728
SEP 30 $17,645 $16,022
DEC 31, 1997 $16,449 $15,391
MAR 31 $18,896 $17,595
JUN 30 $19,078 $17,952
SEP 30 $15,329 $15,799
DEC 31, 1998 $17,289 $19,135
MAR 31 $17,070 $20,281
JUN 30 $18,755 $21,481
SEP 30 $18,792 $21,164
DEC 31, 1999 $26,877 $24,734
MAR 31 $30,178 $24,989
JUN 30, 2000 $29,138 $24,104
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
World Equity Portfolio 55.36% 19.80% 12.71%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
6
<PAGE> 8
GROWTH PORTFOLIO VALUE LINE, INC.
[VALUE LINE, INC. LOGO]
OBJECTIVE
Seeks capital growth by investing primarily in common stocks and securities
convertible into common stock. Also seeks current income when consistent with
the primary objective. Securities are selected on the basis of their issuers'
long-term potential for expanding their earnings, profitability, and size and on
the basis of potential increases in market recognition of their securities.
MANAGEMENT'S
DISCUSSION & ANALYSIS
PORTFOLIO PERFORMANCE
For the six months ended June 30, 2000, the Value Line Growth Portfolio
generated a solid total investment return of (0.29%), compared with larger
negative total returns produced by the broad equity market indices. The S&P 500
was down by -0.43%, the NASDAQ Composite declined by -2.54%, and the Dow Jones
Industrial Average dropped by -6.04%.
The Growth Portfolio enjoyed an excellent first half of 2000, as the fund was
both fully invested (95% in stocks, 5% in cash) and had wide diversification
among a number of market sectors, including technology, telecommunications,
pharmaceuticals, biotechnology, retail, cyclicals, and financial-service stocks.
Our disciplined bottom-up stock selection contributed significantly to our solid
investment returns, as we focused on companies offering the potential for
well-above-average earnings growth, combined with attractive relative valuation
profiles.
Importantly, we positioned the Growth Portfolio with many of the Blue Chip,
large-cap technology and telecommunications companies, which we believed were
poised to benefit from Herculean efforts both here and abroad to gain Y2K
compliance.
However, we had correctly forecast that the dire, doomsday Y2K scenarios --
which many investors had been spinning with regard to both the domestic and
global failure to successfully orchestrate the millennium calendar changeover --
were hugely overblown. As a result, we surmised that excessive inventory
stockpiles -- which had been amassed as a precautionary
GROWTH
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 20.58%
-----------------------------------
5 Year 25.72%
-----------------------------------
10 Year 17.35%
</TABLE>
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
<S> <C> <C>
Pfizer, Inc. 6.35% 17.91%
----------------------------------------------------------
Intel Corporation 4.08% 11.52%
----------------------------------------------------------
Sun Microsystems, Inc. 3.74% 10.56%
----------------------------------------------------------
Cisco Systems, Inc. 3.29% 9.29%
----------------------------------------------------------
Time Warner, Inc. 3.18% 8.97%
----------------------------------------------------------
Wal-Mart Stores, Inc. 3.14% 8.85%
----------------------------------------------------------
American International Group, Inc. 2.97% 8.37%
----------------------------------------------------------
Dell Computer Corporation 2.91% 8.22%
----------------------------------------------------------
Scientific-Atlanta, Inc. 2.91% 8.21%
----------------------------------------------------------
America Online, Inc. 2.87% 8.10%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
<S> <C>
Computers & Business Equipment 12.2%
-------------------------------------------
Drugs 9.1%
-------------------------------------------
Computer Software 7.4%
-------------------------------------------
Retail 6.9%
-------------------------------------------
Medical Supplies & Services 5.9%
</TABLE>
7
<PAGE> 9
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
buildup by both consumers and businesses -- would be worked down, which could
result in significantly slower economic growth during the first half of 2000,
perhaps to a level below 4.0%, compared with an unsustainably robust 7.3% in the
fourth quarter of 1999.
Concurrently, the Federal Reserve continued to aggressively tighten monetary
policy. On the heels of three modest 25-basis-point hikes in June, August and
November of 1999, Chairman Alan Greenspan engineered a pair of quarter-point
increases in February and March of this year, trumped by a 50-basis-point
tightening at the May 16th Federal Open Market Committee meeting.
Combined with the inventory reduction, higher interest rates will help to ensure
slower future economic growth. There is a lag, however, between the time that a
change in interest rates is implemented and when its subsequent impact on the
economy starts to become discernable. Much like trying to turn a battleship in
the ocean, it takes about six to nine months for one-half of the effect of an
interest-rate change to begin to impact the economy. Further, it takes about 12
to 18 months for the full effect of that interest-rate change to begin to work
its magic.
As a result, with the first of six rate hikes starting in June 1999 and the most
recent occurring in May 2000, it is perfectly plausible that the economic
slowdown that such policy action would presage is just now starting to become
visible.
Looking forward, we believe that the backup in long rates earlier this year to
about 6.75% should represent the high water mark for calendar 2000, and that the
recent rally back below 6.00% has legs. Specifically, as the inventory stockpile
is further reduced and as the Fed's six rate hikes work their way through the
pipeline, GDP should slow even more -- to perhaps 3.0% by year end -- and the
30-year Treasury bond should continue to rally, with the yield approaching 5.50%
later this year, and perhaps 5.00% during 2001. Given positive corporate
earnings, particularly among technology and telecommunication companies, we
expect an election-year rally that could propel the equity-market indices to new
all-time highs by the end of the year.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GROWTH PORTFOLIO
AND THE S&P 500 INDEX *
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST GROWTH S&P 500 INDEX
<S> <C> <C>
APR 1, 1994 $10,000 $10,000
JUN 30 $ 9,393 $ 9,966
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
SEP 30 $22,475 $22,582
DEC 31, 1997 $21,890 $23,231
MAR 31 $23,984 $26,469
JUN 30 $25,036 $27,342
SEP 30 $22,919 $24,627
DEC 31, 1998 $29,177 $29,868
MAR 31 $32,492 $31,355
JUN 30 $32,459 $33,566
SEP 30 $31,756 $31,471
DEC 31, 1999 $39,253 $36,151
MAR 31 $40,694 $36,979
JUN 30, 2000 $39,139 $35,995
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
Growth Portfolio 20.58% 25.72% 17.35%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
8
<PAGE> 10
MATRIX EQUITY PORTFOLIO STATE STREET
GLOBAL ADVISORS
[SSgA LOGO]
OBJECTIVE
Seeks capital appreciation and current income by investing in a diversified
portfolio of equity securities that is selected on the basis of a proprietary
analytical model.
MANAGEMENT'S
DISCUSSION & ANALYSIS
MARKET COMMENTARY
The Matrix Equity Portfolio slipped a bit in the second quarter with a return of
-3.36% versus the S&P 500 Index return of -2.66%. This leaves the Matrix Equity
Portfolio, down -0.76% for the year vs. the Index down -0.43%.
Overall the model performance was mixed, as the factors exhibited strong
selection skill in April then were ambiguous in May. In June estimate revision
was strong, earnings-to-price was weak, and the other two factors provided
limited insight.
In the second quarter, the durables sector contributed the most
under-performance with overweights in stocks USG Corp and Federal Mogul. Next
was retail with overweights in Tiffany, Federated Department Store and Best Buy
hurting the most. Tiffany traded lower as the market worried that the Fed moves
mentioned above would slow growth and crimp luxury buying. In spite of this,
estimate revisions continue to move higher and earnings-to-price and cash flow
fundamentals remain strong. We are maintaining our over-weight for now.
These sectors were offset by strong performance in technology with overweights
in ADC Telecom and Dell, and underweight in Qualcomm. Estimate revisions have
flattened out for Qualcomm and the value measures are poor. We are maintaining
our max underweight for Qualcomm.
The medical sector also helped with overweight United Healthcare, and drugs
overweight Mallinckrodt. Mallinckrodt (MKG) is a good example of the value of
our ranking system. Strong cash flow and good earnings-to-price levels led us to
overweight MKG in the first quarter. Tyco (TYC) announced a buyout bid in June
for MKG. Industry analysts noted Tyco's sharp eye for value and especially their
emphasis on cash flow in evaluating take-over candidates, similar to our system.
MATRIX
EQUITY
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 5.97%
-------------------------------
5 Year 15.97%
-------------------------------
10 Year 13.25%
</TABLE>
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
<S> <C> <C>
General Electric Company 4.42% 14.16%
------------------------------------------------------------
Intel Corporation 4.22% 13.52%
------------------------------------------------------------
Cisco Systems, Inc. 4.09% 13.08%
------------------------------------------------------------
Microsoft Corporation 3.34% 10.69%
------------------------------------------------------------
Pfizer, Inc. 3.08% 9.86%
------------------------------------------------------------
Dreyfus Cash Management Plus 2.79% 8.94%
------------------------------------------------------------
Exxon Mobil Corporation 2.47% 7.92%
------------------------------------------------------------
Oracle Corporation 2.42% 7.74%
------------------------------------------------------------
Wal-Mart Stores, Inc. 2.37% 7.59%
------------------------------------------------------------
Dell Computer Corporation 2.03% 6.50%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
<S> <C>
Computers & Business Equipment 11.3%
----------------------------------------------
Computer Software 8.2%
----------------------------------------------
Semiconductors 8.1%
----------------------------------------------
Financial Services 6.0%
----------------------------------------------
Drugs 6.0%
</TABLE>
9
<PAGE> 11
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
RESEARCH UPDATE
We are conducting some very exciting research in several areas, a few of which
are focused on improving the consistency of our performance under extreme market
conditions like those we have experienced over the last 18 months and those we
may encounter in the future. Behind these research efforts however is a
continued belief in the soundness of our investment philosophy and ongoing
adherence to our investment process. Research is an integral part of our
investment philosophy and changes to our investment process reflect our
longer-term view and are designed to improve our stock ranking ability and/or
risk control.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE MATRIX EQUITY
PORTFOLIO AND THE S&P 500 INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
MATRIX EQUITY S&P 500 INDEX
<S> <C> <C>
APR 1, 1994 $10,000 $10,000
JUN 30 $ 9,940 $ 9,966
SEP 30 $10,180 $10,380
DEC 31, 1994 $10,009 $10,303
MAR 31 $10,604 $11,305
JUN 30 $11,153 $12,383
SEP 30 $12,369 $13,365
DEC 31, 1995 $13,357 $14,169
MAR 31 $12,989 $14,930
JUN 30 $13,446 $15,599
SEP 30 $12,835 $16,081
DEC 31, 1996 $13,973 $17,420
MAR 31 $13,767 $17,889
JUN 30 $15,284 $21,009
SEP 30 $17,056 $22,582
DEC 31, 1997 $17,054 $23,231
MAR 31 $19,342 $26,469
JUN 30 $19,606 $27,342
SEP 30 $16,940 $24,627
DEC 31, 1998 $20,655 $29,868
MAR 31 $20,933 $31,355
JUN 30 $22,078 $33,566
SEP 30 $20,989 $31,471
DEC 31, 1999 $23,576 $36,151
MAR 31 $24,211 $36,979
JUN 30, 2000 $23,396 $35,955
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
Matrix Equity Portfolio 5.97% 15.97% 13.25%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
10
<PAGE> 12
GROWTH & INCOME PORTFOLIO CREDIT SUISSE
ASSET MANAGEMENT, LLP
[WARBURG PINCUS LOGO]
OBJECTIVE
Seeks long-term growth of capital and income and a reasonable current return by
investing primarily in dividend-paying common stocks, convertibles, and readily
marketable securities that derive their value from common stocks, as well as
fixed income securities. The Portfolio does not strive to maintain a specific
balance of stocks, bonds, and money market instruments. Instead the manager
selects the industry sectors and individual securities he believes have the
highest potential for attractive total returns.
MANAGEMENT'S
DISCUSSION & ANALYSIS
The second quarter was a difficult, and highly volatile, period for the U.S.
stock market, reflecting inflation and interest-rate uncertainties, concerns
over valuations on technology stocks and other factors, such as worries
regarding the wider implications of the government's antitrust suit against
Microsoft. The air of uncertainty aided a number of value stocks, however.
Investors deemed certain relatively inexpensive stocks to be attractive on the
basis of their potential downside protection and their underlying companies'
earnings prospects (to be sure, a number of value stocks continued to languish).
All told, the value group handily outperformed growth-oriented stocks for the
quarter.
The Growth & Income Portfolio had a loss of 0.44% for the three months, vs. a
loss of 2.66% for the S&P 500 Index and a loss of 1.00% for the Lipper Multi-Cap
Value Index. Stocks that helped the portfolio included its energy, health-care
and food & beverage holdings. On the negative side, stocks that hampered the
portfolio included its retail holdings.
We made few noteworthy changes to the portfolio during the period in terms of
sector emphasis or, for that matter, individual holdings. The portfolio's
relatively low "turnover" for the period was consistent with our value-based
stock-selection process, and value investing generally, which typically stresses
a patient approach (momentum investing, by contrast, often generates high
turnover, with investors rotating quickly among market sectors).
The portfolio's largest sector weighting through the period remained the energy
area (16.21% of
GROWTH &
INCOME
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year (10.07)%
-----------------------------------
5 Year 13.35%
-----------------------------------
Since Inception* 13.45%
</TABLE>
*May 31, 1995
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
<S> <C> <C>
BP Amoco Plc. ADR 3.22% 13.30%
---------------------------------------------------------------
Eli Lilly & Corporation 2.84% 11.74%
---------------------------------------------------------------
Keebler Foods Company 2.77% 11.44%
---------------------------------------------------------------
R & B Falcon Corporation 2.59% 10.71%
---------------------------------------------------------------
Lehman Brothers Holdings, Inc. 2.38% 9.84%
---------------------------------------------------------------
Exxon Mobil Corporation 2.16% 8.92%
---------------------------------------------------------------
American Standard Companies, Inc. 2.08% 8.61%
---------------------------------------------------------------
Ingersoll-Rand Company 2.07% 8.53%
---------------------------------------------------------------
Comerica, Inc. 2.05% 8.47%
---------------------------------------------------------------
Total S.A. ADR 2.04% 8.44%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
<S> <C>
Oil & Gas 14.7%
------------------------------
Telecommunications 8.6%
------------------------------
Retail 7.5%
------------------------------
Capital Equipment 7.1%
------------------------------
Banks 6.4%
</TABLE>
11
<PAGE> 13
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
the portfolio as of June 30), where we believe a number of stocks offer
compelling value. We continued to emphasize integrated multinational oil
companies undergoing significant restructurings, for example, as the result of
merger activity. Representative holdings in this regard continued to include BP
Amoco (3.22%) and Exxon Mobil (2.16%). Another energy holding worthy of mention,
and one we added during the quarter, was El Paso Energy (1.24%), which owns
North America's largest natural-gas pipeline system.
We maintained significant exposure to the financial-services and bank and
savings & loans sectors (6.04% and 6.65% of the portfolio, respectively). While
the group continued to be restrained by interest-rate uncertainties, we believe
that certain financial names are compelling, given their relatively low
valuations and a supportive backdrop of global economic growth and stable
inflation. One financial name we added during the quarter was Allied Capital
Corp. (0.89%), an investment company that provides capital to small, rapidly
growing enterprises, among other investment targets.
Within the consumer segment, we maintained a noteworthy position in the retail
sector (7.5%). Notwithstanding the group's difficult quarter, we believe that
retail stocks, and certain names in particular, will benefit over the longer
term from a healthy economy and improved inventory management. We also
maintained exposure to less-cyclical consumer stocks, mostly via the food,
beverages sector (6.2%), where ongoing restructuring programs and a wave of
consolidation activity stand to materially improve earnings going forward.
Elsewhere of note, we modestly raised our weighting in the telecommunications &
equipment sector (8.93%), purchasing CenturyTel (1.19%), a diversified regional
services provider based in Louisiana. We established the position after the
stock declined sharply in April on earnings uncertainties. In our view, the
company's recent acquisitions (which have clouded its near-term earnings
outlook) will prove to be significant sources of earnings improvements over
time.
The rest of the portfolio remained invested across a range of sectors, including
the capital-equipment (7.29%), industrial manufacturing & processing (2.8%),
health-care (4.40%) and pharmaceuticals (4.0%). We remained underweighted in
technology stocks, which we generally deemed to be expensive, though we deemed
certain computer names to be attractive based on factors such as healthy balance
sheets and good unit-growth prospects.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GROWTH & INCOME
PORTFOLIO AND THE S&P 500 INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST GROWTH & INCOME S&P 500 INDEX
<S> <C> <C>
MAY 31,1995 $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
SEP 30 $16,139 $18,660
DEC 31,1997 $16,256 $19,196
MAR 31 $18,120 $21,872
JUN 30 $18,323 $22,593
SEP 30 $15,669 $20,350
DEC 31,1998 $18,282 $24,680
MAR 31 $18,140 $25,910
JUN 30 $21,120 $27,736
SEP 30 $19,428 $26,005
DEC 31,1999 $19,434 $29,872
MAR 31 $19,080 $30,556
JUN 30,2000 $18,997 $29,744
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Life of
Year Year Portfolio***
---- ---- ------------
<S> <C> <C> <C>
Growth & Income Portfolio (10.07)% 13.35% 13.45%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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)
12
<PAGE> 14
MULTIPLE STRATEGIES PORTFOLIO VALUE LINE, INC.
[VALUE LINE LOGO]
OBJECTIVE
Seeks as high a level of total return over an extended period of time as is
consistent with prudent investment risk by investing in equity securities, bonds
and money market instruments in varying proportions, depending upon prevailing
economic and financial market conditions.
MANAGEMENT'S
DISCUSSION & ANALYSIS
For the six months ended June 30, 2000, the Value Line Multiple Strategies
Portfolio lost (0.17%), compared with a blended total investment return of 1.42%
for the composite benchmark, comprised of 60% of the S&P 500 and 40% of the
Lehman Government Corporate Bond Index. The Multiple Strategies Portfolio was
allocated 84% to stocks at mid year, with 12% dedicated to bonds and 4% to cash.
Like the Growth Portfolio, the equity portion of the Multiple Strategies
Portfolio was widely diversified among a number of market sectors, including
technology, telecommunications, pharmaceuticals, biotechnology, retail,
cyclicals, and financial-service stocks. Our disciplined bottom-up stock
selection contributed significantly to our competitive investment returns, as we
focused on companies offering the potential for well-above-average earnings
growth, combined with attractive relative valuation profiles.
The challenging fixed-income environment was particularly nettlesome during the
first quarter, when the yield on the 30-year Treasury bond rose to 6.75%, which
hurt our government and corporate bond positions. As interest rates began to
work lower during the second quarter, our relative performance improved, but the
damage had already been done to our first-period results.
We positioned the equity portion of the Multiple Strategies Portfolio with many
of the Blue Chip, large-cap technology and telecommunications companies that we
believed were poised to benefit from Herculean efforts both here and aboard to
gain Y2K compliance.
MULTIPLE
STRATEGIES
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 17.58%
-----------------------------------------
5 Year 21.51%
-----------------------------------------
10 Year 15.96%
</TABLE>
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
----------------------------------------------------------------------
<S> <C> <C>
Pfizer, Inc. 5.51% 17.47%
----------------------------------------------------------------------
FHLB, 4.875%, 01/22/2002 3.69% 11.69%
----------------------------------------------------------------------
Cisco Systems, Inc. 3.24% 10.27%
----------------------------------------------------------------------
Sun Microsystems, Inc. 3.18% 10.08%
----------------------------------------------------------------------
Intel Corporation 3.05% 9.67%
----------------------------------------------------------------------
FNMA, 5.75%, 06/15/2005 2.70% 8.56%
----------------------------------------------------------------------
Scientific-Atlanta, Inc. 2.66% 8.44%
----------------------------------------------------------------------
Wal-Mart Stores, Inc. 2.63% 8.33%
----------------------------------------------------------------------
America Online, Inc. 2.47% 7.82%
----------------------------------------------------------------------
Microsoft Corporation 2.42% 7.67%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
<S> <C>
Computers & Business Equipment 10.9%
---------------------------------------------------------
Federal Agencies 9.1%
---------------------------------------------------------
Drugs 7.8%
---------------------------------------------------------
Computer Software 6.7%
---------------------------------------------------------
Retail 6.4%
</TABLE>
13
<PAGE> 15
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
Looking forward, we believe that the backup in long rates earlier this year to
6.75% should be the high water mark for calendar 2000, and that the recent rally
back below 6.00% has legs. As the inventory stockpile is further reduced and as
the Fed's six rate hikes work their way through the pipeline, GDP should slow
even more, to perhaps 3.0% by year-end. In addition, the 30-year Treasury bond
should continue its recent rally, with the yield approaching 5.50% later this
year, and perhaps 5.00% during 2001. Given positive corporate earnings,
particularly among technology and telecommunications companies, we expect an
election-year rally that could propel the equity-market indices to new all-time
highs by the end of the year.
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*
[LINE GRAPH]
<TABLE>
<CAPTION>
LEHMAN BROS.
VIST MULTIPLE STRATEGIES GOV'T/CORP BOND INDEX S&P 500 INDEX
<S> <C> <C> <C>
APR 1, 1994 10000 10000 10000
JUN 30 9364 9876 9966
SEP 30 9913 9925 10380
DEC 31, 1994 9974 9962 10303
MAR 31 10475 10458 11305
JUN 30 11845 11136 12383
SEP 30 13154 11343 13365
DEC 31, 1995 13189 11872 14169
MAR 31 13884 11594 14930
JUN 30 14351 11648 15599
SEP 30 15053 11854 16081
DEC 31, 1996 15609 12217 17420
MAR 31 15008 11875 17889
JUN 30 17212 12525 21009
SEP 30 19151 13221 22582
DEC 31, 1997 19011 13991 23231
MAR 31 20379 14191 26469
JUN 30 21223 14792 27342
SEP 30 20032 15525 24627
DEC 31, 1998 24552 15545 29868
MAR 31 26873 15021 31355
JUN 30 26682 14621 33566
SEP 30 26251 14576 31471
DEC 31, 1999 31426 14357 36151
MAR 31 32287 14742 36979
JUN 30, 2000 31376 14956 35995
</TABLE>
* These Indices are unmanaged indices in which investors cannot 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.
AVERAGE ANNUAL TOTAL RETURNS**
PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
Multiple Strategies Portfolio 17.58% 21.51% 15.96%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
14
<PAGE> 16
HIGH INCOME BOND PORTFOLIO FEDERATED INVESTMENT
COUNSELING, INC.
[FEDERATED(SM) LOGO]
OBJECTIVE
Seeks a high level of current income while secondarily seeking capital
appreciation by investing primarily in fixed-income securities, including
corporate bonds and notes, discount bonds, zero-coupon bonds, convertible
securities, and preferred stocks and bonds issued with warrants, which are rated
Baa or below by Moody's or BBB or below by Standard & Poor's or in unrated
securities determined to be of comparable quality.
MANAGEMENT'S
DISCUSSION & ANALYSIS
MARKET COMMENTARY
The high yield market generated unattractive absolute and relative returns for
the 6 months ending June 30, 2000. For example, the Lehman Brothers Aggregate
Bond Index, a measure of high quality bond performance, returned 3.99% during
the period versus -1.21% for the Lehman Brothers High Yield Bond Index. Three
primary reasons accounted for the high yield market's underperformance. First,
credit risk remains high as the default rate for high yield securities ran at a
5.2% annualized rate during the period. Second, the Fed's campaign to slow the
domestic economy has created the possibility that a sustained business slowdown
may be near, which could possibly lead to even higher default rates. Third, high
yield mutual funds experienced substantial redemption activity from January
through May, placing considerable selling pressure on the market. A modest
reversal of shareholder activity in June did lead to a substantial rally in the
market. Illustrating the market's weakness, the yield spread between the Credit
Suisse First Boston High Yield Bond Index and Treasury securities widened from
573 basis points to 728 basis points during the period.
The fund underperformed the Lehman Brothers High Yield Bond Index. Several
factors impacted performance. On the positive side, the fund's underweight in
CCC-rated and below securities aided performance as that sector traded lower in
sympathy with above average default rates and the second quarter weakness in the
NASDAQ.
HIGH INCOME BOND
PERFORMANCE
<TABLE>
AVERAGE ANNUAL TOTAL RETURN AS OF 06/30/00
<S> <C>
1 Year (4.57)%
--------------------------------------------------
5 Year 7.11%
--------------------------------------------------
10 Year 8.75%
</TABLE>
TOP 10 HOLDINGS
<TABLE>
<CAPTION>
% OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
--------------------------------------------------------------------
<S> <C> <C>
Allied Waste North America, Inc.
10.000%, 08/01/2009 2.49% 13.53%
--------------------------------------------------------------------
Premier Parks, Inc.,
10.000%, 04/01/2008 2.04% 11.07%
--------------------------------------------------------------------
Primedia, Inc., Series E, 9.200% 2.01% 10.91%
--------------------------------------------------------------------
Global Crossing Holdings Ltd.,
9.500%, 02/15/2013 2.00 10.88%
--------------------------------------------------------------------
CSC Holdings, Inc.,
9.875%, 02/15/2013 1.81% 9.81%
--------------------------------------------------------------------
Lenfest Communications, Inc.,
8.250%, 02/15/2008 1.76% 9.57%
--------------------------------------------------------------------
NEXTEL Communications, Inc.,
9.375%, 11/15/2009 1.72% 9.32%
--------------------------------------------------------------------
Nextlink Communications, Inc.,
12.250%, 06/01/2009 1.67% 9.06%
--------------------------------------------------------------------
McLeodUSA, Inc.,
10.500% 03/01/2007 1.48% 8.02%
--------------------------------------------------------------------
United International Holdings, Inc.,
10.750%, 02/15/2008 1.44% 7.83%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
-------------------------------------------------------------
<S> <C>
Telecommunications & Cellular 25.5%
-------------------------------------------------------------
Cable Television 14.4%
-------------------------------------------------------------
Consumer Products 5.9%
-------------------------------------------------------------
Broadcast Radio & Television 5.3%
-------------------------------------------------------------
Health Care 5.2%
</TABLE>
High yield bonds are subject to greater risk of principal and income than higher
quality bonds.
15
<PAGE> 17
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
The fund's overweights in the chemical and telecommunications sectors positively
impacted performance. Specific positions in Albecca and R&B Falcon substantially
outperformed the market based on good operating performance while Johnstown
America, Dialog, International Home Foods, Verio and US Xchange announced plans
to be acquired, which led to strong performance by their securities. On the
negative side, the fund's underweight in energy, gaming and BB-rated securities
negatively impacted performance, as did poor performance by Regal Cinema, Dade,
US Office Products and AEI Resources. The fund was also negatively impacted by
asset outflows during the period. This caused the fund to sell into a very weak
market in order to meet shareholder redemptions and reduced overall portfolio
diversification.
Credit and mutual fund flows will dictate the performance of high yield
securities in the near term. We expect default rates to remain around 5 percent
for the balance of 2000 but believe the bulk of the performance impact of
deteriorating credit has already been felt with many issuers trading at
distressed levels. Positive mutual fund inflows in June and the rally they
triggered illustrate the fundamental value in the market. However, for the rally
to continue through the third quarter, credit conditions and mutual fund flows
need to stabilize.
From a portfolio perspective, our largest industry exposure continues to be the
telecommunication sector, given the strong growth characteristics of the segment
coupled with what we believe will be a very healthy merger and acquisition
environment. We have also been maintaining our exposure to the beaten-down
health care segment as specific companies look attractive relative to the
overall market. From an overall market perspective, we believe substantial value
exists in two general areas, selective BB-rated securities which are trading
cheap to historical levels and issuers trading in the $75 to $90 range where
credit fundamentals are stable to improving. We are seeking to capitalize in
these areas while being always cognizant of the overall credit environment.
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE HIGH INCOME BOND
PORTFOLIO, FIRST BOSTON HIGH YIELD INDEX AND THE LEHMAN BROTHERS SINGLE "B"
INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST HIGH INCOME BOND LEHMAN BROTHERS SINGLE FIRST BOSTON HIGH YIELD INDEX
"B" INDEX
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
APR 1, 1994 10000 10000 10000
JUN 30 9906 9856 10010
SEP 30 9879 10014 10198
DEC 31, 1994 9655 10010 10215
MAR 31 10167 10481 10745
JUN 30 10729 11089 11299
SEP 30 11102 11423 11641
DEC 31, 1995 11487 11752 11907
MAR 31 11795 12006 12213
JUN 30 11948 12195 12464
SEP 30 12635 12653 13053
DEC 31, 1996 13123 13211 13523
MAR 31 13269 13405 13694
JUN 30 13931 13984 14259
SEP 30 14621 14641 14919
DEC 31, 1997 14899 14878 15159
MAR 31 15431 15326 15746
JUN 30 15527 15519 15854
SEP 30 14857 14565 14946
DEC 31, 1998 15352 14964 15352
MAR 31 15872 15209 15653
JUN 30 15850 15386 15674
SEP 30 15401 15140 15647
DEC 31, 1999 15633 15455 16022
MAR 31 14997 15255 15503
JUN 30, 2000 15125 15324 15734
</TABLE>
* These Indices are unmanaged indices in which investors cannot 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.
AVERAGE ANNUAL TOTAL RETURNS**
PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
High Income Bond Portfolio (4.57)% 7.11% 8.75%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
16
<PAGE> 18
U.S. GOVERNMENT BOND PORTFOLIO STRONG CAPITAL
MANAGEMENT
[STRONG LOGO]
OBJECTIVE
Seeks current income and preservation of capital. Under normal circumstances, at
least 80% of the Portfolio's assets will be invested in U.S. Government
Securities; the remainder may be invested in investment grade corporate
securities and in cash and money market instruments.
MANAGEMENT'S
DISCUSSION & ANALYSIS
PORTFOLIO PERFORMANCE
The first quarter was somewhat atypical for the government and agency markets.
The Treasury yield curve inverted by roughly 60 basis points between two years
and thirty years. This was the result of two additional Federal Reserve
tightenings of 25 basis points each and the announcement that the U.S.
government would begin buying back some of its $3 trillion of outstanding debt.
For the second quarter, absolute Treasury yields and curve shape were both
remarkably similar from the beginning of the quarter to quarter end. However,
bond market sentiment shifted from a fairly bearish posture to a rather bullish
outlook as the second quarter came to an end. This shift in sentiment can be
attributed to the early signs of an economic slowdown, which subsequently
lowered market expectations for further Federal Funds rate hikes. As the quarter
began, we had just received news that first quarter GDP had grown by 7.3%. This
information, combined with some negative inflation numbers in April, prompted
the Federal Reserve Board to raise the Fed Funds rate by 50 basis points at
their May 16th meeting. However, signs of cooling in the economy during the
month of June caused the Fed to stand pat at their June meeting.
Early in the year, the Fund benefited from its exposure to the long end of the
Treasury market, which was the immediate focus of the buyback program. Prospects
for a significantly lower supply of long duration risk-free debt has created a
shortage of long Treasuries. Additionally, the Fund's emphasis on agency and
mortgage-backed securities added to relative returns, as these outperformed
corporate bonds during the period. Holding the Fund's duration short of the
U.S. GOVERNMENT BOND
PERFORMANCE
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN AS OF 6/30/00
<S> <C>
1 Year 3.80%
-----------------------------------------------
5 Year 5.72%
-----------------------------------------------
10 Year 7.31%
</TABLE>
<TABLE>
<CAPTION>
TOP 10 HOLDINGS % OF % OF
AS OF 6/30/00 NET ASSETS TOP 10
-------------------------------------------------------------
<S> <C> <C>
USTB, 6.125%, 08/15/2029 7.45% 16.16%
-------------------------------------------------------------
Fed. Agric. Mort. Co.
7.013%, 01/25/2003 5.75% 12.49%
-------------------------------------------------------------
USTB, 7.250%, 05/15/2016 5.71% 12.38%
-------------------------------------------------------------
USTN, 6.500%, 02/15/2010 4.38% 9.51%
-------------------------------------------------------------
SLM Student Loan Trust
6.334%, 10/25/2004 4.23% 9.17%
-------------------------------------------------------------
FHLMC, 7.920%, 09/25/2028 4.14% 8.99%
-------------------------------------------------------------
USTN, 6.000%, 08/15/2004 3.75% 8.14%
-------------------------------------------------------------
FNMA, 11.000%, 02/01/2019 3.73% 8.08%
-------------------------------------------------------------
Fed. Agric. Mort. Co.
6.710%, 07/25/2008 3.59% 7.79%
-------------------------------------------------------------
FNMA, 11.500%, 02/01/2019 3.36% 7.29%
</TABLE>
TOP 5 SECTOR WEIGHTINGS
<TABLE>
<CAPTION>
% OF
AS OF 6/30/00 NET ASSETS
-----------------------------------------------------------
<S> <C>
Mortgage Backed Securities 41.1%
-----------------------------------------------------------
U.S. Government Securities 28.3%
-----------------------------------------------------------
Collateralized Mortgage Obligations 9.4%
-----------------------------------------------------------
Non-Agency Mortgages and Asset Backed 6.2%
-----------------------------------------------------------
Federal Agencies 4.5%
</TABLE>
Investment in the U.S. Government Bond Portfolio is not guaranteed by the U.S.
Government.
17
<PAGE> 19
MANAGEMENT'S
DISCUSSION & ANALYSIS (CONTINUED)
benchmark during the first half of the second quarter also contributed
positively to performance.
The market overall is within a 50 basis point trading range and should remain
there barring a negative surprise in the inflation reports. The Federal Reserve
is most likely to raise rates another 25 basis points before year-end. However,
we would not entirely discount the possibility of 50 basis points. The spread
sectors of the market currently remain cheap using historical valuations,
although immediate price gains relative to Treasuries are not foreseen. Perhaps
more importantly, the income advantage offered by these securities makes them a
worthwhile holding in the portfolio.
Strong Investments Inc., IR5365-0700
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE U.S. GOVERNMENT
BOND PORTFOLIO AND THE LEHMAN BROTHERS GOVERNMENT BOND INDEX*
[LINE GRAPH]
<TABLE>
<CAPTION>
VIST U.S. GOV'T BOND LEHMAN BROS. GOV'T. BOND INDEX
--------------------------------------------------------------------------
<S> <C> <C>
Apr 1,1994 10000 10000
Jun 30 9929 9885
Sep 30 9960 9927
Dec 31,1994 9959 9962
Mar 31 10474 10431
Jun 30 11162 11078
Sep 30 11403 11273
Dec 31,1995 11968 11788
Mar 31 11663 11522
Jun 30 11666 11576
Sep 30 11839 11772
Dec 31,1996 12217 12115
Mar 31 12143 11729
Jun 30 12578 12385
Sep 30 13010 12800
Dec 31,1997 13362 13224
Mar 31 13542 13424
Jun 30 13842 13779
Sep 30 14379 14541
Dec 31,1998 14443 14527
Mar 31 14336 14320
Jun 30 14204 14198
Sep 30 14260 14171
Dec 31,1999 14169 13878
Mar 31 14563 14343
Jun 30,2000 14744 14566
</TABLE>
* This Index is an unmanaged index in which investors cannot 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, 2000
<TABLE>
<CAPTION>
Past 1 Past 5 Past 10
Year Years Years
---- ----- -----
<S> <C> <C> <C>
U.S. Government Bond Portfolio 3.80% 5.72% 7.31%
</TABLE>
"Total Return" is calculated including reinvestment of all income dividends and
capital gains 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 distributions. 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. Prior to April 1, 1994, results were
achieved by different portfolio managers.
18
<PAGE> 20
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C>
COMMON STOCKS
CIRCUITS -- (2.6%)
ANADIGICS, Inc. (a) ...................................................... 7,450 $ 253,766
Pericom Semiconductor Corporation (a) .................................... 6,300 428,400
--------------
682,166
COMMERCIAL SERVICES -- (0.7%)
Mobile Mini, Inc. (a) .................................................... 4,400 97,075
Zomax, Inc. (a) .......................................................... 6,600 86,625
--------------
183,700
COMMUNICATION EQUIPMENT -- (4.0%)
Newport Corporation ...................................................... 5,400 579,825
Polycom, Inc. (a) ........................................................ 3,000 282,281
Titan Corporation (a) .................................................... 4,500 201,375
--------------
1,063,481
COMPUTER RELATED -- (7.5%)
Extreme Networks, Inc. (a) ............................................... 6,400 675,200
NVIDIA Corporation (a) ................................................... 5,600 355,950
PC Connection, Inc. (a) .................................................. 10,800 615,600
Silicon Storage Technology, Inc. (a) ..................................... 4,000 353,250
--------------
2,000,000
COMPUTER SOFTWARE -- (2.3%)
Advent Software, Inc. (a) ................................................ 6,100 393,450
Cysive, Inc. (a) ......................................................... 5,200 124,150
PC-Tel, Inc. (a) ......................................................... 2,500 95,000
--------------
612,600
CONSULTING SERVICES -- (0.9%)
Corporate Executive Board Company (a) .................................... 4,100 245,488
--------------
DATA STORAGE -- (2.4%)
M-Systems Flash Disk Pioneers Ltd. (a) ................................... 3,300 256,987
SanDisk Corporation (a) .................................................. 6,400 391,600
--------------
648,587
DRUGS/PHARMACEUTICALS -- (9.3%)
Albany Molecular Research, Inc. (a) ...................................... 2,200 119,763
Aurora Bioscience Corporation (a) ........................................ 3,800 259,112
Celgene Corporation (a) .................................................. 7,900 465,112
Inhale Therapeutic Systems, Inc. (a) ..................................... 1,400 142,056
Invitrogen Corporation (a) ............................................... 3,500 263,211
Jones Pharma, Inc. ....................................................... 5,825 232,636
King Pharmaceuticals, Inc. (a) ........................................... 5,400 236,925
Noven Pharmaceuticals, Inc. (a) .......................................... 7,800 234,488
Titan Pharmaceuticals, Inc. (a) .......................................... 5,000 215,000
United Therapeutics Corporation (a) ...................................... 3,000 325,125
--------------
2,493,428
ELECTRONIC COMMERCE -- (1.1%)
Proxicom, Inc. (a) ....................................................... 6,300 301,613
--------------
</TABLE>
See notes to financial statements.
19
<PAGE> 21
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
ELECTRONIC COMPONENTS -- (17.1%)
Anaren Microwave, Inc. (a) ............................................... 4,300 $ 564,308
California Micro Devices Corporation (a) ................................. 9,000 273,375
Cymer, Inc. (a) .......................................................... 3,800 181,450
DSP Group, Inc. (a) ...................................................... 5,600 313,600
Elantec Semiconductor, Inc. (a) .......................................... 6,000 417,750
Integrated Silicon Solution, Inc. (a) .................................... 8,800 334,400
Keithley Instruments, Inc. ............................................... 6,500 566,312
MKS Instruments, Inc. (a) ................................................ 4,600 179,975
Oak Technology, Inc. (a) ................................................. 15,000 323,437
Power-One, Inc. (a) ...................................................... 2,200 250,663
Silicon Laboratories (a) ................................................. 4,000 212,500
Three-Five Systems, Inc. (a) ............................................. 5,200 306,800
TranSwitch Corporation (a) ............................................... 4,500 347,344
TriQuint Semiconductor, Inc. (a) ......................................... 3,200 306,200
--------------
4,578,114
ELECTRONICS -- (3.3%)
California Amplifier, Inc. (a) ........................................... 2,500 114,375
Credence Systems Corporation (a) ......................................... 4,000 220,750
FEI Company .............................................................. 800 24,400
Kemet Corporation (a) .................................................... 8,600 215,538
Photon Dynamics, Inc. (a) ................................................ 4,200 313,687
--------------
888,750
INDUSTRIAL PRODUCTS & EQUIPMENT -- (1.6%)
Advanced Energy Industries, Inc. (a) ..................................... 3,700 218,069
PRI Automation, Inc. (a) ................................................. 3,200 209,250
--------------
427,319
MACHINERY & EQUIPMENT -- (2.3%)
Asyst Technologies, Inc. (a) ............................................. 10,200 349,350
GaSonics International Corporation (a) ................................... 7,000 276,062
--------------
625,412
MEDICAL PRODUCTS & SUPPLIES -- (4.7%)
ArthroCare Corporation (a) ............................................... 2,700 143,775
Biosite Diagnostics, Inc. (a) ............................................ 5,900 284,306
Molecular Devices Corporation (a) ........................................ 2,800 193,725
ResMed, Inc. (a) ......................................................... 8,000 214,000
Techne Corporation (a) ................................................... 1,900 247,000
Zoll Medical Corporation (a) ............................................. 3,600 176,400
--------------
1,259,206
NETWORKING -- (0.7%)
Proxim, Inc. (a) ......................................................... 1,800 178,144
--------------
NETWORKING SOFTWARE -- (1.7%)
Micromuse, Inc. (a) ...................................................... 2,800 463,356
--------------
PRECISION INSTRUMENTS -- (0.9%)
Zygo Corporation (a) .................................................... 2,600 236,113
--------------
</TABLE>
See notes to financial statements.
20
<PAGE> 22
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
PUBLISHING -- (1.6%)
Forrester Research, Inc. (a) ............................................. 5,800 $ 422,313
--------------
RADIO/TELEVISION -- (0.4%)
Citadel Communications Corporation (a) ................................... 3,100 108,306
--------------
RESTAURANTS -- (2.3%)
Buca, Inc. (a) ........................................................... 15,000 234,375
Krispy Kreme Doughnuts, Inc. (a) ......................................... 2,600 191,100
P.F. Chang's China Bistro, Inc. (a) ...................................... 6,300 201,206
--------------
626,681
RETAIL-APPAREL -- (0.8%)
Ann Taylor Stores Corporation (a) ........................................ 6,300 208,688
--------------
RETAIL-CATALOG -- (1.7%)
Insight Enterprises, Inc. (a) ............................................ 7,700 456,706
--------------
RETAIL-GROCERY -- (0.7%)
Whole Foods Market, Inc. (a) ............................................. 4,300 177,644
--------------
RETAIL-SPECIALTY -- (1.0%)
Tweeter Home Entertainment Group, Inc. (a) ............................... 8,900 270,338
--------------
RETAIL-TRADE -- (1.0%)
Ultimate Electronics, Inc. (a) ........................................... 10,000 267,969
--------------
SEMICONDUCTOR MANUFACTURING -- (4.7%)
American Xtal Technology, Inc. (a) ....................................... 5,000 216,250
Cree Research, Inc. (a) .................................................. 2,400 320,400
Kopin Corporation (a) .................................................... 2,900 200,825
Mattson Technology, Inc. (a) ............................................. 6,100 198,250
Rudolph Technologies, Inc. (a) ........................................... 8,000 310,000
--------------
1,245,725
SOFTWARE -- (2.1%)
Actuate Software Corporation (a) ......................................... 6,500 346,937
Informatica Corporation (a) .............................................. 2,500 204,844
--------------
551,781
SOFTWARE-CLIENT/SERVER -- (2.1%)
Dendrite International, Inc. (a) ......................................... 4,550 151,572
Documentum, Inc. (a) ..................................................... 4,500 402,187
--------------
553,759
SOFTWARE-INTERNET -- (1.8%)
Allaire Corporation (a) .................................................. 4,300 158,025
CareScience, Inc. (a) .................................................... 10,200 107,737
Viant Corporation (a) .................................................... 6,800 201,450
--------------
467,212
SOFTWARE-TESTING -- (2.1%)
Mercury Interactive Corporation (a) ...................................... 5,800 561,150
--------------
</TABLE>
See notes to financial statements.
21
<PAGE> 23
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
SYSTEMS INTEGRATOR -- (3.0%)
Cytyc Corporation (a) .................................................... 4,200 $ 224,175
Diamond Technology Partners, Inc., Class A (a) ........................... 6,500 572,000
--------------
796,175
TELECOMMUNICATION EQUIPMENT -- (9.8%)
AudioCodes Ltd. (a) ...................................................... 2,300 276,000
Celeritek, Inc. (a) ...................................................... 4,300 175,494
Digital Lightwave, Inc. (a) .............................................. 6,400 643,600
Ditech Communications Corporation (a) .................................... 3,400 321,512
MCK Communications, Inc. (a) ............................................. 7,000 161,875
Natural Microsystems Corporation (a) ..................................... 2,500 281,094
Powerwave Technologies, Inc. (a) ......................................... 4,000 176,000
Tekelec, Inc. (a) ........................................................ 5,100 245,756
Tollgrade Communications, Inc. (a) ....................................... 2,600 344,500
--------------
2,625,831
TOTAL COMMON STOCKS -- (Cost $16,165,517) 98.2% 26,227,755
--------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT -- (0.6%)
State Street Bank and Trust Company (b) ... 4.000% 07/03/2000 $ 145,048 145,000
------------
TOTAL SHORT TERM INVESTMENT -- (Cost $145,000) 0.6% 145,000
------------
TOTAL INVESTMENTS -- (Cost $16,310,517) 98.8% 26,372,755
OTHER ASSETS LESS LIABILITIES -- 1.2% 326,592
-------- ------------
NET ASSETS -- 100.0% $26,699,347
======== ============
</TABLE>
(a) Non-income producing security.
(b) The agreement with State Street Bank and Trust Company, dated 6/30/00, is
fully collateralized by $120,000 United States Treasury Bond, 8.125%,
08/15/21, with a value of $150,300.
See notes to financial statements.
22
<PAGE> 24
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C>
COMMON STOCKS
AUSTRALIA -- (0.7%)
Lend Lease Corporation Ltd. .............................................. 13,400 $ 170,760
--------------
BERMUDA -- (0.0%)
Marvell Technology Group Ltd. (a) ........................................ 200 11,400
--------------
BRAZIL -- (0.6%)
Souza Cruz S.A. .......................................................... 4,000 23,931
Tele Norte Leste Participacoes S.A., ADR ................................. 2,400 56,700
Uniao de Bancos Brasileiros S.A., GDR .................................... 1,750 50,313
--------------
130,944
CANADA -- (5.5%)
Brascan Corporation, Class A ............................................. 4,900 57,608
Brookfield Properties Corporation ........................................ 2,100 27,882
Canadian Occidental Petroleum Ltd. ....................................... 6,900 187,186
Clarica Life Insurance Company ........................................... 6,000 122,838
Industrial Alliance Life Insurance Company (a) ........................... 2,700 44,696
Manulife Financial Corporation ........................................... 11,800 208,095
Nortel Networks Corporation .............................................. 2,230 154,744
Petro-Canada ............................................................. 3,251 60,737
Placer Dome, Inc. ........................................................ 8,800 82,649
Quebecor, Inc., Class B .................................................. 3,100 90,067
Sobeys, Inc. ............................................................. 6,824 113,195
TimberWest Forest Corporation ............................................ 2,451 17,223
Toronto Dominion Bank Ontario ............................................ 5,055 122,959
--------------
1,289,879
CAYMAN ISLANDS -- (1.4%)
Triton Energy Ltd. (a) ................................................... 8,100 318,431
--------------
DENMARK -- (1.2%)
ISS A/S (a) .............................................................. 3,600 274,064
--------------
EGYPT -- (0.3%)
Al Ahram Beverages Company S.A.E., GDR (a) ............................... 4,200 71,400
--------------
FINLAND -- (0.9%)
Nokia Oyj ................................................................ 2,695 137,522
Nokia Oyj., ADR .......................................................... 800 39,950
UPM-Kymmene Oyj .......................................................... 1,322 32,815
--------------
210,287
FRANCE -- (5.8%)
Atos S.A. (a) ............................................................ 149 13,941
Axa ..................................................................... 624 98,296
Banque Nationale de Paris ................................................ 695 66,883
Danone ................................................................... 370 49,100
France Telecom S.A. ...................................................... 386 53,951
Lafarge .................................................................. 1,700 132,112
PSA Peugeot Citroen ...................................................... 462 92,713
</TABLE>
See notes to financial statements.
23
<PAGE> 25
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
FRANCE -- (CONTINUED)
Rhone Poulenc S.A. ....................................................... 2,249 $ 164,147
Sanofi-Synthelabo S.A. ................................................... 931 44,352
Societe Eurafrance S.A. .................................................. 192 91,926
STMicroelectronics N.V. .................................................. 2,291 144,356
Suez Lyonnaise des Eaux S.A. ............................................. 700 122,631
Totalfina S.A., Class B .................................................. 1,761 270,005
Transiciel S.A. .......................................................... 242 15,549
--------------
1,359,962
GERMANY -- (3.3%)
BASF AG .................................................................. 1,145 46,021
Bayer AG ................................................................. 733 28,608
Deutsche Bank AG ......................................................... 1,762 145,004
Deutsche Telekom AG ...................................................... 993 56,692
Merck KGaA ............................................................... 433 13,848
Schering AG .............................................................. 7,323 401,299
Siemens AG ............................................................... 500 75,421
--------------
766,893
GREECE -- (0.1%)
Hellenic Telecommunications Organization SA, ADR ......................... 1,200 14,625
--------------
HONG KONG -- (0.2%)
Cheung Kong (Holdings) Ltd. .............................................. 3,000 33,000
Wing Hang Bank Ltd. ...................................................... 10,000 24,822
--------------
57,822
INDIA -- (0.0%)
Indian Hotels Company Ltd., GDR .......................................... 1,100 5,775
--------------
ISRAEL -- (1.3%)
M-Systems Flash Disk Pioneers Ltd. (a) ................................... 4,000 311,500
--------------
ITALY -- (1.2%)
ENI SPA .................................................................. 36,500 210,822
Tecnost SPA (a) .......................................................... 20,411 76,971
--------------
287,793
JAPAN -- (10.6%)
Acom Company Ltd. ........................................................ 600 50,441
Asahi Chemical Industry Company Ltd. ..................................... 17,200 121,578
Chugai Pharmaceutical Company Ltd. ....................................... 6,000 113,378
Fanuc Ltd. ............................................................... 1,100 111,861
Fuji Machine Mfg. Company Ltd. ........................................... 500 26,248
Honda Motor Company Ltd. ................................................. 2,000 68,046
Kao Corporation .......................................................... 5,000 152,679
Kyocera Corporation ...................................................... 700 118,684
Makita Corporation ....................................................... 7,000 66,698
NEC Corporation .......................................................... 8,000 251,072
Nippon Telegraph & Telephone Corporation ................................. 19 252,486
</TABLE>
See notes to financial statements.
24
<PAGE> 26
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
Orix Corporation ................................. 900 $ 132,746
Secom Company Ltd. ............................... 1,000 73,041
Shimano, Inc. .................................... 1,800 43,259
SMC Corporation .................................. 100 18,802
Taisho Pharmaceutical Company .................... 4,000 143,254
Takefuji Corporation ............................. 1,200 144,875
Toshiba Corporation .............................. 23,000 259,469
Toys "R" Us-Japan Ltd. (a) ....................... 1,000 169,643
Yamanouchi Pharmaceutical Company Ltd. ........... 3,000 163,706
----------
2,481,966
KOREA -- (0.4%)
Hyundai Electronics Industries Company Ltd. ...... 200 3,946
Korea Electric Power Corporation, ADR ............ 3,100 57,156
Korea Telecom Corporation, ADR ................... 700 33,863
SK Corporation ................................... 190 3,485
----------
98,450
MEXICO -- (0.5%)
Cemex S.A. de C.V., ADR .......................... 88 2,057
Fomento Economico Mexicano S.A. de C.V. .......... 850 36,603
Grupo Television S.A., GDR (a) ................... 700 48,256
Kimberly-Clark de Mexico, S.A. de C.V. ........... 9,717 27,633
----------
114,549
NETHERLANDS -- (2.7%)
Akzo Nobel N.V. .................................. 2,855 121,292
Fortis N.V. ...................................... 6,000 174,653
Heineken N.V. .................................... 881 53,620
Koninklijke (Royal) Philips Electronics N.V. ..... 4,658 219,681
KPN N.V. ......................................... 1,624 72,638
----------
641,884
SOUTH AFRICA -- (0.2%)
Sappi Ltd. ....................................... 5,063 38,056
----------
SPAIN -- (0.9%)
Banco Bilbao Vizcaya Argentaria, S.A. ............ 8,000 119,529
Telefonica S.A. .................................. 4,400 94,515
----------
214,044
SWEDEN -- (1.2%)
Electrolux AB (a) ................................ 6,100 94,405
Swedish Match AB ................................. 11,994 36,988
Telefonaktiebolaget LM Ericsson AB, Series B ..... 7,827 154,854
----------
286,247
SWITZERLAND -- (2.6%)
Edipresse S.A. ................................... 300 141,421
Givaudan AG (a) .................................. 5 1,522
Holderbank Financiere Glarus AG .................. 50 61,301
Lindt & Spruengli AG ............................. 101 47,983
</TABLE>
See notes to financial statements.
25
<PAGE> 27
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
SWITZERLAND -- (CONTINUED)
Nestle S.A. ...................................... 88 $ 176,129
Novartis AG ...................................... 72 114,049
Roche Holdings AG ................................ 5 48,673
Saurer AG (a) .................................... 44 27,458
----------
618,536
UNITED KINGDOM -- (6.6%)
Aegis Group Plc .................................. 13,700 40,319
Anglo American Plc ............................... 1,716 81,488
AstraZeneca Group Plc ............................ 700 32,675
Barclays Plc ..................................... 7,000 174,022
BP Amoco Plc ..................................... 21,224 203,603
British America Tobacco Plc ...................... 20,600 137,459
British Land Company Plc ......................... 10,200 62,506
British Telecommunications Plc ................... 3,100 40,058
COLT Telecom Group Plc (a) ....................... 1,900 63,247
Garban-Intercapital Plc .......................... 10,000 32,683
Glaxo Wellcome Plc ............................... 5,900 172,029
HSBC Holdings Plc ................................ 8,625 98,596
HSBC Holdings Plc. ............................... 19,200 219,819
Logica Plc ....................................... 2,400 56,796
Shell Transport & Trading Company ................ 10,830 90,373
Vodafone Group Plc ............................... 13,225 53,429
----------
1,559,102
UNITED STATES -- (52.1%)
1-800 Contacts, Inc. (a) ......................... 400 18,800
Alamosa PCS Holdings, Inc. (a) ................... 900 18,788
Alkermes, Inc. (a) ............................... 5,600 263,900
Alpharma, Inc., Class A .......................... 3,700 230,325
AmeriSource Health Corporation, Class A (a) ...... 7,000 217,000
Ancor Communications, Inc. (a) ................... 6,100 218,170
Anixter International, Inc. (a) .................. 8,800 233,200
Apria Healthcare Group, Inc. (a) ................. 11,000 134,750
Artisan Components, Inc. (a) ..................... 9,700 105,488
Astec Industries, Inc. (a) ....................... 4,500 114,188
Atwood Oceanics, Inc. (a) ........................ 3,500 155,313
Breakaway Solutions, Inc. (a) .................... 5,900 159,300
Cal Dive International, Inc. (a) ................. 6,800 368,475
Centillium Communications, Inc. (a) .............. 400 27,600
Conductus, Inc. (a) .............................. 15,600 308,100
Cross Timbers Oil Company ........................ 9,100 201,337
Davox Corporation (a) ............................ 12,100 156,544
Documentum, Inc. (a) ............................. 4,300 384,312
E.W. Blanch Holdings, Inc. ....................... 10,000 203,125
Electric Fuel Corporation (a) .................... 5,000 76,563
Enzo Biochem, Inc. (a) ........................... 5,400 372,600
Express Scripts, Inc., Class A (a) ............... 5,000 310,625
</TABLE>
See notes to financial statements.
26
<PAGE> 28
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
UNITED STATES -- (CONTINUED)
G & K Services, Class A .......................... 5,200 $ 130,325
Genome Therapeutics Corporation (a) .............. 8,200 249,587
Guess?, Inc. (a) ................................. 7,100 99,400
InFocus Corporation (a) .......................... 6,000 193,125
inSilicon Corporation (a) ........................ 900 14,063
ITC DeltaCom, Inc. (a) ........................... 5,000 111,563
JAKKS Pacific, Inc. (a) .......................... 12,400 182,900
Jupiter Communications, Inc. (a) ................. 4,400 100,789
Keynote Systems, Inc. (a) ........................ 3,400 239,912
Lamar Advertising Company, Class A (a) ........... 4,600 199,237
Lattice Semiconductor Corporation (a) ............ 1,900 131,338
Lynx Therapeutics, Inc. (a) ...................... 6,200 294,887
Maxtor Corporation (a) ........................... 16,600 175,337
Media Metrix, Inc. (a) ........................... 3,800 96,902
Mentor Corporation ............................... 3,600 97,875
Mercury General Corporation ...................... 8,200 193,725
Myriad Genetics, Inc. (a) ........................ 3,000 444,234
Netegrity, Inc. (a) .............................. 4,800 361,500
Newfield Exploration Company (a) ................. 5,500 215,187
NextCard, Inc. (a) ............................... 23,000 195,500
OM Group, Inc., .................................. 4,600 202,400
Patterson Energy, Inc. (a) ....................... 9,200 262,200
Pennzoil-Quaker State Company .................... 16,200 195,412
Peregrine Systems, Inc. (a) ...................... 7,725 267,961
Pharmacia Corporation, ADR ....................... 1,071 54,096
Pharmacopeia, Inc. (a) ........................... 7,400 343,175
Precision Castparts Corporation .................. 4,800 217,200
Primus Telecommunications Group, Inc. (a) ........ 6,500 161,688
Retek, Inc. (a) .................................. 1,400 44,800
Rural Celluar Corporation, Class A (a) ........... 4,100 313,906
Saga Systems, Inc. (a) ........................... 9,700 120,644
Semitool, Inc. (a) ............................... 12,000 207,750
Sonic Foundry, Inc. (a) .......................... 7,600 159,600
Stone Energy Corporation (a) ..................... 4,700 280,825
Three-Five Systems, Inc. (a) ..................... 6,349 374,591
Toll Brothers, Inc. (a) .......................... 6,200 127,100
Tollgrade Communications, Inc. (a) ............... 2,800 371,000
Unify Corporation (a) ............................ 5,800 49,663
Universal Electronics, Inc. (a) .................. 6,500 159,656
US LEC Corporation, Class A (a) .................. 5,200 88,400
Xybernaut Corporation (a) ........................ 7,200 80,550
Zale Corporation (a) ............................. 3,600 131,400
----------
12,219,906
TOTAL COMMON STOCKS -- (Cost $20,762,194) 100.3% 23,554,275
----------
</TABLE>
See notes to financial statements.
27
<PAGE> 29
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
PREFERRED STOCKS
BRAZIL -- (0.7%)
Embraer - Empresa Brasileira de Aeronautica S.A. ... 27,000 $ 154,350
-----------
TOTAL PREFERRED STOCKS -- (Cost $79,342) 0.7% 154,350
-----------
TOTAL INVESTMENTS -- (Cost $20,841,536) 101.0% 23,708,625
LIABILITIES LESS OTHER ASSETS -- (246,065) (1.0)% (246,065)
----- -----------
NET ASSETS -- 100.0% $23,462,560
===== ===========
</TABLE>
(a) Non-income producing security.
ADR American Depository Receipt
GDR Global Depository Receipt
28
<PAGE> 30
VARIABLE INVESTORS SERIES TRUST
WORLD EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
ANALYSIS OF INDUSTRY CLASSIFICATIONS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY NET ASSETS VALUE
-------- ---------- ---------
<S> <C> <C>
Advertising.................... 1.0% $ 239,556
Aerospace & Defense............ 1.6 371,550
Apparel & Textiles............. 1.0 229,725
Automobiles.................... 0.7 160,759
Banks.......................... 4.4 1,021,946
Broadcasting/Publishing........ 0.6 138,324
Building Materials & Construction 1.4 322,569
Business Services.............. 1.2 274,064
Chemicals...................... 1.4 317,499
Communication Equipment........ 1.0 233,200
Computers & Business Equipment. 2.1 491,845
Computer Services.............. 1.6 364,127
Computer Software.............. 3.8 901,363
Consulting Services............ 0.4 100,789
Consumer Products.............. 1.2 289,817
Contract Drilling.............. 1.1 262,200
Cosmetics & Toiletries......... 0.7 154,201
Data Storage................... 1.3 311,500
Diversified.................... 0.2 57,608
Drugs.......................... 4.4 1,031,629
Drugs & Health Care............ 10.0 2,336,161
Drugs/Pharmaceuticals.......... 3.8 884,648
Electronic Components.......... 4.4 1,037,640
Electronics.................... 4.2 987,493
Energy Sources................. 1.2 280,825
Financials..................... 0.9 202,400
Financial Services............. 3.1 727,004
Food & Beverages............... 2.3 548,031
Health & Personal Care......... 0.7 172,029
Hotels/Resorts................. 0.0 5,775
Information Systems............ 0.3 73,041
Insurance...................... 4.4 1,045,427
Investment Companies........... 0.4 91,926
Machinery & Equipment.......... 2.0 461,143
Manufacturing.................. 1.3 301,580
Metals & Mining................ 0.7 164,137
Oil & Gas...................... 9.7 2,284,954
Paper and Forest Products...... 0.5 115,728
Publishing..................... 0.6 141,421
Real Estate Investment Trusts.. 0.4 95,506
Real Estate/Office Property.... 0.1 27,882
Retail-Specialty............... 1.4 319,843
Semiconductors................. 0.1 14,063
Software....................... 0.7 159,600
Software-Client/Server......... 1.6 384,313
Software-General............... 1.1 251,072
Software-Internet.............. 1.5 364,414
Telecommunication Equipment.... 4.1 974,664
Telecommunications............. 6.8 1,603,467
Tobacco........................ 0.8 198,379
Utilities...................... 0.8 179,788
------ -----------
TOTAL......................... 101.0% $23,708,625
====== ===========
</TABLE>
See notes to financial statements.
29
<PAGE> 31
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
APPAREL -- (1.3%)
Intimate Brands, Inc. ............................ 50,000 $ 987,500
----------
AUTO-RELATED -- (1.1%)
Harley-Davidson, Inc. ............................ 21,600 831,600
----------
BANKS -- (5.0%)
Chase Manhattan Corporation ...................... 22,350 1,029,497
Citigroup, Inc. .................................. 27,000 1,626,750
Fifth Third Bancorp .............................. 11,725 741,606
Zions Bancorporation ............................. 7,500 344,180
----------
3,742,033
BROADCASTING -- (1.3%)
Clear Channel Communications (a) ................. 13,000 975,000
----------
COMPUTERS & BUSINESS EQUIPMENT -- (12.2%)
Cisco Systems, Inc. (a) .......................... 39,000 2,478,938
Dell Computer Corporation (a) .................... 44,500 2,194,406
EMC Corporation (a) .............................. 22,200 1,708,013
Sun Microsystems, Inc. (a) ....................... 31,000 2,819,062
----------
9,200,419
COMPUTER SOFTWARE -- (7.4%)
Adobe Systems, Inc. .............................. 11,400 1,482,000
International Business Machines Corporation ...... 8,500 931,281
Microsoft Corporation (a) ........................ 27,000 2,160,000
Oracle Corporation (a) ........................... 12,000 1,008,750
----------
5,582,031
COSMETICS & TOILETRIES -- (0.6%)
Colgate-Palmolive Company ........................ 7,700 461,038
----------
DATA STORAGE -- (1.2%)
Network Appliance, Inc. (a) ...................... 11,500 925,750
----------
DIVERSIFIED MANUFACTURING -- (1.9%)
Tyco International Ltd. .......................... 30,000 1,421,250
----------
DIVERSIFIED RETAIL -- (1.0%)
Costco Companies, Inc. (a) ....................... 22,700 749,100
----------
DRUGS -- (9.1%)
Merck & Company, Inc. ............................ 7,000 536,375
Pfizer, Inc. ..................................... 99,625 4,782,000
Schering-Plough Corporation ...................... 30,500 1,540,250
----------
6,858,625
ELECTRIC POWER -- (1.0%)
AES Corporation (a) .............................. 16,800 766,500
----------
</TABLE>
See notes to financial statements.
30
<PAGE> 32
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
ELECTRONIC COMPONENTS -- (1.2%)
Novellus System, Inc. (a) ........................ 16,100 $ 910,656
----------
FINANCIAL SERVICES -- (5.1%)
American Express Company ......................... 14,100 734,962
Donaldson, Lufkin & Jenrette, Inc. ............... 14,300 606,856
Federal Home Loan Mortgage Corporation ........... 14,000 567,000
Federal National Mortgage Association ............ 13,000 678,438
General Electric Company ......................... 24,000 1,272,000
----------
3,859,256
HIGH TECHNOLOGY MANUFACTURING -- (4.7%)
Lucent Technologies, Inc. ........................ 18,500 1,096,125
QUALCOMM, Inc. (a) ............................... 24,000 1,440,000
Tellabs, Inc. (a) ................................ 14,500 992,344
----------
3,528,469
INSURANCE -- (3.0%)
American International Group, Inc. ............... 19,015 2,234,263
----------
INTERNET -- (2.9%)
America Online, Inc. (a) ......................... 41,000 2,162,750
----------
MEDIA -- (3.2%)
Time Warner, Inc. ................................ 31,500 2,394,000
----------
MEDICAL PRODUCTS & SUPPLIES -- (1.7%)
Medtronic, Inc. .................................. 26,000 1,295,125
----------
MEDICAL SUPPLIES & SERVICES -- (5.9%)
Cardinal Health, Inc. ............................ 12,500 925,000
Immunex Corporation (a) .......................... 28,200 1,394,137
Johnson & Johnson ................................ 10,000 1,018,750
MedImmune, Inc. (a) .............................. 15,000 1,110,000
----------
4,447,887
METALS & MINING -- (0.8%)
Alcoa, Inc. ...................................... 21,600 626,400
----------
PAPER AND FOREST PRODUCTS -- (0.8%)
International Paper Company ...................... 21,100 629,044
----------
PRINTING & PUBLISHING -- (0.9%)
Omnicom Group .................................... 7,700 685,781
----------
RETAIL -- (6.9%)
Gap, Inc. ........................................ 37,000 1,156,250
Safeway, Inc. (a) ................................ 27,000 1,218,375
Target Corporation ............................... 7,500 435,000
Wal-Mart Stores, Inc. ............................ 41,000 2,362,625
----------
5,172,250
</TABLE>
See notes to financial statements.
31
<PAGE> 33
VARIABLE INVESTORS SERIES TRUST
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
RETAIL-SPECIALTY -- (3.7%)
Bed Bath & Beyond, Inc. (a) ...................... 11,500 $ 416,875
Best Buy Company, Inc. (a) ....................... 12,000 759,000
Circuit City Stores-Circuit City Group ........... 22,000 730,125
Home Depot, Inc. ................................. 18,000 898,875
----------
2,804,875
SECURITIES/ASSET MANAGEMENT -- (1.3%)
Lehman Brothers Holdings, Inc. ................... 10,300 973,994
----------
SEMICONDUCTORS -- (4.1%)
Intel Corporation ................................ 23,000 3,074,812
----------
TELECOMMUNICATION EQUIPMENT -- (4.4%)
Nortel Networks Corporation ...................... 16,000 1,092,000
Scientific-Atlanta, Inc. ......................... 29,400 2,190,300
----------
3,282,300
TELECOMMUNICATIONS -- (1.9%)
Motorola, Inc. ................................... 9,900 287,719
WorldCom, Inc. (a) ............................... 24,750 1,135,406
----------
1,423,125
TOTAL COMMON STOCKS -- (Cost $44,004,828) 95.6% 72,005,833
----------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT -- (5.2%)
State Street Bank and Trust Company (b) 4.000% 07/03/2000 $ 3,879,293 3,878,000
-----------
TOTAL SHORT TERM INVESTMENT --
(Cost $3,878,000) 5.2% 3,878,000
-----------
TOTAL INVESTMENTS -- (Cost $47,882,828) 100.8% 75,883,833
LIABILITIES LESS OTHER ASSETS -- (0.8)% (598,820)
------ -----------
NET ASSETS -- 100.0% $75,285,013
====== ===========
</TABLE>
(a) Non-income producing security.
(b) The agreement with State Street Bank and Trust Company, dated 6/30/00, is
fully collateralized by $3,560,000 United States Treasury Bond, 7.250%,
05/15/16, with a value of $3,960,500.
See notes to financial statements.
32
<PAGE> 34
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE & DEFENSE -- (1.8%)
Boeing Company ................................... 3,600 $ 150,525
Northrop Grumman Corporation ..................... 2,500 165,625
----------
316,150
ALCOHOL -- (0.9%)
Adolph Coors Company, Class B .................... 400 24,200
Anheuser-Busch Companies, Inc. ................... 1,900 141,906
----------
166,106
AUTOMOTIVE -- (1.1%)
Ford Motor Company ............................... 4,200 180,600
Visteon Corporation (a) .......................... 549 6,657
----------
187,257
BANKS -- (4.1%)
BankAmerica Corporation .......................... 900 38,700
Citigroup, Inc. .................................. 5,750 346,438
Comerica, Inc. ................................... 1,200 53,850
FleetBoston Financial Corporation ................ 6,000 204,000
Golden West Financial Corporation ................ 1,200 48,975
UnionBanCal Corporation .......................... 1,700 31,556
----------
723,519
BUILDING & BUILDING MATERIAL -- (0.4%)
USG Corporation .................................. 2,500 75,938
----------
CHEMICALS -- (0.9%)
Eastman Chemical Company ......................... 2,600 124,150
Sherwin-Williams Company ......................... 1,700 36,019
----------
160,169
CHEMICALS & PLASTICS -- (0.8%)
Du Pont (E.I.) de Nemours & Company .............. 1,000 43,750
FMC Corporation (a) .............................. 1,600 92,800
----------
136,550
COMPUTERS & BUSINESS EQUIPMENT -- (11.3%)
Apple Computer, Inc. (a) ......................... 2,100 109,988
Cisco Systems, Inc. (a) .......................... 11,400 724,612
Dell Computer Corporation (a) .................... 7,300 359,981
EMC Corporation (a) .............................. 3,200 246,200
Hewlett-Packard Company .......................... 2,100 262,237
Sun Microsystems, Inc. (a) ....................... 3,300 300,094
----------
2,003,112
COMPUTER SERVICES -- (1.2%)
First Data Corporation ........................... 2,500 124,063
NCR Corporation (a) .............................. 2,400 93,450
----------
217,513
COMPUTER SOFTWARE -- (8.2%)
Computer Associates International, Inc. .......... 2,600 133,087
International Business Machines Corporation ...... 2,800 306,775
Microsoft Corporation (a) ........................ 7,400 592,000
Oracle Corporation (a) ........................... 5,100 428,719
----------
1,460,581
</TABLE>
See notes to financial statements.
33
<PAGE> 35
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
CONSUMER DURABLES -- (0.3%)
Shaw Industries, Inc. ............................ 3,900 $ 48,750
----------
DIVERSIFIED MANUFACTURING -- (0.2%)
Tyco International Ltd. .......................... 600 28,425
----------
DRUGS -- (6.0%)
Bristol-Myers Squibb Company ..................... 2,100 122,325
Merck & Company, Inc. ............................ 4,100 314,162
Pfizer, Inc. ..................................... 11,375 546,000
Schering-Plough Corporation ...................... 1,600 80,800
----------
1,063,287
DRUGS/MEDICINE -- (0.2%)
Sigma-Aldrich Corporation ........................ 1,200 35,100
----------
ELECTRICAL UTILITIES -- (1.5%)
PG&E Corporation ................................. 4,100 100,963
PPL Corporation .................................. 2,400 52,650
Public Service Enterprise Group, Inc. ............ 3,100 107,337
----------
260,950
ELECTRONIC COMPONENTS -- (1.4%)
Corning, Inc. .................................... 400 107,950
Vishay Intertechnology, Inc. (a) ................. 3,600 136,575
----------
244,525
ENERGY -- (0.5%)
Occidental Petroleum Corporation ................. 4,500 94,781
----------
ENERGY RESERVES -- (4.1%)
Chevron Corporation .............................. 1,200 101,775
Exxon Mobil Corporation .......................... 5,592 438,972
Phillips Petroleum Company ....................... 2,000 101,375
Tosco Corporation ................................ 2,900 82,106
----------
724,228
FINANCIAL SERVICES -- (6.0%)
AXA Financial, Inc. .............................. 2,500 85,000
Federal National Mortgage Association ............ 2,900 151,344
General Electric Company ......................... 14,800 784,400
KeyCorp .......................................... 3,000 52,875
----------
1,073,619
FOOD & BEVERAGES -- (1.6%)
Coca-Cola Company ................................ 1,600 91,900
PepsiCo, Inc. .................................... 2,100 93,319
Quaker Oats Company .............................. 1,400 105,175
----------
290,394
HIGH TECHNOLOGY MANUFACTURING -- (2.4%)
ADC Telecommunications, Inc. (a) ................. 1,500 125,812
Lucent Technologies, Inc. ........................ 3,200 189,600
Teradyne, Inc. (a) ............................... 1,600 117,600
----------
433,012
</TABLE>
See notes to financial statements.
34
<PAGE> 36
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
HOTELS & RESTAURANTS -- (1.2%)
Darden Restaurants, Inc. ......................... 2,700 $ 43,875
Mandalay Resort Group (a) ........................ 2,200 44,000
Tricon Global Restaurants, Inc. (a) .............. 4,300 121,475
----------
209,350
HOUSEHOLD PRODUCTS -- (0.2%)
Procter & Gamble Company ......................... 500 28,625
----------
INDUSTRIAL SERVICES/SUPPLIES -- (0.5%)
Viad Corporation ................................. 3,200 87,200
----------
INSURANCE -- (3.2%)
American International Group, Inc. ............... 1,425 167,437
Hartford Financial Services Group, Inc. .......... 1,800 100,688
Loews Corporation ................................ 2,600 156,000
The PMI Group, Inc. .............................. 1,850 87,875
Torchmark Corporation ............................ 2,000 49,375
----------
561,375
INTERNET -- (2.1%)
America Online, Inc. (a) ......................... 4,100 216,275
Yahoo, Inc. (a) .................................. 1,200 148,650
----------
364,925
INVESTMENT COMPANIES -- (0.3%)
Bear Stearns Companies, Inc. ..................... 1,200 49,950
----------
MACHINERY & EQUIPMENT -- (0.5%)
Dover Corporation ................................ 2,300 93,294
----------
MANUFACTURING -- (0.7%)
United Technologies Corporation .................. 2,200 129,525
----------
MEDIA -- (1.5%)
The Walt Disney Company .......................... 5,200 201,825
Time Warner, Inc. ................................ 900 68,400
----------
270,225
MEDICAL PROVIDER SERVICES -- (2.0%)
PacifiCare Health Systems, Inc. (a) .............. 2,300 138,431
UnitedHealth Group, Inc. ......................... 2,500 214,375
----------
352,806
MEDICAL SUPPLIES & SERVICES -- (1.8%)
Johnson & Johnson ................................ 2,000 203,750
St. Jude Medical, Inc. (a) ....................... 2,600 119,275
----------
323,025
OIL & GAS -- (0.4%)
USX Marathon Group ............................... 2,500 62,656
----------
OIL REFINING -- (0.2%)
Ultramar Diamond Shamrock Corporation ............ 1,800 44,663
----------
</TABLE>
See notes to financial statements.
35
<PAGE> 37
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C>
COMMON STOCKS -- (CONTINUED)
PAPER AND FOREST PRODUCTS -- (0.9%)
Georgia-Pacific Group ............................ 2,600 $ 68,250
Temple-Inland, Inc. .............................. 2,000 84,000
----------
152,250
PHARMACEUTICALS -- (1.5%)
Eli Lilly & Company .............................. 2,700 269,662
----------
PRINTING & PUBLISHING -- (0.5%)
The New York Times Company, Class A .............. 2,400 94,800
----------
RAILROADS -- (0.3%)
Burlington Northern Santa Fe Corporation ......... 2,300 52,756
----------
RETAIL -- (2.9%)
Federated Department Stores, Inc. (a) ............ 2,700 91,125
Wal-Mart Stores, Inc. ............................ 7,300 420,662
----------
511,787
RETAIL-SPECIALTY -- (2.7%)
Best Buy Company, Inc. (a) ....................... 2,700 170,775
Home Depot, Inc. ................................. 2,500 124,844
Tiffany & Company ................................ 2,500 168,750
Zale Corporation (a) ............................. 400 14,600
----------
478,969
RETAIL-TRADE -- (1.2%)
Sears, Roebuck & Company ......................... 6,600 215,325
----------
SECURITIES/ASSET MANAGEMENT -- (1.8%)
Lehman Brothers Holdings, Inc. ................... 1,100 104,019
Morgan Stanley Dean Witter & Company ............. 1,300 108,225
Paine Webber Group, Inc. ......................... 2,300 104,650
----------
316,894
SEMICONDUCTORS -- (8.1%)
Altera Corporation (a) ........................... 1,600 163,100
Analog Devices, Inc. (a) ......................... 2,500 190,000
Applied Materials, Inc. (a) ...................... 2,100 190,312
Intel Corporation ................................ 5,600 748,650
Texas Instruments, Inc. .......................... 1,700 116,769
Xilinx, Inc. (a) ................................. 400 33,025
----------
1,441,856
TELECOMMUNICATION EQUIPMENT -- (1.6%)
Nortel Networks Corporation ...................... 4,100 279,825
----------
TELECOMMUNICATIONS -- (5.9%)
AT&T Corporation ................................. 2,150 67,994
Bell Atlantic Corporation ........................ 3,800 193,087
BellSouth Corporation ............................ 4,800 204,600
SBC Communications, Inc. ......................... 6,711 290,251
WorldCom, Inc. (a) ............................... 6,200 284,425
----------
1,040,357
</TABLE>
See notes to financial statements.
36
<PAGE> 38
VARIABLE INVESTORS SERIES TRUST
MATRIX EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
TOBACCO -- (1.2%)
Philip Morris Companies, Inc. .................... 8,200 $ 217,813
----------
UTILITIES -- (0.5%)
Consolidated Edison, Inc. ........................ 3,000 88,875
----------
TOTAL COMMON STOCKS -- (Cost $16,280,290) 98.6% 17,482,754
----------
</TABLE>
<TABLE>
<CAPTION>
INTEREST
RATE
----
<S> <C> <C> <C> <C>
MUTUAL FUNDS -- (2.8%)
Dreyfus Cash Management Plus...... 6.49% (b) 495,273 495,273
----------
TOTAL MUTUAL FUNDS -- (Cost $495,273) 2.8% 495,273
----------
TOTAL INVESTMENTS -- (Cost $16,775,563) 101.4% 17,978,027
LIABILITIES LESS OTHER ASSETS -- (1.4)% (240,609)
----- -----------
NET ASSETS -- 100.0% $17,737,418
===== ===========
</TABLE>
(a) Non-income producing security.
(b) Interest rate shown is the 7 day yield as of June 30, 2000.
See notes to financial statements.
37
<PAGE> 39
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
AEROSPACE & DEFENSE -- (2.2%)
Boeing Company ........................................................... 5,900 $ 246,694
Honeywell International, Inc. ............................................ 7,000 235,812
--------------
482,506
ALCOHOL -- (1.0%)
Anheuser-Busch Companies, Inc. ........................................... 2,900 216,594
--------------
AUTOMOTIVE -- (2.7%)
Ford Motor Company ....................................................... 9,200 395,600
Visteon Corporation (a) .................................................. 15,204 184,349
--------------
579,949
BANKS -- (6.4%)
Bank One Corporation ..................................................... 6,400 170,000
Chase Manhattan Corporation .............................................. 2,550 117,459
Comerica, Inc. ........................................................... 9,800 439,775
Compass Bancshares, Inc. ................................................. 9,600 163,800
Wachovia Corporation ..................................................... 4,700 254,975
Wells Fargo & Company .................................................... 6,000 232,500
--------------
1,378,509
BUILDING & BUILDING MATERIAL -- (1.1%)
USG Corporation .......................................................... 7,550 229,331
--------------
CAPITAL EQUIPMENT -- (7.1%)
American Standard Companies, Inc. (a) .................................... 10,900 446,900
Ingersoll-Rand Company ................................................... 11,000 442,750
ITT Industries, Inc. ..................................................... 7,400 224,775
Navistar International Corporation (a) ................................... 5,300 164,631
Parker-Hannifin Corporation .............................................. 6,800 232,900
--------------
1,511,956
CHEMICALS -- (0.4%)
Crompton Corporation ..................................................... 7,500 91,875
--------------
COMMUNICATION SERVICES -- (0.8%)
Comcast Corporation, Class A ............................................. 4,500 182,250
--------------
COMPUTERS & BUSINESS EQUIPMENT -- (1.9%)
Compaq Computer Corporation .............................................. 16,000 409,000
--------------
COMPUTER SOFTWARE -- (1.0%)
Unisys Corporation (a) ................................................... 15,000 218,438
--------------
CONGLOMERATES -- (1.4%)
Harsco Corporation ....................................................... 11,600 295,800
--------------
CONSUMER NON-DURABLES -- (0.6%)
Borg-Warner Automotive, Inc. ............................................. 3,700 129,963
--------------
</TABLE>
See notes to financial statements.
38
<PAGE> 40
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
DIVERSIFIED MANUFACTURING -- (2.5%)
Textron, Inc. ............................................................ 3,600 $ 195,525
Tyco International Ltd. .................................................. 7,200 341,100
--------------
536,625
DRUGS -- (1.2%)
Abbott Laboratories ...................................................... 5,600 249,550
--------------
ELECTRIC UTILITIES -- (1.5%)
Allegheny Energy, Inc. ................................................... 8,100 221,737
American Electric Power Company, Inc. .................................... 3,300 97,763
--------------
319,500
ENERGY RESERVES -- (2.2%)
Exxon Mobil Corporation .................................................. 5,900 463,150
--------------
FINANCIAL SERVICES -- (1.5%)
Federal National Mortgage Association .................................... 5,600 292,250
Labranche & Company, Inc. (a) ............................................ 2,400 34,500
--------------
326,750
FOOD & BEVERAGES -- (6.2%)
ConAgra, Inc. ............................................................ 5,500 104,844
General Mills, Inc. ...................................................... 10,900 416,925
Keebler Foods Company .................................................... 16,000 594,000
Quaker Oats Company ...................................................... 2,800 210,350
--------------
1,326,119
HEALTH CARE -- (4.4%)
Baxter International, Inc. ............................................... 4,300 302,344
Becton, Dickinson & Company .............................................. 12,600 361,462
Pharmacia Corporation .................................................... 5,603 289,605
--------------
953,411
INDUSTRIAL MANUFACTURING & PROCESSING -- (2.8%)
Eaton Corporation ........................................................ 3,300 221,100
Johnson Controls, Inc. ................................................... 3,400 174,463
Minnesota Mining & Manufacturing Company ................................. 2,500 206,250
--------------
601,813
INSURANCE -- (1.0%)
American General Corporation ............................................. 3,700 225,700
--------------
INVESTMENT COMPANIES -- (0.9%)
Allied Capital Corporation ............................................... 11,200 190,400
--------------
OFFICE EQUIPMENT -- (1.1%)
Pitney Bowes, Inc. ....................................................... 5,700 228,000
--------------
OIL & GAS -- (14.7%)
Amerada Hess Corporation ................................................. 3,500 216,125
BP Amoco Plc ADR ......................................................... 12,204 690,288
Devon Energy Corporation ................................................. 7,700 432,644
El Paso Energy Corporation ............................................... 5,200 264,875
</TABLE>
See notes to financial statements.
39
<PAGE> 41
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
OIL & GAS -- (CONTINUED)
Kerr-Mcgee Corporation ................................................... 4,500 $ 265,219
Nabors Industries, Inc. (a) .............................................. 6,000 249,375
Royal Dutch Petroleum Company ADR ........................................ 5,500 338,594
Total S.A. ADR ........................................................... 5,700 437,831
Union Pacific Resources Group, Inc. ...................................... 11,500 253,000
--------------
3,147,951
OIL SERVICES -- (4.1%)
Pride International, Inc. (a) ............................................ 13,000 321,750
R & B Falcon Corporation (a) ............................................. 23,600 556,075
--------------
877,825
PHARMACEUTICALS -- (4.0%)
American Home Products Corporation ....................................... 4,100 240,875
Eli Lilly & Company ...................................................... 6,100 609,237
--------------
850,112
PRINTING & PUBLISHING -- (1.4%)
The New York Times Company, Class A ...................................... 7,500 296,250
--------------
RAILROADS -- (1.4%)
Burlington Northern Santa Fe Corporation ................................. 4,800 110,100
Kansas City Southern Industries, Inc. .................................... 2,100 186,244
--------------
296,344
RETAIL -- (7.5%)
Federated Department Stores, Inc. (a) .................................... 7,450 251,437
May Department Stores Company ............................................ 9,500 228,000
Ross Stores, Inc. ........................................................ 13,800 235,463
Safeway, Inc. (a) ........................................................ 6,800 306,850
TJX Companies, Inc. ...................................................... 15,700 294,375
Toys "R" Us, Inc. (a) .................................................... 20,000 291,250
--------------
1,607,375
SECURITIES/ASSET MANAGEMENT -- (2.4%)
Lehman Brothers Holdings, Inc. ........................................... 5,400 510,638
--------------
TELECOMMUNICATIONS -- (8.6%)
Alltel Corporation ....................................................... 3,800 235,362
AT&T Corporation ......................................................... 5,300 167,613
Bell Atlantic Corporation ................................................ 6,880 349,590
CenturyTel, Inc. ......................................................... 8,900 255,875
Harris Corporation ....................................................... 2,800 91,700
SBC Communications, Inc. ................................................. 8,412 363,819
WorldCom, Inc. (a) ....................................................... 8,300 380,762
--------------
1,844,721
TOTAL COMMON STOCKS -- (Cost $20,590,537) 96.0% 20,578,405
--------------
</TABLE>
See notes to financial statements.
40
<PAGE> 42
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
PREFERRED STOCKS
REAL ESTATE -- (0.7%)
Equity Residential Properties Trust, Series G ............................ 6,300 $ 141,750
--------------
TOTAL PREFERRED STOCKS -- (Cost $156,732) 0.7% 141,750
--------------
RIGHTS
INSURANCE -- (0.0%)
Markel Corporation (a) ................................................... 1 7
--------------
TOTAL RIGHTS -- (Cost $25) 0.0% 7
--------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT -- (6.7%)
State Street Bank and Trust Company (b).... 5.500% 07/03/2000 $ 1,440,660 1,440,000
--------------
TOTAL SHORT TERM INVESTMENT -- (Cost $1,440,000) 6.7% 1,440,000
--------------
TOTAL INVESTMENTS -- (Cost $22,187,294) 103.4% 22,160,162
LIABILITIES LESS OTHER ASSETS -- (3.4)% (724,326)
----- --------------
NET ASSETS -- 100.0% $ 21,435,836
===== ==============
</TABLE>
(a) Non-income producing security.
(b) The agreement with State Street Bank and Trust Company, dated 6/30/00, is
fully collateralized by $1,175,000 United States Treasury Bond, 8.125%,
08/15/21, with a value of $1,471,688.
ADR American Depository Receipt
See notes to financial statements.
41
<PAGE> 43
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
APPAREL -- (1.3%)
Intimate Brands, Inc. .................................................... 34,000 $ 671,500
--------------
AUTO-RELATED -- (1.1%)
Harley-Davidson, Inc. .................................................... 15,000 577,500
--------------
BANKS -- (4.4%)
Chase Manhattan Corporation .............................................. 15,300 704,756
Citigroup, Inc. .......................................................... 16,620 1,001,355
Fifth Third Bancorp ...................................................... 6,760 427,570
Zions Bancorporation ..................................................... 4,300 197,330
--------------
2,331,011
BROADCASTING -- (1.1%)
Clear Channel Communications (a) ......................................... 7,900 592,500
--------------
COMPUTERS & BUSINESS EQUIPMENT -- (10.9%)
Cisco Systems, Inc. (a) .................................................. 26,800 1,703,475
Dell Computer Corporation (a) ............................................ 23,900 1,178,569
EMC Corporation (a) ...................................................... 15,000 1,154,062
Sun Microsystems, Inc. (a) ............................................... 18,400 1,673,250
--------------
5,709,356
COMPUTER SOFTWARE -- (6.7%)
Adobe Systems, Inc. ...................................................... 7,900 1,027,000
International Business Machines Corporation .............................. 5,000 547,812
Microsoft Corporation (a) ................................................ 15,920 1,273,600
Oracle Corporation (a) ................................................... 8,000 672,500
--------------
3,520,912
COSMETICS & TOILETRIES -- (0.6%)
Colgate-Palmolive Company ................................................ 5,200 311,350
--------------
DATA STORAGE -- (1.2%)
Network Appliance, Inc. (a) .............................................. 8,000 644,000
--------------
DIVERSIFIED MANUFACTURING -- (1.5%)
Tyco International Ltd. .................................................. 17,000 805,375
--------------
DIVERSIFIED RETAIL -- (1.0%)
Costco Companies, Inc. (a) ............................................... 15,700 518,100
--------------
DRUGS -- (7.8%)
Merck & Company, Inc. .................................................... 4,400 337,150
Pfizer, Inc. ............................................................. 60,410 2,899,680
Schering-Plough Corporation .............................................. 17,400 878,700
--------------
4,115,530
ELECTRIC POWER -- (1.0%)
AES Corporation (a) ...................................................... 11,400 520,125
--------------
</TABLE>
See notes to financial statements.
42
<PAGE> 44
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
ELECTRONIC COMPONENTS -- (1.2%)
Novellus System, Inc. (a) ................................................ 10,800 $ 610,875
--------------
FINANCIAL SERVICES -- (4.3%)
American Express Company ................................................. 7,800 406,575
Donaldson, Lufkin & Jenrette, Inc. ....................................... 9,900 420,131
Federal Home Loan Mortgage Corporation ................................... 8,850 358,425
Federal National Mortgage Association .................................... 7,400 386,188
General Electric Company ................................................. 12,600 667,800
--------------
2,239,119
HIGH TECHNOLOGY MANUFACTURING -- (3.7%)
Lucent Technologies, Inc. ................................................ 11,000 651,750
QUALCOMM, Inc. (a) ....................................................... 12,000 720,000
Tellabs, Inc. (a) ........................................................ 8,700 595,406
--------------
1,967,156
INSURANCE -- (2.3%)
American International Group, Inc. ....................................... 10,441 1,226,818
--------------
INTERNET -- (2.5%)
America Online, Inc. (a) ................................................. 24,600 1,297,650
--------------
MEDIA -- (2.4%)
Time Warner, Inc. ........................................................ 16,500 1,254,000
--------------
MEDICAL PRODUCTS & SUPPLIES -- (1.4%)
Medtronic, Inc. .......................................................... 14,600 727,263
--------------
MEDICAL SUPPLIES & SERVICES -- (5.7%)
Cardinal Health, Inc. .................................................... 8,115 600,510
Immunex Corporation (a) .................................................. 19,200 949,200
Johnson & Johnson ........................................................ 6,700 682,562
MedImmune, Inc. (a) ...................................................... 10,200 754,800
--------------
2,987,072
METALS & MINING -- (0.7%)
Alcoa, Inc. .............................................................. 13,600 394,400
--------------
PAPER AND FOREST PRODUCTS -- (0.8%)
International Paper Company .............................................. 14,300 426,319
--------------
PRINTING & PUBLISHING -- (1.0%)
Omnicom Group ............................................................ 6,081 541,589
--------------
RETAIL -- (6.4%)
Gap, Inc. ................................................................ 26,400 825,000
Safeway, Inc. (a) ........................................................ 19,000 857,375
Target Corporation ....................................................... 5,000 290,000
Wal-Mart Stores, Inc. .................................................... 24,000 1,383,000
--------------
3,355,375
</TABLE>
See notes to financial statements.
43
<PAGE> 45
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS -- (CONTINUED)
RETAIL-SPECIALTY -- (3.4%)
Bed Bath & Beyond, Inc. (a) .............................................. 5,900 $ 213,875
Best Buy Company, Inc. (a) ............................................... 8,500 537,625
Circuit City Stores-Circuit City Group ................................... 15,500 514,406
Home Depot, Inc. ......................................................... 10,800 539,325
--------------
1,805,231
SECURITIES/ASSET MANAGEMENT -- (1.2%)
Lehman Brothers Holdings, Inc. ........................................... 6,500 614,656
--------------
SEMICONDUCTORS -- (3.0%)
Intel Corporation ........................................................ 12,000 1,604,250
--------------
TELECOMMUNICATION EQUIPMENT -- (4.0%)
Nortel Networks Corporation .............................................. 10,000 682,500
Scientific-Atlanta, Inc. ................................................. 18,800 1,400,600
--------------
2,083,100
TELECOMMUNICATIONS -- (1.5%)
Motorola, Inc. ........................................................... 6,600 191,813
WorldCom, Inc. (a) ....................................................... 13,500 619,312
--------------
811,125
TOTAL COMMON STOCKS -- (Cost $27,760,941) 84.1% 44,263,257
--------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST MATURITY MATURITY
RATE DATE AMOUNT
---- ---- ------
<S> <C> <C> <C> <C> <C>
CORPORATE BOND
INDUSTRIALS -- (0.5%)
BP America, Inc. .......................... 8.500% 04/15/2001 $ 250,000 251,503
--------------
TOTAL CORPORATE BOND -- (Cost $250,426) 0.5% 251,503
--------------
GOVERNMENT AND AGENCY SECURITIES
FEDERAL AGENCIES -- (9.1%)
Federal Home Loan Bank .................... 4.875% 01/22/2002 2,000,000 1,939,680
Federal National Mortgage Association ..... 5.750% 06/15/2005 1,500,000 1,421,250
6.000% 05/15/2008 1,000,000 932,570
6.625% 09/15/2009 500,000 483,045
--------------
4,776,545
U.S. GOVERNMENT SECURITIES -- (3.1%)
United States Treasury Bond ............... 7.250% 08/15/2022 1,000,000 1,124,840
United States Treasury Note ............... 6.500% 05/31/2001 500,000 500,000
--------------
1,624,840
TOTAL GOVERNMENT AND AGENCY SECURITIES -- (Cost $6,580,891) 12.2% 6,401,385
---------------
</TABLE>
See notes to financial statements.
44
<PAGE> 46
VARIABLE INVESTORS SERIES TRUST
MULTIPLE STRATEGIES PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY MATURITY
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT -- (3.8%)
State Street Bank and Trust Company (b)... 4.000% 07/03/2000 $ 2,015,672 $ 2,015,000
--------------
TOTAL SHORT TERM INVESTMENT -- (Cost $2,015,000) 3.8% 2,015,000
--------------
TOTAL INVESTMENTS -- (Cost $36,607,258) 100.6% 52,931,145
LIABILITIES LESS OTHER ASSETS -- (0.6)% (335,128)
----- --------------
NET ASSETS -- 100.0% $ 52,596,017
===== ==============
</TABLE>
(a) Non-income producing security.
(b) The agreement with State Street Bank and Trust Company, dated 6/30/00, is
fully collateralized by $1,850,000 United States Treasury Bond, 7.250%,
05/15/16, with a value of $2,058,125.
See notes to financial statements.
45
<PAGE> 47
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
AUTOMOTIVE -- (3.1%)
Aftermarket Technology Company ............ 12.000% 08/01/2004 $ 56,000 $ 56,280
American Axle & Manufacturing, Inc........ 9.750% 03/01/2009 100,000 94,250
J L French Automotive Casting (a).......... 11.500% 06/01/2009 50,000 45,750
Motor Coach Industries International ...... 11.250% 05/01/2009 75,000 65,625
--------------
261,905
BROADCAST RADIO & TELEVISION -- (3.5%)
AMFM, Inc. ................................ 12.625% 10/31/2006 63,700 73,573
Big City Radio, Inc. (b) .................. 11.250% 03/15/2005 50,000 28,250
Capstar Broadcasting Partners, Inc. ....... 12.000% 07/01/2009 63,100 72,565
Capstar Radio Broadcasting Partners, Inc. . 9.250% 07/01/2007 50,000 50,375
Orion Network Systems, Inc. ............... 11.250% 01/15/2007 50,000 29,250
XM Satellite Radio Holdings, Inc. (a)...... 14.000% 03/15/2010 50,000 44,375
--------------
298,388
BUILDING & DEVELOPMENT -- (0.9%)
American Builders & Contractors Supply
Company ................................ 10.625% 05/15/2007 50,000 41,250
Formica Corporation ....................... 10.875% 03/01/2009 50,000 38,750
--------------
80,000
BUSINESS EQUIPMENT & SERVICES -- (1.6%)
Electronic Retailing Systems
International, Inc. (b)................. 13.250% 02/01/2004 50,000 10,625
Fisher Scientific International, Inc. ..... 9.000% 02/01/2008 100,000 93,250
U.S. Office Products Company .............. 9.750% 06/15/2008 125,000 28,125
--------------
132,000
CABLE TELEVISION -- (13.2%)
Charter Communications LLC ................ 8.625% 04/01/2009 125,000 110,938
CSC Holdings, Inc. ........................ 9.875% 02/15/2013 150,000 152,250
Diamond Cable Communications Plc .......... 9.125% 02/01/2008 125,000 116,875
Echostar DBS Corporation .................. 9.375% 02/01/2009 100,000 97,500
International CableTel, Inc. (b) .......... 11.500% 02/01/2006 125,000 115,625
Lenfest Communications, Inc. .............. 8.250% 02/15/2008 150,000 148,600
NTL Communications Corporation ............ 11.500% 10/01/2008 100,000 100,500
RCN Corporation (b)........................ 11.125% 10/15/2007 75,000 46,125
TeleWest Communications Plc ............... 11.250% 11/01/2008 50,000 51,000
United International Holdings, Inc. (b) ... 10.750% 02/15/2008 175,000 121,625
United Pan-Europe Communications (b) ...... 13.375% 11/01/2009 100,000 49,500
--------------
1,110,538
CHEMICALS & PLASTICS -- (2.9%)
Georgia Gulf Corporation .................. 10.375% 11/01/2007 50,000 52,000
Huntsman ICI Chemicals LLC ................ 10.125% 07/01/2009 50,000 50,500
Lyondell Chemical Company ................. 10.875% 05/01/2009 100,000 99,500
Texas Petrochemicals Corporation .......... 11.125% 07/01/2006 50,000 42,750
--------------
244,750
</TABLE>
See notes to financial statements.
46
<PAGE> 48
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (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 -- (CONTINUED)
CLOTHING & TEXTILES -- (0.8%)
GFSI, Inc. ................................ 9.625% 03/01/2007 $ 50,000 $ 36,250
Glenoit Corporation (c).................... 11.000% 04/15/2007 100,000 14,500
Pillowtex Corporation ..................... 10.000% 11/15/2006 50,000 18,250
--------------
69,000
CONGLOMERATES -- (0.5%)
Eagle Picher Industries, Inc. ............. 9.375% 03/01/2008 50,000 42,500
--------------
CONSUMER PRODUCTS -- (5.9%)
Albecca, Inc. ............................. 10.750% 08/15/2008 100,000 84,500
Amscan Holdings, Inc. ..................... 9.875% 12/15/2007 100,000 82,500
Chattem, Inc. ............................. 8.875% 04/01/2008 75,000 60,375
Jostens, Inc. (a) ......................... 12.750% 05/01/2010 50,000 49,750
Revlon Corporation ........................ 8.625% 02/01/2008 100,000 51,000
Sealy Mattress Company .................... 9.875% 12/15/2007 50,000 48,500
True Temper Sports, Inc. .................. 10.875% 12/01/2008 50,000 49,250
Volume Services America, Inc. ............. 11.250% 03/01/2009 75,000 69,000
--------------
494,875
CONTAINER & GLASS PRODUCTS -- (0.4%)
Russell-Stanley Holding, Inc. ............. 10.875% 02/15/2009 50,000 34,250
--------------
ECOLOGICAL SERVICES & EQUIPMENT -- (2.5%)
Allied Waste North America, Inc. .......... 10.000% 08/01/2009 250,000 210,000
--------------
ELECTRONICS -- (1.7%)
Fairchild Semiconductor Corporation (a) ... 10.375% 10/01/2007 50,000 50,750
Telecommunications Techniques
Company ................................ 9.750% 05/15/2008 100,000 92,500
--------------
143,250
FOOD PRODUCTS -- (2.9%)
Agrilink Foods, Inc. ...................... 11.875% 11/01/2008 100,000 80,500
Eagle Family Foods, Inc. .................. 8.750% 01/15/2008 150,000 89,250
Triarc Companies, Inc. .................... 10.250% 02/15/2009 75,000 72,750
--------------
242,500
FOREST PRODUCTS -- (0.9%)
Stone Container Corporation ............... 12.580% 08/01/2016 75,000 77,625
--------------
HEALTH CARE -- (5.2%)
Conmed Corporation ........................ 9.000% 03/15/2008 100,000 92,000
Dade International, Inc. .................. 11.125% 05/01/2006 150,000 84,750
Genesis Health Ventures, Inc. (c).......... 9.250% 10/01/2006 100,000 9,500
Hanger Orthopedic Group ................... 11.250% 06/15/2009 50,000 43,750
Hudson Respiratory Care, Inc. ............. 9.125% 04/15/2008 100,000 70,500
Kinetic Concepts, Inc. .................... 9.625% 11/01/2007 50,000 37,250
Tenet Healthcare Corporation .............. 8.625% 01/15/2007 100,000 96,250
--------------
434,000
</TABLE>
See notes to financial statements.
47
<PAGE> 49
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (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 -- (CONTINUED)
HOTELS, MOTELS, INNS & CASINOS -- (2.8%)
Florida Panthers Holdings, Inc. ........... $ 9.875% 04/15/2009 $ 75,000 $ 70,688
HMH Properties, Inc. ...................... 7.875% 08/01/2005 100,000 92,500
8.450% 12/01/2008 75,000 69,375
--------------
232,563
INDUSTRIAL PRODUCTS & EQUIPMENT -- (3.0%)
Amphenol Corporation ...................... 9.875% 05/15/2007 60,000 60,900
Cabot Safety Acquisition Corporation ...... 12.500% 07/15/2005 100,000 100,500
Continental Global Group, Inc. ............ 11.000% 04/01/2007 50,000 13,250
International Utility Structures, Inc. .... 10.750% 02/01/2008 50,000 41,250
Neenah Corporation ........................ 11.125% 05/01/2007 50,000 38,500
--------------
254,400
LEISURE & ENTERTAINMENT -- (2.0%)
Premier Parks, Inc. (b).................... 10.000% 04/01/2008 250,000 171,875
--------------
MACHINERY & EQUIPMENT -- (1.9%)
Clark Material Handling Corporation (c).... 10.750% 11/15/2006 75,000 11,625
Fairchild Corporation ..................... 10.750% 04/15/2009 50,000 33,750
United Rentals, Inc. ...................... 9.250% 01/15/2009 125,000 113,125
--------------
158,500
METALS & MINING -- (0.3%)
AEI Holding Company (a) ................... 10.500% 12/15/2005 75,000 15,375
AEI Resources, Inc. (a) ................... 11.500% 12/15/2006 100,000 10,500
--------------
25,875
OIL & GAS -- (1.5%)
Continental Resources, Inc. ............... 10.250% 08/01/2008 50,000 45,000
R&B Falcon Corporation .................... 12.250% 03/15/2006 75,000 82,875
--------------
127,875
SERVICES -- (2.6%)
Coinmach Corporation ...................... 11.750% 11/15/2005 50,000 48,250
Sitel Corporation ......................... 9.250% 03/15/2006 100,000 91,500
Spectrasite Holdings, Inc. ................ 12.875% 03/15/2010 50,000 27,750
URS Corporation (a) ....................... 12.250% 05/01/2009 50,000 50,750
--------------
218,250
STEEL -- (0.1%)
Republic Technologies International, Inc. . 13.750% 07/15/2009 75,000 9,750
--------------
SURFACE TRANSPORTATION -- (2.7%)
Allied Holdings, Inc. ..................... 8.625% 10/01/2007 50,000 44,500
Holt Group, Inc. .......................... 9.750% 01/15/2006 75,000 7,875
Railworks Corporation ..................... 11.500% 04/15/2009 50,000 48,250
Stena AB .................................. 10.500% 12/15/2005 100,000 98,500
StenaLine AB .............................. 10.625% 06/01/2008 50,000 29,500
--------------
228,625
</TABLE>
See notes to financial statements.
48
<PAGE> 50
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (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 -- (CONTINUED)
TELECOMMUNICATIONS & CELLULAR -- (24.1%)
Call-Net Enterprises, Inc. (b) ............ $ 9.270% 08/15/2007 $ 225,000 $ 107,707
Global Crossing Holdings Ltd............... 9.500% 11/15/2009 175,000 168,875
Hermes Europe Railtel B.V. ................ 11.500% 08/15/2007 100,000 88,000
Intermedia Communications of
Florida, Inc. (b)....................... 12.500% 05/15/2006 100,000 95,500
Level 3 Communications, Inc. .............. 9.125% 05/01/2008 100,000 90,250
(b) 10.500% 12/01/2008 200,000 120,000
McLeodUSA, Inc. (b) ....................... 10.500% 03/01/2007 150,000 124,500
Metromedia Fiber Network, Inc. ............ 10.000% 12/15/2009 50,000 49,250
Millicom International Cellular S.A. (b) .. 13.500% 06/01/2006 100,000 85,500
NEXTEL Communications, Inc. ............... 9.375% 11/15/2009 150,000 144,750
NEXTEL International, Inc. (b)............. 12.125% 04/15/2008 75,000 49,255
Nextlink Communications, Inc. (b) ......... 12.250% 06/01/2009 225,000 140,625
NorthPoint Communications Group, Inc. ..... 12.875% 02/15/2010 50,000 36,250
PSInet, Inc. .............................. 10.000% 02/15/2005 100,000 93,000
Telesystem International Wireless, Inc. (b) 13.250% 06/30/2007 100,000 70,500
Teligent, Inc. ............................ 11.500% 12/01/2007 100,000 79,500
Triton PCS, Inc. (b)....................... 11.000% 05/01/2008 75,000 55,125
United States Xchange LLC ................. 15.000% 07/01/2008 50,000 54,625
USA Mobile Communications, Inc. ........... 9.500% 02/01/2004 50,000 37,250
Verio, Inc. ............................... 11.250% 12/01/2008 50,000 55,750
Viatel, Inc. (b) .......................... 12.500% 04/15/2008 50,000 23,250
11.250% 04/15/2008 75,000 56,625
Voicestream Wireless Corporation (b) ...... 11.875% 11/15/2009 100,000 67,500
Williams Communications Group, Inc. ....... 10.875% 10/01/2009 75,000 73,500
Winstar Communications, Inc. (a)(b) ....... 14.375% 04/15/2010 74,000 35,520
(a) 12.750% 04/15/2010 25,000 24,250
--------------
2,026,857
TOTAL CORPORATE BONDS -- (Cost $8,613,749) 87.0% 7,330,151
--------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
------
<S> <C> <C> <C>
PREFERRED STOCKS
BANKS -- (0.2%)
California Federal Preferred Capital Corporation, 9.125% ................. 1,000 21,188
--------------
BROADCAST RADIO & TELEVISION -- (1.8%)
Benedek Communications Corporation, 11.50% (d) ........................... 75 49,125
Sinclair Broadcast Group, Inc., 11.625% .................................. 1,050 99,225
--------------
148,350
CABLE TELEVISION -- (1.2%)
Pegasus Communications Corporation, PIK, Series A, 12.75% ................ 105 105,685
--------------
</TABLE>
See notes to financial statements.
49
<PAGE> 51
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
PREFERRED STOCKS -- (CONTINUED)
FOOD SERVICES -- (0.0%)
Nebco Evans Holding Company, PIK, 11.25% (c).............................. 299 $ 187
--------------
MACHINERY & EQUIPMENT -- (0.8%)
Fairfield Manufacturing Company, Inc., Exch., 11.25% .................... 75 64,125
--------------
OIL & GAS -- (0.8%)
R&B Falcon Corporation, Sr., 13.87% ...................................... 58 66,410
--------------
PRINTING & PUBLISHING -- (2.9%)
Primedia, Inc., Series D, 10.00%.......................................... 750 72,750
Primedia, Inc., Series E, 9.20% .......................................... 1,850 169,275
--------------
242,025
TELECOMMUNICATIONS & CELLULAR -- (1.2%)
NEXTEL Communications, Inc., 13.00% ...................................... 68 72,915
NEXTEL Communications, Inc., PIK, 11.125% ................................ 30 29,100
--------------
102,015
TOTAL PREFERRED STOCKS -- (Cost $753,228) 8.9% 749,985
--------------
WARRANTS
BUSINESS EQUIPMENT & SERVICES -- (0.0%)
Electronic Retailing Systems International, Inc. (a)(d)................... 50 50
--------------
CABLE TELEVISION -- (0.0%)
Australis Holdings Property Ltd. (a)(d) .................................. 50 1
UIH Australia/Pacific, Inc. (d) .......................................... 125 1,906
--------------
1,907
OIL & GAS -- (0.3%)
R&B Falcon Corporation (a) ............................................... 50 26,262
--------------
SERVICES -- (0.0%)
Metricom, Inc. ........................................................... 50 1,013
--------------
STEEL -- (0.0%)
Bar Technologies, Inc. (a)(d) ............................................ 25 0
Republic Technologies International, Inc. ................................ 75 1
--------------
1
TELECOMMUNICATIONS & CELLULAR -- (0.2%)
Metronet Communications Corporation (a)(d) ............................... 100 15,000
--------------
TOTAL WARRANTS -- (Cost $26,705) 0.5% 44,233
--------------
</TABLE>
See notes to financial statements.
50
<PAGE> 52
VARIABLE INVESTORS SERIES TRUST
HIGH INCOME BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
<TABLE>
<CAPTION>
NAME OF ISSUER
AND TITLE OF ISSUE SHARES VALUE
------------------ ------ -----
<S> <C> <C> <C>
COMMON STOCKS
CABLE TELEVISION -- (0.0%)
CS Wireless Systems, Inc. (a)(d) ......................................... 13 $ 0
--------------
PRINTING & PUBLISHING -- (0.5%)
Medianews Group, Inc., Class A ........................................... 250 37,500
--------------
TOTAL COMMON STOCKS -- (Cost $99) 0.5% 37,500
--------------
TOTAL INVESTMENTS -- (Cost $9,393,781) 96.9% 8,161,869
OTHER ASSETS LESS LIABILITIES -- 3.1% 264,885
----- --------------
NET ASSETS -- 100.0% $ 8,426,754
===== ==============
</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, 2000, these securities
aggregated $368,333 or 4.37% of the net assets of the Portfolio.
(b) Step bond. Interest rate is the rate in effect at June 30, 2000.
(c) Issuer filed for protection under the Federal Bankruptcy Code or is in
default of interest payment.
(d) Non-income producing security.
PIK Payment in kind
See notes to financial statements.
51
<PAGE> 53
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
NAME OF ISSUER INTEREST MATURITY PRINCIPAL
AND TITLE OF ISSUE RATE DATE AMOUNT VALUE
------------------ ---- ---- ------ -----
<S> <C> <C> <C> <C>
GOVERNMENT AND AGENCY SECURITIES
COLLATERALIZED MORTGAGE OBLIGATIONS -- (9.4%)
Federal Agricultural Mortgage
Corporation (a) ........................ 7.013% 01/25/2003 $ 712,624 $ 699,263
6.710% 07/25/2008 444,080 436,446
--------------
1,135,709
FEDERAL AGENCIES -- (4.5%)
Federal National Mortgage Association ..... 7.125% 02/15/2005 390,000 391,731
7.125% 06/15/2010 160,000 160,436
--------------
552,167
MORTGAGE BACKED SECURITIES -- (41.1%)
FHA Insured Project Loan .................. 3.025% 11/01/2006 248,929 226,370
FHLMC Participation Certificates .......... 8.500% 01/01/2003 26,219 26,436
10.000% 10/01/2005 33,423 34,756
9.500% 04/01/2007 32,537 33,527
9.000% 06/01/2016 70,729 73,614
6.250% 09/15/2022 200,000 190,359
(a) 7.920% 08/01/2025 72,621 73,803
(a) 7.920% 09/25/2028 485,813 503,273
7.000% 12/01/2099 255,000 250,061
FNMA Guaranteed Real Estate Mortgage
Investment Pass-Thru Certificates ...... 6.050% 04/17/2003 188,000 183,133
8.400% 02/25/2009 181,965 184,284
7.367% 10/01/2009 263,686 260,168
(a) 7.298% 08/17/2018 235,000 231,203
11.000% 02/01/2019 418,074 452,724
11.500% 02/01/2019 374,432 408,550
9.500% 03/25/2019 355,159 373,194
(a) 6.354% 04/01/2020 69,992 69,943
10.000% 04/01/2020 55,646 59,261
7.000% 06/25/2022 250,194 244,021
(a) 7.736% 05/01/2027 372,729 382,487
(a) 6.217% 11/01/2035 295,963 287,924
GNMA Guaranteed Pass-Thru
Certificates ........................ 9.000% 12/15/2006 67,314 68,890
9.000% 01/15/2008 73,402 74,778
(a) 7.375% 03/20/2018 166,752 167,262
7.500% 04/15/2024 139,316 138,463
--------------
4,998,484
U.S. GOVERNMENT SECURITIES -- (28.3%)
U.S. Treasury Bonds ....................... 7.250% 05/15/2016 630,000 693,394
7.500% 11/15/2024 115,000 133,795
6.000% 02/15/2026 175,000 171,117
6.125% 08/15/2029 895,000 904,790
U.S. Treasury Notes ....................... 6.000% 08/15/2004 460,000 455,831
7.000% 07/15/2006 160,000 165,800
6.625% 05/15/2007 70,000 71,466
6.125% 08/15/2007 90,000 89,494
5.625% 05/15/2008 225,000 217,055
6.500% 02/15/2010 515,000 532,703
--------------
3,435,445
</TABLE>
See notes to financial statements.
52
<PAGE> 54
VARIABLE INVESTORS SERIES TRUST
U.S. GOVERNMENT BOND PORTFOLIO
SCHEDULE OF INVESTMENTS
June 30, 2000 (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 -- (CONTINUED)
TOTAL GOVERNMENT AND AGENCY SECURITIES --
(Cost $10,255,585) 83.3% $ 10,121,805
--------------
CORPORATE BONDS
BANKS -- (3.0%)
GS Escrow Corporation ..................... 7.000% 08/01/2003 $ 390,000 361,881
--------------
BROADCASTING -- (2.5%)
Time Warner, Inc. ......................... 8.110% 08/15/2006 300,000 306,060
--------------
TOTAL CORPORATE BONDS -- (Cost $713,045) 5.5% 667,941
--------------
MUNICIPAL BOND -- (0.8%)
New Jersey Economic Development
Authority .............................. 7.425% 02/15/2029 100,000 98,187
--------------
TOTAL MUNICIPAL BOND -- (Cost $100,000) 0.8% 98,187
--------------
NON-AGENCY MORTGAGES AND ASSET BACKED -- (6.2%)
Community Program Loan .................... 4.500% 04/01/2029 340,000 240,764
SLM Student Loan Trust (a) ................ 6.334% 10/25/2004 515,036 513,658
--------------
TOTAL NON-AGENCY MORTGAGES AND
ASSET BACKED -- (Cost $766,948) 6.2% 754,422
--------------
MATURITY
AMOUNT
SHORT TERM INVESTMENT
REPURCHASE AGREEMENT -- (5.1%)
State Street Bank and Trust Company (b)... 5.250% 07/03/2000 614,269 614,000
--------------
TOTAL SHORT TERM INVESTMENT --
(Cost $614,000) 5.1% 614,000
--------------
TOTAL INVESTMENTS -- (Cost $12,449,578) 100.9% 12,256,355
LIABILITIES LESS OTHER ASSETS -- (0.9)% (103,854)
-------- --------------
NET ASSETS -- 100.0% $ 12,152,501
======== ==============
</TABLE>
(a) Variable rate instrument. Interest rate is the rate in effect at June
30, 2000.
(b) The agreement with State Street Bank and Trust Company, dated 6/30/00,
is fully collateralized by $505,000 United States Treasury Bond,
8.125%, 08/15/21, with a value of $632,513.
See notes to financial statements.
53
<PAGE> 55
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
SMALL CAP WORLD
GROWTH EQUITY GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- ---------
<S> <C> <C> <C>
ASSETS
Investments - securities, at value...................... $ 26,372,755 $ 23,708,625 $ 75,883,833
Foreign currency holdings, at value (cost $3,801)....... 0 3,806 0
Cash.................................................... 538 0 360
Receivable for trust shares sold........................ 463,674 0 0
Receivable for securities sold.......................... 145,653 870,592 0
Due from adviser........................................ 3,370 8,980 0
Unrealized appreciation on forward foreign currency
contracts...................................... 0 18,347 0
Prepaid expenses........................................ 1,695 1,746 6,096
Income receivable....................................... 195 14,069 11,250
Foreign income tax reclaim receivable................... 0 16,929 0
-------------- -------------- --------------
TOTAL ASSETS........................................ 26,987,880 24,643,094 75,901,539
LIABILITIES
Payable for securities purchased........................ 244,308 267,719 476,687
Advisory fee payable.................................... 16,950 14,290 41,687
Payable for trust shares redeemed....................... 0 416,010 63,016
Unrealized depreciation on forward foreign currency
contracts...................................... 0 63,937 0
Cash Overdraft.......................................... 0 391,078 0
Accounts payable and accrued expenses................... 27,275 27,500 35,136
-------------- -------------- --------------
TOTAL LIABILITIES................................... 288,533 1,180,534 616,526
-------------- -------------- --------------
TOTAL NET ASSETS................................. $ 26,699,347 $ 23,462,560 $ 75,285,013
============== ============== ==============
NET ASSETS
Paid in Capital......................................... $ 11,474,745 $ 9,269,400 $ 19,766,712
Undistributed (distributions in
excess of) net investment income................... (149,586) (45,600) (121,452)
Accumulated net realized gain (loss) on
investments and foreign currency transactions...... 5,311,950 11,417,101 27,638,748
Net unrealized appreciation (depreciation) of:
Investments........................................ 10,062,238 2,867,089 28,001,005
Foreign currency................................... 0 (45,430) 0
-------------- --------------- --------------
TOTAL NET ASSETS................................. $ 26,699,347 $ 23,462,560 $ 75,285,013
============== ============== ==============
NET ASSET VALUE PER SHARE
(based on shares of beneficial interest
outstanding, unlimited number of shares
authorized without par value)........................... $ 34.420 $ 22.515 $ 52.869
Total shares outstanding at end of period............... 775,688 1,042,070 1,423,988
Cost of investment securities........................... $ 16,310,517 $ 20,841,536 $ 47,882,828
</TABLE>
See notes to financial statements.
54
<PAGE> 56
<TABLE>
<CAPTION>
MATRIX GROWTH & MULTIPLE HIGH INCOME U.S. GOVERNMENT
EQUITY INCOME STRATEGIES BOND BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 17,978,027 $ 22,160,162 $ 52,931,145 $ 8,161,869 $ 12,256,355
0 0 0 0 0
0 557 636 37,266 100
0 0 0 0 0
511,300 974,657 0 90,458 0
5,068 2,607 0 7,944 7,522
0 0 0 0 0
1,955 1,845 4,779 599 1,017
17,775 31,101 105,860 212,067 183,413
0 5,728 0 188 0
-------------- -------------- -------------- -------------- --------------
18,514,125 23,176,657 53,042,420 8,510,391 12,448,407
708,079 1,059,793 334,005 0 249,856
9,686 14,130 29,502 5,083 5,907
13,417 628,532 48,933 36,491 9,471
0 0 0 0 0
12,975 0 0 0 0
32,550 38,366 33,963 42,063 30,672
-------------- -------------- -------------- -------------- --------------
776,707 1,740,821 446,403 83,637 295,906
-------------- -------------- -------------- -------------- --------------
$ 17,737,418 $ 21,435,836 $ 52,596,017 $ 8,426,754 $ 12,152,501
============== ============== ============== ============== ==============
$ 11,138,907 $ 17,325,892 $ 26,669,453 $ 8,754,016 $ 11,791,185
17,289 259,657 208,315 1,767,784 1,144,960
5,378,758 3,877,419 9,394,362 (863,134) (590,421)
1,202,464 (27,132) 16,323,887 (1,231,912) (193,223)
0 0 0 0 0
-------------- -------------- -------------- -------------- --------------
$ 17,737,418 $ 21,435,836 $ 52,596,017 $ 8,426,754 $ 12,152,501
============== ============== ============== ============== ==============
$ 18.174 $ 16.163 $ 21.308 $ 9.018 $ 10.532
975,952 1,326,263 2,468,385 934,411 1,153,858
$ 16,775,563 $ 22,187,294 $ 36,607,258 $ 9,393,781 $ 12,449,578
</TABLE>
55
<PAGE> 57
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
SMALL CAP WORLD
GROWTH EQUITY GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- ---------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest income......................................... $ 3,685 $ 17,525 $ 106,043
Dividend income......................................... 482 135,385 154,078
Foreign taxes withheld.................................. 0 (16,808) (45)
-------------- -------------- --------------
TOTAL INCOME....................................... 4,167 136,102 260,076
EXPENSES
Advisory fee............................................ 96,808 92,987 263,833
Custodian fee........................................... 33,440 53,167 28,194
Administrative fee...................................... 14,434 20,690 62,092
Professional fees and expenses.......................... 12,567 12,469 11,878
Transfer agent fee...................................... 2,121 850 849
Trustees fees and other expenses........................ 9,329 10,264 14,703
-------------- -------------- --------------
TOTAL EXPENSES........................................ 168,699 190,427 381,549
-------------- -------------- --------------
Expenses borne by the adviser........................... (14,598) (30,758) 0
Expense reductions...................................... (348) (262) (21)
-------------- -------------- --------------
NET EXPENSES.......................................... 153,753 159,407 381,528
-------------- -------------- --------------
NET INVESTMENT INCOME (LOSS)........................ (149,586) (23,305) (121,452)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain (loss) on investments................... 2,187,907 7,390,152 4,186,845
Net realized gain (loss) on foreign currency transactions. 0 22,489 0
Change in unrealized appreciation (depreciation) of:
Investments............................................. 3,046,255 (5,705,885) (4,318,793)
Foreign currency........................................ 0 (19,587) 0
-------------- --------------- --------------
NET REALIZED AND UNREALIZED
GAIN (LOSS)......................................... 5,234,162 1,687,169 (131,948)
-------------- -------------- --------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............................... $ 5,084,576 $ 1,663,864 $ (253,400)
============== ============== ==============
</TABLE>
See notes to financial statements.
56
<PAGE> 58
<TABLE>
<CAPTION>
MATRIX GROWTH & MULTIPLE HIGH INCOME U.S. GOVERNMENT
EQUITY INCOME STRATEGIES BOND BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
$ 1,938 $ 31,343 $ 246,094 $ 551,620 $ 404,390
110,399 206,134 96,225 25,029 0
(19) (2,341) (28) 0 0
-------------- -------------- -------------- -------------- --------------
112,318 235,136 342,291 576,649 404,390
61,535 86,767 178,720 40,481 35,546
33,887 30,710 31,175 34,725 25,801
20,289 25,087 41,147 18,606 15,598
12,567 12,469 12,471 12,469 12,469
849 2,121 849 849 849
9,612 10,463 11,485 9,826 8,931
-------------- -------------- -------------- -------------- --------------
138,739 167,617 275,847 116,956 99,194
-------------- -------------- -------------- -------------- --------------
(29,725) (22,828) 0 (47,001) (47,916)
(145) (177) (4,333) (559) (921)
-------------- -------------- -------------- -------------- --------------
108,869 144,612 271,514 69,396 50,357
-------------- -------------- -------------- -------------- --------------
3,449 90,524 70,777 507,253 354,033
1,477,743 423,251 1,755,821 (539,629) (203,561)
0 0 0 0 0
(1,750,522) (1,388,839) (1,653,771) (437,986) 327,982
0 0 0 0 0
-------------- -------------- -------------- -------------- --------------
(272,779) (965,588) 102,050 (977,615) 124,421
-------------- -------------- -------------- -------------- --------------
$ (269,330) $ (875,064) $ 172,827 $ (470,362) $ 478,454
============== ============== ============== ============== ==============
</TABLE>
57
<PAGE> 59
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SMALL CAP GROWTH PORTFOLIO
SIX MONTHS ENDED
06/30/00 YEAR ENDED
(UNAUDITED) 12/31/99
----------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss)..................................... $ (149,586) $ (154,990)
Net realized gain (loss) on investments.......................... 2,187,907 5,077,522
Net realized gain (loss) on foreign currency transactions........ 0 0
Change in net unrealized appreciation (depreciation) of:
Investments.................................................... 3,046,255 3,131,307
Foreign currency............................................... 0 0
--------------- --------------
Net increase (decrease) in net assets resulting from operations.. 5,084,576 8,053,839
Dividends and distributions to Shareholders from:
Net investment income............................................ 0 0
Net realized gain on investments................................. 0 0
--------------- --------------
Net decrease in net assets resulting from distributions.......... 0 0
Trust share transactions:
Shares sold...................................................... 8,418,442 5,563,491
Shares issued to shareholders in reinvestments................... 0 0
Shares repurchased............................................... (5,901,396) (9,157,685)
--------------- --------------
Net increase (decrease) in net assets resulting from
trust share transactions....................................... 2,517,046 (3,594,194)
--------------- --------------
Total increase (decrease) in net assets.......................... 7,601,622 4,459,645
Net assets
Beginning of period.............................................. 19,097,725 14,638,080
--------------- --------------
END OF PERIOD (1)................................................ $ 26,699,347 $ 19,097,725
=============== ==============
(1) Including undistributed (distributions in
excess of) net investment income................................. $ (149,586) $ 0
CHANGE IN FUND SHARES:
Shares sold...................................................... 271,113 312,317
Shares issued to shareholders in reinvestments................... 0 0
Shares repurchased............................................... (195,884) (581,427)
--------------- --------------
Net (decrease) increase........................................ 75,229 (269,110)
=============== ==============
</TABLE>
See notes to financial statements.
58
<PAGE> 60
<TABLE>
<CAPTION>
WORLD EQUITY PORTFOLIO GROWTH PORTFOLIO MATRIX EQUITY PORTFOLIO
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 YEAR ENDED 06/30/00 YEAR ENDED 06/30/00 YEAR ENDED
(UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99
----------- -------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ (23,305) $ 350,535 $ (121,452) $ (347,228) $ 3,449 $ 13,840
7,390,152 4,188,738 4,186,845 23,814,435 1,477,743 3,957,832
22,489 91,535 0 0 0 0
(5,705,885) 4,670,737 (4,318,793) (498,142) (1,750,522) (1,046,765)
(19,587) 37,349 0 0 0 0
--------------- -------------- -------------- -------------- -------------- --------------
1,663,864 9,338,894 (253,400) 22,969,065 (269,330) 2,924,907
0 (93,872) 0 0 0 0
0 (209,434) 0 (2,424,345) 0 (425,000)
-------------- -------------- -------------- -------------- -------------- --------------
0 (303,306) 0 (2,424,345) 0 (425,000)
4,748,770 3,048,195 5,591,638 13,815,441 331,231 3,899,628
0 303,306 0 2,424,345 0 425,000
(7,895,722) (10,841,544) (8,868,548) (42,832,627) (4,570,508) (6,829,370)
-------------- -------------- -------------- -------------- -------------- --------------
(3,146,952) (7,490,043) (3,276,910) (26,592,841) (4,239,277) (2,504,742)
-------------- -------------- -------------- -------------- -------------- --------------
(1,483,088) 1,545,545 (3,530,310) (6,048,121) (4,508,607) (4,835)
24,945,648 23,400,103 78,815,323 84,863,444 22,246,025 22,250,860
-------------- -------------- -------------- -------------- -------------- --------------
$ 23,462,560 $ 24,945,648 $ 75,285,013 $ 78,815,323 $ 17,737,418 $ 22,246,025
============== ============== ============== ============== ============== ==============
$ (45,600) $ (22,295) $ (121,452) $ 0 $ 17,289 $ 13,840
209,672 211,317 107,579 303,739 18,617 233,036
0 20,889 0 56,747 0 25,613
(364,381) (753,695) (170,171) (943,558) (257,249) (404,869)
-------------- -------------- -------------- -------------- -------------- --------------
(154,709) (521,489) (62,592) (583,072) (238,632) (146,220)
============== ============== ============== ============== ============== ==============
</TABLE>
59
<PAGE> 61
VARIABLE INVESTORS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH & INCOME PORTFOLIO
SIX MONTHS ENDED
06/30/00 YEAR ENDED
(UNAUDITED) 12/31/99
----------- --------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
From operations:
Net investment income (loss)..................................... $ 90,524 $ 169,996
Net realized gain (loss) on investments.......................... 423,251 3,519,557
Net realized gain (loss) on foreign currency transactions........ 0 (24)
Change in net unrealized appreciation (depreciation) of:
Investments.................................................... (1,388,839) (2,005,754)
Foreign currency............................................... 0 0
--------------- --------------
Net increase (decrease) in net assets resulting from operations.. (875,064) 1,683,775
Dividends and distributions to Shareholders from:
Net investment income............................................ 0 0
Net realized gain on investments................................. 0 (637,116)
--------------- --------------
Net decrease in net assets resulting from distributions.......... 0 (637,116)
Trust share transactions:
Shares sold...................................................... 1,359,453 5,810,394
Shares issued to shareholders in reinvestments................... 0 637,116
Shares repurchased............................................... (6,180,982) (8,505,404)
--------------- --------------
Net increase (decrease) in net assets resulting from
trust share transactions....................................... (4,821,529) (2,057,894)
--------------- --------------
Total increase (decrease) in net assets.......................... (5,696,593) (1,011,235)
Net assets
Beginning of period.............................................. 27,132,429 28,143,664
--------------- --------------
END OF PERIOD (1)................................................ $ 21,435,836 $ 27,132,429
=============== ==============
(1) Including undistributed (distributions in
excess of) net investment income................................. $ 259,657 $ 169,133
CHANGE IN FUND SHARES:
Shares sold...................................................... 83,453 343,836
Shares issued to shareholders in reinvestments................... 0 36,710
Shares repurchased............................................... (397,726) (509,894)
--------------- --------------
Net (decrease) increase........................................ (314,273) (129,348)
=============== ==============
</TABLE>
See notes to financial statements.
60
<PAGE> 62
<TABLE>
<CAPTION>
MULTIPLE STRATEGIES PORTFOLIO HIGH INCOME BOND PORTFOLIO U.S. GOVERNMENT BOND PORTFOLIO
SIX MONTHS ENDED SIX MONTHS ENDED SIX MONTHS ENDED
06/30/00 YEAR ENDED 06/30/00 YEAR ENDED 06/30/00 YEAR ENDED
(UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99 (UNAUDITED) 12/31/99
----------- -------- ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C>
$ 70,777 $ 137,538 $ 507,253 $ 1,419,005 $ 354,033 $ 795,757
1,755,821 7,638,542 (539,629) (197,804) (203,561) (385,416)
0 0 0 0 0 0
(1,653,771) 3,275,801 (437,986) (797,306) 327,982 (706,986)
0 0 0 0 0 0
-------------- -------------- -------------- -------------- -------------- --------------
172,827 11,051,881 (470,362) 423,895 478,454 (296,645)
0 0 0 (2,028) 0 0
0 (1,281,577) 0 (21,651) 0 (11,813)
-------------- -------------- -------------- -------------- -------------- --------------
0 (1,281,577) 0 (23,679) 0 (11,813)
7,516,587 13,297,504 1,726,569 7,799,154 738,764 3,074,040
0 1,281,577 0 23,679 0 11,813
(5,499,655) (17,239,439) (8,296,018) (14,272,548) (1,652,289) (5,660,225)
-------------- -------------- -------------- -------------- -------------- --------------
2,016,932 (2,660,358) (6,569,449) (6,449,715) (913,525) (2,574,372)
-------------- -------------- -------------- -------------- -------------- --------------
2,189,759 7,109,946 (7,039,811) (6,049,499) (435,071) (2,882,830)
50,406,258 43,296,312 15,466,565 21,516,064 12,587,572 15,470,402
-------------- -------------- -------------- -------------- -------------- --------------
$ 52,596,017 $ 50,406,258 $ 8,426,754 $ 15,466,565 $ 12,152,501 $ 12,587,572
============== ============== ============== ============== ============== ==============
$ 208,315 $ 137,538 $ 1,767,784 $ 1,260,531 $ 1,144,960 $ 790,927
369,519 723,413 187,630 836,320 71,533 300,564
0 72,210 0 2,516 0 1,167
(262,940) (959,367) (912,524) (1,527,052) (161,702) (556,455)
-------------- -------------- -------------- -------------- -------------- --------------
106,579 (163,744) (724,894) (688,216) (90,169) (254,724)
============== ============== ============== ============== ============== ===============
</TABLE>
61
<PAGE> 63
VARIABLE INVESTORS SERIES TRUST
SMALL CAP GROWTH PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, ------------
JUNE 30, 2000 ---------------------------------------- DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995 (1)
----------- ---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $27.265 $ 15.098 $ 15.578 $ 16.050 $ 12.638 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Loss.................... (0.193) (0.199)(5) (0.000) (0.152) (0.091) (0.042)
Net Realized and Unrealized Gain
(Loss) on Investments.............. 7.348 12.366 (0.480) 0.243 3.560 3.047
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ 7.155 12.167 (0.480) 0.091 3.469 3.005
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
From Net Realized Capital Gains........ (0.000) (0.000) (0.000) (0.435) (0.057) (0.367)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.128) (0.000) (0.000)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.000) (0.000) (0.563) (0.057) (0.367)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 34.420 $ 27.265 $ 15.098 $ 15.578 $ 16.050 $ 12.638
======== ========= ========= ========= ========= =========
TOTAL RETURN (2) (3)........................ 26.25% 80.66% (3.12)% 0.73% 27.39% 30.08%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 26,699 $ 19,098 $ 14,638 $ 18,254 $ 13,803 $ 3,813
Ratios to Average Net Assets:
Gross Expenses (4)................. 1.48% 1.68% 1.84% 1.79% 2.38% 9.00%
Net Expenses (4)................... 1.35% 1.35% 1.35% 1.35% 1.35% 1.35%
Net Investment Loss (4)............ (1.31)% (1.23)% (1.20)% (1.06)% (0.90)% (0.79)%
Portfolio Turnover Rate................ 77.72% 172.48% 105.35% 104.72% 72.66% 73.76%
</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) Annualized for periods of less than one year.
(5) Based on monthly average shares outstanding during the period.
See notes to financial statements.
62
<PAGE> 64
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, 2000 -------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 20.844 $ 13.618 $ 14.084 $ 15.062 $ 13.823 $ 11.752
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)........... (0.025) 0.277 0.130 0.068 0.016 0.014
Net Realized and Unrealized Gain
(Loss) on Investments......... 1.696 7.176 0.593 1.392 1.647 2.872
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ 1.671 7.453 0.723 1.460 1.663 2.886
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.070) (0.165) (0.161) (0.013) (0.000)
In Excess of Net Investment Income..... (0.000) (0.000) (0.174) (0.126) (0.051) (0.000)
From Net Realized Capital Gains........ (0.000) (0.157) (0.850) (2.056) (0.360) (0.815)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.000) (0.095) (0.000) (0.000)
---------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.227) (1.189) (2.438) (0.424) (0.815)
---------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 22.515 $ 20.844 $ 13.618 $ 14.084 $ 15.062 $ 13.823
======== ========= ========= ========= ========= =========
TOTAL RETURN (1) (2)........................ 8.41% 55.46% 5.11% 9.98% 12.33% 24.32%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 23,463 $ 24,946 $ 23,400 $ 24,772 $ 24,534 $ 18,191
Ratios to average net assets:
Gross Expenses (3)................. 1.43% 1.57% 1.51% 1.47% 1.50% 1.67%
Net Expenses (3)................... 1.20% 1.20% 1.20% 1.20% 1.20% 1.20%
Net Investment Income (3).......... (0.18)% 1.71% 0.27% 0.25% 0.10% 0.12%
Portfolio Turnover Rate................ 122.63% 163.67% 150.22% 120.50% 61.14% 97.85%
</TABLE>
(1) Total returns would have been lower had certain expenses not been borne
by the adviser or its affiliates.
(2) 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.
(3) Annualized for periods of less than one year.
See notes to financial statements.
63
<PAGE> 65
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, 2000 -----------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 53.018 $ 41.004 $ 34.702 $ 30.623 $ 25.866 $ 20.056
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income (Loss)........... (0.085) (0.219)(4) (0.000) (0.082) (0.063) 0.007
Net Realized and Unrealized Gain
(Loss) on Investments.............. (0.064) 13.957 11.465 7.226 6.736 7.419
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ (0.149) 13.738 11.465 7.144 6.673 7.426
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.000) (0.000) (0.000) (0.173)
In Excess of Net Investment Income..... (0.000) (0.000) (0.000) (0.000) (0.002) (0.000)
From Net Realized Capital Gains........ (0.000) (1.724) (5.163) (3.065) (1.914) (1.443)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (1.724) (5.163) (3.065) (1.916) (1.616)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 52.869 $ 53.018 $ 41.004 $ 34.702 $ 30.623 $ 25.866
======== ========= ========= ========= ========= =========
TOTAL RETURN (1) (2)........................ (0.29)% 34.53% 33.29% 23.62% 25.74% 37.12%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 75,285 $ 78,815 $ 84,863 $ 65,273 $ 54,565 $ 42,919
Ratios to average net assets:
Gross Expenses (3)................. 1.01% 1.02% 1.03% 1.10% 1.17% 1.17%
Net Expenses (3)................... 1.01% 1.02% 1.02% 1.10% 1.17% 1.17%
Net Investment Income (Loss) (3)... (0.32)% (0.49)% (0.39)% (0.25)% (0.23)% 0.01%
Portfolio Turnover Rate................ 24.79% 56.23% 86.91% 54.74% 67.82% 166.87%
</TABLE>
(1) Total returns would have been lower had certain expenses not been borne
by the adviser or its affiliates.
(2) 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.
(3) Annualized for periods of less than one year.
(4) Based on monthly average shares outstanding during the period.
See notes to financial statements.
64
<PAGE> 66
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, 2000 -----------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 18.316 $ 16.351 $ 14.275 $ 15.254 $ 15.704 $ 12.372
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.................. 0.006 0.011 0.047 0.287 0.659 0.559
Net Realized and Unrealized Gain
(Loss) on Investments.............. (0.148) 2.271 2.939 2.965 0.063 3.560
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ (0.142) 2.282 2.986 3.252 0.722 4.119
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.056) (0.291) (0.654) (0.494)
In Excess of Net Investment Income..... (0.000) (0.000) (0.041) (0.000) (0.000) (0.000)
From Net Realized Capital Gains........ (0.000) (0.317) (0.813) (3.940) (0.518) (0.293)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.317) (0.910) (4.231) (1.172) (0.787)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 18.174 $ 18.316 $ 16.351 $ 14.275 $ 15.254 $ 15.704
======== ========= ========= ========= ========= =========
TOTAL RETURN (1) (2)........................ (0.76)% 14.14% 21.11% 22.05% 4.62% 33.45%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 17,737 $ 22,246 $ 22,251 $ 14,521 $ 14,448 $ 16,018
Ratios to average net assets:
Gross Expenses (3)................. 1.47% 1.27% 1.48% 1.54% 1.48% 1.51%
Net Expenses (3)................... 1.15% 1.15% 1.15% 1.15% 1.15% 1.15%
Net Investment Income (3).......... 0.04% 0.06% 0.36% 1.63% 3.74% 3.89%
Portfolio Turnover Rate................ 82.73% 127.65% 138.23% 169.75% 19.41% 48.20%
</TABLE>
(1) Total returns would have been lower had certain expenses not been borne
by the adviser or its affiliates.
(2) 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.
(3) Annualized for periods of less than one year.
See notes to financial statements.
65
<PAGE> 67
VARIABLE INVESTORS SERIES TRUST
GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
-CONTINUED-
<TABLE>
<CAPTION>
PERIOD ENDED
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, ------------
JUNE 30, 2000 ---------------------------------------- DECEMBER 31,
(UNAUDITED) 1999 1998 1997 1996 1995 (1)
----------- ---- ---- ---- ---- ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 16.539 $ 15.901 $ 14.567 $ 12.421 $ 11.171 $ 10.000
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.................. 0.093 0.103 0.112 0.127 0.070 0.045
Net Realized and Unrealized Gain
(Loss) on Investments.............. (0.469) 0.912 1.696 3.351 1.291 1.266
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ (0.376) 1.015 1.808 3.478 1.361 1.311
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.107) (0.127) (0.070) (0.045)
In Excess of Net Investment Income..... (0.000) (0.000) (0.005) (0.000) (0.001) (0.000)
From Net Realized Capital Gains........ (0.000) (0.377) (0.362) (1.205) (0.040) (0.095)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.377) (0.474) (1.332) (0.111) (0.140)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 16.163 $ 16.539 $ 15.901 $ 14.567 $ 12.421 $ 11.171
======== ========= ========= ========= ========= =========
TOTAL RETURN (2) (3)........................ (2.24)% 6.27% 12.43% 28.20% 12.15% 13.09%
Ratios & Supplemental Data
Net Assets at End of Period (000's).... $ 21,436 $ 27,132 $ 28,144 $ 21,061 $ 10,300 $ 3,335
Ratios to Average Net Assets:
Gross Expenses (4)................. 1.45% 1.26% 1.33% 1.60% 2.63% 7.27%
Net Expenses (4)................... 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Net Investment Income (4).......... 0.78% 0.59% 0.70% 1.05% 0.82% 1.17%
Portfolio Turnover Rate................ 32.20% 94.46% 78.37% 162.94% 131.85% 33.49%
</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) Annualized for periods of less than one year.
See notes to financial statements.
66
<PAGE> 68
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, 2000 ------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 21.342 $ 17.143 $ 14.158 $ 12.699 $ 12.043 $ 10.022
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.................. 0.026 0.058 0.078 0.103 0.143 0.137
Net Realized and Unrealized Gain
(Loss) on Investments.............. (0.060) 4.638 4.035 2.629 2.069 3.086
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ (0.034) 4.696 4.113 2.732 2.212 3.223
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.078) (0.103) (0.144) (0.136)
In Excess of Net Investment Income (1). (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
From Net Realized Capital Gains........ (0.000) (0.497) (1.050) (1.170) (1.412) (1.066)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.497) (1.128) (1.273) (1.556) (1.202)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 21.308 $ 21.342 $ 17.143 $ 14.158 $ 12.699 $ 12.043
======== ========= ========= ========= ========= =========
TOTAL RETURN (2) (3)........................ (0.17)% 28.00% 29.15% 21.79% 18.29% 32.24%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 52,596 $ 50,406 $ 43,296 $ 35,119 $ 31,884 $ 26,380
Ratios to average net assets:
Gross Expenses (4)................. 1.08% 1.10% 1.15% 1.21% 1.32% 1.33%
Net Expenses (4)................... 1.06% 1.10% 1.15% 1.19% 1.20% 1.20%
Net Investment Income (4).......... 0.28% 0.30% 0.50% 0.69% 1.16% 1.14%
Portfolio Turnover Rate................ 20.49% 60.70% 74.00% 45.87% 92.21% 161.10%
</TABLE>
(1) For 1998 and 1997, amount was less than $0.001 per share.
(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) Annualized for periods of less than one year.
See notes to financial statements.
67
<PAGE> 69
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, 2000 ---------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 9.321 $ 9.165 $ 9.720 $ 9.173 $ 8.589 $ 7.914
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.................. 1.132 0.881 0.766 0.640 0.596 0.779
Net Realized and Unrealized Gain
(Loss) on Investments.............. (1.435) (0.713) (0.471) 0.598 0.624 0.717
-------- --------- ---------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ (0.303) 0.168 0.295 1.238 1.220 1.496
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.001) (0.691) (0.681) (0.596) (0.779)
In Excess of Net Investment Income..... (0.000) (0.000) (0.148) (0.010) (0.040) (0.042)
From Net Realized Capital Gains........ (0.000) (0.011) (0.011) (0.000) (0.000) (0.000)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.012) (0.850) (0.691) (0.636) (0.821)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 9.018 $ 9.321 $ 9.165 $ 9.720 $ 9.173 $ 8.589
======== ========= ========= ========= ========= =========
TOTAL RETURN (1) (2)........................ (3.25)% 1.83% 3.04% 13.54% 14.20% 18.98%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 8,427 $ 15,467 $ 21,516 $ 17,916 $ 12,835 $ 8,764
Ratios to average net assets:
Gross Expenses (3)................. 2.02% 1.50% 1.46% 1.64% 1.99% 2.04%
Net Expenses (3)................... 1.20% 1.20% 1.20% 1.20% 1.18% 1.20%
Net Investment Income (3).......... 8.77% 7.50% 6.89% 7.15% 7.96% 8.62%
Portfolio Turnover Rate................ 11.95% 38.23% 54.70% 91.54% 105.48% 82.15%
</TABLE>
(1) Total returns would have been lower had certain expenses not been borne
by the adviser or its affiliates.
(2) 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.
(3) Annualized for periods of less than one year.
See notes to financial statements.
68
<PAGE> 70
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, 2000 --------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING OF PERIOD...... $ 10.118 $ 10.322 $ 10.161 $ 9.938 $ 10.510 $ 9.718
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.................. 0.357 0.635 0.430 0.630 0.629 0.765
Net Realized and Unrealized Gain
(Loss) on Investments.............. 0.057 (0.831) 0.360 0.299 (0.385) 1.191
-------- --------- --------- --------- --------- ---------
TOTAL FROM INVESTMENT OPERATIONS............ 0.414 (0.196) 0.790 0.929 0.244 1.956
-------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
From Net Investment Income............. (0.000) (0.000) (0.427) (0.617) (0.610) (0.765)
In Excess of Net Investment Income..... (0.000) (0.000) (0.008) (0.000) (0.000) (0.045)
From Net Realized Capital Gains........ (0.000) (0.008) (0.192) (0.068) (0.206) (0.354)
In Excess of Net Realized Capital Gains (0.000) (0.000) (0.002) (0.021) (0.000) (0.000)
-------- --------- --------- --------- --------- ---------
Total Distributions.................... (0.000) (0.008) (0.629) (0.706) (0.816) (1.164)
-------- --------- --------- --------- --------- ---------
NET ASSET VALUE AT END OF PERIOD............ $ 10.532 $ 10.118 $ 10.322 $ 10.161 $ 9.938 $ 10.510
======== ========= ========= ========= ========= =========
TOTAL RETURN (1) (2)........................ 4.05% (1.90)% 7.79% 9.37% 2.36% 20.18%
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period (000's).... $ 12,153 $ 12,588 $ 15,470 $ 9,679 $ 10,734 $ 11,618
Ratios to average net assets:
Gross Expenses (3)................. 1.67% 1.39% 1.59% 1.73% 1.66% 1.59%
Net Expenses (3)................... 0.85% 0.85% 0.85% 0.85% 0.85% 0.85%
Net Investment Income (3).......... 5.98% 5.48% 5.43% 5.86% 5.80% 6.18%
Portfolio Turnover Rate................ 44.89% 68.89% 66.12% 124.75% 244.96% 252.94%
</TABLE>
(1) Total returns would have been lower had certain expenses not been borne
by the adviser or its affiliates.
(2) 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.
(3) Annualized for periods of less than one year.
See notes to financial statements.
69
<PAGE> 71
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (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 is comprised of eight 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
Small Cap Growth Portfolio, the World Equity Portfolio, the Growth Portfolio,
the Matrix Equity Portfolio, the Growth & Income Portfolio, the Multiple
Strategies Portfolio, the High Income Bond Portfolio, and the U.S. Government
Bond Portfolio.
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 Portfolios' 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 provided by a broker or dealer.
Debt securities are generally valued on the basis of valuations furnished by
pricing services which determine 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. Investments in other mutual funds are valued at the
net asset value of those funds. Securities for which current market quotations
are not readily available are stated at fair value as determined in good faith
under the direction of the Trustees.
FOREIGN SECURITIES: Foreign securities traded on a recognized securities
exchange are valued at the last sales price in the principal market where they
are traded or, if closing prices are unavailable, at the last bid price
available prior to the time a Portfolio's net asset value is determined. Foreign
portfolio security prices are furnished by quotation services expressed in the
local currency's value and are translated into U.S. dollars at the current rate
of exchange. Foreign securities for which prices cannot be obtained by the
quotation services are valued using dealer supplied quotations.
REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, the Trust's custodian takes possession of the underlying collateral
securities, the value of which at least equals the principal amount, including
interest, of the repurchase transaction. To the extent that any repurchase
transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to ensure the adequacy of the collateral. In
the event of default of the obligation to repurchase, the Portfolio has the
right to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings, and the Portfolio
may suffer a loss.
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.
70
<PAGE> 72
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
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
also 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 net realized
capital gains, for the fiscal year.
As of December 31, 1999, the High Income Bond Portfolio and the U.S.
Government Bond Portfolio had realized capital loss carryforwards, for Federal
income tax purposes, of $232,154 which expires on December 31, 2007, and
$376,206 which expires on December 31, 2007, respectively, available to be used
to offset future realized capital gains.
Any net capital and currency losses incurred after October 31, within a
Portfolio's tax year, are deemed to arise on the first day of a Portfolio's next
tax year. The Portfolios incurred and elected to defer net capital and currency
losses as follows, during such period in fiscal 1999:
<TABLE>
<CAPTION>
PORTFOLIO AMOUNT
--------- ------
<S> <C>
World Equity Portfolio $15,278
Growth & Income Portfolio 15
High Income Bond Portfolio 75,604
U.S. Government Bond Portfolio 10,654
</TABLE>
71
<PAGE> 73
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
EXPENSES: Expenses directly attributable to a Portfolio are charged to
that Portfolio. Expenses not directly attributable to a Portfolio are allocated
equally 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 declares and
distributes dividends from net investment income, if any, and distributes its
net realized capital gains, if any, at least annually. 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 the shareholder 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: Value Line, Inc. as sub-adviser to the Growth and Multiple Strategies
Portfolios, State Street Bank and Trust Company through its investment
management division State Street Global Advisors as sub-adviser to the Matrix
Equity Portfolio, Federated Investment Counseling as sub-adviser to the High
Income Bond Portfolio and Strong Capital Management, Inc. as sub-adviser to the
U.S. Government Bond 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 Asset Management, 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: Evergreen
Investment Management Company (formerly known as the 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 agreements, the Trust pays
compensation monthly to FVAS at the following annual rates based on the average
daily net assets of each Portfolio taken separately: 0.85% of average daily net
assets for the Small Cap Growth Portfolio; 0.70% of the first $200 million of
average daily net assets, 0.625% of the next $300 million of average daily net
assets, and 0.50% of average daily net assets in excess of $500 million for the
World Equity Portfolio; 0.70% of average daily net assets for the Growth and the
Multiple Strategies Portfolios; 0.65% of the first $100 million of average daily
net assets and 0.55% of average daily net assets in excess of $100 million for
the Matrix Equity Portfolio; 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 Income Bond 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.
72
<PAGE> 74
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
LIMITATIONS
First Variable has agreed to reduce its compensation for certain services
to the Trust (and, if necessary, bear certain expenses of each of the
Portfolios) through April 1, 2000 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 U.S. Government Bond Portfolio); provided, however, that the Advisor
and First Variable Life can terminate the expense reimbursement under certain
circumstances upon sixty (60) days' written notice to the Trust.
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, 2000 the Trust's expenses were reduced by $6,766.
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
or FVAS. No remuneration is paid by the Trust to any Trustee or officer of the
Trust who is affiliated with First Variable, ILoNA or FVAS.
NOTE D -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Portfolio for the six months ended June 30, 2000
were as follows:
<TABLE>
<CAPTION>
NON- NON-
GOVERNMENT GOVERNMENT GOVERNMENT GOVERNMENT
PURCHASES PURCHASES SALES SALES
<S> <C> <C> <C> <C>
Small Cap Growth Portfolio.............. $ 20,160,674 $ 0 $ 17,557,747 $ 0
World Equity Portfolio.................. 31,649,325 0 34,494,969 0
Growth Portfolio........................ 18,293,255 0 17,589,733 0
Matrix Equity Portfolio................. 15,722,666 82,880 20,099,973 228,638
Growth & Income Portfolio............... 7,028,446 43,942 9,976,755 20,663
Multiple Strategies Portfolio........... 12,298,581 0 10,096,287 0
High Income Bond Portfolio.............. 2,581,093 0 8,428,680 0
U.S. Government Bond Portfolio.......... 79,328 5,159,179 364,893 4,919,911
</TABLE>
The identified cost for federal income tax purposes of investments owned by each
Portfolio (including earned discount on corporate short-term notes and
commercial paper) and their respective gross unrealized appreciation and
depreciation at June 30, 2000 were as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED NET UNREALIZED
IDENTIFIED COST APPRECIATION (DEPRECIATION) APPRECIATION/(DEPRECIATION)
<S> <C> <C> <C> <C>
Small Cap Growth Portfolio............ $ 16,310,517 $ 10,590,309 $ (528,071) $ 10,062,238
World Equity Portfolio................ 20,841,536 4,254,150 (1,387,061) 2,867,089
Growth Portfolio...................... 47,882,828 29,391,166 (1,390,161) 28,001,005
Matrix Equity Portfolio............... 16,775,563 2,080,469 (878,005) 1,202,464
Growth & Income Portfolio............. 22,187,294 2,126,493 (2,153,625) (27,132)
Multiple Strategies Portfolio......... 36,607,258 17,413,888 (1,090,001) 16,323,887
High Income Bond Portfolio............ 9,393,781 372,279 (1,604,191) (1,231,912)
U.S. Government Bond Portfolio........ 12,449,578 94,410 (287,633) (193,223)
</TABLE>
73
<PAGE> 75
VARIABLE INVESTORS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (Unaudited)
-CONTINUED-
NOTE E -- FORWARD FOREIGN CURRENCY CONTRACTS
As of June 30, 2000 the World Equity Portfolio had open 11 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> <C>
631,476 Canadian Dollars 08/14/00 $ 425,000 $ 427,140 $ (2,140)
305,710 Euro Currency 08/09/00 274,375 292,604 (18,229)
40,499 Pound Sterling 07/03/00 60,505 61,278 (773)
204,099 Pound Sterling 08/09/00 314,000 309,057 4,943
184,881 Pound Sterling 08/09/00 280,000 279,956 44
180,033 Pound Sterling 08/09/00 265,000 272,616 (7,616)
139,518,600 Japanese Yen 08/08/00 1,300,000 1,324,460 (24,460)
-----------
(48,231)
-----------
CURRENCY PURCHASED
------------------
305,710 Euro Currency 08/09/00 280,000 292,604 12,604
569,013 Pound Sterling 08/09/00 867,676 861,630 (6,046)
80,395,000 Japanese Yen 08/08/00 762,440 763,196 756
59,123,600 Japanese Yen 08/08/00 565,938 561,265 (4,673)
-----------
2,641
-----------
$ (45,590)
===========
</TABLE>
74
<PAGE> 76
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
JOHN SOUKUP, PRESIDENT AND TRUSTEE
JEFFREY HOELZEL, SECRETARY
CHRIS HARDEN, TREASURER
----------------
INVESTMENT ADVISER
FIRST VARIABLE ADVISORY SERVICES CORP.
----------------
THE INFORMATION CONTAINED IN THIS REPORT IS INTENDED FOR GENERAL INFORMATIONAL
PURPOSES ONLY. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS UNLESS PRECEDED OR ACCOMPANIED BY CURRENT TRUST AND SEPARATE ACCOUNT
PROSPECTUSES WHICH CONTAIN IMPORTANT INFORMATION CONCERNING THE TRUST, THE
COMPANY, AND ITS CURRENT PUBLIC OFFERING OF VARIABLE ANNUITY CONTRACTS AND
VARIABLE LIFE INSURANCE POLICIES.
75
<PAGE> 77
TAX ADVANTAGE PRODUCT CHOICES FIRST VARIABLE
LIFE INSURANCE
COMPANY
PRODUCTS [First Variable
VARIABLE UNIVERSAL LIFE Life Logo]
CAPITAL SOLUTIONS VUL
With the potential to . . .
BUILD WEALTH with tax-deferred growth.
ENJOY INCOME with tax-advantages through loans and withdrawals.
PRESERVE ASSETS with a death benefit that can pass free of income tax to
heirs.*
SINGLE PREMIUM VARIABLE LIFE
CAPITAL ONE PAY VL
With the potential to . . .
BUILD WEALTH with tax-deferred growth.
ENJOY INCOME through loans and withdrawals after age 59-1/2.**
PRESERVE ASSETS with a death benefit that can pass income tax free to
heirs.*
VARIABLE ANNUITIES
CAPITAL SIX VA
CAPITAL FIVE VA
CAPITAL NO LOAD VA
With the potential to...
BUILD WEALTH with tax-deferred growth.
ENJOY INCOME with tax-advantaged access through withdrawals and
annuitization.**
PRESERVE ASSETS with a death benefit that guarantees heirs receive at least
the original investment regardless of market performance.*
* May be subject to estate taxation
** Earnings are subject to income tax when withdrawn or paid as a death
benefit. Distributions before age 59-1/2 may also be subject to 10%
penalty.
All products not yet available in all states.
TAX ADVANTAGED PRODUCT CHOICES
SPECIAL PROGRAMS
ASSET ALLOCATION STRATEGIES
Asset Allocation is dividing your portfolio among several different investment
categories, such as stocks, bonds and money market instruments. Asset allocation
theory helps you and your investment professional design a portfolio that meets
your tolerance for risk. It can also help you gain the most potential return for
a certain risk level. First Variable Life offers a menu of asset allocation
models that can help you build, enjoy and preserve your wealth.
AUTOMATIC ASSET REBALANCING
Once you and your investment professional have selected a mix of investments,
automatic asset rebalancing helps you maintain it by rebalancing your portfolio.
Choose from quarterly, semi-annual or annual rebalancing. Your quarterly
statement will show activities to make tracking your investment easier.
DOLLAR COST AVERAGING
You can take advantage of a time-tested investment technique of dollar cost
averaging within your First Variable product. This strategy invests equal
amounts at regular intervals over time to take advantage of the natural ups and
downs of the financial markets. The key to dollar cost averaging is staying with
your plan, regardless of market performance. At First Variable, you can use
dollar cost averaging to move from one investment choice to another.
Dollar cost averaging does not assure a profit or protect against loss in
declining markets. Since prices fluctuate, consider your ability to continue
purchases through both high and low price levels.
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INVESTMENT PRODUCTS Bulk Rate
FIRST VARIABLE LIFE INSURANCE COMPANY U.S.POSTAGE
[ILONA FINANCIAL Securities distributed through First Variable Capital Services, Inc. PAID
GROUP LOGO] 2122 York Road, Suite 300 - Oak Brook, Illinois 60523 - 800.499.0713 - www.firstvariable.com Permit #7
Ashland, MA
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FIRST VARIABLE LIFE INSURANCE
... A HISTORY OF INNOVATION
Founded in 1968, First Variable Life Insurance Company is an innovative
financial services company and the first to offer variable life insurance in the
United States. First Variable Life is proud to be the Investment Products
Division of ILona Financial Group ("ILona"), the holding company for the U.S.
operations of Irish Life & Permanent plc.
Headquartered in Dublin, Ireland, Irish Life & Permanent plc is the market
leader for retail financial services in Ireland. With assets in excess of $27
billion, it specializes in life insurance, pension plans, investment management
and other personal financial services.
Together, the ILoNA family of companies markets a broad range of financial
products and services directed at the quickly evolving needs of today's
consumer. ILoNA's other business units include:
- Life & Annuity Products
- Interstate Assurance Company
- Specialty Products
- Guarantee Reserve Life Insurance Company
- IAC Securities Corporation
- Money Matters Exchange
Trust the experience, knowledge and expertise of the company that specializes in
tax-deferred and tax-advantaged financial products. First Variable Life
Insurance Company strives to help investors build, enjoy and preserve wealth
for many generations to come.
[GRAPHIC BUILD, ENJOY, PRESERVE (SM)]
This material must be preceded or accompanied by a prospectus which includes
information on investment risk, portfolio expenses, policy charges and
objectives. Read the prospectus carefully before you invest or send money.
Neither First Variable Life Insurance Company nor its agents give legal,
accounting or tax advice. Consult an attorney or tax advisor about the
consequences of financial decisions.
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