Aetna GET Fund, Series B
For the six month period ended June 30, 1996, the Aetna GET Fund achieved a
return of 10.44%, net of fund expenses, versus the S&P 500 Index return of
10.24% and the Lehman Brothers Aggregate Bond Index return of -1.21% for the
same period. Both indices are unmanaged.
"A year's worth of return in six months" could be the headline for a story on
the stock market as of June 30, 1996. Historically, stocks have tended to return
about 10% a year, with considerable variation around that average, of course.
The strong six month performance was especially surprising in light of the
upward march of interest rates over the period. The benchmark 30 Year Treasury
Bond began the year at under 6.0%, and by the end of June was hovering near
7.0%. Typically, under these circumstances, stocks would not perform well, if we
consider that stocks and bonds tend to move together as they compete for
investors' dollars.
Because of the divergent performance of stocks versus bonds during the first six
months of 1996, the going-forward expected return spread of stocks over bonds
narrowed considerably. Stocks are normally expected to have a higher return than
bonds to compensate for their higher risk, but by the end of June, this "equity
risk premium" had declined to well below its normal level. Consequently, our
outlook for equities changed from quite bullish at the beginning of the year to
moderately bearish by June. In response to this assessment, we increased our
exposure to short-term money market investments.
With continued stock market advances, the cumulative return cushion in GET
expanded, and resulted in an increased equity allocation. Because GET is
designed to provide equity market participation with no loss of principal if
held until maturity, the asset mix is determined by the Fund's cumulative
returns of its stock and bond components since inception. The greater the
accumulated gains, the more the fund will participate in equities. Primarily due
to the strong equity markets since the Fund's launch in 1994, the Fund's equity
allocation has climbed steadily to its current level.
Important strides were made in augmenting the team of professionals who manage
the Fund during the past six months, especially in the area of quantitative
research and systems. We have enhanced our ability to analyze and quickly react
to enormous amounts of market, economic, and company information. We continued
to make improvements in the Fund's investment process as well. Our stock
selection disciplines worked well for us over the past six months, as companies
with the characteristics we favor were well rewarded by the market.
Looking forward to the second six months of 1996, we are more cautious toward
the equity market than we were six months ago. Cash holdings in the Fund have
been tactically raised a bit in response to the market environment. However, we
believe that our stock selection disciplines, which favor stocks with
characteristics such as positive earnings surprise, upward revisions of earnings
estimates, low price/earnings, low price/book value, and high insider ownership,
should continue to perform relatively well regardless of the market environment.
Past performance is no assurance of future returns.
80
<PAGE>
Aetna GET Fund, Series B (continued)
Investment Summary:
Top Ten Holdings % of Portfolio
Exxon Corp. 2.8%
Royal Dutch Petroleum 2.4%
Chase Manhattan Corp. 2.3%
Pepsico, Inc. 1.7%
Nike Inc CL B 1.7%
Cisco Systems, Inc. 1.7%
Johnson & Johnson 1.7%
Chrysler Corp. 1.6%
Bristol Meyers Squibb 1.5%
Citicorp 1.5%
Large Cap Portfolio Sector Breakdown:
Portfolio S&P 500
Sector Weight Weight Over/(Under)
Basic Materials 15.4% 14.5% 0.9 %
Producer Goods & Services 10.6% 11.5% (0.9)%
Technology 11.2% 11.5% (0.3)%
Consumer Goods 25.3% 25.5% (0.2)%
Services 12.6% 11.6% 1.0 %
Financial Services 12.0% 13.7% (1.7)%
Utilities 12.9% 11.7% 1.2 %
81
<PAGE>
Aetna GET Fund, Series B
Portfolio of Investments - June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
Number
of Market
Shares Value
------ ------
COMMON STOCKS (90.0%)
Aerospace and Defense (1.4%)
McDonnell Douglas Corp................ 21,400 $1,037,900
United Technologies Corp.............. 2,100 241,500
----------
1,279,400
----------
Apparel (3.0%)
Gap, Inc.............................. 3,800 122,075
Nike, Inc. Class B.................... 15,500 1,592,624
TJX Companies, Inc.................... 34,500 1,164,375
----------
2,879,074
----------
Autos and Auto Equipment (3.5%)
Chrysler Corp......................... 25,100 1,556,199
Ford Motor Co......................... 27,500 890,313
Snap-On, Inc.......................... 18,700 885,913
----------
3,332,425
----------
Banks (4.2%)
Bank of Boston Corp................... 8,800 435,600
CITICORP.............................. 17,454 1,442,136
First Chicago Corp.................... 20,091 786,060
First Union Corp...................... 2,100 127,838
Golden West Financial Corp............ 7,000 392,000
Nations Bank, Inc..................... 9,200 760,150
----------
3,943,784
----------
Building Materials and Construction (1.4%)
Centex Corp........................... 3,900 121,388
Kaufman & Broad Home Corp............. 20,500 297,250
Pulte Corp............................ 33,900 906,825
----------
1,325,463
----------
Chemicals (0.2%)
Goodrich (B.F.) Co.................... 2,000 74,750
Mallinckrodt Group, Inc............... 3,200 124,400
----------
199,150
----------
Computer Software (5.6%)
Cisco Systems, Inc.+.................. 28,000 1,585,499
Computer Associates International,
Inc................................. 17,350 1,236,188
Computer Sciences Corp.+.............. 10,400 777,400
Microsoft Corp.+...................... 3,700 444,463
Oracle Corp.+......................... 31,400 1,238,338
----------
5,281,888
----------
Computers and Office Equipment (3.0%)
Cabletron Systems, Inc.+.............. 14,300 981,338
CompUSA, Inc.+........................ 1,700 58,013
Harris Corp........................... 1,000 61,000
Sun Microsystems, Inc.+............... 19,900 1,171,613
Xerox Corp............................ 11,100 593,850
----------
2,865,814
----------
Consumer Products (1.1%)
Eastman Kodak Co...................... 6,100 474,275
Liz Claiborne, Inc.................... 16,900 585,163
----------
1,059,438
----------
Diversified (1.7%)
Johnson Controls, Inc................. 6,100 $ 423,950
NACCO Industries, Inc................. 14,200 786,325
Textron, Inc.......................... 4,500 359,438
----------
1,569,713
----------
Electrical Equipment (2.9%)
General Electric Co................... 14,500 1,254,250
Raychem Corp.......................... 8,300 596,563
Tektronix, Inc........................ 21,000 939,750
----------
2,790,563
----------
Financial Services (5.5%)
Beneficial Corp....................... 400 22,450
Chase Manhattan Corp.................. 30,568 2,158,864
J.P. Morgan & Co...................... 1,000 84,625
Merrill Lynch & Co., Inc.............. 11,100 722,888
Morgan Stanley Goup, Inc.............. 20,600 1,011,975
Travelers Group, Inc.................. 27,600 1,259,250
----------
5,260,052
----------
Foods and Beverages (5.9%)
Campbell Soup Co...................... 17,600 1,240,800
Coca-Cola Co.......................... 18,000 879,750
Hershey Foods Corp.................... 2,200 161,425
Kroger Co. (The)+..................... 17,100 675,450
PepsiCo, Inc.......................... 45,600 1,613,099
Sara Lee Corp......................... 18,600 602,175
Supervalu, Inc........................ 15,000 472,500
----------
5,645,199
----------
Hotels and Restaurants (1.1%)
Marriott International, Inc........... 20,200 1,085,750
----------
Household Products (0.6%)
Clorox Co............................. 6,100 540,613
----------
Machinery and Equipment (0.8%)
Caterpillar, Inc..................... 3,400 230,350
Parker-Hannifin Corp.................. 12,900 546,638
----------
776,988
----------
Media and Entertainment (0.5%)
King World Production, Inc.+.......... 13,900 505,613
----------
Medical Supplies (2.2%)
Baxter International, Inc............. 11,200 529,200
Guidant Corp.......................... 19,021 936,784
Medtronic, Inc........................ 11,000 616,000
US Surgical Corp...................... 700 21,700
----------
2,103,684
----------
Metals and Mining (1.9%)
Asarco, Inc........................... 3,500 96,688
Phelps Dodge Corp..................... 13,900 867,013
Timken Co............................. 21,000 813,750
----------
1,777,451
----------
Oil and Gas (12.6%)
Amoco Corp............................ 13,619 985,675
See Notes to Portfolio of Investments.
82
<PAGE>
Aetna GET Fund, Series B
Portfolio of Investments - June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
Number
of Market
Shares Value
------ ------
Oil and Gas (continued)
Atlantic Richfield Co................. 9,700 $1,149,450
Chevron Corp.......................... 1,100 64,900
Exxon Corp............................ 30,600 2,658,374
Halliburton Co........................ 15,400 854,700
Mobil Corp............................ 11,200 1,255,800
Phillips Petroleum Co................. 24,700 1,034,313
Royal Dutch Petroleum Co.............. 14,800 2,275,499
Texaco, Inc........................... 10,600 889,075
USX Marathon Group.................... 42,100 847,263
----------
12,015,049
----------
Paper and Containers (1.0%)
Avery Dennison Corp................... 16,700 916,413
----------
Pharmaceuticals (10.0%)
Abbott Laboratories................... 13,300 578,550
American Home Products Corp........... 18,800 1,130,350
Becton, Dickinson & Co................ 10,800 866,700
Bristol-Myers Squibb Co............... 16,200 1,457,999
Eli Lilly & Co........................ 3,982 258,830
Johnson & Johnson..................... 32,000 1,583,999
Merck & Co., Inc...................... 10,100 652,713
Pfizer, Inc........................... 11,200 799,400
Pharmacia & Upjohn, Inc............... 13,200 585,750
Schering Plough Corp.................. 17,800 1,116,950
Warner Lambert Co..................... 9,000 495,000
----------
9,526,241
----------
Printing and Publishing (2.6%)
Gannett Company, Inc.................. 8,600 608,450
Times Mirror Co....................... 22,100 961,350
Washington Post Co.................... 2,700 874,800
----------
2,444,600
----------
Retail (4.3%)
American Stores Co.................... 6,300 259,875
Dayton Hudson Corp.................... 10,900 1,124,063
Mercantile Stores Co., Inc............ 14,000 820,750
Sears, Roebuck & Co................... 23,200 1,128,100
Woolworth Corp.+...................... 35,200 792,000
----------
4,124,788
----------
Telecommunications (0.1%)
360 Communications Co.+............... 1,933 46,392
----------
Transportation (1.5%)
AMR Corp.+............................ 15,400 1,401,399
----------
Utilities - Electric (3.7%)
Consolidated Edison Co. of
New York, Inc....................... 22,100 646,425
Entergy Corp.......................... 10,100 286,588
General Public Utilities Corp......... 28,000 987,000
Texas Utilities Co.................... 21,700 927,675
Unicom Corp........................... 23,600 657,850
----------
3,505,538
----------
Utilities - Oil and Gas (1.2%)
Coastal Corp. (The)................... 3,700 154,475
Pacific Enterprises................... 33,800 1,001,325
----------
1,155,800
----------
Utilities - Telephone (6.5%)
AT&T Corp............................. 11,300 700,600
Bell Atlantic Corp.................... 20,300 1,294,125
BellSouth Corp........................ 20,300 860,213
MCI Communications Corp............... 1,500 38,438
NYNEX Corp............................ 22,800 1,083,000
Pacific Telesis Group................. 7,100 239,625
SBC Communications, Inc............... 9,800 482,650
Sprint Corp........................... 14,800 621,600
U. S. West Communications Group....... 27,100 863,813
----------
6,184,064
----------
Total Common Stocks (cost
$69,825,834) ....................... $85,542,346
----------
PREFERRED STOCKS (1.4%)
Banks (1.4%)
BankAmerica Corp...................... 17,800 1,348,349
----------
Total Preferred Stocks (cost
$1,033,051) ........................ $1,348,349
----------
Principal Market
Amount Value
--------- --------
LONG-TERM BONDS AND NOTES (6.1%)
U.S. Government and Agency Obligations
U.S. Treasury Strips PO, Zero Coupon,
05/15/99............................ $6,900,000 $5,769,936
----------
Total Long-Term Bonds and Notes
(cost $5,703,117) ..................
$5,769,936
----------
SHORT-TERM INVESTMENTS (2.9%)
Sundstrand Corp., Comm. Paper, 5.75%,
07/01/96............................ 1,700,000 1,700,000
U.S. Treasury Bill, Time Deposit,
4.94%, 11/14/96..................... 1,060,000 1,038,630
----------
Total Short-Term Investments
(cost $2,740,178) .................. $2,738,630
----------
TOTAL INVESTMENTS--(cost $79,302,180)(a) $95,399,261
Other assets less liabilities ........ (371,438)
-----------
Total Net Assets ..................... $95,027,823
===========
Notes to Portfolio of Investments
+ Non-income producing security.
(a) The cost of investments for federal income tax purposes amounted to
$79,364,197. Unrealized gains and losses, based on identified tax cost at June
30, 1996, are as follows:
Unrealized gains ..................... $16,441,666
Unrealized losses .................... (406,602)
-----------
Net unrealized gain .............. $16,035,064
===========
Category percentages are based on net assets.
See Notes to Portfolio of Investments.
83
<PAGE>
Aetna GET Fund, Series B
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 1996 (Unaudited)
Assets:
Investments, at market value (Note 1) ........... $95,399,261
Cash ............................................ 21,165
Receivable for:
Dividends and interest ........................ 104,638
Investments sold .............................. 1,977,136
-----------
Total assets ............................ 97,502,200
-----------
Liabilities:
Receivable for:
Investments purchased ......................... 2,305,843
Fund shares redeemed .......................... 93,493
Accrued investment advisory fees ................ 54,414
Accrued administrative fees ..................... 20,627
-----------
Total liabilities ....................... 2,474,377
-----------
Net assets applicable to outstanding shares ..... $95,027,823
===========
Net assets represented by:
Paid-in capital ............................... $68,816,493
Net unrealized gain ........................... 16,097,081
Undistributed net investment income ........... 926,203
Accumulated net realized gain ................. 9,188,046
-----------
Total--representing net assets applicable to
outstanding shares .......................... $95,027,823
===========
Shares authorized ............................... Unlimited
Shares outstanding, par value $0.10 ............. 6,938,310
Net asset value per share ....................... $ 13.70
Cost of investments ............................. $79,302,180
Statement of Operations
Six Month Period Ended June 30, 1996 (Unaudited)
Investment Income: (Note 1)
Interest ...................................... $ 419,879
Dividends ..................................... 900,836
-----------
1,320,715
Foreign taxes withheld ........................ (9,582)
-----------
Total investment income ................. 1,311,133
-----------
Expenses: (Note 2)
Investment advisory fee ......................... 343,838
Administrative services fees .................... 21,997
-----------
Total expenses .......................... 365,835
-----------
Net investment income ........................... 945,298
-----------
Net Realized and Change in Unrealized Gain (Loss):
(Notes 1 and 3)
Net realized gain on:
Sales of investments .......................... 3,838,797
Futures contracts ............................. 266,161
-----------
Net realized gain on investments ........ 4,104,958
-----------
Net change in unrealized gain on:
Investments ................................... 3,948,462
Futures contracts ............................. 152,047
-----------
Net change in unrealized gain on
investments ............................ 4,100,509
-----------
Net realized and change in unrealized gain ...... 8,205,467
-----------
Net increase in net assets resulting from
operations .................................... $9,150,765
===========
See Notes to Financial Statements.
84
<PAGE>
Aetna GET Fund, Series B
- ------------------------------------------------------------------------------
Statements of Changes in Net Assets
Six Month
Period Ended Year Ended
June 30, December 31,
1996 1995
------------ ------------
Operations:
Net investment income ............. $ 945,298 $2,238,511
Net realized gain ................. 4,104,958 5,733,595
Net change in unrealized gain ..... 4,100,509 12,335,976
----------- -----------
Net increase in net assets
resulting from operations ..... 9,150,765 20,308,082
----------- -----------
Distributions to Shareholders:
From net investment income ........ -- (2,274,766)
----------- -----------
Net increase in net assets
resulting from distributions
to shareholders ............... -- (2,274,766)
----------- -----------
Share Transactions:
Proceeds from shares sold ......... 193,133 503,629
Net asset value of shares issued
to shareholders upon
reinvestment of distributions ... -- 2,274,766
Payment for shares redeemed ....... (2,885,708) (6,386,680)
----------- -----------
Net decrease in net assets
from share transactions ..... (2,692,575) (3,608,285)
----------- -----------
Change in net assets .............. 6,458,190 14,425,031
Net Assets:
Beginning of period ............... 88,569,633 74,144,602
----------- -----------
End of period ..................... $95,027,823 $88,569,633
=========== ===========
End of period net assets includes
undistributed (distributions in
excess of) net investment income $ 926,203 $ (19,095)
=========== ===========
Share Transactions:
Shares sold ....................... 15,111 44,217
Shares issued upon reinvestment ... -- 190,069
Shares redeemed ................... (218,680) (566,518)
----------- -----------
Net decrease .................... (203,569) (332,232)
=========== ===========
Financial Highlights
Selected data for a fund share outstanding throughout the period:
Six Month
Period Ended Six Month
June 30, Year Ended Period Ended
1996 December 31, December 31,
(Unaudited) 1995 1994
----------- ------------ -------------
Net asset value, beginning of
period .................... $12.401 $9.920 $10.092
------- ------ -------
Income from investment operations:
Net investment income ..... 0.134 0.309 0.250
Net realized and
unrealized gain ......... 1.161 2.492 (0.064)
------- ------ -------
Total from
investment
operations ......... 1.295 2.801 0.186
------- ------ -------
Less distributions:
From net investment income -- (0.320) (0.254)
In excess of net
investment income ....... -- -- (0.063)
From net realized gains on
investments ............. -- -- (0.038)
In excess of net realized
gains on investments .... -- -- (0.003)
------- ------ -------
Total distributions . -- (0.320) (0.358)
------- ------ -------
Net asset value, end of
period .................... $13.696 $12.401 $9.920
======= ====== =======
Total return* ............... 10.44% 28.38% 1.83%
Net assets, end of period $95,028 $88,570 $74,145
(000's) ...................
Ratio of total expenses to
average net assets** ...... 0.80% 1.03% 0.53%
Ratio of net investment
income to average net 2.06% 2.74% 4.52%
assets** ..................
Ratio of net expenses before
fee waiver to average net 0.80% 1.03% 0.84%
assets** ..................
Portfolio turnover rate**.... 118.27% 90.25% 72.24%
Average commission rate paid
per share ................. $0.0540 -- --
*The total return percentage does not reflect any separate account charges
under variable annuity contracts.
** Annualized for periods of less than one year.
Per share data calculated using weighted average number of shares outstanding
throughout the period.
See Notes to Financial Statements.
85
<PAGE>
Aetna GET Fund, Series B
Notes to Financial Statements - June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies
Aetna GET Fund, Series B (the "Fund") is registered under the Investment Company
Act of 1940 as a diversified open-end management investment company whose shares
are currently sold to Aetna Life Insurance and Annuity Company (the "Company")
for allocation to certain of its variable life/annuity accounts ("Accounts").
The Company's Accounts held 100% of the Fund's outstanding shares at June 30,
1996. The investment objective for the Fund is to achieve maximum total return
by participating in favorable equity market performance without compromising a
minimum targeted rate of return during a specified five year period, the
"Guaranteed Period", from July 1, 1994 to June 30, 1999, the maturity date.
The Fund accumulated deposits from March 15, 1994 through June 30, 1994. The
Guaranteed Period for the Fund is from July 1, 1994 to June 30, 1999. The
minimum targeted rate of return during this period is 2.5% per year before asset
based contract charges and Series B costs of operations.
The accompanying financial statements of the Fund have been prepared in
accordance with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect amounts
reported therein. Although actual results could differ from these estimates, any
such differences are expected to be immaterial to the net assets of the Fund.
A. Valuation of Investments
Investments are stated at market values based upon closing sales
prices as reported on national securities exchanges or, for over-the-counter
securities, at the mean of the bid and asked prices. Short-term investments
maturing in more than sixty days for which market quotations are readily
available are valued at current market value. Short-term investments maturing in
less than sixty days are valued at amortized cost which when combined with
accrued interest approximates market. Securities for which market quotations are
not considered to be readily available are valued in good faith using methods
approved by the Board of Trustees.
B. Futures Contracts
A futures contract is an agreement between two parties to buy and sell a
specific amount of a commodity, security or financial instrument including an
index of stocks at a set price on a future date. The Fund uses futures contracts
as a hedge against declines in the value of portfolio securities. The Fund may
enter into futures contracts to manage the risk of changes in interest rates,
equity prices, currency exchange rates or in anticipation of future purchases
and sales of portfolio securities.
Upon entering into a futures contract, the Fund is required to deposit with a
broker an amount (initial margin) equal to a percentage of the purchase price
indicated by the futures contract. Subsequent deposits (variation margin) are
received or paid each day by the Fund equal to the daily fluctuations in the
market value of the contract. These amounts are recorded by the Fund as
unrealized gains or losses. When a contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. Generally,
futures contracts are closed prior to expiration.
The risks associated with futures contracts may arise from an imperfect
correlation between the change in market value of the securities held by the
Fund and the price of futures contracts. Risks may also arise from an illiquid
secondary market, or from the inability of counterparties to meet the terms of
the contract. For federal tax purposes, any futures contracts which remain open
at the end of the fiscal period are marked-to-market and the resultant net gain
or loss is included in federal taxable income.
C. Federal Income Taxes
As a qualified regulated investment company, the Fund is relieved of federal
income and excise taxes by distributing its net taxable investment income and
capital gains, if any, in compliance with the applicable provisions of the
Internal Revenue Code.
86
<PAGE>
Aetna GET Fund, Series B
Notes to Financial Statements - June 30, 1996 (Unaudited) (continued)
- ------------------------------------------------------------------------------
1. Summary of Significant Accounting Policies (continued)
D. Distributions
Distributions are recorded on the ex-dividend date. 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 losses deferred due to wash sales.
E. Other
Investment transactions are accounted for on the day following trade date,
except same day settlements which are accounted for on the trade date. Interest
income is recorded on an accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective security using a yield
to maturity method. Dividend income and stock splits as well as distributions to
the shareholders are recorded on the ex-dividend date. Realized gains and losses
from investment transactions are determined on an identified cost basis.
2. Investment Advisory Fee and Other Expenses (See Note 5)
The Fund pays the Company (its investment adviser) an investment advisory fee at
an annual rate of three-quarters of one percent (.75%) of its average daily net
assets.
The Fund entered into an administrative services agreement (the "Agreement")
with the Company whereby the Company is reimbursed for a share of its overhead
related to managing the Fund. In addition, the Company has been paying, and the
Fund has been reimbursing the Company for, the Fund's ordinary, recurring
expenses such as legal fees, Trustees' fees, custodial fees and insurance
premiums. Effective May 1, 1996, the Agreement was modified to enable the Fund
to fix the amount of its costs and expenses. Under the terms of the new
Agreement, the Company will receive a fixed fee in exchange for providing the
services described above including reimbursement of its overhead related to
managing the Fund. The new Agreement provides for the Company to receive a fixed
fee at an annual rate of .15% of average daily net assets.
On July 19, 1996, shareholders of the Fund voted to approve a subadvisory
agreement (the "Subadvisory Agreement") among the Fund, the Company and the
Company's affiliate, Aeltus Investment Management, Inc. ("Aeltus"). Under the
terms of the Subadvisory Agreement, Aeltus will supervise the investment and
reinvestment of cash and securities and provide certain related administrative
services for the Fund in exchange for a fee of up to .35% of the Fund's average
daily net assets.
3. Purchases and Sales of Investments
The cost of purchases and proceeds from sales (including maturities) of
investments, other than short-term investments, for the six month period ended
June 30, 1996 aggregated $55,334,039 and $49,163,790, respectively.
4. Post October Capital Losses
The Fund had approximately $608,000 in capital losses from November 1, 1995 to
December 31, 1995 which have been treated for federal income tax purposes as
occurring on the first day of the Fund's fiscal year ending December 31, 1996.
5. Special Shareholder Meeting
A Special Shareholder Meeting was held for shareholders of the Fund on July 19,
1996. Shareholders of record on May 31, 1996 were entitled to vote at the
meeting.
The Shareholders of the Fund voted to elect nine Trustees, approve a subadvisory
agreement among the Fund, the Company, and Aeltus, and approve a new Investment
Advisory Agreement between the Fund and the Company. In addition, shareholders
of the Fund voted to amend the Fund's Declaration of Trust to modify the Fund's
liability and indemnification provisions.
87
<PAGE>
Aetna GET Fund, Series B
Notes to Financial Statements - June 30, 1996 (Unaudited) (continued)
- ------------------------------------------------------------------------------
5. Special Shareholder Meeting (continued)
A. Election of Trustees
The following individuals were elected to serve as Trustees of the Fund. Every
individual named served as a Trustee of the Fund prior to this election. There
are no other individuals currently serving as a Trustee of the Fund.
Votes Cast Votes
Trustee For Withheld
- -------------------------------------------------------------
Morton Ehrlich 6,753,630 114,235
Maria T. Fighetti 6,753,481 114,384
David L. Grove 6,734,545 133,320
Timothy A. Holt 6,752,298 115,567
Daniel P. Kearney 6,751,897 115,968
Sidney Koch 6,753,630 114,235
Shaun P. Mathews 6,752,298 115,567
Corine T. Norgard 6,753,630 114,235
Richard G. Scheide 6,753,630 114,235
B. Approval of Subadvisory Agreement
The shareholders of the Fund voted to approve a Subadvisory Agreement with
Aeltus Investment Management, Inc., an affiliate of the Company. (See Note 2 for
a description of the services provided and the compensation arrangement defined
by the terms of the agreement.)
Results of the vote were:
Votes Cast Votes Cast
For Against Abstentions
- --------------------- ----------------- ----------------
6,463,900 255,020 148,945
C. Approval of New Investment Advisory Agreement
Shareholders of the Fund voted to approve a new Investment Advisory Agreement
(the "Agreement") between the Fund and the Company. The Agreement was updated in
the following respects: the language was simplified where possible; the
liability provisions made it clear that the Company is liable to the Fund for
the Company's negligence, and it expanded the Company's ability to use brokerage
commissions to pay Fund expenses.
Results of the vote were:
Votes Cast Votes Cast
For Against Abstentions
- --------------------- ----------------- ----------------
6,346,902 228,526 292,437
D. Amendment to Funds' Declaration of Trust
Shareholders of the Fund voted to delete and restate certain articles in the
Fund's Declaration of Trust related to the liability of Trustees to the Fund and
the indemnification by the Fund of Trustees and officers for liabilities
incurred while acting as Trustees or officers of the Fund. The primary purpose
of the amendment is to allow the Fund to advance costs to a Trustee if that
Trustee is named in an action for which the Fund would ultimately be obligated
to indemnify the Trustee without the Trustee being required to post collateral.
Results of the vote were:
Votes Cast Votes Cast
For Against Abstentions
- --------------------- ----------------- ----------------
6,298,152 283,608 286,105
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