<PAGE>
[LOGO]
SEMI-ANNUAL REPORT
------------------
JUNE 30, 1996
The AIG Life Companies (U.S.)
One Alico Plaza
P.O. Box 667
Wilmington, DE 19899
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[LOGO] One Alico Plaza
P.O. Box 667
The AIG Life Companies (U.S.) Wilmington, DE 19899
302-594-2000
Dear Contract Owner:
We are happy to present to you the investment holdings and financial
statements of the funds available to you through your investment of a
variable contract from the AIG Life Companies.
If you have any questions about your contract or your investment allocation,
please call your sales representative or a marketing representative at
(800) 340-2765.
Thank you again for your confidence in The AIG Life Companies.
AIG Life Insurance Company * American International Life
Assurance Company of New York
Member Companies of American International Group, Inc.
AIG Life does not solicit business in New York
<PAGE>
July 1996
Dear Policyholder:
During the first half of 1996, stronger than expected U.S. economic growth
has had a mixed effect on financial markets. Volatility in both the U.S. stock
and bond markets returned to historical norms amid concern about inflation.
Unmanaged domestic equity indexes performed well while the bond market
generally provided lackluster returns. The Standard & Poor's 500 Index provided
a total return of +10.10% (with dividends reinvested) for the six months ended
June 30, 1996.
However, some investors began to express concern that a healthy domestic
job market would generate substantially higher prices for goods and services.
This led to a general decline in U.S. stock prices in July.
For the six months ended June 30, U.S. investments offered through the
Delaware Group Premium Fund* generally provided positive returns. Bond
investments generally reflected the fact that long-term bond prices declined.
U.S. interest rates -- as measured by 30-year U.S. Treasury Bonds -- rose more
than 100 basis points (1%) to more than 7% since January.
As of this writing, the U.S. stock market appeared to be undergoing its
first major correction since 1990. During times of increased volatility, we
believe it is important to maintain a rational and long-term perspective.
Remember that investments tend to perform in cyclical patterns.
We expect that interest rates are near a peak because we believe the recent
energetic pace of U.S. economic growth is not sustainable. In our opinion, the
Federal Reserve Board will not let inflation accelerate nor tighten credit to
the point where the economy would slip into recession.
At Delaware Group, we firmly believe that a long-term outlook is the key to
investment success. We encourage you to read the remainder of the report, which
includes a discussion of the performance of various Series of the Premium Fund
through June 30. We hope to have the opportunity to meet your financial needs
for many years to come.
Sincerely,
/s/ Wayne A. Stork
- ------------------------
Wayne A. Stork
Chairman, Board of Directors
Delaware Group Premium Fund
- -----------
* Investment Series of the Premium Fund underlie variable annuity products
issued by AIG Life Insurance Co. of America and American International Life
Assurance Co. of New York.
<PAGE>
Delaware Group Premium Fund, Inc.-Equity/Income Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Number Market
of Shares Value
COMMON STOCK-97.44%
Aerospace & Defense-1.74%
General Dynamics.............. 34,500 $ 2,139,000
-----------
2,139,000
-----------
Automobiles & Automotive Parts-4.17%
Chrysler...................... 35,241 2,184,942
Ford Motor.................... 52,800 1,709,400
General Motors................ 23,200 1,215,100
-----------
5,109,442
-----------
Banking, Finance & Insurance-18.12%
American General.............. 44,000 1,600,500
AmSouth Bancorporation........ 29,600 1,069,300
Aon........................... 48,150 2,443,613
Bank of Boston................ 37,400 1,851,300
CIGNA......................... 14,600 1,720,975
Chase Manhattan............... 28,100 1,984,563
Crestar Financial............. 30,400 1,622,600
First Chicago NBD............. 44,125 1,726,391
ITT Hartford Group............ 30,000 1,597,500
Mercantile Bancorporation..... 25,900 1,152,550
St. Paul...................... 40,500 2,166,750
Summit Bancorp................ 49,650 1,743,956
U.S. Bancorp.................. 42,700 1,539,869
-----------
22,219,867
-----------
Buildings & Materials-1.06%
Armstrong World Industries.... 22,600 1,302,325
-----------
1,302,325
-----------
Cable, Media & Publishing-2.75%
McGraw-Hill................... 73,700 3,371,775
-----------
3,371,775
-----------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Chemicals-6.33%
Imperial Chemical ADR......... 44,000 $ 2,161,500
PPG Industries................ 25,800 1,257,750
Witco......................... 28,200 969,375
duPont (E.I.) deNemours....... 42,700 3,378,638
----------
7,767,263
----------
Consumer Products-1.37%
Maytag........................ 80,600 1,682,525
----------
1,682,525
----------
Electronics & Electrical Equipment-6.62%
AMP........................... 25,200 1,011,150
Eaton......................... 26,400 1,547,700
Hubbell-Class B............... 10,000 662,500
Pitney Bowes.................. 66,700 3,184,925
Thomas & Betts................ 45,800 1,717,500
---------
8,123,775
----------
Energy-11.34%
Amoco......................... 26,800 1,939,650
British Petroleum ADR......... 16,200 1,731,375
Exxon......................... 23,300 2,024,188
Mobil......................... 9,200 1,031,550
Occidental Petroleum.......... 78,400 1,940,400
Phillips Petroleum............ 48,400 2,026,750
Sonat......................... 31,200 1,404,000
Williams...................... 36,500 1,806,750
----------
13,904,663
----------
Food, Beverage & Tobacco-7.46%
General Mills................. 26,100 1,422,450
Heinz (H.J.).................. 65,700 1,995,638
Philip Morris................. 30,000 3,120,000
RJR Nabisco Holdings.......... 67,040 2,078,240
UST........................... 15,400 527,450
----------
9,143,778
----------
3
<PAGE>
Equity/Income Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Healthcare & Pharmaceuticals-12.38%
American Home Products........ 45,100 $2,711,638
Bristol-Myers Squibb.......... 27,900 2,511,000
Glaxo Wellcome PLC-ADR........ 58,700 1,570,225
Pharmacia & Upjohn............ 58,300 2,587,063
SmithKline Beecham PLC-ADR.... 56,000 3,045,000
Warner-Lambert................ 39,900 2,194,500
Zeneca Group PLC-ADR.......... 8,300 558,175
----------
15,177,601
----------
Metals & Mining-1.11%
Freeport-McMoRan Copper &
Gold Class B................. 42,700 1,361,063
----------
1,361,063
----------
Packaging & Containers-1.49%
Minnesota Mining & Manufacturing 26,500 1,828,500
----------
1,828,500
----------
Paper & Forest Products-6.20%
Georgia-Pacific............... 23,400 1,661,400
Kimberly-Clark................ 26,100 2,016,225
Temple-Inland................. 26,540 1,240,745
Union Camp.................... 18,000 877,500
Weyerhaeuser.................. 42,600 1,810,500
----------
7,606,370
----------
Retail-3.11%
May Department Stores......... 43,300 1,894,375
Penney (J.C.)................. 36,600 1,921,500
----------
3,815,875
----------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Telecommunications-6.33%
ALLTEL........................ 50,700 $ 1,559,025
BellSouth..................... 19,300 817,838
Frontier...................... 67,300 2,061,063
GTE........................... 40,600 1,816,850
Royal PTT Nederland-SP ADR.... 40,000 1,510,000
-----------
7,764,776
-----------
Transportation & Shipping-3.72%
Conrail....................... 22,500 1,493,438
Union Pacific................. 43,900 3,067,513
-----------
4,560,951
-----------
Utilities-2.14%
BCE........................... 42,100 1,662,950
PECO Energy................... 37,000 962,000
-----------
2,624,950
-----------
Total Common Stock (cost $107,464,952) 119,504,499
-----------
CONVERTIBLE PREFERRED STOCK-0.78%
Banking, Finance & Insurance-0.78%
Salomon 7.625% pfd cv Series FSA 35,000 958,125
-----------
Total Convertible Preferred Stock
(cost $931,875)............. 958,125
-----------
4
<PAGE>
Equity/Income Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
REPURCHASE AGREEMENTS-1.78%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $653,000
U.S. Treasury Notes 7.75% due 1/31/00
market value $701,640)...... $685,000 $ 685,000
With J.P. Morgan Securities 5.40% 7/1/96 (dated
6/28/96, collateralized by $759,000
U.S. Treasury Notes 6.25% due 8/31/00
market value $768,811)...... 751,000 751,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $445,000 U.S. Treasury Notes
7.875% due 4/15/98 market value $465,616 and
$303,000 U.S. Treasury Notes 5.00% due
1/31/99, market value $300,676) 750,000 750,000
---------
Total Repurchase Agreements
(cost $2,186,000)........... 2,186,000
---------
TOTAL MARKET VALUE OF SECURITIES (cost $110,582,827)-100.00%.. 122,648,624
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-0.00%......... (1,495)
-----------
NET ASSETS APPLICABLE TO 8,526,502 SHARES ($.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $14.38 PER SHARE-100.00%......... $122,647,129
============
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized
to the Fund with 50,000,000 shares allocated to the Series.. $100,709,268
Accumulated undistributed:
Net investment income....................................... 807,318
Net realized gain on investments............................ 9,064,746
Net unrealized appreciation of investments.................. 12,065,797
------------
Total net assets.............................................. $122,647,129
============
See accompanying notes
5
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Delaware Group Premium Fund, Inc.-High Yield Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Principal Market
Amount Value
CORPORATE BONDS-83.70%
Aerospace & Defense-1.18%
K&F Industries sr sub debs 13.75% 8/1/01 ..... $ 389,000 $ 403,588
UNC sr sub nts 11.00% 6/1/06 ................. 250,000 254,375
---------
657,963
---------
Automobiles & Automotive Parts-3.46%
Aftermarket Technology sr sub nts
12.00% 8/1/04 .............................. 500,000 545,625
Exide sr sub def debs 0.00% 12/15/04 ......... 200,000 168,250
Exide sr nts 10.75% 12/15/02 ................. 100,000 102,000
Harvard Industries sr nts 11.13% 8/1/05 ...... 500,000 473,125
SPX sr sub nts 11.75% 6/1/02 ................. 600,000 641,250
---------
1,930,250
---------
Banking, Finance & Insurance-0.39%
Life Partners sr sub nts 12.75% 7/15/02 ...... 200,000 218,500
---------
218,500
---------
Buildings & Materials-0.58%
Schuller International Group sr nts
10.88% 12/15/04 ............................ 300,000 323,250
---------
323,250
---------
Cable, Media & Publishing-8.68%
Adelphia Communications sr debs
11.88% 9/15/04 ............................. 200,000 201,000
Adelphia Communications sr debs
12.50% 5/15/02 ............................. 300,000 306,375
Allbritton sr sub debs 11.50% 8/15/04 ........ 150,000 152,813
Cablevision Industries sr debs 9.25%
4/1/08 ...................................... 200,000 212,750
Cablevision Systems sr subs nts 9.88%
5/15/06 ..................................... 500,000 482,500
EchoStar Satellite Broadcasting Dish
sr disc nts 0.00% 3/15/04 ................... 500,000 311,250
Galaxy Telecommunication L.P. sr sub nts
12.38% 10/1/05 ............................. 500,000 518,750
K-III Communications sr sec nts 10.63% 5/1/02 490,000 510,213
Lamar Advertising sr sec nts 11.00% 5/15/03 .. 450,000 463,500
Marcus Cable sr disc nts 0.00% 12/15/05 ...... 800,000 496,000
Rogers Cablesystems sr sec nts 10.00% 12/1/07 440,000 432,850
Rogers Cablesystems sr sub nts 11.00% 12/1/15 270,000 281,813
Sullivan Graphics sr sub nts 12.75% 8/1/05 ... 500,000 481,250
---------
4,851,064
---------
<PAGE>
Principal Market
Amount Value
CORPORATE BONDS (Continued)
Chemicals-8.85%
Berry Plastics sr sub nts 12.25% 4/15/04 ... $400,000 $ 432,500
BPC Holding sr nts 12.50% 6/15/06 .......... 400,000 408,500
G-I Holdings sr nts 0.00% 10/1/98 .......... 546,000 440,213
G-I Holdings sr nts 10.00% 2/15/06 ......... 519,000 514,459
Harris Chemical sr sub nts 10.75% 10/15/03 . 500,000 488,125
Interlake sr nts 12.00% 11/15/01 ........... 400,000 422,500
NL Industries sr sec nts 11.75% 10/15/03 ... 265,000 271,956
NL Industries sr sec disc nts 0.00% 10/15/05 600,000 468,750
Polymer Group sr nts 12.25% 7/15/02 ........ 875,000 942,813
Texas Petrochemical sr sub nts
11.13% 7/1/06 ............................ 250,000 256,250
UCC Investors Holding sub nts 0.00% 5/1/05 . 350,000 297,500
---------
4,943,566
---------
Computers & Technology-2.62%
ADT Operations sr sub nts 9.25% 8/1/03 ..... 1,000,000 1,038,750
Unisys nts 15.00% 7/1/97 ................... 160,000 170,400
Unisys sr nts 12.00% 4/15/03 ............... 250,000 254,688
---------
1,463,838
---------
Consumer Products-2.67%
Calmar Spraying Systems sr sub nts
11.50% 8/15/05 ........................... 500,000 497,500
Remington Arms sr sub nts 10.00% 12/1/03 ... 350,000 320,250
Revlon Worldwide sr sec disc nts
0.00% 3/15/98 ............................ 500,000 416,875
Samsonite sr sub nts 11.13% 7/15/05 ........ 250,000 256,250
---------
1,490,875
---------
Electronics & Electrical Equipment-1.82%
IMO Industries sr sub debs 11.75% 5/1/06 ... 500,000 515,000
International Wire Group sr sub nts
11.75% 6/1/05 ............................ 500,000 500,000
---------
1,015,000
---------
6
<PAGE>
High Yield Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
CORPORATE BONDS (Continued)
Energy-0.91%
MESA Operating sr sub nts 10.63% 7/1/06 ..........$ 500,000 $ 510,000
----------
510,000
----------
Environmental Services-0.94%
Norcal Waste Systems sr nts 12.50% 11/15/05 ...... 500,000 526,250
----------
526,250
----------
Food, Beverage & Tobacco-1.85%
Mafco sr sub nts 11.88% 11/15/02 ................. 250,000 264,688
Specialty Foods sr nts 11.25% 8/15/03 ............ 300,000 260,250
TLC Beatrice International Holdings sr nts
11.50% 10/1/05 ................................. 500,000 508,125
----------
1,033,063
----------
Healthcare & Pharmaceuticals-2.45%
Dade International sr sub nts 11.13% 5/1/06 ...... 400,000 416,000
Dynacare sr nts 10.75% 1/15/06 ................... 500,000 505,625
General Nutrition sr sub nts 11.38% 3/1/00 ....... 185,000 193,094
Owens & Minor sr sub nts 10.88% 6/1/06 ........... 250,000 254,375
----------
1,369,094
----------
Industrial Machinery-0.84%
Alvey Systems sr sub nts 11.38% 1/31/03 .......... 250,000 258,438
Terex units 13.75% 5/15/02 ....................... 200,000 209,000
----------
467,438
----------
Leisure, Lodging & Entertainment-4.08%
AMF Group sr disc nts 0.00% 3/15/06 .............. 1,000,000 546,250
AMF Group sr sub nts 10.88% 3/15/06 .............. 500,000 498,750
Argosy Gaming mtg nts 13.25% 6/1/04 .............. 500,000 511,250
Cinemark USA sr nts 12.00% 6/1/02 ................ 200,000 217,000
Trump-Atlantic City mtg nts 11.25% 5/1/06 ........ 500,000 503,750
----------
2,277,000
----------
<PAGE>
Principal Market
Amount Value
CORPORATE BONDS (Continued)
Metals & Mining-10.81%
AK Steel sr nts 10.75% 4/1/04 .............. $ 750,000 $ 811,875
Acme Metals sr nts 12.50% 8/1/02 ............ 500,000 515,000
Algoma Steel mtg nts 12.38% 7/15/05 ......... 400,000 392,000
G.S. Technologies sr nts 12.00% 9/1/04 ...... 1,100,000 1,128,875
G.S. Technologies sr nts 12.25% 10/1/05 ..... 750,000 771,563
Kaiser Aluminum & Chemical sr sub nts
12.75% 2/1/03 ............................. 400,000 423,000
MAXXAM Group sr sec nts 11.25% 8/1/03 ....... 950,000 955,938
NS Group units 13.50% 7/15/03 .............. 400,000 385,500
Oregon Steel Mills mtg nts 11.00% 6/15/03 ... 250,000 257,813
Weirton Steel sr nts 11.38% 7/1/04 .......... 400,000 395,000
---------
6,036,564
---------
Packaging & Containers-5.20%
Gaylord Container sr nts 11.50% 5/15/01 ..... 500,000 511,875
Gaylord Container sr sub disc debs
0.00% 5/15/05 ............................. 500,000 528,125
Ivex Packaging sr sub nts 12.50% 12/15/02 ... 450,000 472,500
Silgan Holdings sr disc debs 0.00% 12/15/02 . 873,000 879,548
Stone Container sr nts 11.50% 10/1/04 ....... 250,000 252,813
Stone Container sr nts 11.88% 12/1/98 ....... 250,000 262,500
---------
2,907,361
---------
Paper & Forest Products-7.43%
Crown Paper sr sub nts 11.00% 9/1/05 ........ 400,000 381,000
Florida Coast Paper LLC mtg nts 12.75% 6/1/03 500,000 521,250
Four M sr nts 12.00% 6/1/06 ................. 250,000 258,125
Pacific Lumber sr nts 10.50% 3/1/03 ......... 700,000 683,375
Repap Wisconsin sr nts 9.88% 5/1/06 ......... 1,000,000 895,000
Riverwood International unsec sr sub nts
10.88% 4/1/08 ............................. 1,000,000 986,250
S.D. Warren sr sub nts 12.00% 12/15/04 ...... 400,000 424,000
---------
4,149,000
---------
7
<PAGE>
High Yield Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
CORPORATE BONDS (Continued)
Retail-3.48%
Finlay Fine Jewelry sr nts 10.63% 5/1/03 ....... $ 110,000 $ 109,863
Fleming sr nts 10.63% 12/15/01 ................. 500,000 460,625
Hills Stores sr nts 12.50% 7/1/03 .............. 750,000 736,875
Penn Traffic sr nts 10.65% 11/1/04 ............. 250,000 227,500
Ralph's Grocery sr sub nts 13.75% 6/15/05 ...... 400,000 409,500
---------
1,944,363
---------
Telecommunications-6.82%
Comcast Cellular sr nts 0.00% 3/5/00 ........... 600,000 414,750
Dictaphone sr sub nts 11.75% 8/1/05 ............ 400,000 387,000
Pronet sr sub nts 11.88% 6/15/05 ............... 250,000 250,000
Pronet sr sub nts 10.88% 9/15/06 ............... 400,000 390,000
Rogers Cantel Mobile Communications sr sub nts
11.13% 7/15/02 ............................... 1,200,000 1,275,000
Teleport Communications sr nts 9.88% 7/1/06 .... 500,000 506,250
Teleport Communications sr disc nts
0.00% 7/1/07 ................................. 1,000,000 585,000
---------
3,808,000
---------
Textiles & Furniture-1.57%
Clark-Schwebel sr nts 10.50% 4/15/06 ........... 250,000 258,125
Foamex L.P. sr sub nts 11.88% 10/1/04 .......... 400,000 409,000
US Leather sr nts 10.25% 7/31/03 ............... 250,000 207,500
---------
874,625
---------
Transportation & Shipping-1.85%
Alamo Rent-A-Car sr nts 11.75% 1/31/06 ......... 1,000,000 1,035,000
---------
1,035,000
---------
Utilities-3.28%
AES sr sub nts 10.25% 7/15/06 .................. $ 500,000 503,750
Calpine sr nts 10.50% 5/15/06 .................. 500,000 505,000
Midland II Funding debs 13.25% 7/23/06 ......... 750,000 822,188
-----------
1,830,938
-----------
Miscellaneous-1.94%
Coinmach sr nts 11.75% 11/15/05 ................ 500,000 525,000
Jordan Industries sr sec nts 10.38% 8/1/03 ..... 400,000 382,500
Trism sr sub nts 10.75% 12/15/00 ............... 189,000 178,605
-----------
1,086,105
-----------
Total Corporate Bonds (cost $46,243,767) ....... 46,749,107
-----------
Number
of Shares
Preferred Stocks-0.93%
Utilities-0.93%
El Paso Electric Pik ........................... 5,000 517,500
-----------
Total Preferred Stocks (cost $500,000) ......... 517,500
-----------
CONVERTIBLE PREFERRED STOCKS-0.45%
Retail-0.45%
Pantry Pride $14.875 cv pfd .................... 2,500 249,375
-----------
Total Convertible Preferred Stocks
(cost $262,500) .............................. 249,375
-----------
STOCK WARRANTS-0.03%
Chemicals-0.03%
Berry Plastic .................................. 452 18,000
-----------
Total Stock Warrants (cost $3,600) ............. 18,000
-----------
8
<PAGE>
High Yield Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
REPURCHASE AGREEMENTS-16.68%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $2,792,000
U.S. Treasury Notes 7.75% due 1/31/00
market value $2,989,837) .................. $2,919,000 $2,919,000
With J.P. Morgan Bank 5.40% 7/1/96 (dated
6/28/96, collateralized by $3,234,000
U.S. Treasury Notes 6.25% due 8/31/00
market value $3,276,062) .................. 3,198,000 3,198,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $1,896,00 U.S. Treasury
Notes 7.875% due 4/15/98, market value
$1,984,089 and $1,293,000 U.S. Treasury
Notes 5.00% due 1/31/99, market
value $1,281,242) ......................... $3,198,000 $3,198,000
-----------
Total Repurchase Agreements
(cost $9,315,000) ......................... 9,315,000
-----------
TOTAL MARKET VALUE OF SECURITIES (cost $56,324,867)-101.79%.... 56,848,982
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(1.79%)........ (999,115)
-----------
NET ASSETS APPLICABLE TO 6,329,016 SHARES ($.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $8.82 PER SHARE-100.00%........... $55,849,867
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to
the Fund with 50,000,000 shares allocated to the Series...... $58,725,732
Accumulated undistributed:
Net investment income........................................ 6,035
Net realized loss on investments............................. (3,406,015)
Net unrealized appreciation of investments................... 524,115
-----------
Total net assets............................................... $55,849,867
===========
Summary of Abbreviations:
cv-convertible pik-pay-in-kind
debs-debentures sec-secured
disc-discount sr-senior
mtg-mortgage sub-subordinated
nts-notes unsec-unsecured
pfd-preferred
See accompanying notes
9
<PAGE>
Delaware Group Premium Fund, Inc.-Capital Reserves Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Principal Market
Amount Value
CORPORATE BONDS-33.75%
Advanta Mtn. 7.00% 5/1/01 ...................... $ 500,000 $ 495,625
Ahmanson (HF) & Company 6.35% 9/1/98 ........... 700,000 697,375
Allstate 5.875% 6/15/98 ........................ 385,000 380,669
AVCO Financial Services 5.50% 5/1/98 ........... 350,000 345,188
Bank America 6.20% 2/15/06 ..................... 400,000 368,000
Celulosa Aravco 7.00% 12/15/07 ................. 475,000 439,375
Conti 96-MC1-D 7.80% 7/1/06 .................... 360,000 356,513
Credit Foncier de France 8.00% 1/14/02 ......... 340,000 345,100
Federal Express 7.53% 9/23/06 ................. 287,890 289,689
Federal Express 7.85% 1/30/15 ................. 440,000 444,400
Ford Motor Credit 6.25% 11/8/00 ................ 600,000 588,000
ITT 6.25% 11/15/00 ............................. 240,000 234,300
ITT Hartford 6.375% 11/1/02 .................... 575,000 552,000
MEPC Finance 7.50% 5/1/03 ...................... 520,000 523,250
News America Hldgs. 9.125% 10/15/99 ............ 395,000 421,169
Pep Boys 7.00% 6/1/05 .......................... 535,000 520,956
Sears Acceptance Mtn. 6.392% 3/28/01 ........... 325,000 316,875
Transamerica Finance 8.08% 11/4/99 ............. 520,000 540,150
Travelers/Aetna P&C 6.75% 4/15/01 .............. 550,000 545,875
UCFC 96-B A3 7.30% 12/15/13 .................... 625,000 626,758
---------
Total Corporate Bonds (cost $9,065,241) ........ 9,031,267
---------
U.S. TREASURY OBLIGATIONS-5.93%
U.S. Treasury Notes 6.375% 6/30/97 ............. 1,240,000 1,247,403
U.S. Treasury Notes 5.875% 4/30/98 ............. 340,000 338,892
---------
Total U.S. Treasury Obligations
(cost $588,706) .............................. 1,586,295
---------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION OBLIGATIONS
(GNMA)-12.18%
GNMA 7.50% 2023 ................................ 545,360 537,861
GNMA 9.00% 2021 ................................ 1,474,681 1,551,452
GNMA 10.00% 2020 ............................... 301,491 331,452
GNMA 10.50% 2019 ............................... 282,638 311,697
GNMA 11.00% 2009 to 2010 ....................... 156,520 175,155
GNMA 12.00% 2011 to 2013 ....................... 78,515 89,974
GNMA II 12.00% 2014 to 2016 .................... 232,499 261,198
---------
Total Government National Mortgage
Association Obligations (cost $3,269,499) .... 3,258,789
---------
<PAGE>
Principal Market
Amount Value
MORTGAGE-BACKED SECURITIES-17.84%
Federal Home Loan Mortgage Corporation
6.00% 4/1/11 ............................ $ 554,204 $ 524,589
Federal Home Loan Mortgage Corporation Gold
7.00% 10/1/17 ........................... 199,930 194,683
Federal Home Loan Mortgage Corporation
7.50% 5/1/09 ............................ 141,333 141,156
Federal Home Loan Mortgage Corporation
8.50% 9/1/08 ............................ 165,623 171,006
Federal Home Loan Mortgage Corporation Gold
8.50% 6/1/14 ............................ 168,309 173,832
Federal National Mortgage Association
6.50% 5/1/08 to 2/1/26 .................. 1,362,717 1,301,637
Federal National Mortgage Association
7.00% 1/1/24 ............................ 326,086 314,265
Federal National Mortgage Association
8.00% 1/1/10 to 9/1/16 .................. 842,788 859,449
Federal National Mortgage Association
9.00% 10/1/06 ........................... 368,777 384,911
Federal National Mortgage Association
9.50% 11/1/21 to 5/1/22 ................. 660,044 708,323
----------
Total Mortgage-Backed Securities
(cost $4,806,108) ....................... 4,773,851
----------
AGENCY OBLIGATIONS-0.57%
Federal Home Loan Bank 6.745% 4/17/97 ..... 150,000 151,125
----------
Total Agency Obligations (cost $150,473) .. 151,125
----------
COLLATERALIZED MORTGAGE
OBLIGATIONS-6.47%
Federal Home Loan Mortgage Corporation
1666E 6.00% 12/15/19 .................... 575,000 547,516
Nomura Asset Securities 95-MD3 8.17% 3/4/20 499,463 516,398
Residential Accredit Loans 7.30% 6/25/21 .. 220,000 217,663
Resolution Trust 95-C1 6.55% 2/25/27 ...... 450,000 448,734
----------
Total Collateralized Mortgage Obligations
(cost $1,770,071) ....................... 1,730,311
----------
10
<PAGE>
Capital Reserves Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
ASSET-BACKED SECURITIES-19.05%
Advanta 93-1A2 5.95% 5/25/09 ...................... $ 60,322 $ 57,945
American Financial Home Equity Loan Trust
Series 94-2A1 6.95% 6/25/24 .................... 312,764 312,483
American Financial Home Equity Loan Trust
Series 91-1A 8.00% 7/25/06 ...................... 47,552 48,223
ASC 6.92% 2/14/29 ................................. 497,285 479,802
Case Equipment Loan Trust 95-B A3
6.15% 9/15/02 ................................... 550,000 546,205
Dayton Hudson Credit Card Master Trust
95-1A 6.10% 2/25/02 ............................. 550,000 546,590
Discover Card Trust 93-BA 6.75% 2/16/02 ........... 400,000 399,880
First Bank Auto 95-B A 6.40% 7/17/00 .............. 480,500 481,701
IMC Home Equity Loan Trust 6.50% 11/25/10 ......... 270,000 266,436
Nations Credit Grantor Trust 5.85% 9/15/11 ........ 310,489 302,726
Nomura Asset Securities 7.6371% 4/13/36 ........... 460,000 454,250
Nomura Asset Securitites 95-2 2A2 6.25% 1/25/26 ... 200,000 198,680
Olympic Automobile Receivables Trust
95-B 7.35% 10/15/01 ............................. 386,892 391,573
Travelers Mortgage Securities J-Z2 12.00% 3/1/14 .. 223,522 251,462
World Omni Automobile Lease Securitization Trust
94-B A 7.95% 1/25/01 ............................ 57,443 60,779
World Omni Automobile Lease Securitization Trust
95-A A 6.05% 11/25/01 ........................... 300,000 298,410
---------
Total Asset-Backed Securities (cost $5,126,085) ... 5,097,145
---------
<PAGE>
Principal Market
Amount Value
REPURCHASE AGREEMENTS-1.36%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $109,000 U.S. Treasury
Notes 7.75% due 1/31/00 market
value $117,154 .................................. $ 115,000 $ 115,000
With J.P. Morgan Securities 5.40% 7/1/96, (dated
6/28/96, collateralized by $127,000 U.S. Treasury
Notes 6.25% due 8/31/00, market
value $128,370 .................................. 125,000 125,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $74,000 U.S. Treasury Notes
7.875% due 4/15/98 market value $77,745 and
$51,000 U.S. Treasury Notes 5.00% due
1/31/99 market value $50,204) ................... 125,000 125,000
---------
Total Repurchase Agreements (cost $365,000) ....... 365,000
---------
TOTAL MARKET VALUE OF SECURITIES (cost $26,141,183)-97.15%....... 25,993,783
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.85%............ 763,835
----------
NET ASSETS APPLICABLE TO 2,788,508 SHARES ($.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $9.60 PER SHARE-100.00%............. $26,757,618
===========
Mtn. denotes medium term note.
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to
the Fund with 50,000,000 shares allocated to the Series ........ $28,447,099
Accumulated undistributed:
Net realized loss on investments............................... (1,542,081)
Net unrealized depreciation of investments..................... (147,400)
----------
Total net assets................................................. $26,757,618
===========
See accompanying notes
11
<PAGE>
Delaware Group Premium Fund, Inc.-Multiple Strategy Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Number Market
of Shares Value
COMMON STOCK-60.44%
Aerospace & Defense-2.57%
GenCorp ........................... 28,000 $ 423,500
Lockheed Martin ................... 154,000 1,293,600
----------
1,717,100
----------
Automobiles & Auto Parts-1.50%
Danaher ........................... 23,100 1,004,850
----------
1,004,850
----------
Banking, Finance & Insurance-10.26%
American International Group ...... 7,200 710,100
Chubb ............................. 36,200 1,805,475
Cincinnati Financial .............. 7,980 459,349
MBNA .............................. 17,475 498,038
Southern National ................. 30,100 955,675
State Street Boston ............... 15,800 805,800
United Healthcare ................. 18,700 944,350
U. S. HealthCare .................. 12,500 686,719
----------
6,865,506
----------
Buildings & Materials-0.77%
Foster Wheeler .................... 11,500 516,063
----------
516,063
----------
Cable, Media & Publishing-3.03%
American Greetings Class A ........ 15,600 426,075
Banta ............................. 27,950 707,484
Reynolds & Reynolds Class A ....... 16,800 894,600
----------
2,028,159
----------
Chemicals-0.70%
Loctite ........................... 10,100 469,650
----------
469,650
----------
Consumer Products-1.45%
Procter & Gamble .................. 10,700 969,688
----------
969,688
----------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Electronics & Electrical-1.75%
General Electric ..................... 6,000 $ 519,000
Teleflex ............................. 13,700 654,175
----------
1,173,175
----------
Energy-2.80%
Kerr-McGee ........................... 15,800 961,825
Royal Dutch Petroleum ................ 2,800 430,500
Total Class B ADR .................... 12,958 481,066
----------
1,873,391
----------
Farming & Agriculture-2.57%
ConAgra .............................. 37,900 1,719,713
----------
1,719,713
----------
Food, Beverage & Tobacco-7.80%
Campbell Soup ........................ 13,400 944,700
Dimon ................................ 30,000 555,000
Flowers Industries ................... 39,000 628,875
Philip Morris ........................ 25,800 2,683,200
RJR Nabisco Holdings ................. 13,300 412,300
----------
5,224,075
----------
Healthcare & Pharmaceuticals-8.76%
American Home Products ............... 8,100 487,013
Columbia/HCA Healthcare .............. 35,200 1,878,800
Pharmacia & Upjohn ................... 10,900 483,688
Schering-Plough ...................... 12,200 765,550
SmithKline Beecham ADR ............... 33,600 1,827,000
Warner-Lambert ....................... 7,600 418,000
----------
5,860,051
----------
Leisure, Lodging & Entertainment-0.64%
McDonalds ............................ 9,100 425,425
----------
425,425
----------
12
<PAGE>
Multiple Strategy Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Real Estate-3.93%
Colonial Properties Trust ................... 9,000 $ 218,250
Developers Diversified Realty ............... 20,900 666,188
Health Care Property Investors .............. 13,700 462,375
Nationwide Health Properties ................ 22,600 477,425
Security Capital Industrial Trust ........... 14,257 251,280
Storage Trust Realty ........................ 3,900 79,950
Storage USA ................................. 4,800 154,800
Sun Communities ............................. 12,000 322,500
---------
2,632,768
---------
Retail-2.79%
May Department Stores ....................... 9,900 433,125
Rite Aid .................................... 48,300 1,436,925
---------
1,870,050
---------
Telecommunications-1.01%
Alltel ...................................... 21,900 673,425
---------
673,425
---------
Utilities-3.79%
CMS Energy .................................. 32,000 988,000
DTE Energy .................................. 12,100 373,588
Edison International ........................ 26,000 458,250
Illinova .................................... 24,900 715,875
---------
2,535,713
---------
Miscellaneous-4.32%
Service International ....................... 7,900 454,250
Tomkins plc ADR ............................. 23,000 350,750
Tyco International .......................... 51,200 2,086,400
---------
2,891,400
---------
Total Common Stock (cost $33,547,633) ....... 40,450,202
----------
CONVERTIBLE PREFERRED STOCK-0.35%
Metals & Mining-0.35%
Freeport-McMoRan Copper & Gold
5.00% pfd cv .............................. 8,700 237,075
----------
Total Convertible Preferred Stock
(cost $201,026) ........................... 237,075
----------
<PAGE>
Principal Market
Amount Value
U.S. TREASURY OBLIGATIONS-3.65%
U.S. Treasury Notes 6.125% 5/15/98 ............. $ 185,000 $ 185,161
U.S. Treasury Bonds 7.50% 11/15/24 ............. 2,125,000 2,254,965
----------
Total U.S. Treasury Obligations
(cost $2,391,939) ............................ 2,440,126
----------
ASSET-BACKED SECURITIES-5.55%
Advanta Series 93-1A2 5.95% 5/25/09 ............ 80,429 77,260
American Finance Home Equity
Series 94-2 A1 6.95% 6/25/24 ................. 88,518 88,438
Series 92-5 A 7.20% 2/15/08 ................. 142,313 141,957
Series 91-1 A 8.00% 7/25/06 ................. 16,841 17,079
Case Equipment Loan Trust
Series 95-B A3 6.15% 9/15/02 ................. 500,000 496,550
Dayton Hudson Credit Card Master Trust
Series 95-1A 6.10% 2/25/02 ................... 425,000 422,365
Discover Credit Card Trust
Series 93-B 6.75% 2/16/02 .................... 125,000 124,963
First Bank Auto Receivables Grantor Trust
Series 95-B A 6.40% 7/17/00 ................. 363,807 364,717
IMC Home Equity Loan Trust
Series 95-3A2 6.50% 7/17/00 ................. 225,000 222,030
NationsCredit Grantor Trust
Series 96-1A 5.85% 9/15/11 ................... 228,300 222,593
Neiman Marcus Group Credit Card Master Trust
Series 95-1A 7.60% 6/15/03 ................... 400,000 413,520
Nomura Asset Securities
Series 95-2 2A2 6.25% 1/25/26 ................ 120,000 119,208
Olympic Automobiles Receivable Trust
Series 95-B A2 7.35% 10/15/01 ................ 317,543 321,385
UCFC Home Equity Loan
Series 96-B1A3 7.30% 4/15/14 ................. 460,000 461,294
World Omni Automobile Lease Securitization Trust
Series 95-A 6.05% 11/25/01 ................... 175,000 174,073
Series 94-BA1 7.95% 1/25/01 ................. 47,455 48,447
----------
Total Asset-Backed Securities
(cost $3,722,951) ............................ 3,715,879
----------
13
<PAGE>
Multiple Strategy Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
COLLATERALIZED MORTGAGE
OBLIGATIONS-4.27%
Asset Securitization Corporation
Series 96-D2 A1 6.92% 2/14/29 ............... $ 377,937 $ 364,650
Series 95-MD4 A1 7.10% 8/13/29 .............. 446,191 437,198
Federal Home Loan Mortgage Corporation
Series 1666E 6.00% 12/15/19 ................ 400,000 380,880
Mortgage Capital Funding
Series 96-McqD 7.80% 4/15/06 ................ 300,000 297,094
Nomura Asset Securities
Series 96-MD5 A3 7.637% 4/13/36 ............. 340,000 335,750
Series 95-MD3-A1A 8.17% 3/4/20 .............. 356,760 368,856
Residential Accredit Loans
Series 95-Q51A3 7.30% 6/25/21 ............... 180,000 178,088
Resolution Trust Series 95-C1
A2B 6.55% 2/25/27 ........................... 330,000 329,072
Travelers Mortgage Securities Corporation
Series 1-Z2 12.00% 3/1/14 ................... 150,447 169,253
---------
Total Collateralized Mortgage Obligations
(cost $3,032,542) ........................... 2,860,841
---------
MORTGAGE-BACKED SECURITIES-9.93%
Federal National Mortgage Association
6.00% 4/1/11 ................................ 809,688 766,420
Federal National Mortgage Association
6.50% 2/1/26 ................................ 696,804 652,165
Federal National Mortgage Association
7.00% 1/1/24 ................................ 739,127 712,334
Federal National Mortgage Association
8.00% 1/1/10 to 9/1/16 ...................... 501,994 511,844
Federal National Mortgage Association
9.50% 6/1/19 to 5/1/22 ...................... 528,093 566,875
Federal Home Loan Mortgage Corporation-Gold
6.00% 3/1/11 ................................ 685,499 649,082
Federal Home Loan Mortgage Corporation-Gold
7.00% 10/1/17 ............................... 113,666 110,683
Federal Home Loan Mortgage Corporation
7.50% 5/1/09 ................................ 80,762 80,661
Federal Home Loan Mortgage Corporation-Gold
8.50% 6/1/14 ................................ 91,923 94,939
<PAGE>
Principal Market
Amount Value
MORTGAGE-BACKED SECURITIES
(Continued)
Federal Home Loan Mortgage Corporation
8.50% 9/1/08 ............................ $ 116,454 $ 120,239
Government National Mortgage Association
8.50% 9/1/08 ............................ 701,738 724,905
Government National Mortgage Association
9.00% 6/15/21 to 11/15/21 ............... 1,463,663 1,539,348
Government National Mortgage Association
10.00% 1/15/18 .......................... 105,587 116,212
----------
Total Mortgage-Backed Securities
(cost $6,678,267) ....................... 6,645,707
----------
CORPORATE BONDS-9.59%
ABN-AMRO Bank N.V. 8/25% 8/1/09 ........... 80,000 83,600
Advanta 7.00% 5/1/01 ...................... 405,000 401,456
Ahmanson (HF) & Company 6.35% 9/1/98 ...... 500,000 498,125
Allstate 6.875% 6/15/98 ................... 150,000 148,313
AVCO Financial Services 5.50% 5/1/98 ...... 140,000 138,075
BankAmerica 9.70% 8/1/00 .................. 100,000 110,250
Chase Manhattan 6.25% 1/15/06 ............ 385,000 355,644
Credit Foncier 8.00% 1/14/02 .............. 275,000 279,125
Federal Express A1 7.53% 9/23/06 .......... 155,018 155,987
Federal Express A1 7.85% 1/30/15 .......... 450,000 454,500
ITT 6.25% 11/15/00 ........................ 180,000 175,725
ITT Hartford 6.375% 11/1/02 ............... 350,000 336,000
MBNA 6.00% 12/26/00 ....................... 450,000 433,125
MEPC Finance 7.50% 5/1/03 ................. 385,000 387,406
News America Holdings 9.125% 10/15/99 ..... 295,000 314,544
Pep Boys 7.00% 6/1/05 ..................... 395,000 384,631
Santander Financial Issuances 6.80% 7/15/05 175,000 168,000
Sears Roebuck Acceptance 6.392% 3/28/01 ... 400,000 390,000
Transamerica Finance 8.08% 11/4/99 ........ 340,000 353,175
Travelers/AETNA P&C 6.75% 4/15/01 ......... 400,000 397,000
U.S. Bancorp 8.125% 5/15/02 ............... 430,000 453,105
----------
Total Corporate Bonds (cost $6,460,428) ... 6,417,786
----------
14
<PAGE>
Multiple Strategy Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
Repurchase Agreements-3.65%
With Chase Manhattan 5.40% 7/1/96
(dated 6/28/96, collateralized by
$731,000 U.S.Treasury
Notes 7.75% due 1/31/00 market
value $783,467) ............ $764,000 $764,000
With J.P. Morgan Securities 5.40% 7/1/96
(dated 6/28/96, collateralized by
$847,000 U.S. Treasury
Notes 6.25% due 8/31/00 market
value $858,142) ............ 838,000 838,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $496,000 U.S. Treasury
Notes 7.875% due 4/15/98 market value
$519,719 and $338,000 U.S. Treasury Notes
5.00% due 1/31/99 market value $335,612) 838,000 838,000
---------
Total Repurchase Agreements
(cost $2,440,000) .......... 2,440,000
---------
TOTAL MARKET VALUE OF SECURITIES (cost $58,474,786)-97.43%...... 65,207,616
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-2.57%........... 1,721,238
-----------
NET ASSETS APPLICABLE TO 4,384,172 SHARES ($.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $15.27 PER SHARE-100.00%............ $66,928,854
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to
the Fund with 50,000,000 shares allocated to the Series ....... $55,679,500
Accumulated undistributed:
Net investment income......................................... 987,934
Net realized gain on investments.............................. 3,528,590
Net unrealized appreciation of investments.................... 6,732,830
-----------
Total net assets................................................ $66,928,854
===========
15
<PAGE>
Delaware Group Premium Fund, Inc.-Money Market Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Principal Market
Amount Value
COMMERCIAL PAPER-58.28%
Financial Services-30.84%
ABN-AMRO North American Financial, Chicago
5.01% 9/25/96 .............................. $ 500,000 $ 494,016
Ciesco 5.38% 9/11/96 ......................... 1,000,000 989,240
CS First Boston 5.28% 8/1/96 ................. 750,000 746,590
Dresdner U.S. Finance 4.99% 7/31/96 .......... 500,000 497,921
Goldman Sachs Group 5.33% 8/12/96 ............ 500,000 496,891
International Nederlanden US Insurance Holding
5.40% 9/10/96 .............................. 1,000,000 989,350
Morgan Stanley Group 5.26% 8/26/96 ........... 500,000 495,909
Pitney Bowes Credit 5.30% 7/9/96 ............. 1,000,000 998,822
Unum 5.28% 7/10/96 ........................... 750,000 749,010
----------
Total Financial Services ..................... 6,457,749
----------
Industrial-23.90%
Anheuser-Busch 5.28% 7/18/96 ................. 783,000 781,048
Bayer 5.28% 8/20/96 .......................... 750,000 744,500
Becton Dickinson and Company 5.42% 12/5/96 ... 500,000 488,181
Kellogg Company 5.31% 7/15/96 ............... 1,000,000 997,935
Sandoz 5.31% 7/25/96 ......................... 500,000 498,230
Vermont American 5.27% 7/12/96 ............... 750,000 748,792
Disney (Walt) Company 5.24% 7/24/96 .......... 750,000 747,489
----------
Total Industrial ............................. 5,006,175
----------
Mortgage Bankers and Brokers-3.54%
Bear Stearns 5.41% 9/11/96 ................... 750,000 741,885
----------
Total Mortgage Bankers and Brokers ........... 741,885
----------
Total Commercial Paper ....................... 12,205,809
----------
<PAGE>
Principal Market
Amount Value
FLOATING RATE NOTES*-19.10%
Federal National Mortgage Association
Medium-Term Note 5.298% 7/2/96 ........... $ 500,000 $ 499,632
Merrill Lynch Floating Rate Medium-Term Note
5.42% 7/1/96 ............................. 500,000 500,000
Student Loan Marketing Association
5.37% 7/1/96 ............................. 500,000 500,000
Student Loan Marketing Association
5.36% 7/2/96 ............................. 500,000 500,000
Student Loan Marketing Association
5.39% 7/2/96 ............................. 500,000 499,951
Student Loan Marketing Association
5.39% 7/2/96 ............................. 1,000,000 1,000,000
Student Loan Marketing Association
5.49% 7/2/96 ............................. 500,000 499,813
---------
Total Floating Rate Notes .................. 3,999,396
---------
U.S. GOVERNMENT AGENCY
OBLIGATIONS-13.02%
Federal National Mortgage Association
Discount Note 4.83% 8/9/96 ............... 1,000,000 994,768
Federal National Mortgage Association
Medium-Term Note 5.64% 9/9/96 ............ 500,000 499,830
Federal National Mortgage Association
Discount Note 5.14% 9/27/96 ............. 500,000 493,718
Federal National Mortgage Association
Discount Note 5.21% 11/27/96 ............. 500,000 489,218
Federal National Mortgage Association
Medium-Term Note 4.97% 3/10/97 ........... 250,000 249,490
---------
Total U.S. Government Agency Obligations ... 2,727,024
---------
16
<PAGE>
Money Market Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
MISCELLANEOUS INVESTMENTS-4.77%
Bank of America 5.70% 5/28/97 .................. $ 500,000 $ 499,012
FNB Chicago 5.51% 11/7/96 ....................... 500,000 499,983
----------
Total Miscellaneous Investments ................. 998,995
----------
REPURCHASE AGREEMENTS-5.19%
With Chase Manhattan 5.40% 7/1/96 (dated 6/28/96,
collateralized by $325,000 U.S. Treasury Notes
7.75% due 1/31/00, market value $348,573) ..... 340,000 340,000
With J.P. Morgan Securities 5.40% 7/1/96
(dated 6/28/96, collateralized by $377,000
U.S. Treasury Notes 6.25% due 8/31/00,
market value $381,943) ........................ 373,000 373,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $221,000 U.S. Treasury Notes
7.875% due 4/15/98, market value $231,317 and
$151,000 U.S. Treasury Notes 5.00% due 1/31/99,
market value $149,375) ........................ 373,000 373,000
----------
Total Repurchase Agreements ..................... 1,086,000
----------
TOTAL MARKET VALUE OF SECURITIES OWNED-100.36% (WHICH
APPROXIMATES COST FOR FINANCIAL REPORTING AND INCOME
TAX PURPOSES)................................................. 21,017,224
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS-(0.36%)......... (74,962)
----------
NET ASSETS APPLICABLE TO 2,094,226 SHARES ($0.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $10.00 PER SHARE-100.00%........... $20,942,262
===========
- --------
* For Floating Rate Notes, the maturity date shown is the next interest reset
date.
See accompanying notes
17
<PAGE>
Delaware Group Premium Fund, Inc.-Growth Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Number Market
of Shares Value
COMMON STOCK-90.30%
Automobiles & Auto Parts-0.59%
Polaris Industries .......................... 11,800 $ 402,675
----------
402,675
----------
Banking, Finance & Insurance-9.59%
ADVANTA-Class B ............................. 10,800 492,750
AMBAC ....................................... 4,500 234,563
Aames Financial ............................. 20,550 737,231
Blanch (E.W.) Holdings ...................... 30,800 612,150
CMAC Investment ............................. 13,300 764,750
MBIA ........................................ 10,500 817,688
*Oxford Health Plans ......................... 11,300 464,006
*Olympic Financial Limited ................... 23,200 533,600
SEI ......................................... 20,000 425,000
The Money Store ............................. 19,350 424,491
United Healthcare ........................... 17,100 863,550
*WFS Financial ............................... 7,800 172,575
----------
6,542,354
----------
Cable, Media & Publishing-1.64%
*International Family Entertainment Class B .. 34,000 629,000
Reynolds & Reynolds Class A ................. 9,200 489,900
----------
1,118,900
----------
Computers & Technology-14.28%
*Affiliated Computer Services Class A ........ 21,000 989,625
*BISYS Group ................................. 36,300 1,363,519
*BMC Software ................................ 3,900 232,538
*Cabletron Systems ........................... 3,650 250,481
*DST Systems ................................. 6,500 208,000
Dallas Semiconductor ........................ 24,000 435,000
First Data .................................. 16,023 1,275,831
*Gartner Group Class A ....................... 25,300 928,194
*HCIA ........................................ 11,400 721,050
*Microchip Technology ........................ 9,600 240,000
*Newbridge Networks .......................... 7,000 458,500
Shared Medical Systems ...................... 7,600 490,200
*Sterling Commerce ........................... 1,900 70,538
*Sterling Software ........................... 6,800 523,600
*StorMedia Class A ........................... 23,250 249,938
*Symbol Technologies ......................... 12,500 556,250
*Xilinx ...................................... 16,400 519,675
*Zilog ....................................... 9,200 220,800
----------
9,733,739
----------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Consumer Products-1.14%
*Oakley .................................... 12,800 $ 582,400
*Revlon-Class A ............................ 6,600 192,225
----------
774,625
----------
Electronics & Electrical-1.60%
*LSI Logic ................................. 19,700 512,200
UCAR International ........................ 13,900 578,588
----------
1,090,788
----------
Energy-0.97%
*Petroleum Geo-Services A/S ADR ............ 12,000 339,750
*Pride Petroleum Services .................. 22,800 322,050
----------
661,800
----------
Environmental Services-3.71%
*Philip Environmental ...................... 60,000 472,500
*Sanifill .................................. 15,700 773,225
*USA Waste Services ........................ 16,000 474,000
*United Waste Systems ...................... 25,400 812,800
----------
2,532,525
----------
Food, Beverage & Tobacco-1.35%
Dole Food ................................. 15,500 666,500
*Performance Food Group .................... 9,900 253,688
----------
920,188
----------
Healthcare & Pharmaceuticals-18.24%
*Access Health ............................. 9,350 444,125
*Apria Healthcare Group .................... 26,800 840,850
*Arterial Vascular Engineering ............. 4,600 165,600
*Dentsply International .................... 13,200 558,525
*Dura Pharmaceuticals ...................... 9,500 32,594
*Elan PLC-ADR .............................. 7,000 399,875
HBO & Co. ................................. 19,840 1,341,680
*HEALTHSOUTH ............................... 40,900 1,472,400
*Health Management Associates Class A ...... 69,945 1,416,386
*Interim Services .......................... 15,400 656,425
*Living Centers of America ................. 13,700 470,938
*Mariner Health Group ...................... 5,700 105,450
18
<PAGE>
Growth Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Healthcare & Pharmaceuticals (Continued)
*MedPartners/Mullikin ...................... 18,300 $ 382,013
*NBTY ...................................... 29,800 298,000
*Physician Reliance Network ................ 18,200 409,500
Quantum Health Resources .................. 40,400 684,275
*Quorum Health Group ....................... 22,600 596,075
Teva Pharmaceutical ADR ................... 10,500 398,344
*Value Health .............................. 12,812 302,684
*Vivra ..................................... 22,575 742,153
*Watson Pharmaceutical ..................... 5,700 215,888
----------
12,433,780
----------
Leisure, Lodging & Entertainment-11.98%
*Anchor Gaming ............................. 1,900 114,238
*Boston Chicken ............................ 18,600 603,338
Callaway Golf ............................. 34,200 1,137,150
Circus Circus Enterprises ................. 8,000 328,000
*DAKA International ........................ 18,300 427,763
*Foodmaker ................................. 55,200 476,100
*HFS ....................................... 23,200 1,624,000
*Interstate Hotels ......................... 11,200 249,200
*Landry's Seafood Restaurants .............. 8,400 204,750
La Quinta Inns ............................ 13,700 458,950
*Lone Star Steakhouse/Saloon ............... 20,900 787,669
*Mirage Resorts ............................ 18,000 972,000
*Prime Hospitality ......................... 18,900 311,850
*Station Casinos ........................... 18,000 257,625
*WMS Industries ............................ 8,700 214,238
----------
8,166,871
----------
Retail-11.31%
*CompUSA ................................... 15,400 525,525
*Compucom Systems .......................... 32,100 345,075
*Corporate Express ......................... 6,000 240,375
*Friedman's ................................ 1,400 35,875
*General Nutrition ......................... 51,400 896,288
*Intelligent Electronics ................... 54,200 457,313
*Kohl's .................................... 21,400 783,775
*Micro Warehouse ........................... 15,900 314,025
*Neostar Retail Group ...................... 14,600 73,913
*Office Depot .............................. 18,300 372,863
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Retail (Continued)
*Saks Holdings ............................. 11,100 $ 378,788
St. John Knits ............................ 9,600 428,400
*Staples ................................... 58,800 1,142,925
*Sunglass Hut International ................ 22,900 556,756
Talbots ................................... 13,700 443,538
*Tractor Supply ............................ 15,600 360,750
*Value City Department Stores .............. 32,300 355,300
----------
7,711,484
----------
Telecommunications-1.18%
*American Portable Telecom ................. 9,200 96,600
*Glenayre Technologies ..................... 9,500 474,406
*InterVoice ................................ 11,800 233,050
----------
804,056
----------
Textiles, Apparel & Furniture-6.17%
*Cyrk ...................................... 12,800 172,000
*Donna Karan ............................... 7,600 212,800
*Designer Holdings Ltd. .................... 21,200 564,450
Gucci Group N.V ........................... 19,200 1,238,400
*Nine West Group ........................... 12,000 613,500
*Tommy Hilfiger ............................ 22,100 1,185,113
Warnaco Group Class A ..................... 8,700 224,025
----------
4,210,288
----------
Transportation & Shipping-1.59%
*Atlas Air ................................. 8,000 462,000
Illinois Central .......................... 22,050 625,669
----------
1,087,669
----------
Utilities-1.19%
*AES ....................................... 28,797 809,916
----------
809,916
----------
Miscellaneous-3.77%
*ADT Limited ............................... 55,900 1,055,113
*CUC International ......................... 32,275 1,145,763
*Personnel Group of America Inc. ........... 14,900 366,913
----------
2,567,789
----------
Total Common Stock (cost $47,046,645) ..... 61,569,447
----------
19
<PAGE>
Growth Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
Repurchase Agreements-9.90%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $2,017,000
U.S. Treasury Notes 7.75% due 1/31/00
market value $2,166,438 ) ................... $2,115,000 $2,115,000
With J.P. Morgan Securities 5.40% 7/1/96 (dated
6/28/96, collateralized by $2,344,000
U.S. Treasury Notes 6.25% due 8/31/00
market value $ 2,374,526 ) .................. 2,318,000 2,318,000
With PaineWebber 5.40% 7/1/96 (dated
6/2/96, collateralized by $1,375,000
U.S.Treasury Notes 7.875% due 4/15/98
market value $1,439,060 and $937,000
U.S. Treasury Notes 5.00% due 1/31/99
market value $928,574 ) .................... $2,318,000 $2,318,000
----------
Total Repurchase Agreements
(cost $6,751,000) ........................... $6,751,000
----------
<TABLE>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED (cost $53,797,645)-100.20% ............................. 68,320,447
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS -(0.20%) ...................................... (134,867)
-----------
NET ASSETS APPLICABLE TO 4,276,825 SHARES ($0.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $15.94 PER SHARE-100.00% ...................................................... $68,185,580
===========
- ----------
*Non-income producing security for the six months ended June 30, 1996
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund with 50,000,000 shares
allocated to the Series ..................................................................... $ 49,934,187
Accumulated undistributed:
Net investment income ....................................................................... (94,579)
Net realized gain on investments ............................................................ 3,823,170
Net unrealized appreciation of investments .................................................. 14,522,802
------------
Total net assets .............................................................................. $ 68,185,580
============
</TABLE>
See accompanying notes
20
<PAGE>
Delaware Group Premium Fund, Inc.-International Equity Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Market
Number Value
of Shares (U.S. $)
COMMON STOCK-90.52%
Australia-8.00%
Amcor ................................. 18,952 $ 129,022
CSR Limited ........................... 889,966 3,144,929
National Australia Bank ............... 363,113 3,357,924
Pacific Dunlop ........................ 716,926 1,613,732
---------
8,245,607
---------
Belgium-3.99%
Electrabel SA ......................... 12,200 2,605,190
G.I.B. Holdings ....................... 33,700 1,512,407
---------
4,117,597
---------
Canada-2.14%
BC Telecom ............................ 113,800 2,204,167
---------
2,204,167
---------
France-7.60%
Alcatel Alsthom ....................... 9,872 861,003
Campagnie de Saint Gobain ............. 19,289 2,581,558
Elf Aquitaine ......................... 47,259 3,475,507
Societe Television Francaise .......... 8,000 913,735
---------
7,831,803
---------
Germany-5.98%
Bayer ................................. 84,600 2,976,368
Continental ........................... 57,200 928,218
Siemens ............................... 42,050 2,253,754
---------
6,158,340
---------
Hong Kong-3.00%
Hong Kong Electric .................... 585,000 1,783,606
Wharf Holdings Limited ................ 366,000 1,309,760
---------
3,093,366
---------
Indonesia-1.52%
PT Bank Dagang Nasional ............... 1,135,500 951,362
PT Semen Gresik ....................... 210,000 611,298
---------
1,562,660
---------
<PAGE>
Market
Number Value
of Shares (U.S. $)
COMMON STOCK (Continued)
Japan-13.73%
Amano ...................................... 196,000 $ 2,912,797
Eisai ...................................... 121,800 2,298,710
Hitachi .................................... 258,000 2,399,311
Kinki Coca-Cola Bottling ................... 120,000 1,816,168
Matsushita Electric ........................ 136,000 2,529,506
Nichido Fire & Marine ...................... 283,500 2,189,289
----------
14,145,781
----------
Malaysia-2.47%
Oriental Holdings Berhad ................... 228,000 1,489,420
Sime Darby Berhad .......................... 380,000 1,050,817
----------
2,540,237
----------
Netherlands-6.03%
Elsevier-CVA ............................... 119,500 1,813,152
Koninklijke Van Ommeren .................... 40,100 1,578,629
Royal Dutch Petroleum ...................... 11,350 1,752,701
Unilever NV-CVA ............................ 7,360 1,064,979
----------
6,209,461
----------
New Zealand-3.28%
Carter Holt Harvey Limited ................. 277,800 633,743
Telecom Corp. of New Zealand ............... 654,784 2,745,275
----------
3,379,018
----------
Philippines-1.35%
Philippine Long Distance Telephone
Company ADR .............................. 23,900 1,389,187
----------
1,389,187
----------
Singapore-1.04%
Jardine Matheson Holdings Limited .......... 145,622 1,070,322
----------
1,070,322
----------
Spain-5.12%
Banco Central Hispanoamer S.A .............. 67,449 1,373,065
Iberdrola S.A .............................. 132,143 1,355,330
Telefonica de Espana ....................... 138,500 2,549,393
----------
5,277,788
----------
21
<PAGE>
International Equity Series
Statement of Net Assets (Continued)
Market
Number Value
of Shares (U.S. $)
COMMON STOCK (Continued)
United Kingdom-25.27%
Bass plc ................................... 173,000 $ 2,174,596
Blue Circle Industries plc ................. 522,000 2,919,826
Boots plc .................................. 179,200 1,612,132
British Airways plc ........................ 345,000 2,969,702
British Gas plc ............................ 500,000 1,398,384
Cable & Wireless plc ....................... 285,000 1,886,420
Dalgety plc ................................ 291,250 1,601,965
GKN plc .................................... 162,000 2,486,886
Great Universal Stores plc ................. 206,000 2,093,288
RTZ ........................................ 135,100 2,000,471
Taylor Woodrow plc ......................... 1,080,000 2,617,775
Unigate plc ................................ 368,000 2,275,699
-----------
26,037,144
-----------
Total Common Stock (cost $83,361,625) ...... 93,262,478
-----------
Principal Market
Amount Value
(U.S. $)
REPURCHASE AGREEMENTS-7.69%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $2,368,000
U.S. Treasury Notes 7.75% due 1/31/00
market value $2,543,367) ................. $ 2,483,000 $ 2,483,000
With J.P. Morgan Bank 5.40% 7/1/96 (dated
6/28/96, collateralized by $2,751,000
U.S. Treasury Notes 6.25% due 8/31/00
market value $2,786,851) ................. 2,721,000 2,721,000
With PaineWebber 5.40% 7/1/96 (dated
6/28/96, collateralized by $1,613,000
U.S. Treasury Notes 7.875% due 4/15/98
market value $1,687,807 and $1,100,000
U.S. Treasury Notes 5.00% due 1/31/99
market value $1,089,915) ................. 2,720,000 2,720,000
-----------
Total Repurchase Agreements
(cost $7,924,000) ........................ 7,924,000
-----------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED (cost $91,285,625)-98.21% ............................. 101,186,478
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-1.79% ........................................ 1,842,437
-------------
NET ASSETS APPLICABLE TO 7,485,052 SHARES ($.01 par value) OUTSTANDING;
EQUIVALENT TO $13.76 PER SHARE-100.00% ..................................................... $ 103,028,915
=============
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to the Fund with 50,000,000 shares
allocated to the Series .................................................................. $ 89,897,450
Accumulated undistributed:
Net investment income* ..................................................................... 3,037,285
Net realized loss on investments ........................................................... (119,194)
Net unrealized appreciation on investments and foreign currencies .......................... 10,213,374
-------------
Total net assets ............................................................................. $ 103,028,915
=============
</TABLE>
- ----------
* Accumulated net investment income (loss) includes net realized gain/(loss)
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
See accompanying notes
22
<PAGE>
Delaware Group Premium Fund, Inc.-Emerging Growth Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Number Market
of Shares Value
COMMON STOCK-88.22%
Aerospace & Defense-1.03%
AAR ........................................... 10,200 $ 207,825
*Kellstrom Industries .......................... 16,400 130,175
---------
338,000
---------
Automobiles & Auto Parts-0.84%
*Boyds Wheels .................................. 8,700 111,469
*Custom Chrome ................................. 6,100 163,175
---------
274,644
---------
Banking, Finance & Insurance-0.57%
*CRW Financial ................................. 3,160 102,700
*Dignity Partners .............................. 5,200 45,662
*Medallion Financial ........................... 3,200 39,600
---------
187,962
---------
Buildings & Materials-0.37%
*LSI Industries ................................ 7,200 122,400
---------
122,400
---------
Cable, Media & Publishing-3.89%
*Central European Media Entertainment .......... 9,700 237,650
*Evergreen Media Class A ....................... 4,200 178,500
*HA-LO Industries .............................. 1,550 40,688
*Infinity Broadcasting Class A ................. 9,350 280,500
*Marvel Entertainment Group .................... 6,400 60,000
*Norwood Promotional Products .................. 10,600 234,525
*Young Broadcasting Class A .................... 6,400 242,400
---------
1,274,263
---------
Computers & Technology-13.59%
A.D.A.M. Software ............................. 7,700 25,025
*Activision .................................... 11,800 154,138
*Bachman Information Systems ................... 25,800 182,919
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Computuers & Technology (Continued)
*C-COR Electronics ............................. 8,500 $ 150,875
*Cadence Design Systems ........................ 13,150 443,813
*Caere ......................................... 21,100 242,650
*DecisionOne ................................... 4,800 115,200
*Elamex S.A. de C.V ............................ 18,300 180,713
*Excalibur Technologies ........................ 8,800 195,800
*Fulcrum Technologies .......................... 3,800 49,400
*GTECH Holdings ................................ 10,300 305,138
*Gandalf Technologies .......................... 17,200 135,987
*HPR ........................................... 8,900 185,788
*Health Systems Design ......................... 900 13,388
*Imnet Systems ................................. 7,900 239,963
*Oracle ........................................ 6,500 256,344
*PLATINUM Technology ........................... 12,295 185,193
*Quality Systems ............................... 7,000 125,125
*Ross Systems .................................. 25,900 145,688
*SPSS .......................................... 4,300 108,575
Scientific-Atlanta ............................ 13,000 201,500
*Sierra On-Line Class A ........................ 10,700 468,794
*Sunquest Information Systems .................. 2,800 41,650
*Symantec ...................................... 9,200 115,575
*Techforce ..................................... 6,000 37,125
*Transition Systems ............................ 2,900 81,925
*Verity ........................................ 1,000 28,375
*Walsh International ........................... 4,600 42,263
---------
4,458,929
---------
Consumer Products-1.41%
Alberto Culver Class A ........................ 1,300 52,000
Alberto Culver Class B ........................ 1,000 46,375
*FoxMeyer Health ............................... 10,400 154,700
*Gilend Sciences ............................... 8,300 208,538
---------
461,613
---------
23
<PAGE>
Emerging Growth Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Electronics & Electrical-5.32%
*Cable Design Technologies ................... 9,000 $ 297,000
*CIDCO ....................................... 5,900 207,975
*Digital Microwave ........................... 6,900 114,281
*ITI Technologies ............................ 7,500 247,031
*Protection One .............................. 13,500 221,906
*Storage Technology .......................... 13,400 512,550
*TriQuint Semiconductor ...................... 7,000 144,375
---------
1,745,118
---------
Energy-2.76%
*ENSCO International ......................... 8,100 263,250
*Forasol-Foramer N.V ......................... 14,200 179,275
*Global Industries ........................... 5,200 156,000
*Marine Drilling ............................. 30,600 307,913
---------
906,438
---------
Environmental Services-7.56%
*Continental Waste Industries ................ 18,900 422,887
*+Republic Industries ........................ 58,920 1,719,728
*++Republic Industries ....................... 11,600 337,559
---------
2,480,174
---------
Food, Beverage & Tobacco-3.26%
*Buffets ..................................... 26,000 315,250
Dreyer's Grand Ice Cream .................... 8,300 264,563
*Hart Brewing ................................ 2,600 27,300
*Lincoln Snacks .............................. 3,900 5,606
*Opta Food Ingredients ....................... 13,400 135,675
*Sonic ....................................... 13,050 319,725
---------
1,068,119
---------
Healthcare & Pharmaceuticals-11.95%
*Aksys Ltd. .................................. 1,500 $ 22,313
*American Oncology Resources ................. 10,900 235,713
*Apache Medical Systems ...................... 800 9,800
*CIMA Labs ................................... 15,800 120,475
*Columbia Laboratories ....................... 12,600 187,425
*Connective Therapeutics ..................... 14,800 153,550
*++Cypress Bioscience ........................ 52,933 88,456
*Cytyc ....................................... 6,100 159,363
*DepoTech .................................... 7,900 197,500
*DUSA Pharmaceuticals ........................ 9,000 79,313
*Eclipse Surgical Technologies ............... 3,300 45,375
*EntreMed .................................... 1,900 28,738
*Ethical Holdings PLC ........................ 11,100 108,225
*FPA Medical Management ...................... 20,300 315,919
*FemRx ....................................... 6,000 65,250
*IBAH ........................................ 8,800 70,950
*IMPATH ...................................... 1,700 30,813
*Interneuron Pharmaceutical .................. 1,200 35,700
*Molecular Biosystems ........................ 16,700 150,300
*NCS HealthCare .............................. 2,200 66,275
*NeoPath ..................................... 5,200 130,650
*Norland Medical Systems ..................... 9,300 176,700
*Noven Pharmaceuticals ....................... 900 14,456
*Pediatrix Medical Group ..................... 2,000 98,000
*Renal Treatment Centers ..................... 12,800 368,000
*Royce Laboratories .......................... 12,100 62,013
*Sano ........................................ 8,500 133,875
*Sunrise Assisted Living ..................... 2,300 56,063
*Total Renal Care Holdings ................... 8,400 354,900
*Ventritex ................................... 12,100 207,969
*Vertex Pharmaceuticals ...................... 4,500 137,250
*Vyrex ....................................... 2,100 8,663
---------
3,919,992
---------
24
<PAGE>
Emerging Growth Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Industrial Machinery-0.80%
*Central Sprinkler............ 11,900 $ 261,800
----------
261,800
----------
Leisure, Lodging & Entertainment-10.31%
*Ascent Entertainment Group ..................... 21,600 540,000
*Bell Sports .................................... 7,207 52,701
*Cinergi Pictures Entertainment ................. 18,600 41,269
*Dave & Buster's ................................ 8,900 236,963
*Equity Marketing ............................... 6,600 103,125
*Extended Stay America .......................... 8,900 279,238
*GT Bicycles .................................... 9,000 147,375
K2 ............................................. 5,200 141,050
*Mirage Resorts ................................. 8,100 437,400
*Morton's Restaurant Group ...................... 12,600 220,500
*Rio Hotel and Casino ........................... 12,300 189,113
*Savoy Pictures Entertainment ................... 21,200 111,300
*Studio Plus Hotels ............................. 5,900 193,225
*Sun International Hotels ....................... 8,000 388,000
*Trump Hotels & Casino Resorts .................. 6,700 190,950
*WMS Industries ................................. 4,500 110,813
----------
3,383,022
----------
Metals & Mining-0.69%
*Gibraltar Steel ................................ 11,300 226,000
----------
226,000
----------
Real Estate-1.31%
*Security Capital Pacific Trust ................. 19,800 430,650
----------
430,650
----------
Retail-10.52%
*99 Cents Only Stores ........................... 100 1,400
*Central Tractor Farm & Country ................. 3,700 46,481
Duty Free International ........................ 18,600 283,650
*Eagle Hardware & Garden ........................ 10,800 164,025
*Egghead ........................................ 20,900 229,900
*Finish Line Class A ............................ 7,100 202,794
*General Nutrition .............................. 13,200 230,175
*InaCom ......................................... 12,000 225,750
*Neiman-Marcus Group ............................ 8,300 224,100
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Retail (Continued)
*Neostar Retail Group .............................. 2,000 $ 10,125
*Petco Animal Supplies ............................. 6,700 192,625
*Piercing Pagoda ................................... 5,800 105,125
*Russ Berrie ....................................... 20,100 369,338
Schultz Sav-O Stores .............................. 14,400 185,400
*Staples ........................................... 8,950 173,966
*Toy Biz ........................................... 10,800 218,700
*Urban Outfitters .................................. 7,100 177,500
*Vons Companies .................................... 5,100 190,613
*Wet Seal .......................................... 9,200 219,075
---------
3,450,742
---------
Telecommunications-3.87%
*EIS International ................................. 14,000 354,375
*IntelCom Group .................................... 8,400 210,000
*P.T. Pasifik Satelit Nusantara .................... 3,600 72,900
*PageMart Wireless ................................. 6,000 61,125
*ProNet ............................................ 4,300 52,944
*Spectralink ....................................... 4,600 42,838
*Tele-Communications International 10,600 187,488
*Teleport Communications Group ..................... 4,200 79,800
*TresCom International ............................. 7,500 76,875
*Verilink .......................................... 5,100 131,325
---------
1,269,670
---------
Textiles, Apparel & Furniture-1.29%
*Cutter & Buck ..................................... 5,000 61,563
Pillowtex ......................................... 9,000 111,375
*Sport-Haley ....................................... 5,900 87,025
Wolverine World Wide .............................. 5,000 162,500
---------
422,463
---------
Transportation & Shipping-2.01%
*Midwest Express Holdings .......................... 3,200 102,800
Pittston Brink's Group ............................ 8,900 259,213
*Rush Enterprises .................................. 4,600 57,500
*Team Rental Group ................................. 2,200 30,525
*Trico Marine Services ............................. 9,300 210,413
---------
660,451
---------
25
<PAGE>
Emerging Growth Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Utilities-1.22%
*AES China Generating Class A ................... 15,400 $ 162,663
*York Research .................................. 22,400 238,000
---------
400,663
---------
Miscellaneous-3.65%
*CUC International .............................. 16,400 582,200
*NFO Research ................................... 8,300 194,013
*National Education ............................. 16,500 235,125
*Norrell ........................................ 3,800 186,675
---------
1,198,013
----------
Total Common Stock (cost $24,245,736) ........... 28,941,126
----------
Principal Market
Amount Value
REPURCHASE AGREEMENTS-11.17%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $1,095,000
U.S. Treasury Notes 7.75% due 1/31/00,
market value $1,175,714) ...................... $ 1,148,000 $1,148,000
With J.P. Morgan Securities 5.40% 7/1/96 (dated
6/28/96, collateralized by $1,272,000
U.S. Treasury Notes 6.25% due 8/31/00,
market value $1,288,268) ...................... 1,258,000 1,258,000
With PaineWebber 5.40% 7/1/96 (dated 6/28/96,
collateralized by $746,000 U.S.Treasury Notes
7.875% due 4/15/98, market value $780,216 and
$508,000 U.S. Treasury Notes 5.00% due 1/31/99,
market value $503,831) ........................ 1,257,000 1,257,000
----------
Total Repurchase Agreements
(cost $3,663,000) ............................. 3,663,000
----------
TOTAL MARKET VALUE OF SECURITIES OWNED
(cost $27,908,736)-99.39% ...................... 32,604,126
RECEIVABLES AND OTHER ASSETS NET OF
LIABILITIES-0.61% .............................. 199,109
-----------
NET ASSETS APPLICABLE TO 2,165,126 SHARES
($0.01 PAR VALUE) OUTSTANDING; EQUIVALENT
TO $15.15 PER SHARE-100.00% ................... $32,803,235
===========
- ----------
* Non-income producing securities for the six months ended June 30, 1996.
+ Security exempt from registration under the Securities Act of 1933. These
securities may be resold in transactions exempt from registration, normally
to qualified institutional buyers (see note 6).
++ Restricted Securities-Investment in securities not registered under the
Securities Act of 1933. These securities have contractual restrictions on
resale (see note 6).
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $0.01 par value, 500,000,000 shares
authorized to the Fund with 50,000,000 shares
allocated to the Series ......................... $27,077,929
Accumulated undistributed:
Net investment income ........................... 34,616
Net realized gain on investments ................ 995,300
Net unrealized appreciation of investments ...... 4,695,390
-----------
Total net assets .................................. $32,803,235
===========
26
<PAGE>
Delaware Group Premium Fund, Inc.-Value Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Number Market
of Shares Value
COMMON STOCK-90.86%
Aerospace & Defense-0.46%
Thiokol ....................................... 1,800 $ 71,100
----------
71,100
----------
Automobiles & Automotive Parts-5.42%
Arvin Industries .............................. 8,800 195,800
*Clarcor ....................................... 3,400 84,150
*Custom Chrome ................................. 4,600 123,050
Exide ......................................... 4,500 109,125
*Monro Muffler Brake ........................... 9,515 173,649
Titan Wheel International ..................... 9,100 145,600
---------
831,374
---------
Banking, Finance & Insurance-14.50%
*Americredit ................................... 13,100 204,688
*AMRESCO ....................................... 11,600 199,375
Enhance Financial Services Group .............. 5,200 145,600
Everest Reinsurance Holdings .................. 6,400 165,600
*Financial Federal ............................. 3,400 53,125
First American (Tennesse) ..................... 1,700 71,719
First Virginia Banks .......................... 2,100 84,000
Horace Mann Educators ......................... 5,100 161,925
Keystone Financial ............................ 4,500 151,875
ONBANCorp ..................................... 5,000 163,438
PartnerRe Limited ............................. 5,000 149,688
Penncorp Financial Group ...................... 5,200 165,100
PMI Group ..................................... 2,900 123,250
Roosevelt Financial Group ..................... 5,500 106,219
Titan Holdings ................................ 2,835 39,690
*Transport Holdings Class A .................... 1,900 88,588
Union Planters ................................ 4,900 148,838
---------
2,222,718
---------
Building, Housing & Materials-2.46%
*Central Sprinkler ............................. 4,800 105,600
Continental Homes Holdings .................... 8,400 180,600
*Southern Energy Homes ......................... 4,300 91,644
---------
377,844
---------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Chemicals-2.88%
*Carbide/Graphite Group .............................. 4,000 $ 73,750
Ferro ............................................... 5,600 148,400
*Scotts .............................................. 8,400 147,000
*Sterling Chemicals .................................. 6,200 72,075
---------
441,225
---------
Computers & Technology-3.44%
*Burr-Brown .......................................... 7,900 137,263
*Cherry Class A ...................................... 3,800 41,800
*Cherry Class B ...................................... 3,700 38,850
Methode Electronics Class A ......................... 6,950 119,888
*Micro Linear ........................................ 21,400 157,825
Penn Engineering & Manufacturing .................... 1,700 32,088
---------
527,714
---------
Energy-5.93%
Belco Oil & Gas ..................................... 3,500 124,250
*Belden & Blake ...................................... 6,050 127,806
Cross Timbers Oil ................................... 7,900 195,525
*Global Marine ....................................... 5,100 70,763
*Seacor Holdings ..................................... 2,900 129,050
*TransTexas Gas ...................................... 13,600 124,100
Valero Energy ....................................... 5,500 137,500
---------
908,994
---------
Food, Beverage & Tobacco-3.52%
*Bush Boake Allen .................................... 4,000 87,000
Dimon ............................................... 8,700 160,950
*Fresh America ....................................... 12,200 163,938
International Multifoods ............................ 7,000 127,750
---------
539,638
---------
Healthcare & Pharmaceuticals-8.70%
*Arbor Health Care ................................... 900 24,750
*Lincare Holdings .................................... 4,400 172,150
*Mariner Health Group ................................ 11,500 212,750
*Marquette Electronics Class A ....................... 6,300 110,250
27
<PAGE>
Value Series
Statement of Net Assets (Continued)
Number Market
of Shares Value
COMMON STOCK (Continued)
Healthcare & Pharmaceuticals (Continued)
*Maxicare Health Plans ............................... 7,400 $ 141,063
*Mid Atlantic Medical Services ....................... 9,900 141,075
Owens & Minor ....................................... 9,500 110,438
*Regency Health Services ............................. 18,600 211,575
Sullivan Dental Products ............................ 6,900 70,725
*Sunrise Medical ..................................... 7,200 138,600
---------
1,333,376
---------
Industrial Machinery-9.56%
Cascade ............................................. 4,600 60,375
Columbus McKinnon ................................... 8,700 134,306
*Global Industries Technology ........................ 8,600 137,600
Greenfield Industries ............................... 6,300 209,475
IDEX ................................................ 4,400 167,200
Keystone International .............................. 9,000 186,750
Kuhlman ............................................. 6,900 119,888
Regal-Beloit ........................................ 7,200 142,200
*Rexel ............................................... 8,700 122,888
TriMas .............................................. 2,700 63,113
Varlen .............................................. 5,764 121,764
---------
1,465,559
---------
Media, Leisure & Entertainment-4.16%
*Ascent Entertainment Group .......................... 7,900 197,500
*Devon Group ......................................... 6,100 196,725
*Hollywood Park ...................................... 14,200 134,013
*Valassis Communications ............................. 5,900 109,150
---------
637,388
---------
Metals & Mining-1.50%
AK Steel Holding .................................... 2,000 78,250
*Century Aluminum .................................... 7,700 120,794
*Universal Stainless & Alloy Products ................ 3,400 31,450
---------
230,494
---------
Paper & Forest Products-3.75%
Caraustar Industries ................................ 5,500 147,125
Chesapeake .......................................... 4,900 128,625
Longview Fibre ...................................... 9,300 158,100
Rayonier ............................................ 3,700 140,600
---------
574,450
---------
<PAGE>
Number Market
of Shares Value
COMMON STOCK (Continued)
Real Estate-6.54%
Developers Diversified Realty ...................... 5,600 $ 178,500
Duke Realty Investments ............................ 3,700 111,925
Public Storage ..................................... 8,000 165,000
ROC Communities .................................... 6,400 152,800
Reckson Associates Realty .......................... 6,000 198,000
Starwood Lodging Trust ............................. 5,400 196,425
----------
1,002,650
----------
Retail-0.80%
Pier 1 Imports ..................................... 8,200 121,975
----------
121,975
----------
Textiles, Apparel & Furniture-2.72%
*Cone Mills ......................................... 6,900 77,625
Kellwood ........................................... 6,900 126,788
Juno Lighting ...................................... 7,400 125,338
Pillowtex .......................................... 7,000 86,625
----------
416,376
----------
Transportation & Shipping-7.66%
*ABC Rail Products .................................. 9,000 194,063
Airborne Freight ................................... 5,300 137,800
*Genesee & Wyoming .................................. 4,300 88,419
*Landstar Systems ................................... 4,900 140,875
*M.S. Carriers ...................................... 3,500 72,625
*Mesaba Holdings .................................... 11,900 136,850
*Offshore Logistics ................................. 9,100 126,831
*Skywest ............................................ 6,100 112,850
USFreightways ...................................... 8,400 164,325
----------
1,174,638
----------
Utilities-6.86%
Central Hudson Gas & Electric ...................... 5,200 162,500
Central Maine Power ................................ 10,100 146,450
IES Industries ..................................... 5,200 155,350
MidAmerican Energy ................................. 8,000 138,000
Public Service Company of New Mexico ............... 7,900 161,950
Sierra Pacific Resources ........................... 5,900 149,713
United Illuminating ................................ 3,700 138,288
----------
1,052,251
----------
Total Common Stock (cost $12,950,216) .............. 13,929,764
----------
28
<PAGE>
Value Series
Statement of Net Assets (Continued)
Principal Market
Amount Value
REPURCHASE AGREEMENTS-8.99%
With Chase Manhattan 5.40% 7/1/96 (dated
6/28/96, collateralized by $412,000
U.S. Treasury Notes 7.75% due 1/31/00
market value $442,296) .......................... $ 432,000 $432,000
With J.P. Morgan Securities 5.40% 7/1/96 (dated
6/28/96, collateralized by $478,000
U.S. Treasury Notes 6.25% due 8/31/00
market value $484,639) .......................... 473,000 473,000
With PaineWebber 5.40% 7/1/96 (dated
6/28/96, collateralized by $280,000
U.S. Treasury Notes 7.875% due 4/15/98
market value $293,513 and $191,000
U.S. Treasury Notes 5.00% due 1/31/99
market value $189,539) .......................... $ 473,000 $473,000
---------
Total Repurchase Agreements (cost $1,378,000) ...... 1,378,000
---------
<TABLE>
<CAPTION>
<S> <C>
TOTAL MARKET VALUE OF SECURITIES OWNED (cost $14,328,216)-99.85% ............................. 15,307,764
RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES-0.15% ........................................ 22,791
-----------
NET ASSETS APPLICABLE TO 1,191,287 SHARES ($.01 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $12.87 PER SHARE-100.00% ..................................................... $15,330,555
===========
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to the Fund with 50,000,000 shares
allocated to the Series .................................................................... $12,969,542
Accumulated undistributed:
Net investment income ...................................................................... 82,834
Net realized gain on investments ........................................................... 1,298,644
Net unrealized appreciation of investments ................................................. 979,535
-----------
Total net assets ............................................................................. $15,330,555
===========
</TABLE>
- ----------
*Non-income producing security for the six months ended June 30, 1996.
See accompanying notes
29
<PAGE>
Delaware Group Premium Fund, Inc.-Global Bond Series
Statement of Net Assets
June 30, 1996
(Unaudited)
Market
Principal Value
Amount* (U.S. $)
BONDS-94.54%
Austria-2.66%
Republic of Austria 5.625% 12/14/00 ....... Ast 1,000,000 $ 94,144
-------
94,144
-------
Belgium-2.11%
Kingdom of Belgium 10.00% 8/2/00 .......... Bef 2,000,000 74,538
-------
74,538
-------
Canada-8.92%
Autobahn Schnell 8.50% 3/3/03 ............. C$ 60,000 45,667
Export-Inport Bank of Japan
7.75% 10/8/02 ........................... 60,000 44,349
Government of Canada 10.25% 3/15/14 ....... 100,000 88,543
KFW International Finance
6.50% 12/28/01 .......................... 60,000 42,426
Kingdom of Norway 8.375% 1/27/03 .......... 60,000 45,365
Ontario Hydro 10.00% 3/19/01 ............. 60,000 48,797
-------
315,147
-------
Denmark-8.18%
Kingdom of Denmark 8.00% 11/15/01 ......... Dk 1,100,000 200,390
Kingdom of Denmark 8.00% 3/15/06 .......... . 500,000 88,657
-------
289,047
-------
Germany-3.58%
Baden Wurt L Finance NV
6.625% 8/20/03 .......................... Dem 25,000 16,655
Bundesrepblik Deutscheland
8.375% 5/21/01 .......................... 150,000 109,980
-------
126,635
-------
Italy-4.16%
European Investment Bank
12.75% 2/15/00 .......................... Itl 200,000,000 146,939
-------
146,939
-------
Netherlands-1.88%
Netherlands Government 9.00% 5/15/00 ...... Nlg 100,000 66,491
-------
66,491
-------
<PAGE>
Market
Principal Value
Amount* (U.S. $)
BONDS (Continued)
New Zealand-16.60%
Government of New Zealand
8.00% 2/15/01............................ NZ 200,000 $ 131,342
Government of New Zealand
8.00% 4/15/04............................ 400,000 260,739
Government of New Zealand
8.00% 11/15/06........................... 300,000 194,835
---------
586,916
---------
Spain-16.89%
Spanish Government 10.50% 10/30/03 ........ Sp 50,000,000 428,088
Spanish Government 8.20% 2/28/09 .......... 23,000,000 169,041
---------
597,129
---------
Sweden-3.42%
Swedish Government 13.00% 6/15/01 ......... Sk 400,000 73,710
Swedish Government 9.00% 4/20/09 .......... 300,000 47,228
---------
120,938
---------
United Kingdom-11.36%
Abbey National Treasury 8.00% 4/2/03 ...... Gbp 50,000 77,639
Barclays Bank plc 6.50% 2/16/04 ........... 30,000 42,126
DEPFA Finance 7.125% 11/11/03 ............. 50,000 73,464
Glaxo Wellcome plc 8.75% 12/1/05 .......... 80,000 125,932
UK Conversion S47 Stock Guilt
9.00% 3/3/00............................. 50,000 82,422
---------
401,583
---------
United States-14.78%
U.S.Treasury Notes 7.50% 11/15/01$ ........ $ 500,000 522,310
---------
522,310
---------
Total Bonds (cost $3,313,902).............. 3,341,817
---------
30
<PAGE>
Global Bond Series
Statement of Net Assets (Continued)
Market
Principal Value
Amount* (U.S. $)
REPURCHASE AGREEMENTS-5.80%
With Chase Manhattan 5.40% 7/1/96
(dated 6/28/96, collateralized by $61,000
U.S. Treasury Notes 7.75% due 1/31/00,
market value $65,799) ........................... $ 64,000 $64,000
With J.P. Morgan Securities 5.40% 7/1/96
(dated 6/28/96, collateralized by $71,000
U.S. Treasury Notes 6.25% due 8/31/00,
market value $72,098) ........................... 71,000 71,000
With PaineWebber 5.40% 7/1/96
(dated 6/28/96, collateralized by $42,000
U.S Treasury Notes 7.875% due 4/15/98,
market value $43,664 and $28,000
U.S. Treasury Notes 5.00% due 1/31/99,
market value $28,197) ........................... $ 70,000 $70,000
-------
Total Repurchase Agreements
(cost $205,000) ................................. 205,000
-------
TOTAL MARKET VALUE OF SECURITIES OWNED
(cost $3,518,902)-100.34% ........................................ 3,546,817
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS -(0.34%) .......... (12,160)
-----------
NET ASSETS APPLICABLE TO 348,646 SHARES ($.01 PAR VALUE)
OUTSTANDING; EQUIVALENT TO $10.14 PER SHARE-100.00% .............. $ 3,534,657
===========
- ----------
* Principal amount is stated in the currency in which each bond is
denominated.
Ast-Austrian Schillings Nlg-The Netherlands Guilders
Bef-Belgian Francs NZ$-New Zealand Dollars
C$-Canadian Dollars Sp-Spanish Peseta
Dk-Danish Kroner Sk-Swedish Kroner
Dem-German Marks Gbp-British Pounds
Itl-Italian Lira $-U.S. Dollars
<TABLE>
<CAPTION>
<S> <C>
COMPONENTS OF NET ASSETS AT JUNE 30, 1996
Common stock, $.01 par value, 500,000,000 shares authorized to the Fund with 50,000,000 shares allocated
to the Series ....................................................................................... $3,487,878
Accumulated undistributed income:
Net investment income** .............................................................................. 14,997
Net realized gain on investments** ................................................................... 4,958
Net unrealized appreciation of investments and foreign currencies .................................... 26,824
----------
Total net assets ....................................................................................... $3,534,657
==========
</TABLE>
- ----------
** Accumulated net investment income includes net realized gains on foreign
currencies. Net realized gains on foreign currencies are distributed as net
investment income in accordance with provisions of the Internal Revenue
Code.
See accompanying notes
31
<PAGE>
Delaware Group Premium Fund, Inc.
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended 6/30/96
Equity/ High Capital Multiple Money International Emerging
Income Yield Reserves Strategy Market Growth Equity Growth
Series Series Series Series Series Series Series* Series
------ ------ ------ ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest................... $ 67,263 $2,824,701 $ 971,487 $ 821,597 $507,800 $ 93,019 $ 196,038 $114,256
Dividends (net of foreign
tax withheld) ............ 1,979,454 25,772 -- 565,820 -- 68,911 1,890,465 19,925
--------- --------- ------- --------- ------- ------- --------- -------
2,046,717 2,850,473 971,487 1,387,417 507,800 161,930 2,086,503 134,181
--------- --------- ------- --------- ------- ------- --------- -------
EXPENSES:
Management fees............ 348,891 167,795 81,952 193,612 46,417 237,962 346,642 89,568
Dividend disbursing and
transfer agent fees and
expenses................. 5,886 1,912 1,442 3,095 950 3,864 4,865 1,190
Custodian fees............. 2,521 2,660 1,500 231 149 1,130 34,865 9,721
Professional fees.......... 1,700 2,662 1,642 701 2,168 2,953 2,896 2,982
Salaries................... 16,468 7,907 4,135 7,046 2,746 8,936 11,959 3,359
Taxes other than income.... 6,367 5,601 2,531 1,639 605 2,338 3,477 1,050
Directors' fees............ 730 639 602 653 594 657 696 493
Registration fees.......... 2,800 1,350 36 50 72 375 3,000 2,550
Reports to shareholders.... -- 800 1,979 1,713 1,315 1,363 2,400 1,878
Other...................... 4,240 757 2,187 2,224 1,192 3,703 1,996 1,390
--------- --------- ------- --------- ------- ------- --------- -------
389,603 192,083 98,006 210,964 56,208 263,281 412,796 114,181
Less expenses absorbed by
Delaware Management
Company, Inc. or
Delaware International
Advisers Ltd............. -- -- -- -- -- (10,949) (47,901) (19,654)
--------- --------- ------- --------- ------- ------- --------- -------
389,603 192,083 98,006 210,964 56,208 252,332 364,895 94,527
--------- --------- ------- --------- ------- ------- --------- -------
NET INVESTMENT INCOME (LOSS) 1,657,114 2,658,390 873,481 1,176,453 451,592 (90,402) 1,721,608 39,654
--------- --------- ------- --------- ------- ------- --------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions.. 9,197,446 375,825 (211,404) 3,544,638 -- 3,916,585 (95,813) 1,001,747
Foreign currencies....... -- -- -- -- -- -- 1,605,836 --
--------- --------- ------- --------- ------- ------- --------- -------
Net realized gain (loss). 9,197,446 375,825 (211,404) 3,544,638 -- 3,916,585 1,510,023 1,001,747
Net unrealized appreciation
(depreciation) of
investments and foreign
currencies during
the period............... (2,965,733) (1,114,405) (745,735) (1,022,206) -- 4,775,732 4,768,145 2,181,127
--------- --------- ------- --------- ------- ------- --------- -------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN
CURRENCIES............... 6,231,713 (738,580) (957,139) 2,522,432 -- 8,692,317 6,278,168 3,182,874
--------- --------- ------- --------- ------- ------- --------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $7,888,827 $1,919,810 $ (83,658) $3,698,885 $451,592 $8,601,915 $7,999,776 $3,222,528
========== ========== ========== ========== ======== ========== ========= ==========
<PAGE>
5/2/96+
to
6/30/96
Global
Value Bond
Series Series*
------ --------
INVESTMENT INCOME:
Interest................... $ 32,854 $39,119
Dividends (net of foreign
tax withheld) ............ 104,774 --
---------- -------
137,628 39,119
---------- -------
EXPENSES:
Management fees............ 51,393 3,978
Dividend disbursing and
transfer agent fees and
expenses................. 770 60
Custodian fees............. 3,621 2,200
Professional fees.......... 4,988 553
Salaries................... 1,939 127
Taxes other than income.... 1,013 58
Directors' fees............ 583 165
Registration fees.......... 659 220
Reports to shareholders.... 2,300 20
Other...................... 365 56
---------- -------
67,631 7,437
---------- -------
Less expenses absorbed by
Delaware Management
Company, Inc. or
Delaware International
Advisers Ltd............. (13,185) (3,214)
---------- -------
54,446 4,223
---------- -------
NET INVESTMENT INCOME (LOSS) 83,182 34,896
---------- -------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCIES
Net realized gain (loss) on:
Investment transactions.. 1,303,033 4,958
Foreign currencies....... -- (9,470)
---------- -------
Net realized gain (loss). 1,303,033 (4,512)
Net unrealized appreciation
(depreciation) of
investments and foreign
currencies during
the period............... (238,614) 26,824
---------- -------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS AND
FOREIGN CURRENCIES....... 1,064,419 22,312
---------- -------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $1,147,601 $57,208
========== =======
</TABLE>
- ---------------
+Date of initial public offering.
*The International Equity and the Global Bond Series were the only Series of
the Fund which engaged in foreign currency transactions during the period
ended June 30, 1996.
See accompanying notes
32
<PAGE>
Delaware Group Premium Fund, Inc.
Statements of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996
Equity/ High Capital Multiple Money
Income Yield Reserves Strategy Market
Series Series Series Series Series
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss)........ $ 1,657,114 $ 2,658,390 $ 873,481 $ 1,176,453 $ 451,592
Net realized gain (loss)
on investments and
foreign currencies................ 9,197,446 375,825 (211,404) 3,544,638 --
Net unrealized appreciation of
investments and foreign currencies
during the period ................ (2,965,733) (1,114,405) (745,735) (1,022,206) --
------------ ----------- ------------ ------------ ----------
Net increase (decrease) in net assets
resulting from operations......... 7,888,827 1,919,810 (83,658) 3,698,885 451,592
------------ ----------- ------------ ------------ ----------
DISTRIBUTION TO
SHAREHOLDERS FROM:
Net investment income............... (1,701,888) (2,652,355) (873,481) (1,734,080) (451,592)
Net realized gain from security
transactions...................... (8,895,014) -- -- (2,685,289) --
------------ ----------- ------------ ------------ ----------
(10,596,902) (2,652,355) (873,481) (4,419,369) (451,592)
------------ ----------- ------------ ------------ ----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold........... 14,486,850 5,590,174 2,163,333 3,420,039 22,833,713
Net asset value of shares issued
upon reinvestment of dividends
from net investment income........ 1,701,888 2,652,697 873,412 1,734,080 451,113
Net asset value of shares issued
upon reinvestment of
distributions from net realized
gain from security transactions... 8,895,014 -- -- 2,685,289 --
------------ ----------- ------------ ------------ ----------
25,083,752 8,242,871 3,036,745 7,839,408 23,284,826
Cost of shares repurchased.......... (8,732,004) (8,265,413) (3,256,727) (3,405,246) (18,680,746)
------------ ----------- ------------ ------------ ----------
Increase (decrease) in net assets
derived from capital share
transactions...................... 16,351,748 (22,542) (219,982) 4,434,162 4,604,080
------------ ----------- ------------ ------------ ----------
NET INCREASE (DECREASE)
IN NET ASSETS..................... 13,643,673 (755,087) (1,177,121) 3,713,678 4,604,080
------------ ----------- ------------ ------------ ----------
NET ASSETS:
Beginning of period................. 109,003,456 56,604,954 27,934,739 63,215,176 16,338,182
------------ ----------- ------------ ------------ ----------
End of period........................ $122,647,129 $55,849,867 $26,757,618 $66,928,854 $20,942,262
------------ ----------- ------------ ------------ -----------
Undistributed net investment
income (loss)..................... $ 807,318 $ 6,035 $ 0 $ 987,934 $ 0
============ =========== =========== =========== ===========
<PAGE>
5/2/96+
to
6/30/96
International Emerging Global
Growth Equity Growth Value Bond
Series Series* Series Series Series*
-------- ------------- -------- ------ --------
OPERATIONS:
Net investment income (loss)........ $ (90,402) $ 1,721,608 $ 39,654 $ 83,182 $ 34,896
Net realized gain (loss)
on investments and
foreign currencies................ 3,916,585 1,510,023 1,001,747 1,303,033 (4,512)
Net unrealized appreciation of
investments and foreign currencies
during the period ................ 4,775,732 4,768,145 2,181,127 (238,614) 26,824
------------ ------------- ----------- ------------ -----------
Net increase (decrease) in net assets
resulting from operations......... 8,601,915 7,999,776 3,222,528 1,147,601 57,208
------------ ------------- ----------- ------------ -----------
DISTRIBUTION TO
SHAREHOLDERS FROM:
Net investment income............... (270,847) (2,695,399) (131,779) (182,035) (10,429)
Net realized gain from security
transactions...................... (4,585,060) (725,191) (1,171,368) (455,089) --
------------ ------------- ----------- ------------ -----------
(4,855,907) (3,420,590) (1,303,147) (637,124) (10,429)
------------ ------------- ----------- ------------ -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold........... 7,080,575 17,358,234 15,352,191 3,687,153 3,480,235
Net asset value of shares issued
upon reinvestment of dividends
from net investment income........ 270,847 2,695,399 131,779 182,035 10,429
Net asset value of shares issued
upon reinvestment of
distributions from net realized
gain from security transactions... 4,585,060 725,191 1,171,368 455,089 --
------------ ------------- ----------- ------------ -----------
11,936,482 20,778,824 16,655,338 4,324,277 3,490,664
Cost of shares repurchased.......... (5,619,499) (3,877,134) (6,281,148) (1,433,509) (2,786)
------------ ------------- ----------- ------------ -----------
Increase (decrease) in net assets
derived from capital share
transactions...................... 6,316,983 16,901,690 10,374,190 2,890,768 3,487,878
------------ ------------- ----------- ------------ -----------
NET INCREASE (DECREASE)
IN NET ASSETS..................... 10,062,991 21,480,876 12,293,571 3,401,245 3,534,657
------------ ------------- ----------- ------------ -----------
NET ASSETS:
Beginning of period................. 58,122,589 81,548,039 20,509,664 11,929,310 --
------------ ------------- ----------- ------------ -----------
End of period........................ $68,185,580 $103,028,915 $32,803,235 $15,330,555 $3,534,657
------------ ------------- ----------- ------------ -----------
Undistributed net investment
income (loss)..................... $ (94,579) $ 3,037,285 $ 34,616 $ 82,834 $ 14,997
=========== ============ =========== =========== ==========
</TABLE>
- ------------------
+Date of initial public offering.
*The International Equity Series and the Global Bond Series were the only Series
of the Fund which engaged in foreign currency transactions during the period
ended June 30, 1996. Undistributed net investment income for these Series
includes net realized gains on foreign currencies.
See accompanying notes
33
<PAGE>
Delaware Group Premium Fund, Inc.
Statements of Changes in Net Assets (Continued)
<TABLE>
<CAPTION>
Year Ended December 31, 1995
Equity/ High Capital Multiple Money
Income Yield Reserves Strategy Market
Series Series Series Series Series
-------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................... $ 2,891,895 $ 5,151,433 $ 1,758,878 $ 2,067,136 $ 1,019,964
Net realized gain (loss)
on investments and
foreign currencies....................... 8,991,108 (2,216,446) 135,624 3,430,187 --
Net unrealized appreciation
of investments and
foreign currencies during
the period .............................. 15,300,401 4,534,509 1,589,424 7,556,374 --
------------ ----------- ----------- ---------- -----------
Net increase in net assets
resulting from operations................ 27,183,404 7,469,496 3,483,926 13,053,697 1,019,964
------------ ----------- ----------- ---------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income...................... (2,866,310) (5,151,209) (1,758,878) (1,726,534) (1,019,964)
Net realized gain from
security transactions.................... (1,335,871) -- -- -- --
------------ ----------- ----------- ---------- -----------
(4,202,181) (5,151,209) (1,758,878) (1,726,534) (1,019,964)
------------ ----------- ----------- ---------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ................. 20,442,574 14,846,158 3,683,164 8,013,382 33,835,327
Net asset value of shares issued upon
reinvestment of dividends from net
investment income........................ 2,866,310 5,150,169 1,759,031 1,726,534 1,019,729
Net asset value of shares issued upon
reinvestment of distributions from net
realized gain from security transactions. 1,335,871 -- -- -- --
------------ ----------- ----------- ---------- -----------
24,644,755 19,996,327 5,442,195 9,739,916 34,855,056
Cost of shares repurchased................ (11,347,305) (9,395,328) (5,207,601) (5,582,634) (38,641,425)
------------ ----------- ----------- ---------- -----------
Increase (decrease) in net assets derived
from capital share transactions.......... 13,297,450 10,600,999 234,594 4,157,282 (3,786,369)
------------ ----------- ----------- ---------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS............................... 36,278,673 12,919,286 1,959,642 15,484,445 (3,786,369)
NET ASSETS:
Beginning of period........................ 72,724,783 43,685,668 25,975,097 47,730,731 20,124,551
------------ ----------- ----------- ---------- -----------
End of period.............................. $109,003,456 $56,604,954 $27,934,739 $63,215,176 $16,338,182
============ =========== =========== =========== ===========
Undistributed net investment income........ $ 852,092 -- -- $ 1,545,561 --
============ =========== =========== =========== ===========
<PAGE>
International Emerging
Growth Equity Growth Value
Series Series* Series Series*
-------- ------------- -------- --------
OPERATIONS:
Net investment income...................... $ 290,316 $ 2,117,429 $ 128,617 $ 187,274
Net realized gain (loss)
on investments and
foreign currencies....................... 4,648,144 1,204,033 1,200,003 450,233
Net unrealized appreciation
of investments and
foreign currencies during
the period .............................. 7,352,687 5,972,496 2,501,445 1,319,759
----------- ----------- ---------- ----------
Net increase in net assets
resulting from operations................ 12,291,147 9,293,958 3,830,065 1,957,266
----------- ----------- ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
FROM:
Net investment income...................... (249,375) (1,199,737) (57,059) (94,859)
Net realized gain from
security transactions.................... -- (449,901) -- (44,268)
----------- ----------- ---------- ----------
(249,375) (1,649,638) (57,059) (139,127)
----------- ----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ................. 13,930,551 22,650,087 13,704,620 4,512,315
Net asset value of shares issued upon
reinvestment of dividends from net
investment income........................ 249,375 1,199,737 57,059 94,859
Net asset value of shares issued upon
reinvestment of distributions from net
realized gain from security transactions. -- 449,901 -- 44,268
----------- ----------- ---------- ----------
14,179,926 24,299,725 13,761,679 4,651,442
Cost of shares repurchased................ (7,443,317) (8,045,244) (4,111,780) (831,456)
----------- ----------- ---------- ----------
Increase (decrease) in net assets derived
from capital share transactions.......... 6,736,609 16,254,481 9,649,899 3,819,986
----------- ----------- ---------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS............................... 18,778,381 23,898,801 13,422,905 5,638,125
NET ASSETS:
Beginning of period........................ 39,344,208 57,649,238 7,086,759 6,291,185
----------- ----------- ---------- ----------
End of period.............................. $58,122,589 $81,548,039 $20,509,664 $11,929,310
=========== =========== =========== ===========
Undistributed net investment income....... $ 266,670 $ 2,405,240 $ 126,741 $ 181,687
=========== =========== =========== ===========
</TABLE>
- ---------------------
*The International Equity Series and the Value Series were the only Series of
the Fund which engaged in foreign currency transactions during the year ended
December 31, 1995.
See accompanying notes
34
<PAGE>
Delaware Group Premium Fund, Inc.
Notes to Financial Statements
June 30, 1996
(Unaudited)
Delaware Group Premium Fund, Inc. (the "Fund"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Fund is organized as a Maryland corporation and offers
ten series: the Equity/Income Series, the High Yield Series, the Capital
Reserves Series, the Multiple Strategy Series, the Money Market Series, the
Growth Series, the International Equity Series, the Emerging Growth Series,
the Value Series and the Global Bond Series (the "Series"). The shares of the
Fund are sold only to separate accounts of life insurance companies.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:
Security Valuation--Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm on the valuation date. Securities not traded or
securities not listed on an exchange are valued at the mean of the last quoted
bid and asked prices. Long-term debt securities are valued by an independent
pricing service and are believed to reflect the fair value of such securities.
Securities listed on a foreign exchange are valued at the last quoted sale price
before the time when the Fund is valued. Money market instruments having less
than 60 days to maturity are valued at amortized cost.
Federal Income Taxes--Each Series intends to continue to qualify as a
regulated investment company and make the requisite distributions to
shareholders. Accordingly, no provision for federal income taxes is required
in the financial statements.
Repurchase Agreements--Each Series may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements
secured by obligations of the U.S. government. The respective collateral is
held by each Series' custodian bank until the maturity of the respective
repurchase agreements. Each repurchase agreement is at least 100%
collateralized. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization of the collateral may be subject
to legal proceedings.
Foreign Currencies--The value of all assets and liabilities denominated in
foreign currencies are translated into the U.S. dollars at the exchange rate
of such currencies against the U.S. dollar as of 3:00 pm EST. Forward foreign
currency contracts are valued at the mean between the bid and asked prices of
the contracts. Interpolated values are derived when the settlement date of
the contract is on interim date for which quotations are not available.
Other--Expenses common to all funds within the Delaware Group of Funds are
allocated amongst the Funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Dividend income
is recorded on the ex-dividend date and interest income is recorded on an
accrual basis. Original issue discounts are accreted to interest income over the
lives of the respective securities. The High Yield Series, the Capital Reserves
Series and the Money Market Series declare dividends from net investment income
daily and pay such dividends monthly and declare dividends on net realized
gains, if any, annually. The Equity/Income Series and the Multiple Strategy
Series declare dividends from net investment income quarterly and net realized
gains, if any, annually. The Growth Series, the International Equity Series, the
Emerging Growth Series and the Value Series declare dividends from net
investment income and net realized gains, if any, annually. The Global Bond
Series declares dividends from net investment income monthly and net realized
gains, if any, annually.
Certain fund expenses are paid directly by brokers. The amount of these
expenses is less than 0.01% of each Series' average net assets.
35
<PAGE>
Notes to Financial Statements (Continued)
2. Investment Management Fees and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. ("DMC"), the investment manager of
each Series except the International Equity Series and the Global Bond Series
and Delaware International Advisers Ltd. ("DIAL"), the investment manager of
the International Equity Series and the Global Bond Series, a fee which is
calculated on the average daily net assets of each Series, at an annual rate
less fees paid to the unaffiliated directors for the Equity/Income Series,
the High Yield Series, the Capital Reserves Series, the Multiple Strategy
Series, the Money Market Series, the Growth Series and the International
Equity Series. The management fee for the Emerging Growth Series, the Value
Series and the Global Bond Series are calculated daily on the net assets of
each Series at an annual rate without consideration of amounts paid to
unaffiliated directors. The management fee rates are as follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple Money International Emerging Global
Income Yield Reserves Strategy Market Growth Equity Growth Value Bond
Series Series Series Series Series Series Series Series Series Series
------- ------- -------- -------- ------ ------ ------------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees as a
percentage of average
daily net assets
(per annum)............. 0.60% 0.60% 0.60% 0.60% 0.50% 0.75% 0.75% 0.75% 0.75% 0.75%
</TABLE>
DMC and DIAL have elected voluntarily to waive their fees and reimburse each
Series to the extent that annual operating expenses, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, exceed 0.80% of
average daily net assets for each Series through December 31, 1996. Total
expenses absorbed by DMC and DIAL for the period ended June 30, 1996 are as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total expenses absorbed
by DMC or DIAL......... -- -- -- -- -- $10,949 $47,901 $19,654 $13,185 $3,214
</TABLE>
Certain officers of DMC are officers, directors and/or employees of the Fund.
These officers, directors and employees are paid no compensation by the Fund.
The Fund has engaged Delaware Service Company, Inc. ("DSC"), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Fund. For the
year ended June 30, 1996, the amounts expensed for each Series are as
follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple Money International Emerging Global
Income Yield Reserves Strategy Market Growth Equity Growth Value Bond
Series Series Series Series Series Series Series Series Series Series
------- ------- -------- -------- ------ ------ ------------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend disbursing and
transfer agent fees
and expenses............ $5,886 $1,912 $1,442 $3,095 $950 $3,864 $4,865 $1,190 $770 $60
</TABLE>
On June 30, 1996, the Fund had payables to affiliates as follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple Money International Emerging Global
Income Yield Reserves Strategy Market Growth Equity Growth Value Bond
Series Series Series Series Series Series Series Series Series Series
------- ------- -------- -------- ------ ------ ------------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investment management fee
payable to DMC or DIAL... $36,137 $12,465 $13,234 $32,324 $8,806 $82,007 $106,733 $13,321 $18,404 $764
Dividend disbursing and
transfer agent fees and
expenses payable to DSC.. 1,159 543 455 700 429 1,306 1,931 726 500 52
Other expenses payable to
DMC and its affiliates... -- -- -- -- -- 122 212 -- -- 170
</TABLE>
36
<PAGE>
Notes to Financial Statements (Continued)
3. Investments
Investment securities based on cost for federal income tax purposes at June
30, 1996 are as follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple Money
Income Yield Reserves Strategy Market
Series Series Series Series Series
------- ------- -------- -------- ------
<S> <C> <C> <C> <C> <C>
Costs of
investments.. $110,677,979 $56,324,867 $26,141,868 $58,475,366 $21,017,224
Aggregate
unrealized
appreciation. 12,929,175 1,054,687 148,213 7,248,200 --
Aggregate
unrealized
depreciation. (958,530) (530,572) (296,298) (515,950) --
------------ ---------- ---------- ---------- ---------- f
Market value of
investments.. $122,648,624 $56,848,982 $25,993,783 $65,207,616 $21,017,224
============ =========== =========== =========== ===========
Net realized
gain (loss)
for federal
income tax
purposes.... $ 9,210,808 $ 375,825 $ (210,884) $ 3,540,669 --
============ ============ =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
International Emerging Global
Growth Equity Growth Value Bond
Series Series Series Series Series
------ ------------ -------- ------ ------
<S> <C> <C> <C> <C> <C>
Costs of
investments.. $53,845,489 $ 91,285,625 $27,990,229 $14,328,216 $3,518,902
Aggregate
unrealized
appreciation. 16,932,589 12,565,145 5,784,984 1,431,496 38,997
Aggregate
unrealized
depreciation. (2,457,631) (2,664,292) (1,171,087) (451,948) (11,082)
----------- ----------- ---------- ---------- ---------- f
Market value of
investments.. $68,320,447 $101,186,478 $32,604,126 $15,307,764 $3,546,817
=========== ============ =========== =========== ==========
Net realized
gain (loss)
for federal
income tax
purposes.... $ 3,882,825 $ (95,813) $ 1,082,969 $ 1,303,033 $ 4,958
=========== ============ =========== =========== ==========
</TABLE>
For federal income tax purposes, the Fund had accumulated capital losses at
December 31, 1995 of $3,781,875 for the High Yield Series and $1,319,166 for
the Capital Reserves Series, which may be carried forward and applied against
future capital gains. The capital loss carryover for the High Yield Series
expires as follows: 1998--$96,435, 2001--$18,884, 2002--$1,450,110 and 2003--
$2,216,446. The capital loss carryover for the Capital Reserves Series expires
in 2002.
During the period ended June 30, 1996, the Fund made purchases and sales of
investment securities, other than direct U.S. government securities and
temporary cash investments as follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple International Emerging Global
Income Yield Reserves Strategy Growth Equity Growth Value Bond
Series Series Series Series Series Series Series Series Series
------- ------- -------- -------- ------ ------------ -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Purchases.....$108,396,827 $29,356,876 $10,988,954 $30,316,846 $25,429,374 $16,065,787 $22,305,066 $8,949,833 $3,678,025
Sales......... 57,676,413 29,211,324 11,683,547 27,742,954 27,973,049 3,870,260 11,579,368 6,807,631 369,122
</TABLE>
37
<PAGE>
Notes to Financial Statements (Continued)
4. Capital Stock
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
Equity/ High Capital Multiple Money
Income Yield Reserves Strategy Market
Series Series Series Series Series
--------------------- ------------------ ------------------- ------------------ -------------------
Six Months Year Six Months Year Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold........ 1,012,579 1,543,303 627,608 1,698,338 221,205 378,909 229,220 578,964 2,283,372 3,383,533
Shares issued upon
reinvestment of
dividends from net
investment income
and distributions
from net realized
gain from security
transactions....... 775,633 345,969 297,384 583,026 89,865 181,276 303,446 135,116 45,111 101,973
--------- --------- ------- --------- ------- ------- ------- ------- --------- ----------
1,788,212 1,889,272 924,992 2,281,364 311,070 560,185 532,666 714,080 2,328,483 3,485,506
Shares repurchased.. (610,273) (877,396) (926,545) (1,066,859) (335,489) (541,075) (228,064) (399,695) (1,868,075) (3,864,143)
--------- --------- ------- --------- ------- ------- ------- ------- --------- ---------
Net increase
(decrease).......1,177,939 1,011,876 (1,553) 1,214,505 (24,419) 19,110 304,602 314,385 460,408 (378,637)
========= ========= ======= ========= ======= ======= ======= ======= ========= =========
</TABLE>
<TABLE>
<CAPTION>
International Emerging
Growth Equity Growth Value Global Bond
Series Series Series Series Series
--------------------- ------------------ ------------------- ------------------ ------------
Six Months Year Six Months Year Six Months Year Six Months Year 5/2/96*
Ended Ended Ended Ended Ended Ended Ended Ended to
6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95 6/30/96 12/31/95 6/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold........ 461,918 1,057,838 1,290,305 1,858,798 1,042,889 1,127,143 294,645 407,375 347,895
Shares issued upon
reinvestment of
dividends from
net investment
income and
distributions
from net realized
gain from security
transactions...... 347,595 21,169 265,574 146,765 101,808 5,605 54,502 13,885 1,029
------- --------- --------- --------- --------- --------- ------- ------- -------
809,513 1,079,007 1,555,879 2,005,563 1,144,697 1,132,748 349,147 421,260 348,924
Shares repurchased..(373,571) (585,294) (288,644) (654,821) (442,549) (367,575) (114,364) (76,146) (278)
------- --------- --------- --------- --------- --------- ------- ------- -------
Net increase ...... 435,942 493,713 1,267,235 1,350,742 702,148 765,173 234,783 345,114 348,646
======= ========= ========= ========= ========= ========= ======= ======= =======
</TABLE>
- ----------
*Date of initial public offering
38
<PAGE>
Notes to Financial Statements (Continued)
5. Foreign Exchange Contracts
The following currency forward contracts were outstanding at June 30, 1996:
International Equity Series
- -------------------------------------------------------------------------------
Contract In Exchange Settlement Unrealized
to Deliver for Date Gain/(Loss)
---------- ----------- ---------- -----------
117,956,880 Belgian Francs $3,771,000 7/31/96 $ 650
5,739,462 German Marks 3,771,000 7/31/96 (9,285)
6,417,488 The Netherlands Guilders 3,771,000 7/31/96 (63)
19,410,845 French Francs 3,771,000 7/31/96 (4,836)
992,956,960 Japanese Yen 9,428,000 7/31/96 324,720
--------
$311,186
========
Global Bond Series
- -------------------------------------------------------------------------------
Contract In Exchange Settlement Unrealized
to Deliver for Date Loss
---------- ----------- ---------- -----------
805,297 Austrian Schillings $75,100 8/30/96 $(405)
2,355,887 Belgian Francs 75,100 8/30/96 (459)
127,783 The Netherlands Guilders 75,100 8/30/96 (157)
114,490 German Marks 75,100 8/30/96 (454)
------
$(1,475)
=======
6. Concentration of Credit Risk
The High Yield Series may invest in high-yield fixed income securities which
carry ratings of BB or lower by S&P and/or Ba or lower by Moody's. Investment
in these higher yielding securities may be accompanied by a greater degree of
credit risk than higher rated securities. Additionally, lower rated
securities may be more susceptible to adverse economic and competitive
industry conditions than investment grade securities.
The Capital Reserves Series and the Multiple Strategy Series may invest in
securities whose value is derived from an underlying pool of mortgages or
consumer loans. Prepayment of these loans may shorten the stated maturity of
the respective obligation and may result in a loss of premium, if any has
been paid.
Each Series may invest up to 10% of its total assets in illiquid securities
which include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The
relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities, if
any, have been denoted in the appropriate Statement of Net Assets.
39
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Equity/Income Series High Yield Series
----------------------------------------------------------- ------------------------------------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91 6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of
period.......... $14.8300 $11.4800 $12.5100 $11.2200 $10.7500 $9.2400 $8.9400 $8.5400 $9.7700 $9.2900 $9.1300 $7.4800
Income from
investment
operations:
Net investment
income......... 0.1987 0.4155 0.4121 0.4341 0.4155 0.4502 0.4227 0.8715 0.9621 0.9758 1.0224 1.0316
Net realized
and unrealized
gain (loss)
from security
transactions... 0.7763 3.5745 (0.4221) 1.2659 0.5045 1.5498 (0.1210) 0.4000 (1.2300) 0.4800 0.1600 1.6500
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from
investment
operations..... 0.9750 3.9900 (0.0100) 1.7000 0.9200 2.0000 0.3017 1.2715 (0.2679) 1.4558 1.1824 2.6816
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from
net investment
income.......... (0.2200) (0.4300) (0.4200) (0.4100) (0.4500) (0.4900) (0.4217) (0.8715) (0.9621) (0.9758) (1.0224) (1.0316)
Distributions
from net
realized gain
from security
transactions.... (1.2050) (0.2100) (0.6000) none none none none none none none none none
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Total
distributions.. (1.4250) (0.6400) (1.0200) (0.4100) (0.4500) (0.4900) (0.4217) (0.8715) (0.9621) (0.9758) (1.0224) (1.0316)
-------- -------- -------- ------- ------- ------- ------- ------- ------- ------- ------- ------
Net asset value,
end of period.... $14.3800 $14.8300 $11.4800 $12.5100 $11.2200 $10.7500 $8.8200 $8.9400 $8.5400 $9.7700 $9.2900 $9.1300
======== ======== ======== ======== ======== ======== ======= ======= ======= ======= ======= =======
Total return...... 7.15% 36.12% (0.20%) 15.45% 8.82% 22.32% 3.42% 15.50% (2.87%) 16.36% 13.44% 37.53%
Ratios/supplemental
data:
Net assets, end
of period (000's
omitted)........ $122,647 $109,003 $72,725 $65,519 $38,278 38,840 $55,850 $56,605 $43,686 $34,915 $11,311 $5,918
Ratio of expenses
to average net
assets........... 0.67% 0.69% 0.71% 0.75% 0.79% 0.85% 0.69% 0.69% 0.72% 0.80% 0.80% 0.80%
Ratio of expenses
to average net
assets prior
to expense
limitation....... 0.67% 0.69% 0.71% 0.76% 0.81% 0.85% 0.69% 0.69% 0.72% 0.82% 0.94% 1.06%
Ratio of net
investment income
to average net
assets........... 2.86% 3.24% 3.63% 3.95% 3.86% 4.46% 9.52% 9.87% 10.56% 10.05% 10.93% 12.05%
Ratio of net
investment income
to average net
assets prior to
expense limitation 2.86% 3.24% 3.63% 3.94% 3.84% 4.46% 9.52% 9.87% 10.56% 10.03% 10.79% 11.80%
Portfolio turnover
rate............. 102% 85% 91% 67% 72% 79% 118% 74% 47% 43% 73% 70%
Average commission
rate paid........ $0.0600 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- -----------
1 Ratios have been annualized and total return has not been annualized.
40
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Capital Reserves Series
-----------------------------------------------------------------------------------
Six Months
Ended Year Ended
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $9.9300 $9.3000 $10.2600 $10.2000 $10.2300 $10.0400
Income from investment operations:
Net investment income.................... 0.3092 0.6431 0.6355 0.6357 0.6474 0.6687
Net realized and unrealized gain (loss)
from security transactions............. (0.3300) 0.6300 (0.9050) 0.1450 0.0600 0.1900
------- ------- -------- -------- -------- -------
Total from investment operations......... (0.0208) 1.2731 (0.2695) 0.7807 0.7074 0.8587
------- ------- -------- -------- -------- -------
Less distributions:
Dividends from net investment income .... (0.3092) (0.6431) (0.6355) (0.6357) (0.6474) (0.6687)
Distributions from net realized gain
from security transactions............. none none (0.0550) (0.0850) (0.0900) none
------- ------- -------- -------- -------- -------
Total distributions...................... (0.3092) (0.6431) (0.6905) (0.7207) (0.7374) (0.6687)
------- ------- -------- -------- -------- -------
Net asset value, end of period ............ $9.6000 $9.9300 $ 9.3000 $10.2600 $10.2000 $10.2300
======= ======= ======== ======== ======== ========
Total return............................... (0.21%) 14.08% (2.68%) 7.85% 7.20% 8.85%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $26,758 $27,935 $25,975 $24,173 $9,790 $4,392
Ratio of expenses to average net assets.. 0.72% 0.71% 0.74% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation............ 0.72% 0.71% 0.74% 0.85% 0.98% 1.15%
Ratio of net investment income to average
net assets............................. 6.38% 6.64% 6.57% 6.20% 6.39% 6.62%
Ratio of net investment income to average
net assets prior to expense limitation. 6.38% 6.64% 6.57% 6.15% 6.21% 6.27%
Portfolio turnover rate.................. 129% 145% 219% 198% 241% 95%
Average commission rate paid ............ N/A N/A N/A N/A N/A N/A
<PAGE>
Multiple Strategy Series
----------------------------------------------------------------------------------
Six Months
Ended Year Ended
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
Net asset value, beginning of period ...... $15.5000 $12.6800 $13.3300 $13.5500 $12.9800 $10.8400
Income from investment operations:
Net investment income.................... 0.2665 0.5088 0.4373 0.3280 0.4572 1.0824
Net realized and unrealized gain (loss)
from security transactions............. 0.5785 2.7612 (0.4473) 0.6920 1.2328 1.6676
-------- ------- -------- -------- ------- -------
Total from investment operations......... 0.8450 3.2700 (0.0100) 1.0200 1.6900 2.7500
-------- ------- -------- -------- ------- -------
Less distributions:
Dividends from net investment income .... (0.4200) (0.4500) (0.3400) (0.4600) (1.0600) (0.3500)
Distributions from net realized gain
from security transactions............. (0.6550) none (0.3000) (0.7800) (0.0600) (0.2600)
-------- ------- -------- -------- ------- -------
Total distributions...................... (1.0750) (0.4500) (0.6400) (1.2400) (1.1200) (0.6100)
-------- ------- -------- -------- ------- -------
Net asset value, end of period ............ $15.2700 $15.5000 $12.6800 $13.3300 $13.5500 $12.9800
======== ======== ======== ======== ======== ========
Total return............................... 5.81% 26.58% (0.15%) 8.18% 13.85% 26.58%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $66,929 $63,215 $47,731 $37,235 $15,150 $12,138
Ratio of expenses to average net assets.. 0.66% 0.69% 0.70% 0.80% 0.86% 1.03%
Ratio of expenses to average net assets
prior to expense limitation............ 0.66% 0.69% 0.70% 0.89% 0.94% 1.03%
Ratio of net investment income to average
net assets............................. 3.65% 3.75% 3.71% 3.33% 3.60% 11.35%
Ratio of net investment income to average
net assets prior to expense limitation. 3.65% 3.75% 3.71% 3.24% 3.52% 11.35%
Portfolio turnover rate.................. 118% 106% 140% 162% 202% 1,010%
Average commission rate paid ............ $0.0599 N/A N/A N/A N/A N/A
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
41
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Money Market Series
-----------------------------------------------------------------------------------
Six Months
Ended Year Ended
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $10.0000 $10.0000 $10.0000 $10.0000 $10.0000 $10.0000
Income from investment operations:
Net investment income.................... 0.2393 0.5349 0.3614 0.2451 0.3202 0.5443
Net realized and unrealized gain (loss)
from security transactions............. none none none none none none
-------- -------- -------- -------- -------- --------
Total from investment operations......... 0.2393 0.5349 0.3614 0.2451 0.3202 0.5443
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income..... (0.2393) (0.5349) (0.3614) (0.2451) (0.3202) (0.5443)
Distributions from net realized gain
from security transactions ............ none none none none none none
-------- -------- -------- -------- -------- --------
Total distributions...................... (0.2393) (0.5349) (0.3614) (0.2451) (0.3202) (0.5443)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............ $10.0000 $10.0000 $10.0000 $10.0000 $10.0000 $10.0000
======== ======== ======== ======== ======== ========
Total return............................... 2.42% 5.48% 3.68% 2.48% 3.25% 5.58%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $20,942 $16,338 $20,125 $10,245 $7,774 $7,768
Ratio of expenses to average net assets.. 0.60% 0.62% 0.66% 0.80% 0.80% 0.80%
Ratio of expenses to average net assets
prior to expense limitation ........... 0.60% 0.62% 0.66% 0.86% 0.85% 0.99%
Ratio of net investment income to average
net assets............................. 4.81% 5.35% 3.79% 2.44% 3.21% 5.45%
Ratio of net investment income to average
net assets prior to expense limitation. 4.81% 5.35% 3.79% 2.38% 3.16% 5.26%
Portfolio turnover rate.................. -- -- -- -- -- --
Average commission rate paid ............ N/A N/A N/A N/A N/A N/A
<PAGE>
Growth Series
----------------------------------------------------------------------------------
Six Months 7/12/91(2)
Ended Year Ended to
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
Net asset value, beginning of period ...... $15.1300 $11.7500 $12.2400 $11.1200 $11.0300 $10.0000
Income from investment operations:
Net investment income.................... (0.0318) 0.0720 0.0694 0.0558 0.0225 0.0098
Net realized and unrealized gain (loss)
from security transactions............. 2.0968 3.3780 (0.4994) 1.2142 0.1975 1.0202
-------- -------- -------- -------- -------- --------
Total from investment operations......... 2.0650 3.4500 (0.4300) 1.2700 0.2200 1.0300
-------- -------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income..... (0.0700) (0.0700) (0.0600) (0.0200) (0.0100) none
Distributions from net realized gain
from security transactions ............ (1.1850) none none (0.1300) (0.1200) none
-------- -------- -------- -------- -------- --------
Total distributions...................... (1.2550) (0.0700) (0.0600) (0.1500) (0.1300) none
-------- -------- -------- -------- -------- --------
Net asset value, end of period ............ $15.9400 $15.1300 $11.7500 $12.2400 $11.1200 $11.0300
======== ======== ======== ======== ======== ========
Total return............................... 14.82% 29.53% (3.54%) 11.56% 1.99% 21.60%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $68,186 $58,123 $39,344 $33,180 $14,251 $6,950
Ratio of expenses to average net assets.. 0.80% 0.80% 0.80% 0.80% 0.98% 1.94%
Ratio of expenses to average net assets
prior to expense limitation ........... 0.83% 0.85% 0.88% 1.00% 1.25% 1.94%
Ratio of net investment income to average
net assets............................. (0.29%) 0.61% 0.64% 0.67% 0.28% 0.33%
Ratio of net investment income to average
net assets prior to expense limitation. (0.31%) 0.56% 0.56% 0.47% 0.01% 0.33%
Portfolio turnover rate.................. 85% 73% 43% 57% 52% 40%
Average commission rate paid ............ $0.0598 N/A N/A N/A N/A N/A
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios and total return have been
annualized.
42
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
International Equity Series
--------------------------------------------------------------------------
Six Months 10/29/92(2)
Ended Year Ended to
6/30/96(1) 12/31/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $13.1200 $11.8400 $11.6200 $10.0300 $10.0000
Income from investment operations:
Net investment income.................... 0.4390 0.4194 0.2198 0.0523 0.0153
Net realized and unrealized gain (loss)
from security transactions............. 0.7340 1.1906 0.0802 1.5477 0.0147
-------- -------- -------- -------- --------
Total from investment operations......... 1.1730 1.6100 0.3000 1.6000 0.0300
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income..... (0.4200) (0.2400) (0.0700) (0.0100) none
Distributions from net realized gain
from security transactions............. (0.1130) (0.0900) (0.0100) none none
-------- -------- -------- -------- --------
Total distributions...................... (0.5330) (0.3300) (0.0800) (0.0100) none
-------- -------- -------- -------- --------
Net asset value, end of period............. $13.7600 $13.1200 $11.8400 $11.6200 $10.0300
======== ======== ======== ======== ========
Total return................................ 9.30% 13.98% 2.57% 15.97% 1.73%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $103,029 $81,548 $57,649 $16,664 $177
Ratio of expenses to average net assets.. 0.80% 0.80% 0.80% 0.80% (3)
Ratio of expenses to average net assets
prior to expense limitation............ 0.89% 0.89% 1.01% 1.85% (3)
Ratio of net investment income to average
net assets............................. 7.17% 3.69% 2.63% 1.85% (3)
Ratio of net investment income to average
net assets prior to expense limitation. 7.06% 3.60% 2.42% 0.80% (3)
Portfolio turnover rate.................. 9% 19% 13% 9% (3)
Average commission rate paid............. $0.0163 N/A N/A N/A N/A
<PAGE>
Emerging Growth Series
----------------------------------------------------------
Six Months 12/27/93(2)
Ended Year Ended to
6/30/96(1) 12/31/95 12/31/94 12/31/93
Net asset value, beginning of period........ $14.0200 $10.1600 $10.2000 $10.0000
Income from investment operations:
Net investment income.................... 0.0200 0.0976 0.0791 none
Net realized and unrealized gain (loss)
from security transactions............. 2.0000 3.8524 (0.1191) 0.2000
-------- -------- -------- --------
Total from investment operations......... 2.0200 3.9500 (0.0400) 0.2000
-------- -------- -------- --------
Less distributions:
Dividends from net investment income..... (0.0900) (0.0900) none none
Distributions from net realized gain
from security transactions............. (0.8000) none none none
-------- -------- -------- --------
Total distributions...................... (0.8900) (0.0900) none none
-------- -------- -------- --------
Net asset value, end of period............. $15.1500 $14.0200 $10.1600 $10.2000
======== ======== ======== ========
Total return................................ 15.57% 39.21% (0.39%) 2.00%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $32,803 $20,510 $7,087 $204
Ratio of expenses to average net assets.. 0.80% 0.80% 0.80% (3)
Ratio of expenses to average net assets
prior to expense limitation............ 0.96% 0.96% 1.47% (3)
Ratio of net investment income to average
net assets............................. 0.33% 1.03% 1.63% (3)
Ratio of net investment income to average
net assets prior to expense limitation. 0.17% 0.87% 0.96% (3)
Portfolio turnover rate.................. 115% 76% 59% (3)
Average commission rate paid............. $0.0522 N/A N/A N/A
</TABLE>
- ----------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; total return has been annualized for the
International Equity Series and total return has not been annualized for
the Emerging Growth Series.
(3) The ratio of expenses and net investment income to average net assets and
portfolio turnover have been omitted as management believes that such
ratios are not meaningful due to the limited net assets of this Series.
43
<PAGE>
Notes to Financial Statements (Continued)
7. Financial Highlights (Continued)
Selected data for each share of the Series outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Value Series Global Bond Series
--------------------------------------------------------- ------------------
Six Months 12/27/93(1) 5/2/96(2)
Ended Year Ended to to
6/30/96(4) 12/31/95 12/31/94 12/31/93 6/30/96
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $12.4700 $10.2900 $10.2100 $10.0000 $10.0000
Income from investment operations:
Net investment income.................... 0.0596 0.1918 0.1481 none 0.0730
Net realized and unrealized gain (loss)
from security transactions............. 0.9704 2.2082 (0.0681) 0.2100 0.0970
-------- -------- -------- -------- --------
Total from investment operations ........ 1.0300 2.4000 0.0800 0.2100 0.1700
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income..... (0.1800) (0.1500) none none (0.0300)
Distributions from net realized gain
from security transactions............. (0.4500) (0.0700) none none --
-------- -------- -------- -------- --------
Total distributions...................... (0.6300) (0.2200) none none (0.0300)
-------- -------- -------- -------- --------
Net asset value, end of period ............ $12.8700 $12.4700 $10.2900 $10.2100 $10.1400
======== ======== ======== ======== ========
Total return............................... 8.77% 23.85% 0.78% 2.10% 1.70%
Ratios/supplemental data:
Net assets, end of period (000's omitted) $15,331 $11,929 $6,291 $210 $3,535
Ratio of expenses to average net assets.. 0.80% 0.80% 0.80% (3) 0.80%
Ratio of expenses to average net assets
prior to expense limitation............ 0.99% 0.96% 1.41% (3) 1.41%
Ratio of net investment income to average
net assets............................. 1.22% 2.13% 2.62% (3) 4.80%
Ratio of net investment income to average
net assets prior to expense limitation. 1.03% 1.97% 2.01% (3) 4.19%
Portfolio turnover rate.................. 108% 71% 26% (3) 71%
Average commission rate paid............. $0.0561 N/A N/A N/A N/A
</TABLE>
- ----------------------
(1) Date of initial public offering; total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) The ratio of expenses and net investment income to average net assets have
been omitted as management believes that such ratios are not meaningful due
to the limited net assets of this Series.
(4) Ratios have been annualized and total return has not been annualized.
44
<PAGE>
[LOGO] ------------------
The AIG Life Companies (U.S.) FIRST CLASS MAIL
One Alico Plaza U.S. POSTAGE
P.O. Box 667 PAID
Wilmington, DE 19899 Berwyn, PA
Permit No. 100
------------------
