<TABLE>
USLICO Series Fund
Statement of Assets and Liabilities
June 30, 1997
(Unaudited)
Common Money Asset Total
Stock Market Bond Allocation Portfolios
Portfolio Portfolio Portfolio Portfolio Combined
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Assets
Cash and cash equivalents $ 892,449 $ 10,795 $ 416,916 $ 797,875 $ 2,118,035
Common stock, at fair value (cost
$20,096,451 and $6,472,886, respectively) 25,086,669 - - 8,054,413 33,141,082
Bonds, at fair value (cost
$2,355,558 and $6,437,541, respectively) - - 2,379,786 6,485,814 8,865,600
Commercial paper, at amortized
cost which approximates fair value - 5,836,586 - - 5,836,586
Dividends receivable 59,992 - - 19,196 79,188
Interest receivable 4,333 190 41,583 111,800 157,906
Securities not settled , net 293,020 - - 60,597 353,617
------------ ------------ ------------ ------------ ------------
Total assets 26,336,463 5,847,571 2,838,285 15,529,695 50,552,014
Liabilities
Accrued expenses 204,394 72,827 36,555 108,705 422,481
------------ ------------ ------------ ------------ ------------
Total liabilities 204,394 72,827 36,555 108,705 422,481
------------ ------------ ------------ ------------ ------------
Net assets $ 26,132,069 $ 5,774,744 $ 2,801,730 $ 15,420,990 $ 50,129,533
============ ============ ============ ============ ============
Net asset value per share $ 14.90 $ 1.00 $ 9.95 $ 12.57
============ ============ ============ ============
Shares outstanding 1,753,974 5,774,744 281,562 1,226,993
============ ============ ============ ============
Net assets consist of:
Capital stock ($.001 par value) $ 1,754 $ 5,775 $ 282 $ 1,227
Additional paid-in capital 19,647,215 5,768,969 2,775,008 13,272,474
Accumulated undistributed
net investment income 18,741 - 2,604 10,231
Accumulated undistributed net
realized gains (losses) from
investment transactions 1,474,141 - (392) 507,258
Net unrealized appreciation of investments 4,990,218 - 24,228 1,629,800
------------ ------------ ------------ ------------
Net assets $ 26,132,069 $ 5,774,744 $ 2,801,730 $ 15,420,990
============ ============ ============ ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund-Common Stock Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Common Stock
Fair Fair
Shares Value Shares Value
--------- ----------- --------- -----------
<S> <C> <C> <S> <C> <C>
Aerospace & Defense - 1.52% Industrial - 21.53%
- ------------------------------- --------------------
United Technologies Corp. 4,700 $ 396,563 Aluminum Co. of America 5,100 $ 387,600
----------- Black & Decker Corp. 11,600 430,650
396,563 Case Corp. 4,100 271,113
----------- Cooper Industries Inc. 14,100 716,456
Chemicals - 1.34% Deere & Co. 8,500 468,031
- ------------------- Harnischfeger Industries , Inc. 22,100 903,338
W. R. Grace & Co. 6,300 349,650 Hertz Corp. 9,000 303,750
----------- James River Corp. of Virginia 8,000 297,500
349,650 Johnson Controls, Inc. 5,900 245,219
----------- LTV Corp. 10,100 147,081
Computers - 6.27% Masco Corp. 3,500 145,250
- ------------------- Parker-Hannifin Corp. 11,800 697,675
Avnet, Inc. 8,200 489,950 Reynolds Metals Co. 6,900 487,744
Electronic Data Systems Corp. 6,400 273,200 Union Camp Corp. 2,400 123,450
International Business Machines 9,600 876,000 -----------
----------- 5,624,857
1,639,150 -----------
----------- Office Business Equipment - 3.82%
Diversified - 3.57% ------------------------------------
- -------------------- Pitney Bowes, Inc. 6,200 453,763
Canadian Pacific, Ltd. 14,200 407,363 Xerox Corp. 6,900 544,237
Fluor Corp. 4,900 267,356 -----------
Loews Corp. 2,600 258,212 998,000
----------- -----------
932,931 Realty - 3.52%
----------- ---------------
Drugs & Health Care - 1.49% Equity Residential Properties Trust 8,300 386,469
- ----------------------------- Simon Debartolo Group, Inc. 17,100 532,238
Meditrust Corp. 10,100 388,850 -----------
----------- 918,707
388,850 -----------
----------- Retail Trade - 2.16%
Energy - 11.43% ---------------------
- ----------------- American Stores Co. 11,400 565,725
Amoco Corp. 6,700 587,925 -----------
Mobil Corp. 7,700 534,187 565,725
Repsol S.A. ADS 11,500 490,188 -----------
Texaco, Inc. 3,500 379,750 Telecommunications - 6.61%
TransCanada Pipelines Ltd. 22,800 454,575 -----------------------------
USX-Marathon Group 18,600 540,562 GTE Corp. 15,400 660,275
----------- NYNEX Corp. 14,300 804,375
2,987,187 SBC Communications, Inc. 4,400 263,725
----------- -----------
Finance - 23.58% 1,728,375
- ------------------ -----------
Aetna, Inc. 8,300 862,681 Transportation - 3.72%
Bank of Boston Corp. 4,900 356,475 -----------------------
Banc One Corp. 5,600 280,000 Burlington Northern Santa Fe 5,500 495,687
Chase Manhattan Corp. 6,100 595,512 Delta Air Lines, Inc. 2,900 247,406
First Union Corp. 6,900 654,638 Southwest Air Lines Co. 8,700 229,462
Fleet Financial Group, Inc. 12,200 777,750 -----------
Hartford Financial Services Group 8,000 671,000 972,555
Mellon Bank Corp. 6,600 301,125 -----------
NationsBank Corp. 10,300 672,075 Utilities - 3.62%
St. Paul Companies 3,500 270,813 ----------------
Travelers Group, Inc. 11,300 720,375 Duke Energy Corp. 5,300 248,106
----------- Edison International 12,900 328,144
6,162,444 Entergy Corp. 12,100 326,700
----------- Florida Progress Corp. 1,400 43,575
Food, House & Personal Products - 1.82% -----------
- ------------------------------------------- 946,525
RJR Nabisco Holdings 14,620 475,150 -----------
-----------
475,150
-----------
Total Common Stock 96.00% 25,086,669
Other Assets and
Liabilities, Net 4.00% 1,045,400
-----------
Net Assets 100.00% $ 26,132,069
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund-Money Market Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Principal Amortized
Amount Cost
------------ ------------
<S> <C> <C>
Commercial Paper 101.07%
AT & T, 5.40%, Due July 1, 1997 $ 300,000 $ 299,865
Walt Disney Co., 5.44%, Due July 3, 1997 300,000 299,773
Merrill Lynch, 5.57%, Due July 7, 1997 300,000 299,582
Florida Power Corp., 5.50%, Due July 7, 1997 300,000 299,587
Becton Dickinson & Co., 5.60%, Due July 8, 1997 300,000 299,533
Banc One Corp., 5.53%, Due July 11, 1997 300,000 299,401
Abbott Laboratories, 5.50%, Due July 11, 1997 300,000 299,404
E.I. DuPont de Nemours, 5.52%, Due July 11, 1997 300,000 299,402
Beneficial Corp., 5.51%, Due July 15, 1997 280,000 279,272
Republic New York, 5.57%, Due July 15, 1997 300,000 299,211
Dillard Investment Co., 5.53%, Due July 16, 1997 300,000 299,171
American Express Credit Corp., 5.53%, Due July 21, 1997 300,000 298,940
Household Finance, 5.53%, Due July 25, 1997 300,000 298,756
Coca-Cola Company, 5.48%, July 28, 1997 300,000 298,630
General Electric Capital, 5.53%, Due July 28, 1997 300,000 298,618
Bankers Trust New York, 5.54%, Due July 28, 1997 300,000 298,615
BellSouth Telecommunications, 5.50%, Due July 29, 1997 235,000 233,887
American General Corp., 5.55%, Due July 31, 1997 300,000 298,474
SAFECO Credit Corp., 5.53%, Due August 8, 1997 250,000 248,425
May Department Stores, 5.53%, Due August 11, 1997 290,000 288,040
------------ ------------
Total Commercial Paper 101.07% $ 5,855,000 5,836,586
============
Other Assets and
Liabilities, Net (1.07)% (61,842)
------------
Net Asset 100.00% $ 5,774,744
============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund-Bond Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Par Fair
Value Value
------------ ------------
<S> <C> <C>
Bonds
Government - 28.55%
-------------------
GNMA Pool 181826, 9.00%, Due March, 2021 # $ 31,559 $ 33,374
US Treasury Note, 6.00%, Due September, 1998 200,000 200,156
US Treasury Note, 6.875%, Due August, 1999 150,000 152,414
US Treasury Note, 7.25%, Due May, 2016 175,000 183,394
US Treasury Note, 6.875%, Due August, 2025 150,000 151,430
US Trust Security Strips, 6.93%, Due February, 2021 400,000 79,077
------------ ------------
1,106,559 799,845
------------ ------------
Finance - 25.06%
----------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 101,442
BHP Finance USA, 6.42%, Due March, 2026 100,000 98,814
First National Bank of Boston, 7.375%, Due September, 2006 100,000 104,134
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 99,556
MBNA Corp., 7.25%, Due September, 2002 100,000 101,473
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 101,586
U.S. Leasing International, 5.95%, Due October, 2003 100,000 95,152
------------ ------------
700,000 702,157
------------ ------------
Industrial - 8.95%
------------------
Fruit of the Loom, 6.50%, Due November, 2003 100,000 96,885
Norfolk Southern Corp., 7.875%, Due February, 2004 50,000 52,443
Xerox Corp., 7.15%, Due August, 2004 100,000 101,419
------------ ------------
250,000 250,747
------------ ------------
Retail Trade - 11.16%
---------------------
Dayton Hudson Co., 6.40%, Due February, 2003 100,000 97,609
May Department Stores, 9.875%, Due June, 2000 100,000 108,480
Wal-Mart Stores, 8.625%, Due April, 2001 100,000 106,576
------------ ------------
300,000 312,665
------------ ------------
Utilities - 11.22%
------------------
United Telecommunications, 9.50%, Due April, 2003 100,000 112,808
U.S. West Capital Funding, Inc., 6.85%, Due January,2002 100,000 100,235
Washington Gas & Light, 7.53%, Due July, 2002 100,000 101,329
------------ ------------
300,000 314,372
------------ ------------
Total Bonds 84.94% $ 2,656,559 2,379,786
============
Other Assets and
Liabilities, Net 15.06% 421,944
------------
Net Assets 100.00% $ 2,801,730
============
</TABLE>
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Common Stock
Fair Fair
Shares Value Shares Value
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Aerospace & Defense - .82% Industrial - 11.48%
- ------------------------------ -------------------
United Technologies Corp. 1,500 $ 126,563 Aluminum Co. of America 1,600 $ 121,600
----------- Black & Decker Corp. 3,700 137,363
126,563 Case Corp. 1,200 79,350
----------- Cooper Industries Inc. 4,550 231,197
Chemicals - .29% Deere & Co. 2,500 137,656
- ----------------- Harnischfeger Industries , Inc. 7,100 290,213
W. R. Grace & Co. 800 44,400 Hertz Corp. 2,500 84,375
----------- James River Corp. of Virginia 2,600 96,687
44,400 Johnson Controls, Inc. 1,900 78,969
----------- LTV Corp. 3,200 46,600
Computers - 3.39% Masco Corp. 1,000 41,500
- -------------------- Parker-Hannifin Corp. 3,800 224,675
Avnet, Inc. 2,600 155,350 Reynolds Metals Co. 2,250 159,047
Electronic Data Systems Corp. 2,000 85,375 Union Camp Corp. 800 41,150
International Business Machines 3,100 282,875 -----------
----------- 1,770,382
523,600 -----------
----------- Office Business Equipment - 2.07%
Diversified - 1.90% -----------------------------------
- ------------------- Pitney Bowes, Inc. 2,000 146,375
Canadian Pacific, Ltd. 4,600 131,963 Xerox Corp. 2,200 173,525
Fluor Corp. 1,500 81,844 -----------
Loews Corp. 800 79,450 319,900
----------- -----------
293,257 Realty - 1.90%
----------- -------------------
Drugs & Health Care - .80% Equity Residential Properties Trust 2,600 121,062
- ----------------------------- Simon Debartolo Group, Inc. 5,500 171,188
Meditrust Corp. 3,200 123,200 -----------
----------- 292,250
123,200 -----------
----------- Retail Trade - 1.18%
Energy - 6.22% --------------------
- ---------------- American Stores Co. 3,650 181,131
Amoco Corp. 2,150 188,663 -----------
Mobil Corp. 2,500 173,437 181,131
Repsol S.A. ADS 3,700 157,713 -----------
Texaco, Inc. 1,100 119,350 Telecommunications - 3.62%
TransCanada Pipelines Ltd. 7,300 145,544 ------------------------------
USX-Marathon Group 6,000 174,375 GTE Corp. 4,950 212,231
----------- NYNEX Corp. 4,650 261,563
959,082 SBC Communications, Inc. 1,400 83,912
----------- -----------
Finance - 12.86% 557,706
- ------------------ -----------
Aetna, Inc. 2,700 280,631 Transportation - 2.01%
Bank of Boston Corp. 1,600 116,400 ------------------------
Banc One Corp. 1,800 90,000 Burlington Northern Santa Fe 1,800 162,225
Chase Manhattan Corp. 1,950 190,369 Delta Air Lines, Inc. 900 76,781
First Union Corp. 2,200 208,725 Southwest Air Lines Co. 2,700 71,212
Fleet Financial Group, Inc. 3,900 248,625 -----------
Hartford Financial Services Group 2,600 218,075 310,218
Mellon Bank Corp. 2,200 100,375 -----------
NationsBank Corp. 3,300 215,325 Utilities - 2.71%
St. Paul Companies 1,100 85,112 ----------------
Travelers Group, Inc. 3,600 229,500 Duke Energy Corp. 1,700 79,581
----------- Edison International 4,100 104,294
1,983,137 Entergy Corp. 3,950 106,650
----------- Florida Progress Corp. 4,100 127,612
Food, House & Personal Products - .98% -----------
- ------------------------------------------ 418,137
RJR Nabisco Holdings 4,660 151,450 -----------
-----------
151,450
-----------
Total Common Stock 52.23% 8,054,413
-----------
(continued)
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Par Fair
Value Value
------------ ------------
<S> <C> <C>
Bonds
Government - 16.77%
-----------------------------
FHLMC, 9.00%, Due October, 2019 # $ 18,303 $ 19,390
GNMA, 10.00%, Due February, 2016 # 8,989 9,851
US Treasury Note, 6.00%, Due September, 1998 500,000 500,391
US Treasury Note, 6.875%, Due August, 1999 350,000 355,633
US Treasury Note, 8.00%, Due May, 2001 500,000 529,297
US Treasury Note, 7.25%, Due May, 2016 250,000 261,992
US Treasury Note, 7.875%, Due February, 2021 150,000 168,094
US Treasury Note, 6.875%, Due August, 2025 500,000 504,766
US Trust Security Strips, 6.925%, Due February, 2021 1,200,000 237,230
------------ ------------
3,477,292 2,586,644
Finance - 11.50% ------------ ------------
-----------------------
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 101,442
BHP Finance USA, 6.42%, Due March, 2026 100,000 98,814
Citicorp, 7.125%, Due June, 2003 100,000 101,089
Discover Card Trust 1991-D, 8.00%, Due October, 1998 100,000 102,406
First National Bank of Boston, 7.375%, Due September, 2006 100,000 104,134
Ford Motor Credit, 8.00%, Due June, 2002 150,000 157,560
General Electric Capital, 7.875%, Due December, 2006 100,000 107,000
J.P. Morgan Co., 7.625%, Due September, 2004 100,000 104,068
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 99,556
MBNA Corp., 7.25%, Due September, 2002 100,000 101,473
Morgan Stanley, 6.375%, Due December, 2003 150,000 146,198
Norwest Financial, 6.125%, Due August, 2003 150,000 144,831
Standard Credit Corp., 9.375%, Due July, 1997 100,000 100,068
Texaco Capital, Inc., 8.03%, Due October, 2002 100,000 105,282
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 101,586
U.S. Leasing International, 6.70%, Due April, 2003 100,000 97,667
------------ ------------
1,750,000 1,773,174
------------ ------------
Industrial - 5.22%
------------------------
Canadian Pacific, 6.875%, Due April, 2003 100,000 99,084
Equitable Resources, 8.19%, Due November, 2001 100,000 104,805
Fruit of the Loom, 6.50%, Due November, 2003 100,000 96,885
Hoechst Celanese, 6.125%, Due February, 2004 100,000 96,181
Lowe's Cos., 7.25%, Due August, 2002 100,000 100,603
Norfolk Southern Corp., 7.875%, Due February, 2004 100,000 104,887
PepsiCo Inc., 7.75%, Due October, 1998 100,000 101,713
Xerox Corp., 7.15%, Due August, 2004 100,000 101,419
------------ ------------
800,000 805,577
------------ ------------
(continued)
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
June 30, 1997
(Unaudited)
Par Fair
Value Value
------------ ------------
<S> <C> <C>
Bonds, continued
Retail Trade - 3.29%
-------------------------
Dayton Hudson Co., 6.40%, Due February, 2003 $ 100,000 $ 97,609
J.C. Penney, 6.125%, Due November, 2003 100,000 96,344
May Department Stores, 9.875%, Due June, 2000 100,000 108,480
Sears, 6.54%, Due July, 2003 100,000 97,900
Wal-Mart Stores, 8.625%, Due April, 2001 100,000 106,576
------------ ------------
500,000 506,909
------------ ------------
Utilities - 5.28%
--------------------
Edison International, 7.375%, Due December, 2003 100,000 100,627
General Telephone SE, 7.625%, Due July, 2002 # 100,000 101,291
Illinois Bell Telephone, 7.625%, Due April, 2006 # 100,000 100,993
Kansas City Power & Light, 7.40%, Due February , 2008 100,000 101,888
Ohio Bell Telephone, 6.75%, Due July, 2008 # 100,000 97,108
South Carolina Electric & Gas, 6.00%, Due June, 2000 100,000 98,560
United Telecommunications, 9.50%, Due April, 2003 100,000 112,808
U.S. West Capital Funding, Inc., 6.85%, Due January, 2002 100,000 100,235
------------ ------------
800,000 813,510
------------ ------------
Total 42.06% $ 7,327,292 6,485,814
============
Total Investments 94.29% 14,540,227
Other Assets and
Liabilities, Net 5.71% 880,763
------------
Net Assets 100.00% $ 15,420,990
============
</TABLE>
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Six Months Ended June 30, 1997
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Income:
Dividends $ 309,536 $ - $ - $ 99,581
Interest 15,548 158,989 95,822 243,600
------------ ----------- ----------- ------------
Total income 325,084 158,989 95,822 343,181
------------ ----------- ----------- ------------
Expenses:
Accounting fee 6,716 1,705 793 4,166
Custodian fee 7,237 5,648 1,120 6,004
Management fee 29,353 7,101 3,342 17,857
Other administrative 44,753 6,849 4,772 25,543
------------ ----------- ----------- ------------
Total expenses 88,059 21,303 10,027 53,570
------------ ----------- ----------- ------------
Net investment income 237,025 137,686 85,795 289,611
------------ ----------- ----------- ------------
Realized and unrealized gains (losses)
on investments:
Net proceeds from sales 10,805,263 - 855,011 4,512,921
Cost of securities sold (9,333,389) - (830,363) (4,008,914)
------------ ----------- ----------- ------------
Net realized gains on investments 1,471,874 - 24,648 504,007
Net unrealized gains (losses) on investments 1,396,495 - (48,031) 356,608
------------ ----------- ----------- ------------
Net gains (losses) on investments 2,868,369 - (23,383) 860,615
------------ ----------- ----------- ------------
Net increase in net assets
resulting from operations 3,105,394 137,686 62,412 1,150,226
Distributions to shareholders from:
Net investment income (227,980) (137,686) (85,005) (284,617)
Capital share transactions (303,436) (205,117) 40,938 (59,187)
------------ ----------- ----------- ------------
Net increase (decrease) in net assets 2,573,978 (205,117) 18,345 806,422
Net assets, beginning of period 23,558,091 5,979,861 2,783,385 14,614,568
------------ ----------- ----------- ------------
Net assets, end of period $ 26,132,069 $ 5,774,744 $ 2,801,730 $ 15,420,990
============ =========== =========== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Six Months Ended June 30, 1996
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Income:
Dividends $ 349,554 $ - $ - $ 120,000
Interest 14,461 160,804 107,957 244,115
------------ ----------- ----------- ------------
Total income 364,015 160,804 107,957 364,115
------------ ----------- ----------- ------------
Expenses:
Management fee 26,238 7,257 3,719 17,362
Other administrative 52,474 14,514 7,439 34,723
------------ ----------- ----------- ------------
Total expenses 78,712 21,771 11,158 52,085
------------ ----------- ----------- ------------
Net investment income 285,303 139,033 96,799 312,030
------------ ----------- ----------- ------------
Realized and unrealized gains (losses)
on investments:
Net proceeds from sales 8,074,146 698,279 918,932 4,010,793
Cost of securities sold (6,263,226) (698,292) (919,907) (3,305,618)
------------ ----------- ----------- ------------
Net realized gains (losses) on investments 1,810,920 (13) (975) 705,175
Net unrealized losses on investments (105,261) - (177,723) (529,486)
------------ ----------- ----------- ------------
Net gains (losses) on investments 1,705,659 (13) (178,698) 175,689
------------ ----------- ----------- ------------
Net increase (decrease) in net
assets resulting from operations 1,990,962 139,020 (81,899) 487,719
Distributions to shareholders from:
Net investment income (269,329) (139,020) (95,329) (303,277)
Capital share transactions (358,332) 18,448 (263,565) (365,171)
------------ ----------- ----------- ------------
Net increase (decrease) in net assets 1,363,301 18,448 (440,793) (180,729)
Net assets, beginning of period 19,968,336 5,819,470 3,068,825 13,675,779
------------ ----------- ----------- ------------
Net assets, end of period $ 21,331,637 $ 5,837,918 $ 2,628,032 $ 13,495,050
============ =========== =========== ============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
USLICO Series Fund - Notes to Financial Statements - June 30, 1997
(1) Organization - USLICO Series Fund (the Fund) is an open-end, diversified
management investment company registered under the Investment Company Act of
1940 and consisting of four separate series (Portfolios), each of which has its
own investment objectives and policies. The Fund was organized as a business
trust under the laws of Massachusetts on January 19, 1988. Shares of the
Portfolios are sold only to separate accounts of ReliaStar United Services Life
Insurance Company (ReliaStar United Services) and ReliaStar Bankers Security
Life Insurance Company (ReliaStar Bankers), previously Bankers Security Life
Insurance Society, to serve as the investment medium for variable life
insurance policies issued by these companies. The separate accounts invest in
shares of one or more of the Portfolios, in accordance with allocation
instructions received from policyowners. Each Portfolio share outstanding
represents a beneficial interest in the respective Portfolio and carries a par
value of $.001. The Fund has an unlimited number of shares authorized.
(2) Summary of Significant Accounting Policies
(a) Valuation of Investments
1. Common Stock, Bond and Asset Allocation Portfolios - Equity
securities for which market quotations are readily available are stated at that
fair value. Fair value is determined on the basis of last reported sales price,
or, if no sales are reported, the latest available bid price obtained from a
quotation reporting system or from established market makers. Money market
instruments are valued at fair value, except that instruments maturing in
sixty days or less are valued using amortized cost which approximates fair
value. Debt securities (other than obligations having a maturity of sixty days
or less at their date of acquisition) are valued on the basis of market
quotations obtained from brokers and dealers or pricing services, which take
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics, and other market data. Debt obligations having a
maturity of sixty days or less are generally valued at amortized cost, which
approximates fair value.
2. Money Market Portfolio - Investment securities held by the Money
Market Portfolio are all carried at amortized cost.
(b) Income Recognition - Dividend income is recorded on the ex-dividend
date. Interest income is accrued daily. Realized gains and losses on the sale
of securities are computed on the basis of the identified cost of the related
securities sold and are recognized at the date of trade.
(c) Other Administrative Fees - Other administrative fees are charged to the
Portfolios at an annual percentage rate of .5%. Fund expenses directly
attributable to a Portfolio are charged to that Portfolio. All other expenses
are allocated proportionately among all Portfolios in relation to respective
net assets.
(d) Federal Income Taxes - Each Portfolio intends to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code.
Accordingly, a Portfolio will not be subject to Federal income taxes if it
makes distributions of net investment income and net realized gains in
compliance with subchapter M and meets certain other requirements. (Normally,
however, such distributions are automatically reinvested in additional
portfolio shares.) As the Fund is believed to be in compliance with these
requirements, no federal income tax provision has been provided.
(e) Management Fees - The Fund's investment advisers are compensated with
a quarterly management fee based on an annual percentage of the average daily
net assets of each Portfolio. During 1997 and 1996, the adviser was paid a fee
at an annual rate of .25% of the net asset value of the Portfolios. The
maximum management fee which may be charged is an annual percentage rate of
.50% on the first $100 million of average daily net assets and .45% of average
daily net assets in excess thereof.
(f) Contributions and Withdrawals - Net funds contributed into or withdrawn
from the Fund are made on the basis of the net asset value per share prevailing
at the close of business on the preceding business day.
(g) Reclassifications - Certain prior year amounts have been reclassified to
conform to current year presentation.
(3) Affiliations and Related Party Transactions - ReliaStar United Services and
ReliaStar Bankers are indirect wholly-owned subsidiaries of ReliaStar Financial
Corp. ("ReliaStar"), a financial services company based in Minneapolis,
Minnesota. Washington Square Advisers, Inc., previously Washington Square
Capital, Inc., a direct wholly-owned ReliaStar subsidiary, serves as investment
adviser to the Fund. The Fund's distributor, Washington Square Securities,
Inc., is also a direct wholly-owned ReliaStar subsidiary. Newbold's Asset
Management, Inc. serves as investment sub-adviser for the Common Stock
Portfolio and the common stock portion of the Asset Allocation Portfolio. The
Fund purchases securities through Newbold's Asset Management, Inc. in the
normal course of business.
Officers of the Fund are also officers of ReliaStar, Washington Square
Securities, Inc., ReliaStar United Services and ReliaStar Bankers and receive
compensation therefrom. They do not receive additional compensation for
services rendered to the Fund. Trustees of the Board receive a fee of $500
for each meeting attended. For the six months ended June 30, 1997 and 1996,
total fees paid to the Trustees aggregated $4,000 and $3,000 respectively for
all Portfolios combined.
<PAGE>
(4) Investments - As of June 30, 1997, net unrealized appreciation for each
portfolio was as follows:
Net
Unrealized
Portfolio Appreciation Depreciation Appreciation
Common Stock $5,059,565 $ (69,347) $4,990,218
Money Market N/A N/A N/A
Bond 34,296 (10,068) 24,228
Asset Allocation 1,698,210 (68,410) 1,629,800
(5) Capital Share Transactions - Transactions in capital stock for the six
months ended June 30, were as follows:
<TABLE>
SHARES AMOUNT
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Common Stock Portfolio:
Shares sold................ - - $ - $ -
Shares issued in reinvestment
of dividends............... 15,488 19,779 227,980 269,329
------ ------ ------- -------
15,488 19,779 227,980 269,329
Shares redeemed............ (38,901) (45,635) (531,416) (627,661)
-------- -------- --------- --------
Net decrease............... (23,413) (25,856) $ (303,436) $ (358,332)
======== ======== ========= =========
Money Market Portfolio:
Shares sold................ - - $ - $ -
Shares issued in reinvestment
of dividends............... 137,686 139,020 137,686 139,020
------- ------- ------- -------
137,686 139,020 137,686 139,020
Shares redeemed............ (342,803) (120,572) (342,803) (120,572)
-------- --------- --------- ---------
Net increase(decrease)..... (205,117) 18,448 $ (205,117) $ 18,448
========= ========== ========= =========
Bond Portfolio:
Shares sold................. - - $ - $ -
Shares issued in reinvestment
of dividends................ 8,387 9,462 85,005 95,329
----- ----- ------ ------
8,387 9,462 85,005 95,329
Shares redeemed............ (4,475) (36,142) (44,067) (358,894)
----- ------ ------- -------
Net increase (decrease).... 3,912 (26,680) $ 40,938 $(263,565)
===== ====== ====== =======
Asset Allocation Portfolio:
Shares sold................ - - $ - $ -
Shares issued in reinvestment
of dividends............... 22,632 25,062 284,617 303,277
------ ------ ------- -------
22,632 25,062 284,617 303,277
Shares redeemed........... (28,781) (55,106) (343,804) (668,448)
------ ------ -------- -------
Net decrease.............. (6,149) (30,044) $ (59,187) $(365,171)
====== ======= ======= ========
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1997
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 13.25 $ 1.00 $ 10.02 $ 11.85
Income from investment operations:
Net investment income 0.13 0.02 0.31 0.24
Net realized and unrealized
gains (losses) on securities 1.65 - (0.07) 0.71
------------ ----------- ----------- ------------
Total from investment operations 1.78 0.02 0.24 0.95
Distributions:
Distribution of income (0.13) (0.02) (0.31) (0.23)
Distribution of capital gains - - - -
------------ ----------- ----------- ------------
Net asset value, end of period $ 14.90 $ 1.00 $ 9.95 $ 12.57
============ =========== =========== ============
Total return 13.43% 2.00% 2.40% 8.02%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 26,132,069 $ 5,774,744 $ 2,801,730 $ 15,420,990
Expenses to average net assets 0.36% 0.36% 0.36% 0.36%
Net investment income to average net assets 0.98% 2.35% 3.11% 1.96%
Portfolio turnover rate 40.94% N/A 22.09% 31.38%
Weighted average number of shares outstanding
for six months ended June 30, 1997 1,759,005 5,858,375 277,117 1,222,311
</TABLE>
<TABLE>
For the Six Months Ended June 30, 1996
(Unaudited)
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 12.62 $ 1.00 $ 10.38 $ 11.82
Income from investment operations:
Net investment income 0.18 0.02 0.32 0.27
Net realized and unrealized
gains (losses) on securities 1.08 - (0.61) 0.14
------------ ----------- ----------- ------------
Total from investment operations 1.26 0.02 (0.29) 0.41
Distributions:
Distribution of income (0.17) (0.02) (0.32) (0.26)
Distribution of capital gains - - - -
------------ ----------- ----------- ------------
Net asset value, end of period $ 13.71 $ 1.00 $ 9.77 $ 11.97
============ =========== =========== ============
Total return 9.98% 2.00% (2.79%) 3.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 21,331,637 $ 5,837,918 $ 2,628,032 $ 13,495,050
Expenses to average net assets 0.37% 0.37% 0.37% 0.37%
Net investment income to average net assets 1.36% 2.38% 3.25% 2.25%
Portfolio turnover rate 38.57% N/A 18.37% 29.82%
Weighted average number of shares outstanding
for six months ended June 30, 1996 1,585,079 5,886,655 297,054 1,161,799
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1995
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 10.37 $ 1.00 $ 9.41 $ 10.18
Income from investment operations:
Net investment income 0.20 0.03 0.35 0.28
Net realized and unrealized
gains on securities 1.56 - 0.74 1.18
------------ ----------- ----------- ------------
Total from investment operations 1.76 0.03 1.09 1.46
Distributions:
Distribution of income (0.18) (0.03) (0.33) (0.27)
Distribution of capital gains - - - -
------------ ----------- ----------- ------------
Net asset value, end of period $ 11.95 $ 1.00 $ 10.17 $ 11.37
============ =========== =========== ============
Total return 16.97% 3.00% 11.58% 14.34%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 17,192,186 $ 5,635,745 $ 2,858,249 $ 12,030,713
Expenses to average net assets 0.25% 0.25% 0.25% 0.25%
Net investment income to average net assets 1.76% 2.80% 3.47% 2.64%
Portfolio turnover rate 22.18% N/A 8.39% 13.58%
Weighted average number of shares outstanding
for six months ended June 30, 1995 1,422,300 5,809,244 266,922 1,042,143
</TABLE>
<TABLE>
For the Six Months Ended June 30, 1994
(Unaudited)
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 11.23 $ 1.00 $ 10.49 $ 11.26
Income from investment operations:
Net investment income 0.17 0.01 0.33 0.28
Net realized and unrealized
losses on securities (0.30) - (0.66) (0.58)
------------ ----------- ----------- ------------
Total from investment operations (0.13) 0.01 (0.33) (0.30)
Distributions:
Distribution of income (0.16) (0.01) (0.31) (0.26)
Distribution of capital gains - - - -
------------ ----------- ----------- ------------
Net asset value, end of period $ 10.94 $ 1.00 $ 9.85 $ 10.70
============ =========== =========== ============
Total return (1.16%) 1.00% (3.15%) (2.66%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 13,106,990 $ 5,541,252 $ 2,548,853 $ 9,643,909
Expenses to average net assets 0.37% 0.37% 0.37% 0.37%
Net investment income to average net assets 1.51% 1.43% 3.24% 2.49%
Portfolio turnover rate 27.89% N/A 4.61% 12.40%
Weighted average number of shares outstanding
for six months ended June 30, 1994 1,127,581 5,422,913 252,884 830,763
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Six Months Ended June 30, 1993
(Unaudited)
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of period $ 10.45 $ 1.00 $ 10.21 $ 10.71
Income from investment operations:
Net investment income 0.17 0.01 0.35 0.28
Net realized and unrealized
gains on securities 0.35 - 0.40 0.46
------------ ----------- ----------- ------------
Total from investment operations 0.52 0.01 0.75 0.74
Distributions:
Distribution of income (0.06) (0.01) (0.11) (0.09)
Distribution of capital gains - - - -
------------ ----------- ----------- ------------
Net asset value, end of period $ 10.91 $ 1.00 $ 10.85 $ 11.36
============ =========== =========== ============
Total return 4.98% 1.00% 7.35% 6.91%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period $ 11,674,302 $ 5,306,436 $ 2,543,750 $ 8,742,478
Expenses to average net assets 0.37% 0.37% 0.46% 0.47%
Net investment income to average net assets 1.59% 1.20% 3.30% 2.53%
Portfolio turnover rate 25.23% N/A 4.01% 14.33%
Weighted average number of shares outstanding
for six months ended June 30, 1993 1,061,127 5,433,747 244,192 755,706
</TABLE>
