USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE STOCK PORTFOLIO
Newbold's Asset Management, Inc. (the "Sub-Adviser") is responsible for the
investments and reinvestments of the Stock Portfolio's assets. They are
"value oriented" in their investment philosophy, which means they proceed from
the premise that investment value and return can best be realized through
buying companies with a low price relative to current earnings. This "bottom
up" approach seeks to identify companies whose earnings growth suggests an
increasing stream of future dividend income, and whose shares' pricing
represents a level below realizable value.
In the continued strong stock market environment during 1996, Newbold's
participated reasonably well given their value-style investment approach.
Individual stock selection, particularly in the Energy and Healthcare sectors,
contributed positively to the year's results. The shortfall in return relative
to the S&P 500 was largely due to the Fund's underweighting in bank stocks and
the high-performing Technology sector relative to the index, and to a higher
weighting in the lagging Utility sector. Newbold's investment approach
precluded them from holding a full market weighting in Technology due to the
increased weighting in the Financial sector and reduced commitment to Utility
stocks in comparison with the prior year. Consistent with Newbold's investment
philosophy, the Fund continues to be positioned in a portfolio of high quality
stocks with low valuations and high current dividend yields.
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
BETWEEN THE STOCK PORTFOLIO AND THE S&P 500 INDEX
Year Stock S&P 500
Portfolio Index
(in thousands of dollars)
12/86 10.0 10.0
12/87 10.4 10.2
12/88 11.5 11.5
12/89 14.3 14.6
12/90 13.3 13.6
12/91 15.7 17.2
12/92 16.6 18.0
12/93 18.3 19.3
12/94 18.8 19.0
12/95 24.8 25.4
12/96 30.5 30.6
*-$10,000 INVESTED ON 12/31/86 IN FUND OR INDEX INCLUDING REINVESTMENT OF
DIVIDENDS
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 18.20%, 11.01% and 8.84%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE BOND PORTFOLIO
The responsibility for investments and reinvestments in the Bond Portfolio
is with Washington Square Advisers, Inc. (the "Adviser"), which is affiliated
with ReliaStar Bankers Security Life Insurance Company and United Services Life
Insurance Company. Investments are primarily in investment-grade intermediate
to long-term corporate bonds. During 1996, the Bond Portfolio was primarily
invested in corporate bonds rated "A" or better by Moody's or Standard &
Poor's. The Portfolio holds no Collateralized Mortgage Obligations. The
average maturity of the bonds was less than ten years. The composition of the
Portfolio holdings tended to have heavier emphasis on corporate bonds than that
of its most representative industry index, which is the Lehman Brothers
Government/Corporate Bond Index. The Total Return for 1996, after all expenses
at the Portfolio level was 2.70%.
COMPARISON OF 114 MONTH CUMULATIVE TOTAL RETURN*
BETWEEN THE BOND PORTFOLIO AND THE LEHMAN BROS GOV'T CORP INDEX
Period Bond Lehman Bros
Portfolio Gov't Corp Index
(in thousands of dollars)
6/25/87 10.0 10.0
12/87 10.1 10.1
12/88 11.1 10.9
12/89 12.5 12.4
12/90 13.0 13.5
12/91 14.9 15.6
12/92 16.0 16.8
12/93 17.7 18.7
12/94 17.1 18.0
12/95 20.1 21.5
12/96 20.7 22.1
*-$10,000 INVESTED ON 6/25/87 IN FUND OR 7/1/87 IN INDEX INCLUDING
REINVESTMENT OF INCOME
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 1.59%, 5.95% and 6.99%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE ASSET ALLOCATION PORTFOLIO
This Portfolio consists of stocks, intermediate to long term bonds of
primarily investment grade and money market instruments. The stocks are chosen
by Newbold's, which is also responsible for choosing the stocks in the Stock
Portfolio. It is a "value oriented" investment manager and uses the same
strategies to pick stocks for this Portfolio as is described under "Investment
Strategies and Performance of the Stock Portfolio." The Adviser for the bonds
and money market portions is Washington Square Advisers, Inc.. During 1996,
the bonds in the Portfolio were primarily corporate bonds rated "A" or better
by Moody's or Standard and Poor's. The Portfolio holds no Collateralized
Mortgage Obligations. The average maturity of the bonds was less than ten
years. Bond holdings were slightly shorter in duration with heavier emphasis
on corporate bonds than that of Lehman Brothers Government/Corporate Bond
Index. The Total Return for 1996, after all expenses at the Portfolio level,
was 12.44%.
COMPARISON OF 114 MONTH CUMULATIVE TOTAL RETURN*
BETWEEN THE ASSET ALLOCATION PORTFOLIO, LEHMAN BROS
GOV'T CORP INDEX AND S&P500 INDEX
Period Asset Allocation Lehman Bros S&P 500
Portfolio Gov't Corp Index Index
(in thousands of dollars)
6/25/87 10.0 10.0 10.0
12/87 9.5 10.1 10.1
12/88 10.5 10.9 11.4
12/89 12.2 12.4 14.4
12/90 12.3 13.5 13.5
12/91 14.1 15.6 17.1
12/92 15.2 16.8 17.8
12/93 16.8 18.7 19.1
12/94 16.6 18.0 18.8
12/95 20.8 21.5 25.2
12/96 23.4 22.1 30.3
*-$10,000 INVESTED ON 6/25/87 IN FUND OR 7/1/87 IN INDEX INCLUDING
REINVESTMENT OF INCOME
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 8.55%, 4.99% and 2.61%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE STOCK PORTFOLIO
Newbold's Asset Management, Inc. (the "Sub-Adviser") is responsible for the
investments and reinvestments of the Stock Portfolio's assets. They are
"value oriented" in their investment philosophy, which means they proceed from
the premise that investment value and return can best be realized through
buying companies with a low price relative to current earnings. This "bottom
up" approach seeks to identify companies whose earnings growth suggests an
increasing stream of future dividend income, and whose shares' pricing
represents a level below realizable value.
In the continued strong stock market environment during 1996, Newbold's
participated reasonably well given their value-style investment approach.
Individual stock selection, particularly in the Energy and Healthcare sectors,
contributed positively to the year's results. The shortfall in return relative
to the S&P 500 was largely due to the Fund's underweighting in bank stocks and
the high-performing Technology sector relative to the index, and to a higher
weighting in the lagging Utility sector. Newbold's investment approach
precluded them from holding a full market weighting in Technology due to the
increased weighting in the Financial sector and reduced commitment to Utility
stocks in comparison with the prior year. Consistent with Newbold's investment
philosophy, the Fund continues to be positioned in a portfolio of high quality
stocks with low valuations and high current dividend yields.
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
BETWEEN THE STOCK PORTFOLIO AND THE S&P 500 INDEX
Year Stock S&P 500
Portfolio Index
(in thousands of dollars)
12/86 10.0 10.0
12/87 10.4 10.2
12/88 11.5 11.5
12/89 14.3 14.6
12/90 13.3 13.6
12/91 15.7 17.2
12/92 16.6 18.0
12/93 18.3 19.3
12/94 18.8 19.0
12/95 24.8 25.4
12/96 30.5 30.6
*-$10,000 INVESTED ON 12/31/86 IN FUND OR INDEX INCLUDING REINVESTMENT OF
DIVIDENDS
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 19.59%, 12.80% and 7.82%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE BOND PORTFOLIO
The responsibility for investments and reinvestments in the Bond Portfolio
is with Washington Square Advisers, Inc. (the "Adviser"), which is affiliated
with ReliaStar Bankers Security Life Insurance Company and United Services Life
Insurance Company. Investments are primarily in investment-grade intermediate
to long-term corporate bonds. During 1996, the Bond Portfolio was primarily
invested in corporate bonds rated "A" or better by Moody's or Standard &
Poor's. The Portfolio holds no Collateralized Mortgage Obligations. The
average maturity of the bonds was less than ten years. The composition of the
Portfolio holdings tended to have heavier emphasis on corporate bonds than that
of its most representative industry index, which is the Lehman Brothers
Government/Corporate Bond Index. The Total Return for 1996, after all expenses
at the Portfolio level was 2.70%.
COMPARISON OF 114 MONTH CUMULATIVE TOTAL RETURN*
BETWEEN THE BOND PORTFOLIO AND THE LEHMAN BROS GOV'T CORP INDEX
Period Bond Lehman Bros
Portfolio Gov't Corp Index
(in thousands of dollars)
6/25/87 10.0 10.0
12/87 10.1 10.1
12/88 11.1 10.9
12/89 12.5 12.4
12/90 13.0 13.5
12/91 14.9 15.6
12/92 16.0 16.8
12/93 17.7 18.7
12/94 17.1 18.0
12/95 20.1 21.5
12/96 20.7 22.1
*-$10,000 INVESTED ON 6/25/87 IN FUND OR 7/1/87 IN INDEX INCLUDING
REINVESTMENT OF INCOME
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 1.56%, 5.35% and 6.14%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE ASSET ALLOCATION PORTFOLIO
This Portfolio consists of stocks, intermediate to long term bonds of
primarily investment grade and money market instruments. The stocks are chosen
by Newbold's, which is also responsible for choosing the stocks in the Stock
Portfolio. It is a "value oriented" investment manager and uses the same
strategies to pick stocks for this Portfolio as is described under "Investment
Strategies and Performance of the Stock Portfolio." The Adviser for the bonds
and money market portions is Washington Square Advisers, Inc.. During 1996,
the bonds in the Portfolio were primarily corporate bonds rated "A" or better
by Moody's or Standard and Poor's. The Portfolio holds no Collateralized
Mortgage Obligations. The average maturity of the bonds was less than ten
years. Bond holdings were slightly shorter in duration with heavier emphasis
on corporate bonds than that of Lehman Brothers Government/Corporate Bond
Index. The Total Return for 1996, after all expenses at the Portfolio level,
was 12.44%.
COMPARISON OF 102 MONTH CUMULATIVE TOTAL RETURN*
BETWEEN THE ASSET ALLOCATION PORTFOLIO, LEHMAN BROS
GOV'T CORP INDEX AND S&P500 INDEX
Period Asset Allocation Lehman Bros S&P 500
Portfolio Gov't Corp Index Index
(in thousands of dollars)
6/25/87 10.0 10.0 10.0
12/87 9.5 10.1 10.1
12/88 10.5 10.9 11.4
12/89 12.2 12.4 14.4
12/90 12.3 13.5 13.5
12/91 14.1 15.6 17.1
12/92 15.2 16.8 17.8
12/93 16.8 18.7 19.1
12/94 16.6 18.0 18.8
12/95 20.8 21.5 25.2
12/96 23.4 22.1 30.3
*-$10,000 INVESTED ON 6/25/87 IN FUND OR 7/1/87 IN INDEX INCLUDING
REINVESTMENT OF INCOME
FISCAL YEARS ENDED 12/31
Returns include the reinvestment of all distributions at Net Asset Value and
the change in share price for the stated period, but exclude insurance and
administration charges assessed by the insurance company separate accounts.
The average annual total return for one, five and ten years which reflects all
common fees and charges for both the underlying fund and separate account
levels are 10.50%, 9.07% and 7.36%, respectively. Such figures do not include
the charges the insurance company makes for the cost of insurance, which if
included, would significantly reduce the return. Please refer to the
hypothetical illustrations in the prospectus of the separate account which
indicate how the cost of insurance can impact performance or you may request a
personalized illustration of historical performance which reflects the cost for
insurance protection. Past performance is not predictive of future
performance. Investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
<PAGE>
<TABLE>
USLICO Series Fund
Statement of Assets and Liabilities
December 31, 1996
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 $ 299,091 $ 4,075 $ 183,049 $ 731,886 $ 1,218,101
Common stock, at fair value (cost
$19,758,815 and $6,380,253, respectively) 23,352,538 - - 7,528,524 30,881,062
Bonds, at fair value (cost
$2,509,759 and $6,171,421, respectively) - - 2,582,018 6,296,342 8,878,360
Commercial paper, at amortized
cost which approximates fair value - 6,038,599 - - 6,038,599
Dividends receivable 56,019 - - 18,122 74,141
Interest receivable 1,715 214 49,200 117,713 168,842
------------ ------------ ------------ ------------ ------------
Total assets 23,709,363 6,042,888 2,814,267 14,692,587 47,259,105
------------ ------------ ------------ ------------ ------------
LIABILITIES
Accrued expenses 151,272 63,027 30,882 78,019 323,200
------------ ------------ ------------ ------------ ------------
Total liabilities 151,272 63,027 30,882 78,019 323,200
------------ ------------ ------------ ------------ ------------
NET ASSETS $ 23,558,091 $ 5,979,861 $ 2,783,385 $ 14,614,568 $ 46,935,905
============ ============ ============ ============ ============
Net asset value per share $ 13.25 $ 1.00 $ 10.02 $ 11.85
============ ============ ============ ============
Shares outstanding 1,777,387 5,979,861 277,650 1,233,142
============ ============ ============ ============
Net assets consist of:
Capital stock ($.001 par value) $ 1,777 $ 5,980 $ 278 $ 1,233
Additional paid-in capital 19,950,628 5,973,881 2,734,074 13,331,655
Accumulated undistributed
net investment income 9,696 - 1,814 5,237
Accumulated undistributed net
realized gains (losses) from
investment transactions 2,267 - (25,040) 3,251
Net unrealized appreciation
of investments 3,593,723 - 72,259 1,273,192
------------ ------------ ------------ ------------
Net assets $ 23,558,091 $ 5,979,861 $ 2,783,385 $ 14,614,568
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Common Stock Portfolio
Statement of Investments
December 31, 1996
Common Stock
Fair Fair
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <S> <C> <C> <C>
Aerospace & Defense - 2.20% Food, House & Personal Products - (continued)
- ----------------------------- -----------------------------------------------
United Technologies Corp. 7,600 $ 519,650 Darden Restaurants, Inc. 26,100 $ 231,637
----------- RJR Nabisco Holdings 11,620 392,175
519,650 -----------
----------- 1,218,475
Chemicals - 6.59% -----------
- ----------------- Industrial - 21.25%
W. R. Grace & Co. 11,200 579,600 -----------------
Great Lakes Chemical 11,100 518,925 Aluminum Co. of America 9,100 575,575
Mallinckrodt Group, Inc. 10,200 453,900 Black & Decker Corp. 11,600 353,800
----------- Cooper Industries Inc. 11,000 460,625
1,552,425 Deere & Co. 7,800 323,700
----------- Genuine Parts Co. 7,600 342,950
Computers - 2.35% Harnischfeger Industries , Inc. 4,100 200,900
- ------------------ James River Corp. of Virginia 17,800 602,975
International Business Machines 3,600 553,050 Masco Corp. 11,000 396,000
----------- Mead Corp. 6,200 365,025
553,050 Parker-Hannifin Corp. 8,400 325,500
----------- Reynolds Metals Co. 4,200 241,500
Diversified - 2.19% WMX Technologies, Inc. 24,500 817,688
- ------------------ -----------
Canadian Pacific, Ltd. 10,300 275,525 5,006,238
Rockwell International Corp. 3,900 239,850 -----------
----------- Office Business Equipment - 2.44%
515,375 -----------------------------------
----------- Xerox Corp. 10,900 574,975
Drugs & Health Care - 3.20% -----------
- ----------------------------- 574,975
Bristol-Myers Squibb Co. 4,700 520,525 -----------
Meditrust Corp. 5,900 233,787 Publishing - 1.01%
----------- -----------------
754,312 Dun & Bradstreet 9,800 237,650
----------- -----------
Energy - 12.48% 237,650
- --------------- -----------
Amoco Corp. 6,700 552,750 Realty - 1.00%
Atlantic Richfield Co. 2,800 382,550 --------------
Exxon Corp. 4,400 437,250 Simon Debartolo Group, Inc. 7,700 234,850
Mobil Corp. 3,850 475,475 -----------
Repsol S.A. ADS 6,300 238,613 234,850
TransCanada Pipelines Ltd. 22,800 399,000 -----------
USX-Marathon Group 18,600 453,375 Retail Trade - 2.98%
----------- --------------------
2,939,013 American Stores Co. 8,300 339,262
----------- Dillard Department Stores 11,600 362,500
Finance - 20.84% -----------
- --------------- 701,762
Aetna, Inc. 9,100 742,788 -----------
American Financial Group, Inc. 3,100 116,250 Telecommunications - 8.95%
Bank of Boston Corp. 3,800 255,075 ----------------------------
Chase Manhattan Corp. 2,600 238,550 AT & T Corp. 10,600 467,725
CoreStates Financial Corp. 6,700 356,775 GTE Corp. 15,400 706,475
First Union Corp. 6,200 475,850 NYNEX Corp. 14,300 713,213
Fleet Financial Group, Inc. 12,200 632,875 Sprint Corp. 5,600 221,200
General Re Corp. 2,250 358,875 -----------
ITT Hartford Group, Inc. 3,700 256,225 2,108,613
Mellon Bank Corp. 5,300 391,537 -----------
NationsBank Corp. 5,150 520,794 Utilities - 6.48%
St. Paul Companies 9,500 562,875 ---------------
----------- Baltimore Gas & Electric 6,500 176,312
4,908,469 Edison International 12,900 259,613
----------- Entergy Corp. 12,100 340,312
Food, House & Personal Products - 5.17% GPU, Inc. 9,200 310,500
- ------------------------------------------ Peco Energy Co. 17,550 440,944
Archer-Daniels-Midland Co. 26,283 594,663 -----------
1,527,681
-----------
Total Common Stock 99.13% 23,352,538
Other Assets and
Liabilities, Net .87% 205,553
-----------
Net Assets 100.00% $ 23,558,091
===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Money Market Portfolio
Statement of Investments
December 31, 1996
Principal Amortized
Commercial Paper 100.98% Amount Cost
------------ ------------
<S> <C> <C>
Walt Disney World, 5.25%, Due January 6, 1997 $ 300,000 $ 299,738
Abbott Laboratories, 5.40%, Due January 7, 1997 175,000 174,816
Procter & Gamble, 5.32%, Due January 7, 1997 300,000 299,690
Motorola Company, 5.30%, Due January 9, 1997 300,000 299,603
Aluminum Company, 5.45%, Due January 9, 1997 300,000 299,591
Bank One, 5.29%, Due January 10, 1997 180,000 179,736
Ameritech Capital, 5.40%, Due January 10, 1997 270,000 269,595
American General Finance, 5.30%, Due January 13, 1997 300,000 299,425
Weyerhauser Co., 5.35%, Due January 13, 1997 300,000 299,420
Household Finance, 5.33%, Due January 14, 1997 300,000 299,378
Merrill Lynch, 5.36%, Due January 15, 1997 300,000 299,330
AT & T, 5.17%, Due January 15, 1997 255,000 254,451
Consolidated Natural Gas, 5.50%, Due January 15, 1997 300,000 299,312
Chevron Oil Corp., 5.45%, Due January 16, 1997 300,000 299,273
Florida Power, 5.50%, Due January 17, 1997 240,000 239,377
BellSouth Telecommunications, 5.27%, Due January 21, 1997 255,000 254,216
Dupont, 5.33%, Due January 21, 1997 275,000 274,155
Beneficial Corp., 5.37%, Due January 23, 1997 250,000 249,142
American Express, 5.33%, Due January 27, 1997 300,000 298,801
General Electric Capital, 5.37%, Due February 3, 1997 300,000 298,478
Heinz, 5.45%, Due February 7, 1997 300,000 298,274
Coca-Cola Company, 5.27%, Due February 28, 1997 255,000 252,798
------------ ------------
Total Commercial Paper 100.98% $ 6,055,000 6,038,599
============
Other Assets and
Liabilities, Net (.98)% (58,738)
------------
Net Assets 100.00% $ 5,979,861
============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Bond Portfolio
Statement of Investments
December 31, 1996
Par Fair
Bonds Value Value
------------ ------------
<S> <C> <C>
Government - 34.89%
---------------------
GNMA Pool 181826, 9.00%, Due March, 2021 # $ 32,999 $ 34,845
US Treasury Note, 6.00%, Due September, 1998 325,000 326,320
US Treasury Note, 6.875%, Due August, 1999 150,000 153,539
US Treasury Note, 7.25%, Due May, 2016 175,000 187,031
US Treasury Note, 7.875%, Due February, 2021 100,000 114,391
US Treasury Note, 6.875%, Due August, 2025 150,000 154,828
----------- ----------
932,999 970,954
----------- ----------
Finance - 22.07%
----------------
BHP Finance USA, 6.42%, Due March, 2026 100,000 99,649
Chase Manhattan, 8.625%, Due May, 2002 100,000 108,809
J.P. Morgan Co., 7.625%, Due September, 2004 100,000 105,652
MBNA Corp., 7.25%, Due September, 2002 100,000 102,444
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 102,297
U.S. Leasing International, 5.95%, Due October, 2003 100,000 95,508
------------ ------------
600,000 614,359
------------ ------------
Industrial - 12.90%
-----------------
Hoechst Celanese, 6.125%, Due February, 2004 100,000 96,699
Motorola, Inc., 7.60%, Due January, 2007 100,000 106,363
Norfolk Southern Corp., 7.875%, Due February, 2004 50,000 53,801
Xerox Corp., 7.15%, Due August, 2004 100,000 102,308
------------ ------------
350,000 359,171
------------ ------------
Retail Trade - 7.85%
--------------------
May Department Stores, 9.875%, Due June, 2000 100,000 110,363
Wal-Mart Stores, 8.625%, Due April, 2001 100,000 108,087
------------ ------------
200,000 218,450 *******
------------ ------------
Utilities - 15.06%
----------------
Edison International, 7.375%, Due December, 2003 100,000 101,009
General Telephone ILL, 7.50%, Due February, 2002 # 100,000 101,520
United Telecommunications, 9.50%, Due April, 2003 100,000 114,402
Washington Gas & Light, 7.53%, Due July, 2002 100,000 102,153 0
------------ ------------
400,000 419,084
------------ ------------
Total Bonds 92.77% $ 2,482,999 2,582,018
============
Other Assets and
Liabilities, Net 7.23% 201,367
------------
Net Assets 100.00% $ 2,783,385
============
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
December 31, 1996
Common Stock
Fair
Shares Value Shares Value
--------- ----------- --------- -----------
<S> <C> <C> <S> <C> <C>
Aerospace & Defense - 1.12% Food, House & Personal Products - (continued)
- ------------------------------- -----------------------------------------------
United Technologies Corp. 2,400 $ 164,100 Darden Restaurants, Inc. 8,400 $ 74,550
----------- RJR Nabisco Holdings 3,760 126,900
164,100 -----------
----------- 392,405
Chemicals - 3.43% -----------
- ----------------- Industrial - 11.03%
W. R. Grace & Co. 3,600 186,300 ------------------
Great Lakes Chemical 3,600 168,300 Aluminum Co. of America 2,900 183,425
Mallinckrodt Group, Inc. 3,300 146,850 Black & Decker Corp. 3,700 112,850
----------- Cooper Industries Inc. 3,550 148,656
501,450 Deere & Co. 2,500 103,750
----------- Genuine Parts Co. 2,450 110,556
Computers - 1.21% Harnischfeger Industries, Inc. 1,300 63,700
- ------------------- James River Corp. of Virginia 5,700 193,087
International Business Machines 1,150 176,669 Masco Corp. 3,700 133,200
----------- Mead Corp. 2,000 117,750
176,669 Parker-Hannifin Corp. 2,700 104,625
----------- Reynolds Metals Co. 1,350 77,625
Diversified - 1.11% WMX Technologies, Inc. 7,850 261,994
- ------------------ -----------
Canadian Pacific, Ltd. 3,300 88,275 1,611,218
Rockwell International Corp. 1,200 73,800 -----------
----------- Office Business Equipment - 1.27%
162,075 -----------------------------------
----------- Xerox Corp. 3,500 184,625
Drugs & Health Care - 1.65% -----------
- ----------------------------- 184,625
Bristol-Myers Squibb Co. 1,500 166,125 -----------
Meditrust Corp. 1,900 75,287 Publishing - 0.52%
----------- -----------------
241,412 Dun & Bradstreet 3,150 76,388
----------- -----------
Energy - 6.50% 76,388
- --------------- -----------
Amoco Corp. 2,150 177,375 Realty - 0.52%
Atlantic Richfield Co. 950 129,794 ---------------
Exxon Corp. 1,400 139,125 Simon Debartolo Group, Inc. 2,500 76,250
Mobil Corp. 1,250 154,375 -----------
Repsol S.A. ADS 2,000 75,750 76,250
TransCanada Pipelines Ltd. 7,300 127,750 -----------
USX-Marathon Group 6,000 146,250 Retail Trade - 1.53%
----------- --------------------
950,419 American Stores Co. 2,650 108,319
----------- Dillard Department Stores 3,700 115,625
Finance - 10.84% -----------
- ---------------- 223,944
Aetna, Inc. 2,900 236,713 -----------
American Financial Group, Inc. 1,000 37,500 Telecommunications - 4.67%
Bank of Boston Corp. 1,200 80,550 -----------------------------
Chase Manhattan Corp. 850 77,988 AT & T Corp. 3,450 152,231
CoreStates Financial Corp. 2,100 111,825 GTE Corp. 4,950 227,081
First Union Corp. 2,000 153,500 NYNEX Corp. 4,650 231,919
Fleet Financial Group, Inc. 3,900 202,312 Sprint Corp. 1,800 71,100
General Re Corp. 750 119,625 -----------
ITT Hartford Group, Inc. 1,200 83,100 682,331
Mellon Bank Corp. 1,800 132,975 -----------
NationsBank Corp. 1,650 166,856 Utilities - 3.43%
St. Paul Companies 3,050 180,713 ---------------
----------- Baltimore Gas & Electric 2,450 66,456
1,583,657 Edison International 4,100 82,512
----------- Entergy Corp. 3,950 111,094
Food, House & Personal Products - 2.69% GPU, Inc. 2,950 99,563
- ----------------------------------------- Peco Energy Co. 5,650 141,956
Archer-Daniels-Midland Co. 8,440 190,955 -----------
501,581
-----------
Total Common Stock 51.52% 7,528,524
-----------
(continued)
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
December 31, 1996
Bonds Par Fair
Value Value
------------ ------------
<S> <C> <C>
Government - 15.36%
----------------------
FHLMC, 9.00%, Due October, 2019 # $ 27,238 $ 28,898
GNMA, 10.00%, Due February, 2016 # 9,088 10,011
US Treasury Note, 6.00%, Due September, 1998 600,000 602,437
US Treasury Note, 6.875%, Due August, 1999 350,000 358,258
US Treasury Note, 8.00%, Due May, 2001 500,000 536,953
US Treasury Note, 7.25%, Due May, 2016 250,000 267,188
US Treasury Note, 7.875%, Due February, 2021 250,000 285,977
US Treasury Note, 6.875%, Due August, 2025 150,000 154,828
------------ ------------
2,136,326 2,244,550
------------ ------------
Finance - 10.88%
-----------------
BHP Finance USA, 6.42%, Due March, 2026 100,000 99,649
Chase Manhatttan, 8.625%, Due May, 2002 100,000 108,809
Citicorp, 7.125%, Due June, 2003 100,000 101,913
Discover Card Trust 1991-D, 8.00%, Due October, 1998 100,000 103,148
Ford Motor Credit, 8.00%, Due June, 2002 150,000 159,525
General Electric Capital, 7.875%, Due December, 2006 100,000 107,364
J.P. Morgan Co., 7.625%, Due September, 2004 100,000 105,652
MBNA Corp., 7.25%, Due September, 2002 100,000 102,444
Morgan Stanley, 6.375%, Due December, 2003 150,000 146,361
Norwest Financial, 6.125%, Due August, 2003 150,000 146,069
Standard Credit Corp., 9.375%, Due July, 1997 100,000 101,738
Texaco Capital, Inc., 8.03%, Due October, 2002 100,000 106,662
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 102,297
U.S. Leasing International, 6.70%, Due April, 2003 100,000 98,384
------------ ------------
1,550,000 1,590,015
------------ ------------
Industrial - 7.05%
----------------------
Canadian Pacific, 6.875%, Due April, 2003 100,000 100,000
Communications Satellite Corp., 8.125%, Due April, 2004 100,000 107,640
Equitable Resources, 8.19%, Due November, 2001 100,000 105,886
Hoechst Celanese, 6.125%, Due February, 2004 100,000 96,699
Lowe's Cos., 7.25%, Due August, 2002 100,000 101,028
Motorola, Inc., 7.60%, Due January, 2007 100,000 106,363
Norfolk Southern Corp., 7.875%, Due February, 2004 100,000 107,602
PepsiCo Inc., 7.75%, Due October, 1998 100,000 102,530
Warner Lambert, 6.625%, Due September, 2002 100,000 100,528
Xerox Corp., 7.15%, Due August, 2004 100,000 102,308
------------ ------------
1,000,000 1,030,584
------------ ------------
(continued)
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund-Asset Allocation Portfolio
Statement of Investments
December 31, 1996
Bonds, continued Par Fair
Value Value
------------ ------------
<S> <C> <C>
Retail Trade - 2.83%
--------------------
J.C. Penney, 6.125%, Due November, 2003 $ 100,000 $ 96,715
May Department Stores, 9.875%, Due June, 2000 100,000 110,363
Sears, 6.54%, Due July, 2003 100,000 98,763
Wal-Mart Stores, 8.625%, Due April, 2001 100,000 108,087
------------ ------------
400,000 413,928
------------ ------------
Utilities - 6.96%
---------------
Allegheny Generating, 5.625%, Due September, 2003 100,000 94,618
AT&T Corp., 7.125%, Due January, 2002 100,000 102,700
Edison International, 7.375%, Due December, 2003 100,000 101,009
General Telephone SE, 7.625%, Due July, 2002 # 100,000 101,690
Illinois Bell Telephone, 7.625%, Due April, 2006 # 100,000 101,495
Kansas City Power & Light, 7.40%, Due February, 2008 100,000 102,958
Ohio Bell Telephone, 6.75%, Due July, 2008 # 100,000 97,913
Pacific Bell, 7.00%, Due July, 2004 100,000 101,777
South Carolina Electric & Gas, 6.00%, Due June, 2000 100,000 98,703
United Telecommunications, 9.50%, Due April, 2003 100,000 114,402
------------ ------------
1,000,000 1,017,265
------------ ------------
Total 43.08% $ 6,086,326 6,296,342
------------
Total 94.60% 13,824,866
Other Assets and
Liabilities 5.40% 789,702
------------
Net Assets 100.00% $ 14,614,568
============
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Year Ended December 31, 1996
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Income:
Dividends $ 664,783 $ - $ - $ 221,817
Interest 30,003 325,239 205,834 491,561
------------ ----------- ----------- ------------
Total income 694,786 325,239 205,834 713,378
------------ ----------- ----------- ------------
Expenses:
Accounting fee 15,497 4,055 2,526 10,465
Custodian fee 15,347 10,851 2,363 13,960
Management fee 53,353 14,752 7,176 34,689
Other administrative 75,863 14,598 9,462 44,953
------------ ----------- ----------- ------------
Total expenses 160,060 44,256 21,527 104,067
------------ ----------- ----------- ------------
Net investment income 534,726 280,983 184,307 609,311
------------ ----------- ----------- ------------
Realized and unrealized gains (losses)
on investments:
Net proceeds from sales 16,528,720 1,036,915 1,711,952 8,246,310
Cost of securities sold (13,483,386) (1,036,935) (1,736,992) (7,198,529)
------------ ----------- ----------- ------------
Net realized gains (losses) on investments 3,045,334 (20) (25,040) 1,047,781
Net unrealized gains (losses) on investments 637,356 - (85,813) (49,855)
------------ ----------- ----------- ------------
Net gains (losses) on investments 3,682,690 (20) (110,853) 997,926
------------ ----------- ----------- ------------
Net increase in net assets
resulting from operations 4,217,416 280,963 73,454 1,607,237
Distributions to shareholders from:
Net investment income (521,719) (280,983) (182,987) (604,001)
Net realized (gains) losses on investment (3,045,334) 20 - (1,047,782)
Capital share transactions 2,939,392 160,391 (175,907) 983,335
------------ ----------- ----------- ------------
Net increase (decrease) in net assets 3,589,755 160,391 (285,440) 938,789
Net assets, beginning of year 19,968,336 5,819,470 3,068,825 13,675,779
------------ ----------- ----------- ------------
Net assets, end of year $ 23,558,091 $ 5,979,861 $ 2,783,385 $ 14,614,568
============ =========== =========== ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Year Ended December 31, 1995
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
Investment income:
Income:
Dividends $ 586,560 $ - $ - $ 204,665
Interest 56,673 345,679 198,713 453,027
------------ ----------- ----------- ------------
Total income 643,233 345,679 198,713 657,692
------------ ----------- ----------- ------------
Expenses:
Accounting fee 20,547 6,966 3,333 14,351
Custodian fee 13,782 10,273 2,221 12,331
Management fee 23,450 7,184 3,692 16,081
Other administrative 52,754 11,539 8,258 33,232
------------ ----------- ----------- ------------
Total expenses 110,533 35,962 17,504 75,995
------------ ----------- ----------- ------------
Net investment income 532,700 309,717 181,209 581,697
------------ ----------- ----------- ------------
Realized and unrealized gains
on investments:
Net proceeds from sales 10,275,292 - 870,439 5,208,193
Cost of securities sold (9,268,825) - (849,932) (4,811,709)
------------ ----------- ----------- ------------
Net realized gains on investments 1,006,467 - 20,507 396,484
Net unrealized gains on investments 3,154,718 - 256,864 1,694,675
------------ ----------- ----------- ------------
Net gains on investments 4,161,185 - 277,371 2,091,159
------------ ----------- ----------- ------------
Net increase in net assets
resulting from operations 4,693,885 309,717 458,580 2,672,856
Distributions to shareholders from:
Net investment income (535,933) (309,717) (181,195) (582,747)
Net realized gains on investment (1,004,200) - (20,507) (393,232)
Capital share transactions 2,127,095 67,044 327,227 1,430,618
------------ ----------- ----------- ------------
Net increase in net assets 5,280,847 67,044 584,105 3,127,495
Net assets, beginning of year 14,687,489 5,752,426 2,484,720 10,548,284
------------ ----------- ----------- ------------
Net assets, end of year $ 19,968,336 $ 5,819,470 $ 3,068,825 $ 13,675,779
============ =========== =========== ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
USLICO Series Fund - Notes to Financial Statements - December 31, 1996
(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 United Services Life
Insurance Company (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 1996 and 1995, the adviser was paid a
fee at an annual rate of .25% of the net asset value of the Portfolios except
for the period from January 1, 1995 to June 30, 1995 during which no
investment advisory fee was charged pending approval of new advisory
agreements which were received on June 30, 1995. 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 - 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, ReliaStar
Financial Marketing Corporation, previously known as USLICO Securities Corp.,
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, ReliaStar Financial
Marketing Corporation, 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 year ended December 31, 1996 and 1995,
total fees paid to the Trustees aggregated $6,000 in both periods for all
Portfolios combined.
<PAGE>
(4) Investments - As of December 31, 1996, net unrealized appreciation
for each portfolio was as follows:
Net
Unrealized
Portfolio Appreciation Depreciation Appreciation
--------- ------------ ------------ ------------
Common Stock $3,773,326 $ (179,603) $3,593,723
Money Market N/A N/A N/A
Bond 77,545 (5,286) 72,259
Asset Allocation 1,363,315 (90,123) 1,273,192
(5) Capital Share Transactions - Transactions in capital stock for the
year ended December 31, were as follows:
<TABLE>
SHARES AMOUNT
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Common Stock Portfolio:
Shares sold................. - 47,165 $ - $ 586,962
Shares issued in reinvestment
of dividends................. 240,885 118,938 3,567,053 1,540,133
------- ------- --------- ---------
240,885 166,103 3,567,053 2,127,095
Shares redeemed.............. (45,635) - (627,661) -
-------- ------- --------- ---------
Net increase................ 195,250 166,103 $ 2,939,392 $ 2,127,095
======== ======= ========= =========
Money Market Portfolio:
Shares sold.................. - 36,248 $ - $ 36,248
Shares issued in reinvestment
of dividends................. 280,983 309,717 280,983 309,717
Realized loss on sale
commercial paper ........... (20) - (20) -
------- -------- ------- -------
280,963 345,965 280,963 345,965
Shares redeemed............. (120,572) (278,921) (120,572) (278,921)
------- ------- -------- --------
Net increase............... 160,391 67,044 $ 160,391 $ 67,044
======= ======== ======== ========
Bond Portfolio:
Shares sold................ - 12,189 $ - $ 125,525
Shares issued in reinvestment
of dividends................. 18,177 19,469 182,987 201,702
------ ------ ------- -------
18,177 31,658 182,987 327,227
Shares redeemed.............. (36,142) - (358,894) -
------ ------ ------- -------
Net increase (decrease)..... (17,965) 31,658 $ (175,907) $ 327,227
====== ====== ======= =======
Asset Allocation Portfolio:
Shares sold.................. - 42,559 $ - $ 496,970
Shares issued in reinvestment
of dividends................. 131,268 82,056 1,651,783 975,979
------- ------ --------- -------
131,268 124,615 1,651,783 1,472,949
Shares redeemed.............. (55,106) (3,664) (668,448) (42,331)
------ ------- --------- ----------
Net increase................ 76,162 120,951 $ 983,335 $ 1,430,618
======= ======= ========= ==========
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Year Ended December 31, 1996
Common Money Asset
Stock Market Bond Allocation
Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning year $ 12.62 $ 1.00 $ 10.38 $ 11.82
Income from investment operations:
Net investment income 0.34 0.05 0.64 0.53
Net realized and unrealized
gains (losses) on securities 2.55 - (0.36) 0.94
----------- ----------- ----------- -----------
Total from investment operations 2.89 0.05 0.28 1.47
Distributions:
Distribution of income (0.33) (0.05) (0.64) (0.53)
Distribution of capital gains (1.93) - - (0.91)
----------- ----------- ----------- -----------
Net asset value, end of year $ 13.25 $ 1.00 $ 10.02 $ 11.85
=========== =========== =========== ===========
Total return 22.90% 5.00% 2.70% 12.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $23,558,091 $ 5,979,861 $ 2,783,385 $14,614,568
Expenses to average net assets 0.75% 0.75% 0.75% 0.75%
Net investment income to average net assets 2.50% 4.77% 6.45% 4.39%
Portfolio turnover rate 79.17% N/A 47.37% 61.98%
Weighted average number of shares outstanding
for year ended December 31, 1996 1,575,455 5,897,797 284,090 1,148,567
For the Year Ended December 31, 1995
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of year $ 10.37 $ 1.00 $ 9.41 $ 10.18
Income from investment operations:
Net investment income 0.36 0.05 0.66 0.55
Net realized and unrealized
gains on securities 2.95 - 1.04 2.01
----------- ----------- ----------- -----------
Total from investment operations 3.31 0.05 1.70 2.56
Distributions:
Distribution of income (0.37) (0.05) (0.66) (0.55)
Distribution of capital gains (0.69) - (0.07) (0.37)
----------- ----------- ----------- -----------
Net asset value, end of year $ 12.62 $ 1.00 $ 10.38 $ 11.82
=========== =========== =========== ===========
Total return 31.92% 5.00% 18.07% 25.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $19,968,336 $ 5,819,470 $ 3,068,825 $13,675,779
Expenses to average net assets 0.63% 0.63% 0.63% 0.63%
Net investment income to average net assets 3.07% 5.37% 6.49% 4.81%
Portfolio turnover rate 62.51% N/A 32.67% 44.97%
Weighted average number of shares outstanding
for year ended December 31, 1995 1,450,668 5,763,272 276,475 1,068,503
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Year Ended December 31, 1994
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 year $ 11.23 $ 1.00 $ 10.49 $ 11.26
Income from investment operations:
Net investment income 0.36 0.04 0.67 0.55
Net realized and unrealized
losses on securities (0.05) - (1.06) (0.70)
----------- ----------- ----------- -----------
Total from investment operations 0.31 0.04 (0.39) (0.15)
Distributions:
Distribution of income (0.36) (0.04) (0.67) (0.55)
Distribution of capital gains (0.81) - (0.02) (0.38)
----------- ----------- ----------- -----------
Net asset value, end of year $ 10.37 $ 1.00 $ 9.41 $ 10.18
=========== =========== =========== ===========
Total return 2.76% 4.00% (3.72)% (1.33)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $14,687,489 $ 5,752,426 $ 2,484,720 $10,548,284
Expenses to average net assets 0.75% 0.75% 0.75% 0.75%
Net investment income to average net assets 3.23% 3.54% 6.67% 5.09%
Portfolio turnover rate 59.41% N/A 10.94% 28.53%
Weighted average number of shares outstanding
for year ended December 31, 1994 1,195,719 5,527,212 254,126 892,257
For the Year Ended December 31, 1993
FINANCIAL HIGHLIGHTS (per share)
Net asset value, beginning of year $ 10.45 $ 1.00 $ 10.21 $ 10.71
Income from investment operations:
Net investment income 0.32 0.02 0.70 0.58
Net realized and unrealized
gains on securities 0.78 - 0.37 0.58
----------- ----------- ----------- -----------
Total from investment operations 1.10 0.02 1.07 1.16
Distributions:
Distribution of income (0.32) (0.02) (0.70) (0.58)
Distribution of capital gains - - (0.09) (0.03)
----------- ----------- ----------- -----------
Net asset value, end of year $ 11.23 $ 1.00 $ 10.49 $ 11.26
=========== =========== =========== ===========
Total return 10.53% 2.00% 10.48% 10.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $12,449,453 $ 5,371,877 $ 2,631,773 $ 9,127,047
Expenses to average net assets 0.75% 0.75% 0.75% 0.75%
Net investment income to average net assets 2.93% 2.42% 6.62% 5.09%
Portfolio turnover rate 51.27% N/A 19.04% 27.80%
Weighted average number of shares outstanding
for year ended December 31, 1993 1,079,215 5,386,166 243,616 772,390
</TABLE>
<PAGE>
<TABLE>
USLICO Series Fund
Condensed Financial Information
For the Year Ended December 31, 1992
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 year $ 10.55 $ 1.00 $ 10.21 $ 10.71
Income from investment operations:
Net investment income 0.38 0.03 0.73 0.61
Net realized and unrealized
gains on securities 0.22 - 0.06 0.19
----------- ----------- ----------- -----------
Total from investment operations 0.60 0.03 0.79 0.80
Distributions:
Distribution of income (0.70) (0.03) (0.79) (0.78)
Distribution of capital gains - - - (0.02)
----------- ----------- ----------- -----------
Net asset value, end of year $ 10.45 $ 1.00 $ 10.21 $ 10.71
=========== =========== =========== ===========
Total return 5.69% 3.00% 7.74% 7.47%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $11,102,452 $ 5,464,509 $ 2,507,559 $ 8,054,067
Expenses to average net assets 0.75% 0.75% 0.75% 0.75%
Net investment income to average net assets 3.53% 2.98% 7.16% 5.61%
Portfolio turnover rate 36.00% N/A 41.30% 26.79%
Weighted average number of shares outstanding
for year ended December 31, 1992 994,102 5,433,008 238,112 665,240
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Trustees
USLICO Series Fund:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of USLICO Series Fund
(consisting of the common stock, money market, bond, and asset
allocation portfolios) as of December 31, 1996, and the related
statements of operations and changes in net assets and the condensed
financial information for the years ended December 31, 1996 and 1995.
These financial statements and condensed financial information are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the condensed
financial information based on our audits. The condensed financial
information for the years ended December 31, 1994, 1993 and 1992 were
audited by other auditors whose report, dated February 2, 1995 expressed
an unqualified opinion on those statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and condensed financial information are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements and the condensed
financial information. Our procedures included confirmation of
securities owned as of December 31, 1996, by correspondence with
custodians and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the condensed financial
information referred to above present fairly, in all material respects,
the net assets and investments of each of the respective portfolios
constituting the USLICO Series Fund as of December 31, 1996, and the
results of their operations and changes in their net assets and the
condensed financial information for the years ended December 31, 1996
and 1995, in conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Minneapolis, MN
January 31, 1997
