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Previous: FLORIDA INCOME FUND III LIMITED PARTNERSHIP, DEFA14A, 1998-04-16 |
Next: DREYFUS NEW JERSEY MUNICIPAL BOND FUND INC, 485BPOS, 1998-04-16 |
<PAGE>
USLICO SERIES FUND
INVESTMENT STRATEGIES AND PERFORMANCE OF THE STOCK PORTFOLIO
Pilgrim Baxter Value Investors, Inc. (formerly 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 1997, Pilgrim
Baxter participated reasonably well given their value-style investment
approach. Individual stock selection, particularly in the Energy, Financial
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. Pilgrim Baxter's investment approach precluded them from holding a
full market weighting in Technology due to the high equity valuations in that
sector. The increased weighting in the Financial sector and reduced
commitment to Utility stocks, in comparison with the prior year, contributed
positively to the Fund's performance. Consistent with Pilgrim Baxter'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
AVERAGE ANNUAL TOTAL RETURN
1 Year 25 06%
5 Years 18.63%
10 Years 14.47%
(Graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
12/86 12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STOCK PORTFOLIO 10.4 11.5 14.3 13.3 15.7 16.6 18.3 18.8 24.8 30.5 38.1
S & P 500 INDEX 10.0 10.5 12.3 15.9 15.6 20.4 22.0 24.2 24.5 33.7 41.6 55.3
</TABLE>
*-$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's 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 19.92%, 16.13% and 12.90%, 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 Life Insurance Company of New York and ReliaStar
United Services Life Insurance Company. Investments are primarily in
investment-grade intermediate to long-term bonds. During 1997, the Bond
Portfolio was primarily invested in corporate bonds rated "A" or better by
Moody's or Standard & Poor's. The Portfolio also holds adjustable rate
mortgages and U.S. Government strips. 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 broad market index,
which is the Lehman Brothers Aggregate Bond Index. The Total Return for 1997,
after all expenses at the Portfolio level was 7.09%.
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
BETWEEN THE BOND PORTFOLIO AND THE LEHMAN BROS AGGREGATE BOND INDEX
AVERAGE ANNUAL TOTAL RETURN
1 Year 7.09%
5 Years 6.92%
10 Years 8.28%
(Graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
6/25/87 12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BOND PORTFOLIO 10.0 10.1 11.1 12.5 13.0 14.9 16.0 17.7 17.1 20.1 20.7 22.2
LEHMAN BROS AGGREGATE BOND INDEX 10.0 10.1 10.9 12.4 13.5 15.6 16.8 18.7 18.0 21.5 22.1 24.3
</TABLE>
*-$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's 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 6.20%, 6.19% and 7.65%, 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 Pilgrim Baxter Value Investors, Inc. (formerly Newbold's Asset
Management, Inc.), 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 1997, the bonds in the Portfolio were primarily corporate bonds rated
"A" or better by Moody's or Standard and Poor's. 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 the Lehman
Brothers Aggregate Bond Index. The Total Return for 1997, after all expenses
at the Portfolio level, was 16.62%.
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN*
BETWEEN THE ASSET ALLOCATION PORTFOLIO, LEHMAN BROS AGGREGATE BOND INDEX
AND S & P 500 INDEX
AVERAGE ANNUAL TOTAL RETURN
1 Year 16.62%
5 Years 12.74%
10 Years 11.39%
(Graph appears here. See the table below for plot points.)
<TABLE>
<CAPTION>
6/25/87 12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 12/96 12/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSET ALLOCATION PORTFOLIO 10.0 9.5 10.5 12.2 12.3 14.1 15.2 16.8 16.6 20.8 23.4 27.3
LEHMAN BROS AGGREGATE BOND INDEX 10.0 10.1 10.9 12.4 13.5 15.6 16.8 18.7 18.0 21.5 22.1 24.3
S & P 500 INDEX 10.0 10.3 12.0 15.5 15.3 19.9 21.4 23.6 23.9 32.9 40.4 53.9
</TABLE>
*-$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's 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 13.85%, 11.20% and 10.30%, 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>
<CAPTION>
USLICO SERIES FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
COMMON MONEY
STOCK MARKET BOND
PORTFOLIO PORTFOLIO PORTFOLIO
---------------- ---------------- ----------------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents $ 219,092 $ 27,749 $ 38,114
Common stock, at fair value (cost
$23,404,466 and $7,455,660 respectively) 26,706,311 - -
Bonds, at fair value (cost
$2,722,427 and $6,963,441 respectively) - - 2,757,337
Commercial paper, at amortized
cost which approximates fair value - 5,817,555 -
Dividends receivable 52,097 - -
Interest receivable 35 - 35,097
Securities not settled, net 484,401 - -
---------------- ---------------- ----------------
TOTAL ASSETS 27,461,936 5,845,304 2,830,548
---------------- ---------------- ----------------
LIABILITIES
Accrued expenses 170,291 60,992 28,174
---------------- ---------------- ----------------
TOTAL LIABILITIES 170,291 60,992 28,174
---------------- ---------------- ----------------
NET ASSETS $ 27,291,645 $ 5,784,312 $ 2,802,374
================ ================ ================
NET ASSET VALUE PER SHARE $ 13.50 $ 1.00 $ 10.00
================ ================ ================
SHARES OUTSTANDING 2,021,684 5,784,312 280,298
================ ================ ================
NET ASSETS CONSIST OF:
Capital stock ($.001 par value) $ 2,022 $ 5,784 $ 280
Additional paid-in capital 23,932,488 5,778,528 2,765,523
Accumulated undistributed
net investment income 8,362 - 1,661
Accumulated undistributed net
realized gains from
investment transactions 46,927 - -
Net unrealized appreciation of investments 3,301,846 - 34,910
---------------- ---------------- ----------------
Net assets $ 27,291,645 $ 5,784,312 $ 2,802,374
================ ================ ================
<CAPTION>
ASSET TOTAL
ALLOCATION PORTFOLIOS
PORTFOLIO COMBINED
---------------- ----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 72,248 $ 357,203
Common stock, at fair value (cost
$23,404,466 and $7,455,660 respectively) 8,536,157 35,242,468
Bonds, at fair value (cost
$2,722,427 and $6,963,441 respectively) 7,110,241 9,867,578
Commercial paper, at amortized
cost which approximates fair value - 5,817,555
Dividends receivable 16,988 69,085
Interest receivable 84,866 119,998
Securities not settled, net 161,411 645,812
---------------- ----------------
TOTAL ASSETS 15,981,911 52,119,699
---------------- ----------------
LIABILITIES
Accrued expenses 81,817 341,274
---------------- ----------------
TOTAL LIABILITIES 81,817 341,274
---------------- ----------------
NET ASSETS $ 15,900,094 $ 51,778,425
================ ================
NET ASSET VALUE PER SHARE $ 11.98
================
SHARES OUTSTANDING 1,327,715
================
NET ASSETS CONSIST OF:
Capital stock ($.001 par value) $ 1,328
Additional paid-in capital 14,651,430
Accumulated undistributed
net investment income 9,214
Accumulated undistributed net
realized gains from
investment transactions 10,824
Net unrealized appreciation of investments 1,227,298
----------------
Net assets $ 15,900,094
================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND-COMMON STOCK PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
COMMON STOCK
FAIR
SHARES VALUE
------------ ----------------
COMPUTERS - 7.41%
- -----------------
<S> <C> <C>
Avnet, Inc. 8,200 $ 541,200
Cabletron Systems, Inc. 4,600 69,000
International Business Machines 7,500 784,219
Lexmark International Group 14,100 535,800
Seagate Technology 4,800 92,400
----------------
2,022,619
----------------
DIVERSIFIED - 7.12%
- --------------------
Canadian Pacific, Ltd. 14,200 386,950
Fluor Corp. 8,000 299,000
ITT Industries, Inc. 12,000 376,500
Loews Corp. 8,300 880,837
----------------
1,943,287
----------------
DRUGS & HEALTH CARE - 5.65%
- ---------------------------
Columbia/HCA Healthcare Corp. 28,000 829,500
Meditrust Corp. 12,136 444,487
Medpartners 12,000 268,500
----------------
1,542,487
----------------
ENERGY - 7.60%
- --------------
Enron Corp. 14,900 619,281
Mobil Corp. 3,700 267,094
Repsol S.A. ADS 11,500 489,469
Texaco, Inc. 9,600 522,000
USX-Marathon Group 5,200 175,500
----------------
2,073,344
----------------
FINANCE - 24.29%
- ----------------
Banc One Corp. 10,500 570,281
Chase Manhattan Corp. 6,100 667,950
First Union Corp. 15,000 768,750
Fleet Financial Group, Inc. 6,400 479,600
Hartford Financial Services Group 8,000 748,500
Lafarge Corp. 3,000 88,687
Morgan Stanley Dean Witter 5,300 313,362
NationsBank Corp. 11,000 668,937
Nationwide Financial Services, Inc. 13,000 469,625
PennCorp Financial Group, Inc. 5,000 178,438
The PMI Group, Inc. 8,800 636,350
SAFECO Corp. 11,200 546,000
Santa Fe International Corp. 3,800 154,613
Travelers Group, Inc. 6,300 339,413
----------------
6,630,506
----------------
TOTAL COMMON STOCK 97.86%
OTHER ASSETS AND
LIABILITIES, NET 2.14%
NET ASSETS 100.00%
</TABLE>
<TABLE>
<CAPTION>
FAIR
SHARES VALUE
--------- ----------------
FOOD, HOUSE & PERSONAL PRODUCTS - 2.01%
---------------------------------------
<S> <C> <C>
RJR Nabisco Holdings 14,620 $ 548,250
----------------
548,250
----------------
INDUSTRIAL - 15.98%
-------------------
Case Corp. 4,100 247,794
Chrysler Corp. 10,000 351,875
Deere & Co. 8,500 495,656
Flowserve Corp. 18,000 502,875
Fort James Corp. 8,000 306,000
Harnischfeger Industries, Inc. 25,000 882,812
Johnson Controls, Inc. 9,400 448,850
LTV Corp. 26,000 253,500
Parker-Hannifin Corp. 4,000 183,500
Reynolds Metals Co. 4,900 294,000
United Technologies 5,400 393,188
----------------
4,360,050
----------------
REALTY - 6.05%
--------------
Equity Residential Properties Trust 8,300 419,669
First Industrial Realty Trust 8,000 289,000
Nationwide Health Properties, Inc. 15,000 382,500
Simon Debartolo Group, Inc. 17,100 558,956
----------------
1,650,125
----------------
RETAIL TRADE - 5.83%
--------------------
Dillards, Inc. 20,500 722,625
J.C. Penney Company, Inc. 12,000 723,750
Nieman Marcus Group, Inc. 4,800 145,200
----------------
1,591,575
----------------
TELECOMMUNICATIONS - 7.32%
--------------------------
Bell Atlantic Corp. 9,582 871,962
GTE Corp. 15,400 804,650
SBC Communications, Inc. 4,400 322,300
----------------
1,998,912
----------------
TRANSPORTATION - 5.04%
----------------------
Burlington Northern Santa Fe 5,500 511,156
Delta Air Lines, Inc. 2,700 321,300
Southwest Air Lines Co. 22,000 541,750
----------------
1,374,206
----------------
UTILITIES - 3.56%
-----------------
Florida Progress Corp. 12,900 506,325
Potomac Electric Power Co. 18,000 464,625
----------------
970,950
----------------
26,706,311
585,334
----------------
$ 27,291,645
================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND-MONEY MARKET PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
PRINCIPAL AMORTIZED
COMMERCIAL PAPER 100.57% AMOUNT COST
---------------- ----------------
<S> <C> <C>
General Mills Inc., 5.63%, Due January 5, 1998 $ 300,000 $ 299,812
Gillette Co., 5.68%, Due January 5, 1998 300,000 299,811
Anheuser Busch Inc., 5.68%, Due January 6, 1998 300,000 299,763
Abbott Labs, 5.80%, Due January 7, 1998 300,000 299,710
Bank of New York, 5.82%, January 7, 1998 300,000 299,709
American Telephone & Telegraph Co., 5.68%, Due January 8, 1998 300,000 299,669
Chevron Oil Finance Co., 5.85%, Due January 9, 1998 300,000 299,610
Merrill Lynch & Co., 5.82%, Due January 9, 1998 300,000 299,612
Disney, Walt Co., 5.74%, Due January 12, 1998 300,000 299,474
Household Finance Corp., 5.83%, Due January 12, 1998 300,000 299,465
General Electric Capital Corp., 5.77%, Due January 13, 1998 300,000 299,423
American Express Credit, 5.83%, Due January 15, 1998 150,000 149,660
Beneficial Corp., 5.87%, Due January 15, 1998 300,000 299,315
DuPont E I De Nemours & Co., 5.75%, Due January 15, 1998 300,000 299,329
American General Corp., 5.88%, Due January 16, 1998 300,000 299,265
Baltimore Gas & Electric Co., 5.87%, Due January 16, 1998 280,000 279,315
Ameritech Corp., 5.82%, Due January 23, 1998 300,000 298,933
Florida Power Corp., 5.77%, Due January 26, 1998 300,000 298,798
Procter & Gamble Co., 5.63%, Due February 3, 1998 300,000 298,452
Bellsouth Telecomm Inc., 5.71%, Due February 3, 1998 300,000 298,430
---------------- ----------------
TOTAL COMMERCIAL PAPER 100.57% $ 5,830,000 5,817,555
================
OTHER ASSETS AND
LIABILITIES, NET (.57)% (33,243)
----------------
NET ASSETS 100.00% $ 5,784,312
================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND-BOND PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
PAR FAIR
BONDS VALUE VALUE
--------------- ---------------
<S> <C> <C>
GOVERNMENT - 42.28%
FHLMC, 5.575%, Due December, 2026 # $ 301,698 $ 304,972
FNMA, 5.75%, Due July, 2027 # 95,056 97,324
FNMA, 6.00%, Due July, 2027 # 481,417 492,335
GNMA Pool 181826, 9.00%, Due March, 2021 # 29,470 31,874
US Trust Security Strips, 6.970%, Due February, 2019 300,000 84,270
US Trust Security Strips, 6.925%, Due February, 2021 600,000 149,184
US Trust Security Strips, 6.451%, Due February, 2021 100,000 24,892
--------------- ---------------
1,907,641 1,184,851
--------------- ---------------
FINANCE - 46.62%
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 100,000
Amerco, 6.65%, Due October, 1999 150,000 149,859
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 101,137
Hyder PLC, 6.75%, Due December, 2003 100,000 100,306
Lehman Brothers, 7.36%, Due December, 2003 100,000 103,754
Macsaver Financial Services, 7.40%, Due February, 2002 150,000 149,712
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 86,080
MBNA Corp., 7.25%, Due September, 2002 100,000 103,288
The Money Store, 8.05%, Due April, 2002 100,000 103,194
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 102,543
U.S. West Capital Funding, Inc., 6.85%, Due January, 2002 100,000 101,611
United Companies Financial Corp., 9.35%, Due November, 1999 100,000 105,067
--------------- ---------------
1,300,000 1,306,551
--------------- ---------------
INDUSTRIAL - 1.87%
Pulte Home Corp., 10.125%, Due July, 1999 50,000 52,425
--------------- ---------------
RETAIL TRADE - 3.57%
Dayton Hudson Co., 6.40%, Due February, 2003 100,000 99,934
--------------- ---------------
UTILITIES - 4.05%
United Telecommunications, 9.50%, Due April, 2003 100,000 113,576
--------------- ---------------
TOTAL BONDS 98.39% $ 3,457,641 2,757,337
=============== ---------------
OTHER ASSETS AND
LIABILITIES, NET 1.61% 45,037
---------------
NET ASSETS 100.00% $ 2,802,374
===============
# - Callable at the option of the issuer.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
USLICO SERIES FUND-ASSET ALLOCATION PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
COMMON STOCK
FAIR FAIR
SHARES VALUE SHARES VALUE
------ ---------- ------- ------------
COMPUTERS - 4.06% FOOD, HOUSE & PERSONAL PRODUCTS - 1.10%
- ----------------- ---------------------------------------
<S> <C> <C> <C> <C>
Avnet, Inc. 2,600 $ 171,600 RJR Nabisco Holdings 4,660 $ 174,750
-----------
Cabletron Stystems 1,500 22,500 174,750
-----------
International Business Machines 2,400 250,950 INDUSTRIAL - 8.41%
------------------
Lexmark 4,500 171,000 Case Corp. 1,200 72,525
Seagate Technology 1,500 28,875 Chrysler Corp. 3,200 112,600
----------
644,925 Deere & Co. 2,500 145,781
----------
DIVERSIFIED - 3.88% Flowserve Corp. 6,000 167,625
- --------------------
Canadian Pacific, Ltd. 4,600 125,350 Fort James Corp. 2,600 99,450
Fluor Corp. 2,400 89,700 Harnischfeger Industries, Inc. 7,800 275,437
ITT Industries, Inc. 4,000 125,500 Johnson Controls, Inc. 3,000 143,250
Loews Corp. 2,600 275,925 LTV Corp. 8,200 79,950
----------
616,475 Parker-Hannifin Corp. 900 41,288
----------
DRUGS & HEALTH CARE - 2.99% Reynolds Metals Co. 1,250 75,000
- ---------------------------
Columbia/HCA Healthcare Corp. 8,300 245,887 United Technologies 1,700 123,781
-----------
Meditrust Corp. 3,845 140,828 1,336,687
-----------
Medpartners 4,000 89,500 REALTY - 3.37%
--------------
----------
476,215 Equity Residential Properties Trust 2,600 131,462
----------
ENERGY - 4.18% First Industrial Realty Trust 2,700 97,538
- --------------
Enron Corp. 4,700 195,344 Nationwide Health Properties, Inc. 5,000 127,500
Mobil Corp. 1,200 86,625 Simon Debartolo Group, Inc. 5,500 179,781
-----------
Repsol S.A. ADS 3,700 157,481 536,281
-----------
Texaco, Inc. 3,100 168,563 RETAIL TRADE - 3.24%
--------------------
USX-Marathon Group 1,700 57,375 Dillards, Inc. 6,500 229,125
----------
665,388 J.C. Penney Company, Inc. 4,000 241,250
----------
FINANCE - 13.63% Nieman Marcus Group, Inc. 1,500 45,375
- ----------------
-----------
Banc One Corp. 3,300 179,231 515,750
-----------
Chase Manhattan Corp. 1,950 213,525 TELECOMMUNICATIONS - 4.03%
--------------------------
First Union Corp. 4,400 225,500 Bell Atlantic Corp. 3,071 279,461
Fleet Financial Group, Inc. 2,700 202,331 GTE Corp. 4,950 258,638
Hartford Financial Services Group 2,600 243,263 SBC Communications, Inc. 1,400 102,550
-----------
Lafarge Corp. 1,600 47,300 640,649
-----------
Morgan Stanley Dean Witter 1,700 100,512 TRANSPORTATION - 2.81%
----------------------
NationsBank Corp. 3,300 200,681 Burlington Northern Santa Fe 1,800 167,288
Nationwide Financial Services, Inc. 4,000 144,500 Delta Air Lines, Inc. 900 107,100
PennCorp Financial Group, Inc. 1,500 53,531 Southwest Air Lines Co. 7,000 172,375
-----------
The PMI Group, Inc. 2,800 202,475 446,763
-----------
SAFECO Corp. 3,600 175,500 UTILITIES - 1.99%
-----------------
Santa Fe International Corp. 1,200 48,825 Florida Progress Corp. 4,100 160,925
Travelers Group, Inc. 2,400 129,300 Potomac Electric Power Co. 6,000 154,875
---------- -----------
2,166,474 315,800
---------- -----------
TOTAL COMMON STOCK 53.69% 8,536,157
-----------
See accompanying notes to financial statements. (continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND-ASSET ALLOCATION PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
BONDS PAR FAIR
VALUE VALUE
-------------- ----------------
<S> <C> <C>
GOVERNMENT - 21.49%
FHLMC, 9.00%, Due October, 2019 # $ 11,910 $ 12,699
FHLMC, 5.575%, Due December, 2026 # 789,056 797,618
FNMA, 5.75%, Due July, 2027 # 475,281 486,621
FNMA, 6.00%, Due July, 2027 # 1,280,568 1,309,611
GNMA, 10.00%, Due February, 2016 # 8,907 9,881
US Trust Security Strips, Interest, 6.926%, Due February, 2015 200,000 71,904
US Trust Security Strips, Interest, 6.709%, Due February, 2019 1,000,000 280,900
US Trust Security Strips, Interest, 6.925%, Due February, 2021 1,500,000 372,960
US Trust Security Strips, Principal, 6.451%, Due February, 2021 300,000 74,676
-------------- ----------------
5,565,722 3,416,870
-------------- ----------------
FINANCE - 18.34%
Abbey National PLC, 7.35%, Due October, 2049 # 100,000 100,000
Amerco, 6.65%, Due October, 2099 250,000 249,765
BHP Finance USA, 6.42%, Due March, 2026 # 100,000 101,137
Discover Card Trust 1991-D, 8.00%, Due October, 2000 100,000 101,406
Hyder PLC, 6.75%, Due December, 2004 300,000 300,918
Lehman Brothers Inc., 7.36%, Due December, 2015 350,000 363,139
Malayan Banking Berhad-NY, 7.125%, Due September, 2005 100,000 86,080
Macsaver Financial Services Inc., 7.40%, Due February, 2002 350,000 349,328
MBNA Corp., 7.25%, Due September, 2002 100,000 103,288
The Money Store, 8.05%, Due April, 2002 275,000 283,783
Morgan Stanley, 6.375%, Due December, 2003 150,000 149,993
Tele Communications Inc., 8.25%, Due January, 2015 200,000 214,078
Time Warner Pass Through Asset Trust, 6.10%, Due December, 2001 200,000 199,804
TriNet Corporate Realty Trust, 7.30%, Due May, 2001 100,000 102,543
United Companies Financial Corp., 9.35%, Due November, 1999 200,000 210,134
-------------- ----------------
2,875,000 2,915,396
-------------- ----------------
INDUSTRIAL - 0.97%
Canadian Pacific, 6.875%, Due April, 2003 100,000 102,132
Pulte Home Corp., 10.125%, Due July, 2015 50,000 52,425
-------------- ----------------
150,000 154,557
-------------- ----------------
RETAIL TRADE - 0.63%
Dayton Hudson Co., 6.40%, Due February, 2003 100,000 99,934
-------------- ----------------
100,000 99,934
# - Callable at the option of the issuer. (continued)
See accompanying notes to financial statements.
</TABLE>
<PAGE>
USLICO SERIES FUND-ASSET ALLOCATION PORTFOLIO
STATEMENT OF INVESTMENTS
DECEMBER 31, 1997
<TABLE>
<CAPTION>
BONDS, CONTINUED
<S> <C>
UTILITIES - 3.29%
General Telephone Southeast, 7.625%, Due July, 2002 # 100,000 101,623
Illinois Bell Telephone, 7.625%, Due April, 2006 # 100,000 102,493
Kansas City Power & Light, 7.40%, Due February, 2008 # 100,000 104,181
United Telecommunications, 9.50%, Due April, 2003 100,000 113,576
U.S. West Capital Funding, Inc., 6.85%, Due January, 2002 100,000 101,611
-------------- --------------
500,000 523,484
-------------- --------------
TOTAL BONDS 44.72% $ 9,190,722 7,110,241
-------------- --------------
TOTAL INVESTMENTS 98.41% 15,646,398
OTHER ASSETS AND
LIABILITIES, NET 1.59% 253,696
--------------
NET ASSETS 100.00% $ 15,900,094
==============
</TABLE>
# - Callable at the option of the issuer.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1997
COMMON MONEY
STOCK MARKET
PORTFOLIO PORTFOLIO
----------------- ------------------
INVESTMENT INCOME:
Income:
<S> <C> <C>
Dividends $ 623,112 $ -
Interest 44,532 328,775
----------------- ------------------
Total income 667,644 328,775
----------------- ------------------
Expenses:
Accounting fee 20,472 4,907
Custodian fee 12,006 8,407
Management fee 64,509 14,571
Other administrative 90,252 15,830
----------------- ------------------
Total expenses 187,239 43,715
----------------- ------------------
NET INVESTMENT INCOME 480,405 285,060
----------------- ------------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS:
Net proceeds from sales 23,435,240 -
Cost of securities sold (18,454,764) -
----------------- ------------------
NET REALIZED GAINS ON INVESTMENTS 4,980,476 -
NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS (291,878) -
----------------- ------------------
NET GAINS ON INVESTMENTS 4,688,598 -
----------------- ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 5,169,003 285,060
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (484,004) (285,060)
Net realized (gains) losses on investments (4,933,549) -
CAPITAL SHARE TRANSACTIONS 3,982,104 (195,549)
----------------- ------------------
NET INCREASE (DECREASE) IN NET ASSETS 3,733,554 (195,549)
NET ASSETS, BEGINNING OF YEAR 23,558,091 5,979,861
----------------- ------------------
NET ASSETS, END OF YEAR $ 27,291,645 $ 5,784,312
================= ==================
<CAPTION>
ASSET
BOND ALLOCATION
PORTFOLIO PORTFOLIO
----------------- ------------------
INVESTMENT INCOME:
Income:
<S> <C> <C>
Dividends $ - $ 200,899
Interest 186,350 476,610
------------------ ------------------
Total income 186,350 677,509
------------------ ------------------
Expenses:
Accounting fee 2,327 12,434
Custodian fee 1,749 9,951
Management fee 7,027 38,430
Other administrative 9,978 52,573
------------------ ------------------
Total expenses 21,081 113,388
------------------ ------------------
NET INVESTMENT INCOME 165,269 564,121
------------------ ------------------
REALIZED AND UNREALIZED GAINS (LOSSES)
ON INVESTMENTS:
Net proceeds from sales 3,111,857 15,424,044
Cost of securities sold (3,046,914) (13,719,792)
------------------ ------------------
NET REALIZED GAINS ON INVESTMENTS 64,943 1,704,252
NET UNREALIZED GAINS (LOSSES) ON INVESTMENTS (37,349) (45,895)
------------------ ------------------
NET GAINS ON INVESTMENTS 27,594 1,658,357
------------------ ------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 192,863 2,222,478
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (165,423) (563,393)
Net realized (gains) losses on investments (39,902) (1,693,428)
CAPITAL SHARE TRANSACTIONS 31,451 1,319,869
------------------ ------------------
NET INCREASE (DECREASE) IN NET ASSETS 18,989 1,285,526
NET ASSETS, BEGINNING OF YEAR 2,783,385 14,614,568
------------------ ------------------
NET ASSETS, END OF YEAR $ 2,802,374 $ 15,900,094
================== ==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
USLICO Series Fund
Statement of Operations and Changes in Net Assets
For the Year Ended December 31, 1996
<TABLE>
<CAPTION>
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
=============== ============ ============ =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
USLICO Series Fund - Notes to Financial Statements - December 31, 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 Life Insurance
Company of New York (ReliaStar Life of New York), previously ReliaStar 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, 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 - ReliaStar United Services and
ReliaStar Life of New York 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. Effective January 1, 1998, Newbold's Asset Management, Inc.
changed its name to Pilgrim Baxter Value Investors, Inc.
Officers of the Fund are also officers of ReliaStar, Washington Square
Securities, Inc., ReliaStar United Services and ReliaStar Life of New York 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 years ended December 31, 1997, 1996 and 1995,
total fees paid to the Trustees aggregated $8,000, $6,000, and $6,000,
respectively, for all Portfolios combined.
<PAGE>
(4) Investments - As of December 31, 1997, net unrealized appreciation for each
portfolio was as follows:
Net
Unrealized
Portfolio Appreciation Depreciation Appreciation
--------- ------------ ------------ ------------
Common Stock $3,990,002 $ (688,156) $3,301,846
Money Market N/A N/A N/A
Bond 56,612 (21,702) 34,910
Asset Allocation 1,476,598 (249,300) 1,227,298
(5) Capital Share Transactions - Transactions in capital stock for the year
ended December 31, were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------------------- --------------------------
1997 1996 1997 1996
--------- ------- ----------- -----------
<S> <C> <C> <C> <C>
Common Stock Portfolio:
Shares sold -- -- $ - $ -
Shares issued in reinvestment of dividends 351,841 240,885 5,417,553 3,567,053
--------- ------- ----------- -----------
351,841 240,885 5,417,553 3,567,053
Shares redeemed (107,554) (45,635) (1,435,449) (627,661)
--------- ------- ----------- -----------
Net increase 244,297 195,250 $ 3,982,104 $ 2,939,392
========= ======= =========== ===========
Money Market Portfolio:
Shares sold -- -- $ - $ -
Shares issued in reinvestment of dividends 285,062 280,983 285,062 280,983
Realized loss on sale commercial paper -- (20) -- (20)
--------- ------- ----------- -----------
285,062 280,963 285,062 280,963
Shares redeemed (480,611) (120,572) (480,611) (120,572)
--------- ------- ----------- -----------
Net increase (decrease) (195,549) 160,391 $ (195,549) $ 160,391
========= ======= =========== ===========
Bond Portfolio:
Shares sold -- -- $ - $ -
Shares issued in reinvestment of dividends 20,117 18,177 205,325 182,987
--------- ------- ----------- -----------
20,117 18,177 205,325 182,987
Shares redeemed (17,469) (36,142) (173,874) (358,894)
--------- ------- ----------- -----------
Net increase (decrease) 2,648 (17,965) $ 31,451 $ (175,907)
========= ======= =========== ===========
Asset Allocation Portfolio:
Shares sold -- -- $ - $ -
Shares issued in reinvestment of dividends 173,578 131,268 2,256,821 1,651,783
173,578 131,268 2,256,821 1,651,783
Shares redeemed (79,005) (55,106) (936,952) (668,448)
--------- ------- ----------- -----------
Net increase 97,573 76,162 $1 ,319,869 $ 983,335
========= ======= =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1997
COMMON MONEY
STOCK MARKET
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 13.25 $ 1.00
Income from investment operations:
Net investment income 0.27 0.05
Net realized and unrealized
gains on securities 3.05 -
------------------ ------------------
Total from investment operations 3.32 0.05
Distributions:
Distribution of income (0.27) (0.05)
Distribution of capital gains (2.80) -
------------------ ------------------
Net asset value, end of year $ 13.50 $ 1.00
================== ==================
Total return 25.06% 5.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 27,291,645 $ 5,784,312
Expenses to average net assets 0.73% 0.75%
Net investment income to average net assets 1.87% 4.88%
Portfolio turnover rate 88.55% N/A
Weighted average number of shares outstanding
for year ended December 31, 1997 1,760,754 5,852,073
FOR THE YEAR ENDED DECEMBER 31, 1996
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 12.62 $ 1.00
Income from investment operations:
Net investment income 0.34 0.05
Net realized and unrealized
gains (losses) on securities 2.55 -
------------------ ------------------
Total from investment operations 2.89 0.05
Distributions:
Distribution of income (0.33) (0.05)
Distribution of capital gains (1.93) -
------------------ ------------------
Net asset value, end of year $ 13.25 $ 1.00
================== ==================
Total return 22.90% 5.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 23,558,091 $ 5,979,861
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 2.50% 4.77%
Portfolio turnover rate 79.17% N/A
Weighted average number of shares outstanding
for year ended December 31, 1996 1,575,455 5,897,797
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1997
ASSET
BOND ALLOCATION
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 10.02 $ 11.85
Income from investment operations:
Net investment income 0.59 0.46
Net realized and unrealized
gains on securities 0.12 1.51
------------------ ------------------
Total from investment operations 0.71 1.97
Distributions:
Distribution of income (0.59) (0.46)
Distribution of capital gains (0.14) (1.38)
------------------ ------------------
Net asset value, end of year $ 10.00 $ 11.98
================== ==================
Total return 7.09% 16.62%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 2,802,374 $ 15,900,094
Expenses to average net assets 0.75% 0.74%
Net investment income to average net assets 5.88% 3.68%
Portfolio turnover rate 117.24% 104.30%
Weighted average number of shares outstanding
for year ended December 31, 1997 280,426 1,228,385
FOR THE YEAR ENDED DECEMBER 31, 1996
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 10.38 $ 11.82
Income from investment operations:
Net investment income 0.64 0.53
Net realized and unrealized
gains (losses) on securities (0.36) 0.94
------------------ ------------------
Total from investment operations 0.28 1.47
Distributions:
Distribution of income (0.64) (0.53)
Distribution of capital gains - (0.91)
------------------ ------------------
Net asset value, end of year $ 10.02 $ 11.85
================== ==================
Total return 2.70% 12.44%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 2,783,385 $ 14,614,568
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 6.45% 4.39%
Portfolio turnover rate 47.37% 61.98%
Weighted average number of shares outstanding
for year ended December 31, 1996 284,090 1,148,567
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
COMMON MONEY
STOCK MARKET
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 10.37 $ 1.00
Income from investment operations:
Net investment income 0.36 0.05
Net realized and unrealized
gains on securities 2.95 -
------------------ ------------------
Total from investment operations 3.31 0.05
Distributions:
Distribution of income (0.37) (0.05)
Distribution of capital gains (0.69) -
------------------ ------------------
Net asset value, end of year $ 12.62 $ 1.00
================== ==================
Total return 31.92% 5.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 19,968,336 $ 5,819,470
Expenses to average net assets 0.63% 0.63%
Net investment income to average net assets 3.07% 5.37%
Portfolio turnover rate 62.51% N/A
Weighted average number of shares outstanding
for year ended December 31, 1995 1,450,668 5,763,272
FOR THE YEAR ENDED DECEMBER 31, 1994
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 11.23 $ 1.00
Income from investment operations:
Net investment income 0.36 0.04
Net realized and unrealized
losses on securities (0.05) -
------------------ ------------------
Total from investment operations 0.31 0.04
Distributions:
Distribution of income (0.36) (0.04)
Distribution of capital gains (0.81) -
------------------ ------------------
Net asset value, end of year $ 10.37 $ 1.00
================== ==================
Total return 2.76% 4.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 14,687,489 $ 5,752,426
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 3.23% 3.54%
Portfolio turnover rate 59.41% N/A
Weighted average number of shares outstanding
for year ended December 31, 1994 1,195,719 5,527,212
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
ASSET
BOND ALLOCATION
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 9.41 $ 10.18
Income from investment operations:
Net investment income 0.66 0.55
Net realized and unrealized
gains on securities 1.04 2.01
------------------ ------------------
Total from investment operations 1.70 2.56
Distributions:
Distribution of income (0.66) (0.55)
Distribution of capital gains (0.07) (0.37)
------------------ ------------------
Net asset value, end of year $ 10.38 $ 11.82
================== ==================
Total return 18.07% 25.15%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 3,068,825 $ 13,675,779
Expenses to average net assets 0.63% 0.63%
Net investment income to average net assets 6.49% 4.81%
Portfolio turnover rate 32.67% 44.97%
Weighted average number of shares outstanding
for year ended December 31, 1995 276,475 1,068,503
FOR THE YEAR ENDED DECEMBER 31, 1994
FINANCIAL HIGHLIGHTS (PER SHARE)
Net asset value, beginning of year $ 10.49 $ 11.26
Income from investment operations:
Net investment income 0.67 0.55
Net realized and unrealized
losses on securities (1.06) (0.70)
------------------ ------------------
Total from investment operations (0.39) (0.15)
Distributions:
Distribution of income (0.67) (0.55)
Distribution of capital gains (0.02) (0.38)
------------------ ------------------
Net asset value, end of year $ 9.41 $ 10.18
================== ==================
Total return (3.72)% (1.33)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 2,484,720 $ 10,548,284
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 6.67% 5.09%
Portfolio turnover rate 10.94% 28.53%
Weighted average number of shares outstanding
for year ended December 31, 1994 254,126 892,257
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
USLICO SERIES FUND
CONDENSED FINANCIAL INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1993
COMMON MONEY
STOCK MARKET
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 10.45 $ 1.00
Income from investment operations:
Net investment income 0.32 0.02
Net realized and unrealized
gains on securities 0.78 -
------------------ ------------------
Total from investment operations 1.10 0.02
Distributions:
Distribution of income (0.32) (0.02)
Distribution of capital gains - -
------------------ ------------------
Net asset value, end of year $ 11.23 $ 1.00
================== ==================
Total return 10.53% 2.00%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 12,449,453 $ 5,371,877
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 2.93% 2.42%
Portfolio turnover rate 51.27% N/A
Weighted average number of shares outstanding
for year ended December 31, 1993 1,079,215 5,386,166
<CAPTION>
ASSET
BOND ALLOCATION
PORTFOLIO PORTFOLIO
------------------ ------------------
FINANCIAL HIGHLIGHTS (PER SHARE)
<S> <C> <C>
Net asset value, beginning of year $ 10.21 $ 10.71
Income from investment operations:
Net investment income 0.70 0.58
Net realized and unrealized
gains on securities 0.37 0.58
----------------- ------------------
Total from investment operations 1.07 1.16
Distributions:
Distribution of income (0.70) (0.58)
Distribution of capital gains (0.09) (0.03)
------------------ ------------------
Net asset value, end of year $ 10.49 $ 11.26
================== ==================
Total return 10.48% 10.83%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year $ 2,631,773 $ 9,127,047
Expenses to average net assets 0.75% 0.75%
Net investment income to average net assets 6.62% 5.09%
Portfolio turnover rate 19.04% 27.80%
Weighted average number of shares outstanding
for year ended December 31, 1993 243,616 772,390
</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,
1997, and the related statements of operations and changes in net assets and the
condensed financial information for the years ended December 31, 1997, 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 and 1993 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, 1997, 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, 1997, and the results of their operations and changes in
their net assets and the condensed financial information for the years ended
December 31, 1997 and 1996, in conformity with generally accepted accounting
principles.
Deloitte & Touche LLP
Minneapolis, MN
February 13, 1998
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