<PAGE>
[LOGO OF CIGNA
APPEARS HERE]
CIGNA Variable Products
Money Market Fund
Semiannual Report
June 30, 1996
This report has been prepared for the information of participants of CIGNA
Variable Products Money Market Fund pursuant to variable annuity contracts
issued by Connecticut General Life Insurance Company and is not authorized for
distribution to prospective investors unless preceded or accompanied by current
prospectuses of both the annuity account under discussion and the CIGNA Variable
Products Money Market Fund.
<PAGE>
- -------------------------------------------------------------------------------
1
Dear Shareholder:
We are pleased to provide this report for CIGNA Variable Products Money Market
Fund, covering the period March 1, 1996 (Commencement of Operations) to June 30,
1996.
Fund Outperforms Market Index During Second Quarter
For the period since the Fund's inception, CIGNA Variable Products Money Market
Fund outperformed its benchmark by a small margin. The Fund finished the period
with an annualized net yield of 4.83%. The Fund's success was in part due to the
shorter than average maturity of its initial investments. As a result, the Fund
was able to reinvest at higher interest rates much more quickly than competing
funds.
Fund Activity
The initial period was largely devoted to the actual construction of the Fund.
Its composition was as follows: top tier-rated commercial paper, (67.1%); top
tier-rated foreign commercial paper, (7.4%); and U.S. Government and agencies,
(25.0%). The Fund is extremely well diversified within each of the three
categories.
Outlook
Entering the third quarter, we look for market volatility to continue as the
pace of economic activity quickens.
Given these expectations, coupled with the current shape of the short term yield
curve, we will lower average maturity from the 50-day range to the
30-day range in the near term.
Sincerely,
/s/ R. Bruce Albro
R. Bruce Albro, Chairman
CIGNA Variable Products Money Market Fund
- --------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund
Comparative Yield (Unaudited)
<TABLE>
<CAPTION>
30 Day Annualized Yields for
Periods Ended 1996
March April May June
----- ----- --- ----
<S> <C> <C> <C> <C>
CIGNA Variable Products Money Market Fund 4.74% 4.76% 4.86% 4.93%
IBC's Money Market Insight Average/(TM)/ 4.76% 4.75% 4.76% 4.78%
</TABLE>
The Fund's yield is based on the daily dividends for the periods indicated,
annualized, and divided by the average net asset values per share. The average
maturity of the Fund was 48 days as of June 30, 1996. The Fund's annualized
yield for the seven days ended June 30, 1996 was 4.95%. An investment in the
Fund is neither insured nor guaranteed by the U.S. Government and there can be
no assurance the Fund will be able to maintain a stable net asset value of $1.00
per share.
- -------------------------------------------------------------------------------
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- --------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 2
Investments in Securities June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal Market
(000) Value
- ----------------------------------------------------------------------
<S> <C> <C>
COMMERCIAL PAPER - 67.1%
Air Products & Chemicals, Inc., 5.28%, 8/21/96 $ 202 $ 201
American Greetings Corp., 5.38%, 7/16/96 200 200
AT&T Corp., 5.33%, 7/29/96 201 200
Bell Atlantic Network Funding, 5.37%, 7/3/96 202 202
Campbell Soup Co., 5.3%, 7/12/96 203 203
Coca-Cola Co., 5.28%, 7/15/96 200 200
Daimler-Benz North America Corp., 5.33%, 7/9/96 200 200
Dun & Bradstreet Corp., 5.28%, 7/30/96 201 200
Englehard Corp., 5.32%, 7/10/96 200 200
Gannett Co., Inc., 5.33%, 7/26/96 201 200
General Electric Capital Corp., 5.36%, 8/16/96 200 200
Hewlett-Packard Co., 5.26%, 7/23/96 199 198
Philip Morris Companies, Inc., 5.3%, 7/19/96 201 200
Pitney Bowes Credit Corp., 5.35%, 9/17/96 110 109
Procter & Gamble Co., 5.3%, 7/25/96 200 199
Wal-Mart Stores, Inc., 5.4%, 7/8/96 200 200
Weyerhaeuser Co., 5.38%, 8/29/96 116 115
Xerox Corp., 5.32%, 7/24/96 203 202
------
3,429
------
FOREIGN GOVERNMENTS - 7.4%
Bass Finance (C. I.) Limited, 5.3%, 7/2/96 201 201
Canadian Wheat Board, 5.37%, 8/9/96 177 176
------
377
------
U. S. GOVERNMENT & AGENCIES - 25.0%
Federal Farm Credit Banks, 5.6%, 7/1/96 195 195
Federal Home Loan Banks,
5.25%, 7/10/96 200 200
8.0%, 7/25/96 305 305
7.1%, 10/25/96 20 20
5.62%, 4/10/97 200 200
Federal Home Loan Mortgage Corp., 5.33%, 8/12/96 $ 30 $ 30
Federal National Mortgage Association,
8.15%, 8/12/96 40 40
7.7%, 9/10/96 75 75
5.19%, 5/5/97, Floating Rate Note 210 210
------
1,275
------
TOTAL INVESTMENTS IN SECURITIES - 99.5%
(Total Cost -- $5,080,535) 5,081
Cash and Other Assets, Less Liabilities - 0.5% 28
------
NET ASSETS - 100.0%
(equivalent to $1.00 per share based on
5,109,369 shares outstanding) $5,109
======
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- -------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 3
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
June 30, 1996 (Unaudited)
(In Thousands)
--------------
<S> <C>
Assets:
Investments in securities at value (Cost - $5,080,535) $ 5,081
Cash on deposit with custodian 12
Interest receivable 24
Receivable from advisor 4
-------
Total Assets 5,121
-------
Liabilities:
Accrued audit and legal fees payable 3
Accrued administrative service fees payable 6
Other accrued expenses 3
-------
Total Liabilities 12
-------
Net Assets (equivalent to $1.00 per share based on
5,109,369 shares outstanding) $ 5,109
=======
Net Asset Value Per Share $ 1.00
=======
Components of Net Assets:
Paid-in capital $ 5,109
Undistributed net investment income --
Accumulated net realized gain on investments --
Unrealized appreciation of investments --
-------
Net Assets $ 5,109
=======
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Period March 1, 1996 (Commencement of Operations) to
June 30, 1996 (Unaudited)
(In Thousands)
--------------
<S> <C>
Investment Income
Income:
Interest $ 89
-----
Expenses:
Administrative services $ 6
Investment advisory fees 5
Custodian fees and expenses 5
Auditing and legal fees 3
Other 5
-----
Total expenses 24
Less expenses waived by investment advisor (16)
-----
Net expenses 8
-----
Net Investment Income 81
-----
Realized and Unrealized Gain on Investments:
Net realized gain from securities transactions --
Unrealized appreciation of investments --
-----
Net Realized and Unrealized Gain on Investments --
-----
Net Increase in Net Assets Resulting from Operations $ 81
=====
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- -------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 4
Statement of Changes in Net Assets
For the Period March 1, 1996 (Commencement of Operations) to
June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
(In Thousands)
--------------
<S> <C>
Operations:
Net investment income $ 81
Net realized gain from securities transactions --
Unrealized appreciation of investments --
-------
Net increase in net assets from operations 81
-------
Distributions to Shareholders:
From net investment income (81)
From net realized capital gains --
-------
Total distributions to shareholders (81)
-------
Capital Share Transactions:
Net proceeds from sales of shares 5,030
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions 81
-------
5,111
Cost of shares redeemed (2)
-------
Net increase from Fund share transactions 5,109
-------
Net Increase in Net Assets 5,109
Net Assets:
Beginning of period --
-------
End of period $ 5,109
=======
</TABLE>
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- -------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 5
Notes To Financial Statements (Unaudited)
1. Significant Accounting Policies. CIGNA Variable Products Money Market Fund is
a separate series of CIGNA Variable Products Group, a Massachusetts business
trust (the "Trust"). The Trust is registered under the Investment Company Act of
1940, as amended, as a diversified, open-end management investment company. The
objective of the Fund is to provide as high a level of current income as is
consistent with the preservation of capital and liquidity and the maintenance of
a stable $1.00 per share net asset value by investing in short-term money market
instruments. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of financial statements.
A. Security Valuation -- The investments in the Fund are valued at amortized
cost, which the Board of Trustees has determined constitutes fair value and
which at June 30, 1996 approximates cost for Federal income tax purposes.
B. Security Transactions and Related Investment Income -- Security transactions
are accounted for on the trade date (date the order to buy or sell is executed).
Interest income is recorded on the accrual basis. Securities gains and losses
are determined on the basis of identified cost.
C. Federal Taxes -- For Federal income tax purposes, the Fund is taxed as a
separate entity. Its policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income and capital gains to its shareholders. Therefore, no
Federal income or excise taxes on realized income or net capital gains have been
accrued.
D. Dividends -- Dividends from net investment income and net realized gains are
declared and reinvested daily. Dividends and distributions are recorded by the
Fund on the ex-dividend date. The timing and characterization of certain income
and capital gains distributions are determined in accordance with federal tax
regulations which may differ from generally accepted accounting principles. To
the extent that such differences are permanent, a re-class to paid in capital
may be required.
2. Investment Advisory Fees and Other Transactions with Affiliates. Investment
advisory fees were paid or accrued to CIGNA Investments, Inc. ("CII"), certain
officers and directors of which are affiliated with the Funds. Such advisory
fees are based on an annual rate of 0.35% applied to the average daily net
assets of each Fund. CII has voluntarily agreed to reimburse the Fund for any
amount by which its expenses (including the advisory fee but excluding interest,
taxes, amortized organization expenses, transaction costs incurred in acquiring
and disposing of portfolio securities, and extraordinary expenses) exceed 0.50%
of average daily net assets.
The Fund reimburses CII for a portion of the compensation and related expenses
of the Trust's Treasurer and Secretary and certain persons who assist in
carrying out the responsibilities of those offices. For the period June 30,
1996, the Fund paid $6,362.
CII is an indirect, wholly-owned subsidiary of CIGNA Corporation.
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- -------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 6
Notes To Financial Statements (Unaudited) (Continued)
3. Trustees' Fees. Trustees' fees represent remuneration paid or accrued to
trustees who are not employees of CIGNA Corporation or any of their affiliates.
Trustees may elect to defer all or a portion of their fees which are invested in
mutual fund shares in accordance with a deferred compensation plan.
4. Capital Stock. The Fund is a separate series of the Trust which offers an
unlimited number of shares of beneficial interest, without par value. Other than
reinvestment of dividends, the only transaction in Capital Stock for the period
ended June 30, 1996 was the purchase of 5,000,000 shares at $1.00 on March 1,
1996, commencement of operations, by Connecticut General Life Insurance Company
("CG Life"), sole shareholder of the Fund.
5. Financial Highlights. The following selected per share data is computed on
the basis of a share outstanding throughout the period:
<TABLE>
<CAPTION>
March 1, 1996* to
June 30, 1996
-----------------
<S> <C>
Per Share Operating Performance:
Net asset value, beginning of period $ 1.0000
Income from investment operations
Net investment income 0.0161
Net realized and unrealized gains on securities --
----------
Total from investment operations 0.0161
----------
Less Distributions:
Dividends from net investment income (0.0161)
Distributions from capital gains --
----------
Total Distributions (0.0161)
----------
Net asset value, end of period $ 1.0000
==========
Total Investment Return 1.61% **
Ratios and Supplemental Data:
Net assets, end of period (000 omitted) $ 5,109
Ratio of operating expenses to average net assets 0.17% ***
Ratio of net investment income to average net assets 1.61% **
Portfolio turnover N/A
</TABLE>
* Commencement of operations.
** 4.83% annualized. Total return and ratio of net investment income to
average net assets prior to reimbursement of expense was 1.29% (3.86%
annualized) .
*** 0.50% annualized. Ratio of expenses to average net assets prior to
reimbursement of expenses was 0.49% (1.47% annualized).
The Notes to Financial Statements are an integral part of these statements.
<PAGE>
- -------------------------------------------------------------------------------
CIGNA Variable Products Money Market Fund 7
Trustees:
R. Bruce Albro (Chairman)
Senior Managing Director,
CIGNA Investments, Inc.
Hugh R. Beath
Advisory Director,
AdMedia Corporate Advisors, Inc.
Russell H. Jones
Vice President,
Kaman Corporation
Paul J. McDonald
Executive Vice President, Finance
and Chief Financial Officer,
Friendly Ice Cream Corporation
Arthur C. Reeds III
President, CIGNA Investment
Management and CIGNA
Investments, Inc.
Officers:
R. Bruce Albro
Chairman of the Board and President
Alfred A. Bingham III
Vice President and Treasurer
Lawrence S. Harris
Vice President
Jeffrey S. Winer
Vice President and Secretary
Custodian and Transfer Agent:
State Street Bank and Trust Company
P.O. Box 2351
Boston, Massachusetts 02107
Investment Adviser:
CIGNA Investments, Inc.
Hartford, Connecticut 06152
The Fund:
1380 Main Street
Springfield, Massachusetts 01103
The Notes to Financial Statements are an integral part of these statements.
