THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
SEMI - ANNUAL
FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
SEMI - ANNUAL
FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
CONTENTS
Statement of Assets and Liabilities 1
At June 30, 1996
Statement of Operations 2
For the Six Months Ended June 30, 1996
Statement of Changes in Net Assets 3
For the Six Months Ended June 30, 1996
And the Year Ended December 31, 1995
Financial Highlights 4
For the Six Months Ended June 30, 1996,
The Year Ended December 31, 1995
The Year Ended December 31, 1994 and
For the Period March 1, 1993 (Commencement of Operations)
To December 31, 1993
Portfolio of Investments 5
At June 30, 1996
Notes to the Financial Statements 6
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
ASSETS:
Investments, at value (Cost $206,853) (Notes 1 and 4) $ 243,087
Cash 12,673
Dividends Receivable 324
-------------
Total Assets 256,084
-------------
LIABILITIES:
Accrued Expenses 2,622
Payable for shares of beneficial interest redeemed 186
-------------
Total Liabilities 2,808
-------------
NET ASSETS $ 253,276
=============
NET ASSETS CONSIST OF:
Paid-in Capital $ 126,437
Undistributed realized gains on investments sold 91,453
Net unrealized appreciation of investment 36,234
Accumulated net investment loss (848)
-------------
Net Assets, at value $ 253,276
=============
Shares of beneficial interest outstanding 22,246
=============
Net Asset Value, Redemption Price and Offering
Price per share $ 11.39
==========
See notes to financial statements.
1
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
INVESTMENT INCOME:
Dividends $ 2,858
------------
Total Investment Income 2,858
------------
EXPENSES:
Management & administrative fees (Note 2) 465
Amortization of organization costs (Note 2) 10,345
Auditing fees 1,000
Fund accounting fees (Note 2) 387
Legal fees 130
Printing and mailing 800
Custody (Note 2) 1,060
Trustees' fees and expenses (Note 2) 11
Taxes and other 705
------------
Total Expenses 14,903
Fees waived by manager (Note 2) (11,197)
------------
NET EXPENSES: 3,706
------------
NET INVESTMENT INCOME: (848)
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investment transactions 14,007
Net change in unrealized appreciation on investments (829)
------------
NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS 13,178
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 12,330
============
See notes to financial statements.
2
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995
1996 1995
(UNAUDITED)
----------- -----------
FROM OPERATIONS:
Net investment loss $ (848) $ (19,207)
Net realized gain from investment
transactions 14,007 82,283
Net change in unrealized appreciation
of investments (829) 105,511
---------- ----------
Net increase in net assets resulting
from operations 12,330 168,587
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- 614
---------- ----------
FROM BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from sale of shares -- 7,379
Distributions reinvested -- 614
Cost of shares redeemed (92,103) (1,188,903)
---------- ----------
Decrease in net assets derived from
beneficial interest transactions (92,103) (1,180,910)
---------- ----------
Net decrease in net assets (79,773) (1,012,937)
NET ASSETS:
Beginning of period 333,049 1,345,986
---------- ----------
End of period $ 253,276 $ 333,049
========== ==========
See notes to financial statements.
3
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX MONTHS FOR THE YEAR FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED MARCH 1,
JUNE 30, DECEMBER 31, DECEMBER 31, 1993*** TO
1996 DECEMBER 31,
(UNAUDITED) 1995 1994 1994
------------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period $ 10.95 $ 9.23 $ 10.51 $ 10.00
--------- --------- --------- ---------
Net investment income (loss) # (0.03) (0.24) 0.44 0.33
Net gain on securities-realized and
unrealized 0.47 1.98 (0.67) 0.51
--------- --------- --------- ---------
Total from investment operations 0.44 1.74 (0.23) 0.84
--------- --------- --------- ---------
Less Distributions:
Distributions from net investment income -- 0.02 0.44 0.33
Distributions from net realized capital gains -- -- 0.61 0.00
--------- --------- --------- ---------
Total Distributions -- 0.02 1.05 0.33
--------- --------- --------- ---------
Net asset value, end of period $ 11.39 $ 10.95 $ 9.23 $ 10.51
--------- --------- --------- ---------
Total Return 4.02% ** 18.79% -2.15% 8.42% **
========= ========= ========= =========
Ratios and Supplemental Data
Total net assets, end of period (000's omitted) $ 253 $ 333 $ 1,346 $ 4,267
========= ========= ========= =========
Ratio of expenses to average net assets 2.39% * 4.25% 1.84% 0.42% **
Decrease reflected in above expense
ratio due to expense limitations 7.23% * 0.68% -- 3.15% **
Ratio of net investment income (loss) to
average net assets -0.55% * -2.32% 2.23% 4.89% **
Portfolio turnover rate 1.35% 5.68% 13.06% 19.79%
Average Commision Rate 0.0333 N/A N/A N/A
</TABLE>
* Annualized
** Not annualized
*** Commencement of operations
# Per share data numbers have been calculated using the average share method
See notes to financial statements.
4
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
PORTFOLIO OF INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
INVESTMENT IN SHARES OF OPEN-END MUTUAL FUNDS NUMBER OF
SHARES VALUE (NOTE 1)
--------- --------------
AIM Constellation Fund 954 $ 23,878
AIM Weingarten Fund 1,250 23,980
The Berger One Hundred Fund, Inc. 1,284 24,670
The Guardian Park Avenue Fund 671 24,295
Merrill Lynch Pacific Fund, Inc. Class A 1,025 25,039
New York Venture Fund, Inc. 1,549 24,285
Scudder Income Fund 1,844 24,319
United Income Fund 762 23,933
Vanguard Investment Grade Corporate Bond Fund 2,784 24,112
Vanguard Fixed Income GNMA Fund 2,443 24,576
----------
Total Investments (Cost $206,853)
(Notes 1 and 4) 96.0% 243,087
Other Assets Excess of Liabilities 4.0% 10,189
------ ----------
Net Assets 100.0% $ 253,276
====== ==========
See notes to financial statements.
5
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The GCG Trust, (the "Trust") is registered under the Investment
Company Act of 1940 (the "Act") as an open-end management company. The
Trust was organized as a Massachusetts business trust on August 3, 1988
with an unlimited number of shares of beneficial interest with a par
value of $0.001 each. At June 30, 1996, the Trust had fifteen
operational portfolios (the "Series"): The Fund For Life Series (the
"Fund"), Liquid Asset Series, Limited Maturity Bond Series, Natural
Resources Series, All-Growth Series, Real Estate Series, Fully Managed
Series, Multiple Allocation Series, Capital Appreciation Series, Rising
Dividends Series, Emerging Markets Series, Market Manager Series, Value
Equity Series, Strategic Equity Series and Small Cap Series. All of the
Series, including the Fund are diversified, except for Market Manager
Series. The information presented in this financial statements pertain
only to the fund. The financial information for the other Series of the
Trust is presented under separate cover.
The Fund serves as an investment medium for variable annuity
contracts offered by Golden American Life Insurance company ("Golden
American"). Golden American is a wholly-owned subsidiary of BT
Variable, Inc. ("BTV"), an indirect subsidiary of Bankers Trust Company
("Bankers Trust") (See Note 5).
The following is a summary of significant account policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted
accounting principals.
FEDERAL INCOME TAXES: No provision for federal income taxes has
been made since the Fund has complied and intends to continue to comply
with the provisions of the Internal Revenue code available to regulated
investment companies and to distribute its taxable income to
shareholders sufficiently to relieve it from substantially all federal
income taxes.
ORGANIZATIONAL EXPENSES: Directed Services, Inc. ("DSI"), a
wholly-owned subsidiary of BTV and the Fund's Manager and Administrator,
paid organizational expenses of approximately $114,000 on behalf of the
Fund. The Fund reimburses DSI in equal monthly installments over a
sixty month period from the Fund's commencement of operations. The
unpaid balance as of June 30, 1996 was approximately $39,855. It is
DSI's intention to continue to receive these equal installments but not
to seek reimbursement of any unpaid balances, if any, should the Fund
cease operations.
VALUATION: Investments in open-end mutual funds are valued at
their respective net asset value at the end of each day. net asset
values for these investments are supplied by market quotation services.
The net asset values supplied by these market quotation services are
calculated in accordance with the Act. Among other things, the Act
requires that mutual funds value the securities that they hold in their
portfolios at their current market value (generally the last reported
sales price of the security).
Other investments of the Fund, if any, are valued at their current
market value as determined by market quotations. Securities having 60
days or less remaining to maturity are valued at their amortized cost.
OTHER: Investment transactions are recorded on trade date.
Dividend income and distributions to the shareholders are recorded on
the ex-dividend date. Estimated expenses are accrued daily
6
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Realized gains and losses from investment transactions are
recorded on an identified cost basis which is the same basis the Fund
uses for federal income tax purposes.
2. MANAGEMENT AND ADMINISTRATIVE FEES, AND OTHER TRANSACTIONS WITH
AFFILIATES
DSI serves as manager and Administrator to the Fund. In its
capacity as Manager and Administrator DSI provides investment advisory
services and services reasonably necessary for the operation of the
Fund. Management and administrative fees are paid to DSI at annual
rates of 0.10% and 0.20%, respectively, of the value of the average
daily net assets of the Fund. For the six months ended June 30, 1996,
the Fund paid $155 and $310 in compensation for management and
administrative services respectively. The Fund also reimburses DSI for
certain organizational expenses paid by DSI on behalf of the Fund.
These reimbursements are described in Note 1 to the financial
statements.
DSI also provides accounting services to the Fund. For fund
accounting services, the Fund pays to DSI an annual fee of 0.25% of the
value of the average daily net assets of the Fund. For the six months
ended June 30, 1996 such fees amounted to $387. Pursuant to a custodian
agreement, Bankers Trust is custodian for the Fund. Fees paid to
Bankers Trust in connection with custodian services was $1,060 for the
six months ended June 30, 1996.
For the six months ended June 30, 1996, DSI voluntarily waived
$11,197 in various expenses.
Investors in the Fund should recognize that an investment in the
Fund bears not only a proportionate share of the expenses of the Fund
(including operating costs and management fees) but also indirectly
similar expenses of the underlying mutual funds in which the Fund
invests. Investors also bear their proportionate share of any sales
charges incurred by the Fund related to the purchase of shares of the
mutual fund investments. In addition, shareholders of the Fund may
indirectly bear expenses paid by a mutual fund in which the Fund invests
related to the distribution of the mutual fund's shares.
Certain officers and trustees of the Trust are also officers
and/or directors of DSI, BTV, Golden American and Bankers Trust.
7
<PAGE>
THE FUND FOR LIFE SERIES
OF
THE GCG TRUST
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
3. SHARES OF BENEFICIAL INTEREST
The Trust has an unlimited number of $0.001 par value shares of
beneficial interest authorized. For the six months ended June 30, 1996
and the year ended December 31, 1995, the Fund had the following
transactions in shares of beneficial interest. The Trust no longer
accepts investments I the Fund from new investors.
<TABLE>
<CAPTION>
1996 1995
------------------------ ------------------------
Shares Amount Shares Amount
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sold..................... 0 $ 0 719 $ 7,379
Distributions reinvested. 0 0 56 614
Redeemed................. (8,170) (92,103) (116,153) (1,188,903)
-------- ------------ -------- ------------
Net decrease............. (8,170) $ (92,103) (115,378) $ (1,180,910)
======== ============ ======== ============
</TABLE>
As of June 30, 1996, Golden American has an investment in the fund
of 1,151 shares with a total net asset value of $13,110 representing
5.17% of shares outstanding.
4. INVESTMENTS
At June 30, 1996, the cost of Investments, Unrealized Appreciation and
Depreciation, and Purchases and Sales of Investments were as follows:
Gross Unrealized Appreciation $ 36,234
Gross Unrealized Depreciation --
----------
Net Unrealized Appreciation $ 36,234
==========
Cost of Investment Securities for Federal
Income Tax Purposes $ 206,853
==========
PURCHASES AND SALES OF INVESTMENTS
Cost of Purchases $ 4,045
==========
Proceeds from Sales $ 71,883
==========
5. SUBSEQUENT EVENT
On August 13, 1996, Equitable of Iowa Companies acquired all of the
interest in BTV, Golden American and DSI from Whitewood Properties Corp,
a subsidiary of Bankers Trust Company.
8
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