AUL American Series Fund, Inc.
Semi-Annual Report
June 30, 1997
asxc
This report may be used as sales literature only when
accompanied or preceded by effective prospectuses
of AUL American Series Fund, Inc. and AUL American
Unit Trust or AUL American Individual Unit
Trust, which relate sales expense and other
pertinent information.
A Message
From
The Chairman of the Board
and President
The U.S. economy continued to astound investors during
the first half of 1997. After more than six years of steady
expansion, economic growth was still healthy and strong.
The unemployment rate declined to a 24 year low, yet
inflation remained calm. As a result, the Federal Reserve
Board tightened monetary policy only one time during the
six months by raising short term rates. Since then, the Fed
has been waiting patiently on the sidelines always on the
lookout for signs of inflationary pressures.
Despite a short term correction during March and April,
the stock market produced remarkable investment results
for the first half of 1997. However, major stock indices
were still dominated by the returns of large capitalization
companies, just like in 1996. As a result, valuations of
many of these large companies appeared excessive by
mid-year. Although small stock performance improved
during the second quarter, a divergence in investment
returns between large companies and small companies
still existed.
Bond market returns exceeded money market returns in
the first six months of 1997 but trailed far behind the
performance of most common stock indices. Mortgage-
backed securities and lower quality corporate bonds provided
the best returns for bond investors in the first half of 1997
while high quality, longer maturity Treasuries were the
poorest performers.
Bond yields moved higher in the first quarter in
reaction to the Federal Reserve Board's 25 basis
point increase in the Federal Funds target rate.
Interest rates at the end of June, however, were only
moderately higher than at the beginning of the year as
bond investors became convinced that inflation was
well under control.
Investment performance for the AUL American
Series Fund, Inc. for the first half of 1997 was:
Equity Portfolio 16.7%
Managed Portfolio 11.1%
Money Market Portfolio 2.4%
Tactical Asset Portfolio 7.2%
Bond Portfolio 2.7%
Although economic fundamentals are still positive
as we begin the second half of 1997, the speed and
magnitude of the current stock market advance is
worrisome. Whenever the stock market experiences
above average returns, it becomes much more
susceptible to negative surprises. As a result,
equity investors should be prepared for increased
volatility during the remainder of 1997.
Bond prices responded positively to the Federal
Reserve Board's decision in early July to leave the
Federal Funds target rate unchanged at 5.50%. Bond
returns for the remainder of the year, however, will
be highly dependent on investors remaining confident
that moderate economic growth and low inflation
will persist into 1998.
The performance numbers for the AUL American
Series Fund, Inc. are net of investment advisory
fees and other expenses paid by each portfolio
but do not reflect specified contract charges and
mortality and expense risk charges which may be
incurred when investing in a variable annuity contract.
James W. Murphy
Chairman of the Board of Directors and President
Indianapolis, Indiana
July 23, 1997
Directors and Officers of AUL American Series Fund, Inc.
James W. Murphy, Chairman of the Board and President
James P. Shanahan, Director, Vice President and Treasurer
Dr. Ronald D. Anderson, Director
Professor, School of Business
Indiana University, Indianapolis, Indiana
Dr. Leslie Lenkowsky, Director
Director, Hudson Institute
Indianapolis, Indiana
Richard A. Wacker, Secretary
AUL American Series Fund, Inc.
statementS of net assets
June 30, 1997
(unaudited)
Portfolio
Equity Money Market Bond Managed Tactical Asset
Assets:
Investments at value $ 65,099,095 $ 46,688,427 $ 31,315,119
$ 52,473,571 $ 3,495,528
(cost: $44,905,112, $46,688,427
$31,014,461, $42,540,117
and $3,140,817, respectively)
Receivable for shares sold, net 58,437
1,156
Receivable for investments sold 585,013
125,000
Dividends and interest receivable 99,181 97,455 465,992
346,333 25,765
Prepaid expense 404 404 404
404 404
Deferred organization costs
4,976
Total assets 65,198,680 46,844,723 32,366,528
52,820,308 3,652,829
Liabilities:
Distributions payable to AUL 23,081
2,901
Distributions payable to Dean
2,901
Payable for portfolio shares
redeemed, net 35,110 20,706
42,737
Payable for investments purchased 1,740,109
1,330,672 208,313
Investment advisory fees payable 27,011 19,730 12,888
21,488 549
Accrued expenses 16,490 14,850 6,493
14,166 1,135
Organization costs payable to AUL
6,441
Total liabilities 101,692 34,580 1,780,196
1,409,063 222,240
Net Assets $ 65,096,988 $ 46,810,143 $ 30,586,332
$ 51,411,245 $ 3,430,589
Shares outstanding 3,375,990 46,810,143 2,869,118
3,508,522 276,944
Net Asset Value per share $ 19.28 $ 1.00 $ 10.66
$ 14.65 $ 12.39
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
statementS of operations
For the six months ended June 30, 1997
(unaudited)
Portfolio
Equity Money Market Bond Managed Tactical Asset
Investment Income:
Income:
Dividends $ 445,550 $ $
$ 182,188 $ 10,402
Interest 177,560 1,192,358 844,698
737,877 36,633
623,110 1,192,358 844,698
920,065 47,035
Expenses:
Investment advisory fee 141,004 108,577 72,150
115,779 10,339
Custodian and service agent fee 31,643 24,295 16,415
26,570 3,741
Professional fees 2,647 2,040 1,373
2,189 4,871
Amortization of deferred
organization costs
798
Director fees 3,135 2,419 1,629
2,593 150
Other expenses 9,376 7,427 5,129
7,855 978
187,805 144,758 96,696
154,986 20,877
Net investment income 435,305 1,047,600 748,002
765,079 26,158
Gain on Investments:
Net realized gain 48,588 389,747
360,782 53,483
Net unrealized gain (loss) 8,515,887 (343,207)
3,888,794 121,868
Net gain (loss) 8,564,475 46,540
4,249,576 175,351
Net Increase (Decrease) in
Net Assets from Operations $ 8,999,780 $ 1,047,600 $ 794,542
$ 5,014,655 $ 201,509
The accompanying notes are an integral part of the financial statement.
AUL American Series Fund, Inc.
statementS of changes in net assets
for the six months ended June 30, 1997 and 1996
(unaudited)
Portfolio
Equity Money Market
1997 1996 1997 1996
Increase (Decrease) in Net Assets
from Operations:
Net investment income $ 435,305 $ 349,081 $ 1,047,600
$ 689,254
Net realized gain 48,588 89,158
Net change in unrealized gain (loss) 8,515,887 2,656,936
Increase (Decrease) in Assets
from Operations 8,999,780 3,095,175 1,047,600
689,254
Dividends and Distributions:
From net investment income (446,514) (354,439) (1,047,600)
(689,254)
From net realized gain
Decrease (446,514) (354,439) (1,047,600)
(689,254)
Shareholder Transactions:
Proceeds from shares sold 10,062,324 7,478,373 38,034,757
51,889,887
Reinvested distributions 404,592 313,769 1,047,600
689,254
Cost of shares redeemed (4,575,300) (3,172,423) (32,499,689)
(43,521,357)
Increase 5,891,616 4,619,719 6,582,668
9,057,784
Net increase 14,444,882 7,360,455 6,582,668
9,057,784
Net Assets at beginning of year 50,652,106 35,299,525 40,227,475
24,290,006
Net Assets at end of period $ 65,096,988 $ 42,659,980
$ 46,810,143 $ 33,347,790
Shares sold 568,980 502,186 38,034,757
51,889,887
Reinvested distributions 22,262 20,908 1,047,600
689,254
Shares redeemed (258,241) (213,172) (32,499,689)
(43,521,357)
Net Increase 333,001 309,922 6,582,668
9,057,784
Shares outstanding at beginning of year 3,042,989 2,483,962
40,227,475 24,290,006
Shares outstanding at end of period 3,375,990 2,793,884
46,810,143 33,347,790
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
statementS of changes in net assets (continued)
for the six months ended June 30, 1997 and 1996
(unaudited)
Portfolio
Bond Managed
1997 1996 1997 1996
Increase (Decrease) in Net Assets
from Operations:
Net investment income $ 748,002 $ 783,254
$ 765,079 $ 575,415
Net realized gain 389,747 74,491
360,782 241,384
Net change in unrealized gain (loss) (343,207) (1,488,532)
3,888,794 495,368
Increase (Decrease) in Assets
from Operations 794,542 (630,787)
5,014,655 1,312,167
Dividends and Distributions:
From net investment income (747,222) (784,179)
(770,402) (577,999)
From net realized gain
Decrease (747,222) (784,179)
(770,402) (577,999)
Shareholder Transactions:
Proceeds from shares sold 5,475,368 8,249,299
6,869,257 7,725,067
Reinvested distributions 747,222 662,085
770,402 554,986
Cost of shares redeemed (3,871,458) (5,803,467)
(3,564,284) (3,973,429)
Increase 2,351,132 3,107,917
4,075,375 4,306,624
Net increase 2,398,452 1,692,951
8,319,628 5,040,792
Net Assets at beginning of year 28,187,880
25,429,165 43,091,617 30,844,602
Net Assets at end of period $ 30,586,332 $ 27,122,116
$ 51,411,245 $ 35,885,394
Shares sold 513,034 768,123
494,682 612,587
Reinvested distributions 70,570 62,691
54,763 44,070
Shares redeemed (362,575) (546,161)
(256,112) (313,950)
Net Increase 221,029 284,653
293,333 342,707
Shares outstanding at beginning of year 2,648,089
2,298,581 3,215,189 2,484,037
Shares outstanding at end of period 2,869,118 2,583,234
3,508,522 2,826,744
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
statementS of changes in net assets (continued)
for the six months ended June 30, 1997 and 1996
(unaudited)
Portfolio
Tactical Asset
1997 1996
Increase (Decrease in Net Assets
from Operations:
Net investment income $ 26,158 $ 19,298
Net realized gain 53,483 9,417
Net change in unrealized gain (loss) 121,868 24,121
Increase (Decrease) in Assets
from Operations 201,509 52,836
Dividends and Distributions:
From net investment income (26,153) (18,864)
From net realized gain
Decrease (26,153) (18,864)
Shareholder Transactions:
Proceeds from shares sold 1,175,167 599,123
Reinvested distributions 16,221 5,799
Cost of shares redeemed (81,028) (20,485)
Increase 1,110,360 584,437
Net increase 1,285,716 618,409
Net Assets at beginning of year 2,144,873 1,139,456
Net Assets at end of period $ 3,430,589 $ 1,757,865
Shares sold 98,412 55,008
Reinvested distributions 1,348 538
Shares redeemed (6,862) (1,877)
Net Increase 92,898 53,669
Shares outstanding at beginning of year 184,046 109,147
Shares outstanding at end of period 276,944 162,816
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
equity portfolio
June 30, 1997
(unaudited)
Market Market
Description Shares Value Description Shares Value
Common Stock (87.4%)
Aerospace (2.3%)
Boeing Co. 17,000 $ 902,062
Precision Castparts Corp. 10,300 614,138
1,516,200
Banks & Financial (11.2%)
American Express Co. 21,300 1,586,850
Banc One Corp. 33,530 1,624,109
Great Western Financial 33,100 1,779,125
Ohio Casualty Corp. 21,600 950,400
Salomon, Inc. 24,700 1,373,938
7,314,422
Broadcasting & Publishing (8.7%)
Chris-Craft Industries, Inc.* 22,371 1,079,400
Deluxe Corp. 28,500 972,563
Gibson Greetings, Inc. 39,500 888,750
Harland (John H.) Co. 34,600 789,313
Meredith Corp. 30,200 875,800
Moore Corp., Ltd. 54,700 1,076,906
5,682,732
Chemicals (1.5%)
Carlisle Companies, Inc. 18,500 645,188
Quaker Chemical Corp. 19,800 344,025
989,213
Electrical Equipment &
Electronics (7.3%)
Baldor Electric Co. 63,910 1,889,339
Dynatech Corp.* 55,500 1,984,125
General Electric Co. 13,800 902,175
4,775,639
Entertainment & Leisure (4.8%)
CPI Corp. 66,500 1,396,500
Fleetwood Enterprises, Inc. 57,500 1,714,219
3,110,719
Furniture and Apparel (13.8%)
Hillenbrand Industries, Inc. 34,900 1,657,750
Kellwood Co. 46,000 1,276,500
La Z Boy Chair Co. 44,900 1,616,400
Liz Claiborne, Inc. 39,400 1,837,025
Oshkosh BGosh, Inc. 39,700 863,475
Class A
Reebok International 36,400 1,708,525
8,959,675
Health Care (7.2%)
Acuson Corp.* 36,500 $ 839,500
Guidant Corp. 3,400 289,000
Lilly (Eli) & Co. 6,770 740,046
Merck & Co. 10,400 1,076,400
McKesson Corporation 22,500 1,743,750
4,688,696
Information Processing &
Telecommunications (8.4%)
AT & T Corp. 36,320 582,037
International Business 14,300 1,289,681
Machines Corp.
Novell, Inc.* 62,500 433,594
Sun Microsystems, Inc.* 48,100 1,790,222
Telxon Corp. 77,900 1,402,200
5,497,734
Merchandising (5.7%)
Longs Drug Stores Corp. 54,800 1,435,075
Mac Frugals Bargains 8,500 231,625
Close-outs, Inc.
Mercantile Stores Co. 18,600 1,170,638
Stanhome, Inc. 26,200 861,325
3,698,663
Metals & Mining (2.6%)
Aluminum Company of 18,800 1,417,050
America
Oregon Steel Mills, Inc. 14,800 295,075
1,712,125
Oil & Oil Services (4.3%)
Royal Dutch Petroleum Co. 20,400 1,109,250
Valero Energy Corp. 46,200 1,674,750
2,784,000
Transportation (3.6%)
Alexander & Baldwin, Inc. 45,600 1,191,300
Norfolk Southern Corp. 11,400 1,148,550
2,339,850
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
equity portfolio (continued)
June 30, 1997
(unaudited)
Market
Description Shares Value
Common Stock (87.4%), continued
Miscellaneous (6.0%)
Ford Motor Co. 35,700 $ 1,347,674
Kelly Services, Inc. 44,000 1,380,500
Michael Foods, Inc. 49,300 912,050
Sealright, Inc. 17,100 205,200
3,845,424
Total common stock (cost: $36,720,712) 56,915,092
Interest Maturity Principal
Rate Date Amount
Short-term Notes (4.6%)
Associates Corporation 5.290% 07/18/97 $ 2,000,000 1,994,460
GE Capital 5.380% 07/11/97 1,000,000
998,310
Total short-term notes (cost: $2,993,167) 2,992,770
Shares
Money Market Mutual Funds (3.9%)
Merrill Lynch Institutional Fund 2,515,469
2,515,469
Total mutual funds (cost: $2,515,469) 2,515,469
Cash and Cash Equivalents (4.1%)
BONY Cash Reserve 2,675,764
Total Cash & Cash Equivalents (cost: $2,675,764) 2,675,764
Total Investments (cost: $44,905,112) $ 65,099,095
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
SCHEDULE of investments
money market portfolio
June 30, 1997
(unaudited)
Interest Maturity Principal Market
Description Rate Date Amount Value
Short-term Notes (90.7%)
U.S. Government & Agency Obligations (53.2%)
Federal Home Loan Bank Notes 5.470% 07/03/97 $ 2,000,000
$ 1,999,392
Federal Home Loan Bank Notes 5.510% 07/31/97 3,500,000
3,483,929
Federal Mortgage Corporation Notes 5.410% 09/25/97 5,500,000
5,428,919
Federal National Mortgage Association Notes 5.420% 07/18/97
4,000,000 3,989,781
Federal National Mortgage Association Notes 5.410% 08/26/97
7,000,000 6,941,091
Federal National Mortgage Association Notes 5.480% 07/16/97
3,000,000 2,993,150
Total short-term notes (cost: $24,836,262) 24,836,262
Corporate Obligations (37.5%)
Automotive (4.3%)
Ford Motor Credit Corporation 5.601% 07/21/97 2,000,000
2,000,000
Electrical Equipment (9.9%)
General Electric Capital Services Corporation 5.593% 07/11/97
2,300,000 2,300,000
General Electric Capital Corporation 5.596% 07/14/97 2,300,000
2,300,000
Financial (14.1%)
Associates Corporation of N.A. 5.528% 07/07/97 2,200,000
2,200,000
Norwest Financial Corporation 5.555% 07/09/97 2,200,000
2,200,000
Prudential Funding Corporation 5.634% 07/08/97 2,200,000
2,200,000
Machinery (4.9%)
John Deere Capital Corporation 5.566% 07/25/97 2,300,000
2,300,000
Oil and Gas (4.3%)
Chevron Oil Finance Company 5.474% 07/02/97 2,000,000
2,000,000
Total corporate obligations (cost: $17,500,000)
17,500,000
Shares
Money Market Mutual Funds(8.2%)
Dreyfus Masternote Account 1,861,357 1,861,357
Merrill Lynch Institutional Fund 1,978,295 1,978,295
Total money market mutual funds (cost: $3,839,652) 3,839,652
Cash & Cash Equivalents (1.1%)
BONY Cash Reserve 512,513
Total Cash & Cash Equivalents (cost: $512,513) 512,513
Total Investments (cost: $46,688,427) $ 46,688,427
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
bond portfolio
June 30, 1997
(unaudited)
Interest Maturity Principal Market
Description Rate Date Amount Value
Long-term Notes and Bonds (88.5%)
U.S. Government & Agency Obligations (26.0%)
Federal Home Loan Bank Notes 8.375% 10/25/99 $ 1,300,000
$ 1,359,371
Federal Home Loan Bank Notes 5.040% 8/20/98 750,000
742,230
U.S. Treasury Notes 8.000% 5/15/01 500,000 527,830
U.S. Treasury Notes 7.250% 8/15/04 1,700,000 1,770,499
U.S. Treasury Notes 8.875% 2/15/99 1,450,000 1,512,234
U.S. Treasury Notes 6.125% 8/31/98 800,000 802,080
U.S. Treasury Notes 6.750% 4/30/00 1,400,000 1,417,682
8,131,926
Collateralized Mortgage Obligations (29.3%)
American Southwest Financial Corporation 60D CMO 8.900% 3/01/18
186,830 193,380
Federal National Mortgage Association CMO 7.500% 12/25/09
600,000 592,032
Federal National Mortgage Association CMO 6.500% 5/25/08
800,000 789,704
GNMA Pass-Through 8.000% 6/01/27 1,700,000
1,739,321
GNMA Pass-Through 7.000% 5/15/26 254,633
250,180
GNMA Pass-Through 7.000% 1/15/27 3,016,766
2,963,158
Green Tree CMO 7.290% 3/15/28 1,200,000
1,178,813
Merrill Lynch Trust 37D CMO 8.150% 11/01/18 720,000
745,589
Prudential-Bache Trust 12D CMO 5.350% 10/20/09 740,432
735,500
9,187,677
Corporate Obligations (33.2%)
Agrium, Inc. Debentures 7.700% 2/01/17 1,150,000
1,144,250
Allstate Corporation Notes 5.875% 6/15/98 625,000
624,713
Associates Corporation of North America Notes 5.600% 1/15/01
1,600,000 1,546,000
Carlisle Companies, Inc. Notes 7.250% 1/15/07
950,000 946,438
El Paso Natural Gas Company Notes 7.750% 1/15/02
200,000 206,000
General Motors Acceptance Corporation Notes 5.450% 3/01/99
1,000,000 987,500
Hydro-Quebec Debentures 8.050% 7/07/24 400,000
433,000
Eli Lilly & Company Notes 8.375% 12/01/06 850,000
931,812
NRG Energy, Inc. Notes 7.500% 6/15/07 450,000
446,625
Service Corp. International Notes 6.750% 6/01/01 900,000
896,625
Smith Barney Holdings Notes 6.625% 11/15/03 900,000
877,500
US West Capital Funding Debentures 7.900% 2/01/27
1,350,000 1,361,812
10,402,275
Total long-term notes and bonds (cost: $27,420,999)
27,721,878
Short-term Notes and Bonds(4.8%)
General Electric Capital Corporation 5.550% 7/21/97
1,500,000 1,495,155
Total short-term notes and bonds (cost: $1,495,376) 1,495,155
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
bond portfolio
June 30, 1997
(unaudited)
Market
Description Shares Value
Money Market Mutual Funds (3.4%)
Merrill Lynch Institutional Fund 1,063,919
$ 1,063,919
Total mutual funds (cost: $1,063,919)
1,063,919
Cash & Cash Equivalents (3.3%)
BONY Cash Reserve 1,034,167
Total Cash & Cash Equivalents (cost: $1,034,167) 1,034,167
Total Investments (cost: $31,014,461)
$ 31,315,119
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
managed portfolio
June 30, 1997
(unaudited)
Market Market
Description Shares Value Description Shares Value
Common Stock (53.3%)
Aerospace (1.4%)
Boeing Co. 8,200 $ 435,112
Precision Castparts Corp. 5,100 304,088
739,200
Banks & Financial (6.9%)
American Express Co. 10,300 767,350
Banc One Corp. 16,350 791,953
Great Western Financial 17,300 929,875
Ohio Casualty Corp. 9,900 435,600
Salomon, Inc. 12,100 673,063
3,597,841
Broadcasting & Publishing (5.5%)
Chris-Craft Industries, Inc.* 10,929 527,324
Deluxe Corp. 15,000 511,875
Gibson Greetings, Inc. 19,000 427,500
Harland (John H.) Co. 16,900 385,531
Meredith Corp. 14,900 432,100
Moore Corp., Ltd. 26,600 523,688
2,808,018
Chemicals (0.9%)
Carlisle Companies, Inc. 9,000 313,875
Quaker Chemical Corp. 7,800 135,525
449,400
Electrical Equipment &
Electronics (4.5%)
Baldor Electric Co. 30,950 914,959
Dynatech Corp.* 28,300 1,011,725
General Electric Co. 7,000 457,625
2,384,309
Entertainment & Leisure (2.9%)
CPI Corp. 33,100 695,100
Fleetwood Enterprises 28,100 837,731
1,532,831
Furniture and Apparel (8.4%)
Hillenbrand Industries, Inc. 17,100 812,250
Kellwood Co. 22,600 627,150
La Z Boy Chair Co. 21,900 788,400
Liz Claiborne, Inc. 19,500 909,188
Oshkosh BGosh, Inc. 20,400 443,700
Class A
Reebok International 18,000 844,875
4,425,563
Health Care (4.4%)
Acuson Corp.* 17,800 $ 409,400
Guidant Corp. 1,700 144,500
Lilly (Eli) & Co. 3,252 355,484
Merck & Co. 5,200 538,200
McKesson Corporation 10,900 844,750
2,292,334
Information Processing &
Telecommunications (5.1%)
AT & T Corporation 8,100 284,006
International Business 7,000 631,313
Machines Corp.
Novell, Inc.* 30,200 209,512
Sun Microsystems, Inc.* 23,500 874,641
Telxon Corp. 37,400 673,200
2,672,672
Merchandising (3.5%)
Longs Drug Stores Corp. 26,400 691,350
Mac Frugals Bargains 4,200 114,450
Close-outs, Inc.
Mercantile Stores Co. 9,300 585,319
Stanhome 13,500 443,812
1,834,931
Metals & Mining (1.6%)
Aluminum Company of 9,200 693,450
America
Oregon Steel Mills, Inc. 8,000 159,500
852,950
Oil & Oil Services (2.6%)
Royal Dutch Petroleum Co. 10,000 543,750
Valero Energy Corp. 22,300 808,375
1,352,125
Transportation (2.2%)
Alexander & Baldwin, Inc. 22,400 585,200
Norfolk Southern Corp. 5,700 574,275
1,159,475
Miscellaneous (3.4%)
Ford Motor Co. 17,500 660,625
Kelly Services, Inc. 21,300 668,288
Michael Foods, Inc. 23,400 432,900
Sealright, Inc. 7,300 87,600
1,849,413
Total common stock (cost: $18,093,763) 27,951,062
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
managed portfolio (continued)
June 30, 1997
(unaudited)
Interest Maturity Principal Market
Description Rate Date Amount Value
Notes and Bonds (38.0%)
U.S. Government and Agency Obligations (14.1%)
Federal Home Loan Bank Notes 8.600% 6/25/99
$ 500,000 $ 521,960
Federal Home Loan Bank Notes 8.375% 10/25/99
900,000 941,103
Federal Home Loan Banks Notes 5.040% 8/20/98
250,000 247,410
Federal National Mortgage Association Notes 8.350%
11/10/99 500,000 522,960
U.S. Treasury Notes 8.000% 5/15/01 800,000
844,528
U.S. Treasury Notes 7.250% 8/15/04 800,000
833,176
U.S. Tresaury Notes 8.875% 2/15/99 850,000
886,482
U.S. Treasury Notes 6.125% 8/31/98 900,000
902,340
U.S. Treasury Notes 6.750% 4/30/00 1,700,000
1,721,471
7,421,430
Collateralized Mortgage Obligations (12.4%)
Federal National Mortgage Association CMO 6.500%
5/25/08 500,000 493,565
GNMA Pass-Through 8.000% 6/01/27
1,300,000 1,330,069
GNMA Pass-Through 6.500% 5/15/26
392,084 375,162
GNMA Pass-Through 6.500% 1/15/26
221,078 211,576
GNMA Pass-Through 6.500% 4/15/26
598,350 573,159
GNMA Pass-Through 6.500% 3/15/26
282,179 270,277
GNMA Pass-Through 7.000% 1/15/27
2,009,972 1,974,275
GNMA Pass-Through 7.000% 5/15/26
502,716 493,823
Green Tree CMO 7.290% 3/15/28
800,000
785,875
6,507,781
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
managed portfolio (continued)
June 30, 1997
(unaudited)
Interest Maturity Principal Market
Description Rate Date Amount Value
Notes and Bonds (38.0%) continued
Corporate Obligations (11.5%)
Agrium, Inc. Debentures 7.700% 2/01/17
$ 700,000 $ 696,500
Allstate Corporation Notes 5.875% 6/15/98
250,000 249,885
Associates Corporation of North America Notes 5.600%
1/15/01 400,000 386,500
Carlisle Companies, Inc. Notes 7.250% 1/15/07
550,000 547,938
El Paso Natural Gas Company Notes 7.750% 1/15/02
100,000 103,000
General Motors Acceptance Corporation Notes 5.450%
3/01/99 800,000 790,000
Hydro-Quebec Debentures 8.050% 7/07/24
250,000 270,625
Eli Lilly & Company Notes 8.375% 12/01/06
450,000 493,312
NRG Energy, Inc. Notes 7.500% 6/15/07
300,000 297,750
Service Corp. International Notes 6.750% 6/01/01
700,000 697,375
Smith Barney Holdings Notes 6.625% 11/15/03
600,000 585,000
US West Capital Funding Debentures 7.900% 2/01/27
900,000 907,875
6,025,760
Total notes and bonds (cost: $19,878,816) 19,954,971
Shares
Money Market Mutual Funds (6.4%)
Merrill Lynch Institutional Funds 3,354,900
3,354,900
Total money market mutual funds (cost: $3,354,900)
3,354,900
Cash & Cash Equivalents (2.3%)
BONY Cash Reserve
1,212,638
Total Cash & Cash Equivalents (cost: $1,212,638)
1,212,638
Total Investments (cost: $42,540,117)
$ 52,473,571
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
tactical asset portfolio
June 30, 1997
(unaudited)
Market Market
Description Shares Value Description Shares Value
Common Stock (58.1%)
Automotive & Truck (3.2%)
Chrysler Corp. 2,000 $ 65,625
Ford Motor Co. 1,200 45,300
110,925
Bank & Financial (16.8%)
AFLAC, Inc. 1,500 70,875
AMBAC, Inc. 800 61,100
Chase Manhattan Corp. 300 29,119
Countrywide Credit Ind. 1,000 31,188
Fannie Mae 1,500 65,438
Federal Home Loan 800 27,500
Mortgage Corp.
Green Tree Financial Corp. 2,500 89,062
Lawyers Title Corp. 1,500 28,312
Lehman Brothers Holding, Inc. 1,000 40,500
MGIC Investment Corp. 800 38,350
United Assistance 1,500 42,469
Management Corp.
PMI Group, Inc. 1,000 62,375
586,288
Information Processing &
Telecommunications (19.8%)
360 Communications Co. 4,000 68,500
Applied Materials, Inc. 1,000 70,812
Arrow Electronics, Inc. 700 37,188
AT & T Corp. 1,600 56,100
Cabletron Systems, Inc. 2,500 70,781
Cox Communications, Inc. 2,000 48,000
Digi International, Inc. 3,000 30,375
ECI Telecommunications 2,000 59,500
Limited Designs
Intel Corp. 400 56,725
MEMC Electronic 1,000 32,750
Materials, Inc.
Phillips Electronics NV 200 14,375
Seagate Technology, Inc. 2,000 70,375
Sprint Corp. 800 42,100
Zilog, Inc. 2,000 38,000
695,581
Manufactured Housing (2.7%)
Clayton Homes, Inc. 4,000 $ 57,000
Oakwood Homes Corp. 1,500 36,000
93,000
Merchandising (4.8%)
Fingerhut Companies, Inc. 1,500 26,156
Payless Shoesource, Inc. 1,264 69,125
TJX Companies, Inc. 1,400 36,925
Toys R US 1,000 35,000
167,206
Metals & Mining (4.3%)
Alumax, Inc. 1,000 37,938
Aluminum Co. of America 400 30,150
Birmingham Steel Corp. 1,400 21,700
Potash Corp. of Saskatchewan 800 60,050
149,838
Miscellaneous (6.5%)
Comair Holdings, Inc. 2,000 55,375
Dow Chemical Co. 400 34,850
Philip Morris Cos., Inc. 1,000 44,375
R.P. Scherer Corp. 1,000 51,625
Trizec Hahn Corp. 2,000 42,750
228,975
Total common stock (cost: $1,669,252) 2,031,813
Preferred Stock (0.9%)
News Corp. LTD 2,000 31,250
Total preferred stock (cost: $35,535) 31,250
*does not pay cash dividends
The accompanying notes are an integral part of the financial statements.
AUL American Series Fund, Inc.
schedule of investments
tactical asset portfolio (continued)
June 30, 1997
(unaudited)
Interest Maturity Principal Market
Description Rate Date Amount Value
Notes and Bonds (40.3%)
Long-term Notes and Bonds (32.7%)
Federal Home Loan Mortgage Corp. Note * 1/21/03
$ 100,000
$ 68,449
Federal National Mortgage Association Note 7.760%
8/02/06
100,000 101,554
U.S. Treasury Note 6.000% 10/15/99 100,000
99,820
U.S. Treasury Note 5.500% 4/15/00 100,000
98,150
U.S. Treasury Note 5.250% 7/31/98 100,000
99,397
U.S. Treasury Note 5.750% 8/15/03 100,000
96,533
U.S. Treasury Note 6.375% 1/15/00 100,000
100,493
U.S. Treasury Note 6.125% 12/31/01 100,000
98,952
U.S. Treasury Note 6.375% 3/31/10 150,000
150,153
U.S. Treasury Note 6.375% 10/15/99 100,000
99,948
U.S. Treasury Note 7.500% 11/15/01 125,000
130,219
Short-term Notes and Bonds (7.6%)
Grainger 5.600% 7/01/97 125,000
124,980
Riverside Fund 5.850% 7/08/97 140,000
139,828
Total notes and bonds (cost: $1,412,041)
1,408,476
Cash & Cash Equivalents (0.7%)
BONY Cash Reserve 23,989
Total Cash & Cash Equivalents (cost: $23,989)
23,989
Total Investments (cost: $3,140,817)
$ 3,495,528
*Zero coupon note.
The accompanying notes are an integral part of the financial statements.
notes to financial statements
1. Summary of Significant Accounting Policies
The AUL American Series Fund, Inc. (Fund) was
incorporated under the laws of Maryland on July 26, 1989,
and is registered under the Investment Company Act of 1940,
as amended, as an open-end, diversified management
investment company. As a series type of mutual fund,
the Fund issues shares of common stock relating to separate
investment portfolios consisting of the Equity Portfolio,
Money Market Portfolio, Bond Portfolio, Managed
Portfolio, and Tactical Asset Allocation Portfolio
(Tactical Asset). Currently, the Fund offers shares
only to separate accounts of American United Life
Insurance Company (AUL) to serve as an underlying
investment vehicle for variable annuity contracts. The
Fund commenced operations on
April 10, 1990.
Investments
Securities traded on a national securities exchange are
valued at the last trade price. Listed securities for
which no sale was reported on the valuation date are
valued at the latest bid price. Short-term notes are valued
at amortized cost which approximates market value.
Fixed income securities for which representative market
quotes are readily available are valued at the latest bid
price as quoted by one or more dealers who make a
market in such securities. U.S. Government
obligations are valued at the latest bid price;
however, such obligations maturing in 60 days
or less are valued at amortized cost which
approximates market value.
The Money Market Portfolio securities are
valued at amortized cost. The Funds use of
the amortized cost method is conditioned on
its compliance with certain provisions of Rule
2a-7 of the Investment Company Act of 1940.
The Investment Manager reviews this method
of valuation to ensure that the portfolio securities
are reflected at their fair value.
Security transactions are recorded on the trade
date plus one. Realized gains and losses are
determined on specific identification basis.
Income and Expense
Dividend income is recorded on the ex-dividend
date, and interest income is accrued daily. Portfolio
expenses are recorded on an accrual basis.
Deferred Organization Costs
Expenses incurred by the Fund in connection with
its organization have been capitalized and are
amortized over five years on a straight-line basis.
Taxes
The fund qualifies as a regulated investment company
under section M of the Internal Revenue Code. The
Funds policy is to distribute all income to
shareholders, therefore, no provision has been made
for income taxes.
Dividend and Capital Gain Distributions
For the Money Market Portfolio, dividends from
net investment income are declared and paid daily.
For all other portfolios, dividends from net investment
income are declared and paid quarterly. Distributions
from net realized gains on investments are declared
and paid at least annually for all portfolios.
Estimates
The preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
2. Transactions with AUL
AUL invested $23,000,000 to establish the Fund.
As of June 30, 1997, AULs investment in the Fund is:
Equity Portfolio $ 3,091,634
Tactical Asset Portfolio 500,000
$ 3,591,634
The Fund has an investment advisory agreement with
AUL to act as its investment advisor. For its services,
AUL receives a fee at an annual rate of .50% of the
Portfolios average daily net assets. AUL has also
agreed that its fee may be reduced if the aggregate
ordinary operating expenses of the Portfolios exceed
1% of the average daily net assets during the year.
To the extent that AUL has reduced its advisory fees
to prevent the Portfolios aggregate ordinary operating
expenses from exceeding 1%, it may increase its
advisory fee during any of the next succeeding 5
years, provided that the aggregate ordinary operating
expenses in any given year do not exceed 1% of the
average daily net assets in that year. The total amount
of any increase in AULs fees will not exceed the
prior fee reduction. At June 30, 1997, the ordinary
operating expenses for the Tactical Asset Allocation
Portfolio exceeded 1% of the average daily net
assets on an annualized basis. In July 1997, AUL
s Investment advisory fee was reduced for
the excess.
notes to financial statements (continued)
2. Transactions with AUL, continued:
AUL may terminate the policy of reducing
its fee and/or assuming Fund expenses upon 30
days prior written notice to the Fund, and in any
event, the policy will automatically terminate if
the Investment Advisory Agreement is terminated.
The investment advisory fees incurred during the
six months ended June 30, 1997 and 1996,
were $447,850 and $326,316, respectively.
Certain directors of the Fund are officers of AUL.
3. Agreements with Banks
The Fund has agreements with The Bank
of New York (Bank) whereby the Bank serves
as custodian of the securities and other assets
of the Fund, and as the fund accountant.
4. Investment Transactions
Purchases and sales of investment securities
(excluding short-term securities and money market
mutual funds) during the six months ended June 30,
1997, were:
Portfolio
Equity Money Market Bond Managed Tactical Asset
Common Stock:
Purchases $ 4,404,289 $ $
$ 1,398,843 $ 1,182,097
Proceeds from sales 1,902,057
1,245,669 396,517
Corporate Bonds:
Purchases 5,975,596
3,834,059
Proceeds from sales 3,558,701
1,651,788
Government Bonds:
Purchases 13,148,796
11,572,172 613,237
Proceeds from sales 14,959,048
11,772,498
5. Authorized Capital Shares
The Fund has 125,000,000 authorized shares of $.001
par value capital stock, which includes 10,000,000
unallocated shares. The remaining shares are allocated
to each of the Funds portfolios as follows:
Equity Portfolio 10,000,000
Money Market Portfolio 50,000,000
Bond Portfolio 10,000,000
Managed Portfolio 20,000,000
Tactical Asset 25,000,000
115,000,000
6. Net Assets
Net Assets at June 30, 1997, are:
Portfolio
Equity Money Market Bond Managed Tactical Asset
Proceeds from shares sold
and reinvested distributions $ 65,329,094 $ 203,131,761
$ 56,210,722 $ 63,106,551 $ 3,200,600
Cost of shares redeemed (20,258,308) (156,321,618)
(26,320,044) (21,993,017) (178,319)
Undistributed net investment
income 643 5,249 3,475
114
Undistributed net realized
gain (168,424) 389,747
360,782 53,483
Unrealized gain 20,193,983
300,658 9,933,454 354,711
$ 65,096,988 $ 46,810,143 $ 30,586,332
$ 51,411,245 $ 3,430,589
notes to financial statements (continued)
7. Unrealized Gain (Loss)
Unrealized Gain (Loss) at June 30, 1997, is:
Portfolio
Equity Money Market Bond Managed Tactical Asset
Common Stock:
Appreciation $ 20,494,829 $ $
$ 10,008,462 $ 397,317
Depreciation (300,449)
(151,163) (39,042)
Notes and Bonds:
Appreciation 407,418
139,082 1,818
Depreciation (397) (106,760)
(62,927) (5,382)
$ 20,193,983 $ $ 300,658
$ 9,933,454 $ 354,711
8. Net Shareholders
Shares outstanding at June 30, 1997, are:
Portfolio
Equity Money Market Bond Managed Tactical Asset
AUL 309,609
50,001
Dean Investments
50,000
AUL American Unit Trust 1,452,735 6,121,141
725,738 1,445,016 651
AUL Group Retirement Annuity
Separate Account II 1,299,970 37,533,534
1,947,197 1,758,602 8
AUL American Individual
Unit Trust 313,676 3,155,468
196,183 304,904 176,284
3,375,990 46,810,143 2,869,118
3,508,522 276,944
financial HIGHLIGHTS
The per share amounts are based on shares outstanding
throughout the year.
Equity Portfolio
1997 1996 1995 1994 1993
Per Share Data:
Investment Income $ 0.19 $ 0.18 $ 0.18
$ 0.15 $ 0.14
Expense 0.06 0.05 0.04
0.05 0.05
Net investment income 0.13 0.13
0.14 0.10 0.09
Net gain (loss) on investments 2.64 1.06
1.22 (0.32) 0.43
Shareholder distributions:
Net investment income (0.14) (0.13)
(0.14) (0.10) (0.09)
Realized gain
Net increase (decrease) 2.63 1.06
1.22 (0.32) 0.43
Net asset value at
beginning of year 16.65 14.21 12.27
12.68 11.49
Net asset value at end of period $ 19.28 $ 15.27
$ 13.49 $ 12.36 $ 11.92
Ratio to average net assets:*
Expense .66% 0.70% 0.69%
0.78% 0.78%
Net investment income .76% 1.79%
2.27% 1.59% 1.57%
Total return*** 16.71% 8.40%
11.03% (1.80%) 4.60%
Portfolio turnover rate 9% 5%
3% 13% 1%
Average commission rate paid** $ 0.0713 $ 0.0670
N/A N/A N/A
Shares outstanding 3,375,990 2,793,884
2,180,956 1,212,617 740,087
*annualized
**computed by dividing the total amount of commission
paid by the total number of shares purchased and sold
during the period for which there was a commission.
This disclosure was required by the SEC beginning in 1996.
***Total returns for periods less than one year are not
annualized. Total return assumes reinvestment of
dividends and capital gain distributions, if any.
The accompanying notes are an integral part of the
financial statements.
FINANCIAL HIGHLIGHTS (continued)
The per share amounts are based on shares
outstanding throughout the year.
Money Market Portfolio
1997 1996 1995 1994 1993
Per Share Data:
Investment Income $ 0.03 $ 0.03 $ 0.04
$ 0.02 $ 0.02
Expense 0.01 0.01
0.01
Net investment income 0.03 0.03
0.03 0.01 0.01
Net gain (loss) on investments
Shareholder distributions:
Net investment income (0.03) (0.03)
(0.03) (0.01) (0.01)
Realized gain
Net increase (decrease)
Net asset value at
beginning of year 1.00 1.00 1.00
1.00 1.00
Net asset value at end of period $ 1.00 $ 1.00
$ 1.00 $ 1.00 $ 1.00
Ratio to average net assets:*
Expense .66% 0.68% 0.69%
0.81% 0.78%
Net investment income 2.39% 4.65%
5.22% 2.80% 2.32%
Total return*** 2.39% 2.26% 2.56%
1.36% 1.20%
Portfolio turnover rate
Average commission rate paid** $ N/A N/A
N/A N/A N/A
Shares outstanding 46,810,143 33,347,789
17,990,121 8,643,286 5,590,482
*annualized
**computed by dividing the total amount of commission
paid by the total number of shares purchased and sold
during the period for which there was a commission. This
disclosure was required by the SEC beginning in 1996.
***Total returns for periods less than one year are not
annualized. Total return assumes reinvestment of
dividends and capital gain distributions, if any.
The accompanying notes are an integral part of the
financial statements.
FINANCIAL HIGHLIGHTS (continued)
The per share amounts are based on shares outstanding
throughout the year.
Bond Portfolio
1997 1996 1995 1994 1993
Per Share Data:
Investment Income $ 0.31 $ 0.35 $ 0.38
$ 0.35 $ 0.38
Expense 0.04 0.04 0.04
0.04 0.04
Net investment income 0.27 0.31
0.34 0.31 0.34
Net gain (loss) on investments 0.01 (0.56)
0.74 (0.78) 0.48
Shareholder distributions:
Net investment income (0.27) (0.31)
(0.34) (0.31) (0.34)
Realized gain
Net increase (decrease) 0.01 (0.56)
0.74 (0.78) 0.48
Net asset value at
beginning of year 10.65 11.06 9.99
11.00 10.65
Net asset value at end of period $ 10.66 $ 10.50
$ 10.73 $ 10.22 $ 11.13
Ratio to average net assets:*
Expense .66% 0.70% 0.69%
0.77% 0.75%
Net investment income 2.57% 5.84%
6.50% 5.86% 6.21%
Total return*** 2.71% (2.26%)
10.79% (4.35%) 7.80%
Portfolio turnover rate 68% 42%
19% 18% 14%
Average commission rate paid** $ N/A N/A
N/A N/A N/A
Shares outstanding 2,869,118 2,583,234
2,228,719 1,676,873 1,156,033
*annualized
**computed by dividing the total amount of commission
paid by the total number of shares purchased and sold
during the period for which there was a commission.
This disclosure was required by the SEC beginning in 1996.
***Total returns for periods less than one year are
not annualized. Total return assumes reinvestment
of dividends and capital gain distributions, if any.
The accompanying notes are an integral part of the
financial statements.
FINANCIAL HIGHLIGHTS (continued)
The per share amounts are based on shares outstanding
throughout the year.
Managed Portfolio
1997 1996 1995 1994 1993
Per Share Data:
Investment Income $ 0.27 $ 0.26 $ 0.28
$ 0.24 $ 0.25
Expense 0.04 0.05 0.04
0.05 0.04
Net investment income 0.23 0.21
0.24 0.19 0.21
Net gain (loss) on investments 1.25 0.28
1.01 (0.60) 0.50
Shareholder distributions:
Net investment income (0.23) (0.21)
(0.24) (0.19) (0.21)
Realized gain
Net increase (decrease) 1.25 0.28
1.01 (0.60) 0.50
Net asset value at
beginning of year 13.40 12.42 11.00
11.75 10.92
Net asset value at end of period $ 14.65 $ 12.70
$ 12.01 $ 11.15 $ 11.42
Ratio to average net assets:*
Expense .66% 0.70% 0.69%
0.77% 0.76%
Net investment income 1.64% 3.38%
4.20% 3.34% 3.70%
Total return*** 11.09% 3.96%
11.43% (3.64%) 6.40%
Portfolio turnover rate 33% 28%
19% 13% 2%
Average commission rate paid** $ 0.0708 N/A
N/A N/A N/A
Shares outstanding 3,508,522 2,826,744
2,434,842 1,786,822 877,857
*annualized
**computed by dividing the total amount of commission
paid by the total number of shares purchased and sold
during the period for which there was a commission. This
disclosure was required by the SEC beginning in 1996.
***Total returns for periods less than one year are not
annualized. Total return assumes reinvestment of dividends
and capital gain distributions, if any.
The accompanying notes are an integral part of the
financial statements.
FINANCIAL HIGHLIGHTS (continued)
The per share amounts are based on shares
outstanding throughout the year.
Tactical Asset
1997 1996
Per Share Data:
Investment Income $ 0.20 $ 0.20
Expense 0.09 0.05
Net investment income 0.11 0.15
Net gain (loss) on investments 0.74 0.36
Shareholder distributions:
Net investment income (0.11) (0.15)
Realized gain
Net increase (decrease) 0.74 0.36
Net asset value at
beginning of year 11.65 10.44
Net asset value at end of period $ 12.39 $ 10.80
Ratio to average net assets:*
Expense 1.49% 1.00%
Net investment income 2.22% 2.74%
Total return*** 7.17% 4.64%
Portfolio turnover rate 16% 16%
Average commission rate paid** $ .0800 .0800
Shares outstanding 276,944 162,816
*annualized
**computed by dividing the total amount of commission
paid by the total number of shares purchased and sold
during the period for which there was a commission.
This disclosure was required by the SEC beginning in 1996.
***Total returns for periods less than one year are
not annualized. Total return assumes reinvestment
of dividends and capital gain distributions, if any.
The accompanying notes are an integral part of
the financial statements.
American United Life Insurance Company
P.O. Box 368
Indianapolis, Indiana 46206-0368
P-13959(7/97)
