<PAGE>
Semi-Annual Report
June 30, 1995
Landmark/SM/ VIP Funds
Landmark VIP U.S. Government Fund
Landmark VIP Balanced Fund
Landmark VIP Equity Fund
Landmark VIP International Equity Fund
We are pleased to present this semi-annual report for the Landmark VIP Funds.
The report covers the period between the Funds inception in March, 1995, and
June 30, 1995. During that time, the Funds investment adviser, Citibank, N.A.,
has been busy putting your variable annuity or variable life insurance assets to
work in order to help you reach your long-term financial goals.
CONTENTS
Portfolio Manager
The Portfolio Manager Responds
Portfolio of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Remember that Mutual Fund Shares:
. Are not bank deposits or FDIC insured
. Are not obligations of or guaranteed by Citibank or Citicorp
Investment Services
. Are subject to investment risks, including possible loss of the
principal amount invested
<PAGE>
Landmark VIP U.S. Government Fund
- --------------------------------------------------------------------------------
Portfolio Manager
Leon Farhi
Vice President, Citibank, N.A.
Leon Farhi is the manager of the Fund. Mr. Farhi also manages other U.S.
dollar, fixed income portfolios for institutional clients of Citibank.
Prior to joining Citibank in 1988, Mr. Farhi worked with Metropolitan Life
Insurance Company as a fixed income portfolio manager.
- --------------------------------------------------------------------------------
The Portfolio Manager Responds
The investment environment for U.S. government bonds was excellent during
the first half of 1995. Slower economic growth, low inflation and the
possibility that the Federal Reserve Board has finished raising short-term
interest rates have driven fixed-income prices higher. Since the Fund's
inception in March, we have responded to this positive environment by investing
virtually all of the Fund's assets in U.S. Treasury securities. While the Fund
can also invest in certain government-backed mortgage securities and sovereign
debt, we believe that U.S. Treasury securities offered better values during the
period.
The Landmark VIP U.S. Government Fund is managed to earn current income and
to preserve capital. To that end, we have maintained the Fund's average
duration, a measure of the portfolio's sensitivity to changes in interest rates,
at approximately seven years, which we consider a neutral position for this
portfolio. Part of our strategy is to actively manage the Fund's average
duration in order to capture competitive current yields while remaining flexible
enough to take advantage of higher yielding securities as they become available.
Because our forecast for the next six months currently calls for modestly
lower long-term interest rates, we may lengthen the Fund's average duration
somewhat to keep higher-yielding securities in the portfolio for as long as
possible as well as to create opportunities for capital gains. This stance
should put us in a good position to capture further gains if bond prices
continue to rise.
Landmark VIP Balanced Fund
- --------------------------------------------------------------------------------
Portfolio Managers
A. Dwight Hyde, Jr.
Vice President, Citibank, N.A.
Mr. Hyde is the manager for the equity portion of the Fund. He serves as
U.S. Chief Investment Officer for Citibank Global Asset Management and
personally manages over $2 billion of equity assets for Citibank. He also serves
as head of the Equity Strategy Committee and is a member of the Citibank
Investment Policy Committee. Mr. Hyde joined Citibank in 1980. He has also
served as Chief Investment Officer at Dean Witter Asset Management and Paribas
Asset Management.
Mark Lindbloom
Vice President, Citibank, N.A.
Mr. Lindbloom is the manager for the fixed income portion of the Fund. He
manages intermediate maturity fixed income portfolios for investment advisory
and institutional accounts at Citibank. Prior to joining Citibank in 1986, Mr.
Lindbloom was employed by Brown Brothers Harriman & Company, where he managed
discretionary corporate portfolios holding fixed income assets.
- --------------------------------------------------------------------------------
The Portfolio Managers Respond
The U.S. stock and bond markets both rose during the first six months of
1995 as many investors became convinced that the Federal Reserve has
successfully engineered a soft landing for the U.S. economy without causing
either a recession or an acceleration of inflation. In the stock market, good
economic news was reinforced by strong earnings reports from many corporations.
Because the Fund commenced operations in March, we were not able to participate
in the stock and bond market gains early in the year.
The Landmark VIP Balanced Fund is managed to earn high current income by
investing in a broad range of securities, to preserve capital, and to provide
growth potential with reduced risk. Consistent with this objective, the Fund's
assets currently are apportioned 50% to stocks and 50% to fixed-income
securities, including cash equivalents, reflecting our assessment of the
relative strengths of the two markets.
We found attractive opportunities in the equity markets, including energy
stocks that are expected to benefit from rising commodity prices and
restructuring activities. Other areas of focus include industries that should do
well in a slow-growth economic environment, such as transportation and
industrial services. We have under-emphasized industries that we expect to lag
the market, including utilities and finance.
In the bond market, we have focused on U.S. Treasury securities with an
average duration (a measure of the portfolios sensitivity to changes in interest
rates) of 4.5 years, which we consider a neutral stance for this portfolio. We
expect to further diversify the fixed-income portfolio over the next several
months with investments in government-backed mortgage securities and investment-
grade corporate bonds.
<PAGE>
Landmark VIP Equity Fund
- --------------------------------------------------------------------------------
Portfolio Manager
A. Dwight Hyde, Jr.
Vice President, Citibank, N.A.
Mr. Hyde is the manager of the Fund. Mr. Hyde's management experience is
described under the Landmark VIP Balanced Fund.
- --------------------------------------------------------------------------------
The Portfolio Manager Responds
Stocks rose during the first six months of 1995 as investors became
convinced that the Federal Reserve has successfully engineered a soft landing
for the U.S. economy without causing either a recession or an acceleration of
inflation. This good economic news was reinforced by strong earnings reports
from many corporations and a strong flow of assets into U.S. equities from money
market funds and international equities. Because the Fund commenced operations
in March, we were not able to participate in the stock market gains early in the
year.
The Landmark VIP Equity Fund seeks to provide long-term capital growth.
That is why the Fund's portfolio contains a core of long-term holdings in large-
capitalization stocks that are expected to provide healthy earnings growth. We
complement those core positions with economically sensitive stocks that we
expect to provide above-average gains as well as stocks that should respond
positively to prevailing market trends. We found attractive investment
opportunities in some energy stocks as well as industries that we expect to do
well in a slow-growth economic environment, such as transportation and
industrial services industries. We have under-emphasized industries that we
expect to lag the market, including utilities and finance.
Looking forward, we are becoming more cautious as attractive valuations
become harder to find. However, any pause in the markets advance should be
viewed as a buying opportunity that will enable investors to participate in the
long-term gains we believe are ahead.
Landmark VIP International Equity Fund
- --------------------------------------------------------------------------------
Portfolio Managers
Trevor Forbes
Vice President, Citibank, N.A.
Neil Robson
Vice President, Citibank, N.A.
Trevor Forbes and Neil Robson, who are based in Citibank's London office,
are the managers of the Fund. Mr. Forbes is the head of Citibank's International
Equity Department in London and the senior portfolio manager of global, non-U.S.
equity and European equity portfolios for institutional accounts. Before joining
Citibank in 1991, Mr. Forbes managed the investment business of Abbey Life.
Mr. Robson is a senior equity portfolio manager with responsibilities for
the Canadian and German equity markets who plays a key role in the general asset
allocation decisions regarding equity portfolios. Prior to joining Citibank in
1989, Mr. Robson was a portfolio manager in European equities for County
National Westminster Investment Management. The selection of specific securities
is made by committees of Citibank investment personnel specializing in
investments in the countries selected by Mr. Forbes and Mr. Robson.
- --------------------------------------------------------------------------------
The Portfolio Managers Respond
Overall, the international equity markets produced positive results during
the first half of 1995. But because the Fund commenced operations in March,
1995, we did not participate in the gains or losses experienced by overseas
markets early in the year.
As of June 30, approximately 80% of the Funds assets are invested in
international equities. More than half of the Funds assets are presently
allocated to companies in Europe, where shareholders should benefit from non-
inflationary economic growth. We expect Japan's market, which currently
comprises about one-quarter of the portfolio, to rebound as renewed economic
growth fuels higher corporate earnings. The remainder of the Fund's assets are
temporarily invested in cash equivalents as we wait for attractive opportunities
to arise in the Far East, where we believe political developments should create
a more positive environment for business and investment.
The Landmark VIP International Equity Fund is managed to provide long-term
capital growth. Our managers in London analyze economic and market trends to
allocate assets among local equity markets in developed nations. In turn,
Citibank professionals who live and work in those markets select individual
stocks after conducting extensive primary research. This approach enables us to
respond quickly to local investment opportunities, which is important as
economic conditions and financial risks vary widely from one market to another.
<PAGE>
Landmark VIP U.S. Government Fund
- --------------------------------------------------------------------------------
Portfolio of Investments June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Principal
Amount
Issuer (000 omitted) Value
- ------ ------------- -----
<S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -
United States Treasury Note
7.250% due 2/15/98............ $200 $206,562
United States Treasury Note
6.250% due 5/31/00............ 100 101,062
United States Treasury Note
7.875% due 11/15/04........... 200 222,750
United States Treasury Note
7.500% due 2/15/05............ 200 217,782
United States Treasury Note
7.500% due 11/15/24........... 170 188,090
--------
936,246
--------
<CAPTION>
Principal
Amount
Issuer (000 omitted) Value
- ------ ------------- -----
<S> <C> <C>
United States Treasury Bond
6.250%, due 8/15/23........... $ 50 $ 47,227
----------
Total Government Obligations
(Identified Cost $989,742) 983,473
----------
<CAPTION>
<S> <C> <C>
SHORT-TERM OBLIGATIONS -
Investors Cash Reserve 5.36%,
due 7/3/95..................... 16,405
----------
Total Investments
(Identified Cost $1,006,148) 98.4% 999,878
Other Assets Less Liabilities... 1.6 16,627
----- ----------
Net Assets...................... 100.0% $1,016,506
===== ==========
</TABLE>
See notes to financial statements
<PAGE>
Landmark VIP Balanced Fund
- --------------------------------------------------------------------------------
Portfolio of Investments June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
COMMON STOCKS -
Commercial Services - 1.0%
Sysco Corp................................ 400 $ 11,800
----------
Commodities -3.9%
Air Products & Chemicals Inc.............. 400 22,300
Scott Paper Co............................ 450 22,275
----------
44,575
----------
Consumer Durables - 2.7%
General Motors Corp....................... 300 14,063
Whirlpool Corp............................ 300 16,500
----------
30,563
----------
Consumer Non-Durables - 4.2%
PepsiCo Inc............................... 400 18,250
Philip Morris Comp Cos Inc................ 400 29,750
----------
48,000
----------
Consumer Services - 3.3%
Carnival Corp............................. 800 18,700
Times Mirror Company...................... 800 19,100
----------
37,800
----------
Electronics/Technological Services - 5.3%
Computer Associates Intl. Inc............. 300 20,325
General Motors Corp. Class "E"............ 500 21,750
Hewlett-Packard Inc....................... 250 18,625
----------
60,700
----------
Energy Minerals - 7.0%
Amoco Corp................................ 400 26,650
Exxon Corp................................ 400 28,250
Royal Dutch Petroleum Co. ADRs............ 200 24,374
----------
79,274
----------
Finance - 4.4%
BankAmerica Corp.......................... 250 13,156
Federal National Mortgage Association..... 200 18,875
State Street Boston Corp.................. 500 18,438
----------
50,469
----------
Health Services/Technology - 3.7%
Johnson & Johnson......................... 250 16,907
Manor Care Inc............................ 700 20,387
United Healthcare Corp.................... 100 4,137
----------
41,431
----------
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
Industrial Services - 1.8%
Fluor Corp................................ 400 $ 20,800
----------
Producer Manufacturing - 4.0%
Emerson Electric Co....................... 300 21,450
Xerox Corp................................ 200 23,450
----------
44,900
----------
Retail Trade - 1.9%
Wal-Mart Stores Inc....................... 800 21,400
----------
Transportation - 1.5%
Norfolk Southern Co....................... 250 16,844
----------
Utilities - 3.6%
GTE Corp.................................. 600 20,475
Pacificorp................................ 1,100 20,625
----------
41,100
----------
Total Common Stock
(Identified Cost $543,855) 549,656
----------
<CAPTION>
FIXED INCOME -
United States Government Obligations
Principal
Amount
(000 omitted)
-------------
<S> <C> <C>
United States Treasury Notes
6.125% due 5/15/98...................... $ 85 85,557
United States Treasury Notes
6.25% due 5/31/00....................... 280 282,974
United States Treasury Notes
6.50% due 5/15/05....................... 100 102,126
----------
Total Fixed Income
(Identified Cost $472,771) 470,657
----------
<CAPTION>
SHORT-TERM OBLIGATIONS -
<S> <C> <C>
Investors Cash Reserve
5.36% due 7/03/95....................... 11,341
United States Treasury Bill
5.39% due 9/14/95....................... 70,096
----------
81,437
----------
Total Investments
(Identified Cost $1,098,063) 97.1% 1,101,750
Other Assets, Less Liabilities............ 2.9 32,841
------ ----------
Net Assets................................ 100.0% $1,134,591
====== ==========
</TABLE>
ADRs - American Depositary Receipts
See notes to financial statements
<PAGE>
Landmark VIP Equity Fund
- --------------------------------------------------------------------------------
Portfolio of Investments June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
COMMON STOCKS -
Commercial Services - 2.1%
Sysco Corp.................................. 800 $ 23,600
----------
Commodities - 7.1%
Air Products & Chemicals.................... 700 39,025
Scott Paper Co.............................. 800 39,600
----------
78,625
----------
Consumer-Durables - 4.6%
General Motors Corp......................... 500 23,438
Whirlpool Corp.............................. 500 27,500
----------
50,938
----------
Consumer-Non Durables - 6.7%
PepsiCo Inc................................. 800 36,500
Philip Morris Comp Cos Inc.................. 500 37,188
----------
73,688
----------
Consumer Services - 5.6%
Carnival Corp............................... 1,300 30,387
Times Mirror Company........................ 1,300 31,038
----------
61,425
----------
Electronics/Technical Services - 10.2%
Computer Associates Intl. Inc............... 550 37,263
General Motors Corp. Class "E".............. 1,000 43,500
Hewlett Packard Inc......................... 400 29,800
----------
110,563
----------
Energy Minerals - 12.5%
Amoco Corp.................................. 650 43,306
Exxon Corp.................................. 650 45,906
Royal Dutch Petroleum Co. ADRs.............. 400 48,750
----------
137,962
----------
Finance - 8.3%
BankAmerica Corp............................ 450 23,681
Federal National Mortgage Association....... 400 37,750
State Street Boston Corp.................... 800 29,500
----------
90,931
----------
Issuer Shares Value
- ------ ------ -----
Health Services/Technology - 5.7%
Johnson & Johnson........................... 400 $ 27,050
Manor Care Inc.............................. 1,100 32,038
United Healthcare Corp...................... 100 4,137
----------
63,225
----------
Industrial Services - 3.3%
Fluor Corp.................................. 700 36,400
----------
Producer Manufacturing - 7.6%
Emerson Electric Co......................... 600 42,900
Xerox Corp.................................. 350 41,037
----------
83,937
----------
Retail Trade - 3.4%
Wal-Mart Stores Inc......................... 1,400 37,450
----------
Transportation - 3.1%
Norfolk Southern Co......................... 500 33,688
----------
Utilities - 5.9%
GTE Corp.................................... 900 30,712
Pacifcorp................................... 1,800 33,750
----------
64,462
----------
Total Common Stock
(Identified Cost $937,071) 946,894
----------
<CAPTION>
SHORT-TERM OBLIGATIONS -
<S> <C> <C>
Investors Cash Reserve
5.36% due 7/03/95......................... 27,941
United States Treasury Bill
6.125% due 9/14/95........................ 78,982
----------
106,923
----------
Total Investments
(Identified Cost $1,043,994) 95.8% 1,053,817
Other Assets, Less Liabilities.............. 4.2 46,449
------ ----------
Net Assets.................................. 100.0% $1,100,266
====== ==========
</TABLE>
ADRs - American Depositary Receipts
See notes to financial statements
<PAGE>
Landmark VIP International Equity Fund
- --------------------------------------------------------------------------------
Portfolio of Investments June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
COMMON STOCK -
France - 11.2%
Alcatel Alsthom............... 420 $ 37,857
Electronics
Axa Company................... 470 25,411
Insurance
Castorama DuBois.............. 250 41,478
Retailing
Club Mediterranee............. 400 40,817
Leisure & Tourism
Credit Foncier de France...... 270 29,919
Financial Services
Credit Local de France........ 270 25,072
Financial Services
General des Eaux Cie.......... 350 39,001
Electrical & Gas Utilities
Groupe Danone................. 240 40,413
Food & Household Products
Lafarge Coppee French......... 320 24,908
Building Material
Louis Vitton-Moet Hennesy..... 220 39,633
Beverages & Tobacco
Promodes...................... 180 41,044
Retailing
Sanofi........................ 280 15,514
Pharmaceuticals & Health
Union du Credit Bail.......... 150 14,672
Real Estate
Valeo......................... 800 38,943
--------
Industrial Components
454,682
--------
Germany - 11.2%
Basf AB....................... 180 38,433
Chemicals
Bayerische Motoren Werke AG... 90 49,505
Automobiles
Bilfinger and Berger.......... 50 23,075
Building & Construction
Daimler-Benz AG............... 70 32,129
Automobiles
Deutche Bank AG............... 1,500 72,859
Banking
Karstadt AG................... 130 57,037
Retailing
Mannesmann AG................. 200 61,077
Machinery & Engineering
Rhoen Klinikum AG............. 30 34,911
Pharmaceuticals & Health
Siemens AG.................... 120 59,545
Electrical & Electronics
SKW Trostberg AG.............. 1,400 29,346
--------
Chemicals
457,917
--------
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
Italy - 4.0%
Banca Commerciale Italiana.... 11,000 $ 24,829
Banking
Credito Italiano.............. 22,000 25,454
Banking
Fiat SPA...................... 4,500 15,867
Automobiles
IMI........................... 4,000 24,450
Banking
Istituto Nazionale Delle...... 25,000 33,415
Financial Services
Rinascente.................... 4,000 22,480
Retailing
Unicem SPA.................... 3,000 17,868
--------
Building Materials
164,363
--------
Japan - 22.8%
DDI Corporation............... 10 81,445
Telephone Utilities
Fuji Photo Film............... 3,000 72,065
Household Appliance
Fanuc Co...................... 2,000 87,263
Machinery & Electronics
Hitachi Ltd................... 8,000 79,901
Electrical & Electronics
Industrial Bank of Japan...... 3,000 78,120
Banking
Kyocera Corp.................. 1,000 82,395
Multi Corp.
National House Industrial Co.. 5,000 93,317
Building & Construction
Okumura....................... 10,000 95,098
Building & Construction
Seven Eleven Japan Co......... 1,000 71,234
Retailing
Toyota Motor Co............... 4,000 79,901
Automobiles
Yamato Transport.............. 10,000 108,989
--------
Road & Rail Transport
929,728
--------
Netherlands - 4.1%
European Vinyls Corp.......... 180 8,390
Textiles
Hunter Douglas NV............. 190 8,280
Machinery and Engineering
International Nederlanden Group 450 24,897
Insurance
Nutricia Verenigde Bedrijven.. 270 18,738
Food & Household Product
Philips Electronics NV........ 600 25,410
Industrial Components
Royal Dutch Petroleum Co...... 460 56,186
Energy
Royal PTT Nederland NV........ 240 8,630
Telephone Utilities
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
Netherlands - 4.1% (continued)
Vendex International NV......... 300 $ 7,941
Retailing
Verenigde Nederlandse........... 70 8,383
--------
Business & Public Services
166,855
--------
Spain - 6.2%
Acerinox SA..................... 620 76,345
Multi-Industry
Asturiada de Line............... 1,300 12,559
Non Ferrous Metals
Banco Popular Espanol........... 500 74,670
Banking
Corporacion Mapfre.............. 1,030 50,410
Insurance
Fomento Construction............ 450 38,135
--------
Building & Construction
252,119
--------
Sweden - 4.2%
Asea AB......................... 370 31,856
Machinery & Engineering
Electrolux AB................... 360 16,363
Household Appliances
Ericsson AB..................... 2,640 52,818
Electrical & Electronics
Hoganas AB...................... 450 8,774
Machinery & Engineering
Mo Och Domsjo................... 600 34,562
Forest Products & Paper
Sandvik AB...................... 1,400 25,376
--------
Machinery & Engineering
169,749
--------
Switzerland - 2.7%
BBC Brown Boveri & CIE.......... 23 23,840
Instruments & Components
Ciba-Geigy AG-R................. 150 24,219
Chemicals
Nestle.......................... 30 31,278
Food & Household Products
Sandoz AG....................... 18 12,647
Pharmaceuticals & Health
Schweiz Bankgeselschaft......... 17 17,636
--------
Banking
109,620
--------
United Kingdom - 12.0%
Bass PLC........................ 2,100 20,103
Beverages & Tobacco
Burmah Castrol PLC.............. 1,300 18,838
Energy Sources
Cable & Wireless................ 2,800 19,161
Telephone Utilities
Dixon Group..................... 3,800 15,512
Retailing
East Midlands Electricity....... 1,800 18,377
Electrical & Gas Utilities
Enterprise Oil PLC.............. 3,000 18,907
Energy Sources
<CAPTION>
Issuer Shares Value
- ------ ------ -----
<S> <C> <C>
General Electric PLC............ 3,700 $ 18,078
Electrical & Electronics
Glaxo Wellcome PLC.............. 1,600 19,645
Pharmaceuticals & Health
Glynwed International PLC....... 3,600 18,649
Machinery & Engineering
Guinness........................ 2,000 15,056
Beverages & Tobacco
Kwik Save Group................. 2,000 20,530
Retailing
Lloyds Bank PLC................. 2,000 19,846
Banking
Logica PLC...................... 3,300 19,642
Business & Public Services
Marks & Spencer PLC............. 3,000 19,289
Retailing
Pilkington Brothers............. 6,700 18,607
Building Materials
Royal Bank of Scotland Group.... 2,900 19,730
Banking
Securicor Group................. 1,300 20,027
Telephone Utilities
Smith (David S) Holdings PLC.... 1,600 16,526
Forest Products & Paper
Smith and Nephew Associated..... 7,000 19,858
Pharmaceuticals & Health
Smiths Industries............... 2,300 18,979
Machinery & Engineering
Standard Chartered PLC.......... 3,600 19,136
Banking
Sun Alliance Group.............. 3,600 19,251
Insurance
Tibbett and Britten Group....... 2,400 18,143
Road & Rail Transport
Tomkins PLC..................... 5,200 18,579
Multi-Industry
Unilever Limited................ 1,000 20,252
Food & Household Products
Zeneca PLC...................... 900 15,203
---------
Pharmaceuticals & Health
485,924
---------
Total Common Stock
(Identified Cost - $3,198,101) 3,190,957
---------
<CAPTION>
SHORT-TERM OBLIGATIONS -
<S> <C> <C>
Investors Cash Reserve 5.36%,
due 7/03/95.................... 2,207,184
---------
Total Investments
(Identified Cost - $5,405,285) 132.5% 5,398,141
Other Assets, Less Liabilities.. (32.5) (1,324,201)
----- ---------
Net Assets...................... 100.0% $ 4,073,940
===== ===========
</TABLE>
See notes to financial statements
<PAGE>
Landmark VIP Funds
- --------------------------------------------------------------------------------
Statement Of Assets And Liabilities June 30, 1995 (unaudited)
<TABLE>
<CAPTION>
Landmark VIP
Landmark VIP Landmark VIP Landmark VIP International
U.S. Government Fund Balanced Fund Equity Fund Equity Fund
-------------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Assets:
Investments, at value (Note 1A)(Identified Cost, $1,006,148,
$1,098,063, $1,043,994, $5,405,285, respectively)............. $ 999,878 $1,101,750 $1,053,817 $5,398,141
Foreign currency, at value ($0, $0, $0, $600,690,
respectively)................................................. -- -- -- 588,973
Receivable for securities sold................................. 199 16,746 33,086 9,987
Receivable for Capital Stock sold.............................. 12,681 12,681 12,681
Dividend receivable............................................ -- 329 558 2,339
Interest receivable............................................ 16,429 3,085 124 329
---------- ---------- ---------- ----------
Total assets............................................... 1,016,506 1,134,591 1,100,266 6,012,450
---------- ---------- ---------- ----------
Liabilities:
Payable for Securities Purchased............................... -- -- -- 1,938,510
---------- ---------- ---------- ----------
Net Assets for 100,522, 111,207, 107,248, 403,537
shares, respectively, of beneficial interest outstanding...... $1,016,506 $1,134,591 $1,100,266 $4,073,940
========== ========== ========== ==========
Net Assets Consist of:
Paid-in capital................................................ $1,019,201 $1,127,508 $1,087,639 $4,087,534
Undistributed net realized gain (loss) on investments.......... -- 244 433 (7,623)
Unrealized appreciation (depreciation) of investments and
foreign currency translations................................. (6,270) 3,687 9,823 (18,861)
Undistributed net investment income............................ 3,575 3,152 2,371 12,890
---------- ---------- ---------- ----------
Total...................................................... $1,016,506 $1,134,591 $1,100,266 $4,073,940
========== ========== ========== ==========
Net Asset Value Per Share of Beneficial Interest............... $10.11 $10.20 $10.26 $10.10
====== ====== ====== ======
</TABLE>
See notes to financial statements
<PAGE>
Landmark VIP Funds
- --------------------------------------------------------------------------------
Statement Of Operations
For the Period March 10, 1995 (Commencement of Operations) to June 30, 1995
(unaudited)
<TABLE>
<CAPTION>
Landmark VIP
Landmark VIP Landmark VIP Landmark VIP International
U.S. Government Fund Balanced Fund Equity Fund* Equity Fund
-------------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Interest Income: (Note 1B)................................... $ 3,575 $ 2,823 $ 1,813 $ 10,551
Dividend..................................................... -- 329 558 2,339
-------- -------- -------- --------
Total Income............................................... 3,575 3,152 2,371 12,890
-------- -------- -------- --------
Expenses:
Investment advisory fees (Note 2)............................ 201 234 275 2,001
Administrative fees (Note 3)................................. 100 117 110 400
Shareholder reports.......................................... 2,000 2,000 2,000 2,000
Custodian fees............................................... 13,743 14,002 13,892 24,569
Auditing services............................................ 5,000 5,000 5,000 5,000
Legal services............................................... 1,000 1,000 1,000 1,000
Distribution fees (Note 4)................................... 25 29 27 100
Trustees fees................................................ 2,250 2,250 2,250 2,250
Miscellaneous................................................ 1,000 1,000 1,000 1,000
-------- -------- -------- --------
Total expenses............................................. 25,319 25,632 25,554 38,320
Less aggregate amount waived by Investment Adviser,
Administrator, and Distributor (Notes 2, 3, and 4).......... (326) (380) (412) (2,501)
Less expenses assumed by the administrator................... (24,993) (25,252) (25,142) (35,819)
-------- -------- -------- --------
Net expenses............................................... -- -- -- --
-------- -------- -------- --------
Net investment income...................................... 3,575 3,152 2,371 12,890
-------- -------- -------- --------
Net Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) from investment transactions........ -- 244 433 (7,623)
Net change in unrealized appreciation (depreciation)......... (6,270) 3,687 9,823 (18,861)
-------- -------- -------- --------
Net realized and unrealized gain (loss) on investments....... (6,270) 3,931 10,256 (26,484)
-------- -------- -------- --------
Net Increase (Decrease) in Net Assets Resulting
from Operations............................................. $ (2,695) $ 7,083 $ 12,627 $(13,594)
======== ======== ======== ========
</TABLE>
* Commencement of Operations March 9, 1995
See notes to financial statements
<PAGE>
Landmark VIP Funds
- --------------------------------------------------------------------------------
Statement Of Changes In Net Assets
<TABLE>
<CAPTION>
Landmark VIP
Landmark VIP Landmark VIP Landmark VIP International
U.S. Government Fund Balanced Fund Equity Fund Equity Fund
-------------------- ------------- ------------ -------------
March 10, 1995 March 10, 1995 March 9, 1995 March 10, 1995
(Commencement (Commencement (Commencement (Commencement
of Operations) of Operations) of Operations) of Operations)
to June 30, 1995 to June 30, 1995 to June 30, 1995 to June 30, 1995
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from:
Operations:
Net investment income............................ $ 3,575 $ 3,152 $ 2,371 $ 12,890
Net realized gain (loss) on investments.......... -- 244 433 (7,623)
Net change in unrealized appreciation
(depreciation) of investments................... (6,270) 3,687 9,823 (18,861)
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations...................... (2,695) 7,083 12,627 (13,594)
---------- ---------- ---------- ----------
Transactions in Shares of Beneficial Interest
(Note 6):
Net proceeds from sale of shares................. 1,019,456 1,130,812 1,090,679 4,090,589
Cost of shares repurchased....................... (255) (3,304) (3,040) (3,055)
---------- ---------- ---------- ----------
Net increase in net assets from transactions
in shares of beneficial interest.............. 1,019,201 1,127,508 1,087,639 4,087,534
---------- ---------- ---------- ----------
Net Increase in Net Assets....................... 1,016,506 1,134,591 1,100,266 4,073,940
Net Assets:
Beginning of period.............................. -- -- -- --
---------- ---------- ---------- ----------
End of period (including undistributed net
investment income of $3,575, $3,152, $2,371 and
$12,890, respectively).......................... $1,016,506 $1,134,591 $1,100,266 $4,073,940
========== ========== ========== ==========
</TABLE>
See notes to financial statements
<PAGE>
Landmark VIP Funds
- --------------------------------------------------------------------------------
Financial Highlights
<TABLE>
<CAPTION>
Landmark VIP
Landmark VIP Landmark VIP Landmark VIP International
U.S. Government Fund Balanced Fund Equity Fund Equity Fund
-------------------- ------------- ------------ -------------
March 10, 1995 March 10, 1995 March 9, 1995 March 10, 1995
(Commencement (Commencement (Commencement (Commencement
of Operations) of Operations) of Operations) of Operations)
to June 30, 1995 to June 30, 1995 to June 30, 1995 to June 30, 1995
(unaudited) (unaudited) (unaudited) (unaudited)
-------------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period............ $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- ------- ------- -------
Income From Operations:
Net investment income........................... 0.04 0.03 0.02 0.03
Net realized and unrealized gain (loss) on...... 0.07 0.17 0.24 0.07
investments
------- ------- ------- -------
Total from operations......................... 0.11 0.20 0.26 0.10
Less Distributions From:
Net investment income......................... -- -- -- --
Net realized gain on investments.............. -- -- -- --
------- ------- ------- -------
Total distributions........................ -- -- -- --
------- ------- ------- -------
Net Asset Value, end of period.................. $ 10.11 $ 10.20 $ 10.26 $ 10.10
======= ======= ======= =======
Ratios/Supplemental Data:
Net assets, end of period (000s omitted)........ $ 1,017 $ 1,135 $ 1,100 $ 4,074
Ratio of expenses to average net assets......... 0.0% 0.0% 0.0% 0.0%
Ratio of net investment income to average....... 7.12%* 5.39%* 4.32%* 6.44%*
net assets
Portfolio turnover.............................. 0% 1% 1% 0%
Total return.................................... 1.10%+ 2.00%+ 2.60%+ 1.00%+
</TABLE>
Note: If Agents of the Fund had not voluntarily agreed to waive a portion of
their fees, the administrator not assumed expenses and had expenses not been
limited to that required by certain state securities laws, for the periods
indicated, the net investment income per share and the ratios would have been as
follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net investment income per share................ $ (0.22) $ (0.22) $ (0.22) $ (0.06)
Ratios:
Expenses to average net assets................. 2.50%* 2.50%* 2.50%* 2.50%*
Net investment income to average net assets.... 4.62%* 2.89%* 1.82%* 3.94%*
</TABLE>
* Annualized
+ Not annualized
See notes to financial statements
<PAGE>
Landmark VIP Funds
- --------------------------------------------------------------------------------
Notes To Financial Statements (unaudited)
(1) Significant Accounting Policies
Landmark VIP U.S. Government Fund, Landmark VIP Balanced Fund, Landmark VIP
Equity Fund and Landmark VIP International Equity Fund (the Funds) are each a
separate diversified series of Landmark VIP Funds (the Trust) which is organized
as a Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended, as an open-end, management investment company. The
Investment Adviser of each Fund is Citibank,N.A. (Citibank) . The Landmark Funds
Broker-Dealer Services, Inc. (LFBDS) acts as the Funds Administrator and
Distributor. Shares of each Fund may only be purchased or redeemed through
variable annuity contracts and variable life insurance policies offered by the
separate accounts of participating insurance companies.
The significant accounting policies consistently followed by the Funds are
in conformity with generally accepted accounting principles and are as follows:
A. Investment Security Valuations -- Equity securities are valued at the last
sale price on the exchange on which they are primarily traded, or at the quoted
bid price for securities in which there were no sales during the day, or for
unlisted securities not reported on the NASDAQ system. Securities listed on a
foreign exchange are valued at the last quoted sale price available before the
time when net assets are valued. Bonds and other fixed income securities (other
than short-term obligations maturing in sixty days or less) are valued on the
basis of valuations furnished by a pricing service, the use of which has been
approved by the Trustees. In making such valuations, the pricing service
utilizes both dealer-supplied valuations and electronic data processing
techniques 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, without
exclusive reliance upon quoted prices or exchanges or over-the-counter prices,
since such valuations and techniques are believed to reflect more accurately the
fair value of such securities. Short-term obligations maturing in sixty days or
less, are valued at amortized cost, which constitutes fair value as determined
by the Trustees. Portfolio Securities for which there are no such quotations or
valuations are valued at fair value as determined in good faith by or under
guidelines established by the Trustees. Trading in securities on most foreign
exchanges and over-the-counter markets is normally completed before the close of
the New York Stock Exchange and may also take place on days on which the New
York Stock Exchange is closed. If events materially affecting the value of
foreign securities occur between the time when the exchange on which they are
traded closes and the time when each Fund's net asset value is calculated, such
securities will be valued at fair value in accordance with procedures
established by and under the general supervision of the Trustees.
B. Income -- Interest income is determined on the basis of interest accrued and
discount earned, adjusted for amortization of premium or discount on long-term
debt securities when required for Federal income tax purposes. Gain and loss
from principal paydowns are recorded as ordinary income. Dividend income and
other distributions from investments are recorded on ex-dividend date, except if
the ex-dividend date passed, certain dividends from foreign securities are
recorded as the Fund is informed of ex-dividend date. Dividend income is
recorded net of foreign taxes withheld where recovery of such taxes is not
assured.
C. Foreign Currency Translation -- The accounting records of each of the Funds,
are maintained in U.S. dollars. For each of the Funds, except Landmark VIP U.S.
Government Fund which invests only in U.S. dollar denominated securities,
foreign currency amounts are translated into U.S. dollars at the current rate of
exchange to determine the value of investments, assets and liabilities.
Purchases and sales of securities, and income and expenses are translated at the
prevailing rate of exchange on the respective dates of such transactions. The
Funds do not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are included
with the net realized and unrealized gain or loss from investments. Translations
of foreign currency includes net exchange gains and losses, disposition of
foreign currency and the difference between the amount of investment income and
foreign taxes withheld recorded and the amount actually recurred or paid.
D. Forward Foreign Currency Exchange Contracts -- Each of the Funds except
Landmark VIP U.S. Government Fund may enter into forward foreign currency
exchange contracts ("contracts") in connection with planned purchases or sales
of securities, to hedge the U.S. dollar value of portfolio securities
denominated in a particular currency. Landmark VIP International Equity Fund
could be exposed to risks if the counter-parties to the contracts are unable to
meet the terms of their contracts and from unanticipated movements in the value
of a foreign currency relative to the U.S Dollar. The forward foreign currency
exchange contracts are adjusted by the daily exchange rate of the underlying
currency and any gains or losses are recorded for financial statement purposes
as unrealized gains or losses until the contract settlement date.
E. Federal Taxes -- Each Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary.
F. Expenses -- Each Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more Funds or series are allocated in proportion to the
average net assets of each Fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that Fund.
G. Distributions -- Each Fund distinguishes between distributions on a tax basis
and a financial reporting basis and requires that distributions in excess of tax
basis earnings and profits be reported in the financial statements as a return
of capital. Differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes, are classified as
distributions in excess of net investment income or accumulated net realized
gains.
<PAGE>
H. Other -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis. All dividends and distributions will be received on
the ex-dividend date, and will be automatically reinvested in additional shares
of a fund issued at the net asset value of such shares on the payment date of
such dividends and distributions.
I. Beneficial Interest -- At June 30, 1995, insurance companies or their
separate accounts were the record owners of all the shares of each Fund.
(2) Investment Advisory Fees
The investment advisory fee paid to Citibank, as compensation for overall
investment management services is accrued daily and computed at the following
annual rate of average daily net assets:
<TABLE>
<S> <C> <C>
. Landmark VIP U.S. Government Fund............... 0.40%
. Landmark VIP Balanced Fund...................... 0.40%
. Landmark VIP Equity Fund........................ 0.50%
. Landmark VIP International Equity Fund.......... 1.00%
</TABLE>
The investment adviser has waived all of its fees for each Fund for the period
ending June 30, 1995.
(3) Administrative Fees
Under the terms of an Administrative Services Agreement, the administrative
service fee payable to the Administrator, as compensation for overall
administrative services and general office facilities, is computed at an annual
rate of .20% of the Funds average daily net assets, all of which was voluntarily
waived for the period ending June 30, 1995. Citibank acts as Sub-Administrator
and performs such duties and receives such compensation from LFBDS as from time
to time is agreed to by LFBDS and Citibank. The Trust pays no compensation
directly to any Trustee or any other officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the Trust
from the Administrator or its affiliates.
(4) Distribution Fees
The Trust has adopted a Plan of Distribution pursuant to rule 12b-1 under
the Investment Company act of 1940, as amended, under which the Fund reimburses
the Distributor for expenses incurred or anticipated in connection with the
distribution of shares of the Funds at an annual rate not to exceed 0.05 % of
each Fund's average daily net assets, all of which was voluntarily waived for
the period ended June 30, 1995.
(5) Purchases and Sales of Investments
Purchases and sales of securities, other than short-term obligations, for
the period ended June 30, 1995, were as follows:
<TABLE>
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
Landmark VIP U.S. Government Fund............ $ 989,742 $ ---
Landmark VIP Balanced Fund................... 1,032,699 16,332
Landmark VIP Equity Fund..................... 969,219 32,641
Landmark VIP International Equity Fund....... 3,198,101 ---
</TABLE>
(6) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest (without par value).
Transactions in shares of beneficial interest were as follows:
Landmark VIP U.S. Government Fund
Shares sold 100,548
Shares repurchased. (26)
-------
Net increase 100,522
=======
Landmark VIP Balanced Fund
Shares sold 111,533
Shares repurchased (326)
-------
Net increase 111,207
=======
Landmark VIP Equity Fund
Shares sold 107,548
Shares repurchased (300)
-------
Net increase 107,248
=======
Landmark VIP International Equity Fund
Shares sold 403,838
Shares repurchased (301)
-------
Net increase 403,537
=======
(7) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) in value of the
investment securities owned at June 30, 1995, as computed on a federal income
tax basis, are as follows:
<TABLE>
<CAPTION>
Landmark Landmark Landmark Landmark
VIP VIP VIP VIP
U.S. Government Balanced Equity International
Fund Fund Fund Equity Fund
--------------- -------- -------- -------------
<S> <C> <C> <C> <C>
Aggregate Cost........ $1,006,148 $1,098,063 $1,043,994 $5,405,285
========== ========== ========== ==========
Gross unrealized
appreciation........ $ -- $ 10,613 $ 18,289 $ 29,068
Gross unrealized
depreciation........ (6,270) (6,926) (8,466) (36,212)
---------- ---------- ---------- ----------
Net unrealized
appreciation
(depreciation)...... $ (6,270) $ 3,687 $ 9,823 $ (7,144)
========== ========== ========== ==========
</TABLE>
