SEMI-ANNUAL
FINANCIAL REPORT
STI CLASSIC VARIABLE TRUST
[GRAPHIC OMITTED]
JUNE 30, 1998
STI CLASSIC VARIABLE TRUST
<PAGE>
Dear STI Classic Variable Trust Shareholders:
The following 1998 Semi-Annual Financial Report provides you a detailed summary
of each of the STI Classic Variable Trust Funds. The STI Classic Funds and the
STI Classic Variable Trust have presented investors exposure to a variety of
investment opportunities since 1992. The six STI Classic Variable Trust Funds
were developed specifically to meet the rapidly changing needs of today's
investor. Each of these funds offers an investment discipline that identifies a
specific mix of risk and return. Together, the STI Classic Variable Trust Funds
complement one another, providing access to different segments of the stock and
bond markets. The combination of these funds is intended to offer the ideal
investment program for almost any investor.
<TABLE>
<CAPTION>
===========================================================================================================================
STI CLASSIC VARIABLE TRUST FUNDS (UNAUDITED)
NET OF FEES PERFORMANCE AS OF JUNE 30, 1998
===========================================================================================================================
THREE SINCE INCEPTION INCEPTION
MONTHS ONE YEAR TWO YEARS (ANNUALIZED) DATE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STI CLASSIC VARIABLE TRUST
VALUE INCOME STOCK FUND -3.74% 17.78% 22.01% 22.26% 10/2/95
- ---------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
MID-CAP EQUITY FUND -2.03% 21.00% 19.54% 17.79% 10/2/95
- ---------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
SMALL CAP EQUITY FUND -8.35% N/A N/A -3.01% 10/22/97
- ---------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
CAPITAL GROWTH FUND 4.43% 33.75% 34.59% 32.32% 10/2/95
- ---------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
INVESTMENT GRADE BOND FUND 2.52% 10.62% 8.69% 7.00% 10/2/95
- ---------------------------------------------------------------------------------------------------------------------------
STI CLASSIC VARIABLE TRUST
INTERNATIONAL EQUITY FUND 0.81% 15.13% N/A 21.18% 11/7/96
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<FN>
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RETURNS.
</FN>
</TABLE>
The STI Classic Variable Trust is a well-established family of mutual funds,
nationally recognized for the diversity and quality of investment options that
they provide. As the advisor to the STI Classic Variable Trust, STI Capital
Management is committed to providing you quality investment products which will
aid you in achieving your investment objectives.
I hope you will find the information on the following pages useful. It is
intended to give you a better understanding of how our portfolio managers are
investing your money. Thank you for your interest and participation in the STI
Classic Variable Trust. We look forward to many successful years of investing in
the future.
Sincerely,
/s/Signature Omitted
Anthony R. Gray
Chief Executive Officer and Chief Investment Officer
STI Capital Management, N.A.
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
VALUE INCOME STOCK FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (91.9%)
BASIC MATERIALS (13.6%)
Allegheny Teledyne 49,400 $ 1,130
B.F. Goodrich 13,500 670
Boise Cascade 15,600 511
Consolidated Papers 22,400 610
Eastman Chemical 13,700 853
Engelhard 47,800 968
Hercules 21,000 864
Morton International 28,200 705
PPG Industries 9,500 661
Reynolds Metals 23,400 1,309
Sonoco Products 26,430 800
Stanley Works 29,200 1,214
Union Camp 12,000 595
Weyerhaeuser 17,300 799
Witco Chemical 18,700 547
Worthington Industries 38,800 584
-------
12,820
-------
CAPITAL GOODS (10.8%)
AMP 27,900 959
Cooper Industries 12,400 681
Crown Cork & Seal 20,900 993
Federal Signal 32,100 780
General Signal 16,500 594
Harris 22,600 1,010
Johnson Controls 12,300 702
National Service Industries 11,800 600
Pall 58,600 1,201
Tecumseh Products, Cl A 13,900 734
Tenneco 29,300 1,115
Thomas & Betts 17,800 877
-------
10,246
-------
COMMUNICATION SERVICES (6.0%)
Alltel 35,000 1,627
Ameritech 48,800 2,190
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMUNICATION SERVICES (CONTINUED)
Frontier 15,600 $ 491
GTE 24,300 1,352
-------
5,660
-------
CONSUMER CYCLICALS (8.7%)
American Greetings, Cl A 19,600 998
Genuine Parts 26,500 916
H & R Block 32,400 1,365
ITT Industries 22,700 848
J.C. Penney 12,700 918
May Department Stores 17,700 1,159
TRW 25,000 1,366
Wallace Computer Services 29,100 691
-------
8,261
-------
CONSUMER STAPLES (13.7%)
American Stores 60,400 1,461
Anheuser Busch 21,300 1,005
Bestfoods 17,900 1,039
ConAgra 66,000 2,091
Food Lion, Cl A 47,900 509
General Mills 20,600 1,409
Hormel Foods 14,600 505
International Flavors & Fragrances 29,300 1,273
Kimberly Clark 45,800 2,101
McCormick 18,000 643
Seagram 22,400 917
-------
12,953
-------
ENERGY (9.8%)
Atlantic Richfield 18,100 1,414
Kerr-McGee 19,100 1,105
Mobil 23,900 1,831
Murphy Oil 18,700 948
Texaco 30,300 1,809
Unocal 59,300 2,120
-------
9,227
-------
2
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCIALS (13.8%)
American Financial Group 16,000 $ 693
American General 13,700 975
AmSouth Bancorp 17,300 680
Banc One 17,000 949
BankBoston 12,600 701
Cigna 27,000 1,863
Crestar Financial 12,000 655
Hibernia, Cl A 32,500 656
Jefferson-Pilot 12,350 716
Magna Group 8,400 475
Safeco 29,900 1,359
TIG Holdings 24,000 552
Transamerica 8,100 933
Union Planters 12,100 712
Wells Fargo 2,200 812
Willis Corroon PLC ADR 24,300 305
-------
13,036
-------
HEALTH CARE (7.9%)
Abbott Laboratories 25,200 1,030
Baxter International 39,700 2,136
C.R. Bard 27,700 1,054
Mallinckrodt 30,800 914
Pharmacia Upjohn ADR 51,400 2,371
-------
7,505
-------
TECHNOLOGY (0.7%)
EG&G 23,300 699
-------
UTILITIES (6.9%)
Cinergy 20,800 728
Consolidated Natural Gas 25,300 1,490
GPU 24,400 923
Pacificorp 31,600 715
Questar 34,300 673
Scana 33,300 993
Sonat 26,700 1,031
-------
6,553
-------
- --------------------------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
Total Common Stocks
(Cost $81,889) $86,960
-------
REPURCHASE AGREEMENTS (8.3%)
Morgan Stanley
6.15%, dated 06/30/98,
matures 07/01/98, repurchase
price $7,864,687 (collateralized
by FNMA obligation:
market value $8,138,838) $7,863 7,863
-------
Total Repurchase Agreements
(Cost $7,863) 7,863
-------
Total Investments (100.2%)
(Cost $89,752) 94,823
-------
OTHER ASSETS AND LIABILITIES, NET (-0.2%) (219)
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par
value) based on 5,834,750
outstanding shares of
beneficial interest 77,467
Accumulated net realized gain
on investments 12,066
Net unrealized appreciation
on investments 5,071
-------
Total Net Assets (100.0%) $94,604
=======
Net Asset Value, Offering and
Redemption Price Per Share $ 16.21
=======
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC -- PUBLIC LIMITED CORPORATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
3
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
MID-CAP EQUITY FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (91.3%)
CAPITAL GOODS (11.7%)
Allied Waste Industries* 37,700 $ 905
Danka Business Systems ADR 13,400 158
Herman Miller 18,600 452
Hubbell, Cl B 7,400 308
Motivepower Industries* 10,000 245
Power-One* 16,200 153
U.S. Filter* 40,000 1,122
Watsco 6,500 229
------
3,572
------
CONSUMER CYCLICALS (20.3%)
Barnes & Noble* 10,000 374
BJ's Wholesale Club* 9,400 382
Borders Group* 12,500 463
Ethan Allen Interiors 10,200 509
Family Dollar Stores 26,200 485
Harley-Davidson 20,800 806
International Speedway* 6,200 176
Just for Feet* 8,150 232
Men's Wearhouse* 22,050 728
Norrell 19,000 379
Radiant Systems* 12,100 175
Ralph Lauren* 13,800 386
Saks Holdings* 13,500 373
Samsonite* 4,559 50
Staff Leasing* 11,600 342
West Marine* 17,300 311
------
6,171
------
CONSUMER STAPLES (11.8%)
Avis Rent A Car* 26,400 653
Cracker Barrel Old Country Stores 17,900 568
Dial 15,200 394
Interstate Bakeries 24,600 816
Papa John's International* 12,400 489
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
US Foodservice* 10,400 $ 365
Wendy's International 12,800 301
------
3,586
------
ENERGY (7.8%)
Anadarko Petroleum 2,200 148
EEX* 46,700 438
National-Oilwell* 11,100 298
Newpark Resources* 26,600 296
Santa Fe International 10,000 303
Valero Energy 10,400 346
Western Atlas* 6,400 543
------
2,372
------
FINANCIALS (9.5%)
Colonial Bancgroup 9,500 306
Dime Bancorp 15,700 470
First Security 20,637 442
First Virginia Banks 9,100 465
Hibernia, Cl A 13,200 266
North Fork Bancorporation 18,400 450
Trustmark 16,600 364
Western Bancorp 3,000 127
------
2,890
------
HEALTH CARE (10.9%)
Acuson Corp* 26,000 473
Biogen* 4,900 240
Curative Technologies* 16,000 456
DePuy* 10,800 305
Dura Pharmaceuticals* 17,700 396
Mylan Laboratories 14,000 421
Quorum Health Group* 10,500 278
Watson Pharmaceuticals* 16,300 761
------
3,330
------
4
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
TECHNOLOGY (16.6%)
ADC Telecommunications* 19,300 $ 705
Fiserv* 14,850 631
Flextronics International* 15,000 653
Intuit* 6,300 386
Networks Associates* 16,324 782
PMT Services* 21,800 555
Sawtek* 28,700 423
Tech Data* 10,500 450
Teradyne* 17,100 457
-------
5,042
-------
TRANSPORTATION (2.7%)
CNF Transportation 7,200 306
Sanmina* 12,000 521
-------
827
-------
Total Common Stocks
(Cost $25,522) 27,790
-------
REPURCHASE AGREEMENTS (7.8%)
Morgan Stanley
5.70%, dated 06/30/98,
matures 07/01/98, repurchase
price $2,369,405 (collateralized by
various U.S. Treasury obligations:
total market value $2,502,997) $2,369 2,369
-------
Total Repurchase Agreements
(Cost $2,369) 2,369
-------
Total Investments (99.1%)
(Cost $27,891) 30,159
-------
OTHER ASSETS AND LIABILITIES, NET (0.9%) 276
-------
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 2,025,487 outstanding
shares of beneficial interest $24,043
Accumulated net realized gain
on investments 4,184
Net unrealized appreciation
on investments 2,268
Net operating loss (60)
-------
Total Net Assets (100.0%) $30,435
=======
Net Asset Value, Offering and
Redemption Price Per Share $15.02
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
SMALL CAP EQUITY FUND
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (92.6%)
BASIC MATERIALS (15.4%)
Ameron 2,300 $ 133
Carpenter Technology 5,000 251
Columbus Mckinnon 3,000 78
Commonwealth Industries 9,000 90
General Chemical Group 5,900 164
H. B. Fuller 3,100 172
Jannock Limited 7,800 101
Lilly Industries
Incorporated, Cl A 11,200 242
Madeco ADR 9,000 79
Quimica y Minera Chile ADR 6,800 228
Texas Industries 6,300 334
Wausau-Mosinee Paper 6,400 146
-------
2,018
-------
CAPITAL GOODS (14.6%)
A.M. Castle 5,900 130
American Woodmark 4,200 115
Belden 4,100 126
DT Industries 3,500 85
Furon 7,600 138
General Binding 2,900 107
Hardinge 3,300 81
Kaman 8,800 167
LSI Industries 4,200 84
Regal Beloit 13,200 380
Rock Tenn, Cl A 6,900 87
Toro 3,100 106
Valmont Industries 8,200 164
Watts Industries, Cl A 7,100 148
-------
1,918
-------
CONSUMER CYCLICALS (22.0%)
Brown Group 11,800 235
Bush Industries 10,800 235
Guilford Mills 10,200 204
Harman International 8,500 327
K2 16,300 287
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER CYCLICALS (CONTINUED)
Kimball International* 10,900 $ 198
Libbey 3,500 134
Norrell 20,100 401
Ritchie Bros. Auctioneers* 4,900 130
Smith (A.O.) 3,100 160
Sotheby's Holdings, Cl A 13,100 293
Springs Industries, Cl A 2,800 129
Sturm Ruger 9,500 159
-------
2,892
-------
CONSUMER STAPLES (11.6%)
Angelica 6,100 128
Banta 8,400 259
Bowne & Company 3,900 176
Chemed 3,000 102
Ingles Markets, Cl A 7,900 115
Nash Finch 6,900 104
Standard Register 8,200 290
Universal Foods 12,500 277
York Group 3,800 72
-------
1,523
-------
ENERGY (3.0%)
Chesapeake Energy 32,800 131
Giant Industries 14,800 257
-------
388
-------
FINANCIALS (8.9%)
Administradora de Fondos
de Pensiones Provida ADR* 5,000 83
Alfa 5,100 106
Annuity & Life Re Holdings* 4,300 95
ARM Financial Group 4,500 100
Banco Latinamericano
de Exportaciones 3,200 98
Klamath First Bancorp 3,500 67
Seacoast Banking of Florida 1,700 65
Student Loan 2,000 94
6
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCIALS (CONTINUED)
Westcorp 12,000 $ 165
Westerfed Financial 4,000 98
Willis Corroon PLC ADR 15,300 192
-------
1,163
-------
HEALTH CARE (6.8%)
Block Drug, Cl A 2,400 91
Invacare 5,400 138
London International Group ADR 7,800 137
Medeva PLC, ADR 18,000 205
Vital Signs 9,400 172
West Company 5,400 153
-------
896
-------
TECHNOLOGY (3.3%)
Dallas Semiconductor 4,700 146
Innovex 9,100 119
Methode Electronics, Cl A 10,800 167
-------
432
-------
TRANSPORTATION (4.4%)
Knightsbridge Tankers Limited* 4,500 120
Pittston Burlington 10,400 162
Sea Containers 6,900 264
Western Star Truck Holdings 1,600 27
-------
573
-------
UTILITIES (2.6%)
Northwest Natural Gas 3,700 104
Nui 4,100 104
TNP Enterprises 2,900 90
United Water Resources 2,500 45
-------
343
-------
Total Common Stocks
(Cost $12,748) 12,146
-------
- --------------------------------------------------------------------------------
SHARES/FACE MARKET
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PREFERRED STOCKS (0.8%)
BASIC MATERIALS (0.8%)
Coeur D'Alene Mines, CV to
0.8260 Share, Callable
03/15/99 @ 21.622 9,500 $ 102
-------
Total Preferred Stocks
(Cost $154) 102
-------
REPURCHASE AGREEMENTS (6.7%)
Morgan Stanley
5.25%, dated 06/30/98,
matures 07/01/98, repurchase
price $885,433 (collateralized by
an U.S. Treasury Note: market
value $907,437) $885 885
-------
Total Repurchase Agreements
(Cost $885) 885
-------
Total Investments (100.1%)
(Cost $13,787) 13,133
-------
OTHER ASSETS AND LIABILITIES, NET (-0.1%) (18)
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 1,351,395 outstanding
shares of beneficial interest 13,548
Accumulated net realized gain
on investments 221
Net unrealized depreciation
on investments (654)
-------
Total Net Assets (100.0%) $13,115
=======
Net Asset Value, Offering and
Redemption Price Per Share $9.71
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
CV -- CONVERTIBLE
PLC -- PUBLIC LIMITED CORPORATION
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
CAPITAL GROWTH FUND
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMON STOCKS (96.2%)
BASIC MATERIALS (3.9%)
Air Products & Chemicals 23,100 $ 924
ConAgra 16,900 536
Ecolab 10,500 325
Imperial Chemical ADR 8,000 516
Monsanto 4,200 235
Morton International 10,400 260
Praxair 16,000 749
------
3,545
------
CAPITAL GOODS (16.3%)
Allied Signal 28,800 1,278
Allied Waste Industries* 13,500 324
Avery Dennison 4,600 247
Boeing 7,700 343
Dover 6,900 236
Emerson Electric 4,600 277
General Electric 28,900 2,630
Honeywell 13,300 1,111
Lockheed Martin 1,200 127
Molten Metal Technology* 5,600 1
Newell 21,000 1,046
Northrop Grumman 2,000 206
Parker Hannifin 3,000 114
Pitney Bowes 3,400 164
Republic Services* 14,300 343
Textron 6,500 466
Thermo Electron* 12,900 441
Tyco International 6,720 423
U.S. Filter* 24,512 688
United Technologies 19,900 1,841
USA Waste Services* 25,400 1,254
Waste Management 2,700 94
W.W. Grainger 20,700 1,031
-------
14,685
-------
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
COMMUNICATION SERVICES (2.8%)
Ameritech 14,000 $ 628
Century Telephone Enterprises 6,400 294
Ericsson Telephone ADR 10,700 306
MCI Communications 10,300 599
TCI Communications, Cl A* 9,700 373
Worldcom* 6,000 291
-------
2,491
-------
CONSUMER CYCLICALS (14.1%)
Abercrombie & Fitch, Cl A* 3,797 167
Bed Bath & Beyond* 2,600 135
Carnival 47,700 1,890
Consolidated Stores* 13,100 475
Costco* 17,600 1,110
Federated Department Stores* 15,500 834
Gannett 5,100 362
Intimate Brands 1,500 41
Lear* 12,400 636
Limited 7,300 242
Lowe's Companies 28,300 1,148
Masco 24,900 1,507
Mattel 17,500 740
McGraw-Hill 11,000 897
Office Depot* 20,400 644
Omnicom Group 2,500 125
Republic Industries* 3,500 87
Sherwin Williams 7,800 258
Staples* 4,700 136
Starwood Lodging Trust REIT 7,000 338
Tandy 13,400 711
Viking Office Products* 6,500 204
-------
12,687
-------
CONSUMER STAPLES (13.1%)
Avon Products 10,500 814
Campbell Soup 7,000 372
Cendant* 29,306 612
8
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
CONSUMER STAPLES (CONTINUED)
Coca Cola 5,200 $ 205
Colgate-Palmolive 7,300 642
CVS 38,400 1,495
Flowers Industries 9,600 196
Fred Meyer* 10,000 425
Gillette 4,000 227
Goodmark Foods 13,800 409
PepsiCo 17,900 737
Philip Morris 24,400 961
Ralston Purina 8,600 1,005
Rite Aid 15,000 563
Safeway* 23,200 944
Sara Lee 22,000 1,231
Stanley Works 5,700 237
Unilever ADR 5,500 435
U.S. Foodservice* 8,200 288
-------
11,798
-------
ENERGY (7.0%)
British Petroleum ADR 8,934 788
Camco International 15,900 1,238
Diamond Offshore Drilling 1,300 52
EVI Weatherford* 9,600 356
Halliburton 21,500 958
Mobil 6,600 506
Schlumberger 5,000 342
Shell Transport and Trading ADR 10,000 424
Texaco 19,200 1,146
Union Pacific Resources Group 15,601 274
Unocal 7,000 250
-------
6,334
-------
FINANCIALS (16.7%)
American International Group 6,600 964
AmSouth Bancorp 6,700 263
Associates First Capital 7,500 577
Banc One 15,956 891
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
FINANCIALS (CONTINUED)
Bank United, Cl A 14,000 $ 670
BankAmerica 5,200 449
BankBoston 7,400 412
Beneficial 4,000 613
Citicorp 2,800 418
CMAC Investment 100 6
Conseco 8,500 397
Crestar Financial 6,900 376
Cullen/Frost Bankers 6,400 347
FHLMC 17,400 819
First American of Tennessee 4,000 192
First Chicago NBD 3,300 292
First Security 6,300 135
First Tennessee National 9,500 300
Firstar 600 23
Fleet Financial Group 13,660 1,141
H.F. Ahmanson 8,000 568
Household International 8,500 423
Mellon Bank 12,400 864
MGIC Investment 18,100 1,033
PNC Bank 12,500 673
Regions Financial 7,100 292
Summit Bancorp 1,900 90
Torchmark 18,600 851
Travelers 12,099 733
Washington Mutual 3,850 167
-------
14,979
-------
HEALTH CARE (10.3%)
Abbott Laboratories 16,900 690
American Home Products 21,400 1,107
Baxter International 15,000 807
Bristol-Myers Squibb 16,500 1,896
Eli Lilly 10,900 720
Healthsouth* 30,302 809
Johnson & Johnson 2,800 206
Merck 6,700 896
9
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
CAPITAL GROWTH FUND--CONCLUDED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
HEALTH CARE (CONTINUED)
Tenet Healthcare* 34,800 $ 1,087
U.S. Surgical 7,800 356
Warner Lambert 9,400 652
-------
9,226
-------
TECHNOLOGY (9.0%)
Analog Devices* 2,400 59
Automatic Data Processing 3,500 255
Ceridian* 16,700 981
Cisco Systems* 11,400 1,050
Compaq Computer 3,524 100
Dr Solomon's Group PLC, ADR* 600 21
EMC* 10,100 453
IBM 9,900 1,137
Intel 7,400 549
Microsoft* 12,100 1,311
Networks Associates* 13,300 637
Sun Microsystems* 6,600 287
Texas Instruments 6,000 350
Xerox 9,200 935
------
8,125
------
TRANSPORTATION (3.0%)
Burlington Northern Santa Fe 11,600 1,139
Continental Airlines, Cl B* 5,800 353
Delta Air Lines 7,200 931
Trans World Air* 3,300 245
-------
2,668
-------
Total Common Stocks
(Cost $74,536) 86,538
-------
- --------------------------------------------------------------------------------
SHARES/FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------------------------
PREFERRED STOCKS (0.6%)
ENERGY (0.2%)
EVI, CV to 0.6250 Shares,
Callable 11/4/00 @ 51.75 700 $ 30
EVI, CV to 0.6250 Shares,
Callable 11/4/00 @ 51.75 (B) 2,600 111
-------
141
-------
TECHNOLOGY (0.4%)
Microsoft, CV to 1 Share 4,000 380
-------
Total Preferred Stocks
(Cost $478) 521
-------
CORPORATE BONDS (0.3%)
Office Depot, CV to 29.2635
Shares, Callable 12/11/98
@ 64.116 (A) (C)
0.000%, 12/11/07 $ 300 280
-------
Total Corporate Bonds
(Cost $196) 280
-------
REGISTERED INVESTMENT COMPANIES (0.4%)
Dollar General, STRYPES* 8,100 318
-------
Total Registered Investment Companies
(Cost $319) 318
-------
REPURCHASE AGREEMENTS (4.3%)
Morgan Stanley
6.15%, dated 06/30/98,
matures 07/01/98, repurchase
price $3,862,470 (collateralized
by various FNMA obligations:
total market value $3,971,125) $3,862 3,862
-------
Total Repurchase Agreements
(Cost $3,862) 3,862
-------
10
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
VALUE (000)
- --------------------------------------------------------------------------------
Total Investments (101.8%)
(Cost $79,391) $91,519
-------
OTHER ASSETS AND LIABILITIES, NET (-1.8%) (1,607)
-------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 4,371,381 outstanding
shares of beneficial interest 62,745
Accumulated net realized gain
on investments 15,039
Net unrealized appreciation
on investments 12,128
-------
Total Net Assets (100.0%) $89,912
=======
Net Asset Value, Offering and
Redemption Price Per Share $20.56
=======
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
CV -- CONVERTIBLE
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
PLC -- PUBLIC LIMITED CORPORATION
REIT -- REAL ESTATE INVESTMENT TRUST
STRYPES -- STRUCTURED YIELD PRODUCT EXCHANGE SECURITIES
(A) -- ZERO COUPON BOND
(B) -- PRIVATE PLACEMENT SECURITY
(C) -- PUT AND DEMAND FEATURES EXIST REQUIRING THE ISSUER
TO REPURCHASE THE INSTRUMENT PRIOR TO MATURITY.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
11
<PAGE>
STATEMENT OF NET ASSETS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
INVESTMENT GRADE BOND FUND
- -------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- -------------------------------------------------------------
U.S. TREASURY OBLIGATIONS (38.6%)
U.S. Treasury Bonds
7.500%, 11/15/16 $ 750 $ 900
8.125%, 08/15/19 1,550 1,998
6.000%, 02/15/26 500 520
6.125%, 11/15/27 750 804
U.S. Treasury Notes
5.875%, 11/30/01 500 505
5.875%, 11/15/05 700 713
------
Total U.S. Treasury Obligations
(Cost $5,112) 5,440
------
CORPORATE OBLIGATIONS (46.4%)
FINANCE (33.3%)
AT&T Capital, MTN
6.410%, 08/13/99 250 250
Bank of Boston
6.625%, 12/01/05 100 103
Coneseco
6.800%, 06/15/05 200 200
Countrywide Home Loan, MTN
6.840%, 10/22/04 100 103
6.510%, 02/11/05 300 302
Ford Motor Credit
7.000%, 09/25/01 400 411
6.500%, 02/28/02 300 305
General Motors Acceptance
7.125%, 05/01/01 300 308
General Motors Acceptance, MTN
7.050%, 04/23/02 150 155
Great Western
8.600%, 02/01/02 100 107
Homeside Lending, MTN
6.875%, 05/15/00 510 516
International Lease, MTN
5.957%, 01/15/02 100 100
Liberty Property, MTN
6.600%, 06/05/02 200 200
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Merrill Lynch, MTN
6.060%, 10/15/01 $625 $ 624
Morgan Stanley, MTN,
Callable 03/09/01 @ 100
6.090%, 03/09/11 250 250
Salomon
7.300%, 05/15/02 250 260
Salomon Smith Barney
6.250%, 01/15/05 250 248
SunAmerica
6.200%, 10/31/99 250 251
------
4,693
------
INDUSTRIAL (13.1%)
American Home Products
7.700%, 02/15/00 125 128
7.900%, 02/15/05 300 329
Bausch & Lomb
6.750%, 12/15/04 150 152
Ikon Capital, MTN
6.730%, 06/15/01 150 152
Lockheed Martin
6.550%, 05/15/99 50 50
Philip Morris
7.250%, 09/15/01 300 308
7.500%, 04/01/04 150 158
Praxair
6.900%, 11/01/06 175 182
US West Capital
6.375%, 07/15/08 400 398
------
1,857
------
Total Corporate Obligations
(Cost $6,505) 6,550
------
U.S. GOVERNMENT AGENCY OBLIGATIONS (4.8%)
FHLMC
7.500%, 09/01/03 176 180
FNMA
7.000%, 10/01/03 483 491
------
12
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------
FACE
AMOUNT (000) VALUE (000)
- --------------------------------------------------------------
Total U.S. Government Agency Obligations
(Cost $666) $ 671
-------
BANK NOTE (1.2%)
Capital One
6.530%, 11/26/99 $ 175 175
-------
Total Bank Note
(Cost $175) 175
-------
REPURCHASE AGREEMENTS (7.2%)
Morgan Stanley
5.25%, dated 06/30/98,
matures 07/01/98, repurchase
price $1,011,497 (collateralized by
an U.S. Treasury Note: market
value $1,036,634) 1,011 1,011
-------
Total Repurchase Agreements
(Cost $1,011) 1,011
-------
Total Investments (98.2%)
(Cost $13,469) 13,847
-------
OTHER ASSETS AND LIABILITIES, NET (1.8%) 256
-------
- ------------------------------------------------------------
VALUE (000)
- ------------------------------------------------------------
NET ASSETS:
Portfolio Shares (unlimited
authorization -- no par value)
based on 1,362,805 outstanding
shares of beneficial interest $13,674
Accumulated net realized gain
on investments 52
Net unrealized appreciation
on investments 378
Overdistributed net investment income (1)
-------
Total Net Assets (100.0%) $14,103
=======
Net Asset Value, Offering and
Redemption Price Per Share $10.35
=======
FHLMC -- FEDERAL HOME LOAN MORTGAGE CORPORATION
FNMA -- FEDERAL NATIONAL MORTGAGE ASSOCIATION
MTN -- MEDIUM TERM NOTE
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
13
<PAGE>
SCHEDULE OF INVESTMENTS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
INTERNATIONAL EQUITY FUND
- -------------------------------------------------------------
SHARES VALUE (000)
- -------------------------------------------------------------
FOREIGN COMMON STOCKS (91.0%)
ARGENTINA (0.6%)
YPF Sociedad Anonima,
Cl D, ADR 3,900 $ 117
------
AUSTRALIA (2.3%)
Australia & New Zealand
Banking Group 33,190 230
QBE Insurance 51,357 182
------
412
------
BRAZIL (0.9%)
Telebras ADR 1,550 169
------
CANADA (0.4%)
Suncor 2,213 75
------
FINLAND (0.4%)
Sampo Insurance, Cl A 1,600 76
------
FRANCE (9.9%)
AXA 3,750 422
Dexia 2,790 376
Elf Aquitaine 2,750 387
Groupe Danone 485 134
Scor 900 57
Lyonnaise des Eaux 1,450 239
Technip 1,600 196
------
1,811
------
GERMANY (9.5%)
Allianz AG 890 297
Bayer 4,000 207
Bayerische Motoren Werke 189 191
Bayerische Motoren Werke - New* 37 37
Buderus 250 125
Commerzbank 3,800 145
Hoechst 4,600 232
Man 180 70
Preussag 785 281
Veba 2,400 157
------
1,742
------
- -------------------------------------------------------------
SHARES VALUE (000)
- -------------------------------------------------------------
GREECE (1.7%)
Greek Telecom 12,380 $ 318
------
HONG KONG (1.1%)
Hutchison Whampoa 21,000 111
National Mutual Asia 132,000 84
Sung Hung Kai Properties 156 1
------
196
------
INDONESIA (0.0%)
Modern Photo Film* 60,000 3
------
ITALY (6.8%)
Banca Popolare di Milano 25,800 205
ENI 36,600 240
Istituto Bancario san Paolo
di Torino 14,630 211
Montedison 120,800 150
Saipem 22,000 113
Telecom Italia 45,860 338
------
1,257
------
JAPAN (9.1%)
Canon 11,000 249
Eisai 11,000 150
Fuji Photo Film 5,000 174
Honda Motor 6,000 213
Sankyo 7,000 159
Sony 900 77
Sony ADR 1,600 138
Takefuji 1,800 83
TDK 3,000 221
Terumo 13,300 211
------
1,675
------
NETHERLANDS (7.3%)
Akzo Nobel 1,150 256
ING Groep 9,098 596
Koninklijke PTT Nederland 2,420 93
New Holland 5,200 102
Philips Electronics 2,800 236
TNT Post Group* 2,420 62
------
1,345
------
14
<PAGE>
================================================================================
UNAUDITED
- --------------------------------------------------------------------------------
SHARES VALUE (000)
- --------------------------------------------------------------------------------
NEW ZEALAND (1.4%)
Fernz 68,400 $ 153
Fletcher Challenge Building
Division 74,677 93
------
246
------
NORWAY (2.8%)
Orkla AS, Cl A* 4,500 105
Petroleum Geo Services ADR 8,000 244
Sparebanken NOR 6,050 174
------
523
------
PERU (0.8%)
CPT Telefoncia del Peru 5,300 108
Credicorp 2,420 36
------
144
------
PORTUGAL (1.3%)
Banco Espirito Santo 2,160 65
Banco Espirito Santo Rights* 225 2
Portugal Telecom ADR 3,200 169
------
236
------
SINGAPORE (0.5%)
Overseas Chinese Bank 24,800 85
------
SPAIN (3.3%)
Repsol 4,200 231
Telefonica de Espana 8,072 373
------
604
------
SWEDEN (1.6%)
Skandia Forsakrings 8,000 114
Volvo, Cl B 5,800 173
------
287
------
SWITZERLAND (9.4%)
Asea Brown Boveri Group 105 155
Credit Suisse Group 720 160
Nestle* 200 429
Novartis 301 502
UBS AG - Registered* 1,266 471
------
1,717
------
- -------------------------------------------------------------
SHARES VALUE (000)
- -------------------------------------------------------------
UNITED KINGDOM (19.4%)
Allied Domecq 11,100 $ 104
Bank of Ireland 22,049 454
Bass 12,860 241
British Aerospace 35,200 270
British Petroleum 19,397 283
Diageo 20,432 242
General Electric 28,600 247
Ladbroke Group 35,000 192
Laporte 13,400 161
Lucasvarity 60,055 239
National Westminster Bank 9,810 175
Next 19,000 163
Royal & Sun Alliance 12,200 126
Siebe 11,300 226
Smithkline Beecham 17,440 213
Storehouse 54,877 230
-------
3,566
-------
PANAMA (0.5%)
Banco Latinamericano
de Exportaciones 2,900 89
-------
Total Foreign Common Stocks
(Cost $15,026) 16,693
-------
FOREIGN PREFERRED STOCKS (2.0%)
GERMANY (2.0%)
Gea 477 187
Man 700 189
-------
376
-------
Total Foreign Preferred Stocks
(Cost $316) 376
-------
Total Investments (93.0%)
(Cost $15,342) $17,069
-------
* NON-INCOME PRODUCING SECURITY
ADR -- AMERICAN DEPOSITORY RECEIPT
CL -- CLASS
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (000)
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998 UNAUDITED
<TABLE>
<CAPTION>
--------------
INTERNATIONAL
EQUITY
FUND
--------------
Assets:
<S> <C>
Investments at Market Value (Cost $15,342) ............................. $17,069
Cash and Foreign Currency .............................................. 956
Receivables for Investment Securities Sold ............................. 280
Receivables for Portfolio Shares Sold .................................. 65
Other Assets ........................................................... 92
-------
Total Assets ........................................................... 18,462
-------
Liabilities:
Payable for Securities Purchased ....................................... 86
Accrued Expenses ....................................................... 22
-------
Total Liabilities ...................................................... 108
-------
Net Assets:
Portfolio Shares (Unlimited Authorization -- No Par Value)
Based on 1,339,810 Outstanding Shares of Beneficial Interest ......... 15,512
Undistributed Net Investment Income .................................... 154
Accumulated Net Realized Gain on Investments ........................... 984
Accumulated Net Realized Loss on Foreign Currency Transactions ......... (25)
Net Unrealized Appreciation on Forward Foreign Currency Contracts,
Foreign Currency, and Translation of Other Assets
and Liabilities in Foreign Currency .................................. 2
Net Unrealized Appreciation on Investments ............................. 1,727
-------
Total Net Assets ....................................................... $18,354
=======
Net Asset Value, Offering and Redemption Price Per Share .................. $13.70
=======
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
16
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS (000)
===========================================================================================================================
STI CLASSIC VARIABLE TRUST FUNDS FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1998 UNAUDITED
VALUE
INCOME MID-CAP SMALL CAP CAPITAL INVESTMENT INTERNATIONAL
STOCK EQUITY EQUITY GROWTH GRADE EQUITY
FUND FUND FUND FUND BOND FUND FUND
------ ------- --------- ------- --------- -------------
Investment Income:
<S> <C> <C> <C> <C> <C> <C>
Interest Income ...................................... $ 218 $ 63 $ 27 $ 207 $367 $ 22
Dividend Income ...................................... 977 61 109 414 -- 254
Less: Foreign Taxes Withheld ......................... -- -- -- -- -- (24)
------- ------ ----- ------- ---- ------
Total Investment Income .......................... 1,195 124 136 621 367 252
------- ------ ----- ------- ---- ------
Expenses:
Investment Advisory Fees ............................. 343 157 62 435 44 102
Less: Investment Advisory Fees Waived ................ (137) (58) (37) (159) (40) (31)
Administrator Fees ................................... 30 30 30 30 30 37
Custody Fees ......................................... 41 5 2 30 2 17
Transfer Agent Fees .................................. 44 6 2 34 2 --
Professional Fees .................................... 52 10 3 37 3 5
Trustee Fees ......................................... 7 1 1 9 1 1
Registration Fees .................................... -- -- -- -- -- (12)
Printing Expenses .................................... 24 4 2 15 2 3
Pricing Fees ......................................... 1 -- -- -- -- 6
Insurance and Other Fees ............................. 1 1 -- 1 -- --
Amortization of Deferred Organization Costs .......... 1 1 -- 1 1 2
------- ------ ----- ------- ---- ------
Total Expenses ................................... 407 157 65 433 45 130
------- ------ ----- ------- ---- ------
Net Investment Income (Loss) ................... 788 (33) 71 188 322 122
------- ------ ----- ------- ---- ------
Net Realized Gain on Securities Sold ................. 5,113 1,874 201 7,137 68 871
Net Realized Loss on Foreign Currency Transactions ... -- -- -- -- -- (13)
Net Unrealized Appreciation
(Depreciation) on Investments ...................... (436) 51 (551) 5,822 122 1,228
Net Unrealized Appreciation (Depreciation)
on Forward Currency Contracts, Foreign
Currency, and Translation of Other Assets
and Liabilities in Foreign Currency ................ -- -- -- -- -- 2
------- ------ ----- ------- ---- ------
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currency ......... 4,677 1,925 (350) 12,959 190 2,088
------- ------ ----- ------- ---- ------
Increase (Decrease) in Net Assets from Operations ...... $ 5,465 $1,892 $(279) $13,151 $512 $2,210
======= ====== ===== ======= ==== ======
<FN>
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (000)
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS
<TABLE>
<CAPTION>
VALUE INCOME MID-CAP
STOCK FUND EQUITY FUND
----------------------- ----------------------
01/01/98- 01/01/97- 01/01/98- 01/01/97-
06/30/98 12/31/97 06/30/98 12/31/97
--------- --------- --------- ---------
Investment Activities:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ................................. $ 788 $ 1,115 $ (33) $ (14)
Net Realized Gain on Investments and Foreign
Currency Transactions ...................................... 5,113 6,730 1,874 2,335
Net Unrealized Appreciation (Depreciation) on Investments .... (436) 4,177 51 1,514
Net Unrealized Appreciation (Depreciation) on Forward
Foreign Currency Contracts, Foreign Currency, and
Translation of Other Assets and Liabilities in
Foreign Currency ........................................... -- -- -- --
------- ------- ------- -------
Increase in Net Assets Resulting from Operations ............. 5,465 12,022 1,892 3,835
------- ------- ------- -------
Distributions to Shareholders:
Net Investment Income ........................................ (788) (1,121) -- (13)
Capital Gains ................................................ -- (904) -- (736)
------- ------- ------- -------
Total Distributions .......................................... (788) (2,025) -- (749)
------- ------- ------- -------
Capital Transactions:
Proceeds from Shares Issued .................................. 17,485 32,879 5,114 9,159
Reinvestment of Cash Distributions ........................... 787 2,025 -- 749
Cost of Shares Repurchased ................................... (1,092) (3,370) (484) (3,375)
------- ------- ------- -------
Increase in Net Assets from Capital Transactions ............. 17,180 31,534 4,630 6,533
------- ------- ------- -------
Total Increase in Net Assets ................................. 21,857 41,531 6,522 9,619
------- ------- ------- -------
Net Assets:
Beginning of Period .......................................... 72,747 31,216 23,913 14,294
------- ------- ------- -------
End of Period ................................................ $94,604 $72,747 $30,435 $23,913
======= ======= ======= =======
Shares Issued and Redeemed:
Shares Issued ................................................ 1,071 2,358 346 708
Shares Issued in Lieu of Cash Distributions .................. 48 138 -- 55
Shares Redeemed .............................................. (66) (230) (32) (257)
------- ------- ------- -------
Net Share Transactions ....................................... 1,053 2,266 314 506
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
SMALL CAP CAPITAL GROWTH
EQUITY FUND FUND
-------------------- -----------------------
01/01/98- 10/22/97*- 01/01/98- 01/01/97-
06/30/98 12/31/97 06/30/98 12/31/97
--------- ---------- --------- ---------
Investment Activities:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ................................. $ 71 $ 20 $ 188 $ 311
Net Realized Gain on Investments and Foreign
Currency Transactions ...................................... 201 20 7,137 7,858
Net Unrealized Appreciation (Depreciation) on Investments .... (551) (103) 5,822 4,911
Net Unrealized Appreciation (Depreciation) on Forward
Foreign Currency Contracts, Foreign Currency, and
Translation of Other Assets and Liabilities in
Foreign Currency ........................................... -- -- -- --
------- ------- ------- -------
Increase in Net Assets Resulting from Operations ............. (279) (63) 13,147 13,080
------- ------- ------- -------
Distributions to Shareholders:
Net Investment Income ........................................ (71) (20) (188) (312)
Capital Gains ................................................ -- -- -- (1,300)
------- ------- ------- -------
Total Distributions .......................................... (71) (20) (188) (1,612)
------- ------- ------- -------
Capital Transactions:
Proceeds from Shares Issued .................................. 6,224 7,626 16,174 27,091
Reinvestment of Cash Distributions ........................... 71 20 188 1,612
Cost of Shares Repurchased ................................... (393) -- (1,286) (3,483)
------- ------- ------- -------
Increase in Net Assets from Capital Transactions ............. 5,902 7,646 15,076 25,220
------- ------- ------- -------
Total Increase in Net Assets ................................. 5,552 7,563 28,035 36,688
------- ------- ------- -------
Net Assets:
Beginning of Period .......................................... 7,563 -- 61,877 25,189
------- ------- ------- -------
End of Period ................................................ $13,115 $ 7,563 $89,912 $61,877
======= ======= ======= =======
Shares Issued and Redeemed:
Shares Issued ................................................ 609 772 843 1,771
Shares Issued in Lieu of Cash Distributions .................. 7 2 9 100
Shares Redeemed .............................................. (39) -- (64) (216)
------- ------- ------- -------
Net Share Transactions ....................................... 577 774 788 1,655
======= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
INVESTMENT GRADE BOND INTERNATIONAL
FUND EQUITY FUND
----------------------- ----------------------
01/01/98- 01/01/97- 01/01/98- 01/01/97-
06/30/98 12/31/97 06/30/98 12/31/97
--------- -------- --------- ---------
Investment Activities:
<S> <C> <C> <C> <C>
Net Investment Income (Loss) ................................. $ 322 $ 493 $ 122 $ 33
Net Realized Gain on Investments and Foreign
Currency Transactions ...................................... 68 24 858 101
Net Unrealized Appreciation (Depreciation) on Investments .... 122 220 1,228 484
Net Unrealized Appreciation (Depreciation) on Forward
Foreign Currency Contracts, Foreign Currency, and
Translation of Other Assets and Liabilities in
Foreign Currency ........................................... -- -- 2 --
------- ------- ------- -------
Increase in Net Assets Resulting from Operations ............. 512 737 2,210 618
------- ------- ------- -------
Distributions to Shareholders:
Net Investment Income ........................................ (323) (493) -- (1)
Capital Gains ................................................ -- -- -- --
------- ------- ------- -------
Total Distributions .......................................... (323) (493) -- (1)
------- ------- ------- -------
Capital Transactions:
Proceeds from Shares Issued .................................. 4,050 4,194 2,798 12,992
Reinvestment of Cash Distributions ........................... 323 493 -- 1
Cost of Shares Repurchased ................................... (361) (3,068) (501) (758)
------- ------- ------- -------
Increase in Net Assets from Capital Transactions ............. 4,012 1,619 2,297 12,235
------- ------- ------- -------
Total Increase in Net Assets ................................. 4,201 1,863 4,507 12,852
------- ------- ------- -------
Net Assets:
Beginning of Period .......................................... 9,902 8,039 13,847 995
------- ------- ------- -------
End of Period ................................................ $14,103 $ 9,902 $18,354 $13,847
======= ======= ======= =======
Shares Issued and Redeemed:
Shares Issued ................................................ 395 421 211 1,136
Shares Issued in Lieu of Cash Distributions .................. 31 49 -- --
Shares Redeemed .............................................. (35) (309) (38) (67)
------- ------- ------- -------
Net Share Transactions ....................................... 391 161 173 1,069
======= ======= ======= =======
<FN>
*Commencement of Operations
Amounts designated as "--" are either $0 or have been rounded to $0.
</FN>
18 & 19
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS FOR THE PERIODS FROM INCEPTION THROUGH JUNE 30,
1998
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
NET NET REALIZED AND
NET ASSET VALUE INVESTMENT UNREALIZED GAINS (LOSSES) DISTRIBUTIONS FROM DISTRIBUTIONS FROM
BEGINNING OF PERIOD INCOME (LOSS) ON INVESTMENTS NET INVESTMENT INCOME REALIZED CAPITAL GAINS
------------------- ------------- ------------------------- --------------------- ----------------------
VALUE INCOME STOCK FUND
<S> <C> <C> <C> <C> <C> <C>
1998** $15.21 $ 0.14 $ 1.00 $(0.14) $ --
1997 12.41 0.28 3.02 (0.28) (0.22)
1996 10.67 0.23 1.74 (0.23) --
1995 (1) 10.00 0.06 0.67 (0.06) --
MID-CAP EQUITY FUND (A)
1998** $13.97 $(0.01) $ 1.06 $ -- $ --
1997 11.86 (0.01) 2.64 (0.01) (0.51)
1996 10.27 0.06 1.59 (0.06) --
1995 (1) 10.00 0.05 0.27 (0.05) --
SMALL CAP EQUITY FUND
1998** $ 9.77 $ 0.06 $(0.06) $(0.06) $ --
1997 (2) 10.00 0.03 (0.23) (0.03) --
CAPITAL GROWTH FUND
1998** $17.27 $ 0.05 $ 3.29 $(0.05) $ --
1997 13.06 0.10 4.63 (0.10) (0.42)
1996 10.66 0.12 2.40 (0.12) --
1995 (1) 10.00 0.04 0.66 (0.04) --
INVESTMENT GRADE BOND FUND
1998** $10.19 $ 0.27 $ 0.16 $(0.27) $ --
1997 9.92 0.58 0.27 (0.58) --
1996 10.25 0.54 (0.33) (0.54) --
1995 (1) 10.00 0.13 0.25 (0.13) --
INTERNATIONAL EQUITY FUND
1998** $11.87 $ 0.07 $ 1.76 $ -- $ --
1997 10.16 0.03 1.68 -- --
1996 (3) 10.00 0.01 0.16 (0.01) --
</TABLE>
<TABLE>
<CAPTION>
RATIO OF
RATIO OF EXPENSES TO
NET ASSET NET ASSETS RATIO OF NET INVESTMENT AVERAGE NET ASSETS
VALUE END TOTAL END OF EXPENSES TO INCOME (LOSS) TO (EXCLUDING WAIVERS
OF PERIOD RETURN PERIOD (000) AVERAGE NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS)
--------- ------ ------------ ------------------ ------------------ ------------------
VALUE INCOME STOCK FUND
<S> <C> <C> <C> <C> <C> <C> <C>
1998** $16.21 7.55% $94,604 0.95% 1.83% 1.27%
1997 15.21 26.82 72,747 0.95 2.09 1.23
1996 12.41 18.64 31,216 0.95 2.45 1.95
1995 (1) 10.67 7.31* 4,015 0.95 2.98 5.72
MID-CAP EQUITY FUND (A)
1998** $15.02 7.09% $30,435 1.15% (0.24)% 1.35%
1997 13.97 22.23 23,913 1.15 (0.07) 1.77
1996 11.86 16.05 14,294 1.15 0.58 2.79
1995 (1) 10.27 3.19* 3,409 1.15 2.22 6.34
SMALL CAP EQUITY FUND
1998** $ 9.71 (0.04)% $13,115 1.20% 1.30% 1.88%
1997 (2) 9.77 (2.05)* 7,563 1.20 1.62 2.66
CAPITAL GROWTH FUND
1998** $20.56 19.38% $89,912 1.15% 0.51% 1.57%
1997 17.27 36.54 61,877 1.15 0.70 1.60
1996 13.06 23.75 25,189 1.15 1.15 2.43
1995 (1) 10.66 6.96* 3,778 1.15 1.69 6.18
INVESTMENT GRADE BOND FUND
1998** $10.35 4.32% $14,103 0.75% 5.38% 1.12%
1997 10.19 8.84 9,902 0.75 5.81 1.58
1996 9.92 2.29 8,039 0.75 5.54 2.78
1995 (1) 10.25 3.68* 3,115 0.75 5.04 6.05
INTERNATIONAL EQUITY FUND
1998** $13.70 15.42% $18,354 1.60% 1.43% 1.98%
1997 11.87 16.84 13,847 1.60 0.41 2.93
1996 (3) 10.16 1.70* 995 1.60 1.83 31.39
</TABLE>
RATIO OF
NET INVESTMENT
INCOME (LOSS) TO
AVERAGE NET ASSETS PORTFOLIO
(EXCLUDING WAIVERS TURNOVER
AND REIMBURSEMENTS) RATE
------------------- ---------
VALUE INCOME STOCK FUND
1998** 1.51% 38.93%
1997 1.81 104.84
1996 1.45 79.80
1995 (1) (1.79) 7.17
MID-CAP EQUITY FUND (A)
1998** (0.44)% 56.12%
1997 (0.69) 138.98
1996 (1.06) 139.60
1995 (1) (2.97) 13.29
SMALL CAP EQUITY FUND
1998** 0.62% 17.67%
1997 (2) 0.16 4.11
CAPITAL GROWTH FUND
1998** 0.09% 120.91%
1997 0.25 195.86
1996 (0.13) 148.48
1995 (1) (3.34) 8.05
INVESTMENT GRADE BOND FUND
1998** 5.01% 46.81%
1997 4.98 219.22
1996 3.51 303.30
1995 (1) (0.26) 108.55
INTERNATIONAL EQUITY FUND
1998** 1.05% 58.03%
1997 (0.92) 99.14
1996 (3) (27.96) --
(1) Commenced operations on October 2, 1995. All ratios for the period have
been annualized.
(2) Commenced operations on October 22, 1997. All ratios for the period have
been annualized.
(3) Commenced operations on November 7, 1996. All ratios for the period have
been annualized.
* Returns are for the period indicated and have not been annualized.
** For the semi-annual period ended June 30, 1998. Return is for the period
indicated and has not been annualized. All ratios for the period have been
annualized.
(A) During the fiscal year ended December 31, 1996, the Aggressive Growth Fund
changed its name to the Mid-Cap Equity Fund.
Amounts designated as "--" are either $0 or rounded to $0.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
20 & 21
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
1. Organization
The STI Classic Variable Trust (the "Trust") was organized as a Massachusetts
business trust under a Declaration of Trust dated April 18, 1995. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company with six funds: the Value Income Stock Fund, the
Mid-Cap Equity Fund, the Small Cap Equity Fund, the Capital Growth Fund, the
International Equity Fund (collectively "the Equity Funds") and the Investment
Grade Bond Fund. The assets of each Fund are segregated, and a shareholder's
interest is limited to the Fund in which shares are held. The Trust's prospectus
provides a description of each Fund's investment objective policies and
strategies.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Trust. These policies are in conformity with generally accepted accounting
principles.
SECURITY VALUATION -- Investments in equity securities that are traded on a
national securities exchange (or reported on the NASDAQ national market
system) are valued at the last quoted sales price, if readily available for
such equity securities, on each business day. If there is no such reported
sale, these securities, and unlisted securities for which market quotations
are readily available, are valued at the most recently quoted bid price.
Foreign securities in the International Equity Fund are valued based upon
quotations from the primary market in which they are traded.
Debt obligations exceeding sixty days to maturity for which market
quotations are readily available are valued at the most recently quoted bid
price. Debt obligations with sixty days or less until maturity may be
valued either at the most recently quoted bid price or at their amortized
cost.
FEDERAL INCOME TAXES -- It is each Fund's intention to qualify as a
regulated investment company for Federal income tax purposes and distribute
all of its taxable income and net capital gains. Accordingly, no provisions
for Federal income taxes are required.
SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Dividend
income is recognized on ex-dividend date, and interest income is recognized
on an accrual basis and includes, where applicable, the pro rata
amortization of premium or accretion of discount. The cost used in
determining net realized capital gains and losses on the sale of securities
are those of the specific securities sold, adjusted for the accretion and
amortization of purchase discounts and premiums during the applicable
holding period. Purchase discounts and premiums on securities held by the
Investment Grade Bond and the Equity Funds are accreted and amortized to
maturity using the scientific interest method, which approximates the
effective interest method.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the custodian bank until the repurchase agreements
mature. Provisions of the repurchase agreements ensure that the market
value of the collateral, including accrued interest thereon, is sufficient
in the event of default of the counterparty. If the counterparty defaults
and the value of the collateral declines or if the counterparty enters an
insolvency proceeding, realization of the collateral by the Funds may be
delayed or limited.
NET ASSET VALUE PER SHARE -- The net asset value per share of each Fund is
calculated on each business day. In general, it is computed by dividing the
assets of each Fund, less its liabilities, by the number of outstanding
shares of the respective class of the Fund. The offering price per share
for
22
<PAGE>
================================================================================
the shares of the Investment Grade Bond and Equity Funds is the net asset
value per share.
FOREIGN CURRENCY TRANSACTIONS -- With respect to the International
Equity Fund, the books and records are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars on the following basis:
[bullet] market value of investment securities, assets and liabilities at
the current rate of exchange; and
[bullet] purchases and sales of investment securities, income, and
expenses at the relevent rates of exchange prevailing on the
respective dates of such transactions.
The International Equity Fund does not isolate the portion of gains and
losses on investments in equity securities that is due to changes in the
foreign exchange rates from that which is due to change in market prices of
equity securities.
The International Equity Fund reports certain foreign currency-related
transactions as components of realized gains for financial reporting
purposes, whereas such components are treated as ordinary income for
Federal income tax purposes.
OTHER -- Distributions from net investment income for the Investment Grade
Bond Fund are declared daily and paid monthly to shareholders.
Distributions from net investment income for the Value Income Stock Fund,
the Mid-Cap Equity Fund, the Small Cap Equity Fund and the Capital Growth
Fund are declared and paid quarterly to shareholders. Distributions from
net investment income for the International Equity Fund are declared and
paid annually to shareholders. Any net realized capital gains are
distributed to shareholders at least annually. Expenses related to a
specific Fund are charged to that Fund. Other operating expenses of the
Trust are pro-rated to the Funds on the basis of relative net assets.
USE OF ESTIMATES -- The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that effect the reported
amount of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and reported amounts
of revenues and expenses during the reporting period. Actual amounts could
differ from these estimates.
3. Administration and Distribution Agreements
The Trust and SEI Investments Mutual Funds Service (formerly known as SEI Fund
Resources (the "Administrator") are parties to an administration agreement (the
"Administration Agreement") dated August 18, 1995 as amended November 19, 1997.
Under the terms of the Administration Agreement the Administrator is entitled to
a fee, subject to a minimum, (expressed as a percentage of the combined average
daily net assets of the Trust and the STI Classic Funds) of: .12% up to $1
billion, .09% on the next $4 billion, .07% on the next $3 billion, .065% on the
next $2 billion, and .06% for over $10 billion.
The Trust and Federated Services Company are parties to a Transfer Agency
servicing agreement dated August 2, 1995 under which Federated Services Company
provides transfer agency services to the Trust.
The Trust and SEI Investments Distribution Co. ("the Distributor") are
parties to a Distribution Agreement dated August 18, 1995. The Distributor
receives no fees for its services under this agreement.
4. Investment Advisory Agreement
Investment advisory services are provided to the Trust by STI Capital
Management, N.A. ("STI Capital"). Under the terms of the investment advisory
agreements, STI Capital is entitled to receive a
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Concluded)
================================================================================
STI CLASSIC VARIABLE TRUST FUNDS JUNE 30, 1998
fee from the Trust, computed daily and paid monthly, at an annual rate of .74%,
1.15%, .80%, 1.15%, 1.15% and 1.25% of the average daily net assets of the
Investment Grade Bond Fund, Capital Growth Fund, Value Income Stock Fund,
Mid-Cap Equity Fund, Small Cap Equity Fund and International Equity Fund,
respectively. STI Capital has voluntarily agreed to waive all or a portion of
its fees (and to reimburse Funds' expenses) in order to limit operating
expenses. Fee waivers and expense reimbursements are voluntary and may be
terminated at any time.
SunTrust Bank, Atlanta acts as Custodian for all the Funds except the
International Equity Fund which has a custodian agreement with the Bank of New
York. Fees of the Custodian are paid on the basis of net assets. The Custodian
plays no role in determining the investment policies of the Trust or which
securities are to be purchased or sold in the Funds.
5. Organizational Costs and Transactions
with Affiliates
The Trust incurred organization costs of approximately $55,566. These costs have
been deferred in the accounts of the Funds and are being amortized on a straight
line basis over a period of sixty months commencing with operations. The costs
include legal fees of approximately $44,153 for organizational work performed by
a law firm of which two officers of the Trust are partners. In the event any of
the initial shares of the Trust are redeemed by any holder thereof during the
period that the Trust is amortizing its organizational costs, the redemption
proceeds payable to the holder thereof by the Trust will be reduced by the
unamortized organizational cost in the same ratio as the number of initial
shares being redeemed bears to the number of initial shares outstanding at the
time of redemption.
Certain officers of the Trust are also officers of the Administrator and/or the
Distributor. Such officers are paid no fees by the Trust for serving as officers
of the Trust.
6. Investment Transactions
The cost of security purchases and the proceeds from security sales, excluding
short-term investments, for the period ended June 30, 1998 were as follows:
U.S. GOVT. U.S. GOVT.
PURCHASES SALES PURCHASES SALES
(000) (000) (000) (000)
-------- -------- --------- --------
Value Income Stock Fund .. $ 47,661 $30,680 $ -- $ --
Mid-Cap Equity Fund ...... 18,464 14,498 -- --
Small Cap Equity Fund .... 7,399 1,744 -- --
Capital Growth Fund ...... 103,866 85,918 -- --
Investment Grade
Bond Fund ............. 4,016 2,052 4,318 3,084
International Equity Fund 10,965 8,943 -- --
At June 30, 1998, the total cost of securities and the net realized gains or
losses on securities sold for Federal income tax purposes was not materially
different from amounts reported for financial reporting purposes. The aggregate
gross unrealized appreciation and depreciation for securities held by the
Investment Grade Bond and Equity Funds at June 30, 1998 was as follows:
NET UNREALIZED
APPRECIATED DEPRECIATED APPRECIATED/
SECURITIES SECURITIES (DEPRECIATION)
(000) (000) (000)
-------- ------------- ----------
Value Income Stock Fund .. $ 8,145 $(3,074) $ 5,071
Mid-Cap Equity Fund ...... 4,631 (2,363) 2,268
Small Cap Equity Fund .... 528 (1,182) (654)
Capital Growth Fund ...... 13,308 (1,180) 12,128
Investment Grade Bond Fund 382 (4) 378
International Equity Fund 2,385 (658) 1,727
24
<PAGE>
================================================================================
7. Concentration of Credit Risk
The Investment Grade Bond Fund invests primarily in investment grade obligations
rated at least BBB or better by S & P or Baa or better by Moody's. Changes by
recognized rating agencies in the ratings of any fixed income security or in the
ability of an issuer to make payments of interest and principal may affect the
value of these investments.
25
<PAGE>
NOTES
<PAGE>
NOTES
<PAGE>
Investment Advisor:
STI Capital Management, N.A.
STI Classic Variable Trust Funds are not deposits, are not insured or guaranteed
by the FDIC or any other government agency, and are not endorsed by
and do not constitute obligations of SunTrust Banks, Inc. or any other of its
affiliates. Investment in the Funds involves risk, including the possible loss
of principal. There is no guarantee that any STI Classic Variable Trust Fund
will achieve its investment objective. The STI Classic Variable Trust Funds are
advised by an affiliate of SunTrust Banks, Inc.
Distributor:
SEI Investments Distribution Co.
This information must be preceded or accompanied by a current prospectus for
each Fund described.
