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<PAGE> 1
===============================================================================
Dear Contract Owner:
The Federal Reserve continued its policy of monetary easing, lowering a key
short-term rate twice last year, then again in January 1996. The Fed has
succeeded so far in slowing economic growth to modest levels, characterized by
strong corporate profits, low inflation, and low unemployment.
The environment was ideal for both stocks and bonds. Stocks rose steadily over
the past six months, landing in record territory at the end of January. Bond
prices also soared, driving yields lower, although prices have retreated
somewhat from their year-end levels.
I encourage your review of this report. Please feel free to contact us if you
have any further questions.
Respectfully submitted,
/s/ ROBERT G. MEPHAM
Robert G. Mepham
President
[LOGO] Security First Trust
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<PAGE> 2
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SECURITY FIRST TRUST:
GROWTH AND INCOME SERIES
AND VALUE EQUITY SERIES
EQUITY MARKET OVERVIEW
The six months ended January 31, 1996 continued to be an exceptionally
strong period for the equity markets. The year past featured one of the best
environments for stocks ever and turned out to be the most profitable year for
stock investors since 1958. The pace of the returns was relatively even
throughout the year, with the second half generating essentially the same
results as the first.
During the year, interest rates declined significantly more than expected
as the Federal Reserve reacted quickly to signs that the rate of economic
growth was moderating. The long Treasury bond yield fell sharply to its
current level near 6%.
Another equally important development supporting stocks in the second half
of the year was the robust rise of corporate profits even as the rate of
economic growth decelerated. When final figures are reported, earnings are
likely to show more than a 20% increase for the year. Other factors also
contributed to the powerful market environment, including relatively mild
inflationary pressures, a stable to slightly stronger U.S. dollar, and continued
strong investor demand for equities. This dynamic combination helped create one
of the most favorable equity environments in history.
EQUITY MARKET OUTLOOK
Although we expect some of the important fundamentals just mentioned to be
present this year, it is unlikely that the gains experienced last year will
continue through 1996. We believe inflation will remain low, economic growth
will moderate, and interest rates will be relatively stable. However, we do
not expect corporate earnings growth to maintain last year's torrid pace.
While the Federal Reserve has moved to ease short-term interest rates during
the past few months, we do not think the rate of economic growth will accelerate
in 1996 and, therefore, expect equity returns to be more moderate. In addition
to the market's underpinnings, extremely strong investor demand for stocks
continued into the early weeks of 1996. The extent to which individual
investors continue to invest in the equity markets will be a key variable over
the next few months. We are gratified by 1995's strong stock market returns,
but feel that more moderate expectations are in order as we proceed through the
rest of the year.
PORTFOLIO MANAGEMENT:
GROWTH AND INCOME SERIES
The six months ended January 31, 1996 were rewarding for your portfolio.
Continued strong performance of financial and consumer nondurable stocks,
specifically stocks of health care companies, contributed positively to
performance. Returns in the energy and utility sectors were not as good, but
they contributed modestly nonetheless to the gains of the past six months.
During the past few months, we added to several cyclical stocks such as
DuPont and Union Camp. Cyclical stocks suffered fairly sharp price declines as
the rate of economic growth appeared to be slowing in the second half of 1995
and, as a result, seemed to offer good relative value.
GROWTH AND INCOME SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Capital Equipment 2.1%
Consumer Non-Durables 24.9%
Consumer Cyclicals 0.7%
Consumer Services 9.9%
Transportation 2.6%
Energy 11.4%
Financial 14.3%
Process Industries 9.5%
Technology 1.5%
Utilities 6.5%
Short-Term Securities 16.6%
</TABLE>
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1
<PAGE> 3
===============================================================================
We maintained an approximately 17% cash position. While this detracted
from last year's performance, we believe that good buying opportunities are
likely to become evident in the months ahead. All in all, the past six months
have been strong, with your fund performing well compared with the broad market
and with the Lipper average of growth and income funds.
GROWTH & INCOME SERIES
15 LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percentage of
Security Portfolio
-------- -------------
<S> <C>
Travelers Group Inv. 2.4
American Express 2.4
Smithkline-Beecham 1.7
Pfizer, Inc. 1.6
Monsanto Co. 1.5
First Interstate Bncp. 1.5
American Home Products 1.5
Honeywell, Inc. 1.5
Pharmacia & Upjohn, Inc. 1.5
British Petroleum, Plc 1.4
Exxon Corp. 1.4
Johnson & Johnson 1.4
Vodafone Group 1.4
Corning, Inc. 1.4
Warner Lambert 1.4
----
TOTAL 24.0
====
</TABLE>
PORTFOLIO MANAGEMENT:
VALUE EQUITY SERIES
The S&P sprinted ahead 14.5% from 7/31/95 through 1/31/96. By October of
1995, value stocks began to outperform growth stocks by a wide margin. After
surging for the first nine months of 1995, technology stocks tumbled in the
fourth quarter of 1995. The Security First Value Equity Fund was positioned to
participate in this value movement.
VALUE EQUITY SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Consumer Non-Durables 14.0%
Consumer Cyclicals 9.0%
Technology 7.3%
Consumer Services 7.9%
Transportation 2.0%
Financial 13.9%
Capital Equipment 6.6%
Energy 10.1%
Process Industries 10.4%
Short-Term Securities 2.5%
Utilities 16.3%
</TABLE>
The fund has an overweight position in financial and utility stocks. The
current fund structure is appropriate given our outlook that 1996 will focus on
capital preservation and value stocks.
VALUE EQUITY SERIES
15 LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percentage of
Security Portfolio
-------- -------------
<S> <C>
Bell South Corp. 3.5
General Motors Corp. 3.3
International Business Machines 3.0
General Telephone Electronics Corp. 2.8
Chevron Corp. 2.4
Gannett Co., Inc. 2.4
Amoco 2.3
Bell Atlantic Corp. 2.2
Exxon Corp. 2.2
NationsBank Corp. 2.2
Mobil Corp. 2.2
Fleet Financial Corp. 2.1
Chemical Banking Corp. 2.0
Kerr-McGee 2.0
BankAmerica Corp. 1.9
----
Total 36.5
====
</TABLE>
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2
<PAGE> 4
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SECURITY FIRST TRUST:
BOND SERIES AND U.S.
GOVERNMENT INCOME SERIES
FIXED-INCOME MARKET OVERVIEW
The environment for fixed-income investors during the six months ended
January 31, was generally positive. During this period, investors saw signs
that the economy was growing weakly relative to the first half of the year, the
employment picture was somewhat gloomy, and the inflation level was relatively
benign. Retail holiday sales at year-end were sluggish, suggesting that
consumers were feeling somewhat strained. The U.S. dollar continued to rise
against most foreign currencies -- a positive for the bond market. Despite a
jump in economic growth in the third quarter, the economy appeared weak
overall. As a result, the Federal Reserve cut key short-term interest rates in
December, and again in January 1996.
As the chart below reveals, interest rates declined significantly from
their highs of 1994. The spread between short and long term bond yields, which
was low toward the end of 1994, has subsequently widened.
INTEREST RATE LEVELS
[GRAPH]
FIXED-INCOME MARKET OUTLOOK
Our outlook for the bond market over the first half of 1996 is moderately
constructive. We believe rates could decline slightly across the yield curve
if the Federal Reserve continues to ease short-term rates in response to signs
of sluggish economic growth. A substantive resolution of the budget deficit
would be viewed positively by investors. In addition, the outlook for
inflation is also benign, and the economic weakness in Europe and Japan that
resulted in monetary easing by foreign central banks bodes well for the U.S.
bond market.
This environment should benefit fixed income securities, especially U.S.
government and high-grade corporate bonds. The incremental yields generated by
our mortgage holdings should continue to aid performance. We intend to remain
fully invested with minimal cash reserves, emphasizing mortgage-backed
securities and high quality corporate bonds.
However, we would be cautious about adding significantly to either sector
at this time. Corporate yield spreads are at the narrow end of a five-year
range and may come under pressure should the economy weaken. The yields on
mortgage securities could also widen if prepayments increase due to lower
interest rates.
PORTFOLIO MANAGEMENT: BOND SERIES
The fund provided solid returns over the six months ended January 31, 1996,
because of both steady coupon income and price appreciation.
We were fully invested during the period, with a small cash reserve and a
portfolio duration slightly longer than the markets, both contributing strongly
to fund performance. We maintained a high-quality portfolio credit average of
AA, with 68% of our holdings in AAA-rated securities.
At the end of January, your fund was invested in 36.2% corporate bonds,
23.8% in U.S. government obligations and 40.0% in federal agency issues.
BOND SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Corporate Bonds 36.2%
Federal Agencies 40.0%
U.S. Government Obligations 23.8%
</TABLE>
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3
<PAGE> 5
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PORTFOLIO MANAGEMENT:
U.S. GOVERNMENT INCOME SERIES
Bonds continued to go up in price and down in yield, fueled primarily by a
lowering of short term interest rates by the Federal Reserve, and a weakening
economy, keeping inflation low. Economic data continues to suggest lower
interest rates into 1996, although most of the drop in yields occurred in
calendar year 1995.
For the six months ending January 31, 1996, the total return on your
portfolio compares favorably to other portfolios invested in intermediate
maturity securities.
We have structured the portfolio for mildly lower interest rates, and
continue to purchase mortgage backed securities to add income to the portfolio.
U.S. GOVERNMENT INCOME SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Federal Agencies 45.6%
U.S. Government Obligations 36.6%
Short-Term Securities 17.8%
</TABLE>
PERFORMANCE OF SECURITY FIRST TRUST
GROWTH AND INCOME SERIES, BOND
SERIES, VALUE EQUITY SERIES AND U.S.
GOVERNMENT INCOME SERIES
The following are the average annual and total returns for each series for
the period ending December 31, 1995, assuming an investment of $10,000 at the
start of the period, and redemption at the end of the period, with dividends
reinvested. These returns are based on past experience. Future values of
shares will fluctuate so that their redemption values may be more or less than
original cost.
Average Annual Total Returns
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth and
Income
Series(1)(2) 31.11% 15.46% 16.33% 12.82%
Bond
Series(1)(2) 16.80% 7.28% 8.56% 7.96%
Value Equity
Series 28.04% N/A*
U.S.
Government
Income 13.51% N/A*
Consumer
Price Index 2.39% 2.54% 2.75% 3.42%
</TABLE>
Compound Total Returns
<TABLE>
<CAPTION>
Fund 1 Year 3 Years 5 Years 10 Years
---- ------ ------- ------- --------
<S> <C> <C> <C> <C>
Growth and
Income
Series(1)(2) 31.11% 53.93% 113.04% 234.15%
Bond
Series(1)(2) 16.80% 23.46% 50.80% 115.15%
Value Equity
Series 28.04% N/A*
U.S.
Government
Income 13.51% N/A*
Consumer
Price Index 2.39% 7.97% 14.52% 40.01%
</TABLE>
* Funds were introduced as of May 1993.
===============================================================================
4
<PAGE> 6
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(1) Return is computed after deduction of all series expenses, but before
deduction of actuarial risk charges and other fees of the variable annuity
account.
(2) From inception to July 1983, Security First Investment Management
Corporation reimbursed the Growth and Income Series for expenses in excess of
the maximum expense limitation, and these reimbursements were repaid from
August 1983 to July 1986. Likewise, the Bond Series was reimbursed for excess
expenses from inception to July 1985, and these reimbursements were repaid from
August 1985 to July 1993. Reimbursement of expenses to a series increases
average annual reimbursements reduces these returns.
(3) For a period of three years from inception, Security Management and
Signet Management have also agreed to reimburse the Value Equity Series for any
remaining expenses exceeding a limitation equivalent annually to 1% and to
reimburse the U.S. Government Income Series for any remaining expenses
exceeding a limitation a equivalent annually to .7%.
===============================================================================
5
<PAGE> 7
===============================================================================
SECURITY FIRST TRUST GROWTH
AND INCOME SERIES
The graph and Per Share Data Table below illustrate the growth in per share
value for the period ending December 31, 1995, of one of the Security First
Trust Growth and Income Series purchased on August 1, 1979, at the price of
$5.07 assuming that dividends and capital gains were reinvested.
The results shown should not be considered a representation of the income
that may be earned by investing in the Series today. The value of variable
annuities funded by shares in this Series will be reduced by any actuarial risk
charges.
GROWTH AND INCOME SERIES
[GRAPH]
PER SHARE DATA
<TABLE>
<CAPTION>
Per Share
Value with Cumulative
Calendar Net Dividend Dividends & Change
Year Asset & Capital Capital Gains Yearly from
Ending Value Gains Reinvested Change 8/1/79
- - -------- ------ --------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
1981 $5.41 $1.69 $8.14 -1.3% +60.6%
1982 5.95 .41 9.73 +19.5% +93.9
1983 7.27 .28 12.45 +28.0 +145.6
1984 6.75 .51 12.48 +0.2 +146.1
1985 7.84 .30 15.11 +21.1 +198.1
1986 7.76 .59 16.07 +6.3 +216.9
1987 5.98 2.62 17.47 +8.8 +244.6
1988 6.97 .41 21.56 +23.4 +325.3
1989 7.52 1.09 26.64 +23.6 +425.4
1990 6.25 .44 23.70 -11.0 +367.5
1991 7.69 .24 30.07 +26.9 +493.1
1992 8.17 .22 32.80 +9.1 +546.9
1993 9.12 .22 37.49 +14.3 +639.4
1994 9.05 .32 38.51 +2.7 +659.6
1995 11.52 .34 50.49 +31.1 +895.8
</TABLE>
SECURITIES FIRST TRUST
BOND SERIES
The graph and Per Share Data Table below illustrate the growth in per share
value for the period ending December 31, 1995, of one share of the Security
First Trust Bond Series purchased on August 1, 1979, at a price of $3.12
assuming that dividends and capital gains were reinvested.
The results shown should not be considered a representation of the income
that may be earned by investing in the Series today. The value of variable
annuities funded by shares in this Series will be reduced by any actuarial risk
charges.
BOND SERIES
[GRAPH]
PER SHARE DATA
<TABLE>
<CAPTION>
Per Share
Value with Cumulative
Calendar Net Dividend Dividends & Change
Year Asset & Capital Capital Gains Yearly from
Ending Value Gains Reinvested Change 8/1/79
- - -------- ------ --------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
1981 $3.28 $.36 $3.81 +22.9% +22.1%
1982 3.93 0.00 4.56 +19.8 +46.3
1983 3.79 .31 4.78 +4.7 +53.2
1984 3.87 .28 5.26 +10.1 +68.6
1985 4.15 .33 6.14 +16.8 +96.9
1986 4.38 .30 6.95 +13.2 +122.8
1987 3.83 .66 7.14 +2.8 +128.8
1988 3.77 .28 7.55 +5.7 +142.1
1989 3.89 .30 8.39 +11.1 +168.9
1990 3.52 .54 8.76 +4.4 +180.8
1991 3.79 .25 10.06 +14.8 +222.4
1992 3.80 .23 10.70 +6.4 +242.9
1993 3.94 .22 11.72 +9.5 +275.6
1994 3.58 .22 11.31 -3.5 +262.5
1995 3.94 .24 13.21 +16.8 +323.4
</TABLE>
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6
<PAGE> 8
===============================================================================
SECURITIES FIRST TRUST
VALUE EQUITY SERIES
The Per Share Data Table below illustrates the growth in per share value
for the period ending December 31, 1995, of one share of the Security First
Trust Value Equity Series purchased on May 19, 1993, at a price of $5.00
assuming that dividends and capital gains were invested.
The results shown should not be considered a representation of the income
that may be earned by investing in the Series today. The value of variable
annuities funded by shares in this Series will be reduced by any actuarial risk
charges.
PER SHARE DATA
<TABLE>
<CAPTION>
Per Share
Value with Cumulative
Calendar Net Dividend Dividends & Change
Year Asset & Capital Capital Gains Yearly from
Ending Value Gains Reinvested Change 5/19/93
- - -------- ----- --------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
1993 $5.15 .03 $5.18 3.6% *3.6%
1994 $4.78 .05 $4.85 -6.3% -3.0%
1995 $5.91 .21 $6.21 28.0% 24.2%
</TABLE>
*change from 5-19-93 to 12-31-93
SECURITY FIRST TRUST
U.S. GOVERNMENT INCOME SERIES
The Per Share Data Table below illustrates the growth in per share value
for the period ending December 31, 1995, of one share of the Security First
Trust U.S. Government Income Series purchased on May 19, 1993, at a price of
$5.00 assuming the dividends and capital gains were reinvested.
The results shown should not be considered a representation of the income
that may be earned by investing in the Series today. The value of variable
annuities funded by shares in this Series will be reduced by any actuarial risk
charges.
PER SHARE DATA
<TABLE>
<CAPTION>
Per Share
Value with Cumulative
Calendar Net Dividend Dividends & Change
Year Asset & Capital Capital Gains Yearly from
Ending Value Gains Reinvested Change 5/19/93
- - -------- ----- --------- ------------- ------ ----------
<S> <C> <C> <C> <C> <C>
1993 $5.04 .08 $5.11 2.2% *2.2%
1994 $4.74 .14 $4.96 -2.94% -0.8%
1995 $5.18 .20 $5.63 13.5% 12.6%
</TABLE>
*change from 5-19-93 to 12-31-93
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7
<PAGE> 9
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SECURITY FIRST TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
U.S.
Growth and Value Government
Income Equity Income
Bond Series Series Series Series
------------- ---------- ----------- ---------------
<S> <C> <C> <C> <C>
ASSETS
Investments -- Note A and Schedule I:
Investment securities, at market (cost:
Bond Series - $8,082,884; Growth
and Income Series - $54,562,326;
Value Equity Series - $11,877,014;
U.S. Government Income Series -
$7,953,277) $ 8,638,498 $ 84,367,812 $13,507,175 $ 8,169,701
Short-term investments 16,860,438 343,004 1,769,600
------------- ------------ ----------- ---------------
8,638,498 101,228,250 13,850,179 9,939,301
Cash 38,847 512,601 419,374 178,866
Interest receivable 127,505 2,029 2,233 112,868
Dividends receivable 159,105 21,535
Receivable for security sold 114,053
Receivable for capital shares
purchased 36,524 19,054 23,366 20,381
Prepaid insurance 551 5,676 498 406
------------- ------------ ----------- ---------------
8,955,978 101,926,715 14,317,185 10,251,822
LIABILITIES
Payable for securities purchased 115,541 295,685
Payable to affiliates 1,106 12,494 1,631 1,167
Accrued expenses 17,882 73,626 11,284 5,770
Payable to investment adviser --
Note B 63 1,549 2,884 1,462
Payable for capital shares redeemed 111,184
------------- ------------ ----------- ---------------
134,592 198,853 15,799 304,084
NET ASSETS
Composed of:
Capital shares (authorized 100,000,000
shares of $.01 par value for each
series) 8,483,955 71,570,655 12,654,968 9,687,817
Undistributed net investment income 43,160 145,179 15,928 43,497
Accumulated net realized gain (loss) (261,343) 206,542 328
Net unrealized appreciation of
investments 555,614 29,805,486 1,630,162 216,424
------------- ------------ ----------- ---------------
Net assets $ 8,821,386 $101,727,862 $14,301,386 $ 9,947,738
============= ============ ============ ===============
Capital shares outstanding 2,223,240 8,561,673 2,339,324 1,908,473
Net asset value per share $ 3.97 $ 11.88 $ 6.11 $ 5.21
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
8
<PAGE> 10
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SECURITY FIRST TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
U.S.
Growth and Value Government
Income Equity Income
Bond Series Series Series Series
------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Interest $ 300,436 $ 514,646 $ 30,284 $ 238,007
Dividends 1,101,715 113,721
Miscellaneous income 425
------------- ------------ ------------ -------------
300,436 1,616,786 144,005 238,007
Expenses:
Custodian fees 7,397 13,562 4,674 3,566
Adviser fees -- Note B 14,769 161,486 40,173 29,351
Management fees -- Note B 6,329 69,055 8,035 5,870
Printing expenses 3,849 29,715 1,247
Audit fees 4,518 5,140 3,044 3,966
Insurance expenses 837 8,633 758 618
Directors' fees and expenses 840 8,995 945 702
Miscellaneous expenses 439 1,713 1,766 614
------------- ------------ ------------ ------------
38,978 298,299 59,395 45,934
Less: Waiver of management fees (143) (100)
Waiver of adviser fees (5,047) (18,126)
------------- ------------ ------------ ------------
38,978 298,299 54,205 27,708
------------- ------------ ------------ ------------
Net Investment Income 261,458 1,318,487 89,800 210,299
NET REALIZED AND UNREALIZED GAINS
ON INVESTMENTS -- Notes A and C
Net realized gain on sale of
investments 8,847 208,423 335,933 49,612
Net unrealized appreciation of
investments during the period 322,002 11,946,475 779,713 168,993
------------- ------------ ------------ ------------
Net gain on investments 330,849 12,154,898 1,115,646 218,605
------------- ------------ ------------ ------------
Increase in net assets
resulting from operations $ 592,307 $ 13,473,385 $ 1,205,446 $ 428,904
============= ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
9
<PAGE> 11
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SECURITY FIRST TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
U.S.
Growth and Value Government
Income Equity Income
Bond Series Series Series Series
-------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Operations:
Net investment income $ 261,458 $ 1,318,487 $ 89,800 $ 210,299
Net realized gain on sale of
investments 8,847 208,423 335,933 49,612
Net unrealized appreciation
of investments during the period 322,002 11,946,475 779,713 168,993
---------- ------------ ------------ ------------
Increase in net assets
resulting from operations 592,307 13,473,385 1,205,446 428,904
Distributions to shareowners from:
Net investment income (494,898) (2,489,944) (115,461) (326,728)
Net realized gains (351,978) (328,664) (22,717)
Capital share transactions -- Note D:
Reinvestment of net investment income
distributed 494,898 2,489,944 115,461 326,728
Reinvestment of net realized gains 351,978 328,664 22,717
Sales of capital shares 805,365 8,073,530 5,556,491 3,659,173
Redemptions of capital shares (554,067) (3,608,699) (226,270) (136,488)
---------- ----------- ----------- ------------
Increase in net assets from
capital share transactions 746,196 7,306,753 5,774,346 3,872,130
---------- ------------ ----------- -----------
Total increase in net assets 843,605 17,938,216 6,535,667 3,951,589
Net Assets:
Beginning of period 7,977,781 83,789,646 7,765,719 5,996,149
---------- ------------ ----------- -----------
End of period (including undistributed
net investment income: Bond Series
- $43,160; Growth and Income
Series - $145,179; Value Equity
Series - $15,928; U.S. Government
Income Series - $43,497) $ 8,821,386 $101,727,862 $ 14,301,386 $ 9,947,738
=========== ============ ============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
10
<PAGE> 12
===============================================================================
SECURITY FIRST TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JULY 31, 1995
UNAUDITED
<TABLE>
<CAPTION>
U.S.
Growth and Value Government
Income Equity Income
Bond Series Series Series Series
------------- ------------- ------------- -----------
<S> <C> <C> <C>
Operations:
Net investment income $ 457,766 $ 2,254,767 $ 66,351 $ 244,291
Net realized gain (loss) on sale of
investments (85,491) 723,499 10,119 (26,894)
Net unrealized appreciation
of investments during the year 258,476 9,667,042 866,272 155,555
------------- ------------ ----------- -----------
Increase in net assets
resulting from operations 630,751 12,645,308 942,742 372,952
Distributions to shareowners from:
Net investment income (403,613) (1,896,472) (43,805) (133,049)
Net realized gains (440,124)
Capital share transactions -- Note D:
Reinvestment of net investment income
distributed 403,613 1,896,472 43,805 133,049
Reinvestment of net realized gains 440,124
Sales of capital shares 1,520,473 14,215,043 4,494,367 2,982,198
Redemptions of capital shares (1,399,407) (8,731,675) (678,463) (783,488)
------------- ----------- ----------- -----------
Increase in net assets from
capital share transactions 524,679 7,819,964 3,859,709 2,331,759
------------- ------------ ------------ -----------
Total increase in net assets 751,817 18,128,676 4,758,646 2,571,662
Net Assets:
Beginning of year 7,225,964 65,660,970 3,007,073 3,424,487
------------- ------------ ------------ -----------
End of year (including undistributed
net investment income: Bond Series
- $276,600; Growth and Income Series
- $1,316,678; Value Equity Series
- $41,590; U.S. Government Income
Series - $159,926) $ 7,977,781 $ 83,789,646 $ 7,765,719 $ 5,996,149
============= ============ ============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
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11
<PAGE> 13
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SECURITY FIRST TRUST BOND SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Fixed Maturities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
CORPORATE NOTES 36.2%
Aerospace & Defense: .7
$ 50,000 Boeing Co.
8.75%, due 08/15/21 $ 57,753 $ 62,139
Banking: 7.3
95,000 Bankers Trust Co.
0.00%, due 10/01/96 91,156 88,825
100,000 Citicorp MTN
5.70%, due 02/12/96 100,002 100,000
91,667 First Chicago Master Trust II
8.40%, due 06/15/98 91,488 93,156
100,000 First Chicago MTN
5.50%, due 04/15/96 99,997 100,005
125,000 National Australia Bank
9.70%, due 10/15/98 125,000 137,638
100,000 Shawmut Corp.
8.875%, due 04/01/96 100,485 110,449
------------ --------------
608,128 630,073
Credit Card-Backed: 1.3
100,000 Standard Credit Card
7.25%, due 04/07/08 98,526 109,595
Electrical Utilities: 2.4
100,000 Long Island Lighting
9.75%, due 05/01/21 102,877 102,862
100,000 National Rural Utilities
6.50%, due 09/15/02 99,882 103,563
------------ --------------
202,759 206,425
Finance and Credit: 11.4
American Express Credit Corp.
7.75%, due 03/01/97 65,000 66,600
50,000 Associates Corp. No. America
8.80%, due 03/01/96 49,997 50,073
50,000 Beneficial Corp.
9.05%, due 03/14/97 49,995 51,978
50,000 Commercial Credit Group
9.60%, due 05/15/99 50,568 55,952
235,000 Federal Home Loan Mortgage Cap. Deb.
7.125%, due 07/21/99 229,096 248,748
50,000 Ford Motor Credit
9.50%, due 04/15/00 54,380 56,747
125,000 General Electric Capital MTN
9.375%, due 10/06/98 125,182 137,241
100,000 Greyhound Leasing
6.21%, due 02/15/96 99,994 100,051
100,000 Lehman Bros.
8.50%, due 05/01/07 113,392 113,392
100,000 Margaretten Financial
6.75%, due 06/15/00 96,524 102,246
------------ --------------
932,800 983,028
</TABLE>
===============================================================================
12
<PAGE> 14
================================================================================
SECURITY FIRST TRUST BOND SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Fixed Maturities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CORPORATE NOTES
(CONTINUED)
Food & Beverage: 1.4%
$ 50,000 Coca Cola Enterprises
8.50%, due 02/01/22 $ 56,326 $ 60,137
60,000 Philip Morris
8.75%, due 12/01/96 59,987 61,621
------------ --------------
116,313 121,758
Industrial - Other: 5.0
100,000 Columbia/HCA Healthcare
7.69%, due 06/15/25 99,877 107,310
100,000 GMAC
9.625%, due 12/15/01 113,638 117,885
100,000 Hertz Corp.
6.625%, due 07/15/00 99,702 102,602
100,000 Quaker State Oil Corp.
6.63%, due 10/15/05 99,404 102,096
------------ --------------
412,621 429,893
Miscellaneous: 1.8
50,000 News American Holdings Inc.
7.50%, due 03/01/00 51,497 52,837
100,000 Noranda Forest, Inc.
7.50%, due 07/15/03 104,719 105,288
------------ --------------
156,216 158,125
Savings & Loan: 0.6
50,000 Ahmanson (H.F.) & Co.
8.25%, due 10/01/02 49,867 55,430
Telephone: 4.3
125,000 AT&T Corp.
9.85%, due 03/15/96 125,089 125,576
50,000 GTE Corp.
8.85%, due 03/01/98 50,057 53,114
100,000 Rochester Telephone
8.77%, due 04/16/01 100,000 112,176
80,000 U.S. West Communications
7.50%, due 06/15/23 70,275 83,595
------------ --------------
345,421 374,461
------------ --------------
TOTAL CORPORATE NOTES 2,980,404 3,130,927
</TABLE>
================================================================================
13
<PAGE> 15
===============================================================================
SECURITY FIRST TRUST BOND SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Fixed Maturities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
FEDERAL AGENCIES 40.0%
Federal Home Loan Bank: 5.5
$ 175,000 5.43%, due 02/25/99 $ 163,255 $ 176,143
300,000 5.50%, due 01/10/01 300,898 300,894
------------- --------------
464,153 477,037
Federal Home Loan Mortgage Corp.: 2.5
3,535 9.00%, due 01/01/17 3,462 3,711
34,195 9.50%, due 04/01/19 33,156 36,182
17,716 9.00%, due 06/01/19 16,948 18,596
150,000 7.00%, due 07/15/21 150,683 153,281
------------- --------------
204,249 211,770
Federal National Mortgage Assn.: 2.3
175,000 8.35%, due 11/10/99 176,658 192,908
9,069 7.50%, due 08/25/21 9,178 9,352
------------- --------------
185,836 202,260
Government National Mortgage Assn.: 27.4
5,796 9.00%, due 04/15/09 6,032 6,128
33,221 9.00%, due 05/15/09 34,130 35,121
7,136 9.00%, due 05/15/09 7,331 7,544
12,639 9.00%, due 05/15/09 12,985 13,362
5,060 9.00%, due 05/15/09 5,198 5,349
5,031 9.00%, due 05/15/09 5,169 5,319
18,879 9.00%, due 05/15/09 19,396 19,959
5,504 12.50%, due 04/15/10 6,072 6,530
1,634 11.25%, due 07/15/13 1,702 1,798
74,541 11.50%, due 11/15/15 83,026 85,931
296,595 9.00%, due 05/15/16 310,553 313,836
180,190 9.00%, due 07/15/16 188,678 190,664
52,996 10.00%, due 08/15/16 56,241 58,411
145,288 9.00%, due 10/15/16 152,142 153,733
162,550 9.00%, due 11/15/16 170,222 171,999
28,790 10.00%, due 06/15/17 31,051 31,861
66,840 9.25%, due 07/15/17 70,162 70,662
34,293 10.00%, due 11/15/17 36,409 37,797
13,329 11.50%, due 02/15/18 14,668 15,365
70,221 10.00%, due 03/15/19 74,578 77,397
96,516 10.00%, due 03/15/20 104,534 106,811
194,129 7.00%, due 01/15/24 181,380 196,678
187,299 7.00%, due 03/15/24 176,991 189,752
163,641 7.50%, due 06/15/23 154,009 168,580
114,035 7.00%, due 08/15/23 116,849 119,152
272,630 7.50%, due 10/15/23 283,171 280,637
------------- --------------
2,302,679 2,370,376
Tennessee Valley Authority:
175,000 8.375%, due 10/01/99 2.3 176,689 192,721
------------- --------------
TOTAL FEDERAL AGENCIES 3,333,606 3,454,164
</TABLE>
===============================================================================
14
<PAGE> 16
===============================================================================
SECURITY FIRST TRUST BOND SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Fixed Maturities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS 23.8%
U.S. Treasury Bonds: 18.0
$ 180,000 8.50%, due 02/15/20 $ 213,264 $ 233,100
200,000 8.75%, due 05/15/20 209,983 265,500
100,000 8.75%, due 08/15/20 103,830 132,875
150,000 8.00%, due 11/15/21 151,405 185,906
250,000 7.25%, due 08/15/22 258,985 286,250
400,000 7.125%, due 02/15/23 381,878 452,375
------------- --------------
1,319,345 1,556,006
U.S. Treasury Notes: 3.2
255,000 7.75%, due 11/30/99 259,364 276,755
U.S. Treasury Securities Stripped: 2.6
350,000 0.00%, due 05/15/04 190,165 220,646
------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 1,768,874 2,053,407
------------- --------------
TOTAL INVESTMENTS 100.0 $ 8,082,884 8,638,498
=============
Other assets less liabilities 182,888
--------------
NET ASSETS $ 8,821,386
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
15
<PAGE> 17
===============================================================================
SECURITY FIRST TRUST GROWTH AND INCOME SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CAPITAL EQUIPMENT 2.1%
Electrical Equipment: 1.8
17,000 General Electric Co. $ 659,175 $ 1,304,750
25,000 Westinghouse Electric Corp. 636,314 521,875
------------- --------------
1,295,489 1,826,625
Machinery: 0.3
25,000 Coltec Industries, Inc.* 407,875 293,750
CONSUMER CYCLICALS .7
Automobiles & Related: .7
7,000 Ford Motor Service Cv. Pfd. 350,000 672,875
CONSUMER NONDURABLES 24.9
Food Products: 5.1
12,000 Anheuser-Busch Company, Inc. 623,460 834,000
12,000 CPC International, Inc. 493,152 873,000
12,000 General Mills, Inc. 515,191 690,000
10,000 Pepsico, Inc. 304,450 596,250
25,000 Quaker Oats Company 854,563 856,250
20,000 Ralston-Ralston Purina Group 748,624 1,287,500
------------- --------------
3,539,440 5,137,000
Hospital Supplies: 1.3
30,000 Baxter International, Inc. 752,235 1,365,000
Miscellaneous Consumer Products: 6.9
18,000 American Brands, Inc. 659,565 821,250
10,000 Clorox Co. 378,300 823,750
12,000 Colgate Palmolive 661,092 888,000
45,000 Corning, Inc. 1,381,803 1,406,250
29,000 Hanson PLC Sponsored ADR 414,020 456,750
15,000 Phillip Morris 1,117,700 1,395,000
8,249 RJR Nabisco Hldngs Corp. 228,143 268,093
18,000 Tambrands, Inc. 684,390 884,250
------------- --------------
5,525,013 6,943,343
Pharmaceuticals: 11.6
15,000 American Home Products 923,550 1,530,000
15,000 Johnson & Johnson 599,325 1,440,000
24,000 Eli Lilly & Co. 794,502 1,374,000
36,250 Pharmacia-Upjohn, Inc. 834,717 1,508,906
24,000 Pfizer, Inc. 683,710 1,650,000
20,000 Schering-Plough Corp. 559,450 1,085,000
30,200 SmithKline Beecham PLC ADR 498,641 1,698,750
15,000 Warner Lambert Co. 1,005,959 1,406,250
------------- --------------
5,899,854 11,692,906
</TABLE>
*Non-Income Producing
===============================================================================
16
<PAGE> 18
===============================================================================
SECURITY FIRST TRUST GROWTH AND INCOME SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CONSUMER SERVICES 9.9%
General Merchandisers: 2.9
15,000 Dayton-Hudson $ 1,021,926 $ 1,113,750
20,000 J.C. Penney, Inc. 429,490 977,500
40,000 Walmart Stores 937,400 810,000
------------- --------------
2,388,816 2,901,250
Media and Communications: 5.4
17,000 Dun & Bradstreet Corp. 715,100 1,105,000
13,000 McGraw-Hill, Inc. 756,235 1,157,000
30,000 Meredith Corp. 398,400 1,365,000
14,014 Times Mirror Co. 270,830 434,434
40,000 Vodafone Group PLC SPON ADR 1,321,975 1,430,000
------------- --------------
3,462,540 5,491,434
Miscellaneous: 1.6
15,000 Readers Digest Assn., Inc. 586,050 656,250
1,450 U. S. Industries* 15,470 26,100
30,000 WMX Technologies, Inc. 930,265 896,250
------------- --------------
1,531,785 1,578,600
ENERGY 11.4
Oil: 11.4
12,000 Atlantic Richfield Co. 1,242,918 1,363,500
15,000 British Petroleum PLC 840,450 1,464,375
8,715 Burlington Resources, Inc. 218,178 326,813
20,000 Chevron 966,400 1,040,000
18,000 Exxon Corp. 1,063,910 1,444,500
15,000 Halliburton Co. 390,755 774,375
8,000 Mobil Corp. 480,128 886,000
12,000 Murphy Oil Corp. 430,220 505,500
8,000 Pennzoil Co. 589,241 325,000
10,000 Royal Dutch Petroleum Co. ADR 796,120 1,390,000
15,300 Texaco, Inc. 578,282 1,237,388
25,000 Unocal Corp. 476,300 746,874
------------- --------------
8,072,902 11,504,325
</TABLE>
*Non-Income Producing
===============================================================================
17
<PAGE> 19
===============================================================================
SECURITY FIRST TRUST GROWTH AND INCOME SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
FINANCIAL 14.3%
Commercial Banking: 5.2
75,000 California Federal Bancorp* $ 906,013 $ 1,171,875
7,500 California Federal Bancorp FSB* 38,438 47,344
10,000 Chemical Banking Corp. 272,500 670,000
10,000 First Interstate Bancorp 330,000 1,542,500
15,000 J.P. Morgan and Co. 945,614 1,218,750
20,000 National City Corp. 501,000 652,500
------------- --------------
2,993,565 5,302,969
Financial Services: 7.8
52,000 American Express 976,137 2,385,500
15,000 Federal Home Loan Mortgage Corp. 196,650 1,284,375
20,000 H&R Block, Inc. 271,513 737,500
15,000 Student Loan Marketing Assn. 518,550 1,104,375
36,789 Travellers, Inc. 756,418 2,418,877
------------- --------------
2,719,268 7,930,627
Insurance: 1.3
10,000 CIGNA Corp. 487,963 1,186,250
1,500 Highlands Insurance Group, Inc.* 31,695 28,688
14,000 Willis Corroon Group Sponsored ADR 292,945 164,500
------------- --------------
812,603 1,379,438
PROCESS INDUSTRIES 9.5
Chemicals: 4.8
17,000 Du Pont Corp. 1,055,190 1,306,875
15,000 Great Lakes Chemical Corp. 738,195 1,119,375
13,000 Minnesota Mining & Manufacturing 708,295 838,500
12,000 Monsanto Co. 634,212 1,563,000
------------- --------------
3,135,892 4,827,750
Forest Products: 0.7
15,000 Weyerhaeuser Co. 392,498 691,874
Paper & Paper Products: 4.0
33,500 Albany International Corp. 438,603 619,750
12,000 Georgia Pacific 826,260 880,500
25,000 Internantional Paper Co. 882,025 1,018,750
10,000 Kimberly-Clark Corp. 473,300 806,250
15,000 Union Camp Corp. 633,260 772,500
------------- --------------
3,253,448 4,097,750
</TABLE>
*Non-Income Producing
===============================================================================
18
<PAGE> 20
===============================================================================
SECURITY FIRST TRUST GROWTH AND INCOME SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
TECHNOLOGY 1.5%
Electronic Systems: 1.5
30,000 Honeywell, Inc. $ 999,351 $ 1,526,249
TRANSPORTATION 2.6
Railroads: 1.1
30,000 Canadian Pacific 584,625 585,000
21,803 Southern Pacific Railroad* 344,705 520,547
------------- --------------
929,330 1,105,547
Transportation Services: 1.5
20,000 PHH Corporation 691,400 1,030,000
20,000 Ryder System, Inc. 312,263 467,500
------------- --------------
1,003,663 1,497,500
UTILITIES 6.5
Telephone: 3.6
12,000 American Telephone & Telegraph Co. 439,460 802,500
25,000 General Telephone Electronics Corp. 831,107 1,146,875
17,000 Southern New England Telecom. Corp. 589,010 680,000
13,000 Telefonos De Mexico S A 653,635 440,375
10,000 U.S. West Inc. 180,800 351,250
10,000 U.S. West Common Media Group* 180,000 211,250
------------- --------------
2,874,012 3,632,250
Utility Holding Companies: 2.9
22,000 Entergy Corp. 534,695 651,750
16,000 General Public Utilities Corp. 368,552 542,000
40,000 Pacificorp 667,000 850,000
50,000 SCE Corp. 652,500 925,000
------------- --------------
2,222,747 2,968,750
------------- --------------
TOTAL EQUITY SECURITIES 54,562,326 84,367,812
</TABLE>
*Non-Income Producing
===============================================================================
19
<PAGE> 21
===============================================================================
SECURITY FIRST TRUST GROWTH AND INCOME SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Short-Term Investments Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS 16.6%
Commercial Paper: 16.6
$ 2,200,000 Air Products & Chemicals
5.48%, due 02/07/96 $ 2,197,982 $ 2,197,982
1,100,000 Asset Securization Co.
5.38%, due 03/20/96 1,092,094 1,092,094
1,800,000 Caisse Des Depots et Con
5.48%, due 02/09/96 1,797,801 1,797,801
3,500,000 Ciba-Geigy Corp
5.42%, due 03/11/96 3,479,400 3,479,400
1,700,000 Falcon Asset Securization
5.45%, due 02/05/96 1,698,969 1,698,969
1,600,000 H.J. Heinz & Co.
5.60%, due 02/05/96 1,598,998 1,598,998
1,500,000 National Rural Utilities Co.
5.48%, due 02/22/96 1,495,194 1,495,194
3,500,000 Preferred Receivables Funding Corp.
5.68%, due 02/01/96 3,500,000 3,500,000
------------- --------------
TOTAL SHORT-TERM INVESTMENTS 16,860,438 16,860,438
------------- --------------
TOTAL INVESTMENTS 100.0 $ 71,422,764 101,228,250
=============
Other assets less liabilities 499,612
--------------
NET ASSETS $ 101,727,862
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
20
<PAGE> 22
===============================================================================
SECURITY FIRST TRUST VALUE EQUITY SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CAPITAL EQUIPMENT 6.6%
Electrical Equipment: 2.9
3,650 Baldor Electric Co. $ 90,101 $ 74,825
2,400 Emerson Electric Co. 169,620 201,000
1,650 General Electric Co. 84,348 126,638
------------ --------------
344,069 402,463
Industrial Machinery & Equipment: 2.7
3,700 Dover Corp 121,517 168,813
5,950 Parker Hannifin Corp. 202,692 203,043
------------- --------------
324,209 371,856
Packaging: 1.0
3,400 Carlisle Companies 142,945 135,150
CONSUMER CYCLICALS 9.0
Automobiles & Related: 5.8
1,500 Chrysler Corp. 79,965 86,625
8,591 Ford Motor Co. 239,990 254,508
8,689 General Motors Corp. 402,937 457,476
------------- --------------
722,892 798,609
Miscellaneous: 3.2
4,450 Carnival Corp. 119,260 120,150
2,500 Textron, Inc. 171,375 196,563
2,300 Tiffany Corp. 102,465 127,362
------------- --------------
393,100 444,075
CONSUMER NONDURABLES 14.0
Food & Beverages: 6.4
2,400 Canandaigua Wine Inc.* 118,200 89,400
3,400 Hershey Foods, Inc. 188,776 240,550
12,100 Hudson Foods 190,070 201,163
2,700 Pepsico, Inc. 106,492 160,987
5,950 Sara Lee Co. 167,832 200,812
------------- --------------
771,370 892,912
Miscellaneous Consumer Products: 1.6
1,100 Clorox Co. 79,667 90,613
1,600 Loews Corp. 117,503 132,200
------------- --------------
197,170 222,813
Pharmaceuticals: 6.0
2,250 Columbia/HCA Healthcare 92,176 125,156
3,700 Merck & Co. 173,070 259,925
2,200 Pfizer, Inc. 78,057 151,250
2,300 Schering Plough Corp. 85,094 124,775
5,000 Walgreen Co. 117,438 174,375
------------- --------------
545,835 835,481
</TABLE>
*Non-Income Producing
===============================================================================
21
<PAGE> 23
===============================================================================
SECURITY FIRST TRUST VALUE EQUITY SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
CONSUMER SERVICES 7.9%
Media and Communications: 5.1
1,750 Capital Cities ABC, Inc. $ 162,533 $ 225,094
5,200 Gannett Co., Inc. 281,760 330,200
2,400 Harris Corp. 120,240 150,300
------------- --------------
564,533 705,594
Retail Food: 2.8
2,900 Albertson's, Inc. 98,745 98,963
2,700 McDonald's Corp. 79,699 135,675
7,200 Wendy's Intl., Inc. 106,314 148,500
------------- --------------
284,758 383,138
ENERGY 10.1
Oil: 10.1
4,550 Amoco 292,513 320,206
6,400 Chevron Corp. 310,773 332,800
3,850 Exxon Corp. 285,423 308,963
2,700 Mobil Corp. 256,682 299,025
1,500 Phillips Petroleum 54,368 48,938
1,039 Texaco, Inc. 79,936 84,028
------------ --------------
1,279,695 1,393,960
FINANCIAL 13.9
Commercial Banking: 12.4
8,850 Ahmanson (H.F.) & Co. 220,064 212,400
4,000 Bankamerica Corp. 251,200 269,500
4,200 Chemical Banking Corp. 261,235 281,400
1,400 Citicorp 56,084 103,425
7,300 Fleet Financial Corp. 279,839 292,000
4,350 Nationsbank Corp. 263,116 303,956
4,500 Republic NY Corp. 270,163 262,156
------------- --------------
1,601,701 1,724,837
Financial Services: 0.8
2,400 Reliastar Financial 86,592 113,100
Investment Dealers: 0.7
4,500 Bear Stearns & Co., Inc. 91,913 103,500
</TABLE>
===============================================================================
22
<PAGE> 24
===============================================================================
SECURITY FIRST TRUST VALUE EQUITY SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
PROCESS INDUSTRIES 10.4%
Chemicals: 7.9
1,712 Dow Chemical Co. $ 119,943 $ 127,544
3,400 Du Pont Corp. 214,289 261,375
4,320 Kerr-McGee 245,177 273,240
1,500 Minnesota Mining & Manufacturing 80,055 96,750
1,400 Monsanto Co. 118,174 182,350
3,200 PPG Industries 128,183 149,600
------------- --------------
905,821 1,090,859
Metals: 1.6
6,850 Alcan Aluminum Ltd. 213,711 218,344
Paper & Paper Products: 0.9
4,400 Chesapeake Corp. 143,168 124,850
TECHNOLOGY 7.3
Computer and Office Equipment: 5.1
1,400 Hewlett Packard 79,325 118,650
3,000 Intel Corporation 185,500 165,702
3,821 International Business Machines 320,046 415,534
------------- --------------
584,871 699,886
Machinery &Equipment: 1.2
4,400 Applied Materials, Inc. 209,100 162,800
Telecommunications: 1.0
2,700 Motorola, Inc. 177,998 145,125
TRANSPORTATION 2.0
Railroads: 2.0
3,300 Illinois Central Corp. 126,540 124,575
2,200 Union Pacific 145,485 146,575
------------- --------------
272,025 271,150
</TABLE>
===============================================================================
23
<PAGE> 25
===============================================================================
SECURITY FIRST TRUST VALUE EQUITY SERIES SCHEDULE I
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
No. of Value of Amortized Market
Shares Equity Securities Portfolio Cost Value
- - ------------- ---------------------------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
UTILITIES 16.3%
Telephone: 12.5
2,800 Alltel Corp. $ 84,280 $ 87,850
4,500 Bell Atlantic Corp. 278,475 309,938
11,185 Bell South Corp. 413,117 479,557
8,484 General Telephone Electronics Corp. 358,175 389,204
4,900 MCI Communications Corp. 124,950 140,263
1,522 Nynex Corp. 79,996 81,617
1,150 SBC Communications, Inc. 45,115 65,119
1,850 Sprint Corp. 67,041 79,780
2,802 U S West, Inc. 99,989 98,420
------------ --------------
1,551,138 1,731,748
Utility Holding Companies: 3.8
4,500 Carolina Power & Light 127,184 166,500
6,700 DQE 180,022 206,863
5,200 Eastern Utilities Assoc. 128,310 123,500
1,500 Southern Co. 32,884 38,062
------------ --------------
468,400 534,925
------------- --------------
TOTAL EQUITY SECURITIES 11,877,014 13,507,175
Principal Short-Term Investments
- - ------------- ----------------------------------
SHORT-TERM INVESTMENTS 2.5
U.S. Treasury Bills: 2.5
$ 345,000 4.94%, due 03/14/96 343,004 343,004
------------- --------------
TOTAL SHORT-TERM INVESTMENTS 343,004 343,004
------------- --------------
TOTAL INVESTMENTS 100.0 $ 12,220,018 13,850,179
=============
Other assets less liabilities 451,207
--------------
NET ASSETS $ 14,301,386
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
24
<PAGE> 26
===============================================================================
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Fixed Maturities Portfolio Cost Value
- - ------------- ------------------------------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS 36.6%
U.S. Treasury Notes: 23.1
$ 150,000 7.75%, due 03/31/96 $ 150,871 $ 150,563
900,000 5.375%, due 05/31/98 888,809 905,625
160,000 5.50%, due 04/15/00 161,241 161,700
500,000 6.25%, due 08/31/00 502,719 518,594
250,000 7.875%, due 08/15/01 260,640 279,688
250,000 7.50%, due 02/15/05 262,240 282,421
------------- --------------
2,226,520 2,298,591
U.S. Treasury Bonds: 13.5
1,220,000 8.25%, due 05/15/05 1,321,558 1,345,432
------------- --------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 36.6 3,548,078 3,644,023
FEDERAL AGENCIES 45.6
550,000 Federal Farm Credit Bank
6.05%, due 04/21/03 537,199 564,801
125,000 Federal Farm Credit Bank
6.94%, due 05/19/05 126,002 135,024
350,000 Federal Home Loan Bank
4.80%, due 09/22/98 349,705 347,239
250,000 Federal Home Loan Bank
8.00%, due 08/27/01 260,005 279,120
479,452 Federal Home Loan Mortgage Assn.
7.00%, due 09/01/10 478,343 490,240
459,972 Federal National Mortgage Assn.
8.00%, due 09/01/25 465,452 477,073
150,000 Federal National Mortgage Assn.
8.625%, due 06/30/04 162,701 177,446
1,125,860 Government National Mortgage Assn.
7.00%, due 11/15/25 1,121,466 1,140,980
290,055 Small Business Administration
6.90%, due 08/25/08 294,406 294,406
100,000 Student Loan Marketing Assn.
7.50%, due 03/08/00 105,025 107,476
500,000 Tennessee Valley Auth.
8.25%, due 11/15/96 504,895 511,873
------------- --------------
TOTAL FEDERAL AGENCIES 45.6 4,405,199 4,525,678
------------- --------------
TOTAL FIXED MATURITIES 82.2 7,953,277 8,169,701
</TABLE>
===============================================================================
25
<PAGE> 27
===============================================================================
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market Cost/
Value of Amortized Market
Principal Short-Term Investments Portfolio Cost Value
- - ------------- ------------------------------------ ------------ ------------- --------------
<S> <C> <C> <C> <C>
SHORT-TERM INVESTMENTS 17.8%
U.S. Treasury Bills: 17.8
$ 450,000 4.93%, due 03/14/96 $ 447,409 $ 447,409
950,000 4.94%, due 03/14/96 944,504 944,504
380,000 5.19%, due 03/14/96 377,687 377,687
------------- --------------
TOTAL SHORT-TERM INVESTMENTS 1,769,600 1,769,600
------------- --------------
TOTAL INVESTMENTS 100.0 $ 9,722,877 9,939,301
=============
Other assets less liabilities 8,437
--------------
NET ASSETS $ 9,947,738
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
===============================================================================
26
<PAGE> 28
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
UNAUDITED
NOTE A -- ORGANIZATION OF THE TRUST AND SIGNIFICANT ACCOUNTING POLICIES
Security First Trust (the Trust) was established under Massachusetts law
pursuant to a Declaration of Trust dated February 13, 1987, as an
unincorporated business trust, a form of organization that is commonly called a
Massachusetts Business Trust. The Trust is registered with the Securities and
Exchange Commission as a diversified open-end management investment company
(mutual fund) under the Investment Company Act of 1940 (1940 Act).
On June 17, 1987, the shareowners of Security First Legal Reserve Fund, Inc.
and Security First Variable Life Fund, Inc. (the Funds), each of which was a
Maryland corporation registered as an investment company under the 1940 Act,
approved Plans of Reorganization and Liquidation and on July 24, 1987, the
Funds became Series of the Trust and their shareowners became shareowners of
the Bond Series and the Growth and Income Series, respectively, in a tax-free
exchange of shares. The Trust operates as a "series company," as that term is
used in Rule 18f-2 under the 1940 Act. Financial information for periods prior
to June 17, 1987, reflect the results of the respective funds.
The Declaration of Trust permits the Trustees to issue an unlimited number of
shares and to divide such shares into an unlimited number of series, all
without shareowner approval. Pursuant to this authority, the Board of Trustees
of Security First Trust established the Value Equity Series and the U.S.
Government Income Series on January 11, 1993, which commenced operations May
19, 1993. The following is a summary of significant accounting policies
followed by the Trust:
FEDERAL INCOME TAXES -- Each series of the Trust has elected to qualify as a
"Regulated Investment Company." No provision for federal income taxes is
necessary because each series intends to maintain its qualification as a
"Regulated Investment Company" under the Internal Revenue Code and distribute
each year substantially all of its net income and realized capital gains to its
shareowners. Income and gains to be distributed are determined as of December
31, because the Trust reports for tax purposes on a calendar year.
PORTFOLIO VALUATION -- Investments are carried at market value. The market
value of equity securities is determined as follows: Securities traded on a
national securities exchange are valued at the last sale price; securities not
traded on a national securities exchange are valued at the bid price for such
securities as reported by security dealers. Fixed maturities are valued at
prices obtained from a major dealer in bonds. Short-term investments which
have remaining maturities of more than 60 days and for which representative
market quotations are readily available are valued at the most recent bid price
or yield equivalent as quoted by a major broker-dealer in money market
securities. Securities with remaining maturities of 60 days or less are valued
at their amortized cost, which approximates market value due to the short
duration to maturity. Securities and other assets for which such procedures
are deemed not to reflect fair value, or for which representative quotes are
not readily available, are valued at prices deemed best to reflect their fair
value as determined in good faith by or under supervision of officers of the
Trust in a manner specifically authorized by the Board of Directors and applied
on a consistent basis.
===============================================================================
27
<PAGE> 29
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE A -- ORGANIZATION OF THE TRUST AND SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
DIVIDENDS AND DISTRIBUTIONS -- Each series declares dividends annually. Net
realized gains from security transactions, if any, are distributed annually.
OTHER -- As is common in the industry, security transactions are accounted for
no later than the day following the date the securities are purchased or sold.
Dividend income is recorded on the ex-dividend date. Interest income is
accrued daily.
NOTE B -- REMUNERATION OF MANAGER AND OTHERS
Bond Series and Growth and Income Series:
The Manager, Security First Investment Management Corporation (Security
Management), is entitled by agreement to a monthly fee equal to 1/24 of 1% of
the average daily net asset value of the Bond Series and Growth and Income
Series (equivalent annually to .5%), less compensation payable to the Series'
investment adviser. However, to the extent that operating expenses (including
management fees but excluding interest and taxes and certain extraordinary
expenses) of each series exceed 2.5% of the first $30 million of each series'
average daily net assets, 2.0% of the next $70 million of each series' average
daily net assets, and 1.5% of each series' average daily net assets in excess
of that amount, calculated on the basis of each series' fiscal year (the
expense limitation), the agreement requires that Security Management waive its
fee. In addition, for the year ended July 31, 1996, Security Management has
also agreed to reimburse the Bond Series for any remaining expenses exceeding a
limitation equivalent annually to 1.5%. Security Management may elect on an
annual basis to reimburse the Series for future excess expenses.
If during the fiscal year repayments are made to the Manager and the series'
expenses subsequently exceed the expense limitation, the Series shall recover
such repayments from the Manager to the extent of the excess determined.
Conversely, if during the fiscal year repayments are made by the Manager and
the series' expenses subsequently are within the expense limitation, the
Manager shall recover such repayments to the extent of the excess repaid. It
is management's opinion that it is reasonably possible that actual operating
expense may be less than the expense limitation; however, in accordance with
the requirements of FASB Statement No. 5, no accrual has been made for the
contingent obligation to repay Security Management for excess expense
reimbursements since the conditions required for such accrual have not, in the
opinion of management, been met.
T. Rowe Price Associates provides investment advice and makes investment
decisions for the Bond Series and Growth and Income Series. T. Rowe Price
Associates is paid an annual fee of 0.35% of the average daily net assets of
each series less any compensation payable to Security Management acting as
adviser on certain assets in which a series may invest.
===============================================================================
28
<PAGE> 30
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- REMUNERATION OF MANAGER AND OTHERS (CONTINUED)
Value Equity Series and U.S. Government Income Series:
The Manager, Security Management, is entitled by agreement to a monthly fee
equal to 1/13 of 1% of the average daily net asset value of the Value Equity
Series and U.S. Government Income Series (equivalent annually to .9%), less
compensation payable to the Series' investment adviser, Virtus Capital
Managment (Virtus). However, to the extent that operating expenses (including
management fees but excluding interest and taxes and certain extraordinary
expenses) of each series exceed 2.5% of the first $30 million of each series'
average daily net assets, 2.0% of the next $70 million of each series' average
daily net assets and 1.5% of each series' average daily net assets in excess of
that amount, calculated on the basis of each series' fiscal year (the expense
limitation), the agreement requires that Security Management and Virtus waive
their fees. For a period of three years from inception, Security Management
and Virtus have also agreed to reimburse the Value Equity Series for any
remaining expenses exceeding a limitation equivalent annually to 1% and to
reimburse the U.S. Government Income Series for any remaining expenses
exceeding a limitation equivalent annually to .7%.
Virtus provides investment advice and makes investment decisions for the Value
Equity Series and U.S. Government Income Series. Virtus is paid an annual fee
of .75% of the average daily net assets of the two series.
NOTE C -- INVESTMENT SECURITIES TRANSACTIONS
Purchases and sales of fixed maturities and equity securities for the year
ended January 31, 1996 were as follows:
<TABLE>
<CAPTION>
Growth U.S.
and Value Government
Income Equity Income
Bond Series Series Series Series
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
U.S. Government Securities:
Purchases $ 300,903 $ 5,140,026
Sales 266,908 2,693,670
Other Investment Securities:
Purchases 772,578 $ 6,248,500 $ 8,263,857
Sales 338,782 1,238,782 2,527,708
</TABLE>
===============================================================================
29
<PAGE> 31
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE C -- INVESTMENT SECURITIES TRANSACTIONS (CONTINUED)
Net realized gain or loss on sale of investments is determined by the specific
identification method and would not have been significantly different using the
average cost method. The cost of investments at January 31, 1996 was the same
for both financial statement and federal income tax purposes. At January 31,
1996, the composition of unrealized appreciation and depreciation of investment
securities was as follows:
<TABLE>
<CAPTION>
Unrealized
-------------------------------
Appreciation Depreciation Net
------------- ------------ ------------
<S> <C> <C> <C>
Bond Series $ 560,502 $ (4,888) $ 555,614
Growth and Income Series 30,804,420 (998,934) 29,805,486
Value Equity Series 1,828,767 (198,605) 1,630,162
U.S. Government Income Series 219,198 (2,774) 216,424
</TABLE>
NOTE D -- CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of the Trust were as follows:
<TABLE>
<CAPTION>
Shares Issued
in Connection
with Reinvestment of
-----------------------------
Net Net
Investment Realized
Income Gain
Sold Distributions Distributions Redeemed Net
--------- ------------- ------------- ---------- -------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JANUARY 31, 1996
Bond Series 200,855 125,609 (137,987) 188,477
Growth and Income Series 718,825 216,141 30,554 (322,207) 643,313
Value Equity Series 939,939 19,537 55,612 (38,883) 976,205
U.S. Government Income Series 721,557 63,075 4,386 (49,740) 739,278
YEAR ENDED JULY 31, 1995
Bond Series 401,797 112,741 (370,655) 143,883
Growth and Income Series 1,480,071 209,555 48,632 (912,125) 826,133
Value Equity Series 888,244 9,164 (137,439) 759,969
U.S. Government Income Series 604,546 28,069 (161,083) 471,532
</TABLE>
===============================================================================
30
<PAGE> 32
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE E -- FINANCIAL HIGHLIGHTS
The per share information for each respective series' capital stock outstanding
throughout the period is as follows:
<TABLE>
<CAPTION>
NET REALIZED
AND TOTAL
UNREALIZED INCOME DISTRIBUTIONS
NET ASSET GAINS (LOSSES) DIVIDENDS FROM NET ASSET
VALUE AT NET (LOSSES) ON FROM FROM NET REALIZED VALUE AT
BEGINNING INVESTMENT INVEST- INVESTMENT INVESTMENT CAPITAL END OF TOTAL
OF PERIOD INCOME MENTS OPERATIONS INCOME GAINS PERIOD RETURNS(2)
--------- ---------- ------------ ---------- ---------- ------------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BOND SERIES
Year ended July 31,
1991 $ 3.95 $ .52 $ (.24) $ .28 $ (.55) $ 3.68 7.09%
1992 3.68 .24 .28 .52 (.25) 3.95 14.13
1993 3.95 .22 .14 .36 (.23) 4.08 9.11
1994 4.08 .21 (.25) (.04) (.22) 3.82 (0.98)
1995 3.82 .24 .08 .32 (.22) 3.92 8.38
Six months ended
January 31, 1996 3.92 .12 .17 .29 (.24) 3.97 7.40
GROWTH AND INCOME SERIES
Year ended July 31,
1991 $ 7.30 $ .39 $ .29 $ .68 $ (.44) $ .54 9.32%
1992 7.54 .23 .79 1.02 (.24) 8.32 13.53
1993 8.32 .22 .49 .71 (.22) 8.81 8.53
1994 8.81 .23 .44 .67 (.22) 9.26 7.60
1995 9.26 .29 1.35 1.64 (.26) $ (.06) 10.58 17.71
Six months ended
January 31, 1996 10.58 .15 1.49 1.64 (.30) (.04) 11.88 15.50
VALUE EQUITY SERIES
May 19, 1993 through
July 31, 1993 (3) $ 5.00 $ .01 $ (.01) $ .00 $ .00 $ 5.00 0.00%(1)
Year ended July 31,
1994 5.00 .05 (.03) .02 (.03) 4.99 0.40
1995 4.99 .05 .71 .76 (.05) 5.70 15.23
Six months ended
January 31, 1996 5.70 .03 .59 .62 (.05) $ (.16) 6.11 10.88
U.S. GOVERNMENT INCOME SERIES
May 19, 1993 through
July 31, 1993 (3) $ 5.00 $ .03 $ .04 $ .07 $ .00 $ 5.07 7.10%(1)
Year ended July 31,
1994 5.07 .11 (.19) (.08) (.07) $ (.01) 4.91 (1.58)
1995 4.91 .21 .15 .36 (.14) 5.13 7.33
Six months ended
January 31, 1996 5.13 .08 .20 .28 (.19) (.01) 5.21 5.46
</TABLE>
(1) Annualized
(2) Total return computed after deduction of all series expenses, but
before deduction of actuarial risk charges and other fees of the
variable annuity account.
(3) The Value Equity Series and U.S. Government Income Series commenced
operations on May 19, 1993.
===============================================================================
31
<PAGE> 33
===============================================================================
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE E -- FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
Ratio of
Ratio of Net
Operating Investment
Expenses Income Portfolio Net Assets
to Average to Average Turnover End of
Net Assets Net Assets Rate Period
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
BOND SERIES
Year ended July 31,
1991 1.50% 6.89% 310% $ 4,793,766
1992 1.50 6.42 50 5,682,609
1993 1.45 6.02 36 7,229,959
1994 1.30 5.45 58 7,225,964
1995 1.29 6.27 56 7,977,781
Six months ended
January 31, 1996 .93 (1) 6.24 (1) 17 (1) 8,821,386
GROWTH AND INCOME SERIES
Year ended July 31,
1991 .97% 4.01% 36% $ 33,493,074
1992 .86 3.10 20 42,814,515
1993 .75 2.77 5 55,160,198
1994 .78 2.62 11 65,660,970
1995 .74 3.10 8 83,789,646
Six months ended
January 31, 1996 .65 (1) 2.88 (1) 3 (1) 101,727,862
VALUE EQUITY SERIES
May 19, 1993 through July 31, 1993 (2) 1.00%(1) .85%(1) 7% $ 1,333,852
Year Ended July 31, 1994 1.00 1.38 121 3,007,073
Year Ended July 31, 1996 1.00 1.29 84 7,765,719
Six months ended
January 31, 1996 1.00 (1) 1.66 (1) 50 (1) 14,301,386
U.S. GOVERNMENT INCOME SERIES
May 19, 1993 through July 31, 1993 (2) .70%(1) 3.91%(1) 0% $ 469,060
Year ended July 31, 1994 .70 3.62 17 3,424,487
Year ended July 31, 1995 .70 5.19 16 5,996,149
Six months ended
January 31, 1996 .70 (1) 5.34 (1) 80 (1) 9,947,738
</TABLE>
(1) Annualized
(2) The Value Equity Series and U.S. Government Income Series commenced
operations on May 19, 1993.
===============================================================================
32
<PAGE> 34
VARIABLE ANNUITIES OFFER
CHOICES AND BENEFITS THAT
REGULAR MUTUAL FUNDS CAN'T
Tax-deferred retirement income plans are among the best investments a person
can make for his or her future today. As a vehicle for creating tax-favored
retirement income, variable annuities offer many advantages.
A variable annuity offers the opportunity to invest in a diversified
portfolio of securities similar to mutual funds. Taxes are deferred on all
dividends and on all increases in portfolio value until you take your money
out.
At retirement, another significant advantage is that the variable annuity
provides you with income that is based on the performance of the fund or funds
in which you participated. You may elect to receive monthly, quarterly or
annual payments for a specified number of years, your lifetime, or the longer
of your lifetime and the lifetime of your joint payee. See your policy for
specific options available to you.
The Security First Trust series offers you a choice of professionally
managed options. You may invest in a Bond Series, Growth and Income Series,
Value Equity Series, or U.S. Government Income Series, each with a varying
degree of risk:
SECURITY FIRST TRUST BOND SERIES is for conservative investors. The
objective is to achieve the highest investment income over the long term
consistent with the preservation of capital.
SECURITY FIRST TRUST GROWTH AND INCOME SERIES is for individuals willing to
accept a degree of risk. The fund's goal is growth of principal with a
reasonable level of income.
SECURITY FIRST TRUST VALUE EQUITY SERIES seeks to provide growth of capital
and income through investment of common stocks of high quality companies.
SECURITY FIRST TRUST U.S. GOVERNMENT INCOME SERIES seeks to provide current
income through investment in a diversified portfolio limited primarily to U.S.
government securities.
[LOGO]
11365 West Olympic Boulevard
Los Angeles, California 90064
(310) 312-6100
SEMI-ANNUAL REPORT
JANUARY 31, 1996
SECURITY
FIRST
TRUST
BOARD OF TRUSTEES
Jack R. Borsting Melvin M. Hawkrigg
Katherine L. Hensley Lawrence E. Marcus
Security First Trust Bond Series
Security First Trust Growth and Income Series
Security First Trust Value Equity Series
Security First Trust U.S. Government Income Series
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