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<PAGE> 1
Dear Contract Owner:
Stocks soared through the end of December, then weakened in January as the year
got off to a slow start. Technology stocks were the stellar performers during
the past year, while more conservative stocks continued to languish. For the six
months ended January 31, 2000, the S&P 500 returned 5.59% while value-oriented
funds were down sharply.
In the fixed income markets, interest rates continued to rise during the
reporting period, making the current bear market one of the longest in recent
history. Earlier this year, Fed policy was neutral, and market participants
drove rates higher. However, in the current period the Federal Reserve moved
from jaw boning to action, raising the Fed Funds rate three times from August
1999 to early February 2000. Central banks around the globe joined the party
with the European, British and Korean Central Banks, also raising short term
rates.
I encourage you to review the following report covering the past six months and
to contact us if you have any questions.
Respectfully submitted,
/s/ Richard C. Pearson
Richard C. Pearson
President
[SECURITY FIRST LOGO]
<PAGE> 2
SECURITY FIRST TRUST:
T. ROWE PRICE GROWTH
AND INCOME SERIES AND
EQUITY SERIES
EQUITY MARKET OVERVIEW
After a brief pause during the third quarter, US stocks regained their
momentum during the last three months of 1999. The Russell 3000 Index,
representing the broad market, jumped 16.2%, resulting in a 20.9% increase for
the year. Not all segments of the market participated in the rally, however.
While technology stocks within the Russell 3000 gained 38.2% during the fourth
quarter alone (78.2% for the year), traditional value sectors such as consumer
staples and transportation lost value during the year; financial stocks were
relatively flat.
The Federal Reserve's recent rate hikes are one reason for the growth
versus value performance disparity. Higher interest rates have had a
disproportionate impact on finance stocks, a major component of the value
universe. In addition, an active IPO market, again dominated by technology and
Internet stocks, attracted investors' cash and media attention. Market
participants demonstrated a willingness to pay for growth and earnings momentum
as well as a strong appetite for risk. Among the few bright spots in the value
universe were energy stocks, benefiting from higher energy prices and strong
demand, and the basic materials sector, particularly at the large end of the
market.
EQUITY MARKET OUTLOOK
For the year 2000, there are a few major factors that will be
determining forces in the equity markets. First, Federal Reserve policy will
remain a focus. As long as the Fed pushes interest rates upward,
financial-oriented issues will remain under pressure. Once the Fed goes to the
sideline, these companies will have the burden lifted from them and a rally
should ensue. The second issue is international growth and acceleration. There
appears to be a number of positive factors emerging in the international arena
that are encouraging for value investors. As the international economies heat
up, basic material prices tend to rise due to increased demand, and this is
translated into higher earnings and prices for basic material and producer good
companies. Rising commodity prices in the paper and metals industries should
drive earnings growth for companies with record low valuations. Increased
productivity should also accelerate earnings growth in industrial cyclical
companies.
PORTFOLIO MANAGEMENT:
T. ROWE PRICE GROWTH
AND INCOME SERIES
Our preference for high-yielding, lower P/E companies remains intact,
and it has been a consistent cornerstone of our investment approach since the
Fund commenced operations. Given the wide variations in performance among
companies and sectors over the last two years, we believe investors will
eventually recognize the exciting opportunities that exist in our segment of the
market. We are not alone in our frustration with recent market trends; the
managers of many companies we hold in the portfolio have told us about their own
disappointment with their firms' stock performance. Many of them are actively
working to enhance shareholder value through share repurchase programs,
cost-cutting measures, and strategically rethinking their business models. This
type of activity bodes well for value stocks in the coming years.
Many well-known companies with long histories of good performance were
among our major positions at the end of January. They included BP Amoco,
Citigroup, American Home Products, Hewlett-Packard, Kimberly-Clark, and other
staples of U.S. industry. Our 10 top holdings constituted nearly 20% of total
portfolio assets.
1
<PAGE> 3
T. ROWE PRICE GROWTH & INCOME SERIES
15 LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percentage of
Security Portfolio
-------- ---------
<S> <C>
BP Amoco PLC 3.1
Citigroup, Inc. 2.8
American Home Products 2.0
Hewlett-Packard Co. 1.9
Kimberly-Clark 1.8
First Data Corp. 1.8
General Electric Co. 1.8
Target Corp. 1.8
Walt Disney Holding Co. 1.7
Computer Associates International, Inc. 1.5
Abbott Laboratories 1.5
Honeywell International, Inc. 1.4
Exxon Mobil Corp. 1.4
SBC Communications, Inc. 1.3
Boeing Company 1.3
----
TOTAL 27.1
====
</TABLE>
The portfolio's largest sector commitment was to consumer nondurables at
21.0% of assets. Other major sectors were financial (15.6%), consumer services
(13.7%), process industries (13.0%), and energy (10.0%). We believe our
well-diversified portfolio of conservative stocks will provide investors with
good protection in the event of a major correction, and also offers good
potential for long-term gains and steady dividend income.
GROWTH AND INCOME SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Capital Equipment 2.2%
Consumer Non-Durables 21.0%
Consumer Cyclicals 0.6%
Consumer Services 13.7%
Transportation 5.8%
Energy 10.0%
Financial 15.6%
Process Industries 13.0%
Technology 6.9%
Utilities 5.5%
Short-Term Securities 5.7%
</TABLE>
PORTFOLIO MANAGEMENT: EQUITY SERIES
The portfolio participated in the rally in the equity markets over the
past six months. It outperformed the S&P 500 Index by 85 basis points with a
return of 6.44% for the semi-annual period. We overweighted the technology
sector relative to the benchmark, which helped boost performance. Our individual
stock selection contributed positively to performance during the semi-annual
period, as technology holdings like Cisco Systems (up 76%), Oracle (up 162%),
Sun Microsystems (up 131%) and Qualcomm (up 226%) exhibited strong performance.
EQUITY SERIES
15 LARGEST HOLDINGS
<TABLE>
<CAPTION>
Percentage of
Security Portfolio
-------- ---------
<S> <C>
Microsoft Corp. 4.6
General Electric Co. 4.3
Cisco Systems, Inc. 3.9
Exxon/Mobil Corp. 3.7
Intel Corp. 3.6
American International Group 2.7
Walmart Stores 2.5
Merck & Co. 2.3
International Business Machines Corp. 2.0
Citigroup, Inc. 1.8
Oracle Corp. 1.8
Bristol Myers Squibb Co. 1.6
AT&T Co. 1.6
Morgan Stanley Dean Witter 1.6
Motorola, Inc. 1.6
----
TOTAL 39.6
====
</TABLE>
While the financial service companies in the portfolio produced
lackluster returns due to the interest rate environment, telecommunication
stocks such as Nextel and Sprint helped offset these and contributed to the
positive return in the portfolio.
2
<PAGE> 4
EQUITY SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Consumer Non-Durables 18.0%
Technology 31.0%
Consumer Cyclicals 1.2%
Financial 13.9%
Capital Equipment 7.8%
Consumer Services 8.9%
Energy 6.9%
Process Industries 3.2%
Utilities 9.1%
</TABLE>
SECURITY FIRST TRUST:
BOND SERIES AND U.S.
GOVERNMENT INCOME SERIES
FIXED-INCOME MARKET OVERVIEW
Despite the complete reversal of last year's easing by the Federal
Reserve, the expansion of the U.S. economy continued intact. At the end of 1999,
the labor markets remained tight, economic growth remained strong and inflation
pressures appeared restrained by offsetting gains in productivity. However, the
factors that have led to higher interest rates also remain intact: higher equity
and commodity prices, a confident consumer, labor markets that continue to
tighten and global recovery that will boost U.S. exports and reduce the trade
deficit. Along with consumer confidence, consumer credit continues to advance as
evidenced in remarkably strong holiday sales.
Treasury yields increased significantly during the fourth quarter of
1999, continuing their year-long loss. Bond prices, which move inversely to
their yields, have continued to be punished as the market reacted to the
strength of the economy and uncertainty of future Fed action. During the fourth
quarter, the short and intermediate sections of the yield curve underperformed
the long end of the curve. The benchmark 30-year Treasury bond rose from 6.05%
on September 30, 1999 to 6.48% on December 31, 1999. As of January 31, 2000, the
30-year Treasury bond's yield was 6.49%
Mortgages were able to post positive returns in the fourth quarter
outperforming Treasuries and corporates. A combination of shrinking supply and
investors getting an early start on investment plans for the New Year led to
favorable performance. Prepayment rates declined in response to a reduction in
refinancing activity and the onset of the slowest season for housing turnover.
Falling bond prices kept mortgage rates near 8%, which has significantly
affected refinancing activity reducing, an important source of new mortgage
origination.
FIXED-INCOME MARKET OUTLOOK
During the current reporting period the Fed raised the Fed Funds rate
three times, the most recent occurring in early February. We expect that
continued economic strength, tight labor markets and the need to drain the
excess liquidity the Fed provided the financial markets in the months leading up
to Y2K will warrant additional Fed tightening in 2000. We believe that the Fed
will take a gradualist view of further interest rate hikes.
PORTFOLIO MANAGEMENT:
BOND SERIES
Consistent with our overall strategy, only modest changes were made in
the portfolio in the current reporting period. The theme was to shift assets
into yield bearing instruments, and thus we increased our commitment to US
Agencies, mortgage pass-through issues and the high yield sector. This increased
the portfolio's overall yield by over 40 basis points.
Agencies and mortgages offer good relative yield with an excellent
credit profile. With spreads staying wide, an additional commitment made sense.
The high yield market has been under pressure all year and, with additional good
values available, we added to our position. Treasuries remained in short supply,
and we sold these issues to add yield in attractive sectors.
3
<PAGE> 5
In the face of higher rates we reduced our duration modestly.
Additionally, we repositioned the portfolio to benefit from stronger performance
from longer duration Treasuries, a strategy that helped our performance in the
current year.
BOND SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Corporate Bonds 35.6%
Foreign Governments 2.3%
Federal Agencies 53.2%
U.S. Government Obligations 8.9%
</TABLE>
The Fund's slightly negative return of .51% was shaped by the increase in
interest rates and the under-performance of international markets as well as a
couple of high yield issues. As a result the Fund's performance fell short of
the internal benchmark (Lehman Aggregate Index) by approximately 1.45%.
PORTFOLIO MANAGEMENT:
U.S. GOVERNMENT
INCOME SERIES
During the semi-annual period, the duration of the portfolio increased
from 5.62 years on July 31, 1999 to 5.92 years on January 31, 2000. The
portfolio ended the semi-annual period long in duration relative to its
benchmark. During the period, we increased the portfolio's weighting in the U.S.
Government and Agency securities from 91.3% to 97.4%. The portfolio's mortgage
pass-through and commercial mortgage-backed security exposure declined modestly
during the semi-annual period.
U.S GOVERNMENT INCOME SERIES
SECTOR DIVERSIFICATION
<TABLE>
<S> <C>
Corporate Bonds 2.0%
Federal Agencies 56.9%
Short-Term Securities 0.6%
U.S. Government Obligations 40.5%
</TABLE>
Going forward, we see relative value in longer maturity securities. We have
positioned the portfolio with a concentration on the intermediate to long-end of
the yield curve. After a sell-off in mortgage-backed securities at the beginning
of 2000, we are adding mortgage exposure to the portfolio to take advantage of
the value in the sector.
4
<PAGE> 6
PERFORMANCE OF SECURITY FIRST TRUST
GROWTH AND INCOME SERIES, BOND
SERIES, 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, 1999, 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.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------
Average Annual Total Returns
- -------------------------------------------------------------------------
Fund 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------
Growth and 8.84% 15.11% 19.46% 13.40%
Income
Series(1)(2)
- -------------------------------------------------------------------------
Bond -2.58% 4.53% 6.52% 6.34%
Series(1)(2)
- -------------------------------------------------------------------------
Equity 20.72% 24.37% 23.96% N/A*
Series(1)
- -------------------------------------------------------------------------
U.S. -2.54% 3.85% 5.65% N/A*
Government
Income(1)
- -------------------------------------------------------------------------
Consumer 2.67% 2.00% 2.37% 2.93%
Price Index
- -------------------------------------------------------------------------
</TABLE>
* Funds were introduced as of May 1993.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
Compound Total Returns
- --------------------------------------------------------------------------
Fund 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
Growth and 8.84% 52.52% 143.28% 251.67%
Income
Series(1)(2)
- --------------------------------------------------------------------------
Bond -2.58% 14.21% 37.14% 84.91%
Series(1)(2)
- --------------------------------------------------------------------------
Equity 20.72% 92.37% 192.69% N/A*
Series(1)
- --------------------------------------------------------------------------
U.S. -2.54% 12.00% 31.63% N/A*
Government
Income(1)
- --------------------------------------------------------------------------
Consumer 2.67% 6.12% 12.43% 33.48%
Price Index
- --------------------------------------------------------------------------
</TABLE>
* Funds were introduced as of May 1993.
(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.
5
<PAGE> 7
SECURITY FIRST TRUST T. ROWE
PRICE 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, 1999, of one share of the
Security First Trust T. Rowe Price 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>
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
1996 13.18 .83 61.42 +21.7 +1111.4
1997 15.52 1.25 78.12 +27.2 +1440.8
1998 15.81 1.29 86.06 +10.2 +1597.4
1999 16.06 1.06 93.67 +8.8 +1747.5
</TABLE>
SECURITY 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, 1999, 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>
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
1996 3.82 .24 13.58 +2.8 +335.3
1997 3.95 .21 14.81 +9.1 +374.6
1998 4.03 .21 15.92 +7.5 +410.3
1999 3.72 .22 15.51 -2.6 +397.1
</TABLE>
6
<PAGE> 8
SECURITIES FIRST TRUST
EQUITY SERIES
The Per Share Data Table below illustrates the growth in per share value
for the period ending December 31, 1999, of one share of the Security First
Trust Equity Series purchased on May 19, 1993, at a price of $5.00 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.
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
1996 6.45 .55 7.36 +18.5 +47.2
1997 7.63 .72 9.52 +29.3 +90.4
1998 7.89 1.51 11.73 +23.2 +134.6
1999 9.19 .31 14.16 +20.7 +183.2
</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, 1999, 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 -2.9 -0.8
1995 5.18 .20 5.63 +13.5 +12.6
1996 5.14 .22 5.83 +3.6 +16.6
1997 5.26 .24 6.24 +7.0 +24.8
1998 5.25 .40 6.70 +7.4 +34.0
1999 4.83 .29 6.53 -2.5 +30.6
</TABLE>
+change from 5-19-93 to 12-31-93
7
<PAGE> 9
SECURITY FIRST TRUST
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
T. Rowe Price
Growth and U.S. Government
Income Equity Income
Bond Series Series Series Series
------------- -------------- ------------ ---------------
<S> <C> <C> <C> <C>
ASSETS
Investments at market - Note A and
Schedule I: Investment securities
(cost: Bond Series - $25,803,478;
Growth and Income Series -
$286,962,700; Equity Series -
$41,295,419; U.S. Government
Income Series - $32,730,207) $ 24,608,643 $337,322,488 $ 58,147,294 $ 31,188,512
Cash 94,045 490,468 523,516 44,305
Interest receivable 312,125 1,562 1,667 525,321
Dividends receivable 389,595 44,135
Receivable for securities sold 950,525 17,216,732 3,216,898 502,504
------------- ------------ ------------ ------------
25,965,338 355,420,845 61,933,510 32,260,642
LIABILITIES
Payable for securities purchased 1,133,529 14,273,994 2,215,845 396,110
Accrued expenses 17,526 111,132 24,872 18,165
Payable for capital shares redeemed 82,780 71,479 58,443 18,352
Payable to investment adviser - Note B 7,474 104,678 28,668 10,485
Payable for directors' fees 436 6,184 1,072 754
Unrealized depreciation on foreign
currency contracts 30,527
------------- ------------ ------------ ------------
1,272,272 14,567,467 2,328,900 443,866
NET ASSETS
Capital shares (authorized 100,000,000
shares of $.01 par value for each series) 26,543,269 284,997,943 42,765,875 34,117,831
Undistributed net investment income 119,130 316,573 1,089 158,708
Undistributed net realized gain (loss) (743,971) 5,179,074 (14,229) (918,068)
Net unrealized appreciation (depreciation)
of investments (1,225,362) 50,359,788 16,851,875 (1,541,695)
------------- ------------ ------------ ------------
NET ASSETS $ 24,693,066 $340,853,378 $ 59,604,610 $ 31,816,776
============= ============ ============ ============
Capital shares outstanding 6,690,884 22,337,624 6,788,579 6,616,458
Net asset value per share $ 3.69 $ 15.26 $ 8.78 $ 4.81
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 10
SECURITY FIRST TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
T. Rowe Price
Growth and U.S. Government
Income Equity Income
Bond Series Series Series Series
----------- -------------- ---------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 3,292,762 $ 366,031
Interest $ 845,890 796,875 17,898 $ 1,047,709
----------- ------------ ---------- -----------
845,890 4,089,637 383,929 1,047,709
EXPENSES
Custodian fees 7,966 29,132 10,492 9,217
Adviser fees - Note B 44,200 633,338 164,866 65,459
Management fees - Note B 18,943 271,430 44,963 24,547
Printing expenses 7,999 1,427 5,792 6,378
Audit fees 1,641 4,142 3,411 1,294
Directors' fees and expenses 765 12,260 1,816 657
Miscellaneous expenses 18 3,191 1,946 2,427
----------- ------------ ---------- -----------
81,532 954,920 233,286 109,979
----------- ------------ ---------- -----------
NET INVESTMENT INCOME 764,358 3,134,717 150,643 937,730
NET REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS - Notes A and C
Net realized gain (loss) on sale of investments (457,460) 10,052,503 350,064 (393,089)
Net unrealized appreciation (depreciation) of:
Investments during the period (441,126) (49,492,563) 3,117,738 (546,061)
Assets denominated in foreign currencies (30,527)
----------- ------------ ---------- -----------
Net gain (loss) on investments (929,113) (39,440,060) 3,467,802 (939,150)
----------- ------------ ---------- -----------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (164,755) $(36,305,343) $3,618,445 $ (1,420)
=========== ============ ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 11
SECURITY FIRST TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
T. Rowe Price
Growth and U.S. Government
Income Equity Income
Bond Series Series Series Series
------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 764,358 $ 3,134,717 $ 150,643 $ 937,730
Net realized gain (loss) on sale
of investments (457,460) 10,052,503 350,064 (393,089)
Net unrealized appreciation (depreciation)
during the period (471,653) (49,492,563) 3,117,738 (546,061)
------------ ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (164,755) (36,305,343) 3,618,445 (1,420)
DISTRIBUTIONS TO SHAREOWNERS
Net investment income (1,410,330) (6,182,728) (360,159) (1,836,952)
Net realized gains (16,135,169) (1,714,979)
CAPITAL SHARE TRANSACTIONS - NOTE D
Reinvestment of net investment income
distributed 1,410,330 6,182,728 360,159 1,836,952
Reinvestment of net realized gains 16,135,169 1,714,979
Sales of capital shares 2,148,940 15,966,456 569,740 1,280,413
Redemptions of capital shares (2,008,823) (7,918,920) (2,896,737) (1,774,766)
------------ ------------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE
TRANSACTIONS 1,550,447 30,365,433 (251,859) 1,342,599
------------ ------------- ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS (24,638) (28,257,807) 1,291,448 (495,773)
NET ASSETS
BEGINNING OF PERIOD 24,717,704 369,111,185 58,313,162 32,312,549
------------ ------------- ------------ ------------
END OF PERIOD (including undistributed net
investment income: Bond Series -$119,130;
Growth and Income Series - $316,573;
Equity Series - $1,089; U.S. Government
Income Series - $158,708) $ 24,693,066 $ 340,853,378 $ 59,604,610 $ 31,816,776
============ ============= ============ ============
</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, 1999
<TABLE>
<CAPTION>
T. Rowe Price
Growth and U.S. Government
Income Equity Income
Bond Series Series Series Series
------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 1,222,895 $ 5,764,382 $ 398,609 $ 1,803,367
Net realized gain (loss) on sale
of investments (198,084) 17,734,362 1,354,678 (13,673)
Net unrealized appreciation
(depreciation) during the period (968,222) 31,098,623 7,802,709 (1,476,045)
------------ ------------- ------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 56,589 54,597,367 9,555,996 313,649
DISTRIBUTIONS TO SHAREOWNERS
Net investment income (968,742) (5,234,796) (449,055) (1,847,027)
Net realized gains (207,719) (18,412,869) (8,668,236) (597,259)
CAPITAL SHARE TRANSACTIONS - NOTE D
Reinvestment of net investment income
distributed 968,742 5,234,796 449,055 1,847,027
Reinvestment of net realized gains 207,719 18,412,869 8,668,236 597,259
Sales of capital shares 9,504,353 37,641,014 793,709 2,362,361
Redemptions of capital shares (2,777,630) (13,568,724) (6,839,695) (4,454,380)
------------ ------------- ------------ ------------
INCREASE IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS 7,903,184 47,719,955 3,071,305 352,267
------------ ------------- ------------ ------------
TOTAL INCREASE (DECREASE)
IN NET ASSETS 6,783,312 78,669,657 3,510,010 (1,778,370)
NET ASSETS
BEGINNING OF YEAR 17,934,392 290,441,528 54,803,152 34,090,919
------------ ------------- ------------ ------------
END OF YEAR (including undistributed net
investment income: Bond Series - $765,101;
Growth and Income Series - $3,364,585;
Equity Series - $210,605; U.S. Government
Income Series - $1,057,930) $ 24,717,704 $ 369,111,185 $ 58,313,162 $ 32,312,549
============ ============= ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE> 13
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CORPORATE NOTES 35.6%
Aerospace & Defense: 0.9%
Boeing Co., 8.75%, 08/15/21 $ 50,000 $ 54,125
Lockheed Martin Corp., 7.75% , 05/01/26 90,000 83,250
Tyco International, Ltd., 6.375%, 06/15/05 80,000 74,300
----------
211,675
Automobiles & Related: 2.1%
Amerco., 8.80%, 02/04/05 150,000 148,125
Borg Warner Automotive, Inc., 6.5%, 02/15/09 235,000 210,619
Capital Auto Receivables Asset, 6.30%, 05/15/04 125,000 122,661
Federal Mogul Corp., 7.50%, 01/15/09 50,000 43,813
----------
525,218
Banking: 5.2%
Asian Development Bank, 5.375%, 09/15/03 1,035,200 982,619
Banc One Corp., 7.75%, 07/15/25 200,000 193,500
HSBC Fin Nederland Bank, 7.40%, 04/15/03 100,000 99,250
----------
1,275,369
Building Materials & Garden Supplies: 0.4%
NBTY, Inc., 8.625%, 09/15/07 100,000 91,750
Computer & Office Equipment: 1.1%
IBM Corp., 5.375%, 02/01/09 235,000 203,275
Printpack, Inc.,10.625%, 08/15/06 60,000 57,825
----------
261,100
Chemicals and Allied Products: 1.7%
Fort James Corp., 6.875%, 09/15/07 245,000 229,381
Rohm & Haas Co., 6.95%, 07/15/04 200,000 195,500
----------
424,881
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE> 14
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CORPORATE NOTES (Continued)
Electric Utilities: 1.7%
CMS Energy Corp., 8.00%, 07/01/11 $ 225,000 $ 222,469
National Rural Utilities, 6.50%, 09/15/02 100,000 98,125
Public Service Electric & Gas Co., 6.25%, 01/01/07 100,000 92,000
----------
412,594
Finance & Credit: 6.5%
G.E. Capital Mtge. Services, Inc., 6.25%, 12/25/28 247,242 160,707
G.E. Capital Mtge. Services, Inc., 6.50%, 04/25/29 307,377 202,724
Gearbulk Holding, Ltd., 11.25%, 12/01/04 100,000 102,125
Honda Auto Lease Trust, 6.45%, 09/16/02 325,000 321,425
Hayes Lemerz Intl., Inc., 8.25%, 12/15/08 50,000 44,500
Northwest Asset Corp., 6.75%, 05/25/29 248,313 173,663
Merrill Lynch Mtge. Invest., Inc., 7.56%, 09/15/09 115,000 114,425
Salomon Smith Barney, Inc., 7.375%, 05/15/07 300,000 288,000
Texaco Capital, Inc., 5.5%, 01/15/09 220,000 186,725
----------
1,594,294
Food & Beverages: 1.3%
Archer Daniels Midland Co., 6.625%, 05/01/29 120,000 103,050
Hershey Foods Corp., 6.95%, 08/15/12 235,000 221,781
----------
324,831
Forest Products: 0.7%
Noranda Forest, Inc., 7.50%, 07/15/03 100,000 97,875
Stone Container Corp.,12.25%, 04/01/02 80,000 80,400
----------
178,275
Health Services: 0.3%
Tenet Healthcare Corp., 7.875%, 01/15/03 70,000 67,813
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 15
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CORPORATE NOTES (Continued)
Insurance Carriers: 1.2%
Conseco, Inc., 6.40%, 06/15/01 $200,000 $ 195,250
Prudential Insurance Co. America, 6.875%, 04/15/03 100,000 97,875
----------
293,125
Media & Communications: 1.4%
CSC Holdings, Inc., 8.125%, 07/15/09 125,000 123,125
Liberty Media Corp., 7.875%, 07/15/09 150,000 147,375
Metromedia Fiber Network, Inc., 10.00%, 12/15/09 70,000 70,700
----------
341,200
Miscellaneous Business Services: 0.4%
Allied Waste North America, 7.875%, 01/01/09 115,000 99,475
Miscellaneous Consumer Products: 4.4%
American Standard, Inc., 7.375%, 04/15/05 170,000 154,700
Dura Oper Corp., 9.00%, 05/01/09 150,000 139,875
Hedstrom Corp., 10.00%, 06/01/07 70,000 7,000
Jones Apparel Group, Inc., 7.875%, 06/15/06 230,000 220,225
Kinder Care Learning Centers, 9.50%, 02/15/09 70,000 66,325
P&L Coal Holdings Corp., 9.625%, 05/15/08 150,000 142,313
S C International Service, Inc., 9.25%, 09/01/07 60,000 55,200
Venture Holdings Trust, 12.00%, 06/01/07 100,000 85,000
WMX Technologies, Inc., 6.65%, 05/15/05 225,000 223,875
----------
1,094,513
Oil and Gas Extraction: 1.0%
Apache Corp., 7.70%, 03/15/26 155,000 149,575
Quaker State Corp., 6.63%, 10/15/05 100,000 92,750
----------
242,325
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE> 16
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CORPORATE NOTES (Continued)
Building & Real Estate: 0.6%
Pinnacle Holding, Inc., 0.00%, 03/15/08 $ 50,000 $ 33,000
Del Webb Corp., 10.25%, 02/15/10 120,000 111,300
----------
144,300
Telephone Communication: 2.5%
Allegiance Telecom, Inc., 0.00%, 02/15/08 125,000 89,063
Charter Communications Holdings, 8.625%, 04/01/09 100,000 92,000
Crown Castle International, 0.00%, 05/15/11 75,000 45,000
GTE Corp., 6.94%, 04/15/28 100,000 90,625
Global Crossing Holdings, Ltd., 9.625%, 05/15/08 100,000 97,750
RNC Corp., 10.125%, 01/15/10 50,000 49,000
US West Communications, Inc., 7.50%, 06/15/23 80,000 73,800
Worldcom, Inc., 6.95%, 08/15/28 100,000 89,250
----------
626,488
Textile Mill Products: 0.3%
GFSI, Inc., 9.625%, 03/01/07 45,000 27,000
Polymer Group, Inc., 9.00%, 07/01/07 60,000 57,150
----------
84,150
Transportation: 1.9%
Canadian National Railway Co., 6.90%, 07/15/28 165,000 145,611
Newport News Shipbuilding, Inc., 9.25%, 12/01/06 60,000 60,525
Norfolk Southern Corp., 7.80%, 05/15/27 100,000 98,000
Sea Containers Ltd., 7.875%, 02/15/08 200,000 168,000
----------
472,136
----------
TOTAL CORPORATE NOTES
(COST $9,349,861) 8,765,512
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE> 17
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
FEDERAL AGENCIES 53.2%
Federal Home Loan Mortgage Corp.: 0.2%
9.50%, 04/01/19 $ 26,523 $ 27,949
9.00%, 06/01/19 13,500 14,052
----------
42,001
Federal National Mortgage Assn.: 16.8%
4.625%, 10/15/01 1,270,000 1,225,106
6.625%, 01/15/02 1,410,000 1,401,935
6.92%, 03/19/07 75,000 73,795
6.21%, 11/07/07 855,000 803,281
7.00%, 09/01/10 175,511 171,397
7.00%, 05/01/12 141,176 137,867
6.50%, 03/01/13 314,705 300,738
7.50%, 08/25/21 9,069 8,938
----------
4,123,057
Government National Mortgage Assn.: 36.2%
9.00%, 04/15/09 2,257 2,332
9.00%, 05/15/09 12,275 12,685
9.00%, 05/15/09 3,602 3,723
9.00%, 05/15/09 3,314 3,425
9.00%, 05/15/09 1,100 1,137
9.00%, 05/15/09 1,663 1,718
11.25%, 09/15/15 79,035 86,840
11.50%, 11/15/15 9,757 10,891
10.00%, 06/15/17 21,557 23,369
9.25%, 07/15/17 7,087 7,397
10.00%, 11/15/17 7,692 8,339
11.50%, 02/15/18 3,271 3,651
10.00%, 03/15/19 29,630 32,120
10.00%, 03/15/20 13,759 14,915
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 18
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
FEDERAL AGENCIES (Continued)
Government National Mortgage Association (Continued)
9.25%, 05/15/20 $ 29,630 $ 30,926
9.25%, 05/15/21 87,640 91,475
9.25%, 06/15/21 21,241 22,170
7.50%, 06/15/23 84,596 82,507
7.00%, 08/15/23 72,908 69,399
7.50%, 10/15/23 126,453 123,331
7.00%, 01/15/24 122,887 116,973
7.00%, 03/15/24 86,423 82,263
7.00%, 01/15/25 371,920 354,254
9.50%, 01/15/25 18,648 19,761
9.50%, 05/15/25 8,807 9,333
7.00%, 02/15/26 465,963 443,536
7.50%, 09/15/26 172,696 168,432
8.00%, 05/15/27 205,880 205,429
6.50%, 04/15/28 752,872 695,699
7.00%, 05/15/28 357,004 339,821
7.00%, 06/15/28 305,503 290,799
6.50%, 10/15/28 1,831,203 1,692,142
6.50%, 11/15/28 508,820 470,180
6.50%, 03/15/29 797,422 736,866
8.00%, 07/15/29 208,323 207,867
7.00%, 08/15/29 994,060 946,216
7.50%, 09/15/29 553,989 540,311
8.00%, 09/15/29 252,157 251,605
8.00%, 01/15/30 258,187 257,622
8.00%, 01/15/30 476,886 475,841
----------
8,937,300
----------
TOTAL FEDERAL AGENCIES
(COST $13,686,489) 13,102,358
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE> 19
SECURITY FIRST TRUST SCHEDULE I
BOND SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS 8.9%
U.S. Treasury Bonds: 1.5%
6.75%, 08/15/26 $ 365,000 $ 371,340
U.S. Treasury Notes: 7.4%
5.375%, 06/30/03 25,000 24,032
3.375%, 01/15/07 303,946 287,196
6.625%, 02/15/27 1,170,000 1,173,615
5.25%, 02/15/29 395,000 328,656
-----------
1,813,499
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $2,211,600) 2,184,839
FOREIGN GOVERNMENT OBLIGATIONS 2.3%
Canada Government Bond, 6.00%, 06/01/08 538,961 555,934
-----------
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(COST $555,528) 555,934
-----------
TOTAL INVESTMENTS
(COST $25,803,478) 100.0% 24,608,643
Forward Foreign Currency Contracts
- ----------------------------------
CONTRACT TO BUY
996,000 Euro Dollars (Settlement Date 02/09/00;
Payable amount $1,002,026; Market value $971,499) (30,527)
Other assets less liabilities 114,950
-----------
NET ASSETS $24,693,066
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 20
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- -----------
<S> <C> <C> <C>
CAPITAL EQUIPMENT 2.2%
Electrical Equipment: 2.2%
General Electric Co. 45,000 $ 6,001,875
Hubbell, Inc. Class B 60,000 1,556,250
----------
7,558,125
CONSUMER CYCLICALS 0.6%
Automobiles & Related: 0.6%
Genuine Parts Co. 80,000 1,930,000
CONSUMER NONDURABLES 21.0%
Food & Beverages: 6.5%
Anheuser-Busch Company, Inc. 50,000 3,375,000
Campbell Soup Co. 100,000 3,143,750
General Mills, Inc. 108,000 3,368,250
Hershey Foods, Inc. 70,000 2,975,000
McCormick & Co. 100,000 2,643,750
Pepsico, Inc. 50,000 1,706,250
Quaker Oats Company 30,000 1,781,250
Ralston-Ralston Purina Group 100,000 2,806,250
----------
21,799,500
Health Services: 0.6%
Baxter International, Inc. 30,000 1,916,250
Miscellaneous Consumer Products: 7.0%
Colgate Palmolive Co. 60,000 3,555,000
Eastman Kodak 60,000 3,712,500
Fortune Brands, Inc. 120,000 3,480,000
Int'l. Flavors & Fragrance 100,000 3,568,750
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 21
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CONSUMER NONDURABLES (Continued)
Miscellaneous Consumer Products (Continued)
Owens Corning Fiber 70,000 $ 1,124,375
Philip Morris Companies, Inc. 100,000 2,093,750
Stanley Works 150,000 3,768,750
UST, Inc. 100,000 2,293,750
----------
23,596,875
Pharmaceuticals: 6.9%
Abbott Laboratories 150,000 4,893,750
American Home Products 140,000 6,588,750
Johnson & Johnson 45,000 3,872,813
Merck & Co. 27,500 2,167,344
Pharmacia-Upjohn, Inc. 50,000 2,350,000
Schering-Plough Corp. 80,000 3,520,000
----------
23,392,657
CONSUMER SERVICES 13.7%
Entertainment & Leisure: 2.2%
Hilton Hotels Corp. 400,000 3,375,000
Starwood Hotel & Resort Trust 175,000 4,200,000
----------
7,575,000
General Merchandise Stores: 5.3%
Albertsons, Inc. 125,000 3,828,125
J.C. Penney, Inc. 50,000 981,250
Neiman-Marcus Group, Inc.* 90,000 2,199,375
Rite Aid Corp. 150,000 1,059,375
Target Corp. 90,000 5,945,625
Toys R Us, Inc.* 250,000 2,578,125
Tupperware Corp. 100,000 1,631,250
----------
18,223,125
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
20
<PAGE> 22
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CONSUMER SERVICES (Continued)
Media & Communications: 4.9%
CBS Corp.* 75,000 $ 4,373,438
Walt Disney Holding Co. 156,300 5,675,644
Knight Ridder, Inc. 60,000 3,198,750
Meredith Corp. 60,000 2,100,000
Readers Digest Assn., Inc. 35,000 1,207,500
----------
16,555,332
Miscellaneous Business Services: 1.3%
Waste Management, Inc. 250,000 4,375,000
ENERGY 10.0%
Oil And Gas Extraction: 10.0%
Amerada Hess Corp. 65,000 3,457,188
Atlantic Richfield Co. 30,000 2,310,000
BP Amoco PLC 192,332 10,337,845
Baker Hughes, Inc. 175,000 4,309,375
Chevron Corp. 40,000 3,342,500
Exxon Mobil Corp. 57,122 4,769,687
Texaco, Inc. 30,600 1,617,975
Unocal Corp. 125,000 3,578,125
----------
33,722,695
FINANCIAL 15.6%
Banking: 5.4%
Chase Manhattan Corp. 30,000 2,413,125
Firstar Corp.* 175,000 4,178,125
Mellon Financial Corp. 100,000 3,431,250
National City Corp. 100,000 2,162,500
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
21
<PAGE> 23
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
FINANCIAL (Continued)
Banking (Continued)
Washington Mutual, Inc. 120,000 $ 3,045,000
Wells Fargo & Co. 66,660 2,666,400
----------
17,896,400
Federal Agencies: 0.9%
Freddie Mac 60,000 3,011,250
Financial Services: 4.5%
H&R Block, Inc. 60,000 2,587,500
Citigroup, Inc. 165,547 9,508,606
J.P. Morgan & Co., Inc. 25,000 3,070,313
----------
15,166,419
Insurance Carriers: 4.8%
Chubb Corp. 65,000 3,656,250
Loews Corp. 30,000 1,680,000
St. Paul Companies, Inc. 105,136 3,173,793
Travelers Aetna P&C 120,000 4,350,000
Unum Provident Corp. 125,000 3,343,750
----------
16,203,793
PROCESS INDUSTRIES 13.0%
Chemicals And Allied Products: 7.2%
Dow Chemical Co. 30,000 3,495,000
Dupont Co. 50,000 2,950,000
Fort James Corp. 125,000 3,343,750
Great Lakes Chemical Corp. 100,000 3,312,500
Hercules, Inc. 120,000 2,055,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE> 24
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
PROCESS INDUSTRIES (Continued)
Chemicals And Allied Products (Continued)
Imperial Chemical ADR 100,000 $ 3,306,250
Minnesota Mining & Manufacturing Co. 38,300 3,585,838
Pall Corp. 125,000 2,304,688
----------
24,353,026
Forest Products: 0.5%
Weyerhaeuser Co. 30,000 1,721,250
Metal Mining: 2.8%
Inco Ltd. 150,000 2,850,000
Newmont Mining Corp. 75,000 1,528,125
Phelps Dodge Corp. 50,000 2,906,250
Reynolds Metals Co. 30,000 2,002,500
----------
9,286,875
Paper And Allied Products: 2.5%
Kimberly-Clark 100,000 6,193,750
International Paper Co. 47,278 2,251,615
----------
8,445,365
TECHNOLOGY 6.9%
Computer and Office Equipment: 6.9%
BMC Software, Inc.* 75,000 2,840,625
Computer Associates International, Inc. 75,000 5,151,563
First Data Corp. 125,000 6,132,813
Hewlett-Packard Co. 60,000 6,495,000
Xerox Corp. 120,000 2,505,000
----------
23,125,001
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
23
<PAGE> 25
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- -----------
<S> <C> <C> <C>
TRANSPORTATION 5.8%
Aerospace and Defense: 4.0%
Boeing Company 100,000 $ 4,431,250
Honeywell International, Inc. 100,000 4,800,000
Lockheed Martin Corp. 100,000 1,875,000
Raytheon Co CL B 100,000 2,281,250
-----------
13,387,500
Railroad Transportation: 1.8%
Norfolk Southern Corp. 200,000 3,400,000
Union Pacific Corp. 70,000 2,800,000
-----------
6,200,000
UTILITIES 5.5%
Telephone Communication: 2.7%
AT&T Co. 30,000 1,582,500
GTE Corp. 40,000 2,932,500
SBC Communications, Inc. 104,865 4,522,303
-----------
9,037,303
Utility Holding Companies: 2.8%
Edison International 50,000 1,450,000
GPU 6,000 174,000
Niagara Mohawk Holdings, Inc.* 137,500 1,727,344
Peco Energy Co. 50,000 2,081,250
Scottish Power * 40,600 1,124,112
Unicom Corp. 75,000 2,934,370
-----------
9,491,076
-----------
TOTAL EQUITY SECURITIES
(COST $267,610,029) 317,969,817
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 26
SECURITY FIRST TRUST SCHEDULE I
T. ROWE PRICE GROWTH AND INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Short-Term Investments Portfolio Principal Value
- ---------------------- ----------- ---------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS 5.7%
Commercial Paper: 5.7%
Federal Home Loan Mortgage, 5.56%, 02/08/00 $ 4,420,000 $ 4,415,206
Motiva Enterprises IIC, 6.78%, 02/01/00 10,145,000 10,145,000
Santander Finance Corp., 5.64, 02/11/00 4,800,000 4,792,465
------------
TOTAL SHORT -TERM INVESTMENTS
(COST $19,352,671) 19,352,671
------------
TOTAL INVESTMENTS
(COST $286,962,700) 100.0% 337,322,488
Other assets less liabilities 3,530,890
------------
NET ASSETS $340,853,378
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
25
<PAGE> 27
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ---------
<S> <C> <C> <C>
CAPITAL EQUIPMENT 7.8%
Aerospace & Defense: 2.4%
Boeing Company 5,300 $234,856
Honeywell International, Inc. 4,837 232,176
TRW, Inc. 800 35,050
Tyco International, Ltd. 14,000 598,500
United Technologies Corp. 5,200 275,275
---------
1,375,857
Electrical Equipment: 4.9%
Emerson Electric Co. 6,400 352,400
General Electric Co. 18,800 2,507,450
---------
2,859,850
Machinery: 0.5%
Illinois Tool Works, Inc. 5,200 304,200
CONSUMER NONDURABLES 18.0%
Food & Beverages: 3.7%
Anheuser-Busch Company, Inc. 3,800 256,500
Best Foods 8,300 361,050
Coca Cola 15,300 878,794
Pepsico, Inc. 11,000 375,375
Seagram, Ltd. 4,900 284,506
---------
2,156,225
Health Services: 0.9%
Columbia/HCA Healthcare Corp. 7,200 196,650
Medtronic, Inc. 7,400 338,550
---------
535,200
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 28
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ---------
<S> <C> <C> <C>
CONSUMER NONDURABLES (Continued)
Miscellaneous Consumer Products: 3.7%
Colgate Palmolive Co. 6,900 $ 408,825
Gillette Co. 8,400 316,050
Heinz (H J) Co. 6,100 226,844
Lowes Companies, Inc. 3,900 174,038
McDonalds Corp. 9,500 353,281
Proctor & Gamble Co. 6,700 675,862
---------
2,154,900
Pharmaceuticals: 9.7%
Abbott Laboratories 9,500 309,938
American Home Products Co. 11,100 522,394
Amgen, Inc.* 3,900 248,381
Bristol Myers Squibb Co. 14,400 950,400
Johnson & Johnson 10,000 860,625
Merck & Co. 17,200 1,355,575
Pfizer, Inc. 19,300 702,037
Warner Lambert Co. 6,800 645,575
---------
5,594,925
CONSUMER CYCLICALS 1.2%
Automobiles & Related: 1.2%
Ford Motor Co. 7,300 363,175
General Motors Corp. 4,500 361,969
-------
725,144
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
27
<PAGE> 29
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ---------
<S> <C> <C> <C>
CONSUMER SERVICES 8.9%
General Merchandise Stores: 4.8%
Costco Wholesale Corp.* 5,100 $249,581
Federated Department Stores, Inc.* 5,000 208,125
Gap, Inc. 6,600 294,938
Home Depot, Inc. 10,050 569,081
Walmart Stores 26,900 1,472,775
---------
2,794,500
Media & Communications: 3.6%
CBS Corp.* 8,600 501,488
Clear Channel Communication, Inc.* 3,400 293,675
Walt Disney Holding Co. 14,500 526,531
Time Warner, Inc. 6,100 487,619
Tribune Co. 6,600 278,438
---------
2,087,751
0.5%
Miscellaneous Business Services:
Cendant Corp.* 13,000 262,438
ENERGY 6.9%
Oil And Gas Extraction: 6.9%
Enron Corp. 7,200 485,550
Exxon Mobil Corp. 25,828 2,156,638
Royal Dutch Petroleum Co. ADR 13,200 726,825
Schlumberger Limited 7,000 427,438
Transocean Sedco Forex, Inc. 6,726 213,970
---------
4,010,421
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
28
<PAGE> 30
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ---------------- ----------- ---------- ---------
<S> <C> <C> <C>
FINANCIAL 13.9%
Banking: 5.1%
BankAmerica Corp. 7,946 $ 384,884
Bank of New York Company, Inc. 8,200 333,125
Chase Manhattan Corp. 8,100 651,544
Firstar Corp.* 11,700 279,338
Household International, Inc. 7,700 271,425
Mellon Financial Corp. 7,200 247,050
Suntrust Banks, Inc. 4,600 273,987
Wells Fargo & Co. 12,800 512,000
---------
2,953,353
Federal Agencies: 0.8%
Federal National Mortgage Assn. 7,600 455,525
Financial Services: 4.8%
American Express Co. 2,100 346,106
Associates First Capital Corp. 9,374 187,480
Citigroup, Inc. 18,375 1,055,414
Fleet Boston Financial Corp. 8,682 272,940
Morgan Stanley Dean Witter 13,970 925,513
---------
2,787,453
Insurance Carriers: 3.2%
American International Group 14,987 1,560,521
Cigna Corp. 4,100 294,175
---------
1,854,696
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
29
<PAGE> 31
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ----------------- ----------- ---------- ---------
<S> <C> <C> <C>
PROCESS INDUSTRIES 3.2%
Chemicals and Allied Products: 1.5%
Dow Chemical Co. 2,400 $ 279,600
Dupont Co. 8,500 501,500
Rohm & Haas Co. 1,400 59,150
---------
840,250
Metal Mining: 0.6%
Alcoa, Inc. 5,100 355,406
Paper And Allied Products: 1.1%
Bowater, Inc. 4,900 253,269
International Paper Co. 8,700 414,338
---------
667,607
TECHNOLOGY 31.0%
Communication Equipment: 6.0%
Corning, Inc. 2,900 447,325
Lucent Technologies, Inc. 15,700 867,425
Motorola, Inc. 6,600 902,550
Nextel Communications, Inc.* 2,200 234,025
Nortel Networks Corp. 6,700 640,688
Qualcomm, Inc. 3,200 406,200
---------
3,498,213
Computer & Office Equipment: 25.0%
America Online, Inc.* 11,800 671,863
Applied Materials, Inc.* 2,800 384,300
Cisco System Inc.* 20,700 2,266,650
Dell Computer Corp.* 10,600 408,763
EMC Mass Corp.* 8,200 873,300
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
30
<PAGE> 32
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ----------------- ----------- ---------- ----------
<S> <C> <C> <C>
TECHNOLOGY (Continued)
Computer & Office Equipment (Continued)
Electronic Data System Corp. 5,000 $ 338,125
Hewlett Packard Co. 7,000 757,750
Intel Corp. 21,400 2,117,263
International Business Machines Corp. 10,500 1,177,969
Microsoft Corp. 27,400 2,681,775
Oracle Corp.* 20,800 1,039,025
Sun Microsystems, Inc.* 7,600 597,075
Texas Instruments, Inc. 7,400 798,275
Yahoo, Inc.* 1,400 450,886
----------
14,563,019
UTILITIES 9.1%
Telephone Communication: 7.5%
AT&T Co. 18,000 949,500
Alltel Corp. 4,200 280,350
Bell Atlantic Corp. 9,100 563,631
GTE Corp. 5,500 403,219
MCI Worldcom, Inc.* 18,100 831,469
Mediaone Group, Inc.* 3,300 262,350
SBC Communications, Inc. 17,600 759,000
Sprint Corp. 5,200 336,373
----------
4,385,892
Utility Holding Companies: 1.6%
Calpine Corp. 2,700 197,438
Duke Entergy Corp. 4,200 242,550
FPL Group, Inc. 6,300 265,781
Montana Power Company 5,400 218,700
----------
924,469
</TABLE>
* Non-income producing
The accompanying notes are an integral part of these financial statements.
31
<PAGE> 33
SECURITY FIRST TRUST SCHEDULE I
EQUITY SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of No. of Market
Equity Securities Portfolio Shares Value
- ----------------- ----------- ---------- -----------
<S> <C> <C> <C>
TOTAL INVESTMENTS
(COST $41,295,419) 100.0% $58,147,294
Other Assets Less Liabilities 1,457,316
-----------
NET ASSETS $59,604,610
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 34
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
CORPORATE NOTES 2.0%
Finance & Credit: 2.0%
Deutsche Mortgage & Asset , 6.22%, 09/15/07 $111,010 $104,164
GMAC Mortgage Corp., 5.94%, 07/01/13 447,541 396,642
Residential Accredit Lines, Inc., 6.75%, 05/25/28 133,220 129,619
----------
TOTAL CORPORATE NOTES
(COST $674,757) 630,425
U.S. GOVERNMENT OBLIGATIONS 40.5%
U.S. Treasury Bonds: 31.2%
8.75%, 11/15/08 500,000 531,290
12.75%, 11/15/10 600,000 766,290
14.00%, 11/15/11 50,000 69,098
8.50%, 02/15/20 3,130,000 3,742,322
6.375%, 08/15/27 3,580,000 3,478,221
5.25%, 02/15/29 230,000 191,369
3.875%, 04/15/29 1,010,491 945,828
----------
9,724,418
U.S. Treasury Notes: 9.3%
5.875%, 11/15/04 170,000 164,385
6.50%, 10/15/06 2,400,000 2,365,224
6.00%, 08/15/09 375,000 357,461
----------
2,887,070
----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $13,380,149) 12,611,488
</TABLE>
The accompanying notes are an integral part of these financial statements.
33
<PAGE> 35
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ---------
<S> <C> <C> <C>
FEDERAL AGENCIES 56.9%
Federal Farm Credit Bank: 6.8%
6.05%, 04/21/03 $550,000 $535,260
6.94%, 05/19/05 125,000 123,840
7.37%, 08/01/06 1,500,000 1,472,805
---------
2,131,905
Federal Home Loan Bank: 0.8%
8.00%, 08/27/01 250,000 254,455
Federal Home Loan Mortgage Corp.: 17.7%
7.36%, 06/05/07 1,500,000 1,447,215
7.00%, 07/01/07 75,452 72,740
6.625%, 09/15/09 730,000 694,413
7.00%, 09/01/10 164,379 160,475
6.50%, 04/01/11 1,023,554 978,128
6.00%, 05/11/11 1,084,128 1,013,313
5.50%, 05/01/14 485,409 443,542
6.915%, 07/01/27 286,532 284,919
6.50%, 05/01/29 454,883 422,614
---------
5,517,359
Federal National Mortgage Assn.: 24.3%
6.125%, 11/25/03 152,452 146,740
5.125%, 02/13/04 175,000 162,649
6.14%, 09/01/08 225,000 205,160
6.09%, 10/01/08 516,000 469,080
6.00%, 11/01/08 295,156 281,319
6.50%, 03/01/09 90,045 90,045
7.00%, 04/01/11 859,657 839,507
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE> 36
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Fixed Maturities Portfolio Principal Value
- ---------------- ----------- ---------- ----------
<S> <C> <C> <C>
FEDERAL AGENCIES (Continued)
Federal National Mortgage Assn. (Continued)
7.00%, 05/01/11 $413,202 $ 403,516
7.00%, 09/01/11 278,654 272,123
5.50%, 07/01/13 452,556 413,238
8.00%, 11/01/13 575,154 573,895
5.50%, 01/01/14 473,828 432,662
5.50%, 02/01/14 471,216 430,277
6.00%, 03/01/14 62,878 58,731
8.00%, 08/01/14 281,124 284,461
6.50%, 05/17/15 700,000 644,658
6.315%, 10/01/23 697,795 625,399
8.00%, 10/01/25 154,291 153,953
6.00%, 06/01/29 498,809 449,083
6.50%, 06/01/29 498,008 462,364
6.50%, 09/01/29 198,141 183,960
----------
7,582,820
Government National Mortgage Assn.: 6.0%
8.25%, 02/15/09 226,901 229,310
6.00%, 04/15/14 487,918 454,525
7.00%, 10/15/23 500,050 475,982
7.50%, 01/15/26 719,810 702,040
----------
1,861,857
Other Federal Agencies: 1.3%
Small Business Admin., 5.50%, 10/01/18 341,090 298,071
Student Loan Marketing Assn., 7.50%, 03/08/00 100,000 100,132
----------
398,203
----------
TOTAL FEDERAL AGENCIES
(COST $18,475,301) 17,746,599
</TABLE>
The accompanying notes are an integral part of these financial statements.
35
<PAGE> 37
SECURITY FIRST TRUST SCHEDULE I
U.S. GOVERNMENT INCOME SERIES
PORTFOLIO OF INVESTMENTS (CONTINUED)
JANUARY 31, 2000
UNAUDITED
<TABLE>
<CAPTION>
Percentage
of Market
Value of Market
Short-Term Investments Portfolio Principal Value
- ---------------------- ----------- ---------- -----------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS 0.6%
Federal Home Loan Bank, 5.72%, 02/01/00
(COST $200,000) $200,000 $200,000
-----------
TOTAL INVESTMENTS
(COST $32,730,207) 100.0% 31,188,512
Other assets less liabilities 628,264
-----------
NET ASSETS $31,816,776
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
36
<PAGE> 38
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
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 T. Rowe Price Growth and Income Series (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 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 annually as of
December 31.
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 that 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.
37
<PAGE> 39
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE A--ORGANIZATION OF THE TRUST AND SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
CURRENCY TRANSLATION -- Assets and liabilities are translated into U.S. dollars
at the prevailing exchange rate at the end of the reporting period. Purchases
and sales of securities and income and expenses are translated into U.S. dollars
at the prevailing exchange rate on the dates of such transactions. The effect of
changes in foreign exchange rates on realized and unrealized security gains and
losses is reflected as a component of such gains and losses.
FOREIGN CURRENCY CONTRACTS -- The Trust may use foreign currency contracts to
facilitate transactions in foreign securities and to manage the Trust's currency
exposure.
Contracts to buy and to sell foreign currency generally are used to minimize the
effect of currency fluctuation on the portfolios. Also, a contract to buy or to
sell can offset a previous contract. Losses may arise from changes in the value
of the foreign currency or if the counterparties do not perform under the
contractual terms.
The U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by The Wall Street Journal. Purchases
and sales of forward foreign currency contracts having the same settlement date
are offset, and any gain or loss is recognized on the date of offset; otherwise,
the gain or loss is recognized on the settlement date.
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. Net realized gain or loss on sale of investments is determined by the
specific identification method.
NOTE B -- REMUNERATION OF MANAGER AND OTHERS
Bond Series and T. Rowe Price Growth and Income Series:
Security First Investment Management Corporation (Security Management or
Manager) serves as both investment adviser and manager, and 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' sub-advisers, Neuberger & Berman,
LLC and T. Rowe Price Associates, respectively. 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, 2000,
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.
38
<PAGE> 40
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE B -- REMUNERATION OF MANAGER AND OTHERS (CONTINUED)
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 Growth and Income Series, while Neuberger & Berman, LLC
provides the same for the Bond Series. T. Rowe Price Associates and Neuberger &
Berman, LLC are each paid an annual fee of .35% of the average daily net assets
of the series for which they respectively provide investment advice less any
compensation payable to Security Management acting as adviser on certain assets
in which a series may invest.
Equity Series and U.S. Government Income Series:
Security Management serves as both investment adviser and manager, and is
entitled by agreement to a monthly fee equal to 1/17 of 1% (equivalent annually
to .7%) of the average daily net asset value of the Equity Series and 1/22 of 1%
(equivalent annually to .55%) of the average daily net asset value of the U.S.
Government Income Series, less compensation payable to the Series' sub-adviser,
Blackrock, Inc. (Blackrock). 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 Blackrock waive their fees.
Blackrock provides investment advice and makes investment decisions for the U.S.
Government Income Series and for the Equity Series. Blackrock is paid an annual
fee of .40% of the average daily net assets of the U.S. Government Income Series
and an annual fee of .55% of the average daily net assets of the Equity Series.
39
<PAGE> 41
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE C -- INVESTMENT SECURITIES TRANSACTIONS
Purchases and sales of fixed maturities and equity securities for the period
ended January 31, 2000 were as follows:
<TABLE>
<CAPTION>
T. Rowe Price
Growth U.S.
and Government
Income Equity Income
Bond Series Series Series Series
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Government Securities:
Purchases $16,691,666 $33,012,421
Sales 17,396,266 31,857,459
Other Investment Securities:
Purchases 9,175,684 $49,522,476 $17,210,038 256,172
Sales 7,372,111 23,174,730 20,179,871 1,597,940
</TABLE>
The cost of investments at January 31, 2000 was the same for both financial
statement and federal income tax purposes. At January 31, 2000, 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 $29,051 $1,254,413 $(1,225,362)
T. Rowe Price Growth and Income Series 92,425,883 42,066,095 50,359,788
Equity Series 18,195,603 1,343,728 16,851,875
U.S. Government Income Series 7,126 1,548,821 (1,541,695)
</TABLE>
40
<PAGE> 42
SECURITY FIRST TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 2000
Bond Series 547,468 379,121 (520,655) 405,934
T. Rowe Price Growth and Income Series 934,100 385,000 1,004,682 (482,097) 1,841,685
Equity Series 64,154 39,195 186,614 (328,881) (38,918)
U.S. Government Income Series 251,169 380,323 (351,107) 280,385
YEAR ENDED JULY 31, 1999
Bond Series 2,312,332 240,383 51,543 (682,801) 1,921,457
T. Rowe Price Growth and Income Series 2,272,424 331,107 1,164,634 (812,020) 2,956,145
Equity Series 94,561 56,914 1,098,636 (814,089) 436,022
U.S. Government Income Series 441,277 351,815 113,764 (828,203) 78,653
</TABLE>
41
<PAGE> 43
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 TOTAL
AND INCOME DISTRIBUTIONS
NET ASSET UNREALIZED (LOSS) DIVIDENDS FROM NET ASSET
VALUE AT NET GAINS FROM FROM NET REALIZED VALUE AT
BEGINNING INVESTMENT (LOSSES) ON INVESTMENT INVESTMENT CAPITAL END OF TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS PERIOD RETURN(1)
----------- --------- ----------- ---------- ---------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BOND SERIES
Year ended July 31,
1995 $3.82 $ .24 $ .08 $ .32 $(.22) $3.92 8.38%
1996 3.92 .24 (.04) .20 (.24) 3.88 5.10
1997 3.88 .24 .14 .38 (.24) 4.02 9.79
1998 4.02 .19 .11 .30 (.21) 4.11 7.46
1999 4.11 .18 (.14) .04 (.18) (.04) 3.93 0.97
Six months ended
January 31, 2000 3.93 .12 (.14) (.02) (.22) 3.69 (0.51)
T. ROWE PRICE
GROWTH AND
INCOME SERIES
Year ended July 31,
1995 $9.26 $ .29 $1.35 $1.64 $(.26) $(.06) $10.58 17.71%
1996 10.58 .30 1.56 1.86 (.30) (.04) 12.10 17.58
1997 12.10 .30 4.69 4.99 (.29) (.54) 16.26 41.24
1998 16.26 .28 1.27 1.55 (.30) (.95) 16.56 9.53
1999 16.56 .29 2.45 2.74 (.29) (1.00) 18.01 16.55
Six months ended
January 31, 2000 18.01 .14 (1.83) (1.69) (.29) (.77) 15.26 (9.66)
EQUITY SERIES
Year ended July 31,
1995 $4.99 $ .05 $ .71 $ .76 $(.05) $5.70 15.23%
1996 5.70 .10 .46 .56 (.05) $(.16) 6.05 9.82
1997 6.05 .09 2.60 2.69 (.11) (.45) 8.18 44.46
1998 8.18 .07 1.04 1.11 (.08) (.64) 8.57 13.57
1999 8.57 .06 1.42 1.48 (.07) (1.44) 8.54 17.27
Six months ended
January 31, 2000 8.54 .02 .53 .55 (.05) (.26) 8.78 6.44
U.S. GOVERNMENT
INCOME SERIES
Year ended July 31,
1995 $4.91 $ .21 $ .15 $ .36 $(.14) $5.13 7.33%
1996 5.13 .18 .04 .22 (.19) $(.01) 5.15 4.29
1997 5.15 .23 .20 .43 (.22) 5.36 8.35
1998 5.36 .27 .06 .33 (.24) 5.45 6.16
1999 5.45 .30 (.24) .06 (.31) (.10) 5.10 1.10
Six months ended
January 31, 2000 5.10 .15 (.15) .00 (.29) 4.81 0.00
</TABLE>
(1) Total return computed after deduction of all series expenses, but before
deduction of actuarial risk charges and other fees of the variable annuity
account.
42
<PAGE> 44
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,
1995 1.29% 6.27% 56% $ 7,977,781
1996 .90 6.32 34 8,981,365
1997 .75 6.41 54 10,634,720
1998 .73 5.78 125 17,934,392
1999 .66 5.46 147 24,717,704
Six months ended
January 31, 2000 .66 6.14 100 24,693,066
T. ROWE PRICE
GROWTH AND INCOME SERIES
Year ended July 31,
1995 .74% 3.10% 8% $ 83,789,646
1996 .64 2.73 8 112,552,893
1997 .57 2.44 14 204,703,098
1998 .57 1.92 11 290,441,528
1999 .59 1.83 15 369,111,185
Six months ended
January 31,2000 .54 1.78 7 340,853,378
EQUITY SERIES
Year ended July 31,
1995 1.00% 1.29% 84% $ 7,765,719
1996 1.00 2.24 88 20,701,776
1997 1.00* 1.56* 55 47,571,469
1998 .91* .86* 87 54,803,152
1999 .81 .72 23 58,313,162
Six months ended
January 31, 2000 .78 .50 30 59,604,610
U.S. GOVERNMENT INCOME SERIES
Year ended July 31,
1995 .70% 5.19% 16% $ 5,996,149
1996 .70 5.38 148 14,888,824
1997 .70** 5.68** 62 28,889,460
1998 .66** 5.53** 103 34,090,919
1999 .71 5.37 307 32,312,549
Six months ended
January 31, 2000 .68 5.80 104 31,816,776
</TABLE>
* The former investment adviser had agreed to waive a portion of its
management and advisory fees. Absent this agreement, the ratio of
expenses to average net assets and the ratio of net investment income to
average net assets would have been .98% and .81% and 1.05% and 1.51% for
1998 and 1997 respectively.
** The former investment adviser had agreed to waive a portion of its
management and advisory fees. Absent this agreement, the ratio of
expenses to average net assets and the ratio of net investment income to
average net assets would have been .90% and 5.27% and 1.04% and 5.34%
for 1998 and 1997 respectively.
43
<PAGE> 45
VARIABLE ANNUITIES OFFER
CHOICES AND BENEFITS THAT
REGULAR MUTUAL FUNDS CAN'T
Tax-deferred retirement savings plans are among the best investments a
person can make today for his or her future. As a vehicle for creating
tax-favored retirement savings, 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 can provide 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,
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 T. ROWE PRICE 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 primarily through investment in
common stocks.
SECURITY FIRST TRUST EQUITY SERIES also seeks to provide growth of
capital and income through investment in common stocks of high quality
companies. The fund is for individuals willing to accept a degree of risk.
SECURITY FIRST TRUST U.S. GOVERNMENT INCOME SERIES is for conservative
investors and seeks to provide current income through investment in a
diversified portfolio limited primarily to U.S. government securities.
[SECURITY FIRST LOGO]
11365 West Olympic Boulevard
Los Angeles, California 90064
(310) 312-6100
SEMI-ANNUAL REPORT
JANUARY 31, 2000
SECURITY
FIRST
TRUST
BOARD OF TRUSTEES
Jack R. Borsting Howard H. Kayton
Katherine L. Hensley Lawrence E. Marcus
Security First Trust Bond Series
Security First Trust T. Rowe Price Growth and Income Series
Security First Trust Equity Series
Security First Trust U.S. Government Income Series
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