Keyport Variable Investment Trust
Colonial-Keyport Growth and Income Fund
Colonial-Keyport Utilities Fund
Colonial-Keyport International Fund for Growth
Colonial-Keyport Strategic Income Fund
Colonial-Keyport U.S. Fund for Growth
Newport-Keyport Tiger Fund
Semi-annual Report
June 30, 1996
<PAGE>
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
President's Letter ..................................................... 1
Portfolio Manager's Discussion:
Colonial-Keyport Growth and Income Fund ............................. 3
Colonial-Keyport Utilities Fund ..................................... 5
Colonial-Keyport International Fund for Growth ...................... 7
Colonial-Keyport Strategic Income Fund ............................. 9
Colonial-Keyport U.S. Fund for Growth ............................... 11
Newport-Keyport Tiger Fund .......................................... 13
Financial Statements:
Colonial-Keyport Growth and Income Fund ............................. 15
Colonial-Keyport Utilities Fund ..................................... 21
Colonial-Keyport International Fund for Growth ...................... 26
Colonial-Keyport Strategic Income Fund ............................. 32
Colonial-Keyport U.S. Fund for Growth ............................... 39
Newport-Keyport Tiger Fund .......................................... 45
Notes to Financial Statements ......................................... 50
<PAGE>
- -------------------------------------------------------------------------------
PRESIDENT'S LETTER
Keyport Variable Investment Trust
- -------------------------------------------------------------------------------
Dear Fellow Contract Owner:
We are pleased to present this semi-annual report for the Keyport Variable
Investment Trust--Growth and Income Fund, Utilities Fund, International Fund
for Growth, Strategic Income Fund, U.S. Fund for Growth and Newport Tiger
Fund.
This report provides us with the opportunity to reflect on the investment
environment of the past six months. At the end of December, we reported on
mixed investor sentiment --some investors were calling for a major market
correction, while others heralded 1996 as the beginning of the new economic
era. Neither extreme has come to pass, but conditions remain volatile, to say
the least.
Where We've Been
It was a good period for the stock market, as many companies' earnings
continued to meet or exceed expectations, despite the threat higher interest
rates posed to corporate profitability. Although the stock market as a whole
performed well, growth-oriented small-cap stocks, in particular, gained
momentum this period, reversing the pattern of 1995 and early 1996, when
large-cap stocks raced ahead of the broader market. Large-cap stocks,
however, suffered much less than smaller stocks in the late June selloff, as
many investors scrambled to find stocks that might provide some protection if
the overall market continues to slide.
It was a much tougher time for fixed income investors. In fact, according
to Lipper Analytical Services, Inc., taxable bond funds had an average gain
of only 0.28 percent for the six months ended June 30, as an astonishing
payroll report set off inflation alarms and propelled long-term rates higher.
The bond market ended an otherwise dismal first half on a positive note,
however. The yield on the benchmark 30-year Treasury bond, which had reached
a mid-June peak of 7.2 percent, eased by month's end, indicating the bond
market finally may have brushed off the effects of stronger-than-expected
economic reports--at least for the time being.
The Asian stock markets also posted positive returns during the period.
Capital flows into Asia surged as foreign investors were drawn by renewed
economic growth, lower interest rates and undervalued stocks in these
nations, particularly Malaysia, Indonesia and the Philippines. Construction
and development continued to thrive in Asia. Improving fundamentals in the
real estate markets added to performance potential.
Where Are We Going?
The markets remain volatile, as a mixed bag of economic data has left many
investors confused about which direction the economy and interest rates are
headed. And many believe the stock market's recent ups and downs could be a sign
that the bull market is finally winding down, as volatility tends to increase
late in a market cycle.
Although we expect some continued volatility in the near term, we think the
markets could stabilize by year end. That's because, despite some conflicting
reports, several key economic indicators are sending encouraging signals to
investors. For example, inflation worries--sparked in large part by rising
grain, copper and oil prices have started to ebb. In addition, new and
existing home sales have slowed, exports are weak and both business
1
<PAGE>
- -------------------------------------------------------------------------------
PRESIDENT'S LETTER
Keyport Variable Investment Trust
- -------------------------------------------------------------------------------
and consumer spending have leveled off--all events that tend to foreshadow a
possible slowdown in economic activity. This combination of moderate economic
growth and mild inflation could prove beneficial to both the stock and bond
markets. Moreover, few investors seem willing to dwell on dire scenarios.
Inflows into equity funds, for example, continue at near-record pace; in
fact, more money poured into stock funds in the first six months of 1996 than
in all of 1995, when investors put a record $128 billion into equity funds.
And while we are starting to see net outflows from certain sectors, we
believe it's a fairly safe bet that investors will continue to put money into
stock and bond funds, as they focus on achieving their long-term financial
goals.
The Basics
While no one can predict what might happen to the markets in the future, we
believe it's important that investors understand the factors that move the
markets--not just to profit from them, but to gain the patience to ride out
short-term volatility in their investments. No matter what direction you
think the economy is heading, it's important to remember the basics: Think
long term and periodically re-evaluate your portfolio to make sure it
continues to match your goals, risk tolerance and time horizon.
As always, we thank you for investing in the Keyport Variable Investment
Trust, as we look forward to serving your investment needs.
Sincerely,
/s/ Richard R. Christensen
Richard R. Christensen
President
Keyport Variable Investment Trust
2
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- -------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport Growth & Income Fund seeks primarily income and capital
growth and, secondarily, capital preservation.
Fund Performance (as of June 30, 1996)
Inception Date ...............................7/01/93
Assuming reinvestment of all
distributions 6-month total return ....... 8.59%
Net asset per share on 12/31/95 ............ $12.60
Net asset per share on 6/30/96 ............. $13.67
Portfolio Manager's Discussion
Daniel Rie is lead portfolio manager of Colonial-Keyport Growth and Income
Fund. Dan is senior vice president of Colonial Management Associates, Inc.
and director of the Equity Investment Department.
What was the investment environment for stocks during the period?
The equity market in general was quite favorable during the past six months.
During the first half of 1996, a slow down in large stock profitability took
place, making growth-oriented small and mid-capitalization stocks the better
performing sectors during much of the period. During this particular cycle, the
stocks in which the Fund invests--value-oriented stocks of mid-cap
companies--were out of favor. Declining interest rates in Europe had a positive
effect on economic growth and prices of foreign equity holdings.
What market sectors contributed to the Fund's performance?
Financial services stocks, the Fund's largest sector holding, and consumer
cyclical stocks performed well during the period. Both sectors benefited from
expectations of a strengthening economy.
How did the Fund perform relative to the Standard & Poor's 500 Index?
The Fund underperformed the Standard & Poor's 500 Index, a broad-based,
unmanaged index that tracks the performance of U.S. stocks. The Fund had a total
return of 8.59% while the Index had a total return of 10.08%. The Index,
comprised solely of U.S. stocks and heavily weighted in large-cap companies,
responded better than the Fund's holdings to market conditions. The Fund held a
portion of its assets in U.S. Government bonds and international stocks. While
these investments may cushion the Fund's value when U.S. stock markets are down,
they may also limit performance in a strong market, such as the one we have
experienced over the period.
What is your investment outlook for the rest of 1996?
We believe that the economy will continue to grow, but at a slower pace than
experienced during the first half of 1996. We believe this will provide a
relatively favorable environment for stocks. When value stocks return to favor,
the Fund will be well-positioned to take advantage of improved market
conditions.
3
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- -------------------------------------------------------------------------------
[BEGIN MOUNTAIN LINE CHART]
Colonial-Keyport Growth & Income Fund and S&P 500 Index
Performance of a Hypothetical $10,000 Investment
One-Year Average Annual Return at June 30, 1996
Since Inception 6 Month
13.73% 8.59%
CKGIF S&P 500
6/30/93 10000 10000
7/31/93 10070 9960
8/31/93 10530 10337
9/30/93 10540 10258
10/31/93 10680 10470
11/30/93 10410 10370
12/31/93 10501 10495
1/31/94 10856 10852
2/28/94 10704 10557
3/31/94 10339 10098
4/30/94 10420 10227
5/31/94 10339 10394
6/30/94 10116 10140
7/31/94 10400 10473
8/31/94 10785 10901
9/30/94 10582 10635
10/31/94 10572 10873
11/30/94 10217 10478
12/31/94 10422 10633
1/31/95 10536 10909
2/28/95 10941 11333
3/31/95 11180 11667
4/30/95 11461 12010
5/31/95 11793 12490
6/30/95 12115 12779
7/31/95 12458 13203
8/31/95 12645 13236
9/30/95 12874 13794
10/31/95 12884 13745
11/30/95 13477 14348
12/31/95 13551 14624
1/31/96 14078 15121
2/29/96 14239 15262
3/31/96 14229 15409
4/30/96 14476 15636
5/31/96 14748 16038
6/30/96 14715 16099
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
[END MOUNTAIN LINE CHART]
4
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- -------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport Utilities Fund has two straightforward goals: first,
current income, and second, long-term growth. The Fund pursues its objective
by investing primarily in common and preferred stock issued by domestic
utility companies.
Fund Performance (as of June 30, 1996)
Inception Date ................................... 7/01/93
Assuming reinvestment of all
distributions 6-month total return ............ 1.71%
Net asset per share on 12/31/95 .................. $10.50
Net asset per share on 6/30/96 ................... $10.68
Portfolio Manager's Discussion
John Lennon is lead portfolio manager of Colonial-Keyport Utilities Fund
and is vice president of Colonial Management Associates, Inc.
How have utility stocks performed during the past six months?
The dramatic returns seen by the utility market in 1995 did not continue
through the first part of 1996. All three sectors of the utilities market in
which the Fund invests--telephone, electric power and natural gas--are very
sensitive to changes in interest rates. As a result of rising interest rates,
these stocks gave back much of their gains to end the period with modest
total returns.
What factors contributed to performance during this period?
Rising interest rates were the biggest factor. However, the Fund benefited
from increased investments in the natural gas sector. The severe winter
weather in many parts of the country resulted in an increased demand for gas.
The Fund continued to increase its holdings in the telephone and natural gas
sectors and to reduce its holdings in the electric utility sector. We believe
that telephone and gas stocks offer greater earnings growth and total return
potential than electric utility stocks, particularly in light of the
increasingly competitive environment expected for electric utility companies.
How did the Fund's performance compare to the Dow Jones Utility Average and
the Standard & Poor's 500 Index?
For the period ended June 30, 1996, the Fund outperformed the Dow Jones
Utility Average and underperformed the Standard & Poor's 500 Index, two
broad-based, unmanaged indices that track the performance of utility stocks
and U.S. stocks, respectively. The total return for the Fund was 1.71%, while
the return on the Dow Jones Utility Average was 0.45% and the return on the
Standard & Poor's 500 Index was 10.08%.
The Fund was able to outperform the Dow Jones Utility Average because of
investments in a broader range of utility stocks. The Fund was invested in
electric, natural gas and telephone stocks, while the Average tracks only the
electric and gas sectors. The Fund underperformed the Standard & Poor's 500
Index because the Index tracks the broader market and includes many
industrial companies that benefited from expectations of an improving economy.
5
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- -------------------------------------------------------------------------------
[BEGIN MOUNTAIN CHART]
[Performance Chart with Plot points]
Colonial-Keyport Utilities Fund, Dow Jones Utility Average and S&P 500 Index
Performance of a Hypothetical $10,000 Investment
One-Year Average Annual Return at June 30, 1996
Since Inception 6 Month
6.63% 1.71%
CKUF DOW JONES S&P 500
6/30/93 10000 10000 10000
7/31/93 10110 10237 9960
8/31/93 10350 10556 10337
9/30/93 10260 10340 10258
10/31/93 10120 9986 10470
11/30/93 9670 9405 10370
12/31/93 9830 9631 10495
1/31/94 9667 9508 10852
2/28/94 9219 8911 10557
3/31/94 8954 8369 10098
4/30/94 9148 8517 10227
5/31/94 8761 8011 10394
6/30/94 8577 7686 10140
7/31/94 8883 8102 10473
8/31/94 8913 8286 10901
9/30/94 8699 8010 10635
10/31/94 8812 8023 10873
11/30/94 8771 8008 10478
12/31/94 8820 8158 10633
1/31/95 9353 8697 10909
2/28/95 9418 8793 11333
3/31/95 9364 8566 11667
4/30/95 9560 8902 12010
5/31/95 9995 9514 12490
6/30/95 10060 9377 12779
7/31/95 10136 9483 13203
8/31/95 10376 9461 13236
9/30/95 10930 10081 13794
10/31/95 11180 10116 13745
11/30/95 11387 10247 14348
12/31/95 11921 10768 14624
1/31/96 12148 11053 15121
2/29/96 11864 10561 15262
3/31/96 11751 10305 15409
4/30/96 11660 10202 15636
5/31/96 11682 10256 16038
6/30/96 12125 10831 16099
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
[END MOUNTAIN CHART]
6
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport International Fund For Growth
- -------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport International Fund for Growth seeks long-term growth by
investing primarily in non-U.S. equities.
Fund Performance (as of June 30, 1996)
Inception Date ................................ 5/02/94
Assuming reinvestment of all
distributions 6-month total return ......... 6.60%
Net asset per share on 12/31/95 ............... $1.97
Net asset per share on 6/30/96 ................ $2.11
Portfolio Manager's Discussion
Bruno Bertocci and David Harris were named portfolio co-managers of
Colonial-Keyport International Fund for Growth as of January 1, 1996. They
are vice presidents of Colonial Management Associates, Inc. and are jointly
employed by Stein Roe Global Capital Management.
What is the Fund's investment philosophy for managing international stocks?
We are value-oriented investors and we believe that world markets are
comprised of companies that compete either globally or locally. Companies that
compete globally are evaluated relative to their country competitors, while
companies that compete locally are evaluated based on a more traditional country
analysis. Within both groups we seek stocks that are attractively priced and
that offer potential for growth.
Does your investment strategy differ from that of the previous manager?
Our strategy represents a complete departure from the way the Fund was
previously managed. The past six months have been spent restructuring the
portfolio to be more in line with our style and global economic outlook, and
included replacing about 95% of the Fund's holdings. Specifically, we increased
the weighting in the technology, capital equipment and materials sectors.
Geographically, we reduced the Fund's position in the United Kingdom and added
to holdings in Scandinavia, Southeast Asia and Latin America.
How will these changes benefit the Fund in the future?
While we made some dramatic changes during the past six months, we now believe
that the portfolio is well-positioned to take advantage of growing
opportunities in foreign markets.
How did the Fund perform during the six month period?
The Fund outperformed the Morgan Stanley Capital International Europe, Asia
and Far East (GDP) Index, which tracks the performance of international stocks.
The total return for the Fund was 6.60% while the Index posted a total return of
4.52%. This outperformance was achieved despite the costs of restructuring the
fund's portfolio.
What is your outlook for the remainder of 1996?
We believe that Europe will grow more quickly and Japan may grow more slowly
than most investors believe. We see good opportunities in the rapidly developing
economies of Southeast Asia and selected opportunities in Latin America. The
restructuring of the portfolio has positioned the Fund in the most attractive
stocks and sectors in accordance with our investment philosophy and approach.
7
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport International Fund For Growth
- -------------------------------------------------------------------------------
[BEGIN MOUNTAIN CHAET]
Colonial-Keyport International Fund for Growth and the Morgan Stanley Europe
Australia Far East Index
Performance of a Hypothetical $10,000 Investment
One-Year Average Annual Return at June 30, 1996
Since Inception 6 Month
2.75% 6.60%
CKIFFG MSCI EAFE
4/30/94 10000 10000
5/31/94 9900 9771
6/30/94 9700 9766
7/31/94 9950 9993
8/31/94 10250 10162
9/30/94 9950 9805
10/31/94 10000 10103
11/30/94 9550 9653
12/31/94 9400 9726
1/31/95 8850 9477
2/28/95 8700 9466
3/31/95 8850 9895
4/30/95 9100 10337
5/31/95 9100 10237
6/30/95 9050 10123
7/31/95 9550 10785
8/31/95 9550 10334
9/30/95 9700 10457
10/31/95 9550 10154
11/30/95 9700 10368
12/31/95 9950 10811
1/31/96 9899 10949
2/29/96 9899 10981
3/31/96 10102 11127
4/30/96 10657 11473
5/31/96 10556 11304
6/30/96 10607 11393
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
[END MOUNTAIN CHART]
8
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- -------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport Strategic Income Fund seeks as high a level of current
income and total return as is consistent with prudent risk, by diversifying
investments in U.S. and foreign government and lower rated corporate debt
securities.
Fund Performance (as of June 30, 1996)
Inception Date .................................. 7/05/94
Assuming reinvestment of all
distributions 6-month total return ........... 1.36%
Net asset per share on 12/31/95 ................. $10.99
Net asset per share on 6/30/96 .................. $11.14
Portfolio Manager's Discussion
Carl Ericson is portfolio manager of the Colonial-Keyport Strategic Income
Fund. Mr. Ericson is senior vice president of Colonial Management Associates,
Inc. and director of the Taxable Fixed Income Department.
What was the Fund's investment strategy during the first half of 1996?
The Fund continued to be well diversified among its three major market
components: high yield corporate bonds, international bonds and U.S. Treasury
bonds. This diversification paid off for shareholders, as stronger than expected
economic reports sent interest rates up close to 100 basis points over the
period. Investments in the high yield and international sectors posted higher
total returns with lower volatility than investments in the U.S. Treasury
sector, the smallest component of the Fund during the period. The high yield
sector benefited from expectations of a strengthening economy, as anticipation
of increased revenues, cash flows and price increases all translated into strong
performance. The international sector performed well as most overseas bond
markets exhibited positive characteristics when compared to domestic government
markets.
How did the Fund perform over the past six months?
The Fund outperformed the Lehman Government/ Corporate Bond Index, which
tracks the performance of general income funds. The total return for the Fund
was 1.36%, while the Lehman Index posted a total return down 1.88%. The Fund was
able to outperform the Index primarily because of its ability to invest in high
yield and international bonds, while the Index represents only domestic and
investment grade issues.
What is your outlook for the remainder of 1996?
Despite stronger than expected economic activity to date, we do not
believe that the economy can sustain its pace through the end of the year.
Consequently, we believe that we saw the worst of the U.S. Treasury bond
market during the first half of 1996. While we expect continued volatility
and fluctuating interest rates through the third quarter, we believe that
many issues of concern to the market will be resolved during the fourth
quarter and we are hopeful that interest rates will be lower by year-end.
9
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- -------------------------------------------------------------------------------
[BEGIN MOUNTAIN CHART]
Colonial-Keyport Strategic Income Fund and the Lehman Government/Corporate
Bond Index
Performance of a Hypothetical $10,000 Investment
One-Year Average Annual Return at June 30, 1996
Since Inception 6 Month
10.15% 1.36%
CKSIF Lehman
7/31/94 10000 10000
8/31/94 10050 10004
9/30/94 10010 9853
10/31/94 10050 9842
11/30/94 9940 9824
12/31/94 10029 9889
1/31/95 10163 10079
2/28/95 10408 10312
3/31/95 10593 10382
4/30/95 10788 10526
5/31/95 11085 10968
6/30/95 11136 11055
7/31/95 11238 11013
8/31/95 11238 11154
9/30/95 11433 11267
10/31/95 11587 11432
11/30/95 11699 11620
12/31/95 11865 11792
1/31/96 12038 11865
2/29/96 11940 11613
3/31/96 11886 11516
4/30/96 11940 11437
5/31/96 11951 11418
6/30/96 12027 11570
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
[END MOUNTAIN CHART]
10
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth
- -------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport U.S. Fund for Growth seeks growth over time exceeding the
Standard & Poor's 500 Index performance.
Fund Performance (as of June 30, 1996)
Inception Date ................................... 7/05/94
Assuming reinvestment of all
distributions 6-month total return ............ 9.30%
Net asset per share on 12/31/95 .................. $12.36
Net asset per share on 6/30/96 ................... $13.51
Portfolio Manager's Discussion
Jeffrey Adams is portfolio manager of Colonial-Keyport U.S. Fund for
Growth. Mr. Adams is vice president of State Street Global Advisors, a
division of State Street Bank and Trust Company, and sub-adviser to the Fund.
What was the Fund's investment strategy during the period?
In selecting stocks for the portfolio, we continued to focus on a stock's
fundamental value and growth potential. By investing in both value and growth
stocks we are able to take advantage of market cycles and control volatility.
We believe that many stocks which have performed well over the past six
months had price increases driven by the market rather than by their value.
While not owning some of these stocks may have held back some of the Fund's
performance, we believe that this strategy will benefit investors over the
course of the market cycle.
How did the Fund perform over the past six months?
The Fund modestly underperformed the Standard & Poor's 500 Index, a
broad-based, unmanaged index that tracks U.S. stocks. The total return for
the Fund was 9.30% while the Standard & Poor's 500 Index posted a total
return of 10.08%. The difference can be attributed to the Index benefiting
from a relatively small number of stocks enjoying strong market-driven,
rather than value-driven, price performance.
What investments had an impact on performance?
Technology stocks continued to be relatively volatile during the beginning
of the period. However, the Fund's neutral sector weightings, which are
designed to mirror those of the S&P 500, provided a degree of insulation. The
Fund benefited from holdings in the financial institution and service
provider sectors.
What is your outlook for the remainder of 1996?
Earnings growth for large capitalization stocks has slowed over the past
several months. We expect that economic growth will slow. While we expect to
continue to see positive total returns for large cap stocks, we do not expect
returns to be in the range we have seen over the last twelve months. We will
continue to monitor several issues that may have an effect on market
performance, such as the Federal Reserve Board's position on interest rates.
11
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth
- -------------------------------------------------------------------------------
[BEGIN MOUNTAIN CHART]
[Performance Chart with Plot points]
Colonial-Keyport U.S. Fund for Growth and the S&P 500 Index
Performance of a Hypothetical $10,000 Investment
One-Year Average Annual Return at June 30, 1996
Since Inception 6 Month
21.75% 9.30%
CKUSFFG S&P 500
7/31/94 10000 10000
8/31/94 10400 10409
9/30/94 10195 10155
10/31/94 10361 10383
11/30/94 9990 10005
12/31/94 10175 10153
1/31/95 10433 10416
2/28/95 10849 10822
3/31/95 11136 11140
4/30/95 11364 11468
5/31/95 11770 11926
6/30/95 12028 12202
7/31/95 12444 12607
8/31/95 12394 12638
9/30/95 12810 13171
10/31/95 12761 13124
11/30/95 13246 13700
12/31/95 13197 13964
1/31/96 13549 14439
2/29/96 13816 14573
3/31/96 13891 14713
4/30/96 14403 14930
5/31/96 14745 15314
6/30/96 14425 15373
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
[END MOUNTAIN CHART]
12
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- -------------------------------------------------------------------------------
Dear Contract Owner:
Newport-Keyport Tiger Fund seeks capital appreciation by investing
primarily in equity securities of companies in the nine "Tigers" of Asia
(Hong Kong, China, Singapore, Malaysia, Thailand, Indonesia, the Philippines,
South Korea and Taiwan). While these markets are subject to risk not
associated with more developed countries, Fund management has more than 25
years of investment experience in the region, and is a leader in Asian
investing.
Fund Performance (as of June 30, 1996)
Inception Date ................................... 5/01/95
Assuming reinvestment of all
distributions 6-month total return ............. 6.14%
Net asset per share on 12/31/95 .................. $2.28
Net asset per share on 6/30/96 ................... $2.42
Portfolio Manager's Discussion
Jack Mussey is president and chief executive officer of Newport Fund
Management, Inc. and portfolio co-manager of Colonial-Keyport Newport Tiger
Fund. Tim Tuttle is managing director of Newport Fund Management and
portfolio co-manager of Colonial-Keyport Newport Tiger Fund.
What was the Fund's investment strategy during the past six months?
The Fund's strategy remained unchanged: to employ a conservative large-cap
approach and to take advantage of the most attractive Tigers. During the
period, investments continued to be focused on six of the nine countries in
which the Fund can invest. Particular emphasis was placed on the high quality
markets and companies of Hong Kong, Singapore and Malaysia.
How are the "most attractive Tigers" selected?
The Hong Kong market (43.2% of Fund assets) currently looks well supported
by improving fundamentals in the property market as well as a relaxation of
monetary policy in China. Both these factors should benefit Hong Kong
companies doing business in China as well as increase trade flows through
Hong Kong. Recent worries regarding Taiwan-China conflicts, threats of trade
wars with China and concern over the renewal of the most favored nation
status for China appear to have been largely resolved. The Singapore market
(19.9% of Fund assets) is expected to benefit from government-implemented
measures to cool the hot property market. This, in turn, should lead to an
economic slowdown, particularly in the electronics industry. Slower growth
will increase the nation's excess liquidity, which could go into the
Singapore stock market. Singapore also continues to be an Asian "safe haven,"
with a strong currency and large current account surplus.
How did the Fund perform over the period?
The Fund outperformed the Morgan Stanley Capital International Europe, Far
East and Asia (GDP) Index, which tracks the performance of international
stocks. The total return for the Fund was 6.14% while the Index posted a
total return of 5.37%. This performance can be attributed to our emphasis on
the Hong Kong and Malaysian markets which rose 9.4% and 14.2% respectively,
over the period.
What is your outlook for the remainder of 1996?
The outlook for Tiger markets is bright. Corporate profits are expected to
accelerate in 1997. Stronger U.S., Japanese and Chinese growth will fuel
trade within the region and any reversal of the U.S. bull market in stocks
would be expected to refocus global institutional money back to the steady
growth area of the world--the Tiger countries of Asia.
13
<PAGE>
- -------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Newport Tiger Fund
- -------------------------------------------------------------------------------
[Performance Chart with Plot points]
Newport-Keyport Tiger Fund and the Morgan Stanley EAFE GDP
Performance of a Hypothetical $10,000 Investment
Average Annual Return at June 30, 1996
Since Inception 6 Month
18.58% 6.14%
NKTF MSCI
5/01/95 10000 10000
5/31/95 11100 9903
6/30/95 10900 9793
7/31/95 11200 10433
8/31/95 10850 9997
9/30/95 11050 10116
10/31/95 11000 9823
11/30/95 11050 10030
12/31/95 11500 10459
1/31/96 12661 10592
2/29/96 12560 10623
3/31/96 12560 10764
4/30/96 12509 11099
5/31/96 12459 10935
6/30/96 12207 11021
Performance numbers reflect all Fund net expenses, but do not include
insurance charges imposed by your insurance company's separate accounts or
certain expenses reimbursed by the Manager. If performance information
included the effect of these additional amounts, returns would be lower.
14
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- ------ --------------
COMMON STOCKS--(85.9%)
Construction--(2.0%)
Building Construction--(2.0%)
Hollandsche Beton Groep NV...... Ne 6,850 $ 1,310,525
Koninklijke Volker Stevin
NV ........................... Ne 3,000 232,916
Lennar Corp. .................. 5,300 132,500
-----------
1,675,941
-----------
Special Trade Contractors--(0.0%)
Ericsson Spa .................. It 3,000 35,214
-----------
Finance, Insurance & Real Estate--(20.6%)
Depository Institutions--(5.5%)
Astoria Financial Corp. ........ 71,800 1,947,575
Bank of Montreal ............... Ca 17,300 423,668
Den Danske Bank ............... No 3,000 200,749
Greenpoint Financial Corp. 32,500 918,125
Jyske Bank .................... No 3,000 188,490
National Australia Bank
Ltd. ......................... Au 38,800 358,862
Toronto Dominion Bank ......... Ca 34,100 598,816
-----------
4,636,285
-----------
Insurance Carriers--(10.3%)
Allstate Corp. ................. 4,100 187,063
American Bankers Insurance
Group, Inc. .................. 27,700 1,208,412
Bankers Life Holding Corp. 16,500 365,062
CIGNA Corp. .................... 18,500 2,180,687
CMAC Investment Corp. ......... 2,500 143,750
Foremost Corp. of America ...... 1,200 68,100
Loews Corp. .................... 1,000 78,875
Mercury General Corp. ......... 11,800 516,250
Old Republic International
Corp. ........................ 65,400 1,406,100
Reinsurance Group of
America ...................... 1,500 56,625
ReliaStar Financial Corp........ 20,000 862,500
Safeco Corp. .................. 9,400 332,525
Sunamerica, Inc. ............... 7,200 406,800
Vesta Insurance Group, Inc. 24,300 811,013
-----------
8,623,762
-----------
Security Brokers & Dealers--(4.8%)
A.G. Edwards, Inc. ............ 85,300 2,313,763
Alex Brown, Inc. ............... 18,000 1,017,000
John Nuveen & Co., Inc. ........ 9,000 223,875
Quick & Reilly Group, Inc. 13,800 448,500
-----------
4,003,138
-----------
Manufacturing--(41.0%)
Apparel--(0.2%)
Gamma Holding NV ............... Ne 3,000 138,661
-----------
<PAGE>
Country
Abbrev. Shares Value
-------- ------ ------------
Chemicals & Allied Products--(9.3%)
Akzo Nobel NV .................. Ne 14,074 $ 840,921
ARCO Chemical Co. .............. 11,400 592,800
Johnson & Johnson .............. 24,900 1,232,550
Norsk Hydro A.S. ............... No 7,100 347,013
Pharmacia & Upjohn, Inc......... 43,355 1,923,878
Rhone-Poulenc Rorer, Inc........ 24,700 1,657,988
Union Carbide Corp. ............ 18,000 715,500
Wellman, Inc. .................. 20,500 479,188
-----------
7,789,838
-----------
Electronic & Electrical Equipment--(1.1%)
Komag, Inc. (a) ............... 20,800 548,600
SCI Systems, Inc. (a) ......... 2,300 93,437
Varian Associates, Inc.......... 6,000 310,500
-----------
952,537
-----------
Fabricated Metal--(1.7%)
Ball Corp. ..................... 8,500 244,375
Harsco Corp. ................... 17,500 1,176,875
-----------
1,421,250
-----------
Food & Kindred Products--(2.9%)
Archer Daniels Midland Co. 37,115 709,824
IBP, Inc. ....................... 62,800 1,734,850
-----------
2,444,674
-----------
Furniture & Fixtures--(0.2%)
Johnson Controls, Inc. ..... 3,000 208,500
-----------
Machinery & Computer Equipment--(3.3%)
Sun Microsystems, Inc. (a)....... 41,400 2,437,425
Tecumseh Products Co.,
Class A ....................... 6,100 327,875
-----------
2,765,300
-----------
Measuring & Analyzing Instruments--(0.7%)
Becton, Dickinson & Co. .... 4,100 329,025
Hologic, Inc. (a) ............ 900 39,825
Raytheon Co. .................. 4,600 237,475
-----------
606,325
-----------
Miscellaneous Manufacturing--(1.4%)
Callaway Golf Co. ............ 36,200 1,203,650
------------
Paper Products--(0.2%)
Westvaco Corp. ................ 5,700 170,288
------------
Petroleum Refining--(3.4%)
Exxon Corp. .................... 4,400 382,250
Mobil Corp. .................... 8,100 908,213
Phillips Petroleum Co........... 27,800 1,164,125
Sun Co., Inc. .................. 11,700 355,387
------------
2,809,975
------------
See Notes to Investment Portfolio.
15
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
-------- ------ --------------
Primary Metal--(2.2%)
Alumax, Inc. (a) ................ 500 $ 15,125
Asarco, Inc. ................... 29,700 820,462
Carpenter Technology Corp........ 7,800 249,600
Texas Industries, Inc. .......... 11,100 761,738
------------
1,846,925
------------
Primary Smelting--(1.3%)
Phelps Dodge Corp. ............. 17,400 1,085,325
------------
Printing & Publishing--(0.9%)
Moore Corp. Ltd. ................ 8,200 154,775
New York Times Co.,
Class A ....................... 15,800 515,475
Standard Register Co. ........... 2,900 71,412
------------
741,662
------------
Rubber & Plastic--(1.8%)
Goodyear Tire & Rubber Co........ 31,300 1,510,225
------------
Stone, Clay, Glass & Concrete--(0.5%)
Global Industrial
Technologies, Inc. (a)......... 27,500 440,000
------------
Textile Mill Products--(1.8%)
Springs Industries, Inc.......... 29,000 1,464,500
------------
Tobacco Products--(2.7%)
American Brands, Inc. .......... 41,100 1,864,912
UST, Inc. ....................... 11,100 380,175
------------
2,245,087
------------
Transportation Equipment--(5.4%)
Equipements et Composants
pour l'Industrie
Automobile ................... Fr 2,050 281,661
Fleetwood Enterprises, Inc. 13,900 430,900
General Dynamics Corp. ......... 7,200 446,400
Harley-Davidson, Inc. ......... 10,400 427,700
McDonnell Douglas Corp. ........ 27,400 1,328,900
Strattec Security Corp. (a) 120 2,130
TRW, Inc. ...................... 3,200 287,600
Textron, Inc. .................. 8,000 639,000
Thiokol Corp. .................. 15,900 628,050
------------
4,472,341
------------
Mining & Energy--(0.3%)
Metal Mining
Cleveland-Cliffs, Inc. ......... 6,700 262,138
------------
Retail Trade--(4.1%)
Apparel & Accessory Stores--(0.4%)
Koninklijke Bijenkorf
Beheer ...................... Ne 3,000 253,101
Macintosh NV .................. Ne 3,000 74,421
------------
327,522
------------
<PAGE>
Country
Abbrev. Shares Value
------ -------- -------------
Food Stores--(1.2%)
Vendex International N.V...... Ne 22,700 $ 790,223
Weis Markets, Inc. .......... 7,700 251,213
------------
1,041,436
------------
General Merchandise Stores--(1.8%)
Bon-Ton Stores, Inc. (a)...... 6,500 33,312
Dillard Department Stores,
Inc., Class A .............. 22,700 828,550
Mercantile Stores Co., Inc.... 10,600 621,425
------------
1,483,287
------------
Miscellaneous Retail--(0.7%)
Revco D.S., Inc. (a) ......... 7,000 165,375
Walgreen Co. ................ 12,200 408,700
------------
574,075
------------
Services--(4.9%)
Amusement & Recreation--(0.1%)
Grand Casinos, Inc. (a) .... 4,950 127,463
------------
Business Services--(2.3%)
Cadence Design Systems,
Inc. (a) ................... 16,650 561,937
HBO & Co. .................... 7,200 487,800
Omnicom Group, Inc. .......... 19,400 902,100
------------
1,951,837
------------
Engineering, Accounting, Research
& Management--(0.7%)
Corrections Corp. of
America (a) ................ 2,300 161,000
International-Muller NV ...... Ne 18,400 404,774
------------
565,774
------------
Health Services--(1.8%)
Sun Healthcare
Group, Inc. (a) ........... 11,500 163,875
Universal Health Services,
Inc., Class B (a) ......... 50,500 1,319,312
------------
1,483,187
------------
Transportation, Communication, Electric,
Gas & Sanitary Services-- (12.1%)
Communications--(2.8%)
Ameritech Corp. ............. 19,700 1,169,687
BellSouth Corp. ............. 9,000 381,375
Frontier Corp. ............... 26,900 823,813
------------
2,374,875
------------
Electric, Gas & Sanitary Services--(0.7%)
Gas y Electricidad SA ....... Sp 4,550 251,940
Teco Energy, Inc. ............ 14,300 361,075
------------
613,015
------------
See Notes to Investment Portfolio.
16
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- ------ --------------
Electric Services--(2.7%)
Boston Edison Co. ............ 24,500 $ 624,750
Detroit Edison Co. .......... 3,100 95,713
NIPSCO Industries, Inc. ...... 2,500 100,625
Portland General Corp. ....... 25,400 784,225
Unicom Corp. ................ 23,900 666,213
------------
2,271,526
------------
Gas Services--(3.3%)
Brooklyn Union Gas Co. ....... 10,600 288,850
Consolidated Natural
Gas Co. .................... 15,900 830,775
National Fuel Gas Co. ....... 10,700 385,200
People's Energy Corp. ....... 19,300 646,550
Sonat, Inc. .................. 10,800 486,000
------------
2,637,375
------------
Railroad--(1.1%)
Conrail, Inc. ................ 13,800 915,975
------------
Sanitary Services--(0.5%)
Severn Trent Water PLC ....... UK 25,000 211,106
United Utilities PLC ......... UK 25,100 212,340
------------
423,446
------------
Water Transportation--(1.0%)
APL Ltd. ..................... 32,400 846,450
------------
Wholesale Trade--(0.9%)
Durable Goods--(0.7%)
Beers NV ..................... Ne 1,447 292,075
Marshall Industries (a) ...... 10,300 288,400
------------
580,475
------------
Nondurable Goods--(0.2%)
International Multifoods
Corp. ...................... 9,000 164,250
------------
Total Common Stocks
(Cost of $57,988,310) ........................... 71,935,509
------------
<PAGE>
Par Value
---------- ------------
U.S. GOVERMENT & AGENCY OBLIGATIONS--(6.1%)
U.S. Government Agencies--(3.7%)
Federal National Mortgage
Association, 6.500% maturities
ranging from 8/01/08--04/01/09 $3,223,899 $ 3,121,140
-----------
U.S. Government Bonds--(2.4%)
U.S. Treasury Notes, 7.875%
04/15/98.................... 1,895,000 1,950,959
-----------
Total U.S. Government & Agency Obligations
(Cost $5,223,463).......................... 5,072,099
-----------
Total Investments--(92.0%)
(Cost $63,211,773) (b)..................... 77,007,608
-----------
SHORT-TERM OBLIGATIONS--(9.8%)
Repurchase agreement with Chase
Securities, Inc., dated
06/28/96, due 07/01/96 at
5.40%, collateralized by U.S.
Treasury notes with various
maturities to 1998, market
value $8,411,711 (repurchase
proceeds $8,231,703)............ 8,228,000 8,228,000
-----------
Other Assets & Liabilities--Net (-1.8%) (1,532,864)
-----------
Net Assets--(100.0%)......................... $83,702,744
===========
Notes to investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is identical.
Gross unrealized appreciation and depreciation at June
30, 1996 is as follows:
Gross unrealized appreciation $14,920,531
Gross unrealized depreciation (1,124,696)
-----------
Net unrealized appreciation $13,795,835
===========
Summary of Securities by Country
% of Total
Country Securities
Country Abbrev. Value at Value
- ----------------------- ------ ------------ ----------
United States.......... $70,748,065 91.9%
Netherlands............ Ne 3,496,697 4.5
Canada................. Ca 1,022,484 1.3
United Kingdom......... UK 423,446 0.5
Norway................. No 389,239 0.5
Australia.............. Au 358,862 0.5
France................. Fr 281,661 0.4
Spain.................. Sp 251,940 0.3
Italy.................. It 35,214 0.1
----------- -----
$77,007,608 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
See Notes to Financial Statements.
17
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $63,211,773) ...................... $77,007,608
Short-term obligations ........................................................... 8,228,000
Cash (including foreign currencies) ............................................. 671
Receivable for investments sold .................................................. 4,896,491
Dividends and interest receivable ................................................ 201,714
Receivable for fund shares sold .................................................. 85,000
Unamortized organization expenses ................................................ 10,738
Other assets .................................................................... 3,411
----------
Total assets ................................................................... 90,433,633
----------
Liabilities:
Payable for investments purchased ................................................ 6,627,106
Payable for fund shares repurchased ............................................. 58,483
Management fee payable ........................................................... 44,526
Accrued expenses payable ......................................................... 774
----------
Total liabilities .............................................................. 6,730,889
----------
Net assets ....................................................................... $83,702,744
===========
Net assets represented by:
Paid-in capital ................................................................. $65,759,171
Accumulated undistributed net investment income ................................. 934,293
Accumulated net realized gains on investments and foreign currency
transactions ................................................................... 3,213,355
Net unrealized appreciation on investments and foreign currency transactions 13,795,925
-----------
Total net assets applicable to shares of beneficial interest outstanding ........ $83,702,744
===========
Shares of beneficial interest outstanding ....................................... 6,122,071
===========
Net asset value per share ........................................................ $13.67
======
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $25,556)....... $ 812,809
Interest ......................................................................... 413,339
----------
Total investment income ........................................................ 1,226,148
----------
Expenses:
Management fee ................................................................. 254,546
Bookkeeping fee ................................................................. 19,230
Transfer agent fee .............................................................. 3,750
Audit fee ....................................................................... 10,076
Printing expense ................................................................ 3,540
Trustees' fees ................................................................. 3,360
Custodian fee ................................................................... 4,766
Legal fee ....................................................................... 2,614
Amortization of organization expense ............................................ 2,676
Miscellaneous expense ........................................................... 5,548
----------
Total expenses ................................................................. 310,106
----------
Net investment income ........................................................... 916,042
Realized and unrealized gains on investments and foreign currency transactions:
Net realized gains on investments ............................................... 3,212,599
Net realized gains on foreign currency transactions ............................ 11,338
Change in unrealized appreciation on investments and foreign currency
transactions ................................................................... 2,159,736
----------
Net increase in net assets resulting from operations ............................ $6,299,715
==========
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended Year Ended
June 30, December 31,
1996 1995
------------- ------------
<S> <C> <C>
Operations:
Net investment income .................................................... $ 916,042 $ 1,484,201
Net realized gains on investments ........................................ 3,212,599 1,935,503
Net realized gains on foreign currency transactions ..................... 11,338 3,868
Unrealized appreciation on investments and foreign currency transactions.. 2,159,736 11,876,516
----------- -----------
Net increase in net assets resulting from operations ..................... 6,299,715 15,300,088
----------- -----------
Distributions declared from:
Net investment income .................................................... (72,015) (1,366,483)
Net realized gains ....................................................... -- (1,027,019)
----------- -----------
Total distributions ..................................................... (72,015) (2,393,502)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold ........................................... 11,062,759 14,488,981
Cost of fund shares repurchased ......................................... (4,729,686) (6,771,090)
Distributions reinvested ................................................. 72,015 2,393,502
----------- -----------
Net increase in net assets resulting from fund share transactions ......... 6,405,088 10,111,393
----------- -----------
Total increase in net assets .............................................. 12,632,788 23,017,979
Net assets:
Beginning of period ..................................................... 71,069,956 48,051,977
----------- -----------
End of period ............................................................. $83,702,744 $71,069,956
=========== ===========
Accumulated undistributed net investment income included in ending net
assets .................................................................. $ 934,293 $ 83,580
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................. 834,837 1,243,691
Shares redeemed .......................................................... (357,342) (587,044)
Distributions reinvested ................................................. 5,443 190,717
----------- ----------
Net increase ............................................................. 482,938 847,364
=========== ==========
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six
Months
Ended
June 30 Year Ended December 31,
----------- -------------------------------
1996 1995 1994 1993***
------- ------- ------- -------
<S> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period .................... $12.60 $10.03 $10.36 $10.00
------- ------- ------- -------
Net investment income ................................... 0.15 0.29 0.26 0.09
Net realized and unrealized gains (losses) on
investments and foreign currency transactions.......... 0.93 2.72 (0.34) 0.41
------- ------- ------- -------
Total from investment operations ....................... 1.08 3.01 (0.08) 0.50
------- ------- ------- -------
Less distributions from:
Dividends from net investment income ................... (0.01) (0.25) (0.25) (0.11)
Net realized gains on investments ...................... -- (0.19) -- (0.03)
------- ------- ------- -------
Total distributions ..................................... (0.01) (0.44) (0.25) (0.14)
======= ======= ======= =======
Net asset value, end of period .......................... $13.67 $12.60 $10.03 $10.36
======= ======= ======= =======
Total return:
Total investment return (b) ............................ 8.59%** 30.03% (0.76)% 5.01%**(d)
Ratios/supplemental data:
Net assets, end of period (000) ......................... $83,703 $71,070 $48,052 $29,298
Ratio of net expenses to average net assets ............ 0.79%*(e) 0.81%(e) 0.87% 1.00%*(c)
Ratio of net investment income to average net assets..... 2.33%*(e) 2.51%(e) 2.82% 2.32%*(d)
Portfolio turnover ratio ................................ 17%** 79% 55% 8%**
Average commission rate (f) ............................. $0.052 -- -- --
</TABLE>
* Annualized
** Not Annualized.
*** For the period from the commencement of operations July 1, 1993 to
December 31, 1993.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.23%
(annualized) for the period ended December 31, 1993.
(d) Computed giving effect to Manager's expense limitation undertaking.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net benefits received,
if any.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
See Notes to Financial Statements.
20
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1996
- -------------------------------------------------------------------------------
Shares Value
------- -----------
COMMON STOCKS--(84.6%)
Transportation, Communication, Electric,
Gas & Sanitary Services--(84.6%)
Communications--(26.5%)
360 Communications Co. .............. 1,500 $ 36,000
Ameritech Corp. ...................... 31,100 1,846,562
Bell Atlantic Corp. ................. 19,500 1,243,125
BellSouth Corp. ..................... 42,000 1,779,750
Citizens Utilities Co. 5%
Convertible ........................ 5,000 241,250
Frontier Corp. ...................... 19,000 581,875
GTE Corp. ............................ 39,000 1,745,250
MCI Communications Corp. ............. 13,500 345,937
NYNEX Corp. ......................... 39,000 1,852,500
Pacific Telesis Group, Inc. .......... 16,000 540,000
Southwestern Bell Corp. .............. 29,000 1,428,250
Sprint Corp. ......................... 4,500 189,000
US West Media Group ................. 19,000 346,750
US West, Inc. ........................ 28,000 892,500
-----------
13,068,749
-----------
Electric Services--(46.5%)
American Electric Power Co., Inc...... 16,000 682,000
Boston Edison Co. ................... 14,000 357,000
CMS Energy Corp. ..................... 25,000 771,875
Carolina Power & Light Co. ........... 17,000 646,000
Cincinnati Gas & Electric Co. ........ 40,000 1,280,000
CMS Energy Corp., Class G ........... 25,000 468,750
DPL, Inc. ............................ 58,000 1,413,750
Detroit Edison Co. ................... 33,500 1,034,313
Duke Power Co. ...................... 6,500 333,125
Eastern Utilities Assoc. ............. 11,300 221,762
Edison International ................. 35,000 616,875
Entergy Corp. ........................ 8,200 232,675
FPL Group, Inc. ...................... 34,500 1,587,000
Florida Progress Corp. .............. 10,000 347,500
General Public Utilities Corp. ....... 37,000 1,304,250
Hawaiian Electric Industries, Inc..... 5,000 177,500
Houston Industries, Inc. ............. 29,100 716,588
IES Industries, Inc. ................. 16,100 480,988
KU Energy Corp. ...................... 8,000 239,000
Kansas City Power & Light Co. ........ 22,500 618,750
New York State Electric & Gas
Corp. .............................. 8,000 195,000
North Carolina Natural Gas Corp....... 6,000 165,000
Northeast Utilities ................. 7,000 93,625
Ohio Edison Co. ...................... 11,700 255,938
PacifiCorp ........................... 61,500 1,368,375
Peco Energy Co. ...................... 12,600 327,600
Pinnacle West Capital Corp. .......... 15,000 455,625
Portland General Corp. .............. 26,000 802,750
Public Service Co. of Colorado ....... 23,500 863,625
<PAGE>
Shares Value
------- -----------
Public Service Enterprise Group,
Inc. .............................. 7,500 $ 205,312
Puget Sound Power & Light Co. ........ 2,700 65,475
Rochester Gas & Electric Corp. ....... 2,300 49,450
Scana Corp. ......................... 12,000 337,500
Sierra Pacific Resources ............. 7,500 190,312
Southern Co. ......................... 55,000 1,354,375
Texas Utilities Co. ................. 29,000 1,239,750
Union Electric Co. ................... 3,800 152,950
Utilicorp United, Inc. .............. 20,800 574,600
Western Resources, Inc. .............. 24,000 717,000
-----------
22,943,963
-----------
Gas Services--(11.6%)
Consolidated Natural Gas Co........... 10,000 522,500
Energen Corp. ........................ 4,700 103,987
KN Energy, Inc. ...................... 9,500 318,250
MCN Corp. ............................ 37,500 914,063
MDU Resources Group, Inc. ........... 9,000 193,500
Pacific Enterprises ................. 15,500 459,188
Panhandle Eastern Corp. .............. 18,700 614,763
People's Energy Corp. ................ 7,600 254,600
Public Service Co. of North
Carolina ........................... 30,000 510,000
UGI Corp. ............................ 24,000 528,000
Williams Companies, Inc. ............. 26,900 1,331,550
-----------
5,750,401
-----------
Total Common Stocks
(Cost of $35,975,485) ..................... 41,763,113
-----------
PREFERRED STOCKS--(11.0%)
Transportation, Communication, Electric,
Gas & Sanitary Services--(11.0%)
Electric Services--(9.4%)
Appalachian Power Co., 7.40% ........ 1,000 101,000
Arizona Public Service Co.,
Series W, .......................... 12,000 292,500
Baltimore Gas & Electric Co., ........ 1,503 151,803
Central Power & Light Co., 7.12%...... 6,000 586,500
Commonwealth Edison Co., 7.24% ....... 5,500 496,375
Montana Power Company, $6.875 ........ 5,000 482,500
Northern Indiana Public Service
Company, 7.44% ..................... 1,000 99,000
PSI Energy, Inc., 6.875% ............. 4,000 388,500
PSI Energy, Inc., 7.44% .............. 13,000 333,125
Peco Energy Company, 7.48% ........... 2,000 203,000
Pennsylvania Power & Light Co.,
6.75% .............................. 5,000 470,000
Southern California Edison Co.,
7.36% .............................. 1,000 276,375
TU Electric Capital., 8.25% .......... 28,000 661,500
See Notes to Investment Portfolio.
21
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1996
- -------------------------------------------------------------------------------
Shares Value
------- -----------
Union Electric Co., $7.44 ........... 1,000 $ 100,500
-----------
4,642,678
-----------
Gas Services--(1.6%)
Enron Corp., 8.00% ................... 20,000 482,500
MCN Corp., 8.75% ..................... 1,600 40,800
Pacific Enterprises, $4.50 ........... 550 33,275
Williams Cos., Inc., 3.50% ........... 3,000 234,750
------------
791,325
------------
Total Preferred Stocks
(Cost of $5,810,402) ............... 5,434,003
------------
Total Investments--(95.6%)
(Cost of $41,785,887) (a) .......... 47,197,116
------------
<PAGE>
Par Value
--------- -----------
SHORT-TERM OBLIGATIONS--(4.1%)
Repurchase agreement with Chase
Securities, Inc., dated
06/28/96 due 07/01/96 at
5.40%, collateralized by U.S.
Treasury notes with various
maturities to 1998, market
value $2,079,414 (repurchase
proceeds $2,034,915) ........... $2,034,000 $ 2,034,000
-----------
Other Assets & Liabilities, Net--(0.3%) ....... 128,855
-----------
Net Assets--(100.0%) .......................... $49,359,971
===========
Note to investment portfolio:
(a) Cost for federal income tax purposes is $41,788,886. Gross unrealized
appreciation and depreciation at June 30, 1996 is as follows:
Gross unrealized appreciation $6,401,131
Gross unrealized depreciation (992,901)
----------
Net unrealized appreciation $5,408,230
==========
See Notes to Financial Statements.
22
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1996 (Unaudited)
- -------------------------------------------------------------------------------
Assets:
Investments, at market value (Identified cost $41,785,887) ....... $47,197,116
Short-term obligations .......................................... 2,034,000
Dividends and interest receivable ................................ 166,686
Receivable for investments sold ................................. 45,064
Receivable for fund shares sold ................................. 4,798
Unamortized organization expenses ................................ 11,023
Other assets ..................................................... 3,166
----------
Total assets .................................................. 49,461,853
----------
Liabilities:
Payable for fund shares repurchased .............................. 64,674
Management fee payable .......................................... 25,743
Accrued expenses payable ......................................... 11,465
----------
Total liabilities ............................................. 101,882
----------
Net assets ....................................................... $49,359,971
===========
Net assets represented by:
Paid-in capital ................................................ $47,414,886
Accumulated undistributed net investment income ................ 1,033,510
Accumulated net realized losses on investments .................. (4,499,654)
Net unrealized appreciation on investments ...................... 5,411,229
-----------
Total net assets applicable to shares of beneficial interest
outstanding .................................................... $49,359,971
===========
Shares of beneficial interest outstanding ........................ 4,621,883
===========
Net asset value per share ....................................... $10.68
======
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
Investment income:
Dividends ....................................................... $1,228,675
Interest ......................................................... 35,189
----------
Total investment income ........................................ 1,263,864
----------
Expenses:
Management fee ................................................. 161,177
Bookkeeping fee ................................................. 13,500
Transfer agent fee .............................................. 3,750
Audit fee ....................................................... 7,011
Printing expense ............................................... 1,047
Trustees' fees ................................................. 3,658
Custodian fee ................................................... 749
Legal fee ....................................................... 3,016
Amortization of organization expense ........................... 2,748
Miscellaneous expense ........................................... 4,284
---------
Total expenses ................................................. 200,940
---------
Net investment income ............................................ 1,062,924
Realized and unrealized gains (losses) on investments:
Net realized gains on investments ............................... 164,149
Change in unrealized depreciation on investments................. (446,390)
----------
Net increase in net assets resulting from operations.............. $ 780,683
==========
See Notes to Financial Statements.
23
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Year
Ended Ended
June 30, December 31,
1996 1995
---------- ------------
<S> <C> <C>
Operations:
Net investment income .................................................... $ 1,062,924 $ 2,180,202
Net realized gains (losses) on investments .............................. 164,149 (1,331,430)
Unrealized appreciation (depreciation) on investments .................... (446,390) 12,515,955
----------- -----------
Net increase in net assets resulting from operations ..................... 780,683 13,364,727
----------- -----------
Distributions declared from:
Net investment income .................................................... -- (2,164,475)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold ........................................... 2,736,939 8,726,703
Cost of fund shares repurchased ......................................... (5,754,411) (8,650,479)
Distributions reinvested ................................................. -- 2,164,475
----------- ----------
Net increase (decrease) in net assets resulting from fund share
transactions ............................................................ (3,017,472) 2,240,699
----------- -----------
Total increase (decrease) in net assets ................................... (2,236,789) 13,440,951
Net assets:
Beginning of period ..................................................... 51,596,760 38,155,809
----------- -----------
End of period ............................................................ $49,359,971 $51,596,760
=========== ===========
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ................................................... $ 1,033,510 $ (29,414)
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................. 260,697 942,276
Shares redeemed .......................................................... (553,589) (940,625)
Distributions reinvested ................................................. -- 206,533
----------- -----------
Net increase (decrease) .................................................. (292,892) 208,184
=========== ===========
</TABLE>
See Notes to Financial Statements.
24
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six
Months
Ended
June 30, Year Ended December 31,
---------- -----------------------------------
1996 1995 1994 1993***
------- ------- ------- -------
<S> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period .................. $ 10.50 $ 8.11 $ 9.65 $ 10.00
------- ------- ------- -------
Net investment income ................................. 0.223 0.46 0.54 0.18
Net realized and unrealized gains (losses) on
investments ........................................ (0.043) 2.39 (1.53) (0.35)
------- ------- ------- -------
Total from investment operations ..................... 0.180 2.85 (0.99) (0.17)
------- ------- ------- -------
Less distributions from:
Dividends from net investment income ................. -- (0.46) (0.55) (0.18)
------- ------- ------- -------
Net asset value, end of period ........................ $ 10.68 $ 10.50 $ 8.11 $ 9.65
======= ======= ======= =======
Total return:
Total investment return (b) .......................... 1.71%** 35.15% (10.27)% (1.70)%**(c)
Ratios/supplemental data:
Net assets, end of period (000) ....................... $49,360 $51,597 $38,156 $54,441
Ratio of net expenses to average net assets .......... 0.81%*(d) 0.83%(d) 0.86% 1.00%*(e)
Ratio of net investment income to average net assets... 4.28%*(d) 4.98%(d) 5.80% 5.10%*(c)
Portfolio turnover ratio .............................. 10%** 18% 16% 2%**
Average commission rate (f) ........................... $ 0.050 -- -- --
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 1, 1993 to
December 31, 1993.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(e) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, this ratio would have been 1.09%
(annualized) for the period ended December 31, 1993.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
See Notes to Financial Statements.
25
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth / June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- -------- -----------
COMMON STOCKS--(97.5%)
Agriculture, Forestry & Fishing--(0.5%)
Agriculture--Crops
Pt Chareon Pokphand
Indonesia .................... In 65,000 $ 125,725
-----------
Construction--(3.0%)
Building Construction
Compagnie Generale des Eaux Fr 2,310 257,762
IHC Caland N.V. ................ Ne 6,300 309,619
Kaneshita Construction ........ Ja 12,000 153,124
Sino Thai Engineering &
Construction Public Co.,
Ltd. ........................ Th 12,100 55,266
-----------
775,771
-----------
Finance, Insurance & Real Estate--(20.2%)
Depository Institutions--(4.7%)
Banco Latinoamericano de
Exportaciones SA ............. Po 7,600 427,500
Generale de Banque SA ........... Be 1,200 416,142
International Bank of Asia....... HK 190,000 122,723
Korea Exchange Bank ............ Ko 18,900 249,180
-----------
1,215,545
-----------
Holding & Other Investment Companies--(7.0%)
Fleming Russia Securities
Fund (a)(b) .................. Ru 32,000 356,160
Fortis AMEV NV ................. Ne 13,750 393,386
Japan OTC Equity Fund, Inc.
(b) .......................... Ja 170 208,250
ROC Taiwan Fund ................ Tw 37,500 426,563
World Equity Benchmark Share ... Ja 27,000 428,760
-----------
1,813,119
-----------
Insurance Carriers--(2.8%)
Mitsui Marine & Fire
Insurance Co. ............... Ja 59,000 468,386
Reinsurance Australia Corp...... Au 89,000 259,208
-----------
727,594
-----------
Nondepository Credit Institutions--(1.7%)
Promise Co., Ltd. ............... Ja 9,000 442,966
-----------
Real Estate--(2.9%)
HKR International Ltd. (b)...... HK 210,000 244,155
Kawasan Industri Jababeka ..... In 159,000 232,366
New World Development Co.,
Ltd. ........................ HK 47,000 217,969
Tian An China Investments....... HK 370,000 50,187
-----------
744,677
-----------
<PAGE>
Security Brokers & Dealers--(1.1%)
Kokusai Securities Co., Ltd..... Ja 20,000 $ 295,310
-----------
Manufacturing--(39.8%)
Apparel--(1.3%)
Tokyo Style ................... Ja 19,000 330,766
-----------
Chemicals & Allied Products--(8.5%)
Henkel KGAA ................... G 11,000 379,823
Indian Petrochemicals Corp.,
Ltd. GDR ..................... In 7,500 125,625
Indupa SA (b) ................. Ar 300,000 143,454
Kemira Oy ...................... Fi 40,300 421,008
Norsk Hydro A/S ................ No 8,200 400,735
PT Evershine Textile
Industry ..................... In 181,100 81,734
Reliance Industries Ltd.
GDR (a) ..................... In 6,000 79,500
SmithKline Beecham PLC ........ UK 24,150 257,913
Yizheng Chemical Fibre Co.,
Ltd. ........................ HK 1,326,000 292,916
-----------
2,182,708
-----------
Electronic & Electrical Equipment--(6.2%)
Alcatel Alsthom ................ Fr 3,455 301,047
Champion Technology Holdings HK 12,400 1,458
Matsushaita Electric
Industrial Co. ................ Ja 26,000 483,434
Moulinex (b) .................... Fr 13,000 248,244
Murata Manufacturing Co.,
Ltd. ......................... Ja 10,000 379,164
Samsung Electronics GDS ......... Ko 8,296 192,969
-----------
1,606,316
-----------
Food & Kindred Products--(0.7%)
Perdigao SA Comercio e
Industria .................... Br 70,000,000 124,803
Vitasoy International
Holdings Ltd. ............... HK 133,000 48,537
-----------
173,340
-----------
Lumber & Wood Products--(1.8%)
Metsa-Serla, Series B .......... Fi 66,000 469,139
-----------
Machinery & Computer Equipment--(7.1%)
Agiv AG ........................ G 13,000 247,294
Canon, Inc. .................... Ja 22,000 457,171
Hitachi Ltd. ................... Ja 42,000 390,466
Mannesmann AG ................. G 1,070 367,780
Mori Seiki ..................... Ja 19,000 381,000
-----------
1,843,711
-----------
See Notes to Investment Portfolio.
26
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth / June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- -------- -----------
Paper Products--(2.6%)
Enso-Gutzeit Oy (b) ........... Fi 60,000 $ 458,800
Portucel Industrial Empresa,
SA (b) ....................... Po 32,800 209,811
-----------
668,611
-----------
Petroleum Refining--(1.8%)
NESTE OY ...................... Fi 6,000 127,947
YPF Sociedad Anonima ADR ....... Ar 15,000 337,500
-----------
465,447
-----------
Primary Metal--(4.2%)
Acerinox SA ................... Sp 2,100 219,294
Avesta-Sheffield (b) ........... Sw 42,400 399,096
Svenskt Stal AB (SSAB),
Series B ..................... Sw 30,000 388,554
TransTec PLC ................... UK 31,000 61,834
-----------
1,068,778
-----------
Rubber & Plastic--(0.4%)
World Houseware Holdings
Ltd. ........................ HK 990,000 90,802
-----------
Stone, Clay, Glass & Concrete--(3.1%)
Companion Building Material,
Ltd. ........................ HK 794,000 156,933
Freidrich Grohe AG ............. G 1,200 347,130
Kim Hin Industry Bhd ........... Ma 57,000 113,315
N.V. Koninklijke Sphinx
Gustavsberg .................. Ne 11,400 188,755
-----------
806,133
-----------
Textile Mill Products--(0.7%)
Companhia de Tecidos Norte
de Minas ..................... Br 440,000 173,108
-----------
Transportation Equipment--(1.4%)
Suzuki Motor Co., Ltd. ........ Ja 28,000 367,497
-----------
Mining & Energy--(4.4%)
Coal Mining--(1.0%)
Samchully Co. ................. Ko 3,283 251,381
-----------
Crude Petroleum & Natural Gas--(2.5%)
Compagnie Francaise de
Petroleum Total B ............ Fr 4,000 296,371
Saga Petroleum A/S ............. No 23,100 339,025
-----------
635,396
-----------
Oil & Gas Extraction--(0.9%)
LASMO PLC ...................... UK 81,000 220,031
-----------
Retail Trade--(7.9%)
Auto Dealers & Gas Stations--(1.9%)
Inchcape PLC .................. UK 107,472 488,793
-----------
<PAGE>
Food Stores--(2.6%)
Jardine Matheson Holdings
Ltd. (b) ..................... Ja 14,000 $ 458,096
Jusco Co., Ltd. ................ Ja 29,000 213,150
-----------
671,246
-----------
General Merchandise Stores--(3.4%)
Globex Utilidades SA (b) ....... Br 13,000 214,293
Ito-Yokado Co., Ltd. ........... Ja 7,000 421,729
PT Matahari Putra Prima ........ In 139,000 253,922
-----------
889,944
-----------
Services--(4.2%)
Business Services--(2.9%)
Ecco Travail Temporaire SA...... Fr 4,200 334,174
Ing C. Olivetti & SPA (b)....... It 672,000 361,128
Intrum Justitia ................ UK 32,186 53,903
-----------
749,205
-----------
Health Services--(1.1%)
Sandoz AG ...................... Sz 260 296,687
-----------
Hotels, Camps & Lodging--(0.2%)
Grupo Situr SA de CV, Series
B (b) ........................ Mx 341,000 48,104
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--(11.7%)
Air Transportation--(0.8%)
Helikopter Service A/S ........ No 18,000 207,467
-----------
Communications--(8.7%)
DDI Corp. ...................... Ja 40 348,539
Portugal Telecom ADR ........... Po 17,000 446,250
Royal Koninklijke PTT
Nederland NV ................. Ne 11,400 430,868
Tele-Communications
International, Inc. (b) ...... 13,800 243,225
Telecom Argentina SA ADR ....... Ar 5,600 262,500
Telecom Italia ................. It 72,000 123,515
Telecom Italia SPA ............. It 185,000 397,550
-----------
2,252,447
-----------
Gas Services--(1.4%)
British Gas Corp. ............... UK 130,000 363,227
-----------
Water Transportation--(0.8%)
Transpotacion Maritima
Mexicana ADR ................. Mx 28,400 209,450
-----------
Wholesale Trade--(5.8%)
Durable Goods--(4.5%)
Brierley Investments Ltd. ....... NZ 493,000 465,795
Celsis International PLC ........ UK 13,900 25,676
Powerscreen International
PLC ........................... UK 34,000 241,716
Yamazen Corp. .................. Ja 73,000 432,484
-----------
1,165,671
-----------
See Notes to Investment Portfolio.
27
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth / June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- -------- -----------
Nondurable Goods--(1.3%)
Lion Nathan Ltd. ............... NZ 133,000 $ 346,931
-----------
Total Investments--(97.5%)
(Cost of $23,982,538) (c) ..... 25,183,043
-----------
Par
-------
SHORT-TERM OBLIGATIONS--(2.3%)
Repurchase agreement with Chase
Securities, Inc., dated
06/28/96, due 7/01/96 at
5.40%, collateralized by U.S.
Treasury notes with various
maturities to 1998, market
value $602,151 (repurchase
proceeds $589,265) $589,000 589,000
-----------
Other Assets & Liabilities, Net--(0.2%)
63,051
-----------
Net Assets--(100%) $25,835,094
===========
<PAGE>
Notes to investment portfolio:
(a) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
1996, the value of these securities amounted to $435,660 or 1.7% of net
assets.
(b) Non-income producing.
(c) The cost for federal income tax purposes is $24,167,244. Gross unrealized
appreciation and depreciation at June 30, 1996 is as follows:
Gross unrealized appreciation $ 2,060,906
Gross unrealized depreciation (1,045,107)
-----------
Net unrealized appreciation $ 1,015,799
===========
Summary of Securities by Country
% of Total
Country Securities
Country Abbrev. Value at Value
- -------------- ------- ----------- ----------
Japan Ja $ 6,660,292 26.4%
United Kingdom UK 1,713,093 6.8
Finland Fi 1,476,893 5.9
France Fr 1,437,598 5.7
Germany G 1,342,027 5.3
Netherlands Ne 1,322,628 5.3
Hong Kong HK 1,225,680 4.9
Portugal Po 1,083,561 4.3
Norway No 947,227 3.8
Indonesia In 898,872 3.6
Italy It 882,193 3.5
New Zealand NZ 812,726 3.2
Sweden Sw 787,650 3.1
Argentina Ar 743,454 3.0
Korea Ko 693,530 2.8
Brazil Br 512,204 2.0
Belgium Be 416,143 1.7
Taiwan Tw 426,563 1.6
Russia Ru 356,160 1.4
Switzerland Sz 296,687 1.2
Australia Au 259,208 1.0
Mexico Mx 257,554 1.0
United States $ 243,225 1.0
Spain Sp 219,294 0.9
Malaysia Ma 113,315 0.4
Thailand Th 55,266 0.2
----------- -----
$25,183,043 100.0%
=========== =====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
- ------- ------------------------------
ADR ........ American Depository Receipt
GDR ........ Global Depository Receipt
GDS ........ Global Depository Share
See Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth / June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $23,982,538) ...................... $25,183,043
Short-term obligations ........................................................... 589,000
Cash (including foreign currencies) ............................................. 55,004
Receivable for investments sold .................................................. 172,924
Receivable for fund shares sold .................................................. 13,425
Dividends and interest receivable ................................................ 94,986
Unamortized organization expenses ................................................ 12,246
Other assets .................................................................... 1,776
-----------
Total assets ................................................................... 26,122,404
-----------
Liabilities:
Payable for investments purchased ................................................ 230,170
Payable for fund shares repurchased ............................................. 13,798
Management fee payable ........................................................... 18,878
Accrued expenses payable ......................................................... 23,654
Other liabilities ................................................................ 810
-----------
Total liabilities .............................................................. 287,310
-----------
Net assets ....................................................................... $25,835,094
===========
Net assets represented by:
Paid-in capital ................................................................. $24,110,382
Accumulated overdistributed net investment income ............................... (776,194)
Accumulated net realized gains on investments and foreign currency
transactions ................................................................... 1,302,386
Net unrealized appreciation on investments and foreign currency transactions .... 1,198,520
-----------
Total net assets applicable to outstanding shares of beneficial interest ........ $25,835,094
===========
Shares of beneficial interest outstanding ....................................... 12,271,240
===========
Net asset value per share ........................................................ $2.11
===========
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $48,603) ...... $ 343,451
Interest ......................................................................... 34,338
----------
Total investment income ........................................................ 377,789
----------
Expenses:
Management fee .................................................................. 107,742
Bookkeeping fee ................................................................. 13,500
Transfer agent fee .............................................................. 3,750
Audit fee ....................................................................... 9,597
Printing expense ............................................................... 6,251
Trustees' fees .................................................................. 4,154
Custodian fee .................................................................. 28,267
Legal fee ....................................................................... 863
Amortization of organization expense ........................................... 2,153
Miscellaneous expense ........................................................... 370
----------
Total expenses ................................................................. 176,647
----------
Net investment income ............................................................ 201,142
Realized and unrealized gains (losses) on investments and foreign currency
transactions:
Net realized gains on investments .............................................. 1,451,214
Net realized losses on foreign currency transactions ............................ (115,711)
Change in unrealized appreciation on investments and foreign currency transactions 77,969
----------
Net increase in net assets resulting from operations ............................. $1,614,614
==========
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Year
Ended Ended
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
Operations:
Net investment income ................................................. $ 201,142 $ 153,289
Net realized gains (losses) on investments ............................ 1,451,214 (747,347)
Net realized losses on foreign currency transactions .................. (115,711) (158,469)
Change in unrealized appreciation on investments and foreign currency
transactions ........................................................ 77,969 2,044,305
----------- -----------
Net increase in net assets resulting from operations .................. 1,614,614 1,291,778
----------- -----------
Distributions declared from:
Net investment income ................................................. -- (228,274)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold ........................................ 3,223,554 7,406,320
Cost of fund shares repurchased ....................................... (1,767,151) (5,079,991)
Distributions reinvested .............................................. -- 228,274
----------- -----------
Net increase in net assets resulting from fund share transactions ...... 1,456,403 2,554,603
----------- -----------
Total increase in net assets ........................................... 3,071,017 3,618,107
Net assets:
Beginning of period ................................................... 22,764,077 19,145,970
----------- -----------
End of period ......................................................... $25,835,094 $22,764,077
=========== ===========
Accumulated overdistributed net investment income included in ending net
assets ............................................................... $ (776,194) $ (53,329)
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold ........................................................... 1,594,362 4,012,557
Shares redeemed ....................................................... (877,971) (2,743,550)
Distributions reinvested .............................................. -- 115,875
----------- -----------
Net increase ........................................................... 716,391 1,384,882
=========== ===========
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Year
Months Ended Period
Ended December Ended
June 30, 31, December 31,
----------- -------- ------------
1996 1995 1994***
------- ------- -------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period .................................... $ 1.97 $ 1.88 $ 2.00
------- ------- -------
Net investment income .................................................. 0.02 0.01 --
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ........................................ 0.12 0.10 (0.12)
------- ------- -------
Total from investment operations ....................................... 0.14 0.11 (0.12)
------- ------- -------
Less distributions from:
Dividends from net investment income ................................... -- (0.02) --
------- ------- -------
Net asset value, end of period ......................................... $ 2.11 $ 1.97 $ 1.88
======= ======= =======
Total return:
Total investment return (b) ............................................ 6.60%** 5.85% (6.00)%**
Ratios/supplemental data:
Net assets, end of period (000) ......................................... $25,835 $22,764 $19,146
Ratio of net expenses to average net assets ............................. 1.47%*(c) 1.40%(c) 1.74%*
Ratio of net investment income to average net assets ................... 1.67%*(c) 0.75%(c) 0.13%*
Portfolio turnover ratio ............................................... 104%** 40% 31%**
Average commission rate (d) ............................................ $ 0.001 -- --
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations May 2, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(d) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
See Notes to Financial Statements.
31
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund /
June 30, 1996
- --------------------------------------------------------------------------------
Par Value
-------- ---------
BONDS & NOTES--(94.8%)
CORPORATE FIXED-INCOME BONDS
& NOTES--(42.3%)
Construction--(0.5%)
Building Construction--(0.5%)
USG Corp., 9.250% 09/15/01 ................ $250,000 $ 257,500
---------
Manufacturing--(10.6%)
Chemicals--(1.9%)
Agricultural Minerals Co., L.P.,
10.750% 09/30/03 ......................... 200,000 210,000
N.L. Industries, Inc., 11.750%
10/15/03 ................................ 250,000 255,625
Revlon Worldwide Corp., (a)
03/15/98 ................................ 500,000 415,000
---------
880,625
---------
Fabricated Metal--(1.7%)
Rexnord Holdings, Inc., 10.750%
07/01/02 ................................ 750,000 816,892
---------
Food & Kindred Products--(1.6%)
Foodbrands America, Inc., 10.750%
05/15/06 ................................ 250,000 250,937
Van De Kamps, Inc., 12.000%
09/15/05 ................................ 500,000 531,250
---------
782,187
---------
Lumber & Wood Products--(0.5%)
Triangle Pacific Corp., 10.500%
08/01/03 ................................ 250,000 258,750
---------
Miscellaneous Manufacturing--(1.0%)
American Standard Co., stepped
coupon, (10.500% 06/01/98) (b)
06/01/05 ................................ 350,000 304,500
Coleman Holdings Co., Series B, (a)
05/27/98 ................................ 200,000 166,500
---------
471,000
---------
Paper Products--(0.5%)
Repap Wisconsin, Inc., 9.875%
05/01/06 ................................ 250,000 222,500
---------
Primary Metal--(0.6%)
A.K. Steel Corp., 10.750% 04/01/04 250,000 270,000
---------
Stone, Clay, Glass & Concrete--(1.1%)
Owens-Illinois, Inc., 10.500%
06/15/02 ................................ 500,000 513,750
---------
Transportation Equipment--(1.7%)
Aftermarket Technology Corp.,
Series B, 12.000% 08/01/04 ............... 500,000 540,000
Collins & Aikman Products, 11.500%
04/15/06 ................................ 250,000 254,062
---------
794,062
---------
<PAGE>
Mining & Energy--(3.9%)
Crude Petroleum & Natural Gas--(1.1%)
Ferrellgas Finance Corp., L.P.,
10.000% 08/01/01 ......................... $250,000 $ 256,875
Triton Energy Corp., (a) 11/01/97 .......... 300,000 270,000
----------
526,875
----------
Oil & Gas Extraction--(2.8%)
Coastal Corp., 9.750% 08/01/03 ............. 500,000 566,810
Gulf Canada Resources Ltd., (c)
9.250% 01/15/04 .......................... 250,000 243,125
Rowan Companies, Inc., 11.875%
12/01/01 ................................ 250,000 268,750
Santa Fe Energy Resources, Inc.,
11.000% 05/15/04 ......................... 225,000 241,875
----------
1,320,560
----------
Retail Trade--(2.1%)
Food Stores--(1.6%)
Dominick's Finer Foods, Inc.,
10.875% 05/01/05 ......................... 500,000 527,500
Pathmark Stores, Inc., 9.625%
05/01/03 ................................ 250,000 234,375
----------
761,875
----------
Miscellaneous Retail--(0.5%)
Finlay Fine Jewelry Corp., 10.625%
05/01/03 ................................ 250,000 248,750
----------
Services--(6.6%)
Amusement & Recreation--(2.8%)
Bally's Grand, Inc., Series B,
10.375% 12/15/03 ......................... 500,000 548,750
Boyd Gaming Corp., 10.750% 09/01/03 500,000 526,250
Trump Atlantic City Associates,
11.250% 05/01/06 ......................... 250,000 250,688
----------
1,325,688
----------
Health Services--(3.3%)
GranCare, Inc., 9.375% 09/15/05 ............ 500,000 478,750
OrNda Health Corp., 11.375%
08/15/04 ................................ 250,000 276,250
Tenet Healthcare Corp., 10.125%
03/01/05 ................................ 750,000 789,375
----------
1,544,375
----------
Hotels, Camps & Lodging--(0.5%)
HMH Properties, Inc. 9.500%
05/15/05 ................................ 250,000 238,125
----------
Transportation, Communication, Electric,
Gas & Sanitary Services--(18.3%)
Air Transportation--(2.2%)
Greenwich Air Services, 10.500%
06/01/06 ................................ 250,000 248,438
See Notes to Investment Portfolio.
32
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund /
June 30, 1996
- --------------------------------------------------------------------------------
Par Value
-------- --------
U.S. Air, Inc., 10.375% 03/01/13 .......... $500,000 $ 495,000
United Airlines, Inc., 9.200%
03/22/08 ................................ 276,590 295,934
----------
1,039,372
----------
Broadcasting--(3.1%)
NWCG Holding Corp., (a) 06/15/99 .......... 425,000 312,375
SCI Television, Inc., 11.000%
06/30/05 ................................ 250,000 259,688
Sullivan Broadcasting, Inc.,
10.250% 12/15/05 ......................... 250,000 239,375
Young Broadcasting Corp., 11.750%
11/15/04 ................................ 650,000 680,875
----------
1,492,313
----------
Cable--(5.1%)
Bell Cablemedia PLC, stepped
coupon, (11.950% 07/15/99) (b)
07/15/04 (d) .............................. 400,000 281,500
Cablevision Systems Corp., 10.750%
04/01/04 ................................ 250,000 257,188
Comcast UK Cable Partners Ltd.,
stepped coupon, (11.200%
11/15/00) (b) 11/15/07 (d) ............... 500,000 290,000
Continental Cablevision, Inc.,
11.000% 06/01/07 ......................... 500,000 565,840
Lenfest Communications, Inc.,
8.375% 11/01/05 .......................... 400,000 364,500
Marcus Cable Co., L.P. 11.875%
10/01/05 ................................ 500,000 518,750
Videotron Holding PLC, stepped
coupon, (11.125% 08/15/00) (b)
08/15/05 (d) ............................. 250,000 159,688
----------
2,437,466
----------
Communications--(1.1%)
Brooks Fiber Properties, Inc.,
stepped coupon, (10.875%
03/01/01) (b) 03/01/06 (e) ............... 500,000 266,250
Western Wireless Corp., 10.500%
06/01/06 ................................ 250,000 249,375
----------
515,625
----------
Electric, Gas & Sanitary Services--(0.9%)
Mesa Operating Co., 10.625%
07/01/06 ................................ 400,000 406,000
----------
Gas Services--(0.5%)
California Energy Co., Inc., 9.875%
06/30/03 ................................ 250,000 253,750
----------
<PAGE>
Telecommunication--(5.4%)
Cellular Communications Units, (a)
08/15/00 (f) ............................. $250,000 $ 156,250
CAI Wireless Systems, Inc., 12.250%
09/15/02 ................................ 500,000 522,500
Intelcom Group, Inc., stepped
coupon, (12.500% 05/01/01) (b)
09/15/05 ................................ 500,000 300,000
MFS Communications Company, Inc.,
stepped coupon, (9.375% 01/15/99)
(b) 01/15/04 ............................. 500,000 376,875
(8.875% 01/15/01) (b) 01/15/06 ............ 500,000 303,750
Paging Network, Inc., 10.125%
08/01/07 ................................ 500,000 492,500
PanAmSat Corp., stepped coupon,
(11.375% 08/01/98) (b) 08/01/03 ......... 500,000 435,000
----------
2,586,875
----------
Wholesale Trade--(0.3%)
Nondurable Goods--(0.3%)
S.D. Warren Co., 12.000% 12/15/04 .......... 150,000 157,500
----------
Total Corporate Fixed-Income
Bonds & Notes (Cost of
$21,567,644) ....................................... 20,122,415
----------
Currency
Abbrev.
--------
Foreign Government & Agency Obligations--(31.2%)
Argentina Par Brady
stepped coupon, (5.50%
03/31/97) 5.250%
03/31/23 (g) ............... 500,000 274,375
Government of Finland,
9.500% 03/15/04 ............ FN 6,000,000 1,474,853
Kingdom of Denmark, 8.000%
05/15/03 .................. DK 26,894,000 4,862,259
Norwegian Government,
9.500% 10/31/02 ............ No 5,000,000 882,504
Republic of Poland
(Brady), Past Due
Interest, stepped
coupon, (4.000%
10/27/96) 3.750%
10/27/14 (h) ............... 1,705,000 1,308,588
Spanish Government,
12.250% 03/25/00 .......... Sp 285,850,000 2,532,913
Treasury Corp. of
Victoria, 12.500%
10/15/03 .................. A$ 2,194,000 2,058,627
Western Australia
Treasury, 12.000%
08/01/01 .................. A$ 1,662,000 1,477,151
----------
Total Foreign
Government & Agency Obligations
(Cost of $13,401,767) .......................... 14,871,270
----------
See Notes to Investment Portfolio.
33
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund /
June 30, 1996
- --------------------------------------------------------------------------------
Par Value
--------- ------------
U.S. Government & Agency Obligations--(21.3%)
MDC Mortgage Funding Corp, CMO,
8.850% 2018 ..................... $ 184,416 $ 188,276
Federal Home Loan Mortgage
Corp., CMO, 9.500% 2019 ......... 26,308 27,097
U.S. Treasury Bonds:
8.000% 08/15/99 ................. 5,233,000 5,471,729
11.625% 11/15/04 ................. 166,000 217,694
-----------
5,904,796
-----------
U.S. Treasury Note, 11.875%
11/15/03 ........................ 3,239,000 4,212,708
-----------
Total U.S. Government & Agency Obligations
(Cost of $10,105,524) ........................ 10,117,504
-----------
Total Bonds & Notes
(Cost of $45,074,935) ....................... 45,111,189
-----------
Shares
------
Preferred Stock--(1.5%)
Transportation, Communication, Electric, Gas & Sanitary
Services--(1.5%)
Communications--(1.5%)
Cablevision Systems Corp.,
11.125% PIK (Cost of
$750,792) ........................ 7,709 720,792
-----------
Total Investments
(Cost of $45,825,727) (i) ........ 45,831,981
-----------
Par
-------
Short-Term Obligations--(2.4%)
Repurchase agreement with Chase
Securities, Inc. dated
06/28/96, due 07/01/96 at
5.40% collateralized by U.S.
Treasury notes with various
maturities to 1998, market
value $1,185,900 (repurchase
proceeds $1,160,522) ............ $1,160,000 1,160,000
-----------
Forward Currency Contracts--(-0.1%)
(j) ........................................ (34,072)
-----------
Other Assets & Liabilities, Net--(1.4%) ....... 639,169
-----------
Net Assets--(100%) ........................... $47,597,078
===========
<PAGE>
Notes to investment portfolio:
(a) Zero coupon bond.
(b) Currently zero coupon. Shown parenthetically is the interest rate to be
paid and the date the Fund will begin accruing this rate.
(c) This is a Canadian security. Par amount is stated in U.S. dollars.
(d) This is a British security. Par amount is stated in U.S. dollars.
(e) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At June 30,
1996, the value of this security amounted to 0.6% of net assets.
(f) Each unit consists of one senior discount note and one warrant.
(g) This is an Argentinean security. Shown parenthetically is the interest
rate to be paid and the date the Fund will begin accruing this rate. Par
amount is stated in U.S. dollars.
(h) This is a Polish security. Shown parenthetically is the interest rate to
be paid and the date the Fund will begin accruing this rate. Par amount
is stated in U.S. dollars.
(i) Cost for federal income tax purposes is $45,840,710. Gross unrealized
appreciation and depreciation at June 30,1996 is as follows:
Gross unrealized
appreciation $ 815,603
Gross unrealized
depreciation (824,332)
---------
Net unrealized depreciation $ (8,729)
=========
(j) As of June 30, 1996, the Fund had entered into the following forward
currency exchange contracts:
See Notes to Investment Portfolio.
34
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund /
June 30, 1996
- --------------------------------------------------------------------------------
Net Unrealized
Appreciation
Contracts In exchange Settlement (Depreciation)
to deliver for Date (U.S. $)
- ------------- ------------- ---------- --------------
DK 15,287,147 USD 2,586,658 07/10/96 (17,492)
FF 3,855,745 USD 743,929 07/08/96 (4,620)
FF 3,500,000 USD 676,433 07/08/96 (3,053)
FM 3,439,981 USD 743,298 07/25/96 1,381
DK 3,322,745 USD 564,066 07/11/96 (1,986)
DK 3,322,744 USD 564,133 07/11/96 (1,919)
NK 3,011,994 USD 460,782 07/08/96 (2,173)
FF 1,816,103 USD 350,995 07/08/96 (1,581)
NK 1,581,345 USD 241,187 07/11/96 (1,886)
FF 852,270 USD 350,995 07/08/96 (743)
--------
$(34,072)
========
Summary of Securities by Country/Currency
Country/
Country/ Currency
Currency Value Value % of Total
- ------------- -------- ----------- ----------
United States $ 30,267,898 66.1%
Denmark .......... DK 4,862,259 10.6
Australia ......... A$ 3,535,778 7.7
Spain ............. Sp 2,532,913 5.5
Poland ............ PL 1,308,588 2.9
Finland .......... FN 1,474,853 3.2
Norway ............ No 882,504 1.9
United Kingdom .... UK 449,688 1.0
Argentina ......... AR 274,375 0.6
Canada ............ CA 243,125 0.5
----------- -----
$45,831,981 100.0%
=========== =====
Certain securities are listed by underlying exposure but may trade
predominantly on other exchanges.
See Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund /
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $45,825,727) ............................ $45,831,981
Short-term obligations ............................................................... 1,160,000
Cash (including foreign currencies) ................................................... 340
Dividends and interest receivable .................................................... 973,449
Receivable for investments sold ....................................................... 409,242
Receivable for fund shares sold ....................................................... 18,887
Receivable due from adviser .......................................................... 7,850
Unamortized organization expenses .................................................... 11,960
Other assets .......................................................................... 4,191
-----------
Total assets ........................................................................ 48,417,900
-----------
Liabilities:
Payable for fund shares repurchased ................................................... 51,070
Payable for investments purchased .................................................... 702,500
Unrealized depreciation on forward currency exchange contracts ....................... 34,072
Management fee payable ............................................................... 25,354
Accrued expenses payable ............................................................. 7,826
-----------
Total liabilities .................................................................. 820,822
-----------
Net assets ........................................................................... $47,597,078
===========
Net assets represented by:
Paid-in capital ..................................................................... $45,460,516
Accumulated undistributed net investment income ...................................... 2,082,852
Accumulated net realized gains on investments and foreign currency
transactions ....................................................................... 76,525
Net unrealized depreciation on investments and foreign currency transactions ......... (22,815)
-----------
Total net assets applicable to outstanding shares of beneficial interest .............. $47,597,078
===========
Shares of beneficial interest outstanding ............................................. 4,272,126
===========
Net asset value per share ............................................................. $11.14
======
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Interest .............................................................................. $ 2,153,592
Dividend .............................................................................. 19,542
-----------
Total investment income .............................................................. 2,173,134
Expenses:
Management fee ....................................................................... 156,886
Bookkeeping fee ...................................................................... 13,500
Transfer agent fee ................................................................... 3,750
Audit fee ............................................................................ 4,443
Printing expense .................................................................... 2,498
Trustees' fees ....................................................................... 1,668
Custodian fee ....................................................................... 4,182
Legal fee ............................................................................ 985
Amortization of organization expense ................................................ 1,980
Miscellaneous expense ................................................................ 7,666
-----------
Total expenses ...................................................................... 197,558
-----------
Less:
Expenses reimbursable by Manager ..................................................... (5,574)
-----------
Net expenses .......................................................................... 191,984
-----------
Net investment income ................................................................. 1,981,150
Realized and unrealized gains (losses) on investments and foreign currency
transactions:
Net realized losses on investments ................................................... (53,485)
Net realized gain on foreign currency transactions .................................. 301,859
Change in unrealized depreciation on investments and foreign currency transactions .. (1,613,903)
-----------
Net increase in net assets resulting from operations .................................. $ 615,621
==========
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six months Year
Ended Ended
June 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Operations:
Net investment income ......................................................... 1,981,150 $ 2,260,858
Net realized gains (losses) on investments ................................... (53,485) 356,528
Net realized gains (losses) on foreign currency transactions .................. 301,859 (89,581)
Change in unrealized appreciation (depreciation) on investments and
foreign currency transactions ............................................... (1,613,903) 1,745,890
----------- -----------
Net increase in net assets resulting from operations .......................... 615,621 4,273,695
----------- -----------
Distributions declared from:
Net investment income ......................................................... -- (2,313,068)
Net realized gains on investments ............................................. -- (140,532)
----------- -----------
Total distributions .......................................................... -- (2,453,600)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold ................................................ 7,327,704 17,078,534
Receipts for shares issued in acquisition of SteinRoe Managed Income Fund -- 37,220,278
Cost of fund shares repurchased .............................................. (8,680,734) (23,580,161)
Distributions reinvested ...................................................... -- 2,453,600
----------- -----------
Net increase (decrease) in net assets resulting from fund share
transactions ................................................................. (1,353,030) 33,172,251
----------- -----------
Total increase (decrease) in net assets ........................................ (737,409) 34,992,346
Net assets:
Beginning of period .......................................................... 48,334,487 13,342,141
----------- -----------
End of period ................................................................. $47,597,078 $48,334,487
=========== ===========
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ........................................................ $ 2,082,852 $ (68,878)
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................. 662,420 1,586,240
Issued in acquisition of SteinRoe Managed Income Fund ......................... -- 3,302,598
Shares redeemed ............................................................... (786,369) (2,079,174)
Distributions reinvested ...................................................... -- 223,869
----------- -----------
Net increase (decrease) ....................................................... (123,949) 3,033,533
=========== ===========
</TABLE>
See Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Year
months Ended Period
Ended December Ended
June 30, 31, December 31,
------------ ---------- ------------
1996 1995 1994***
------------ ---------- ------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ................................. $ 10.99 $ 9.79 $ 10.00
------- ------- -------
Net investment income ............................................... 0.45 0.55 0.30
Net realized and unrealized gains (losses) on investments and
foreign currency transactions ..................................... (0.30) 1.24 (0.19)
------- ------- -------
Total from investment operations .................................... 0.15 1.79 0.11
------- ------- -------
Less distributions from:
Dividends from net investment income ................................ -- (0.56) (0.31)
Distributions from net realized gains on investments ................ -- (0.03) (0.01)
------- ------- -------
Total distributions .................................................. -- (0.59) (0.32)
------- ------- -------
Net asset value, end of period ...................................... $11.14 $10.99 $ 9.79
======= ======= =======
Total return:
Total investment return (b)(c) ...................................... 1.36%** 18.30% 1.10%**
Ratios/supplemental data:
Net assets, end of period (000) ...................................... $47,597 $48,334 $13,342
Ratio of net expenses to average net assets (e) ..................... 0.80%*(d) 0.84%(d) 1.00%*
Ratio of net investment income to average net assets (c) ............. 8.21%*(d) 8.08%(d) 7.33%*
Portfolio turnover ratio ............................................ 50%** 281% 94%**
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(e) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 0.82%, 0.94%
and 1.60% (annualized), respectively.
See Notes to Financial Statements.
38
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth /
June 30, 1996
- --------------------------------------------------------------------------------
Shares Value
------ -----------
COMMON STOCKS--(97.4%)
Finance, Insurance, & Real Estate--(14.3%)
Depository Institutions--(6.0%)
BankAmerica Corp. ................... 14,800 $ 1,121,100
Chase Manhattan Corp. ................ 8,200 579,125
Comerica, Inc. ....................... 5,100 227,587
First Bank System, Inc. ............. 10,900 632,200
First Union Corp. ................... 6,900 420,037
Nations Bank Corp. ................... 2,300 190,038
-----------
3,170,087
-----------
Insurance Carriers--(4.1%)
Allstate Corp. ....................... 8,724 398,032
American Re Corp. ................... 20,500 919,937
Cigna Corp. .......................... 2,800 330,050
Old Republic International Corp. 8,550 183,825
Providian Corp. ..................... 300 12,863
Travelers Group, Inc. ................ 4,050 184,781
Wellpoint Health Networks, Inc.,
Class A ............................ 4,935 154,219
-----------
2,183,707
-----------
Nondepository Credit Institutions--(1.6%)
Beneficial Corp. ..................... 15,400 864,325
-----------
Security Brokers & Dealers--(2.6%)
A.G. Edwards, Inc. ................... 22,200 602,175
Bear Stearns Cos, Inc. ............... 19,950 471,319
Lehman Brothers Holdings, Inc. ....... 11,800 292,050
-----------
1,365,544
-----------
Manufacturing--(53.6%)
Chemicals & Allied Products--(12.3%)
Abbott Laboratories .................. 1,700 73,950
Albemarle Corp. ..................... 27,200 496,400
Bristol-Myers Squibb Co. ............. 15,800 1,422,000
Clorox Co. ........................... 8,500 753,312
Dow Chemical Co. ..................... 2,500 190,000
Johnson & Johnson ................... 29,000 1,435,500
Merck & Co., Inc. ................... 12,600 814,275
Morton International, Inc. .......... 1,300 48,425
Procter & Gamble Co. ................ 800 72,500
Rohm & Haas Company .................. 400 25,100
Schering-Plough Corp. ................ 10,500 658,875
Terra Industries, Inc. ............... 7,700 95,288
Union Carbide Corp. .................. 11,500 457,125
-----------
6,542,750
-----------
Electronic & Electrical Equipment--(1.9%)
Cypress Semiconductor Corp. .......... 8,100 97,200
Komag, Inc.(a) ....................... 27,600 727,950
Read-Rite Corp. ..................... 9,400 132,775
Thomas & Betts Corp. ................ 1,500 56,250
-----------
1,014,175
-----------
<PAGE>
Shares Value
------ -----------
Fabricated Metal--(0.2%)
Snap-On, Inc. ........................ 2,400 $ 113,700
-----------
Food & Kindred Products--(6.4%)
Campbell Soup Co. ................... 3,300 232,650
Heinz (H.J.) Co. ..................... 3,900 118,462
IBP, Inc. ........................... 25,600 707,200
PepsiCo, Inc. ........................ 44,600 1,577,725
Philip Morris Co., Inc. ............. 2,800 291,200
Sara Lee Corp. ....................... 14,300 462,963
-----------
3,390,200
-----------
Furniture & Fixtures--(1.2%)
Johnson Controls, Inc. ............... 5,900 410,050
Leggett & Platt, Inc. ................ 7,700 213,675
-----------
623,725
-----------
Machinery & Computer Equipment--(10.0%)
AGCO Corp. ............................ 600 16,650
Applied Materials, Inc. (a) ........... 25,200 768,600
Caterpillar, Inc. .................... 1,800 121,950
Compaq Computer Corp. (a) ............. 12,500 615,625
Dell Computer Corp. (a) .............. 15,400 783,475
Dover Corp. ........................... 600 27,675
Hewlett-Packard Co. ................... 14,400 1,434,600
Lam Research Corp. (a) ................ 16,700 434,200
Novellus Systems, Inc. (a) ........... 800 28,800
Silicon Valley Group, Inc.(a) ........ 6,000 112,500
Storage Technology Corp. .............. 8,800 336,600
Western Digital Corp. (a) ............. 23,100 603,488
-----------
5,284,163
-----------
Measuring & Analyzing Instruments--(2.3%)
Becton, Dickinson & Co. .............. 4,300 345,075
Honeywell, Inc. ...................... 1,100 59,950
Millipore Corp. ...................... 17,600 737,000
Tektronix, Inc. ...................... 2,000 89,500
-----------
1,231,525
-----------
Miscellaneous Manufacturing--(1.4%)
Callaway Golf Co. .................... 20,600 684,950
Jostens, Inc. (a) .................... 3,200 63,200
-----------
748,150
-----------
Paper Products--(0.2%)
Consolidated Papers, Inc. ............. 2,000 104,000
-----------
Petroleum Refining--(7.5%)
Amoco Corp. ........................... 5,600 405,300
Atlantic Richfield Co. ................ 4,200 497,700
Exxon Corp. ........................... 16,100 1,398,687
Mobil Corp. ........................... 8,400 941,850
Phillips Petroleum Co. ................ 6,800 284,750
USX-Marathon Group .................... 23,100 464,888
-----------
3,993,175
-----------
See Notes to Investment Portfolio.
39
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth /
June 30, 1996
- -------------------------------------------------------------------------------
Shares Value
------ -----------
Printing & Publishing--(1.5%)
Tribune Co. ........................... 6,400 $ 464,800
Washington Post Co. ................... 1,000 324,000
----------
788,800
----------
Stone, Clay, Glass & Concrete--(1.3%)
Owens-Corning Fiberglas
Corp. (a) ........................... 16,600 713,800
----------
Transportation Equipment--(7.4%)
Chrysler Corp. ........................ 16,900 1,047,800
Ford Motor Co. ........................ 22,200 718,725
General Dynamics Corp. ................ 4,400 272,800
McDonnell Douglas Corp. .............. 17,400 843,900
PACCAR, Inc. ......................... 2,300 112,700
Teledyne, Inc. ........................ 26,200 946,475
----------
3,942,400
----------
Mining & Energy--(1.3%)
Oil & Gas Extraction--(1.3%)
Sonat Offshore Drilling Co. ........... 7,700 388,850
Vastar Resources, Inc. ................ 8,600 321,425
----------
710,275
----------
Retail Trade--(3.0%)
Apparel & Accessory Stores--(1.9%)
TJX Companies, Inc. ................... 30,200 1,019,250
----------
Food Stores--(0.5%)
Great Atlantic & Pacific Tea
Co., Inc. ........................... 600 19,725
Kroger Corp. (a) ...................... 4,800 189,600
Vons Companies, Inc. (a) .............. 800 29,900
----------
239,225
----------
General Merchandise Stores--(0.3%)
Dayton Hudson Corp. ................... 100 10,312
Dillard Department Stores, Inc. ....... 3,700 135,050
----------
145,362
----------
Miscellaneous Retail--(0.1%)
Eckerd Corp. (a) ...................... 1,600 36,200
----------
Restaurants--(0.2%)
Luby's Cafeterias, Inc. .............. 4,300 101,050
----------
Services--(5.7%)
Business Services--(1.4%)
Computer Associates
International, Inc. ................. 10,700 762,375
----------
Health Services--(1.6%)
Tenet Healthcare Corp. (a) ........... 39,000 833,625
----------
Hotels, Camps & Lodging--(1.9%)
Hilton Hotels Corp. ................... 8,900 1,001,250
----------
Motion Pictures--(0.8%)
King World Productions,
Inc. (a) ........................... 11,100 403,763
----------
<PAGE>
Shares Value
------ -----------
Transportation, Communication, Electric, Gas & Sanitary
Services--(18.7%)
Air Transportation--(2.5%)
AMR Corp. ............................. 2,100 $ 191,100
Delta Air Lines, Inc. .................. 2,900 240,700
Northwest Airlines Corp.
Class A (a) ......................... 5,700 225,150
UAL, Inc. (a) .......................... 12,800 688,000
----------
1,344,950
----------
Communications--(9.3%)
AT&T Corp. ............................. 2,400 148,800
Ameritech Corp. ....................... 19,700 1,169,687
Bell Atlantic Corp. .................... 2,700 172,125
BellSouth Corp. ....................... 7,000 296,625
Century Telephone
Enterprises, Inc. ................... 3,800 121,125
Compuware Corp. (a) .................... 5,000 197,500
GTE Corp. ............................. 12,300 550,425
NYNEX Corp. ............................ 6,600 313,500
Pacific Telesis Group, Inc. ............ 6,400 216,000
Southern New England
Telecommunications Corp. ............. 2,600 109,200
Southwestern Bell Corp. ............... 12,700 625,475
Sprint Corp. .......................... 23,900 1,003,800
----------
4,924,262
----------
Electric, Gas & Sanitary Services--(1.0%)
Enova Corp. ............................ 18,400 425,500
Panhandle Eastern Corp. ............... 3,200 105,200
----------
530,700
----------
Electric Services--(1.7%)
Central & South West Corp. ............ 10,900 316,100
Consolidated Edison Co. of
New York ............................ 2,700 78,975
NIPSCO Industries, Inc. ............... 800 32,200
Ohio Edison Co. ....................... 15,900 347,813
Rochester Gas & Electric Corp. ......... 3,200 68,800
Unicom Corp. .......................... 2,100 58,538
----------
902,426
----------
Gas Services--(2.4%)
Consolidated Natural
Gas Co. .............................. 7,000 365,750
National Fuel Gas Co. .................. 2,300 82,800
Pacific Enterprises .................... 3,500 103,688
Williams Companies, Inc. ............... 14,900 737,550
----------
1,289,788
----------
Water Transportation--(1.8%)
Tidewater, Inc. ....................... 22,000 965,250
----------
See Notes to Investment Portfolio.
40
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth /
June 30, 1996
- -------------------------------------------------------------------------------
Shares Value
------ -----------
Wholesale Trade--(0.8%)
Durable Goods--(0.5%)
Avnet, Inc. ............................ 6,900 $ 290,662
-----------
Nondurable Goods--(0.3%)
Caraustar Industries, Inc. ............ 1,100 29,150
Supervalu, Inc. ....................... 3,600 113,400
-----------
142,550
-----------
Total Common Stocks
(Cost of $43,676,038) ........................ 51,717,189
-----------
PREFERRED STOCKS--(0.0%)
Manufacturing--(0.0%)
Transportation Equipment--(0.0%)
Teledyne, Inc. Series E
(Cost of $3,783) ..................... 262 4,028
-----------
Total Investments--(97.4%)
(Cost of $43,679,821) (b) ................... 51,721,217
-----------
<PAGE>
Par Value
--------- -----------
See Notes to Financial Statements.SHORT-TERM
OBLIGATIONS--(2.6%)
Repurchase agreement with Chase
Securities, Inc., dated
06/28/96, due 07/01/96 at
5.40%, collateralized by U.S.
Treasury notes with various
maturities to 1998, market
value $1,435,348 (repurchase
proceeds $1,404,632) $1,404,000 $ 1,404,000
-----------
Other Assets & Liabilities, Net--(0.0%) 7,204
-----------
Net Assets--(100.0%) $53,132,421
===========
Notes to investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is identical. Gross unrealized
appreciation and depreciation at June 30, 1996 is as follows:
Gross unrealized
appreciation .................. $ 9,451,296
Gross unrealized
depreciation .................. (1,409,900)
-----------
Net unrealized appreciation $ 8,041,396
===========
See Notes to Financial Statements.
41
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth /
June 30, 1996 (Unaudited)
Assets:
Investments, at market value (Identified cost $43,679,821) .... $51,721,217
Short-term obligations ........................................ 1,404,000
Dividends and interest receivable ............................. 82,856
Receivable for fund shares sold ............................... 19,487
Unamortized organization expenses ............................. 11,960
Other assets .................................................. 1,349
-----------
Total assets ................................................ 53,240,869
-----------
Liabilities:
Payable for investments purchased ............................. 63,024
Management fee payable ........................................ 34,675
Accrued expenses payable ...................................... 10,749
-----------
Total liabilities ........................................... 108,448
-----------
Net assets .................................................... $53,132,421
===========
Net assets represented by:
Paid-in capital .............................................. $44,876,080
Accumulated undistributed net investment income .............. 334,716
Accumulated net realized losses on investments ............... (119,771)
Net unrealized appreciation on investments ................... 8,041,396
-----------
Total net assets applicable to outstanding shares of beneficial
interest .................................................... $53,132,421
===========
Shares of beneficial interest outstanding ..................... 3,933,993
===========
Net asset value per share ..................................... $13.51
======
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
Investment income:
Dividends ...................................................... $ 561,698
Interest ....................................................... 39,337
-----------
Total investment income ...................................... 601,035
-----------
Expenses:
Management fee ................................................ 193,530
Bookkeeping fee ............................................... 13,500
Transfer agent fee ............................................ 3,750
Audit fee ..................................................... 7,250
Printing expense .............................................. 2,138
Trustees' fees ................................................ 2,402
Custodian fee ................................................. 2,456
Legal fee ..................................................... 1,576
Amortization of organization expense .......................... 1,980
Miscellaneous expense ......................................... 2,409
-----------
Total expenses ............................................... 230,991
-----------
Net investment income .......................................... 370,044
Realized and unrealized gains (losses) on investments:
Net realized losses on investments ............................ (119,200)
Change in unrealized appreciation on investments .............. 3,900,639
-----------
Net increase in net assets resulting from operations ........... $ 4,151,483
===========
See Notes to Financial Statements.
42
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Year
Ended Ended
June 30, December 31,
1996 1995
------------- -------------
<S> <C> <C>
Operations:
Net investment income .................................................................. $ 370,044 $ 512,329
Net realized gains (losses) on investments ............................................. (119,200) 2,620,298
Change in unrealized appreciation on investments ....................................... 3,900,639 3,846,518
----------- -----------
Net increase in net assets resulting from operations ................................... 4,151,483 6,979,145
----------- -----------
Distributions declared from:
Net investment income .................................................................. -- (518,493)
Net realized gains on investments ...................................................... -- (2,576,965)
----------- -----------
Total distributions ..................................................................... -- (3,095,458)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold ......................................................... 10,126,284 26,906,230
Cost of fund shares repurchased ........................................................ (4,162,698) (6,240,626)
Distributions reinvested ............................................................... -- 3,095,458
----------- -----------
Net increase in net assets resulting from fund share transactions ....................... 5,963,586 23,761,062
----------- -----------
Total increase in net assets ............................................................ 10,115,069 27,644,749
Net assets:
Beginning of period .................................................................... 43,017,352 15,372,603
----------- -----------
End of period .......................................................................... $53,132,421 $43,017,352
=========== ===========
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ................................................................. $ 334,716 $ (35,328)
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................................ 772,564 2,240,739
Shares redeemed ........................................................................ (318,009 (508,643)
Distributions reinvested ............................................................... -- 250,442
----------- -----------
Net increase ............................................................................ 454,555 1,982,538
=========== ===========
</TABLE>
See Notes to Financial Statements.
43
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Colonial-Keyport U.S. Fund for Growth
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six
Months Year Period
Ended Ended Ended
June 30, December 31, December 31,
------------ ------------ -------------
1996 1995 1994***
------------ ----------- -------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ..................... $ 12.36 $ 10.27 $ 10.00
------- ------- -------
Net investment income .................................... 0.10 0.21 0.09
Net realized and unrealized gains on investments ......... 1.05 2.84 0.35
------- ------- -------
Total from investment operations ......................... 1.15 3.05 0.44
------- ------- -------
Less distributions from:
Dividends from net investment income .................... -- (0.16) (0.11)
Distributions from net realized gains on investments -- 0.80 (0.06)
------- ------- -------
Total distributions ...................................... -- (0.96) (0.17)
------- ------- -------
Net asset value, end of period ........................... $ 13.51 $ 12.36 $ 10.27
======= ======= =======
Total return:
Total investment return (b) ............................. 9.30%** 29.70%(c) 4.40%**(c)
Ratios/supplemental data:
Net assets, end of period (000) .......................... $53,132 $43,017 $15,373
Ratio of net expenses to average net assets .............. 0.95%*(e) 1.00%(d) 1.00%*(d)
Ratio of net investment income to average net assets ..... 1.52%*(e) 1.72%(c) 2.16%*(c)
Portfolio turnover ratio ................................. 24%** 115% 52%**
Average commission rate (f) .............................. $ 0.047 -- --
</TABLE>
* Annualized
** Not Annualized
*** For the period from the commencement of operations July 5, 1994 to
December 31, 1994.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) Computed giving effect to Manager's expense limitation undertaking.
(d) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 1.07% and
1.64% (annualized), respectively.
(e) The benefits derived from custody credits and directed brokerage
arrangements had no impact. Prior years' ratios are net of benefits
received, if any.
(f) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
See Notes to Financial Statements.
44
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Unaudited)
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- ------ -----
COMMON STOCKS--(88.9%)
Agriculture, Forestry & Fishing--(1.3%)
Agriculture Crops
Sime Barby Bhd ...................... Ma 133,000 $ 367,816
----------
Construction--(3.5%)
Citic Pacific Ltd. (a) ............... HK 254,000 1,027,025
----------
Finance, Insurance & Real Estate--(47.8%)
Depository Institutions--(22.1%)
Bank of Ayudhya Ltd. ................ Th 59,000 325,236
Development Bank of Singapore
Ltd. ............................... Si 78,000 972,582
Guoco Group Ltd. ..................... HK 147,000 700,723
HSBC Holdings PLC ................... HK 76,200 1,151,712
Hang Seng Bank ...................... HK 122,600 1,235,344
Oversea-Chinese Banking Corp.
Ltd ................................ Si 65,000 759,830
Public Bank Bhd ...................... Ma 233,000 644,370
Thai Farmers Bank Ltd. ............... Th 60,000 656,770
----------
6,446,567
----------
Holdings & Other Investment Companies--(5.4%)
Hutchison Whampoa Ltd. ............... HK 144,000 905,929
Singapore Technologies ............... Si 256,000 678,314
----------
1,584,243
----------
Nondepository Credit Institutions--(1.4%)
Manhattan Card Co., Ltd. ............. HK 826,000 394,807
----------
Real Estate--(18.9%)
Cheung Kong Holdings Ltd. ............ HK 179,000 1,289,142
City Developments Ltd. ............... Si 115,000 896,210
Land and House Co., Ltd. ............. Th 19,000 239,398
Melco International
Development Ltd. ................... HK 20,800 5,777
Shun Tak Holdings Ltd. ............... HK 416,000 255,264
Sun Hung Kai Properties Ltd........... HK 108,000 1,091,719
Swire Pacific Ltd., Series A ......... HK 113,000 967,091
Wharf Holdings ...................... HK 213,000 762,188
----------
5,506,789
----------
Manufacturing--(9.5%)
Chemicals--0.5%
PT Kalbe Farma ...................... In 36,500 81,582
PT Darya Varia Laboratoria
(a) ................................ In 24,640 50,572
----------
132,154
----------
Electronic & Electrical Equipment--(1.0%)
Nylex Malaysia Bhd ................... Ma 80,000 307,816
----------
Fabricated Metal--(1.5%)
Box-Pac Bhd (a) ...................... Ma 72,000 44,729
Kian Joo Can Factory Bhd ............. Ma 72,000 395,351
----------
440,080
----------
<PAGE>
Country
Abbrev. Shares Value
------- ------ -----
Food & Kindred Products--(1.0%)
PT Mayora Indah (a) .................. In 515,000 $ 287,771
----------
Machinery & Computer Equipment--1.8%
China Hong Kong Photo
Products Holdings, Ltd. ............ HK 460,000 262,951
PT Modern Photo Film (a) ............. In 61,500 264,345
----------
527,296
----------
Printing & Publishing--(2.9%)
Singapore Press Holdings Ltd. ........ Si 42,800 839,929
----------
Stone, Clay, Glass & Concrete--(0.8%)
Siam Cement Co., Ltd. ................ Th 5,000 245,305
----------
Retail Trade--(3.9%)
Apparel & Accessory Stores--(1.5%)
Giordano International Ltd. .......... HK 472,000 457,305
----------
Auto Dealers & Gas Stations--(2.4%)
Cycle & Carriage Ltd. ................ Si 65,000 695,360
----------
Service--(6.2%)
Hotels, Camps & Lodging--(3.3%)
Genting Bhd (b) ...................... Ma 121,000 945,691
----------
Miscellaneous Repair Services--(2.9%)
Keppel Corp. (a) ..................... Si 102,000 852,710
----------
Transportation, Communication, Electric, Gas & Sanitary
Services--(16.7%)
Communications--8.8%
Advanced Information Services
(a) ................................ Th 31,000 485,805
Hong Kong Telecommunications
Ltd. ............................... HK 417,200 749,138
PT Indosat ........................... In 72,000 242,166
PT Telekomunikasi Indonesia .......... In 150,000 227,273
Philippine Long Distance
Telephone, ADR .................... Ph 2,200 127,875
Telekom Malaysia Bhd ................ Ma 81,000 720,721
----------
2,552,978
----------
Electric Services--(3.3%)
Hong Kong Electric Holdings
Ltd. ............................... HK 212,000 646,325
Korea Electric Power Corp.,
ADR (a) ............................ Ko 13,000 315,250
----------
961,575
----------
Gas Services--(4.6%)
Hong Kong and China Gas Co.,
Ltd. ............................... HK 731,280 1,166,685
Petronas Gas Berhad .................. Ma 40,000 171,543
----------
1,338,228
See Notes to Investment Portfolio.
45
<PAGE>
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1996
- -------------------------------------------------------------------------------
Country
Abbrev. Shares Value
------- ------- ------------
Total Common Stocks
(Cost of $23,447,678) ............................ $25,911,445
-----------
Rights (a)--(0.2%)
Oversea-Chinese Banking Corp.
Expires 7/05/96 .................... Si 6,500 29,334
Bank of Ayudhya Ltd. Rights
Expires 7/04/96 .................... Th 14,750 21,489
-----------
Total Rights--(0.0%)
(Cost of $43,991) ................................ 50,823
-----------
Total Investments--(89.1%)
(Cost of $23,491,669) (c) ........................ 25,962,268
-----------
Par
---------
SHORT-TERM OBLIGATIONS--(10.7%)
Repurchase agreement with Chase
Securities, Inc., dated
06/28/96, due 07/01/96 at
5.40%, collaterized by U.S.
Treasury notes with various
maturities to 1998, market
value $3,262,252 (repurchase
proceeds $3,132,409) .............. $3,131,000 3,131,000
-----------
Other Assets & Liabilities--(0.2%) .................. 47,117
-----------
Net Assets--(100%) .................................. $29,140,385
===========
<PAGE>
Notes to investment portfolio:
(a) Non-income producing.
(b) Genting Bhd is a restricted security which was acquired on May 2, 1995
and May 19, 1995 at a cost of $484,912. The fair value is determined
under the direction of the Trustees. This security represents 3.2% of the
Fund's net assets at June 30, 1996.
(c) The cost for federal income tax purposes is identical. Gross unrealized
appreciation and depreciation at June 30, 1996 is as follows:
Gross unrealized appreciation $3,404,013
Gross unrealized depreciation (933,414)
----------
Net unrealized appreciation $2,470,599
==========
Acronym Name
- ------- ----
ADR American Depository Receipt
GDS Global Depository Share
Summary of Securities by Country
Country Value % of Total
------- ----------- ----------
Hong Kong ......... HK $13,069,125 50.3%
Singapore ......... Si 5,724,269 22.0
Malaysia ........... Ma 3,598,037 13.9
Thailand ........... Th 1,974,003 7.6
Indonesia ......... In 1,153,709 4.4
South Korea ........ Ko 315,250 1.2
Philippines ........ Ph 127,875 0.6
----------- ----
$25,962,268 100%
=========== ====
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
See Notes to Financial Statements.
46
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1996
(Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $23,491,669) ....................... $25,962,268
Short-term obligations ........................................................... 3,131,000
Cash (including foreign currencies) .............................................. 58,577
Dividends and interest receivable ................................................ 50,408
Receivable for fund shares sold ................................................. 16,171
-----------
Total assets .................................................................. 29,218,424
-----------
Liabilities:
Payable for fund shares repurchased .............................................. 17,750
Management fee payable ........................................................... 22,017
Accrued expenses payable ......................................................... 38,272
-----------
Total liabilities .............................................................. 78,039
-----------
Net assets ....................................................................... $29,140,385
===========
Net assets represented by:
Paid-in capital ................................................................. $26,585,251
Accumulated undistributed net investment income ................................ 98,236
Accumulated net realized losses on investments and foreign currency
transactions ................................................................... (11,853)
Net unrealized appreciation on investments and foreign currency transactions ... 2,468,751
-----------
Total net assets applicable to shares of beneficial interest outstanding ......... $29,140,385
===========
Shares of beneficial interest outstanding ........................................ 12,063,556
===========
Net asset value per share ....................................................... $2.42
=====
</TABLE>
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $21,238) .......... $303,823
Interest ............................................................................. 76,973
--------
Total investment income ............................................................ 380,796
--------
Expenses:
Management fee ...................................................................... 116,569
Bookkeeping fee ..................................................................... 13,500
Transfer agent fee .................................................................. 3,750
Audit fee ........................................................................... 7,462
Printing expense ................................................................... 2,366
Trustees' fees ...................................................................... 1,456
Custodian fee ...................................................................... 23,660
Legal fee ........................................................................... 3,458
Miscellaneous expense ............................................................... 7,643
--------
Total expenses ..................................................................... 179,864
--------
Net investment income ................................................................ 200,932
--------
Realized and unrealized gains (losses) on investments and foreign currency
transactions:
Net realized losses on investments .................................................. (11,857)
Net realized losses on foreign currency transactions ................................ (9,180)
Change in unrealized appreciation on investments and foreign currency transactions .. 726,390
--------
Net increase in net assets resulting from operations ................................. $906,285
========
</TABLE>
See Notes to Financial Statements.
47
<PAGE>
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Period
Ended Ended
June 30, December 31,
1996 1995*
----------- ------------
<S> <C> <C>
Operations:
Net investment income ........................................................... $ 200,932 $ 85,551
Net realized losses on investments ............................................. (11,857) (75)
Net realized losses on foreign currency transactions ............................ (9,180) (14,780)
Unrealized appreciation on investments and foreign currency transactions ........ 726,390 1,742,361
----------- -----------
Net increase in net assets resulting from operations ............................ 906,285 1,813,057
----------- -----------
Distributions declared from:
Net investment income ........................................................... -- (85,551)
In excess of net investment income ............................................. -- (78,657)
----------- -----------
-- (164,208)
----------- -----------
Fund share transactions:
Proceeds from fund shares sold .................................................. 10,948,487 17,964,083
Cost of fund shares repurchased ................................................ (1,691,841) (799,686)
Distributions reinvested ........................................................ -- 164,208
----------- -----------
Net increase in net assets resulting from fund share transactions ................ 9,256,646 17,328,605
----------- -----------
Total increase in net assets ..................................................... 10,162,931 18,977,454
Net assets:
Beginning of period ............................................................ 18,977,454 0
----------- -----------
End of period ................................................................... $29,140,385 $18,977,454
=========== ===========
Accumulated undistributed (overdistributed) net investment income included
in ending net assets .......................................................... $ 98,236 $ (93,375)
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................... 4,430,389 8,623,798
Shares redeemed ................................................................. (693,750) (369,219)
Distributions reinvested ........................................................ -- 72,338
----------- -----------
Net increase .................................................................... 3,736,639 8,326,917
=========== ===========
</TABLE>
* For the period from the commencement of operations May 1, 1995 to December
31, 1995.
See Notes to Financial Statements.
48
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (a)
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six
Months Period
Ended Ended
June 30, December 31,
----------- ------------
1996 1995***
----------- ------------
<S> <C> <C>
Per share operating performance:
Net asset value, beginning of period ........................................ $ 2.28 $ 2.00
------- -------
Net investment income ...................................................... 0.02 0.01
Net realized and unrealized gains on investments and foreign
currency transactions ..................................................... 0.12 0.29
------- -------
Total from investment operations ........................................... 0.14 0.30
------- -------
Less distributions from:
Dividends from net investment income ....................................... -- (0.01)
In excess of net investment income ........................................ -- (0.01)
------- -------
Total distributions ......................................................... -- (0.02)
------- -------
Net asset value, end of period ............................................. $ 2.42 $ 2.28
======= =======
Total return:
Total investment return (b) ................................................ 6.14%** 15.00%**
Ratios/supplemental data:
Net assets, end of period (000) ............................................. $29,140 $18,977
Ratio of net expenses to average net assets (c) ............................ 1.38%* 1.72%*
Ratio of net investment income to average net assets (c) .................... 1.54%* 0.89%*
Portfolio turnover ratio ................................................... 2%** 12%**
Average commission rate (d) ................................................ $ 0.022 --
</TABLE>
* Annualized
** Not annualized.
*** For the period from the commencement of operations May 1, 1995 to
December 31, 1995.
(a) Per share data was calculated using average shares outstanding during the
period.
(b) Total return at net asset value assuming all distributions reinvested.
(c) The benefits derived from custody credits and directed brokerage
arrangements had no impact.
(d) For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which commissions are charged.
See Notes to Financial Statements.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1. Organization and Accounting Policies
Keyport Variable Investment Trust (the "Trust") an open-end, diversified
management investment company, was organized as a Massachusetts business
trust on March 4, 1993. At June 30, 1996 the Trust consisted of six series of
Funds with different investment objectives, policies, and restrictions:
Colonial-Keyport Growth and Income Fund ("Growth and Income Fund"),
Colonial-Keyport Utilities Fund ("Utilities Fund"), Colonial-Keyport
International Fund for Growth ("International Fund for Growth"),
Colonial-Keyport Strategic Income Fund ("Strategic Income Fund"),
Colonial-Keyport U.S. Fund for Growth ("U.S. Fund for Growth"), and
Newport-Keyport Tiger Fund ("Tiger Fund") (individually referred to as a
"Fund", or collectively referred to as the "Funds"). Each Fund's objective is
as follows:
Growth and Income Fund seeks primarily income and capital growth and,
secondarily, capital preservation.
Utilities Fund seeks primarily current income and, secondarily, long-term
growth.
International Fund for Growth seeks long-term growth.
Strategic Income Fund seeks a high level of current income and total return
as is consistent with prudent risk.
U.S. Fund for Growth seeks growth over time exceeding the S&P 500 Index's
performance.
Tiger Fund seeks long-term capital appreciation.
Shares of the Trust are available and are being marketed exclusively as a
pooled funding vehicle for variable annuity contracts ("VA contracts") and
Variable Life insurance Policies ("VLI Policies") of Keyport Life Insurance
Company ("Keyport"), Keyport America Life Insurance Company (formerly Crown
America Life Insurance Company) (a wholly-owned subsidiary of Keyport), and
the VA contracts of Liberty Life Assurance Company of Boston ("Liberty
Life"). The insurance companies and their separate accounts own all the
shares of the Funds. Keyport Advisory Services Corp. (the "Manager"), a
wholly-owned subsidiary of Keyport, provides investment management, advisory,
and administrative services to the Trust. Colonial Management Associates,
Inc. ("Colonial") provides sub-advisory services to each Fund of the Trust,
other than the Tiger Fund. Newport Fund Management, Inc. ("Newport") provides
sub-advisory services to the Tiger Fund. Colonial also provides pricing and
recordkeeping services to the Trust. Keyport Financial Services Corp., a
wholly-owned subsidiary of Keyport, serves as the underwriter of the Trust.
The Manager, Keyport, Colonial and Newport are indirect wholly-owned
subsidiaries of Liberty Financial Companies, Inc. ("Liberty Financial").
Liberty Mutual Insurance Company ("Liberty Mutual") owns approximately 82% of
the outstanding voting shares of Liberty Financial. Liberty Life is a
wholly-owned subsidiary of Liberty Mutual and Liberty Mutual Fire Insurance
Company.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The preparation of
financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Valuation of Investments--Portfolio securities listed on an exchange and
over-the-counter securities quoted on the NASDAQ system are valued on the
basis of the last sale on the date as of which the valuation is made, or,
lacking any sales, at the current bid prices. Over-the-counter securities not
quoted on the NASDAQ system are valued at the latest bid quotation. Long-
term debt securities are valued on the basis of dealer-supplied quotations or
valuations furnished by a pricing service which may employ electronic data
processing techniques, including a "matrix" system to determine the
valuations. Foreign debt securities are valued at the current bid price
furnished by market makers. Foreign equity securities listed on an exchange
are valued on the basis of last sale on the date as of which the valuation is
made, or lacking any sales, at the current bid prices. Forward currency
contracts are valued based on the weighted value of the exchange traded
contracts with similar durations. In certain countries, the Fund may hold
foreign designated shares. If the foreign share price is not readily
available as a result of limited share activity, the securities are valued at
the last sale price of the local shares in the principal market in which such
securities are normally traded. Korean equity securities that have reached
the limit for aggregate foreign ownership and for which premiums to the local
exchange prices may be paid by foreign investors are valued by applying a
broker quoted premium to the local share price. Securities for which reliable
quotations are not readily available are valued at fair value, as determined
in good faith and pursuant to procedures established by the Trustees.
Short-term instruments with remaining maturities of 60 days or less are
valued at amortized cost unless the Trustees determine this does not
represent fair value.
Federal Income Taxes--The Funds intend to qualify as "regulated investment
companies" and as such (and by complying with the applicable provisions of
the Internal Revenue Code) will not be subject to Federal income tax on
taxable income (including realized capital gains) distributed to
shareholders. By making the distributions required under the Internal Revenue
Code, the Funds intend to avoid excise tax liability.
Organization Expenses--Costs incurred in connection with the organization
and offering of the Funds are being deferred and amortized over 60 months
from the date those Funds commenced business.
Delayed Delivery Transactions--Growth and Income Fund and Strategic Income
Fund may purchase or sell secu-
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
rities on a when-issued or forward commitment basis. Payment and delivery may
take place a month or more after the date of the transaction. The price of
the underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. This may
increase the risk if the other party involved in the transaction fails to
deliver and causes the Funds to subsequently invest at less advantageous
prices. The Funds identify securities as segregated in their custodial
records with a value at least equal to the amount of the purchase commitment.
Expenses--Most expenses of the Trust can be attributed to a Fund. Expenses
which cannot be directly attributed are apportioned among the Funds in the
Trust.
Other--Security transactions are accounted for on trade date. Interest
income is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. Net realized and unrealized gains (losses) on foreign
currency transactions include the fluctuation in exchange rates on gains
(losses) between trade and settlement dates on security transactions, gains
(losses) arising from the disposition of foreign currency, and currency gains
(losses) between the accrual and payment dates on dividend and interest income
and foreign withholding taxes. The Funds do not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain (losses) from investments. The Funds may enter into forward
currency contracts to purchase or sell foreign currencies at predetermined
exchange rates in connection with the settlement of purchases and sales of
securities. The Funds may also enter into forward currency contracts to hedge
certain other foreign currency denominated assets. The contracts are used to
minimize the exposure to foreign exchange rate fluctuations during the period
between trade and settlement date of the contracts. All contracts are
marked-to-market daily, resulting in unrealized gains (losses) which become
realized at the time the forward currency contracts are closed or mature.
Realized and unrealized gains (losses) arising from such transactions are
included in net realized and unrealized gains (losses) on foreign currency
transactions. Forward currency contracts do not eliminate fluctuations in the
prices of the Funds' portfolio securities. While the maximum potential loss
from such contracts is the aggregate face value in U.S. dollars at the time
the contract was opened, exposure is typically limited to the change in value
of the contract (in U.S. dollars) over the period it remains open. Risks may
also arise if counterparties fail to perform their obligations under the
contracts.
Note 2. Fund Share Transactions
Each Fund's capitalization consists of an unlimited number of shares of
beneficial interest without par value that represent a separate series of the
Trust. Each share of a Fund represents an equal proportionate beneficial
interest in that Fund and, when issued and outstanding, is fully paid and
nonassessable. Shareholders would be entitled to share proportionally in the
net assets of a Fund available for distribution to shareholders upon
liquidation of a Fund.
Note 3. Security Transactions
Realized gains (losses) are computed on the identified cost basis for both
financial reporting and Federal income tax purposes. At December 31, 1995,
Utilities Fund and International Fund for Growth had capital loss carryovers
of $4,660,804 and $957,124, respectively, which will expire in or before
2003, if not utilized.
The cost of investments purchased and proceeds from investments sold
excluding short-term investments for the six months ended June 30, 1996, for
the Funds were as follows:
Growth International
and Income Utilities Fund for
Fund Fund Growth
----------- ---------- -------------
Cost of investments
purchased ........... $17,046,370 $4,641,060 $26,691,435
Proceeds from
investments sold ... 11,917,866 5,462,507 23,819,769
Strategic
Income U.S. Fund
Fund for Growth Tiger Fund
---------- ----------- -----------
Cost of investments
purchased ........... $24,648,428 $17,747,453 $8,138,745
Proceeds from
investments sold ... 23,069,741 11,155,761 350,660
Note 4. Distributions to Shareholders
The Funds intend to distribute as dividends or capital gain distributions, at
least annually, substantially all of their net investment income and net
profits realized from the sale of investments. All dividends and
distributions are reinvested in additional shares of the Funds at net asset
value as of the record date of the distribution. Income and capital gain
distributions are determined in accordance with Federal Income tax
regulations, which may differ from generally accepted accounting principles.
The character of income and gains to be distributed are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. Reclassifications are made to the Fund's
capital accounts to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
Accordingly, amounts as of June 30, 1996 have been reclassified as follows:
51
<PAGE>
Growth Inter-
and national Strategic
Income Fund for Income Tiger
Fund Growth Fund Fund
-------- ---------- --------- --------
Accumulated net
investment
income .......... $ 6,686 $(924,007) $ 170,581 $(9,321)
Accumulated net
realized gain
(losses) on
investments .... (6,803) 924,007 (170,581) 9,321
Paid in capital ... 117 -- -- --
In all cases net assets were not affected by these changes.
Note 5. Fees and Compensation Paid to Affiliates
Management and Sub-Advisory Fees--The Funds have management and sub-advisory
agreements with the Manager, Colonial and Newport, respectively. For all the
Funds, the management fee to be paid to the Manager is computed daily and paid
monthly based upon the average daily net assets of the Funds at annual rates
as follows:
Annual Rate
as a Percent
of Average
Daily
Fund Net Assets
- ----------------------------------- -------------
Growth and Income Fund ............ 0.65 of 1%
Utilities Fund .................... 0.65 of 1%
International Fund for Growth .... 0.90 of 1%
Strategic Income Fund ............. 0.65 of 1%
U.S. Fund for Growth ............. 0.80 of 1%
Tiger Fund ........................ 0.90 of 1%
The Manager, out of the management fee it receives from the Funds, pays
Colonial and Newport a sub-advisory fee based upon the average daily net
assets of the Funds at annual rates as follows:
Annual Rate
as a Percent
of Average
Daily
Fund Net Assets
- ----------------------------------- -------------
Growth and Income Fund ............ 0.45 of 1%
Utilities Fund .................... 0.45 of 1%
International Fund for Growth .... 0.70 of 1%
Strategic Income Fund ............. 0.45 of 1%
U.S. Fund for Growth ............. 0.60 of 1%
Tiger Fund ........................ 0.70 of 1%
Bookkeeping Fee--Colonial provides bookkeeping and pricing services to each
Fund for $27,000 per year plus rates ranging from 0.035% of the Fund's average
daily net assets over $50 million.
Transfer Agent Fee--Each of the Funds paid Colonial Investment Services,
Inc., an affiliate of Colonial, for transfer agent services rendered at an
annual rate of $7,500.
Expense Reimbursement--Through April 30, 1997, the Manager has agreed to
reimburse all expenses, including management fees in excess of 1.00% of
average daily net assets per annum for all Funds other than International Fund
for Growth and Tiger Fund which will be reimbursed for all expenses exceeding
1.75% of average daily net assets and the Strategic Income Fund which will be
reimbursed for 0.80% of average daily net assets.
Note 6. Investment in Repurchase Agreements
Each Fund may enter into repurchase agreements and requires the seller of the
instrument to maintain on deposit with the Funds' custodian bank or in the
Federal Reserve Book-Entry System securities in the amount at all times equal
to or in excess of the value of the repurchase agreement plus accrued
interest. The Funds may experience costs and delays in liquidating the
collateral if the issuer defaults or enters bankruptcy.
Note 7. Fund Substitutions
The Trustees approved the substitution of shares of Colonial Keyport
Strategic Income Fund ("CKSIF") for the shares of Managed Income Fund ("MIF")
and the shares of the Mortgage Securities Income Fund ("MSIF") for the shares
of Colonial Keyport U.S. Government Fund ("CKUSGF") (formerly a series of the
Trust). MIF and MSIF are series funds of the SteinRoe Variable Investment
Trust. The substitutions occurred on October 13, 1995 as the net asset value
of shares totaling $37,220,278 in MIF were substituted for shares in CKSIF.
Additionally on this date, the net asset value of shares totaling $25,976,438
in CKUSGF were substituted for shares of MSIF.
52
<PAGE>
Adviser
Keyport Advisory Services Corp.
125 High Street
Boston, Massachusetts 02110
Sub-Investment Adviser and
Transfer and Dividend Disbursing Agent
Colonial Management Associates, Inc.
One Financial Center
Boston, Massachusetts 02111-2365
Sub-Investment Adviser
Newport Fund Management
580 California Street
Suite 1960
San Francisco, California 94104
Distributor
Keyport Financial Services Corp.
125 High Street
Boston, Massachusetts 02110
Client Services
Keyport Life Insurance Company
125 High Street
Boston, Massachusetts 02110
800-367-3653 (Press 3)
Custodian
Boston Safe Deposit & Trust Company
One Cabot Road
Medford, Massachusetts 02155
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
Legal Counsel
Bingham, Dana & Gould
150 Federal Street
Boston, Massachusetts 02110
The Trustees
John A. Bacon Jr.
Richard R. Christensen
Salvatore Macera
Dr. Thomas E. Stitzel
This report is authorized for use as sales literature only when accompanied
by a current prospectus of the Trust and a current prospectus for a variable
insurance product offered by Keyport Life Insurance Company, Keyport America
Life Insurance Company, or Liberty Life Assurance Company of Boston.
12/95 NIM 9.5m
