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. Stock Fund
Newport-Keyport Tiger Fund
SteinRoe Variable Investment Trust
Capital Appreciation Fund
Managed Growth Stock Fund
Managed Assets Fund
Mortgage Securities Income Fund
Cash Income Fund
Semi-Annual Report
June 30, 1997
<PAGE>
PRESIDENT'S LETTER
Keyport Variable Investment Trust
Stein Roe Variable Investment Trust
- --------------------------------------------------------------------------------
Dear Fellow Contract Owner:
I am pleased to present this annual report for the Keyport Variable
Investment Trust -- Growth and Income Fund, Utilities Fund, International Fund
for Growth, Strategic Income Fund, U.S. Stock Fund and Newport Tiger Fund --
and the SteinRoe Variable Investment Trust -- Cash Income Fund, Mortgage
Securities Income Fund, Managed Assets Fund, Managed Growth Stock Fund and
Capital Appreciation Fund. In the following pages, we will provide you with an
overview of the economic events that occurred over the past six months and
explain how we positioned the funds to respond to these events.
Stock Prices Continue Their Surge
Picking up right where it left off at the end of last year, the stock market
continued its upward climb during the first six months of 1997. Buoyed by
healthy economic growth, strong corporate profits and low inflation, the stock
market, as measured by the Dow Jones Industrial Average, hit record highs. Not
everyone was pleased with this scenario, however. In the first quarter,
stronger-than-expected economic growth and the rising ratio of stock prices to
corporate profits set off economic alarms among a growing number of market
watchers, most notably Federal Reserve Chairman Alan Greenspan. The Federal
Reserve has been vigilant in its efforts to slow economic growth and reduce
pressures that might trigger inflation and undermine the long expansion. As a
result, few were surprised when, in late March, the Federal Reserve raised the
federal funds rate by one-quarter percentage point to 5.50 percent.
Although the financial markets had expected this rate hike, they responded
erratically. When the dust finally cleared, the market had fallen nearly 4.3
percent, or 300 points -- at that time, the largest two-day point drop since
the October 1987 market crash. Nonetheless, the S&P 500 ended the first quarter
with a modest gain -- just 2 percent. Most mutual fund investors, however,
enjoyed much smaller gains, with small-cap funds faring worse. That's because,
for much of the past year, undue concern about slowing earnings momentum
prompted many investors to shy away from smaller, higher-growth stocks in favor
of the relative liquidity and predictability of large-cap stocks.
Stock gains in the second quarter of 1997 bounced back, with the S&P 500
returning 17 percent. While the strongest gains still belonged to larger-cap
stocks, the pendulum began to swing back for small-caps during the quarter.
After months of being passed over, small-cap stocks were attractively priced --
this, coupled with solid profits, sparked a rally among smaller-cap stocks in
the waning months of the reporting period.
Internationally, the U.S. dollar strengthened against local currencies, which
means U.S. investors received fewer dollars for their investments overseas.
These adverse currency movements overshadowed good news about interest rates
throughout the world. The Asian "Tiger" markets have offered highly variable
performance so far this year. Excluding China, performance has ranged from 20.7
percent for Taiwan to down 35.7 percent in Thailand.
<PAGE>
For stocks, our longer-term economic outlook remains favorable. There are few,
if any, factors on the horizon that we think might adversely affect the
constructive macroeconomic environment we currently are enjoying. What's more,
many companies continue to deliver the bottom line, in spite of rising labor
costs and waning pricing power. While we think earnings momentum may slow in the
months ahead, we believe the Federal Reserve's efforts to prolong the economic
expansion could help keep corporate earnings strong enough to keep the bear at
bay. Internationally, we believe the move toward a single currency in Europe
will be successful and has the potential to benefit economies around the world.
Bonds May Stage A Quiet Comeback
With bond investors spooked by strong economic reports and expectations of
climbing rates, bond funds have posted lackluster returns relative to the
domestic stock market. With the increase in interest rates and a strong
economy, bond investors have been well served by holding short-duration
portfolios. High-yield bonds and mortgage-backed securities also have provided
good relative returns.
Although most reports now suggest that inflation is under control, going
forward we think there may be limited upward pressure on short-term interest
rates as the economy continues to expand. We do not, however, expect these
rates to move sharply higher. That's because the "real" federal funds rate --
the federal funds rate minus the rate of inflation -- is already at a level
that would typically discourage economic growth. So while we think it's
possible the Federal Reserve may raise interest rates again, we think the
economy will be slow enough to quell any remaining inflationary pressures.
Longer term, we believe a solid case can be made for long-term bonds. First,
we expect continued low inflation. In addition, declining budget deficits, both
here and abroad, could help create a bullish backdrop for bonds. And finally,
as long as the Federal Reserve remains vigilant against the ghost of inflation
past, we think this backdrop will become even more powerful.
The Basics
Although no one can predict what might happen to the markets in the future,
we believe investors must understand the factors that move the markets, not
just to profit from them, but to gain the patience to ride out short-term
volatility. As always, no matter what direction you think the economy is
heading, it's important to remember the basics. Think long term and reevaluate
your investment portfolio from time to time to make sure it continues to match
your goals, risk tolerance and time horizon.
Sincerely,
/s/ Richard R. Christensen
Richard R. Christensen
President
August 19, 1997
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Portfolio Managers' Discussions:
Colonial-Keyport Growth and Income Fund ............ 1
Colonial-Keyport Utilities Fund ..................... 3
Colonial-Keyport International Fund for Growth ...... 5
Colonial-Keyport Strategic Income Fund ............... 7
Colonial-Keyport U.S. Stock Fund ..................... 9
Newport-Keyport Tiger Fund ........................... 11
Financial Statements:
Colonial-Keyport Growth and Income Fund ............ 13
Colonial-Keyport Utilities Fund ..................... 19
Colonial-Keyport International Fund for Growth ...... 24
Colonial-Keyport Strategic Income Fund ............... 31
Colonial-Keyport U.S. Stock Fund ..................... 38
Newport-Keyport Tiger Fund ........................... 44
Notes to Financial Statements ........................ 49
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport Growth and Income Fund seeks primarily income and
long-term capital growth and, secondarily, preservation of capital.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 7/1/93
Assuming reinvestment of all distributions
6-month total return ..................... 16.05%
Net asset value per share on 12/31/96 ...... $13.96
Net asset value per share on 6/30/97 ...... $16.20
Portfolio Manager's Discussion
Daniel Rie is lead Portfolio Manager of Colonial-Keyport Growth and Income
Fund. Dan is a Senior Vice President of Colonial Management Associates, Inc.
and Director of the Equity Investment Department.
What was the investment environment for stocks during the first half of 1997?
The environment for stocks continued to be quite favorable over the last
six months, with the end of the period marking the twelfth consecutive quarter
of increased stock value in the U.S. The Dow Jones Industrial and NASDAQ
averages have each set several new records during the period. The market
strength is drawn from continued growth in the U.S. economy, consistent
positive corporate earnings, and low inflation.
What is your current investment strategy?
Under our expanded strategy of value investing we search for stocks with
above-average earnings potential regardless of market sector. While in the past
we sought out traditional value stocks, like utilities and financial firms, we
are also investing in technology issues, basic industries and consumer stocks.
Our strategy is to sell a stock when it has met its value objective.
What is your market outlook for the Fund?
With continued economic growth and inflation under control, the Fund's
well-diversified portfolio of value stocks should continue to benefit the Fund
for the remainder of 1997. However, any investment carries risk and veteran
investors know that no upturn lasts forever. But, as always, the Fund's active
management is designed to help provide protection in the event of a market
decline.
1
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- --------------------------------------------------------------------------------
Colonial-Keyport Growth & Income Fund and S&P 500 Index
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Colonial-Keyport Growth & Income S&P 500
7/1/93 10000 10000
10070 9960
10530 10337
10560 10258
10680 10470
10410 10370
10501 10495
10855 10852
10703 10557
10338 10098
10420 10227
10338 10394
10115 10140
10399 10473
10784 10901
10582 10635
10572 10873
10217 10478
10421 10633
10536 10909
10941 11333
11180 11667
11460 12010
11793 12490
12115 12779
12458 13203
12645 13236
12874 13794
12884 13745
13476 14348
13551 14624
14078 15121
14239 15262
14228 15409
14476 15636
14747 16038
14715 16099
14026 15389
14467 15714
14952 16597
15275 17055
15974 18343
15976 17979
16502 19102
16685 19252
15907 18463
16616 19564
17681 20760
6/30/97 18540 21683
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
16.68% 16.05%
- --------------------------------------
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.
2
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport Utilities Fund seeks primarily current income and,
secondarily, long-term capital growth. The Fund pursues its objective by
investing primarily in common and preferred stocks issued by domestic utility
companies.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 7/1/93
Assuming reinvestment of all distributions
6-month total return ..................... 7.29%
Net asset value per share on 12/31/96 ...... $10.70
Net asset value per share on 6/30/97 ...... $11.48
Portfolio Manager's Discussion
John Lennon is lead Portfolio Manager of Colonial-Keyport Utilities Fund
and is a Vice President of Colonial Management Associates, Inc.
How have utility stocks performed during the first half of 1997?
Long-term Treasury rates influenced many investment markets during the
first six months of the year. They began at 6.64% in January and rose
throughout most of the period. After the Federal Reserve Board raised
short-term interest rates in late March, as a pre-emptive strike against
inflation, they reached a high of 7.17%, but then recovered to finish the
period at 6.78%. In this generally rising interest rate environment, utility
stock performance was flat as measured by the Dow Jones Utility Average.
What impact did the three utility sectors have on performance during this
period?
Based on total return, electric utilities rose slightly and natural gas
stocks advanced moderately. The performance of the telephone sector
significantly influenced the Fund's total return. These stocks received a
significant boost in the latter half of the period from two developments.
First, the Justice Department approved the merger of Bell Atlantic and NYNEX.
(Federal Communications Commission (FCC) approval is still pending.) Secondly,
FCC decisions eased investor concerns over access charges and universal service
reform.
How did the Fund perform during the six month period?
The telephone sector's strong performance paid off for Colonial-Keyport
Utilities Fund. The Fund holds significant positions in telephone
stocks--currently about 34% of the portfolio--and the top four holdings are
telecommunications companies. With their help, the Fund had a total return of
7.29% for the first six months of the year. This return beat that of the Dow
Jones Utility Average, which was flat for the same time period. The Dow Jones
Utility Average is an unmanaged index that tracks the performance of electric
and natural gas utility stocks and does not include telephone issues.
3
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- --------------------------------------------------------------------------------
Colonial-Keyport Utilities Fund, Dow Jones Utility Average and S&P 500 Index
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Colonial-Keyport Utilities S&P 500 Dow Jones Utility Avg.
7/1/93 10000 10000 10000
10110 10237 9960
10350 10556 10337
10260 10340 10258
10120 9986 10470
9670 9405 10370
9830 9631 10495
9667 9508 10852
9218 8911 10557
8954 8369 10098
9147 8517 10227
8760 8011 10394
8577 7686 10140
8882 8102 10473
8913 8286 10901
8699 8010 10635
8811 8023 10873
8770 8008 10478
8820 8158 10633
9353 8697 10909
9418 8793 11333
9364 8566 11667
9559 8902 12010
9994 9514 12490
10060 9377 12779
10136 9483 13203
10375 9461 13236
10930 10081 13794
11180 10116 13745
11387 10247 14348
11920 10768 14624
12148 11053 15121
11864 10561 15262
11750 10305 15409
11659 10202 15636
11682 10256 16038
12125 10831 16099
11682 10110 15389
11739 10627 15714
11784 10807 16597
12238 11325 17055
12624 11835 18343
12699 11747 17979
12984 11766 19102
13150 11564 19252
12699 11181 18463
12794 11097 19564
13233 11454 20760
6/30/97 13625 11743 21683
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
8.03% 7.29%
- --------------------------------------
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.
4
<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 capital
growth by investing primarily in non-U.S. equity securities.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 5/2/94
Assuming reinvestment of all distributions
6-month total return ..................... 14.29%
Net asset value per share on 12/31/96 ...... $1.96
Net asset value per share on 6/30/97 ...... $2.24
Portfolio Manager's Discussion
Bruno Bertocci and David Harris are Portfolio Co-Managers of
Colonial-Keyport International Fund for Growth and Vice Presidents of Colonial
Management Associates, Inc. They are also Investment Management Principals with
Stein Roe Global Capital Management, a division of Stein Roe & Farnham, Inc.
What was the investment environment for international stocks during the first
half of 1997?
International stocks had strong returns for the first half of 1997. Lower
interest rates in Europe are stimulating economies there, and in Japan the
market is strong amid signs of improved business conditions. Companies in
Southeast Asia and Latin America are poised for growth as residents in those
regions experience a rising standard of living by purchasing more locally
produced goods and services.
How did the Fund perform in the first half of 1997?
The Fund generated a total return of 14.29% for the first six months of
the year, exceeding the return of 11.21% posted by the Morgan Stanley Capital
International Europe, Australia, Far East (MSCI EAFE) Index for the same time
period.
What types of investments did you favor?
The Fund's investment strategy is to focus on undervalued stocks in
developed and developing markets. In the developed countries of Europe, we
currently hold the stocks of several companies that are restructuring their
businesses to become more competitive. In Japan, we are focused on the
export-oriented and retail sectors. In the developing markets of Asia, we favor
property and other infrastructure-related companies, as well as banks and
retailers. In Latin America, we are primarily focused on telecommunications and
consumer product companies.
What is your market outlook?
We think the recent strong performance in the international markets
suggests that investors are beginning to realize the attractive valuation of
internal stocks and their prospective return potential. We believe that the
Fund is well positioned for the future with a broad mix of attractively valued
securities.
5
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth
- --------------------------------------------------------------------------------
Colonial-Keyport International Fund for Growth
and Morgan Stanley Capital International EAFE Index
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Colonial-Keyport International
Fund for Growth MSCI EAFE
5/1/94 10000 10000
9900 9943
9950 10180
10250 10421
9950 10093
10000 10429
9550 9928
9400 9990
8850 9606
8700 9579
8850 10176
9100 10559
9100 10433
9050 10250
9550 10888
9550 10473
9700 10677
9550 10390
9700 10679
9950 11110
9899 11155
9899 11193
10101 11431
10657 11763
10556 11546
10606 11611
10200 11272
10354 11297
10455 11597
10202 11478
10606 11935
10508 11781
10562 11369
10669 11555
10669 11597
10615 11658
11420 12417
6/30/97 12010 13102
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
5.95% 14.29%
- --------------------------------------
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.
6
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
Dear Contract Holder:
Colonial-Keyport Strategic Income Fund seeks as high a level of current
income, as is consistent with prudent risk and maximizing total return, by
diversifying investments in U.S. and foreign government and high yield, high
risk corporate debt securities.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 7/5/94
Assuming reinvestment of all distributions
6-month total return ..................... 3.35%
Net asset value per share on 12/31/96 ...... $11.04
Net asset value per share on 6/30/97 ...... $11.41
Portfolio Manager's Discussion
Carl Ericson is portfolio manager of Colonial-Keyport Strategic Income
Fund. Mr. Ericson is a 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 1997?
The Fund invests in three major bond markets--high yield corporate bonds,
foreign government bonds and U.S. government bonds. This diversification allows
investors to benefit from the unique characteristics of each market, while
reducing the effects of negative performance in a single market. At the end of
the period, 40% of the Fund's portfolio was invested in high yield corporate
bonds; 27% of the portfolio was invested in bonds issued by foreign
governments, primarily in European securities; and 25% was invested in U.S.
Treasury bonds. This allowed the Fund to benefit from the strong performance of
the U.S. economy. The U.S. government market was especially volatile because of
concerns that the growing economy would bring about a return of inflation. In
March, the Federal Reserve Board raised short-term interest rates as a
pre-emptive strike against inflation, lowering values of U.S. government bonds.
How did the Fund perform over the last six months?
The Fund's total return was 3.35% for the period. This was greater than
that of the Lehman Brothers Government/Corporate Bond Index, which posted a
total return of 2.74%. This is an unmanaged index that tracks the performance
of the U.S. Bond market. The Fund was able to outperform the Index due to the
Fund's diversification and the ability to invest in sectors less affected by
U.S. interest rates, such as domestic high yield corporate bonds and European
government securities.
What is your market outlook?
The U.S. economy should continue to grow for the rest of 1997, although
probably at a steadier rate than during the last six months. While this will
benefit high yield corporate bonds, we expect the Federal Reserve Board to
raise interest rates at least once more this year. As a result, we believe
volatility will continue in the U.S. government bond market. In the foreign
bond market, conditions should improve as progress continues toward a European
Monetary Union.
7
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
Colonial-Keyport Strategic Income Fund
and Lehman Brothers Government/Corporate Bond Index*
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Colonial-Keyport Lehman Government/Corporate
Strategic Income Bond Index
7/31/94 10000 10000
10049 10004
10009 9853
10049 9842
9940 9824
10029 9889
10162 10079
10408 10312
10592 10382
10787 10526
11084 10968
11135 11055
11238 11013
11238 11154
11432 11267
11586 11432
11699 11620
11864 11792
12037 11865
11940 11613
11886 11516
11940 11437
11951 11418
12026 11570
12124 11597
12264 11568
12512 11774
12707 12049
13009 12271
13030 12134
12995 12148
13089 12174
12901 12029
13066 12205
13278 12319
6/30/97 13468 12467
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
10.76% 3.35%
- --------------------------------------
*The Lehman Brothers Government/Corporate Bond Index is an unmanaged index that
tracks the performance of a selection of U.S. government agency, Treasury and
investment-grade corporate bonds. The Lehman Mutual Fund General Bond Index
(used previously to track performance) ceased to exist in May 1995, the Lehman
Brothers Government/Corporate Bond Index most closely parallels that Index's
performance. Unlike mutual funds, indexes are not investments, do not incur fees
or expenses and it is not possible to invest in an index.
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.
8
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Colonial-Keyport U.S. Stock Fund seeks growth over time exceeding the S&P
500 Index's performance.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 7/5/94
Assuming reinvestment of all distributions
6-month total return ..................... 18.99%
Net asset value per share on 12/31/96 ...... $14.22
Net asset value per share on 6/30/97 ...... $16.92
Portfolio Manager's Discussion
Mark Stoeckle is Portfolio Manager of Colonial-Keyport U.S. Stock Fund.
Mr. Stoeckle is a Vice President of Colonial Management Associates, Inc.
What was your investment strategy during the first half of 1997?
During the period, the trend of large-cap stocks dominating the bull
market continued. We were somewhat surprised at the ability of the large-cap
stocks to sustain their impressive earnings growth. First, they compete on a
global scale with much of their profits coming from overseas, so they are not
intrinsically tied to only the U.S. economy. Second, the large companies have
been highly proficient at streamlining their operations--cutting out the waste
and boosting efficiency. Finally, the widespread use of technology has created
additional economies and allowed the big companies to manage their businesses
in a more cost effective and productive manner. We expect these factors to
continue to favorably impact the bottom line of large-cap companies for the
remainder of 1997, and possibly beyond.
What sector had an impact on Fund performance?
Our holdings in the health care sector helped the Fund's performance.
Specifically, Merck and Bristol-Myers Squibb significantly outperformed the S&P
500 for the first two quarters of the year, rising 33% and 50% respectively.
This was due in part to quarterly earnings that were higher than expected.
What is your market outlook?
Large-cap stocks should continue to perform well over the next six months,
as we expect both interest rates and inflation to remain low. Blue chip,
multinational companies should continue to benefit from the strengthening
global economy. However, we anticipate some slowing in the large-cap market.
The strong returns from the first half of 1997 may make it difficult for the
market to sustain its current rate of growth.
9
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund
- --------------------------------------------------------------------------------
Colonial-Keyport U.S. Stock Fund and S&P 500 Index
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Colonial-Keyport U.S. Stock Fund S&P 500
7/31/94 10000 10000
10399 10409
10194 10155
10360 10383
9990 10005
10175 10153
10432 10416
10848 10822
11136 11140
11363 11468
11770 11926
12027 12202
12443 12607
12394 12638
12810 13171
12760 13124
13246 13700
13196 13964
13549 14439
13816 14573
13890 14713
14403 14930
14744 15314
14424 15373
13730 14694
14189 15004
14883 15848
15257 16285
16346 17515
16078 17168
17254 18240
17243 18383
16553 17629
17435 18681
18430 19823
6/30/97 19132 20704
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
25.29% 18.99%
- --------------------------------------
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.
10
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Newport-Keyport Tiger Fund seeks long-term capital growth by investing
primarily in equity securities of companies located in the nine "Tigers" of
Asia--Hong Kong, China, Singapore, Malaysia, Thailand, Indonesia, the
Philippines, South Korea and Taiwan.
Fund Performance (as of June 30, 1997)
Inception Date .............................. 5/1/95
Assuming reinvestment of all distributions
6-month total return ..................... 4.76%
Net asset value per share on 12/31/96 ...... $2.52
Net asset value per share on 6/30/97 ...... $2.64
Portfolio Manager's Discussion
Jack Mussey is President and Chief Executive Officer of Newport Fund
Management, Inc. and Portfolio Co-Manager of Newport-Keyport Tiger Fund. Tim
Tuttle is Managing Director of Newport Fund Management and Portfolio Co-Manager
of Newport-Keyport Tiger Fund. While the Tiger markets are subject to risks not
associated with more developed countries, the Fund's management team has more
than 20 years of investment experience in the region.
What was the Fund's strategy during the first half of the year?
As in the past, the Fund maintained its focus on long-term investments in
well-managed, high-quality companies. Over the last six months, we increased
investments in Hong Kong as it became evident that the transfer of Hong Kong to
Chinese sovereignty could go smoothly. The Fund also reduced its holdings in
Thailand, as the economy weakened due to plans in both the banking and property
sectors.
What investments contributed to performance?
Investments in Hong Kong were the biggest contributors to the Fund's total
performance. For example, Hong Kong Gas and Electric stocks posted a strong 25
to 30 percent increase in second quarter earnings after performing poorly in
the first three months of the year. The Fund also benefited from its
investments in so-called "red chip" stocks, that are Hong Kong listed
subsidiaries of Chinese companies. One such "red chip" we have in our portfolio
is Citic Pacific. This well-managed power company has maintained an annual
earnings growth rate of 30% over the past 5 years.
What is your market outlook?
We remain optimistic about the long-term growth potential in the Tiger
countries. Hong Kong, in particular, should continue to flourish as mainland
China provides money for infrastructure investment and the economic integration
between two countries. China's economy is continuing to grow at a 9% annual
rate and Singapore is rebounding from an economic downturn. Investors in the
Newport-Keyport Tiger Fund should see the benefits of this dynamic growth as
the region continues to attract investment capital from around the world.
11
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- --------------------------------------------------------------------------------
Newport-Keyport Tiger Fund and
Morgan Stanley Capital International EAFE GDP
Performance of a Hypothetical $10,000 Investment
June 30, 1997
[LINE CHART]***************************************************************
Newport-Keyport Tiger Fund MSCI EAFE GDP
5/1/95 10000 10000
11100 9903
10900 9792
11200 10043
10850 9997
11050 10115
11000 9822
11050 10029
11500 10458
12660 10591
12559 10623
12559 10764
12509 11099
12458 10935
12206 11021
11550 10704
11954 10698
12307 10993
12206 10872
12811 11337
12849 11256
12747 11044
12747 11121
11982 11333
11778 11305
6/30/97 13462 12603
***************************************************************************
- --------------------------------------
Average Annual Return on June 30, 1997
Since Inception 6 Month
14.68% 4.76%
- --------------------------------------
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.
12
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------- -----------
COMMON STOCKS--86.8%
Construction--3.5%
Building Construction--3.5%
Centex Corp. ........................ 24,600 $ 999,375
Hollandsche Beton Groep N.V. ........... Ne 6,850 1,561,400
Koninklijke Volker Stevin N.V. ......... Ne 12,000 336,643
Lennar Corp. ........................ 5,300 169,269
-----------
3,066,687
-----------
Special Trade Contractors--0.0%
Ericsson SPA ........................ It 3,000 51,838
-----------
Finance, Insurance & Real Estate--26.7%
Depository Institutions--10.2%
Astoria Financial Corp. ............... 62,000 2,945,000
Bank of Montreal ..................... Ca 17,300 675,532
Commerce Bancshares, Inc. ............. 1,365 61,766
Den Danske Bank ..................... De 3,000 291,797
Greenpoint Financial Corp. ............ 42,500 2,828,906
Jyske Bank ........................... De 3,000 258,371
National Australia Bank Ltd. .......... Au 38,800 554,787
Star Banc Corp. ..................... 8,700 367,575
Toronto Dominion Bank ............... Ca 34,100 1,011,624
-----------
8,995,358
-----------
Insurance Carriers--10.2%
Allstate Corp. ........................ 4,100 299,300
American Bankers Insurance
Group, Inc. ........................ 25,200 1,593,900
CIGNA Corp. ........................... 18,500 3,283,750
CMAC Investment Corp. ............... 5,000 237,500
Loews Corp. ........................... 12,700 1,271,588
Mercury General Corp. ............... 11,800 858,450
Old Republic International
Corp. .............................. 25,400 769,937
Sunamerica, Inc. ..................... 14,400 702,000
-----------
9,016,425
-----------
Security Brokers & Dealers--6.3%
A.G. Edwards, Inc. .................. 79,200 3,385,800
Alex Brown, Inc. ..................... 27,000 1,906,875
John Nuveen & Co., Inc. ............... 9,000 281,250
-----------
5,573,925
-----------
Manufacturing--38.8%
Apparel--0.2%
Gamma Holding N.V. .................. Ne 3,000 161,143
-----------
Chemicals & Allied Products--7.3%
Akzo Nobel N.V. ..................... Ne 14,074 972,865
Bristol-Myers Squibb Co. ............ 22,800 1,846,800
Johnson & Johnson ..................... 24,900 1,602,938
Merck & Co., Inc. ..................... 16,200 1,676,700
Norsk Hydro A.S. ..................... No 7,100 384,731
Pharmacia & Upjohn, Inc. ............ 20 695
-----------
6,484,729
-----------
Electronic & Electrical Equipment--0.2%
SCI Systems, Inc. (a) ............... 2,300 $ 146,625
-----------
Fabricated Metal--1.6%
Harsco Corp. ........................ 35,000 1,417,500
-----------
Furniture & Fixtures--0.3%
Johnson Controls, Inc. ............... 6,000 247,875
-----------
Machinery & Computer Equipment--6.5%
Cummins Engine Co., Inc. ............ 27,500 1,940,469
Sun Microsystems, Inc. (a) ............ 82,800 3,081,713
Tecumseh Products Co.,
Class A ........................... 6,100 365,238
Tyco International Ltd. ............... 4,900 340,856
-----------
5,728,276
-----------
Measuring & Analyzing Instruments--0.8%
Becton, Dickinson & Co. ............... 8,200 415,125
Hologic, Inc. ........................ 900 23,963
Raytheon Co. ........................ 4,600 235,463
-----------
674,551
-----------
Miscellaneous Manufacturing--1.5%
Callaway Golf Co. ..................... 36,200 1,285,100
-----------
Petroleum Refining--9.6%
Amerada Hess Corp. .................. 26,600 1,477,963
Exxon Corp. ........................... 8,800 541,200
Kerr-McGee Corp. ..................... 21,200 1,343,550
Mobil Corp. ........................... 16,200 1,131,975
Phillips Petroleum Co. ............... 60,100 2,629,375
Sun Co., Inc. ........................ 11,700 362,700
USX-Marathon Group .................. 35,800 1,033,725
-----------
8,520,488
-----------
Primary Metal--1.0%
Asarco, Inc. ........................ 29,700 909,562
-----------
Primary Smelting--1.7%
Phelps Dodge Corp. .................. 17,400 1,482,262
-----------
Printing & Publishing--0.2%
Moore Corp. Ltd. ..................... 8,200 161,438
-----------
Rubber & Plastic--2.2%
Goodyear Tire & Rubber Co. 31,300 1,981,681
-----------
Tobacco Products--2.6%
Fortune Brands, Inc. .................. 41,100 1,533,544
Gallaher Group PLC (a) ............... UK 41,100 757,781
-----------
2,291,325
-----------
Transportation Equipment--3.1%
Equipements et Composants
pour l'Industrie Automobile ........ Fr 2,050 312,353
Fleetwood Enterprises, Inc. ............ 13,900 413,525
General Dynamics Corp. ............... 7,200 540,000
Thiokol Corp. ........................ 15,900 1,113,000
TRW, Inc. .............................. 6,400 363,600
-----------
2,742,478
-----------
See Notes to Investment Portfolio.
13
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- -------- ------------
Mining & Energy--0.3%
Metal Mining
Cleveland-Cliffs, Inc. ...... 6,700 $ 273,025
------------
Retail Trade--3.1%
Apparel & Accessory Stores--0.3%
Koninklijke Bijenkorf Beheer Ne 3,000 209,714
Macintosh N.V. ............ Ne 3,000 59,722
------------
269,436
------------
Food Stores--1.4%
Vendex International N.V. ... Ne 22,700 1,242,426
------------
General Merchandise Stores--0.7%
Meyer (Fred), Inc. (a) ...... 11,300 584,069
------------
Miscellaneous Retail--0.7%
Walgreens Co. ............... 12,200 654,225
------------
Services--8.3%
Business Services--1.3%
Omnicom Group, Inc. ......... 19,400 1,195,525
------------
Computer Related Services--1.2%
Cadence Design Systems,
Inc. (a) ............... 16,650 557,775
HBO & Co. .................. 7,200 495,900
------------
1,053,675
------------
Engineering, Accounting, Research &
Management--1.4%
Corrections Corp. of
America (a) ............ 15,600 620,100
International-Muller N.V. ... Ne 18,400 579,889
------------
1,199,989
------------
Health Services--4.4%
Tenet Healthcare Corp. (a) ... 54,700 1,617,069
Universal Health Services,
Inc., Class B (a) ...... 58,500 2,252,250
------------
3,869,319
------------
Transportation, Communication, Electric, Gas &
Sanitary Services--5.4%
Communications--2.0%
Ameritech Corp. ............ 19,700 1,338,368
BellSouth Corp. ............ 9,000 417,375
------------
1,755,743
------------
Electric, Gas & Sanitary Services--1.3%
Gas y Electricidad SA ...... Sp 4,550 243,962
Teco Energy, Inc. ......... 14,300 365,544
TransCanada PipeLines ...... Ca 26,300 529,287
------------
1,138,793
------------
Electric Services--1.4%
Boston Edison Co. ......... 19,000 $ 501,125
DTE Energy Co. ............ 3,100 85,638
NIPSCO Industries, Inc. ... 16,400 677,525
Portland General Corp. ...... 400 15,875
------------
1,280,163
------------
Sanitary Services--0.7%
Severn Trent Water PLC ...... UK 25,000 323,527
United Utilities PLC ...... UK 25,100 275,942
------------
599,469
------------
Wholesale Trade--0.7%
Durable Goods
Beers N.V. .................. Ne 7,235 248,644
Marshall Industries (a) ... 10,300 383,675
------------
632,319
------------
Total Common Stocks
(Cost of $50,879,818) ........................ 76,687,442
------------
Par
---
U.S. GOVERNMENT & AGENCY OBLIGATIONS--5.4%
U.S. Government Agency Obligations--3.2%
Federal National Mortgage
Association, 6.500% 2008-2009 ...... $2,899,969 2,856,470
-----------
U.S. Government Bonds--2.2%
U.S. Treasury Notes, 7.875%
04/15/98 ........................... 1,895,000 1,925,794
-----------
Total U.S. Government Obligations
(Cost of $4,897,888) ........................... 4,782,264
-----------
Total Investments--92.2%
(Cost of $55,777,706) (b) ........................ 81,469,706
-----------
SHORT-TERM OBLIGATIONS--7.7%
Federal Home Loan Mortgage Corp.,
6.000% (c) 07/01/97 ................ 6,794,000 6,792,868
------------
Other Assets & Liabilities, Net--0.1% 107,429
------------
Net Assets--100.0% ................................ $88,370,003
============
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, 1997 is
as follows:
Gross unrealized appreciation $26,118,799
Gross unrealized depreciation (426,799)
-----------
Net unrealized appreciation $25,692,000
===========
(c) Rate represents yield at date of purchase.
See Notes to Investment Portfolio.
14
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Summary of Securities by Country
% of Total
Country Securities
Summary of Securities by Country Abbrev. Value at Value
- -------------------------------- --------- ------------- -----------
United States ....... $70,425,728 86.4%
Netherlands .......... Ne 5,372,446 6.6
Canada ................ Ca 2,216,443 2.7
United Kingdom ....... UK 1,357,250 1.6
Australia ............. Au 554,787 0.7
Denmark ............. De 550,168 0.7
Norway ................ No 384,731 0.5
France ................ Fr 312,353 0.4
Spain ................ Sp 243,962 0.3
Italy ................ It 51,838 0.1
------------ ------
$81,469,706 100.0%
============ ======
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
See Notes to Financial Statements.
15
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund /
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $55,777,706) ..................... $81,469,706
Short-term obligations ......................................................... 6,792,868
Cash (including foreign currencies) ............................................. 2,933
Dividends and interest receivable ............................................. 167,543
Receivable for fund shares sold ................................................ 135,370
Unamortized organization expenses ............................................. 5,369
Other assets .................................................................. 3,411
------------
Total assets .................................................................. 88,577,200
------------
Liabilities:
Payable for fund shares repurchased ............................................. 141,031
Management fee payable ......................................................... 45,894
Bookkeeping fee payable ...................................................... 3,452
Transfer agent fee payable ................................................... 625
Accrued expenses payable ...................................................... 16,195
------------
Total liabilities ............................................................ 207,197
------------
Net assets ..................................................................... $88,370,003
============
Net assets represented by:
Paid-in capital ............................................................... $55,940,805
Accumulated undistributed net investment income .............................. 829,066
Accumulated net realized gains on investments and foreign currency transactions 5,908,848
Net unrealized appreciation on investments and foreign currency transactions 25,691,284
------------
Total net assets applicable to shares of beneficial interest outstanding ...... $88,370,003
============
Shares of beneficial interest outstanding .................................... 5,455,315
============
Net asset value per share ...................................................... $ 16.20
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $30,879)...... $ 864,822
Interest income ............................................................... 311,386
------------
Total investment income ...................................................... 1,176,208
------------
Expenses:
Management fee ............................................................... 282,267
Bookkeeping fee ............................................................... 21,068
Transfer agent fee ............................................................ 3,750
Audit fee ..................................................................... 10,232
Printing expense ............................................................... 6,370
Trustees' expense ............................................................ 4,192
Custodian fee .................................................................. 4,107
Legal fee ..................................................................... 1,003
Amortization of organization expense .......................................... 2,663
Miscellaneous expense ......................................................... 6,676
------------
Total expenses ............................................................... 342,328
------------
Net investment income ......................................................... 833,880
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized gains on investments ............................................. 5,911,239
Net realized losses on foreign currency transactions ........................... (3,645)
Change in unrealized appreciation on investments and foreign currency transactions 6,025,173
------------
Net increase in net assets resulting from operations ........................... $12,766,647
============
</TABLE>
See Notes to Financial Statements.
16
<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,
1997 1996
------------------ --------------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 833,880 $ 1,667,134
Net realized gains on investments .......................................... 5,911,239 3,883,301
Net realized gains (losses) on foreign currency transactions ............... (3,645) 10,848
Unrealized appreciation on investments and foreign currency transactions ... 6,025,173 8,029,922
------------- ------------
Net increase in net assets resulting from operations ........................ 12,766,647 13,591,205
------------- ------------
Distributions declared from:
Net investment income ...................................................... -- (1,744,707)
Net realized gains ......................................................... -- (3,888,095)
------------- ------------
Total distributions ......................................................... -- (5,632,802)
------------- ------------
Fund share transactions:
Proceeds from fund shares sold ............................................. 12,909,493 18,289,038
Cost of fund shares repurchased ............................................. (30,552,977) (9,703,359)
Distributions reinvested ................................................... -- 5,632,802
------------- ------------
Net increase (decrease) in net assets resulting from fund share transactions (17,643,484) 14,218,481
------------- ------------
Total increase (decrease) in net assets .................................... (4,876,837) 22,176,884
Net assets:
Beginning of period ......................................................... 93,246,840 71,069,956
------------- ------------
End of period ............................................................... $ 88,370,003 $93,246,840
============= ============
Accumulated undistributed net investment income included in ending net assets $ 829,066 $ 11,633
============= ============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................... 870,236 1,353,533
Shares redeemed ............................................................ (2,093,633) (716,029)
Distributions reinvested ................................................... -- 402,075
------------- ------------
Net increase (decrease) ...................................................... (1,223,397) 1,039,579
============= ============
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Colonial-Keyport Growth and Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended
June 30,
-------------------
1997
-------------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ..................... $ 13.96
--------
Net investment income (a) ................................. 0.14
Net realized and unrealized gains (losses) on
investments and foreign currency transactions (a) ...... 2.10
--------
Total from investment operations ........................ 2.24
--------
Less distributions from:
Dividends from net investment income ..................... --
Dividends from net realized gains on investments ......... --
--------
Total distributions ....................................... --
========
Net asset value, end of period ........................... $ 16.20
========
Total return:
Total investment return (b) ........................... 16.05***
Ratios/supplemental data:
Net assets, end of period (000) ........................... $88,370
Ratio of net expenses to average net assets ............... 0.78%*(e)
Ratio of net investment income to average net assets ...... 1.91%*(e)
Portfolio turnover ratio ................................. 13%**
Average commission rate (f) .............................. $0.0492
<CAPTION>
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 (a) ................................. 0.28 0.29 0.26 0.09
Net realized and unrealized gains (losses) on
investments and foreign currency transactions (a) ...... 1.98 2.72 (0.34) 0.41
--------- ------- --------- -------
Total from investment operations ........................ 2.26 3.01 (0.08) 0.50
--------- ------- --------- -------
Less distributions from:
Dividends from net investment income ..................... (0.28) (0.25) (0.25) (0.11)
Dividends from net realized gains on investments ........ (0.62) (0.19) -- (0.03)
--------- ------- --------- -------
Total distributions ....................................... (0.90) (0.44) (0.25) (0.14)
========= ======= ========= =======
Net asset value, end of period ........................... $ 13.96 $ 12.60 $ 10.03 $ 10.36
========= ======= ========= =======
Total return:
Total investment return (b) ........................... 17.89% 30.03% (0.76)% 5.01%**(c)
Ratios/supplemental data:
Net assets, end of period (000) ........................... $93,247 $71,070 $48,052 $29,298
Ratio of net expenses to average net assets ............... 0.79%(e) 0.81%(e) 0.87% 1.00%*(d)
Ratio of net investment income to average net assets ...... 2.02%(e) 2.51%(e) 2.82% 2.32%*(c)
Portfolio turnover ratio ................................. 24% 79% 55% 8%**
Average commission rate (f) .............................. $0.0383 -- -- --
</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) 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.
(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.
18
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
-------- -------------
COMMON STOCKS & CONVERTIBLES--83.5%
Transportation, Communications, Electric,
Gas & Sanitary Services--83.5%
Communications--28.1%
360 Communications Co. (a) .................. 1,500 $ 25,500
Ameritech Corp. .............................. 32,400 2,201,175
Bell Atlantic Corp. ........................... 13,000 986,375
BellSouth Corp. .............................. 42,000 1,947,750
Citizens Utilities Co., 5%
Convertible Preferred ..................... 5,000 218,750
Frontier Corp. .............................. 18,400 366,850
GTE Corp. .................................... 37,000 1,623,375
Lucent Technologies, Inc. ..................... 4,000 288,250
NYNEX Corp. ................................. 36,500 2,103,313
SBC Communications, Inc. ..................... 37,511 2,320,993
US West Communications Group . 27,500 1,036,406
US West Media Group (a) ..................... 8,000 162,000
------------
13,280,737
------------
Electric, Gas & Sanitary Services--1.5%
CMS Energy Corp., Class G ..................... 20,000 397,500
North Carolina Natural Gas Corp. 10,000 333,750
------------
731,250
------------
Electric Services--41.4%
American Electric Power Co., Inc. 19,500 817,781
Boston Edison Co. ........................... 10,000 263,750
CMS Energy Corp. .............................. 25,000 884,375
Carolina Power & Light Co. .................. 17,000 609,875
Cincinnati Gas & Electric Co. ............... 43,500 1,514,344
DPL, Inc. .................................... 57,000 1,403,625
DTE Energy Co. .............................. 25,000 690,625
Duke Power Co. .............................. 17,233 826,088
Eastern Utilities Associates .................. 11,300 206,225
Edison International ........................ 35,000 870,625
Entergy Corp. ................................. 6,200 169,725
FPL Group, Inc. .............................. 34,000 1,566,125
GPU, Inc. .................................... 36,000 1,291,499
Houston Industries, Inc. ..................... 29,100 623,831
IES Industries, Inc. ........................ 11,100 327,450
Kansas City Power & Light Co. ............... 22,500 641,250
MidAmerican Energy Co. ........................ 20,000 346,250
Ohio Edison Co. .............................. 11,700 255,206
PacifiCorp .................................... 52,000 1,140,750
Pinnacle West Capital Corp. .................. 15,000 450,938
Portland General Corp. ........................ 19,000 754,063
Public Service Co. of Colorado ............... 23,500 975,250
Public Service Enterprise Group,
Inc. ....................................... 7,500 187,500
Puget Sound Power & Light Co. ............... 2,700 71,550
Rochester Gas & Electric Corp. ............... 1,600 33,700
Scana Corp. ................................. 10,000 248,125
Sierra Pacific Resources ..................... 15,000 $ 480,000
Southern Co. ................................. 34,000 743,750
Texas Utilities Co. ........................... 30,000 1,033,125
Utilicorp United, Inc. ........................ 5,200 151,450
------------
19,578,850
------------
Gas Services--12.5%
MCN Energy Group, Inc.,
PRIDES, 8.75% .............................. 40,000 1,225,000
MDU Resources Group, Inc. ..................... 7,500 180,000
ONEOK Inc. .................................... 30,000 965,625
Pacific Enterprises ........................... 15,500 521,188
Peoples Energy Corp. ........................ 6,000 224,625
Public Service Co. of
North Carolina ........................... 20,000 383,750
UGI Corp. .................................... 19,000 420,375
Williams Companies, Inc. ..................... 38,500 1,684,375
Williams Cos., Inc., $3.50
Convertible Preferred ..................... 3,000 304,575
------------
5,909,513
------------
Total Common Stocks & Convertibles
(Cost of $30,710,842) ............................... 39,500,350
------------
PREFERRED STOCKS--8.2%
Transportation, Communications, Electric, Gas &
Sanitary Service--8.2%
Electric Services--6.9%
Arizona Public Servic Co.,
$1.8125, Series W ........................... 12,000 307,500
Baltimore Gas & Electric Co.,
6.75%, Series 1987 ........................ 1,451 142,470
Commonwealth Edison Co., 7.24% 5,500 513,906
Montana Power Co., $6.875 ..................... 5,000 515,750
Northern Indiana Public Service
Co., 7.44% ................................. 1,000 99,710
Peco Energy Co., 7.48% ........................ 2,000 217,124
PSI Energy, Inc.:
6.875% .................................... 4,000 409,124
7.44% .................................... 13,000 331,500
TU Electric Capital, TOPRS, 8.25% 28,000 710,500
------------
3,247,584
------------
Gas Services--1.3%
Enron Corp., MIPS, 8.00% ..................... 20,000 502,500
MCN Energy Group, Inc.,
PRIDES, 8.75% .............................. 2,500 69,688
Pacific Enterprises, $4.50 ..................... 550 37,950
------------
610,138
------------
Total Preferred Stocks
(Cost of $4,234,448) ........................ 3,857,722
------------
Total Investments
(Cost of $34,945,290) ..................... 43,358,072
------------
See Notes to Investment Portfolio.
19
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
----------- ------------
SHORT-TERM OBLIGATIONS--8.0%
Federal Home Loan Mortgage
Corp., 6.000% (c) 07/01/97 ...... 3,780,000 $ 3,779,370
------------
Other Assets & Liabilities, Net--0.3% ......... 158,076
------------
Net Assets--100% .............................. $47,295,518
============
Notes to investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is $34,947,633. Gross unrealized
appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation $9,183,424
Gross unrealized depreciation (772,985)
----------
Net unrealized appreciation $8,410,439
==========
(c) Rate represents yield at date of purchase.
Acronym Name
------- ----
TOPRS Trust Originated Preferred
Redeemable Securities
MIPS Monthly Income Preferred Stock
PRIDES Preferred Redeemable Increased
Dividend Equity Securities
See Notes to Financial Statements.
20
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $34,945,290) ............... $ 43,358,072
Short-term obligations ................................................... 3,779,370
Cash .................................................................. 1,287
Receivable for fund shares sold ....................................... 126,514
Dividends and interest receivable ....................................... 119,407
Unamortized organization expenses ....................................... 5,511
Other assets ............................................................ 2,792
------------
Total assets ......................................................... 47,392,953
------------
Liabilities:
Payable for fund shares repurchased .................................... 64,676
Management fee payable ................................................ 24,951
Bookkeeping fee payable ................................................ 2,250
Transfer agent fee payable ............................................. 625
Accrued expenses payable ................................................ 4,933
------------
Total liabilities ................................................... 97,435
------------
Net assets ............................................................ $ 47,295,518
============
Net assets represented by:
Paid-in capital ...................................................... $ 42,026,713
Accumulated undistributed net investment income ........................ 936,916
Accumulated net realized losses on investments ........................ (4,080,262)
Net unrealized appreciation on investments ........................... 8,412,151
------------
Total net assets applicable to shares of beneficial interest outstanding $ 47,295,518
============
Shares of beneficial interest outstanding .............................. 4,120,344
============
Net asset value per share ............................................. $ 11.48
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Investment income:
Dividends ............................................................. $ 1,069,191
Interest income ....................................................... 66,932
------------
Total investment income .............................................. 1,136,123
------------
Expenses:
Management fee ....................................................... 150,305
Bookkeeping fee ....................................................... 13,500
Transfer agent fee .................................................... 3,750
Audit fee ............................................................. 1,994
Printing expense ....................................................... 4,198
Trustees' fees ....................................................... 1,413
Custodian fee .......................................................... 2,453
Amortization of organization expense .................................. 2,733
Miscellaneous expense ................................................. 2,384
------------
Total expenses ....................................................... 182,730
------------
Net investment income ................................................. 953,393
Realized and unrealized gains on investments:
Net realized gains on investments ..................................... 628,697
Change in unrealized appreciation on investments ...................... 1,683,388
------------
Net increase in net assets resulting from operations ................... $ 3,265,478
============
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited) Year
Six Months Ended Ended
June 30, December 31,
1997 1996
------------------ ----------------
<S> <C> <C>
Operations:
Net investment income ................................................... $ 953,393 $ 2,111,597
Net realized gains (losses) on investments .............................. 628,697 (45,156)
Unrealized appreciation on investments ................................. 1,683,388 871,144
------------ -------------
Net increase in net assets resulting from operations .................. 3,265,478 2,937,585
------------ -------------
Distributions declared from:
Net investment income ................................................... -- (2,098,660)
------------ -------------
Fund share transactions:
Proceeds from fund shares sold .......................................... 2,339,534 5,054,022
Cost of fund shares repurchased ....................................... (6,216,291) (11,681,570)
Distributions reinvested ................................................ -- 2,098,660
------------ -------------
Net decrease in net assets resulting from fund share transactions ...... (3,876,757) (4,528,888)
------------ -------------
Total decrease in net assets ............................................. (611,279) (3,689,963)
Net assets:
Beginning of period ................................................... 47,906,797 51,596,760
------------ -------------
End of period ......................................................... $ 47,295,518 $ 47,906,797
============ =============
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ................................................... $ 936,916 $ (16,477)
============ =============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................ 214,121 478,345
Shares redeemed ......................................................... (569,892) (1,111,326)
Distributions reinvested ................................................ -- 194,321
------------ -------------
Net decrease ............................................................ (355,771) (438,660)
============ =============
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Colonial-Keyport Utilities Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended
June 30,
-------------------
1997
-------------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ............ $ 10.70
--------
Net investment income (a) ........................ 0.22
Net realized and unrealized gains (losses) on
investments (a) ................................. 0.56
--------
Total from investment operations .................. 0.78
--------
Less distributions from:
Dividends from net investment income ............ --
--------
Net asset value, end of period .................. $ 11.48
========
Total return:
Total investment return (b) ..................... 7.29%**
Ratios/supplemental data:
Net assets, end of period (000) .................. $47,296
Ratio of net expenses to average net assets ...... 0.78%*(e)
Ratio of net investment income to average net assets 4.09%*(e)
Portfolio turnover ratio ........................ 4%**
Average commission rate (f) ..................... $0.0446
<CAPTION>
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 (a) ........................ 0.46 0.46 0.54 0.18
Net realized and unrealized gains (losses) on
investments (a) ................................. 0.23 2.39 (1.53) (0.35)
--------- ------- --------- -------
Total from investment operations .................. 0.69 2.85 (0.99) (0.17)
--------- ------- --------- -------
Less distributions from:
Dividends from net investment income ............ (0.49) (0.46) (0.55) (0.18)
--------- ------- --------- -------
Net asset value, end of period .................. $ 10.70 $ 10.50 $ 8.11 $ 9.65
========= ======= ========= =======
Total return:
Total investment return (b) ..................... 6.53% 35.15% (10.27)% (1.70)%**(c)
Ratios/supplemental data:
Net assets, end of period (000) .................. $47,907 $51,597 $38,156 $54,441
Ratio of net expenses to average net assets ...... 0.81%(e) 0.83%(e) 0.86% 1.00%*(d)
Ratio of net investment income to average net assets 4.36%(e) 4.98%(e) 5.80% 5.10%*(c)
Portfolio turnover ratio ........................ 14% 18% 16% 2%**
Average commission rate (f) ..................... $0.0468 -- -- --
</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) 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.
(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.
23
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Colonial-Keyport International Fund For
Growth / June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ------------ ------------
COMMON STOCKS--86.9%
Agriculture, Forestry & Fishing--0.2%
Agricultural Services--0.2%
PT Chareon Pokphand
Indonesia ........................ In 162,500 $ 73,498
-----------
Construction--1.7%
Building Construction--0.1%
Property Perfect Public Co.,
Ltd. (a) ........................... Th 128,000 49,411
-----------
Non-Building Construction--1.6%
Compagnie Generale des
Eaux .............................. Fr 2,755 352,779
Kaneshita Construction ............... Ja 13,000 101,505
Sino Thai Engineering &
Construction Public Co.,
Ltd. (a) ........................... Th 28,600 79,490
-----------
533,774
-----------
Finance, Insurance & Real Estate--18.2%
Depository Institutions--6.7%
Banco Latinoamericano de
Exportaciones SA .................. Po 9,200 396,750
Banco Popolare di Milano ............ It 65,800 395,421
Banque Nationale
de Paris (a) ..................... Fr 12,200 502,481
Generale de Banque SA ............... Be 1,155 444,280
Generale de Banque SA
STRIPS (a) ........................ Be 105 47
Kookmin Bank (a) ..................... Ko 625 11,788
Korea Exchange Bank .................. Ko 48,591 320,111
Siam Commercial Bank .................. Th 36,000 147,307
-----------
2,218,185
-----------
Financial Services--0.0%
Industrial Finance Corp. of
Thailand ........................... Th 10,500 13,706
-----------
Holding Companies--1.7%
Fortis Amev NV ........................ Ne 12,586 552,062
-----------
Insurance Carriers--1.0%
Reinsurance Australia Corp. ............ Au 112,599 340,335
-----------
Holding & Other Investment Companies--3.1%
Fleming Russia Securities
Fund (a) ........................... Ru 21,000 498,750
Japan OTC Equity Fund,
Inc. (a) ........................... Ja 170 127,500
World Equity Benchmark
Share (a) ........................ Ja 27,000 381,510
-----------
1,007,760
-----------
Nondepository Credit Institutions--1.9%
Promise Co., Ltd. ..................... Ja 11,000 629,531
-----------
Real Estate--2.6%
Diligentia Ab (a) ..................... Sw 28,700 $ 349,411
IOI Properties ........................ Ma 62,000 117,885
Kawasan Industri Jabebeka .............. In 291,000 388,874
-----------
856,170
-----------
Security Brokers & Dealers--1.2%
Kokusai Securities Co., Ltd. ........... Ja 24,000 211,472
L.G. Securities (a) .................. Ko 16,000 194,595
-----------
406,067
-----------
Manufacturing--35.8%
Apparel--0.9%
Tokyo Style ........................... Ja 21,000 291,298
-----------
Chemicals & Allied Products--5.3%
Henkel KGAA ........................... G 1,067 56,546
Indian Petrochemicals Corp.,
Ltd. GDR ........................... In 15,800 221,200
Kemira Oy ........................... Fi 23,300 219,566
Norsk Hydro A/S ..................... No 8,200 446,558
PT Evershine Textile
Industry ........................... In 427,396 166,950
Reliance Industries Ltd. GDR In 6,000 138,000
SmithKline Beecham PLC ............... UK 24,427 449,469
Yizheng Chemical Fibre Co.,
Ltd. .............................. HK 284,000 50,590
-----------
1,748,879
-----------
Electronic & Electrical Equipment--7.9%
Alcatel Alsthom ..................... Fr 3,455 432,426
Koor Industries Ltd. ADR ............ UK 8,200 144,525
LG Electronics ........................ Ko 13,900 260,215
Matsushaita Electric
Industrial Co. ..................... Ja 29,000 584,427
Moulinex (a) ........................ Fr 15,600 427,107
Murata Manufacturing Co.,
Ltd. .............................. Ja 12,000 473,195
Samsung Electronics GDR
Rights (expires 09/01/97)............ Ko 183 5,957
Samsung Electronics
Preferred, GDR ..................... Ko 10,064 271,728
Samsung Electronics (a) ............... Ko 227 13,166
-----------
2,612,746
-----------
Food & Kindred Products--0.7%
Perdigao SA Comercio e
Industria ........................ Br 70,000,000 165,815
Vitasoy International
Holdings Ltd. ..................... HK 133,000 59,659
-----------
225,474
-----------
See Notes to Investment Portfolio.
24
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport International Fund For
Growth / June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ----------- ------------
Machinery & Computer Equipment--6.9%
Agiv-AG ........................ G 16,300 $ 371,208
Bucher Holding .................. Sz 160 166,404
Canon, Inc. ..................... Ja 16,000 435,507
Hitachi Ltd. .................. Ja 42,000 469,008
Mannesmann AG .................. G 1,070 476,318
Mori Seiki ..................... Ja 22,000 353,152
-----------
2,271,597
-----------
Paper Products--3.8%
Enso-Gutzeit Oy ............... Fi 49,500 456,941
Metro Pacific Corp. ............ Ph 1,323,000 285,908
Metsa-Serla Oy .................. Fi 61,600 501,112
-----------
1,243,961
-----------
Petroleum Refining--4.0%
NESTE Oy ........................ Fi 13,100 347,667
YPF Sociedad Anonima ADR Ar 16,500 507,375
Yukong Ltd. ..................... Ko 19,800 479,393
-----------
1,334,435
-----------
Primary Metal--3.8%
Avesta Sheffield (a) ............ Sw 45,900 532,062
Svenskt Stal AB (SAAB),
Series B ..................... Sw 30,000 610,025
TransTec PLC .................. UK 74,222 117,980
-----------
1,260,067
-----------
Stone, Clay, Glass & Concrete--0.7%
Companion Building
Materials, Ltd. ............ HK 1,365,600 100,477
N.V. Koninklijke Sphinx
Gustavberg .................. Ne 11,546 121,685
-----------
222,162
-----------
Textile Mill Products--0.4%
Companhia de Tecidos
Norte de Minas ............... Br 350,000 136,879
-----------
Transportation Equipment--1.4%
Suzuki Motor Co., Ltd. ......... Ja 38,000 480,698
-----------
Mining & Energy--4.2%
Coal Mining--0.7%
Samchully Co. .................. Ko 3,633 243,111
-----------
Crude Petroleum & Natural Gas--3.0%
Compagnie Francaise de
Petroleum Total B ............ Fr 5,389 544,353
Saga Petroleum A/S ............ No 23,100 438,246
-----------
982,599
-----------
Metal Mining--0.5%
Southern Peru Copper Co. ...... $ 8,100 157,950
-----------
Retail Trade--7.1%
Auto Dealers & Gas Stations--1.7%
Inchcape PLC .................. UK 121,472 572,181
-----------
Food Stores--2.4%
Jardine Matheson Holdings
Ltd. ADR (a) ............... Ja 37,103 $ 263,432
Jusco Co. Ltd. .................. Ja 16,000 540,196
-----------
803,628
-----------
General Merchandise Stores--3.0%
Globex Utilidades SA ............ Br 15,600 231,863
Ito-Yokado Co., Ltd. ............ Ja 9,000 522,137
PT Matahari Putra Prima ......... In 126,000 253,863
-----------
1,007,863
-----------
Services--2.4%
Business Services--1.0%
Ing C. Olivetti & SPA (a) ...... It 942,000 267,733
Intrum Justitia ............... UK 32,186 48,215
-----------
315,948
-----------
Health Services--1.4%
Biora AB ADR (a) ............... $ 5,500 98,313
Novartis ........................ Sz 230 367,308
-----------
465,621
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--13.4%
Air Transportation--1.0%
Helikopter Service A/S ......... No 26,000 333,574
-----------
Communications--7.9%
DDI Corp. ..................... Ja 44 324,746
Korea Mobile
Telecommunications Corp. Ko 130 97,512
Portugal Telecom ADR ............ Po 8,000 321,000
Royal Koninklijke PTT
Nederland NV ............... Ne 11,583 454,096
Tele-Communications
International, Inc. (a) ...... $ 26,700 412,181
Telecom Argentina SA ADR ......... Ar 6,500 341,250
Telecom Italia .................. It 135,000 433,703
Telecom Italia SPA ............ It 114,000 228,269
-----------
2,612,757
-----------
Gas Services--2.1%
British Gas Corp. ............... UK 143,000 526,016
Centrica PLC (a) ............... UK 130,000 158,497
-----------
684,513
-----------
Water Transportation--2.4%
Danzas Holding .................. Sz 1,015 197,930
Hong Kong Ferry Holdings
Co. ........................ HK 101,000 195,560
Precious Shipping Public
Co., Ltd. .................. Th 65,500 179,521
Transportacion Maritima
Mexicana ADR ............... Mx 35,400 219,037
-----------
792,048
-----------
See Notes to Investment Portfolio.
25
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport International Fund For
Growth / June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ----------- ------------
Wholesale Trade--3.9%
Durable Goods--3.9%
Brierley Investments Ltd. ... NZ 388,000 $ 379,902
Celsis International PLC (a) UK 103,185 159,724
Powerscreen International
PLC ..................... UK 25,800 281,061
Yamazen Corp. (a) ............ Ja 101,000 457,309
------------
1,277,996
------------
Total Common Stocks
(Cost of $25,937,790) ...... 28,758,484
------------
PREFERRED STOCKS--2.6%
Manufacturing--2.6%
Chemicals & Allied Products--1.4%
Henkel KGAA .................. G 7,733 438,607
Samsung Electronics NV ...... Ko 400 19,146
Yukong, Ltd. GDR (a) ......... $ 2,900 16,385
------------
474,138
------------
Fabricated Metal--1.2%
Freidrich Grohe Ag
Vorzugsak ............... G 1,200 371,251
------------
Total Preferred Stocks
(Cost of $314,930) ......... 845,389
------------
Warrants--0.0%
Compagnie Generale des
Eaux (expires 05/02/01)
(cost of $1,864)............ Fr 2,755 $ 1,649
------------
Total Investments
(Cost of $26,254,584) ...... 29,605,522
------------
SHORT-TERM OBLIGATIONS--10.4%
Federal Home Loan
Mortgage Corp.
6.000% (c) 07/01/97 ...... 3,456,000 3,455,424
------------
Other Assets & Liabilities,
Net--0.1% .................. 28,539
------------
Net Assets--100.0% ......... $33,089,485
============
Notes to investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is $26,369,380. Gross unrealized
appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation $ 5,530,813
Gross unrealized depreciation (2,294,671)
------------
Net unrealized appreciation $ 3,236,142
============
(c) Rate represents yield at date of purchase.
Acronym Name
------- ----
ADR American Depository Receipt
GDR Global Depository Receipt
STRIP Separately Traded Receipt of
Interest and Principal
See Notes to Investment Portfolio.
26
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport International Fund For
Growth / June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Summary of Securities by Country
% of Total
Country Securities
Country Abbrev. Value at Value
- ------------------------------- --------- ------------- -----------
Japan ........................ Ja $ 6,646,623 22.4%
France ........................ Fr 2,260,795 7.6
Germany ..................... G 1,713,930 5.8
Korea ........................ Ko 1,596,611 5.4
United Kingdom ............... UK 2,457,668 8.3
Sweden ........................ Sw 1,491,498 5.0
Italy ........................ It 1,325,126 4.5
Indonesia ..................... In 1,242,385 4.2
Norway ........................ No 1,218,378 4.1
Finland ..................... Fi 1,525,286 5.2
Netherlands .................. Ne 1,127,843 3.8
Argentina ..................... Ar 848,625 2.9
Switzerland .................. Sz 731,642 2.5
Hong Kong ..................... HK 726,397 2.5
Portugal ..................... Po 717,750 2.4
United States ............... $ 684,829 2.3
Brazil ........................ Br 534,557 1.8
Russia ........................ Ru 498,750 1.7
Thailand ..................... Th 469,435 1.6
Belgium ..................... Be 444,327 1.5
New Zealand .................. NZ 379,902 1.3
Australia ..................... Au 340,335 1.1
Philippines .................. Ph 285,908 1.0
Mexico ........................ Mx 219,037 0.7
Malaysia ..................... Ma 117,885 0.4
------------ ------
$29,605,522 100.0%
============ ======
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
See Notes to Financial Statements.
27
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth / June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $26,254,584) ..................... $29,605,522
Short-term obligations ......................................................... 3,455,424
Cash (including foreign currencies) ............................................. 68,066
Receivable for investments sold ................................................ 136,671
Dividends, tax reclaims and interest receivable ................................. 98,481
Receivable for fund shares ...................................................... 51,827
Unamortized organization expenses ................................................ 7,927
Other assets .................................................................. 5,967
------------
Total assets .................................................................. 33,429,885
------------
Liabilities:
Payable for investments bought ................................................ 226,423
Payable for fund shares repurchased ............................................. 48,778
Management fee payable ......................................................... 23,494
Bookkeeping fee payable ......................................................... 2,250
Transfer agent fee payable ...................................................... 625
Accrued expenses payable ...................................................... 38,830
------------
Total liabilities ............................................................ 340,400
------------
Net assets ..................................................................... $33,089,485
============
Net assets represented by:
Paid-in capital ............................................................... $28,356,940
Accumulated undistributed net investment income .............................. 171,573
Accumulated net realized gains on investments and foreign currency transactions 1,212,774
Net unrealized appreciation on investments and foreign currency transactions ... 3,348,198
------------
Total net assets applicable to outstanding shares of beneficial interest ......... $33,089,485
============
Shares of beneficial interest outstanding ....................................... 14,777,191
============
Net asset value per share ...................................................... $ 2.24
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $49,160) ...... $ 354,295
Interest income ............................................................... 54,930
------------
Total investment income ...................................................... 409,225
------------
Expenses:
Management fee ............................................................... 128,182
Bookkeeping fee ............................................................... 13,500
Transfer agent fee ............................................................ 3,750
Audit fee ..................................................................... 12,127
Printing expense ............................................................... 1,810
Trustees' expense ............................................................... 2,172
Custodian fee .................................................................. 47,241
Legal fee ..................................................................... 2,715
Amortization of organization expense .......................................... 2,141
Miscellaneous expense ......................................................... 3,250
------------
Total expenses ............................................................... 216,888
------------
Net investment income ......................................................... 192,337
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized gains on investments ............................................. 1,164,856
Net realized losses on foreign currency transactions ........................... (12,214)
Change in unrealized appreciation on investments and foreign currency transactions 2,747,831
------------
Net increase in net assets resulting from operations ........................... $ 4,092,810
============
</TABLE>
See Notes to Financial Statements.
28
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
--------------- --------------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 192,337 $ 207,697
Net realized gains on investments .......................................... 1,164,856 1,628,143
Net realized losses on foreign currency transactions ..................... (12,214) (41,603)
Change in unrealized appreciation (depreciation) on investments and foreign
currency transactions ................................................... 2,747,831 (520,184)
------------ ------------
Net increase in net assets resulting from operations ..................... 4,092,810 1,274,053
------------ ------------
Distributions declared from:
Net investment income ...................................................... -- --
Net realized gains ......................................................... -- (1,535,936)
------------ ------------
Total distributions ...................................................... -- (1,535,936)
------------ ------------
Fund share transactions:
Proceeds from fund shares sold ............................................. 8,320,466 6,030,306
Cost of fund shares repurchased ............................................. (5,916,838) (3,475,389)
Distributions reinvested ................................................... -- 1,535,936
------------ ------------
Net increase in net assets resulting from fund share transactions ......... 2,403,628 4,090,853
------------ ------------
Total increase in net assets ................................................ 6,496,438 3,828,970
Net assets:
Beginning of period ...................................................... 26,593,047 22,764,077
------------ ------------
End of period ............................................................... $ 33,089,485 $26,593,047
------------ ------------
Accumulated undistributed (overdistributed) net investment income included in
ending net assets ......................................................... $ 171,573 $ (3,447)
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................... 4,084,963 2,963,621
Shares redeemed ............................................................ (2,905,203) (1,708,699)
Distributions reinvested ................................................... -- 787,660
------------ ------------
Net increase ............................................................... 1,179,760 2,042,582
============ ============
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Colonial-Keyport International Fund for
Growth
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended
June 30,
------------------
1997
------------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ..................... $ 1.96
--------
Net investment income (a) ................................. 0.01
Net realized and unrealized gains (losses) on investments and
foreign currency transactions (a) ........................ 0.27
--------
Total from investment operations ........................... 0.28
--------
Less distributions from:
Dividends from net investment income ..................... --
Dividends from net realized gains on investments ......... --
--------
Total distributions ....................................... --
--------
Net asset value, end of period ........................... $ 2.24
========
Total return:
Total investment return (b) .............................. 14.29%**
Ratios/supplemental data:
Net assets, end of period (000) ........................... $33,089
Ratio of net expenses to average net assets ............... 1.51%*(c)
Ratio of net investment income to average net assets ...... 1.34%*(c)
Portfolio turnover ratio ................................. 16%**
Average commission rate (d) .............................. $0.0070
<CAPTION>
Period
Ended
Year Ended December 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 (a) ................................. 0.02 0.01 --
Net realized and unrealized gains (losses) on investments and
foreign currency transactions (a) ........................ 0.09 0.10 (0.12)
--------- ------- -------
Total from investment operations ........................... 0.11 0.11 (0.12)
--------- ------- -------
Less distributions from:
Dividends from net investment income ..................... -- (0.02) --
Dividends from net realized gains on investments ......... (0.12) -- --
--------- ------- -------
Total distributions ....................................... (0.12) (0.02) --
--------- ------- -------
Net asset value, end of period ........................... $ 1.96 $ 1.97 $ 1.88
========= ======= =======
Total return:
Total investment return (b) .............................. 5.61% 5.85% (6.00)%**
Ratios/supplemental data:
Net assets, end of period (000) ........................... $26,593 $22,764 $19,146
Ratio of net expenses to average net assets ............... 1.40%(c) 1.40%(c) 1.74%*
Ratio of net investment income to average net assets ...... 0.84%(c) 0.75%(c) 0.13%*
Portfolio turnover ratio ................................. 114% 40% 31%**
Average commission rate (d) .............................. $0.0010 -- --
</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.
30
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund / June
30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Par Value
---------- ------------
BONDS & NOTES--90.6%
CORPORATE FIXED-INCOME BONDS
& NOTES--39.3%
Construction--0.4%
Building Construction
USG Corp., 9.250% 09/15/01 ............ $250,000 $ 265,455
-----------
Manufacturing--14.4%
Chemicals and Allied Products--2.2%
Agricultural Minerals Co., L.P.,
10.750% 09/30/03 .................. 200,000 212,500
Revlon Worldwide Corp., (a)
03/15/98 ........................... 500,000 473,750
Sterling Chemicals, Inc., 11.250%
04/01/07 (b) ........................ 600,000 637,500
-----------
1,323,750
-----------
Electronic & Electrical Equipment--2.0%
LDM Technologies, Inc., 10.750%
01/15/07 ........................... 600,000 634,500
Unisys Corp., 11.750% 10/15/04 ......... 500,000 542,500
-----------
1,177,000
-----------
Fabricated Metal--2.2%
Euramax International, PLC,
11.250% 10/01/06 (c) ............... 250,000 268,750
Renco Metals, Inc., 11.500%
07/01/03 ........................... 500,000 535,000
U.S. Can Corp., 10.125% 10/15/06 500,000 532,500
-----------
1,336,250
-----------
Lumber & Wood Products--0.4%
Triangle Pacific Corp., 10.500%
08/01/03 ........................... 250,000 265,000
-----------
Machinery & Computer Equipment--1.0%
IMO Industries, Inc., 11.750%
05/01/06 ........................... 500,000 598,125
-----------
Miscellaneous Manufacturing--1.6%
American Standard Co., stepped
coupon, (10.500% 06/01/98) (d)
06/01/05 ........................... 350,000 343,000
Borg Warner Security Corp.,
9.625% 03/15/07 (b) ............... 600,000 609,000
-----------
952,000
-----------
Paper Products--0.8%
Stone Container Corp., 10.750%
10/01/02 ........................... 500,000 520,625
-----------
Primary Metal--1.8%
Algoma Steel, Inc., 12.375%
07/15/05 ........................... 500,000 553,750
Kaiser Aluminum & Chemical
Corp., 10.875% 10/15/06 ............ 500,000 537,500
-----------
1,091,250
-----------
Stone, Clay, Glass & Concrete--0.9%
Owens-Illinois, Inc., 9.950%
10/15/04 ........................... $500,000 $ 528,750
-----------
Transportation Equipment--1.5%
Aftermarket Technology Corp.,
Series B, 12.000% 08/01/04 ......... 323,000 360,145
Collins & Aikman Products Co.,
11.500% 04/15/06 .................. 500,000 566,250
-----------
926,395
-----------
Mining & Energy--1.3%
Crude Petroleum & Natural Gas--0.4%
Ferrellgas Finance Corp., L.P.,
10.000% 08/01/01 .................. 250,000 260,000
-----------
Oil & Gas Extraction--0.9%
Gulf Canada Resources Ltd.,
9.250% 01/15/04 (e) ............... 250,000 262,188
Nuevo Energy Co., 9.500%
04/15/06 ........................... 250,000 260,000
-----------
522,188
-----------
Retail Trade--1.8%
Food Stores--1.4%
Pathmark Stores, Inc., 9.625%
05/01/03 ........................... 250,000 240,625
Smiths Food and Drug, 11.250%
05/15/07 ........................... 500,000 587,500
-----------
828,125
-----------
Miscellaneous Retail--0.4%
Finlay Fine Jewelry Corp.,
10.625% 05/01/03 .................. 250,000 264,375
-----------
Services--3.6%
Health Services--1.4%
Tenet Healthcare Corp., 10.125%
03/01/05 ........................... 750,000 821,250
-----------
Hotels, Camps & Lodging--2.2%
Eldorado Resorts Corp., 10.500%
08/15/06 ........................... 500,000 537,500
HMH Properties, Inc., 9.500%
05/15/05 ........................... 250,000 260,000
Station Casinos, Inc., 10.125%
03/15/06 ........................... 250,000 252,500
Wyndham Hotel Corp., 10.500%
05/15/06 ........................... 250,000 282,500
-----------
1,332,500
-----------
Transportation, Communication, Electric,
Gas & Sanitary Services--17.8%
Air Transportation--2.3%
Greenwich Air Services, Inc.,
10.500% 06/01/06 .................. 500,000 575,000
United Airlines, Inc., 9.200%
03/22/08 ........................... 267,975 294,432
See Notes to Investment Portfolio.
31
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund / June
30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Par Value
------------ ------------
U.S. Air, Inc., 10.375% 03/01/13 ......... $ 500,000 $ 553,750
------------
1,423,182
------------
Broadcasting--1.8%
NWCG Holding Corp., (a)
06/15/99 .............................. 425,000 372,997
Young Broadcasting Corp.,
11.750% 11/15/04 ..................... 650,000 718,250
------------
1,091,247
------------
Cable--3.3%
Bell Cablemedia PLC, stepped
coupon, (11.950% 07/15/99) (d)
07/15/04 (c) ........................ 400,000 360,000
Comcast UK Cable Partners Ltd.,
stepped coupon, (11.200%
11/15/00) (d) 11/15/07 (c) ............ 500,000 380,040
Marcus Cable Co., L.P., stepped
coupon, (14.250% 06/15/00) (d)
12/15/05 .............................. 600,000 474,000
11.875% 10/01/05 ...................... 500,000 541,875
Videotron Holding PLC, stepped
coupon, (11.000% 08/15/00) (d)
08/15/05 (c) ........................ 250,000 207,500
------------
1,963,415
------------
Communications--3.5%
Sprint Spectrum, L.P., stepped
coupon, (12.500% 08/15/01) (d)
08/15/06 .............................. 1,100,000 797,500
Teleport Communications, Inc.,
stepped coupon, (11.125%
07/01/01) (d) 07/01/07 ............... 1,000,000 722,500
UNC, Inc., 11.000% 06/01/06 ............ 500,000 586,250
------------
2,106,250
------------
Electric, Gas & Sanitary Services--0.9%
Mesa Operating Co., 10.625%
07/01/06 .............................. 500,000 568,125
------------
Electric Services--0.3%
California Energy Co., Inc.,
9.500% 09/15/06 ..................... 150,000 160,500
------------
Gas Services--1.2%
California Energy Co., Inc.,
9.875% 06/30/03 ..................... 400,000 428,000
HS Resources, Inc., 9.250%
11/15/06 .............................. 275,000 276,375
------------
704,375
------------
Sanitary Services--0.9%
Allied Waste of North America,
10.250% 12/01/06 (b) .................. 500,000 534,375
------------
Telecommunication--3.6%
Brooks Fiber Properties, Inc.,
stepped coupon, (10.875%
03/01/01) (d) 03/01/06 ............... 650,000 442,000
EchoStar Communications Corp.,
stepped coupon, (12.875%
06/01/99) (d) 06/01/04 ............... $ 500,000 $ 420,000
ICG Holding, Inc., stepped
coupon, (13.500% 09/15/00) (d)
09/15/05 .............................. 500,000 380,680
MFS Communications, Inc.,
stepped coupon, (8.875%
01/15/01) (d) 01/15/04 ............... 500,000 467,195
PanAmSat Corp., stepped coupon,
(11.375% 08/01/98) (d)
08/01/03 .............................. 500,000 485,000
------------
2,194,875
------------
Total Corporate Fixed-Income
Bonds & Notes (Cost of $22,689,406) ... 23,759,382
------------
Currency
---------
Foreign Government & Agency Obligations--26.7%
Argentina Global Bonds:
9.250% 02/23/01 (f) ... 310,000 324,338
11.000% 10/09/06 (f) ... 400,000 444,252
Bonos Del Tesoro
Government Bond,
8.750% 05/09/02 (g) ... 280,000 279,860
Government of Sweden,
10.250% 05/05/03 ...... SK 8,500,000 1,325,938
Italian Government
Bonds, 10.000%
08/01/03 ............... IL 2,460,000,000 1,688,249
Kingdom of Denmark,
8.000% 05/15/03 ...... DK 9,680,000 1,646,370
Mexican Brady Bonds,
Series A, 6.250%
12/31/19 (h) ......... 400,000 309,000
Mexican Global Bonds:
9.750% 02/06/01 (h) ... 240,000 253,200
11.375% 09/15/16 (h) ... 750,000 843,285
Republic of Poland (Brady):
Past Due Interest,
stepped coupon,
(5.000% 10/27/98)
4.000% 10/27/14 (i) ... 852,000 726,330
Poland Non-U.S. Global
Registered Bond,
6.938% 10/27/24 (j) ... 728,000 712,071
Republic of South Africa
Yankee, 8.500%
06/23/17 (k) ......... 500,000 498,750
Republic of Venezuela
(Brady), 6.750%
03/31/20 (l) ......... 300,000 236,250
See Notes to Investment Portfolio.
32
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund / June
30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Currency Par Value
---------- ------------- ------------
Spanish Government Bonds:
10.000% 02/28/05 ... SP 135,000,000 $ 1,127,676
10.500% 10/30/03 .... SP 65,000,000 546,260
Victoria Treasury Corp.:
10.250% 11/15/06 ... A$ 1,860,000 1,694,792
12.500% 10/15/03 .... A$ 710,000 690,210
United Kingdom Treasury:
9.500% 04/18/05 ...... KB 305,000 578,729
10.000% 09/08/03 .... KB 1,175,000 2,222,808
------------
Total Foreign
Government & Agency Obligations
(Cost of $16,044,357) ........................ 16,148,368
------------
U.S. Government & Agency Obligations--24.6%
Federal Home Loan Mortgage
Corp., CMO, 9.500%
04/15/19 .................. 18,096 18,718
MDC Mortgage Funding Corp.,
CMO, 8.850% 03/20/18 ...... 145,492 147,765
U.S. Treasury Bonds:
8.750% 05/15/17 (m) ......... 3,406,000 4,097,827
11.625% 11/15/04 .......... 616,000 798,102
U.S. Treasury Notes, 11.875%
11/15/03 (m) ............... 7,650,000 9,781,214
------------
Total U.S. Government & Agency Obligations
(Cost of $14,829,299) ........................ 14,843,626
------------
Total Bonds & Notes
(Cost of $53,563,062) ........................ 54,751,376
------------
Shares
--------
Preferred Stocks--1.8%
Transportation, Communication, Electric,
Gas & Sanitary Services
Cable
Cablevision Systems Corp.,
11.125% PIK, Series L ...... 4,735 477,064
Time Warner, Inc., 10.25%,
Series M .................. 525 581,181
-----------
Total Preferred Stocks
(Cost of $1,053,983) ............... 1,058,245
-----------
Total Investments--92.4%
(Cost of $54,617,045) (n) ......... 55,809,621
-----------
Par Value
------------ --------------
Short-Term Obligations--2.5%
Federal Home Loan Mortgage
Corp., 6.00% (o) 07/01/97 ...... $1,533,000 $ 1,532,745
Forward Currency Contracts--0.0% (p) ......... (1,060)
Other Assets & Liabilities, Net--5.1% ...... 3,060,130
-----------
Net Assets--100.0% ........................... $60,401,436
===========
Notes to Investment Portfolio:
(a) Zero coupon bond.
(b) Security is 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,
1997, the value of these securities amounted to $1,780,875 or 2.9% of net
assets.
(c) This is a British security. Par amount is stated in U.S. dollars.
(d) Currently zero coupon. Shown parenthetically is the interest rate to be
paid and the date the Fund will begin accruing this rate.
(e) This is a Canadian security. Par amount is stated in U.S. dollars.
(f) This is a Argentinean security. Par amount is stated in U.S. dollars.
(g) This is a Spanish security. Par amount is stated in U.S. dollars.
(h) This is a Mexican security. Par amount is stated in U.S. dollars.
(i) This is a Polish security. Par amount is stated in U.S. dollars. Shown
parenthetically is the interest rate to be paid and the date the Fund will
begin accruing this rate.
(j) This is a Polish security. Par amount is stated in U.S. dollars.
(k) This is a South African security. Par amount is stated in U.S. dollars.
(l) This is a Venezuelan security. Par amount is stated in U.S. dollars.
(m) These securities, or a portion thereof, with a total market value of
$10,747,263 are being used to collateralize the forward currency contracts
shown below.
(n) Cost for federal income tax purposes is $54,644,235. Gross unrealized
appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation $1,636,760
Gross unrealized depreciation (471,374)
----------
Net unrealized appreciation $1,165,386
==========
(o) Rate represents yield at date of purchase.
(p) As of June 30, 1997, the Fund had entered into the following forward
currency exchange contracts:
See Notes to Investment Portfolio.
33
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund / June
30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Net Unrealized
Appreciation
Contracts Settlement (Depreciation)
to deliver In exchange for Date (U.S. $)
- ---------------- ----------------- ------------ ---------------
DM 1,470,000 US$ 862,517 07/02/1997 $ 19,277
KB 1,270,000 US$ 2,080,063 07/14/1997 (33,499)
DK 8,300,000 US$ 1,260,823 07/21/1997 9,564
FF 10,420,000 US$ 1,789,901 07/22/1997 15,293
SK 7,800,000 US$ 1,005,303 07/23/1997 (5,866)
A$ 2,830,000 US$ 2,125,386 07/28/1997 (8,252)
DM 2,308,000 US$ 1,326,611 08/04/1997 868
---------
$ (2,615)
=========
Summary of Securities by Currency
Currency Value % of Total
---------- ------------- -----------
United States ......... $ $44,288,589 79.4%
United Kingdom ...... KB 2,801,537 5.0
Australia ............ A$ 2,385,002 4.3
Italian ............ IL 1,688,249 3.0
Spain ............... SP 1,673,936 3.0
Denmark ............... DK 1,646,370 2.9
Sweden ............... SK 1,325,938 2.4
------------ ------
$55,809,621 100.0%
============ ======
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- ----
PIK Payment-In-Kind
DM Deutschemarks
FF French Francs
See Notes to Financial Statements.
34
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund / June
30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $54,617,045) ........................ $55,809,621
Short-term obligations ............................................................ 1,532,745
Cash .............................................................................. 1,062
Receivable for investments sold ................................................... 2,696,655
Dividends and interest receivable ................................................ 1,015,939
Receivable for fund shares sold ................................................... 105,670
Unamortized organization expenses ................................................ 7,989
Other assets ..................................................................... 2,987
-----------
Total assets .................................................................. 61,172,668
-----------
Liabilities:
Payable for investments bought ................................................... 583,495
Payable for fund shares repurchased ............................................. 130,319
Unrealized depreciation on forward currency exchange contracts .................. 2,615
Management fee payable ............................................................ 29,879
Bookkeeping fee payable ......................................................... 2,566
Transfer agent fee payable ...................................................... 625
Accrued expenses payable ......................................................... 19,700
Other liabilities ............................................................... 2,033
-----------
Total liabilities ............................................................... 771,232
-----------
Net assets ........................................................................ $60,401,436
===========
Net assets represented by:
Paid-in capital .................................................................. $56,894,359
Accumulated undistributed net investment income ................................. 2,416,470
Accumulated net realized losses on investments and foreign currency transactions (98,392)
Net unrealized appreciation on investments and foreign currency transactions ... 1,188,999
-----------
Total net assets applicable to outstanding shares of beneficial interest ......... $60,401,436
===========
Shares of beneficial interest outstanding ....................................... 5,295,197
===========
Net asset value per share ......................................................... $ 11.41
===========
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Interest income ................................................................. $ 2,385,741
Dividends ....................................................................... 41,874
-----------
Total investment income ........................................................ 2,427,615
-----------
Expenses:
Management fee ................................................................. 179,218
Bookkeeping fee ................................................................. 14,838
Transfer agent fee .............................................................. 3,750
Audit fee ....................................................................... 11,946
Printing expense ................................................................. 6,335
Trustees' expense .............................................................. 2,715
Custodian fee .................................................................... 6,516
Legal fee ....................................................................... 181
Amortization of organization expense ............................................ 1,969
Miscellaneous expense ........................................................... 3,571
-----------
Total expenses ................................................................. 231,039
-----------
Less:
Expenses reimbursable by Manager ............................................... (8,443)
-----------
Net expenses .................................................................... 222,596
-----------
Net investment income ........................................................... 2,205,019
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized losses on investments ............................................... (637,403)
Net realized gains on foreign currency transactions ............................. 766,164
Change in unrealized depreciation on investments and foreign currency transactions. (424,501)
-----------
Net increase in net assets resulting from operations ............................. $1,909,279
===========
</TABLE>
See Notes to Financial Statements.
35
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
--------------- ----------------
<S> <C> <C>
Operations:
Net investment income ...................................................... $ 2,205,019 $ 4,018,142
Net realized gains (losses) on investments ................................. (637,403) 259,150
Net realized gains on foreign currency transactions ........................ 766,164 330,664
Change in unrealized appreciation (depreciation) on investments and foreign
currency transactions ................................................... (424,501) 22,412
------------ -------------
Net increase in net assets resulting from operations ..................... 1,909,279 4,630,368
------------ -------------
Distributions declared from:
Net investment income ...................................................... -- (4,244,982)
Net realized gains on investments .......................................... -- (309,530)
------------ -------------
Total distributions ...................................................... -- (4,554,512)
------------ -------------
Fund share transactions:
Proceeds from fund shares sold ............................................. 12,182,366 15,151,911
Cost of fund shares repurchased .......................................... (7,083,144) (14,723,831)
Distributions reinvested ................................................... -- 4,554,512
------------ -------------
Net increase in net assets resulting from fund share transactions ......... 5,099,222 4,982,592
------------ -------------
Total increase in net assets ................................................ 7,008,501 5,058,448
Net assets:
Beginning of period ...................................................... 53,392,935 48,334,487
------------ -------------
End of period ............................................................ $ 60,401,436 $ 53,392,935
============ =============
Accumulated undistributed (overdistributed) net investment income included in
ending net assets ......................................................... $ 2,416,470 $ (5,726)
============ =============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................... 1,096,188 1,337,261
Shares redeemed ............................................................ (639,343) (1,307,531)
Distributions reinvested ................................................... -- 412,547
------------ -------------
Net increase ............................................................... 456,845 442,277
============ =============
</TABLE>
See Notes to Financial Statements.
36
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Colonial-Keyport Strategic Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended
June 30,
-------------------
1997
-------------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ........................... $ 11.04
------
Net investment income (a) ....................................... 0.44
Net realized and unrealized gains (losses) on investments and
foreign currency transactions (a) .............................. (0.07)
------
Total from investment operations .............................. 0.37
------
Less distributions:
Dividends from net investment income ........................ --
Dividends from net realized gains on investments ............ --
------
Total distributions .......................................... --
------
Net asset value, end of period ................................. $ 11.41
======
Total return:
Total investment return (b)(c) ................................. 3.35%**
Ratios/supplemental data:
Net assets, end of period (000) .............................. $60,401
Ratio of net expenses to average net assets (d) ............... 0.80%*(e)
Ratio of net investment income to average net assets (c) ...... 7.93%*(e)
Portfolio turnover ratio ....................................... 51%**
<CAPTION>
Period
Ended
Year Ended December 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 (a) ....................................... 0.92 0.55 0.30
Net realized and unrealized gains (losses) on investments and
foreign currency transactions (a) .............................. 0.16 1.24 (0.19)
------- ------- ---------
Total from investment operations .............................. 1.08 1.79 0.11
------- ------- ---------
Less distributions:
Dividends from net investment income ........................ (0.96) (0.56) (0.31)
Dividends from net realized gains on investments ............ (0.07) (0.03) (0.01)
------- ------- ---------
Total distributions .......................................... (1.03) (0.59) (0.32)
------- ------- ---------
Net asset value, end of period ................................. $ 11.04 $ 10.99 $ 9.79
======= ======= =========
Total return:
Total investment return (b)(c) ................................. 9.83% 18.30% 1.10%**
Ratios/supplemental data:
Net assets, end of period (000) .............................. $53,393 $48,334 $13,342
Ratio of net expenses to average net assets (d) ............... 0.80%(e) 0.84%(e) 1.00%*
Ratio of net investment income to average net assets (c) ...... 8.13%(e) 8.08%(e) 7.33%*
Portfolio turnover ratio ....................................... 114% 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) If the Fund had paid all of its expenses and there had been no
reimbursement from the Manager, these ratios would have been 0.83%, 0.86%,
0.94% and 1.60% (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.
See Notes to Financial Statements.
37
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
-------- ------------
COMMON STOCKS--90.6%
Agriculture, Forestry & Fishing--0.7%
Agriculture--Crops--0.7%
RJR Nabisco Holdings Corp. ......... 17,600 $ 580,800
-----------
Finance, Insurance & Real Estate--15.2%
Depository Institutions--5.5%
BankAmerica Corp. .................. 21,000 1,358,438
Chase Manhattan Corp. ............... 8,200 795,913
Citicorp ........................... 6,000 723,375
Comerica, Inc. ..................... 5,100 346,800
First Bank System, Inc. ............ 3,900 332,963
First Union Corp. .................. 6,900 638,250
Nations Bank Corp. .................. 1,000 64,500
-----------
4,260,239
-----------
Insurance Carriers--4.2%
Allmerica Financial Corp. ............ 300 11,963
Allstate Corp. ..................... 8,724 636,852
CIGNA Corp. ........................ 4,400 781,000
Everest Reinsurance Holdings, Inc. 15,800 622,125
Mercury General Corp. ............... 4,800 349,200
Old Republic International Corp. ..... 8,550 259,172
Oxford Health Plans, Inc. ............ 5,000 358,750
Travelers Group, Inc. ............... 3,266 205,962
Wellpoint Health Networks, Inc.,
Class A ........................... 900 41,288
-----------
3,266,312
-----------
Nondepository Credit Institutions--4.6%
American Express Co. ............... 15,800 1,177,100
Beneficial Corp. ..................... 10,300 731,944
ITT Hartford Group, Inc. ............ 9,700 802,675
Student Loan Marketing
Association ..................... 6,600 838,200
-----------
3,549,919
-----------
Security Brokers & Dealers--0.9%
Donaldson, Lufkin & Jenrette, Inc. 5,900 352,525
Merrill Lynch & Co., Inc. ............ 6,400 386,000
-----------
738,525
-----------
Manufacturing--51.7%
Chemicals & Allied Products--12.0%
American Home Products Corp. ......... 12,000 918,000
Amgen, Inc. ........................ 13,200 767,250
Bristol-Myers Squibb Co. ............ 23,000 1,863,000
Clorox Co. ........................... 3,100 408,813
Dow Chemical Co. ..................... 6,600 577,500
Eli Lilly & Co. ..................... 5,500 601,219
Johnson & Johnson .................. 18,000 1,158,750
Merck & Co., Inc. .................. 20,500 2,121,750
Procter & Gamble Co. ............... 800 111,800
Rohm & Haas Company .................. 3,700 333,231
Schering-Plough Corp. ............... 10,600 $ 507,475
-----------
9,368,788
-----------
Electronic & Electrical Equipment--6.5%
Cooper Industries, Inc. ............ 20,100 999,975
General Electric Co. ............... 22,600 1,477,475
Intel Corp. ........................ 14,400 2,042,100
SCI Systems, Inc. (a) ............... 8,200 522,750
-----------
5,042,300
-----------
Food & Kindred Products--4.5%
Coca Cola Co. ........................ 5,500 371,250
Conagra, Inc. ........................ 8,900 571,825
Hershey Foods, Corp. ............... 8,400 468,825
Interstate Bakeries Corp. ............ 9,000 533,813
Philip Morris Co., Inc. ............ 21,900 971,813
Sara Lee Corp. ..................... 14,300 595,238
-----------
3,512,764
-----------
Furniture & Fixtures--0.8%
Johnson Controls, Inc. ............... 14,400 594,900
-----------
Machinery & Computer Equipment--7.9%
Applied Materials, Inc. (a) ......... 6,600 467,363
Caterpillar, Inc. .................. 8,900 955,638
Compaq Computer Corp. (a) ............ 6,000 595,500
Cooper Cameron Corp. (a) ............ 3,800 177,650
Dell Computer Corp. (a) ............ 8,800 1,032,900
Ingersoll Rand Co. .................. 7,200 444,600
Storage Technology Corp. (a) ......... 8,800 391,600
Sun Microsystems, Inc. (a) ......... 26,400 982,575
Tecumseh Products Co., Class A ...... 5,300 317,338
Western Digital Corp. (a) ............ 23,800 752,675
-----------
6,117,839
-----------
Measuring & Analyzing Instruments--3.3%
Becton, Dickinson & Co. ............ 8,600 435,375
Eastman Kodak Co. .................. 7,600 583,300
Honeywell, Inc. ..................... 5,400 409,725
Raytheon Co. ........................ 11,500 588,657
Tektronix, Inc. ..................... 8,600 516,000
-----------
2,533,057
-----------
Miscellaneous Manufacturing--0.8%
Callaway Golf Co. .................. 17,400 617,700
-----------
Paper Products--1.3%
Avery Dennison Corp. ............... 11,700 469,463
Fort Howard Corp. (a) ............... 11,300 571,356
-----------
1,040,819
-----------
Petroleum Refining--7.7%
Amerada Hess Corp. .................. 8,000 444,500
Amoco Corp. ........................ 7,900 686,806
Atlantic Richfield Co. ............... 4,600 324,300
Chevron Corp. ........................ 2,600 192,238
See Notes to Investment Portfolio.
38
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
Shares Value
-------- ------------
Exxon Corp. ........................ 18,500 $ 1,137,750
Mobil Corp. ........................ 16,800 1,173,900
Phillips Petroleum Co. ............... 6,800 297,500
Texaco, Inc. ........................ 7,700 837,375
USX-Marathon Group .................. 31,800 918,225
------------
6,012,594
------------
Primary Metal--0.4%
USX-US Steel Group .................. 9,700 340,106
------------
Printing & Publishing--0.8%
Tribune Co. ........................ 12,800 615,200
------------
Rubber & Plastic--0.8%
Goodyear Tire & Rubber Co. ......... 9,500 601,469
------------
Stone, Clay, Glass & Concrete--0.4%
USG Corp. ........................... 7,900 288,350
------------
Tobacco Products--0.5%
Fortune Brands, Inc. ............... 7,100 264,919
Gallaher Group PLC ADR(a) ............ 7,100 130,906
------------
395,825
------------
Transportation Equipment--4.0%
Chrysler Corp. ..................... 17,800 585,175
General Dynamics Corp. ............... 500 37,500
McDonnell Douglas Corp. ............ 13,900 952,150
Northrop Grumman Corp. ............... 4,600 403,938
Textron, Inc. ........................ 6,600 438,075
United Technologies Corp. ............ 8,100 672,300
------------
3,089,138
------------
Mining & Energy--0.9%
Crude Petroleum & Natural Gas--0.8%
Apache Corp. ........................ 18,800 611,000
------------
Nonmetallic, Except Fuels--0.1%
Vulcan Materials Co. ............... 800 62,800
------------
Retail Trade--5.3%
Apparel & Accessory Stores--1.1%
TJX Companies, Inc. .................. 33,800 891,475
------------
Building, Hardware & Garden Supply--0.7%
Lowes Cos., Inc. ..................... 15,100 560,588
------------
Food Stores--1.2%
Safeway, Inc. (a) .................. 20,835 961,014
------------
General Merchandise Stores--2.1%
Dayton Hudson Corp. .................. 16,500 878,625
Sears, Roebuck & Co. ............... 14,000 752,500
------------
1,631,125
------------
Home Furnishings & Equipment--0.2%
CompUSA, Inc. ........................ 7,600 163,400
------------
Services--5.4%
Computer Related Services--0.9%
Computer Associates
International, Inc. ............... 12,750 709,219
------------
Computer Software--0.8%
Microsoft Corp. (a) .................. 4,600 $ 581,325
------------
Health Services--1.6%
Tenet Healthcare Corp. (a) ......... 42,815 1,265,718
------------
Hotels, Camps & Lodging--1.7%
Hospitality Franchise Systems,
Inc., (a) ........................ 14,800 858,400
MGM Grand, Inc. (a) .................. 12,900 477,300
------------
1,335,700
------------
Motion Pictures--0.4%
Walt Disney Co. ..................... 3,900 312,975
------------
Transportation, Communication, Electric,
Gas & Sanitary Services--11.3%
Air Transportation--0.1%
Delta Air Lines, Inc. ............... 800 65,600
------------
Communications--6.9%
AT&T Corp. ........................... 2,400 84,150
Ameritech Corp. ..................... 17,600 1,195,700
Bell Atlantic Corp. .................. 2,700 204,863
BellSouth Corp. ..................... 9,000 417,375
Compuware Corp. (a) .................. 24,600 1,174,650
GTE Corp. ........................... 13,700 601,088
Lucent Technologies, Inc. ............ 3,677 264,974
NYNEX Corp. ........................ 6,600 380,325
SBC Communications, Inc. ............ 17,381 1,075,449
------------
5,398,574
------------
Electric, Gas & Sanitary Services--0.6%
Enova Corp. ........................ 18,400 442,750
------------
Electric Services--3.7%
Boston Edison Co. .................. 6,500 171,438
Central & South West Corp. ......... 10,900 231,625
Consolidated Edison Co.
of New York ..................... 2,700 79,481
Entergy Corp. ........................ 7,700 210,788
GPU, Inc. ........................... 27,500 986,563
Long Island Lighting Co. ............ 31,000 713,000
Ohio Edison Co. ..................... 20,100 438,431
Rochester Gas & Electric Corp. ...... 3,200 67,400
------------
2,898,726
------------
Wholesale Trade--0.1%
Nondurable Goods--0.1%
Richfood Holdings, Inc. ............ 2,850 74,813
------------
Total Common Stocks
(Cost of $49,620,669) (b) ......... 70,533,446
------------
See Notes to Investment Portfolio.
39
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
Par Value
------------ --------------
SHORT-TERM OBLIGATIONS--10.4%
Federal Home Loan Mortgage Corp.
6.00% (c) 07/01/97 ......... $8,074,000 $ 8,072,654
-----------
Other Assets & Liabilities, Net--(1.0%) (771,151)
-----------
Net Assets--100.0% ..................... $77,834,949
===========
Notes to investment portfolio:
(a) Non-income producing.
(b) The cost for federal income tax purposes is $49,622,648. Gross unrealized
appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation $21,276,260
Gross unrealized depreciation (365,462)
-----------
Net unrealized appreciation $20,910,798
===========
(c) Rate represents yield at date of purchase.
Acronym Name
------- ----
ADR American Depository Receipt
See Notes to Financial Statements.
40
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund / June 30,
1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $49,620,669) ............... $70,533,446
Short-term obligations ................................................ 8,072,654
Cash .................................................................. 2,068
Receivable for investments sold ....................................... 895,814
Receivable for fund shares sold ....................................... 166,711
Dividends and interest receivable ....................................... 112,275
Unamortized organization expenses ....................................... 7,989
Other assets ............................................................ 904
------------
Total assets ......................................................... 79,791,861
------------
Liabilities:
Payable for investments bought .......................................... 1,786,795
Payable for fund shares bought .......................................... 98,016
Management fee payable ................................................ 50,301
Bookkeeping fee payable ................................................ 3,136
Transfer agent fee payable ............................................. 625
Accrued expenses payable ................................................ 18,039
------------
Total liabilities ................................................... 1,956,912
------------
Net assets ............................................................ $77,834,949
============
Net assets represented by:
Paid-in capital ...................................................... $54,947,960
Accumulated undistributed net investment income ........................ 399,757
Accumulated net realized gains on investments ........................ 1,575,800
Net unrealized appreciation on investments ........................... 20,911,432
------------
Total net assets applicable to outstanding shares of beneficial interest $77,834,949
============
Shares of beneficial interest outstanding .............................. 4,600,175
============
Net asset value per share ............................................. $ 16.92
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends ............................................................. $ 580,555
Interest income ....................................................... 141,363
------------
Total investment income .............................................. 721,918
------------
Expenses:
Management fee ....................................................... 270,609
Bookkeeping fee ....................................................... 18,500
Transfer agent fee .................................................... 3,750
Audit fee ............................................................. 7,240
Printing expense ....................................................... 2,353
Trustees' expense .................................................... 2,353
Custodian fee .......................................................... 5,068
Legal fee ............................................................. 362
Amortization of organization expense .................................. 1,969
Miscellaneous expense ................................................. 9,956
------------
Total expenses ....................................................... 322,160
------------
Net investment income ................................................. 399,758
Realized and unrealized gains on investments:
Net realized gains on investments ..................................... 1,592,277
Change in unrealized appreciation on investments ...................... 9,864,519
------------
Net increase in net assets resulting from operations ................... $11,856,554
============
</TABLE>
See Notes to Financial Statements.
41
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
--------------- ----------------
<S> <C> <C>
Operations:
Net investment income ................................................... $ 399,758 $ 727,665
Net realized gains on investments ....................................... 1,592,277 2,722,737
Change in unrealized appreciation on investments ........................ 9,864,519 6,906,156
------------ --------------
Net increase in net assets resulting from operations ..................... 11,856,554 10,356,558
------------ --------------
Distributions declared from:
Net investment income ................................................... -- (692,338)
Net realized gains on investments ....................................... -- (2,738,643)
------------ --------------
Total distributions ...................................................... -- (3,430,981)
------------ --------------
Fund share transactions:
Proceeds from fund shares sold .......................................... 11,154,114 17,615,945
Cost of fund shares repurchased ....................................... (6,030,346) (10,135,228)
Distributions reinvested ................................................ -- 3,430,981
------------ --------------
Net increase in net assets resulting from fund share transactions ...... 5,123,768 10,911,698
------------ --------------
Total increase in net assets ............................................. 16,980,322 17,837,275
Net assets:
Beginning of period ................................................... 60,854,627 43,017,352
------------ --------------
End of period ......................................................... $ 77,834,949 $ 60,854,627
============ ==============
Accumulated undistributed (overdistributed) net investment income included
in ending net assets ................................................... $ 399,757 $ (1)
============ ==============
Analysis of changes in shares of beneficial interest:
Shares sold ............................................................ 717,047 1,304,388
Shares redeemed ......................................................... (395,938) (742,371)
Distributions reinvested ................................................ -- 237,611
------------ --------------
Net increase ............................................................ 321,109 799,628
============ ==============
</TABLE>
See Notes to Financial Statements.
42
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Colonial-Keyport U.S. Stock Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months
Ended
June 30, Year Ended December 31,
------------------- -----------------------------------------
1997 1996 1995
------------------- ----------------- -----------------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ..................... $ 14.22 $ 12.36 $ 10.27
-------- --------- -------
Net investment income (a) ................................. 0.09 0.19 0.21
Net realized and unrealized gains on investments (a) ...... 2.61 2.52 2.84
-------- --------- -------
Total from investment operations ........................... 2.70 2.71 3.05
-------- --------- -------
Less distributions:
Dividends from net investment income ..................... -- (0.17) (0.16)
Dividends from net realized gains on investments ......... -- (0.68) (0.80)
-------- --------- -------
Total distributions ....................................... -- (0.85) (0.96)
-------- --------- -------
Net asset value, end of period ........................... $ 16.92 $ 14.22 $ 12.36
======== ========= =======
Total return:
Total investment return (b) .............................. 18.99%** 21.84% 29.70%(b)
Ratios/supplemental data:
Net assets, end of period (000) ........................... $77,835 $60,855 $43,017
Ratio of net expenses to average net assets ............... 0.95%*(e) 0.95%(e) 1.00%(d)(e)
Ratio of net investment income to average net assets ...... 1.18%*(e) 1.39%(e) 1.72%(b)(e)
Portfolio turnover ratio ................................. 19%** 77% 115%
Average commission rate (f) .............................. $0.0421 $0.0395 --
<CAPTION>
Period
Ended
December 31,
---------------------
1994***
---------------------
<S> <C>
Per share operating performance:
Net asset value, beginning of period ..................... $ 10.00
-------
Net investment income (a) ................................. 0.09
Net realized and unrealized gains on investments (a) ...... 0.35
-------
Total from investment operations ........................... 0.44
-------
Less distributions:
Dividends from net investment income ..................... (0.11)
Dividends from net realized gains on investments ......... (0.06)
-------
Total distributions ....................................... (0.17)
-------
Net asset value, end of period ........................... $ 10.27
=======
Total return:
Total investment return (b) .............................. 4.40%(c)**
Ratios/supplemental data:
Net assets, end of period (000) ........................... $15,373
Ratio of net expenses to average net assets ............... 1.00%(d)*
Ratio of net investment income to average net assets ...... 2.16%(c)*
Portfolio turnover ratio ................................. 52%**
Average commission rate (f) .............................. --
</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.
43
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- ----------- ----------
COMMON STOCKS--91.0%
Agriculture, Forestry & Fishing--1.7%
Agriculture Crops
Sime Darby Berhad ........................... Ma 197,000 $ 655,496
-----------
Finance, Insurance & Real Estate--58.2%
Depository Institutions--18.1%
Development Bank of
Singapore Ltd. ........................... Si 94,000 1,183,465
Guoco Group Ltd. ........................... HK 147,000 774,184
HSBC Holdings PLC ........................... HK 48,400 1,455,686
Hang Seng Bank .............................. HK 122,600 1,748,716
Oversea-Chinese Banking
Corp. Ltd. .............................. Si 136,200 1,409,918
Public Bank Berhad ........................ Ma 397,666 620,639
-----------
7,192,608
-----------
Holding & Other Investment Companies--18.9%
Cheung Kong Holdings Ltd. HK 187,000 1,846,586
Citic Pacific Ltd. ........................ HK 298,000 1,861,779
Guangdong Investments ..................... HK 802,000 1,206,054
Hutchison Whampoa Ltd. ..................... HK 215,000 1,859,430
Singapore Technologies
Industrial Corp. ........................ Si 256,000 658,935
Taiwan Fund, Inc. ........................... Tw 3,000 75,750
-----------
7,508,534
-----------
Insurance Carriers--0.6%
National Mutual Asia Ltd. .................. HK 200,000 222,021
-----------
Real Estate--20.6%
Ayala Land, Inc., Class B .................. Ph 148,750 136,760
China Overseas Land
& Investment ........................... HK 1,506,000 1,214,987
China Resources
Enterprises Ltd. ........................ HK 178,000 873,112
City Developments Ltd. ..................... Si 133,000 1,302,371
Filinvest Development Corp. Ph 485,000 115,844
New World Development
Co., Ltd. .............................. HK 217,000 1,294,101
SM Prime Holdings, Inc. ..................... Ph 510,000 150,819
Sun Hung Kai Properties
Ltd. .................................... HK 141,000 1,697,205
Swire Pacific Ltd., Series A ............... HK 153,000 1,377,533
-----------
8,162,732
-----------
Manufacturing--6.0%
Chemicals & Allied Products--0.6%
PT Kalbe Farma Reg. ........................ In 129,000 172,387
PT Darya Varia Laboratoria (a) In 62,640 75,337
-----------
247,724
-----------
Electronic & Electrical Equipment--0.5%
Nylex Malaysia Berhad ..................... Ma 120,000 $ 204,397
-----------
Fabricated Metal--0.8%
Kian Joo Can Factory Berhad Ma 72,000 310,873
-----------
Measuring & Analyzing Instruments--1.0%
China Hong Kong
Photo Products ........................... HK 460,000 133,600
PT Modern Photo Film
Reg. (a) ................................. In 73,500 259,907
-----------
393,507
-----------
Printing & Publishing--3.1%
Singapore Press Holdings
Ltd. .................................... Si 61,800 1,244,905
-----------
Retail Trade--2.3%
Apparel & Accessory Stores--0.6%
Giordano International Ltd. . HK 354,000 242,184
-----------
Auto Dealers & Gas Stations--1.7%
Cycle & Carriage Ltd. ..................... Si 65,000 672,868
-----------
Services--3.7%
Hotels, Camps & Lodging--1.8%
Genting Berhad .............................. Ma 153,000 733,333
-----------
Miscellaneous Repair Services--1.9%
Keppel Corp. .............................. Si 137,000 608,484
Keppel Corp., Class A ..................... Si 34,250 148,528
-----------
757,012
-----------
Transportation, Communication, Electric, Gas &
Sanitary Services--18.5%
Communications--9.4%
Advanced Information
Services ................................. Th 46,000 401,313
Hong Kong
Telecommunications Ltd. . HK 493,369 1,178,176
PT Indosat ................................. In 132,000 394,856
PT Telekomunikasi
Indonesia .............................. In 250,000 408,610
Philippine Long Distance
Telephone ADR ........................... Ph 10,050 645,713
Telekom Malaysia Berhad ..................... Ma 151,500 708,140
-----------
3,736,808
-----------
Electric Services--3.4%
Hong Kong Electric
Holdings Ltd. ........................... HK 332,000 1,337,086
-----------
Gas Services--5.7%
Hong Kong & China Gas
Co., Ltd. .............................. HK 987,936 1,976,637
Petronas Gas Berhad ........................ Ma 80,000 291,543
-----------
2,268,180
-----------
See Notes to Investment Portfolio.
44
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (Continued)
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
Country
Abbrev. Shares Value
--------- --------- ------------
Wholesale Trade--0.6%
Durable Goods
Li & Fung Ltd. ............ HK 226,000 $ 253,802
------------
Total Common Stocks
(Cost of $29,363,344) ..................... 36,144,070
------------
WARRANTS--0.0%
Finance, Insurance & Real Estate
Holding & Other Investment Companies
Guangdong Investments
expires 07/30/99 (cost of
$9,184) .................. HK 80,200 17,289
------------
Total Investments
(Cost of $29,372,528) (b) .................. 36,161,359
------------
Par Value
------------ ------------
SHORT-TERM OBLIGATIONS--7.7%
Federal Home Loan Mortgage Corp.
6.000% (c) 07/01/97 ...... $3,042,000 $ 3,041,493
------------
Other Assets & Liabilities, Net--1.3% ... 521,747
------------
Net Assets--100% ........................ $39,724,599
============
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, 1997 is as follows:
Gross unrealized appreciation $ 8,875,701
Gross unrealized depreciation (2,086,870)
------------
Net unrealized appreciation $ 6,788,831
============
(c) Rate represents yield at date of purchase.
Summary of Securities by Country
Country
Country Abbrev. Value % of Total
------------------- --------- ------------- -----------
Hong Kong ......... HK $22,570,166 62.4%
Singapore ......... Si 7,229,475 20.0
Malaysia ......... Ma 3,524,421 9.8
Indonesia ......... In 1,311,098 3.6
Philippines ...... Ph 1,049,136 2.9
Thailand ......... Th 401,313 1.1
Taiwan ......... Tw 75,750 0.2
------------ ------
$36,161,359 100.0%
============ ======
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
Acronym Name
------- ----
ADR American Depository Receipt
See Notes to Financial Statements.
45
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
Keyport Variable Investment Trust Newport-Keyport Tiger Fund / June 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets:
Investments, at market value (Identified cost $29,372,528) ........................ $ 36,161,359
Short-term obligations ......................................................... 3,041,493
Cash (including foreign currencies) ............................................. 460,213
Dividends and interest receivable ................................................ 85,782
Receivable for fund shares sold ................................................ 55,025
------------
Total assets .................................................................. 39,803,872
------------
Liabilities:
Payable for fund shares repurchased ............................................. 30,689
Management fee payable ......................................................... 28,068
Bookkeeping fee payable ......................................................... 2,250
Transfer agent fee payable ...................................................... 625
Accrued expenses payable ......................................................... 17,641
------------
Total liabilities ............................................................... 79,273
------------
Net assets ........................................................................ $ 39,724,599
============
Net assets represented by:
Paid-in capital .................................................................. $ 33,824,772
Accumulated undistributed net investment income ................................. 241,438
Accumulated net realized losses on investments and foreign currency transactions (1,129,136)
Net unrealized appreciation on investments and foreign currency transactions ... 6,787,525
------------
Total net assets applicable to shares of beneficial interest outstanding ......... $ 39,724,599
============
Shares of beneficial interest outstanding ....................................... 15,026,097
============
Net asset value per share ...................................................... $ 2.64
============
</TABLE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment income:
Dividends (net of nonrebatable foreign taxes withheld at source of $36,611) ....... $ 409,990
Interest income ................................................................ 52,943
------------
Total investment income ....................................................... 462,933
------------
Expenses:
Management fee ................................................................... 157,661
Bookkeeping fee ................................................................ 13,500
Transfer agent fee ............................................................. 3,750
Audit fee ...................................................................... 6,477
Printing expense ................................................................ 2,542
Trustees' expense ............................................................. 866
Custodian fee ................................................................... 24,773
Legal expense ................................................................... 874
Miscellaneous expense .......................................................... 1,410
------------
Total expenses ................................................................ 211,853
------------
Net investment income .......................................................... 251,080
Realized and unrealized gains (losses) on investments and foreign currency transactions:
Net realized losses on investments .............................................. (1,102,826)
Net realized losses on foreign currency transactions ............................ (10,570)
Change in unrealized appreciation on investments and foreign currency transactions 2,786,104
------------
Net increase in net assets resulting from operations ............................ $ 1,923,788
============
</TABLE>
See Notes to Financial Statements.
46
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended Year Ended
June 30, December 31,
1997 1996
------------------ --------------
<S> <C> <C>
Operations:
Net investment income ......................................................... $ 251,080 $ 343,316
Net realized gains (losses) on investments .................................... (1,102,826) 109,471
Net realized losses on foreign currency transactions ........................ (10,570) (11,295)
Unrealized appreciation on investments and foreign currency transactions ...... 2,786,104 2,259,060
------------ ------------
Net increase in net assets resulting from operations ........................ 1,923,788 2,700,552
------------ ------------
Distributions declared from:
Net investment income ......................................................... -- (237,595)
Net realized gains ............................................................ -- (135,767)
------------ ------------
Total distributions ............................................................ -- (373,362)
------------ ------------
Fund share transactions:
Proceeds from fund shares sold ................................................ 7,812,551 19,071,741
Cost of fund shares repurchased ............................................. (4,654,115) (6,107,372)
Distributions reinvested ...................................................... -- 373,362
------------ ------------
Net increase in net assets resulting from fund share transactions ............ 3,158,436 13,337,731
------------ ------------
Total increase in net assets ................................................... 5,082,224 15,664,921
Net assets:
Beginning of period ......................................................... 34,642,375 18,977,454
------------ ------------
End of period ............................................................... $ 39,724,599 $34,642,375
============ ============
Accumulated undistributed net investment income included in ending net assets $ 241,438 $ 920
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold .................................................................. 3,175,866 7,766,949
Shares redeemed ............................................................... (1,896,171) (2,495,545)
Distributions reinvested ...................................................... -- 148,081
------------ ------------
Net increase .................................................................. 1,279,695 5,419,485
============ ============
</TABLE>
See Notes to Financial Statements.
47
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Keyport Variable Investment Trust Newport-Keyport Tiger Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(Unaudited)
Six Months Ended Year Ended Period Ended
June 30, December 31, December 31,
------------------ -------------- -------------
1997 1996 1995***
------------------ -------------- -------------
<S> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period ........................... $ 2.52 $ 2.28 $ 2.00
---------- ------- --------
Net investment income (a) .................................... 0.02 0.03 0.01
Net realized and unrealized gains on investments and foreign
currency transactions (a) .................................... 0.10 0.24 0.29
---------- ------- --------
Total from investment operations .............................. 0.12 0.27 0.30
---------- ------- --------
Less distributions from:
Dividends from net investment income ........................ -- (0.02) (0.01)
In excess of net investment income ........................... -- -- (0.01)
Dividends from net realized gains on investments ............ -- (0.01) --
---------- -------- --------
Total distributions .......................................... -- (0.03) (0.02)
---------- -------- --------
Net asset value, end of period ................................. $ 2.64 $ 2.52 $ 2.28
========== ======== ========
Total return:
Total investment return (b) ................................. 4.76%*** 11.73% 15.00%**
Ratios/supplemental data:
Net assets, end of period (000) .............................. $39,725 $34,642 $18,977
Ratio of net expenses to average net assets (c) ............... 1.20%* 1.27% 1.75%*
Ratio of net investment income to average net assets (c) ...... 1.42%* 1.20% 0.89%*
Portfolio turnover ratio ....................................... 6%** 7% 12%**
Average commission rate (d) .................................... $0.0103 $0.0172 --
</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.
48
<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, 1997 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. Stock Fund ("U.S. Stock
Fund"), 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 long-term capital growth and,
secondarily, preservation of capital.
Utilities Fund seeks primarily current income and, secondarily, long-term
capital growth.
International Fund for Growth seeks long-term capital growth, by investing
primarily in non-U.S. equity securities.
Strategic Income Fund seeks a high level of current income, as is consistent
with prudent risk and maximizing total return, by diversifying investments
primarily in U.S. and foreign government and high yield, high risk corporate
debt securities.
U.S. Stock Fund seeks growth over time exceeding the S&P 500 Index's
performance.
Tiger Fund seeks long-term capital growth by investing primarily in equity
securities of companies located in the nine "Tigers" of Asia (Hong Kong,
Singapore, South Korea, Taiwan, Malaysia, Thailand, Indonesia, China and the
Philippines).
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 75% 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.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
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 securities 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 gains (losses) arising from the fluctuation in
exchange rates 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 gains (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, 1996,
Utilities Fund had capital loss carryovers of $4,706,616 which will expire in
or before 2004, if not utilized.
The cost of investments purchased and proceeds from investments sold excluding
short-term investments for the six months ended June 30, 1997, for the Funds
were as follows:
Growth International
and Income Utilities Fund for
Fund Fund Growth
------------- ------------ --------------
Cost of investments
purchased ......... $10,328,763 $1,923,099 $4,777,455
Proceeds from
investments sold ... 27,080,294 6,204,858 4,279,397
Strategic
Income U.S. Stock
Fund Fund Tiger Fund
------------- ------------- -----------
Cost of investments
purchased ............ $31,724,195 $13,965,455 $3,746,652
Proceeds from
investments sold ...... 26,480,208 12,139,707 2,116,488
For Growth and Income Fund and Strategic Income Fund, none and $148,750 and
$4,137,223 and $1,737,753, respectively, represent the purchase cost and
proceeds of sales of U.S. Government securities, respectively.
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, 1997 have
been reclassified as follows:
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
Inter-
Growth national Strategic
and Income Fund for Income Tiger
Fund Growth Fund Fund
------------ ------------- ------------- -------------
Accumulated net
investment
income ......... $ (16,447) $ (17,317) $ 217,177 $ (10,562)
Accumulated net
realized gain
(losses) on
investments ... 4,722 17,316 (216,176) 10,562
Paid in capital 11,725 1 (1,001) --
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. Stock Fund ..................... 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. Stock Fund ..................... 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 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, 1998, the Manager has agreed to
reimburse all expenses, including management fees, in excess of 1.00% of
average daily net assets per annum for Growth and Income Fund, Utilities Fund
and U.S. Stock Fund, in excess of 0.80% of average daily net assets for
Strategic Income Fund and in excess of 1.75% of average daily net assets for
International Fund for Growth and Tiger Fund.
Note 6. Investment in Repurchase Agreements
Each Fund may enter into repurchase agreements, which require 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.
51
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Portfolio Manager's Discussion:
Capital Appreciation Fund ..........................................1
Managed Growth Stock Fund ..........................................3
Managed Assets Fund ................................................4
Mortgage Securities Income Fund ....................................5
Cash Income Fund ...................................................6
Financial Statements:
Capital Appreciation Fund ..........................................7
Managed Growth Stock Fund .........................................12
Managed Assets Fund ...............................................17
Mortgage Securities Income Fund ...................................23
Cash Income Fund ..................................................28
Notes to Financial Statements ........................................32
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Capital Appreciation Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Following a relatively weak first quarter, the Fund's performance rebounded in
the second quarter ended June 30, 1997, with the Fund gaining 15.6 percent, only
slightly behind the Russell 2000 return of 16.2 percent. This led to a total
return for the six months ended June 30, 1997, of 7.2 percent for the Fund
versus a 10.2 percent return for the Russell 2000. The Fund's performance
continued to strengthen in the latter part of the second quarter, gaining 6.6
percent for the month of June versus 4.3 percent for the Russell 2000.
We maintain between 30 percent and 40 percent of our total equity assets in
the Fund's 10 largest equity positions. Such concentration has enhanced the
Fund's overall return in the past. Past experience suggests that the stocks that
perform best for us are those we know most thoroughly. During the reporting
period, we added to our 10 largest holdings, increasing the concentration of the
Fund's equity assets in its top holdings to 37 percent. We believe this strategy
helped the Fund's overall performance, as our top 10 equity holdings accounted
for approximately 74 percent of the Fund's total return in the first six months.
For example, four of the Fund's top 10 holdings -- Alternative Resources (3.2
percent of total net assets), AVX Corporation (3.6 percent of total net assets),
CB Commercial Real Estate (3.8 percent of total net assets), and 20th Century
Industries (3.9 percent of total net assets) -- appreciated 17.3 percent, 25.6
percent, 53.4 percent and 24.4 percent, respectively, during the first six
months of the year.
In terms of sector performance, the Capital Appreciation Fund's best
performers in the first half of the year were in the financial, technology and
industrial sectors. Financial stocks that contributed meaningfully to the strong
performance included our specialty insurance holdings -- 20th Century
Industries, Mutual Risk Management and Meadowbrook Insurance (3.9 percent, 2.9
percent, and 3.4 percent of total net assets) -- as well as the real estate
manager and broker CB Commercial Real Estate (3.8 percent of total net assets).
Among the strongest performers in the technology sector were FiServ (3.6 percent
of total net assets), which provides data processing services to financial
companies, and Alternative Resources (3.2 percent of total net assets), which
provides human resource solutions for technology assignments. AVX Corporation
(3.6 percent of total net assets), a leading manufacturer of passive electronic
components also fared well, as demand for its products has begun to increase
following a cyclical slowdown in business volume. Strong industrial stocks
include Kent Electronics (2.8 percent of total net assets), an electronics
distributor and contract manufacturer, and Ballantyne of Omaha (1.9 percent of
total net assets), the leading producer of motion picture projectors. Finally,
Grupo Radio Centro (1.8 percent of total net assets) also did well; this owner
and operator of radio stations in Mexico benefited from improving economic
conditions.
Offsetting a portion of these gains, the Fund's energy holdings continued to
underperform in the second quarter reflecting declining oil and gas prices.
Barrett
SteinRoe Variable Investment Trust
Capital Appreciation Fund, S&P 500 and Russell 2000
Performance of a hypothetical $10,000 investment January 1, 1989,
to June 30, 1997
[line chart]********************************************************************
Capital Appreciation Fund S&P 500 Index Russell 2000 Index
1/89 10,000 10,000 10,000
12/89 13,084 13,163 11,626
12/90 11,918 12,754 9,361
12/91 16,357 16,631 13,672
12/92 18,725 17,896 16,189
12/93 25,406 19,697 19,245
12/94 25,708 19,955 18,894
12/95 28,729 27,444 24,270
12/96 36,469 33,756 28,274
6/97 39,077 40,335 31,158
********************************************************************************
- -----------------------------
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
16.7% 20.4% 17.4%
- -----------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Capital Appreciation Fund
- --------------------------------------------------------------------------------
Resources (2.3 percent of total net assets) was particularly weak based
on disappointing recent exploration results. While the Fund's three domestic
exploration and production companies have been disappointing investments in the
short term, they have been very successful long-term investments because their
management teams have succeeded in growing oil and gas reserves rapidly at a low
cost per barrel. Central European Television (3.2 percent of total net assets),
an owner and operator of television stations based in Europe, was negatively
affected by regulatory uncertainty -- subsequently resolved in way that is
favorable to the company -- and currency depreciation in the Czech Republic.
Recent new holdings include CoreStaff, a provider of information technology
staffing solutions; SPSS, a leader in statistical software; and Henry Schein, a
distributor of dental and medical products (2.3 percent, 1.8 percent, and 1.2
percent of total net assets). We also purchased shares in Helen of Troy (1.6
percent of total net assets), a designer and marketer of hair care and personal
appliances. The Fund sold CFC International, National Processing and Storm
Technology after disappointing operating results, and we eliminated Dr.
Solomon's Group after signs of more vigorous competition in the anti-virus
software market.
The Capital Appreciation Fund attempts to create wealth for its shareholders
by investing in well-selected small-cap growth companies that are
entrepreneurially managed and which trade at reasonable valuation levels. During
the reporting period we maintained an equity ratio of roughly 90 percent of
total net assets -- this is approximately the midpoint of our normal equity
ratio range of 85 percent to 95 percent. We believe the growth prospects for the
companies in the portfolio are considerably higher than for the typical company
in today's market. At the same time, the portfolio's price-earnings ratio is
only a modest premium to that of the market. In our opinion today's small-cap
investor should benefit from higher growth, without having to overpay for it.
John McLandsborough and Dick Peterson,
Portfolio Managers
Past performance is no guarantee of future results. Share price and investment
return will vary, so you may have a gain or a loss when you sell shares. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception on Jan. 1,
1989, benchmark performance is from Dec. 31, 1988, to June 30, 1997. The Russell
2000 is an unmanaged group of stocks that differs from the Fund's composition;
it is not available for direct investment. According to Lipper Analytical
Services, Inc., an independent monitor of mutual fund performance, the median
total returns for the Fund's small-cap fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 16.68 percent,
16.55 percent and 16.42 percent, respectively.
2
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Growth Stock Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
For the six months ended June 30, 1997, Managed Growth Stock Fund's return of
19.57 percent outpaced the 14.35 percent median return of its Lipper VA growth
fund peer group as well as the S&P 500 return of 19.49.
During the first half of the reporting period, growing concern about a
possible earnings slowdown prompted many investors to flee small- and mid-cap
stocks in search of the liquidity and predictability of large-cap, high-quality
growth stocks. The Fund clearly benefited from this trend, which continued into
the second half of the reporting period. Large-cap, high-quality growth stocks
have experienced a powerful market rally as their multinational focus continues
to attract investors' dollars. That's because investors have increasingly
emphasized earnings, and large-cap, high-quality stocks with a multinational
focus have, in general, reported much better earnings than their small- and
mid-cap brethren.
The pharmaceutical sector was one of our top performers, due in large part to
a string of successful new product introductions and the continued enthusiastic
support of investors who favor the noncyclical -- and relatively stable --
nature of drug company earnings. The portfolio's telecommunications equipment
providers also boosted performance, particularly companies like Motorola,
Tellabs and LM Ericcson (3.5 percent, 2.6 percent and 3.0 percent of total net
assets, respectively) that continue to provide innovative products to help solve
the need among telephone companies to upgrade systems and handle greater voice
and data capacity. Finally, global consumer franchises like Coca-Cola, Gillette
and Procter & Gamble (3.4 percent, 3.6 percent and 3.2 percent of total net
assets, respectively) continue to do well as their earnings consistently meet or
exceed expectations.
Purchases during the last six months have ranged from Motorola, a
telecommunications equipment company, and Nokia Corp., a leading international
telecommunications group; to Paychex, Inc., a provider of payroll processing
services, and Wells Fargo & Co., one of the largest bank holding companies (3.5
percent, 1.9 percent, 0.7 percent and 1.3 percent of total net assets,
respectively). We believe these companies should experience strong earnings
growth over the next few years.
We remain positive about the Fund's long-term prospects, especially since we
think that increased global competition has created a new breed of large-cap
company -- one that boasts worldwide dominance, superefficient production and an
outspoken commitment to shareholder value. In our opinion, these kinds of
companies should do well regardless of how the U.S. economy is performing.
Erik Gustafson, Portfolio Manager
Past performance is no guarantee of future results. Share price and investment
return will vary, so you may have a gain or a loss when you sell shares. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception on Jan. 1,
1989; benchmark performance is from Dec. 31, 1988, to June 30, 1997. The S&P 500
is an unmanaged group of stocks that differs from the Fund's composition; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median total
returns for the Fund's VA growth fund peer group for the one-year, five-year and
Life of Fund periods ended June 30, 1997, were 16.68 percent, 16.55 percent and
16.42 percent, respectively.
SteinRoe Variable Investment Trust
Managed Growth Stock Fund and S&P 500
Performance of a hypothetical $10,000 investment January 1, 1989,
to June 30, 1997
[line chart]********************************************************************
Managed Growth Stock Fund S&P 500 Index
1/89 10,000 10,000
12/89 13,130 13,163
12/90 12,913 12,754
12/91 19,115 16,631
12/92 20,382 17,896
12/93 21,395 19,697
12/94 20,036 19,955
12/95 27,596 27,444
12/96 33,756 33,756
6/97 40,018 40,335
********************************************************************************
- -----------------------------
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
29.7% 17.6% 17.7%
- -----------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Managed Assets Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
For the six months ended June 30, 1997, Managed Assets Fund's return of 9.17
percent lagged the 10.14 percent median return of its Lipper VA flexible
portfolio peer group, and the 19.49 percent return of the S&P 500.
Solid performances by our financial services, health care, electrical
equipment and retail holdings fueled performance. Many of our international
holdings also contributed. Our equity gains, however, were offset somewhat by
the flatter returns of our REIT and energy holdings. Our fixed income holdings
- -- dampened in the first quarter of 1997 when the rate increase caused the long
bond to more than retrace earlier gains -- rallied later in the reporting period
on the news of a possible budget deal and strong foreign demand.
To help enhance diversification, we added several new holdings, including
United HealthCare, a health care management firm; Fujitsu, a Japanese
telecommunications equipment firm; Siemens, a German electronics firm; and Santa
Fe International, an oil services firm (0.7 percent, 0.5 percent, 0.5 percent
and 0.5 percent of total net assets, respectively). We shifted out of GM and
into Honda (0.7 percent of total net assets) during the last six months, as we
think a stronger dollar could hamper U.S. automakers' ability to compete against
Japanese and German competitors.
Going forward, we believe inflation will remain moderate and economic growth
will eventually slow, which could lead to further positive returns for our bond
investments. While we think attractive equity opportunities exist overseas,
we're less positive about the domestic stock market, as we think either slowing
corporate revenues or increasing wage pressures could lead to some erosion in
profit margins. Nonetheless, we think a good bond market and strong economic
conditions should ward off any major dislocations.
Harvey Hirschhorn, Portfolio Manager
Past performance is no guarantee of future results. Share price and investment
return will vary, so you may have a gain or a loss when you sell shares. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. Life of Fund is from Fund inception of Jan. 1,
1989; benchmark performance is from Dec. 31, 1988, to June 30, 1997. The S&P 500
is an unmanaged group of stocks that differs from the Fund's composition; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median total
returns for the Fund's VA flexible portfolio fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 19.49 percent,
13.11 percent and 13.10 percent, respectively.
SteinRoe Variable Investment Trust
Managed Assets Fund and S&P 500
Performance of a hypothetical $10,000 investment January 1, 1989,
to June 30, 1997
[line chart]********************************************************************
Managed Assets Fund S&P 500 Index
1/89 10,000 10,000
12/89 12,238 13,163
12/90 12,154 12,754
12/91 15,549 16,631
12/92 16,720 17,896
12/93 18,273 19,697
12/94 17,690 19,955
12/95 22,189 27,444
12/96 25,657 33,756
6/97 28,010 40,335
********************************************************************************
- -----------------------------
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
18.5% 12.4% 12.9%
- -----------------------------
4
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
For the six months ended June 30, 1997, Mortgage Securities Income Fund's return
of 3.35 percent outpaced the 3.24 percent median return of its Lipper U.S.
government fund peer group, but trailed the 3.92 percent return of the Lehman
Mortgage-Backed Securities Index.
We gradually have reduced the Fund's mortgage-backed holdings throughout the
reporting period as they have become less attractive. We are now near the lower
end of our historical allocation range for mortgages. That's because we believe
mortgages are generally overvalued as a result of both strong investor demand
for these securities and low volatility in the bond market. We sold current
coupon and premium coupon mortgages because we think these are the most likely
to underperform if interest rates decline and prepayment risk increases. We
have, however, held onto lower- and higher-coupon mortgage securities that we
think are the most attractive in the current environment.
We view asset-backed securities collateralized by home equity loans and
manufactured housing loans as very attractive. These securities have less
prepayment risk than most mortgage-backed securities and, on a risk-adjusted
basis, have attractive yields relative to mortgage-backed securities. We
currently have 9.6 percent of the Fund invested in asset-backed securities.
Going forward, we believe Treasury securities will outperform mortgages over
the next three to six months. Currently, mortgages do not offer enough yield to
compensate for the prepayment risk inherent in these securities. Within the
mortgage market, we think discount and premium coupons are attractive relative
to current coupons. Given our favorable outlook for the economy, we believe
corporate bonds may outperform both Treasuries and mortgages.
Michael Kennedy, Portfolio Manager
Past performance is no guarantee of future results. Share price and investment
return will vary, so you may have a gain or a loss when you sell shares.
Portfolio holdings as of June 30, 1997; portfolio data subject to change. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. The Fund is neither insured nor guaranteed by
the U.S. government. Life of Fund is from Fund inception on Jan. 1, 1989;
benchmark performance is from Dec. 31, 1988, to June 30, 1997. The Lehman
Mortgage-Backed Securities Index represents an unmanaged group of
mortgage-backed securities that differs from the composition of the Fund; it is
not available for direct investment. According to Lipper Analytical Services,
Inc., an independent monitor of mutual fund performance, the median returns for
the Fund's U.S. government fund peer group for the one-year, five-year and Life
of Fund periods ended June 30, 1997, were 7.49 percent, 6.23 percent and 8.75
percent, respectively.
SteinRoe Variable Investment Trust
Mortgage Securities Income Fund and Lehman Mortgage-Backed Securities Index
Performance of a hypothetical $10,000 investment January 1, 1989,
to June 30, 1997
[line chart]********************************************************************
Mortgage Securities Lehman Mortgage-Backed
Income Fund Securities Index
1/89 10,000 10,000
12/89 11,284 11,535
12/90 12,311 12,772
12/91 14,094 14,779
12/92 14,933 15,809
12/93 15,868 16,890
12/94 15,619 16,618
12/95 18,077 19,411
12/96 18,924 20,449
6/97 19,561 21,251
********************************************************************************
- -----------------------------
Average Annual Total Return
at June 30, 1997
1-Year 5-Year Inception
8.3% 6.2 8.2%
- -----------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER'S DISCUSSION
SteinRoe Variable Investment Trust Cash Income Fund
- --------------------------------------------------------------------------------
Dear Contract Owner:
Cash Income Fund finished the six-month reporting period with a 2.49 percent
total return, just ahead of the 2.48 percent median return for its money market
fund peer group.
The Fund's yield reflects the see-saw environment of interest rates that has
been in effect throughout much of the last year. One year ago, the Federal
Reserve had just shifted from an easing to a neutral mode, as its series of rate
cuts designed to bring the economy to a soft landing appeared successful.
Throughout this year, the economy's mixed signals sent money market rates up and
down, but in a fairly tight range. In late March 1997, economic signposts
pointed to an economy that was growing too quickly, and the Federal Reserve
tightened rates by a quarter of a percentage point. Since then, however,
economic growth appears to have slowed to a more sustainable rate and the
Federal Reserve has stood firm on interest rates.
During times of economic uncertainty, we look for pockets of opportunity to
potentially enhance the Fund's yield. While the Federal Reserve was in its
easing-to-neutral mode, we added to our holdings of Federal agency securities to
lock in higher yields on longer-term securities. The middle two quarters of the
fiscal year brought mixed economic signals. As a result, we increased our
allocation of shorter-term commercial paper. This benefited the Fund because
many investors expected a tightening move.
As we approached fiscal year end, investors began to anticipate further rate
hikes and we looked to add corporate "floaters" to the Fund at attractive
spreads. We like these variable-rate corporate notes because they have one-year
maturities and their coupons adjust or "float" quarterly with market rates. Not
only do they offer high current yield potential, they also offer additional
yield potential because their coupons will float up to at least market rate
yields should the Federal Reserve raise interest rates. We are very selective in
the floaters we purchase. Of course we consider them for their defensive
characteristics in a rising-rate environment, but we also look for an attractive
current coupon. In this way, even if the Federal Reserve goes into a neutral
mode we can continue to capture additional yield potential.
Going forward, we plan to keep the Fund's average maturity shorter because
there is still a slim chance that the Federal Reserve may raise interest rates
at one of its next meetings. By maintaining a neutral maturity range, The Fund
is positioned to respond accordingly to the outcome of those meetings or other
significant economic events. As always, we'll look for opportunities to add
longer-maturity securities at attractive rates.
Jane Naeseth, Portfolio Manager
Past performance is no guarantee of future results. Share price and investment
return will vary, so you may have a gain or a loss when you sell shares. Total
return performance includes changes in share price and reinvestment of income
and capital gains distributions. An investment in the Fund is neither insured
nor guaranteed by the U.S. government, and there is no assurance that the Fund
will be able to maintain its stable net asset value of $1 per share. Life of
Fund is from fund inception on January 1, 1989. According to Lipper Analytical
Services, Inc., an independent monitor of mutual fund performance, the median
total returns for the Fund's money market fund peer group for the one-year,
five-year and Life of Fund periods ended June 30, 1997, were 5.04 percent, 4.21
percent and 5.30 percent, respectively.
6
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Market
Shares Value
--------- -----------
COMMON STOCKS--(92.2%)
Auto Accessories--(2.2%)
Superior Industries International, Inc. 168,000 $ 4,452,000
-----------
Banks/Savings and Loans--(2.0%)
Grupo Financiero Inbursa 670,000 2,804,827
Rancho Santa Fe National Bank (a) 111,900 1,188,938
-----------
3,993,765
-----------
Broadcasting/Media--(9.8%)
Central European Media Enterprises
Ltd. (a) 243,900 6,341,400
Grupo Radio Centro ADSs (a) 311,000 3,654,250
Hollinger International, Inc. 350,000 3,915,625
Metro Networks, Inc. (a) 237,900 5,769,075
-----------
19,680,350
-----------
Business Services--(17.2%)
Alternative Resources Corporation (a) 310,600 6,328,475
CORESTAFF, Inc. (a) 168,000 4,536,000
Covance, Inc. (a) 252,400 4,874,475
Danka Business Systems Plc ADRs 89,000 3,637,875
G & K Services Cl. A 211,000 7,859,750
Interim Services Inc. (a) 140,400 6,247,800
Investors Financial Services Corporation 25,000 1,187,500
-----------
34,671,875
-----------
Computer Hardware and Software--(4.9%)
Microware Systems Corporation (a) 125,600 1,114,700
SPSS, Inc. (a) 125,000 3,625,000
Zebra Technologies Corporation (a) 180,100 5,020,287
-----------
9,759,987
-----------
Computer Services--(3.6%)
Fiserv Inc. (a) 161,600 7,211,400
-----------
Consumer Electronics/Appliances--(1.6%)
Helen of Troy Ltd. (a) 124,500 3,190,312
-----------
Diversified Operations--(0.1%)
Fischer Companies, Inc. 800 104,000
-----------
Drugs--(0.9%)
Ligand Pharmaceuticals, Inc. (a) 140,000 1,802,500
-----------
Educational Services--(1.7%)
Firearms Training Systems, Inc. (a) 255,800 3,517,250
-----------
Electrical Power Generation--(1.0%)
AES Corporation (a) 27,000 1,910,250
-----------
Electrical Equipment--(8.3%)
AVX Corp. 265,300 $ 7,163,100
Ballantyne of Omaha, Inc. (a) 215,000 3,870,000
Kent Electronics Corporation (a) 155,000 5,686,563
-----------
16,719,663
-----------
Electronic Components--(0.1%)
Zytec Corporation (a) 7,600 142,500
-----------
Equipment Rental & Leasing--(2.1%)
U.S. Rentals, Inc. (a) 168,100 4,255,031
-----------
Food Distributor--(2.2%)
Richfood Holdings, Inc. 169,000 4,394,000
-----------
Insurance--(10.2%)
Meadowbrook Insurance Group, Inc. 271,400 6,768,037
Mutual Risk Management Ltd. 126,666 5,810,803
20th Century Industries, Inc. 373,100 7,835,100
-----------
20,413,940
-----------
Medical Equipment--(4.6%)
National Dentex Corporation (a) 15,800 300,200
Urologix, Inc. (a) 171,900 2,922,300
Uroquest Medical Corporation (a) 255,000 1,657,500
Xomed Surgical Products Inc. (a) 215,400 4,308,000
-----------
9,188,000
-----------
Oil/Gas--(6.2%)
Barrett Resources Corp. (a) 153,800 4,604,387
Cross Timbers Oil Company 133,500 2,569,875
Devon Energy Corporation 144,300 5,303,025
-----------
12,477,287
-----------
Real Estate Development/Management--(3.8%)
Beacon Properties Corporation 4,600 153,525
CB Commercial Real Estate Services
Group, Inc. (a) 248,100 7,536,038
-----------
7,689,563
-----------
Retail--(3.0%)
Garden Botanika, Inc. (a) 135,000 810,000
Video Update, Inc. (a) 557,000 2,471,687
Whole Foods Market, Inc. (a) 82,500 2,732,813
-----------
6,014,500
-----------
Specialty Chemicals--(2.7%)
ChemFirst, Inc. 197,900 5,368,038
-----------
7
<PAGE>
SCHEDULE OF INVESTMENTS Market
(Continued) Shares Value
--------- -----------
COMMON STOCKS (Continued)
Telecommunications--(2.1%)
Western Wireless Corporation (a) 270,200 $ 4,289,425
------------
Wholesale Distribution--(1.9%)
AmeriSource Distribution
Corporation (a) 30,000 1,496,250
Henry Schein, Inc. (a) 75,500 2,359,375
------------
3,855,625
------------
Total Common Stocks (Cost $158,432,119) 185,101,261
------------
Market
Par Value
--------- -----------
SHORT-TERM INVESTMENTS--(7.7%)
Associates Corp. of North America
6.200% 7/01/97 $8,350,000 $ 8,350,000
Louisiana Land & Exploration
5.820% 7/01/97 7,000,000 7,000,000
------------
Total Short-Term Investments
(Cost $15,350,000) 15,350,000
------------
Total Investments--(99.9%)
(Cost $173,782,119) (b) 200,451,261
Other Assets, less Liabilities--(0.1%) 166,536
------------
Net Assets (100%) $200,617,797
============
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is identical. Gross
unrealized appreciation and depreciation on investments at June 30, 1997 is
as follows:
Gross unrealized appreciation: $30,891,072
Gross unrealized depreciation: (4,221,930)
-----------
$26,669,142
============
See Notes to Financial Statements.
8
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Capital Appreciation Fund /
June 30, 1997 (Unaudited)
================================================================================
<TABLE>
<S> <C>
Assets:
Investments, at market value (identified cost $173,782,119) $200,451,261
Cash (including foreign currencies) 51,868
Receivable for investments sold 1,000,892
Receivable for fund shares sold 291,460
Dividends and interest receivable 55,792
Other assets 14,988
------------
Total assets 201,866,261
------------
Liabilities:
Payable for investments purchased 823,875
Payable for fund shares repurchased 282,967
Payable to adviser 101,086
Accrued expenses payable 40,536
------------
Total liabilities 1,248,464
------------
Net assets $200,617,797
============
Net assets represented by:
Paid-in capital $171,307,315
Accumulated undistributed net investment income 173,347
Accumulated net realized gains on investments and foreign currency transactions 2,471,047
Net unrealized appreciation on investments and foreign currencies 26,666,088
------------
Total net assets applicable to outstanding shares of beneficial interest $200,617,797
============
Shares of beneficial interest outstanding 11,216,330
============
Net asset value per share $17.89
=======
</TABLE>
================================================================================
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997 (Unaudited)
================================================================================
<TABLE>
<S> <C>
Investment income:
Dividends (net of foreign taxes withheld) $ 502,255
Interest income 381,169
-------------
Total investment income 883,424
-------------
Expenses:
Management fee 468,624
Administrative fee 140,587
Custodian fee 25,340
Accounting fee 14,234
Printing expense 16,860
Audit and legal fees 9,050
Trustees' fees 7,512
Transfer agent fee 3,620
Miscellaneous expense 3,024
-------------
Total expenses 688,851
-------------
Net investment income 194,573
Realized and unrealized gains on investments:
Net realized gains on investments 2,492,277
Net realized gains on foreign currency transactions 2,606
Change in unrealized appreciation or depreciation of investments 10,384,294
-------------
Net increase in net assets resulting from operations $ 13,073,750
=============
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Capital Appreciation Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Year Ended
June 30, 1997 December 31,
(Unaudited) 1996
------------ -------------
<S> <C> <C>
Operations:
Net investment income $ 194,573 $ 340,782
Net realized gains on investments 2,492,277 37,125,858
Net realized gains (losses) on foreign currency transactions 2,606 (19,291)
Change in unrealized appreciation or depreciation of investments 10,384,294 1,982,076
------------ ------------
Net increase in net assets resulting from operations 13,073,750 39,429,425
------------ ------------
Distributions declared from:
Net investment income (265,000) --
Net realized gains on investments (36,940,000) --
------------ ------------
Total distributions (37,205,000) --
------------ ------------
Fund share transactions:
Proceeds from fund shares sold 27,403,142 59,130,137
Cost of fund shares repurchased (36,078,115) (45,588,671)
Distributions reinvested 37,205,000 --
------------ ------------
Net increase in net assets resulting from fund share transactions 28,530,027 13,541,466
------------ ------------
Total increase in net assets 4,398,777 52,970,891
Net assets:
Beginning of period 196,219,020 143,248,129
------------ ------------
End of period $200,617,797 $196,219,020
============ ============
Accumulated undistributed net investment income included in ending net assets $ 173,347 $ 243,774
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold 1,561,687 3,135,974
Shares repurchased (2,065,204) (2,445,679)
Distributions reinvested 2,256,218 --
------------ ------------
Net increase 1,752,701 690,295
============ ============
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Capital Appreciation Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 -------------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
------------ --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of year $ 20.73 $ 16.33 $ 14.74 $ 16.53 $ 15.34 $ 15.32
--------- --------- --------- --------- -------- --------
Net investment income 0.02 0.04 0.04 0.06 0.03 --
Net realized and unrealized gains
on investments and foreign currency
transactions 1.13 4.36 1.69 0.09 5.22 2.17
--------- --------- --------- --------- -------- --------
Total from investment operations 1.15 4.40 1.73 0.15 5.25 2.17
--------- --------- --------- --------- -------- --------
Less distributions:
Dividends from net investment income (0.03) -- (0.04) (0.07) (0.02) --
Distributions from net realized gains
on investments (3.96) -- (0.10) (1.87) (4.04) (2.15)
--------- --------- --------- --------- -------- --------
Total distributions (3.99) -- (0.14) (1.94) (4.06) (2.15)
--------- --------- --------- --------- -------- --------
Net asset value, end of year $ 17.89 $ 20.73 $ 16.33 $ 14.74 $ 16.53 $ 15.34
======== ======== ======== ======== ======= =======
Total return:
Total investment return 7.15% 26.94% 11.75% 1.19%(b) 35.68%(b) 14.48%
Ratios/supplemental data:
Net assets, end of period (000's) $200,618 $196,219 $143,248 $134,078 $96,544 $52,135
Ratio of expenses to average net assets 0.74%(c) 0.75% 0.76% 0.80%(a) 0.84%(a) 1.01%
Ratio of net investment income to average
net assets 0.21%(c) 0.20% 0.26% 0.44%(b) 0.13%(b) (0.01)%
Portfolio turnover ratio 38% 100% 132% 144% 112% 85%
Average commissions (per share) $ 0.0353 $ 0.0251 -- -- -- --
</TABLE>
(a) These ratios were not materially affected by the reimbursement of certain
expenses by the Adviser and Administrator.
(b) Computed giving effect to the Investment Adviser's and the Administrator's
expense limitation undertaking.
(c) Annualized.
See Notes to Financial Statements.
11
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1997 (Unaudited)
================================================================================
Market
Shares Value
--------- -----------
COMMON STOCKS--(96.1%)
Banks--(6.1%)
Citicorp 40,000 $ 4,822,500
MBNA Corp. 123,750 4,532,344
Wells Fargo & Company 10,000 2,695,000
---------
12,049,844
---------
Business Services--(2.9%)
First Data Corporation 100,000 4,393,750
Paychex, Inc. 35,000 1,330,000
---------
5,723,750
---------
Computers and Computer Software--(8.0%)
Cisco Systems, Inc. (a) 65,000 4,363,125
Intel Corporation 35,000 4,963,437
Microsoft Corp. (a) 50,000 6,318,750
---------
15,645,312
---------
Consumer Related--(9.0%)
CUC International, Inc. (a) 165,000 4,259,063
The Gillette Company 75,000 7,106,250
The Proctor & Gamble Co. 45,000 6,356,250
---------
17,721,563
---------
Drugs--(7.5%)
Eli Lilly & Co. 50,000 5,465,625
Merck & Co. 55,000 5,692,500
SmithKline Beecham Plc ADRs 40,000 3,665,000
---------
14,823,125
--------
Electrical Equipment--(3.3%)
General Electric Company 100,000 6,537,500
---------
Energy--(4.0%)
Schlumberger Ltd. 40,000 5,000,000
Renaissance Energy Ltd. (a) 100,000 2,783,617
---------
7,783,617
---------
Financial Services--(3.1%)
Federal National Mortgage
Association 140,000 6,107,500
---------
Food/Beverage/Tobacco--(5.8%)
The Coca Cola Company 100,000 6,750,000
Phillip Morris Companies, Inc. 105,000 4,659,375
---------
11,409,375
---------
Health Care--(4.5%)
Johnson & Johnson 80,000 5,150,000
United Healthcare Corp. 70,000 3,640,000
---------
8,790,000
---------
Hotel--(3.6%)
HFS, Inc. 70,000 $ 4,060,000
Sun International Hotels Ltd. (a) 80,000 2,955,000
---------
7,015,000
---------
Insurance--(6.6%)
American International Group, Inc. 37,500 5,601,562
The Travelers, Inc. 115,000 7,252,188
---------
12,853,750
---------
Leisure & Entertainment--(2.0%)
Disney (Walt) Co. 50,000 4,012,500
---------
Medical Supplies--(4.2%)
Baxter International Inc. 65,000 3,396,250
Medtronic, Inc. 60,000 4,860,000
---------
8,256,250
---------
Retail--(4.6%)
The Home Depot, Inc. 70,000 4,825,625
Kohl's Corp. (a) 80,000 4,235,000
---------
9,060,625
---------
Restaurants--(1.7%)
McDonald's Corporation 70,000 3,381,875
---------
Rubber, Plastic & Related--(2.6%)
Illinois Tool Works Inc. 100,000 4,993,750
---------
Technology Services--(4.4%)
Tellabs Inc. (a) 90,000 5,028,750
Thermo Electron Corp. (a) 105,000 3,570,000
---------
8,598,750
---------
Telecommunications--(12.2%)
LM Ericcson Telecommunications
ADRs Class B 150,000 5,906,250
Lucent Technologies Inc. 55,000 3,963,438
Motorola, Inc. 90,000 6,840,000
Nokia Corporation ADRs Class A 50,000 3,687,500
WorldCom Inc. (a) 110,000 3,520,000
---------
23,917,188
---------
Total Common Stocks
(Cost $100,201,164) 188,681,274
---------
See Notes to Financial Statements.
12
<PAGE>
SCHEDULE OF INVESTMENTS Market
(Continued) Par Value
--------- -----------
SHORT-TERM INVESTMENTS--(5.9%)
Associates Corp. of North America
6.200% 7/01/97 $8,570,000 $ 8,570,000
Louisiana Land & Exploration
5.820% 7/01/97 3,000,000 3,000,000
---------
Total Short-Term Investments
(Cost $11,570,000) 11,570,000
---------
Total Investments--(102%)
(Cost $111,771,164) (b) 200,251,274
Other Assets, less Liabilities--(-2%) (4,083,789)
---------
Net Assets (100%) $196,167,485
============
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is $111,772,404.
Gross unrealized appreciation and depreciation at June 30, 1997, is as
follows:
Gross unrealized appreciation: $89,125,263
Gross unrealized depreciation: (646,393)
---------
Net unrealized appreciation: $88,478,870
=========
See Notes to Financial Statements.
13
<PAGE>
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Managed Growth Stock Fund /
June 30, 1997 (Unaudited)
===============================================================================
<TABLE>
<S> <C>
Assets:
Investments, at market value (identified cost $111,771,164) $200,251,274
Cash 53,657
Receivable for investments sold 814,728
Receivable for fund shares sold 111,044
Dividends receivable 166,700
Other assets 14,752
-------------
Total assets 201,412,155
-------------
Liabilities:
Payable for investments purchased 4,821,035
Payable for fund shares repurchased 299,647
Management fee payable 64,641
Administrative fee payable 19,409
Accrued expenses payable 38,720
Other liabilities 1,218
-------------
Total liabilities 5,244,670
-------------
Net assets $196,167,485
=============
Net assets represented by:
Paid-in capital $105,092,952
Accumulated undistributed net investment income 339,549
Accumulated net realized gains on investments 2,254,613
Net unrealized appreciation on investments and foreign currencies 88,480,371
-------------
Total net assets applicable to outstanding shares of beneficial interest $196,167,485
=============
Shares of beneficial interest outstanding 6,005,671
=============
Net asset value per share $32.66
===========
</TABLE>
===============================================================================
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1997 (Unaudited)
===============================================================================
<TABLE>
<S> <C>
Investment income:
Dividends (net of foreign taxes withheld) $ 749,994
Interest income 239,100
-------------
Total investment income 989,094
-------------
Expenses:
Management fee 441,492
Administrative fee 132,448
Accounting fee 14,380
Custodian fee 9,955
Audit and legal fees 8,145
Trustees' fees 6,774
Printing expense 5,430
Transfer agent fee 3,620
SEC & State registration fees 1,810
Miscellaneous expense 4,185
-------------
Total expenses 628,239
-------------
Net investment income 360,855
Realized and unrealized gains on investments:
Net realized gains on investments 2,278,824
Change in unrealized appreciation or depreciation of investments 29,219,646
-------------
Net increase in net assets resulting from operations $ 31,859,325
=============
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
===============================================================================
STATEMENT OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31,
(Unaudited) 1996
------------- ------------
<S> <C> <C>
Operations:
Net investment income $ 360,855 $ 728,925
Net realized gains on investments 2,278,824 7,580,182
Change in unrealized appreciation or depreciation of investments 29,219,646 20,202,757
------------ ------------
Net increase in net assets resulting from operations 31,859,325 28,511,864
------------ ------------
Distributions declared from:
Net investment income (710,000) --
Net realized gains on investments (7,500,000) --
------------ ------------
Total distributions (8,210,000) --
------------ ------------
Fund share transactions:
Proceeds from fund shares sold 18,414,418 22,263,141
Cost of fund shares repurchased (15,985,232) (25,729,831)
Distributions reinvested 8,210,000 --
------------ ------------
Net increase (decrease) in net assets resulting from fund share transactions 10,639,186 (3,466,690)
------------ ------------
Total increase in net assets 34,288,511 25,045,174
Net assets:
Beginning of period 161,878,974 136,833,810
------------ ------------
End of period $196,167,485 $161,878,984
============ ============
Accumulated undistributed net investment income
included in ending net assets $ 339,549 $ 688,694
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold 611,998 854,357
Shares repurchased (539,013) (997,588)
Distributions reinvested 274,215 --
------------ ------------
Net increase (decrease) 347,200 (143,231)
============ ============
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Growth Stock Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997
(Unaudited)
----------------
<S> <C>
Per share operating performance:
Net asset value, beginning of year $ 28.61
--------
Net investment income 0.06
Net realized and unrealized gains (losses)
on investments 5.41
--------
Total from investment operations 5.47
--------
Less distributions:
Dividends from and in excess of net investment income (0.12)
Distributions from and in excess of net realized gains
on investments (1.30)
--------
Total distributions (1.42)
--------
Net asset value, end of year $ 32.66
========
Total return:
Total investment return 19.57%
Ratios/supplemental data:
Net assets, end of period (000's) $196,167
Ratio of expenses to average net assets 0.70%(a)
Ratio of net investment income to average net assets 0.41%(a)
Portfolio turnover ratio 11%
Average commissions (per share) $ 0.0590
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------
1996 1995 1994 1993 1992
--------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of year $ 23.59 $ 18.11 $ 20.65 $ 20.10 $ 19.47
--------- -------- ------- -------- -------
Net investment income 0.13 0.15 0.15 0.13 0.11
Net realized and unrealized gains (losses)
on investments 4.89 6.68 (1.46) 0.86 1.18
--------- -------- ------- -------- -------
Total from investment operations 5.02 6.83 (1.31) 0.99 1.29
--------- -------- ------- -------- -------
Less distributions:
Dividends from and in excess of net investment income -- (0.15) (0.17) (0.12) (0.10)
Distributions from and in excess of net realized gains
on investments -- (1.20) (1.06) (0.32) (0.56)
--------- -------- ------- -------- -------
Total distributions -- (1.35) (1.23) (0.44) (0.66)
--------- -------- ------- -------- -------
Net asset value, end of year $ 28.61 $ 23.59 $ 18.11 $ 20.65 $ 20.10
========= ======== ======= ======== =======
Total return:
Total investment return 21.28% 37.73% (6.35)% 4.97% 6.63%
Ratios/supplemental data:
Net assets, end of period (000's) $161,879 $136,834 $98,733 $111,561 $64,402
Ratio of expenses to average net assets 0.73% 0.74% 0.77% 0.83% 0.97%
Ratio of net investment income to average net assets 0.49% 0.72% 0.75% 0.77% 0.63%
Portfolio turnover ratio 35% 41% 72% 77% 20%
Average commissions (per share) $ 0.0534 -- -- -- --
</TABLE>
See Notes to Financial Statements.
16
<PAGE>
===============================================================================
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Managed Asset Fund /
June 30, 1997 (Unaudited)
===============================================================================
Market
Shares Value
--------- -----------
COMMON STOCKS--(56.7%)
Automotive--(0.7%)
Honda Motor Company, Ltd. ADRs 35,000 $ 2,106,562
-----------
Banks--(5.2%)
BankAmerica Corporation 56,000 3,615,500
Bank One Corporation 58,295 2,823,664
Citicorp 26,000 3,134,625
Royal Bank of Scotland Group Plc 297,263 2,780,656
Wells Fargo & Company 6,000 1,617,000
Westpac Banking Corporation Ltd. 415,000 2,477,937
-----------
16,449,382
-----------
Building and Construction--(0.5%)
Fluor Corporation 30,000 1,655,625
-----------
Chemicals--(1.0%)
Praxair, Inc. 55,000 3,080,000
-----------
Computers--(0.7%)
International Business Machines 26,000 2,344,875
-----------
Computer Software and Services--(1.0%)
Electronic Data Systems Corporation 40,000 1,640,000
Fujitsu Ltd. 110,000 1,528,445
-----------
3,168,445
-----------
Data Products & Reproduction--(1.0%)
Canon, Inc. 120,000 3,271,869
-----------
Drugs/Health Care--(6.3%)
American Home Products Corp. 38,000 2,907,000
Elan Corporation Plc ADRs (a) 70,000 3,167,500
Eli Lilly & Company 35,000 3,825,938
Novartis ADRs 50,000 4,002,465
SmithKline Beecham Plc ADRs 41,000 3,756,625
United Healthcare Corporation 42,000 2,184,000
-----------
19,843,528
-----------
Electrical Equipment--(3.7%)
Emerson Electric Co. 62,000 3,413,875
General Electric Company 50,000 3,268,750
Hubbell Inc., Class B 80,000 3,520,000
Siemens AG 25,000 1,498,565
-----------
11,701,190
-----------
Electronics--(4.6%)
Analog Devices, Inc. 75,000 $ 1,992,187
Harris Corp. 35,000 2,940,000
Intel Corporation 21,000 2,978,062
Motorola, Inc. 53,000 4,028,000
Sony Corporation Sponsored ADRs 29,000 2,552,000
-----------
14,490,249
-----------
Environmental Services--(0.5%)
WMX Technologies Inc. 50,000 1,606,250
-----------
Fabricated Metal Products--(1.0%)
Crown Cork & Seal, Inc. 59,000 3,152,813
-----------
Fertilizers--(0.8%)
Potash Corp. of Saskatchewan Inc. 36,000 2,702,250
-----------
Financial Services--(0.9%)
Federal National Mortgage Association 67,000 2,922,875
-----------
Food/Beverage/Tobacco--(2.7%)
PepsiCo, Inc. 70,000 2,629,375
Philip Morris Companies, Inc. 75,000 3,328,125
Sara Lee Corporation 60,000 2,497,500
-----------
8,455,000
-----------
Holding--(0.8%)
Swire Pacific Ltd. Class A (a) 300,000 2,700,976
-----------
Hotels--(0.7%)
HFS Inc. (a) 41,000 2,378,000
-----------
Housewares--(1.1%)
Newell Co. 85,000 3,368,125
-----------
Insurance--(1.2%)
American States Financial Corporation 85,000 3,910,000
-----------
Medical Supplies--(1.1%)
Baxter International Inc. 68,000 3,553,000
-----------
Multi-Industry--(0.8%)
Honeywell, Inc. 32,000 2,428,000
-----------
See Notes to Financial Statements.
17
<PAGE>
SCHEDULE OF INVESTMENTS Market
(Continued) Shares Value
--------- ---------
Oil/Gas--(6.7%)
Baker Hughes Inc. 75,000 $ 2,901,563
ELF Aquitaine Sponsored ADRs 40,000 2,177,500
El Paso Natural Gas Company 45,800 2,519,000
Enron Corp. 50,000 2,040,625
Mobil Corporation 44,000 3,074,500
Santa Fe International Corporation (a) 45,400 1,543,600
Schlumberger Ltd. 14,000 1,750,000
Tosco Corporation 90,000 2,694,375
United Meridian Corporation (a) 78,000 2,340,000
-----------
21,041,163
-----------
Paper & Forest Products--(1.0%)
Plum Creek Timber Company 94,000 3,019,750
-----------
Publishing & Broadcasting--(0.7%)
World Color Press, Inc. (a) 90,000 2,137,500
-----------
Real Estate--(2.8%)
Avalon Properties, Inc. 76,000 2,175,500
Reckson Associates Realty
Corporation 103,800 2,387,400
The Rouse Company 70,587 2,082,317
Security Capital Industrial Trust 100,000 2,150,000
-----------
8,795,217
-----------
Retail--(3.0%)
Home Depot, Inc. 50,000 3,446,875
Jusco Co. 80,000 2,705,584
Wal-Mart Stores, Inc. 100,000 3,381,250
-----------
9,533,709
-----------
Telecommunications--(3.7%)
Airtouch Communications, Inc. (a) 90,000 2,463,750
GTE Corporation 62,000 2,720,250
LM Ericsson Telecommunications Co.
ADRs Class B 90,000 3,543,750
Telefonica de Argentina S.A. ADRs 85,000 2,943,125
-----------
11,670,875
-----------
Transportation--(1.0%)
Canadian National Railway 70,000 3,062,500
-----------
Utilities--(0.8%)
Empresa Nacional De Electricidad
ADRs 30,000 2,551,875
-----------
Water Treatment Systems--(0.7%)
U.S. Filter Corporation (a) 75,000 2,043,750
-----------
Total Common Stocks
(Cost $129,105,675) 179,145,353
-----------
Market
Par Value
--------- -----------
LONG-TERM OBLIGATIONS--(40.1%)
Air Transportation--(0.8%)
Federal Express Corporation 1994
Pass-Through Certificates Series
A310-A1 7.530% 9/23/06 $1,906,583 $ 1,920,272
United Airlines Corporation Series
1991-A-1 9.200% 3/22/08 669,937 736,079
-----------
2,656,351
-----------
Asset-Backed Securities--(1.5%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 1,989,855 2,024,657
American Mortgage Trust Series 1993-3
Class 3B 8.190% 9/27/22 2,130,207 1,998,241
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 866,513 865,880
-----------
4,888,778
-----------
Banks--(2.1%)
Den Danske Bank 6.550% 9/15/03 2,250,000 2,190,893
Deutsche Ausbank 7.000% 9/24/01 2,250,000 2,287,463
First Chicago NBD 6.125% 2/15/06 2,250,000 2,100,015
-----------
6,578,371
-----------
Construction & Housing (0.8%)
Hanson Overseas 6.750% 9/15/05 2,500,000 2,436,800
-----------
Drugs/Healthcare--(1.8%)
Glaxo Wellcome Plc 6.125% 1/25/06 2,500,000 2,368,800
Nationwide Health Property Inc.
Conv. Deb. 6.250% 1/01/99 3,400,000 3,463,750
-----------
5,832,550
-----------
Extractive-Energy--(0.9%)
BOC Group Plc 5.875% 1/29/01 2,750,000 2,678,390
-----------
Foreign Government Regional Bond--(0.9%)
Corporacion Andina de Fomento
6.625% 10/14/98 (c) 2,900,000 2,913,224
-----------
Financial--(1.3%)
Associates Corporation of North America
7.500% 4/15/02 4,000,000 4,110,400
-----------
Insurance (0.8%)
Prudential Insurance Co.
7.650% 7/1/07 (c) 2,500,000 2,537,500
-----------
See Notes to Financial Statements.
18
<PAGE>
SCHEDULE OF INVESTMENTS Market
(Continued) Par Value
--------- -----------
Mortgage-Backed Securities--(0.1%)
Lennar Central Partners Limited
Partnership Series 1994-1 Class C
8.120% 9/15/02 (c) $ 155 $ 155
MDC Mortgage Funding Corporation
Series Q Class 5 8.850% 3/20/18 207,846 211,442
------------
211,597
------------
Oil/Gas--(0.5%)
SFP Pipeline Holdings, Inc. Conv. Deb.
11.160% 8/15/10 1,400,000 1,722,000
------------
U.S. Government and Agency Obligations--(28.6%)
Federal Home Loan Mortgage
Corporation
6.500% 12/01/10 Gold 951,646 935,858
6.500% 5/01/11 Gold 867,247 852,859
6.500% 6/01/11 Gold 5,651,717 5,557,955
12.000% 7/01/20 Gold 1,383,790 1,577,950
6.500% 3/01/26 Gold 3,847,896 3,695,981
6.500% 6/01/26 Gold 2,442,088 2,345,674
6.500% 2/01/27 Gold 989,262 948,148
6.500% 3/01/27 Gold 2,968,497 2,845,126
6.500% 4/01/27 Gold 989,265 948,151
Federal National Mortgage Association
8.000% 4/13/05 1,500,000 1,518,150
Government National Mortgage
Association
7.125% 7/20/25 ARM 1,153,413 1,183,425
8.000% 3/15/26 4,760,651 4,876,716
U.S. Treasury Bonds
7.875% 8/15/01 1,500,000 1,581,195
7.250% 5/15/16 7,000,000 7,301,140
7.875% 2/15/21 4,500,000 5,017,860
7.125% 2/15/23 4,500,000 4,635,270
U.S. Treasury Notes
6.375% 1/15/99 7,500,000 7,544,850
6.875% 8/31/99 5,500,000 5,582,720
6.750% 4/30/00 3,500,000 3,546,900
6.250% 2/15/03 6,500,000 6,447,805
5.750% 8/15/03 6,000,000 5,792,820
7.500% 2/15/05 3,500,000 3,703,175
6.500% 5/15/05 3,500,000 3,494,085
6.500% 8/15/05 6,750,000 6,732,406
6.875% 5/15/06 1,500,000 1,531,155
------------
90,197,374
------------
Total Long-Term Obligations
(Cost $126,261,515) 126,763,335
------------
SHORT-TERM INVESTMENTS--(2.6%)
Associates Corp of N.A. 6.200% 7/01/97
(Cost $8,255,000) $ 8,255,000 $ 8,255,000
------------
Total Investments (99.4%)
(Cost $263,622,190) (b) 138,738,711 314,163,688
Other Assets, less Liabilities--(0.6%) 1,752,986
------------
Net Assets (100%) $315,916,583
===========
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is identical. Gross
unrealized appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation: $53,523,558
Gross unrealized depreciation: (2,982,059)
----------
Net unrealized appreciation: $50,541,498
=========
(c) Restricted securities. These securities generally are issued to
institutional investors, such as the Fund, who agree that they are
purchasing the securities for investment and not with a view to public
distribution. Any resale by the Fund must be in an exempt transaction,
normally to other institutional investors. At June 30, 1997, the aggregate
value of the Fund's restricted securities was $5,403,811, which represented
1.7% of net assets. None of these are deemed to be illiquid securities.
See Notes to Financial Statements.
19
<PAGE>
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Managed Assets Fund /
June 30, 1997 (Unaudited)
===============================================================================
<TABLE>
<S> <C>
Assets:
Investments, at market value (identified cost $263,622,190) $314,163,688
Cash 53,492
Receivable for fund shares sold 175,832
Dividends and interest receivable 2,716,512
Other assets 29,910
------------
Total assets 317,139,434
------------
Liabilities:
Payable for investments purchased 532,423
Payable for fund shares repurchased 508,805
Management fee payable 109,634
Administrative fee payable 36,582
Accrued expenses payable 34,525
Other liabilities 882
------------
Total liabilities 1,222,851
------------
Net assets $315,916,583
============
Net assets represented by:
Paid-in capital $248,754,862
Accumulated undistributed net investment income 5,159,288
Accumulated net realized gains on investments 11,460,844
Net unrealized appreciation on investments and foreign currencies 50,541,589
------------
Total net assets applicable to outstanding shares of beneficial interest $315,916,583
============
Shares of beneficial interest outstanding 20,114,040
============
Net asset value per share $15.71
======
</TABLE>
================================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
================================================================================
<TABLE>
<S> <C>
Investment income:
Interest income $ 4,521,783
Dividends (net of foreign taxes withheld) 1,536,074
-----------
Total investment income 6,057,857
-----------
Expenses:
Management fee 678,475
Administrative fee 226,158
Custodian fee 21,385
Accounting fee 15,660
Audit and legal fees 14,480
Trustees' fees 10,664
Printing expense 9,955
Transfer agent fee 3,620
Miscellaneous expense 14,736
-----------
Total expenses 995,133
-----------
Net investment income 5,062,724
Realized and unrealized gains on investments
Net realized gains on investments and foreign currency 11,720,095
Change in unrealized appreciation or depreciation of investments 10,097,435
-----------
Net increase in net assets resulting from operations $26,880,254
===========
</TABLE>
See Notes to Financial Statements.
20
<PAGE>
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Managed Assets Fund
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31,
(Unaudited) 1996
------------ -------------
<S> <C> <C>
Operations:
Net investment income $ 5,062,724 $ 10,512,405
Net realized gains on investments and foreign currency 11,720,095 25,179,094
Change in unrealized appreciation or depreciation of investments 10,097,435 5,972,813
------------ ------------
Net increase in net assets resulting from operations 26,880,254 41,664,312
------------ ------------
Distributions declared from:
Net investment income (10,262,000) --
Net realized gains on investments (25,340,000) --
------------ ------------
Total distributions (35,602,000) --
------------ ------------
Fund share transactions:
Proceeds from fund shares sold 15,002,875 23,322,625
Cost of fund shares repurchased (25,150,766) (42,816,350)
Distributions reinvested 35,602,000 --
------------ ------------
Net increase (decrease) in net assets resulting from fund share transactions 25,454,109 (19,493,725)
------------ ------------
Total increase in net assets 16,732,363 22,170,587
Net assets:
Beginning of period 299,184,220 277,013,633
------------ ------------
End of period $315,916,583 $299,184,220
============ ============
Accumulated undistributed net investment income
included in ending net assets $ 5,159,288 $ 10,358,564
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold 976,510 1,550,496
Shares repurchased (1,629,641) (2,845,909)
Distributions reinvested 2,387,735 --
------------ ------------
Net increase (decrease) 1,734,604 (1,295,413)
============ ============
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
===============================================================================
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Managed Assets Fund
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ----------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period $ 16.28 $ 14.08 $ 12.18 $ 13.11 $ 12.54 $ 12.54
------- ------- ------- ------- ------- -------
Net investment income 0.27 0.57 0.48 0.51 0.38 0.45
Net realized and unrealized gains (losses)
on investments 1.12 1.63 2.61 (0.93) 0.78 0.49
------- ------- ------- ------- ------- -------
Total from investment operations 1.39 2.20 3.09 (0.42) 1.16 0.94
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from and in excess of
net investment income (0.56) -- (0.48) (0.51) (0.36) (0.46)
Distributions from and in excess of net
realized gains on investments (1.40) -- (0.71) -- (0.23) (0.48)
------- ------- ------- ------- ------- -------
Total distributions (1.96) -- (1.19) (0.51) (0.59) (0.94)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 15.71 $ 16.28 $ 14.08 $ 12.18 $ 13.11 $ 12.54
======= ======= ======= ======= ======= =======
Total return:
Total investment return 9.17% 15.63% 25.43% (3.19)% 9.29% 7.53%
Ratios/supplemental data:
Net assets, end of period (000's) $315,917 $299,184 $277,014 $196,278 $197,132 $113,572
Ratio of expenses to average net assets 0.66%(a) 0.67% 0.66% 0.68% 0.69% 0.66%
Ratio of net investment income to
average net assets 3.37%(a) 3.68% 3.12% 4.01% 3.55% 3.98%
Portfolio turnover ratio (b) 19% 76% 66% 71% 47% 70%
Average Commissions (per share) $ 0.0567 $ 0.0547 -- -- -- --
</TABLE>
(a) Annualized.
(b) The portfolio turnover ratio includes dollar roll transactions.
See Notes to Financial Statements.
22
<PAGE>
===============================================================================
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1997 (Unaudited)
===============================================================================
Market
Par Value
--------- -----------
ASSET-BACKED SECURITIES--(9.6%)
ALPS Pass-Through Trust Series 1994-1
Class C2 9.350% 9/15/04 $ 994,927 $1,012,329
ContiMortgage Home Equity Loan
Trust Series 1997-1 Class M1
7.420% 2/15/15 1,250,000 1,257,763
First Boston Home Equity Loan Pass-
Through Certificates Series 1993-H1,
Class A-IO (effective yield 12.820%)
9/28/13 5,675,304 220,032
Greentree Home Improvement Loan
Trust Series 1994-A Class A
7.050% 3/15/14 649,884 649,410
Green Tree Financial Corporation
Series 1996-9 Class B1
7.650% 1/15/28 1,350,000 1,372,802
IMC Home Equity Loan Trust Series
1997-3 Class M2 7.550% 5/20/10 1,000,000 999,220
Mego Mortgage Title I Loan Trust
Series 1997-3 Class M1
7.500% 8/25/23 1,500,000 1,491,000
----------
Total Asset-Backed Securities
(Cost $6,955,436) 7,002,556
----------
MORTGAGE-BACKED SECURITIES--(11.3%)
American Mortgage Trust Series 1993-3
Class 3B 8.190% 9/27/22 804,745 754,891
Citicorp Mortgage Securities, Inc.
Series 1987-10 10.000% 7/01/17 158,603 172,779
Comfed Savings Bank Adjustable Rate
Mortgage Series 1987-1A
7.598% 1/01/18 155,738 132,378
Glendale Federal Savings & Loan
Series 1978-A 9.125% 1/25/08 28,530 29,614
Imperial Savings & Loan Adjustable
Rate Mortgage Series 1987-4A
8.826% 7/25/17 27,873 29,802
Kidder Peabody Acceptance Corp
Series 1987-1 Class A
8.750% 7/25/17 39,778 41,581
Merrill Lynch Mortgage Investments Inc.
8.000% 12/20/18 Series 20-D 1,417,325 1,427,884
7.088% 12/26/25 Series 1995-C3
Class A3 ARM 2,000,000 1,999,520
5.890% 11/15/26 Series 1987-A ARM 95,963 94,849
Nomura Asset Securities Corporation
MBS Series 1996-MD5 Class A1B
7.120% 4/13/36 1,000,000 1,006,340
PS CMO Trust Series 1994-C1-A2
7.920% 8/15/02 722,486 737,340
MORTGAGE-BACKED SECURITIES (Continued)
Republic Federal Savings & Loan
Association Series 1987-1
7.500% 2/28/17 $ 7,591 $ 7,451
Sears Mortgage Securities Corp.
Series 1987-A 6.500% 3/25/17 19,313 18,717
Structured Asset Securities Corporation
Series 1996-CFL Class X1-IO
(effective yield 12.960%) 2/25/28 11,721,217 605,752
Series 1996-CFL Class C
6.525% 2/25/28 1,242,500 1,219,688
-----------
Total Mortgage-Backed Securities
(Cost $8,290,396) 8,278,586
-----------
UTILITY SECURITIES--(2.0%)
National Power Co. Plc 7.125% 7/11/01
(Cost $1,497,945) 1,500,000 1,509,990
-----------
INSURANCE COMPANIES--(2.0%)
Zurich Capital Trust I 8.376% 6/01/37
(Cost $1,450,000) 1,450,000 1,497,792
-----------
FEDERAL HOME LOAN MORTGAGE
CORPORATION CERTIFICATES--(18.4%)
8.500% 5/01/06 Gold 137,617 142,348
6.500% 6/01/08 26,771 26,269
6.500% various due dates to
6/01/09 Gold 1,834,446 1,800,050
10.750% 11/01/09 238,770 258,617
12.000% 7/01/13 79,116 89,896
11.250% various due dates to 11/01/15 73,143 81,600
10.500% various due dates to 2/01/19 420,143 459,401
12.000% 7/01/20 Gold 996,329 1,136,124
7.500% various due dates to
5/01/24 Gold 7,326,915 7,394,846
7.000% 1/01/26 2,140,534 2,102,797
-----------
Total Federal Home Loan Mortgage
Corporation Certificates
(Cost $13,316,042) 13,491,948
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(31.5%)
10.500% 2/01/01 103,891 109,669
12.250% 9/01/12 FHA/VA
Guaranteed 84,258 96,476
10.250% 2/01/16 159,811 175,419
10.000% various due dates to 3/01/16 353,045 382,053
8.500% 3/01/17 178,462 186,828
9.000% various due dates to 5/01/20 258,566 274,802
23
<PAGE>
SCHEDULE OF INVESTMENTS Market
(Continued) Par Value
--------- -----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES (Continued)
6.000% various due dates to 2/01/25 $12,941,138 $12,402,016
7.000% various due dates to 8/01/25 5,469,527 5,446,263
6.500% various due dates to 1/01/26 4,193,937 4,013,044
-----------
Total Federal National Mortgage
Association Certificates
(Cost $23,034,432) 23,086,570
-----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION CERTIFICATES--(16.0%)
8.000% various due dates to 7/15/08 1,834,190 1,897,818
11.500% various due dates to 5/15/13 506,396 574,284
8.500% 2/15/17 210,658 222,640
10.000% various due dates to 11/15/19 696,886 764,177
9.000% various due dates to 1/15/20 1,993,840 2,139,447
9.500% various due dates to 8/15/22 2,201,297 2,385,807
7.000% 4/15/23 523,563 517,019
6.500% various due dates to 7/15/24 881,438 848,657
7.125% 7/20/25 ARM 2,306,826 2,366,850
-----------
Total Government National Mortgage
Association Certificates
(Cost $11,607,515) 11,716,699
-----------
REAL ESTATE MORTGAGE INVESTMENT
CONDUITS--(1.9%)
Federal Home Loan Mortgage
Corporation Series 11-C
9.500% 4/15/19 76,253 78,831
Federal National Mortgage Association
Trust Series 1988-4Z
9.250% 3/25/18 1,218,000 1,261,056
Federal National Mortgage Association
Trust Series 1991-91SA-IO
(effective yield 14.400%) 7/25/98 884,809 35,082
-----------
Total Real Estate Mortgage
Investment Conduits
(Cost $1,401,384) 1,374,969
-----------
U.S. GOVERNMENT SECURITIES--(3.3%)
U.S. Treasury Bonds
6.500% 8/15/05 $ 350,000 $ 349,083
6.750% 8/15/26 800,000 791,872
U.S. Treasury Note 7.000% 7/15/06 750,000 771,743
-----------
Total U.S. Government Securities
(Cost $1,931,695) 1,912,698
-----------
SHORT-TERM INVESTMENTS--(5.3%)
Associate Corp. of N.A. 6.200% 7/01/97 2,865,000 2,865,000
Houston P&L 5.830% 7/01/97 1,000,000 1,000,000
-----------
Total Short-term Investments
(Cost $3,865,000) 3,865,000
-----------
Total Investments--(101.3%)
(Cost $73,349,845) 73,736,870
Other Assets, less Liabilities--(-1.3%) (450,896)
-----------
Net Assets (100%) $73,285,974
===========
(a) The cost of investments for federal income tax purposes is identical. Gross
unrealized appreciation and depreciation at June 30, 1997 is as follows:
Gross unrealized appreciation: $879,535
Gross unrealized depreciation: (492,510)
----------
Net unrealized appreciation: $387,025
==========
See Notes to Financial Statements.
24
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Mortgage Securities Income Fund /
June 30, 1997 (Unaudited)
================================================================================
<TABLE>
<S> <C>
Assets:
Investments, at market value (identified cost $73,349,845) $73,736,870
Cash 585,144
Receivable for fund shares sold 24,592
Interest receivable 634,914
Other assets 30,036
-----------
Total assets 75,011,556
-----------
Liabilities:
Payable for investments purchased 1,505,156
Payable for fund shares repurchased 128,426
Management fee payable 42,622
Administrative fee payable 8,407
Accrued expenses payable 40,971
-----------
Total liabilities 1,725,582
-----------
Net assets $73,285,974
===========
Net assets represented by:
Paid-in capital $73,789,981
Accumulated undistributed net investment income 2,184,352
Accumulated net realized losses on investments (3,075,384)
Net unrealized appreciation on investments 387,025
-----------
Total net assets applicable to outstanding shares of beneficial interest $73,285,974
===========
Shares of beneficial interest outstanding 7,203,656
===========
Net asset value per share $10.17
======
</TABLE>
================================================================================
STATEMENT OF OPERATIONS
For the Period Ended June 30, 1997 (Unaudited)
================================================================================
<TABLE>
<S> <C>
Interest income $ 2,739,792
-----------
Expenses:
Management fee 146,530
Administrative fee 54,949
Custodian fee 15,385
Audit and legal fees 13,575
Accounting fee 12,806
Trustees' fees 4,175
Transfer agent fee 3,620
Printing expense 3,620
Miscellaneous expense 1,768
-----------
Total expenses 256,428
-----------
Net investment income 2,483,364
Realized and unrealized losses on investments:
Net realized losses on investments (33,639)
Change in unrealized appreciation or depreciation of investments (3,712)
-----------
Net increase in net assets resulting from operations $ 2,446,013
===========
</TABLE>
See Notes to Financial Statements.
25
<PAGE>
===============================================================================
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
===============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31,
(Unaudited) 1996
------------ -------------
<S> <C> <C>
Operations:
Net investment income $ 2,483,364 $ 5,616,747
Net realized losses on investments (33,639) (196,495)
Change in unrealized appreciation or depreciation of investments (3,712) (1,957,496)
------------ ------------
Net increase in net assets resulting from operations 2,446,013 3,462,756
------------ ------------
Distributions declared from:
Net investment income -- (5,616,747)
Distributions in excess of net investment income -- (83,288)
------------ ------------
Total distributions -- (5,700,035)
------------ ------------
Fund share transactions:
Proceeds from fund shares sold 2,883,692 4,581,249
Cost of fund shares repurchased (8,052,882) (33,813,119)
Distributions reinvested -- 5,700,035
------------ ------------
Net decrease in net assets resulting from fund share transactions (5,169,190) (23,531,835
------------ ------------
Total decrease in net assets (2,723,177) (25,769,114)
Net assets:
Beginning of period 76,009,151 101,778,266
------------ ------------
End of period $ 73,285,974 $ 76,009,152
============ ============
Accumulated undistributed (overdistributed) net investment income
included in ending net assets $ 2,184,352 $ (299,012)
============ ============
Analysis of changes in shares of beneficial interest:
Shares sold 289,247 447,078
Shares redeemed (809,682) (3,321,354)
Distributions reinvested -- 579,272
------------ ------------
Net decrease (520,435) (2,295,004)
============ ============
</TABLE>
See Notes to Financial Statements.
26
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Mortgage Securities Income Fund
================================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ---------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period $ 9.84 $ 10.16 $ 9.28 $ 10.17 $ 10.26 $ 10.42
------- ------- ------- ------- ------- -------
Net investment income 0.35 0.78 0.57 0.73 0.65 0.63
Net realized and unrealized gains (losses)
on investments (0.02) (0.30) 0.89 (0.89) (0.01) (0.01)
------- ------- ------- ------- ------- -------
Total from investment operations 0.33 0.48 1.46 (0.16) 0.64 0.62
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from and in excess of net
investment income -- (0.80) (0.58) (0.73) (0.65) (0.62)
Distributions from and in excess of net
realized gains on investments -- -- -- -- (0.08) (0.16)
------- ------- ------- ------- ------- -------
Total distributions -- (0.80) (0.58) (0.73) (0.73) (0.78)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 10.17 $ 9.84 $ 10.16 $ 9.28 $ 10.17 $ 10.26
======= ======= ======= ======= ======= =======
Total return:
Total investment return 3.35% 4.70% 15.74% (1.57)%(b) 6.26%(b) 5.95%
Ratios/supplemental data:
Net assets, end of period (000's) $73,286 $76,009 $101,778 $72,420 $91,195 $67,353
Ratio of expenses to average net assets 0.70%(d) 0.70%(a) 0.69% 0.70%(a) 0.76%(a) 0.90%
Ratio of net investment income to average
net assets 6.78%(d) 6.71%(b) 6.76% 6.71%(b) 6.64%(b) 6.72%
Portfolio turnover ratio (c) 17% 72% 112% 241% 187% 169%
</TABLE>
(a) If the Fund had paid all of its expenses and there had been no reimbursement
from the Investment Adviser and the Administrator, as described in Note 5,
this ratio would have been 0.72%, 0.71%, and 0.76% for the years ended
December 31, 1996, 1994, and 1993, respectively.
(b) Computed giving effect to the Investment Adviser's and the Administrator's
expense limitation undertaking.
(c) The portfolio turnover ratio includes dollar roll transactions.
(d) Annualized.
See Notes to Financial Statements.
27
<PAGE>
================================================================================
SCHEDULE OF INVESTMENTS
SteinRoe Variable Investment Trust Cash Income Fund / June 30, 1997 (Unaudited)
================================================================================
Market
Par Value
--------- -----------
COMMERCIAL PAPER--(73.8%)
Banking--(4.3%)
Sumitomo Bank Capital Markets Inc.
(gtd. by Sumitomo Bank Ltd.)
5.776% 7/15/97 (b) $3,000,000 $ 2,993,327
-----------
Beverages--(4.3%)
Coca-Cola Enterprises, Inc.
5.613% 7/08/97 3,025,000 3,021,706
-----------
Business Credit Institution--(4.3%)
Finova Capital Corp. 5.642% 7/09/97 3,000,000 2,996,267
-----------
Consulting Services--(4.2%)
CSC Enterprises (gtd. by Computer
Services Corp.) 5.603% 7/16/97 3,000,000 2,993,025
-----------
Electronics--(4.3%)
Casio Phonemate, Inc.
(L.O.C. BOT/Mitsubishi Bank Ltd.)
5.676% 7/09/97 (b) 3,000,000 2,996,233
-----------
Health Care--(4.3%)
Columbia HCA Healthcare Corp.
5.739% 7/10/97 (b) 3,000,000 2,995,725
-----------
Lending Institutions--(12.8%)
Oak Funding Corp.
5.627% 7/11/97 3,000,000 2,995,333
Old Line Funding Corp.
5.605% 7/08/97 (b) 3,000,000 2,996,745
Windmill Funding Corp.
5.578% 7/02/97 (b) 3,000,000 2,999,536
-----------
8,991,614
-----------
Other Financial--(31.1%)
Associates Corp. of North America
6.201% 7/01/97 1,730,000 1,730,000
Beta Finance Corp. 5.731% 8/07/97 3,000,000 2,982,579
Countrywide Home Loan (gtd. by
Countrywide Credit Industries)
5.592% 7/14/97 3,000,000 2,993,966
Falcon Asset Securitization
5.577% 7/17/97 (b) 2,225,000 2,219,512
McKenna Triangle National Corp.
5.558% 7/03/97 (b) 3,000,000 2,999,075
Thames Asset Global Securitization
5.636% 7/15/97 (b) 3,000,000 2,993,443
Tri-Lateral Capital USA
5.804% 9/11/97 (b) 3,000,000 2,965,680
-----------
Other Financial--(Continued)
Working Capital Management
5.656% 7/01/97 (b) $3,000,000 $ 3,000,000
-----------
21,884,255
-----------
Telecommunications--(4.3%)
GTE Corp. 5.600% 7/07/97 3,000,000 2,997,205
-----------
Total Commercial Paper
(Cost $51,869,357) 51,869,357
-----------
U.S. GOVERNMENT AGENCY OBLIGATION--(5.0%)
Federal Home Loan Bank Callable Note
5.750% 1/09/98
(Cost $3,500,000) 3,500,000 3,500,000
-----------
VARIABLE RATE NOTES--(8.5%)
American Honda Finance Corp.
(gtd. by Honda Motor Co. Inc.)
5.842% 4/06/98 (b) 3,000,000 2,999,558
Korea Development Bank
5.843% 6/16/98 3,000,000 3,000,000
-----------
Total Variable Rate Notes
(Cost $5,999,558) 5,999,558
-----------
YANKEE CERTIFICATES OF DEPOSIT--(12.8%)
Canadian Imperial Bank
5.820% 3/03/98 3,000,000 3,000,000
Fuji Bank Chicago Ltd.
5.790% 7/18/97 3,000,000 3,000,014
Sanwa Bank Ltd. 6.008% 7/08/97 3,000,000 2,996,500
-----------
Total Yankee Certificates of Deposit
(Cost $8,996,514) 8,996,514
-----------
Total Investments--(100.1%)
(Cost $70,365,429) (a) 70,365,429
Other Assets, less Liabilities--(-0.1%) (92,934)
-----------
Net Assets (100%) $70,272,495
===========
*The interest rate is the effective rate at the date of purchase.
(a) The cost of investments for federal income tax purposes is identical.
There is no unrealized appreciation or depreciation at June 30, 1997.
(b) Represents private placement securities exempt from registration by Section
4(2) of the Securities Act of 1933. These securities generally are issued to
investors who agree that they are purchasing the securities for investment
and not with a view to public distribution. Any resale by the Fund must be
in an exempt transaction, normally to other institutional investors. At June
30, 1997, the aggregate value of the Fund's private placement securities was
$32,158,833, which represented 45.8% of net assets. None of these are deemed
to be illiquid securities.
See Notes to Financial Statements.
28
<PAGE>
===============================================================================
STATEMENT OF ASSETS AND LIABILITIES
SteinRoe Variable Investment Trust Cash Income Fund / June 30, 1997 (Unaudited)
===============================================================================
<TABLE>
<S> <C>
Assets:
Investments, at market value (identified cost $70,365,429) $70,365,429
Cash 54,775
Receivable for fund shares sold 168,774
Dividends and interest receivable 224,633
Other assets 18,367
-----------
Total assets 70,831,978
-----------
Liabilities:
Payable for fund shares repurchased 493,895
Management fee payable 19,401
Administrative fee payable 8,603
Accrued expenses payable 36,729
-----------
Total liabilities 559,483
-----------
Net assets $70,272,495
===========
Net assets represented by:
Paid-in capital $70,272,495
-----------
Total net assets applicable to outstanding shares of beneficial interest $70,272,495
===========
Shares of beneficial interest outstanding 70,272,495
===========
Net asset value per share $1.00
=====
</TABLE>
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
<S> <C>
Interest Income $1,891,121
----------
Expenses:
Management fee 117,275
Administrative fee 50,261
Accounting fee 12,520
Custodian fee 10,860
Audit and legal fees 9,050
Trustees' fees 3,674
Transfer agent fee 3,620
Printing expense 2,715
Miscellaneous expense 6,431
----------
Total expenses 216,406
----------
Net investment income 1,674,715
----------
Net increase in net assets resulting from operations $1,674,715
==========
</TABLE>
See Notes to Financial Statements.
29
<PAGE>
==========================================================================
STATEMENTS OF CHANGES IN NET ASSETS
SteinRoe Variable Investment Trust Cash Income Fund
==========================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1997 December 31,
(Unaudited) 1996
------------ -------------
<S> <C> <C>
Operations:
Net investment income $ 1,674,715 $ 3,214,365
------------ ------------
Net increase in net assets resulting from operations 1,674,715 3,214,365
------------ ------------
Distributions declared from:
Net investment income (1,674,715) (3,214,365)
------------ ------------
Fund share transactions:
Proceeds from fund shares sold 33,050,836 57,327,084
Cost of fund shares repurchased (29,914,448) (60,072,108)
Distributions reinvested 1,674,715 3,214,365
------------ ------------
Net increase in net assets resulting from fund share transactions 4,811,103 469,341
------------ ------------
Total increase (in net assets) 4,811,103 469,341
Net assets:
Beginning of period 65,461,392 64,992,051
------------ ------------
End of period $ 70,272,495 $ 65,461,392
=========== ===========
Analysis of changes in shares of beneficial interest:
Shares sold 33,050,836 57,327,084
Shares repurchased (29,914,448) (60,072,108)
Distributions reinvested 1,674,715 3,214,365
------------ ------------
Net increase 4,811,103 469,341
=========== ===========
</TABLE>
See Notes to Financial Statements.
30
<PAGE>
==============================================================================
FINANCIAL HIGHLIGHTS
SteinRoe Variable Investment Trust Cash Income Fund
==============================================================================
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ---------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- -------- -------- -------- -------- --------
Net investment income 0.025 0.049 0.055 0.037 0.027 0.034
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net investment income (0.025) (0.049) (0.055) (0.037) (0.027) (0.034)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total return:
Total investment return 2.49% 5.01% 5.62% 3.81% 2.70% 3.48%
Ratios/supplemental data:
Net assets, end of period (000) $70,272 $65,461 $64,992 $78,698 $83,049 $70,821
Ratio of expenses to average net assets 0.65%(a) 0.65% 0.63% 0.62% 0.65% 0.67%
Ratio of net investment income to
average net assets 5.01%(a) 4.90% 5.48% 3.73% 2.68% 3.42%
</TABLE>
(a) Annualized.
See Notes to Financial Statements.
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Note 1. Organization and Accounting Policies
SteinRoe Variable Investment Trust (the "Trust"), an open-end management
investment company, was organized as a Massachusetts business trust on June 9,
1987. At June 30, 1997, the Trust consisted of five diversified Funds with
differing investment objectives, policies and restrictions (individually
referred to as a "Fund," or collectively referred to as the "Funds"):
Capital Appreciation Fund--seeks capital growth by investing in equity
securities.
Managed Growth Stock Fund--seeks long-term growth of capital by investing 65
percent of total assets in growth companies.
Managed Assets Fund--seeks high total investment return by investing in equity
and debt securities.
Mortgage Securities Income Fund--seeks highest possible level of current income
by investing at least 65 percent of total assets in mortgage pass-through
certificates.
Cash Income Fund--seeks high current income while emphasizing capital
preservation from investment in short-term money market instruments.
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 various affiliated insurance
companies and, in the case of Capital Appreciation Fund, also of Transamerica
Life Companies, Great-West Life & Annuity Insurance Company and Providian Life &
Health Insurance Company. Stein Roe and Farnham, Inc. (the "Adviser") provides
investment advisory services to the Funds as well as management and
administrative services. SteinRoe Services, Inc. provides transfer agent
services. Keyport Financial Services Corp., a subsidiary of Keyport Life
Insurance Company ("Keyport"), serves as the underwriter of the Trust. Keyport,
the Adviser and the Transfer Agent are direct subsidiaries of Liberty Financial
Companies, Inc. At June 30, 1997, various affiliated insurance companies of
Liberty Financial Companies Inc. owned 100 percent of the outstanding shares of
all Funds, except for Capital Appreciation Fund, of which Liberty Financial
Companies Inc. affiliates owned 93.3 percent, Transamerica Life Companies owned
2.7 percent, Great-West Life & Annuity Insurance Company owned 3.9 percent, and
Providian Life & Health Insurance Company owned 0.1 percent.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. 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
increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates.
Valuation of Investments--Portfolio securities listed on domestic exchanges 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. Foreign security
valuations are generally based upon market quotations which, depending upon
local convention or regulation, may be last sale price, last bid or asked price,
or the mean between last bid and asked prices as of, in each case, the close of
the appropriate exchange or other designated time. Long-term debt securities are
valued on the basis of dealer-supplied quotations or valuations furnished by a
pricing service. 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 securities with remaining
maturities of 60 days or less are valued at amortized cost unless the Trustees
determine this does not represent fair value. Cash Income Fund values
investments utilizing the amortized cost valuation technique permitted in
accordance with Rule 2a-7 under the Investment Company Act of 1940, which
requires the Fund to comply with certain conditions. This technique involves
valuing a portfolio security initially at its cost and, thereafter, assuming a
constant amortization to maturity of any discount or premium.
Federal Income Taxes--The Funds now qualify and intend to continue qualifying 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.
Foreign Currency Transactions--Certain of the Funds have entered into foreign
exchange contracts for the settlement of purchases and sales of securities
denominated in a foreign currency to reduce the risk to the Funds from adverse
changes in the relationship between the U.S. dollar and the foreign currency.
The face or contract amount in U.S. dollars reflects the total exposure the Fund
has in that particular currency contract. In the event that the counterparty in
the foreign exchange contract fails to meet the terms of the contract, the Fund
could be exposed to the effects of changes in the relationship between the U.S.
dollar and the foreign currency.
Investment Transactions--The Funds may purchase or sell securities on a
when-issued, delayed delivery 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
32
<PAGE>
negotiated. Managed Assets Fund and Mortgage Securities Income Fund also may
enter into dollar roll transactions. In a dollar roll transaction, the Fund
sells securities for delivery in the current month and simultaneously contracts
to repurchase, typically in 30 days to 60 days, substantially similar securities
at an agreed-upon price and date. These transactions may increase the risk if
the other party to the transaction fails to deliver and causes the Fund to
subsequently invest at less advantageous yields. The Funds identify securities
as segregated in their custodial records with a value at least equal to the
amount of the purchase commitment.
Other--Security transactions are accounted for on trade date. Interest income is
recorded on the accrual basis. Discounts on debt securities are amortized in
accordance with Internal Revenue Code requirements. Dividend income and
distributions to shareholders are recorded on the ex-dividend date. Net realized
and unrealized gains (losses) on foreign currency transactions include the
fluctuation in exchange rates on gains and losses between trade and settlement
dates on security transactions, gains and losses arising from the disposition of
foreign currency, and currency gains and 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 investment from the fluctuations arising from
changes in market prices of securities held. Such fluctuations are included with
the net realized and unrealized gain or loss from investments. Unrealized
appreciation and depreciation and realized gains and losses differ between
financial statements and tax earnings due to deferred losses from wash sales.
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 and losses are computed on the identified cost basis for both
financial reporting and federal income tax purposes. At December 31, 1996,
Mortgage Securities Income Fund had a capital loss carryforward of $3,041,745,
which will expire between 2002 and 2004, if not utilized. The cost of
investments purchased and proceeds from investments sold, excluding short-term
investments, for the six months ended June 30, 1997, for the Funds, excluding
Cash Income Fund, were as follows:
Mortgage
Capital Managed Managed Securities
Appreciation Growth Assets Income
Fund Stock Fund Fund Fund
------------ ----------- ----------- -----------------
Cost of investments
purchased $67,635,846 $18,783,042 $68,324,869 $14,888,245
Proceeds from
investments sold 74,660,798 23,423,495 122,426,982 12,005,496
Note 4. Distributions to Shareholders
The Funds, with the exception of the Cash Income Fund, intend to distribute as
dividends or capital gains distributions, at least annually, substantially all
of their net investment income and net gains realized from the sale of portfolio
securities. All dividends and distributions are reinvested in additional shares
of the Funds. Cash Income Fund declares dividends daily and reinvests all
dividends declared monthly in additional shares at net asset value. Income and
capital gains distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles
primarily relating to gains and losses on principal paydowns.
Note 5. Management and Administrative Fees
The Funds have advisory and administrative agreements with the Adviser. The
following investment advisory fee rates were in effect as of June 30, 1997:
Annual rate(s) as a
percent of
Fund(s) average daily net assets
------- ----------------------
Capital Appreciation Fund .50 of 1%
Managed Growth Stock Fund .50 of 1%
Managed Assets Fund .45 of 1%
Mortgage Securities Income Fund .40 of 1%
Cash Income Fund .35 of 1%
As of June 30, 1997, for all the Funds, the administrative fee was .15 of 1
percent of average annual net assets. Both the investment advisory fees and the
administrative fees are computed daily and paid monthly.
The Adviser also provides the Funds with certain Fund accounting services. The
fee is $25,000 annually plus .0025 of 1 percent of assets in excess of $50
million. For the six months ended June 30, 1997, Capital Appreciation Fund,
Managed Growth Stock Fund, Managed Assets Fund, Mortgage Securities Income Fund
and Cash Income Fund incurred charges of $14,234, $14,380, $15,660, $12,806, and
$12,520, respectively.
The Funds pay SteinRoe Services, Inc. for transfer agent services rendered at an
annual rate of $7,500 computed on the basis of $625 per month.
33
<PAGE>
The Adviser has agreed to reimburse all expenses, including management fees,
incurred by the Funds as follows:
Fund(s) Expenses exceeding
------- -------------------------
Capital Appreciation Fund .80 of 1% of average daily net assets
Managed Growth Stock Fund .80 of 1% of average daily net assets
Managed Assets Fund .75 of 1% of average daily net assets
Mortgage Securities Income Fund .70 of 1% of average daily net assets
Cash Income Fund .65 of 1% of average daily net assets
The expense limitations expire April 30, 1998.
Note 6. Investment in Repurchase Agreements
Each Fund may enter into repurchase agreements with banks, broker-dealer firms
and other recognized financial institutions, whereby such institutions sell an
instrument in which a Fund may invest to that Fund, and the seller agrees, at
the time of the sale, to repurchase that instrument at a specified time and
price. The Funds require the seller of the instrument to maintain on deposit
with the Funds' custodian bank or in the Federal Reserve Book-Entry System
securities in an amount at all times equal to or in excess of the value of the
repurchase agreement plus accrued interest. In the event the seller of the
instrument defaults on the repurchase obligation, a Fund could receive less than
the repurchase price on the sale of the securities to another party or could be
subject to delays in selling the securities.
34
<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)
Custodians
Boston Safe Deposit & Trust Company
One Cabot Road
Medford, Massachusetts 02155
United Missouri Bank
928 Grand Avenue
Kansas City, Missouri 64100
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
<PAGE>
Keyport Life Insurance Co.
125 High Street
Boston, MA 02110-2712
