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NYLIAC
VARIABLE
UNIVERSAL
LIFE
1995 ANNUAL REPORT
[LOGO OF NEW YORK LIFE] The Company You Keep
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NEW YORK LIFE MFA SERIES FUND, INC.
OFFICERS AND DIRECTORS
Richard M. Kernan, Jr., Chairman, Chief Executive Officer and Director
Anne F. Pollack, President, Chief Adminstrative Officer and Director
Michael J. Drabb, Director
Jill Feinberg, Director
Daniel Herrick, Director
Robert D. Rock, Director and Vice President
Roman L. Weil, Director
Richard W. Zuccaro, Tax Vice President
Anthony W. Polis, Treasurer
A. Thomas Smith III, Secretary
Marc J. Chalfin, Controller
INVESTMENT ADVISERS
MacKay-Shields Financial Corporation
Monitor Capital Advisors, Inc.
New York Life Insurance Company
ADMINISTRATOR
New York Life Insurance and Annuity Corporation
CUSTODIANS
The Bank of New York
Chemical Bank
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
LEGAL COUNSEL
Jorden Burt Berenson & Johnson LLP
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Table of Contents
President's Letter 2
MacKay-Shields Financial Corporation Adviser's Report 4
New York Life Insurance Company Adviser's Report 7
Portfolio Managers' Comments 8-17
NYLIAC Variable Universal Life Separate Account
Statement of Assets and Liabilities 18
Statement of Operations 20
Statement of Changes in Total Equity 22
Note 1 - Organization and Accounting Policies 26
Note 2 - Investments 28
Note 3 - Mortality and Expense Risk Charges 30
Note 4 - Distribution of Net Income 30
Note 5 - Cost to Policyowners 32
Note 6 - Unit Transactions 34
Note 7 - Selected Per Unit Data 38
Report of Independent Accountants 42
New York Life MFA Series Fund, Inc.
Chairman's Letter 44
Capital Appreciation Portfolio 45
Cash Management Portfolio 49
Government Portfolio 53
High Yield Corporate Bond Portfolio 56
International Equity Portfolio 61
Total Return Portfolio 71
Value Portfolio 77
Bond Portfolio 81
Growth Equity Portfolio 85
Indexed Equity Portfolio 90
Note 1 - Organization and Business 100
Note 2 - Significant Accounting Policies 100
Note 3 - Fees and Related Party Policies 104
Note 4 - Federal Income Tax 106
Note 5 - Financial Investments 106
Note 6 - Acquisition of Money Market Portfolio 106
Note 7 - Redemption by NYLIAC of Initial Investment 107
Note 8 - Purchases and Sales of Securities 108
Note 9 - Capital Share Transactions 108
Report of Independent Accountants 110
1
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President's Letter
To the Owners of NYLIAC Variable Universal Life Policies
I am pleased to present the Annual Report for NYLIAC Variable Universal
Life and the New York Life MFA Series Fund, Inc. for the year ended December
31, 1995.
Variable Universal Life is a product that offers permanent life insurance
protection plus flexible investment opportunities. VUL puts you in control - it
affords you the flexibility to choose the amount of life insurance protection
that best suits your needs, the amount and frequency of your premium payments as
well as the freedom to decide how your dollars will be invested.
All of the MFA Fund investment portfolios are professionally managed and
offer a diversified group of funding options. MacKay-Shields Financial
Corporation manages the Capital Appreciation, Cash Management, Government, High
Yield Corporate Bond, International Equity, Total Return and Value Portfolios.
Monitor Capital manages the Indexed Equity Investment Portfolio and New York
Life Insurance Company manages the Bond and Growth Equity Portfolios.
Economic Environment
The U.S. economy slowed sharply in the first half of 1995 from unsustainable
growth rates in 1994. The slowdown was in response to prior monetary tightening
by the Federal Reserve, an overextended consumer, and an inventory correction.
After a temporary spurt of growth in the third quarter, the economy returned to
its slowing trend and the weakness appears to be continuing into 1996. Although
five years of economic expansion have reduced the unemployment rate to levels
normally associated with rising inflation, Americans' nagging sense of financial
insecurity has not been cured; they haven't forgotten the pain of the early
1990's. The feverish pace of global mergers and acquisitions continues and has
many people edgy about their jobs and income. High levels of consumer debt and a
low savings rate are also contributing to the reluctance to spend.
Growth is expected to remain weak in the first half of 1996 before
accelerating again later in the year in response to lower interest rates. After
raising short-term interest rates seven times between February 1994 and February
1995 for a total increase of three percent in the Federal funds rate, the
Federal Reserve eased rates by .25 percent in July and again in December.
Further Fed easing is likely in early 1996 before the economy begins to show
signs of strengthening again. Long-term Treasury bond yields have declined more
than two percent since late 1994 and should come down a little more in early
1996 before turning up again later in the year.
During 1995, stock prices were up 33.5 percent due to a combination of
strong corporate earnings reports, declining interest rates and a sustained low
rate of inflation. The Dow Jones continued to reach new record levels throughout
the year, surpassing 4000 on March 10, 1995 and exceeding 5000 on November 21,
1995.
2
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NYLIAC VUL Separate Account Performance
Positive returns were also realized by policyowners who invested in the ten
investment options offered by NYLIAC's Variable Universal Life this past year.
The Capital Appreciation, Indexed Equity, Total Return, Growth Equity,
Government, and Bond Portfolios all experienced double digit total returns.
Although not all of the portfolios achieved that degree of success for the year,
all portfolio returns exceeded 1994 results.
In May 1995, three new investment options were added: the International
Equity, Value and High Yield Corporate Bond Portfolios. In addition, the
Automatic Asset Reallocation feature was added, which makes it easier for you to
maintain a specified balance among the investment options. Please refer to the
Prospectus for more complete details.
Since NYLIAC Variable Universal Life was introduced in November of 1993,
over 3.5 billion of face amount has been purchased. We closed out 1995 with
strong VUL sales momentum which we anticipate carrying into 1996.
We look forward to serving you in the years ahead. On the following pages
you will find reports from each of the Portfolio Managers of the MFA Series
Fund, Inc. that are available in NYLIAC Variable Universal Life.
/s/ Seymour Sternberg
Seymour Sternberg
President
New York Life Insurance and Annuity Corporation
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1995 brought double digit returns on several of our portfolios -and all
portfolio returns exceeded 1994 results.
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3
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Adviser's Report
MacKay-Shields Financial Corporation
The U.S. capital markets provided an extraordinary and unexpected feast for
investors during 1995. After a gloomy 1994, few expected the magnitude of the
stock and bond market moves. The stock market exploded with its best returns
since 1975. Stock funds reigned supreme, enjoying their fifth best year since
1959. Individual investors poured money into equity and equity-related mutual
funds. Although few investors complained, the strong indexes were hard to beat.
Stock prices were propelled by the confluence of continued positive
fundamentals: low inflation, strong productivity gains, solid profit growth,
moderate economic growth, and lower interest rates. Technology (at least through
most of the third quarter), financial stocks, airlines, and healthcare, were
among those groups leading the parade of advancing stock prices. Economically
sensitive stocks lagged markedly.
Bond investors also had reasons to celebrate, enjoying the strongest year in
10 years and the third best annual total return since records have been kept. In
fact, returns on long-term Treasury bonds approached those of stocks, totaling
30.1%. Even below investment grade bonds and less risky bonds such as
intermediate-term Treasuries returned 19.9% and 19.0%, respectively. At the
start of the year, economic growth looked robust and it was feared that
inflation might accelerate. But in fact, as that elusive "soft landing" became a
reality, it provided an environment of slowing economic growth and falling
inflation, which combined with fiscal restraint, consequently drove interest
rates down and bond prices up. The 30 year Treasury, which topped 7.9% in
January, ended the year yielding 5.95%, the lowest since October 28, 1993. Rates
declined across the entire maturity spectrum, and the Federal Reserve ended a
series of short term interest rate hikes and began to lower rates modestly. The
two cuts in the Fed funds rate were only equal to 50 basis points. The one year
Treasury bill yield, at more than 7% a year ago, ended the year slightly above
5%. The yield curve began to invert.
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POSITIVE fundamentals which gave vibrancy to the market in 1995, by and large,
remain intact today.
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4
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Around the globe, interest rates in Europe headed lower as the global
economy faltered, Japanese bond yields appeared ready to head toward zero, and
the dollar bottomed out, showing unmistakable signs of reversing a very long-
term downward spiral. Most world stock markets could not keep pace with the
United States. On average European stocks rose 12.3%. Asian markets were mixed,
with the important Japanese Nikkei average reaching its low in July and rallying
in the second half, but ending the year up less than 1%. Latin America was the
worst region to invest in 1995, with Mexico, Brazil and Colombia posting double-
digit losses.
Peering into the 1996 U.S. crystal ball, it is virtually inconceivable to
conjure another 1995. However, the same positive fundamentals which gave
vibrancy to the market of 1995 still, by and large, remain intact today, and we
believe the case for their continuation into 1996 is reasonably solid: continued
low inflation aided by strong productivity gains, steady, moderate economic
growth and low interest rates appear to be the most likely ingredients in the
1996 capital markets recipe. The consensus view is that 1996 will be more
realistic in terms of the historical norms for stock and bond returns, but that
it should be positive. Since consensus views are by definition somewhat suspect,
wise investors should ponder the risks they face in 1996 and not become overly
complacent.
Offsetting the possibility for meaningful corrections, however, is the very
positive fact that should the economy weaken further, there is room to ease
interest rates without reigniting inflation, and we believe that in an election
year there may be an incentive to ease interest rates. Therefore, lower rates
should jump-start the economy, giving earnings another boost. At 16 times 1996
earnings, the S&P 500* is trading in the middle of its historical range given
the current interest rate and inflation environment. Moreover, with companies
such as Merck, IBM and others engaged in record breaking stock buyback programs,
and with supply not growing as fast, stock market technicals look favorable.
Given this scenario and last year's run-up in stock prices, corrections are to
be expected, but opportunities will exist both to make money and to manage risk.
* "Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with
Standard & Poor's Corporation. The S&P 500 is an unmanaged index considered
generally representative of the U.S. stock market.
5
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The non-cyclical sectors of growth should do well in this environment. Although
economically sensitive value sectors may have to suffer in the doldrums a while
longer and wait their turn as they report tough fourth and first quarter
earnings, a pickup in the economy either later in 1996 or early in 1997 will
most likely put them back in the forefront of market leadership.
The bond market will be extremely sensitive to every tidbit of budget news
and the stock market will follow. Other risks to the bond market might be more
of a "wild card" nature: political scandals in the U.S. and/or political turmoil
abroad. One risk to bond prices is a reaccelerating economy earlier than anyone
expects, caused perhaps by exports picking up, a stimulative budget deal which
puts tax cuts in place before the spending cuts go into effect, and finally,
economic weakness notwithstanding, a continued low unemployment rate and a high
operating rate. This, however, is probably only a remote possibility, at least
in the first half of 1996. A reasonably benign environment suggests a trading
range of 5 1/2% to 6 1/2% for the 30-year Treasury. Any negative factor could
bump it to the higher end of the range, 7% or even higher. Of course, either a
recession or a better than expected budget deal could bring us closer to
flirting with 5% on the low end. Our strategy as conservative bond investors
will continue to keep our duration close to the market in order to capture
further gains, but to stand ready to shorten durations should any of the
aforementioned risks, or others, manifest themselves.
Ravi Akhoury
Chairman and Chief Executive Officer
MacKay-Shields Financial Corporation
6
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Adviser's Report
New York Life Insurance Company
For 1995, investment returns were some of the best in stock and bond market
history and financial investors fared exceptionally well.
Both markets benefitted from a sharp fall in interest rates resulting from
low inflationary pressures, slower economic growth and accommodative monetary
policy. In addition, the stock market benefitted from corporate earning strength
- --especially relative to expectations, high levels of merger and acquisition
activity and record cash inflows into mutual funds.
Looking forward, we expect 1996 to be another positive year for investors,
but we expect returns to come in at somewhat lower levels. In this environment
of sustained moderate growth and price stability, investor capital should
continue to perform well. Globalization and liberalization of local economies
and financial markets have been positive factors for the investor. Nevertheless,
at some point in the future, the continued pressure on worker incomes may cause
a reversal -- either through a significant economic slowdown, or a shift towards
inflationary fiscal policy practices. For the upcoming year, however, we expect
continued economic growth combined with low inflation.
For the bond market, our expectation of modest economic strengthening should
result in a slightly higher and flatter yield curve by year-end. We still
believe that interest rates are on a secular downtrend from levels prevailing in
the 1970's and 1980's, but that cyclical strength will push up rates modestly
near term. Political cross-currents relating to the Federal budget present a
near term risk of higher rates. Within the bond market sectors, we continue to
prefer corporates relative to mortgages and Treasuries.
For the stock market, we anticipate continued, albeit less dramatic, growth
in value. We believe that larger capitalization stocks will lead the market for
the first half, given strong mutual fund inflows. We also believe that financial
stocks will continue to benefit from industry consolidation and fairly low
interest rates. We are focusing on corporate restructurings and growing
industries undergoing rapid change, such as, healthcare. We see economic growth
picking up in Asia and Latin America and expect companies participating in those
economies to benefit.
Jean Hoysradt
Senior Vice President in Charge of the Investment Department
New York Life Insurance Company
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CONTINUED moderate economic growth in 1996 combined with price stability should
benefit investor capital.
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7
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Portfolio Manager's Comments
CAPITAL
APPRECIATION
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
35.78%
Since Inception-1/29/93:
16.60%
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Edmund Spelman
Rudy Carryl
Eileen Cook
Portfolio Managers
MacKay-Shields
Financial Corporation
The Capital Appreciation Portfolio enjoyed an exceptionally robust return for
1995 of 35.78%, slightly behind the hard-to-beat S&P 500 index* total return of
37.58% and ahead of the average Lipper** growth fund return of 32.47%. The
environment of low inflation, low interest rates, and steady but slowing
economic growth was ideal for growth investing. The investment approach that we
employ seeks capital accumulation by focusing on selecting stocks of companies
with rapid and substantial earnings growth and earnings momentum, many of which
are not economically sensitive. Our disciplined process also leads us toward
companies with "growth catalysts", including new products, new management, or
shifting consumer preferences, which may cause a stock to outperform its peer
group.
The major contributors to this exceptional 1995 performance came from a broad
cross section of sectors, including financials, healthcare, technology, and
selected consumer discretionary stocks. Our diversification disciplines served
us well during the year, especially during the latter part of the year when the
previously skyrocketing commodity based semiconductor technology stocks
underwent sharp corrections. Our top 10 performing stocks for the year were
broadly diversified across the growth spectrum, enabling us to manage downside
risk while we accumulated capital for our investors.
For the calendar year of 1995, healthcare, especially pharmaceuticals
(Amgen, Teva) and medical devices (Medtronic and Cordis), selected consumer
discretionary (HFS and News Corp.) and technology (Computer Associates, Sun
Microsystems, Oracle and 3Com) were primarily responsible for the Portfolio's
strong performance. Finance also proved to be a boon to performance as interest
rates decreased and industry consolidation continued. First Interstate,
Travelers and SunAmerica are three examples. Selected building stocks, such as
Lennar, also did well because of the low interest rate environment.
During the fourth quarter, a sharp correction of semiconductor stocks that began
in mid-September continued, due to concern about potential pricing weakness and
possible excess capacity, giving investors a reason to exit stocks that had been
stellar performers. We own three semiconductor stocks: Micron Technology, Lam
Research and Intel Corporation, and at this time, are reviewing the investment
merits of each of these holdings. We continue to believe that the fundamental
outlook for many of our other technology stocks remains bright, including 3Com,
Oracle Corporation and Computer Associates.
Consumer stocks remain a difficult group, and we would not be surprised to see
further consolidations and store closings by retailers over the next few months.
Having said that, the best performing stock for the fourth quarter and year was
HFS, with a 1995 gain of 208%. This lodging industry franchiser is now branching
out into the real estate business with recent acquisitions of Century 21 and
ERA. Our focus is on companies with restructuring and margin improvement
stories, such as Nine West and Warnaco, and retailers that have demonstrated an
ability to gain market share without sacrificing profitability, such as Kohl's
Corporation and Bed Bath & Beyond.
Going forward, we believe a low inflation environment, declining interest rates,
and slow but steady economic growth should provide a positive backdrop for
growth stocks.
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$10,000 Invested in the Capital
Appreciation Portfolio on 1/29/93 vs
S&P 500 and the Consumer Price Index
[GRAPH APPEARS HERE]
Capital
Appreciation S&P 500 CPI
1/29/93 10000 10000 10000
12/31/93 12054 11007 10275
12/31/94 11526 11149 10549
12/31/95 15650.05 15339 10785.65
* "Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of all
income and capital gains distributions.
** Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
8
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Portfolio Manager's Comments
CASH
MANAGEMENT
Portfolio
Ravi Akhoury
Frank Salem
Jessica Terc
Portfolio Managers
MacKay-Shields
Financial Corporation
The Cash Management Portfolio had a total return of 5.59% for the calendar year
1995, in line with the average Lipper* money market fund return of 5.48%.
During 1995, interest rates declined more dramatically on the intermediate and
longer maturity end of the yield curve than on the shorter end, as the Federal
Reserve only eased short term rates modestly. As a result, yields on shorter
maturities by year end were only slightly less than intermediate maturities.
Our Cash Management Portfolio strategy continued its emphasis on high quality,
liquidity, and capital preservation. We remained cautious in our security
selection, especially, for example, as it pertained to Japanese banks. Going
forward, our strategy will remain conservative in keeping with the objectives of
the Portfolio.
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
There can be no assurance that the Portfolio will be able to maintain a stable
net asset value of $1.00 per share nor is the value of the Portfolio's shares
insured or guaranteed by the U.S. Government.
9
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Portfolio Manager's Comments
GOVERNMENT
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
16.72%
Since Inception-1/29/93:
6.76%
Ravi Akhoury
Edward Munshower
Christopher Harms
Portfolio Managers
MacKay-Shields
Financial Corporation
The Government Portfolio had a strong return of 16.72% for the calendar year
1995, in line with the average Lipper* government bond fund return of 16.99%.
Keeping pace with the strongest bond market in 10 years and the third best bond
market in recorded history was a significant achievement given the conservative,
risk averse bias of our investment approach.
Interest rates declined across the maturity spectrum much more dramatically than
most investors had anticipated. Low inflation, a slowing economy, and some
degree of optimism that a balanced budget could become a reality in our
lifetime, were the principal factors behind lower interest rates. Although
rates declined more on the longer end of the yield curve, the Federal Reserve
reversed its tightening mode (which had added to the misery of bond investors in
1994) and actually lowered short rates twice, albeit modestly, once in July and
again in December.
The Portfolio performed in line with the market and its competitors principally
because of our duration (a better gauge of sensitivity to interest rate moves
than the average maturity because it takes the cash flow of coupon interest
income into account). We maintained our duration at a neutral position in line
with the market throughout most of the year, after having kept a shorter
defensive duration in 1994, to help preserve principal. Security selection of
Treasuries added the most value next to our duration strategy. As rates fell
precipitously, our mortgage related securities did not keep pace with Treasury
returns, but at this juncture represent excellent value.
Looking ahead into 1996, rates could decline further if the economy weakens even
more than anticipated, and a Federal budget agreement between the President and
Congress would probably decrease rates further from these levels. Moreover, a
continuation of the Fed's 1995 easing policies to stimulate growth in a
weakening economy before a Presidential election could also be bullish for bond
investors. Risks, however, include a budget impasse, a domestic or
international political scandal or another fear-igniting event, and perhaps what
is considered least likely, a sooner than expected resurgence of economic growth
which would send rates higher and bond prices lower.
Given all these variables, we believe a neutral duration stance remains
appropriate at this juncture. With a slightly steepening bias likely for the
yield curve, our position is neutral at this time.
The Government Portfolio continues to be managed with only pure government
securities, and contains no foreign governments or currency exposure, no
corporates, no non-investment grade bonds, and no high-risk leveraged derivative
instruments.
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$10,000 Invested in the Government Portfolio
on 1/29/93 vs Lehman Brothers Government Index
and the Consumer Price Index
[GRAPH APPEARS HERE]
Lehman Bros
Government Gov't Index CPI
1/29/93 10000 10000 10000
12/31/93 10563.26 10914 10275
12/31/94 10368.9 10546 10549
12/31/95 12102.28 12480.37 10785.65
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
The Lehman Brothers Government Index is an unmanaged index comprised of U.S.
Government and agency issues as well as investment-grade fixed rate debt
securities. Results assume the reinvestment of all income and capital gains
distributions. The Consumer Price Index (CPI) is a commonly used measure of the
rate of inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
10
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Portfolio Manager's Comments
HIGH YIELD
CORPORATE BOND
Portfolio
Average Annual Total Return as of 12/31/95
Since Inception-5/1/95:
10.06%
Denis Laplaige
Steven Tananbaum
Thomas Hajdukiewicz
Portfolio Managers
MacKay-Shields
Financial Corporation
The High Yield Corporate Bond Portfolio had a competitive return of 10.06% for
the period from its inception on May 1 through the end of 1995. For the
period available for Lipper* comparison, May 31, 1995 through December 31, 1995,
the Portfolio had a return of 9.22%, exceeding the return of 7.27% for the
average high yield fund in the Lipper universe for the same period. The High
Yield Corporate Bond Portfolio continued to seek significant yield while
protecting interest and minimizing principal risk, but also seeking capital
appreciation by adhering to a rigorous investment process with strict
disciplines.
Our strong performance was a result of using these disciplines to enable the
Portfolio to benefit from careful security selection in the areas of cable,
casinos and communications (especially media and broadcasting). Additionally,
our avoidance of the weak retail and restaurant sectors also aided performance.
Our process emphasizes companies with sufficient size, assets and free cash flow
to repay their debt and improve their balance sheet, as well as companies with
access to equity markets. We were unable to find enough credits that met our
strict criteria, and as a result, maintained a strong cash position.
Fortunately, however, the strength of our security selection was more than
enough to outperform the average competitor in the Lipper universe.
As the year progressed, we witnessed a continuation of trends already in place,
which grew even more pronounced in the last quarter: strong cash flow from
investors, a default rate which kept inching higher, and significant credit
deterioration in retailing, apparel/textiles and restaurants, as the economy
weakened. Yield spreads over Treasuries tightened further. Currently, yield
spreads are at historically low levels, and we believe that spreads will return
to historical normal levels in 1996. We also believe that 1995 was the peak in
corporate credit quality.
Looking ahead, our risk controlled contrarian approach will seek out values in
oversold sectors, such as restaurants and retailing, and we will continue our
emphasis on cable and communications issues. With a weakening economy, we will
diligently seek out opportunities in undervalued issues. Our focus on above
average companies in above average industries gives us an opportunity to manage
risk in the Portfolio, since these companies are most likely to weather economic
storms.
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$10,000 Invested in the High Yield
Corporate Bond Portfolio on 5/1/95 vs
S&P 500 and the Consumer Price Index
[GRAPH APPEARS HERE]
High Yield
Corp. Bond CPI S&P 500
5/1/95 10000 10000 10000
12/31/95 11006 10102 12179
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies. The
average Lipper fund's performance for the Value, High Yield and International
Equity Portfolios are not available from 5/1/95, but rather from 5/31/95 through
12/31/95.
The Consumer Price Index (CPI) is a commonly used measure of the rate
of inflation.
"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are registered
trademarks of the Standard & Poor's Corporation. The New York Life MFA Series
Fund, Inc. is neither sponsored by nor affiliated with Standard & Poor's
Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of all
income and capital gains distributions.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
11
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Portfolio Manager's Comments
INTERNATIONAL
EQUITY
Portfolio
Average Annual Total Return as of 12/31/95
Since Inception-5/1/95:
6.96%
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Michael Perelstein
Shigemi Takagi
Portfolio Managers
MacKay-Shields
Financial Corporation
Since its inception on May 1 through the end of 1995, the International Equity
Portfolio returned 6.96%, compared to the Morgan Stanley Capital International
EAFE Index* return of 5.20%. For the period available for Lipper** comparisons,
May 31, 1995 through December 31, 1995, the Portfolio had a return of 9.86%
exceeding the average Lipper international equity fund return of 7.24% for the
same period. The Portfolio's strong third quarter performance continued into the
fourth quarter, with a return of 5.59% versus 1.76% for the average Lipper fund
and 4.05% for the EAFE Index. This performance ranked the Portfolio eleventh out
of 64 funds tracked by Lipper for the fourth quarter of 1995.
Starting with the second half of 1995, the Portfolio benefitted primarily from
its exposure to the Japanese equity market and underexposure to the Japanese
yen. This was also true during the fourth quarter. The Portfolio's currency
exposure was hedged into dollars as the Japanese yen fell 4%. Our decision to
continue to emphasize Japan (up 10%), Singapore (up 9%) and Belgium (up 7%),
while avoiding declining stocks such as those of Finland (with the collapse of
Nokia, Finland's leading stock), and Sweden (as Ericcson plummeted) benefitted
the Portfolio during the quarter.
In 1996, we believe international equities offer substantial investment
opportunities. Although foreign equity markets lagged the U.S. market in 1995,
they are now poised to partake in the global equity bull market. The upbeat
outlook for international equities is enhanced by the decline in interest rates
abroad, which is even more pronounced than in the United States.
Going into 1996, the Portfolio maintains a diversified exposure in both Asian
and European markets. In Europe we are invested in the equities of Austria,
Belgium, Denmark, France, Italy and Spain. These markets are filled with banks,
insurers, and utilities-companies that benefit from declining interest rates. We
have also raised our exposure to energy and natural resources. Our energy
exposure is reflected through investments in Norway (Norsk Hydro) and the
Netherlands (Royal Dutch). Our natural resource exposure is reflected in the
Pacific markets of Australia (mining and metals) and New Zealand (forest
products). We are also emphasizing the highest growth markets of the world,
located in Southeast Asia, with our investments in Singapore and Hong Kong. The
Japanese equity market could be the big positive surprise of 1996 with its
incredibly low interest rates.
Also in 1996 we expect a continuation of the declining trend in foreign
currencies that began in the second half of 1995. We are actively seeking to
protect the Portfolio from declines in the value of the Japanese yen and
European currencies.
We continue to emphasize a disciplined process to international investing which
focuses on country selection, management of currency risk, diversification, and
high quality stocks.
$10,000 Invested in the International
Equity Portfolio on 5/1/95 vs the EAFE
Index and the Consumer Price Index
[GRAPH APPEARS HERE]
International
Equity CPI EAFE
5/1/95 10000 10000 10000
12/31/95 10696 10102 10520
* Morgan Stanley Capital International EAFE Index is an unmanaged index of the
securities of over 1,000 companies traded on the markets of Europe, Australia,
New Zealand and the Far East.
** Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies. The
average Lipper fund's performance for the Value, High Yield and International
Equity Portfolios are not available from 5/1/95, but rather from 5/31/95 through
12/31/95.
The Consumer Price Index (CPI) is a commonly used measure of the rate
of inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
12
<PAGE>
Portfolio Manager's Comments
TOTAL
RETURN
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
28.33%
Since Inception-1/29/93:
12.70%
- --------------------------------------------------------------------------------
Ravi Akhoury
Rudy Carryl
Edmund Spelman
Eileen Cook
Christopher Harms
Portfolio Managers
MacKay-Shields
Financial Corporation
The Total Return Portfolio enjoyed a stellar performance year in 1995, earning a
total return of 28.33%, which exceeded the average Lipper* balanced fund return
of 24.29% and ranked fourth out of 24 balanced funds tracked by Lipper.
The Total Return Portfolio is a balanced portfolio with the distinguishing
characteristic of having its equity component managed in a growth mode, similar
to the Capital Appreciation Portfolio. Growth stocks generally outperformed
value stocks last year, partially because growth stocks are less tied to the
economy than are many of the cyclical value sectors and securities. The
environment was characterized by a slowing economy, which was great for growth,
but not for value. Competitively, this gave us an advantage in the Total Return
Portfolio, because many other balanced portfolios have more value oriented
equity components. We believe the balance of a growth equity component geared
toward capital accumulation (the "engine of growth") and a conservatively
managed investment grade bond component (the "anchor of capital preservation")
is especially appropriate for our investors.
During 1995, the bond component of the Portfolio contributed positively to
returns as interest rates declined and bond prices rallied. Our average maturity
was in line with the market, allowing us to participate in the rally. Corporate
bonds and mortgage related securities underperformed Treasuries. We will
maintain a neutral position with respect to interest rate movements at this
juncture.
As was the case in the Capital Appreciation Portfolio, the equity component of
the Total Return Portfolio enjoyed handsome returns from a broad variety of
stocks in a number of industries: finance, healthcare, technology, and even some
selected consumer discretionary stocks. We were vigilant in sticking to our
diversification limits by industry and issue, which helped the Portfolio when
the semiconductor portion of our technology holdings, having skyrocketed all
year, corrected sharply from September through year-end. Meanwhile, other
technology stocks in the Portfolio continued to climb, reaching new highs.
In 1996, we will most likely be adding to the healthcare sector, where we find
the fundamentals compelling in pharmaceuticals, medical devices, and HMOs.
Selected consumer stocks may continue to do well, but the group will probably be
further reduced. Financials can benefit from even lower rates, but we will
monitor the consumer credit situation closely, especially if the economy weakens
more than expected. Finally, we continue to review the commodity-based cyclical
technology holdings such as semiconductor stocks to determine whether they meet
our strict criteria going forward. Regardless, we believe that some areas in
technology will continue to produce substantial earnings gain with the potential
for stock price appreciation.
We believe the low inflation, slow economic growth environment which should
persist in 1996, combined with the added blessing of low interest rates, should
make for a continued favorable environment for growth investing.
- --------------------------------------------------------------------------------
$10,000 Invested in the Total Return
Portfolio on 1/29/93 vs S&P 500 and
the Consumer Price Index
[GRAPH APPEARS HERE]
Total
Return S&P 500 CPI
1/29/93 10000 10000 10000
12/31/93 11503.69 11007 10275
12/31/94 11044.69 11149 10549
12/31/95 14174.04 15339 10785.65
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
The Consumer Price Index (CPI) is a commonly used measure of the rate
of inflation.
"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are registered
trademarks of the Standard & Poor's Corporation. The New York Life MFA Series
Fund, Inc. is neither sponsored by nor affiliated with Standard & Poor's
Corporation.
The S&P 500 is an unmanaged index considered generally representative of the
U.S. stock market. Results assume the reinvestment of all income and capital
gains distributions.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
13
<PAGE>
Portfolio Manager's Comments
VALUE
Portfolio
Average Annual Total Return as of 12/31/95
Since Inception-5/1/95:
16.76%
- --------------------------------------------------------------------------------
Denis Laplaige
Thomas Kolefas
Jeffrey Simon
Judy Secunda
Matthew Sheffler
Portfolio Managers
MacKay-Shields
Financial Corporation
From its inception on May 1 through the end of 1995, the Value Portfolio had a
total return of 16.76%, compared to a return of 21.79% for the S&P 500* for the
same period. For the period available for Lipper** comparisons, May 31, 1995
through December 31, 1995, the Portfolio had a return of 14.15% versus a return
of 15.87% for the average growth and income fund in the Lipper universe for the
same period.
This approach to equity investing emphasizes low price to earnings and low price
to cash flow stocks, free cash flow, and strong financials. It also seeks out
situations with "value catalysts" already in place, such as insider ownership
and stock buybacks, which can help to cause an increase in the stock price.
1995 was a challenging year for value investors, featuring a slowing economy
combined with low inflation and declining interest rates. This environment was
favorable for defense stocks, utilities, technology (replacement of labor by
knowledge-based systems), financials, especially banks and consumer non-
durables, as well as niche sectors, such as fertilizers, oil service and
airlines, where demand and supply came into balance. The environment was
unfavorable for more economically sensitive sectors such as chemicals, papers,
retailers, autos and auto parts. The Portfolio balance was overweighted in
economically sensitive sectors (which were very low P/E) during the year and
very underweighted in technology/capital goods stocks and utilities, primarily
because these sectors did not meet our strict criteria for free cash flow and
value catalysts. This unfavorable sector mix was partially offset by
concentrating in some niche segments which did very well, such as fertilizer and
farm related stocks (i.e., IMC Global, Potash Corp., Vigoro and Case), oil
service (Coastal Corp.) and defense (i.e., McDonnell Douglas, Lockheed Martin,
Loral and Honeywell). Also benefitting the Portfolio was transportation (i.e.,
Union Pacific) and banking (i.e., First Fidelity bought by First Union and First
Interstate with bids from both Wells Fargo and First Bank Systems).
Lastly, although the Fund was only market weighted in consumer non-durables, it
benefitted from extraordinary returns in such names as Philip Morris, Kroger and
Merck. On balance, we believe it was a reasonably good year given the defensive,
capital preservation bias in value investing generally, and our rigorous
methodology, specifically.
Looking forward, although the economy may slow even further before turning
around, an eventual pick-up in the economy will cause a rotation back into
cyclical stocks, which will cause value investing to come back into favor. We
are looking at housing and auto related stocks, as well as basic industry, where
we already have a sizable weighting. At the same time, technology stocks are
correcting severely and there may be some selected stocks in this sector that
now offer the appropriate value catalysts. Over the long term, we are confident
that our adherence to strict value disciplines will reward the patient investor
who seeks to accumulate capital but also to manage downside risk.
- --------------------------------------------------------------------------------
$10,000 Invested in the Value Portfolio
on 5/1/95 vs S&P 500 and the
Consumer Price Index
[GRAPH APPEARS HERE]
Value
Portfolio S&P 500 CPI
5/1/95 10000 10000 10000
12/31/95 11676 10102 12179
"Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
A Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of all
income and capital gains distributions.
** Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies. The
average Lipper fund's performance for the Value, High Yield and International
Equity Portfolios are not available from 5/1/95, but rather from 5/31/95 through
12/31/95.
The Consumer Price Index (CPI) is a commonly used measure of the rate
of inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
14
<PAGE>
Portfolio Manager's Comments
BOND
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
18.31%
Five Years:
9.89%
Ten Years:
9.12%
Since Inception-1/23/84:
10.29%
- --------------------------------------------------------------------------------
Albert R. Corapi, Jr.
Portfolio Manager
New York Life Insurance Company
For the twelve months ended December 31, 1995, the Bond Portfolio posted a
strong double-digit return of 18.31%, beating the average Lipper* fixed income
fund return of 15.25% for the same period.
Despite weak expectations, 1995 was an outstanding year for the bond market.
During the year, the yield curve steepened and rates dropped significantly
across all maturities. The yield for the ten and thirty year U.S. Treasury
securities plummeted 2.26% and 1.93% respectively.
The Federal Reserve Bank eased monetary policy in July and December. This
reversed a string of tightening moves dating back to February of 1994. The
expectation of a more accommodative Central Bank aided the bond market
considerably during the year. The rally was fueled further by indications of
moderate economic growth and low inflation, along with the perception that a
substantial deficit-reduction plan could be enacted.
The Bond Portfolio's performance versus the broad market was enhanced by an
overweighting in corporate securities which outperformed government securities.
Performance relative to our benchmark was influenced by asset allocation
weightings on the yield curve, as we were underweighted on the more interest
sensitive, long end of the curve.
Our conservative, low risk investment style has allowed us to not only maintain
a high quality portfolio, but also offer a competitive total return.
Looking forward, we expect the economy to pick up steam sometime in the second
half of 1996. We will adjust the portfolio opportunistically as events unfold.
$10,000 Invested in the Bond Portfolio on 1/23/84
vs Merrill Lynch Corporate and Government Master Index
and the Consumer Price Index
[GRAPH APPEARS HERE]
Bond
Portfolio Merrill CPI
1/23/84 10000 10000 10000
12/31/84 11028 11422 10365
12/31/85 13370.35 13583.04 10758.87
12/31/86 15532.33 15706.07 10877.22
12/31/87 17636.96 16035.9 11359.08
12/31/88 17390.05 17273.869 11861.15
12/31/89 19396.86 19714.67 12412.69
12/31/90 20948.61 21388.439 13171.11
12/31/91 24390.46 24787.07 13574.14
12/31/92 26373.41 26690.711 13967.79
12/31/93 29379.97 29642.711 14351.91
12/31/94 28383.99 28673.391 14735.11
12/31/95 33581.1 34138 15065.17
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges. The
Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS) ranks
the portfolios that invest in the separate accounts of insurance companies.
The Merrill Lynch Corporate and Government Master Index is an unmanaged index
consisting of issues of the U.S. Government and agencies as well as investment-
grade corporate securities. Results assume the reinvestment of all income and
capital gains distributions.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
15
<PAGE>
Portfolio Manager's Comments
GROWTH
EQUITY
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
29.16%
Five Years:
17.43%
Ten Years:
12.10%
Since Inception-1/23/84:
12.37%
- --------------------------------------------------------------------------------
James Agostisi
Patricia Rossi
Portfolio Managers
New York Life
Insurance Company
The Growth Equity Portfolio generated a return of 29.16% for the twelve months
ended December 31, 1995, lagging the average Lipper* growth fund for the first
time in four years. While the S&P 500** had an exceptional year, the average
Lipper growth fund underperformed this index by approximately 700 basis points.
This disparity was caused by the superior performance of larger capitalized
stocks, which have a higher market weighting in the S&P 500 than the smaller
capitalized stocks in the Lipper universe.
Despite our excellent long-term track record, we were disappointed by our
relative performance this year. Our defensive posture at the beginning of the
year proved to be too conservative as we underestimated the strength of the
technology and financial sectors. The portfolio benefitted from our selections
in the healthcare industry, particularly in certain pharmaceutical companies,
and the financial sector. We also benefitted from the sale of our more cyclical
holdings, which significantly underperformed the market.
In retrospect, 1995's extraordinary returns were primarily a result of sharply
falling interest rates and corporate earnings which generally exceeded
expectations. The combination of these two factors caused equity valuations to
rise sharply. The market was also supported by a favorable supply/demand
situation created by abundant share repurchases by corporations, a record level
of merger and acquisition activity, and strong flows into equity mutual funds.
Looking forward to 1996, we anticipate another positive year in the equity
markets. We expect declining interest rates, benign inflation, positive money
flow into mutual funds and growing earnings to continue. However, we are
concerned about the declining rate of growth. Therefore, we are beginning to
increase our focus on large capitalization stocks which can deliver steady
predictable unit and earnings growth, such as those in the healthcare industry.
In particular, the financial sector should continue to benefit from the low
interest rate environment. Another risk to our forecast is the Federal budget
accord not being as positive as the market anticipates. Should this occur, the
market would react negatively with interest rates rising higher than we are
anticipating, causing stock prices to decline.
Our investment strategy is to focus on mid to large capitalization growth
stocks which are selling at reasonable valuations. This enables us to
concentrate on different sectors of the market while focusing on above average
earnings growth companies. Over the long-term, this strategy should enhance our
clients' total return.
- --------------------------------------------------------------------------------
$10,000 Invested in the Growth Equity Portfolio on 1/23/84
vs S&P 500 and the Consumer Price Index
[GRAPH APPEARS HERE]
Growth
Equity S&P 500 CPI
1/23/84 10000 10000 10000
12/31/84 9824 10755 10365
12/31/85 12162.11 14199.83 10758.87
12/31/86 12648.6 16833.891 10877.22
12/31/87 13035.64 17712.619 11359.08
12/31/88 14791.54 20691.891 11861.15
12/31/89 18632.91 27216.039 12421.69
12/31/90 17535.43 26350.57 13171.11
12/31/91 23472.93 34405.941 13574.14
12/31/92 26423.47 37051.75 13967.79
12/31/93 30046.13 40753.219 14351.91
12/31/94 30406.69 41278.941 14735.11
12/31/95 39273.28 56792 15065.17
* Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
** "Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of all
income and capital gains distributions.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
16
<PAGE>
Portfolio Manager's Comments
INDEXED
EQUITY
Portfolio
Average Annual Total Return as of 12/31/95
One Year:
36.89%
Since Inception-1/29/93:
14.83%
- --------------------------------------------------------------------------------
James Mehling
Holly Vinchesi
Portfolio Managers
Monitor Capital Advisors, Inc.
The stock market roared ahead throughout 1995. The Indexed Equity Portfolio is
designed to replicate the S&P 500 index*, which outperformed most other broad
stock market measures this year (except for the technology-laden NASDAQ
composite index). The Indexed Equity Portfolio tracked its benchmark almost
perfectly with a 36.89% gain. The fund substantially outperformed the Lipper**
average U.S. stock fund, which returned 31.10%.
Slow economic growth, low interest rates and continually strong profits pushed
stock markets ahead. Technology stocks were among the big winners this year,
and many mutual funds benefitted from large weightings in that sector. Index
funds do not attempt to enhance performance by strategic allocations to
particular stocks or market sectors. This diversification across industries
enabled the Portfolio to reap rewards, not only from technology stocks, but in
many other top-performing sectors that received less attention from active
managers. In addition, index funds typically do not build up large cash
positions but remain fully invested at all times. In a rising market, such as
that of 1995, an index fund will participate fully as stock prices climb. Of
course, because the intent of indexation is to ensure market returns, the
Portfolio will participate fully in a bear market as well.
The performance of the S&P 500 index surpassed so many market measures (like
the Wilshire 5000, Russell 2000, and NYSE composite indices) because it contains
a relatively greater proportion of large capitalization stocks. These stocks -
issues representing the large blue-chip multi-national corporations in America -
were among the best performing securities in the world last year and propelled
the S&P 500 index to a spectacular annual return.
- --------------------------------------------------------------------------------
$10,000 Invested in the Indexed Equity
Portfolio on 1/29/93 vs S&P 500
and the Consumer Price Index
[GRAPH APPEARS HERE]
Index Equity
Portfolio S&P 500 CPI
1/29/93 10000 10000 10000
12/31/93 10852.93 11007 10275
12/31/94 10935.41 11149 10549
12/31/95 14969.58 15339 10785.65
* "Standard & Poor's 500 Composite Stock Price Index" and "S&P 500" are
registered trademarks of the Standard & Poor's Corporation. The New York Life
MFA Series Fund, Inc. is neither sponsored by nor affiliated with Standard &
Poor's Corporation. The S&P 500 is an unmanaged index considered generally
representative of the U.S. stock market. Results assume the reinvestment of all
income and capital gains distributions.
** Lipper Analytical Services, Inc. is an independent monitor of mutual fund
performance. Its rankings are based on total returns with capital gains and
dividends reinvested. Results do not reflect any deduction of sales charges.
The Lipper Variable Insurance Products Performance Analysis Service (L-VIPPAS)
ranks the portfolios that invest in the separate accounts of insurance
companies.
The Consumer Price Index (CPI) is a commonly used measure of the rate of
inflation.
Included is the reinvestment of all distributions at net asset value and the
change in share price for the stated period. Total returns shown indicate past
performance and are not indicative of future results. Investment return and
principal value will fluctuate so that shares, upon redemption, may be worth
more or less than their original cost.
17
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<CAPTION>
CAPITAL CASH
APPRECIATION MANAGEMENT GOVERNMENT
<S> <C> <C> <C>
------------------------------------
ASSETS:
Investment in New York Life MFA Series
Fund, Inc., at net asset value
(Identified Cost: $21,699,203;
$3,127,013; $960,948; $11,434,113;
$10,781,409; $7,848,862; $6,089,705;
$1,400,887; $4,709,797; $4,170,114,
respectively)........................... $26,096,418 $ 3,127,002 $ 966,590
LIABILITIES:
Liability for mortality and expense risk
charges................................. 42,006 3,876 1,596
----------- ----------- -----------
Total equity............................ $26,054,412 $ 3,123,126 $ 964,994
=========== =========== ===========
TOTAL EQUITY REPRESENTED BY:
Equity of Policyowners:
Variable accumulation units outstanding:
1,988,398; 2,883,826; 85,299; 91,397;
29,571; 724,564; 94,528; 122,386;
370,775; 328,212, respectively.......... $26,054,412 $ 3,123,126 $ 964,994
Equity of New York Life Insurance and An-
nuity Corporation:
Variable accumulation units outstanding:
0; 0; 0; 1,000,000; 1,000,000; 0;
500,000; 0; 0; 0, respectively.......... -- -- --
----------- ----------- -----------
Total equity............................ $26,054,412 $ 3,123,126 $ 964,994
=========== =========== ===========
Variable accumulation unit value......... $ 13.10 $ 1.08 $ 11.31
=========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
18
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL TOTAL GROWTH INDEXED
CORPORATE BOND EQUITY RETURN VALUE BOND EQUITY EQUITY
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$11,974,917 $10,979,637 $ 8,974,429 $ 6,921,109 $ 1,434,006 $ 4,832,090 $ 4,729,379
20,964 19,113 14,683 11,804 2,276 7,798 7,474
----------- ----------- ----------- ----------- ----------- ----------- -----------
$11,953,953 $10,960,524 $ 8,959,746 $ 6,909,305 $ 1,431,730 $ 4,824,292 $ 4,721,905
=========== =========== =========== =========== =========== =========== ===========
$ 1,001,059 $ 314,810 $ 8,959,746 $ 1,098,560 $ 1,431,730 $ 4,824,292 $ 4,721,905
10,952,894 10,645,714 -- 5,810,745 -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
$11,953,953 $10,960,524 $ 8,959,746 $ 6,909,305 $ 1,431,730 $ 4,824,292 $ 4,721,905
=========== =========== =========== =========== =========== =========== ===========
$ 10.95 $ 10.65 $ 12.37 $ 11.62 $ 11.70 $ 13.01 $ 14.39
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
19
<PAGE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<CAPTION>
CAPITAL CASH
APPRECIATION MANAGEMENT GOVERNMENT
------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend income.......................... $ 103,050 $ 90,630 $ 67,028
Mortality and expense risk charges....... (109,478) (11,695) (5,066)
---------- ----------- ----------
Net investment income (loss)............ (6,428) 78,935 61,962
---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS):
Proceeds from sale of investments........ 124,239 6,358,057 281,210
Cost of investments sold................. (116,184) (6,358,078) (274,817)
---------- ----------- ----------
Net realized gain (loss) on investments. 8,055 (21) 6,393
Realized gain distribution received...... -- -- --
Change in unrealized
appreciation/depreciation
on investments.......................... 4,319,912 (10) 33,007
---------- ----------- ----------
Net gain (loss) on investments.......... 4,327,967 (31) 39,400
---------- ----------- ----------
Decrease attributable to funds of New
York Life Insurance
and Annuity Corporation retained by
Separate Account........................ (4,266) (106) (109)
---------- ----------- ----------
Net increase in total equity resulting
from operations........................ $4,317,273 $ 78,798 $ 101,253
========== =========== ==========
</TABLE>
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
20
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL TOTAL GROWTH INDEXED
COPORATE BOND(a) EQUITY(a) RETURN VALUE(A) BOND EQUITY EQUITY
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 421,652 $ 513,224 $ 210,054 $ 56,399 $ 87,653 $ 54,972 $ 90,666
(50,471) (47,380) (41,758) (27,067) (6,131) (18,465) (19,115)
---------- ---------- ---------- ---------- ---------- ---------- ----------
371,181 465,844 168,296 29,332 81,522 36,507 71,551
---------- ---------- ---------- ---------- ---------- ---------- ----------
46,011 44,736 217,483 49,641 49,659 124,759 123,718
(43,641) (44,319) (209,701) (44,508) (49,253) (116,875) (106,179)
---------- ---------- ---------- ---------- ---------- ---------- ----------
2,370 417 7,782 5,133 406 7,884 17,539
71,092 -- -- -- -- 388,941 128,630
540,804 198,228 1,184,761 831,404 53,397 168,723 572,871
---------- ---------- ---------- ---------- ---------- ---------- ----------
614,266 198,645 1,192,543 836,537 53,803 565,548 719,040
---------- ---------- ---------- ---------- ---------- ---------- ----------
(1,187) (1,004) (1,368) (915) (136) (637) (896)
---------- ---------- ---------- ---------- ---------- ---------- ----------
$ 984,260 $ 663,485 $1,359,471 $ 864,954 $ 135,189 $ 601,418 $ 789,695
========== ========== ========== ========== ========== ========== ==========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
21
<PAGE>
STATEMENT OF CHANGES IN TOTAL EQUITY
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
CAPITAL APPRECIATION
------------------------
1995 1994
-----------------------
<S> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income (loss).......................... $ (6,428) $ 11,728
Net realized gain (loss) on investments............... 8,055 (15,948)
Realized gain distribution received................... -- --
Change in unrealized appreciation/depreciation on
investments.......................................... 4,319,912 77,278
Increase (decrease) attributable to funds of New York
Life Insurance and Annuity Corporation retained by
Separate Account..................................... (4,266) (130)
----------- -----------
Net increase (decrease) in total equity resulting
from operations..................................... 4,317,273 72,928
----------- -----------
Contributions and withdrawals:
Equity contributions by New York Life Insurance and
Annuity Corporation.................................. -- --
Policyowners' premium payments........................ 13,583,511 3,849,463
Cost of insurance..................................... (4,921,516) (1,040,147)
Policyowners' surrenders.............................. (350,169) (11,855)
Net transfers from (to) Fixed Account................. (173,462) 14,171
Transfers between Investment Divisions................ 6,607,556 4,111,141
Policyowners' death benefits.......................... (6,744) --
----------- -----------
Total contributions and withdrawals (net)............ 14,739,176 6,922,773
----------- -----------
Increase in total equity............................ 19,056,449 6,995,701
TOTAL EQUITY:
Beginning of period................................... 6,997,963 2,262
----------- -----------
End of period......................................... $26,054,412 $ 6,997,963
=========== ===========
</TABLE>
(a)For the period May 1, 1995 (Commencement of Operations) through December 31,
1995.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
22
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
<TABLE>
<CAPTION>
HIGH YIELD
CASH MANAGEMENT GOVERNMENT CORPORATE BOND INTERNATIONAL EQUITY
- ------------------------- ------------------------ ------------------------ ------------------------
1995 1994 1995 1994 1995(A) 1994 1995(A) 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 78,935 $ 17,604 $ 61,962 $ 27,524 $ 371,181 $ -- $ 465,844 $ --
(21) (3) 6,393 (2,503) 2,370 -- 417 --
-- -- -- -- 71,092 -- -- --
(10) (1) 33,007 (26,493) 540,804 -- 198,228 --
(106) (24) (109) 1 (1,187) -- (1,004) --
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
78,798 17,576 101,253 (1,471) 984,260 -- 663,485 --
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
-- -- -- -- 10,000,000 -- 10,000,000 --
16,416,407 9,690,281 488,388 266,309 330,982 -- 118,017 --
(583,667) (346,317) (164,242) (50,722) (62,383) -- (24,022) --
(2,298) (839) (7,422) (236) (62) -- (66) --
(227,064) (277,902) (15,530) -- (16,477) -- (967) --
(14,242,324) (7,510,595) 173,606 152,547 717,633 -- 204,077 --
-- -- -- -- -- -- -- --
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,361,054 1,554,628 474,800 367,898 10,969,693 -- 10,297,039 --
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
1,439,852 1,572,204 576,053 366,427 11,953,953 -- 10,960,524 --
1,683,274 111,070 388,941 22,514 -- -- -- --
- ----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
$ 3,123,126 $ 1,683,274 $ 964,994 $ 388,941 $11,953,953 $ -- $10,960,524 $ --
=========== =========== =========== =========== =========== =========== =========== ===========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
23
<PAGE>
STATEMENT OF CHANGES IN TOTAL EQUITY (CONTINUED)
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
TOTAL RETURN
----------------------
1995 1994
----------------------
<S> <C> <C>
INCREASE IN TOTAL EQUITY:
Operations:
Net investment income................................... $ 168,296 $ 70,789
Net realized gain (loss) on investments................. 7,782 (10,776)
Realized gain distribution received..................... -- --
Change in unrealized appreciation/depreciation on
investments............................................ 1,184,761 (59,141)
Decrease attributable to funds of New York Life
Insurance and Annuity Corporation
retained by Separate Account........................... (1,368) (20)
---------- ----------
Net increase in total equity resulting from
operations............................................ 1,359,471 852
---------- ----------
Contributions and withdrawals:
Equity contributions by New York Life Insurance and
Annuity Corporation.................................... -- --
Policyowners' premium payments.......................... 4,559,675 1,679,464
Cost of insurance....................................... (1,729,202) (405,121)
Policyowners' surrenders................................ (175,199) (4,333)
Net transfers from (to) Fixed Account................... (153,144) (41,397)
Transfers between Investment Divisions.................. 1,903,627 1,941,419
Policyowners' death benefits............................ (1,793) --
---------- ----------
Total contributions and withdrawals (net).............. 4,403,964 3,170,032
---------- ----------
Increase in total equity.............................. 5,763,435 3,170,884
TOTAL EQUITY:
Beginning of period..................................... 3,196,311 25,427
---------- ----------
End of period........................................... $8,959,746 $3,196,311
========== ==========
</TABLE>
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
(b) For the period May 2, 1994 (Commencement of Operations) through December
31, 1994.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
24
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
<TABLE>
<CAPTION>
VALUE BOND GROWTH EQUITY INDEXED EQUITY
- ---------------------- ---------------------- ---------------------- ----------------------
1995(a) 1994 1995 1994(b) 1995 1994(b) 1995 1994
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 29,332 $ -- $ 81,522 $ 21,272 $ 36,507 $ 8,293 $ 71,551 $ 20,310
5,133 -- 406 (4) 7,884 417 17,539 (467)
-- -- -- -- 388,941 39,333 128,630 4,323
831,404 -- 53,397 (20,278) 168,723 (46,431) 572,871 (13,607)
(915) -- (136) (1) (637) (6) (896) (14)
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
864,954 -- 135,189 989 601,418 1,606 789,695 10,545
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
5,000,000 -- -- -- -- -- -- --
397,494 -- 761,127 117,636 2,495,614 253,183 2,254,847 604,456
(81,413) -- (265,847) (22,471) (802,176) (66,107) (785,474) (142,158)
(4,246) -- (10,640) (11) (33,720) (305) (45,112) (1,860)
-- -- (4,094) -- (63,184) 121 (64,176) (2,035)
732,516 -- 481,252 238,600 1,936,157 502,198 1,482,291 620,551
-- -- -- -- (513) -- (97) --
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
6,044,351 -- 961,798 333,754 3,532,178 689,090 2,842,279 1,078,954
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
6,909,305 -- 1,096,987 334,743 4,133,596 690,696 3,631,974 1,089,499
-- -- 334,743 -- 690,696 -- 1,089,931 432
- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
$6,909,305 $ -- $1,431,730 $ 334,743 $4,824,292 $ 690,696 $4,721,905 $1,089,931
========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Organization and Accounting Policies:
- -------------------------------------------------------------------------------
New York Life Insurance and Annuity Corporation Variable Universal Life
Separate Account I ("VL Separate Account I") was established on June 4, 1993,
under Delaware law by New York Life Insurance and Annuity Corporation, a
wholly owned subsidiary of New York Life Insurance Company. The VL Separate
Account I policies are designed for individuals who seek lifetime insurance
protection and flexibility with respect to premium payments and death
benefits. The policies are offered by NYLIFE Distributors Inc. and sold by
registered representatives of NYLIFE Securities Inc., both of which are
wholly-owned subsidiaries of NYLIFE Inc. and are indirect wholly-owned
subsidiaries of New York Life Insurance Company. VL Separate Account I is
registered under the Investment Company Act of 1940, as amended, as a unit
investment trust. The assets of VL Separate Account I are invested exclusively
in the shares of the New York Life MFA Series Fund, Inc. (the "MFA Fund"), a
diversified open-end management investment company, and are clearly identified
and distinguished from the other assets and liabilities of New York Life
Insurance and Annuity Corporation.
On May 1, 1995, New York Life Insurance and Annuity Corporation created three
new Investment Divisions within VL Separate Account I, the High Yield
Corporate Bond, International Equity, and Value Investment Divisions. These
Investment Divisions were established for the purpose of investing premium
payments in the MFA Fund's newly established High Yield Corporate Bond,
International Equity and Value Portfolios.
There are ten Investment Divisions within VL Separate Account I which invest
solely in the corresponding Portfolios of the MFA Fund: the Capital
Appreciation, Cash Management, Government, High Yield Corporate Bond,
International Equity, Total Return, Value, Bond, Growth Equity and Indexed
Equity Portfolios. Premium payments received are allocated to the Cash
Management Investment Division until 20 days after the policy issue date.
Thereafter, premium payments will be allocated to the Investment Divisions of
VL Separate Account I in accordance with the Policyowner's instructions. In
addition, the Policyowner has the option to transfer amounts between the
Investment Divisions of VL Separate Account I and the Fixed Account of New
York Life Insurance and Annuity Corporation.
No Federal income tax is payable on investment income or capital gains of VL
Separate Account I under current Federal income tax law.
Security Valuation--The investment in the MFA Fund is valued at the net asset
value of shares of the respective fund portfolios.
Security Transactions--Realized gains and losses from security transactions
are reported on the identified cost basis. Security transactions are accounted
for as of the date the securities are purchased or sold (trade date).
Distributions Received--Dividend income and capital gain distributions are
recorded on the ex-dividend date and reinvested in the corresponding
portfolio.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
26
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
(THIS PAGE INTENTIONALLY LEFT BLANK)
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2--Investments (in 000's):
- --------------------------------------------------------------------------------
At December 31, 1995, the investment in the MFA Fund by the respective Invest-
ment Divisions of VL Separate Account I is as follows:
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------
<S> <C> <C> <C> <C>
Number of Shares.............. 1,684 3,127 97 1,135
Identified Cost*.............. $21,699 $3,127 $961 $11,434
</TABLE>
<TABLE>
* The cost stated also represents the aggregate cost for Federal income tax
purposes.
Transactions in MFA Fund shares for the year ended December 31, 1995, were as
follows:
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(a)
--------------------------------------------
<S> <C> <C> <C> <C>
Purchases..................... $14,885 $7,800 $819 $11,478
Proceeds from Sales........... 124 6,358 281 46
</TABLE>
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
28
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED
EQUITY RETURN VALUE BOND EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1,077 677 598 107 281 350
$10,781 $7,849 $6,090 $1,401 $4,710 $4,170
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED
EQUITY RETURN VALUE BOND EQUITY EQUITY
PORTFOLIO(a) PORTFOLIO PORTFOLIO(a) PORTFOLIO PORTFOLIO PORTFOLIO
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$10,826 $4,799 $6,134 $1,095 $4,089 $3,171
45 217 50 50 125 124
</TABLE>
On May 1, 1995, to facilitate the commencement of operations for the three
new portfolios of the MFA Fund, New York Life Insurance and Annuity
Corporation contributed $25,000,000 to the three new Investment Divisions of
VL Separate Account I which then purchased shares in the MFA Fund as follows:
High Yield Corporate Bond, $10,000,000; International Equity, $10,000,000 and
Value, $5,000,000. In aggregate, these Investment Divisions purchased
2,500,000 shares at $10.00 per share in the new portfolios.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3--Mortality and Expense Risk Charges:
- --------------------------------------------------------------------------------
VL Separate Account I is charged for administrative services provided and the
mortality and expense risks assumed by New York Life Insurance and Annuity
Corporation. These charges are made at an annual rate of .70% of the daily net
asset value of each Investment Division. New York Life Insurance and Annuity
Corporation may increase these charges in the future up to a maximum annual
rate of 1.00%. The amounts of these charges retained in the Investment
Divisions represent funds of New York Life Insurance and Annuity Corporation.
Accordingly, New York Life Insurance and Annuity Corporation participates in
the results of each Investment Division ratably with the Policyowners.
- --------------------------------------------------------------------------------
NOTE 4--Distribution of Net Income:
- --------------------------------------------------------------------------------
VL Separate Account I does not expect to declare dividends to Policyowners from
accumulated net income and realized gains. The income and gains are distributed
to Policyowners as part of withdrawals of amounts (in the form of surrenders,
death benefits, or transfers) in excess of the net premium payments.
30
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
(THIS PAGE INTENTIONALLY LEFT BLANK)
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 5--Cost to Policyowners (in 000's):
- --------------------------------------------------------------------------------
At December 31, 1995, the cost to Policyowners for accumulation units outstand-
ing, with adjustments for net investment income, market
appreciation/depreciation and deduction for expenses is as follows:
<TABLE>
<CAPTION>
CAPITAL CASH HIGH YIELD
APPRECIATION MANAGEMENT GOVERNMENT CORPORATE BOND
-------------------------------------------------
<S> <C> <C> <C> <C>
Cost to Policyowners (net of
withdrawals)................ $29,478 $6,761 $1,166 $11,067
Sales charges................ (1,853) (2,802) (86) (35)
Cost of insurance............ (5,961) (933) (215) (62)
Accumulated net investment
income...................... 5 97 90 371
Accumulated net realized gain
(loss) on investments and
realized gain distributions
received.................... (8) -- 4 73
Unrealized
appreciation/depreciation
on investments.............. 4,397 -- 6 541
Decrease attributable to
funds of New York Life
Insurance and Annuity
Corporation retained by
Separate Account............ (4) -- -- (1)
------- ------- ------- -------
Net amount applicable to
Policyowners................ $26,054 $ 3,123 $ 965 $11,954
======= ======= ======= =======
</TABLE>
32
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL TOTAL GROWTH INDEXED
EQUITY RETURN VALUE BOND EQUITY EQUITY
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$10,334 $10,398 $ 6,168 $ 1,677 $ 5,380 $ 5,154
(12) (665) (42) (93) (291) (304)
(24) (2,134) (81) (288) (868) (928)
466 239 29 103 45 92
-- (3) 5 -- 437 150
198 1,126 831 33 122 559
(1) (1) (1) -- (1) (1)
------- ------- ------- ------- ------- -------
$10,961 $ 8,960 $ 6,909 $ 1,432 $ 4,824 $ 4,722
======= ======= ======= ======= ======= =======
</TABLE>
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Unit Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in accumulation units for the years ended December 31, 1995 and
December 31, 1994 were as follows:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CASH MANAGEMENT
-------------------- -----------------
1995 1994 1995 1994
-----------------------------------------
<S> <C> <C> <C> <C>
Units issued on contribution by New
York Life Insurance
and Annuity Corporation............ -- -- -- --
Units issued on premium payments.... 1,166 402 15,446 9,516
Units redeemed on cost of insurance. (421) (108) (550) (340)
Units redeemed on surrenders........ (29) (1) (2) (1)
Units redeemed on death benefits.... (1) -- -- --
Units issued (redeemed) on net
transfers to Fixed Account......... (15) 1 (215) (274)
Units issued (redeemed) on transfers
between Investment Divisions....... 568 426 (13,425) (7,382)
---------- ---------- -------- -------
Net increase........................ 1,268 720 1,254 1,519
Units outstanding, beginning of
period............................. 720 -- 1,630 111
---------- ---------- -------- -------
Units outstanding, end of period.... 1,988 720 2,884 1,630
========== ========== ======== =======
</TABLE>
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
34
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD
GOVERNMENT CORPORATE BOND INTERNATIONAL EQUITY TOTAL RETURN VALUE
- -------------- --------------- ----------------------- -------------- ---------------
1995 1994 1995(a) 1994 1995(a) 1994 1995 1994 1995(a) 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- 1,000 -- 1,000 -- -- -- 500 --
47 27 31 -- 12 -- 407 174 35 --
(15) (5) (6) -- (2) -- (153) (42) (7) --
(1) -- -- -- -- -- (15) -- -- --
-- -- -- -- -- -- -- -- -- --
(1) -- (2) -- -- -- (14) (5) -- --
15 16 68 -- 20 -- 171 200 67 --
- ------ ------ ------ ------ ---------- ---------- ------ ------ ------ ------
45 38 1,091 -- 1,030 -- 396 327 595 --
40 2 -- -- -- -- 329 2 -- --
- ------ ------ ------ ------ ---------- ---------- ------ ------ ------ ------
85 40 1,091 -- 1,030 -- 725 329 595 --
====== ====== ====== ====== ========== ========== ====== ====== ====== ======
</TABLE>
35
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 6--Unit Transactions (in 000's) (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND GROWTH EQUITY INDEXED EQUITY
--------------- --------------- --------------
1995 1994(b) 1995 1994(b) 1995 1994
------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Units issued on premium
payments.................... 70 12 212 25 176 58
Units redeemed on cost of
insurance................... (25) (2) (67) (7) (61) (14)
Units redeemed on surrenders. (1) -- (3) -- (3) --
Units redeemed on net
transfers to Fixed Account.. -- -- (5) -- (5) --
Units issued on transfers
between Investment
Divisions................... 44 24 166 50 118 59
------ ------ ------ ------ ------- -------
Net increase................. 88 34 303 68 225 103
Units outstanding, beginning
of period................... 34 -- 68 -- 103 --
------ ------ ------ ------ ------- -------
Units outstanding, end of
period...................... 122 34 371 68 328 103
====== ====== ====== ====== ======= =======
</TABLE>
(a) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
(b) For the period May 2, 1994 (Commencement of Operations) through December
31, 1994.
36
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
(THIS PAGE INTENTIONALLY LEFT BLANK)
37
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--Selected Per Unit Data:
- --------------------------------------------------------------------------------
The following table presents selected per accumulation unit income and capital
changes (for an accumulation unit outstanding throughout each period) with
respect to each Investment Division of VL Separate Account I:
<TABLE>
<CAPTION>
CAPITAL APPRECIATION CASH MANAGEMENT
------------------------ -----------------------
1995+ 1994+ 1993++(a) 1995+ 1994+ 1993++(a)
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period....................... $ 9.72 $10.23 $10.00 $ 1.03 $ 1.00 $ 1.00
Net investment income ........ -- 0.04 0.02 0.05 0.03 --
Net realized and unrealized
gains (losses) on security
transactions and realized
capital gain distributions
received (includes the effect
of capital share
transactions)................ 3.38 (0.55) 0.21 -- -- --
------ ------ ------ ------ ------ ------
Unit value, end of period..... $13.10 $ 9.72 $10.23 $ 1.08 $ 1.03 $ 1.00
====== ====== ====== ====== ====== ======
</TABLE>
+Per unit data based on average monthly units outstanding during the period.
++Per unit data based on average daily units outstanding during the period.
(a) For the period November 15, 1993 (Commencement of Operations) through De-
cember 31, 1993.
(b) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
38
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HIGH YIELD
GOVERNMENT CORPORATE BOND INTERNATIONAL EQUITY
- ------------------------------------------------------------------------
1995+ 1994+ 1993++(a) 1995+(b) 1994 1993 1995+(b) 1994 1993
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 9.76 $10.01 $10.00 $10.00 $ -- $ -- $10.00 $ -- $ --
0.93 1.46 0.39 0.36 -- -- 0.46 -- --
0.62 (1.71) (0.38) 0.59 -- -- 0.19 -- --
------ ------ ------ ------ ------ ------ ------ ------ ------
$11.31 $ 9.76 $10.01 $10.95 $ -- $ -- $10.65 $ -- $ --
====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
39
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 7--Selected Per Unit Data (Continued):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN VALUE
------------------------ ----------------------
1995+ 1994+ 1993++(a) 1995+(b) 1994 1993
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unit value, beginning of
period........................ $ 9.70 $10.18 $10.00 $10.00 $ -- $ --
Net investment income ......... 0.32 0.52 0.18 0.05 -- --
Net realized and unrealized
gains (losses) on security
transactions and realized
capital gain distributions
received (includes the effect
of capital share
transactions)................. 2.35 (1.00) -- 1.57 -- --
------ ------ ------ ------ ------ ------
Unit value, end of period...... $12.37 $ 9.70 $10.18 $11.62 $ -- $ --
====== ====== ====== ====== ====== ======
</TABLE>
+Per unit data based on average monthly units outstanding during the period.
++Per unit data based on average daily units outstanding during the period.
(a) For the period November 15, 1993 (Commencement of Operations) through De-
cember 31, 1993.
(b) For the period May 1, 1995 (Commencement of Operations) through December
31, 1995.
(c) For the period May 2, 1994 (Commencement of Operations) through December
31, 1994.
40
<PAGE>
NEW YORK LIFE
INSURANCE AND
ANNUITY CORPORATION
VL SEPARATE ACCOUNT I
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND GROWTH EQUITY INDEXED EQUITY
----------------------------------------------- -----------------------
1995+ 1994+(c) 1993 1995+ 1994+(c) 1993 1995+ 1994+ 1993++(a)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 9.96 $10.00 $ -- $10.14 $10.00 $ -- $10.58 $10.00 $10.00
1.03 1.70 -- 0.17 0.30 -- 0.34 0.49 --
0.71 (1.74) -- 2.70 (0.16) -- 3.47 0.09 --
------ ------ ------ ------ ------ ------ ------ ------ ------
$11.70 $ 9.96 $ -- $13.01 $10.14 $ -- $14.39 $10.58 $10.00
====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
41
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Board of Directors of New York Life Insurance
and Annuity Corporation and the Variable Universal Life Policyowners:
In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in total equity and the se-
lected per unit data present fairly, in all material respects, the financial
position of the New York Life Insurance and Annuity Corporation Variable Uni-
versal Life Separate Account I (comprised of the Capital Appreciation Invest-
ment Division, the Cash Management Investment Division, the Government Invest-
ment Division, the High Yield Corporate Bond Investment Division, the Interna-
tional Equity Investment Division, the Total Return Investment Division, the
Value Investment Division, the Bond Investment Division, the Growth Equity In-
vestment Division and the Indexed Equity Investment Division) at December 31,
1995, the results of its operations for the year then ended (for the High
Yield Corporate Bond Investment Division, International Equity Investment Di-
vision and Value Investment Division for the period May 1, 1995 (commencement
of operations) through December 31, 1995) and the changes in its total equity
and the selected per unit data for each of the periods presented in conformity
with generally accepted accounting principles. These financial statements and
the selected per unit data (hereafter referred to as "financial statements")
are the responsibility of management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted au-
diting standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of mate-
rial misstatement. An audit includes examining, on a test basis, evidence sup-
porting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of the investment at December 31, 1995
with New York Life MFA Series Fund, Inc., provide a reasonable basis for the
opinion expressed above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 15, 1996
42
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
43
<PAGE>
NEW YORK LIFE MFA
NEW SERIES FUND, INC.
[LOGO] YORK
LIFE
- -------------------------------------------------------------------------------
51 Madison Avenue, New York, N.Y. 10010
Annual Report
December 31, 1995
- -------------------------------------------------------------------------------
To Policyowners:
The assets of NYLIAC Variable Universal Life Separate Account I, NYLIAC
Variable Annuity Separate Account I, NYLIAC Variable Annuity Separate Account
II, NYLIAC LifeStages SM Separate Account, New York Life Insurance and Annuity
Corporation MFA Separate Account I, New York Life Insurance and Annuity
Corporation MFA Separate Account II and New York Life Insurance and Annuity
Corporation VLI Separate Account are invested in shares of New York Life MFA
Series Fund, Inc. In addition, the assets of NYLIAC Variable Annuity Separate
Account I, NYLIAC Variable Annuity Separate Account II and NYLIAC
LifeStages SM Separate Account may be invested in Acacia Capital Corporation,
which is not affiliated with New York Life MFA Series Fund, Inc. or NYLIAC and
any of its subsidiaries.
At the Annual Meeting of the Board of Directors of the Fund held on February
21, 1995, executive officers of the Fund were elected. On December 29, 1995, a
dividend distribution was paid to NYLIAC Variable Universal Life Separate Ac-
count I, NYLIAC Variable Annuity Separate Account I, NYLIAC Variable Annuity
Separate Account II, NYLIAC LifeStages SM Separate Account, New York Life In-
surance and Annuity Corporation MFA Separate Account I, New York Life Insur-
ance and Annuity Corporation MFA Separate Account II and New York Life Insur-
ance and Annuity Corporation VLI Separate Account as the sole shareholders of
record of New York Life MFA Series Fund, Inc.
/s/ Richard M. Kernan, Jr.
Chairman of the Board
and Chief Executive Officer
NEW YORK LIFE MFA SERIES FUND, INC.
44
<PAGE>
CAPITAL APPRECIATION PORTFOLIO NEW YORK LIFE MFA
PORTFOLIO OF INVESTMENTS SERIES FUND, INC.
December 31, 1995
COMMON STOCKS (91.5%)+
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
AIRLINES (0.9%)
Atlantic Southeast Airlines, Inc...................... 35,200 $ 756,800
Southwest Airlines Co................................. 62,300 1,448,475
------------
2,205,275
------------
AUTO PARTS (0.8%)
Lear Seating Corp. (a)................................ 69,500 2,015,500
------------
BANKS (4.9%)
Bank of New York Co., Inc............................. 73,000 3,558,750
Barnett Banks, Inc.................................... 55,000 3,245,000
First Interstate Bancorp.............................. 34,500 4,709,250
NationsBank Corp. .................................... 5,500 382,938
------------
11,895,938
------------
BIOTECHNOLOGY (1.1%)
Guidant Corp. ........................................ 63,100 2,665,975
------------
BROKERAGE (0.2%)
Schwab (Charles) Corp................................. 20,400 410,550
------------
BUILDINGS (1.2%)
Lennar Corp........................................... 26,850 674,606
Oakwood Homes Corp.................................... 62,000 2,379,250
------------
3,053,856
------------
COMMERCIAL SERVICES (1.1%)
Service Corp. International........................... 62,000 2,728,000
------------
COMPUTERS & OFFICE
EQUIPMENT (6.7%)
Alco Standard Corp.................................... 118,400 5,402,000
Danka Business Systems
Plc ADR (b).......................................... 72,500 2,682,500
EMC Corp. (a)......................................... 60,000 922,500
Hewlett-Packard Co.................................... 31,000 2,596,250
Seagate Technology, Inc. (a).......................... 27,500 1,306,250
Sun Microsystems, Inc. (a)............................ 76,800 3,504,000
------------
16,413,500
------------
CONSUMER DURABLES (1.4%)
Black & Decker Corp................................... 96,100 3,387,525
------------
CONSUMER FINANCIAL
SERVICES (1.2%)
First Data Corp....................................... 43,600 2,915,750
------------
CONSUMER SERVICES (0.2%)
CUC International Inc. (a)............................ 13,200 450,450
------------
DOMESTIC OILS (1.4%)
Triton Energy Corp. (a)............................... 58,400 3,350,700
------------
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
DRUGS (9.3%)
Amgen, Inc. (a)....................................... 83,600 $ 4,963,750
Elan Corp. Plc ADR (a)(b)............................. 68,000 3,306,500
Genzyme Corp. (a)..................................... 47,900 2,987,763
Mylan Laboratories Inc................................ 122,150 2,870,525
Pharmacia & Upjohn, Inc............................... 66,000 2,557,500
Schering-Plough Corp.................................. 65,200 3,569,700
Teva Pharmaceutical Industries Ltd. ADR (b)........... 54,000 2,504,250
------------
22,759,988
------------
ELECTRONICS (1.2%)
Vishay Intertechnology, Inc. (a)...................... 90,820 2,860,830
------------
ENERGY (0.6%)
Abacan Resource Corp. (a)............................. 550,000 1,478,125
------------
FINANCE (7.8%)
Federal National
Mortgage Association................................. 23,200 2,879,700
Green Tree Financial Corp............................. 202,400 5,338,300
Household International, Inc. ........................ 58,700 3,470,638
MGIC Investment Corp.................................. 50,800 2,755,900
Travelers Group Inc................................... 75,166 4,726,062
------------
19,170,600
------------
FINANCIAL SERVICES (3.3%)
First USA, Inc........................................ 75,700 3,359,188
SunAmerica Inc. ...................................... 98,100 4,659,750
------------
8,018,938
------------
HEALTH CARE (7.9%)
Columbia/HCA Healthcare Corp.......................... 74,812 3,796,709
HealthCare COMPARE Corp. (a).......................... 46,600 2,027,100
HEALTHSOUTH Corp. (a)................................. 90,000 2,621,250
Humana, Inc. (a)...................................... 81,000 2,217,375
OrNda HealthCorp. (a)................................. 105,500 2,452,875
Unison HealthCare Corp. (a)........................... 104,000 975,000
United Healthcare Corp................................ 78,700 5,154,850
------------
19,245,159
------------
HOUSEHOLD PRODUCTS (0.1%)
Singer Company N.V.(The).............................. 4,800 133,800
------------
INSURANCE (1.8%)
American International Group, Inc. 47,750 4,416,875
------------
MEDIA (1.2%)
Viacom Inc. Class A (a)............................... 5,360 245,890
Viacom Inc. Class B (a)............................... 59,412 2,814,643
------------
3,060,533
------------
MEDICAL EQUIPMENT (3.6%)
Cordis Corp. (a)...................................... 37,200 3,738,600
Medtronic, Inc. ...................................... 69,800 3,900,075
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
45
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
MEDICAL EQUIPMENT (Continued)
Waters Corp. (a)....................................... 62,500 $ 1,140,625
------------
8,779,300
------------
PUBLISHING (0.9%)
News Corp. Ltd. ADR (b)................................ 104,300 2,229,412
------------
RESTAURANTS &
LODGING (3.4%)
HFS Inc. (a)........................................... 81,000 6,621,750
Lone Star Steakhouse &
Saloon, Inc. (a)...................................... 45,000 1,726,875
------------
8,348,625
------------
RETAIL (8.6%)
Bed Bath & Beyond, Inc. (a)............................ 35,000 1,358,438
Cato Corp. Class A..................................... 36,400 282,100
Circuit City Stores, Inc. ............................. 61,100 1,687,887
Gymboree Corp. (a)..................................... 50,000 1,031,250
Home Depot, Inc. (The)................................. 61,600 2,949,100
Kohl's Corp. (a)....................................... 50,500 2,651,250
Kroger Co. (The) (a)................................... 104,000 3,900,000
Lowe's Companies, Inc.................................. 96,400 3,229,400
Office Depot, Inc. (a)................................. 95,975 1,895,506
Sunglass Hut International, Inc. (a) 82,000 1,947,500
------------
20,932,431
------------
SOFTWARE (5.6%)
Computer Associates
International, Inc.................................... 100,450 5,713,094
Microsoft Corp. (a).................................... 13,200 1,158,300
Oracle Corp. (a)....................................... 79,500 3,368,812
Sterling Software, Inc. (a)............................ 57,000 3,555,375
------------
13,795,581
------------
TECHNOLOGY (9.6%)
General Motors Corp. Class E........................... 47,000 2,444,000
Intel Corp............................................. 69,000 3,915,750
Lam Research Corp. (a)................................. 67,000 3,065,250
Linear Technology Corp. ............................... 48,000 1,884,000
Micron Technology Inc.................................. 86,000 3,407,750
Motorola, Inc.......................................... 35,500 2,023,500
3Com Corp. (a)......................................... 146,400 6,825,900
------------
23,566,150
------------
TELECOMMUNICATION
EQUIPMENT (0.4%)
General Instrument Corp. (a)........................... 31,500 736,313
Scientific-Atlanta, Inc................................ 22,900 343,500
------------
1,079,813
------------
TELECOMMUNICATION
SERVICES (2.1%)
Tele-Communications International, Inc. Class A (a).... 60,000 1,365,000
WorldCom, Inc. (a)..................................... 107,894 3,803,263
------------
5,168,263
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
TEXTILE & APPAREL (3.0%)
Nine West Group Inc. (a).......................... 80,000 $ 3,000,000
Warnaco Group, Inc. (The) Class A 97,600 2,440,000
Wolverine World Wide, Inc......................... 57,000 1,795,500
------------
7,235,500
------------
Total Common Stocks
(Cost $167,003,537).............................. 223,772,942
------------
PREFERRED STOCK (0.2%)
PUBLISHING (0.2%)
News Corp. Ltd. ADR--
Preference Shares (b)............................ 28,500 548,625
------------
Total Preferred Stock
(Cost $455,577).................................. 548,625
------------
SHORT-TERM
INVESTMENTS (7.8%)
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
COMMERCIAL PAPER (7.8%)
American General Finance Corp.
5.96%, due 1/3/96................................ $ 4,131,000 4,131,000
General Electric Capital Corp.
5.71%, due 1/4/96................................ 8,343,000 8,343,000
Prudential Funding Corp.
5.93%, due 1/2/96................................ 6,552,000 6,552,000
------------
Total Short-Term Investments
(Cost $19,026,000)............................... 19,026,000
------------
Total Investments
(Cost $186,485,114) (c).......................... 99.5% 243,347,567 (d)
Cash and Other Assets,
Less Liabilities................................. 0.5 1,188,251
----------- ------------
Net Assets........................................ 100.0% $244,535,818
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) ADR--American Depository Receipt.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1995 net unrealized appreciation was $56,862,453, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $61,035,747 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $4,173,294.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
46
<PAGE>
NEW YORK LIFE MFA
SERIES FUND, INC.
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $186,485,114).................................. $243,347,567
Cash............................................................. 864
Receivables:
Fund shares sold................................................. 662,626
Investment securities sold....................................... 518,149
Dividends and interest........................................... 122,113
NYLIAC........................................................... 61,197
Other assets..................................................... 363
------------
Total assets................................................... 244,712,879
------------
LIABILITIES:
Payables:
Adviser.......................................................... 71,782
Recordkeeping.................................................... 46,390
Administrator.................................................... 19,939
Custodian........................................................ 4,405
Accrued expenses................................................. 34,545
------------
Total liabilities.............................................. 177,061
------------
Net assets applicable to
outstanding shares.............................................. $244,535,818
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 157,845
Additional paid-in capital....................................... 194,853,627
Accumulated net realized loss
on investments.................................................. (7,338,107)
Net unrealized appreciation
on investments.................................................. 56,862,453
------------
Net assets applicable to
outstanding shares.............................................. $244,535,818
============
Shares of capital stock outstanding.............................. 15,784,450
============
Net asset value per share outstanding............................ $ 15.49
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 947,338
Interest......................................................... 1,254,492
------------
Total income................................................... 2,201,830
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 609,035
Recordkeeping.................................................... 442,909
Administration (Note 3).......................................... 338,353
Shareholder communication........................................ 54,342
Auditing......................................................... 27,822
Custodian........................................................ 24,104
Directors........................................................ 11,659
Legal............................................................ 9,761
Amortization of organization expense............................. 1,535
Miscellaneous.................................................... 10,419
------------
Total expenses
before reimbursement.......................................... 1,529,939
Expense reimbursement from
Administrator (Note 3).......................................... (294,951)
------------
Net expenses................................................... 1,234,988
------------
Net investment income............................................ 966,842
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments................................. (4,093,457)
Net change in unrealized appreciation
on investments.................................................. 52,411,784
------------
Net realized and unrealized gain
on investments.................................................. 48,318,327
------------
Net increase in net assets resulting
from operations................................................. $ 49,285,169
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$5,215.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
47
<PAGE>
CAPITAL APPRECIATION PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995 and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 966,842 $ 493,813
Net realized loss on investments.................. (4,093,457) (2,957,251)
Net change in unrealized appreciation on invest-
ments............................................ 52,411,784 710,503
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. 49,285,169 (1,752,935)
------------ ------------
Dividends to shareholders:
From net investment income........................ (967,677) (493,282)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 92,210,559 73,263,025
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 967,677 493,282
------------ ------------
93,178,236 73,756,307
Cost of shares redeemed........................... (10,959,038) (995,909)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 82,219,198 72,760,398
------------ ------------
Net increase in net assets....................... 130,536,690 70,514,181
NET ASSETS:
Beginning of year................................. 113,999,128 43,484,947
------------ ------------
End of year....................................... $244,535,818 $113,999,128
============ ============
Accumulated undistributed net investment income... $ -- $ 835
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of
period........................... $ 11.45 $ 12.03 $ 10.00
------------ ------------ -------------
Net investment income............. 0.06 0.05 0.02
Net realized and unrealized gain
(loss) on investments............ 4.04 (0.58) 2.03
------------ ------------ -------------
Total from investment operations.. 4.10 (0.53) 2.05
------------ ------------ -------------
Less dividends:
From net investment income....... (0.06) (0.05) (0.02)
------------ ------------ -------------
Net asset value at end of period.. $ 15.49 $ 11.45 $ 12.03
============ ============ =============
Total investment return (b)....... 35.78% (4.38%) 20.54%
Ratios (to average net
assets)/Supplemental Data:
Net investment income............ 0.57% 0.63% 0.46%+
Net expenses..................... 0.73% 0.73% 0.73%+
Expenses (before reimbursement).. 0.90% 0.91% 1.15%+
Portfolio turnover rate........... 35% 39% 28%
Net assets at end of period (in
000's)........................... $ 244,536 $ 113,999 $ 43,485
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
48
<PAGE>
CASH MANAGEMENT PORTFOLIO NEW YORK LIFE MFA
PORTFOLIO OF INVESTMENTS SERIES FUND, INC.
December 31, 1995
SHORT-TERM
INVESTMENTS (100.0%)+
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
-------------------------
<S> <C> <C>
BANK NOTES (4.8%)
First Systems Bank-Fargo,
North Dakota
5.93%, due 6/3/96 (c)(d).............................. $ 2,500,000 $ 2,500,250
Fleet National Bank-Province, Rhode Island
5.88%, due 10/30/96 (c)(d)............................ 1,700,000 1,700,000
------------
4,200,250
------------
CERTIFICATES OF
DEPOSIT (10.8%)
Bayerische Vereinsbank AG
6.00%, due 7/24/96 (d)................................ 3,000,000 3,000,000
First National Bank of Maryland
5.90%, due 10/23/96 (c)(d)............................ 2,000,000 2,000,000
Industrial Bank of Japan Ltd. 5.86%, due 1/11/96 (d)... 1,000,000 999,896
Merchantile Safe Deposit &
Trust Co.
5.73%, due 12/23/96 (c)(d)............................ 500,000 500,248
Mitsubishi Bank
6.13%, due 1/4/96 (d)................................. 3,000,000 3,000,002
------------
9,500,146
------------
MEDIUM-TERM NOTES (8.6%)
AT&T Capital Corp.
6.99%, due 10/4/96 (d)................................ 1,000,000 1,008,433
First National Bank of Minneapolis
9.33%, due 2/26/96 (d)................................ 1,000,000 1,005,094
First Security Bank of Idaho
6.88%, due 10/4/96 (d)................................ 2,000,000 2,017,500
General Electric Capital Corp.
5.71%, due 6/6/96 (c)(d).............................. 1,000,000 1,000,000
International Lease Finance Corp.
6.80%, due 9/30/96 (d)................................ 1,000,000 1,006,955
Kingdom of Spain
9.35%, due 5/27/96 (d)................................ 1,000,000 1,013,140
Norwest Corp.
4.86%, due 6/28/96 (d)................................ 500,000 497,595
------------
7,548,717
------------
COMMERCIAL PAPER (75.8%)
ABN-AMRO North America Finance Inc.
5.68%, due 2/16/96.................................... 500,000 496,371
Banca CRT Financial Corp.
5.67%, due 3/1/96..................................... 1,800,000 1,782,990
5.69%, due 2/26/96.................................... 800,000 792,919
5.73%, due 1/26/96.................................... 1,000,000 996,021
Banco Real S.A., Grand Cayman
5.63%, due 4/12/96.................................... 1,000,000 984,062
Bancomer S.A.
5.37%, due 9/13/96.................................... 1,000,000 961,813
5.42%, due 7/11/96.................................... 1,000,000 971,093
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
-------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Bank of Scotland
5.32%, due 6/11/96................................... $ 1,000,000 $ 976,060
Barton Capital Corp.
5.95%, due 1/9/96 (b)................................ 3,000,000 2,996,033
6.00%, due 1/9/96 (b)................................ 800,000 798,933
Caisse Centrale des
Banques Populaires
5.61%, due 3/18/96................................... 2,000,000 1,976,002
5.75%, due 1/8/96.................................... 2,000,000 1,997,764
Cargill Inc.
5.75%, due 1/8/96.................................... 1,100,000 1,098,770
Coles Myer Finance Ltd.
5.68%, due 2/6/96.................................... 1,200,000 1,193,184
5.71%, due 2/6/96.................................... 2,000,000 1,988,580
5.74%, due 2/2/96.................................... 1,000,000 994,898
Compagnie Bancaire
5.52%, due 4/11/96................................... 1,000,000 984,513
5.62%, due 1/10/96................................... 500,000 499,298
5.85%, due 1/11/96................................... 1,800,000 1,797,075
Corporacion Andina de Fomento
5.65%, due 1/18/96................................... 1,000,000 997,332
COSCO (Cayman) Co. Ltd.
5.75%, due 2/9/96.................................... 1,450,000 1,440,968
Credito Italiano (DE) Inc.
5.66%, due 1/29/96................................... 1,000,000 995,598
Echlin Inc.
5.75%, due 1/29/96................................... 2,000,000 1,991,056
Idaho Power Co.
5.85%, due 1/9/96.................................... 2,000,000 1,997,400
Island Finance Puerto Rico Inc.
5.63%, due 2/29/96................................... 1,800,000 1,783,391
5.72%, due 1/22/96................................... 1,500,000 1,494,995
Kingdom of Sweden
5.65%, due 3/8/96.................................... 1,700,000 1,682,124
Morgan Stanley Group Inc.
5.70%, due 2/9/96.................................... 2,500,000 2,484,562
Nationwide Building Society
5.66%, due 3/14/96................................... 600,000 593,114
NICOR Inc.
5.63%, due 2/9/96.................................... 1,000,000 993,901
Pacificorp
5.70%, due 1/8/96.................................... 3,300,000 3,296,343
Pemex Capital Inc.
5.65%, due 1/23/96................................... 1,000,000 996,547
5.90%, due 1/17/96................................... 1,500,000 1,496,067
Petroleo Brasileiro S.A.-Petrobras
5.72%, due 1/3/96.................................... 500,000 499,841
5.74%, due 1/3/96.................................... 800,000 799,745
Petroleos de Venezuela S.A.
5.57%, due 3/8/96.................................... 1,000,000 989,634
Receivables Capital Corp.
5.75%, due 1/4/96 (b)................................ 2,000,000 1,999,042
5.75%, due 1/29/96 (b)............................... 1,800,000 1,791,950
Shinhan Bank
5.82%, due 2/12/96................................... 2,600,000 2,582,346
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
49
<PAGE>
CASH MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
SHORT-TERM
INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL AMORTIZED
AMOUNT COST
-----------------------------
<S> <C> <C>
COMMERCIAL PAPER (Continued)
Songs Fuel Co.
5.57%, due 3/15/96.............................. $ 1,207,000 $ 1,193,181
5.80%, due 1/31/96.............................. 3,000,000 2,985,500
Svenska Handelsbanken Inc.
5.60%, due 1/16/96.............................. 1,000,000 997,667
Transamerica Finance Corp.
5.60%, due 3/4/96............................... 4,000,000 3,960,800
Unibanco-Uniao de Bancos Brasilieros S.A., Grand
Cayman
5.66%, due 4/15/96.............................. 2,000,000 1,966,983
USL Capital Corp.
5.73%, due 1/26/96.............................. 300,000 298,806
------------
66,595,272
------------
Total Short-Term Investments
(Amortized Cost $87,844,385) (e) 100.0% 87,844,385
Liabilities in Excess of
Cash and Other Assets........................... (0.0)(a) (5,041)
----------- ------------
Net Assets....................................... 100.0% $ 87,839,344
=========== ============
</TABLE>
- --------
(a) Less than one tenth of a percent.
(b) May be sold to institutional investors only.
(c) Floating rate. Rate shown is the rate in effect at December 31, 1995.
(d) Coupon interest bearing security.
(e) The cost stated also represents the aggregate cost for Federal income tax
purposes.
The table below sets forth the
diversification of Cash Management
Portfolio investments by industry.
SHORT-TERM
INVESTMENTS
<TABLE>
<CAPTION>
AMORTIZED
COST PERCENT +
------------------------
<S> <C> <C>
Auto Parts............................................. $ 1,991,056 2.3%
Banks #................................................ 53,665,121 61.1
Brokerage.............................................. 2,484,562 2.8
Conglomerates.......................................... 1,000,000 1.1
Finance................................................ 13,434,855 15.3
Food................................................... 1,098,770 1.3
Foreign Government..................................... 2,695,264 3.1
Utilities.............................................. 9,472,423 10.8
Utilities-Gas.......................................... 993,901 1.1
Utilities-Telephone.................................... 1,008,433 1.1
----------- -----
87,844,385 100.0
Liabilities in Excess of
Cash and Other Assets................................. (5,041) (0.0)(a)
----------- -----
Net Assets............................................. $87,839,344 100.0%
=========== =====
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
# The Fund will invest more than 25% of the market value of its total assets
in the securities of banks and bank holding companies, including certifi-
cates of deposit, bankers' acceptances and securities guaranteed by banks
and bank holding companies.
(a) Less than one tenth of a percent.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
50
<PAGE>
NEW YORK LIFE MFA
SERIES FUND, INC.
CASH MANAGEMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (amortized cost
$87,844,385)................................................... $ 87,844,385
Receivables:
Interest........................................................ 369,768
Investment securities sold...................................... 199,090
NYLIAC.......................................................... 15,271
Other assets.................................................... 166
------------
Total assets.................................................. 88,428,680
------------
LIABILITIES:
Payables:
Custodian....................................................... 119,932
Recordkeeping................................................... 29,621
Adviser......................................................... 17,289
Administrator................................................... 6,915
Directors....................................................... 634
Accrued expenses................................................ 50,963
Dividend payable................................................ 363,982
------------
Total liabilities............................................. 589,336
------------
Net assets applicable to
outstanding shares............................................. $ 87,839,344
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
200 million shares authorized.................................. $ 878,410
Additional paid-in capital...................................... 86,962,267
Accumulated net realized loss
on investments................................................. (1,333)
------------
Net assets applicable to
outstanding shares............................................. $ 87,839,344
============
Shares of capital stock outstanding............................. 87,841,000
============
Net asset value per share outstanding........................... $ 1.00
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest......................................................... $ 4,065,628
------------
Expenses: (Note 2)
Recordkeeping (Note 3)........................................... 237,763
Advisory (Note 3)................................................ 167,656
Administration (Note 3).......................................... 134,125
Shareholder communication........................................ 44,802
Auditing......................................................... 20,689
Custodian........................................................ 9,381
Legal............................................................ 5,662
Directors........................................................ 5,332
Amortization of organization expense............................. 1,535
Miscellaneous.................................................... 5,437
------------
Total expenses
before reimbursement.......................................... 632,382
Expense reimbursement from
Administrator (Note 3).......................................... (216,593)
------------
Net expenses................................................... 415,789
------------
Net investment income............................................ 3,649,839
------------
REALIZED LOSS ON INVESTMENTS:
Net realized loss on investments................................. (949)
------------
Net increase in net assets resulting
from operations................................................. $ 3,648,890
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
51
<PAGE>
CASH MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 3,649,839 $ 2,310,893
Net realized loss on investments.................. (949) (342)
------------ ------------
Net increase in net assets resulting from opera-
tions............................................ 3,648,890 2,310,551
------------ ------------
Dividends to shareholders:
From net investment income........................ (3,649,839) (2,310,893)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 128,846,016 99,252,119
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 3,587,829 2,011,001
Net asset value of shares issued in connection
with acquisition of Money Market Portfolio....... -- 37,601,126
------------ ------------
132,433,845 138,864,246
Cost of shares redeemed........................... (115,709,733) (94,480,925)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 16,724,112 44,383,321
------------ ------------
Net increase in net assets....................... 16,723,163 44,382,979
NET ASSETS:
Beginning of year................................. 71,116,181 26,733,202
------------ ------------
End of year....................................... $ 87,839,344 $ 71,116,181
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1995 1994 1993
-----------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of pe-
riod.............................. $ 1.00 $ 1.00 $ 1.00
------------ ------------ ------------
Net investment income.............. 0.05 0.04 0.02
------------ ------------ ------------
Less dividends:
From net investment income........ (0.05) (0.04) (0.02)
------------ ------------ ------------
Net asset value at end of period... $ 1.00 $ 1.00 $ 1.00
============ ============ ============
Total investment return (b)........ 5.59% 3.82% 2.40%
Ratios (to average net
assets)/Supplemental Data:
Net investment income............. 5.44% 3.97% 2.65%+
Net expenses...................... 0.62% 0.62% 0.62%+
Expenses (before reimbursement)... 0.94% 0.89% 1.10%+
Net assets at end of period (in
000's)............................ $ 87,839 $ 71,116 $ 26,733
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
52
<PAGE>
GOVERNMENT PORTFOLIO NEW YORK LIFE MFA
PORTFOLIO OF INVESTMENTS SERIES FUND, INC.
December 31, 1995
LONG-TERM U.S. GOVERNMENT
& FEDERAL AGENCIES (98.4%)+
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
FEDERAL HOME LOAN MORTGAGE CORPORATION (MORTGAGE
PASS-THROUGH SECURITY) (2.3%)
6.00%, due 8/1/24................................... $ 1,525,099 $ 1,477,196
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION GOLD (MORTGAGE
PASS-THROUGH SECURITIES) (4.1%)
6.00%, due 2/20/26 TBA (b).......................... 1,725,000 1,668,938
7.00%, due 2/13/26 TBA (b).......................... 1,000,000 1,007,500
------------
2,676,438
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (1.8%)
8.50%, due 2/1/05................................... 1,075,000 1,176,136
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (COLLATERALIZED
MORTGAGE
OBLIGATIONS) (1.7%)
Series 1993-76 Class B
6.00%, due 6/25/08.................................. 522,941 494,995
Series 1993-89 Class D
7.00%, due 6/25/23.................................. 625,000 602,831
------------
1,097,826
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(MORTGAGE PASS- THROUGH SECURITY) (4.8%)
7.00%, due 2/15/11 TBA (b).......................... 3,050,000 3,102,887
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION
(MORTGAGE PASS-THROUGH SECURITIES) (9.9%)
5.50%, due 2/22/26, ARM
TBA (b)(c).......................................... 2,825,000 2,825,000
7.50%, due 2/20/26 TBA (b).......................... 1,225,000 1,258,308
8.00%, due 2/20/26 TBA (b).......................... 2,225,000 2,314,000
------------
6,397,308
------------
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
UNITED STATES TREASURY
BONDS (17.3%)
6.875%, due 8/15/25............................. $ 3,875,000 $ 4,370,264
7.625%, due 2/15/25............................. 5,050,000 6,175,191
11.25%, due 2/15/15............................. 425,000 680,331
------------
11,225,786
------------
UNITED STATES TREASURY
NOTES (56.5%)
4.75%, due 2/15/97 (a).......................... 4,250,000 4,224,755
5.625%, due 6/30/97............................. 2,350,000 2,364,688
5.625%, due 11/30/00............................ 1,175,000 1,185,645
6.375%, due 8/15/02............................. 3,450,000 3,617,636
7.75%, due 12/31/99............................. 5,375,000 5,832,735
7.875%, due 11/15/99............................ 3,600,000 3,913,884
7.875%, due 11/15/04............................ 2,325,000 2,691,187
8.125%, due 2/15/98............................. 3,125,000 3,304,687
8.75%, due 10/15/97............................. 3,000,000 3,179,520
9.00%, due 5/15/98.............................. 5,825,000 6,307,368
------------
36,622,105
------------
Total Long-Term U.S. Government & Federal
Agencies
(Cost $62,271,015).............................. 63,775,682
------------
SHORT-TERM
U.S. GOVERNMENT (18.8%)
UNITED STATES TREASURY NOTES (18.8%)
4.625%, due 2/15/96 (a)......................... 9,325,000 9,319,125
9.25%, due 1/15/96 (a).......................... 2,875,000 2,879,054
------------
Total Short-Term
U.S. Government
(Cost $12,201,455).............................. 12,198,179
------------
Total Investments
(Cost $74,472,470) (d).......................... 117.2% 75,973,861 (e)
Liabilities in Excess of
Cash and Other Assets........................... (17.2) (11,161,483)
----------- ------------
Net Assets....................................... 100.0% $ 64,812,378
=========== ============
</TABLE>
- --------
(a) Segregated or partially segregated as collateral for TBA.
(b) TBA: Securities purchased on a forward commitment basis with an approxi-
mate principal amount and maturity date. The actual principal amount and
maturity date will be determined upon settlement.
(c) ARM--Adjustable Rate Mortgage. Resets annually.
(d) The cost for Federal income tax purposes is $74,671,788.
(e) At December 31, 1995 net unrealized appreciation was $1,302,073, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $1,305,349 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $3,276.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
53
<PAGE>
GOVERNMENT PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $74,472,470)................................... $ 75,973,861
Cash............................................................. 150
Receivables:
Interest......................................................... 1,322,981
Fund shares sold................................................. 230,109
Investment securities sold....................................... 15,359
Other assets..................................................... 145
------------
Total assets................................................... 77,542,605
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 12,654,858
Adviser.......................................................... 16,024
NYLIAC........................................................... 11,296
Recordkeeping.................................................... 10,419
Administrator.................................................... 5,341
Custodian........................................................ 3,418
Directors........................................................ 634
Accrued expenses................................................. 28,237
------------
Total liabilities.............................................. 12,730,227
------------
Net assets applicable to
outstanding shares.............................................. $ 64,812,378
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 64,767
Additional paid-in capital....................................... 66,706,318
Accumulated net realized loss
on investments.................................................. (3,460,098)
Net unrealized appreciation
on investments.................................................. 1,501,391
------------
Net assets applicable to
outstanding shares.............................................. $ 64,812,378
============
Shares of capital stock outstanding.............................. 6,476,696
============
Net asset value per share outstanding............................ $ 10.01
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest......................................................... $ 4,907,647
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 173,920
Administration (Note 3).......................................... 115,947
Recordkeeping.................................................... 114,007
Shareholder communication........................................ 19,843
Auditing......................................................... 19,100
Custodian........................................................ 16,976
Legal............................................................ 4,859
Directors........................................................ 4,781
Amortization of organization expense............................. 1,535
Portfolio pricing................................................ 1,463
Miscellaneous.................................................... 3,895
------------
Total expenses
before reimbursement.......................................... 476,326
Expense reimbursement from
Administrator (Note 3).......................................... (87,910)
------------
Net expenses................................................... 388,416
------------
Net investment income............................................ 4,519,231
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 1,575,754
Net change in unrealized depreciation
on investments.................................................. 2,860,304
------------
Net realized and unrealized gain
on investments.................................................. 4,436,058
------------
Net increase in net assets resulting
from operations................................................. $ 8,955,289
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
54
<PAGE>
GOVERNMENT PORTFOLIO NEW YORK LIFE MFA
STATEMENT OF CHANGES IN NET ASSETS SERIES FUND, INC.
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 4,519,231 $ 4,719,554
Net realized gain (loss) on investments........... 1,575,754 (4,781,332)
Net change in unrealized depreciation on invest-
ments............................................ 2,860,304 (938,174)
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. 8,955,289 (999,952)
------------ ------------
Dividends to shareholders:
From net investment income........................ (4,482,125) (4,619,677)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 12,152,261 23,924,993
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 4,482,125 4,619,677
------------ ------------
16,634,386 28,544,670
Cost of shares redeemed........................... (17,936,046) (8,049,708)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions...................... (1,301,660) 20,494,962
------------ ------------
Net increase in net assets....................... 3,171,504 14,875,333
NET ASSETS:
Beginning of year................................. 61,640,874 46,765,541
------------ ------------
End of year....................................... $ 64,812,378 $ 61,640,874
============ ============
Accumulated distribution in excess of net invest-
ment income...................................... $ -- $ (17,378)
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1995 1994 1993
------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of pe-
riod.............................. $ 9.21 $ 10.15 $ 10.00
------------ ------------ ------------
Net investment income.............. 0.75 0.75 0.82
Net realized and unrealized gain
(loss) on investments............. 0.80 (0.94) (0.25)
------------ ------------ ------------
Total from investment operations... 1.55 (0.19) 0.57
------------ ------------ ------------
Less dividends:
From net investment income........ (0.75) (0.75) (0.42)
------------ ------------ ------------
Net asset value at end of period... $ 10.01 $ 9.21 $ 10.15
============ ============ ============
Total investment return (b)........ 16.72% (1.84%) 5.63%
Ratios (to average net
assets)/Supplemental Data:
Net investment income............. 7.80% 8.16% 8.46%+
Net expenses...................... 0.67% 0.67% 0.67%+
Expenses (before reimbursement)... 0.82% 0.87% 1.02%+
Portfolio turnover rate............ 592% 483% 501%
Net assets at end of period (in
000's)............................ $ 64,812 $ 61,641 $ 46,766
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
55
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
LONG-TERM BONDS (47.4%)+
CONVERTIBLE BOND (1.3%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
RETAIL (1.3%)
Michaels Stores, Inc.
4.75%, due 1/15/03
6.75%, beginning 1/15/96............................. $ 730,000 $ 558,450
------------
Total Convertible Bond
(Cost $576,002)...................................... 558,450
------------
CORPORATE BONDS (39.3%)
ADVERTISING (0.6%)
Sullivan Graphics, Inc.
12.75%, due 8/1/05 (c)............................... 250,000 243,750
------------
AEROSPACE (1.9%)
Atlas Air, Inc.
12.25%, due 12/1/02.................................. 350,000 357,000
K&F Industries, Inc.
11.875%, due 12/1/03................................. 75,000 80,625
Sequa Corp.
9.625%, due 10/15/99................................. 400,000 396,000
------------
833,625
------------
BUILDING MATERIALS (1.0%)
Associated Materials, Inc.
11.50%, due 8/15/03.................................. 350,000 276,500
Waxman Industries, Inc., Series B (zero coupon), due
6/1/04
12.75%, beginning 6/1/99............................. 500,000 185,000
------------
461,500
------------
BUILDINGS (1.5%)
NVR, Inc.
11.00%, due 4/15/03.................................. 500,000 503,125
Peters (JM) Co.
12.75%, due 5/1/02................................... 150,000 136,500
------------
639,625
------------
CASINOS (7.3%)
Casino America, Inc.
11.50%, due 11/15/01................................. 400,000 370,000
El Comandante Capital Corp.
11.75%, due 12/15/03................................. 800,000 712,000
Hemmeter Enterprises, Inc.
12.00%, due 12/15/00 (d)(g).......................... 500,000 190,000
Hollywood Casino Corp.
12.75%, due 11/1/03.................................. 275,000 250,938
Horseshoe Gaming LLC, Series WW
12.75%, due 9/30/00 (c).............................. 850,000 845,750
President Riverboat Casinos, Inc.
13.00%, due 9/15/01.................................. 450,000 378,000
Resorts International Hotel Financing, Inc.
11.00%, due 9/15/03.................................. 400,000 378,000
Trump Taj Mahal Funding, Inc.
Series A
11.35%, due 11/15/99 (e)............................. 50,000 48,125
------------
3,172,813
------------
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
CELLULAR TELEPHONE (1.3%)
PriCellular Wireless Corp.
(zero coupon), due 10/1/03
12.25%, beginning 10/1/98............................ $ 650,000 $ 502,125
Series B
(zero coupon), due 11/15/01
14.00%, beginning 5/15/98............................ 50,000 44,000
------------
546,125
------------
CHILD CARE SERVICES (1.0%)
La Petite Holdings Corp.
9.625%, due 8/1/01................................... 500,000 443,750
------------
CONSUMER DURABLES (0.9%)
Selmer Co., Inc.
11.00%, due 5/15/05.................................. 400,000 394,000
------------
CONTAINERS (0.2%)
Gaylord Containers Corp.
(zero coupon), due 5/15/05
12.75%, beginning 5/15/96............................ 100,000 98,500
------------
DOMESTIC OIL & GAS (0.9%)
Petro PSC Properties L.P.
12.50%, due 6/1/02................................... 400,000 380,000
------------
FOOD, BEVERAGES & TOBACCO (4.0%)
All-American Bottling Corp.
13.00%, due 8/15/01.................................. 500,000 422,500
American Restaurant Group, Inc.
10.25%, due 9/30/00 (c).............................. 2,000,000 619,992
12.00%, due 9/15/98.................................. 200,000 156,000
Liggett Group, Inc.
Series B
11.50%, due 2/1/99................................... 500,000 415,000
SC International Services, Inc.
13.00%, due 10/1/05.................................. 100,000 107,000
------------
1,720,492
------------
INDUSTRIAL (3.0%)
Atlantis Plastics, Inc.
11.00%, due 2/15/03.................................. 400,000 348,000
Great Dane Holdings, Inc.
12.75%, due 8/1/01................................... 620,000 565,750
Newflo Corp., Series B
13.25%, due 11/15/02................................. 350,000 364,000
------------
1,277,750
------------
MACHINERY (0.7%)
Thermadyne Holdings Corp.
10.75%, due 11/1/03.................................. 290,000 290,725
------------
MEDIA (3.4%)
Garden State Newspapers, Inc.
12.00%, due 7/1/04................................... 300,000 301,500
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
56
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
CORPORATE BONDS (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
MEDIA (Continued)
General Media, Inc.
10.625%, due 12/31/00................................ $ 900,000 $ 675,000
United International Holdings, Inc.
(zero coupon), due 11/15/99.......................... 825,000 511,500
------------
1,488,000
------------
PAPER & FOREST
PRODUCTS (0.9%)
Crown Paper Co.
11.00%, due 9/1/05................................... 450,000 393,750
------------
POLLUTION & RELATED (0.4%)
ICF Kaiser International, Inc.
12.00%, due 12/31/03................................. 200,000 188,000
------------
REAL ESTATE (1.5%)
Olympia & York Maiden Lane Finance Corp.
7.332%, due 3/20/99 (c)(f)........................... 931,495 633,417
------------
RESTAURANTS &
LODGING (0.6%)
Family Restaurant, Inc.
9.75%, due 2/1/02.................................... 450,000 258,750
------------
RETAIL (3.0%)
Brylane L.P., Series B
10.00%, due 9/1/03................................... 400,000 354,000
Hechinger Co.
6.95%, due 10/15/03.................................. 500,000 330,000
Hills Stores Co.
10.25%, due 9/30/03.................................. 70,000 62,300
IHF Holdings, Inc.
Series B
(zero coupon), due 11/15/04
15.00%, beginning 11/15/99........................... 500,000 315,000
Waban, Inc.
11.00%, due 5/15/04.................................. 250,000 256,250
------------
1,317,550
------------
STEEL, ALUMINUM &
OTHER METALS (0.5%)
Algoma Steel, Inc.
12.375%, due 7/15/05................................. 250,000 225,000
------------
SUPERMARKET (0.7%)
Pueblo Xtra International, Inc.
9.50%, due 8/1/03.................................... 300,000 287,250
------------
TELECOMMUNICATION
EQUIPMENT (0.3%)
EchoStar Communications Corp. (zero coupon), due
6/1/04 12.875%, beginning 6/1/99..................... 50,000 33,750
PageMart Nationwide, Inc.
(zero coupon), due 2/1/05
15.00%, beginning 2/1/00............................. 150,000 97,500
------------
131,250
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
TELECOMMUNICATION SERVICES (1.5%)
Centennial Cellular Corp.
8.875%, due 11/1/01.................................. $ 500,000 $ 492,500
Nextel Communications, Inc.
(zero coupon), due 8/15/04
9.75%, beginning 2/15/99............................. 300,000 162,750
------------
655,250
------------
TEXTILE & APPAREL (2.2%)
CMI Industries, Inc.
9.50%, due 10/1/03................................... 500,000 405,000
Hosiery Corp. of America, Inc.
14.25%, due 8/1/02................................... 500,000 542,500
------------
947,500
------------
Total Corporate Bonds
(Cost $16,751,333)................................... 17,028,372
------------
YANKEE BONDS (6.8%)
CABLE (1.5%)
Australis Media Ltd.
(zero coupon), due 5/15/03
14.00%, beginning 5/15/00 (h2) 200 144,500
Fundy Cable Ltd.
11.00%, due 11/15/05................................. 500,000 522,500
------------
667,000
------------
CELLULAR TELEPHONE (0.4%)
Comunicacion Celular S.A.
(zero coupon), due 11/15/03
13.125%, beginning 11/15/00 (c)(h3) 300 170,250
------------
FINANCIAL (2.1%)
Hollinger, Inc.
(zero coupon), due 10/5/13........................... 3,000,000 907,500
------------
REAL ESTATE (1.9%)
Trizec Finance Ltd.
10.875%, due 10/15/05................................ 800,000 820,000
------------
TELECOMMUNICATION SERVICES (0.9%)
Clearnet Communications, Inc.
(zero coupon), due 12/15/05
14.75%, beginning 12/15/00 (h1) 75 390,000
------------
Total Yankee Bonds
(Cost $2,875,283).................................... 2,954,750
------------
Total Long-Term Bonds
(Cost $20,202,618)................................... 20,541,572
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
57
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (6.9%)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
BUILDINGS (0.9%)
NVR, Inc. (a).......................................... 40,000 $ 400,000
------------
GAS UTILITY (0.4%)
UGI Corp............................................... 8,400 174,300
------------
INSURANCE (0.5%)
Aetna Life & Casualty Co............................... 2,800 193,900
------------
MEDIA (0.7%)
United International Holdings, Inc.
Class A (a)........................................... 21,700 320,075
------------
PAPER & FOREST
PRODUCTS (1.1%)
Champion International Corp............................ 11,700 491,400
------------
RECREATION &
ENTERTAINMENT (1.0%)
Royal Caribbean Cruises Ltd............................ 20,000 440,000
------------
TELECOMMUNICATION SERVICES (2.3%)
Airtouch Communications, Inc. (a) 18,700 528,275
Rogers Communications, Inc.
Class B (a)........................................... 40,000 450,715
------------
978,990
------------
TEXTILE & APPAREL (0.0%) (b)
Hosiery Corp. of America, Inc. (a) 500 2,500
------------
Total Common Stocks
(Cost $2,856,745)..................................... 3,001,165
------------
PREFERRED STOCKS (3.4%)
CABLE (3.2%)
Cablevision Systems Corp.
8.50%, Series I....................................... 40,000 1,090,000
11.75%, Series G (g).................................. 3,000 312,000
------------
1,402,000
------------
DOMESTIC OILS (0.2%)
Parker & Parsley Capital LLC
6.25% (c)............................................. 1,800 84,600
------------
Total Preferred Stocks
(Cost $1,377,625)..................................... 1,486,600
------------
WARRANTS (0.4%)
CASINOS (0.1%)
Horseshoe Gaming LLC
expire 4/10/96 (a).................................... 425,000 21,250
------------
DOMESTIC OIL & GAS (0.3%)
Petro PSC Properties L.P.
expire 6/1/97 (a)..................................... 400 13,600
TransAmerican Refining Corp. expire 2/15/08 (a)........ 50,000 112,500
------------
126,100
------------
FOOD, BEVERAGES &
TOBACCO (0.0%) (b)
American Restaurant Group, Inc.
expire 7/31/06 (a)(c)................................. 960 7
Browne Bottling Co.
expire 8/15/03 (a).................................... 237 5,925
------------
5,932
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
--------------------------
<S> <C> <C>
MEDIA (0.0%) (b)
General Media, Inc.
expire 12/31/96 (a).............................. 200 $ 2,000
------------
Total Warrants
(Cost $188,854).................................. 155,282
------------
PURCHASED PUT OPTION (0.0%) (b)
<CAPTION>
NOTIONAL
AMOUNT
-------------
<S> <C> <C>
FOOD, BEVERAGES & TOBACCO (0.0%) (b)
Underlying Security
RJR Nabisco, Inc.
8.75%, due 8/15/05
expire 8/26/96 (i)............................... $ 500,000 10,500
------------
Total Purchased Put Option
(Cost $10,000)................................... 10,500
------------
SHORT-TERM
INVESTMENTS (40.8%)
<CAPTION>
PRINCIPAL
AMOUNT
-------------
<S> <C> <C>
U.S. GOVERNMENT (40.8%)
United States Treasury Notes
8.875%, due 2/15/96.............................. $ 5,000,000 5,021,100
9.25%, due 1/15/96............................... 12,625,000 12,642,801
------------
Total Short-Term Investments
(Cost $17,702,345)............................... 17,663,901
------------
Total Investments
(Cost $42,338,187) (j)........................... 98.9% 42,859,020 (k)
Cash and Other Assets,
Less Liabilities................................. 1.1 455,451
----------- ------------
Net Assets........................................ 100.0% $ 43,314,471
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) May be sold to institutional investors only.
(d) Security in default and issuer in bankruptcy.
(e) CIK ("Cash in Kind") interest payment is made with cash or additional
securities.
(f) Floating rate. Rate shown is the rate in effect at December 31, 1995.
(g) PIK ("Payment in Kind") interest payment is made with additional
securities.
(h1) 75 Units--each unit reflects ten $1,000 principal amount of Senior
Discounted Notes, plus 33 warrants to acquire common stock at a future
date.
(h2) 200 Units--each unit reflects $1,000 Senior Subordinate Discounted Notes,
plus 1 warrant to acquire 58 shares of common stock at a future date.
(h3) 300 Units--each unit reflects $1,000 Deferred Senior Coupon Bonds, plus 1
warrant to acquire 12,860 shares of common stock at a future date.
(i) Purchased put option is based on spread between the risk/duration of RJR
Nabisco, Inc., 8.75%, due 8/15/05, multiplied by the yield on the RJR
Nabisco bond less the yield on the U.S. Treasury Notes, 6.50% due 8/15/05,
less 3% multiplied by the notional principal.
(j) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(k) At December 31, 1995 net unrealized appreciation was $520,833, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $822,467 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $301,634.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
58
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $42,338,187).................................. $ 42,859,020
Cash............................................................ 10,951
Receivables:
Dividends and interest.......................................... 1,244,771
Fund shares sold................................................ 495,052
NYLIAC.......................................................... 21,247
Investment securities sold...................................... 16,875
Unamortized organization expense
(Note 2)....................................................... 63,634
Other assets.................................................... 392
------------
Total assets.................................................. 44,711,942
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 1,285,789
Organization.................................................... 72,839
Recordkeeping................................................... 10,422
Adviser......................................................... 9,921
Custodian....................................................... 4,944
Administrator................................................... 3,307
Accrued expenses................................................ 10,249
------------
Total liabilities............................................. 1,397,471
------------
Net assets applicable to
outstanding shares............................................. $ 43,314,471
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized.................................. $ 41,052
Additional paid-in capital...................................... 42,842,112
Accumulated distribution in excess of net realized gain on
investments.................................................... (89,526)
Net unrealized appreciation
on investments................................................. 520,833
------------
Net assets applicable to
outstanding shares............................................. $ 43,314,471
============
Shares of capital stock outstanding............................. 4,105,235
============
Net asset value per share outstanding........................... $ 10.55
============
</TABLE>
STATEMENT OF OPERATIONS
For the period May 1, 1995
(Commencement of Operations) through
December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends........................................................ $ 16,519
Interest......................................................... 1,584,395
------------
Total income................................................... 1,600,914
------------
Expenses: (Note 2)
Recordkeeping.................................................... 69,460
Advisory (Note 3)................................................ 44,924
Administration (Note 3).......................................... 29,949
Auditing......................................................... 11,515
Amortization of organization expense............................. 9,866
Shareholder communication........................................ 8,267
Custodian........................................................ 7,480
Directors........................................................ 613
Legal............................................................ 345
Miscellaneous.................................................... 4,016
------------
Total expenses
before reimbursement.......................................... 186,435
Expense reimbursement from
Administrator (Note 3).......................................... (86,106)
------------
Net expenses................................................... 100,329
------------
Net investment income............................................ 1,500,585
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 172,097
Net unrealized appreciation
on investments.................................................. 520,833
------------
Net realized and unrealized gain
on investments.................................................. 692,930
------------
Net increase in net assets resulting
from operations................................................. $ 2,193,515
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
59
<PAGE>
HIGH YIELD CORPORATE BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1995
------------
<S> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................................... $ 1,500,585
Net realized gain on investments................................ 172,097
Net unrealized appreciation on investments...................... 520,833
------------
Net increase in net assets resulting from operations............ 2,193,515
------------
Dividends and distributions to shareholders:
From net investment income...................................... (1,500,585)
From net realized gain on investments........................... (172,097)
In excess of net realized gain on investments................... (89,526)
------------
Total dividends and distributions to shareholders.............. (1,762,208)
------------
Capital share transactions:
Net proceeds from sale of shares................................ 31,553,312
Net asset value of shares issued to shareholders in reinvestment
of dividends and distributions................................. 1,762,208
------------
33,315,520
Cost of shares redeemed......................................... (432,356)
------------
Increase in net assets derived from capital share transactions. 32,883,164
------------
Net increase in net assets..................................... 33,314,471
NET ASSETS:
Beginning of period............................................. 10,000,000
------------
End of period................................................... $ 43,314,471
============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1
1995 (a)
THROUGH
DECEMBER 31,
1995
-------------
<S> <C>
Net asset value at beginning of period........................... $ 10.00
------------
Net investment income............................................ 0.37
Net realized and unrealized gain on investments.................. 0.61
------------
Total from investment operations................................. 0.98
------------
Less dividends and distributions:
From net investment income...................................... (0.37)
From net realized gain on investments........................... (0.04)
In excess of net realized gain on investments................... (0.02)
------------
Total dividends and distributions................................ (0.43)
------------
Net asset value at end of period................................. $ 10.55
============
Total investment return (b)...................................... 10.06%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................... 10.02%+
Net expenses.................................................... 0.67%+
Expenses (before reimbursement)................................. 1.25%+
Portfolio turnover rate.......................................... 95%
Net assets at end of period (in 000's)........................... $ 43,314
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
60
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO NEW YORK LIFE
PORTFOLIO OF INVESTMENTS MFA SERIES FUND, INC.
December 31, 1995
COMMON STOCKS (90.9%)+
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
AUSTRALIA (2.7%)
Amcor, Ltd.
(forest products & paper)............................ 3,500 $ 24,734
Boral, Ltd.
(building materials &
components).......................................... 3,000 7,587
Brambles Industries, Ltd.
(business & public services)......................... 1,600 17,853
Broken Hill Proprietary Co., Ltd.
(energy sources)..................................... 6,400 90,454
Coles Myer, Ltd.
(merchandising)...................................... 6,770 21,101
CRA, Ltd.
(metals-nonferrous).................................. 3,225 47,356
CSR, Ltd.
(multi-industry)..................................... 5,500 17,920
Foster's Brewing Group, Ltd.
(beverages & tobacco)................................ 5,520 9,074
M.I.M. Holdings, Ltd.
(metals-nonferrous).................................. 4,061 5,619
National Australian Bank, Ltd.
(banking)............................................ 5,900 53,105
News Corp., Ltd.
(broadcasting & publishing).......................... 5,913 31,581
Pacific Dunlop, Ltd.
(multi-industry)..................................... 3,600 8,435
Santos, Ltd.
(energy sources)..................................... 2,400 7,016
Westpac Banking Corp., Ltd.
(banking)............................................ 5,600 24,827
WMC, Ltd.
(metals-nonferrous).................................. 4,500 28,922
------------
395,584
------------
AUSTRIA (2.7%)
Austrian Airlines Oesterreichische Luftverkehrs AG
(transportation-airlines) (a)........................ 50 8,317
Bank Austria AG
(banking)............................................ 1,200 96,998
Creditanstalt-Bankverein Stamm
(banking)............................................ 950 52,734
EA-Generali AG
(insurance).......................................... 200 59,978
Oesterreichische
Brau-Beteiligungs AG
(beverages & tobacco)................................ 200 9,116
OMV AG
(energy sources)..................................... 650 56,478
Verbundgesellschaft-Oesterreichische
Elektrizitatswirtschafts AG Class A
(utilities-electrical & gas)......................... 800 48,142
Wienerberger Baustoffindustrie AG
(building materials & components).................... 300 59,581
------------
391,344
------------
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
BELGIUM (3.4%)
Bekaert, SA
(industrial components).............................. 20 $ 16,480
Cimenteries CBR Cementbedrijven
(building materials & components).................... 30 12,105
Delhaize-Le Lion, SA
(merchandising)...................................... 280 11,608
Electrabel, SA
(utilities-electrical & gas)......................... 440 104,658
Fortis AG
(insurance).......................................... 530 64,474
Fortis AG-VVPR
(insurance).......................................... 7 853
Generale de Banque, SA
(banking)............................................ 220 77,933
Groupe Bruxelles Lambert, SA
(multi-industry)..................................... 180 24,986
NV Union Miniere, SA
(metals-nonferrous)(a)............................... 170 11,380
Petrofina, SA
(energy sources)..................................... 250 76,540
Reunies Electrobel & Tractebel, SA
(multi-industry)..................................... 180 74,314
Solvay, SA Class A
(chemicals).......................................... 50 27,014
------------
502,345
------------
DENMARK (2.1%)
Carlsberg AS Class A
(beverages & tobacco)................................ 300 16,782
Carlsberg AS Class B
(beverages & tobacco)................................ 200 11,188
Dampskibsselskabet AF 1912 AS
Class B
(transportation-shipping)............................ 2 38,255
Dampskibsselskabet Svendborg AS
Class B
(transportation-shipping)............................ 1 27,608
Danisco AS
(food & household products).......................... 600 29,016
Den Danske Bank
(banking)............................................ 450 31,100
FLS Industries AS Class B
(machinery & engineering)............................ 100 7,759
Novo Nordisk AS Class B
(health & personal care)............................. 300 41,142
Sophus Berendsen AS Class B
(multi-industry)..................................... 250 28,195
Tele Danmark AS Class B
(telecommunications)................................. 1,000 54,675
Unidanmark AS Class A
(banking)............................................ 450 22,330
------------
308,050
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
61
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
FRANCE (10.2%)
Alcatel Alsthom
(electrical & electronics)............................ 653 $ 56,375
AXA Groupe
(insurance)........................................... 1,280 86,374
Carrefour Supermarche
(merchandising)....................................... 160 97,203
Compagnie de Saint Gobain
(misc.-materials & commodities) 675 74,810
Compagnie de Suez, SA
(banking)............................................. 937 38,703
Compagnie Financiere de Paribas, SA Class A
(banking)............................................. 582 31,954
Compagnie Francaise de Petroleum Total, SA Class B
(energy sources)...................................... 1,304 88,126
Compagnie Generale des Eaux
(business & public services).......................... 617 61,683
Elf Aquitaine
(energy sources)...................................... 1,092 80,565
Eridania Beghin-Say, SA
(food & household products)........................... 180 30,918
Groupe Danone
(food & household products)........................... 720 118,960
Havas
(business & public services).......................... 444 35,272
LaFarge Coppee
(building materials & components)..................... 839 54,128
L'Air Liquide
(chemicals)........................................... 854 141,624
L'Oreal
(health & personal care).............................. 510 136,719
LVMH-Moet Hennessy
Louis Vuitton
(beverages & tobacco)................................. 520 108,458
Lyonnaise des Eaux, SA
(multi-industry)...................................... 193 18,608
Michelin (CGDE) Class B
(tire & rubber)....................................... 320 12,779
Pernod-Ricard
(beverages & tobacco)................................. 430 24,470
Pinault-Printemps, SA
(building materials & components)..................... 110 21,976
PSA Peugeot Citroen, SA
(automobiles)......................................... 150 19,814
Rhone-Poulenc Class A
(chemicals)........................................... 1,439 30,867
Societe Generale
(banking)............................................. 808 99,960
Spie Batignolles, SA
(machinery & engineering) (a)......................... 400 13,692
Thomson CSF, SA
(aerospace & military technology) 506 11,288
------------
1,495,326
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
GERMANY (3.4%)
Allianz AG Holding
(insurance).......................................... 50 $ 97,675
BASF AG
(chemicals).......................................... 100 22,323
Bayer AG
(chemicals).......................................... 100 26,445
Daimler Benz
Aktiengesellschaft AG
(automobiles)........................................ 100 50,445
Deutsche Bank AG
(banking)............................................ 1,050 49,864
Dresdner Bank AG
(banking)............................................ 950 25,421
Karstadt AG
(merchandising)...................................... 50 20,436
Linde AG
(machinery & engineering)............................ 50 29,240
Mannesmann AG
(machinery & engineering)............................ 50 15,954
Preussag AG
(multi-industry)..................................... 50 14,008
RWE AG
(utilities-electrical & gas)......................... 50 18,166
Siemens AG
(electrical & electronics)........................... 100 54,846
Thyssen AG
(metals-steel) (a)................................... 50 9,104
VEBA AG
(utilities-electrical & gas)......................... 850 36,167
Viag AG
(multi-industry)..................................... 50 20,087
Volkswagen AG
(automobiles)........................................ 50 16,754
------------
506,935
------------
HONG KONG (2.9%)
Cheung Kong (Holdings) Ltd.
(real estate)........................................ 11,000 67,008
China Light & Power Co. Ltd.
(utilities-electrical & gas)......................... 7,500 34,532
Hang Seng Bank Ltd.
(banking)............................................ 6,700 60,008
Hong Kong
Telecommunications Ltd.
(telecommunications)................................. 40,800 72,820
Hutchison Whampoa Ltd.
(multi-industry)..................................... 13,000 79,191
Sun Hung Kai Properties Ltd.
(real estate)........................................ 9,000 73,624
Swire Pacific Ltd. Class A
(multi-industry)..................................... 5,500 42,680
------------
429,863
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
62
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
ITALY (5.0%)
Assicurazioni Generali SPA
(insurance).......................................... 6,800 $ 164,720
Banca Commerciale Italiana SPA
(banking)............................................ 9,000 19,221
Benetton Group SPA
(textiles & apparel)................................. 1,000 11,901
Credito Italiano SPA
(banking)............................................ 12,000 13,986
Edison SPA
(energy sources)..................................... 4,000 17,237
Fiat SPA
(automobiles)........................................ 25,000 81,270
Fiat SPA di Risp
(automobiles)........................................ 6,000 10,603
Istituto Bancario San Paolo di Torina SPA
(banking)............................................ 9,000 53,298
Italgas SPA
(utilities-electrical & gas)......................... 5,000 15,214
Mediobanca SPA
(financial services)................................. 10,000 69,268
Montedison SPA
(multi-industry) (a)................................. 31,000 20,780
Olivetti Group
(data processing &
reproduction) (a).................................... 30,000 24,060
Parmalat Finanziaria SPA
(food & household products).......................... 9,000 7,813
Pirelli SPA
(industrial components).............................. 8,000 10,332
Riunione Adriatica di Sicurta SPA
(insurance).......................................... 2,000 22,737
Sirti SPA
(construction & housing)............................. 3,000 16,859
Telecom Italia di Risp
(telecommunications)................................. 8,000 9,788
Telecom Italia SPA
(telecommunications)................................. 47,000 73,137
Telecom Italia Mobile di Risp
(telecommunications) (a)............................. 6,000 6,312
Telecom Italia Mobile SPA
(telecommunications) (a)............................. 45,000 79,238
------------
727,774
------------
JAPAN (37.2%)
Ajinomoto Co., Inc.
(food & household products).......................... 3,000 33,444
Asahi Bank, Ltd.
(banking)............................................ 7,000 88,215
Asahi Chemical Industry Co., Ltd.
(chemicals).......................................... 10,000 76,583
Asahi Glass Co., Ltd.
(misc.-materials & components) 10,000 111,481
Bank of Tokyo
(banking)............................................ 7,000 122,823
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
JAPAN (Continued)
Bridgestone Corp.
(industrial components).............................. 3,000 $ 47,694
Canon, Inc.
(recreation & other
consumer goods)...................................... 3,000 54,383
Chiba Bank, Ltd.
(banking)............................................ 2,000 18,031
Dai-Ichi Kangyo Bank, Ltd.
(banking)............................................ 8,000 157,431
Dai Nippon Printing Co., Ltd.
(business & public services)......................... 4,000 67,858
Daiei, Inc.
(merchandising)...................................... 3,000 36,353
Fanuc Co., Ltd.
(electronic components & instruments)................ 1,000 43,332
Fuji Bank, Ltd.
(banking)............................................ 7,000 154,716
Fuji Photo Film Co., Ltd.
(recreation & other
consumer goods)...................................... 2,000 57,776
Fujitsu, Ltd.
(data processing & reproduction)..................... 8,000 89,185
Furukawa Electric Co., Ltd.
(industrial components).............................. 15,000 73,432
Hankyu Corp.
(transportation-road & rail) (a)..................... 3,000 16,431
Hitachi, Ltd.
(electrical & electronics)........................... 10,000 100,818
Honda Motor Co., Ltd.
(automobiles)........................................ 2,000 41,296
Industrial Bank of Japan, Ltd.
(banking)............................................ 6,000 182,053
Ito-Yokado Co., Ltd.
(merchandising)...................................... 2,000 123,308
Itochu Corp.
(wholesale &
international trade)................................. 30,000 202,120
Japan Air Lines Co., Ltd.
(transportation-airlines) (a)........................ 9,000 59,764
Japan Energy Corp.
(energy sources)..................................... 28,000 93,915
Joyo Bank, Ltd.
(banking)............................................ 3,000 24,138
Kajima Corp.
(construction & housing)............................. 2,000 19,776
Kansai Electric Power Co., Inc.
(utilities-electrical & gas)......................... 3,000 72,705
Kao Corp.
(food & household products).......................... 3,000 37,225
Kawasaki Steel Corp.
(metals-steel)....................................... 6,000 20,939
Kinki Nippon Railway Co., Ltd.
(transportation-road & rail)......................... 7,000 52,929
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
63
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
JAPAN (Continued)
Kirin Brewery Co., Ltd.
(beverages & tobacco)................................ 6,000 $ 70,960
Komatsu, Ltd.
(machinery & engineering)............................ 3,000 24,720
Kubota Corp.
(machinery & engineering)............................ 5,000 32,233
Marubeni Corp.
(wholesale &
international trade)................................. 5,000 27,095
Matsushita Electric Industrial
Co., Ltd.
(appliances &
household durables).................................. 8,000 130,287
Mitsubishi Chemical Corp. (chemicals)................. 10,000 48,664
Mitsubishi Corp.
(multi-industry)..................................... 5,000 61,557
Mitsubishi Estate Co., Ltd. (construction & housing).. 3,000 37,516
Mitsubishi Heavy Industries, Ltd. (machinery &
engineering)......................................... 15,000 119,672
Mitsubishi Trust & Banking Corp. (financial services). 4,000 66,695
Mitsui Engineering & Shipbuilding Co., Ltd.
(machinery & engineering) (a)........................ 21,000 58,426
Mitsui Fudosan Co., Ltd. (construction & housing)..... 2,000 24,623
Mitsui Trust & Banking Co., Ltd. (financial services). 3,000 32,863
Mitsukoshi, Ltd.
(merchandising)...................................... 3,000 28,210
NEC Corp.
(electrical & electronics)........................... 7,000 85,501
New Oji Paper Co., Ltd.
(forest products & paper)............................ 2,000 18,108
Nippon Express Co., Ltd. (transportation-road & rail). 3,000 28,908
Nippon Paper Industries Co.
(forest products & paper)............................ 6,000 41,704
Nippon Steel Corp.
(metals-steel)....................................... 11,000 37,748
Nippon Yusen Kabushiki Kaish (transportation-
shipping)............................................ 5,000 29,034
Nippondenso Co., Ltd.
(industrial components).............................. 2,000 37,419
Nissan Motor Co., Ltd.
(automobiles)........................................ 5,000 38,437
NKK Corp.
(metals-steel) (a)................................... 10,000 26,949
Nomura Securities Co., Ltd.
(financial services)................................. 4,000 87,246
Obayashi Corp.
(construction & housing)............................. 5,000 39,745
Osaka Gas Co., Ltd.
(utilities-electrical & gas)......................... 6,000 20,765
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
JAPAN (Continued)
Sakura Bank, Ltd.
(banking)............................................ 9,000 $ 114,292
Sankyo Co., Ltd.
(health & personal care)............................. 1,000 22,490
Sanyo Electric Co., Ltd.
(appliances &
household durables).................................. 6,000 34,608
Sekisui Chemical Co.
(building materials & components).................... 2,000 29,470
Sekisui House, Ltd.
(construction & housing)............................. 2,000 25,592
Seven-Eleven of Japan Co., Ltd.
(merchandising)...................................... 1,000 70,572
Shimizu Corp.
(construction & housing)............................. 4,000 40,715
Sony Corp.
(appliances &
household durables).................................. 1,000 60,006
Sumitomo Bank, Ltd.
(banking)............................................ 8,000 169,839
Sumitomo Chemical Co., Ltd. (chemicals)............... 6,000 29,955
Sumitomo Corp.
(wholesale & international trade).................... 3,000 30,536
Sumitomo Electric Industries, Ltd. (industrial
components).......................................... 2,000 24,041
Sumitomo Marine & Fire Insurance Co., Ltd.
(insurance).......................................... 2,000 16,441
Sumitomo Metal Industries, Ltd. (metals-steel)........ 8,000 24,274
Sumitomo Metal Mining Co., Ltd. (metals-nonferrous)... 2,000 17,992
Taisei Corp.
(construction & housing)............................. 7,000 46,754
Taisho Pharmaceutical Co., Ltd. (health & personal
care)................................................ 1,000 19,776
Takeda Chemical Industries, Ltd. (health & personal
care)................................................ 6,000 98,879
Teijin, Ltd.
(chemicals).......................................... 15,000 76,776
Tobu Railway Co., Ltd. (transportation-road & rail)... 3,000 18,787
Tohoku Electric Power Co., Inc. (utilities-electrical
& gas)............................................... 1,010 24,379
Tokai Bank, Ltd.
(banking)............................................ 9,000 125,634
Tokio Marine & Fire Insurance Co., Ltd.
(insurance).......................................... 3,000 39,261
Tokyo Dome Corp.
(leisure & tourism).................................. 1,000 17,158
Tokyo Electric Power Co., Inc.
(utilities-electrical & gas)......................... 3,000 80,266
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
64
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
JAPAN (Continued)
Tokyo Gas Co., Ltd.
(utilities-electrical & gas)......................... 15,000 $ 52,929
Tokyu Corp
(transportation-road & rail)......................... 5,000 35,335
Toppan Printing Co., Ltd.
(business & public services)......................... 8,000 105,471
Tostem Corp.
(building materials & components).................... 1,000 33,250
Toto, Ltd.
(building materials & components).................... 1,000 13,959
Toyota Motor Corp. (automobiles)...................... 12,000 254,758
Yamaichi Securities Co., Ltd. (financial services).... 12,000 93,411
Yamanouchi Pharmaceutical
Co., Ltd.
(health & personal care)............................. 1,000 21,521
Yamazaki Baking Co., Ltd.
(food & household products).......................... 1,000 18,612
Yasuda Trust & Banking Co., Ltd.
(financial services)................................. 3,000 17,769
------------
5,440,747
------------
NETHERLANDS (2.0%)
Elsevier NV
(broadcasting & publishing).......................... 1,500 20,025
Internationale Nederlanden
Groep NV
(insurance).......................................... 500 33,438
Koninklijke PTT Nederland NV (forest products &
paper)............................................... 1,000 36,370
Philips Electronics NV
(appliances &
household durables).................................. 600 21,709
Royal Dutch Petroleum Co.
(energy sources)..................................... 900 125,877
Unilever NV
(food & household products).......................... 300 42,202
Wolters Kluwer CVA
(broadcasting & publishing).......................... 100 9,470
------------
289,091
------------
NEW ZEALAND (1.8%)
Brierley Investments Ltd.
(multi-industry)..................................... 35,900 28,398
Carter Holt Harvey Ltd.
(forest products & paper)............................ 26,400 56,955
Fletcher Challenge Ltd.
(forest products & paper)............................ 19,900 45,924
Lion Nathan Ltd.
(beverages & tobacco)................................ 9,300 22,192
Telecom Corp. of New Zealand Ltd.
(telecommunications)................................. 25,100 108,301
------------
261,770
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
NORWAY (2.6%)
Bergesen d.y. AS Class A (transportation-shipping).... 900 $ 17,949
Bergesen d.y. AS Class B (transportation-shipping).... 500 9,813
Dyno Industrier AS
(chemicals).......................................... 500 11,713
Hafslund Nycomed AS Class A
(health & personal care)............................. 1,000 26,196
Hafslund Nycomed AS Class B
(health & personal care)............................. 600 15,243
Kvaerner AS Class B
(machinery & engineering)............................ 400 13,422
Norsk Hydro AS
(energy sources)..................................... 4,700 197,884
Norske Skogindustrier AS Class A
(forest products & paper)............................ 1,300 38,273
Orkla Borregaard AS Class A
(multi-industry)..................................... 900 44,873
------------
375,366
------------
SINGAPORE (3.2%)
City Developments, Ltd.
(real estate)........................................ 6,000 43,692
DBS Land, Ltd.
(real estate)........................................ 10,000 33,794
Development Bank of Singapore, Ltd. Foreign Registered
(banking)............................................ 5,000 62,214
Fraser & Neave, Ltd.
(beverages & tobacco)................................ 2,000 25,451
Keppel Corp., Ltd.
(machinery & engineering)............................ 5,000 44,540
Oversea-Chinese Banking Corp., Ltd. Foreign Registered
(banking)............................................ 6,000 75,081
Singapore Airlines, Ltd.
Foreign Registered
(transportation-airlines)............................ 8,000 74,657
Singapore Press Holdings, Ltd.
Foreign Registered
(broadcasting & publishing).......................... 2,400 42,419
Straits Steamship Land, Ltd.
(multi-industry)..................................... 5,000 16,897
United Overseas Bank, Ltd.
Foreign Registered
(banking)............................................ 5,000 48,075
------------
466,820
------------
SPAIN (2.9%)
Acerinox, SA
(metals-steel)....................................... 110 11,126
Autopistas Concesionaria
Espanola, SA
(business & public services)......................... 1,376 15,652
Banco Bilbao Vizcaya, SA
(banking)............................................ 1,220 43,947
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
65
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
SPAIN (Continued)
Banco Central
Hispanoamericano, SA
(banking)............................................ 680 $ 13,789
Banco Santander, SA
(banking)............................................ 800 40,160
Corporacion Bancaria
de Espana, SA
(banking)............................................ 740 30,499
Corporacion Mapfre CIA Internacional de Reaseguros, SA
(insurance).......................................... 220 12,313
Empresa Nacional de
Electricidad, SA
(utilities-electrical & gas)......................... 1,250 70,787
Fomento de Construcciones y Contratas, SA
(construction & housing)............................. 90 6,899
Gas Natural SDG, SA
(utilities-electrical & gas)......................... 180 28,043
Iberdrola, SA
(utilities-electrical & gas)......................... 4,680 42,821
Repsol, SA
(energy sources)..................................... 1,510 49,476
Telefonica de Espana
(telecommunications)................................. 4,440 61,486
------------
426,998
------------
UNITED KINGDOM (8.8%)
Abbey National Plc
(banking)............................................ 2,420 23,896
Barclays Plc
(banking)............................................ 5,710 65,515
Bass British Plc
(beverages & tobacco)................................ 1,680 18,754
BAT Industries Plc
(beverages & tobacco)................................ 6,600 58,153
BOC Group Plc
(chemicals).......................................... 1,188 16,619
Boots Co. Plc
(merchandising)...................................... 1,707 15,531
British Airways Plc
(transportation-airlines)............................ 1,460 10,563
British Gas Plc
(energy sources)..................................... 11,990 47,284
British Petroleum Co. Plc
(energy sources)..................................... 9,837 82,321
British Telecommunications Plc
(telecommunications)................................. 11,110 61,063
BTR Plc
(multi-industry)..................................... 12,800 65,383
Cable & Wireless Plc
(telecommunications)................................. 3,990 28,497
Commercial Union Plc
(insurance).......................................... 1,740 16,966
Forte Plc
(leisure & tourism).................................. 1,658 8,508
General Electric Co. Plc
(electrical & electronics)........................... 8,620 47,511
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
UNITED KINGDOM (Continued)
GKN Plc
(machinery & engineering)............................ 647 $ 7,825
Glaxo Wellcome Plc
(health & personal care)............................. 6,800 96,603
Grand Metropolitan Plc
(multi-industry)..................................... 3,892 28,038
Great Universal Stores Plc
(merchandising)...................................... 890 9,466
Guinness Plc
(beverages & tobacco)................................ 2,990 22,004
Hanson Trust Plc
(multi-industry)..................................... 6,248 18,674
HSBC Holdings Plc (GBP par)
(financial services)................................. 1,212 18,930
Imperial Chemical Industries Plc
(chemicals).......................................... 830 9,833
Kingfisher Plc
(merchandising)...................................... 1,090 9,173
Lloyds TSB Group Plc
(banking)............................................ 12,655 65,132
Marks & Spencer Plc
(merchandising)...................................... 10,140 70,845
MEPC Plc
(real estate)........................................ 1,050 6,439
National Power Plc
(utilities-electrical & gas)......................... 1,700 11,864
Peninsular & Oriental Steam Navigation Co. Deferred
Stock
(transportation-shipping)............................ 1,264 9,342
Prudential Corp. Plc
(insurance).......................................... 4,040 26,031
Rank Organisation Plc
(leisure & tourism).................................. 1,920 13,892
Redland Plc
(building materials & components).................... 1,573 9,500
Reed International Plc
(broadcasting & publishing).......................... 5,590 85,228
Reuters Holdings Plc
(broadcasting & publishing).......................... 1,850 16,947
RMC Group Plc
(building materials & components).................... 700 10,770
RTZ Corp. Plc
(metals-nonferrous).................................. 1,540 22,380
Sainsbury Plc
(merchandising)...................................... 2,840 17,329
Scottish Power Plc
(utilities-electrical & gas)......................... 7,100 40,787
Thorn Emi Plc
(appliances &
household durables).................................. 990 23,317
Unilever Plc
(food & household products).......................... 2,820 57,925
Vodafone Group Plc
(multi-industry)..................................... 3,928 14,057
------------
1,288,895
------------
Total Common Stocks
(Cost $13,161,054)................................... 13,306,908
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
66
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
PREFERRED STOCK (0.1%)
<TABLE>
<CAPTION>
SHARES VALUE
-----------------------------
<S> <C> <C>
AUSTRIA (0.1%)
Creditanstalt-Bankverein Vorzug
(banking)........................................ 250 $ 12,860
------------
Total Preferred Stock
(Cost $14,627)................................... 12,860
------------
SHORT-TERM
INVESTMENT (4.8%)
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C> <C>
COMMERCIAL PAPER (4.8%)
Gillette Co.
5.75%, due 1/4/96................................ $ 700,000 699,665
------------
Total Short-Term Investment
(Cost $699,665).................................. 699,665
------------
Total Investments
(Cost $13,875,346) (b)........................... 95.8% 14,019,433 (c)
Cash and Other Assets,
Less Liabilities................................. 4.2 611,277
----------- ------------
Net Assets........................................ 100.0% $ 14,630,710
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) The cost for Federal income tax purposes is $13,913,478.
(c) At December 31, 1995 net unrealized appreciation for securities was
$105,955, based on cost for Federal income tax purposes. This consisted of
aggregate gross unrealized appreciation for all investments on which there
was an excess of market value over cost of $571,532 and aggregate gross
unrealized depreciation for all investments on which there was an excess of
cost over market value of $465,577.
(d) Forward Foreign Currency Contracts Open at December 31, 1995:
<TABLE>
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE APPRECIATION
- ---------------- --------------- -------- ------------
<S> <C> <C> <C>
BF 13,887,466 DM 675,442 1/30/96 $ 757
DM 1,414,750 $ 1,003,324 1/5/96 14,112
DM 478,233 IL 543,000,000 1/23/96 5,943
DM 871,302 FF 3,030,000 2/2/96 9,246
DM 215,264 $ 155,000 2/5/96 4,108
DM 213,203 DK 830,000 2/9/96 485
DM 996,460 $ 709,184 4/18/96 9,129
DM 1,055,000 $ 751,763 5/3/96 10,033
IL 545,000,000 DM 488,640 1/23/96 93
IL 270,800,000 DM 241,174 4/23/96 1,310
(Yen)371,852,000 $ 3,685,125 2/5/96 59,940
(Yen) 48,655,200 $ 485,000 7/2/96 1,075
N$ 410,875 $ 269,945 2/7/96 2,202
(Pounds) 238,000 DM 529,933 1/3/96 980
$ 570,000 DM 828,837 1/5/96 9,534
$ 370,000 A$ 502,717 2/26/96 2,894
$ 280,000 A$ 378,420 4/2/96 266
-------
132,107
-------
<CAPTION>
GROSS
CONTRACT IN DELIVERY UNREALIZED
TO DELIVER EXCHANGE FOR DATE DEPRECIATION
- ---------------- --------------- -------- ------------
<S> <C> <C> <C>
A$ 520,000 $ 384,800 2/26/96 914
DK 1,545,000 DM 397,070 2/9/96 760
DM 534,310 (Pounds)238,000 1/3/96 4,039
DM 1,952,993 $ 1,340,751 1/5/96 24,807
DM 370,000 $ 250,110 2/5/96 9,246
DM 1,687,952 $ 1,151,753 2/21/96 31,246
DM 679,879 $ 470,000 3/25/96 7,078
DM 531,600 (Pounds)240,000 4/2/96 1,394
FF 3,945,000 DM 1,129,612 2/2/96 15,408
-------
94,892
-------
Net Appreciation..................................... $37,215
=======
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
67
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
(e) Foreign cash held at December 31, 1995:
<TABLE>
<CAPTION>
CURRENCY COST VALUE
- --------------- -------- --------
<S> <C> <C>
A$ 6,942 $ 5,210 $ 5,164
AS 2,714 270 269
BF 125,783 4,385 5,258
DK 5,202 931 939
DM 537,187 373,957 372,930
FF 4,323 884 884
HK 36,922 4,775 4,775
IL 397,662 249 909
(Yen) 126,306 1,239 1,224
NG 377 233 235
N$ 7,745 5,035 5,064
(Pounds)140,163 217,652 218,051
S$ 3,051 2,168 2,157
SP 388,273 3,220 3,200
-------- --------
$620,208 $621,059
======== ========
</TABLE>
(f) The following abbreviations are used in footnotes (d) and (e):
A$--Australian Dollar
AS--Austrian Schilling
BF--Belgian Franc
DK--Danish Krone
DM--Deutsche Mark
FF--French Franc
HK--Hong Kong Dollar
IL--Italian Lira
(Yen)--Japanese Yen
NG--Netherland Guilder
N$--New Zealand Dollar
(Pounds)--Pound Sterling
S$--Singapore Dollar
SP--Spanish Peseta
$--U.S. Dollar
The table below sets forth the diversification of International Equity
Portfolio investments by Industry.
COMMON STOCKS,
PREFERRED STOCK &
SHORT-TERM
INVESTMENT
<TABLE>
<CAPTION>
VALUE PERCENT +
---------------------
<S> <C> <C>
Aerospace & Military Technology........................... $ 11,288 0.1%
Appliances & Household Durables........................... 269,928 1.8
Automobiles............................................... 513,377 3.5
Banking................................................... 2,389,784 16.3
Beverages & Tobacco....................................... 396,602 2.7
Broadcasting & Publishing................................. 205,670 1.4
Building Materials & Components........................... 252,328 1.7
Business & Public Services................................ 303,789 2.1
Chemicals................................................. 518,414 3.5
Construction & Housing.................................... 258,479 1.8
Data Processing & Reproduction............................ 113,244 0.8
Electrical & Electronics.................................. 345,051 2.4
Electronic Components
& Instruments............................................ 43,332 0.3
Energy Sources............................................ 1,013,175 6.9
Financial Services........................................ 386,183 2.6
Food & Household Products................................. 376,117 2.6
Forest Products & Paper................................... 262,067 1.8
Health & Personal Care.................................... 1,178,233 8.1
Industrial Components..................................... 209,399 1.4
Insurance................................................. 641,259 4.4
Leisure & Tourism......................................... 39,558 0.3
Machinery & Engineering................................... 367,483 2.5
Merchandising............................................. 531,132 3.6
Metals-Nonferrous......................................... 133,648 0.9
Metals-Steel.............................................. 130,140 0.9
Miscellaneous-Materials
& Commodities............................................ 74,810 0.5
Miscellaneous-Materials
& Components............................................. 111,481 0.8
Multi-Industry............................................ 627,082 4.3
Real Estate............................................... 224,556 1.5
Recreation & Other
Consumer Goods........................................... 112,159 0.8
Telecommunications........................................ 555,317 3.8
Textiles & Apparel........................................ 11,901 0.1
Tire & Rubber............................................. 12,779 0.1
Transportation-Airlines................................... 153,301 1.0
Transportation-Road & Rail................................ 152,390 1.0
Transportation-Shipping................................... 132,001 0.9
Utilities-Electrical & Gas................................ 702,225 4.8
Wholesale & International Trade........................... 259,751 1.8
----------- -----
14,019,433 95.8
Cash and Other Assets,
Less Liabilities......................................... 611,277 4.2
----------- -----
Net Assets................................................ $14,630,710 100.0%
=========== =====
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
68
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$13,875,346)................................................... $ 14,019,433
Cash denominated in foreign currencies (identified cost
$620,208)...................................................... 621,059
Cash............................................................ 338,644
Receivables:
Fund shares sold................................................ 89,622
NYLIAC.......................................................... 36,292
Dividends and interest.......................................... 17,907
Unrealized appreciation on foreign
currency contracts............................................. 132,107
Unamortized organization expense
(Note 2)....................................................... 63,674
Other assets.................................................... 27
------------
Total assets.................................................. 15,318,765
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 484,469
Organization.................................................... 72,839
Recordkeeping................................................... 7,986
Adviser......................................................... 7,110
Custodian....................................................... 6,000
Administrator................................................... 1,185
Directors....................................................... 216
Accrued expenses................................................ 13,358
Unrealized depreciation on foreign
currency contracts............................................. 94,892
------------
Total liabilities............................................. 688,055
------------
Net assets applicable to
outstanding shares............................................. $ 14,630,710
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized.................................. $ 14,350
Additional paid-in capital...................................... 14,372,208
Accumulated net realized loss
on investments................................................. (41,301)
Accumulated undistributed net realized gain on foreign currency
transactions................................................... 104,839
Net unrealized appreciation
on investments................................................. 144,087
Net unrealized appreciation on
translation of assets and liabilities in
foreign currencies............................................. 36,527
------------
Net assets applicable to
outstanding shares............................................. $ 14,630,710
============
Shares of capital stock outstanding............................. 1,434,988
============
Net asset value per share outstanding........................... $ 10.20
============
</TABLE>
STATEMENT OF OPERATIONS
For the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................. $ 112,707
Interest....................................................... 44,585
------------
Total income................................................. 157,292
------------
Expenses: (Note 2)
Recordkeeping.................................................. 58,465
Advisory (Note 3).............................................. 46,344
Custodian...................................................... 30,110
Administration (Note 3)........................................ 15,448
Auditing....................................................... 11,515
Shareholder communication...................................... 11,241
Amortization of organization expense........................... 9,826
Portfolio pricing.............................................. 9,242
Directors...................................................... 610
Legal.......................................................... 344
Miscellaneous.................................................. 565
------------
Total expenses
before reimbursement........................................ 193,710
Expense reimbursement from
Administrator (Note 3)........................................ (118,787)
------------
Net expenses................................................. 74,923
------------
Net investment income.......................................... 82,369
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized gain (loss) from:
Security transactions.......................................... (41,301)
Foreign currency transactions.................................. 702,174
------------
Net realized gain on investments and foreign currency
transactions.................................................. 660,873
------------
Net unrealized appreciation
on investments:
Security transactions.......................................... 144,087
Translation of assets and liabilities in
foreign currencies............................................ 36,527
------------
Net unrealized gain on investments and
foreign currencies............................................ 180,614
------------
Net realized and unrealized gain
on investments and foreign
currency transactions......................................... 841,487
------------
Net increase in net assets resulting
from operations............................................... $ 923,856
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$14,704.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
69
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1995
-------------
<S> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................................... $ 82,369
Net realized loss on investments................................ (41,301)
Net realized gain on foreign currency transactions.............. 702,174
Net unrealized appreciation on investments...................... 144,087
Net unrealized appreciation on translation of assets and liabil-
ities in foreign currencies.................................... 36,527
------------
Net increase in net assets resulting from operations............ 923,856
------------
Dividends and distributions to shareholders:
From net investment income...................................... (82,369)
From net realized gain on investments and foreign currency
transactions................................................... (597,335)
------------
Total dividends and distributions to shareholders.............. (679,704)
------------
Capital share transactions:
Net proceeds from sale of shares................................ 4,168,978
Net asset value of shares issued to shareholders in reinvestment
of dividends................................................... 679,704
------------
4,848,682
Cost of shares redeemed......................................... (462,124)
------------
Increase in net assets derived from capital share transactions. 4,386,558
------------
Net increase in net assets..................................... 4,630,710
NET ASSETS:
Beginning of period............................................. 10,000,000
------------
End of period................................................... $ 14,630,710
============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1
1995 (a)
THROUGH
DECEMBER 31,
1995
-------------
<S> <C>
Net asset value at beginning of period.......................... $ 10.00
------------
Net investment income........................................... 0.64
Net realized and unrealized gain on investments................. 0.01
Net realized and unrealized gain on foreign currency transac-
tions.......................................................... 0.05
------------
Total from investment operations................................ 0.70
------------
Less dividends and distributions:
From net investment income..................................... (0.06)
From net realized gain on investments and foreign currency
transactions.................................................. (0.44)
------------
Total dividends and distributions:.............................. (0.50)
------------
Net asset value at end of period................................ $ 10.20
============
Total investment return (b)..................................... 6.96%
Ratios (to average net assets)/Supplemental Data:
Net investment income.......................................... 1.07%+
Net expenses................................................... 0.97%+
Expenses (before reimbursement)................................ 2.51%+
Portfolio turnover rate......................................... 14%
Net assets at end of period (in 000's).......................... $ 14,631
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
70
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
LONG-TERM BONDS (39.8%)+
ASSET-BACKED SECURITIES (3.5%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
AUTO LEASES (0.3%)
Ford Credit Auto Lease Trust
Series 1995-1 Class A2
6.35%, due 10/15/98 ................................. $ 600,000 $ 604,878
------------
AUTO LOANS (1.1%)
Ford Credit Grantor Trust
Series 1995-B Class A
5.90%, due 10/15/00.................................. 802,467 805,998
NationsBank Auto Grantor Trust
Series 1995-A Class A
5.85%, due 6/15/02................................... 1,084,809 1,088,877
Union Acceptance Corp.
Series 1995-B Class A
6.575%, due 7/10/02.................................. 217,414 220,199
------------
2,115,074
------------
CREDIT CARD
RECEIVABLES (1.1%)
American Express Master Trust
Series 1992-1 Class A
6.05%, due 6/15/98................................... 400,000 403,320
Chemical Master Credit Card Trust 1
Series 1995-3 Class A
6.23%, due 4/15/05................................... 1,075,000 1,098,263
Standard Credit Card Master Trust
Series 1995-4 Class A
5.975%, due 2/15/00 (d).............................. 725,000 725,000
------------
2,226,583
------------
HOME EQUITY LOANS (1.0%)
Contitrade Services Home Equity Loan Trust
Series 1991-1 Class A
8.80%, due 1/15/06................................... 408,370 421,768
EQCC Home Equity Loan Trust
Series 1995-3 Class A1
6.25%, due 10/15/03.................................. 486,035 487,590
Green Tree Home Improvement Loan Trust
Series 1995-D Class A1
6.05%, due 9/15/25................................... 563,610 565,020
Series 1995-C Class A1
6.20%, due 7/15/20................................... 390,899 392,122
------------
1,866,500
------------
Total Asset-Backed Securities
(Cost $6,757,760).................................... 6,813,035
------------
CORPORATE BONDS (2.3%)
BANKS (1.2%)
First Union Bancorp
7.50%, due 4/15/35................................... 600,000 664,938
Regions Financial Corp.
7.75%, due 9/15/24................................... 1,125,000 1,266,289
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
BANKS (Continued)
Southtrust Bank
Birmingham, Alabama
7.69%, due 5/15/25.................................. $ 400,000 $ 449,296
------------
2,380,523
------------
BROKERAGE (0.1%)
Smith Barney Holdings Inc.
7.98%, due 3/1/00................................... 250,000 268,052
------------
FINANCE (1.0%)
Associates Corp. of North America
7.75%, due 2/15/05.................................. 1,450,000 1,614,952
General Motors Acceptance Corp.
9.625%, due 12/15/01................................ 300,000 352,908
------------
1,967,860
------------
Total Corporate Bonds
(Cost $4,432,622)................................... 4,616,435
U.S. GOVERNMENT & ------------
FEDERAL AGENCIES (31.4%)
FEDERAL AGENCY (0.2%)
Tennessee Valley Authority
8.25%, due 4/15/42.................................. 315,000 374,163
------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION (0.7%)
7.09%, due 6/1/05................................... 725,000 751,455
8.19%, due 10/6/04.................................. 600,000 646,044
------------
1,397,499
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION (MORTGAGE
PASS-THROUGH SECURITY) (0.8%)
6.00%, due 8/1/24................................... 1,549,307 1,500,644
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION GOLD (MORTGAGE
PASS-THROUGH SECURITIES) (2.6%)
6.00%, due 2/20/26 TBA (b).......................... 2,300,000 2,225,250
7.00%, due 2/13/26 TBA (b).......................... 2,850,000 2,871,375
------------
5,096,625
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION (1.7%)
6.25%, due 8/12/03.................................. 625,000 621,856
7.85%, due 9/10/04.................................. 525,000 559,466
8.50%, due 2/1/05................................... 2,000,000 2,188,160
------------
3,369,482
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
71
<PAGE>
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
U.S. GOVERNMENT &
FEDERAL AGENCIES (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (COLLATERALIZED
MORTGAGE
OBLIGATIONS) (0.5%)
Series 1993-76 Class B
6.00%, due 6/25/08................................... $ 522,941 $ 494,995
Series 1993-89 Class D
7.00%, due 6/25/23................................... 475,000 458,152
-----------
953,147
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (MEDIUM-TERM
NOTE) (0.2%)
7.21%, due 8/18/05................................... 375,000 390,986
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (MORTGAGE PASS-
THROUGH SECURITY) (2.0%)
7.00%, due 2/15/11 TBA (b)........................... 3,895,000 3,962,539
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (MORTGAGE
PASS-
THROUGH SECURITIES) (5.4%)
5.50%, due 2/22/26 ARM
TBA (b)(f)........................................... 3,125,000 3,125,000
7.50%, due 2/20/26 TBA (b)........................... 1,760,000 1,807,854
8.00%, due 2/20/26 TBA (b)........................... 5,480,000 5,699,200
-----------
10,632,054
-----------
UNITED STATES TREASURY BONDS (4.0%)
6.875%, due 8/15/25.................................. 2,860,000 3,225,537
7.625%, due 2/15/25.................................. 2,640,000 3,228,218
11.625%, due 11/15/04................................ 895,000 1,266,702
-----------
7,720,457
-----------
UNITED STATES TREASURY NOTES (13.3%)
5.625%, due 6/30/97 (c).............................. 7,300,000 7,345,625
5.625%, due 11/30/00................................. 5,500,000 5,549,830
6.375%, due 8/15/02.................................. 1,025,000 1,074,805
7.875%, due 11/15/04................................. 2,075,000 2,401,813
8.125%, due 2/15/98 (c).............................. 8,400,000 8,883,000
8.875%, due 2/15/99.................................. 525,000 578,813
-----------
25,833,886
-----------
Total U.S. Government &
Federal Agencies
(Cost $59,878,300)................................... 61,231,482
-----------
</TABLE>
<TABLE>
<CAPTION>
YANKEE BONDS (2.6%)
PRINCIPAL
AMOUNT VALUE
------------------------
<S> <C> <C>
African Development Bank
6.875%, due 10/15/15................................. $ 475,000 $ 488,452
BCH Cayman Islands
8.25%, due 6/15/04................................... 675,000 741,865
Celulosa Arauco y Constitucion S.A.
6.75%, due 12/15/03.................................. 705,000 708,271
China International Trust & Investing Corp.
9.00%, due 10/15/06.................................. 525,000 594,809
Dresdner Bank-New York
7.25%, due 9/15/15................................... 750,000 800,198
Grand Metropolitan
Investment Corp.
7.45%, due 4/15/35................................... 600,000 670,542
Republic of Italy
6.875%, due 9/27/23.................................. 550,000 536,630
Wharf Capital International Ltd.
8.875%, due 11/1/04.................................. 375,000 402,709
------------
Total Yankee Bonds
(Cost $4,731,245).................................... 4,943,476
------------
Total Long-Term Bonds
(Cost $75,799,927)................................... 77,604,428
------------
COMMON STOCKS (54.0%)
<CAPTION>
SHARES
-----------
<S> <C> <C>
AIRLINES (0.6%)
Atlantic Southeast Airlines, Inc. .................... 18,000 387,000
Southwest Airlines Co. ............................... 33,450 777,712
------------
1,164,712
------------
AUTO PARTS (0.5%)
Lear Seating Corp. (a)................................ 35,000 1,015,000
------------
BANKS (2.8%)
Bank of New York Co., Inc. ........................... 32,900 1,603,875
Barnett Banks, Inc. .................................. 23,500 1,386,500
First Interstate Bancorp.............................. 15,800 2,156,700
NationsBank Corp. .................................... 3,100 215,838
------------
5,362,913
------------
BROKERAGE (0.2%)
Schwab (Charles) Corp. ............................... 14,700 295,837
------------
BUILDINGS (0.9%)
Lennar Corp. ......................................... 17,200 432,150
Oakwood Homes Corp. .................................. 32,200 1,235,675
------------
1,667,825
------------
COMMERCIAL SERVICES (0.6%)
Service Corp. International........................... 26,000 1,144,000
------------
COMPUTERS & OFFICE EQUIPMENT (4.1%)
Alco Standard Corp. .................................. 53,600 2,445,500
Danka Business Systems Plc ADR (e) 33,300 1,232,100
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
72
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT (Continued)
EMC Corp. (a)......................................... 35,000 $ 538,125
Hewlett-Packard Co. .................................. 16,700 1,398,625
Seagate Technology, Inc. (a).......................... 13,500 641,250
Sun Microsystems, Inc. (a)............................ 39,800 1,815,875
------------
8,071,475
------------
CONSUMER DURABLES (0.7%)
Black & Decker Corp. ................................. 37,600 1,325,400
------------
CONSUMER FINANCIAL SERVICES (0.7%)
First Data Corp. ..................................... 20,600 1,377,625
------------
CONSUMER SERVICES (0.1%)
CUC International, Inc. (a)........................... 6,400 218,400
------------
DRUGS (5.7%)
Amgen, Inc. (a)....................................... 49,400 2,933,125
Elan Corp. Plc ADR (a)(e)............................. 25,400 1,235,075
Genzyme Corp. (a)..................................... 22,100 1,378,487
Mylan Laboratories, Inc. ............................. 60,500 1,421,750
Pharmacia & Upjohn, Inc. ............................. 32,000 1,240,000
Schering-Plough Corp. ................................ 30,400 1,664,400
Teva Pharmaceutical Industries Ltd. ADR (e)........... 26,500 1,228,938
------------
11,101,775
------------
ELECTRONICS (0.8%)
General Instrument Corp. (a).......................... 15,500 362,313
Vishay Intertechnology, Inc. (a)...................... 40,374 1,271,781
------------
1,634,094
------------
FINANCE (4.8%)
Federal National
Mortgage Association................................. 12,700 1,576,387
Green Tree Financial Corp. ........................... 96,000 2,532,000
Household International Inc. ......................... 28,800 1,702,800
MGIC Investment Corp. ................................ 24,200 1,312,850
Travelers Group, Inc. ................................ 34,200 2,150,325
------------
9,274,362
------------
FINANCIAL SERVICES (1.9%)
First USA, Inc. ...................................... 34,000 1,508,750
SunAmerica Inc. ...................................... 47,250 2,244,375
------------
3,753,125
------------
HEALTH CARE (2.9%)
Columbia/HCA Healthcare Corp. ........................ 32,369 1,642,727
HealthCare COMPARE Corp. (a).......................... 18,900 822,150
Humana, Inc. (a)...................................... 37,000 1,012,875
United Healthcare Corp. .............................. 34,400 2,253,200
------------
5,730,952
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
HOSPITAL MANAGEMENT
& SERVICES (1.3%)
HEALTHSOUTH Corp. (a)................................. 42,500 $ 1,237,812
OrNda HealthCorp (a).................................. 37,200 864,900
Unison HealthCare Corp. (a)........................... 51,000 478,125
------------
2,580,837
------------
HOUSEHOLD PRODUCTS (0.1%)
Singer Company N.V. (The)............................. 3,600 100,350
------------
INSURANCE (1.1%)
American International Group, Inc. 24,150 2,233,875
------------
MEDIA (0.9%)
Viacom Inc. Class A (a)............................... 3,288 150,837
Viacom Inc. Class B (a)............................... 32,112 1,521,306
------------
1,672,143
------------
MEDICAL EQUIPMENT (2.4%)
Cordis Corp. (a)...................................... 19,300 1,939,650
Medtronic, Inc. ...................................... 40,200 2,246,175
Waters Corp. (a)...................................... 32,500 593,125
------------
4,778,950
------------
OIL & GAS
EXPLORATION (0.8%)
Triton Energy Corp. (a)............................... 27,300 1,566,338
------------
PUBLISHING (0.6%)
News Corp. Ltd. ADR (e)............................... 52,900 1,130,737
------------
RESTAURANTS &
LODGING (2.3%)
HFS, Inc. (a)......................................... 43,700 3,572,475
Lone Star Steakhouse &
Saloon, Inc. (a)..................................... 25,000 959,375
------------
4,531,850
------------
RETAIL (4.7%)
Bed, Bath & Beyond, Inc. (a).......................... 10,000 388,125
Cato Corp. Class A.................................... 26,000 201,500
Circuit City Stores, Inc. ............................ 30,500 842,562
Gymboree Corp. (a).................................... 27,000 556,875
Home Depot, Inc. (The)................................ 26,500 1,268,688
Kohl's Corp. (a)...................................... 17,100 897,750
Kroger Co. (The) (a).................................. 38,800 1,455,000
Lowe's Companies, Inc. ............................... 47,000 1,574,500
Office Depot, Inc. (a)................................ 48,950 966,762
Sunglass Hut International, Inc. (a).................. 39,000 926,250
------------
9,078,012
------------
SOFTWARE (1.6%)
Computer Associates
International, Inc. ................................. 45,900 2,610,563
Microsoft Corp. (a)................................... 6,800 596,700
------------
3,207,263
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
73
<PAGE>
TOTAL RETURN PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
TECHNOLOGY (7.0%)
General Motors Corp. Class E........................... 20,000 $ 1,040,000
Intel Corp. ........................................... 37,000 2,099,750
Lam Research Corp. (a)................................. 31,850 1,457,137
Linear Technology Corp. ............................... 28,000 1,099,000
Micron Technology Inc. ................................ 43,200 1,711,800
Motorola, Inc. ........................................ 17,500 997,500
Oracle Corp. (a)....................................... 42,250 1,790,344
3Com Corp. (a)......................................... 74,200 3,459,575
------------
13,655,106
------------
TELECOMMUNICATION SERVICES (1.3%)
Tele-Communications International, Inc. Class A (a).... 30,000 682,500
WorldCom, Inc. (a)..................................... 51,016 1,798,314
------------
2,480,814
------------
TEXTILE & APPAREL (1.7%)
Nine West Group, Inc. (a).............................. 37,700 1,413,750
Warnaco Group, Inc. (The)
Class A............................................... 43,000 1,075,000
Wolverine World Wide, Inc. ............................ 28,000 882,000
------------
3,370,750
------------
TURNKEY & SOFTWARE SYSTEMS (0.9%)
Sterling Software, Inc. (a)............................ 28,500 1,777,688
------------
Total Common Stocks
(Cost $74,592,643).................................... 105,302,208
PREFERRED STOCK (0.2%) ------------
PUBLISHING (0.2%)
News Corp. Ltd. ADR--
Preference Shares (e)................................. 18,900 363,825
------------
Total Preferred Stock
(Cost $302,632) ...................................... 363,825
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (14.5%)
PRINCIPAL
AMOUNT VALUE
--------------------------
<S> <C> <C>
COMMERCIAL PAPER (4.6%)
Chevron Oil Finance Co.
5.80%, due 1/3/96............................... $ 3,500,000 $ 3,500,000
Smith Barney Inc.
5.55%, due 1/2/96............................... 5,340,000 5,340,000
------------
Total Commercial Paper
(Cost $8,840,000)............................... 8,840,000
------------
U.S. GOVERNMENT (9.9%)
United States Treasury Note 4.625%, due 2/15/96
(c)............................................. 19,350,000 19,337,810
------------
Total U.S. Government
(Cost $19,334,914) ............................. 19,337,810
------------
Total Short-Term Investments (Cost $28,174,914).. 28,177,810
------------
Total Investments
(Cost $178,870,116) (g)......................... 108.5% 211,448,271 (h)
Liabilities in Excess of
Cash and Other Assets........................... (8.5) (16,554,865)
----------- ------------
Net Assets....................................... 100.0% $194,893,406
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) TBA: Securities purchased on a forward commitment basis with an approxi-
mate principal amount and maturity date. The actual principal amount and
maturity date will be determined upon settlement.
(c) Partially segregated as collateral for TBA.
(d) Floating rate. Rate shown is the rate in effect at December 31, 1995.
(e) ADR--American Depository Receipt.
(f) ARM--Adjustable Rate Mortgage. Resets annually.
(g) The cost for Federal income tax purposes is $178,885,619.
(h) At December 31, 1995 net unrealized appreciation was $32,562,652, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $34,690,869 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $2,128,217.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
74
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
TOTAL RETURN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$178,870,116).................................................. $211,448,271
Cash............................................................ 5,367
Receivables:
Investment securities sold...................................... 9,738,421
Dividends and interest.......................................... 1,454,025
Fund shares sold................................................ 361,346
Other assets.................................................... 348
------------
Total assets.................................................. 223,007,778
------------
LIABILITIES:
Payables:
Investment securities purchased................................. 27,956,817
Adviser......................................................... 51,731
Recordkeeping................................................... 23,947
NYLIAC.......................................................... 20,405
Administrator................................................... 16,017
Custodian....................................................... 5,754
Directors....................................................... 530
Accrued expenses................................................ 39,171
------------
Total liabilities............................................. 28,114,372
------------
Net assets applicable to
outstanding shares............................................. $194,893,406
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized................................... $ 146,988
Additional paid-in capital...................................... 166,366,672
Accumulated net realized loss
on investments................................................. (4,198,409)
Net unrealized appreciation
on investments................................................. 32,578,155
------------
Net assets applicable to
outstanding shares............................................. $194,893,406
============
Shares of capital stock outstanding............................. 14,698,789
============
Net asset value per share outstanding........................... $ 13.26
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 517,865
Interest......................................................... 5,142,016
------------
Total income................................................... 5,659,881
------------
Expenses: (Note 2)
Advisory (Note 3)................................................ 482,518
Administration (Note 3).......................................... 301,574
Recordkeeping.................................................... 299,205
Shareholder communication........................................ 50,966
Custodian........................................................ 32,677
Auditing......................................................... 24,989
Directors........................................................ 11,346
Legal............................................................ 9,898
Amortization of organization expense............................. 1,535
Miscellaneous.................................................... 10,413
------------
Total expenses
before reimbursement.......................................... 1,225,121
Expense reimbursement from
Administrator (Note 3).......................................... (184,691)
------------
Net expenses................................................... 1,040,430
------------
Net investment income............................................ 4,619,451
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 1,771,355
Net change in unrealized appreciation
on investments.................................................. 29,979,674
------------
Net realized and unrealized gain
on investments.................................................. 31,751,029
------------
Net increase in net assets resulting
from operations................................................. $ 36,370,480
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$2,749.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
75
<PAGE>
TOTAL RETURN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................. $ 4,619,451 $ 3,244,271
Net realized gain (loss) on investments........... 1,771,355 (5,792,589)
Net change in unrealized appreciation on invest-
ments............................................ 29,979,674 (108,863)
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. 36,370,480 (2,657,181)
------------ ------------
Dividends to shareholders:
From net investment income........................ (4,571,400) (3,194,834)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 52,019,281 72,065,497
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 4,571,400 3,194,834
------------ ------------
56,590,681 75,260,331
Cost of shares redeemed........................... (15,828,916) (2,623,995)
------------ ------------
Increase in net assets derived from capital share
transactions.................................... 40,761,765 72,636,336
------------ ------------
Net increase in net assets....................... 72,560,845 66,784,321
NET ASSETS:
Beginning of year................................. 122,332,561 55,548,240
------------ ------------
End of year....................................... $194,893,406 $122,332,561
============ ============
Accumulated undistributed net investment income... $ -- $ 7,807
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29,
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31,
1995 1994 1993
-------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of pe-
riod.............................. $ 10.58 $ 11.32 $ 10.00
------------ ------------ ------------
Net investment income.............. 0.31 0.27 0.16
Net realized and unrealized gain
(loss) on investments............. 2.69 (0.72) 1.34
------------ ------------ ------------
Total from investment operations... 3.00 (0.45) 1.50
------------ ------------ ------------
Less dividends and distributions:
From net investment income........ (0.32) (0.29) (0.16)
In excess of net realized gain on
investments...................... -- -- (0.02)
------------ ------------ ------------
Total dividends and distributions.. (0.32) (0.29) (0.18)
------------ ------------ ------------
Net asset value at end of period... $ 13.26 $ 10.58 $ 11.32
============ ============ ============
Total investment return (b)........ 28.33% (3.99%) 15.04%
Ratios (to average net
assets)/Supplemental Data:
Net investment income............. 3.06% 3.50% 3.48%+
Net expenses...................... 0.69% 0.69% 0.69%+
Expenses (before reimbursement)... 0.81% 0.88% 1.07%+
Portfolio turnover rate............ 253% 297% 197%
Net assets at end of period (in
000's)............................ $ 194,893 $ 122,333 $ 55,548
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
76
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
COMMON STOCKS (78.9%)+
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
AEROSPACE (1.3%)
McDonnell Douglas Corp................................ 3,500 $ 322,000
------------
AUTO MANUFACTURING (1.1%)
General Motors Corp. ................................. 5,200 274,950
------------
BANKS (5.7%)
Bankers Trust New York Corp........................... 5,200 345,800
First Bank System, Inc................................ 7,600 377,150
First Fidelity Bancorp................................ 1,600 120,600
First Interstate Bancorp.............................. 900 122,850
National City Corp.................................... 7,700 255,063
PNC Bank Corp......................................... 5,100 164,475
------------
1,385,938
------------
BEVERAGES (0.6%)
Anheuser-Busch Cos., Inc. ............................ 2,300 153,813
------------
BUILDING MATERIALS (1.3%)
Armstrong World Industries, Inc....................... 5,000 310,000
------------
CAPITAL GOODS (1.9%)
Case Corp............................................. 6,500 297,375
Honeywell Inc. ....................................... 3,400 165,325
------------
462,700
------------
CHEMICALS (8.6%)
Agrium, Inc. ......................................... 3,700 166,500
Arcadian Corp......................................... 3,800 73,625
FMC Corp. (a)......................................... 4,700 317,838
Geon Co. (The)........................................ 9,600 234,000
Georgia Gulf Corp..................................... 6,900 212,175
IMC Global, Inc....................................... 3,400 138,975
Lyondell Petrochemical Co. ........................... 9,300 212,737
Potash Corp. of Saskatchewan Inc...................... 1,600 113,400
PPG Industries, Inc................................... 1,900 86,925
Terra Industries Inc.................................. 21,300 300,863
Vigoro Corp. (The).................................... 4,000 247,000
------------
2,104,038
------------
DEFENSE ELECTRONICS (3.2%)
Litton Industries, Inc. (a)........................... 6,000 267,000
Lockheed Martin Corp. ................................ 2,900 229,100
Loral Corp............................................ 8,400 297,150
------------
793,250
------------
DOMESTIC OILS (3.9%)
Enron Oil & Gas Co.................................... 11,700 280,800
Noble Affiliates, Inc................................. 2,000 59,750
Parker & Parsley Petroleum Co......................... 13,400 294,800
Unocal Corp........................................... 11,000 320,375
------------
955,725
------------
</TABLE>
- --------
+Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
DRUGS (0.9%)
Merck & Co., Inc. .................................... 1,800 $ 118,350
Warner-Lambert Co. ................................... 1,000 97,125
------------
215,475
------------
ENERGY (3.8%)
Coastal Corp. ........................................ 9,400 350,150
Horsham Corp.......................................... 4,000 54,000
MAPCO, Inc............................................ 1,400 76,475
Panhandle Eastern Corp................................ 9,900 275,963
Tosco Corp. .......................................... 4,400 167,750
------------
924,338
------------
FINANCE (0.9%)
Travelers Group Inc. ................................. 3,500 220,063
------------
FOOD (2.0%)
Archer Daniels Midland Co............................. 17,170 309,060
IBP, Inc. ............................................ 3,600 181,800
------------
490,860
------------
FOOD, BEVERAGES & TOBACCO (2.9%)
Philip Morris Cos. Inc. .............................. 3,300 298,650
RJR Nabisco Holdings Corp. ........................... 13,200 407,550
------------
706,200
------------
HEALTH CARE (2.7%)
FHP International Corp. (a)........................... 5,500 156,750
Humana Inc. (a)....................................... 6,500 177,938
U.S. Healthcare, Inc.................................. 6,800 316,200
------------
650,888
------------
HOUSEHOLD PRODUCTS (1.3%)
Premark International, Inc............................ 6,500 329,062
------------
INSURANCE (9.6%)
Aetna Life and Casualty Co............................ 5,800 401,650
Allstate Corp. (The).................................. 4,797 197,277
American International Group, Inc. ................... 2,800 259,000
Chubb Corp. (The)..................................... 1,800 174,150
Providian Corp........................................ 7,300 297,475
Prudential Reinsurance
Holdings Inc......................................... 9,000 210,375
SAFECO Corp........................................... 4,200 144,900
St. Paul Cos., Inc. (The)............................. 5,500 305,937
Torchmark Corp. ...................................... 8,100 366,525
------------
2,357,289
------------
INTERNATIONAL OILS (2.0%)
British Petroleum Company,
Plc ADR (b).......................................... 3,000 306,375
Occidental Petroleum Corp............................. 8,500 181,687
------------
488,062
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
77
<PAGE>
VALUE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
MACHINERY (1.2%)
Agco Corp. ........................................... 6,000 $ 306,000
------------
PAPER & FOREST
PRODUCTS (4.3%)
Champion International Corp........................... 6,900 289,800
Chesapeake Corp....................................... 3,500 103,687
Rayonier, Inc. ....................................... 6,800 226,950
Stone Container Corp.................................. 14,100 202,688
Temple-Inland Inc..................................... 5,000 220,625
------------
1,043,750
------------
PHOTOGRAPHY (0.7%)
Eastman Kodak Co. .................................... 2,600 174,200
------------
RAILROADS (3.2%)
Conrail Inc........................................... 4,600 322,000
Illinois Central Corp................................. 8,100 310,837
Union Pacific Corp. .................................. 2,100 138,600
------------
771,437
------------
REAL ESTATE (0.9%)
Meditrust............................................. 6,000 209,250
------------
RETAIL (7.1%)
American Stores Co. .................................. 3,000 80,250
Dillard Department Stores, Inc. ...................... 8,000 228,000
Federated Department
Stores, Inc. (a)..................................... 7,000 192,500
Kroger Co. (The) (a).................................. 11,000 412,500
Limited Inc. (The).................................... 13,400 232,825
Payless Cashways, Inc. (a)............................ 7,000 29,750
Penney (J.C.) Co., Inc. .............................. 4,000 190,500
Sears, Roebuck and Co................................. 8,000 312,000
Stop & Shop Cos., Inc. (The) (a)...................... 2,300 53,187
------------
1,731,512
------------
TECHNOLOGY (1.7%)
International Business
Machines Corp........................................ 4,600 422,050
------------
TEXTILE & APPAREL (1.3%)
Jones Apparel Group, Inc. (a)......................... 7,900 311,062
------------
TIRE & RUBBER (1.2%)
Goodyear Tire & Rubber Co. (The) 6,300 285,862
------------
UTILITIES--ELECTRIC (3.6%)
Entergy Corp. ........................................ 11,000 321,750
Long Island Lighting Co............................... 9,000 147,375
Pinnacle West Capital Corp. .......................... 7,300 209,875
Unicom Corp........................................... 6,000 196,500
------------
875,500
------------
Total Common Stocks
(Cost $17,756,267)................................... 19,275,274
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (19.6%)
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (19.6%)
American Express Credit Corp.
5.60%, due 1/9/96................................... $ 963,000 $ 963,000
Beneficial Corp.
5.80%, due 1/3/96................................... 986,000 986,000
Ford Motor Credit Co.
5.72%, due 1/2/96................................... 671,000 671,000
General Electric Capital Corp.
5.83%, due 1/8/96................................... 893,000 893,000
Prudential Funding Corp.
5.92%, due 1/4/96................................... 640,000 640,000
Texaco Inc.
5.92%, due 1/5/96................................... 640,000 640,000
------------
Total Short-Term Investments (Cost $4,793,000)....... 4,793,000
------------
Total Investments
(Cost $22,549,267) (c).............................. 98.5% 24,068,274
Cash and Other Assets,
Less Liabilities.................................... 1.5 361,176
----------- ------------
Net Assets........................................... 100.0% $ 24,429,450
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) ADR-American Depository Receipt.
(c) The cost for Federal income tax purposes is $22,552,646.
(d) At December 31, 1995 net unrealized appreciation was $1,515,628, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $1,872,481 and aggregate gross unrealized de-
preciation for all investments on which there was an excess of cost over
market value of $356,853.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
78
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2) (identified cost
$22,549,267)..................................................... $24,068,274
Cash.............................................................. 157
Receivables:
Fund shares sold.................................................. 333,210
Dividends and interest............................................ 45,826
Investment securities sold........................................ 29,081
NYLIAC............................................................ 15,800
Unamortized organization expense
(Note 2)......................................................... 63,634
Other assets...................................................... 13
-----------
Total assets.................................................... 24,555,995
-----------
LIABILITIES:
Payables:
Organization...................................................... 73,173
Investment securities purchased................................... 33,153
Adviser........................................................... 6,528
Recordkeeping..................................................... 5,471
Custodian......................................................... 2,604
Administrator..................................................... 1,813
Accrued expenses.................................................. 3,803
-----------
Total liabilities............................................... 126,545
-----------
Net assets applicable to
outstanding shares............................................... $24,429,450
===========
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized.................................... $ 21,095
Additional paid-in capital........................................ 22,842,255
Accumulated undistributed net
investment income................................................ 131
Accumulated undistributed net realized gain
on investments................................................... 46,962
Net unrealized appreciation
on investments................................................... 1,519,007
-----------
Net assets applicable to
outstanding shares............................................... $24,429,450
===========
Shares of capital stock outstanding............................... 2,109,524
===========
Net asset value per share outstanding............................. $ 11.58
===========
</TABLE>
STATEMENT OF OPERATIONS
For the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a)...................................................... $ 148,848
Interest........................................................... 103,926
----------
Total income..................................................... 252,774
----------
Expenses: (Note 2)
Recordkeeping...................................................... 35,622
Advisory (Note 3).................................................. 27,605
Administration (Note 3)............................................ 15,336
Auditing........................................................... 10,750
Amortization of organization expense............................... 9,866
Custodian.......................................................... 9,789
Shareholder communication.......................................... 1,056
Directors.......................................................... 326
Legal.............................................................. 184
Miscellaneous...................................................... 960
----------
Total expenses
before reimbursement............................................ 111,494
Expense reimbursement from
Administrator (Note 3)............................................ (55,518)
----------
Net expenses..................................................... 55,976
----------
Net investment income.............................................. 196,798
----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................... 46,962
Net unrealized appreciation
on investments.................................................... 1,519,007
----------
Net realized and unrealized gain
on investments.................................................... 1,565,969
----------
Net increase in net assets resulting
from operations................................................... $1,762,767
==========
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of $182.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
79
<PAGE>
VALUE PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the period May 1, 1995 (Commencement of Operations)
through December 31, 1995
<TABLE>
<CAPTION>
1995
-------------
<S> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income........................................... $ 196,798
Net realized gain on investments................................ 46,962
Net unrealized appreciation on investments...................... 1,519,007
------------
Net increase in net assets resulting from operations............ 1,762,767
------------
Dividends to shareholders:
From net investment income...................................... (196,667)
------------
Capital share transactions:
Net proceeds from sale of shares................................ 17,977,153
Net asset value of shares issued to shareholders in reinvestment
of dividends................................................... 196,667
------------
18,173,820
Cost of shares redeemed......................................... (310,470)
------------
Increase in net assets derived from capital share transactions. 17,863,350
------------
Net increase in net assets..................................... 19,429,450
NET ASSETS:
Beginning of period............................................. 5,000,000
------------
End of period................................................... $ 24,429,450
------------
Accumulated undistributed net investment income................. $ 131
============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
MAY 1
1995 (a)
THROUGH
DECEMBER 31,
1995
-------------
<S> <C>
Net asset value at beginning of period........................... $ 10.00
------------
Net investment income............................................ 0.10
Net realized and unrealized gain on investments.................. 1.58
------------
Total from investment operations................................. 1.68
------------
Less dividends:
From net investment income...................................... (0.10)
------------
Net asset value at end of period................................. $ 11.58
============
Total investment return (b)...................................... 16.76%
Ratios (to average net assets)/Supplemental Data:
Net investment income........................................... 2.57%+
Net expenses.................................................... 0.73%+
Expenses (before reimbursement)................................. 1.45%+
Portfolio turnover rate.......................................... 20%
Net assets at end of period (in 000's)........................... $ 24,429
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
80
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
LONG-TERM BONDS (93.9%)+
CORPORATE BONDS (45.2%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
BANKS (7.1%)
BankAmerica Corp.
7.75%, due 7/15/02................................... $ 4,000,000 $ 4,355,000
First Union Corp.
9.45%, due 6/15/99................................... 5,000,000 5,562,500
Golden West Financial Corp.
10.25%, due 12/1/00.................................. 1,000,000 1,178,750
Republic New York Corp.
7.75%, due 5/15/09................................... 5,000,000 5,625,000
------------
16,721,250
------------
CONTAINERS (1.7%)
Federal Paper Board Inc.
10.00%, due 4/15/11.................................. 3,100,000 3,999,000
------------
DATA PROCESSING (1.3%)
International Business
Machines Corp.
6.375%, due 6/15/00.................................. 3,000,000 3,071,250
------------
DIVERSIFIED UTILITIES (6.3%)
Consumers Power Co.
7.375%, due 9/15/23.................................. 2,000,000 1,997,500
Long Island Lighting Co.
8.75%, due 2/15/97................................... 2,000,000 2,025,000
Niagara Mohawk Power Corp.
7.375%, due 8/1/03................................... 2,000,000 1,905,000
Pacific Gas & Electric Co.
6.25%, due 3/1/04.................................... 3,000,000 2,996,250
Philadelphia Electric Co.
5.625%, due 11/1/01.................................. 3,000,000 2,932,500
Public Service Co. of Colorado
6.00%, due 1/1/01.................................... 3,000,000 3,007,500
------------
14,863,750
------------
ELECTRIC UTILITIES (2.0%)
Commonwealth Edison Co.
9.75%, due 2/15/20................................... 1,450,000 1,691,062
Ohio Edison Co.
8.50%, due 5/1/96 (a)................................ 1,100,000 1,109,625
Southern California Edison Corp.
5.875%, due 2/1/98................................... 2,000,000 2,010,000
------------
4,810,687
------------
FINANCE (11.0%)
American General Finance Corp.
7.00%, due 10/1/97................................... 7,000,000 7,166,250
Chrysler Financial Corp.
8.125%, due 12/15/96 (a)............................. 6,000,000 6,128,100
Ford Motor Credit Co.
6.25%, due 2/26/98................................... 3,000,000 3,037,500
General Motors Acceptance Corp.
7.75%, due 4/15/97................................... 5,000,000 5,131,250
9.625%, due 12/15/01................................. 1,000,000 1,175,000
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
FINANCE (Continued)
Mellon Financial Co.
7.625%, due 11/15/99................................. $ 3,000,000 $ 3,187,500
------------
25,825,600
------------
FOOD (0.5%)
ConAgra, Inc.
9.875%, due 11/15/05................................. 1,000,000 1,260,000
------------
FOREIGN (3.5%)
British Telecommunications Plc
9.375%, due 2/15/99.................................. 4,200,000 4,646,250
9.625%, due 2/15/19.................................. 1,000,000 1,127,500
National Westminster Bancorp, Inc.
9.375%, due 11/15/03................................. 2,000,000 2,400,000
------------
8,173,750
------------
MOTION PICTURES/T.V. PROGRAMMING (1.0%)
Harcourt General, Inc.
9.50%, due 3/15/00................................... 2,000,000 2,242,500
------------
OIL & GAS (1.1%)
Phillips Petroleum Co.
9.18%, due 9/15/21................................... 1,200,000 1,408,500
Tennessee Gas Pipeline Co.
9.25%, due 5/15/96 (a)............................... 1,060,000 1,073,250
------------
2,481,750
------------
PAPER/PRODUCTS (2.2%)
Champion International Corp.
9.875%, due 6/1/00................................... 4,500,000 5,175,000
------------
RAILROADS (1.1%)
CSX Corp.
9.00%, due 8/15/06................................... 2,200,000 2,659,250
------------
RETAIL STORES (5.4%)
Price/Costco, Inc.
7.125%, due 6/15/05.................................. 5,000,000 5,218,750
Sears Roebuck & Co.
8.45%, due 11/1/98................................... 7,000,000 7,498,750
------------
12,717,500
------------
TELECOMMUNICATIONS (1.0%)
AT&T Corp.
8.625%, due 12/1/31.................................. 2,000,000 2,292,500
------------
Total Corporate Bonds
(Cost $99,151,184)................................... 106,293,787
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
81
<PAGE>
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
U.S. GOVERNMENT &
FEDERAL AGENCY (48.7%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-------------------------
<S> <C> <C>
FEDERAL NATIONAL MORTGAGE ASSOCIATION (4.2%)
4.95%, due 9/30/98................................. $10,000,000 $ 9,863,300
------------
UNITED STATES TREASURY BONDS (19.1%)
6.875%, due 8/15/25................................ 17,000,000 19,165,290
7.625%, due 2/15/07................................ 10,000,000 11,002,600
7.625%, due 2/15/25................................ 12,000,000 14,660,160
------------
44,828,050
------------
UNITED STATES TREASURY NOTES (25.4%)
5.375%, due 11/30/97............................... 15,000,000 15,046,350
6.50%, due 5/15/05................................. 5,000,000 5,321,000
7.125%, due 2/29/00................................ 10,000,000 10,646,600
7.50%, due 11/15/01................................ 4,300,000 4,739,159
7.50%, due 5/15/02................................. 5,000,000 5,544,600
7.50%, due 2/15/05................................. 5,000,000 5,667,600
8.50%, due 11/15/00................................ 11,200,000 12,676,496
------------
59,641,805
------------
Total U.S. Government &
Federal Agency
(Cost $107,085,052)................................ 114,333,155
------------
Total Long-Term Bonds
(Cost $206,236,236)................................ 220,626,942
------------
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM
INVESTMENTS (4.8%)
PRINCIPAL
AMOUNT VALUE
---------------------------
<S> <C> <C>
COMMERCIAL PAPER (4.8%)
Anheuser-Busch Companies, Inc.
5.85%, due 1/4/96................................. $ 3,000,000 $ 2,998,537
Associates Corp. of North America
5.444%, due on demand (b)......................... 2,235,000 2,235,000
Dupont (E.I.) De Nemours
5.80%, due 1/5/96................................. 2,058,000 2,056,674
Nike Inc.
5.95%, due 1/3/96................................. 4,000,000 3,998,678
------------
Total Short-Term Investments
(Cost $11,288,889)................................ 11,288,889
------------
Total Investments
(Cost $217,525,125) (c)........................... 98.7% 231,915,831(d)
Cash and Other Assets,
Less Liabilities.................................. 1.3 3,114,613
----------- ------------
Net Assets......................................... 100.0% $235,030,444
=========== ============
</TABLE>
- --------
(a) Long-term securities maturing within the subsequent twelve month period.
(b) Adjustable rate. Rate shown is the rate in effect at December 31, 1995.
(c) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(d) At December 31, 1995 net unrealized appreciation was $14,390,706, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $14,479,179 and aggregate gross unrealized depre-
ciation of all investments on which there was an excess of cost over market
value of $88,473.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
82
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
BOND PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $217,525,125)................................. $ 231,915,831
Cash............................................................ 6,695
Receivables:
Interest........................................................ 3,532,379
Fund shares sold................................................ 61,428
NYLIAC.......................................................... 48,271
Other assets.................................................... 583
-------------
Total assets.................................................. 235,565,187
-------------
LIABILITIES:
Payables:
Adviser......................................................... 146,646
Recordkeeping................................................... 130,435
Fund shares redeemed............................................ 89,311
Administrator................................................... 19,764
Directors....................................................... 1,971
Accrued expenses................................................ 146,616
-------------
Total liabilities............................................. 534,743
-------------
Net assets applicable to
outstanding shares............................................. $235,030,444
=============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized.................................. $ 175,142
Additional paid-in capital...................................... 223,209,347
Accumulated undistributed net
investment income.............................................. 3,457
Accumulated net realized loss
on investments................................................. (2,748,208)
Net unrealized appreciation
on investments................................................. 14,390,706
-------------
Net assets applicable to
outstanding shares............................................. $235,030,444
=============
Shares of capital stock outstanding............................. 17,514,191
=============
Net asset value per share outstanding........................... $ 13.42
=============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Interest......................................................... $ 15,866,827
------------
Expenses: (Note 2)
Recordkeeping (Note 3)........................................... 767,438
Advisory (Note 3)................................................ 553,053
Administration (Note 3).......................................... 442,443
Shareholder communication........................................ 149,447
Auditing......................................................... 39,598
Legal............................................................ 19,575
Directors........................................................ 17,362
Portfolio pricing................................................ 9,859
Miscellaneous.................................................... 4,164
------------
Total expenses
before reimbursement.......................................... 2,002,939
Expense reimbursement from
Administrator (Note 3).......................................... (631,367)
------------
Net expenses................................................... 1,371,572
------------
Net investment income............................................ 14,495,255
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 4,716,932
Net change in unrealized depreciation
on investments.................................................. 17,768,492
------------
Net realized and unrealized gain
on investments.................................................. 22,485,424
------------
Net increase in net assets resulting
from operations................................................. $ 36,980,679
============
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
83
<PAGE>
BOND PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
---------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income............................. $ 14,495,255 $ 14,086,182
Net realized gain (loss) on investments........... 4,716,932 (4,481,302)
Net change in unrealized appreciation
(depreciation) on investments.................... 17,768,492 (17,363,837)
------------ ------------
Net increase (decrease) in net assets resulting
from operations.................................. 36,980,679 (7,758,957)
------------ ------------
Dividends to shareholders:
From net investment income........................ (14,491,993) (14,085,987)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares.................. 22,956,887 21,844,680
Net asset value of shares issued to shareholders
in reinvestment of dividends..................... 14,491,993 14,085,987
------------ ------------
37,448,880 35,930,667
Cost of shares redeemed........................... (31,593,131) (36,082,699)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions...................... 5,855,749 (152,032)
------------ ------------
Net increase (decrease) in net assets............ 28,344,435 (21,996,976)
NET ASSETS:
Beginning of year................................. 206,686,009 228,682,985
------------ ------------
End of year....................................... $235,030,444 $206,686,009
============ ============
Accumulated undistributed net investment income... $ 3,457 $ 195
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993 1992 1991
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of year...... $ 12.09 $ 13.43 $ 12.91 $ 12.77 $ 11.86
------------ ------------ ------------ ------------ ------------
Net investment income... 0.88 0.88 0.95 0.92 1.02
Net realized and
unrealized gain (loss)
on investments......... 1.33 (1.34) 0.53 0.13 0.91
------------ ------------ ------------ ------------ ------------
Total from investment
operations............. 2.21 (0.46) 1.48 1.05 1.93
------------ ------------ ------------ ------------ ------------
Less dividends:
From net investment
income................ (0.88) (0.88) (0.96) (0.91) (1.02)
------------ ------------ ------------ ------------ ------------
Net asset value at end
of year................ $ 13.42 $ 12.09 $ 13.43 $ 12.91 $ 12.77
============ ============ ============ ============ ============
Total investment return. 18.31% (3.39%) 11.40% 8.26% 16.27%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 6.55% 6.53% 6.79% 7.54% 8.22%
Net expenses........... 0.62% 0.62%# 0.27%# 0.25% 0.25%
Expenses (before
reimbursement)........ 0.91% 0.67%# 0.27%# 0.25% 0.25%
Portfolio turnover rate. 81% 88% 41% 10% 57%
Net assets at end of
year (in 000's)........ $ 235,030 $ 206,686 $ 228,683 $ 203,947 $ 164,124
</TABLE>
- --------
# At the MFA Series Fund, Inc.'s shareholders meeting on December 14, 1993, the
shareholders voted to have the Bond Portfolio assume certain administrative
and operating expenses of the Fund previously borne by New York Life.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
84
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
COMMON STOCKS (96.3%)+
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
AEROSPACE/DEFENSE (3.0%)
Boeing Co. (The)...................................... 30,000 $ 2,351,250
Lockheed Martin Corp.................................. 61,200 4,834,800
Loral Corp............................................ 164,000 5,801,500
------------
12,987,550
------------
AUTO & AUTO SERVICES (0.4%)
ITT Industries Inc. .................................. 70,000 1,680,000
------------
BANKS (4.3%)
AmSouth Bancorp. ..................................... 62,400 2,519,400
Bank of Boston Corp. ................................. 83,000 3,838,750
Chase Manhattan Corp. (The)........................... 90,000 5,456,250
Commerce Bancshares Inc............................... 74,550 2,851,537
Morgan, J.P. & Co., Inc............................... 47,600 3,819,900
------------
18,485,837
------------
BUILDING &
MAINTENANCE (0.9%)
ADT Ltd. (a).......................................... 250,000 3,750,000
------------
BUILDING PRODUCTS (0.9%)
USG Corp. (a)......................................... 131,200 3,936,000
------------
CHEMICALS (3.9%)
Engelhard Corp........................................ 160,000 3,480,000
IMC Global Inc........................................ 120,000 4,905,000
Sealed Air Corp. (a).................................. 300,000 8,437,500
------------
16,822,500
------------
COMMERCIAL SERVICES (3.3%)
Equifax Inc........................................... 201,800 4,313,475
Primark Corp. (a)..................................... 125,000 3,750,000
Service Corp. International........................... 138,000 6,072,000
------------
14,135,475
------------
COMMUNICATIONS (2.5%)
ADC Telecommunications Inc. (a) 90,000 3,285,000
Allen Group Inc....................................... 150,000 3,356,250
Mobilemedia Corp. (a)................................. 175,000 3,893,750
------------
10,535,000
------------
COMPUTER & BUSINESS EQUIPMENT (9.8%)
Checkfree Corp. (a)................................... 100,000 2,150,000
Cisco Systems Inc. (a)................................ 60,000 4,477,500
Danka Business Systems PLC ADR (b).................... 110,000 4,070,000
First Data Corp....................................... 91,030 6,087,631
FIserv Inc. (a)....................................... 111,000 3,330,000
Gateway 2000 Inc. (a)................................. 100,000 2,450,000
General Motors CL E................................... 125,000 6,500,000
Global Directmail Corp. (a)........................... 100,000 2,750,000
Intel Corp. .......................................... 65,000 3,688,750
Oracle Corp. (a)...................................... 50,000 2,118,750
Quantum Corp. (a)..................................... 105,000 1,693,125
Sungard Data Systems Inc. (a)......................... 100,000 2,850,000
------------
42,165,756
------------
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
DRUGS (8.9%)
Allergan Inc.......................................... 92,400 $ 3,003,000
American Home Products Corp. ......................... 49,500 4,801,500
Elan Corp. Plc ADR (a)(b)............................. 81,000 3,938,625
Johnson & Johnson..................................... 94,400 8,083,000
Merck & Co., Inc...................................... 69,200 4,549,900
Pfizer Inc............................................ 58,800 3,704,400
Schering-Plough Corp. ................................ 116,000 6,351,000
Warner-Lambert Co..................................... 38,700 3,758,738
------------
38,190,163
------------
ELECTRICAL (4.3%)
Emerson Electric Co................................... 70,000 5,722,500
General Electric Co. ................................. 119,000 8,568,000
Mark IV Industries, Inc. ............................. 213,103 4,208,784
------------
18,499,284
------------
ELECTRONICS (3.6%)
Applied Materials, Inc. (a)........................... 59,900 2,358,563
Avnet Inc............................................. 92,800 4,152,800
Hewlett-Packard Co. .................................. 48,700 4,078,625
LSI Logic Corp. (a)................................... 35,000 1,146,250
MEMC Electronic Materials
Inc. (a)............................................. 110,500 3,605,062
------------
15,341,300
------------
FINANCE (6.1%)
Chelsea GCA Realty, Inc. ............................. 96,300 2,889,000
Federal Home Loan
Mortgage Corp. ...................................... 70,000 5,845,000
Federal National
Mortgage Association................................. 40,000 4,965,000
Great Western Financial Corp. ........................ 100,000 2,550,000
Republic New York Corp................................ 100,000 6,212,500
Signet Banking Corp. ................................. 146,900 3,488,875
------------
25,950,375
------------
FOODS (2.1%)
ConAgra, Inc.......................................... 114,100 4,706,625
General Mills, Inc.................................... 75,000 4,331,250
------------
9,037,875
------------
HOSPITAL & MEDICAL SERVICES (4.7%)
Columbia/HCA Healthcare Corp.......................... 120,800 6,130,600
Guidant Corp. ........................................ 105,000 4,436,250
HEALTHSOUTH Corp. (a)................................. 181,400 5,283,275
Sybron International Corp. (a)........................ 186,200 4,422,250
------------
20,272,375
------------
HOUSEHOLD PRODUCTS (2.3%)
Colgate-Palmolive Co. ................................ 65,000 4,566,250
Gillette Co. ......................................... 100,000 5,212,500
------------
9,778,750
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
85
<PAGE>
GROWTH EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
INSURANCE-PROPERTY & CASUALTY (2.5%)
American International Group, Inc. 52,500 $ 4,856,250
Amerin Corp. (a)...................................... 85,000 2,273,750
ITT Hartford Group Inc. (a)........................... 70,000 3,386,250
------------
10,516,250
------------
LEARNING &
EDUCATIONAL (0.7%)
Kinder Care Learning
Centers, Inc. (a).................................... 227,000 2,865,875
------------
LEISURE/AMUSEMENT (0.8%)
Harrah's Entertainment, Inc. (a)...................... 144,900 3,513,825
------------
LODGING &
RESTAURANTS (3.5%)
Bristol Hotel Co. (a)................................. 30,000 731,250
ITT Corp. (New) (a)................................... 70,000 3,710,000
Marriott International, Inc. ......................... 125,000 4,781,250
McDonald's Corp. ..................................... 125,000 5,640,625
------------
14,863,125
------------
MACHINERY/CAPITAL
GOODS (0.6%)
Donaldson Co., Inc.................................... 100,000 2,512,500
------------
MANUFACTURING (2.3%)
AlliedSignal Inc. .................................... 96,000 4,560,000
Honeywell Inc......................................... 105,000 5,105,625
------------
9,665,625
------------
MEDIA & INFORMATION
SERVICES (3.0%)
Heritage Media Corp. CL A (a)......................... 105,000 2,690,625
Viacom Inc. Class B (a)............................... 100,000 4,737,500
Walt Disney Co. (The)................................. 88,800 5,239,200
------------
12,667,325
------------
METALS (1.1%)
Aluminum Co. of America............................... 85,000 4,494,375
------------
OIL & ENERGY SERVICES (6.6%)
Aquila Gas Pipeline Corp. ............................ 107,800 1,387,925
Enron Corp. .......................................... 120,000 4,575,000
Mobil Corp. .......................................... 45,000 5,040,000
Quaker State Corp. ................................... 295,900 3,735,737
Schlumberger Ltd. .................................... 60,750 4,206,938
Smith International, Inc. (a)......................... 180,500 4,241,750
Triton Energy Corp. (a)............................... 80,000 4,590,000
XCL Ltd. (a).......................................... 1,316,800 493,800
------------
28,271,150
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
PAPER & FOREST
PRODUCTS (0.9%)
Bemis Co.............................................. 154,200 $ 3,951,375
------------
REAL ESTATE (0.8%)
Liberty Property Trust................................ 166,500 3,454,875
------------
RETAIL TRADE &
MERCHANDISING (4.4%)
Eckerd Corp. (a)...................................... 65,000 2,900,625
Federated Department Stores,
Inc. (a)............................................. 147,000 4,042,500
Home Depot Inc........................................ 50,000 2,393,750
Price/Costco, Inc. (a)................................ 250,000 3,812,500
Smart & Final, Inc.................................... 163,000 3,463,750
Staples Inc. (a)...................................... 86,300 2,103,563
------------
18,716,688
------------
TRANSPORTATION (3.2%)
Canadian National Railway Co. (a)(c).................. 22,500 337,500
Conrail Inc........................................... 63,500 4,445,000
Consolidated Freightways Inc.......................... 100,000 2,650,000
Rollins Truck Leasing Corp............................ 380,500 4,233,063
UNC Inc. (a).......................................... 300,000 1,800,000
------------
13,465,563
------------
UTILITIES--ELECTRIC (0.9%)
CMS Energy Corp....................................... 135,000 4,033,125
------------
UTILITIES--TELEPHONE (4.0%)
Ameritech Corp. ...................................... 80,000 4,720,000
Midcom Communication Inc. (a)......................... 136,600 2,492,950
Paging Network, Inc. (a).............................. 60,000 1,462,500
Qualcomm Inc. (a)..................................... 90,000 3,870,000
WorldCom Inc. (a)..................................... 130,000 4,582,500
------------
17,127,950
------------
Total Common Stocks
(Cost $337,852,994).................................. 411,687,866
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
86
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
SHORT-TERM
INVESTMENTS (3.7%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------------------------------
<S> <C> <C>
COMMERCIAL PAPER (3.7%)
Amoco Corp.
5.80%, due 1/2/96............................ $ 4,540,000 $ 4,539,268
Associates Corp. of North America
5.44%, due on demand (d)..................... 2,050,000 2,050,000
Nike Corp.
5.95%, due 1/5/96............................ 4,780,000 4,776,840
Raython Co.
5.95%, due 1/4/96............................ 4,500,000 4,497,769
------------
Total Short-Term Investments
(Cost $15,863,877)........................... 15,863,877
------------
Total Investments
(Cost $353,716,871) (f)...................... 100.0% 427,551,743 (g)
Liabilities In Excess of
Cash and Other Assets........................ (0.0)(e) (44,922)
----------- ------------
Net Assets.................................... 100.0% $427,506,821
=========== ============
</TABLE>
- --------
(a) Non-income producing securities.
(b) ADR--American Depository Receipt.
(c) Security purchased, in accordance with the public offering, on an
installment receipt basis. The initial payment was $12.00 per share with an
obligation to pay $7.93 per share on November 16, 1996. If the security is
sold prior to November 16, 1996, the purchaser assumes the obligation.
(d) Adjustable Rate. Rate shown is the rate in effect at December 31, 1995.
(e) Less than one tenth of a percent.
(f) The cost stated also represents the aggregate cost for Federal income tax
purposes.
(g) At December 31, 1995 net unrealized appreciation was $73,834,872, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess of
market value over cost of $83,763,599 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $9,928,727.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
87
<PAGE>
GROWTH EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $353,716,871).................................. $427,551,743
Cash............................................................. 6,534
Receivables:
Dividends and interest........................................... 448,495
Fund shares sold................................................. 280,848
NYLIAC........................................................... 80,948
Other assets..................................................... 971
------------
Total assets................................................... 428,369,539
------------
LIABILITIES:
Payables:
Adviser.......................................................... 262,817
Recordkeeping.................................................... 245,911
Fund shares redeemed............................................. 91,803
Administrator.................................................... 35,851
Directors........................................................ 2,559
Accrued expenses................................................. 223,777
------------
Total liabilities.............................................. 862,718
------------
Net assets applicable to
outstanding shares.............................................. $427,506,821
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
100 million shares authorized................................... $ 248,227
Additional paid-in capital....................................... 353,423,722
Net unrealized appreciation
on investments.................................................. 73,834,872
------------
Net assets applicable to outstanding shares...................... $427,506,821
============
Shares of capital stock outstanding.............................. 24,822,737
============
Net asset value per share outstanding............................ $ 17.22
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 6,132,248
Interest......................................................... 1,109,794
------------
Total income................................................... 7,242,042
------------
Expenses: (Note 2)
Recordkeeping (Note 3)........................................... 1,347,572
Advisory (Note 3)................................................ 950,231
Administration (Note 3).......................................... 760,185
Shareholder communication........................................ 279,150
Auditing......................................................... 59,474
Legal............................................................ 30,782
Directors........................................................ 29,411
Miscellaneous.................................................... 9,851
------------
Total expenses
before reimbursement.......................................... 3,466,656
Expense reimbursement from
Administrator (Note 3).......................................... (1,110,083)
------------
Net expenses................................................... 2,356,573
------------
Net investment income............................................ 4,885,469
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments................................. 34,444,510
Net change in unrealized appreciation
on investments.................................................. 56,914,338
------------
Net realized and unrealized gain
on investments.................................................. 91,358,848
------------
Net increase in net assets resulting
from operations................................................. $ 96,244,317
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$35,609.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
88
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
GROWTH EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income.............................. $ 4,885,469 $ 4,561,447
Net realized gain on investments................... 34,444,510 19,138,882
Net change in unrealized appreciation on
investments....................................... 56,914,338 (19,784,672)
------------ ------------
Net increase in net assets resulting from
operations........................................ 96,244,317 3,915,657
------------ ------------
Dividends and distributions to shareholders:
From net investment income......................... (4,897,272) (4,567,801)
From net realized gain on investments.............. (34,471,675) (19,120,138)
------------ ------------
Total dividends and distributions to
shareholders.................................... (39,368,947) (23,687,939)
------------ ------------
Capital share transactions:
Net proceeds from sale of shares................... 35,852,696 32,631,494
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions.... 39,368,947 23,687,939
------------ ------------
75,221,643 56,319,433
Cost of shares redeemed............................ (34,751,127) (25,581,882)
------------ ------------
Increase in net assets derived from capital share
transactions..................................... 40,470,516 30,737,551
------------ ------------
Net increase in net assets........................ 97,345,886 10,965,269
NET ASSETS:
Beginning of year.................................. 330,160,935 319,195,666
------------ ------------
End of year........................................ $427,506,821 $330,160,935
============ ============
Accumulated undistributed net investment income.... $ -- $ 2,749
============ ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994 1993 1992 1991
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value at
beginning of year...... $ 14.69 $ 15.64 $ 15.53 $ 15.57 $ 13.00
------------ ------------ ------------ ------------ ------------
Net investment income... 0.22 0.22 0.24 0.22 0.27
Net realized and
unrealized gain (loss)
on investments......... 4.06 (0.03) 1.88 1.72 4.10
------------ ------------ ------------ ------------ ------------
Total from investment
operations............. 4.28 0.19 2.12 1.94 4.37
------------ ------------ ------------ ------------ ------------
Less dividends and
distributions:
From net investment
income................ (0.22) (0.22) (0.25) (0.22) (0.29)
From net realized gain
on investments........ (1.53) (0.92) (1.76) (1.76) (1.51)
------------ ------------ ------------ ------------ ------------
Total dividends and
distributions.......... (1.75) (1.14) (2.01) (1.98) (1.80)
------------ ------------ ------------ ------------ ------------
Net asset value at end
of year................ $ 17.22 $ 14.69 $ 15.64 $ 15.53 $ 15.57
============ ============ ============ ============ ============
Total investment return. 29.16% 1.20% 13.71% 12.42% 33.62%
Ratios (to average net
assets)/Supplemental
Data:
Net investment income.. 1.29% 1.41% 1.42% 1.50% 1.78%
Net expenses........... 0.62% 0.62%# 0.27%# 0.27% 0.29%
Expenses (before
reimbursement)........ 0.91% 0.65%# 0.27%# 0.27% 0.29%
Portfolio turnover rate. 104% 108% 121% 82% 100%
Net assets at end of
year (in 000's)........ $ 427,507 $ 330,161 $ 319,196 $ 272,834 $ 204,147
</TABLE>
- --------
# At the MFA Series Fund, Inc.'s shareholders meeting on December 14, 1993, the
shareholders voted to have the Growth Equity Portfolio assume certain admin-
istrative and operating expenses of the Fund previously borne by New York
Life.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
89
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1995
COMMON STOCKS (86.3%)+
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
AIR TRANSPORTATION (0.3%)
AMR Corp. (a)......................................... 1,518 $ 112,712
Delta Air Lines, Inc.................................. 1,011 74,688
Pittston Services Group............................... 868 27,234
Southwest Airlines Co................................. 2,922 67,936
USAir Group, Inc. (a)................................. 1,138 15,078
------------
297,648
------------
AIRCRAFT (1.3%)
Boeing Company (The).................................. 6,704 525,426
Lockheed Martin Corp.................................. 3,926 310,154
McDonnell Douglas Corp................................ 2,261 208,012
Northrop Grumman Corp................................. 1,006 64,384
United Technologies Corp.............................. 2,414 229,028
------------
1,337,004
------------
ALUMINUM (0.4%)
Alcan Aluminum Limited................................ 4,532 141,059
Aluminum Co. of America............................... 3,526 186,437
Reynolds Metals Company............................... 1,245 70,498
------------
397,994
------------
APPAREL (0.4%)
Brown Group, Inc...................................... 382 5,444
Fruit Of The Loom Inc. Class A (a) 1,538 37,489
Liz Claiborne, Inc.................................... 1,534 42,568
Nike, Inc............................................. 2,832 197,178
Reebok International Ltd.............................. 1,549 43,759
Russell Corp.......................................... 866 24,031
Stride Rite Corp...................................... 1,012 7,590
VF Corp............................................... 1,257 66,307
------------
424,366
------------
BANKS (5.5%)
Banc One Corp......................................... 7,823 295,318
Bank of Boston Corp................................... 2,226 102,952
Bank of New York Company, Inc. (The).................. 3,788 184,665
BankAmerica Corp...................................... 7,382 477,984
Bankers Trust New York Corp........................... 1,536 102,144
Barnett Banks, Inc.................................... 1,912 112,808
Boatmen's Bancshares, Inc............................. 2,540 103,822
Chase Manhattan Corp. (The)........................... 3,433 208,126
Chemical Banking Corp................................. 5,030 295,512
Citicorp.............................................. 7,866 528,988
Comerica Inc.......................................... 2,200 88,275
CoreStates Financial Corp............................. 2,747 104,043
First Bank System, Inc................................ 2,700 133,987
First Chicago Corp.................................... 6,344 250,588
First Fidelity Bancorp................................ 1,623 122,334
First Interstate Bancorp.............................. 1,528 208,572
First Union Corp...................................... 3,494 194,354
Fleet Financial Group, Inc............................ 5,039 205,339
KeyCorp............................................... 4,534 164,358
MBNA Corp............................................. 2,975 109,703
Mellon Bank Corp...................................... 2,990 160,713
</TABLE>
- --------
+ Percentages indicated are based on Fund net assets.
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
BANKS (Continued)
Morgan (J.P.) & Company, Inc.......................... 3,693 $ 296,363
NationsBank Corp...................................... 5,299 368,943
Norwest Corp.......................................... 6,465 213,345
PNC Bank Corp......................................... 4,562 147,125
Republic New York Corp................................ 1,125 69,891
Suntrust Banks, Inc................................... 2,299 157,482
U.S. Bancorp (Portland, OR)........................... 2,019 67,889
Wachovia Corp......................................... 3,484 159,393
Wells Fargo & Company................................. 926 200,016
------------
5,835,032
------------
BEVERAGES (3.2%)
Anheuser-Busch Companies, Inc......................... 5,116 342,133
Brown-Forman Corp..................................... 1,413 51,574
Coca-Cola Company (The)............................... 24,764 1,838,727
Coors (Adolph) Co..................................... 748 16,550
PepsiCo, Inc.......................................... 15,490 865,504
Seagram Company Ltd................................... 7,334 253,939
------------
3,368,427
------------
BROADCASTING (1.2%)
Capital Cities/ABC, Inc............................... 3,021 372,716
Comcast Corp. Class A................................. 4,757 86,518
Tele-Communications TCI Group, Class A (a)............ 12,935 257,083
Tellabs, Inc. (a)..................................... 1,738 64,306
U.S. West Media Group (a)............................. 9,313 176,947
Viacom Inc. Class B (a)............................... 7,150 338,731
------------
1,296,301
------------
BUSINESS EQUIPMENT & SERVICES (1.4%)
Block (H & R), Inc.................................... 2,042 82,701
Browning-Ferris Industries, Inc....................... 4,165 122,867
Ceridian Corp. (a).................................... 1,291 53,254
Deluxe Corp........................................... 1,642 47,618
Donnelley (R.R.) &
Sons Company......................................... 3,052 120,173
Dun & Bradstreet Corp. (The).......................... 3,420 221,445
Federal Express Corp. (a)............................. 1,127 83,257
Harland (John H.) Co. (The)........................... 629 13,130
Interpublic Group of Cos., Inc........................ 1,517 65,800
Moore Corp. Ltd....................................... 2,006 37,362
National Service Industries, Inc...................... 1,011 32,731
Ogden Corp............................................ 990 21,161
Pitney Bowes Inc...................................... 3,055 143,585
Ryder System, Inc..................................... 1,521 37,645
Safety-Kleen Corp..................................... 1,135 17,734
Service Corp. International........................... 1,958 86,152
WMX Technologies, Inc................................. 9,609 287,069
------------
1,473,684
------------
CAPITAL EQUIPMENT (0.8%)
Caterpillar Inc....................................... 4,049 237,879
Cincinnati Milacron Inc............................... 632 16,590
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
90
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
CAPITAL EQUIPMENT (Continued)
Cummins Engine Company, Inc........................... 875 $ 32,375
Fluor Corp............................................ 1,639 108,174
Foster Wheeler Corp................................... 639 27,157
General Signal Corp................................... 998 32,310
Giddings & Lewis Inc.................................. 635 10,478
Harnischfeger Industries, Inc......................... 920 30,590
Illinois Tool Works Inc............................... 2,262 133,458
Ingersoll-Rand Company................................ 2,137 75,062
Paccar Inc............................................ 808 34,037
Parker Hannifin Corp.................................. 1,508 51,649
Snap-On, Inc.......................................... 889 40,227
Timken Company (The).................................. 624 23,868
Trinova Corp.......................................... 517 14,799
------------
868,653
------------
CHEMICALS--PETROLEUM (1.8%)
Dow Chemical Company (The)............................ 5,342 375,943
Du Pont (E.I.) De
Nemours & Company.................................... 11,038 771,280
Goodrich (B.F.) Company............................... 508 34,607
Grace (W.R.) & Co..................................... 1,883 111,332
Hercules Inc.......................................... 2,340 131,918
Monsanto Company...................................... 2,281 279,423
Rohm & Haas Company................................... 1,379 88,773
Union Carbide Corp.................................... 2,709 101,588
------------
1,894,864
------------
CHEMICALS--SPECIALTY (0.8%)
Air Products & Chemicals, Inc......................... 2,164 114,151
Avery Dennison Corp................................... 1,035 51,879
Eastman Chemical Co................................... 1,640 102,705
Ecolab, Inc........................................... 1,252 37,560
Engelhard Corp........................................ 2,925 63,619
Great Lakes Chemical Corp. ........................... 1,306 94,032
Morton International, Inc............................. 3,021 108,378
Nalco Chemical Company................................ 1,399 42,145
Pall Corp............................................. 2,271 61,033
Praxair, Inc.......................................... 2,656 89,308
Sigma-Aldrich Corp.................................... 1,011 50,045
------------
814,855
------------
COMMUNICATIONS
EQUIPMENT (0.5%)
Andrew Corp. (a)...................................... 814 31,136
DSC Communications Corp. (a).......................... 2,209 81,457
General Dynamics Corp................................. 1,252 74,024
Harris Corp........................................... 865 47,251
Northern Telecom Limited.............................. 5,041 216,763
Scientific-Atlanta, Inc............................... 1,502 22,530
------------
473,161
------------
COMPUTERS--MAIN &
MINI (2.8%)
Amdahl Corp. (a)...................................... 2,379 20,222
Cisco Systems, Inc. (a)............................... 5,376 401,184
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
COMPUTERS--MAIN &
MINI (Continued)
Cray Research, Inc. (a)............................... 509 $ 12,598
Data General Corp. (a)................................ 739 10,161
Digital Equipment Corp. (a)........................... 2,971 190,515
Hewlett-Packard Company............................... 10,003 837,751
Honeywell Inc......................................... 2,552 124,091
International Business
Machines Corp........................................ 11,178 1,025,582
Tandem Computers Inc. (a)............................. 2,264 24,055
Unisys Corp. (a)...................................... 3,397 19,108
Xerox Corp............................................ 2,121 290,577
------------
2,955,844
------------
COMPUTERS--MICRO (0.5%)
Apple Computer Inc.................................... 2,392 76,245
Compaq Computer Corp. (a)............................. 5,241 251,568
Sun Microsystems Inc. (a)............................. 3,836 175,017
------------
502,830
------------
COMPUTERS--
PERIPHERALS (2.3%)
Autodesk, Inc......................................... 1,003 34,353
Cabletron Systems, Inc. (a)........................... 1,438 116,478
Computer Associates
International Inc.................................... 4,765 271,009
First Data Corp....................................... 4,463 298,463
Intergraph Corp. (a).................................. 899 14,159
Microsoft Corp. (a)................................... 11,481 1,007,458
Novell Inc. (a)....................................... 7,296 103,968
Oracle Corp. (a)...................................... 8,579 363,535
Silicon Graphics, Inc. (a)............................ 3,175 87,313
3Com Corp. (a)........................................ 3,100 144,537
------------
2,441,273
------------
CONSTRUCTION
MATERIALS (0.4%)
Black & Decker Corp................................... 1,643 57,916
Crane Co.............................................. 622 22,936
PPG Industries Inc.................................... 4,083 186,797
Sherwin-Williams Company.............................. 1,654 67,401
Stanley Works (The)................................... 895 46,092
------------
381,142
------------
CONSUMER
ELECTRONICS (0.0%) (b)
Zenith Electronics Corp. (a).......................... 444 3,053
------------
CONSUMER SERVICES (0.1%)
CUC International Inc. (a)............................ 3,488 119,028
------------
CONTAINERS (0.1%)
Ball Corp............................................. 618 16,995
Bemis Company, Inc.................................... 1,014 25,984
Crown Cork & Seal
Company, Inc. (a).................................... 1,760 73,480
------------
116,459
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
91
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
COSMETICS &
TOILETRIES (0.6%)
Alberto-Culver Company................................ 516 $ 17,737
Avon Products, Inc.................................... 1,306 98,440
Gillette Company...................................... 8,829 460,212
International Flavors &
Fragrances, Inc. .................................... 2,149 103,152
------------
679,541
------------
DEFENSE (0.6%)
EG & G, Inc........................................... 1,028 24,929
Loral Corp............................................ 3,256 115,181
Raytheon Company...................................... 4,920 232,470
Rockwell International Corp........................... 4,303 227,521
------------
600,101
------------
ELECTRICAL
COMPONENTS (0.1%)
LSI Logic Corp. (a)................................... 2,600 85,150
------------
ELECTRICAL
EQUIPMENT (3.1%)
Cooper Industries, Inc. .............................. 2,167 79,637
Dover Corp. .......................................... 2,266 83,558
Emerson Electric Co................................... 4,433 362,398
General Electric Company.............................. 33,263 2,394,936
Grainger (W.W.), Inc. ................................ 1,015 67,244
Johnson Controls, Inc. ............................... 765 52,594
Tyco International Ltd................................ 3,024 107,730
Westinghouse Electric Corp. .......................... 7,752 127,908
------------
3,276,005
------------
ELECTRONIC
COMPONENTS (2.3%)
Advanced Micro Devices, Inc. (a)...................... 2,083 34,369
AMP Inc. ............................................. 4,172 160,100
Applied Materials, Inc. (a)........................... 3,476 136,867
Intel Corp. .......................................... 16,145 916,229
Micron Technology Inc................................. 4,100 162,463
Motorola, Inc......................................... 11,720 668,040
National Semiconductor Corp. (a) 2,483 55,247
Raychem Corp. ........................................ 873 49,652
Teledyne, Inc. (a).................................... 1,129 28,931
Texas Instruments, Inc................................ 3,740 193,545
Thomas & Betts Corp. ................................. 388 28,615
------------
2,434,058
------------
ELECTRONIC
INSTRUMENTS (0.1%)
Perkin-Elmer Corp. (The).............................. 891 33,635
Tektronix, Inc........................................ 623 30,605
------------
64,240
------------
ENVIRONMENTAL
CONTROL (0.1%)
Laidlaw, Inc. Class B................................. 5,538 56,765
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
FARM MACHINERY (0.2%)
Deere & Company....................................... 5,217 $ 183,899
Navistar International Corp. (a)...................... 1,526 16,023
Varity Corp. (a)...................................... 865 32,113
------------
232,035
------------
FINANCE COMPANIES (0.6%)
Beneficial Corp....................................... 1,017 47,417
Household International Inc........................... 1,997 118,073
National City Corp.................................... 2,975 98,547
Travelers Group Inc................................... 6,293 395,672
------------
659,709
------------
FOOD & RELATED (2.4%)
Archer Daniels Midland Company........................ 10,733 193,194
Campbell Soup Company................................. 4,941 296,460
ConAgra, Inc.......................................... 4,938 203,693
CPC International, Inc. .............................. 2,917 200,179
Fleming Companies, Inc. .............................. 744 15,345
General Mills, Inc. .................................. 3,166 182,837
Heinz (H.J.) Company.................................. 7,249 240,123
Hershey Foods Corp.................................... 1,559 101,335
Kellogg Company....................................... 4,265 329,471
Quaker Oats Company................................... 2,685 92,632
Ralston Purina Group.................................. 2,027 126,434
Sara Lee Corp......................................... 9,593 305,777
SuperValu Inc......................................... 1,406 44,289
Sysco Corp............................................ 3,568 115,960
Wrigley (Wm.) Jr. Company............................. 2,275 119,437
------------
2,567,166
------------
FOOD PROCESSING (0.1%)
Pioneer Hi-Bred
International, Inc. ................................ 1,691 94,062
------------
FOREST & PAPER
PRODUCTS (1.4%)
Boise Cascade Corp. .................................. 958 33,171
Champion International Corp. ......................... 1,884 79,128
Crown Vantage, Inc. (a)............................... 163 2,323
Federal Paper Board
Company, Inc. ...................................... 872 45,235
Georgia-Pacific Corp. ................................ 1,773 121,672
International Paper Company........................... 5,018 190,057
James River Corp. of Virginia......................... 1,637 39,493
Kimberly-Clark Corp. ................................. 5,128 424,347
Louisiana-Pacific Corp................................ 2,150 52,137
Mead Corp............................................. 1,139 59,513
Potlatch Corp. ....................................... 518 20,720
Stone Container Corp. ................................ 1,849 26,579
Temple-Inland Inc. ................................... 1,129 49,817
Union Camp Corp. ..................................... 1,386 66,008
Westvaco Corp......................................... 2,065 57,304
Weyerhaeuser Company.................................. 4,051 175,206
Willamette Industries, Inc............................ 1,125 63,281
------------
1,505,991
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
92
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
FURNITURE &
FURNISHINGS (0.3%)
Armstrong World Industries, Inc....................... 745 $ 46,190
Masco Corp............................................ 3,132 98,267
Newell Co............................................. 3,157 81,687
Owens-Corning Fiberglas Corp. (a) 990 44,426
------------
270,570
------------
GOLD & PRECIOUS
METALS (0.2%)
Echo Bay Mines Ltd.................................... 2,159 22,400
Homestake Mining Company.............................. 2,666 41,656
Placer Dome Inc....................................... 4,675 112,784
------------
176,840
------------
HEALTH CARE--DRUGS (4.5%)
Abbott Laboratories................................... 15,709 655,851
Allergan Inc.......................................... 1,257 40,852
Alza Corp. (a)........................................ 1,629 40,318
Amgen Inc. (a)........................................ 5,313 315,459
Baxter International Inc.............................. 5,562 232,909
Lilly (Eli) & Company................................. 10,802 607,612
Merck & Co., Inc...................................... 24,286 1,596,805
Millipore Corp........................................ 831 34,175
Pfizer Inc............................................ 12,517 788,571
Schering-Plough Corp.................................. 7,391 404,657
------------
4,717,209
------------
HEALTH CARE--GENERAL (3.3%)
American Home Products Corp........................... 6,073 589,081
Bausch & Lomb Inc..................................... 1,140 45,173
Becton, Dickinson & Company........................... 1,314 98,550
Biomet Inc. (a)....................................... 2,270 40,576
Bristol-Myers Squibb Company.......................... 9,920 851,880
Johnson & Johnson..................................... 12,780 1,094,288
Mallinckrodt Group, Inc............................... 1,523 55,399
Pharmacia & Upjohn, Inc............................... 10,459 405,286
St. Jude Medical, Inc. (a)............................ 1,351 58,093
Warner-Lambert Company................................ 2,657 258,061
------------
3,496,387
------------
HOMEBUILDERS, MOBILE
HOMES (0.1%)
Centex Corp........................................... 526 18,279
Fleetwood Enterprises, Inc............................ 897 23,098
Kaufman & Broad Home Corp............................. 632 9,401
Pulte Corp............................................ 513 17,249
------------
68,027
------------
HOSPITAL SUPPLY &
MANAGEMENT (1.0%)
Bard (C.R.), Inc...................................... 1,018 32,831
Beverly Enterprises, Inc. (a)......................... 1,830 19,444
Columbia/HCA Healthcare Corp.......................... 8,818 447,513
Community Psychiatric Centers (a) 889 10,890
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
HOSPITAL SUPPLY &
MANAGEMENT (Continued)
Humana Inc. (a)....................................... 2,700 $ 73,913
Manor Care, Inc....................................... 1,243 43,505
Medtronic, Inc........................................ 4,552 254,343
Shared Medical Systems Corp........................... 499 27,133
Tenet Healthcare Corp. (a)............................ 4,008 83,166
United States Surgical Corp........................... 1,131 24,175
------------
1,016,913
------------
HOTELS & GAMING (0.2%)
Bally Entertainment Corp. (a)......................... 999 13,986
Harrah's Entertainment, Inc. (a)...................... 2,050 49,713
Hilton Hotels Corp.................................... 1,004 61,746
Marriott International, Inc........................... 2,477 94,745
------------
220,190
------------
HOUSEHOLD--GENERAL
PRODUCTS (2.1%)
American Greetings Corp............................... 1,500 41,437
Clorox Company (The).................................. 1,023 73,272
Colgate-Palmolive Company............................. 2,842 199,651
Corning Inc........................................... 4,570 146,240
Jostens, Inc.......................................... 896 21,728
Premark International, Inc............................ 1,253 63,433
Procter & Gamble Company (The) 13,627 1,131,041
Rubbermaid, Inc....................................... 3,170 80,835
Unilever, N.V......................................... 3,164 445,333
------------
2,202,970
------------
HOUSEHOLD--MAJOR
APPLIANCES (0.1%)
Briggs & Stratton Corp................................ 635 27,543
Maytag Corp........................................... 2,144 43,416
Whirlpool Corp........................................ 1,495 79,609
------------
150,568
------------
INSURANCE--LIFE (1.0%)
American General Corp................................. 4,083 142,395
Jefferson-Pilot Corp.................................. 1,365 63,472
Loews Corp............................................ 2,250 176,344
Providian Corp........................................ 1,903 77,547
Torchmark Corp........................................ 1,411 63,848
United Healthcare Corp................................ 3,151 146,522
U.S. Healthcare, Inc.................................. 3,483 228,136
UNUM Corp............................................. 1,468 80,740
USLIFE Corp........................................... 750 22,406
------------
1,001,410
------------
INSURANCE--PROPERTY &
CASUALTY (2.4%)
Aetna Life & Casualty Company......................... 2,258 156,366
Allstate Corp. (The).................................. 8,941 367,699
American International Group, Inc. 9,326 862,655
Chubb Corp. (The)..................................... 1,756 169,893
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
93
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
INSURANCE--PROPERTY &
CASUALTY (Continued)
CIGNA Corp............................................ 1,409 $ 145,479
General Re Corp. ..................................... 1,643 254,665
ITT Hartford Group, Inc. (a).......................... 2,278 110,198
Lincoln National Corp. ............................... 2,102 112,982
SAFECO Corp. ......................................... 2,502 86,319
St. Paul Companies, Inc. (The)........................ 1,633 90,836
Transamerica Corp. ................................... 1,315 95,831
USF&G Corp............................................ 1,961 33,092
------------
2,486,015
------------
LEISURE TIME INDUSTRY (0.8%)
Brunswick Corp. ...................................... 1,892 45,408
Handleman Co. ........................................ 633 3,640
Hasbro Inc............................................ 1,656 51,336
Mattel, Inc........................................... 4,491 138,098
Outboard Marine Corp. ................................ 389 7,926
Walt Disney Company (The)............................. 10,293 607,287
------------
853,695
------------
MEDICAL SUPPLIES (0.1%)
Boston Scientific Corp. (a)........................... 2,975 145,775
------------
METALS--DIVERSIFIED (0.1%)
Freeport-McMoRan Copper &
Gold Inc............................................. 4,000 112,500
------------
MINING (0.5%)
Asarco, Inc. ......................................... 869 27,808
Barrick Gold Corp. ................................... 7,070 186,471
Cyprus Amax Minerals Co. ............................. 1,936 50,578
INCO Limited.......................................... 2,376 79,002
Nacco Industries, Inc. ............................... 128 7,104
Newmont Mining Corp................................... 1,741 78,780
Phelps Dodge Corp..................................... 1,403 87,337
Santa Fe Pacific Gold Corp. .......................... 2,582 31,307
------------
548,387
------------
MOTION PICTURES (0.0%) (b)
King World Productions, Inc. (a)...................... 645 25,074
------------
MOTOR VEHICLE PARTS (0.3%)
Dana Corp............................................. 2,008 58,734
Eaton Corp............................................ 1,497 80,276
Echlin Inc............................................ 1,137 41,501
Genuine Parts Company................................. 2,511 102,951
------------
283,462
------------
MOTOR VEHICLES (1.7%)
Chrysler Corp......................................... 7,553 418,247
Ford Motor Company.................................... 21,319 618,251
General Motors Corp................................... 14,817 783,449
------------
1,819,947
------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
MULTIPLE INDUSTRY (1.4%)
Alco Standard Corp.................................... 2,230 $ 101,744
AlliedSignal, Inc..................................... 5,672 269,420
Dial Corp. (The)...................................... 1,899 56,258
FMC Corp. (a)......................................... 741 50,110
Harcourt General, Inc. ............................... 1,424 59,630
ITT Corp. (New) (a)................................... 2,278 120,734
ITT Industries, Inc................................... 2,278 54,672
Minnesota Mining &
Manufacturing Company................................ 8,282 548,682
Textron Inc........................................... 1,658 111,915
TRW Inc............................................... 1,270 98,425
Whitman Corp.......................................... 2,041 47,453
------------
1,519,043
------------
PETROLEUM--DOMESTIC (2.2%)
Amerada Hess Corp..................................... 1,885 99,905
Amoco Corp............................................ 9,856 708,400
Ashland Inc........................................... 1,143 40,148
Atlantic Richfield Company............................ 3,163 350,302
Burlington Resources, Inc. ........................... 2,486 97,575
Coastal Corp.......................................... 2,036 75,841
Kerr-McGee Corp....................................... 1,012 64,262
Louisiana Land & Exploration
Company (The)........................................ 625 26,797
Noram Energy Corp..................................... 2,505 22,232
Occidental Petroleum Corp............................. 6,277 134,171
Oryx Energy Company (a)............................... 2,098 28,061
Pennzoil Company...................................... 976 41,236
Phillips Petroleum Company............................ 5,174 176,563
Santa Fe Energy Resources, Inc. (a) 1,763 16,969
Sun Company, Inc. .................................... 1,530 41,884
Tenneco, Inc.......................................... 3,606 178,947
Unocal Corp........................................... 4,800 139,800
USX-Marathon Group.................................... 5,992 116,844
------------
2,359,937
------------
PETROLEUM--
INTERNATIONAL (5.1%)
Chevron Corp.......................................... 12,901 677,303
Exxon Corp............................................ 24,434 1,957,774
Mobil Corp. .......................................... 7,740 866,880
Royal Dutch Petroleum Company......................... 10,520 1,484,635
Texaco Inc............................................ 5,067 397,760
------------
5,384,352
------------
PETROLEUM--SERVICES (0.7%)
Baker Hughes Inc...................................... 2,773 67,592
Dresser Industries, Inc............................... 3,571 87,043
Halliburton Company................................... 2,266 114,716
Helmerich & Payne, Inc. .............................. 505 15,024
McDermott International, Inc. ........................ 1,019 22,418
Rowan Companies, Inc. (a)............................. 1,644 16,235
Schlumberger Limited.................................. 4,804 332,677
Western Atlas, Inc. (a)............................... 1,093 55,196
------------
710,901
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
94
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
PHOTOGRAPHIC
EQUIPMENT (0.5%)
Eastman Kodak Company................................. 6,673 $ 447,091
Polaroid Corp......................................... 900 42,637
------------
489,728
------------
PUBLISHING (0.9%)
Dow Jones & Company, Inc.............................. 2,021 80,587
Gannett Company, Inc. ................................ 2,795 171,543
Knight-Ridder Inc..................................... 1,024 64,000
McGraw-Hill Companies, Inc. .......................... 1,009 87,909
Meredith Corp......................................... 531 22,235
New York Times Company (The).......................... 1,988 58,895
Time Warner, Inc...................................... 7,556 286,184
Times Mirror Company.................................. 2,225 75,372
Tribune Company....................................... 1,276 77,996
------------
924,721
------------
RAILROAD (0.9%)
Burlington Northern Santa
Fe Corp.............................................. 2,811 219,258
Conrail, Inc.......................................... 1,531 107,170
CSX Corp. ............................................ 4,070 185,694
Norfolk Southern Corp. ............................... 2,568 203,835
Union Pacific Corp.................................... 4,044 266,904
------------
982,861
------------
RESTAURANTS (0.7%)
Darden Restaurants, Inc. (a).......................... 3,166 37,596
Luby's Cafeterias, Inc................................ 511 11,370
McDonald's Corp. ..................................... 13,648 615,866
Ryan's Family Steak Houses, Inc. (a) 1,021 7,147
Shoney's, Inc. (a).................................... 867 8,887
Wendy's International, Inc. .......................... 2,020 42,925
------------
723,791
------------
RETAIL--FOOD STORES (0.7%)
Albertson's, Inc...................................... 5,064 166,479
American Stores Co.................................... 3,007 80,437
Bruno's, Inc.......................................... 33 355
Giant Food, Inc....................................... 1,141 35,942
Great Atlantic & Pacific Tea Company, Inc. .......... 748 17,204
Kroger Company (The) (a).............................. 2,445 91,687
Longs Drug Stores Corp................................ 393 18,815
Rite Aid Corp......................................... 1,653 56,615
Walgreen Company...................................... 5,015 149,823
Winn-Dixie Stores, Inc. .............................. 3,032 111,805
------------
729,162
------------
RETAIL--GENERAL
MERCHANDISE (2.2%)
Dayton Hudson Corp.................................... 1,405 105,375
Dillard Department Stores, Inc........................ 2,163 61,645
Federated Department Stores, Inc. .................... 4,100 112,750
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
------------------------
<S> <C> <C>
RETAIL--GENERAL
MERCHANDISE (Continued)
Kmart Corp. .......................................... 9,102 $ 65,989
May Department Stores Company......................... 5,019 212,053
Mercantile Stores Company, Inc........................ 743 34,364
Nordstrom, Inc. ...................................... 1,639 66,380
Penney (J.C.) Company, Inc............................ 4,466 212,693
Price/Costco, Inc. (a)................................ 3,929 59,917
Sears, Roebuck & Company.............................. 7,760 302,640
TJX Companies, Inc. (The)............................. 1,412 26,652
Wal-Mart Stores, Inc. ................................ 45,116 1,009,471
Woolworth Corp........................................ 2,648 34,424
------------
2,304,353
------------
RETAIL--SPECIALTY
STORES (1.1%)
Charming Shoppes, Inc. ............................... 2,030 5,836
Circuit City Stores, Inc. ............................ 1,895 52,349
Gap, Inc. (The)....................................... 2,901 121,842
Home Depot, Inc. (The)................................ 9,395 449,786
Limited, Inc. (The)................................... 7,093 123,241
Lowe's Companies, Inc................................. 3,136 105,056
Melville Corp. ....................................... 2,038 62,669
Pep Boys-Manny, Moe & Jack............................ 1,146 29,366
Tandy Corp............................................ 1,266 52,539
Toys "R" Us (a)....................................... 5,493 119,473
------------
1,122,157
------------
SAVINGS & LOANS (1.1%)
Ahmanson (H.F.) & Company............................. 2,389 63,309
Federal Home Loan Mortgage Corp. .................... 3,539 295,507
Federal National Mortgage Association................. 5,339 662,703
Golden West Financial Corp. .......................... 1,150 63,537
Great Western Financial Corp. ........................ 2,650 67,575
------------
1,152,631
------------
SECURITY & COMMISSION BROKERS (1.0%)
Alexander & Alexander
Services, Inc. ...................................... 873 16,587
American Express Company.............................. 9,618 397,945
Dean Witter Discover & Company 3,416 160,552
Marsh & McLennan
Companies, Inc....................................... 1,412 125,315
Merrill Lynch & Co., Inc. ............................ 3,532 180,132
Morgan Stanley Group Inc. ............................ 1,500 120,937
Salomon Inc. ......................................... 2,145 76,148
------------
1,077,616
------------
STEEL (0.2%)
Armco Inc. (a)........................................ 2,134 12,537
Bethlehem Steel Corp. (a)............................. 2,208 30,912
Inland Steel Industries, Inc. (a)..................... 965 24,246
Nucor Corp. .......................................... 1,670 95,399
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
95
<PAGE>
INDEXED EQUITY PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995
COMMON STOCKS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
STEEL (Continued)
USX-U.S. Steel Group Inc. ............................ 1,494 $ 45,941
Worthington Industries, Inc. ......................... 1,827 38,024
------------
247,059
------------
TEXTILE (0.0%) (b)
Springs Industries, Inc. ............................. 383 15,847
------------
TIMESHARING &
SOFTWARE (0.3%)
Automatic Data Processing, Inc. ...................... 2,791 207,232
Computer Sciences Corp. (a)........................... 1,123 78,890
------------
286,122
------------
TIRE & RUBBER
PRODUCTS (0.2%)
Cooper Tire & Rubber Company.......................... 1,642 40,434
Goodyear Tire & Rubber Company 3,013 136,715
------------
177,149
------------
TOBACCO (1.7%)
American Brands, Inc. ................................ 3,721 166,050
Philip Morris Companies, Inc. ........................ 16,540 1,496,870
Schweitzer-Mauduit
International, Inc. (a).............................. 316 7,308
UST Inc. ............................................. 3,950 131,831
------------
1,802,059
------------
TRUCKING & SHIPPING (0.1%)
Consolidated Freightways, Inc. ....................... 852 22,578
Roadway Services, Inc. ............................... 863 42,179
Yellow Corp. ......................................... 516 6,386
------------
71,143
------------
UTILITIES--ELECTRIC (3.2%)
American Electric Power
Company, Inc. ....................................... 3,668 148,554
Baltimore Gas & Electric Company 3,004 85,614
Carolina Power & Light Company 3,065 105,743
Central & South West Corp. ........................... 3,782 105,422
CINergy Corp. ........................................ 3,102 94,999
Consolidated Edison Company of
New York............................................. 4,665 149,280
Detroit Edison Company................................ 2,909 100,360
Dominion Resources Inc. .............................. 3,497 144,251
Duke Power Company.................................... 4,043 191,537
Entergy Corp. ........................................ 4,542 132,853
FPL Group, Inc. ...................................... 3,661 169,778
General Public Utilities Corp. ....................... 2,250 76,500
Houston Industries Inc. .............................. 5,286 128,186
Niagara Mohawk Power Corp. ........................... 2,894 27,855
Northern States Power Company......................... 1,375 67,547
Ohio Edison Company................................... 3,026 71,111
Pacific Gas & Electric Company........................ 8,580 243,458
PacifiCorp ........................................... 5,651 120,084
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
-------------------------
<S> <C> <C>
UTILITIES--ELECTRIC (Continued)
Peco Energy Company................................ 4,422 $ 133,213
PP&L Resources, Inc. .............................. 3,000 75,000
Public Service Enterprise Group Inc. 4,806 147,184
SCEcorp. .......................................... 8,848 157,052
Southern Company (The)............................. 13,256 326,429
Texas Utilities Company............................ 4,529 186,255
Unicom Corp. ...................................... 4,186 137,092
Union Electric Company............................. 2,029 84,711
------------
3,410,068
------------
UTILITIES--GAS & PIPELINE (0.7%)
Columbia Gas System, Inc. (a)...................... 1,013 44,445
Consolidated Natural Gas Company 1,885 85,532
Eastern Enterprises................................ 396 13,959
Enron Corp. ....................................... 5,010 191,006
Enserch Corp. ..................................... 1,376 22,360
Nicor Inc. ........................................ 1,024 28,160
Oneok, Inc. ....................................... 511 11,689
Pacific Enterprises................................ 1,639 46,302
Panhandle Eastern Corp. ........................... 3,008 83,848
Peoples Energy Corp. .............................. 637 20,225
Sonat Inc. ........................................ 1,668 59,423
Williams Companies, Inc. (The)..................... 2,032 89,154
------------
696,103
------------
UTILITIES--TELEPHONE (7.3%)
Airtouch Communications (a)........................ 9,769 275,974
Alltel Corp. ...................................... 3,688 108,796
Ameritech Corp. ................................... 10,964 646,876
AT&T Corp. ........................................ 31,171 2,018,322
Bell Atlantic Corp. ............................... 8,696 581,545
BellSouth Corp. ................................... 19,704 857,124
GTE Corp. ......................................... 19,032 837,408
MCI Communications Corp. .......................... 13,460 351,643
NYNEX Corp. ....................................... 8,414 454,356
Pacific Telesis Group.............................. 8,413 282,887
SBC Communications, Inc. .......................... 12,104 695,980
Sprint Corp. ...................................... 6,912 275,616
US West, Inc. ..................................... 9,313 332,940
------------
7,719,467
------------
Total Common Stocks
(Cost $71,303,356)................................ 90,758,650 (c)
------------
PREFERRED STOCK (0.0%) (B)
ELECTRONIC
COMPONENTS (0.0%) (b)
Teledyne, Inc.
$1.20, Series E................................... 29 417
------------
Total Preferred Stock
(Cost $427)....................................... 417
------------
</TABLE>
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
96
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
SHORT-TERM
INVESTMENTS (13.4%)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
-----------------------------------
<S> <C> <C>
COMMERCIAL PAPER (6.4%)
American Honda Finance
Corp. 5.83%, due
1/12/96................. $ 700,000 $ 698,753
Banco Itau S.A., Cayman
Islands
5.95%, due 1/22/96...... 370,000 368,716
Dic Americas, Inc.
6.00%, due 1/26/96...... 790,000 786,709
Dynamic Funding Corp.
6.00%, due 2/2/96....... 200,000 198,933
6.05%, due 1/4/96....... 408,000 407,537
6.05%, due 1/17/96...... 300,000 299,193
Epson America Inc.
6.05%, due 1/4/96....... 1,140,000 1,139,425
Industrial Funding Corp.
5.83%, due 1/10/96...... 330,000 329,519
Iris Partners, L.P.
6.00%, due 1/18/96...... 295,000 294,164
6.03%, due 1/12/96...... 415,000 414,235
Mitsubishi Bank, Limited
5.85%, due 1/18/96...... 270,000 269,254
Shinhan Bank
5.90%, due 1/22/96...... 1,475,000 1,469,880
------------
Total Commercial Paper
(Cost $6,676,318)....... 6,676,318
------------
U.S. GOVERNMENT &
FEDERAL AGENCY (7.0%)
Federal National
Mortgage Association
5.45%, due 1/17/96...... 5,360,000 5,347,124
United States Treasury
Bill
4.94%, due 3/7/96 (d)... 2,040,000 2,020,959
------------
Total U.S. Government &
Federal Agency
(Cost $7,369,064)....... 7,368,083
------------
Total Short-Term
Investments
(Cost $14,045,382)...... 14,044,401
------------
Total Investments
(Cost $85,349,165) (f).. 99.7% 104,803,468 (g)
Cash and Other Assets,
Less Liabilities........ 0.3 367,064
----------- ------------
Net Assets............... 100.0% $105,170,532
=========== ============
</TABLE>
FUTURES CONTRACTS (0.3%)
<TABLE>
<CAPTION>
CONTRACTS UNREALIZED
LONG APPRECIATION
------------------------------
<S> <C> <C>
Standard & Poor's 500
March 1996..................................... 45 $ 328,850
------------
Total Futures Contracts (Settlement Value
$13,915,125) $ 328,850 (e)
============
</TABLE>
- --------
(a) Non-income producing securities.
(b) Less than one tenth of a percent.
(c) The combined market value of common stocks and Standard & Poor's 500 Index
futures contracts represents 99.5% of net assets.
(d) Partially segregated as collateral for futures contracts.
(e) Represents the difference between the value of the contracts at the time
they were opened and the value at December 31, 1995.
(f) The cost for Federal income tax purposes is $85,469,863.
(g) At December 31, 1995 net unrealized appreciation was $19,333,606, based on
cost for Federal income tax purposes. This consisted of aggregate gross
unrealized appreciation for all investments on which there was an excess
of market value over cost of $20,787,389 and aggregate gross unrealized
depreciation for all investments on which there was an excess of cost over
market value of $1,453,783.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
97
<PAGE>
INDEXED EQUITY PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
As of December 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investment in securities, at value (Note 2)
(identified cost $85,349,165)................................... $104,803,468
Cash............................................................. 93,869
Receivables:
Fund shares sold................................................. 261,413
Dividends and interest........................................... 181,300
NYLIAC........................................................... 13,552
Variation margin receivable on futures contracts................. 15,062
Unamortized organization expense
(Note 2)........................................................ 10,496
Other assets..................................................... 419
------------
Total assets................................................... 105,379,579
------------
LIABILITIES:
Payables:
Investment securities purchased.................................. 144,925
Recordkeeping.................................................... 17,254
Administrator.................................................... 8,743
Adviser.......................................................... 8,743
Custodian........................................................ 3,565
Directors........................................................ 397
Accrued expenses................................................. 25,420
------------
Total liabilities.............................................. 209,047
------------
Net assets applicable to
outstanding shares.............................................. $105,170,532
============
COMPOSITION OF NET ASSETS:
Capital stock (par value of $.01 per share)
50 million shares authorized.................................... $ 77,756
Additional paid-in capital....................................... 85,175,710
Accumulated undistributed net
realized gain on investments.................................... 133,913
Net unrealized appreciation
on investments.................................................. 19,783,153
------------
Net assets applicable to
outstanding shares.............................................. $105,170,532
============
Shares of capital stock outstanding.............................. 7,775,567
============
Net asset value per share outstanding............................ $ 13.53
============
</TABLE>
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends (a).................................................... $ 1,737,373
Interest......................................................... 657,235
------------
Total income................................................... 2,394,608
------------
Expenses: (Note 2)
Recordkeeping.................................................... 161,976
Administration (Note 3).......................................... 159,932
Advisory (Note 3)................................................ 79,966
Shareholder communication........................................ 27,943
Custodian........................................................ 21,118
Auditing......................................................... 14,601
Amortization of organization expense............................. 7,801
Directors........................................................ 5,970
Legal............................................................ 5,731
Portfolio pricing................................................ 4,199
Miscellaneous.................................................... 5,057
------------
Total expenses
before reimbursement.......................................... 494,294
Expense reimbursement from
Administrator (Note 3).......................................... (118,455)
------------
Net expenses................................................... 375,839
------------
Net investment income............................................ 2,018,769
------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from:
Securities transactions.......................................... 863,214
Futures transactions............................................. 2,317,233
------------
Net realized gain on investments................................. 3,180,447
------------
Net change in unrealized appreciation
on investments:
Securities transactions.......................................... 18,946,588
Futures transactions............................................. 404,950
------------
Net unrealized gain on investments............................... 19,351,538
------------
Net realized and unrealized gain
on investments.................................................. 22,531,985
------------
Net increase in net assets resulting
from operations................................................. $ 24,550,754
============
</TABLE>
- --------
(a) Dividends recorded net of foreign withholding taxes in the amount of
$11,459.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
98
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
INDEXED EQUITY PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
For the years ended December 31, 1995
and December 31, 1994
<TABLE>
<CAPTION>
1995 1994
----------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment income............................ $ 2,018,769 $ 1,387,787
Net realized gain on investments................. 3,180,447 306,434
Net change in unrealized appreciation on
investments..................................... 19,351,538 (1,143,715)
------------- ------------
Net increase in net assets resulting from
operations...................................... 24,550,754 550,506
------------- ------------
Dividends and distributions to shareholders:
From net investment income....................... (2,044,642) (1,386,710)
From net realized gain on investments............ (2,898,925) (275,140)
------------- ------------
Total dividends and distributions to
shareholders................................... (4,943,567) (1,661,850)
------------- ------------
Capital share transactions:
Net proceeds from sale of shares................. 32,292,361 21,300,925
Net asset value of shares issued to shareholders
in reinvestment of dividends and distributions.. 4,943,567 1,661,850
------------- ------------
37,235,928 22,962,775
Cost of shares redeemed.......................... (14,837,036) (1,768,151)
------------- ------------
Increase in net assets derived from capital
share transactions............................. 22,398,892 21,194,624
------------- ------------
Net increase in net assets...................... 42,006,079 20,083,280
NET ASSETS:
Beginning of year................................ 63,164,453 43,081,173
------------- ------------
End of year...................................... $ 105,170,532 $ 63,164,453
============= ============
Accumulated undistributed net investment income.. $ -- $ 1,077
============= ============
</TABLE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(Selected Per Share Data and Ratios)
<TABLE>
<CAPTION>
JANUARY 29
1993 (a)
THROUGH
YEAR ENDED DECEMBER 31 DECEMBER 31
1995 1994 1993
------------------------------------------
<S> <C> <C> <C>
Net asset value at beginning of
period............................. $ 10.38 $ 10.58 $ 10.00
------------ ------------ ------------
Net investment income............... 0.27 0.24 0.19
Net realized and unrealized gain
(loss) on investments.............. 3.55 (0.15) 0.67
------------ ------------ ------------
Total from investment operations.... 3.82 0.09 0.86
------------ ------------ ------------
Less dividends and distributions:
From net investment income......... (0.28) (0.24) (0.19)
From net realized gain on
investments....................... (0.39) (0.05) (0.08)
In excess of net realized gain on
investments....................... -- -- (0.01)
------------ ------------ ------------
Total dividends and distributions... (0.67) (0.29) (0.28)
------------ ------------ ------------
Net asset value at end of period.... $ 13.53 $ 10.38 $ 10.58
============ ============ ============
Total investment return (b)......... 36.89% 0.76% 8.53%
Ratios (to average net
assets)/Supplemental Data:
Net investment income.............. 2.52% 2.61% 2.54%+
Net expenses....................... 0.47% 0.47% 0.47%+
Expenses (before reimbursement).... 0.62% 0.68% 0.96%+
Portfolio turnover rate............. 5% 8% 7%
Net assets at end of period (in
000's)............................. $ 105,171 $ 63,164 $ 43,081
</TABLE>
- --------
(a) Commencement of Operations.
(b) Total return is not annualized.
+ Annualized.
The notes to the financial statements are an integral part of, and should be
read in conjunction with, the financial statements.
99
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Organization and Business:
- -------------------------------------------------------------------------------
New York Life MFA Series Fund, Inc. (the "Company") was incorporated under
Maryland law on June 3, 1983. The Company is registered under the Investment
Company Act of 1940, as amended, ("Investment Company Act") as an open-end
diversified management investment company. High Yield Corporate Bond,
International Equity and Value Portfolios, which commenced operations on May
1, 1995, Capital Appreciation, Cash Management, Government, Total Return and
Indexed Equity Portfolios, which commenced operations on January 29, 1993, and
Bond and Growth Equity Portfolios, which commenced operations on January 23,
1984, (the "Funds") are separate series of the Company. Shares of the Funds
are currently offered only to New York Life Insurance and Annuity Corporation
("NYLIAC"), a wholly owned subsidiary of New York Life Insurance Company ("New
York Life"). NYLIAC allocates shares of the Funds to, among others, New York
Life Insurance and Annuity Corporation's Variable Universal Life Separate
Account I and may allocate shares in the future to Variable Universal Life
Separate Account II ("Separate Accounts", collectively). The Separate Accounts
are used to fund flexible premium variable life insurance policies.
Effective May 2, 1994, the name of the New York Life MFA Series Fund, Inc.
Common Stock Portfolio changed to New York Life MFA Series Fund, Inc. Growth
Equity Portfolio.
The investment objectives for each of the Portfolios of the Company are as
follows:
Capital Appreciation: to seek long-term growth of capital.
Cash Management: to seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity.
Government: to seek a high level of current income, consistent with safety
of principal.
High Yield Corporate Bond: to maximize current income through investment in
a diversified portfolio of high yield, high risk debt securities which are
ordinarily in the lower rating categories of recognized rating agencies.
International Equity: to seek long-term growth of capital by investing in a
portfolio consisting primarily of non-U.S. equity securities.
Total Return: to realize current income consistent with reasonable opportu-
nity for future growth of capital and income.
Value: to realize maximum long-term total return from a combination of cap-
ital growth and income.
Bond: to seek the highest income over the long term consistent with preser-
vation of principal.
Growth Equity: to seek long-term growth of capital with income as a second-
ary consideration.
Indexed Equity: to seek to provide investment results that correspond to
the total return performance (reflecting reinvestment of dividends) of
common stocks in the aggregate, as presented by the S&P 500.
- -------------------------------------------------------------------------------
NOTE 2--Significant Accounting Policies:
- -------------------------------------------------------------------------------
The following is a summary of significant accounting policies followed by the
Company:
(A)
VALUATION OF FUND SHARES. The net asset value per share of each Fund is
calculated on every day the New York Stock Exchange is open for trading,
except the day after Thanksgiving and Christmas Eve. Net asset value per share
is calculated as of the regular close of the New York Stock Exchange (normally
4:00 P.M., Eastern time) for each Fund by dividing the current market value
(amortized cost, in the case of Cash Management Portfolio) of the Fund's total
assets, less liabilities, by the total number of outstanding shares of that
Fund.
100
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
(B)
SECURITIES VALUATION. Portfolio securities of Cash Management Portfolio are
valued at amortized cost, which approximates market value. This method
involves initially valuing an instrument at its cost and thereafter amortizing
the premium or accreting the discount to income over the life of the security.
Securities of each of the other Funds are stated at value determined (a) by
appraising common and preferred stocks which are traded on the New York Stock
Exchange at the last sale price on that day or, if no sale occurs, at the mean
between the closing bid and asked prices, (b) by appraising common and
preferred stocks traded on other United States national securities exchanges
or foreign securities exchanges as nearly as possible in the manner described
in (a) by reference to their principal exchange, including the National
Association of Securities Dealers National Market System, (c) by appraising
over-the-counter securities quoted on the National Association of Securities
Dealers NASDAQ system (but not listed on the National Market System) at the
bid price supplied through such system, (d) by appraising over-the-counter
securities not quoted on the NASDAQ system and securities listed or traded on
certain foreign exchanges whose operations are similar to the U.S. over-the-
counter market, at prices supplied by the pricing agent or brokers selected by
the Adviser if these prices are deemed to be representative of market values
at the regular close of business of the New York Stock Exchange, (e) by
appraising debt securities at prices supplied by a pricing agent selected by
the Adviser, whose prices reflect broker/dealer supplied valuations and
electronic data processing techniques if those prices are deemed by the
Adviser to be representative of market values at the regular close of business
of the New York Stock Exchange, (f) by appraising options and futures
contracts at the last sale price on the market where such options or futures
contracts are principally traded, and (g) by appraising all other securities
and other assets, including debt securities for which prices are supplied by a
pricing agent but are not deemed by the Adviser to be representative of market
values, but excluding money market instruments with a remaining maturity of
sixty days or less and including restricted securities and securities for
which no market quotations are available, at fair value in accordance with
procedures approved by the Directors. Short-term securities which mature in
more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost if
their term to maturity at purchase was 60 days or less, or by amortizing the
difference between market value on the 61st day prior to maturity and value on
maturity date if their original term to maturity at purchase exceeded 60 days.
Events affecting the values of certain portfolio securities that occur
between the close of trading on the principal market for such securities
(foreign exchanges and over-the-counter markets) and the regular close of the
New York Stock Exchange will not be reflected in the Funds' calculations of
net asset values unless the Adviser believes that the particular event would
materially affect net asset value, in which case an adjustment would be made.
(C)
FORWARD CURRENCY CONTRACTS. A forward currency contract is an agreement to buy
or sell currencies of different countries on a specified future date at a
specified rate. During the period the forward contract is open, changes in the
value of the contract are recognized as unrealized gains or losses by "marking
to market" such contract on a daily basis to reflect the market value of the
contract at the end of each day's trading. When the forward contract is
closed, the Portfolio records a realized gain or loss equal to the difference
between the proceeds from (or cost of) the closing transaction and the
Portfolio's basis in the contract. The International Equity Portfolio enters
into forward foreign currency exchange contracts in order to hedge its foreign
currency denominated investments and receivables and payables against adverse
movements in future foreign exchange rates.
The use of forward contracts involves, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts reflect the extent of the
Portfolio's involvement in these financial instruments. Risks arise from the
possible movements in the foreign exchange rates underlying these instruments.
The unrealized appreciation on forward contracts reflects the Portfolio's
exposure at year end to credit loss in the event of a counterparty's failure
to perform its obligations.
101
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(D)
FUTURES CONTRACTS. A futures contract is an agreement to purchase or sell a
specified quantity of an underlying instrument at a specified future date, or
to make or receive a cash payment based on the value of a securities index.
During the period the futures contract is open, changes in the value of the
contract are recognized as unrealized gains or losses by "marking to market"
such contract on a daily basis to reflect the market value of the contract at
the end of each day's trading. The Portfolio agrees to receive from or pay to
the broker an amount of cash equal to the daily fluctuation in the value of
the contract. Such receipts or payments are known as "variation margin". When
the futures contract is closed, the Portfolio records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Portfolio's basis in the contract. The Indexed Equity
Portfolio invests in stock index futures contracts to gain full exposure to
changes in stock market prices to fulfill its investment objective.
The use of futures contracts involves, to varying degrees, elements of
market risk in excess of the amount recognized in the statement of assets and
liabilities. The contract or notional amounts and variation margin reflect the
extent of the Portfolio's involvement in long futures positions. Risks arise
from the possible imperfect correlation in movements in the price of futures
contracts and the underlying hedged assets, and the possible inability of
counterparties to meet the terms of their contracts. However, the Portfolio's
activities in futures contracts are conducted through regulated exchanges
which minimize counterparty credit risks.
(E)
REPURCHASE AGREEMENTS. At the time the Funds enter into a repurchase
agreement, the value of the underlying security, including accrued interest,
will be equal to or exceed the value of the repurchase agreement and, in the
case of repurchase agreements exceeding one day, the value of the underlying
security, including accrued interest, is required during the term of the
agreement to be equal to or exceed the value of the repurchase agreement. The
underlying securities for all repurchase agreements are held in a segregated
account of the respective Funds' custodian. In the case of repurchase
agreements exceeding one day, the market value of the underlying securities
are monitored by the Adviser by pricing them daily. (Also see Note 5).
(F)
SECURITY TRANSACTIONS AND INVESTMENT INCOME. The Company records security
transactions on the trade date. Realized gains and losses on security
transactions are determined using the identified cost method and include gains
and losses from repayments of principal on mortgage backed securities.
Dividend income is recognized on the ex-dividend date and interest income is
accrued daily except when collection is not expected. Discounts on securities
purchased for all Funds are accreted on the constant yield method over the
life of the respective securities or, if applicable, over the period to the
first date of call.
(G)
FOREIGN CURRENCY INVESTING. The books and records of the Company are kept in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the
mean between the buying and selling rates last quoted by any major U.S. bank
at the following dates:
(i) market value of investment securities, other assets and
liabilities--at the valuation date,
(ii) purchases and sales of investment securities, income and expenses--
at the date of such transactions.
The assets and liabilities of International Equity Portfolio are presented
at the exchange rates and market values at the close of the year. The changes
in net assets arising from fluctuations in exchange rates and the changes in
net assets resulting from changes in market prices are not separately
presented. However, gains and losses from certain foreign currency
transactions are treated as ordinary income for Federal income tax purposes.
102
<PAGE>
NEW YORK LIFE MFA
SERIES FUND, INC.
Net realized gain (loss) on foreign currency transactions represents net
gains and losses on forward currency contracts, net currency gains or losses
realized as a result of differences between the amounts of securities sale
proceeds or purchase cost, dividends, interest and withholding taxes recorded
on the Fund's books and the U.S. dollar equivalent amount actually received or
paid. Net currency gains or losses from valuing foreign currency denominated
assets and liabilities at year-end exchange rates are reflected in unrealized
foreign exchange gains.
There are certain risks involved in investing in foreign securities that are
in addition to the usual risks inherent in domestic instruments. These risks
include those resulting from future adverse political and economic
developments and possible imposition of currency exchange blockages or other
foreign governmental laws or restrictions.
(H)
MORTGAGE DOLLAR ROLLS. The Funds enter into mortgage dollar roll transactions
("MDRs") in which they sell mortgage backed securities ("MBS") from their
portfolio to a counterparty from whom they simultaneously agree to buy a
similar security on a delayed delivery basis. The MDR transactions of the
Funds are classified as purchase and sale transactions. The securities sold in
connection with the MDR are removed from the portfolio and a realized gain or
loss is recognized. The securities the Funds have agreed to acquire are
included at market value in the portfolio of investments and liability for
such purchase commitments is included as payables for investments purchased.
(I)
FEDERAL INCOME TAXES. Each of the Funds is treated as a separate entity for
Federal income tax purposes. The Company's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of the taxable income to the shareholders of
each Fund within the allowable time limits. Therefore, no Federal income tax
provision is required.
Investment income received by a Fund from foreign sources may be subject to
foreign income taxes withheld at the source.
(J)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are
recorded on the ex-dividend date. For Cash Management Portfolio, dividends are
declared daily and paid monthly. Each of the other Funds intends to declare
and pay, as a dividend, substantially all of their net investment income and
net realized gains no less frequently than once a year.
Income dividends and capital gain distributions are determined in accordance
with Federal income tax regulations which may differ from generally accepted
accounting principles.
(K)
ORGANIZATION COSTS. Costs incurred in connection with the initial organization
and registration of a Portfolio of the Company are amortized over 60 months
beginning with the commencement of operations of the respective Portfolio.
Organization costs for High Yield Corporate Bond, International Equity and
Value Portfolios, paid by, and reimbursable to, NYLIAC, aggregated
approximately $220,500. Such costs are being amortized beginning with the
commencement of operations of the respective Portfolios on May 1, 1995.
Organization costs for Capital Appreciation, Cash Management, Government,
Total Return and Indexed Equity Portfolios, paid by, and reimbursable to,
NYLIAC, aggregated approximately $253,500. Such costs are being amortized
beginning with the commencement of operations of the respective Portfolio on
January 29, 1993. In the event that any of the initial shares purchased by
NYLIAC are redeemed, proceeds of such redemption will be reduced by the
proportionate amount of the unamortized deferred organizational expenses which
the number of shares redeemed bears to the total number of initial shares
purchased.
103
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
All of the initial shares purchased by NYLIAC in Capital Appreciation, Cash
Management, Government and Total Return Portfolios were redeemed on
February 21, 1995. A portion of the initial shares purchased by NYLIAC in
Indexed Equity Portfolio were redeemed between February 14, 1995 and December
19, 1995. (Also see Note 7 for further discussion of these redemptions).
(L)
EXPENSES. Expenses with respect to the Company are allocated to the individual
Funds in proportion to the net assets of the respective Funds when the
expenses are incurred except where allocations of direct expenses can
otherwise fairly be made.
(M)
USE OF ESTIMATES. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
- -------------------------------------------------------------------------------
NOTE 3--Fees and Related Party Policies:
- -------------------------------------------------------------------------------
(A)
INVESTMENT ADVISORY AND ADMINISTRATION FEES. MacKay-Shields Financial
Corporation ("MacKay-Shields") acts as investment adviser to Capital
Appreciation, Cash Management, Government, High Yield Corporate Bond,
International Equity, Total Return and Value Portfolios under an Investment
Advisory Agreement. MacKay-Shields is a registered investment adviser, a
wholly-owned subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary
of New York Life Insurance Company ("New York Life"). New York Life acts as
investment adviser to Bond and Growth Equity Portfolios under an Investment
Advisory agreement. Monitor Capital Advisors Inc. ("Monitor") acts as
investment adviser to Indexed Equity Portfolio under an Investment Advisory
Agreement. Monitor is a registered investment adviser, a wholly-owned
subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York
Life.
NYLIAC is Administrator for the Company.
The Company, on behalf of each Fund, pays the Advisers and Administrator a
monthly fee for the services performed and the facilities furnished at an
approximate annual rate of the average daily net assets of each Fund as
follows:
<TABLE>
<CAPTION>
ADVISER ADMINISTRATOR
------- -------------
<S> <C> <C>
Capital Appreciation Portfolio............................ .36% .20%
Cash Management Portfolio................................. .25% .20%
Government Portfolio...................................... .30% .20%
High Yield Corporate Bond Portfolio....................... .30% .20%
International Equity Portfolio............................ .60% .20%
Total Return Portfolio.................................... .32% .20%
Value Portfolio........................................... .36% .20%
Bond Portfolio............................................ .25% .20%
Growth Equity Portfolio................................... .25% .20%
Indexed Equity Portfolio.................................. .10% .20%
</TABLE>
The Administrator has voluntarily agreed to assume the Funds' operating
expenses through December 31, 1996, which on an annualized basis exceed the
percentages indicated below, after which, the voluntary expense limitation may
be terminated at any time.
104
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
<TABLE>
<S> <C>
Capital Appreciation Portfolio............................................. .73%
Cash Management Portfolio.................................................. .62%
Government Portfolio....................................................... .67%
High Yield Corporate Bond Portfolio........................................ .67%
International Equity Portfolio............................................. .97%
Total Return Portfolio..................................................... .69%
Value Portfolio............................................................ .73%
Bond Portfolio............................................................. .62%
Growth Equity Portfolio.................................................... .62%
Indexed Equity Portfolio................................................... .47%
</TABLE>
In connection with the expense limitation the Administrator assumed certain
of the expenses of the Funds for the year ended December 31, 1995 as shown on
the Statement of Operations.
(B)
DISTRIBUTOR. NYLIFE Distributors Inc. ("NYLIFE Distributors"), a wholly-owned
subsidiary of NYLIFE Inc. and an indirect wholly-owned subsidiary of New York
Life serves as the Company's distributor and principal underwriter (the
"Distributor") pursuant to a Distribution agreement. NYLIFE Distributors is
not obligated to sell any specific amount of the Company's shares, and
receives no compensation from the Company pursuant to the Distribution
Agreement.
(C)
DIRECTORS FEES. Directors, other than those affiliated with New York Life,
MacKay-Shields, Monitor, NYLIFE Distributors or NYLIFE Securities, are paid an
annual fee of $16,000 and $750 for each Board meeting attended plus
reimbursement for travel and out-of-pocket expenses. The Company allocates
this expense in proportion to the net assets of the respective Funds.
(D)
CAPITAL. At December 31, 1995 NYLIAC held shares of each Portfolio with a net
asset value as follows:
<TABLE>
<S> <C>
High Yield Corporate Bond Portfolio................................ $10,551,365
International Equity Portfolio..................................... 10,195,702
Value Portfolio.................................................... 5,790,316
Indexed Equity Portfolio........................................... 19,068,546
</TABLE>
(E)
RECORDKEEPING FEES. NYLIAC provides recordkeeping services for Cash
Management, Bond and Growth Equity Portfolios. For the year ended December 31,
1995 the Portfolios accrued recordkeeping fees as follows:
<TABLE>
<S> <C>
Cash Management Portfolio........................................... $ 153,011
Bond Portfolio...................................................... 710,786
Growth Equity Portfolio............................................. 1,270,983
</TABLE>
105
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--Federal Income Tax:
- -------------------------------------------------------------------------------
At December 31, 1995, for Federal income tax purposes, capital loss
carryforwards, as shown in the table below, are available to the extent
provided by regulations to offset future realized gains of each respective
Portfolio through the years indicated. To the extent that these loss
carryforwards are used to offset future capital gains, it is probable that the
capital gains so offset will not be distributed to shareholders. Additionally,
as shown in the table below, certain Funds intend to elect, to the extent
provided by regulations, to treat certain qualifying capital losses that arose
during the year ended December 31, 1995 as if they arose on January 1, 1996.
<TABLE>
<CAPTION>
CAPITAL LOSS CAPITAL LOSS
AVAILABLE THROUGH AMOUNT (000'S) DEFERRED (000'S)
----------------- -------------- ----------------
<S> <C> <C> <C>
Capital Appreciation Portfo-
lio......................... 2001 $ 116
2002 3,049
2003 3,133
-------
$ 6,298 $1,038
======= ======
Cash Management Portfolio.... 2003 $ 1 $ 0
======= ======
Government Portfolio......... 2002 $ 3,261 $ 0
======= ======
High Yield Corporate Bond
Portfolio................... $ 0 $ 82
======= ======
International Equity Portfo-
lio......................... 2003 $ 24 $ 3
======= ======
Total Return Portfolio....... 2002 $ 4,183 $ 0
======= ======
Value Portfolio.............. $ 0 $ 3
======= ======
Bond Portfolio............... 2002 $ 2,748 $ 0
======= ======
</TABLE>
Government Portfolio, Total Return Portfolio and Bond Portfolio utilized
$714,386, $696,197 and $4,716,932, respectively, of capital loss carryforwards
during the current year.
- -------------------------------------------------------------------------------
NOTE 5--Financial Investments:
- -------------------------------------------------------------------------------
High Yield Corporate Bond Portfolio invests primarily in high yield bonds.
These bonds may involve special risks in addition to the risks associated with
investment in higher rated debt securities. High yield bonds may be more
susceptible to real or perceived adverse economic and competitive industry
conditions than higher grade bonds. Also, the secondary market on which high
yield bonds are traded may be less liquid than the market for higher grade
bonds.
Each Portfolio may enter into repurchase agreements to earn income. In the
event of the bankruptcy of the seller or the failure of the seller to
repurchase the securities as agreed, a Portfolio could suffer losses,
including loss of interest on or principal of the security and costs
associated with delay and enforcement of the repurchase agreement.
- -------------------------------------------------------------------------------
NOTE 6--Acquisition of Money Market Portfolio:
- -------------------------------------------------------------------------------
On March 31, 1994, Cash Management Portfolio acquired all the net assets of
Money Market Portfolio pursuant to a plan of reorganization approved by the
shareholders of Cash Management and Money Market Portfolios on December 14,
1993. The acquisition was accomplished by a tax-free exchange of 37,601,126
shares of Cash Management Portfolio (valued at $37,601,126) for the 3,759,941
shares of Money Market Portfolio outstanding on March 31, 1994. Money Market's
net assets at that date ($37,597,525) were combined with those of Cash
Management Portfolio. The aggregate net assets of Cash Management and Money
Market Portfolios immediately before the acquisition were $28,516,066 and
$37,597,525, respectively. The combined net assets of Cash Management and
Money Market Portfolios immediately after the acquisition were $66,113,591.
106
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
NOTE 7--Redemption by NYLIAC of Initial Investment:
- --------------------------------------------------------------------------------
On February 21, 1995, NYLIAC redeemed all of its initial investment in Capital
Appreciation, Cash Management, Government and Total Return Portfolios. In
connection with the redemption of the initial shares, NYLIAC reimbursed each of
the above listed Funds $28,042, which represented the unamortized deferred
organization expense of the respective Funds on the date of the redemption.
Additionally, between February 14, 1995 and December 19, 1995, NYLIAC redeemed
a portion of its initial investment in Indexed Equity Portfolio. NYLIAC
reimbursed Indexed Equity Portfolio $11,280 which represented the proportionate
amount of the unamortized deferred organization expense which the number of
shares redeemed bears to the total number of initial shares purchased on each
of the dates above.
107
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 8--Purchases and Sales of Securities (in 000's):
- --------------------------------------------------------------------------------
During the year ended December 31, 1995, purchases and sales of securities,
other than securities subject to repurchase transactions and short-term
securities, were as follows:
<TABLE>
<CAPTION>
HIGH YIELD INTERNATIONAL
CAPITAL APPRECIATION GOVERNMENT CORPORATE BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO (a) PORTFOLIO (a)
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Government Securi-
ties................... $ -- $ -- $327,619 $341,450 $ -- $ -- $ -- $ --
All others.............. 132,694 51,990 -- -- 35,137 11,157 14,549 1,356
-----------------------------------------------------------------------------
Total................... $ 132,694 $ 51,990 $327,619 $341,450 $35,137 $11,157 $14,549 $1,356
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
</TABLE>
- --------
(a)For the period May 1, 1995 (Commencement of Operations) through December 31,
1995.
- --------------------------------------------------------------------------------
NOTE 9--Capital Share Transactions (in 000's):
- --------------------------------------------------------------------------------
Transactions in capital shares throughout each year ended December 31, 1995 and
December 31, 1994 were as follows:
<TABLE>
<CAPTION>
HIGH YIELD
CORPORATE
CAPITAL APPRECIATION CASH MANAGEMENT GOVERNMENT BOND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
1995 1994 1995 1994 1995 1994 1995 (a)
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shares sold............. 6,644 6,383 128,846 99,252 1,197 2,392 2,979
Shares issued in
reinvestment of
dividends and
distributions.......... 62 43 3,588 2,011 448 498 167
Shares issued in
connection with
acquisition of Money
Market Portfolio....... -- -- -- 37,601 -- -- --
---------------------------------------------------------
6,706 6,426 132,434 138,864 1,645 2,890 3,146
Shares redeemed......... 874 88 115,710 94,481 1,859 808 41
---------------------------------------------------------
Net increase (decrease). 5,832 6,338 16,724 44,383 (214) 2,082 3,105
---------------------------------------------------------
---------------------------------------------------------
</TABLE>
- --------
(a)For the period May 1, 1995 (Commencement of Operations) through December 31,
1995.
108
<PAGE>
NEW YORK LIFE
MFA SERIES FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOTAL RETURN VALUE BOND GROWTH EQUITY INDEXED EQUITY
PORTFOLIO PORTFOLIO (a) PORTFOLIO PORTFOLIO PORTFOLIO
PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES PURCHASES SALES
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$298,506 $285,160 $ -- $ -- $161,939 $149,343 $ -- $ -- $ -- $ --
97,990 74,367 19,682 1,977 24,868 19,504 396,667 373,184 22,348 3,454
- --------------------------------------------------------------------------------------------
$396,496 $359,527 $19,682 $1,977 $186,807 $168,847 $396,667 $373,184 $22,348 $3,454
- --------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
EQUITY TOTAL RETURN VALUE BOND GROWTH EQUITY INDEXED EQUITY
PORTFOLIO PORTFOLIO PORTFOLIPORTFOLIOO PORTFOLIO PORTFOLIO
1995 (a) 1995 1994 1995 (a) 1995 1994 1995 1994 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
414 4,196 6,594 1,621 1,732 1,676 2,118 2,091 2,580 2,024
67 345 301 17 1,080 1,165 2,286 1,616 367 160
-- -- -- -- -- -- -- -- -- --
- --------------------------------------------------------------------------------
481 4,541 6,895 1,638 2,812 2,841 4,404 3,707 2,947 2,184
46 1,404 240 28 2,397 2,776 2,060 1,642 1,259 169
- --------------------------------------------------------------------------------
435 3,137 6,655 1,610 415 65 2,344 2,065 1,688 2,015
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
109
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
New York Life MFA Series Fund, Inc.
In our opinion, the accompanying statements of assets and liabilities, includ-
ing the portfolios of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in
all material respects, the financial position of Capital Appreciation Portfo-
lio, Cash Management Portfolio, Government Portfolio, High Yield Corporate
Bond Portfolio, International Equity Portfolio, Total Return Portfolio, Value
Portfolio, Bond Portfolio, Growth Equity Portfolio, and Indexed Equity Portfo-
lio, (separate portfolios constituting New York Life MFA Series Fund, Inc.,
hereafter referred to as the "Funds") at December 31, 1995, the results of
each of their operations for the year then ended and the changes in each of
their net assets and the financial highlights for each of the periods present-
ed, in conformity with generally accepted accounting principles. These finan-
cial statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our responsibil-
ity is to express an opinion on these financial statements based on our au-
dits. We conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial state-
ments are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presenta-
tion. We believe that our audits, which included confirmation of securities at
December 31, 1995 by correspondence with the custodians and brokers and the
application of alternative auditing procedures where confirmations from bro-
kers were not received, provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York
February 16, 1996
110
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
111
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
112
<PAGE>
This is a Report by the MFA Series Fund, Inc., for the general information of
NYLIAC Variable Universal Life policyowners. It must be accompanied or preceded
by a current prospectus if it is given to anyone who is not an owner of a NYLIAC
Variable Universal Life policy. This Report does not offer for sale or solicit
orders to purchase securities.
New York Life Insurance and Annuity Corporation
(A Delaware Corporation)
51 Madison Avenue
New York, NY 10010
Issued by: New York Life Insurance and Annuity Corporation
Distributed by: NYLIFE Distributors Inc.,
Member NASD
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