<PAGE>
LINCOLN
[LOGO OF LINCOLN ADVISOR ADVISOR
FUNDS APPEARS HERE] FUNDS
Semi-Annual Report
April 30,1995
Lincoln Growth and Income Portfolio
Lincoln Enterprise Portfolio
Lincoln U.S. Growth Portfolio
Lincoln World Growth Portfolio
Lincoln New Pacific Portfolio
Lincoln Government Income Portfolio
Lincoln Corporate Income Portfolio
Lincoln Tax-free Income Portfolio
Lincoln Cashfund Portfolio
Securities distributed by LNC Equity Sales Corporation,
Fort Wayne, Indiana
<PAGE>
[LOGO]
- --------------------------------------------------------------------------------
A LETTER FROM THE PRESIDENT
- --------------------------------------------------------------------------------
April 30, 1995
Dear Shareholder:
Lincoln Advisor Funds is pleased to provide its shareholders with the 1995
Semi-Annual Report. As can be seen, the six month period ending April 30, 1995,
has been successful both from performance and sales perspectives. It is with
pleasure that we welcome more than 2100 new shareholders to the Lincoln Advisor
Funds family.
We also have good news to share regarding the performance of many of our
portfolios. After a disappointing 1994, the bond market experienced an
impressive first quarter having ridden out the worst bond market since 1927.
Domestic equity returns were helped by the quarter's bond performance and
posted significant gains.
Many of the stocks hardest hit in 1994 were small and mid-cap growth issues.
Industry experts believe mid-cap stocks are now inexpensive relative to the S&P
500 on a price-to-earnings basis, as well as on the basis of price-to-earnings
compared to expected long-term growth rates.
The markets outside the U.S. have not been as kind with activities in the
Pacific Basin impacting international markets. The earthquake in Kobe, Japan,
the possibility that Japanese interest rates may rise earlier than expected and
the weakness of the U.S. dollar have all impacted international and Pacific
Basin investments with returns lower than originally expected for the fiscal
half-year.
Despite last year's turbulent market, all of our portfolios are positioned to
do well, moving forward with several Funds currently outperforming their
benchmark indices.
<TABLE>
<CAPTION>
LINCOLN ADVISOR FUNDS(I) TOTAL RETURN(II) LIPPER INDEX RETURN(II)
<S> <C> <C>
Growth and Income Portfolio 9.10% 7.48%
Enterprise Portfolio 8.15% 4.49%
U.S. Growth Portfolio (.78)% 5.99%
World Growth Portfolio (2.44)% (5.03)%
New Pacific Portfolio (15.97)% (11.75)%
Corporate Income Portfolio 7.43% 6.78%
Government Income Portfolio 5.81% 6.22%
Tax-Free Income Portfolio 7.69% 7.40%
</TABLE>
The Enterprise Portfolio reported particularly strong performance for the
period nearly doubling the return of its benchmark index. Also of note is the
U.S. Growth Portfolio's underperformance of its benchmark, due in part to less
than satisfactory performance of retail issues that were affected by poor
weather in many parts of the country.
Lincoln Advisor Funds' shareholders now have the option of tracking the
Enterprise Portfolio's performance in major and many local newspapers --
LincAdvEntA. Listing was achieved by adding more than 1000 shareholders to the
portfolio since the fund's inception, less than two years ago.
Looking ahead, you can be confident that all of your portfolio managers have
analyzed the current market to best position you investment dollars for strong
results. If you have any questions concerning your investments, or this report,
I encourage you to contact our Shareholder Services Department at 800-9ADVISOR
(800-923-8476). Thank you for being a part of the Lincoln Advisor Funds team.
Sincerely,
Priscilla S. Brown
President
(i) Reflects aggregate total returns of Class A Shares only, excluding the
effect of any applicable sales loads. Comparable returns for Class B, C and
D shares may be greater or less than Class A based on differences in loads
and expenses among classes.
(ii) For six-month period ending April 30, 1995.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
FINANCIAL INFORMATION: PAGE
<S> <C>
Portfolios of Investments
Lincoln Growth and Income Portfolio...................................... 2
Lincoln Enterprise Portfolio............................................. 5
Lincoln U.S. Growth Portfolio............................................ 8
Lincoln World Growth Portfolio........................................... 11
Lincoln New Pacific Portfolio............................................ 15
Lincoln Government Income Portfolio...................................... 21
Lincoln Corporate Income Portfolio....................................... 23
Lincoln Tax-Free Income Portfolio........................................ 26
Lincoln Cashfund Portfolio............................................... 29
Statement of Assets and Liabilities........................................ 32
Statements of Operations................................................... 34
Statements of Changes in Net Assets........................................ 36
Financial Highlights....................................................... 40
Notes to Financial Statements.............................................. 49
</TABLE>
1
<PAGE>
LINCOLN GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------
<S> <C> <C> <C>
EQUITIES
APPAREL
Warnaco Group, Inc., Class
A.......................... 29,800 $ 510,325 2.9%
-----------
AUTOMOTIVE
General Motors.............. 14,700 663,332 3.8%
-----------
BANKING
Mellon Bank Corporation..... 15,750 618,188 3.5%
-----------
CONGLOMERATES
ITT Corporation............. 6,400 668,800 3.8%
-----------
CONSUMER PRODUCTS
Dial Corporation............ 6,300 151,988
Jostens, Inc................ 12,800 257,600
Tyco Toys, Inc. ............ 47,100 264,938
-----------
674,526 3.8%
-----------
ELECTRONICS
Intel Corporation........... 7,500 767,813
Texas Instruments........... 7,300 773,800
United Technologies......... 4,800 351,000
-----------
1,892,613 10.8%
-----------
ENERGY
Amerada Hess Corporation.... 13,700 693,563
Carnco...................... 25,800 609,525
Equitable Resources, Inc. .. 15,000 429,375
Kerr--McGee Corporation..... 13,100 679,563
Louisiana Land & Explora-
tion....................... 8,800 322,300
Tosco Corporation........... 10,458 358,187
-----------
3,092,513 17.6%
-----------
FINANCE
Beneficial Corporation...... 15,100 615,325
Household International,
Inc. ...................... 13,200 618,750
-----------
1,234,075 6.9%
-----------
FOOD & BEVERAGE
American Brands, Inc........ 7,600 307,800
Philip Morris Companies,
Inc. ...................... 6,600 447,150
-----------
754,950 4.3%
-----------
HEALTH CARE
Bard C.R. .................. 16,400 477,650
Beverly Enterprises......... 8,800 508,200
Ivax Corporation............ 19,300 499,388
-----------
1,485,238 8.5%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
LINCOLN GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
HOUSING
Del Webb...................................... 20,700 $ 395,888 2.3%
-----------
INSURANCE
Partnerre Holdings, Ltd....................... 15,400 354,200
Paul Revere Corporation....................... 25,000 412,500
-----------
766,700 4.4%
-----------
MANUFACTURING
Trinity Industries............................ 18,400 710,700 4.1%
-----------
METAL & MINING
Newmont Mining................................ 14,467 605,806 3.5%
-----------
PRINTING & PAPER
Champion International........................ 15,400 677,600 3.9%
-----------
RETAIL
Jan Bell Marketing *.......................... 39,600 108,900
May Department Stores......................... 9,200 333,500
Musicland Stores Corporation *................ 25,700 250,575
Payless Cashways, Inc. *...................... 17,100 134,663
Ross Stores, Inc.............................. 17,600 171,600
-----------
999,238 5.7%
-----------
TELECOMMUNICATIONS
GTE Corporation............................... 14,900 508,463 2.9%
-------------------
TOTAL EQUITIES (Cost $15,129,507) 16,258,955 92.7%
-------------------
CORPORATE BONDS
CONSUMER SERVICES
Service Corporation Interna-
tional........................ 6.50% 09/01/01 $260,000 354,900 2.0%
-----------
METAL & MINING
Inco, Ltd...................... 7.75% 03/15/16 180,000 177,300 1.0%
-------------------
TOTAL CORPORATE BONDS (Cost $547,350) 532,200 3.0%
-------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
LINCOLN GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- ------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase
Agreement, dated 04/28/95, due
05/01/95, with a maturity value
of $1,138,167 and an effective
yield of 5.55%, collateralized
by U.S. Government Agency
Securities with rates ranging
from 5.000% to 10.116% and
maturity dates ranging from
06/15/04 to 06/25/24, with an
aggregate market value of
$1,160,355..................... $1,137,641 $ 1,137,641 6.5%
----------------------
TOTAL INVESTMENTS (Cost
$16,814,498+) 17,928,796 102.2%
Excess of Liabilities over
Other Assets (396,191) (2.2)%
----------------------
NET ASSETS $17,532,605 100.0%
======================
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
+ Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
LINCOLN ENTERPRISE PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EQUITIES
ADVERTISING
Omnicom Group.................................. 4,000 $ 222,500 1.6%
-----------
BANKING
Bay Banks, Inc................................. 2,100 131,250
Corestates Financial Corporation............... 5,200 169,650
-----------
300,900 2.2%
-----------
CAPITAL GOODS
Harnischfeger Industries....................... 12,100 356,950
Pall Corporation............................... 12,300 287,513
-----------
644,463 4.4%
-----------
CHEMICALS
FMC Corporation *.............................. 3,100 190,263 1.4%
-----------
ELECTRONICS
Amphenol Corporation, Class A *................ 7,600 212,800 1.5%
-----------
ENERGY
Apache Corporation............................. 4,200 113,400
Coflexip....................................... 5,100 153,876
Halliburton Co................................. 6,800 260,950
Petroleum Geo-Services *....................... 11,900 325,019
Triton Energy Corporation *.................... 7,700 296,450
-----------
1,149,695 8.3%
-----------
ENTERTAINMENT
Aztar Corporation *............................ 14,700 135,975
Players International, Inc. *.................. 11,500 340,688
Regal Cinemas *................................ 7,200 194,400
-----------
671,063 4.8%
-----------
FINANCE
First USA, Inc................................. 4,500 191,250
Greentree Financial Corporation................ 8,700 355,613
TCF Financial Corporation...................... 6,200 265,825
-----------
812,688 5.8%
-----------
FOOD & BEVERAGE
Coca Cola Enterprises, Inc..................... 15,400 344,575
Hudson Foods................................... 19,050 328,613
-----------
673,188 4.8%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
LINCOLN ENTERPRISE PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH CARE
Biomet, Inc. *................................. 15,300 $ 267,750
Coram Healthcare Corporation *................. 7,700 157,850
Elan Corporation PLC *......................... 3,400 120,275
Healthsouth Rehabilitation *................... 19,400 383,150
Horizon Healthcare Corporation *............... 5,200 108,550
Physicians Reliance............................ 4,100 103,525
Teva Pharmaceutical............................ 4,200 143,850
-----------
1,284,950 9.2%
-----------
HOUSEHOLD PRODUCTS
Clorox Co. .................................... 3,900 229,125
Newell Co. .................................... 10,000 236,250
Sunbeam-Oster, Inc. ........................... 5,900 127,588
-----------
592,963 4.3%
-----------
INSURANCE
MBIA Inc. ..................................... 4,100 257,275
MGIC Investment Co............................. 8,300 351,713
Partnerre Holdings, Ltd. ...................... 6,400 147,200
TIG Holdings, Inc.............................. 12,200 274,500
-----------
1,030,688 7.4%
-----------
LODGING & RESTAURANTS
Hilton Hotels.................................. 2,800 213,850
Hospitality Franchise System................... 4,200 127,575
-----------
341,425 2.5%
-----------
NATURAL RESOURCES
Potash Corporation of Saskatchewan............. 3,100 164,688 1.2%
-----------
OFFICE EQUIPMENT & SUPPLIES
Danka Business Systems PLC..................... 7,500 205,313 1.5%
-----------
PRINTING & PAPER
Scholastic Corporation *....................... 5,000 280,000
Westvaco Corporation........................... 6,800 285,600
-----------
565,600 4.1%
-----------
RETAIL
Revco D.S., Inc. *............................. 14,000 301,000
Sunglass Hut, Inc. *........................... 4,600 131,963
-----------
432,963 3.1%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
LINCOLN ENTERPRISE PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
TECHNOLOGY
Adobe Systems, Inc............................ 4,000 $ 233,000
Altera Corporation *.......................... 2,400 194,100
Cadence Design Systems, Inc. *................ 15,600 503,094
Cognex Corporation *.......................... 4,900 147,000
Filenet Corporation *......................... 7,700 257,950
General Instrument Corp. *.................... 6,900 235,463
Lam Research Corporation *.................... 5,500 277,750
Micro Warehouse, Inc. *....................... 4,200 147,000
Qualcom, Inc. *............................... 6,300 165,375
Scientific Atlanta, Inc. *.................... 5,700 129,675
Silicon Graphics.............................. 5,600 210,000
Softkey International, Inc.................... 9,400 230,300
Tektronix, Inc................................ 4,500 204,750
-----------
2,935,457 21.1%
-----------
TELECOMMUNICATIONS
LCI International, Inc. ...................... 8,500 214,625 1.5%
-----------
TEXTILES
Tommy Hilfiger Corporation *.................. 16,200 372,600
West Point Stevens............................ 6,500 117,813
-----------
490,413 3.5%
-----------
TRANSPORTATION
Fritz Companies, Inc. *....................... 1,400 84,350 0.6%
--------------------
TOTAL EQUITIES (Cost $11,179,062) 13,216,395 94.8%
--------------------
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95, due 05/01/95, with a maturity value
of $603,032 and an effective yield of 5.55%,
collateralized by U.S. Government Agency
Securities with rates ranging from 5.000% to
10.116% and maturity dates ranging from
06/15/04 to 06/25/24, with an aggregate market
value of $614,772............................. $602,753 602,753 4.3%
--------------------
TOTAL INVESTMENTS (Cost $11,781,815+) 13,819,148 99.1%
Excess of Other Assets over Liabilities 116,467 0.9%
--------------------
NET ASSETS $13,935,615 100.0%
====================
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
+ Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
LINCOLN U.S. GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EQUITIES
BANKING
Finova Group, Inc.............................. 3,600 $ 121,500 0.8%
-----------
BUILDING SUPPLIES
Home Depot..................................... 13,100 546,925
Lowes Co., Inc. ............................... 4,000 115,500
Tyco Lab....................................... 2,700 141,750
-----------
804,175 5.6%
-----------
COMPUTERS & SOFTWARE
Automatic Data Processing, Inc. ............... 4,000 257,000
Cabletron Systems, Inc......................... 2,250 106,875
Computer Associates International, Inc. ....... 2,100 135,188
Computer Sciences Corporation *................ 3,400 167,875
Hewlett-Packard, Inc........................... 4,100 271,113
Microsoft Corporation.......................... 9,900 809,325
Oracle Systems Corporation *................... 16,500 503,250
-----------
2,250,626 15.7%
-----------
CONSUMER PRODUCTS
Gillette Co.................................... 3,400 278,800
Sunbeam-Oster, Inc............................. 3,300 71,363
-----------
350,163 2.4%
-----------
ELECTRONICS
Analog Devices, Inc. *......................... 5,700 153,188
Applied Materials, Inc. *...................... 3,300 203,363
Intel Corporation.............................. 5,100 522,113
Sensormatic Electronics Corporation............ 5,600 166,600
-----------
1,045,264 7.3%
-----------
ENERGY
Enron.......................................... 14,200 482,800 3.4%
-----------
ENTERTAINMENT
Circus Circus Enterprises *.................... 3,300 109,313
National Gaming Corporation.................... 320 3,200
-----------
112,513 0.8%
-----------
FINANCE
Federal Home Loan Mortgage Corporation......... 2,600 169,650
Federal National Mortgage Financial Service.... 5,700 503,025
First Data Corporation......................... 7,100 399,375
First Financial Management Corporation......... 3,600 263,250
First USA, Inc................................. 6,000 255,000
MBNA Corporation............................... 13,400 405,350
Mercury, Inc. ................................. 4,200 63,525
-----------
2,059,175 14.4%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
LINCOLN U.S. GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
HEALTH CARE
Humana, Inc. *................................. 6,800 $ 132,600
Medtronic, Inc................................. 3,900 290,063
Oxford Health Plans *.......................... 2,400 99,900
Sun Healthcare Group, Inc...................... 3,900 94,088
United Healthcare Corporation.................. 12,900 467,625
US Health Care, Inc............................ 9,700 259,475
-----------
1,343,751 9.4%
-----------
INSURANCE
MGIC Investment Co............................. 4,000 169,500
The PMI Group, Inc............................. 1,900 70,775
-----------
240,275 1.7%
-----------
LODGING & RESTAURANTS
Hospitality Franchise System *................. 1,700 51,638
McDonalds Corporation.......................... 4,000 140,000
-----------
191,638 1.5%
-----------
MEDIA
Capital Cities/ABC, Inc........................ 6,500 549,250 3.8%
-----------
NATURAL RESOURCES
Browning-Ferris Industries, Inc................ 2,700 89,100
Pittston Services Corporation.................. 3,400 54,625
-----------
143,725 1.0%
-----------
OFFICE EQUIPMENT & SUPPLIES
Alco Standard Corporation...................... 800 56,700
Danka Business Systems PLC..................... 3,000 82,125
-----------
138,825 1.0%
-----------
PHARMACEUTICALS
Cardinal Health, Inc........................... 3,400 156,825
Pfizer, Inc.................................... 3,200 277,200
R.P. Scherer Corporation *..................... 2,900 138,475
-----------
572,500 4.0%
-----------
REAL ESTATE
Equity Residential Properties.................. 3,200 85,600 0.6%
-----------
RETAIL
Autozone, Inc. ................................ 16,500 381,563
Kohls Corporation *............................ 2,400 107,400
Office Depot................................... 9,750 221,813
Wal-Mart Stores, Inc. ......................... 18,500 439,375
-----------
1,150,151 8.0%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
LINCOLN U.S. GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
SERVICES
Loewen Group, Inc............................ 2,100 $ 59,227
Manpower, Inc................................ 3,400 113,475
-----------
172,702 1.2 %
-----------
TELECOMMUNICATIONS
ALC Communications Corporation *............. 3,000 114,375
Andrew Corporation *......................... 3,250 160,875
British Sky Broadcasting..................... 6,500 156,000
Ericsson (L M) Telephone ADR................. 7,300 489,556
General Instrument Corp...................... 5,400 184,275
Motorola, Inc................................ 8,500 483,431
Nokia Corporation............................ 8,500 348,500
-----------
1,937,012 13.6 %
---------------------
TOTAL EQUITIES (Cost $12,276,417) 13,751,645 96.1 %
---------------------
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95, due 05/01/95, with a maturity value
of $634,870 and an effective yield of 5.55%,
collateralized by U.S. Government Agency
Securities with rates ranging from 5.000% to
10.116% and maturity dates ranging from
06/15/04 to 10/25/24, with an aggregate
market value of $647,235..................... $634,577 634,577 4.4%
---------------------
TOTAL INVESTMENTS (Cost $12,910,994+) 14,386,222 100.6 %
Excess of Liabilities over Other Assets (91,793) (0.6)%
---------------------
NET ASSETS $14,294,429 100.0 %
=====================
</TABLE>
NOTES TO THE PORTFOLIO OF INVESTMENTS:
* Non-income producing security.
+ Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
LINCOLN WORLD GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EQUITIES
BUILDING SUPPLIES
Bien Haus *.................................... 600 $ 253,229
Castorama Dubois Investissem................... 2,019 335,850
Cermex SA...................................... 3,544 204,676
Dyckerhoff AG Preferred Shares................. 717 251,397
Dyckerhoff AG Preferred Shares, New............ 35 11,742
Heidelberger Zement German..................... 300 238,078
Higashi Nihon House *.......................... 4,000 85,223
Kampa Haus..................................... 460 258,856
Nippon Kanzai.................................. 7,200 290,519
Redland, PLC................................... 34,597 237,706
RMC Group, PLC................................. 16,000 263,206
Weru........................................... 350 214,505
Westag and Getalit............................. 750 238,078
-----------
2,883,065 22.4%
-----------
CONGLOMERATES
Jardine Matheson Holdings...................... 22,686 180,354
Sophus Berendsen, Class B...................... 2,600 240,316
Swire Pacific, Ltd, Class B.................... 213,500 230,302
-----------
650,972 5.1%
-----------
CONSUMER PRODUCTS
AFG Arbonia-Forster Holdings................... 200 230,568
SEB Group...................................... 2,430 264,372
Shimano, Inc................................... 8,000 158,067
Sony Corporation............................... 4,000 201,869
-----------
854,876 6.6%
-----------
ELECTRONICS
Fanuc Co....................................... 6,000 271,380
Kyocera Corporation............................ 4,000 309,468
Tokyo Electron, Ltd............................ 8,000 249,479
-----------
830,327 6.5%
-----------
ENERGY
Ampolex, Ltd *................................. 84,000 242,558
Saga Petroleum................................. 21,700 315,175
-----------
557,733 4.3%
-----------
ENTERTAINMENT
Polygram....................................... 5,250 297,661 2.2%
-----------
FARM EQUIPMENT
Kubota Corporation............................. 30,000 217,104 1.7%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
LINCOLN WORLD GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
FOOD & BEVERAGE
Briche Pasquier................................ 2,000 $ 224,911
Docks De France................................ 1,800 269,039
Embotelladora Andina, SA, ADR.................. 10,300 296,125
Koninklijke Ahold NV........................... 9,065 314,801
Van Melle NV................................... 5,814 434,524
-----------
1,539,400 12.0%
-----------
FURNITURE
Daiwa Rakuda Industry Co., Ltd................. 10,000 154,734
Moebel Walther................................. 625 303,008
Shimachu....................................... 8,000 233,292
-----------
691,034 5.4%
-----------
MANUFACTURING
Fuji Machine Manufacturing..................... 11,000 268,404
Futaba Industrial.............................. 13,000 225,911
GEA AG......................................... 500 191,184
NSC (N. Schlumberger).......................... 1,100 210,493
-----------
895,992 7.0%
-----------
PHARMACEUTICALS
Gehe........................................... 700 300,988
Sankyo Co., Ltd................................ 9,900 238,029
-----------
539,017 4.2%
-----------
RETAIL
Familymart..................................... 3,960 188,538
Ito-Yokado, Ltd................................ 4,000 215,676
Levi Strauss Japan............................. 4,000 67,607
Spar Handles................................... 900 232,451
-----------
704,272 5.5%
-----------
SERVICES
Secom Company, Ltd............................. 4,000 260,906 2.0%
-----------
TELECOMMUNICATIONS
Cable & Wireless *............................. 37,000 243,345
Ericsson AB, Class B........................... 4,000 260,532
-----------
503,877 3.9%
-----------
TEXTILES
Wolford, AG *.................................. 4,000 176,392 1.4%
-----------
TRANSPORTATION
IHC Caland NV.................................. 10,000 273,823
Sembawang Shipyard............................. 30,000 205,596
Sime Darby, Ltd................................ 100,000 109,800
-----------
589,219 4.6%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
LINCOLN WORLD GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
UTILITIES
China Light and Power Co.................... 48,000 $ 226,330 1.8%
--------------------
TOTAL EQUITIES (Cost $11,452,670) 12,418,177 96.6%
--------------------
PURCHASED CURRENCY PUT OPTIONS
Deutsche Mark, DM 1.385/$, expire 04/25/96.. $2,500,000 121,000
Japanese Yen, (Yen)83.73/$, expire 04/23/96. 3,700,000 157,250
-----------
278,250 2.2%
--------------------
TOTAL PURCHASED CURRENCY OPTIONS (Cost
$260,122) 278,250 2.2%
--------------------
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95, due 05/01/95, with a maturity
value of $129,549 and an effective yield of
5.55%, collateralized by U.S. Government
Agency Securities with rates ranging from
5.000% to 10.116% and maturity dates ranging
from 06/15/04 to 10/25/24, with an aggregate
market value of $132,046.................... $ 129,489 129,489 1.0%
--------------------
TOTAL INVESTMENTS (Cost $11,842,281+) 12,825,916 99.8%
Excess of Other Assets over Liabilities 29,906 0.2%
--------------------
NET ASSETS $12,855,822 100.0%
====================
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
+ Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
LINCOLN WORLD GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
At April 30, 1995, geographic concentration of the Fund's investments was as
follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
COUNTRY NET ASSETS
------- -------------
<S> <C>
Japan 29.2%
Germany 20.6
France 11.7
Netherlands 10.3
Great Britain 5.8
Hong Kong 4.4
Singapore 3.0
Norway 2.5
Chile 2.3
Sweden 2.0
Australia 1.9
Denmark 1.9
Switzerland 1.8
Austria 1.4
United States 1.0
----
TOTAL 99.8%
====
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- ----------------------------------------------------------------
<S> <C> <C> <C>
EQUITIES
AUTOMOTIVE
Swedish Motors................. 28,000 $ 73,430 0.7%
-----------
BANKING
Cho Hung Bank.................. 5,000 60,668
Fuji Bank...................... 5,000 120,217
Guoco Group, Ltd *............. 40,000 151,920
HSBC Holdings, PLC............. 10,800 125,216
Panin Bank..................... 63,000 62,068
Sakura Bank, Ltd............... 6,000 129,977
Thai Military Bank............. 35,000 99,257
-----------
749,323 7.2%
-----------
BUILDING SUPPLIES
Asia Cement *.................. 3,400 68,850
Hyundai Engineering &
Construction.................. 1,250 56,241
Komatsu, Ltd................... 13,000 103,363
Maeda Road Construction Co..... 5,000 102,958
Sang Ying Cement, Co........... 630 16,363
-----------
347,775 3.3%
-----------
CHEMICALS
Asahi Chemical Industry
Company, Ltd.................. 20,000 155,210
Hanwha Chemical Corporation *.. 1,400 32,137
Interphil Laboratories Inc.,
Class B *..................... 1,475,000 98,530
Kansai Paint................... 23,000 132,501
Metacorp Berhad................ 40,000 118,956
-----------
537,334 5.1%
-----------
COMPUTERS & SOFTWARE
Creative Technology, Ltd *..... 12,000 121,500
Koekisha Co., Ltd.............. 1,000 45,230
-----------
166,730 1.6%
-----------
CONGLOMERATES
Guangdong Investment, Ltd...... 220,000 101,596
Jardine Strategic Holdings,
Ltd........................... 92,575 420,310
Loxely Company, Ltd............ 7,000 132,059
-----------
653,965 6.3%
-----------
CONSUMER PRODUCTS
Mizuno Corporation............. 8,000 74,463
Sanyo Universal................ 6,000 30,250
-----------
104,713 1.0%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -----------------------------------------------------------------
<S> <C> <C> <C>
ELECTRONICS
Goldstar Co. GDR *.............. 7,000 $ 99,750
Hong Kong Electric.............. 80,000 245,448
Samsung Electronics GDR 144a *.. 99 15,908
Samsung Electronics *........... 3,234 159,291
Samsung Electronics, GDS *...... 1 84
Shanghai Shangling Electric
Apparatus Co................... 209,000 154,660
-----------
675,141 6.5%
-----------
ENERGY
Ampolex, Ltd *.................. 25,000 72,190
Belle Corporation *............. 660,000 105,138
Teikoku Oil Company............. 18,000 134,977
-----------
312,305 3.0%
-----------
ENGINEERING
IJM Corporation Berhad, Class A. 40,000 132,712
Kumagai Gumi.................... 115,000 85,422
-----------
218,134 2.1%
-----------
ENTERTAINMENT
Magnum Corporation *............ 75,000 136,560
Tanjong, PLC.................... 50,000 142,625
-----------
279,185 2.7%
-----------
FINANCE
Dhana Siam Finance.............. 37,000 136,896
Gadek Berhad.................... 15,500 82,156
Lend Lease Corporation, Ltd..... 9,600 122,614
Manhattan Card Co., Ltd......... 159,000 65,731
-----------
407,397 3.9%
-----------
FOOD & BEVERAGE
Chosun Brewery Company *........ 1,850 74,015
Mos Food Services............... 3,300 97,018
Pt Sinar Mas Agro Research and
Technology..................... 56,000 46,396
-----------
217,429 2.1%
-----------
HEALTH CARE
NIC Corporation................. 2,600 36,208
Shimadzo Corporation............ 18,000 112,909
-----------
149,117 1.4%
-----------
INSURANCE
Malaysia Assurance Alliance..... 44,000 143,312 1.4%
-----------
LODGING & RESTAURANTS
AAPC Limited.................... 200,000 106,200 1.0%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- ----------------------------------------------------------------
<S> <C> <C> <C>
MANUFACTURING
Kahma Company, Ltd............. 2,860 $ 59,232
UMW Holdings Berhad............ 55,533 138,188
-----------
197,420 1.9%
-----------
METAL & MINING
Aberfoyle, Ltd................. 3,300 7,321
Alcan Australia, Ltd *......... 70,000 142,051
Moon Bae Steel Co., Ltd *...... 800 44,809
North, Ltd..................... 50,000 121,470
Odin Mining Investment Co. *... 300,000 102,570
Pohang Iron & Steel, Ltd....... 900 24,863
Pt Supreme Cable Manufacturing. 18,000 49,977
Sumitomo Metal Industries *.... 34,000 111,693
Tung Ho Steel GDR.............. 2,670 55,403
Van Der Horst *................ 7,000 22,806
Western Mining Corporation,
Ltd........................... 18,625 105,395
-----------
788,358 7.5%
-----------
NATURAL RESOURCES
Pt Inti Indorayon Utama........ 60,000 120,912 1.2%
-----------
PHARMACEUTICALS
Olympus Optical................ 11,000 109,980 1.1%
-----------
PLASTICS
Thai Modern Plastic Industry... 40,000 146,372 1.4%
-----------
PRINTING & PAPER
Asia Securities Printing Co.... 1,100 48,444
Picop Resources *.............. 125,000 44,625
Sumitomo Forestry *............ 3,000 52,848
-----------
145,917 1.2%
-----------
REAL ESTATE
Christiani & Nielsen Thai...... 40,000 92,700
Hotel Properties............... 65,000 121,277
Mitsui Fudosan................. 12,000 139,690
New World Development.......... 47,000 122,040
Singapore Land................. 15,000 96,879
Supali Public Company, Ltd..... 21,400 40,024
Walker Corporation, Ltd........ 120,000 48,000
-----------
660,610 6.3%
-----------
RETAIL
Itochu Corporation............. 20,000 135,690 1.3%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
TELECOMMUNICATIONS
Citic Pacific, Ltd......................... 60,000 $ 146,880
Dae Ryung Industries, Inc. *............... 750 44,468
Pakistan Telecom GDR *..................... 231 24,140
Pt Indonesia Satellite ADR *............... 3,100 112,375
Telecomasia Corporation.................... 10,000 37,203
-----------
365,066 3.5%
-----------
TEXTILES
Pt Indorama Synthetics..................... 50,000 153,380
Saha Union Corporation, Ltd................ 79,300 108,015
Westmont Berhad............................ 25,000 108,235
Yizheng Chemical Fibre Company............. 396,000 131,710
-----------
501,340 4.8%
-----------
TRANSPORTATION
Continental Mariner Investment............. 350,000 42,945
Jurong Shipyards........................... 13,000 99,821
Kawasaki Kisen *........................... 4,000 14,331
Keppel Corporation, Ltd.................... 18,000 145,964
Mayne Nickless, Ltd........................ 30,000 141,396
-----------
444,457 4.3%
-----------
UTILITIES
Korea Electric Power Corporation........... 5,600 116,900 1.1%
-------------------
TOTAL EQUITIES (Cost
$10,161,453) 8,874,512 84.9%
-------------------
CORPORATE BONDS
COMPUTERS & SOFTWARE
Acer, Inc., Cv............ 4.00% 06/10/01 $ 20,000 53,800 0.5%
-----------
ELECTRONICS
United Micro Electronics.. 1.25% 06/08/04 120,000 187,200 1.8%
-----------
FOOD & BEVERAGE
Cheil Foods & Chemicals... 3.00% 12/31/06 110,000 128,700
President Enterprises..... 0.00% 07/22/01 80,000 94,000
-----------
222,700 2.1%
-----------
MANUFACTURING
Essar Gujarat, Ltd........ 5.50% 08/05/98 110,000 126,500 1.2%
-----------
MARINE SERVICES
Yang Ming Marine.......... 2.00% 10/06/01 80,000 81,600 0.8%
-----------
TRANSPORTATION
U-Ming Marine, Cv......... 1.50% 02/07/01 22,000 22,440 0.2%
-------------------
TOTAL CORPORATE BONDS
(Cost $672,127) 694,240 6.6%
-------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS & RIGHTS
Daewoo Corporation, Warrants, 11/08/96........ $ 11 $ 3,850
Jardine Strategic Holdings, Warrants,
05/22/98..................................... 6,375 638
Pizza Co. Ltd, Warrants, 09/09/99 ............ 10,000 4,269
Salomon Brothers, Warrants, 01/18/96.......... 26,000 7,150
Sanyo Universal, Rights, 06/27/98............. 18,000 76,846
UMW Holdings Berhad, Warrants, 01/26/00....... 6,533 1,546
Van Der Horst, Warrants, 08/31/98............. 20,000 49,946
Worldwide Holdings, Warrants, 09/22/99........ 21,000 1,699
Yukong, Ltd, Warrants, 06/25/96............... 19 37,525
-----------
TOTAL WARRANTS & RIGHTS (Cost $277,535) 183,469 1.8%
--------------------
INVESTMENT COMPANIES (Cost $175,000)
China North Industries Investment, Ltd........ $175,000 175,000 1.7%
--------------------
TOTAL INVESTMENTS (Cost $11,286,115+) $ 9,927,221 95.0%
Excess of Other Assets over Liabilities 528,353 5.0%
--------------------
NET ASSETS $10,455,574 100.0%
====================
</TABLE>
NOTES TO THE PORTFOLIO OF INVESTMENTS:
* Non-income producing security.
+ Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
LINCOLN NEW PACIFIC PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
At April 30, 1995, geographic concentration of the Fund's investments was as
follows:
<TABLE>
<CAPTION>
PERCENTAGE OF
COUNTRY NET ASSETS
------- -------------
<S> <C>
Japan 18.5%
Hong Kong 12.7
Malaysia 9.6
Thailand 9.3
Singapore 9.0
South Korea 8.8
Australia 8.3
Indonesia 6.4
Taiwan 5.4
China 4.4
Philippines 2.4
Pakistan 0.2
----
TOTAL 95.0%
====
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
LINCOLN GOVERNMENT INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY
OBLIGATIONS
FEDERAL HOME LOAN BANK
Federal Home Loan Bank Note... 5.80% 04/20/99 $ 500,000 $ 499,595 4.5%
-----------
FEDERAL HOME LOAN MORTGAGE
CORPORATION
Federal Home Loan Mortgage
Corporation.................. 4.88% 06/23/98 500,000 486,020 4.4%
-----------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION
Federal National Mortgage
Association ................. 6.00% 03/01/09 953,449 890,874
FNMA Medium Term Note......... 5.24% 07/15/98 500,000 476,630
FNMA Medium Term Note......... 5.85% 02/02/98 500,000 487,850
-----------
1,855,354 16.8%
-----------
STUDENT LOAN MARKETING
ASSOCIATION
Student Loan Marketing
Association.................. 5.12% 03/02/99 500,000 481,975 4.4%
-----------
U.S. TREASURY
U.S. Treasury Note............ 8.87% 02/15/96 1,000,000 1,019,220
U.S. Treasury Note............ 5.50% 04/30/96 750,000 743,790
U.S. Treasury Note............ 6.25% 08/31/96 250,000 249,180
U.S. Treasury Note............ 5.12% 11/30/98 750,000 710,040
U.S. Treasury Note............ 6.50% 04/30/99 250,000 247,110
U.S. Treasury Note............ 6.88% 08/31/99 250,000 250,040
U.S. Treasury Note............ 7.88% 11/15/04 1,250,000 1,318,363
U.S. Treasury Bond............ 8.75% 05/15/17 1,700,000 1,931,625
--------------------
6,469,368 58.7%
--------------------
TOTAL GOVERNMENT AND AGENCY OBLIGATIONS (Cost
$9,741,623) 9,792,312 88.8%
--------------------
CORPORATE BONDS
Associates Corporation of
North America................ 9.12% 04/01/00 400,000 426,796
Wal-Mart Stores, Inc.......... 7.50% 05/15/04 400,000 400,140
-----------
826,936 7.5%
--------------------
TOTAL CORPORATE BONDS (Cost $852,548) 826,936 7.5%
--------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
LINCOLN GOVERNMENT INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95,
due 05/01/95, with a maturity value of
$234,062 and an
effective yield of 5.55%, collateralized by
U.S. Government
Agency Securities with rates ranging from
5.000% to 10.116%
and maturity dates ranging from 06/15/04 to
10/25/24, with an
aggregate market value of $238,599........... $ 233,954 $ 233,954 2.1%
--------------------
TOTAL INVESTMENTS (Cost $10,828,125) 10,853,202 98.4%
Excess of Other Assets over Liabilities 175,201 1.6%
--------------------
NET ASSETS $11,028,403 100.0%
====================
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS:
+Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
LINCOLN CORPORATE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
AIRLINES
Delta Airlines............... 8.25% 12/27/07 $ 250,000 $ 252,442
United Airlines, Inc......... 9.21% 01/21/17 450,000 423,294
-----------
675,736 5.1%
-----------
AUTOMOTIVE
Chrysler Finance Corporation. 9.50% 12/15/99 400,000 425,161
Ford Motor Credit
Corporation................. 7.25% 05/15/99 340,000 339,258
-----------
764,419 5.7%
-----------
BANKING
First Chicago Corporation.... 6.38% 01/30/09 250,000 213,234
NationsBank Corporation...... 6.63% 01/15/98 220,000 217,409
-----------
430,643 3.2%
-----------
BUILDING SUPPLIES
Georgia Pacific.............. 9.12% 07/01/22 400,000 419,332 3.1%
-----------
CHEMICALS
Dow Capital.................. 9.00% 05/15/10 155,000 168,549 1.3%
-----------
CONGLOMERATES
General Electric Capital
Corporation................. 8.75% 05/21/07 400,000 437,177 3.3%
-----------
CONSUMER SERVICES
Service Corporation
International............... 8.38% 12/15/04 250,000 259,909 2.0%
-----------
ENERGY
Atlantic Richfield Co........ 9.88% 03/01/16 250,000 292,004
Pennzoil Co.................. 10.13% 11/15/09 290,000 335,756
Phillips Petroleum........... 9.18% 09/15/21 250,000 263,001
Tenneco Credit............... 9.63% 08/15/01 250,000 273,363
-----------
1,164,124 8.7%
-----------
ENTERTAINMENT
Blockbuster Entertainment.... 6.63% 02/15/98 100,000 96,669 0.7%
-----------
FARM EQUIPMENT
John Deere Credit
Corporation................. 8.62% 08/01/19 100,000 106,401 0.8%
-----------
FINANCE
American Express Co.......... 8.50% 08/15/01 200,000 210,616
CIT Group Holdings........... 5.65% 11/15/95 200,000 199,126
Heller Financial Corporation. 5.63% 03/15/00 100,000 92,626
International Lease Finance.. 8.25% 01/15/00 250,000 257,042
ITT Financial Corporation.... 10.13% 04/05/99 83,000 89,990
Smith Barney Holdings........ 7.88% 10/01/99 100,000 101,188
-----------
950,588 7.1%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
LINCOLN CORPORATE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOOD & BEVERAGE
Archer Daniels.............. 8.87% 04/15/11 $ 250,000 $ 272,921
Coca Cola Enterprises, Inc.
........................... 8.00% 01/04/05 200,000 214,136
Conagra, Inc................ 9.88% 11/15/05 250,000 287,330
PepsiCo, Inc................ 7.88% 08/15/96 360,000 365,383
-----------
1,139,770 8.6%
-----------
INSURANCE
Transamerica Finance
Corporation................ 6.80% 03/15/99 150,000 147,495
Travelers, Inc. ............ 8.62% 02/01/07 120,000 125,688
-----------
273,183 2.1%
-----------
METAL & MINING
Newmont Gold Company........ 8.91% 01/05/09 100,000 102,326 0.8%
-----------
NATURAL RESOURCES
Noranda, Inc................ 8.13% 06/15/04 200,000 202,564 1.5%
-----------
RETAIL
Federated Department Stores. 10.00% 02/15/01 100,000 106,000
Sears Roebuck & Co.......... 9.05% 02/06/12 500,000 539,285
-----------
645,285 4.8%
-----------
TELECOMMUNICATIONS
GTE Corporation............. 9.38% 12/01/00 100,000 107,759
New York Telephone.......... 6.50% 03/01/05 200,000 183,793
-----------
291,552 2.2%
-----------
UTILITIES
Carolina Power & Light...... 9.00% 04/01/22 250,000 261,059
Cleveland Electric Illum.... 9.38% 03/01/17 250,000 224,469
Great Lakes Power, Inc...... 8.90% 12/01/99 100,000 102,694
Long Island Lighting
Company.................... 9.63% 07/01/24 200,000 190,885
Pennsylvania Power & Light.. 7.70% 10/01/09 200,000 203,322
Texas Gas Transmission...... 8.62% 04/01/04 100,000 105,554
Texas Utilities............. 7.37% 11/01/99 450,000 448,298
Utilicorp United, Inc. ..... 8.45% 11/15/99 100,000 102,724
Virginia Electric & Power
Co......................... 6.00% 08/01/02 200,000 182,956
-----------
1,821,961 13.7%
---------------------
TOTAL CORPORATE BONDS (Cost
$10,025,335) 9,950,188 74.7%
---------------------
GOVERNMENT AND AGENCY OBLI-
GATIONS
FEDERAL HOME LOAN
Federal Home Loan Mortgage
Corporation................ 4.88% 06/23/98 500,000 479,884 3.6%
-----------
STUDENT LOAN MARKETING
ASSOCIATION
Student Loan Marketing
Association................ 5.12% 03/02/99 500,000 477,777 3.6%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
LINCOLN CORPORATE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. TREASURY
U.S. Treasury Bond............ 8.75% 05/15/17 $1,000,000 $ 1,137,186
U.S. Treasury Note............ 7.88% 11/15/04 250,000 263,750
-----------
1,400,936 10.5%
---------------------
TOTAL GOVERNMENT AND AGENCY OBLIGATIONS (Cost $2,354,412) 2,358,597 17.7%
---------------------
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95,
due 05/01/95, with a maturity value of $555,328
and an
effective yield of 5.55%, collateralized by
U.S. Government
Agency Securities with rates ranging from
5.000% to 10.116%
and maturity dates ranging from 06/15/04 to
10/25/24, with an
aggregate market value of $566,135............. 555,071 555,071 4.2%
---------------------
TOTAL INVESTMENTS (Cost
$12,934,818+) 12,863,856 96.6%
Excess of Other Assets over
Liabilities 458,378 3.4%
---------------------
NET ASSETS $13,322,234 100.0%
=====================
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS:
+Aggregate cost for Federal tax purposes (Note D).
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
LINCOLN TAX-FREE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA
Alabama State Public School and
College Authority............. 4.50% 08/01/06 $400,000 $ 353,500 3.4%
-----------
CALIFORNIA
San Diego County, California
Water Authority (FGIC)........ 5.30% 05/01/02 400,000 398,500 3.9%
-----------
CONNECTICUT
Connecticut State, Series A,
G.O........................... 5.40% 03/15/08 100,000 96,750 0.9%
-----------
DISTRICT OF COLUMBIA
District of Columbia, G.O.
Unlimited, Refunding Bonds
Series A-1 (MBIA)............. 6.00% 06/01/11 400,000 389,000 3.8%
-----------
FLORIDA
Florida State Municipal Power
Authority (AMBAC)............. 5.10% 10/01/14 300,000 268,125
Jacksonville, Florida
Electrical Authority.......... 5.20% 10/01/12 300,000 274,125
-----------
542,250 5.3%
-----------
GEORGIA
De Kalb County, Georgia, Water
and Sewer (AMBAC)............. 5.12% 10/01/14 250,000 222,813
Georgia Municipal Electric
Power Authority............... 6.00% 01/01/06 400,000 413,000
-----------
635,813 6.2%
-----------
HAWAII
Honolulu, Hawaii City & County
(PRE-RE)...................... 6.70% 08/01/01 400,000 436,500 4.2%
-----------
IDAHO
Idaho State Tax Anticipation
Notes......................... 4.50% 06/29/95 100,000 99,995 1.0%
-----------
ILLINOIS
Alton, Illinois, Health
Facilities Authority (PRE-RE). 7.20% 02/15/01 400,000 447,500
Chicago, Illinois, Park
District G.O.................. 6.10% 11/15/05 100,000 103,250
Illinois Health Facilities
Authority (MBIA).............. 6.25% 08/15/13 100,000 100,625
-----------
651,375 6.3%
-----------
INDIANA
Indianapolis, Indiana Utilities
District (FGIC)............... 5.00% 06/01/06 400,000 377,000
Lawrence, Indiana Central High
School Building (MBIA)........ 5.20% 07/01/08 400,000 371,000
Perry, Indiana, Multi-School
Building...................... 4.60% 07/15/02 400,000 378,500
-----------
1,126,500 11.0%
-----------
MAINE
Cumberland County, Maine, Maine
G.O. Unlimited (PRE-RE)....... 6.40% 02/01/01 250,000 268,438 2.6%
-----------
MASSACHUSETTS
Chelsea, Massachusetts, School
improvement (AMBAC)........... 5.60% 06/15/05 100,000 100,500
Massachusetts State (PRE-RE)... 7.00% 12/01/00 300,000 329,625
Massachusetts Water Resource
Authority..................... 5.50% 11/01/15 400,000 367,500
-----------
797,625 7.7%
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
LINCOLN TAX-FREE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MICHIGAN
Michigan Municipal Bond
Authority..................... 5.40% 10/01/14 $400,000 $ 368,500
Michigan Public Power Agency... 5.50% 01/01/13 400,000 378,500
-----------
747,000 7.2%
-----------
NEVADA
Clark County, Nevada, School
District (FGIC)............... 6.38% 06/15/05 100,000 106,125 1.0%
-----------
NEW HAMPSHIRE
New Hampshire State Turnpike
Systems (PRE-RE).............. 7.40% 04/01/00 230,000 257,312 2.5%
-----------
NEW YORK
New York State Local Assistance
Corporation................... 6.00% 04/01/14 400,000 394,000
New York State Urban
Development (AMBAC)........... 5.10% 01/01/08 400,000 377,000
-----------
771,000 7.5%
-----------
SOUTH CAROLINA
Charleston, South Carolina,
Certificates of Participation
(AMBAC)....................... 5.00% 09/01/15 300,000 260,625 2.5%
-----------
TEXAS
Austin, Texas, Hotel Occupancy
Tax (AMBAC)................... 5.12% 11/15/14 400,000 355,500
Harris County, Texas, Toll Road
Revenue Bonds (FGIC).......... 5.00% 08/15/16 300,000 259,500
-----------
615,000 6.0%
-----------
VIRGINIA
Fairfax County, Virginia, Water
Authority..................... 5.75% 04/01/14 400,000 386,500 3.8%
-----------
WASHINGTON
Washington State Motor Vehicle
Fuel.......................... 5.45% 09/01/07 100,000 97,375
Washington State Public Power
Supply........................ 5.37% 07/01/15 300,000 263,250
-----------
360,625 3.5%
-----------
WISCONSIN
Wisconsin Clean Water.......... 5.30% 06/01/12 400,000 368,500
Wisconsin State Transportation. 4.50% 07/01/95 200,000 200,250
-----------
568,750 5.5%
--------------------
TOTAL MUNICIPAL BONDS (Cost $10,459,367) 9,869,183 95.8%
--------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
LINCOLN TAX-FREE INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENT
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95,
due 05/01/95, with a maturity value of
$395,874 and an
effective yield of 5.55%, collateralized by
U.S. Government
Agency Securities with rates ranging from
5.000% to 10.116%
and maturity dates ranging from 06/15/04 to
10/25/24, with an
aggregate market value of $403,568............ $395,688 $ 395,688 3.8%
--------------------
TOTAL INVESTMENTS (Cost $10,855,055+) 10,264,871 99.6%
Excess of Other Assets over Liabilities 41,470 0.4%
--------------------
NET ASSETS $10,306,341 100.0%
====================
</TABLE>
NOTES TO THE PORTFOLIO OF INVESTMENTS
+ Aggregate cost for Federal Tax Purposes (Note D).
AMBAC American Municipal Bond Assurance Corporation
FGIC Financial Guaranty Insurance Corporation
G.O. General Obligations
MBIA Municipal Bond Insurance Association
PRE-RE Pre-refunded with U.S. Treasuries (Call date is shown instead of
maturity date.)
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
LINCOLN CASHFUND PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
MATURITY PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION RATE DATE AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER
American General Corporation... 5.97% 05/01/95 $567,000 $ 563,333
Associates Corporation of North
America....................... 6.06% 05/22/95 530,000 530,000
Chemical Banking Corporation... 6.02% 10/17/95 500,000 485,034
DuPont Co. .................... 6.00% 05/12/95 450,000 447,225
General Electric Capital
Corporation................... 6.00% 07/17/95 300,000 295,500
International Lease Finance.... 6.02% 10/16/95 560,000 543,331
Merrill Lynch.................. 6.05% 05/12/95 558,000 552,374
Met Life Funding............... 6.00% 05/25/95 567,000 561,425
Monsanto....................... 6.08% 06/01/95 555,000 546,939
PHH Corporation................ 5.97% 05/23/95 175,000 174,071
Phillip Morris................. 6.02% 07/12/95 450,000 443,228
RR Donnelley & Sons............ 5.95% 06/08/95 400,000 397,091
SmithKline Beecham............. 6.02% 05/30/95 558,000 551,095
Temple-Inland.................. 5.95% 05/26/95 560,000 557,129
US West Communication.......... 6.03% 06/01/95 560,000 554,560
Wal Mart Stores................ 6.00% 06/19/95 595,000 652,257
-----------
TOTAL COMMERCIAL PAPER (Cost $7,755,335) 7,755,335 69.4%
--------------------
FLOATING RATE NOTES
Boatmens Bank (a).............. 6.25% 02/14/96 558,000 557,925
Comerica Bank (a).............. 5.95% 11/22/95 545,000 544,720
MPNC Floating Rate Note (a).... 5.97% 08/07/95 500,000 499,963
Toyota Motor Credit (a)........ 6.03% 01/12/96 545,000 545,000
-----------
TOTAL FLOATING RATE NOTES (Cost $2,147,608) 2,147,608 19.2%
--------------------
U.S. GOVERNMENT OBLIGATIONS
U.S. Treasury Bill............. 6.24% 08/10/95 550,000 532,663
U.S. Treasury Bill............. 6.61% 02/08/96 700,000 653,216
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS (Cost $1,185,879) 1,185,879 10.6%
--------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
LINCOLN CASHFUND PORTFOLIO
PORTFOLIO OF INVESTMENTS
APRIL 30, 1995 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
PAR/SHARE MARKET OR PERCENT OF
DESCRIPTION AMOUNT FAIR VALUE NET ASSETS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENT
Prudential-Bache Repurchase Agreement, dated
04/28/95,
due 05/01/95, with a maturity value of $62,576
and an
effective yield of 5.55%, collateralized by
U.S. Government
Agency Securities with rates ranging from
5.000% to 10.116%
and maturity dates ranging from 06/15/04 to
10/25/24, with an
aggregate market value of $63,766............. $ 62,547 $ 62,547 0.6%
--------------------
TOTAL INVESTMENTS (Cost $11,151,369+) $11,151,369 99.8%
Excess of Other Assets over Liabilities 21,422 0.2%
--------------------
NET ASSETS $11,172,791 100.0%
====================
</TABLE>
NOTES TO THE PORTFOLIO OF INVESTMENTS:
+Aggregate cost for Federal tax purposes (Note D).
(a)Interest rate is reset on a weekly basis.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
31
<PAGE>
LINCOLN ADVISOR FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN
GROWTH AND INCOME ENTERPRISE U.S. GROWTH WORLD GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(Notes A & B) $17,928,796 $13,819,148 $14,386,222 $12,825,916
Foreign currency, at
value -- -- -- --
Receivable from:
Securities sold 277,026 268,613 275,213 --
Fund shares sold 78,226 46,144 40,617 27,101
Dividends and interest 22,863 6,272 6,553 40,891
Advisor -- 14,459 -- 16,370
Deferred organization
expense 10,396 10,396 10,396 10,396
----------- ----------- ----------- -----------
Total assets 18,317,307 14,165,032 14,719,001 12,920,674
----------- ----------- ----------- -----------
LIABILITIES:
Payable for:
Securities purchased 657,528 175,046 353,831 --
Fund shares redeemed 28,132 1,991 18,358 4,021
Distributions declared 36,789 -- -- --
Directors' fees and
expenses 735 735 735 735
Affiliates:
Advisor 7,280 -- 1,049 --
Service and
distribution fees 11,602 12,511 10,035 11,522
Accrued expenses and
other liabilities 42,636 39,134 40,564 48,574
----------- ----------- ----------- -----------
Total Liabilities 784,702 229,417 424,572 64,852
----------- ----------- ----------- -----------
NET ASSETS: $17,532,605 $13,935,615 $14,294,429 $12,855,822
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital $16,802,242 $13,526,076 $13,973,507 $12,157,609
Undistributed net
investment income
(loss) or
distributions in
excess of net
investment income (6,912) (46,879) (35,395) (61,184)
Accumulated net
realized gain (loss)
on investments and
foreign currency
transactions (377,023) (1,527,915) (1,118,913) (228,757)
Net unrealized
appreciation
(depreciation) on
investments, forward
currency contracts,
foreign currency and
other assets 1,114,298 1,984,333 1,475,230 988,154
----------- ----------- ----------- -----------
NET ASSETS: $17,532,605 $13,935,615 $14,294,429 $12,855,822
=========== =========== =========== ===========
CLASS A $11,874,237 $12,288,455 $10,889,577 $11,912,818
=========== =========== =========== ===========
CLASS B $920,052 $1,190,103 $353,176 $799,352
=========== =========== =========== ===========
CLASS C $41,805 $52,980 $14,340 $42,900
=========== =========== =========== ===========
CLASS D $4,696,511 $404,077 $3,037,336 $100,752
=========== =========== =========== ===========
SHARES OUTSTANDING:
CLASS A 1,151,701 1,234,848 1,075,617 1,115,618
=========== =========== =========== ===========
CLASS B 92,159 112,581 35,058 79,502
=========== =========== =========== ===========
CLASS C 3,980 4,905 1,367 4,258
=========== =========== =========== ===========
CLASS D 455,705 40,433 298,921 9,416
=========== =========== =========== ===========
CLASS A SHARES
Net asset value and
redemption price per
share $10.31 $9.95 $10.12 $10.68
=========== =========== =========== ===========
Maximum sales charge 5.50% 5.50% 5.50% 5.50%
Maximum offering price
per share $10.91 $10.53 $10.71 $11.30
=========== =========== =========== ===========
CLASS B SHARES
Net asset value and
offering price* $9.98 $10.57 $10.07 $10.05
=========== =========== =========== ===========
CLASS C SHARES
Net asset value and
offering price* $10.50 $10.80 $10.49 $10.08
=========== =========== =========== ===========
CLASS D SHARES
Net asset value,
offering price and
redemption price per
share $10.31 $9.99 $10.16 $10.70
=========== =========== =========== ===========
Cost of investments $16,814,498 $11,781,815 $12,910,994 $11,842,281
Cost of foreign currency -- -- -- ($3,162)
</TABLE>
*Redemption price per
share is equal to net
asset value less any
applicable contingent
deferred sales
charge.
The accompanying notes are an
32
<PAGE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN LINCOLN
NEW PACIFIC GOVERNMENT INCOME CORPORATE INCOME TAX-FREE INCOME CASHFUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------- ----------------- ---------------- --------------- -----------
<S> <C> <C> <C> <C>
$ 9,927,221 $10,853,202 $12,863,856 $10,264,871 $11,151,369
535,611 -- -- -- --
334,565 -- 243,010 -- --
7,150 43,597 47,944 15 5,582
57,370 233,353 291,195 160,561 67,481
52,646 46,537 40,652 55,831 27,235
10,396 10,396 10,396 10,396 10,396
- ----------- ----------- ----------- ----------- -----------
10,924,959 11,187,085 13,497,053 10,491,674 11,262,063
- ----------- ----------- ----------- ----------- -----------
414,981 -- -- 99,122 --
290 3,556 13,284 -- 786
-- 104,777 109,963 35,474 43,693
735 735 735 735 735
-- -- -- -- --
9,540 9,248 9,446 8,979 --
43,839 40,366 41,391 41,023 44,058
- ----------- ----------- ----------- ----------- -----------
469,385 158,682 174,819 185,333 89,272
- ----------- ----------- ----------- ----------- -----------
$10,455,574 $11,028,403 $13,322,234 $10,306,341 $11,172,791
=========== =========== =========== =========== ===========
$12,213,924 $11,670,708 $14,167,128 $10,892,502 $11,172,791
(42,505) (9,912) (6,578) 4,023 --
(363,649) (656,919) (767,355) -- --
(1,352,196) 24,528 (70,961) (590,184) --
- ----------- ----------- ----------- ----------- -----------
$10,455,574 $11,028,403 $13,322,234 $10,306,341 $11,172,791
=========== =========== =========== =========== ===========
$9,848,663 $10,169,700 $10,375,133 $10,177,194 $11,172,791
=========== =========== =========== =========== ===========
$527,395 $262,567 $292,650 $118,298 --
=========== =========== =========== =========== ===========
$18,581 $1,652 $271 $10,849
=========== =========== =========== =========== ===========
$60,935 $594,484 $2,654,180 --
=========== =========== =========== =========== ===========
1,157,387 1,084,839 1,130,259 1,081,513 11,172,791
=========== =========== =========== =========== ===========
59,736 26,819 29,840 11,860 --
=========== =========== =========== =========== ===========
2,146 167 28 1,110
=========== =========== =========== =========== ===========
7,126 64,678 297,053 --
=========== =========== =========== =========== ===========
$8.51 $9.37 $9.18 $9.41 $1.00
=========== =========== =========== =========== ===========
5.50% 4.50% 4.50% 4.50% --
$9.01 $9.81 $9.61 $9.85 $1.00
=========== =========== =========== =========== ===========
$8.83 $9.79 $9.81 $9.97 --
=========== =========== =========== =========== ===========
$8.66 $9.91 $9.80 $9.78
=========== =========== =========== ===========
$8.55 $9.19 $8.94 --
=========== =========== =========== ===========
$11,286,115 $10,828,125 $12,934,818 $10,855,055 $11,151,369
$600,000 -- -- -- --
</TABLE>
integral part of the financial statements.
33
<PAGE>
LINCOLN ADVISOR FUNDS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN
GROWTH AND INCOME ENTERPRISE U.S. GROWTH WORLD GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $53,507 $29,747 $ 29,128 $17,772
Dividends 130,010 38,453 53,011 46,484
---------- ---------- -------- ---------
Total investment
income 183,517 68,200 82,139 64,256
---------- ---------- -------- ---------
EXPENSES (NOTE A):
Investment Advisory
fees (Note C) 58,947 48,565 45,616 65,314
Custody and
administration fees 35,949 45,850 38,124 48,563
Audit and legal fees 11,817 11,824 10,824 9,336
Registration and
filing fees 33,145 32,878 32,785 32,570
Transfer agency fees 8,628 8,628 8,628 8,628
Directors' fees and
expenses 4,082 4,082 4,082 4,082
Amortization of
organization costs
(Note F) 1,435 1,435 1,435 1,435
Other 820 821 821 821
Fees waived and
expenses reimbursed by
the Advisor (Note C) (51,667) (63,024) (44,567) (81,684)
---------- ---------- -------- ---------
103,156 91,059 97,748 89,065
Distribution and
service fees (Note C):
Class A Shares 18,448 18,953 18,255 19,469
Class B Shares 3,723 4,862 1,491 3,172
Class C Shares 149 205 40 200
---------- ---------- -------- ---------
Net expenses 125,476 115,079 117,534 111,906
---------- ---------- -------- ---------
NET INVESTMENT INCOME
(LOSS) 58,041 (46,879) (35,395) (47,650)
---------- ---------- -------- ---------
REALIZED AND UNREALIZED
GAIN (LOSS):
Net realized gain
(loss) on:
Investment
transactions (363,296) 88,043 (353,020) (110,602)
Foreign currency
transactions -- -- -- (500)
---------- ---------- -------- ---------
Net realized gain
(loss) (363,296) 88,043 (353,020) (111,102)
---------- ---------- -------- ---------
Net change in
unrealized
appreciation
(depreciation) on:
Investments 1,797,465 1,016,170 331,601 (167,231)
Foreign currency and
other assets -- -- -- 4,520
---------- ---------- -------- ---------
NET UNREALIZED
APPRECIATION
(DEPRECIATION) DURING
THE PERIOD 1,797,465 1,016,170 331,601 (162,711)
---------- ---------- -------- ---------
NET REALIZED AND
UNREALIZED GAIN (LOSS) 1,434,169 1,104,213 (21,419) (273,813)
---------- ---------- -------- ---------
NET INCREASE (DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS $1,492,210 $1,057,334 ($56,814) ($321,463)
========== ========== ======== =========
</TABLE>
The accompanying notes are an
34
<PAGE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN LINCOLN
NEW PACIFIC GOVERNMENT INCOME CORPORATE INCOME TAX-FREE INCOME CASHFUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
- ----------- ----------------- ---------------- --------------- ---------
<S> <C> <C> <C> <C>
-- $406,517 $510,415 $277,513 $325,468
$56,391 -- -- -- --
- ----------- -------- -------- -------- --------
56,391 406,517 510,415 277,513 325,468
- ----------- -------- -------- -------- --------
57,887 15,858 18,175 14,740 13,707
74,796 34,010 35,545 34,329 33,074
9,336 12,312 11,816 10,824 13,303
32,485 32,604 32,851 32,561 26,213
8,628 8,628 8,628 8,628 8,628
4,082 4,082 4,082 4,082 4,082
1,435 1,435 1,435 1,435 1,435
821 823 819 822 148
(110,533) (62,395) (58,827) (70,571) (40,942)
- ----------- -------- -------- -------- --------
78,937 47,357 54,524 36,850 59,648
17,446 17,171 17,278 16,990 --
2,445 1,227 1,303 519 --
68 44 45 69 --
- ----------- -------- -------- -------- --------
98,896 65,799 73,150 54,428 59,648
- ----------- -------- -------- -------- --------
(42,505) 340,718 437,265 223,085 265,820
- ----------- -------- -------- -------- --------
(342,858) (54,151) (124,094) -- --
17,538 -- -- -- --
- ----------- -------- -------- -------- --------
(325,320) (54,151) (124,094) -- --
- ----------- -------- -------- -------- --------
(1,566,732) 327,747 591,292 520,544 --
6,698 -- -- -- --
- ----------- -------- -------- -------- --------
(1,560,034) 327,747 591,292 520,544 --
- ----------- -------- -------- -------- --------
(1,885,354) 273,596 467,198 520,544 --
- ----------- -------- -------- -------- --------
($1,927,859) $614,314 $904,463 $743,629 $265,820
=========== ======== ======== ======== ========
</TABLE>
integral part of the financial statements.
35
<PAGE>
LINCOLN ADVISOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED APRIL 30, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN
GROWTH AND INCOME ENTERPRISE U.S. GROWTH WORLD GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $58,041 ($46,879) ($35,395) ($47,650)
Net realized gain (loss) on
investment transactions (363,296) 88,043 (353,020) (111,102)
Net change in unrealized appreciation
(depreciation) on investments 1,797,465 1,016,170 331,601 (162,711)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations 1,492,210 1,057,334 (56,814) (321,463)
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE A):
From net investment income*:
CLASS A (37,934) -- -- (4,331)
CLASS B (4,188) -- -- (1,209)
CLASS C (137) -- -- (104)
CLASS D (22,694) -- -- (144)
From short-term capital gains:
CLASS A (267,082) -- -- --
CLASS B (19,100) -- -- --
CLASS C (659) -- -- --
CLASS D (81,783) -- -- --
NET FUND SHARE TRANSACTIONS (NOTE E):
CLASS A 739,121 781,823 299,315 510,255
CLASS B 301,497 335,648 148,971 283,161
CLASS C 15,180 11,581 9,118 4,812
CLASS D 1,774,419 137,489 1,383,306 37,381
----------- ----------- ----------- -----------
TOTAL CHANGE IN NET ASSETS 3,888,850 2,323,875 1,783,896 508,359
NET ASSETS:
Beginning of period 13,643,755 11,611,740 12,510,533 12,347,463
----------- ----------- ----------- -----------
End of period (including
undistributed net investment
income disclosed below **) $17,532,605 $13,935,615 $14,294,429 $12,855,822
=========== =========== =========== ===========
*Including distributions in excess of
net investment income
earned to date of: ($6,912) -- -- ($5,788)
**Undistributed net investment income
(loss): -- ($48,879) ($35,395) ($55,397)
</TABLE>
The accompanying notes are an
36
<PAGE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN LINCOLN
NEW PACIFIC GOVERNMENT INCOME CORPORATE INCOME TAX-FREE INCOME CASHFUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------------- ---------------- --------------- -----------
<S> <C> <C> <C> <C>
($42,505) $340,718 $437,265 $223,085 $265,820
(325,320) (54,151) (124,094) -- --
(1,560,034) 327,747 591,292 520,544 --
- ----------- ----------- ----------- ----------- -----------
(1,927,859) 614,314 904,463 743,629 265,820
- ----------- ----------- ----------- ----------- -----------
-- (326,313) (297,464) (214,221) (265,820)
-- (13,129) (15,817) (4,032) -
-- (41) (548) (809) --
-- (26,170) (130,786) --
(316,289) -- -- -- --
(15,094) -- -- -- --
(342) -- -- --
(1,631) -- -- --
662,753 265,850 327,780 217,696 275,874
197,322 22,482 66,586 19,271 --
8,304 (48,022) (9,648) 3,185
23,103 238,640 1,322,184 --
- ----------- ----------- ----------- ----------- -----------
(1,369,734) 727,611 2,166,749 764,719 275,874
11,825,308 10,300,792 11,155,485 9,541,622 10,896,917
- ----------- ----------- ----------- ----------- -----------
$10,455,574 $11,028,403 $13,322,234 $10,306,341 $11,172,791
=========== =========== =========== =========== ===========
-- ($9,911) ($6,578) -- --
($42,505) -- -- $4,023 --
</TABLE>
integral part of the financial statements.
37
<PAGE>
LINCOLN ADVISOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD DECEMBER 3, 1993 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31,
1994
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN
GROWTH AND INCOME ENTERPRISE U.S. GROWTH WORLD GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) $55,239 ($96,231) ($48,908) $24,104
Net realized gain (loss) on
investment transactions 366,879 (1,615,958) (765,893) (117,654)
Net change in unrealized appreciation
(depreciation) on investments (683,167) 968,162 1,143,629 1,150,863
----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations (261,049) (744,027) 328,828 1,057,313
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE A):
From net investment income*:
CLASS A (52,553) (5,017) (10,026) (31,036)
CLASS B (901) -- -- (644)
CLASS C (44) -- -- (16)
CLASS D (13,722) -- -- (154)
NET FUND SHARE TRANSACTIONS (NOTE E):
CLASS A 10,707,842 11,364,722 10,432,432 10,690,388
CLASS B 567,722 714,807 193,916 518,236
CLASS C 24,220 36,372 4,860 38,387
CLASS D 2,659,240 231,883 1,547,523 61,989
----------- ----------- ----------- -----------
TOTAL CHANGE IN NET ASSETS 13,630,755 11,598,740 12,497,533 12,334,463
NET ASSETS:
Beginning of period 13,000 13,000 13,000 13,000
----------- ----------- ----------- -----------
End of period (including
undistributed net investment
income disclosed below**) $13,643,755 $11,611,740 $12,510,533 $12,347,463
=========== =========== =========== ===========
*Including distributions in excess of
net investment income of: ($11,981) ($5,017) ($10,026) ($7,747)
**Undistributed net investment income: -- -- -- --
</TABLE>
The accompanying notes are an
38
<PAGE>
<TABLE>
<CAPTION>
LINCOLN LINCOLN LINCOLN LINCOLN LINCOLN
NEW PACIFIC GOVERNMENT INCOME CORPORATE INCOME TAX-FREE INCOME CASHFUND
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------------- ---------------- --------------- -----------
<S> <C> <C> <C> <C>
($21,131) $401,834 $569,199 $354,978 $271,189
305,061 (602,768) (643,261) -- --
207,837 (303,222) (662,252) (1,110,727) --
----------- ----------- ----------- ----------- -----------
491,767 (504,156) (736,314) (755,749) 271,189
----------- ----------- ----------- ----------- -----------
(10,033) (376,003) (531,367) (355,455) (271,189)
-- (2,509) (3,088) (1,109) --
-- (709) (92) (45) --
-- (7,589) (33,880) -- --
10,855,398 10,518,370 10,853,543 10,532,695 10,883,917
416,363 246,538 230,877 100,785 --
12,436 50,709 10,006 7,500 --
46,377 363,141 1,352,800 -- --
----------- ----------- ----------- ----------- -----------
11,812,308 10,287,792 11,142,485 9,528,622 10,883,917
13,000 13,000 13,000 13,000 13,000
----------- ----------- ----------- ----------- -----------
$11,825,308 $10,300,792 $11,155,485 $ 9,541,622 $10,896,917
=========== =========== =========== =========== ===========
($10,033) -- -- ($1,630) --
-- $15,024 $772 -- --
</TABLE>
integral part of the financial statements.
39
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
LINCOLN GROWTH AND INCOME PORTFOLIO
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $9.74 $10.00 $9.49 $10.00
-------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) 0.05 0.05 0.01 0.01
Net realized and
unrealized gain (loss)
on investments 0.80 (0.26) 0.78 (0.49)
-------- --------- -------- ---------
Total from investment
operations 0.85 (0.21) 0.79 (0.48)
-------- --------- -------- ---------
Less distributions to
shareholders:
From net investment
income (0.03) (0.05) (0.05) (0.03)
From net realized gains (0.25) -- (0.25) --
-------- --------- -------- ---------
Total distributions (0.28) (0.05) (0.30) (0.03)
-------- --------- -------- ---------
Net asset value, end of
period $10.31 $9.74 $9.98 $9.49
======== ========= ======== =========
Total Return 9.10%** (2.15%) 8.72% (4.83%)
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $11,874 $10,437 $920 $563
Net expenses to average
daily net assets 1.75%* 1.75%* 2.40%* 2.40%*
Net investment income
(loss) to average daily
net assets 0.75%* 0.49%* (0.08%)* (.14%)*
Portfolio turnover rate 16% 39% 16% 39%
Commencement of
operations 12/03/93 03/29/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to average
net assets would have
been: 2.47%* 2.87%* 3.12%* 3.53%*
<CAPTION>
LINCOLN ENTERPRISE PORTFOLIO
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $9.20 $10.00 $9.81 $10.00
-------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) (0.03) (0.08) (0.06) (0.04)
Net realized and
unrealized gain (loss)
on investments 0.78 (0.71) 0.82 (0.15)
-------- --------- -------- ---------
Total from investment
operations 0.75 (0.79) 0.76 (0.19)
-------- --------- -------- ---------
Less distributions to
shareholders:
From net investment
income -- (0.01) -- --
From net realized gains -- -- -- --
-------- --------- -------- ---------
Total distributions 0.00 (0.01) 0.00 0.00
-------- --------- -------- ---------
Net asset value, end of
period $9.95 $9.20 $10.57 $9.81
======== ========= ======== =========
Total Return 8.15%** (7.91%)** 7.75% (1.91%)
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $12,288 $10,579 $1,190 $761
Net expenses to average
daily net assets 1.85%* 1.85%* 2.50%* 2.50%*
Net investment income
(loss) to average daily
net assets (0.72%)* (1.01%)* (1.39%)* (1.53%)*
Portfolio turnover rate 58% 120% 58% 120%
Commencement of
operations 12/03/93 04/14/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to average
net assets would have
been : 2.91%* 3.10%* 3.56%* 3.76%*
</TABLE>
* Annualized
** Total return calculations exclude front end sales load.
+ Unaudited
The accompanying notes are an
40
<PAGE>
<TABLE>
<CAPTION>
CLASS C CLASS D
- --------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
- --------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$9.96 $10.00 $9.74 $10.42
-------- --------- -------- ---------
0.01 0.00 0.05 0.05
0.83 (0.02) 0.83 (0.66)
-------- --------- -------- ---------
0.84 (0.02) 0.88 (0.61)
-------- --------- -------- ---------
(0.05) (0.02) (0.06) (0.07)
(0.25) -- (0.25) --
-------- --------- -------- ---------
(0.30) (0.02) (0.31) (0.07)
-------- --------- -------- ---------
$10.50 $9.96 $10.31 $9.74
======== ========= ======== =========
8.75% (0.22%) 9.35% (5.93%)
$41 $24 $4,696 $2,620
2.40%* 2.40%* 1.40%* 1.40%*
(0.05%)* (.08%)* 1.05%* 0.91%*
16% 39% 16% 39%
05/11/94 02/03/94
3.12%* 3.52%* 2.12%* 2.52%*
<CAPTION>
CLASS C CLASS D
- --------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
- --------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$10.02 $10.00 $9.23 $10.44
-------- --------- -------- ---------
(0.06) (0.05) (0.01) (0.02)
0.84 0.07 0.77 (1.19)
-------- --------- -------- ---------
0.78 0.02 0.76 (1.21)
-------- --------- -------- ---------
-- -- -- --
-- -- -- --
-------- --------- -------- ---------
0.00 0.00 0.00 0.00
-------- --------- -------- ---------
$10.80 $10.02 $9.99 $9.23
======== ========= ======== =========
7.78% 0.23% 8.23% (11.61%)
$52 $37 $404 $234
2.50%* 2.50%* 1.50%* 1.50%*
(1.38%)* (1.53%)* (0.39%)* (.63%)*
58% 120% 58% 120%
05/10/94 02/03/94
3.56%* 3.75%* 2.56%* 2.75%*
</TABLE>
integral part of the financial statements.
41
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
LINCOLN U.S. GROWTH PORTFOLIO
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period $10.21 $10.00 $10.19 $10.00
--------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) (0.03) (0.04) (0.05) (0.03)
Net realized and
unrealized gain (loss)
on investments (0.06) 0.26 (0.07) 0.22
--------- --------- -------- ---------
Total from investment
operations (0.09) 0.22 (0.12) 0.19
--------- --------- -------- ---------
Less distributions to
shareholders:
From net investment in-
come -- (0.01) -- --
From net realized gains -- -- -- --
--------- --------- -------- ---------
Total distributions 0.00 (0.01) 0.00 0.00
--------- --------- -------- ---------
Net asset value, end of
period $10.12 $10.21 $10.07 $10.19
========= ========= ======== =========
Total Return (0.78%)** 2.18%** (1.18%) 1.90%
Ratios/Supplemental Da-
ta:
Net assets, end of pe-
riod (000's) $10,889 $10,669 $353 $204
Net expenses to average
daily net assets 1.85%* 1.85%* 2.50%* 2.50%*
Net investment income
(loss) to average
daily net assets (0.59%)* (0.51%)* (1.23%)* (1.26%)*
Portfolio turnover rate 22% 66% 22% 66%
Commencement of opera-
tions 12/03/93 03/29/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 2.55%* 2.94%* 3.20%* 3.60%*
<CAPTION>
LINCOLN WORLD GROWTH PORTFOLIO
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period $11.00 $10.00 $10.40 $10.00
--------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) (0.04) 0.02 (0.05) --
Net realized and
unrealized gain (loss)
on investments (0.28) 1.01 (0.28) 0.43
--------- --------- -------- ---------
Total from investment
operations (0.32) 1.03 (0.33) 0.43
--------- --------- -------- ---------
Less distributions to
shareholders:
From net investment in-
come (0.00) (0.03) (0.02) (0.03)
From net realized gains -- -- -- --
--------- --------- -------- ---------
Total distributions 0.00 (0.03) (0.02) (0.03)
--------- --------- -------- ---------
Net asset value, end of
period $10.68 $11.00 $10.05 $10.40
========= ========= ======== =========
Total Return (2.44%)** 10.25%** (3.17%) (4.28%)
Ratios/Supplemental Da-
ta:
Net assets, end of pe-
riod (000's) $11,912 $11,721 $799 $523
Net expenses to average
daily net assets 1.85%* 1.85%* 2.50%* 2.50%*
Net investment income
(loss) to average
daily net assets (0.77%)* 0.25%* (1.37%)* (0.37%)*
Portfolio turnover rate 6% 6% 6% 6%
Commencement of opera-
tions 12/03/93 03/29/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 3.25%* 3.56%* 3.90%* 4.22%*
</TABLE>
* Annualized
** Total return calculations exclude front end sales load.
+ Unaudited
The accompanying notes are an
42
<PAGE>
<TABLE>
<CAPTION>
CLASS C CLASS D
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$10.62 $10.00 $10.23 $10.52
-------- --------- -------- ---------
(0.04) (0.03) (0.01) (0.01)
(0.09) 0.65 (0.06) (0.28)
-------- --------- -------- ---------
(0.13) 0.62 (0.07) (0.29)
-------- --------- -------- ---------
-- -- -- --
-- -- -- --
-------- --------- -------- ---------
0.00 0.00 0.00 0.00
-------- --------- -------- ---------
$10.49 $10.62 $10.16 $10.23
======== ========= ======== =========
(1.13%) 6.17% (0.68%) (2.78%)
$14 $5 $3,037 $1,630
2.50%* 2.50%* 1.50%* 1.50%*
(1.28%)* (1.09%)* (0.26%)* (0.27%)*
22% 66% 22% 66%
05/23/94 02/03/94
3.20%* 3.54%* 2.20%* 2.60%*
<CAPTION>
CLASS C CLASS D
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$10.43 $10.00 $11.02 $10.50
-------- --------- -------- ---------
(0.06) 0.01 (0.01) 0.04
(0.26) 0.44 (0.29) 0.52
-------- --------- -------- ---------
(0.32) 0.45 (0.30) 0.56
-------- --------- -------- ---------
(0.03) (0.02) (0.02) (0.04)
-- -- -- --
-------- --------- -------- ---------
(0.03) (0.02) (0.02) (0.04)
-------- --------- -------- ---------
$10.08 $10.43 $10.70 $11.02
======== ========= ======== =========
(3.09%) 4.45% (2.63%) 5.26%
$42 $38 $100 $63
2.50%* 2.50%* 1.50%* 1.50%*
(1.40%)* (0.16%)* (0.36%)* 0.76%*
6% 6% 6% 6%
05/10/94 02/03/94
3.90%* 4.23%* 2.90%* 3.21%*
</TABLE>
integral part of the financial statements.
43
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
LINCOLN NEW PACIFIC PORTFOLIO
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period $10.44 $10.00 $10.86 $10.00
---------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) (0.03) (0.02) (0.06) (0.03)
Net realized and
unrealized gain (loss)
on investments (1.61) 0.47 (1.68) 0.89
---------- --------- -------- ---------
Total from investment
operations (1.64) 0.45 (1.74) 0.86
---------- --------- -------- ---------
Less distributions to
shareholders:
From net investment in-
come -- (0.01) -- --
From net realized gains (0.29) -- (0.29) --
---------- --------- -------- ---------
Total distributions (0.29) (0.01) (0.29) 0.00
---------- --------- -------- ---------
Net asset value, end of
period $8.51 $10.44 $8.83 $10.86
========== ========= ======== =========
Total Return (15.97%)** 4.53%** (16.27%) 8.58%
Ratios/Supplemental Da-
ta:
Net assets, end of pe-
riod (000's) $9,848 $11,333 $527 $431
Net expenses to average
daily net assets 1.85%* 1.85%* 2.50%* 2.50%*
Net investment income
(loss) to average
daily net assets (0.78%)* (0.21%)* (1.36%)* (0.88%)*
Portfolio turnover rate 65% 104% 65% 104%
Commencement of opera-
tions 12/03/93 03/29/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 3.97%* 3.66%* 4.62%* 4.32%*
<CAPTION>
LINCOLN GOVERNMENT INCOME PORTFOLIO
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value, begin-
ning of period $9.15 $10.00 $9.78 $10.00
---------- --------- -------- ---------
Income from investment
operations:
Net investment income
(loss) 0.30 0.38 0.30 0.12
Net realized and
unrealized gain (loss)
on investments 0.22 (0.86) 0.23 (0.23)
---------- --------- -------- ---------
Total from investment
operations 0.52 (0.48) 0.53 (0.11)
---------- --------- -------- ---------
Less distributions to
shareholders:
From net investment in-
come (0.30) (0.37) (0.52) (0.11)
From net realized gains -- -- -- --
---------- --------- -------- ---------
Total distributions (0.30) (0.37) (0.52) (0.11)
---------- --------- -------- ---------
Net asset value, end of
period $9.37 $9.15 $9.79 $9.78
========== ========= ======== =========
Total Return 5.81%** (4.93%)** 5.04% (1.11%)
Ratios/Supplemental Da-
ta:
Net assets, end of pe-
riod (000's) $10,169 $9,658 $262 $239
Net expenses to average
daily net assets 1.25%* 1.25%* 1.90%* 1.90%*
Net investment income
(loss) to average
daily net assets 6.47%* 4.38%* 5.85%* 4.87%*
Portfolio turnover rate 107% 366% 107% 366%
Commencement of opera-
tions 12/03/93 07/27/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 2.46%* 2.58%* 3.11%* 3.22%*
</TABLE>
* Annualized
** Total return calculations exclude front end sales load.
+ Unaudited
The accompanying notes are an
44
<PAGE>
<TABLE>
<CAPTION>
CLASS C CLASS D
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$10.66 $10.00 $10.48 $11.14
-------- --------- -------- ---------
(0.03) (0.02) (0.01) 0.01
(1.68) 0.68 (1.63) (0.67)
-------- --------- -------- ---------
(1.71) 0.66 (1.64) (0.66)
-------- --------- -------- ---------
-- -- -- --
(0.29) -- (0.29) --
-------- --------- -------- ---------
(0.29) 0.00 (0.29) 0.00
-------- --------- -------- ---------
$8.66 $10.66 $8.55 $10.48
======== ========= ======== =========
(16.22%) 6.55% (15.82%) (5.98%)
$18 $12 $60 $47
2.50%* 2.50%* 1.50%* 1.50%*
(1.01%)* (0.83%)* (0.26%)* 0.23%*
65% 104% 65% 104%
07/07/94 02/03/94
4.62%* 4.31%* 3.62%* 3.31%*
<CAPTION>
CLASS C CLASS D
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$9.79 $10.00 $9.15 $10.00
-------- --------- -------- ---------
1.20 0.15 0.34 0.33
(0.80) (0.22) 0.20 (0.85)
-------- --------- -------- ---------
0.40 (0.07) 0.54 (0.52)
-------- --------- -------- ---------
(0.28) (0.14) (0.50) (0.33)
-- -- -- --
-------- --------- -------- ---------
(0.28) (0.14) (0.50) (0.33)
-------- --------- -------- ---------
$9.91 $9.79 $9.19 $9.15
======== ========= ======== =========
4.15% (0.72%) 6.09% (5.17%)
$1 $49 $594 $353
1.90%* 1.90%* 0.90%* 0.90%*
4.39%* 4.71%* 7.01%* 5.57%*
107% 366% 107% 366%
07/07/94 02/03/94
3.11%* 3.22%* 2.11%* 2.23%*
</TABLE>
integral part of the financial statements.
45
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
LINCOLN CORPORATE INCOME PORTFOLIO
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.80 $10.00 $9.73 $10.00
------- --------- ------ ---------
Income from investment
operations:
Net investment income
(loss) 0.32 0.51 0.35 0.29
Net realized and
unrealized gain (loss)
on investments 0.33 (1.20) 0.32 (0.28)
------- --------- ------ ---------
Total from investment
operations 0.65 (0.69) 0.67 0.01
------- --------- ------ ---------
Less distributions to
shareholders:
From net investment
income (0.27) (0.51) (0.59) (0.28)
From net realized gains -- -- -- --
------- --------- ------ ---------
Total distributions (0.27) (0.51) (0.59) (0.28)
------- --------- ------ ---------
Net asset value, end of
period $9.18 $8.80 $9.81 $9.73
======= ========= ====== =========
Total Return 7.43%** (7.06%)** 7.18% 0.11%
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $10,375 $9,620 $292 $222
Net expenses to average
daily net assets 1.25%* 1.25%* 1.90%* 1.90%*
Net investment income
(loss) to average
daily net assets 7.15%* 6.04%* 6.55%* 5.94%*
Portfolio turnover rate 81% 185% 81% 185%
Commencement of
operations 12/03/93 05/11/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 2.24%* 2.55%* 2.89%* 3.21%*
<CAPTION>
LINCOLN TAX-FREE INCOME PORTFOLIO
CLASS A CLASS B
-------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C> <C>
Net asset value,
beginning of period $8.93 $10.00 $9.67 $10.00
------- --------- ------ ---------
Income from investment
operations:
Net investment income
(loss) 0.21 0.34 0.22 0.16
Net realized and
unrealized gain (loss)
on investments 0.47 (1.06) 0.47 (0.33)
------- --------- ------ ---------
Total from investment
operations 0.68 (0.72) 0.69 (0.17)
------- --------- ------ ---------
Less distributions to
shareholders:
From net investment
income (0.20) (0.35) (0.39) (0.16)
From net realized gains -- -- -- --
------- --------- ------ ---------
Total distributions (0.20) (0.35) (0.39) (0.16)
------- --------- ------ ---------
Net asset value, end of
period $9.41 $8.93 $9.97 $9.67
======= ========= ====== =========
Total Return 7.69%** (7.40%)** 7.33% (1.73%)
Ratios/Supplemental
Data:
Net assets, end of
period (000's) $10,177 $9,438 $118 $95
Net expenses to average
daily net assets 1.10%* 1.10%* 1.75%* 1.75%*
Net investment income
(loss) to average
daily net assets 4.55%* 3.98%* 3.91%* 3.52%*
Portfolio turnover rate 0% 25% 0% 25%
Commencement of
operations 12/03/93 05/04/94
Without the waiver of
fees and reimbursement
of expenses by the
advisor, the ratio of
net expenses to
average net assets
would have been: 2.56%* 2.66%* 3.21%* 3.31%*
</TABLE>
* Annualized
** Total return calculations exclude front end sales load.
+ Unaudited
The accompanying notes are an
46
<PAGE>
<TABLE>
<CAPTION>
CLASS C CLASS D
- --------------------------------------- --------------------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE PERIOD MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994 APRIL 30, 1995+ ENDED OCTOBER 31, 1994
- --------------- ---------------------- --------------- ----------------------
<S> <C> <C> <C>
$9.80 $10.00 $8.84 $9.98
------ -------- ------ --------
(9.60) 0.08 0.37 0.41
10.21 (0.19) 0.28 (1.12)
------ -------- ------ --------
0.61 (0.11) 0.65 (0.71)
------ -------- ------ --------
(0.61) (0.09) (0.55) (0.43)
-- -- -- --
------ -------- ------ --------
(0.61) (0.09) (0.55) (0.43)
------ -------- ------ --------
$9.80 $9.80 $8.94 $8.84
====== ======== ====== ========
6.43% (1.00%) 7.83% (7.21%)
$0 $9 $2,654 $1,302
1.90%* 1.85%* 0.90%* 0.90%*
5.92%* 5.91%* 7.67%* 6.88%*
81% 185% 81% 185%
09/14/94 02/03/94
2.89%* 3.17%* 1.89%* 2.20%*
<CAPTION>
CLASS C
- ---------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994
- --------------- ----------------------
<S> <C>
$9.64 $10.00
------ --------
0.00 0.05
0.63 (0.35)
------ --------
0.63 (0.30)
------ --------
(0.49) (0.06)
-- --
------ --------
(0.49) (0.06)
------ --------
$9.78 $9.64
====== ========
6.82% (3.04%)
$10 $7
1.75%* 1.75%*
3.91%* 3.50%*
0% 25%
09/14/94
3.21%* 3.27%*
</TABLE>
integral part of the financial statements.
47
<PAGE>
FINANCIAL HIGHLIGHTS
LINCOLN CASHFUND PORTFOLIO
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
CLASS A
--------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE PERIOD
APRIL 30, 1995+ ENDED OCTOBER 31, 1994
--------------- ----------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $1.00 $1.00
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.02 0.03
Net realized and unrealized gain
(loss) on investments 0.00 0.00
------- --------
Total from investment operations 0.02 0.03
------- --------
LESS DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (0.02) (0.03)
From net realized gains -- --
------- --------
Total distributions (0.02) (0.03)
------- --------
NET ASSET VALUE, END OF PERIOD $1.00 $1.00
======= ========
TOTAL RETURN 2.36%** 2.63%**
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) $11,172 $10,897
Net expenses to average daily net as-
sets 1.10%* 1.10%*
Net investment income (loss) to aver-
age daily net assets 2.90%* 2.90%*
Commencement of operations 12/03/93
Without the waiver of fees and
reimbursement of expenses by the
advisor, the ratio of net expenses
to average net assets would have
been: 1.87%* 2.11%*
</TABLE>
* Annualized
**Total return calculations exclude front end sales load.
+ Unaudited
The accompanying notes are an integral part of the financial statements.
48
<PAGE>
LINCOLN ADVISOR FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995 (UNAUDITED)
NOTE A - SUMMARY OF ACCOUNTING POLICIES
The Lincoln Advisor Funds, Inc. (the "Fund"), is a Maryland corporation
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end management investment company. The Fund currently issues
nine separate series of shares (each referred to as a Portfolio or collectively
as the Portfolios) each representing a separate, diversified portfolio of
securities. The Portfolios are Lincoln Growth and Income Portfolio ("Lincoln
Growth and Income"), Lincoln Enterprise Portfolio ("Lincoln Enterprise"),
Lincoln U. S. Growth Portfolio ("Lincoln U. S. Growth"), Lincoln World Growth
Portfolio ("Lincoln World Growth"), Lincoln New Pacific Portfolio ("Lincoln New
Pacific"), Lincoln Government Income Portfolio ("Lincoln Government"), Lincoln
Corporate Income Portfolio ("Lincoln Corporate"), Lincoln Tax-Free Income
Portfolio ("Lincoln Tax-Free"), and Lincoln Cashfund Portfolio ("Lincoln
Cashfund"). Each of the Portfolios, except Lincoln Cashfund, currently offers
four classes of shares: Class A, Class B, Class C and Class D. Cashfund
currently offers two classes of shares: Regular and Class B Exchange shares.
For ease of presentation within the financial statements, Lincoln Cashfund
Regular shares appear under the heading as Class A shares. As of the date of
this report, all classes of the Fund with the exception of Lincoln Tax-Free
Class D and Lincoln Cashfund Class B Exchange had commenced operations. The
following is a summary of the significant accounting policies followed by the
Portfolios in the preparation of their financial statements.
SECURITIES VALUATIONS
A security listed or traded on an exchange (including the NASDAQ National
Market System) is valued at its last sale price on the exchange where the
security is principally traded or, if lacking any sales on a particular day,
the security is valued at the mean between the closing bid and asked prices on
that day. Each security traded in the over-the-counter market is valued at the
mean between the last available bid and asked prices based upon quotes
furnished by market makers for such securities. Debt obligations that are
issued or guaranteed by the U.S. Government, its agencies, authorities and
instrumentalities are valued on the basis of prices provided by independent
pricing services. Prices provided by the pricing services may be determined
without exclusive reliance on quoted prices, and may reflect appropriate
factors such as yield, type of issue, coupon rate, maturity and general market
conditions. Securities for which market quotations are not readily available
are valued at fair market value as determined in good faith by or under the
supervision of the Fund's officers in a manner specifically authorized by the
Board of Directors of the Fund. The securities of Lincoln Cashfund are valued
at amortized cost. For all other funds, short-term obligations having 60 days
or less to maturity are valued at amortized cost. Amortized cost valuation
involves valuing an instrument at its cost initially and, thereafter, assuming
a constant amortization to maturity of any discount or premium, regardless of
the effect of fluctuating interest rates on the market value of the instrument.
REPURCHASE AGREEMENTS
Each Portfolio may engage in repurchase agreement transactions. Under the terms
of a typical repurchase agreement, the Portfolio takes possession of an
underlying debt obligation subject to an obligation of the seller to
repurchase, and the Portfolio to resell, the obligation at an agreed-upon price
and time, thereby determining the yield during the Portfolio's holding period.
This arrangement results in a fixed rate of return that is not subject to
market fluctuations during the Portfolio's holding period. The value of the
collateral is at least equal at all times to the total amount of the repurchase
obligation, including interest. In the event of counterparty default, the
Portfolio
49
<PAGE>
has the right to use the collateral to offset losses incurred. There is
potential loss to the Portfolio in the event the Portfolio is delayed or
prevented from exercising its rights to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Portfolio seeks to assert its rights.
The Portfolios' investment advisor, acting under the supervision of the Board
of Directors of the Fund, reviews the value of the collateral and the
creditworthiness of those banks and dealers with which the Portfolio enters
into repurchase agreements to evaluate potential risks.
FORWARD FOREIGN CURRENCY CONTRACTS
The Portfolios (other than Lincoln Tax-Free Income and Lincoln Cashfund) may
enter into forward foreign currency exchange contracts. Forward foreign
currency contracts are valued at the forward rate and are marked-to-market
daily. The change in market value is recorded by the Portfolio as an unrealized
gain or loss. When the contract is closed, the Portfolio records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in the underlying prices of the Portfolio's investment securities, but it does
establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the hedged currency, they also limit any potential gain that might
result should the value of the currency increase. In addition, the Portfolio
could be exposed to risks if the counterparties to the contracts are unable to
meet the terms of their contracts.
FOREIGN CURRENCY
The books and records of the Portfolios are maintained in United States (U.S.)
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of the
period. Purchases and sales of investment securities, income and expense items
are translated on the respective dates of such transactions. Unrealized gains
and losses which result from changes in foreign currency exchange rates have
been included in the unrealized appreciation/(depreciation) of investments. Net
realized foreign currency gains and losses resulting from changes in exchange
rates include foreign currency gains and losses between trade date and
settlement date on investment securities transactions, foreign currency
transactions and the difference between the amounts of interest and dividends
recorded on the books of the Portfolio and the amount actually received. The
portion of foreign currency gains and losses related to fluctuation in exchange
rates between the initial purchase trade date and subsequent sale trade date is
included in realized gains and losses on investment securities sold.
OPTION TRANSACTIONS
The Portfolios may purchase and write (i.e., sell) put and call options on
securities and currencies. A call option gives the purchaser, in exchange for a
premium paid, the right for a specified period of time to purchase securities
or currencies subject to the option at a specified price (the exercise price or
strike price). When a Portfolio writes a call option, the Portfolio gives up
the potential for gain on the underlying securities in excess of the exercise
price of the option. A put option gives the purchaser, in return for a premium,
the right for a specified period of time to sell the securities or currencies
subject to the option to the writer of the put at the specified exercise price.
The writer of the put option, in return for the premium, has the obligation,
upon exercise of the option, to acquire the securities underlying the option at
the exercise price. A Portfolio might, therefore, be obligated to purchase the
underlying securities for more than their current market price.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are accounted for on a trade date basis. Realized gains
and losses on sales are computed on the basis of specific identification of the
securities sold. Interest income, adjusted for amortization of discounts and
premiums on investments, is earned from settlement date and is recorded on the
accrual basis. Dividend income and distributions to shareholders are recorded
on the ex-dividend date.
50
<PAGE>
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income, if any, for Lincoln Growth and Income,
Lincoln Enterprise, Lincoln U.S. Growth, Lincoln World Growth, and Lincoln New
Pacific Portfolios are declared and paid at least annually. Dividends from net
investment income for Lincoln Government Income, Lincoln Corporate Income, and
Lincoln Tax-Free Income Portfolios are declared and paid monthly. Dividends
from net investment income for the Cashfund are declared daily and paid
monthly. Net realized capital gains, if any, for the Portfolios are declared
and paid at least annually. Additional distributions may be made at the
discretion of the Board of Directors in order to avoid the application of a 4%
non-deductible excise tax on certain amounts of undistributed ordinary income
and capital gains.
FEDERAL INCOME TAXES
Each Portfolio intends to qualify as a regulated investment company, by
complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies and by distributing substantially all of its
earnings to shareholders. Therefore, no Federal income tax provision is
required. Distributions in excess of tax basis earnings and profits will be
reported in the Fund's financial statements as a return of capital.
Furthermore, differences in the recognition or classification of income between
the financial statements and tax earnings and profits which result in temporary
over-distributions for financial statement purposes are classified as
distributions in excess of net investment income or accumulated net realized
gains.
EXPENSES
Operating expenses directly attributable to a class of shares are charged to
that class' operations. Expenses of the Fund not directly attributable to the
operations of any class of shares or Portfolio are prorated among the
Portfolios and classes to which the expense relates based on the relative net
assets of each.
NOTE B - INVESTMENTS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) for the period from November 1, 1994 to April 30, 1995
were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- ----------
<S> <C> <C>
Lincoln Growth and Income $ 5,061,966 $2,225,319
Lincoln Enterprise 8,049,982 6,587,986
Lincoln U.S. Growth 4,779,999 2,668,396
Lincoln World Growth 2,037,125 622,502
Lincoln New Pacific 7,308,813 6,474,986
Lincoln Government Income 11,176,405* 10,450,174*
Lincoln Corporate Income 10,989,871 9,170,844
Lincoln Tax-Free Income 396,837 0
</TABLE>
* U.S. Government Securities
51
<PAGE>
NOTE C - MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Under an agreement between the Fund and Lincoln National Investment Management
Company ("LNIMC" or the "Advisor"), the Advisor is responsible for the
investment of each Portfolio's assets, bearing the cost of research and
statistical analysis as well as ordinary office costs and salaries of officers
and employees who provide services to the Fund. In return for these services,
LNIMC receives advisory fees monthly based upon each Portfolio's average daily
net assets at the following annual rates:
<TABLE>
<S> <C>
Lincoln Growth and Income .80%
Lincoln Enterprise .80%
Lincoln U.S. Growth .70%
Lincoln World Growth 1.10%
Lincoln New Pacific 1.10%
Lincoln Government Income .30%
Lincoln Corporate Income .30%
Lincoln Tax-Free Income .30%
Lincoln Cashfund .25%
</TABLE>
Pursuant to separate agreements with LNIMC, Lincoln Growth and Income, Lincoln
Enterprise, Lincoln U.S. Growth, Lincoln World Growth and Lincoln New Pacific
Portfolios have sub-advisors who participate in the management of its
respective Portfolio's assets. The sub-advisors are each responsible for the
day-to-day investment management of the Portfolio under the direct supervision
of LNIMC. Lynch & Mayer, Inc., an affiliate of LNIMC, serves as the sub-advisor
to the Lincoln Enterprise Portfolio and earned sub-advisory fees of $30,356 for
the period ended April 30, 1995. None of the other current sub-advisors are
affiliated with the Advisor. The sub-advisor's fees are paid by the advisor;
the Portfolios do not pay any fees directly to the sub-advisors.
Securities regulations of various states in which the Portfolios have
shareholders provide that, if expenses borne by the Portfolio in any year
(including the advisory fee but excluding interest, taxes, brokerage fees and
where permitted, extraordinary expenses) exceed certain limitations, the
Advisor must reimburse the Portfolio for any such excess at least annually.
These expense limitations may be raised or lowered from time to time. The Fund
believes the most restrictive expense limitation of state securities
commissioners is 2.5% of each Portfolio's average daily net assets up to
$30,000,000; 2% of the next $70,000,000 and 1.5% of average daily net assets in
excess of $100,000,000 during the applicable year. During any year, the Advisor
will be bound by the most stringent applicable requirements of any state.
LNC Equity Sales Corporation (the "Distributor") serves as the Fund's
distributor of Portfolio shares. The distributor is paid an annual service fee
with respect to Class A (excluding Lincoln Cashfund "Regular" shares), Class B
(including Lincoln Cashfund "Class B Exchange" shares) and Class C shares of
the Portfolios at the rate of .25% of the value of the average daily net assets
of the respective class of each Portfolio. The Distributor is also paid an
annual distribution fee by Class A (excluding Lincoln Cashfund "Regular"
shares), Class B (including Lincoln Cashfund "Class B Exchange" shares) and
Class C shares at the rate of .10%, .75% and .75%, respectively, of the value
of average daily net assets attributable to those classes of shares. The fees
are authorized pursuant to separate service and distribution plans for each of
the classes of shares (the "Plans") adopted by the Portfolios pursuant to Rule
12b-1 under the Investment Company Act and are used by the Distributor to cover
expenses primarily intended to result in the sale of those shares of the
Portfolios.
Certain officers and directors of the Fund are also officers or directors of
the Advisor. The compensation of unaffiliated directors of the Fund is borne by
the Fund.
52
<PAGE>
Initial investments into the Fund were made by American States Insurance
Company ("ASI") and Lincoln National Life Insurance Company ("LNLIC"), both
affiliates of the Advisor. As of April 30, 1995, ASI held approximately 81%,
93%, and 98% of the outstanding shares of Lincoln Enterprise, Lincoln U.S.
Growth, and Lincoln Tax-Free Income, respectively. LNLIC held approximately
89%, 89%, 88%, 98%, 96%, and 94% of the outstanding shares of Lincoln Growth
and Income, Lincoln World Growth, Lincoln New Pacific, Lincoln Government
Income, Lincoln Corporate Income, and Lincoln Cashfund, respectively.
NOTE D - INCOME TAXES
At April 30, 1995, aggregate gross unrealized appreciation for all securities
in which there is an excess of value over tax cost and aggregate gross
unrealized depreciation for all securities in which there is an excess of tax
cost over value were as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
------------ ------------
<S> <C> <C>
Lincoln Growth and Income $2,112,780 $ 998,482
Lincoln Enterprise 2,090,466 106,133
Lincoln U.S. Growth 1,907,771 432,541
Lincoln World Growth 1,638,910 673,400
Lincoln New Pacific 571,385 1,923,581
Lincoln Government Income 120,359 95,833
Lincoln Corporate Income 194,399 265,360
Lincoln Tax-Free Income 14,727 604,911
</TABLE>
NOTE E - CAPITAL STOCK
The Portfolios (other than the Lincoln Cashfund Portfolio) issue the
following classes of shares: Class A shares are sold to investors choosing the
initial sales charge alternative, Class B shares are sold to investors choosing
the contingent deferred sales charge ("CDSC") alternative, Class C shares are
sold to investors choosing the annual distribution fee alternative and Class D
shares are sold to investors choosing the no sales charge alternative and are
available to insurance companies (including both general and separate accounts)
only. The Lincoln Cashfund Portfolio offers two classes of shares: Regular
Shares and Class B Exchange Shares. The Regular Shares are offered and sold at
the net asset value ($1.00) without a sales charge and without any service or
distribution fees. The Class B Exchange Shares, which are issued only upon the
exchange of shares of Class B of any other Portfolio, are subject to the
applicable CDSC, if any, upon redemption and are charged distribution and
service fees totaling 1% of the net asset value of the shares. As of April 30,
1995, 810,000,000 shares of $.01 par value Common Stock, issued in separate
series, were authorized. Because the Lincoln Cashfund has sold shares, issued
shares as reinvestment of dividends and redeemed shares at a constant net asset
value of $1.00 per share, the number of shares represented by such sales,
reinvestments and redemptions is the same as the amounts shown below for such
transactions. Changes in shares outstanding for each Portfolio for the periods
indicated are presented on the following pages:
53
<PAGE>
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED APRIL 30, 1995
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
----------------- ---------------- ---------------- -------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
------- -------- ------ -------- ------ -------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LINCOLN GROWTH AND IN-
COME PORTFOLIO
Sold................... 52,680 $497,063 35,757 $330,195 1,730 $16,927 204,134 $1,944,749
Issued as reinvestment
of dividends.......... 31,097 281,773 2,418 21,235 81 751 10,046 91,031
Redeemed............... (4,104) (39,715) (5,377) (49,933) (248) (2,498) (27,515) (261,361)
------- -------- ------ -------- ------ -------- ------- ----------
Net increase........... 79,673 $739,121 32,798 $301,497 1,563 $ 15,180 186,665 $1,774,419
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN ENTERPRISE PORT-
FOLIO
Sold................... 95,663 $874,370 41,141 $396,044 1,362 $13,706 18,521 $169,958
Issued as reinvestment
of dividends.......... -- -- -- -- -- -- -- --
Redeemed............... (10,091) (92,546) (6,141) (60,396) (201) (2,125) (3,479) (32,469)
------- -------- ------ -------- ------ -------- ------- ----------
Net increase........... 85,572 $781,823 35,000 $335,648 1,161 $11,581 15,042 $137,489
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN U.S. GROWTH
PORTFOLIO
Sold................... 32,953 $325,272 15,490 $154,071 1,106 $11,422 154,281 $1,531,150
Issued as reinvestment
of dividends.......... 2 23 -- -- -- -- -- --
Redeemed............... (2,610) (25,979) (524) (5,100) (220) (2,304) (14,981) (147,844)
------- -------- ------ -------- ------ -------- ------- ----------
Net increase........... 30,345 $299,315 14,966 $148,971 886 $9,118 139,300 $1,383,306
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN WORLD GROWTH
PORTFOLIO
Sold................... 53,854 $553,677 34,609 $335,071 1,308 $12,591 4,491 $46,117
Issued as reinvestment
of dividends.......... 421 4,321 123 1,192 11 104 14 143
Redeemed............... (4,645) (47,742) (5,570) (53,103) (779) (7,882) (868) (8,879)
------- -------- ------ -------- ------ -------- ------- ----------
Net increase........... 49,630 $510,255 29,162 $283,161 540 $4,812 3,637 $37,381
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN NEW PACIFIC
PORTFOLIO
Sold................... 45,015 $406,815 24,998 $239,103 927 $7,962 2,883 $25,646
Issued as reinvestment
of dividends.......... 33,993 315,456 1,506 14,514 36 342 175 1,631
Redeemed............... (6,912) (59,518) (6,470) (56,294) -- -- (494) (4,175)
------- -------- ------ -------- ------ -------- ------- ----------
Net increase........... 72,096 $662,753 20,034 $197,322 963 $8,304 2,564 $23,103
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN GOVERNMENT IN-
COME PORTFOLIO
Sold................... 6,029 $55,202 1,365 $13,371 164 $1,599 29,619 $271,134
Issued as reinvestment
of dividends.......... 24,760 228,663 951 9,111 2 26 2,241 20,219
Redeemed............... (1,961) (18,015) -- -- (5,071) (49,648) (5,774) (52,713)
------- -------- ------ -------- ------ -------- ------- ----------
Net
increase/(decrease)... 28,828 $265,850 2,316 $22,482 (4,905) ($48,022) 26,086 $238,640
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN CORPORATE INCOME
PORTFOLIO
Sold................... 16,173 $144,672 5,852 $56,410 25 $239 171,159 $1,512,201
Issued as reinvestment
of dividends.......... 30,214 210,630 1,487 13,069 -- 4 13,286 108,395
Redeemed............... (3,072) (27,522) (299) (2,893) (998) (9,890) (34,082) (298,412)
------- -------- ------ -------- ------ -------- ------- ----------
Net
increase/(decrease)... 43,315 $327,780 7,040 $66,586 (973) ($9,648) 150,363 $1,322,184
======= ======== ====== ======== ====== ======== ======= ==========
LINCOLN TAX-FREE PORTFO-
LIO
Sold................... 5,325 $47,325 1,651 $16,315 1,060 $10,000
Issued as reinvestment
of dividends.......... 19,483 177,917 309 2,956 49 460
Redeemed............... (809) (7,546) -- -- -- (7,275)
------- -------- ------ -------- ------ --------
Net increase........... 23,999 $217,696 1,960 $19,271 1,109 $3,185
======= ======== ====== ======== ====== ========
LINCOLN CASHFUND PORTFO-
LIO
Sold................... $546,181
Issued as reinvestment
of dividends.......... 214,718
Redeemed............... (485,025)
--------
Net increase........... $275,874
========
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31, 1994
- ----------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS D
- ---------------------- ---------------- -------------- -------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- --------- ----------- ------ -------- ------ ------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
1,068,102 $10,669,420 59,266 $566,826 2,412 $24,176 270,752 $2,676,462
5,349 52,433 94 896 4 44 1,407 13,721
(1,422) (14,011) -- -- -- -- (3,119) (30,943)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,072,029 $10,707,842 59,360 $567,722 2,416 $24,220 269,040 $2,659,240
========= =========== ====== ======== ===== ======= ======= ==========
1,158,125 $11,443,035 77,581 $714,807 3,744 $36,372 25,578 $233,559
499 5,017 -- -- -- -- -- --
(9,348) (83,330) -- -- -- -- (187) (1,676)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,149,276 $11,364,722 77,581 $714,807 3,744 $36,372 25,391 $231,883
========= =========== ====== ======== ===== ======= ======= ==========
1,047,871 $10,458,026 20,092 $193,916 480 $4,860 162,440 $1,577,056
1,000 10,026 -- -- -- -- -- --
(3,599) (35,620) -- -- -- -- (2,990) (29,533)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,045,272 $10,432,432 20,092 $193,916 480 $4,860 159,450 $1,547,523
========= =========== ====== ======== ===== ======= ======= ==========
1,065,506 $10,685,448 50,281 $517,626 3,717 $38,371 5,805 $62,275
2,895 31,015 62 644 2 16 14 154
(2,413) (26,075) (3) (34) -- -- (40) (440)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,065,988 $10,690,388 50,340 $518,236 3,719 $38,387 5,779 $61,989
========= =========== ====== ======== ===== ======= ======= ==========
1,088,400 $10,888,194 39,703 $416,363 1,183 $12,436 4,593 $46,707
928 10,031 -- -- -- -- -- --
(4,038) (42,827) -- -- -- -- (32) (330)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,085,290 $10,855,398 39,703 $416,363 1,183 $12,436 4,561 $46,377
========= =========== ====== ======== ===== ======= ======= ==========
1,016,509 $10,145,150 24,286 $244,391 5,000 $50,000 38,052 $358,123
39,719 375,220 217 2,147 71 709 815 7,589
(217) (2,000) -- -- -- -- (275) (2,571)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,056,011 $10,518,370 24,503 $246,538 5,071 $50,709 38,592 $363,141
========= =========== ====== ======== ===== ======= ======= ==========
1,037,779 $10,337,282 22,598 $227,797 1,001 $10,006 144,764 $1,328,878
57,416 529,917 312 3,080 -- -- 3,662 33,880
(1,481) (13,656) -- -- -- -- (1,100) (9,958)
- --------- ----------- ------ -------- ----- ------- ------- ----------
1,093,714 $10,853,543 22,910 $230,877 1,001 $10,006 147,326 $1,352,800
========= =========== ====== ======== ===== ======= ======= ==========
1,020,228 $10,183,405 9,799 $99,784 750 $7,500
37,748 353,653 101 1,001 -- --
(462) (4,363) -- -- -- --
- --------- ----------- ------ -------- ----- -------
1,057,514 $10,532,695 9,900 $100,785 750 $7,500
========= =========== ====== ======== ===== =======
$10,719,900
272,487
(108,470)
-----------
$10,883,917
===========
</TABLE>
55
<PAGE>
NOTE F - ORGANIZATION COSTS
Each Portfolio bears the costs incurred in connection with its organization
including the fees and expenses of registering and qualifying its shares for
distribution under Federal and state securities regulations. All such costs are
being amortized on the straight-line method over a period of five years from
the commencement of operations of each Portfolio. In the event that any of the
initial shares of the Portfolio are redeemed during such amortization period,
the Portfolio will be reimbursed for any unamortized costs in the same
proportion as the number of shares redeemed bears to the number of initial
shares outstanding at the time of the redemption.
NOTE G - FINANCIAL INSTRUMENTS
The Funds regularly trade financial instruments with off-balance sheet risk in
the normal course of their investing activities to assist in managing exposure
to market risks, such as interest rates and foreign currency exchange rates.
These financial instruments include forward currency contracts and future
contracts.
The notional or contractual amounts of these instruments represent the
investments the Funds have in particular classes of financial instruments and
do not necessarily represent the amounts potentially subject to risk. The
measurement of the risk associated with these instruments is meaningful only
when all related and offsetting transactions are considered. A summary of
obligations under these financial instruments at April 30, 1995 is as follows:
Forward Currency Contracts:
Lincoln New Pacific
<TABLE>
<CAPTION>
Net Unrealized
Settlement Date Contracts to Deliver Currency In Exchange For Appreciation
- --------------- -------------------- ------------ --------------- --------------
<S> <C> <C> <C> <C>
5/24/95 49,545,000 Japanese Yen $600,000 $8,242
======
</TABLE>
Forward Contracts
Lincoln Enterprise
<TABLE>
<CAPTION>
Net Unrealized
Number of Sell Contracts Type Expiration Date Contract Value Appreciation
- ------------------------ -------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
14 S&P MidCap 400 June 15, 1995 $1,305,500 $53,000
=======
</TABLE>
NOTE H - FOREIGN SECURITIES
The Lincoln World Growth and Lincoln New Pacific Portfolios may invest
substantially all of their assets in foreign securities. Investing in
securities of foreign companies and foreign governments involves special risks
and considerations not typically associated with investing in U.S. companies
and the U.S. Government. These risks include revaluation of currencies and
future adverse political and economic developments. Moreover, securities of
many foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies and the U.S. Government.
56
<PAGE>
LINCOLN ADVISOR FUNDS
BOWLING GREEN STATION
P.O. BOX 1012
NEW YORK, NY 10275-0529
FORM 27955A 12/94
