KNOWLEDGE DISCIPLINE SERVICE CHOICE
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INVESCO Variable
Investment Funds
Mutual funds sold exclusively to insurance company separate accounts for
variable annuity and variable life insurance contracts.
HIGH YIELD FUND
EQUITY INCOME FUND
TOTAL RETURN FUND
BLUE CHIP GROWTH FUND
DYNAMICS FUND
SMALL COMPANY GROWTH FUND
HEALTH SCIENCES FUND
TECHNOLOGY FUND
REALTY FUND
UTILITIES FUND
SEMI-ANNUAL
[INVESCO LOGO]
INVESCO
Semiannual Report | June 30, 1999
<PAGE>
MARKET HEADLINES: JANUARY TO JUNE 1999
The first six months of 1999 witnessed a welcome global healing for overseas
economies, while the U.S. economy remained as healthy as it had been in decades.
The results were generally very positive for world markets, although some
investors enjoyed much more robust returns than others.
Throughout the winter, the largest, fastest-growing companies led U.S. stock
advances as investors kept one eye on the continuing problems overseas and
another on the blossoming technological promise of the American economy. The
firms most directly tied to technological innovations, such as
telecommunications companies and Internet providers, outdistanced the pack.
Meanwhile, cyclical issues suffered, as did many small or slower-growing company
stocks.
By spring, however, the threat of economic overheating rather than worldwide
depression loomed largest in many investors' minds. Signs of renewed economic
strength abroad and remarkable growth figures at home led many to believe that
the Federal Reserve Board would soon reverse course and tighten the money supply
to cool down the economy--and indeed, market interest rates crept upward. Too
much growth rather than too little encouraged many to head for cyclical
industries poised to benefit from improving markets.
As the "cyclical rotation" continued, the market averages seemed to bounce
against a ceiling, putting an end to their dizzying ascent since the fall. By
June, however, investors headed back into the market, reassured once again by
economic data that inflation was not an imminent threat. Indeed, while the Fed
raised rates by one-quarter of a percent at the end of the month, it announced
that it had no bias to raise them again in the near future. Market averages shot
upward as many investors determined that the "Goldilocks economy" of low
inflation and high growth was not going to be visited by the bears anytime soon.
INVESCO VARIABLE INVESTMENT FUNDS, INC.
The line graphs on the following pages illustrate, for the periods from
inception through 6/30/99, the value of a $10,000 investment in each of the
INVESCO Variable Investment Funds, plus reinvested dividends and capital gain
distributions. The charts and other total return figures cited reflect the
funds' operating expenses, but the indexes do not have expenses, which would, of
course, have lowered their performance. (Past performance is not a guarantee of
future results.)(1),(2)
VIF--HIGH YIELD FUND
VIF-HIGH YIELD FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 1.73%
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5 YEARS 12.18%
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SINCE INCEPTION (5/94) 11.92%
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For the six-month period ended 6/30/99, VIF--High Yield Fund had a total
return of 6.18%. This strongly outperformed the Merrill Lynch High Yield Master
Index, which over the same period had a total return of 1.76%. (Of course, past
performance is not a guarantee of future results.)(1),(2)
At the beginning of 1999, the high yield market recovered from its lows of
the previous year as we had predicted. As the year progressed, however, heavy
new issue activity, volatile equity markets, and speculation concerning the
potential scale of Federal Reserve Board tightening took a toll on the fund.
Technical weakness still persists, although we are beginning to witness
increased enthusiasm for the sector through purchases of mutual funds. In our
opinion, the strong fundamentals created by continuing domestic economic growth
and the return of a stronger global economy are not fully reflected in current
valuations, and we anticipate that technical conditions will improve as the
magnitude of new deals declines and investors return to the high yield market.
Overall, we feel this is an excellent time to be invested in high yield, as
eventually valuations must be driven by the strong fundamentals that underlie
the credits, not shorter-term technical influences.
<PAGE>
Graph: VIF - High Yield Fund Total Return from inception (5/94) through 6/30/99
This line graph compares the value of a $10,000 investment in VIF - High
Yield Fund to the value of a $10,000 investment in the Merrill Lynch High
Yield Master Index, assuming in each case reinvestment of all dividends
and capital gain distributions, for the period from inception (5/94)
through 6/30/99.
The fund's focus is on companies with improving credit profiles within
industries that possess improving fundamentals. The potential for increased
industry consolidation activity also drives fund performance. Telecommunications
and zero coupon bonds tend to be highly volatile and a primary area of focus for
the manager. Our focus on these areas has been extremely beneficial throughout
the beginning of 1999. However, during periods of poor technical conditions, as
experienced the last few months, valuations of these securities may suffer
disproportionately relative to the overall market. These same holdings should
recoup their valuations at a quicker pace during the eventual restoration of
stronger technical conditions. We feel very comfortable with our current
holdings and believe that the current portfolio mix presents a strong
opportunity for excellent total return results, although of course that cannot
be guaranteed.
FUND MANAGEMENT
VIF--High Yield Fund is managed by Senior Vice President and Director of
Fixed-Income Investments Donovan J. "Jerry" Paul. Jerry began his investment
career in 1976; before joining INVESCO, he worked for Stein, Roe & Farnham Inc.,
as well as Quixote Investment Management. He earned an MBA from the University
of Northern Iowa, and a BBA from the University of Iowa. He is a Chartered
Financial Analyst and Certified Public Accountant.
VIF--EQUITY INCOME FUND
(FORMERLY VIF-INDUSTRIAL INCOME FUND)
VIF--EQUITY INCOME FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 19.01%
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SINCE INCEPTION (8/94) 22.42%
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For the six-month period ended 6/30/99, VIF--Equity Income Fund had a total
return of 13.76%. This exceeded the 12.38% gain of the S&P 500 Index over the
same period, and it stood in contrast the loss of 2.28% suffered by the Lehman
Government/Corporate Bond Index. (Of course, past performance is not a guarantee
of future results.)(1),(2)
EQUITY STRATEGY
The equity markets rose sharply during the second quarter, though
traditional large-capitalization growth stocks, which have been the leaders of
the market, came under heavy pressure before rallying in late June.
High-multiple growth stocks sold-off sharply in April as a sudden rotation into
value stocks occurred. In April, value stocks, which had significantly
under-performed the market in 1998, skyrocketed higher--by 40% or more in many
cases. The relative lack of liquidity among value stocks magnified the impact of
this shift as money flowed into them from large-cap growth companies, forcing
violent positive stock appreciation. In May, stronger-than-expected economic
data sent the equity markets lower, as investors became increasingly nervous
about the potential for rising interest rates. However, June was a strong month
for equities, as investors became comfortable with the near-term outlook for
interest rates and large-cap growth stocks reasserted themselves.
<PAGE>
The fund's equity weighting closed the quarter at 85.3% of total net assets.
As spring progressed and the market rotated toward value stocks, the fund was
aided by the strong relative performance of its basic material, capital goods,
communication, consumer cyclical, energy, and technology holdings, while our
utilities, health care, and consumer staples holdings were weak. Individual
stocks performing strongly during the quarter included Weyerhaeuser, Allied
Signal, Tyco International, Bell Atlantic, GTE, Tandy, Liberty Media Group,
Apache, Altera, Texas Instruments, IBM, and Motorola. The fund's top five
holdings (Kansas City Southern Industries, Bank of New York, Tandy Corp, General
Electric, and Allied Signal) performed exceptionally well recently. We continued
to reduce our exposure to the technology sector during the second quarter.
As always, we favor stocks offering predictable and consistent earnings
growth. The fund will remain oriented towards the consumer, who continues to
exhibit strong spending patterns, with an emphasis on communications, consumer
cyclical, and consumer staples in fund holdings. We are cautiously optimistic on
prospects for the market but do remain concerned about rising interest rates.
FUND MANAGEMENT
Graph: VIF - Equity Income Fund Total Return from inception (8/94) through
6/30/99
This line graph compares the value of a $10,000 investment in VIF - Equity
Income Fund to the value of a $10,000 investment in the S&P 500 and Lehman
Government/Corporate Bond Indexes, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (8/94) through 6/30/99.
Senior Vice President and Director of Investments Charles P. Mayer is
responsible for the equity side of the portfolio. An industry veteran with 29
years of professional experience, he earned an MBA from St. John's University
and a BA from St. Peter's College. Previously, Charlie was with Westinghouse
Pension Investment Corp.
Senior Vice President and Director of Fixed-Income Investments Donovan J.
"Jerry" Paul serves as co-portfolio manager of the fund, overseeing fixed-income
securities. Jerry began his investment career in 1976; before joining INVESCO,
he worked for Stein, Roe & Farnham Inc., as well as Quixote Investment
Management. He earned an MBA from the University of Northern Iowa, and a BBA
from the University of Iowa. He is a Chartered Financial Analyst and Certified
Public Accountant.
VIF--TOTAL RETURN FUND
VIF--TOTAL RETURN FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 9.10%
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5 YEARS 14.94%
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SINCE INCEPTION (6/94) 14.78%
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For the six-month period ended 6/30/99, VIF--Total Return Fund had a total
return of 6.69%. During the same period, the S&P 500 Index had a total return of
12.38%, while the Lehman Government/Corporate Bond Index suffered a loss of
2.28%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
<PAGE>
Despite rising interest rates, the stock market continued its march upward
through the first six months of the year. The market's strength was very
broad-based in the second quarter, which represented a significant reversal from
recent trends and bodes well for active management; value stocks were up
significantly more than growth. Economically sensitive issues did particularly
well, led by basic material stocks (chemicals, paper, steels, etc.) as well as
capital goods issues, which encompass areas such as electrical equipment,
defense, machinery, waste management and manufacturing.
Graph: VIF - Total Return Fund Total Return from inception (6/94) through
6/30/99
This line graph compares the value of a $10,000 investment in VIF - Total
Return Fund to the value of a $10,000 investment in the S&P 500 and Lehman
Government/Corporate Bond Indexes, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (6/94) through 6/30/99.
The bond market did not fare nearly as well as the stock market. The
bellwether 30-year U.S. Treasury bond reached a yield of 6.16% during June, the
highest level in more than a year. Thus, second-quarter returns for most bond
indexes were negative. The Lehman Government/Corporate Bond Index was down for
both the quarter and the year. Currently, the best-performing sector is
mortgage-backed securities, as expected during a period of rising interest
rates. Corporate securities, which had outperformed their U.S. Treasury
counterparts earlier in 1999, were the worst-performing sector during the second
quarter.
FUND MANAGEMENT
VIF--Total Return Fund is managed by Edward C. Mitchell, Chairman of INVESCO
Capital Management, Inc. He earned his MBA at the University of Colorado and a
BA from the University of Virginia. Ed began his investment career in 1969.
He is assisted by David S. Griffin, who began his investment career in 1982.
David holds an MBA from the College of William & Mary, as well as a BA from Ohio
Wesleyan University. He is a Chartered Financial Analyst.
VIF--BLUE CHIP GROWTH FUND
VIF--BLUE CHIP GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 27.28%
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SINCE INCEPTION (8/97) 29.10%
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For the six-month period ended 6/30/99, the fund's total return was 7.94%,
which lagged the 12.38% return for the S&P 500 Index over the same period. (Of
course, past performance is not a guarantee of future results.)(1),(2)
<PAGE>
Graph: VIF - Blue Chip Growth Fund Total Return from inception (8/97)
through 6/30/99
This line graph compares the value of a $10,000 investment in VIF - Blue
Chip Growth Fund to the value of a $10,000 investment in the S&P 500
Index, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (8/97) through 6/30/99.
Although VIF-Blue Chip Growth Fund largely kept pace with the S&P 500 during
the month of June, the fund lags the S&P 500 Index year-to-date due to
investors' focus on cyclical issues and other traditional "value stocks." The
fund was aided during June by a variety of names ranging from General Electric
and Intel to Microsoft and Echostar Communications. Unfortunately, our largest
holdings--America Online, Charles Schwab, and companies within the
pharmaceutical group--generally partially offset this performance. As was the
case throughout 1998 and the first quarter of 1999, the fund outperformed during
June as investors rotated back into traditional growth issues in technology and
communication services.(2)
We anticipate no major change in strategy for the foreseeable future.
VIF-Blue Chip Growth Fund will continue to run as a relatively concentrated
portfolio -- holding roughly 30 to 40 stocks. The core portion of the fund
continues to focus on high-quality, large market-capitalization growth
companies. These more conservative growth names continue to look attractive, as
the current market environment tends to favor those companies providing
consistent earnings growth. We have increased diversification without
compromising the growth characteristics of the portfolio. Despite the increased
diversification of its holdings, the fund continues to be over-weighted in
faster growing industries such as technology and health care as well as the more
conservative consumer growth segment. Slower-growth industries such as utilities
and energy continue to be underweighted.
FUND MANAGEMENT
VIF--Blue Chip Growth Fund is managed by Vice President Trent E. May. He
received a BS from the Florida Institute of Technology and a MBA from Rollins
College. Before joining INVESCO in 1996, Trent was a senior equity
manager/equity analyst with Munder Capital Management. He is a Chartered
Financial Analyst.
Vice President Douglas J. McEldowney is co-manager of the fund. He received
a BA in Finance from the University of Kentucky and an MBA from Rollins College.
Before joining INVESCO in 1999, he was Senior Vice President and Portfolio
Manager at Bank of America Investment Management in Sarasota, Florida. He is a
Chartered Financial Analyst and a Certified Public Accountant.
VIF--DYNAMICS FUND
VIF--DYNAMICS FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 21.92%
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SINCE INCEPTION (8/97) 23.84%
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The fund's return for the six-month period ended 6/30/99 was 20.33%. This
dramatically exceeded the return of the S&P MidCap 400 Index over the same
period, which rose 6.87%. (Of course, past performance is not a guarantee of
future results.)(1),(2)
While the upward shift in long-term interest rates this spring pressured
valuations of growth stocks in general, the fund still recognized appreciation
in traditional growth sectors such as technology, communications and consumer
products. Top-performing stocks in these areas included Exodus Communications,
Allegiance Telecom, and Echostar. Renewed concerns over inflation and higher
interest rates continued to weigh on the financial services sector, but health
care stocks staged a modest rally in June. In the energy and capital goods
sectors, still relatively small fund holdings, strong stock price performances
were achieved by Molex and Nabors Industries.
Graph: VIF - Dynamics Fund Total Return from inception (8/97) through 6/30/99
This line graph compares the value of a $10,000 investment in VIF Dynamics
Fund to the value of a $10,000 investment in the S&P MidCap 400 Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (8/97) through 6/30/99.
<PAGE>
The appeal of high-quality mid-capitalization growth companies should
continue to gain recognition now that the global economy appears to be in a
recovery phase. Our strategy remains focused on the core: leading, high-return
mid-capitalization companies in the major growth sectors of technology,
communications, consumer, financial services, and health care. Attractive
consumer groups include the specialty retailers, ad agencies, radio and outdoor
companies, and the cable sector. The technology sector has already experienced a
strong rebound off of the October lows, but the semiconductor and networking
groups remain of interest. The services and equipment segments of the
communication sector continue to show excellent growth. While the health care
sector is attractive, the leading mid-caps are being quickly consolidated, not
leaving much to choose from. The median market cap holding in the fund is
approximately $4 billion.
FUND MANAGEMENT
VIF--Dynamics Fund is managed by INVESCO Senior Vice President and Growth
Team leader Timothy J. Miller and Vice President Thomas R. Wald. Tim received
his MBA from the University of Missouri, and a BSBA from St. Louis University. A
19-year veteran of the investment business, he is a Chartered Financial Analyst.
Before joining INVESCO in 1992, Tim was an analyst and portfolio manager with
Mississippi Valley Advisors.
Thomas R. Wald assumed responsibilities of co-manager in October 1997. He
received his MBA from The Wharton School, University of Pennsylvania, and a BA
from Tulane University. Before joining INVESCO in 1997, Tom was the senior
health care analyst at Munder Capital Management. He is a Chartered Financial
Analyst.
VIF--SMALL COMPANY GROWTH FUND
VIF--SMALL COMPANY GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 19.44%
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SINCE INCEPTION (8/97) 15.50%
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The fund's return for the six-month period ended 6/30/99 was 13.19%. While
this performance lagged the broad market, it exceeded the returns of
smaller-capitalization stocks overall as measured by the Russell 2000 Index,
which rose 9.28% over the same period. (Of course, past performance is not a
guarantee of future results.)(1),(2)
We use a bottom-up, analytical approach to seek companies with accelerating
earnings growth due to rapid sales growth and new products or services.
Consistency and stability of earnings will continue to be a central theme in
1999, as we focus on companies whose product lines can remain strong even in the
face of recent international market turmoil. Communication services and
equipment remain a strong area of interest, as do business services companies.
The financial sector continues to be driven by mergers and consolidation. Our
technology positions are focused on software, communications equipment, and
other areas that should exhibit sustainable earnings growth even in a mild
economic slowdown. Low unemployment, strong consumer confidence and increasing
disposable income are driving the consumer cyclical sector.
Graph: VIF - Small Company Growth Fund Total Return from inception (8/97)
through 6/30/99
This line graph compares the value of a $10,000 investment in VIF - Small
Company Growth Fund to the value of a $10,000 investment in the Russell
2000 Index, assuming in each case reinvestment of all dividends and
capital gain distributions, for the period from inception (8/97) through
6/30/99.
<PAGE>
FUND MANAGEMENT
Stacie L. Cowell is the portfolio manager of VIF--Small Company Growth Fund.
She earned her BA in Economics from Colgate University, her MS in Finance from
the University of Colorado at Denver, and she is a Chartered Financial Analyst.
Prior to joining INVESCO, Stacie was a senior equities analyst with Founders
Asset Management, and a capital markets and trading analyst with Chase Manhattan
Bank. She is assisted by co-managers Timothy J. Miller and Trent E. May.
VIF--HEALTH SCIENCES FUND
For the six-month period ended 6/30/99, the fund's total return was -4.19%,
compared to the 12.38% return for the S&P 500 Index over the same period. (Of
course, past performance is not a guarantee of future results.)(1),(2)
As a group, health care stocks have lagged the broad market this year.
Recently, there has been a paradigm shift from large-capitalization
pharmaceutical companies to smaller-cap biotechnology and pharmaceutical firms.
These companies have less exposure to Medicare reform and were trading at
attractive relative valuations. The current market has rewarded these smaller
companies with outperformance relative to the larger-cap companies. Areas that
have outperformed include biotechnology and ophthalmology.
VIF--HEALTH SCIENCES FUND
VIF--HEALTH SCIENCES FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 10.86%
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SINCE INCEPTION (5/97) 21.61%
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We remain overweighted in the pharmaceutical sector, which underperformed
the broader market over this performance period. Several macroeconomic factors
such as rising interest rates, increased earnings for companies outside the
sector and looming Medicare reform have adversely affected the group's
performance. However, we believe the long-term fundamentals for the group remain
strong, and we will continue to seek opportunities in companies that should meet
or exceed expectations as a result of new product launches and/or increased
market share of existing products. Another area of interest is in the medical
devices area. We believe that new product cycle introductions will improve the
fundamentals of this group over the long term.
Graph: VIF--Health Sciences Fund Total Return from inception (5/97) through
6/30/99
This line graph compares the value of a $10,000 investment in VIF - Health
Sciences Fund to the value of a $10,000 investment in the S&P 500 Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (5/97) through 6/30/99.
FUND MANAGEMENT
VIF--Health Sciences Fund is managed by INVESCO Senior Vice President John
R. Schroer, a Chartered Financial Analyst. He started his investment career in
1989, after earning an MBA and BA from the University of Wisconsin.
VIF--TECHNOLOGY FUND
VIF--TECHNOLOGY FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 49.83%
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SINCE INCEPTION (5/97) 40.46%
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<PAGE>
The fund's return for the six-month period ended 6/30/99 was 42.05%. This
dramatically outpaced the S&P 500 Index, which returned 12.38% over the same
time period. (Of course, past performance is not a guarantee of future
results.)(1),(2)
Graph: VIF--Technology Fund Total Return from inception (5/97) through 6/30/99
This line graph compares the value of a $10,000 investment in VIF
Technology Fund to the value of a $10,000 investment in the S&P 500 Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (5/97) through 6/30/99.
We expect the performance of technology stocks to continue to be volatile
over the next several months, due to expected periodic concerns over Y2K-related
spending freezes and seasonal issues--summer tends to be one of underperformance
for the technology sector. Additionally, while the market seems less concerned
about rising interest rates at this moment, we believe that anxiety could
manifest itself once again later this year. We have been increasing our exposure
to software stocks, where valuations have been depressed due to Y2K concerns,
and we will use periods of weakness to improve the quality of the portfolio, as
well as take advantage of lower stock prices to initiate or add to positions of
companies with strong fundamentals.
FUND MANAGEMENT
In January 1999, William R. Keithler, a Chartered Financial Analyst with 15
years of experience in the investment industry, rejoined INVESCO and assumed the
responsibilities of Senior Vice President and portfolio manager for
VIF--Technology Fund. Bill has an MS from the University of Wisconsin-Madison,
and BS from Webster College. An INVESCO Senior Vice President and portfolio
manager from 1986 to 1993, most recently he served as Vice President and
portfolio manager with Berger Associates.
VIF--REALTY FUND
VIF--REALTY FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR -5.53%
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SINCE INCEPTION (4/98) -8.30%
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The fund's cumulative return for the six-month period ended 6/30/99 was
6.69%. During the same time period, the NAREIT Composite had a total return of
4.78%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
The Real Estate Investment Trust market posted a significant turnaround for
the second quarter, ending up 10.08%. This return exceeded the S&P 500 Index (up
to 7.05%), but lagged the small-capitalization Russell 2000 Index (up 15.55%).
It appears that investor psychology finally turned around in April, led by
information that the "Oracle of Omaha," Warren Buffett, has been a big buyer of
REITs and that investor sentiment may have shifted towards income & value
securities. REIT earnings are expected to grow by about 9% for 1999, while REIT
dividends are expected to increase at a rate of 5.5% to 6.0% for the year.
Current REIT dividend yields of 7.34% remain attractive.
Graph: VIF--Realty Fund Total Return from inception (4/98) through 6/30/99
This line graph compares the value of a $10,000 investment in VIF - Realty
Fund to the value of a $10,000 investment in the S&P 500 and NAREIT
Indexes, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (4/98) through 6/30/99.
While REIT prices have seen some modest recovery from severely depressed
levels, we believe that a continuation of steady earnings growth, expected to be
about 9% during 1999, should help to spur further gains. We expect that the
larger-cap names in the sector--those with continued access to capital, solid
management, and good internal earnings growth prospects from existing property
portfolios--will be the leaders during this ongoing REIT recovery. We continue
to diversify the portfolio by geographic region and by property type with an
emphasis in those areas where we consider real estate supply/demand conditions
to be favorable.
FUND MANAGEMENT
VIF--Realty Fund's investments are selected by a team of INVESCO Realty
Advisors, Inc. portfolio managers.
<PAGE>
VIF--UTILITIES FUND
VIF--UTILITIES FUND
AVERAGE ANNUAL TOTAL RETURN
AS OF 6/30/99(1)
1 YEAR 24.68%
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SINCE INCEPTION (1/95) 18.30%
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For the six-month period ended 6/30/99, VIF--Utilities Fund achieved a total
return of 11.64%, which easily surpassed the 1.17% return of the S&P Utility
Index during the same period. (Of course, past performance is not a guarantee of
future results.)(1),(2)
Electric utilities stalled in June after strong performance earlier this
year, as investors moved away from the interest rate-sensitive sector, causing
the stocks to under-perform the overall market. Natural gas stocks continued to
post solid gains on improved industry fundamentals and a positive outlook for
commodity prices. Competitive local exchange carriers posted solid gains in June
as business fundamentals continued to strengthen. The incumbent local exchange
carriers rebounded from a tepid May as investors began to rotate to the more
value-oriented areas of telecom. Wireless stocks continued to perform well as
carriers experienced strong subscriber growth and higher revenues per
subscriber. Long-distance stocks posted mixed results; Qwest Communications
traded down sharply on the news of its intention to purchase US West
Communications and rival Frontier Communications.
Graph: VIF--Utilities Fund Total Return from inception (1/95) through 6/30/99
This line graph compares the value of a $10,000 investment in VIF
Utilities Fund to the value of a $10,000 investment in the S&P 500 and Dow
Jones Utilities Average Indexes, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(1/95) through 6/30/99.
Going forward, our holdings in the electric utilities will be skewed toward
high-quality, low-cost operators, with a bias toward companies that are exiting
the generation business. Fund holdings will remain focused in states where
regulatory visibility is highest. We have moved to a market-weight position in
natural gas stocks until there is better visibility on gas prices. The regional
Bell operating companies continue to deliver good growth relative to the
electric utility group with less regulatory uncertainty and better dividend
growth potential. Telecommunications stocks will be monitored for valuation and
regulatory changes, either one of which could prompt an increase or decrease in
our portfolio weighting.
FUND MANAGEMENT
The fund is managed by Vice President Brian B. Hayward. Previously, he was a
senior equity analyst for Mississippi Valley Advisors in St. Louis, Missouri and
began his investment career in 1985. Brian earned a BA in Mathematics and a MA
in Economics from the University of Missouri. He is a Chartered Financial
Analyst.
<PAGE>
YEAR 2000 COMPUTER ISSUE.
Many computer systems in use today may not be able to recognize any date
after December 31, 1999. If these systems are not fixed by that date, it is
possible that they could generate erroneous information or fail altogether.
INVESCO has committed substantial resources in an effort to make sure that its
own major computer systems will continue to function on and after January 1,
2000. Of course, INVESCO cannot fix systems that are beyond its control. If
INVESCO's own systems, or the systems of third parties upon which it relies, do
not perform properly after December 31, 1999, the Funds could be adversely
affected.
In addition, the markets for, or values of, securities in which the Funds
invest may possibly be hurt by computer failures affecting portfolio investments
or trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments.
SINCE THE FUNDS ARE ACTIVELY MANAGED, HOLDINGS WILL CHANGE OVER TIME.
(1)TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
FOR THE PERIODS INDICATED. PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT, WHEN
REDEEMED, AN INVESTOR'S SHARES MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED.
(2)THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
PERFORMANCE OF THE BROAD U.S. STOCK MARKET. THE S&P MIDCAP 400 IS AN UNMANAGED
INDEX INDICATIVE OF DOMESTIC MID-CAPITALIZATION STOCKS. THE RUSSELL 2000 INDEX
IS AN UNMANAGED INDEX INDICATIVE OF SMALLER-CAPITALIZATION STOCKS, WHILE THE S&P
UTILITY INDEX IS AN UNMANAGED INDEX OF UTILITIES STOCKS. THE LEHMAN GOVERNMENT/
CORPORATE BOND AND MERRILL LYNCH HIGH YIELD MASTER INDEXES ARE UNMANAGED INDEXES
INDICATIVE OF THE BROAD FIXED-INCOME AND HIGH-YIELD MARKETS, RESPECTIVELY. THE
NAREIT EQUITY INDEX IS AN UNMANAGED INDEX INDICATIVE OF THE U.S. REAL ESTATE
INVESTMENT TRUST MARKET.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO VARIABLE INVESTMENT FUNDS, INC.
JUNE 30, 1999
UNAUDITED
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
<S> <C> <C>
Blue Chip Growth Fund
100.00 COMMON STOCKS
3.32 BEVERAGES
Coca-Cola Co 210 $ 13,125
===================================================================================================================================
3.78 BROADCASTING
AT&T Corp-Liberty Media Group Class A Shrs(a) 200 7,350
Clear Channel Communications(a) 110 7,583
===================================================================================================================================
14,933
2.22 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Lucent Technologies 130 8,767
===================================================================================================================================
16.16 COMPUTER RELATED
BMC Software(a) 100 5,400
Cisco Systems(a) 150 9,675
Dell Computer(a) 400 14,800
EMC Corp(a) 100 5,500
International Business Machines 60 7,755
Microsoft Corp(a) 230 20,743
===================================================================================================================================
63,873
4.14 ELECTRICAL EQUIPMENT
General Electric 145 16,385
===================================================================================================================================
5.35 ELECTRONICS -- SEMICONDUCTOR
Altera Corp(a) 160 5,890
Intel Corp 150 8,925
Maxim Integrated Products(a) 95 6,317
===================================================================================================================================
21,132
10.25 FINANCIAL
Citigroup Inc 390 18,525
Schwab (Charles) Corp 200 21,975
===================================================================================================================================
40,500
21.01 HEALTH CARE DRUGS -- PHARMACEUTICALS
Bristol-Myers Squibb 230 16,201
Lilly (Eli) & Co 260 18,623
Merck & Co 200 14,800
Pfizer Inc 115 12,621
Warner-Lambert Co 300 20,812
===================================================================================================================================
83,057
1.69 HOUSEHOLD PRODUCTS
Procter & Gamble 75 6,694
===================================================================================================================================
4.29 INSURANCE
American International Group 145 16,974
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
2.57 OIL & GAS RELATED
Baker Hughes 200 $ 6,700
Exxon Corp 45 3,471
===================================================================================================================================
10,171
7.08 RETAIL
Home Depot 165 10,632
Wal-Mart Stores 360 17,370
===================================================================================================================================
28,002
6.15 SERVICES
America Online(a) 220 24,310
===================================================================================================================================
5.88 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp 285 15,907
MCI WorldCom(a) 85 7,331
===================================================================================================================================
23,238
6.11 TELEPHONE
BellSouth Corp 200 9,375
SBC Communications 255 14,790
===================================================================================================================================
24,165
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $284,651)
(Cost for Income Tax Purposes $288,226) $ 395,326
===================================================================================================================================
Dynamics Fund
100.00 COMMON STOCKS
0.48 AUTO PARTS
O'Reilly Automotive(a) 30 $ 1,511
===================================================================================================================================
4.92 BANKS
Northern Trust 50 4,850
State Street 50 4,269
Zions Bancorp(a) 100 6,350
===================================================================================================================================
15,469
0.68 BEVERAGES
Coca-Cola Enterprises 70 2,152
===================================================================================================================================
2.01 BROADCASTING
Clear Channel Communications(a) 80 5,515
Sinclair Broadcast Group Class A Shrs(a) 50 819
===================================================================================================================================
6,334
2.94 CABLE
Cox Communications Class A Shrs(a) 100 3,681
TCA Cable TV 100 5,550
===================================================================================================================================
9,231
11.38 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
ADC Telecommunications(a) 70 3,189
CIENA Corp(a) 35 1,057
Lucent Technologies 165 11,127
Nortel Networks 102 8,855
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
PairGain Technologies(a) 65 $ 748
Tellabs Inc(a) 160 10,810
===================================================================================================================================
35,786
12.21 COMPUTER RELATED
Autodesk Inc 45 1,330
BMC Software(a) 80 4,320
Cisco Systems(a) 134 8,643
Computer Horizons(a) 30 414
Electronic Arts(a) 95 5,154
HMT Technology(a) 80 200
i2 Technologies(a) 120 5,160
Keane Inc(a) 30 679
Momentum Business Applications(a) 2 14
Network Appliance(a) 60 3,352
Network Associates(a) 60 881
Parametric Technology(a) 100 1,388
PeopleSoft Inc(a) 120 2,070
RealNetworks Inc(a) 20 1,378
Remedy Corp(a) 80 2,150
Symantec Corp(a) 50 1,275
===================================================================================================================================
38,408
0.64 ELECTRICAL EQUIPMENT
SLI Inc(a) 75 2,025
===================================================================================================================================
8.40 ELECTRONICS -- SEMICONDUCTOR
Linear Technology 120 8,070
Maxim Integrated Products(a) 190 12,635
Xilinx Inc(a) 100 5,725
===================================================================================================================================
26,430
1.24 EQUIPMENT -- SEMICONDUCTOR
KLA-Tencor Corp(a) 60 3,892
===================================================================================================================================
1.07 GAMING
Midway Games(a) 40 518
Mirage Resorts(a) 50 838
Sun International Hotels Ltd(a) 45 2,014
===================================================================================================================================
3,370
1.59 HEALTH CARE DRUGS -- PHARMACEUTICALS
Allergan Inc 45 4,995
===================================================================================================================================
3.49 HEALTH CARE RELATED
Bausch & Lomb 50 3,825
Biomet Inc(a) 90 3,577
St Jude Medical(a) 100 3,563
===================================================================================================================================
10,965
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.11 HOUSEHOLD FURNITURE & APPLIANCES
Maytag Corp 50 $ 3,484
===================================================================================================================================
1.08 INSURANCE
Nationwide Financial Services Class A Shrs 75 3,394
===================================================================================================================================
3.18 INVESTMENT BANK/BROKER FIRM
Legg Mason 80 3,080
Price (T Rowe) Associates 80 3,070
Waddell & Reed Financial Class A Shrs 140 3,841
===================================================================================================================================
9,991
2.77 LEISURE TIME
International Game Technology 140 2,590
Royal Caribbean Cruises Ltd 140 6,125
===================================================================================================================================
8,715
0.44 MACHINERY
Milacron Inc 75 1,387
===================================================================================================================================
1.76 MANUFACTURING
Eaton Corp 60 5,520
===================================================================================================================================
5.76 OIL & GAS RELATED
Apache Corp 75 2,925
BJ Services(a) 40 1,177
Canadian Occidental Petroleum 120 1,935
Coflexip SA Sponsored ADR Representing 1/2 Ord Shr 50 2,175
Cooper Cameron(a) 75 2,780
EEX Corp(a) 120 833
Global Industries Ltd(a) 60 769
Kerr-McGee Corp 61 3,061
Nabors Industries(a) 75 1,833
National Energy Group(a) 190 13
Ocean Energy(a) 65 626
===================================================================================================================================
18,127
2.21 POLLUTION CONTROL
Republic Services Class A Shrs(a) 100 2,475
Waste Management(a) 83 4,461
===================================================================================================================================
6,936
0.55 PUBLISHING
Meredith Corp 50 1,731
===================================================================================================================================
7.38 RETAIL
Costco Cos(a) 25 2,002
Home Depot 80 5,155
Nordstrom Inc(a) 100 3,350
Tandy Corp 260 12,708
===================================================================================================================================
23,215
0.88 SAVINGS & LOAN
Charter One Financial 100 2,781
===================================================================================================================================
4.48 SERVICES
America Online(a) 40 4,420
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Avis Rent A Car(a) 50 $ 1,456
Omnicom Group 70 5,600
Professional Staff PLC Sponsored ADR Representing Cmn Shrs(a) 100 650
Robert Half International(a) 75 1,950
===================================================================================================================================
14,076
1.73 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
Millicom International Cellular SA(a) 50 1,575
VoiceStream Wireless(a) 70 1,991
Western Wireless Class A Shrs(a) 70 1,890
===================================================================================================================================
5,456
6.58 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp 291 16,241
ICG Communications(a) 85 1,817
Qwest Communications International(a) 80 2,645
===================================================================================================================================
20,703
7.20 TELEPHONE
CenturyTel Inc 135 5,366
COLT Telecom Group PLC Sponsored ADR Representing 4 Ord Shrs(a) 200 17,275
===================================================================================================================================
22,641
1.44 TOYS
Hasbro Inc 90 2,514
Mattel Inc 76 2,009
===================================================================================================================================
4,523
0.40 TRANSPORTATION
Laidlaw Inc 170 1,254
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $217,297)(b) $ 314,502
===================================================================================================================================
Equity Income Fund
82.86 COMMON STOCKS
1.56 AEROSPACE & DEFENSE
Northrop Grumman 5,600 $ 371,350
Raytheon Co Class B Shrs 11,500 809,313
===================================================================================================================================
1,180,663
0.45 ALUMINUM
Reynolds Metals 5,800 342,200
===================================================================================================================================
1.93 AUTOMOBILES
Ford Motor 10,000 564,375
General Motors Class H Shrs(a) 16,000 900,000
===================================================================================================================================
1,464,375
7.63 BANKS
Bank of New York 30,000 1,100,625
Chase Manhattan 11,700 1,013,512
First Tennessee National 20,000 766,250
Fleet Financial Group 18,000 798,750
Morgan (J P) & Co 9,000 1,264,500
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Summit Bancorp 20,000 $ 836,250
===================================================================================================================================
5,779,887
1.69 BEVERAGES
Anheuser-Busch Cos 18,000 1,276,875
===================================================================================================================================
1.26 BROADCASTING
AT&T Corp-Liberty Media Group Class A Shrs(a) 26,000 955,500
===================================================================================================================================
1.47 CABLE
MediaOne Group(a) 15,000 1,115,625
===================================================================================================================================
0.56 CHEMICALS
Lyondell Chemical 20,600 424,875
===================================================================================================================================
3.00 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Lucent Technologies 15,400 1,038,537
Motorola Inc 13,000 1,231,750
===================================================================================================================================
2,270,287
3.81 COMPUTER RELATED
EMC Corp(a) 3,500 192,500
Galileo International 15,300 817,594
International Business Machines 10,000 1,292,500
Microsoft Corp(a) 6,500 586,219
===================================================================================================================================
2,888,813
0.43 ELECTRIC UTILITIES
Alliant Energy 11,400 323,475
===================================================================================================================================
2.02 ELECTRICAL EQUIPMENT
General Electric 11,500 1,299,500
Honeywell Inc 2,000 231,750
===================================================================================================================================
1,531,250
2.88 ELECTRONICS -- SEMICONDUCTOR
Altera Corp(a) 14,600 537,462
Intel Corp 12,300 731,850
Texas Instruments 6,300 913,500
===================================================================================================================================
2,182,812
0.82 FINANCIAL
Citigroup Inc 13,100 622,250
===================================================================================================================================
5.53 FOODS
General Mills 10,000 803,750
Heinz (H J) Co 17,225 863,403
Hershey Foods 10,000 593,750
Kellogg Co 14,300 471,900
Quaker Oats 10,000 663,750
Tasty Baking 64,250 791,078
===================================================================================================================================
4,187,631
0.31 GAMING
Park Place Entertainment(a) 24,000 232,500
===================================================================================================================================
0.18 GOLD & PRECIOUS METALS MINING
Newmont Mining 7,000 139,125
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
6.48 HEALTH CARE DRUGS -- PHARMACEUTICALS
American Home Products 7,000 $ 402,500
Bristol-Myers Squibb 12,000 845,250
Merck & Co 14,000 1,036,000
Pharmacia & Upjohn 13,500 766,969
SmithKline Beecham PLC Sponsored ADR Representing 5 Ord Shrs 11,000 726,688
Warner-Lambert Co 7,500 520,313
Watson Pharmaceuticals(a) 17,500 613,594
===================================================================================================================================
4,911,314
2.17 HEALTH CARE RELATED
Boston Scientific(a) 18,000 790,875
Medtronic Inc 10,899 848,760
===================================================================================================================================
1,639,635
1.10 HOUSEHOLD FURNITURE & APPLIANCES
Maytag Corp 12,000 836,250
===================================================================================================================================
1.30 HOUSEHOLD PRODUCTS
Colgate-Palmolive Co 10,000 987,500
===================================================================================================================================
2.63 INSURANCE
Allmerica Financial 20,000 1,216,250
Ohio Casualty 8,000 289,000
Travelers Property Casualty Class A Shrs 12,500 489,063
===================================================================================================================================
1,994,313
1.44 LODGING -- HOTELS
Hilton Hotels 24,000 340,500
Marriott International Class A Shrs 20,000 747,500
===================================================================================================================================
1,088,000
3.76 MANUFACTURING
AlliedSignal Inc 21,000 1,323,000
Textron Inc 8,200 674,963
Tyco International Ltd 9,000 852,750
===================================================================================================================================
2,850,713
0.46 METALS MINING
Phelps Dodge 5,600 346,850
===================================================================================================================================
5.85 OIL & GAS RELATED
Apache Corp 17,900 698,100
Atlantic Richfield 7,000 584,937
Exxon Corp 11,000 848,375
Halliburton Co 18,100 819,025
Schlumberger Ltd 12,000 764,250
Unocal Corp 18,000 713,250
===================================================================================================================================
4,427,937
2.28 PAPER & FOREST PRODUCTS
Champion International 13,100 627,162
Weyerhaeuser Co 16,000 1,100,000
===================================================================================================================================
1,727,162
2.23 RAILROADS
Kansas City Southern Industries 26,500 1,691,031
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.09 RESTAURANTS
McDonald's Corp 20,000 $ 826,250
===================================================================================================================================
5.51 RETAIL
Dayton Hudson 16,000 1,040,000
Penney (J C) Co 11,000 534,187
Tandy Corp 40,000 1,955,000
Wal-Mart Stores 13,300 641,725
===================================================================================================================================
4,170,912
1.90 SAVINGS & LOAN
Charter One Financial 24,125 670,977
St Paul Bancorp 30,000 765,000
===================================================================================================================================
1,435,977
7.96 TELEPHONE
Ameritech Corp 12,000 882,000
Bell Atlantic 17,844 1,166,551
BellSouth Corp 16,000 750,000
Frontier Corp 14,000 826,000
GTE Corp 8,800 666,600
SBC Communications 12,500 725,000
US WEST 17,300 1,016,375
===================================================================================================================================
6,032,526
1.17 TOBACCO
Philip Morris 22,000 884,125
===================================================================================================================================
TOTAL COMMON STOCKS (Cost $47,674,452) 62,768,638
===================================================================================================================================
9.07 FIXED INCOME SECURITIES
0.65 US GOVERNMENT OBLIGATIONS
US Treasury Notes, 5.625%, 5/15/2008 (Cost $516,243) $ 500,000 489,688
===================================================================================================================================
8.42 CORPORATE BONDS
0.41 AIRLINES
Delta Air Lines, Deb, 10.375%, 12/15/2022 $ 250,000 311,482
===================================================================================================================================
0.70 BUILDING MATERIALS
USG Corp, Sr Notes, 8.500%, 8/1/2005 $ 500,000 530,097
===================================================================================================================================
0.74 CABLE
Comcast Cable Partners Ltd, Sr Discount Step-Up Deb, Zero Coupon(c)
11/15/2007 $ 300,000 273,375
Continental Cablevision, Sr Deb, 9.500%, 8/1/2013 $ 250,000 288,576
===================================================================================================================================
561,951
2.59 ELECTRIC UTILITIES
Consumers Energy, 1st Refunding Mortgage, 7.375%, 9/15/2023 $ 500,000 478,507
DQU-II Funding, Collateral Lease, 8.700%, 6/1/2016 $ 199,000 216,297
Gulf States Utilities, 1st Mortgage, 8.700%, 4/1/2024 $ 250,000 254,058
New York State Electric & Gas, 1st Mortgage, 8.300%, 12/15/2022 $ 200,000 200,361
Niagara Mohawk Power, Sr Discount Step-Up Notes, Series H, Zero Coupon(c)
7/1/2010 $ 500,000 376,644
Pennsylvania Power & Light, 1st Mortgage, 7.700%, 10/1/2009 $ 400,000 438,120
===================================================================================================================================
1,963,987
0.57 INSURANCE
Equitable Cos, Sr Notes, 9.000%, 12/15/2004 $ 400,000 433,350
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.32 LODGING-- HOTELS
Hilton Hotels, Sr Notes, 7.200%, 12/15/2009 $ 250,000 $ 239,237
===================================================================================================================================
1.40 OIL & GAS RELATED
Atlantic Richfield, Deb, 10.875%, 7/15/2005 $ 600,000 715,097
Coda Energy, Gtd Sr Secured Sub Notes, Series B, 10.500%, 4/1/2006 $ 100,000 102,750
Gulf Canada Resources Ltd, Sr Notes, 8.350%, 8/1/2006 $ 250,000 243,125
===================================================================================================================================
1,060,972
0.68 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp, Notes, 6.500%, 3/15/2029 $ 400,000 359,754
Level 3 Communications, Sr Discount Step-Up Notes, Zero Coupon(c), 12/1/2008 $ 250,000 153,750
===================================================================================================================================
513,504
1.01 TELEPHONE
Centel Capital, Deb, 9.000%, 10/15/2019 $ 250,000 283,175
MetroNet Communications
Sr Discount Step-Up Notes, Zero Coupon(c), 11/1/2007 $ 225,000 175,500
Sr Notes, 12.000%, 8/15/2007 $ 100,000 114,000
NEXTLINK Communications, Sr Notes, 9.625%, 10/1/2007 $ 200,000 194,500
===================================================================================================================================
767,175
TOTAL CORPORATE BONDS (Cost $6,662,616) 6,381,755
===================================================================================================================================
TOTAL FIXED INCOME SECURITIES (Cost $7,178,859) 6,871,443
===================================================================================================================================
8.07 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 6/30/1999 due 7/1/1999
at 4.750%, repurchased at $6,115,807 (Collateralized by US Treasury
Notes due 2/28/2002
at 6.250%, value $6,391,441) (Cost $6,115,000) $ 6,115,000 6,115,000
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $60,968,311)(b) $ 75,755,081
===================================================================================================================================
Health Sciences Fund
88.23 COMMON STOCKS
7.07 BIOTECHNOLOGY
Biogen Inc(a) 600 $ 38,587
Genzyme Corp(a) 300 14,550
Genzyme Surgical Products(a) 54 237
Gilead Sciences(a) 550 28,737
Immunex Corp(a) 200 25,487
MedImmune Inc(a) 600 40,650
NeXstar Pharmaceuticals(a) 900 17,944
===================================================================================================================================
166,192
1.65 ELECTRONICS -- INSTRUMENTS
PE Corp-PE Biosystems Group 200 22,950
Waters Corp(a) 300 15,938
===================================================================================================================================
38,888
52.32 HEALTH CARE DRUGS -- PHARMACEUTICALS
Abbott Laboratories 2,100 95,550
Allergan Inc 460 51,060
American Home Products 1,435 82,512
<PAGE>
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Bristol-Myers Squibb 1,630 $ 114,813
Forest Laboratories(a) 200 9,250
Johnson & Johnson 1,325 129,850
Lilly (Eli) & Co 820 58,733
Merck & Co 1,590 117,660
Pfizer Inc 890 97,678
Pharmacia & Upjohn 2,170 123,283
QLT PhotoTherapeutics(a) 200 11,000
Schering-Plough Corp 1,825 96,725
Shire Pharmaceuticals Group PLC(a) 345 2,877
SmithKline Beecham PLC Sponsored ADR Representing 5 Ord Shrs 1,565 103,388
Warner-Lambert Co 1,970 136,669
===================================================================================================================================
1,231,048
3.74 HEALTH CARE SERVICES
McKesson HBOC 500 16,062
Total Renal Care Holdings(a) 1,000 15,563
United HealthCare 900 56,363
===================================================================================================================================
87,988
0.38 INSURANCE
CIGNA Corp 100 8,900
===================================================================================================================================
23.07 MEDICAL EQUIPMENT & DEVICES
Baxter International 730 44,256
Biomet Inc 350 13,912
Boston Scientific(a) 1,590 69,861
Guidant Corp 1,980 101,846
Medtronic Inc 2,735 212,988
MiniMed Inc(a) 200 15,387
Novoste Corp(a) 400 8,400
Perclose Inc(a) 200 9,613
Summit Technology(a) 500 11,000
Synetic Inc(a) 250 17,188
VISX Inc(a) 300 23,756
Xomed Surgical Products(a) 300 14,606
===================================================================================================================================
542,813
TOTAL COMMON STOCKS (Cost $1,818,063) 2,075,829
===================================================================================================================================
11.77 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 6/30/1999 due 7/1/1999
at 4.750%, repurchased at $277,037 (Collateralized by US Treasury
Bonds, due 2/28/2002
at 6.250%, value $290,049) (Cost $277,000) $ 277,000 277,000
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $2,095,063)
(Cost for Income Tax Purposes $2,126,392) $ 2,352,829
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
High Yield Fund
91.62 FIXED INCOME SECURITIES
91.62 CORPORATE BONDS
1.31 BIOTECHNOLOGY
Packard BioScience, Sr Sub Notes, Series B, 9.375%, 3/1/2007 $ 650,000 612,625
===================================================================================================================================
6.65 BROADCASTING
Brill Media LLC/Brill Media Management, Gtd Sr Step-Up Notes
7.500%(c), 12/15/2007 $ 250,000 200,000
Chancellor Media, Gtd Sr Sub Notes, Series B
10.500%, 1/15/2007 $ 400,000 420,000
9.000%, 10/1/2008 $ 400,000 407,000
Cumulus Media, Gtd Sr Sub Notes, 10.375%, 7/1/2008 $ 400,000 424,000
LIN Holdings, Sr Discount Step-Up Notes, Zero Coupon(c), 3/1/2008 $ 1,200,000 792,000
LIN Television, Gtd Sr Sub Notes, 8.375%, 3/1/2008 $ 500,000 477,500
Spectrasite Holdings, Sr Discount Step-Up Notes, Zero Coupon(c)(e), 4/15/2009 $ 250,000 140,000
Telemundo Holdings, Sr Discount Step-Up Notes, Zero Coupon(c), 8/15/2008 $ 500,000 252,500
===================================================================================================================================
3,113,000
3.35 CABLE
Charter Communications Holdings, Sr Notes(e), 8.625%, 4/1/2009 $ 500,000 480,000
Comcast Cable Partners Ltd, Sr Discount Step-Up Deb, Zero Coupon(c)
11/15/2007 $ 950,000 865,688
Mediacom LLC/Mediacom Capital, Sr Notes(e), 7.875%, 2/15/2011 $ 250,000 223,125
===================================================================================================================================
1,568,813
2.37 CHEMICALS
Huntsman Corp, Sr Sub Notes(e), 9.500%, 7/1/2007 $ 500,000 472,500
Huntsman Polymers, Sr Notes, 11.750%, 12/1/2004 $ 600,000 636,000
===================================================================================================================================
1,108,500
1.42 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Metromedia Fiber Network, Sr Notes, Series B, 10.000%, 11/15/2008 $ 250,000 256,875
Worldwide Fiber, Sr Notes(e), 12.500%, 12/15/2005 $ 400,000 408,000
===================================================================================================================================
664,875
3.30 COMPUTER RELATED
Rhythms NetConnections, Sr Discount Step-Up Notes, Zero Coupon(c), 5/15/2008 $ 750,000 403,125
Verio Inc, Sr Notes
13.500%, 6/15/2004 $ 625,000 700,000
11.250%, 12/1/2008 $ 250,000 261,875
WAM!NET, Gtd Sr Discount Step-Up Notes, Series B, Zero Coupon(c), 3/1/2005 $ 300,000 181,500
===================================================================================================================================
1,546,500
2.56 ELECTRIC UTILITIES
Niagara Mohawk Power
Sr Discount Step-Up Notes, Series H, Zero Coupon(c), 7/1/2010 $ 500,000 376,644
Sr Notes, Series G, 7.750%, 10/1/2008 $ 800,000 822,993
===================================================================================================================================
1,199,637
0.44 ELECTRICAL EQUIPMENT
Alpine Group, Gtd Sr Secured Notes, Series B, 12.250%, 7/15/2003 $ 200,000 206,000
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.40 ENGINEERING & CONSTRUCTION
Ryland Group, Sr Sub Notes, 8.250%, 4/1/2008 $ 200,000 $ 185,000
===================================================================================================================================
6.31 GAMING
Aztar Corp, Sr Sub Notes, 8.875%(e), 5/15/2007 $ 1,000,000 957,500
Hollywood Casino, Sr Secured Notes, 11.250%(e), 5/1/2007 $ 250,000 251,875
Horseshoe Gaming LLC, Sr Sub Notes, 8.625%(e), 5/15/2009 $ 1,000,000 971,250
Isle of Capri Casinos, Sr Sub Notes, 8.750%(e), 4/15/2009 $ 500,000 468,750
Station Casinos, Sr Sub Notes, 9.750%, 4/15/2007 $ 300,000 304,500
===================================================================================================================================
2,953,875
2.17 HEALTH CARE RELATED
PharMerica Inc, Gtd Sr Sub Notes, 8.375%, 4/1/2008 $ 1,000,000 1,015,000
===================================================================================================================================
0.78 HOUSEHOLD PRODUCTS
Home Products International, Gtd Sr Sub Notes, 9.625%, 5/15/2008 $ 400,000 365,000
===================================================================================================================================
1.57 IRON & STEEL
Inland Steel, 1st Mortgage, Series R, 7.900%, 1/15/2007 $ 500,000 478,750
National Steel, 1st Mortgage, 8.375%, 8/1/2006 $ 250,000 255,625
===================================================================================================================================
734,375
1.04 LEISURE TIME
Bally Total Fitness Holdings, Sr Sub Notes, Series D, 9.875%, 10/15/2007 $ 500,000 485,000
===================================================================================================================================
0.48 LODGING-- HOTELS
Signature Resorts, Sr Sub Notes, 9.750%, 10/1/2007 $ 250,000 226,250
===================================================================================================================================
0.46 METALS MINING
Glencore Nickel Property Ltd, Gtd Sr Secured Notes, 9.000%, 12/1/2014 $ 250,000 215,000
===================================================================================================================================
9.03 OIL & GAS RELATED
Belco Oil & Gas, Sr Sub Notes, Series B, 8.875%, 9/15/2007 $ 400,000 394,000
Canadian Forest Oil Ltd, Gtd Sr Sub Notes, 8.750%, 9/15/2007 $ 700,000 673,750
Chiles Offshore LLC/Chiles Offshore Finance, Gtd Sr Notes, 10.000%, 5/1/2008 $ 500,000 415,000
Cliffs Drilling, Gtd Sr Notes, Series B, 10.250%, 5/15/2003 $ 360,000 349,200
Coda Energy, Gtd Sr Sub Notes, Series B, 10.500%, 4/1/2006 $ 450,000 462,375
Continental Resources, Gtd Sr Sub Notes, 10.250%, 8/1/2008 $ 400,000 293,500
Forest Oil, Gtd Sr Sub Notes, 10.500%, 1/15/2006 $ 250,000 259,375
GulfMark Offshore, Gtd Sr Notes, 8.750%, 6/1/2008 $ 250,000 236,250
Houston Exploration, Sr Sub Notes, Series B, 8.625%, 1/1/2008 $ 500,000 490,000
Ocean Energy, Gtd Sr Sub Notes
10.375%, 10/15/2005 $ 250,000 263,750
Series B, 8.375%, 7/1/2008 $ 400,000 388,000
===================================================================================================================================
4,225,200
1.53 PAPER & FOREST PRODUCTS
Bear Island Paper LLC/Bear Island Finance II, Sr Secured Notes, Series B
10.000%, 12/1/2007 $ 250,000 242,500
Doman Industries Ltd, Sr Notes, Series B, 9.250%, 11/15/2007 $ 350,000 206,500
SD Warren, Sub Exchangeable Deb(f), 14.000%, 12/15/2006 $ 231,749 264,773
===================================================================================================================================
713,773
0.91 SAVINGS & LOAN
Western Financial Savings Bank, Sub Capital Deb, 8.875%, 8/1/2007 $ 500,000 424,368
===================================================================================================================================
5.55 SERVICES
Heritage Media, Sr Sub Notes, 8.750%, 2/15/2006 $ 500,000 515,000
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
NationsRent Inc, Gtd Sr Sub Notes, 10.375%, 12/15/2008 $ 625,000 $ 618,750
United Rentals
Gtd Sr Sub Notes, Series B, 8.800%, 8/15/2008 $ 750,000 727,500
Notes, 9.000%(e), 4/1/2009 $ 750,000 735,000
===================================================================================================================================
2,596,250
0.45 SHIPPING
Navigator Gas Transport PLC,1st Priority Shipping Mortgage Notes(e)
10.500%, 6/30/2007 $ 250,000 122,500
TBS Shipping International Ltd, 1st Pfd Shipping Mortgage Notes(d)
10.000%, 5/1/2005 $ 250,000 88,750
===================================================================================================================================
211,250
0.40 SPECIALTY PRINTING
World Color Press, Sr Sub Notes, 7.750%, 2/15/2009 $ 200,000 188,000
===================================================================================================================================
7.73 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
Cencall Communications, Sr Discount Notes, 10.125%, 1/15/2004 $ 800,000 814,000
Esat Holdings Ltd, Sr Deferred Step-Up Notes, Zero Coupon(c), 2/1/2007 $ 650,000 462,313
Nextel Communications
Sr Discount Notes, 9.750%, 8/15/2004 $ 750,000 763,125
Sr Discount Step-Up Notes, Zero Coupon(c), 9/15/2007 $ 500,000 363,750
Price Communications Wireless, Gtd Sr Secured Notes, Series B, 9.125%
12/15/2006 $ 150,000 151,500
Telecorp PCS, Sr Discount Step-Up Notes, Zero Coupon(c)(e), 4/15/2009 $ 1,500,000 828,750
Teligent Inc, Sr Discount Step-Up Notes, Series B, Zero Coupon(c), 3/1/2008 $ 400,000 236,000
===================================================================================================================================
3,619,438
11.75 TELECOMMUNICATIONS -- LONG DISTANCE
Call-Net Enterprises, Sr Discount Step-Up Notes, Zero Coupon(c), 5/15/2009 $ 1,000,000 552,500
Esprit Telecom Group PLC, Sr Notes, 11.500% 12/15/2007 $ 400,000 425,000
GCI Inc, Sr Notes, 9.750%, 8/1/2007 $ 495,000 487,575
GST Telecommunications/GST Network Funding, Sr Secured Discount
Step-Up Notes, Zero Coupon(c)(e), 5/1/2008 $ 400,000 226,000
Level 3 Communications
Sr Discount Step-Up Notes, Zero Coupon(c), 12/1/2008 $ 2,600,000 1,599,000
Sr Notes, 9.125%, 5/1/2008 $ 500,000 491,250
Primus Telecommunications Group, Sr Notes, Series B, 9.875%, 5/15/2008 $ 250,000 236,250
Qwest Communications International, Sr Discount Step-Up Notes
Series B, Zero Coupon(c)
10/15/2007 $ 400,000 312,000
2/1/2008 $ 250,000 185,000
STARTEC Global Communications, Sr Notes, 12.000%, 5/15/2008 $ 150,000 134,250
TeleWest Communications PLC, Sr Discount Step-Up Notes
Zero Coupon(c)(e), 4/15/2009 $ 500,000 333,125
Viatel Inc, Sr Notes(e), 11.500%, 3/15/2009 $ 500,000 515,000
===================================================================================================================================
5,496,950
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
19.66 TELEPHONE
Diamond Cable Communications PLC, Sr Discount Step-Up Notes, Zero Coupon(c)
9/30/2004 $ 100,000 $ 103,750
12/15/2005 $ 500,000 450,000
2/15/2007 $ 400,000 308,000
Facilicom International, Sr Notes, Series B, 10.500%, 1/15/2008 $ 500,000 390,000
Intermedia Communications
Sr Discount Step-Up Notes, Series B, Zero Coupon(c), 3/1/2009 $ 1,750,000 971,250
Sr Notes, Series B, 8.500%, 1/15/2008 $ 250,000 228,750
McLeodUSA Inc, Sr Notes
9.250%, 7/15/2007 $ 250,000 248,125
8.125%(e), 2/15/2009 $ 750,000 693,750
MetroNet Communications
Sr Discount Step-Up Notes, Zero Coupon(c)
11/1/2007 $ 500,000 390,000
6/15/2008 $ 1,650,000 1,212,750
Sr Notes,12.000%, 8/15/2007 $ 250,000 285,000
Sr Notes(e), 10.625%, 11/1/2008 $ 400,000 451,000
Netia Holdings BV, Gtd Sr Discount Step-Up Notes, Series B, Zero Coupon(c)
11/1/2007 $ 350,000 218,750
NEXTLINK Communications
Sr Discount Step-Up Notes, Zero Coupon(c)
4/15/2008 $ 1,000,000 595,000
6/1/2009(e) $ 400,000 234,000
Sr Notes
10.750%, 11/15/2008 $ 500,000 511,250
9.625%, 10/1/2007 $ 250,000 243,125
NEXTLINK Communications LLC/NEXTLINK Capital, Sr Notes, 12.500%
4/15/2006 $ 750,000 798,750
RCN Corp, Sr Discount Step-Up Notes, Series B, Zero Coupon(c), 2/15/2008 $ 1,000,000 630,000
US WEST Communications, Notes, 5.650%, 11/1/2004 $ 250,000 238,506
==================================================================================================================================
9,201,756
TOTAL FIXED INCOME SECURITIES (Amortized Cost $45,001,717) 42,876,435
===================================================================================================================================
1.48 COMMON STOCKS & WARRANTS
1.47 COMPUTER RELATED
Rhythms NetConnections Warrants(a)(e)(Exp 2008) 4,000 666,876
WAM!NET Warrants(a)(e) (Exp 2005) 900 20,475
===================================================================================================================================
687,351
0.00 TELECOMMUNICATIONS -- LONG DISTANCE
STARTEC Global Communications Warrants(a)(e)(Exp 2008) 150 150
===================================================================================================================================
0.01 TELEPHONE
Intermedia Communications 142 4,260
===================================================================================================================================
TOTAL COMMON STOCKS & WARRANTS (Cost $3,318) 691,761
===================================================================================================================================
4.82 PREFERRED STOCKS
0.71 PUBLISHING
PRIMEDIA Inc, Exchangeable Pfd, Series H, 8.625% 3,500 332,937
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.90 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
Nextel Communications, Exchangeable Pfd(f), Series E, 11.125% 422 $ 422,000
===================================================================================================================================
2.49 TELECOMMUNICATIONS -- LONG DISTANCE
Global Crossing Holdings LTD, Sr Exchangeable Pfd(f), 10.500% 11,000 1,166,000
===================================================================================================================================
0.72 TELEPHONE
Intermedia Communications
Conv Jr Pfd, Series F, 7.000% 6,500 151,125
Pfd(f), Series B, 13.500% 187 183,260
334,385
===================================================================================================================================
TOTAL PREFERRED STOCKS (Cost $2,190,614) 2,255,322
===================================================================================================================================
2.08 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 6/30/1999 due 7/1/1999
at 4.750%, repurchased at $976,129 (Collateralized by US Treasury
Notes, due 2/28/2002
at 6.250%, value $1,020,352) (Cost $976,000) $ 976,000 976,000
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $48,171,649)
(Cost for Income Tax Purposes $48,173,059) $ 46,799,518
===================================================================================================================================
Realty Fund
100.00 COMMON STOCKS
1.76 LODGING -- HOTELS
Host Marriott 787 $ 9,346
Interstate Hotels(a) 33 136
===================================================================================================================================
9,482
92.90 REAL ESTATE INVESTMENT TRUST
Apartment Investment & Management Class A Shrs 500 21,375
Arden Realty 450 11,081
Avalonbay Communities 600 22,200
Boston Properties 600 21,525
CarrAmerica Realty 700 17,500
Duke Realty Investments 800 18,050
Equity Office Properties Trust SBI 1,000 25,625
Equity Residential Properties SBI 700 31,544
First Industrial Realty Trust 300 8,231
General Growth Properties 500 17,750
Highwoods Properties 500 13,719
Innkeepers USA Trust 1,000 10,000
Kilroy Realty 325 7,902
Kimco Realty 500 19,562
Liberty Property Trust SBI 400 9,950
Mack-Cali Realty 500 15,469
Prentiss Properties Trust 700 16,450
ProLogis Trust 1,000 20,250
Public Storage 1,000 28,000
Reckson Associates Realty 500 11,750
SL Green Realty 1,000 20,438
Simon Property Group 600 15,225
Spieker Properties 500 19,437
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Starwood Hotels & Resorts SBI 1,300 $ 39,731
Sun Communities 500 17,750
Sunstone Hotel Investors 2,500 21,250
Vornado Realty Trust SBI 500 17,656
===================================================================================================================================
499,420
5.34 REAL ESTATE RELATED
Trammell Crow(a) 500 8,219
TrizecHahn 1,000 20,375
Vornado Operating(a) 15 120
===================================================================================================================================
28,714
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $537,027)
(Cost for Income Tax Purposes $547,923) $ 537,616
===================================================================================================================================
Small Company Growth Fund
100.00 COMMON STOCKS
2.21 AEROSPACE & DEFENSE
Aeroflex Inc(a) 970 $ 19,157
Alliant Techsystems(a) 100 8,650
Moog Inc Class A Shrs(a) 385 13,234
===================================================================================================================================
41,041
0.67 AIR FREIGHT
Eagle USA Airfreight(a) 295 12,519
===================================================================================================================================
1.74 AUTO PARTS
CSK Auto(a) 450 12,150
O'Reilly Automotive(a) 400 20,150
===================================================================================================================================
32,300
2.19 BANKS
City National 390 14,601
Hudson United Bancorp 400 12,250
US Trust 150 13,875
===================================================================================================================================
40,726
1.07 BROADCASTING
Citadel Communications(a) 550 19,903
===================================================================================================================================
0.82 BUILDING MATERIALS
Elcor Corp 200 8,737
NCI Building Systems(a) 300 6,413
===================================================================================================================================
15,150
8.02 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Advanced Fibre Communications(a) 700 10,937
ANTEC Corp(a) 700 22,444
Digital Microwave(a) 1,100 14,025
Excel Switching(a) 600 17,962
Gilat Satellite Networks Ltd(a) 400 21,000
Melita International(a) 800 10,800
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Power Integrations(a) 190 $ 13,894
Powerwave Technologies(a) 500 16,125
REMEC Inc(a) 650 10,481
Terayon Communication Systems(a) 200 11,175
===================================================================================================================================
148,843
14.85 COMPUTER RELATED
Advantage Learning Systems(a) 500 11,062
Business Objects SA Sponsored ADR Representing Ord Shrs(a) 525 19,163
Electronics for Imaging(a) 300 15,412
Entrust Technologies(a) 600 19,950
Genesys Telecommunications Laboratories(a) 1,050 26,250
InfoSpace.com Inc(a) 200 9,400
Kronos Inc(a) 310 14,105
Legato Systems(a) 250 14,438
Mercury Interactive(a) 540 19,103
Metro Information Services(a) 500 8,313
Netopia Inc(a) 400 9,100
OneMain.com Inc(a) 450 10,631
PSINet Inc(a) 200 8,750
Peregrine Systems(a) 650 16,697
Research in Motion Ltd(a) 500 10,125
Rhythms NetConnections(a) 100 5,838
Towne Services(a) 1,100 8,663
USWeb Corp(a) 290 6,434
Verity Inc(a) 200 10,838
Visual Networks(a) 400 12,800
WebTrends Corp(a) 400 18,450
===================================================================================================================================
275,522
0.53 DISTRIBUTION
Insight Enterprises(a) 400 9,900
===================================================================================================================================
1.96 ELECTRICAL EQUIPMENT
DII Group(a) 500 18,656
Flextronics International Ltd(a) 320 17,760
===================================================================================================================================
36,416
1.97 ELECTRONICS
Anaren Microwave(a) 700 14,612
LeCroy Corp(a) 700 16,581
Mettler-Toledo International(a) 215 5,335
===================================================================================================================================
36,528
7.85 ELECTRONICS -- SEMICONDUCTOR
ANADIGICS Inc(a) 500 18,500
Applied Micro Circuits(a) 150 12,337
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Cree Research(a) 100 $ 7,694
Cymer Inc(a) 900 22,500
Galileo Technology Ltd(a) 500 22,656
Maker Communications(a) 300 9,300
QLogic Corp(a) 100 13,200
TranSwitch Corp(a) 300 14,213
Unitrode Corp(a) 880 25,245
===================================================================================================================================
145,645
0.78 ENTERTAINMENT
SFX Entertainment Class A Shrs(a) 225 14,400
===================================================================================================================================
3.32 EQUIPMENT -- SEMICONDUCTOR
American Xtal Technology(a) 850 20,241
Brooks Automation(a) 800 21,650
Photronics Inc(a) 800 19,600
===================================================================================================================================
61,491
0.74 FINANCIAL
HealthCare Financial Partners(a) 400 13,700
===================================================================================================================================
0.90 FOODS
Suiza Foods(a) 400 16,750
===================================================================================================================================
0.95 GAMING
Harrah's Entertainment(a) 800 17,600
===================================================================================================================================
4.36 HEALTH CARE DRUGS -- PHARMACEUTICALS
Accredo Health(a) 300 9,825
Alkermes Inc(a) 400 9,250
ChiRex Inc(a) 750 24,094
Priority Healthcare Class B Shrs(a) 600 20,700
Roberts Pharmaceutical(a) 700 16,975
===================================================================================================================================
80,844
3.34 HEALTH CARE RELATED
Laser Vision Centers(a) 100 6,300
MedQuist Inc(a) 300 13,125
Pharmaceutical Product Development(a) 400 10,950
Province Healthcare(a) 750 14,625
ResMed Inc(a) 130 4,314
Sunrise Assisted Living(a) 365 12,729
===================================================================================================================================
62,043
0.98 INSURANCE
HCC Insurance Holdings 800 18,150
===================================================================================================================================
1.68 INVESTMENT COMPANIES
Affiliated Managers Group(a) 650 19,622
National Discount Brokers Group(a) 200 11,600
31,222
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.06 LEISURE TIME
Action Performance(a) 280 $ 9,240
Intrawest Corp 675 10,336
===================================================================================================================================
19,576
0.49 MANUFACTURING
Pentair Inc 200 9,150
===================================================================================================================================
6.98 OIL & GAS RELATED
Basin Exploration(a) 500 10,031
Evergreen Resources(a) 450 11,334
Global Marine(a) 900 13,894
Louis Dreyfus Natural Gas(a) 900 19,406
Nabors Industries(a) 900 21,994
Newfield Exploration(a) 600 17,063
Precision Drilling(a) 600 11,438
Unit Corp(a) 3,000 24,375
===================================================================================================================================
129,535
0.61 PERSONAL CARE
Playtex Products(a) 725 11,283
===================================================================================================================================
0.86 PUBLISHING
Big Flower Holdings(a) 500 15,937
===================================================================================================================================
0.96 RESTAURANTS
Papa John's International(a) 400 17,875
===================================================================================================================================
7.82 RETAIL
American Eagle Outfitters(a) 300 13,650
Ames Department Stores(a) 200 9,125
Children's Place(a) 400 16,200
Cost Plus(a) 375 17,062
Footstar Inc(a) 300 11,156
InterTAN Inc(a) 900 18,450
Men's Wearhouse(a) 712 18,156
Tuesday Morning(a) 700 17,850
Wild Oats Markets(a) 775 23,516
===================================================================================================================================
145,165
0.57 SAVINGS & LOAN
FirstFed Financial(a) 550 10,587
===================================================================================================================================
14.74 SERVICES
ACNielsen Corp(a) 425 12,856
AHL Services(a) 600 14,962
Corporate Executive Board(a) 300 10,669
Critical Path(a) 130 7,191
Harte-Hanks Inc 700 18,987
Henry (Jack) & Associates 195 7,654
INSpire Insurance Solutions(a) 800 11,600
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Integrated Electrical Services(a) 525 $ 8,466
InterVoice Inc(a) 700 10,106
IntraNet Solutions(a) 800 6,750
Media Metrix(a) 100 5,325
Metzler Group(a) 290 8,011
NCO Group(a) 442 16,796
NetGravity Inc(a) 610 13,878
Pegasus Systems(a) 200 7,488
ProBusiness Services(a) 515 18,476
Profit Recovery Group International(a) 265 12,538
PROVANT Inc(a) 600 9,338
Rental Service(a) 760 21,755
Safeguard Scientifics(a) 50 3,100
Sykes Enterprises(a) 600 20,025
Sylvan Learning Systems(a) 385 10,467
TSI International Software Ltd(a) 600 17,025
===================================================================================================================================
273,463
0.94 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
Proxim Inc(a) 300 17,400
===================================================================================================================================
1.83 TELECOMMUNICATIONS -- LONG DISTANCE
Dycom Industries(a) 285 15,960
Viatel Inc(a) 320 17,960
===================================================================================================================================
33,920
0.78 TELEPHONE
Inet Technologies(a) 600 14,400
===================================================================================================================================
0.75 TEXTILE -- APPAREL MANUFACTURING
Quiksilver Inc(a) 535 13,943
===================================================================================================================================
0.68 TEXTILE -- HOME FURNISHINGS
Linens 'n Things(a) 290 12,688
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $1,526,913)(b) $ 1,855,615
===================================================================================================================================
Technology Fund
95.10 COMMON STOCKS
0.86 AUTOMOBILES
General Motors Class H Shrs(a) 500 $ 28,125
===================================================================================================================================
14.18 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
General Instrument(a) 800 34,000
Lucent Technologies 825 55,636
Motorola Inc 400 37,900
Nokia Corp Sponsored ADR Representing Ord Shrs 900 82,406
Nortel Networks 600 52,088
Powerwave Technologies(a) 1,200 38,700
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
RF Micro Devices(a) 700 $ 52,237
Scientific-Atlanta Inc 900 32,400
Tellabs Inc(a) 1,000 67,563
Tut Systems(a) 200 9,787
===================================================================================================================================
462,717
15.56 COMPUTER SOFTWARE & SERVICE
BroadVision Inc(a) 200 14,750
CBT Group PLC Sponsored ADR Representing Ord Shrs(a) 1,800 29,700
Clarify Inc(a) 1,200 49,500
Compuware Corp(a) 1,900 60,444
Edwards (J D) & Co(a) 1,000 18,500
Exodus Communications(a) 100 11,994
Inktomi Corp(a) 300 39,169
Legato Systems(a) 800 46,200
Microsoft Corp(a) 900 81,169
New Era of Networks(a) 900 39,544
Softbank Corp 100 20,249
Software.com Inc(a) 500 11,594
Verio Inc(a) 600 41,700
Verity Inc(a) 800 43,350
===================================================================================================================================
507,863
0.99 COMPUTER SYSTEMS
Apple Computer(a) 700 32,419
===================================================================================================================================
3.27 COMPUTERS -- HARDWARE
International Business Machines 400 51,700
Sun Microsystems(a) 800 55,100
===================================================================================================================================
106,800
6.97 COMPUTERS -- NETWORKING
Cisco Systems(a) 1,200 77,400
Concentric Network(a) 500 19,875
Novell Inc(a) 2,300 60,950
PSINet Inc(a) 300 13,125
Rhythms NetConnections(a) 200 11,675
Whittman-Hart Inc(a) 1,400 44,450
===================================================================================================================================
227,475
1.01 COMPUTERS -- PERIPHERALS
EMC Corp(a) 600 33,000
===================================================================================================================================
5.25 ELECTRICAL EQUIPMENT
Celestica Inc(a) 800 34,650
Flextronics International(a) 700 38,850
Sanmina Corp(a) 500 37,938
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Solectron Corp(a) 900 $ 60,019
===================================================================================================================================
171,457
1.02 ELECTRONICS -- INSTRUMENTS
Uniphase Corp(a) 200 33,200
===================================================================================================================================
15.66 ELECTRONICS -- SEMICONDUCTOR
Altera Corp(a) 1,200 44,175
Applied Micro Circuits(a) 200 16,450
Atmel Corp(a) 2,400 62,850
Conexant Systems(a) 1,100 63,869
Genesis Microchip(a) 500 11,813
LSI Logic(a) 1,000 46,125
Linear Technology(a) 500 33,625
Maxim Integrated Products(a) 1,000 66,500
Microchip Technology(a) 900 42,637
National Semiconductor(a) 700 17,719
PMC-Sierra Inc(a) 200 11,787
QLogic Corp(a) 300 39,600
Vitesse Semiconductor(a) 800 53,950
===================================================================================================================================
511,100
6.89 EQUIPMENT -- SEMICONDUCTOR
ASM Lithography Holding NV New York Registered Shrs(a) 1,200 71,250
Applied Materials(a) 600 44,325
KLA-Tencor Corp(a) 200 12,975
Novellus Systems(a) 500 34,125
Taiwan Semiconductor Manufacturing Ltd Sponsored ADR Representing 5 Ord Shrs(a) 1,200 40,800
Teradyne Inc(a) 300 21,525
===================================================================================================================================
225,000
2.16 OIL & GAS RELATED
Baker Hughes 900 30,150
Veritas DGC(a) 2,200 40,287
===================================================================================================================================
70,437
2.40 PHOTOGRAPHY & IMAGING
Gemstar International Group Ltd(a) 1,200 78,300
===================================================================================================================================
12.76 SERVICES
America Online(a) 800 88,400
BISYS Group(a) 900 52,650
CMGI Inc(a) 500 57,031
CIBER Inc(a) 1,100 21,037
Fiserv Inc(a) 1,500 46,969
Safeguard Scientifics(a) 400 24,800
Sapient Corp(a) 300 16,987
TSI International Software Ltd(a) 1,600 45,400
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
VeriSign Inc(a) 400 $ 34,500
VERITAS Software(a) 300 28,481
===================================================================================================================================
416,255
3.26 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
Nextel Communications Class A(a) 800 40,150
Proxim Inc(a) 800 46,400
Vodafone Airtouch PLC Sponsored ADR Representing 10 Ord Shrs 100 19,700
===================================================================================================================================
106,250
2.86 TELECOMMUNICATIONS -- LONG DISTANCE
MCI WorldCom(a) 500 43,125
Qwest Communications International(a) 500 16,531
Viatel Inc(a) 600 33,675
93,331
===================================================================================================================================
TOTAL COMMON STOCKS ($2,349,945) 3,103,729
===================================================================================================================================
0.21 PREFERRED STOCKS
0.21 COMPUTER SOFTWARE & SERVICE
SAP AG Sponsored ADR Representing 1/2 Pfd Shr (Cost $7,187) 200 6,925
===================================================================================================================================
4.69 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 6/30/1999 due 7/1/1999
at 4.750%, repurchased at $153,020 (Collateralized by US Treasury
Bonds, due 4/15/2029
at 3.875%, value $160,801) (Cost $153,000) $ 153,000 153,000
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $2,510,132)
(Cost for Income Tax Purposes $2,512,829) $ 3,263,654
===================================================================================================================================
Total Return Fund
75.95 COMMON STOCKS
2.71 AEROSPACE & DEFENSE
Boeing Co 4,500 $ 198,844
Lockheed Martin 8,000 298,000
Raytheon Co Class B Shrs 5,000 351,875
===================================================================================================================================
848,719
0.70 AIRLINES
Southwest Airlines 7,000 217,875
===================================================================================================================================
1.61 AUTO PARTS
Cooper Tire & Rubber 8,000 189,000
Genuine Parts 9,000 315,000
===================================================================================================================================
504,000
1.08 AUTOMOBILES
Ford Motor 6,000 338,625
===================================================================================================================================
4.95 BANKS
Bank One 6,000 357,375
Comerica Inc 2,000 118,875
First Union 6,000 282,000
National City 3,960 259,380
State Street 4,200 358,575
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Wachovia Corp 2,000 $ 171,125
===================================================================================================================================
1,547,330
1.46 BEVERAGES
Anheuser-Busch Cos 4,000 283,750
PepsiCo Inc 4,500 174,094
===================================================================================================================================
457,844
1.97 BUILDING MATERIALS
Lowe's Cos 6,000 340,125
Sherwin-Williams Co 10,000 277,500
===================================================================================================================================
617,625
2.84 CHEMICALS
Dow Chemical 2,000 253,750
Great Lakes Chemical 7,000 322,437
Nalco Chemical 6,000 311,250
===================================================================================================================================
887,437
3.60 COMPUTER RELATED
Compaq Computer 12,000 284,250
Computer Associates International 8,000 440,000
Hewlett-Packard Co 4,000 402,000
===================================================================================================================================
1,126,250
3.12 CONGLOMERATES
Fortune Brands 5,000 206,875
Hanson PLC Sponsored ADR Representing 5 Ord Shrs 8,000 355,000
National Service Industries 6,000 216,000
Unilever NV New York Registered Shrs 2,857 199,276
===================================================================================================================================
977,151
0.99 DISTRIBUTION
Supervalu Inc 12,000 308,250
===================================================================================================================================
3.62 ELECTRIC UTILITIES
CINergy Corp 3,700 118,400
Edison International 5,000 133,750
Entergy Corp 10,000 312,500
GPU Inc 8,000 337,500
Unicom Corp 6,000 231,375
===================================================================================================================================
1,133,525
3.53 ELECTRICAL EQUIPMENT
General Electric 2,600 293,800
Grainger (W W) Inc 6,000 322,875
Rockwell International 8,000 486,000
===================================================================================================================================
1,102,675
1.16 FOODS
Archer-Daniels-Midland Co 12,000 185,250
Heinz (H J) Co 3,550 177,944
===================================================================================================================================
363,194
0.93 HARDWARE & TOOLS
Snap-On Inc 8,000 289,500
===================================================================================================================================
3.02 HEALTH CARE DRUGS -- PHARMACEUTICALS
Abbott Laboratories 5,000 227,500
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
American Home Products 3,600 $ 207,000
Bristol-Myers Squibb 4,000 281,750
Lilly (Eli) & Co 3,200 229,200
===================================================================================================================================
945,450
1.09 HEALTH CARE RELATED
Columbia/HCA Healthcare 15,000 342,187
===================================================================================================================================
1.76 HOUSEHOLD FURNITURE & APPLIANCES
Shaw Industries(a) 11,000 181,500
Whirlpool Corp 5,000 370,000
===================================================================================================================================
551,500
5.53 INSURANCE
Lincoln National 6,000 313,875
Loews Corp 4,000 316,500
MGIC Investment 8,000 389,000
Ohio Casualty 8,000 289,000
Old Republic International 9,000 155,813
SAFECO Corp 6,000 264,750
===================================================================================================================================
1,728,938
0.87 INSURANCE BROKERS
Marsh & McLennan 3,600 271,800
===================================================================================================================================
1.03 INVESTMENT COMPANIES
Morgan Stanley Dean Witter & Co 3,135 321,337
===================================================================================================================================
1.21 IRON & STEEL
Nucor Corp 8,000 379,500
===================================================================================================================================
1.91 MACHINERY
Caterpillar Inc 6,000 360,000
Deere & Co 6,000 237,750
===================================================================================================================================
597,750
4.02 MANUFACTURING
Federal Signal 10,000 211,875
Illinois Tool Works 5,000 410,000
Minnesota Mining & Manufacturing 2,000 173,875
Precision Castparts 7,000 297,500
Textron Inc 2,000 164,625
===================================================================================================================================
1,257,875
0.79 METALS MINING
Phelps Dodge 4,000 247,750
===================================================================================================================================
1.20 OFFICE EQUIPMENT & SUPPLIES
Ikon Office Solutions 25,000 375,000
===================================================================================================================================
3.63 OIL & GAS RELATED
Exxon Corp 3,500 269,937
Norsk Hydro A/SA Sponsored ADR Representing Ord Shrs 7,000 267,750
Repsol SA Sponsored ADR Representing Ord Shrs 20,000 406,250
Royal Dutch Petroleum New York Registry 1.25 Gldr Shrs 3,200 192,800
===================================================================================================================================
1,136,737
0.56 PAPER & FOREST PRODUCTS
Westvaco Corp 6,000 174,000
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.87 POLLUTION CONTROL
Waste Management 5,075 $ 272,781
===================================================================================================================================
0.64 PUBLISHING
Gannett Co 2,800 199,850
===================================================================================================================================
1.16 RAILROADS
CSX Corp 8,000 362,500
===================================================================================================================================
1.06 RESTAURANTS
McDonald's Corp 8,000 330,500
===================================================================================================================================
2.87 RETAIL
Dillard's Inc Class A Shrs 10,000 351,250
Penney (J C) Co 7,000 339,938
Toys "R" Us(a) 10,000 206,875
===================================================================================================================================
898,063
2.73 SERVICES
Deluxe Corp 7,000 272,562
Dun & Bradstreet 6,800 240,975
Electronic Data Systems 6,000 339,375
===================================================================================================================================
852,912
1.92 TELEPHONE
Bell Atlantic 5,000 326,875
Telefonos de Mexico SA de CV Sponsored ADR Representing 20 Series L Shrs 3,400 274,763
===================================================================================================================================
601,638
2.91 TEXTILE -- APPAREL MANUFACTURING
Liz Claiborne 8,000 292,000
Unifi Inc(a) 15,000 318,750
VF Corp 7,000 299,250
===================================================================================================================================
910,000
0.90 TOBACCO
Philip Morris 7,000 281,313
===================================================================================================================================
TOTAL COMMON STOCKS (Cost $17,424,454) 23,759,381
===================================================================================================================================
23.25 FIXED INCOME SECURITIES
3.01 US Government Obligations
US Treasury Bonds
8.125%, 8/15/2019 $ 100,000 120,500
7.625%, 2/15/2025 $ 200,000 234,937
7.250%, 8/15/2022 $ 250,000 279,297
US Treasury Notes
7.500%, 11/15/2001 $ 100,000 104,156
6.375%, 8/15/2002 $ 200,000 203,813
===================================================================================================================================
TOTAL US GOVERNMENT OBLIGATIONS (Amortized Cost $928,431) 942,703
===================================================================================================================================
6.95 US Government Agency Obligations
Fannie Mae
Benchmark Notes, 5.125%, 2/13/2004 $ 208,000 199,301
Gtd Mortgage Pass-Through Certificates
8.500%, 3/1/2010 $ 53,580 55,662
7.000%, 12/1/2027 $ 143,568 142,283
6.500%, 5/1/2026 $ 104,824 101,929
6.000%, 5/1/2009 $ 95,609 93,212
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Federal Farm Credit Bank, Medium-Term Notes, 6.150%, 9/1/2000 $ 500,000 $ 502,355
Federal Home Loan Bank, 5.500%, 7/14/2000 $ 500,000 499,251
Freddie Mac, Gold, Participation Certificates
8.000%, 10/1/2010 $ 29,590 30,515
6.500%, 7/1/2001 $ 40,459 40,650
6.500%, 1/1/2029 $ 242,460 234,745
Government National Mortgage Association I
Pass-Through Certificates
7.500%, 3/15/2026 $ 46,469 47,054
7.000%, 4/15/2028 $ 230,138 227,468
===================================================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS (Amortized Cost $2,188,033) 2,174,425
===================================================================================================================================
1.27 Asset-Backed Securities
1.27 CONSUMER FINANCE
Chase Manhattan Credit Card Master Trust, Series 1996-3, Class A
7.040%, 2/15/2005 $ 200,000 203,532
Discover Card Master Trust I, Series 1998-7, Class A, 5.600%, 5/16/2006 $ 200,000 193,688
===================================================================================================================================
TOTAL ASSET-BACKED SECURITIES (Amortized Cost $408,990) 397,220
===================================================================================================================================
12.02 Corporate Bonds
1.21 AUTOMOBILES
Ford Motor, Bonds, 6.500%, 8/1/2018 $ 200,000 183,062
General Motors Acceptance, Global Bonds, 5.500%, 1/14/2002 $ 200,000 196,094
===================================================================================================================================
379,156
2.20 BANKS
ABN Amro Bank NV, Sub Notes, 7.550%, 6/28/2006 $ 200,000 203,975
NationsBank Corp, Sub Notes, 6.500%, 3/15/2006 $ 100,000 97,139
SunTrust Banks, Sr Notes, 6.250%, 6/1/2008 $ 300,000 286,318
Wachovia Bank, Medium-Term Notes, Series 3, 7.000%, 10/17/2008 $ 100,000 99,568
===================================================================================================================================
687,000
0.79 BUILDING MATERIALS
Sherwin-Williams Co, Notes, 6.850%, 2/1/2007 $ 250,000 247,960
===================================================================================================================================
0.37 ELECTRIC UTILITIES
National Rural Utilities, Secured Collateral Trust, 6.550%, 11/1/2018 $ 125,000 116,627
===================================================================================================================================
1.25 FINANCIAL
Associates Corp of North America, Sr Notes, 6.375%, 10/15/2002 $ 200,000 199,144
CIT Group, Notes, 5.625%, 10/15/2003 $ 200,000 192,446
===================================================================================================================================
391,590
0.48 FOODS
Campbell Soup, Notes, 6.150%, 12/1/2002 $ 150,000 149,615
===================================================================================================================================
0.60 HEALTH CARE RELATED
Guidant Corp, Notes, 6.150%, 2/15/2006 $ 200,000 188,266
===================================================================================================================================
0.92 HOUSEHOLD PRODUCTS
Procter & Gamble, Notes, 5.250%, 9/15/2003 $ 300,000 288,750
===================================================================================================================================
0.94 INSURANCE
Travelers Property Casualty, Sr Notes, 6.750%, 11/15/2006 $ 300,000 293,348
===================================================================================================================================
0.61 LEISURE TIME
Carnival Corp, Notes, 6.150%, 4/15/2008 $ 200,000 188,648
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.61 MACHINERY
Cooper Industries, Medium-Term Notes, Series 3, 6.375%, 5/8/2008 $ 200,000 $ 191,383
===================================================================================================================================
0.60 PERSONAL CARE
Colgate-Palmolive Co, Medium-Term Notes, Series C, 5.580%, 11/6/2008 $ 200,000 186,134
===================================================================================================================================
0.86 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp, Notes, 6.500%, 3/15/2029 $ 300,000 269,816
===================================================================================================================================
0.58 TELEPHONE
GTE Northwest, Deb, 5.550%, 10/15/2008 $ 200,000 181,917
===================================================================================================================================
TOTAL CORPORATE BONDS (Amortized Cost $3,965,202) 3,760,210
===================================================================================================================================
TOTAL FIXED INCOME SECURITIES (Amortized Cost $7,490,656) 7,274,558
===================================================================================================================================
0.80 SHORT-TERM INVESTMENTS
0.48 US GOVERNMENT OBLIGATIONS
US Treasury Notes, 6.375%, 7/15/1999 (Amortized Cost $150,010) $ 150,000 150,141
===================================================================================================================================
0.32 CORPORATE BONDS
0.32 BEVERAGES
PepsiCo Inc, Medium-Term Notes, 5.875%, 6/1/2000 (Amortized Cost $99,106) $ 100,000 99,814
===================================================================================================================================
TOTAL SHORT-TERM INVESTMENTS (Amortized Cost $249,116) 249,955
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $25,164,226)(b) $ 31,283,894
===================================================================================================================================
Utilities Fund
85.49 COMMON STOCKS
2.26 MACHINERY
Mannesmann AG 1,300 $ 193,998
===================================================================================================================================
2.24 SERVICES
Convergys Corp(a) 5,400 103,950
Metzler Group(a) 3,200 88,400
===================================================================================================================================
192,350
11.42 TELECOMMUNICATIONS
AT&T Corp 3,000 167,437
MCI WorldCom(a) 2,430 209,587
Qwest Communications International(a) 2,330 77,036
Sprint Corp-FON Group 3,800 200,688
Vodafone Airtouch PLC Sponsored ADR Representing 10 Ord Shrs 1,650 325,050
===================================================================================================================================
979,798
69.57 Utilities
22.35 ELECTRIC
Alliant Energy 3,370 95,624
Ameren Corp 800 30,700
CMS Energy 2,500 104,687
Carolina Power & Light 800 34,250
Consolidated Edison 2,700 122,175
DTE Energy 2,500 100,000
Duke Energy 2,226 121,039
Edison International 3,800 101,650
FPL Group 1,600 87,400
Florida Progress 1,100 45,444
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
GPU Inc 900 $ 37,969
Montana Power 2,000 141,000
New Century Energies 2,800 108,675
NiSource Inc 2,600 67,112
Northern States Power 2,900 70,144
PG&E Corp 2,300 74,750
PP&L Resources 1,642 50,492
PacifiCorp 2,200 40,425
Pinnacle West Capital 2,300 92,575
Reliant Energy 3,600 99,450
SCANA Corp 2,000 46,750
TNP Enterprises 1,500 54,375
Texas Utilities 2,000 82,500
Unicom Corp 2,800 107,975
===================================================================================================================================
1,917,161
7.94 NATURAL GAS
Coastal Corp 2,500 100,000
Columbia Energy Group 1,400 87,763
Enron Corp 2,100 171,675
New Jersey Resources 1,500 56,156
ONEOK Inc 1,350 42,863
TransCanada PipeLines Ltd 3,400 47,600
Williams Cos 4,100 174,506
===================================================================================================================================
680,563
37.60 TELEPHONE
AT&T Canada Class B Depository Receipts(a) 6,000 384,375
ALLTEL Corp 2,200 157,300
Ameritech Corp 3,640 267,540
Bell Atlantic 3,834 250,648
BellSouth Corp 4,540 212,812
Century Telephone Enterprises 5,400 214,650
Cincinnati Bell 5,400 134,662
COLT Telecom Group PLC Sponsored ADR Representing 4 Ord Shrs(a) 3,800 328,225
Frontier Corp 2,800 165,200
GTE Corp 2,650 200,737
Intermedia Communications(a) 8,000 240,000
McLeodUSA Inc(a) 1,200 66,000
SBC Communications 4,900 284,200
Telefonica de Espana SA Sponsored ADR Representing 3 Ord Shrs 1,133 166,725
US WEST 2,600 152,750
===================================================================================================================================
3,225,824
1.68 WATER
Azurix Corp(a) 7,200 144,000
===================================================================================================================================
TOTAL UTILITIES 5,967,548
===================================================================================================================================
TOTAL COMMON STOCKS (Cost $4,860,567) 7,333,694
===================================================================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
14.51 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 6/30/1999 due 7/1/1999
at 4.750%, repurchased at $1,245,164 (Collateralized by US Treasury
Notes due 2/28/2002
at 6.250%, value $1,305,221)(Cost $1,245,000) $ 1,245,000 $ 1,245,000
===================================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $6,105,567)(b) $ 8,578,694
===================================================================================================================================
<FN>
(a) Security is non-income producing.
(b) Also represents cost for income tax purposes.
(c) Step-up bonds are obligations which increase the interest payment rate at a specified point in time. Rate shown reflects current
rate which may step up at a future date.
(d) Security is a defaulted security with respect to cumulative interest payments of $12,500 at June 30, 1999.
(e) Securities are aquired pursuant to Rule 144A. The Fund deems such securities to be "liquid" because an institutional market
exists.
(f) Security is a payment-in-kind (PIK) security. PIK securities may make interest payments in additional securities.
</FN>
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
INVESCO VARIABLE INVESTMENT FUNDS, INC.
JUNE 30, 1999
UNAUDITED
<CAPTION>
BLUE CHIP EQUITY HEALTH
GROWTH DYNAMICS INCOME SCIENCES
FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 284,651 $ 217,297 $ 60,968,311 $ 2,095,063
====================================================================================================================================
At Value(a) $ 395,326 $ 314,502 $ 75,755,081 $ 2,352,829
Cash 27,229 75,156 24,040 186
Receivables:
Investment Securities Sold 0 0 511,628 0
Fund Shares Sold 0 0 111,458 41,155
Dividends and Interest 218 258 185,333 1,993
Prepaid Expenses and Other Assets 23,930 22,990 2,537 25,020
====================================================================================================================================
TOTAL ASSETS 446,703 412,906 76,590,077 2,421,183
====================================================================================================================================
LIABILITIES
Payables:
Investment Securities Purchased 0 0 2,639,535 81,968
Fund Shares Repurchased 0 0 165,441 0
Accrued Expenses and Other Payables 3,793 2,832 11,018 4,078
====================================================================================================================================
TOTAL LIABILITIES 3,793 2,832 2,815,994 86,046
====================================================================================================================================
NET ASSETS AT VALUE $ 442,910 $ 410,074 $ 73,774,083 $ 2,335,137
====================================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 298,790 $ 290,074 $ 54,539,258 $ 2,084,036
Accumulated Undistributed Net Investment
Income (Loss) (1,407) (1,211) 494,999 3,276
Accumulated Undistributed Net Realized
Gain (Loss) on Investment Securities
and Foreign Currency Transactions 34,852 24,006 3,953,056 (9,933)
Net Appreciation of Investment Securities
and Foreign Currency Transactions 110,675 97,205 14,786,770 257,758
====================================================================================================================================
NET ASSETS AT VALUE $ 442,910 $ 410,074 $ 73,774,083 $ 2,335,137
====================================================================================================================================
Shares Outstanding 28,311 28,055 3,484,092 159,344
Net Asset Value, Offering and Redemption
Price per Share $ 15.64 $ 14.62 $ 21.17 $ 14.65
====================================================================================================================================
<FN>
(a) Investment securities at cost and value at June 30, 1999 include repurchase agreements of $6,115,000 and $277,000 for Equity
Income and Health Sciences Funds, respectively.
(b) The Fund has one billion authorized shares of common stock, par value of $0.01 per share. Of such shares, 100 million have been
allocated to each individual Fund.
</FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
JUNE 30, 1999
UNAUDITED
<CAPTION>
SMALL
HIGH COMPANY
YIELD REALTY GROWTH TECHNOLOGY
FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 48,171,649 $ 537,027 $ 1,526,913 $ 2,510,132
===================================================================================================================================
At Value(a) $ 46,799,518 $ 537,616 $ 1,855,615 $ 3,263,654
Cash 3,540 0 68,612 6,042
Receivables:
Investment Securities Sold 0 74,669 0 52,603
Fund Shares Sold 872,119 212 1,958 548,799
Dividends and Interest 760,522 4,246 77 128
Prepaid Expenses and Other Assets 1,784 21,648 31,563 25,208
===================================================================================================================================
TOTAL ASSETS 48,437,483 638,391 1,957,825 3,896,434
===================================================================================================================================
LIABILITIES
Payables:
Custodian 0 31,685 0 0
Investment Securities Purchased 628,141 22,483 52,824 15,778
Fund Shares Repurchased 260,212 0 35,249 244
Accrued Expenses and Other Payables 10,131 2,701 4,016 4,031
===================================================================================================================================
TOTAL LIABILITIES 898,484 56,869 92,089 20,053
===================================================================================================================================
NET ASSETS AT VALUE $ 47,538,999 $ 581,522 $ 1,865,736 $ 3,876,381
===================================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 48,432,629 $ 615,467 $ 1,521,357 $ 2,932,785
Accumulated Undistributed Net Investment
Income (Loss) 2,063,991 16,666 (4,548) (8,824)
Accumulated Undistributed Net Realized
Gain (Loss) on Investment Securities
and Foreign Currency Transactions (1,585,490) (51,200) 20,225 198,898
Net Appreciation (Depreciation) of
Investment Securities and Foreign
Currency Transactions (1,372,131) 589 328,702 753,522
===================================================================================================================================
NET ASSETS AT VALUE $ 47,538,999 $ 581,522 $ 1,865,736 $ 3,876,381
===================================================================================================================================
Shares Outstanding 3,954,981 66,286 143,099 190,255
NET ASSET VALUE, Offering and Redemption
Price per Share $ 12.02 $ 8.77 $ 13.04 $ 20.37
===================================================================================================================================
<FN>
(a) Investment securities at cost and value at June 30, 1999 include repurchase agreements of $976,000 and $153,000 for High Yield
and Technology Funds, respectively.
(b) The Fund has one billion authorized shares of common stock, par value of $0.01 per share. Of such shares, 100 million have been
allocated to each individual Fund.
</FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
JUNE 30, 1999
UNAUDITED
<CAPTION>
TOTAL
RETURN UTILITIES
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 25,164,226 $ 6,105,567
====================================================================================================================================
At Value(a) $ 31,283,894 $ 8,578,694
Cash 0 262
Foreign Currency (Cost $0 and $3,000, respectively) 0 2,997
Receivables:
Investment Securities Sold 958,956 29,700
Fund Shares Sold 39,005 34,869
Dividends and Interest 155,862 11,032
Prepaid Expenses and Other Assets 1,589 18,785
====================================================================================================================================
TOTAL ASSETS 32,439,306 8,676,339
====================================================================================================================================
LIABILITIES
Payables:
Custodian 140,776 0
Fund Shares Repurchased 43,649 17,621
Accrued Expenses and Other Payables 9,906 8,038
====================================================================================================================================
TOTAL LIABILITIES 194,331 25,659
====================================================================================================================================
NET ASSETS AT VALUE $ 32,244,975 $ 8,650,680
====================================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 24,628,804 $ 5,849,243
Accumulated Undistributed Net Investment Income 424,919 51,019
Accumulated Undistributed Net Realized Gain on Investment Securities and
Foreign Currency Transactions 1,071,584 277,299
Net Appreciation of Investment Securities and Foreign Currency Transactions 6,119,668 2,473,119
====================================================================================================================================
NET ASSETS AT VALUE $ 32,244,975 $ 8,650,680
====================================================================================================================================
Shares Outstanding 1,822,946 435,797
NET ASSET VALUE, Offering and Redemption Price per Share $ 17.69 $ 19.85
====================================================================================================================================
<FN>
(a) Investment securities at cost and value at June 30, 1999 include a repurchase agreement of $1,245,000 for Utilities Fund.
(b) The Fund has one billion authorized shares of common stock, par value of $0.01 per share. Of such shares, 100 million have been
allocated to each individual Fund.
</FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
INVESCO VARIABLE INVESTMENT FUNDS, INC.
SIX MONTHS ENDED JUNE 30, 1999
UNAUDITED
<CAPTION>
BLUE CHIP EQUITY HEALTH
GROWTH DYNAMICS INCOME SCIENCES
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 1,492 $ 739 $ 410,987 $ 12,084
Interest 0 0 371,883 6,592
Foreign Taxes Withheld 0 0 (574) (203)
====================================================================================================================================
TOTAL INCOME 1,492 739 782,296 18,473
====================================================================================================================================
EXPENSES
Investment Advisory Fees 1,645 1,016 244,249 9,321
Transfer Agent Fees 2,500 2,500 2,500 2,500
Administrative Fees 5,047 5,038 39,628 8,294
Custodian Fees and Expenses 1,319 412 8,821 3,973
Directors' Fees and Expenses 4,006 4,005 5,026 4,042
Professional Fees and Expenses 7,869 7,866 11,111 8,463
Registration Fees and Expenses 14 14 19 14
Reports to Shareholders 5,014 5,032 29,606 6,131
Other Expenses 196 195 2,791 215
====================================================================================================================================
TOTAL EXPENSES 27,610 26,078 343,751 42,953
Fees and Expenses Absorbed by
Investment Adviser (23,739) (23,718) 0 (24,675)
Fees and Expenses Paid Indirectly (972) (412) (6,459) (2,804)
====================================================================================================================================
NET EXPENSES 2,899 1,948 337,292 15,474
====================================================================================================================================
NET INVESTMENT INCOME (LOSS) (1,407) (1,209) 445,004 2,999
====================================================================================================================================
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 21,564 28,124 3,541,260 5,934
Foreign Currency Transactions 0 0 0 (6,937)
====================================================================================================================================
Total Net Realized Gain (Loss) 21,564 28,124 3,541,260 (1,003)
====================================================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 11,459 37,213 4,740,098 (146,452)
Foreign Currency Transactions 0 0 0 469
====================================================================================================================================
Total Net Appreciation (Depreciation) 11,459 37,213 4,740,098 (145,983)
====================================================================================================================================
NET GAIN (LOSS) ON INVESTMENT
SECURITIES AND FOREIGN CURRENCY
TRANSACTIONS 33,023 65,337 8,281,358 (146,986)
====================================================================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 31,616 $ 64,128 $ 8,726,362 $ (143,987)
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
SIX MONTHS ENDED JUNE 30, 1999
UNAUDITED
<CAPTION>
SMALL
HIGH COMPANY
YIELD REALTY GROWTH TECHNOLOGY
FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 113,110 $ 13,794 $ 650 $ 1,147
Interest 2,178,825 364 3,974 5,997
Foreign Taxes Withheld 0 0 0 (84)
====================================================================================================================================
TOTAL INCOME 2,291,935 14,158 4,624 7,060
====================================================================================================================================
EXPENSES
Investment Advisory Fees 138,240 2,427 5,519 9,596
Transfer Agent Fees 2,500 2,500 2,500 2,500
Administrative Fees 49,637 5,475 6,514 8,391
Custodian Fees and Expenses 7,437 2,573 5,943 5,200
Directors' Fees and Expenses 4,721 2,002 4,015 4,025
Professional Fees and Expenses 10,349 6,372 8,412 8,457
Registration Fees and Expenses 19 14 14 13
Reports to Shareholders 20,541 5,546 11,629 6,206
Other Expenses 6,929 197 198 225
====================================================================================================================================
TOTAL EXPENSES 240,373 27,106 44,744 44,613
Fees and Expenses Absorbed by
Investment Adviser 0 (21,376) (31,277) (24,958)
Fees and Expenses Paid Indirectly (5,460) (2,079) (4,295) (3,774)
====================================================================================================================================
NET EXPENSES 234,913 3,651 9,172 15,881
====================================================================================================================================
NET INVESTMENT INCOME (LOSS) 2,057,022 10,507 (4,548) (8,821)
====================================================================================================================================
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on Investment
Securities (1,215,681) 17,329 62,637 289,923
====================================================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 1,748,118 10,270 178,401 479,287
Foreign Currency Transactions 0 0 0 (29)
====================================================================================================================================
Total Net Appreciation 1,748,118 10,270 178,401 479,258
====================================================================================================================================
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 532,437 27,599 241,038 769,181
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 2,589,459 $ 38,106 $ 236,490 $ 760,360
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
SIX MONTHS ENDED JUNE 30, 1999
UNAUDITED
<CAPTION>
TOTAL
RETURN UTILITIES
FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 270,359 $ 67,625
Interest 338,934 21,698
Foreign Taxes Withheld (7,329) (425)
====================================================================================================================================
TOTAL INCOME 601,964 88,898
====================================================================================================================================
EXPENSES
Investment Advisory Fees 135,114 23,034
Transfer Agent Fees 2,500 2,500
Administrative Fees 23,833 8,221
Custodian Fees and Expenses 4,988 3,059
Directors' Fees and Expenses 4,594 4,115
Professional Fees and Expenses 9,901 8,172
Registration Fees and Expenses 19 19
Reports to Shareholders 20,344 15,053
Other Expenses 3,010 293
TOTAL EXPENSES 204,303 64,466
Fees and Expenses Absorbed by Investment Adviser 0 (18,159)
Fees and Expenses Paid Indirectly (3,578) (2,179)
====================================================================================================================================
NET EXPENSES 200,725 44,128
====================================================================================================================================
NET INVESTMENT INCOME 401,239 44,770
====================================================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 969,352 283,842
Foreign Currency Transactions (174) (1,541)
====================================================================================================================================
Total Net Realized Gain 969,178 282,301
====================================================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 1,032,656 551,439
Foreign Currency Transactions 0 (16,678)
====================================================================================================================================
Total Net Appreciation 1,032,656 534,761
====================================================================================================================================
NET GAIN ON INVESTMENT SECURITIES AND FOREIGN CURRENCY TRANSACTIONS 2,001,834 817,062
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 2,403,073 $ 861,832
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INVESCO VARIABLE INVESTMENT FUNDS, INC.
<CAPTION>
BLUE CHIP GROWTH FUND DYNAMICS FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Loss $ (1,407) $ (224) $ (1,209) $ (1,758)
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 21,564 22,394 28,124 (4,118)
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 11,459 81,686 37,213 55,876
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
OPERATIONS 31,616 103,856 64,128 50,000
====================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (1,109) 0 (587)
In Excess of Net Investment Income 0 (227) 0 0
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (7,300) 0 (3,715)
====================================================================================================================================
TOTAL DISTRIBUTIONS 0 (8,636) 0 (4,302)
====================================================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 41,396 801 38,698 799
Reinvestment of Distributions 0 8,636 0 4,302
====================================================================================================================================
41,396 9,437 38,698 5,101
Amounts Paid for Repurchases of Shares (986) 0 (968) 0
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 40,410 9,437 37,730 5,101
====================================================================================================================================
TOTAL INCREASE IN NET ASSETS 72,026 104,657 101,858 50,799
NET ASSETS
Beginning of Period 370,884 266,227 308,216 257,417
====================================================================================================================================
End of Period $ 442,910 $ 370,884 $ 410,074 $ 308,216
====================================================================================================================================
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income (Loss)
Included in Net Assets at End of Period $ (1,407) $ 0 $ (1,211) $ (2)
-----------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 2,778 61 2,763 74
Shares Issued from Reinvestment of
Distributions 0 634 0 393
====================================================================================================================================
2,778 695 2,763 467
Shares Repurchased (67) 0 (71) 0
====================================================================================================================================
NET INCREASE IN FUND SHARES 2,711 695 2,692 467
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
<CAPTION>
EQUITY INCOME FUND HEALTH SCIENCES FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31
1999 1998 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 445,004 $ 998,166 $ 2,999 $ 4,656
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 3,541,260 1,862,509 (1,003) 63,995
==================================================================================================================================
Change in Net Appreciation (Depreciation) of
Investment Securities and Foreign Currency
Transactions 4,740,098 4,286,624 (145,983) 369,979
==================================================================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS 8,726,362 7,147,299 (143,987) 438,630
==================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (976,679) 0 (4,154)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (2,014,499) 0 (47,939)
In Excess of Net Realized Gain on Investment
Securities and Foreign Currency Transactions 0 0 0 (13,061)
==================================================================================================================================
TOTAL DISTRIBUTIONS 0 (2,991,178) 0 (65,154)
==================================================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 18,547,808 24,505,640 2,317,586 5,323,628
Reinvestment of Distributions 0 2,989,373 0 65,154
==================================================================================================================================
18,547,808 27,495,013 2,317,586 5,388,782
Amounts Paid for Repurchases of Shares (13,845,605) (11,399,085) (2,216,071) (3,807,607)
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 4,702,203 16,095,928 101,515 1,581,175
====================================================================================================================================
TOTAL INCREASE (DECREASE) IN
NET ASSETS 13,428,565 20,252,049 (42,472) 1,954,651
NET ASSETS
Beginning of Period 60,345,518 40,093,469 2,377,609 422,958
====================================================================================================================================
End of Period $ 73,774,083 $ 60,345,518 $ 2,335,137 $ 2,377,609
====================================================================================================================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at End of
Period $ 494,999 $ 49,995 $ 3,276 $ 277
-----------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 943,229 1,350,082 151,742 403,110
Shares Issued from Reinvestment of
Distributions 0 167,472 0 4,472
====================================================================================================================================
943,229 1,517,554 151,742 407,582
Shares Repurchased (702,196) (627,712) (147,880) (290,418)
====================================================================================================================================
NET INCREASE IN FUND SHARES 241,033 889,842 3,862 117,164
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
<CAPTION>
HIGH YIELD FUND REALTY FUND
SIX MONTHS YEAR SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
UNAUDITED UNAUDITED (Note 1)
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 2,057,022 $ 3,373,382 $ 10,507 $ 14,039
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions (1,215,681) 694,287 17,329 (66,609)
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 1,748,118 (3,509,648) 10,270 (9,681)
====================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS 2,589,459 558,021 38,106 (62,251)
====================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (3,379,839) 0 (9,800)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (797,161) 0 0
In Excess of Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 0 (380,864) 0 0
====================================================================================================================================
TOTAL DISTRIBUTIONS 0 (4,557,864) 0 (9,800)
====================================================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 19,290,194 39,772,368 251,205 604,356
Reinvestment of Distributions 0 4,557,864 0 9,800
====================================================================================================================================
19,290,194 44,330,232 251,205 614,156
Amounts Paid for Repurchases of Shares (16,366,244) (29,185,713) (209,211) (41,683)
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 2,923,950 15,144,519 41,994 572,473
====================================================================================================================================
TOTAL INCREASE IN NET ASSETS 5,513,409 11,144,676 80,100 500,422
NET ASSETS
Initial Subscription (Note 1) 0 0 0 1,000
Beginning of Period 42,025,590 30,880,914 501,422 0
====================================================================================================================================
End of Period $ 47,538,999 $ 42,025,590 $ 581,522 $ 501,422
====================================================================================================================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at End of
Period $ 2,063,991 $ 6,969 $ 16,666 $ 6,159
------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 0 0 100
Shares Sold 1,626,251 3,145,683 30,491 64,719
Shares Issued from Reinvestment of
Distributions 0 401,574 0 1,223
====================================================================================================================================
1,626,251 3,547,257 30,491 66,042
Shares Repurchased (1,386,720) (2,310,193) (25,185) (5,062)
====================================================================================================================================
NET INCREASE IN FUND SHARES 239,531 1,237,064 5,306 60,980
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
<CAPTION>
SMALL COMPANY GROWTH FUND TECHNOLOGY FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Loss $ (4,548) $ (3,352) $ (8,821) $ (1,065)
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 62,637 (41,761) 289,923 (90,677)
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 178,401 152,667 479,258 291,455
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
OPERATIONS 236,490 107,554 760,360 199,713
====================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 0 0 (621)
In Excess of Net Investment Income 0 (579) 0 (1,061)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 0 0 (6,100)
====================================================================================================================================
TOTAL DISTRIBUTIONS 0 (579) 0 (7,782)
====================================================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 938,189 775,372 9,361,157 4,805,752
Reinvestment of Distributions 0 579 0 7,782
====================================================================================================================================
938,189 775,951 9,361,157 4,813,534
Amounts Paid for Repurchases of Shares (345,049) (93,382) (7,822,375) (3,842,652)
====================================================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 593,140 682,569 1,538,782 970,882
====================================================================================================================================
TOTAL INCREASE IN NET ASSETS 829,630 789,544 2,299,142 1,162,813
NET ASSETS
Beginning of Period 1,036,106 246,562 1,577,239 414,426
====================================================================================================================================
End of Period $ 1,865,736 $ 1,036,106 $ 3,876,381 $ 1,577,239
====================================================================================================================================
Accumulated Undistributed (Distributions in
Excess of) Net Investment Loss Included
in Net Assets at End of Period $ (4,548) $ 0 $ (8,824) $ (3)
-----------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 82,453 74,069 528,774 383,014
Shares Issued from Reinvestment of
Distributions 0 55 0 607
====================================================================================================================================
82,453 74,124 528,774 383,621
Shares Repurchased (29,335) (9,027) (448,479) (309,738)
====================================================================================================================================
NET INCREASE IN FUND SHARES 53,118 65,097 80,295 73,883
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INVESCO VARIABLE INVESTMENT FUNDS, INC.
<CAPTION>
TOTAL RETURN FUND UTILITIES FUND
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
JUNE 30 DECEMBER 31 JUNE 30 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1999 1998
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 401,239 $ 733,314 $ 44,770 $ 93,355
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 969,178 765,809 282,301 (4,109)
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 1,032,656 1,112,812 534,761 1,193,668
==================================================================================================================================
NET INCREASE IN NET ASSETS FROM
OPERATIONS 2,403,073 2,611,935 861,832 1,282,914
==================================================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (715,045) 0 (90,004)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (742,991) 0 (9,475)
In Excess of Net Realized Gain on
Investment Securities and Foreign
Currency Transactions 0 0 0 (4,527)
==================================================================================================================================
TOTAL DISTRIBUTIONS 0 (1,458,036) 0 (104,006)
==================================================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 5,557,056 16,770,585 1,800,595 2,414,172
Reinvestment of Distributions 0 1,458,036 0 104,006
====================================================================================================================================
5,557,056 18,228,621 1,800,595 2,518,178
Amounts Paid for Repurchases of Shares (11,345,220) (7,020,045) (1,004,400) (1,292,282)
====================================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (5,788,164) 11,208,576 796,195 1,225,896
====================================================================================================================================
TOTAL INCREASE (DECREASE) IN NET
ASSETS (3,385,091) 12,362,475 1,658,027 2,404,804
NET ASSETS
Beginning of Period 35,630,066 23,267,591 6,992,653 4,587,849
====================================================================================================================================
End of Period $ 32,244,975 $ 35,630,066 $ 8,650,680 $ 6,992,653
====================================================================================================================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at End of
Period $ 424,919 $ 23,680 $ 51,019 $ 6,249
-----------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 330,419 1,020,295 95,564 152,400
Shares Issued from Reinvestment of
Distributions 0 89,450 0 6,183
====================================================================================================================================
330,419 1,109,745 95,564 158,583
Shares Repurchased (656,599) (432,444) (53,132) (83,915)
====================================================================================================================================
NET INCREASE (DECREASE) IN FUND
SHARES (326,180) 677,301 42,432 74,668
====================================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Notes to financial statements -- INVESCO Variable Investment
Funds, Inc.
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Variable
Investment Funds, Inc. (the "Fund") is incorporated in Maryland and presently
consists of ten separate Funds: Blue Chip Growth Fund (formerly Growth Fund),
Dynamics Fund, Equity Income Fund (formerly Industrial Income Fund), Health
Sciences Fund, High Yield Fund, Realty Fund, Small Company Growth Fund,
Technology Fund, Total Return Fund and Utilities Fund. On April 30, 1999, the
board of directors of the Fund approved a name change for Industrial Income Fund
and Growth Fund to Equity Income Fund and Blue Chip Growth Fund, respectively.
The investment objectives of the Funds are: To seek long-term capital growth for
Blue Chip Growth and Small Company Growth Funds; to seek appreciation of capital
for Dynamics Fund; to seek capital appreciation and income on securities
principally engaged in specific business sectors for Health Sciences, Realty and
Technology Funds; to seek a high level of current income by investing primarily
in lower rated bonds, other debt securities and preferred stock for High Yield
Fund; to seek the best possible current income for Equity Income Fund; to seek a
high total return on investment through capital appreciation and current income
for Total Return Fund; and to seek capital appreciation and income on securities
of companies principally engaged in public utilities for Utilities Fund. The
Fund is registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company. The Fund's shares are not
offered directly to the public but are sold exclusively to life insurance
companies ("Participating Insurance Companies") as a pooled funding vehicle for
variable annuity and variable life insurance contracts issued by separate
accounts of the Participating Insurance Companies.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION -- Equity securities traded on national securities
exchanges or in the over-the- counter market are valued at the last sales price
in the market where such securities are primarily traded. If last sales prices
are not available, securities are valued at the highest closing bid price
obtained from one or more dealers making a market for such securities or by a
pricing service approved by the Fund's board of directors.
Debt securities are valued at evaluated bid prices as determined by a pricing
service approved by the Fund's board of directors. If evaluated bid prices are
not available, debt securities are valued by averaging the bid prices obtained
from one or more dealers making a market for such securities.
Foreign securities are valued at the closing price on the principal stock
exchange on which they are traded. In the event that closing prices are not
available for foreign securities, prices will be obtained from the principal
stock exchange at or prior to the close of the New York Stock Exchange. Foreign
currency exchange rates are determined daily prior to the close of the New York
Stock Exchange.
If market quotations or pricing service valuations are not readily available,
securities are valued at fair value as determined in good faith under procedures
established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates market
value) if maturity is 60 days or less at the time of purchase, or market value
if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign currencies are
translated into U.S. dollars at the prevailing market rates as quoted by one or
more banks or dealers on the date of valuation.
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to ensure
its market value exceeds the current market value of the repurchase agreements
including accrued interest. In the event of default on the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral or proceeds may be subject to legal proceedings.
<PAGE>
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security transactions
are accounted for on the trade date and dividend income is recorded on the ex
dividend date. Certain dividends from foreign securities will be recorded as
soon as the Fund is informed of the dividend if such information is obtained
subsequent to the ex dividend date. Interest income, which may be comprised of
stated coupon rate, market discount, original issue discount and amortized
premium, is recorded on the accrual basis. Income and expenses on foreign
securities are translated into U.S dollars at rates of exchange prevailing when
accrued. Interest on payment-in-kind debt securities is accrued based on the
yield to maturity at purchase date based on the effective interest method.
Discounts and premiums on debt securities purchased are amortized over the life
of the respective security as adjustments to interest income. Cost is determined
on the specific identification basis. The cost of foreign securities is
translated into U.S. dollars at the rates of exchange prevailing when such
securities are acquired.
The Fund may have elements of risk due to concentrated investments in specific
industries or foreign issuers located in a specific country. Such concentrations
may subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign governmental
laws or currency exchange restrictions. Net realized and unrealized gain or loss
from investment securities includes fluctuations from currency exchange rates
and fluctuations in market value.
High Yield Fund invests primarily in high yield bonds, some of which may be
rated below investment grade. These high yield bonds may be more susceptible
than higher grade bonds to real or perceived adverse economic or industry
conditions. The secondary market, on which high yield bonds are traded, may also
be less liquid than the market for higher grade bonds.
A Fund's use of short-term forward foreign currency contracts may subject it to
certain risks as a result of unanticipated movements in foreign exchange rates.
The Fund does not hold short-term forward foreign currency contracts for trading
purposes. The Fund may hold foreign currency in anticipation of settling foreign
security transactions and not for investment purposes.
Investments in securities of governmental agencies may only be guaranteed by the
respective agency's limited authority to borrow from the U.S. Government and may
not be guaranteed by the full faith and credit of the U.S. Government.
D. FEDERAL AND STATE TAXES -- The Fund has complied, and continues to comply,
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make sufficient
distributions of net investment income and net realized capital gains, if any,
to relieve it from all federal and state income taxes and federal excise taxes.
At December 31, 1998, Dynamics, Realty, Small Company Growth, Technology and
Utilities Funds had $1,818, $30,852, $39,306, $85,392 and $5,000, respectively,
in net capital loss carryovers which expire in the year 2006 and Small Company
Growth Fund had $555 in net capital loss carryovers which expire in the year
2005.
Dynamics, High Yield, Realty and Small Company Growth Funds incurred and elected
to defer post-October 31 net capital losses of $2,300, $369,771, $15,053 and
$121, respectively, to the year ended December 31, 1999. To the extent future
capital gains are offset by capital loss carryovers, such gains will not be
distributed to shareholders.
Dividends paid by the Fund from net investment income and distributions of net
realized short-term capital gains are, for federal income tax purposes, taxable
as ordinary income to shareholders.
Investment income received from foreign sources may be subject to foreign
withholding taxes. Dividend and interest income is shown gross of foreign
withholding taxes in the accompanying financial statements.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to
shareholders are recorded by the Fund on the ex dividend/distribution date. The
Fund distributes net realized capital gains, if any, to its shareholders at
least annually, if not offset by capital loss carryovers. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for mortgage-backed
securities, market discounts, amortized premiums, foreign currency transactions,
nontaxable dividends, net operating losses and expired capital loss
carryforwards.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund enters into short-term forward
foreign currency contracts in connection with planned purchases or sales of
securities as a hedge against fluctuations in foreign exchange rates pending the
settlement of transactions in foreign securities. A forward foreign currency
contract is an agreement between contracting parties to exchange an amount of
currency at some future time at an agreed upon rate. These contracts are
marked-to-market daily and the related appreciation or depreciation of the
contracts is presented in the Statement of Assets and Liabilities. Any realized
gain or loss incurred by the Fund upon the sale of securities is included in the
Statement of Operations.
<PAGE>
G. EXPENSES -- Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses, based on
the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed upon
Custodian Fees and Expenses are reduced by credits granted by the Custodian from
any temporarily uninvested cash. Such credits are included in Fees and Expenses
Paid Indirectly in the Statement of Operations.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. IFG serves as the Funds'
investment adviser. As compensation for its services to the Funds, IFG receives
an investment advisory fee which is accrued daily at the applicable rate and
paid monthly. The fee is based on the annual rate of each Fund's average net
assets as follows:
<TABLE>
AVERAGE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
$0 to $0 to $350 to $500 Million Over Over
$350 $500 $700 to $1 $700 $1
Fund Million Million Million Billion Million Billion
=======================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Blue Chip Growth Fund -- 0.85% -- 0.75% -- 0.65%
Dynamics Fund 0.60% -- 0.55% -- 0.50% --
Equity Income Fund -- 0.75% -- 0.65% -- 0.55%
Health Sciences Fund 0.75% -- 0.65% -- 0.55% --
High Yield Fund -- 0.60% -- 0.55% -- 0.45%
Realty Fund -- 0.90% -- 0.75% -- 0.65%
Small Company Growth Fund 0.75% -- 0.65% -- 0.55% --
Technology Fund 0.75% -- 0.65% -- 0.55% --
Total Return Fund -- 0.75% -- 0.65% -- 0.55%
Utilities Fund -- 0.60% -- 0.55% -- 0.45%
</TABLE>
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Realty
Advisors, Inc. ("IRAI"), an affiliate of IFG, provides that investment decisions
of Realty Fund are made by IRAI. A separate Sub-Advisory Agreement between IFG
and INVESCO Capital Management, Inc. ("ICM"), an affiliate of IFG, provides that
investment decisions of Total Return Fund are made by ICM. Fees for such
sub-advisory services are paid by IFG.
IFG receives a transfer agent fee of $5,000 per Fund per year. The fee is paid
monthly at one-twelfth of the annual fee.
In accordance with an Administrative Agreement, each Fund pays IFG an annual fee
of $10,000 (the "Base Fee"), plus an additional amount computed at an annual
rate of 0.015% of average net assets plus, effective July 6, 1998, an additional
amount computed at an annual rate of 0.25% of gross new sales (the "Incremental
Fees") to provide administrative, accounting and clerical services. The fee is
accrued daily and paid monthly. IFG may pay all or a portion of the Base Fee and
the Incremental Fees to other companies that assist in providing the services.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by each Fund.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
June 30, 1999, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
Blue Chip Growth Fund $ 306,500 $ 299,365
Dynamics Fund 42,825 71,197
Equity Income Fund 35,068,378 30,248,161
Health Sciences Fund 1,588,786 1,552,447
High Yield Fund 43,894,488 39,238,049
Realty Fund 1,832,369 1,718,398
Small Company Growth Fund 1,564,545 889,215
Technology Fund 3,460,412 2,449,564
Total Return Fund 3,761,927 3,430,152
Utilities Fund 1,157,268 792,553
<PAGE>
For the six months ended June 30, 1999, the aggregate cost of purchases and
proceeds from sales of U.S. Government securities were as follows:
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
Equity Income Fund $ 516,563 $ 1,402,494
Total Return Fund 1,521,527 4,278,617
NOTE 4 -- APPRECIATION AND DEPRECIATION. At June 30, 1999, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation (depreciation) by Fund were as
follows:
<TABLE>
<CAPTION>
NET
GROSS GROSS APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Blue Chip Growth Fund $ 107,719 $ 619 $
107,100
Dynamics Fund 122,139 24,934 97,205
Equity Income Fund 16,043,977 1,257,207 14,786,770
Health Sciences Fund 253,159 26,722 226,437
High Yield Fund 1,128,953 2,502,494 (1,373,541)
Realty Fund 11,929 22,236 (10,307)
Small Company Growth Fund 370,886 42,184 328,702
Technology Fund 771,761 20,936 750,825
Total Return Fund 7,076,330 956,662 6,119,668
Utilities Fund 2,565,441 92,314 2,473,127
</TABLE>
NOTE 5-- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ICM or IRAI.
Each Fund has adopted an unfunded defined benefit deferred compensation plan
covering all independent directors of the Fund who will have served as an
independent director for at least five years at the time of retirement. Benefits
under this plan are based on an annual rate equal to 50% of the sum of the
retainer fee at the time of retirement plus the annual meeting fee.
Pension expenses for the six months ended June 30, 1999, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
<TABLE>
<CAPTION>
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Blue Chip Growth Fund $ 3 $ 7 $ 10
Dynamics Fund 2 5 8
Equity Income Fund 450 1,064 2,672
Health Sciences Fund 18 47 71
High Yield Fund 315 738 1,823
Small Company Growth Fund 3 9 13
Technology Fund 6 16 25
Total Return Fund 266 643 1,615
Utilities Fund 49 107 263
</TABLE>
Pension expenses, unfunded accrued pension costs and pension liability were
insignificant for Realty Fund.
The independent directors have contributed to a deferred fee agreement plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts may be invested in the shares of any of the INVESCO
Funds, excluding the Variable Investment Funds.
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
================================================================================
NOTE 6 -- LINE OF CREDIT. Each Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At June
30, 1999, there were no such borrowings.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Blue Chip Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JUNE 30 DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997(a)
UNAUDITED
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 14.49 $ 10.69 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.05) 0.00 0.05
Net Gains on Securities (Both Realized and Unrealized) 1.20 4.14 0.64
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 1.15 4.14 0.69
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.04 0.00
In Excess of Net Investment Income 0.00 0.01 0.00
Distributions from Capital Gains 0.00 0.29 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.34 0.00
====================================================================================================================================
Net Asset Value-- End of Period $ 15.64 $ 14.49 $ 10.69
====================================================================================================================================
TOTAL RETURN(b) 7.94%(c) 38.99% 6.90%(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 443 $ 371 $ 266
Ratio of Expenses to Average Net Assets(d)(e) 0.99%(c) 1.57% 0.29%(f)
Ratio of Net Investment Income (Loss) to Average Net Assets(d) (0.36%)(c) (0.07%) 1.45%(f)
Portfolio Turnover Rate 81%(c) 78% 12%(c)
<FN>
(a) From August 25, 1997, commencement of investment operations, through December, 31 1997.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999, the year ended December
31, 1998 and all of expenses of the Fund were voluntarily absorbed by IFG for the period ended December 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 7.07% (not annualized),
12.04% and 28.76% (annualized), respectively, and ratio of net investment loss to average net assets would have been (6.44%)
(not annualized), (10.54%) and (27.02%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (CONTINUED)
Dynamics Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JUNE 30 DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997(a)
UNAUDITED
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 12.15 $ 10.34 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.04) 0.00 0.02
Net Gains on Securities (Both Realized and Unrealized) 2.51 1.98 0.32
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 2.47 1.98 0.34
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.02 0.00
Distributions from Capital Gains 0.00 0.15 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.17 0.00
====================================================================================================================================
Net Asset Value-- End of Period $ 14.62 $ 12.15 $ 10.34
====================================================================================================================================
TOTAL RETURN(b) 20.33%(c) 19.35% 3.40%(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 410 $ 308 $ 257
Ratio of Expenses to Average Net Assets(d)(e) 0.69%(c) 1.45% 0.52%(f)
Ratio of Net Investment Income (Loss) to Average Net Assets(d) (0.35%)(c) (0.64%) 0.63%(f)
Portfolio Turnover Rate 14%(c) 55% 28%(c)
<FN>
(a) From August 25, 1997, commencement of investment operations, through December, 31 1997.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999, the year ended December
31, 1998 and all of expenses of the Fund were voluntarily absorbed by IFG for the period ended December 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 7.63% (not annualized),
14.76% and 34.18% (annualized), respectively, and ratio of net investment loss to average net assets would have been (7.29%)
(not annualized), (13.95%) and (33.03%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Equity Income Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30 YEAR ENDED DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 18.61 $ 17.04 $ 14.33 $ 12.58 $ 10.09 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.13 0.33 0.30 0.28 0.19 0.03
Net Gains on Securities
(Both Realized and Unrealized) 2.43 2.23 3.71 2.52 2.76 0.09
====================================================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 2.56 2.56 4.01 2.80 2.95 0.12
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.00 0.32 0.29 0.28 0.20 0.03
Distributions from Capital Gains 0.00 0.67 1.01 0.77 0.26 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.99 1.30 1.05 0.46 0.03
====================================================================================================================================
Net Asset Value --
End of Period $ 21.17 $ 18.61 $ 17.04 $ 14.33 $ 12.58 $ 10.09
====================================================================================================================================
TOTAL RETURN(b) 13.76%(c) 15.30% 28.17% 22.28% 29.25% 1.23%(c)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 73,774 $ 60,346 $ 40,093 $ 22,342 $ 8,362 $ 525
Ratio of Expenses to Average
Net Assets(d) 0.52%(c)(e) 0.93%(e) 0.91%(e) 0.95%(e) 1.03%(e) 0.79%(f)
Ratio of Net Investment Income
to Average Net Assets(d) 0.68%(c) 1.98% 2.18% 2.87% 3.50% 1.69%(f)
Portfolio Turnover Rate 51%(c) 73% 87% 93% 97% 0%(c)
<FN>
(a) From August 10, 1994, commencement of investment operations, to December 31, 1994.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the periods shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the years ended December 31, 1998, 1997, 1996 and 1995 and the
period ended December 31, 1994. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets
would have been 0.93%, 0.97%, 1.19%, 2.31% and 32.55% (annualized), respectively, and ratio of net investment income (loss) to
average net assets would have been 1.98%, 2.12%, 2.63%, 2.22%, and (30.07%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Health Sciences Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JUNE 30 DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998(a) 1997(b)
UNAUDITED
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 15.29 $ 11.04 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.02 0.05 0.10
Net Gains or (Losses) on Securities (Both Realized and Unrealized) (0.66) 4.66 0.94
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS (0.64) 4.71 1.04
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.03 0.00
Distributions from Capital Gains 0.00 0.34 0.00
In Excess of Net Realized Gains 0.00 0.09 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.46 0.00
====================================================================================================================================
Net Asset Value-- End of Period $ 14.65 $ 15.29 $ 11.04
====================================================================================================================================
TOTAL RETURN(c) (4.19%)(d) 42.85% 10.40%(d)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 2,335 $ 2,378 $ 423
Ratio of Expenses to Average Net Assets(e)(f) 0.73%(d) 1.27% 0.60%(g)
Ratio of Net Investment Income to Average Net Assets(e) 0.12%(d) 0.35% 2.34%(g)
Portfolio Turnover Rate 72%(d) 107 112%(d)
<FN>
(a) The per share information was computed based on average shares.
(b) From May 22, 1997, commencement of investment operations, through December, 31 1997.
(c) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(d) Based on operations for the period shown and, accordingly, are not representative of a full year.
(e) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999, the year ended December
31, 1998 and all of expenses of the Fund were voluntarily absorbed by IFG for the period ended December 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 1.71% (not annualized),
4.20% and 21.45% (annualized), respectively, and ratio of net investment loss to average net assets would have been (0.86%) (not
annualized), (2.58%) and (18.51%) (annualized), respectively.
(f) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements .
(g) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
High Yield Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30 YEAR ENDED DECEMBER 31 DECEMBER 31
- -------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 11.31 $ 12.46 $ 1.78 $ 11.04 $ 10.01 $ 10.00
===========================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.52 0.97 0.78 0.72 0.55 0.05
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 0.19 (0.80) 1.26 1.11 1.43 0.01
===========================================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 0.71 0.17 2.04 1.83 1.98 0.06
===========================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.00 0.98 0.78 0.71 0.55 0.05
Distributions from Capital Gains 0.00 0.23 0.58 0.38 0.40 0.00
In Excess of Net Realized Gains 0.00 0.11 0.00 0.00 0.00 0.00
===========================================================================================================================
TOTAL DISTRIBUTIONS 0.00 1.32 1.36 1.09 0.95 0.05
===========================================================================================================================
Net Asset Value --
End of Period $ 12.02 $ 11.31 $ 12.46 $ 11.78 $ 11.04 $ 10.01
===========================================================================================================================
TOTAL RETURN(b) 6.18%(c) 1.42% 17.33% 16.59% 19.76% 0.60%(c)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 47,539 $ 42,026 $ 30,881 $ 14,033 $ 5,233 $ 624
Ratio of Expenses to Average
Net Assets(d) 0.52%(c)(e) 0.85%(e) 0.83%(e) 0.87%(e) 0.97%(e) 0.74%(f)
Ratio of Net Investment Income
to Average Net Assets(d) 4.43%(c) 8.99% 8.67% 9.19% 8.79% 2.72%(f)
Portfolio Turnover Rate 89%(c) 245% 344% 380% 310% 23%(c)
<FN>
(a) From May 27, 1994, commencement of investment operations, to December 31, 1994.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the periods shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the years ended December 31, 1997, 1996 and 1995 and for the
period ended December 31, 1994. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets
would have been 0.94%, 1.32%, 2.71% and 30.38% (annualized), respectively, and ratio of net investment income (loss) to average
net assets would have been 8.56%, 8.74%, 7.05% and (26.92%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Realty Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998(a)
UNAUDITED
<S> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 8.22 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.15 0.29
Net Gains or (Losses) on Securities (Both Realized and Unrealized) 0.40 (1.88)
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 0.55 (1.59)
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.19
====================================================================================================================================
NET ASSET VALUE-- END OF PERIOD $ 8.77 $ 8.22
====================================================================================================================================
TOTAL RETURN(b) 6.69%(c) (15.88%)(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 582 $ 501
Ratio of Expenses to Average Net Assets(d)(e) 1.05%(c) 1.90%(f)
Ratio of Net Investment Income to Average Net Assets(d) 1.93%(c) 4.94%(f)
Portfolio Turnover Rate 375%(c)(g) 200%(c)(g)
<FN>
(a) From April 1, 1998, commencement of investment operations, through December, 31 1998.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999 and the period ended
December 31, 1998. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been
4.98% (not annualized) and 8.54% (annualized), respectively, and ratio of net investment loss to average net assets would have
been (2.00%) (not annualized) and (1.70%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements .
(f) Annualized
(g) Portfolio turnover was greater than expected during the period due to active trading undertaken in response to market conditions
at a time when the Fund's assets were still relatively small and before the Fund was fully invested.
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Small Company Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JUNE 30 DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997(a)
UNAUDITED
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 11.51 $ 9.91 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) (0.01) 0.02
Net Gains or (Losses) on Securities (Both Realized and Unrealized) 1.56 1.62 (0.11)
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 1.53 1.61 (0.09)
====================================================================================================================================
LESS DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME 0.00 0.01 0.00
====================================================================================================================================
Net Asset Value-- End of Period $ 13.04 $ 11.51 $ 9.91
====================================================================================================================================
TOTAL RETURN(b) 13.19%(c) 16.38% (0.90%)(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 1,866 $ 1,036 $ 247
Ratio of Expenses to Average Net Assets(d)(e) 0.91%(c) 1.87% 0.61%(f)
Ratio of Net Investment Income (Loss) to Average Net Assets(d) (0.31%)(c) (0.90%) 0.52%(f)
Portfolio Turnover Rate 66%(c) 92% 25%(c)
<FN>
(a) From August 25, 1997, commencement of investment operations, through December, 31 1997.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999, the year ended December
31, 1998 and all of expenses of the Fund were voluntarily absorbed by IFG for the period ended December 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 3.01% (not annualized),
12.46% and 35.99% (annualized), respectively, and ratio of net investment loss to average net assets would have been (2.41%)
(not annualized), (11.49%) and (34.86%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements .
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Technology Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JUNE 30 DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997(a)
UNAUDITED
<S> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 14.34 $ 11.49 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
====================================================================================================================================
Net Investment Income (Loss) (0.05) (0.03) 0.05
Net Gains on Securities (Both Realized and Unrealized) 6.08 2.96 1.44
====================================================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 6.03 2.93 1.49
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.01 0.00
In Excess of Net Investment Income 0.00 0.01 0.00
Distributions from Capital Gains 0.00 0.06 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.08 0.00
====================================================================================================================================
Net Asset Value-- End of Period $ 20.37 $ 14.34 $ 11.49
====================================================================================================================================
TOTAL RETURN(b) 42.05%(c) 25.69% 14.80%(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 3,876 $ 1,577 $ 414
Ratio of Expenses to Average Net Assets(d)(e) 0.76%(c) 1.40% 0.48%(f)
Ratio of Net Investment Income (Loss) to Average Net Assets(d) (0.34%)(c) (0.14%) 0.95%(f)
Portfolio Turnover Rate 108%(c) 239% 102%(c)
<FN>
(a) From May 21, 1997, commencement of investment operations, through December, 31 1997.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the period shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999, the year ended December
31, 1998 and all of expenses of the Fund were voluntarily absorbed by IFG for the period ended December 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net assets would have been 1.73% (not annualized),
6.47% and 19.25% (annualized), respectively, and ratio of net investment loss to average net assets would have been (1.31%) (not
annualized), (5.21%) and (17.82%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements .
(f) Annualized Financial Highlights (continued)
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Total Return Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
JUNE 30 YEAR ENDED DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 16.58 $ 15.81 $ 13.21 $ 12.14 $ 10.09 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.22 0.37 0.36 0.36 0.25 0.09
Net Gains on Securities
(Both Realized and Unrealized) 0.89 1.13 2.66 1.12 2.05 0.09
====================================================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 1.11 1.50 3.02 1.48 2.30 0.18
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.00 0.36 0.34 0.36 0.24 0.09
In Excess of Net Investment Income 0.00 0.00 0.00 0.05 0.00 0.00
Distributions from Capital Gains 0.00 0.37 0.08 0.00 0.01 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.73 0.42 0.41 0.25 0.09
====================================================================================================================================
Net Asset Value --
End of Period $ 17.69 $ 16.58 $ 15.81 $ 13.21 $ 12.14 $ 10.09
====================================================================================================================================
TOTAL RETURN(b) 6.69%(c) 9.56% 22.91% 12.18% 22.79% 1.75%(c)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 32,245 $ 35,630 $ 23,268 $ 13,513 $ 6,553 $ 1,055
Ratio of Expenses to Average
Net Assets(d) 0.56%(c)(e) 1.01%(e) 0.92%(e) 0.94%(e) 1.01%(e) 0.86%(f)
Ratio of Net Investment Income
to Average Net Assets(d) 1.10%(c) 2.50% 3.07% 3.44% 3.91% 3.86%(f)
Portfolio Turnover Rate 15%(c) 17% 27% 12% 5% 0%(c)
<FN>
(a) From June 2, 1994, commencement of investment operations, through December 31, 1994.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the periods shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG the years ended December 31, 1998, 1997, 1996, and 1995 and the
period ended December 31, 1994. If such expenses had not been voluntarily absorbed, ratio of expenses to average net assets
would have been 1.01%, 1.10%, 1.30%, 2.51% and 16.44% (annualized), respectively, and ratio of net investment income (loss) to
average net assets would have been 2.50%, 2.89%, 3.08%, 2.41% and (11.72%) (annualized), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(f) Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
Utilities Fund
(For a Fund Share Outstanding Throughout Each Period)
<CAPTION>
SIX MONTHS PERIOD
ENDED END
JUNE 30 YEAR ENDED DECEMBER 31 DECEMBER 31
- ------------------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 17.78 $ 14.40 $ 11.95 $ 10.84 $ 10.00 $ 10.00
====================================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.10 0.25 0.31 0.13 0.07 0.00
Net Gains on Securities
(Both Realized and Unrealized) 1.97 3.41 2.48 1.26 0.84 0.00
====================================================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 2.07 3.66 2.79 1.39 0.91 0.00
====================================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.00 0.24 0.29 0.13 0.07 0.00
In Excess of Net Investment
Income 0.00 0.00 0.00 0.01 0.00 0.00
Distributions from Capital Gains 0.00 0.03 0.05 0.14 0.00 0.00
In Excess of Net Realized Gains 0.00 0.01 0.00 0.00 0.00 0.00
====================================================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.28 0.34 0.28 0.07 0.00
====================================================================================================================================
Net Asset Value --
End of Period $ 19.85 $ 17.78 $ 14.40 $ 11.95 $ 10.84 $ 10.00
====================================================================================================================================
TOTAL RETURN(b) 11.64%(c) 25.48% 23.41% 12.76% 9.08% 0.00%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 8,651 $ 6,993 $ 4,588 $ 2,660 $ 290 $ 25
Ratio of Expenses to Average
Net Assets(d) 0.60%(c)(e) 1.08%(e) 0.99%(e) 1.16%(e) 1.80%(e) 0.00%
Ratio of Net Investment Income
to Average Net Assets(d) 0.58%(c) 1.73% 2.92% 2.92% 2.47% 0.00%
Portfolio Turnover Rate 12%(c) 35% 33% 48% 24% 0%
<FN>
(a) All of the expenses for the Fund were voluntarily absorbed by IFG for the period ended December 31, 1994, since investment
operations did not commence during 1994.
(b) Total return does not reflect expenses that apply to the related insurance policies, and inclusion of these charges would reduce
the total return figures for the periods shown.
(c) Based on operations for the period shown and, accordingly, are not representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for the six months ended June 30, 1999 and the years ended
December 31, 1998, 1997, 1996, and 1995. If such expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 0.83% (not annualized), 1.60%, 2.07%, 5.36% and 57.13%, respectively, and ratio of net investment income
(loss) to average net assets would have been 0.35% (not annualized), 1.21%, 1.84%, (1.28%) and (52.86%), respectively.
(e) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by Investment Adviser, which is before any expense offset
arrangements.
</FN>
</TABLE>
<PAGE>
<TABLE>
OTHER INFORMATION (CONTINUED)
UNAUDITED
On May 20, 1999, a special meeting of the shareholders of the Fund was held at which the ten directors identified below were
elected. The selection of PricewaterhouseCoopers LLP as independent accountants (Proposal 1) and the approval of changes to the
fundamental investment restrictions identified below (Proposal 2) were ratified. The following is a report of the votes cast:
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BLUE CHIP GROWTH FUND
Charles W. Brady 25,600 0 0 25,600
Fred A. Deering 25,600 0 0 25,600
Mark H. Williamson 25,600 0 0 25,600
Dr. Victor L. Andrews 25,600 0 0 25,600
Bob R. Baker 25,600 0 0 25,600
Lawrence H. Budner 25,600 0 0 25,600
Dr. Wendy Lee Gramm 25,600 0 0 25,600
Kenneth T. King 25,600 0 0 25,600
John W. McIntyre 25,600 0 0 25,600
Dr. Larry Soll 25,600 0 0 25,600
Proposal 1 25,600 0 0 25,600
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 25,600 0 0 25,600
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 25,600 0 0 25,600
c -- Underwriting securities 25,600 0 0 25,600
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 25,600 0 0 25,600
e -- Loans 25,600 0 0 25,600
f -- Investing in commodities 25,600 0 0 25,600
g -- Real estate investments 25,600 0 0 25,600
h -- Investing in another investment company 25,600 0 0 25,600
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 25,600 0 0 25,600
DYNAMICS FUND
Charles W. Brady 25,363 0 0 25,363
Fred A. Deering 25,363 0 0 25,363
Mark H. Williamson 25,363 0 0 25,363
Dr. Victor L. Andrews 25,363 0 0 25,363
Bob R. Baker 25,363 0 0 25,363
Lawrence H. Budner 25,363 0 0 25,363
Dr. Wendy Lee Gramm 25,363 0 0 25,363
Kenneth T. King 25,363 0 0 25,363
John W. McIntyre 25,363 0 0 25,363
Dr. Larry Soll 25,363 0 0 25,363
Proposal 1 25,363 0 0 25,363
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
DYNAMICS FUND (CONTINUED)
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 25,363 0 0 25,363
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 25,363 0 0 25,363
c -- Underwriting securities 25,363 0 0 25,363
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 25,363 0 0 25,363
e -- Loans 25,363 0 0 25,363
f -- Investing in commodities 25,363 0 0 25,363
g -- Real estate investments 25,363 0 0 25,363
h -- Investing in another investment company 25,363 0 0 25,363
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 25,363 0 0 25,363
EQUITY INCOME FUND
Charles W. Brady 2,697,868 0 36,804 2,734,672
Fred A. Deering 2,697,868 0 36,804 2,734,672
Mark H. Williamson 2,697,868 0 36,804 2,734,672
Dr. Victor L. Andrews 2,697,868 0 36,804 2,734,672
Bob R. Baker 2,697,868 0 36,804 2,734,672
Lawrence H. Budner 2,697,868 0 36,804 2,734,672
Dr. Wendy Lee Gramm 2,697,868 0 36,804 2,734,672
Kenneth T. King 2,697,868 0 36,804 2,734,672
John W. McIntyre 2,697,868 0 36,804 2,734,672
Dr. Larry Soll 2,697,868 0 36,804 2,734,672
Proposal 1 2,675,617 1,668 57,375 2,734,660
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 2,645,453 1,365 87,854 2,734,672
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 2,645,453 1,365 87,854 2,734,672
c -- Underwriting securities 2,645,453 1,365 87,854 2,734,672
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 2,645,453 1,365 87,854 2,734,672
e -- Loans 2,645,453 1,365 87,854 2,734,672
f -- Investing in commodities 2,645,453 1,365 87,854 2,734,672
g -- Real estate investments 2,645,453 1,365 87,854 2,734,672
h -- Investing in another investment company 2,645,453 1,365 87,854 2,734,672
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 2,645,453 1,365 87,854 2,734,672
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND
Charles W. Brady 159,015 0 13,355 172,370
Fred A. Deering 159,015 0 13,355 172,370
Mark H. Williamson 159,015 0 13,355 172,370
Dr. Victor L. Andrews 159,015 0 13,355 172,370
Bob R. Baker 159,015 0 13,355 172,370
Lawrence H. Budner 159,015 0 13,355 172,370
Dr. Wendy Lee Gramm 159,015 0 13,355 172,370
Kenneth T. King 159,015 0 13,355 172,370
John W. McIntyre 159,015 0 13,355 172,370
Dr. Larry Soll 159,015 0 13,355 172,370
Proposal 1 162,122 0 10,248 172,370
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 150,003 2,047 20,321 172,371
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 150,003 2,047 20,321 172,371
c -- Underwriting securities 150,003 2,047 20,321 172,371
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 150,003 2,047 20,321 172,371
e -- Loans 150,003 2,047 20,321 172,371
f -- Investing in commodities 150,003 2,047 20,321 172,371
g -- Real estate investments 150,003 2,047 20,321 172,371
h -- Investing in another investment company 150,003 2,047 20,321 172,371
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 150,003 2,047 20,321 172,371
HIGH YIELD FUND
Charles W. Brady 3,406,209 0 18,067 3,424,276
Fred A. Deering 3,406,209 0 18,067 3,424,276
Mark H. Williamson 3,406,209 0 18,067 3,424,276
Dr. Victor L. Andrews 3,406,209 0 18,067 3,424,276
Bob R. Baker 3,406,209 0 18,067 3,424,276
Lawrence H. Budner 3,406,209 0 18,067 3,424,276
Dr. Wendy Lee Gramm 3,406,209 0 18,067 3,424,276
Kenneth T. King 3,406,209 0 18,067 3,424,276
John W. McIntyre 3,406,209 0 18,067 3,424,276
Dr. Larry Soll 3,406,209 0 18,067 3,424,276
Proposal 1 3,290,054 781 133,433 3,424,268
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD FUND (CONTINUED)
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 3,263,040 4,967 156,269 3,424,276
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 3,263,040 4,967 156,269 3,424,276
c -- Underwriting securities 3,263,040 4,967 156,269 3,424,276
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 3,263,040 4,967 156,269 3,424,276
e -- Loans 3,263,040 4,967 156,269 3,424,276
f -- Investing in commodities 3,263,040 4,967 156,269 3,424,276
g -- Real estate investments 3,263,040 4,967 156,269 3,424,276
h -- Investing in another investment company 3,263,040 4,967 156,269 3,424,276
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 3,263,040 4,967 156,269 3,424,276
REALTY FUND
Charles W. Brady 64,753 0 0 64,753
Fred A. Deering 64,753 0 0 64,753
Mark H. Williamson 64,753 0 0 64,753
Dr. Victor L. Andrews 64,753 0 0 64,753
Bob R. Baker 64,753 0 0 64,753
Lawrence H. Budner 64,753 0 0 64,753
Dr. Wendy Lee Gramm 64,753 0 0 64,753
Kenneth T. King 64,753 0 0 64,753
John W. McIntyre 64,753 0 0 64,753
Dr. Larry Soll 64,753 0 0 64,753
Proposal 1 64,753 0 0 64,753
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 64,753 0 0 64,753
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 64,753 0 0 64,753
c -- Underwriting securities 64,753 0 0 64,753
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 64,753 0 0 64,753
e -- Loans 64,753 0 0 64,753
f -- Investing in commodities 64,753 0 0 64,753
g -- Real estate investments 64,753 0 0 64,753
h -- Investing in another investment company 64,753 0 0 64,753
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 64,753 0 0 64,753
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND
Charles W. Brady 119,691 0 11,495 131,186
Fred A. Deering 119,691 0 11,495 131,186
Mark H. Williamson 119,691 0 11,495 131,186
Dr. Victor L. Andrews 119,691 0 11,495 131,186
Bob R. Baker 119,691 0 11,495 131,186
Lawrence H. Budner 119,691 0 11,495 131,186
Dr. Wendy Lee Gramm 119,691 0 11,495 131,186
Kenneth T. King 119,691 0 11,495 131,186
John W. McIntyre 119,691 0 11,495 131,186
Dr. Larry Soll 119,691 0 11,495 131,186
Proposal 1 127,801 8 3,373 131,182
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 127,944 8 3,234 131,186
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 127,944 8 3,234 131,186
c -- Underwriting securities 127,944 8 3,234 131,186
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 127,944 8 3,234 131,186
e -- Loans 127,944 8 3,234 131,186
f -- Investing in commodities 127,944 8 3,234 131,186
g -- Real estate investments 127,944 8 3,234 131,186
h -- Investing in another investment company 127,944 8 3,234 131,186
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 127,944 8 3,234 131,186
TECHNOLOGY FUND
Charles W. Brady 124,451 0 12,170 136,621
Fred A. Deering 124,451 0 12,170 136,621
Mark H. Williamson 124,451 0 12,170 136,621
Dr. Victor L. Andrews 124,451 0 12,170 136,621
Bob R. Baker 124,451 0 12,170 136,621
Lawrence H. Budner 124,451 0 12,170 136,621
Dr. Wendy Lee Gramm 124,451 0 12,170 136,621
Kenneth T. King 124,451 0 12,170 136,621
John W. McIntyre 124,451 0 12,170 136,621
Dr. Larry Soll 124,451 0 12,170 136,621
Proposal 1 124,451 0 12,170 136,621
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND (CONTINUED)
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 132,576 1,060 2,985 136,621
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 132,576 1,060 2,985 136,621
c -- Underwriting securities 132,576 1,060 2,985 136,621
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 132,576 1,060 2,985 136,621
e -- Loans 132,576 1,060 2,985 136,621
f -- Investing in commodities 132,576 1,060 2,985 136,621
g -- Real estate investments 132,576 1,060 2,985 136,621
h -- Investing in another investment company 132,576 1,060 2,985 136,621
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 132,576 1,060 2,985 136,621
TOTAL RETURN FUND
Charles W. Brady 2,066,448 0 31,880 2,098,328
Fred A. Deering 2,066,448 0 31,880 2,098,328
Mark H. Williamson 2,066,448 0 31,880 2,098,328
Dr. Victor L. Andrews 2,066,448 0 31,880 2,098,328
Bob R. Baker 2,066,448 0 31,880 2,098,328
Lawrence H. Budner 2,066,448 0 31,880 2,098,328
Dr. Wendy Lee Gramm 2,066,448 0 31,880 2,098,328
Kenneth T. King 2,066,448 0 31,880 2,098,328
John W. McIntyre 2,066,448 0 31,880 2,098,328
Dr. Larry Soll 2,066,448 0 31,880 2,098,328
Proposal 1 2,043,845 30,985 23,496 2,098,326
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 2,032,828 36,122 29,378 2,098,328
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 2,032,828 36,122 29,378 2,098,328
c -- Underwriting securities 2,032,828 36,122 29,378 2,098,328
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 2,032,828 36,122 29,378 2,098,328
e -- Loans 2,032,828 36,122 29,378 2,098,328
f -- Investing in commodities 2,032,828 36,122 29,378 2,098,328
g -- Real estate investments 2,032,828 36,122 29,378 2,098,328
h -- Investing in another investment company 2,032,828 36,122 29,378 2,098,328
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 2,032,828 36,122 29,378 2,098,328
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
UTILITIES FUND
Charles W. Brady 411,666 0 1,525 413,191
Fred A. Deering 411,666 0 1,525 413,191
Mark H. Williamson 411,666 0 1,525 413,191
Dr. Victor L. Andrews 411,666 0 1,525 413,191
Bob R. Baker 411,666 0 1,525 413,191
Lawrence H. Budner 411,666 0 1,525 413,191
Dr. Wendy Lee Gramm 411,666 0 1,525 413,191
Kenneth T. King 411,666 0 1,525 413,191
John W. McIntyre 411,666 0 1,525 413,191
Dr. Larry Soll 411,666 0 1,525 413,191
Proposal 1 410,208 2,976 0 413,184
Proposal 2
Modification of Fundamental Investment
Restrictions on:
a -- Issuer diversification 409,631 989 2,571 413,191
b -- Industry concentration and adoption of
non-fundamental restriction on industry
classification of domestic and foreign banking 409,631 989 2,571 413,191
c -- Underwriting securities 409,631 989 2,571 413,191
d -- Borrowing and adoption of non-fundamental
restriction on borrowing 409,631 989 2,571 413,191
e -- Loans 409,631 989 2,571 413,191
f -- Investing in commodities 409,631 989 2,571 413,191
g -- Real estate investments 409,631 989 2,571 413,191
h -- Investing in another investment company 409,631 989 2,571 413,191
Adoption of Fundamental Investment Restrictions on:
i -- Issuance of senior securities 409,631 989 2,571 413,191
</TABLE>
<PAGE>
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