MERRILL LYNCH
ASSET BUILDER
PROGRAM, INC.
FUND LOGO
Quarterly Report
April 30, 1996
<PAGE>
Officers and Directors
Arthur Zeikel, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Terry K. Glenn, Executive Vice President
Norman R. Harvey, Senior Vice President
N. John Hewitt, Senior Vice President
Donald C. Burke, Vice President
Jay C. Harbeck, Vice President
Joel Heymsfeld, Vice President
Gregory Mark Maunz, Vice President
Kevin M. Rendino, Vice President
Lawrence R. Fuller, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street, 12th Floor
New York, NY 10286
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 637-3863
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Program unless
accompanied or preceded by the Program's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance. Investment return and
principal value of shares will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
Statements and other information herein are as dated and are subject
to change.
<PAGE>
Merrill Lynch
Asset Builder Program, Inc.
Box 9011
Princeton, NJ
08543-9011
MERRILL LYNCH ASSET BUILDER PROGRAM, INC.
Portfolio Changes (Equity Investments) For the Quarter Ended
April 30, 1996
FUNDAMENTAL
VALUE
PORTFOLIO
Additions
Apple Computer, Inc.
Fingerhut Companies, Inc.
Giddings & Lewis, Inc.
Hanson PLC (Sponsored) (ADR)
Micron Technology, Inc.
PFF Bancorp Inc.
Reebok International Ltd.
The Seagram Company Ltd.
Texas Instruments, Inc.
*VLSI Technology
Deletions
Bay Apartment Communities, Inc.
COMSAT Corporation
Darden Restaurants, Inc.
Foundation Health Corp.
MCI Communications Corp.
NationsBank Corp.
Norwest Corp.
Swift Energy Co.
*VLSI Technology
<PAGE>
GLOBAL
OPPORTUNITY
PORTFOLIO
Additions
American Express Company
Applied Materials, Inc.
Carnival Corporation
cisco Systems, Inc.
Conrail, Inc.
Deere & Company
Dell Computer Corp.
Delta Air Lines, Inc.
Eisai Co., Ltd.
Finnlines OY
First Data Corp.
General Electric Company PLC
Grupo Carso, S.A. de C.V. (ADR)
Hyundai Engineering & Construction Co.,
Ltd. (ADR)
INTEL Corporation
International Business Machines Corp.
Kimberly-Clark de Mexico, S.A. de C.V.
Lexmark International Group, Inc.
(Class A)
Lucent Technologies, Inc.
Magna International, Inc.
Microsoft Corp.
Nokia Corp. AB (ADR)
Oracle Corp.
Philip Morris Companies, Inc.
Potash Corp. of Saskatchewan, Inc.
Procter & Gamble Company (The)
Spieker Properties, Inc.
Usinor-Sacilor S.A.
Deletions
Eastman Chemical Co.
GKN PLC
Hitachi Cable Ltd.
Mitsubishi Trust and Banking Corp.
SMC Corporation
<PAGE>
[FN]
*Added and deleted in the same quarter.
DEAR SHAREHOLDER
We are pleased to provide you with this quarterly report for Merrill
Lynch Asset Builder Program, Inc. The Program consists of five
separate diversified Portfolios, each with its own investment
objectives. We are also pleased to introduce Merrill Lynch Growth
Opportunity Portfolio which commenced operations on February 2,
1996. Merrill Lynch Growth Opportunity Portfolio seeks long-term
growth of capital by investing in a portfolio of equity securities
placing particular emphasis on companies that have exhibited above-
average growth rates in earnings. Complete performance information,
including aggregate and average annual total returns, for all five
Portfolios can be found on pages 7--11 of this report to
shareholders.
Merrill Lynch Fundamental
Value Portfolio
In our last report to shareholders, we highlighted our strategy of
overweighting stocks which are sensitive to changes in the economy.
Although the US economy had slowed enough to cause uncertainty in
the earnings for many cyclical companies, stock valuations remained
quite attractive. We used this period of weakness for economy-
sensitive stocks to add to our holdings in cyclicals, namely the
retail and technology sectors, as we believed the Federal Reserve
Board would continue to ease interest rates enough to avoid a
recession. We also added to our positions in steel stocks like USX-
US Steel Group and WHX Corp., and initiated positions in out-of-
favor technology stocks like International Business Machines Corp.
and National Semiconductor Corp.
On March 8, 1996, the Labor Department reported that the US economy
created a much higher-than-expected 700,000 new jobs for the month
of February. This resulted in a significant change in investor
psychology by indicating that economic activity was stronger than
the consensus view. The bond market sold off sharply as a result of
concerns that the Federal Reserve Board would no longer be reducing
interest rates in the near term. A month later, another strong
employment report for March further fueled the notion that the US
economy was accelerating from the slow fourth quarter. Against this
backdrop, the April quarter was marked by a shift in investor
emphasis away from the stable consumer non-durable sectors and into
economy-sensitive sectors including consumer cyclicals, capital
goods-technology and retail. The Portfolio outperformed the +3.39%
total return of the unmanaged Standard & Poor's 500 Composite Index
for the quarter ended April 30, 1996 with total returns for the
Portfolio's Class A, Class B, Class C and Class D Shares at +10.63%,
+10.39%, +10.39% and +10.64%, respectively.
<PAGE>
During the April quarter, we invested $7.5 million in 21 of our
existing positions and established nine new positions. Three of our
nine new positions were in the technology sector, where stock prices
had come under severe pressure as a result of concerns of oversupply
in the semiconductor and personal computer industries. Micron
Technology, Inc., a leading manufacturer of dynamic random access
memory semiconductors (DRAMs), was purchased after the stock fell
from a high of nearly $100 to $30 per share. Capacity additions,
coupled with lower demand from excess inventories in the personal
computer industry, have caused 4 Meg DRAM prices to erode from a
high of $18 to $4 over the last six months. We view the current
imbalance in supply/demand as temporary and expect a resumption of
growth in the second half of the calendar year as Microsoft Corp.'s
new server, NT, is introduced. Micron is also shifting its
production from 4 Meg to 16 Meg DRAMs and the crossover point should
be sometime in mid-1996. At a price/earnings ratio of less than 10
times 1996 expected earnings per share, we believe the stock has
discounted much of the negative news and has attractive risk/reward
characteristics.
Other out-of-favor semiconductor stocks purchased were Texas
Instruments, Inc. and VLSI Technology, Inc. which was subsequently
sold at a profit. Also purchased in the April quarter was Apple
Computer, Inc., following the announcement that Gil Amelio, former
Chairman and Chief Executive Officer (CEO) of National Semiconductor
Corp., would be its new CEO. Apple has suffered from declining
market share and mounting losses as it attempted to retain premium
pricing for its proprietary Macintosh operating system. In a market
dominated primarily by Microsoft Windows and Intel Pentium chips,
Apple has failed to develop a strategy which will allow it to
compete for market share in a world of increasing pricing
competition. We expect Mr. Amelio to streamline the cost structure,
take financial charges for obsolete inventory, and outline a plan
for Apple to license its operating system to outside vendors.
Although it will be some time before the company returns to
profitability, we view the shares as discounting much of the bad
news, and believe over time Apple will regain much of its lost
luster as a preeminent designer of personal computers. Other stocks
purchased in the quarter included Fingerhut Companies, Inc.,
Giddings & Lewis, Inc., Hanson PLC, PFF Bancorp Inc., Reebok
International Ltd. and The Seagram Company Ltd.
<PAGE>
We eliminated eight positions in the April quarter, all at sizable
gains, primarily because they reached our price targets. Swift
Energy Co. was sold with a 53% gain following the run-up in oil
prices. MCI Communications Corp. was sold with a 35% gain following
the passing of the Telecommunications Act of 1996. Other sales
included Bay Apartment Communities, Inc., COMSAT Corporation, Darden
Restaurants, Inc., Foundation Health Corp., NationsBank Corp. and
Norwest Corp.
Recently, the US Government reported the US economy grew at a much
greater-than-expected 2.8% rate for the first quarter. Looking
ahead, we believe we are well-positioned if the economy continues to
accelerate. We will continue to look for out-of-favor stocks that
fit our strict valuation parameters for investment.
Merrill Lynch Global Opportunity
Portfolio
As of April 30, 1996, the asset allocation for Merrill Lynch Global
Opportunity Portfolio was: foreign stocks, 29%; US stocks, 38%;
foreign bonds, 9%; US bonds, 5%; and cash, 19%. We reduced the
proportion of assets allocated to high-yield US bonds from 14% to 5%
of net assets during the three months ended April 30, 1996. This
reduction reflected our evolving perception that the US economy was
somewhat stronger than it previously appeared. In such an
environment, it seemed less likely that the Federal Reserve Board
would undertake a further easing of monetary policy in the coming
months. On this basis, we believed that interest rates on US bonds
could back up further over the near-to-intermediate term.
In the foreign bond sector, our caution over prospects in the United
States led us to eliminate the Portfolio's allocation in Canadian
bonds. We also sold our commitment in UK bonds because of rising
political uncertainty. Positions were initiated in German
obligations with a two-year--three-year maturity range. These
commitments should exhibit appreciation in response to anticipated
further interest rate reductions by the Bundesbank. We have hedged
the German bond commitments back into US dollars as we believe that
the Deutschemark could exhibit further weaknesses versus the US
dollar.
We also established a position in the higher-yielding European bond
markets, namely, Italy, Spain and Sweden, with commitments in bonds
in the two-year--five-year maturity range. The return on these bonds
could be enhanced by the convergence of yields in these markets with
those in Germany as a result of a weak German economy and an
accommodative monetary policy by the Bundesbank. This policy should
allow for interest rate cuts by the central banks of Italy, Spain
and Sweden and enable their currencies to strengthen versus the
Deutschemark.
<PAGE>
After the restructuring of the US holdings undertaken in late 1995,
we have been gradually increasing the commitment to US equities. In
selecting new positions, we have emphasized companies which have
dominant positions in their industries, are either in the midst of
or have completed restructuring programs, and represent attractive
values. Examples of new positions in restructured companies which
enjoy dominant franchises within their respective industries are
American Express Company and Deere & Company. We also added Delta
Air Lines, Inc., which is in the process of restructuring. Our other
major area of expansion was in technology companies. New positions
included cisco Systems, Inc., Oracle Corp. and INTEL Corporation.
These companies dominate their industries, and their shares have
weakened in recent months with no apparent deterioration in
fundamentals.
Japan remains the largest commitment in the foreign equity sector,
although the proportion of assets allocated to Japanese equities was
reduced from 11% of net assets to about 8.6%. Among the Japanese
holdings, the position in Mitsubishi Trust and Banking Corp. was
eliminated given the increased uncertainty concerning a positive
resolution of Japanese financial institutions' real estate problems.
We took advantage of a rising share price to eliminate the position
of SMC Corporation, and also sold the shares of Hitachi Cable Ltd. A
new position was initiated in Eisai Co., Ltd. We also continued to
hedge the Japanese equity holdings back into US dollars, reflecting
expectations of a further weakening of the yen versus the US dollar.
Within Europe, we added a number of commitments which seemed to
offer exceptional value consistent with a selective approach to
European equity markets. These commitments included Usinor-Sacilor
S.A. in France, and Finnlines OY and Nokia Corp. AB in Finland.
Representation in the markets of Asia outside of Japan and Latin
America were expanded. In Asia, we established a position in the
Korean market through the shares of Hyundai Engineering &
Construction Co., Ltd. We enlarged our commitment to Latin America
through the shares of Kimberly-Clark de Mexico, S.A. de C.V. and
Grupo Carso, S.A. de C.V. in Mexico. On balance, we expect the Asian
and Latin American markets to perform well in the coming months as a
result of improving economic prospects. In addition, we also
expanded our position in Canada by adding Magna International, Inc.
and Potash Corp. of Saskatchewan, Inc. to the Portfolio.
Merrill Lynch Growth
Opportunity Portfolio
Merrill Lynch Growth Opportunity Portfolio commenced operations with
an asset base of $2.6 million on February 2, 1996. Its net assets by
April 30, 1996 rose to $7.5 million. The start-up of the Portfolio
appears to have coincided with a general decline in the absolute and
relative stock price performance of the companies on which the
Portfolio is focused: large-capitalization, high-quality growth
companies. The Portfolio's average cash reserves were relatively
high during the quarter ended April 30, 1996 and equaled 14.5% of
net assets by April 30, 1996.
<PAGE>
The sectors of the stock market which produced the greatest absolute
and relative positive returns during the April quarter were
primarily cyclical, such as retailing, basic chemicals and metals,
including precious metals, industrial equipment, heavy machinery and
technology sectors. The Portfolio's primary focus is on large-
capitalization companies in the non-cyclical sectors of consumer and
commercial markets which we believe may provide consistent, above-
average growth in earnings and rates of return on investment. The
stock price valuations of these companies change over the short-term
and intermediate-term as investor sentiment shifts with respect to
the near-term earnings potential relative to alternative
investments. The stock prices of most companies in these sectors
declined during the April quarter. The primary reason for the
decline appears to have been the shift of investor focus away from
consumer and defensive securities to cyclical companies. Recent
dramatic increases in job creation have caused investors to
anticipate higher real economic growth and an acceleration of the
economic rebound evident in the first quarter of 1996. We think it
is possible that the year-to-date stock price appreciation of many
cyclical companies has already more than recognized the earnings
potential during the remainder of 1996 and into 1997.
In our opinion, the outlook for real growth of the US economy during
the remainder of 1996 and into 1997 is less than the +2.8% rate of
gain in the first quarter of 1996. First, a relatively high level of
consumer debt leverage needs to be moderated in order to support
consistently higher levels of consumer spending. Second, a
substantial rise in Federal tax refunds during the first quarter of
1996 appears to have boosted consumer spending on only a short-term
basis. Third, the substantial rise in long-term interest rates in
the April quarter has already caused a sharp downturn in the
refinancing of residential mortgages, which provided a boost to
household spending in recent times. Finally, recent surveys of
projected spending plans on new plant and equipment continue to
weaken and may turn down on a year-to-year comparison. All of these
factors suggest lower real growth and lower profits for cyclical
companies in many stock market sectors into which investors have
shifted funds.
As we mentioned, our primary focus is on companies where we expect
consistent and above-average growth in earnings regardless of the
overall level of general economic activity. The ten largest industry
sectors in the Portfolio at April quarter-end were pharmaceuticals,
computer software, financial services, household products,
beverages, information processing, banking and financial, insurance,
medical technology and cosmetics. These ten industry sectors
comprised 61.6% of net assets at the end of the April quarter. The
pharmaceuticals and computer software sectors totaled 18% and 7.5%,
respectively, of net assets. The common shares of 51 companies were
represented in the Portfolio.
<PAGE>
Four companies were purchased and eliminated from the Portfolio
during the April quarter. CUC International, Inc. was sold at a
capital loss after senior management's announcement of the
simultaneous acquisitions of an educational software developer and a
leading entertainment software developer. In our opinion, these
acquisitions are too expensive and increase the risk characteristics
of the future operations of CUC International. In addition,
management did not submit these acquisitions for CUC International's
shareholder approval. Mattel, Inc. was sold at a capital loss
subsequent to recent disclosures of lawsuits by its former
executives. Toys 'R' Us, Inc. and Primark Corporation were
eliminated with capital gains as a result of relatively high
valuations. Several of the companies in the Portfolio experiencing
meaningful price appreciation in the April quarter were Microsoft
Corp., Oracle Corp., and Travelers/Aetna Property Casualty Corp.
We plan to reduce the Portfolio's cash position further in the
upcoming quarter as the absolute and relative declines of the stock
prices in many of the growth companies in the Portfolio have created
what we believe to be attractive investment opportunities.
Merrill Lynch Quality Bond Portfolio
The US economy showed surprising strength in the first quarter of
1996 growing at a faster-than-expected 2.8% rate as it shrugged off
the effects of a harsh winter, a Government shutdown and a strike at
General Motors Corp. Chain store sales bounced, industrial prices
rallied and the Labor Department reported the largest jump in
employment in 12 years. Investors are now concerned about the
possibility of stronger inflation figures forcing interest rates up.
The intensity of this reversal of opinion from the fourth quarter of
1995 surprised investors, whose anxiety was further aggravated by
the loss of the Congressional focus on Federal budget balancing.
Bond investors fled down the yield curve by initiating selling
programs and adopting defensive strategies. Their actions pushed the
yield on the bellwether long-term US Treasury bond from just over
6.00% up to almost 7.00% during the April quarter, and went over
7.00% in the first week of May.
To seek to protect the Portfolio from the drop in bond prices during
this period, we shortened the average portfolio maturity duration
from 5.32 years to 4.27 years. This was accomplished by trading down
the yield curve and by building the Portfolio's cash reserve
position from 14% of net assets to 20% by April quarter-end. There
were no significant changes in the sector or quality
classifications, and we remain underweighted in utilities and
financial institutions and slightly overweighted in Yankee bonds.
<PAGE>
Merrill Lynch US Government
Securities Portfolio
Economic activity rebounded in the first quarter of 1996 from the
anemic levels of 1995. Gross domestic product (GDP) grew at an
annual rate of 2.8% in the first quarter, which compares favorably
with the 1.3% rate attained in 1995. While the direction of the
economy is still uncertain, recent indicators initially confirm that
the Federal Reserve Board successfully engineered a soft landing of
the economy in 1995. GDP expanded at less than 1% in three quarters
in 1995 but never contracted to recessional levels. Recession was
avoided even though the Index of Leading Economic Indicators (LEI)
was positive only three months during the year.
The issue which investors face currently is the ability for the
economy to sustain the pace of growth recently achieved. Evidence of
expansion appears to be widespread throughout many economic sectors.
In manufacturing, the February 1996 increase in industrial
production of 1.3% was the largest in nine years, and the National
Association of Purchasing Managers survey reported expansionary
conditions in April. This follows eight consecutive reports
indicating contracting conditions. Consumer activity, which accounts
for two-thirds of GDP, is also picking up. Retail sales increased in
the past five months, and consumer confidence is currently at a six-
year high. Furthermore, personal income gains have taken place, and
flows of assets into mutual funds are at record levels. The
unemployment rate of 5.4% is at its lowest level since 1990. This,
together with recent dramatic increases in non-farm payrolls,
enables consumers to be more comfortable with the current economic
environment.
Pricing is another topic which reveals healthy economic conditions
in the United States. Inflation to date remains tame by historical
standards. For the first quarter of 1996, producer prices increased
at a very tolerable rate of 2.5% and consumer prices slightly more.
The revival of economic activity proved to be a difficult investment
environment in the Portfolio's April quarter. Fixed-income
investors, fearing the renewed economic activity may ignite
inflationary pressures, pushed interest rates dramatically higher
for the period. The most damage occurred in the two-year--ten-year
maturity sectors, which increased an average of 114 basis points
(1.14%). The 30-year Treasury bond rose 88 basis points to close the
quarter at 6.90%. All Treasury securities with maturities two years
and longer exhibited negative total returns. Short-term interest
rates increased less than their longer maturity counterparts. For
example, the three-month Treasury bill, widely viewed as sensitive
to the Federal Reserve Board's monetary policy activity, was fairly
mute, rising only 11 basis points. The Federal Reserve Board did not
alter monetary policy during the quarter but did ease the Federal
Funds rate 0.25% on January 31, 1996.
<PAGE>
On a relative basis, mortgage-backed securities (MBS) performed in
exemplary fashion as yield spreads to their Treasury counterparts
narrowed. GNMA 7% mortgage-backed securities had a total return of
- -3.36% and outperformed the ten-year Treasury note in excess of 300
basis points. Furthermore, the Treasury 5-year note returned -3.46%
for the quarter while 15-year FNMA 7% only declined 1.49%. The move
to higher interest rates took away much of the prepayment
uncertainty associated with MBS. In January 1996, 98% of the pass-
through market was priced above 99, whereby quarter-end 80% was
priced below par. As such, the superior coupon flow available in MBS
attracted investors to this sector.
Even though the selloff of the April quarter results in a
fundamentally attractive market currently, it is premature to assume
an imminent turnaround in the market. Rates of return in excess of a
2% inflation assumption are currently 400 basis points--500 basis
points, a very attractive level. However, the risk that inflation
will accelerate is increasing. The Employment Cost Index is picking
up, which will put pressure on prices, and the economic activity of
the recent quarter essentially terminates the pattern of Federal
Reserve Board easing for the foreseeable future. In addition, the
usual political uncertainty could continue to impact the markets as
positioning for the fall Presidential general election takes hold.
During the April quarter, the Portfolio maintained its high exposure
to the MBS market established previously. Going into the three-month
period ended April 30, 1996, the Portfolio was positioned with less
than neutral duration as there appeared to be limited upside
potential at that time. This proved to be advantageous to
shareholders as the bond market proceeded to sell off. As the
quarter progressed, we gradually added duration to the Portfolio in
order to participate in any market reversal which took place. This
was achieved primarily with the addition of FHLMC Gold 7% MBS. The
average underlying mortgage rate of these securities is
approximately 7.62% and is not susceptible to refinance from an
economic perspective given the current level of mortgage rates.
Accordingly, the call-protected characteristics of this security
enables it to increase in value in a rally and yet provide an
attractive current yield. The Portfolio has an 85% position in MBS
which, as noted above, had superior relative performance for the
quarter. US Treasury notes totaled 11% of the Portfolio's net assets
with the remaining 4% in cash.
<PAGE>
In Conclusion
We appreciate your ongoing interest in Merrill Lynch Asset Builder
Program, Inc., and we look forward to assisting you with your
investment needs in the months and years to come.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Kevin M. Rendino)
Kevin M. Rendino
Vice President and Portfolio Manager
Merrill Lynch Fundamental Value
Portfolio
(Joel Heymsfeld)
Joel Heymsfeld
Vice President and Portfolio Manager
Merrill Lynch Global Opportunity
Portfolio
(Lawrence R. Fuller)
Lawrence R. Fuller
Vice President and Portfolio Manager
Merrill Lynch Growth Opportunity
Portfolio
(Jay C. Harbeck)
Jay C. Harbeck
Vice President and Portfolio Manager
Merrill Lynch Quality Bond Portfolio
(Gregory Mark Maunz)
Gregory Mark Maunz
Vice President and Portfolio Manager
Merrill Lynch US Government
Securities Portfolio
<PAGE>
June 4, 1996
PERFORMANCE DATA
About Fund Performance
Investors are able to purchase shares of the Program through the
Merrill Lynch Select Pricing SM System, which offers four pricing
alternatives:
* Class A Shares incur a maximum initial sales charge (front-end
load) of 5.25% and bear no ongoing distribution or account
maintenance fees for Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios. Quality Bond and US Government
Securities Portfolios incur a maximum initial sales charge (front-
end load) of 4% and bear no ongoing distribution or account
maintenance fees. Class A Shares are available only to eligible
investors.
* Class B Shares are subject to a maximum contingent deferred sales
charge of 4% if redeemed during the first year, decreasing 1% each
year thereafter to 0% after the fourth year for Fundamental Value,
Global Opportunity, Growth Opportunity, Quality Bond and US
Government Securities Portfolios. In addition, Quality Bond and US
Government Securities Portfolios are subject to a distribution fee
of 0.50% and an account maintenance fee of 0.25%. Fundamental Value,
Global Opportunity and Growth Opportunity Portfolios are subject to
a 0.75% distribution fee and a 0.25% account maintenance fee.
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios automatically convert to Class D Shares after
approximately 8 years. Quality Bond and US Government Securities
Portfolios automatically convert to Class D Shares after
approximately 10 years.
* Class C Shares are subject to a distribution fee of 0.55% and an
account maintenance fee of 0.25% for Quality Bond and US Government
Securities Portfolios. Fundamental Value, Global Opportunity and
Growth Opportunity Portfolios are subject to a distribution fee of
0.75% and an account maintenance fee of 0.25%. In addition, Class C
Shares are subject to a 1% contingent deferred sales charge if
redeemed within one year of purchase.
<PAGE>
* Class D Shares incur a maximum initial sales charge of 5.25% and
an account maintenance fee of 0.25% (but no distribution fee) for
Fundamental Value, Global Opportunity and Growth Opportunity
Portfolios. Quality Bond and US Government Securities Portfolios
incur a maximum initial sales charge of 4% and an account
maintenance fee of 0.25% (but no distribution fee).
None of the past results shown should be considered a represen-
tation of future performance. Investment return and principal value
of shares will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. Dividends paid to each class
of shares will vary because of the different levels of account
maintenance, distribution and transfer agency fees applicable to
each class, which are deducted from the income available to be paid
to shareholders.
PERFORMANCE DATA (continued)
Aggregate
Total Returns--
Growth
Opportunity
Portfolio
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Inception (2/02/96) to 3/31/96 - 0.20% - 5.44%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Inception (2/02/96) to 3/31/96 - 0.40% - 4.38%
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Inception (2/02/96) to 3/31/96 - 0.40% - 1.40%
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Inception (2/02/96) to 3/31/96 - 0.30% - 5.53%
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Average Annual
Total Returns--
Fundamental
Value Portfolio
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +21.64% +15.26%
Inception (2/01/95) to 3/31/96 +22.84 +17.27
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +20.52% +16.52%
Inception (2/01/95) to 3/31/96 +21.67 +19.16
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/96 +20.52% +19.52%
Inception (2/01/95) to 3/31/96 +21.67 +21.67
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/96 +21.57% +15.18%
Inception (2/01/95) to 3/31/96 +22.67 +17.11
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
<PAGE>
Average Annual
Total Returns--
Global
Opportunity
Portfolio
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +10.26% +4.47%
Inception (2/01/95) to 3/31/96 + 9.61 +4.64
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +9.12% +5.12%
Inception (2/01/95) to 3/31/96 +8.45 +5.90
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/96 +9.04% +8.04%
Inception (2/01/95) to 3/31/96 +8.39 +8.39
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/96 +10.02% +4.25%
Inception (2/01/95) to 3/31/96 + 9.32 +4.36
[FN]
*Maximum sales charge is 5.25%.
**Assuming maximum sales charge.
Average Annual
Total Returns--
Quality Bond
Portfolio
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +5.23% +1.02%
Inception (2/01/95) to 3/31/96 +5.38 +1.74
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 +4.45% +0.50%
Inception (2/01/95) to 3/31/96 +4.43 +1.86
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/96 +4.38% +3.39%
Inception (2/01/95) to 3/31/96 +4.36 +4.36
<PAGE>
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/96 +5.09% +0.89%
Inception (2/01/95) to 3/31/96 +5.05 +1.42
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
Average Annual
Total Returns--
US Government
Securities
Portfolio
% Return Without % Return With
Sales Charge Sales Charge**
Class A Shares*
Year Ended 3/31/96 +10.46% +6.04%
Inception (2/01/95) to 3/31/96 +11.84 +7.98
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
% Return % Return
Without CDSC With CDSC**
Class B Shares*
Year Ended 3/31/96 + 9.55% +5.55%
Inception (2/01/95) to 3/31/96 +10.95 +8.40
[FN]
*Maximum contingent deferred sales charge is 4% and is reduced to 0%
after 4 years.
**Assuming payment of applicable contingent deferred sales charge.
<PAGE>
% Return % Return
Without CDSC With CDSC**
Class C Shares*
Year Ended 3/31/96 + 9.49% + 8.49%
Inception (2/01/95) to 3/31/96 +10.89 +10.89
[FN]
*Maximum contingent deferred sales charge is 1% and is reduced to 0%
after 1 year.
**Assuming payment of applicable contingent deferred sales charge.
% Return Without % Return With
Sales Charge Sales Charge**
Class D Shares*
Year Ended 3/31/96 +10.13% +5.72%
Inception (2/01/95) to 3/31/96 +11.62 +7.76
[FN]
*Maximum sales charge is 4%.
**Assuming maximum sales charge.
PERFORMANCE DATA (concluded)
<PAGE>
<TABLE>
Recent
Performance
Results
<CAPTION>
Standardized
12 Month 3 Month 30-day Yield
4/30/96 1/31/96 4/30/95 % Change % Change As of 4/30/96
<S> <C> <C> <C> <C> <C> <C>
Fundamental Value Portfolio Class A Shares $12.91 $11.67 $10.73 +20.32% +10.63% --
Fundamental Value Portfolio Class B Shares 12.75 11.55 10.70 +19.16 +10.39 --
Fundamental Value Portfolio Class C Shares 12.75 11.55 10.70 +19.16 +10.39 --
Fundamental Value Portfolio Class D Shares 12.89 11.65 10.72 +20.24 +10.64 --
Global Opportunity Portfolio Class A Shares 10.97 10.82 10.30 + 6.50 + 1.39 --
Global Opportunity Portfolio Class B Shares 10.90 10.76 10.27 + 6.13 + 1.30 --
Global Opportunity Portfolio Class C Shares 10.89 10.75 10.27 + 6.04 + 1.30 --
Global Opportunity Portfolio Class D Shares 10.96 10.80 10.29 + 6.51 + 1.48 --
Growth Opportunity Portfolio Class A Shares 9.98 10.00++ -- -- - 0.20++ --
Growth Opportunity Portfolio Class B Shares 9.96 10.00++ -- -- - 0.40++ --
Growth Opportunity Portfolio Class C Shares 9.96 10.00++ -- -- - 0.40++ --
Growth Opportunity Portfolio Class D Shares 9.98 10.00++ -- -- - 0.20++ --
Quality Bond Portfolio Class A Shares 9.76 10.27 10.00 - 2.40 - 4.97 6.10%
Quality Bond Portfolio Class B Shares 9.76 10.27 9.99 - 2.30 - 4.97 5.61
Quality Bond Portfolio Class C Shares 9.75 10.27 9.99 - 2.40 - 5.06 5.49
Quality Bond Portfolio Class D Shares 9.76 10.27 9.99 - 2.30 - 4.97 5.93
US Government Securities Portfolio Class A Shares 10.15 10.48 10.21 - 0.59 - 3.15 6.69
US Government Securities Portfolio Class B Shares 10.15 10.48 10.21 - 0.59 - 3.15 6.21
US Government Securities Portfolio Class C Shares 10.15 10.47 10.21 - 0.59 - 3.06 6.16
US Government Securities Portfolio Class D Shares 10.16 10.48 10.21 - 0.49 - 3.05 6.44
Fundamental Value Portfolio Class A Shares--Total Return +23.82(1) +10.63 --
Fundamental Value Portfolio Class B Shares--Total Return +22.66(1) +10.39 --
Fundamental Value Portfolio Class C Shares--Total Return +22.66(1) +10.39 --
Fundamental Value Portfolio Class D Shares--Total Return +23.75(1) +10.64 --
Global Opportunity Portfolio Class A Shares--Total Return + 9.40(2) + 1.39 --
Global Opportunity Portfolio Class B Shares--Total Return + 8.39(3) + 1.30 --
Global Opportunity Portfolio Class C Shares--Total Return + 8.31(4) + 1.30 --
Global Opportunity Portfolio Class D Shares--Total Return + 9.27(5) + 1.48 --
Growth Opportunity Portfolio Class A Shares--Total Return -- - 0.20++ --
Growth Opportunity Portfolio Class B Shares--Total Return -- - 0.40++ --
Growth Opportunity Portfolio Class C Shares--Total Return -- - 0.40++ --
Growth Opportunity Portfolio Class D Shares--Total Return -- - 0.20++ --
Quality Bond Portfolio Class A Shares--Total Return + 4.03(6) - 3.39(7) --
Quality Bond Portfolio Class B Shares--Total Return + 3.36(8) - 3.59(9) --
Quality Bond Portfolio Class C Shares--Total Return + 3.17(10) - 3.71(11) --
Quality Bond Portfolio Class D Shares--Total Return + 4.00(12) - 3.44(13) --
US Government Securities Portfolio Class A Shares--Total Return + 9.22(14) - 1.51(15) --
US Government Securities Portfolio Class B Shares--Total Return + 8.32(16) - 1.71(17) --
US Government Securities Portfolio Class C Shares--Total Return + 8.26(18) - 1.63(19) --
US Government Securities Portfolio Class D Shares--Total Return + 9.05(20) - 1.47(21) --
<PAGE>
<FN>
++The Growth Opportunity Portfolio commenced operations on 2/02/96.
*Investment results shown do not reflect sales charges; results
shown would be lower if a sales charge was included.
(1)Percent change includes reinvestment of $0.337 per share
ordinary income dividends.
(2)Percent change includes reinvestment of $0.288 per share
ordinary income dividends.
(3)Percent change includes reinvestment of $0.224 per share
ordinary income dividends.
(4)Percent change includes reinvestment of $0.226 per share
ordinary income dividends.
(5)Percent change includes reinvestment of $0.274 per share
ordinary income dividends.
(6)Percent change includes reinvestment of $0.641 per share
ordinary income dividends.
(7)Percent change includes reinvestment of $0.164 per share
ordinary income dividends.
(8)Percent change includes reinvestment of $0.555 per share
ordinary income dividends.
(9)Percent change includes reinvestment of $0.142 per share
ordinary income dividends.
(10)Percent change includes reinvestment of $0.547 per share
ordinary income dividends.
(11)Percent change includes reinvestment of $0.140 per share
ordinary income dividends.
(12)Percent change includes reinvestment of $0.616 per share
ordinary income dividends.
(13)Percent change includes reinvestment of $0.157 per share
ordinary income dividends.
(14)Percent change includes reinvestment of $0.988 per share
ordinary income dividends.
(15)Percent change includes reinvestment of $0.173 per share
ordinary income dividends.
(16)Percent change includes reinvestment of $0.901 per share
ordinary income dividends.
(17)Percent change includes reinvestment of $0.151 per share
ordinary income dividends.
(18)Percent change includes reinvestment of $0.895 per share
ordinary income dividends.
(19)Percent change includes reinvestment of $0.150 per share
ordinary income dividends.
(20)Percent change includes reinvestment of $0.962 per share
ordinary income dividends.
(21)Percent change includes reinvestment of $0.166 per share
ordinary income dividends.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Fundamental Value Portfolio
LATIN Percent of
AMERICA Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Argentina Oil--International 35,000 Yacimientos Petroliferos Fiscales
S.A. (Sponsored) (ADR)* $ 639,025 $ 765,625 1.9%
Total Investments in Argentina 639,025 765,625 1.9
Total Investments in Latin America 639,025 765,625 1.9
NORTH
AMERICA
United Athletic Footwear 15,000 Reebok International Ltd. 409,286 435,000 1.1
States
Auto-Related 49,500 National Auto Credit, Inc. 496,084 705,375 1.7
Automotive 10,000 Ford Motor Co. 266,380 358,750 0.9
10,000 General Motors Corp. 422,423 542,500 1.3
----------- ----------- ------
688,803 901,250 2.2
Banking 15,000 Bankers Trust New York Corp. 955,408 1,040,625 2.5
Beverage & 10,000 The Seagram Company Ltd. 331,538 338,750 0.8
Entertainment
Cable 60,000 Century Communications Corp. 502,500 577,500 1.4
Capital Goods 5,000 Eaton Corp. 259,915 302,500 0.7
Chemicals 7,000 Olin Corp. 506,329 619,500 1.5
Conglomerates 40,000 ADT Ltd. 477,625 680,000 1.7
Environmental 100,000 Allwaste Inc. 550,879 437,500 1.1
Services
Farm & Construction 10,000 Deere & Co. 288,150 388,750 1.0
Equipment 50,000 Giddings & Lewis, Inc. 778,310 918,750 2.2
----------- ----------- ------
1,066,460 1,307,500 3.2
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Fundamental Value Portfolio (concluded)
NORTH Percent of
AMERICA Industries Shares Held Investments Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Financial Services 13,000 Student Loan Marketing Association $ 666,905 $ 952,250 2.3%
States
(concluded) Home Builders 30,000 Beazer Homes USA, Inc. 489,300 480,000 1.2
Hotels 45,000 John Q. Hammons Hotels, Inc. 548,518 528,750 1.3
Information 17,500 Apple Computer, Inc. 415,053 422,188 1.0
Processing 10,000 International Business Machines Corp. 934,148 1,075,000 2.6
66,200 Tandem Computers, Inc. 729,504 844,050 2.1
----------- ----------- ------
2,078,705 2,341,238 5.7
Insurance 15,000 TIG Holdings, Ltd. 339,105 455,625 1.1
Medical Services 82,500 Applied Bioscience International Inc. 443,249 732,187 1.8
Metals--Non-Ferrous 20,000 ASARCO Inc. 554,351 662,500 1.6
Oil Refiners 60,000 Total Petroleum (North America) Ltd. 683,773 735,000 1.8
Oil--Domestic 45,000 American Exploration Co. 486,675 556,875 1.4
40,000 Occidental Petroleum Corp. 888,025 1,030,000 2.5
----------- ----------- ------
1,374,700 1,586,875 3.9
Oil--Related 40,000 TETRA Technologies, Inc. 503,525 785,000 1.9
Paper & Forest 22,000 International Paper Co. 840,728 877,250 2.1
Products
Pharmaceuticals 8,000 Bristol-Myers Squibb Co. 575,570 658,000 1.6
Photography 8,000 Eastman Kodak Co. 555,080 612,000 1.5
Real Estate 20,000 Camden Property Trust 450,613 475,000 1.2
Investment Trusts 20,000 Evans Withycombe Residential, Inc. 398,095 432,500 1.1
25,000 FelCor Suite Hotels, Inc. 662,500 728,125 1.8
----------- ----------- ------
1,511,208 1,635,625 4.1
Retail 130,000 Charming Shoppes, Inc. 481,193 828,750 2.0
25,000 Dillard Department Stores Inc. 682,325 1,003,125 2.5
30,000 Fingerhut Companies, Inc. 387,486 382,500 0.9
60,000 Woolworth Corp. 773,036 1,147,500 2.8
----------- ----------- ------
2,324,040 3,361,875 8.2
<PAGE>
Savings & Loans 62,500 Greater New York Savings Bank 602,567 687,500 1.7
40,000 Klamath First Bancorp, Inc. 519,485 550,000 1.3
36,000 PFF Bancorp Inc. 414,000 409,500 1.0
20,000 Washington Mutual Savings Bank 417,984 555,000 1.4
----------- ----------- ------
1,954,036 2,202,000 5.4
Semiconductors 15,000 Micron Technology, Inc. 505,250 545,625 1.3
35,000 National Semiconductor Corp. 671,098 551,250 1.3
10,000 Texas Instruments, Inc. 504,053 565,000 1.4
----------- ----------- ------
1,680,401 1,661,875 4.0
Steel 40,000 Lone Star Technologies, Inc. 389,400 480,000 1.2
20,000 USX-US Steel Group 623,727 660,000 1.6
55,000 WHX Corp. 592,117 632,500 1.5
----------- ----------- ------
1,605,244 1,772,500 4.3
Technology 60,000 Computervision Corp. 671,373 727,500 1.8
45,000 Exabyte Corp. 630,075 776,250 1.9
113,400 Micronics Computers, Inc. 483,469 311,850 0.8
37,700 Storage Technology Corp. 907,773 1,159,275 2.8
70,000 SyQuest Technology, Inc. 570,681 437,500 1.1
30,000 Western Digital Corp. 513,861 705,000 1.7
----------- ----------- ------
3,777,232 4,117,375 10.1
Textiles 47,600 Burlington Industries, Inc. 555,417 553,350 1.4
Total Investments in the
United States 29,305,914 34,056,775 83.2
Total Investments in North America 29,305,914 34,056,775 83.2
WESTERN
EUROPE
United Conglomerates 40,000 Hanson PLC (Sponsored) (ADR)* 597,400 605,000 1.5
Kingdom
Total Investments in the
United Kingdom 597,400 605,000 1.5
Total Investments in Western Europe 597,400 605,000 1.5
<PAGE>
SHORT-TERM Face
SECURITIES Amount Issue
Commercial US$ 775,000 General Electric Capital Corp.,
Paper** 5.35% due 5/01/1996 775,000 775,000 1.9
2,000,000 Penney (J.C.) Funding Corp., 5.28%
due 6/06/1996 1,989,440 1,989,440 4.9
US Government 2,870,000 Federal National Mortgage
& Agency Association, 5.17% due 5/17/1996 2,863,405 2,863,405 7.0
Obligations**
Total Investments in Short-Term
Securities 5,627,845 5,627,845 13.8
Total Investments $36,170,184 41,055,245 100.4
===========
Liabilities in Excess of Other Assets (166,413) (0.4)
----------- ------
Net Assets $40,888,832 100.0%
=========== ======
Net Asset Class A--Based on net assets of $144,825 and
Value: 11,214 shares outstanding $ 12.91
===========
Class B--Based on net assets of $26,783,750 and
2,100,805 shares outstanding $ 12.75
===========
Class C--Based on net assets of $10,667,222 and
836,895 shares outstanding $ 12.75
===========
Class D--Based on net assets of $3,293,035 and
255,561 shares outstanding $ 12.89
===========
<FN>
*American Depositary Receipts (ADR).
**Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
rates paid at the time of purchase by the Portfolio.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Global Opportunity Portfolio
Face Percent of
COUNTRY Industries Amount* Corporate Bonds Cost Value Net Assets
<S> <S> <S> <C> <S> <C> <C> <C>
United Broadcasting & US$ 125,000 The Katz Corp., 12.75% due 11/15/2002 $ 129,625 $ 138,750 0.5%
States Publishing
Business 356,000 Bell Cablemedia PLC, 11.875% due
Publishing 9/15/2005 (a) 214,917 232,290 0.8
Chemicals 94,000 G-I Holdings Inc., 11.64% due
10/01/1998 (a) 71,452 74,260 0.2
Communications 300,000 PanAmSat L.P., 11.08% due
8/01/2003 (a) 230,908 255,750 0.8
Consumer Products 280,000 Coleman Holdings, Inc., 9.96% due
5/27/1998 (a) 225,197 233,100 0.8
Energy 250,000 Oleoducts Central S.A., 9.35% due
9/01/2005 250,000 244,375 0.8
Entertainment 100,000 Marvel III Holdings, Inc., 9.125%
due 2/15/1998 93,500 90,000 0.3
Industrial--Energy 100,000 TransTexas Gas Corp., 11.50% due
6/15/2002 100,000 100,000 0.3
Metal & Mining 50,000 Kaiser Aluminum & Chemical Corp.,
12.75% due 2/01/2003 52,250 53,625 0.2
Utilities 95,000 Beaver Valley Funding Co., 8.625%
due 6/01/2007 77,900 84,494 0.3
100,000 CTC Mansfield Funding Corp., 11.125%
due 9/30/2016 98,750 102,378 0.3
----------- ----------- ------
176,650 186,872 0.6
Total Corporate Bonds in the
United States 1,544,499 1,609,022 5.3
Total Investments in Corporate
Bonds 1,544,499 1,609,022 5.3
Foreign Government Obligations
Germany DM 800,000 Bundes-Obligation, 6% due
2/20/1998 563,631 542,727 1.8
800,000 Treuhand-Obligation, 5% due
1/14/1999 553,388 533,406 1.8
----------- ----------- ------
1,117,019 1,076,133 3.6
<PAGE>
Italy Buoni Poliennali del Tesoro
(Italian Government Bonds):
Lit 350,000,000 9.50% due 2/01/1999 223,829 227,665 0.7
350,000,000 9.50% due 2/01/2001 220,888 227,621 0.7
----------- ----------- ------
444,717 455,286 1.4
Spain Government of Spain:
Pta 35,000,000 7.40% due 7/30/1999 271,080 269,486 0.9
35,000,000 8.40% due 4/30/2001 272,681 273,662 0.9
----------- ----------- ------
543,761 543,148 1.8
Sweden Government of Sweden:
Skr 1,600,000 11% due 1/21/1999 262,381 258,539 0.9
1,600,000 10.25% due 5/05/2003 261,718 259,199 0.9
----------- ----------- ------
524,099 517,738 1.8
Total Investments in Foreign
Government Obligations 2,629,596 2,592,305 8.6
Total Investments in Corporate
Bonds and Foreign Government
Obligations 4,174,095 4,201,327 13.9
Shares Held US Stocks
United Aerospace & Defense 4,700 Boeing Company (The) 374,731 385,988 1.3
States
2,500 United Technologies Corporation 174,848 276,250 0.9
----------- ----------- ------
549,579 662,238 2.2
Air Transport 4,725 Delta Air Lines, Inc. 378,109 379,772 1.2
Appliances 5,000 Singer Co. N.V. (b) 133,934 129,375 0.4
Automobiles 6,400 Ford Motor Co. 178,563 229,600 0.8
3,950 General Motors Corp. 215,034 222,681 0.7
----------- ----------- ------
393,597 452,281 1.5
<PAGE>
Banking 7,000 Bank of New York Company, Inc. (The) 348,664 339,500 1.1
5,300 Citicorp 411,841 417,375 1.4
----------- ----------- ------
760,505 756,875 2.5
Building Products 10,000 Spieker Properties, Inc. 263,505 260,000 0.9
Computer Sales 1,700 International Business Machines Corp. 186,823 182,750 0.6
Computer Services 3,800 cisco Systems, Inc. 169,246 197,125 0.6
Consumer--Durables 4,000 Whirlpool Corporation 230,820 240,500 0.8
Consumer--Electronics 6,500 Dell Computer Corp. 255,343 298,188 1.0
Diversified 7,500 Corning Inc. 228,519 260,625 0.9
Electrical Equipment 5,300 General Electric Company PLC 412,114 410,750 1.4
Electronic/Instruments 4,400 Texas Instruments Inc. 235,342 248,600 0.8
Electronics 4,200 INTEL Corporation 269,457 284,550 0.9
3,500 Lexmark International Group,
Inc. (Class A) 74,474 75,688 0.3
----------- ----------- ------
343,931 360,238 1.2
Engineering & 7,000 Foster Wheeler Corporation 305,063 323,750 1.1
Construction
Farm Equipment 8,600 Deere & Company 359,363 334,325 1.1
Financial Services 6,550 American Express Company 304,845 317,675 1.0
4,500 First Data Corp. 318,894 342,000 1.1
----------- ----------- ------
623,739 659,675 2.1
Hardware Products 4,500 Stanley Works (The) 180,743 282,375 0.9
Health Care--HMOs 10,000 Humana Inc. 212,450 246,250 0.8
Hospital Supplies 8,000 Abbott Laboratories 309,061 325,000 1.1
Household Products 2,000 Procter & Gamble Company (The) 168,471 169,000 0.6
Insurance 3,650 Aetna Life & Casualty Company 275,913 260,063 0.9
5,600 Allstate Corp. 238,553 217,700 0.7
2,000 National Re Corp. 66,103 71,000 0.2
----------- ----------- ------
580,569 548,763 1.8
<PAGE>
Manufacturing 6,000 Fisher Scientific International Inc. 188,659 224,250 0.7
Natural Gas 8,200 Enron Corp. 312,036 330,050 1.1
Oil Service 8,500 Dresser Industries, Inc. 178,223 270,938 0.9
2,600 Schlumberger Ltd. 159,024 229,450 0.8
----------- ----------- ------
337,247 500,388 1.7
Petroleum 5,600 Pennzoil Company 224,031 247,800 0.8
Pharmaceuticals 6,600 Merck & Co., Inc. 341,733 399,300 1.3
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (continued)
Shares Percent of
COUNTRY Industries Held US Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
United Photography 3,000 Eastman Kodak Company $ 160,085 $ 229,500 0.8%
States
(concluded) Pollution Control 9,000 Wheelabrator Technologies Inc. 140,505 144,000 0.5
Railroads 1,300 Conrail, Inc. 91,059 90,675 0.3
Retail Trade 4,400 Sears, Roebuck & Co. 191,869 219,450 0.7
Semiconductor(s) 2,700 Applied Materials, Inc. 108,897 107,325 0.4
Software--Computer 900 Microsoft Corp. 100,855 101,812 0.3
5,775 Oracle Corp. (c) 187,683 194,184 0.6
----------- ----------- ------
288,538 295,996 0.9
Telecommunications 3,700 AT&T Corp. 191,509 226,625 0.7
3,600 Bell Atlantic Corporation 205,486 234,000 0.8
1,700 Lucent Technologies, Inc. 45,900 59,712 0.2
----------- ----------- ------
442,895 520,337 1.7
Tobacco 2,700 Philip Morris Companies, Inc. 262,364 243,337 0.8
Travel & Lodging 6,000 Carnival Corporation 169,534 174,000 0.6
Total Investments in US Stocks 10,540,278 11,454,863 37.8
Foreign Stocks
<PAGE>
Argentina Banking 8,380 Banco de Galicia y Buenos Aires
S.A. (ADR)** 138,163 196,930 0.6
7,750 Banco Frances del Rio de la
Plata S.A. (ADR)** 136,220 222,812 0.7
----------- ----------- ------
274,383 419,742 1.3
Oil & Gas 12,200 Yacimientos Petroliferos Fiscales
Producers S.A. (Sponsored) (ADR)** 246,219 266,875 0.9
Total Stocks in Argentina 520,602 686,617 2.2
Brazil Telecommunications 5,000 Telecomunicacoes Brasileiras S.A.--
Telebras PN (ADR)** 264,790 270,625 0.9
Total Stocks in Brazil 264,790 270,625 0.9
Canada Automotive Parts 6,300 Magna International, Inc. 286,282 292,163 1.0
Conglomerates 10,800 Canadian Pacific Limited (ADR)** 165,958 220,050 0.7
Fertilizers 3,200 Potash Corp. of Saskatchewan, Inc. 225,248 225,600 0.7
Telecommunications 4,800 Northern Telecom Ltd. 171,686 247,200 0.8
Equipment
Total Stocks in Canada 849,174 985,013 3.2
Finland Telecommunications 4,800 Nokia Corp. AB (ADR)** 176,141 174,600 0.6
Equipment
Transportation 6,000 Finnlines OY 110,784 104,072 0.3
Total Stocks in Finland 286,925 278,672 0.9
France Steel 7,300 Usinor-Sacilor S.A. 120,821 112,682 0.4
Tires 3,500 Compagnie Generale des Establissements
Michelin S.A. (Class B) 151,989 173,057 0.6
Total Stocks in France 272,810 285,739 1.0
<PAGE>
Germany Electronics 365 Siemens AG 179,177 199,595 0.7
Machinery & 550 Mannesmann AG 164,988 187,639 0.6
Equipment
Multi-Industry 700 Preussag AG 203,196 188,356 0.6
Total Stocks in Germany 547,361 575,590 1.9
Hong Kong Banking 13,200 HSBC Holdings PLC 209,537 197,091 0.6
Telecommuni- 9,000 Hong Kong Telecommunications Ltd.
cations (ADR)** 160,490 171,000 0.6
Total Stocks in Hong Kong 370,027 368,091 1.2
Indonesia Telecommuni- 6,000 P.T. Indonesian Satellite Corp.
cations (ADR)** 198,647 209,250 0.7
Total Stocks in Indonesia 198,647 209,250 0.7
Italy Telecommuni- 90,000 Societa Finanziara Telefonica
cations S.p.A. (STET) 257,700 303,609 1.0
Total Stocks in Italy 257,700 303,609 1.0
Japan Banking & Financial 8,000 Sanwa Bank, Ltd. 161,875 162,219 0.5
Building & 12,000 Maeda Corp. 133,874 128,551 0.4
Construction 15,000 Okumura Corp. 134,507 143,472 0.5
----------- ----------- ------
268,381 272,023 0.9
Capital Goods 21,000 Mitsubishi Heavy Industries, Ltd. 144,773 187,604 0.6
Consumer-- 3,000 Rohm Company Ltd. 141,942 191,105 0.6
Electronics
Electrical Equipment 19,000 Mitsubishi Electric Corp. 137,527 149,747 0.5
Electronics 9,000 Canon Inc. 146,432 179,053 0.6
12,000 Matsushita Electric Industrial
Co., Ltd. 181,717 212,339 0.7
----------- ----------- ------
328,149 391,392 1.3
Financial Services 6,000 Nomura Securities Co., Ltd. 122,069 130,846 0.4
<PAGE>
Insurance 13,000 Tokio Marine & Fire Insurance
Co., Ltd. 143,259 179,053 0.6
Pharmaceuticals 10,350 Eisai Co., Ltd. 189,770 204,921 0.7
Printing & 9,000 Dai Nippon Printing Co., Ltd. 144,952 169,584 0.6
Publishing
Textiles 22,000 Toray Industries Inc. 139,370 149,823 0.5
Trading 16,000 Kamigumi Co., Ltd. 136,552 165,280 0.5
13,000 Sumitomo Corp. 124,539 155,428 0.5
----------- ----------- ------
261,091 320,708 1.0
Warehouse & 14,000 Mitsui-Soko Co., Ltd. 114,393 120,249 0.4
Storage
Total Stocks in Japan 2,297,551 2,629,274 8.6
Mexico Beverages 4,300 Panamerican Beverages Inc. (ADR)** 171,010 188,662 0.6
Conglomerates 12,800 Grupo Carso, S.A. de C.V. (ADR)** 203,727 195,200 0.6
Paper & Forest 8,800 Kimberly-Clark de Mexico, S.A.
Producers de C.V. 155,145 160,140 0.5
Total Stocks in Mexico 529,882 544,002 1.7
Netherlands Electrical 4,700 Philips Electronics N.V. 179,161 165,676 0.5
Equipment
Oil--International 2,525 Royal Dutch Petroleum N.V. (ADR)** 329,469 361,706 1.2
Total Stocks in the Netherlands 508,630 527,382 1.7
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Global Opportunity Portfolio (concluded)
Shares Percent of
COUNTRY Industries Held Foreign Stocks Cost Value Net Assets
<S> <S> <C> <S> <C> <C> <C>
Philippines Beverages 60,000 San Miguel Corp. (Class B) $ 219,134 $ 188,361 0.6%
Telecommuni- 1,800 Philippine Long Distance Telephone
cations Co. (ADR)** 101,358 90,450 0.3
Total Stocks in the Philippines 320,492 278,811 0.9
<PAGE>
South Korea Engineering 4,900 Hyundai Engineering & Construction
& Construction Co., Ltd. (ADR)** 63,847 66,150 0.2
Total Stocks in South Korea 63,847 66,150 0.2
Spain Petroleum 4,800 Repsol S.A. (ADR)** 143,703 177,600 0.6
Total Stocks in Spain 143,703 177,600 0.6
Switzerland Electrical 150 BBC Brown Boveri & Cie (Bearer) 140,031 180,096 0.6
Equipment
Pharmaceuticals 3,000 Sandoz AG (ADR)** 129,917 163,500 0.5
Total Stocks in Switzerland 269,948 343,596 1.1
United Chemicals 3,500 Imperial Chemical Industries PLC
Kingdom (ADR)** 174,472 192,500 0.7
Electrical 30,000 General Electric Co. PLC (Ordinary) 152,915 161,519 0.5
Equipment
Total Stocks in the United Kingdom 327,387 354,019 1.2
Total Investments in Foreign Stocks 8,029,476 8,884,040 29.0
Total Investments in US & Foreign
Stocks 18,569,754 20,338,903 66.8
Face
Amount Short-Term Securities
Commercial US$ 1,000,000 Disney Enterprises Inc., 5.27% due
Paper*** 5/17/1996 997,658 997,658 3.3
83,000 General Electric Capital Corp.,
5.35% due 5/01/1996 83,000 83,000 0.3
1,000,000 National Australia Funding (Delaware)
Inc., 5.28% due 5/09/1996 998,827 998,827 3.3
1,000,000 PHH Corporation, 5.31% due 5/13/1996 998,230 998,230 3.3
1,000,000 Raytheon Company, 5.27% due 5/03/1996 999,707 999,707 3.3
1,450,000 Shell Oil Co., 5.30% due 5/02/1996 1,449,787 1,449,787 4.7
Total Investments in Commercial
Paper 5,527,209 5,527,209 18.2
<PAGE>
US Government & 165,000 Federal Farm Credit Bank, 5.17% due
Agency 5/22/1996 164,502 164,502 0.5
Obligations*** 35,000 Federal Home Loan Bank, 5.23% due
5/13/1996 34,939 34,939 0.1
Total Investments in US Government &
Agency Obligations 199,441 199,441 0.6
Total Investments in Short-Term
Securities 5,726,650 5,726,650 18.8
Total Investments $28,470,499 30,266,880 99.5
===========
Other Assets Less Liabilities 157,838 0.5
----------- ------
Net Assets $30,424,718 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $89,088 and 8,120
shares outstanding $ 10.97
===========
Class B--Based on net assets of $21,549,532 and 1,977,858
shares outstanding $ 10.90
===========
Class C--Based on net assets of $6,920,021 and 635,550
shares outstanding $ 10.89
===========
Class D--Based on net assets of $1,866,077 and 170,260
shares outstanding $ 10.96
===========
<FN>
*Denominated in US dollars unless otherwise indicated.
**American Depositary Receipts (ADR).
***Commercial Paper and certain US Government & Agency Obligations
are traded on a discount basis; the interest rates shown are the
discount rates paid at the time of purchase by the Portfolio.
(a)Represents a zero coupon or step bond; the interest rate shown is
the effective yield at the time of purchase by the Portfolio.
(b)Consistent with the general policy of the Securities and Exchange
Commission, the nationality or domicile of an issuer for
determination of foreign issuer status may be (i) the country under
whose laws the issuer is organized, (ii) the country in which the
issuer's securities are principally traded, or (iii) the country in
which the issuer derives a significant proportion (at least 50%) of
its revenue or profits from goods produced or sold, investments
made, or services performed in the country, or in which at least 50%
of the assets of the issuer are situated.
(c)Name changed from Oracle Systems Corp.
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Growth Opportunity Portfolio
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Advertising 3,400 Interpublic Group of Companies, Inc. $ 153,631 $ 158,950 2.1%
Banking & 3,000 State Street Boston Corp. 149,607 149,625 2.0
Financial 800 Wells Fargo & Co. 197,899 194,100 2.6
----------- ----------- ------
347,506 343,725 4.6
Beverages 2,000 The Coca-Cola Company 159,073 163,000 2.2
3,700 PepsiCo, Inc. 231,650 234,950 3.1
----------- ----------- ------
390,723 397,950 5.3
Chemical Producers 300 Duracell International, Inc. 14,984 13,575 0.2
Computers 1,575 COMPAQ Computer Corp. 80,784 73,434 1.0
Cosmetics 3,800 The Gillette Company 204,903 205,200 2.7
100 International Flavors &
Fragrances Inc. 4,970 4,913 0.1
----------- ----------- ------
209,873 210,113 2.8
Electrical Equipment 100 Emerson Electric Company 8,482 8,363 0.1
2,200 General Electric Co. 172,566 170,500 2.3
----------- ----------- ------
181,048 178,863 2.4
<PAGE>
Electronics 500 Intel Corp. 30,227 33,875 0.5
Energy 3,000 Enron Corp. 109,969 120,750 1.6
Entertainment 1,400 Viacom, Inc. (Class A) 55,748 56,000 0.7
2,400 Walt Disney Co. 150,131 148,800 2.0
----------- ----------- ------
205,879 204,800 2.7
Financial Services 6,800 Federal National Mortgage
Association 215,557 208,250 2.8
4,000 The Travelers Group, Inc. 257,873 246,000 3.3
----------- ----------- ------
473,430 454,250 6.1
Food 6,500 Sara Lee Corp. 212,915 201,500 2.7
100 Wrigley (Wm.) Jr. Co. 5,919 5,263 0.1
----------- ----------- ------
218,834 206,763 2.8
Food Merchandising 1,000 Albertson's, Inc. 35,697 38,500 0.5
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Growth Opportunity Portfolio (concluded)
Shares Percent of
Industries Held Common Stocks Cost Value Net Assets
<S> <C> <S> <C> <C> <C>
Hotels 2,000 Marriott International, Inc. $ 93,757 $ 97,500 1.3%
Household Durables 3,000 Rubbermaid, Inc. 88,197 84,750 1.1
Household Products 500 Colgate-Palmolive Co. 37,260 38,313 0.5
1,700 Kimberly-Clark Corp. 130,556 123,463 1.7
2,850 Procter & Gamble Co. 241,104 240,825 3.2
----------- ----------- ------
408,920 402,601 5.4
Information 3,200 First Data Corp. 227,013 243,200 3.2
Processing 2,200 General Motors Corp. (Class E) 120,013 124,025 1.7
----------- ----------- ------
347,026 367,225 4.9
<PAGE>
Insurance 1,000 Aetna Life & Casualty Co. 72,499 71,250 1.0
1,000 American International Group, Inc. 93,909 91,375 1.2
3,500 Travelers/Aetna Property
Casualty Corp. 87,500 96,688 1.3
----------- ----------- ------
253,908 259,313 3.5
Leisure 3,500 Polygram N.V. (ADR)* 205,850 205,187 2.7
Medical Technology 2,800 Johnson & Johnson 263,307 259,000 3.5
Oil & Services 1,000 Schlumberger, Ltd. 83,041 88,250 1.2
Pharmaceuticals 4,000 Amgen, Inc. 238,125 229,500 3.1
4,000 Merck & Co., Inc. 260,258 242,000 3.2
3,500 Pfizer, Inc. 240,962 241,062 3.2
5,500 Pharmacia & Upjohn, Inc. 220,781 210,375 2.8
2,800 Schering-Plough Corp. 156,870 160,650 2.1
5,000 SmithKline Beecham PLC (ADR)* 267,521 270,000 3.6
----------- ----------- ------
1,384,517 1,353,587 18.0
Photography 1,200 Eastman Kodak Co. 89,634 91,800 1.2
Pollution Control 500 WMX Technologies, Inc. 14,160 17,375 0.2
Restaurants 350 McDonald's Corp. 18,356 16,756 0.2
Retail--Specialty 750 Staples, Inc. 13,000 14,156 0.2
Retail Stores 1,450 Wal-Mart Stores, Inc. 32,286 34,619 0.5
Software--Computer 3,300 Compuserve Corporation 101,087 93,637 1.2
3,250 Computer Associates International,
Inc. 236,451 238,469 3.2
1,000 Microsoft Corp. 96,625 113,125 1.5
3,500 Oracle Corp. (a) 106,792 117,687 1.6
----------- ----------- ------
540,955 562,918 7.5
Telecommunications 500 MCI Communications Corp. 14,550 14,625 0.2
Toys 4,350 Hasbro, Inc. 163,402 159,862 2.1
Travel & Lodging 1,000 Carnival Corporation (Class A) 26,786 29,000 0.4
Total Investments in Common Stocks 6,494,237 6,494,072 86.7
Face Amount Short-Term Securities
<PAGE>
US Government $1,089,000 Federal Home Loan Mortgage Corp.,
& Agency 5.30% due 5/01/1996 1,089,000 1,089,000 14.5
Obligations**
Total Investments in Short-Term
Securities 1,089,000 1,089,000 14.5
Total Investments $ 7,583,237 7,583,072 101.2
===========
Liabilities in Excess of Other Assets (87,094) (1.2)
----------- ------
Net Assets $ 7,495,978 100.0%
=========== ======
Net Asset Value: Class A--Based on net assets of $2,023,888 and
202,706 shares outstanding $ 9.98
===========
Class B--Based on net assets of $3,535,590 and
355,086 shares outstanding $ 9.96
===========
Class C--Based on net assets of $1,596,871 and
160,385 shares outstanding $ 9.96
===========
Class D--Based on net assets of $339,629 and
34,036 shares outstanding $ 9.98
===========
<FN>
*American Depositary Receipts (ADR).
**Certain US Government & Agency Obligations are traded on a
discount basis; the interest rate shown is the discount rate paid at
the time of purchase by the Portfolio.
(a)Name changed from Oracle Systems Corp.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
Quality Bond Portfolio
S&P Moody's Face
INDUSTRIES Ratings Ratings Amount Bond & Notes Cost Value
<S> <S> <S> <C> <C> <C> <C>
Banking--17.8% A- A3 $ 250,000 Bank of New York Company Inc. (The), 7.875%
due 11/15/2002 $ 276,675 $ 259,718
AA- Aa3 150,000 Bank One, Milwaukee, N.A., 6.625% due 4/15/2003 156,155 145,479
A+ A1 250,000 BankAmerica Corp., 6.65% due 5/01/2001 249,863 249,863
A- A3 150,000 First Bank System, Inc., 6.875% due 9/15/2007 148,611 145,122
A A2 150,000 Mellon Bank Corporation, 7% due 3/15/2006 150,539 146,660
AA- Aa3 250,000 Norwest Corporation, 6.75% due 5/12/2000 249,627 249,568
---------- ----------
1,231,470 1,196,410
<PAGE>
Financial A A2 200,000 Bear Stearns Co., 6.75% due 8/15/2000 198,730 199,238
Services--6.6% A A2 150,000 Dean Witter, Discover & Co., 6.30% due 1/15/2006 149,340 139,218
A- A3 150,000 Smith Barney Holdings, 6.875% due 6/15/2005 148,485 145,006
---------- ----------
496,555 483,462
Financial A+ A1 200,000 Ford Motor Credit Co., 6.25% due 11/08/2000 199,154 194,978
Services-- A- A3 200,000 General Motors Acceptance Corp., 6.70% due
Captive--5.4% 4/18/1997 203,006 201,508
---------- ----------
402,160 396,486
Financial AA- Aa3 200,000 Associates Corp. of North America, 5.25% due
Services-- 9/01/1998 193,918 194,776
Consumer--2.7%
Industrial-- AA- A1 100,000 Anheuser-Busch Co., Inc., 8.75% due 12/01/1999 107,905 106,598
Consumer A+ A1 100,000 Bass America, Inc., 8.125% due 3/31/2002 105,928 105,431
Goods--4.3% BBB A2 100,000 Sears, Roebuck & Co., 9.25% due 4/15/1998 106,444 105,014
---------- ----------
320,277 317,043
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (concluded) (in US dollars)
<CAPTION>
Quality Bond Portfolio (concluded)
S&P Moody's Face
Industries Ratings Ratings Amount Bond & Notes Cost Value
<S> <S> <S> <C> <C> <C> <C>
Industrial-- AA- Aa3 $ 175,000 BP America Inc., 9.375% due 11/01/2000 $ 200,263 $ 192,442
Energy--5.3% A+ A1 175,000 Texaco Capital Inc., 8.625% due 11/15/2031 205,665 195,227
---------- ----------
405,928 387,669
Industrial-- AA- Aa2 100,000 Archer-Daniels-Midland Co., 8.125% due 6/01/2012 111,874 106,259
Other--4.7% A A3 150,000 Carnival Cruise Lines, Inc., 7.70% due 7/15/2004 156,745 151,317
BBB+ A3 100,000 Harris Corporation, 7% due 1/15/2026 99,503 89,759
---------- ----------
368,122 347,335
<PAGE>
Supranational-- AAA Aaa 200,000 Asian Development Bank, 6.125% due 3/09/2004 198,300 191,444
5.5% AAA Aaa 166,000 International Bank for Reconstruction &
Development, 12.375% due 10/15/2002 222,483 213,102
---------- ----------
420,783 404,546
US Government US Treasury Notes:
Obligations AAA Aaa 150,000 7.125% due 10/15/1998 158,086 153,351
- --9.3% AAA Aaa 200,000 5% due 2/15/1999 198,766 194,032
AAA Aaa 200,000 6.25% due 2/15/2003 198,625 196,532
AAA Aaa 150,000 6.25% due 8/15/2023 137,859 135,280
---------- ----------
693,336 679,195
Utilities-- A A2 200,000 Central Power & Light Co., 6% due 10/01/1997 200,622 199,442
Electric AA- A1 250,000 Northern States Power Company, 7.125% due
- --8.1% 7/01/2025 254,800 237,156
A A2 150,000 Virginia Electric & Power Co., 8.625% due
10/01/2024 166,200 157,785
---------- ----------
621,622 594,383
Yankees-- BBB+ A3 115,000 Bangkok Metropolitan Bank Public Company
Corporate--4.6% Limited, 7.25% due 9/15/2005 113,956 111,062
A A3 250,000 Mass Transit Railway Corporation, 7.25%
due 10/01/2005 260,325 242,875
A+ A2 100,000 Pohang Iron & Steel Company, Ltd., 7.375%
due 5/15/2005 101,816 98,677
---------- ----------
476,097 452,614
Yankees-- A+ A2 150,000 Province of Quebec, 7.125% due 2/09/2024 150,195 136,801
Sovereign--1.9%
Total Investments in Bonds & Notes--76.2% 5,780,463 5,590,720
SHORT-TERM
SECURITIES Issue
US Government 476,000 Federal Home Loan Mortgage Corp., 5.30%
& Agency due 5/01/1996 476,000 476,000
Obligations* 1,000,000 Federal National Mortgage Association,
- --20.1% 5.17% due 5/17/1996 997,702 997,702
---------- ----------
1,473,702 1,473,702
Total Investments in Short-Term
Securities--20.1% 1,473,702 1,473,702
Total Investments--96.3% $7,254,165 7,064,422
==========
Other Assets Less Liabilities--3.7% 271,028
----------
Net Assets--100.0% $7,335,450
==========
<PAGE>
Net Asset Value: Class A--Based on net assets of $2,120,825 and 217,297
shares outstanding $ 9.76
==========
Class B--Based on net assets of $3,473,490 and 356,069
shares outstanding $ 9.76
==========
Class C--Based on net assets of $1,464,077 and 150,093
shares outstanding $ 9.75
==========
Class D--Based on net assets of $277,058 and 28,401
shares outstanding $ 9.76
==========
<FN>
*Certain US Government & Agency Obligations are traded on a discount
basis; the interest rates shown are the discount rates paid at the
time of purchase by the Portfolio.
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in US dollars)
<CAPTION>
US Government Securities Portfolio
Face Interest Maturity
Issue Amount Rate Date(s) Value
<S> <S> <C> <C> <C> <C>
US Government & Federal Home Loan Mortgage
Agency Corporation $1,928,127 6.50 % 2/01/2011 $ 1,869,068
Mortgage-Backed Federal Home Loan Mortgage
Obligations*--84.5% Corporation 1,000,000 7.00 1/01/2020 965,310
Federal Home Loan Mortgage
Corporation 1,939,018 7.50 8/01/2025-10/01/2025 1,918,407
Federal Home Loan Mortgage
Corporation 1,800,086 11.50 6/01/2019 2,026,519
Government National Mortgage
Association 1,892,287 7.50 12/15/2022-10/01/2025 1,870,393
Total US Government & Agency Mortgage-Backed Obligations (Cost--$8,734,217) 8,649,697
<PAGE>
US Government & US Treasury Notes 230,000 7.875 11/15/2004 247,574
Agency US Treasury STRIPS*** 1,200,000 5.467++ 8/15/2000 914,604
Obligations--11.3%
Total US Government & Agency Obligations (Cost--$1,179,430) 1,162,178
Face Amount Issue
Repurchase $1,200,000 Nikko Securities Company, purchased on 4/30/1996 to
Agreements**-- yield 5.36% to 5/01/1996 1,200,000
11.7%
Total Repurchase Agreements (Cost--$1,200,000) 1,200,000
Total Investments (Cost--$11,113,647)--107.5% 11,011,875
Liabilities in Excess of Other Assets--(7.5%) (771,275)
-----------
Net Assets--100.0% $10,240,600
===========
Net Asset Value: Class A--Based on net assets of $5,085,512 and 500,915
shares outstanding $ 10.15
===========
Class B--Based on net assets of $3,667,670 and 361,279
shares outstanding $ 10.15
===========
Class C--Based on net assets of $1,269,237 and 125,055
shares outstanding $ 10.15
===========
Class D--Based on net assets of $218,181 and 21,481
shares outstanding $ 10.16
===========
<PAGE>
<FN>
++Represents the yield-to-maturity on this zero coupon issue.
*Mortgage-Backed Obligations are subject to principal paydowns as a
result of prepayments or refinancing of the underlying mortgage
instruments.As a result, the average life may be substantially less
than the original maturity.
**Repurchase Agreements are fully collateralized by US Government &
Agency Obligations.
***STRIPS--Separate Trading of Registered Interest and Principal of
Securities.
</TABLE>
