<PAGE> 1
TOUCHSTONE
VARIABLE ANNUITY
TOUCHSTONE
SELECT
VARIABLE ANNUITY
-------------------------------------------
Select Advisors Variable
Insurance Trust
* Emerging Growth
* International Equity
* Income Opportunity
* Value Plus
* Balanced
* Standby Income
-----------------
SEMIANNUAL REPORT
JUNE 30, 1998
-----------------
<PAGE> 2
[This Page Intentionally Left Blank]
<PAGE> 3
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
COMMON STOCKS--89.8%
AUTOMOTIVE--2.0%
8,700 Bandag, Class A................. $ 300,150
17,000 Exide........................... 285,813
-----------
585,963
-----------
BANKING--2.9%
5,000 Bank United, Class A............ 239,375
7,900 Dime Bancorp.................... 236,506
12,500 Golden State Bancorp............ 371,875
-----------
847,756
-----------
BEVERAGES, FOOD & TOBACCO--1.7%
18,500 DiMon........................... 208,125
15,000 Ralcorp Holdings................ 283,125
-----------
491,250
-----------
BUILDING MATERIALS--3.5%
13,700 Calmat.......................... 301,400
32,300 Dal-Tile International.......... 316,944
8,400 Martin Marietta Materials....... 378,000
-----------
996,344
-----------
CHEMICALS--1.6%
25,300 Calgon Carbon................... 251,419
7,400 Standard Products............... 208,125
-----------
459,544
-----------
COMMERCIAL SERVICES--10.0%
25,000 Acsys........................... 343,750
8,000 Administaff*.................... 369,000
10,000 Advance Paradigm................ 367,500
15,000 A.C. Nielson*................... 378,750
15,000 ITT Educational Services........ 483,750
12,000 Stewart Enterprises............. 319,500
14,200 Unova........................... 305,300
12,900 Wallace Computer Services....... 306,375
-----------
2,873,925
-----------
COMMUNICATIONS--1.0%
7,000 Geotel Communications*.......... 285,250
-----------
COMPUTER SOFTWARE &
PROCESSING--11.0%
5,000 Cambridge Technology
Partners*..................... 273,125
22,900 Carreker-Antinori............... 240,450
4,600 CBT Group, ADR.................. 246,100
15,000 Devry........................... 329,063
8,000 HNC Software*................... 326,500
5,000 Keane*.......................... 280,000
9,000 Policy Management System*....... 353,250
25,000 PSW Technologies*............... 143,750
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
COMPUTER SOFTWARE &
PROCESSING--CONTINUED
25,000 Remedy.......................... $ 425,000
7,500 Transaction Systems Architects,
Series A*..................... 288,750
8,000 Wind River Systems*............. 287,000
-----------
3,192,988
-----------
COMPUTERS & INFORMATION--6.7%
6,000 EMC Corporation................. 268,875
13,400 Gerber Scientific............... 304,850
29,800 Intergraph*..................... 255,163
15,000 Renaissance Worldwide........... 326,250
5,800 Saville Systems, ADR*........... 290,725
27,400 Scitex.......................... 357,913
2,500 Sterling Commerce............... 121,250
-----------
1,925,026
-----------
ELECTRONICS--5.8%
10,000 Advanced Lighting
Technologies.................. 232,500
25,000 Aeroflex........................ 259,375
21,500 Commscope....................... 348,025
21,600 Magnetek........................ 340,200
6,800 Maxwell Technologies............ 158,100
16,000 Sipex........................... 344,000
-----------
1,682,200
-----------
ENTERTAINMENT & LEISURE--2.3%
17,000 Cinar Films, Class B............ 331,500
7,000 SFX Entertainment, Class A...... 321,125
-----------
652,625
-----------
FINANCIAL SERVICES--2.1%
23,000 Life USA Holdings............... 297,563
12,000 T&W Financial................... 301,500
-----------
599,063
-----------
FOREST PRODUCTS & PAPER--0.8%
21,800 Unisource Worldwide............. 235,713
-----------
HEAVY INDUSTRY--0.7%
8,059 Flowserve....................... 198,453
-----------
HOME CONSTRUCTION, FURNISHINGS &
APPLIANCES--1.5%
7,100 Herman Miller................... 172,619
4,600 LA-Z-Boy Chair.................. 259,900
-----------
432,519
-----------
INDUSTRIAL--4.2%
10,000 CN Bioscience*.................. 250,000
13,000 Comfort Systems*................ 303,875
11,000 Foster Wheeler.................. 235,813
9,000 General Cable................... 259,875
7,000 Wesley Jessen Visioncare*....... 161,875
-----------
1,211,438
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 4
EMERGING GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
INSURANCE--3.1%
14,000 ARM Financial Group, Class A.... $ 309,750
12,100 HCC Insurance Holdings.......... 266,200
5,850 HSB Group....................... 312,975
-----------
888,925
-----------
MEDIA--BROADCASTING &
PUBLISHING--7.1%
15,000 American Tower Systems, Class
A............................. 374,063
4,400 Central Newspapers, Class A..... 306,900
15,000 Gartner Group, Class A.......... 525,000
9,800 Gibson Greetings................ 245,000
19,600 Hollinger International......... 333,200
9,400 Lee Enterprises................. 287,875
-----------
2,072,038
-----------
MEDICAL--1.8%
6,000 Arthocare....................... 99,750
15,000 Atria Communities*.............. 258,750
13,700 Biosite Diagnostics............. 150,700
-----------
509,200
-----------
MEDICAL SUPPLIES--2.8%
8,200 EG&G............................ 246,000
13,500 Elsag Bailey*................... 324,844
10,000 OEC Medical Systems............. 225,000
-----------
795,844
-----------
METALS--0.7%
4,100 Harsco.......................... 187,831
-----------
OIL & GAS--1.9%
8,300 Equitable Resources............. 253,150
14,700 Nabors Industries*.............. 291,244
-----------
544,394
-----------
PHARMACEUTICALS--1.5%
13,900 Jean Coutu Group, Class A....... 215,039
16,000 King Pharmaceuticals............ 224,000
-----------
439,039
-----------
RESTAURANTS--1.1%
14,000 The Cheesecake Factory.......... 316,750
-----------
RETAILERS--3.4%
34,000 Charming Shoppes*............... 161,500
12,500 Coldwater Creek................. 343,750
9,000 Enesco Group.................... 276,750
6,300 Zale*........................... 200,419
-----------
982,419
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
TELEPHONE SYSTEMS--0.6%
15,000 Startec Global Communication.... $ 172,500
-----------
TEXTILES, CLOTHING & FABRICS--2.2%
12,045 Albany International............ 288,327
23,000 Stride Rite..................... 346,438
-----------
634,765
-----------
TRANSPORTATION--5.8%
25,200 Fritz Companies*................ 337,050
17,000 Halter Marine Group............. 256,063
8,400 JB Hunt Transportation
Services...................... 299,250
8,500 Knightsbridge Tankers........... 227,375
9,700 Newport News Shipbuilding....... 259,475
16,200 Yellow.......................... 300,713
-----------
1,679,926
-----------
TOTAL COMMON STOCKS (COST $23,233,335)... 25,893,688
-----------
WARRANTS--0.2%
BANKING--0.2%
12,500 Golden State Bancorp............ 66,406
-----------
TOTAL WARRANTS (COST $0)................. 66,406
-----------
TOTAL INVESTMENTS AT VALUE--90.0%
(COST $23,233,335) (a)................... 25,960,094
CASH AND OTHER ASSETS NET OF
LIABILITIES--10.0%..................... 2,876,939
-----------
NET ASSETS--100.0%....................... $28,837,033
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes
is $23,233,335, resulting in gross unrealized appreciation and
depreciation of $4,121,048 and $1,394,289, respectively, and
net unrealized appreciation of $2,726,759.
ADR - American Depositary Receipt
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 5
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------- -----------
<C> <S> <C>
COMMON STOCKS--88.4%
DENMARK--1.2%
3,868 Tele Danmark A/S, Class B...... $ 371,815
-----------
FINLAND--2.6%
8,046 Nokia OYJ, Series A............ 594,852
5,173 Pohjola Insurance, Class B..... 256,853
-----------
851,705
-----------
FRANCE--19.1%
958 Accor.......................... 268,300
4,469 Alcatel Alsthom................ 910,594
2,310 Assurances Generales de
France....................... 130,804
4,723 AXA............................ 531,596
3,463 Banque National De Paris....... 283,162
1,422 Bouygues....................... 258,438
3,366 Cap Gemini..................... 529,289
3,870 Casino Guichard-Perrachon...... 309,267
1,835 Groupe Danone.................. 506,322
5,263 Lafarge........................ 544,463
8,598 Lagardere Groupe............... 358,208
8,374 Renault........................ 476,673
4,336 Rhone Poulenc.................. 244,737
3,348 Suez Lyonnaise Des
Eaux-Dumex................... 551,396
1,990 Total S.A., Series B........... 258,899
-----------
6,162,148
-----------
GERMANY--12.7%
1,455 Adidas......................... 253,868
523 Allianz Holdings............... 174,527
12 Allianz........................ 3,971
11,380 BASF........................... 541,379
607 BMW............................ 614,577
2,823 Dresdner Bank.................. 152,700
10,240 Lufthansa...................... 258,201
8,957 Mannesmann..................... 921,788
8,718 RWE............................ 516,551
659 Volkswagen..................... 637,247
-----------
4,074,809
-----------
GREAT BRITAIN--20.7%
21,223 Amvescap....................... 207,338
96,874 Avis Europe.................... 438,961
54,032 BG............................. 313,327
17,491 Boots.......................... 290,055
32,970 British Aerospace.............. 252,725
10,174 British Petroleum.............. 148,837
42,179 Cable & Wireless
Communications............... 427,564
49,622 Compass Group.................. 571,794
16,960 Electrocomponents.............. 133,119
15,420 GKN............................ 196,612
27,235 Great Universal Stores......... 359,311
16,255 Lloyds TSB Group............... 228,432
51,578 National Grid Group............ 348,245
13,637 National Westminster Bank...... 243,907
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------- -----------
<C> <S> <C>
GREAT BRITAIN--CONTINUED
16,279 Orange......................... $ 173,718
33,719 Rentokil Initial............... 242,699
26,453 Shell Transport & Trading...... 187,088
24,281 SmithKline Beecham............. 295,482
27,278 Unilever....................... 290,636
49,454 Vodafone Group................. 628,083
50,305 WPP Group...................... 329,947
7,301 Zeneca Group................... 313,595
-----------
6,621,475
-----------
IRELAND--3%
19,750 Allied Irish Banks............. 286,925
18,056 Bank of Ireland................ 370,279
22,745 CRH............................ 322,296
-----------
979,500
-----------
ISRAEL--0.5%
3,470 ECI Telecommunications......... 131,426
1,050 Teva Pharmaceutical Industries,
ADR.......................... 36,947
-----------
168,373
-----------
ITALY--6.2%
101,785 Banca di Roma.................. 205,926
81,261 Credito Italiano............... 422,743
150,801 Montedison..................... 186,808
722,783 Seat........................... 485,939
43,680 Telecom Italia Mobile.......... 266,760
18,840 Telecom Italia................. 137,771
58,621 Telecom Italia, Non-Convertible
Savings Shares............... 285,488
-----------
1,991,435
-----------
JAPAN--4.7%
1,300 Acom........................... 61,992
5,000 Bank of Tokyo.................. 53,150
5,000 Bridgestone.................... 118,673
4,000 Canon.......................... 91,176
9,000 Fujitsu........................ 95,083
2,000 Fuji........................... 69,901
7,000 Minebea........................ 69,952
70 Morgan Stanley Dean Witter
(Sony Corp), CPS............. 118,081
66 Merrill Lynch (Honda Motor),
CPS.......................... 67,082
700 Nintendo....................... 65,697
24 Nippon Telegraph & Telephone... 99,859
810 Promise........................ 33,468
1,000 Rohm Company................... 103,115
1,000 Sankyo......................... 22,866
1,000 TDK............................ 74,171
4,000 Terumo......................... 63,678
4,400 Tokyo Electric Power........... 86,602
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 6
INTERNATIONAL EQUITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------- -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
JAPAN--CONTINUED
7,000 Toyota Motor................... $ 181,844
2,000 Yamanouchi Pharmaceutical...... 41,825
-----------
1,518,215
-----------
MEXICO--1.6%
513 Cemex, Class B................. 2,267
7,700 Cifra, ADR..................... 112,766
3,539 Fomento Economico Mexico,
ADR.......................... 111,479
25,885 Kimberly-Clark Mexico, Series
A............................ 89,452
4,300 Telefonos De Mexico, ADR....... 206,669
-----------
522,633
-----------
NETHERLANDS--5.0%
5,579 Ing Groep...................... 365,683
7,170 Koninklijke.................... 276,265
7,445 Nutreco Holding................ 260,849
5,099 OCE............................ 217,294
7,170 TNT Post Groep................. 183,471
8,796 Verenigde Nederlandse.......... 319,870
-----------
1,623,432
-----------
RUSSIA--0.0%
2,300 JSC Surgutneftegaz, ADR........ 9,322
-----------
SPAIN--2.5%
9,344 Bancaria De Espana............. 209,608
9,537 Banco Central
Hispanoamericano............. 299,761
6,463 Telefonica De Espana........... 298,811
-----------
808,180
-----------
SWEDEN--2.5%
36,785 Nordbanken Holding............. 269,935
13,015 Skandia Forsakrings............ 186,115
11,155 ForeningSparbanken............. 335,825
-----------
791,875
-----------
SWITZERLAND--6.1%
47 Kuoni Reisen Holdings.......... 233,897
220 Nestle......................... 471,958
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------- -----------
<C> <S> <C>
SWITZERLAND--CONTINUED
260 Novartis....................... $ 433,706
91 Swiss Reinsurance.............. 230,703
46 UBS (Schw. Bank
Gesellschaft)................ 82,782
1,364 Union Bank Of Switzerland...... 508,424
-----------
1,961,470
-----------
TOTAL COMMON STOCKS
(COST $23,282,976)....................... 28,456,387
-----------
PREFERRED STOCKS--4.9%
GERMANY--4.9%
5,895 Henkel......................... 583,777
111 Porsche........................ 320,222
971 Sap Vorzug..................... 659,903
-----------
1,563,902
-----------
TOTAL PREFERRED STOCKS
(COST $951,047).......................... 1,563,902
-----------
RIGHTS--0.1%
GERMANY--0.1%
44 BMW............................ 44,347
-----------
TOTAL RIGHTS (COST $0)................... 44,347
-----------
TOTAL INVESTMENTS AT VALUE--93.4%
(COST $24,234,023) (a)................... 30,064,636
CASH AND OTHER ASSETS
NET OF LIABILITIES--6.6%............... 2,137,399
-----------
NET ASSETS--100.0%....................... $32,202,035
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
(a) The aggregate identified cost for federal income tax purposes
is $24,234,023, resulting in gross unrealized appreciation and
depreciation of $6,153,758 and $323,145, respectively, and net
unrealized appreciation of $5,830,613.
ADR - American Depositary Receipt
CPS - Currency Protected Security.
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 7
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ---------- -----------
<C> <S> <C>
COMMON STOCKS--58.4%
ADVERTISING--2.4%
12,700 WPP Group................... $ 854,075
-----------
AEROSPACE & DEFENSE--4.3%
10,700 Boeing...................... 476,819
6,000 Lockheed Martin............. 635,250
9,000 Rockwell International...... 432,563
-----------
1,544,632
-----------
AIRLINES--1.9%
8,000 AMR*........................ 666,000
-----------
BANKING--1.1%
2,700 Citicorp.................... 402,975
-----------
BEVERAGES, FOOD & TOBACCO--1.1%
7,916 Diageo, ADR................. 381,452
-----------
CHEMICALS--1.9%
12,300 Monsanto.................... 687,263
-----------
COMMUNICATIONS--1.6%
20,700 General Instrument.......... 562,781
-----------
COMPUTERS & INFORMATION--0.8%
6,500 EMC......................... 291,281
-----------
ELECTRONICS--4.9%
18,900 Adaptec *................... 270,506
5,000 Avnet....................... 273,438
6,700 Motorola.................... 352,169
20,300 Solectron................... 853,869
-----------
1,749,982
-----------
ENTERTAINMENT &
LEISURE--2.4%
14,900 Polaroid.................... 529,881
4,000 Time Warner................. 341,750
-----------
871,631
-----------
FINANCIAL SERVICES--6.4%
17,000 Countrywide Credit.......... 862,750
8,400 Federal Home Loan Mortgage
Corporation............... 395,325
24,800 Green Tree Financial........ 1,061,750
-----------
2,319,825
-----------
HEALTH CARE PROVIDERS--1.2%
14,100 Tenet Healthcare*........... 440,625
-----------
HEAVY INDUSTRY--3.2%
6,500 Caterpillar................. 343,688
20,000 Lucasvarity, ADR............ 796,250
-----------
1,139,938
-----------
INDUSTRIAL--0.7%
3,900 Armstrong World
Industries................ 262,763
-----------
INSURANCE--1.0%
8,000 Renaissancere Holdings...... 370,500
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ---------- -----------
<S> <C> <C>
LODGING--1.8%
55,700 Homestead Village
Property*................. $ 661,438
-----------
MEDIA--BROADCASTING & PUBLISHING--1.0%
9,300 Reed International, ADR..... 345,263
-----------
METALS--1.8%
28,200 Allegheny Teledyne.......... 645,075
-----------
OIL & GAS--1.6%
8,300 Anadarko Petroleum.......... 557,656
-----------
PHARMACEUTICALS--2.4%
18,300 Millipore................... 498,675
10,800 Teva Pharmaceutical
Industries, ADR........... 380,025
-----------
878,700
-----------
REAL ESTATE--4.5%
14,700 Oakwood Homes............... 441,000
22,800 Security Capital Group,
Class B................... 607,050
22,600 Security Capital Industrial
Trust REIT................ 565,000
-----------
1,613,050
-----------
TELEPHONE SYSTEMS--2.2%
11,400 Sprint...................... 803,700
-----------
TEXTILES, CLOTHING & FABRICS--2.5%
34,200 Shaw Industries............. 602,775
8,700 Unifi....................... 297,975
-----------
900,750
-----------
TRANSPORTATION--5.7%
24,100 Air Express International... 644,675
29,600 Sabre Group Holding*........ 1,124,800
6,500 Union Pacific............... 286,813
-----------
2,056,288
-----------
TOTAL COMMON STOCKS (COST $18,934,138)... 21,007,643
-----------
PRINCIPAL
AMOUNT
- ----------
<C> <S> <C>
CORPORATE BONDS--$9.6%
BANKING--1.7%
$ 100,000 Bankers Trust, 7.125%,
03/15/06.................. $ 104,656
250,000 BB&T, 7.25%, 06/15/07....... 265,878
250,000 Chase Manhattan, 7.25%,
06/01/07.................. 266,202
760 Nykredit, 6.00%, 10/01/26... 110
-----------
1,136,779
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 8
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
BEVERAGES, FOOD &
TOBACCO--0.5%
$ 160,000 Coca-Cola Femsa, 8.95%,
11/01/06.................. $ 162,204
-----------
CHEMICALS--0.3%
100,000 Belo, 6.875%, 06/01/02...... 102,750
-----------
COMPUTER SOFTWARE & PROCESSING--1.1%
400,000 Computer Associates
International, 6.375%,
04/15/05.................. 401,760
-----------
ELECTRIC UTILITIES--0.6%
215,000 Financiera Energy, 9.375%,
06/15/06.................. 211,549
-----------
FINANCIAL SERVICES--1.0%
250,000 Bonos Del Tesoro, 8.75%,
05/09/02.................. 241,786
120,000 Paine Webber Group, 7.00%,
03/01/00.................. 121,489
-----------
363,275
-----------
METALS--0.8%
300,000 AK Steel, 9.125%,
12/15/06.................. 313,500
-----------
MULTIPLE UTILITIES--0.9%
300,000 New Brunswick, 7.125%,
10/01/02.................. 313,410
-----------
OIL & GAS--0.4%
150,000 Petroleos Mexicanos, 8.85%,
09/15/07.................. 145,500
-----------
RETAILERS--0.9%
300,000 Rite Aid, 7.125%
01/15/07.................. 315,809
-----------
TELEPHONE SYSTEMS--1.4%
500,000 AT&T Capital, 6.23%,
09/24/99.................. 499,933
-----------
TOTAL CORPORATE BONDS (COST
$3,440,757).............................. 3,466,536
-----------
MORTGAGE BACKED SECURITIES--2.1%
20,000 Access Financial, 7.10%,
05/15/21.................. 20,826
35,000 Federal National Mortgage
Association, 6.15%,
10/25/07.................. 35,013
500,000 Federal National Mortgage
Association, 6.247%,
06/25/16.................. 500,855
44,500 General Electric Capital
Mortgage Service, 6.50%,
03/25/24.................. 44,785
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
MORTGAGE BACKED SECURITIES--CONTINUED
$ 40,000 General Electric Capital
Mortgage Service, 6.50%,
11/25/23.................. $ 39,158
40,000 Merrill Lynch Mortgage
Investment, 7.089%,
12/26/25.................. 41,946
17,888 Merrill Lynch Mortgage
Investment, 7.65%,
01/15/12.................. 18,030
50,000 Prudential Home Mortgage
Securities, 6.25%,
04/25/24.................. 46,911
-----------
TOTAL MORTGAGE BACKED SECURITIES (COST
$733,757)................................ 747,524
-----------
MUNICIPAL BONDS--0.8%
40,000 Baltimore Community
Development Financing,
8.20%, 08/15/07........... 44,331
15,000 Colorado Housing Finance
Authority, 8.00%,
08/01/02.................. 14,998
65,000 New York City, New York,
General Obligation, 0.00%,
11/15/14.................. 55,288
10,000 New York City, New York,
General Obligation, 9.75%,
08/15/12.................. 10,618
40,000 New York State Housing
Finance Agency Service,
7.50%, 09/15/03........... 41,684
50,000 Ohio Housing Financial
Agency, 7.90%, 10/01/14... 51,706
30,000 Oklahoma City Airport,
9.40%, 11/01/10........... 34,874
40,000 Oregon State General
Obligation, 6.90%,
01/01/00.................. 40,045
-----------
TOTAL MUNICIPAL BONDS (COST $273,913)....
293,544
-----------
U.S. TREASURY OBLIGATIONS--23.2%
1,175,000 U.S. Treasury Bonds, 7.25%,
08/15/22.................. 1,406,325
1,025,000 U.S. Treasury Bonds, 6.75%,
08/15/26.................. 1,173,625
1,355,000 U.S. Treasury Bonds, 6.25%,
04/30/01.................. 1,379,982
900,000 U.S. Treasury Notes, 7.00%,
07/15/06.................. 983,250
495,000 U.S. Treasury Notes, 5.75%,
10/31/00.................. 497,475
840,000 U.S. Treasury Notes, 7.25%,
08/15/04.................. 914,287
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 9
BALANCED PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--CONTINUED
$ 700,000 U.S. Treasury Notes, 5.75%,
08/15/03.................. $ 707,438
1,015,000 U.S. Treasury Notes, 6.125%,
08/31/98.................. 1,016,269
250,000 U.S. Treasury Notes, 5.625%,
05/15/01.................. 250,703
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST
$8,144,903).............................. 8,329,354
-----------
SOVEREIGN GOVERNMENT OBLIGATIONS--2.8%
BRAZIL--0.9%
435,079 Republic of Brazil, 8.00%,
04/15/14.................. 319,239
-----------
SOUTH AFRICA--1.3%
3,180,000 Republic Of South Africa,
13.00%, 08/31/10.......... 476,558
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
UNITED KINGDOM--0.6%
$ 105,000 UK Treasury 8.00%,
12/07/15.................. $ 219,593
-----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $1,173,331)........................ 1,015,390
-----------
TOTAL INVESTMENTS AT VALUE--96.9% (COST
$32,700,799)(a).......................... $34,859,991
CASH AND OTHER ASSETS NET OF
LIABILITIES--3.1%........................ 1,100,386
-----------
NET ASSETS--100.0%....................... $35,960,377
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes
is $32,700,799, resulting in gross unrealized appreciation
and depreciation of $3,569,843 and $1,410,651, respectively,
and net unrealized appreciation of $2,159,192.
ADR - American Depositary Receipt
REIT - Real Estate Investment Trust
- --------------------------------------------------------------------------------
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
CORPORATE BONDS--44.8%
BEVERAGES, FOOD &
TOBACCO--1.1%
$ 400,000 Richmont Marketing Special,
10.125%, 12/15/07......... $ 406,000
-----------
CHEMICALS--2.2%
300,000 Climachem, 10.75%,
12/01/07.................. 311,250
500,000 Trans-Resources, 10.75%,
03/15/08.................. 515,000
-----------
826,250
-----------
COMMERCIAL SERVICES--1.2%
450,000 Marsulex, 9.625%,
07/01/08.................. 456,750
-----------
COMMUNICATIONS--2.2%
400,000 Orion Network, 11.25%,
01/15/07.................. 450,000
350,000 Winstar Communications,
10.00%, 03/15/08.......... 347,375
-----------
797,375
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
ENTERTAINMENT &
LEISURE--1.1%
$ 400,000 Regal Cinemas, 9.50%,
06/01/08.................. $ 402,500
-----------
ENVIRONMENTAL--0.7%
300,000 ATC Group Services, 12.00%,
01/15/08.................. 276,000
-----------
FINANCIAL SERVICES--1.7%
700,000 Salomon Brothers, 0.00%,
09/18/98.................. 644,000
-----------
FOOD RETAILERS--1.4%
500,000 Pantry, 10.25%,
10/15/07.................. 510,000
-----------
FOREST PRODUCTS &
PAPER--1.2%
800,000 SF Holdings Group (zero
coupon until 03/15/03,
12.75% thereafter),#0.00%,
03/15/08.................. 428,000
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 10
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
CORPORATE BONDS--CONTINUED
HOME CONSTRUCTION,
FURNISHINGS &
APPLIANCES--1.4%
$ 500,000 Imperial Home Decor Group,
11.00%, 03/15/08.......... $ 517,500
-----------
INDUSTRIAL--7.2%
450,000 Aqua Chem, 11.25%,
07/01/08.................. 457,875
500,000 Derby Cycle, 10.00%,
05/15/08.................. 497,500
880,000 Pen-Tab Industries, 10.875%,
02/01/07.................. 871,200
450,000 Samsonite, 10.75%,
06/15/08.................. 446,625
400,000 Walbro, 10.125%, 12/15/07... 394,000
-----------
2,667,200
-----------
MEDIA--BROADCASTING &
PUBLISHING--4.3%
450,000 Cumulus Media, 10.375%,
07/01/08.................. 456,750
500,000 Perry-Judd, 10.625%,
12/15/07.................. 525,000
600,000 Source Media, 12.00%,
11/01/04.................. 612,000
-----------
1,593,750
-----------
METALS--3.9%
500,000 Doe Run Resources, 11.25%,
03/15/05.................. 505,000
500,000 Elgin National Industries,
11.00%, 11/01/07.......... 530,000
400,000 Schuff Steel, 10.50%,
06/01/08.................. 396,000
-----------
1,431,000
-----------
OIL & GAS--0.8%
300,000 Panaco, 10.625%, 10/01/04... 301,500
-----------
REAL ESTATE--1.3%
500,000 BF Saul, 9.75%, 04/01/08.... 493,750
-----------
RESTAURANTS--1.2%
500,000 Planet Hollywood, 12.00%,
04/01/05.................. 452,500
-----------
RETAIL--3.8%
500,000 Big 5, 10.875%, 11/15/07.... 517,500
450,000 HMV Media Group, 10.25%,
05/15/08.................. 456,750
450,000 US Office Products, 9.75%,
06/15/08.................. 450,000
-----------
1,424,250
-----------
RETAILERS--0.8%
300,000 Frank's Nursery & Crafts,
10.25%, 03/01/08.......... 303,000
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
TELEPHONE SYSTEMS--4.7%
$ 500,000 Amer Mobile/AMSC, 12.25%,
04/01/08.................. $ 470,000
450,000 Dobson Wireline, 12.25%,
06/15/08.................. 436,500
300,000 Iridium Capital, 14.00%,
07/15/05.................. 333,750
500,000 Long Distance International,
12.25%, 04/15/08.......... 495,000
-----------
1,735,250
-----------
TRANSPORTATION--2.6%
450,000 American Commercial Lines,
10.25%, 06/30/08.......... 455,625
500,000 Stena Line, 10.625%,
06/01/08.................. 506,250
-----------
961,875
-----------
TOTAL CORPORATE BONDS (COST
$16,550,755)............................. 16,628,450
-----------
CONVERTIBLE CORPORATE BONDS--1.1%
METALS--1.1%
$ 500,000 Nippon Denro Ispat, 3.00%,
04/01/01.................. 250,625
1,000,000 NTS Steel Group Public,
4.00%, 12/16/08++......... 140,000
-----------
390,625
-----------
TOTAL CONVERTIBLE CORPORATE BONDS (COST
$721,847)................................ 390,625
-----------
EUROBONDS--5.4%
ARGENTINA--1.8%
700,000 Telefonica De Argentina,
9.125%, 05/07/08.......... 659,750
-----------
CHINA--1.7%
700,000 Cathay International,
13.00%, 04/15/08.......... 616,000
-----------
ECUADOR--1.9%
750,000 Conecel Holdings, 14.00%,
10/01/00.................. 720,000
-----------
TOTAL EUROBONDS (COST $2,171,951)........ 1,995,750
-----------
SOVEREIGN GOVERNMENT OBLIGATIONS--16.0%
ARGENTINA--3.0%
1,200,000 Republic Of Argentina,
9.75%, 09/19/27........... 1,111,799
-----------
BULGARIA--2.1%
1,000,000 Government of Bulgaria,
6.563%, 07/28/24.......... 763,750
-----------
JAMAICA--1.9%
700,000 Government of Jamaica,
10.875%, 06/10/05......... 700,000
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 11
INCOME OPPORTUNITY PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
SOVEREIGN GOVERNMENT
OBLIGATIONS--CONTINUED
PERU--1.5%
$1,000,000 Government of Peru, FLIRB,
3.25%, 03/07/17........... $ 560,000
-----------
RUSSIA--3.3%
44,735 Russian Ian, 6.625%,
12/15/15.................. 24,772
2,550,000 Russia-Principal Loan,
6.719%, 12/15/20.......... 1,204,875
-----------
1,229,647
-----------
TURKEY--1.3%
500,000 Republic of Turkey, 10.00%,
09/19/07.................. 482,500
-----------
VENEZUELA--2.9%
1,285,710 Republic Of Venezuela FLIRB,
6.625%, 03/31/07.......... 1,060,711
-----------
TOTAL SOVEREIGN GOVERNMENT OBLIGATIONS
(COST $6,421,951)........................ 5,908,407
-----------
BRADY BONDS--21.5%
ARGENTINA--3.3%
1,377,525 Republic of Argentina, FRB,
6.625%, 03/31/05.......... 1,217,731
-----------
BRAZIL--4.1%
2,088,378 Republic of Brazil, 8.00%,
04/15/14.................. 1,537,568
-----------
BULGARIA--2.0%
1,050,000 Government of Bulgaria, IAB,
6.563%, 07/28/11.......... 748,781
-----------
ECUADOR--3.3%
2,225,340 Ecuador-Bearer-PDI, 3.25%,
02/27/15.................. 1,240,627
-----------
MEXICO--3.1%
1,400,000 Mexico Par Ser B Cum, 6.25%,
12/31/19.................. 1,159,375
-----------
NIGERIA--1.5%
750,000 Central Bank of Nigeria,
6.25%, 11/15/20........... 538,125
-----------
PANAMA--1.5%
750,000 Panama-Int Reduction Bond,
3.75%, 07/17/14........... 556,875
-----------
PERU--1.2%
700,000 Government of Peru, PDI
Bond, 4.00%, 03/07/17..... 427,000
-----------
VENEZUELA--1.5%
678,572 Republic of Venezuela, DCB,
6.625%, 12/18/07.......... 554,732
-----------
TOTAL BRADY BONDS (COST $8,413,615)...... 7,980,814
-----------
YANKEE BONDS--7.3%
BRAZIL--1.5%
600,000 Paging Network Do Brasil,
13.50%, 06/06/05.......... 513,750
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
DOMINICAN REPUBLIC--1.3%
$ 500,000 Tricom, 11.375%, 09/01/04... $ 484,375
-----------
ECUADOR--1.0%
400,000 Conecel, 14.00%, 05/01/02... 384,000
-----------
HONG KONG--1.6%
850,000 GS Superhighway Holdings,
10.25%, 08/15/07.......... 604,563
-----------
INDONESIA--0.3%
500,000 FSW International, 12.50%,
11/01/06++................ 110,000
-----------
KOREA--1.6%
700,000 Korea Electric Power, 7.00%,
02/01/27.................. 592,336
-----------
TOTAL YANKEE BONDS (COST $3,389,710)..... 2,689,024
-----------
WARRANTS--0.0%
COMMUNICATIONS--0.0%
400 Loral Space &
Communications............ 6,000
-----------
TELEPHONE SYSTEMS--0.0%
300 Primus Telecommunications... 6,000
-----------
TOTAL WARRANTS (COST $0)................. 12,000
-----------
TOTAL INVESTMENTS AT VALUE--96.1% (COST
$37,669,829)(a).......................... 35,605,070
CASH AND OTHER ASSETS NET OF
LIABILITIES--3.9%........................ 1,459,343
-----------
NET ASSETS--100.0%....................... $37,064,413
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
# Zero or step coupon.
++ Security currently in default of interest payment. The Portfolio is not
accruing stated interest.
(a) The aggregate identified cost for federal income tax purposes is
$37,669,829, resulting in gross unrealized appreciation and depreciation
of $401,025 and $2,465,784, respectively, and net unrealized
depreciation of $2,064,759.
DCB - Debt Conversion Bond
FLIRB - Front-Load Interest Reduction Bonds
FRB - Floating Rate Bond
IAB - Interest Arrears Bond
PDI - Past Due Interest
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 12
STANDBY INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
ASSET BACKED SECURITIES--4.6%
$1,000,000 Chase Manhattan Owner,
6.00%, 12/15/04........... $ 999,063
-----------
TOTAL ASSET BACKED SECURITIES (COST
$1,000,000).............................. 999,063
-----------
COMMERCIAL PAPER--80.2%
990,000 Autoliv, 5.66%, 07/10/98.... 977,392
1,000,000 Case Credit, 5.69%,
08/05/98.................. 985,775
910,000 Cincinnati Bell, 5.75%,
07/06/98.................. 906,366
1,000,000 Cinergy, 5.70%, 07/07/98.... 995,725
955,000 Comdisco, 5.71%, 08/10/98... 944,872
450,000 Commonwealth Edison, 5.75%,
07/09/98.................. 446,909
240,000 Commonwealth Edison, 5.74%,
07/09/98.................. 238,661
560,000 Conagra, 5.65%, 07/15/98.... 556,133
1,000,000 CVS, 5.73%, 07/06/98........ 994,748
990,000 Echlin, 5.77%, 07/13/98..... 979,369
270,000 Lockheed Martin, 5.79%,
09/11/98.................. 266,830
740,000 Mid Atlantic Fuel, 5.70%,
07/08/98.................. 733,673
665,000 Minnesota Power And Light,
5.83%, 07/14/98........... 662,738
1,000,000 Norfolk Southern, 5.70%,
07/21/98.................. 991,133
1,000,000 Occidental Petroleum, 5.70%,
07/24/98.................. 991,925
390,000 Ryder System, 5.70%,
07/21/98.................. 387,592
610,000 Ryder System, 5.75%,
07/21/98.................. 606,785
1,000,000 Safeway Stores, 5.69%,
07/08/98.................. 989,884
1,000,000 Testron Financial, 5.70%,
08/10/98.................. 990,658
1,000,000 Texas Utilities, 5.72%,
07/10/98.................. 994,439
1,005,000 UOP, 5.85%, 07/22/98........ 1,000,648
825,000 Williams Holdings, 5.71%,
07/08/98.................. 818,850
-----------
TOTAL COMMERCIAL PAPER (COST
$17,461,048)............................. 17,461,105
-----------
CORPORATE BONDS--9.5%
BANKING--3.2%
700,000 Credit Lyonnais, VR, 6.75%,
09/21/98.................. 698,250
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
- ---------- -----------
<C> <S> <C>
COMPUTER SOFTWARE &
PROCESSING--3.2%
$ 700,000 Comdisco, 6.47%, 09/30/98... $ 701,558
-----------
TELEPHONE SYSTEMS--3.1%
665,000 AT&T Capital, 5.87%,
08/28/98.................. 665,410
-----------
TOTAL CORPORATE BONDS (COST
$2,064,296).............................. 2,065,218
-----------
MORTGAGE BACKED SECURITIES--3.2%
700,000 CS First Boston, 6.32%,
02/25/18.................. 698,257
-----------
TOTAL MORTGAGE BACKED SECURITIES (COST
$698,469)................................ 698,257
-----------
U.S. GOVERNMENT & AGENCY
OBLIGATIONS--1.8%
100,000 Federal Home Loan Mortgage
Corporation, 5.50%,
07/02/98.................. 99,801
285,000 Federal Home Loan Mortgage
Corporation, 5.44%,
07/02/98.................. 284,311
-----------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (COST $384,112).............. 384,112
-----------
TOTAL INVESTMENTS AT VALUE--99.3% (COST
$21,607,925) (a)......................... 21,607,755
CASH AND OTHER ASSETS
NET OF LIABILITIES--0.7%............... 153,954
-----------
NET ASSETS--100.0%....................... $21,761,709
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
(a) The aggregate identified cost for federal income tax purposes
is $21,607,925, resulting in gross unrealized appreciation and
depreciation of $1,003 and $1,173, respectively, and net
unrealized depreciation of $170.
VR - Variable Rate Security. Interest rate shown reflects current
rate on instrument with variable rate.
The accompanying notes are an integral part of the financial statements.
10
<PAGE> 13
VALUE PLUS PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
COMMON STOCKS--92.2%
AEROSPACE & DEFENSE--1.5%
600 Boeing.......................... $ 26,738
-----------
AUTOMOTIVE--2.1%
475 ITT Industries.................. 17,753
300 Magna International, Class A.... 20,588
-----------
38,341
-----------
BANKING--8.0%
725 First American.................. 34,891
300 First Chicago................... 26,588
550 Key............................. 19,594
1,037 North Folk Bancorp.............. 25,342
775 SLM Holding..................... 37,975
-----------
144,390
-----------
BEVERAGES, FOOD & TOBACCO--9.4%
575 General Mills................... 39,316
550 McCormick & Company............. 19,645
450 McDonald's...................... 31,050
675 Pepsico......................... 27,802
125 Ralston-Ralston Purina Group.... 14,602
1,350 Sysco........................... 34,594
-----------
167,009
-----------
CHEMICALS--0.9%
225 Du Pont (E.I.) De Nemours....... 16,791
-----------
COMMUNICATIONS--0.8%
600 Scientific-Atlanta.............. 15,225
-----------
COMPUTER SOFTWARE &
PROCESSING--4.7%
600 Ceridian........................ 35,250
575 Computer Associates
International................. 31,948
525 First Data Corporation.......... 17,489
-----------
84,687
-----------
COMPUTERS & INFORMATION--3.9%
800 Compaq Computer................. 22,700
950 Sun Microsystems*............... 41,266
500 Western Digital................. 5,906
-----------
69,872
-----------
ELECTRIC UTILITIES--1.0%
425 CMS Energy...................... 18,700
-----------
ELECTRONICS--3.5%
500 Intel........................... 37,063
400 Thomas & Betts.................. 19,700
200 Xilinx *........................ 6,800
-----------
63,563
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
ENTERTAINMENT & LEISURE--2.8%
900 Mattel.......................... $ 38,081
125 The Walt Disney Company......... 13,133
-----------
51,214
-----------
FINANCIAL SERVICES--2.7%
800 Federal National Mortgage
Association................... 48,600
-----------
FOREST PRODUCTS & PAPER--3.7%
550 Kimberly-Clark.................. 25,231
675 Mead............................ 21,431
500 Tenneco......................... 19,031
-----------
65,693
-----------
HEALTH CARE PROVIDERS--3.2%
775 Health Care & Retirement........ 30,564
1,000 Healthsouth..................... 26,688
-----------
57,252
-----------
HEAVY INDUSTRY--1.1%
300 Applied Materials............... 8,850
250 Ingersoll-Rand.................. 11,016
-----------
19,866
-----------
HOME CONSTRUCTION, FURNISHINGS &
APPLIANCES--5.2%
325 General Electric................ 29,575
275 Johnson Controls................ 15,727
975 Newell.......................... 48,563
-----------
93,865
-----------
INSURANCE--7.7%
300 Aetna........................... 22,838
575 Equitable Companies............. 43,089
350 Ohio Casualty................... 15,488
725 Reliastar Financial............. 34,800
375 Travelers Group................. 22,734
-----------
138,949
-----------
MEDICAL SUPPLIES--1.9%
450 Becton Dickinson & Company...... 34,931
-----------
OIL & GAS--8.5%
525 Mobil........................... 40,228
600 Noble Drilling.................. 14,438
300 Schlumberger.................... 20,494
550 Texaco.......................... 32,828
1,275 Williams Companies.............. 43,031
-----------
151,019
-----------
PHARMACEUTICALS--7.2%
675 Abott Laboratories.............. 27,591
550 Amgen........................... 35,956
275 Merck........................... 36,781
825 Sigma Aldrich................... 28,978
-----------
129,306
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE> 14
VALUE PLUS PORTFOLIO
SCHEDULE OF INVESTMENTS--CONTINUED
JUNE 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
- ------ -----------
<C> <S> <C>
COMMON STOCKS--CONTINUED
RETAILERS--4.9%
600 Consolidated Stores *........... $ 21,750
425 Federated Department Stores..... 22,870
725 Wal-Mart Stores................. 44,044
-----------
88,664
-----------
TELEPHONE SYSTEMS--5.0%
600 Alltel.......................... 27,900
650 Bell Atlantic................... 29,656
825 SBC Communications.............. 33,000
-----------
90,556
-----------
TRANSPORTATION--2.5%
325 Trinity Industries.............. 13,488
300 US Freightways.................. 9,853
950 Wisconsin Central Transport *... 20,781
-----------
44,122
-----------
TOTAL COMMON STOCKS
(COST $1,654,336)........................ 1,659,353
-----------
TOTAL INVESTMENTS AT VALUE--92.2%
(COST $1,654,336) (a).................... 1,659,353
CASH AND OTHER ASSETS
NET OF LIABILITIES--7.8%............... 140,228
-----------
NET ASSETS--100.0%....................... $ 1,799,581
===========
</TABLE>
- ------------------------------
NOTES TO THE SCHEDULE OF INVESTMENTS:
* Non-income producing security.
(a) The aggregate identified cost for federal income tax purposes
is $1,654,336, resulting in gross unrealized appreciation and
depreciation of $47,700 and $42,683, respectively, and net
unrealized appreciation of $5,017.
The accompanying notes are an integral part of the financial statements.
12
<PAGE> 15
SELECT ADVISORS VARIABLE INSURANCE TRUST
Statement of Assets and Liabilities
June 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO(b)
----------- ------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 1) (a) $25,960,094 $30,064,636 $34,859,991 $35,605,070 $21,607,755 $1,659,353
Cash 4,183,302 3,795,577 908,178 1,146,772 2,162 116,375
Receivables for:
Investments sold 427,317 354,738 -- 189,297 -- --
Fund shares sold 42,238 56,059 79,724 94,307 47,815 22,207
Dividends and interest 31,950 119,910 296,410 909,502 129,347 1,848
Open forward currency contracts -- 1,392 70,754 -- -- --
Deferred organization expenses (Note
1) 5,437 5,437 5,437 5,437 5,477 --
Reimbursement receivable from Sponsor
(Note 3) -- 69,145 -- -- 93,604 5,936
----------- ----------- ----------- ----------- ----------- ----------
Total assets 30,650,338 34,466,894 36,220,494 37,950,385 21,886,160 1,805,719
----------- ----------- ----------- ----------- ----------- ----------
LIABILITIES:
Payable for investments purchased 1,720,211 2,222,359 -- 450,000 -- 7,081
Distribution payable -- -- 192,991 346,660 94,107
Payable to Sponsor (Note 3) 63,620 -- 39,190 65,610 -- --
Other accrued expenses 29,474 42,500 27,936 23,702 30,344 (943)
----------- ----------- ----------- ----------- ----------- ----------
Total liabilities 1,813,305 2,264,859 260,117 885,972 124,451 6,138
----------- ----------- ----------- ----------- ----------- ----------
NET ASSETS: $28,837,033 $32,202,035 $35,960,377 $37,064,413 $21,761,709 $1,799,581
=========== =========== =========== =========== =========== ==========
Shares outstanding 1,771,259 2,170,628 2,417,751 3,475,446 2,175,732 182,947
=========== =========== =========== =========== =========== ==========
Net asset value $ 16.28 $ 14.84 $ 14.87 $ 10.66 $ 10.00 $ 9.84
=========== =========== =========== =========== =========== ==========
$23,233,335 $24,234,023 $32,700,799 $37,669,829 $21,607,925 $1,654,336
=========== =========== =========== =========== =========== ==========
</TABLE>
Statement of Operations
For the six months ended June 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1)
Interest $ 72,146 $ 51,194 $ 415,609 $1,771,552 $ 568,623 $ 1,533
Dividends 87,229 285,499(c) 119,632 -- -- 1,814
----------- ----------- ----------- ----------- ----------- ----------
Total investment income 159,375 336,693 535,241 1,771,552 568,623 3,347
----------- ----------- ----------- ----------- ----------- ----------
EXPENSES:
Investment advisory fees (Note 2) 95,275 120,604 116,119 104,768 24,088 1,158
Administration, fund accounting,
and custody fees 51,666 100,100 50,828 44,198 47,136 1,661
Sponsor fee (Note 2) 23,817 25,390 29,028 32,235 19,270 309
Auditing fees 7,935 8,867 5,519 8,768 5,173 3,237
Printing 5,951 9,917 7,935 9,916 9,917 1,494
Legal fees 1,984 1,984 1,984 1,984 2,480 996
Amortization of organization
expenses (Note 1) 1,937 1,937 1,937 1,937 1,949 --
Trustee fees (Note 2) 1,262 950 956 1,502 1,285 124
Miscellaneous Fees (1,415) 1,084 636 580 984 199
----------- ----------- ----------- ----------- ----------- ----------
Total expenses 188,412 270,833 214,942 205,888 112,282 9,178
Waiver of Sponsor fee (Note 2) (23,817) (25,390) (29,028) (32,235) (19,270) (309)
Reimbursement from Sponsor (Note
3) (27,638) (86,753) (55,280) (36,650) (44,836) (7,094)
----------- ----------- ----------- ----------- ----------- ----------
Net expenses 136,957 158,690 130,634 137,003 48,176 1,775
----------- ----------- ----------- ----------- ----------- ----------
NET INVESTMENT INCOME 22,418 178,003 404,607 1,634,549 520,447 1,572
----------- ----------- ----------- ----------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments 1,263,075 609,198 477,948 258,024 (3,214) (1,149)
Foreign currency -- (31,316) 12,049 -- -- --
----------- ----------- ----------- ----------- ----------- ----------
1,263,075 577,882 489,997 258,024 (3,214) (1,149)
----------- ----------- ----------- ----------- ----------- ----------
Net change in unrealized
appreciation (depreciation) on:
Investments (92,915) 4,418,453 967,219 (1,835,019) 33 5,017
Foreign currency -- (390) 55,889 -- -- --
----------- ----------- ----------- ----------- ----------- ----------
(92,915) 4,418,063 1,023,108 (1,835,019) 33 5,017
----------- ----------- ----------- ----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS): 1,170,160 4,995,945 1,513,105 (1,576,995) (3,181) 3,868
----------- ----------- ----------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 1,192,578 $ 5,173,948 $ 1,917,712 $ 57,554 $ 517,266 $ 5,440
=========== =========== =========== =========== =========== ==========
</TABLE>
- ------------------------------
(a) Cost of investments
(b) Portfolio commenced operations on May 1, 1998
(c) Net of foreign tax withholding of $42,731.
The accompanying notes are an integral part of the financial statements.
13
<PAGE> 16
SELECT ADVISORS VARIABLE INSURANCE TRUST
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMERGING GROWTH INTERNATIONAL EQUITY
PORTFOLIO PORTFOLIO
--------------------------- ---------------------------
FOR THE SIX FOR THE SIX
MONTHS ENDED FOR THE MONTHS ENDED FOR THE
JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED
1998 DECEMBER 31, 1998 DECEMBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 22,418 $ 33,227 $ 178,003 $ 101,104
Net realized gain (loss) 1,263,075 1,327,486 577,882 1,133,852
Net change in unrealized appreciation
(depreciation) (92,915) 2,197,739 4,418,063 577,604
----------- ----------- ----------- -----------
Net increase in net assets resulting from
operations 1,192,578 3,558,452 5,173,948 1,812,560
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (30,394) -- (70,264)
Realized capital gains -- (1,012,609) -- (995,634)
Distribution in excess of capital gains
Distribution in excess of net realized investment
income -- -- -- --
----------- ----------- ----------- -----------
Total dividends and distributions -- (1,043,003) -- (1,065,898)
----------- ----------- ----------- -----------
SHARE TRANSACTIONS:
Proceeds from shares sold 9,393,235 12,538,066 7,808,159 10,372,680
Reinvestment of dividends and distributions -- 1,043,003 -- 1,065,898
Cost of shares redeemed (1,165,730) (2,450,901) (482,803) (1,240,789)
----------- ----------- ----------- -----------
Net increase from share transactions 8,227,505 11,130,168 7,325,356 10,197,789
----------- ----------- ----------- -----------
Total changes in net assets 9,420,083 13,645,617 12,499,304 10,944,451
----------- ----------- ----------- -----------
NET ASSETS
Beginning of period 19,416,950 5,771,333 19,702,731 8,758,280
----------- ----------- ----------- -----------
End of period $28,837,033 $19,416,950 $32,202,035 $19,702,731
=========== =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital $24,613,269 $16,385,765 $25,610,460 $18,285,104
Undistributed net investment income 25,636 3,217 208,480 (56,246)
Accumulated net realized gain (loss) on investments 1,471,370 208,293 549,242 58,471
Net unrealized appreciation (depreciation) of
investments 2,726,758 2,819,675 5,833,853 1,415,402
----------- ----------- ----------- -----------
Net assets applicable to shares outstanding $28,837,033 $19,416,950 $32,202,035 $19,702,731
=========== =========== =========== ===========
SHARES OUTSTANDING (NOTE 1):
Shares sold 583,159 892,720 565,036 858,524
Reinvestment of dividends -- 69,673 -- 89,196
----------- ----------- ----------- -----------
583,159 962,393 565,036 947,720
Shares redeemed (72,859) (174,447) (35,381) (98,268)
----------- ----------- ----------- -----------
Net increase 510,300 787,946 529,655 849,452
Beginning of period 1,260,959 473,013 1,640,973 791,521
----------- ----------- ----------- -----------
End of period 1,771,259 1,260,959 2,170,628 1,640,973
=========== =========== =========== ===========
</TABLE>
- ------------------------------
(a) The Portfolio commenced operations May 1, 1998.
The accompanying notes are an integral part of the financial statements.
14
<PAGE> 17
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BALANCED INCOME OPPORTUNITY STANDBY INCOME VALUE PLUS
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------------------------- ---------------------------- ---------------------------- ---------------
FOR THE SIX FOR THE SIX FOR THE SIX FOR THE
MONTHS ENDED FOR THE MONTHS ENDED FOR THE MONTHS ENDED FOR THE PERIOD ENDED(a)
JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED JUNE 30,
1998 DECEMBER 31, 1998 DECEMBER 31, 1998 DECEMBER 31, 1998
(UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED) 1997 (UNAUDITED)
------------ ------------ ------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 404,607 $ 349,650 $ 1,634,549 $ 1,832,004 $ 520,447 $ 745,080 $ 1,572
489,997 1,435,996 258,024 191,074 (3,214) (8,448) (1,149)
1,023,108 475,638 (1,835,019) (528,803) 33 (382) 5,017
----------- ----------- ----------- ----------- ----------- ----------- ----------
1,917,712 2,261,284 57,554 1,494,275 517,266 736,250 5,440
----------- ----------- ----------- ----------- ----------- ----------- ----------
(352,041) (350,429) (1,449,017) (1,814,515) (520,447) (745,079) --
-- (1,314,627) -- (227,491) -- -- --
(496,586)
-- (5,844) -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- ----------
(352,041) (1,670,900) (1,449,017) (2,538,592) (520,447) (745,079) --
----------- ----------- ----------- ----------- ----------- ----------- ----------
12,642,900 13,559,392 11,495,118 19,127,540 9,868,843 19,020,895 1,794,432
159,050 1,670,900 1,102,357 2,538,593 506,922 743,655 --
(694,311) (228,301) (1,021,010) (2,010,537) (6,173,076) (11,298,653) (291)
----------- ----------- ----------- ----------- ----------- ----------- ----------
12,107,639 15,001,991 11,576,465 19,655,596 4,202,689 8,465,897 1,794,141
----------- ----------- ----------- ----------- ----------- ----------- ----------
13,673,310 15,592,375 10,185,002 18,611,279 4,199,508 8,457,068 1,799,581
----------- ----------- ----------- ----------- ----------- ----------- ----------
22,287,067 6,694,692 26,879,411 8,268,132 17,562,201 9,105,133 --
----------- ----------- ----------- ----------- ----------- ----------- ----------
$35,960,377 $22,287,067 $37,064,413 $26,879,411 $21,761,709 $17,562,201 $1,799,581
=========== =========== =========== =========== =========== =========== ==========
$33,029,648 $20,922,008 $39,182,450 $27,592,868 $21,774,652 $17,571,962 $1,794,141
47,096 14,838 212,031 543 -- 1,366 1,572
658,322 148,018 (265,073) (484,024) (12,773) (10,925) (1,149)
2,225,311 1,202,203 (2,064,995) (229,976) (169) (202) 5,017
----------- ----------- ----------- ----------- ----------- ----------- ----------
$35,960,377 $22,287,067 $37,064,413 $26,879,411 $21,761,710 $17,562,201 $1,799,581
=========== =========== =========== =========== =========== =========== ==========
862,220 967,476 1,030,466 1,651,438 986,200 1,900,755 182,977
10,696 120,806 98,966 224,056 50,684 74,322 --
----------- ----------- ----------- ----------- ----------- ----------- ----------
872,916 1,088,282 1,129,432 1,875,494 1,036,884 1,975,077 182,977
(48,064) (16,607) (93,059) (174,262) (616,877) (1,129,387) (30)
----------- ----------- ----------- ----------- ----------- ----------- ----------
824,852 1,071,675 1,036,373 1,701,232 420,007 845,690 182,947
1,592,899 521,224 2,439,073 737,841 1,755,724 910,034 --
----------- ----------- ----------- ----------- ----------- ----------- ----------
2,417,751 1,592,899 3,475,446 2,439,073 2,175,731 1,755,724 182,947
=========== =========== =========== =========== =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE> 18
- --------------------------------------------------------------------------------
SELECT ADVISORS VARIABLE INSURANCE TRUST
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TOUCHSTONE EMERGING GROWTH PORTFOLIO
-------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE FOR THE FOR THE FOR THE
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED(a)
1998 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 15.40 $ 12.20 $11.27 $10.10 $10.00
------- ------- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.01 0.03 0.04 0.11 0.04
Net realized and unrealized gain on
investments 0.87 4.06 1.22 1.87 0.06
------- ------- ------ ------ ------
Total from investment operations 0.88 4.09 1.26 1.98 0.10
------- ------- ------ ------ ------
LESS: DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income -- (0.03) (0.04) (0.15) --
Realized capital gains -- (0.86) (0.29) (0.66) --
------- ------- ------ ------ ------
TOTAL DIVIDENDS AND DISTRIBUTIONS -- (0.89) (0.33) (0.81) --
------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 16.28 $ 15.40 $12.20 $11.27 $10.10
======= ======= ====== ====== ======
TOTAL RETURN (c) 5.71% 33.67% 11.16% 19.57% 1.00%
RATIOS AND SUPPLEMENTAL DATA (d):
Net assets at end of period (000's) $28,837 $19,417 $5,771 $2,615 $2,020
Ratios to average net assets:
Expenses 1.15% 1.15% 1.15% 1.15% 1.15%
Net investment income 0.19% 0.27% 0.50% 1.09% 3.67%
Expenses, without waiver and reimbursement 1.58% 2.19% 3.22% 3.73% 11.08%
Portfolio Turnover 32% 88% 89% 101% 0%
</TABLE>
<TABLE>
<CAPTION>
TOUCHSTONE BALANCED PORTFOLIO
-------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE FOR THE FOR THE FOR THE
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED(a)
1998 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.99 $ 12.84 $11.48 $10.17 $10.00
------- ------- ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.17 0.31 0.30 0.32 0.05
Net realized and unrealized gain (loss) on
investments 0.87 2.05 1.60 2.15 0.12
------- ------- ------ ------ ------
Total from investment operations 1.04 2.36 1.90 2.47 0.17
------- ------- ------ ------ ------
LESS: DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (0.16) (0.32) (0.30) (0.37) --
Realized capital gains 0.00 (0.89) (0.24) (0.79) --
------- ------- ------ ------ ------
TOTAL DIVIDENDS AND DISTRIBUTIONS (0.16) (1.21) (0.54) (1.16) --
------- ------- ------ ------ ------
NET ASSET VALUE, END OF PERIOD $ 14.87 $ 13.99 $12.84 $11.48 $10.17
======= ======= ====== ====== ======
TOTAL RETURN (c) 7.44% 18.61% 16.78% 24.56% 1.70%
RATIOS AND SUPPLEMENTAL DATA (d):
Net assets at end of period (000's) $35,960 $22,287 $6,695 $2,895 $2,034
Ratios to average net assets:
Expenses 0.90% 0.85% 0.90% 0.90% 0.90%
Net investment income 2.79% 10.14% 2.76% 2.87% 4.26%
Expenses, without waiver and reimbursement 1.48% 1.28% 2.72% 3.46% 8.97%
Portfolio Turnover 16% 86% 75% 124% 3%
</TABLE>
- ------------------------------
(a) The Portfolio commenced operations on November 21, 1994.
(b) The Portfolio commenced operations on May 1, 1998.
(c) Total return is calculated without the effects of a sales charge. Total
returns would have been lower had certain expenses not been reimbursed or
waived during the period shown.
(d) Ratios are annualized. Portfolio turnover is not annualized.
The accompanying notes are an integral part of the financial statements.
16
<PAGE> 19
<TABLE>
<CAPTION>
TOUCHSTONE INTERNATIONAL EQUITY PORTFOLIO
---------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE FOR THE FOR THE FOR THE
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED(a)
1998 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
$ 12.01 $ 11.07 $ 10.00 $ 9.51 $10.00
-------- ------- ------- ------- ------
0.13 0.07 0.06 0.04 --
2.70 1.56 1.08 0.48 (0.49)
-------- ------- ------- ------- ------
2.83 1.63 1.14 0.52 (0.49)
-------- ------- ------- ------- ------
0.00 (0.05) (0.07) (0.03) --
0.00 (0.64) -- -- --
-------- ------- ------- ------- ------
0.00 (0.69) (0.07) (0.03) --
-------- ------- ------- ------- ------
$ 14.84 $ 12.01 $ 11.07 $ 10.00 $ 9.51
======== ======= ======= ======= ======
23.56% 14.76% 11.47% 15.45% (4.90)%
$ 32,202 $19,703 $ 8,758 $ 5,215 $4,757
1.25% 1.25% 1.25% 1.25% 1.25%
1.40% 0.71% 0.86% 0.46% 1.23%
2.13% 3.19% 3.03% 3.69% 5.58%
53% 149% 90% 86% 0%
<CAPTION>
TOUCHSTONE INCOME OPPORTUNITY PORTFOLIO
---------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE FOR THE FOR THE FOR THE
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED(a)
1998 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1997 1996 1995 1994
------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C>
$ 11.02 $ 11.21 $10.09 $ 9.42 $10.00
------- ------- ------ ------ ------
0.54 1.20 1.17 1.22 0.12
(0.42) 0.11 1.45 0.79 (0.70)
------- ------- ------ ------ ------
0.12 1.31 2.62 2.01 (0.58)
------- ------- ------ ------ ------
(0.48) (1.19) (1.17) (1.34) --
0.00 (0.31) (0.33) -- --
------- ------- ------ ------ ------
(0.48) (1.50) (1.50) (1.34) 0.00
------- ------- ------ ------ ------
$ 10.66 $ 11.02 $11.21 $10.09 $ 9.42
======= ======= ====== ====== ======
0.82% 12.03% 27.37% 23.35% (5.80)%
$37,064 $26,879 $8,268 $2,602 $1,883
0.85% 0.85% 0.85% 0.85% 0.85%
10.14% 10.93% 11.85% 12.81% 11.24%
1.28% 1.72% 2.85% 3.54% 11.56%
104% 189% 213% 104% 45%
</TABLE>
<TABLE>
<CAPTION>
TOUCHSTONE STANDBY INCOME PORTFOLIO TOUCHSTONE VALUE PLUS PORTFOLIO
--------------------------------------------------------------------------- -------------------------------
FOR THE SIX FOR THE
MONTHS ENDED FOR THE FOR THE FOR THE FOR THE PERIOD ENDED(b)
JUNE 30, YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED(a) JUNE 30,
1998 DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1998
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED)
------------ ------------ ------------ ------------ --------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 10.00 $ 10.01 $10.02 $10.03 $10.00 $10.00
-------- ------- ------ ------ ------ ------
0.27 0.54 0.52 0.56 0.05 0.01
0.00 (0.01) 0.00 (0.01) 0.03 (0.17)
-------- ------- ------ ------ ------ ------
0.27 0.53 0.52 0.55 0.08 (0.16)
-------- ------- ------ ------ ------ ------
(0.27) (0.54) (0.52) (0.56) (0.05) --
-- -- -- -- -- --
-------- ------- ------ ------ ------ ------
(0.27) (0.54) (0.52) (0.56) (0.05) --
-------- ------- ------ ------ ------ ------
$ 10.00 $ 10.00 $10.02 $10.02 $10.03 $ 9.84
======== ======= ====== ====== ====== ======
2.71% 5.41% 5.18% 5.90% 0.30% (1.60)%
$ 21,762 $17,562 $9,105 $5,790 $5,013 $1,800
0.50% 0.50% 0.50% 0.50% 0.50% 1.15%
5.40% 5.42% 5.15% 5.59% 4.90% 1.02%
1.17% 1.48% 1.54% 1.73% 3.67% 5.95%
245% 251% 143% 159% 56% 3%
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE> 20
SELECT ADVISORS VARIABLE INSURANCE TRUST
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Select Advisors Variable Insurance Trust (the "Trust") is registered under
the Investment Company Act of 1940, as amended, as an open-end management
investment company, and was organized as a Massachusetts business trust on
February 7, 1994. The Trust consists of six Portfolios: Emerging Growth
Portfolio, International Equity Portfolio, Balanced Portfolio, Income
Opportunity Portfolio, Standby Income Portfolio and Value Plus Portfolio
("Portfolios").
The Declaration of Trust permits the Trust to issue an unlimited number of
shares of beneficial interest. The Trust offers shares of beneficial interest of
each portfolio to separate accounts of Western-Southern Life Assurance Company
("Western-Southern") as a funding vehicle for certain variable annuity contracts
issued by Western-Southern through the separate accounts.
As of June 30, 1998, Touchstone Advisors, Inc., a subsidiary of
Western-Southern, and Western-Southern owned 100% of the outstanding shares of
the Trust.
The accounting policies are in conformity with generally accepted
accounting principles ("GAAP") for investment companies. The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the related amounts and disclosures in the
financial statements. Actual results could differ from these estimates.
The following is a summary of the significant accounting policies of the
Portfolios:
a) Investment Valuation. Securities for which market quotations are
readily available are valued at the last sale price on a national securities
exchange, or, in the absence of recorded sales, at the readily available closing
bid price on such exchanges, or at the quoted bid price in the over-the-counter
market. Securities quoted in foreign currencies are translated into U.S. Dollars
at the current exchange rate. Debt securities are valued by a pricing service
which determines valuations based upon market transactions for normal,
institutional-size trading units of similar securities. Securities or other
assets for which market quotations are not readily available are valued at fair
value in good faith in accordance with procedures established by the Trustees
using prices based upon yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers and general
market conditions. All debt securities with a remaining maturity of less than 60
days are valued at amortized cost, which approximates market.
b) Risks Associated with Foreign Investments. Some of the Portfolios may
invest in the securities of foreign issuers. Investing in securities issued by
companies whose principal business activities are outside the United States may
involve significant risks not present in domestic investments. For example,
there is generally less publicly available information about foreign companies,
particularly those not subject to the disclosure and reporting requirements of
the U.S. securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the Portfolio,
political or financial instability or diplomatic and other developments which
could affect such investments. Foreign stock markets, while growing in volume
and sophistication, are generally not as developed as those in the United
States, and securities of some foreign issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. In general, there is less overall governmental
supervision and regulation of foreign securities markets, broker-dealers, and
issuers than in the United States.
c) Foreign Currency Translation. The accounting records of the Portfolios
are maintained in U.S. dollars. The market value of investment securities, other
assets and liabilities and forward currency contracts denominated in foreign
currencies are translated into U.S. dollars at the prevailing exchange rates at
the end
18
<PAGE> 21
SELECT ADVISORS VARIABLE INSURANCE TRUST
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
of the period. Purchases and sales of securities, income receipts, and expense
payments are translated at the exchange rate prevailing on the respective dates
of such transactions. Reported net realized gains and losses on foreign currency
transactions represent net gains and losses from sales and maturities of forward
currency contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions and
the difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are not segregated in the statements
of operations from the effects of changes in market prices of these securities,
but are included with the net realized and unrealized gain or loss on
investments.
d) Investment Income. Dividend income is recorded on the ex-dividend date
for such dividend except that certain dividends from foreign securities where
the ex-dividend date has passed are recorded upon notification of the
ex-dividend date. Interest income, which includes the amortization of premium
and accretion of discount, if any, is recorded on an accrual basis. Dividend and
interest income is recorded net of foreign taxes where recovery of such taxes is
not assured.
e) Dividends and Distributions. Distributions to shareholders for the
Emerging Growth Portfolio, International Equity Portfolio, Balanced Portfolio,
Income Opportunity Portfolio, and Value Plus Portfolio are recorded by the
Portfolio on the ex-dividend date. It is the policy of the Standby Income
Portfolio to record income dividends daily and distribute them monthly.
Distributions to shareholders of net realized capital gains, if any, are
declared and paid annually.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from GAAP. Permanent book and tax basis
differences relating to shareholder distributions will result in
reclassifications to paid in capital. These differences which may result in
distribution reclassifications are primarily due to differing treatments for
foreign currency transactions, passive foreign investment companies (PFIC), and
losses deferred due to wash sales, paydown gains and losses on certain
securities and excise tax regulations. Undistributed net investment income and
accumulated net realized gains and losses may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
f) Federal Taxes. Each Portfolio of the Trust is treated as a separate
entity for federal income tax purposes. Each Portfolio's policy is to comply
with the provisions of the Internal Revenue Code of 1986, as amended, applicable
to regulated investment companies and to distribute substantially all its
income, including net realized capital gains, if any, within the prescribed time
periods. Accordingly, no provision for a federal income tax is necessary. The
Standby Income Portfolio has the following capital loss carryforwards that
expire as noted below:
<TABLE>
<S> <C> <C>
December 31, 2003 $1,112
December 31, 2005 $3,712
</TABLE>
Additionally, at December 31, 1997, the following Portfolios have net
capital losses attributable to security transactions incurred after October 31,
1997, which are treated as arising on the first day of the Portfolio's next
taxable year.
<TABLE>
<S> <C> <C>
International Equity Portfolio $ 22,354
Balanced Portfolio $ 37,583
Income Opportunity Portfolio $490,314
Standby Income Portfolio $ 6,101
</TABLE>
g) Forward Currency Contracts. Each Portfolio may enter into forward
foreign currency contracts to protect securities and related receivables and
payables against fluctuations in foreign currency rates. A
19
<PAGE> 22
SELECT ADVISORS VARIABLE INSURANCE TRUST
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
forward foreign currency contract is an agreement to buy or sell currencies of
different countries on a specified future date at a specified rate.
Risks associated with such contracts include the movement in the value of
the foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. The market value of the contract will fluctuate with
changes in currency exchange rates. Contracts are valued daily based on
procedures established by and under the general supervision of the Trustees of
the Trust and the change in the market value is recorded by the Portfolios as
unrealized appreciation or depreciation of forward foreign currency contracts.
As of June 30, 1998, the following Funds had the following open forward currency
contracts:
<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE UNREALIZED
FUND NAME MATURITY DELIVER/RECEIVE FOR VALUE GAIN/LOSS
--------- ------------- --------------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C>
INTERNATIONAL EQUITY
PORTFOLIO
Purchases 7/31/98 $ 452,735 FRF 2,739,735 $454,374 $ 1,639
7/6/98 67,096 GBP 40,264 67,218 122
Sales 7/2/98 GBP 4,859 $ 8,068 8,114 (46)
7/6/98 GBP 100,356 167,234 167,539 (305)
7/1/98 SEK 152,930 19,167 19,184 (18)
-------
$ 1,392
=======
BALANCED PORTFOLIO
Sales 9/22/98 GBP 117,800 $ 197,551 $195,792 $ 1,759
9/9/98 SAR 3,295,000 624,644 555,649 68,995
-------
$70,754
=======
</TABLE>
FRF = French Franc, GBP = Great British Pound, SAR = South African Rand,
SEK = Swedish Krona.
h) Organization Expense. Organization expenses were deferred and are
being amortized by each Portfolio on a straight-line basis over a five-year
period from commencement of operations. The amount paid by the Trust on any
redemption by Touchstone Advisors, Inc. or, any other then-current holder of the
organizational seed capital shares ("Initial Shares") of the Portfolio, will be
reduced by a portion of any unamortized organization expenses of the Portfolio
determined by the proportion of the number of the Initial Shares of the
Portfolio redeemed to the number of the Initial Shares of the Portfolio
outstanding after taking into account any prior redemptions of the Initial
Shares of the Portfolio.
i) Repurchase Agreements. Each Portfolio may invest in repurchase
agreements, which are agreements pursuant to which securities are acquired by
the Portfolio from a third party with the commitment that they will be
repurchased by the seller at a fixed price on an agreed upon date. Each
Portfolio may enter into repurchase agreements with banks or lenders meeting the
creditworthiness standards established by the Trust Board of Trustees. The
Portfolio, through its custodian, receives as collateral, delivery of the
underlying securities, whose market value is required to be at least 102% of the
resale price at the time of purchase. The resale price reflects the purchase
price plus an agreed upon rate of interest. In the event of counterparty default
the Portfolio has the right to use the collateral to offset losses incurred.
j) Securities Transactions. Securities transactions are recorded on a
trade date basis. For financial and tax reporting purposes, realized gains and
losses are determined on the basis of specific lot identification.
2. TRANSACTIONS WITH AFFILIATES
a) Sponsor. Touchstone Advisors, Inc. ("Sponsor"), a subsidiary of
Western-Southern, as sponsor to the Trust, pursuant to a Sponsor Agreement,
provides oversight of the various service providers to the Trust, including the
Trust's administrator, custodian and transfer agent. The Sponsor reserves the
right to receive a sponsor fee from each Portfolio on an annual basis up to
0.20% of average daily net assets of that
20
<PAGE> 23
SELECT ADVISORS VARIABLE INSURANCE TRUST
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
Portfolio. The Sponsor Agreement may be terminated by the Sponsor or by the
Trust on not less than 30 days prior written notice. The Sponsor has advised the
Trust that it will waive all fees under the Sponsor Agreement through December
31, 1998.
b) Investment Advisor. The Trust also has an investment advisory
agreement with the Sponsor. Under the terms of the investment advisory
agreement, each Portfolio pays a fee that is computed daily and paid monthly.
For the period ended June 30, 1998, each Portfolio incurred investment advisory
fees equal on an annual basis to the following percentages of the average daily
net assets of the Portfolio.
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS
-------- ------------- -------- ----------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Rate 0.80% 0.95% 0.80% 0.65% 0.25% .75%
</TABLE>
Fort Washington Investment Advisors, Inc., an affiliate of the Sponsor, is
the sub-advisor for the Standby Income Portfolio and the Value Plus Portfolio.
c) Trustees. Each Trustee who is not an "interested person," (as defined
in the Act), of the Trust, receives an aggregate of $5,000 annually, plus $1,000
per meeting attended, as well as reimbursement for reasonable out-of-pocket
expenses, from the Trust and from Select Advisors Trust A, Select Advisors Trust
C, and Select Advisors Portfolios, which are included in separate reports. For
the six months ended June 30, 1998, the Trust incurred $6,079 in Trustee fees.
3. EXPENSE REIMBURSEMENTS
The Sponsor has agreed to waive fees and reimburse each Portfolio so that,
following such waiver of fees and reimbursement, the aggregate total operating
expenses (excluding interest, taxes, brokerage commissions and extraordinary
expenses) of each Portfolio are not greater, on an annualized basis, than the
percentage of average daily net assets of the Portfolio listed below.
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS
-------- ------------- -------- ----------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Voluntary expense limit 1.15% 1.25% 0.90% 0.85% 0.50% 1.15%
Amount of Reimbursement $27,638 $86,753 $55,280 $36,650 $44,836 $7,094
</TABLE>
The Sponsor has advised the Trust that it will continue to waive fees and
reimburse each Portfolio as described above through December 31, 1998.
4. PURCHASES AND SALES OF INVESTMENT SECURITIES
Investment transactions (excluding purchases and sales of U.S. government
obligations, U.S. government agency obligations and short-term investments) for
the period ended June 30, 1998 were as follows:
<TABLE>
<CAPTION>
EMERGING INTERNATIONAL INCOME STANDBY VALUE
GROWTH EQUITY BALANCED OPPORTUNITY INCOME PLUS
----------- ------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cost of purchases $14,508,860 $19,116,611 $12,777,366 $42,960,044 $1,000,000 $1,695,719
Proceeds from sales 6,888,592 12,690,639 4,368,597 31,904,689 2,122,365 40,234
</TABLE>
Purchase and sales of U.S. government obligations for the period ended June
30, 1998 were as follows:
<TABLE>
<CAPTION>
BALANCED STANDBY INCOME
---------- --------------
<S> <C> <C>
Cost of purchases $3,756,086 $7,259,712
Proceeds from sales 0 5,551,244
</TABLE>
21
