EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
ANNUAL
REPORT
DECEMBER 31, 1995
PRIMELITE
VARIABLE ANNUITY
The information contained in this report is intended for general
informational purposes only. This report is not authorized for
distribution to prospective investors unless preceded or accompanied by
current Trust, Fund, and Separate Account prospectuses which contain
important information concerning the Trust, the Fund, the Company, and
its current public offering of variable annuity contracts.
Equi-Select Series Trust
Research Portfolio
Annual Report
For the Year Ended December 31, 1995
Table of Contents
Letter to Contract Owners
Management's Discussion and Analysis
Portfolio Performance Review
Exhibit 1 Portfolio Performance Graph
Equi-Select Series Trust Financial Statements
Report of Independent Auditors
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statements of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Trustees and Executive Officers
LETTER TO CONTRACT OWNERS AND MANAGEMENT'S DISCUSSION AND ANALYSIS
For the Year Ended December 31, 1995
Dear PrimElite Contract Owners:
Thank you for selecting the PrimElite Variable Annuity product.
I am pleased to present to you this annual report for the
Research Portfolio of the Equi-Select Series Trust.
During 1995 the stock market reached record levels and the bond
market also displayed a strong performance. These market
conditions have resulted in positive returns for the Research
Portfolio. The following information discusses how the 1995
market impacted the Research Portfolio and the financial
statements will illustrate the financial position and the
operations of the Portfolio.
The purpose of this section is to discuss and analyze the
performance of the Equi-Select Series Trust Research Portfolio.
This analysis should be read in conjunction with the financial
statements and related notes which appear elsewhere in this
report.
For the period January 1, 1995 to December 31, 1995, the total
return of the Research Portfolio was 36.58 percent. Exhibit 1
illustrates the growth of a $10,000 investment in the Research
Portfolio in comparison to its benchmark.
The Portfolio continues to invest in the "best ideas" of the MFS
Equity Research Department. Using a fundamental bottom-up
approach, MFS analysts have overweighted the following sectors
relative to the S&P 500: technology, health care, consumer
staples, and industrial goods and services.
In technology, the Portfolio is investing in companies with
continued strong earnings growth, such as Cadence Design Systems,
with its computer-aided design (CAD) products and Oracle. The
Portfolio's positions in computer software companies remain the
largest industry weighting within the technology sector due to
the proprietary nature of their products.
The Portfolio is also carrying a sizable weighting in the health
care sector. Even as the United States economy continues its
slowdown, health care companies should continue to show
attractive earnings growth due to new product introductions and
market growth.
Within the consumer staples sector, the analysts are emphasizing
companies with strong international franchises. These companies
rely upon unit volume growth for earnings growth rather than
price increases. Holdings in this sector include Pepsico,
Kimberly Clark, and Gillette, for example.
The analysts are emphasizing two themes within the industrial
goods and services sector. Both of these themes do not rely upon
a steady U.S. economy for earnings growth. The first theme is
farm equipment where the analysts believe the market will remain
strong due to export demand and the strong balance sheet of the
average farmer. The second theme is the consolidation of the
U.S. defense industry, which the analysts believe will continue
to benefit shareholders. Holdings in this industry include
McDonnell Douglas and General Dynamics.
We look forward to serving you and we are committed to offering
you attractive product features to assist you in meeting your
financial objectives.
Sincerely,
/s/ Paul R. Schlaack
Paul R. Schlaack
President and Chief Executive Officer
Equitable Investment Services, Inc.
President, Chairman, and Principal Executive Officer
Equi-Select Series Trust
EXHIBIT 1
COMPARISON OF $10,000
RESEARCH PORTFOLIO vs S&P 500 INDEX
For the period October 4, 1994 (Commencement of Investment Operations) to
December 31, 1995
The following performance graph provides comparative cumulative total returns
of the Research Portfolio versus the S&P 500 Index.
PERFORMANCE GRAPH
Research Portfolio S&P 500 Index
October 4, 1994 $10,000 $10,000
October 31, 1994 10,197 10,225
November 30, 1994 9,677 9,853
December 31, 1994 9,678 9,999
January 31, 1995 9,697 10,258
February 28, 1995 10,069 10,658
March 31, 1995 10,381 10,972
April 30, 1995 10,559 11,296
May 31, 1995 10,930 11,748
June 30, 1995 11,306 12,020
July 31, 1995 12,002 12,419
August 31, 1995 12,029 12,450
September 30, 1995 12,392 12,976
October 31, 1995 12,459 12,929
November 30, 1995 12,890 13,496
December 31, 1995 13,218 13,757
Since
Total Return* Inception 1995
_____________ _________ ______
Research Portfolio 32.18% 36.58%
S&P 500 Index 37.57% 37.59%
* "Total Return" is calculated including reinvestment of all income dividends
and capital gain distributions. The total return since inception represents
the time period October 4, 1994 (commencement of investment operations) to
December 31, 1995. Results represent past performance and do not indicate
future results. The value of an investment in any of the Portfolios and the
return on the investment both will fluctuate and redemption proceeds may be
higher or lower than an investor's original cost.
Total return does not reflect expenses that apply to the separate account or
related variable insurance contracts and inclusion of these charges would
result in reducing the total return figures for the period shown.
Report of Independent Auditors
TO THE CONTRACTHOLDERS AND TRUSTEES
EQUI-SELECT SERIES TRUST
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of the
Research Portfolio of Equi-Select Series Trust (the
"Portfolio", one of the portfolios constituting Equi-Select
Series Trust, the "Trust") as of December 31, 1995, and the
related statement of operations for the year then ended, and
the statements of changes in net assets and financial
highlights for the year then ended and for the period from
October 4, 1994 (commencement of operations) to December 31,
1994. These financial statements and financial highlights
are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance
about whether the financial statements and financial
highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and
brokers, or other appropriate auditing procedures where
replies from brokers were not received. An audit also
includes assessing the accounting principles used and
significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of the Research Portfolio
of Equi-Select Series Trust at December 31, 1995, the
results of its operations for the year then ended, and the
changes in its net assets and financial highlights for the
year then ended and for the period from October 4, 1994
(commencement of operations) to December 31, 1994, in
conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 9, 1996
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Security Description Shares Value
____________________ __________ __________
<S> <C> <C>
COMMON STOCK AND OTHER EQUITY
INTERESTS - 96.0%
Aerospace - 4.8%
General Dynamics Corporation 2,800 $ 165,550
Lockheed Martin Corporation 2,400 189,600
McDonnell Douglas Corporation 3,600 331,200
United Technologies Corporation 900 85,387
__________
771,737
Banks - 2.4%
Baybanks Incorporated (a) 1,300 127,725
Chase Manhattan Corporation 3,000 181,875
Northern Trust Corporation 1,400 78,400
__________
388,000
Broadcasting - 0.4%
Heritage Media Corporation 2,700 69,188
Business Services - 1.6%
Ceridian Corporation (a) 4,300 177,375
Interim Services Incorporated (a) 1,200 41,700
Technology Solutions Company (a) 1,900 37,050
__________
256,125
Chemicals - 1.9%
Air Products & Chemicals Incorporated 1,700 89,675
Hanna M.A. Company 1,700 47,600
Uniroyal Chemical Corporation (a) 7,100 58,575
W. R. Grace & Company 1,900 112,338
__________
308,188
Computers & Business Equipment - 0.9%
International Business Machines 1,500 137,625
Computer Software - 0.6%
Amisys Managed Care Systems Incorporated (a) 5,200 98,800
Computer Software - Systems - 3.9%
Affiliated Computer Services Incorporated,
Class A (a) 1,800 67,500
BMC Software Incorporated (a) 2,500 106,875
Cabletron Systems Incorporated (a) 2,700 218,700
Compaq Computer Corporation (a) 2,400 115,200
Sybase Incorporated (a) 3,300 118,800
__________
627,075
Conglomerates - 0.4%
Lasalle Re Holdings Limited (a) 2,800 64,050
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Security Description Shares Value
____________________ __________ __________
<S> <C> <C>
COMMON STOCK AND OTHER EQUITY INTERESTS (CONTINUED)
Consumer Goods & Services - 10.4%
Colgate Palmolive Company 3,500 $ 245,875
Duracell International Incorporated 3,700 191,475
Gillette Company 3,900 203,287
Nike Incorporated 3,200 222,800
Philip Morris Companies Incorporated 2,700 244,350
Procter & Gamble Company 3,000 249,000
Service Corp International 3,100 136,400
Stanley Works 3,700 190,550
__________
1,683,737
Containers & Glass - 0.8%
Intertape Polymer Group Incorporated 4,300 134,913
Domestic Oil - 2.5%
Coastal Corporation 4,700 175,075
Mobil Corporation 2,000 224,000
__________
399,075
Drugs & Health Care Services - 7.9%
Astra Ab (a) 5,700 225,778
Community Health Systems Incorporated (a) 2,800 99,750
Living Centers of America Incorporated (a) 1,900 66,500
Mariner Health Group Incorporated (a) 1,000 16,625
Pacificare Health Systems Incorporated (a) 100 8,700
Pacificare Health Systems Incorporated,
Class B (a) 1,600 139,200
St Jude Medical Incorporated (a) 4,250 182,750
United Healthcare Corporation 4,100 268,550
Uromed Corporation (a) 19,300 248,488
Zoll Medical Corporation (a) 3,300 29,700
__________
1,286,041
Electronics - 5.2%
ESS Technology Incorporated (a) 100 2,300
Intel Corporation 4,600 261,050
Loral Corporation 8,300 293,612
LSI Logic Corp (a) 1,200 39,300
National Semiconductor Corporation (a) 2,900 64,525
Xilinx Incorporated (a) 5,800 176,900
__________
837,687
Entertainment - 2.2%
Aztar Corporation (a) 20,300 162,400
Harrahs Entertainment Incorporated (a) 5,600 135,800
Showboat, Inc. 2,200 58,025
__________
356,225
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Security Description Shares Value
____________________ __________ __________
<S> <C> <C>
COMMON STOCK AND OTHER EQUITY
INTERESTS (CONTINUED)
Environmental Control - 1.2%
Tomra Systems As (a) 1,300 $ 10,262
WMX Technologies Incorporated 6,100 182,237
__________
192,499
Finance - 0.6%
Federal Home Loan Mortgage Corporation 1,100 91,850
Financial Services - 2.3%
Advanta Corporation, Class B 2,900 105,488
First Interstate Bancorp 1,000 136,500
Integra Financial Corporation 2,000 126,000
__________
367,988
Food & Beverages - 2.7%
Kellogg Company 1,900 146,775
Pepsico Incorporated 3,600 201,150
Universal Foods Corporation 2,400 96,300
__________
444,225
Food Processing - 2.2%
Campbell Soup Company 2,900 174,000
Nabisco Holdings Corporation 5,400 176,175
__________
350,175
Forest Products - 1.9%
Fort Howard Corporation New (a) 1,700 38,250
Kimberly Clark Corporation 3,300 273,075
__________
311,325
Gas Exploration - 1.6%
Enron Corporation 3,900 148,687
Union Pacific Resources Group Incorporated 4,100 104,038
__________
252,725
Hotels & Restaurants - 0.7%
Quantum Restaurant Group Incorporated (a) 600 6,750
Sonic Corporation (a) 5,750 109,250
__________
116,000
Industrial Machinery - 3.1%
Agco Corporation 4,000 204,000
Case Corporation 6,500 297,375
__________
501,375
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Security Description Shares Value
____________________ __________ __________
<S> <C> <C>
COMMON STOCK AND OTHER EQUITY
INTERESTS (CONTINUED)
Insurance - 7.7%
Aflac Incorporated 2,400 $ 104,100
American Re Corporation 2,000 81,750
Amerin Corporation (a) 2,500 66,875
Cigna Corporation 1,600 165,200
GCR Holdings Limited (a) 3,300 74,250
MBIA Incorporated 2,200 165,000
Penncorp Financial Group Incorporated 9,100 267,312
Prudential Reinsurance Holdings Incorporated 5,300 123,888
Sphere Drake Holdings Ltd. 5,100 71,400
Travelers Incorporated 2,100 132,037
__________
1,251,812
Lodging - 0.9%
HFS Incorporated 1,000 81,750
Promus Hotel Corporation (a) 2,850 63,413
__________
145,163
Medical Supplies - 2.8%
Medisense Incorporated (a) 11,100 351,037
Neuromedical Systems Incorporated 5,300 106,663
__________
457,700
Miscellaneous - 0.6%
Tv Francaise 900 96,488
Newspapers - 0.9%
New Straits Times 45,000 150,608
Oil & Gas - 0.3%
Seacor Holdings Incorporated (a) 1,900 51,300
Paper - 0.3%
Singapore Press Hd 3,000 53,022
Pharmaceuticals - 1.1%
Johnson & Johnson 900 77,063
Pfizer Incorporated 1,700 107,100
__________
184,163
Railroads & Equipment - 2.1%
CSX Corporation 3,400 155,125
Wisconsin Central Transportation Corporation (a) 2,700 177,525
__________
332,650
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Security Description Shares Value
____________________ __________ __________
<S> <C> <C>
COMMON STOCK AND OTHER EQUITY
INTERESTS (CONTINUED)
Retail - 6.0%
Alco Standard Corporation 3,700 $ 168,812
Circuit City Stores Incorporated 1,500 41,438
Giordano International 44,000 37,556
Gymboree Corporation (a) 6,900 142,312
Hennes & Mauritz 900 50,153
Hollywood Entertainment Corporation (a) 2,600 21,775
Home Depot Incorporated 1,900 90,963
Lowes Cos Incorporated 2,100 70,350
Micro Warehouse Incorporated (a) 3,200 138,400
Nine West Group Incorporated (a) 700 26,250
Office Depot Incorporated (a) 5,200 102,700
York International Corporation 1,600 75,200
__________
965,909
Software - 8.4%
Adobe Systems Incorporated 2,600 161,200
Cadence Design Systems Incorporated (a) 6,600 277,200
Cisco Systems Incorporated (a) 1,900 141,787
Computer Associates International Incorporated 2,300 130,813
Compuware Corporation (a) 3,500 64,750
Electronic Arts (a) 4,600 120,175
Microsoft Corporation (a) 2,200 193,050
Oracle Systems Corporation (a) 6,500 275,437
__________
1,364,412
Telecommunications - 0.4%
Telephone & Data Systems Incorporated 1,600 63,200
Toys & Amusements - 1.2%
Tyco International Ltd 5,500 195,938
Utilities - 1.1%
Ericsson Lm Telephone (a) 3,400 66,569
Tele Danmark, ADR 2,300 63,537
Telecom Italia Mobile 42,800 45,007
__________
175,113
__________
TOTAL COMMON STOCK AND OTHER
EQUITY INTERESTS - (Cost $13,848,392) 15,534,106
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
SCHEDULE OF INVESTMENTS
December 31, 1995
<TABLE>
<CAPTION>
Principal
Security Description Amount Value
____________________ __________ __________
<S> <C> <C>
SHORT TERM INVESTMENTS - 5.2%
Federal Agencies - 5.2%
Federal Home Loan Mortgage Discount Notes
5.750%, 01/02/1996 $ 850,000 $ 849,864
___________
TOTAL SHORT TERM INVESTMENTS - (Cost $849,864) 849,864
___________
TOTAL INVESTMENTS - (Cost $14,698,256) - 101.2% 16,383,970
OTHER ASSETS LESS LIABILITIES - (1.2)% (198,168)
___________
NET ASSETS - 100.0% $16,185,802
===========
<FN>
The percentage shown for each investment category is the total value of
that category as a percentage of the net assets of the portfolio.
(a) Non-income producing securities.
ADR - American Depository Receipts.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (a) $16,383,970
Cash, including foreign currency, at value 77,386
Receivable for securities sold 206,785
Receivable for currency sold 105,297
Dividends receivable 14,027
Receivable for fund shares sold 69,710
Receivable due from Investment Adviser (Note 3) 17,111
Foreign income tax reclaim receivable 415
Prepaid insurance 1,859
Deferred organization costs 9,259
___________
TOTAL ASSETS 16,885,819
LIABILITIES
Payable for securities purchased 226,423
Payable for currency purchased 143,555
Distributions payable 274,475
Payable due to Investment Adviser (Note 3) 18,976
Accounts payable and accrued expenses 36,588
___________
TOTAL LIABILITIES 700,017
___________
NET ASSETS $16,185,802
===========
NET ASSETS CONSIST OF:
Paid-in capital (Note 5) $14,394,242
Undistributed net investment income (Note 2) 163
Accumulated net realized gain on Investments and
foreign currency transactions 105,882
Net unrealized appreciation (depreciation) of:
Investments 1,685,714
Foreign currency translations (199)
___________
NET ASSETS $16,185,802
===========
NET ASSET VALUE PER SHARE
Offering and redemption price per share
(based on shares of beneficial interest outstanding) $ 12.88
Total shares outstanding at end of period 1,256,727
(a) Investments in securities, at cost $14,698,256
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
STATEMENT OF OPERATIONS
For the year ended December 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 47,638
Dividend income 71,217
Foreign taxes withheld (882)
__________
TOTAL INVESTMENT INCOME 117,973
EXPENSES
Investment adviser fee (Note 3) 55,590
Administration fee 5,349
Audit fee 7,000
Custodian fees and expenses 78,493
Trustee's fees (Note 3) 4,750
Legal fee 10,536
Insurance expense 3,635
Transfer agent expense 3,485
Amortization of organization expense 2,471
Miscellaneous expense 854
__________
Total operating expenses before waiver and reimbursement 172,163
Fees waived by the Investment Adviser (Note 3) (29,925)
Expenses reimbursed by the Investment Adviser (Note 3) (64,458)
__________
NET EXPENSES 77,780
__________
NET INVESTMENT INCOME 40,193
NET REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on:
Investments 352,255
Foreign currency transactions 9,912
Change in unrealized appreciation (depreciation) of:
Investments 1,725,239
Foreign currency translations (197)
__________
NET REALIZED AND UNREALIZED GAIN 2,087,209
__________
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $2,127,402
==========
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
For the period ended December 31, 1994* and the year ended December 31, 1995
<TABLE>
<S> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
FOR THE PERIOD ENDED DECEMBER 31, 1994:
Net investment income $ 14,568
Net realized gain (loss) on:
Investments (21,842)
Foreign currency transactions 57
Change in unrealized depreciation of:
Investments (39,526)
___________
Net decrease in net assets resulting from operations (46,743) )
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (14,568)
In excess of net investment income (58)
FUND SHARE TRANSACTIONS (Note 5) 1,677,890
___________
TOTAL INCREASE IN NET ASSETS 1,616,521
NET ASSETS:
Beginning of period 10,000
___________
End of period $ 1,626,521
===========
INCREASE IN NET ASSETS FROM OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995:
Net investment income $ 40,193
Net realized gain on:
Investments 352,255
Foreign currency transactions 9,912
Change in unrealized appreciation (depreciation) of:
Investments 1,725,239
Foreign currency translations (197)
___________
Net increase in net assets resulting from operations 2,127,402
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (39,939)
Distributions from net realized gains on investments (234,536)
___________
FUND SHARE TRANSACTIONS (Note 5) 12,706,354
___________
TOTAL INCREASE IN NET ASSETS 14,559,281
NET ASSETS:
Beginning of period 1,626,521
___________
End of period (a) $16,185,802
===========
(a) Including undistributed net investment income $ 163
===========
<FN>
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Net
Realized
and
Unrealized
Net Asset Gain(Loss)
Value at Net on
Beginning Investment Invest-
of Period Income(1) ments
_____________ _____________ _____________
<S> <C> <C> <C>
Year ended December 31, 1995 $ 9.59 $0.03 $3.48
Period ended December 31, 1994* 10.00 0.09 (0.41)
<FN>
(1) Net investment income is after reimbursement of certain fees and expenses
by Equitable Investment Services, Inc. ("EISI") (See Note 3 to the finan-
cial statements). Had EISI not undertaken to reimburse expenses related
to the Portfolio, net investment loss per share and ratio of operating
expenses to average net assets would have been as follows for the year
ended December 31, 1995 and the period ended December 31, 1994,
respectively: $(0.04) and 2.48%, $(0.04) and 7.48%.
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Total Distributions Net
from from Net Capital
Investment Investment Gains
Operations Income Distributions
_____________ _____________ _____________
<S> <C> <C> <C>
Year ended December 31, 1995 $3.51 $(0.03) $(0.19)
Period ended December 31, 1994* (0.32) (0.09) (0.00)
<FN>
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Net Asset
Value at
Total End Total
Distribution of Period Return(2)
_____________ _____________ _____________
<S> <C> <C> <C>
Year ended December 31, 1995 $(0.22) $12.88 36.58%
Period ended December 31, 1994* (0.09) 9.59 (3.22)
<FN>
(2) Total return figures are not annualized for periods less than one year.
Total return does not reflect expenses that apply to the separate account
or related variable insurance contracts and inclusion of these charges
would result in reducing the total return figures for the period shown.
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Ratio Ratio of Net
of Operating Investment
Net Assets Expenses to Income
End Average Net to Average
of Period Assets(1)(3) Net Assets(3)
_____________ _____________ _____________
<S> <C> <C> <C>
Year ended December 31, 1995 $16,185,802 1.12% 0.58%
Period ended December 31, 1994* 1,626,521 0.75 4.65
<FN>
(1) Net investment income is after reimbursement of certain fees and expenses
by Equitable Investment Services, Inc. ("EISI") (See Note 3 to the finan-
cial statements). Had EISI not undertaken to reimburse expenses related
to the Portfolio, net investment loss per share and ratio of operating
expenses to average net assets would have been as follows for the year
ended December 31, 1995 and the period ended December 31, 1994,
respectively: $(0.04) and 2.48%, $(0.04) and 7.48%.
(3) Annualized for periods less than one year.
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period indicated)
<TABLE>
<CAPTION>
Portfolio
Turnover
Rate(4)
_____________
<S> <C>
Year ended December 31, 1995 83%
Period ended December 31, 1994* 85
<FN>
(4) Portfolio turnover rates are not annualized.
* For the period October 4, 1994 (commencement of investment operations)
through December 31, 1994.
</TABLE>
See accompanying notes.
EQUI-SELECT SERIES TRUST
RESEARCH PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1 - ORGANIZATION
Equi-Select Series Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as a no load, open-end management
investment company. The Trust was organized as a Massachusetts business
trust on May 11, 1994, and offers ten portfolios, including the Research
Portfolio ("Portfolio"). On September 15, 1994, Equitable Life Insurance
Company of Iowa made the initial purchase of shares of beneficial interest
in the amount of 1,000 shares of the Portfolio. The shares of the Trust
will be sold to certain life insurance companies' separate accounts to fund
the benefits under variable annuity contracts issued by such life insurance
companies, including Equitable Life Insurance Company of Iowa. The Trust
began investment operations on October 4, 1994 with the infusion of working
capital into the Trust by Equitable Life Insurance Company of Iowa.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements.
Estimates - The preparation of the financial statements in conformity with
generally accepted accounting principles may require management to make
certain estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of these financial statements and the
reported amounts of income and expenses during the reporting period.
Actual results could differ from those estimates.
Valuation of Investments - Portfolio securities traded on a national
securities exchange or quoted on the NASDAQ National Market System are
valued at the last reported sale price on the principal exchange or
reported by NASDAQ or, if there is no reported sale, and in the case of
over-the-counter securities not included on NASDAQ, at a bid price. Debt
securities, including zero-coupon securities, and certain foreign
securities are valued by a pricing service. Securities for which current
market quotations are not readily available are valued at fair value as
determined in good faith by the Trustees, or by an individual acting under
the direction of the Trustees. Prices for securities primarily traded in
foreign markets are expressed in the local currency's value and are
translated into U.S. dollars at the current rate of exchange. Short-Term
securities, including all debt securities with a remaining maturity of 60
days or less, are valued at their amortized cost, which approximates market
value.
Repurchase Agreements - In connection with transactions in repurchase
agreements, the Trust's custodian takes possession of the underlying
collateral securities, the value of which is at least equal to the
principal amount, including interest, of the repurchase agreement. To the
extent that the term of any repurchase agreement exceeds one business day,
the value of the collateral is marked-to-market on a daily basis to ensure
the adequacy of the collateral. In the event of default of the obligation
to repurchase, the Trust has the right to liquidate the collateral and
apply the proceeds in satisfaction of the obligation. Under certain
circumstances, in the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral or proceeds
may be subject to legal proceedings.
NOTE 2 (CONTINUED)
Investment Transactions - Investment security transactions are recorded on
a trade date basis. Realized gains and losses from security transactions
are determined on the basis of identified cost.
Investment Income - Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed are recorded as income when the Trust is informed of the
dividend. Interest income, which includes accretion of original discount,
is accrued as earned. Investment income is recorded net of foreign taxes
withheld where recovery of such taxes is uncertain.
Foreign Currency Translations - The records of the Trust are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at
a current rate of exchange of such currency to determine the value of
investments, other assets and liabilities. Purchases and sales of
securities and income and expenses are converted at the prevailing rate of
exchange on the respective dates of such transactions.
The Portfolio may realize currency gains or losses between the trade and
settlement dates on security transactions. To minimize such currency gains
or losses, the Portfolio may enter into a foreign currency exchange
contract for the purchase or sale, for a fixed amount of U.S. dollars, of
an amount of the foreign currency required to settle the security
transaction.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Portfolio on each day and the resulting net
unrealized appreciation, depreciation and related net receivable or payable
amounts are determined by using forward currency exchange rates supplied by
a quotation service.
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 security
transactions, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received.
Forward Currency Contracts - A forward foreign currency contract
("Forward") is an agreement between two parties to buy and sell a currency
at a set price on a future date. The market value of the Forward
fluctuates with changes in currency exchange rates. The Forward is marked-
to-market daily and the change in the market value is recorded by the
Portfolio as an unrealized gain or loss. When the Forward is closed, the
Portfolio records a realized gain or loss equal to the difference between
the value at the time it was opened and the value at the time it was
closed. The Portfolio could be exposed to risk if a counterparty is unable
to meet the terms of the contract or if the value of the currency changes
unfavorably. The Portfolio may enter into Forwards in connection with
planned purchases and sales of securities, to hedge specific receivables or
payables against changes in future exchange rates or to hedge the U.S.
dollar value of portfolio securities denominated in a foreign currency.
Currency Call and Put Options - A call option written by the Portfolio
obligates the Portfolio to sell specified currency to the option holder at
a specified price at any time before the expiration date. A put option
written by the Portfolio obligates the Portfolio to purchase specified
currency from the option holder at a specified price at any time before the
NOTE 2 (CONTINUED)
expiration date. These transactions involve a risk that the Portfolio may,
upon exercise of the option, be required to sell currency at a price that
is less than its market value or be required to purchase currency at a
price that exceeds its market value. The Portfolio may also realize gains
or losses by entering into closing purchase transactions identical to call
or put options that have been written by the Portfolio in order to
terminate its obligation under a call or put option. In determining the
amount of gain or loss realized, the option premium paid and related
transactions costs are added to the exercise price.
Dollar Roll Transactions -- The Portfolio may enter into dollar roll
transactions, in which the Portfolio sells securities for delivery in the
current month and simultaneously contracts to repurchase substantially
similar (same type, same or similar interest rate and maturity) securities
on a specified future date. During the roll period the Portfolio forgoes
principal and interest paid on the securities. The Portfolio accounts for
such dollar rolls as financing transactions, and is compensated by the
interest earned on the cash proceeds of the initial sale and by the lower
repurchase price at the future date. To the extent that the Portfolio has
commitments under dollar roll transactions, liquid, high grade debt
securities are segregated in an amount equivalent to these obligations.
There were no dollar roll commitments outstanding at December 31, 1995.
Expenses - Expenses directly attributable to the Portfolio are charged to
the Portfolio. Expenses not directly attributable to the Portfolio are
allocated among the Trust's Portfolios, including the Research Portfolio.
Certain costs incurred in connection with the organization of the Trust and
each Portfolio have been deferred and are being amortized on a straight
line basis over a five year period.
Distributions to Shareholders - The Portfolio declares and distributes
dividends from net investment income and distributes its net realized
capital gains, if any, at least annually. All distributions are paid in
shares of the Portfolio at net asset value. Income and capital gain
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for market discount,
foreign currency transactions, losses deferred due to wash sales, "post
October 31 losses" and excise tax regulations. Distributions are recorded
on the ex-dividend date.
Federal Income Taxes - The Portfolio is treated as a separate entity for
federal tax purposes. The Portfolio intends to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986. By so qualifying, the Portfolio will not be subject to
federal income taxes to the extent that it distributes all of its taxable
income, including realized capital gains, for the fiscal year. In
addition, by distributing substantially all of its net investment income,
capital gains and certain other amounts during the calendar year, the
Portfolio will not be subject to a federal excise tax. On December 29,
1995 the Portfolio declared a capital gain distribution of $13,373 and
$0.011 per share.
NOTE 3 - AGREEMENTS AND FEES
The Trust has entered into an Investment Advisory Agreement (the
"Agreement") with Equitable Investment Services, Inc. ("EISI"), under which
EISI manages the business and affairs of the Portfolio and the Trust.
Under the Agreement, the Portfolio pays EISI a monthly fee at the annual
rate based on the average daily net assets of the Portfolio as follows:
Advisory Fees
-------------
0.80 % of first $300 million
0.55 % in excess of $300 million
EISI has voluntarily agreed to waive its Advisory fees for the Portfolio
for the initial twelve months of the Portfolio's operations (until October
6, 1995), or until the net assets of the Portfolio equal or exceed $25
million, whichever is earlier. For the period of January 1, 1995 through
October 5, 1995 such waivers amounted to $29,925. Effective October 6,
1995 EISI no longer waives its advisory fees.
EISI has entered into Sub-Advisory Agreement (the "Agreement") with
Massachusetts Financial Services Company (MFS). The fees payable to MFS
under the Sub-Advisory Agreement are borne by EISI, and the Portfolio does
not bear the direct cost of the sub-advisory activities.
EISI has further agreed to reimburse the Portfolio to the extent necessary
to limit the Portfolio's annual expenses (excluding the advisory fee) to
0.75% of the Portfolio's average daily net assets through October 5, 1995.
Beginning October 6, 1995, EISI has agreed to reimburse the Portfolio for
all expenses (excluding the advisory fee) that exceed .75% of the average
daily net assets of the Portfolio. This undertaking is subject to
termination at any time without notice to shareholders. For the year ended
December 31, 1995 EISI had agreed to reimburse the Portfolio $64,458 for
expenses in excess of the voluntary expense limitation, of which $17,111
was owed to the Portfolio as of December 31, 1995.
Each Trustee of the Trust who is not an interested person of the Trust or
Adviser or Sub-Adviser receives an annual fee of $6,000 and an additional
fee of $1,500 for each Trustees' meeting attended.
NOTE 4 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
all short-term securities for the Portfolio, for the year ended December
31, 1995, were as follows:
<TABLE>
<CAPTION>
Non-U.S. U.S. Non-U.S. U.S.
Government Government Government Government
Purchases Purchases Sales Sales
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Research $17,367,016 $91,718 $5,407,438 $27,150
</TABLE>
NOTE 4 (CONTINUED)
The identified cost of investments in securities owned by the Portfolio for
federal income tax purposes, and the respective gross unrealized
appreciation and depreciation at December 31, 1995, were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Identified Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Research $14,710,261 $1,956,967 $283,258 $1,673,709
</TABLE>
NOTE 5 - SHAREHOLDER TRANSACTIONS:
Transactions in shares and dollars were as follows:
<TABLE>
<CAPTION>
Research Portfolio
Year Ended October 7, 1994*
December 31, 1995 to December 31, 1994
_________________________ _________________________
Shares Dollars Shares Dollars
____________ ____________ ____________ ____________
<S> <C> <C> <C> <C>
Shares sold 1,204,516 $14,162,794 168,535 $1,677,959
Shares issued to share-
holders in reinvestment
of dividends 1,537 14,626 -- --
Shares redeemed (118,854) (1,471,066) (7) (69)
____________ ____________ ____________ ____________
Net increase 1,087,199 $12,706,354 168,528 $1,677,890
============ ============ ============ ============
<FN>
*Date of commencement of investment operations.
</TABLE>
EQUI-SELECT SERIES TRUST
____________________
TRUSTEES AND EXECUTIVE OFFICERS
Paul R. Schlaack, Trustee, Principal Executive Officer and President *
Thomas W. Bedell, Trustee
J. Michael Earley, Trustee
R. Barbara Gitenstein, Trustee
Stanley B. Seidler, Trustee
Paul E. Larson, Treasurer and Principal Financial Officer
John A. Merriman, Secretary
David A. Terwilliger, Principal Accounting Officer
* Interested Trustee
____________________
Ernst & Young LLP, Independent Auditors
Blazzard, Grodd & Hasenauer, P.C., Legal Counsel
Equitable Investment Services, Inc., Investment Adviser
The information contained in this report is intended for general
informational purposes only. This report is not authorized for
distribution to prospective investors unless preceded or accompanied by
current Trust and Separate Account prospectuses which contain important
information concerning the Trust, the Company, and its current public
offering of variable annuity contracts.
The PrimElite Variable Annuity is distributed by Equitable of Iowa Securities
Network, Inc., an affiliate of Equitable Life Insurance Company of Iowa.
EQUITABLE LIFE OF IOWA
P.O. BOX 9271, DES MOINES, IA 50306-9271
