Table of Contents
1 Letter from the Chairman
Performance & Commentary
2 Growth and Income
3 Capital Growth
4 International Equity
5 Asset Allocation
6 U.S. Treasury Income
7 Money Market
Portfolio of Investments
8 Growth and Income
10 Capital Growth
11 International Equity
15 Asset Allocation
17 U.S. Treasury Income
17 Money Market
Mutual Fund Variable Annuity Trust
18 Statement of Assets & Liabilities
19 Statement of Operations
20 Statement of Changes in Net Assets
20 Selected Per Share Data and Ratios
21-24 Notes to Financial Statements
25 Report of Independent Accountants
26-33 Shareholder Meeting Results
INVESTMENTS IN VISTA CAPITAL ADVANTAGE ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY AND ARE NOT DEPOSITS OF,
ENDORSED BY, OR GUARANTEED BY, CHASE. INVESTMENTS IN VISTA CAPITAL ADVANTAGE,
INCLUDING THE UNDERLYING VARIABLE INVESTMENT OPTIONS, ARE SUBJECT TO RISK,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.
1
<PAGE>
Letter from the Chairman
[Vista Capital "triple-swash" logo]
October 28, 1996
Dear Vista Capital Advantage Investor:
We are pleased to present this Annual Report on the six portfolios
underlying the Vista Capital Advantage Variable Annuity for the period ended
August 31, 1996. Depending on your asset allocation, one or more of these
portfolios underlie your Vista Capital Advantage Variable Annuity investment.
Vista Capital Advantage offers you the opportunity to diversify your
assets among a variety of investments. The principle of diversification was
important over the past year as the U.S. stock and bond markets turned in
widely-divergent performance while international stocks lagged their U.S.
counterparts. This report summarizes the performance of each portfolio in
light of major events in the financial markets, giving you the opportunity to
monitor your individual investment choices.
Important Information about a
Special Meeting of Shareholders
We are pleased to report that, on April 16, 1996, a Special Meeting of
shareholders was held at which 11 trustees were elected. On page 28 of this
report, you will find a list of the members as well as the results of other
proposals that were voted on in your Proxy Ballot. The Proxy Statement was
dated March 15, 1996.
In addition, please note that the name of the Mutual Fund Variable Annuity
Trust's U.S. Treasury Income Portfolio will be changed to U.S. Government
Income Portfolio, and its investment restrictions modified, as was detailed
in your Proxy Statement.
Bull Market Continues for U.S. Stocks
While Bond Market Trails
Despite a few bumps along the way, the U.S. stock market continued its
positive performance over the past year, with the major indexes once again
reaching new highs. Stronger-than-expected economic growth, respectable
corporate earnings growth and strong inflows of investors' cash provided the
underpinnings for the ongoing advance.
After an excellent showing in late 1995 and early 1996, the U.S. bond
market rally ended in February when unexpected signs of economic growth
prevented the Federal Reserve Board from lowering interest rates, a move many
investors had anticipated. From that point forward, bond markets were
volatile as no real consensus emerged on whether economic growth was strong
enough to spark inflation and cause the Fed to raise rates.
Most International Stock Markets Trail U.S.
Optimism about economic recovery in Europe and Japan proved to be
premature. European economies continued to struggle as governments across the
continent undertook the austerity programs necessary to reach the Maastricht
criteria for currency convergence. Japan's long-awaited recovery appeared
evident in the second quarter of 1996 and sparked a strong market rally, but
stocks fell on subsequent reports of weaker growth. The emerging markets of
Southeast Asia did not meet performance expectations, while most Latin
American countries continued their recoveries and fiscal reforms.
I encourage you to think about your long-term investment goals and to
consider an appropriate combination of portfolios within Vista Capital
Advantage. If you have any questions, please do not hesitate to call your
investment professional or 1-800-90-VISTA.
Sincerely,
/s/ Fergus Reid
Fergus Reid
Chairman
1
<PAGE>
Growth and Income Portfolio
The Growth and Income Portfolio seeks to provide long-term capital
appreciation and dividend income primarily through diversified holdings of
common stocks.
In conjunction with rising U.S. equity markets, the Growth and Income
Portfolio was a solid performer for the year ended August 31, 1996, providing
investors with an average annual total return of 16.24%. Despite two distinct
market selloffs during the period, the Portfolio benefited from the
management team's disciplined, value-oriented approach to sector allocation
and individual stock selection.
The stock market was continuing its rally as the period began, but stumbled
slightly with a broad selloff of technology issues in November, 1995. By that
time the Portfolio had taken a slightly defensive stance and was, therefore,
well-positioned.
Economy's Strength Surprises Many
As 1996 began, many investors expected that slower economic growth would lead
the Federal Reserve Board to cut short-term interest rates. When
unanticipated signs of strength were revealed, the stock market continued its
advance while bonds fell sharply. The Portfolio took on a slight cyclical
bias throughout most of the first half of 1996, favoring companies that tend
to do well in a growing economy.
By June, based on the management team's expectation that the economy would
slow during the rest of the calendar year, the Portfolio's cyclical exposure
was reduced, which was highly-beneficial during the brief market correction
in July. The management team took advantage of the mid-summer volatility by
seeking to purchase quality stocks at attractive prices, particularly within
the technology area.
Manager Sees Stock-Picking Key Issue
As the reporting year ended, the Portfolio had an overweight position in
technology and financial stocks relative to its index and only a neutral
market weighting in cyclical stocks. Foreseeing no dramatic shifts over the
coming months, the manager had constructed a Portfolio reasonably balanced
among industry sectors and looks to take advantage of any future market
volatility by looking to purchase high-quality stocks on weakness. In this
environment, disciplined stock selection by the Vista Capital Advantage
management team may prove particularly valuable.
Life of Portfolio Performance
A $10,000 tax-deferred investment in the Growth and Income Portfolio at NAV
(Net Asset Value) would have grown to $13,344 from inception on 3/1/95
through 8/31/96.*
Investment Results
Average Annual Total Return as of 8/31/96*
One Year 16.24%
Since Inception (3/1/95) 21.16%
***********************************[Line Chart]********************************
Growth & S&P
Income 500
------ ---
Mar-95 10270 10294
Apr-95 10410 10597
May-95 10730 11020
Jun-95 11000 11276
Jul-95 11460 11649
Aug-95 11480 11678
Sep-95 11710 12171
Oct-95 11480 12127
Nov-95 11960 12659
Dec-95 12150 12903
Jan-96 12538 13342
Feb-96 12768 13466
Mar-96 13019 13596
Apr-96 13229 13796
May-96 13375 14151
Jun-96 13344 14205
Jul-96 12894 13578
Aug-96 13344 13865
*******************************************************************************
* Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemeed,
may be worth more or less than the original cost.
Hypothetical $10,000 investment assumes an initial investment on 3/1/95 shows
changes in Net Asset Value and reinvestment of all distributions, but does
not include the effect of any insurance charges or the annual maintenance
fee. The illustration above would be reduced if these fees were reflected.
There is no direct correlation between a hypothetical investment and the
anticipated performance of the Portfolio. The investment adviser is currently
waiving certain fees. This voluntary waiver may be modified or terminated at
any time, which would reduce performance.
The Standard & Poor's 500 Index is an unmanaged broad-based index that
replicates the U.S. stock market. It includes 500 widely held common stocks
and assumes reinvestment of dividends.
Withdrawals prior to age 59-1/2 from the Vista Capital Advantage variable
annuity msubject to a 10% IRS tax penalty, and are taxed as oridinary income.
2
<PAGE>
Capital Growth Portfolio
The Capital Growth Portfolio seeks to provide long-term capital growth
primarily through diversified holdings in common stocks.
An opportunistic approach backed up by disciplined stock selection was a key
factor in the performance of the Capital Growth Portfolio for the year ended
August 31, 1996. During the period, the Portfolio capitalized on the stock
market's rally, providing investors with an average annual total return of
19.66%.
Market Dips Provide Buying Opportunity
With its focus on small- and mid-capitalization stocks, the Portfolio was
able to post strong performance by taking advantage of market drops. Since
such overall declines generally tend to cut the prices of all stocks within a
given sector, they present excellent opportunities to purchase high-quality
stocks at what we believe are relatively-low prices. The Portfolio's manager
used this strategy following the major decline in technology stocks in
November, 1995.
In early 1996, the manager favored cyclical companies that typically benefit
from a growing economy, then turned a bit more defensive later in June,
focusing on other sectors which included financial companies. This shift
proved beneficial during July's sharp downturn, as did the Portfolio's 20%
cash position. Once again, the management team went bargain-hunting, buying
the stocks of companies within the technology, financial and other areas at
what they believed were very attractive valuations.
A Focus on Visible Earnings Growth
Given its view that the economy will slow over the next several months as
well as concerns about corporate earnings the management team is focused on
buying the stocks of companies that it believes can exhibit visible earnings
growth. Backed by a disciplined stock management system, the focus in the
months ahead will be on individual stock selection as opposed to sector
weightings.
Life of Portfolio Performance
A $10,000 tax-deferred investment in the Capital Growth Portfolio at NAV (Net
Asset Value) would have grown to $14,240 from inception on 3/1/95 through
8/31/96.*
Investment Results
Average Annual Total Return as of 8/31/96*
One Year 19.66%
Since Inception (3/1/95) 26.52%
***********************************[Line Chart]********************************
Growth & Russell
Income 2000
------ ------
Mar-95 10350 10172
Apr-95 10470 10398
May-95 10870 10577
Jun-95 11400 11125
Jul-95 11830 11766
Aug-95 11900 12010
Sep-95 12090 12224
Oct-95 11660 11677
Nov-95 12220 12168
Dec-95 12707 12489
Jan-96 12872 12476
Feb-96 13077 12865
Mar-96 13674 13127
Apr-96 14364 13828
May-96 14785 14373
Jun-96 14405 13783
Jul-96 13571 12579
Aug-96 14240 13310
*******************************************************************************
* Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
Hypothetical $10,000 investment assumes an initial investment on 3/1/95 shows
changes in Net Asset Value and reinvestment of all distributions, but does
not include the effect of any insurance charges or the annual maintenance
fee. The illustration above would be reduced if these fees were reflected.
There is no direct correlation between a hypothetical investment and the
anticipated performance of the Portfolio. The investment adviser is currently
waiving certain fees. This voluntary waiver may be modified or terminated at
any time, which would reduce performance.
The Russell 2000 Index is unmanaged and tracks the shares of 2000 small-
capitalization companies. Figures include the reinvestment of dividends.
Withdrawals prior to age 59-1/2 from the Vista Capital Advantage variable
annuity may be subject to a 10% IRS tax penalty, and are taxed as ordinary
income.
3
<PAGE>
International Equity Portfolio
The International Equity Portfolio seeks to provide a total return on assets
from long-term growth of capital and from income principally through
diversified holdings of the stocks of established foreign companies outside
the U.S.
With most developed overseas economies struggling to recover from long
recessions and many emerging markets awaiting confirmation of interest rate
direction in the United States, international markets generally trailed the
U.S. during the year ended August 31, 1996. For the reporting period, the
International Equity Portfolio had an average annual total return of 2.42%.
Europe & Japan: Waiting for Sustained Growth
It was a period of fits and starts for European and Japanese equity markets.
In late 1995, it appeared that Europe as a whole was finally set to emerge
from recession. Despite numerous interest rate cuts, however, sustainable
signs of growth on the continent were hard to find. Further dampening spirits
was the fact that European Union-member governments issued austere budgets in
their efforts to meet the Maastricht criteria for currency convergence. While
Europe has proved frustrating for many investors over the past year, the
long-term prospects should be enhanced by the increasing likelihood of
economic convergence.
In Japan, the market rallied at the end of 1995 and grew especially strong
when the government revealed the first quarter's strong economic growth
figures. However, the rally faded and the market gave up most of its gain
when later reports showed that growth hadn't taken hold.
Southeast Asian markets, with their high correlation to American interest
rates, suffered from the uncertain rate environment in the U.S. as well as
from the fact that expected liquidity didn't materialize. Still, Southeast
Asia's economic growth may make it the most fundamentally attractive
opportunity in the world for investors with a long-term investment horizon.
Latin America, for its part, continued to recover from the Mexican Peso shock
of 1994 as markets there were generally positive.
Valuation & Diversification: The Overseas Advantage
Looking ahead, key trends continue to make international investing an
exciting and potentially lucrative option for American investors. These
trends include the increasing likelihood of currency convergence in Europe;
Japanese economic recovery; substantial long-term growth potential in the
Pacific Rim and significant structural reforms in Latin America. And, after a
period of underperforming the U.S., many international markets are strongly
positioned on a valuation basis.
Life of Portfolio Performance
A $10,000 tax-deferred investment in the International Equity Portfolio at
NAV (Net Asset Value) would have grown to $11,153 from inception on 3/1/95
through 8/31/96.*
Investment Results
Average Annual Total Return as of 8/31/96*
One Year 2.42%
Since Inception (3/1/95) 7.53%
***********************************[Line Chart]********************************
International MSCI
Equity EAFE
Mar-95 10180 10626
Apr-95 10350 11029
May-95 10480 10900
Jun-95 10470 10712
Jul-95 11010 11381
Aug-95 10890 10950
Sep-95 11070 11167
Oct-95 10910 10869
Nov-95 10870 11175
Dec-95 10890 11628
Jan-96 11059 11678
Feb-96 11132 11721
Mar-96 11427 11973
Apr-96 11754 12324
May-96 11617 12100
Jun-96 11680 12171
Jul-96 11122 11818
Aug-96 11153 11847
*******************************************************************************
* Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
Hypothetical $10,000 investment assumes an initial investment on 3/1/95 shows
changes in Net Asset Value and reinvestment of all distributions, but does
not include the effect of any insurance charges or the annual maintenance
fee. The illustration above would be reduced if these fees were reflected.
There is no direct correlation between a hypothetical investment and the
anticipated performance of the Portfolio. The investment adviser is currently
waiving certain fees. This voluntary waiver may be modified or terminated at
any time, which would reduce performance.
International investing involves special risks. Changes in currency exchange
rates and differences in accounting and taxation policies outside the U.S.
can raise or lower returns. Also, some overseas markets may not be as
politically and economically stable as the United States and other nations.
The MSCI EAFE Index is unmanaged and is a replica (or model) of the
performance of the European, Australian and Far Eastern equity markets.
Withdrawals prior to age 59-1/2 from the Vista Capital Advantage variable
annuity may be subject to a 10% IRS tax penalty, and are taxed as ordinary
income.
4
<PAGE>
Asset Allocation Portfolio
The Asset Allocation Portfolio seeks to provide maximum total return through
a combination of long-term capital growth and current income by investing in
common stocks, convertible securities and government and corporate fixed
income obligations.
Buoyed by strong returns from its allocation to the U.S. stock market, the
Asset Allocation Portfolio finished the year ended August 31, 1996 with an
average annual total return of 10.90%. By providing investors with a
significant gain despite a down year in the bond market, the Portfolio
delivered on its goal of steady returns through diversification.
Slight Shifts Seek to Maximize Returns
The Portfolio's management team made tactical shifts throughout the reporting
year to capitalize on the relative value of stocks, bonds and cash. As of
August 31, 1996, the Portfolio's allocation was 50% equities, 40% bonds and
10% cash.
On the equity side, the Portfolio benefited from its slightly defensive
position in late 1995 before taking on a more cyclical approach in early 1996
in response to the strengthening economy. Shortly before the stock market
fell sharply in June, the Portfolio was again overweighted in relatively
defensive issues, which enabled the management team to take advantage of the
summer selloff by seeking to enhance the quality of holdings. The fixed
income portion of the Portfolio suffered along with the rest of the U.S. bond
market as yields on the 30-year treasury bond increased by over 200 basis
points, but a focus on value and interest payments from its bonds supported
relative performance.
Value and Diversification
Moving forward, the Portfolio's management team expects the U.S. economy to
slow and, therefore, feels that bonds may have increasing value relative to
stocks, especially with rates on the 30-year bond above 7%. It appears that
stock-picking will be the key going forward for equities, and in this the
management team is supported by a disciplined stock management system that
focuses on value and growth characteristics. Value will also be crucial in
bond selections as the manager seeks to find the most attractive sectors and
points on the yield curve.
Life of Portfolio Performance
A $10,000 tax-deferred investment in the Asset Allocation Portfolio at NAV
(Net Asset Value) would have grown to $12,243 from inception on 3/1/95
through 8/31/96.*
Investment Results
Average Annual Total Return as of 8/31/96*
One Year 10.90%
Since Inception (3/1/95) 14.41%
***********************************[Line Chart]********************************
Asset 60% S&P 500
Allocation 40% Lehman Gov't Bond
---------- ---------------------
Mar-95 10160 10201
Apr-95 10270 10436
May-95 10570 10854
Jun-95 10730 11040
Jul-95 10980 11248
Aug-95 11040 11316
Sep-95 11200 11653
Oct-95 11120 11693
Nov-95 11440 12081
Dec-95 11595 12291
Jan-96 11880 12582
Feb-96 11935 12563
Mar-96 12045 12604
Apr-96 12133 12695
May-96 12199 12901
Jun-96 12232 12990
Jul-96 12001 12625
Aug-96 12243 12787
*******************************************************************************
* Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
Hypothetical $10,000 investment assumes an initial investment on 3/1/95 shows
changes in Net Asset Value and reinvestment of all distribution, but does not
include the effect of any insurance charges or the annual maintenance fee.
The illustration above would be reduced if these fees were reflected. There
is no direct correlation between a hypothetical investment and the
anticipated performance of the Portfolio. The investment adviser is currently
waiving certain fees. This voluntary waiver may be modified or terminated at
any time, which would reduce performance.
The Standard & Poor's 500 Index is an unmanaged broad-based index that
replicates the U.S. stock market. It includes 500 widely held common stocks
and assumes reinvestment of all dividends.
The unmanaged Lehman Government Bond Index includes the Treasury Bond Index
and the Agency Bond Index. Maturities range from 1 to 20 years.
Withdrawals prior to age 59-1/2 from the Vista Capital Advantage variable
annuity may be subject to a 10% IRS tax penalty, and are taxed as ordinary
income.
5
<PAGE>
U.S. Treasury Income Portfolio
The U.S. Treasury Income Portfolio seeks to provide monthly dividends as well
as to preserve principal.
Buffeted by unexpected signs of economic growth that raised investors' fears
of potential inflation and accompanying higher interest rates, the bond
market fell sharply in early 1996 and remained volatile through the end of
August. For the year ending August 31, 1996, the U.S. Treasury Income
Portfolio had an average annual total return of 2.62%, which reflected this
difficult environment.
Interest Payments Offset Principal Loss
During the reporting period, the yield on the 30-year Treasury bond rose from
a low of 5.96% at the end of 1995 to 7.12% on August 31. Since yields and
bond prices move in opposite directions, this rise in rates corresponded with
a significant principal loss. Fortunately, however, this loss was more than
offset by interest payments from the bonds in the Portfolio.
From February onward, the bond markets were extremely volatile as investors
reacted to mixed economic news. Reports of stronger economic growth
repeatedly triggered broad one-day selloffs followed by brief rallies in
response to signs of an economic slowdown. It's important to note that,
despite widespread fears of a Federal Reserve Board interest rate hike, the
last Fed move was actually an easing of short-term rates in January. More
recently, the market has fixated on signs of wage pressures, although, in our
view, real signals of inflation remain muted.
Portfolio Seeks Points of Value
Despite the difficult environment, the Portfolio's manager continues to use a
disciplined fixed income management system to seek relative value among
different market sectors. At the end of the period, the Portfolio was
invested in U.S. treasury bonds, mortgage-backed securities and government
agency securities. While the market may continue to be volatile, more
consistent signs of a slowing economy have the potential to spark a rally,
especially with rates on the 30-year treasury bond above 7%.
Life of Portfolio Performance
A $10,000 tax-deferred investment in the U.S. Treasury Income Portfolio at
NAV (Net Asset Value) would have grown to $10,970 from inception on 3/1/95
through 8/31/96.*
Investment Results
Average Annual Total Return as of 8/31/96*
One Year 2.62%
Since Inception (3/1/95) 6.36%
***********************************[Line Chart]********************************
US Lehman
Treasury Intmd
Income US Gov't
------ --------
Mar-95 10005 10055
Apr-95 10170 10171
May-95 10550 10458
Jun-95 10510 10525
Jul-95 10570 10530
Aug-95 10690 10617
Sep-95 10800 10688
Oct-95 10950 10805
Nov-95 11100 10927
Dec-95 11235 11045
Jan-96 11293 11138
Feb-96 11028 11020
Mar-96 10924 10970
Apr-96 10855 10938
May-96 10821 10932
Jun-96 10970 11043
Jul-96 10993 11077
Aug-96 10970 11090
*******************************************************************************
* Past performance is no guarantee of future results. Investment returns and
principal value will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
Hypothetical $10,000 investment assumes an initial investment on 3/1/95 shows
changes in Net Asset Value, but does not include the effect of any insurance
charges or the annual maintenance fee. The illustration above would be
reduced if these fees were reflected. There is no direct correlation between
a hypothetical investment and the anticipated performance of the Portfolio.
The investment adviser is currently waiving certain fees. This voluntary
waiver may be modified or terminated at any time, which would reduce
performance.
The unmanaged Lehman Intermediate Government Bond Index includes bonds with 1
to 10 year maturities.
Withdrawals prior to age 59-1/2 from the Vista Capital Advantage variable
annuity may be subject to a 10% IRS tax penalty, and are taxed as ordinary
income.
6
<PAGE>
Money Market Portfolio
The Money Market Portfolio seeks to provide maximum current income consistent
with preservation of capital and maintenance of liquidity.
For the year ended August 31, 1996, the Money Market Portfolio's total return
was 3.68%.*
1995: Yields Stable Until End-of-Year Rate Cut
Yields on money market instruments remained relatively stable from September
though mid-December, 1995, when the Federal Reserve Board cut the Federal
Funds rate by 25 basis points. This action was followed by another 25 basis
point cut in the same rate as well as a similar decrease in the discount
rate. These cuts, which sought to stimulate the apparently-weak economy,
caused steady declines in money market yields through the end of February.
Stronger-than-Expected Economy Boosts Yields
By the end of February, unanticipated signals of stronger economic growth
upset market psychology about the direction of interest rates, and from that
point until the end of the reporting year yields tended to move higher.
Markets were volatile as participants reacted to decidedly mixed economic
reports and, although many expected the Fed would raise interest rates to
choke off the possibility of inflation, no such action occurred during the
reporting period.
The Money Market Portfolio's seven-day current yield was 4.79% as of August
31, 1996.
* Total return figures do not include the effect of any insurance or
withdrawal charges associated with a variable annuity. Past performance is
not a guarantee of future results.
7
<PAGE>
Growth and Income Portfolio
Portfolio of Investments August 31, 1996
Shares Issuer Value
- --------- ------------------------------------------------------ ------------
Long-term Investments--88.8% Common Stock--85.3%
1.6% Aerospace
2,100 Allied-Signal, Inc. $129,675
------------
1.6% Agricultural
2,900 Case Corp. 131,950
------------
1.0% Airlines
700 AMR Corp. * 57,400
1,100 Continental Airlines, Inc., Class B,*See notes to
financial statements. 24,888
------------
82,288
------------
0.9% AUTOMOTIVE
1,400 General Motors 69,650
------------
6.4% BANKING
3,400 Bank of Boston Corp. 179,350
600 Citicorp 49,950
2,000 Commonwealth Bank of Australia, ADR# (Australia) 32,250
4,800 National City Corp. 180,600
900 NationsBank Corp. 76,613
------------
518,763
------------
2.8% CHEMICALS
1,100 Cabot Corp. 30,250
700 Dow Chemical Co. 55,825
1,700 duPont (EI) de Nemours 139,613
------------
225,688
------------
4.5% COMPUTERS/COMPUTER HARDWARE
2,200 Compaq Computer* 124,574
700 Gateway 2000 Inc.* 31,194
1,500 International Business Machines Corp. 171,563
900 Solectron Corp.* 33,638
------------
360,969
------------
8.3% CONSUMER PRODUCTS
2,400 Avon Products, Inc. 114,900
4,800 Black & Decker Corp. 189,600
4,000 First Brands Corp. 91,000
700 Nike, Inc., Class B 75,600
1,200 Philip Morris Companies, Inc. 107,700
1,000 Procter & Gamble Co. 88,875
------------
667,675
------------
0.3% DIVERSIFIED
700 Harnischfeger Industries, Inc. 26,425
------------
2.9% ELECTRONICS/ELECTRICAL EQUIPMENT
1,600 Intel Corp. 127,700
1,800 Teradyne Inc.* 27,900
1,700 Texas Instruments 79,475
------------
235,075
------------
2.3% ENTERTAINMENT/LEISURE
6,500 Carnival Corp., Class A 183,625
------------
3.8% FINANCIAL SERVICES
1,800 Federal Home Loan Mortgage Corp. $159,075
4,200 Green Tree Financial Corp. 145,950
------------
305,025
------------
2.9% FOOD/BEVERAGE PRODUCTS
1,400 Coca-Cola Enterprises, Inc. 56,525
2,700 PepsiCo., Inc. 77,625
700 Unilever NV, ADR (Netherlands) 100,450
------------
234,600
------------
4.0% HEALTH CARE
3,300 Columbia/HCA Healthcare Corp. 186,038
1,400 HEALTHSOUTH Corp.* 45,325
900 Medtronic, Inc. 46,800
1,700 OrNda Healthcorp * 43,775
------------
321,938
------------
2.4% INSURANCE
1,600 Allstate Corp. 71,400
1,200 American Bankers Insurance Group, Inc. 57,000
800 Mid Ocean, Ltd. (Bermuda) 33,100
500 Transatlantic Holdings, Inc. 34,688
------------
196,188
------------
5.3% MANUFACTURING
2,400 Ingersoll-Rand Co. 102,600
1,700 Johnson Controls 119,850
1,100 Kennametal Inc. 34,100
3,700 Parker Hannifin Corp. 144,300
1,000 Pentair, Inc. 27,250
------------
428,100
------------
2.1% METALS/MINING
2,200 Aluminum Co. of America (ALCOA) 136,675
1,100 Inco, Ltd. (Canada) 35,475
------------
172,150
------------
1.0% OFFICE/BUSINESS EQUIPMENT
1,400 Xerox Corp. 76,825
------------
8.2% OIL & GAS
500 British Petroleum PLC, ADR (United Kingdom) 58,874
1,400 Halliburton Company 73,675
1,200 Mobil Corp. 135,300
2,300 PanEnergy Corp. 76,188
1,400 Texaco, Inc. 124,250
1,500 Tidewater, Inc. 57,563
2,700 Williams Companies, Inc. 134,663
------------
660,513
------------
1.0% PAPER/FOREST PRODUCTS
800 Boise Cascade Corp. 27,000
900 Willamette Industries 55,575
------------
82,575
------------
See notes to financial statements.
8
<PAGE>
3.8% PHARMACEUTICALS
1,400 American Home Products Corp. $ 82,950
1,500 Glaxo Wellcome PLC (United Kingdom) 42,750
3,600 Johnson & Johnson 177,300
------------
303,000
------------
0.9% PRINTING & PUBLISHING
2,300 New York Times Company, Class A, 71,875
------------
1.5% RESTAURANTS/FOOD SERVICE
6,000 Wendy's International, Inc. 121,500
------------
5.1% RETAILING
2,100 Federated Department Stores, Inc.* 72,713
5,300 Gap, Inc. 185,500
3,700 Kroger Co.* 156,788
------------
415,001
------------
1.4% SHIPPING/TRANSPORTATION
2,300 CSX Corp. 116,438
------------
4.7% TELECOMMUNICATIONS
3,300 BellSouth Corp. 119,625
700 Cincinnatti Bell, Inc. 33,425
3,700 Sprint Corp. 150,313
3,300 Telefonaktiebolaget LM Ericsson, Sp, ADR (Sweden) 76,106
------------
379,469
------------
4.6% UTILITIES
2,400 CMS Energy Corp. 71,700
4,300 FPL Group Inc. 190,270
1,600 Sierra Pacific Resources 40,800
1,700 Texas Utilities Co. 69,700
------------
372,470
------------
TOTAL COMMON STOCK (COST $6,550,813) 6,889,450
------------
CONVERTIBLE PREFERRED STOCK--2.2%
CONSUMER PRODUCTS
8,500 RJR Nabisco Holdings Corp. $0.6012, Ser. C 45,687
OIL & GAS
1,800 Enron Corp., 6.25% Exchange Notes, 12/13/98, ACES, 43,875
PAPER/FOREST PRODUCTS
800 International Paper Capital Corp., 5.25% # 37,037
RETAILING
300 TJX Companies, $7.00,11/17/98, Ser. E 54,600
------------
TOTAL CONVERTIBLE PREFERRED STOCK
(Cost $187,290) 181,199
------------
Principal
Amount
- ---------
CONVERTIBLE CORPORATE BONDS & NOTES--1.3%
INSURANCE
$ 30,000 American Travellers Corp., 6.5%, due 10/1/05 $ 63,788
RETAILING
40,000 Waban Inc., 6.5%, due 7/1/02 42,800
------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES
(COST $69,083) 106,588
------------
TOTAL LONG-TERM INVESTMENTS
(Cost $6,807,186) 7,177,237
------------
SHORT-TERM INVESTMENTS--11.0%
COMMERCIAL PAPER
886,000 Household Finance Corp., 5.2%, due 9/3/96
(Cost $886,000) 886,000
------------
99.8% TOTAL INVESTMENTS
(COST $7,693,186) $8,063,237
============
9
<PAGE>
Capital Growth Portfolio
Portfolio of Investments August 31, 1996
Shares Issuer Value
------ ------ -----
LONG-TERM INVESTMENTS--74.0%
COMMON STOCK--74.0%
1.6% AGRICULTURAL PRODUCTION/SERVICES
5,400 AGCO Corp. $127,575
------------
1.4% AIRLINES
5,000 Continental Airlines, Inc., Class B,* 113,125
------------
1.1% BANKING
2,000 Standard Federal Bancorp. 83,750
------------
1.7% CHEMICALS
5,000 Cabot Corp. 137,500
------------
3.7% COMPUTER SOFTWARE
2,300 Reynolds & Reynolds, Inc., Class A 115,288
5,000 Wind River Systems* 173,750
------------
289,038
------------
3.7% COMPUTERS/COMPUTER HARDWARE
4,000 Gateway 2000 Inc.,* 178,250
3,000 Solectron Corp.* 112,125
------------
290,375
------------
9.5% CONSUMER PRODUCTS
6,000 ADT Ltd. * 117,750
2,400 Danaher Corp. 99,600
5,500 First Brands Corp. 125,125
6,000 Furniture Brands International, Inc.* 72,000
1,500 Lancaster Colony Corp. 54,563
3,000 Oakley, Inc. * 123,000
5,000 Waters Corp.* 156,875
------------
748,913
------------
1.4% DIVERSIFIED
3,000 Harnischfeger Industries, Inc. 113,250
------------
4.2% ELECTRONICS/ELECTRICAL EQUIPMENT
4,000 Atmel Corp.* 103,500
5,000 Esterline Technologies Corp.* 103,125
8,000 Teradyne Inc,* 124,000
------------
330,625
------------
2.4% ENTERTAINMENT/LEISURE
7,000 Bally Entertainment Corp. * 190,750
------------
5.3% FINANCIAL SERVICES
3,000 Advanta Corp., Class A 146,625
3,000 AT&T Capital Corp. 133,875
4,000 Green Tree Financial Corp. 139,000
------------
419,500
------------
2.0% FOOD/BEVERAGE PRODUCTS
4,000 Coca-Cola Enterprises, Inc. 161,500
------------
4.1% HEALTH CARE
5,000 Assisted Living Concepts* 97,500
5,000 Ornda Healthcorp * 128,750
3,000 PhyCor, Inc.* 98,250
------------
324,500
------------
1.4% HOMEBUILDERS
10,000 Pacific Greystone Corp.* 108,750
------------
0.7% HOTELS/OTHER LODGING
2,000 Bristol Hotel Co.* $ 54,750
------------
4.6% INSURANCE
3,500 Mid Ocean, Ltd. (Bermuda) 144,812
1,900 Reliastar Financial Corp. 83,837
2,000 Transatlantic Holdings, Inc. 138,750
------------
367,399
------------
4.5% MANUFACTURING
3,500 Kennametal Inc. 108,500
4,000 Pentair, Inc. 109,000
3,500 UCAR International, Inc.* 136,500
------------
354,000
------------
1.7% METALS/MINING
4,000 Alumax, Inc. * 132,000
------------
3.7% OIL & GAS
4,000 Smith International * 139,000
4,000 Tidewater, Inc. 153,500
------------
292,500
------------
1.5% PAPER/FOREST PRODUCTS
3,500 Boise Cascade Corp. 118,125
------------
2.4% PHARMACEUTICALS
4,000 Parexel International Corp.* 194,000
------------
1.6% PROFESSIONAL SERVICES
4,500 Olsten Corp. 125,437
------------
1.8% REAL ESTATE INVESTMENT TRUST
6,600 Oasis Residential, Inc. 144,375
------------
1.3% RESTAURANTS/FOOD SERVICE
5,000 Wendy's International, Inc. 101,250
------------
2.3% RETAILING
3,000 Dillard Department Stores, Inc., Class A 102,000
2,500 MSC Industrial Direct Co., Inc.* 79,375
------------
181,375
------------
1.4% STEEL
3,000 AK Steel Holding Corp. 111,750
------------
1.5% TELECOMMUNICATIONS
2,500 Cincinnati Bell, Inc. 119,375
------------
1.5% UTILITIES
3,300 Portland General Corp. 119,626
------------
TOTAL COMMON STOCK (COST $4,954,078) 5,855,113
------------
Principal
Amount
- ---------
SHORT-TERM INVESTMENTS--29.0%
COMMERCIAL PAPER
$1,788,000 Household Finance Corp., 5.2%, due 9/3/96 1,788,000
500,000 H. J. Heinz Co., 5.27%, due 10/11/96 497,072
------------
(COST $2,285,072) 2,285,072
------------
103.0% TOTAL INVESTMENTS
(COST $7,239,150) $8,140,185
============
10
<PAGE>
International Equity Portfolio
Portfolio of Investments August 31, 1996
Shares Issuer Value
------ ------ -----
COMMON STOCK--88.5%
ARGENTINA--0.5%
BANKING
500 Banco Frances del Rio de la Plata SA, ADS * $ 11,500
OIL & GAS
600 Transportador de Gas del Sur, SA (TGS), ADR 7,200
------------
18,700
------------
AUSTRALIA--0.3%
BROADCASTING
700 News Corp. Ltd. 3,738
ENTERTAINMENT/LEISURE
5,750 Reef Casino Trust* 2,505
METALS/MINING
4,000 Mount Edon Gold Mines 5,640
------------
11,883
------------
AUSTRIA--1.6%
STEEL
393 Boehler-Uddeholm AG 30,678
OIL & GAS
316 OMV AG 31,594
------------
62,272
------------
BRAZIL--0.9%
TELECOMMUNICATIONS
450 Telecomunicacoes Brasileiros SA, ADR 33,413
------------
CHILE--0.2%
UTILITIES
300 Chilgener SA, ADR 6,975
------------
FRANCE--4.6%
AUTOMOTIVE
195 Equipment et Composants pour l'Industrie Automobile 26,229
BROADCASTING & PUBLISHING
92 TV Francaise 10,518
COMPUTER SOFTWARE
115 Group Axime* 13,467
FINANCIAL SERVICES
173 Cetelem Group* 36,205
INSURANCE
875 AGF (Assurances Generales de France) 22,673
OIL & GAS
324 Total Cie Francaise Petroles, Ser. B, 23,873
PHARMACEUTICALS
91 Roussel-Uclaf 21,168
UTILITIES
249 Compagnie Generale des Eaus 24,055
------------
178,188
------------
GERMANY--6.4%
BANKING
832 Deutsche Bank AG 41,166
CAPITAL GOODS
81 Mannesmann AG 29,281
GERMANY (CONT'D)
CONSUMER PRODUCTS
598 Adidas AG $ 51,513
926 Puma AG 31,719
INSURANCE
28 Allianz AG Holding 49,965
PHARMACEUTICALS
340 Schwarz Pharma AG 24,697
UTILITIES
460 Veba Group PLC 24,180
------------
252,521
------------
HONG KONG--6.8%
BANKING
3,000 Guoco Group Ltd* 14,239
2,000 Hang Seng Bank Ltd. 20,499
DIVERSIFIED
4,000 Citic Pacific Ltd.* 17,589
8,000 First Pacific Company Ltd. 12,985
3,000 Hutchison Whampoa 18,158
1,200 Jardine Matheson Holdings Ltd., ADR 7,725
2,500 Swire Pacific, Ltd., Class A* 22,228
FINANCIAL SERVICES
1,800 HSBC Holdings PLC* 31,078
REAL ESTATE
3,000 Cheung Kong (Holdings) Ltd. 21,048
12 Henderson China Holding Ltd.* 28
2,000 Henderson Land Development Company, Ltd. 15,649
3,000 Hong Kong Land Holdings Ltd. 6,810
5,000 Hysan Development Co. Ltd. 15,423
3,000 New World Development Company, Ltd. 14,550
6,000 New World Infrastructure Ltd.* 14,123
14,000 Sino Land Co. 14,575
2,000 Sun Hung Kai Properties Ltd. 19,529
------------
266,236
------------
INDIA--0.5%
AUTOMOTIVE
350 Tata Engineering & Locomotive Co., Ltd., GDR 5,731
HOTELS/OTHER LODGING
280 Indian Hotels Co. Ltd., GDR 7,315
METALS/MINING
100 Hindalco Industries Ltd., GDR 3,330
UTILITIES
200 BSES Ltd., GDR 3,775
------------
20,151
------------
INDONESIA--0.6%
BANKING
3,750 PT Lippo Bank (Foreign) 5,766
11
<PAGE>
INDONESIA (CONT'D)
CONSTRUCTION MATERIALS
1,500 PT Semen Gresik (Foreign) $ 4,180
CONSUMER PRODUCTS
1,500 PT Gudang Garam (Foreign) 5,509
DIVERSIFIED
7,000 PT Bimantara Citra (Foreign) 7,175
------------
22,630
------------
IRELAND--1.0%
BANKING
5,538 Bank of Ireland 40,696
------------
ITALY--3.1%
FINANCIAL SERVICES
7,000 Istituto Mobiliare Italiano SpA 54,901
OIL & GAS
7,500 Saipem SpA 34,234
UTILITIES
5,782 Edison SpA 31,285
------------
120,420
------------
JAPAN--28.2%
AUTOMOTIVE
1,000 Honda Motor Co. Ltd.* 23,119
1,000 Toyota Motor Corp. 24,132
BANKING
1,000 Bank of Tokyo-Mitsubishi 20,356
3,000 Mitsui Trust & Banking 30,119
3,000 Sumitomo Trust & Banking 35,645
BUSINESS SERVICES
2,000 Ricoh Corp. Ltd. 19,527
CHEMICALS
6,000 Dainippon Ink & Chemical Inc. 26,195
ELECTRONICS/ELECTRICAL EQUIPMENT
2,000 Alps Electric Co. Ltd. 23,579
500 Fanuc Co. 18,283
2,000 Hitachi Ltd. 18,384
300 Keyence Corp. 38,132
500 Mabuchi Motor 27,448
2,000 Nippon Signal Co. 18,974
1,000 Sharp Corp. 15,842
5,000 Yaskawa Electrice Corp.* 20,908
ENGINEERING & CONSTRUCTION
2,000 Kajima Corp. 17,942
3,000 Nichiei Construction 28,737
MACHINERY & ENGINEERING EQUIPMENT
2,000 CKD Corp. 18,606
4,000 Ishikawajima-Harima Heavy Industries 18,421
2,000 Komatsu Ltd. 17,113
1,000 Komori Corp. 22,198
3,000 Mitsubishi Heavy Industries Ltd.* 23,736
JAPAN (CONT'D)
2,000 Mori Seiki $ 33,158
3,000 Nachi-Fujikoshi Corp.* 12,462
2,000 NTN Corp. 12,803
500 SMC Corp. 35,000
MEDICAL DEVICES
4,000 Shimadzu Corp. 24,021
METALS/MINING
6,000 Showa Aluminum Corp. 35,369
PACKAGING
5,000 Tomoku Co. Ltd. 27,125
PAPER/FOREST PRODUCTS
2,000 Mitsubishi Paper Mills 10,555
PRINTING & PUBLISHING
1,000 Dai Nippon Printing Co. Ltd. 17,592
REAL ESTATE
2,000 Daibiru Corp. 25,974
3,000 Hankyu Realty 29,014
1,000 Mitsubishi Estate Co., Ltd. 12,250
1,000 Mitsui Fudosan 12,342
RETAILING
1,000 Isetan 13,632
1,000 Mr. Max 17,684
4,000 Tokyu Department Store 24,095
SHIPPING/TRANSPORTATION
4,000 Hitachi Transport System 40,527
4,000 Mitsui O.S.K. Lines Ltd.* 12,011
5,000 Nagoya Railroad Co., Ltd. 23,395
3,000 Nankai Electric Railway 18,044
3,000 Navix Line* 7,626
3,000 Tokyu Corp. 19,729
STEEL
4,000 NKK Corp.* 10,574
3,000 Yamato Kogyo Co., Ltd. 32,329
TELECOMMUNICATIONS
2,000 Tamura Electric Works 17,316
TEXTILES/APPAREL
1,000 Tokyo Style 16,027
WAREHOUSING
4,000 Sumitomo Warehouse 26,379
WHOLESALING
4,000 Itochu Corp. 24,279
------------
1,098,708
------------
MALAYSIA--2.8%
AGRICULTURE
3,000 Kumpulan Guthrie Bhd 4,813
AUTOMOTIVE
7,000 Tractors Malaysia Holdings Bhd 15,161
12
<PAGE>
MALAYSIA (CONT'D)
CONSTRUCTION/CONSTRUCTION MATERIALS
4,000 Kedah Cement Holdings, Bhd $ 7,155
6,000 Sunway Building Technology Bhd 15,040
2,000 Sungei Way Holdings Bhd 10,107
DIVERSIFIED
7,000 Westmont Bhd 12,409
ELECTRONICS/ELECTRICAL EQUIPMENT
4,000 Leader Universal Holdings Bhd 8,663
ENGINEERING/CONSTRUCTION
2,500 Ekran Bhd 10,628
5,000 Pilecon Engineering Bhd 6,136
TELECOMMUNICATIONS
4,000 FCW Holdings Bhd 10,428
1,000 Telekom Malaysia Bhd 8,824
------------
109,364
------------
MEXICO--0.5%
DIVERSIFIED
2,074 ALFA, SA de C.V., Class A 9,095
HOMEBUILDERS
500 Corporacion GEO, SA de C.V., Ser. B, ADR 10,077
------------
19,172
------------
NETHERLANDS--2.8%
CHEMICALS
326 Akzo Nobel 37,979
640 CSM NV, N.R. Certificate 31,269
PRINTING & PUBLISHING
2,252 Verenigde Nederlandse Uitgeversbedrijvan
Verenigd Bezit (VNU) 39,170
------------
108,418
------------
PHILIPPINES--0.9%
BANKING
250 Metropolitan Bank & Trust Co. 5,973
DIVERSIFIED
24,200 Metro Pacific Corp. 7,401
ELECTRONICS/ELECTRICAL EQUIPMENT
4,600 Ionics Circuit Inc 3,912
REAL ESTATE
6,150 Ayala Land, Inc., Class B, 7,876
7,700 Filinvest Development Corp. 3,753
TELECOMMUNICATIONS
5,600 Philipino Telephone Corp.* 7,385
------------
36,300
------------
PORTUGAL--1.0%
TELECOMMUNICATIONS
1,456 Portugal Telecom SA* 39,009
------------
SINGAPORE--0.9%
AIRLINES
1,000 Singapore Airlines Ltd. 10,592
SINGAPORE (CONT'D)
BANKING
1,000 Overseas Chinese Banking Corp. $ 12,014
SHIPPING/TRANSPORTATION
12,000 Comfort Group Ltd. 11,431
------------
34,037
------------
SPAIN--2.1%
CONSUMER PRODUCTS
1,000 Tabacalera SA, Class A 40,790
RETAILING
1,690 Centros Comerciales Pryca, SA 40,956
------------
81,746
------------
SWEDEN--1.2%
MACHINERY & ENGINEERING EQUIPMENT
2,688 Svedala Industri AB-Free 46,335
------------
SWITZERLAND--5.2%
BANKING
343 Schweizerischer Bankverein, Registered Shares 66,992
PHARMACEUTICALS
50 Ciba-Geigy AG, Registered Shares 63,294
61 Sandoz AG 72,376
------------
202,662
------------
THAILAND--1.0%
BANKING
1,800 Krung Thai Bank Ltd., (Foreign) 7,755
ENTERTAINMENT/LEISURE
800 Grammy Entertainment Public Co. (Foreign) 10,498
TELECOMMUNICATIONS
600 Loxley Company Ltd (Foreign) 7,162
UTILITIES
2,000 Cogeneration Public Co., Ltd. (Foreign) 8,221
2,500 Electricity Generating Public Company Ltd. (Foreign) 7,411
------------
41,047
------------
UNITED KINGDOM--15.4%
AIRLINES
3,298 British Airport Authority PLC 24,802
AUTOMOTIVE (RETAILING)
1,792 Lex Service PLC 10,843
BANKING
2,638 Barclays PLC 37,492
3,081 National Westminster Bank 31,914
BROADCASTING
7,111 General Cable PLC 19,790
CHEMICALS
2,826 BTP PLC 13,255
13
<PAGE>
UNITED KINGDOM (CONT'D)
CONSTRUCTION
1,917 Berkeley Group PLC $ 17,429
CONSTRUCTION MATERIALS
2,912 Meyer International PLC 18,325
DIVERSIFIED
5,865 Cookson Group PLC 23,429
ELECTRONICS/ELECTRICAL EQUIPMENT
3,143 Chubb Security PLC 15,725
ENGINEERING SERVICES
14,010 Senior Engineering Group PLC 23,109
FOOD/BEVERAGE PRODUCTS
4,353 Allied Domecq PLC 31,273
HOTELS/OTHER LODGING
9,096 Jarvis Hotels PLC* 23,110
INSURANCE
1,371 Lloyds Abbey Life Group 12,818
4,582 Prudential Corp. PLC 30,984
MACHINERY & ENGINEERING EQUIPMENT
2,988 Powerscreen International PLC 24,433
MEDIA/ADVERTISING
3,589 WPP Group PLC 12,934
OIL & GAS
3,309 Shell Transport & Trading PLC 48,166
PRINTING & PUBLISHING
3,842 Mirror Group PLC 11,864
REAL ESTATE
2,857 Land Securities PLC 30,442
RETAILING
2,902 Great Universal Stores PLC 29,560
6,036 Safeway PLC 32,087
SHIPPING/TRANSPORTATION
2,072 Peninsular & Orient Steam Navigation Co. 16,635
UTILITIES
1,368 East Midlands Electricity PLC 12,320
1,603 London Electricity PLC 15,799
5,278 National Power PLC 21,703
1,062 Southern Electricity PLC 11,150
------------
601,391
------------
TOTAL COMMON STOCK
(COST $3,452,478) 3,452,274
------------
Shares Issuer Value
- --------- ------------------------------------------------------ ------------
PREFERRED STOCK--0.0%
MALAYSIA--
CONSTRUCTION
4,000 Sunway Building Technology, Bhd, Loan Stock $ 1,275
------------
(COST $1,284)
WARRANTS--0.1%
MALAYSIA --
AGRICULTURE
11,750 Industrial Oxygen Inc., Bhd 1,084
CONSTRUCTION
1,600 Sunway Building Technology, Bhd, Expire 7/30/01 1,591
------------
TOTAL WARRANTS
(COST $1,065) 2,675
------------
88.6% TOTAL LONG-TERM INVESTMENTS
(COST $3,454,827) 3,456,224
------------
Principal
Amount(USD)
- ---------
SHORT-TERM INVESTMENTS--4.7%
COMMERCIAL PAPER
$175,000 Household Finance Corp., 5.20%, 09/03/96 175,000
------------
U.S. GOVERNMENT OBLIGATIONS
10,000 U.S. TREASURY BILL, 11/14/96 9,895
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $184,895) 184,895
------------
TOTAL INVESTMENTS--93.3%
(COST $3,639,722) $3,641,119
============
14
<PAGE>
Shares Issuer Value
------ ------ -----
LONG-TERM INVESTMENTS--81.8%
COMMON STOCK--48.3%
1.1% AEROSPACE
700 Allied-Signal, Inc. $ 43,225
------------
0.9% AGRICULTURAL
800 Case Corp. 36,400
------------
0.5% AIRLINES
200 AMR Corp. * 16,400
200 Continental Airlines, Inc., Class B,* 4,525
------------
20,925
------------
0.5% AUTOMOTIVE
400 General Motors 19,900
------------
3.8% BANKING
1,100 Bank of Boston Corp. 58,025
200 Citicorp 16,650
1,000 Commonwealth Bank of Australia, ADR# (Australia) 16,125
1,200 National City Corp. 45,150
200 NationsBank Corp. 17,025
------------
152,975
------------
1.4% CHEMICALS
300 Cabot Corp. 8,250
100 Dow Chemical Co. 7,975
500 duPont (EI) de Nemours 41,063
------------
57,288
------------
2.7% COMPUTERS/COMPUTER HARDWARE
600 Compaq Computer* 33,975
200 Gateway 2000 Inc.,* 8,913
500 International Business Machines Corp. 57,188
300 Solectron Corp.* 11,212
------------
111,288
------------
4.8% CONSUMER PRODUCTS
700 Avon Products, Inc. 33,512
1,300 Black & Decker Corp. 51,350
1,100 First Brands Corp. 25,025
200 Nike, Inc., Class B, 21,600
400 Philip Morris Companies, Inc. 35,900
300 Procter & Gamble Co. 26,663
------------
194,050
------------
0.2% DIVERSIFIED
200 Harnischfeger Industries, Inc. 7,550
------------
1.5% ELECTRONICS/ELECTRICAL EQUIPMENT
400 Intel Corp. 31,925
500 Teradyne Inc,* 7,750
500 Texas Instruments 23,375
------------
63,050
------------
1.3% ENTERTAINMENT/LEISURE
1,800 Carnival Corp., Class A 50,850
------------
2.1% FINANCIAL SERVICES
500 Federal Home Loan Mortgage Corp. $ 44,188
1,200 Green Tree Financial Corp. 41,700
------------
85,888
------------
1.8% FOOD/BEVERAGE PRODUCTS
500 Coca-Cola Enterprises, Inc. 20,187
800 PepsiCo., Inc. 23,000
200 Unilever NV, ADR (Netherlands) 28,700
------------
71,887
------------
2.5% HEALTH CARE
1,000 Columbia/HCA Healthcare Corp. 56,375
500 HEALTHSOUTH Corp.* 16,187
300 Medtronic, Inc. 15,600
500 OrNda Healthcorp * 12,875
------------
101,037
------------
1.2% INSURANCE
400 Allstate Corp. 17,850
300 American Bankers Insurance Group, Inc. 14,250
200 Mid Ocean, Ltd. (Bermuda) 8,275
100 Transatlantic Holdings, Inc. 6,937
------------
47,312
------------
3.0% MANUFACTURING
800 Ingersoll-Rand Co. 34,200
400 Johnson Controls 28,200
300 Kennametal Inc. 9,300
1,100 Parker Hannifin Corp. 42,900
300 Pentair, Inc. 8,175
------------
122,775
------------
1.2% METALS/MINING
600 Aluminum Co. ofAmerica (ALCOA) 37,275
300 Inco, Ltd. (Canada) 9,675
------------
46,950
------------
0.5% OFFICE/BUSINESS EQUIPMENT
400 Xerox Corp. 21,950
------------
4.4% OIL & GAS
100 British Petroleum PLC, ADR (United Kingdom) 11,775
400 Halliburton Company 21,050
300 Mobil Corp. 33,825
600 PanEnergy Corp. 19,875
400 Texaco, Inc. 35,500
400 Tidewater, Inc. 15,350
800 Williams Companies, Inc. 39,900
------------
177,275
------------
0.6% PAPER/FOREST PRODUCTS
200 Boise Cascade Corp. 6,750
300 Willamette Industries 18,525
------------
25,275
------------
15
<PAGE>
2.0% PHARMACEUTICALS
400 American Home Products Corp. $ 23,700
400 Glaxo Wellcome PLC (United Kingdom) 11,400
900 Johnson & Johnson 44,325
------------
79,425
------------
0.5% PRINTING & PUBLISHING
700 New York Times Company, Class A, 21,875
------------
0.9% RESTAURANTS/FOOD SERVICE
1,700 Wendy's International, Inc. 34,425
------------
2.8% RETAILING
600 Federated Department Stores, Inc.* 20,775
1,400 Gap, Inc. 49,000
1,000 Kroger Co.* 42,375
------------
112,150
------------
0.9% SHIPPING/TRANSPORTATION
700 CSX Corp. 35,437
------------
2.6% TELECOMMUNICATIONS
900 BellSouth Corp. 32,625
200 Cincinnati Bell, Inc. 9,550
1,000 Sprint Corp. 40,625
900 Telefonaktiebolaget LM Ericsson, Sp, ADR (Sweden) 20,756
------------
103,556
------------
2.6% UTILITIES
700 CMS Energy Corp. 20,912
1,200 FPL Group Inc. 53,100
400 Sierra Pacific Resources 10,200
500 Texas Utilities Co. 20,500
------------
104,712
------------
TOTAL COMMON STOCK
(COST $1,828,397) 1,949,430
------------
CONVERTIBLE PREFERRED STOCK--1.3%
CONSUMER PRODUCTS
2,400 RJR Nabisco Holdings Corp. $0.6012, Ser. C 12,900
OIL & GAS
800 Enron Corp., 6.25% Exchange Notes, 12/13/98, ACES, 19,500
PAPER/FOREST PRODUCTS
400 International Paper Capital Corp., 5.25% # 18,518
------------
TOTAL CONVERTIBLE PREFERRED STOCK (COST $53,420) 50,918
------------
Principal
Amount Issuer Value
------ ------ -----
CORPORATE BONDS & NOTES--5.3%
AEROSPACE
$100,000 Lockheed Martin Corp., 7.45%, due 6/15/04 $ 100,091
FINANCE
100,000 General Electric Capital Corp., MTN, 9.18%,
due 12/30/08 115,664
------------
TOTAL CORPORATE BONDS & NOTES
(COST $220,392) 215,755
------------
CONVERTIBLE CORPORATE BONDS & NOTES--1.6%
INSURANCE
15,000 American Travellers Corp., 6.50%, due 10/1/05 31,894
RETAILING
30,000 Waban Inc., 6.50%, due 7/1/02 32,100
------------
TOTAL CONVERTIBLE CORPORATE BONDS & NOTES
(COST $44,312) 63,994
------------
U.S. GOVERNMENT OBLIGATIONS--19.0%
U.S. TREASURY NOTES,
100,000 6.13%, due 9/30/00 98,000
500,000 8.00%, due 5/15/01 525,705
125,000 8.50%, due 2/15/20 141,973
------------
765,678
------------
U.S. GOVERNMENT AGENCY SPONSORED OBLIGATIONS--6.3%
250,000 Federal Home Loan Bank,7.54%, due 2/13/98 254,103
------------
TOTAL U.S. GOVERNMENT AND AGENCY SPONSORED OBLIGATIONS
(COST $1,038,240) 1,019,781
------------
TOTAL LONG-TERM INVESTMENTS
(COST $3,184,761) 3,299,878
------------
SHORT-TERM INVESTMENTS--17.5%
U.S. GOVERNMENT OBLIGATIONS
705,000 U.S. Treasury Bill, due 9/5/96 704,803
------------
(COST $704,803)
TOTAL INVESTMENTS--99.3%
(COST $3,889,564) $4,004,681
============
16
<PAGE>
U.S. Treasury Income Portfolio
Portfolio of Investments August 31, 1996
Principal
Amount Issuer Value
------ ------ -----
LONG-TERM INVESTMENTS--77.6%
U.S. GOVERNMENT OBLIGATIONS--27.5%
U.S. TREASURY NOTES
$300,000 6.13%, due 09/30/00 $ 294,000
400,000 8.50% due 02/15/20 454,312
60,000 U.S. Treasury Bond, 10.75%, due 08/15/05 74,972
------------
823,284
------------
U.S. GOVERNMENT AGENCY SPONSORED OBLIGATIONS--20.3%
200,000 Federal Farm Credit Bank, MTN, 7.51%, due 02/13/98 203,188
200,000 Federal Home Loan Bank, 7.54%, due 02/13/98 203,282
200,000 Student Loan Marketing Association, Debenture 7.00%,
due 03/03/98 201,938
------------
608,408
------------
COLLATERALIZED MORTGAGE OBLIGATIONS--29.8%
961,641 Government National Mortgage Association, Pool #3547
6.50%, due 03/15/24 890,413
------------
TOTAL LONG-TERM INVESTMENTS
(COST $2,350,737) 2,322,105
------------
SHORT-TERM INVESTMENTS--20.3%
U.S. GOVERNMENT OBLIGATIONS
U.S. TREASURY BILLS
300,000 4.99%, due 11/21/96 296,632
320,000 5.07%, due 02/20/97 312,248
------------
(COST $608,880) 608,880
------------
97.9% TOTAL INVESTMENTS--97.9%
(COST $2,959,617) $2,930,985
============
Money Market Portfolio
Portfolio of Investments August 31, 1996
Principal
Amount Issuer Value
------ ------ -----
U.S. GOVERNMENT AGENCY SPONSORED OBLIGATIONS--64.1%
$945,000 Federal Farm Credit Bank, Discount Note,
5.16%, due 09/03/96 $ 944,730
950,000 Federal Home Loan Mortgage Corp., Discount Note,
5.20%, due 09/19/96 947,530
------------
1,892,260
------------
CORPORATE BONDS & NOTES--16.2%
100,000 Ford Motor Credit Corp., 8.00%, due 12/01/96 100,682
125,000 International Lease Finance Corp., 7.90%, due 10/01/96 125,198
250,000 Nations BankCorp., 8.50%, due 11/01/96 251,055
------------
476,935
------------
19.3% COMMERCIAL PAPER
100,000 Abbey National PLC, 5.30%, due 11/27/96 (United
Kingdom) 98,719
130,000 AI Credit Corp., 5.27%, due 09/18/96 129,676
100,000 Export Finance & Insurance Corp., 5.31%, due 09/03/96 99,970
101,000 Merrill Lynch & Co., Inc., 5.27%, due 09/13/96 100,823
140,000 Oyster Creek Fuel, 5.30%, due 09/05/96 139,916
------------
569,104
------------
99.6% TOTAL INVESTMENTS--99.6%
(COST $2,938,299)** $2,938,299
============
** The cost of securities is substantially the same for
federal income tax purposes.
Floating Rate Notes: The maturity date shown is the next interest rest date;
the rate shown is the rate in effect at August 31, 1996.
# = Security may only be sold to institutional buyers.
* = Non-income producing securities.
ACES = Automatic CM Exchange Securities
ADR = American Depository Receipt
ADS = American Depository Security
MTN = Medium Term Note
17
<PAGE>
Statement of Assets and Liabilities
August 31, 1996
<TABLE>
<CAPTION>
Growth and Capital International Asset U.S. Treasury Money
Income Growth Equity Allocation Income Market
Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- --------- ---------
ASSETS:
<S> <C> <C> <C> <C> <C> <C>
Investment securities, at
value (Note 1) $8,063,237 $8,140,185 $3,641,119 $4,004,681 $2,930,985 $2,938,299
Cash -- -- -- 321 52,215 4,299
Foreign currency
(Cost $164,467) -- -- 164,633 -- -- --
Other assets 452 452 234 238 3,364 216
Receivables:
Open forward foreign
currency contracts -- -- 538 -- -- --
Investment securities
sold -- 177,588 107,698 246,823 -- --
Dividends and Interest 19,338 1,736 11,171 28,622 23,236 13,399
Expense reimbursement
from Sub-administrator -- -- 38,859 9,920 -- 13,000
Portfolio shares sold 18,828 20,161 245 5,446 11 --
---------- ------------- ---------------- ------------- --------------- -------------
TOTAL ASSETS 8,101,855 8,340,122 3,964,497 4,296,051 3,009,811 2,969,213
---------- ------------- ---------------- ------------- --------------- -------------
LIABILITIES:
Payable to custodian 154 16,976 3,123 -- -- --
Payable for investment
securities purchased -- 385,092 29,975 249,323 -- --
Payable for Portfolio shares
redeemed 5,174 3,320 2,279 2,292 3,103 8,438
Payable for open forward
foreign currency contracts -- -- 6,813 -- -- --
Acrued liabilities:
(Note 2)
Custody fees 2,124 929 1,000 6,421 1,490 1,078
Other 13,062 23,850 20,540 4,798 11,205 9,367
---------- ------------- ---------------- ------------- --------------- -------------
TOTAL LIABILITIES 20,514 430,167 63,730 262,834 15,798 18,883
---------- ------------- ---------------- ------------- --------------- -------------
NET ASSETS:
Paid in capital 6,700,159 6,084,530 3,554,091 3,331,790 2,803,342 2,950,330
Accumulated undistributed
net investment income 65,829 40,578 25,948 69,223 113,552 6
Accumulated net realized
gain on investment
transactions 945,302 883,812 325,428 517,087 105,751 (6)
Net unrealized
appreciation/depreciation
of investments and assets
and liabilities
denominated in foreign
currencies 370,051 901,035 (4,700) 115,117 (28,632) --
---------- ------------- ---------------- ------------- --------------- -------------
NET ASSETS APPLICABLE
TO INVESTORS'
BENEFICIAL INTERESTS $8,081,341 $7,909,955 $3,900,767 $4,033,217 $2,994,013 $2,950,330
========== ============= ================ ============= =============== =============
Shares of beneficial interest
outstanding ($.001 par
value; unlimited number of
shares authorized) 634,138 571,585 368,447 361,593 314,196 2,950,318
Net asset value, redemption
price per share and
maximum offering price per
share $ 12.74 $ 13.84 $ 10.59 $ 11.15 $ 9.53 $ 1.00
Cost of investments $7,693,186 $7,239,150 $3,639,722 $3,889,564 $2,959,617 $2,938,299
---------- ------------- ---------------- ------------- --------------- -------------
</TABLE>
18
<PAGE>
Statement of Operations
For the year ended August 31, 1996
<TABLE>
<CAPTION>
Growth and Capital Asset U.S. Treasury
Income Growth International Allocation Income Money Market
Portfolio Portfolio Equity Portfolio Portfolio Portfolio Portfolio
------------- ------------ ---------------- ------------- --------------- ------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1C):
Interest $ 55,029 $ 59,023 $ 8,890 $ 121,958 $ 249,647 $201,400
Dividends 100,231 57,684 79,881 41,923 -- --
Foreign taxes withheld (373) (112) (14,196) (129) -- --
------------- ------------ ---------------- ------------- --------------- ------------
TOTAL INVESTMENT INCOME 154,887 116,595 74,575 163,752 249,647 201,400
------------- ------------ ---------------- ------------- --------------- ------------
EXPENSES:
Investment advisory fees
(Note 2) 35,435 37,336 31,059 22,327 18,220 8,923
Administration fees
(Note 2) 11,812 12,445 7,765 8,119 7,289 7,139
Accounting fees -- -- 65,000 -- -- --
Custodian fees 32,350 22,992 10,000 34,166 13,409 8,398
Professional fees 32,968 38,030 31,198 25,683 24,867 19,209
Trustees fees and expenses 861 879 545 509 426 418
Miscellaneous expenses 4,179 10,939 18,106 3,604 850 18,113
------------- ------------ ---------------- ------------- --------------- ------------
TOTAL EXPENSES 117,605 122,621 163,673 94,408 65,061 62,200
------------- ------------ ---------------- ------------- --------------- ------------
Less fees waived by the
Advisor, Administrator &
Sub-Administrator
(Note 2E) 47,247 49,781 38,824 30,446 25,509 16,062
Less amounts borne by VFD
(Note 2) 16,884 16,834 82,093 29,444 10,383 26,505
------------- ------------ ---------------- ------------- --------------- ------------
NET EXPENSES 53,474 56,006 42,756 34,518 29,169 19,633
------------- ------------ ---------------- ------------- --------------- ------------
NET INVESTMENT INCOME 101,413 60,589 31,819 129,234 220,478 181,767
------------- ------------ ---------------- ------------- --------------- ------------
REALIZED GAIN (LOSS) ON:
Investment transactions 951,933 857,222 374,008 524,469 117,161 (6)
Foreign currency
transactions -- -- 1,940 -- -- --
CHANGED IN NET UNREALIZED
APPRECIATION/DEPRECIATION
ON:
Investments (252,165) 60,856 (362,346) (219,331) (143,239) --
Foreign currency contracts
and foreign currency
translation -- -- (16,532) -- -- --
------------- ------------ ---------------- ------------- --------------- ------------
Net realized and unrealized
gain (loss) 699,768 918,078 (2,930) 305,138 (26,078) (6)
------------- ------------ ---------------- ------------- --------------- ------------
Net increase in net assets
from operations $ 801,181 $978,667 $ 28,889 $ 434,372 $ 194,400 $181,761
============= ============ ================ ============= =============== ============
</TABLE>
19
<PAGE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Growth and Income Capital Growth International Equity
Portfolio Portfolio Portfolio
----------------------- -----------------------------------------------
3/1/95* 3/1/95* 3/1/95*
Year Ended through Year Ended through Year Ended through
8/31/96 8/31/95 8/31/96 8/31/95 8/31/96 8/31/95
------------ ----------- ------------ ----------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income $ 101,413 $ 59,617 $ 60,589 $ 29,126 $ 31,819 $ 50,982
Net realized gain (loss) on
investment and foreign
currency transactions 951,933 72,703 857,222 100,990 375,948 18,895
Change in net unrealized
appreciation/
depreciation on
investments and foreign
currency translations (252,165) 622,216 60,856 840,179 (378,878) 374,178
------------ ----------- ------------ ----------------------- -----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 801,181 754,536 978,667 970,295 28,889 444,055
------------ ----------- ------------ ----------------------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (95,201) -- (49,138) -- (57,394) --
Net realized gain on
investment transactions (79,334) -- (74,399) -- (68,873) --
------------ ----------- ------------ ----------------------- -----------
(174,535) -- (123,537) -- (126,267) --
------------ ----------- ------------ ----------------------- -----------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Proceeds from shares sold 4,085,514 5,493,551 3,666,046 5,359,497 1,419,166 5,037,711
Reinvestment of
distributions 174,534 -- 123,537 -- 126,267 --
Payment for shares redeemed (3,051,969) (1,471) (3,063,335) (1,215) (3,028,834) (220)
------------ ----------- ------------ ----------------------- -----------
NET INCREASE (DECREASE) FROM
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS: 1,208,079 5,492,080 726,248 5,358,282 (1,483,401) 5,037,491
------------ ----------- ------------ ----------------------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS 1,834,725 6,246,616 1,581,378 6,328,577 (1,580,779) 5,481,546
NET ASSETS:
Beginning of period 6,246,616 -- 6,328,577 -- 5,481,546 --
------------ ----------- ------------ ----------------------- -----------
End of period $ 8,081,341 $6,246,616 $ 7,909,955 $6,328,577 $ 3,900,767 $5,481,546
============ =========== ============ ======================= ===========
</TABLE>
<TABLE>
<CAPTION>
Asset Allocation U.S. Treasury Income
Portfolio Portfolio Money Market Portfolio
----------------------- ----------------------------------------------
3/1/95* 3/1/95* 3/1/95*
Year Ended through Year Ended through Year Ended through
8/31/96 8/31/95 8/31/96 8/31/95 8/31/96 8/31/95
------------ ----------- ------------ ----------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income $ 129,234 $ 102,855 $ 220,478 $ 162,500 $ 181,767 $ 141,356
Net realized gain (loss) on
investment and foreign
currency transactions 524,469 81,344 117,161 69,608 (6) 134
Change in net unrealized
appreciation/
depreciation on
investments and foreign
currency translations (219,331) 334,448 (143,239) 114,606 -- --
------------ ----------- ------------ ----------------------- ----------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS 434,372 518,647 194,400 346,714 181,761 141,490
------------ ----------- ------------ ----------------------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (162,866) -- (269,425) -- (181,761) (141,356)
Net realized gain on
investment transactions (88,726) -- (81,018) -- (134) --
------------ ----------- ------------ ----------------------- ----------
(251,592) -- (350,443) -- (181,895) (141,356)
------------ ----------- ------------ ----------------------- ----------
TRANSACTIONS IN INVESTORS' BENEFICIAL
INTERESTS:
Proceeds from shares sold 1,061,288 5,027,177 439,144 5,043,986 1,170,389 5,295,109
Reinvestment of
distributions 251,592 -- 350,442 -- 181,836 141,356
Payment for shares redeemed (3,008,177) (90) (3,029,448) (782) (3,824,113) (14,247)
------------ ----------- ------------ ----------------------- ----------
NET INCREASE (DECREASE) FROM
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS: (1,695,297) 5,027,087 (2,239,862) 5,043,204 (2,471,888) 5,422,218
------------ ----------- ------------ ----------------------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS (1,512,517) 5,545,734 (2,395,905) 5,389,918 (2,472,022) 5,422,352
NET ASSETS:
Beginning of period 5,545,734 -- 5,389,918 -- 5,422,352 --
------------ ----------- ------------ ----------------------- ----------
End of period $ 4,033,217 $5,545,734 $ 2,994,013 $5,389,918 $ 2,950,330 $5,422,352
============ =========== ============ ======================= ==========
</TABLE>
*Commencement of operations.
Selected Data and Ratios For a Share of Beneficial Interest
Outstanding Throughout Each Period Indicated
<TABLE>
<CAPTION>
Growth and Income Capital Growth International Equity
Portfolio Portfolio Portfolio
------------------ ------------------ --------------------
Year 03/1/95* Year 03/1/95* Year 03/01/95*
Ended through Ended through Ended through
08/31/96 08/31/95 08/31/96 08/31/95 08/31/96 08/31/95
-------- -------- -------- -------- ------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net Asset Value, Beginning
of Period $11.48 $10.00 $11.90 $10.00 $10.89 $10.00
-------- -------- -------- -------- ------------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.294 0.110 0.158 0.055 0.216 0.101
Net Gains or Losses on
Investments (both
realized and unrealized) 1.516 1.370 2.139 1.845 0.034 0.789
-------- -------- -------- -------- ------------------
TOTAL FROM INVESTMENT
OPERATIONS 1.810 1.480 2.297 1.900 0.250 0.890
-------- -------- -------- -------- ------------------
LESS DISTRIBUTIONS:
Dividends from net
investment income 0.300 -- 0.142 -- 0.250 --
Distributions from capital
gains 0.250 -- 0.215 -- 0.300 --
-------- -------- -------- -------- ------------------
TOTAL DISTRIBUTIONS 0.550 -- 0.357 -- 0.550 --
-------- -------- -------- -------- ------------------
NET ASSET VALUE, END OF
PERIOD $12.74 $11.48 $13.84 $11.90 $10.59 $10.89
======== ======== ======== ======== ==================
TOTAL RETURN 16.24% 14.80% 19.66% 19.00% 2.42% 8.90%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(000 omitted) $8,081 $6,247 $7,910 $6,329 $3,901 $5,482
Ratios to Average Net
Assets:#
Ratio of Expenses 0.90% 0.90% 0.90% 0.90% 1.10% 1.09%
Ratio of Net Investment
Income 1.71% 2.14% 0.97% 1.04% 0.82% 1.92%
Ratio of expenses without
waivers and
assumption of expenses 1.98% 1.80% 1.97% 1.80% 4.22% 2.90%
Ratio of net investment
income without
waivers and assumption of
expenses 0.63% 1.24% (0.09)% 0.14% (2.30)% 0.11%
Portfolio Turnover Rate 129% 32% 107% 28% 200% 75%
Average commission rate
paid** $.0599 -- $.0604 -- $.0631 --
</TABLE>
<TABLE>
<CAPTION>
Asset Allocation U.S. Treasury Income Money Market
Portfolio Portfolio Portfolio
--------------------- --------------------- ---------------------
03/01/95* 03/01/95* 03/01/95*
Year Ended through Year Ended through Year Ended through
08/31/96 08/31/95 08/31/96 08/31/95 08/31/96 08/31/95
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net Asset Value, Beginning
of Period $ 11.04 $10.00 $10.69 $10.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.657 0.205 1.173 0.322 0.050 0.028
Net Gains or Losses on
Investments (both
realized and unrealized) 0.488 0.835 (0.858) 0.368 -- --
---------- ---------- ---------- ---------- ---------- ----------
TOTAL FROM INVESTMENT
OPERATIONS 1.145 1.040 0.315 0.690 0.050 0.028
---------- ---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net
investment income 0.670 -- 1.134 -- 0.050 0.028
Distributions from capital
gains 0.365 -- 0.341 -- -- --
---------- ---------- ---------- ---------- ---------- ----------
TOTAL DISTRIBUTIONS 1.035 -- 1.475 -- 0.050 0.028
---------- ---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF
PERIOD $ 11.15 $11.04 $ 9.53 $10.69 $ 1.00 $ 1.00
========== ========== ========== ========== ========== ==========
TOTAL RETURN 10.90 % 10.40 % 2.62 % 6.90 % 5.15 % 2.79 %
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period
(000 omitted) $4,033 $5,546 $2,994 $5,390 $2,950 $5,422
Ratios to Average Net
Assets:#
Ratio of Expenses 0.85 % 0.85 % 0.80 % 0.80 % 0.55 % 0.55 %
Ratio of Net Investment
Income 3.18 % 3.86 % 6.06 % 6.19 % 5.10 % 5.46 %
Ratio of expenses without
waivers and assumption
of expenses 2.33 % 1.65 % 1.79 % 1.62 % 1.74 % 1.21 %
Ratio of net
investment income
without waivers and
assumption of
expenses 1.71 % 3.06 % 5.08 % 5.37 % 3.90 % 4.80 %
Portfolio Turnover
Rate 155 % 45 % 83 % 46 % -- --
Average commission rate
paid** $.0598 -- -- -- -- --
</TABLE>
* Commencement of operations.
# Short periods have been annualized.
** Price per share required for periods commencing after 9/1/95.
See notes to financial statements.
20
<PAGE>
Notes to Financial Statements
1. Organization and Significant Accounting Policies--Mutual Fund Variable
Annuity Trust (the "Trust") was organized on April 14, 1994 as a
Massachusetts business trust, and is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company. The Trust was established to provide a funding medium for
variable annuity contracts issued by life insurance companies. Shares of
the Trust are issued only to insurance company separate accounts in
connection with the variable annuity contracts. The Trust issues six
separate series of shares (the "Portfolio(s)") each of which represents a
separately managed portfolio of securities with its own investment
objectives. The Portfolios are the Growth and Income Portfolio ("GIP"),
Capital Growth Portfolio ("CGP"), International Equity Portfolio ("IEP"),
Asset Allocation Portfolio ("AAP"), U.S. Treasury Income Portfolio
("USGIP"), and Money Market Portfolio ("MMP").
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
THE FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY
THE PORTFOLIOS:
A. Valuation of Investments--Equity securities and options are valued at
the last sale price on the exchange on which they are primarily traded,
including the NASDAQ National Market. Securities for which sale prices
are not available and other over-the-counter securities are valued at
the last quoted bid price. Bonds and other fixed income securities
(other than short-term obligations), including listed issues, are
valued on the basis of valuations furnished by a pricing service. In
making such valuations, the pricing service utilizes both dealer-
supplied valuations and electronic data processing techniques that take
into account appropriate factors such as institutional-sized trading in
similar groups of securities, yield, quality, coupon rate, maturity,
type of issue, trading characteristics and other market data, without
exclusive reliance upon quoted prices. Short-term obligations are
valued at amortized cost if acquired with fewer than 61 days to
maturity, or at value, based on quoted exchange or over-the-counter
prices, until the 61st day prior to maturity and thereafter by
amortizing the value on the 61st day to par at maturity. Portfolio
securities for which there are no such quotations or valuations are
valued at fair value as determined in good faith by or at the direction
of the Trustees.
B. Security Transactions and Investment Income--Investment transactions
are accounted for on the trade date (the date the order to buy or sell
is executed). Securities gains and losses are calculated on the
identified cost basis. Interest income is accrued as earned. Dividend
income is recorded on the ex-dividend date.
C. Repurchase agreements--It is the portfolios' policy that all repurchase
agreements are fully collateralized by U.S. Treasury and Government
agency securities. All collateral is held by the Trust's custodian
bank, sub-custodian or a bank with which the custodian bank has entered
into a sub-custodian agreement or is segregated in the Federal Reserve
Book Entry System. In connection with transactions in repurchase
agreements, if the seller defaults and the value of the collateral
declines, or if the seller enters into an insolvency proceeding,
realization of the collateral by the Trust may be delayed or limited.
D. Futures Contracts--When a fund enters into a futures contract, it makes
an initial margin deposit in a segregated account, either in cash or
liquid securities. Thereafter, the futures contract is marked to market
and the fund makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
The Funds may enter into futures contracts only on exchanges or boards of
trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Fund's credit risk is limited to
failure of the exchange or board of trade.
As of August 31, 1996, the Funds had no outstanding futures contracts.
E. Foreign Currency Translations--The books and records of the Portfolios
are maintained in U.S. dollars. Foreign currency amounts are translated
into U.S. dollars at the official exchange rates, or at the mean of the
current bid and asked prices of such currencies against the U.S. dollar
last quoted by a major bank on the following basis:
21
<PAGE>
(1) Market value of investment securities, other assets and liabilities:
at the closing rate of exchange at the balance sheet date.
(2) Purchases and sales of investment securities and income and
expenses: at the rates of exchange prevailing on the respective dates of
such transactions.
Reported realized foreign exchange gains or losses arise from
disposition of foreign currency, currency gains or losses realized
between the trade and settlement dates on securities transactions, and
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the portfolios' books on the transaction
date and the U.S. dollar equivalent of the amounts actually received or
paid. Unrealized foreign exchange gains and losses arise from changes
(due to the changes in the exchange rate) in the value of foreign
currency and other assets and liabilities denominated in foreign
currencies which are held at period end.
F. Forward Foreign Currency Exchange Contracts--A forward foreign currency
contract is an obligation to purchase or sell a specific currency for
an agreed price at a future date. Each day the forward contract is
open, changes in the value of the contract are recognized as unrealized
gains or losses by "marking to market." When the forward contract is
closed, or the delivery of the currency is made or taken, the portfolio
records a realized gain or loss equal to the difference between the
proceeds from (or cost of) the closing transaction and the portfolio's
basis in the contract. The portfolios are subject to off balance sheet
risk to the extent of the value of the contract for purchases of
currency and in an unlimited amount for sales of currency.
G. Federal Income Tax Status--It is the Trust's policy to comply
individually for each portfolio with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Accordingly,
no federal income tax provision is required.
H. Dividends and Distributions to Shareholders--The portfolios record
dividends and distributions to its shareholders on the record date. The
amount of dividends and distributions from net investment income and
net realized capital gains are determined in accordance with federal
income tax regulations which may differ from generally accepted
accounting principles. These differences are either considered
temporary or permanent in nature. To the extent these differences are
permanent in nature, such amounts are reclassified within the capital
accounts based on their federal tax-basis treatment. The
reclassification made for IEP is as follows: accumulated undistributed
net investment income was increased by $3,231 and an offsetting
decrease was made to accumulated net realized gain/loss on investment
transactions. The difference arises primarily due to different book and
tax treatments for net realized gains (losses) on foreign currency
transactions. Dividends and distributions which exceed net investment
income and net realized capital gains for financial reporting purposes
but not for tax purposes are reported as dividends in excess of net
investment income or distributions in excess of net realized capital
gains. To the extent they exceed net investment income and net realized
capital gains for tax purposes, they are reported as distributions of
paid-in-capital.
I. Expenses--Direct expenses of a portfolio are charged to the respective
Portfolio and general Trust expenses are allocated on the basis of
relative net assets or on another reasonable basis.
2. Fees and Other Transactions with Affiliates
A. Investment Advisory Fees--The Chase Manhattan Bank ("Chase"), a direct
wholly-owned subsidiary of the Chase Manhattan Corporation, is the
Portfolios' investment advisor (the "Advisor") and custodian (the
"Custodian"). The Advisor manages the assets of the Portfolios pursuant
to an Advisory Agreement and, for such services, is paid an annual fee
computed daily and paid monthly based on an annual rate equal to 0.80%
of the International Equity Portfolio's, 0.60% of the Capital Growth
and Growth and Income Portfolios', 0.55% of the Asset Allocation
Portfolio's, 0.50% of the U.S. Treasury Income Portfolio's and 0.25% of
the Money Market Portfolio's average daily net assets. The Advisor
voluntarily waived all its fees.
Chase Asset Management, Inc. ("CAM"), a registered investment adviser, is
the sub-investment adviser to each Portfolio pursuant to a Sub-Investment
Advisory Agreement between CAM and Chase. CAM is a wholly owned subsidiary
of Chase and is entitled to receive a fee, payable by Chase from its
advisory fee, at an annual rate equal to 0.03% of each Fund's average
daily net assets.
22
<PAGE>
B. Administration Fee--Pursuant to an Administration Agreement, Chase (the
"Administrator") provides certain administration services to the
Portfolios. For these services, the Administrator receives from each
Portfolio a fee computed at an annual rate equal to 0.05% of the
respective Portfolio's average daily net assets. The Administrator
voluntarily waived all of its fees.
C. Sub-Administration Fees--Pursuant to a Sub-administration Agreement,
Vista Fund Distributors, Inc. ("VFD" or the "Sub-administrator"), an
indirect wholly-owned subsidiary of BISYS Group Inc., provides certain
sub-administration services to the Portfolios, including providing
officers, clerical staff and office space for an annual fee of 0.15% of
the average daily net assets of each Portfolio. The Sub-administrator
voluntarily waived all of its fees.
D. Waivers of Fees--For the year ended August 31, 1996, the Administrator
and Advisor voluntarily waived fees and the Sub-administrator assumed
expenses for the portfolios as follows:
<TABLE>
<CAPTION>
Growth and Asset
Income Capital Growth International Allocation U.S. Treasury Money Market
Portfolio Portfolio Equity Portfolio Portfolio Income Portfolio Portfolio
--------- --------- ---------------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Administration/
Sub-administrator $11,812 $12,445 $7,765 $8,119 $7,289 $7,139
Advisory 35,435 37,336 31,059 22,327 18,220 8,923
-------------- -------------- --------------------------------- ----------------- --------------
TOTAL WAIVERS $47,247 $49,781 $38,824 $30,446 $25,509 $16,062
============== ============== ================================= ================= ==============
The Sub-Administrator
voluntarily assumed
certain expenses of
the Portfolios: $16,884 $16,834 $82,093 $29,444 $10,383 $26,505
-------------- -------------- --------------------------------- ----------------- --------------
</TABLE>
E. Other--Chase provides portfolio custody and fund accounting services
for all of the Portfolios, with the exception of the IEP for which it
provides only the custody services. Compensation for such services from
Chase are presented in the Statement of Operations as Custodian fees.
The Trust has adopted an unfunded noncontributory defined benefit
pension plan covering all independent trustees of the Trust who will
have served as an independent trustee for at least five years at the
time of retirement. Benefits under this plan are based on compensation
and years of service. Pension expenses for the year ended August 31,
1996, included in Trustees Fees and Expenses in the Statement of
Operations, prepaid pension costs and accrued pension liability
included in other assets, and other accrued liabilities, respectively,
in the Statement of Assets and Liabilities were as follows:
Prepaid Accrued
Pension Pension Pension
Portfolio: Expenses Costs Liability
------------- ------------ --------------
Growth and Income Portfolio $146 $452 $598
Capital Growth Portfolio 146 452 598
International Equity Portfolio 75 234 309
Asset Allocation Portfolio 77 238 315
U.S. Treasury Income Portfolio 60 185 245
Money Market Portfolio 59 182 241
3. INVESTMENT TRANSACTIONS--For the year ended August 31, 1996, purchases and
sales of investments (excluding short-term investments) were as follows:
<TABLE>
<CAPTION>
Asset U.S. Treasury
Growth & Income Capital Growth Intl. Equity Allocation Income
Portfolio Portfolio Portfolio Portfolio Portfolio
- ------------------------- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Purchases (excluding
U.S. Government) $7,721,345 $5,523,092 $6,953,722 $2,653,220 --
Sales (excluding
U.S. Government) 6,278,316 6,458,557 8,872,072 3,704,460 --
Purchases of
U.S. Government -- -- -- 2,704,267 $2,597,354
Sales of
U.S. Government -- -- -- 3,160,359 4,910,360
</TABLE>
4. FEDERAL INCOME TAX MATTERS--For Federal income tax purposes, the cost and
unrealized appreciation/(depreciation) in value of the investment
securities at August 31, 1996 are as follows:
<TABLE>
<CAPTION>
Asset U.S. Treasury
Growth & Income Capital Growth Intl. Equity Allocation Income
Portfolio Portfolio Portfolio Portfolio Portfolio
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Aggregate Cost $7,693,186 $7,239,150 $3,639,722 $3,889,564 $2,959,617
--------------- --------------- --------------- --------------- ---------------
Gross Unrealized
Appreciation 523,738 1,086,176 189,387 183,231 16,491
Gross Unrealized
Depreciation (153,687) (185,141) (188,004) (68,114) (45,124)
--------------- --------------- --------------- --------------- ---------------
NET UNREALIZED
APPRECIATION
(DEPRECIATION) $ 370,051 $ 901,035 $ 1,383 $ 115,117 $ (28,633)
=============== =============== =============== =============== ===============
</TABLE>
5. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST--Transactions in shares of
beneficial interest for the periods presented were as follows:
Growth and Income Portfolio
Periods Ended August 31,
1996 1995*
---------------------------- ------------------------
Amount Shares Amount Shares
--------------- ------------ ------------- ----------
Shares sold $ 4,085,514 328,234 $5,493,551 544,409
Shares issued in
reinvestment
of distributions 174,534 15,050 -- --
Shares redeemed (3,051,969) (253,425) (1,471) (130)
--------------- ------------ ------------- ----------
Net increase in
Trust shares
outstanding $ 1,208,079 89,859 $5,492,080 544,279
=============== ============ ============= ==========
23
<PAGE>
Capital Growth Portfolio
Periods Ended August 31,
1996 1995*
---------------------------- ------------------------
Amount Shares Amount Shares
--------------- ------------ ------------- ----------
Shares sold $ 3,666,046 276,967 $5,359,497 531,860
Shares issued in
reinvestment
of distributions 123,537 10,004 -- --
Shares redeemed (3,063,335) (247,141) (1,215) (105)
--------------- ------------ ------------- ----------
Net increase in Trust
shares outstanding $ 726,248 39,830 $5,358,282 531,755
=============== ============ ============= ==========
International Equity Portfolio
Periods Ended August 31,
1996 1995*
---------------------------- ------------------------
Amount Shares Amount Shares
--------------- ------------ ------------- ----------
Shares sold $ 1,419,166 130,714 $5,037,711 503,579
Shares issued in
reinvestment
of distributions 126,267 12,206 -- --
Shares redeemed (3,028,833) (278,033) (220) (20)
--------------- ------------ ------------- ----------
Net increase (decrease)
in Trust shares
outstanding ($ 1,483,400) (135,113) $5,037,491 503,559
=============== ============ ============= ==========
Asset Allocation Portfolio
Periods Ended August 31,
1996 1995*
---------------------------- ------------------------
Amount Shares Amount Shares
--------------- ------------ ------------- ----------
Shares sold $ 1,061,288 96,621 $5,027,177 502,546
Shares issued in
reinvestment of
distributions 251,592 23,832 -- --
Shares redeemed (3,008,177) (261,398) (90) (8)
--------------- ------------ ------------- ----------
Net increase (decrease)
in Trust shares
outstanding ($ 1,695,297) (140,945) $5,027,087 502,538
=============== ============ ============= ==========
U.S. Treasury Income Portfolio
Periods Ended August 31,
1996 1995*
---------------------------- ------------------------
Amount Shares Amount Shares
--------------- ------------ ------------- ----------
Shares sold $ 439,144 45,896 $5,043,986 504,106
Shares issued in
reinvestment of
distributions 350,442 35,888 -- --
Shares redeemed (3,029,448) (271,621) (782) (73)
--------------- ------------ ------------- ----------
Net increase (decrease)
in Trust shares
outstanding ($ 2,239,862) (189,837) $5,043,204 504,033
=============== ============ ============= ==========
Money Market Portfolio
Periods Ended August 31,
1996 1995*
----------------------------- --------------------------
Amount Shares Amount Shares
-------------- -------------- ------------- ------------
Shares sold $ 1,170,389 1,170,381 $5,295,109 5,295,101
Shares issued in
reinvestment
of distributions 181,836 181,836 141,356 141,356
Shares redeemed (3,824,113) (3,824,110) (14,247) (14,246)
-------------- -------------- ------------- ------------
Net increase
(decrease) in
Trust shares
outstanding ($ 2,471,888) (2,471,893) $5,422,218 5,422,211
============== ============== ============= ============
* Commenced operations on March 1, 1995
6. OPEN FORWARD FOREIGN CURRENCY CONTRACTS The following forward foreign
currency contracts were held by the International Equity Portfolio at
August 31, 1996
<TABLE>
<CAPTION>
Delivery Value Market Net Unrealized
(Local Settlement Value Gain (Loss)
Currency) Cost(USD) Date (USD) (USD)
--------------- ------------ ------------- --------- --------------
<S> <C> <C> <C> <C> <C>
Purchases
- ---------------------
Austrailian Dollars 6,844 $ 5,418 09/03/96 $ 5,421 $ 3
German Deutschemark 85,000 57,237 10/25/96 57,761 524
German Deutschemark 20,000 13,580 10/25/96 13,591 11
Indonesian rupiah 3,917,906 1,674 09/03/96 1,673 (1)
Japanese Yen 15,000,000 140,528 10/09/96 138,949 (1,580)
Japanese Yen 2,613,344 24,115 09/03/96 24,084 (31)
Sales
- ---------------------
German Deutschemark 225,000 152,233 10/25/96 152,897 (664)
German Deutschemark 35,000 23,518 10/15/96 23,768 (250)
Japanese Yen 30,000,000 273,610 10/09/96 277,897 (4,287)
</TABLE>
7. CONCENTRATION OF SHAREHOLDERS At August 31, 1996, all shares outstanding
for each Portfolio are owned either directly or indirectly by a single
insurance company.
24
<PAGE>
Report of Independent Accountants
To the Trustees and Shareholders of
Mutual Fund Variable Annuity Trust
In our opinion, the accompanying statements of assets and liabilities,
including the portfolios of investments, and the related statements of
operations and of changes in net assets and the selected data and ratios for
a share of beneficial interest outstanding present fairly, in all material
respects, the financial position of Growth and Income Portfolio, Capital
Growth Portfolio, International Equity Portfolio, Asset Allocation Portfolio,
U.S. Treasury Income Portfolio and Money Market Portfolio (separate
portfolios constituting Mutual Fund Variable Annuity Trust, hereafter
referred to as the "Trust") at August 31, 1996, the results of each of their
operations for the year then ended, and the changes in each of their net
assets and the selected data and ratios for a share of beneficial interest
outstanding for the year then ended and for the period March 1, 1995
(commencement of operations) through August 31, 1995, in conformity with
generally accepted accounting principles. These financial statements and
selected data and ratios for a share of beneficial interest outstanding
(hereafter referred to as "financial statements") are the responsibility of
the Trust's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at August 31, 1996 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
October 18, 1996
25
<PAGE>
Shareholder Meeting Results (unaudited)
Money Market Portfolio, Growth and Income Portfolio, Capital Growth
Portfolio, Asset Allocation Portfolio, U.S. Treasury Income Portfolio and
International Equity Portfolio are separate series of Mutual Fund Variable
Annuity Trust, a Massachusetts business trust (the "Trust"). A special
meeting of shareholders of the Trust (the "Meeting") was convened on April
16, 1996. At the Meeting, the shareholders of the Trust elected all of the
Trustees then in office and three additional Trustees. The Trustees elected
were Fergus Reid, III, Richard E. Ten Hake, William J. Armstrong, John R.H.
Blum, Joseph J. Harkins, Richard Vartebedian, Stuart W. Cragin, Jr., Irving
L. Thode, W. Perry Neff, Roland R. Epply, Jr. and W.D. MacCalln,
Except as indicated, the shareholders of the Portfolios present at the
meeting, in person or by proxy, each cast their votes on the following
matters as follows (all fractional shares rounded):
Proposal 1--Interim Investment Advisory Agreement
For approval of an interim advisory agreement between the Portfolios and The
Chase Manhattan Bank (the "Adviser")
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 2--New Investment Advisory agreement
For approval of a new investment advisory agreement abetween the Portfolios
and the Adviser and a subadvisory agreement between the Adviser and Chase
Asset Management, Inc.
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,944.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
26
<PAGE>
Proposal 3--Election of Board of Trustees
For the election of 11 trustees to serve as members of the Board of Trustees
of the Trust
Votes Being Cast For Votes Withheld
--------------------- ---------------
FERGUS REID, III
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
RICHARD E. TEN HAKEN
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
WILLIAM J. ARMSTRONG
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
JOHN R.H. BLUM
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
JOSEPH J. HARKINS
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
H. RICHARD VARTABEDIAN
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
27
<PAGE>
STUART W. CRAGIN, JR.
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
IRVING L. THODE
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
W. PERRY NEFF
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
ROLAND R. EPPLY, JR.
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
W.D. MACCALLAN
Money Market 2,430,412.408 0
Growth and Income 375,043.278 0
Capital Growth 381,994.277 0
Asset Allocation 282,969.281 0
U.S. Treasury Income 277,466.176 0
International Equity 255,984.473 0
28
<PAGE>
Proposal 4--Ratification of Selection of Independent Accountants
For approval of ratification of Price Waterhouse LLP as independent
accountants for the 1996 fiscal year of the Portfolios
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 5--Amendment to Declaration of Trust
For approval of an amendment to the Trust's Declaration of Trust
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6a--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Borrowing
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning borrowing
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
29
<PAGE>
Proposal 6b--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Investment for the Purpose of Exercising Control
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning investment for the purpose of exercising control
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6c--Amendment to Portfolios' Fundamental Investment Restriction
Concerning the Making of Loans
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning the making of loans
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6d--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Purchases of Securities on Margin
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning purchases of securities on margin
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 379,549.514 0 2,444.763
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
30
<PAGE>
Proposal 6e--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Concentration of Investments
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning concentration of investment
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6f--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Commodities and Real Estate
For approval of an amendment to the Portfolios' fundamental investment
restriction concerning commodities and real estate
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6g--Amendment to Portfolios' Fundamental Investment Restriction
Regarding Investments in Restricted and Illiquid Securities
For approval of an amendment to the Portfolios' fundamental investment
restriction regarding investments in restricted and illiquid securities
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
31
<PAGE>
Proposal 6h--Reclassification of Portfolios' Fundamental Restriction
Concerning Use of Options as Nonfundamental
For approval of a reclassification, as nonfundamental, of the Portfolios'
fundamental investment restriction concerning the use of options
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6i--Amendment to Portfolios' Fundamental Investment Restriction
Concerning Senior Securities
For approval of an amendment to the Portfolios' fundamental investment
restrictions concerning senior securities
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6j--Amendment to Portfolios' Fundamental Investment Restriction
Regarding Short Sales of Securities
For approval of an amendment to the Portfolios' fundamental investment
restriction regarding short sales of securities
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 375,043.278 0 0
Capital Growth 381,994.277 0 0
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
32
<PAGE>
Proposal 6k--Authorization of Portfolios to Invest its Assets in
Corresponding Portfolios of Other Open-End Investment Company Having
Substantially the Same Investment Objective and Policies as Portfolios
For approval of a proposal to adopt a new investment policy that authorized
the Portfolios to invest all its investable assets in corresponding
portfolios of an open-end investment company having substantially the same
investment objective as the Portfolios
For Against Abstain
---------------- --------- --------------
Money Market 2,187,371.167 0 243,041.241
Growth and Income 372,324.214 0 2,719.064
Capital Growth 379,549.514 0 2,444.763
Asset Allocation 282,969.281 0 0
U.S. Treasury Income 277,466.176 0 0
International Equity 255,984.473 0 0
Proposal 6l--Elimination of the Asset Allocation Portfolio's Fundamental
Investment Restriction Concerning Investments in Other Investment Companies
For approval of a proposal to eliminate the Asset Allocation Portfolio's
fundamental investment restriction concerning investments in other investment
companies
For Against Abstain
-------------- -------------------
Asset Allocation 282,969.281 0 0
Proposal 7--Modification of the Fundamental Investment Policy of the U.S.
Treasury Income Portfolio Regarding Permissible Investments in Government
Securities.
For approval of a proposal to modify the fundamental investment policy of the
U.S. Treasury Income Portfolio
For Against Abstain
-------------- --------- ----------
U.S. Treasury Income 277,466.176 0 0
33
