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Previous: ASV INC /MN/, 4, 1997-12-09 |
Next: TEMPLETON VIETNAM OPPORTUNITIES FUND INC, N-30D, 1997-12-09 |
<PAGE>
-------------------------
OFFITBANK VIF - HIGH YIELD FUND
OFFITBANK VIF - EMERGING MARKETS FUND
OFFITBANK DJG VALUE EQUITY FUND
OFFITBANK VIF - U.S. SMALL CAP FUND
-------------------------
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
THE
OFFITBANK
VARIABLE INSURANCE FUND, INC.
<PAGE>
OFFITBANK
VIF-HIGH YIELD FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CORPORATE BONDS (97.28%)
AEROSPACE/DEFENSE (.53%)
Sequa Corp. Sr Notes, 8.75% , 12/15/01 150,000 $ 153,000
----------
BROADCAST/TELECOMMUNICATIONS (12.64%)
CCPR Services Inc., Sr. Sub Notes 10.00%, 02/01/07 200,000 205,000
Centennial Cellular Corp. Sr Notes, 8.875% 11/01/01 300,000 304,500
Comcast Cellular Holdings, Inc. Sr Notes, 9.50%, 05/01/07 350,000(1) 365,750
Echostar Communications Sr Disc Notes, 0.00%, 06/01/04 500,000(2) 452,500
Granite Broadcast Corporation Sr Sub Notes, 9.375%, 12/01/05 250,000 248,125
Heritage Media Corp. Sr Sub Notes, 8.75%, 02/15/06 200,000 213,000
Nextel Communications Sr Disc. Notes, 0.00%, 09/15/07 350,000(1)(3) 216,125
Paging Network Sr Sub Notes, 10.125%, 08/01/07 250,000 260,000
Pricecellular Wireless Sr Notes, 10.75%, 11/01/04 275,000(1) 297,000
Rogers Cantel, Inc. Sr Sub Notes, 8.80%, 10/01/07 250,000(1) 250,625
Vanguard Cellular Systems Inc. Sr Debs., 9.375%, 04/15/06 300,000 312,000
Viacom Inc. Sub Notes, 8.00%, 07/07/06 500,000 497,500
----------
3,622,125
----------
CABLE (10.99%)
Adelphia Communications Sr Notes, 9.875%, 03/01/07 (144A) 200,000(1) 207,000
Cablevision Systems, Corp. Sr Sub Notes, 9.25%, 11/01/05 300,000 314,250
Century Communications Sr Notes, 8.875%, 01/15/07 400,000 402,000
Comcast, Corp. Sr Sub Debs., 9.375%, 05/15/05 250,000 269,063
Jones Intercable Inc., Sr Sub Debs.,10.50%, 03/01/08 500,000 545,000
Lenfest Communications Inc. Sr Notes, 8.375%, 11/01/05 300,000 301,500
NTL, Inc. Sr Notes, 10.00%, 02/15/07 200,000 209,000
Olympus Communications L.P. Sr Notes, 10.625%, 11/15/06 300,000 325,125
Rogers Cablesystems Ltd., Sr Sec'd Notes, 9.625%, 08/01/02 300,000 318,000
TeleWest Plc Sr Debs., 9.625%, 10/01/06 250,000 261,250
----------
3,152,188
----------
CHEMICALS (3.46%)
Borden Chemicals & Plastics, Notes, 9.50%, 05/01/05 250,000 263,750
Harris Chemical Sr Notes, 10.25%, 07/15/01 250,000 261,250
ISP Holdings, Inc. Sr Notes, 9.00%, 10/15/03 300,000 313,800
Sifto Canada, Inc. Sr Notes, 8.50%, 07/15/00 150,000 152,250
----------
991,050
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-HIGH YIELD FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GROUPS (7.00%)
Chiquita Brands International, Inc. Sr Notes, 10.25%, 11/01/06 250,000 273,125
Fleming Companies, Inc. Sr Notes, 10.625%, 12/15/01 500,000 532,500
Host Marriott Travel Plaza Sr Notes, 9.50%, 05/15/05 250,000 264,375
Revlon Consumer Products Sr Notes, 9.375%, 04/01/01 250,000 258,750
Sealy Corp. Sr Sub Notes, 10.25%, 05/01/03 145,000 152,250
Westpoint Stevens Inc. Sr Sub Debs., 9.375%, 12/15/05 500,000 525,000
----------
2,006,000
----------
FINANCIAL SERVICES/INSURANCE (4.39%)
Amresco Inc. Sr Sub Notes, 10.00%, 03/15/04 200,000 210,000
Navistar Financial Corp. Sr Sub Notes, 9.00%, 06/01/02 150,000 154,875
Presidential Life Corp. Sr Notes, 9.50%, 12/15/00 400,000 418,000
Reliance Group Holdings Inc. Sr Sub Notes, 9.75%, 11/15/03 250,000 263,125
Veritas Holdings Sr Notes, 9.625%, 12/15/03) 200,000(1) 211,000
----------
1,257,000
----------
FOREST & PAPER PRODUCTS (4.83%)
Indah Kiat Finance, Gtd Sr Notes, 10.00%, 07/01/07 250,000(1) 245,313
Repap New Brunswick First Priority Sr Sec'd Notes, 9.875%, 07/15/00 150,000 152,250
Repap New Brunswick First Priority Sr Sec'd Notes, 9.0625%, 07/15/00 250,000(4) 248,126
Repap Wisconsin, Inc. Sr Notes, 9.25%, 02/01/02 150,000 158,250
Stone Container Corp., Sr Sub Notes, 12.25%, 04/01/02 250,000 260,000
Stone Container Corp., Sr Sub. Debs., 10.75%, 10/01/02 300,000 319,125
----------
1,383,064
----------
GENERAL INDUSTRIES/MANUFACTURING (10.03%)
Allied Waste N.A.,Sr Sub, 10.25%, 12/01/06 200,000(1) 218,500
Dominion Textile (USA), Inc. Gtd Sr Notes, 9.25%, 04/01/06 300,000 312,750
Emcor Group Inc., 11.00%, 12/15/01, Callable on 12/15/97 @ 104.00 212,200 222,810
Exide Corp. Sr Notes, 10.75%, 12/15/02, 150,000 159,375
Exide Corp. Sr Notes, 10.00%, 04/15/05, 150,000 160,125
Fedders N.A., Sr Sub Notes, 9.375%, 08/15/07 200,000(1) 203,000
Hayes Wheels International Inc. Sr Sub Notes, 9.125%, 07/15/07 250,000(1) 258,437
Nortek Inc. Sr Notes, 9.25%, 03/15/07 300,000 304,500
Stena Sr Notes, 8.75%, 06/15/07, Callable on 06/15/02 @ 104.375 300,000 300,000
Unisys Corp. Sr Notes, 11.75%, 10/15/04 250,000 281,875
Williams Scotsman Inc. Sr Notes, 9.875%, 06/01/07 450,000(1) 454,500
----------
2,875,872
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-HIGH YIELD FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE (4.18%)
Fresenius Medical Care Trust Pfd. 9.00%, 12/01/06 200,000 208,000
Integrated Health Services Sr Sub Notes 9.50%, 09/15/07 150,000(1) 153,750
Regency Health Services Inc. Sr Sub Notes, 9.875%, 10/15/02 200,000 221,500
Tenet Healthcare Corp. Sr Sub Notes, 8.625%, 01/15/07 300,000 309,000
Vencor Inc. Sr Sub Notes, 8.625%, 07/15/07 (144A) 300,000(1) 304,500
----------
1,196,750
----------
HOTEL/GAMING (9.73%)
Host Marriott Properties Sr Notes, 9.50%, 05/15/05 500,000 528,750
Capstar Hotel Co. Sr Sub Notes, 8.75%, 08/15/07 (144A) 200,000(1) 203,500
Hollywood Park, Inc. Sr Sub Notes, 9.50%, 08/01/07 300,000(1) 303,000
John Q. Hammons Hotel L.P., First Mtge. Notes, 8.875%, 02/15/04 300,000 327,000
Prime Hospitality Corp., First Mtge. Notes, 9.25%, 01/15/06 250,000 261,250
Prime Hospitality Corp. Sr Sub Notes, 9.75%, 04/01/07 250,000 265,000
Station Casinos Sr Sub Notes, 9.625%, 06/01/03 250,000 248,750
Sun International Hotels Ltd., Sr Sub Notes 9.00%, 03/15/07 300,000 310,500
Trump Atlantic City, First Mtge. Notes, 11.25%, 05/01/06 350,000 341,250
----------
2,789,000
----------
METALS/MINING/IRON/STEEL (5.43%)
AK Steel Corp. Sr Notes, 9.125%, 12/15/06 250,000 264,375
Armco, Inc. Sr Notes, 9.375%, 11/01/00 200,000 205,500
CSN Iron, Gtd. Notes, 9.125%, 06/01/07, (144A) 200,000(1) 197,000
Kaiser Aluminum & Chemicals Sr Notes, 9.875%, 02/15/02 200,000 208,000
Murrin Murrin Sr Sub Notes, 9.375%, 08/31/07 250,000(1) 256,250
Westmin Resources Ltd. Sr Notes, 11.00%, 03/15/07 250,000 268,438
Wheeling-Pittsburgh Corp. Sr Notes, 9.375%, 11/15/03 150,000 155,250
----------
1,554,813
----------
OIL/GAS (6.45%)
Clark Oil & Refining Sr Notes, 10.50%, 12/01/01 5,800,000 515,000
Ferrellgas Partners L.P., Sr Sec'd, 9.375%, 06/15/06 400,000 420,000
Giant Industries Sr Sub Notes, 9.00%, 09/01/07 200,000(1) 201,000
J Ray McDermott Sr Sub Notes, 9.375%, 07/15/06 300,000 315,000
Petroleum Heat & Power Sub Notes, 10.125%, 04/01/03 200,000 194,000
Trico Marine Services Sr Notes, 8.50%, 08/01/05 200,000(1) 203,000
----------
1,848,000
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-HIGH YIELD FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PACKAGING/CONTAINERS (2.70%)
Gaylord Container Corporation Sr Notes 9.75%, 06/15/07 250,000 254,374
Silgan Holdings, Inc. Sr Sub Debs., 9.00%, 6/01/09 250,000 254,687
Vicap S.A., Gtd Sr Notes, 10.25%, 05/15/02 (144A) 250,000(1) 265,938
----------
774,999
----------
PUBLISHING/ADVERTISING (5.09%)
Hollinger International Publishing Sr Notes, 8.625%, 03/15/05 250,000 256,875
K-III Communications Corp. Sr Notes, 8.50%, 02/01/06 200,000(1) 204,632
Lamar Advertising Co., Sr Sub Notes, 9.625%, 12/01/06 250,000 263,750
PUBLISHING/ADVERTISING (CONTINUED)
Outdoor Systems, Inc. Sr Sub Notes, 9.375%, 10/15/06 250,000 262,500
Sun Media Corp., Sr Sub Notes, 9.50%, 05/15/07 250,000 259,062
Universal Outdoor Sr Sub Notes, 9.75%, 10/15/06 200,000 212,500
----------
1,459,319
----------
RETAIL (4.19%)
Nine West Group, Inc. Sr Notes, 8.375%, 08/15/05 249,748 251,250
Petro Stopping Sr Notes, 10.50%, 02/01/07 200,000 209,000
Stater Brothers Holdings Sr Notes, 11.00%, 03/01/01 250,000(1) 273,750
Stater Brothers Holdings Sr Sub Notes, 9.00%, 07/01/04 (144A) 200,000(1) 205,000
TravelCenters of America Sr Sub Notes, 10.25%, 04/01/07 250,000 262,500
----------
1,201,500
----------
REAL ESTATE (1.38%)
Rockefeller Center Property Trust 0.00%, 12/31/00 400,000 281,500
Trizec Finance Ltd. Sr Notes, 10.875%, 10/15/05 100,000 114,250
----------
395,750
----------
TRANSPORTATION (3.69%)
Navigator Gas Transport, First Priority Ship Mtge Notes, 10.50%,
06/30/97, (144A) 250,000(1) 267,500
Piedmont Aviation Inc. Equipment Trust, 9.65%, 05/08/99 277,000 278,385
Piedmont Aviation Inc. Equipment Trust, 9.80%, 05/08/04 261,000 262,305
Valujet Inc. Sr Notes, 10.50%, 04/15/01 (144A) 250,000(1) 249,375
----------
1,057,565
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-HIGH YIELD FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (.57%)
Cleveland Electric Illuminating Co., First Mtge. Bonds, 9.50%, 05/15/05 150,000 163,478
----------
TOTAL CORPORATE BONDS AND NOTES 27,881,473
----------
PREFERRED STOCKS (.71%)
FOREST PRODUCTS
Asia Pulp&Paper 12.00% Gtd Preference Shares Ser A 200,000 204,499
----------
BANK SWEEP ACCOUNT (0.00%)
Bank of New York Cash Reserve Sweep 13 13
----------
REPURCHASE AGREEMENTS (2.47%)
Bank of New York Repo 5.90% 10/01/97, dated 09/30/97 708,900 708,900
(Collateralized by U.S. Treasury Notes 5.875%, 04/30/98, ----------
market value of $723,506)
TOTAL INVESTMENTS (COST $27,734,548) (100.46%) (5) 28,794,885
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (-.46%) (132,374)
----------
TOTAL NET ASSETS (100%) $ 28,662,511
----------
----------
</TABLE>
(1) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(2) Security is a step-up security. Interest rate increases to 12.875% on
June 1, 2004.
(3) Security is a step-up security. Interest rate increases to 10.65% on
September 15, 2002.
(4) Interest rate reflected is rate in effect on September 30, 1997.
(5) Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation $ 1,078,332
Unrealized depreciation (17,995)
------------
Net unrealized appreciation $ 1,060,337
------------
------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF - EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CERTIFICATES OF DEPOSIT
BANKING
CHILE (1.85%)
Citibank Chilean Peso, Floating Rate, 10/30/97 42,060,000(a) $ 106,093
----------
CORPORATE BONDS (91.06%)
BUILDING MATERIALS
MEXICO (2.97%)
Cemex SA, 12.75%, 07/15/06 (144A) 40,000(1) 48,750
Cemex SA, 12.75%, 07/15/06 100,000 121,875
----------
170,625
----------
CONSTRUCTION
MEXICO (3.67%)
Bufete Industrial, 11.375%, 07/15/99 (144A) 200,000(1) 210,500
----------
FOOD
BRAZIL (4.44%)
Arisco Prod Alimenticios, 10.75%, 05/22/05, Callable on
05/22/02 @ 99.125, putable on 05/22/02 at 99.125, (144A) 250,000(1) 254,688
----------
GENERAL INDUSTRIES/MANUFACTURING
MEXICO (4.63%)
Vicap SA, 10.25%, 05/15/02 (144A) 200,000(1) 212,750
Vicap SA, 10.25%, 05/15/02 50,000 53,188
----------
265,938
----------
HOTEL & TOURISM
MEXICO (2.74%)
Grupo Posadas SA, 10.375%, 02/13/02 (144A) 150,000(1) 157,313
----------
MEDIA (8.39%)
BRAZIL (5.09%)
Globo Communicacoes Part, 10.50%, 12/20/06, Callable on
12/20/01 @ 104.50, (144A) 170,000(1) 176,800
RBS Participacoes SA, putable, 14.00%, 12/15/03 100,000 115,750
----------
292,550
----------
MEXICO (3.30%)
Grupo Televisa SA, 0.00%, 05/15/08 50,000(2) 37,875
Grupo Televisa SA, 0.00%, 05/15/08 (144A) 200,000(1)(2) 151,500
----------
189,375
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF - EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
METALS/MINING/IRON/STEEL
PANAMA (3.42%)
CSN Iron SA, 9.125%, 06/01/07, (144A) 200,000(1) 196,500
----------
PAPER/PULP
MEXICO (2.50%)
Grupo Industrial Durango, 12.625%, 08/01/03 125,000 143,437
----------
PETROCHEMICALS (6.25%)
BRAZIL (1.84%)
Opp Peroquimica SA, putable, 11.5%, 02/23/04 (144A) 100,000(1) 105,750
----------
MEXICO (4.41%)
Cydsa SA, 9.375%, 06/25/02 (144A) 250,000(1) 253,125
----------
SOVEREIGN DEBT (30.33%)
ARGENTINA (8.55%)
Brady Floating Rate Bonds, 6.6875%, 03/31/98*,
(Final Maturity 03/31/05) 288,090 273,686
City of Buenos Aires, 11.25%, 04/11/07 (144A) 50,000(1) 55,875
Republic of Argentina, 10.50%, 11/14/02 250,000(b) 161,464
----------
491,025
----------
BRAZIL (7.10%)
Brady DCB Floating Rate Bonds, 6.9375%, 10/15/97*,
(Final Maturity 04/15/12) 200,000 169,562
Brady C-Bond, 8.00%, 10/15/97*,
(Final Maturity 04/15/14) 280,163 238,225
----------
407,787
----------
ECUADOR (2.12%)
Brady Discount Floating Rate Bonds, 6.6875%, 02/27/98*
(Final Maturity 02/28/25) 150,000 121,970
----------
PERU (4.66%)
Past Due Interest - Floating Rate Bond, 4.00%, 03/07/98* (Final
Maturity 03/07/17) 400,000 267,500
----------
VENEZUELA (7.90%)
Brady DCB Floating Rate Bonds, 6.75%, 12/18/97*,
(Final Maturity 12/18/07) 250,000 238,360
Brady FLIRB Floating Rate Bonds, 6.75%, 03/31/98*,
(Final Maturity 03/31/07) 226,757 215,419
----------
453,779
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF - EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
STEEL (12.89%)
ARGENTINA (3.79%)
Acindar Industrial Argentina, 11.25%, 02/15/04 200,000 217,500
----------
MEXICO (9.10%)
Hylsa SA De CV, 9.25%, 09/15/07 250,000(1) 255,625
Ispat Mexicana SA, 10.375%, 03/15/01 250,000 266,875
----------
522,500
----------
TELECOMMUNICATIONS
VENEZUELA (2.68%)
Cantv Finance Ltd, 8.875%, 02/01/02 50,000 51,375
Cantv Finance Ltd, 9.25%, 02/01/04 100,000 102,750
----------
154,125
----------
UTILITIES
BRAZIL (6.15%)
Cia Saneamento Basico, 10.00%, 07/28/05 (144A) 200,000(1) 201,000
Comp Energetica Sao Paulo, 9.25%, 05/10/01 250,000(b) 151,958
----------
352,958
----------
TOTAL CORPORATE BONDS 5,074,820
----------
LOANS
MOROCCO (4.08%)
Restructuring and Consolidation Agreement Floating
Rate Bond, 6.8125%, 11/12/97* (Final Maturity 01/01/09) 250,000(3) 234,375
----------
TOTAL INVESTMENTS (COST $5,259,248) (96.99%) (4) 5,569,413
OTHER ASSETS IN EXCESS OF LIABILITIES (3.01%) 172,779
----------
TOTAL NET ASSETS (100%) $5,742,192
----------
----------
</TABLE>
- ----------------------------------------------------------------------------
Principal denominated in the following currency:
(a) Chilean Peso (b) German Deutschmark
(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(2) Security is a step-up security. Interest rate increases to 13.25% on May
16, 2001.
(3) Illiquid security.
(4) Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation $ 323,200
Unrealized depreciation (13,035)
----------
Net unrealized appreciation $ 310,165
----------
----------
* Variable rate security. Maturity date reflects the next rate change date.
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
DJG VALUE EQUITY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES (87.62%)
AUTOMOTIVE (3.91%)
Navistar International Corporation* 2,000 $ 55,250
----------
BUSINESS EQUIPMENT & SERVICES (9.70%)
Comdisco, Inc. 2,550 83,034
Ryder Systems, Inc. 1,500 53,906
----------
136,940
----------
CHEMICALS (3.79%)
Freeport McMoRan, Inc. 1,500 53,438
----------
COMPUTER SOFTWARE (2.83%)
BancTec, Inc.* 1,500 39,938
----------
CONSUMER DURABLES (2.85%)
General Motors Corporation 600 40,163
----------
DIVERSIFIED (5.55%)
ITT Industries, Inc. 1,500 49,781
Viad Corp. 1,500 28,594
----------
78,375
ELECTRICAL EQUIPMENT (1.66%)
AMETEK, Inc. 1,000 23,500
----------
ENTERTAINMENT (5.67%)
Mirage Resorts, Inc.* 1,400 42,175
Time Warner, Inc. 700 37,931
----------
80,106
----------
FINANCIAL SERVICES (5.29%)
American Express Company 400 32,750
Dime Bancorp, Inc. 2,000 41,875
----------
74,625
----------
INSURANCE (8.12%)
TIG Holdings, Inc. 2,000 69,625
Everest Reinsurance Holdings, Inc. 1,100 45,100
----------
114,725
----------
HEALTH CARE (2.88%)
Aetna, Inc. 500 40,719
----------
MEDICAL-HOSPITAL SERVICES (2.27%)
Foundation Health Systems, Inc.* 1,000 32,000
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
DJG VALUE EQUITY FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MULTI-INDUSTRY (3.86%)
Whitman Corporation 2,000 54,500
----------
RETAIL (11.42%)
BJ's Wholesale Club, Inc.* 1,800 52,537
Footstar, Inc.* 2,100 56,569
Homebase, Inc.* 5,800 52,200
----------
161,306
----------
TECHNOLOGY (7.03%)
International Game Technology 2,500 56,875
Sensormatic Electronics Corporation 3,000 42,375
----------
99,250
----------
TELECOMMUNICATIONS (10.79%)
AirTouch Communucations, Inc.* 1,700 60,244
COMSAT Corporation 1,600 38,100
Telephone and Data Systems, Inc. 1,200 54,000
----------
152,344
----------
TOTAL EQUITY SECURITIES (COST $947,647) 1,237,178
----------
BANK SWEEP ACCOUNT (11.96%) Principal Amount
The Bank of New York Cash Reserve Sweep $ 168,988 168,988
----------
TOTAL INVESTMENTS (COST $1,116,635) (99.58%) (1) 1,406,166
OTHER ASSETS IN EXCESS OF LIABILITIES (.42%) 5,885
----------
TOTAL NET ASSETS (100%) $1,412,051
----------
----------
</TABLE>
- ------------------------------------------------------------
* Denotes non-income producing security
(1) Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation $ 293,742
Unrealized depreciation (4,211)
----------
Net unrealized appreciation $ 289,531
----------
----------
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-U.S. SMALL CAP FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES (94.50%)
AUTOMOTIVE PARTS (4.23%)
Exide Corporation 1,310 $ 29,721
Monro Muffler Brake, Inc.* 1,676 25,559
----------
55,280
----------
COMMERCIAL SERVICES (5.51%)
HealthPlan Services Corporation 2,200 46,475
Iron Mountain, Inc.* 730 25,550
----------
72,025
----------
COMPUTER EQUIPMENT (7.32%)
Computer Task Group, Inc. 620 26,001
Kronos, Inc.* 1,185 30,366
Network Appliance, Inc.* 725 39,422
----------
95,789
----------
COMPUTER SOFTWARE (12.13%)
BancTec, Inc.* 1,458 38,819
Broadway & Seymour, Inc. * 2,210 22,100
Integrated Systems, Inc.* 1,680 41,475
Sterling Commerce, Inc.* 398 14,303
Sterling Software, Inc.* 1,170 41,974
----------
158,671
----------
ELECTRICAL & ELECTRONICS (3.42%)
Microsemi Corporation* 2,590 44,678
----------
ELECTRONIC COMPONENTS (3.69%)
Mentor Graphics Corporation 4,000 48,250
----------
FINANCIAL - BANKING (2.99%)
Financial Federal Corporation* 2,202 39,085
----------
FINANCIAL SERVICES (4.77%)
DVI, Inc.* 1,950 32,541
Thornburg Mortgage Asset Corporation 1,420 29,820
----------
62,361
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-U.S. SMALL CAP FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE (8.96%)
Datascope Corporation* 1,140 25,080
Healthcare Services Group, Inc.* 2,300 28,463
ReSound Corporation* 4,470 24,026
Rural/Metro Corporation* 1,300 39,650
----------
117,219
----------
HOME FURNISHINGS (3.28%)
Windmere-Durable Holdings, Inc. 1,800 $ 42,862
----------
HOTEL (1.91%)
La Quinta Inns, Inc. 1,060 24,976
----------
INDUSTRIAL (2.61%)
American Disposal Services, Inc.* 1,090 34,063
----------
INSTRUMENTIATION (2.30%)
PerSeptive Biosystems, Inc.* 2,520 30,083
----------
MANUFACTRUING-CONSUMER GOODS (1.56%)
Paxar Corporation* 1,038 20,436
----------
MEDICAL - INFORMATION SYSTEMS (1.53%)
ADAC Laboratories* 1,070 19,996
----------
MINING (1.26%)
Consolidated Nevada 29,480 16,629
----------
MORTGAGE BANKERS & CORRESPONDENCE (.61%)
Imperial Credit Industries, Inc.* 300 7,950
----------
OIL/GAS - EXPLORATION (4.22%)
KN Energy, Inc. 400 18,300
Lomak Petroleum, Inc. 1,910 36,887
----------
55,187
----------
RESTAURANTS (2.33%)
Buffets, Inc.* 2,820 30,491
----------
RETAIL (6.27%)
Mazel Stores, Inc.* 1,070 26,482
The Sports Authority, Inc.* 1,950 36,319
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
OFFITBANK
VIF-U.S. SMALL CAP FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL (CONTINUED)
United Retail Group, Inc.* 6,400 19,200
----------
82,001
----------
SERVICES (3.36%)
Information Resources, Inc.* 2,530 43,959
----------
TECHNOLOGY (3.19%)
Platinum Technology, Inc.* 1,933 41,681
----------
TELECOMMUNICATIONS (6.55%)
TresCom International, Inc.* 4,400 $ 47,300
Vanguard Cellular Systems, Inc. Class A* 2,450 38,281
----------
85,581
----------
TOTAL EQUITY SECURITIES (COST $1,022,887) 1,235,616
----------
BANK SWEEP ACCOUNT (5.90%) Principal Amount
Bank of New York Cash Reserve Sweep $ 77,187 77,187
----------
TOTAL INVESTMENTS (COST $1,091,401) (99.91%) (1) 1,306,438
OTHER ASSETS IN EXCESS OF LIABILITIES (.09%) 1,130
----------
TOTAL NET ASSETS (100%) 1,307,568
----------
----------
</TABLE>
- -------------------------------------------------------------
* Denotes non-income producing security.
(1) Represents cost for federal income tax and book purposes and differs from
value by net unrealized appreciation of securities as follows:
Unrealized appreciation $ 228,386
Unrealized depreciation (13,349)
----------
Net unrealized appreciation $ 215,037
----------
----------
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - SEPTEMBER 30, 1997 (UNAUDITED)
VIF- HIGH YIELD FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at market value (cost $27,734,548) $ 28,794,885
Interest and dividends receivable 707,568
Unamortized organization expense 49,651
-------------
Total Assets 29,552,104
LIABILITIES:
Payable for investment securities purchased 597,344
Dividends payable 187,979
Investment advisory fees payable 28,603
Administation fees payable 1,764
Transfer agent fees payable 149
Legal fees payable 32,848
Audit fees payable 21,342
Fund accounting fees payable 2,775
Other payables and accrued expenses 16,789
-------------
Total Liabilities 889,593
-------------
NET ASSETS $ 28,662,511
-------------
-------------
NET ASSETS Consist of:
Shares of capital stock, $0.001 par value per share, 2,641,136 issued
and outstanding (Note 5) $ 2,641
Additional paid-in capital 27,494,437
Accumulated undistributed net investment income 8,755
Accumulated net realized gains on investment transactions 96,341
Net unrealized appreciation of investments 1,060,337
-------------
NET ASSETS $ 28,662,511
-------------
-------------
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE PER SHARE) $ 10.85
-------------
VIF- EMERGING MARKETS FUND
- -----------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (cost $5,259,248) $ 5,569,413
Foreign currency 10,417
Cash 102,458
Interest and dividends receivable 146,990
Unamortized organization expenses 55,442
-------------
Total Assets 5,884,720
LIABILITIES:
Dividends payable 110,545
Unrealized depreciation on foreign currency contracts 3,964
Transfer agent fees payable 116
Legal fees payable 8,135
Audit fees payable 12,486
Fund accounting fees payable 2,476
Other payables and accrued expenses 4,806
-------------
Total Liabilities 142,528
-------------
NET ASSETS $ 5,742,192
-------------
-------------
NET ASSETS consist of:
Shares of capital stock, $0.001 par value per share, 526,599 issued
and outstanding (Note 5) $ 527
Additional paid-in capital 5,358,529
Accumulated undistributed net investment income 11,933
Accumulated net realized gains on investment transactions 64,708
Net unrealized appreciation of investments and foreign currency translations 306,495
-------------
NET ASSETS $ 5,742,192
-------------
-------------
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE PER SHARE) $ 10.90
-------------
</TABLE>
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - SEPTEMBER 30, 1997 (UNAUDITED)
DJG VALUE EQUITY FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at market value (cost $1,116,635) $ 1,406,166
Interest and dividends receivable 1,152
Receivable from Adviser (Note 3) 17,355
Unamortized organization expense 8,199
-------------
Total Assets $ 1,432,872
LIABILITIES:
Legal fees payable 940
Audit fees payable 7,488
Organizational expense payable 9,057
Fund Accounting fees payable 2,775
Other payables and accrued expenses 561
-------------
Total Liabilities 20,821
-------------
NET ASSETS $ 1,412,051
-------------
-------------
NET ASSETS consist of:
Shares of capital stock, $0.001 par value per share, 106,453 issued
and outstanding (Note 5) $ 106
Additional paid-in capital 1,063,260
Accumulated undistributed net investment income 1,824
Accumulated net realized gains on investment transactions 57,330
Net unrealized appreciation of investments 289,531
-------------
NET ASSETS $ 1,412,051
-------------
-------------
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE PER SHARE) $ 13.26
-------------
VIF- U.S. SMALL CAP FUND
- -----------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (cost $1,091,401) $ 1,306,438
Interest and dividends receivable 1,577
Receivable from Adviser (Note 3) 18,059
Unamortized organization expense 8,198
-------------
Total Assets $ 1,334,272
LIABILITIES:
Payable for investment securities purchased 6,018
Legal fees payable 699
Audit fees payable 7,488
Organizational expense payable 9057
Fund accounting fees payable 2925
Other payables and accrued expenses 517
-------------
Total Liabilities 26,704
-------------
NET ASSETS $ 1,307,568
-------------
-------------
NET ASSETS consist of:
Shares of capital stock, $0.001 par value per share, 99,215 issued
and outstanding (Note 5) $ 99
Additional paid-in capital 1,047,281
Accumulated undistributed net investment loss (1,430)
Accumulated net realized gains on investment and foreign currency transactions 46,582
Net unrealized appreciation of investments 215,037
-------------
NET ASSETS $ 1,307,568
-------------
-------------
NET ASSET VALUE (OFFERING AND REDEMPTION PRICE PER SHARE) $ 13.18
-------------
</TABLE>
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
VIF- HIGH YIELD FUND
For the six months ended September 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 1,200,212
Dividends 16,100
-------------
$ 1,216,312
EXPENSES:
Advisory (Note 3) 111,839
Administration (Note 3) 19,736
Fund accounting (Note3) 15,276
Amortization of organization expenses 7,111
Legal 19,467
Audit 17,473
Miscellaneous 12,477
-------------
Total expenses before waivers/ reimbursements 203,379
Less expenses waived/ reimbursed (Note 3) (52,054)
-------------
Net expenses 151,325
-------------
NET INVESTMENT INCOME 1,064,987
-------------
Realized and Unrealized Gains on Investments:
Net realized gains on investment transactions 71,672
Net change in unrealized appreciation on investments 1,061,803
-------------
Net realized and unrealized gains on investments 1,133,475
-------------
Increase in Net Assets Resulting from Operations $ 2,198,462
-------------
-------------
VIF- EMERGING MARKETS FUND
For the six months ended September 30, 1997
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 252,025
-------------
$ 252,025
EXPENSES:
Advisory (Note 3) 24,335
Administration (Note 3) 4,056
Fund accounting (Note 3) 14,976
Amortization of organization expenses 7,111
Legal 3,855
Audit 8,986
Miscellaneous 5,630
-------------
Total expenses before waivers/ reimbursements 68,949
Less expenses waived/ reimbursed (Note 3) (28,391)
-------------
Net expenses 40,558
-------------
NET INVESTMENT INCOME 211,467
-------------
Realized and Unrealized Gains on Investments:
Net realized gains on investment transactions 54,157
Net realized loss on foreign currency transactions (109)
Net change in unrealized appreciation on investments 274,952
Net change in unrealized appreciation on foreign currency translations (18,799)
-------------
Net realized and unrealized gains on investments 310,201
-------------
Increase in Net Assets Resulting from Operations $ 521,668
-------------
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
DJG VALUE EQUITY FUND
For the period from April 11, 1997* through September 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 4,722
Dividends 4,438
-------------
$ 9,160
EXPENSES:
Advisory (Note 3) 4,691
Administration (Note 3) 880
Fund accounting (Note 3) 14.584
Amortization of organization expenses 858
Legal 940
Audit 7,488
Miscellaneous 821
-------------
Total expenses before waivers/ reimbursements 30,262
Less expenses waived/ reimbursed (Note 3) (22,926)
-------------
Net expenses 7,336
-------------
NET INVESTMENT INCOME 1,824
-------------
Realized and Unrealized Gains on Investments:
Net realized gains on investment transactions 57,330
Net change in unrealized appreciation on investments 289,531
-------------
Net realized and unrealized gains on investments 346,861
-------------
Increase in Net Assets Resulting from Operations $ 348,685
-------------
-------------
* Commencement of operations.
VIF- U.S. SMALL CAP FUND
For the period from April 11, 1997* through September 30, 1997
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 3,166
Dividends 2,069
-------------
$ 5,235
EXPENSES:
Advisory (Note 3) 4440
Administration (Note 3) 666
Fund accounting (Note 3) 14,842
Amortization of organization expenses 858
Legal 699
Audit 7,488
Miscellaneous 838
-------------
Total expenses before waivers/ reimbursements 29,831
Less expenses waived/ reimbursed (Note 3) (23,165)
-------------
Net expenses 6,666
-------------
NET INVESTMENT LOSS (1,431)
-------------
Realized and Unrealized Gains on Investments:
Net realized gains on investment transactions 46,596
Net realized loss on foreign currency transactions (14)
Net change in unrealized appreciation on investments 215,037
-------------
Net realized and unrealized gains on investments 261,619
-------------
Increase in Net Assets Resulting from Operations $ 260,188
-------------
-------------
* Commencement of operations.
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
VIF - HIGH YIELD FUND
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE PERIOD FROM
SEPTEMBER 30, 1997 APRIL 1, 1996* THROUGH
(UNAUDITED) MARCH 31, 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
Operations:
Net investment income $ 1,064,987 $ 677,139
Net realized gains on investment transactions 71,672 24,669
Net change in unrealized appreciation of investments 1,061,803 (1,466)
------------ ------------
2,198,462 700,342
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,064,987) (677,139)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 4,424,985 25,477,804
Dividends reinvested 1,016,130 677,347
Cost of shares redeemed (3,026,219) (1,097,547)
------------ ------------
Changes in net assets from capital share transactions 2,414,896 25,057,604
------------ ------------
Change in net assets 3,548,371 25,080,807
Net Assets:
Beginning of period 25,114,140 33,333
------------ ------------
End of period (including $8,755 and $8,755, respectively, $ 28,662,511 $ 25,114,140
of undistributed net investment income) ------------ ------------
------------ ------------
*Commencement of operations
VIF - Emerging Markets Fund
FOR THE SIX MONTHS ENDED FOR THE PERIOD FROM
SEPTEMBER 30, 1997 AUGUST 28, 1996* THROUGH
(UNAUDITED) SEPTEMBER 30, 1997
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 211,467 $ 120,931
Net realized gains on investment and foreign currency transactions 54,048 28,664
Net change in unrealized appreciation of investments 256,153 50,342
------------ ------------
Change in net assets resulting from operations 521,668 199,937
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (211,358) (120,931)
Realized gains - (11,806)
------------ ------------
Change in net assets from shareholder distributions (211,358) (132,737)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 933,291 4,138,941
Dividends reinvested 170,871 120,931
Cost of shares redeemed (17,882) (14,803)
------------ ------------
Changes in net assets from capital share transactions 1,086,280 4,245,069
------------ ------------
Change in net assets 1,396,590 4,312,269
NET ASSETS:
Beginning of period 4,345,602 33,333
------------ ------------
End of period (including $11,933 and $11,824, respectively, $ 5,742,192 $ 4,345,602
of undistributed net investment income) ------------ ------------
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
DJG VALUE EQUITY FUND
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
APRIL 11, 1997* THROUGH
SEPTEMBER 30, 1997
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income $ 1,824
Net realized gains on investment transactions 57,330
Net change in unrealized appreciation of investments 289,531
------------
Change in net assets resulting from operations 348,685
------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -
------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 1,072,010
Dividends reinvested -
Cost of shares redeemed (8,644)
------------
Change in net assets from capital share transactions 1,063,366
------------
Change in net assets 1,412,051
NET ASSETS:
Beginning of period -
------------
End of period (including undistributed net investment income of $1,824) $ 1,412,051
------------
------------
* Commencement of operations
VIF- U.S. SMALL CAP FUND
FOR THE PERIOD FROM
APRIL 11, 1997* THROUGH
SEPTEMBER 30, 1997
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss $ (1,431)
Net realized gains on investment and foreign currency transactions 46,582
Net change in unrealized appreciation of investments 215,037
------------
Change in net assets resulting from operations 260,188
------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -
------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 1,054,010
Dividends reinvested -
Cost of shares redeemed (6,630)
------------
Change in net assets from capital share transactions 1,047,380
------------
Change in net assets 1,307,568
NET ASSETS:
Beginning of period -
------------
End of period (including undistributed net investment loss of ($1,431)) $ 1,307,568
------------
------------
</TABLE>
* Commencement of operations
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
FINANCIAL HIGHLIGHTS
VIF- HIGH YIELD FUND
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FORTHE PERIOD FROM
SEPTEMBER 30,1997 APRIL 1, 1996* THROUGH
(UNAUDITED) MARCH 31, 1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.37 $ 10.00
------------ ------------
Income from Investment Operations:
Net investment income 0.43 0.78
Net realized and unrealized gains
on investment transactions 0.48 0.37
------------ ------------
Total income from investment operations 0.91 1.15
------------ ------------
Less Dividends from:
Net investment income (0.43) (0.78)
------------ ------------
Net change in net asset value per share 0.48 0.37
------------ ------------
Net asset value, end of period $ 10.85 $ 10.37
------------ ------------
TOTAL RETURN (a) 8.93%(b) 11.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 28,663 $ 25,114
Ratios to average net assets:
Expenses** 1.15%(c) 1.15%
Net investment income 8.09%(c) 7.45%
Portfolio turnover rate 19% 4%
VIF- EMERGING MARKETS FUND
FOR THE SIX
MONTHS ENDED FOR THE PERIOD FROM
SEPTEMBER 30,1997 AUGUST 28, 1996* THROUGH
(UNAUDITED) MARCH 31, 1997
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.30 $ 10.00
------------ ------------
Income from Investment Operations:
Net investment income 0.41 0.48
Net realized and unrealized gains
on investment transactions 0.61 0.34
------------ ------------
Total income from investment operations 1.02 0.82
------------ ------------
Less Dividends from:
Net investment income (0.42) (0.48)
Realized gains - (0.04)
------------ ------------
Net change in net asset value per share 0.60 0.30
------------ ------------
Net asset value, end of period $ 10.90 $ 10.30
------------ ------------
TOTAL RETURN (a) 10.00%(b) 8.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 5,742 $ 4,346
Ratios to average net assets:
Expenses** 1.50%(c) 1.50%(c)
Net investment income 7.80%(c) 8.04%(c)
Portfolio turnover rate 28% 96%
</TABLE>
- ------------------------------------------
* Commencement of operations
** During the period, certain fees were voluntarily reduced and/ or
reimbursed. If such voluntary fee reductions and/ or reimbursements had
not occurred, the ratio would have been 1.54% and 2.25% annualized for the
High Yield Fund , and 2.54% and 4.87% annualized for the Emerging Markets
Fund for the six months ended September 30, 1997 and the period ended March
31, 1997, respectively.
(a) Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions
(b) Not annualized.
(c) Annualized.
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
FINANCIAL HIGHLIGHTS
DJG VALUE EQUITY FUND
<TABLE>
<CAPTION>
FOR THE PERIOD FROM
APRIL 11, 1997 THROUGH
SEPTEMBER 30,1997
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
------------
Income from Investment Operations:
Net investment income 0.02
Net realized and unrealized gains
on investment transactions 3.24
------------
Total income from investment operations 3.26
------------
Less Dividends from:
Net investment income 0.00
------------
Net change in net asset value per share 3.26
------------
NET ASSET VALUE, END OF PERIOD $ 13.26
------------
------------
TOTAL RETURN (a) 32.60%(b)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 1,412
Ratios to average net assets:
Expenses** 1.25%(c)
Net investment income 0.31%(c)
Portfolio turnover rate 24%
Average commission rate paid (d) $ 0.0579
VIF- U.S. SMALL CAP FUND
FOR THE PERIOD FROM
APRIL 11, 1997* THROUGH
SEPTEMBER 30,1997
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
------------
Income from Investment Operations:
Net investment loss (0.01)
Net realized and unrealized gains
on investment transactions 3.19
------------
Total income from investment operations 3.18
------------
Less Dividends from:
Net investment income 0.00
------------
Net change in net asset value per share 3.18
------------
NET ASSET VALUE, END OF PERIOD $ 13.18
------------
------------
TOTAL RETURN (a) 31.80%(b)
RATIOS/SUPPLEMENTAL DATA:
Net assets at end of year (in thousands) $ 1,308
Ratios to average net assets
Expenses** 1.50%(c)
Net Investment Income (0.31%)(c)
Portfolio turnover rate 28%
Average commission rate paid (d) $ 0.0349
</TABLE>
- ------------------------------------------
* Commencement of operations
** During the period, certain fees were voluntarily reduced and/ or
reimbursed. If such voluntary fee reductions and/ or reimbursements had
not occurred, the ratios would have been 5.14%, annualized for DJG Value
Equity Fund and 6.68%, annualized for U.S. Small Cap Fund.
(a) Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions
(b) Not annualized.
(c) Annualized.
(d) Represents the dollar amount of commissions paid on portfolio transactions
divided by the total number of portfolio shares purchased and sold for
which commissions were charged.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION
The OFFITBANK Variable Insurance Fund, Inc. (the "Company") was incorporated in
Maryland on July 1, 1994. The Company is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Company consists of ten
separately managed funds, of which four, OFFITBANK VIF-High Yield Fund (VIF-High
Yield Fund), OFFITBANK VIF-Emerging Markets Fund (VIF-Emerging Markets Fund),
OFFITBANK DJG Value Equity Fund (DJG Value Equity Fund) and OFFITBANK VIF-U.S.
Small Cap Fund (VIF-U.S. Small Cap Fund) (individually, a "Fund", and
collectively, the "Funds") had commenced operations on April 1, 1996, August 28,
1996, April 11, 1997 and April 11, 1997, respectively. The VIF-High Yield Fund
and VIF-Emerging Markets Fund operate as non-diversified, open-end management
investment companies. The DJG Value Equity Fund and VIF-U.S. Small Cap Fund
operate as diversified, open-end management investment companies.
The VIF-High Yield Fund seeks to provide investors with a high level of current
income by investing primarily in high yield, high risk corporate debt securities
and sovereign debt obligations. The VIF-Emerging Markets Fund seeks to provide
investors with a competitive total investment return by focusing on current
yield and opportunities for capital appreciation primarily by investing in
corporate and sovereign debt securities of emerging market countries. The DJG
Value Equity Fund seeks to achieve its objectives of long-term appreciation and
preservation of capital by researching and investing in equity securities priced
at a discount to their intrinsic values. The VIF-U.S. Small Cap Fund invests
primarily in a diversified portfolio of securities of smaller companies located
in the United States to achieve its investment objective of capital
appreciation.
OFFITBANK serves as the VIF-High Yield, VIF-Emerging Markets and VIF-U.S. Small
Cap Funds' investment adviser. David J. Greene and Company serves as the DJG
Value Equity Fund's investment adviser. BISYS Fund Services, Limited
Partnership ("BISYS"), serves as the Funds' administrator. OFFIT Funds
Distributor, Inc. (the "Distributor"), serves as the distributor of the Funds'
shares. BISYS Fund Services, Inc., serves as fund accountant and transfer and
dividend disbursing agent of the Funds. BISYS, the Distributor, and BISYS Fund
Services, Inc. are each a wholly-owned subsidiary of The BISYS Group, Inc.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. The policies are in
conformity with generally accepted accounting principles. The preparation of
financial statements requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.
PORTFOLIO VALUATIONS:
Securities held by a Fund generally are valued based on quoted bid prices.
Short-term debt investments having maturities of 60 days or less are amortized
to maturity based on their cost and, if applicable, adjusted for foreign
exchange translation. Securities for which market quotations are not readily
available are valued at fair value determined in good faith by or under the
direction of the Company's Board of Directors. Securities quoted in foreign
currencies initially are valued in the currency in which they are denominated
and are then translated into U.S. dollars at the prevailing foreign exchange
rate. Securities may be valued by independent pricing services which use prices
provided by market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
SECURITIES TRANSACTIONS AND RELATED INCOME:
The Funds record security transactions on a trade date basis. Interest income,
including accretion of discount and amortization of premium is accrued daily.
Realized gains and losses from security transactions are recorded on the
identified cost basis.
EXPENSES:
The Company accounts separately for the assets, liabilities and operations of
each Fund. Direct expenses of a fund are charged to that fund, while general
Company expenses are allocated among the Company's respective portfolios.
Costs incurred in connection with the organization and initial registration of
the Funds have been deferred and are being amortized on a straight line basis
over a sixty-month period beginning with each of the Fund's commencement of
operations.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
The VIF-High Yield Fund's net investment income, if any, is declared daily and
paid monthly. The VIF-Emerging Markets Fund's net investment income, if any, is
declared daily and paid quarterly. The DJG Value Equity and VIF-U.S. Small Cap
Funds' net investment income, if any, is declared and paid annually. Net
realized gains on portfolio securities, if any, are distributed at least
annually by each Fund. However, to the extent net realized gains can be offset
by capital loss carryovers, such gains will not be distributed. Dividends and
distributions are recorded by the Funds on the ex dividend date.
The amount of dividends from net investment income and distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
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 gains. To the extent they exceed net
investment income and net realized capital gains for tax purposes, they are
reported as distributions of capital.
Permanent book/tax differences are primarily attributable to non-deductible
organization costs and foreign exchange gains/losses.
FEDERAL INCOME TAXES:
It is the Funds' policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute timely all
of their net investment company taxable income and net capital gains to
shareholders. Therefore, no federal income tax provision is required.
FOREIGN CURRENCY TRANSLATION:
The accounting records of the Funds are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars at the current rate of
exchange to determine the value of investments, assets and liabilities.
Purchases and sales of securities, and income and expenses are translated at the
prevailing rate of exchange on the respective dates of such transactions. The
Funds do not isolate that portion of the results of operations resulting from
changes in foreign exchange rates on investments from the fluctuations arising
from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gains or losses from investments.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities and forward currency contracts, sales of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the amounts
of dividends, interest and foreign withholding amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in
the value of assets and liabilities other than investments in securities,
resulting from changes in the exchange rate.
DERIVATIVE INSTRUMENTS:
The Funds may invest in various financial instruments including positions in
forward currency contracts, enter into currency swaps and purchase foreign
currency options. The Funds enter into such contracts for the purposes of
hedging exposure to changes in foreign currency exchange rates on their
portfolio holdings.
Each of the Funds is also permitted to enter into swap agreements to manage
interest rate or currency exposure. Swap agreements involve the commitment to
exchange with another party cash flows which are based upon the application of
interest rates or currency movements to a notional principal amount. Gains and
losses associated with currency swap transactions are included in realized gains
and losses on foreign currency translation.
A forward foreign exchange contract is a commitment to sell or buy a foreign
currency at a future date at a negotiated exchange rate. A Fund bears the
market risk which arises from possible changes in foreign exchange values.
Risks may arise from the potential inability of counterparties to meet the terms
of their contracts and from unanticipated movements in the value of the foreign
currency relative to the U.S. dollar. Forward foreign exchange contracts may
involve market or credit risk in excess of the related amounts reflected on the
Fund's statement of assets and liabilities.
The gain or loss from the difference between the cost of original contracts and
the amount realized upon the closing of such contracts is included in net
realized gain on foreign currency transactions. Fluctuations in the value of
forward contracts held at September 30, 1997 are recorded for financial
reporting purposes as unrealized gains and losses by the Funds.
At September 30, 1997, there were no outstanding forward currency contracts for
the VIF-High Yield, DJG Value Equity and VIF-U.S. Small Cap Funds. The table
below indicates the VIF-Emerging Markets Fund's outstanding forward currency
contract positions at September 30, 1997:
<TABLE>
<CAPTION>
VALUE ON VALUE AT UNREALIZED
CONTRACT MATURITY ORIGINATION SEPTEMBER 30, APPRECIATION
CURRENCY AMOUNTS DATE DATE 1997 (DEPRECIATION)
-------- --------- -------- ----------- ------------- --------------
Sell DEM (595,000) 10-20-97 ($332,172) ($338,441) ($3,964)
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
A purchased option contract gives the Fund the right to sell (puts) or purchase
(calls) a specified amount of foreign currency at a fixed price. The maximum
exposure to loss for any purchased option is limited to the premium initially
paid for the option. Such options are reflected at value in the Fund's
portfolio of investments. There were no purchased options owned at September
30, 1997.
The VIF-Emerging Markets Fund may also invest in indexed securities whose value
is linked directly to changes in foreign currencies, interest rates and other
financial indices. Indexed securities may be more volatile than the underlying
instrument but the risk of loss is limited to the amount of the original
investment.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES:
The Company has entered into investment advisory agreements (the "Investment
Advisory Agreements") with OFFITBANK (the "Adviser"). Pursuant to the terms of
the Investment Advisory Agreements, the Adviser is entitled to a fee that is
calculated daily and paid monthly based on the average daily net assets of each
Fund, at the annual rate of:
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
0.85% of the first $200 million of average daily net assets for the VIF-High
Yield Fund and 0.75% of average daily net assets in excess of $200 million;
0.90% of the first $200 million of average daily net assets for the VIF-Emerging
Markets Fund and 0.80% of average daily net assets in excess of $200 million;
and 1.00% of average daily net assets for the VIF-U.S. Small Cap Fund.
Rockefeller & Co. serves as sub-adviser for the U.S. Small Cap Fund and is
entitled to a fee from the Adviser that is calculated daily and payable monthly
at the annual rate of 1.00% of the Fund's average daily net assets. Pursuant to
the terms of its Investment Advisory Agreement, David J. Greene and Company is
entitled to a fee that is calculated daily and payable monthly at the annual
rate of 0.80% of the average daily net assets of the DJG Value Equity Fund. For
the six months ended September 30, 1997, the Adviser earned fees of $111,839 for
the VIF-High Yield Fund, and earned and waived fees of $24,335, and $4,440 for
the VIF-Emerging Markets and VIF-U.S. Small Cap Funds, respectively. David J.
Greene and Company earned and waived fees of $4,691 for the DJG Value Equity
Fund.
BISYS provides the Company with administrative services pursuant to an
administration agreement (the "Administration Agreement"). The services under
the Administration Agreement are subject to the supervision of the Company's
Board of Directors and officers and include the day-to-day administration of
matters related to the corporate existence of the Company, maintenance of its
records, preparation of reports, supervision of the Company's arrangements with
its custodian and assistance in the preparation of the Company's registration
statements under federal and state laws. Pursuant to the Administration
Agreement, the Company pays BISYS a monthly fee for its services which on an
annualized basis will not exceed 0.15% of the average daily net assets of the
Company. For the six months ended September 30, 1997, BISYS earned fees of
$19,736 and waived fees of $12,038 for the VIF-High Yield, and earned and waived
fees of $4,056 for the VIF-Emerging Markets Funds. For the period from April
11, 1997 (commencement of operations) to September 30, 1997, BISYS earned and
waived fees of $880 and $666 for the DJG Value Equity Fund and VIF-U.S. Small
Cap Fund, respectively.
BISYS Fund Services, Inc., provides the Funds with fund accounting and related
services pursuant to a fund accounting agreement with the Company. For these
services BISYS was paid a fee of $2,500 per month per Fund. For the six months
ended September 30, 1997, BISYS earned fees of $15,276 and $14,976 for the
VIF-High Yield Fund and VIF-Emerging Markets Fund, respectively. For the period
from April 11, 1997 (commencement of operations) to September 30, 1997, BISYS
earned fees of $14,584 and $14,842 for the DJG Value Equity Fund and VIF-U.S.
Small Cap Fund, respectively.
BISYS Fund Services, Inc., also serves as transfer agent for the Funds and
pursuant to a transfer agency agreement with the Company, receives reimbursement
of certain expenses plus a per account fee of $15.00 per year. For the period
ended September 30, 1997, BISYS earned fees of $196 and $106 for the VIF-High
Yield Fund and VIF-Emerging Markets Fund, respectively. For the period from
April 11, 1997 (commencement of operations) to September 30, 1997, BISYS earned
fees of $35 and $33 for the DJG Value Equity Fund and VIF-U.S. Small Cap Fund,
respectively.
The Company has entered into a distribution agreement (the "Distribution
Agreement') with the Distributor. Under the Distribution Agreement, the
Distributor, as agent of the Company, agrees to use its best efforts as sole
distributor of the Company's shares. The Distribution Agreement provides that
the Company will bear the costs of the registration of its shares with the
Commission and various states and the printing of its prospectuses, statements
of additional information and reports to shareholders. There is no fee payable
under the Distribution Agreement.
OFFITBANK and David J. Greene and Company have voluntarily agreed to limit the
expense ratios for the Funds at 1.15%, 1.50%, 1.25%, and 1.50% for the VIF-High
Yield, VIF-Emerging Markets, DJG Value Equity, and VIF-U.S. Small Cap Funds,
respectively. In order to maintain these ratios, for the six months ended
September 30, 1997, the Adviser and David J. Greene and Company have waived
their advisory fee and have also agreed to reimburse the VIF-High Yield Fund,
DJG Value Equity Fund and VIF-U.S. Small Cap Fund $40,016, $17,355 and $18,059,
respectively.
<PAGE>
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
NOTE 4 -- SECURITIES TRANSACTIONS
For the period ended September 30, 1997, the cost of purchases and the proceeds
from sales of the Funds' portfolio securities (excluding short-term
investments), amounted to $13,730,989 and $4,572,799, respectively for the
VIF-High Yield Fund, $3,382,839 and $1,393,865, respectively for the
VIF-Emerging Markets Fund, $1,030,836 and $249,176 for the DJG Value Equity Fund
and $1,199,806 and $232,187 for the VIF-U.S. Small Cap Fund, respectively. The
cost of securities is substantially the same for Federal income tax purposes as
it is for financial reporting purposes.
The Funds may purchase instruments from financial institutions, such as banks
and broker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon time and price ("repurchase agreements"). The seller under a
repurchase agreement is required to maintain the value of the securities
subject to the agreement at not less than the repurchase price. Default by the
seller would, however, expose the relevant Fund to possible loss because of
adverse market action or delay in connection with the disposition of the
underlying obligations.
NOTE 5 -- CAPITAL SHARE TRANSACTIONS
The Company's Articles of Incorporation permit the Company to issue nine billion
shares (par value $0.001). Transactions in shares of common stock for the
period ended September 30, 1997, were as follows:
<TABLE>
<CAPTION>
VIF-HIGH YIELD VIF-EMERGING MARKETS
---------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ----------
<S> <C> <C> <C> <C>
Shares issued . . . . . . . . . 415,949 $ 4,424,985 90,184 $ 933,291
Shares reinvested . . . . . . . 95,662 1,016,130 16,226 170,871
Shares redeemed . . . . . . . . (291,155) (3,026,219) (1,685) (17,882)
---------- ------------ ---------- ----------
Net increase. . . . . . . . . . 220,456 $ 2,414,896 104,725 1,086,280
---------- ------------ ---------- ----------
---------- ------------ ---------- ----------
DJG VALUE EQUITY VIF-U.S. SMALL CAP
--------------------------------- ---------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ----------
Shares issued . . . . . . . . . 107,201 $ 1,072,010 99,796 $1,054,010
Shares reinvested . . . . . . . -- -- -- --
Shares redeemed . . . . . . . . (748) (8,644) (581) (6,630)
---------- ------------ ---------- ----------
Net increase. . . . . . . . . . 106,453 $1,063,366 99,215 $1,047,380
---------- ------------ ---------- ----------
---------- ------------ ---------- ----------
</TABLE>
NOTE 6 -- OTHER MATTERS
The VIF-High Yield Fund and the VIF-Emerging Markets Fund invest in obligations
of foreign entities and securities denominated in foreign currencies that
involve risk not typically involved in domestic investments. Such risks include
fluctuations in the foreign exchange rates, ability to convert proceeds into
U.S. dollars, less publicly available information about foreign financial
instruments, less liquidity resulting from substantially less trading volume,
more volatile prices and generally less government supervision of foreign
markets and issuers.
<PAGE>
This report is submitted for the information of the shareholders of the
Funds. The financial information included herein is taken from the records
of the Funds without audit by the Funds' independent accountants, who do not
express an opinion thereon. It is not authorized for distribution to
prospective investors in the Funds unless preceded or accompanied by an
effective prospectus which includes information regarding the Funds'
objectives and policies, charges, expenses and other data. Please read the
prospectus carefully before you invest or send money.
THE OFFITBANK VARIABLE INSURANCE FUND, INC.
125 WEST 55TH STREET, NEW YORK, NY 10019
(212) 758-9600
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