<PAGE>
USAA LIFE INSURANCE COMPANY
VARIABLE ANNUITY
- --------------------------------------------------------------------------------
SEMIANNUAL REPORT
JUNE 30, 1996
[LOGO OF USAA APPEARS HERE]
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TABLE OF CONTENTS
This report is for the information of USAA Life Variable Annuity contract owners
and others who have received a copy of the currently effective Variable Annuity
prospectus. It may be used as sales literature only when preceded or accompanied
by a current prospectus which includes complete information. The USAA Life
Variable Annuity is distributed by USAA Investment Management Company, a
registered broker dealer.
<TABLE>
<CAPTION>
<S> <C>
PRESIDENT'S MESSAGE............................................................. 3
USAA LIFE INVESTMENT TRUST...................................................... B-7--B51
USAA Life VA Money Market Fund An Overview...................................... B-9
USAA Life VA Income Fund An Overview............................................ B-11
USAA Life VA Growth and Income Fund An Overview................................. B-13
USAA Life VA World Growth Fund An Overview...................................... B-15
USAA Life VA Diversified Assets Fund An Overview................................ B-19
USAA Life VA Money Market Fund Portfolio of Investments in Securities........... B-23
USAA Life VA Income Fund Portfolio of Investments in Securities................. B-26
USAA Life VA Growth and Income Fund Portfolio of Investments in Securities...... B-28
USAA Life VA World Growth Fund Portfolio of Investments in Securities........... B-31
USAA Life VA Diversified Assets Fund Portfolio of Investments in Securities..... B-39
Notes to Portfolios of Investments in Securities................................ B-42
Statements of Assets and Liabilities............................................ B-43
Statements of Operations........................................................ B-44
Statements of Changes in Net Assets............................................. B-45
Notes to Financial Statements................................................... B-47
SCUDDER VARIABLE LIFE INVESTMENT FUND (VLIF)
CAPITAL GROWTH PORTFOLIO...................................................... C-53--C-68
Letter from the Fund's President................................................ C-54
Capital Growth Portfolio Management Discussion.................................. C-55
Capital Growth Portfolio Summary................................................ C-56
Investment Portfolio............................................................ C-57
Financial Statements............................................................ C-61
Financial Highlights............................................................ C-64
Notes to Financial Statements................................................... C-65
THE ALGER AMERICAN FUND
ALGER AMERICAN GROWTH PORTFOLIO............................................... D-69--D-81
Letter to Shareholders.......................................................... D-71
Schedule of Investments......................................................... D-72
Financial Highlights............................................................ D-74
Statement of Assets and Liabilities............................................. D-75
Statement of Operations......................................................... D-76
Statement of Cash Flows......................................................... D-77
Statement of Changes in Net Assets.............................................. D-78
Notes to Financial Statements................................................... D-80
</TABLE>
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USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT
PRESIDENT'S MESSAGE
FROM THE DESK OF ED ROSANE
[PHOTO OF ED ROSANE APPEARS HERE]
As we close another financial reporting period for our Variable Annuity,
USAA Life Insurance Company is pleased to report increased interest in our
product. From February 6, 1995 through June 30, 1996, we issued a total of
2,711 contracts. Premium received totals $64,874,000, which represents a
combination of money received for new contracts as well as additional
contributions made to existing contracts.
Of particular interest, we received a number of IRA applications. In
fact, of the 1,711 Variable Annuity contracts issued in the first half of 1996,
33% were for IRAs. Some individuals rolled over IRAs with lower rates of return
in exchange for our Variable Annuity which has the potential to provide better
growth opportunity.
1996 SEMIANNUAL REPORT 3
<PAGE>
USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT
PRESIDENT'S MESSAGE
HOW THE MARKET FARED
- --------------------
I realize many of you keep up with market activity on a regular basis. However,
when trying to make sense of exactly "what happened" over the last six months,
it sometimes helps to put things in perspective by looking at key market
indicators. I've taken a minute to recapture the movement of some of these
indicators from December 29, 1995 through June 28, 1996 (the close of the last
business day of each month) as reported in the Wall Street Journal.
<TABLE>
<CAPTION>
Lehman Brothers
Dow Jones Fed Funds Long-Term Treasury
Industrial Average Interest Rate Bond Index Yield
------------------ ------------- ------------------
<S> <C> <C> <C>
December 29 5117.12 5.40% 6.00%
January 31 5395.30 5.86% 6.04%
February 29 5485.62 5.98% 6.57%
March 29 5587.14 5.28% 6.80%
April 30 5569.08 5.43% 7.04%
May 31 5643.18 5.49% 7.14%
June 28 5654.63 5.51% 7.00%
</TABLE>
HOW THE MARKET AFFECTED USAA LIFE'S VARIABLE ANNUITY
- ----------------------------------------------------
The performance data quoted represent past performance. Past performance is not
a guarantee of future returns. An investment in the USAA Life VA Money Market
Fund is neither insured nor guaranteed by the U.S. Government. There can be no
assurance that the Fund will be able to maintain a stable net asset value of $1.
The principal value contributed to the other six variable annuity fund accounts
will fluctuate. When variable annuity units are redeemed, they may be worth
more or less than their original cost.
USAA Life's Variable Annuity fund accounts have mirrored the market. The
following table provides the accumulation unit value (AUV) average annual total
returns for each variable annuity fund account, which includes the deduction of
all contract charges. As you review this performance information, it is
important to keep in mind that performance may not give you a sense of a fund's
volatility which you need to assess regardless of that fund account's investment
objective. And it is equally important to know the relationship between risk
and reward in the investment options you choose so you can better determine if
they are in line with your long-term goals.
AUV AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
One Year Since Inception
(7/1/95-6/30/96) (2/6/95-6/30/96)
<S> <C> <C>
USAA Life VA Money Market Fund Account 4.04% 4.20%
USAA Life VA Income Fund Account 4.31% 8.77%
USAA Life VA Growth and Income
Fund Account 22.91% 25.02%
USAA Life VA World Growth Fund Account /1/ 20.56% 23.58%
USAA Life VA Diversified Assets
Fund Account 16.59% 19.30%
Scudder VLIF Capital Growth Portfolio 18.93% 24.02%
Alger American Fund Growth Portfolio 14.53% 25.65%
/1/ Foreign investing is subject to additional risks which are discussed in the
Variable Annuity prospectus.
</TABLE>
4 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT
PRESIDENT'S MESSAGE
ADDING TO YOUR CONTRACT
Realizing the importance of setting aside more money for retirement, you
purchased a Variable Annuity. But adding to it periodically can make a
difference in how well you retire. If seeing is believing, take a look at these
examples.
[GRAPH APPEARS HERE]
30 Years $123,331
20 Years $ 53,012
10 Years $ 10,000 $ 22,897
Amount Potential Value
Contributed of Contract
INITIAL CONTRIBUTION
$ 10,000
This first graph illustrates how the impact of time and tax deferral can affect
the value of your Variable Annuity contract if you start with a one-time-only
contribution of $10,000. In and of itself, the growth potential of a lump-sum
contribution can be impressive.
[GRAPH APPEARS HERE]
30 Years $46,000 $288,644
20 Years $34,000 $115,692
10 Years $22,000 $ 41,622
Amount Potential Value
Contributed of Contract
ADDING A LITTLE
$ 100 per month
If you continue to add just $100 per month (only $1,200 per year) to your
original $10,000 purchase, after 30 years your Variable Annuity contract value
has the potential to more than double what your contract value would have been
if you had only made the initial $10,000 contribution.
[GRAPH APPEARS HERE]
30 Years $190,000 $949,899
20 Years $130,000 $366,410
10 Years $ 70,000 $116,520
Amount Potential Value
Contributed of Contract
ADDING EVEN MORE
$ 500 per month
And if you can afford to add even more -- say $500 per month -- to your original
purchase of $10,000, you could be looking at a contract value that gives you
considerably more to work with when you're ready to begin receiving payouts. In
other words, you'll probably be in better financial shape to do the things
you've envisioned during your retirement years.
All insurance contract fees and expenses were deducted. These hypothetical
examples assume each contract maintained steady performance returns of 10%.
Systematic investing does not assure a profit or protect against loss in
declining markets. Investors should consider their financial ability to
continue purchases through periods of low and high price levels. Withdrawals
made before reaching the age of 59-1/2 may be subject to a 10% federal penalty
tax.
1996 SEMIANNUAL REPORT 5
<PAGE>
USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT
PRESIDENT'S MESSAGE
THERE'S A WAY TO GET THERE FROM HERE
- ------------------------------------
At USAA Life, we understand how beneficial it can be for you to add to your
contract from time-to-time. And because regularly scheduled contributions are
the easiest way to ensure you're taking care of yourself first, we established
an Automatic Payment Plan or APP.
With APP, you authorize USAA Life to withdraw contributions from your bank or
credit union account on a specified day each month, automatically adding to the
value of your Variable Annuity contract. And to further simplify the process,
we've enclosed an APP form and return envelope just in case you are interested.
If you already have APP in place and wish to increase the amount you are adding
to your contract, simply call a USAA Life Service Representative at
1-800-531-4265.
Whether you elect to send in contributions when it is convenient for you or you
decide to save time, energy and paperwork with USAA Life's APP, you can't deny
that adding to your contract may have a significant impact on the amount of
money you are able to accumulate.
LOOKING FORWARD
- ---------------
When you purchased your Variable Annuity, you may not have taken the time to
thoroughly discuss the details of annuitization or "cashing in" your contract.
If you did, you discovered one of the Variable Annuity's best kept secrets. In
fact, whenever you have a large sum of money whether it be from the sale of a
home or business, a payout from a pension plan, or an inheritance, you may want
to consider annuitization and its ability to provide income for life. Keep in
mind that depending on the performance of the underlying investment options, the
cash value available for annuitization may be worth more or less than the
original amount invested.
Annuitization may also be ideal if you're required to begin receiving
distributions from a qualified plan like an IRA or Tax-Sheltered Annuity.
Federal law requires that you begin receiving minimum distributions from a
qualified plan in the calendar year in which you turn 70-1/2 to avoid penalties.
You may want to consider rolling over money from your qualified plan with one
company to an annuity with another company which can be done without federal
penalty. In this way, you can select a payout option which will satisfy minimum
distribution requirements and at the same time provide you with income
distributions as long as you live.
Our Variable Annuity offers an array of annuitization options enabling you to
select a payout schedule which best meets your needs. In addition, our contract
was designed to provide a choice between variable and fixed annuitization or a
combination of both.
Although it isn't a new concept, very few people are familiar with variable
annuitization and its advantages. For example, if you anticipate needing to
receive payouts for a long period of time (15 years or more), you may find that
a variable payout option will provide you with more purchasing power years down
the road. If you're interested in discussing your personal situation and want
to review the various options available at USAA Life, call a salaried Account
Representative at 1-800-531-8000 extension 73403.
A few other thoughts you may want to consider:
. Avoid taking a lump-sum distribution from any retirement plan if at all
possible. The taxation will significantly reduce your payout. With
annuitization, you are only taxed on that portion of money you receive as a
payout which has not been previously taxed.
. Thoroughly explore the details of systematic withdrawals. Many plans boast
that systematic withdrawals are as good as annuitization. What they aren't
telling you is that you could deplete your cash value at a time when you've
become most reliant on that income.
. Be prepared to explore payout options in detail at least a year before you
need to make a decision. Reviewing the numerous options available in
conjunction with the various decisions you will have to make about your
financial future could take some time.
Regardless of the reason for your call, we are always just a toll-free telephone
call away at 1-800-531-4440 (456-9050 in San Antonio)
Sincerely,
/s/ EDWIN L. ROSANE
- ---------------------------------
Edwin L. Rosane, CLU, FLMI
President
USAA Life Insurance Company
6 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE
INVESTMENT TRUST
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SEMIANNUAL REPORT
JUNE 30, 1996
[LOGO OF USAA APPEARS HERE]
<PAGE>
These NAV total return performance figures quoted represent past performance.
Past performance is not a guarantee of future returns. The principal value
contributed to the seven variable annuity fund accounts will fluctuate. When
variable annuity units are redeemed, they may be worth more or less than their
original cost.
B-8 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND
AN OVERVIEW JUNE 30, 1996
COMPARISON OF FUND TO BENCHMARK
<TABLE>
<CAPTION>
<S> <C> <C>
IBC/DONOGHUE'S
USAA LIFE VA MONEY FUND
DATE MONEY MARKET FUND AVERAGES/TM/FIRST TIER
======== ================= ======================
01/31/95 5.77% 5.24%
02/28/95 5.70% 5.46%
03/30/95 5.84% 5.49%
04/25/95 5.76% 5.47%
05/30/95 5.74% 5.45%
06/27/95 5.79% 5.41%
07/25/95 5.51% 5.29%
08/29/95 5.45% 5.22%
09/26/95 5.42% 5.18%
10/31/95 5.50% 5.18%
11/28/95 5.68% 5.19%
12/26/95 5.52% 5.14%
01/30/96 4.99% 4.97%
02/27/96 5.00% 4.74%
03/26/96 5.03% 4.68%
04/30/96 5.00% 4.68%
05/28/96 5.04% 4.67%
06/25/96 5.06% 4.71%
DATA REPRESENTS THE LAST BUSINESS DAY OF EACH MONTH.
</TABLE>
[GRAPH APPEARS HERE]
The graph above tracks the USAA Life VA Money Market Fund's yield compared to a
benchmark -- IBC/Donoghue's Money Fund Averages /TM/First Tier, an average of
all major money market fund yields.
Information for the benchmark is based on a full calendar year whereas the VA
Money Market Fund yields are based on a starting date of January 5, 1995 -- the
inception date of this Fund. This comparison is for illustrative purposes only.
GENERAL DISCUSSION
by Portfolio Manager Pam Bledsoe
FUND BACKGROUND
The Securities and Exchange Commission (SEC) places strict parameters on the
quality and maturity of all securities in money market funds. One of these
parameters requires that at least 95% of the assets of a money market fund be
invested in securities of the highest quality. However, we endeavor to invest
100% of the VA Money Market Fund's portfolio in the highest category of credit
quality.
In addition, as with all money market funds, we limit the VA Money Market Fund's
portfolio average maturity to 90 days and the maturity of any one security to
397 days. This reduces the likelihood that the Fund will not be able to
maintain a stable net asset value of $1.
SINCE OUR LAST REPORT
In an effort to stimulate economic growth, the Federal Reserve (Fed) lowered the
Fed Funds rate (the rate banks charge each other for overnight borrowing) three
times between July 1995 and February 1996. Since our December report, economic
activity has strongly increased in most areas of the country. A surprisingly
strong employment report in February prompted market forces to push interest
rates higher and most economic statistics released in the Spring continue to
support rising rates. Although rising interest rates are great for money market
investors, they have an opposite impact on many facets of the economy. As
credit card or home mortgage interest rates increase, pressure is put on
consumer spending and the housing market.
An investment in this Fund is neither insured nor guaranteed by the U.S.
Government and there is no assurance that the Fund can maintain a stable net
asset value of $1.
OBJECTIVE:
To obtain the highest level of current income consistent with preservation of
capital and maintenance of liquidity.
INVESTMENT PROGRAM:
This Fund invests in a diversified portfolio of high-quality U.S.
dollar-denominated debt instruments that present minimal credit risk with
remaining maturities of 397 days or less.
<TABLE>
<CAPTION>
As of June 30, 1996
<S> <C>
NET ASSETS: $12.1 million
NET ASSET VALUE
(NAV) PER SHARE: $ 1.00
SIMPLE 7-DAY YIELD: 5.10%
AVERAGE ANNUAL
TOTAL RETURN
December 31, 1995 to
June 30, 1996: 2.57%*
One Year: 5.42%
Since Inception
January 5, 1995: 5.56%
* Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
</TABLE>
1996 SEMIANNUAL REPORT B-9
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND
AN OVERVIEW (Continued) JUNE 30, 1996
The total return calculations found in this section are calculated at the Fund's
investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of Fund expenses. More
specific information regarding the Fund expenses can be found on page 9A of your
May 1, 1996 prospectus.
Currently, there is much speculation in the marketplace regarding the level of
economic activity and whether it is strong enough to cause inflation. The Fed
has kept a watchful eye on inflation pressures and we feel they will continue to
keep economic growth in balance. Market forces have increased the general level
of interest rates over the last few months which can serve as a "speed bump" for
the economy, helping to keep growth at a moderate rate and inflation under
control without intervention from the Fed.
PORTFOLIO POSITION
Regardless of the economic outlook or action by the Fed, our strategy is to
maintain a portfolio of high quality securities that provide a reasonable yield.
While we continue to monitor economic events very closely, all of our holdings
must meet regulatory as well as stringent internal guidelines for liquidity,
credit quality, and maturity. Due to the Variable Annuity's structure and the
necessity of the free-look period, investments for the VA Money Market Fund are
made in securities with relatively short maturities. Currently, the average
maturity of the Fund is managed within a range of 7 to 16 days.
PORTFOLIO MIX
AS A PERCENTAGE OF NET ASSETS
as of June 30, 1996
-----------------------------
U.S. Agency Variable Rate
Discount Notes Put Bonds Demand Notes
31.5% 1.7% 24.0%
Commercial Paper
43.0%
[CHART APPEARS HERE]
B-10 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY INCOME FUND
AN OVERVIEW JUNE 30, 1996
COMPARISON OF FUND TO BENCHMARKS
<TABLE>
<CAPTION>
USAA LIFE LEHMAN BROTHERS LIPPER A
VA AGGREGATE RATED BOND
INCOME BOND FUND
FUND INDEX INDEX
--------- --------------- ----------
<S> <C> <C> <C> <C> <C>
01/05/95 $10,000 01/05/95 $10,000 01/05/95 $10,000
01/31/95 $10,290 01/31/96 $10,198 01/31/96 $10,174
02/26/95 $10,520 02/28/95 $10,441 02/28/95 $10,411
03/31/95 $10,530 03/31/95 $10,504 03/31/95 $11,481
04/30/96 $10,700 04/30/95 $10,651 04/30/95 $10,625
05/31/95 $11,210 05/31/95 $11,064 05/31/95 $11,093
06/30/95 $11,220 06/30/95 $11,144 06/30/95 $11,171
07/31/95 $11,200 07/31/95 $11,120 07/31/95 $11,113
08/31/95 $11,400 08/31/95 $11,254 08/31/95 $11,270
09/30/96 $11,650 09/30/95 $11,364 09/30/95 $11,393
10/31/95 $11,870 10/31/95 $11,511 10/31/95 $11,563
11/30/95 $12,100 11/30/95 $11,684 11/30/95 $11,748
12/31/95 $12,389 12/31/95 $11,848 12/31/95 $11,930
01/31/96 $12,454 01/31/96 $11.926 01/31/96 $11,990
02/29/96 $12,028 02/26/96 $11,718 02/26/96 $11,733
03/31/96 $11,863 03/31/96 $11,636 03/31/96 $11,642
04/30/96 $11,688 04/30/96 $11,571 04/30/96 $11,555
05/31/96 $11,666 05/31/96 $11,548 05/31/96 $11,527
06/30/96 $11,863 06/60/96 $11,703 06/60/96 $11,671
</TABLE>
DATA REPRESENTS THE LAST BUSINESS DAY OF EACH MONTH.
[GRAPH APPEARS HERE]
The graph above compares the performance of a $10,000 hypothetical investment in
the USAA Life VA Income Fund to two industry indexes which most closely resemble
the holdings of this Fund.
The Lehman Brothers Aggregate Bond Index is an unmanaged index made up of the
government/corporate index, the mortgage-backed securities index, and the
asset-backed securities index. The Lipper A Rated Bond Fund Index is an
unmanaged index made up of funds investing in corporate debt issues rated A or
better or government issues.
The calculations for the Lehman Brothers and Lipper Indexes are based on a full
calendar year whereas the VA Income Fund calculations are based on a starting
date of January 5, 1995 - the inception date of this Fund. This comparison is
for illustrative purposes only.
GENERAL DISCUSSION
by Portfolio Manager J.W. Saunders, Jr.
The favorable bond market we reported in the Annual Report last December
continued for six more weeks into the new year. Then, in February, a
surprisingly strong employment report abruptly reversed the bond market "up"
trend and interest rates started to rise. Subsequent periodic reports of
economic strength and hints of potential inflation have sustained a rising trend
in interest rates.
The gains in bond values from the decline in interest rates during 1995 have
eroded in the rising interest rate trend. Most of the damage was done in three
trading days with sharp price declines, one each in February, March and April.
The magnitude of change in bond prices on these days has not been seen in
several years.
All bonds decline in price when interest rates rise. Because interest rates
usually increase as maturity lengthens, shorter maturity bonds decline less in
price than long maturity bonds but income is lower. Our mortgage pass-through
securities with their 8 to 10 year average life have helped to reduce price
declines without giving up income. We have also increased the short-term
component in the portfolio. Current investment mix as percentages of net assets
is 32.3% in U.S. Treasury bonds, 34.2% in agency mortgage pass-through
securities, 10.1% in high yield common stocks, 0.5% in preferred stock, and
21.5% in cash equivalents.
OBJECTIVE:
To obtain maximum current income without undue risk to principal.
INVESTMENT PROGRAM:
This Fund invests in a diversified portfolio of U.S. dollar-denominated debt and
income-producing equity securities selected for their high yields relative to
the risk involved.
<TABLE>
<CAPTION>
As of June 30, 1996
<S> <C>
NET ASSETS: $29.1 million
NET ASSET VALUE
(NAV) PER SHARE: $10.84
AVERAGE ANNUAL
TOTAL RETURN
December 31, 1995
to June 30, 1996: - 4.24%*
One Year: 5.73%
Since Inception
January 5, 1995: 12.07%
* Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
</TABLE>
1996 SEMIANNUAL REPORT B-11
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY INCOME FUND
AN OVERVIEW (Continued) JUNE 30, 1996
The total return calculations found in this section are calculated at the Fund's
investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of Fund expenses. More
specific information regarding the Fund expenses can be found on page 9A of your
May 1, 1996 prospectus.
OUTLOOK
Interest rates do fluctuate. Bond price volatility has magnified with the
current hypersensitivity to economic reports which show any strength in the
economy or sign of inflation -- either of which would put pressure on further
upward movement of interest rates. We do not believe that inflation is on the
rise, so real interest rates (net of inflation) are still high. This should
eventually be recognized in the bond market once it stabilizes. In the
meantime, producing a high level of interest income continues to be our primary
emphasis.
<TABLE>
<CAPTION>
TOP 10 SECURITIES
as of June 30, 1996
- -----------------------------------------------
<S> <C> <C>
Coupon % of
Rate Net Assets
1) U.S. Treasury
Bonds 7.875% 32.3%
2) FNMA 7.0% 4.6%
3) GNMA 7.5% 4.5%
4) GNMA 8.0% 4.5%
5) FNMA 7.5% 4.5%
6) GNMA 7.0% 4.4%
7) GNMA 8.5% 4.4%
8) FNMA 8.5% 3.7%
9) FNMA 8.0% 3.6%
10) Allegheny Power
System, Inc. N/A 1.5%
</TABLE>
B-12 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND
AN OVERVIEW JUNE 30, 1996
COMPARISON OF FUND TO BENCHMARK
<TABLE>
<CAPTION>
USAA LIFE VA GROWTH AND S&P 500
INCOME FUND INDEX
----------------------- --------
<S> <C> <C> <C>
01/05/95 $10,000 01/05/95 $10,000
01/31/95 $10,150 01/31/95 $10,259
02/28/95 $10,480 02/28/95 $10,658
03/31/95 $10,720 03/31/95 $10,972
04/30/95 $11,080 04/30/95 $11,295
05/31/95 $11,410 05/31/95 $11,746
06/30/95 $11,650 06/30/95 $12,018
07/31/95 $11,990 07/31/95 $12,416
08/31/95 $12,190 08/31/95 $12,447
09/30/95 $12,530 09/30/95 $12,972
10/31/95 $12,230 10/31/95 $12,926
11/30/95 $12,900 11/30/95 $13,492
12/31/95 $13,172 12/31/95 $13,752
01/31/96 $13,476 01/31/96 $14,220
02/29/96 $13,632 02/29/96 $14,352
03/31/96 $14,124 03/31/96 $14,490
04/30/96 $14,301 04/30/96 $14,703
05/31/96 $14,490 05/31/96 $15,081
06/30/96 $14,500 06/30/96 $15,138
</TABLE>
DATA REPRESENTS THE LAST BUSINESS DAY OF EACH MONTH.
[GRAPH APPEARS HERE]
The graph above compares the performance of a $10,000 hypothetical investment in
the USAA Life VA Growth and Income Fund to the S&P 500 Index. The S&P Index is
an unmanaged index representing the average performance of a group of 500 widely
held, publicly traded stocks. It is not possible to invest directly in the S&P
500 Index.
The calculations for the S&P 500 Index are based on a full calendar year whereas
the calculations for the VA Growth and Income Fund are based on a starting date
of January 5, 1995 -- the inception date of this Fund. This comparison is for
illustrative purposes only.
GENERAL DISCUSSION
by Portfolio Manager R. David Ullom
As explained in previous reports, our investment philosophy precludes us from
making investment decisions based on an economic or market outlook. We have and
will continue to base our investment selections on the valuations of specific
industries and companies.
PORTFOLIO INVESTMENT DIVERSIFICATION
AS A PERCENTAGE OF NET ASSETS
as of June 30, 1996
------------------------------------
Short Term
5.9%
Consumer
Cyclicals Intermediate
16.3% Goods &
Services 27.8%
Capital Goods
11.6%
Consumer Credit Sensitive
Staples 15.5% 24.8%
[CHART APPEARS HERE]
OBJECTIVE:
Seeks capital growth and current income.
INVESTMENT PROGRAM:
Not less than 65% of its assets are invested in a diversified portfolio of
dividend-paying common stocks and convertible securities of companies that offer
the prospect for growth of earnings.
<TABLE>
<CAPTION>
As of June 30, 1996
<S> <C>
NET ASSETS: $40.6 million
NET ASSET VALUE
(NAV) PER SHARE: $13.87
AVERAGE ANNUAL
TOTAL RETURN
December 31, 1995
to June 30, 1996: 10.08%*
One Year: 24.46%
Since Inception
January 5, 1995: 27.78%
* Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
</TABLE>
1996 SEMIANNUAL REPORT B-13
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND
AN OVERVIEW (Continued) JUNE 30, 1996
The total return calculations found in this section are calculated at the Fund's
investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of Fund expenses. More
specific information regarding the Fund expenses can be found on page 9A of your
May 1, 1996 prospectus.
The steady performance of the VA Growth and Income Fund has been the result of
investments in several different industries. In particular, the Fund's
investments in aerospace/defense and healthcare appreciated materially over the
last six months. However, we have shifted our investment emphasis within the
healthcare sector by reducing our pharmaceutical holdings and increasing our
portfolio weighting in healthcare services.
Two other areas where our investments have proven to be rewarding are energy
(oil exploration & production, oil-international, and oil well equipment &
services) and retailing (retail stores and specialty retailing). Although we
have modestly reduced our exposure to specialty retailing based on valuation, we
continue to have a positive outlook for retailing in general. We also have a
positive outlook for our energy exposure.
During the first half of the current fiscal year, selected investments in
cyclical industries (chemicals and paper & forest products) and credit-sensitive
issues (telecommunications and insurance) proved to be disappointing in terms of
their relative share price performance. This disappointing performance was the
result of market concerns regarding the strength of the U.S. economy and the
upward movement in interest rates. However, shares of companies in these
industries continue to appear attractive based on our valuation parameters.
<TABLE>
<CAPTION>
TOP 10 HOLDINGS
as of June 30, 1996
- ------------------------------------------------
% of Net Assets
<S> <C>
Boeing Co. 2.8%
B.F. Goodrich Co. 2.6%
Xerox Corp. 2.0%
American Home Products Corp. 1.8%
BankAmerica Corp. 1.7%
Occidental Petroleum Corp. 1.6%
Universal Corp. 1.6%
Centex Corp. 1.6%
Titanium Metals Corp. 1.6%
Rockwell International Corp. 1.5%
</TABLE>
<TABLE>
<CAPTION>
TOP 10 SECTORS
as of June 30, 1996
- ------------------------------------------------
% of Net Assets
<S> <C>
Oil 8.3%
Aerospace/Defense 6.9%
Telecommunications 6.4%
Retail 6.0%
Healthcare 5.7%
Chemicals 5.4%
Insurance - Property/Casualty 5.4%
Tobacco 4.2%
Paper & Forest Products 3.5%
Real Estate Investment Trusts 3.2%
</TABLE>
B-14 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
AN OVERVIEW JUNE 30, 1996
COMPARISON OF FUND TO BENCHMARK
<TABLE>
<CAPTION>
USAA LIFE VA WORLD MORGAN STANLEY CAPIAL
GROWTH FUND INDEX WORLD
------------------ --------------------
<S> <C> <C> <C>
01/05/95 $10,000 01/05/95 $10,000
01/31/95 $9,710 01/31/95 $9,618
02/28/95 $9,790 02/28/95 $9,593
03/31/95 $10,160 03/31/95 $10,194
04/30/95 $10,490 04/30/95 $10,581
05/31/95 $10,920 05/31/95 $10,457
06/30/95 $11,150 06/30/95 $10,276
07/31/95 $11,710 07/31/95 $10.918
08/31/95 $11,620 08/31/95 $10,505
09/30/95 $11,770 09/30/95 $10,713
10/31/95 $11,480 10/31/95 $10,428
11/30/95 $11,650 11/30/95 $10,721
12/31/95 $11,956 12/31/95 $11,155
01/31/96 $12,322 01/31/96 $11,203
02/29/96 $12,559 02/29/96 $11,243
03/31/96 $12,850 03/31/96 $11,485
04/30/96 $13,464 04/30/96 $11,821
05/31/96 $13,593 05/31/96 $11,606
06/30/96 $13,614 06/30/96 $11,675
</TABLE>
DATA REPRESENTS THE LAST BUSINESS DAY OF EACH MONTH.
[GRAPH APPEARS HERE]
The graph above compares the performance of a $10,000 hypothetical investment in
the USAA Life VA World Growth Fund to its benchmark, the Morgan Stanley Capital
Index World, an unmanaged index which reflects the movement of world stock
markets by representing a broad selection of domestically listed companies
within each market.
Calculations for the Morgan Stanley Index are based on a full calendar year
whereas the VA World Growth Fund calculations are based on a starting date of
January 5, 1995 - the inception date of this Fund. This comparison is for
illustrative purposes only.
GENERAL DISCUSSION
by Portfolio Managers David Peebles (Foreign Stocks) and
R. David Ullom (Domestic Stocks)
MARKET CONDITIONS
After lagging throughout 1995, international markets provided performance more
in line with that of the U.S. market in the first half of 1996. European stock
performance remained steady while emerging markets rebounded strongly and
holdings in Japan provided positive gains even with the weaker yen.
Our own VA World Growth Fund provided a 22.10% one-year average annual total
return for the period ended June 30, 1996, outperforming the Lipper Global Fund
Index /1/ return of 17.09% for the same time period. However, keep in mind that
past performance is no guarantee of future results.
INTERNATIONAL
Europe - In spite of weakening European currencies, the European markets
continued to provide stable returns. Unlike long-term interest rates in the
United States, the long-term rates in Europe remained stable while short-term
rates continued to decline due to further monetary easing by Germany's central
bank. Our holdings in France, Germany, Switzerland, and the Netherlands made
significant contributions to our European investment performance.
/1/ Lipper Analytical Services is an independent organization that monitors the
performance of mutual funds.
OBJECTIVE:
Seeks long-term capital appreciation.
INVESTMENT PROGRAM:
Not less than 65% of the Fund's assets are invested in a diversified portfolio
of common stocks and other equity securities of both foreign and domestic
issuers representing at least three countries, one of which may include the
United States. The remainder of the Fund's assets may be invested in marketable
debt securities having remaining maturities of less than one year which are
issued or guaranteed as to both principal and interest by the U.S. government or
by its agencies.
<TABLE>
<CAPTION>
As June 30, 1996
<S> <C>
NET ASSETS: $32.0 million
NET ASSET VALUE
(NAV) PER SHARE: $12.64
AVERAGE ANNUAL
TOTAL RETURN
December 31, 1995
to June 30, 1996 13.87%*
One Year: 22.10%
Since Inception
January 5, 1995: 22.66%
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
</TABLE>
1996 SEMIANNUAL REPORT B-15
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
AN OVERVIEW (Continued) JUNE 30, 1996
Japan - Although signs of recovery in the economy look promising, more local
investor participation and currency stability are needed for the market to
advance further. Continued concerns about problems within the banking system, a
lack of commitment to corporate restructuring, and political uncertainty confirm
our continued underweighting in Japan.
Emerging Markets - After a rough year, our strategy of overweighting the
emerging markets is paying off. Economic recovery in latin America coupled with
good economic growth throughout Asia, Eastern Europe, and Mediterranean
countries has provided a solid foundation for healthy stock market activity.
Increasing consumer wealth, foreign direct investment, and international trade
mean rapid development even during periods of moderate global economic growth.
For this reason, we continue to overweight these markets.
UNITED STATES
Over the course of this last fiscal year, we have gradually reduced the
weighting of U.S. stocks in the VA World Growth Fund from 31.9% to 22.7% as of
June 30, 1996. As stated in the Annual Report, the reduction reflects a more
positive outlook for foreign stocks and a more cautious view toward domestic
ones.
Our allocation within the U.S. portfolio continues to place investment emphasis
on industries such as healthcare, aerospace/defense, and technology (computer
software and service). We believe that companies in these industries should
experience earnings growth at above-average rates. Conversely, we believe that
the valuation of these stocks does not adequately reflect the earnings growth
capability.
COUNTRY WEIGHTINGS AS A PERCENTAGE OF NET ASSETS
as of June 30, 1996
- ------------------------------------------------
Other *25.7% USA 30.3%
Spain 2.1%
Germany 2.3% Japan 13.2%
Switzerland 2.3%
Australia 2.4%
Netherlands 3.5% United Kingdom 5.8%
Sweden 3.8%
Canada 3.9% France 4.8%
*All investments in other countries were less than
2% of the portfolio's net assets.
[CHART APPEARS HERE]
B-16 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
AN OVERVIEW (Continued) JUNE 30, 1996
OUTLOOK
We continue to expect moderate economic growth with low inflation rates to
provide a favorable investment climate internationally. This environment, and
an extended run in the U.S. market over the past few years, favors an
overweighted position in the international markets.
<TABLE>
<CAPTION>
TOP 10 EQUITY HOLDINGS
as of June 30, 1996
- -----------------------------------------------
% of Net Assets
<S> <C>
Ciba Geigy AG (Switzerland) 1.3%
Essilor International (France) 1.3%
Telefonica de Espana,
S.A. ADR (Spain) 1.2%
Boeing Co. (USA) 1.1%
Canon, Inc. (Japan) 1.0%
CSL Ltd. (Australia) 1.0%
Ito-Yokado Co. Ltd. (Japan) 0.9%
Heineken N.V. (Netherlands) 0.9%
Elf Aquitaine ADS (France) 0.9%
Veba AG (Germany) 0.8%
</TABLE>
<TABLE>
<CAPTION>
TOP 10 INDUSTRIES OF
EQUITY HOLDINGS
as of June 30, 1996
- -----------------------------------------------
% of Net Assets
<S> <C>
Healthcare 10.0%
Telecommunications 6.5%
Banks 6.2%
Retail 5.7%
Oil 5.5%
Electronics 3.8%
Automobiles 2.5%
Aerospace/Defense 2.3%
Publishing 2.3%
Chemicals 2.2%
</TABLE>
Foreign investing is subject to additional risks which are discussed in the USAA
Life Variable Annuity prospectus. Since return on any investment is generally
commensurate with risk, investors should be aware of the potential volatility
associated with foreign markets.
The total return calculations found in this section are calculated at the Fund's
investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of Fund expenses. More
specific information regarding the Fund expenses can be found on page 9A of your
May 1, 1996 prospectus.
1996 SEMIANNUAL REPORT B-17
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
AN OVERVIEW JUNE 30, 1996
COMPARISON OF FUND TO BENCHMARKS
<TABLE>
<CAPTION>
USAA LIFE VA S&P 500 LEHMAN BROTHERS LIPPER BALANCED
DIVERSIFIED ASSETS FUND INDEX AGGREGATE BOND INDEX FUND AVERAGE
----------------------- ------- -------------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
01/05/95 $10,000 01/05/95 $10,000 01/05/95 $10,000 01/05/95 $10,000
01/31/95 $10,120 01/31/95 $10,259 01/31/95 $10,198 01/31/95 $10,115
02/28/95 $10,330 02/28/95 $10,658 02/28/95 $10,441 02/28/95 $10,390
03/31/95 $10,550 03/31/95 $10,972 03/31/95 $10,504 03/31/95 $10,562
04/30/95 $10,860 04/30/95 $11,295 04/30/95 $10,651 04/30/95 $10,728
05/31/95 $11,240 05/31/95 $11,746 05/31/95 $11,064 05/31/95 $11,079
06/30/95 $11,300 06/30/95 $12,018 06/30/95 $11,144 06/30/95 $11,310
07/31/95 $11,450 07/31/95 $12,416 07/31/95 $11,120 07/31/95 $11,560
08/31/95 $11,640 08/31/95 $12,447 08/31/95 $11,254 08/31/95 $11,654
09/30/95 $11,970 09/30/95 $12,972 09/30/95 $11,364 09/30/95 $11,913
10/31/95 $11,890 10/31/95 $12,926 10/31/95 $11,511 10/31/95 $11,875
11/30/95 $12,270 11/30/95 $13,492 11/30/95 $11,684 11/30/95 $12,210
12/31/95 $12,633 12/31/95 $13,752 12/31/95 $11,848 12/31/95 $12,334
01/31/96 $12,834 01/31/96 $14,220 01/31/96 $11,926 01/31/96 $12,540
02/29/96 $12,844 02/29/96 $14,352 02/29/96 $11,718 02/29/96 $12,535
03/31/96 $13,108 03/31/96 $14,490 03/31/96 $11,636 03/31/96 $12,578
04/30/96 $13,004 04/30/96 $14,703 04/30/96 $11,571 04/30/96 $12,669
05/31/96 $13,151 05/31/96 $15,081 05/31/96 $11,548 05/31/96 $12,823
06/30/96 $13,341 06/30/96 $15,138 06/30/96 $11,703 06/30/96 $12,855
</TABLE>
DATA REPRESENTS THE LAST BUSINESS DAY OF EACH MONTH.
[GRAPH APPEARS HERE]
The graph above compares the performance of a $10,000 hypothetical investment in
the USAA Life VA Diversified Assets Fund to two industry indexes and an
independent rating agency's average which most closely resemble the holdings of
this Fund.
The S&P 500 Index is an unmanaged index representing the average performance of
a group of 500 widely held, publicly traded stocks. It is not possible to
invest directly in the S&P 500 Index. The Lehman Brothers Aggregate Bond Index
is an unmanaged index made up of the government/corporate index, the
mortgage-backed securities index, and the asset-backed securities index. The
Lipper Balanced Fund Average is the average performance level of all variable
annuity balanced funds as reported by Lipper Analytical Services, an independent
organization that monitors the performance of variable annuity funds and mutual
funds.
The calculations for all indexes and averages are based on a full calendar year
whereas the VA Diversified Assets Fund calculations are based on a starting date
of January 5, 1995 - the inception date of this Fund. This comparison is for
illustrative purposes only.
GENERAL DISCUSSION
by Portfolio Managers Harry Miller (Common Stock) and
Paul Lundmark (Debt Securities)
THE MARKET
Common Stock - The U.S. stock market continues to do well since our Annual
Report of December 31, 1995 despite higher interest rates, lower unemployment
numbers and a general "heating up" of the economy. Interest rates have moved up
producing a negative bond market but the Standard & Poor's Index - up 8.9% over
the last six months - seems to be holding due to good earnings reports and a low
inflation rate.
Debt Securities - During the first half of 1996, yields on treasury securities
with maturities from 2 to 30 years have risen over 1%. Even though current
inflation is historically at very low levels, some investors believe that recent
economic strength could cause inflation to accelerate. The market is
anticipating that the Federal Reserve Board will have to raise overnight rates
in order to maintain economic growth at target levels. These market perceptions
have resulted in negative returns for the majority of fixed-income securities.
OBJECTIVE
Seeks long-term capital growth, consistent with preservation of capital and
balanced by current income.
INVESTMENT PROGRAM:
Approximately 60% of the Fund's assets are invested in equity securities
selected for total return potential and approximately 40% are invested in debt
securities of varying maturities. On June 30, 1996 the portfolio mix was 61.6%
common stocks and 38.4% fixed-income securities.
<TABLE>
<CAPTION>
As of June 30, 1996
<S> <C>
NET ASSETS: $31.6 million
NET ASSET VALUE
(NAV) PER SHARE: $12.63
AVERAGE ANNUAL
TOTAL RETURN
December 31, 1995
to June 30, 1996: 5.60%*
One Year: 18.06%
Since Inception
January 5, 1995: 21.05%
*Total returns for periods of less than one year are not annualized. This
six-month return is cumulative.
</TABLE>
1996 SEMIANNUAL REPORT B-19
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
AN OVERVIEW (Continued) JUNE 30, 1996
PORTFOLIO STRATEGIES
Common Stock - Our strategy is to hold high-quality common stocks which are
considered to be undervalued with regard to assets and/or earnings. The
portfolio is well diversified in 16 industries and 37 companies. The industries
with the greatest percentage of net assets are oil, healthcare/drugs, chemicals,
telecommunications and aerospace/defense. The best performing industries were
healthcare/drugs, chemicals, machinery-diversified, retailing and office
equipment. The worst performing industries were electric utilities and
telephones. The best performing stocks since our last report were: American
Home Products, Monsanto, Chevron, Sprint, Xerox, Occidental Petroleum, Philip
Morris and Sears - all of which we still hold. The disappointments over the
period were NYNEX, Houston Industries, Texas Utilities and GTE Corp. We sold
Arvin Industries (auto parts) and EG&G (aerospace/defense). Additions included
Union Camp, J.C. Penney, Southwestern Bell and Sprint.
Debt Securities - The Fund has shortened the maturity of the debt segment by
investing in short- and intermediate-term securities and by reducing the
percentage of long-term, fixed-rate securities held. As of June 30, 1996, the
weighted average maturity for this segment was 10.41 years.
While we have reduced our weighted average maturity, we will not go to extremes
and shorten the portfolio's maturity drastically. Interest rates could easily
fall as rapidly as they rose. We feel it is in your best interest for us to
search for securities that provide high current income. For the long-term
investor, it is important to realize that the major component of a bond's total
return is the coupon and reinvestment income - not capital appreciation.
Short-, intermediate- and long-term securities generally provide higher income
than money market securities.
<TABLE>
<CAPTION>
BASIC VALUE STOCKS
TOP 10 HOLDINGS
AS OF JUNE 30, 1996
- ----------------------------------------------------
% of Net Assets
<S> <C>
Boeing Co. 2.8%
Monsanto Co. 2.6%
J.C. Penney Company, Inc. 2.5%
Allstate Corp. 2.5%
Chrysler Corp. 2.4%
Pharmacia & Upjohn, Inc. 2.0%
Philip Morris Companies, Inc. 2.0%
American Home Products Corp. 1.9%
Sprint Corp. 1.9%
Sears, Roebuck & Co. 1.8%
</TABLE>
<TABLE>
<CAPTION>
TOP 5 BONDS
AS OF JUNE 30, 1996
- ---------------------------------------------------
Coupon % of
Rate Net Assets
<S> <C> <C>
U.S. Treasury Bonds 6.25% 5.7%
Nationwide Health
Properties, Inc., MTN 8.61% 3.3%
Capital One
Bank, MTN 7.35% 3.2%
Corporacion Andina
De Fomento Global
Bonds 7.375% 3.2%
Tektronix Inc. 7.50% 3.1%
</TABLE>
B-20 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
AN OVERVIEW (Continued) JUNE 30, 1996
We are also pleased to note that the price of our holding in K Mart has
rebounded sharply. Recent company developments have resulted in a vastly
improved outlook.
OUTLOOK
Common Stock - We do not see overall inflation getting out of control (this is a
presidential election year) as wages continue to be under pressure while
companies are still restructuring. We believe U.S. companies will continue to
produce positive earnings reports throughout 1996 as the economy moves forward.
The portfolio will continue to be heavily weighted in chemicals,
aerospace/defense, telephones, retailing, tobacco and healthcare/drugs.
Debt Securities - I want to emphasize that it is impossible to predict the
course that interest rates will take. We are not market timers because over
time no one has been successful in predicting the direction of interest rates.
Whether recent strong growth indicators will cause inflation to accelerate is
anybody's guess. That is why we have positioned the fixed-income segment to
provide high current income for the long-term investor.
<TABLE>
<CAPTION>
TOP 10 PORTFOLIO
INDUSTRIES
AS OF JUNE 30, 1996
- --------------------------------------------------
% of Net Assets
<S> <C>
Banks 10.6%
Retail 10.0%
Healthcare 8.6%
Oil 8.6%
Real Estate Investment Trusts 6.4%
Telecommunications 6.0%
Aerospace/Defense 6.0%
Chemicals 5.7%
Tobacco 4.5%
Electric Power 4.4%
</TABLE>
The total return calculations found in this section are calculated at the Fund's
investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of Fund expenses. More
specific information regarding the Fund expenses can be found on page 9A of your
May 1, 1996 prospectus.
1996 SEMIANNUAL REPORT B-21
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES JUNE 30, 1996 (UNAUDITED)
FIXED RATE INSTRUMENTS (74.5%)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Security Rate Maturity (000)
- --------- -------- ---- -------- -----
<S> <C> <C> <C> <C>
BEVERAGES - SOFT DRINK
$ 550 PepsiCo, Inc., CP 5.36% 7/17/96 $ 549
------
CHEMICALS
550 DuPont (E.I.) De Nemours & Co., CP 5.28 7/16/96 549
------
CONGLOMERATES
326 Cargill, Inc., CP 5.30 7/02/96 326
------
ELECTRIC POWER
565 National Rural Utilities Cooperative Finance Corp., CP 5.34 7/11/96 564
------
ELECTRICAL EQUIPMENT
405 Emerson Electric Co., CP 5.32 7/08/96 404
------
ELECTRONICS - SEMI-CONDUCTORS
450 Motorola Inc., CP 5.34 7/22/96 448
------
FINANCE - BUSINESS/COMMERCIAL
336 General Electric Capital Corp., CP 5.37 7/09/96 336
------
FINANCE - CONSUMER
300 Ford Motor Credit Co., CP 5.40 7/17/96 299
465 Toyota Motor Credit Corp., CP 5.27 7/03/96 465
------
764
------
LEASING
405 PHH Corp., CP 5.37 7/23/96 404
------
OIL - INTERNATIONAL
540 Shell Oil Co., CP 5.31 7/19/96 538
------
RETAIL - GENERAL MERCHANDISING
328 Wal-Mart Stores Inc., CP 5.27 7/01/96 328
------
U.S. GOVERNMENT
290 Federal Farm Credit Bank, Discount Notes 5.25 7/01/96 290
380 Federal Home Loan Bank, Discount Notes 5.30 7/24/96 379
389 Federal Home Loan Mortgage, Discount Notes 5.24 7/05/96 388
239 Federal Home Loan Mortgage, Discount Notes 5.25 7/05/96 239
208 Federal Home Loan Mortgage, Discount Notes 5.26 7/05/96 208
740 Federal Home Loan Mortgage, Discount Notes 5.27 7/15/96 738
600 Federal Home Loan Mortgage, Discount Notes 5.27 7/18/96 598
500 Federal Home Loan Mortgage, Discount Notes 5.26 7/31/96 498
485 Federal National Mortgage Association, Discount Notes 5.25 7/10/96 484
------
3,822
------
Total fixed rate instruments (cost: $9,032) 9,032
------
PUT BONDS (1.7%)
EDUCATION
200 Dome Corp. Demand Bonds, Series 1991 (CRE) (cost: $200) 5.64 8/31/96 200
------
</TABLE>
1996 SEMIANNUAL REPORT B-23
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
VARIABLE RATE DEMAND NOTES (24.0%)
<TABLE>
<CAPTION>
Principal
Amount Value
(000) Security Rate Maturity (000)
- --------- -------- ---- -------- ---------
<S> <C> <C> <C> <C>
AUTO PARTS
$ 200 Alabama IDA RB (Rehau Project) (CRE) 5.60% 10/01/19 $ 200
140 Bardstown, KY, RB, Series 1994 (CRE) 5.47 6/01/24 140
-------
340
-------
BUILDING MATERIALS GROUP
100 Sarasota County, FL, IDA RB, Series 1994 (CRE) 5.55 9/01/14 100
-------
BUILDINGS
100 MMR Funding I, Floating Rate Option Notes, Series A (CRE) 5.50 9/01/10 100
-------
FINANCE - RECEIVABLES
150 Capital One Funding Corp., Notes, Series 1993A (CRE) 5.50 6/02/08 150
95 Capital One Funding Corp., Notes, Series 1994D (CRE) 5.50 10/01/24 95
100 Capital One Funding Corp., Notes, Series 1995C (CRE) 5.50 10/01/15 100
78 Midwest Funding Corp., Notes, Series 1992A (CRE) 5.50 5/01/07 78
-------
423
-------
HEALTHCARE - DIVERSIFIED
400 GMS Associates II Project Health Care RB, Series 1995 (CRE) 5.60 8/15/25 400
100 GMS Associates Project Health Care RB, Series 1994 (CRE) 5.60 5/15/24 100
150 Wenatchee Valley Clinic, P.S., WA,
Taxable Bonds, Series 1995 (CRE) 5.60 1/15/15 150
-------
650
-------
HEALTHCARE - MISCELLANEOUS
100 Mason City Clinic, P.C., IA, Demand Bonds, Series 1992 (CRE) 5.55 9/01/22 100
-------
HOSPITALS
350 Armstrong County Hospital Auth., PA, RB, Series 1993B (CRE) 5.60 9/01/17 350
-------
HOTEL/MOTEL
100 Howard County, MD, Taxable RB, Series 1994 (CRE) 5.55 10/01/09 100
-------
MULTI-FAMILY HOUSING
100 Palm Desert Redevelopment Agency, CA, RB (CRE) 5.78 8/01/22 100
-------
MACHINERY - DIVERSIFIED
200 DSL Funding Corp., Notes (CRE) 5.65 12/01/09 200
-------
NURSING CARE
200 Lincolnwood Funding Corp. RB, Series 1995A (CRE) 5.64 8/01/15 200
150 Massachusetts Nursing Homes RB, Series 1993 (CRE) 5.60 11/15/13 150
-------
350
-------
REAL ESTATE
100 H/M Partners, LLC, Bonds (CRE) 5.90 10/01/20 100
-------
Total variable rate demand notes (cost $2,913) 2,913
-------
Total investments (cost: $12,145) $12,145
=======
</TABLE>
B-24 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) June 30, 1996 (Unaudited)
PORTFOLIO SUMMARY BY INDUSTRY
<TABLE>
<CAPTION>
<S> <C>
U.S. Government 31.5%
Healthcare 12.0
Finance-Consumer 6.3
Electric Power 4.7
Beverages-Soft Drink 4.5
Chemicals 4.5
Oil-International 4.4
Electronics (Semi-Conductors) 3.7
Finance-Receivables 3.5
Electrical Equipment 3.3
Leasing 3.3
Auto Parts 2.8
Finance-Business/Commercial 2.8
Conglomerates 2.7
Retail-General Merchandise Chain 2.7
Education 1.7
Machinery-Diversified 1.7
Other 4.1
-----
100.2%
=====
</TABLE>
See accompanying "Notes to Portfolio Investments in Securities" on page B-42.
1996 SEMIANNUAL REPORT B-25
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY INCOME FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES June 30, 1996 (Unaudited)
COMMON STOCKS (10.1%)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- --------- -------
<S> <C> <C>
14,000 Allegheny Power System, Inc. $ 432
9,000 American Electric Power Co., Inc. 384
13,000 CINergy Corp. 416
4,500 Entergy Corp. 128
11,000 General Public Utilities Corp. 388
3,300 Health Care Property Investors, Inc. 111
17,000 Houston Industries, Inc. 419
13,500 Northeast Utilities 180
6,000 PNC Bank Corp. 178
11,500 Public Service Enterprise Group, Inc. 315
-------
Total common stocks (cost: $2,484) 2,951
-------
PREFERRED STOCKS (0.5%)
6,000 United Dominion Realty Trust, Inc. "A",
9.25%, Preferred Series A (cost: $150) 152
-------
U.S. GOVERNMENT & AGENCY ISSUES (66.5%)
Principal
Amount
(000)
- ---------
FEDERAL NATIONAL MORTGAGE ASSOCIATION (16.4%)
$ 1,398 7.00%, 6/01/24 1,343
1,318 7.50%, 1/01/25 1,303
1,038 8.00%, 1/01/25 1,049
1,053 8.50%, 12/01/24 1,082
-------
4,777
-------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (17.8%)
1,337 7.00%, 8/15/23 1,293
1,320 7.50%, 8/15/23 1,310
1,290 8.00%, 5/15/24 1,304
1,228 8.50%, 12/15/24 1,266
-------
5,173
-------
U.S. TREASURY BONDS (32.3%)
8,586 7.875%, 2/15/21 9,410
-------
Total U.S. Government & agency issues (cost: $18,626) 19,360
-------
SHORT-TERM (21.5%)
Coupon
Rate Maturity
------ --------
COMMERCIAL PAPER
1,400 General Electric Capital Corp., CP 5.28% 7/01/96 1,400
1,400 Heller Financial, Inc. 5.34 7/03/96 1,399
1,400 Northwest Corp. 5.05 7/05/96 1,399
1,400 Prudential Funding Corp. 5.00 7/02/96 1,399
670 Sears Roebuck Acceptance Corp. 5.00 7/01/96 670
-------
Total short-term (cost: $6,267) 6,267
-------
Total investments (cost $27,527) $28,730
=======
</TABLE>
B-26 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY INCOME FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) June 30, 1996 (Unaudited)
PORTFOLIO SUMMARY BY INDUSTRY
<TABLE>
<CAPTION>
<S> <C>
U.S. Government 69.5%
Finance-Business/Commercial 9.6
Electric Power 9.1
Bank Holding Companies-Major Regional 5.4
Insurance-Multi/Line Companies 4.8
Retail-General Merchandise Chain 2.3
Real Estate Investment Trusts 0.9
-----
98.6%
=====
</TABLE>
See accompanying "Notes to Portfolio Investments in Securities" on page B-42.
1996 SEMIANNUAL REPORT B-27
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES June 30, 1996 (Unaudited)
COMMON STOCKS (96.0%)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- --------- -------
<S> <C> <C>
AEROSPACE/DEFENSE (6.9%)
28,000 B.F. Goodrich Co. $1,046
13,000 Boeing Co. 1,133
11,000 Rockwell International Corp. 630
-------
2,809
-------
ALUMINUM (1.4%)
10,100 Aluminum Co. of America 579
-------
AUTOMOBILES (1.3%)
16,500 Ford Motor Co. 534
-------
BANK HOLDING COMPANIES-MONEY CENTER (1.3%)
7,200 Bankers Trust New York Corp. 532
-------
BANK HOLDING COMPANIES-OTHER MAJOR (1.7%)
9,000 BankAmerica Corp. 682
-------
BROKERAGE FIRMS (1.3%)
9,000 Dean Witter, Discover & Co. 515
-------
CHEMICALS (4.1%)
9,000 Avery Dennison Corp. 494
7,500 Dow Chemical Co. 570
2,000 Olin Corp. 179
11,000 Union Carbide Corp. 437
-------
1,680
-------
CHEMICALS-SPECIALTY (1.3%)
14,000 Morton International, Inc. 521
-------
COMMUNICATION-EQUIPMENT MANUFACTURERS (1.4%)
15,400 Lucent Technologies, Inc.* 583
-------
CONGLOMERATES (1.4%)
40,000 Hanson plc ADR 570
-------
CONTAINERS-METALS & GLASS (1.4%)
19,500 Ball Corp. 561
-------
ELECTRIC POWER (0.9%)
14,000 Houston Industries, Inc. 345
-------
ELECTRONICS-SEMI-CONDUCTORS (1.3%)
33,000 National Semiconductor Corp.* 512
-------
ENTERTAINMENT (1.0%)
10,000 Time Warner, Inc. 393
-------
FINANCE-CONSUMER (1.1%)
12,300 Associates First Capital Corp.* 463
-------
FOODS (2.4%)
8,000 CPC International, Inc. 576
16,500 Dean Foods Co. 408
-------
984
-------
HEALTHCARE-DIVERSIFIED (1.8%)
12,000 American Home Products Corp. 721
-------
HEALTHCARE-HMO (1.3%)
29,000 Humana, Inc.* 518
-------
HEAVY DUTY TRUCKS & PARTS (1.4%)
16,500 Trinova Corp. 551
-------
</TABLE>
B-28 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- --------- -------
<S> <C> <C>
HOMEBUILDING (1.6%)
21,000 Centex Corp. $ 654
-------
HOUSEHOLD PRODUCTS (2.2%)
5,500 Procter & Gamble Co. 498
26,000 Sunbeam Corp. 384
-------
882
-------
INSURANCE-MULTI-LINE COMPANIES (1.2%)
7,000 Aetna Life & Casualty Co. 501
-------
INSURANCE-PROPERTY/CASUALTY (5.4%)
13,000 Allstate Corp. 593
5,600 American International Group, Inc. 552
24,000 Everest Reinsurance Holdings, Inc. 621
22,900 Highlands Insurance Group, Inc.* 430
-------
2,196
-------
LEISURE TIME (1.2%)
25,000 Brunswick Corp. 500
-------
MACHINERY-DIVERSIFIED (2.4%)
22,000 BW/IP, Inc. 418
13,500 Deere & Co. 540
-------
958
-------
MANUFACTURING-DIVERSIFIED INDUSTRIES (1.1%)
12,000 Hillenbrand Industries, Inc. 447
-------
MEDICAL PRODUCTS & SUPPLIES (2.6%)
12,000 Baxter International, Inc. 567
14,600 C.R. Bard, Inc. 496
-------
1,063
-------
METALS-MISCELLANEOUS (2.8%)
15,500 Inco Ltd. 500
25,000 Titanium Metals Corp. 647
-------
1,147
-------
NATURAL GAS DISTRIBUTION-PIPELINES (2.4%)
16,000 NICOR, Inc. 454
12,000 Sonat, Inc. 540
-------
994
-------
OFFICE EQUIPMENT & SUPPLIES (2.0%)
15,000 Xerox Corp. 802
-------
OIL-DOMESTIC (2.8%)
27,000 Occidental Petroleum Corp. 668
13,500 Unocal Corp. 456
-------
1,124
-------
OIL-EXPLORATION & PRODUCTION (2.8%)
18,000 Apache Corp. 592
107,000 Gulf Canada Resources, Ltd.* 548
-------
1,140
OIL-INTERNATIONAL (1.3%)
6,500 Texaco, Inc. 545
-------
OIL WELL EQUIPMENT & SERVICE (1.4%)
6,800 Schlumberger Ltd. 573
-------
</TABLE>
1996 SEMIANNUAL REPORT B-29
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- --------- -------
<S> <C> <C>
PAPER & FOREST PRODUCTS (3.5%)
33,400 Jefferson Smurfit Corp.* $ 363
7,500 Kimberly-Clark Corp. 579
11,500 Weyerhaeuser Co. 489
-------
1,431
-------
POLLUTION CONTROL (1.4%)
17,000 WMX Technologies, Inc. 557
-------
PUBLISHING (2.4%)
7,300 Dunn & Bradstreet Corp. 456
10,700 Houghton Mifflin Co. 533
-------
989
-------
RAILROADS (1.1%)
5,500 Norfolk Southern Corp. 466
-------
REAL ESTATE INVESTMENT TRUSTS (3.2%)
13,000 Developers Diversified Realty Corp. 414
16,000 Kimco Realty Corp. 452
22,000 Public Storage, Inc. 454
-------
1,320
-------
RETAIL-DEPARTMENT STORES (1.4%)
13,000 May Department Stores Co. 569
-------
RETAIL-GENERAL MERCHANDISING (2.8%)
10,000 J.C. Penney Company, Inc. 525
12,500 Sears, Roebuck & Co. 608
-------
1,133
-------
RETAIL-SPECIALTY (1.8%)
10,000 Borders Group, Inc.* 322
32,000 Phillips-Van Heusen Corp. 408
-------
730
-------
SAVINGS & LOAN HOLDING COMPANIES (1.3%)
22,000 Great Western Financial Corp. 525
-------
TELEPHONES (5.0%)
7,000 AT&T 434
10,500 GTE Corp. 470
12,000 NYNEX Corp. 570
13,000 Sprint Corp. 546
-------
2,020
-------
TOBACCO (4.2%)
5,000 Philip Morris Companies, Inc. 520
16,500 RJR Nabisco Holdings Corp. 512
25,000 Universal Corp. 662
-------
1,694
-------
Total Common Stocks (cost: $31,844) 39,013
-------
SHORT-TERM (5.9%)
Principal
Amount Coupon
(000) Rate Maturity
- --------- ------ --------
U.S. GOVERNMENT & AGENCY ISSUES
$ 2,400 Federal Home Loan Bank
(cost: $2,399) 5.30 7/01/96 2,399
-------
Total investments (cost: $34,243) $41,412
=======
</TABLE>
*Non-income producing
See accompanying "Notes to Portfolio of Investments in Securities" on page B-42.
B-30 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES JUNE 30, 1996 (UNAUDITED)
FOREIGN SECURITIES (69.8%)
FOREIGN COMMON STOCKS (67.0%)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
ARGENTINA (1.5%)
5,300 Disco S.A. ADS* $ 117
2,000 IRSA Inversiones y Representaciones S.A. GDS 67
6,370 Molinos Rio de la Plata S.A. 67
11,000 Quilmes Industrial (Quinsa) S.A. ADS* 113
3,800 Telefonica de Argentina S.A. ADR 113
------
477
------
AUSTRALIA (1.6%)
75,000 CSL Ltd. 315
21,300 Rothmans Holdings Ltd. 119
28,000 Seven Network Ltd. 89
------
523
------
AUSTRIA (0.7%)
1,750 VA Technologie AG 214
------
BELGIUM (0.7%)
625 Colruyt S.A. 210
------
CANADA (3.9%)
5,000 Alliance Forest Products, Inc.* 79
40,000 Beau Canada Exploration Ltd.* 60
8,100 Canadian National Railway Co. 149
12,000 Canadian Occidental Petroleum Ltd. 202
8,700 Loewen Group, Inc. 263
1,800 Potash Corp. Saskatchewan, Inc. 119
19,000 Ranger Oil Ltd. 139
5,000 Royal Plastics Group Ltd.* 76
4,700 Suncor, Inc. 148
------
1,235
------
CHILE (1.0%)
3,700 Madeco S.A. ADS 104
7,100 Maderas y Sinteticos S.A. ADS 126
1,500 Sociedad Quimica y Minera de Chile S.A. ADS 81
------
311
------
CHINA (0.4%)
7,600 China Yuchai International Ltd. 58
36,000 New World Infrastructure Ltd.* 77
------
135
------
COLOMBIA (0.4%)
14,000 Banco de Colombia GDS 123
------
CZECH REPUBLIC (0.6%)
4,300 Komercni Banka, A.S.* 116
700 SPT Telecom A.S.* 86
------
202
------
DENMARK (1.4%)
4,000 Carli Gry International A/S* 131
5,000 ISS International "B" 112
800 Novo Nordisk A/S "B" 113
2,000 Unidanmark A/S 93
------
449
------
</TABLE>
1996 SEMIANNUAL REPORT B-31
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
FINLAND (1.0%)
6,300 Nokia Corp. ADS $ 233
1,080 Raision Tehtaat 65
2,180 Raision Tehtaat Rights* 18
------
316
------
FRANCE (4.8%)
560 Chargeurs 25
8,000 Coflexip ADS 139
7,500 Elf Aquitaine ADS 276
3,300 Eramet Group 222
1,475 Essilor International 418
2,400 Genset S.A. ADS* 45
560 Pathe S.A.* 131
1,100 Roussel Uclaf 264
------
1,520
------
GERMANY (2.3%)
3,000 Adidas AG 252
4,000 Siemens AG 214
5,100 Veba AG 271
------
737
------
HONG KONG (1.5%)
145,000 Amoy Properties Ltd. 175
2,200 Asia Satellite Telecommunications
Holdings Ltd. ADR* 65
170,000 Cosco Pacific Ltd. 122
55,000 Varitronix International Ltd. 115
------
477
------
HUNGARY (0.3%)
10,000 Mol Magyar Olay Es Gazipari GDS* 111
------
INDIA (0.9%)
4,000 Hindalco Industries Ltd. GDR 152
8,000 Larsen & Toubro Ltd. GDR 150
------
302
------
INDONESIA (1.2%)
95,000 PT Asahimas Flat Glass Co., Ltd. 100
101,500 PT Bank Dagang Nasional Indonesia 85
7,000 PT HM Sampoerna 80
34,000 PT Jaya Real Property 107
------
372
------
ISRAEL (1.0%)
5,500 Koor Industries Ltd. ADS 95
5,600 Teva Pharmaceutical Industires Ltd. ADS 212
------
307
------
ITALY (1.7%)
12,000 Arnoldo Mondadori Editore 91
33,000 Fiat S.p.A. 111
12,000 Fidis Finanziaria di Sviluppo S.p.A. 33
172,500 Olivetti and C., S.p.A.* 93
4,000 SAES Getters S.p.A.* 80
56,800 STET 149
------
557
------
</TABLE>
B-32 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
JAPAN (12.6%)
5,000 77 Bank Ltd. $ 50
9,000 Bridgestone Corp. 172
16,000 Canon, Inc. 333
10,000 Daibiru Corp. 133
8,000 Higo Bank 64
21,000 Hitachi Ltd. 196
8,000 Honda Motor Co. Ltd. 208
5,000 Hoya Corp. 162
5,000 Ito-Yokado Co. Ltd. 302
3,000 Kyocera Corp. 213
9,000 Laox Co. Ltd. 216
26,000 Minebea Co. Ltd. 219
26,000 Mitsubishi Heavy Industries Ltd. 226
700 Nippon Television Network 218
75,000 NKK Corp.* 228
13,000 Nomura Securities Co. Ltd. 254
3 NTT Data Communications Systems Corp. 90
3,000 Shimamura Co. Ltd. 132
16,000 Shiseido Co. Ltd. 205
18,000 Terumo Corp. 229
6,000 Tostem Corp. 177
------
4,027
------
KOREA (1.0%)
2,500 Korea Electric Power Corp. ADS 100
2,270 LG Chemical Ltd. 36
1,470 Pohang Iron & Steel Co., Ltd. 117
937 Samsung Electronics Co. Ltd.* 78
------
331
------
MALAYSIA (1.4%)
24,000 Resorts World BHD 138
34,000 Technology Resources Industries BHD* 118
20,000 Telekom Malaysia BHD 178
------
434
------
MEXICO (1.2%)
5,818 Desc, Soceidad de Fomento Industrial, S.A. de
C.V. ADS* 122
6,000 Panamerican Beverages, Inc. "A" 269
------
391
------
NETHERLANDS (3.5%)
3,000 EVC International N.V. 93
7,000 Forasol-Foramer N.V.* 88
1,250 Heineken N.V. 280
8,000 ING Groep N.V. 239
1,500 Oce-van der Grinten N.V. 159
16,000 Verenigd Besit VNU 249
------
1,108
------
NEW ZEALAND (0.3%)
7,500 Tranz Rail Holdings Ltd. ADR* 104
------
NORWAY (1.2%)
100,000 Christiania Bank og Kreditkasse 236
9,400 Nycomed ASA* 135
------
371
------
</TABLE>
1996 SEMIANNUAL REPORT B-33
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
PHILIPPINES (0.9%)
12,500 Empire East Land Holdings, Inc.* $ 8
125,000 Megaworld Properties* 112
4,000 Metropolitan Bank and Trust Co. 112
125,800 Universal Robina Corp. 67
-------
299
-------
PORTUGAL (0.6%)
6,800 Portugal Telecom, S.A. ADS 179
-------
SINGAPORE (1.1%)
20,000 Jurong Shipyard Ltd. 101
12,000 Keppel Corp. Ltd. 101
24,000 Overseas Union Bank Ltd. 165
-------
367
-------
SOUTH AFRICA (0.4%)
5,800 Malbak 29
7,164 Nedcor Ltd. GDR* 107
600 Nedcor Ltd. Warrants* 2
-------
138
-------
SPAIN (2.1%)
13,000 Autopistas del Mare Nostrum S.A. 168
1,850 Corporacion Bancaria de Espana S.A. 81
1,900 Corporacion Bancaria de Espana S.A. ADR 42
7,200 Telefonica de Espana S.A. ADR 397
-------
688
-------
SWEDEN (3.8%)
2,550 Abb AB 271
8,600 Autoliv AB 262
12,999 Getinge Industrier AB "B" 246
7,500 Nordbanken AB 145
11,000 Swedish Match AB* 34
11,000 Volvo AB 251
-------
1,209
-------
SWITZERLAND (2.3%)
350 Ciba Geigy AG 427
50 SGS Group AG 120
300 Sulzer AG P.C. 193
-------
740
-------
TAIWAN (0.6%)
10,500 Acer, Inc.* 80
5,000 China Steel Corp. GDS 127
-------
207
-------
THAILAND (0.6%)
38,200 Krung Thai Bank 179
-------
TURKEY (0.4%)
170,000 Erciyas Biracilik ve Malt Sanayi A.S. 96
1,540,700 Yapi Ve Kredi Bankasi A.S. 44
-------
140
-------
</TABLE>
B-34 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
UNITED KINGDOM (5.8%)
45,000 Argyll Group plc $ 242
12,000 Comcast UK Cable Partners Ltd.* 153
60,000 Corporate Services Group plc 169
30,000 Harvey Nichols plc* 157
30,500 Northern Ireland Electricity plc 199
31,900 Refuge Group plc 227
1,500 Reuters Holdings plc ADR 109
59,000 Tomkins plc 222
3,200 Vodafone Group plc ADR 118
80,000 WPP Group plc 269
------
1,865
------
OTHER HOLDINGS (0.3%)
90,000 Central European Growth Fund plc 90
30,000 Central European Growth Fund plc Warrants* 6
------
96
------
Total foreign common stocks (cost: $18,686) 21,451
------
FOREIGN PREFERRED STOCKS (2.2%)
AUSTRALIA (0.8%)
25,000 Village Roadshow Ltd. "B" 70
50,000 Village Roadshow Ltd. "A" 175
------
245
------
BRAZIL (1.4%)
5,500,000 Companhia Energetica de Minas Gerais (Cemig) 146
1,350,000 Petroleo Brasileiro S.A. 166
2,000,000 Telebras PN 140
------
452
------
Total foreign preferred stocks (cost: $542) 697
------
FOREIGN BONDS (0.6%)
Principal
Amount
(000)
- ---------
JAPAN
$ 160 MBL International Finance (Bermuda) Trust,
Convertible Notes, 3.00%, 11/30/02 (cost: $166) 187
------
Total foreign securities (cost: $19,394) 22,335
------
</TABLE>
1996 SEMIANNUAL REPORT B-35
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
DOMESTIC STOCKS (22.7%)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
AEROSPACE/DEFENSE (2.3%)
4,400 B.F. Goodrich Co. $ 164
4,000 Boeing Co. 349
4,000 Rockwell International Corp. 229
------
742
------
ALUMINUM (0.4%)
2,400 Aluminum Co. of America 138
------
AUTOMOBILES (0.6%)
6,000 Ford Motor Co. 194
------
BANK HOLDING COMPANIES - MONEY CENTER (0.4%)
1,900 Bankers Trust New York Corp. 140
------
BEVERAGES - SOFT DRINK (0.4%)
3,500 PepsiCo, Inc. 124
------
BIOTECHNOLOGY (0.3%)
1,500 Amgen, Inc.* 81
------
CHEMICALS (1.0%)
3,200 Avery Dennison Corp. 176
1,700 Dow Chemical Co. 129
------
305
------
CHEMICALS - SPECIALTY (0.5%)
4,000 Morton International, Inc. 149
------
COMMUNICATION - EQUIPMENT MANUFACTURERS (0.5%)
4,000 Lucent Technologies, Inc.* 151
------
COMPUTER SOFTWARE & SERVICE (0.8%)
1,100 Microsoft Corp.* 132
3,600 Sterling Commerce, Inc.* 134
------
266
------
CONTAINERS - METALS & GLASS (0.4%)
4,000 Ball Corp. 115
------
ELECTRONICS - SEMI-CONDUCTORS (1.4%)
2,000 Intel Corp. 147
3,000 Motorola, Inc. 188
6,500 National Semiconductor Corp.* 101
------
436
------
ENTERTAINMENT (0.5%)
4,000 Time Warner, Inc. 157
------
FINANCE-CONSUMER (0.3%)
2,600 Associates First Capital Corp.* 98
------
FOODS (0.3%)
4,300 Dean Foods Co. 106
------
HEALTHCARE - DIVERSIFIED (0.3%)
1,200 Bristol-Myers Squibb Co. 108
------
HEALTHCARE - HMO (0.4%)
2,500 United HealthCare Corp. 126
------
HEALTHCARE - MISCELLANEOUS (0.8%)
4,700 COHR, Inc.* 112
3,200 Total Renal Care Holdings, Inc.* 135
------
247
------
HOUSEHOLD PRODUCTS (0.5%)
1,700 Proctor & Gamble Co. 154
------
</TABLE>
B-36 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
INSURANCE - PROPERTY/CASUALTY (0.6%)
2,000 American International Group, Inc. $ 197
------
MACHINERY - DIVERSIFIED (0.9%)
6,000 BW/IP, Inc. 114
4,000 Deere & Co. 160
------
274
------
MEDICAL PRODUCTS & SUPPLIES (0.7%)
4,100 C.R. Bard, Inc. 139
3,000 St. Jude Medical, Inc.* 101
------
240
------
OFFICE EQUIPMENT & SUPPLIES (0.6%)
3,900 Xerox Corp. 209
------
OIL - DOMESTIC (0.3%)
3,000 Unocal Corp. 101
------
OIL - EXPLORATION & PRODUCTION (0.5%)
4,700 Apache Corp. 155
------
OIL WELL EQUIPMENT & SERVICE (0.6%)
3,400 Halliburton Co. 189
------
PAPER & FOREST PRODUCTS (0.8%)
4,000 Fort Howard Corp.* 79
4,000 Weyerhaeuser Co. 170
------
249
------
POLLUTION CONTROL (0.9%)
4,000 Browning-Ferris Industries, Inc. 116
4,800 WMX Technologies, Inc. 157
------
273
------
PUBLISHING (0.8%)
4,600 American Greetings Corp. 126
1,900 Dun & Bradstreet Corp. 119
------
245
------
RESTAURANTS (0.3%)
7,000 Brinker International, Inc.* 105
------
RETAIL - GENERAL MERCHANDISING (0.3%)
3,750 Dollar General Corp. 110
------
RETAIL - SPECIALTY (0.6%)
3,600 Borders Group, Inc.* 116
7,000 Phillips-Van Heusen Corp. 89
------
205
------
TELEPHONES (1.2%)
4,500 360 Communications Co. 108
2,000 AT&T 124
4,000 Sprint Corp. 168
------
400
------
TOBACCO (1.1%)
2,000 Philip Morris Companies, Inc. 208
4,200 RJR Nabisco Holdings Corp. 130
------
338
------
TRANSPORTATION - MISCELLANEOUS (0.4%)
5,000 APL Ltd.* 131
------
Total domestic stocks (cost: $5,673) 7,258
------
</TABLE>
1996 SEMIANNUAL REPORT B-37
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
U.S. GOVERNMENT & AGENCY ISSUES (7.6%)
<TABLE>
<CAPTION>
Principal Market
Amount Coupon Value
(000) Security Rate Maturity (000)
- --------- -------- ------ -------- ------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AGENCY ISSUES
$ 2,430 Federal Home Loan Bank
(cost: $2,429) 5.30% 7/01/96 $ 2,429
-------
Total investments (cost: $27,496) $32,022
=======
PORTFOLIO SUMMARY BY INDUSTRY
Healthcare 10.0%
U.S. Government 7.6
Telecommunications 6.5
Banks 6.2
Retail 5.7
Oil 5.5
Electronics 3.8
Automobiles 2.5
Aerospace/Defense 2.3
Publishing 2.3
Chemicals 2.2
Electric Power 2.2
Electrical Equipment 2.2
Auto Parts 1.9
Machinery-Diversified 1.9
Broadcasters 1.8
Tobacco 1.8
Office Equipment & Supplies 1.7
Transportation - Miscellaneous 1.6
Beverages - Alcoholic 1.5
Building Materials Group 1.5
Computer Software & Service 1.5
Real Estate 1.5
Steel 1.5
Conglomerates 1.4
Engineering & Construction 1.4
Entertainment 1.3
Manufacturing - Diversified Industries 1.3
Specialized Services 1.3
Beverages - Soft Drink 1.2
Foods 1.0
Metals - Miscellaneous 1.0
Paper & Forest Products 1.0
Other 12.0
------
100.1%
======
</TABLE>
*Non-income producing
See accompanying "Notes to Portfolio of Investments in Securities" on page B-42.
B-38 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES JUNE 30, 1996 (UNAUDITED)
BASIC VALUE STOCKS (61.0%)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
AEROSPACE/DEFENSE (6.0%)
12,000 B.F. Goodrich Co. $ 449
10,000 Boeing Co. 871
10,000 Rockwell International Corp. 572
------
1,892
------
AUTOMOBILES (2.4%)
12,000 Chrysler Corp. 744
------
BANK HOLDING COMPANIES - MONEY CENTER (1.2%)
5,000 Bankers Trust New York Corp. 369
------
CHEMICALS (5.7%)
6,000 Dow Chemical Co. 456
25,000 Monsanto Co. 812
13,000 Union Carbide Corp. 517
------
1,785
------
DISTRIBUTION & PIPELINES (1.3%)
14,000 NICOR, Inc. 397
------
DRUGS (2.0%)
14,500 Pharmacia & Upjohn, Inc. 643
------
ELECTRIC POWER (2.8%)
18,000 Houston Industries, Inc. 443
10,000 Texas Utilities Co. 428
------
871
------
HEALTHCARE - DIVERSIFIED (3.6%)
10,000 American Home Products Corp. 601
6,000 Bristol-Myers Squibb Co. 540
------
1,141
------
INSURANCE - PROPERTY/CASUALTY (3.7%)
17,000 Allstate Corp. 776
8,000 Hartford Steam Boiler Inspection & Insurance Co. 393
------
1,169
------
MACHINERY - DIVERSIFIED (1.7%)
13,800 Deere & Co. 552
------
MANUFACTURING - DIVERSIFIED INDUSTRIES (2.8%)
7,000 Caterpillar, Inc. 474
6,000 Minnesota Mining & Manufacturing Co. 414
------
888
------
OFFICE EQUIPMENT & SUPPLIES (1.5%)
9,000 Xerox Corp. 482
------
OIL - DOMESTIC (4.3%)
7,000 Amerada Hess Corp. 375
4,000 Atlantic Richfield Co. 474
20,000 Occidental Petroleum Corp. 495
------
1,344
------
OIL - INTERNATIONAL (4.3%)
7,000 Chevron Corp. 413
4,000 Mobil Corp. 449
6,000 Texaco, Inc. 503
------
1,365
------
</TABLE>
1996 SEMIANNUAL REPORT B-39
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Market
Number Value
of Shares Security (000)
- --------- -------- ------
<S> <C> <C>
PAPER & FOREST PRODUCTS (2.9%)
20,000 James River Corp. $ 528
8,000 Union Camp Corp. 390
-------
918
-------
RETAIL - GENERAL MERCHANDISING (4.3%)
15,000 J.C. Penney Company, Inc. 787
12,000 Sears, Roebuck & Co. 584
-------
1,371
-------
TELECOMMUNICATIONS (3.1%)
8,000 SBC Communications Corp. 394
14,000 Sprint Corp. 588
-------
982
-------
TELEPHONES (2.9%)
10,000 GTE Corp. 448
10,000 NYNEX Corp. 475
-------
923
-------
TOBACCO (4.5%)
9,000 American Brands, Inc. 408
6,000 Philip Morris Companies, Inc. 624
15,000 Universal Corp. 398
-------
1,430
-------
Total basic value stocks (cost: $14,296) 19,266
=======
</TABLE>
CORPORATE AND MUNICIPAL OBLIGATIONS (30.7%)
<TABLE>
<CAPTION>
Principal
Amount Coupon
(000) Rate Maturity
- --------- ------ --------
<S> <C> <C> <C>
BANK HOLDING COMPANIES -
MAJOR REGIONAL (3.0%)
$ 1,000 First Tennessee National Corp. 6.75% 11/15/05 951
-----
BANKS (6.4%)
1,000 Capital One Bank, MTN 7.35 6/20/00 1,008
1,000 Corporacion Andina De Fomento,
Global Bonds 7.38 7/21/00 1,000
-----
2,008
-----
ELECTRONICS - INSTRUMENTATION (3.1%)
1,000 Tektronix Inc. 7.50 8/01/03 995
-----
HEALTHCARE - MISCELLANEOUS (3.0%)
1,000 Caremark International, Inc., Notes 6.88 8/15/03 944
-----
MACHINE TOOLS (3.1%)
1,000 Giddings and Lewis, Inc. 7.50 10/01/05 971
-----
REAL ESTATE INVESTMENT TRUSTS (6.4%)
1,000 Merry Land and Investment Co., Notes 7.25 6/15/05 972
1,000 Nationwide Health Properties, Inc., MTN 8.61 3/01/02 1,042
-----
2,014
-----
</TABLE>
B-40 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND
PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued) JUNE 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
Principal Market
Amount Coupon Value
(000) Rate Maturity (000)
- --------- ------ -------- ------
<S> <C> <C> <C> <C>
RETAIL - FOOD CHAINS (3.0%)
$ 1,000 Great Atlantic & Pacific Tea, Inc. 7.70% 1/15/04 $ 957
-------
RETAIL - GENERAL MERCHANDISING (2.7%)
1,000 K Mart Corp., Notes 8.13 12/01/06 865
-------
Total corporate and municipal obligations (cost: $9,934) 9,705
-------
U.S. GOVERNMENT & AGENCY ISSUES (5.7%)
U.S. GOVERNMENT
2,000 U.S. Treasury Bonds (cost: $1,809) 6.25 8/15/23 1,812
-------
SHORT-TERM (1.6%)
COMMERCIAL PAPER
502 Renaissance Energy Co. (cost: $502) 5.65 7/01/96 502
-------
Total investments (cost: $26,541) $31,285
=======
</TABLE>
See accompanying "Notes to Portfolio of Investments in Securities" on page B-42.
1996 SEMIANNUAL REPORT B-41
<PAGE>
USAA LIFE INVESTMENT TRUST
NOTES TO PORTFOLIOS OF INVESTMENTS IN SECURITIES
JUNE 30, 1996 (UNAUDITED)
GENERAL NOTES
Market values of securities are determined by procedures and practices discussed
in Note 1 to the Trust's financial statements.
The cost of securities for federal income tax purposes is approximately the same
as that reported in the financial statements.
The percentages shown represent the percentage of the investments to net assets.
PORTFOLIO DESCRIPTION
ABBREVIATIONS
CP Commercial Paper
CRE Credit Enhanced
IDA Industrial Development
Authority/Agency
MTN Medium-Term Note
RB Revenue Bond
CATEGORIES
& DEFINITIONS
The securities in USAA Life VA Money Market Fund are divided into three
categories - fixed rate instruments, put bonds, and variable rate demand notes.
FIXED RATE INSTRUMENTS - consist of bonds, notes and commercial paper. The
coupon rate is constant to maturity. Prior to maturity, the price of a fixed
rate instrument generally varies inversely to the movement of interest rates.
At maturity, the security pays face value.
PUT BONDS - provide the right to tender, or put, the bond for redemption at face
value at specific tender dates prior to final maturity. The put feature
shortens the effective maturity to the next tender date. Between tender dates,
the price of a put bond generally varies inversely to the movement of interest
rates.
VARIABLE RATE DEMAND NOTES (VRDN) - provide the right, on any business day, to
demand, or put, the security for redemption at face value on either that day or
in seven days. The interest rate is adjusted at the stipulated daily, weekly,
or monthly interval to a rate that reflects current market conditions. In money
market funds, the VRDNs' effective maturity is the longer of the next put date
or the interest reset date rather than the final maturity. Most VRDNs possess a
credit enhancement.
CREDIT ENHANCEMENT (CRE) - adds the financial strength of the provider to
support the underlying obligor's debt service obligations and/or the put option.
The enhancement may be provided by either a high-quality bank, insurance company
or other corporation, or a collateral trust. Typically, the rating agencies
evaluate the security based upon the credit standing of the credit enhancement.
B-42 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
STATEMENTS OF ASSETS AND LIABILITIES
(In Thousands) June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
USAA Life USAA Life USAA Life USAA Life
VA Money USAA Life VA Growth VA World VA Diversified
Market VA Income and Income Growth Assets
Fund Fund Fund Fund Fund
-------- ---------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at market value
(identified cost of $12,145; $27,527; $34,243;
$27,496; and $26,541, respectively) $ 12,145 $ 28,730 $ 41,412 $ 32,022 $ 31,285
Cash 1 14 5 3 2
Cash denominated in foreign currencies
(identified cost of $136) - - - 137 -
Receivables:
Capital shares sold 340 90 22 52 45
Dividends and interest 13 314 105 74 281
Securities sold - - - 205 -
Unrealized appreciation on foreign currency
contracts held, at value - - - 2 -
-------- -------- -------- -------- --------
Total assets 12,499 29,148 41,544 32,495 31,613
-------- -------- -------- -------- --------
LIABILITIES
Securities purchased - - 886 472 -
Unrealized depreciation on foreign currency contracts
held, at value - - - 1 -
Capital shares redeemed 377 - - - -
USAA Life Insurance Company 3 8 10 16 8
-------- -------- -------- -------- --------
Total liabilities 380 8 896 489 8
-------- -------- -------- -------- --------
Net assets applicable to capital shares outstanding $ 12,119 $ 29,140 $ 40,648 $ 32,006 $ 31,605
======== ======== ======== ======== ========
REPRESENTED BY:
Paid-in-capital $ 12,119 $ 27,640 $ 32,393 $ 26,186 $ 26,103
Accumulated undistributed net investment income - 946 412 291 632
Accumulated net realized gain (loss) on investments - (649) 674 1,002 126
Net unrealized appreciation of investments - 1,203 7,169 4,526 4,744
Net unrealized appreciation on foreign currency translations - - - 1 -
-------- -------- -------- -------- --------
Net assets applicable to capital shares outstanding $ 12,119 $ 29,140 $ 40,648 $ 32,006 $ 31,605
======== ======== ======== ======== ========
Capital shares outstanding unlimited number of shares
authorized, no par value 12,119 2,688 2,931 2,533 2,503
======== ======== ======== ======== ========
Net asset value, redemption price,
and offering price per share $ 1.00 $ 10.84 $ 13.87 $ 12.64 $ 12.63
======== ======== ======== ======== ========
</TABLE>
See accompanying "Notes to Financial Statements" on page B-47
1996 SEMIANNUAL REPORT B-43
<PAGE>
USAA LIFE INVESTMENT TRUST
STATEMENTS OF OPERATIONS
(In Thousands) Six-Month Period Ending June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
USAA Life USAA Life USAA Life USAA Life
VA Money USAA Life VA Growth VA World VA Diversified
Market VA Income and Income Growth Assets
Fund Fund Fund Fund Fund
--------- ---------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME:
Income (net of foreign taxes withheld of $0,
$0, $0, $36, and $0, respectively):
Dividends $ - $ 101 $ 432 $ 338 $ 286
Interest 280 892 39 46 395
-------- -------- --------- -------- --------
Total income 280 993 471 384 681
-------- -------- --------- -------- --------
Expenses:
Advisory fees 10 27 34 28 28
Administrative fees 19 19 19 19 19
Custodian's fees 20 21 26 55 23
Trustees' fees 2 2 2 2 2
Audit fees 21 21 21 21 21
Legal fees 10 10 10 10 10
Other 1 1 1 1 1
-------- -------- --------- -------- --------
Total expenses before reimbursement 83 101 113 136 104
Expenses reimbursed (65) (54) (54) (46) (55)
-------- -------- --------- -------- --------
Total expenses after reimbursement 18 47 59 90 49
-------- -------- --------- -------- --------
Net investment income 262 946 412 294 632
-------- -------- --------- -------- --------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments - (649) 674 1,002 134
Foreign currency transactions - - - (3) -
Change in net unrealized appreciation/depreciation on:
Investments - (1,413) 2,049 2,294 789
Translation of assets and liabilities in foreign currencies - - - 1 -
-------- -------- --------- -------- --------
Net realized and unrealized gain - (2,062) 2,723 3,294 923
-------- -------- --------- -------- --------
Increase (decrease) in net assets resulting from operations $ 262 $ (1,116) $ 3,135 $ 3,588 $ 1,555
======== ======== ========= ======== ========
</TABLE>
See accompanying "Notes to Financial Statements" on page B-47.
B-44 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(In Thousands) Six-Month Period Ending June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
USAA Life USAA Life USAA Life USAA Life
VA Money USAA Life VA Growth VA World VA Diversified
Market VA Income and Income Growth Assets
Fund Fund Fund Fund Fund
--------- ---------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income $ 262 $ 946 $ 412 $ 294 $ 632
Net realized gain (loss) on:
Investments - (649) 674 1,002 134
Foreign currency transactions - - - (3) -
Change in net unrealized appreciation/depreciation on:
Investments - (1,413) 2,049 2,294 789
Foreign currency translations - - - 1 -
-------- ------- ------- ------- -------
Increase (decrease) in net assets resulting from operations 262 (1,116) 3,135 3,588 1,555
-------- ------- ------- ------- -------
Distributions to shareholders from:
Net investment income (262) - - - -
-------- ------- ------- ------- -------
From capital share transactions:
Shares sold 39,214 6,024 9,486 3,993 3,918
Shares issued for dividends reinvested 262 - - - -
Shares redeemed (35,159) (1,591) (734) (281) (179)
-------- ------- ------- ------- -------
Increase in net assets from capital share transactions 4,317 4,433 8,752 3,712 3,739
-------- ------- ------- ------- -------
Net increase in net assets 4,317 3,317 11,887 7,300 5,294
Net assets:
Beginning of period 7,802 25,823 28,761 24,706 26,311
-------- ------- ------- ------- -------
End of period $ 12,119 $29,140 $40,648 $32,006 $31,605
======== ======= ======= ======= =======
Undistributed net investment income included in net assets:
Beginning of period $ - $ - $ - $ - $ -
======== ======= ======= ======== ========
End of period $ - $ 946 $ 412 $ 291 $ 632
======== ======= ======= ======== ========
Change in shares outstanding:
Shares sold 39,214 552 705 330 317
Shares issued for dividends reinvested 262 - - - -
Shares redeemed (35,159) (146) (56) (23) (14)
-------- -------- --------- -------- --------
Increase in shares outstanding 4,317 406 649 307 303
======== ======= ======= ======== ========
</TABLE>
See accompanying "Notes to Financial Statements" on page B-47.
1996 SEMIANNUAL REPORT B-45
<PAGE>
USAA LIFE INVESTMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(In Thousands) Period Ending December 31, 1995*
<TABLE>
<CAPTION>
USAA Life USAA Life USAA Life USAA Life
VA Money USAA Life VA Growth VA World VA Diversified
Market VA Income and Income Growth Assets
Fund Fund Fund Fund Fund
--------- ---------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
From operations:
Net investment income $ 247 $ 1,585 $ 650 $ 324 $ 1,117
Net realized gain (loss) on:
Investments - 642 598 1,447 277
Foreign currency transactions - - - (4) -
Change in net unrealized appreciation on investments - 2,616 5,120 2,232 3,955
-------- ------- ------- ------- -------
Increase in net assets resulting from operations 247 4,843 6,368 3,999 5,349
-------- ------- ------- ------- -------
Distributions to shareholders from:
Net investment income (247) (1,585) (650) (320) (1,117)
-------- ------- ------- ------- -------
Net realized gains - (642) (598) (1,447) (285)
-------- ------- ------- ------- -------
From capital share transactions:
Shares sold 22,742 21,078 22,675 20,852 21,130
Shares issued for dividends reinvested 247 2,227 1,248 1,768 1,402
Shares redeemed (15,187) (98) (282) (146) (168)
-------- ------- ------- ------- -------
Increase in net assets from capital share transactions 7,802 23,207 23,641 22,474 22,364
-------- ------- ------- ------- -------
Net increase in net assets 7,802 25,823 28,761 24,706 26,311
Net assets:
Beginning of period - - - - -
-------- ------- ------- ------- -------
End of period $ 7,802 $25,823 $28,761 $24,706 $26,311
======== ======= ======= ======= =======
Change in shares outstanding:
Shares sold 22,742 2,093 2,205 2,079 2,097
Shares issued for dividends reinvested 247 197 99 159 117
Shares redeemed (15,187) (8) (22) (12) (14)
-------- ------- ------- -------- --------
Increase in shares outstanding 7,802 2,282 2,282 2,226 2,200
======== ======= ======= ======== ========
</TABLE>
*Funds commenced operation January 5, 1995.
See accompanying "Notes to Financial Statements" on page B-47.
B-46 SEMIANNUAL REPORT 1996
<PAGE>
USAA LIFE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(IN THOUSANDS) JUNE 30, 1996 (UNAUDITED)
1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USAA LIFE INVESTMENT TRUST (the Trust), registered under the Investment Company
Act of 1940, is a diversified, open-end management investment company organized
as a Delaware business trust consisting of five separate funds. The funds
commenced operation January 5, 1995 with an initial investment from USAA Life
Insurance Company (USAA Life). USAA Life is a wholly owned subsidiary of United
Services Automobile Association (USAA), a large, diversified financial services
institution.
The investment objective of USAA Life Variable Annuity Money Market Fund (USAA
Life VA Money Market Fund) is to seek the highest level of current income
consistent with preservation of capital and maintenance of liquidity. The
investment objective of USAA Life Variable Annuity Income Fund (USAA Life VA
Income Fund) is to seek maximum current income without undue risk to principal.
The investment objective of USAA Life Variable Annuity Growth and Income Fund
(USAA Life VA Growth and Income Fund) is to seek capital growth and current
income. The investment objective of USAA Life Variable Annuity World Growth
Fund (USAA Life VA World Growth Fund) is to seek long-term capital appreciation.
The investment objective of USAA Life variable Annuity Diversified Assets Fund
(USAA Life VA Diversified Assets Fund) is to seek long-term capital growth,
consistent with preservation of capital and balanced by current income.
Shares of the Trust currently are offered to the Separate Account of USAA Life
Insurance Company (the Separate Account) to serve as the funding medium for
certain variable annuity contracts offered by USAA Life to USAA members and
families of USAA members as well as the general public.
A. SECURITY VALUATION
The value of each security is determined (as of the close of trading on the New
York Stock Exchange on each business day the Exchange is open) as set forth
below:
1. Portfolio securities, except as otherwise noted, traded primarily on a
domestic securities exchange are valued at the last sales price on that
exchange. Portfolio securities traded primarily on foreign securities exchanges
are generally valued at the closing values of such securities on the exchange
where primarily traded. If no sale is reported, the latest bid price is
generally used depending upon local custom or regulation.
2. Over-the-counter securities are priced at the last sales price or, if not
available, at the average of the bid and asked prices.
3. Securities purchased with maturities of 60 days or less and, pursuant to
Rule 2a-7 of the Securities and Exchange Commission, all securities in the USAA
Life VA Money Market Fund are stated at amortized cost which approximates market
value.
4. Other debt and government securities are valued each business day by a
pricing service (the Service) approved by the funds' Board of Trustees. The
Service uses the mean between quoted bid and asked prices or the last sale price
to price securities when, in the Service's judgement, these prices are readily
available and are representative of the securities' market values. For many
securities, such prices are not readily available. The Service generally prices
these securities based on methods which include consideration of yields or
prices of securities of comparable quality, coupon, maturity and type,
indications as to values from dealers in securities, and general market
conditions.
5. Securities which cannot be valued by the methods set forth above, and all
other assets, are valued in good faith at fair value, using methods determined
by the investment advisor under the general supervision of the Board of
Trustees.
B. FEDERAL TAXES
The fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of their income to their shareholders, the Separate Account
and USAA Life. Therefore, no federal income or excise tax provision is
required.
C. INVESTMENTS IN SECURITIES
As is common in the industry, security transactions are accounted for on the
date the securities are purchased or sold (trade date). Gain or loss from sales
of investment securities is computed on the identified cost basis. Dividend
income, less foreign taxes, if any, is recorded on the ex-dividend date. If the
ex-dividend date has passed, certain dividends from foreign securities are
recorded upon notification. Interest income is recorded on the accrual basis.
Discounts and premiums on short-term and long-term securities are amortized
over the life of the respective securities.
D. FOREIGN CURRENCY TRANSLATIONS
The assets of the USAA Life VA World Growth Fund (the Fund) may be invested in
the securities of foreign issuers. Since the accounting records of the Fund
are maintained in U.S. dollars, foreign currency amounts are translated into
U.S. dollars on the following basis:
1996 SEMIANNUAL REPORT B-47
<PAGE>
USAA LIFE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(In Thousands) (Continued) June 30, 1996 (Unaudited)
1. Market value of securities, other assets, and liabilities at the mean
between the bid and asked translation rates of such currencies against U.S.
dollars.
2. Purchases and sales of securities, income, and expenses at the rate of
exchange obtained from an independent pricing service on the respective dates of
such transactions.
Net realized and unrealized foreign currency gains/losses occurring during the
holding period of investments are a component of realized gain/loss on
investments and unrealized appreciation/depreciation on investments,
respectively.
Net realized foreign currency gains/losses arise from sales of foreign currency,
currency gains/losses realized between the trade and settlement dates on
security transactions, and the difference between amounts of dividends,
interest, and foreign withholding taxes recorded on the Fund's books and the
U.S. dollar equivalent of the amounts received. Net realized foreign currency
gains/losses have been reclassified from accumulated net realized gain/loss to
accumulated undistributed net investment income on the Statement of Assets and
Liabilities as such amounts are treated as ordinary income for tax purposes.
Net unrealized foreign currency exchange gains/losses arise from changes in the
value of assets and liabilities other than investments in securities resulting
from changes in the exchange rate.
E. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
may affect the reported amounts in the financial statements.
2) DISTRIBUTIONS
USAA LIFE VA MONEY MARKET FUND:
Net investment income is accrued daily as dividends and distributed monthly to
the shareholders, the Separate Account and USAA Life. All net investment income
available for distribution had been distributed at June 30, 1996. Distributions
of realized gains from security transactions not offset by capital losses are
made in the succeeding fiscal year to the shareholders, the Separate Account and
USAA Life.
USAA LIFE VA INCOME FUND, USAA LIFE VA GROWTH AND INCOME FUND,
USAA LIFE VA WORLD GROWTH FUND, AND USAA LIFE VA DIVERSIFIED ASSETS FUND:
Distributions of net investment income and realized gains from security
transactions not offset by capital losses are made to the shareholders, the
Separate Account and USAA Life in the succeeding fiscal year.
3) INVESTMENT TRANSACTIONS
Purchases and sales/maturities of securities, excluding short-term securities,
for the six-month period ending June 30, 1996 were as follows:
<TABLE>
<CAPTION>
USAA Life VA USAA Life VA
USAA Life VA Growth and USAA Life VA Diversified
Income Fund Income Fund World Growth Fund Assets Fund
------------- ------------- ---------------- ------------
<S> <C> <C> <C> <C>
Purchases $ 11,911 $ 10,195 $ 11,560 $ 7,257
Sales/Maturities $ 10,874 $ 2,060 $ 9,265 $ 3,101
</TABLE>
Purchases and sales/maturities of securities for the six-month period ending
June 30, 1996 for the USAA Life VA Money Market Fund were $66,440 and $62,231,
respectively.
Gross unrealized appreciation and depreciation of investments as of June 30,
1996 were as follows:
<TABLE>
<CAPTION>
USAA Life VA USAA Life VA
USAA Life VA Growth and USAA Life VA Diversified
Income Fund Income Fund World Growth Fund Assets Fund
------------- ------------- ---------------- ------------
<S> <C> <C> <C> <C>
Unrealized
Appreciation $ 1,318 $ 7,720 $ 5,093 $ 5,106
Depreciation $ 115 $ 551 $ 567 $ 362
</TABLE>
B-48 SEMIANNUAL REPORT 1996
<PAGE>
4) FOREIGN CURRENCY CONTRACTS
A forward currency contract (currency contract) is a commitment to purchase or
sell a foreign currency at a specified date, at a negotiated price. The USAA
Life VA World Growth Fund (the Fund) currently enters into currency contracts
only in connection with the purchase or sale of a security denominated in a
foreign currency. These contracts allow the Fund to "lock in" the U.S. dollar
price of the security. Currency contracts are valued on a daily basis using
foreign currency exchange rates obtained from an independent pricing service.
Risks of entering into currency contracts include the potential inability of the
counterparty to meet the terms of the contract and the Fund foregoing the
opportunity for potential profit.
At June 30, 1996, the terms of open foreign currency contracts in the Fund were
as follows:
<TABLE>
<CAPTION>
U.S. Dollar U.S. Dollar
Value Value Unrealized
Exchange Currency to be as of Currency to be as of Appreciation
Date Delivered 6/30/96 Received 6/30/96 (Depreciation)
- -------- -------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
7/01/96 22 Australian Dollar $ 17 18 U.S. Dollar $ 18 $ 1
7/01/96 24 U.S. Dollar 24 188 Hong Kong Dollar 24 -
7/01/96 12 U.S. Dollar 12 1,339 Japanese Yen 12 -
7/01/96 3 U.S. Dollar 3 19 Norwegian Krone 3 -
7/02/96 68 Australian Dollar 54 54 U.S. Dollar 54 -
7/02/96 97 U.S. Dollar 97 10,560 Japanese Yen 96 (1)
7/02/96 18 U.S. Dollar 18 114 Norwegian Krone 18 -
7/02/96 8 U.S. Dollar 8 199 Philippine Peso 8 -
7/03/96 59 Australian Dollar 46 46 U.S. Dollar 46 -
7/03/96 71 U.S. Dollar 71 46 Pound Sterling 72 1
7/03/96 9 U.S. Dollar 9 12 Singapore Dollar 9 -
7/03/96 15 U.S. Dollar 15 379 Thailand Baht 15 -
7/05/96 86 Australian Dollar 67 67 U.S. Dollar 67 -
----- ----- ----
$ 441 $ 442 $ 1
===== ===== ====
</TABLE>
5) TRANSACTIONS WITH AFFILIATES
A. ADVISORY FEES
The investment policies of the funds and the management of the funds' portfolios
are carried out by USAA Investment Management Company (USAA IMCO). USAA IMCO is
indirectly wholly owned by USAA. The funds' advisory fees are computed on an
annualized rate of 0.20% of the monthly average net assets of each fund of the
Trust for each calendar month. USAA Life, out of its general account, has agreed
to reimburse USAA IMCO for the expenses it incurs in rendering services to the
Trust, but only to the extent these expenses exceed the amount of the above
advisory fees.
B. ADMINISTRATIVE FEES
As outlined in the Underwriting and Administrative Services Agreement by and
between USAA Life, the Trust and USAA IMCO, USAA Life provides certain
management, administrative, legal, clerical, accounting and record-keeping
services necessary or appropriate to conduct the Trust's business and
operations. Fees are based on estimated time spent to provide services.
C. EXPENSES REIMBURSED
USAA Life, out of its general account, has agreed to pay directly or reimburse
the Trust for Trust expenses to the extent that such expenses exceed 0.65% of
the monthly average net assets of the USAA Life VA World Growth Fund and 0.35%
of the monthly average net assets of each other fund. Expenses include advisory
fees as discussed above.
D. UNDERWRITING AND DISTRIBUTION AGREEMENT
The Trust has an agreement with USAA IMCO for exclusive underwriting and
distribution of the funds' shares on a continuing best efforts basis. This
agreement provides that USAA IMCO will receive no fee or other remuneration for
such services.
E. SHARE OWNERSHIP
At June 30, 1996, USAA Life owned 2,154 shares (17.8%) of the USAA Life VA Money
Market Fund, 2,189 shares (81.4%) of the USAA Life VA Income Fund, 2,078 shares
(70.9%) of the USAA Life VA Growth and Income Fund, 2,053 shares (81.0%) of the
USAA Life VA World Growth Fund, and 2,113 shares (84.4%) of the USAA Life VA
Diversified Assets Fund. All other shares are owned by the Separate Account.
1996 SEMIANNUAL REPORT B-49
<PAGE>
USAA LIFE INVESTMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(Continued) June 30, 1996 (Unaudited)
6) FINANCIAL HIGHLIGHTS
Per share operating performance for a share outstanding throughout each
period is as follows:
<TABLE>
<CAPTION>
USAA Life VA
USAA Life VA USAA Life VA Growth And Income
Money Market Fund Account Income Fund Account Fund Account
---------------------------------- ---------------------------------- ---------------------------------
Six-Month Period Period Ending Six-Month Period Period Ending Six-Month Period Period Ending
Ending June 30, December 31, Ending June 30, December 31, Ending June 30, December 31,
1996 1995(a) 1996 1995(a) 1996 1995(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at
beginning of period $ 1.00 $ 1.00 $ 11.32 $ 10.00 $ 12.60 $ 10.00
Net investment income 0.03 (b) 0.06 (b) 0.38 (b) 0.78 (b) 0.16 (b) 0.34 (b)
Net realized and
unrealized gain (loss) - - (0.86) 1.61 1.11 2.83
Distributions from net
investment income (0.03) (0.06) - (0.76) - (0.30)
Distributions of
realized capital gains - - - (0.30) - (0.27)
------- ------- -------- -------- -------- --------
Net asset value at end
of period $ 1.00 $ 1.00 $ 10.84 $ 11.32 $ 13.87 $ 12.60
======= ======= ======== ======== ======== ========
Total return 2.57%(c) 5.69%(c) -4.24%(c) 23.88%(c) 10.08%(c) 31.72%(c)
Net assets at end of
period (000) $12,119 $ 7,802 $ 29,140 $ 25,823 $ 40,648 $ 28,761
Ratio of expenses to
average net assets 0.35%(d,e) 0.35%(d,e) 0.35%(d,e) 0.35%(d,e) 0.35%(d,e) 0.35%(d,e)
Ratio of net investment
income to average net
assets 5.08%(d,e) 5.55%(d,e) 6.95%(d,e) 7.07%(d,e) 2.42%(d,e) 2,82%(d,e)
Portfolio turnover - - 42.79% 55.08% 6.25% 17.73%
Average commission rate
paid per share - - 0.0500 0.0400 0.0483 0.0489
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Information is for the period from January 5, 1995 (commencement of
operations) to December 31, 1995.
(b) Calculated using weighted average shares.
(c) The total return of a fund refers to the percentage change in value of a
hypothetical investment, including the deduction of a proportional share of
fund expenses, and reflects reinvestment of all income and capital gains
distributions. Total returns for each period do not reflect insurance
expenses that apply at the Separate Account level such as risk and expense
charges. These expenses would reduce the total return for the period shown.
(d) Annualized. The ratio is not necessarily indicative of 12 months of
operations.
(e) The information contained in this table is based on actual expenses for the
period, after giving effect to reimbursements of expenses by USAA Life.
Absent such reimbursements, the funds' ratios would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Ratio of expenses to average
net assets 1.61%(d) 2.29%(d) 0.74%(d) 0.65%(d) 0.66%(d) 0.66%(d)
Ratio of net investment
income to average net
assets 3.82%(d) 3.61%(d) 6.56%(d) 6.77%(d) 2.11%(d) 2.51%(d)
</TABLE>
B-50 SEMIANNUAL REPORT 1996
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 1996 (Unaudited)
<TABLE>
<CAPTION>
6) FINANCIAL HIGHLIGHTS, CONTINUED
Per share operating performance for a share outstanding throughout each period is as follows:
USAA Life VA USAA Life VA
World Growth Fund Diversified Assets Fund
----------------------------------------- ------------------------------------------
Six-Month Period Period Ending Six-Month Period Period Ending
Ending June 30, 1996 December 31, 1995 (a) Ending June 30, 1996 December 31, 1995 (a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value at
beginning of period $ 11.10 $ 10.00 $ 11.96 $ 10.00
Net investment income 0.12 (b) 0.17 (b) 0.27 (b) 0.55 (b)
Net realized and unrealized gain (loss) 1.42 1.79 0.40 2.08
Distributions from net investment income - (0.16) - (0.53)
Distributions of realized capital gains - (0.70) - (0.14)
----------- -------- --------- ---------
Net asset value at end of period $ 12.64 $ 11.10 $ 12.63 $ 11.96
=========== ======== ========= =========
Total return 13.87%(c) 19.55%(c) 5.60%(c) 26.33%(c)
Net assets at end of period (000) $ 32,006 $ 24,706 $ 31,605 $ 26,311
Ratio of expenses to average net assets 0.65%(d,e) 0.65%(d,e) 0.35%(d,e) 0.35%(d,e)
Ratio of net investment income
to average net assets 2.09%(d,e) 1.55%(d,e) 4.43%(d,e) 4.93%(d,e)
Portfolio turnover 34.47% 78.86% 11.13% 58.87%
Average commission rate paid per share 0.0004 0.0076 0.0500 0.0482
- ------------------------------------------------------------------------------------------------------------------------------------
(a) Information is for the period from January 5, 1996 (commencement of operations) to December 31, 1995.
(b) Calculated using weighted average shares.
(c) The total return of a fund refers to the percentage change in value of a hypothetical investment, including the deduction of a
proportional share of fund expenses, and reflects reinvestment of all income and capital gains distributions. Total returns for
each period do not reflect insurance expenses that apply at the Separate Account level such as risk and expense charges. These
expenses would reduce the total return for the period shown.
(d) Annualized. The ratio is not necessarily indicative of 12 months of operations.
(e) The information contained in this table is based on actual expenses for the period, after giving effect to reimbursements of
expenses by USAA Life. Absent such reimbursements, the funds' ratios would have been:
Ratio of expenses to average net assets 0.97%(d) 0.87%(d) 0.73%(d) 0.64%(d)
Ratio of net investment income
to average net assets 1.77%(d) 1.33%(d) 4.05%(d) 4.64%(d)
</TABLE>
1996 SEMIANNUAL REPORT B-51
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
USAA LIFE INSURANCE COMPANY
To discuss your investment strategy,
the Variable Annuity's features or
performance,
call an Account Representative toll free
Monday - Friday 7:15 a.m. to 8:00 p.m.
1-800-531-4440
(456-9050 in San Antonio)
----------------------------------------------------
If you wish to discuss your particular contract,
transfer money from one fund account to another or select a payout
option call a Service Representative, toll free,
Monday - Friday 8 a.m. to 5 p.m.
1-800-531-4265
----------------------------------------------------
For variable annuity unit values
call our recorder QUOTELINE,
24-hours a day, 7 days a week
1-800-531-8233
(498-6860 in San Antonio)
[LOGO OF USAA APPEARS HERE]
USAA Life Insurance Company
9800 Fredericksburg Road
San Antonio, Texas 78288
(c) Copyright, 1996, USAA. All rights Reserved.
